Walking In Two Worlds With One SpiritMALRUGNI YUULUNI

A LOOK AT SELECTED DATA FOR 13 NATIVE REGIONAL CORPORATIONS AND 28 NATIVE VILLAGE CORPORATIONS

COPYRIGHT 2005 BY THE ASSOCIATION OF ANCSA REGIONAL CORPORATION PRESIDENTS/CEOs • All rights reserved.

ANNUAL ECONOMIC REPORTBASED ON 2003 FINANCIAL DATA

Letter From Sheri Buretta 3-4

Executive Summary 6

Introduction 6

Putting It In Perspective 7-12

Financial Overview 13-14

Revenue

Net Income And Shareholders’ Equity

Assets

Dividends

Employment 15

A Legacy Of Philanthropy 18

Conclusion 20

Acknowledgements

About The Editors

Works Cited 21

Suggested Reference 21

TABLE OF CONTENTS

Alaska Native Corporations have had and continue to havea major impact on Alaska’s economy.

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Welcome to the fifth annual report by the Association of the ANCSA Presidents and CEOs on the Alaska Native Corporations’ tremendous impact upon Alaska’s economy. We believe this report, which compiles data on participating corporations from throughout Alaska, offers valuable insight into who we are and what we are doing. First, who we are. . .we are Inupiaq, Yup’ik, Cup’ik, Siberian Yupik, Tlingit, Haida, Tsimshian, Eyak, Athabascan, Aleut, and Alutiiq. We are the indigenous people of Alaska. For over 10,000 years our ancestors have lived and thrived in one of the harshest areas of the world. We are the last remaining indigenous people in the United States to have never been forcibly removed from our homelands and settled in reservations. We have more than 230 small villages scattered in the largest land mass contained in one state of the union. The residents of many of these Native villages depend on subsistence hunting and fishing to sustain their bodies as well as their traditions and cultures. In 1960, over 64 percent of our people lived on incomes below the federal poverty level. By 1970, 39 percent of Alaska Natives lived below the federal poverty level. In 1971, our land claims were settled, and we embarked on a new course, integrating ourselves into the cash economy with corporate structures to build an economic base for our people. We are encouraged to say the poverty rate has been reduced to 20 percent, but there are still disparities between Alaska Natives and other Alaskans that deserve focused attention. We are very proud of the collective efficiency of our Alaska Native Corporations to improve the

lives of our people. In 1971, the United States Congress settled the land claims of Alaska’s Native people utilizing the corporate structure to manage both the land and cash. It was considered a great experiment in capitalism, providing a basis to develop economic self-sufficiency. Our Alaska Native Corporations, known as ANCs, have matured a great deal in the last 34 years. ANCs have become the main vessel for our people to compete in the marketplace. They are the economic engines charged with creating economic value and opportunities in our homelands, employing our people, and supporting social and cultural programs important to our people. ANCs also are engaged in the larger economic arena to capture new technologies, build greater capacities in management and labor, and transform the way we do business. While each ANC is unique, we strive to work together, cooperating on key issues affecting Alaska’s indigenous people. The traditional model provided to us by our Elders is one of knowing that the needs of the group take precedence over the needs of the individual. It is this key difference that many people outside the Alaska Native community find so difficult to understand. As Alaska Natives, we never forget that each one of us is part of something larger than ourselves. It is this knowledge that has brought all of us together, even groups that many years ago were traditional enemies. As an example, the leaders of the Alaska Native Regional Corporations work together as a team in many arenas, including the Association of ANCSA Regional Corporation Presidents and CEOs.

This organization was created to foster leadership and teamwork among Native leaders, and it is with great humility that I have accepted the position of president of this organization. I am the first woman to hold this position, and I am following in the footsteps of Carl Marrs, former President/CEO of Cook Inlet Region, Inc. He is a leader for whom I have the highest regard. I know that all of our work is of vital importance to Alaska Natives and the entire state as well. Our focus this year is on Government Contracting because we believe there is a great deal of misunderstanding of Alaska Native Corporations in general. We participate in the federal contracting marketplace through one key method: the Small Business Administration’s 8(a) Program. By statute and regulation, the 8(a) Program allows our companies to develop businesses over time by building expertise through government contracts. Given that we have hundreds (and often thousands) of owners or members of each Tribe or Alaska Native Corporation, the profits we earn are dispersed over a wider group of people than in a typical 8(a) company. We do this because we were created by the U.S. Congress to have a dual responsibility, to provide for our people’s social and economic needs and build for them a sustainable future. It is an enormous undertaking that is still progressing. This 8(a) Program is helping us to bring economic self-sufficiency to our people, many of whom still live in Third World conditions, lacking the most basic amenities of even sewer and water. We are building our businesses for one key reason: to improve the lives of our Tribal members and Alaska Native

Corporation shareholders. The federal government has a special trust relationship with Native Americans and the indigenous people of Alaska. It is rooted in the U.S. Constitution wherein Congress is granted authority to regulate commerce with the Tribes. Two hundred years of court cases have strongly affirmed this trust relationship and congressional responsibility. Nonetheless, the Federal Government’s numerous attempts to work with or assist the Native populations have often fallen terribly short of expectations. The government contracting rules that help us are an obvious exception to those failures. The good news

is that Alaska Native Corporations and other Tribal organizations are showing success in doing exactly what Congress intended, finally building sustainable businesses that train our people, return a profit to our owners, educate Native children and push our communities out of poverty. The Alaska Native Corporation story is an incredible story we are very happy to share.

