November - Page 3

By William Prosser

CIRI Chairman of the Board

CIRI can take pride in the many talented shareholders we have and, especially, in the fact that the number of talented people interested in serving on the CIRI Board of Directors is increasing dramatically. It's my pleasure to report to you that the Nominating Committee has narrowed the field of candidates to fill the vacancy left by retiring Board Member Jerry Brown to six recommended finalists.

I can honestly tell you that narrowing the list of 14 people to six wasn't easy. These six will be interviewed by the Nominating Committee in December, and the committee will then make a recommendation to the board. The board will have a difficult choice at the December meeting in selecting one of them, but I am confident that we will make the right choice.

While we're very sorry to lose Jerry as an active member of the Board of Directors, I know that he will continue to participate in CIRI's business as an active shareholder. I wish him the very best and look forward to continuing our long friendship.

Because Jerry retired in September, before his term expires in 2001, it is the board's duty to appoint a person to fill the vacancy. The Nominating Committee, which includes three members of the Board of Directors and the three chairpersons of the Shareholder Participation Committees, has the responsibility for screening applicants and preparing a list of finalists to present to the board. The board votes by secret ballot to select the recommended appointee.

We're fortunate at CIRI to have a very open process that ensures that we find the most qualified person possible. Our qualifications, which were developed

together with the Shareholder Participation Committees, require that applicants be at least 18 years of age, a voting CIRI shareholder and possess a strong business understanding with demonstrated decision-making, leadership and communication skills.

There are businesses in Alaska that might be hard-pressed to find someone who can wear those shoes. It's not so here. We are fortunate to have many extremely talented and worthy individuals. I look forward to reporting our selection who, we believe, best fits the qualifications.

CIRI BOARD OF DIRECTORS

William C. Prosser

Chairman

John N. Colberg

Chairman Emeritus

Charles G. Anderson

Vice-Chairman

Robert N. Woodhead

Secretary

A. Debbie Fullenwider

Assistant Secretary

William D. English

Treasurer

Michael R. Boling

Assistant Treasurer

B. Agnes Brown

Gosta E. Dagg

Sharon L. Isaak

Patrick M. Marrs

Robert W. Rude

Terry L. Simpson, M.D.

Clare Swan

CIRI is ranked fifth in total revenue among all Alaskan companies in Alaska Business Monthly's "Top 49ers" list and first among all Alaskan companies in ratio of revenue per employee.

CIRI posted revenue of $251 million in 1998, an increase of more than 34 percent from the $186 million it earned in 1997. That increase jumped CIRI's total revenue ranking one spot from last year's sixth-place ranking.

The increase in revenue was due in part to CIRI's diversity in business investments, which range from tourism and natural resources to communications and real estate.

Carl Marrs, CIRI's president and CEO, was quoted in the October issue of the magazine as saying, "Looking to the future, I see an unlimited growth potential for the Native corporations, especially considering where we have come since the passage of the Alaska Native Claims Settlement Act. Native corporations are in Alaska for the long-term and our goal is to be as successful as possible while benefiting our shareholders through dividends, social services programs and a voice in state and federal issues."

Native corporations accounted for 12 of the top 49 companies in the list. CIRI's high ranking is especially impressive considering its relatively small number of employees. Among the 49 companies in the list, CIRI ranked 35th in the number of employees with 75. That gave CIRI the highest ratio of revenue per employee of any of the companies with $3,346,827 per employee.

Alaska's 1999 49ers*

Company Revenue

(1998, in millions)

Arctic Slope Regional Corporation $887.5

VECO $316.0

Lynden $310.0

NBA $273.1

CIRI $251.0**

Sealaska $189.4

First National Bank of Alaska $134.6

Brady & Company $132.0

Anchorage Cold Storage $122.0

Chugach Alaska Corporation $115.0

Top 10 companies by revenue-per-employee ratio*

CIRI $3.3 million

Brady & Company $2.5 million

Neeser Construction $560,000

A&M RV Center $524,444

Watterson Construction $520,000

Bristol Bay Native Corporation $514,000

Anchorage Nissan/Jeep/Eagle $496,754

Anchorage Chrysler Center $492,754

Alaska Steel $466,000

Gene's Chrysler $461,667

*compiled by Alaska Business Monthly

** CIRI's total revenue for 1998 was $251 million, not $257 million as reported in Alaska Business Monthly

CIRI recently completed divestiture of its Lower 48 oilfield service operations. The operations, which consisted of two small partnership arrangements, represented Peak Oilfield Service Company's expansion into the Lower 48 several years ago. The expansion was intended to diversify Peak's operations into oilfield service and related transportation markets in the Texas and Oklahoma markets. Due to a number of factors, including declines in drilling activity, the southern operations proved less profitable than anticipated. Peak will continue its Alaska operations as a major oilfield service contractor on the North Slope and Kenai Peninsula.

The CIRI Nominating Committee is seeking shareholders interested in being considered for nomination to the 2000 CIRI Board of Directors slate. Directors are responsible for initiating and developing the policies that further the goals of the company, while addressing the economic, social and cultural needs of the shareholders.

The Nominating Committee will select 10 applicants to interview and make a recommendation of seven candidates to the CIRI board. The board makes the final selection of five candidates to comprise the CIRI board-endorsed slate.

Interested applicants should be well-rounded and possess a strong business understanding. Each candidate must be at least 18 years of age and a voting CIRI shareholder. The Nominating Committee also looks for demonstrated decision-making, leadership and communication skills, and honesty and integrity. A knowledge of business operations, involvement in Native issues and a college degree or equivalent business experience are other favored attributes.

All shareholders, including incumbents, interested in being considered for the CIRI