Bethel Native Corporation
Box 719
Bethel, Alaska

(907)543-2124

FAX: (907)543-2897

President's Corner

PRESIDENT/CEO REPORT

Ana Hoffman 2007 Annual Meeting

Quyana tamarpeci tailriani, ilagautellriani unuamek.

Most of you are aware of the corporate activities over the last year thru the annual report and our auditor Jim Hassle will be presenting the detailed financials later so I would just like to highlight a few items this morning.

2006 was a challenging year operationally with reduced profitability at the subsidiary level, however I am proud to report that BNC was able to book a significant profit of nearly $2 million dollars with the successful sale of the Bivin Plaza. In the recent annual report, I described the 1031 Exchange process utilized for the Bivin sale and attorney Bruce Edwards, who is here with us today was instrumental in assisting in that transaction. With the proceeds of the sale BNC purchased two other properties in Anchorage 4200 Lake Otis and 4115 Lake Otis and placed them into two wholly owned limited liability companies. These properties should provide positive long-term cash flow.

Another strategic change last year was doing away with the age-old pension plan and implementing a 401K plan for the employees. This saves the corporation money by lower corporate overhead costs, while allowing employees to have some control over their retirement investments, which is very good.

BNC’s portfolio experienced some change last year for the better. The investment portfolio had not preformed for many years and last year the board of directors decided to reassess the designation of the portfolio manager. After careful review, BNC chose Phil Younker and Associates a firm out of Fairbanks, to manage the portfolio. Under Mr. Younker’s direction the portfolio has experience over $55,000 in gains. This is a dramatic improvement over the recent past performance.

Another long-term investment BNC was presented with last year was thru Denali Spectrum Manager (DSM) which is owned by Doyon Limited. DSM was successful in obtaining a wireless license to provide wireless services in the mid-west region of the United States. Their successful license bid opened an investment opportunity for select AK native corporations including BNC. This investment of approximately $400,000 has high return expectations with anticipated distributions at 5 and 10 years and has very limited risk. Council Tree Communication, one of BNC’s long time business partners coordinated the investment and are involved in the transaction. Council Tree has been successful with BNC in the past and we anticipate this investment will provide good returns over time.

For litigation matters, I am happy to report that BNC and Hoffmann Commercial Company have agreed to terms of a settlement. This is a significant accomplishment after years of litigation, court judgments and appeals. BNC should be recovering $136,000 cash from Bernd Hoffmann by the end of May to settle all matters.

The other legal matter that had been lingering on for many years BNCI vs Charles McGaa is also being resolved. Over the last few months the BNCI board has reviewed the circumstances of this case and the likelihood of recovery any of the disputed funds and decided to settle the matter with a notice of non-suit. Settling those two matters will close all of BNC’s on-going legal disputes. Jeannie Sleeper who is here from Anchorage assisted with both of these matters and worked hard to assert BNC’s claims. Thank you Jeannie.

Now I’d like to take a moment to recognize the BNC staff, Cindy LePore Apt/Shareholder Records, Louise Rousey Bookkeeper, Jimmie Nelson Part-time admin, Kyunga Chang Controller and Maintenance staff Nick Pollock, Ben Thatcher, Fritz McCarr, Evan Wiseman, Dustin Anaruk and our retiring Lydia Wheeler (plaque to Lydia Wheeler). I’d like to also recognize an employee who has been working for BNC for ten years, (plaque to Cindy LePore). And, now I’d like to take a moment to recognize an employee who has been working here for thirty years, (plaque presented to Nick Pollock).

Nick and Helen Pollock are traveling to Anchorage tonight and in appreciation for his continued service BNC will pay for the hotel stay at the Springhill Suites, where BNC enjoys a corporate rate $79 winter and $156 in the summer, which all of you are eligible for. Call Marriott reservations 800# and ask for the Bethel Native Corporation rate. Nick we thank you and I would truly be lost without you.

To all of the BNC staff, I rely on all of you and sincerely appreciate your work.

And to the shareholders and the Board, I very much appreciate your support and encouragement. This board is extremely dedicated to the success of the corporation and functions with your interests in mind at all times. Quyana for your confidence and I welcome your feedback not just here, but throughout the year.

Quyana Cakneq,
Ana Hoffman