Northeast Area Mailing Industry Focus Group February 25, 2015 New York, NY

Northeast Area Quarter 1 Operations Political Mail Fall Mailing Peak Operations

Peak Season Fall Mailing Season Columbus Day Veteran’s Day Thanksgiving “Black Friday” Christmas Day Election Day NEA – Q-1 On-Hand Volumes Actual October – December 2014

National Quarter 1, FY October 1,2014 through December 31, Target % On-Time

Target % On-Time October 1,2014 through December 31, 2014 National Quarter 1, FY 2015

Target % On-Time October 1,2014 through December 31, 2014 National Quarter 1, FY 2015

Target % On-Time October 1,2014 through December 31, 2014 National Quarter 1, FY 2015

% On-Time Target October 1,2014 through December 31, 2014 National Quarter 1, FY 2015

% On-Time Target October 1,2014 through December 31, 2014 National Quarter 1, FY 2015

Northeast Area Quarter 1 Performance

Northeast Area Quarter 1, FY October 1,2014 through December 31, Target % On-Time

Target % On-Time October 1,2014 through December 31, 2014 Northeast Area Quarter 1, FY 2015

Target % On-Time October 1,2014 through December 31, 2014 Northeast Area Quarter 1, FY 2015

Target % On-Time October 1,2014 through December 31, 2014 Northeast Area Quarter 1, FY 2015

% On-Time Target October 1,2014 through December 31, 2014 Northeast Area Quarter 1, FY 2015

% On-Time Target October 1,2014 through December 31, 2014 Northeast Area Quarter 1, FY 2015

USPS Leadership Forum for Stakeholders

PEAK Season 2014  Supplemental Staffing  Mail Processing Equipment and Space  We positioned ourselves for success by making investments in: investments in:  Transportation  Scanning Technology  Vehicles  Expanded Sunday Processing  Retail Technology  Expanded Delivery Window  Very Successful 2014 Peak Season

Peak Season 2014  463M Pieces of Mail Delivered in December  Cancellations down 4.4% to SPLY  524M Packages Delivered in December  18% Increase over SPLY  20M Packages Delivered on 5 Sundays

Northeast Area Peak Season Package Delivery

Operation Santa

Financial Results

Volumes: FY2015 vs. SPLY Volumes: FY2015 vs. SPLY

Revenue: FY2015 vs. SPLY Revenue: FY2015 vs. SPLY

Shipping & Package Services Revenue: FY2015 vs. SPLY Shipping & Package Services Revenue: FY2015 vs. SPLY

Controllable Expenses

Northeast Area Financial Results December YTD (3 Months) (Billions) FY 2015 Plan Revenue $2.193 $2.175 Expenses $2.230 $2.254 Income (Loss) (37) (79) Work Hours 56,935 56,917 (18) Salary / Benefits December YTD (3 Months) (Billions) FY 2015 Plan

Continuous Improvement Focus  Stabilizing Operating Window Change  Lean Mail Processing Certification in all Plants  Reducing Processing Cycle Times  3-5 Day Improvement Focus  Air and Surface Capacities  Continual Monitoring of Surface Routes to Ensure Service Compliance and Service Responsiveness Northeast Area Service Performance

Brockton P&DC Northeast Snow Storms January 3 – 4 January 12 January 26 – 27 February 1 – 2 February 9 Middlesex/Essex P&DC

Phase II Network Rationalization OPERATING WINDOW CHANGE ENABLES:  Consistency in consumer receiving experience  Repurposing of facility space  Response to shift in marketplace demands  Positioning us for future  Expanded Remittance Mail and Caller Service processing window  Capturing of greater efficiency

 Enables mailers to plan consolidation implementation progress  File provides mail move consolidation site information, type and date Mail Move Plan File Mail Move Plan is updated and posted on RIBBS RIBBS Mail Move Plan AREA KeyDe-Activation Plant Mail Activation Plant OriginatingDestinatingDPS O- Letter O-Flat O- Packag e D- Letter D-Flat D- Package DPS- Letter DPS-Flat SA Huntsville P&DF CCCCCC7/25/15N/A Birmingham P&DC WA Tucson P&DC CC7/11/15 N/A Phoenix P&DC PA WAEureka CSMPC 7/11/15 N/A Medford CSMPC PA Industry P&DC N/A 4/18/15N/A 4/18/15N/A Santa Ana P&DC (letters) PA Industry P&DC N/A 9/30/15N/A4/18/159/30/15N/A Anaheim P&DC (flats)

