RITCHIE BROS AUCTIONEERS INC, 10-Q filed on 11/9/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2017
Nov. 7, 2017
Document And Entity Information [Abstract]
 
 
Entity Registrant Name
Ritchie Bros Auctioneers Inc 
 
Entity Central Index Key
0001046102 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
107,184,927 
Condensed Consolidated Income Statements (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Condensed Consolidated Income Statements [Abstract]
 
 
 
 
Revenues (note 6)
$ 141,047 
$ 128,876 
$ 431,732 
$ 419,626 
Costs of services, excluding depreciation and amortization (note 7)
19,583 
14,750 
53,987 
49,821 
Gross revenue, net of expenses
121,464 
114,126 
377,745 
369,805 
Selling, general and administrative expenses (note 7)
85,335 
68,293 
230,287 
209,395 
Acquisition-related costs (note 7)
3,587 
5,398 
35,162 
7,198 
Depreciation and amortization expenses (note 7)
14,837 
10,196 
37,047 
30,560 
Gain on disposition of property, plant and equipment
(42)
(570)
(1,071)
(1,017)
Impairment loss (note 7)
28,243 
8,911 
28,243 
Foreign exchange loss (gain)
816 
281 
(7)
332 
Operating income
16,931 
2,285 
67,416 
95,094 
Other income (expense):
 
 
 
 
Interest income
517 
369 
2,459 
1,354 
Interest expense
(10,558)
(934)
(27,311)
(3,357)
Equity income (loss) (note 17)
(109)
213 
(158)
1,209 
Other, net
184 
247 
4,045 
1,214 
Other income (expense)
(9,966)
(105)
(20,965)
420 
Income before income taxes
6,965 
2,180 
46,451 
95,514 
Income tax expense (recovery) (note 8):
 
 
 
 
Current
1,402 
9,652 
17,565 
35,767 
Deferred
(4,760)
(2,472)
(9,583)
(5,838)
Income tax expense
(3,358)
7,180 
7,982 
29,929 
Net income (loss)
10,323 
(5,000)
38,469 
65,585 
Net income (loss) attributable to:
 
 
 
 
Stockholders
10,261 
(5,137)
38,273 
63,979 
Non-controlling interests
$ 62 
$ 137 
$ 196 
$ 1,606 
Earnings (loss) per share attributable to stockholders (note 9):
 
 
 
 
Basic
$ 0.10 
$ (0.05)
$ 0.36 
$ 0.60 
Diluted
$ 0.09 
$ (0.05)
$ 0.35 
$ 0.60 
Weighted average number of shares outstanding (note 9):
 
 
 
 
Basic
107,120,618 
106,622,376 
106,993,358 
106,595,088 
Diluted
108,178,303 
107,525,051 
108,069,624 
107,221,390 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Condensed Consolidated Statements of Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ 10,323 
$ (5,000)
$ 38,469 
$ 65,585 
Other comprehensive income, net of income tax:
 
 
 
 
Foreign currency translation adjustment
6,009 
590 
22,822 
7,990 
Total comprehensive income (loss)
16,332 
(4,410)
61,291 
73,575 
Total comprehensive income (loss) attributable to:
 
 
 
 
Stockholders
16,256 
(4,550)
61,045 
71,798 
Non-controlling interests
$ 76 
$ 140 
$ 246 
$ 1,777 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Current Assets:
 
 
Cash and cash equivalents
$ 224,474 
$ 207,867 
Restricted cash (note 10)
89,846 
50,222 
Trade and other receivables
212,330 
52,979 
Inventory (note 12)
46,333 
28,491 
Advances against auction contracts
9,983 
5,621 
Prepaid expenses and deposits
16,422 
19,005 
Assets held for sale (note 13)
654 
632 
Income taxes receivable
21,413 
13,181 
Total Current Assets
621,455 
377,998 
Property, plant and equipment (note 14)
530,495 
515,030 
Equity-accounted investments (note 17)
7,287 
7,326 
Restricted cash (note 10)
 
500,000 
Deferred debt issue costs (note 18)
4,054 
6,182 
Other non-current assets
7,198 
4,027 
Intangible assets (note 15)
261,122 
72,304 
Goodwill (note 16)
669,646 
97,537 
Deferred tax assets
28,607 
19,129 
Total Assets
2,129,864 
1,599,533 
Current liabilities:
 
 
Auction proceeds payable
360,517 
98,873 
Trade and other payables
132,045 
124,694 
Income taxes payable
1,277 
5,355 
Short-term debt (note 18)
8,567 
23,912 
Current portion of long-term debt (note 18)
16,985 
 
Total Current Liabilities
519,391 
252,834 
Long-term debt (note 18)
800,900 
595,706 
Share unit liabilities
2,444 
4,243 
Other non-current liabilities
18,118 
14,583 
Deferred tax liabilities
62,068 
36,387 
Total Liabilities
1,402,921 
903,753 
Contingencies (note 21)
   
   
Contingently redeemable performance share units (note 20)
7,230 
3,950 
Share capital:
 
 
Common stock; no par value, unlimited shares authorized, issued and outstanding shares: 107,180,726 (December 31, 2016: 106,822,001)
135,919 
125,474 
Additional paid-in capital
38,907 
27,638 
Retained earnings
584,263 
601,071 
Accumulated other comprehensive loss
(44,354)
(67,126)
Stockholders' equity
714,735 
687,057 
Non-controlling interest
4,978 
4,773 
Total Equity
719,713 
691,830 
Total Liabilities and Equity
$ 2,129,864 
$ 1,599,533 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Condensed Consolidated Balance Sheets [Abstract]
 
 
Common stock, no par value
   
   
Common stock, Shares Authorized, Unlimited
Unlimited 
Unlimited 
Common stock, issued shares
107,180,726 
106,822,001 
Common stock, outstanding shares
107,180,726 
106,822,001 
Condensed Consolidated Statements of Changes in Equity (USD $)
In Thousands, except Share data
Common stock [Member]
Additional paid-in capital ("APIC") [Member]
Retained earnings [Member]
Accumulated other comprehensive income (loss) [Member]
Non-controlling interest ("NCI") [Member]
Performance Share Units [Member]
Total
Balance at Dec. 31, 2016
$ 125,474 
$ 27,638 
$ 601,071 
$ (67,126)
$ 4,773 
 
$ 691,830 
Balance, shares at Dec. 31, 2016
106,822,001 
 
 
 
 
 
 
Contingently redeemable Performance share units, Balance at Dec. 31, 2016
 
 
 
 
 
3,950 
3,950 
Net income
 
 
38,273 
 
196 
 
38,469 
Other comprehensive income
 
 
 
22,772 
50 
 
22,822 
Comprehensive income
 
 
38,273 
22,772 
246 
 
61,291 
Stock option exercises
10,354 
(2,420)
 
 
 
 
7,934 
Stock option exercises, shares
355,514 
 
 
 
 
 
 
Stock option compensation expense (note 20)
 
10,996 
 
 
 
 
10,996 
Assumption of stock options on acquisition of IronPlanet (note 22)
 
2,330 
 
 
 
 
2,330 
Settlement of equity-classified PSUs
91 
 
 
 
 
(172)
91 
Settlement of equity-classified PSUs, shares
3,211 
 
 
 
 
 
 
Modification of PSUs (note 20)
 
 
(382)
 
 
1,803 
(382)
Equity-classified PSU expense (note 20)
 
340 
 
 
 
1,531 
340 
Equity-classified PSU dividend equivalents
 
23 
(126)
 
 
103 
(103)
Change in value of contingently redeemable equity-classified PSUs
 
 
(15)
 
 
15 
(15)
Cash dividends paid (note 19)
 
 
(54,558)
 
(41)
 
(54,599)
Balance at Sep. 30, 2017
135,919 
38,907 
584,263 
(44,354)
4,978 
 
719,713 
Balance, shares at Sep. 30, 2017
107,180,726 
 
 
 
 
 
 
Contingently redeemable Performance share units, Balance at Sep. 30, 2017
 
 
 
 
 
$ 7,230 
$ 7,230 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2016
Mascus International Holdings BV [Member]
Sep. 30, 2016
Petrowsky Auctioneers Inc. [Member]
Operating activities:
 
 
 
 
Net income
$ 38,469 
$ 65,585 
 
 
Adjustments for items not affecting cash:
 
 
 
 
Depreciation and amortization expenses (note 7)
37,047 
30,560 
 
 
Inventory write down (note 12)
778 
2,284 
 
 
Impairment loss (note 7)
8,911 
28,243 
 
 
Stock option compensation expense (note 20)
10,996 
4,025 
 
 
Equity-classified PSU expense (note 20)
1,871 
1,222 
 
 
Deferred income tax recovery
(9,583)
(5,838)
 
 
Equity loss (income) less dividends received
158 
(1,209)
 
 
Unrealized foreign exchange (gain) loss
(1,011)
586 
 
 
Change in fair value of contingent consideration
(2,194)
 
 
 
Gain on disposition of property, plant and equipment
(1,071)
(1,017)
 
 
Debt issue cost amortization
2,058 
 
 
 
Other, net
239 
 
 
 
Net changes in operating assets and liabilities (note 10)
10,547 
36,980 
 
 
Net cash provided by operating activities
97,215 
161,421 
 
 
Investing activities:
 
 
 
 
Acquisition (note 22)
 
 
(28,123)
(6,250)
Acquisition of contingently redeemable NCI (note 23)
 
(41,092)
 
 
Acquisition of NCI (note 22)
 
(226)
 
 
Property, plant and equipment additions
(8,086)
(12,600)
 
 
Intangible asset additions
(20,482)
(12,041)
 
 
Proceeds on disposition of property, plant and equipment
3,487 
3,259 
 
 
Other, net
(667)
(243)
 
 
Net cash used in investing activities
(701,599)
(97,316)
 
 
Financing activities:
 
 
 
 
Issuances of share capital
7,934 
20,702 
 
 
Share repurchase (note 19)
 
(36,726)
 
 
Dividends paid to stockholders (note 19)
(54,558)
(52,303)
 
 
Dividends paid to NCI
(41)
(3,436)
 
 
Proceeds from short-term debt
6,850 
52,584 
 
 
Repayment of short-term debt
(22,793)
(28,641)
 
 
Proceeds from long-term debt
325,000 
46,572 
 
 
Repayment of long-term debt
(104,729)
(46,568)
 
 
Debt issue costs
(12,624)
(844)
 
 
Repayment of finance lease obligations
(1,565)
(1,282)
 
 
Other, net
(129)
332 
 
 
Net cash provided by (used in) financing activities
143,345 
(49,610)
 
 
Effect of changes in foreign currency rates on cash, cash equivalents, and restricted cash
17,270 
6,656 
 
 
Cash, cash equivalents, and restricted cash:
 
 
 
 
Increase (decrease)
(443,769)
21,151 
 
 
Beginning of period
758,089 
293,246 
 
 
Cash, cash equivalents, and restricted cash, end of period (note 10)
$ 314,320 
$ 314,397 
 
 
General Information
General Information

1.  General information

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 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”).



Significant Accounting Policies
Significant Accounting Policies

2.  Significant accounting policies

(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, 2016, included in the Company’s Annual Report on Form 10-K, filed with the Securities 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:

·

commissions earned at the Company’s auctions through the Company acting as an agent for consignors of equipment and other assets, as well as commissions on online marketplace sales, and

·

fees earned in the process of conducting auctions, including online marketplace listing and inspection fees, fees from value-added services and make-ready activities, as well as fees paid by buyers on online marketplace sales.

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.  For auction or online marketplace sales, revenue is recognized when the auction or online marketplace 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. 



Commissions from sales at the Company’s auctions represent the percentage earned by the Company on the gross auction 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 or purchases inventory to be sold at auction.  Commissions also include those earned on online marketplace sales.

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commission and fee revenues from sales at auction

The Company accepts equipment and other assets on consignment or takes title for a short period of time prior to auction, stimulates buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process.



In its role as auctioneer, the Company matches buyers to sellers of equipment on consignment, as well as to inventory held by the Company, through the auction process. Following the auction, the Company invoices the buyer for the purchase price of the property, collects payment from the buyer, and where applicable, remits to the consignor the net sale proceeds after deducting its commissions, expenses, and applicable taxes. Commissions are calculated as a percentage of the hammer price of the property sold at auction.  Fees 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 is recognized on the date of the auction sale upon the fall of the auctioneer’s hammer, which is the point in time when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. Subsequent to the date of the auction sale, the Company’s remaining obligations for its auction services relate only to the collection of the purchase price from the buyer and the remittance of the net sale proceeds to the seller. These remaining service obligations are not an essential part of the auction services provided by the Company. 



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. In the rare event where a buyer refuses to take title of the property, 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 auction. Historically, cancelled sales have not been material in relation to the aggregate hammer price of property sold at auction. 



Commission revenues are recorded net of commissions owed to third parties, which are principally the result of situations when the commission is shared with a consignor or with the counterparty in an auction guarantee risk and reward sharing arrangement. Additionally, in certain situations, commissions are shared with third parties who introduce the Company to consignors who sell property at auction.



Underwritten commission contracts can take the form of guarantee or inventory 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 (note 21). 



Revenues related to inventory contracts are 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, including, but not limited to, delivery of the property. Revenue from inventory sales is presented net of costs within revenues on the consolidated income statement, as the Company takes title only for a short period of time and the risks and rewards of ownership are not substantially different than the Company’s other underwritten commission contracts. 

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commissions and fees on online marketplace sales

Through its online marketplaces, the Company typically sells equipment or other assets on consignment from sellers and stimulates buyer interest through sales and marketing techniques in order to match online marketplace sellers with buyers. Prior to offering an item for sale on its online marketplaces, the Company performs required inspections, title and lien searches, and make-ready activities to prepare the item for sale. 



Online marketplace revenues are primarily driven by seller commissions, fees charged to sellers for listing and inspecting equipment, and amounts paid by buyers, including buyer transaction fees and buyer’s premiums. The Company also generates revenue from related online marketplace services including make-ready activities, logistics coordination, storage, private auction hosting, and asset appraisals. Online marketplace sale commission and fee revenues are recognized when the sale is complete, which is generally at the conclusion of the marketplace transaction between the seller and buyer. This occurs when a buyer has become legally obligated to pay the purchase price and buyer transaction fee for an asset that the seller is obligated to relinquish in exchange for the sales price less seller commissions and listing fees. At that time, the Company has substantially performed what it must do to be entitled to receive the benefits represented by its commissions and fees.



Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and the buyer transaction fee or buyer’s premium, collects payment from the buyer, and remits the proceedsnet of the seller commissions, listing fees, and applicable taxesto the seller. The Company notifies the seller when the buyer payment has been received in order to clear release of the equipment or other asset to the seller. These remaining service obligations are not viewed to be an essential part of the services provided by the Company.



Under the Company’s standard terms and conditions, it is not obligated to pay the seller for items in an online marketplace sale in which the buyer has not paid for the purchased item. If the buyer defaults on its payment obligation, the equipment or other assets may be returned to the seller or moved into a subsequent online marketplace event.



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. This provision is related to settlement 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.  



For guarantee contracts, if actual online marketplace sale proceeds are less than the guaranteed amount, the commission earned is reduced; if proceeds are sufficiently lower, the Company may incur a loss on the sale. If such consigned equipment sells above the minimum price, the Company may be entitled to a share of the excess proceeds as negotiated with the seller. The Company’s share of the excess, if any, is recorded in revenue together with the related online marketplace sale commission. Losses, if any, resulting from guarantee contracts are recorded in revenue in the period in which the relevant online marketplace sale was 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 (note 21). 

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commissions and fees on online marketplace sales (continued)

For inventory contracts related to online marketplace sales, revenue from the sale of inventory through the Company’s online marketplaces are recorded net of acquisition costs because the acquisition of equipment in advance of an online marketplace sale is an ancillary component of the Company’s business and, in general, the risks and rewards of ownership are not substantially different than the Company’s other guarantee contracts. Since the online marketplace sale business is a net business, gross sales proceeds are not reported as revenue in the consolidated income statement. Rather, the net commission earned from online marketplace sales is reported as revenue, which reflects the Company’s agency relationship between buyers and sellers of equipment.



Other fees

Fees from value-added services include financing, appraisal, and technology service fees. Fees are recognized in the period in which the service is provided to the customer.   



(c)

 Costs of services, excluding depreciation and amortization expenses

Costs of services are comprised of expenses incurred in direct relation to conducting auctions (“direct expenses”), earning online marketplace revenues, and earning other fee revenues. Direct expenses include direct labour, buildings and facilities charges, and travel, advertising and promotion costs.



Costs of services incurred to earn online marketplace revenues include inspection costs, facilities costs, inventory management, referral, sampling, and appraisal fees.  Inspections are generally performed at the seller’s physical location. The cost of inspections include 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 revenues also include costs for the Company’s customer support, online marketplace operations, logistics, title and lien investigation functions,  and lease and operations costs related to the Company’s third-party data centers at which its websites are hosted.



