508-12/15/22-mh
November 9, 2022 - Draft (6.0)
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UNITED STATES
POSTAL REGULATORY COMMISSION
Washington, D.C. 20268-0001
FORM 10-K
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2022
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number N/A
UNITED STATES POSTAL SERVICE
(Exact name of registrant as specified in its charter)
Washington, D.C. 41-0760000
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
475 L'Enfant Plaza, S.W.
Washington, DC 20260
(202) 268-2000
(Address and telephone number, including area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Not applicable
Trading Symbol(s)
Not applicable
Name of each exchange on which registered
Not applicable
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes þ No ¨
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ¨ No ¨ Not Applicable þ
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ¨ No ¨ Not Applicable þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and
"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨
Smaller reporting company ¨ Emerging growth company ¨ Not Applicable þ
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨No þ
Documents incorporated by reference: None
2022 Report on Form 10-K United States Postal Service
TABLE OF CONTENTS
UNITED STATES POSTAL SERVICE
Page
Glossary of Acronyms
2
Cautionary Statements
4
Part I.
ITEM 1. Business 4
ITEM 1A. Risk Factors 10
ITEM 1B. Unresolved Staff Comments 16
ITEM 2. Properties 16
ITEM 3. Legal Proceedings 16
ITEM 4. Mine Safety Disclosures 16
Part II.
Market for Registrant's Common Equity, Related Stockholder Matters, and
ITEM 5. 16
Issuer Purchases of Equity Securities
Management's Discussion and Analysis of Financial Condition and Results of
Operations
16
ITEM 7.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 42
ITEM 8. Financial Statements and Supplementary Data 43
Changes in and Disagreements with Accountants on Accounting and Financial
ITEM 9. 69
Disclosure
ITEM 9A. Controls and Procedures 69
ITEM 9B. Other Information 73
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
73
Part III.
ITEM 10. Governors, Executive Officers, and Corporate Governance 73
ITEM 11. Executive Compensation 76
Security Ownership of Certain Beneficial Owners and Management and
ITEM 12. 87
Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Governor Independence 87
ITEM 14. Principal Accountant Fees and Services 88
Part IV.
ITEM 15. Exhibits and Financial Statement Schedules 89
ITEM 16. Form 10-K Summary 89
Signatures 90
Exhibits 92
GLOSSARY OF ACRONYMS AND DEFINED TERMS
The following are definitions of some of the terms or acronyms that may be used throughout this report:
Term or Acronym Definition
Annual Report Annual report on Form 10-K
AFL-CIO American Federation of Labor and Congress of Industrial Organizations
APWU American Postal Workers Union, AFL-CIO
ASC Accounting Standards Codification
ASU Accounting Standards Update
Board Board of Governors of the United States Postal Service
Board of Actuaries Board of Actuaries of the Civil Service Retirement System
CARES Act
Coronavirus Aid, Relief, and Economic Security Act, enacted as Public Law 116-136
CEO Chief Executive Officer
CFO Chief Financial Officer
COLA(s) Cost-of-living adjustment(s)
COR House Committee on Oversight and Reform
COVID-19 Coronavirus
CPI Consumer Price Index
CPI-U Consumer Price Index for All Urban Consumers
CPI-W Consumer Price Index for Urban Wage Earners and Clerical Workers
CSRDF Civil Service Retirement and Disability Fund
CSRS Civil Service Retirement System
DOL U.S. Department of Labor
DPMG Deputy Postmaster General
EEOC U.S. Equal Employment Opportunity Commission
EIS Environmental Impact Statement
Exchange Act
Securities and Exchange Act of 1934, enacted as Public Law 73-291
FASB Financial Accounting Standards Board
FECA Federal Employees' Compensation Act
FEGLI Federal Employees Group Life Insurance
FEHB Federal Employees Health Benefits
FERS Federal Employees Retirement System
FERS-FRAE Federal Employees Retirement System-Further Revised Annuity Employees
FERS-RAE Federal Employees Retirement System-Revised Annuity Employees
FFB Federal Financing Bank
GAAP Generally accepted accounting principles in the U.S.
HHS U.S. Department of Health and Human Services
House U.S. House
IRA Inflation Reduction Act of 2022, enacted as Public Law 117-169
MRA Minimum retirement age
NALC National Association of Letter Carriers, AFL-CIO
NGDV Next Generation Delivery Vehicle
2022 Report on Form 10-K United States Postal Service 2
NPMHU National Postal Mail Handlers Union, AFL-CIO
NRLCA National Rural Letter Carriers Association
NRP National Reassessment Process
OFO Office of Federal Operations
OPM U.S. Office of Personnel Management
OWCP Office of Workers' Compensation Programs
PAEA Postal Accountability and Enhancement Act, enacted as Public Law 109-435
PFP Pay-For-Performance
PMG Postmaster General
PRA Postal Reorganization Act, enacted as Public Law 91-375
PRC Postal Regulatory Commission
President U.S. President
PSHB Postal Service Health Benefits
PSRA Postal Service Reform Act of 2022, enacted as Public Law 117-108
PSRHBF Postal Service Retiree Health Benefits Fund
RFA Revenue Forgone Reform Act, enacted as Public Law 103-123
SEC U.S. Securities and Exchange Commission
Senate U.S. Senate
SFFAS Statement of Federal Financial Accounting Standards
TSP Thrift Savings Plan
U.S. United States
U.S.C. U.S. Code
USPS U.S. Postal Service
VP Vice President
2022 Report on Form 10-K United States Postal Service 3
CAUTIONARY STATEMENTS
This report contains forward-looking statements representing our best estimates of known and anticipated
trends believed relevant to future operations as of the date of this report. Statements other than those of current
or historical fact, and all statements accompanied by words such as "may," "will," "could," "expect," "believe,"
"plan," "estimate," "project," or other similar terminology, are intended to be forward-looking statements.
Forward-looking statements involve risks and uncertainties, many of which we cannot control or influence, that
could cause actual results to differ significantly from current estimates. Important factors that could cause actual
results to differ materially from those anticipated in our forward-looking statements include, but are not limited
to, those described under Part I., Item 1A. Risk Factors.
We have no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events, or any other reason.
PART I
ITEM 1. BUSINESS
In accordance with the provisions of the PRA, the United States Postal Service ("Postal Service," "USPS," "we,"
"our," and "us") began operations on July 1, 1971, succeeding the cabinet-level Post Office Department
established in 1792. The PRA enacted our status as an "independent establishment of the executive branch of
the Government of the United States" with the mandate to offer a "fundamental service" to the nation "at fair and
reasonable rates." Our governing statute is codified in Title 39 of the U.S. Code. We generally do not receive tax
dollars for operating expenses and rely solely on the sale of our products and services to fund our operations.
We report our performance as a single business and one reporting segment.
As used herein, all references to years in this report, unless otherwise stated, refer to fiscal years beginning
October 1 and ending September 30. All references to quarters, unless otherwise stated, refer to fiscal quarters.
We serve the American people in all areas of our nation, and through the universal service mission, bind our
nation together by maintaining and operating our unique, vital, and resilient infrastructure. We operate and
manage an extensive and integrated retail, processing, distribution, transportation, and delivery network
throughout the U.S., including its possessions and territories. We retain the largest physical and logistical
infrastructure of any non-military government institution, providing an indispensable foundation supporting an
ever-changing and evolving nationwide communication network. As such, we continue to support and expand
the nation’s physical infrastructure and are fundamental to our nation’s growth and prosperity.
We play a vital role as a driver of commerce and as a provider of delivery services that connect Americans to
one another and to every residential and business address, reliably, affordably, and securely. We serve both
consumer and commercial customers in the communications, distribution and delivery, advertising, and retail
markets throughout the nation and the world. As a result, we maintain a diverse customer base and are not
dependent upon a single customer or small group of customers. No single customer represented more than
10% of operating revenue for the years ended September 30, 2022, 2021, and 2020.
STRATEGY
To provide reliable, efficient, trusted, and affordable universal delivery service, we have established the
following four strategic areas of focus:
Deliver a World-Class Customer Experience;
Equip, Empower, Connect, and Engage Employees;
Innovate Faster to Deliver Value; and
Invest in our Future Platforms.
2022 Report on Form 10-K United States Postal Service 4
In March 2021, we published our vision and ten-year plan to achieve service excellence and financial stability
entitled Delivering for America (https://about.usps.com/what/strategic-plans/deliveringfor-america/assets/
USPS_Delivering-For-America.pdf).
Our comprehensive plan delivers:
A modernized Postal Service capable of providing world class service reliability at affordable prices;
Maintenance of universal six-day mail delivery and expanded seven-day package delivery;
Workforce stability and investment strategies that empower, equip, and engage each employee and put
them in the best possible position to succeed;
Innovation that grows revenue and meets changing marketplace needs; and
Financial sustainability to fund our universal service mission.
Our plan’s strategies for revenue growth, cost savings, and investment, combined with administrative actions,
will enable us to operate in a financially self-sustaining manner while fulfilling our universal service mission.
During 2022 and 2021, we have advanced key elements of our plan, but the plan must be implemented timely
and in full to meet our financial targets. In March 2022, we published our year one progress report detailing the
advances that have been made (https://about.usps.com/what/strategic-plans/delivering-for-america/assets/
usps-dfa-one-year-report.pdf).
GOVERNANCE
The law stipulates an eleven-member Board, which consists of our PMG, our DPMG, and nine independent
Governors. The PMG is appointed by the Governors, and the DPMG is appointed by the Governors and the
PMG. The Governors are appointed by the President with the advice and consent of the Senate. As of the date
of this report, we have a full Board.
SERVICES
We offer two categories of services, which are classified by the PAEA as Market-Dominant and Competitive
"products." However, throughout this report, we use the term "services" for consistency with other descriptions
of services we offer. We fulfill our legal mandate to provide universal services at fair and reasonable prices by
offering a variety of postal services to our many customers. Our Governors approve our prices and fees, subject
to a review process by the PRC.
We provide our services through 31,000 Post Offices, stations, and branches that are managed by the Postal
Service, 2,600 additional Contract Postal Units, Community Post Offices, Village Post Offices, a large network
of commercial outlets, which sell stamps and services on our behalf, and through our website www.usps.com.
Mail deliveries are made to 165 million city, rural, PO Box, and highway delivery points. Our operations are
conducted in the domestic market, although we engage with foreign postal administrations to enable customers
to both send and receive mail and packages internationally. Our international revenue represented 2% of our
operating revenue for the year ended September 30, 2022.
CLASSIFICATION AND PRICING
Periodic reclassification of services from Market-Dominant to Competitive, which requires PRC approval, is
necessary to rationalize service offerings. The additional flexibility provided in Competitive services allows us to
better offer services to meet customer needs, increase our business, and price our services competitively within
the markets in which we operate. Information regarding PRC decisions and pending dockets may be obtained
on the PRC website: www.prc.gov.
Market-Dominant Services
Market-Dominant services account for 58% of our annual operating revenues. Market-Dominant services
include, but are not limited to, First-Class Mail, Marketing Mail, Periodicals, some types of International Mail,
Package Services, and certain other services.
2022 Report on Form 10-K United States Postal Service 5
Price increases for these services are generally subject to a price cap, as determined by the PRC. Prices in
effect until August 29, 2021 were subject to a price cap system based solely on the increase in the CPI-U.
Prices in effect since August 29, 2021 are subject to a price cap system partially based on the increase in the
CPI-U, but also allowing for some additional pricing flexibility and authority, including a density-based rate
authority, retirement-based rate authority, and authority for non-compensatory classes.
Competitive Services
Competitive services, such as Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select,
Parcel Return Service, and some types of International Mail, have greater pricing flexibility and are not limited
by a price cap. As required by 39 U.S.C. §3633, prices for each Competitive service must cover its attributable
cost as determined using methodologies approved by the PRC, and Competitive services collectively must
contribute an appropriate share (as determined by the PRC) to the institutional costs of the Postal Service. In
general, we attempt to set our prices for Competitive services at rates that maximize revenue and contribution.
SERVICE CATEGORIES
Management uses the following broad service categories to describe and report on our performance:
First-Class Mail - This category encompasses letters, cards, or large envelopes destined for either
domestic (up to 13 ounces) or international (up to nearly 1 pound) delivery. First-Class Mail letters
include postcards, correspondence, bills or statements of account, and payments.
Marketing Mail - This category includes advertisements and marketing packages, weighing less than
16 ounces and meeting the criteria of not being required to be mailed using First-Class Mail services
because of the content. Marketing Mail is typically used for direct advertising to multiple delivery
addresses. Every Door Direct Mail enables customers to prepare direct mailings without names and
addresses for distribution to all business and residential customers on individual carrier routes.
Shipping and Packages - This category includes four sub-categories:
Priority Mail Services - This sub-category includes Priority Mail, which is offered as a service
both within the U.S. and abroad with the domestic, day-specified (non-guaranteed) delivery.
Priority Mail includes basic insurance up to $100 and is required for mailpieces that weigh more
than 13 ounces when the mailpiece contains matter that must be mailed as First-Class Mail.
This sub-category also includes Priority Mail Express, which provides an overnight to 2-day
delivery with money-back guaranteed service including tracking, proof of delivery, and basic
insurance up to $100. Priority Mail Express delivery is offered to most U.S. destinations for
delivery 365 days a year.
Parcel Services - This sub-category includes Parcel Select and Parcel Return services,
including "last-mile" services, and USPS Marketing Mail Parcels, which provide commercial
customers with a means of package shipment.
First-Class Package Services - This sub-category includes First-Class Package Service -
Commercial, a shipping option for high-volume shippers of packages that weigh less than one
pound and First-Class Package Service - Retail, for shipment of boxes, thick envelopes, or
tubes, weighing 13 ounces or less.
Package Services - This sub-category includes merchandise or printed matter, such as library
and media mail, weighing up to 70 pounds, and bound printed matter, weighing up to 15
pounds.
International Mail - This category offers international mail and shipping services with individual
customer contracts and agreements with foreign postal administrations. Priority Mail Express
International and Priority Mail International services compete in the e-commerce cross-border business.
These services provide an option for our consumer and business customers for much of their shipping
2022 Report on Form 10-K United States Postal Service 6
needs to more than 190 countries. Global Express Guaranteed is the premier international shipping
option that offers delivery to major markets.
Periodicals - This category encompasses the Periodicals class of mail offered for newspaper,
magazine, and newsletter distribution. Customers must receive prior authorization from us to use this
service.
Other - This broad category includes PO Box services, money orders, and USPS extra services. PO
Box services provide customers an additional method for mail delivery that is private and convenient.
Money orders offer customers a safe, convenient, and economical method for the remittance of
payments. Money orders are available for amounts up to $1,000, can be purchased and cashed at most
Post Offices, or can be deposited or negotiated at financial institutions. USPS Extra Services offer a
variety of service enhancements that provide security, proof of delivery, or loss recovery. These services
include: Certified Mail, Registered Mail, Signature Confirmation, Adult Signature, and insurance up to
$5,000.
For a discussion of economic and other factors affecting the volume of these services and our actions taken to
address these factors, see Part II., Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations, Results of Operations, Operating Revenue and Volume.
SERVICE STANDARDS
We measure our performance by establishing and benchmarking against service standards. A service standard
is the stated delivery goal for a mail class or product. We set service standards so that customers and mailers
can expect consistent and predictable delivery. To improve reliability and enhance efficiency, we may
periodically update service standards through our formal regulatory process and with the advice of the PRC.
COMPETITION
We compete for our business in many different markets. A wide variety of communications media compete for
the same types of transactions and communications that are conducted using our services. These channels
include, but are not limited to, newspapers, telecommunications, television, email, social networking, and
electronic funds transfers. The package and express delivery businesses are highly competitive with both
national and local competitors.
The most significant competitive factor for First-Class Mail is digital communication, including electronic mail, as
well as other digital technologies such as online bill payment and presentment. For Marketing Mail, digital forms
of advertising including digital mobile advertising and social media are the most significant forms of competition.
The primary competitors of our Shipping and Packages services are FedEx Corporation, United Parcel Service,
Inc., and Amazon.com, Inc., as well as other national, regional, and local delivery companies, and
crowdsourced carriers who are testing and implementing "last mile" delivery services. Our Shipping and
Packages business competes based on the breadth of our service network, convenience, reliability and
economy of the service provided.
SEASONALITY
Total revenue and volume for all service categories are historically the highest in the first quarter, which includes
the holiday mailing and shipping season, and lowest in the third and fourth quarters during the spring and the
summer. Marketing Mail benefits from strong political and election mail volumes in election years, especially
during presidential and congressional election cycles.
EMPLOYEES
As one of the largest employers in the U.S., our employees are critical to our success and the fulfillment of our
mission. Our employees are hard-working public servants dedicated to moving the mail and making a difference
2022 Report on Form 10-K United States Postal Service 7
in every community across the country. We are committed to improving the employee experience and we
continue to invest in initiatives that will equip, empower, connect, and engage our employees.
At September 30, 2022, our workforce consisted of 635,250 employees, substantially all of whom reside in the
U.S. We categorize our employees into two primary groups: career and pre-career. Career employees are
considered permanent and are entitled to a full range of benefits (e.g., health and retirement) and privileges,
while pre-career employees do not yet have permanent status and do not receive full employee benefits and
privileges. At September 30, 2022, we had 516,750 career employees and 118,500 pre-career employees.
At September 30, 2022, 92% of our employees are covered by collective bargaining agreements. These
agreements include provisions governing work rules and provide for general wage increases, step increases
and COLAs, which are linked to the CPI-W, as well as provisions that limit our ability to reduce the size of the
labor force and restrict the number of pre-career employees. Our labor force is primarily represented by the
APWU, the NALC, the NPMHU, and the NRLCA.
By law, we must consult with management organizations representing most of our employees not covered by
collective bargaining agreements. These consultations provide non-bargaining unit employees in the field with
an opportunity to participate in the planning, development and implementation of certain programs and policies
that affect them. For additional information on our collective bargaining agreements, see Part II., Item 8.
Financial Statements and Supplementary Data, Notes to Financial Statements, Note 10 - Commitments and
Contingencies.
COMPENSATION AND BENEFITS
We endeavor to enhance our role as a preferred U.S. employer, offering stable jobs with flexible compensation
and benefits packages to attract and retain highly qualified employees. We regularly review our compensation
and benefits offerings to ensure we are meeting the needs of our current and future employees.
Along with basic competitive rates, certain employees are also eligible for overtime pay, night shift differential,
and Sunday premium pay. Benefit programs include health, dental, and vision benefits, flexible spending
accounts, paid time off, defined contribution retirement plans, defined benefit retirement plans, and employee
assistance programs, depending on eligibility.
Overall, the total compensation of our median employee was $98,260 during the year ended September 30,
2022. Total compensation for this purpose includes base pay plus other forms of cash compensation, such as
overtime and bonuses, plus any change in pension value.
DIVERSITY AND INCLUSION
We believe diversity means building an inclusive environment that respects the uniqueness of every individual
and encourages the contributions of people from different backgrounds, experiences, and perspectives. We
believe our investment in a strong diversity program creates a positive work environment that recognizes the
contributions of all our employees and provides us with a strategic advantage. As a further commitment to this
investment, in 2021, we established an Executive Diversity Council to advise on diversity, equity, and inclusion
matters, and champion key initiatives to build leadership and organizational capabilities.
We focus on diversity and inclusion in the recruitment, development, and retention of employees. We continue
to be one of the leading employers of historically underrepresented racial groups, women, and veterans, at all
levels of our organization. As of September 30, 2022, historically underrepresented racial groups, women, and
veterans represented 53%, 46%, and 10% of our total workforce, respectively, and 38%, 36%, and 11% of our
senior management, respectively.
EMPLOYEE ENGAGEMENT
We aim to provide employees with an engaged workplace, one in which teams and individuals thrive and
perform at high levels. We use a variety of methods to promote engagement including employee feedback
mechanisms, such as open communication through Next Level Connection conversations, engagement
ambassadors, an annual engagement survey, engagement communications through multiple platforms (e.g.,
social media, videos, newsletters, publications, etc.), engagement action planning, and engagement recognition
2022 Report on Form 10-K United States Postal Service 8
programs. We believe that cultivating an engaged workplace will help us improve both the employee and
customer experience while delivering exceptional business results.
EMPLOYEE DEVELOPMENT
We believe that investing in our employees is a key strategy for individual and organizational success. We
provide a variety of professional development programs, mentoring programs, career development and
succession plans, career conferences, and both in-house and external learning opportunities to meet the
training and development needs of our employees, to fulfill organizational skill requirements, and to provide
individuals with career growth opportunities.
EMPLOYEE SAFETY
Employee safety is a top priority for us, and we strive to provide a workplace that is safe for all employees,
supports disability rights and access, and health management. Prevention is the guiding principle for both
occupational safety and health-related legislation. To avoid accidents and occupational diseases, we have
adopted standard requirements for safety and health protection at the workplace and established compliance
protocols to ensure effective implementation. We promote safety performance using safety programs and safety
leadership recognition, and monitor our performance using key metrics, including a total accident rate.
OVERSIGHT AND REGULATION
As discussed throughout this report, we are subject to oversight by Congress and regulation by the PRC and
certain other government agencies. In addition to Senate confirmation of our Governors, Congress can
influence how we conduct our business and operations through passage of laws. For a discussion of new laws
and regulations that impact us, see Part II., Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation, Legislative Update.
REGULATORY MATTERS
We are required to comply with various federal, state, and local laws and regulations concerning numerous
matters, including environmental matters. Except for federal laws specific to the Postal Service, such as the
PRA, the PAEA, and the PSRA, none of these laws have had a material impact on our financial results or
competitive position, or resulted in material capital expenditures. However, the effect of possible future
legislation or regulations on operations cannot be predicted. New laws or regulations, such as the regulation of
greenhouse gas emissions into the environment, may increase our operating costs, including the cost of fuel,
and the potential costs of compliance with any such new laws or regulations.
Our 2022 Annual Sustainability Report is available at about.usps.com/what/corporate-social-responsibility/
sustainability/report/2022/usps-annual-sustainability-report.pdf. This report discusses our sustainability
management approach, including key goals, programs, and metrics used to monitor our compliance and
commitment to sustainability.
REGULATORY REPORTING
We are not a reporting company under the Exchange Act, and are not subject to regulation by the SEC.
However, the PAEA requires us to file with the PRC certain financial reports containing information prescribed
by the SEC under Sections 13 or 15(d) of the Exchange Act. These reports include Annual Reports, Quarterly
Reports, and current reports.
We are also required by law and regulations to disclose operational and financial information beyond what the
law requires of most U.S. government entities and private-sector companies. Pursuant to Title 39 of the U.S.
Code and PRC regulations, we must also file additional information with the PRC, including Cost and Revenue
Analysis reports, Revenue, Pieces, and Weight reports, financial and strategic plans, and the Annual Report to
Congress. These reports can be found online at about.usps.com/what/financials. Requests for copies of our
reports may also be sent to the following address: Corporate Communications, United States Postal Service,
475 L'Enfant Plaza, SW, Washington, DC 20260-3100.
2022 Report on Form 10-K United States Postal Service 9
ITEM 1A. RISK FACTORS
We are subject to various risks and uncertainties that could adversely affect our business, financial condition,
results of operations, and cash flows. In addition to the material risks and uncertainties that are described
below, others that we do not yet know of or that we currently believe are immaterial could arise or become
material and may also impair our business.
OPERATIONAL AND MARKET RISK FACTORS
Our business and results of operations are significantly affected by competition from other companies
in the delivery marketplace, as well as competition from substitute products and digital communication.
If we do not compete effectively, operate efficiently, and increase revenue and contribution from other
sources, this adverse impact of competition may become more substantial over time.
Our marketplace competitors include national, regional, and local providers of package delivery services. Our
competitors have different cost structures and fewer regulatory restrictions than we do, which allows them to
offer differing services and pricing. This may hinder our ability to remain competitive in these service areas. In
addition, some of our competitors have broader access to public capital markets, which allows them greater
freedom in the financing and expansion of their business.
Customer usage of postal services continues to shift to substitute products and digital communication, a trend
that has been further exacerbated by the effects of the pandemic. Despite the sustained effect that the
pandemic has had on customer demand during 2022, the long-term impact that the pandemic may have on
these shifts is still uncertain. First-Class Mail, such as the presentment and payment of bills, has been eroded
by competition from electronic media, driven by some of our major commercial mailers which actively promote
the use of online services. Marketing Mail has experienced declines due to mailers' growing use of digital
advertising, including digital mobile advertising, though this service category has stabilized and has proven to
be a resilient marketing channel. The volume of our Periodicals service continues to decline as consumers
increasingly use electronic media for news and information. Periodical advertising has also experienced a
decline as a result of the move to electronic media.
The Postal Service's Competitive service volumes have historically grown due to significant volume
growth from certain major customers. These customers continue to build the delivery capability that
could enable them to divert volume away from the Postal Service.
Historic growth in our Competitive service volumes has largely been attributable to certain of our largest
customers, a trend that was further accelerated by the pandemic as the nation has increasingly relied on the
safety and convenience of e-commerce. However, during 2022, our Competitive service volumes decreased
compared to the prior year, as the impacts of the pandemic began to abate and certain of our largest customers
returned to building their delivery capability, which enables them to divert volume away from the Postal Service
over time. As these major customers divert significant volume away from the Postal Service, our Competitive
service volumes may continue to decline.
Adverse events may call into question our reputation for quality and reliability or our ability to deliver
the mail and could diminish the value of our brand. This could adversely affect our business operations
and operating revenue.
Our brand, a valuable asset, represents quality and reliable service. We use our brand extensively in sales and
marketing initiatives and exercise care to defend and protect it. Any event, whether real or perceived, that calls
into question our long-term existence, our ability to deliver mail and packages, our quality, or our reliability could
diminish the value of our brand and reputation and could adversely affect our business operations and operating
revenue.
Our need to streamline our operations in response to declining mail volume may result in significant
costs. The measures we are considering may be insufficient to reduce our workforce and physical
infrastructure to a level commensurate with declining mail volume.
Our ongoing reviews of cost-savings opportunities may identify opportunities that impact mail processing
operations or affect lobby hours of retail units, Post Offices, or other facilities. Presently, our regular review of
the carrying value of our assets has not resulted in significant write-downs of our physical assets. However,
2022 Report on Form 10-K United States Postal Service 10
future changes in business strategy, operations, legislation, government regulations, or economic or market
conditions may result in material impairment write-downs of our assets, adversely affecting our business and
financial results.
Our success depends on our ability to remain an employer of choice. Failure to attract and retain
qualified employees could adversely affect our business operations.
As one of the largest employers in the U.S., our people are our greatest asset and our success depends on
investing in their future. Difficulty recruiting, developing, engaging, and retaining our employees, including
successors to members of our senior management, could have an adverse impact on our business.
Furthermore, our pre-career employee positions have historically experienced high turnover rates, which can
lead to increased labor costs for recruiting and hiring. If we fail to strengthen our employee experience, it could
diminish our status as an employer of choice, and have an adverse impact on our business.
We rely on third parties for air transportation to deliver our mail throughout the nation and abroad. A
significant disruption in air transportation service could adversely affect our business and results of
operations.
We do not own or operate aircraft and we rely on third parties for the air transportation service required to
deliver our mail and packages to various destinations within the U.S. and abroad. As such, we are subject to the
risk of these providers' business operations and also to the adoption of regulatory requirements and other
events that affect specific airlines or the airline industry as a whole, which could affect air service or temporarily
ground the fleets of one or more of our providers.
A failure to protect the privacy of customer or employee information could damage our reputation and
result in a loss of business.
We have invested in technology and employ a variety of technology security initiatives aimed at protecting
organizational information, as well as customer information. As one of the U.S. government entities most trusted
by the nation, protecting the confidentiality of data that we obtain is paramount to us. However, should our
information technology security initiatives not fully insulate us from a security breach or data loss, our reputation
could be damaged, resulting in an adverse effect on our operations and financial results. Moreover, unlike other
non-governmental entities in our industry, we must abide by the Privacy Act of 1974, which restricts how we can
collect, use, maintain, and disseminate personally identifiable information and prescribes civil remedies for non-
compliance.
We rely extensively on computer systems and technology to manage the delivery of mail, process
transactions, summarize results, and manage our business, the failure or disruption of which could
adversely affect our business operations and financial results. We also face cybersecurity threats which
may result in breaches of systems containing confidential or sensitive information, and/or our inability
to operate systems necessary for conducting certain operations.
Our operational and administrative information systems are among the largest and most complex systems
maintained by any organization in the world. Any disruption to our infrastructure, including those impacting
computer systems that facilitate mail handling and delivery and customer-utilized websites, or to the
infrastructure of our service providers, could adversely impact customer service, mail volume, and revenue, and
result in significant increased costs. Any significant systems failure could cause delays in the processing and
delivery of mail or result in the inability to process operational and financial data. Such disruptions could impair
our reputation for reliable service, which would also adversely affect results of operations.