 USPS remains committed to continued information sharing  Mailers continue planning based on Mail Move plan schedule  Mail Move plan published weekly on the USPS Rapid Information Bulletin Board (RIBBS) at:  Report issues/concerns through available tools Industry Engagement is Imperative Industry Engagement

Critical Entry Times New Critical Entry Times (CET) are in place for Presort First-Class overnight mail and Periodicals mail effective January 5, 2015  Changes for First-Class Mail  O&D ZIP pairs eligible for overnight service for Presort First-Class mail will continue to be coded with a service standard of 1 in the Service Standards Directory (SSD)  There is no overnight service eligibility for Single-Piece First-Class mail.  There are no CET changes for Presort First-Class 2 day and 3-5 day mail  Changes for Periodicals  Mail destined for non-FSS Zones will receive a new CET based on the container make-up  There are no CET changes for mail destined for FSS Zones

Revised CETs for Presort FCM Overnight  All Presort First-Class containers entered on or after January 5, 2015 AND containing overnight eligible mailpieces (per the SSD), will receive the following CETs: Induction Method Container Make-up New CET BMEU Non Co-Located Any Make-up0000 BMEU Co-Located, Mailer and USPS Transported Any Make-up other than 5 digit scheme digit scheme (per L012) 1200 Mail entered at a BMEU that is not co- located with a USPS plant will receive a 00:00 CET i.e. Start-the-Clock will always be the next processing day (Day 1) Mail entered through any other induction method will receive either a 0800 or a 1200 CET based on the container make-up  If all pieces in a container are destined for the same 5 digit scheme (per L012), a 1200 CET will be applied  Otherwise a 0800 CET will be applied  All Presort First-Class mailpieces eligible for overnight service (per the SSD) will be reported under the overnight category regardless of whether mail was entered prior to or after CET

Revised CETs for Periodicals  No CET change for Periodicals mail destined for FSS zones  Revised CET for Periodicals mail destined for Non-FSS zones DestinationContainer Make-upPrevious CETRevised CET FSSBundle Sort Required0800 (No Change) No Bundle Sort Required1100 (No Change) Non-FSSBundle Sort Required No Bundle Sort Required ** No Bundle Sort Required – Pure Carrier Route Pallet * 1700 (No Change) * Effective April 12, 2015, mailers will be able to identify Pure Carrier Route Pallets in their eDoc (i.e. pallets with only CR bundles and no 5 digit bundles). Those pallets will be assigned a 17:00 CET ** Until April 12, 2015, all Non-FSS mail where bundle sort is not required will be assigned a 14:00 CET

First-Class Service Standards PLANT Next Day Local geographic Area if Entered by CET 2 Day 6 hour drive time ADC to SCF 3 Day Everything else  Mail dropped on Wednesday morning at 7:00am  Local geographic region to be delivered - Thursday  2 Day to be delivered on- Friday

Northeast Area Mail Moves

April – July Mail Moves Network Rationalization: April – June 2015 No Closings Platform / BMEU Will Remain SCF Discounts Will Move To Host Plants Based On National Mail List

April – July Mail Moves Losing FacilityApril Mail MoveJuly Mail Move Southern CT P&DCFlats to Springfield064 DPS to Hartford Stamford P&DC 066 & 069 DPS to Westchester 068 DPS to Westchester Central Mass P&DCDPS Letters to BostonFlats to Middlesex Essex Northwest BostonFSS to Middlesex Essex Queens P&DCFlats to BrooklynDPS Letters to Brooklyn Mid-Hudson Plant DPS Letters (4 Sort Plans) to Albany DPS Letters to Albany Information regularly updated on RIBBS:

Northeast Area Quarter 3 Operations Weather Stabilization of Plant “Operating Window Change” April Mail Moves

NEA – On-Hand Volumes Actual April – June 2014 Memorial Day

NEA – On-Hand Volumes Actual April – June 2014

Continuous Improvement Focus  Stabilizing Operating Window Change  Lean Mail Processing Certification in all Plants  Reducing Processing Cycle Times  3-5 Day Improvement Focus  Air and Surface Capacities  Continual Monitoring of Surface Routes to Ensure Service Compliance and Service Responsiveness Northeast Area Service Performance

Thank you