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

 

(d)

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

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 Company also has a senior executive PSU plan that provides for the award of PSUs to selected senior executives 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 using a binomial model.



2.  Significant accounting policies (continued)

(d)   Share-based payments (continued)

Equity-classified share-based payments (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.



Any consideration paid on exercise of the stock options is credited to the common shares.  Dividend equivalents on the equity-classified PSUs are recognized as a reduction to retained earnings over the service period.



PSUs awarded under the senior executive and employee PSU plans (described in note 20) are contingently redeemable in cash in the event of death of the participant. The contingently redeemable portion of the senior executive PSU awards, which represents the amount that would be redeemable based on the conditions at the date of grant, to the extent attributable to prior service, is recognized as temporary equity. The balance reported in temporary equity increases on the same basis as the related compensation expense over the service period of the award, with any excess of the temporary equity value over the amount recognized in compensation expense charged against retained earnings.  In the event it becomes probable an award is going to become eligible for redemption by the holder, the award would be reclassified to a liability award.



Liability-classified share-based payments

The Company maintains other share unit compensation plans that vest over a period of up to five 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 using the volume weighted average price of the Company’s common shares for the twenty days 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 20. 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 non-current liabilities.



(e)

Restricted cash

In certain jurisdictions, local laws require the Company to hold cash in segregated bank accounts, which are used to settle auction proceeds payable resulting from auctions and online marketplace sales conducted in those regions. In addition, the Company also holds cash generated from its EquipmentOne online marketplace sales in separate escrow accounts, for settlement of the respective online marketplace transactions as a part of its secured escrow service. Restricted cash balances also include funds held in accounts owned by the Company in support of short-term stand-by letters of credit to provide seller security.



2.  Significant accounting policies (continued)

(e)   Restricted cash (continued)

During the period from December 21, 2016 through May 31, 2017, non-current restricted cash consisted of funds held in escrow pursuant to the offering of senior unsecured notes (note 18), which were only available when the Company received approval to acquire IronPlanet Holdings, Inc. (“IronPlanet”) and whose use was restricted to the funding of the IronPlanet acquisition (note 22).



(f)

Inventories

Inventory consists of equipment and other assets purchased for resale in an upcoming Company auction or online marketplace event. 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. 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. The specific identification method is used to determine amounts removed from inventory. Write-downs to the carrying value of inventory are recorded in revenue in the consolidated income statement.



(g)

Intangible assets

Intangible assets are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes all expenditures that are directly attributable to the acquisition or development of the asset, net of any amounts received in relation to those assets, including scientific research and experimental development tax credits. Costs of internally developed software are amortized on a straight-line basis over the remaining estimated economic life of the software product. Costs related to software incurred prior to establishing technological feasibility or the beginning of the application development stage of software are charged to operations as such costs are incurred.  Once technological feasibility is established or the application development stage has begun, directly attributable costs are capitalized until the software is available for use.



Amortization is recognized in net earnings on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful lives are:



 

 

 

 



 

 

 

 

Asset

Basis

 

Rate / term

 

Trade names and trademarks

Straight-line

 

3 - 15 years or indefinite-lived

 

Customer relationships

Straight-line

 

6 - 20 years

 

Software assets

Straight-line

 

3 - 7 years

 



Customer relationships includes relationships with buyers and sellers.



(h)

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.





2.  Significant accounting policies (continued)

(h)   Goodwill (continued)

Where 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.



(i)

Early adoption of new accounting pronouncements

(i)

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Entities still have the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. Where an annual or interim quantitative impairment test is necessary, there is only one step, which is to compare the fair value of a reporting unit with its carrying value. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit.



ASU 2017-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments are applied on a prospective basis. Because the amendments reduce the cost and complexity of goodwill impairment testing, the Company has early adopted ASU 2017-04 in the first quarter of 2017.



(ii)

In June 2017, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies that the effects of a modification should be accounted for unless all the following criteria are met:

1.

The fair value (or calculated or intrinsic value, as appropriate) of the modified award is the same as the fair value (or calculated or intrinsic value, as appropriate) of the original award immediately before the modification. The value immediately before and after the modification does not have to be estimated if the modification does affect any of the inputs to the valuation technique used to value the award.

2.

The modified award’s vesting conditions are the same as those of the original award immediately before the modification.

3.

The classification of the modified award as an equity or liability instrument is the same as the original award’s classification immediately before the modification.

Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.



2.  Significant accounting policies (continued)

(j)

 New and amended accounting standards

(i)

Effective January 1, 2017, the Company adopted ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which impacts entities that are issuers of or investors in debt instruments – or hybrid financial instruments determined to have a debt host – with embedded call (put) options. One of the criteria for bifurcating an embedded derivative is assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to those of their debt hosts. The amendments of ASU 2016-06 clarify the steps required in making this assessment for contingent call (put) options that can accelerate the payment of principal on debt instruments. Specifically, ASU 2016-06 requires the call (or put) options to be assessed solely in accordance with a four-step decision sequence. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the triggering event is related to interest rates or credit risks. The standard was applied on a modified retrospective basis to existing debt instruments as of January 1, 2017. Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.



(ii)

Effective January 1, 2017, the Company adopted ASU 2016-09,  Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires an entity to recognize share-based payment (“SBP”) award income tax effects in the consolidated income statement when the awards vest or are settled. Consequently, the requirement for entities to track additional paid-in capital (“APIC”) pools is eliminated. Other amendments include:

·

All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the consolidated income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. Excess tax benefits are recognized regardless of whether the benefit reduces taxes payable in the current period. These amendments were applied prospectively.

·

Because excess taxes no longer flow through APIC, when applying the treasury stock method in calculating diluted earnings per share (“EPS”), the assumed proceeds will no longer include any estimated excess taxes. Excess tax benefits increase assumed proceeds, which results in more hypothetical shares being reacquired. The incremental number of dilutive shares for diluted EPS is calculated as the number of shares from the assumed exercise of the stock less the hypothetical shares reacquired. Therefore, removing excess tax benefits

from the equation results in fewer hypothetical shares being reacquired, increasing the incremental number of dilutive shares.

·

Excess tax benefits are classified along with other income tax cash flows as an operating activity in the statement of cash flows. The Company elected to apply this amendment prospectively.

·

An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. Since forfeiture rates of the Company’s stock awards have historically been nominal and represent an insignificant assumption used in management’s estimate of the fair value of those awards, the Company has elected to account for forfeitures as they occur. This accounting policy change was applied on a modified retrospective basis and did not have an impact on the Company’s consolidated financial statements.

·

The threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions. This amendment was applied on a modified retrospective basis.

·

Cash paid by an employer when directly withholding shares for tax-withholding purposes is classified as a financing activity in the statement of cash flows. This amendment was applied prospectively.

Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

2.  Significant accounting policies (continued)

(k)

   Recent accounting standards not yet adopted

(i)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In particular, it moves away from the current industry and transaction specific requirements. ASU 2014-09 creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include: 

1.

Identifying the contract(s) with the customer,

2.

Identifying the separate performance obligations in the contract,

3.

Determining the transaction price,

4.

Allocating the transaction price to the separate performance obligations, and

5.

Recognizing revenue as each performance obligation is satisfied.

The amendments also contain extensive disclosure requirements designed to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB delayed the effective date of ASU 2014-09 by one year so that ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. ASU 2014-09 permits the use of either the retrospective or modified retrospective (cumulative effect) transition method.



In 2015, the Company established a global new revenue accounting standard adoption team, consisting of financial reporting and accounting advisory representatives from across all geographical regions and business operations (the “Team”). The Team developed an adoption framework that continues to be used as guidance in identifying the Company’s significant contracts with customers. In 2016, the Team commenced its analysis, with the initial focus being on the impact of the amendments on accounting for the Company’s straight commission contracts, underwritten (inventory and guarantee) commission contracts, and ancillary service contracts. The Team is currently in the process of identifying the appropriate changes to our business processes, systems, and controls required to adopt the amendments based on preliminary findings.



Since its inception, the Team has regularly reported the findings and progress of the adoption project to management and the Audit Committee. Based on these findings and analysis, management has determined that the Company will not early adopt ASU 2014-09. The Company had previously planned on using a modified retrospective (cumulative-effect) method of adoption. The reason for not early adopting and for electing to use a modified retrospective method was primarily due to the Company’s acquisition of IronPlanet Holdings, Inc. (“IronPlanet”) on May 31, 2017.  The IronPlanet acquisition added complexity to applying the amendments retrospectively, and as such, the modified retrospective method of adoption was chosen.



As the Team continues to make progress in its adoption project, it now believes that it will be able to adopt ASU 2014-09 using a full retrospective method, which it anticipates will provide more useful comparative information to financial statement users. The Company also continues to evaluate recently issued guidance on practical expedients as part of the adoption method decision.



2.  Significant accounting policies (continued)

(k)   Recent accounting standards not yet adopted (continued)

The Team concluded that one of the most significant impacts of the adoption of ASU 2014-09 will be a change in the presentation of revenue from the majority of inventory, ancillary service, and Ritchie Bros. Logistical Services contracts as gross as a principal versus net as an agent.  The Team’s analysis of these significant contracts with customers was aided by the FASB issuing ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations, focusing on whether an entity controls a specified good or service before that good or service is transferred to a customer.



SEC Regulation S-X Rule 5-03.1 requires revenue from the sale of tangible products to be presented as a separate line item of the face of the consolidated income statement from revenues from services where income from one or both of those classes is more than 10 percent the sum of total revenues. Similarly, SEC Regulation Rule 5-03.2 requires the costs related to those revenue classes to be presented in the same manner. Based on historical information, the Team expects revenue from inventory contracts that are recognized gross as a principal selling tangible products to exceed 10 percent of total revenues.



Presenting most inventory contract revenues gross as a principal selling a tangible product versus net as an agent providing a service will significantly change the face of the Company’s consolidated income statement. Currently, all revenue from inventory sales is presented net of costs within service revenues on the income statement. After ASU 2014-09 is adopted, service revenues will exclude revenue from inventory sales and cost of inventory sold for inventory contracts recorded on a gross basis. Those amounts will instead be presented gross as separate line items on the face of the consolidated income statement in accordance with SEC Regulation S-X Rules 5-03.1 and 5-03.2. Ancillary service revenues will be presented within service revenues, but on a gross basis, with ancillary service costs presented separately within costs of services.



The Team, together with oversight from the Audit Committee, will also continue to closely monitor FASB activity related to ASU 2014-09 to conclude on specific interpretative issues. Over the remaining term until ASU 2014-09 takes effect, the Team will complete its assessment of the impact of the new standard on remaining contracts with customers, as well as evaluate the impact on financial statement disclosures and processes that capture information required for the revised financial statement presentation. The Team will also continue to work with management to determine the impact of the change in presentation on the key performance metrics used to evaluate operational performance of the Company.



Expected impact to reported results

While continuing to assess all potential impacts of adoption of ASU 2014-09, the Team’s current analysis indicates that the most significant change will be the gross versus net presentation described above. This presentation is expected to increase the amount of revenue reported compared to the current presentation. Presenting these revenues gross as a principal versus net as an agent has no impact on operating income. The Company expects the effects of this change to be as follows:





2.  Significant accounting policies (continued)

(k)  Recent accounting standards not yet adopted (continued)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



As reported

 

 

New revenue standard

Three months ended September 30,

2017 

 

2016 

 

Three months ended September 30,

2017

2016



 

 

 

 

 

 

Revenue from inventory sales

$

82,213 

 

$

176,381 



 

 

 

 

 

 

Service revenues

 

145,843 

 

 

124,595 

Revenues

$

141,047 

 

$

128,876 

 

Total revenues

 

228,056 

 

 

300,976 



 

 

 

 

 

 

Cost of inventory sold

 

(73,131)

 

 

(159,850)

Costs of services, excluding

 

 

 

 

 

 

 

 

 

 

 

 

depreciation and amortization ("D&A")

 

(19,583)

 

 

(14,750)

 

Costs of services, excluding D&A

 

(33,461)

 

 

(27,000)



$

121,464 

 

$

114,126 

 

Gross profit

$

121,464 

 

$

114,126 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



As reported

 

 

New revenue standard

Nine months ended September 30,

2017 

 

2016 

 

Nine months ended September 30,

2017

2016



 

 

 

 

 

 

Revenue from inventory sales

$

238,515 

 

$

411,970 



 

 

 

 

 

 

Service revenues

 

442,474 

 

 

420,177 

Revenues

$

431,732 

 

$

419,626 

 

Total revenues

 

680,989 

 

 

832,147 



 

 

 

 

 

 

Cost of inventory sold

 

(209,151)

 

 

(376,364)

Costs of services, excluding D&A

 

(53,987)

 

 

(49,821)

 

Costs of services, excluding D&A

 

(94,093)

 

 

(85,978)



$

377,745 

 

$

369,805 

 

Gross profit

$

377,745 

 

$

369,805 



(i)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize almost all leases, including operating leases, on the balance sheet through a right-of-use asset and a corresponding lease liability. For short-term leases, defined as those with a term of 12 months or less, the lessee is permitted to make an accounting policy election not to recognize the lease assets and liabilities, and instead recognize the lease expense generally on a straight-line basis over the lease term. The accounting treatment under this election is consistent with current operating lease accounting. No extensive amendments were made to lessor accounting, but amendments of note include changes to the definition of initial direct costs and accounting for collectability uncertainties in a lease.



ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Both lessees and lessors must apply ASU 2016-02 using a “modified retrospective transition”, which reflects the new guidance from the beginning of the earliest period presented in the financial statements. However, lessees and lessors can elect to apply certain practical expedients on transition. 



Management continues to perform a detailed inventory and analysis of all the Company’s leases, of which there are approximately 395 operating and 90 finance leases for which the Company is a lessee at the reporting date. The most significant operating leases in terms of the amount of rental charges and duration of the contract are for various auction sites and offices located in North America, Europe, the Middle East, and Asia. However, in terms of the number of leases, the majority consist of leases for computer, automotive, and yard equipment.

2.  Significant accounting policies (continued)

(k)  Recent accounting standards not yet adopted (continued)

The Company continues to evaluate the new guidance to determine the impact it will have on its consolidated financial statements. Under the expectation that the majority, if not all, of the operating leases will be brought onto the Company’s balance sheet on adoption of ASU 2016-02, management is also investigating the functionality within the Company’s systems to automate the lease accounting process.



The adoption of ASU 2016-02 is expected to add complexity to the accounting for leases, as well as require extensive system and process changes to manage the large number of operating leases that the Company anticipates will be brought onto its balance sheet. As a result, management has determined that the Company will not early adopt ASU 2016-02, and will continue to evaluate the elections available to the Company involving the application of practical expedients on transition.



(ii)

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, focusing on whether an entity controls a specified good or service before that good or service is transferred to a customer. Where such control exists – i.e. where the entity is required to provide the specified good or service itself – the entity is a ‘principal’. Where the entity is required to arrange for another party to provide the good or service, it is an agent.



The effective date and transition requirements of ASU 2016-08 are the same as for ASU 2014-09, which is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The impact of adoption of ASU 2016-08 on the Company’s consolidated financial statements has been considered as part of the ASU 2014-09 adoption project discussed above.



(iii)

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.



(iv)

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, whose amendments provide a screen to determine when an integrated set of assets and activities does not constitute a business as defined by Topic 805. Specifically, the amendments require that a set is not a business when substantially all the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets. This screen reduces the number of transactions that need to be further evaluated and as such, it is anticipated that more acquisitions will be accounted for as asset acquisitions rather than business combinations. If the screen is not met, the amendments:

1)

Require that the set must, at a minimum, include an input and a substantive process that together significantly contribute to the ability to create an output in order to be considered a business; and

2)

Remove the evaluation of whether a market participant could replace missing elements.

2.  Significant accounting policies (continued)

(k)   Recent accounting standards not yet adopted (continued)

The amendments also provide a framework to assist in evaluating whether both an input and a substantive process are present, and this framework includes two sets of criteria to consider that depend on whether a set has outputs. Finally, the amendments narrow the definition of the term “output” so the term is consistent with how outputs are described in Topic 606 Revenue from Contracts with Customers.  



ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The amendments are applied prospectively on or after the effective date. No disclosures are required at transition. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.



(v)

In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope of Subtopic 610-20 and adds clarity around accounting for partial sales of nonfinancial assets and the identification of, allocation of consideration to, and derecognition of distinct nonfinancial assets. The amendments also define ‘in substance nonfinancial assets’, which are within the scope of Subtopic 610-20, and clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty.



