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Letter from the President, Spring 2017

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Every year during shareholder meeting season, I travel throughout the Bristol Bay region. These trips provide me a welcome opportunity to meet with many of you face-to-face and to hear first-hand about the issues and challenges confronting our communities. Some themes are familiar—the cost of energy, securing the fishery, and Pebble Mine. These are the things of greatest concern to people living in Bristol Bay; the things you want to talk about because they define life in the region. Last year, the volume was turned up on a specific crisis we’ve been hearing about for a while, but hadn’t yet begun to address—the drug and opioid epidemic.

Out on the road last fall, many of you let me know that this problem is only getting worse. You shared stunning stories about how our communities are being affected. I heard about a group of school kids in one community who are being approached by drug dealers on school property. I heard numerous stories about Elders—parents and grandparents— who are receiving dividend checks from BBNC only to have them raided by their own family members. When kids are facing decisions on the school yard about whether to buy drugs or interact with people who are on drugs, well, that’s the very definition of an epidemic. And when people are stealing from their own grandparents to get their fix, then we’ve definitely crossed a line.

We realized it was time to do something. As a for-profit corporation, BBNC can bring certain things to the table— facilitation, planning, strategy, and dollars—to help address this epidemic and its harmful effects. But we can’t do it alone. So, working with the full group of Bristol Bay Partners—Bristol Bay Native Association, Bristol Bay Area Health Corporation, Bristol Bay Economic Development Corporation, Bristol Bay Housing Authority, and BBNC—we created a volunteer Task Force that represents every facet of the region and brings hands-on experience and expertise to help us navigate towards a solution.

The group met for the first time in February. You can read more about that specific meeting and the work ahead of the Task Force on page 7, but I’ll add here that the very fact the group assembled and met so quickly, the fact that it’s already taking in volunteers, and that it’s beginning to identify funding sources—that’s a win right out of the gate. We have the attention of the governor and other important stakeholders across the state. That, too, is a win. I suspect that in a short time from now, with this kind of wind in its sails, the Task Force will be well on its way to uncovering proven solutions to curb this problem—either borrowing great ideas from around the state or across the country, or maybe devising innovative new ideas right here in Bristol Bay.

BBNC is committed to shareholder benefits—paying dividends, and providing employment and educational opportunities. And in addition to the toll opioid addiction takes on families and communities, this epidemic in some ways inhibits on our ability to deliver on our promise to you.

Fewer and fewer people are employable. State and federal funding for social programs designed to address this kind of problem are being cut. To the extent that the epidemic chips away at the economic viability of our region, we have yet another reason to see that the Task Force succeeds.

Another fiscal year comes to a close

March 31 marked the end of FY17. From a revenue standpoint, BBNC will be on target to hit what we budgeted, in the neighborhood of $1.6 billion. Our overall net income is expected to be down this year, largely because of the downturn in industrial services—the price of oil is down, the overall number of industrial services projects is down, and exploration in the industry is down. All of this continues to impact BBNC’s industrial service companies. The silver lining is our cash flow is still incredibly strong. This means our dividend program will remain robust and our ability to invest and diversify remains solid. So while it’s been a bit of a down year, BBNC remains financially healthy. And our growth strategy over the next 4-5 years is unchanged. We’ll continue to invest in our companies, to acquire new companies, and to diversify further.

And finally…

Later this summer, BBNC will complete a major renovation of the first and second floors of our corporate headquarters in Anchorage. On the first floor, we’re creating an inviting space that will welcome shareholders, their families and the general public and encourage interaction with the BBNC team. All BBNC departments that regularly work with shareholders—Shareholder Development, Human Resources, Shareholder Relations and the BBNC Education Foundation— will be housed on the first floor in a new Shareholder Service Center. The renovated space will also be more conducive to public events and will feature a new waiting area, a business center, conference rooms, and training spaces. We look forward to welcoming all of you to the new space in just a few months.

Enjoy the lengthening days and the coming spring weather. And as always, thank you for your continued support.

– Jason Metrokin