RITCHIE BROS AUCTIONEERS INC, 10-Q filed on 8/8/2019
Quarterly Report
v3.19.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2019
Aug. 07, 2019
Document And Entity Information [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2019  
Document Transition Report false  
Entity File Number 001-13425  
Entity Registrant Name Ritchie Bros. Auctioneers Inc  
Entity Incorporation, State or Country Code CA  
Entity Tax Identification Number 98-0626225  
Entity Address, Address Line One 9500 Glenlyon Parkway  
Entity Address, Address Line Two Burnaby  
Entity Address, City or Town British Columbia  
Entity Address, Country CA  
Entity Address, Postal Zip Code V5J 0C6  
City Area Code 778  
Local Phone Number 331-5500  
Title of 12(b) Security Common shares  
Trading Symbol RBA  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   107,853,398
Entity Central Index Key 0001046102  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.19.2
Condensed Consolidated Income Statements - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Revenue:        
Total revenue $ 393,222,000 $ 308,530,000 $ 696,651,000 $ 568,708,000
Operating expenses:        
Direct expenses 50,268,000 43,033,000 86,337,000 79,690,000
Selling, general and administrative expenses 97,714,000 101,259,000 192,898,000 198,729,000
Acquisition-related costs 38,000 1,399,000 707,000 3,032,000
Depreciation and amortization expenses 17,112,000 16,537,000 34,227,000 32,728,000
Gain on disposition of property, plant and equipment (101,000) (271,000) (250,000) (616,000)
Foreign exchange (gain) loss 403,000 76,000 881,000 (16,000)
Total operating expenses 315,252,000 243,735,000 585,093,000 471,040,000
Operating income 77,970,000 64,795,000 111,558,000 97,668,000
Interest expense (10,117,000) (10,937,000) (20,933,000) (22,247,000)
Other income, net 1,679,000 900,000 3,718,000 1,813,000
Income before income taxes 69,532,000 54,758,000 94,343,000 77,234,000
Income tax expense 15,401,000 9,031,000 22,040,000 14,300,000
Net income 54,131,000 45,727,000 72,303,000 62,934,000
Net income attributable to:        
Stockholders 54,036,000 45,717,000 72,200,000 62,855,000
Non-controlling interests 95,000 10,000 103,000 79,000
Net income $ 54,131,000 $ 45,727,000 $ 72,303,000 $ 62,934,000
Earnings per share attributable to stockholders:        
Basic $ 0.50 $ 0.42 $ 0.66 $ 0.58
Diluted $ 0.49 $ 0.42 $ 0.66 $ 0.58
Weighted average number of shares outstanding:        
Basic 108,707,708 107,864,030 108,725,871 107,610,679
Diluted 109,942,768 109,019,708 109,982,763 108,832,776
Service Revenues [Member]        
Revenue:        
Total revenue $ 234,606,000 $ 214,346,000 $ 406,978,000 $ 390,362,000
Operating expenses:        
Direct expenses 50,268,000 43,033,000 86,337,000 79,690,000
Inventory Sales Revenue [Member]        
Revenue:        
Total revenue 158,616,000 94,184,000 289,673,000 178,346,000
Operating expenses:        
Direct expenses $ 149,818,000 $ 81,702,000 $ 270,293,000 $ 157,493,000
v3.19.2
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Condensed Consolidated Statements of Comprehensive Income [Abstract]        
Net income $ 54,131 $ 45,727 $ 72,303 $ 62,934
Other comprehensive income (loss), net of income tax:        
Foreign currency translation adjustment 2,457 (12,691) 823 (7,784)
Total comprehensive income 56,588 33,036 73,126 55,150
Total comprehensive income attributable to:        
Stockholders 56,486 33,056 73,028 55,089
Non-controlling interests 102 (20) 98 61
Total comprehensive income $ 56,588 $ 33,036 $ 73,126 $ 55,150
v3.19.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Assets    
Cash and cash equivalents $ 210,429 $ 237,744
Restricted cash 128,565 67,823
Trade and other receivables 338,618 129,257
Inventory 78,829 113,294
Other current assets 64,149 49,055
Income taxes receivable 6,671 6,365
Total current assets 827,261 603,538
Property, plant and equipment 473,036 486,599
Other non-current assets 144,877 29,395
Intangible assets 239,761 245,622
Goodwill 672,505 671,594
Deferred tax assets 17,668 15,648
Total assets 2,375,108 2,052,396
Liabilities and Equity    
Auction proceeds payable 458,116 203,503
Trade and other payables 175,735 201,255
Income taxes payable 5,384 2,312
Short-term debt 8,010 19,896
Current portion of long-term debt 18,235 13,126
Total current liabilities 665,480 440,092
Long-term debt 686,694 698,172
Other non-current liabilities 147,454 41,980
Deferred tax liabilities 38,582 35,519
Total liabilities 1,538,210 1,215,763
Commitments
Contingencies
Contingently redeemable performance share units 1,049 923
Share capital:    
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 108,958,906 (December 31, 2018: 108,682,030) 150,585 181,780
Additional paid-in capital 54,633 56,885
Retained earnings 680,915 648,255
Accumulated other comprehensive loss (55,449) (56,277)
Stockholders' equity 830,684 830,643
Non-controlling interest 5,165 5,067
Total stockholders' equity 835,849 835,710
Total liabilities and equity $ 2,375,108 $ 2,052,396
v3.19.2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 31, 2018
Condensed Consolidated Balance Sheets [Abstract]    
Common stock, no par value $ 0 $ 0
Common stock, Shares Authorized, Unlimited Unlimited Unlimited
Common stock, issued shares 107,836,674 108,682,030
Common stock, outstanding shares 107,836,674 108,682,030
v3.19.2
Condensed Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Common stock [Member]
Additional paid-in capital ("APIC") [Member]
Retained earnings [Member]
Accumulated other comprehensive loss [Member]
Non-controlling interest ("NCI") [Member]
Contingently redeemable non-controlling interest [Member]
Contingently Redeemable Performance Share Units [Member]
Total
Balance at Dec. 31, 2017 $ 138,582 $ 41,005 $ 602,609 $ (42,514) $ 5,069 $ 9,014 $ 744,751
