1. ® 1 DISCUSSION DRAFT (Here to Serve Our Customers) USPS Financial Update and a Plan for Our Future (Here to Serve Our Customers) October 13, 2011 Joe Corbett

2. 2 DISCUSSION DRAFT August 2011 Preliminary Financial Results

3. 3 DISCUSSION DRAFT Preliminary Financial Results * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingent Liabilities

4. 4 DISCUSSION DRAFT Preliminary Financial Results * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingent Liabilities

5. 5 DISCUSSION DRAFT Preliminary Revenue 11 Months Ended August 31, 2011 ($ Billions) $2.1 $0.2 $0.5

6. 6 DISCUSSION DRAFT Preliminary Financial Results * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingent Liabilities

7. 7 DISCUSSION DRAFT Workhour Changes August YTD – FY 2011 197.7M 138.2M 366.4M 163.3M 133.5M 1055.4M 54.3M August YTD Reduction = 31.3M hours 153.8B

8. 8 DISCUSSION DRAFT Preliminary Financial Results * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingent Liabilities

9. 9 DISCUSSION DRAFT Preliminary Financial Results * Before RHB Pre-Funding, Non-Cash Adjustments to Workers’ Compensation Liabilities & Contingent Liabilities

10. ® 10 DISCUSSION DRAFT USPS Financial Future

11. 11 DISCUSSION DRAFT Plan to Profitability Revenue Declines $ in Billions Total Revenue Relentless First-Class Mail Migration

12. 12 DISCUSSION DRAFT Additional Actions Needed to Reduce Cost $ in Billions Current Expense Outlook 2011-2020 Cumulative Losses of $154B Total Revenue

13. 13 DISCUSSION DRAFT Aggressive Cost Reduction Needed $ in Billions Current Expense Outlook 2011-2020 Cumulative Losses of $154B $20B Shortfall in FY2015 $20B USPS Plan to Cut Expenses by FY2015 Total Revenue

14. 14 DISCUSSION DRAFT $20B Total Postal Plan to Profitability $20B Cost Eliminated by FY2015

15. 15 DISCUSSION DRAFT Future Network Network Optimization

16. 16 DISCUSSION DRAFT Potential Decrease in Processing Facilities Through 2013 Processing Facilities

17. 17 DISCUSSION DRAFT  President’s Plan on Deficit Reduction stabilizes USPS finances for next several years -USPS supports because it gives USPS sufficient operating cash for next two years -USPS recommends adoption of USPS Health Care Program  House Continuing Resolution: Defers Retiree Health Benefit payment until November 18  Divergent House and Senate postal legislation Possible Legislative Paths Current State of Play

18. 18 DISCUSSION DRAFT President's Plan for the USPS  Restructure retiree health benefit pre-funding to reduce near- term postal payments  Provide USPS w/ refund over two years of $6.9 billion surplus contributed to Federal Employee Retirement System  Reduce USPS operating costs by giving USPS authority to reduce mail delivery from 6 to 5 days  Allow USPS to increase collaboration w/ state and local governments; e.g. non-postal products and to mail beer and wine  Allows USPS ability to raise postage rates above current price cap USPS Supports President's Plan for USPS Reform

19. 19 DISCUSSION DRAFT Here to Serve Our Customers