Financial Highlights

2007 Annual Report, A letter from our president

Dear Fellow Shareholders,

 

It gives me great pleasure to report that our company continued to build momentum and delivered another strong financial performance in 2007. Our Board of Directors and staff members demonstrated their commitment and dedication to our company as they worked together to overcome business challenges and implement business strategies devised to maximize CIRI's long-term growth, profits and shareholder value.

 

CIRI succeeded on many fronts in 2007. Our company made progress on a variety of real estate development projects in Alaska, Texas and California, especially the Tikahtnu Commons shopping and entertainment project in Anchorage, Alaska, and the Sonterra business and hotel project in San Antonio, Texas. CIRI's Alaska tourism division delivered a record performance and our company's Texas resort interest performed well during its first full year of operation. CIRI's construction and oilfield service businesses remained strong. Our managed funds and telecommunications investments continued to perform well.

 

Our company benefited from strong markets for natural resources, including oil, natural gas, metals, sand and gravel. And CIRI's government services division ended the year by winning its first competitive bid and getting a 2008 contract to build a bridge in Washington state.

 

Results

CIRI had one of its strongest-ever years in 2007 with net income of $74 million pretax and $56.6 million after tax. CIRI's total assets climbed to $726.3 million in 2007, up from $697.9 million in 2006. And our shareholders' equity climbed to $683.7 million in 2007, from $655.4 million in 2006.

 

CIRI's 2007 net income was down from the previous year in part because in 2006 the company took advantage of extraordinary market conditions and sold its interests in major resort properties in Arizona and Nevada. Our Board of Directors and executive team have, during the past few years, altered CIRI's investment strategy to favor investments that will steadily grow shareholder equity by generating more predictable and sustainable revenue streams.

 

Strategy

CIRI's Board of Directors and staff continue to fine-tune our company's business strategies to adapt to the constantly changing business environment and maximize long-term performance and shareholder equity.

 

Our key corporate strategies are to:

 

• Grow CIRI through prudent investments in a diverse portfolio of high-quality assets,
• Develop CIRI's Alaska business, energy and real estate interests,
• Pursue opportunities uniquely suited to a well-capitalized Alaska Native corporation,
• Team with strong partners that have the ability and incentive to make our joint ventures succeed, and
• Seek investments that reflect market trends and long-term growth.

 

CIRI is using these strategies to aggressively pursue diverse business opportunities that will be further discussed later in this annual report. I believe these strategies will help our company sustain growth to benefit both current and future generations of CIRI shareholders.

 

I am honored to have the opportunity to lead CIRI. Our company history is a true Alaska Native success story. CIRI has overcome many large and small challenges since it was created by the Alaska Native Claims Settlement Act of 1971. It began with great aspirations but little business experience or expertise. Nevertheless, CIRI defied the odds, flourished and grew into one of Alaska's largest and most successful corporations and is today respected for its strategic investments, innovative thinking and commitment to its shareholders and community.

 

Thank you to CIRI's shareholders, Board of Directors, staff and business partners for the support you have given to me and our company. It has enabled CIRI's past and present successes, and it is providing the new energy that will propel our company into the future. I look forward to continuing that collaboration.

 

• Margaret L. Brown
• CIRI President and Chief Executive Officer