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Mailers' Technical Advisory Committee

MTAC. Mailers' Technical Advisory Committee. FINANCIAL PERFORMANCE JANUARY, FY 2005. Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President. Summary: October 1, 2004 - January 31, 2005. Unusually high revenue/volume growth in November

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Mailers' Technical Advisory Committee

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  1. MTAC Mailers' Technical Advisory Committee FINANCIAL PERFORMANCE JANUARY, FY 2005 Richard J. Strasser, Jr. Chief Financial Officer & Executive Vice President

  2. Summary: October 1, 2004-January 31, 2005 • Unusually high revenue/volume growth in November • Slight revenue/volume growth in October and December • Slight revenue/volume decline in January • Increased expenses due to cost inflation and additional volumes and deliveries • High productivity increase held down expenses • Net income below last year, but over plan

  3. Var Actual Plan %Plan SPLY Revenue $5,723 +92 $5,815 +1.6 -0.8% Expense 5,673 5,795 -122 -2.1 +1.8% Net Income $ 143 -$ 72 +215 Numbers may not add due to rounding ($ Millions) Income Statement – January 2005 $ 290

  4. +5.5% Actual SPLY Volume Compared to SPLY +2.8B +3.9% January January Quarter 1 Quarter 1 56.8B 53.8B

  5. Volume - Percent Change to SPLY January YTD +3.9% NOV DEC AUG OCT SEP JAN FY 2005 FY 2004 Quarter 1 +5.5%

  6. Actual Revenue Compared to SPLY – January YTD

  7. Volume Revenue Change FY 2005 Change First-Class 35.1B +0.7% -$40M Standard 34.7B +7.5% +$382M Periodicals 3.0B -0.1% -$2M Express 17.9M +0.6% +$1M 309.9M +2.6% Priority +$38M Package Serv. 416.5M +0.3% -$10M Other 0.6B +16.7% +$131M Total 74.1B +3.9% +$500M VolumeandRevenue - Change toSPLY- Jan YTD

  8. Var Actual Plan %Plan SPLY Revenue $24,602 +3.0 $23,893 +709 +2.1% Expense 22,810 23,041 -231 -1.0 +3.7% Net Income $ 1,792 $ 852 +940 Numbers may not add due to rounding ($ Millions) Income Statement – January Year-to-date $ 2,100

  9. Change From SPLY 1.8M Deliveries – January 2005 Deliveries 143.0M

  10. 2.3M Actual Increased Volume/Deliveries Workhours - Change to SPLY - January YTD 3.4M Savings

  11. Total Factor Productivity Defined TFP Change in Combined Workload Change in Resources Used =

  12. Total Factor Productivity – January YTD Change in Combined Workload TFP = 2.2% 2.6% 0.4% Change in Resources Used

  13. Productivity Components – January YTD 5.9% 5.9% TFP Workload Growth 2.2% Actual Expense Cost Inflation 3.7% 3.3%

  14. * *January YTD Total Factor Productivity Cumulative 1972 – 2005 FY Percent Growth

  15. FY 2004 Forecast Quarter 2 Outlook Volume 51.5B 51.1B Above Forecast Revenue $17.3B $16.6B Expenses +$0.7B Net Income/Loss FY 2005 Quarter 2 – Summary Outlook Above Forecast $17.0B $17.2B Below Forecast -$0.2B Above Forecast

  16. MTAC PL108-18 RATE FILING

  17. PUBLIC LAW 108-18 Escrow Account and Use of “Savings” • Escrow Requirement Recreates Over-Funding • $3.1B Required to Fund FY 2006 Escrow And Annual Funding Requirement Increases to $5.4B in FY 2015 • USPS Recommended Elimination of Escrow Requirement

  18. PUBLIC LAW 108-18 USPS Proposal On “Savings” Preferred - With Military Service Costs Returned to Treasury: • Pre-Fund Postretirement Health Benefit Costs of All Employees and Retirees • Eliminate Escrow Requirement – USPS Would Be Only Agency Pre-Funding Pension and RetireeHealth Benefit Costs

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