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Forest Finance: Basic Terms and Concepts

Making Money in the Forest: Practical Applications in Forest Finance

November 10, 1999
November 11-12, 1999

Savannah, Georgia

The University of Georgia
Georgia Center for Continuing Education
Daniel B. Warnell School of Forest Resources

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About the Course

Purpose

Forestry is more than trees and wildlife--it is a business. To be financially successful, the business must base decisions on sound financial analyses and the appropriate evaluation of risk. The basic tools of financial analysis are not new. However, their use in forestry enterprises requires special understanding to avoid misapplication. Computerization of these tools can increase the effectiveness of the analysis or perhaps compound the confusion.

These two courses focus on the proper use of financial techniques for analyzing long-term forestry opportunities. "Forest Finance: Basic Terms and Concepts" provides an introduction for participants who don't have a finance background.

It also can be used as a review if you haven't used financial terms and concepts recently. "Making Money in the Forest: Practical Applications in Forest Finance" will teach you advanced concepts of forest finance and timberland investment.

These courses include lecture sessions, group discussion and problem-solving sessions for hands-on solutions to typical forestry problems.

Registration

See registration panel for course registration fees. Limited seating is available.

Facaculty

Harry Haney is an expert in forest finance, timber income tax, and estate planning and travels throughout the nation teaching continuing education courses in these subjects. Dr. Haney is the Garland Gray Professor of Forestry and Extension Specialist in the College of Natural Resources at Virginia Polytechnic Institute and State University.

Kate Robie is an independent consultant providing forest business and instructional services. Ms. Robie previously served as one of the founders and owners of a timberland investment company, where forest investment analysis and modeling were central to her work. She also serves as an adjunct assistant professor in the University of Georgia Warnell School of Forest Resources.

Continuing Education Credits

Forest Finance: Basic Terms and Concepts qualifies for 6 hours of Category 1 Continuing Forestry Education (CFE) credit as well as 6 hours Continuing Logger Education contact hours. Making Money in the Forest: Practical Applications in Forest Finance qualifies for 12 hours of Category 1 Continuing Forestry Education (CFE) credit as well as 12 hours Continuing Logger Education contact hours. Real Estate appraiser continuing education has been applied for.

Forest Finance: Basic Terms and Concepts
Wendesday, November 10

8:00 a.m. Registration
8:30

Basic Tools of Forest Finance

  • a framework for analyzing long-term investments
  • compound interest concepts and terminology
  • solving investment problems with tables, calculators, or spreadsheets
  • a decision tree for selecting appropriate formulas
12:00 p.m. Lunch
1:30

Financial Decision Criteria

  • compound interest techniques
  • decision rules--net present value (NPV), internal rate of return (IRR), benefit-cost (B/C), equal annual equivalent (EAE), and others
  • estimating cost of capital--interest rates
  • software for solving investment problems in forestry
  • adjustments for investment scope, length, and incompatible data
5:00

Adjourn

5:15-6:15 Professional Ethics in Forestry (optional)

Forest Finance: Basic Terms & Concepts
6.0 CFE hours -- Category 1 and 6 Continuing Logger Education Contact Hours
Full Attendance Mandatory to Receive Credit

 

Making Money in the Forest: Practical Applications in Forest Finance
November 11-12, 1999

All sessions will be held at the Coastal Georgia Center in Savannah, Georgia

Thursday, November 11

8:00 a.m. Registration
8:30

The Importance of Accurate Timber Yield Forecasts

  • PCWTHIN, YIELD PLUS, and GAPPs
  • how investment analysis is affected by yield forecasts

Application of Decision Criteria to Forestry Investment Opportunities

  • calculation of land expectation values including data inputs
  • techniques for valuing land and timber at intermediate ages
  • application of the income approach in appraisals
  • incremental analysis for capital additions to existing projects

Case studies in forestry capital budgeting

  • analyzing a timber property prior to purchase (discounted cash flow or income approach)
  • analyzing the profitability of silvicultural treatments - grass control, pre-commercial thinning, mid-rotation fertilization
12:00 p.m. Lunch
1:30

Income Tax Adjustments

  • selecting before-tax and after-tax analyses
  • after-tax adjustments for cash flows and discount rates
  • calculating after-tax decision criteria and land expectation values
  • case study in after-tax analysis--determine if capital budgeting cases would be different after-tax
5:00 Adjourn
5:15-6:15

Professional Ethics in Forestry (optional)

 

Friday, November 12
8:00 a.m.

Adjustment for Inflation and Real Price Changes

  • measures of inflation
  • timber price series and measures of real price change
  • application of inflation and real price change into the analysis
  • case studies in valuing pine plantations, long-term timber leases, pre-merchantable timber stands and others
10:30

Timberland as an Investment

  • how returns on timberland compare with stocks, bonds and real estate
  • where do timberland's returns come from?
  • other financial traits of timberland investments--cash flow, appreciation, liquidity, risks
  • how timberland affects a portfolio of stocks and bonds

12:00 p.m. Lunch
1:30

Risk Adjustments in Investment Analysis

  • sensitivity analysis and other measures of risk
  • accounting for risk in the analysis
  • case studies for incorporating risk
  • a comprehensive case study--incorporating real world adjustments into an investment decision
4:30 Adjourn

Making Money in the Forest
12.0 CFE hours -- Category 1 and 12 Continuing Logger Education Contact Hours
Full Attendance Mandatory to Receive Credit

 

Professional Ethics In Forestry

This optional one-hour course focuses on case studies to illustrate the place of ethics in the practice of forestry. Class participation is essential in the discussions of these studies. The instructor is Susan A. King, Continuing Forest Resource Education Specialist. This course satisfies the biennial requirement of the Georgia State Board of Registration for Foresters for one hour of continuing education in professional ethics.

 

For Program Information Contact

Susan King
The University of Georgia
Phone: (706) 542-3063
Email: Susan_King@georgiacenter.uga.edu

How to Register for the Conference

You have four registration options:

Forester Finance: Basic Terms & Concepts
1.
Payment for on-line registration must be made by credit card.

Making Money in the Forest: Practical Applications
1.
Payment for on-line registration must be made by credit card.

2. Call either 1-800-884-1381 or (706) 542-2134 to register by telephone. Please mention you saw this web page.

3. Download a registration form and FAX it to the number on the form or mail it to the address below. You need a copy of the free Adobe Acrobat Reader to view and print this application form.

4. Mail the form to:
Forester Finance: Basic Terms & Concepts (#39989)
Making money in the Forest: Practical Applications (#39991)
Attn: Conference Registration, Room 129
Georgia Center for Continuing Education
The University of Georgia
Athens, GA 30602-3603

Payment of Fees

The Georgia Center for Continuing Education accepts payments for registration by cash (on-site), check (payable to the University of Georgia), and credit card (Visa, Mastercard, American Express, and Discover).

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University of Georgia Center for Continuing Education.
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Last revised: Thu, Oct 7, 1999, 9:31:25 AM

URL: http://www.georgiacenter.uga.edu/conferences/1999/Nov/10/forestfinance_makingmoney.phtml