NANA shareholders: a diversi ed workforce annual report 2006 · W 1 Letter To Our Shareholders 2...

annual report 2006NANA shareholders: a diversified workforceNANA-tkutni lxauruat: Atlakaabiieik Savaaqaqtuat

W

1 Letter To Our Shareholders

2 2006 At A Glance

3 2006 Shareholders of the Year

5 Five-Year Financial Highlights

6 Management Discussion and Analysis

15 A Basic Guide To Financial Terms

18 Independent Auditors’ Report

19 Financial Statements

25 Notes To Financial Statements

48 Board Of Directors

49 In Memoriam

Table of Contents NANA ANNuAl report 06

Photo credits Chris Arend Seth Kantner Maija Johnson

Cover photos / Abe Armstrong / Pilot / Hageland Aviation / Kotzebue (top)

Mary Viveiros / Staff Nurse / Maniilaq Health Center / Kotzebue (bottom left)

Todd Ramoth / Millwright / Red Dog Mine (bottom right)

High SchoolSpring Interns

NANA’S future work force in the making.

WDella Luther / Cheryl BoothManiilaq Health Aides / Noorvik

Our mission Improve the quality

of life for our people

by: protecting and

enhancing our lands,

promoting healthy

communities,

maximizing economic

growth with decisions,

actions, and behaviors

inspired by our Iñupiat

Ilitqusiat values

consistent with

NANA’s core principles.

Our visionNANA will be a respected, profitable,

multi-billion dollar corporation.

Who we are NANA acts on behalf of our shareholders, the

Iñupiat people of Northwest Alaska. In 1972,

when NANA was formed, we had about 4,400

shareholders. With the addition of children born

since incorporation, we now have more than

11,000 shareholders.

The heart of our company is NANA Regional

Corporation, Inc., which focuses on promoting

the economic and social well-being of

shareholders. We created NANA Development

Corporation to oversee our business activities,

to create shareholder job opportunities and to

generate the income needed to fulfill NANA’s

vision, mission and core principles.

NANA’s core principlesHonesty and integrity will govern our activities.

Commitments made will be fulfilled.

Everyone will be treated with dignity and respect.

Vern Cleveland OTZ Telephone / Noorvik

Sinstrumental in helping us to do so.

In 2006, NANA continued our commitment to

shareholder development with enhanced emphasis

on progress, and by expanding the Shareholder

Development Program. A new level of shareholder

outreach has been established through expanding

the internship program to include high school

students and our partnerships will allow NANA to

continue to participate in the career fairs in 2007. We

are very excited about the increased opportunities

we are able to provide to our shareholders.

NANA’s success is based on the hard work,

dedication and resourcefulness of our employees.

We are very proud and grateful for your gifts and

talents. Just as the skilled hunter provides for family

and community, NANA will help provide for the

well-being of our shareholders.

Quyaqpaurabiptibiñ for the opportunity to serve you.

May God’s blessings shine upon you throughout

the year.

Donald G. Sheldon / NalikakChairman

Marie N. Greene / KasafnaalukPresident / CEO

Donald G. Sheldon / NalikakChairman

Marie N. Greene / KasafnaalukPresident / CEO

NANA

Letter to our ShareholderS

At NANA, we are blessed with a diverse, multi-

talented shareholder base. As we have for the past

several years, we continue to pursue our financial

goals while celebrating our Iñupiaq culture and

values. We are fortunate to have our traditional

values to guide us as we make business and

management decisions.

Our theme for the Annual Meeting this year is

“NANA Shareholders: A Diversified Workforce.” We

are proud of the shareholders who work for many

different organizations, small and large throughout

the world. We encourage shareholders to take

advantage of education and training opportunities.

NANA’s dedication will continue as we work

together to build the shareholder workforce needed

for the growing economy.

In the past year, progress was made on a number

of board initiatives. Our Iñupiaq values have

guided us through many challenges. In order to

help share and promote these values, NANA’s

�Iñuuniajiqput�Department has worked with

Rosetta-Stone on the production of a Coastal

Iñupiaq Language CD. The Iñupiatun Eskimo

Dictionary has also been reviewed and both are

anticipated to be released this year. Learning and

speaking our Iñupiaq language is a vital part of

embracing our traditional values as we navigate

today’s world, and both of these tools will be

It’s an honor to report that the NANA family of

companies has had a profitable year. Taikuu to our

dedicated employees for their hard work during the

past year.

Financially, 2006 was another record setting year for

NANA and our subsidiaries. Both the revenues and

net income grew by more than 50%. The revenues

reached over $800 million and the net income grew

to more than $16 million. More importantly, NANA

and our partners employed over 800 shareholders

and paid over $31 million in wages to them. While

we are grateful for the increased royalties that

higher zinc and lead prices have given us, we are

equally grateful for the record level of income from

our operating businesses as a group. We will strive

for even greater achievements in 2007.

� ��

06• A major focus in 2006 has been to evaluate the

proposed Elder Settlement Trust. The purpose of

the trust would be to provide additional support to

elders 65 and older. It was NANA’s intent to bring

this important initiative to the shareholders for a

vote in March of 2007. However, it is delayed until

an IRS 501(c)3 ruling has been made.

• The Shareholder Relations Committee and staff

attended several shareholder forums throughout

the year in Anchorage and Fairbanks.

• The Shareholder Relations Department

completed a shareholder survey and reviewed

findings with the Shareholder Relations

Committee and NRC Board of Directors. The

survey results were published in a special edition

of the Hunter in October.

• �Iñuuniajiqput Department staff worked with

other organizations to sponsor the Maori/Iñupiaq

Exchange in June with more than 80 participants

from the region. Follow up meetings with local

elders’ councils are being held in each village.

• NANA continues to work with other regional

organizations on common goals. The Northwest

Arctic Leadership Team has held village and local

leadership meetings throughout the year. The

Quad Board meeting was held in August.

• The NANA Regional Corporation (NRC) Board of

Directors declared a $7.00 per share dividend at

their September 27, 2006 Board meeting in Kobuk

— the highest dividend paid to our shareholders.

$9.4 million in dividends were paid to more than

11,000 shareholders on November 15, 2006.

• NRC issued a permit to Barrick Gold for minor

exploration in the Ambler Mining District.

• A study is currently being done to identify a

gravel source for the community of Ambler. The

NRC Lands & Natural Resources Department

continues to work with the community to identify

that source.

• The Northwest Arctic Borough and NANA jointly

funded this year’s Resource Protection Program

(Trespass Program) in order to minimize hunting

conflict throughout the region.

• NANA worked closely with Teck Cominco in

developing the Mine Reclamation and Closure

Plan. This plan must be prepared every five years

to ensure the environment is protected after

the mine is closed. The Mine Reclamation and

Closure Plan considers any potential long term

monitoring of air quality, waste rock, mine pit, and

water quality.

At A Glance 2006

• NANA’s net income set a new all time record for

a fiscal year in 2006 growing to more than $16.0

million.

• NANA’s revenue grew to $805.8 million, which was

a 52.9% increase over last year. Total assets grew

to $456.4 million, marking a 19.6% increase over

2005.

• Shareholders’ equity grew to $155.5 million or

$116.31 per share, up from $124.8 million or $95.17

per share in 2005.

• NANA’s investment portfolio of marketable

securities grew by 7.5% from $63.9 million in 2005

to $68.8 million in 2006.

• Zinc prices continued to rise – beginning the year

at $.62 per pound, hitting a high of $1.70 in May

2006 and averaging $1.19 per pound in fiscal

year 2006.

• NANA’s 2006 total contributions to social and

cultural programs increased 25.2% to more than

$2.3 million.

• In 2006, we increased the number of shareholders

working for our company. NANA shareholders

were paid $31,392,000 in salaries and wages by

NANA and our partners.

��

Sr.R

Ayyatafaq has been a

strong advocate of our

subsistence way of life. He

has offered his traditional

knowledge to many outside

agencies, such as, the

Alaska Dept. of Fish and

Game, and the US Fish and

Wildlife Service, where he

has worked at the Selawik

shelter cabin for many

years. Currently, he offers his

support and knowledge as a

staff member at the Maniilaq�Mapsibvik Camp, a traditional

camp, where alcohol

rehabilitation treatment is

offered to young adults and

their families.

Ayyatafaq is a strong

positive example for other

shareholders giving the

knowledge he has to anyone

who asks or needs it. He

lives a quiet life in Selawik

with his wife, Emma.

A number of nominations were received this year.

The Regional Elders Council Selection Committee

had a difficult time narrowing those nominations

down to one, so NANA has decided to honor two

great men.

Ralph Ayyatafaq Ramoth, Sr. / Selawik

We are accustomed to honoring political,

corporate and social leaders. It is right that we

recognize their contributions to our people and

community.

But in smaller and quieter ways, there are

those among us who demonstrate the NANA

spirit in their daily lives. Such a man is Ralph

Ayyatafaq Ramoth, Sr.

Born in 1932, amidst the incoming western

culture, he continued to teach his children

the Iñupiaq way of life. Speaking in Iñupiaq,

living in Iñupiaq. Jane Cleveland of Ambler

stated, “Ralph Ramoth is one example of a true

Iñupiaq Elder who lives and follows the Iñupiat

Illitqusait.”

In spite of cultural changes and vast weather

conditions, Ayyatafaq has persevered and

has been a successful hunter, fisher and

trapper. Often times sharing his knowledge

with the younger generation.

Shareholders Of The Year Ralph Ayyatafaq Ramoth, SR.

� ��

Sr.Roswell Qalayuaq “Ross” Schaeffer Sr.