ASU 2017-05 is effective at the same time as ASU 2014-09, which is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in ASU 2017-05 must be applied at the same time as the amendments in ASU 2014-09. Entities may elect to apply these amendments retrospectively to each period presented in the financial statements or using a modified retrospective basis as of the beginning of the fiscal year of adoption. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.



Significant Judgments, Estimates and Assumptions
Significant Judgments, Estimates and Assumptions

3.  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. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstance 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, deferred income taxes, reserves for tax uncertainties, and other contingencies.



Seasonality of Operations
Seasonality of Operations

4.  Seasonality of operations

The Company's operations are both seasonal and event driven. Revenues tend to be highest during the second and fourth calendar quarters.  The Company generally conducts more 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.



Segmented Information
Segmented Information

5.  Segmented information

The Company’s principal business activity is the management and disposition of used industrial equipment and other durable assets. During the three months ended September 30, 2017, the Company continued to integrate its IronPlanet acquisition, which resulted in changes in the basis of organization of the Company, including its leadership structure, sales processes, and management reporting. Most significantly, the Chief Operating Decision Maker (“CODM”) began to assess the performance of the business and allocate resources based on whether the Company’s services are transactional (generating value from the disposition of assets) or non-transactional in nature, and redesigned key metrics accordingly.



These changes resulted in the identification of the following new operating segments as of September 30, 2017:

·

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;

·

Ritchie Bros. Financial Services (“RBFS”) – This is the Company’s financial brokerage service, which is reported within the “other” category; and

·

Mascus – This is the Company’s online listing service, which is reported within the “other” category.

The “other” category also includes 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, 2017

 

 

Nine months ended September 30, 2017



Auctions and Marketplaces

 

Other

 

Consolidated

 

Auctions and Marketplaces

 

Other

 

Consolidated

 

Revenues

$

130,242 

 

$

10,805 

 

$

141,047 

 

$

400,565 

 

$

31,167 

 

$

431,732 

 

Costs of services, excluding D&A

 

(18,383)

 

 

(1,200)

 

 

(19,583)

 

 

(51,948)

 

 

(2,039)

 

 

(53,987)

 

Selling, general and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      ("SG&A") expenses

 

(81,964)

 

 

(3,371)

 

 

(85,335)

 

 

(220,555)

 

 

(9,732)

 

 

(230,287)

 

Impairment loss

 

 -

 

 

 -

 

 

 -

 

 

(8,911)

 

 

 -

 

 

(8,911)

 

Segment profit

$

29,895 

 

$

6,234 

 

$

36,129 

 

$

119,151 

 

$

19,396 

 

$

138,547 

 

Acquisition-related costs

 

 

 

 

 

 

 

(3,587)

 

 

 

 

 

 

 

 

(35,162)

 

D&A expenses

 

 

 

 

 

 

 

(14,837)

 

 

 

 

 

 

 

 

(37,047)

 

Gain on disposition of Property, plant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      and equipment ("PPE")

 

 

 

 

 

 

 

42 

 

 

 

 

 

 

 

 

1,071 

 

Foreign exchange gain (loss)

 

 

 

 

 

 

 

(816)

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

$

16,931 

 

 

 

 

 

 

 

$

67,416 

 

Other expense

 

 

 

 

 

 

 

(9,966)

 

 

 

 

 

 

 

 

(20,965)

 

Income tax recovery (expense)

 

 

 

 

 

 

 

3,358 

 

 

 

 

 

 

 

 

(7,982)

 

Net income

 

 

 

 

 

 

$

10,323 

 

 

 

 

 

 

 

$

38,469 

 

5.Segmented information (continued)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended September 30, 2016

 

 

Nine months ended September 30, 2016



Auctions and Marketplaces

 

Other

 

Consolidated

 

Auctions and Marketplaces

 

Other

 

Consolidated

 

Revenues

$

121,111 

 

$

7,765 

 

$

128,876 

 

$

395,228 

 

$

24,398 

 

$

419,626 

 

Costs of services, excluding D&A

 

(14,493)

 

 

(257)

 

 

(14,750)

 

 

(49,213)

 

 

(608)

 

 

(49,821)

 

SG&A expenses

 

(65,346)

 

 

(2,947)

 

 

(68,293)

 

 

(200,967)

 

 

(8,428)

 

 

(209,395)

 

Impairment loss

 

(28,243)

 

 

 -

 

 

(28,243)

 

 

(28,243)

 

 

 -

 

 

(28,243)

 

Segment profit

$

13,029 

 

$

4,561 

 

$

17,590 

 

$

116,805 

 

$

15,362 

 

$

132,167 

 

Acquisition-related costs

 

 

 

 

 

 

 

(5,398)

 

 

 

 

 

 

 

 

(7,198)

 

D&A expenses

 

 

 

 

 

 

 

(10,196)

 

 

 

 

 

 

 

 

(30,560)

 

Gain on disposition of PPE

 

 

 

 

 

 

 

570 

 

 

 

 

 

 

 

 

1,017 

 

Foreign exchange loss

 

 

 

 

 

 

 

(281)

 

 

 

 

 

 

 

 

(332)

 

Operating income

 

 

 

 

 

 

$

2,285 

 

 

 

 

 

 

 

$

95,094 

 

Other income (expense)

 

 

 

 

 

 

 

(105)

 

 

 

 

 

 

 

 

420 

 

Income tax expense

 

 

 

 

 

 

 

(7,180)

 

 

 

 

 

 

 

 

(29,929)

 

Net income (loss)

 

 

 

 

 

 

$

(5,000)

 

 

 

 

 

 

 

$

65,585 

 



The carrying value of goodwill of $648,819,000 has been allocated to Auctions and Marketplaces and $20,827,000 has been allocated to other. As in prior periods, the CODM does not evaluate the performance of its operating segments based on segment assets and liabilities, nor does the Company classify liabilities on a segmented basis.



a

Revenues
Revenues

6Revenues

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



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Commissions

$

97,683 

 

$

96,110 

 

$

310,007 

 

$

314,084 

 

Fees

 

43,364 

 

 

32,766 

 

 

121,725 

 

 

105,542 

 



$

141,047 

 

$

128,876 

 

$

431,732 

 

$

419,626 

 



Net profits on inventory sales included in commissions are:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Revenue from inventory sales

$

93,275 

 

$

176,381 

 

$

255,156 

 

$

411,970 

 

Cost of inventory sold

 

(82,733)

 

 

(159,850)

 

 

(222,956)

 

 

(376,364)

 



$

10,542 

 

$

16,531 

 

$

32,200 

 

$

35,606 

 



Operating Expenses
Operating Expenses

7Operating expenses

Certain prior period operating expenses have been reclassified to conform with current year presentation.



Costs of services, excluding depreciation and amortization



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Employee compensation expenses

$

10,032 

 

$

6,593 

 

$

24,321 

 

$

21,731 

 

Buildings, facilities and technology expenses

 

1,872 

 

 

1,709 

 

 

5,819 

 

 

6,015 

 

Travel, advertising and promotion expenses

 

5,562 

 

 

4,991 

 

 

17,644 

 

 

18,287 

 

Other costs of services

 

2,117 

 

 

1,457 

 

 

6,203 

 

 

3,788 

 



$

19,583 

 

$

14,750 

 

$

53,987 

 

$

49,821 

 



SG&A expenses



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Employee compensation expenses

$

55,560 

 

 

42,370 

 

$

147,420 

 

$

133,370 

 

Buildings, facilities and technology expenses

 

13,494 

 

 

12,466 

 

 

39,083 

 

 

36,671 

 

Travel, advertising and promotion expenses

 

8,431 

 

 

6,273 

 

 

21,218 

 

 

18,595 

 

Professional fees

 

3,381 

 

 

3,675 

 

 

9,705 

 

 

9,524 

 

Other SG&A expenses

 

4,469 

 

 

3,509 

 

 

12,861 

 

 

11,235 

 



$

85,335 

 

$

68,293 

 

$

230,287 

 

$

209,395 

 





7.  Operating expenses (continued)

Acquisition-related costs



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

IronPlanet: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Stock option compensation

 

 

 

 

 

 

 

 

 

 

 

 

expense (note 20)

$

 -

 

$

 -

 

$

4,752 

 

$

 -

 

Legal costs

 

248 

 

 

2,264 

 

 

8,843 

 

 

2,264 

 

Other acquisition-related costs

 

2,464 

 

 

2,250 

 

 

18,996 

 

 

2,250 

 

Mascus: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

126 

 

 

262 

 

 

404 

 

 

701 

 

Other acquisition-related costs

 

 -

 

 

 -

 

 

22 

 

 

749 

 

Xcira:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

447 

 

 

305 

 

 

1,112 

 

 

917 

 

Petrowsky: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

134 

 

 

140 

 

 

554 

 

 

140 

 

Other acquisition-related costs

 

 -

 

 

177 

 

 

 

 

177 

 

Kramer: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

122 

 

 

 -

 

 

351 

 

 

 -

 

Other acquisition-related costs

 

 -

 

 

 -

 

 

78 

 

 

 -

 

Other

 

46 

 

 

 -

 

 

47 

 

 

 -

 



$

3,587 

 

$

5,398 

 

$

35,162 

 

$

7,198 

 



Depreciation and amortization expenses



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Depreciation expense

$

7,228 

 

$

7,751 

 

$

20,813 

 

$

23,466 

 

Amortization expense

 

7,609 

 

 

2,445 

 

 

16,234 

 

 

7,094 

 



$

14,837 

 

$

10,196 

 

$

37,047 

 

$

30,560 

 



Impairment loss

The Company did not record an impairment loss during the three months ended September 30, 2017. During the three months ended June 30, 2017, management identified indicators of impairment on certain software and software under development intangible assets (the “technology assets”). The indicators consisted of decisions made after the acquisition of IronPlanet that adversely impacted the extent or manner in which certain technology assets would be utilized. As part of its integration activities the Company determined that it was more likely than not that certain technology assets would not be utilized or developed as originally intended and no longer had value. As a result, management performed an impairment test that resulted in the recognition of an impairment loss of $8,911,000 on the technology assets.  

During the three months ended September 30, 2016, the Company recorded an impairment loss on the EquipmentOne reporting unit goodwill of $23,574,000 and a pre-tax impairment loss on the EquipmentOne reporting unit customer relationships of $4,669,000.

Income Taxes
Income Taxes



8Income 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.



The Company’s consolidated effective tax rate in respect of operations for the three and nine months ended September 30, 2017 was -48.2% and 17.2%, respectively (2016:  329.4% and 31.3%). 



Earnings Per Share Attributable to Stockholders
Earnings Per Share Attributable to Stockholders

9.  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. Diluted EPS attributable to stockholders was calculated by dividing the net income attributable to stockholders after giving effect to outstanding dilutive stock options and PSUs by the WA number of shares outstanding adjusted for all dilutive securities.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30, 2017

 

September 30, 2017



 

Net income

 

WA

 

 

 

 

 

Net income

 

WA

 

 

 



 

attributable to

 

number

 

 

Per share

 

 

attributable to

 

number

 

 

Per share



 

stockholders

 

of shares

 

 

amount

 

 

stockholders

 

of shares

 

 

amount

Basic

$

10,261 

 

107,120,618 

 

$

0.10 

 

$

38,273 

 

106,993,358 

 

$

0.36 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PSUs

 

 -

 

214,304 

 

 

 -

 

 

(50)

 

337,570 

 

 

 -

Stock options

 

 -

 

843,381 

 

 

(0.01)

 

 

 -

 

738,696 

 

 

(0.01)

Diluted

$

10,261 

 

108,178,303 

 

$

0.09 

 

$

38,223 

 

108,069,624 

 

$

0.35 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30, 2016

 

September 30, 2016



 

Net loss

 

WA

 

 

 

 

 

Net income

 

WA

 

 

 



 

attributable to

 

number

 

 

Per share

 

 

attributable to

 

number

 

 

Per share



 

stockholders

 

of shares

 

 

amount

 

 

stockholders

 

of shares

 

 

amount

Basic

$

(5,137)

 

106,622,376 

 

$

(0.05)

 

$

63,979 

 

106,595,088 

 

$

0.60 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PSUs

 

 -

 

81,610 

 

 

 -

 

 

 -

 

27,203 

 

 

 -

Stock options

 

 -

 

821,065 

 

 

 -

 

 

 -

 

599,099 

 

 

 -

Diluted

$

(5,137)

 

107,525,051 

 

$

(0.05)

 

$

63,979 

 

107,221,390 

 

$

0.60 



In respect of PSUs awarded under the sign-on grant PSUs, and the senior executive and employee PSU plans (described in note 20), performance and market conditions, depending on their outcome at the end of the contingency period, can reduce the number of vested awards to nil or to a maximum of 200% of the number of outstanding PSUs. For the three and nine months ended September 30, 2017, no PSUs to purchase common shares were outstanding but excluded from the calculation of diluted EPS attributable to stockholders as they were anti-dilutive (2016: 253,646 and 231,671). For the three and nine months ended September 30, 2017, stock options to purchase 901,969 and 585,257 common shares, respectively, were outstanding but excluded from the calculation of diluted EPS attributable to stockholders as they were anti-dilutive (2016: nil and 1,002,929).

Supplemental Cash Flow Information
Supplemental Cash Flow Information

10. Supplemental cash flow information



 

 

 

 

 

 



 

 

 

 

 

 

Nine months ended September 30,

 

2017 

 

 

2016 

 

Trade and other receivables

 

(139,411)

 

 

(129,980)

 

Inventory

 

(16,460)

 

 

15,257 

 

Advances against auction contracts

 

601 

 

 

914 

 

Prepaid expenses and deposits

 

4,498 

 

 

(774)

 

Income taxes receivable

 

(8,062)

 

 

(3,387)

 

Auction proceeds payable

 

186,147 

 

 

172,273 

 

Trade and other payables

 

(9,451)

 

 

(5,331)

 

Income taxes payable

 

(3,075)

 

 

(9,410)

 

Share unit liabilities

 

(5,848)

 

 

2,413 

 

Other

 

1,608 

 

 

(4,995)

 

Net changes in operating

 

 

 

 

 

 

assets and liabilities

$

10,547 

 

$

36,980 

 





 

 

 

 

 

 



 

 

 

 

 

 

Nine months ended September 30,

 

2017 

 

 

2016 

 

Interest paid, net of interest capitalized

$

20,233 

 

$

3,859 

 

Interest received

 

2,460 

 

 

1,353 

 

Net income taxes paid

 

28,037 

 

 

44,869 

 



 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

Non-cash purchase of property, plant

 

 

 

 

 

 

and equipment under capital lease

 

6,851 

 

 

1,009 

 





 

 

 

 

 

 



 

 

 

 

 

 



 

September 30,

 

 

December 31,

 



 

2017 

 

 

2016 

 

Cash and cash equivalents

$

224,474 

 

$

207,867 

 

Restricted cash:

 

 

 

 

 

 

Current

 

89,846 

 

 

50,222 

 

Non-current

 

 -

 

 

500,000 

 

Cash, cash equivalents, and restricted cash

$

314,320 

 

$

758,089 

 



On December 21, 2016, the Company completed the offering of $500,000,000 aggregate principal amount of 5.375% senior unsecured notes due January 15, 2025 (note 18). Upon the closing of the offering, the gross proceeds from the offering were deposited in to an escrow account. The funds were released from escrow upon the closing of the acquisition of IronPlanet (note 22).  



10. Supplemental cash flow information (continued)

In the fourth quarter of 2016, Company early adopted ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash,  which requires that the change in the total of cash, cash equivalents, and restricted cash during a reporting period be explained in the Statement of Cash Flows (“SCF”). Therefore, the Company has included its restricted cash balances when reconciling the total beginning and end of period amounts shown on the face of the SCF. The effect of this change is detailed below.



 

 

 

 



 

 

 

 

Nine months ended September 30,

 

2016 

 

 

Net changes in operating assets and liabilities:

 

 

 

 

As reported

$

38,982 

 

 

Current presentation

 

36,980 

 

 

Net cash provided by operating activities:

 

 

 

 

As reported

 

163,423 

 

 

Current presentation

 

161,421 

 

 

Effect of changes in foreign currency rates on cash:

 

 

 

 

As reported

 

4,339 

 

 

Current presentation

 

6,656 

 

 

Increase (decrease) in cash:

 

 

 

 

As reported

 

20,836 

 

 

Current presentation

 

21,151 

 

 

Cash and cash equivalents

 

230,984 

 

 

Total cash, cash equivalents and restricted cash

$

314,397 

 

 



Fair Value Measurement
Fair Value Measurement

11Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the condensed 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.

