RITCHIE BROS AUCTIONEERS INC, 10-Q filed on 11/7/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Nov. 06, 2019
Document And Entity Information [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2019  
Document Transition Report false  
Entity File Number 001-13425  
Entity Registrant Name Ritchie Bros. Auctioneers Incorporated  
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   108,240,199
Entity Central Index Key 0001046102  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.19.3
Condensed Consolidated Income Statements - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenues:        
Total revenue $ 289,796,000 $ 245,346,000 $ 986,447,000 $ 814,054,000
Operating expenses:        
Direct expenses 36,382,000 33,053,000 122,719,000 112,743,000
Selling, general and administrative expenses 93,691,000 88,323,000 286,589,000 287,052,000
Acquisition-related costs 45,000 2,007,000 752,000 5,039,000
Depreciation and amortization expenses 17,692,000 16,723,000 51,919,000 49,451,000
Gain on disposition of property, plant and equipment (821,000) (342,000) (1,071,000) (958,000)
Foreign exchange loss 237,000 47,000 1,118,000 31,000
Total operating expenses 249,636,000 214,152,000 834,729,000 685,192,000
Operating income 40,160,000 31,194,000 151,718,000 128,862,000
Interest expense (10,090,000) (10,473,000) (31,023,000) (32,720,000)
Other income, net 1,962,000 7,182,000 5,680,000 8,995,000
Income before income taxes 32,032,000 27,903,000 126,375,000 105,137,000
Income tax expense 6,760,000 4,791,000 28,800,000 19,091,000
Net income 25,272,000 23,112,000 97,575,000 86,046,000
Net income attributable to:        
Stockholders 25,266,000 23,138,000 97,466,000 85,993,000
Non-controlling interests 6,000 (26,000) 109,000 53,000
Net income $ 25,272,000 $ 23,112,000 $ 97,575,000 $ 86,046,000
Earnings per share attributable to stockholders:        
Basic $ 0.23 $ 0.21 $ 0.90 $ 0.80
Diluted $ 0.23 $ 0.21 $ 0.89 $ 0.79
Weighted average number of shares outstanding:        
Basic 108,003,390 108,365,427 108,453,525 107,811,391
Diluted 109,381,173 109,887,194 109,634,195 109,133,378
Service Revenue [Member]        
Revenues:        
Total revenue $ 178,577,000 $ 161,374,000 $ 585,555,000 $ 551,736,000
Operating expenses:        
Direct expenses 36,382,000 33,053,000 122,719,000 112,743,000
Inventory Sales Revenue [Member]        
Revenues:        
Total revenue 111,219,000 83,972,000 400,892,000 262,318,000
Operating expenses:        
Direct expenses $ 102,410,000 $ 74,341,000 $ 372,703,000 $ 231,834,000
v3.19.3
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Condensed Consolidated Statements of Comprehensive Income        
Net income $ 25,272 $ 23,112 $ 97,575 $ 86,046
Other comprehensive income (loss), net of income tax:        
Foreign currency translation adjustment (9,703) 3 (8,880) (7,781)
Total comprehensive income 15,569 23,115 88,695 78,265
Total comprehensive income attributable to:        
Stockholders 15,586 23,145 88,614 78,234
Non-controlling interests (17) (30) 81 31
Total comprehensive income $ 15,569 $ 23,115 $ 88,695 $ 78,265
v3.19.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Assets    
Cash and cash equivalents $ 309,555 $ 237,744
Restricted cash 141,832 67,823
Trade and other receivables 249,925 129,257
Inventory 53,092 113,294
Other current assets 44,364 49,055
Income taxes receivable 10,488 6,365
Total current assets 809,256 603,538
Property, plant and equipment 476,776 486,599
Other non-current assets 148,375 29,395
Intangible assets 234,249 245,622
Goodwill 671,378 671,594
Deferred tax assets 17,797 15,648
Total assets 2,357,831 2,052,396
Liabilities and Equity    
Auction proceeds payable 453,278 203,503
Trade and other payables 166,796 201,255
Income taxes payable 16,053 2,312
Short-term debt 5,805 19,896
Current portion of long-term debt 18,027 13,126
Total current liabilities 659,959 440,092
Long-term debt 671,301 698,172
Other non-current liabilities 150,400 41,980
Deferred tax liabilities 32,859 35,519
Total liabilities 1,514,519 1,215,763
Commitments
Contingencies
Contingently redeemable performance share units   923
Share capital:    
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 108,210,335 (December 31, 2018: 108,682,030) 159,773 181,780
Additional paid-in capital 59,289 56,885
Retained earnings 684,231 648,255
Accumulated other comprehensive loss (65,129) (56,277)
Stockholders' equity 838,164 830,643
Non-controlling interest 5,148 5,067
Total stockholders' equity 843,312 835,710
Total liabilities and equity $ 2,357,831 $ 2,052,396
v3.19.3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Condensed Consolidated Balance Sheets    
Common stock, no par value $ 0 $ 0
Common stock, Shares Authorized, Unlimited Unlimited Unlimited
Common stock, issued shares 108,210,335 108,682,030
Common stock, outstanding shares 108,210,335 108,682,030
v3.19.3
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 income (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     85,993   53   86,046
Other comprehensive income (loss)       (7,759) (22)   (7,781)
Comprehensive income     85,993 (7,759) 31   78,265
Stock option exercises $ 34,876 (7,804)         27,072
Stock option exercises, shares 1,154,541            
Issuance of common stock related to vesting of share units $ 5,890 (1,662) (434)     (7,695) 3,794
Issuance of common stock related to vesting of share units, shares 177,093            
Stock option compensation expense   6,711         6,711
Modification of PSUs   12,365 958     (6,622) 13,323
Equity-classified PSU expense   3,153       5,826 3,153
Equity-classified PSU dividend equivalents   (173) 514     (341) 341
Cash dividends paid     (56,116)       (56,116)
Balance at Sep. 30, 2018 $ 179,348 53,941 632,496 (50,273) 5,100 864 820,612
Balance, shares at Sep. 30, 2018 108,601,417            
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            
Net income     23,138   (26)   23,112
Other comprehensive income (loss)       7 (4)   3
Comprehensive income     23,138 7 (30)   23,115
Stock option exercises $ 11,721 (2,698)         9,023
Stock option exercises, shares 381,942            
Issuance of common stock related to vesting of share units $ 729   (357)     (916) 372
Issuance of common stock related to vesting of share units, shares 17,124            
Stock option compensation expense   2,228         2,228
Modification of PSUs   11,662 1,092     (12,754) 12,754
Equity-classified PSU expense   1,268       1,450 1,268
Equity-classified PSU dividend equivalents   (71) 190     (119) 119
Cash dividends paid     (19,528)       (19,528)
Balance at Sep. 30, 2018 $ 179,348 53,941 632,496 (50,273) 5,100 864 820,612
Balance, shares at Sep. 30, 2018 108,601,417            
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     97,466   109   97,575
Other comprehensive income (loss)       (8,852) (28)   (8,880)
Comprehensive income     97,466 (8,852) 81   88,695
Stock option exercises $ 14,119 (1,679)         $ 12,440
Stock option exercises, shares 544,576           544,576
Issuance of common stock related to vesting of share units $ 5,886 (10,064) 1     (1,083) $ (4,177)
Issuance of common stock related to vesting of share units, shares 207,403            
Stock option compensation expense   4,852         4,852
Equity-classified PSU expense   8,640       114 8,640
Equity-classified PSU dividend equivalents   (655) 700     (46) 45
Cash dividends paid     (60,791)       (60,791)
Shares repurchased $ (42,012)           (42,012)
Shares repurchased, shares (1,223,674)            
Balance at Sep. 30, 2019 $ 159,773 59,289 684,231 (65,129) 5,148   843,312
Balance, shares at Sep. 30, 2019 108,210,335            
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            
Net income     25,266   6   25,272
Other comprehensive income (loss)       (9,680) (23)   (9,703)
Comprehensive income     25,266 (9,680) (17)   15,569
Stock option exercises $ 8,451 (135)         8,316
Stock option exercises, shares 363,217            
Issuance of common stock related to vesting of share units $ 737   1     (1,083) 738
Issuance of common stock related to vesting of share units, shares 10,444            
Stock option compensation expense   1,653         1,653
Equity-classified PSU expense   2,830       21 2,830
Equity-classified PSU dividend equivalents   (308) 320     $ (13) 12
Cash dividends paid     (21,631)       (21,631)
Balance at Sep. 30, 2019 $ 159,773 $ 59,289 $ 684,231 $ (65,129) $ 5,148   $ 843,312
Balance, shares at Sep. 30, 2019 108,210,335            
v3.19.3
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Operating activities:    
Net income $ 97,575 $ 86,046
Adjustments for items not affecting cash:    
Depreciation and amortization expenses 51,919 49,451
Stock option compensation expense 4,852 6,711
Equity-classified PSU expense 8,754 8,978
Deferred income tax recovery (4,760) (3,774)
Unrealized foreign exchange (gain) loss (129) 501
Gain on disposition of property, plant and equipment (1,071) (958)
Amortization of debt issuance costs 2,701 3,032
Gain on disposition of equity investment   (4,935)
Other, net 9,892 (3,678)
Net changes in operating assets and liabilities 139,372 (44,227)
Net cash provided by operating activities 309,105 97,147
Investing activities:    
Property, plant and equipment additions (6,915) (13,394)
Intangible asset additions (18,377) (19,410)
Proceeds on disposition of property, plant and equipment 5,610 2,524
Proceeds on disposal of equity investment   6,147
Other, net (1,000) (4,674)
Net cash used in investing activities (20,682) (28,807)
Financing activities:    
Share repurchase (42,012)  
Dividends paid to stockholders (60,791) (56,116)
Issuances of share capital 12,440 27,072
Payment of withholding taxes on issuance of shares (5,260) (3,901)
Proceeds from short-term debt 10,519 6,949
Repayment of short-term debt (24,979) (3,372)
Repayment of long-term debt (29,022) (58,825)
Repayment of finance lease obligations (4,848) (2,827)
Other, net   (1,176)
Net cash used in financing activities (143,953) (92,196)
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash 1,350 (3,215)
Increase (decrease) 145,820 (27,071)
Beginning of period 305,567 331,116
Cash, cash equivalents, and restricted cash, end of period $ 451,387 $ 304,045
v3.19.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Summary of Significant Accounting Policies  
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.

