1. U.S. Postal Service in Crisis Beginning of the End? Newspaper Target Marketing Coalition New Orleans March 7, 2012

2. USPS Challenges Volume – Declining Steadily Price – Rising but Capped Universal Service Obligation Labor Costs Pre-Fund Retiree Health Benefits Debt Ceiling – Maxed Out / $15 Billion

3. Volume by Mail Type

4. Revenue by Mail Type

5. USPS Incurring Unsustainable Losses

6. USPS Strategic Plan $20 Billion Savings by 2015 Legislative Initiatives Eliminate Pre-Funding of Retiree Health Benefits Eliminate Saturday Delivery Refund Overpayments to Federal Retirement System Operational Initiatives Retail: Closing Down Post Offices Network: Close and Realign Sortation and Transportation Facilities Service Standards: Change Overnight Delivery of FCM/Periodicals Reducing Workforce by 155,000 Employees Manage Own Healthcare Outside the Federal Government

7. What Does Congress Think?

8. Legislative Proposals U.S. House of Representatives (H.R. 2309)  Turn USPS over to a Control Board  Commission for Post Office Closings  Eliminate Saturday Delivery  Increase Rates (CPI & 5%) for “Underwater” Products (e.g. Periodicals) U.S. Senate (S. 1789)  Provide USPS with RHB / Pension Relief  Eliminate Saturday Delivery (after 2 years and a GAO study)  Non-Postal Products (E-Commerce?)  NSAs can Lose Money to Retain or Grow Volume

9. What Does Future Look Like for Newspapers ? 1.Periodicals  Higher Rates/Poor Service 2.Standard Mail  Continued Pressure on Rates  New Promotions (Sat/H.D. Incentives/Mobile Barcodes)  USPS Strays into Private Sector Competition (EDDM)

10. Opportunities for Newspapers 1.Distribution Revenue  Delivery of Magazines  5-day Delivery (Newspapers Own the Weekends)  Convince Congress to Open Up the Mailbox? 2. Convince USPS of a TMC Retention Strategy  Data on TMCs in Alternative Delivery  Creative Proposals or Price Adjustments Over Time