Sincerely,

Sheri BurettaPresident, Association of ANCSA Regional Corporation Presidents/CEOs

Sheri Buretta is the Chairman of the Board

of Chugach Alaska Corporation. Prior to

her service as chairman, she has served

as a tribal development coordinator for

Chugachmiut, Inc., Chugach’s non-profit

arm. She also has served on a number of

boards, including serving as co-chair of the

United Way Fundraising Campaign for 2003.

She currently serves on the ROSSIA (Russian

Orthodox Sacred Sites in Alaska, Inc.) Board,

and previously served on the Exxon Valdez Oil

Spill Public Advisory Group. She was born in

Anchorage, and her family is from Tatitlek, a

small village located in Prince William Sound.

She graduated from the University of Alaska

with an accounting degree.

A LETTER FROM SHERI BURETTA

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EXECUTIVE SUMMARY This report is a summary of Alaska Native Corporations’ progress and their contributions to the state, covering economic growth, employment, and philanthropy. Highlights of the 2003 combined findings for the 13 Regional Corporations and 28 Village Corporations surveyed include the following:• Revenue of $2.9 billion and assets of $2.8 billion• $78 million in dividends• Statewide employment of 10,541• Alaska Native employment of 2,685• $7 million donated to charitable organizations• $4.2 million distributed for scholarships to 2,575 recipients

INTRODUCTION This report includes data from the 12 Regional Corporations within Alaska, The 13th Regional Corporation, based in Seattle, and 28 Village Corporations, some with significant gross revenues. The Regional Corporations include:• Ahtna, Inc.• The Aleut Corporation• Arctic Slope Regional Corporation• Bering Straits Native Corporation• Bristol Bay Native Corporation• Calista Corporation• Chugach Alaska Corporation• CIRI• Doyon, Limited• Koniag, Inc.• NANA Regional Corporation, Inc.• Sealaska Corporation• The 13th Regional Corporation The 28 Village Corporations include:• Bean Ridge Corporation (Manley Hot Springs)• Bethel Native Corporation (Bethel)• Cape Fox Corporation (Saxman)• Chenega Corporation (Chenega)• Cully Corporation (Point Lay)• Eklutna, Inc. (Eklutna)• Gana-A’Yoo, Limited (Galena, Kaltag, Koyukuk, Nulato)

• Haida Corporation (Hydaburg)• Inalik Native Corporation (Diomede)• Isanotski Corporation (False Pass)• Kikiktagruk Inupiat Corporation (Kotzebue)• Kootznoowoo, Inc. (Angoon)• K’oyitl’ots’ina, Limited (Alatna, Allakaket, Hughes, Huslia)

• The Kuskokwim Corporation (Anik, Chuathbaluk, Crooked Creek, Georgetown, Lower Kalskag, Napaimute, Red Devil, Sleetmute, Stony River, Upper Kalskag)• Kuukpik Corporation (Nuiqsut)• Lime Village, Inc. (Lime Village)• MTNT, Limited (McGrath, Nikolai, Takotna, Telida)• Nerklikmute Native Corporation (Andreafski)• Ounalashka Corporation (Unalaska)• Ouzinkie Native Corporation (Ouzinkie)• Pedro Bay Corporation (Pedro Bay)• Salamatof Native Association, Inc. (Salamatof)• Shaan-Seet, Inc. (Craig)• Shaktoolik Native Corporation (Shaktoolik)• Shee Atiká, Inc. (Sitka)*• Sitnasuak Native Corporation (Nome)• Toghotthele Corporation (Nenana)• Ukpeagvik Iñupiat Corporation (Barrow)

*Urban corporation representing Alaska Natives living in Sitka. (Included are all the Alaska Native Corporations that provided data to us.)

Since our goal is to measure the overall economic impact Alaska Native Corporations have on Alaska, over time, we hope to include as

many Village Corporations as possible in our report. An important measure of the corporate impact on Alaska is philanthropy. Together, the 41 corporations included in our report made charitable donations totaling $7 million. In addition, the

corporations donated $4.2 million for scholarships targeting 2,575 Alaska Native students. Another important yardstick is dividends paid. Total dividends paid out to shareholders by the 41 corporations for 2003 alone were $78 million. Such substantial contributions to charities in Alaska, to scholarships for Alaska Native students, and to Alaska Native Corporation shareholders through dividends provide a glimpse of the very significant impact Alaska Native Corporations have on the Alaska economy. It is the intent of this report to highlight key corporate and financial data that clearly indicate this impact. A number of studies in the past have attempted to outline regional or statewide Alaska Native Corporation performance. Although valuable contributions have been made to the public understanding of Alaska Native Corporations’ importance in Alaska, there has been a dramatic shift over the last decade that until recently has not been documented collectively. This report is the fifth annual endeavor to gather specific data from each of the corporations’ annual reports, as well as selected information gathered in interviews and surveys.