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.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

Service revenue (continued)

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.

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.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

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.

(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.

1.    Summary of significant accounting policies (continued)

(e) Share-based payments (continued)

Equity-classified share-based payments (continued)

Share unit plans (continued)

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.

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.

1.    Summary of significant accounting policies (continued)

(f) Leases (continued)

Operating leases (continued)

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.

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.

1.    Summary of significant accounting policies (continued)

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

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.

(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.
v3.19.3
Significant Judgments, Estimates and Assumptions
9 Months Ended
Sep. 30, 2019
Significant Judgments, Estimates and Assumptions  
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.

v3.19.3
Seasonality
9 Months Ended
Sep. 30, 2019
Seasonality  
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.

v3.19.3
Segmented Information
9 Months Ended
Sep. 30, 2019
Segmented Information  
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 September 30, 2019

Nine months ended September 30, 2019

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

150,093

$

28,484

$

178,577

$

494,580

$

90,975

$

585,555

Inventory sales revenue

 

111,219

 

 

111,219

 

400,892

 

 

400,892

Total revenue

$

261,312

$

28,484

$

289,796

$

895,472

$

90,975

$

986,447

Costs of services

 

21,431

 

14,951

 

36,382

 

74,799

 

47,920

 

122,719

Cost of inventory sold

 

102,410

 

 

102,410

 

372,703

 

 

372,703

SG&A expenses

 

88,138

 

5,553

 

93,691

 

268,786

 

17,803

 

286,589

Segment profit

$

49,333

$

7,980

$

57,313

$

179,184

$

25,252

$

204,436

Acquisition-related costs

 

  

 

  

 

45

 

  

 

  

 

752

Depreciation and amortization expenses ("D&A")

 

  

 

  

 

17,692

 

  

 

  

 

51,919

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

 

  

 

  

 

(821)

 

  

 

  

 

(1,071)

Foreign exchange loss

 

  

 

  

 

237

 

  

 

  

 

1,118

Operating income

 

  

 

  

$

40,160

 

  

 

  

$

151,718

Interest expense

 

  

 

  

 

(10,090)

 

  

 

  

 

(31,023)

Other income, net

 

  

 

  

 

1,962

 

  

 

  

 

5,680

Income tax expense

 

  

 

  

 

(6,760)

 

  

 

  

 

(28,800)

Net income

 

  

 

  

$

25,272

 

  

 

  

$

97,575

4.    Segmented information (continued)

Three months ended September 30, 2018

Nine months ended September 30, 2018

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

134,604

$

26,770

$

161,374

$

463,076

$

88,660

$

551,736

Inventory sales revenue

 

83,972

 

 

83,972

 

262,318

 

 

262,318

Total revenue

218,576

 

26,770

 

245,346

$

725,394

$

88,660

 

814,054

Costs of services

 

20,059

 

12,994

 

33,053

 

62,888

 

49,855

 

112,743

Cost of inventory sold

 

74,341

 

 

74,341

 

231,834

 

 

231,834

SG&A expenses

 

83,542

 

4,781

 

88,323

 

272,503

 

14,549

 

287,052

Segment profit

$

40,634

 

8,995

 

49,629

$

158,169

$

24,256

$

182,425

Acquisition-related costs

 

  

 

  

 

2,007

 

  

 

  

 

5,039

D&A expenses

 

  

 

  

 

16,723

 

  

 

  

 

49,451

Gain on disposition of PPE

 

  

 

  

 

(342)

 

  

 

  

 

(958)

Foreign exchange loss

 

  

 

  

 

47

 

  

 

  

 

31

Operating income

 

  

 

  

 

31,194

 

  

 

  

$

128,862

Interest expense

 

  

 

  

 

(10,473)

 

  

 

  

 

(32,720)

Other income, net

 

  

 

  

 

7,182

 

  

 

  

 

8,995

Income tax expense

 

  

 

  

 

(4,791)

 

  

 

  

 

(19,091)

Net income

 

  

 

  

 

23,112

 

  

 

  

$

86,046

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 revenues for the three months ended:

    

  

    

  

    

  

    

  

    

  

September 30, 2019

$

156,380

$

56,129

$

34,522

$

42,765

$

289,796

September 30, 2018

114,410

 

52,711

 

43,935

 

34,290

 

245,346

Total revenues for the nine months ended:

 

 

 

 

 

September 30, 2019

 

552,186

 

178,069

 

136,590

 

119,602

 

986,447

September 30, 2018

 

392,904

 

201,296

 

123,335

 

96,519

 

814,054

v3.19.3
Revenue
9 Months Ended
Sep. 30, 2019
Revenue  
Revenue

5.    Revenue

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

Three months ended

Nine months ended

September 30, 

September 30, 

2019

2018

2019

2018

Service revenue:

    

  

    

  

    

  

    

  

Commissions

$

90,928

$

87,548

$

317,674

$

313,539

Fees

 

87,649

 

73,826

 

267,881

 

238,197

 

178,577

 

161,374

 

585,555

 

551,736

Inventory sales revenue

 

111,219

 

83,972

 

400,892

 

262,318

$

289,796

$

245,346

$

986,447

$

814,054

v3.19.3
Operating Expenses
9 Months Ended
Sep. 30, 2019
Operating Expenses  
Operating Expenses

6.    Operating expenses

Costs of services

Three months ended

Nine months ended

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

Ancillary and logistical service expenses

$

13,285

  

$

11,682

$

43,516

  

$

46,242

Employee compensation expenses

11,555

 

10,170

37,268

 

30,120

Buildings, facilities and technology expenses

1,655

 

1,990

5,961

 

7,280

Travel, advertising and promotion expenses

5,765

 

5,921

24,440

 

20,535

Other costs of services

4,122

 

3,290

11,534

 

8,566

$

36,382

$

33,053

$

122,719

$

112,743

SG&A expenses

Three months ended

Nine months ended

 

September 30, 

 

September 30, 

    

2019

    

2018

    

2019

    

2018

Employee compensation expenses

$

60,680

 

56,959

$

186,033

$

186,951

Buildings, facilities and technology expenses

 

14,569

 

15,058

 

45,066

 

45,767

Travel, advertising and promotion expenses

 

10,033

 

9,302

 

28,400

 

27,821

Professional fees

 

3,685

 

2,983

 

11,915

 

12,638

Other SG&A expenses

 

4,724

 

4,021

 

15,175

 

13,875

$

93,691

 

$

88,323

$

286,589

$

287,052

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

Nine months ended

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

IronPlanet:

  

 

  

  

 

  

Other acquisition-related costs

$

  

$

1,756

  

$

82

  

$

2,876

Other acquisitions:

 

  

 

  

Continuing employment costs

34

 

251

  

121

 

  

2,104

Other acquisition-related costs

11

 

  

549

 

  

59

$

45

$

2,007

$

752

 

$

5,039

Depreciation and amortization expenses

Three months ended

Nine months ended

    

September 30, 

    

September 30, 

    

2019

    

2018

    

2019

    

2018

Depreciation expense

$

7,305

$

7,252

$

21,630

$

21,460

Amortization expense

 

10,387

 

9,471

 

30,289

 

27,991

$

17,692

$

16,723

$

51,919

$

49,451

v3.19.3
Income Taxes
9 Months Ended
Sep. 30, 2019
Income Taxes  
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 September 30, 2019, income tax expense was $6,760,000, compared to an income tax expense of $4,791,000 for the same period in 2018. The effective tax rate was 21% in the third quarter of 2019, compared to 17% in the third quarter of 2018. The effective tax rate increased in the third quarter of 2019 compared to the third quarter of 2018 primarily due to a greater proportion of annual income subject to tax in jurisdictions with higher tax rates.

For the nine months ended September 30, 2019, income tax expense was $28,800,000, compared to an income tax expense of $19,091,000 for the same period in 2018. The effective tax rate was 23% for the nine months ended September 30, 2019, compared to 18% for the nine months ended September 30, 2018. The effective tax rate increased in the nine months ended September 30, 2019, compared to the nine months ended September 30, 2018, primarily due to a greater proportion of annual income subject to tax in jurisdictions with higher tax rates and impacts of the U.S. tax reform.

The Tax Cuts and Jobs Act, or TCJA was enacted in the United States 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.

v3.19.3
Earnings Per Share Attributable to Stockholders
9 Months Ended
Sep. 30, 2019
Earnings Per Share Attributable to Stockholders  
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

Nine months ended

September 30, 2019

September 30, 2019

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

$

25,266

 

108,003,390

$

0.23

$

97,466

 

108,453,525

$

0.90

Effect of dilutive securities:

 

 

 

 

 

 

Share units

 

 

481,268

 

 

 

430,175

 

Stock options

 

 

896,515

 

 

 

750,495

 

Diluted

$

25,266

 

109,381,173

$

0.23

$

97,466

 

109,634,195

$

0.89

v3.19.3
Supplemental Cash Flow Information
9 Months Ended
Sep. 30, 2019
Supplemental Cash Flow Information  
Supplemental Cash Flow Information

9.    Supplemental cash flow information

Nine months ended September 30,

    

2019

    

2018

Trade and other receivables

$

(123,667)

$

(159,258)

Inventory

 

58,791

 

(49,140)

Advances against auction contracts

 

4,528

 

2,434

Prepaid expenses and deposits

 

309

 

(5,282)

Income taxes receivable

 

(4,123)

 

10,829

Auction proceeds payable

 

248,587

 

130,185

Trade and other payables

 

(48,882)

 

15,827

Income taxes payable

 

14,050

 

6,836

Share unit liabilities

 

 

1,204

Other

 

(10,221)

 

2,138

Net changes in operating assets and liabilities

$

139,372

$

(44,227)

Nine months ended September 30, 

    

2019

    

2018

Interest paid, net of interest capitalized

$

34,955

$

36,278

Interest received

 

2,491

 

2,009

Net income taxes paid

 

23,193

 

7,902

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

$

10,747

$

5,490

September 30, 

December 31, 

    

2019

    

2018

Cash and cash equivalents

$

309,555

$

237,744

Restricted cash

 

141,832

67,823

Cash, cash equivalents, and restricted cash

$

451,387

$

305,567

v3.19.3
Fair Value Measurement
9 Months Ended
Sep. 30, 2019
Fair Value Measurement  
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.

