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Our strengthened financial position results directly from our dedication to the strategies we established in our 2002 Transformation Plan. Increasing productivity and efficiency in all areas of our operations has allowed us to take costs out of the system, reduce debt, and improve customer service.
I am pleased to report a net income of $3.1 billion and a new financial achievement for the independently financed Postal Service. In 2004, we recovered all prior years' losses and, for the first time since postal reorganization, ended the fiscal year with positive retained earnings.
Our strengthened financial position results directly from our dedication to the strategies we established in our 2002 Transformation Plan. Increasing productivity and efficiency in all areas of our operations have allowed us to take costs out of the system, reduce debt, and improve customer service.This year marked the fifth consecutive year in which we have achieved productivity gains, which are equivalent to approximately $6.1 billion in cost savings. In 2004, we reduced total workhours by 21 million, our fifth straight year of workhour reductions. Through productivity gains and attrition, we have reduced our total complement to pre-1985 levels. Most tellingly, since 1984, total delivery points have increased by 37% or 33 million and total mail volume increased 57% or 75 billion pieces. Yet, as the independently measured First-Class Mail delivery service scores attest, this year we delivered on-time service to postal customers at the highest levels of performance in our history.
We continue to achieve our financial management goals. With this year's greater than anticipated cash flow from operations, and reduced capital cash outlays, we paid down our debt by $5.5 billion, to $1.8 billion. This is a 75% reduction from last year's debt level and the lowest level of debt since 1984.
We have also made significant improvements to our financial reporting. On a voluntary basis, we have adopted SEC-type reporting and now issue 8-K, 10-K and 10-Q-type reports. We have expanded our Management Discussion and Analysis to provide more detailed and more forward-looking information in both our quarterly and annual reports. These reports are posted, as they are issued, on our universal access public website, usps.com.
Despite these exceptional achievements in business operations and financial management, we must confront deepening structural change in our industry that clouds our financial prospects. Our statutory business model centers upon our historical flagship product, First-Class Mail. Because it enjoyed the highest volumes and normally grew every year, and because it provided the highest margin over costs, covering over two-thirds of our institutional costs, First-Class Mail has financed most of our cost of providing universal service to every address in our ever-expanding delivery network. Impacted by electronic diversion, First-Class Mail volume