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Uqalugaawich W H E R E

FOURTH QUARTER, 2015

P E O P L E

VOLUME 35

S H A R E

I N F O R M A T I O N

ISSUE 4

A brown bear hide dries in the cold in Wainwright.

Ieumun Atuumaniwit Piebusivut Integrity – We do what we say we do. We adhere to high moral principles and professional standards and operate with transparency and accountability.

asrc.com


Contents T A B L E

O F

1 New dividend payment option for ASRC shareholders ............................................. 3 Invest in your future .............................................................................................. 4 Award honors early North Slope leaders ................................................................. 4 ASRC makes investment in Quintillion Holdings, LLC .............................................. 5 President’s message ...............................................................................................

Excerpt from Rex A. Rock Sr.’s address at the Resource Development Council conference .......................................................................

6 Petro Star Inc. works to construct asphalt plant at North Pole refinery ................10 AES employee featured in Winds of Change magazine ..........................................11 Volunteer Income Tax Assistance program ...........................................................13 AEC facilitates business-to-business opportunities in the Arctic ...........................14 AES teams up to support AEX placer drilling program ...........................................16 AES receives Health, Safety and Excellence Award from ConocoPhillips ................17 Moving aviation forward .......................................................................................18 Shareholder spotlight: Rainey Hopson ..................................................................20 AES earns recognition for American Heart Walk fundraising efforts ......................22 Executing our financial growth strategy: ASRC Federal .........................................23

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President’s message With the winter season fully upon us, as Iñupiaq of Alaska’s North Slope, we are once again adjusting to this annual dip into the deep-freeze by relying on our early preparation and experience – lessons learned through generations of calling this beautiful yet unforgiving region home. Even with temperatures well below zero and the sun only creeping above the horizon a few short hours each day, we know life and work must continue. In short, we respond to what Mother Nature presents to us, whether those conditions include darkness, biting coastal winds or deep inland snows. Like our Elders and others who set the stage before us, we accept the challenge. Successfully adapt. Thrive. At Arctic Slope Regional Corporation, early preparation and experience is a cornerstone of our business success. Acquisition activity for the Corporation was busy in 2015. In July, Arctic Pipe Inspection, Inc. of Houston and Arctic Pipe Inspection, Inc., or collectively the business we call API, joined the ASRC family of companies. API provides a variety of inspection services for oil and gas producers and service providers, and has shops on the North Slope as well as Houston, Texas. Last fall, we went public with the acquisition of Data Networks Corporation (DNC), a company specializing in a broad range of information technology and program management services to federal government customers. This acquisition once again shows off ASRC’s continued commitment to diversifying and growing our government services segment. In the past year we also made investments “ Like our Elders and others who in not only our future, but also the future of set the stage before us, we everyone who calls the Alaska Arctic home. In November, ASRC made a significant accept the challenge. Successfully investment in the Anchorage-based adapt. Thrive.” telecommunications company Quintillion Holdings, LLC – where we now hold a minority interest. Quintillion and its affiliates are currently involved in building terrestrial and subsea fiber optic networks to serve Alaska’s North Slope. This means broadband, or high-speed Internet, is finally a step closer to arriving in our region – a critical need when it comes to emergency response and public safety, economic development, as well as health care and education. You’ll find more information about Quintillion and this exciting project inside this newsletter. continued on page 2

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In the Interior, we have teamed up with our subsidiary, Petro Star Inc., to invest more than $20-million in a new asphalt production unit, scheduled to come online in the spring. I’m proud to say the new plant will create temporary construction jobs as well as full-time, yearround positions once it’s operational. As we place 2015 into the rear-view mirror, I am optimistic, even in an atmosphere of low oil prices, about the New Year ahead and its unfolding promise. As an example, ConocoPhillips recently had its first production from the CD-5 pad inside the National Petroleum Reserve-Alaska. I’m excited to see CD-5 come online, and congratulate ConocoPhillips and Anadarko for their perseverance and hard work to make this project happen. This is a big step in development in the Colville River Unit and is the first pad producing minerals that are completely owned by ASRC. It’s been worth the wait to get to this point, as it’s through royalty payments from projects like these that allows ASRC to provide meaningful dividends, jobs and other benefits to our shareholders, as well as share revenues through the 7(i) provision of ANCSA to other Alaska Native corporations. Now, we look to the west at GMT1, which has finally been sanctioned by ConocoPhillips Alaska and Anadarko. I know there are still some hurdles to clear, but I applaud the effort to get this project off the ground. This is an important project to ASRC, since we are the predominant mineral owner over the Bureau of Land Management in the initial GMT1 development. Even in light of low oil prices, there are additional reasons to be optimistic about the future of the North Slope and the oil and gas industry. Point Thomson is expected to come online this year. Through ASRC Exploration, LLC, we are planning to drill our own well at the Placer Unit. Early work has already begun and I hope to share good news about this project later in 2016. As we charge into the busy New Year, I would like to thank ASRC’s board of directors for its leadership as well as the support of our many shareholders as we navigate through the hurdles ahead. Using our Iñupiaq values as our guide, I look forward to sharing our continued success. Happy Holidays and God Bless. Taikuu.

 Rex A. Rock Sr. President, CEO

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ASRC Inheritance Shareholders Federal Income Tax Refund Opportunity for Tax Year 2012, 2013 and 2014 In July 2015, ASRC sent information to shareholders who received inheritance funds for tax year 2012, 2013 and 2014. Corrected 1099-DIV & 1099-MISC forms were also supplied. As a result of this corrected reporting, recipients may be entitled to a federal income tax refund. This is a reminder that, at no cost to you, BDO accounting professionals will assist recipients in preparing and filing an amended income tax return refund claim. If you wish to have BDO prepare your amended tax returns please notify Halie Mahan at BDO. Halie’s phone number is: (907) 646-7313 or she can be reached by email at: hmahan@bdo.com.

