The PRC reviewed the new pricing for both Mailing Services and Shipping Services and verified, with a small exception which was resolved, that our prices were consistent with P.L. 109-435.
In March 2008, we introduced the Priority Mail Large Flat-Rate Box, with pricing that included a military discount for the first time. The discount is intended to enhance goodwill and reflect the unique economics of military care packages. We transferred Premium Forwarding Service to the Shipping Services grouping to facilitate future product and service enhancements. Repositionable Notes became a permanent offering.
Information about the PRC and their activities can be found on the PRC website at www.prc.gov.
Intellectual Property
We own intellectual property that includes trademarks, service marks, patents, copyrights, trade secrets, and other proprietary information. We routinely generate intellectual property in the course of developing and improving our systems, services, and operations.
Seasonal Operations
Our operations are seasonal. Mail volume and revenue tend to be greatest in our first fiscal quarter, which includes the fall holiday mailing season, and lowest during the summer, our fourth quarter.
Customers
We have a very diverse customer base and are not dependent upon a single customer or small group of customers. No single customer represents more than 3% of our operating revenue. The financial services sector, which includes real estate, represents approximately 15% of our operating revenues.
Government Contracts
No material portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the U.S. government.
Research and Development
We operate a research and development facility in Virginia for design, development, and testing of postal equipment and operating systems. We also contract with independent suppliers to conduct research activities. While research and development activities are important to our business, these expenditures are not material.
Environmental Matters
We are not aware of any federal, state, or local environmental laws or regulations that will materially affect our financial results or competitive position, or result in material capital expenditures. However, we cannot predict the effect of possible future environmental legislation or regulations on our operations.
Employees
At September 30, 2008, we had 663,238 career employees, substantially all of whom reside in the United States. We also had 101,850 non-career employees.
Our labor force is primarily represented by the American Postal Workers Union (APWU), National Association of Letter Carriers (NALC), National Postal Mail Handlers Union (NPMHU), and National Rural Letter Carriers Association (NRLCA). More than 85% of our career employees are covered by collective bargaining agreements. By law, we consult with management organizations representing most of the employees not covered by collective bargaining agreements. These consultations provide nonbargaining unit employees in the field an opportunity to participate directly in the planning, development, and implementation of programs and policies that affect them. Our management organizations include the National Association of Postal Supervisors, the National League of Postmasters, and the National Association of Postmasters of the United States. We participate in federal employee benefit programs as required by statute, for retirement, health, and workers’ compensation benefits.
Available Information
Financial and other information is available on www.usps.com; click on About USPS & News. Information on our website is not incorporated by reference in this document.
We make available on our website, free of charge, copies of our annual report and quarterly reports, as soon as reasonably practicable after they are filed with or provided to the PRC. Requests for copies may also be sent to the following address:
Corporate Communications
United States Postal Service
475 L’Enfant Plaza, SW
Washington, DC 20260-3100