FINANCIAL UPDATE Mailers’ Technical Advisory Committee Meeting January 30, 2008 H. Glen Walker Chief Financial Officer & Executive Vice President

Preliminary Income Statement Qtr I, FY % $685-$13$672Operating Income/Loss 319,70219, %$688$19,689$20,377 Numbers may not add due to rounding -3.0%-1,71057,10355,394 %SPLYVARSPLYActual (Data in Millions) -$2,958$2,958$0- Net Income Loss 0.0% $685-$13$ ,70219,705 Expense 3.5%$688$19,689$20,377Revenue -3.0%-1,71057,10355,394 Volume %SPLYVARSPLYActual $2,958$0Prior-Year Escrow $3,643$2,971$672

Revenue Variance to SPLY 210 $469 Qtr I $688 9 YTD (Data in Millions) Total Revenue Variance Other Retail Commercial 210 $469 Qtr I $6 YTD (Data in Millions) Total Revenue Variance Other Retail Commercial (Data in Millions) Total Revenue Variance Other Retail Commercial

Volume Performance -3.0%55.4BTotal All Mail -3.4%318MPackage Svc. -4.9%240MPriority -10.9%12MExpress +1.2%2.2BPeriodicals -2.6%27.7BStandard -3.9%24.4BFirst-Class SPLY Change Qtr I YTD

Total Mail Volume 8 Quarter Moving Average Growth Rates % SPLY FY 2005 FY 2006FY 2007FY 2004FY 2008

First-Class Mail Volume % SPLY 8 Quarter Moving Average Growth Rates FY 2005 FY 2006FY 2007FY 2004FY 2008

Standard Mail Volume % SPLY 8 Quarter Moving Average Growth Rates FY 2005 FY 2006FY 2007FY 2004FY 2008

Expense Variance to SPLY Transportation Qtr I YTD -$2 Total Expense Variance Other Retiree Health Benefits Salaries & Benefits +$ Supplies & Services +62 (Data in Millions) Workers Compensation-104

FY 2008 Debt through Quarter I YTD Beginning Debt $4.2 Payment of Debt -$1.0 Ending Debt $3.2 (Data in $Billions)

 The economic environment worsened in the 1 st Quarter putting pressure on volumes and revenues –Housing –Financial Industry –Rising Fuel Prices –Business and consumer confidence declined  Much more volatility clouds the outlook going forward –Focus intensively on the customer to generate revenue –Accelerate Reduction of cost Summary

FINANCIAL UPDATE Mailers’ Technical Advisory Committee Meeting January 30, 2008 H. Glen Walker Chief Financial Officer & Executive Vice President