Growth Initiatives Mailing Services MTAC February 18, 2010

2 Agenda  2009 Summer Sale Recap  2009 First-Class Mail Incentive Update  Proposed 2010 Summer Sale  Future Incentives

3 Impact on Customer Volume 55% of qualified volume participated in Sale 51% of participating Sale volume grew 2009 Summer Sale

4 Preliminary Results  Aggregate view of customers who exceeded volume threshold (512 Growers) Base Volume Loyalty Growth Growth Credited to Sale 2009 Summer Sale

5 Preliminary Results* $ Millions Incremental Rev. $ 141 Rebate Cost (includes Loyalty rebate) $ 68 Net Rev. Growth $ 73 **Summer Sale Cost $ 45 Net Contribution $ 28 * Customer volume data who use MSPs still to be finalized **Attributable costs (assumes summer excess capacity) and program costs Summer Sale

6 Program Overview  20% rebate on incremental First-Class Mail presort volume  Program period: Oct 1 – Dec 31, 2009  Program eligibility: Mailers with 500K/month for - Oct 1 through Dec 31, 2007 and - Oct 1 through Dec First-Class Mail Incentive 2009

7 Participation ■ 918 customers invited to participate in program ■ 515 customers currently in program ■ 443 customers fully certified ■ 72 customers under review First-Class Mail Incentive 2009

8 Program Performance To Date  335 Fully Certified Customer Reviews completed  Incremental revenue $27.4M  Incremental volume 72.2M pieces First-Class Mail Incentive 2009

9 Key Learnings  Incentive program created excitement among customers  Customers however, expressed the need for longer lead time between program announcement and launch  Very few indications of customers shifting volume from Standard Mail  Providing supporting documentation on historical volumes was a challenge for most customers First-Class Mail Incentive 2009

10 Sale Overview Proposed 2010 Summer Sale  5-Month program: June – October 2010  Sale period: July – Sept  Control months: June & October  30% rebate on incremental volume above baseline  Standard Mail letters and flats only  Customer baseline = SPLY volume + 5%  Downward adjustment if June & October volume is below baseline  Customer eligibility  Offered to customers who mailed over 350,000 Standard Mail pieces July 1 - September 30, 2009  Approximately 3,525 customers (67% of Standard Mail volume)  MSPs not eligible

11 Timeline ■ File Notice with PRC (late February) ■ Invitation to participate mailed (early March) ■ Customers register online and certify agreement with threshold volumes on-line for program participation (March- May) ■ PRC Decision (Mid-April) ■ Sale period (July thru Sept) ■ Rebates to customer accounts (December – January 2011) 2010 Summer Sale

12 Future Incentive Programs ■ Develop growth incentives within normal price structure  Annual incentives  Develop structures that meet market demands of customers  Encourage IMB, address quality, and operational efficiency