Shareholder. Sealaska Acquisition Process Moves Forward

Transcription

1 Values in Action Q4 Shareholder A quarterly newsletter from Sealaska Sealaska Acquisition Process Moves Forward For the last 18 months, Sealaska management has been on a path to acquire new operational investments. The management team has evaluated more than 500 companies, including follow-up conversations with hundreds. Through a deliberate process of due diligence, Sealaska has identified a small number of companies that fit our filters. Sealaska s Chief Operating Officer Terry Downes is leading this effort. I have the privilege of sharing Sealaska s story with investors and business leaders, said Downes. We want to create economic value from assets and investments through Native values. This ensures that our assets are managed sustainably and can provide benefit for current and future generations. Under Downes leadership, Sealaska management also examines how our assets will provide financial, social, and environmental benefits. This has attracted companies to seek out Sealaska. I feel confident that the acquisition process is thorough and strategic, said Joe Nelson, Sealaska board chair. The directors and I understand that the future state of Sealaska will take patience and discipline. What s Next? Part of Sealaska s strategic plan is to be financially stable and independent from ANCSA Section 7(i) income. Making the right decisions around an acquisition is important and will position Sealaska in the right direction. Sealaska management is working closely with the board during this transition period, said Sealaska President and CEO Anthony Mallott. In addition to due diligence on an acquisition, we have been focusing on containing costs. We know that each of us plays a role in making Sealaska successful and we want to be part of the team that leads us to success. Key Filters SEALASKA HAS IDENTIFIED TOP PRIORITIES FOR A NEW ACQUISITION Current cash flow High net income from operations Regional to shareholder base Alaska or the Pacific Northwest Greater potential for shareholder employment Alignment with our core Native values Stay in Touch with Sealaska! It is important for us as a Native community to stay connected, and one way we do that is to share stories through Sealaska s outreach. We encourage you to send your photos and stories to webmaster@sealaska.com. Visit us on Facebook Former Sealaska Director and CEO Elected Lt. Governor The 2014 general election in Alaska was a historical one. A unity ticket, representing independent candidates, has been elected to lead Alaska. Sealaska congratulates Bill Walker and Byron Mallott, Alaska s new governor and lieutenant governor. As a result, a Native voice will be at the top level of government and inspiring our children to lead as well. Mallott began his campaign as a candidate for governor of Alaska. He was the Democratic nominee after the August primary. On September 1, 2014, Mallott announced that he would join Walker to create a unity ticket. New Alaska Governor Bill Walker and Lieutenant Governor Byron Mallott

2 2 Shareholder Appointed Assistant Professor at UAF Sealaska shareholder Diane Benson has been appointed assistant professor at the Department of Alaska Native Studies and Rural Development (DANSRD). DANSRD s mission is to increase cultural awareness and strengthen leadership capacity for rural and indigenous communities in Alaska and the Circumpolar North. I could not be in better company, said Benson. Working for DANSRD in many ways is a dream come true. I get to teach a spectrum of courses focused on certain historical, legal and social areas, such as