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financial review
Part II

Item 5. Market for registrant's common equity and related stockholder matters

Not applicable to this report.

Item 6. Selected financial information

See Financial History Summary on page 50.

Cautionary Statements

Our discussion in the Management Discussion and Analysis represents our best estimate of the trends we know about, the trends we anticipate, and the trends we think are relevant to future operations. However, actual results may be different from our estimates.

TABLE 1. VOLUME (Pieces in millions)
blank % Change
blank 2004 2003 2002 04–03 03–02
First-Class Mail 97,926 99,059 102,379 -1.1% -3.2%
Priority Mail 849 860 998 -1.3% -13.9%
Express Mail 54 56 61 -3.1% -8.9%
Periodicals 9,135 9,320 9,690 -2.0% -3.8%
Standard Mail 95,564 90,492 87,231 5.6% 3.7%
Package Services 1,132 1,129 1,075 0.3% 5.0%
International 844 805 904 4.8% -10.9%
Other* 602 464 484 29.7% -4.1%
Total 206,106 202,185 202,822 1.9% -0.3%

Note: Percentages are calculated based on unrounded numbers.


*Postal Service volume, mailgrams and free matter for the blind are included in the "Other" category.


TABLE 2. REVENUE (Dollars in millions)
blank % Change
blank 2004 2003 2002 04–03 03–02
First-Class Mail $36,377 $37,048 $36,483 -1.8% 1.5%
Priority Mail 4,421 4,494 4,722 -1.6% -4.8%
Express Mail 853 888 910 -4.0% -2.5%
Periodicals 2,192 2,235 2,165 -1.9% 3.2%
Standard Mail 18,123 17,231 15,819 5.2% 8.9%
Package Services 2,207 2,216 2,080 -0.4% 6.5%
International 1,696 1,587 1,580 6.9% 0.5%
Other* 3,160 3,065 2,929 3.1% 4.6%
Total $69,029 $68,764 $66,688 0.4% 3.1%

Note: Percentages are calculated based on unrounded numbers.


*Mailgrams are included in the "Other" category as are special service revenues, other income and investment income.

Certain forward-looking statements are included in this report. They use such words as "may," "will," "expect," "believe," "plan," and other similar terminology. These statements reflect our current expectations regarding future events and operating performance and speak only as of the date of this report. These forward-looking statements involve a number of risks and uncertainties.

The following are some of the factors that could cause actual results to differ materially from those expressed in or underlying our forward-looking statements: effectiveness of operating initiatives; success in advertising and promotional efforts; changes in national and local business and economic conditions, including their impact on consumer and business confidence; fluctuations in currency exchange and interest rates; labor and other operating costs; oil, fuel and other transportation costs; the effects of war and terrorist activities; competition, including pricing and marketing initiatives and new product offerings by our competitors; consumer preferences or perceptions concerning our product offerings; spending patterns and demographic trends; availability of qualified personnel; severe weather conditions; effects of legal claims; cost and deployment of capital; changes in laws and regulations; and changes in applicable accounting policies and practices. The forgoing list of important factors is not all-inclusive.

We have no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.