® Network Distribution Center (NDC) Update Frank Neri Manager, Processing Operations

2 MTAC Meeting – May 20, 2010 Agenda  Update on Activation  Service Performance  L009/L011 consolidation  STC Integration

3 MTAC Meeting – May 20, 2010 Update on Activation Phase 1 Phase 2 Phase 3 Phase 4 5/18 – 7/17 3 NDCs Complete 8/10 – 9/11 6 NDCs Complete 9/14 – 10/9 5 NDCs Complete 10/19 – 11/20 7 NDCs X 4 Mar 26 3 NDCs Activation completed Decision to Accelerate Implementation Retirement Incentive & Peak Season Approaching Areas Own Network Activation

4 MTAC Meeting – May 20, 2010 NDC Update  End-to-End Package Services ● Performance now at goal % improvement compared to pre-NDC activation  Periodicals and Standard Mail ● Focus network wide on L201 flow (First Class surface reach) ● Operating windows modified to move L009/L010/L011 volumes though NDC facilities in less than 24 hours ● IMB will provide additional visibility ● DMM changes will enhance mail flow and reduce cycle time

5 MTAC Meeting – May 20, 2010 NDC Update  Consolidation of MXD States distribution 75% complete ● MXD States consolidation began 4/5/10  Mailers transition through 6/17/10  Eliminated 34 L011 sites and 15 L009 sites  OTSIS monitoring compliance  Des Moines L011 on 6/7/10 (75 days for compliance)  Los Angeles and New Jersey TBD ● 18 Letter and Flat sites when consolidation is completed

6 MTAC Meeting – May 20, 2010 NDC Update  Combine STC and NDC operations in the NDC facility ● Washington NDC complete ● Chicago will be complete 6/5/10 ● Others to be completed in FY2010  Atlanta HSTS installation under way  Memphis HSTS complete  Springfield campus optimization  Los Angeles equipment moves under way  New Jersey equipment moves under way