  

September 30, 2019

December 31, 2018

Carrying

Carrying

    

Category

    

amount

    

Fair value

    

amount

    

Fair value

Fair values disclosed:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents

 

Level 1

$

309,555

$

309,555

$

237,744

$

237,744

Restricted cash

 

Level 1

 

141,832

 

141,832

 

67,823

 

67,823

Short-term debt

 

Level 2

 

5,805

 

5,805

 

19,896

 

19,896

Long-term debt

 

  

 

 

 

  

 

  

Senior unsecured notes

 

Level 1

 

490,480

 

521,250

 

489,136

 

487,813

Term loans

 

Level 2

 

198,848

 

200,426

 

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.

v3.19.3
Other Current Assets
9 Months Ended
Sep. 30, 2019
Other Current Assets  
Other Current Assets

11.    Other current assets

September 30, 

December 31, 

    

2019

    

2018

Advances against auction contracts

$

11,055

$

15,558

Assets held for sale

 

15,051

 

15,051

Prepaid expenses and deposits

 

18,258

 

18,446

$

44,364

$

49,055

Assets held for sale

Balance, December 31, 2018

15,051

Reclassified from (to) property, plant and equipment

Balance, September 30, 2019

$

15,051

As at September 30, 2019, the Company’s assets held for sale consisted of two 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 September 30, 2019. These properties belong to the A&M reportable segment.

v3.19.3
Other Non-current Assets
9 Months Ended
Sep. 30, 2019
Other Non-current Assets  
Other Non-current Assets

12.    Other non-current assets

September 30, 

December 31, 

    

2019

    

2018

Right-of-use assets

 

$

117,898

 

$

Tax receivable

 

 

12,824

 

 

12,705

Equity-accounted investments

 

 

4,201

 

 

4,010

Deferred debt issue costs

 

 

1,564

 

 

2,017

Other

 

 

11,888

 

 

10,663

 

$

148,375

 

$

29,395

v3.19.3
Debt
9 Months Ended
Sep. 30, 2019
Debt  
Debt

13.    Debt

Carrying amount

 

September 30, 

 

December 31, 

    

2019

    

2018

Short-term debt

$

5,805

$

19,896

Long-term debt:

 

  

 

  

Term loans:

 

  

 

  

Denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 3.951%, due in monthly installments of interest only and quarterly installments of principal, maturing in October 2021

 

157,736

 

161,891

Denominated in United States dollars, secured, bearing interest at a weighted average rate of 4.200%, due in weekly installments of interest only and quarterly installments of principal, maturing in October 2021

 

42,690

 

62,690

Less: unamortized debt issue costs

 

(1,578)

 

(2,419)

Senior unsecured notes:

 

  

 

  

Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025

 

500,000

 

500,000

Less: unamortized debt issue costs

 

(9,520)

 

(10,864)

Total long-term debt

 

689,328

 

711,298

Total debt

$

695,133

$

731,194

Long-term debt:

 

  

 

  

Current portion

$

18,027

$

13,126

Non-current portion

 

671,301

 

698,172

Total long-term debt

$

689,328

$

711,298

During the three and nine months ended September 30, 2019, the Company made voluntary prepayments totalling $10,000,000 and $20,000,000, respectively (2018 - $nil and $50,000,000, respectively) on the term loan denominated in United States dollars. Prepayments are applied against future scheduled mandatory payments. The amount available pursuant to the term loan facility was only available to finance the acquisition of IronPlanet and will not be available for other corporate purposes upon repayment of amounts borrowed under that facility.

Short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facilities, and for the three months ended September 30, 2019, have a weighted average interest rate of 2.1% (December 31, 2018: 2.3%).

As at September 30, 2019, the Company had unused committed revolving credit facilities aggregating $488,979,000 of which $484,259,000 is available until October 27, 2021.

v3.19.3
Other Non-current Liabilities
9 Months Ended
Sep. 30, 2019
Other Non-current Liabilities  
Other Non-current Liabilities

14.    Other non-current liabilities

September 30, 

December 31, 

    

2019

    

2018

Operating lease liability

$

112,244

$

Tax payable

 

20,159

 

22,583

Finance lease liability

 

14,640

 

10,146

Other

 

3,357

 

9,251

$

150,400

$

41,980

v3.19.3
Equity and Dividends
9 Months Ended
Sep. 30, 2019
Equity and Dividends  
Equity and Dividends

15.    Equity and dividends

Share capital

Preferred stock

Unlimited number of senior preferred shares, without par value, issuable in series.

Unlimited number of junior preferred shares, without par value, issuable in series.

All issued shares are fully paid. No preferred shares have been issued.

Dividends

Declared and paid

The Company declared and paid the following dividends during the nine months ended September 30, 2019 and 2018:

    

    

Dividend  

    

    

Total

    

Declaration date

per share

Record date

dividends

Payment date

Nine months ended September 30, 2019:

 

  

 

  

 

  

 

  

 

  

Fourth quarter 2018

January 25, 2019

$

0.1800

February 15, 2019

$

19,568

March 8, 2019

First quarter of 2019

May 8, 2019

 

0.1800

May 29, 2019

 

19,592

June 19, 2019

Second quarter of 2019

August 8, 2019

0.2000

August 28, 2019

21,631

September 18, 2019

Nine months ended September 30, 2018:

  

 

  

  

 

  

  

Fourth quarter 2017

January 26, 2018

$

0.1700

February 16, 2018

$

18,246

March 9, 2018

First quarter of 2018

May 9, 2018

 

0.1700

May 30, 2018

 

18,342

June 20, 2018

Second quarter of 2018

August 7, 2018

0.1800

August 29, 2018

19,528

September 19, 2018

Declared and undistributed

Subsequent to September 30, 2019, the Company’s Board of Directors declared a quarterly dividend of $0.20 cents per common share, payable on December 18, 2019 to stockholders of record on November 27, 2019. This dividend payable has not been recognized as a liability in the financial statements. The payment of this dividend will not have any tax consequences for the Company.

Foreign currency translation reserve

Foreign currency translation adjustments include intra-entity foreign currency transactions that are of a long-term investment nature, which generated net loss of $4,623,000 and $2,971,000 for the three and nine months ended September 30, 2019 (2018: net losses of $1,072,000 and $6,256,000).

v3.19.3
Share-Based Payments
9 Months Ended
Sep. 30, 2019
Share-Based Payments  
Share-Based Payments

16.    Share-based payments

Share-based payments consist of the following compensation costs:

 

Three months ended

 

Nine months ended

 

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

Stock option compensation expense:

 

  

 

  

 

  

 

  

SG&A expenses

$

1,653

$

2,066

$

4,852

$

6,354

Acquisition-related costs

 

 

162

 

 

357

Share unit expense:

 

 

  

 

  

 

  

Equity-classified share units

 

2,851

 

2,718

 

8,754

 

8,978

Liability-classified share units

 

589

 

300

 

829

 

2,245

Employee share purchase plan - employer contributions

 

567

 

538

 

1,692

 

1,630

$

5,660

$

5,784

$

16,127

$

19,564

Share unit expense and employer contributions to the employee share purchase plan are recognized in SG&A expenses.

Stock option plans

Stock option activity for the nine months ended September 30, 2019 is presented below:

WA

Common

WA

remaining

Aggregate

shares under

exercise

contractual

intrinsic

    

option

    

price

    

life (in years)

    

value

Outstanding, December 31, 2018

 

4,013,863

$

26.41

 

7.2

$

25,374

Granted

 

914,068

 

34.03

 

  

 

Exercised

 

(544,576)

 

22.84

 

 

7,939

Forfeited

 

(61,358)

 

26.26

 

  

 

Outstanding, September 30, 2019

 

4,321,997

 

28.47

 

7.2

 

49,396

Exercisable, September 30, 2019

 

2,548,247

$

25.76

 

6.1

$

36,041

The significant assumptions used to estimate the fair value of stock options granted during the nine months ended September 30, 2019 and 2018 are presented in the following table on a weighted average basis:

Nine months ended September 30,

    

2019

    

2018

Risk free interest rate

 

2.5

%  

2.7

%

Expected dividend yield

 

2.06

%  

2.11

%

Expected lives of the stock options

 

5 years

 

5 years

Expected volatility

 

26.8

%  

28.1

%

As at September 30, 2019, the unrecognized stock-based compensation cost related to the non-vested stock options was $6,309,000, which is expected to be recognized over a weighted average period of 2.2 years.

16.    Share-based payments (continued)

Share unit plans

Share unit activity for the nine months ended September 30, 2019 is presented below:

Equity-classified awards

Liability-classified awards  

PSUs

RSUs

DSUs

WA grant

WA grant

WA grant

date fair

date fair

date fair

    

Number

    

value

    

Number

    

value

    

Number

    

value

Outstanding, December 31, 2018

 

670,288

$

31.46

 

207,986

$

28.99

 

113,435

$

28.16

Granted

 

168,225

 

36.17

 

35,251

 

35.58

 

19,487

 

34.93

Vested and settled

 

(251,883)

 

30.33

 

(265)

 

31.98

 

 

Forfeited

 

(20,282)

 

31.76

 

(4,797)

 

34.89

 

 

Outstanding, September 30, 2019

 

566,348

$

33.00

 

238,175

$

29.74

 

132,922

$

28.90

Senior executive and employee PSU plans

The Company grants PSUs under a senior executive PSU plan and an employee PSU plan (the “PSU Plans”). Under the PSU Plans, the number of PSUs that vest is conditional upon specified market, service, or performance vesting conditions being met. The PSU Plans allow the Company to choose whether to settle the awards in cash or in shares. The Company intends to settle in shares. With respect to settling in shares, the Company has the option to either (i) arrange for the purchase shares on the open market on the employee’s behalf based on the cash value that otherwise would be delivered, or (ii) to issue a number of shares equal to the number of units that vest.

The fair value of the equity-classified PSUs awarded in 2018 is estimated on modification date and on the date of grant using a Monte-Carlo simulation model as these awards are subject to market vesting conditions. The significant assumptions used to estimate the fair value of the equity-classified PSUs awarded during the nine months ended September 30, 2018, are presented in the following table on a weighted average basis:

Nine months ended September 30,

    

2018

Risk free interest rate

 

1.9

%

Expected dividend yield

 

2.09

%

Expected lives of the PSUs

 

3 years

Expected volatility

 

31.1

%

Average expected volatility of comparable companies

 

34.1

%

The fair value of the equity-classified PSUs awarded in 2019 is estimated based on the Company’s common share price at grant date, as these awards are not subject to market vesting conditions.

