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13,122OUR JOURNEYOF SUCCESSThe Growth and Transformation of ASRC2019LOWER48

1 INTRODUCTIONIntroductionIn 2022, Arctic Slope Regional Corporation will celebrateits silver anniversary – a monumental milestone markinghalf a century since the Alaska Native Claims SettlementAct took shape, setting the stage for the first-of-its-Above: Petro Star Inc. operatesrefineries in North Pole, Alaska(pictured) as well as Valdez.kind creation of a dozen land-based Alaska Nativecorporations, or ANCs.Since its incorporation in the summer of ’72, ASRC has notwas once again recognized by local business leaders asonly developed into the largest Alaska Native corporation,the top-grossing homegrown company – a title ASRC hasbut also grown into the most successful locally-ownedbeen honored to hold for 25 consecutive years.and operated business in Alaska. In 2019, the Corporation

OUR JOURNEY OF SUCCESS 2Using Iñupiaq values as our guide, this stable pattern of financialstrength has equated to direct as well as indirect benefits to ourexpanding family of shareholders, to include sustainable dividendlevels of 55 per share. In 2019, shareholder dividends were 70 pershare. It has also provided the keys to driving success in shareholderand employee development as well as community economicdevelopment, both critical areas of focus for the Corporation.This carefully orchestrated roadmap of expansion and diversificationacross our family of companies is also driving ASRC in directionsearlier generations may never have imagined. In fact, it’s safe to saythe changing face of ASRC would be all but unrecognizable to thosewho haven’t closely monitored our progress along the way.As we describe in this special publication, prepared and presentedby Arctic Slope Regional Corporation, the Corporation’s positivegrowth and unprecedented period of expansion – our journey ofsuccess – is no accident. And, with aggressive targets, guidelinesand checkpoints for the Corporation to follow – to include becomingone of the top 100 largest private companies in the nation by 2023 –it’s only the beginning.“THIS CAREFULLYORCHESTRATEDROADMAP OFEXPANSION ANDDIVERSIFICATIONACROSS OUR FAMILYOF COMPANIES ISALSO DRIVING ASRCIN DIRECTIONSEARLIER GENERATIONSMAY NEVER HAVEIMAGINED.”Left: Little Red Services is a subsidiaryof ASRC Energy Services.

3 ‘WE ARE INDEPENDENT’‘We are Independent’As spelled out in ANCSA, Native corporationsacross the state, including Arctic Slope RegionalCorporation, were established in the early ‘70s asAbove: An employee of North Pacific Fuel (aPSI company) assists in refueling the NorthernHawk in Dutch Harbor, Alaska.private, for-profit businesses.ASRC’s Certificate of Incorporation was signed in Juneindependent, autonomous and are practicing self-of 1972, with the company described by then-presidentdetermination for our own Iñupiat people within theJoseph Upicksoun in the first annual report: ‘We areboundaries of the Arctic Slope region.’

OUR JOURNEY OF SUCCESSTo provide employment and services to its early pool ofapproximately 3,800 shareholders, early subsidiaries began to takeshape, including Iñupiat Builders, SKW/Eskimos, Inc., Arctic SlopeConsulting Engineers and Arctic Slope Alaska General. In orderto provide revenue while these initial companies became moreestablished, ASRC signed oil and gas exploration leases with severaloil companies. The oil and gas industry would make a significantimpact on the company’s bottom line in the early years.In 1978, six years after incorporation and the first year ASRC issuedshareholder dividends, natural resource development would bring in 4 million in revenue. This equated to 31 percent of the total revenuefor that year.“ 4WE ARE INDEPENDENT,AUTONOMOUS ANDARE PRACTICING SELFDETERMINATION FOROUR OWN IÑUPIATPEOPLE.”– J OSEPH UPICKSOUN,ASRC President, 1972ARCTEC Alaska, an ASRC Federal Holding company,helps to maintain the Sparrevohn Air Force Stationapproximately 200 miles west of Anchorage.

5 ‘WE ARE INDEPENDENT’By 1990, natural resource development revenue wouldChallenges to the Alaska market and other factorsdrop to just two percent of the Corporation’s totalcontributed to the change, but as was outlined inrevenue. A year later, ASRC reported an additional 9the 2018-2023 Strategic Plan, through thoughtfulmillion in revenue from revising certain oil and gas leasesreinvestment and by taking advantage of our strongon KIC lands moving forward, while natural resourceindustry reputation, ASRC remains committed todevelopment would remain critically important to ASRCpreserving a long-term position to capture opportunitiesand its bottom line, its impact would be lessened as otherand take advantage of future growth in the naturalbusiness lines, both inside and outside of the state, wouldresource development sector.become larger and more prominent.2018 REVENUE BY SEGMENTGovernment Contract Services 41%Petroleum Refining/Marketing 26%Energy Support Services 14%Industrial Services 14%Construction 4%Other 1%Above: A Builders Choice employee works outside of the facility in South Anchorage.Builders Choice is a subsidiary of ASRC Construction Holding Company.

