For 2010, other operating expenses of $9,200 million, decreased $60 million, or 0.6%, compared to 2009. Supplies and services, which include advertising expenses, were $2,236 million in 2010, a $85 million decrease from 2009. Advertising costs increased by $42 million in 2010, or 40.3%, primarily due to increased promotion of the Priority Mail Flat Rate products. Information technology and communications expense of $664 million in 2010 returned to 2008 levels and thus decreased $58 million, or 8.0%, from 2009 expense of $722 million when communications upgrades occurred.
Other Operating Expenses (dollars in millions)
|
2010
|
2009
|
2008
|
Supplies and Services
|
$ 2,236
|
$ 2,321
|
$ 2,597
|
Depreciation and Amortization
|
2,469
|
2,270
|
2,319
|
Rent and Utilities
|
1,692
|
1,778
|
1,779
|
Vehicle Maintenance Service
|
820
|
760
|
926
|
Information Technology and Communications
|
664
|
722
|
658
|
Rural Carrier Equipment Maintenance Allowance
|
534
|
510
|
545
|
Other
|
785
|
899
|
961
|
Total Other Operating Expenses
|
$ 9,200
|
$ 9,260
|
$ 9,785
|
Depreciation and amortization of $2,469 million in 2010 was $199 million, or 8.8%, greater than 2009 depreciation and amortization of $2,270 million, as a result of a reassessment of the useful lives of certain properties and the reclassification of certain leases from operating to capital leases. As a result of this reclassification, rent expense decreased and depreciation and amortization increased. Vehicle maintenance service expense of $820 million in 2010, which includes fuel costs used by the carrier fleet, increased by $60 million, or 7.9%, from 2009, primarily as a result of the previously discussed increase in fuel costs during the year. Other expenses, which included travel, were $785 million, or 12.7%, less than last year. Travel expenses were reduced by 17.0% as a result of stringent cost control efforts.
In 2009, other operating expenses of $9,260 million decreased $525 million, or 5.4%, from the comparable 2008 amount. The reduction was driven by a decrease in supplies and services of $276 million, or 10.6%. Vehicle maintenance service expense, which includes the carrier fleet fuel costs, decreased by $166 million, or 17.9%, primarily as a result of lower fuel costs in 2009 compared to 2008. Depreciation and amortization expense decreased by $49 million, or 2.1%, as a result of lower equipment purchases while information technology and communications expense increased by $64 million, or 9.7%, as a result of upgrades of IT systems and voice communication services.