11.  Fair value measurement (continued)



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

September 30, 2017

 

 

December 31, 2016



 

Category

 

Carrying amount

 

 

Fair value

 

 

Carrying amount

 

 

Fair value

Fair values disclosed, recurring:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

Level 1

$

224,474 

 

$

224,474 

 

$

207,867 

 

$

207,867 

Restricted cash

 

Level 1

 

89,846 

 

 

89,846 

 

 

550,222 

 

 

550,222 

Short-term debt (note 18)

 

Level 2

 

8,567 

 

 

8,567 

 

 

23,912 

 

 

23,912 

Long-term debt (note 18)

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured notes

 

Level 1

 

486,886 

 

 

526,875 

 

 

495,780 

 

 

509,500 

Revolving loans

 

Level 2

 

 -

 

 

 -

 

 

99,926 

 

 

99,926 

Delayed draw term loans

 

Level 2

 

330,999 

 

 

335,447 

 

 

 -

 

 

 -





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, short term debt, and revolving loans approximate their fair values due to their short terms to maturity. The carrying value of the delayed draw term loan, before deduction of deferred debt issue costs, approximates its 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.

Inventory
Inventory

12Inventory

At each period end, inventory is reviewed to ensure that it is recorded at the lower of cost and net realizable value. During the three and nine months ended September 30, 2017, the Company recorded an inventory write-down of $122,000 and $778,000, respectively (2016:  $882,000 and $2,284,000).



Of inventory held at September 30, 2017, 100% is expected to be sold prior to the end of December 2017 (December 31, 2016:  93% sold by the end of March 2017 with the remainder sold by the end of June 2017).



Assets Held For Sale
Assets Held For Sale

13Assets held for sale 



 

 

 

 



 

 

 

 

Balance, December 31, 2016

 

 

$

632 

Reclassified from property, plant and equipment 

 

 

 

411 

Disposal

 

 

 

(389)

Balance, September 30, 2017

 

 

$

654 



In March 2017, the Company sold excess auction site acreage in Orlando, United States, for net proceeds of $953,000 resulting in a gain of $564,000.  



As at September 30, 2017, the Company’s assets held for sale consisted of excess auction site acreage located in Denver and Kansas City, United States, and Truro, Canada. Management made the strategic decision to sell this excess acreage to maximize the Company’s return on invested capital. The properties have been actively marketed for sale, and management expects the sales to be completed within 12 months of September 30, 2017. This land belongs to the Auctions and Marketplaces reportable segment.







Property, Plant and Equipment
Property, Plant and Equipment

14Property, plant and equipment



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at September 30, 2017

 

Cost

 

 

Accumulated depreciation

 

 

Net book value

Land and improvements

$

377,491 

 

$

(67,164)

 

$

310,327 

Buildings

 

265,816 

 

 

(101,301)

 

 

164,515 

Yard and automotive equipment

 

60,125 

 

 

(39,489)

 

 

20,636 

Computer software and equipment

 

68,728 

 

 

(59,639)

 

 

9,089 

Office equipment

 

24,875 

 

 

(18,443)

 

 

6,432 

Leasehold improvements

 

21,369 

 

 

(14,492)

 

 

6,877 

Assets under development

 

12,619 

 

 

 -

 

 

12,619 



$

831,023 

 

$

(300,528)

 

$

530,495 







 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at December 31, 2016

 

Cost

 

 

Accumulated depreciation

 

 

Net book value

Land and improvements

$

362,283 

 

$

(60,576)

 

$

301,707 

Buildings

 

256,168 

 

 

(91,323)

 

 

164,845 

Yard and automotive equipment

 

55,352 

 

 

(38,560)

 

 

16,792 

Computer software and equipment

 

66,265 

 

 

(57,624)

 

 

8,641 

Office equipment

 

22,963 

 

 

(16,706)

 

 

6,257 

Leasehold improvements

 

20,199 

 

 

(12,541)

 

 

7,658 

Assets under development

 

9,130 

 

 

 -

 

 

9,130 



$

792,360 

 

$

(277,330)

 

$

515,030 



During the three and nine months ended September 30, 2017, interest of $40,000 and $78,000, respectively, was capitalized to the cost of assets under development (2016:  $42,000 and $65,000). These interest costs relating to qualifying assets are capitalized at a weighted average rate of 2.7% (2016:  4.4%).













Intangible Assets
Intangible Assets

15Intangible assets



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at September 30, 2017

 

Cost

 

 

Accumulated amortization

 

 

Net book value

Trade names and trademarks

$

54,229 

 

$

(347)

 

$

53,882 

Customer relationships

 

124,295 

 

 

(6,317)

 

 

117,978 

Software

 

96,860 

 

 

(22,155)

 

 

74,705 

Software under development

 

14,557 

 

 

 -

 

 

14,557 



$

289,941 

 

$

(28,819)

 

$

261,122 











 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at December 31, 2016

 

Cost

 

 

Accumulated amortization

 

 

Net book value

Trade names and trademarks

$

5,585 

 

$

(50)

 

$

5,535 

Customer relationships

 

25,618 

 

 

(1,072)

 

 

24,546 

Software

 

36,566 

 

 

(13,116)

 

 

23,450 

Software under development

 

18,773 

 

 

 -

 

 

18,773 



$

86,542 

 

$

(14,238)

 

$

72,304 



During the nine months ended September 30, 2017, the Company recognized an impairment loss of $8,911,000 due to the impairment of certain software and software under development and during the three and nine months ended September 30, 2016 the Company recorded an impairment loss on the Equipment One customer relationships of $4,669,000 (note 7).



During the three and nine months ended September 30, 2017, interest of $74,000 and $140,000, respectively was capitalized to the cost of software under development (2016:  $111,000 and $287,000). These interest costs relating to qualifying assets are capitalized at a weighted average rate of 2.70%  (2016: 5.32.%).

Goodwill
Goodwill

16Goodwill



 

 

 

 

 



 

 

 

 

 

Balance, December 31, 2016

 

 

 

$

97,537 

Additions

 

 

 

 

567,785 

Foreign exchange movement

 

 

 

 

4,324 

Balance, September 30, 2017

 

 

 

$

669,646 



Equity-Accounted Investments
Equity-Accounted Investments

17.  Equity-accounted investments

The Company holds a 48% share interest in a group of companies detailed below (together, the Cura Classis entities), which have common ownership. The Cura Classis entities provide dedicated fleet management services in three jurisdictions to a common customer unrelated to the Company.  The Company has determined the Cura Classis entities are variable interest entities and the Company is not the primary beneficiary, as it does not have the power to make any decisions that significantly affect the economic results of the Cura Classis entities.  Accordingly, the Company accounts for its investments in the Cura Classis entities following the equity method. 



A condensed summary of the Company's investments in and advances to equity-accounted investees are as follows (in thousands of U.S. dollars, except percentages):



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

Ownership

 

 

September 30,

 

 

December 31,



 

percentage

 

 

2017 

 

 

2016 

Cura Classis entities

 

48% 

 

$

4,650 

 

$

4,594 

Other equity investments

 

32% 

 

 

2,637 

 

 

2,732 



 

 

 

 

7,287 

 

 

7,326 



As a result of the Company’s investments, the Company is exposed to risks associated with the results of operations of the Cura Classis entities.  The Company has no other business relationships with the Cura Classis entities.  The Company’s maximum risk of loss associated with these entities is the investment carrying amount.

Debt
Debt

18Debt



 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

Carrying amount



 

 

September 30,

 

December 31,



 

2017 

 

 

2016 

Short-term debt

$

8,567 

 

$

23,912 



 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 



 

 

 

 

 

 

 



Revolving loans:

 

 

 

 



 

Denominated in Canadian dollars, unsecured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 2.380%, due in monthly installments of interest only, with the

 

 

 

 

 



 

committed, revolving credit facility available until October 2021

 

 -

 

 

69,926 



 

Denominated in United States dollars, unsecured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 2.075%, due in monthly installments of interest only, with the

 

 

 

 

 



 

committed, revolving credit facility available until October 2021

 

 -

 

 

30,000 



Delayed draw term loan:

 

 

 

 



 

Denominated in Canadian dollars, secured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 3.044%, due in monthly installments of interest only and

 

 

 

 

 



 

quarterly installments of principal, with the committed credit facility,

 

 

 

 

 



 

available until October 2021

 

189,050 

 

 

 -



 

Denominated in United States dollars, secured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 3.157%, due in monthly installments of interest only and

 

 

 

 

 



 

quarterly installments of principal, with the committed credit facility,

 

 

 

 

 



 

available until October 2021

 

146,397 

 

 

 -



 

Less: unamortized debt issue costs

 

(4,448)

 

 

 -



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

 

(13,114)

 

 

(4,220)



 

 

 

817,885 

 

 

595,706 



 

 

 

 

 

 

 

Total debt

$

826,452 

 

$

619,618 



 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

Current portion

$

16,985 

 

$

 -

Non-current portion

 

800,900 

 

 

595,706 



$

817,885 

 

$

595,706 



On October 27, 2016, the Company entered into a credit agreement (the “Credit Agreement”) with a syndicate of lenders, and Bank of America, N.A. (“BofA”), as administrative agent which provides the Company with:



·

Multicurrency revolving facilities of up to $675,000,000 (the “Multicurrency Facilities”);

·

A delayed draw term loan facility of up to $325,000,000 (the “Delayed-Draw Facility); and together with the Multicurrency Facilities, the (“Syndicated Facilities”) and

·

At the Company’s election and subject to certain conditions, including receipt of related commitments, incremental term loan facilities and/or increases to the Multicurrency Facilities in an aggregate amount of up to $50,000,000.



18Debt (continued)

The Company may use the proceeds from the Multicurrency Facilities for general corporate purposes. The amount available pursuant to the Delayed-Draw Facility is 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. On May 31, 2017, the Company borrowed $325,000,000 under the Delayed-Draw Facility to finance the acquisition of IronPlanet. The Delayed-Draw Facility amortizes in equal quarterly installments in an annual amount of 5% for the first two years and 10% in the third through fifth years, with the balance payable at maturity. Upon the closing of the acquisition the Syndicated Facilities became secured by the assets of the Company and certain of its subsidiaries in Canada and the United States. The Syndicated Facilities may become unsecured again, subject to the Company meeting specified credit rating or leverage ratio conditions.



The Company has incurred debt issue costs of $9,704,000 in connection with the Syndicated Facilities, of which $4,753,000 was allocated to the Multicurrency Facilities and $4,951,000 was allocated to the Delayed-Draw Facility. As the former allocation is not related to specific draws, the costs have been capitalized as other non-current assets and are being amortized over the term of the Syndicated Facilities. For the later allocation, the costs have been capitalized and reduce the carrying value of the delayed draw term loans to which they relate. At September 30, 2017, the Company had unamortized deferred debt issue costs relating to the Multicurrency Facilities of $4,054,000 (December 31, 2016: $6,182,000 relating to the Syndicated Facilities) and unamortized deferred debt issue costs of $4,448,000 relating to the delayed draw term loans.



On December 21, 2016, the Company completed the offering of $500,000,000 aggregate principal amount of 5.375% senior unsecured notes due January 15, 2025 (the “Notes”). Interest on the Notes is payable semi-annually. The proceeds from the offering were held in escrow until completion of the acquisition of IronPlanet. On May 31, 2017, the funds were released from escrow to finance the acquisition of IronPlanet. The Notes are jointly and severally guaranteed on an unsecured basis, subject to certain exceptions, by each of the Company’s subsidiaries that is a borrower or guarantees indebtedness under the Credit Agreement. IronPlanet and certain of its subsidiaries were added as additional guarantors in connection with the acquisition of IronPlanet.



The Company has incurred debt issue costs of $13,945,000 in connection with the offering of the Notes. At September 30, 2017, the Company had unamortized deferred debt issue costs relating to the Notes of $13,114,000 (December 31, 2016: $4,220,000)



Short-term debt at September 30, 2017 is comprised of drawings in different currencies on the Company’s committed revolving credit facilities and have a weighted average interest rate of 2.8%  (December 31, 2016:  2.2%).



As at September 30, 2017, the Company had available committed revolving credit facilities aggregating $647,213,000 of which $637,891,000 is available until October 27, 2021.

Equity and Dividends
Equity and Dividends

19Equity 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. 



Share repurchase

There were no common shares repurchased during the three and nine months ended September 30, 2017 (March 2016: 1,460,000 repurchased common shares, which were cancelled on March 15, 2016).



19Equity and dividends (continued)

Dividends

Declared and paid

The Company declared and paid the following dividends during the three and nine months ended September 30, 2017 and 2016: 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Declaration date

 

Dividend per share

 

Record date

 

 

Total dividends

 

Payment date

Nine months ended September 30, 2017:

 

 

 

 

 

 

 

 

 

 

 

Fourth quarter 2016

January 23, 2017

 

$

0.1700 

 

February 10, 2017

 

$

18,160 

 

March 3, 2017

First quarter 2017

May 4, 2017

 

 

0.1700 

 

May 23, 2017

 

 

18,188 

 

June 13, 2017

Second quarter 2017

August 4, 2017

 

 

0.1700 

 

August 25, 2017

 

 

18,210 

 

September 15, 2017



 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

Fourth quarter 2015

January 15, 2016

 

$

0.1600 

 

February 12, 2016

 

$

17,154 

 

March 4, 2016

First quarter 2016

May 9, 2016

 

 

0.1600 

 

May 24, 2016

 

 

17,022 

 

June 14, 2016

Second quarter 2016

August 5, 2016

 

 

0.1700 

 

September 2, 2016

 

 

18,127 

 

September 23, 2016



 

 

 

 

 

 

 

 

 

 

 



Declared and undistributed

Subsequent to September 30, 2017, the Company’s Board of Directors declared a quarterly dividend of $0.17 cents per common share, payable on December 20, 2017 to stockholders of record on November 29, 2017. This dividend payable has not been recognized as a liability in the financial statements. The payment of this dividend will not have any tax consequence 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 gains of $5,838,000 and $17,322,000 for the three and nine months ended September 30, 2017, respectively (2016: net gains of $958,000 and net gains of $9,569,000).



Share-Based Payments
Share-Based Payments

20.  Share-based payments

Share-based payments consist of the following compensation costs:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,



 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Stock option compensation expense:

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses

$

2,920 

 

 

1,555 

 

$

6,244 

 

$

4,025 

Acquisition-related costs

 

 -

 

 

 -

 

 

4,752 

 

 

 -

Share unit expense (recovery):

 

 

 

 

 

 

 

 

 

 

 

Equity-classified PSUs

 

(176)

 

 

736 

 

 

1,871 

 

 

1,222 

Liability-classified share units

 

821 

 

 

1,515 

 

 

246 

 

 

8,295 

Employee share purchase plan -

 

 

 

 

 

 

 

 

 

 

 

employer contributions

 

468 

 

 

403 

 

 

1,350 

 

 

1,152 



$

4,033 

 

$

4,209 

 

$

14,463 

 

$

14,694 

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



Stock option plan

The Company has three stock option plans that provide for the award of stock options to selected employees, directors and officers of the Company: a) 1999 Employee Stock Purchase Plan, as amended February 17, 2017, b) IronPlanet 1999 Stock Plan, and c) IronPlanet 2015 Stock Plan. The IronPlanet 1999 Stock Plan and IronPlanet 2015 Stock Plan were assumed by the Company as part of the acquisition of IronPlanet (note 22). 



Stock option activity for the nine months ended September 30, 2017 is presented below:



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

 

WA

 



Common

 

 

WA

remaining

 

 

Aggregate



shares under

 

 

exercise

contractual

 

 

intrinsic



option

price

life (in years)

value

Outstanding, December 31, 2016

3,366,714 

 

$

24.02  7.5 

 

$

33,601 

Granted

960,057 

 

 

31.14 

 

 

 

 

Assumed in acquisition (note 22)

737,358 

 

 

14.26 

 

 

 

 

Exercised

(355,514)

 

 

22.32 

 

 

$

3,202 

Forfeited

(124,414)

 

 

18.85 

 

 

 

 

Outstanding, September 30, 2017

4,584,201 

 

$

21.92  7.6 

 

$

23,721 

Exercisable, September 30, 2017

1,917,439 

 

$

23.25  6.2 

 

$

14,418 



The fair value of the stock option grants is estimated on the date of the grant using the Black-Scholes option pricing model. The weighted average grant date fair value of options granted during the nine months ended September 30, 2017 was $7.24

20.  Share-based payments (continued)

The significant assumptions used to estimate the fair value of stock options granted during the nine months ended September 30, 2017 and 2016 are presented in the following table on a weighted average basis:



 

 



 

 

Nine months ended September 30,

2017  2016 

Risk free interest rate

2.0%  1.1% 

Expected dividend yield

2.14%  2.36% 

Expected lives of the stock options

5 years

5 years

Expected volatility

27.8%  26.9% 



The fair value of the assumed stock options is estimated on the IronPlanet acquisition date using the Black-Scholes option pricing model. The weighted average fair value of the assumed options was $16.93.  The significant assumptions used to estimate the fair value of these assumed stock options are presented in the following table on a weighted average basis:





 



 

Nine months ended September 30,

2017 

Risk free interest rate

0.8% 

Expected dividend yield

2.19% 

Expected lives of the stock options

0.4 years

Expected volatility

32.1% 



As at September 30, 2017, the unrecognized stock-based compensation cost related to the non-vested stock options was $8,924,000, which is expected to be recognized over a weighted average period of 2.4 years.