SAVE THE DATE SAVE THE DATE ASRC AND ARCTIC EDUCATION FOUNDATION INVITE YOU TO THE 2016 IVALU GALA ASRC AND ARCTIC EDUCATION FOUNDATION INVITE YOU TO THE 2016 IVALU GALA

BENEFITING ARCTIC EDUCATION FOUNDATION

BENEFITING ARCTIC EDUCATION FOUNDATION

FEBRUARY 12, 2016

FEBRUARY 12, 2016 SHERATON ANCHORAGE HOTEL AEFGALA.ORG | AEFGALA@ASRC.COM

SHERATON ANCHORAGE HOTEL AEFGALA.ORG | AEFGALA@ASRC.COM FOURTH QUARTER, 2015

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Invest in your future For more than 40 years, Arctic Slope Regional Corporation has played a key role in providing a better future for our Iñupiat Eskimo shareholders. Make sure your skills and experience make a difference. Come work for a company that puts its Iñupiaq values into action every day. ASRC is looking for qualified applicants to fill a variety of positions across Alaska and the Lower 48. Check out iRecruitment on asrc.com for the latest job openings and an online application. Already an ASRC employee? The Corporation has a generous benefits package, which includes matching an employee’s 401(k) contribution up to 4 percent. Make sure to take advantage of this tremendous opportunity. It’s never too early to start preparing for your financial future. You can enroll in the 401(k) plan by visiting Schwab Retirement Plan Services Company’s website at workplace.schwab.com and clicking on the “enroll” button. Remember: • • • • •

The Corporation wants to help you save for retirement Start saving early, gain a 100 percent return on your first 4 percent Choosing investments is not the issue – Target Date Funds does it for you Pre-tax savings reduce the “cost” of your contribution Don’t miss out on free money

AEF and ASNA partner to establish leadership award Award honors early North Slope leaders In order to honor the early leaders of Arctic Slope Native Association (ASNA), such as Samuel Simmonds, Charles ‘Etok’ Edwardsen and Guy Okakok, Arctic Education Foundation (AEF) is partnering with ASNA to establish the ASNA Leadership Award. The AEF component consists of ten scholarships to support students studying in the fields of health care, land management, geology, social services, economic development, environmental

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science and stewardship, technology, as well as math and other related fields. The ASNA component will award $10,000 per year for the next five years, centered on health and wellness. The scholarship(s) will be available starting in the fall of 2016. AEF will contribute $50,000 to the ASNA Leadership Award, with ASNA matching those funds.

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ASRC makes investment in Quintillion Holdings, LLC An important step in bringing high speed broadband to the North Slope ASRC has made a significant investment in Quintillion Holdings, LLC and now holds a minority interest in the Anchorage-based telecommunications company. Quintillion and its affiliates are currently involved in building terrestrial as well as subsea fiber optic networks to serve Alaska’s North Slope. “We consider high speed Broadband to be critical and necessary infrastructure in the Arctic. Without it, our region cannot live up to its potential,” said Rex A. Rock Sr., ASRC president and CEO. “This investment allows the communities of the North Slope to get one step closer to fiber-optic broadband – a critical need when it comes to emergency response and public safety, economic development, as well as health care and education.” Those living in rural Alaska communities pay close to the highest Internet and bandwidth costs in the entire world. This is especially true for those who call the North Slope home. A recent study found that Barrow residents paid more than seven times the cost of those in San Francisco for satellite-based Internet speed that is considerably slower. The main factor affecting the cost of service in remote Alaska is the expense of operating existing satellite and microwave communication systems. Both are dated technologies that have a very high cost of operation. The operating cost for fiber-optic cable is much lower. Quintillion has begun construction of its subsea cable system, which will extend from Prudhoe Bay to Nome with landings in the communities of Barrow, Wainwright, Point Hope and Kotzebue. The system is planned to eventually link Europe and Asia with a fiber-optic broadband cable running along the floor of the Arctic Ocean. A land-based Alaska component of a sister project includes installation of a fiber-optic cable along the Dalton Highway between Fairbanks and Prudhoe Bay.

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Excerpt from Rex A. Rock Sr.’s address at the 36th annual Resource Development Council conference Held at the Dena’ina Center in downtown Anchorage in mid-November of 2015 By reading the headlines after Shell’s decision to suspend its Outer Continental Shelf operations – you’d think Alaska’s best days are truly behind us. However, to quote Yankee catcher Yogi Berra – “it ain’t over ‘til it’s over”. And I’m here to tell you – it ain’t over. For example, ConocoPhillips just had its first production, or “first oil,” from its CD-5 pad located on Native lands inside the National Petroleum Reserve-Alaska or (NPR-A). I’m excited to see CD-5 come online, and congratulate ConocoPhillips and Anadarko for their perseverance and hard work to make this project happen. It’s taken a long time to get to this point. This site was originally scheduled to come into operation in ’08, and yet – here we are in 2015. Conoco was forced to address a changing project design and subsistence concerns from the nearby community of Nuiqsut as well as other challenges that came by way of litigation. Kudos to ConocoPhillips Alaska for sticking with it and showing true resiliency. This is certainly a big step in development in the Colville River Unit, and is the first pad producing minerals that are 100 percent owned by ASRC. We have waited a long time to get here. It is through royalty payments from projects like these that allows ASRC to not only provide meaningful dividends, jobs

