1. Stamp Fulfillment Services A Division of USPS Government Relations & Public Policy May 19, 2010

2. May 2010Stamp Fulfillment Services, Khalid Hussain2 Alternative Channel  As an Alternate sales channel for USPS, SFS provides stamps to a variety of customers  Single site, centrally located in Kansas City  Originating as a philatelic center, now supplies USPS stamps & philatelic products globally  Annual revenue growth of 15% (average) in last 8 years  Distinction between SFS & Distribution Centers

3. May 2010Stamp Fulfillment Services, Khalid Hussain3 Core Beliefs of SFS  Continuously evolving with customers  Recognizing the customer and their needs  Learning organization; listening to customers and providing solutions  Adoption and successful implementation of best industry practices  Provide added value by innovation and diversification

4. May 2010Stamp Fulfillment Services, Khalid Hussain4 SFS Revenue, 2002 – 2010 (Projected) Source: SFS Blue Book for FY 1998 - 2010 $297.6

5. May 2010Stamp Fulfillment Services, Khalid Hussain5 TFP Annual Change by Revenue / Workhour (FY 2002 – 2009) Average Yearly Change of TFP = 14.6% 20022003200420052006200720082009 Revenue / Workhour$574.37$702.71$860.70$1,045.52$1,162.31$1,396.50$1,602.06$1,653.03 Yearly% TFP ChangeBase22.3%22.5%21.5%11.2%20.1%14.7%3.2% Cumulative% TFP GrowthBase98.1%120.6%142.0%153.2%173.4%181.1%191.3%

6. May 2010Stamp Fulfillment Services, Khalid Hussain6 Diversification For the purposes of simplification each program has been presented as having equal weight. In reality each program contributes differently to SFS profitability. The various programs may require more or less labor hours, contribute more or less revenue, and affect customer satisfaction to varying degrees. 2002 2010

7. May 2010Stamp Fulfillment Services, Khalid Hussain7 Automation  State-of-the-Art Automation  Continuing practices of Lean Six Sigma  Involvement of all stakeholders in exploring optimal solutions

8. May 2010Stamp Fulfillment Services, Khalid Hussain8 SFS Business Model – S I P O C

9. May 2010Stamp Fulfillment Services, Khalid Hussain9 SFS Customer Database Overview STAMPS Now™ Businesses Serious Collectors Casual Collectors Stamps for Use Domestic Dealers International Dealers Federal Agencies Local Postmasters Express Mail Corporate Accounts Personalized Stamped Envelopes International Customers STAMPS Now™ Businesses Serious Collectors Casual Collectors Stamps for Use Domestic Dealers International Dealers Federal Agencies Local Postmasters Express Mail Corporate Accounts Personalized Stamped Envelopes International Customers Customer Types Payment Types ChecksWire Transfers Credit CardsSubscription ACHLines of Credit Trust AccountsAutocharges EDI ChecksWire Transfers Credit CardsSubscription ACHLines of Credit Trust AccountsAutocharges EDI NCMS Database = 5.5 million Customers NCMS Database = 5.5 million Customers

10. May 2010Stamp Fulfillment Services, Khalid Hussain10 Turnaround Times Time to Ship Orders Following Induction of Orders into System 1 4.7 million Shipments in FY 2009 92.5% of tracked orders are received within the standard delivery time of 1 – 3 days (Priority Mail) from the time they leave SFS 2 1 SFS Postal Store Order Report, reports both Postal Store & Non-Postal Store Orders 2 Reported by Expedited Shipping, 2/2010

11. May 2010Stamp Fulfillment Services, Khalid Hussain11 Value-Added Contributions  One-to-one relationships with Preferred Customers  Various payment methodologies  Scheduled shipments  Electronic Data Interchange & Reconciliation  Provide electronic reports  Excellent Customer Service

12. May 2010Stamp Fulfillment Services, Khalid Hussain12 Questions & Answers