FOR IMMEDIATE RELEASE	
Contact: Media Relations	202-268-2155
December 9, 2003
	Release No. 096
	www.usps.com

POSTAL SERVICE EXCEEDS FISCAL PLAN
STAMP PRICES TO REMAIN UNCHANGED

WASHINGTON -- The Postal Service announced today it exceeded its financial 
plan for Fiscal Year 2003 by $300 million, despite declining mail volume 
and growing deliveries reflecting operational efficiencies employed during 
the year.  The Postal Service finished the year with a total net income of 
$3.9 billion when the recently enacted change to retirement funding is 
incorporated.*

Speaking at the monthly Board of Governors meeting, Chief Financial 
Officer Richard Strasser said that $3.8 billion of the net income was used 
to pay down Postal Service debt.  "These financial results are important 
to the American consumer and American business," said Strasser, "for they 
reinforce our confidence that we can hold current stamp prices unchanged 
until 2006."

Based on the audited financial results, the Postal Service had an 
unprecedented fourth straight year of productivity gains. Productivity was 
twice that anticipated by the financial plan.

"Recognizing early in the fiscal year the delayed economic recovery and 
its negative impact on mail volume, our managers adjusted resources, 
cutting another $2 billion in costs," said Strasser.

He credited the year's success to Postmaster General John E. Potter's 
continued focus on implementing the Transformation Plan, the Postal 
Service's blueprint for the future. Without fanfare, Potter and his team 
have focused on the core business and encouraging managers to explore ways 
to reduce costs without impacting service.

Independent surveys show unprecedented high levels of performance in 
on-time delivery and customer satisfaction.  Workplace environment 
factors, evaluated by postal employees, have also improved significantly.

Total mail volume in 2003 dropped by less than one percent (600 million 
pieces). It was the second straight year that mail volume fell. Most of 
the loss in volume came from First-Class Mail, which underpins the Postal 
Service's universal service network. With the economy rebounding in 2003, 
advertising mail and packages grew to nearly offset the 3.3 billion piece 
loss in First-Class Mail but mail volume continues to be below the FY 2000 
levels.

"This year's increase in advertising mail and packages did not provide us 
with as much revenue as the same amount of First-Class Mail would have," 
said Strasser, noting a $1.7 billion revenue shortfall. Further, he said, 
the changing mail mix -- along with an increase of another 1.8 million new 
addresses nationwide -- challenged operations management and put pressure 
on costs.

Strasser cautioned that the Postal Service will continue to face the same 
long term structural challenges that currently exist and that led to 
formation of the President's Commission on the United States Postal 
Service last year: 

"In the near term," said Strasser, "postal finances look excellent. 
However, continued declines in First-Class Mail volume, continued growth 
in delivery addresses, the 30-year-old postal rate setting process, and 
continuing marketplace changes threaten the ability to finance universal 
service as we define it today."

In other activity, Chief Operating Officer Pat Donahoe outlined 
initiatives to handle 20 billion pieces of mail between Thanksgiving and 
Christmas.  Donahoe said Monday, December 15, will be the busiest mailing 
day of the year with more than 850 million pieces of mail entering the 
mail stream versus 670 on any given day throughout the year.  

To handle the blizzard of mail, many Post Offices will be open late and on 
Sundays; air cargo lift will increase by 40 percent; direct routes between 
major metro cities will be added to the Postal Service's ground 
transportation network; and, thanks to advancements in mail sorting 
technology, the need to bring in temporary help for the holidays will be 
reduced to about 10,000 this year as compared to 20,000 last year.  
Today's high speed sorters process more than 80 percent of handwritten 
addressed mail as compared to two percent in 1997.

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* The Postal Civil Service Retirement System Funding Reform Act of 2003, 
signed into law on April 23, 2003, altered the way the Postal Service 
funds the Civil Service Retirement System and accounted for $3 billion, 
after refinancing costs, of the FY 2003 net income.