Balance, shares at Dec. 31, 2017 107,269,783            
Net income     62,855   79   62,934
Other comprehensive loss       (7,766) (18)   (7,784)
Comprehensive income     62,855 (7,766) 61   55,150
Stock option exercises $ 23,155 (5,106)         18,049
Stock option exercises, shares 772,599            
Issuance of common stock related to vesting of share units $ 5,161 (1,662)       (6,856) 3,499
Issuance of common stock related to vesting of share units, shares 159,969            
Stock option compensation expense   4,483         4,483
Modification of PSUs   703 (134)     6,132 569
Equity-classified PSU expense   1,885       4,376 1,885
Equity-classified PSU dividend equivalents   102 (324)     222 (222)
Change in fair value of contingently redeemable PSUs     (77)     77 (77)
Cash dividends paid     (36,588)       (36,588)
Balance at Jun. 30, 2018 $ 166,898 41,410 628,341 (50,280) 5,130 12,965 791,499
Balance, shares at Jun. 30, 2018 108,202,351            
Balance at Mar. 31, 2018 $ 144,387 44,327 601,205 (37,619) 5,150 16,576 757,450
Balance, shares at Mar. 31, 2018 107,471,895            
Net income     45,717   10   45,727
Other comprehensive loss       (12,661) (30)   (12,691)
Comprehensive income     45,717 (12,661) (20)   33,036
Stock option exercises $ 17,350 (3,614)         13,736
Stock option exercises, shares 570,487            
Issuance of common stock related to vesting of share units $ 5,161 (1,662)       6,856 3,499
Issuance of common stock related to vesting of share units, shares 159,969            
Stock option compensation expense   2,140         2,140
Equity-classified PSU expense   207       3,019 207
Equity-classified PSU dividend equivalents   12 (124)     112 (112)
Change in fair value of contingently redeemable PSUs     (114)     114 (114)
Cash dividends paid     (18,343)       (18,343)
Balance at Jun. 30, 2018 $ 166,898 41,410 628,341 (50,280) 5,130 12,965 791,499
Balance, shares at Jun. 30, 2018 108,202,351            
Balance at Dec. 31, 2018 $ 181,780 56,885 648,255 (56,277) 5,067 923 835,710
Balance, shares at Dec. 31, 2018 108,682,030            
Net income     72,200   103   72,303
Other comprehensive loss       828 (5)   823
Comprehensive income     72,200 828 98   73,126
Stock option exercises $ 5,668 (1,544)         $ 4,124
Stock option exercises, shares 181,359           181,359
Issuance of common stock related to vesting of share units $ 5,149 (10,064)         $ (4,915)
Issuance of common stock related to vesting of share units, shares 196,959            
Stock option compensation expense   3,199         3,199
Equity-classified PSU expense   5,810       93 5,810
Equity-classified PSU dividend equivalents   347 (380)     33 (33)
Cash dividends paid     (39,160)       (39,160)
Shares repurchased $ (42,012)           (42,012)
Shares repurchased, shares (1,223,674)            
Balance at Jun. 30, 2019 $ 150,585 54,633 680,915 (55,449) 5,165 1,049 835,849
Balance, shares at Jun. 30, 2019 107,836,674            
Balance at Mar. 31, 2019 $ 189,297 50,054 646,614 (57,899) 5,063 984 833,129
Balance, shares at Mar. 31, 2019 108,958,906            
Net income     54,036   95   54,131
Other comprehensive loss       2,450 7   2,457
Comprehensive income     54,036 2,450 102   56,588
Stock option exercises $ 3,190 (694)         2,496
Stock option exercises, shares 98,433            
Issuance of common stock related to vesting of share units $ 110           110
Issuance of common stock related to vesting of share units, shares 3,009            
Stock option compensation expense   1,660         1,660
Equity-classified PSU expense   3,488       47 3,488
Equity-classified PSU dividend equivalents   125 (143)     18 (18)
Cash dividends paid     (19,592)       (19,592)
Shares repurchased $ (42,012)           (42,012)
Shares repurchased, shares (1,223,674)            
Balance at Jun. 30, 2019 $ 150,585 $ 54,633 $ 680,915 $ (55,449) $ 5,165 $ 1,049 $ 835,849
Balance, shares at Jun. 30, 2019 107,836,674            
v3.19.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Operating activities:    
Net income $ 72,303 $ 62,934
Adjustments for items not affecting cash:    
Depreciation and amortization expenses 34,227 32,728
Stock option compensation expense 3,199 4,483
Equity-classified PSU expense 5,903 6,261
Deferred income tax expense 1,056 922
Unrealized foreign exchange (gain) loss (51) 92
Gain on disposition of property, plant and equipment (250) (616)
Amortization of debt issuance costs 1,765 2,073
Other, net 6,167 (4,263)
Net changes in operating assets and liabilities 36,036 3,244
Net cash provided by operating activities 160,355 107,858
Investing activities:    
Property, plant and equipment additions (4,618) (5,802)
Intangible asset additions (12,175) (12,273)
Proceeds on disposition of property, plant and equipment 583 1,633
Other, net (1,000) (4,674)
Net cash used in investing activities (17,210) (21,116)
Financing activities:    
Share repurchase (42,012)  
Dividends paid to stockholders (39,160) (36,588)
Issuances of share capital 4,124 18,049
Payment of withholding taxes on issuance of shares (4,915) (3,357)
Proceeds from short-term debt 12,879 308
Repayment of short-term debt (24,985) (3,372)
Repayment of long-term debt (14,514) (56,555)
Repayment of finance lease obligations (2,937) (1,774)
Other, net   (1,176)
Net cash used in financing activities (111,520) (84,465)
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash 1,802 (4,113)
Increase (decrease) 33,427 (1,836)
Beginning of period 305,567 331,116
Cash, cash equivalents, and restricted cash, end of period $ 338,994 $ 329,280
v3.19.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2019
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

