Washington, D.C. - The Governors of the U.S. Postal Service today allowed under protest the 34-cent First-Class postage stamp rate and other postage increases recommended by the Postal Rate Commission. Rates will increase on January 7, 2001. The Postal Service anticipates a smooth transition to the new rates based on preparations that have been underway since it first requested an increase last year. In other financial news, the agency reported a loss of $199 million for fiscal year 2000. Despite the financial loss, postal officials say the financials show a highly successful year against many challenges, including unforeseen fuel expenses; the addition of 1.7 million new addresses; and the reduction of 6,200 workyears. Against these factors, the agency also posted record productivity gains and an overall mail volume growth rate of 3.1 percent or 6.2 billion additional pieces of mail. A record 208 billion pieces of mail was delivered by the Postal Service last year. "We were successful in driving down costs to match lower than expected revenues and achieved year end results that are near breakeven," said Richard J. Strasser, Jr., executive vice president and chief financial officer. Highlights of the income statement, which were independently audited by the Board's auditors Ernst & Young, L.L.P., include: * Operating revenues of $64.5 billion * Operating Expenses of $63 billion * Income from operations of $1.5 billion * Net interest on deferred retirement and borrowings of $1.7 billion, resulting in * Net loss of $199 million. In accepting the audited financial statement, the Board reiterated its call for postal reform. The Board maintains that the laws governing the Postal Service, including pricing flexibility, have to change if the Postal Service is going to continue maintaining high quality universal service.