Kotzebue

Roswell Qalayuaq “Ross” Schaeffer Sr. was

born and raised in Kotzebue, Alaska, to John Sr.

and Annie Schaeffer of Ivik.

Throughout Qalayuaq’s career as mayor, he

has shown us true Iñupiaq leadership. He has

been a past president of NANA, Mayor for the

Northwest Arctic Borough, headed the Alaska

Beluga and Whaling Commission, ensured our

tribal land has been respected, participated

in the ICC, and championed the start of the

Northwest Arctic Leadership Team.

Qalayuaq promoted healthy communities, with

every aspect of his work. He was a role model

for our younger generation to look up to. He

spent much time teaching young men to hunt.

Qalayuaq is an avid hunter, as are many Iñupiaq

men, and he always remembered to bring

along anyone who was interested in learning

his ways. He taught hunting to many people, in

his quiet and positive manner.

Lastly, Qalayuaq is known throughout the

region as a talented carver. “As a hunter, he is

able to capture the true meaning of the culture

using his observations in his work. His use of

Shareholders Of The Year Roswell Qalayuaq schaeffeR, sR.

this traditional knowledge

assists him in his carving

every day of his life. His

Iñupiaq culture is apparent

in his work, which is unique

in materials and execution.”

With Qalayuaq’s

assistance, the entities

within the borough have

developed a regional

arts and crafts center,

Sulaifich, where he has

been spending a lot of

time working with young

people.

Qalayuaq lives in Kotzebue

with his wife, Millie.

��

5yr

NANA Regional Corporation, Inc. and SubsidiariesAs of and for the years ended September 30, 2006, September 25, 2005, September 26, 2004, September 28, 2003, and September 29, 2002.

FY06 FY05 FY04 FY03 FY02

Revenues $ 806,000,000 526,900,000 331,100,000 266,900,000 201,900,000

Net Income (Loss) 16,042,000 10,845,000 3,321,000 2,114,000 (321,000)

Assets 456,439,000 381,802,000 213,694,000 174,112,000 146,582,000

Long-Term Debt and Line of Credit 101,819,000 107,365,000 64,994,000 68,670,000 64,236,000

Shareholders’ Equity 155,454,000 124,819,000 63,472,000 54,189,000 43,745,000

Shares Outstanding 1,336,600 1,311,600 1,288,400 1,271,600 1,237,900

Earnings (Loss) Per Share 12.00 8.27 2.58 1.66 (0.26)

Dividends Paid Per Share 7.00 3.81 2.00 1.50 —

(Dividends are paid in November or December following the end of the fiscal year.)

Five-Year Financial highlights

$1,000

600

800

400

200

0

REVENUE BY YEARmillions

805.8 526.9 331.1 266.9 201.90406 05 03 02

REVENUE

$500

300

400

200

100

0

TOTAL ASSETS &SHAREHOLDERS’ EQUITY

millions

456.4TOTAL ASSETS

SHAREHOLDERS’ EQUITY

381.8 213.7 174.1 146.6155.5 124.8 63.5 54.2 43.7

0406 05 03 02

$20

10

15

5

0

-5

NET INCOME BY YEARmillions

16.0 10.8 3.3 2.1 (0.3)0406 05 03 02

NET INCOME

$8

6

4

2

0

DIVIDENDS PAID PER SHAREdollars

7.00 3.81 2.00 1.50 00406 05 03 02

DIVIDENDS

� ��

mDwight OutwaterNANA Oilfield Services, Inc.Deadhorse

Financial

Overview

During fiscal

year 2006

(FY06), NANA’s

consolidated total

assets grew by

19.5% to $456.4

million from $381.8

million at the end

of fiscal year 2005

(FY05).

Shareholders’ EquityShareholders’ equity represents all of NANA’s

recorded assets, minus the amounts the

Company owes others. Shareholders’ equity

was $155.5 million at the end of FY06, up

25.0% from $124.8 million at the end of FY05.

Shareholders’ equity was $63.5 million at the

end of FY04. The largest portion of the FY06

operates as a managed holding company with

operating subsidiaries throughout

the United States. These subsidiaries operate

in the following business segments:

• Contracted government services;

• Hospitality and tourism;

• Professional and management services; and

• Oilfield and mining support.

In addition, NANA generates passive income

from the following sources:

• Investment income from marketable

securities;

• Natural resource

royalty income

net of sharing with

other regional

corporations; and

• Natural resource 7(i)

income received

from other regional

corporations.

Corporate OverviewNANA Regional Corporation, Inc. (NANA

or the Company) was formed in 1972 as

one of the 13 Regional Native Corporations

created as a result of the Alaska Native Claims

Settlement Act (ANCSA). NANA’s portion of

the ANCSA settlement included 2 million acres

of land and approximately $44 million. NANA

is now owned by more than 11,000 Iñupiat

shareholders, descended from families living in

Northwestern Alaska.

NANA Development Corporation (NDC), a

wholly owned subsidiary of NANA, is

responsible for overseeing the business

interests of the Company. NDC

Management Discussion and Analysis Our Businesses

$500

300

400

200

100

0

TOTAL ASSETSmillions

213.7TOTAL ASSETS

CURRENT ASSETS

381.8 456.4153.7 252.7 298.7

0504 06

continued on page 7

Maude BlairStaff AttorneyNANA Development Corporation

��

EMD&A

to invest in our

businesses.

That capital can

come from only

two sources,

income earned

but not paid out

as dividends

or additional

borrowings from lending institutions. NANA’s

lending institutions continue to increase our

credit facilities as long as NANA continues

to grow profitably; however, in addition to

borrowings, NANA must retain a significant

portion of earned income to achieve

our strategic growth objectives. NANA’s

management believes the Company is

capable of funding future cash requirements

Shareholders’ Equity continued

and FY05 increase ($19.8 and $40.2 million,

respectively) is due to recording assets

representing future tax savings related primarily

to depletion deductions from the mining activity

at Red Dog Mine. Other increases resulted

from changes in

the market value

of marketable

securities and

continued

collective

income growth

in the Company’s

operating

businesses.

The Company

recorded record

earnings of $16.0

million during 2006. Of that, $9.4 million was

distributed to shareholders as dividends in

November 2006.

Liquidity & Capital ResourcesIn order to continue growing at the current

pace, NANA needs additional working capital

with the cash generated from business

operations, and with careful use of established

lines of credit. NANA’s current assets including

its investment portfolio comprise 65.4% of

NANA’s total assets. Current assets are defined

as cash and property of the Company that is

expected to be converted to cash within one

year. Continued growth in NANA’s subsidiaries

resulted in a 29.8% increase in consolidated

$200

150

100

50

0

TOTAL SHAREHOLDERS’ EQUITYmillions

63.5 124.8 155.50504 06

Patricia PaulAttorney At Law / LaConner / WA

Robert Nelson / Safety Training Officer / TeckCominco • Lexi Staheli / Job Shadow Student / Red Dog Mine

� ��

oand is focused

on securing a

sufficient revenue

base to become

profitable and

stable.

This segment

reported EBIT of

$27.5 million in

FY06, a 38.1%

increase over EBIT of $19.9 million in FY05.

FY05 EBIT were 177.7% higher than the $7.2

million in FY04. This segment continues to be

a significant part of NANA’s strategic business

plan. Management expects both revenue and

EBIT from contracted government services to

grow by approximately 25% in FY07.

Hospitality & TourismThis segment consists of five hotels located in

the state of Alaska. In Anchorage, NANA owns

a 60% interest in the Courtyard, the SpringHill

Results of Operations

Contracted Government ServicesNANA owns a controlling interest in four

management companies whose subsidiaries

are government service providers: Akima

Management Services, Inc. (Akima) located

in Anchorage and Charlotte, North Carolina;

Qivliq LLC (Qivliq) located in Anchorage, with

significant operations in Fairfax, Virginia; Ki

Professional Services Group, LLC (KPSG)

located in Colorado Springs, Colorado; and

Akmaaq, LLC located in Anchorage, Alaska.

Earnings before interest and taxes (EBIT) from

this segment have increased in each of the

past three years. To

create an ongoing

pipeline of growing

profitable companies,

NANA has established

entities that are

working through their

“start-up” period.

Akima, Qivliq, and

KPSG are profitable

and stable. Akmaaq is

still in a start-up period

accounts receivable from $137.8 million in 2005

to $178.9 million in 2006. Total current assets

increased 18.2% from $252.7 million in 2005 to

$298.7 million by the end of 2006. This increase

was greater than the increase in current

liabilities and lines of credit which increased

17.6% from $209.5 million to $246.5 million.

At September 30, 2006 and September

25, 2005, NANA had lines of credit available

totaling $100 million, a 100% increase of $50

million available at September 26, 2004.

The outstanding balance on lines of credit

decreased 5.2% from $78.5 million in 2005 to

$74.4 million in 2006.

The Company maintains a central treasury

with its primary lender. The central treasury

aggregates existing idle cash to pay down the

balance on the lines of credit.

Operating cash flows continue to be positive

with $26.6 million, $4.0 million and $7.0 million

in cash provided from operations during FY06,

FY05 and FY04 respectively.

Dean PungalikClinic Construction Clean-up Kobuk

$30

15

20

25

10

5

0

CONTRACTEDGOVERNMENT SERVICES

EBITmillions

7.2 19.9 27.50504 06

continued on page 9

��

HMD&A

income was 10.7% lower than FY04 income

at $3.7 million. The Anchorage properties

continue to perform consistent with

expectations based on established operating

budgets. Revenues and EBIT for 2007 are

expected to be consistent with 2006.