1.    Summary of significant accounting policies

Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”) provide global asset management and disposition services, offering customers end-to-end solutions for buying and selling used industrial equipment and other durable assets through its unreserved live on site auctions, online marketplaces, listing services, and private brokerage services. Ritchie Bros. Auctioneers Incorporated is a company incorporated in Canada under the Canada Business Corporations Act, whose shares are publicly traded on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”).

(a) Basis of preparation

These unaudited condensed consolidated interim financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated.

Certain information and footnote disclosure required by US GAAP for complete annual financial statements have been omitted and, therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

(b) Revenue recognition

Revenues are comprised of:

Service revenue, including the following:
i.Revenue from auction and marketplace (“A&M”) activities, including commissions earned at our live auctions, online marketplaces, and private brokerage services where we act as an agent for consignors of equipment and other assets, and various auction-related fees, including listing and buyer transaction fees; and
ii.Other services revenue, including revenue from listing services, refurbishment, logistical services, financing, appraisal fees and other ancillary service fees; and
Inventory sales revenue as part of A&M activities

The Company recognizes revenue when control of the promised goods or services is transferred to our customers, or upon completion of the performance obligation, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For live event-based auctions or online auctions, revenue is recognized when the auction sale is complete and the Company has determined that the sale proceeds are collectible. Revenue is measured at the fair value of the consideration received or receivable and is shown net of value-added tax and duties.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

Service revenue

Commissions from sales at the Company’s auctions represent the percentage earned by the Company on the gross proceeds from equipment and other assets sold at auction. The majority of the Company’s commissions are earned as a pre-negotiated fixed rate of the gross selling price. Other commissions from sales at the Company’s auctions are earned from underwritten commission contracts, when the Company guarantees a certain level of proceeds to a consignor.

The Company accepts equipment and other assets on consignment stimulating buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process. Prior to offering an item for sale on its online marketplaces, the Company also performs inspections.

Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, collects payment from the buyer, and remits the proceeds to the seller, net of the seller commissions, applicable taxes, and applicable fees. Commissions are calculated as a percentage of the hammer price of the property sold at auction. Fees are also charged to sellers for listing and inspecting equipment. Other revenue earned in the process of conducting the Company’s auctions include administrative, documentation, and advertising fees.

On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased and the seller is legally obligated to relinquish the property in exchange for the hammer price less any seller’s commissions. Commission and fee revenue are recognized on the date of the auction sale upon the fall of the auctioneer’s hammer.

Under the standard terms and conditions of its auction sales, the Company is not obligated to pay a consignor for property that has not been paid for by the buyer, provided the property has not been released to the buyer. If the buyer defaults on its payment obligation, also referred to as a collapsed sale, the sale is cancelled in the period in which the determination is made, and the property is returned to the consignor or placed in a later event-based or online auction. Historically cancelled sales have not been material.

Online marketplace commission revenue is reduced by a provision for disputes, which is an estimate of disputed items that are expected to be settled at a cost to the Company, related to settlements of discrepancies under the Company’s equipment condition certification program. The equipment condition certification refers to a written inspection report provided to potential buyers that reflects the condition of a specific piece of equipment offered for sale, and includes ratings, comments, and photographs of the equipment following inspection by one of the Company’s equipment inspectors.

The equipment condition certification provides that a buyer may file a written dispute claim during an eligible dispute period for consideration and resolution at the sole determination of the Company if the purchased equipment is not substantially in the condition represented in the inspection report. Typically disputes under the equipment condition certification program are settled with minor repairs or additional services, such as washing or detailing the item; the estimated costs of such items or services are included in the provision for disputes.

Commission revenue are recorded net of commissions owed to third parties, which are principally the result of situations when the commission is shared with a consignor in an auction guarantee risk and reward sharing arrangement.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

Service revenue (continued)

Underwritten commission contracts can take the form of guarantee contracts. Guarantee contracts typically include a pre-negotiated percentage of the guaranteed gross proceeds plus a percentage of proceeds in excess of the guaranteed amount. If actual auction proceeds are less than the guaranteed amount, commission is reduced; if proceeds are sufficiently lower, the Company can incur a loss on the sale. Losses, if any, resulting from guarantee contracts are recorded in the period in which the relevant auction is completed. If a loss relating to a guarantee contract held at the period end to be sold after the period end is known or is probable and estimable at the financial statement reporting date, the loss is accrued in the financial statements for that period. The Company’s exposure from these guarantee contracts fluctuates over time.

Other services revenue also includes fees for refurbishment, logistical services, financing, appraisal fees and other ancillary service fees. Fees are recognized in the period in which the service is provided to the customer.

Inventory sales revenue

Underwritten commission contracts can take the form of inventory contracts. Revenue related to inventory contracts is recognized in the period in which the sale is completed, title to the property passes to the purchaser and the Company has fulfilled any other obligations that may be relevant to the transaction. In its role as auctioneer, the Company auctions its inventory to equipment buyers through the auction process. Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and, if applicable, the buyer transaction fee, and collects payment from the buyer.