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and other benefits to our shareholders, but of course also be able to share revenues, as I mentioned earlier, through the 7(i) provision of ANCSA to other Alaska Native corporations. Talk about a win-win. ASRC has worked hard with ConocoPhillips, along with Kuukpik Corporation, to help make this project a reality. It’s meaningful partnerships like this that stand the test of time – and we have been mutual partners since before oil was discovered in the Colville River Delta, which was more than 20 years ago. It’s an exciting day for our companies as well as the state and I look forward to continued safe and responsible production. Now, we look to the west at GMT1… or Greater Mooses Tooth #1. As you heard from Joe Marushack earlier, GMT1 has been approved by ConocoPhillips Alaska and Anadarko. I know there are still some hurdles to clear – but I applaud the effort to get this project off the ground. This is an important project to ASRC, since we are the predominant mineral owner over the BLM in the initial GMT1 development. Despite having gone through multiple Environmental Impact Statements in an area that has been studied over and over, Conoco weathered yet another EIS to get a ‘Record of Decision’, or ROD, to develop a project that was actually permitted in 2004. While I agree there may have been new information and data available, and that the community

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of Nuiqsut may have wanted the ability to provide input, Conoco couldn’t receive its ROD without agreeing to pay the Bureau of Land Management $8 million in-lieu of subsistence mitigation related to project impacts! I wonder just how much of that money will actually go to the community, since the BLM and the eNGO’s or Environmental Non-Governmental Organizations, want to use the money to create what’s called a ‘Regional Mitigation Strategy’ for the NPR-A. Sadly, in my opinion, I believe it’s a safe bet the community may only see a small percentage of those funds. Again though – kudos to ConocoPhillips for their perseverance. Recently they started the permit process for GMT-2. This is certainly an encouraging step. Again ASRC will be working closely with them, as a partner, to see the development move forward. Let me address Shell and the company’s decision to cut its losses, at least for now, in Alaska. I’ll share a few tidbits that could put Shell’s announcement in a different perspective than you may have seen in your morning paper. As a reminder - ASRC has been very open in its support of responsible exploration and development of Alaska’s offshore resources. As a whaling captain, the evolution from onshore oil exploration and production to offshore was something that did raise concerns with me and other North Slope captains. We understood we had to find a way to align offshore development with the sustainability of our communities, while protecting our subsistence practices, culture and rights. We had intense debate among the leadership of the Arctic Slope region.

In the end, we concluded this development was happening, with or without our support or involvement and the only way to protect our subsistence, environment and local economies was to find alignment with the Outer Continental Shelf operators through investment. It gave us skin in the game and we went into our support with our eyes wide open.

“ We have found that forming partnerships between the developer and the local communities is critical, and you need to have alignment.” As many of you already know, in July of 2014, ASRC, together with six North Slope village corporations, formed Arctic Iñupiat Offshore, known as AIO, for investment in Shell’s leases in the OCS. We formed AIO with a healthy sense of optimism, and closely monitored Shell’s progress back to the water. It’s true – that optimism turned to disappointment in September when Shell made its announcement. However, it wasn’t disappointing just because of what Shell couldn’t find at the Burger Prospect; it was also disappointing because in its announcement, Shell also highlighted the challenging and unpredictable federal regulatory environment surrounding Alaska’s offshore. Unfortunately, the regulatory environment has proven to be a burden for any development, whether onshore or offshore and I believe with this type of uncertainty we will continue to see good opportunities slip away. Make no mistake - this was no victory continued on page 8

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for the environmental groups celebrating the decision; it should be seen as a major blow for Alaska. But the news isn’t all discouraging. To the contrary, keep in mind – Shell has maintained its lease position in both the Chukchi and Beaufort Seas. This means Shell hasn’t completely walked away; in fact, the company still sees a lot of promise in the OCS. At ASRC, we are still partnered with Shell through AIO – and I can tell you, we aren’t just waiting for Shell to come back we are still very engaged. We believe the AIO model – an agreement that was firstof-its-kind anywhere – is the way to go in the future. We have found that forming partnerships between the developer and the local communities is critical, and you need to have alignment.

“ We aim to be a long-term player and leader in the responsible development of our region.” Speaking of alignment, Hilcorp is working to get its permits for the Liberty field – offshore in the Beaufort. ASRC, through ASRC Exploration, LLC or AEX, has acquired a 10 percent working interest in the project and is partners with Hilcorp and BP. We are working together. As Alaskans we need to stand together to support this project. As we have seen in past prospects, like ANWR, the environmental industry is gearing up to shut this down. We cannot stand by and watch this project become a fundraising tactic for outside interests who want Alaska to be a playground

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for the elite. This is our Alaska, and projects like Liberty need to move forward. There are additional reasons to be optimistic about the future of the North Slope and the rate of oil production. Point Thomson is coming online in 2016. Heck, through AEX we are even planning to drill our own well in 2016 at the Placer Unit. As we look to our future, ASRC and companies like ours will have to make some tough choices; those we elect will also have to make some tough choices regarding our fiscal challenges. I ask that you stand with ASRC as we challenge our lawmakers to demonstrate leadership and make those tough decisions, even when it comes to issues like the Permanent Fund Dividend. If we fail to act responsibly, we will all own 100 percent of nothing. As a company always assessing the present while looking to the future – I want to say ASRC is open to new opportunities and partnerships. We aim to be a long-term player and leader in the responsible development of our region. We believe in the Arctic because we are from the Arctic. And when it comes to opportunity it ain’t over.