ANCSA, legislative affairs, and circumpolar health. It is wonderful to be a part of such a great team dedicated to excellence and the educational advancement of rural Alaska and beyond. DANSRD is a full Alaska Native studies and rural development program at the University of Alaska Fairbanks. It has an auxiliary campus in Anchorage. Potential students may apply and take courses from anywhere with a phone connection and Internet access, making it an accessible program for rural and working students. Benson is Tlingit, Yeil (Raven) T'akdeintaan (Sitka) and her Tlingit name is L'xeis't. Sealaska Shareholder Diane Benson Chris E. McNeil Jr. Inducted into Stanford s Native American Cultural Hall of Fame On October 24, 2014, former Sealaska President and CEO Chris E. McNeil Jr. was inducted into the Native American Cultural Hall of fame at Stanford University. McNeil has built upon his leadership at Sealaska to serve not only shareholders, but all Alaska Natives in the areas of voting rights, hunting and fishing rights, cultural site protection, education, economic development and job creation. He served as special counsel to the Alaska Federation of Natives, and as Washington representative and counsel to the Mashantucket Pequot Tribal Nation. He earned a bachelor's degree in political science and doctorate of law, both from Stanford. While he was a student, McNeil distinguished himself as a founding member of the Stanford American Indian Organization and as one of the first graduate interns to develop American Indian programming. He was also instrumental in the successful campaign to remove the "Indian" as the official Stanford mascot. He is Tlingit, Dakl'aweidí (Killerwhale) Clan and an enrolled member of the Nisga'a Tribe. In Memory Sealaska pays tribute to shareholders who have recently walked into the forest. Manuel A. Aceveda Kake, AK (66) Sylvia J. Johnson Juneau, AK (78) Patricia A. Antioquia Anacortes, WA (72) Walter R. Johnston Ketchikan, AK (61) Suzan M. Armstrong Anchorage, AK (50) Alice Modig Kirkland, WA (59) Marilyn J. Barker Portland, OR (84) Phillip C. Nielsen Sitka, AK (57) Cornell P. Bean Jr. Kake, AK (40) Richard C. Nix Sr. Tacoma, WA (84) Mary E. Berg Glendale, AZ (73) George J. Peratrovich Anchorage, AK (77) Mari Tracy Bertram Anchorage, AK (44) Martin Perez Ketchikan, AK (96) Esther Rita Brown Ketchikan, AK (53) Franklin G. Peters Juneau, AK (73) John E. Dalton Seattle, WA (92) Ronald F. Peterson Juneau, AK (74) Gerald E. Didrickson Sitka, AK (76) Nicole D. Richert Juneau, AK (39) Richard K. Dolliver Wendell, ID (60) Joseph Sabatini San Diego, CA (92) Theodora B. Duncan Mesa, AZ (90) Helen F. Sarabia Juneau, AK (88) Franklin E. Dundas Anchorage, AK (51) Ellen L. Setters Anchorage, AK (66) Thomas I. Evenson Jr. Wrangell, AK (69) Heather Silverthorn Brewster, WA (48) Thomas J. Farquhar Anchorage, AK (56) Juanita M. Smith Molalla, OR (69) Mary Flake Juneau, AK (69) Peter B. Tavares Ketchikan, AK (51) Delores J. Forbes Salem, OR (75) Michael P. Wallace Seattle, WA (53) Agnes M. Fowler Renton, WA (85) John West Corvallis, OR (60) Tonya L. Gemoya Seattle, WA (55) Greta M. Weston Ketchikan, AK (81) Peter J. George Sitka, AK (84) Eugene G. Widen Sitka, AK (87) Alfred Gray Sitka, AK (83) Ada L. Wilkin Pacific, WA (78) Erika M. Hall Seattle, WA (46) Bruce K. Williams Anchorage, AK (61) Herbert Lee Hanson Sr. Petersburg, AK (77) Barbara Hartman Bellingham, WA (88) Alfred Jack Kake, AK (50) Paul S. Jackson Sacaton, AZ (66) Peter T. Johnson Carcross, YT (77) Please note that Sealaska will publish shareholder names only after the Shareholder Relations Department has received proper documentation.

