The 13 native regional corporations: a financial report; in the past 10 years, gross revenues from the Regional Corporations increased from $500,000 in 1991 to $2.9 billion in 2001.

• Author: Stricker, Julie
• Position: Alaska Native Business News

Thirty years ago, Congress undertook a vast experiment in capitalism. It passed the Alaska Native Claims Settlement Act, which divided 44 million acres of land and nearly $1 billion among Alaska's Native peoples to settle aboriginal land claims and speed the construction of the trans-Alaska oil pipeline.

Under ANCSA, 12 regional for-profit corporations were created, with the intent that they would become self-sustaining and provide for the social and cultural well-being of shareholders. The 13th Regional Corp., which was not granted land, was later established for Alaska Natives living outside the state. It is based in Seattle.

Today, the "vast experiment" is paying dividends, both for Alaska's Natives and for the Alaska economy. The regional corporations have become a dynamic economic engine for the state, amassing $2.9 billion in gross revenues in fiscal year 2001.

Historically, development in Alaska has meant that both the state's natural resources and the wealth they generated were exported. But because the regional corporations are owned and headquartered within Alaska, the profits are brought back to the state.

"A lot of that revenue is generated in the Lower 48 and moved back into Alaska," says Carl Marrs, Cook Inlet Region Inc. president and CEO. "It's a positive net flow to Alaska."

In the past 10 years, revenues from the regional corporations increased from $500,000 in 1991 to $2.9 billion in 2001. "It's a bright spot," Marrs says, comparing the corporations' revenue with the amount of federal funds U.S. Sen. Ted Stevens funnels to Alaska. "We're trying to match the Ted factor, but we have a long ways to go."

It's not just the for-profit corporations that are having an impact on Alaska, Marrs points out. Native nonprofit organizations generate income in the form of government grants, as well as providing hundreds of jobs, educational scholarships, job training and valuable social services.

In 2001, the corporations continued their trend of increasing revenues, but the fallout from the Sept. 11 terrorism attacks eroded profits. Continuing weakness in natural resources markets and tourism also contributed to losses. In fact, six of the 13 regional corporations showed negative net income in 2001, the worst performance overall in more than a decade.

Three corporations: Arctic Slope Regional Corp., Cook Inlet Region Inc. and Chugach Alaska Corp. account for two-thirds of all regional corporation revenues.

Arctic Slope Regional Corp.

Arctic Slope, the largest Alaskan-owned corporation in the state in terms of revenue, showed revenues of $1.062 billion in 2001, nearly $30 million more than in 2000. Net income was $30.9 million. The Barrow-based corporation focuses on oil field-related industries, but has dozens of subsidiaries that cover businesses from oil field services to plastics manufacturing, government services to tourism. It has about 9,000 shareholders of Inupiat descent.

The bulk of Arctic Slope's revenue, $457.3 million, stems from energy services, including royalties from the Alpine oil field and its oil field services subsidiaries.

Lower oil prices sparked a decline in ASRC's petroleum refining and marketing division, which contributed 26 percent of revenues. In 2001, the division generated $279.4 million, down from $299 million in 2000.

Other divisions include technical services, manufacturing, engineering and construction and resource development.

Cook Inlet Region...