1 Confidential The United States Postal Service Q2, FY2011 Financial Update May 25, 2011 Joe Corbett Chief Financial Officer & Executive Vice President

2 Confidential Total Mail Volume 8 Quarter Moving Average Growth Rates % SPLY FY 2008 FY 2009FY 2010 Mail Volume Changes by Quarter FY 2011 Note: FY 2010 and FY 2011 include impact of 2010 census volume Excl. impact of 2010 Census Pro-Forma

3 Confidential First-Class Mail 8 Quarter Moving Average Growth Rates % SPLY FY 2008 FY 2009 FY 2010 FY 2011 Mail Volume Changes by Quarter Note: FY 2010 and FY 2011 include impact of 2010 census volume Excl. impact of 2010 Census Pro-Forma

4 Confidential Standard (Advertising) Mail 8 Quarter Moving Average Growth Rates % SPLY FY 2008 FY 2009 FY 2010 FY 2011 Mail Volume Changes by Quarter

5 Confidential Shipping Services Mail % SPLY FY 2008 FY 2009 FY 2010 FY 2011 Mail Volume Changes by Quarter

6 Confidential Workhour and Volume Changes March YTD – FY B 111.9M 77.2M 201.5M 87.8M 74.7M 582.3M 29.3M

7 Confidential March 2011 Financial Results * Before RHB Pre-Funding & Non-Cash Adjustments to Workers’ Compensation Liabilities

8 Confidential Forecasts $15 Billion Debt Limit Forecasts Notes for P/L and Cash Forecasts: Excludes Non-cash Adjustments to Workers’ Compensation Liabilities; may impact net income but not near-term cash flows.

9 Confidential ($ Billions) Debt at $15 B limit for FY Excludes Restricted Cash (Inspection Service’s Recoveries) of approximately $200M FY11 Fcst: $8.3 B loss ($4.3B) Min.1 month liquidity $7B FY12 Fcst: $8.5 B loss ($11.6B) ($5.6B) $1.5B Oct cash requirements $5.5B RHB pre- funding pmt No RHB Pre-funding Pmts of $5.5B in Sep 2011 and $5.6B in Sep 2012 $1.8B$1.2B ($13.1B) ($0.5B) ($2.0B) (See Forecast Note on Slide 8) ($0.1B) Available Liquidity / Cash at Month-End Workers’ Comp Payments in October

10 Confidential ($ Billions) Debt at $15 B limit for FY Excludes Restricted Cash (Inspection Service’s Recoveries) of approximately $200M FY11 Fcst: $8.3 B loss ($4.3B) Min.1 month liquidity $7B FY12 Fcst: $8.5 B loss ($11.6B) ($5.6B) $1.5B Oct cash requirements $5.5B RHB pre- funding pmt No RHB Pre-funding Pmts of $5.5B in Sep 2011 and $5.6B in Sep 2012 ($0.1B) $1.8B$1.2B ($13.1B) ($0.5B) ($2.0B) (See Forecast Note on Slide 8) ($7.1B) ($1.1B) Revenue decline accelerates, gas prices and inflation continue to increase Available Liquidity / Cash at Month-End Workers’ Comp Payments in October

11 Confidential Current Efforts to Ensure Liquidity Ongoing operational efficiencies and discretionary cost reductions Savings of $1.7B from Additional Management Actions in 2012: Labor contract negotiations, transportation, facility consolidations, administrative realignment, service standards, and other Additional route reductions in progress Refund of FERS overpayment Five-Day Delivery RHB Restructuring Management Actions Requests for Congressional Action Need to protect the Business and the Brand….Possible Default?