Professional & Management ServicesThis business segment includes NANA

Management Services, LLC (NMS); NANA

Colt Engineering, LLC (NANA/Colt); DOWL

Engineers, LLC (DOWL); ASCG, Incorporated

Hospitality & Tourism continued

Suites and the Residence Inn. In addition, NANA

owns a minority interest in the SpringHill Suites

in Fairbanks. NANA owns 100% of the Nullagvik

hotel located in Kotzebue, Alaska. All of NANA’s

hotels are managed by NANA Management

Services, LLC whose earnings are included

with the Professional & Management Services

business segment.

During the past three years the number of

available rooms in the Anchorage market

has increased

significantly due to

an increase in the

number of new

hotels. This has

put downward

pressure on

room rates and

occupancy.

Accordingly, EBIT

from this segment

decreased

4.2% in FY06 to

$3.2 million from $3.3 million in FY05. FY05

(ASCG) and Worksafe,

Inc. (Worksafe).

EBIT from this

segment has

increased steadily

from FY04.

$4

2

3

1

0

HOSPITALITY & TOURISM EBITmillions

3.7 3.3 3.20504 06

Rachel McClanahan / Administrative AssistantNANA Services, LLC / Federal Way / WA

Officer Nasruk Nay / Alaska State Troopers / Delta Junction

$12

6

8

10

2

4

0

PROFESSIONAL & MANAGEMENT SERVICES

EBIT*millions

7.0 9.4 11.80504 06

Includes earnings from both

consolidated and unconsolidated

entities

� �0�0

odue to significantly

increased market

prices for both

precious and

non-precious

metals. As a result,

management

expects both

revenue and

EBIT for this

business segment

to continue to

increase in 2007.

Investment Portfolio

Management

Marketable Securities Portfolio ManagementNANA’s investment earnings are realized from

dividends, interest, and the gains that occur

when portfolio managers sell securities.

services; NANA Major Drilling, LLC, which has

contracts for exploratory drilling for mining

operations in Alaska; and Arctic Caribou Inn,

Ltd. which provides oilfield camp support.

NANA’s share of EBIT from these business

interests increased

150.7% in FY06

to $3.6 million

from $1.4 million in

FY05 which was

a 161.1% increase

from EBIT of

$549,000 in FY04.

Mining activity has

increased in the

state of Alaska

Professional and Management Services

income increased in FY06 primarily from our

services provided to the oil and gas industry.

Income from our drug testing operations has

increased steadily from 2004 to 2006.

In total, this business segment’s EBIT increased

25.5% to $11.8 million in FY06 from $9.4 million

in FY05 which was a 35.3% increase from

earnings of $7.0 million in FY04.

Oilfield & Mining SupportNANA’s primary active consolidated subsidiary

in the oilfield and mining support business

segment is NANA Oilfield Services, Inc. (NOSI),

located in Deadhorse, Alaska. NOSI is a

provider of petroleum products and related

services to oilfield service companies and

mining companies in Alaska.

NANA has ownership interest in several other

entities providing contract support to the

oilfield and mining industries. These companies

include: NANA Lynden Logistics, LLC, which

provides trucking and other transportation

Officer Nasruk Nay / Alaska State Troopers / Delta Junction

$4

2

3

1

0

OILFIELD & MINING SUPPORT EBIT*

millions

0.5 1.4 3.60504 06

Includes earnings from both consolidated and unconsolidated entities

Renee Douglas Iñupiat Language / Culture Specialist NANA / Kotzebue

continued on page 11Pauline Morris

Owner, Morris Trading Post / Noorvik

�0�0

MMD&A

Natural

Resource

Management

Natural ResourcesNANA’s natural

resource earnings

come from three

sources: Red Dog

Mine royalties;

7(i) earnings from other Regional Native

Corporations (RNCs); and gravel sales and

land leases. Earnings of this segment were

$17.0 million in FY06, up 81.9% over earnings

of $9.4 million in FY05 which was a 30.8%

Marketable Securities Portfolio Management continued

The timing of sales cannot be predicted

and the profit NANA records is determined

by market conditions at the time of the

transactions. For

the year ended

September 30,

2006, NANA

had realized

investment

earnings of $5.7

million. This was

a 98.1% increase

over earnings

of $2.9 million

in FY05, which

in turn was a

58.0% increase over earnings of $1.8 million

in FY04. Management expects 2007 to be

a volatile year for marketable securities, but

overall expects investment earning consistent

with 2006.

increase over earnings of $7.2 million in FY04.

Zinc market prices ranged between 38 and

51 cents per pound in 2004; between 46 and

65 cents per pound in 2005; and between

65 cents and $1.70 per pound in 2006. In

Sandy Kowalski Principal June Nelson Elementary School / Kotzebue

Wilbur Atoruk / Truck Driver / NANA Lynden / Red Dog Mine

$6

2

4

0

MARKET SECURITIES PORTFOLIO EBIT

millions

1.8 2.9 5.70504 06

��

rthe next three to five years, management

expects market prices of zinc to remain at

or above 2006 average levels as worldwide

zinc demand continues to exceed available

supplies. Subsequent to NANA’s fiscal year

end, zinc prices have fluctuated between $1.65

and $2.00 per pound.

The operating agreement for Red Dog Mine

provides advance net smelter royalties

to NANA until Teck Cominco (TCAK) has

recovered its capital investment plus interest

and advance royalties. Should zinc prices

remain at or above 2006 levels during FY07

TCAK will recover all of its capital investment

plus interest and may recover all advance

royalties paid. After recoveries by TCAK,

NANA will receive a percentage of the net

proceeds from the mine instead of net

smelter royalties. The amount of net proceeds

that the mine generates is dependent on a

number of factors including, but not limited

to: market prices of zinc, lead and silver;

operating costs at the mine site; negotiated

terms with refiners and a number of other

factors. While management believes that net

$20

5

15

10

0

NATURAL RESOURCE EBITmillions

7.2 9.4 17.00504 06

Mary YoungersOwner, Printer’s InkAnchorage

Dan Snyder Jr.Alaska Technical Center / Kotzebue

proceeds payments will be significantly higher

than previous advance net smelter royalties

paid in the past, the nature of many of the

factors mentioned is extremely volatile and

accordingly; management cannot provide

reliable estimates for net natural resources

revenues for 2007.

Section 7(i) of the Alaska Native Claims

Settlement Act requires that a portion of

NANA’s natural resource earnings must be

shared with other RNCs. NANA distributed

resource earnings to other RNCs totaling $18.2

million, $9.9 million and $5.9 million in 2006,

2005 and 2004; respectively.

In return, NANA

receives a share

of natural resource

earnings earned by

other RNCs. These

earnings have proven

to be unpredictable

in the past since they

are dependent on

business decisions

continued on page 13

��

Social & Cultural Expenditures FY06 FY05 FY04

In-Region $ 320,028 208,216 160,063

Donations to Native Nonprofit Organizations 115,063 84,717 87,487

Camp Sivivuniigvik 36,586 64,507 60,171

Regional Elders’ Meetings 50,254 21,748 6,727

Resource Specialists 455,488 422,811 301,189

Aqqaluk Trust Scholarships 300,000 300,000 300,000

Aqqaluk Trust Education Department Administration 100,000 100,000 100,000

Aqqaluk Trust 7(i) Scholarship Endowment 269,964 269,964 250,000

Aqqaluk Trust Other Programs and Administration 250,000 250,000 —

Medical, Disaster, and Burial Assistance 105,673 83,548 105,742

Social and Cultural Committee 189,386 42,555 266,520

Rosetta Stone Language CD Project 100,199 — —

Language Commission 20,935 — —

Total $ 2,313,576 1,848,066 1,637,899

MD&A

Social & Cultural Programs

The Company’s earnings

are used, in part, for

social and cultural

programs of importance

to shareholders.

Expenditures are made at

the direction of the board,

Natural Resources continued

made by other RNCs and on the

market process of the related natural

resources. NANA received resource

earnings from other regions, net of

redistributions totaling $3.5 million,

$2.3 million and $1.2 million in FY06,

FY05 and FY04, respectively.

and reflect the guidance of committees focusing

on education and cultural programs. Expenditures

were also made to support other organizations

involved in Alaska Native issues of concern to

NANA shareholders and the NANA Region.

Siikauraq Whiting Mayor / Northwest Arctic Borough Kotzebue

��

nindustry, volatility

in the worldwide

spot-prices of

natural resource

commodities,

stock market

performance,

and the inability

to pass inflation-

based cost

increases through

to customers.

Future revenues

and earnings are

influenced by a number of factors, including

those outlined above, which are inherently

difficult to forecast. However, NANA believes

that it has the competitive and financial

resources for continued business success in

the markets in which it chooses to operate.

It is important to note that NANA’s actual

results could differ significantly from those

described in, or implied from, such forward-

looking statements, because of, among other

factors, continued uncertainty in the Alaskan oil

Special Note REGARDING

FORwARD-LOOKING

STATEMENTS

The statements contained

in this Management

Discussion & Analysis

of Financial Condition &

Results of Operations that

are not purely historical, or

that may be considered

an opinion or projection

concerning NANA or

its business, whether

expressed or implied,

are forward-looking

statements.

These statements may

include statements

regarding Management’s

expectations, intentions,

plans, or strategies

regarding the future. All

forward-looking statements

included in this document are based upon

information available to NANA on the date

hereof, and NANA assumes no obligation to

update any such forward-looking statements.

Kara SandvikVice President / Wells Fargo Bank Anchorage

Mamie Karmun / Executive Administrative Assistant, NANA Contracting Services / AnchorageDeb Billingsley / Executive Administrative Assistant, NANA Development Corporation / Anchorage

��

F 06expenses and taxes are paid. These are also

called income or profits.

EBIT: Earnings before interest and taxes.