3 3 Walter Soboleff Center to Showcase Dramatic Masterpieces Photo: Brian Wallace The cedar-clad exterior of the Walter Soboleff Center will feature gigantic 40-foot panels designed by Haida artist Robert Davidson that will give the building a dramatic façade unlike any other structure in Southeast Alaska. Upon entering the main foyer, visitors will see an enormous carved and painted Tsimshian clan house front by Tsimshian artist David A. Boxley. An interior clan house space will showcase a spectacular carved glass house screen flanked by two house posts depicting Eagle and Raven warriors made by Tlingit glass artist Preston Singletary. Archives Facility to Be Named for William L. Paul Sr. The archives facility at the new Walter Soboleff Center will be named for Tlingit Native rights leader William L. Paul Sr., who was a major force in Alaska history and is recognized as the father of the Alaska Native land claims. Paul was a gifted orator, Alaska s first Native attorney, the state s first Native legislator and a formidable warrior who fought on the front lines of many legal and political battles of his time. Yet his achievements are not as well known outside of Alaska Native circles, said SHI President Rosita Worl. SHI s board of trustees named the archives after him to honor his accomplishments and to publicly recognize him for his life s work, she said. Northrim Bank Makes Donation to Walter Soboleff Center Northrim Bank presented a check for $25,000 in Juneau and released the following statement: Northrim Bank is proud to be part of the Southeast region with the recent completion of the acquisition of Alaska Pacific Bank. The Walter Soboleff building was an ideal way to show Northrim s support of its new home. Northrim Bank is proud to support the outstanding work of Sealaska Heritage Institute and looks forward to being part of the community for many years to come. The Soboleff building will be a great resource for people throughout Southeast Alaska and we are proud to be part of this incredible new project, noted Bank President and CEO Joe Beedle. UPCOMING EVENTS Scholarship application period January 1 March 1 Contact michael.hoyt@sealaska.com Grand opening ceremony for the Walter Soboleff Center Juneau, May (date TBA) Latseen Leadership Academy Juneau, June 5-19 Contact sarah.dybdahl@sealaska.com Telling Our Stories Voices on the Land Summer Workshop: Juneau, July 6 11 (for 4th 6th grade) and July (for 7th 8th grade) Contact frank.katasse@sealaska.com Baby Raven Reads early literacy program for families with children ages 0 5 Juneau (dates TBA) Contact jackie.kookesh@sealaska.com Skin-sewing classes Juneau and Wrangell (spring, dates TBA) Contact davina.cole@sealaska.com SEALASKA TOOK ON THE RESPONSIBILITY of protecting and strengthening the container of wisdom left by our Elders. As a result, Sealaska established Sealaska Heritage Institute in 1980 to administer cultural and educational programs. Since inception Sealaska has donated roughly $16 million in cash donations and in-kind services to Sealaska Heritage Institute. A recent study found that for every dollar invested by Sealaska over the last nine years, SHI generated more than two additional dollars, in addition to providing employment and contract opportunities for more than 50 tribal members annually and incalculable educational and cultural benefits.

4 SEALASKA LAND STEW 4 Working Together in the Tongass National Forest A team of researchers wades through a stream on Prince of Wales Island carrying measuring sticks and notepads. Dr. Doug Martin, a fisheries scientist from the University of Washington, writes down five under the category large woody debris. For 20 years, he has been wading through Election Stream and 17 other streams for one of the most comprehensive studies of timber practices in the western United States. "I'm pleased with how many people are engaged with the study, said Martin. So far, our research has been utilized not just by Sealaska but by the state of Alaska, other timberland owners, agencies and other scientists. In 1992, Sealaska began investing in science to better inform management about its 290,000-acre land base. The goal of the research was to ensure both salmon habitats and water quality were healthy on Sealaska s lands. As a result, a highly collaborative study was initiated. With the help of Martin and his team, Sealaska now has comprehensive data from 18 different rivers and streams on Sealaska lands. The same data will provide information to state and federal entities. People tend to talk about land in terms of personal experience, said Brian Kleinhenz, Sealaska forester and Natural Resources Department manager. Sealaska is interested is looking at its lands in a consistent way, and that s why it s so critical that we continue ongoing scientific research in a collaborative way. This forest and fish monitoring and research project was launched in response to the revised Alaska Forest Resources and Practices Act (FRPA) in the early 1990s, to understand the effectiveness of the revised law and the impact of timber harvest practices. Twenty years later, the research demonstrates what we ve always known: the streams are intact and thriving. The results of the project demonstrate the current forest regulations are effective in maintaining fish habitat following timber harvest, said Jim Eleazer, forest resources program manager at the Alaska Department of Natural Resources. Despite all of the economic factors the 2008 crash, streamlining budgets at Sealaska, and declining revenues from timber harvesting Sealaska stood firm in supporting research of our lands. Sealaska Land Stewardship Sealaska takes good care of its land and strives to be a good neighbor in the Tongass National Forest. Today, we practice stewardship for the future over all our forested lands and adhere to federal and state regulations, sometimes exceeding those guidelines. We do this by utilizing the latest silviculture techniques. Our forestry, stream protection and wildlife field experts are some of Alaska s finest. It is a Native value to intimately know and take care of our lands, said Anthony Mallott, Sealaska president and CEO. We see investing in research as a key part of us utilizing and managing our lands for generations to come. It s our responsibility to ensure that our land use practices do not harm the natural habitat that is so important to our people. Read the full story at sealaska.com