As at September 30, 2019, the unrecognized share unit expense related to equity-classified PSUs was $8,751,000, which is expected to be recognized over a weighted average period of 1.8 years.

RSUs

The Company has RSU plans that are equity-settled and not subject to market vesting conditions.

As at September 30, 2019, the unrecognized share unit expense related to equity-classified RSUs was $3,144,000, which is expected to be recognized over a weighted average period of 1.4 years.

16.    Share-based payments (continued)

Share unit plans (continued)

DSUs

The Company has DSU plans that are cash-settled and not subject to market vesting conditions.

Fair values of DSUs are estimated on grant date and at each reporting date. DSUs are granted under the DSU plan to members of the Board of Directors. There is no unrecognized share unit expense related to liability-classified DSUs as they vest immediately and are expensed upon grant.

As at September 30, 2019, the Company had a total share unit liability of $5,159,000 (December 31, 2018: $3,714,000) in respect of share units under the DSU plans.

Employee share purchase plan

The Company has an employee share purchase plan that allows all employees that have completed two months of service to contribute funds to purchase common shares at the current market value at the time of share purchase. Employees may contribute up to 4% of their salary. The Company will match between 50% and 100% of the employee’s contributions, depending on the employee’s length of service with the Company.

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases  
Leases

17.    Leases

The Company’s breakdown of lease expense for the three and nine months ended September 30, 2019 is as follows:

    

 Three months

    

Nine months

ended

ended

Operating lease cost

$

4,096

$

13,379

Finance lease cost

 

 

Amortization of leased assets

 

2,103

 

5,555

Interest on lease liabilities

 

211

 

565

Short-term lease cost

 

1,889

 

6,964

Sublease income

 

(150)

 

(447)

$

8,149

$

26,016

Operating leases

The Company has entered into commercial leases for various auction sites and offices located in North America, Europe, the Middle East and Asia. The majority of these leases are non-cancellable. The Company also has further operating leases for computer equipment, certain motor vehicles and small office equipment where it is not in the best interest of the Company to purchase these assets.

The majority of the Company’s operating leases have a fixed term with a remaining life between one month and 20 years, with renewal options included in the contracts. The leases have varying contract terms, escalation clauses and renewal options. Generally there are no restrictions placed upon the lessee by entering into these leases, other than restrictions on use of property, sub-letting and alterations. At the inception of a lease, the Company determines whether it is reasonably certain to exercise a renewal option and includes the options in the determination of the lease term and the lease liability where it is reasonably certain to exercise the option. If the Company’s intention is to exercise an option subsequent to the commencement of the lease, the Company will re-assess the lease term. The Company has included certain renewal options in its operating lease liabilities for key property leases for locations that have strategic importance to the Company such as its Corporate Head Office. The Company has not included any purchase options available within its operating lease portfolio in its determination of its operating lease liability.

17.    Leases (continued)

Operating leases (continued)

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Remainder of 2019

    

$

3,795

2020

 

15,922

2021

 

13,472

2022

 

12,124

2023

 

10,384

Thereafter

 

113,731

Total future minimum lease payments

$

169,428

less: imputed interest

 

(46,436)

Total operating lease liability

$

122,992

less: operating lease liability - current

 

(10,748)

Total operating lease liability - non current

$

112,244

At September 30, 2019, the weighted average remaining lease term for operating leases is 15.6 years and the weighted average discount rate is 4.2%.

Finance leases

The Company has entered into finance lease arrangements for certain vehicles, computer and yard equipment and office furniture. The majority of the leases have a fixed term with a remaining life of one month to six years with renewal options included in the contracts. In certain of these leases, the Company has the option to purchase the leased asset at fair market value or a stated residual value at the end of the lease term. For certain leases such as vehicle leases the Company has included renewal options in the determination of its lease liabilities. The Company has not included any purchase options available within its finance lease portfolio in its determination of the finance lease liability.

As at September 30, 2019, the net carrying amount of computer and yard equipment and other assets under capital leases is $20,660,000 (December 31, 2018: $14,976,000), and is included in the total property, plant and equipment as disclosed on the consolidated balance sheets.

    

    

Accumulated

    

Net book

As at September 30, 2019

Cost

depreciation

value

Computer equipment

$

14,362

$

(6,812)

$

7,550

Yard and others

 

17,797

 

(4,687)

 

13,110

$

32,159

$

(11,499)

$

20,660

    

    

Accumulated

    

Net book

As at December 31, 2018

Cost

depreciation

value

Computer equipment

$

9,428

$

(3,992)

$

5,436

Yard and auto equipment

 

12,125

 

(2,585)

 

9,540

$

21,553

$

(6,577)

$

14,976

17.    Leases (continued)

Finance leases (continued)

The future aggregate minimum lease payments under non-cancellable finance leases are as follows:

Remainder of 2019

    

$

1,998

2020

 

7,246

2021

 

5,913

2022

 

4,107

2023

 

2,517

Thereafter

 

843

Total future minimum lease payments

$

22,624

less: imputed interest

 

(1,357)

Total finance lease liability

$

21,267

less: finance lease liability - current

 

(6,627)

Total finance lease liability - non current

$

14,640

At September 30, 2019, the weighted average remaining lease term for finance leases is 3.5 years and the weighted average discount rate is 4.0%.

Subleases

As at September 30, 2019, the total future minimum sublease payments expected to be received under non-cancellable subleases is $734,000.

v3.19.3
Commitments
9 Months Ended
Sep. 30, 2019
Leases  
Commitments

18.    Commitments

Commitment for inventory purchase

The Company entered into a two-year non-rolling stock surplus contract with the U.S. Government Defense Logistics Agency (the “DLA”) in December 2017 with the option to extend for up to four-years. Pursuant to the contract the performance period commenced in April 2018 and concludes in March 2020.

The Company has committed to purchase between 150,000 and 245,900 units of property with an expected minimum value of $11,104,000 and up to $51,028,000 annually to the extent that goods are available from the DLA over each 12 month period relating to the purchase of inventory. At September 30, 2019, the Company has purchased $19,328,000 pursuant to the 12 month period of this contract which commenced in April 2019.

v3.19.3
Contingencies
9 Months Ended
Sep. 30, 2019
Contingencies  
Contingencies

19.    Contingencies

Legal and other claims

The Company is subject to legal and other claims that arise in the ordinary course of its business. Management does not believe that the results of these claims will have a material effect on the Company’s consolidated balance sheet or consolidated income statement.

Guarantee contracts

In the normal course of business, the Company will in certain situations guarantee to a consignor a minimum level of proceeds in connection with the sale at auction of that consignor’s equipment.

At September 30, 2019, there were $85,777,000 of assets guaranteed under contract, of which 80% is expected to be sold prior to December 31, 2019 with the remainder to be sold by June 30, 2020 (December 31, 2018: $41,461,000 of which 51% was expected to be sold prior to the end of March 31, 2019 with the remainder to be sold by May 31, 2020).

The outstanding guarantee amounts are undiscounted and before estimated proceeds from sale at auction.

v3.19.3
Summary of Significant Accounting Policies (Policy)
9 Months Ended
Sep. 30, 2019
Summary of Significant Accounting Policies  
Basis of Preparation

(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.

Revenue Recognition

(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.

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.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

Service revenue (continued)

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.

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.

1.    Summary of significant accounting policies (continued)

(b) Revenue recognition (continued)

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.

Costs of Services

(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.

Cost of Inventory Sold

(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.

Share-Based Payments

(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.

1.    Summary of significant accounting policies (continued)

(e) Share-based payments (continued)

Equity-classified share-based payments (continued)

Share unit plans (continued)

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.

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.

Leases

(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.

1.    Summary of significant accounting policies (continued)

(f) Leases (continued)

Operating leases (continued)

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.

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.

Inventories

(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.

Impairment of Long-lived and Indefinite-lived Assets

(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.

1.    Summary of significant accounting policies (continued)

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

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.

Goodwill

(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.

New and Amended Accounting Standards & Recent Accounting Standards Not Yet Adopted

(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.
v3.19.3
Segmented Information (Tables)
9 Months Ended
Sep. 30, 2019
Segmented Information  
Schedule of Revenue and (Loss) Income Before Taxes by Segment

Three months ended September 30, 2019

Nine months ended September 30, 2019

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

150,093

$

28,484

$

178,577

$

494,580

$

90,975

$

585,555

Inventory sales revenue

 

111,219

 

 

111,219

 

400,892

 

 

400,892

Total revenue

$

261,312

$

28,484

$

289,796

$

895,472

$

90,975

$

986,447

Costs of services

 

21,431

 

14,951

 

36,382

 

74,799

 

47,920

 

122,719

Cost of inventory sold

 

102,410

 

 

102,410

 

372,703

 

 

372,703

SG&A expenses

 

88,138

 

5,553

 

93,691

 

268,786

 

17,803

 

286,589

Segment profit

$

49,333

$

7,980

$

57,313

$

179,184

$

25,252

$

204,436

Acquisition-related costs

 

  

 

  

 

45

 

  

 

  

 

752

Depreciation and amortization expenses ("D&A")

 

  

 

  

 

17,692

 

  

 

  

 

51,919

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

 

  

 

  

 

(821)

 

  

 

  

 

(1,071)

Foreign exchange loss

 

  

 

  

 

237

 

  

 

  

 

1,118

Operating income

 

  

 

  

$

40,160

 

  

 

  

$

151,718

Interest expense

 

  

 

  

 

(10,090)

 

  

 

  

 

(31,023)

Other income, net

 

  

 

  

 

1,962

 

  

 

  

 

5,680

Income tax expense

 

  

 

  

 

(6,760)

 

  

 

  

 

(28,800)

Net income

 

  

 

  

$

25,272

 

  

 

  

$

97,575

4.    Segmented information (continued)

Three months ended September 30, 2018

Nine months ended September 30, 2018

    

A&M

    

Other

    

Consolidated

    

A&M

    

Other

    

Consolidated

Service revenue

$

134,604

$

26,770

$

161,374

$

463,076

$

88,660

$

551,736

Inventory sales revenue

 

83,972

 

 

83,972

 