Equity: This is the value of property, less the

amount that is owed on it. For example, if you have

a truck that is worth $12,000, but you still owe

$5,000 in payments, your equity is $7,000.

Expenses: Most people think of expenses as

part of the cost of living, like the monthly mortgage

payment on a home, or a telephone bill. For the

Corporation, expenses are costs required to

generate revenue. For example, if NANA buys

paper so that it can bill customers, the cost of the

paper is an expense.

Fiscal Year: Also called a financial year, a fiscal

year (FY) is usually 52 weeks long, but doesn’t

necessarily start on January 1. NANA changed

its fiscal year in 2006 from the last Sunday in

September to September 30.

Investment: An investment is money spent

on an asset that is expected to increase in value

or generate income sometime in the future. For

example, if you buy a house, you are making an

investment, hoping that when you sell the house

(the asset), you’ll get more than you paid for it.

LLC: A Limited Liability Company (LLC) is a

business organization that combines elements of

both partnerships and corporations that limits the

legal risk for its owners.

8 (a): Section 8(a) of the US Small Business Act

gives special consideration to small businesses

when they bid on Federal contracts. When

companies get big enough, they lose the special

status and compete on an equal footing. As a

Native Corporation, NANA is allowed to form

8(a) companies.

Asset: Something of value that you own, such

as a truck or a house. For the Corporation, this

can include big things, like a building. NANA’s

assets include its stock portfolio.

Consolidated Balance Sheets: This data

show what the Corporation, and its subsidiary

companies, own (assets), and owe (liabilities),

and NANA’s net worth (equity) at the end of the

accounting year.

Consolidated Statements of Cash

Flows: These figures indicate all the different

sources of Corporation cash, and also explain

how the money was used.

Consolidated Statements of Income:

These figures show the combined income,

expenses, and profit (or loss) of the Corporation,

and all our subsidiary and affiliated companies,

during a fiscal year.

Earnings: If you earn a paycheck, and use it to

pay your taxes and bills, the money you have left

over is called your earnings. In accounting, this

term means what is left of the revenues, after

A Basic Guide to Financial terms

Liability: If you owe money, it is called a liability.

For NANA, a liability can be a debt, or other

obligation, put in terms of money.

Liquidity: This describes the Corporation’s ability

to convert assets into cash without losing value.

The conversion to cash allows NANA to pay debts

as they become due, and take advantage of

investment opportunities as they arise.

Marketable Securities: This is a general term

for stocks, bonds or other investments that can be

sold on the open market.

Minority Interest: Less than 50 percent equity

interest in a company is called a Minority Interest.

Net Income (Loss): This is the formal

accounting term for total revenues minus total

expenses.

Revenue: This is the total amount of money

the Corporation took in, including income from

all activities and investments.

Shareholders’ Equity: This figure

includes all of NANA’s assets, minus what the

Corporation owes. It is called Shareholders’

Equity because NANA is fully owned by the

shareholders.

Subsidiary: This is a corporation that is

owned by another corporation. For example,

NANA Development Corporation is owned by

NANA Regional Corporation, Inc.

��

NANA Financial Statements

2006

06

��

��

The Board of DirectorsNANA Regional Corporation, Inc.:

We have audited the accompanying consolidated balance sheets of NANA Regional Corporation, Inc. and subsidiaries as of September 30,2006 and September 25, 2005, and the related consolidated statements of income, changes in shareholders equity and comprehensiveincome, and cash flows for each of the years in the three year period ended September 30, 2006. These consolidated financial statements arethe responsibility of the management of NANA Regional Corporation, Inc. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NANARegional Corporation, Inc. and subsidiaries as of September 30, 2006 and September 25, 2005 and the results of their operations and theircash flows for each of the years in the three year period ended September 30, 2006, in conformity with U.S. generally accepted accountingprinciples.

Anchorage, Alaska

January 31, 2007

INDEPENDENT AUDITORS REPORT��

CONSOLIDATED BALANCE SHEETS

September 30, 2006 and September 25, 2005

FY06 FY05

Assets

Current Assets

Cash and cash equivalents $ 591,478 9,558,094

Marketable securities (notes 6 and 8) 68,758,982 63,937,262

Trade and other accounts receivable, net (note 3) 178,861,107 137,763,318

Unbilled work in progress 23,013,297 18,612,016

Cost and estimated earnings in excess of billings (note 4) 8,010,126 8,917,436

Inventories 2,701,452 2,054,900

Prepaid expenses and deposits 12,802,720 9,386,145

Deferred income taxes 1,467,760 944,385

Other 2,462,070 1,548,810

Total current assets 298,668,992 252,722,366

Net property and equipment, at cost (notes 5, 9, and 10) 61,177,937 52,740,375

Other assets

Investments in affiliates (note 7) 9,708,065 7,232,817

Intangible assets (note 2) 27,274,116 29,230,853

Deferred income taxes (note 11) 58,532,240 39,255,615

Other 1,078,086 619,874

Total other assets 96,592,507 76,339,159

Total assets $ 456,439,436 381,801,900

�� 0�0�� 0

September 30, 2006 and September 25, 2005

FY06 FY05

Liabilities

Current Liabilities

Accounts payable $ 85,661,355 87,823,177

Accrued expenses (notes 2 and 13) 44,414,828 23,826,243

Dividends payable (note 2) 9,355,829 --

Billings in excess of costs and estimated earnings (note 4) 7,323,338 3,252,875

Line of credit (note 8) 38,387,936 38,291,201

Resource revenues distributable to others (note 1) 23,346,807 12,329,895

Current installments of long-term debt (note 9) 1,674,080 3,504,574

Current installments of long-term capital leases (note 10) 286,719 257,993

Total current liabilities 210,450,892 169,285,958

Line of credit (note 8) 36,028,304 40,224,000

Long-term debt, less current installments (note 9) 25,728,498 25,345,286

Long-term obligations under capital leases (note 10) 273,236 270,263

Other long-term liabilities 939,648 852,938

Minority interest 27,564,618 21,004,601

Total liabilities 300,985,196 256,983,046

Shareholders Equity

Common stock (note 2) 13,366 13,116

Additional paid-in capital 85,048,787 69,893,099

Retained earnings 65,081,780 49,040,269

Accumulated other comprehensive income 5,310,307 5,872,370

Total shareholders equity 155,454,240 124,818,854

Commitments and contingencies (notes 8, 9, 10, 12, 13 and 15) -- --

Total liabilities and shareholders equity $ 456,439,436 381,801,900

See accompanying notes to consolidated financial statements

�0�0�0

CONSOLIDATED STATEMENTS OF INCOME

Years ended September 30, 2006, September 25, 2005, and September 26, 2004

FY06 FY05 FY04

Revenues

Contracted government services $ 492,141,284 335,745,084 199,709,533

Professional and management services 262,016,549 158,832,969 105,955,123

Oilfield and mining support 18,796,935 9,785,076 7,666,040

Hospitality and tourism 8,772,218 8,633,134 9,065,481

Other investments 1,285,858 1,657,262 --

Investment income (note 7) 5,731,226 2,892,565 1,830,904

Natural resource (net of redistribution expenses) 17,015,290 9,353,664 7,152,968

Total revenues 805,759,360 526,899,754 331,380,049

Expenses

Contracted government services 464,684,508 315,863,357 192,549,856

Professional and management services 250,194,439 149,410,439 98,988,935

Oilfield and mining support 15,202,532 8,351,136 7,116,778

Hospitality and tourism 5,586,903 5,309,032 5,344,606

Other investments 3,820,608 2,523,817 523,332

Corporate general and administrative (note 13) 17,740,728 12,771,971 12,707,134

Total expenses 757,229,718 494,229,752 317,230,641

Operating income 48,529,642 32,670,002 14,149,408

Other expenses

Interest expense 7,790,529 4,563,390 3,092,498

Social and cultural programs 2,313,576 1,848,066 1,637,899

Other income (955,444) -- --

Minority interest 12,166,599 7,607,011 3,687,110

Income from continuing operations before income taxes 27,214,382 18,651,535 5,731,901

Income tax expense (note 11) 11,171,808 7,788,646 2,344,536

Income from continuing operations 16,042,574 10,862,889 3,387,365

Loss from discontinued operations, net of taxes (note 16) (1,063) (17,603) (66,779)

Net income $ 16,041,511 10,845,286 3,320,586

Net income per share of common stock $ 12.00 8.27 2.58See accompanying notes to consolidated financial statements

��

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY & COMPREHENSIVE INCOME


AccumulatedCommon Additional Retained Comprehensive Total Stock-

Stock Paid-in Capital Earnings Income holders Equity

Balance at September 28, 2003 $ 12,716 21,397,002 34,874,397 (2,094,663) 54,189,452

Comprehensive income

Net income -- -- 3,320,586 -- 3,320,586

Change in unrealized loss on investments -- -- -- 5,537,013 5,537,013

Change in minimum pension liability -- -- -- 344,974 344,974

Total comprehensive income -- -- 3,320,586 5,881,987 9,202,573

Issuance of Class D stock 168 (168) -- -- --

Dividends - $1.50 per share -- (1,907,395) -- -- (1,907,395)

Tax benefit from ANCSA -- 1,986,996 -- -- 1,986,996

Balance at September 26, 2004 $ 12,884 21,476,435 38,194,983 3,787,324 63,471,626


Net income -- -- 10,845,286 -- 10,845,286

Change in unrealized gain on investments -- -- -- 2,085,046 2,085,046

Total comprehensive income -- -- 10,845,286 2,085,046 12,930,332






Net income -- -- 16,041,511 -- 16,041,511

Change in unrealized gain on investments -- -- -- (562,063) (562,063)

