glossary

Accruals Revenue and expenses that are recorded as they occur, even though they may not have actually been paid.

Amortize To reduce the value of an asset through regular charges to income over time; or to write off expenses by prorating them over a period of time.

Appropriation Public funds set aside by Congress for a specific purpose.

Capitalize To treat an expenditure as an asset; or to compute the present value of a future payment that will be paid over a period of time.

Contribution The difference between the revenue from a class of mail and that class's volume-variable costs. For example, if a class of mail has revenue of $1.5 billion and volume-variable costs of $1 billion, its contribution is $500 million, which means that this class of mail covers its costs and contributes $500 million to the common costs of all mail services.

Delivery Confirmation A special service that provides the date of delivery or attempted delivery for Priority Mail and Standard Mail parcels, Bound Printed Matter and Library Mail.

Depreciate To periodically reduce the estimated value of an asset over the course of its useful life.

Direct Mail A form of advertising often employed by businesses to reach targeted groups of potential customers by mail.

Equity The difference between the value of all assets less all liabilities.

Express Mail The Postal Service's premium delivery service, providing guaranteed overnight delivery for documents and packages weighing up to 70 pounds. Both domestic and international services are offered.

First-Class Mail A class of mail including letters, postcards and postal cards, all matter wholly or partially in writing or typewriting, and all matter sealed or otherwise closed against inspection.

Fixed Asset Any tangible property such as buildings, machinery and equipment, furniture, and leasehold improvements.

Government Accountability Office (GAO) Investigative arm of legislative branch of federal government (Congress).

Generally Accepted Accounting Principles (GAAP) The rules and procedures of accepted accounting practice as defined by the Financial Accounting Standards Board.

Gross Domestic Product (GDP) The total market value of all the goods and services produced in one year in the United States.

Inspector General The Inspector General is appointed by and reports directly to the Governors of the Postal Service and is independent of postal management. The Office of Inspector General (OIG) primarily investigates and evaluates programs and operations of the Postal Service to ensure the efficiency and integrity of the postal system.

Leasehold An asset that gives the Postal Service the right to use property under a lease.

Liability Any debt or obligation the Postal Service is bound to pay.

Operating Margin A financial indication calculated by dividing income from operations by operating revenue.

Other Postemployment Benefits (OPEBS) OPEBS include retirement benefits other than pensions, such as retiree health benefits.

Periodicals A class of mail, formerly called second-class mail, that consists of magazines, newspapers and other publications.

Postal Inspection Service The investigative arm of the Postal Service responsible for investigating criminal acts involving the mails and misuse of the postal system.

Postal Rate Commission (PRC) An independent federal agency that makes recommendations concerning Postal Service requests for changes in postal rates and mail classifications.

Present Value The value today of a future payment that is discounted at a stated rate of compound interest. For example, the present value of $100 that will be paid to the Postal Service 10 years from now is about $38.55, if we discount that $100 at a rate equal to 10% interest compounded annually.

Priority Mail Priority Mail provides two- to three-day delivery service.

Processing and Distribution Center (P&DC) A large mail-sorting and dispatching plant that serves as a hub for mail originating from Post Offices, collection boxes and customer mailboxes, and large-volume mailers in a designated service area.

Receivable Money that is owed to the Postal Service.

Recognize To record in Postal Service accounts as income or expense.

Standard Mail Bulk advertising mail formerly known as third-class mail.

U.S. Mail Any mailable matter that is accepted for mail processing and delivery by the Postal Service.

Universal Service The Postal Service's mandate and commitment to the nation to provide mail delivery service at uniform and reasonable rates to everyone, everywhere.

Year As used in the financial section of this report, the Postal Service fiscal year, which is the 12-month period during which the Postal Service keeps accounts, beginning Oct. 1 and closing Sept. 30.