262,318

 

 

262,318

Total revenue

218,576

 

26,770

 

245,346

$

725,394

$

88,660

 

814,054

Costs of services

 

20,059

 

12,994

 

33,053

 

62,888

 

49,855

 

112,743

Cost of inventory sold

 

74,341

 

 

74,341

 

231,834

 

 

231,834

SG&A expenses

 

83,542

 

4,781

 

88,323

 

272,503

 

14,549

 

287,052

Segment profit

$

40,634

 

8,995

 

49,629

$

158,169

$

24,256

$

182,425

Acquisition-related costs

 

  

 

  

 

2,007

 

  

 

  

 

5,039

D&A expenses

 

  

 

  

 

16,723

 

  

 

  

 

49,451

Gain on disposition of PPE

 

  

 

  

 

(342)

 

  

 

  

 

(958)

Foreign exchange loss

 

  

 

  

 

47

 

  

 

  

 

31

Operating income

 

  

 

  

 

31,194

 

  

 

  

$

128,862

Interest expense

 

  

 

  

 

(10,473)

 

  

 

  

 

(32,720)

Other income, net

 

  

 

  

 

7,182

 

  

 

  

 

8,995

Income tax expense

 

  

 

  

 

(4,791)

 

  

 

  

 

(19,091)

Net income

 

  

 

  

 

23,112

 

  

 

  

$

86,046

Geographic Information of Revenue

United 

  

States

Canada

Europe

Other

Consolidated

Total revenues for the three months ended:

    

  

    

  

    

  

    

  

    

  

September 30, 2019

$

156,380

$

56,129

$

34,522

$

42,765

$

289,796

September 30, 2018

114,410

 

52,711

 

43,935

 

34,290

 

245,346

Total revenues for the nine months ended:

 

 

 

 

 

September 30, 2019

 

552,186

 

178,069

 

136,590

 

119,602

 

986,447

September 30, 2018

 

392,904

 

201,296

 

123,335

 

96,519

 

814,054

v3.19.3
Revenue (Tables)
9 Months Ended
Sep. 30, 2019
Revenue  
Revenue from the Rendering of Services

Three months ended

Nine months ended

September 30, 

September 30, 

2019

2018

2019

2018

Service revenue:

    

  

    

  

    

  

    

  

Commissions

$

90,928

$

87,548

$

317,674

$

313,539

Fees

 

87,649

 

73,826

 

267,881

 

238,197

 

178,577

 

161,374

 

585,555

 

551,736

Inventory sales revenue

 

111,219

 

83,972

 

400,892

 

262,318

$

289,796

$

245,346

$

986,447

$

814,054

v3.19.3
Operating Expenses (Tables)
9 Months Ended
Sep. 30, 2019
Operating Expenses  
Schedule of Direct Operating Expenses

Three months ended

Nine months ended

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

Ancillary and logistical service expenses

$

13,285

  

$

11,682

$

43,516

  

$

46,242

Employee compensation expenses

11,555

 

10,170

37,268

 

30,120

Buildings, facilities and technology expenses

1,655

 

1,990

5,961

 

7,280

Travel, advertising and promotion expenses

5,765

 

5,921

24,440

 

20,535

Other costs of services

4,122

 

3,290

11,534

 

8,566

$

36,382

$

33,053

$

122,719

$

112,743

Schedule of Selling, General and Administrative Expenses

Three months ended

Nine months ended

 

September 30, 

 

September 30, 

    

2019

    

2018

    

2019

    

2018

Employee compensation expenses

$

60,680

 

56,959

$

186,033

$

186,951

Buildings, facilities and technology expenses

 

14,569

 

15,058

 

45,066

 

45,767

Travel, advertising and promotion expenses

 

10,033

 

9,302

 

28,400

 

27,821

Professional fees

 

3,685

 

2,983

 

11,915

 

12,638

Other SG&A expenses

 

4,724

 

4,021

 

15,175

 

13,875

$

93,691

 

$

88,323

$

286,589

$

287,052

Schedule of Acquisition Related Costs

Three months ended

Nine months ended

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

IronPlanet:

  

 

  

  

 

  

Other acquisition-related costs

$

  

$

1,756

  

$

82

  

$

2,876

Other acquisitions:

 

  

 

  

Continuing employment costs

34

 

251

  

121

 

  

2,104

Other acquisition-related costs

11

 

  

549

 

  

59

$

45

$

2,007

$

752

 

$

5,039

Schedule of Depreciation and Amortization Expenses

Three months ended

Nine months ended

    

September 30, 

    

September 30, 

    

2019

    

2018

    

2019

    

2018

Depreciation expense

$

7,305

$

7,252

$

21,630

$

21,460

Amortization expense

 

10,387

 

9,471

 

30,289

 

27,991

$

17,692

$

16,723

$

51,919

$

49,451

v3.19.3
Earnings Per Share Attributable to Stockholders (Tables)
9 Months Ended
Sep. 30, 2019
Earnings Per Share Attributable to Stockholders  
Computation of Basic and Diluted Earnings Per Share

Three months ended

Nine months ended

September 30, 2019

September 30, 2019

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

$

25,266

 

108,003,390

$

0.23

$

97,466

 

108,453,525

$

0.90

Effect of dilutive securities:

 

 

 

 

 

 

Share units

 

 

481,268

 

 

 

430,175

 

Stock options

 

 

896,515

 

 

 

750,495

 

Diluted

$

25,266

 

109,381,173

$

0.23

$

97,466

 

109,634,195

$

0.89

v3.19.3
Supplemental Cash Flow Information (Tables)
9 Months Ended
Sep. 30, 2019
Supplemental Cash Flow Information  
Schedule of Net Changes in Operating Assets and Liabilities

Nine months ended September 30,

    

2019

    

2018

Trade and other receivables

$

(123,667)

$

(159,258)

Inventory

 

58,791

 

(49,140)

Advances against auction contracts

 

4,528

 

2,434

Prepaid expenses and deposits

 

309

 

(5,282)

Income taxes receivable

 

(4,123)

 

10,829

Auction proceeds payable

 

248,587

 

130,185

Trade and other payables

 

(48,882)

 

15,827

Income taxes payable

 

14,050

 

6,836

Share unit liabilities

 

 

1,204

Other

 

(10,221)

 

2,138

Net changes in operating assets and liabilities

$

139,372

$

(44,227)

Schedule of Supplemental Cash Flow

Nine months ended September 30, 

    

2019

    

2018

Interest paid, net of interest capitalized

$

34,955

$

36,278

Interest received

 

2,491

 

2,009

Net income taxes paid

 

23,193

 

7,902

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

$

10,747

$

5,490

Schedule of Cash, Cash Equivalents and Restricted Cash

September 30, 

December 31, 

    

2019

    

2018

Cash and cash equivalents

$

309,555

$

237,744

Restricted cash

 

141,832

67,823

Cash, cash equivalents, and restricted cash

$

451,387

$

305,567

v3.19.3
Fair Value Measurement (Tables)
9 Months Ended
Sep. 30, 2019
Fair Value Measurement  
Fair Value Assets Recurring and Nonrecurring

  

September 30, 2019

December 31, 2018

Carrying

Carrying

    

Category

    

amount

    

Fair value

    

amount

    

Fair value

Fair values disclosed:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents

 

Level 1

$

309,555

$

309,555

$

237,744

$

237,744

Restricted cash

 

Level 1

 

141,832

 

141,832

 

67,823

 

67,823

Short-term debt

 

Level 2

 

5,805

 

5,805

 

19,896

 

19,896

Long-term debt

 

  

 

 

 

  

 

  

Senior unsecured notes

 

Level 1

 

490,480

 

521,250

 

489,136

 

487,813

Term loans

 

Level 2

 

198,848

 

200,426

 

222,162

 

224,582

v3.19.3
Other Current Assets (Tables)
9 Months Ended
Sep. 30, 2019
Other Current Assets  
Schedule of Other Current Assets

September 30, 

December 31, 

    

2019

    

2018

Advances against auction contracts

$

11,055

$

15,558

Assets held for sale

 

15,051

 

15,051

Prepaid expenses and deposits

 

18,258

 

18,446

$

44,364

$

49,055

Assets held for sale

Balance, December 31, 2018

15,051

Reclassified from (to) property, plant and equipment

Balance, September 30, 2019

$

15,051

Summary of Assets Held For Sale

September 30, 

December 31, 

    

2019

    

2018

Advances against auction contracts

$

11,055

$

15,558

Assets held for sale

 

15,051

 

15,051

Prepaid expenses and deposits

 

18,258

 

18,446

$

44,364

$

49,055

Assets held for sale

Balance, December 31, 2018

15,051

Reclassified from (to) property, plant and equipment

Balance, September 30, 2019

$

15,051

v3.19.3
Other Non-current Assets (Tables)
9 Months Ended
Sep. 30, 2019
Other Non-current Assets  
Schedule of Other Non-current Assets

September 30, 

December 31, 

    

2019

    

2018

Right-of-use assets

 

$

117,898

 

$

Tax receivable

 

 

12,824

 

 

12,705

Equity-accounted investments

 

 

4,201

 

 

4,010

Deferred debt issue costs

 

 

1,564

 

 

2,017

Other

 

 

11,888

 

 

10,663

 

$

148,375

 

$

29,395

v3.19.3
Debt (Tables)
9 Months Ended
Sep. 30, 2019
Debt  
Schedule of Debt

Carrying amount

 

September 30, 

 

December 31, 

    

2019

    

2018

Short-term debt

$

5,805

$

19,896

Long-term debt:

 

  

 

  

Term loans:

 

  

 

  

Denominated in Canadian dollars, secured, bearing interest at a weighted average rate of 3.951%, due in monthly installments of interest only and quarterly installments of principal, maturing in October 2021

 

157,736

 

161,891

Denominated in United States dollars, secured, bearing interest at a weighted average rate of 4.200%, due in weekly installments of interest only and quarterly installments of principal, maturing in October 2021

 

42,690

 

62,690

Less: unamortized debt issue costs

 

(1,578)

 

(2,419)

Senior unsecured notes:

 

  

 

  

Bearing interest at 5.375% due in semi-annual installments, with the full amount of principal due in January 2025

 

500,000

 

500,000

Less: unamortized debt issue costs

 

(9,520)

 

(10,864)

Total long-term debt

 

689,328

 