Total comprehensive income -- -- 16,041,511 (562,063) 15,479,448






��

CONSOLIDATED STATEMENTS OF CASH FLOWS


FY06 FY05 FY04

Operating ActivitiesNet income $ 16,041,511 10,845,286 3,320,586

Loss from discontinued operations 1,063 17,603 66,779

Income from continuing operations 16,042,574 10,862,889 3,387,365

Additions (deductions):

Depreciation and amortization 8,723,719 4,868,095 3,685,677

Deferred tax expense 10,086,411 6,845,843 1,986,996

Bad debt expense 1,125,004 694,575 (87,915)

Gain on disposition of assets (44,144) (19,005) (8,599)

Gain on sale of marketable securities (1,956,080) (1,202,287) (641,811)

Distributions in excess of (undistributed) equity in earnings of affiliates (2,475,248) (422,618) 1,887,162

Minority interest 12,166,599 7,607,011 3,687,110

Decrease (increase) in assets:

Accounts receivable and unbilled work in-progress, net (46,624,074) (53,631,123) (35,081,255)

Costs and estimated earnings in excess of billings 907,310 (4,819,337) (1,347,826)

Inventories (646,552) (594,159) (251,969)

Other current assets (913,260) (148,030) (1,043,851)

Prepaid expenses and deposits (3,416,575) (1,875,707) (2,296,251)

Increase (decrease) in liabilities:

Accounts payable, accrued expenses and resource revenues

distributable to others 29,530,385 36,139,862 33,102,595

Billings in excess of costs and estimated earnings 4,070,463 (345,123) --

Net cash provided by operating activities 26,576,532 3,960,886 6,977,428

��


FY06 FY05 FY04

Investing ActivitiesPurchases of marketable securities (30,271,360) (39,951,344) (96,243,675)

Proceeds from sales of marketable securities 26,465,817 43,011,954 94,765,493

Increase in other investments (458,212) (619,874) --

Capital contributions to affiliates -- -- (900,000)

Proceeds from the sale of assets 214,583 96,686 85,308

Purchases of property and equipment (15,076,914) (9,436,472) (2,720,114)

Net purchase of businesses -- (27,500,000) (358,102)

Net cash used by investing activities (19,126,086) (34,399,050) (5,371,090)

Financing ActivitiesProceeds from long-term debt 2,353,340 23,304,081 45,712

Principal payments on long-term debt (3,800,622) (25,323,570) (5,452,097)

Principal payments on capital leases (266,370) (258,878) (325,917)

Net increase (decrease) in line of credit (4,098,961) 44,390,816 1,730,375

Distributions to minority interests of consolidated subsidiaries (5,606,582) (1,795,219) (2,316,582)

Cash dividends paid (4,996,804) (2,576,593) (1,907,395)

Net cash provided by (used by) financing activities (16,415,999) 37,740,637 (8,225,904)

Net cash used by discontinued operations (1,063) (17,603) (66,779)

Net increase (decrease) in cash (8,966,616) 7,284,870 (6,686,345)

Cash and cash equivalents at beginning of year 9,558,094 2,273,224 8,959,569

Cash and cash equivalents at end of year $ 591,478 9,558,094 2,273,224

Supplementary DisclosuresInterest paid $ 7,790,529 4,859,250 2,948,294

Income taxes paid 1,026,871 470,400 300,243

Equipment purchases financed by capital leases and notes payable 298,069 126,496 193,331

See accompanying notes to consolidated financial statements

��

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization and Summary of Significant Accounting Policies

(a) Organization

NANA Regional Corporation, Inc. (Company or NANA) was formed as an Alaska for-profit corporation under state law and underthe Alaska Native Claims Settlement Act (ANCSA or Act) of 1971 through which the Company became entitled to cash and land,including the surface and subsurface estate, of 2,258,836 acres and title to subsurface estate rights only on 161,260 acres. AtSeptember 30, 2006, the Company has received interim conveyance or patent to 1,376,637 acres of surface estate and 1,505,835acres of subsurface estate. No value has been ascribed to any land received under the Act.

The Company maintains an investment portfolio and negotiates and oversees resource contracts to extract minerals from its land.Changes in the prices of these minerals, primarily lead and zinc, could have a positive or negative effect on the Company. Inaddition, the Company operates in various business segments. Its contracted government services segment operates around theworld. Its hospitality and tourism, professional and management services and oilfield and mining support segments operate primarilywithin the State of Alaska. Changes in the Alaska economy, particularly the oil and gas industry and tourism, and the spending b ythe U.S. Government, specifically, the U.S. Department of Defense, could have a positive or negative effect on the Company.

The Act required the Company to issue 100 shares of its stock to each Native enrolled in the northwest region of Alaska. NANAcurrently has the following classes of common stock outstanding:

• Class A common stock to those Natives who enrolled in the NANA Region as residents of one of its villages;

• Class B common stock to those Natives who enrolled in the NANA Region, but elected not to be registered as residents ofany of its villages;

• Class C common stock to those Natives who were eligible to, but did not, enroll in the NANA Region in 1971, and also did notenroll under ANCSA;

• Class D common stock to Natives born after 1971 who meet certain eligibility requirements. Recipients receive either 50 or100 shares based on the original parental enrollment in the NANA Region. Class D shares carry certain restrictions.

The Company s stock cannot be sold unless a majority of the outstanding shares is voted to authorize such a sale.

��

Sections 7(i) and 7(j) of the Act require the Company to make the following mandatory distributions:

• 70% of all net revenues received by the Company for subsurface and timber resources transferred under the Act to theCompany must be distributed to all regional corporations, including itself (the funds are allocated based on the final number ofNatives enrolled in each region); and similarly, the Company receives its pro rata share of 70% of resource revenuesreceived by the other 11 Native regional corporations which are recorded as revenues when the amount thereof isdetermined);

• Of the 70% of the resource revenues of the Native regional corporations to which NANA is entitled, 50% of a portion of suchrevenues, which portion is based on the ratio of the nonvillage shareholders and enrolled village shareholders to total NANAshareholders, must be distributed to NANA s enrolled nonvillage shareholders and the Kikiktagruk Inupiat Corporation. NANAretains the shares of such revenues that the merged villages would have been entitled to receive.

(2) Summary of Significant Accounting Policies

(a) Consolidation

The consolidated financial statements include the accounts of the Company and its wholly–owned subsidiary, NANA DevelopmentCorporation. All significant intercompany transactions have been eliminated in consolidation.

(b) Cash Equivalents

For purposes of the consolidated statements of cash flows, highly liquid short-term investments with original maturities of less than60 days are considered to be cash equivalents.

(c) Inventories

Inventories, consisting primarily of fuel and food products, are stated at the lower of cost (first in, first out) or market.

(d) Accounts Receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is theCompany s best estimate of the amount of probable credit losses in the Company s existing accounts receivable. Accountbalances are charged off against the allowance after all means of collection have exhausted and the potential for recovery isconsidered remote. The Company does not have any off balance sheet credit exposure related to its customers.

��


(e) Property and Equipment, Depreciation and Amortization

Property and equipment are stated at cost. Equipment under capital leases are stated at the present value of minimum leasepayments.

Depreciation is provided using the straight-line method over the useful lives of the assets which range from three to 40 years.Equipment held under capital leases and leasehold improvements are amortized straight-line over the shorter of the lease term orestimated useful life of the assets. Depletion of investments in oil and gas producing and other mineral properties is calculated usingthe units of revenue method.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount ofan asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carryingamount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount ofan asset exceeds its estimated future cash flow, an impairment charge is recognized by the amount the carrying amount of theasset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet andreported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilitiesof a disposal group classified as held for sale would be presented separately in the appropriate asset and liability sections of thebalance sheet.

(f) Investments in Affiliates

The equity method of accounting is used to account for unconsolidated investments in affiliates. Under the equity method, theCompany s share of the earnings or losses of each investment is included in the consolidated statements of income, and theundistributed earnings or losses are reported as an increase or decrease to investments in affiliates.

(g) Marketable Securities

The Company has classified all of its marketable securities as securities available for sale. Securities are classified as available forsale when management intends to hold the securities for an indefinite period of time for appreciation and income or when thesecurities may be utilized for tactical asset/liability purposes and may be sold from time to time to effectively manage interest rateexposure and resultant prepayment risk and liquidity needs.

Securities available for sale are stated at fair value with unrealized holding gains and losses excluded from earnings and reportedas a separate component of other comprehensive income. Realized gains and losses on sales of securities are computed using thespecific identification method of determining the cost of securities sold.

A decline in the market value of any available for sale securities or held to maturity securities below cost that is deemed to be otherthan temporary results in a reduction in carrying amount to fair value. The impairment is charged to earnings and a new cost basisfor the security is established. To determine whether an impairment is other than temporary, the Company considers whether it hasthe ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of theinvestment is recoverable outweighs evidence to the contrary.

��

(h) Revenue Recognition

Revenues on contracts are recognized ratably over the term of the contract, as services are performed, percentage of completion orbased on the specific terms of the contracts. Revenue related to reimbursable cost line items is recognized when the applicableexpense is incurred. Revenue from sales where the Company has, by agreement, transferred all significant risk to manufacturers orothers are recorded net of cost. Revenue from such sales totaled $127,551,217, $93,569,818, and $41,382,719 for fiscal years2006, 2005 and 2004. Award fees are recognized at the time of receipt.

Revenues for room, beverage, food, and fuel sales are recognized at the time service is provided.