We also depend on and interact with third-party technology and systems. These may include service
organizations that we use for our metered postage revenue and other services, and we often are reliant on
certain information from these third parties to record such revenue. Like us, these third parties are subject to
risks imposed by data breaches, cyberattacks, and other events or actions that could damage or disrupt their
networks or systems, or otherwise affect our financial reporting.
Reports of cyber incidents affecting national security, intellectual property, and individuals have been
widespread, with reported incidents involving data loss or theft, economic loss, computer intrusions, and privacy
breaches. The source of such threats is wide-ranging, and because the techniques used by those who
perpetrate cyber incidents are increasingly sophisticated, change frequently, are complex, and are often not
2022 Report on Form 10-K United States Postal Service 11
recognized until launched, we may not be able to fully anticipate threats to our systems and assets, or to
implement effective preventive measures against all cyber threats, despite our best efforts. The ability to
maintain confidentiality, integrity, and availability of information is critical to fulfilling our mission, and system
failures resulting from these threats could damage our reputation, resulting in loss of business and increased
costs.
Due to our recent and projected cash constraints, our operational performance in the future could be at
risk as a result of inadequate capital investment in facilities, delivery vehicles, mail processing
equipment or information technology infrastructure, all of which are essential for our operations.
If our operations do not generate the liquidity we require, we may be forced to reduce, delay, or cancel
investments in technology, facilities, and/or transportation equipment, as we have done in the recent past, while
our competitors and other businesses are pursuing advanced, competing technologies and equipment.
Additionally, our aging facilities, equipment, and transportation fleet could inhibit our ability to be competitive in
the marketplace, deliver a high-quality service and meet the needs of the American public. The changes in the
economic landscape in recent years have increased the importance for us to invest in our operations in order to
remain competitive. Failure to anticipate or react to our competition, market demands, and/or new technology
due to inadequate cash reserves is a significant operational risk. An aging or potentially obsolete infrastructure
could result in a loss of business and increased costs.
FINANCIAL RISK FACTORS
Current and future management actions to generate cash flows by increasing efficiency, reducing costs
and generating additional revenue may not be sufficient to meet all of our financial obligations or to
carry out our strategy.
Our strategies to increase efficiency, to reduce costs by adjusting our processing and delivery networks,
infrastructure, and workforce, and to retain and grow revenue are currently constrained by contractual, statutory,
regulatory, and legislative restrictions. Accordingly, our ability to react quickly to the changing economic climate
and industry conditions is inhibited. We have also proposed administrative changes, such as changes to retiree
benefit funding rules determining how OPM apportions the costs for CSRS benefits for employees and retirees
that worked for both the Post Office Department and the Postal Service. These administrative changes are
needed to provide us with the legal authority to implement additional measures to increase cost savings. While
the enactment of the PSRA is a critical component of improving our financial condition and reduces our short-
term financial obligations, without the successful implementation of management initiatives and the adoption of
additional administrative changes, our ability to generate adequate cash flow is still at risk.
We have a substantial amount of indebtedness.
As of September 30, 2022, we reported outstanding debt obligations to the FFB of $10.0 billion.
As of September 30, 2022, we have an estimated underfunded PSRHBF liability of $23.7 billion, as reported by
OPM, which we will be required to fund in future periods.
As of September 30, 2022, we have estimated underfunded CSRS and FERS liabilities of $43.2 billion and
$32.9 billion, respectively, as reported by OPM, which we will be required to fund in future periods. Of these
amounts, we are currently liable for $10.8 billion and $7.3 billion for CSRS and FERS, respectively, which we
have reported as current liabilities within Retirement Benefits in the accompanying Balance Sheets for the
amounts due and payable for invoiced but unpaid CSRS and FERS contributions.
Our significant indebtedness and unpaid retirement obligations have important consequences. They limit our
flexibility in planning for, or reacting to, changes in the business environment or competition. They place us at a
competitive disadvantage compared to commercial competitors that may have less debt and which have
broader access to public capital markets. They also could require us to dedicate a substantial portion of our
future cash flows from operations to payments on debt and retirement obligations, thus reducing the availability
of cash flows to fund working capital, capital expenditures and other general organizational activities.
2022 Report on Form 10-K United States Postal Service 12
A union contract arrived at either through negotiation or arbitration could have a significant adverse
impact on our future results of operations by impacting our control over wages and benefits and/or by
limiting our ability to manage our workforce effectively.
Our collective bargaining agreements currently in force include provisions for mandatory COLAs, which are
linked to the CPI-W. The actual and projected COLA increases, starting in September 2021, have been larger
than the historical increases over the past decade. We made COLA-based pay adjustments that have increased
our expenses by $1.6 billion in 2022 and are expected to increase our expenses by $1.6 billion in 2023.
Continued impacts to consumer inflation could have a further significant adverse impact on our labor costs. The
agreements also contain provisions that limit our ability to reduce the size of the labor force and employ pre-
career personnel. Reductions in the size and cost of our labor force may be necessary to offset the effects of
declining volume and revenue.
Our ability to negotiate contracts that control labor costs is essential to achieving financial stability. We have no
assurance that we will be able to negotiate contracts in the future with our unions that will result in a cost
structure that is sustainable within current and projected future revenue levels. In addition, if our future
negotiations should fail and involved parties proceed to arbitration, the risk of an adverse outcome exists, as
there is no current statutory mandate requiring an interest arbitrator to consider our financial health in issuing an
award. An unfavorable award in arbitration could have significant adverse consequences on our ability to meet
future financial obligations.
Furthermore, an increase in the CPI-W may not correspond to an equivalent increase in the CPI-U, which
affects the prices of our Market-Dominant services under current law, as the two indexes are calculated
differently. Therefore, we may not be able to increase the prices of our services to keep up with increases in our
wages.
Health and pension benefit expenses are significant to us.
With 516,750 career employees, 499,000 retirees and survivors who receive retirement health benefits, and
702,000 retirees and survivors who receive pension benefits, our expenses relating to employee and pension
benefits are significant. We participate in U.S. government pension and health and benefits programs for
employees and retirees, including the FEHB Program, the CSRS, and the FERS, as required by law or
contractual agreement with our unions. We have no control or influence over the benefits offered by these plans
and are required to make contributions to these plans as specified by law or, in the case of health benefits for
the majority of our current employees, by contractual agreements with our unions. Several factors including
participant mortality rates, returns on investment, and inflation, all of which are outside of our control, could
require us to make significantly higher future contributions to these plans, which would adversely affect our
financial condition and results of operations.
Workers' compensation insurance and claims expenses could have a material adverse effect on our
business, financial condition and results of operations.
Workers' compensation liabilities are established for estimates of cash outlays that we are expected to
ultimately incur on reported claims, as well as estimates of the costs of claims that have been incurred but not
yet reported. Trends in actual experience and management judgments about the present and expected levels of
cost per claim are significant factors in the determination of such accruals. Several other factors which are
beyond our control, such as discount and inflation rates, could cause us to incur higher workers' compensation
expenses.
We believe our estimated liability for such claims is adequate, but if actual experience results in an increase in
the number of claims, and/or severity of claims for which we retain risk, this could cause a material difference
from our estimates and adversely affect our financial condition and results of operations. In addition, our
workers' compensation program is administered for us by the DOL, and as such, we do not have the same level
of control over the execution of the program, including the costs we incur for certain medical and pharmacy
costs, that a private-sector company has with its workers' compensation insurance provider.
2022 Report on Form 10-K United States Postal Service 13
Fuel expenses are a material part of our operating costs. A significant increase in fuel prices could
adversely affect costs and results of operations.
We are exposed to changes in commodity prices, primarily for diesel fuel, unleaded gasoline, and aircraft fuel
for transportation of mail, and natural gas and heating oil for facilities. For the year ended September 30, 2022,
our expenses for fuel represented 4.4% of operating expenses. The price and availability of fuel can be
unpredictable and is beyond our control. Additionally, as we use contracted carriers to transport the mail, we
anticipate that increased operating costs for these independent carriers, including increased costs resulting from
rising fuel prices, will ultimately be passed through to us, which would result in increased costs.
The potential liability associated with existing and future litigation against us could have a material
adverse effect on our business, results of operations, financial condition, and cash flows.
In the normal course of operations, we are subject to threatened and actual legal proceedings from time to time.
Any litigation, regardless of its merits, could result in substantial legal fees and costs incurred by us. Further,
actions that have been or will be brought against us may not be resolved in our favor and, if significant monetary
judgments are rendered, we may not have the ability to pay them. Such disruptions, legal fees, and any losses
resulting from these claims could have a material adverse effect on our business, results of operations, financial
condition, and cash flows.
We rely on the terms and conditions of our contracts with vendors and customers to deliver our
services. These contracts are renegotiated on a routine and periodic basis. Significant changes in the
costs, pricing or terms associated with these contracts could adversely affect our business.
Some of our suppliers and customers enter into long-term contracts with us to supply goods and services and to
procure our services. These contracts are renegotiated from time to time and, to the extent that contracts are
not renewed or are renewed with terms that may not sufficiently cover our costs or increase our costs, may
have an adverse effect on our business. Certain vendors and customers, including a large courier service for air
transportation, are significant to the delivery of certain services. Our ability to maintain current or improved
contract terms with customers and suppliers is critical to our initiatives to return to financial sustainability.
REGULATORY RISK FACTORS
We are subject to congressional oversight and regulation by the PRC and other government agencies.
We have a wide variety of stakeholders whose interests and needs are sometimes in conflict.
We operate as an independent establishment of the executive branch of the U.S. government and, as a result,
we are subject to a variety of regulations and other limitations applicable to federal agencies. If the U.S.
government curtails its spending due to debt ceiling or other constraints, we may be adversely impacted.
Additionally, as an outgrowth of our unique status as a fundamental service provider to the nation, we attempt to
balance the interests of many parties. Limitations on our ability to take action could adversely affect operating
and financial results.
Existing laws and regulations limit our ability to introduce new products or services, enter new markets,
generate new revenue streams, or manage our cost structure. These laws and regulations may also
prevent us from increasing prices sufficiently or generating sufficient efficiency improvements to offset
increased costs. This would adversely affect our results of operations.
In order to offset declining volume and revenue of mail caused by the changing economy, diversion to electronic
media, and statutorily imposed costs, our ability to sell new products and services in new or existing markets will
be a key factor in improving our financial condition. However, various laws and regulations significantly limit our
ability to enter new markets and/or to provide new services and products, as we are often constrained by
traditional industry definitions.
Without legal or regulatory changes that allow us to introduce new products or services to take advantage of our
assets, including our strong network and "last-mile" capabilities, we may be unable to respond adequately to
consumers' changing needs and expectations. These limitations have the potential to adversely impact our
results of operations and long-term financial viability.
The PAEA subjected our Market-Dominant services to a price cap rigidly tied to the CPI-U, but the PAEA also
required the PRC to review that price-cap system after 10 years and to modify or replace it as necessary to
2022 Report on Form 10-K United States Postal Service 14
allow the achievement of financial stability and other statutory objectives. The PRC concluded during this
mandatory review that the rigid price-cap system prevented us from generating adequate revenues to cover our
costs or produce retained earnings, and adjusted the price-cap formula on a going-forward basis to partly offset
further degradation of our revenue base. However, these adjustments do not allow prices to be reset to a
compensatory level and therefore do not correct for the effects of operating for 14 years under a defective
pricing system. For this reason, the additional pricing authority, while an improvement on the original price-cap
formula, may merely perpetuate annual net losses rather than relieve them, and is only expected to partially
offset the effect of declining mail volume, growing delivery points, and our other increasing costs which are not
best reflected by CPI-U.
A large portion of our cost structure cannot be altered expeditiously, and the number of our delivery points
continues to grow. Because our services are provided primarily through our employees, our costs are heavily
concentrated in wages and employee and retiree benefits. These costs are significantly impacted by wage
inflation, health benefit premium increases, retirement and workers' compensation programs.
We believe that continuing productivity improvements and effective use of our pricing authority will not be
sufficient to address the challenges presented by declining volume and revenue, by the current regulatory price
cap, and by statutorily imposed costs, nor will our efforts to grow operating revenue keep pace with our
increased cost. Further administrative action will be necessary to restore the Postal Service to financial
sustainability.
GENERAL RISK FACTORS
Changes in general economic conditions in the U.S. may adversely affect us.
With our mandate to provide universal postal services to the nation at fair and reasonable prices, we serve
consumer and commercial customers in the U.S., as well as internationally. Our operations are subject to
cyclicality affecting the national economy in general, as well as the local economic environments in which we
operate, which makes us particularly vulnerable to macroeconomic risks. The factors that result in general
macroeconomic changes are beyond our control, and it may be difficult for us to adjust our business model to
mitigate the impact of these factors.
Changes in the basic tenets of macroeconomics output, unemployment, and inflation could result in
increased costs due to supply chain disruptions, wage increases, and higher fuel and energy prices. These
changes could also impact the demand for consumer goods and cause a contraction in the retail market,
lowering our volumes, particularly in the Shipping and Packages and Marketing Mail categories.
Consistent with our Delivering for America plan, we have realigned aspects of our organization, including
changes to our workforce and transportation strategy, to best serve the American public and create a high
performing, financially sustainable Postal Service. However, further management initiatives and administrative
changes are still necessary. Changes to macroeconomic conditions could impact our ability to fully implement
our plan in a timely manner and affect our ability to meet the financial targets of revenue growth, cost savings,
and investment associated with the plan.
Rising inflation contributed to an increase in operating expenses during 2022, including higher compensation
expenses, higher retirement benefit expenses, higher transportation expenses, and higher fuel and utility costs.
We expect continued uncertainty in the economy during 2023 and expect the challenges and conditions present
in 2022 to also be present in 2023. Changes in general economic conditions, including further impacts of the
ongoing pandemic, could have an adverse impact on our results of operations and financial position.
Catastrophic events or geopolitical conditions may disrupt our business.
Natural disasters, such as hurricanes, earthquakes, tornadoes, floods, wildfires, and severe winter storms place
our employees in harm's way and make it challenging to deliver mail under these unpredictable and dangerous
conditions. Additionally, shifts in weather patterns caused by climate change could increase the frequency and
intensity of such weather-related natural disaster events. These events may also result in damage to our
facilities, which could have a negative impact on business operations. Furthermore, these events could result in
2022 Report on Form 10-K United States Postal Service 15
adverse economic impacts, including supply chain risks and fuel disruptions. Such disruptions could create
significant additional operating costs in order to maintain continuity in fulfilling our mission.
Geopolitical conflicts and changes, such as the ongoing conflict in Ukraine, pose a risk of general economic
disruption. Such disruptions may cause supply chain disruptions and increase the cost of fuel, utilities, and
transportation, which could have an adverse impact on our business operations and financial results.
The occurrence of regional epidemics or a global pandemic, such as the COVID-19 pandemic, may adversely
affect our operations, financial condition, and results of operations. The COVID-19 pandemic has had severe
and unpredictable impacts on the U.S. and global economy, supply chains, labor markets, and consumer and
commercial behavior. We will continue to be at risk of the adverse impact of another regional epidemic, global
pandemic, or other adverse public health developments in the future.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We own nearly 8,500 and lease over 23,000 properties (buildings and facilities) ranging in size from 273 square
feet to 32 acres. Our facilities support retail, delivery, mail processing, maintenance, administrative, and support
activities and are located in numerous communities throughout the U.S. and its territories.
ITEM 3. LEGAL PROCEEDINGS
We are subject to legal proceedings and claims that arise in the ordinary course of our business. For further
discussion of the legal proceedings affecting us, see Part II., Item 8. Financial Statements and Supplementary
Data, Notes to Financial Statements, Note 10 - Commitments and Contingencies.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Not applicable. As an "independent establishment of the executive branch of the Government of the United
States" (39 U.S.C. §201), we do not issue equity or other securities.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Our operating results are presented in accordance with GAAP. As used herein, all references to years in this
report, unless otherwise stated, refer to fiscal years beginning October 1 and ending September 30. All
references to quarters, unless otherwise stated, refer to fiscal quarters.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should
be read in conjunction with the other sections of this Annual Report, particularly Part I., Item 1. Business, Part I,
Item 1A. Risk Factors, and Part II, Item 8. Financial Statements and Supplementary Data.
2022 Report on Form 10-K United States Postal Service 16
OVERVIEW
With our mandate to provide universal postal services to the nation, we serve consumer and commercial
customers in the U.S., as well as internationally. Our operations include an extensive and integrated retail,
processing, distribution, transportation, and delivery network, and we operate throughout the U.S., including its
possessions and territories. We operate as a single segment and report our performance as a single business.
We continue to implement initiatives that are expected to drive revenue by capitalizing on innovation,
technology, customer and consumer insights, and data management. This includes strengthening the value of
mail through the continued enhancement of Informed Delivery, which enables customers to digitally preview
mail and manage package delivery and adds digital marketing capabilities to the printed mailpiece. We also
recently launched USPS Connect that aims to drive package growth by broadening network access to our next-
day delivery capability for businesses of all sizes. However, legal restrictions on pricing, service diversification,
and operations currently restrict our ability to cover our costs to provide prompt, reliable, and efficient postal
services to the nation.
As an independent establishment of the U.S. government, we have a unique mission to:
Serve the American people and, through the universal service mission, bind our nation together by
maintaining and operating our unique, vital, and resilient infrastructure;
Provide trusted, safe, and secure communications and services between the U.S. government and the
American people, businesses, and their customers, and the American people with each other; and
Serve all areas of our nation, making full use of evolving technologies.
We will carry out this mission by remaining an integral part of the U.S. government and providing all Americans
with universal and open access to our unrivaled delivery and retail network; using technology, innovation and,
where appropriate, private-sector partnerships to meet our customers’ changing needs; operating in a modern,
precise, efficient, and effective manner; and remaining an employer of choice, including attracting and retaining
high-quality employees.
RESULTS OF OPERATIONS
SUMMARY
The enactment of the PSRA significantly impacted the results of operations for the year ended September 30,
2022, as it repealed the requirement that we annually prepay future retiree health benefits and canceled all past
due prefunding obligations. These impacts are reflected as a one-time, non-cash benefit of $57.0 billion to net
income for the year ended September 30, 2022.
Rising inflation also had a significant impact on our results of operations. Our Market-Dominant services are
subject to a price cap system that is generally limited by the increase in the CPI-U, with some additional pricing
flexibility and authority granted by the PRC. Our overall revenue grew for the year ended September 30, 2022,
compared to the prior year, largely due to price increases, which are reflective of the inflationary environment.
Despite this increase in revenue, our operating results remain challenged due to rising costs associated with
inflationary pressures. We have experienced higher compensation costs, higher retirement benefit costs, higher
transportation costs, and higher fuel and utility costs as a result of rising inflation.
Pandemic-related pressures on our operations also continue to have a material impact. The operating results
for the year ended September 30, 2022 reflect the sustained effect that the pandemic has had on customer
demand, resulting in lower mail volumes and higher Shipping and Packages volumes than pre-pandemic levels,
as well as pandemic-related inflation contributing to certain higher operating expenses. The operating results for
the year ended September 30, 2022 also reflect increases in certain revenues and expenses associated with
our inter-agency agreement with HHS to distribute COVID-19 tests as described in Part II., Item 8. Financial
Statements and Supplementary Data, Notes to Financial Statements, Note 5 - Related Parties.
Other major factors that impacted our operating results include overall customer demand, the mix of postal
services and the pricing and contribution associated with those services, the volume of mail and packages
2022 Report on Form 10-K United States Postal Service 17
processed through our network, our ability to manage our cost structure in line with the secular declines in the
levels of mail volume, increased competition in the more labor-intensive Shipping and Packages business, and
an increasing number of delivery points.
2022 Compared with 2021
As more fully described below in Operating Revenue and Volume, our operating revenue was $78.5 billion for
the year ended September 30, 2022, an increase of $1.5 billion, or 1.9%, from the prior year, driven by the
impact of price increases and the following changes by service category:
Marketing Mail revenue increase of $1.4 billion, or 9.7%, compared to the prior year, with a volume
growth of 894 million pieces, or 1.4%, compared to the prior year. Marketing Mail experienced steep
volume declines at the onset of the pandemic, but has been rebounding as the economy continues to
recover. Marketing Mail has generally proven to be a resilient marketing channel, and its value to U.S.
businesses remains strong due to healthy customer returns on investment and better data and
technology integration.
First-Class Mail revenue increase of $772 million, or 3.3%, compared to the prior year, despite a volume
decline of 1.7 billion pieces, or 3.4%, compared to the prior year, due to on-going migration from mail to
electronic communication and transaction alternatives. First-Class Mail volume remains lower than pre-
pandemic levels and we expect continued secular declines; and
Other services revenue increase of $485 million, or 12.1%, compared to the prior year, due to non-
postage revenue associated with the COVID-19 test distribution initiative and higher revenue
associated with PO Box services.
These increases in operating revenue were partially offset by the following:
Shipping and Packages revenue decline of $700 million, or 2.2%, compared to the prior year, on a
volume decline of 399 million pieces, or 5.3%, compared to the prior year. Higher package volumes in
the prior year were due to the pandemic-related surge in e-commerce, which continues to abate as the
economy recovers and market competition intensifies, although such volumes are still higher than pre-
pandemic levels; and
International Mail revenue decline of $489 million, or 22.2%, compared to the prior year, with a volume
decline of 63 million pieces, or 15.1%, compared to the prior year, as postal administrations have
continued to experience disruptions worldwide, including prolonged delays and temporary suspensions,
as a result of the pandemic and other global economic factors. International Mail has also been
impacted by shifts in global transportation modes to commercial alternatives.
As more fully described below in Operating Expenses, our operating expenses for the year ended
September 30, 2022 decreased $2.3 billion, or 2.8%, compared to the prior year. Operating expenses
decreased due to the following:
Retiree health benefits expense decrease of $5.1 billion, compared to the prior year. Our Operating
Expenses for the year ended September 30, 2021 included $5.1 billion in retiree health benefits
expense required under the PAEA. As a result of the PSRA, there are no retiree health benefits
expenses for the year ended September 30, 2022; and
Workers' compensation expense decrease of $1.5 billion, or 265.3%, compared to the prior year, driven
by the impact of actuarial revaluation and changes in discount rates, which are outside of
management’s control.
These decreases were partially offset by the following:
Compensation and benefits expense increase of $1.4 billion, or 2.9%, from the prior year, primarily due
to contractual wage increases, including the inflationary impacts on related COLA and additional costs
associated with the COVID-19 test distribution, partially offset by a lower number of work hours;
Retirement benefits expense increase of $986 million, or 13.4%, from the prior year, primarily due to the
inflationary impact on amortization calculations, as determined by OPM, as well as contribution rate
increases for FERS normal costs that are established by OPM;
2022 Report on Form 10-K United States Postal Service 18
Transportation expense increase of $629 million, or 6.5%, from the prior year, driven by higher average
unit costs per mile, higher average diesel fuel prices, and higher average jet fuel prices; and
Other operating expenses increase of $1.3 billion, or 13.0%, compared to the same period last year,
driven by higher average fuel prices for delivery vehicles, an increase in supplies and services, and an
increase in rent and utilities for our facilities.
Overall, we reported net income of $56.0 billion for the year ended September 30, 2022, compared to a net loss
of $4.9 billion for the year ended September 30, 2021, primarily due to the one-time, non-cash impact of the
PSRA.
2021 Compared with 2020
For a comparison of our results of operations for the year ended September 30, 2021 to the year ended
September 30, 2020, see Part II., Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations of our Form 10-K for the fiscal year ended September 30, 2021, filed with the PRC on
November 10, 2021.
Non-GAAP Measures
In the day-to-day operation of our business, we focus on costs that can be managed in the normal business
operations, such as salaries and transportation. We use various non-GAAP measures to help us better manage
our business. However, these non-GAAP measures should not be considered as a substitute for net income
(loss) and other GAAP reporting measures.
Controllable loss, a non-GAAP measure, is calculated as net income (loss) adjusted for the impact of the PSRA,
workers’ compensation non-cash benefit caused by actuarial revaluation and discount rate changes, expenses
caused by the actuarial revaluation of PSRHBF, and the amortization of the PSRHBF, CSRS, and FERS
unfunded liabilities.
Controllable (loss) income excluding all retiree health benefits expense, a non-GAAP measure, is calculated as
net income (loss) adjusted for the impact of the PSRA, retiree health benefits expense, workers’ compensation
non-cash benefit caused by actuarial revaluation and discount rate changes, and the amortization of the CSRS
and FERS unfunded liabilities.
The following table reconciles our GAAP net income (loss) to our non-GAAP financial measures for the years
ended September 30, 2022 and 2021:
(in millions)
2022 2021
Net income (loss)
Impact of Postal Service reform legislation on past-due PSRHBF
obligations
1
PSRHBF amortization and changes in normal costs of
retiree health benefits due to revised actuarial assumptions
2
Workers' compensation non-cash benefit
3
4
CSRS unfunded liability amortization expense
5
FERS unfunded liability amortization expense
Controllable loss
Normal cost of retiree health benefits
6
$
$
56,046
(56,975)
(3,454)
2,284
1,626
(473)
$
$
(4,930)
1,210
(1,925)
1,858
1,401
(2,386)
3,900
Controllable (loss) income excluding all retiree health
benefits expense
$ (473) ( $ 1,514
2022 Report on Form 10-K United States Postal Service 19
Total operating revenue $ 78,507 $ 77,009
1
Represents the one-time, non-cash reversal of past due obligations as of September 30, 2021 that were canceled by the PSRA.
2
Represents expense for PSRHBF amortization and expense for the increase in the annual normal cost attributable to revised actuarial
assumptions and discount rate changes based on OPM’s invoices for obligations due September 30, 2021. This amount represents the
noncontrollable portion of retiree health benefits expense.
3
Represents workers' compensation non-cash benefit resulting from fluctuations in discount rates, changes in assumptions, valuation of
new claims, revaluation of existing claims, and the administrative fee paid to DOL, less current year claim payments.
4
Expense for the annual payments due September 30 of the respective year, calculated by OPM to amortize the unfunded CSRS
retirement obligation. Payments are to be made in equal installments through 2043.
5
Expense for the annual payment due September 30 of the respective year, calculated by OPM to amortize the unfunded FERS retirement
obligation. Payments are to be made over a 30-year rolling period based on OPM invoices.
6
Represents the accrual for the annual payment due to the PSRHBF by September 30, 2021 for actuarially determined normal cost of
retiree health benefits for current employees, less the noncontrollable portion of $303 million. This amount represents the controllable
portion of retiree health benefits expense.
Our controllable loss excluding all retiree health benefits expense increased $2.0 billion for the year ended
September 30, 2022, compared to our controllable income excluding all retiree health benefits expense in the
prior year. This increase was due to higher compensation and benefits expense of $1.4 billion, higher
transportation expense of $629 million, higher FERS normal costs of $335 million, and higher other operating
expenses of $1.3 billion (due to increases in fuel prices for delivery vehicles, supplies and services, and rent
and utilities for our facilities), partially offset by the $1.5 billion increase in operating revenue.
OPERATING REVENUE AND VOLUME
We generate the vast majority of our revenue through the sale of products and services associated with the
processing and delivery of various types of mail and packages, both domestically and internationally. We
continue to grow our revenue through optimization of our pricing strategies and effective use of our pricing
authority, as outlined in the Delivering for America plan. Revenue for each mail class is highly correlated with its
volume processed and delivered, although revenue per product varies by service category.
The following table details our operating revenue and volume for the years ended September 30, 2022 and
2021 by service category:
(in millions)
2022 2021
Operating revenue:
First-Class Mail
1
$ 24,036 $ 23,264
Marketing Mail
2
16,002 14,589
Shipping and Packages
3
31,308 32,008
International 1,713 2,202
Periodicals 959 942
Other
4
4,489 4,004
Volume:
First-Class Mail
1
48,940 50,664
Marketing Mail
2
67,092 66,198
Shipping and Packages
3
7,186 7,585
International 354 417
Periodicals 3,400 3,679
Other
5
286 299
Total volume 127,258 128,842
2022 Report on Form 10-K United States Postal Service 20
Note: Prior period amounts for certain service categories include reclassifications of amounts amongst service categories to conform to
current period presentation. These reclassifications are immaterial for each affected category and have no effect on total operating
revenue for the period. These reclassifications are required by Postal Service regulatory requirements and are included in this document
for consistency amongst publicly-available information.
1
Excludes First-Class Package Service - Retail and First-Class Package Service - Commercial.
2
Excludes Marketing Mail Parcels.
3
Includes Priority Mail, USPS Retail Ground, Parcel Select Mail, Parcel Return Service Mail, Marketing Mail Parcels, Package Service
Mail, First-Class Package Service - Retail, First-Class Package Service - Commercial and Priority Mail Express.
4
Includes PO Box and Caller services, Certified Mail, Return Receipts, Insurance, Other Ancillary Services, Shipping and Mailing Supplies,
Collect on Delivery, Registered Mail, Stamped Envelopes and Cards, money orders and Other services.
5
Includes Postal Service internal mail and free mail provided to certain congressionally mandated groups.
