®

Financial Update

Mailer’s Technical AdvisoryCommittee Meeting

November 18, 2009

Joe CorbettChief Financial Officer & Executive Vice President

2

AgendaAgenda

2009 Financial Results2010 Plan HighlightsSOX Update

3

-8.6%

-16.5%

-7.6%

-13.7%

-12.3%

-18.0%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

First-Class Standard Periodicals Package Svcs Shipping Services

(% S

PL

Y)

FY 2009 Volume Performance FY 2009 Volume Performance

$35.9B

$17.4B

$2.0B

$1.7B$8.1B

Total Volume vs. SPLY = -12.7%

4

Total Workhour SavingsTotal Workhour Savings

-115

-50-36

-4

11

-130

-110

-90

-70

-50

-30

-10

10

30

2005 2006 2007 2008 2009FY

(Millions)

5

FY 2009 Financial ResultsFY 2009 Financial Results

(Billions) FY 2008 FY 2009

Volume 203 177

Revenue $75.0 68.1Personnel Costs 53.6 53.1Non-Personnel Costs 16.8 15.4Retiree Health Benefits 7.4 3.4Net Loss ($2.8) (3.8)

Career Employees * 663 623(*) Thousands

6

AgendaAgenda

2009 Financial Results2010 Plan HighlightsSOX Update

7

Principles of the PlanPrinciples of the Plan

Liquidity Protect The Brand Maintain Service: Quality and Timeliness Return To Profitability Fulfill Universal Service Obligation Grow New Revenue Streams Meet Other Fiduciary Responsibilities

8

Major AssumptionsMajor Assumptions

No Rate Increase No Cost of Living Increase $3.8B in Cost Savings Fuel Prices Remain Stable Reduction of 93M Workhours/53K FTEs Full RHB Payment ($7.7B)

9

Economic ForecastEconomic Forecast

FY 2009 FY 2010

Gross Domestic Product -2.8% 1.6%Retail Sales -8.6% 1.1%Non-farm Employment -3.9% -2.3%Investment -22.5% 4.7%Inflation (CPI-U) -0.3% 1.6%

*Source: IHS Global Insight, Inc. – Nov. 2009 Baseline Forecast

1010

-6.2%

-14.3%-13.6%

-6.2%

-2.0%-1.1%

-7.4%

-16.0%

-14.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%Volume

MailProcessing

CustomerServices

CityDelivery

RuralDelivery Other Total

(% S

PL

Y)

166B

215M 154M

398M

FY 2010 Workhours PlanFY 2010 Workhours Plan

177M220M

1.2B

11

$75

$68

$66

$60

$70

$80

FY 2008 FY 2009 FY 2010 Plan

Revenue Comparison

Revenue Comparison

($ Billions)

*Scale Starts at $60B

12

Integrated Financial PlanIntegrated Financial Plan

(Billions) FY 2009Plan

FY 2010

Volume 177 166

Revenue 68.1 65.9Personnel Costs 53.1 50.0Non-Personnel Costs 15.4 16.0Retiree Health Benefits 3.4 7.7Net Loss (3.8) (7.8)

Career Employees * 623 593(*) Thousands

13

FY 2010 Capital CommitmentsFY 2010 Capital Commitments

5-Year FY 2010Average Plan

Facilities $896 $623Equipment 703 573Infrastructure and Support 443 304Vehicles 79 0Total $2,121 $1,500

($ in Millions)

14

($

Bill

ion

s)

($8.0)

($6.0)

($4.0)

($2.0)

$0.0

$2.0

$4.0

$6.0

$8.0

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

($ B

illio

ns)

FY 2010 projection assumes that debt is at its statutory maximum of $13.2 B through Sept. 2010

Average Monthly Operating Expenses

Volume Plan: 166B Pieces

Available Cash by Month FY 2010Available Cash by Month FY 2010

Before $5.5B RHB Payment 9-30-10

$5.6B

Unrestricted Cash: $4.0B

15

AgendaAgenda

2009 Financial Results2010 Plan HighlightsSOX Update

16

SOX AccomplishmentsSOX Accomplishments

Determine Materiality and Scope

Establish Steering Committee

Develop Communications and

Training plan

FY 2007Prepare

Prepare Documentation

Identify Controls and Gaps

Initiate Gap Remediation

FY 2008Document

Continue Gap Remediation

Update Documentation as Needed

Perform Readiness Testing

FY 2009Test

Update Documentation

Test Controls

CEO and CFO Certification

FY 2010Full Assessment

17

Business Mail Entry UnitsBusiness Mail Entry Units

Significant Deficiency in FY 2009

Focus on compliance● BMA Scorecard

Timely Postage Statement entry Verifications Completed

● SOX Certification All units accepting business mail SOX Controls

18

Business Mail Entry UnitsBusiness Mail Entry Units

Mailers support needed for compliance● Move to electronic postage statements /

verify completion of postage statements● Bring complete postage statements with

mailings● Ensure mailings are checked in at BMEU

®

Financial Update

Mailer’s Technical AdvisoryCommittee Meeting

November 18, 2009

Joe CorbettChief Financial Officer & Executive Vice President