(i) Income Taxes

The Company and its subsidiaries file consolidated federal and state income tax returns. The Company accounts for income taxesusing the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequencesattributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective taxbasis. The Company s surface and subsurface estate received in accordance with ANCSA have not been recognized in theaccompanying financial statements because the fair value was not determinable within reasonable limits at the time of conveyance.In addition, the tax basis of the Company s surface and subsurface estate also has not been determined, except for certainsubsurface estate for mining activities.

Due to the unique tax attributes of ANCSA corporation s natural resources and the revenue sharing requirements of Section 7(i), thetax basis of such resources most likely would be significantly in excess of their book basis. The Company does not reflect adeferred tax asset for surface or subsurface estate until a reasonable basis also has been determined and such amounts arerecorded to paid-in capital. The net deferred tax benefit or expense associated with ANCSA subsurface estate is also recorded asadditional paid–in capital.

(j) Comprehensive Income

Comprehensive income consists of net income or loss, net unrealized gains and losses on securities and minimum pension liabilityadjustments and is presented in the consolidated statements of shareholders equity and comprehensive income.

(k) Fiscal Year

In 2006 the Company changed its fiscal year from the last Sunday in September to September 30. The current financial reportingperiod extends from September 26, 2005 through September 30, 2006.

��


(l) Common Stock and Earnings Per Share

Common stock is comprised of:September 30, September 25,

2006 2005Class A common stock of $0.01 par value. Authorized 2,000,000 shares;

issued and outstanding; 704,700 shares $ 7,047 7,047Class B common stock of $0.01 par value. Authorized 500,000 shares;

issued and outstanding 29,400 shares 294 294Class C common stock of $0.01 par value. Authorized 50,000 shares;

issued and outstanding 1,400 shares 14 14Class D common stock of $0.01 par value. Authorized 5,000,000 shares;

issued and outstanding 601,100 shares at September 30, 2006 and576,100 shares at September 25, 2005 6,011 5,761

$ 13,366 13,116

Earnings per share are computed using the end of year number of shares of Class A, B, C, and D common stock outstanding of1,336,600, 1,311,600, and 1,288,400 in 2006, 2005, and 2004, respectively. On September 27, 2006 the board of directorsapproved a dividend of $7.00 per share, with a record date of October 31, 2006. Because the Board of Directors changed NANA syear end to September 30, 2006 during fiscal year 2006 the $9,355,829 dividend payable has been recorded in 2006 along withthe dividend that was approved on September 29, 2005 as a return of capital.

(m) Intangible Assets

Intangible assets consist of goodwill and other intangible assets. Goodwill represents the excess of costs over the fair value ofassets of businesses acquired. Goodwill acquired in a purchase business combination and determined to have an indefinite usefullife is not amortized, but instead tested for impairment at least annually in accordance with the provisions of FASB StatementNo.142, Goodwill and Other Intangible Assets. Intangible assets with estimated useful lives are amortized over their respectiveestimated useful lives to their estimated residual values. Intangible assets are also reviewed for impairment in accordance withFASB Statement No. 144, Accounting for Impairment on Disposal of Long-Lived Assets.

Goodwill and amortizable intangible assets were $17,857,615 and $9,416,501 at September 30, 2006. Intangible assets increasedby approximately $20,753,000 in 2005 due to acquisitions.

�� 0�0�� 0

(n) Management Estimates

In preparing the consolidated financial statements, management is required to make a number of estimates and assumptionsrelating to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of theconsolidated financial statements and reported amounts of revenue and expenses during the period. Significant items subjectto such estimates and assumptions include the carrying amount of property and equipment, investments in aff iliates, goodwilland intangible assets, valuation allowances for receivables, reserves for retained risk insurance programs, and obligationsrelated to its employee retirement plan. Actual results could differ from those estimates.

(o) Fair Value of Financial Instruments

Fair value of financial instruments, as defined under Statement of Financial Accounting Standards No. 107, Disclosures AboutFair Value of Financial Instruments is estimated by management. Fair values for accounts receivable, contract arrangementsand operating liabilities approximated recorded balances at September 30, 2006 and September 25, 2005. Marketablesecurities and lines of credit are recorded at fair value. The fair value of long-term debt is estimated to be $23,209,478 and$26,849,588 at September 30, 2006 and September 25, 2005, respectively. Fair value estimates are dependent uponsubjective assumptions and involve significant uncertainties resulting in variability in estimates with changes in assumptions.

(p) Reclassifications

Certain reclassifications have been made to the 2005 and 2004 balances to conform with the 2006 presentation.

( 3 ) Accounts Receivable

A summary of accounts receivable follows:

September 30, September 25,2006 2005

Trade accounts receivable:Commercial customers 51,920,326 39,086,841 U.S. Government 125,054,907 99,212,111

Other receivables 5,004,183 1,336,147

181,979,416 139,635,099

Less allowance for doubtful accounts 3,118,309 1,871,781

Net receivables 178,861,107 137,763,318

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(4) Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts

Costs and estimated earnings in excess of billings on uncompleted contracts consist of the following:


Gross costs incurred on uncompleted contracts $ 596,351,799 392,008,252Estimated gross profit earned to date 70,615,003 42,976,257

666,966,802 434,984,509

Less billings to date 666,280,014 429,319,948

$ 686,788 5,664,561

Included in the accompanying consolidated balance sheets under the following captions:


Cost and estimated earnings in excess of billings $ 8,010,126 8,917,436billings in excess of costs and estimated earnings (7,323,338.00) (3,252,875.00)

$ 686,788.00 5,664,561

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(5) Property and Equipment

A summary of property and equipment, at cost, follows:

Depreciable September 30, September 25,lives 2006 2005

Land — $ 5,395,547 5,395,547Buildings 40 years 42,210,458 43,963,449Work in progress — 4,341,489 3,058,415Other 3 to 15 years 46,597,806 36,398,471

98,545,300 88,815,882

Less accumulated depreciation 37,367,363 36,075,507

Net property and equipment $ 61,177,937 52,740,375

(6) Marketable Securities

Summaries of marketable securities follow:

September 30, 2006Unrealized Unrealized

Cost gains losses Fair value

Cash and cash equivalents $ 27,035,392 — — 27,035,392Corporate notes and bonds 2,969,914 10,817 (95,911) 2,884,820Common stock 29,873,562 9,478,267 (513,059) 38,838,770

$ 59,878,868 9,489,084 (608,970) 68,758,982

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Gross realized gains and losses on sales of marketable securities totaled $1,978,060 and $21,980, respectively, during the year endedSeptember 30, 2006.



Cash and cash equivalents $ 25,185,711 — — 25,185,711Corporate notes and bonds 2,868,251 21,698 (85,770) 2,804,179Common stock 26,063,283 10,491,071 (606,982) 35,947,372

$ 54,117,245 10,512,769 (692,752) 63,937,262

Gross realized gains and losses on sales of marketable securities totaled $2,541,778 and $1,339,491, respectively, during the yearended September 25, 2005.



Cash and cash equivalents $ 5,293,997 — — 5,293,997U.S. Government bonds 3,402,628 18,124 (13,596) 3,407,156Corporate notes and bonds 5,990,328 229,112 (22,325) 6,197,115Common stock 41,288,616 4,805,386 (1,229,377) 44,864,625

$ 55,975,569 5,052,622 (1,265,298) 59,762,893

Gross realized gains and losses on sales of marketable securities totaled $2,532,777 and $1,890,966, respectively, during the yearended September 26, 2004.

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Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category andlength of time that the individual securities have been in a continuous unrealized loss position at September 30, 2006 and September 25,2005 were as follows:

Less than 12 months 12 months or more Total

Unrealized Unrealized Unrealized

losses Fair value losses Fair value losses Fair value

2006

Corporate notes and bonds $ (10,110) 447,121 (85,801) 1,882,630 (95,911) 2,329,751Common stock (376,796) 2,432,337 (136,263) 1,995,814 (513,059) 4,428,151

$ (386,906) 2,879,458 (222,064) 3,878,444 (608,970) 6,757,902

2005

Corporate notes and bonds $ (35,551) 913,541 (50,219) 1,324,575 (85,770) 2,238,116

Common stock (218,330) 2,554,086 (388,652) 1,427,276 (606,982) 3,981,362

$ (253,881) 3,467,627 (438,871) 2,751,851 (692,752) 6,219,478

Because the Company has the intent and ability to hold these investments until there is a market price recovery, these investments arenot considered other than temporarily impaired.