Share unit plans

Share unit activity for the nine months ended September 30, 2017 is presented below:



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Equity-classified awards

 

Liability-classified awards



PSUs

 

PSUs (1)

 

Restricted share units ("RSUs")

 

DSUs



 

 

WA grant

 

 

WA grant

 

 

WA grant

 

 

 

WA grant



 

 

 

date fair

 

 

 

date fair

 

 

 

date fair

 

 

 

 

date fair



Number

 

 

value

 

Number

 

value

 

Number

 

value

 

Number

 

 

value



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding, December 31, 2016

243,968 

 

$

27.48 

 

311,329 

$

23.96 

 

160,009 

$

23.37 

 

73,520 

 

$

25.41 

Granted

133,452 

 

 

30.31 

 

94,982 

 

31.40 

 

849 

 

32.47 

 

13,548 

 

 

30.77 

Reclassification on modification

81,533 

 

 

24.47 

 

(81,533)

 

24.66 

 

 -

 

 -

 

 -

 

 

 -

Vested and settled

(27,326)

 

 

26.82 

 

(49,873)

 

23.64 

 

(152,544)

 

23.26 

 

 -

 

 

 -

Forfeited

 -

 

 

 -

 

(15,806)

 

26.31 

 

 -

 

 -

 

 -

 

 

 -

Outstanding, September 30, 2017

431,627 

 

$

27.83 

 

259,099 

$

26.39 

 

8,314 

$

26.29 

 

87,068 

 

$

26.24 

(1)

Liability-classified PSUs include PSUs awarded under the employee PSU plan and the previous 2013 PSU plan, in place prior to 2015, that are cash-settled and not subject to market vesting conditions.



As at September 30, 2017, the unrecognized share unit expense related to equity-classified PSUs was $5,986,000, which is expected to be recognized over a weighted average period of 1.9 years. The unrecognized share unit expense related to liability-classified PSUs was $4,030,000, which is expected to be recognized over a weighted average period of 1.8 years. The unrecognized share unit expense related to liability-classified RSUs was $58,000, which is expected to be recognized over a weighted average period of 1.0 years. There is no unrecognized share unit expense related to liability-classified DSUs as they vest immediately upon grant.

20.  Share-based payments (continued)

Share unit plans (continued)

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, and performance vesting conditions being met. 



PSUs awarded under the PSU Plans are subject to market vesting conditions. The fair value of the liability-classified PSUs awarded under the employee PSU plan is estimated on the date of grant and at each reporting date using a binomial model. The significant assumptions used to estimate the fair value of the liability-classified PSUs awarded under the employee PSU plan during the nine months ended September 30, 2017 and 2016 are presented in the following table on a weighted average basis:



 

 

 



 

 

 

Nine months ended September 30,

 

2017  2016 

Risk free interest rate

 

1.4%  1.2% 

Expected dividend yield

 

1.92%  2.49% 

Expected lives of the PSUs

 

3 years

3 years

Expected volatility

 

28.2%  29.9% 

Average expected volatility of comparable companies

 

37.0%  37.0% 



Sign-on grant PSUs

On August 11, 2014, the Company awarded 102,375 one-time sign-on grant PSUs (the “SOG PSUs”).  The SOG PSUs were cash-settled and subject to market vesting conditions related to the Company’s share performance over rolling two,  three,  four, and five-year periods.



Prior to May 1, 2017, the Company was only able to settle the SOG PSU award in cash, and as such, the plan was classified as a liability award. On May 1, 2017 (the “modification date”), the shareholders approved amendments to the SOG PSU grant, allowing the Company to choose whether to settle the award in cash or in shares.  With respect to settling in shares, the new settlement options allow the Company to issue a number of shares equal to the number of units that vest. The shareholders authorized 150,000 shares to be issued for settlement of the PSUs.



On the modification date, the SOG PSU award was reclassified to equity award, based on the Company’s settlement intentions.  The weighted average fair value of the SOG PSU award outstanding on the modification date was $24.47.  The share unit liability, representing the portion of the fair value attributable to past service, was $1,421,000, which was reclassified to equity on that date. No incremental compensation was recognized as a result of the modification. Unrecognized compensation expense based on the fair value of the SOG PSU award on the modification date will be amortized over the remaining service period.



Because the PSUs awarded under the new plans are contingently redeemable in cash in the event of death of the participant, on the modification date, the Company reclassified $1,803,000 to temporary equity, representing the portion of the contingent redemption amount of the SOG PSUs as if redeemable on May 1, 2017, to the extent attributable to prior service. 













20.  Share-based payments (continued)

Share unit plans (continued)

Sign-on grant PSUs (continued)

The fair value of the equity-classified SOG PSUs is estimated on modification date and on the date of grant using a binomial model. The significant assumptions used to estimate the fair value of the equity-classified PSUs for the nine months ended September 30, 2017 are presented in the following table on a weighted average basis:



 

 



 

 

Nine months ended September 30,

 

2017 

Risk free interest rate

 

1.6% 

Expected dividend yield

 

2.54% 

Expected lives of the PSU

 

4 years

Expected volatility

 

28.6% 



Amendment to RSU plans

The Company has RSU plans that are not subject to market vesting conditions. Prior to November 8, 2017, the Company was only able to settle the RSU awards in cash, and as such, the RSUs were classified as liability awards, which are fair valued on grant date and at each reporting date using the 20-day volume weighted average price of the Company’s common shares listed on the New York Stock Exchange.  On November 8, 2017 (the “RSU modification date”), the Board of Directors approved amendments to the RSU plans, allowing the Company to choose whether to settle the awards in cash or in shares for new RSUs granted after the RSU modification date.  With respect to settling in shares, the new settlement options allow the Company 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 Company has registered 300,000 shares to be issued for settlement of the RSUs which will be proposed for shareholder approval at the next annual general meeting.



Contingencies
Contingencies

21.   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, 2017 there was $40,722,000 of industrial assets guaranteed under contract, of which 60% is expected to be sold prior to the end of December 2017, with the remainder relating to guarantees issued by IronPlanet to be sold by October 2018 (December 31, 2016:  $3,813,000 of which 100% was expected to be sold prior to the end of March 2017).



At September 30, 2017 there was $14,577,000 of agricultural assets guaranteed under contract, of which 77% is expected to be sold prior to the end of December 2017, with the remainder to be sold by the end of April 2018 (December 31, 2016:  $11,415,000 of which 100% was expected to be sold prior to the end of July 2017).

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

Business Combinations
Business Combinations

22.   Business combinations  

(a)

IronPlanet acquisition

On May 31, 2017 (the “IronPlanet Acquisition Date”), the Company acquired 100% of the issued and outstanding shares of IronPlanet for a total fair value consideration of $776,474,000. As at the acquisition date, cash consideration of $772,706,000 has been paid to the former shareholders, vested option holders and warrant holders of IronPlanet.  In addition to the cash consideration, non-cash consideration of $2,330,000 was issued attributable to the assumption of outstanding IronPlanet options, $1,771,000 was paid in cash related to customary closing adjustments, and $333,000 was related to settlement of intercompany payable transactions.



A summary of the net cash flows and purchase price are detailed below:





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

May 31, 2017

Cash consideration paid to former equity holders

 

 

 

 

$

723,810 

Settlement of IronPlanet's debt

 

 

 

 

 

36,313 

Settlement of IronPlanet's transaction costs

 

 

 

 

 

12,583 

Cash consideration paid on closing

 

 

 

 

 

772,706 

Cash consideration paid related to closing adjustments

 

 

 

 

 

1,771 

Less: cash and cash equivalents acquired

 

 

 

 

 

(95,626)

Less: restricted cash acquired

 

 

 

 

 

(3,000)

Acquisition of IronPlanet, net of cash acquired

 

 

 

 

$

675,851 



 

 

 

 

 

 

Cash consideration paid on closing

 

 

 

 

$

772,706 

Replacement stock option awards attributable to pre-

 

 

 

 

 

 

combination services

 

 

 

 

 

4,926 

Stock option compensation expense from accelerated vesting

 

 

 

 

 

 

of awards attributable to post-combination services

 

 

 

 

 

(2,596)

Cash consideration paid relating  to closing adjustments

 

 

 

 

 

1,771 

Settlement of pre-existing intercompany balances

 

 

 

 

 

(333)

Purchase price

 

 

 

 

$

776,474 



As part of the acquisition of IronPlanet, the Company assumed IronPlanet’s existing 1999 and 2015 Stock Option Plans under the same terms and conditions.  The fair value of IronPlanet’s stock options at the date of acquisition was determined using the Black-Scholes pricing model. Of the total fair value, $51,678,000 has been attributed as pre-combination service and included as part of the total acquisition consideration. The post-combination attribution of $10,154,000 is made up of two components, 1) $4,752,000 related to acceleration of options upon closing of the transaction, which was immediately recognized in acquisition-related costs, and 2) $5,402,000 related to the remaining unvested options, which will be recognized as compensation expense over the vesting period.



IronPlanet is a leading online marketplace for selling and buying used equipment and other durable assets and an innovative participant in the multi–billion dollar used equipment market. The acquisition expands the breadth and depth of equipment disposition and management solutions the Company can offer its customers.



The acquisition was accounted for in accordance with ASC 805, Business Combinations. The assets acquired and liabilities assumed were recorded at their estimated fair values at the IronPlanet Acquisition Date. Goodwill of $567,410,000 was calculated as the fair value of consideration over the estimated fair value of the net assets acquired.



22.  Business combinations (continued)

(a)IronPlanet acquisition (continued)

IronPlanet provisional purchase price allocation



 

 

 



 

 

 



 

 

May 31, 2017

Purchase price

 

$

776,474 



 

 

 

Assets acquired:

 

 

 

Cash and cash equivalents

 

$

95,626 

Restricted cash

 

 

3,000 

Trade and other receivables

 

 

13,021 

Inventory

 

 

1,012 

Advances against auction contracts

 

 

4,623 

Prepaid expenses and deposits

 

 

1,233 

Income taxes receivable

 

 

170 

Property, plant and equipment

 

 

2,381 

Other non-current assets

 

 

2,551 

Deferred tax assets

 

 

1,497 

Intangible assets ~

 

 

188,000 



 

 

 

Liabilities assumed:

 

 

 

Auction proceeds payable

 

 

63,616 

Trade and other payables

 

 

14,511 

Income taxes payable

 

 

55 

Deferred tax liabilities

 

 

25,868 

Fair value of identifiable net assets acquired

 

 

209,064 

Goodwill acquired on acquisition

 

$

567,410 



~Intangible assets consist of indefinite-lived trade names and trademarks, customer relationships with estimated useful lives of ranging from six to 13 years, and a technology platform with an estimated useful life of 7 years.

The amounts included in the IronPlanet provisional purchase price allocation are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the IronPlanet Acquisition Date.  The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the IronPlanet Acquisition Date, and is dependent upon finalization of income tax liabilities and the valuation report.  Adjustments to the preliminary values during the measurement period will be recorded in the operating results of the reporting period in which the adjustments are determined.  Changes to the amounts recorded as assets and liabilities will result in a corresponding adjustment to goodwill.



Goodwill

The main drivers generating goodwill are the anticipated synergies from (1) the Company's auction expertise and transactional capabilities to IronPlanet's existing customer base, (2) IronPlanet providing existing technology to the Company's current customer base, and (3) future growth from international expansion and new Caterpillar dealers.  Other factors generating goodwill include the acquisition of IronPlanet's assembled work force and their associated technical expertise. 

22.  Business combinations (continued)

(a)

IronPlanet acquisition (continued)

Contributed revenue and net income

The results of IronPlanet’s operations are included in these consolidated financial statements from the IronPlanet Acquisition Date. IronPlanet contributed revenues of $22,500,000 and a net loss of $1,696,000 to the Company’s revenues and net income during the three months ended September 30, 2017. IronPlanet contributed revenues of $33,380,000 and a net loss of $1,404,000 to the Company's revenues and net income during period from acquisition to September 30, 2017. IronPlanet’s contributed net loss includes charges related to amortization of intangible assets acquired.

The following table includes the unaudited condensed pro forma financial information that presents the combined results of operations as if the transactions relating to the IronPlanet acquisition and the financing required to fund the acquisition had occurred on January 1, 2016. These transactions include adjustments in each applicable period presented for recurring charges related to amortization of intangible assets acquired, interest expense related to the acquisition financing, changes in fair value of convertible preferred stock warrant liability, certain stock option compensation expenses, and taxes, as well as adjustments to the diluted weighted average number of shares outstanding. In addition, these transactions also include pre-tax adjustments related to non-recurring charges totalling $55,239,000 incurred between the third quarter of 2016 and the second quarter of 2017 that were presented as if the transactions occurred on January 1, 2016. The non-recurring transactions include certain acquisition-related and financing costs, stock option compensation expenses, and severance costs, together with the related income tax recovery.

The unaudited pro forma condensed combined financial information does not purport to represent what the Company’s results of operations or financial condition would have been had the IronPlanet acquisition and related transactions occurred on the dates indicated, and it does not purport to project the Company’s results of operations or financial condition for any future period or as of any future date. 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended

 

Nine months ended



 

September 30,

 

September 30,

Nine months ended September 30,

 

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Revenue

 

$

141,047 

 

$

153,817 

 

$

481,076 

 

$

503,711 

Net income (loss)

 

 

10,323 

 

 

(9,583)

 

 

57,491 

 

 

2,089 

Basic earnings (loss) per share

 

 

0.10 

 

 

(0.09)

 

 

0.54 

 

 

0.00 

Diluted earnings (loss) per share

 

 

0.09 

 

 

(0.09)

 

 

0.53 

 

 

0.00 



The unaudited pro forma net loss for the third quarter of 2016 includes an impairment loss on the EquipmentOne reporting unit goodwill of $23,574,000 and a pre-tax impairment loss on the EquipmentOne reporting unit customer relationships of $4,669,000.



The pro forma financial information included in the Company’s unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2017 and 2016 previously filed on August 8, 2017, has been adjusted as per the table below. The adjustments correct a mechanical computation error in determining pro forma net income. The adjustments resulted in an increase to net income by $2,844,000 and $3,343,000 for the three and six months ended June 30, 2017, respectively, and an increase to net income by $3,618,000 for the three months ended June 30, 2016 and a decrease to net income by $16,702,000 for the six months ended June 30, 2016. There were related adjustments to the basic and diluted earnings per share. There was no adjustment to revenues as reported. These adjustments have no impact on the consolidated balance sheets, consolidated income statements, or the consolidated statements of cash flows.

22.  Business combinations (continued)

(a)IronPlanet acquisition (continued)

Contributed revenue and net income (continued)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended

 

Six months ended



 

June 30,

 

June 30,

Nine months ended September 30,

 

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Revenue

 

$

185,485 

 

$

187,089 

 

$

340,029 

 

$

349,893 

Net income

 

 

28,619 

 

 

32,021 

 

 

47,168 

 

 

11,671 

Basic earnings per share

 

 

0.27 

 

 

0.29 

 

 

0.44 

 

 

0.10 

Diluted earnings per share

 

 

0.26 

 

 

0.29 

 

 

0.43 

 

 

0.10 



Transactions recognized separately from the acquisition of assets and assumptions of liabilities

Acquisition-related costs

Expenses totalling $32,591,000 for legal fees, stock option compensation expense, and other acquisition-related costs are included in the consolidated income statement for the nine months ended September 30, 2017.



(b)

Kramer acquisition

On November 15, 2016 (the “Kramer Acquisition Date”), the Company purchased the assets of Kramer Auctions Ltd. for cash consideration of Canadian dollar 15,300,000  ($11,361,000) comprised of Canadian dollar 15,000,000  ($11,138,000) paid at acquisition date and Canadian dollar 300,000  ($223,000) deferred payments over three years.  In addition to cash consideration, consideration of up to Canadian dollar 2,500,000  ($1,856,000) is contingent on Kramer achieving certain operating performance targets over the three-year period following acquisition. Kramer is a leading Canadian agricultural auction company with exceptionally strong customer relationships in central Canada.  This acquisition is expected to significantly strengthen Ritchie Bros.’ penetration of Canada’s agricultural sector and add key talent to our Canadian Agricultural sales and operations team.



The acquisition was accounted for in accordance with ASC 805 Business Combinations. The assets acquired were recorded at their estimated fair values at the Kramer Acquisition Date. Goodwill of $6,822,000 was calculated as the fair value of consideration over the estimated fair value of the net assets acquired.



