®

USPS Financial Update

Mailer’s Technical Advisory Committee Meeting

May 19, 2010

Joe CorbettChief Financial Officer & Executive Vice President

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3

Financial Results

($ in Billions)

0.3(1.9)($1.6) Net Loss

(0.6) 17.0 16.4Expense(0.2)16.9$16.7Revenue (1)

($ Chg)20092010

(3.8)

(1.4)

(% Chg)

Three Months Ended March 31, 2010

0.1 1.8 1.9Retiree Health Bfts 4.5

-1.543.842.3Volume (Pieces) (2) -3.3%

(1) Includes $180 Million in Census Revenue for Qtr II 2010 period.

(2) Includes 486 Million pieces in Census Volume for Qtr II 2010 period.

4

-0.5%

-5.5%

-9.3%

-14.3%

2.2%

-12.7%-14.7%

-6.3%

-3.3%-3.1%-1.3%

-2.3%-3.3%

-8.9%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Total Mail Volume

8 Quarter Moving Average Growth Rates% SPLY

FY 2007 FY 2008 FY 2009 FY 2010

5

-5.0%-7.2% -6.6%-7.7%

-9.9%-8.2%

-2.7%-3.4%-1.4%-1.2%-2.5%

-0.4%

-9.7%-6.6%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

First-Class Mail Volume

8 Quarter Moving Average Growth Rates% SPLY

FY 2007 FY 2008 FY 2009 FY 2010

6

-2.7%

-10.9%

4.9%

0.6%

-18.8%-19.5%-17.7%

-5.6%-3.0%

-0.9%

1.3%

-1.4%

-6.1%

-11.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Standard Mail Volume

8 Quarter Moving Average Growth Rates% SPLY

FY 2007 FY 2008 FY 2009 FY 2010

7

1. Reduce Workhours • Reduction of 22,000 employees Oct/Nov• Goal – approx. 90,000 workhours

2. Day-to-Day Management● Efficiency – Productivity and Overtime● Service Performance – All Categories

3. Variance & Staffing Modeling● Mail Processing● Customer Service● People Repositioning

4. Implement National Programsa) Network Distribution Center Accelerated b) Area Mail Processing Implementation c) Route Adjustment Processd) Flat Sorter Sequencing Implementatione) All Areas – Costs Down Across the Postal Service

Focus on Cost

8

1. Reduce Workhours• Reduction of 22,000 employees Oct/Nov • Goal – approx. 90,000 workhours

2.Day-to-Day Management• Efficiency – Productivity and Overtime• Service Performance – All Categories

3. Variance & Staffing Modeling● Mail Processing● Customer Service● People Repositioning

4. Implement National Programsa) Network Distribution Center Accelerated b) Area Mail Processing Implementation c) Route Adjustment Processd) Flat Sorter Sequencing Implementatione) All Areas – Costs Down Across the Postal Service

Focus on Cost

9

1. Reduce Workhours• Reduction of 22,000 employees Oct/Nov • Goal – approx. 90,000 workhours

2. Day-to-Day Management● Efficiency – Productivity and Overtime● Service Performance – All Categories

3. Variance & Staffing Modeling• Mail Processing• Customer Service• People Repositioning

4. Implement National Programsa) Network Distribution Center Accelerated b) Area Mail Processing Implementation c) Route Adjustment Processd) Flat Sorter Sequencing Implementatione) All Areas – Costs Down Across the Postal Service

Focus on Cost

10

1. Reduce Workhours• Reduction of 22,000 employees Oct/Nov• Goal – approx. 90,000 workhours

2. Day-to-Day Management● Efficiency – Productivity and Overtime● Service Performance – All Categories

3. Variance & Staffing Modeling● Mail Processing● Customer Service● People Repositioning

4. Implement National Programsa) Network Distribution Center Accelerated b) Area Mail Processing Implementationc) Route Adjustment Processd) Flat Sorter Sequencing Implementatione) All Areas – Costs Down Across the Postal

Service

Focus on Cost

11

-6.3%

-12.7%-11.6%

-4.8%-4.2%

-5.9%

-7.5%

-15.0%

-10.0%

-5.0%

0.0%Volume

MailProcessing

CustomerServices

CityDelivery

RuralDelivery Other Total

(% S

PLY)

Workhours

88.1B 117M 82M 206M 87M 106M 598M

49M Workhours Below SPLY

Six Months Ended March 31, 2010

12

Financial Results

($ in Billions)

0.4(2.3)($1.9) Net Loss

(1.4) 34.6 33.2Expense(0.9)36.0$35.1Revenue (1)

($ Chg)20092010

(4.5)

(2.7)

(% Chg)

Six Months Ended March 31, 2010

0.1 3.7 3.8 4.5

-5.994.0 88.1Volume (Pieces) (2) -6.3%

(1) Includes $180 Million in Census Revenue for Qtr II YTD 2010 period.

(2) Includes 486 Million pieces in Census Volume for Qtr II YTD 2010 period.

Retiree Health Bfts

®

USPS Financial Update

Mailer’s Technical Advisory Committee Meeting

May 19, 2010

Joe CorbettChief Financial Officer & Executive Vice President