A summary of revenue from marketable securities follows:

2006 2005 2004

Interest $ 1,276,124 1,020,994 762,736Dividends 542,010 862,574 629,791Other 2,221,875 — —Net gain (loss) on sale of securities 1,956,080 1,202,287 641,811Portfolio management expenses (264,863) (193,290) (203,434)

$ 5,731,226 2,892,565 1,830,904

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A summary of contractual maturities of marketable debt securities, including U.S. Government bonds and corporate notes and bonds atSeptember 30, 2006, at cost, follows:

Fiscal year 2007 to 2011 $ 590,140Fiscal year 2012 to 2016 2,300,087Subsequent to fiscal year 2016 79,687

$ 2,969,914

(7) Investments in Affiliates

The Company has invested in affiliates (including joint ventures, partnerships, and limited liability companies) which are primarilyinvolved in oil field services, hospitality services, professional management services, security services, mineral exploration drilling,government contracting, construction, transportation, and engineering services. The Company s ownership in these affiliates ranges from0.39% to 50%. Summarized combined balance sheets and statements of operations of the affiliates follow:

Combined Balance Sheets

September 30, September 25Assets 2006 2005

Current assets $ 22,009,762 16,109,827Equipment, net of accumulated depreciation of $12,457,840 in

2006 and $10,675,197 in 2005 16,973,321 17,800,129Other 408,198 442,855

$ 39,391,281 34,352,811

Liabilities and EquityCurrent liabilities $ 7,700,014 5,720,735Long-term liabilities 10,205,660 12,288,586Owners equity 21,485,607 16,343,490

$ 39,391,281 34,352,811

Combined Statements of Operations

2006 2005 2004

Revenues $ 67,008,339 47,313,468 54,397,784Costs and expenses 59,030,332 42,997,978 52,611,664

Net income $ 7,978,007 4,315,490 1,786,120

,

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,

A summary of net income (loss) allocable to the Company for investments in affiliates by line of business follows:

2006 2005 2004

Hospitality and tourism $ 24,575 (35,599) (45,093) Professional and management services 1,591,436 645,657 649,621 Oilfield and mining support 2,276,812 801,234 (51,329) Other investments 154,623 652,282 (429,493)

$ 4,047,446 2,063,574 123,706

( 8 ) Lines of Credit

A summary of lines of credit follows:September 30, September 25,

2006 2005Authorized $45,000,000 line of credit with a bank

collateralized by marketable securities, interest at anindexed rate (6.45% at September 30, 2006),due July 1, 2008 $ 36,028,304 40,224,000

Authorized $55,000,000 line of credit with a bankcollateralized by accounts receivable, interest atthe prime rate (8.25% at September 30, 2006),due December 28, 2006 38,387,936 38,291,201 Totals $ 74,416,240 78,515,201

In June 2005 the line of credit was modified with the due date of the primary line extended through 2008. Accordingly, $36,028,304and $40,224,000 are classified as long-term and $38,387,936 and $38,291,201 are classified as current at September 30, 2006 andSeptember 25, 2005, respectively. The business loan agreement for each line of credit contains restrictive covenants includingmaintaining certain ratios. The Company obtained a waiver from the bank for a current ratio lower than allowed in the covenants onSeptember 30, 2006. Subsequent to year end the $55 million line of credit was replaced with a $65 million syndicated line of creditwith multiple banks and a $10 million swing line with a bank, both on similar terms.

On September 23, 2003 the Company entered into an interest rate swap agreement, effective October 1, 2003 to change$10,000,000 of its variable interest rate line of credit to an effective fixed interest rate of 3.75%. The swap terms are similar to thedebt and the swap agreement is in effect through October 1, 2008. The fair value of the swap at September 30, 2006 is nominal.

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(9) Long-Term Debt

September 30, September 25,A summary of long term debt follows: 2006 2005

Note payable, due December 1, 2019, interest fixed rate, (5.76 at September 30, 2006)collateralized by real property $ 10,719,576 11,191,432

Note payable, due December 1, 2019, interest fixed rate, (5.76 at September 30, 2006)collateralized by real property 6,468,709 6,753,450

Note payable, due December 1, 2019, interest fixed rate, (5.76 at September 30, 2006)collateralized by real property 3,881,226 4,052,070

Note payable, due June 1, 2018, interest fixed rate, (5.15% at September 30, 2006)collateralized by real property 1,623,919 1,722,440

Note payable, due May 1, 2018, interest indexed to United States treasury rates(5.72% at September 24, 2006), collateralized by real property 1,457,775 1,540,440

Notes payable to former members of TKC Communications, LLC, due between May 15and September 15, 2006, interest at prime plus 1% — 1,274,347

Note payable, due September 30, 2013, interest at variable rates, not less than 6.0%or more than 10% (9.50% at September 30, 2006) 566,800 647,772

Note payable, due September 30, 2009, interest at prime minus 1.0%, (8.25% at September 30, 2006) 220,665 578,062

Note payable, due October 5, 2013, interest at 7.25%, collateralized by real property 1,584,254 —

Note payable, due April 5, 2013, interest at 7.25%, collateralized by real property 455,848 —

Other debt 423,806 1,089,847

Total long-term debt 27,402,578 28,849,860

Less current installments 1,674,080 3,504,574

Long-term debt, less current installments $ 25,728,498 25,345,286

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Scheduled repayment of outstanding debt is as follows:

Amount

Fiscal year ending:2007 $ 1,674,0802008 1,851,8982009 1,927,5472010 1,928,5022011 1,991,272Thereafter 18,029,279

$ 27,402,578

(10) Lease Commitments

Amortization of capital lease properties, provided by use of the straight-line method over the lease terms, has been included indepreciation and amortization expense. The carrying costs related to equipment and vehicles purchased under capital lease were$919,142 at September 30, 2006 and $881,304 at September 25, 2005.

Future minimum rental commitments for capital leases consist of the following:

Amount

Fiscal year ending:2007 $ 319,4412008 173,4322009 121,4072010 2,475

Total minimum lease payments 616,755

Less amounts representing interest (56,800)

Present value of net minimum lease payments 559,955

Less current portion (286,719)

$ 273,236

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The Company leases office space and equipment under various operating lease agreements. Future minimum operating leasecommitments consist of the following:

Amount

Fiscal year ending:2007 $ 8,559,7492008 7,656,0632009 6,840,7082010 5,491,7292011 4,843,279Thereafter 6,016,931

$ 39,408,459

The rent expense under all operating leases amounted to $9,539,788, $5,154,855, and $2,917,725 in 2006, 2005, and 2004,respectively.

(11) Income Taxes

Income tax expense is as follows:

2006 2005 2004

State $ 2,612,146 1,818,517 777,209Federal 8,558,947 5,958,544 1,522,436

$ 11,171,093 7,777,061 2,299,645

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Current taxes are for state taxes. Tax expense (benefit) is allocated among continuing and discontinued operations as follows:

2006 2005 2004

Current - continuing operations $ 1,084,682 931,128 312,649

Deferred:Continuing operations 10,087,126 6,857,518 2,031,887Discontinued operations (715) (11,585) (44,891)

Tax expense $ 11,171,093 7,777,061 2,299,645

Actual income tax expense differs from “expected” tax expense (benefit) as follows:

2006 2005 2004

Computed “expected” income tax expense $ 9,252,890 6,341,522 1,948,846State tax, net of federal effect 1,724,016 1,199,433 354,672Nondeductible expenses 324,898 512,877 183,985Dividends received exclusion (128,998) (205,293) (149,890)Change in valuation allowance (10,507,653) (7,654,787) (3,187,637)ANCSA tax effect recorded as

additional paid-in capital 10,086,411 6,845,843 1,986,996Other 419,529 737,466 1,162,673

$ 11,171,093 7,777,061 2,299,645

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The components of and changes in the deferred tax assets and liabilities are as follows:

September 25, Benefit September 30,2005 (expense) 2006

Deferred tax asset:Allowance and accruals $ 5,982,390 (210,171) 5,772,219Basis in fixed assets 4,263,525 (169,452) 4,094,073Basis in Red Dog Mine 151,749,018 (9,655,687) 142,093,331Net operating loss carryforward 97,731,997 (3,572,114) 94,159,883Basis in joint ventures and investments 1,202,255 (981,400) 220,855Other 1,599,958 4,081,171 5,681,129

Total deferred tax asset 262,529,143 (10,507,653) 252,021,490

Deferred tax liability–unrealizedgain on marketable securities (3,947,646) 377,840 (3,569,806)

Valuation allowance (218,381,497) 29,929,813 (188,451,684)

Net deferred tax asset $ 40,200,000 19,800,000 60,000,000

Deferred tax asset established forANCSA property recorded inadditional paid in capital (19,422,160)

ANCSA tax effect recorded inadditional paid in capital (10,086,411)

Deferred income taxes recorded to equity (377,840)

$ (10,086,411)

During 2006, the Company recorded a deferred tax asset of $60 million, the amount that is more likely than not to be realized in theforeseeable future. For the remaining deferred tax asset, a valuation allowance is recorded. Because the related resources were part ofthe Company s original capital, changes in resource related tax attributes are recorded through contributed capital.

The Company s net operating loss carryforwards of approximately $238 million for federal income taxes and $219 million for state incometaxes expire in the years 2007 through 2025.

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(12) Resource Development Agreement

In 1982, the Company signed a development and operating agreement granting Cominco Alaska, Incorporated (CAI):

• An economic interest in mineral-bearing lands received by the Company pursuant to the Act;

• Authority to evaluate the economic development potential of such lands; and

• Authority to develop such lands if determined to be feasible.

Teck Cominco, Limited (Teck), CAI s predecessor, is required to pay a guaranteed minimum advance royalty of $1,000,000 per year forthe remaining term of the agreement, adjusted for inflation, or a 4.5% advance net smelter royalty, whichever is higher. A net proceedsroyalty will be payable when Teck has fully recovered certain capital costs, accrued interest, and advance royalties. The Companyreceived net smelter royalties of $29,691,000, $16,953,000, and $10,883,000 for the years ended September 30, 2006, September 25,2005, and September 24, 2004, respectively. As of September 30, 2006, no amounts have been received under the net proceedsroyalty. When received, royalties described above are subject to sharing with the other regional Native corporations pursuant to Section7(i) of the Alaska Native Claims Settlement Act.

(13) Pension Plan

Effective January 1, 1989, the Company adopted a noncontributory defined benefit pension plan which covers all of its employees, andcertain wholly–owned subsidiaries, except those who are members of a collective bargaining unit for which retirement benefits havebeen the subject of good faith bargaining or in an unrelated line of business. Benefits are based on the length of service andcompensation. The Company s funding policy is to contribute annually an amount at least equal to the minimum requirements of theEmployee Retirement Income Security Act of 1974. Contributions are intended to provide not only for future benefits attributable toservice to date, but also for those expected to be earned in the future.

