Strategic Transformation Plan 2006 – 2010 MTAC May 18, 2005 Linda A. Kingsley Vice President, Strategic Planning

Strategic Transformation Plan Continue momentum from 2002 Transformation Plan –Service up –Six years positive TFP –Achieve $5B savings ahead of plan –Debt down dramatically –Employee safety and engagement up –Growing revenue as FCM declines –Extended our access –New and improved products Keeping Our Focus

Strategic Transformation Plan Combine 4 Documents into 1 Five-Year Strategic Plan (3 year cycle) Transformation Progress Report (annually) Annual Performance Plan (annually) Transformation Plan (as needed) Strategic Transformation Plan 2006 – 2010 September 30, 2005

Strategic Transformation Plan Four Overarching Strategies linked to Corporate Goals: Foster Growth through Customer Value Metric: National Total Revenue Increase Operational Efficiency Metric: Total Factor Productivity Enhance Customer-Focused and Performance- Based Culture Metrics: OSHA Safety Performance and VOE Scores Improve Service Metrics: EXFC and PETE Metric: Customer Satisfaction Measurement Current Draft

Strategic Transformation Plan Stakeholder Outreach We want to hear from you: Surveys – NPF, mailings, usps.com General comments - Federal Register Notice, at Memo to Face-to-face – PCC speeches, workgroups, MTAC Industry spreading the word Internal

Strategic Transformation Plan What stakeholders have said so far: Postal Service is still relevant Keep costs and rates low –Fix military/escrow issue –Address labor costs Network flexibility Pricing flexibility More convenience / ease of use New and improved products / services Direction

Strategic Transformation Plan Continue focus on service, costs, employees, revenue –Reduce UAA mail 50% –Reduce service failures 50% –Expand access –100% barcoded –Annual price adjustments –Breakthrough customer satisfaction –Increase transparency –Improve network efficiencies Many strategies involve industry participation Keeping Our Focus

Strategic Transformation Plan Questions ?