711,298

Total debt

$

695,133

$

731,194

Long-term debt:

 

  

 

  

Current portion

$

18,027

$

13,126

Non-current portion

 

671,301

 

698,172

Total long-term debt

$

689,328

$

711,298

v3.19.3
Other Non-current Liabilities (Tables)
9 Months Ended
Sep. 30, 2019
Other Non-current Liabilities  
Other Non-current Liabilities

September 30, 

December 31, 

    

2019

    

2018

Operating lease liability

$

112,244

$

Tax payable

 

20,159

 

22,583

Finance lease liability

 

14,640

 

10,146

Other

 

3,357

 

9,251

$

150,400

$

41,980

v3.19.3
Equity and Dividends (Tables)
9 Months Ended
Sep. 30, 2019
Equity and Dividends  
Schedule of Quarterly Dividends Declared and Paid

    

    

Dividend  

    

    

Total

    

Declaration date

per share

Record date

dividends

Payment date

Nine months ended September 30, 2019:

 

  

 

  

 

  

 

  

 

  

Fourth quarter 2018

January 25, 2019

$

0.1800

February 15, 2019

$

19,568

March 8, 2019

First quarter of 2019

May 8, 2019

 

0.1800

May 29, 2019

 

19,592

June 19, 2019

Second quarter of 2019

August 8, 2019

0.2000

August 28, 2019

21,631

September 18, 2019

Nine months ended September 30, 2018:

  

 

  

  

 

  

  

Fourth quarter 2017

January 26, 2018

$

0.1700

February 16, 2018

$

18,246

March 9, 2018

First quarter of 2018

May 9, 2018

 

0.1700

May 30, 2018

 

18,342

June 20, 2018

Second quarter of 2018

August 7, 2018

0.1800

August 29, 2018

19,528

September 19, 2018

v3.19.3
Share-Based Payments (Tables)
9 Months Ended
Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Compensation Costs Related to Share-Based Payments

 

Three months ended

 

Nine months ended

 

September 30, 

September 30, 

    

2019

    

2018

    

2019

    

2018

Stock option compensation expense:

 

  

 

  

 

  

 

  

SG&A expenses

$

1,653

$

2,066

$

4,852

$

6,354

Acquisition-related costs

 

 

162

 

 

357

Share unit expense:

 

 

  

 

  

 

  

Equity-classified share units

 

2,851

 

2,718

 

8,754

 

8,978

Liability-classified share units

 

589

 

300

 

829

 

2,245

Employee share purchase plan - employer contributions

 

567

 

538

 

1,692

 

1,630

$

5,660

$

5,784

$

16,127

$

19,564

Summary of Stock Option Activity

WA

Common

WA

remaining

Aggregate

shares under

exercise

contractual

intrinsic

    

option

    

price

    

life (in years)

    

value

Outstanding, December 31, 2018

 

4,013,863

$

26.41

 

7.2

$

25,374

Granted

 

914,068

 

34.03

 

  

 

Exercised

 

(544,576)

 

22.84

 

 

7,939

Forfeited

 

(61,358)

 

26.26

 

  

 

Outstanding, September 30, 2019

 

4,321,997

 

28.47

 

7.2

 

49,396

Exercisable, September 30, 2019

 

2,548,247

$

25.76

 

6.1

$

36,041

Summary of Stock Option and Performance Share Unit Pricing Assumptions

Nine months ended September 30,

    

2019

    

2018

Risk free interest rate

 

2.5

%  

2.7

%

Expected dividend yield

 

2.06

%  

2.11

%

Expected lives of the stock options

 

5 years

 

5 years

Expected volatility

 

26.8

%  

28.1

%

Summary of Share Unit Activity

Equity-classified awards

Liability-classified awards  

PSUs

RSUs

DSUs

WA grant

WA grant

WA grant

date fair

date fair

date fair

    

Number

    

value

    

Number

    

value

    

Number

    

value

Outstanding, December 31, 2018

 

670,288

$

31.46

 

207,986

$

28.99

 

113,435

$

28.16

Granted

 

168,225

 

36.17

 

35,251

 

35.58

 

19,487

 

34.93

Vested and settled

 

(251,883)

 

30.33

 

(265)

 

31.98

 

 

Forfeited

 

(20,282)

 

31.76

 

(4,797)

 

34.89

 

 

Outstanding, September 30, 2019

 

566,348

$

33.00

 

238,175

$

29.74

 

132,922

$

28.90

Performance Share Units [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Stock Option and Performance Share Unit Pricing Assumptions

Nine months ended September 30,

    

2018

Risk free interest rate

 

1.9

%

Expected dividend yield

 

2.09

%

Expected lives of the PSUs

 

3 years

Expected volatility

 

31.1

%

Average expected volatility of comparable companies

 

34.1

%

v3.19.3
Leases (Tables)
9 Months Ended
Sep. 30, 2019
Leases  
Breakdown of Lease Expense

    

 Three months

    

Nine months

ended

ended

Operating lease cost

$

4,096

$

13,379

Finance lease cost

 

 

Amortization of leased assets

 

2,103

 

5,555

Interest on lease liabilities

 

211

 

565

Short-term lease cost

 

1,889

 

6,964

Sublease income

 

(150)

 

(447)

$

8,149

$

26,016

Future Minimum Operating Lease Payments

Remainder of 2019

    

$

3,795

2020

 

15,922

2021

 

13,472

2022

 

12,124

2023

 

10,384

Thereafter

 

113,731

Total future minimum lease payments

$

169,428

less: imputed interest

 

(46,436)

Total operating lease liability

$

122,992

less: operating lease liability - current

 

(10,748)

Total operating lease liability - non current

$

112,244

Information Disclosed on Balance Sheets

    

    

Accumulated

    

Net book

As at September 30, 2019

Cost

depreciation

value

Computer equipment

$

14,362

$

(6,812)

$

7,550

Yard and others

 

17,797

 

(4,687)

 

13,110

$

32,159

$

(11,499)

$

20,660

    

    

Accumulated

    

Net book

As at December 31, 2018

Cost

depreciation

value

Computer equipment

$

9,428

$

(3,992)

$

5,436

Yard and auto equipment

 

12,125

 

(2,585)

 

9,540

$

21,553

$

(6,577)

$

14,976

Future Minimum Finance Lease Payments

Remainder of 2019

    

$

1,998

2020

 

7,246

2021

 

5,913

2022

 

4,107

2023

 

2,517

Thereafter

 

843

Total future minimum lease payments

$

22,624

less: imputed interest

 

(1,357)

Total finance lease liability

$

21,267

less: finance lease liability - current

 

(6,627)

