Open Session

Board of Governors
May 10th, 2011
 Quarterly Report on
Financial Performance
 Mail Volume
Changes by Quarter
Pro-Forma

Total Mail Volume Excl.

impact
of 2010
Census
1.5%
0.7%

-1.3%
-3.1% -3.3% -3.2% -3.0% -2.2%
-5.5%
-6.3%

-9.4% -8.9%

-12.7%
-14.8%-14.6%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2

FY 2008 FY 2009 FY 2010 FY 2011

% SPLY 8 Quarter Moving Average Growth Rates

Note: FY 2010 and FY 2011 include impact of 2010 census volume

 Mail Volume
Changes by Quarter
Pro-Forma

First-Class Mail Excl.

impact
of 2010
Census

-2.7%
-3.4%
-5.0%
-6.0%
-7.2% -7.4% -6.8% -6.5% -6.3% -6.9% -5.7% -7.6%
-8.2%
-10.0%-10.1%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2
FY 2008 FY 2009 FY 2010 FY 2011

% SPLY 8 Quarter Moving Average Growth Rates

Note: FY 2010 and FY 2011 include impact of 2010 census volume

 Mail Volume
Changes by Quarter

Standard (Advertising) Mail

8.9% 8.6%

4.6%
0.7% 1.6%

-2.7% -3.0%
-5.6% -6.1%

-11.2%
-10.9%

-17.7%
-19.7% -19.5%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
FY 2008 FY 2009 FY 2010 FY 2011

% SPLY 8 Quarter Moving Average Growth Rates

 Mail Volume
Changes by Quarter

Shipping Services Mail

2.8% 4.7%
2.4% 2.6% 3.4%
1.6%

-2.1% -2.0%
-4.9%
-4.8%
-7.6%
-10.5%

-15.1%
-15.8%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

FY 2008 FY 2009 FY 2010 FY 2011

% SPLY
 Workhour and Volume Changes
March YTD – FY 2011
Mail Customer Rural
Volume Processing Services City Delivery Delivery Postmasters Other Total
5.0%

0.5%
29.3M
0.0%
(% of Prior Year)

87.4B 87.8M
111.9M 77.2M 201.5M -0.3% 74.7M 582.3M
-0.7%

-2.1% -2.0%
-2.7%

-5.0% -4.5%

-6.3%

-10.0%
 Financial Results

Six Months thru March 2011 FY FY

(Billions) 2011 2010
Revenue $34.1 $35.1
Expenses (34.2) (34.1)
Operating Income (Loss)* (0.1) 1.0
Retiree Hlth. Benefits Pre-Funding (2.8) (2.8)
Workers Comp: Actuarial & Claims (0.7) (0.3)
Workers Comp: Discount Rate Adj. 1.0 0.3
Net Income (Loss) ($2.6) ($1.9)
Volume (Pieces) 87.4 87.9
* Before RHB Pre-Funding & Non-Cash Adjustments to Workers’ Compensation Liabilities
Quarterly Report on
Service Performance
 Quarter 2 Service Performance

• January 1 – March 31, 2011

•Extreme weather conditions
•Employees delivered
•Focused on continuous improvement
 Single Piece First-Class

• Continuous Improvement
•Drive the 24 hour clock
•Reduce variation
•Relentless pursuit of quality
•Faster service diagnostics
•Streamlining the network
 Single-Piece First-Class

Overnight
100

95
96.0 96.0 96.0 95.9

90

85

80
QTR 2 YTD

QTR 2 SPLY YTD

 Single-Piece First-Class

2 - Day
100

95

90 92.4 92.6 92.4 92.5

85

80
QTR 2 YTD

2 Day SPLY YTD

 Single-Piece First-Class

3 to 5 Day
100

95

90
89.7 90.3 89.4 89.7
85

80
QTR 2 YTD

3-5 Day SPLY YTD

 Single-Piece First-Class

International
100

95

90

89.1 87.4 88.5 87.2

85

80
QTR 2 YTD

Int'l SPLY YTD

 Presort First-Class

• Continuous Improvement
•Faster service diagnostics
•Eliminate mailer certification
•Simplified Customer Supplier Agreements
•Implement National Critical Entry Times
 Presort First-Class

100

95

90 91.8
89.4
88.1 87.6
85 86.8
84.8
80
Overnight 2 - Day 3 - 5 Day

QTR 2 YTD
IMB SPLY Data only exists for Qtr 4 FY‘10
 Customer Experience Measurement

• Continuous Improvement
•Leverage diagnostics
•Focused areas of opportunity
•Contact
•Small Business
 Customer Experience Measurement

Overall Experience
90

86.8
85 85.7

82.7
81.6
80
Residential Small Business

QTR 2 SPLY
 Customer Experience Measurement

Residential Experience
100
90
89.9 89.5 89.4 88.7
80 82.9
81.5

70
60
59.9 60.7

50
40
Receiving Sending Visiting Contact
QTR 2 SPLY
 Customer Experience Measurement

Small Business Experience

100
90
87.3 86.1
86.6 85.0
80
77.8
76.3
70
60
50 51.6 52.6

40
Receiving Sending Visiting Contact

QTR 2 SPLY
Open Session

Board of Governors
May 10th, 2011