OUR JOURNEY OF SUCCESS 6EBITDA PROGRESSION2002 – 2010 (over 9 years)2011 - 2018 (over 8 years) 1.27B 1.51B 375 250L48 125in millionsAlaskaNaturalResources 002“03040506070809101112131415161718Above: ASRC Energy Services is the largestoilfield services company in the state of Alaska.THROUGH THOUGHTFUL REINVESTMENT AND BY TAKINGADVANTAGE OF OUR STRONG INDUSTRY REPUTATION,ASRC REMAINS COMMITTED TO PRESERVING A LONGTERM POSITION TO CAPTURE OPPORTUNITIES”

7 A CHANGING REVENUE MIXA Changing Revenue MixThrough the years, as ASRC became less and lessdependent on Alaska’s oil and gas industry to provide a largepercentage of its earnings, another slow but consistentshift was also taking place – the increasing spread of theCorporation’s operations across the Lower 48.Above: ASRC Federal HoldingCompany (AFHC) employeeAnton Potoski (pictured)at NASA’s Goddard SpaceFlight Center. AFHC providestechnical as well as otherservices to civil, intelligenceand defense agenciesthroughout the United States.Many factors contributed to the decision to seekeconomic expansion and presents an abundance ofadditional growth and diversification in the contiguousbusiness opportunities across various industries.United States. The Lower 48 continues to see robust

OUR JOURNEY OF SUCCESS 8ASRC’S REACH(as of September, 2019)Highconcentrationof employeepresenceLowconcentrationof employeepresenceBeltsville, MDASRC Federal CorporateHeadquartersConcord, CAASRC Industrial Services, Inc. C orporate HeadquartersASRC has a presence in 47 ofthe 50 states in the U.S.In our Government Contract Services sector, increasedLast Frontier. Alaska’s regulatory climate and uncertainfederal spending on infrastructure and other initiatives hastax environment – coupled with oil price volatility –spurred significant capital investment plans, which createscontinues to threaten prospects for long-term growth.additional incentives for growth. In our business segmentIndustrial Services, we anticipate a continued steadyincrease in demand for additional facility infrastructure andother services, particularly in the Gulf South.Based on these current as well as expected futureeconomic conditions, factoring in the diligently preparedand approved strategic goals established by the boardof directors and senior leadership team, ASRC set itsThe economic outlook across the Lower 48 stands ingaze to the south and the additional opportunities for thecontrast to the challenging business atmosphere in theCorporation and its shareholders across the Lower 48.

9 A CHANGING REVENUE MIXIn 2002, a couple of years after ASRC reached a historic milestoneof earning 1 billion in annual revenues, approximately 16 percentof the Corporation’s earnings before interest, tax, depreciationand amortization was coming from operations based in thecontiguous United States.By 2010, Lower 48 operations were responsible for a little more than 30percent of the company’s EBITDA.Six years later, for the first time in the company’s history, operationsoutside of Alaska actually delivered a higher percentage of EBITDA thanthose based in-state. This increase is being driven by the success ofASRC Federal’s diverse portfolio as well as acquisitive growth in our“.OUR OPERATIONSIN-STATE AREN’TSHRINKING, IT’SJUST THOSE OUTSIDEOF ALASKA AREGROWING AT AFASTER RATE.”Industrial Services sector.ALASKA COMPAREDTO LOWER 48(EBITDA)69%68%66%59%41%32%AlaskaLower 48200534%31%20102015PresentIt’s important to note – as the percentages of out ofand our partners in Alaska’s oil and gas industry. Simplystate EBITDA continue to increase, ASRC’s Alaska-basedput, our operations in-state aren’t shrinking, it’s justoperations are not only fully-supported for the short- asthose outside of Alaska are growing at a faster rate.well as long-term, but continue to thrive and grow also.The Corporation has made significant investments in ourPetroleum Refining and Marketing business sector andwe continue to strengthen our relationship with Oil SearchMoving forward – we anticipate an increasing percentageof our EBITDA to originate from our Lower 48 operationsas we continue to seek opportunities outside of Alaska.

O U R S H A R E H O L D E R S AT A G L A N C ECatherine Edwards and her familyenjoy a pleasant day outside of herhome in Anaktuvuk Pass.ASRC SHAREHOLDERS 1,000 shareholdersOUR JOURNEY OF SUCCESSCHANGING SHAREHOLDERGEOGRAPHICS9,195*3,797Total number of shareholders1982199210Our Shareholdersat a Glance19723,582 20056,0115,041 Live on the Slope2,956 Live elsewhere in AK1,097 Live outside of AK101 Outside USA*These numbers are approximate20028,43313,1222012Total number of shareholders11,278201913,122Of today’s shareholder population, approximately 2,000 are from the originalenrollment at the time of incorporation.ASRC began enrolling new shareholders (born after 1971) in April of 1990.20195,775 Live on the Slope4,880 Live elsewhere in AK2,331 Live outside of AK136 Outside USACourtesy: ASRC Stock Dept.As of September, 2019

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across the state, including Arctic Slope Regional Corporation, were established in the early '70s as private, for-profit businesses. ASRC's Certificate of Incorporation was signed in June of 1972, with the company described by then-president Joseph Upicksoun in the first annual report: 'We are independent, autonomous and are practicing self-