5 ARDSHIP IN ACTION Sealaska Partners for Fish Habitat The Southeast Alaska Fish Habitat Partnership (SEAKFHP) was formed in the spring of 2014 to bring together communities, governments, tribes, landowners, businesses and nonprofits to develop relevant fish habitat conservation strategies. Sealaska joined SEAKFHP because of its interest in the development of natural resources based on science and research. We are thrilled to have Sealaska join and look forward to working closely with the region, said Deborah Hart, Southeast Alaska Fish Habitat Partnership coordinator. In My Own Words YOUTH BOARD ADVISOR SHARES INTROSPECTION ON SEALASKA S LAND MANAGEMENT In early October 2014, Youth Board Advisor Alyssa London visited Sealaska lands on Prince of Wales Island for the first time with Brian Kleinhenz, Sealaska forester and Natural Resources Department manager. Below is her own account of her ideas and preconceptions before her visit, and how they changed as a result. Read the full story at sealaska.com MY PRECONCEPTION My impression of Sealaska s timber harvesting practices prior to my site visit was abysmal. I did not understand how Sealaska could espouse that they are governed by Native values, but then engage in harvesting of their lands. I misunderstood that the lands are only meant to be preserved, instead of actively used. WHAT I LEARNED What shareholders like myself need to understand is the meaning of land stewardship. Sole preservation is not what Sealaska intends for its lands instead it uses our forested lands as productive entities to create jobs and timber products. Once I understood this, then I could see how we balance our land use practices with our Alaska Native values. Sealaska General Counsel Araujo Joins Tongass Advisory Committee Jaeleen Araujo, Sealaska vice president general counsel and corporate secretary, serves on the Tongass Advisory Committee (TAC). The USDA established the federal advisory committee to advise the Secretary on transitioning to a young growth forest management program. The 15-member committee met in Sitka, Alaska in November. Attending the meeting was the Under Secretary for Natural Resources and Environment Robert Bonnie. Senator Lisa Murkowski and Araujo I am happy to bring my understanding of young growth management and harvest from my work at Sealaska, said Araujo. "I am also participating to ensure that second growth activities on the National Forest provide opportunities to support community vitality through jobs and the injection of capital into local economies, while also being mindful of cultural, social and environmental considerations. THE ENVIRONMENTAL IMPACT OF SEALASKA S LAND USE IS NEGLIGIBLE I was skeptical about the impact of land management practices. First I learned that Sealaska only owns 1.3 percent of the total land in Southeast Alaska. This piece of information stood out to me because the percentage is so negligible. I think if shareholders had a better visual understanding of the miniscule size of our land base, then any fears that we are damaging the forest may subside. Furthermore, when I looked at the diagram that showed the rest of the 98.7 percent, I learned that it is mostly protected National Forest, or owned by the federal government for use at its discretion. The amount of lands that the federal government uses for timber production is comparatively negligible to the amount of protected forestlands. 5 SEALASKA WORKS TO CREATE A HEALTHY SECOND GROWTH FOREST I find clear-cutting to be very ugly and depressing looking, and it seems like a misuse of our lands given our company values. Unfortunately, clear-cutting is a fundamental step in the process of farming trees and selling them as timber products, which is what Sealaska does with its lands. After seeing a clear-cut area that had been taken down a year before our site visit, I still think it is unsightly. But, on the good side, I was taken around to see all of the cedar saplings that had been planted to regenerate the forest. I learned Sealaska does this to help create the next second growth forest to harvest 60 years down the line, which is at a faster rate than if the forest regenerates itself. Without good management, the forest would likely take 100 years or more to regenerate. MY CONCLUSION Given that Sealaska is a for-profit corporation, I think they are doing the best they can to balance Alaska Native values, and create revenue from our forests. Sealaska makes some money by extracting the natural resources provided on the lands, and does so in a sustainable and environmentally conscious way. With this approach they are staying as close to Alaska Native values as possible with the extraction of this resource, by having sustainable replanting and forest maintenance practices like thinning and protection of natural habitat.

