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FOOTER (10PT. ARIAL, BOLD, GREY, CAPS) TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE) Subtitle (20pt. Arial, Bold, Title Case) Network Realignment Announcement May 17, 2012

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Page 1: TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL …...TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE) Subtitle (20pt. Arial, Bold, Title Case) For inquiries after the webinar,

FOOTER (10PT. ARIAL, BOLD, GREY, CAPS)

TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE)

Subtitle (20pt. Arial, Bold, Title Case)

Network Realignment Announcement

May 17, 2012

Page 2: TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL …...TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE) Subtitle (20pt. Arial, Bold, Title Case) For inquiries after the webinar,

2

Announcements

PHASED NETWORK CONSOLIDATION

MODIFIED SERVICE STANDARD CHANGE

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Mail Volume Shifting to a Less Profitable Mix

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Volume in Billions of Pieces

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NETWORK CAPACITY

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DECREASE IN PROCESSING LOCATIONS THROUGH 2014

Plant Consolidation

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PROCEEDING WITH CONSOLIDATIONS OVER A LONGER TIME SPAN

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Path Forward

Summer 2012: Phase 1 Begins

Consolidating activity at 48 locations within schedule constraints

Spring 2013: Phase 1 Concludes

Consolidating activity at 140 locations; $1.2B in annual savings

Spring 2014: Phase 2

Consolidating activity at 89 locations; $2.1B combined savings

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Announced September 15, 2011 New Plan May 17, 2012

Change in Implementation Timing

CONSOLIDATING ACTIVITIES AT MAIL PROCESSING LOCATIONS

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Consolidation activity at 48 locations Equipment and employee moves to

Realigned transportation model eliminates multiple overnight trips 5,000 employees to receive notifications next week

Consolidation Activity This Year

LIMITED ACTIVITY THIS SUMMER

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PREVIOUS TIMELINE

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2012 2014 2013

New Timeline

Feb. 2012 Feb. 2013 264 locations

Phase 1: Aug. 2012 48 locations

REVISED TIMELINE: MAY 17, 2012

Phase 1: 2013 92 locations

Phase 2: 2014 89 locations

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Extended Timeline

Responsible Cost Reduction

Schedule Constraints

Meeting cost reduction goals while maintaining excellent service performance

Providing customers and employees adequate time to plan and adapt to new footprint

Modest implementation summer 2012 due to compressed window

NEW APPROACH BASED ON:

Conclusion

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Changes to Service Standard

Final Rule Submitted to Federal Register tomorrow Maintains overnight service for areas served by local mail processing facility Preserves 80% of overnight delivery volume Enables consolidating activity at 140 facilities

Post-2014: Revised entry times for overnight

INTERIM SERVICE STANDARD CHANGE

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Methodical, measured transition Options available for staying with the Postal Service Intention to provide rolling incentives Reducing 28,000 positions, 158,000 employees retirement eligible Proven track record of avoiding lay-offs; success through attrition

Employees

OUR COMMITMENT TO EMPLOYEES

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Extended, multi-phase approach Compressed activity in Summer 2012 Adequate planning time

Measured Implementation

Customers support network changes Helps preserve affordability of mail Customers will continue to utilize mail

Meeting Customer

Needs

Saves $2.1 billion dollars annually Consistent with five-year plan Helps return Postal Service to financial stability

Achieves Savings

Conclusion

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FOOTER (10PT. ARIAL, BOLD, GREY, CAPS)

TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE)

Subtitle (20pt. Arial, Bold, Title Case)

For inquiries after the webinar, please contact:

David Partenheimer [email protected] or call the media line at (202) 268-2155