NOTE 5 — SUBSEQUENT EVENTS

On October 1, 2009, the President signed P.L. 111-68. This law, which was made retroactive to December 20, 2006, amended P.L. 109-435 by changing the required Postal Service payments to the PSRHBF for the year ended September 30, 2009 from $5.4 billion to $1.4 billion. Although the legislation was passed by Congress on September 30, 2009, it did not become law until the President signed it on October 1, 2009, one day after our year end. As evidenced by its inclusion in the continuing resolution that was necessary to keep the government operating, both houses of Congress and the President had agreed to the provision prior to our fiscal year end and had intended for the adjustment to be a 2009 event. The Office of Personnel Management, to whom the PSRHBF payment was owed, had adjusted their expected payment to $1.4 billion at September 30, 2009. Accordingly, we have determined that the adjustment to the September 30, 2009 required payment (and related expense) should be recorded as a subsequent event, in accordance with ASC 855 (formerly FAS 165, Subsequent Events). Therefore, the impact of this legislation is reflected as a reduction in expense in our 2009 financial statements and footnotes. The legislation affected only 2009 and is therefore not necessarily indicative of the amount of likely future PSRHBF payments. See Note 10, Health Benefit Programs, in the Notes to the Financial Statements, for additional information.