UNITED STATES POSTAL REGULATORY COMMISSION Washington, D.C. 20268 – 0001 FORM 10-Q, For the Quarterly Period Ended DECEMBER 31, 2014.

“Liquidity Concerns – The Postal Service continues to suffer from a lack of liquidity. Cash balances remain insufficient to support an organization with approximately $73 billion in annual operating expenses. The Postal Service’s average daily cash and cash equivalents balances during the three months ended December 31, 2014 were $5.7 billion, which represents only 21 days of operating cash. The Postal Service does not have the ability to borrow additional funds under its existing borrowing arrangements, and this level of cash balances could be insufficient to support operations in the event of another significant downturn in the U.S. economy. The Postal Service incurred a net loss of $754 million for the three months ended December 31, 2014. The loss included $1.4 billion of expense accrued for the prefunding payment for the Postal Service Retiree Health Benefits Fund (“PSRHBF”) mandated by the PAEA. This requirement to prefund retiree health benefit obligations is not imposed on most other federal agencies or private sector businesses. In addition to the requirement to prefund $5.7 billion of retiree health benefits in 2015, the Postal Service continues to pay its employer share of health insurance premiums for its retirees, which was $759 million during the three months ended December 31, 2014.”