Growth Initiatives Mailing Services

MTAC

February 18, 2010

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Agenda

2009 Summer Sale Recap

2009 First-Class Mail Incentive Update

Proposed 2010 Summer Sale

Future Incentives

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Impact on Customer Volume55% of qualified volume participated in Sale

51% of participating Sale volume grew

2009 Summer Sale

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Preliminary Results

Aggregate view of customers who exceeded volume threshold (512 Growers)

Base Volume

Loyalty Growth

Growth Credited to Sale

2009 Summer Sale

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Preliminary Results*

$ Millions

Incremental Rev. $ 141 Rebate Cost (includes Loyalty rebate) $ 68Net Rev. Growth $ 73 **Summer Sale Cost $ 45Net Contribution $ 28

* Customer volume data who use MSPs still to be finalized

**Attributable costs (assumes summer excess capacity) and program costs.

2009 Summer Sale

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Program Overview 20% rebate on incremental First-Class Mail presort volume

Program period: Oct 1 – Dec 31, 2009

Program eligibility: Mailers with 500K/month for - Oct 1 through Dec 31, 2007 and - Oct 1 through Dec 31 2008

First-Class Mail Incentive 2009

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Participation

■ 918 customers invited to participate in program

■ 515 customers currently in program

■ 443 customers fully certified

■ 72 customers under review

First-Class Mail Incentive 2009

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Program Performance To Date

335 Fully Certified Customer Reviews completed

Incremental revenue $27.4M

Incremental volume 72.2M pieces

First-Class Mail Incentive 2009

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Key Learnings

Incentive program created excitement among customers

Customers however, expressed the need for longer lead time between program announcement and launch

Very few indications of customers shifting volume from Standard Mail

Providing supporting documentation on historical volumes was a challenge for most customers

First-Class Mail Incentive 2009

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Sale Overview

Proposed 2010 Summer Sale

5-Month program: June – October 2010 Sale period: July – Sept Control months: June & October

30% rebate on incremental volume above baseline Standard Mail letters and flats only Customer baseline = SPLY volume + 5% Downward adjustment if June & October volume is below baseline

Customer eligibility Offered to customers who mailed over 350,000 Standard Mail pieces

July 1 - September 30, 2009 Approximately 3,525 customers (67% of Standard Mail volume) MSPs not eligible

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Timeline

■ File Notice with PRC (late February)

■ Invitation to participate mailed (early March)

■ Customers register online and certify agreement with threshold volumes on-line for program participation (March-May)

■ PRC Decision (Mid-April)

■ Sale period (July thru Sept)

■ Rebates to customer accounts (December – January 2011)

2010 Summer Sale

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Future Incentive Programs

■ Develop growth incentives within normal price structure Annual incentives Develop structures that meet market demands

of customers Encourage IMB, address quality, and

operational efficiency