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WHAT ARE ALASKA NATIVE CORPORATIONS? Alaska Native Corporations were created under the Alaska Native Claims Settlement Act (ANCSA), passed by Congress on December 18, 1971. Since their inception the corporations have become powerful economic engines in the Alaska economy. In the year 2003, 41 Alaska Native Regional Corporations and Village Corporations had a combined revenue of $2.9 billion. ANCSA authorized creation of 12 Regional Corporations within Alaska, along with over 200 Village Corporations. The 13th Regional Corporation was formed four years later for Eskimo, Aleut and all Indian groups of Alaska Natives living outside the state of Alaska. The 13th Region was granted only cash from ANCSA, no land or revenue sharing as were the original 12 Regional Corporations. Management of The 13th Regional Corporation eventually hopes to have more of a presence in Alaska. While some Village Corporations are major businesses in the Alaska economy and are involved in

endeavors throughout the United States, generally speaking they are smaller than Regional Corporations and are less visible in the economy. There are currently a total of 169 Village Corporations and four urban corporations (Juneau, Kenai, Kodiak and Sitka) operating in Alaska. These are the corporations remaining after a number of villages merged either into their region or with each other.

WHAT DO ALASKA NATIVE CORPORATIONS DO? Today, more than three decades after their creation, Alaska Native Corporations exert a profound effect on the Alaska economy. Business endeavors run the gamut in Alaska from real estate and natural resource development to construction, tourism, and retail operations. Additionally, many of the corporations have invested in a wide range of businesses outside Alaska. In 2003, Alaska Native Corporations continued the trend that they have been following—focusing much of their attention on joint ventures and partnerships in both the government and private

sectors. For example, more and more Alaska Native Corporations are participating in the Small Business Administration’s 8(a) Program, which often brings in significant revenue but relatively thin profit margins. New investments by the Alaska Native Corporations mirrored the mainstays of prior years. Major lines of business include construction, real estate development, oil field services, and tourism, with tourism becoming increasingly important. In the last several years, there has been a notable increase in the amount of work Alaska Native Corporations do for the federal government both inside Alaska and in the Lower 48. For example, the Chugach family consists of eight subsidiaries and several joint ventures with nearly 6,000 employees worldwide and revenues in 2003 of over $547 million. The corporations’ importance and influence continue to grow at an exponential rate, giving them a powerful political voice in the state. At the same time, the corporations concern themselves with the social needs of Alaska Natives, as well as their economic well-being.

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“ There is no ‘I’ in the corporation, it’s all ‘we.’ And if we can pass that on to the people that you have, everything’s going to work smoothly. That’s how I feel. We have a real decent board at Tikigaq. If you look around the table, there are a lot of whaling captains, because they are well respected.”

PUTTING IT IN PERSPECTIVE

–Rex Rock, Point Hope, Growing Up Native in Alaska

NATIVE CONTROL OF NATIVE LAND The Alaska Native Claims Settlement Act (ANCSA) was the first real settlement between Native Americans and the federal government in which Natives were allowed to exercise self-determination. Previous treaties and settlements involved land and assets held in trust for Native people by the federal government and controlled by the Bureau of Indian Affairs. The 44 million acres of land retained by Alaska Natives and the nearly $1 billion granted to Native people are controlled by Native boards of directors of Alaska Native Corporations, and they have complete control over their assets. Although Alaska Natives had filed claims to virtually the entire state, through ANCSA, Native people retained about 10 percent of the land in the state. By contrast, the State of Alaska was granted 104 million acres of land in

the Statehood Act and the federal government controls more than 230 million acres of land, which means that together the state and federal governments control more than 85 percent of Alaska. Some Alaska Native Corporations are still waiting for completion of the land conveyance. Doyon, Limited, which retained the most land under ANCSA, is still waiting for final conveyance of about 2 million acres of its 12.5-million-acre land entitlement, according to Orie Williams, Doyon President/CEO. Williams has noted that the Association of ANCSA Regional Corporation Presidents/CEOs is working with federal government and congressional leaders to ensure that final conveyance would be completed to all Alaska Native Corporations by 2009. “This would finally allow the state’s largest private landowners (the Alaska Native Regional and Village Corporations) and the State of Alaska to know one another’s final boundaries and, after almost 40 years, ownership issues could be resolved,” he said. The grant of cash to Alaska Natives sounds generous, but the nearly $1 billion was distributed over a period of about 11 years, at a time when inflation significantly reduced the value of the money. Additionally, the money went to Native Regional Corporations, Village Corporations and even individual shareholders, and so the Regional Corporations only retained about $500 million in “seed money.”

WHAT IS UNIQUE ABOUT ALASKA NATIVE CORPORATIONS? There are some unique differences between Alaska Native Corporations and other corporations in Alaska.