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THANK YOU SHELL

as iñupiat of Alaska’s Arctic Slope, we are the ones who stand to be most affected by offshore development along our coastal communities, and we believe that activities in our region should always be undertaken in collaboration with the people who call it home. In 2014 we established Arctic Iñupiat Offshore (AIO) to advocate for responsible development of Arctic Slope resources that would create lasting benefits for our people. We worked with Shell in creating a historic partnership that gave the Slope’s regional corporation and six village corporations a seat at the table when critical development decisions were being made. We participated in the decision process, balancing the

subsistence with the economic needs of our people. We went in with our eyes wide open to the potential risks and benefits of responsible offshore development. On behalf of AIO and the communities we represent, thank you Shell for working with Alaska Natives to pursue sustainable economies in the Arctic. Thank you for investing in our region despite substantial federal roadblocks. And thank you for setting the standard on how to partner with communities to ensure that development is done in a way that honors their values and traditional ways of life. We are proud to still be your partner. Arctic Iñupiat Offshore – Our voice. Our vision.

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Petro Star Inc. works to construct asphalt plant at North Pole refinery

Petro Star Inc. (PSI) broke ground on a new asphalt plant at its North Pole refinery in early October of 2015, and is working throughout the winter to complete the much needed facility. The project addresses an immediate need created by the 2014 Flint Hills refinery shut down and restores a local source of supply. “Petro Star Inc. and our parent company, Arctic Slope Regional Corporation, are investing more than $20 million in this new production unit,” said Doug Chapados, Petro Star Inc. president and CEO. “Had it not been for recent in-state tax-refiner tax credits which passed the legislature and were signed into law in 2014, this project would not have been possible. I congratulate those lawmakers who had the vision to push the tax credit legislation forward.” PSI anticipates asphalt production will begin in the spring of this year, in time to provide much needed relief to the State Department of Transportation and its asphalt contractors. Through local supply, the high cost of trucking asphalt to Interior Alaska project sites can be avoided. As the largest consumer of asphalt oil, the state of Alaska would be the largest beneficiary of those cost savings. Petro Star and ASRC are considering other capital projects that would qualify for the tax credits and would create value for energy consumers within the state.

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Work continues on the asphalt plant in North Pole.

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AES employee featured in Winds of Change magazine A professional profile of Suege Omnik, an ASRC shareholder and AES process engineering supervisor, is featured on pages 28 and 29 in the American Indian Science and Engineering Society’s (AISES) fall 2015 issue of Winds of Change magazine. Born and raised in Anchorage, Suege became interested in engineering as a young student and went on to attend the prestigious Massachusetts Institute of Technology (MIT) where she earned a degree in chemical engineering. After graduating from college, she began working at AES in 2006 as an environmental coordinator in the Health, Safety, Environment and Training (HSET) department before transitioning to engineering in September 2006. She has been a process engineer for nine years and was promoted to supervisor in 2013. She was featured in the magazine due to her personal and professional accomplishments. Winds of Change is the premier nationally distributed magazine published with a single-minded focus on career and educational advancement for American Indians, Alaska Natives, Native Hawaiians and First Nations with an emphasis on Science, Technology, Engineering and Math (STEM) studies and careers. Published seven times a year by AISES, the magazine features college information, student and faculty profiles, educational resources, scholarship information, internship information, advanced career opportunities, financial aid and feature stories all focused on indigenous students and professionals.

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The Single Payment Option for Arctic Slope Regional Corporation Shareholders is here! The Single Payment Option, or SPO, is for shareholders who prefer to receive their or their dependent’s ASRC dividends in a single payment at the end of each calendar year, instead of quarterly disbursements. Enrollment in the new program is voluntary, but to take advantage of SPO you have to enroll first. The open enrollment period has begun and will last until February 19, 2016. To enroll in SPO, log on to the secure ASRC Stock Assistance Portal (ASAP) at asap.iaminupiaq.com and sign up. You can also fill out a form, available at the Stock Department in Barrow and ASRC VRR offices on the North Slope, Fairbanks and Anchorage. If you don’t want to enroll in SPO, you don’t have to do anything. Contact the Stock department with questions regarding SPO at (907) 852-8633. Exciting changes are happening to the ASRC dividend program!

Quyanaqpak

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Need help filing your taxes? Help is headed to your community The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who make $53,000 or less, persons with disabilities, the elderly and limited English-speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals.

VILLAGE

DATES

SET UP LOCATION

Anaktuvuk Pass Pt. Hope Wainwright Fairbanks Atqasuk Barrow Kaktovik Nuiqsut Barrow Pt. Lay

February 5 - 7 February 19 - 21 February 21 - 23 February 22 (5:30-7:30) February 23 - 25 February 25 - 27 March 13 - 15 March 15 - 17 March 17 March 18 - 19

Nunamiut Corp. ASRC Office Community Center UAF Bunnell Building, Rm. #111 City Office Top of the World Hotel Tribal Council Office City Hall Senior Center Tribal Office

What to bring to your local VITA site • Proof of identification (photo ID) • Social Security cards for you, your spouse and dependents or a Social Security number • • • • • • • • • • • •

verification letter issued by the Social Security Administration An Individual Taxpayer Identification Number (ITIN) assignment letter may be substituted for you, your spouse and your dependents if you do not have a Social Security number Proof of foreign status, if applying for an ITIN Birth dates for you, your spouse and dependents on the tax return Wage and earning statements (Form W-2, W-2G, 1099-R, 1099-Misc) from all employers Interest and dividend statements from banks (Forms 1099) A copy of last year’s federal and state returns, if available Proof of bank account routing and account numbers for direct deposit, such as a blank check To file taxes electronically on a married-filing-joint tax return, both spouses must be present Total paid for daycare provider and the daycare provider’s tax identifying number such as their Social Security number or business Employer Identification Number Forms 1095-A, B or C, Affordable Health Care Statements Copies of income transcripts from the IRS and state, if applicable Anchorage services available at abdc.org/taxforms or call ABDC at 907.562.0335.

