making special distributions to our original elders in the next few months," said Carl Marrs, President & CEO.   For a number of years the corporation has been exploring various options available for providing benefits for elders. In a 1997 advisory ballot, responding shareholders supported the idea of establishing a special financial benefit program for elders aged 65 and over who were original CIRI enrollees.   Originally, the CIRI Board had been considering a fully funded irrevocable settlement trust which would make periodic payments over time. However, for this type of trust to work from a tax perspective, Congress needed to pass legislation to allow establishment of such a trust without taxing the beneficiaries on day one on the total amount of the distributions they would have received over time.   CIRI has been working with several other regional and village corporations on federal legislation that would solve the tax problems and allow the company to establish an irrevocable settlement trust, and the company plans to continue these efforts. "In the meantime," said Marrs, "the CIRI Board and I feel

it is time to begin providing benefits to elders now. We are implementing an alternative to the creation of a fully funded irrevocable trust."   After extensive research and consideration, the CIRI Board voted to establish a revocable trust for elders that is funded on a quarterly basis, an action which can be taken by the board without the need for a formal vote of shareholders. Once the desired tax legislation is passed, a trust that is irrevocable and fully funded will be presented for a vote of the shareholders.   Unlike the irrevocable trust, under the current tax laws, CIRI beneficiaries will not be taxed on the entire contribution to the trust but rather only on the amounts they receive.   Original CIRI enrollees, 65 years of age and older will be eligible to receive the payments. All qualifying elders will receive the same payment whether or not they have gifted shares. An elder may choose to decline the benefit if eligibility for income-based social programs could be negatively affected.

On the front page of this newsletter you will read that 1999 net income was $57.4 million, on revenues of $297 million. This was 14 percent higher than 1998's net income of $50.2 million, on revenues of $251 million. This is our eighth straight year of increasing net income, and we can all be proud of our company's business performance.   We are not the biggest of the Native regional corporations in terms of gross revenues. We have focused instead on keeping our net profits strong. And this focus on profitability has enabled your board to increase dividends, both last year and again this year. This year's first quarter dividend of $6.28 per share, or $628 for 100 shares, is 14 percent higher than last year's first quarter dividend.   In addition, I am excited to announce that your board has started a special elders trust for our original shareholders as they turn 65. An article on page 1 describes elders' trust further. The first quarterly payment of $450 will be paid to our original shareholders in May, with two more quarterly payments of $450 to be made in August and November. An elders' program is something shareholders have wanted to see and, even though the tax legislation we were waiting for has not yet passed, the board has come up with a creative way to get the program started this year while we keep working on the legislative effort.   One development you will notice this year is the substantial increase in the book value of CIRI's assets, from $673 million at the end of 1998 to $989 million at the end of 1999. In addition, shareholders' equity increased from $527 million in 1988 to $839 million in 1999. The primary factor underlying both of these increases is the gain, on paper, of the

value of our wireless telephone investments. These gains have not yet been realized by the company, and can't be until 2002 and 2004 due to legal restrictions on the investments.   Through some creative and hard work with the Federal Communications Commission, CIRI had an opportunity to bid at FCC auctions for licenses to provide personal communications services (PCS), under rules that provided bidding discounts and special financing. Generally speaking, these rules require that the licenses be held at least five years from issuance, which for us will be 2002      and 2004. Some shareholders have asked whether this increase in CIRI's assets will result in a large special dividend this year, but because the gains cannot be realized now it will not. When and if CIRI is able to realize those gains, the Board may take action to consider a special dividend at that time.   We do not know, of course, whether or not these unrealized gains will be there in 2002 and 2004; that depends on the success of our underlying PCS business and many other factors. I am planning to send all shareholders a more detailed discussion of our PCS investments and their potential financial impact on your company. For now the outlook is positive, but patience will be required under the current rules.   You will soon receive your annual report for 1999, which provides detailed financial statements breaking down our performance by business segment. The most significant item to report here is that, as I have reported to you previously, we sold our portfolio of lower-48 apartment properties in 1999, at a high point in the market. We also made further significant investment in the PCS business when we acquired licenses from Omnipoint Corporation.   In short, by pulling the same direction together, our company continued its strong record of financial performance, dividends increased, our elders' trust was funded, and we are well positioned with our PCS investments for the future. I again thank you for the opportunity to serve as your President during this exciting period.

A WORD FROM THE PRESIDENT: OUR BUSINESS PERFORMANCE IS STRONG

NEW ELDERS' BENEFIT PROGRAM continued from page 1