On the fall of the auctioneer’s hammer, the highest bidder becomes legally obligated to pay the full purchase price, which is the hammer price of the property purchased. Title to the property is transferred in exchange for the hammer price, and if applicable, the buyer transaction fee plus applicable taxes.

(c) Costs of services

Costs of services are comprised of expenses incurred in direct relation to conducting auctions (“direct expenses”), earning online marketplace revenue, and earning other fee revenue. Direct expenses include direct labour, buildings and facilities charges, travel, advertising and promotion costs and fees paid to unrelated third parties who introduce the Company to equipment sellers who sell property at the Company’s auctions and marketplaces.

Costs of services incurred to earn online marketplace revenue in addition to the costs listed above also include inspection costs. Inspections are generally performed at the seller’s physical location. The cost of inspections includes payroll costs and related benefits for the Company’s employees that perform and manage field inspection services, the related inspection report preparation and quality assurance costs, fees paid to contractors who perform field inspections, related travel and incidental costs for the Company’s inspection service organization, and office and occupancy costs for its inspection services personnel. Costs of earning online marketplace revenue also include costs for the Company’s customer support, online marketplace operations, logistics, title and lien investigation functions.

Costs of services incurred in earning other fee revenue include ancillary and logistical service expenses, direct labour (including commissions on sales), software maintenance fees, and materials. Costs of services exclude depreciation and amortization expenses.

1.    Summary of significant accounting policies (continued)

(d) Cost of inventory sold

Cost of inventory sold includes the purchase price of assets sold for the Company’s own account and is determined using a specific identification basis.

(e) Share-based payments

The Company classifies a share-based payment award as an equity or liability payment based on the substantive terms of the award and any related arrangement.

Equity-classified share-based payments

Share unit plans

The Company has a senior executive performance share unit (“PSU”) plan and an employee PSU plan that provides for the award of PSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle them in shares. The cost of PSUs granted is measured at the fair value of the underlying PSUs at the grant date. PSUs vest based on the passage of time and achievement of performance criteria.

The Company also has a senior executive restricted share unit (“RSU”) plan and an employee RSU plan that provides for the award of RSUs to certain senior executives and employees, respectively, of the Company. The Company has the option to settle certain share unit awards in cash or shares and expects to settle all grants on and after 2017 in shares. The cost of RSUs granted is measured at the fair value based on the fair value of the Company’s common shares at the grant date. RSUs vest based on the passage of time and include restrictions related to employment.

This fair value of awards expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in earnings, such that the consolidated expense reflects the revised estimate, with a corresponding adjustment to equity. Dividend equivalents on the equity-classified PSUs and RSUs are recognized as a reduction to retained earnings over the service period.

Stock option plans

The Company has three stock option compensation plans that provide for the award of stock options to selected employees, directors and officers of the Company. The cost of options granted is measured at the fair value of the underlying option at the grant date using the Black-Scholes option pricing model. The fair value of options expected to vest under these plans is expensed over the respective remaining service period of the individual awards, on an accelerated recognition basis, with the corresponding increase to APIC recorded in equity. Upon exercise, any consideration paid on exercise of the stock options and amounts fully amortized in APIC are credited to the common shares.

1.    Summary of significant accounting policies (continued)

(e) Share-based payments (continued)

Liability-classified share-based payments

The Company maintains other share unit compensation plans that vest over a period of up to three years after grant. Under those plans, the Company is either required or expects to settle vested awards on a cash basis or by providing cash to acquire shares on the open market on the employee’s behalf, where the settlement amount is determined based on the average price of the Company’s common shares prior to the vesting date or, in the case of deferred share unit (“DSU”) recipients, following cessation of service on the Board of Directors.

These awards are classified as liability awards, measured at fair value at the date of grant and re-measured at fair value at each reporting date up to and including the settlement date. The determination of the fair value of the share units under these plans is described in note 16. The fair value of the awards is expensed over the respective vesting period of the individual awards with recognition of a corresponding liability. Changes in fair value after vesting are recognized through compensation expense. Compensation expense reflects estimates of the number of instruments expected to vest.

The impact of forfeitures and fair value revisions, if any, are recognized in earnings such that the cumulative expense reflects the revisions, with a corresponding adjustment to the settlement liability. Liability-classified share unit liabilities due within 12 months of the reporting date are presented in trade and other payables while settlements due beyond 12 months of the reporting date are presented in other non-current liabilities.

(f) Leases

The Company determines if an arrangement is a lease at inception. The Company may have lease agreements with lease and non-lease components, which are generally accounted for separately. Additionally, for certain vehicle and equipment leases, management applies a portfolio approach to account for the right-of-use (“ROU”) assets and liabilities for assets leased with similar lease terms.

Operating leases

Operating leases are included in other non-current assets, trade and other payables, and other non-current liabilities in our consolidated balance sheets if the initial lease term is greater than 12 months. For leases with an initial term of 12 months or less the Company recognizes those lease payments on a straight-line basis over the lease term.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Lease expense for lease payments is recognized on a straight-line basis over the lease term and are included in Costs of services or Selling, general, and administrative (“SG&A”) expenses.

1.    Summary of significant accounting policies (continued)

(f) Leases (continued)

Finance leases

Finance lease ROU assets are included in property, plant and equipment, trade and other payables, and other non-current liabilities in our consolidated balance sheets.

Finance lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Management uses the implicit rate when readily determinable. The Company includes lease payments for renewal, purchase options, or termination options in its determination of lease term, ROU asset, and lease liability when it is reasonably certain that the Company will exercise these options. Finance lease ROU assets are generally amortized over the lease term and are included in depreciation expense. The interest on the finance lease liabilities is included in interest expense.

