POSTAL AUTOMATED REDIRECTION SYSTEM (PARS) MAILPIECE DESIGN FOR POSTAL AUTOMATED REDIRECTION SYSTEM (PARS) 1

Perspective – Mail Forwarding 16.1% of Population Moves Each Year 43 Million Change-of-Address Orders Annually 2 Billion Pieces of Mail Forwarded Annually Perspective – Mail Forwarding Processing undeliverable as addressed mail is a big business. With approximately 20% of the American population moving each year, we generate 43 million change of address order annually. This translates to 4.3 Billion pieces of machinable UAA letters And adds a cost structure of $1.9 Billion annually to the Postal Service bottom-line. That’s nearly 3 percent of our total operating expenses.

PARS MOVIE

PHASE I DEPLOYMENT PLANS 86 Computerized Forwarding System Sites 49 Processing & Distribution Centers 15 Remote Encoding Centers National Customer Support Center Planned Phase I Deployment Completion – November 2004

AUTOMATED REDIRECTION PROCESS

AUTOMATED USPS ENDORSEMENT PROCESS

AUTOMATED ADDRESS CORRECTION NOTIFICATION

PARS FORM 3547

MAILER AND POSTAL SERVICE BENEFITS Service Improvement Customer Satisfaction Operational Efficiency PARS will provide a number of benefits to the Postal Service and our customers: With Phase I deployment – we anticipate pulling 2.8 million work hours in our first full year of deployment. Because we will start the forwarding process at our first automated handling, we will drastically reduce the cycle time to forward mail. This reduction in cycle time will improve service One of the drivers of customer dissatisfaction in the past has been related to the forwarding of mail. Because of the service improvement and the quality features built in to this automated process, we anticipate improving our customer satisfaction measures. 2

MAILER ENDORSEMENT REQUIREMENTS Must have a Domestic Return Address Must Place Any Ancillary Service Endorsement in One of These Four Positions Presorted First Class Mail U.S. Postage Paid Fort Worth TX Permit No. 1 JAMES WARRICK RUSS GALLERY LTD 4016 MAIN ST FORT WORTH TX 76133-5559 JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 ENDORSEMENT 2

MAILER ENDORSEMENT REQUIREMENTS Type Size of the Endorsement is at Least 8 Points Read Direction of the Endorsement and Return Address is the Same as the Read Direction of the Delivery Address Reasonable Degree of Color Contrast – A Brilliant Colored Background or Reverse Printing is not Permitted A Clear Space of at Least ¼ inch is Placed Around the Total Area Containing the Endorsement 2

CHANGE SERVICE REQUESTED REVERSE PRINTING JAMES WARRICK RUSS GALLERY LTD 4016 MAIN ST FORT WORTH TX 76133-5559 PRESORTED STANDARD U.S. POSTAGE PAID Fort Worth TX CHANGE SERVICE REQUESTED JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 2

INCORRECT PLACEMENT JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 JAMES WARRICK RUSS GALLERY LTD 4016 MAIN ST FORT WORTH TX 76133-5559 PRESORTED STANDARD U.S. POSTAGE PAID Fort Worth TX JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 Address Service Requested 2

FONT SIZE TOO SMALL JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 JAMES WARRICK RUSS GALLERY LTD 4016 MAIN ST FORT WORTH TX 76133-5559 PRESORTED STANDARD U.S. POSTAGE PAID Fort Worth TX Address Service Requested JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 2

READ DIRECTION OF ENDORSEMENT NOT CORRECT JAMES WARRICK RUSS GALLERY LTD 4016 MAIN ST FORT WORTH TX 76133-5559 Address Service Requested JOHN DOE 10 ELM ST ANYTOWN NY 98765-4321 2

PARS will Improve Service and Operational Efficiency SUMMARY OF KEY POINTS PARS will Improve Service and Operational Efficiency PARS Recognition Technology Tuned to Domestic Mail Manual Requirements Proper Mailer Endorsements will Ensure Proper PARS Handling 2