1. Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President

2. Work Hours % Change FINANCIAL UPDATE

3. Cumulative Work Hour Reductions -34M -111M -117M FINANCIAL UPDATE

4. AP FY 2002FY 2000FY 2001FY 2003 Data Does Not Include IG, PM Relief & Rural Sub/RCR 797,408 Career Employees 748,390 Career Employees Complement Trend FY 2000 – FY 2003 FINANCIAL UPDATE

5. Total Delivery Trend FY 2001FY 2002FY 2000 (Data in Millions)Note: AMS Data - City, Rural, PO Box, HCR 5.6M Delivery Increase FY 2003 139.7M 134.1M FINANCIAL UPDATE

6. Total Mail Volume FY 2000 207.9B pieces FY 2003 Plan 205.7B pieces FINANCIAL UPDATE

7. CIVIL SERVICE RETIREMENT SYSTEM (CSRS)  “Defined Benefit” (30 years ≈ 60% Salary, Plus Annual CPI Incr.)  Contributions (Payments) Employee 7% Agency 7%  Estimated Actual Cost = 24.4%

8. Payments In (Including Interest) Unfunded (Annuities Including CPI Increase Annually) Payments Out CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

9. “Defined Benefit” - Smaller Total Annuity Social Security Thrift Savings (e.g. 401K) Employees 7% Min 19% Max Contributions (Payments) Agencies17.9% Min21.9% Max Fully Funded! FEDERAL EMPLOYEES RETIREMENT SYSTEM FERS - 1987

10. USPS Portion  1974 Law – USPS Will Pay for Full Annuity (Any Pay Increases Generated Increased Annuity Payments)  USPS Pay Over 30 years at 5% Interest  OBRA: 1990 – 1993 Added All Increases in Annuities (CPI) to Pay 15 years at 5% CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

11. Current USPS Employees  CSRS 240K  FERS 510K CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

12. $243.6B Future USPS Payments & Employee Contribution Current Fund Balance Amount Required USPS Portion - FY 2002 Dollars Potential Over Funding $71B CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

13. Current Fund Balance Amount Required $20.5B Funding Required USPS Portion – FY 2002 Dollars CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

14. FY 2003 Budget Current Employees (7%)$ 734 M 30 Year Payments 2,689 M 15 Year Payments 1,284 M Total$ 4,707 M Proposed Current Employees (17.4%)$ 1,800 M $ 2.9 B CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

15. FY 2004 Forecast Current Employees (7%)$ 702 M 30 Year Payments 2,655 M 15 Year Payments 1,382 M Total$ 4,739 M Proposed Current Employees (17.4%)$ 1,721 M 40 Year Payments 400 M Total $ 2.6 B CIVIL SERVICE RETIREMENT SYSTEM (CSRS)

16. Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President