The VITA program is not affiliated or endorsed by ASRC.

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AEC facilitates business-to-business opportunities in the Arctic Tara Sweeney, AEC board chair

In just a few short years, the Arctic region has exploded in popularity and is recognized as the largest emerging market opportunity on the globe. The eyes of the world are looking north, with massive interest in gaining a foothold into this growing and increasingly accessible region. This amplified interest and attention carries with it additional responsibility. It also brings incredible opportunity. That’s why, through many years of discussion and negotiations, the Arctic Council formed the Arctic Economic Council (AEC) in 2014, a move that has served as a hallmark of the Canadian chairmanship. During the time of U.S. chairmanship, through 2017, the AEC will focus on four key areas that include maritime and telecommunication infrastructure; responsible energy and economic development in the Arctic; the promotion of stable and predictable regulatory frameworks; and Arctic stewardship. The AEC is governed by a 42-member board of directors from eight Arctic states and six permanent participant organizations.

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The Arctic Economic Council sets the table for the Arctic business community to have a meaningful voice in the responsible and sustainable economic growth of our homelands. The underlying principles for the creation of the AEC were to create a new independent forum of business representatives to facilitate Arctic businessto-business activities, promote responsible economic development and to provide a pan-Arctic business perspective to the work of the Arctic Council. Its purpose also includes facilitating responsible trade and investment in the Arctic through collaborative environments that bring together financial experts and potential investors. The advantages and benefits may be local, but the AEC is designed to be a resource for Arctic as well as non-Arctic stakeholders. Businesses need certainty and regulatory stability in order to minimize their risk while pursuing projects or investing in the Arctic. Dealing directly with the closest stakeholders during this process helps to provide that assurance. The most strategic vehicle for incentivizing short and long-term investment in the Arctic is to partner with those who will share in the result and responsibility. This is a region with the greatest resource available

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to any potential investors: local perspective, knowledge and insight. The value of local alignment is often overlooked, and is a focus of the AEC.

“ I look forward to building momentum in the Arctic in order for our regions to realize their enormous economic potential.” When you see the other themes of focus, the balance of AEC’s mission becomes clear: 1. Establish strong market connections between the Arctic states 2. Encourage public-private partnerships for infrastructure investments 3. Create stable and predictable regulatory frameworks 4. Facilitate knowledge and data exchange between industry and academia 5. Support traditional indigenous knowledge

But our communities can’t connect with opportunity if they are not well-connected. Reliable high-speed broadband in our regions remains a priority for the AEC and would enable Arctic governments to deliver improved health and education services, spur economic development, empower local businesses and allow consumers access to video and other high-speed applications. The current lack of high-speed Internet service within large areas of the Arctic impedes progress, from environmental protection in our communities to even emergency preparedness. The AEC is supported by the pillars of collaboration, partnership, innovation and peace. As the current Arctic Economic Council chair, I look forward to building momentum in the Arctic in order for our regions to realize their enormous economic potential. Tara Sweeney was unanimously selected as chairperson of the Arctic Economic Council in June and will serve until 2017. She also serves as executive vice president of external affairs for ASRC.

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AES teams up to support AEX placer drilling program

As ASRC Exploration, LLC (AEX) pursues its plan to drill a winter appraisal well on the Placer Unit just south of the Colville River Delta (Placer No. 3), employees from various ASRC Energy Services, LLC (AES) subsidiaries are working with the drilling engineering team to support the effort. AEX recently received a land use permit for an upcoming one-well exploration program at Placer No. 3. Lead by AEX’s President, Teresa Imm, this is the first year the company will act as the operator on its own lease. The permit covers one exploration well, an associated ice road, pad infrastructure as well as off-road thermistors which will be installed before ice road construction. AEX plans to use the Kuukpik No. 5 drilling rig this winter to drill the Placer No. 3 well. The location of the well is between the Kuparuk River and Colville River units, approximately 15.5 miles northeast of Nuiqsut. The well would delineate a reservoir previously encountered in 2004 by a group of companies with the Placer No. 1 and No. 2 wells. Upon approval of its Plan of Operations, AEX will conduct a 30-day flow test, separate fluids onsite, truck oil and water to existing North Slope facilities and flare natural gas if the well is successful. AES’ Regulatory and Technical Services (RTS) business unit is supporting the Placer effort through environmental and regulatory permitting, GIS support, cultural resource clearance, stakeholder engagement, field environmental compliance and subsistence

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advisor support. In addition to RTS, AES E & P Technology (EPT) is providing contingent labor support, and AES Response Operations (ARO) is providing on-site spill technicians and response equipment. The RTS group conducted staff training for participation in the AEX Placer spill response exercise at Witt-O’Brien’s Incident Command System (ICS) training facility in October. The ICS assessment was undertaken as an addition to AEX’s oil discharge prevention and contingency plan (C-Plan), and was held to demonstrate the efficiency in which AEX could organize, plan and execute an emergency response plan for the day of, and the day after an incident. The Environmental Protection Agency (EPA), the Alaska Department of Environmental Conservation (ADEC) and the North Slope Borough attended the spill response exercise to observe the AEX team. The ASRC and AES employees who participated in the drill included Marty Lemon (AEX) as the incident commander, Peter Stokes (AEX) as deputy incident commander, Ty Hardt (ASRC) as the public information official, Robin Demoski (RTS) as the liaison officer, Joe LoSciuto (AMS-ARO) as the operations chief, James Bond (AMS-ARO) as the logistics chief, Justin Shields (AEX) as the assistant planning chief and Brenda Maxwell (ASRC) as the finance/administration section lead. ASRC and AES staff showed a great deal of adaptability by filling roles within the ICS which normally have an emergency response – based focus. The ICS assessment drill was successfully completed.

