Ø Report on value, income, and prospects of Alaska’s key assets for the preceding year
Ø Identify emerging public policy issues related to those assets
Ø Ask asset managers to identify what criteria they should be judged upon in the coming year
Ø Track performance of those assets - and asset managers - against that criteria and other metrics

Manages its assets as: Ø Natural Resources, available for sale, lease, or conservation

Ø Financial Assets, intended to produce financial return

Ø Enterprises, intended to produce both financial return and key infrastructure

Total Gross State Product – $55.4 Billion (2019) Alaska’s GSP grew 2.5% from 2018 National Average was up 2.3% Top State Industries as a Percentage of GSP Care Finance & Real Estate All Others All Others Mining, Oil & Gas Government Transportation Transportation 14% Finance & Real Estate Mining, Oil & Gas Edcuation & Health Care Government 16%

Per Capita Personal Income: $62,102 (2019) Up 4.2% from 2018 % of the National Average of $56,663

Source: Bureau of Economic Analysis

Total State Assets in Billions

Each Individual Alaskan’s Share $101,026 FY '11 FY '12 FY '13 FY '14 FY '15 FY '16 FY'17 FY'18 FY'19 Total State Assets

Sources: State of Alaska Comprehensive Annual Financial Report (FY2019) U.S. Bureau of Economic Analysis

Total Fisheries Tax Revenue Millions

FY '12 FY '13 FY '14 FY '15 FY '16 FY'17 FY'18 FY'19

Total Budget $13.5 $13.39 $14 $14.4 $14.6 $14.1 $13.7

Revenue from User Fees

Total Acres of Land 3.3 3.3 3.3 3.3 3.3 3.3 3.3

FY ’19 FY ’18 FY ‘17 FY ‘16 FY '15 FY '14 FY '13 FY '12

Millions of Acres 100.6 100.5 100.5 100.5 100.5 100.4 100.4 100.4

Less: Total Land Conveyed -2.3 -2.2 -2.2 -2.2 -2.2 -2.2 -2.2 -2.2

Remaining Total Acquired Lands 98.3 98.3 98.3 98.3 98.3 98.2 98.2 98.2

*Does not include 65 million acres of submerged land acquired at Statehood.

FY ’19 FY ’18 FY ‘17 FY ‘16 FY ‘15 FY ‘14 FY ‘13 FY ‘12

Millions of Acres Leased

# of Leases 1,960 2,094 2,071 2,226 1,997 1,906 1,748 1,569

Petroleum Property Tax $119.5 $121.6 $120.4 $111.7 $125.2 $128.1 $99.3 Petroleum Corporate $217.7 $66.4 ($59.4) ($58.8) $94.8 $307.6 $434.6 Income Tax Severance Tax (a.k.a. Production Tax) $595.5 $749.9 $134.5 $186.0 $389.7 $2,614.7 $4,050.3 Petroleum Mineral Bonuses and Rents $36.6 $24.5 $5.3 $30.3 $26.1 $27.4 $19.4 Oil and Gas Royalties $1,074.5 $977.8 $676.2 $840.3 $1,052.1 $1,685.0 $1,748.4 Total Unrestricted Petroleum $2,043.8 $1,940.2 $867.9 $1,109.5 $1,687.9 $4,762.8 $6,352.0 Revenue Total Unrestricted Nonpetroleum $490.1 $473.3 $477.7 $423.2 $568.4 $627.3 $576.5 Revenue

Source: Alaska Department of Revenue: 2020 Spring Revenue Forecast

State of Alaska Update on the State’s Investment Funds

April 29, 2020 Commonwealth North presentation Commissioner Alaska Department of Revenue

•Fiscal Summary •Last Update: April 6, 2020

Changes to Three-Year Unrestricted Revenue Outlook ANS OIL PRICE (Nominal $ per barrel) FY 2020 FY 2021 FY 2022 Fall 2019 Forecast $63.54 $59.00 $61.00 Spring 2020 Forecast $51.65 $37.00 $41.00 Change ($11.89) ($22.00) ($20.00)

Source: Spring 2020 Revenue Forecast

Brent Forecasts Comparison

Source: Analyst forecast is an average of 5-19 firms from a Bloomberg survey as of April 23, 2020. Futures prices are from the New York Mercantile Exchange (NYMEX) as of April 23, 2020. The U.S. Energy Information Administration (EIA) forecast is from their April 2020 18 Short-Term Energy Outlook. Forecasts are adjusted using Alaska Department of Revenue’s 2.25% inflation assumption.

FY 2021 UGF Relative to Price per Barrel (excluding Permanent Fund transfer)

Source: Spring 2020 Revenue Forecast Notes: Assumes official forecasted North Slope production of 486,500 barrels per day. Near the forecast ANS price, a $1 change in price leads to an approximately $25 million change in UGF revenue.