6 6 Sealaska Announces December 2014 Distribution Sealaska Joins White House Challenge for Young People 2014 has been a year of change and new focus as Sealaska establishes its path to profitability. "As projected, the December 2014 distribution does not include a payment from operations, said Joseph Nelson, Sealaska board chair. It does include payments from the Marjorie V. Young (MVY) Shareholder Permanent Fund and ANCSA Section 7(i). Though this was fully anticipated, no one is satisfied with these results. However, it is important to note 2014 is a significant turnaround from We are making substantial strides toward building a corporation that is both profitable and honors our Native values. Sealaska can and will do better moving forward, added Nelson. He noted that the corporation s contributions to Sealaska Heritage Institute will not be impacted and that working to uphold, honor and preserve culture remains of utmost importance. The last 12 months have brought much change to Sealaska, including new corporate and board leadership as well as significant restructuring and streamlining of operations. We are moving forward with an acquisition process that will bring new net income to Sealaska, said President and CEO Anthony Mallott. However, the income and revenue from the new acquisition will not provide material financial benefit until 2015/2016. This is important for all of us to understand. While today will be remembered as a time of transition and change, future generations will know we took the necessary actions to ensure long-term benefit for Tlingit, Haida and Tsimshian people. The December distribution will consist of payments from the Marjorie V. Young (MVY) Shareholder Permanent Fund and a payment from the ANCSA Section 7(i) revenue pool. The MVY Shareholder Permanent Fund is fulfilling its promise as a stable source of annual distributions to shareholders in perpetuity. Sealaska is partnering with Central Council of the Tlingit and Haida Indian Tribes of Alaska (Central Council) on a White House challenge called My Brother s Keeper (MBK). The focus is to build and execute robust plans to ensure that all young people no matter who they are, where they come from, or the circumstances into which they are born can achieve their full potential. The first step in accepting the MBK challenge was organizing a Local Action Summit in Juneau on November 7. My Brother s Keeper is focused on six milestones: 1. Getting a Healthy Start and Entering School Ready to Learn 2. Reading at Grade Level by Third Grade 3. Graduating from High School Ready for College and Career 4. Completing Post-secondary Education or Training 5. Successfully Entering the Workforce 6. Keeping Kids on Track and Giving Them Second Chances Central Council is one of two Alaska tribes to accept the White House challenge. The other is Hoonah Indian Association. View more photos and listen to speeches from the summit at sealaska.com. AFN Honors Frank O. Williams On October 24, the Alaska Federation of Natives recognized Frank O. Williams for his work in uplifting and unifying Alaska Native people with the organization s Dr. Walter Soboleff Warriors of Light award. Old age may have restrained his mobility and lowered the volume of his voice, but Frank O continues to speak clearly and shine the light of his great experience on the issues of the day that concern him. Known to his friends as Frank O, he formally introduces himself as Tlingit, Raven, D'akdeintaan, Mt. Fairweather House, Chookaneidi Yadí. Born at Dundas Bay, now part of the Glacier Bay National Park, and raised in Hoonah, Frank O spent much of his adult life in Sitka, Alaska. *Sealaska would like to acknowledge Juneau author Peter Metcalfe for documenting and writing an article about Frank O. Williams. Read the full story at Sealaska.com. Metcalfe, along with Kathy Ruddy, have also published a book, A Dangerous Idea: The Alaska Native Brotherhood and the Struggle for Indigenous Rights.

