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Our Results Financial performance reflects strategic direction
Moodys revenues and operating income have been characterized by high rates of growth. Whats more, that growth has been achieved with a degree of stability that is unusual among rapidly growing companies. Since 1981, Moodys has increased both revenue and operating income by an average of 17% annually. In addition, our growth has been markedly consistent from year to year. Annual increases in revenue were registered in 19 of the last 20 years; operating income grew in 16 of the last 20 years. This combination of strength and consistency reflects both robust demand for our products and success in implementing our strategies.
As our revenue has grown, it has become increasingly diversified across lines of business and geography. Of our five principal business segments, no area accounted for more than one-third of total revenue last year. As the asset securitization markets have grown, structured finance has become our largest business, followed closely by corporate finance. Geographically, a majority of Moodys revenues are generated in the United States. However, our most important growth is being realized outside the US. Europe, for example, has become a major source of revenue as monetary union drives the creation of a pan-European capital market. Of Moodys total revenues in 2000, 29% were from non-US sources, a significant increase from the 18% share just three years earlier.
To address volatility in fixed-income securities issuance, Moodys has in recent years emphasized annual fee arrangements over transaction-based pricing. Together with business line and geographic diversification, this relationship-based pricing for our largest clients affords greater stability of revenues in the rating business. Fully 50% of our revenues are now generated from sources other than rating fees on individual bond issues up sharply from 7% a decade ago. Relationship-based rating fees now represent over one-third of Moodys total revenue, while research sales and other non-rating businesses account for almost 15% of the total.
Moodys generates substantial cash flow from operations. Historically, all of this free cash flow over $1 billion of pre-tax operating cash flow for the 1997 to 2000 period was distributed to our parent company. Now as an independent company, Moodys Corporation has direct control over this considerable cash generation. It will be used to finance the important strategic initiatives that we believe will deliver more revenue and operating income growth and to fund our stock repurchase program which returns excess capital to our shareholders.
A variety of financial measures underscore Moodys success in capitalizing on the health of our core markets through careful execution of well-conceived strategies. That success is perhaps most evident in our steady improvements in pro-forma earnings per share, which have grown by 75% since 1997.
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