In order to meet these strategic goals, the Corporation must generate sufficient earnings. To that end, BBNC’s assets have been allocated to a variety of businesses that operate throughout Alaska and across the United States. As noted above, the Corporation’s assets are primarily allocated in two key areas: to a passive portfolio of investments (the Portfolio) and to the operating subsidiary companies. There is also a small allocation to corporate assets which includes the Corporation’s headquarters building in Anchorage, Alaska. The Portfolio is comprised of a variety of assets including marketable securities and liquid and non-liquid alternative investments. Management classifies the operating subsid- iaries into four distinct business lines which are: • Construction • Government Services • Industrial Services • Tourism The Corporation also has earnings from natural resource activities that are primarily comprised of certain revenue sharing payments received from other Alaska Native cor- porations as required under ANCSA. The following pages are management’s outlook for FY2020 and view of the Corporation’s FY2019 results in total, for the Portfolio and of the business lines. FY2020 OUTLOOK Management expects FY2020 to bring both challenges and opportunities across the broad landscape of BBNC’s business activities. Management expects overall earnings before income taxes to be consistent or better in FY2020, due to consistent profit in most business lines and benefits from planned acquisitions. The Industrial Services business line can positively or negatively be affected by oil prices. Uncertainty in the Alaska oil and gas industry driven by the precipitous drop in oil prices during FY2016 negatively affected earnings of BBNC companies in this business line in FY2018. However, in FY2019, risks were mitigated by the strong positioning of subsidiaries within the industry, and significant reductions in operating costs in turn generating significant profits. Management expects these exceptional results to continue into FY2020. BBNC companies are some of the safest and most efficient contractors working in Alaska and BBNC’s customers and our customer base includes some of the strongest oil and gas companies operating in the state. The Construction business line is expected to generate earnings exceeding those in FY2019. During FY2019, the SES group experienced several challenging contracts gen- erating significant losses for this business line. Management expects those losses to reverse in FY2020, returning the Construction business line to significant profitability. The federal government is the primary customer for the Government Services business line. Earnings in FY2020 are expected to remain consistent from levels seen in recent years. In prior years, BBNC made certain changes 26 BBNC FY2019 ANNUAL REPORT to the strategic alignment and management team within the business line in order to respond to the needs of the Corporation’s customers. Following a directive of the BBNC Board of Directors to increase investments in the Bristol Bay region, BBNC has ini- tiated several strategies to increase both investments in the region and economic opportunities for shareholders. One such strategic initiative authorized by the board is called the In-region Government Contracting (IGC) Program. The goals of the IGC Program are as follows: • Increase federal contract awards and successful performance rates; • Leverage BBNC subsidiaries capacity, experience and knowledge; • Create returns for BBNC, tribes and village corporations, and • Develop and provide extensive training to village corporations and tribes and their managers to increase their knowledge of federal government contracting programs, regulations and corporate governance to ensure full compliance for government contracting requirements.