An unusual aspect of ANCSA is the revenue sharing required of Alaska Native Corporations under Section 7(i) of the Act which requires Alaska Native Regional Corporations to share 70 percent of their resource revenues on ANCSA lands with the Native Regional and Village Corporations. This is a significant and striking requirement within ANCSA, and it’s remarkable that the Native leadership eventually found a way to make it work over the years. It continues to work well, and over the last three decades, more than $500 million has been shared. Another important distinction between Alaska Native Corporations and other corporations is that Alaska Native Corporation stock is inalienable. While a corporation’s shareholders could vote to lift restrictions on the sale of stock, so far none have done so.

THERE IS A NATURAL TENSION BETWEEN ECONOMIC AND SOCIAL NEEDS Section 2(b) of ANCSA called for the settlement with Alaska Natives to be “accomplished. . .in conformity with the real economic and social needs of Natives.” Even at the earliest stages of the development of the Act, people had grave concerns about how to mix social welfare objectives withcorporate goals. There is a very real tension created by the need to focus both on economic and social needs of Alaska Natives. All Alaska Native Corporation leaders struggle with this tension literally every single day.

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8(a): LEVELING THE PLAYING FIELD The SBA 8(a) Program levels the playing field for some of America’s most impoverished groups so we can compete in the U.S. economy. In 2003, Alaska Native Corporations joined with Tribes to form the Native American Contractors Association, a non-profit organization committed to educating the public, media, and policy makers about the unique traditional and statutory relationship between Alaska Native Corporations and the federal government which has led to our participation in the 8(a) Program. The 8(a) Program is truly opening doors that were historically closed to Alaska Natives and providing our people with tools to build a stronger economic, cultural and social future

for our children. Data gathered by the Native American Contractors Association for 2004 indicates that 15 Alaska Native Corporations with 8(a) businesses were able to provide $27.14 million in dividends and $5.39 million in cultural and social program donations. From 1999-2004 these same corporations awarded $14.27 million in scholarships to shareholders and shareholder descendants, building a future of Native leaders. The 8(a) Program is also having a significant impact on Alaska’s economy. In 2004, Alaska Native Corporation 8(a) businesses paid over $141 million in payroll within the State of Alaska and had over 7,700 employees. Nationwide Alaska Native Corporations’ 8(a) businesses employed over 27,800 people and operated over 500 government contracts.

Alaska Native Corporations’ success with government contracting is growing. We are learning to compete in the U.S. economy, providing benefits back to our communities and growing Alaska-based businesses. Our goal is to become economically self-sufficient, to build stable, healthy Native communities. There is currently a push by special interest groups to terminate Natives’ traditional and statutory rights in the 8(a) Program. Should these special interest groups succeed, the impacts will reverberate throughout our Native communities and the state of Alaska.

Sarah L. Lukin, ChairmanPublic Relations CommitteeNative American Contractors AssociationKoniag Shareholder

The 8(a) Program is truly opening doors that were historically closed to Alaska Natives and providing our people with tools to build a stronger economic, cultural and social future for our children.

• In the same time period, the number of Alaska Natives in state prisons increased by 50 percent.• Alaska Natives commit suicide at three to four times the rate among White Americans throughout the country.• Alaska has the highest rate of Fetal Alcohol Spectrum Disorder of any state in the United States, and 89 percent of those cases are Alaska Native babies.

WHAT IS THE ASSOCIATION OF ANCSA REGIONAL CORPORATION PRESIDENTS/CEOs, AND WHAT DOES THE ORGANIZATION DO? The Board of Directors of the Association of ANCSA Regional Corporation Presidents/CEOs includes a member from each of the 13 Alaska Native Regional Corporations who represents the highest levels of each corporation’s management. Also serving on the association’s board is a representative from the Alaska Federation of Natives. The mission of the Association of ANCSA Regional Corporation Presidents/CEOs is to promote and maintain ANCSA, the Alaska National Interest Lands Conservation Act, and economic enterprise through cooperative efforts and advocacy in order to foster the continued growth and economic strength of the Regional Corporations on behalf of their shareholders. Among the goals are:• Coordinating efforts among Regional Corporations and other affected organizations on government, legislative, and regulatory issues that affect ANCSA Regional Corporations.• Enhancing ANCSA Regional Corporations’ ability to develop their resources that are subject to ANCSA Section 7(i), consistent with sharing the revenue distributions in a timely manner.

• Promoting joint business ventures among ANCSA Regional Corporations.• Informing the general public of the positive developments and presence of the ANCSA corporations.• Maximizing shareholder hire with better coordination among ANCSA Regional Corporations.• Encourage Alaska Native participation in elections through- out the state through the Get Out The Native Vote project.

