FINANCIAL UPDATEMailers’ Technical Advisory Committee

Meeting

April 29, 2009

J. CorbettChief Financial Officer &Executive Vice President

Economy-Business Impact

Global Insight's Baseline Forecasts for FY 2009

*Mailing Services Only

**In Millions

Jan-08 Aug-08 Dec-08 Mar-09 Apr-09

GDP 2.3% 0.7% -1.7% -3.2% -3.0%Retail Sales 1.4% -1.6% -7.5% -9.9% -9.3%Employment 1.1% -0.6% -2.2% -3.8% -3.9%Investment 1.7% -3.8% -16.4% -21.5% -21.2%CPI-U 1.4% 4.1% -1.1% -1.2% -0.8%Rate Assumptions* 2.9% 4.8% 3.8% 3.8% 3.8%

USPS Volume** 205,265 194,528 189,571 180,000 180,000

Revenue $2.8 Billion Below SPLY

Revenue $2.8 Billion Below SPLY

Expenses $0.8 Billion Below SPLY

Expenses $0.8 Billion Below SPLY

Net Income $2.0 Billion Below SPLY

Net Income $2.0 Billion Below SPLY

February YTD FY 2009 SPLY Financial Results

* Numbers may not add due to rounding

February YTD FY 2009 Financial Results

[ ] = Unfavorable variance to Plan/SPLY

Numbers may not add due to rounding(Data in Millions)

Mail Volume (%SPLY): -12.1%

VarSPLYActual %SPLY

[-$2,055]$ 258-$ 1,797Net Loss -773 32,784 32,011Expense

[-$2,828]$33,041$30,214Revenue

-2.4%

[-8.6%]

[-797.4%]

$25,921 79.1%

$3,932 12.6%

$2,719 8.3%

Total Personel Comp Transportation Other

($ in Billions)

% SPLY (1.6%) (7.2%) (3.7%)

February YTD FY 2009 Expense by Category

-12.1%

-14.0%-12.3%

-4.9%-6.2%

-5.1%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Mail Volume Mail Processing

CustomerService

Rural Delivery

City Delivery

Other

February YTD FY 2009 Workhours % SPLY

March Expectations

No significant change in economic forecast resulting in continued revenue and volume declines

USPS continues to aggressively manage the business

Variable workhours declining to partially offset revenue declines

-3.1% -3.2%

-5.6%-6.4%

-9.3%

-14.7%

-2.1%

-4.8%

-2.0%

-4.9%

-10.5%

-15.9%

Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2

Mailing Services Shipping ServicesFY 2008 FY 2009

Quarterly Volume - % SPLY

*

*Preliminary

-2.6% -3.1%

-9.9%

-7.2%-5.5%

-3.9%

-1.3%-2.5%

-0.8% -0.1%

1.2%1.6%

-6.9%

Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2

First-Class Mail Volume

8 Quarter Moving Average Growth Rates% SPLY

FY 2006 FY 2007 FY 2008 FY 2009

*

*Preliminary

-19.8%

1.2%2.7%

-6.1%-5.5%

-11.0%

-1.4%-0.9%

0.2%2.8%

4.9%

-2.6% -3.0%

Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2

Standard Mail Volume

8 Quarter Moving Average Growth Rates% SPLY

FY 2006 FY 2007 FY 2008 FY 2009

*Preliminary

*

% SPLY 8 Quarter Moving Average Growth Rates

FY 2006 FY 2007 FY 2008 FY 2009

-2.2%

-7.8%

0.3%

-2.2%

-3.3%-3.5%

-2.6%

-0.5%

0.1%

-0.6%

-5.3%

1.2%

-4.3%

Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2

Periodicals Volume

*

*Preliminary

Bulk Mail Acceptance

We N

WE NEED YOUR HELP!

Issue

Postal Service received Significant Deficiency from external auditor for ineffective financial controls pertaining to Business Mail Acceptance

– Timely recognition of revenue

– Customer trust balances

– Incomplete postage statements Mailer USPS

Progress to DateBMA Results

16

BMA Items FY 2007FY 2009 (March)

Timely Postage Statement Entry 77% 99%

Master Trust Reconciliation 87% 97%

BMA Items MetricsSeptember

2008March 2009

Negative Balances

Number of Accounts 2,000 260

Balance of Accounts $1.7M $413K

Progress to DateCompletion of Postage Statements

Control Actual Pass Rate %

Periodicals

Number of Addressed Pieces

Total Postage

Owner or Agents Signature

Permit

Total Postage

Signature of Mailer

10 20 30 40 50 60 70 80 90

Completion of Postage Statements FY 2009 YTD Compliance Rates

Periodicals 68%

Permit 38% Target Pass Rate

SOX and the Role of Our Customers

Do not present a mailing with a hard copy postage statement if you submitted one electronically

Ensure all sections of postage statements are correct after making changes

Verify permit number on the mail matches the postage statement

Check that mailing fees and authorizations such as Non-profit are current

SOX and the Role of Our Customers

Provide the required documentation to support the rates claimed on the postage statement

Update your mailer profile and ensure your permit is valid

Keep your business account active

– After 2 years of non-activity your account will expire

If you are a publisher - Make sure you file your Statement of Ownership in October

Communication is the key – Ask the BMEU for assistance if needed

FINANCIAL UPDATEMailers’ Technical Advisory

Committee Meeting

April 28, 2009

J. CorbettChief Financial Officer &Executive Vice President