•Update on Reserves and Other Funds

Constitutional Budget Reserve Fund Fiduciary oversight: Commissioner of Revenue Constitutional Budget Reserve Moderate Risk, Investment Objective

Broad Domestic Equities, 2%

Global Ex-US Equities, 2%

Target Asset Allocation Cash Equivalents, Broad Fixed 75% Income, 21%

Actuals Market Value 12/31/2017 $3,087,000 ($thousands) 12/31/2018 $1,710,500 Actuals Benchmark1 3 Month 0.78% 0.74% Returns 12/31/2019 6 Month 1.72% 1.68% (Rolling) 1 Year 5.48% 5.34% 3 Year 3.04% 2.90% 5 Year 2.28% 2.06% Callan Projected 10-Year Return: 3.01% Cash Equivalents: 3-month U.S. Treasury Bill; Broad Fixed Income: BB U.S. Aggregate Index; Broad Domestic Equities: Russell 3000 Index; Global ex-US Equities: MSCI ACWI ex-US Index

Current Fiscal Year market values and stated returns are unaudited, preliminary, and include some estimates.

Alaska Permanent Fund Fiduciary oversight: Alaska Permanent Fund Corporation Alaska Permanent Fund High Risk, Investment Objective Long Term investment horizon Private Equity, 13% Real Estate, Fixed Income 12% Plus, 20% Infrastructure, Absolute Return, 5% Target Asset Allocation

Public Equity, Asset 37% Allocation, 5%

Actuals Market Value 12/31/2017 $64,007,300 ($thousands) 12/31/2018 $60,369,700 Actuals Benchmark 3 Month 4.07% 1.31% Returns 6 Month 5.38% 2.79% 12/31/2019 1 Year 15.71% 7.29% 3 Year 9.95% 7.10% 5 Year 8.31% 6.82% Projected 10-Year Return: CPI + 5% Total fund return objective: Consumer Price Index (all urban consumers. US city average, all items, unadjusted index) plus 5%

Current Fiscal Year market values and stated returns are unaudited, preliminary, and include some estimates; data available at APFC.org

Public Employees’ Retirement Systems and Teachers’ Retirement Systems* Fiduciary oversight: Alaska Retirement Management Board PERS Retirement Defined Benefit Pension & Health TRS Retirement Defined Benefit Pension & Health Trust High Risk, High Risk, Investment Objective Long Term investment horizon Long Term investment horizon

Real Assets, 13% Fixed Income, 24%

Private Equity, 11%

Target Asset Allocation Broad Domestic Equity, Global Equity Ex-US, 26%

Actuals Actuals Market Value 12/31/2017 $17,097,800 $8,477,000 ($thousands) 12/31/2018 $16,076,200 $7,917,500 Actuals Benchmark Actuals Benchmark 3 Month 4.92% 5.62% 4.93% 5.62% Returns 1 Year 17.34% 19.49% 17.36% 19.49% 3 Year 10.04% 9.44% 10.05% 9.44% 5 Year 7.59% 7.19% 7.59% 7.19% Actuarially Assumed Rate of Investment Return: 7.38% (ARMB voted to approve a revision from 8% to 7.38% at the 1/11/2019 board meeting) 1) 26.0% Russell 3000, 18.0% MSCI ACWI ex-US IMI Net, 26.0% BB US Aggregate, 1.2% 3-month T-bill, 4.8% Russell 1000, 4.9% NCREIF NFI-ODCE, 3.2% NCREIF Farmland, 1.3% NCREIF Timber, 2.3% CPI = 4%, 1.3% FTSE NAREIT All Equity, 3.7% S&P 500, 3.7% Russell 2000, and 3.7% MSCI EAFE Net 2) Rates listed net of fees

*Values and returns are presented for PERS Retirement Defined Benefit Pension & Health and TRS Retirement Defined Benefit and Health Current Fiscal Year market values and stated returns are unaudited, preliminary, and include some estimates.

Net Assets Managed by $8,155 $8,299 $10,864 $13,703 $18,561 $25,919 $26,208 Treasury Division ARMB Assets Investment Income (Not including ARMB funds) *ARMB Assets (PERS + TRS) include totals for both Defined Benefit and Defined Contribution Plans

COVID-19 Economic Office of Governor Mike Dunleavy v $562.5 million for local communities.

v $300 million to help fund small businesses v $337.5 million for coronavirus-related health care

Your Health & v $50 million for nonprofits to help, among other things, food banks and emergency shelters

Safety is our Governor Dunleavy is focusing on six areas to provide stability

Top Priority. to the economy and ensure Alaskans have the resources needed during this unprecedented time. You can find the plan at:

https://gov.alaska.gov/home/covid-19-economic-plan/

CBR Annual Market Value in Billions

FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 FY '18 FY'19

Constitutional Budget Reserve

$ Billions FY ’19 FY’18 FY’17 FY’16 FY’15 FY’14 FY’13 FY ‘12

Net Assets $66.3 $64.9 $59.8 $52.8 $52.8 $51.2 $44.9 $40.3

Statutory Net Income Interest, Dividends, Real Estate, Other Increase in Market Value of $2.4 $4.1 $5.6 $-0.7 $1.3 $5.8 $3.4 $-1.0 Investments