Kramer provisional purchase price allocation



 

 



 

November 15, 2016

Purchase price

$

11,138 

Deferred purchase note consideration

 

223 

Fair value of contingent consideration

 

538 

Total fair value at Petrowsky Acquisition Date

 

11,899 



 

 

Assets acquired:

 

 

Property, plant and equipment

$

399 

Intangible assets ~

 

4,678 

Fair value of identifiable net assets acquired

 

5,077 

Goodwill acquired on acquisition

$

6,822 



~Consists of customer relationships and trade names with estimated useful lives of 10 and three years, respectively.    

22.  Business combinations (continued)

(b)Kramer acquisition (continued)

Kramer provisional purchase price allocation (continued)

The amounts included in the Kramer provisional purchase price allocation are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the Kramer Acquisition Date.  The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the Kramer Acquisition Date. Adjustments to the preliminary values during the measurement period will be recorded in the operating results of the period in which the adjustments are determined. Changes to the amounts recorded as assets and liabilities will result in a corresponding adjustment to goodwill.



Assets acquired

At the date of acquisition, the Company determined the fair value of the assets acquired using appropriate valuation techniques.



Goodwill

Kramer is a highly complementary business that will broaden the Company’s base in the agriculture sector in Canada, one of the main drivers generating goodwill. 



Contingent consideration

At the date of acquisition, the maximum contingent consideration of Canadian dollar 2,500,000 ($1,856,000) was fair valued at Canadian dollar 725,000  ($538,000).  The contingent consideration is based on the cumulative revenue growth during a three-year period ending November 15, 2019.  The liability is remeasured on each reporting date at its estimated fair value, which is determined using actual results up to the reporting date and forecasted results over the remainder of the performance period. Changes in the fair value are recognized in other income or expense in the consolidated income statement, as applicable. At September 30, 2017, the Company did not recognize a liability as the estimated fair value of the contingent consideration was nil (December 31, 2016: Canadian dollar 725,000  ($538,000)). In the three and nine months ending September 30, 2017 the Company recognized other income of $626,000 and $620,000, respectively associated with the change in fair value.



Transactions recognized separately from the acquisition of assets and assumptions of liabilities

Acquisition-related costs

Expenses totalling $429,000 for continuing employment costs and other acquisition-related costs are included in the consolidated income statements for the nine months ended September 30, 2017.  



Employee compensation in exchange for continued services

The Company may pay an additional amount not exceeding Canadian dollar 1,000,000  ($743,000) over a three-year period based on the continuing employment of four key leaders of Kramer with the Company.



(c)

Petrowsky acquisition

On August 1, 2016 (the “Petrowsky Acquisition Date”), the Company acquired the assets of Petrowsky for cash consideration of $6,250,000. An additional $750,000 was paid for the retention of certain key employees. In addition to cash consideration, consideration of up to $3,000,000 is contingent on Petrowsky achieving certain revenue growth targets over the three-year period following acquisition. Based in North Franklin, Connecticut, Petrowsky caters largely to equipment sellers in the construction and transportation industries. Petrowsky also serves customers selling assets in the underground utility, waste recycling, marine, and commercial real estate industries. The business operates one permanent auction site, in North Franklin, which will continue to hold auctions, and also specializes in off-site auctions held on the land of the consignor.

22.  Business combinations (continued)

(c)Petrowsky acquisition (continued)

The acquisition was accounted for in accordance with ASC 805 Business Combinations. The assets acquired were recorded at their estimated fair values at the Petrowsky Acquisition Date. Goodwill of $4,308,000 was calculated as the fair value of consideration over the estimated fair value of the net assets acquired.



Petrowsky purchase price allocation



 

 



 

 



 

August 1, 2016

Purchase price

$

6,250 

Fair value of contingent consideration

 

1,433 

Total fair value at Petrowsky Acquisition Date

 

7,683 



 

 

Assets acquired:

 

 

Property, plant and equipment

$

441 

Intangible assets ~

 

2,934 

Fair value of identifiable net assets acquired

 

3,375 

Goodwill acquired on acquisition

$

4,308 

~Consists of customer relationships with estimated useful lives of 10 years.



Assets acquired and liabilities assumed

At the date of the acquisition, the carrying amounts of the assets and liabilities acquired approximated their fair values, except customer relationships, whose fair value was determined using appropriate valuation techniques.



Goodwill

Petrowsky is a highly complementary business that will broaden the Company’s base of equipment sellers, one of the main drivers generating goodwill. Petrowsky’s sellers are primarily in the construction and transportation industries, which are also well aligned with the Company’s sector focus.



Contingent consideration

As part of the acquisition, contingent consideration of up to $3,000,000 is payable to Petrowsky if certain revenue growth targets are achieved. The contingent consideration is based on the cumulative revenue growth during a three-year period ending July 31, 2019. The liability is remeasured on each reporting date at its estimated fair value, which is determined using actual results up to the reporting date and forecasted results over the remainder of the performance period. Changes in the fair value are recognized in other income or expense in the consolidated income statement, as applicable. In the three and nine months ending September 30, 2017, the Company recognized other income of nil and $1,457,000, respectively, associated with the change in fair value. At September 30, 2017, the Company did not recognize a liability as the estimated fair value of the contingent consideration was nil (December 31, 2016: $1,433,000).



Transactions recognized separately from the acquisition of assets and assumptions of liabilities

Acquisition-related costs

Expenses totalling $557,000 for continuing employment and other acquisition-related costs are included in the condensed consolidated income statement for the nine months ended September 30, 2017. 



22.  Business combinations (continued)

(c)Petrowsky acquisition (continued)

Transactions recognized separately from the acquisition of assets and assumptions of liabilities (continued)

Employee compensation in exchange for continued services

As noted above, $750,000 was paid on the Petrowsky Acquisition Date in exchange for the continuing services of certain key employees. In addition, the Company may pay an amount not exceeding $1,000,000 over a three-year period, payable in equal annual installments, on the anniversary date of the acquisition based on the founder of Petrowsky’s continuing employment with the Company. The Company paid $333,000 in this regard during the three months ended September 30, 2017. 



(d)

Mascus acquisition

On February 19, 2016 (the “Mascus Acquisition Date”), the Company acquired 100% of the issued and outstanding shares of Mascus for cash consideration of €26,553,000  ($29,580,000). In addition to cash consideration, consideration of up to €3,198,000  ($3,563,000) of which, €1,215,000  ($1,302,000) has been paid, is contingent on Mascus achieving certain operating performance targets over the three-year period following acquisition.  Mascus is based in Amsterdam and provides an online equipment listing service for used heavy machines and trucks.  The acquisition expands the breadth and depth of equipment disposition and management solutions the Company can offer its customers.



The acquisition was accounted for in accordance with ASC 805, Business Combinations. The assets acquired and liabilities assumed were recorded at their estimated fair values at the Mascus Acquisition Date. Goodwill of $19,664,000 was calculated as the fair value of consideration over the estimated fair value of the net assets acquired.



Mascus purchase price allocation





 

 



 

 

February 19, 2016

Purchase price

$

29,580 

Fair value of contingent consideration

 

3,431 

Non-controlling interests (1)

 

596 

Total fair value at Mascus Acquisition Date

 

33,607 



 

 

Fair value of assets acquired:

 

 

Cash and cash equivalents

$

1,457 

Trade and other receivables

 

1,290 

Prepaid expenses

 

528 

Property, plant and equipment

 

104 

Intangible assets (2)

 

14,817 



 

 

Fair value of liabilities assumed:

 

 

Trade and other payables

 

1,533 

Other non-current liabilities

 

37 

Deferred tax liabilities

 

2,683 

Fair value of identifiable net assets acquired

 

13,943 

Goodwill acquired on acquisition

$

19,664 



22.  Business combinations (continued)

(d)Mascus acquisition (continued)

Mascus purchase price allocation (continued)

(1)

The Company acquired 100% of Mascus and within the Mascus group of entities there were two subsidiaries that were not wholly-owned, one domiciled in the United States and one domiciled in Denmark. As such, the Company acquired non-controlling interests.  The fair value of each non-controlling interest was determined using an income approach based on cash flows of the respective entities that were attributable to the non-controlling interest. On May 27, 2016, Ritchie Bros. Holdings (America) Inc. acquired the remaining issued and outstanding shares of the Mascus subsidiary domiciled in the United States for cash consideration of $226,000.

(2)

Intangible assets consist of customer relationships with estimated useful lives of 17 years, indefinite-lived trade names, and software assets with estimated useful lives of five years.

Goodwill

The main drivers generating goodwill are the anticipated synergies from (1) the Company's core auction expertise and transactional capabilities to Mascus' existing customer base, and (2) Mascus' providing existing technology to the Company's current customer base.  Other factors generating goodwill include the acquisition of Mascus' assembled work force and their associated technical expertise. 



Contingent consideration

At the date of acquisition, the maximum contingent consideration of €3,198,000  ($3,563,000) was fair valued at €3,080,000  ($3,431,000). The consideration is contingent upon the achievement of certain operating performance targets during the three-year period following acquisition and is due in three instalments, each occurring after the end of the respective 12-month performance period.  During the nine months ended September 30, 2017 after having achieved certain first performance period targets, the Company made the first instalment payment of €1,215,000  ($1,302,000). The remaining liability is remeasured on each reporting date at its estimated fair value, which is determined using actual results up to the reporting date and forecasted results over the remainder of the performance period. Changes in the fair value are recognized in other income or expense in the consolidated income statement, as applicable. At September 30, 2017 the estimated fair value of the contingent consideration was €1,608,000  ($1,900,000) (December 31, 2016: €3,080,000  ($3,431,000)). During the nine months ended September 30, 2017 the Company recognized €178,000  ($193,000) in other income associated with the change in fair value.



Transactions recognized separately from the acquisition of assets and assumptions of liabilities

Acquisition-related costs

Expenses totalling $426,000 for continuing employments costs and other acquisition-related costs are included in the condensed consolidated income statement for the nine months ended September 30, 2017 (2016: $1,450,000). 



Employee compensation in exchange for continued services

The Company may pay additional amounts not exceeding €1,625,000  ($1,849,000) over a  three-year period ending February 19, 2019 based on key employees’ continuing employment with Mascus. The Company paid €393,000  ($419,000)  in this regard during the nine months ended September 30, 2017.





Contingently Redeemable Non-controlling Interest in Ritchie Bros. Financial Services
Contingently Redeemable Non-controlling Interest in Ritchie Bros. Financial Services

23.  Contingently redeemable non-controlling interest in Ritchie Bros. Financial Services

Until July 12, 2016, the Company held a 51% interest in RBFS, an entity that provides loan origination services to enable the Company’s auction customers to obtain financing from third party lenders.    



The Company and the NCI holders each held options pursuant to which the Company could acquire, or be required to acquire, the NCI holders’ 49% interest in RBFS. On July 12, 2016, the Company completed its acquisition of the NCI. On that date, the Company acquired the NCI holders’ 49% interest in RBFS for total consideration of 57,900,000 Canadian dollars ($44,141,000).



Significant Accounting Policies (Policy)

(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, 2016, included in the Company’s Annual Report on Form 10-K, filed with the Securities 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:

·

commissions earned at the Company’s auctions through the Company acting as an agent for consignors of equipment and other assets, as well as commissions on online marketplace sales, and

·

fees earned in the process of conducting auctions, including online marketplace listing and inspection fees, fees from value-added services and make-ready activities, as well as fees paid by buyers on online marketplace sales.

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.  For auction or online marketplace sales, revenue is recognized when the auction or online marketplace 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. 



Commissions from sales at the Company’s auctions represent the percentage earned by the Company on the gross auction 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 or purchases inventory to be sold at auction.  Commissions also include those earned on online marketplace sales.

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commission and fee revenues from sales at auction

The Company accepts equipment and other assets on consignment or takes title for a short period of time prior to auction, stimulates buyer interest through professional marketing techniques, and matches sellers (also known as consignors) to buyers through the auction or private sale process.



In its role as auctioneer, the Company matches buyers to sellers of equipment on consignment, as well as to inventory held by the Company, through the auction process. Following the auction, the Company invoices the buyer for the purchase price of the property, collects payment from the buyer, and where applicable, remits to the consignor the net sale proceeds after deducting its commissions, expenses, and applicable taxes. Commissions are calculated as a percentage of the hammer price of the property sold at auction.  Fees 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 is recognized on the date of the auction sale upon the fall of the auctioneer’s hammer, which is the point in time when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. Subsequent to the date of the auction sale, the Company’s remaining obligations for its auction services relate only to the collection of the purchase price from the buyer and the remittance of the net sale proceeds to the seller. These remaining service obligations are not an essential part of the auction services provided by the Company. 



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. In the rare event where a buyer refuses to take title of the property, 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 auction. Historically, cancelled sales have not been material in relation to the aggregate hammer price of property sold at auction. 



Commission revenues are recorded net of commissions owed to third parties, which are principally the result of situations when the commission is shared with a consignor or with the counterparty in an auction guarantee risk and reward sharing arrangement. Additionally, in certain situations, commissions are shared with third parties who introduce the Company to consignors who sell property at auction.



Underwritten commission contracts can take the form of guarantee or inventory 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 (note 21). 



Revenues related to inventory contracts are 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, including, but not limited to, delivery of the property. Revenue from inventory sales is presented net of costs within revenues on the consolidated income statement, as the Company takes title only for a short period of time and the risks and rewards of ownership are not substantially different than the Company’s other underwritten commission contracts. 

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commissions and fees on online marketplace sales

Through its online marketplaces, the Company typically sells equipment or other assets on consignment from sellers and stimulates buyer interest through sales and marketing techniques in order to match online marketplace sellers with buyers. Prior to offering an item for sale on its online marketplaces, the Company performs required inspections, title and lien searches, and make-ready activities to prepare the item for sale. 



Online marketplace revenues are primarily driven by seller commissions, fees charged to sellers for listing and inspecting equipment, and amounts paid by buyers, including buyer transaction fees and buyer’s premiums. The Company also generates revenue from related online marketplace services including make-ready activities, logistics coordination, storage, private auction hosting, and asset appraisals. Online marketplace sale commission and fee revenues are recognized when the sale is complete, which is generally at the conclusion of the marketplace transaction between the seller and buyer. This occurs when a buyer has become legally obligated to pay the purchase price and buyer transaction fee for an asset that the seller is obligated to relinquish in exchange for the sales price less seller commissions and listing fees. At that time, the Company has substantially performed what it must do to be entitled to receive the benefits represented by its commissions and fees.



Following the sale of the item, the Company invoices the buyer for the purchase price of the asset, taxes, and the buyer transaction fee or buyer’s premium, collects payment from the buyer, and remits the proceedsnet of the seller commissions, listing fees, and applicable taxesto the seller. The Company notifies the seller when the buyer payment has been received in order to clear release of the equipment or other asset to the seller. These remaining service obligations are not viewed to be an essential part of the services provided by the Company.



Under the Company’s standard terms and conditions, it is not obligated to pay the seller for items in an online marketplace sale in which the buyer has not paid for the purchased item. If the buyer defaults on its payment obligation, the equipment or other assets may be returned to the seller or moved into a subsequent online marketplace event.



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. This provision is related to settlement 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.  



For guarantee contracts, if actual online marketplace sale proceeds are less than the guaranteed amount, the commission earned is reduced; if proceeds are sufficiently lower, the Company may incur a loss on the sale. If such consigned equipment sells above the minimum price, the Company may be entitled to a share of the excess proceeds as negotiated with the seller. The Company’s share of the excess, if any, is recorded in revenue together with the related online marketplace sale commission. Losses, if any, resulting from guarantee contracts are recorded in revenue in the period in which the relevant online marketplace sale was 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 (note 21). 

2.  Significant accounting policies (continued)

(b)  Revenue recognition (continued)

Commissions and fees on online marketplace sales (continued)

For inventory contracts related to online marketplace sales, revenue from the sale of inventory through the Company’s online marketplaces are recorded net of acquisition costs because the acquisition of equipment in advance of an online marketplace sale is an ancillary component of the Company’s business and, in general, the risks and rewards of ownership are not substantially different than the Company’s other guarantee contracts. Since the online marketplace sale business is a net business, gross sales proceeds are not reported as revenue in the consolidated income statement. Rather, the net commission earned from online marketplace sales is reported as revenue, which reflects the Company’s agency relationship between buyers and sellers of equipment.



Other fees

Fees from value-added services include financing, appraisal, and technology service fees. Fees are recognized in the period in which the service is provided to the customer.

(c)

Costs of services, excluding depreciation and amortization expenses

Costs of services are comprised of expenses incurred in direct relation to conducting auctions (“direct expenses”), earning online marketplace revenues, and earning other fee revenues. Direct expenses include direct labour, buildings and facilities charges, and travel, advertising and promotion costs.