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AES receives Health, Safety and Excellence Award from ConocoPhillips In October, ASRC Energy Services, LLC (AES) received its third Health, Safety and Environment (HSE) Excellence Award from ConocoPhillips Alaska (CPAI) – recognizing its dedication to an incident-free culture, proactive management participation in safety programs and setting an overall example of safe work practices. “It was great to witness AES’ safety culture

“ We would like to thank our transformation achieved over the years, and team up north for driving a to see it blossom this year is really special. culture of accountability and The workforce efficiency gains are possible because of the strong safety foundation because leading by example.” safety and efficiency go hand-in-hand,” said Bill Arnold, Manager of North Slope Operations and Projects for CPAI. “All the safety champions who are making this happen should be very proud of this accomplishment and I now share my thoughts that the true reward is in all the additional people going home safe and sound to their loved ones after every hitch.” AES is committed to providing the highest level of workplace safety and environmental stewardship on the North Slope and at every other project location. The company strives to enhance its quality, health, safety and environmental performance while continuously improving operational effectiveness, reducing waste and increasing productivity. “Our core values are to develop responsibly, live according to Iñupiat values, ‘own’ safety, protect our resources, and provide the highest quality to our clients,” said Jeff Kinneeveauk, President and CEO of AES. “Receiving recognition for upholding our commitment to those values demonstrates that our employees at every level are focused on safety performance and continuous improvement. We would like to thank our team up north for driving a culture of accountability and leading by example.”

From left to right: Nick Olds, Vice President, North Slope Operations and Development (CPAI); Jeff Kinneeveauk, AES President and CEO; Erick Schmidt, AES QHSET Director; Don Voigt, AES Operations Manager (CPAI); Allen Hagood, AES General Manager of Operations and Maintenance; Scott Selzer, AES COO.

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Moving aviation forward Everyday, more than a million Americans travel by air for business, for vacation or to see family. What many travelers don’t see is all the behind the scenes work that goes into making their journey safe, reliable and on time. Over 150 ASRC Federal research and technology solutions and ASRC Federal technical services employees work at the FAA’s William J. Hughes Technical Center in Egg Harbor, New Jersey, and travel around the country to different airports, improving the National Airspace System (NAS) and ensuring the safe departures, flights and arrivals for travelers.

“ What most travelers don’t realize is all the back-end work required to make air travel seem seamless and easy.” Through their work on the SOS-7 and SOS8 contracts, employees support the Federal Aviation Administration’s NAS, which serves as a tool for air traffic controllers and aids in the FAA’s mission to provide safe and efficient use of national airspace. The NAS consists of radar target, weather detection, flight data, communication, air traffic control and display systems, and supporting processing systems within the EnRoute, Oceanic, flight service and terminal air traffic control environments. Our SOS-8 efforts are focused on transitioning existing NAS ground-based air traffic control systems to satellite-based air traffic management systems. As part of the modernization efforts, employees provide transition support activities for EnRoute

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Automation Modernization systems or ERAM, which are replacing the legacy computer and backup systems used at 20 FAA air route traffic control centers nationwide. ERAM is the foundation for the Next Generation Air Transportation System, and ASRC Federal employees are at the forefront of its testing and implementation. All of the FAA’s NextGen programs, such as System Wide Information Management (SWIM), data communications, and Automatic Dependent Surveillance Broadcast (ADSB), depend on a successful ERAM deployment. “The safety of air travelers is the utmost significance of our work,” says Ann Maguire, Egg Harbor office manager and program office lead. “When replacing the old system we aim not only to make sure the new system keeps up with the technology, but also to ensure that the transition does not interrupt the air travel.” What most travelers don’t realize is all the back-end work required to make air travel seem seamless and easy. “When replacing the old system, the new system is running side by side with the old for at least a month and the switch-over almost always occurs around midnight,” adds Maguire. “The deployment team works through the night to ensure a smooth transition. Furthermore, a quadruple redundancy mechanism is in place so if anything in the new system does not work to the team’s satisfaction, the old system can still be brought back online.”

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Additionally, as part of SOS-7 contract efforts, employees are supporting the FAA’s NextGen IT strategy and are responsible for the development and deployment of cybersecurity strategies, including boundary security processes and algorithms, that allow the FAA to integrate real-time aircraft radar and tracking data into its national data centers. This support includes developing strategies for transition to cloud technologies that will allow the exchange of data across multiple

air traffic control platforms as well as military and homeland security applications. “The most rewarding part of being on this team is hearing about the technical abilities of our employees and the importance of their role within the FAA and NAS,” concludes Maguire. “We are most proud of the relationship we have established with our employees and the FAA customer, and of course knowing that we are ensuring the safety of air travelers on a daily basis.” 

FAA NAS support overview SOFTWARE DEVELOPMENT The software development team participates in the

design, coding and testing of the Standard Terminal Automation Replacement System (STARS) project that is replacing the old Air Traffic Control System (CARTS). The team explores millions of lines of source code and adds new functionality or improves an existing function to the system that provides the air traffic controllers the tools to make air travel safe every day. ADAPTATION Every airport is different. How do you build a software system that

works for every airport? The answer is adaptation. The adaptation team builds databases that are specific to a site or airport. This requires an intimate knowledge of the Air Traffic Control System to adapt data based on the geographical location, terrain shape, hardware equipment and other unique factors of each airport. It could take an adaptation specialist up to a year to complete a database. The adaptation is tested and amended repeatedly until the software runs smoothly. DEPLOYMENT When it’s time for a new system to be installed, the deployment team

comes into play. The team goes onsite, installs the new system alongside the old system, and tests the new system using live radar data to make sure the new system performs as designed. Hardware equipment is also constantly inspected to verify that correct connections are made. Finally, the software and adaptation suites are loaded into the new onsite system. Sometimes, the adaptation needs to be adjusted based on the live performance. It’s only when the new system runs flawlessly that the switchover occurs and the old systems can be shut down completely.