Revenue for 2022 and 2021 was impacted by the following pricing changes:
We implemented time-limited price increases on certain Shipping and Packages subcategories during
peak seasons from October 18, 2020 through December 27, 2020, and again from October 3, 2021
through December 26, 2021, after which prices reverted to their original respective pricing schedules;
On January 24, 2021, we implemented the 2021 pricing schedule, increasing prices for certain Market-
Dominant and Competitive services;
On August 29, 2021, we increased prices on certain Market-Dominant services by an average of 6.8%;
On January 9, 2022, we increased prices on certain Competitive services (i.e., Priority Mail, Priority Mail
Express, and military mail) by an average of 3.1%; and
On July 10, 2022, we increased prices on certain Market-Dominant services by an average of 6.5%.
On October 7, 2022, we filed with the PRC notices of our intent to increase prices for certain Market-Dominant
services. The average proposed price increase is 4.2% for Market-Dominant services to offset rising inflation
and is scheduled to take effect on January 22, 2023. As of the date of this report, the PRC has not completed its
review of this price increase plan.
Although volume is generally linked to the strength of the U.S. economy, and revenue is linked to changes in
how our customers use mail and packages, we have proactively targeted opportunities to grow our business.
We continue to focus on our customers' needs and have increased our marketing investment in mail and
package innovation. However, we also recognize that revenue growth is constrained by laws and regulations
restricting the types of products, services, and pricing we may offer to our customers and the speed with which
we can bring new services to market.
First-Class Mail
For the year ended September 30, 2022, First-Class Mail revenue increased by $772 million, or 3.3%, despite a
volume decline of 3.4%, compared to the prior year. The most significant factor contributing to the declining
trend in First-Class Mail volume over the year was the continuing migration from mail to electronic
communication and transaction alternatives, which has been accelerated by the pandemic. However, as the
economy continues to recover, the impact of the pandemic on First-Class Mail volume has begun to subside.
Despite the volume decline, revenue grew due to the price increase in August 2021 and, to a lesser extent, the
price increase in July 2022.
We anticipate that First-Class Mail will continue to lose volume in future years with the migration to electronic
communication and transactional alternatives resulting from technological changes. To address the long-term
trend that such changes have had on our First-Class Mail revenue and volume, we have been working with the
mailing industry to slow the decline through mailing promotions and leveraging the high open-and-read rates of,
for example, bills and statements for additional customer engagement and education. We believe these service
offerings will further improve the value of First-Class Mail.
Marketing Mail
Marketing Mail had experienced steep volume declines at the onset of the pandemic last year, but has been
rebounding as the economy continues to recover. Marketing Mail has generally proven to be a resilient
marketing channel, and its value to U.S. businesses remains strong due to healthy customer returns on
investment and better data and technology integration. However, this category has been challenged by
2022 Report on Form 10-K United States Postal Service 21
commercial mailers’ use of digital and mobile advertising, which had been accelerated by the pandemic, and
Marketing Mail volume remains lower than pre-pandemic levels.
For the year ended September 30, 2022, Marketing Mail revenue increased $1.4 billion, or 9.7%, on volume
growth of 1.4%, compared to the prior year. Marketing Mail revenue grew due to price increases, and to a lesser
extent, the growth in volume. Revenue grew at a greater rate than volume due to the price increase in August
2021, and to a lesser extent, the price increase in July 2022. Marketing Mail revenue and volume from political
and election mail decreased by over $100 million and more than 1.1 billion pieces, respectively, compared to
the prior year which included the 2020 general election.
We have focused on providing new services and innovating with Marketing Mail. We have expanded service
offerings such as Informed Delivery, which enables customers to preview mail and manage packages
scheduled to arrive as a means of merging digital and physical mail, as well as allowing mailers to launch
interactive digital campaigns. Additionally, we are focusing on opportunities to pilot new services and innovate
with customers and the mail industry to enhance the value of hard-copy communication. We believe these
service offerings will further improve the value Marketing Mail.
Shipping and Packages
We believe consumer behavior has evolved during the pandemic and our Shipping and Packages volume is not
expected to return to the lower pre-pandemic levels, as the nation has increasingly relied on the safety and
convenience of e-commerce. However, the surge in e-commerce has begun to abate as the economy continues
to recover. Despite the overall declines in this category due to the elevated Shipping and Packages volume in
the prior year due to the pandemic, our Shipping and Packages business continues to reflect the result of our
successful efforts to compete in shipping services, including "last-mile" e-commerce fulfillment markets and
Sunday delivery, as well as end-to-end markets, driven by consumers' continued use of online shopping.
Throughout 2022, we increased Sunday delivery service for some of our customers in limited U.S. markets. We
also continue to focus on responding to customers' needs by implementing marketing campaigns and
maintaining strategic business partnerships that help us capitalize on the growing e-commerce business.
However, our Shipping and Packages category is subject to intense competition which significantly impacts both
revenue and volume. While the surge in e-commerce growth driven by the pandemic, resulted in certain major
customers temporarily increasing their volume to our network due to their delivery capacity constraints, these
customers have returned to diverting volume from our network by in-sourcing the last-mile delivery and
aggressively pricing their products and services in order to fill their networks and grow package density.
Furthermore, each of the services within the Shipping and Packages category has its own unique challenges:
Our Priority Mail Services subcategory can be more price sensitive than other services as it faces
intense competition. This has led to an overall lower growth rate than other Shipping and Packages
subcategories;
Our Parcel Services subcategory largely consists of last-mile deliveries, offered to large bulk shippers
that perform their own sorting before conveying parcels to us for processing and/or delivery deeper into
our network. As a result, this is our lowest-priced Shipping and Packages service and produces a lower-
contribution per piece when compared to many of our other services;
Our First-Class Package Services subcategory is the lowest-priced unrestricted end-to-end shipping
option in the marketplace. As a result, this sub-category is more sensitive to e-commence trends; and
Our Package Services category is the only Market-Dominant service within Shipping and Packages. As
such, this service has historically followed trends more similar to our other Market-Dominant products,
with much larger volume declines than our other Shipping and Packages subcategories.
2022 Report on Form 10-K United States Postal Service 22
The following table details our operating revenue and volume for Shipping and Packages for the years ended
September 30, 2022 and 2021 by each service:
(in millions)
2022 2021
Shipping and Packages revenue:
Priority Mail Services
1
$ 13,093 $ 14,331
Parcel Services
2
9,545 9,458
First-Class Package Services
3
7,811 7,385
Package Services 859 834
Total Shipping and Packages revenue $ 31,308 $ 32,008
Shipping and Packages volume:
Priority Mail Services
1
1,228 1,434
Parcel Services
2
3,523 3,579
First-Class Package Services
3
1,960 2,055
Package Services
Total Shipping and Packages volume
475 517
7,186 7,585
1
Includes Priority Mail, Priority Mail Express, and USPS Retail Ground
2
Includes Parcel Select, Parcel Return and Marketing Mail Parcels.
3
Includes First-Class Package Services - Retail and First-Class Package Services - Commercial.
For the year ended September 30, 2022, Shipping and Packages revenue decreased by 2.2% on volume
decline of 5.3%, compared to the prior year. Higher Shipping and Packages volume in the prior year was due to
the pandemic-related surge in e-commerce, which continues to abate as the economy recovers and market
competition intensifies, although such volumes are still higher than pre-pandemic levels. Revenue declined at a
slower rate than volume due to the January 2022 price increase and the time-limited price increase in effect
during the first quarter of 2022.
International Mail
Our International Mail category includes both "outbound" and "inbound" services. "Outbound" services, which
allow customers in the U.S. to send mail and packages to other countries, generate one-half of International
Mail revenue but only one-third of its volume, whereas "inbound" services are the opposite, generating two-
thirds of International Mail volume but only one-half of its revenue.
For the year ended September 30, 2022, International Mail revenue decreased by 22.2% and volume declined
15.1%, compared to the prior year. The declines in volume were due to various competitive pricing, political, and
economic factors, including the impact of the pandemic on transportation logistics and the global economy in
general. Postal administrations have continued to experience disruptions worldwide, including prolonged delays
and temporary suspensions, as a result of the pandemic. Our volume was also impacted by shifts in global
transportation modes to commercial alternatives. Revenue for the International Mail category decreased, largely
as a result of the volume decline due to the impacts of the pandemic and shifts in the mix of services provided.
However, the overall contribution margin per revenue dollar for the International Mail category increased,
despite the revenue and volume declines, as a result of our self-declared rates.
Periodicals
For the year ended September 30, 2022, Periodicals revenue increased by 1.8% despite a volume decrease of
7.6%, compared to the prior year.
While the revenue increase is driven by price increases on certain Market-Dominant services, the declining
volume is consistent with the systemic decline related to the decade-long trend away from hard-copy reading
behavior and the shift of advertising away from print. We expect the Periodicals category to continue to decline
as electronic content has gained a significant portion of this market share.
2022 Report on Form 10-K United States Postal Service 23
Other
Other services revenue includes ancillary services such as Certified Mail, PO Box services, and Return Receipt
services. Also included in this category are the fluctuations in our deferred revenue estimates, money order
services, passport services, signature-on-delivery services, insurance, and our own internal mail, which
generates no revenue but has volume that can vary significantly from year to year. In addition, this category
contains the non-postage revenue associated with cost reimbursements for the COVID-19 test distribution
initiative that began in the second quarter of 2022.
For the year ended September 30, 2022, Other services revenue increased by 12.1%, compared to the prior
year, primarily due to non-postage revenue associated with the COVID-19 test distribution noted above, and
higher revenue associated with PO Box services.
OPERATING EXPENSES
In an effort to align our resources with anticipated future mail and package volume, we continue to aggressively
manage operating expenses under management’s control.
We originally designed our mail processing and distribution network to provide delivery service of First-Class
Mail within specified delivery areas for a much higher volume of mail than we are required to process and
deliver today, and the network’s legacy capabilities are not well aligned to today’s mail mix and volumes.
Consequently, our processing and distribution facilities continue to operate at less than full capacity. Our
challenge to contain costs is compounded by the continuing increase in the number of delivery points, which,
when combined with lower mail volume has resulted in a drop in the average number of pieces delivered per
delivery point per day from 5.5 pieces in 2007 to 2.9 pieces in 2022, a reduction of 47%.
Compensation and Benefits
Compensation and benefits, our largest operating expense category, is significantly impacted by the terms in
our collective bargaining agreements, which cover the majority of our employees. Our compensation and
benefits expenses consist of costs related to our active career and pre-career employees other than retirement
costs associated with U.S. government defined benefit pension programs and retiree health costs, which are
further discussed in Retirement Benefits and Retiree Health Benefits, respectively.
For the year ended September 30, 2022, compensation and benefits increased by 2.9%, compared to the prior
year. The following table provides the components of compensation and benefits for active employees as of
September 30, 2022 and 2021:
(in millions)
2022 2021
Compensation $ 42,228 $ 40,837
Employee health benefits 5,203 5,248
Social Security 2,423 2,372
TSP 1,334 1,250
Other 332 378
Total compensation and benefits $ 51,520 $ 50,085
Compensation
During the year ended September 30, 2022, compensation expense increased $1.4 billion, or 3.4%, compared
to 2021. This increase is primarily due to contractual wage increases, which include the inflationary impacts on
related COLA, partially offset by a lower number of work hours.
2022 Report on Form 10-K United States Postal Service 24
Workforce Composition
The composition of our workforce is a significant factor of our compensation expense. The following table
provides the approximate totals of career and pre-career employees as of September 30, 2022 and 2021:
2022 2021
Career employees 516,750 516,500
Pre-career employees 118,500 136,500
Total employees 635,250 653,000
Our overall workforce decreased 17,750, or 2.7%, between 2022 and 2021. This was driven by a significant
decrease in pre-career employees of 18,000 or 13.2%, reflecting our strategies to stabilize our workforce
through the conversion of pre-career employees to career employees in order to enhance operational precision.
As outlined in our Delivering for America plan, we are strategically working to create a stable and empowered
workforce with the opportunity for career development and growth for all employees. To help achieve this
initiative, we converted over 50,000 employees, during 2022, from pre-career to career status, as dictated by
our operational needs and contractual provisions.
Work Hours
Work hours are a significant component of compensation expense. We are committed to minimizing costs by
using the appropriate mix of work hours based on the complement and the assessment of relative cost for each
work hour type. In some instances, the use of overtime hours may be necessary to meet service standard
commitments and obligations for mail delivery or to serve as a more cost effective option. In most instances, the
compensation for an overtime hour is less than the cost of a straight-time hour as adding employees results in
additional costs for hiring training, and benefits. Furthermore, certain benefit costs are only calculated as a
percentage of basic pay and do not increase with higher overtime pay.
During the year ended September 30, 2022, total work hours decreased by 10 million, or 0.8%, compared to
2021, reflective of the management actions taken to address lower First-Class Mail and Shipping and Packages
volume, partially offset by the additional hours associated with the COVID-19 test distribution. The total
decrease for the year ended September 30, 2022, included a decrease in overtime work hours of 16 million,
partially offset by an increase of straight-time hours of 6 million, compared to 2021. Straight-time hours
increased as part of our strategy of converting pre-career employees to career status to stabilize operations and
enhance operational precision.
Collective Bargaining Agreements
As of September 30, 2022, 92% of our employees were covered by collective bargaining agreements. The
contracts with the four labor unions representing the majority of our employees include provisions granting
annual increases and cost of living adjustments, which are linked to the CPI-W. For further discussion of
collective bargaining agreements, see Item 8. Financial Statements and Supplementary Data, Notes to
Financial Statements, Note 10 - Commitments and Contingencies.
Non-bargaining Salaries
Annual salary increases for non-bargaining unit employees generally only occur through a PFP system. PFP
salary increases averaged 2.34% for 2021 (implemented in January 2022) and 2.75% for 2020 (implemented in
January 2021). With only minor exceptions, no COLA or locality pay programs apply to non-bargaining unit
employees. However, in September 2022, we provided additional increases of 3.00% for all non-bargaining
employees due to the continued impact of the pandemic and rising inflation.
Employee Health Benefits
Employee health benefits expense (including FEHB contributions for active employees, Medicare taxes, and
expenses for our self-insured health care plan) was $5.2 billion for the year ended September 30, 2022, a 0.9%
decrease, compared to the prior year, reflective of the decreasing workforce. Our employer contribution rates for
the majority of our employees are subject to collective bargaining agreements. Our share of health-care
premiums for employees represented 72% of premiums for 2022 and 2021, respectively.
2022 Report on Form 10-K United States Postal Service 25
See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 12 - Health
Benefits Plans for additional information.
Social Security
Social Security benefits are contributed at 6.2% of compensation as required by statute. However, these rates
apply to earnings, up to a maximum amount, as established by statute, with maximum benefit bases of
$147,000 and $142,800 for the years ended September 30, 2022 and 2021, respectively.
For the year ended September 30, 2022, our Social Security expenses increased 2.2%, compared to the prior
year. This increase was generally consistent with the increase in compensation for the year, as described above
in Compensation, in addition to the changing workforce composition of CSRS and FERS employees.
See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 11 -
Retirement Plans for additional information.
Thrift Savings Plan
For the year ended September 30, 2022, our TSP matching contributions increased 6.7%, compared to the prior
year. This increase was generally consistent with the increase in compensation for the year, as described above
in Compensation, in addition to the changing workforce composition of CSRS and FERS employees.
See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 11 -
Retirement Plans for additional information.
Retirement Benefits
The following table presents the retirement benefits expenses for the years ended September 30, 2022 and
2021:
(in millions)
2022 2021
FERS normal costs $ 4,452 $ 4,117
CSRS unfunded retirement benefits amortization
1
2,284 1,858
FERS unfunded retirement benefits amortization
2
1,626 1,401
Total retirement benefits $ 8,362 $ 7,376
1
Expense for the annual payments due September 30 of the respective year, calculated by OPM to amortize the unfunded CSRS
retirement obligation. Payments are to be made in equal installments through 2043.
2
Expense for the annual payment due September 30 of the respective year, calculated by OPM to amortize the unfunded FERS retirement
obligation. Payments are to be made over a 30-year rolling period based on OPM invoices.
Our retirement benefits expenses increased 13.4% for the year ended September 30, 2022, compared to the
prior year. The increase was due to increases in the CSRS and FERS unfunded retirement benefits
amortization, primarily due to inflationary impacts on the actuarially determined liabilities. The increase was
further impacted by rising employer contributions rates for FERS normal cost.
See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 11 -
Retirement Plans for additional information.
FERS Normal Costs
For the year ended September 30, 2022, FERS normal costs increased 8.1%, compared to the prior year. As
most of our employees participate in FERS and FERS-FRAE, this increase was consistent with the general
increases in compensation and employer normal cost contribution percentages for the year, as described above
in Compensation and in Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements,
Note 11 - Retirement Plans.
2022 Report on Form 10-K United States Postal Service 26
CSRS and FERS Unfunded Retirement Benefits
OPM administers the CSRS and FERS plans via the CSRDF. Although CSRDF is a single fund that does not
maintain a separate account for each participating U.S. government employer, the PAEA requires certain
disclosures regarding obligations and changes in net assets as if the funds were separate. Such disclosures,
which are presented below, are based solely on information OPM has provided to us. Because CSRS and
FERS are not subject to the rules and regulations of the Pension Protection Act of 2006, typical plan
measurements such as zone status, financial improvement plan status, or rehabilitation plan status are not
available for these plans.
Our CSRS and FERS plans are subject to the following constraints and risks:
Assets contributed to the plans by a single participating U.S. government employer may be used to
provide benefits to employees of other participating employers.
If a participating U.S. government employer ceases contributing to a plan, any unfunded obligations of
the plan may be borne by the remaining participating employers.
Federal law mandates our participation in the plans. If a change in the law permitted us to discontinue
this participation, we may be required to contribute to the discontinued plan(s) an amount based on any
underfunded status, referred to as a withdrawal liability, if such a liability exists at that time.
Assets are invested in special purpose Treasury securities, rather than allocated among a variety of
investment assets.
Inflationary impacts have significant impacts on the underfunded amount. Assets have been used faster
than expected due to higher COLAs and the actuarial liability has increased due to changes in discount
rates and the impact of the higher expected salaries.
Each October, OPM provides us with an actuarial report prepared for the purpose of providing financial
reporting information with respect to our CSRS and FERS pension obligations, in accordance with the PAEA
requirements. The actuarial report contains CSRS and FERS information specific to our pension obligations
regarding:
1. The funded status of pension obligations;
2. Components and analysis of net change in actuarial liabilities and fund balances;
3. Cost methods and assumption underlying actuarial valuations; and
4. Actual and estimated contributions to and outlays.
In its October 2022 report to the Postal Service, OPM provided estimated 2022 information for the CSRS and
FERS actuarial liabilities and fund balances. The final actuarial liability and fund balances as of September 30,
2022, may differ from these estimates, as data will be updated, and actuarial assumptions may be revised
during the course of the year.
According to OPM, the number of annuitants receiving retirement benefits was 702,000 and 699,000 for the
years ended September 30, 2022 and 2021, respectively.
2022 Report on Form 10-K United States Postal Service 27
Funded Status
The following table provides OPM's calculations of the funded status of CSRS and FERS for our employees as
of September 30, 2022 (estimated) and 2021 (actual) and represents the most recent data available. The
actuarial liability presented below represents our share of the CSRS and FERS actuarial liabilities, as estimated
by OPM. The fund balance presented below represents contributions made by us to CSRS and FERS, plus a
return on such contributions as estimated by OPM:
Estimated Actual
(in billions)
2022
1
2021
CSRS
Actuarial liability as of September 30
Fund balance per OPM
2
(Less) amount past due
3
$ 169.0
128.1
(2.3)
$ 174.5
133.0
Unfunded $ (43.2) $ (41.5)
FERS
Actuarial liability as of September 30
Fund balance per OPM
4
(Less) amount past due
5
$ 165.5
133.7
(1.1)
$ 159.4
127.2
Unfunded $ (32.9) $ (32.2)
Total CSRS and FERS
Actuarial liability as of September 30 $ 334.5 $ 333.9
Fund balance per OPM 261.8 260.2
(Less) amount past due (3.4)
Unfunded $ (76.1) $ (73.7)
1
The most current actual data from OPM is as of September 30, 2021. The estimated information for 2022 was provided by OPM, but is
subject to change when final 2022 information is provided in 2023.
2
The CSRS estimated fund balance for 2022 provided by OPM assumes we made the amortization payments due on September 30,
2022. However, no such payment was made.
3
Amount past due represents the CSRS amortization payment due on September 30, 2022. However, no such payment was made.
4
The FERS estimated fund balance for 2022 provided by OPM assumes we made the amortization payment due on September 30, 2022.
However, we only paid $500 million of the invoiced $1.6 billion.
5
Amount past due represents the FERS amortization payment due on September 30, 2022. However, we only paid $500 million of the
invoiced $1.6 billion.
We have reported this information based on the same valuation techniques and economic assumptions that are
used by the Board of Actuaries to establish the normal cost and funding requirements for the plans. OPM
actuarial valuations utilize the long-term economic assumptions established by the Board of Actuaries. These
economic assumptions are prepared using Postal Service-specific demographic data and government-wide
economic data.
As disclosed in OPM's Civil Service Retirement and Disability Fund Annual Report dated March 2022, which
reported data for government-wide employers for 2020, the most current period available, the Postal Service's
assets accounted for 16% of the FERS' total.
2022 Report on Form 10-K United States Postal Service 28
The following table provides U.S. government-wide information for plan assets, accumulated benefit obligations,
the unfunded actuarial liability amounts and percentage funded for both the CSRS and FERS retirement plans,
as published in OPM's Civil Service Retirement and Disability Fund Annual Report (dated March 2022), for the
year ended September 30, 2020, the date of the most recent available information, as well as comparative
amounts for the Postal Service for the same period:
U.S. Government Postal Service as a
(including Postal % of the U.S.
($ in billions)
Service) Postal Service Government
CSRS:
Plan assets $ 184.3 $ 141.7 76.9 %
Accumulated benefit obligations 999.9 176.0 17.6 %
Unfunded actuarial liability $ (815.6) $ (34.3)
% Funded 18.4 % 80.5 %
FERS:
Plan assets $ 777.9 $ 124.3 16.0 %
Accumulated benefit obligations 987.2 151.4 15.3 %
Unfunded actuarial liability $ (209.3) $ (27.1)
% Funded 78.8 % 82.1 %
When CSRS and FERS data for the Postal Service were excluded from the 2020 U.S. government-wide data,
the CSRS plan was less than 20% funded, while the FERS plan was less than 80% funded. This is because the
Postal Service funding of CSRS and FERS was 80% or more for each.
Cost Methods and Assumptions
The following table details the long-term economic assumptions recommended by the Board of Actuaries and
included in OPM's valuation reports for the years ended September 30, 2022 and 2021:
2022 2021
CSRS FERS CSRS FERS
Rate of inflation 2.40 % 2.40 % 2.40 % 2.40 %
Long-term COLA 2.40 % 1.92 % 2.40 % 1.92 %
Actual COLA applied 5.90 % 4.90 % 1.30 % 1.30 %
Long-term salary increases 2.65 % 2.65 % 2.65 % 2.65 %
Actual salary increases 2.65 % 2.65 % 2.65 % 2.65 %
Long-term interest rate 4.00 % 4.00 % 4.00 % 4.00 %
2022 Report on Form 10-K United States Postal Service 29
Net Periodic Costs
The following, provided by OPM, details the changes in our estimated actuarial liability for CSRS and FERS as
of September 30, 2022 (estimated) and 2021, and represents the most recent data available:
Estimated Actual
(in billions)
2022
1
2021
CSRS
Actuarial liability as of October 1 $ 174.5 $ 176.0
+ Contributions
2
0.1
- Benefit disbursements (12.3) (12.1)
+ Interest expense 6.7 6.8
+ Actuarial loss 3.8
Actuarial liability as of September 30 $ 169.0 $ 174.5
FERS
Actuarial liability as of October 1
+ Normal costs
- Benefit disbursements
+ Interest expense
+ Actuarial loss
Actuarial liability as of September 30
$
$
159.4
5.0
(5.3)
6.4
165.5
$
$
151.4
4.7
(4.8)
6.1
2.0
159.4
Total actuarial liability as of September 30 $ 334.5 $ 333.9
1
The most current actual data from OPM is as of September 30, 2021. The estimated information for 2022 was provided by OPM, but is
subject to change when final 2022 information is provided in 2023.
2
Contributions for CSRS consist of employee contributions only.
Components of Net Change in Plan Assets
As described above, CSRDF is a single fund and does not maintain separate accounts for CSRS and FERS or
for individual U.S. government employers. The investment holdings of the CSRDF consist of short-term
securities, with initial maturity dates less than one year from acquisition, and long-term special-issue bonds,
which generally have initial maturity dates greater than one year from acquisition. The short-term securities
mature in June 2023 and bear interest rates from 2.88% to 3.38% The special-issue bonds have varying
maturities from June 2023 to June 2037 and bear interest rates from 1.38% to 4.00%.
For 2021, the assumed rate of return was 4.00% for both the CSRS and FERS fund balances. The actual rate
of return for 2021 was 2.45% and 2.43% for the CSRS and FERS fund balances, respectively. The projected
long-term rate of return for both the CSRS and FERS fund balances for 2022 was 4.00%.
2022 Report on Form 10-K United States Postal Service 30
The following tables details OPM's five-year estimates for our required CSRS and FERS contributions (both
employee and employer) based on the population of employees as September 30, 2021, unfunded liability
amortization payments, and benefit payments:
(in billions)
CSRS
Year
Employee
contributions
Postal Service
contributions
Amortization
payments
Total scheduled
contributions and
payments
2023* $ $ $ 2.3 $ 2.3
2024 * 2.3 2.3
2025* 2.3 2.3
2026* 2.3 2.3
2027* 2.3 2.3
* Employee contributions in 2023, 2024, 2025, 2026, and 2027 are projected to continue, but at less than $0.1 billion per year.
(in billions)
FERS
Year
Employee
contributions
Postal Service
contributions
Amortization
payments
Total scheduled
contributions and
payments
2023 $ 0.7 $ 4.2 $ 1.6 $ 6.5
2024 0.7 4.0 1.6 6.3
2025 0.7 3.9 1.6 6.2
2026 0.7 3.7 1.6 6.0
2027 0.7 3.6 1.6 5.9
The following information, provided by OPM, details the components of the net change in our estimated portion
of plan assets for CSRS and FERS for the years ended September 30, 2021 and 2020, and represents the
most recent data available:
(in billions)
2021 2020
CSRS
Net assets as of October 1 $ 141.7 $ 150.1
+ Contributions 0.1 0.1
- Benefit disbursements (12.1) (12.2)
+ Investment income 3.3 3.7
CSRS net assets as of September 30 $ 133.0 $ 141.7
FERS
Net assets as of October 1 $ 124.3 $ 120.8
+ Contributions 4.7 4.3
- Benefit disbursements (4.8) (4.3)
+ Investment income* 3.0 3.5
FERS net assets as of September 30 $ 127.2 $ 124.3
*
The 2021 amount for investment income includes a $0.34 adjustment by OPM subsequent to the prior year report for additional interest
income.
2022 Report on Form 10-K United States Postal Service 31
Retiree Health Benefits
Retirees who participated in FEHB for the five years immediately preceding their retirement may continue to
participate in the plan during retirement. Qualifying survivors of retirees are also eligible to receive benefits.
According to OPM, the number of annuitants receiving retiree health benefits was 499,000 at both
September 30, 2022 and 2021.
The PSRA eliminated the unique obligation to prefund the retiree health benefit program and canceled all past
due prefunding obligations. The PSRHBF will continue to pay annuitant premiums for the Postal Service’s
annuitants until the fund is exhausted. Once exhausted, we will return to a pay-as-you-go methodology, similar
to most other federal agencies and private-sector businesses.
The elimination of the prefunding is presented in Impact of Postal Service reform legislation in the
accompanying Statements of Operations as a one-time, non-cash benefit of $57.0 billion to net income for the
year ended September 30, 2022.
We will not incur additional retiree health benefit costs until either OPM’s annual calculation results in a top-up
payment, expected to occur in 2026, or the PSRHBF is exhausted and we are required to make contributions to
OPM for annuitant premiums.
See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 12 - Health
Benefits Plans, Retiree Health Benefits for additional information.
PSRHBF Funded Status
OPM valuations of post-retirement health liabilities and normal costs were prepared in accordance with SFFAS
No. 5 and SFFAS No. 33, which require the use of the aggregate entry age normal actuarial cost method.
Demographic assumptions are consistent with the pension valuation assumptions. However, OPM uses
headcounts rather than dollar amounts to develop assumptions for retirement and mortality rates when
calculating post-retirement health liabilities.
