Chairs Report
November 2007

Dear Shareholders, I would like to extend a holiday greeting to all shareholders. Thanksgiving and Christmas is a wonderful time for families; I hope everyone enjoys a festive and safe holiday season.

This year’s annual meeting was a huge success. Not only was this year’s meeting very well attended, but it also included great input from shareholders. For those shareholders who could not attend the 2007 annual meeting, we were asked to address some of the questions and answer session in this newsletter and provide responses from the annual meeting. The board looks forward to hearing from shareholders at the annual meeting and throughout the year. This is your corporation and we appreciate your input.

Adak Housing Program
Adak is a work in progress. The corporation has implemented two phases in a housing program so far: Phase One for shareholders in which 52 shareholders took advantage of the program, and Phase Two for existing residents who have lived on Adak for several years. The next phase is in development. Shareholders’ comments are taken seriously when looking at the future of Adak.

Audit Timeliness
The board is very concerned with the issues that prevented a timely audit this year. Plans are now underway to remedy this situation. The Aleut Corporation experienced turnover in key financial positions in both the parent company and in one subsidiary company. Additionally, new software in this area added further delays, all of which are being addressed. The board is very concerned with this issue and is monitoring corrective procedures implemented by the TAC CEO, Troy Johnson, ensuring corrections for next year’s audit.

The $10 million goal for the shareholder permanent fund and what that means
Many shareholders are asking the question, “we’ve reached $10 million on the shareholder permanent fund, so now what?” The current shareholder permanent fund policy states that once the permanent fund reaches the $10 million mark, 50% of future earnings will go back into the fund to keep it healthy and robust, 35% of future earnings will be used as a portion of the shareholder dividend, and 15% will go to TAF. The board is currently reviewing its permanent fund policy. We will be sure to update you with any future changes.

Better microphones at the meeting
Logistics are always an issue at large events such as our annual meeting and banquet. Shareholders were so accommodating in dealing with these issues as they arose. Management will ensure this issue is addressed next year.

CIRI article on elders’ benefits
It was pointed out that the legality of elder’s benefits at the CIRI corporation were in question. The Aleut Corporation elder program has a similar model. The TAC board will be watching this play out with a great deal of interest. We will also be discussing this at our February planning session.

As TAC becomes more profitable, charitable contributions should increase
The TAC board was praised for our philanthropic efforts, but was encouraged to give more as we generate more revenue. I can assure shareholders that the board considers all donations very carefully, and works to ensure all corporate donations are put to the best possible use.

Procedure for appointing the president
It was brought up at the annual meeting that the president be elected by the shareholders, not by the board of directors. The board takes the role of appointing officers very seriously and is diligent in this effort. Similarly, I believe, to every village corporation structure, that The Aleut Corporation has a structure that empowers all shareholders. That power lies in their ability to elect their board of directors to represent them in the board room and I know shareholders take this responsibility seriously. At this time, the TAC board has no plans to change our current corporate governance structure. We encourage all shareholders to play an active role in the process by continuing to elect your board of directors.

Education
There were two issues brought up in the area of education: the existing state High School Qualifying Exam and adult higher learning. The TAC board is wholeheartedly committed to educational benefi ts for our people, whether that is higher education or vocational training. In addition to bringing these questions and concerns to The Aleut Foundation, the board will stay committed to this effort through our work at The Aleut Foundation. This will all be an effort benefi ting our shareholders and their descendants across the U.S. Please contact Leatha Merculieff at The Aleut Foundation to learn more on our efforts in this area at: taf@thealeutfoundation.org or (907) 646-1929.

A Thank You Extended
TAC was thanked for the visits to our region by our President, Thomas Mack. Thomas has been visiting the region and meeting one-on-one with shareholders. This provides a great resource to the board in hearing your concerns, questions, and input.

Q&A candidates
There was a discussion on providing time to candidates for question and answer time during the annual meeting. The board has tasked the president to come up with a game plan to produce solutions on this request. We will have more on this in the near future.

14(h)(1) funding
It was asked whether TAC was still funding the 14(h)(1) program through A/PIA. The 14(h)(1) program and the agency designee is currently being reviewed.

Combine efforts on lobbying
It was asked whether or not The Aleut Corporation could combine efforts on lobbying in Washington D.C. with those efforts from within our region. Our president is very open to discussing TAC’s lobbying efforts and combining forces with others in our region if and when that makes sense.

How will management change affect bulk fuel sales
Aleut Enterprise Corporation’s current management is doing a wonderful job of keeping abreast of day-to-day operations. AEC’s year-to-date financial performance exceeds FY08 budgeted numbers. The bulk fuel sales experienced in FY07 will not be repeated for FY08. Changes in the market place and the addition of two regional bulk fuel purchasers are the cause.

Is an airport necessary in Akutan?
TAC receives many questions regarding particular communities. Many of these questions are not within our realm of business, and we are not able to address them. To do so would undermine that communy’s planning efforts. I will say though, TAC does support economic development and growth within our region. A perfect example of that support lies in the board’s recent approval of a resolution endorsing the King Cove/Cold Bay road project. We are hopeful that this effort will finally bring results for the community and improve emergency care for our people in that area.

Sharon Guenther Lind
Chairman of the Board