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Record Revenue for Postal Service, Fuel Costs Boost Expenses

Press release from the issuing company

Nov 16, 2006 – Record levels of revenue and volume helped the U.S. Postal Service conclude its 2006 fiscal year with net income of $900 million, but increases in fuel and labor costs limited the overall financial success. The FY2006 year-end financial figures were released today by Chief Financial Officer and Executive Vice President H. Glen Walker during the November meeting of the Board of Governors. The Postal Service’s 2006 fiscal year began Oct. 1, 2005, and ended Sept. 30, 2006. Total revenue was $72.8 billion, and total expenses were $71.9 billion. The net deficiency, after including a $3 billion escrow allocation, as required by law, was $2.1 billion. Fuel and transportation costs totaled approximately $1.7 billion in FY2006, or $260 million more than anticipated, according to Walker. As one of the nation’s largest transportation and delivery organizations, the Postal Service is extremely sensitive to changing energy costs. Overall, total expenses increased by 4.9% over the previous year. Total mail volume increased in FY2006 by 1.4 billion pieces, or 0.7%. While the mail volume decline trend continued for First-Class Mail (0.5% decrease from the previous FY), Walker said growth in Standard and Priority Mail helped increase overall mail volume to 213 billion pieces. Walker also reported that the fiscal year ended with a record seventh consecutive year in positive total factor productivity (TFP). The Postal Service uses TFP to measure the change in the relationship between outputs, or workload, and all the resources used in producing these outputs. Total Factor Productivity increased by 0.4% in FY2006.

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