2. NAA Update  Status of Valassis NSA  Postal Rates  Elimination of Saturday Delivery

3. Status of Valassis NSA  NSA Filed with PRC on April 30  Opposition Leads to Extended Review  PRC Approves NSA in August (4-1 vote)

4. The Lone Dissenter “Too much evidence was presented…by many opponents of this NSA for me to conclude that it would not cause unreasonable harm to the marketplace.” - Commissioner Tony Hammond

5. NAA Challenges Decision  NAA Lawsuit Filed on Day of PRC Decision  Supported by NNA / Valpak/ Newspaper Guild  Written Briefs in Spring/Oral Argument in May  Decision Late Summer  Congressional Opposition to NSA Continues

6. Valassis Introduces Spree

7. Status of Spree Implementation  Phoenix / Atlanta Test Markets  Rob Mason, Valassis CEO (Feb 21): “It’s a Challenge to Pull Together Package.”  Package Launch Moved to 2 nd Q

8. Questions?

9. Postal Rates USPS Listens to NAA / Creates “High Density Plus” No Rate Increase for HDP in 2013 Opens Door for Narrowing Rate Gap Dialogue on USPS/Newspaper Partnership

10. Questions?

11. Elimination of Saturday Delivery

12. USPS Financial Challenges  $15.9B loss in FY 2012  $11.1B Default to U.S. Treasury  $15B Borrowing Authority Exhausted  Low Cash Flow

13. Changes to Mail Delivery  Six Days of Package Delivery  Five Days of Mail Delivery  Mail Delivered to Post Office Boxes  Savings = $2B Annually

14. Impact on Newspapers  Community Newspapers Rely on USPS  Opportunity for Daily Newspapers - Delivery of Magazines/Catalogues - Advertiser Dissatisfaction with Service  Dialogue on Opening Up the Mailbox  Negative - USPS Targets Ad Inserts in Select Markets

15. Obstacles to Eliminating Saturday Delivery

16. Congressional Action to Preserve Saturday  USPS Receives $78 Million in Fed. Funding  Legislative Rider Requiring 6-Day Delivery  USPS – “We Won’t Take the Money” - Trading $78 Million for $2 Billion -Achieve 6-Day with Package Delivery

17. Possible Outcomes Scenario # 1: - USPS Ignores Directive from Congress - Eliminates Saturday Delivery on August 5 - Letter Carriers File Lawsuit on Same Day Scenario # 2: - Congress Adopts Postal Legislation - Two-Year Delay Until GAO Studies

18. Questions?