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The following table sets forth the plan s benefit obligations, fair value of plan assets, and funded status at September 30, 2006 andSeptember 25, 2005:

2006 2005

Benefit obligation at beginning of year $ 9,594,083 8,548,172Service cost 555,136 478,934Interest cost 524,679 473,264Actuarial loss (gain) (288,959) 225,010Benefits paid (161,825) (131,297)

Benefit obligation at end of year 10,223,114 9,594,083

Fair value of plan assets at beginning of year 7,539,363 6,187,638Actual return on plan assets 675,878 931,022Employer contribution 552,000 552,000Benefits paid (161,825) (131,297)

Fair value of plan assets at end of year 8,605,416 7,539,363

Funded status (1,617,698) (2,054,720)

Unrecognized net actuarial loss (gain) 543,178 928,863

Net amount recognized $ (1,074,520) (1,125,857)

Amounts recognized in the statement of financial positionAccrued benefit cost $ (1,074,520) (1,125,857)

The accumulated benefit obligation for the pension plan was $8,615,455 and $8,014,326 at September 30, 2006 and September 25,2005, respectively.

Weighted average assumptions used to determine benefit obligations at September 30, 2006 and September 25, 2005 were as follows:

2006 2005

Discount rate 5.75% 5.50%Rate of compensation increase 4.00 4.00

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Weighted average assumptions used to determine net cost for the years ended September 30, 2006 and September 25, 2005 were asfollows:

2006 2005

Discount rate 5.50% 5.50%

Expected long-term rate of

return on plan assets 7.50 7.50

Rate of compensation increase 4.00 4.00

The Company s overall expected long-term rate of return on assets is 7.50%. The expected long-term rate of return is based on theportfolio as a whole and not on the sum of the returns on individual asset categories. The return is based exclusively on historical returns,without adjustments.The following table sets forth the components of net periodic benefit costs:

2006 2005

Service cost $ 555,136 478,934Interest cost 524,679 473,264Expected return on plan assets (579,152) (478,707)Amortization of net (gain) loss — 30,015

Net periodic benefit cost $ 500,663 503,506

(a) Plan Assets

The weighted average asset allocation of the Company s pension benefits and postretirement benefits at September 30, 2006 andSeptember 25, 2005 were as follows:

Pension benefitsplan assets

2006 2005

Asset category:International equities 20% 18%Stocks 57 56 Bonds 23 26

Total 100% 100%

The Company s investment policies and strategies for the pension plan include target allocations of 15% international equities, 55%stocks, and 30% bonds. The Company s investment goals are to meet or exceed the Consumer Price Index rate by 5% annually.

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(b) Cash Flows

The Company expects to contribute $552,000 to its pension plan in 2007.

The expected benefits are based on the same assumptions used to measure the Company s benefit obligation at September 30,2006 and include estimated future employee service and are as follows:

Amount

Fiscal year ending:2007 $ 202,7632008 211,0742009 259,1852010 267,8842011 340,256Thereafter 2,806,897

$ 4,088,059

(14) Comprehensive Income

Changes in other comprehensive income follow:2006 2005 2004

Unrealized holding gains arising during the year $ 1,394,017 3,287,333 6,178,824Realized gains included in net income (1,956,080) (1,202,287) (641,811)Change in minimum pension liability — — 344,974

$ (562,063) 2,085,046 5,881,987

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(15) Contingencies

The Company is self insured for health care up to $150,000 per participant and $7.3 million in aggregate. The Company has purchasedstop loss insurance for amounts in excess of these limits. The Company also retains the risk for specific workers compensation losses invarying amounts ranging from $250,000 to $500,000. The Company s insurance carrier assumes losses incurred above the retainedamounts. The Company has established a liability for workers compensation and health care claims incurred but not reported.

The Company is aware of possible contamination at a former mining site on land conveyed to the Company under the Alaska NativeClaims Settlement Act. The contamination occurred prior to the conveyance. The Company has not yet determined its legal liability forclean-up. Nor has the Company completed an assessment of the site and therefore has no estimate of the costs to clean up the site.

In addition, the Company may be involved in other legal actions, contract disputes, regulatory issues, and employment matters incidentalto its operations. In the opinion of management, with the exception of the matter disclosed in the preceding paragraph, the ultimate liabilityof such actions will not materially affect the Company s financial position, results of operation or liquidity.

For fiscal years 2006, 2005 and 2004; the Company s revenues from contracted government services were 61%, 64% and 60%,respectively, of total revenues. Substantially all of the contracted government services revenue is with United States Governmentagencies. Such revenue is subject to ongoing and periodic performance audits that may ultimately result in reductions to recognizedrevenues. In managements opinion, future adjustments to revenue, if any; will not materially affect the Companies financial position,results of operations or liquidity.

(16) Discontinued Operations

On January 3, 2003, the Company sold the assets of Arctic Utilities, Inc. (AUI). The Company recognized a gain on the sale of theseassets of $114,129. Gross revenues recorded by AUI totaled $1,276,164 for the year ended September 28, 2003. There were norevenues recorded during the years ended September 30, 2006; September 25, 2005 and September 26, 2004. The results of AUI soperations have been reported separately as discontinued operations in the Company s consolidated statements of income.

(17) Acquisition

On June 20, 2005, NANA Development Corporation purchased all outstanding stock of ASCG, Incorporated and related entities(ASCG). The results of ASCG s operations have been included in the consolidated financial statements since that date.

ASCG offers a full complement of in-house professional architectural and engineering services including architectural design of municipal,commercial, industrial, educational, health care and residential buildings; civil, environmental, structural, mechanical and electricalengineering services; surveying and mapping; and construction management. ASCG conducts operations in Alaska, Washington, NewMexico, Oregon, Idaho, Texas, Arizona and Colorado either directly or through its wholly owned subsidiaries: W&H Pacific, ASCG,Incorporated of New Mexico, and ASCG Incorporated of Colorado.

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BNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In conjunction with the purchase agreement, NANA Development Corporation also acquired all profits and losses from ASTS, Inc. whichwas formed as a minority-owned company under the Small Business Association s 8(a) program, that allows it to receive preferentialbidding rights for government contracts. Under the terms of the purchase agreement, NANA Development Corporation became the ownerof ASTS, Inc. on December 23, 2005, subsequent to the Company s year end.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition.

Current assets $ 26,214,513Property and equipment 3,545,091Goodwill 15,325,348Intangible 5,427,955

Total assets acquired 50,512,907

Current liabilities 22,190,769Other liabilities 822,138

Total liabilities assumed 23,012,907

Net assets acquired $ 27,500,000

The amortizable intangible assets are related to contracts and customer relationships and are being amortized over 27 months.

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B

Board of Directors

Donald G. SheldonChairman / Noorvik

Roland Booth Sr.First Vice Chairman / Noatak

Robert J. KirkSecond Vice Chairman / Noatak

Linda LeeSecretary / Shungnak

Mary SageTreasurer / Kivalina

Levi ClevelandElder Advisor

Tommy Ballot Sr.Selawik

Charlie CurtisKiana

Eugene DouglasShungnak

Lester Hadley Sr.Buckland

Raymond HawleyKivalina

Henry Horner Sr.Kobuk

Rosa HornerKobuk

Gladys JonesAmbler

Dood LincolnKotzebue

Emerson MotoDeering

Ronald Moto Sr.Deering

Gordon Newlin Sr.Noorvik

Luke SampsonAt-large

Nellie A. SheldonAmbler

Raymond Stoney

Kiana

Allen Ticket Sr.Selawik

Harvey VestalAt-large

Grace WashingtonBuckland

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AnnieSheldon

KathleenTickett

LuluNazuruk

NedGreist

TinaHenderson

HelenWilliams

FrankHenry

HerbertAdams

RobertGooden

CliffordMitchell

IsaacSnyder

EthelAdams

WalterShield

VeraGarrison

MayJacobus

RosieMouse

PeterLutherSr.

StephenKoenig

EricCarter

LorenaThomas

BetsyMonroe

EdwardBarr

LillianGoodwin

RoseCuster

ArthurWesley

JoeCarter

FeltonCommack

MonaWilliams

MaryPete

MarieGreist

MorganJohnsonJr.

IreneEvan

ThomasPungalikJr.

KevinField

AlbertKoenigJr.

EugeneHensley

EnochAdamsSr.

DavidNelson

DaroldClark

RichardJones

CharlieJaycox

StevenSnyder

BenjaminHensleyJr.

MelvinJ.Booth

JohnSheldon

BertaBaldwin

KennethWallington

JaneWashington

DaisyTickett

FrankGarfieldJr.

SarahWeisner

DelbertHarrison

WilliamJones

MabelNassuk

WoodrowWilsonJr.

GlennHunnicutt

ShaunPenn

RubyOzenna

DuffyHenry

SusanCotter

KivaBeckaLenaJones

MabelHenry

MontanaSimmonds

EmmaHyde

EdnaReynolds

IN MEMORIAM�� 0�0�� 0

annual report 2006

On behalf of the NANA Board of Directors, we extend our condolences to the families who lost loved ones during 2006.

�0�0�0

NANA REGIONAL CORPORATION

P.O. Box 49

Kotzebue, AK 99752

P 907 442 3301

F 907 442 2866

www.nana.com

Our symbol is an Iñupiat hunter moving aggressively toward a successful future in a vast, beautiful and sometimes harsh world. NANA is all of us together as one hunter, successful if we are of one mind and purpose, hungry if we are split by doubts and mistrust of each other. The same qualities of courage, confidence, humility, respect, integrity and sharing that have allowed our people to survive as great hunters in a harsh climate are necessary for NANA to be successful.

NANA shareholders: a diversi ed workforce annual report 2006 · W 1 Letter To Our Shareholders 2...

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