CEO’s Message – Ahtna Grows Revenue Amid Challenging Economic Times

Published August 2017

Tom MaloneyDear shareholder-owners,

Let me start by saying what an honor it was for the management team to meet so many shareholder-owners and Elders at the annual meeting in Copper Center. It was an opportunity to reconnect with old friends and make new ones.

Ahtna, Inc. and its subsidiaries remain strong despite the economic headwinds facing Alaska. Thousands of jobs were lost last year in Alaska and that trend continues in 2017. Revenues for the 12 Alaska regional Native corporations declined by 7 percent in 2016 and net profits before taxes fell by 70 percent. Fortunately, Ahtna’s 2016 revenues increased by 15 percent.

The decline in oil and commodity prices has hurt the bottom line for all Native corporations. Ahtna is no exception. Our resource revenues received through 7i related to oil and mining were down significantly in 2016, but we also have many bright spots in our business portfolio. Government contracting, work for Alyeska Pipeline Service Co., civil construction and our own development projects have resulted in 19 percent higher shareholder-owner wages and dividends in 2016, compared to the previous year.

Ahtna is blessed to be bucking the downward economic trends. We are even expanding our Anchorage office to satisfy growing customer demand. The strategic priorities established by our Board of Directors keep us competitive in today’s challenging economy.

This year marks the 40th anniversary of the Trans-Alaska Pipeline System (TAPS). The pipeline has safely transported 735 billion gallons of oil across 55 miles of Ahtna land. Many of our Board members and Elders played an integral role in the creation of the pipeline and they deserve our appreciation and respect for forging a successful business partnership and protecting the land.

Ahtna continues to provide services to Alyeska, and we are proud to be part of the team that was named Project of the Year for Environmental Stewardship and Innovation at the Alaska Oil and Gas Association’s May conference. Ahtna Construction participated in a challenging erosion-control project in the TAPS right-of-way near the Sagavanirktok River.

Ahtna continues to be extremely interested in a liquefied natural gas project or an in-state gas pipeline project that monetizes Alaska’s vast natural gas reserves. A gas pipeline would impact Cantwell, so we need to make sure Ahtna has a meaningful voice at the table that minimizes any risk to our lands and maximizes the benefits for our shareholder-owners.

Safety continues to be our number-one priority in everything we do. We value our employees and recognize we have people working 24 hours a day, 365 days a year, in some of the most challenging conditions and locales in the world. We are so proud of each and every one of our Ahtna employees. It is important that everyone goes home to their families safe and sound at the end of every workday.

Alaska is the Last Frontier, and we all enjoy participating in the great outdoors. Please be safe in all activities. For example, when hiking, have bear spray or other protective gear to keep the family safe.

Thank you to all our employees whom we do not always get to see often, being dispersed across the country, but are an integral part of the Ahtna family.

Thank you,

Tom Maloney

Chief Executive Officer