Richard J. Strasser, Jr.Chief Financial Officer &Executive Vice President

February 22, 2006February 22, 2006

FY 2006 – FINANCIAL PERFORMANCESummary: October 1, 2005 - January 31, 2006Summary: October 1, 2005 - January 31, 2006

• Revenue/Volume at plan

• Expense Inflation/Increases

• Net Income at plan

FY 2006 – FINANCIAL PERFORMANCEIncome Statement – January Year-to-dateIncome Statement – January Year-to-date

($ Millions)

Actual Var PlanPlan SPLY

Revenue $24,945 [-23] -0.1% $24,967 +1.4%

Expense 23,728 -8 0.0% 23,736 +4.0%

Net Income $1,217 [-15]$1,232 $1,792 Escrow Allocation - $1,000

Net Surplus After Escrow Allocation $217

Numbers may not add due to rounding

FY 2006 – FINANCIAL PERFORMANCE

-2.4%

4.2%4.7%

-1.2%

7.5%

0.0%

1.1%

6.4%

0.0%

1.5%

4.1%

-1.6%

Total First-Class Priority Standard Packages Periodicals

Plan Actual

Volume Compared to SPLY – January YTDVolume Compared to SPLY – January YTD

FY 2006 – FINANCIAL PERFORMANCEVolume and Revenue - Change to SPLY- Jan YTDVolume and Revenue - Change to SPLY- Jan YTD

+1.5%+1.5%35.2B35.2BStandardStandard +$149M+$149M

-0.0% -0.0%3.0B3.0BPeriodicalsPeriodicals +$3M+$3M

+4.1%+4.1%433.3M433.3MPackage Serv.Package Serv. -$12M-$12M

+7.5%+7.5%332.2M332.2MPriorityPriority +$151M+$151M

+5.5%+5.5%18.8M18.8MExpressExpress +$20M+$20M

-$109M-$109M

Revenue Change

Revenue Change

- 1.6%- 1.6%34.5B34.5BFirst-ClassFirst-Class

ChangeChangeFY 2006FY 2006 Volume Volume

FY 2006 – FINANCIAL PERFORMANCEDeliveries – January 2006Deliveries – January 2006

Deliveries 145.0MDeliveries 145.0M

Change From SPLY Change From SPLY 2.0M 2.0M

FY 2006 – FINANCIAL PERFORMANCE

0.8

0.9

1.0

1.1

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1

TFP Quarterly Trend 1997 – 2006

2004 20052003 20062000 20011999 200219981997

Index: Quarter 1, FY 2003 = 1.0

FY 2006 – FINANCIAL PERFORMANCEProductivity – January YTD

Change from FY 2005

Total Factor (TFP) 0.1%

Output Per Workhour 1.1%

FY 2006 – FINANCIAL PERFORMANCE

-$1.0B

FY 2006 Net Income/Deficiency

$0.2B

$1.2B $1.2B

Actual Plan

Net Gain/Deficiency After Escrow Allocation

YTD Jan Qtr 2 Remainder Qtr 3 Qtr 4

$0.2B

-$0.3B

$0.1B

-$0.7B

-$0.2B

Cumulative Net Deficiency = $1.8B

Richard J. Strasser, Jr.Chief Financial Officer &Executive Vice President

February 22, 2006February 22, 2006