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Sealaska announces $40.5 million in earnings

Posted: Thursday, May 22, 2003

Sealaska's successful investments in the Alaska Native Wireless initiative and the Valley View Casino in California were major contributors to the Native regional corporation's $40.5 million in net earnings in 2002.

"An agreement reached between AT&T Wireless and Council Tree Alaska Native Wireless, and the San Pasqual's Casino refinancing of their operations, led to early maturing of the investments and a significant positive return to Sealaska," corporation President and CEO Chris McNeil Jr. said in a prepared statement released Tuesday. McNeil was traveling Wednesday and could not be reached for further comment.

The net earnings reflect the positive returns from these investments, as well as from logging, minus the corporation's operating expenses for the year. Sealaska reported the earnings to shareholders last week.

In 2001, Sealaska joined with AT&T Wireless Services, Alaska Native corporations Doyon Ltd. and Arctic Slope Regional Corp., and Council Tree, a group of private investors, to purchase 44 wireless telephone licenses from the Federal Communications Commission. Sealaska invested $40 million in the venture.

AT&T Wireless, which provided most of the $2.9 billion used to buy the licenses, bought Sealaska out of its investment in late 2002, said Todd Antioquia, Sealaska's director of corporate communications.

"We won the original FCC bid as a result of our status as an Alaska Native corporation and our group having major interests from Alaska Native corporations," said Antioquia.

Because of the advantages the Alaska Native corporations provided to AT&T Wireless in purchasing the licenses, AT&T Wireless was generous with Sealaska in the buyout one year later, Antioquia said. He said the telecommunications giant paid $66.7 million cash to Sealaska, and will pay an additional $20 million in interest between now and 2007.

The Alaska Native Wireless investment contributed $33 million to Sealaska's 2002 income - $26.7 million in cash and $6.3 million as part of the interest payment.

Sealaska invested $14.7 million in a casino built by the San Pasqual Indian Band in San Diego County, Calif., in 2001. The corporation received a payment of about $22 million from the investment in January, and will continue to receive a portion of the casino's earnings until 2010.

The casino investment contributed $8.7 million to Sealaska's 2002 income.

Other factors that contributed to the Sealaska earnings include a cutting administrative costs to save the corporation $1.7 million in 2002, as well as $8 million in profits from the Sealaska Timber Corp., Antioquia said.

"Some of the most significant reductions were with the corporate office," he said. "We've utilized new technologies like video-conferencing and Web-casting to offset as much travel as possible - that contributed to the reduction."

In April, Sealaska paid a total of $4.3 million from its 2002 earnings in dividends to its 16,500 shareholders - 2,000 of whom live in Juneau.

The Juneau-based corporation's goals for 2003 include building businesses that take advantage of Sealaska's minority-operated status in the U.S. Small Business Administration. The special status, referred to as 8(a) certification, gives Sealaska preference when applying for federal contracts.

Alaska Coastal Aggregates, a Sealaska subsidiary, will market some of Sealaska's rock, sand and gravel assets to federal and private operations, Antioquia said. Other uses of the minority-operated certification are still in formation.

"There's a number of industries that we have corporate knowledge and expertise in that we've identified but we're in the development stages right now," Antioquia said.

The Sealaska Timber Corp. likely will maintain profitability this year as well, Antioquia said. The Sealaska subsidiary plans to harvest more than 100 million board feet of timber in 2003.

Christine Schmid can be reached at cschmid@juneauempire.com.



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