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FINANCIAL UPDATE Mailers’ Technical Advisory Committee Meeting April 29, 2009 J. Corbett Chief Financial Officer & Executive Vice President
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Economy-Business Impact
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Global Insight's Baseline Forecasts for FY 2009 *Mailing Services Only **In Millions Jan-08Aug-08Dec-08Mar-09Apr-09 GDP 2.3%0.7%-1.7%-3.2%-3.0% Retail Sales1.4%-1.6%-7.5%-9.9%-9.3% Employment 1.1%-0.6%-2.2%-3.8%-3.9% Investment1.7%-3.8%-16.4%-21.5%-21.2% CPI-U1.4%4.1%-1.1%-1.2%-0.8% Rate Assumptions* 2.9%4.8%3.8% USPS Volume** 205,265 194,528 189,571 180,000
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Revenue $2.8 Billion Below SPLY Revenue $2.8 Billion Below SPLY Expenses $0.8 Billion Below SPLY Net Income $2.0 Billion Below SPLY February YTD FY 2009 SPLY Financial Results * Numbers may not add due to rounding
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February YTD FY 2009 Financial Results [ ] = Unfavorable variance to Plan/SPLY Numbers may not add due to rounding (Data in Millions) Mail Volume (%SPLY): -12.1% VarSPLYActual%SPLY [-$2,055]$ 258-$ 1,797 Net Loss -773 32,784 32,011 Expense [-$2,828]$33,041$30,214 Revenue -2.4% [-8.6%] [-797.4%]
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($ in Billions) % SPLY (1.6%)(7.2%)(3.7%) February YTD FY 2009 Expense by Category
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February YTD FY 2009 Workhours % SPLY
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March Expectations No significant change in economic forecast resulting in continued revenue and volume declines USPS continues to aggressively manage the business Variable workhours declining to partially offset revenue declines
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FY 2008 FY 2009 Quarterly Volume - % SPLY * *Preliminary
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First-Class Mail Volume 8 Quarter Moving Average Growth Rates % SPLY FY 2006FY 2007FY 2008 FY 2009 * *Preliminary
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Standard Mail Volume 8 Quarter Moving Average Growth Rates% SPLY FY 2006FY 2007FY 2008FY 2009 *Preliminary *
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% SPLY8 Quarter Moving Average Growth Rates FY 2006FY 2007FY 2008 FY 2009 Periodicals Volume * *Preliminary
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Bulk Mail Acceptance
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We N WE NEED YOUR HELP!
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Issue Postal Service received Significant Deficiency from external auditor for ineffective financial controls pertaining to Business Mail Acceptance –Timely recognition of revenue –Customer trust balances –Incomplete postage statements Mailer USPS
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Progress to Date BMA Results 16 BMA ItemsFY 2007 FY 2009 (March) Timely Postage Statement Entry77%99% Master Trust Reconciliation87%97% BMA ItemsMetrics September 2008 March 2009 Negative Balances Number of Accounts2,000260 Balance of Accounts$1.7M$413K
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Progress to Date Completion of Postage Statements 17 Control Actual Pass Rate % Periodicals Number of Addressed Pieces Total Postage Owner or Agents Signature Permit Total Postage Signature of Mailer 10 2030405060708090 Completion of Postage StatementsFY 2009 YTD Compliance Rates Periodicals68% Permit38% Target Pass Rate
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SOX and the Role of Our Customers Do not present a mailing with a hard copy postage statement if you submitted one electronically Ensure all sections of postage statements are correct after making changes Verify permit number on the mail matches the postage statement Check that mailing fees and authorizations such as Non- profit are current
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SOX and the Role of Our Customers Provide the required documentation to support the rates claimed on the postage statement Update your mailer profile and ensure your permit is valid Keep your business account active –After 2 years of non-activity your account will expire If you are a publisher - Make sure you file your Statement of Ownership in October Communication is the key – Ask the BMEU for assistance if needed
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FINANCIAL UPDATE Mailers’ Technical Advisory Committee Meeting April 28, 2009 J. Corbett Chief Financial Officer & Executive Vice President
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