ANCSA corporations: a 1990 portrait.

• Author: Gerhart, Clifford
• Position: Akaska Native Claims Settlement Act native regional and larger village corporations - Includes related article - Industry Overview

Alaska's 13 Native regional corporations and larger Native village corporations experienced wildly varying fortunes in 1990. Arctic Slope Regional Corp. almost doubled its revenues and set its sights on a $1 billion mark in sales by the end of the decade; Chugach Alaska Corp.'s liquidity problems worsened in 1990 and sent the company into Chapter 11 bankruptcy in March 1991.

In 1990, Native corporations that were established in 1971 by the Alaska Native Claims Settlement Act relied on normal operations for revenues. There were no windfalls such as the Exxon Valdez oil-spill cleanup, nor were sales of net operating losses (NOLs) to profitable Lower 48 firms allowed.

Many ANCSA corporations concentrated on lowering debt and improving operating efficiency. Unprofitable enterprises were sold or revamped, and many new ventures were launched in service-related fields, often outside Alaska.

Not surprisingly, almost all Native corporations are involved in the development of their chief assets -- natural resources such as oil and gas, timber and minerals. Cook Inlet Region Inc. and Doyon Ltd. continued to explore and develop their petroleum resources. Aleut Corp., Bering Straits Native Corp. and Doyon are positioning to tap gold and other hard-rock minerals for future revenues. NANA Regional Corp. celebrated the opening of its Red Dog Mine, but realized scant revenues from the project.

In 1990, Native corporations divested seafood processing operations. Sealaska sold its Ocean Beauty seafood group last year, and troubled Chugach Alaska sold off its inventory of fish and shortened the processing season at its Cordova plant.

Native corporations involved in the timber industry -- such as Chugach, Sealaska and Klukwan -- are working to move into more value-added areas of forestry or to enter new businesses such as construction and mineral development.

The "permanent funds" of many corporations posted large earnings. These savings accounts, typically fashioned as investment portfolios of stock in other companies, have helped several firms more easily weather the boom-and-bust cycle of Alaska's natural resource industries. For NANA Regional Corp., investments were its largest source of income. Several other companies note that their portfolios performed well.

Several Native regional corporations received much of their net income from the revenue-sharing provisions of Section 7(i) of ANCSA. This section was included in the law because natural resources were not evenly distributed among Native lands. Section 7(i) provides that 70 percent of natural resources from any Native regional corporation's ANCSA lands be shared with other regional corporations that would in turn share them with their shareholders and village corporations.

Alaska's Native corporations face a variety of challenges for the future. Increased competition on the NOrth Slope has forced Native-owned oilfield service companies to cut prices, and reserves there are declining. Many of the corporations are working with the federal government to exchange their ANCSA lands for oil and gas drilling rights in the Arctic National Wildlife Refuge, should Congress approve development there. The fishing industry is plagued with high inventories and low prices. The logging industry is facing declining stands of timber.

Following are brief financial profiles of the state's 13 Native regional corporations and 2 of the largest village corporations. Because fiscal years vary widely, research for this report used the fiscal year that reflects the most months in calendar year 1990. The primary source for financial information was annual reports published by the Native corporations. Other sources were telephone interviews and mail surveys.

AHTNA INC.

Ahtna Inc., based in Glennallen, had a mixed year in 1990. Although 1989 revenues of $7.9 million decreased 25 percent to $5.9 million in 1990, net earnings were up 13 percent, from 1989's $163,858 to $185,153 in 1990. Earnings per share for the company, profitable every year since 1974, rose from $.92 per share to $1.03 per share, a 12 percent increase.

Subsidiary Ahtna Construction & Primary Products Corp. had another profitable year and was able to pay a first-ever dividend of $100,000 to the parent company. AC&PPC owns 30 percent of H.C. Price/Ahtna. The income from the joint venture, which provides maintenance of the trans-Alaska pipeline, remains the foundation for Ahtna's profitability.

H.C. Price/Ahtna has returned approximately $1.2 million in profit to AC&PPC on an original investment of $600,000. Alyeska Pipeline Service Co. has extended the pipeline maintenance contract through 1991. Price/Ahtna also won a two-year maintenance and oil-spill response contract at the Valdez terminal.

Other Ahtna subsidiaries were not so profitable in 1990. Ahtna Development Corp., which has done well in a joint venture to provide life-support services throughout camps in rural Alaska, was underbid and lost its Alyeska catering contract. Alaska Security Inc., a wholly owned subsidiary providing armored car and security services, failed to show a profit. In August 1991, Alaska Security sold its armored car division and is now debt-free.

In the last quarter of 1990, Ahtna Inc. began converting its former lodge in Glennallen to an office complex for various state government departments. Having signed a five-year lease with another five-year option, company managers expect these rents to help reduce overhead costs.

ALEUT CORP.

Anchorage-based Aleut Corp., which owns land on the Alaska Peninsula and Aleutian, Shumagin and Pribilof islands, receives most of its revenues from its real estate...