Total finance lease liability - non current

$

14,640

v3.19.3
Summary of Significant Accounting Policies (Details)
9 Months Ended
Sep. 30, 2019
USD ($)
Property, Plant and Equipment [Line Items]  
Liabilities $ 122,992,000
Right-of-use assets 117,898,000
Accounting Standards Update 2016-02 [Member]  
Property, Plant and Equipment [Line Items]  
Liabilities 5,752,000
Right-of-use assets $ 103,897,000
Liability Classified Awards [Member] | Maximum [Member]  
Property, Plant and Equipment [Line Items]  
Award vesting period 3 years
v3.19.3
Segmented Information (Narrative) (Details)
9 Months Ended
Sep. 30, 2019
segment
Segmented Information  
Number of reportable segments 1
v3.19.3
Segmented Information (Schedule of Revenue and (Loss) Income Before Taxes by Segment) (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Segment Reporting [Line Items]        
Revenue $ 289,796,000 $ 245,346,000 $ 986,447,000 $ 814,054,000
Direct expenses 36,382,000 33,053,000 122,719,000 112,743,000
SG&A expenses 93,691,000 88,323,000 286,589,000 287,052,000
Segment profit 57,313,000 49,629,000 204,436,000 182,425,000
Acquisition-related costs 45,000 2,007,000 752,000 5,039,000
D&A expenses 17,692,000 16,723,000 51,919,000 49,451,000
Gain on disposition of property, plant and equipment ("PPE") (821,000) (342,000) (1,071,000) (958,000)
Foreign exchange loss 237,000 47,000 1,118,000 31,000
Operating income 40,160,000 31,194,000 151,718,000 128,862,000
Interest expense (10,090,000) (10,473,000) (31,023,000) (32,720,000)
Other income, net 1,962,000 7,182,000 5,680,000 8,995,000
Income tax expense (6,760,000) (4,791,000) (28,800,000) (19,091,000)
Net income 25,272,000 23,112,000 97,575,000 86,046,000
Auctions and Marketplaces [Member]        
Segment Reporting [Line Items]        
Revenue 261,312,000 218,576,000 895,472,000 725,394,000
SG&A expenses 88,138,000 83,542,000 268,786,000 272,503,000
Segment profit 49,333,000 40,634,000 179,184,000 158,169,000
Other Reporting Unit [Member]        
Segment Reporting [Line Items]        
Revenue 28,484,000 26,770,000 90,975,000 88,660,000
SG&A expenses 5,553,000 4,781,000 17,803,000 14,549,000
Segment profit 7,980,000 8,995,000 25,252,000 24,256,000
Service Revenue [Member]        
Segment Reporting [Line Items]        
Revenue 178,577,000 161,374,000 585,555,000 551,736,000
Direct expenses 36,382,000 33,053,000 122,719,000 112,743,000
Service Revenue [Member] | Auctions and Marketplaces [Member]        
Segment Reporting [Line Items]        
Revenue 150,093,000 134,604,000 494,580,000 463,076,000
Direct expenses 21,431,000 20,059,000 74,799,000 62,888,000
Service Revenue [Member] | Other Reporting Unit [Member]        
Segment Reporting [Line Items]        
Revenue 28,484,000 26,770,000 90,975,000 88,660,000
Direct expenses 14,951,000 12,994,000 47,920,000 49,855,000
Inventory Sales Revenue [Member]        
Segment Reporting [Line Items]        
Revenue 111,219,000 83,972,000 400,892,000 262,318,000
Direct expenses 102,410,000 74,341,000 372,703,000 231,834,000
Inventory Sales Revenue [Member] | Auctions and Marketplaces [Member]        
Segment Reporting [Line Items]        
Revenue 111,219,000 83,972,000 400,892,000 262,318,000
Direct expenses $ 102,410,000 $ 74,341,000 $ 372,703,000 $ 231,834,000
v3.19.3
Segmented Information (Geographic Information of Revenue) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]        
Revenue $ 289,796 $ 245,346 $ 986,447 $ 814,054
United States [Member]        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Revenue 156,380 114,410 552,186 392,904
Canada [Member]        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Revenue 56,129 52,711 178,069 201,296
Europe [Member]        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Revenue 34,522 43,935 136,590 123,335
Other [Member]        
Revenues from External Customers and Long-Lived Assets [Line Items]        
Revenue $ 42,765 $ 34,290 $ 119,602 $ 96,519
v3.19.3
Revenue (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenue $ 289,796 $ 245,346 $ 986,447 $ 814,054
Service Revenue [Member]        
Revenue 178,577 161,374 585,555 551,736
Commission Revenue [Member]        
Revenue 90,928 87,548 317,674 313,539
Fees Revenue [Member]        
Revenue 87,649 73,826 267,881 238,197
Inventory Sales Revenue [Member]        
Revenue $ 111,219 $ 83,972 $ 400,892 $ 262,318
v3.19.3
Operating Expenses (Schedule of Direct Operating Expenses) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Ancillary and logistical service expenses $ 13,285 $ 11,682 $ 43,516 $ 46,242
Employee compensation expenses 11,555 10,170 37,268 30,120
Buildings, facilities and technology expenses 1,655 1,990 5,961 7,280
Travel, advertising and promotion expenses 5,765 5,921 24,440 20,535
Other costs of services 4,122 3,290 11,534 8,566
Total direct expenses 36,382 33,053 122,719 112,743
Service Revenue [Member]        
Total direct expenses $ 36,382 $ 33,053 $ 122,719 $ 112,743
v3.19.3
Operating Expenses (Schedule of Selling, General and Administrative Expenses) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Operating Expenses        
Employee compensation expenses $ 60,680 $ 56,959 $ 186,033 $ 186,951
Buildings, facilities and technology expenses 14,569 15,058 45,066 45,767
Travel, advertising and promotion expenses 10,033 9,302 28,400 27,821
Professional fees 3,685 2,983 11,915 12,638
Other SG&A expenses 4,724 4,021 15,175 13,875
Total selling, general and administrative expenses $ 93,691 $ 88,323 $ 286,589 $ 287,052
v3.19.3
Operating Expenses (Schedule of Acquisition Related Costs) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Acquisition-related costs $ 45 $ 2,007 $ 752 $ 5,039
Iron Planet Holdings Inc. [Member]        
Acquisition-related costs   1,756 82 2,876
Other Acquisitions [Member] | Employment Costs [Member]        
Acquisition-related costs 34 $ 251 121 2,104
Other Acquisitions [Member] | Other Related Costs [Member]        
Acquisition-related costs $ 11   $ 549 $ 59
v3.19.3
Operating Expenses (Schedule of Depreciation and Amortization Expenses) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Operating Expenses        
Depreciation expense $ 7,305 $ 7,252 $ 21,630 $ 21,460
Amortization expense 10,387 9,471 30,289 27,991
Total depreciation and amortization expenses $ 17,692 $ 16,723 $ 51,919 $ 49,451
v3.19.3
Income Taxes (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Income Taxes        
Income tax expense $ 6,760,000 $ 4,791,000 $ 28,800,000 $ 19,091,000
Effective income tax rate 21.00% 17.00% 23.00% 18.00%
v3.19.3
Earnings Per Share Attributable to Stockholders (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Net income attributable to:        
Basic $ 25,266   $ 97,466  
Diluted $ 25,266   $ 97,466  
Weighted average number of shares outstanding:        
Basic 108,003,390 108,365,427 108,453,525 107,811,391
Diluted 109,381,173 109,887,194 109,634,195 109,133,378
Per Share Amount        
Basic $ 0.23 $ 0.21 $ 0.90 $ 0.80
Diluted $ 0.23 $ 0.21 $ 0.89 $ 0.79
Share Units [Member]        
Weighted average number of shares outstanding:        
Effect of dilutive securities: 481,268   430,175  
Stock Options [Member]        
Weighted average number of shares outstanding:        
Effect of dilutive securities: 896,515   750,495  
v3.19.3
Supplemental Cash Flow Information (Schedule of Net Changes In Operating Assets and Liabilities) (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Supplemental Cash Flow Information    
Trade and other receivables $ (123,667) $ (159,258)
Inventory 58,791 (49,140)
Advances against auction contracts 4,528 2,434
Prepaid expenses and deposits 309 (5,282)
Income taxes receivable (4,123) 10,829
Auction proceeds payable 248,587 130,185
Trade and other payables (48,882) 15,827
Income taxes payable 14,050 6,836
Share unit liabilities   1,204
Other (10,221) 2,138
Net changes in operating assets and liabilities $ 139,372 $ (44,227)
v3.19.3
Supplemental Cash Flow Information (Schedule of Supplemental Cash Flow) (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Supplemental Cash Flow Information    
Interest paid, net of interest capitalized $ 34,955 $ 36,278
Interest received 2,491 2,009
Net income taxes paid 23,193 7,902
Non-cash purchase of property, plant and equipment under capital lease $ 10,747 $ 5,490
v3.19.3
Supplemental Cash Flow Information (Schedule of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Sep. 30, 2018
Dec. 31, 2017
Supplemental Cash Flow Information        
Cash and cash equivalents $ 309,555 $ 237,744    
Restricted cash 141,832 67,823    
Cash, cash equivalents, and restricted cash $ 451,387 $ 305,567 $ 304,045 $ 331,116
v3.19.3
Fair Value Measurement (Details) - Recurring [Member] - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Carrying Amount [Member] | Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents $ 309,555 $ 237,744
Restricted Cash 141,832 67,823
Fair Value [Member] | Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash and cash equivalents 309,555 237,744
Restricted Cash 141,832 67,823
Short-term Debt [Member] | Carrying Amount [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument 5,805 19,896
Short-term Debt [Member] | Fair Value [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument 5,805 19,896
Senior Unsecured Notes [Member] | Long-term Debt [Member] | Carrying Amount [Member] | Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument 490,480 489,136
Senior Unsecured Notes [Member] | Long-term Debt [Member] | Fair Value [Member] | Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument 521,250 487,813
Delayed Draw Term Loans [Member] | Long-term Debt [Member] | Carrying Amount [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument 198,848 222,162
Delayed Draw Term Loans [Member] | Long-term Debt [Member] | Fair Value [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt instrument $ 200,426 $ 224,582
v3.19.3
Other Current Assets (Schedule of Other Current Assets) (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Other Current Assets    
Advances against auction contracts $ 11,055 $ 15,558
Assets held for sale 15,051 15,051
Prepaid expenses and deposits 18,258 18,446
Other Current Assets $ 44,364 $ 49,055
v3.19.3
Other Current Assets (Summary of Assets Held For Sale) (Details)
$ in Thousands
Sep. 30, 2019
USD ($)
Other Current Assets  
Beginning balance $ 15,051
Ending balance $ 15,051
v3.19.3
Other Non-current Assets (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Other Non-current Assets    
Right-of-use assets $ 117,898  
Tax receivable 12,824 $ 12,705
Equity-accounted investments 4,201 4,010
Deferred debt issue costs 1,564 2,017
Other 11,888 10,663
Other Non-current Assets, Total $ 148,375 $ 29,395
v3.19.3
Debt (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2018
Debt [Line Items]          
Repayment of debt     $ 29,022,000 $ 58,825,000  
Delayed Draw Term Loans [Member]          
Debt [Line Items]          
Repayment of debt $ 10,000,000 20,000,000 $ 50,000,000  
Committed Revolving Credit Facilities [Member]          
Debt [Line Items]          
Maximum borrowing capacity 488,979,000   488,979,000    
Available borrowing capacity $ 484,259,000   $ 484,259,000    
Revolving Credit Facility [Member]          
Debt [Line Items]          
Weighted average interest rate 2.10%   2.10%   2.30%
v3.19.3
Debt (Summary of Debt) (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Debt [Line Items]    
Short-term debt $ 5,805 $ 19,896
Long-term Debt, Total 689,328 711,298
Total debt 695,133 731,194
Current portion 18,027 13,126
Non-current portion 671,301 698,172
Delayed Draw Term Loans [Member]    
Debt [Line Items]    
Less: unamortized debt issue costs (1,578) (2,419)
Senior Unsecured Notes [Member]    
Debt [Line Items]    
Less: unamortized debt issue costs $ (9,520) (10,864)
3.951% Term Loan, Due October 2021 [Member]    
Debt [Line Items]    
Weighted average interest rate 3.951%  
3.951% Term Loan, Due October 2021 [Member] | Delayed Draw Term Loans [Member]    
Debt [Line Items]    
Long-term Debt $ 157,736 161,891
Maturity date Oct. 31, 2021  
4.200% Term Loan, Due October 2021 [Member]    
Debt [Line Items]    