(g) Inventories

Inventory consists of equipment and other assets purchased for resale in an upcoming live on site auction or online marketplace event. The Company typically purchases inventory for resale through a competitive process where the consignor or vendor has determined this to be the preferred method of disposition through the auction process. In addition, certain jurisdictions require auctioneers to hold title to assets and facilitate title transfer on sale. Inventory is valued at the lower of cost and net realizable value where net realizable value represents the expected sale price upon disposition less make-ready costs and the costs of disposal and transportation. As part of its government business, the Company purchases inventory for resale as part of its commitment to purchase certain surplus government property (note 18). The significant elements of cost include the acquisition price of the inventory and make-ready costs to prepare the inventory for sale that are not selling expenses and in-bound transportation costs. Write-downs to the carrying value of inventory are recorded in cost of inventory sold on the consolidated income statement.

(h) Impairment of long-lived and indefinite-lived assets

Long-lived assets, comprised of property, plant and equipment and intangible assets subject to amortization, are assessed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. For the purpose of impairment testing, long-lived assets are grouped and tested for recoverability at the lowest level that generates independent cash flows. An impairment loss is recognized when the carrying value of the assets or asset groups is greater than the future projected undiscounted cash flows. The impairment loss is calculated as the excess of the carrying value over the fair value of the asset or asset group. Fair value is based on valuation techniques or third party appraisals. Significant estimates and judgments are applied in determining these cash flows and fair values.

Indefinite-lived intangible assets are tested annually for impairment as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the indefinite-lived intangible asset is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the carrying amount is less than its fair value, a quantitative impairment test is not required. Where a quantitative impairment test is required, the procedure is to compare the indefinite-lived intangible asset’s fair value with its carrying amount. An impairment loss is recognized as the difference between the indefinite-lived intangible asset’s carrying amount and its fair value.

1.    Summary of significant accounting policies (continued)

(i) Goodwill

Goodwill represents the excess of the purchase price of an acquired enterprise over the fair value assigned to the assets acquired and liabilities assumed in a business combination.

Goodwill is not amortized, but it is tested annually for impairment at the reporting unit level as of December 31, and between annual tests if indicators of potential impairment exist. The Company has the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. This involves an assessment of qualitative factors to determine the existence of events or circumstances that would indicate whether it is more likely than not that the carrying amount of the reporting unit to which goodwill belongs is less than its fair value. If the qualitative assessment indicates it is not more likely than not that the reporting unit’s carrying amount is less than its fair value, a quantitative impairment test is not required.

If a quantitative impairment test is required, the procedure is to identify potential impairment by comparing the reporting unit’s fair value with its carrying amount, including goodwill. The reporting unit’s fair value is determined using various valuation approaches and techniques that involve assumptions based on what the Company believes a hypothetical marketplace participant would use in estimating fair value on the measurement date. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value. If the difference between the reporting unit’s carrying amount and fair value is greater than the amount of goodwill allocated to the reporting unit, the impairment loss is restricted by the amount of the goodwill allocated to the reporting unit.

(j) New and amended accounting standards

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). The Company adopted the new standard utilizing the “optional transition method”, which permits the Company to apply the new lease standard at the adoption date. As the optional transition method is being utilized, the Company’s reporting for the comparative periods presented in the financial statements in which it adopts Topic 842 will continue to be reported pursuant to Topic 840.

On adoption, the Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allows the Company to carryforward the historical lease classification. In addition, the Company elected to utilize the hindsight practical expedient to determine the reasonably certain lease term for existing leases. While lease classification will remain unchanged, hindsight will result in generally longer accounting lease terms where the Company has determined that it is reasonably certain to exercise certain renewal options and thereby increasing the useful lives of the corresponding leasehold improvements. The Company also elected not to recognize the lease assets and liabilities for leases with an initial term of 12 months or less and will recognize those lease payments on a straight-line basis over the lease term.

On adoption of the new standard the Company recognized ROU assets of $103,897,000 with a corresponding increase in operating lease liability. Offsetting the increase in ROU assets recognized was the reclassification of prepaid rent and deferred rent liabilities to ROU assets of $5,752,000. There was no impact on retained earnings or cash flows.

The adoption of the standard had no impact on our debt-covenant compliance under our current agreements.

1.    Summary of significant accounting policies (continued)

(k) Recent accounting standards not yet adopted

(i)In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which replaces the ‘incurred loss methodology’ credit impairment model with a new forward-looking “methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.” ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is only permitted for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.
(ii)In April 2019, the FASB issued ASU 2019-04, Codification Improvement to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments to Topic 326 in this update clarify or address stakeholders’ specific issues about certain aspects of the amendments in update 2016-13. The Company is evaluating this new guidance to determine the impact that it will have on its consolidated financial statements.
v3.19.2
Significant Judgments, Estimates and Assumptions
6 Months Ended
Jun. 30, 2019
Significant Judgments, Estimates and Assumptions [Abstract]  
Significant Judgments, Estimates and Assumptions

2.    Significant judgments, estimates and assumptions

The preparation of financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Future differences arising between actual results and the judgments, estimates and assumptions made by the Company at the reporting date, or future changes to estimates and assumptions, could necessitate adjustments to the underlying reported amounts of assets, liabilities, revenues and expenses in future reporting periods.

