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!

Our Plan to !Preserve RuralPost Offices

May 9, 2012!

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Current Retail Locations!

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Alternate Access!

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39%

Retail Mix!

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27%drop-350millionfewervisitstoPOs!

Customer Visits to Post Offices!

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Average cost to operate: $114,000annually!Bottom 4,500 earn an average of$15,000 annually: equivalent to $52 and4.4 customer window visits per day!Cost to serve is increasing, revenue andvisits are decreasing !

Rural Post Offices!CLOSING THE COST GAP

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RisingcoststomaintainPostOffices!

88%ofruralPostOfficeslosingmoney!

Financialcrisis!

RuralcustomersdesiretopreservePostOffice!

Situation!USPScommitmenttoruralAmerica!

Achieving a Retail Balance!

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Customers

preference for moreconvenient access!

88% of rural PostOffices losing money!

Financial crisis!

Achieving a Retail Balance!

Solution!New

frameworkbased onfour options

for ruralPost Offices!

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Maintain! Maintain the Post Office with reducedretail window service hours to matchcustomer need!

Deliver!Provide delivery service using eitherrural carriers or highway contract

routes!

Engage! Engage a local establishment withinthe community to establish a VillagePost Office

!

Merge ! Merge with a nearby Post Office andprovide service from that location!

Need new photo

Four Paths for Rural Retail Access!

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Lobby and P.O. Box access!Modified window hours!Maintain ZIP Code !Retain community identity !

Maintaining Rural Post Offices!

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Key Learnings

46% would prefer closing Post

Office for alternate access

Rural Customer Survey Results!

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Analyzed 17,728 rural Post Offices!4,561 to remain at 8 hours of window service!Starting review process for approximately 13,000Post Offices!Upgrading 400 Post Offices from designatedclosure!Closing more than 100 non-operating Post Offices!

Rural Post Offices!

Rural Post Offices will remain open unlesscommunity has strong alternative preference!

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Two-year Process with Phased Approach!

2012! 2014!2013!

SEPTEMBER!Community meetingswith surveys begin!

Next Steps!

FALL 2014!Completion!

SEPTEMBER 2012 TO FALL 2014!Phased implementation

!END OF MAY!PRC filing

!90 Day !

PRC Review!

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Methodical process,two year transition!Options available forstaying with the PostalService!Incentive to be provided!

Rural Post Offices!OUR COMMITMENT TO EMPLOYEES

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Preserves rural Post Offices! Allows communities to retain identity

and ZIP Code!New PathForward

Postal Service will engagecommunities!

Will obtain local input before changesare made!

CommunityEngagement

Saves over half a billion dollars a year! Consistent with five-year plan! Helps return Postal Service to

financial stability!AchievesSavings

Conclusion!

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