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FINANCIAL UPDATEMailers’ Technical Advisory Committee
Meeting
April 29, 2009
J. CorbettChief Financial Officer &Executive Vice President
Economy-Business Impact
Global Insight's Baseline Forecasts for FY 2009
*Mailing Services Only
**In Millions
Jan-08 Aug-08 Dec-08 Mar-09 Apr-09
GDP 2.3% 0.7% -1.7% -3.2% -3.0%Retail Sales 1.4% -1.6% -7.5% -9.9% -9.3%Employment 1.1% -0.6% -2.2% -3.8% -3.9%Investment 1.7% -3.8% -16.4% -21.5% -21.2%CPI-U 1.4% 4.1% -1.1% -1.2% -0.8%Rate Assumptions* 2.9% 4.8% 3.8% 3.8% 3.8%
USPS Volume** 205,265 194,528 189,571 180,000 180,000
Revenue $2.8 Billion Below SPLY
Revenue $2.8 Billion Below SPLY
Expenses $0.8 Billion Below SPLY
Expenses $0.8 Billion Below SPLY
Net Income $2.0 Billion Below SPLY
Net Income $2.0 Billion Below SPLY
February YTD FY 2009 SPLY Financial Results
* Numbers may not add due to rounding
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-$ 1,797Net Loss -773 32,784 32,011Expense
[-$2,828]$33,041$30,214Revenue
-2.4%
[-8.6%]
[-797.4%]
$25,921 79.1%
$3,932 12.6%
$2,719 8.3%
Total Personel Comp Transportation Other
($ in Billions)
% SPLY (1.6%) (7.2%) (3.7%)
February YTD FY 2009 Expense by Category
-12.1%
-14.0%-12.3%
-4.9%-6.2%
-5.1%
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
Mail Volume Mail Processing
CustomerService
Rural Delivery
City Delivery
Other
February YTD FY 2009 Workhours % SPLY
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
-3.1% -3.2%
-5.6%-6.4%
-9.3%
-14.7%
-2.1%
-4.8%
-2.0%
-4.9%
-10.5%
-15.9%
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2
Mailing Services Shipping ServicesFY 2008 FY 2009
Quarterly Volume - % SPLY
*
*Preliminary
-2.6% -3.1%
-9.9%
-7.2%-5.5%
-3.9%
-1.3%-2.5%
-0.8% -0.1%
1.2%1.6%
-6.9%
Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2
First-Class Mail Volume
8 Quarter Moving Average Growth Rates% SPLY
FY 2006 FY 2007 FY 2008 FY 2009
*
*Preliminary
-19.8%
1.2%2.7%
-6.1%-5.5%
-11.0%
-1.4%-0.9%
0.2%2.8%
4.9%
-2.6% -3.0%
Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2
Standard Mail Volume
8 Quarter Moving Average Growth Rates% SPLY
FY 2006 FY 2007 FY 2008 FY 2009
*Preliminary
*
% SPLY 8 Quarter Moving Average Growth Rates
FY 2006 FY 2007 FY 2008 FY 2009
-2.2%
-7.8%
0.3%
-2.2%
-3.3%-3.5%
-2.6%
-0.5%
0.1%
-0.6%
-5.3%
1.2%
-4.3%
Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2
Periodicals Volume
*
*Preliminary
Bulk Mail Acceptance
We N
WE NEED YOUR HELP!
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
Progress to DateBMA Results
16
BMA Items FY 2007FY 2009 (March)
Timely Postage Statement Entry 77% 99%
Master Trust Reconciliation 87% 97%
BMA Items MetricsSeptember
2008March 2009
Negative Balances
Number of Accounts 2,000 260
Balance of Accounts $1.7M $413K
Progress to DateCompletion of Postage Statements
Control Actual Pass Rate %
Periodicals
Number of Addressed Pieces
Total Postage
Owner or Agents Signature
Permit
Total Postage
Signature of Mailer
10 20 30 40 50 60 70 80 90
Completion of Postage Statements FY 2009 YTD Compliance Rates
Periodicals 68%
Permit 38% Target Pass Rate
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
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
FINANCIAL UPDATEMailers’ Technical Advisory
Committee Meeting
April 28, 2009
J. CorbettChief Financial Officer &Executive Vice President