Judgments, estimates and underlying assumptions are evaluated on an ongoing basis by management, and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances and such changes are reflected in the assumptions when they occur. Significant items subject to estimates include purchase price allocations, the carrying amounts of goodwill, the useful lives of long-lived assets, share based compensation, the determination of lease term and lease liabilities, deferred income taxes, reserves for tax uncertainties, and other contingencies.

v3.19.2
Seasonality
6 Months Ended
Jun. 30, 2019
Seasonality [Abstract]  
Seasonality

3.    Seasonality

The Company’s operations are both seasonal and event driven. Revenues tend to be the highest during the second and fourth calendar quarters. The Company generally conducts more live, on site auctions during these quarters than during the first and third calendar quarters. Late December through mid-February and mid-July through August are traditionally less active periods. Online volumes are similarly affected as supply of used equipment is lower in the third quarter as it is actively being used and not available for sale.

v3.19.2
Segmented Information
6 Months Ended
Jun. 30, 2019
Segmented Information [Abstract]  
Segmented Information

4.    Segmented information

The Company’s principal business activity is the management and disposition of used industrial equipment and other durable assets. The Company’s operations are comprised of one reportable segment and other business activities that are not reportable as follows:

Auctions and Marketplaces – This is the Company’s only reportable segment, which consists of the Company’s live on site auctions, its online auctions and marketplaces, and its brokerage service;
Other includes the results of Ritchie Bros. Financial Services (“RBFS”), Mascus online services, and the results from various value-added services and make-ready activities, including the Company’s equipment refurbishment services, asset appraisal services, and Ritchie Bros. Logistical Services.

Three months ended June 30, 2019

Six months ended June 30, 2019

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

201,050

$

33,556

$

234,606

$

344,487

$

62,491

$

406,978

Inventory sales revenue

 

158,616

 

 

158,616

 

289,673

 

 

289,673

Total revenue

$

359,666

$

33,556

$

393,222

$

634,160

$

62,491

$

696,651

Costs of services

 

32,551

 

17,717

 

50,268

 

53,368

 

32,969

 

86,337

Cost of inventory sold

 

149,818

 

 

149,818

 

270,293

 

 

270,293

SG&A expenses

 

91,466

 

6,248

 

97,714

 

180,648

 

12,250

 

192,898

Segment profit

$

85,831

$

9,591

$

95,422

$

129,851

$

17,272

$

147,123

Acquisition-related costs

 

  

 

  

 

38

 

  

 

  

 

707

Depreciation and amortization expenses ("D&A")

 

  

 

  

 

17,112

 

  

 

  

 

34,227

Gain on disposition of property, plant and equipment ("PPE")

 

  

 

  

 

(101)

 

  

 

  

 

(250)

Foreign exchange loss

 

  

 

  

 

403

 

  

 

  

 

881

Operating income

 

  

 

  

$

77,970

 

  

 

  

$

111,558

Interest expense

 

  

 

  

 

(10,117)

 

  

 

  

 

(20,933)

Other income, net

 

  

 

  

 

1,679

 

  

 

  

 

3,718

Income tax expense

 

  

 

  

 

(15,401)

 

  

 

  

 

(22,040)

Net income

 

  

 

  

$

54,131

 

  

 

  

$

72,303

4.    Segmented information (continued)

Three months ended June 30, 2018

Six months ended June 30, 2018

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

180,067

$

34,279

$

214,346

$

328,472

$

61,890

$

390,362

Inventory sales revenue

 

94,184

 

 

94,184

 

178,346

 

 

178,346

Total revenue

274,251

 

34,279

 

308,530

$

506,818

$

61,890

 

568,708

Costs of services

 

21,381

 

21,652

 

43,033

 

42,829

 

36,861

 

79,690

Cost of inventory sold

 

81,702

 

 

81,702

 

157,493

 

 

157,493

SG&A expenses

 

95,959

 

5,300

 

101,259

 

188,961

 

9,768

 

198,729

Segment profit

$

75,209

 

7,327

 

82,536

$

117,535

$

15,261

$

132,796

Acquisition-related costs

 

  

 

  

 

1,399

 

  

 

  

 

3,032

D&A expenses

 

  

 

  

 

16,537

 

  

 

  

 

32,728

Gain on disposition of PPE

 

  

 

  

 

(271)

 

  

 

  

 

(616)

Foreign exchange (gain) loss

 

  

 

  

 

76

 

  

 

  

 

(16)

Operating income

 

  

 

  

$

64,795

 

  

 

  

$

97,668

Interest expense

 

  

 

  

 

(10,937)

 

  

 

  

 

(22,247)

Other income, net

 

  

 

  

 

900

 

  

 

  

 

1,813

Income tax expense

 

  

 

  

 

(9,031)

 

  

 

  

 

(14,300)

Net income

 

  

 

  

$

45,727

 

  

 

  

$

62,934

The Company’s geographic breakdown of total revenue as determined by the revenue and location of assets, which represents property, plant and equipment is as follows:

United 

  

States

Canada

Europe

Other

Consolidated

Total revenue for the three months ended:

    

  

    

  

    

  

    

  

    

  

June 30, 2019

$

212,233

$

90,410

$

47,283

$

43,296

$

393,222

June 30, 2018

142,931

 

82,776

 

44,826

 

37,997

 

308,530

Total revenue for the six months ended:

 

  

 

  

 

  

 

  

 

  

June 30, 2019

 

395,806

 

121,940

 

102,068

 

76,837

 

696,651

June 30, 2018

 

278,499

 

148,585

 

79,398

 

62,226

 

568,708

v3.19.2
Revenues
6 Months Ended
Jun. 30, 2019
Revenues [Abstract]  
Revenues

5.    Revenue

The Company’s revenue from the rendering of services is as follows:

Three months ended

Six months ended

June 30, 

June 30, 

2019

2018

2019

2018

Service revenue:

    

  

    

  

    

  

    

  

Commissions

$

134,466

$

124,697

$

226,746

$

225,991

Fees

 