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Shareholder spotlight: Rainey Hopson, green thumb of the Arctic In order to further her journey toward a healthy lifestyle, Anaktuvuk Pass resident Rainey Hopson wanted to incorporate fresh fruits and vegetables into her diet. Doing so can be difficult for anyone looking to start eating healthier, but it’s even more so for those who reside in rural communities. Food that comes in to an Arctic community is usually frozen, dried or heavily processed. If it’s fresh, you can expect extremely high prices. It’s easy for those who live in the city to visit a local grocery store and see three or four different brands of oranges, apples

or peppers; however, in a community just north of the Brooks Range, the options are very limited. There is only one type of iceberg lettuce and other items, as Rainey points out, that are not “nutrient heavy.” It wasn’t that bizarre of an idea to start growing fresh produce in her hometown. Rainey recalls Elders and other residents successfully harvesting potatoes in their own backyards, so this inspired her to try to grow tomatoes. After those grew without a problem, she asked herself a simple question, “What else can I grow here?” A simple question, but it was certainly not a simple task. The climate in Anaktuvuk Pass is capable of growing fresh produce, however, in an area which only manages to reach 50 degrees during the height of summer and sees only 11 inches of rain each year, it does take extra effort to have a green thumb in the Arctic. Rainey does so much more than just select a fruit or vegetable to grow. She researches which produce are the healthiest and most beneficial to eat; monitors the pollination rates and climate zones; stays up to date on research regarding the Arctic climate; and reaches out to whomever she can (via email or the web) for advice. “There is very little research or knowledge of what produce you can grow and eat in the Arctic,” she shares. Rainey goes so far as to having chickens yearround – not just for eggs, but to help fertilize her crops. There is no running to the local

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Home Depot or Lowes to pick up a bag of fertilizer when you live on the tundra! Understandably, the process includes a fair amount of trial and error. Every year she grows 75 to 80 different varieties of plants, but can only harvest around 20 to 25. If one plant doesn’t grow the first time, she readjusts her technique and tries again until she’s certain it can’t grow. Some examples include soybeans and edamame. No matter what she tried they wouldn’t grow. For other plants, her hard work paid off. After four years of experimenting, she can now successfully grow Hungarian wax peppers in her garden. She was pleasantly surprised how spicy they were, even though they hadn’t reached full maturity and the fact that they were being grown in an Arctic climate. “It’s a really unique place and atmosphere,” she comments. Rainey has also noticed the effects of climate change on the soil and atmosphere over her years of gardening. Slugs and other creatures that typically are found more inland or in the southern region are starting to move north, and have even found their way into Rainey’s cabbage crops, ultimately making them inedible. Even the

trees are starting to make their way up to the northern regions, another rare find above the Arctic Circle. After nearly five years of digging, planting and practicing in her garden, people took notice and wanted to become involved. ASRC was among the first to fund her growing business, so she can now donate fresh fruits and vegetables once a week to Elders in her village and sell what she grows at a lower price. Rainey has helped build two greenhouses and five gardens in her community. She is even looking to hire seasonal employees for her business. At this rate, it might not be such a rare site to see locally-grown, fresh peppers and tomatoes in your “tutu” soup. Rainey “Nasuġraq” Hopson is the daughter of Larry and Evelyn Higbee, her paternal father is Robby Cox. Her Aapa and Aaka are Titus and Lydia Nashookpuk and Jewell and Leo Higbee. Rainey is originally from Point Hope, Alaska, but currently resides in Anaktuvuk Pass with her husband and their children.

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AES earns recognition for American Heart Walk fundraising efforts In late September, the AES Holy-Walk-A-Molies team came in first place in Anchorage as the top fundraising team, raising more than thirteen thousand dollars in donations. Over 35 AES employees and family members participated in the 5K walk downtown to support the American Heart Association (AHA). After the walk, Joe Kocienda, AES Project Controls Manager and a heart attack survivor, accepted additional awards on AES’ behalf including a top contractor award, and a top individual support award for AES CEO and President, Jeff Kinneeveauk who raised $6,446. Throughout the summer and fall, the Holy-Walk-A-Molies held bake sales, auctions and pizza sales to raise money for the AHA. The money raised for the Anchorage Heart Walk funds research and initiatives that promote the prevention, treatment and improved patient care in the areas of cardiovascular disease – the leading cause of death in the U.S. The AHA is the largest voluntary health organization dedicated to defeating heart disease, stroke and other cardiovascular diseases. Last year, 15,000 companies participated in 343 Heart Walk locations throughout the U.S. and helped raised $108 million for the AHA and American Stroke Association.

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Executing our financial growth strategy: Health and Human Services, the Federal Bureau of Investigation, Department of Health, U.S. Census Bureau, Federal Communications Commission and Defense Information Systems Agency.”