Costs of services incurred to earn online marketplace revenues include inspection costs, facilities costs, inventory management, referral, sampling, and appraisal fees.  Inspections are generally performed at the seller’s physical location. The cost of inspections include 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 revenues also include costs for the Company’s customer support, online marketplace operations, logistics, title and lien investigation functions,  and lease and operations costs related to the Company’s third-party data centers at which its websites are hosted.



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

(d)

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

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 Company also has a senior executive PSU plan that provides for the award of PSUs to selected senior executives 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 using a binomial model.



2.  Significant accounting policies (continued)

(d)   Share-based payments (continued)

Equity-classified share-based payments (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.



Any consideration paid on exercise of the stock options is credited to the common shares.  Dividend equivalents on the equity-classified PSUs are recognized as a reduction to retained earnings over the service period.



PSUs awarded under the senior executive and employee PSU plans (described in note 20) are contingently redeemable in cash in the event of death of the participant. The contingently redeemable portion of the senior executive PSU awards, which represents the amount that would be redeemable based on the conditions at the date of grant, to the extent attributable to prior service, is recognized as temporary equity. The balance reported in temporary equity increases on the same basis as the related compensation expense over the service period of the award, with any excess of the temporary equity value over the amount recognized in compensation expense charged against retained earnings.  In the event it becomes probable an award is going to become eligible for redemption by the holder, the award would be reclassified to a liability award.



Liability-classified share-based payments

The Company maintains other share unit compensation plans that vest over a period of up to five 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 using the volume weighted average price of the Company’s common shares for the twenty days 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 20. 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 non-current liabilities.

(e)

Restricted cash

In certain jurisdictions, local laws require the Company to hold cash in segregated bank accounts, which are used to settle auction proceeds payable resulting from auctions and online marketplace sales conducted in those regions. In addition, the Company also holds cash generated from its EquipmentOne online marketplace sales in separate escrow accounts, for settlement of the respective online marketplace transactions as a part of its secured escrow service. Restricted cash balances also include funds held in accounts owned by the Company in support of short-term stand-by letters of credit to provide seller security.



2.  Significant accounting policies (continued)

(e)   Restricted cash (continued)

During the period from December 21, 2016 through May 31, 2017, non-current restricted cash consisted of funds held in escrow pursuant to the offering of senior unsecured notes (note 18), which were only available when the Company received approval to acquire IronPlanet Holdings, Inc. (“IronPlanet”) and whose use was restricted to the funding of the IronPlanet acquisition (note 22).

(f)

Inventories

Inventory consists of equipment and other assets purchased for resale in an upcoming Company auction or online marketplace event. 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. 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. The specific identification method is used to determine amounts removed from inventory. Write-downs to the carrying value of inventory are recorded in revenue in the consolidated income statement.

(g)

Intangible assets

Intangible assets are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes all expenditures that are directly attributable to the acquisition or development of the asset, net of any amounts received in relation to those assets, including scientific research and experimental development tax credits. Costs of internally developed software are amortized on a straight-line basis over the remaining estimated economic life of the software product. Costs related to software incurred prior to establishing technological feasibility or the beginning of the application development stage of software are charged to operations as such costs are incurred.  Once technological feasibility is established or the application development stage has begun, directly attributable costs are capitalized until the software is available for use.



Amortization is recognized in net earnings on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful lives are:



 

 

 

 



 

 

 

 

Asset

Basis

 

Rate / term

 

Trade names and trademarks

Straight-line

 

3 - 15 years or indefinite-lived

 

Customer relationships

Straight-line

 

6 - 20 years

 

Software assets

Straight-line

 

3 - 7 years

 



Customer relationships includes relationships with buyers and sellers.

(h)

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.





2.  Significant accounting policies (continued)

(h)   Goodwill (continued)

Where 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.

(i)

Early adoption of new accounting pronouncements

(i)

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Entities still have the option of performing a qualitative assessment of a reporting unit to first determine whether the quantitative impairment test is necessary. Where an annual or interim quantitative impairment test is necessary, there is only one step, which is to compare the fair value of a reporting unit with its carrying value. An impairment loss is recognized as the difference between the reporting unit’s carrying amount and its fair value to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit.



ASU 2017-04 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments are applied on a prospective basis. Because the amendments reduce the cost and complexity of goodwill impairment testing, the Company has early adopted ASU 2017-04 in the first quarter of 2017.



(ii)

In June 2017, the Company adopted ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 clarifies that the effects of a modification should be accounted for unless all the following criteria are met:

1.

The fair value (or calculated or intrinsic value, as appropriate) of the modified award is the same as the fair value (or calculated or intrinsic value, as appropriate) of the original award immediately before the modification. The value immediately before and after the modification does not have to be estimated if the modification does affect any of the inputs to the valuation technique used to value the award.

2.

The modified award’s vesting conditions are the same as those of the original award immediately before the modification.

3.

The classification of the modified award as an equity or liability instrument is the same as the original award’s classification immediately before the modification.

Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.



(j)

   New and amended accounting standards

(i)

Effective January 1, 2017, the Company adopted ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments, which impacts entities that are issuers of or investors in debt instruments – or hybrid financial instruments determined to have a debt host – with embedded call (put) options. One of the criteria for bifurcating an embedded derivative is assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to those of their debt hosts. The amendments of ASU 2016-06 clarify the steps required in making this assessment for contingent call (put) options that can accelerate the payment of principal on debt instruments. Specifically, ASU 2016-06 requires the call (or put) options to be assessed solely in accordance with a four-step decision sequence. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the triggering event is related to interest rates or credit risks. The standard was applied on a modified retrospective basis to existing debt instruments as of January 1, 2017. Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.



(ii)

Effective January 1, 2017, the Company adopted ASU 2016-09,  Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which requires an entity to recognize share-based payment (“SBP”) award income tax effects in the consolidated income statement when the awards vest or are settled. Consequently, the requirement for entities to track additional paid-in capital (“APIC”) pools is eliminated. Other amendments include:

·

All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the consolidated income statement. The tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. Excess tax benefits are recognized regardless of whether the benefit reduces taxes payable in the current period. These amendments were applied prospectively.

·

Because excess taxes no longer flow through APIC, when applying the treasury stock method in calculating diluted earnings per share (“EPS”), the assumed proceeds will no longer include any estimated excess taxes. Excess tax benefits increase assumed proceeds, which results in more hypothetical shares being reacquired. The incremental number of dilutive shares for diluted EPS is calculated as the number of shares from the assumed exercise of the stock less the hypothetical shares reacquired. Therefore, removing excess tax benefits

from the equation results in fewer hypothetical shares being reacquired, increasing the incremental number of dilutive shares.

·

Excess tax benefits are classified along with other income tax cash flows as an operating activity in the statement of cash flows. The Company elected to apply this amendment prospectively.

·

An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. Since forfeiture rates of the Company’s stock awards have historically been nominal and represent an insignificant assumption used in management’s estimate of the fair value of those awards, the Company has elected to account for forfeitures as they occur. This accounting policy change was applied on a modified retrospective basis and did not have an impact on the Company’s consolidated financial statements.

·

The threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions. This amendment was applied on a modified retrospective basis.

·

Cash paid by an employer when directly withholding shares for tax-withholding purposes is classified as a financing activity in the statement of cash flows. This amendment was applied prospectively.

Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

2.  Significant accounting policies (continued)

(k)

   Recent accounting standards not yet adopted

(i)

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In particular, it moves away from the current industry and transaction specific requirements. ASU 2014-09 creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include: 

1.

Identifying the contract(s) with the customer,

2.

Identifying the separate performance obligations in the contract,

3.

Determining the transaction price,

4.

Allocating the transaction price to the separate performance obligations, and

5.

Recognizing revenue as each performance obligation is satisfied.

The amendments also contain extensive disclosure requirements designed to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB delayed the effective date of ASU 2014-09 by one year so that ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. ASU 2014-09 permits the use of either the retrospective or modified retrospective (cumulative effect) transition method.



In 2015, the Company established a global new revenue accounting standard adoption team, consisting of financial reporting and accounting advisory representatives from across all geographical regions and business operations (the “Team”). The Team developed an adoption framework that continues to be used as guidance in identifying the Company’s significant contracts with customers. In 2016, the Team commenced its analysis, with the initial focus being on the impact of the amendments on accounting for the Company’s straight commission contracts, underwritten (inventory and guarantee) commission contracts, and ancillary service contracts. The Team is currently in the process of identifying the appropriate changes to our business processes, systems, and controls required to adopt the amendments based on preliminary findings.



Since its inception, the Team has regularly reported the findings and progress of the adoption project to management and the Audit Committee. Based on these findings and analysis, management has determined that the Company will not early adopt ASU 2014-09. The Company had previously planned on using a modified retrospective (cumulative-effect) method of adoption. The reason for not early adopting and for electing to use a modified retrospective method was primarily due to the Company’s acquisition of IronPlanet Holdings, Inc. (“IronPlanet”) on May 31, 2017.  The IronPlanet acquisition added complexity to applying the amendments retrospectively, and as such, the modified retrospective method of adoption was chosen.



As the Team continues to make progress in its adoption project, it now believes that it will be able to adopt ASU 2014-09 using a full retrospective method, which it anticipates will provide more useful comparative information to financial statement users. The Company also continues to evaluate recently issued guidance on practical expedients as part of the adoption method decision.



2.  Significant accounting policies (continued)

(k)   Recent accounting standards not yet adopted (continued)

The Team concluded that one of the most significant impacts of the adoption of ASU 2014-09 will be a change in the presentation of revenue from the majority of inventory, ancillary service, and Ritchie Bros. Logistical Services contracts as gross as a principal versus net as an agent.  The Team’s analysis of these significant contracts with customers was aided by the FASB issuing ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations, focusing on whether an entity controls a specified good or service before that good or service is transferred to a customer.



SEC Regulation S-X Rule 5-03.1 requires revenue from the sale of tangible products to be presented as a separate line item of the face of the consolidated income statement from revenues from services where income from one or both of those classes is more than 10 percent the sum of total revenues. Similarly, SEC Regulation Rule 5-03.2 requires the costs related to those revenue classes to be presented in the same manner. Based on historical information, the Team expects revenue from inventory contracts that are recognized gross as a principal selling tangible products to exceed 10 percent of total revenues.



Presenting most inventory contract revenues gross as a principal selling a tangible product versus net as an agent providing a service will significantly change the face of the Company’s consolidated income statement. Currently, all revenue from inventory sales is presented net of costs within service revenues on the income statement. After ASU 2014-09 is adopted, service revenues will exclude revenue from inventory sales and cost of inventory sold for inventory contracts recorded on a gross basis. Those amounts will instead be presented gross as separate line items on the face of the consolidated income statement in accordance with SEC Regulation S-X Rules 5-03.1 and 5-03.2. Ancillary service revenues will be presented within service revenues, but on a gross basis, with ancillary service costs presented separately within costs of services.



The Team, together with oversight from the Audit Committee, will also continue to closely monitor FASB activity related to ASU 2014-09 to conclude on specific interpretative issues. Over the remaining term until ASU 2014-09 takes effect, the Team will complete its assessment of the impact of the new standard on remaining contracts with customers, as well as evaluate the impact on financial statement disclosures and processes that capture information required for the revised financial statement presentation. The Team will also continue to work with management to determine the impact of the change in presentation on the key performance metrics used to evaluate operational performance of the Company.



Expected impact to reported results

While continuing to assess all potential impacts of adoption of ASU 2014-09, the Team’s current analysis indicates that the most significant change will be the gross versus net presentation described above. This presentation is expected to increase the amount of revenue reported compared to the current presentation. Presenting these revenues gross as a principal versus net as an agent has no impact on operating income. The Company expects the effects of this change to be as follows:





2.  Significant accounting policies (continued)

(k)  Recent accounting standards not yet adopted (continued)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



As reported

 

 

New revenue standard

Three months ended September 30,

2017 

 

2016 

 

Three months ended September 30,

2017

2016



 

 

 

 

 

 

Revenue from inventory sales

$

82,213 

 

$

176,381 



 

 

 

 

 

 

Service revenues

 

145,843 

 

 

124,595 

Revenues

$

141,047 

 

$

128,876 

 

Total revenues

 

228,056 

 

 

300,976 



 

 

 

 

 

 

Cost of inventory sold

 

(73,131)

 

 

(159,850)

Costs of services, excluding

 

 

 

 

 

 

 

 

 

 

 

 

depreciation and amortization ("D&A")

 

(19,583)

 

 

(14,750)

 

Costs of services, excluding D&A

 

(33,461)

 

 

(27,000)



$

121,464 

 

$

114,126 

 

Gross profit

$

121,464 

 

$

114,126 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



As reported

 

 

New revenue standard

Nine months ended September 30,

2017 

 

2016 

 

Nine months ended September 30,

2017

2016



 

 

 

 

 

 

Revenue from inventory sales

$

238,515 

 

$

411,970 



 

 

 

 

 

 

Service revenues

 

442,474 

 

 

420,177 

Revenues

$

431,732 

 

$

419,626 

 

Total revenues

 

680,989 

 

 

832,147 



 

 

 

 

 

 

Cost of inventory sold

 

(209,151)

 

 

(376,364)

Costs of services, excluding D&A

 

(53,987)

 

 

(49,821)

 

Costs of services, excluding D&A

 

(94,093)

 

 

(85,978)



$

377,745 

 

$

369,805 

 

Gross profit

$

377,745 

 

$

369,805 



(i)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize almost all leases, including operating leases, on the balance sheet through a right-of-use asset and a corresponding lease liability. For short-term leases, defined as those with a term of 12 months or less, the lessee is permitted to make an accounting policy election not to recognize the lease assets and liabilities, and instead recognize the lease expense generally on a straight-line basis over the lease term. The accounting treatment under this election is consistent with current operating lease accounting. No extensive amendments were made to lessor accounting, but amendments of note include changes to the definition of initial direct costs and accounting for collectability uncertainties in a lease.



ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Both lessees and lessors must apply ASU 2016-02 using a “modified retrospective transition”, which reflects the new guidance from the beginning of the earliest period presented in the financial statements. However, lessees and lessors can elect to apply certain practical expedients on transition. 



Management continues to perform a detailed inventory and analysis of all the Company’s leases, of which there are approximately 395 operating and 90 finance leases for which the Company is a lessee at the reporting date. The most significant operating leases in terms of the amount of rental charges and duration of the contract are for various auction sites and offices located in North America, Europe, the Middle East, and Asia. However, in terms of the number of leases, the majority consist of leases for computer, automotive, and yard equipment.

2.  Significant accounting policies (continued)

(k)  Recent accounting standards not yet adopted (continued)

The Company continues to evaluate the new guidance to determine the impact it will have on its consolidated financial statements. Under the expectation that the majority, if not all, of the operating leases will be brought onto the Company’s balance sheet on adoption of ASU 2016-02, management is also investigating the functionality within the Company’s systems to automate the lease accounting process.



The adoption of ASU 2016-02 is expected to add complexity to the accounting for leases, as well as require extensive system and process changes to manage the large number of operating leases that the Company anticipates will be brought onto its balance sheet. As a result, management has determined that the Company will not early adopt ASU 2016-02, and will continue to evaluate the elections available to the Company involving the application of practical expedients on transition.



(ii)

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, focusing on whether an entity controls a specified good or service before that good or service is transferred to a customer. Where such control exists – i.e. where the entity is required to provide the specified good or service itself – the entity is a ‘principal’. Where the entity is required to arrange for another party to provide the good or service, it is an agent.



The effective date and transition requirements of ASU 2016-08 are the same as for ASU 2014-09, which is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The impact of adoption of ASU 2016-08 on the Company’s consolidated financial statements has been considered as part of the ASU 2014-09 adoption project discussed above.



(iii)

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.



(iv)

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, whose amendments provide a screen to determine when an integrated set of assets and activities does not constitute a business as defined by Topic 805. Specifically, the amendments require that a set is not a business when substantially all the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets. This screen reduces the number of transactions that need to be further evaluated and as such, it is anticipated that more acquisitions will be accounted for as asset acquisitions rather than business combinations. If the screen is not met, the amendments:

1)

Require that the set must, at a minimum, include an input and a substantive process that together significantly contribute to the ability to create an output in order to be considered a business; and

2)

Remove the evaluation of whether a market participant could replace missing elements.

2.  Significant accounting policies (continued)

(k)   Recent accounting standards not yet adopted (continued)

The amendments also provide a framework to assist in evaluating whether both an input and a substantive process are present, and this framework includes two sets of criteria to consider that depend on whether a set has outputs. Finally, the amendments narrow the definition of the term “output” so the term is consistent with how outputs are described in Topic 606 Revenue from Contracts with Customers.  



