Note 8 - Commitments

Link to the 2001 Annual Report front page

Financial Statements 2001

NOTES to the FINANCIAL statements

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8 COMMITMENTS

At September 30, 2001, we estimate our financial commitment for approved Postal Service capital projects in progress to be approximately $1,887 million.

Our total rental expense for the years ended September 30 is summarized as follows (dollars in millions):

	2001	2000	1999

Non-cancelable real estate leases including related taxes	$ 863	$ 806	$ 766
Facilities leased from General Services
Administration subject to 120-day notice of cancellation	41	39	36
Equipment and other short-term rentals	312	254	431

Total	$ 1,216	$ 1,099	$ 1,233

At September 30, 2001, our future minimum lease payments for all non-cancelable leases are as follows (dollars in millions):

Year	Operating	Capital

2002	784	88
2003	758	88
2004	727	88
2005	676	88
2006	620	88
After 2006	5,818	562

	$ 9,383	$ 1,002
Less: Interest at 5.5%		257

Total capital lease obligations		745
Less: Short-term portion of capital lease obligations		48

Long-term portion of capital lease obligations		$ 697

Most of these leases contain renewal options for periods ranging from 3 to 20 years. Certain non-cancelable real estate leases give us the option to purchase the facilities at prices specified in the leases.

Capital leases included in buildings were $909 million in 2001 and $787 million in 2000. Total accumulated amortization is $211 million in 2001 and $163 million in 2000. Amortization expense for assets recorded under capital leases is included in depreciation expense.

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