The following information, provided by OPM, details the PSRHBF funded status:
(in billions)
2022 2021
Beginning actuarial liability at October 1 $ 120.4 $ 116.6
- Plan amendments* (61.2)
+ Actuarial gain (3.8) (0.2)
+ Normal costs 4.4 4.0
+ Interest at 4.8% and 4.4%, respectively 3.9 4.0
Subtotal net periodic costs $ (56.7) $ 7.8
- Premium payments (4.2) (4.0)
Actuarial liability at September 30 $ 59.5 $ 120.4
- Fund balance at September 30 (35.8) (96.1)
+ Amounts past due $ 57.0
Unfunded obligations at September 30 $ 23.7 $ 81.3
* The passage of the PSRA established the PSHB program within the FEHB program for our eligible members. Beginning in 2025, these
members will no longer be able to enroll in FEHB and must enroll in PSHB to continue to receive health coverage. Our annuitants and
their family members will also be required to purchase Medicare Part B once eligible to remain covered in the PSHB. Plan amendments
reflect the decrease in the actuarial liability as a result of the PSRA and Medicare integration.
The determination of the liability assumes a single equivalent discount rate of 4.0% based on the most recent
ten-year historical average yield curve. The normal cost, which is on a per-participant basis, is computed to
increase annually by a variable medical inflation rate which is assumed to be 5.0% per annum as of the
valuation date, grading down to an ultimate value of 3.8% in 2075. This results in a single equivalent trend rate
of 4.8%. Normal costs in 2021 derived from the current FEHB on-rolls population with an accrual period from
entry into FEHB to assumed retirement. Normal costs were eliminated by the PSRA. The amounts and
2022 Report on Form 10-K United States Postal Service 32
variables used to determine the liability are the same as the assumptions used under OPM's methodology,
except that the average government share of premium payments for annuitants is substituted for annuitant
medical costs less annuitant premium payments.
Because the calculation of the PSRHBF liability involves several areas of judgment, estimates of the liability
could vary significantly depending on the assumptions used by OPM. For example, by changing only the
interest rate, a 1% increase or decrease in the interest rate would result in an unfunded obligation ranging from
$53 billion to $68 billion, respectively, as of September 30, 2022. Alternatively, if the actuarial liability had been
calculated using the Board of Actuaries long-term rate assumption of 4.0%, the liability would have been $54
billion, or 8% lower, as of September 30, 2022.
For our current annuitants, the share of premium payments for other federal employers is adjusted to reflect the
pro rata share of civilian service to total service for which we are responsible. The pro rata adjustment is made
by applying calculated factors based upon actual payments that vary by the age and Medicare status of
enrollees. For our active employees, the pro-rata share in retirement is assumed to be 95% of the total.
PSRHBF assets are comprised entirely of special-issue bonds, with initial maturity dates generally greater than
one year from acquisition. These special-bonds have varying maturities from June 2023 to June 2033 and bear
interest rates ranging from 1.38% to 4.00%.
The following table details the PSRHBF fund balance, including both contributions and interest receivables, as
reported by OPM:
(in billions)
2022 2021
Beginning balance (including both contribution and interest
receivables) at October 1 $ 96.1 $ 94.0
Impact of Postal Service reform legislation
1
(57.0)
Amounts past due
2
5.1
Earnings at 2.4% and 2.5%, respectively 0.9 1.0
Payments for annuitant premiums
3
(4.2) (4.0)
Net (decrease) increase $ (60.3) $ 2.1
Fund balance (including both contribution and interest
receivables) at September 30 $ 35.8 $ 96.1
1
Represents the one-time, non-cash reversal of past due obligations as of September 30, 2021 that were canceled by the PSRA.
2
Amounts past due represent the combined amount of normal costs of retiree health benefits and unfunded liability amortization due on
September 30 of the respective years. However, no such payments were made.
3
Includes premium payments for certain annuitant/employees under workers' compensation coverage.
The PSRA made significant changes to our retiree health benefit costs. This legislation eliminated the unique
obligation to prefund the retiree health benefit program and cancelled past due prefunding obligations. The
PSRHBF will continue to pay annuitant premiums for our annuitants until the fund is exhausted. Once
exhausted, we will return to a pay-as-you-go methodology, similar to most other federal agencies and private-
sector businesses. Furthermore, beginning in January 2025, the PSRA requires the enrollment of annuitants
covered by the PSHB Program in Medicare, with certain limited exceptions. A late enrollment penalty will be
assessed for those annuitants that do not sign up during the special enrollment period.
Not later than 2026, we will also be required to make annual top-up payments to the PSRHBF, based on the
difference between annuitant premiums and net claims costs, should claims costs exceed the premium
payments. We will not incur retiree health benefit costs until either OPM’s annual calculation results in a top-up
payment, expected to occur in 2026, or the PSRHBF is exhausted and we are required to make contributions to
OPM for annuitant premiums.
2022 Report on Form 10-K United States Postal Service 33
The following information, provided under the PSRA mandate, details OPM's preliminary five-year estimates for
required payments into the PSRHBF for top-up payments, and payments out of the PSRHBF for late enrollment
payments and annuitant premiums:
(in billions)
Estimated
payments into the
PSRHBF Estimated payments out of the PSRHBF
Year Top-up Payments
Late Enrollment
Payments
Annuitant
premiums
2023 $ $ $ 4.4
2024 4.6
2025 0.04 4.5
2026 1.0 0.05 4.7
2027 1.3 0.05 4.9
Workers' Compensation
Our employees who are injured on the job are covered by the FECA, administered by OWCP, an office within
DOL, which makes all decisions regarding injured workers' eligibility for benefits. We are legally mandated to
participate in the federal workers' compensation program. Our workers' compensation expense reflects the
impacts of changes in discount rates, as well as the actuarial valuation of new workers' compensation cases
and revaluation of existing ones. Additionally, we reimburse DOL for all workers' compensation benefits paid to
or on behalf of our employees, plus an administrative fee.
Under FECA, workers' compensation claims for many types of injuries cannot be settled through lump-sum
payments, and in some instances regarding those claims, compensation may be paid over many years. Federal
law grants COLA rates to those claims, and these factors result in substantially higher costs to us than would
likely result if we managed our own claims. Additionally, since we do not manage the FECA program, we have
no ability to control the significant administrative costs associated with managing the claims and payments
process.
On a daily basis we focus on costs that can be managed in the course of normal business operations. Certain
aspects of workers’ compensation can be managed through human resource initiatives, safety measures and
training. Other workers’ compensation costs cannot be managed in the course of normal business operations
and are less predictable, including expenses caused by actuarial revaluation and discount rate changes. We
subtract the cash payments made by DOL on behalf of workers' compensation obligations, which are relatively
predictable, from total workers' compensation expense in order to determine the non-cash component of
workers' compensation expense, a non-GAAP financial measure.
For additional information, see Item 8. Financial Statements and Supplementary Data, Notes to Financial
Statements, Note 13 - Workers' Compensation.
2022 Report on Form 10-K United States Postal Service 34
Annually, we reimburse DOL for all workers' compensation benefits paid to or on behalf of our employees. The
following table presents the components of workers’ compensation benefit, including the cash payments made
by DOL on behalf of workers’ compensation obligations, for the years ended September 30, 2022 and 2021:
(in millions)
2022 2021
Impact of discount rate changes $ (3,927) $ (1,649)
Actuarial revaluation of existing cases 619 (229)
Costs of new cases 1,099 1,208
Administrative fee 90 90
Total workers' compensation benefit $ (2,119) $ (580)
Less cash payments made by DOL on behalf of workers'
compensation obligations (1,335) (1,345)
Total non-cash component of workers' compensation benefit
(non-GAAP) $
-
(3,454)
1
$
5
(1,925)
For the year ended September 30, 2022, workers' compensation benefit increased $1.5 billion, compared to
2021, due primarily to changes in discount rates.
Impact of Discount Rate Changes
For the year ended September 30, 2022, the portion of workers' compensation benefit attributable to the impact
of discount rate changes increased $2.3 billion, compared to 2021. This increase in benefit was driven by a
significant increase in discount rates in 2022, compared to 2021, an event outside of management's control.
Actuarial Revaluation of Existing Cases and Costs of New Cases
Changes in actuarial valuation are primarily attributable to the combined impacts of routine changes in actuarial
estimation, the progression of existing cases and updated COLA assumptions, which are largely outside of
management's control.
For the year ended September 30, 2022, the cost of new workers' compensation cases decreased $109 million,
compared to 2021, while the actuarial revaluation of existing cases increased by $848 million for the year ended
September 30, 2022, compared to 2021.
Transportation
Transportation expenses include the costs we incur to transport mail and packages between facilities,
comprising highway, air, and international transportation contracts, plus contract delivery services. We rely on
third-parties under highway contract routes for the significant majority of long-haul transportation services
between facilities. Furthermore, we do not own or operate aircraft, and we rely on third parties for the air
transportation service required to deliver our mail and packages to various destinations within the U.S. and
abroad.
With the exception of contract delivery services, our costs to deliver mail and other products to delivery points
are not included within Transportation but in Compensation and benefits for employee costs and in Other
operating expenses for fuel, vehicle maintenance and repair, and other costs in the accompanying Statements
of Operations. Furthermore, transportation expenses do not include the compensation and related costs of
employees responsible for transporting mail and packages between closely located facilities.
Variations in the volume and weight of mail and packages transported, the mode of transportation used, and
fuel prices have significant impact on transportation expenses.
2022 Report on Form 10-K United States Postal Service 35
The table below details the components of transportation expense for the years ended September 30, 2022 and
2021:
(in millions)
2022 2021
Highway $ 6,123 $ 5,427
Air 3,673 3,613
International 437 563
Other 48 49
Total transportation expense $ 10,281 $ 9,652
For the year ended September 30, 2022, total transportation expense increased $629 million, or 6.5%,
compared to the prior year.
Highway transportation expenses increased $696 million, or 12.8%, compared to the prior year, primarily due to
higher average unit costs per mile and higher average diesel fuel prices. Consistent with the tenet of our
Delivering for America plan to optimize our transportation networks, our changes in service standards have
further facilitated the shift of package volume from air to highway transportation when more economical but
allowing for improved reliability and service performance.
Air transportation expenses increased $60 million, or 1.7%, compared to the prior year. The slight increase was
due to the impact of higher average jet fuel prices, partially offset by the overall lower package volumes and the
shift of certain volumes to highway transportation.
Other Operating Expenses
The following table details other operating expenses for the periods ended September 30, 2022 and 2021:
(in millions)
2022 2021
Supplies and services $ 3,189 $ 2,945
Depreciation and amortization 1,677 1,668
Rent and utilities 1,981 1,790
Vehicle maintenance service 703 633
Delivery vehicle fuel 795 526
Information technology and communications 1,134 987
Rural carrier equipment maintenance 644 563
Miscellaneous other 1,403 1,089
Total other operating expenses $ 11,526 $ 10,201
For the year ended September 30, 2022, Other operating expenses increased 13.0% compared to the prior
year. We had an increase in fuel for delivery vehicles due to higher average fuel prices, an increase in supplies
and services, and an increase in rent and utilities for our facilities. Aside from these items, the period-over-
period changes in the various components of other operating expenses reflect ongoing inflation and were
relatively immaterial.
NON-OPERATING REVENUES AND EXPENSES
Interest and Investment Income
We generate income from investments in securities issued by the U.S. Treasury. Investment income was $170
million and $9 million for the years ended September 30, 2022 and 2021, respectively. Interest income
increased significantly during 2022 due to higher average interest rates compared to 2021.
In addition to the income we generate from investments, we record imputed interest on the future installment
payments that are owed to us under the RFA. Under the RFA, Congress agreed to reimburse us $1.2 billion in
2022 Report on Form 10-K United States Postal Service 36
42 annual installments of $29 million each through 2035 for services we performed in prior years. Imputed
interest for the future revenue forgone installments was $18 million for each of the years ended September 30,
2022 and 2021. See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements,
Note 15 - Revenue Forgone for additional information.
Interest Expense
Interest expense was $171 million and $155 million, for the years ended September 30, 2022 and 2021,
respectively. Interest expense increased in 2022, despite the lower debt balance compared to 2021, due to
higher average interest rates on our floating-rate notes.
As of September 30, 2022, we had $10.0 billion in long-term debt and no short-term debt. We finance a portion
of our debt at longer-term fixed rates to decrease our interest rate risk and interest expense volatility in future
years and a portion of our debt at floating-rate rates, which reset every three months and are impacted by
interest rate volatility.
LIQUIDITY AND CAPITAL RESOURCES
As an "independent establishment of the executive branch of the Government of the United States," we
generally receive no tax dollars for ongoing operations and have not received an appropriation for operational
costs since 1982. We fund our operations chiefly through cash generated from the sale of our products and
service operations and by borrowing from the FFB.
LIQUIDITY
Our liquidity consists of unrestricted cash and cash equivalents plus our authorized borrowing capacity under
the PRA. See Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 3 -
Liquidity for additional information.
As of September 30, 2022, and September 30, 2021, we held unrestricted cash and cash equivalents of $19.6
billion and $23.9 billion, respectively. During the year ended September 30, 2022, our average daily liquidity
balance was $25.9 billion. This amount represented 124 days of liquidity available, which we define as average
liquidity divided by our 2022 cash expenses (total expenses excluding depreciation expense and expenses
accrued but unpaid for CSRS and FERS) and capital expenditures per calendar day.
ANALYSIS OF CASH FLOWS
Operating Activities
Cash used in operating activities was $974 million for the year ended September 30, 2022, a change of $5.5
billion compared to cash provided by operating activities of $4.5 billion in the previous year. This change was
driven by higher operating expenses, increased cash expenditures for compensation due to the timing of
payroll, the repayment of one-half of the deferred Social Security taxes, as authorized by the CARES Act, and
the payment of $500 million towards the FERS amortization costs, partially offset by the increase in operating
revenue.
Investing Activities
In 2022, we invested $1.8 billion in the purchase of property and equipment, which represents a decrease of
$76 million over 2021.
Financing Activities
Net cash provided by financing activities for the year ended September 30, 2022, was $2.0 billion, a decrease of
$5.0 billion compared to the prior year. During 2022, we received $3.0 billion pursuant to the IRA, and repaid
$1.0 billion in debt from other sources of funds. During 2021, we received $10.0 billion pursuant to the CARES
Act, and repaid $3.0 billion in debt from other sources of funds.
2022 Report on Form 10-K United States Postal Service 37
LIQUIDITY OUTLOOK
While the enactment of the PSRA is a critical component of the Delivering for America plan and restoring the
Postal Service to financial sustainability, we continue to face systemic imbalances that make our current
operating model unsustainable. Although our liquidity has generally increased since 2012, it remains insufficient
to pay all obligations, to make capital investments necessary for continuity of operations, and to prepare for
unexpected contingencies in the medium or long-term, without putting our ability to fulfill our primary mission at
undue risk. For additional information on our operating challenges and constraints and the relevant mitigating
circumstances, see Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note
3 - Liquidity.
Future Cash Obligations
The following table provides details of estimated future cash obligations as of September 30, 2022:
Past
due and 1 year 2-3 4-5 After 5
(in millions)
Total payable or less years years years
Debt $ 10,000 $ $ $ 1,000 $ 700 $ 8,300
Interest on debt 4,603 275 527 490 3,311
CSRS unfunded liability (off balance
sheet)
1
32,443 2,284 4,567 4,567 21,025
CSRS unfunded liability
2
10,757 10,757
FERS unfunded liability (off balance
sheet)
3
25,600 1,627 3,253 3,253 17,467
FERS unfunded liability
4
7,300 7,300
Workers' compensation
5
23,731 1,311 2,619 2,642 17,159
Operating lease obligations
6
5,453 1,357 2,150 1,224 722
Capital commitments
7
5,613 1,220 4,393
Purchase obligations
7
5,417 1,454 2,118 1,844 1
Employees' leave
8
2,584 155 328 268 1,833
Social Security contributions
9
877 877
Total commitments $134,378 $ 18,057 $ 10,560 $ 20,955 $ 14,988 $ 69,818
1
Represents OPM's preliminary calculation of annual payments for amortization of the CSRS unfunded liability that we are obligated to
pay through 2043.
2
Represents cumulative amortization payments of the CSRS unfunded liability invoiced by OPM annually between 2017 and 2022,
which we defaulted on.
3
Represents OPM's preliminary calculation of annual payments for amortization of the FERS unfunded liability that we are obligated to
pay on a rolling 30-year period.
4
Represents cumulative amortization payments of the FERS unfunded liability invoiced by OPM annually between 2014 and 2022,
which we defaulted on, with the exception of the $500 million paid in 2022.
5
Represents the undiscounted expected future workers' compensation payments plus $112 million in administrative fees, of which $89
million was due and paid October 14, 2022, and assumes no new cases in future years. The obligation to pay administrative fees in
future years as determined by DOL is not included in this estimate.
6
Represents the undiscounted expected payments for lease obligations
7
Capital commitments pertain to purchases of equipment, building improvements and vehicles for legally binding obligations. Purchase
obligations pertain to items (including highway and air transportation obligations) that are expensed when received or amortized over
a short period of time. These are not reflected on the accompanying Balance Sheets.
8
Employees' leave includes both annual and holiday leave.
9
Under the CARES Act, payments for half of the employer contribution of Social Security benefits through December 31, 2020 are
deferred and payable on December 31, 2022.
As of September 30, 2022, we also have an estimated underfunded PSRHBF liability of $23.7 billion, as
reported by OPM. However, as a result of the PSRA, no payments will be required until either OPM’s annual
calculation results in a top-up payment, expected to occur in 2026, or the PSRHBF is exhausted and we are
required to make contributions to OPM for annuitant premiums. OPM has estimated the top-up payment due in
2026 to be $1.0 billion and increase in years thereafter.
2022 Report on Form 10-K United States Postal Service 38
Capital Investments
As outlined in our Delivering for America plan, our technological and physical infrastructures require extensive
upgrades. To invest in these upgrades, we have planned for over $40 billion in capital investments between
2021 and 2030. We currently estimate that our required cash outlays for capital investments necessary to
ensure that we can continue to perform our universal service mission will amount to $2.8 billion in 2023, and an
additional $20.3 billion for years 2024 through 2027. However, these projections could change depending on
the timing of investments to replace our delivery fleet, transform our retail locations, improve our processing
facilities, and acquire or contribute to other appropriate capital assets. Furthermore, the severity and duration of
the pandemic may impact these outlays and the future cash flows from operations alone may not generate the
cash needed to enable us to fully fund such necessary capital investments.
LEGISLATIVE UPDATE
As a self-funded independent establishment of the executive branch, our business model, and operations are
significantly influenced by congressional oversight and legislation. Additionally, Congress intended for us to be
governed by an eleven-member Board of Governors which consists of our PMG, our DPMG, and nine
independent Governors. The President appoints the Governors with the advice and consent of the Senate. As of
the date of this report, we have a full complement of nine Presidentially-appointed, Senate-confirmed Governors
in office.
APPROPRIATIONS
On September 30, 2022, the President signed the Continuing Appropriations and Ukraine Supplemental
Appropriations Act, 2023, enacted as Public Law 117-180. The Act funds the government at FY 2022 levels until
December 16, 2022. As of the date of this report, action on an omnibus appropriations package for the
remainder of 2023 is still being negotiated.
On July 28, 2022, the Financial Services and General Government Appropriations Act, 2023 (S. 4685) was
introduced in the Senate. The bill includes $50.25 million in funding for the Postal Service for free mail for the
blind and overseas voting. S. 4685 prohibits any of the appropriated funds from being used to consolidate or
close small rural or other small Post Offices and requires the continued sale of the Multinational Species
Conservation Funds Semipostal Stamp. There has been no further action on this bill since its introduction.
On June 24, 2022, the U.S. House Committee on Appropriations approved the Financial Services and General
Government Appropriations Act, 2023 (H.R. 8254), which includes $56.25 million in funding for free mail for the
blind and overseas voting and other provisions. The bill also prohibits any of the appropriated funds from being
used to consolidate or close rural or other small Post Offices and requires the continued sale of the
Multinational Species Conservation Funds Semipostal Stamp. H.R. 8254 was incorporated into a six-bill
appropriations package (H.R. 8294), which passed the House on July 20, 2022.
In a non-binding report to accompany H.R. 8254 (H. Rept. 117-393), the U.S. House Committee on
Appropriations included several additional Postal Service-related directives, encouragements, and expressions.
On March 28, 2022, the President released his FY 2023 budget proposal. The Postal Service provision includes
$50 million in reimbursement for overseas voting and mail for the blind. The budget also proposed to make
official ballot materials free to mail and to reduce the cost of other election-related mail for jurisdictions and
voters. The President’s budget estimated the associated costs of this proposal to be $5.0 billion ($500 million
per year) over the 2023–2032 period.
LEGISLATION
On September 9, 2022, the Ensuring Accurate Postal Rates Act (H.R.8781) was introduced in the House. The
bill would direct the PRC to reevaluate the Market-Dominant rate making system rules to consider the Postal
Service’s financial condition following passage of the Postal Service Reform Act of 2022, enacted as Public Law
117-108. There has been no further action on this bill since its introduction.
2022 Report on Form 10-K United States Postal Service 39
On August 16, 2022, the President signed the IRA. This legislation provides $1.29 billion in funding to the Postal
Service for the procurement of zero-emission delivery vehicles and $1.71 billion in funding to the Postal Service
for the purchase, design, and installation of the requisite infrastructure to support zero-emission delivery
vehicles at facilities that the Postal Service owns or leases from non-Federal entities. Both amounts were
deposited into the Postal Service Fund on September 21, 2022, and will remain available for use through
September 30, 2031.
On May 11, 2022, the COR reported the Ensuring an Accurate Postal Fleet Electrification Act (H.R. 7682)
favorably to the full House. The bill, introduced on May 6, 2022, would invalidate the Postal Service’s NGDV
EIS, and prohibit the Postal Service from moving forward with any NGDV procurement until a revised EIS
compliant with the statutory requirements in the National Environmental Policy Act is completed. There has
been no further action on this bill since the COR markup.
On March 22, 2022, the Postal Banking Act (S. 3891), was introduced in the Senate. The bill would grant
authority for the Postal Service to offer services such as checking and interest-bearing savings accounts,
transactional services, including debit cards, automated teller machines, online checking accounts, check-
cashing services, automatic bill-pay, mobile banking, and other products or partnerships that allow users to
engage in the financial services. It would also allow the Postal Service to provide low-cost, small-dollar loans.
There has been no further action on this bill since its introduction.
On March 9, 2022, the Green Postal Service Fleet Act of 2022 (H.R. 7018), was introduced in the House. The
bill prohibits the Postal Service from carrying out the contract with Oshkosh Defense for the procurement of
postal delivery vehicles unless each purchase includes at least 75 percent electric or zero-emission vehicles.
There has been no further action on this bill since its introduction.
On May 25, 2021, the Postal Service Electric Fleet Authorization Act of 2021 (H.R. 3521), a bill to modernize
our fleet of delivery vehicles with electric or zero-emission vehicles, was introduced in the House. The bill would
authorize $8.0 billion in funding for the acquisition of vehicles and the infrastructure required to operate a fleet of
electric vehicles. There has been no further action on this bill since its introduction.
POSTAL SERVICE REFORM
On April 6, 2022, the President signed the PSRA, enacted as Public Law 117-108. Beyond the financial impacts
discussed in Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 1 -
Organization and Summary of Significant Accounting Policies, Basis of Presentation, this law establishes the
Postal Service Health Benefits Program for the Postal Service’s employees and retirees and requires their
enrollment in Medicare (with certain opt-out exceptions); provides authority for the provision of certain services
to state, local, and tribal governments; requires the Postal Service to develop and maintain a publicly available
dashboard to track service performance and to report regularly on its operations and financial condition; codifies
delivery frequency at six days per week in those areas where it is currently provided; and requires that the
Postal Service maintain an integrated delivery network for mail and packages.
FAIR VALUE MEASUREMENTS
We did not have any recognized gains as a result of fair valuation measurements in the years ended
September 30, 2022 and 2021. All recognized losses have been incorporated into our financial statements and
the unrecognized gains and losses are not considered to have a significant impact upon our operations. See
Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements, Note 16 - Fair Value
Measurement for additional information.
RELATED PARTY TRANSACTIONS
We have significant transactions with other U.S. government entities, which are considered related parties in
accordance with GAAP. See Item 8. Financial Statements and Supplementary Data, Notes to Financial
Statements, Note 5 - Related Parties.
2022 Report on Form 10-K United States Postal Service 40
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in accordance with GAAP requires management to make significant
judgments and estimates to develop certain amounts reflected and disclosed in the financial statements. In
many cases, alternative policies or estimation techniques may be used.
We maintain a thorough process to review the application of accounting policies and to evaluate the
appropriateness of the many estimates that are required to prepare the financial statements. Management
discusses the development and selection of these accounting policies and estimates with the Audit and Finance
Committee of the Board. However, even under optimal circumstances, estimates routinely require adjustment
based on changing circumstances and new or better information.
The three accounting policies that are considered either the most judgmental, or involve the selection or
application of alternative accounting policies, and are material to the financial statements, are those related to
the recording of workers' compensation costs, deferred revenue-prepaid postage, and contingent liabilities. For
further information, see Item 8. Financial Statements and Supplementary Data, Notes to Financial Statements,
Note 1 - Organization and Summary of Significant Accounting Policies.
WORKERS' COMPENSATION
Workers' compensation costs reflected in our accompanying Statements of Operations are subject to actuarial
estimates of future claim payments based upon past claim payment experience. Workers' compensation costs
are highly sensitive to discount and inflation rates, which we update on a quarterly basis, and the length of time
recipients are expected to stay on the compensation rolls. However, the annual cash payment for claims is
relatively stable and predictable.
The discount rate reflects the current rate at which the workers' compensation liabilities could be effectively
settled at the measurement date (e.g., the end of the accounting period). In setting the discount rates, we use
the current yield, as of the measurement date, on U.S. Treasury securities that are matched to the expected
duration of both the medical and compensation payments. Expected inflation in compensation claim obligations
are estimated using the consensus inflation forecast from the Federal Reserve Bank of Philadelphia Survey of
Professional Forecasters. For medical claims, we use the average rate of medical cost increases experienced
by our workers' compensation claimants over the past five years as an estimate for future medical inflation.
Workers' compensation liabilities are recorded in the accompanying Balance Sheets as Workers' compensation
costs with both current and noncurrent components.
DEFERRED REVENUE-PREPAID POSTAGE
Deferred revenue-prepaid postage is an estimate of postage that has been sold, but not yet used by customers.
Under ASC 606, Revenue from Contracts with Customers, revenue is recognized over time as mail is delivered,
not when postage is purchased, and revenue is deferred and reflected in the accompanying Balance Sheets as
Deferred revenue-prepaid postage. The deferred revenue estimate is developed and validated through
mathematical and statistical methods of stamp usage trends. Three categories of postage sales account for the
majority of Deferred revenue-prepaid postage: Forever stamp sales, metered postage and mail-in-transit, which
is mail that has not reached its final destination.
CONTINGENT LIABILITIES
The recording of contingent liabilities requires significant judgment in estimating potential losses for legal and
other claims. Each quarter, we evaluate significant new claims and litigation for the probability of an adverse
outcome. We record liabilities deemed both probable and estimable in the accompanying Balance Sheets within
Payables and accrued expenses and Other noncurrent liabilities.
In addition, we review any prior claims and litigation and, when necessary, we adjust the liability balances for
resolutions or revisions to prior estimates. Estimates of loss can change as individual claims develop and
additional information becomes available. We disclose the range of amounts for pending claims and litigations
that are deemed to be reasonably possible of an unfavorable outcome, but do not accrue for or include such
provisions in our financial statements.
2022 Report on Form 10-K United States Postal Service 41
RECENT ACCOUNTING STANDARDS
New accounting guidance that we have recently adopted, as well as accounting guidance that has been
recently issued but that we have not yet adopted, are included in Item 8. Financial Statements and
Supplementary Data, Notes to Financial Statements, Note 2 - Recent Accounting Pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market rate risks we encounter are primarily related to foreign currency exchange rate fluctuations, interest
rates, and commodity prices. Historically, we have not entered into derivatives contracts or commodity
instruments for trading or speculative purposes or to manage market risks.
FOREIGN EXCHANGE RISK
While we operate outside of the U.S. and foreign currency fluctuations may either favorably or unfavorably
impact our reported earnings, we believe that foreign exchange risk is immaterial since the vast majority of our
business transactions are denominated in U.S. dollars. We estimate that a 1% increase or decrease in foreign
exchange rates would not have a material impact on our financial statements.
INTEREST RATE RISK
We are impacted by changes in interest rates in the normal course of our business as a result of our ongoing
investing and financing activities, which include our floating-rate notes outstanding as well as our cash and cash
equivalents. We assess our interest rate risks on a regular basis and currently estimate that a 1% increase in
interest rates would have resulted in a $47 million increase in our 2022 interest expense relating to our floating-
rate notes outstanding. A 1% decrease in interest rates would have resulted in approximately a $101 million
decrease in our 2022 investment income relating to our cash and cash equivalents.
We have interest rate risk associated with the floating-rate portion of our long-term debt; however, we have no
significant exposure to changing interest rates on the fixed-rate portion of such debt. As disclosed in Item 8.
