A_JUICEDROP_280
FY 2008 Year End Review
MTAC
November 19, 2008
   H. Glen Walker
Chief Financial Officer & Executive Vice President
 
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 External Environment
Massive deterioration in the housing andfinancial sectors
The decline in these sectors impactedmany other areas of the economy,accelerating the decline
Inflation, driven by fuel prices, increaseddramatically until the very end of the year
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Volume dropped 9.5 billion pieces from2008
High Postal cost inflation driven by fuelprices and Wages Cost of LivingAdjustments (COLA)
Internal Environment
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USPS Response
Cost reduction of $2.2B vs. planned $1B
Record service levels
Record customer satisfaction levels
New marketing organization focused onprofitable growth
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 FY 2008 Financial Results
[ ] = Unfavorable variance to SPLY
Numbers may not add due to rounding.
(Data in Millions)
   -$422
$  3,216
$2,794
Operating Income (2)
   417
  71,757
 72,174
Expense (1)
 [-5]
$74,973
$74,968
Revenue
Var
SPLY
Actual
[-9,531]
212,234
202,703
Volume
    0.6%
0.0%
%SPLY
  [-4.5%]
RHBF Payments
Net Loss
$5,600
-$2,806
(1) Excluding RHBF Payments
(2) Before RHBF Payments
$8,358
-$5,142
   $2,336
   -$2,758
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FY 2008 VolumePerformance to SPLY
91.7B
99.1B
8.6B
1.6B
202.7B
1.7B
201.1B
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Total Mail Volume
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8
First-Class Mail Volume
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9
Standard Mail Volume
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10
Periodicals Mail Volume
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11
First-Class Mail Volume By Shape
Growth from SPLY
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Standard Mail Volume By Shape
Growth from SPLY
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Expense Drivers ofVariance To SPLY
$ in Millions
Compensation & Benefits
-$601
Total Expense Variance
Other Expenses
   392
$417
Transportation
459
Depreciation
167
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Total WorkhourSavings
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15
 
Outstanding Debt and Cumulative RHBF Payments
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 FY 2008 Summary
Financially challenging year
Volumes down and cost inflation updriven by fuel and labor costs
Revenue flat on last year
Managed by reducing costs $2.2B
Focus on customer service
Organized and focused on growthopportunities
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FY 2009 Outlook
No economic recovery anticipated
Continued volume declines  8 billionpieces
Carryover impact to 2009 from risinginflation in 2008 as well as increases towages and benefits
Focus on service to our customers andopportunities for growth
Focus on unprecedented across theboard cost reductions
A_JUICEDROP_280
FY 2008 Year End Review
MTAC
November 19, 2008
   H. Glen Walker
Chief Financial Officer & Executive Vice President