100,140

 

89,649

 

180,232

 

164,371

 

234,606

 

214,346

 

406,978

 

390,362

Inventory sales revenue

 

158,616

 

94,184

 

289,673

 

178,346

$

393,222

$

308,530

$

696,651

$

568,708

v3.19.2
Operating Expenses
6 Months Ended
Jun. 30, 2019
Operating Expenses [Abstract]  
Operating Expenses

6.    Operating expenses

Costs of services

Three months ended

Six months ended

June 30, 

June 30, 

    

2019

    

2018

    

2019

    

2018

Ancillary and logistical service expenses

$

16,472

  

$

19,980

$

30,231

  

$

34,560

Employee compensation expenses

14,906

 

10,931

25,713

 

19,950

Buildings, facilities and technology expenses

2,172

 

2,663

4,306

 

5,290

Travel, advertising and promotion expenses

12,807

 

7,806

18,675

 

14,614

Other costs of services

3,911

 

1,653

7,412

 

5,276

$

50,268

$

43,033

$

86,337

$

79,690

SG&A expenses

Three months ended

Six months ended

 

June 30, 

 

June 30, 

    

2019

    

2018

    

2019

    

2018

Employee compensation expenses

$

63,889

 

66,699

$

125,353

$

129,992

Buildings, facilities and technology expenses

 

14,582

 

15,436

 

30,497

 

30,709

Travel, advertising and promotion expenses

 

9,225

 

8,800

 

18,367

 

18,519

Professional fees

 

4,155

 

5,388

 

8,230

 

9,655

Other SG&A expenses

 

5,863

 

4,936

 

10,451

 

9,854

$

97,714

 

$

101,259

$

192,898

$

198,729

Acquisition-related costs

Acquisition-related costs consist of operating expenses directly incurred as part of a business combination, due diligence and integration planning related to the IronPlanet acquisition, and continuing employment costs that are recognized separately from our business combinations.

Three months ended

Six months ended

June 30, 

June 30, 

    

2019

    

2018

    

2019

    

2018

IronPlanet:

  

 

  

  

 

  

Other acquisition-related costs

$

  

$

456

  

$

82

  

$

1,095

Other acquisitions:

  

 

  

  

 

  

Continuing employment costs

 

885

  

87

 

  

1,853

Other acquisition-related costs

38

 

58

  

538

 

  

84

$

38

$

1,399

$

707

 

$

3,032

Depreciation and amortization expenses

Three months ended

Six months ended

    

June 30, 

    

June 30, 

    

2019

    

2018

    

2019

    

2018

Depreciation expense

$

7,157

$

7,292

$

14,325

$

14,208

Amortization expense

 

9,955

 

9,245

 

19,902

 

18,520

$

17,112

$

16,537

$

34,227

$

32,728

v3.19.2
Income Taxes
6 Months Ended
Jun. 30, 2019
Income Taxes [Abstract]  
Income Taxes

7.    Income taxes

At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. The estimate reflects, among other items, management’s best estimate of operating results. It does not include the estimated impact of foreign exchange rates or unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes.

For the three months ended June 30, 2019, income tax expense was $15,401,000, compared to an income tax expense of $9,031,000 for the same period in 2018. The effective tax rate was 22% in the second quarter of 2019, compared to 16% in the second quarter of 2018. The effective tax rate increased in the second quarter of 2019 compared to the second quarter of 2018 primarily due to impacts of the U.S. tax reform and a greater proportion of annual income subject to tax in jurisdictions with higher tax rates.

For the six months ended June 30, 2019, income tax expense was $22,040,000, compared to an income tax expense of $14,300,000 for the same period in 2018. The effective tax rate was 23% for the six months ended June 30, 2019, compared to 19% for the six months ended June 30, 2018. The effective tax rate increased in the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to impacts of the U.S. tax reform and a greater proportion of annual income subject to tax in jurisdictions with higher tax rates.

The Tax Cuts and Jobs Act, or TCJA, was enacted on December 22, 2017. It is possible that additional legislation, regulations and/or guidance may be issued, and possibly with retroactive effect, in the future that may result in additional adjustments to the tax expense recorded related to the TCJA.

v3.19.2
Earnings Per Share Attributable to Stockholders
6 Months Ended
Jun. 30, 2019
Earnings Per Share Attributable to Stockholders [Abstract]  
Earnings Per Share Attributable to Stockholders

8.    Earnings per share attributable to stockholders

Basic earnings per share (“EPS”) attributable to stockholders was calculated by dividing the net income attributable to stockholders by the weighted average (“WA”) number of common shares outstanding during the period. Diluted EPS attributable to stockholders was calculated by dividing the net income attributable to stockholders by the WA number of shares of common stock outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include unvested PSUs, RSUs, and outstanding stock options. The dilutive effect of potentially dilutive securities is reflected in diluted EPS by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.