Financial Statements and Supplementary Data, Notes to Financial Statements, Note 16 - Fair Value
Measurement, the fair value of our long-term debt was $9.6 billion and $10.4 billion for the years ended
September 30, 2022 and 2021, respectively. We estimated the underlying fair value of our long-term debt using
prices and discount rates provided by the FFB.
We also have interest rate risk associated with our workers' compensation liability, which is highly sensitive to
changes in discount rates. An increase of 1% in the interest rates would decrease the liability at September 30,
2022, and related 2022 expense by $1.3 billion. A decrease of 1% would have increased the liability at
September 30, 2022, and related 2022 expense by $1.6 billion. See Item 8. Financial Statements and
Supplementary Data, Notes to Financial Statements, Note 13 - Workers' Compensation for further explanation.
COMMODITY PRICES RISK
We currently have market risk for changes in fuel and natural gas costs. As of September 30, 2022, we
estimated that a 1% increase in fuel and natural gas would have resulted in a $35 million increase in our 2022
expense.
2022 Report on Form 10-K United States Postal Service 42
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Governors of the United States Postal Service
Opinion on the Financial Statements
We have audited the accompanying balance sheets of the United States Postal Service (the Postal Service) as
of September 30, 2022 and 2021, the related statements of operations, changes in net deficiency, and cash
flows for each of the three years in the period ended September 30, 2022, and the related notes (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Postal Service at September 30, 2022 and 2021, and the results of its
operations and its cash flows for each of the three years in the period ended September 30, 2022, in conformity
with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB) and in accordance with auditing standards generally accepted in the United States of
America, the Postal Service’s internal control over financial reporting as of September 30, 2022, based on
criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated November 10, 2022
expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Postal Service’s management. Our responsibility is to
express an opinion on the Postal Service’s financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Postal
Service in accordance with U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates
to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in
any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the account or
disclosure to which it relates.
2022 Report on Form 10-K United States Postal Service 43
Workers' Compensation
Description of the
Matter
At September 30, 2022, the Postal Service’s total workers’ compensation liability
reflected in the balance sheet was $14.7 billion. As explained in Note 13 to the
financial statements, the Postal Service estimates its workers’ compensation liability
using actuarial methods to project the future claims payments based upon past claim-
payment experience. The Postal Service calculates the amount that would need to be
invested at current interest rates (discount rate) to fully fund the future total cost of
claims and this calculated present value is the recorded value of the workers’
compensation liability.
Auditing the workers' compensation liability is complex due to the judgmental nature
of estimating the future total cost of workers' compensation claims and the use of
various actuarial methods. There are a number of factors and assumptions used in
the measurement process including severity, duration and frequency of claims, and
the discount rate which could have a significant effect on the total workers'
compensation liability.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over management’s process of estimating the workers’
compensation liability. For example, we tested controls over management's review of
the significant assumptions, data inputs used, and results of calculations as well as
management’s evaluation of service organization controls.
To evaluate the workers’ compensation liability, our audit procedures included, among
others, testing the completeness and accuracy of the underlying claims data used by
the Postal Service. We involved our actuarial specialists to assist in our evaluation of
the actuarial methods applied and significant assumptions noted above used by
management in determining the liability. We compared the Postal Service’s workers’
compensation liability amount to a range which our actuarial specialists developed
based on independently selected assumptions.
Emphasis of a Matter
As discussed more fully in Note 3 to the financial statements, the Postal Service, an independent establishment
of the executive branch of the U.S. Government, has incurred recurring losses from its operations primarily due
to constraints by laws and regulations and sustained declines in mail volume. The Postal Service remains in
default on past-due obligations including retirement benefits and does not expect to have sufficient cash to
satisfy these obligations. The Postal Service does not, at this time, anticipate any legal consequences, under
current law, from its inability to make these required payments. Additionally, the Postal Service has no
assurance that it would be able to raise additional cash through additional financings or that such financings
would be provided on terms comparable to prior debt issuances. Management believes, but no assurances can
be given, that disruption of the mail would cause undue hardship to businesses and consumers, and in the
event of a cash shortfall, the U.S. Government would likely prevent the Postal Service from significantly
curtailing or ceasing operations.
/s/ Ernst & Young LLP
We have served as the United States Postal Service’s auditor since 1972.
Tysons, Virginia
November 10, 2022
2022 Report on Form 10-K United States Postal Service 44
UNITED STATES POSTAL SERVICE
STATEMENTS OF OPERATIONS
Year Ended September 30,
(in millions)
2022 2021 2020
Revenue
Operating revenue $ 78,507 $ 77,009 $ 73,123
Other revenue 113 32 10
Total revenue 78,620 77,041 73,133
Operating expenses
Compensation and benefits 51,520 50,085 48,730
Retirement benefits 8,362 7,376 6,964
Retiree health benefits 5,110 4,660
Workers' compensation (2,119) (580) 2,903
Transportation 10,281 9,652 8,814
Other operating expenses 11,526 10,201 10,116
Total operating expenses 79,570 81,844 82,187
Loss from operations before the impact
of Postal Service reform legislation (950) (4,803) (9,054)
Impact of Postal Service reform
legislation 56,975
Income (loss) from operations 56,025 (4,803) (9,054)
Interest and investment income 192 28 92
Interest expense (171) (155) (214)
Net income (loss) $ 56,046 $ (4,930) $ (9,176)
See accompanying notes to the financial statements.
2022 Report on Form 10-K United States Postal Service 45
UNITED STATES POSTAL SERVICE
BALANCE SHEETS
September 30, September 30,
(in millions)
2022 2021
Current Assets:
Cash and cash equivalents $ 19,607 $ 23,858
Restricted cash 1,011 449
Receivables, net (less allowances of $140 and $134) 1,326 1,412
Supplies, advances and prepayments 252 189
Total current assets 22,196 25,908
Restricted cash, noncurrent 3,000
Property and equipment, net 15,147 14,778
Operating lease right-of-use assets 5,094 5,070
Other assets 678 649
Total assets $ 46,115 $ 46,405
Current Liabilities:
Compensation and benefits $ 3,146 $ 3,810
Retirement benefits 18,162 14,915
Retiree health benefits 56,975
Workers' compensation 1,311 1,325
Payables and accrued expenses 2,762 2,523
Deferred revenue-prepaid postage 2,519 2,623
Operating lease liabilities 1,290 1,336
Customer deposit accounts 1,244 1,194
Other current liabilities 1,713 1,628
Short-term debt 1,000
Total current liabilities 32,147 87,329
Workers' compensation, noncurrent 13,418 16,849
Operating lease liabilities, noncurrent 3,924 3,847
Employees' accumulated leave, noncurrent 2,429 2,334
Other noncurrent liabilities 831 1,726
Long-term debt 10,000 10,000
Total liabilities 62,749 122,085
Net Deficiency:
Capital contributions of the U.S. government 16,132 13,132
Deficit since 1971 reorganization (32,766) (88,812)
Total net deficiency (16,634) (75,680)
Total liabilities and net deficiency $ 46,115 $ 46,405
See accompanying notes to the financial statements.
2022 Report on Form 10-K United States Postal Service 46
UNITED STATES POSTAL SERVICE
STATEMENTS OF CHANGES IN NET DEFICIENCY
(in millions)
Capital
Contributions of
U.S. Government
Accumulated
Deficit Since
Reorganization
Total Net
Deficiency
Balance, September 30, 2019 $ 3,132 $ (74,664) $ (71,532)
Net loss (9,176) $ (9,176)
Balance, September 30, 2020 $ 3,132 $ (83,840) $ (80,708)
Cumulative effect adjustments for adoption
of new accounting pronouncement (42) (42)
Capital contributions of the U.S.
government 10,000 10,000
Net loss (4,930) (4,930)
Balance, September 30, 2021 $ 13,132 $ (88,812) $ (75,680)
Capital contributions of the U.S.
government 3,000 3,000
Net income 56,046 56,046
Balance, September 30, 2022 $ 16,132 $ (32,766) $ (16,634)
See accompanying notes to the financial statements.
2022 Report on Form 10-K United States Postal Service 47
UNITED STATES POSTAL SERVICE
STATEMENTS OF CASH FLOWS
Years Ended September 30,
(in millions)
2022 2021 2020
Cash flows from operating activities:
Net income (loss) $ 56,046 $ (4,930) $ (9,176)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 1,677 1,668 1,706
(Gain) loss on disposals of property and equipment, net (65) 12 5
Increase in operating lease right-of-use assets (24) (582) (124)
Increase in other assets (27) (95) (73)
(Decrease) increase in noncurrent workers' compensation (3,431) (1,905) 1,584
(Decrease) increase in noncurrent deferred appropriations and other
revenue (3) 77 (5)
Increase in noncurrent operating lease liabilities 77 422 170
(Decrease) increase in other noncurrent liabilities (824) (229) 1,463
Changes in current assets and liabilities:
Receivables, net 86 (95) 102
Other current assets (63) 35 (46)
Retirement benefits 3,247 3,332 3,198
Retiree health benefits (56,975) 5,110 4,660
Payables, accrued expenses, and other (517) 1,063 566
Operating lease liabilities (46) 130 77
Deferred revenue-prepaid postage and other deferred revenue (132) 471 262
Net cash (used in) provided by operating activities (974) 4,484 4,369
Cash flows from investing activities:
Purchases of property and equipment (1,796) (1,872) (1,810)
Proceeds from sales of property and equipment 111 14 32
Net cash used in investing activities (1,685) (1,858) (1,778)
Cash flows from financing activities:
Proceeds from borrowings 3,400
Repayments of borrowings (1,000) (3,000) (400)
Repayments of finance lease obligations (30) (31) (40)
Contributions of the U.S. government 3,000 10,000
Net cash provided by financing activities 1,970 6,969 2,960
Net (decrease) increase in cash, cash equivalents & restricted cash (689) 9,595 5,551
Cash, cash equivalents & restricted cash - beginning of year 24,307 14,712 9,161
Cash, cash equivalents & restricted cash - end of year $ 23,618 $ 24,307 $ 14,712
Supplemental cash flows disclosures:
Cash paid for interest $ 164 $ 155 $ 208
See accompanying notes to the financial statements.
2022 Report on Form 10-K United States Postal Service 48
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The United States Postal Service (the "Postal Service,” "USPS," "we," "our," and "us) provides postage, mail
delivery, and shipping services to consumer and commercial customers in the communications, distribution and
delivery, advertising, and retail markets throughout the U.S. and internationally. We do not operate in segments;
we report our performance as a single business.
Summary of Significant Accounting Policies
Fiscal Year
All references to years in this report, unless otherwise stated, refer to fiscal years beginning October 1 and
ending September 30. All references to quarters, unless otherwise stated, refer to fiscal quarters.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with GAAP.
On April 6, 2022, the President signed the PSRA. The enactment of this legislation significantly impacts our
obligations for retiree health benefits and the accompanying financial statements as of September 30, 2022, as
it repeals the requirement that we annually prepay future retiree health benefits and cancels all past due
prefunding obligations. The repeal of the prefunding for retiree health benefits and cancellation of the past due
payments are reflected as a one-time, non-cash benefit of $57.0 billion to net income in the accompanying
Statements of Operations for the year ended September 30, 2022.
Use of Estimates
The preparation of the accompanying financial statements requires management to make certain estimates and
judgments that affect the reported amounts. On an ongoing basis, we reevaluate our estimates, which are
based on historical experience and various assumptions that we believe are reasonable under the
circumstances. However, actual results may differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of unrestricted cash and short-term, highly liquid investments with maturities
of three months or less.
Restricted Cash
Restricted cash represents cash that is not available for general use. This includes, but is not limited to the
following:
Cash from forfeitures or seizures related to consumer fraud or other criminal activity related to the mail
that is either being held for third-party beneficiaries or awaiting disposition;
Cash received for revenue under the retirement-based pricing authority, a price increase authorized by
the PRC, under which any incremental funds received must be remitted to OPM for amortization
payments;
Cash designated for specific use due to congressional appropriation under the IRA or annual
congressional appropriation for obligations to the United States Postal Service Office of Inspector
General; and
Cash designated for specific use due to annual obligations to the PRC.
Receivables, net
Receivables, net represents receivables recorded at the amount invoiced, net of allowances. Allowances for
potential losses are recognized at each balance sheet date. These estimates are determined based on
historical collection experience, trends in customer payment frequency, and judgments about the probable
effects of observable data, including present and forecasted future economic conditions and the financial health
2022 Report on Form 10-K United States Postal Service 49
of specific customers and market sectors. Receivables, net also includes advances for employees' leave as
described below in Employees' Accumulated Leave.
Property and Equipment, net
Property and equipment, net represents property and equipment recorded at cost less accumulated
depreciation. It includes the interest on borrowings used to pay for the construction of major capital additions.
Depreciation expense is recorded using the straight-line method over estimated useful life, which ranges from
three to forty years. Depreciation expense is included within Other operating expenses in the accompanying
Statements of Operations. Gains and losses recognized on assets sold are reported in Other revenue and
Other operating expense, respectively, within the accompanying Statements of Operations. We defer gains
when we enter into contractual obligations requiring our continued involvement with the property. Deferred gains
are amortized over the periods during which we have continuing involvement with the applicable properties.
General maintenance and repair costs are charged to expense as incurred.
Software Capitalization
Software costs, including internal development costs, are capitalized when they meet certain criteria. Costs to
be capitalized include both contracted resources and employee labor costs incurred in the development of
internal-use software. Interest costs incurred while developing internal-use software are also capitalized. Costs
are accumulated until the software is put into production, at which time amortization of the internal-use software
begins for a period of three to ten years.
Leases
We lease over 24,000 real properties (inclusive of buildings, land, parking, and trailers) and have over 150
contracts for transportation equipment services that qualify as embedded leases.
Real property leases support retail, delivery, mail processing, maintenance, administrative, and support
activities. The lease terms for these real property leases generally range from one to thirty years plus any
renewal options that are reasonably certain to be exercised. The non-cancellable base terms of these leases
typically range from one to seven years. Some of these leases have one or more options to renew for additional
five-year terms for each option. Additionally, certain real property leases contain purchase and termination
options. At the commencement of most real property lease arrangements, we are not reasonably certain if we
will exercise such options. Real property leases include certain variable lease payments associated with
common area maintenance costs, portions of operating costs, and real estate taxes, which are generally
charged as a pass-through based on actual amounts incurred by the lessor. We record costs associated with
real property leases within Other operating expenses in the accompanying Statements of Operations.
Transportation equipment leases apply primarily to vehicles and trailers. The non-cancellable base terms of
these leases typically range from one to five years and may include one or more options to renew for an
additional one or two years. The lease terms for these transportation equipment leases generally range from
one to five years including any renewal options we are reasonably certain to exercise. Transportation equipment
leases do not contain purchase options, however these leases may contain termination options. At the
commencement of most transportation lease arrangements, we are not reasonably certain if we will exercise
such termination options. Certain transportation leases contain variable lease payments based on the volume of
activity under the contract. We record costs associated with transportation leases within Transportation in the
accompanying Statements of Operations.
General Definition
We determine at the inception of the contract if an arrangement represents a lease or contains lease
components. A contract is deemed to represent or include a lease if it conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. We assume to have the right to control the
use of the underlying asset if the contract conveys the rights to obtain substantially all of the economic benefits
of the underlying asset and the rights to direct how and for what purpose such asset is used during the contract
term.
As the lessee, we classify all leases with original lease terms less than one year as short-term leases. We
classify all other leases which transfer substantially all the risks and rewards of ownership to us as finance
2022 Report on Form 10-K United States Postal Service 50
leases. Finance lease right-of-use assets are included within Property and equipment, net in the accompanying
Balance Sheets. The current and noncurrent portions of finance lease liabilities are included within Payables
and accrued expenses and Other noncurrent liabilities, respectively, within the accompanying Balance Sheets.
We classify the remaining leases, not classified as short-term leases or finance leases, as operating leases. We
consider a lease term to include all non-cancelable periods and renewal periods when we are reasonably
certain that we will exercise the related renewal option.
Short-Term Leases
For short-term leases, we record lease expenses in the Statement of operations on a straight-line basis over the
lease term.
Lease Liabilities
Lease liabilities are initially measured at the net present value of the lease payments due after the
commencement date. For this purpose, lease payments include fixed and in-substance fixed rental payments,
variable lease payments that depend on an index or rate, and the price of options that we are, at the
commencement of the lease, reasonably certain to exercise. Lease liabilities are subsequently increased to
reflect the interest accrued and reduced when the lease payments are made.
Right-of-Use Assets
Right-of-use assets are initially measured at the net present value of the lease payments (including amounts
due prior to or on the commencement date), adjusted for the impact of initial direct costs and lease incentives.
For finance leases, right-of-use assets are subsequently amortized on a straight-line basis over the shorter of
the useful life of the underlying asset or the lease term. For operating leases, right-of-use assets are amortized
in such a way that the combination of the interest expense accrued on the lease liability and the asset
amortization results in a straight-line expense over the lease term.
Right-of-use assets for operating and finance leases are periodically reviewed for impairment losses, following
the same process as for other long-lived assets. Impairment losses on long-lived assets are recorded when
events or circumstances indicate that an asset's fair value is less than its carrying value. When such a
determination is made, the carrying values of the assets are written down to fair value. We use the long-lived
assets impairment guidance in ASC 360-10, Property, Plant, and Equipment - Overall, to determine whether a
right-of-use asset is impaired, and if so, the amount of the impairment loss to recognize.
Discount Rates
The discount rates used in net present value calculations are determined based on our incremental borrowing
rates on debt outstanding with the FFB at the beginning of each year, which are approximated as the daily U.S.
Treasury Yield Curve Rates for the five-year, 10-year, 20-year and 30-year periods, plus a 12.5 basis point
spread.
Variable lease payments, except for those based on an index or rate, are recognized as variable lease
expenses in the period in which the obligation for those payments are incurred.
Impaired Assets
Impairment losses on long-lived assets are recorded when events or circumstances indicate that an asset's fair
value is less than its carrying value. When such a determination is made, the carrying values of the assets are
written down to fair value. Fair value is typically determined by independent appraisals for real property. Due to
the absence of a market for most types of mailing equipment, impaired equipment assets are typically assigned
a fair value of zero.
Employees' Accumulated Leave
Employees' accumulated leave represents leave earned but unused as of the balance sheet date and is
recorded as a liability. Career employees earn annual leave based on the number of creditable years of service
with the federal government. We notify employees at the beginning of each calendar year of the amount of
leave they will earn for that year. Leave taken by employees before it is earned is considered an advance.
Advances are recorded within Receivables, net as presented in the accompanying Balance Sheets. The current
portion of employees' accumulated leave, which includes holiday leave, is included under Current liabilities
2022 Report on Form 10-K United States Postal Service 51
within Compensation and benefits in the accompanying Balance Sheets. The noncurrent portion is included
under Noncurrent liabilities within Employees' accumulated leave, noncurrent in the accompanying Balance
Sheets.
Retiree Benefits
Career employees are eligible to participate in the U.S. government pension and retiree health benefits
programs. We are required to provide funding for these plans as determined by OPM, the administrator of the
plans. We cannot direct the costs, benefits, or funding requirements of the plans. Accordingly, the plans are
accounted for using multiemployer plan accounting rules, and expenses are recorded in the period in which the
contributions are due and payable. Retirement benefit expenses, including FERS normal costs, FERS
amortization, and CSRS amortization cost are recorded within Retirement benefits in the accompanying
Statements of Operations. Any unpaid amounts at the end of the period are included within Retirement benefits
in the accompanying Balance Sheets. Although retiree health benefit expenses were cancelled by the PSRA,
these previously included retiree health benefit normal costs and PSRHBF amortization. These costs are
presented within Retiree health benefits in the accompanying Statements of Operations. Any unpaid amounts at
the end of the period are included within Retiree health benefits in the accompanying Balance Sheets.
Workers' Compensation
Our employees are covered by the FECA, administered by the OWCP, an office within DOL. We record a
liability for our workers' compensation obligations for employees who have been injured on the job and are
eligible for benefits, or for their qualified survivors. We use an estimation model that utilizes four generally
accepted actuarial valuation techniques based upon past claim-payment experience and exposure to claims as
measured by total employee hours worked.
Changes in the liability are primarily attributable to the combined impacts of routine changes in actuarial
assumptions, new compensation and medical cases, the progression of existing cases and changes in interest
(discount) and inflation rates, including long-term COLA rates for compensation claims, and medical rates for
medical claims. These rates are updated as of the balance sheet date and factored into the model.
To determine the liability each quarter, we first estimate the future total cost of workers' compensation claims
based on the dates of claim-related injuries, frequency or severity of the injuries, the pattern of historical
payments to beneficiaries and the expected trend in future costs. We then calculate the amount that would need
to be invested at current interest (discount) rates to fully fund the future total cost of claims, and this calculated
present value is the recorded value of workers' compensation liability.
An independent actuary assists in determining the liability for claims arising more than 15 years ago for years
1972 through 2006. The percentage increase in payments between 15-year old claims and closure of all claims
is applied to the latest 15 years' estimates directly calculated within the estimation model for both compensation
and medical losses.
Contingent Liabilities
We are a party to various legal proceedings and claims in the normal conduct of operations. Contingent
liabilities require significant judgment in estimating potential losses. Our contingent liabilities consist primarily of
claims resulting from labor and employment matters; asset retirement obligations and environmental matters;
property damage and injuries on our properties; and issues arising from our contracts, personal claims, and
traffic accidents. Each quarter, we evaluate significant new claims and litigation for the probability of an adverse
outcome. If we determine that an unfavorable outcome from a new claim is both probable and reasonably
estimable, we record a liability for the potential loss. Preexisting claims are also reviewed and adjusted quarterly
for resolutions or revisions to prior estimates based on new facts and circumstances.
Revenue Recognition
We generate the majority of our revenue from contracts associated with the processing and delivery of different
types of mail and packages, both domestically and internationally, which generally occurs over several days.
2022 Report on Form 10-K United States Postal Service 52
Satisfaction of Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A
contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue
when, or as, the performance obligation is satisfied.
First-Class Mail, Marketing Mail, Shipping and Packages, International Mail and Periodicals are categorized as
mailing and shipping services for purposes of satisfying performance obligations. We recognize revenue for
mailing and shipping services as we fulfill our obligation to process and deliver each mailpiece.
Other revenue includes PO Box services, Return Receipts, Insurance, Other Ancillary Services, Shipping and
Mailing Supplies, Collect on Delivery, Registered Mail, Stamped Envelopes and Cards, money orders, and other
goods and services. We recognize revenue for the majority of these services over time. The revenue for a small
portion of certain goods or services in this service category is recognized at a point in time.
The vast majority of our contracts include only one performance obligation. However, if a contract is separated
into more than one performance obligation, the total transaction price for each performance obligation is
allocated in an amount based on the estimated relative stand-alone selling prices of the promised goods or
services underlying each performance obligation. The majority of the goods or services we sell have observable
stand-alone sales prices. Furthermore, we receive payment for the majority of our goods and services up front.
Variable Consideration
We offer certain contracts to our customers that contain various types of customer incentives or other provisions
that can either increase or decrease the transaction price. Customer incentives include discounts, money back
guarantees, rebates, refunds or incentive payments. The other provisions include performance penalties. We
use the expected value approach to estimate variable consideration to which we expect to be entitled.
Contract Modifications
We consider contract modifications to exist when the modification either creates new enforceable rights and
obligations or alters the existing arrangement. Contract modifications do not add distinct services; they are
typically used to change the prices that we charge our customer for existing services. These contract
modifications are accounted for prospectively as the remaining performance obligations are executed.
Principal vs. Agent Consideration
We utilize third parties to assist with the transportation of mailpieces between different points as part of the
processing and delivery process. Based on our evaluation of the transfer of control model, we have determined
that we act as the principal rather than the agent within these arrangements.
Contract Liabilities
The vast majority of our contract liabilities consist of deferred revenue for postage and prepaid PO Box and
Caller Service fees. Deferred revenue for postage is postage that has been sold, but not yet used by customers.
Because we collect payments for our services in advance of the satisfaction of related performance obligations,
we defer and report this unearned revenue as Deferred revenue-prepaid postage as a liability in our Balance
Sheets.
The liability includes an estimate for deferred revenue for forever stamps. This estimate is developed and
validated through mathematical and statistical sampling methods for estimating postage stamp usage. Revenue
is also recognized for "breakage" representing a portion of forever stamps that will never be used for mailing
due to loss, damage or stamp collection.
The liability includes deferred revenue for metered postage, which is primarily a commercial product. For certain
metered postage, this is estimated by monitoring the actual usage of all postage meters that had postage added
during the month preceding the financial measurement date. The information from the two most recent meter
readings is used to derive a deferral percentage, which is applied to all postage meter receipts for this type of
metered postage for the month. For other metered postage, a roll-forward transactional model is used to
determine the ending balance on account, which is the amount we defer.
2022 Report on Form 10-K United States Postal Service 53
The liability also includes an estimate for mail that is in-transit within our processing and delivery network.
Deferred revenue for mail-in-transit is recognized over time as it is processed through our network. The revenue
is fully recognized once the mail piece reaches its final destination.
The contract liability for prepaid PO Box and Caller Service fees consists of payments received from customers
for PO Box and Caller Service fees at the beginning of their contracts. We defer and reflect this unearned
revenue as prepaid PO Box and Caller Service fees within Other current liabilities in the accompanying Balance
Sheets. Revenue is recognized over time as customers use the PO Box and Caller Services over the terms of
their contracts.
Revenue Forgone
Under the Revenue Forgone Reform Act of 1993 (the "RFA"), Congress agreed to provide $1.2 billion in 42
annual installments of $29 million through the year 2035. These installment payments were reimbursement for
revenue “forgone” between 1991 and 1998 as a result of our legal requirement to offer below-cost postage
prices provided to certain categories of mailers, including, but not limited to, non-profit organizations, blind
individuals, local newspapers, publishers of educational material, and oversees mailers of absentee voting
ballots.
In 1993, we determined the present value of the installment payments, calculated at 7% discount rate, was
$390 million and recognized this revenue and recorded the corresponding receivable ratably between 1991 and
1998. Since no stated interest rate was included within the RFA, we recognize imputed interest on this
receivable. Imputed interest is included within Interest and investment income in the accompanying Statements
of Operations.
Advertising
Advertising costs, which we expense as they are incurred, were $205 million, $188 million, and $155 million for
the years ended September 30, 2022, 2021, and 2020, respectively, and are included within Other operating
expenses in the accompanying Statements of Operations.
Foreign Currency Risk
Foreign currency risk can arise from international mail transactions related to settlements of receivables and
payables with foreign postal administrations. The majority of international accounts are denominated in special
drawing rights, based on a group of currencies comprised of the euro, Japanese yen, Chinese yuan, British
pound sterling, and the U.S. dollar, which fluctuate daily. Changes in the relative value of these currencies
increase or decrease the value of the settlement accounts and result in a gain or loss that is included in
operating results. Operating results were not materially impacted by foreign exchange rate movements for the
years ended September 30, 2022, 2021, and 2020.
Related Parties
As disclosed throughout this report, we conduct significant transactions with other U.S. government entities,
which are considered related parties in accordance with GAAP.
Fair Value Measurement
Fair value is measured based on the price that would be received upon sale of an asset or the price that would
be paid to transfer a liability between unrelated parties.
The carrying amounts of certain current assets and liabilities, including cash and cash equivalents, restricted
cash, accounts receivable, accounts payable, and accrued expenses, approximate fair value due to their short-
term nature. Assets within Property and equipment, net are recorded at cost and measured at fair value on a
nonrecurring basis if they are determined to be impaired or classified as assets held for sale.
Noncurrent receivables and long-term debt are disclosed at fair value using inputs of the fair value hierarchy
model. This model prioritizes observable and unobservable inputs, which are used to measure fair value, and
consists of three broad levels:
2022 Report on Form 10-K United States Postal Service 54
Level 1 inputs include unadjusted quoted prices in active markets for identical assets or liabilities as of
the balance sheet date.
Level 2 inputs include observable data, such as quoted prices for similar assets and liabilities in active
markets, quoted prices for identical or similar assets or liabilities in inactive markets, observable data,
other than quoted market prices for the asset or liability (i.e., interest rates, yield curves, etc.) and inputs
that are derived from, or corroborated by, observable market data.
Level 3 inputs include unobservable data that reflect current assumptions about the judgments and
estimates that market participants would use when pricing the asset or liability. These inputs are based
on the best information available, including internal data.
NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS
In November 2021, the FASB issued ASU 2021-10 Disclosures by Business Entities about Government
Assistance, which has since been codified in ASC 832, Government Assistance. It establishes disclosure
requirements to increase the transparency and comparability of government assistance received by an entity.
The requirements include: 1) the types of assistance; 2) an entity’s accounting for the assistance; and 3) the
effect of the assistance on an entity’s financial statements.
We adopted this standard on October 1, 2022. Given our status as an independent establishment of the
executive branch, in instances where material government assistance has been received, such transactions
already require disclosure under ASC 850, Related Parties. As such, we do not expect the adoption to have a
significant impact on our disclosures.