Weighted average interest rate 4.20%  
4.200% Term Loan, Due October 2021 [Member] | Delayed Draw Term Loans [Member]    
Debt [Line Items]    
Long-term Debt $ 42,690 62,690
Maturity date Oct. 31, 2021  
5.375% Senior Unsecured Note, Due January 2025 [Member] | Senior Unsecured Notes [Member]    
Debt [Line Items]    
Long-term Debt $ 500,000 $ 500,000
Interest rate 5.375%  
Maturity date Jan. 31, 2025  
v3.19.3
Other Non-current Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Other Non-current Liabilities    
Operating lease liability $ 112,244  
Tax payable 20,159 $ 22,583
Finance lease liability 14,640 10,146
Other 3,357 9,251
Other non-current liabilities, Total $ 150,400 $ 41,980
v3.19.3
Equity and Dividends (Narrative) (Details) - USD ($)
3 Months Ended 9 Months Ended
Dec. 18, 2019
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Dividends Payable [Line Items]          
Preferred shares issued   0   0  
Intra-entity foreign currency transactions   $ 4,623,000 $ (1,072,000) $ 2,971,000 $ (6,256,000)
Subsequent Event [Member]          
Dividends Payable [Line Items]          
Dividends declared (usd per share) $ 0.20        
v3.19.3
Equity and Dividends (Schedule of Quarterly Dividends Declared and Paid) (Details) - USD ($)
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Fourth Quarter 2018 [Member]    
Dividends Payable [Line Items]    
Declaration date Jan. 25, 2019  
Dividend per share $ 0.1800  
Record date Feb. 15, 2019  
Total dividends $ 19,568  
Payment date Mar. 08, 2019  
First Quarter 2019 [Member]    
Dividends Payable [Line Items]    
Declaration date May 08, 2019  
Dividend per share $ 0.1800  
Record date May 29, 2019  
Total dividends $ 19,592  
Payment date Jun. 19, 2019  
Second Quarter 2019 [Member]    
Dividends Payable [Line Items]    
Declaration date Aug. 08, 2019  
Dividend per share $ 0.2000  
Record date Aug. 28, 2019  
Total dividends $ 21,631  
Payment date Sep. 18, 2019  
Fourth Quarter 2017 [Member]    
Dividends Payable [Line Items]    
Declaration date   Jan. 26, 2018
Dividend per share   $ 0.1700
Record date   Feb. 16, 2018
Total dividends   $ 18,246
Payment date   Mar. 09, 2018
First Quarter 2018 [Member]    
Dividends Payable [Line Items]    
Declaration date   May 09, 2018
Dividend per share   $ 0.1700
Record date   May 30, 2018
Total dividends   $ 18,342
Payment date   Jun. 20, 2018
Second Quarter 2018 [Member]    
Dividends Payable [Line Items]    
Declaration date   Aug. 07, 2018
Dividend per share   $ 0.1800
Record date   Aug. 29, 2018
Total dividends   $ 19,528
Payment date   Sep. 19, 2018
v3.19.3
Share-Based Payments (Narrative) (Details) - USD ($)
9 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation costs $ 6,309,000  
Unrecognized compensation costs, period for recognition 2 years 2 months 12 days  
Maximum employee contribution, percentage 4.00%  
Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Employer matching contribution, percentage 50.00%  
Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Employer matching contribution, percentage 100.00%  
Performance Share Units [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation costs $ 8,751,000  
Unrecognized compensation costs, period for recognition 1 year 9 months 18 days  
Restricted Share Units [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation costs $ 3,144,000  
Unrecognized compensation costs, period for recognition 1 year 4 months 24 days  
Deferred Share Units [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation costs $ 0  
Share unit liability $ 5,159,000 $ 3,714,000
v3.19.3
Share-Based Payments (Compensation Costs Related To Share-Based Payments) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Stock option compensation expense     $ 4,852 $ 6,711
Equity-classified share units $ 2,851 $ 2,718 8,754 8,978
Liability-classified share units 589 300 829 2,245
Employee share purchase plan - employer contributions 567 538 1,692 1,630
Total compensation costs related to share based payments 5,660 5,784 16,127 19,564
Selling, General and Administrative Expenses [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Stock option compensation expense $ 1,653 2,066 $ 4,852 6,354
Acquisition-related Costs [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Stock option compensation expense   $ 162   $ 357
v3.19.3
Share-Based Payments (Summary of Stock Option Activity) (Details)
$ / shares in Units, $ in Thousands
9 Months Ended 12 Months Ended
Sep. 30, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
$ / shares
shares
Share-Based Payments    
Outstanding beginning balance, Common shares under option | shares 4,013,863  
Granted, Common shares under option | shares 914,068  
Exercised, Common shares under option | shares (544,576)  
Forfeited, Common shares under option | shares (61,358)  
Outstanding ending balance, Common shares under option | shares 4,321,997 4,013,863
Exercisable, Common shares under option | shares 2,548,247  
Outstanding beginning balance, Weighted average exercise price (per share) | $ / shares $ 26.41  
Granted, Weighted average exercise price (per share) | $ / shares 34.03  
Exercised, Weighted average exercise price (per share) | $ / shares 22.84  
Forfeited, Weighted average exercise price (per share) | $ / shares 26.26  
Outstanding ending balance, Weighted average exercise price (per share) | $ / shares 28.47 $ 26.41
Exercisable, Weighted average exercise price (per share) | $ / shares $ 25.76  
Outstanding, Weighted average remaining contractual life (in years) 7 years 2 months 12 days 7 years 2 months 12 days
Exercisable, Weighted average remaining contractual life (in years) 6 years 1 month 6 days  
Outstanding beginning balance, Aggregate intrinsic value | $ $ 25,374  
Exercised, Aggregate intrinsic value | $ 7,939  
Outstanding ending balance, Aggregate intrinsic value | $ 49,396 $ 25,374
Exercisable, Aggregate intrinsic value | $ $ 36,041  
v3.19.3
Share-Based Payments (Summary of Stock Option and Performance Share Unit Pricing Assumptions) (Details)
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk free interest rate 2.50% 2.70%
Expected dividend yield 2.06% 2.11%
Expected lives 5 years 5 years
Expected volatility 26.80% 28.10%
Performance Share Units [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk free interest rate   1.90%
Expected dividend yield   2.09%
Expected lives   3 years
Expected volatility   31.10%
Average expected volatility of comparable companies   34.10%
v3.19.3
Share-Based Payments (Summary of Share Unit Activity) (Details)
9 Months Ended
Sep. 30, 2019
$ / shares
shares
Performance Share Units [Member] | Equity Securities [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Outstanding beginning balance, Shares | shares 670,288
Granted, Shares | shares 168,225
Vested and settled, Shares | shares (251,883)
Forfeited, Shares | shares (20,282)
Outstanding ending balance, Shares | shares 566,348
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares $ 31.46
Granted, Weighted average grant date fair value (per share) | $ / shares 36.17
Vested and settled, Weighted average grant date fair value (per share) | $ / shares 30.33
Forfeited, Weighted average grant date fair value (per share) | $ / shares 31.76
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares $ 33.00
Restricted Share Units [Member] | Equity Securities [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Outstanding beginning balance, Shares | shares 207,986
Granted, Shares | shares 35,251
Vested and settled, Shares | shares (265)
Forfeited, Shares | shares (4,797)
Outstanding ending balance, Shares | shares 238,175
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares $ 28.99
Granted, Weighted average grant date fair value (per share) | $ / shares 35.58
Vested and settled, Weighted average grant date fair value (per share) | $ / shares 31.98
Forfeited, Weighted average grant date fair value (per share) | $ / shares 34.89
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares $ 29.74
Deferred Share Units [Member] | Debt securities  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Outstanding beginning balance, Shares | shares 113,435
Granted, Shares | shares 19,487
Outstanding ending balance, Shares | shares 132,922
Outstanding beginning balance, Weighted average grant date fair value (per share) | $ / shares $ 28.16
Granted, Weighted average grant date fair value (per share) | $ / shares 34.93
Outstanding ending balance, Weighted average grant date fair value (per share) | $ / shares $ 28.90
v3.19.3
Leases (Narrative) (Details) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Capital leased assets    
Weighted average remaining lease term 15 years 7 months 6 days  
Discount rate 4.20%  
Weighted average remaining finance lease term 3 years 6 months  
Finance discount rate 4.00%  
Future minimum sublease payments $ 734,000  
Net book value $ 476,776,000 $ 486,599,000
Minimum [Member]    
Capital leased assets    
Operating lease fixed term 1 month  
Finance lease term 1 month  
Maximum [Member]    
Capital leased assets    
Operating lease fixed term 20 years  
Finance lease term 6 years  
Computer Equipment [Member]    
Capital leased assets    
Net book value $ 7,550,000 5,436,000
Yard And Other [Member]    
Capital leased assets    
Net book value 13,110,000  
Yard and Auto Equipment [Member]    
Capital leased assets    
Net book value   9,540,000
Finance leases [Member]    
Capital leased assets    
Net book value $ 20,660,000 $ 14,976,000
v3.19.3
Leases (Breakdown of Lease Expense) (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Leases    
Operating lease cost $ 4,096 $ 13,379
Amortization of leased assets 2,103 5,555
Interest on lease liabilities 211 565
Short-term lease cost 1,889 6,964
Sublease income (150) (447)
Lease expense $ 8,149 $ 26,016
v3.19.3
Leases (Future Minimum Operating Lease Payments) (Details)
$ in Thousands
Sep. 30, 2019
USD ($)
Leases  
Remainder of 2019 $ 3,795
2020 15,922
2021 13,472
2022 12,124
2023 10,384
Thereafter 113,731
Total future minimum lease payments 169,428
less: imputed interest (46,436)
Total operating lease liability 122,992
less: operating lease liability - current (10,748)
Total operating lease liability - non current $ 112,244
v3.19.3
Leases (Information Disclosed on Balance Sheets) (Details) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Property, Plant and Equipment [Line Items]    
Net book value $ 476,776,000 $ 486,599,000
Computer Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost 14,362,000 9,428,000
Accumulated depreciation (6,812,000) (3,992,000)
Net book value 7,550,000 5,436,000
Yard And Other [Member]    
Property, Plant and Equipment [Line Items]    
Cost 17,797,000  
Accumulated depreciation (4,687,000)  
Net book value 13,110,000  
Yard and Auto Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost   12,125,000
Accumulated depreciation   (2,585,000)
Net book value   9,540,000
Finance leases [Member]    
Property, Plant and Equipment [Line Items]    
Cost 32,159,000 21,553,000
Accumulated depreciation (11,499,000) (6,577,000)
Net book value $ 20,660,000 $ 14,976,000
v3.19.3
Leases (Future Minimum Finance Lease Payments) (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Leases    
Remainder of 2019 $ 1,998  
2020 7,246  
2021 5,913  
2022 4,107  
2023 2,517  
Thereafter 843  
Total future minimum lease payments 22,624  
less: imputed interest (1,357)  
Total finance lease liability 21,267  
less: finance lease liability - current (6,627)  
Total finance lease liability - non current $ 14,640 $ 10,146
v3.19.3
Commitments (Details)
9 Months Ended
Sep. 30, 2019
USD ($)
item
Commitments [Line Items]  
Purchase commitment amount purchased $ 19,328,000
Minimum [Member]  
Commitments [Line Items]  
Purchase commitment quantity | item 150,000
Purchase commitment $ 11,104,000
Maximum [Member]  
Commitments [Line Items]  
Purchase commitment quantity | item 245,900
Purchase commitment $ 51,028,000
v3.19.3
Contingencies (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Contingencies    
Assets guaranteed under contract $ 85,777,000 $ 41,461,000
Percentage of assets expected to be sold 80.00% 51.00%