August 20, 2015

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FY 2015 Service Challenge 21 Named Winter Storms Record Snowfalls Flights Grounded / Delayed 23.1M Missed Deliveries FY15 Q1/Q2 — Weather Impacts 4

FY 2015 Service Challenge Operating Window Change (OWC) implementation began in all processing facilities 320 Significant changes to: Transportation Schedules Machine Schedules Employee Schedules Customer Supplier Agreements CSA 5

First-Class Composite Q4TD/YTD: SPFC thru July 31,2015, Presort July 24, FCM CompositeUCL/LCLTarget YTDQ4TD Actual

Standard Mail Composite Q4TD/YTD thru July 24, Standard CompositeUCL/LCLTarget YTDQ4TD Actual

Periodicals PeriodicalsUCL/LCLTarget YTDQ4TD Actual Q4TD/YTD thru July 24,

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New for Fall 2015  124 automated package and bundle sorters expanded since last Fall mailing season  5,488 additional separations added to the fleet  An average of 44 per machine  21 Small Package/Bundle Sorter Systems  Expanded access to the network  FAST Appointments extended  Activated 187 Hubs  New data analysis tools and reports (SPD)  Mobile Delivery Device deployment complete Sept  Lean Mail Processing implemented in every plant  Lean Mail Delivery – phase 1 implemented in every unit  Leverage Local Operations Centers 10

Equipment  USPS spent $96M in New Buys for FY 2015  Plastic Pallets, Plastic Trays, Plastic Flat Tubs and Sleeves  Quarter 4 purchases still being received through September  MTE Inventory is available to meet Fall Mailing Season demand  4.1 Million EMM Trays & Sleeves  2.5 Million MM Trays & Sleeves  1.7 Million Half-Trays & Sleeves  2.0 Million Pallets  2.9 Million Flat Tubs 11

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Consumer Expectations are Changing Consumers are connected, informed and expect:  One-stop-shop experiences  Personalized service  Identity Protection When expectations are not met, consumers share their experience. When expectations are not met, consumers share their experience. 13

Physical to Digital Mail Promotions Faster Shipping. More Visibility. Simpler Returns. MyUSPS my.usps.com 14

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Mail Remains Relevant

We created our own catalog…

Mail + Mobile an Optimum Connection Use mail as jumping-off point for mobile commerce QR codes used by 1 in 5 smartphone users: –USPS drove initial adoption of QR Codes with first Mobile Barcode promotion 400% increase in QR Code scans by consumers from Mobile device key to linking channels Best practices Link to mobile optimized and/or personalized site Optimizing Direct Mail

2015 Promotional Calendar

We’re Also Adapting to Changing Delivery Expectations…. We’re Also Adapting to Changing Delivery Expectations…. Sunday Delivery -New Sunday locations Denver, Minneapolis, Detroit Aug-Nov ,300 additional ZIP Codes mapped for expansion -Averaging 1.2M parcels on Sunday Ship From Store (Next Day) -16 customers with over 7,400 stores served -Onboarding 2 new customers with over 3,000 stores Same-Day (Metro Post) -More than 132,000 deliveries year to date Opening New Customized Delivery Markets -Grocery Delivery 6,000 deliveries with over 27,000 totes per week 21

My USPS. Com is platform USPS will use to give the consumer more control over package Site allows consumer to: -Notified of delivery status -Control delivery such as package intercept -Direct the carrier where to leave a package (with a neighbor in back etc.) Providing Consumers Control of Delivery My USPS: Package Notification

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24 Retail Update Increase revenue Achieve Operational Effectiveness Improve the customer experience Leveraging retail network across physical and digital channels Delivering a brand experience through a transformative customer- centric retail environment Focus Goals

25 Investments in retail employees, processes, and infrastructure at high-traffic Post Offices improves the overall retail customer experience Increased Employee Training o Conducting brand image, customer perception, and communications training to improve customer service Investments in Infrastructure o Performing deferred maintenance work to strengthen retail infrastructure and address customer-facing issues Standardized Customer Experience o Establishing tiered certifications to create a consistent, customer-centric experience Lean Retail o Applying lean principles to counter line, inner and outer lobby, and back office Customer Experience Investment Areas Premier Offices

26 Additional Self-Service Kiosks  Self-Service Expansion (SEP) emphasized using lobby assistants and self service to improve customer experience  During expansion, customer adoption increased Mobile Technology Mobile point of sale (mPOS) devices rolled out at 2,869 sites to decrease customer wait-time and enable clerks to:  Greet customers in front of the retail counter line  Direct customers to the technology that best serves their needs  Quickly complete simple transactions away from the window Integrated Retail Software Retail Systems Software (RSS), deployed to 10,000 Post Offices, links technology platforms to:  Empower flexibility with evolving consumer needs  Create an integrated retail technology experience  Deploy an intuitive interface to improve ease of training and service Key Investment Areas Retail Technology Retail technology investments Investments in self-service & mobile technologies help improve the retail customer experience

Self-Service Retail Kiosk (e.g., Brown Bag Restaurant) Going forward, we can make greater use of emerging technologies to enhance the customer experience In-person verification (e.g., airport check-in) using mobile device Smart device connectivity (e.g., NFC and Bluetooth printer stations) Mobile payments (e.g., Apply Pay, iWatch) Retail technology investments Retail Technology

28 Lean Delivery – F4 Operations o Applying lean principles to distribution operations Optimizing the use of Delivery Unit Distribution Ops Technology o Modifying equipment to allow more operational flexibility o Standardizing use of the equipment Optimization of F4 operations to promote office efficiencies o Focus on Distribution up-times o Taking advantage of OWC to improve operational efficiency Deliver Unit Distribution Operations Premier Offices Post Office Investment Areas

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 Committed to Service Excellence  Our Commitment  Industry Engagement  Effective Use of Data and Diagnostic Tools Going Forward  Prepared for a Successful Fall Mailing Season 31

We are Committed to Service Excellence Commitment Engage Industry Stabilize OWC C OMMITMENT TO S ERVICE E XCELLENCE Use Data and Diagnostic Tools Educate and Empower Employees Drive Efficiency 32

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