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    FOOTER (10PT. ARIAL, BOLD, GREY, CAPS)

    TITLE OF PRESENTATION(24PT. ARIAL, BOLD, ALL UPPERCASE)

    Subtitle(20pt. Arial, Bold, Title Case)

    SEPTEMBER 15, 2011

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    Two Announcements

    RadicalNetwork

    Realignment

    MailProcessing

    Facility StudyList

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    Mail Volume Shifting to a Less Profitable Mix

    3

    Volume in Billions of Pieces

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    NETWORK CAPACITY

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    NETWORK CAPACITY

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    Decrease in Processing FacilitiesThrough 2011

    As of 8/31/2011

    Processing

    Facilities

    6

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    Processing

    Facilities

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    Proposed Decrease in Processing FacilitiesThrough 2013

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    Mail Processing Facility Footprint

    487 Facilities Today

    Current Mail Processing Sites8

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    Mail Processing Facility Footprint

    Studying 252 Facilities for Potential Closure

    Currently Under Study

    Announced Today

    Gaining Sites 9

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    Mail Processing Facility Footprint

    Proposed Network

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    Mail Processing Redesign

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    Current Reach

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    Potential Network Change

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    FUTURE NETWORK

    Support 2-3 day Service Standards

    Revised Entry Times Reduced Equipment

    Reduced Footprint

    BENEFITS

    Eliminate Excess Capacity

    More Efficient Transportation Network

    Fully Utilized Workforces

    Up to $3 Billion Cost Reduction14

    Driving Efficiency

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    CHANGES

    Planning for new mail processing footprint

    and transport pattern Transitioning to 2-3 day service standard

    OUR APPROACH

    Industry-specific strategies Ongoing communication and collaborative

    solutions

    Our Customers

    15

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    Our Employees

    559,000

    151,00035,000

    16

    Total Career Employees

    Total Mail Processing Employees

    Fewer Mail Processing Positions

    O

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    Our Future Network

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    $20 billi C R d i b 2015

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    $20 billion Cost Reduction by 2015

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    K A R i i L i l ti A ti

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    Delivery Frequency authority to go from 6- to 5-Day Delivery

    FERS Refund return $6.9 billion in overpaymentsto the Postal Service

    Resolve the current mandate to pre-fund Retiree

    Health Benefits by $5.5 billion annually andmanage legacy cost going forward

    Transfer CSRS overpayment ($50 billion), or Allow Postal Service to restructure its healthcare

    system to make it independent of federal

    programs USPS Health Care Program

    Key Areas Requiring Legislative Action

    K A R i i L i l ti A ti

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    Managing Workforce allow reductions in thenumber of bargaining unit postal employees tofollow Reduction-in-Force provisions applicableto other federal employees

    Retirement Plan allow Postal Service to

    provide a defined contribution retirement planfor its new hires; can be accomplished via OPM

    Streamlined Governance Model to speedpricing and product decisions

    Key Areas Requiring Legislative Action

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    FOOTER (10PT. ARIAL, BOLD, GREY, CAPS)

    TITLE OF PRESENTATION(24PT. ARIAL, BOLD, ALL UPPERCASE)

    Subtitle

    (20pt. Arial, Bold, Title Case)