Note 6 — Contingent liabilities

Contingent liabilities consist primarily of claims and suits resulting from labor, equal employment opportunity and environmental issues, property damage claims, injuries on postal properties, issues arising from postal contracts, personal claims and traffic accidents.

Each quarter, new claims and litigation are evaluated for the probability of an adverse outcome. If a claim is deemed probable of an unfavorable outcome and the amount of potential settlement is estimable, a liability for the loss is recorded. Prior claims and litigation are also reviewed quarterly and, when necessary, the loss accrual is adjusted for settlements or revisions to prior estimates. No individual claim currently assessed as probable of an unfavorable outcome is material to the financial statements when taken as a whole. The following table summarizes contingent liabilities provided for in our financial statements at September 30, 2010 and 2009:


Contingent Liabilites (dollars in millions)





$ 189

$ 174

Equal Employment Opportunity











Total Contingent Liabilities

$ 314

$ 301

Adequate provision has been made for probable losses from claims and suits. The current portion of this liability at September 30, 2010 and 2009, of $114 million and $86 million, respectively, is included on the Balance Sheets in “Trade payables and accrued expenses.” The noncurrent portion of $200 million and $215 million at September 30, 2010 and 2009, respectively, is included in “Contingent liabilities and other” in the Balance Sheets.

The Postal Service also has other claims and lawsuits which are possible of an unfavorable outcome. The range of possible losses is $1.4 billion to $1.6 billion at September 30, 2010. No provisions for these possible losses are included in the financial statements.