NOTE 3 - LIQUIDITY
Our liquidity consists of unrestricted cash and cash equivalents plus authorized borrowing capacity under the
PRA.
Cash
We hold our funds with the Federal Reserve Bank of New York or invested in highly liquid, short-term
investments issued by the U.S. Treasury.
The following table provides the total cash, cash equivalents, and restricted cash as of September 30, 2022,
2021, and 2020:
(in millions)
2022 2021 2020
Cash and cash equivalents $ 19,607 $ 23,858 $ 14,358
Restricted cash 1,011 449 354
Restricted cash, noncurrent 3,000
Total cash, cash equivalents, and
restricted cash $ 23,618 $ 24,307 $ 14,712
These amounts correspond to the totals reported in the Statements of Cash Flows for the years ended
September 30, 2022, 2021, and 2020.
In September 2022, we received $3.0 billion under the IRA, enacted as Public Law 117-169. Of this amount,
$1.29 billion is available for the procurement of zero-emission vehicles and $1.71 billion is available for the
purchase, design, and installation of the requisite infrastructure to support zero-emission delivery vehicles at
facilities that we own or lease from non-Federal entities. See Note 5 - Related Parties for additional information.
During 2021, we received $10.0 billion under the CARES Act. This amount was available to fund operating
expenses incurred as a result of the pandemic.
From March 27, 2020 through December 31, 2020, we deferred payment totaling $1.8 billion, representing the
employer’s share of the Social Security payroll tax on wages, as authorized by the CARES Act. One half of
2022 Report on Form 10-K United States Postal Service 55
these deferred payments was due and paid on December 31, 2021. The other half is due by December 31,
2022, and is recorded within Compensation and benefits in the accompanying Balance Sheets.
Debt
The PRA authorizes us to raise cash through the issuance of debt obligations. The PRA requires us to notify the
Secretary of the Treasury of our intent to issue debt and to allow the U.S. Treasury the first option to purchase
such obligations. However, if the Secretary of the Treasury elects not to purchase such obligations, the PRA
authorizes us to issue and sell such obligations to a party or parties other than the U.S. Treasury, which may
include a transaction in the public or private debt markets. Under the PRA, we are limited by statute to annual
net increases in debt of $3.0 billion calculated as of the end of each fiscal year and total debt of $15.0 billion.
As of September 30, 2022 and 2021, the aggregate principal of all debt outstanding was $10.0 billion and $11.0
billion, respectively, all of which was issued to the FFB, a government-owned corporation under the general
supervision of the Secretary of the Treasury. See Note 9 - Debt for additional information regarding the Postal
Service's debt.
As of September 30, 2022, we had $5.0 billion in remaining borrowing capacity under the PRA, but are still
limited to $3.0 billion in net incremental borrowing calculated as of the end of each fiscal year, due to the
limitation on annual net increases in debt.
Liquidity Concerns
We continue to face systemic imbalances that make our current operating model unsustainable. As
communicated in the Delivering for America plan that was published in March 2021, we are implementing
strategic operational reforms to meet the changing needs of our business and residential customers. The
passage of the PSRA has also significantly improved our financial condition. However, while the enactment of
the PSRA is a critical component of the plan, the success of the plan still requires management initiatives and
administrative change to retiree benefit funding rules determining how OPM apportions the costs for CSRS
benefits for employees and retirees that worked for both the Post Office Department and the Postal Service.
Shortfalls or delays in implementation of the plan will place additional pressure on our liquidity and financial
results. As a result of these concerns, we may not have sufficient liquidity to meet all of our existing legal
obligations when due while also repaying our maturing debt and making the critical infrastructure investments
that have been deferred in recent years.
Furthermore, while we may issue debt obligations within our statutory borrowing authority, we have no
assurance that we would be able to raise additional cash through new debt financing with the FFB or from other
lenders, or that such financing would be provided on terms comparable to those applicable to our prior debt
issuances.
Business Model Challenges/Constraints
We are constrained by laws and regulations which restrict revenue sources, mandate certain expenses, and
have made it impossible to cover all legally imposed costs. Many employee and retiree benefit costs are
mandated by law and cannot be altered without legislative change, and some of these costs have historically
increased at a higher rate than inflation. Such expenses include amortization payments to provide full funding of
retirement benefits that are unlike those imposed on most other federal entities or private-sector businesses that
offer such benefits. As a result, we have experienced many years of net losses, and our liabilities greatly exceed
our assets.
Mail volumes, representing First-Class Mail and Marketing Mail, have declined 42 percent between 2007 and
2022. Despite these declines, mail services still account for more than half of our operating revenue in 2022.
These services have historically been subject to a price cap system measured by the increase in CPI-U. In
November 2020, the PRC modified the price cap system by providing some additional pricing flexibility and
authority that will allow us to establish more efficient pricing. However, our ability to generate increased revenue
is still constrained by the existing price cap system and declining volumes.
Our costs are not similarly constrained or capped, and we continue to be constrained by law, or by contract,
from reducing many of our costs or from pursuing many alternate sources of revenue. A large portion of our cost
2022 Report on Form 10-K United States Postal Service 56
structure cannot be altered expeditiously due to our universal service mission. Many employee costs, such as
compensation and employee health benefit premiums, are subject to changes in contractual arrangements.
Other employee costs, such as workers' compensation costs and retiree benefit amortization costs are
mandated by law and cannot be altered without legislative change.
Furthermore, the number of delivery points continues to grow with an increase of 1.8 million in 2022, which,
when combined with lower mail volume, has resulted in a drop in the average number of pieces delivered per
delivery point per day from 5.5 pieces in 2007 to 2.9 pieces in 2022, a decline of 47%.
Past Due Obligations
In order to preserve liquidity and ensure that our ability to fulfill our primary mission is not placed at undue risk,
we have not made annual payments to OPM for certain CSRS and FERS retirement benefits. In 2022, we were
unable to make the CSRS payment of $2.3 billion and the full payment of $1.6 billion towards our FERS
obligation. However, we did remit a partial payment of $500 million towards our FERS obligation for the current
year, reflective of our improving financial condition.
The following table presents the total expenses accrued but unpaid by us as of September 30, 2022 related to
CSRS and FERS, and the fiscal years in which the accruals were recorded:
2012 to
(in millions)
2022 2021 2020 2019 Total
CSRS unfunded retirement benefits amortization 2,284 1,858 1,817 4,798 10,757
FERS unfunded retirement benefits amortization 1,126 1,401 1,343 3,430 7,300
Total expenses accrued but unpaid $ 3,410 $ 3,259 $ 3,160 $ 8,228 $ 18,057
As of the date of this report, we have not incurred any penalties or negative financial consequences as a result
of not making these payments.
Mitigating Circumstances
We continue to pursue strategies within our control to increase operational efficiency and improve liquidity. We
have managed capital in recent years by spending only what we believed essential to maintain our existing
facilities and service levels and to increase efficiencies. However, continued increases in capital investment are
necessary to upgrade our facilities, fleet of vehicles, and processing equipment in order to remain operationally
viable. Aggressive management of the business operations that will enable us to increase revenue and reduce
costs and administrative reform related to how OPM apportions the cost of CSRS benefits will all be necessary
to restore us to financial health.
Our status as an independent establishment of the executive branch that does not generally receive tax dollars
for our operations presents unique requirements and restrictions but also potentially mitigates some of the
financial risk that would otherwise be associated with a cash shortfall. With annual total revenue of
approximately $79 billion in 2022, a financially sound Postal Service continues to be vital to the U.S. commerce.
The U.S. economy benefits greatly from the Postal Service and the many businesses that provide the printing
and mailing services that we support. Disruption of the mail would cause undue hardship to businesses and
consumers as it would significantly inhibit the remittance of payments through the mail, as well as vital mail and
packages like medicine, essential consumer staples, benefit checks, and important information. In the event of a
cash shortfall, the U.S. government would likely prevent us from significantly curtailing or ceasing operations.
We continue to inform the executive branch, Congress, the PRC, and other stakeholders of the immediate and
long-term financial challenges we face and the administrative changes that are required to restore our financial
stability.
In the event that circumstances leave us with insufficient liquidity, it would likely be required for us to implement
additional contingency plans to ensure that our primary mission is fulfilled and that mail deliveries continue.
These measures may require us to prioritize payments to the FFB, employees, and suppliers ahead of some
payments to fund retirement benefits, as has been done in the past.
2022 Report on Form 10-K United States Postal Service 57
NOTE 4 - REVENUE RECOGNITION AND DEFERRED REVENUE
The PAEA classifies the services we offer as either Market-Dominant or Competitive products; however, the
term "services" are used in this report for consistency with other descriptions of services we offer.
The following table summarizes our disaggregated operating revenue for the year ended September 30, 2022,
2021, and 2020 by each service category:
(in millions)
2022 2021
1
2020
1
Operating revenue:
First-Class Mail
2
$ 24,036 $ 23,264 $ 23,781
Marketing Mail
3
16,002 14,589 13,909
Shipping and Packages
4
31,308 32,008 28,529
International 1,713 2,202 2,408
Periodicals 959 942 1,024
Other
5
4,489 4,004 3,472
Total operating revenue $ 78,507 $ 77,009 $ 73,123
1
Prior period amounts for certain service categories include reclassifications of amounts amongst service categories to conform to
current period presentation. These reclassifications are immaterial for each affected category and have no effect on total operating
revenue for the period. These reclassifications are required by Postal Service regulatory requirements and are included in this
document for consistency amongst publicly-available information.
2
Excludes First-Class Package Service - Retail and First-Class Package Service - Commercial.
3
Excludes Marketing Mail Parcels.
4
Includes Priority Mail, USPS Retail Ground, Parcel Select Mail, Parcel Return Service Mail, Marketing Mail Parcels, Package Service
Mail, First-Class Package Service - Retail, First-Class Package Service - Commercial and Priority Mail Express.
5
Includes PO Box and Caller services, Certified Mail, Return Receipts, Insurance, Other Ancillary Services, Shipping and Mailing
Supplies, Collect on Delivery, Registered Mail, Stamped Envelopes and Cards, Money Orders and other services.
The following table presents the opening balance of our contract liabilities, including Deferred revenue-prepaid
postage and prepaid PO Box and Caller Service fees, as of September 30, 2022 and 2021:
(in millions)
2022 2021
Deferred revenue-prepaid postage:
Forever stamps
Mail-in-transit
$ 1,466
608
$ 1,581
600
Metered postage
Other prepaid postage
Total deferred revenue-prepaid postage
Prepaid PO Box and Caller Service fees
343
102
2,519
610
324
118
2,623
557
Total deferred revenue $ 3,129 $ 3,180
The following table provides details of revenue recognized for the year ended September 30, 2022, that was
reported in our deferred revenue as of September 30, 2021:
(in millions)
2022
Revenue recognized from deferred revenue:
Forever stamps $ 1,223
Mail-in-transit 600
Metered postage
Other prepaid postage
PO Box and Caller Service fees
2022 Report on Form 10-K United States Postal Service 58
324
104
557
NOTE 5 - RELATED PARTIES
In September 2022, we received $3.0 billion under the IRA. Of this amount, $1.29 billion is available for the
procurement of zero-emission vehicles and $1.71 billion is available for the purchase, design, and installation of
the requisite infrastructure to support zero-emission delivery vehicles at facilities that we own or lease from non-
Federal entities. These amounts remain available for use through September 30, 2031. We recorded this
funding within Restricted cash, noncurrent and Capital contributions of the U.S. government in the
accompanying Balance Sheets.
In April 2022, the PSRA repealed the requirement that we annually prepay future retiree health benefits and
cancels all past due prefunding obligations. The repeal of the prefunding for retiree health benefits and
cancellation of the past due payments are reflected as a one-time, non-cash benefit of $57.0 billion to net
income in the accompanying Statements of Operations for the year ended September 30, 2022.
In January 2022, we signed an inter-agency agreement with the HHS to distribute COVID-19 tests to American
households upon their request. The agreement provides that we will receive payment for postage and be fully
reimbursed for our costs. Following completion of the contract, any unused funding that had been advanced by
HHS will be returned. Alternatively, if the postage and reimbursable costs should exceed the amount already
received, HHS will provide additional funding.
During 2021, we received $10.0 billion under the CARES Act. This amount was available to fund operating
expenses incurred as a result of the pandemic. This funding was recorded within Capital contributions of the
U.S. government in the accompanying Balance Sheets.
The following table presents related-party assets and liabilities as of September 30, 2022 and 2021:
(in millions)
2022 2021
Related-party assets:
Carrying amount of revenue forgone installment receivable
1
$ 522 $ 504
Related-party liabilities:
Short-term debt $ $ 1,000
Other current liabilities
2
19,776 73,814
Long-term debt 10,000 10,000
Other noncurrent liabilities
3
13,430 16,861
1
Included within Other assets in the accompanying Balance Sheets. The 2022 Congressional appropriations bill did not include an
appropriation for the annual revenue forgone installment, bringing the past due amounts unpaid by Congress to $279 million. See further
discussion in Note 15 - Revenue Forgone and Note 16 - Fair Value Measurement.
2
Amounts include CSRS and FERS obligations and current workers' compensation obligations due to DOL, as well as payables to other
agencies. Amount reported as of September 30, 2021 includes PSRHBF obligations that were eliminated by the PSRA. See further
discussion in Note 11 - Retirement Benefits, Note 12 - Health Benefit Plans, and Note 13 - Workers’ Compensation. Amount reported as
of September 30, 2022 includes the remaining funding associated with the COVID-19 test distribution.
3
Amounts include noncurrent workers' compensation obligations due to DOL.
2022 Report on Form 10-K United States Postal Service 59
The following table presents related-party revenue and expenses for the years ended September 30, 2022,
2021, and 2020:
(in millions)
2022 2021 2020
1
Related-party operating revenue $ 2,409 $ 1,304 $ 1,373
2
Related-party operating expenses 14,400 18,286 17,519
Impact of Postal Service reform legislation
3
56,975
Related-party interest income
4
188 28 91
5
Related-party interest expense 167 149 203
1
Included within Operating revenue in the accompanying Statements of Operations. Amount reported for 2022 includes revenue from
HHS associated with the COVID-19 test distribution.
2
Included within Operating expenses in the accompanying Statements of Operations.
3
Represents the one-time, non-cash benefit recorded for the PSRA impact in the accompanying Statements of Operations.
4
Imputed on the revenue forgone installment receivable, as well as interest generated on U.S. Treasury instruments and other cash
equivalents held with the Federal Reserve Bank of New York. Included within Interest and investment income in the accompanying
Statements of Operations.
5
Incurred on debt issued to the FFB and included within Interest expense in the accompanying Statements of Operations.
NOTE 6 - RECEIVABLES, NET
The following table details Receivables, net from the accompanying Balance Sheets as of September 30, 2022
and 2021:
(in millions)
2022 2021
Foreign postal administrations $ 772 $ 991
U.S. government* 33 25
Other 661 530
Receivables before allowances 1,466 1,546
Less: Allowances 140 134
Receivables, net $ 1,326 $ 1,412
* U.S. government receivables amounts exclude noncurrent receivables.
NOTE 7 - PROPERTY AND EQUIPMENT, NET
The following table provides details for Property and equipment, net from the accompanying Balance Sheets as
of September 30, 2022 and 2021:
Estimated life in
(in millions, except years)
years 2022 2021
Buildings 3 - 40 $ 26,975 $ 26,449
Equipment 3 - 20 14,954 14,566
Vehicles 5 - 24 5,077 4,909
Land - 2,872 2,869
Leasehold improvements 3 - 20 1,978 1,862
Property and equipment, at cost $ 51,856 $ 50,655
Less: Accumulated depreciation and
amortization 38,486 37,474
Construction in progress 1,777 1,597
Property and equipment, net $ 15,147 $ 14,778
Total deferred gains on the sale of property were $369 million and $371 million as of September 30, 2022 and
2021, respectively.
2022 Report on Form 10-K United States Postal Service 60
Depreciation and amortization expenses were $1.7 billion for each of the years ended September 30, 2022,
2021, and 2020, and are included within Other operating expenses in the accompanying Statements of
Operations.
NOTE 8 - PAYABLES AND ACCRUED EXPENSES
The following table provides details for Payables and accrued expenses from the accompanying Balance
Sheets as of September 30, 2022 and 2021:
(in millions)
2022 2021
Trade payables $ 838 $ 698
Foreign postal administrations 443 589
Inspection Service seizure and forfeiture account 202 212
Current portion of contingent liabilities 329 138
U.S. government 72 91
Other accrued expenses 878 795
Total payables and accrued expenses $ 2,762 $ 2,523
NOTE 9 - DEBT
As mentioned in Note 3 - Liquidity, under the PRA, we are legally authorized to issue debt obligations. All of our
debt is unsecured, not subject to sinking fund requirements, and can be repaid at any time at a premium/
discount determined by the Secretary of the Treasury based on prevailing interest rates in the U.S. Treasury
securities market at the time of repayment. The floating-rate debt obligations may also be repaid at par each
quarter, when their interest rates reset. As of September 30, 2022, the discount associated with a prepayment of
all debt was $384 million based on prevailing interest rates. The weighted average interest rate for all
outstanding debt was 2.757% as of September 30, 2022.
2022 Report on Form 10-K United States Postal Service 61
The following table provides details for Short-term debt and Long-term debt from the accompanying Balance
Sheets as of September 30, 2022 and 2021:
(in millions, except percentages)
2022 2021
Maturity Balance Rate % Balance Rate %
Short-term debt:
Fixed rate note:
April 15, 2022 $
Total short-term debt $
$
$
1,000
1,000
2.446
Long-term debt:
Floating rate notes:
*
November 20, 2053 $ 1,000 2.953 $ 1,000 0.185
June 20, 2053 1,300 3.516 1,300 0.166
February 12, 2054 1,200 2.800 1,200 0.186
February 12, 2054 800 2.800 800 0.186
February 25, 2054 500 2.953 500 0.176
May 12, 2054 700 2.800 700 0.186
Fixed rate notes:
April 30, 2024 1,000 2.425 1,000 2.425
July 31, 2026 700 1.679 700 1.679
August 15, 2029 1,000 1.728 1,000 1.728
August 15, 2029 300 1.620 300 1.620
May 17, 2038 200 3.770 200 3.770
February 15, 2039 1,000 3.790 1,000 3.790
August 16, 2049 300 2.180 300 2.180
Total long-term debt $ 10,000 $ 10,000
Total debt $ 10,000 $ 11,000
*
The interest rates on the floating rate notes reset three months after the initial advance date and then on a quarterly basis throughout
the life of the individual notes.
At September 30, 2022, scheduled repayments of debt principal are listed below:
(in millions)
Principal Amount
2023 $
2024 1,000
2025
2026 700
2027
Thereafter 8,300
Total debt maturities $ 10,000
2022 Report on Form 10-K United States Postal Service 62
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Capital Commitments
Capital commitments consist primarily of commitments to invest in equipment and building construction and
improvements. The significant increase in our commitments in 2022 reflects our multi-year infrastructure and
vehicle investment strategy consistent with our Delivering for America plan. The following table provides details
for approved capital projects in progress at September 30, 2022 and 2021:
(in millions)
2022 2021
Mail processing equipment $ 731 $ 823
Building improvements, construction and building purchase 827 530
Postal support equipment 199 89
Vehicles and other 3,856 791
Total capital commitments $ 5,613 $ 2,233
Collective Bargaining Agreements
As of September 30, 2022, we had active contracts with the NALC, which will expire on May 20, 2023, the
NRLCA, which will expire on May 20, 2024, and the APWU, which will expire on September 20, 2024.
In September 2022, we agreed to extend contract negotiations on a new collective bargaining agreement with
the NPMHU. The previous three-year collective bargaining agreement with the NPMHU had an effective date of
September 20, 2019 and expired on September 20, 2022, However, the respective parties mutually agreed to
extend negotiations beyond the original deadline. As of the date of this report, no final agreement has been
reached.
Contingent Liabilities
Provision for Losses
We have made adequate provision for probable losses arising from all claims. The following table presents
contingent liabilities by current and noncurrent portions and by category as of September 30, 2022 and 2021:
(in millions)
2022 2021
Current/noncurrent portions of contingent liabilities:
Current portion
1
$ 329 $ 138
Noncurrent portion
2
145 201
Total contingent liabilities $ 474 $ 339
Contingent liabilities by category:
Labor and employment matters $ 281 $ 195
Asset retirement obligations 53 63
Tort matters 97 81
Contractual matters 43
Total contingent liabilities $ 474 $ 339
1
Included within Payables and accrued expenses in the accompanying Balance Sheets.
2
Included within Other noncurrent liabilities in the accompanying Balance Sheets.
Reasonably Possible Contingencies
In accordance with GAAP, we do not accrue for contingencies that we deem reasonably possible of an
unfavorable outcome. These ranged in amount from $300 million to $1.2 billion at both September 30, 2022 and
2021.
2022 Report on Form 10-K United States Postal Service 63
NOTE 11 - RETIREMENT PLANS
The majority of our career employees participate in one of two U.S. government defined benefit pension
programs, CSRS and FERS, which OPM administers. These plans provide retirement, death, and disability
benefits for eligible employees based on specific eligibility and participation requirements, vesting periods, and
benefit formulas. As government-sponsored benefit plans, CSRS and FERS are not subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended.
Each employee's participation in either plan is based on the starting date of employment with us or another U.S.
government entity. CSRS provides a basic annuity plan benefit to employees hired before January 1, 1984.
CSRS Offset provides Social Security benefits in addition to its basic annuity plan for employees hired between
January 1, 1984, and January 1, 1987. Effective January 1, 1987, FERS provides a basic annuity plan benefit to
most employees hired since December 31, 1983. FERS employees are further categorized as either FERS,
FERS - RAE, or FERS - FRAE depending on whether their date of hire was before, during, or after calendar
year 2013, respectively.
The PAEA suspended our employer contributions to CSRS that would otherwise have been required under Title
5, Section 8334(a)(1) of the U.S. Code, although CSRS employees continue to contribute to the plan. For
FERS, we contribute to the plan an amount established by OPM as the employer portion of retirement benefits
for participating employees and their qualifying survivors, upon retirement, for each employee’s current year of
service (normal cost).
Career employees may also participate in the TSP, a defined contribution retirement savings and investment
plan administered by the Federal Retirement Thrift Investment Board. Our TSP expenses are related only to our
contributions for FERS employees. CSRS and CSRS Offset employees may participate in the TSP, although we
do not match contributions for these participants.
For FERS employees, we contribute an automatic 1% contribution of basic pay, a 100% match of the first 3% of
basic pay, and a 50% match of the next 2% of basic pay. We recognize Social Security and TSP expenses as
they are incurred and record them within Compensation and benefits in the Statements of Operations. A liability
is established for any contribution due and unpaid at the end of each reporting period. Amounts are generally
expected to be paid within one year and are included within Compensation and benefits in the accompanying
Balance Sheets.
The following table presents the employee and employer contributions, as a percentage of employee basic pay,
for the years ended September 30, 2022, 2021, and 2020:
2022 2021 2020
Postal Postal Postal
Employee
Contribution
Service
Contribution
Employee
Contribution
Service
Contribution
Employee
Contribution
Service
Contribution
CSRS 7.0% —% 7.0% —% 7.0% —%
FERS 0.8% 16.2% 0.8% 15.7% 0.8% 14.7%
FERS-RAE 3.1% 14.4% 3.1% 13.8% 3.1% 12.8%
FERS-FRAE 4.4% 13.4% 4.4% 12.7% 4.4% 11.7%
Aside from these different contribution rates, we use the term "FERS employees" to apply to employees in all of
the FERS categories.
2022 Report on Form 10-K United States Postal Service 64
The following table provides details for the number of active employees enrolled in CSRS and FERS for the
years ended September 30, 2022, 2021, and 2020:
2022 2021 2020
CSRS and CSRS Offset 8,638 11,132 14,458
FERS 228,146 250,820 275,386
FERS - RAE 6,477 6,737 6,965
FERS - FRAE 273,961 247,985 198,959
Total enrollment 517,222 516,674 495,768
The following table presents the retirement benefits expenses for the years ended September 30, 2022, 2021,
and 2020:
(in millions)
2022 2021 2020
FERS normal costs $ 4,452 $ 4,117 $ 3,804
CSRS unfunded retirement benefits
amortization
1
2,284 1,858 1,817
FERS unfunded retirement benefits
amortization
2
1,626 1,401 1,343
Total retirement benefits $ 8,362 $ 7,376 $ 6,964
1
Expense for the accrual for the annual payment due to OPM by September 30 of the respective fiscal year, to amortize the unfunded
CSRS retirement obligation. Payments are to be made through 2043 based on OPM invoices.
2
Expense for the accrual for the annual payment due to OPM by September 30 of the respective fiscal year, to amortize the unfunded
FERS retirement obligation. Payments are to be made over a 30-year rolling period based on OPM invoices.
CSRS and FERS Unfunded Retirement Benefits
OPM periodically notifies us regarding our revaluation of unfunded CSRS and FERS liabilities. OPM calculates
these obligations using Postal Service-specific demographics data and government-wide economic
assumptions, including salary growth assumptions. These amounts may be significantly impacted by changes in
actuarial assumptions used to revalue the unfunded liabilities.
We received invoices from OPM in the amounts of $2.3 billion and $1.6 billion for our 2022 CSRS and FERS
amortization obligations, respectively. As indicated in Note 3 - Liquidity, we paid $500 million towards our 2022
FERS amortization obligations. However, we did not make the remainder of the 2022 payments in order to
preserve liquidity to ensure that our ability to fulfill the primary universal service mission was not placed at
undue risk. Total unpaid amounts were $18.1 billion and $14.6 billion at September 30, 2022 and 2021,
respectively.
CSRS and FERS Funded Status
As of September 30, 2020, the most current period available, we provided 16% of the total plan contributions for
FERS from all U.S. government employers (as derived from OPM's Civil Service Retirement and Disability Fund
Annual Report dated March 2022).
As noted above, the latest available actual data for the government-wide CSRS and FERS plans is
September 30, 2020. As of that date, the CSRS plan for the U.S. government, taken as a whole, was 18%
funded. Total plan assets and accumulated benefit obligations for the CSRS plan were $184 billion and $1.0
trillion, respectively. The FERS plan for the U.S. government, taken as a whole, was 79% funded. Total plan
assets and accumulated benefit obligations for the FERS plan were $778 billion and $987 billion, respectively.
NOTE 12 - HEALTH BENEFITS PLANS
The FEHB Program covers nearly all of our career employees. It also covers pre-career employees and retirees
who meet certain eligibility requirements. OPM administers the FEHB program and allocates the cost of funding
the program to participating U.S. government employers. We offer our own self-insured health-care plan to
certain pre-career employees who are ineligible for the FEHB program.
2022 Report on Form 10-K United States Postal Service 65
The PSRA establishes the PSHB Program within the FEHB Program. Beginning in January 2025, the Postal
Service’s employees and annuitants eligible under the FEHB Program will be covered under the PSHB
Program. Coverage and cost-sharing under the PSHB Program will be similar to that under the FEHB Program.
Active Employees
Our expenses for the self-insured health care plan were $167 million, $196 million, and $172 million for the
years ended September 30, 2022, 2021, and 2020, respectively.
We paid 72% of health-care premium costs for active employees that participate in the FEHB Program during
each of the years ended September 30, 2022, 2021, and 2020. Although OPM determines the actual premium
costs for the FEHB Program, the allocation of these costs between ourselves and most of our employees is
determined through agreements with our labor unions.
Our employer share of employee health-care expenses (including Medicare taxes and expenses for the self-
insured health care plan) was $5.2 billion for each of the years ended September 30, 2022, 2021, and 2020,
respectively.
Retirees
Our retirees who participated in the FEHB Program for the five years immediately preceding their retirement
may continue to participate in the plan during retirement. Qualifying survivors of retirees are also eligible to
receive benefits. This eligibility criteria will extend to retirees under the PSHB Program.
The PSRA made significant changes to our retiree health benefit costs. This legislation eliminated the unique
obligation to prefund the retiree health benefit program and cancelled past due prefunding obligations. The
PSRHBF will continue to pay annuitant premiums for our annuitants until the fund is exhausted. Once
exhausted, we will return to a pay-as-you-go methodology, similar to most other federal agencies and private-
sector businesses. Furthermore, beginning in January 2025, the PSRA requires the enrollment of annuitants
covered by the PSHB Program in Medicare, with certain limited exceptions.
Not later than 2026, we will also be required to make annual top-up payments to the PSRHBF, based on the
difference between annuitant premiums and net claims costs, should claims costs exceed the premium
payments.
We will not incur retiree health benefit costs until either OPM’s annual calculation results in a top-up payment,
expected to occur in 2026, or the PSRHBF is exhausted and we are required to make contributions to OPM for
annuitant premiums.
The elimination of the prefunding is presented within Impact of Postal Service reform legislation in the
accompanying Statements of Operations as a one-time, non-cash benefit of $57.0 billion to net income.