WALKING IN TWO WORLDS WITH ONE SPIRIT What is required of each member of an Alaska Native Corporation’s

board of directors and the management staff they retain is a tremendous passion about Native goals—and a lot of hard work. NANA Regional Corporation, Inc., has been using the phrase “Walking in Two Worlds with One Spirit” for a number of years to highlight the fact that Native people are firmly rooted in the past, in their traditions and in their heritage. Native people look to their Elders for guidance. At the same time, Native people are succeeding in the Western world in business, in education, in literary pursuits and many other arenas. Alaska Native Corporations, led by Native leaders, are truly walking in two worlds with one spirit. The Yup’ik phrase,

HOW IMPORTANT ARE ALASKA NATIVE CORPORATIONS AND NATIVE NON-PROFIT ORGANIZATIONS? Historically, no Alaska corporation—Native or otherwise—had capacity to fight for an equity position in the oil pipeline. Today, by contrast, ANCs are demanding an opportunity to invest in the planned natural gas pipeline. Alaska Native leaders feel strongly that Alaska business shareholders should have rights to participate in the development of Alaska’s resources. For example, the Association of ANCSA Regional Corporation Presidents and CEOs is pursuing plans to build the $6.3 billion pipeline to carry natural gas reserves from Alaska’s North Slope to the Lower 48 with MidAmerican Energy Holdings Company, a Berkshire Hathaway affiliate. Although the association’s efforts to work with the State of Alaska did not pan out, the association continues to pursue other avenues. “The fact that Alaska Native Corporations are playing such a key role in pursuing a gas pipeline shows just how far we’ve come,” said Carl H. Marrs, former CIRI President and CEO. This report will never be complete until the impact of all Alaska Native Corporations and other Native organizations, especially Alaska Native non-profit entities, can be measured. Regional Native non-profit organizations have a broad range of related responsibilities and significant resources available to carry out health, housing, training and social services.

ARE THERE STILL UNMET NEEDS AMONG ALASKA NATIVES? Alaska is the “most Native” state in the United States by virtue of the fact that Alaska’s total Native

American population of 119,241 people accounts for 19 percent of the state’s total population, according to a report recently issued by the Alaska Native Policy Center, “Our Choices, Our Future: Analysis of the Status of Alaska Natives Report 2004.” Only four other states in the nation have Native American populations greater than 7 percent of the total state population, including Oklahoma, New Mexico, South Dakota and Montana. Only Oklahoma and New Mexico have larger total numbers of Native Americans than Alaska, and all four of the states have lower percentages of the entire state population. The report, based on a report for the Alaska Federation of Natives by the University of Alaska Anchorage’s Institute of Social and Economic Research, notes that the Alaska Native population has grown significantly over the last 40 years, increasing from 42,522 people in 1960. The report notes there have been many positive trends with regard to Alaska Natives in the state, such as greater numbers of rural households with indoor water and plumbing and improvements in some aspects of health. In business, Native firms are making strides, with Alaska Natives owning 11 percent of all business firms in Alaska, a higher percentage than for Native Americans in any other state. There also have been improvements with regard to education, despite the fact that Alaska Native high school dropout rates almost doubled in the three school years between 1998 and 2001. Since 1974, 155 new high schools have been built in Alaska, mainly in villages. And 71 percent of rural Alaska Natives, age 20 and older have high school diplomas, up from 48 percent in 1980. Still, however, the report notes many issues that must be dealt with:• While Alaska Natives are 19 percent of the state’s population, they made up about 36 percent of inmates in Alaska prisons between 1993 and 2002.

Malrugni Yuuluni, says it clearly: walking in two worlds. Many Alaska Native Corporation leaders have become sophisticated business managers, but they all retain their respect for the cultures and many of them continue to participate in subsistence activities. Jake Adams of Barrow serves as president and CEO of Arctic Slope Regional Corporation, and he is also a whaling captain. “Whaling is a very integral part of the Inupiat culture, as it represents the core of the Inupiat life. It is the Elders who teach us the way of the whales, and we also look to the Elders as mentors in gaining knowledge about making wise decisions to lead us in the business world. Working as a team in catching a whale to feed a whole village links us to working together to bring success in the corporate world,” Adams said.

ELDERS LEAD THE WAY As Alaska Native Corporations have matured, an ever-increasing amount of energy is being expended on the spiritual well-being of Native people. Elders and Native tradition bearers have provided lessons in the importance of community.

ANCSA IS THE BEGINNING Passage of ANCSA was by no means “the end.” It was the beginning. ANCSA is a living document, which has been amended many times already and likely will be amended many more times. Those who will make the changes in the future will be Native people themselves—in an act of self-determination. The experience of Alaska Native Corporations created under the Alaska Native Claims Settlement Act of 1971 is an “epic story benefiting Alaska and all of its people,” according to Byron Mallott, President & CEO of the First Alaskans Institute.

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FINANCIAL OVERVIEW The financial presentation of ANCSA corporations demonstrates their economic impact on the Alaska economy. They are an integrated and important part of the state’s economic health. This is not an analysis of the relative success between the individual corporations. It is recognition of their combined success throughout Alaska and in their business endeavors. Most of the charts in this report include data from only the 13 Alaska Native Regional Corporations. This reflects the fact that presenting 11 years of data is more meaningful than one year only. It would not be accurate to include an aggregate of Village Corporation data because the list of Village Corporations which participates changes each year. In the year 2003, government contracting grew in importance in Alaska Native Corporation operations. “The Small Business Administration 8(a) Program has been both a blessing and a challenge for participating Alaska Native companies,” said Jay Page, vice president for First National Bank Alaska. “It is a minefield that when successfully traversed has resulted in fantastic successes; but without an experienced person on point, disasters can result. We learn from mistakes, and in 2003, contracts in aerospace, engineering, information technology, construction, and manufacturing paid dividends to Alaska Native shareholders across the state. 8(a) graduates are establishing themselves as major players in many business sectors, securing for Alaska Natives a growing piece of the economic pie for generations to come,” Page said.