Three months ended

Six months ended

June 30, 2019

June 30, 2019

Net income to

WA

Per

Net income

WA

Per

 

attributable

 

number

 

share

 

attributable to

 

number

 

share

    

stockholders

    

of shares

    

amount

    

stockholders

    

of shares

    

amount

Basic

$

54,036

 

108,707,708

$

0.50

$

72,200

 

108,725,871

$

0.66

Effect of dilutive securities:

 

  

 

  

 

  

 

  

 

  

 

  

Share units

 

 

442,601

 

 

 

464,613

 

Stock options

 

 

792,459

 

(0.01)

 

 

792,279

 

Diluted

$

54,036

 

109,942,768

$

0.49

$

72,200

 

109,982,763

$

0.66

8.    Earnings per share attributable to stockholders (continued)

Three months ended

    

Six months ended

June 30, 2018

June 30, 2018

Net income

WA

Per

Net income

WA

Per

 

attributable to

 

number

 

share

 

attributable to

 

number

 

share

    

stockholders

    

of shares

    

amount

    

stockholders

    

of shares

    

amount

Basic

$

45,717

 

107,864,030

$

0.42

$

62,855

 

107,610,679

$

0.58

Effect of dilutive securities:

 

  

 

  

 

  

 

  

 

  

 

  

Share units

 

 

314,618

 

 

 

336,353

 

Stock options

 

 

841,060

 

 

 

885,744

 

Diluted

$

45,717

 

109,019,708

$

0.42

$

62,855

 

108,832,776

$

0.58

v3.19.2
Supplemental Cash Flow Information
6 Months Ended
Jun. 30, 2019
Supplemental Cash Flow Information [Abstract]  
Supplemental Cash Flow Information

9.    Supplemental cash flow information

Six months ended June 30,

    

2019

    

2018

Trade and other receivables

$

(208,486)

$

(100,339)

Inventory

 

33,584

 

(27,801)

Advances against auction contracts

 

188

 

261

Prepaid expenses and deposits

 

739

 

(2,547)

Income taxes receivable

 

(306)

 

6,430

Auction proceeds payable

 

252,765

 

129,008

Trade and other payables

 

(40,263)

 

(11,910)

Income taxes payable

 

3,341

 

6,585

Share unit liabilities

 

 

1,216

Other

 

(5,526)

 

2,341

Net changes in operating assets and liabilities

$

36,036

$

3,244

Six months ended June 30, 

    

2019

    

2018

Interest paid, net of interest capitalized

$

19,024

$

20,058

Interest received

 

1,918

 

1,229

Net income taxes paid

 

18,455

 

3,547

Non-cash purchase of property, plant and equipment under capital lease

$

8,335

$

3,012

June 30, 

December 31, 

    

2019

    

2018

Cash and cash equivalents

$

210,429

$

237,744

Restricted cash

 

128,565

67,823

Cash, cash equivalents, and restricted cash

$

338,994

$

305,567

v3.19.2
Fair Value Measurement
6 Months Ended
Jun. 30, 2019
Fair Value Measurement [Abstract]  
Fair Value Measurement

10.    Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement or disclosure:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at measurement date;
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3: Unobservable inputs for the asset or liability.

  

June 30, 2019

December 31, 2018

Carrying

Carrying

    

Category

    

amount

    

Fair value

    

amount

    

Fair value

Fair values disclosed:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents

 

Level 1

$

210,429

$

210,429

$

237,744

$

237,744

Restricted cash

 

Level 1

 

128,565

 

128,565

 

67,823

 

67,823

Short-term debt

 

Level 2

 

8,010

 

8,010

 

19,896

 

19,896

Long-term debt

 

  

 

  

 

  

 

  

 

  

Senior unsecured notes

 

Level 1

 

490,027

 

516,888

 

489,136

 

487,813

Term loans

 

Level 2

 

214,902

 

216,802

 

222,162

 

224,582

The carrying value of the Company’s cash and cash equivalents, restricted cash, trade and other receivables, advances against auction contracts, auction proceeds payable, trade and other payables, and short term debt approximate their fair values due to their short terms to maturity. The carrying value of the term loans, before deduction of deferred debt issue costs, approximates their fair value as the interest rates on the loans were short-term in nature. The fair value of the senior unsecured notes is determined by reference to a quoted market price.

v3.19.2
Other Current Assets
6 Months Ended
Jun. 30, 2019
Other Current Assets [Abstract]  
Other Current Assets

11.    Other current assets

June 30, 

December 31, 

    

2019

    

2018

Advances against auction contracts

$

15,364

$

15,558

Assets held for sale

 

30,983

 

15,051

Prepaid expenses and deposits

 

17,802

 

18,446

$

64,149

$

49,055

Assets held for sale

Balance, December 31, 2018

$

15,051

Reclassified from (to) property, plant and equipment

 

15,932

Balance, June 30, 2019

$

30,983

As at June 30, 2019, the Company’s assets held for sale consisted of four excess properties located in the United States. Management made the strategic decision to sell these properties to maximize the Company’s return on invested capital. The estimated sales proceeds are expected to be in excess of the current book value. The properties have been actively marketed for sale, and management expects the sales to be completed within 12 months of June 30, 2019. These properties belong to the A&M reportable segment.

v3.19.2
Other Non-current Assets
6 Months Ended
Jun. 30, 2019
Other Non-current Assets [Abstract]  
Other Non-current Assets

12.    Other non-current assets

June 30, 

December 31, 

    

2019

    

2018

Right-of-use assets

 

$

114,243

 

$

Tax receivable

 

 

12,675

 

 

12,705

Equity-accounted investments

 

 

4,238

 

 

4,010

Deferred debt issue costs

 

 

1,725

 

 

2,017

Other

 

 

11,996

 

 

10,663

 

$

144,877

 

$

29,395

v3.19.2
Debt
6 Months Ended
Jun. 30, 2019
Debt [Abstract]  
Debt

13.    Debt

Carrying amount

 

June 30, 

 

December 31, 

    

2019

    

2018

Short-term debt

$

8,010

$

19,896

Long-term debt:

 

  

 

  

Term loans:

 

  

 

  

Denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 3.974%, due in monthly installments of interest only and quarterly installments of principal, maturing in October 2021

 

164,112

 

161,891

Denominated in United States dollars, secured, bearing interest at a weighted average rate of 4.398%, due in weekly installments of interest only and quarterly installments of principal, maturing in October 2021

 

52,690

 

62,690

Less: unamortized debt issue costs