Herbert C. Haynes, Inc. - Page 8

                                        - 8 -                                         
          and International Paper Co., and from smaller landowners.  For              
          stumpage permits with major timber landowners, the landowner’s              
          foresters identified the trees to be cut.  For stumpage permits             
          with smaller landowners, petitioner’s foresters identified the              
          trees to be cut.                                                            
               3.   Financing Arrangements                                            
               As another business activity, petitioner entered into                  
          purchase financing arrangements with unrelated entities.  Under             
          these arrangements, petitioner lent the unrelated entity funds to           
          purchase woodland.  The unrelated entity paid interest to                   
          petitioner, gave petitioner a security interest in the land and             
          logs, and sold the logs to petitioner.  Petitioner’s foresters or           
          log buyers surveyed the property and identified and priced the              
          marketable timber.  In some arrangements, petitioner hired                  
          cutting crews.  In other instances, petitioner merely identified            
          and purchased the marketable timber and then sold and delivered             
          it to the mill.                                                             
               4.   Cutting Agreements With Unrelated Landowners                      
               Petitioner also derived revenue from cutting agreements with           
          unrelated landowners.  Under these cutting agreements, a                    
          landowner hired petitioner to cut and transport timber to the               
          mills designated by the landowner.  The landowner paid petitioner           
          a fixed rate per unit delivered.                                            








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011