The following table details retiree health benefits expenses for the years ended September 30 2021 and 2020
under the PAEA that were subsequently cancelled by the PSRA:
(in millions)
2021 2020
PSRHBF unfunded liability expense
1
$ 907 $ 810
Normal cost of retiree health benefits
2
4,203 3,850
Total retiree health benefits expense $ 5,110 $ 4,660
1
Expense for the annual payment due by September 30 of the respective year, on the unfunded liability as calculated by OPM.
2
Expense for the annual payment due to the PSRHBF by September 30 of the respective year, as calculated by OPM, for the actuarially
determined normal cost of retiree health benefits for current employees.
NOTE 13 - WORKERS' COMPENSATION
Our employees injured on the job are covered by FECA, and we reimburse DOL for workers' compensation
benefits paid to or on behalf of our employees, plus an administrative fee.
2022 Report on Form 10-K United States Postal Service 66
Workers' Compensation Liability
The workers' compensation liability calculation is highly sensitive to changes in discount rates. For example, a
1% increase in the discount rate would decrease the September 30, 2022, liability and related expense by $1.3
billion. Similarly, a 1% decrease in the discount rate would increase the September 30, 2022, liability and
related expense by $1.6 billion.
The following table details the applicable discount and inflation rates for compensation and medical claims used
to estimate the workers' compensation liability as of September 30, 2022, 2021, and 2020:
2022 2021 2020
Compensation claims liability:
Discount rate 3.94 % 1.79 %
1.09 %
Long-term wage inflation 2.70 % 2.60 % 2.60 %
Medical claims liability:
Discount rate 3.93 % 1.81 % 1.12 %
Historical medical inflation rate 3.10 % 3.10 % 3.50 %
Our total liability for workers' compensation was $14.7 billion and $18.2 billion as of September 30, 2022 and
2021, respectively. As of September 30, 2022 and 2021, the current portion of the liability was $1.3 billion and
$1.3 billion, respectively, and the noncurrent portion of the liability was $13.4 billion and $16.9 billion,
respectively, as reflected in the accompanying Balance Sheets.
Workers' Compensation (Benefit) Expense
The impacts of changes in discount and inflation rates, the actuarial valuation of new cases, revaluation of
existing cases, and the administrative fee are components of total workers' compensation (benefit) expense
recorded in the accompanying Statements of Operations.
The table below details the components of workers' compensation (benefit) expense for the years ended
September 30, 2022, 2021, and 2020:
(in millions)
2022 2021 2020
Impact of discount rate changes $ (3,927) $ (1,649) $ 1,909
Actuarial revaluation of existing cases 619 (229) (390)
Costs of new cases 1,099 1,208 1,302
Administrative fee 90 90 82
Total workers' compensation (benefit)
expense $ (2,119) $ (580) $ 2,903
2022 Report on Form 10-K United States Postal Service 67
NOTE 14 - LEASES
The table below reconciles the undiscounted cash flows for the first five years and the total remaining operating
lease liabilities recorded in the accompanying Balance Sheet as of September 30, 2022:
2022
(in millions)
Operating Leases
2023 $ 1,357
2024 1,188
2025 962
2026 741
2027 483
Thereafter 722
Total undiscounted lease payments $ 5,453
Present value adjustment (239)
Net lease liabilities $ 5,214
Lease costs for operating leases for all non-cancellable leases are set forth below for the years ended
September 30, 2022, 2021, and 2020:
(in millions)
2022 2021 2020
Operating lease cost 1,525 1,349 1,402
Variable lease cost 788 761 706
Short-term lease cost 166 250 148
Total lease cost $ 2,479 $ 2,360 $ 2,256
The following information represents supplemental cash and non-cash information for operating leases for the
years ended September 30, 2022, 2021, and 2020:
($ in millions)
2022 2021 2020
Operating Leases:
Operating cash flows from operating
leases $ 1,504 $ 1,359 $ 1,274
Right-of-use assets obtained in exchange
for operating lease liabilities $ 496 $ 487 $ 382
Weighted-average remaining lease term -
operating leases 5.34 years 5.36 years 5.40 years
Weighted-average discount rate -
operating leases 1.51 % 1.39 % 1.67 %
NOTE 15 - REVENUE FORGONE
While we are entitled to $1.2 billion for revenue forgone under the RFA, Congress must appropriate the annual
installment of $29 million within the annual federal budget for us to receive funding. During the years 2015 and
2016, Congress appropriated and paid $29 million for each of the respective annual installments. However, for
the years 2011 through 2014, and for the years 2017 through 2022, the installment amounts were either not
appropriated, or only a portion of the $29 million was appropriated. The total unfunded amount was $279 million
as of September 30, 2022. We continue to include the total past-due installments in each annual appropriations
request to Congress.
Although we have not consistently received the installment payments, the amounts are established by the RFA
and, in any year, Congress could appropriate the full amount, including past-due installments. We believe that
2022 Report on Form 10-K United States Postal Service 68
the amount remains fully collectible and no reserve is necessary for the uncollected amounts due to the full faith
and credit of the U.S. government.
Outstanding receivables associated with the installment payments, inclusive of the total unfunded amounts and
imputed interest, were $522 million and $504 million as of September 30, 2022 and 2021, respectively.
NOTE 16 - FAIR VALUE MEASUREMENT
The carrying amounts and fair value of these items are presented for disclosure purposes only in the following
table:
2022 2021
Carrying Carrying
(in millions)
Amount Fair Value Amount Fair Value
Revenue forgone installment receivable
1
$ 522 $ 454 $ 504 $ 540
Long-term debt
2
$ 10,000 $ 9,615 $ 10,000 $ 10,449
1
The carrying amount is included within Other assets (which includes items in addition to revenue forgone installment receivable) in the
accompanying Balance Sheets.
2
The fair value amount reflects the premium or discount associated with prepayment of all debt based on prevailing interest rates plus
any prepayment penalties, as applicable.
The revenue forgone installment receivable qualifies as a financial instrument. To calculate the fair value, we
recognize the imputed interest we are owed as interest income and estimate the value of this receivable using
the interest method, which converts future cash flows to a single discounted amount using interest rates for
similar assets, which are considered Level 2 inputs. We then calculate the net present value of anticipated
annual installment payments to be received, discounted by the 20-year U.S. Treasury Constant Maturity Rate.
The long-term debt also qualifies as a financial instrument. Because no active market exists for our debt with
the FFB, we estimate the disclosed fair value of the long-term debt using expected future payments at discount
rates provided by the FFB, considered Level 3 inputs.
Considerable judgment is involved in using this model to determine estimates of fair value and, accordingly,
they may not necessarily be indicative of amounts that would be realized upon disposition of a specific asset or
liability.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that information required to be
disclosed in quarterly and annual reports is recorded, processed, summarized, and reported within the time
frames specified by the PAEA and that this information is accumulated and communicated to management,
including the PMG and CFO as appropriate, to allow timely decisions regarding required disclosure.
Management, under the supervision and with the participation of the PMG and CFO, carried out an evaluation
of the effectiveness of the design and operation of disclosure controls and procedures as of September 30,
2022. Based upon and as of the date of the evaluation, we concluded that our disclosure controls and
procedures were effective.
2022 Report on Form 10-K United States Postal Service 69
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting during the quarter ended September 30,
2022, that have materially affected or are reasonably likely to materially affect our internal control over financial
reporting.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate controls over financial reporting. Internal
control over financial reporting is a process to provide reasonable assurance regarding the reliability of our
financial reporting for external purposes in accordance with GAAP. Internal control over financial reporting
includes maintaining records that, in reasonable detail, accurately and fairly reflect our transactions, providing
reasonable assurance that transactions are recorded as necessary for the preparation of our financial
statements, providing reasonable assurance that receipts and expenditures of assets are made in accordance
with management authorization, and providing reasonable assurance that unauthorized acquisition, use, or
disposition of assets that could have a material effect on our financial statements would be prevented or
detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not
intended to provide absolute assurance that a misstatement of our financial statements would be prevented or
detected.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based
on the framework in Internal Control Integrated Framework (2013), issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal
control over financial reporting was effective as of September 30, 2022.
Ernst & Young LLP, an independent registered public accounting firm, has audited our financial statements and
issued an attestation report on our internal control over financial reporting as of September 30, 2022, a copy of
which appears on the following page.
2022 Report on Form 10-K United States Postal Service 70
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Governors of the United States Postal Service
Opinion on Internal Control over Financial Reporting
We have audited the United States Postal Service’s internal control over financial reporting as of September 30,
2022, based on criteria established in Internal Control Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion,
the United States Postal Service (the Postal Service) maintained, in all material respects, effective internal
control over financial reporting as of September 30, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (the PCAOB) and in accordance with auditing standards generally accepted in the United States
of America, the balance sheets of the Postal Service as of September 30, 2022 and 2021, the related
statements of operations, changes in net deficiency, and cash flows for each of the three years in the period
ended September 30, 2022 and the related notes and our report dated November 10, 2022 expressed an
unqualified opinion thereon that included an emphasis-of-matter paragraph regarding the Postal Service’s ability
to generate sufficient cash flow to meet all of its financial obligations throughout the fiscal year ending
September 30, 2023.
Basis for Opinion
The Postal Service’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Postal Service’s internal control over financial reporting based on our audit. We are a
public accounting firm registered with the PCAOB and are required to be independent with respect to the Postal
Service in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.
2022 Report on Form 10-K United States Postal Service 71
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Tysons, Virginia
November 10, 2022
2022 Report on Form 10-K United States Postal Service 72
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. GOVERNORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
BOARD OF GOVERNORS
We are governed by an eleven-member Board, which consists of our PMG, our DPMG, and nine independent
Governors. The Governors are appointed by the President with the advice and consent of the Senate. Each of
our Governors is considered independent as defined in Part III., Item 13. Certain Relationships and Related
Transactions, and Governor Independence. Nine Governors currently sit on our Board:
Name, Age and Term of
Office Positions and Experience
Roman Martinez IV,
Chairman of the Board
Age 74
Governor since August 2019.
Term expiring December
2024.
Member of the Board of Trustees of New York-Presbyterian Hospital and Board
of Advisors of the International Rescue Committee for more than five years.
Former Member of the Board of Directors of Cigna Corporation and Orbital
ATK within the past five years. Former Vice Chairman of the Investment
Advisory Council of the State Board of Administration of Florida from 2006 to
2008 and former Managing Director at Lehman Brothers from 1978 to 2003.
Anton G. Hajjar,
Vice Chairman of the Board
Age 75
Governor since June 2021.
Term expiring December
2023.
Previously served as general counsel of the American Postal Workers Union,
AFL-CIO from 2013 to 2016. Member of the American Law Institute (ALI) since
2002 and has served on the ALI Council since 2010.
Robert M. Duncan,
Age 71
Governor since August 2018.
Term expiring December
2025.
Chairman of the Board of Trustees at Alice Lloyd College since 1978. Former
Chairman and CEO of Inez Deposit Bank from 1977 to 2021. Former Member
of the Board of Directors of the Tennessee Valley Authority from 2006 to 2012,
including a term serving as Chairman of the Board of Directors from 2009 to
2010.
Derek Kan,
Age 44
Governor since May 2022.
Term expiring December
2028.
Chief Business Officer of Deliverr Inc. since December 2020. Member of the
Board of Directors of Toll Brothers since December 2021. Deputy Director of
the Office of Management and Budget from July 2020 to December 2020.
Associate Director of the Office of Management and Budget from July 2019 to
July 2020. Under Secretary of Transportation for Policy from November 2017
to July 2019. Former Member of the Board of Directors of Amtrak from January
2016 to July 2019.
Amber F. McReynolds,
Age 43
Governor since June 2021.
Term expiring December
2026.
Founding CEO of the National Vote at Home Institute since 2018. Former
Director of Elections for the City and County of Denver, Colorado from 2011 to
2018. Serves on the National Election Task Force on Election Crises, the
National Council on Election Integrity, advisory board member for the
Massachusetts Institute of Technology Election and Data Science Lab, board
member for Represent Women, and board member for City Year Denver, with
each of these roles beginning in the last five years.
2022 Report on Form 10-K United States Postal Service 73
Name, Age and Term of
Office Positions and Experience
Donald L. Moak,
Age 65
Governor since June 2020.
Term expiring December
2022.
Co-founder and Chief Executive Officer of The Moak Group, a public affairs,
advocacy, and business consulting firm since 2015.
Ronald A. Stroman,
Age 70
Governor since June 2021.
Term expiring December
2028.
Served as 20th DPMG, Chief Government Relations Officer, and member of
the Board between April 2011 and June 2020.
Daniel Tangherlini,
Age 55
Governor since May 2022.
Term expiring December 8,
2027.
Managing Director of Emerson Collective since September 2020. Chief
Financial Officer of Emerson Collective from September 2017 to September
2020. President of Seamless Docs from April 2016 to August 2017. Chief
Operating Officer of Artemis Real Estate Partners from March 2015 to April
2016.
William D. Zollars,
Age 75
Governor since June 2020.
Term expiring December
2022.
Serves on the Board of Directors of Cerner Corporation since 2005, including
as Chairman of the Board of Directors since 2021. Serves on Board of
Directors of ProLogis Inc. since 2005, C2FO since 2014, Redstone Logistics
since 2012, and Main Street Data since 2019. Former Chairman, President,
and CEO of YRC Worldwide, Inc. from 1999 to 2011.
Committees
The Board has chartered four standing committees and one special committee to help fulfill its various
responsibilities. Each of these committees makes recommendations to the Board for its review and approval.
The Audit and Finance Committee, a standing committee, provides oversight of our financial statement
preparation, system of internal controls, cybersecurity, financial reporting process, compliance with applicable
laws and regulations, and audit process.
The Compensation and Governance Committee, a standing committee, is responsible for the initial review of
management proposals related to compensation and benefits for officers.
The Operations Committee, a standing committee, provides guidance to the Board on our plans to improve the
efficiency of retail, delivery, and processing operations, as well as on-time service performance.
The Strategy and Innovation Committee, a standing committee, provides guidance on our strategic direction,
regulatory requirements and filings, and on the identification of innovative practices and technologies to help us
better carry out our mission.
The Election Mail Committee, a special committee, uses its oversight role to reinforce our strong commitment to
our important role in the democratic process when election officials or voters determine to utilize us as a part of
their electoral system. The Committee regularly monitors execution of our work on Election Mail to ensure that
our part of the election process is implemented in the most effective way possible.
2022 Report on Form 10-K United States Postal Service 74
These committees are composed as follows:
K
ey for table:
Double checkmark : committee chair
Checkmark: Committee member
Black Up-pointing Triangle: Audit commitee financial expert
Name
Audit and
Finance
Compensation
and
Governance Operations
Strategy and
Innovation Election Mail
Roman Martinez IV5
PP P
Anton G. Hajjar
P P
Robert M. Duncan
P P P
Derek Kan
P
Amber F.
McReynolds
P PP
Donald L. Moak
P PP
Ronald A. Stroman
P P P
Daniel Tangherlini
P P
William D. Zollars
PP P
Louis DeJoy
PP
Douglas Tulino
P
PP
Committee Chair
Committee Member
P
5
Audit committee financial expert
EXECUTIVE OFFICERS
We had twelve executive officers as of September 30, 2022:
Name and Age Positions and Experience
Louis DeJoy
Age 65
75th PMG, CEO, and a member of the Board since June 2020; President of
LDJ Global Strategies, LLC since January 2016; Member of Board of Directors
for XPO Logistics, Inc. from December 2015 to May 2018; Chief Executive
Officer, XPO Logistics Supply Chain in the Americas from September 2014
until his retirement in December 2015; Chairman and CEO of New Breed
Logistics until September 2014.
Douglas Tulino
Age 64
21st DPMG, Chief Human Resources Officer, and member of the Board since
May 2021. 21st DPMG and member of the Board from November 2020 to May
2021. Vice President, Labor Relations from 2005 to November 2020.
Kelly Abney
Age 68
Chief Logistics Officer and Executive VP since June 2022; VP, Transportation
Strategy from June 2020 to October 2020; Senior VP of Operations, Logistics,
and Supply Chain Services at XPO Logistics from 2014 to September 2017.
Scott R. Bombaugh
Age 60
Chief Technology Officer and Executive VP since August 2020 (in an acting
capacity from March 2020 until August 2020); VP, Engineering Systems from
January 2019 to March 2020; Director, Technology Development and
Application from December 2011 to January 2019.
Joshua Colin
Age 56
Chief Retail and Delivery Officer and Executive VP since August 2021; VP,
Delivery Operations from August 2020 to August 2021; VP, Area Operations,
Eastern Area from November 2012 to July 2020.
Joseph Corbett
Age 62
CFO and Executive VP since 2009, except for the period from June 20, 2012
through September 30, 2012, when he served as Acting Chief Information
Officer and Executive VP.
2022 Report on Form 10-K United States Postal Service 75
Name and Age Positions and Experience
Isaac Cronkhite
Age 44
Chief Processing and Distribution Officer and Executive VP since June 2022;
Chief Logistics and Processing Operations Officer and Executive VP from
November 2020 to June 2022; Chief Human Resources Officer and Executive
VP from January 2019 to November 2020 (in an acting capacity until June
2019); VP, Enterprise Analytics from May 2016 to June 2019.
Luke Grossmann
Age 43
Senior VP, Finance and Strategy since August 2019; VP, Finance and Planning
from March 2016 to August 2019.
Thomas Marshall
Age 60
General Counsel and Executive VP since May 2013.
Pritha Mehra
Age 60
Chief Information Officer and Executive VP as of August 2020 (in an acting
capacity until November 2020); VP, Information Technology from July 2019 to
March 2020; VP, Business Mail Entry and Payment Technology from July 2008
to July 2019.
Steven Monteith
Age 61
Chief Customer and Marketing Officer and Executive VP as of August 2020 (in
an acting capacity until November 2020); VP, Marketing from October 2016 to
March 2020.
Jacqueline Krage Strako
Age 56
Chief Commerce and Business Solutions Officer and Executive VP since
August 2020; Chief Customer and Marketing Officer and Executive VP from
February 2018 to August 2020 (in an acting capacity until December 2018);
VP, Area Operations, Great Lakes Area Operations from February 2012 to
February 2018.
CODE OF ETHICS
All our employees are required to comply with the Standards of Ethical Conduct for Employees of the Executive
Branch ("Standards"). The Standards are published in the Code of Federal Regulations ("CFR") at 5 CFR Part
2635 and cover prohibitions and restrictions on the acceptance of gifts, conflicting financial interests, the
obligation of all employees to perform their duties impartially, restrictions on the misuse of government
positions, restrictions on certain outside activities and other related ethical obligations.
Our employees are also covered by a set of additional restrictions that apply only to the Postal Service's
employees. These "Supplemental Standards" can be found at 5 CFR Part 7001 and focus on limitations on
outside employment and outside business activities that could give rise to a conflict with their official duties.
The Standards and the Supplemental Standards contain many examples to help employees identify and resolve
ethical issues. New employees receive ethics training at their orientation and ethics officials provide training
throughout the year as required by law and as otherwise deemed appropriate. To ensure that all our employees
can receive timely and accurate ethics advice, we have established a dedicated ethics telephone helpline and
an email address that is managed by ethics specialists.
Certain high-level employees are also subject to the Senior Financial Managers' Code of Ethics. This Code of
Ethics can be found on our website at: https://about.usps.com/who-we-are/financials/senior-financial-managers-
code-of-ethics-09-29-2020.pdf
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
The Board establishes officer compensation and benefits, subject to the requirements and limitations of federal
law. The Board has delegated to its Compensation and Governance Committee authority for initial review of
management proposals related to compensation and benefits for the officers. The Compensation and
Governance Committee makes recommendations to the full Board for its review and approval.
Set forth in Title 39 of the U.S. Code, federal law provides that compensation and benefits for all of our officers
shall be comparable to the compensation and benefits paid for comparable levels of work in the private sector of
the economy. With 635,250 employees as of the end of 2022, we are the third largest civilian employer in the
2022 Report on Form 10-K United States Postal Service 76
nation. We operate 236,500 motor vehicles and 31,000 retail units. In 2022, we delivered 127.3 billion mail
pieces, 44% of the world's mail, and generated nearly $79 billion in revenue. In 2022, we ranked 151st in
Fortune magazine's listing of Fortune Global 500 companies. By way of comparison, two of our largest
competitors ranked 97th and 129th on this list. If we were listed on the Fortune 500 annual ranking of America's
largest corporations, we would be ranked 47th. The same two of our largest competitors are ranked 34th and
39th on that list.
Comparably sized companies typically provide their top executives with annual salaries well in excess of $1
million and total compensation and benefits valued at several million dollars. These compensation packages
typically consist of annual and long-term performance incentives, including a combination of cash payments and
stock options and a number of benefits and perquisites.
Although our governing law provides that officers should be compensated at a level comparable to the private
sector, the law does not afford the Board or the Compensation and Governance Committee the tools to achieve
this standard of compensation for our officers, which remains significantly below that of similarly ranked senior
executives in the private sector.
The law imposes three different compensation caps. The first cap provides that no officer or employee may be
paid compensation "at a rate in excess of the rate for Level I of the Executive Schedule under Section 5312 of
Title 5" of the U.S. Code 39 U.S.C. §1003(a). In calendar year 2022, the upper limit on federal salaries rose
2.2% to $226,300.
With the approval of the Board, we may develop a program to award a bonus or other reward in excess of the
compensation cap discussed above, as long as the total compensation paid to the officer in a year does not
"exceed the total annual compensation payable to the Vice President [of the United States] under [3 U.S.C.
§104] as of the end of the calendar year in which the bonus or award is paid." 39 U.S.C. §3686(a)-(b). In
calendar year 2022, this cap rose 2.2% to $261,400. The Board may approve a program allowing for bonuses
or other rewards if it determines, for the annual appraisal period involved, that the performance appraisal
system for impacted employees makes meaningful distinctions based on relative performance.
In addition, the Board may allow up to 12 of our officers or employees in critical senior executive or equivalent
positions to be paid total annual compensation up to "120 percent of the total annual compensation payable to
the Vice President [of the United States] under [3 U.S.C. §104] as of the end of the calendar year in which such
payment is received." 39 U.S.C. §3686(c). Based on the Vice President's salary for calendar year 2022, the
compensation cap for calendar year 2022 was $313,680.
By law, our employees, including officers, are entitled to participate in either CSRS or FERS, depending on
when their federal employment began. As applicable to our officers, these retirement systems are described
later in this Compensation Discussion and Analysis. In addition, to remain competitive with comparable
employment in private industry and other parts of the U.S. government, our policy also authorizes certain
additional benefits for our officers. Other than changes required by law, the Board must authorize increases to
benefits for officers.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Board recognizes that a significant disconnect exists between the comparability requirement and the
compensation caps in the law governing us and that the various compensation caps do not enable the Board to
provide compensation and benefits for our officers that are fully comparable to those in the private sector. This
is especially true given our current financial challenges. The Board also recognizes that many of the
compensation and benefit tools available in the private sector, such as equity ownership, are not available to us,
given our status as a U.S. government entity. These limitations hinder our ability to competitively recruit in the
marketplace for officers and to retain current officers.
In an attempt to achieve some level of comparability within the confines of the law, the Board designed a
compensation system intended to balance an officer's annual salary with the ability to earn additional
compensation by meeting performance goals and objectives; however, because of the compensation caps
discussed above, a portion of this compensation might need to be deferred.
2022 Report on Form 10-K United States Postal Service 77
At the start of calendar year 2022, the compensation system operated pursuant to its terms, and eligible officers
received an increase in their basic compensation or a performance lump-sum payment based upon their 2021
fiscal year performance. Uncertainty about future payments and the viability of the compensation system
continues to impact our ability to retain and recruit talented employees, including officers.
Within the confines of its legislative authority and our financial constraints, the Board's compensation philosophy
is that:
Individual officer compensation should be strongly connected to our performance on a number of
dimensions, including service, employee safety, net income, and productivity;
Compensation and benefits should be designed to attract and retain high-performing officers to ensure
that we have the caliber of officers who will enable us to operate at the highest levels of performance
and productivity;
Lump-sum incentives should be set to motivate officers to improve performance continuously on a long-
term basis and to perform above the annually established goals and objectives. If individual performance
exceeds the goals and objectives set for the year, the employee should receive additional compensation.
Likewise, if overall performance falls below the annual goals and objectives, the individual could be paid
less;
A significant amount of the officer's compensation should be "at-risk" and the "at-risk" amount should
increase as the officer's level of responsibility increases;
Innovation, effectiveness as an agent for change, the ability to balance day-to-day priorities and long-
term strategies, and organizational value as defined by the achievement of key corporate goals and
objectives should be rewarded;
Officer compensation should be fair and equitable internally, recognizing the width and breadth of the
responsibilities of our officers; and
Officer success is defined by several factors, including financial returns, the quality of service we
provide, the results achieved by the officer's actions to enhance the organization's efficiency and
overcome challenges and whether an officer met established individual goals.
THE COMPENSATION PROGRAM
In 2007, with the assistance of an independent consulting firm specializing in officer compensation, the
Compensation and Governance Committee recommended and the Board approved a salary band for the PMG
to be set at the legislative salary cap. In doing so, the Board's objectives were to design a compensation
program that optimized the legislative flexibility granted by the PAEA, improved external marketplace
competitiveness and honored legislative constraints and existing pay ranges. For the other officers, the Board
sets salary ranges based on salary relationships of comparable officers in the external market. In general, the
Board has maintained this method of setting officer pay ranges since 2007.
The Governors have authorized the PMG to establish salaries for the other officers within the confines of the
salary ranges established by the Governors. As noted above in Part II., Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations, after reviewing recommendations from the PMG, the
Governors approved the application of the PFP system according to its terms.
In 2022, we continued to employ a national performance assessment program ("Performance Assessment") to
set annual performance goals and metrics that vary among officers and are weighted to reflect appropriately the
degree to which an officer is able to influence our overall performance. The annual Performance Assessment
metrics and targets generally take into consideration our performance during the prior fiscal year and the
particular challenges that we anticipate having to face during the following year. The Performance Assessment
places emphasis on measurable financial, customer service, and employee performance indicators. The PMG
and DPMG performance goals are governed by our corporate goals.
The officer compensation system is intended to operate as follows: The Board establishes annual PFP
incentives to provide opportunities for the PMG and the DPMG to earn enhanced compensation, directly tied to
the level of their performance. The PMG establishes annual PFP incentives for other officers, to provide them
opportunities to earn increased compensation based upon their performance. Incentive payouts are not to be
2022 Report on Form 10-K United States Postal Service 78
made for a particular goal if the Postal Service or the individual fails to meet minimum acceptable performance
standards. The payment of PFP incentives may sometimes be deferred for future payment where required due
to the compensation caps discussed above.
We continued to use the Performance Assessment process to measure performance during 2022. Performance
Assessment performance goals and rewards fall into several categories that an officer may directly influence,
such as service, safety, efficiency, and productivity, as well as those that are more susceptible to general
economic conditions, such as revenue generation.
For each goal, the PMG establishes indicators identifying the type of performance that will enable us to achieve
or surpass the goal. These indicators are aligned to the Delivering for America Plan for each function and
measured at the lowest level possible to provide direct line of sight for individuals. The officers' goals are
aligned with national performance goals and linked to our overall success.
Once the goals and indicators are established, officers are advised as to what is expected of them in terms of
performance during the year, how their performance will impact us, and, in years when incentives are
authorized, the potential level of performance-based incentives they can expect depending on their individual
performance and our performance as a whole. Under this program, an individual officer can receive a numerical
rating within a range of one to ten depending on how we perform on the corporate indicators and the individual's
performance, as determined by the PMG and the applicable pay policies.
The system is designed to operate as follows: an individual officer's performance rating would make the officer
eligible for an increase to base salary, as well as for a performance-based lump-sum payment. Due to statutory
cap limitations, increases to the maximum of the salary range for officers would generally follow the percentage
increase in the applicable statutory cap for any given year. Any salary increases for officers are limited by these
maximums and are solely performance based, as determined by the PMG. Lump-sum incentive payments
would be tied to the PMG's rating of the officer's performance, based on the degree to which the individual
achieved previously set individual goals and metrics. Salary increases, if any, are generally determined after the
end of the fiscal year, and such increases become effective for the following calendar year.
COMPONENTS OF OFFICER COMPENSATION AND BENEFITS
On September 9, 2020, the Board reviewed and approved a consolidated Officer Pay Policy, which updated and
memorialized the PMG's authority to grant certain incentive payments to officers and also provided for
severance payments for officers under certain circumstances. Specifically, the policy provides severance in an
amount of one year’s salary to an officer if he or she is asked to separate from the Postal Service for any reason
other than cause and he or she is otherwise not eligible to retire and receive an immediate retirement annuity.
Severance may be paid in a single lump sum payment or multiple payments following the date of an officer’s
separation from the Postal Service. Officers that voluntarily separate from the Postal Service will not be entitled
to receive severance.