REVENUE Alaska Native Corporations provide jobs, revenue, and commitment to the Alaska economy. In 2003, our sample of Alaska Native Corporations had combined revenues of $2.9 billion. A large portion of this directly affects Alaska’s economy. More than half of this amount was derived from the operations of the two largest firms, Arctic Slope Regional Corporation ($1.03 billion) and Chugach Alaska Corporation ($547 million). Figure 1 shows total revenue of the 13 Regional Corporations in Alaska since 1993. Alaska Native Corporations lead the list of Alaska-owned businesses recognized by Alaska Business Monthly (October 2004) as among the state’s top 49 most successful Alaskan businesses. The list was led by Arctic Slope Regional Corporation. Six Alaska Native Corporations were in the top 10, and a total of 13 also made the overall list. Figure 2 shows the magazine’s rankings for revenues.

NET INCOME AND SHAREHOLDERS’ EQUITY Since 1993, net income has generally increased for the combined 13 Native Regional Corporations (Figure 3). Despite making significant dividend distributions, shareholders’ equity remained steady during the same period (Figure 4). Total net income for the 13 Regional Corporations combined in 2003 was $92 million. The total equity in 2003 was $1.6 billion. The equity is significantly higher than the amount of the original ANCSA cash settlement of $962 million, and the Regional Corporations received only about half of that original amount. In 2003, the 13 Regional Corporations paid more than $24

Total Revenue13 Regional Corporations

Figure 1

Figure 2

Top Alaskan-owned businesses, Alaska Business Monthly

Native Corporation Rank

Arctic Slope Regional Corporation 1

Chugach Alaska Corporation 2

NANA Regional Corporation, Inc. 5

Chenega Corporation 6

Bristol Bay Native Corporation 7

Sealaska Corporation 10

Ukpeagvik Inupiat Corporation 11

Doyon, Limited 13

Koniag, Inc. 14

CIRI 17

Ahtna, Inc. 20

The Aleut Corporation 32

Calista Corporation 36

Total Net Income13 Regional Corporations

Figure 3

Total Equity13 Regional Corporations

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2003 DividendsFigure 6

2003 Dividends*

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million in federal and state taxes. Most of this figure is for federal taxes and has relatively small impact on the state economy.

ASSETS Similar to revenue, the size of the assets of these firms is also a measure of the economic impact the Alaska Native Corporations have. Figure 5 shows the total assets of the 13 Native Regional Corporations. The combined assets for the Alaska Native Corporations surveyed was $2.8 billion in 2003, according to their annual reports.

DIVIDENDS Another significant factor adding to the impact Alaska Native Corporations have on the economy are dividends paid to shareholders (Figures 6 and 7). Earnings passed on to shareholders increase their disposable income, and it is believed that much of the total dividend payout is spent in Alaska. Therefore, dividends not only directly enhance shareholders, but indirectly benefit all Alaska residents. Increased consumer spending, generated from dividends, facilitates further growth and investment in Alaska. Of the 41 corporations surveyed, the total for those that did pay dividends for 2003 was $78 million. Not included in the dividend figures are special distributions paid out for the benefit of Alaska Native Elders by a number of the corporations. In many cases these distributions are significant dividends that make a real difference in the lives of the oldest shareholders. For example, in 2003, CIRI distributed $16,810,000 to Elders; Arctic Slope Regional Corporation distributed $699,000.

*Dividend amounts below $100,000 were not included in graph.

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EMPLOYMENT The hiring of Alaska Native people is part of the Alaska Native Corporations’ commitment to welcoming shareholder and Native participation in company operations and growth. The corporations have policies encouraging the hiring of Alaska Natives, shareholders, and their families. The 41 corporations in this study together have an Alaska workforce of 10,541 employees. There were 2,685 Alaska Natives employed by the 41 corporations. According to the August 2003 report, Alaska Economic Trends, from

8 NANA Management Services Catering/Hotels 1,227

9 Yukon-Kuskokwim Health Corporation Health Care 1,217

10 ASRC Energy Services Oil Field Services 1,171

15 Southcentral Foundation Health Care 947

16 Alaska Native Tribal Health Consortium Hospital/Medical Center 919

23 Southeast Alaska Regional Health Corporation Social Services/Health Care 705

27 Tanana Chiefs Conference Social Services/Health Care 671

29 Doyon/Universal Ogden, JV Catering/Security 661

35 Maniilaq Association Social Services/Health Care 569

36 Chugach Development Corporation Facility Support Services 557

51 Norton Sound Health Corporation Health Care 428

53 Peak Oilfield Services Oil Field Services 419

62 Houston/NANA JV Oil Field Services 398

68 Bristol Bay Area Health Corporation Health Care 359

76 Rural Alaska Community Action Program Social Services 336

84 Association of Village Council Presidents Social Services 317

90 Petro Star Refinery Retail Gasoline 297

96 Chugach Support Services Job Training 280

Rank Company/Organization Sector Employees

ALASKA ECONOMIC TRENDS 2003Figure 8

the Alaska Department of Labor & Workforce Development, the Top 100 employers includes 18 employers that are either Alaska Native non-profit organizations or subsidiaries of one of Alaska’s Native Regional Corporations. And five years ago, that figure was only 12 employers (Figure 8). The report, by labor economist Neil Fried, notes that both Native non-profit organizations and subsidiaries of Native Regional Corporations are key employers in Alaska.