Total Revenue $3.9 $5.7 $6.7 $0.5 $2.5 $7.0 $4.4 $-0.2

% Return 6.32 10.74 12.89 1.02 4.9 15.5 10.9 0.0

Country Fund Assets $Billions Inception 1 Norway Government Pension Fund – Global $1,186.7 1990 2 China China Investment Corporation $940.6 2007 3 UAE - Abu Dhabi Abu Dhabi Investment Authority $579.6 1976 4 China - Hong Kong Hong Kong Monetary Authority Investment Portfolio $539.9 1993 5 Kuwait Kuwait Investment Authority $533.7 1953 6 Singapore GIC Private Limited $440.0 1981 7 China SAFE Investment Company $417.8 1997 8 Singapore Temasek Holdings $375.4 1974 9 China National Council for Social Security Fund $325.0 2000 10 Saudi Arabia Public Investment Fund $320.0 2008 11 Qatar Qatar Investment Authority $295.2 2005 12 UAE – Dubai Investment Corporation of Dubai $239.4 2006 13 UAE - Abu Dhabi Mubadala Investment Company $232.1 2002 14 Turkey Turkey Wealth Fund $222.2 2016 15 South Korea Korea Investment Corporation $157.3 2005 16 Russia National Welfare Fund $124.1 2008 17 Australia Australian Future Fund $117.5 2006 18 Iran National Development Fund of Iran $91.0 2011 19 Canada Alberta Investment Management Corporation $86.3 2008 20 Kazakhstan Samruk-Kazyna JSC $68.2 2008 21 US - Alaska Alaska Permanent Fund $67.2 1976 22 Kazakhstan Kazakhstan National Fund $61.1 2000 23 Brunei Brunei Investment Agency $60.0 1983 24 Libya Libyan Investment Authority $60.0 2006 25 US – Texas University of Texas Investment Management Company $48.4 1952 26 US – Texas Texas Permanent School Fund $46.5 1854

Source: Sovereign Wealth Fund Institute June, 2019, $ Billions

Net Assets $695.2 $686.5 $639.8 $593.4 $601.9 $585.6 $527.4

Rents and Royalty Income

Investment Income

Net Position (Assets)

Operating Revenue $80.4 $64.3 $59.9 $77.4 $53.1 $64.9 $51.9

Operating Expense $32.9 $39.2 $49.9 $40.2 $27.8 $29.0 $31.2

Net Operating Income $47.5 $25.1 $10.0 $37.2 $25.3 $35.9 $20.7

Transfers to State of Alaska/Other Agencies Non-operating Revenue Change in Net Position $46.3 $13.4 $5.8 $21.2 $28.3 $105.8 $85.5

Net Position $1,571.4 $1,538.7 $1,513.6 $1,499.5 $1,485.5 $1,509.9 $1,525.5

Operating Revenue

Operating Expense Operating Income Change in Net Position Adjusted Change in Net $60.8 $52.0 $39.3 $40.6 $34.6 $25.4 $10.0 Position Dividend to State of AK

Net Position In Billions $1.57

FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 FY '18 FY '19

Net Assets $1,517.5 $1,291.0 $1,297.5 $1,204.9 $1,116.7 $1,038.8 $963.3

Operating Revenue

Operating Expense

Net Income ($90.1) ($94.7) ($89.1) ($98.0) ($106.9) ($114.3) ($118.2)

Net Position $443.0 $1,488.9 $1,461.2 $1,395.2 $1,426.8 $1,406.2 $1,180.9

Operating Revenue

Operating Expense

Operating Loss/Gain

Investment Income Capital Contributions 0 $3.5 $9.1 $9.2 $28.9 $37.0 $25.9 by the State

$ Millions FY ’19 FY ’18 FY ’17 FY ’16 FY ’15 FY ’14

Net Assets $378.3 $356.7 $338.70 $316.33 $320.69 $304.71 Operating Revenue (Trains) Operating Expense (Trains) Operating Income (Trains) Non Operating Income (primarily Real Estate)

Net Revenue (Corporate)

Net Position (Assets) Operating Revenue Operating Expense Net Op Revenue Capital Contributions

Net Capital Assets $1,703.5 $1,730.3 $1,692.5 $1,617.9 $1,544.7 $1,447.3 $1,280.3

Endowment Investments

Land Endowment and other Assets

Endowment Investment Return

Fall Fall Fall Fall Fall Fall Fall Fall 2019/FY20 2018/FY19 2017/FY18 2016/FY17 2015/FY16 2014/FY15 2013/FY14 2012/FY13 Fall Student Headcount 24,943 26,641 27,823 29,171 30,496 31,522 32,696 33,581 (Non-degree) (7,781) (7,754) (7,825) (8,100) (8,454) (8,716) (8,992) (9,564) August Degrees Awarded 4,314 4,554 4,594 4,794 4,678 4,908 4,491 High School/College Concurrent Enrollment 2,444 2,720 2,391 1,877 1,522 1,556 1,413 Headcount Tuition and Fees - UA to Western States 91% 89% 88% 88% 84% 80% 77% 78% Average (4-Year) Total Research October Expenditures ($ $158.0 $150.7 $159.4 $144.2 $133.9 $138.7 $144.2 Millions) Full-Time Regular Employees Headcount (Total Employees)

Download today’s presentation at: commonwealthnorth.org/publications/