Postal Service reports massive $5 billion loss

NEW YORK (CNNMoney) -- The U.S. Postal Service released its annual financial results on Tuesday, and they're nothing to write home about.

The agency reported an annual loss of $5.1 billion, as declining mail volumes and mounting benefit costs take their toll. The Postal Service said its losses would have been roughly $10.6 billion if not for the passage of legislation postponing a $5.5 billion payment required to fund retiree health benefits.

Revenues from First-Class Mail, the Postal Service's largest and most profitable product, declined 6% from the previous fiscal year to $32 billion. Total mail volume declined by 3 billion pieces, or 1.7%.

"The continuing and inevitable electronic migration of First-Class Mail, which provides approximately 49 percent of our revenue, underscores the need to streamline our infrastructure and make changes to our business model," Postal Service CFO Joe Corbett said in a statement accompanying the figures.

Postmaster General and CEO Patrick Donahoe said in the statement that the Postal Service must reduce its annual costs by $20 billion by the end of 2015 to return to profitability.

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