A LEGACY OF PHILANTHROPY As the Alaska Native Corporations have matured, leaders have found ways to weave traditional Native ethics into the corporate fabric. There is an underlying concern for the well-being of the entire group. In other words, many of the corporations are finding ways to place a higher priority on the needs of the group rather than the needs of individuals. These tenets are manifested in many of the mission statements from the 2003 annual reports (Figure 9). The stronger the firms are economically as a group, the greater the chance for cultural perseverance. The economic strength results in a stronger voice in state policies, and it allows for the creation of new entities which are building their own enduring foundations. For example, some of the foundations created by the corporations have significant endowments. Also, profits developed through business ventures allow the firms to distribute dividends and generate wealth from diverse operations, including those utilizing

the natural resources from the land. The corporations also make contributions and support scholarships that help promote continued progress. Scholarships combined with future employment opportunities have significant and long-term positive social impacts for Alaska Natives. The total scholarship dollar amount funded in 2003 from the 41 Native firms was $4.2 million. Not included in this figure are the significant contributions that have been made to endowments. Several of the Native Regional Corporations, such as The Aleut Corporation; Arctic Slope Regional Corporation; Bering Straits Native Corporation; CIRI; Doyon, Limited; Koniag, Inc.; NANA Regional Corporation, Inc.; and Sealaska Corporation, have educational foundations with endowments. The endowments range from The CIRI Foundation’s more than $46 million to those that are just getting started with several hundred thousand dollars. Over time, the endowments may fund scholarship and foundation efforts in perpetuity. Michele Brown, president of United Way of Anchorage, feels that

the $581,356 contributed to the United Way campaign in 2004 by Alaska Native Corporations and their subsidiaries is a critical piece of the agency’s overall fundraising efforts. The entire campaign’s overall goal was $9.4 million, and United Way reached a total of about $9 million for the year 2004. “United Way of Anchorage highly values the Alaska Native Corporations’ generous contributions to help ensure a comprehensive system of care in our community to serve Natives and non-Natives alike,” she said. She noted that the needs in Anchorage are growing at a frightening pace. While Alaska is viewed as a place where working families enjoy high incomes, those at the bottom of the pay scale are experiencing increasing difficulty in just making ends meet, she said. Brown believes that Alaska Native Corporations’ focus on the welfare of the group as opposed to the individuals makes them particuarly sensitive to these kinds of issues and a particularly valued partner in addressing them.

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CONCLUSION Alaska Native Corporations have had and continue to have a major impact on Alaska’s economy. This report has covered total revenues, employment, and philanthropy for 41 Alaska Native Corporations. The entire impact of all Alaska Native Corporations and Native non-profit organizations on the state has yet to be measured. The corporations generally pay out a higher percentage of their net income as dividends than publicly held business corporations, and they have made substantial philanthropic contributions in the form of scholarships and other charitable donations.

ACKNOWLEDGEMENTS We would like to thank the 41 Alaska Native Corporations which participated in the survey. Many thanks for their patience and effort. Thanks also to Barbara Donatelli, CIRI Executive Vice President, and Vicki Otte, Executive Director, Association of ANCSA Regional Corporation Presidents/CEOs. We also are grateful to KPMG, LLP, for their support, technical review and assistance.

ABOUT THE EDITORS Alexandra J. McClanahan is the CIRI historian. In 2001, she was the recipient of the Denali Award, the highest award made to a non-Native each year by the Alaska Federation of Natives. Cindy Allred works for the Association of ANCSA Regional Corporation Presidents/CEOs. Rolf Dagg, who has a background in finance, is a general contractor and land developer. Also assisting was Aaron Leggett, CIRI/CITC History intern.

GRAPHIC DESIGNWalsh Sheppard Flynn

Ahtna, Inc., a growth-oriented company, will enhance the overall well-being of its shareholders with monetary dividends, employment and educational opportunities through diversified investments and support a strong sense of cultural pride and identity. Ahtna will implement ANCSA for the benefit of its shareholders through the wise stewardship of land and natural resources and through sustained growth for the future generations.

Our mission is to maximize profits, provide benefits to our shareholders, and preserve our culture.

To actively manage our lands, resources, diversified operating subsidiaries and investments throughout the world in order to enhance Inupiat cultural and economic freedoms.

To improve the quality of life of our people through economic development while protecting our land and preserving our culture and heritage.

