TKC continues to maintain our valuable relationship with JL Properties. Jonathan Rubini and Leonard Hyde are known as some of Alaska's premier real estate developers. Our real estate investments continue to perform well. We currently have $5.8M invested in real estate which is 33% of our overall asset portfolio. Last year we received over $856,228 in revenue distributions from our real estate investments. In addition, we invested in two new investments with JL Properties. Our investment with Elmendorf Military housing Phase II was sold in 2005 and we invested $1.25M in Waste Management Services and $2.9M in an office building located in Salt Lake City, Utah. Both of these investments have already provided $290,000 in distributions and were part of the dividend formula calculation for our upcoming dividend distribution. These investments expect to return no less than 11%.

Stock and Bond Portfolio

Last year our board of directors reviewed our overall portfolio and decided to decrease our stock and bond portfolio down to $7.5M so that we can continue to diversify. We expect to see the portfolio brought down to $7.5M by the end of April. Overall the portfolio performed well in 2005, especially in comparison to other companies' portfolios. We had a 9% gain on the portfolio with a net of almost $1.2M last year.

Moving into the future, our board and management team are analyzing our overall asset allocation mix. This includes all of our investments and allows us to determine the best mix for reaching our vision of becoming a $100M company in shareholder equity by the year 2015. We are excited about the direction we are headed and hope to continue with positive growth of TKC.

Balance Sheet

A summary of the assets, liabilities and shareholder's equity for the years 2004 through 2006 are summed up in the below chart.