Base Salary
Base salaries provide a level of financial security that is appropriate for the officer's position. Within the confines
of law and our difficult financial condition, base salaries are to be scaled within pay ranges designed to be
competitive with the market median. As discussed above, maximum payouts in a given year are set by federal
law. Officer salaries are reviewed at least annually and adjusted, as appropriate and when permitted by financial
constraints, to reflect individual performance, range of responsibilities, value and contribution to the
organization, and experience.
Annual Incentive
Annual incentives serve as a mechanism for adjusting total compensation levels commensurate with the
attainment of planned results, thereby ensuring affordability and appropriate performance that benefits us. As
discussed above, we use the Performance Assessment to set annual performance goals and metrics at the
national and functional level. The Governors set the goals and indicators for the PMG and the DPMG, and the
PMG establishes goals and indicators for the other officers. The PMG's and the DPMG's performance is
determined based on the degree to which they have achieved previously set goals and metrics. Likewise,
2022 Report on Form 10-K United States Postal Service 79
officers' individual performance ratings are determined by the PMG based on the degree to which the individual
has achieved the previously set goals and metrics.
Other Compensation Incentives
Officers are also eligible for recognition awards for specific activities that reflect a high degree of leadership.
Officers are eligible for recruitment, relocation and retention incentives designed to attract and retain highly
talented and marketable individuals in key positions. Payments of some of these incentives may be deferred, in
whole or in part, due to the compensation limits imposed on our employees as more fully discussed above.
Retirement Annuities
Officers are covered either by CSRS or FERS, depending on when they began their federal employment. Both
systems have a defined benefit component and a defined contribution component. CSRS and FERS service is
creditable for Medicare coverage. FERS service is creditable for Social Security.
CSRS Defined Benefit
The CSRS Basic Benefit annuity is based on a percentage of the high-three salary multiplied by years of
service. The percentage is 1.5% for the first five years of service, plus 1.75% from five years to ten years of
service and 2% for all years of service thereafter. Optional retirement thresholds are age 55 with 30 years of
service, age 60 with 20 years of service, and age 62 with five years of service, with a requirement of completing
at least five years of creditable civilian service. The annuity is fully indexed to the CPI. Disability, early
retirement, deferred and survivor benefits are available.
FERS Defined Benefit
The FERS Basic Benefit annuity is based on 1.0% of high-three salary per year of service, or 1.1% for
retirement at age 62 with at least 20 years of service. Optional retirement thresholds are the MRA of 55 to 57
(depending on birth year) with 30 years of service, age 60 with 20 years of service, age 62 with five years of
service, or MRA with ten years of service (at a reduced benefit), with a requirement of completing at least five
years of creditable civilian service. Employees who retire at MRA with 30 years of service, or at age 60 with 20
years of service, receive a retirement supplement approximating the value of Social Security benefits
attributable to federal service; this benefit is paid until age 62. Beginning at age 62, the annuity is indexed to
CPI, fully when the CPI increase is 2% or less, at 2% when the CPI increase is between 2% and 3%, and at CPI
minus 1% when the CPI is at least 3%. Disability, early retirement, and deferred and survivor benefits are
available.
Defined Contribution
The TSP has a component that mirrors traditional 401(k) plans and an option similar to "Roth" plans. CSRS and
FERS employees may contribute up to the indexed IRS maximum ($20,500 in calendar year 2022). We do not
make or match the TSP contributions for CSRS employees. For FERS employees, we make an automatic
contribution of 1% of basic pay and match a percentage of employee contributions for up to an additional 4% of
basic pay, for a total employer contribution of up to 5% of basic pay. Employees who will be at least age 50 in
the year of contribution may make a separate catch-up contribution up to the indexed IRS maximum ($6,500 in
calendar year 2022). The TSP investment options are a government securities fund; index funds that track the
Barclays Capital Aggregate Bond Index, the S&P 500, the Dow Jones U.S. Completion TSM Index, and the
Morgan Stanley Capital International EAFE (Europe, Australasia and Far East) stock index; and lifecycle funds.
Supplemental Nonqualified Deferred Compensation
Where appropriate and on a highly selective basis, we have offered supplemental nonqualified deferred
compensation as a recruitment or retention tool.
Life Insurance
Officers are entitled to Basic group life insurance coverage under the FEGLI program in the amount of their
annual basic salary, rounded up to the next $1,000, plus $2,000. If Basic coverage is held, an officer will also
receive an additional $10,000 coverage (Option A) and Option B coverage up to three times their salary. We
pay all premiums for Option A, Option B and Basic coverage.
At their own expense, officers may elect additional Option B coverage in an amount equal to two times their
2022 Report on Form 10-K United States Postal Service 80
salary, or Option C, family optional insurance coverage, of up to five multiples of $5,000 for their spouse and
$2,500 for each eligible dependent child under age 22. Officers continuously covered under FEGLI for the five
years of service immediately preceding retirement, or since the first opportunity to enroll, may continue
coverage during retirement (if entitled to an immediate annuity). We pay retired officers an actuarially
determined lump sum to cover the cost of Option A premiums during retirement.
Health Benefits
We participate in FEHB, which allows all career employees to enroll in one of a number of Self-Only, Self-Plus-
One or Self and Family health benefit plans offered. We pay a portion of the cost of the premium for our officers
and executives. In the current year, our share of the premium remained at 72% of the federal weighted average
premium, limited to not more than 75% of the total premium for any given plan, and enrolled officers and
executives paid the balance of the premium for the plan they selected. Employees who retire with immediate
entitlement to an annuity are eligible to continue FEHB coverage into retirement, as long as they have
participated in FEHB for the five years preceding their retirement or since their first opportunity to enroll.
Other Benefits
To remain competitive in the marketplace, we offer the following additional benefits to our executive officers:
Wellness reimbursement incentive, parking, financial planning, retirement counseling services, TSA Pre-Check
reimbursement, and membership in up to two airline clubs per year. In certain circumstances executives are
entitled to relocation benefits at the time of their retirement. On September 9, 2020, the Governors clarified and
updated their policies to provide that the PMG, the DPMG, and officers are entitled to a separation payment in
an amount of one year's salary if either is asked to separate from the Postal Service for any reason other than
for cause and they are otherwise ineligible for immediate retirement (not including early retirement, discontinued
service retirement, or retirement at the minimum retirement age with less than 30 years of service). Severance
may be paid in a single lump-sum payment or multiple payments following the date of separation. In addition,
eligible officers may receive outplacement services and post-employment financial counseling.
COMPENSATION AND GOVERNANCE COMMITTEE REPORT
The Compensation and Governance Committee has reviewed and discussed the Compensation Discussion
and Analysis with management, and based on such review and discussions, the Compensation and
Governance Committee recommended to the Governors that this Compensation Discussion and Analysis be
included in this report.
The Compensation and Governance Committee
Donald L. Moak, Chair
Robert M. Duncan
Anton G. Hajjar
Derek Kan
2022 Report on Form 10-K United States Postal Service 81
SUMMARY COMPENSATION TABLE
The following represents the compensation of our PMG and CEO, CFO, and our next three most highly
compensated executive officers ("named executive officers"):
Name and
principal position
Fiscal
year Salary Bonus
Non-
equity
incentive
plan
compen-
sation
4
Change in
pension
value and
non-
qualified
deferred
compen-
sation
5
All other
compen-
sation
6
Total
Louis DeJoy, PMG and CEO
1
2022
$
311,382
$
$
76,625
$
48,149
$
54,236
$
490,392
2021
305,681
75,865
43,202
56,237
480,985
2020
87,537
11,827
18,100
117,464
Joseph
Corbett,
CFO
and
Executive
VP
2022
276,785
11,683
45,896
59,802
33,954
428,120
2021
271,673
11,452
51,182
86,794
29,068
450,169
2020
266,895
1,757
35,000
88,774
27,479
419,905
Jacqueline
Krage
Strako,
Chief
Commerce
and
Business
Solutions
2022
287,104 11,683 11,300 239,432 25,380 574,899
Officer
and
Executive VP
2021
281,362
21,452
16,782
273,002
23,849
616,447
2020
267,279
1,757
263,339
21,728
554,103
Douglas
A.
Tulino,
DPMG
and
Chief
2
Human Resources Officer
2022
296,058 1,683 71,000 431,500 16,521 816,762
2021
268,350 11,452
13,146 288,241 14,503 595,692
2020
Joshua
D.
Colin,
Chief
Retail
and
Delivery
Officer
and
Executive VP
3
2022
2021
287,104
11,683
11,300
314,562
24,598
649,247
2020
1
Mr. De
Joy wa
s
selected as the Postal Service's 75th PMG and CEO by the Board effective June 15, 2020.
2
Mr. Tulino was appointed to his executive officer position on November 21, 2020. As such, information for 2020 is not reported.
3
Mr. Colin was appointed to his executive officer position on July 17, 2021. As such, information for 2021 and 2020 is not reported.
4
Amounts reflect the performance-based incentive compensation awarded to executive officers for performance in prior fiscal years.
The amount shown for Mr. Corbett also reflects the lump sum performance retention payment required by his employment agreement.
Any amounts that could not be paid to an executive officer, due to the compensation cap or their contract, were deferred for future
payment and are also reflected in the nonqualified deferred compensation table below.
5
Mr. Tulino participates in CSRS. Mr. DeJoy, Mr. Corbett, Ms. Strako, and Dr. Colin participate in FERS. The calculation of retirement
annuities under FERS is explained in the Pension Benefits table, the associated note and in the Retirement Annuities section of
Compensation Discussion and Analysis. The amounts shown for each of these individuals represent the change in annuity value from
the prior year. "Nonqualified deferred compensation earnings" is defined as above-market earnings on deferred income. There were
no reportable amounts of nonqualified deferred compensation earnings for the named executive officers in 2022, 2021 or 2020, with
the exception of Mr. Corbett, whose above-market earnings on deferred income were $3,992 in 2022, $3,551 in 2021, and $3,324 in
2020.
6
Other compensation may include security detail services, TSP contributions, life insurance premiums, financial planning consultation
fees, parking fees, airline club and similar travel fees, wellness benefits, and associated tax gross-ups, as applicable.
2022 Report on Form 10-K United States Postal Service 82
GRANTS OF PLAN-BASED AWARDS
The following table presents information regarding potential non-equity incentive awards to the named executive
officers for 2022. Whether a named executive officer receives an award and, if so, the amount of an award for
2022 will depend on both the Postal Service's and the individual's performance.
Estimated future payouts under non-equity incentive plan awards
Name Threshold Target Maximum
Louis DeJoy $ 9,395 $ 31,318 $ 78,295
Joseph Corbett 8,352 27,840 69,600
Jacqueline Krage Strako 8,664 28,880 72,200
Douglas A. Tulino 9,015 30,050 75,125
Joshua D. Colin 8,664 28,880 72,200
Note: The PFP program relies on a 10-point scale with clearly defined and transparent corporate goals. The FY22 PFP target is set at a
rating of 5. The maximum threshold for payment is set at a rating of 10. Individual ratings vary but the corporate score is used as the
regulator. Any individual award is unlikely to exceed the target amount.
PENSION BENEFITS
The following table shows the present value of accumulated pension benefits payable to the named executive
officers as of September 30, 2022:
Name Plan name
Number of years
credited service
Present value of
accumulated
benefit
Louis DeJoy
Joseph Corbett
Jacqueline Krage Strako
Douglas A. Tulino
Joshua D. Colin
FERS Annuity
FERS Annuity
FERS Annuity
CSRS Annuity
FERS Annuity
2
13
33
42
36
$ 103,180
705,027
2,062,417
3,960,864
1,997,870
Note: The Plan name is described in the Retirement Annuities section within Compensation Discussion and Analysis. The present value of
the accumulated FERS and/or CSRS benefit represents the value of the pension over the individual's actuarial lifetime, as of September 30,
2022. Mr. Tulino participates in CSRS. Mr. DeJoy, Mr. Corbett, Ms. Strako, and Mr. Colin participate in FERS. The valuation for all named
executive officers assumes that they have satisfied vesting requirements for retirement; however, because of their current tenure with the
Postal Service or their age, their retirement annuities have not fully vested.
NONQUALIFIED DEFERRED COMPENSATION
The following table presents contributions to, and earnings on, the named executive officers' deferred
compensation for 2022:
Name
Executive
contributions in
2022
1
Aggregate
earnings in 2022
2
Aggregate
withdrawals /
distributions in
2022
Aggregate balance
at September 30,
2022
Louis DeJoy $ 78,295 $ 146 $ $ 230,967
Joseph Corbett 35,000 27,164 607,591
Douglas A. Tulino 75,125 60 146,185
1
This column represents amounts deferred due to the compensation cap or contract agreements. The amount shown for Mr. Corbett
reflects the lump-sum performance retention payment required by his employment agreement which has been deferred.
2
We calculate interest on deferred compensation semi-annually at 5.0% per year for Mr. Corbett per his contract. Others are calculated
using the previous calendar year monthly average of the TSP G-Fund rate and applied once annually, on December 31st.
2022 Report on Form 10-K United States Postal Service 83
POTENTIAL PAYMENTS UPON TERMINATION
The PMG and all the other named executives are subject to the standard policies governing CSRS or FERS, as
described in the Compensation Discussion and Analysis. The present value of these CSRS and FERS benefits
are found in the Pension Benefits table in the Officer Compensation section of this report. The information below
describes and quantifies certain compensation, in addition to that due pursuant to CSRS or FERS, that would
become payable under existing plans and arrangements if the named officer's employment had terminated on
September 30, 2022. Additionally, pursuant to statutes and regulations generally applicable to federal
employees, the named executive officers would be entitled to receive the federal employer's standard
contribution toward retiree health benefits, in the event they have qualifying service and participated in FEHB for
the requisite period of time prior to retiring.
DEFERRED COMPENSATION
All federal employees, including our employees, are subject to annual compensation limits established pursuant
to federal statutes and regulations. When amounts earned by federal employees cannot be paid because of
these compensation limits, these payments are deferred until a year in which their payment would not cause
total annual compensation paid to exceed the compensation limit, or the year in which an employee leaves
federal service, whichever occurs first. Named executive officers appearing in the nonqualified deferred
compensation table in the Officer Compensation above have deferred compensation in the amounts indicated
therein. These amounts would have been paid to them in a lump sum or pursuant to their contract with us
following their departure, had they ended their employment with us on September 30, 2022.
Mr. Corbett's employment agreement provides for deferred incentives linked in part to his performance. Mr.
Corbett began accruing deferred performance-based compensation at the end of 2010. When Mr. Corbett
concludes his employment with us, his deferred compensation will be paid to him in three equal annual
installments.
SUPPLEMENTAL PENSION BENEFIT
The Governors have not authorized a supplemental pension benefit for any officer at this time.
SEVERANCE PAYMENT
Mr. Corbett is entitled to a severance payment of $230,000, in the event that we terminate his employment for
any reason other than for cause or breach of contract.
INSURANCE BENEFIT
The Governors have not authorized supplemental insurance benefits for any officer at this time. The insurance
benefits to which all of our officers are entitled are described above.
OUTPLACEMENT ASSISTANCE
The Governors have authorized professional outplacement services to all officers at a cost not to exceed
$40,000.
2022 Report on Form 10-K United States Postal Service 84
ACCRUED ANNUAL LEAVE
All of our employees are entitled to receive and accrue paid days off, known as annual leave. Upon their
separation from the Postal Service, all employees, including the named executive officers, are entitled to be
paid, in a lump sum, the value of all accrued annual leave. The table below shows the accrued value of the
annual leave of the named executive officers as of September 30, 2022:
Name
Value of accrued
annual leave
Louis DeJoy $ 68,659
Joseph Corbett 167,040
Jacqueline Krage Strako 309,905
Douglas A. Tulino 622,960
Joshua D. Colin 257,143
CEO PAY RATIO
In accordance with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are
providing the ratio of the annual total compensation of Louis DeJoy, our PMG and CEO, to the annual total
compensation of our median employee. This ratio is based on our employee and payroll records and the
methodology described below.
2022 PAY RATIO
The following ratio of our PMG's annual total compensation to the median employee's for 2022 is a reasonable
estimate calculated in a manner consistent with applicable SEC rules.
The annual total compensation of our PMG during the year, as reported in the Summary Compensation
Table above, was $490,392.
The annual total compensation of our median employee was $98,260.
Based on this information, we estimate that the ratio of our PMG's annual total compensation to that of
our median employee is 5:1.
Total compensation for this purpose includes base pay plus other forms of cash compensation, such as
overtime and bonuses, plus any change in pension value, as discussed in the Calculate 2022 Median Employee
Compensation section below.
CALCULATING METHODOLOGY
SEC rules for identifying the median compensated employee and calculating the pay ratio based on that
employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain
exclusions and to make reasonable estimates and assumptions that reflect their employee populations and
compensation practices. Other comparably sized organizations have different employee populations and
compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in
calculating their own pay ratios. Given the uniqueness of our compensation practices, most notably the caps on
compensation for our executives described in Compensation Discussion and Analysis, the pay ratio we have
reported above may significantly differ from ratios reported by comparably sized organizations.
Identify Median Employee
As allowed by SEC rules, we have chosen to use the same median compensated employee for 2022 that we
identified for our 2020 ratio. We identified this employee at September 30, 2021 based on annual "taxable
wages" (W-2 Box 5 or equivalent) from payroll data for tax year 2020. For the purposes of this determination,
taxable wages include all cash compensation, including base pay, overtime pay, cash bonuses and any other
taxable cash awards, before deducting retirement plan contributions or other benefits that are generally
excluded from federal income tax.
2022 Report on Form 10-K United States Postal Service 85
We took the following steps to determine our median employee:
1. We used a database of career and pre-career (both full-time and part-time) employees who received
wages through our payroll system during tax year 2020.
2. We excluded employees who were not receiving wages as of September 30, 2021, the end of our 2021
fiscal year, either because their employment ended before or began after that date.
The resulting number of employees for tax year 2020 was 577,304 (not including our PMG), and we determined
from this population which employee represented the median. The number of employees in this population
varied somewhat from the total number of employees elsewhere within this report, as it represents a different
time period, and we have historically used employee complement figures, not payroll records, to report
employee composition.
Calculate 2022 Median Employee Compensation
We took the following steps to determine our median employee's annual total compensation for 2022:
1. We obtained our median employee's gross compensation from payroll records for each pay period
during 2022, and summed those amounts to determine total gross compensation for the year. Gross
compensation includes base pay plus other forms of cash compensation, including overtime and
bonuses, which may vary from year to year.
2. We then calculated our median employee's annual total compensation by taking the sum of annual
taxable wages and the change in pension value.
To calculate change in pension value for our median employee, we used Postal-Service specific demographic
and salary growth assumptions. Given the differences in the nature of work performed, we calculated the
change in pension value for our PMG using government-wide demographic and salary growth assumptions.
Other than this difference, we calculated annual total compensation of our median employee using the same
methodology that we used to calculate annual total compensation of our most highly compensated executive
officers, including our PMG, as disclosed in the Summary Compensation Table.
2022 Report on Form 10-K United States Postal Service 86
GOVERNORS COMPENSATION
The following table presents information regarding the compensation of the Governors during 2022:
Name
1
Fees earned or
paid in cash
2
All other
compensation
3
Total
Roman Martinez IV
4
$ 37,200 $ 969 $ 38,169
Anton G. Hajjar
5
36,600 813 37,413
John McLeod Barger
4
23,633 1,129 24,762
Ron A. Bloom
4
7,167 1,341 8,508
Robert M. Duncan
6
38,100 1,088 39,188
Derek Kan
7
12,583 12,583
Amber F. McReynolds
5
38,400 801 39,201
Donald L. Moak
8
36,600 969 37,569
Ronald A. Stroman
5
37,200 816 38,016
Daniel Tangherlini
7
13,350 13,350
William D. Zollars
6
36,300 1,088 37,388
1
Each Governor may serve a holdover term for up to one additional year until a successor is confirmed and appointed.
2
Each Governor receives a basic stipend of $30,000 per year plus $300 per day for not more than 42 days of meetings each year.
3
Other compensation includes a commemorative stamp book and associated tax gross-ups.
4
Governors Barger, Bloom, and Martinez were appointed in August 2019. Governor Barger's original term expired on December 8, 2021,
and he served a holdover term until May 2022, when a successor was confirmed and appointed. Governor Bloom's original term expired
on December 8, 2020, and he served a one-year holdover term that expired on December 31, 2021. Governor Martinez's term expires
on December 8, 2024.
5
Governors Hajjar, McReynolds, and Stroman were appointed in June 2021. Governor Hajjar's term expires on December 8, 2023,
Governor McReynolds' term expires on December 8, 2026, and Governor Stroman's initial term expired on December 8, 2021. Governor
Stroman was also appointed to a second term that expires on December 8, 2028.
6
Governor Duncan was originally appointed in August 2018. Governor Duncan's initial term expired on December 8, 2018, and he
continued to serve in a holdover year. In December 2019, Governor Duncan was reappointed for a second term which expires on
December 8, 2025.
7
Governors Kan and Tangherlini were appointed in May 2022. Governor Kan's term expires on December 8, 2028. Governor Tangherlini's
term expires on December 8, 2027.
8
Governors Moak and Zollars were appointed in June 2020. Both Governor Moak's and Zollars' terms expire on December 8, 2022.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Not applicable. As an "independent establishment of the executive branch of the Government of the United
States" (39 U.S.C. §201), we do not issue equity securities.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND GOVERNOR
INDEPENDENCE
CERTAIN TRANSACTIONS
We enter into significant transactions with other government agencies. Although such agencies do not fall within
the definition of related parties for purposes of Item 404(a) of Regulation S-K, they are considered related
parties in accordance with GAAP. See Part II., Item 8. Financial Statements and Supplementary Data, Notes to
Financial Statements, Note 5 - Related Parties.
2022 Report on Form 10-K United States Postal Service 87
GOVERNOR INDEPENDENCE
Our Governors are appointed by the President with the advice and consent of the Senate. The composition of
our Board is governed by 39 U.S.C. § 202 and 39 U.S.C. § 205. Provisions codified in 39 U.S.C. § 205 are
similar to considerations for independence under section 10(a) of the Exchange Act. These provisions stipulate
that “no officer or employee of the United States may concurrently serve as a Governor” or “hold any other
office or employment . . . in conflict with his duties, responsibilities, and powers as an officer of the Government
of the United States in the Postal Service.”
In addition, our Governors are subject to the requirements set forth in the Ethics in Government Act of 1978 and
the Standards of Ethical Conduct for Employees of the Executive Branch. These provisions prohibit the
Governors from participating in postal matters if such matters could have an impact on their personal financial
interests. To this end, upon appointment, and yearly thereafter, the Governors are required to file financial
disclosure reports listing their assets and interests, which enable the Postal Service's ethics officials to assess
potential conflicts. Based upon their satisfaction of the foregoing requirements, we have determined that the
Governors are independent.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Annually, the Audit and Finance Committee reviews and pre-approves the audit services to be provided by our
independent auditors. The Audit and Finance Committee must approve other specific services before the
independent auditors may perform such services. The Audit and Finance Committee also has delegated to the
Audit and Finance Committee Chairman pre-approval authority with respect to permitted services, provided that
any pre-approval decisions must be reported to the Audit and Finance Committee at its next scheduled meeting.
Audit fees totaled $7.9 million and $7.3 million for the years ended September 30, 2022 and 2021, respectively.
Audit fees include fees for professional services associated with the annual financial statement audit, the
reviews of our quarterly reports on Form 10-Q, and testing of our internal control over financial reporting. We did
not incur any other fees from our independent auditors.
2022 Report on Form 10-K United States Postal Service 88
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report:
1. Financial Statements
The following consolidated financial statements of the United States Postal Service for each of the
years ended and as of the periods noted are submitted in Part II., Item 8. Financial Statements and
Supplementary Data of this report.
Description Page
Statements of Operations for the Years Ended September 30, 2022, 2021, and 2020 45
Balance Sheets as of September 30, 2022 and 2021 46
Statements of Changes in Net Deficiency for the Years Ended September 30, 2022,
2021, and 2020
47
Statements of Cash Flows for the Years Ended September 30, 2022, 2021, and 2020 48
Notes to Financial Statements 49
2. Financial Statement Schedules
None.
3. Exhibits
Exhibit
Number Exhibit Description
10.1
Employment/Compensation Contract with Joseph Corbett, Chief Financial Officer (filed
with the PRC on January 29, 2009, as Exhibit No. 10.1 to the Current Report on Form 8-
K).
10.2
Next Generation Delivery Vehicle contract dated February 23, 2021 between Oshkosh
Defense LLC and United States Postal Service (filed with the PRC on May 6, 2021, as
Exhibit No. 10.1 to the Quarterly Report on Form 10-Q).
31.1
Certificate of United States Postal Service's Principal Executive Officer Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certificate of United States Postal Service's Principal Financial Officer Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certificate of United States Postal Service's Principal Executive Officer Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certificate of United States Postal Service's Principal Financial Officer Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
ITEM 16. FORM 10-K SUMMARY
None.
2022 Report on Form 10-K United States Postal Service 89
SIGNATURES
Pursuant to the requirements of the Postal Accountability and Enhancement Act of 2006, the United States
Postal Service has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
United States Postal Service
/s/ Louis DeJoy
Louis DeJoy
PMG and CEO
Date: November 10, 2022
/s/ Joseph Corbett
Joseph Corbett
CFO and Executive VP
Date: November 10, 2022
2022 Report on Form 10-K United States Postal Service 90
Pursuant to the requirements of the Postal Accountability and Enhancement Act of 2006, this Report has been
signed below by the following persons on behalf of the United States Postal Service and in the capacities
indicated as of November 10, 2022.
Signature Title
/s/ Roman Martinez IV
Roman Martinez IV Chairman, Board of Governors
/s/ Anton G. Hajjar
Anton G. Hajjar Vice Chairman, Board of Governors
/s/ Robert M. Duncan
Robert M. Duncan Governor
/s/ Derek Kan
Derek Kan Governor
/s/ Amber F. McReynolds
Amber F. McReynolds Governor
/s/ Donald L. Moak
Donald L. Moak Governor
/s/ Ronald A. Stroman
Ronald A. Stroman Governor
/s/ Daniel Tangherlini
Daniel Tangherlini Governor
/s/ William D. Zollars
William D. Zollars Governor
/s/ Louis DeJoy
Louis DeJoy
Board Member, PMG and CEO
/s/ Douglas Tulino
Douglas Tulino
Board Member, DPMG and Chief Human
Resources Officer
/s/ Joseph Corbett
Joseph Corbett
CFO and Executive VP (Principal Financial Officer)
/s/ Cara M. Greene
Cara M. Greene
VP, Controller (Principal Accounting Officer)
2022 Report on Form 10-K United States Postal Service 91
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
OF 2002
I, Louis DeJoy, certify that:
1. I have reviewed this Annual Report on Form 10-K of the United States Postal Service ("Postal Service");
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
Postal Service as of, and for, the periods presented in this report;
4. The Postal Service's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Postal Service
and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the Postal Service,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the Postal Service's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the Postal Service's internal control over financial reporting that
occurred during the Postal Service's most recent fiscal quarter (the Postal Service's fourth fiscal quarter
in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect,
the Postal Service's internal control over financial reporting; and
5. The Postal Service's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the Postal Service's independent registered accounting firm and
the Audit and Finance Committee of the Postal Service's Board of Governors:
a. All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Postal Service's ability to record,
process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the Postal Service's internal control over financial reporting.
/s/ Louis DeJoy Date: November 10, 2022
Louis DeJoy
PMG and CEO
2022 Report on Form 10-K United States Postal Service 92
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
OF 2002
I, Joseph Corbett, certify that:
1. I have reviewed this Annual Report on Form 10-K of the United States Postal Service ("Postal Service");
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
Postal Service as of, and for, the periods presented in this report;
4. The Postal Service's other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Postal Service
and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the Postal Service,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the Postal Service's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the Postal Service's internal control over financial reporting that
occurred during the Postal Service's most recent fiscal quarter (the Postal Service's fourth fiscal quarter
in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect,
the Postal Service's internal control over financial reporting; and
5. The Postal Service's other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the Postal Service's independent registered accounting firm and
the Audit and Finance Committee of the Postal Service's Board of Governors:
a. All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the Postal Service's ability to record,
process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the Postal Service's internal control over financial reporting.
/s/ Joseph Corbett Date: November 10, 2022
Joseph Corbett
CFO and Executive VP
2022 Report on Form 10-K United States Postal Service 93
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of the United States Postal Service ("Postal Service") on Form 10-K for
the period ended September 30, 2022, (the "Report"), I, Louis DeJoy, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Postal Service.
/s/ Louis DeJoy Date: November 10, 2022
Louis DeJoy
PMG and CEO
2022 Report on Form 10-K United States Postal Service 94
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of the United States Postal Service ("Postal Service") on Form 10-K for
the period ended September 30, 2022, (the "Report"), I, Joseph Corbett, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Postal Service.
/s/ Joseph Corbett Date: November 10, 2022
Joseph Corbett
CFO and Executive VP
2022 Report on Form 10-K United States Postal Service 95