Enriching our Native way of life.

Provides sound, progressive, business ventures which promote self-determination, economic and social well-being that improves the quality of life for those we serve. Our success will be measured by increased regional employment, corporate profits and shareholder benefits.

Chugach Alaska Corporation is committed to profitability, celebration of our heritage, and ownership of our lands.

Our mission is to promote the economic and social well-being and Alaska Native Heritage of our shareholders, now and into the future, through prudent stewardship of the company’s resources, while furthering self-sufficiency among CIRI shareholders and their families.

To continually enhance our position as a financially strong Native corporation in order to promote the economic and social well-being of our shareholders and future shareholders, to strengthen our Native way of life and to protect and enhance our land and resources.

Our mission is to optimize profits, to provide dividends and benefits while preserving our cultural pride.

To be an Inupiaq corporation that enables our people to continue living productively in traditional and modern worlds.

Sealaska’s philosophy is to protect and grow our corporate assets to provide economic, cultural and social benefits to current and future generations of our shareholders.

Our mission is to allocate resources for our subsidiaries to flourish and oversee investments for the benefit of our shareholders.

Ahtna, Incorporated

The Aleut Corporation

Arctic Slope Regional Corporation

Bering Straits Native Corporation

Bristol Bay Native Corporation

Calista Corporation

Chugach Alaska Corporation

CIRI

Doyon, Limited

Koniag, Inc.

NANA Regional Corporation, Inc.

Sealaska Corporation

The 13th Regional Corporation

Region Mission

ANCSA REGIONAL CORPORATION MISSION STATEMENTSFigure 9

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WORKS CITEDAlaska Business Monthly, October 2004. “ABM’s Top 49’ers: Business Blockbusters for 2004,” 68-84.

Alaska Natives Commission. 1994. Final Report, Volume 1. Anchorage: Joint Federal-State Commission on Policies and Program Affecting Alaska Natives.

Alaska Native Policy Center. 2004. “Our Choices, Our Future: Analysis of the Status of Alaska Natives Report 2004.” Anchorage: Alaska Native Policy Center.

Arnold, Robert D. 1978. Alaska Native Land Claims. Anchorage: The Alaska Native Foundation.

Fried, Neal. “The Trends 100.” Alaska Economic Trends, August 2004, 3-14.

Goldsmith, Scott. “The ISER Alaska Input-Output Model.” Working Paper 98.1. Anchorage: Institute of Social and Economic Research University of Alaska Anchorage, 26 January 1998 revised 7 April 2000.

Marrs, Carl H. “ANCSA: An Act of Self-Determination; Harnessing Business Endeavors to Achieve Alaska Native Goals,” Cultural Survival Quarterly, Fall 2003.

McClanahan, Alexandra J., 2000. Growing Up Native in Alaska. Anchorage: The CIRI Foundation.

McClanahan, Alexandra J., Jangila D. Hillas. “Native Corporations: Building a Foundation for Alaska’s Economic Destiny,” ANCSA Regional Corporation Presidents/CEOs, 1-15. 2001.

McClanahan, Alexandra J., Julee Duhrsen. “Native Corporations: An Epic Story Benefiting Alaska,” ANCSA Regional Corporation Presidents/CEOs, 1-16. 2002.

McClanahan, Alexandra J., Julee Duhrsen. “Native Corporations: A Legacy of Sharing,” ANCSA Regional Corporation Presidents/CEOs, 1-13. 2003.

McClanahan, Alexandra J., Cindy Allred, Rolf Dagg. “Native Corporations: Sakuuktugut/We are Working Incredibly Hard,” ANCSA Regional Corporation Presidents/CEOs, 1-21. 2004.

Senate Committee on Interior and Insular Affairs, Hearings on Alaska Native Land Claims, S. 2906, S. 1964, S. 2690, S. 2020, 90th Congress, 2nd sess., 8-10 February 1968, 50-51.

Senate Committee on Interior and Insular Affairs, Hearings on Alaska Native Land Claims, S. 1830, 91st Con-gress, 1st sess., 7-8 August 1969, 534.

SUGGESTED REFERENCENa’eda, Our Friends, A Guide to Alaska Native Corporations, Tribes, Cultures, ANCSA and More, by Alexandra J. McClanahan and Hallie L. Bissett, published by The CIRI Foundation, 2002.

PHOTO CREDITSChris Arend PhotographyNANA Regional CorporationChugach Alaska CorporationCalista Corporation

The corporations generally pay out a higher percentage of their net income as dividends than publicly held business corporations, and they have made substantial philanthropic contributions in the form of scholarships and other charitable donations.

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Walking In Two Worlds With One SpiritMALRUGNI YUULUNI

A LOOK AT SELECTED DATA FOR 13 NATIVE REGIONAL CORPORATIONS AND 28 NATIVE VILLAGE CORPORATIONS

COPYRIGHT 2005 BY THE ASSOCIATION OF ANCSA REGIONAL CORPORATION PRESIDENTS/CEOs • All rights reserved.

ANNUAL ECONOMIC REPORTBASED ON 2003 FINANCIAL DATA