7 7 CEO Letter CONTINUED PROGRESS TOWARDS STRATEGIC PLAN At the last board meeting we recessed so we could celebrate Walter Soboleff Day. The state of Alaska now recognizes his birthday on November 14, to honor his impact on Alaska Native people. Dr. Soboleff has influenced my commitment to working together for the common good of future generations. Anthony Mallott, President and CEO As we look back on 2014, we recognize that together we have created change at Sealaska. Shareholders have created change by participating in the proxy process and electing new leadership on the board of directors. At Sealaska the board, along with management, continues to focus on two areas to accomplish our strategic goals. 1) Restructuring and containing costs 2) Continuing our process of due diligence as we search for a new acquisition We are finding efficiencies at all levels. For example, we are integrating the service companies within Sealaska Government Services while building a collaborative business development team. They will focus efforts on higher margin and greater value-add contracts. Additionally, Sealaska is restructuring by selling companies like Security Alliance, a business that was analyzed to be outside our core area of operating focus. I feel strongly that this is the most intentional and thoughtful process we have undergone for an acquisition. Speed is important, but more important is getting it right. We want our shareholders to feel they can get behind this process. One of the strategic goals for Sealaska is to be self-sustaining with income from operations. This will allow us to use ANCSA Section 7(i) income and our investment fund income for further investments, to increase long-term growth and to widen shareholder benefits. During this transformative year, shareholder distributions are coming from ANCSA Section 7(i) and the Marjorie V. Young (MVY) Shareholder Permanent Fund. I am not happy that the distribution does not include any payments from operations, but this is a result of the 2013 losses. The MVY Shareholder Permanent Fund is doing exactly what it was intended to do, to provide a stable source of dividends. The 7(i) fund is also working as ANCSA intended. While we paid into 7(i) during the last few decades, today we see it providing back positive income. I want to remind shareholders that Sealaska s acquisition goals will not be accomplished until as we bring on new operating investments. We look forward to moving full steam ahead in the new year. As always, I appreciate your feedback as well as patience, during this time of significant change. I wish you a peaceful holiday season with your family and friends. Sincerely, Anthony Mallott Sealaska community at the first Walter Soboleff Day Shareholders in the Military CHRISTOPHER JACOBER Sealaska honors and appreciates shareholders and their family members who are serving in our armed forces. Christopher Jacober was deployed to Afghanistan earlier this month as a specialist with the Oregon National Guard s 1st Squadron, 82nd Cavalry, of the 41st Infantry Brigade Combat Team. Christopher is Haida and comes from Springfield, Oregon. His grandmother was Darlene (Field) Stensland, and his greatgrandmother was Jane (Skultka) Field, daughter to Benson and Bessie Skultka. Christopher Jacober JOSHUA SABO Joshua Sabo is a petty officer second class and has served in the Navy for four years. Joshua is a third generation sailor, following his grandfather and his mother. He is currently stationed on the U.S.S. Vicksburg in Mayport, Florida. His grandmother is Bernice George, and his great-grandmother is Lydia George, of Angoon, Alaska. Joshua Sabo

8 In This Issue VA LUES I N ACTION PAGES 1 Acquisition Update Our Strength, Our Leadership 2 Shareholder News 3 Our Culture 4 5 Our Lands 6 Sealaska News The State of Alaska recently recognized November 14 as Dr. Walter Soboleff Day. We are grateful for Dr. Soboleff s infinite wisdom and his ability to lead by example. His impact on Alaska Native people will last forever. 7 CEO Letter VA L U E S I N A C TION MORE ABOUT OUR VALUES: ww w. SEAL AS KA.c om EA LA SK A Visit us on Fa ce book EA LA SK AK WA AN VISIT December 2014 Sealaska One Sealaska Plaza, Suite 400 Juneau, AK toll-free Our PURPOSE is to strengthen our people, culture and homelands. Our VISION is to be an Alaska Native enterprise of excellence built on our core cultural values. The Sealaska Shareholder is published for shareholders free of charge by Sealaska. Subscription information for non-shareholders is available by writing to Sealaska Communications. w w w.sealaska.com Printed on 30% post-consumer recycled paper.