Let me start by thanking all of our guests who helped make 2007 a great year. We really do take pride in the fact that 80% of our guests come back year after year, which says a lot for how people feel about our three lodges.

We believe that the key to our success is threefold: we put time and money into the business each year for upgrades and expansions; we purchase new boats and motors at the start of every season; and we provide the best service you could ever imagine. At each lodge, we have a fully staffed with Guest Service personnel who are happy to assist our guests in any way they can.

At Totem Resorts on Lake of the Woods we strive for quality and service, and we believe in a no surprise package. In fact, we want you to leave with the feeling that you received far more than you expected or could ever imagine paying for. We like to provide our guests with lots of little "extras", and it's all worth it when we see the same happy faces year after year. Our goal here has always been to make Totem Resorts exclusive, comfortable and affordable. We have never maintained that we are the "cheapest" lodge around, but we do maintain that we are the absolute best. You do really have to experience it to believe it, and then you too will become one of our happy return guests.

Of course, some other reasons people return to Totem Resorts are the natural beauty of the lake and surrounding wilderness, as well as the fantastic fishing. At Totem Resorts on Lake of the Woods, we believe very strongly in conservation and we feel that this is our "ticket to success" for many years to come. Because we want to protect and preserve our resource, we are offering a 10% discount off our regular rates if you choose to buy a conservation fishing license, and a 15% discount if you choose to fish on a Catch and Release basis and take no fish home (shorelunch fish only). This keeps the fishing great and the guests coming back year after year.

As a father, who took the lodge over from his father 29 years ago, I am extremely proud of the fact that my son Eric Jr. has successfully managed Wiley Point Lodge for 9 years, been General Manager 1 year, and was Vice President of all three Resorts at Totem Lodge, before moving on to his own adventures, while my daughter Stephanie did a tremendous job managing Yellowbird Lodge for her 10th year. This is really a dream come true for me - they both did an unbelievable job. It also makes me proud to know that my 19-year-old son Dustin, who worked at Wiley Point Lodge all summer, is waiting in the wings to take on his own challenges at Totem Resorts in the years ahead.

Thanks again everyone - we look forward to having you join us for another exciting season in the year 2008.

Sincerely,

Eric R. Brown