ASRC Federal has been on a roll in the fourth quarter of 2015 in the execution of its financial growth strategy by posting over $1 billion in contract wins and announcing its recent acquisition of Data Networks Corporation (DNC). The recent contract wins support our goal of growing organically and help us further our depth in current capabilities, while the addition of DNC supports further diversification of our customers and capabilities. “This acquisition demonstrates ASRC’s continued commitment to diversifying and growing our government services portfolio,” said Rex A. Rock Sr., president and CEO of ASRC. According to Mark Gray, ASRC Federal president and CEO, “The acquisition of DNC meets important objectives established by ASRC Federal’s strategic plan. It positions us to enter into the health care IT market and expands our customer base, while broadening our capabilities in the areas of health care IT, software development, enterprise architecture, data analytics and integration, and program management. Additionally, it will expand our customer footprint with

DNC will operate under the Information and Technical Solutions group led by Tina Dolph, operating group president. The majority of employees are located in Reston, Virginia, with the rest dispersed across customer locations in the metro D.C. area as well as in Arizona, Colorado, New Mexico, Texas, Illinois and Hawaii. DNC has a reputation for excellence and for the last five years has been noted on the list of Fantastic 50 – the Virginia Chamber of Commerce’s recognition of the 50 fastest growing companies across the state.

“ This acquisition demonstrates ASRC’s continued commitment to diversifying and growing our government services portfolio.” DNC’s management team is working closely with ASRC Federal Shared Services and operating group personnel to ensure the integration is progressing with minimal disruption to normal business operations.

continued on page 24

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Getting to know the ASRC Federal DNC leadership team CASS PANCIOCCO

MICHELE BOND

ASRC Federal SVP, Corporate Development

Senior VP, Health IT and Federal Civilian

After the acquisition, Cass was named senior vice president of corporate development for ASRC Federal. In his new role, Cass reports directly to Mark Gray, ASRC Federal president and CEO, and is focused on our mergers and acquisitions and our capital deployment strategy. Additionally, Cass will use his extensive experience to improve the utilization of our existing GWAC/IDIQ contract vehicles and lead the identification and qualification of procurement targets.

Michelle leads federal health IT, one of the areas that support our diversification strategy. She is responsible for managing and growing the company’s federal health IT and federal civilian business segments. She previously led a $215 million business unit whose primary clients included the Centers for Medicare & Medicaid Services, the Department of Veterans Affairs and the Military Health System.

CHUCK OLSICK

VP Technology

President, ASRC Federal DNC Chuck has over 30 years of experience in federal government contracting and will continue to provide leadership to DNC. He will provide leadership to the day-to-day operations and support strategic planning efforts to ensure continued growth. ALAN THOMAS

VP, DOD and Intelligence Alan is responsible for managing and growing DNC’s DOD and intelligence community business segment. His focus is on program performance, customer satisfaction and expanding DNC’s functional expertise in IT solutions and services, logistics and information sharing. Earlier in his career, Alan entered federal service as a presidential management fellow and served on both the Army staff and in the Office of the Secretary of Defense.

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JOANIE BARR

Joanie is responsible for providing technical direction and guidance to further advance DNC’s core competencies, processes and technology base as well as leading and supporting solutions development for projects and proposals. She has 25 years of experience, primarily in the federal IT services market. She has led successful corporate software development process improvement initiatives using the Software Engineering Institute (SEI) Capability Maturity Model (CMM) and Capability Maturity Model Integration (CMMI) for multiple organizations. DAVID WOLF

VP Civilian Programs David is responsible for managing and growing the company’s civilian sector business segment. He has over 20 years of progressive technical, management and business development experience leading small and large organizations delivering complex information technology and program

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management solutions. Throughout his career, he has led organizations that provided professional services to public sector clients, enabling them to significantly improve the constituents’ services while reducing costs. In addition, he is a member of the Federal Bureau of Investigation Citizens Academy Alumni Association. FIONA BARSHOW

VP BD, Federal Health and Civilian Fiona is a key driver in developing and executing DNC’s growth strategy across the health and federal civilian markets. She has almost 20 years of experience in business development and capture, including over 10 years of experience in the law enforcement, justice and national security markets. As an industry leader, Fiona has served in a number of roles, including Board Director for the Integrated Justice Information Systems Institute; Chair for the ACT-IAC Information Sharing Committee; and Committee Leader for AFCEA initiatives. She is an ACT-IAC Fellow and has served as a mentor in mentorprotégé programs within ACT-IAC and Women-In-Technology.

(Top) Mark Gray, ASRC Federal president and CEO, center, with DNC employees; (Middle) Greg Resutek, ASRC Federal COO, center, with DNC employees; (Bottom) Chuck Olsick, ASRC Federal DNC president, center, with DNC employees.

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PRSRT STD US Postage PAID Anchorage, AK Permit #537

P.O. Box 129 Barrow, Alaska 99723 asrc.com

ASRC Elder and shareholder rates STANDARD ROOM

Single occupancy Double occupancy Triple occupancy Quad occupancy

DELUXE ROOM

$ 187.10 $ 208.10 $ 229.10 $ 250.10

Single occupancy Double occupancy Triple occupancy Quad occupancy

$ 239.49 $ 260.49 $ 281.49 $ 302.49

*All rates include tax.

ASRC shareholders must show their shareholder ID card on their first visit and stay at the Top of the World Hotel. The shareholder’s ID card will be entered into the hotel database, and the next time the shareholder stays at the hotel, the front desk clerks will be notified that they are ASRC shareholders and will qualify for the lower hotel rate. For more information please contact the hotel at 907.852.3900 or by email at twh@tundratoursinc.com.

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ASRC 4Q 2015 Newsletter  

This is the 4th quarter of 2015 newsletter for Arctic Slope Regional Corporation.

ASRC 4Q 2015 Newsletter  

This is the 4th quarter of 2015 newsletter for Arctic Slope Regional Corporation.

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