ASU 2017-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The amendments are applied prospectively on or after the effective date. No disclosures are required at transition. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.



(v)

In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope of Subtopic 610-20 and adds clarity around accounting for partial sales of nonfinancial assets and the identification of, allocation of consideration to, and derecognition of distinct nonfinancial assets. The amendments also define ‘in substance nonfinancial assets’, which are within the scope of Subtopic 610-20, and clarify that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty.



ASU 2017-05 is effective at the same time as ASU 2014-09, which is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The amendments in ASU 2017-05 must be applied at the same time as the amendments in ASU 2014-09. Entities may elect to apply these amendments retrospectively to each period presented in the financial statements or using a modified retrospective basis as of the beginning of the fiscal year of adoption. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

Significant Accounting Policies (Tables)



 

 

 

 



 

 

 

 

Asset

Basis

 

Rate / term

 

Trade names and trademarks

Straight-line

 

3 - 15 years or indefinite-lived

 

Customer relationships

Straight-line

 

6 - 20 years

 

Software assets

Straight-line

 

3 - 7 years

 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



As reported

 

 

New revenue standard

Nine months ended September 30,

2017 

 

2016 

 

Nine months ended September 30,

2017

2016



 

 

 

 

 

 

Revenue from inventory sales

$

238,515 

 

$

411,970 



 

 

 

 

 

 

Service revenues

 

442,474 

 

 

420,177 

Revenues

$

431,732 

 

$

419,626 

 

Total revenues

 

680,989 

 

 

832,147 



 

 

 

 

 

 

Cost of inventory sold

 

(209,151)

 

 

(376,364)

Costs of services, excluding D&A

 

(53,987)

 

 

(49,821)

 

Costs of services, excluding D&A

 

(94,093)

 

 

(85,978)



$

377,745 

 

$

369,805 

 

Gross profit

$

377,745 

 

$

369,805 



Segmented Information (Tables)
Schedule of Revenue and (Loss) Income Before Taxes by Segment



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended September 30, 2017

 

 

Nine months ended September 30, 2017



Auctions and Marketplaces

 

Other

 

Consolidated

 

Auctions and Marketplaces

 

Other

 

Consolidated

 

Revenues

$

130,242 

 

$

10,805 

 

$

141,047 

 

$

400,565 

 

$

31,167 

 

$

431,732 

 

Costs of services, excluding D&A

 

(18,383)

 

 

(1,200)

 

 

(19,583)

 

 

(51,948)

 

 

(2,039)

 

 

(53,987)

 

Selling, general and administrative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      ("SG&A") expenses

 

(81,964)

 

 

(3,371)

 

 

(85,335)

 

 

(220,555)

 

 

(9,732)

 

 

(230,287)

 

Impairment loss

 

 -

 

 

 -

 

 

 -

 

 

(8,911)

 

 

 -

 

 

(8,911)

 

Segment profit

$

29,895 

 

$

6,234 

 

$

36,129 

 

$

119,151 

 

$

19,396 

 

$

138,547 

 

Acquisition-related costs

 

 

 

 

 

 

 

(3,587)

 

 

 

 

 

 

 

 

(35,162)

 

D&A expenses

 

 

 

 

 

 

 

(14,837)

 

 

 

 

 

 

 

 

(37,047)

 

Gain on disposition of Property, plant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      and equipment ("PPE")

 

 

 

 

 

 

 

42 

 

 

 

 

 

 

 

 

1,071 

 

Foreign exchange gain (loss)

 

 

 

 

 

 

 

(816)

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

$

16,931 

 

 

 

 

 

 

 

$

67,416 

 

Other expense

 

 

 

 

 

 

 

(9,966)

 

 

 

 

 

 

 

 

(20,965)

 

Income tax recovery (expense)

 

 

 

 

 

 

 

3,358 

 

 

 

 

 

 

 

 

(7,982)

 

Net income

 

 

 

 

 

 

$

10,323 

 

 

 

 

 

 

 

$

38,469 

 

5.Segmented information (continued)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended September 30, 2016

 

 

Nine months ended September 30, 2016



Auctions and Marketplaces

 

Other

 

Consolidated

 

Auctions and Marketplaces

 

Other

 

Consolidated

 

Revenues

$

121,111 

 

$

7,765 

 

$

128,876 

 

$

395,228 

 

$

24,398 

 

$

419,626 

 

Costs of services, excluding D&A

 

(14,493)

 

 

(257)

 

 

(14,750)

 

 

(49,213)

 

 

(608)

 

 

(49,821)

 

SG&A expenses

 

(65,346)

 

 

(2,947)

 

 

(68,293)

 

 

(200,967)

 

 

(8,428)

 

 

(209,395)

 

Impairment loss

 

(28,243)

 

 

 -

 

 

(28,243)

 

 

(28,243)

 

 

 -

 

 

(28,243)

 

Segment profit

$

13,029 

 

$

4,561 

 

$

17,590 

 

$

116,805 

 

$

15,362 

 

$

132,167 

 

Acquisition-related costs

 

 

 

 

 

 

 

(5,398)

 

 

 

 

 

 

 

 

(7,198)

 

D&A expenses

 

 

 

 

 

 

 

(10,196)

 

 

 

 

 

 

 

 

(30,560)

 

Gain on disposition of PPE

 

 

 

 

 

 

 

570 

 

 

 

 

 

 

 

 

1,017 

 

Foreign exchange loss

 

 

 

 

 

 

 

(281)

 

 

 

 

 

 

 

 

(332)

 

Operating income

 

 

 

 

 

 

$

2,285 

 

 

 

 

 

 

 

$

95,094 

 

Other income (expense)

 

 

 

 

 

 

 

(105)

 

 

 

 

 

 

 

 

420 

 

Income tax expense

 

 

 

 

 

 

 

(7,180)

 

 

 

 

 

 

 

 

(29,929)

 

Net income (loss)

 

 

 

 

 

 

$

(5,000)

 

 

 

 

 

 

 

$

65,585 

 



Revenues (Tables)



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Commissions

$

97,683 

 

$

96,110 

 

$

310,007 

 

$

314,084 

 

Fees

 

43,364 

 

 

32,766 

 

 

121,725 

 

 

105,542 

 



$

141,047 

 

$

128,876 

 

$

431,732 

 

$

419,626 

 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Revenue from inventory sales

$

93,275 

 

$

176,381 

 

$

255,156 

 

$

411,970 

 

Cost of inventory sold

 

(82,733)

 

 

(159,850)

 

 

(222,956)

 

 

(376,364)

 



$

10,542 

 

$

16,531 

 

$

32,200 

 

$

35,606 

 



Operating Expenses (Tables)



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Employee compensation expenses

$

10,032 

 

$

6,593 

 

$

24,321 

 

$

21,731 

 

Buildings, facilities and technology expenses

 

1,872 

 

 

1,709 

 

 

5,819 

 

 

6,015 

 

Travel, advertising and promotion expenses

 

5,562 

 

 

4,991 

 

 

17,644 

 

 

18,287 

 

Other costs of services

 

2,117 

 

 

1,457 

 

 

6,203 

 

 

3,788 

 



$

19,583 

 

$

14,750 

 

$

53,987 

 

$

49,821 

 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Employee compensation expenses

$

55,560 

 

 

42,370 

 

$

147,420 

 

$

133,370 

 

Buildings, facilities and technology expenses

 

13,494 

 

 

12,466 

 

 

39,083 

 

 

36,671 

 

Travel, advertising and promotion expenses

 

8,431 

 

 

6,273 

 

 

21,218 

 

 

18,595 

 

Professional fees

 

3,381 

 

 

3,675 

 

 

9,705 

 

 

9,524 

 

Other SG&A expenses

 

4,469 

 

 

3,509 

 

 

12,861 

 

 

11,235 

 



$

85,335 

 

$

68,293 

 

$

230,287 

 

$

209,395 

 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

IronPlanet: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Stock option compensation

 

 

 

 

 

 

 

 

 

 

 

 

expense (note 20)

$

 -

 

$

 -

 

$

4,752 

 

$

 -

 

Legal costs

 

248 

 

 

2,264 

 

 

8,843 

 

 

2,264 

 

Other acquisition-related costs

 

2,464 

 

 

2,250 

 

 

18,996 

 

 

2,250 

 

Mascus: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

126 

 

 

262 

 

 

404 

 

 

701 

 

Other acquisition-related costs

 

 -

 

 

 -

 

 

22 

 

 

749 

 

Xcira:

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

447 

 

 

305 

 

 

1,112 

 

 

917 

 

Petrowsky: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

134 

 

 

140 

 

 

554 

 

 

140 

 

Other acquisition-related costs

 

 -

 

 

177 

 

 

 

 

177 

 

Kramer: (note 22)

 

 

 

 

 

 

 

 

 

 

 

 

Continuing employment costs

 

122 

 

 

 -

 

 

351 

 

 

 -

 

Other acquisition-related costs

 

 -

 

 

 -

 

 

78 

 

 

 -

 

Other

 

46 

 

 

 -

 

 

47 

 

 

 -

 



$

3,587 

 

$

5,398 

 

$

35,162 

 

$

7,198 

 





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,

Nine months ended September 30,

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

 

Depreciation expense

$

7,228 

 

$

7,751 

 

$

20,813 

 

$

23,466 

 

Amortization expense

 

7,609 

 

 

2,445 

 

 

16,234 

 

 

7,094 

 



$

14,837 

 

$

10,196 

 

$

37,047 

 

$

30,560 

 



Earnings Per Share Attributable to Stockholders (Tables)
Computation of Basic and Diluted Earnings Per Share



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30, 2017

 

September 30, 2017



 

Net income

 

WA

 

 

 

 

 

Net income

 

WA

 

 

 



 

attributable to

 

number

 

 

Per share

 

 

attributable to

 

number

 

 

Per share



 

stockholders

 

of shares

 

 

amount

 

 

stockholders

 

of shares

 

 

amount

Basic

$

10,261 

 

107,120,618 

 

$

0.10 

 

$

38,273 

 

106,993,358 

 

$

0.36 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PSUs

 

 -

 

214,304 

 

 

 -

 

 

(50)

 

337,570 

 

 

 -

Stock options

 

 -

 

843,381 

 

 

(0.01)

 

 

 -

 

738,696 

 

 

(0.01)

Diluted

$

10,261 

 

108,178,303 

 

$

0.09 

 

$

38,223 

 

108,069,624 

 

$

0.35 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30, 2016

 

September 30, 2016



 

Net loss

 

WA

 

 

 

 

 

Net income

 

WA

 

 

 



 

attributable to

 

number

 

 

Per share

 

 

attributable to

 

number

 

 

Per share



 

stockholders

 

of shares

 

 

amount

 

 

stockholders

 

of shares

 

 

amount

Basic

$

(5,137)

 

106,622,376 

 

$

(0.05)

 

$

63,979 

 

106,595,088 

 

$

0.60 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PSUs

 

 -

 

81,610 

 

 

 -

 

 

 -

 

27,203 

 

 

 -

Stock options

 

 -

 

821,065 

 

 

 -

 

 

 -

 

599,099 

 

 

 -

Diluted

$

(5,137)

 

107,525,051 

 

$

(0.05)

 

$

63,979 

 

107,221,390 

 

$

0.60 



Supplemental Cash Flow Information (Tables)



 

 

 

 

 

 



 

 

 

 

 

 

Nine months ended September 30,

 

2017 

 

 

2016 

 

Trade and other receivables

 

(139,411)

 

 

(129,980)

 

Inventory

 

(16,460)

 

 

15,257 

 

Advances against auction contracts

 

601 

 

 

914 

 

Prepaid expenses and deposits

 

4,498 

 

 

(774)

 

Income taxes receivable

 

(8,062)

 

 

(3,387)

 

Auction proceeds payable

 

186,147 

 

 

172,273 

 

Trade and other payables

 

(9,451)

 

 

(5,331)

 

Income taxes payable

 

(3,075)

 

 

(9,410)

 

Share unit liabilities

 

(5,848)

 

 

2,413 

 

Other

 

1,608 

 

 

(4,995)

 

Net changes in operating

 

 

 

 

 

 

assets and liabilities

$

10,547 

 

$

36,980 

 





 

 

 

 

 

 



 

 

 

 

 

 

Nine months ended September 30,

 

2017 

 

 

2016 

 

Interest paid, net of interest capitalized

$

20,233 

 

$

3,859 

 

Interest received

 

2,460 

 

 

1,353 

 

Net income taxes paid

 

28,037 

 

 

44,869 

 



 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

Non-cash purchase of property, plant

 

 

 

 

 

 

and equipment under capital lease

 

6,851 

 

 

1,009 

 





 

 

 

 

 

 



 

 

 

 

 

 



 

September 30,

 

 

December 31,

 



 

2017 

 

 

2016 

 

Cash and cash equivalents

$

224,474 

 

$

207,867 

 

Restricted cash:

 

 

 

 

 

 

Current

 

89,846 

 

 

50,222 

 

Non-current

 

 -

 

 

500,000 

 

Cash, cash equivalents, and restricted cash

$

314,320 

 

$

758,089 

 





 

 

 

 



 

 

 

 

Nine months ended September 30,

 

2016 

 

 

Net changes in operating assets and liabilities:

 

 

 

 

As reported

$

38,982 

 

 

Current presentation

 

36,980 

 

 

Net cash provided by operating activities:

 

 

 

 

As reported

 

163,423 

 

 

Current presentation

 

161,421 

 

 

Effect of changes in foreign currency rates on cash:

 

 

 

 

As reported

 

4,339 

 

 

Current presentation

 

6,656 

 

 

Increase (decrease) in cash:

 

 

 

 

As reported

 

20,836 

 

 

Current presentation

 

21,151 

 

 

Cash and cash equivalents

 

230,984 

 

 

Total cash, cash equivalents and restricted cash

$

314,397 

 

 



Fair Value Measurement (Tables)
Fair Value Assets Recurring and Nonrecurring



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

September 30, 2017

 

 

December 31, 2016



 

Category

 

Carrying amount

 

 

Fair value

 

 

Carrying amount

 

 

Fair value

Fair values disclosed, recurring:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

Level 1

$

224,474 

 

$

224,474 

 

$

207,867 

 

$

207,867 

Restricted cash

 

Level 1

 

89,846 

 

 

89,846 

 

 

550,222 

 

 

550,222 

Short-term debt (note 18)

 

Level 2

 

8,567 

 

 

8,567 

 

 

23,912 

 

 

23,912 

Long-term debt (note 18)

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured notes

 

Level 1

 

486,886 

 

 

526,875 

 

 

495,780 

 

 

509,500 

Revolving loans

 

Level 2

 

 -

 

 

 -

 

 

99,926 

 

 

99,926 

Delayed draw term loans

 

Level 2

 

330,999 

 

 

335,447 

 

 

 -

 

 

 -



Assets Held For Sale (Tables)
Summary of Assets Held For Sale



 

 

 

 



 

 

 

 

Balance, December 31, 2016

 

 

$

632 

Reclassified from property, plant and equipment 

 

 

 

411 

Disposal

 

 

 

(389)

Balance, September 30, 2017

 

 

$

654 



Property, Plant and Equipment (Tables)
Schedule of Property, Plant and Equipment



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at September 30, 2017

 

Cost

 

 

Accumulated depreciation

 

 

Net book value

Land and improvements

$

377,491 

 

$

(67,164)

 

$

310,327 

Buildings

 

265,816 

 

 

(101,301)

 

 

164,515 

Yard and automotive equipment

 

60,125 

 

 

(39,489)

 

 

20,636 

Computer software and equipment

 

68,728 

 

 

(59,639)

 

 

9,089 

Office equipment

 

24,875 

 

 

(18,443)

 

 

6,432 

Leasehold improvements

 

21,369 

 

 

(14,492)

 

 

6,877 

Assets under development

 

12,619 

 

 

 -

 

 

12,619 



$

831,023 

 

$

(300,528)

 

$

530,495 







 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at December 31, 2016

 

Cost

 

 

Accumulated depreciation

 

 

Net book value

Land and improvements

$

362,283 

 

$

(60,576)

 

$

301,707 

Buildings

 

256,168 

 

 

(91,323)

 

 

164,845 

Yard and automotive equipment

 

55,352 

 

 

(38,560)

 

 

16,792 

Computer software and equipment

 

66,265 

 

 

(57,624)

 

 

8,641 

Office equipment

 

22,963 

 

 

(16,706)

 

 

6,257 

Leasehold improvements

 

20,199 

 

 

(12,541)

 

 

7,658 

Assets under development

 

9,130 

 

 

 -

 

 

9,130 



$

792,360 

 

$

(277,330)

 

$

515,030 



Intangible Assets (Tables)
Schedule of Indefinite-Lived and Definite-Lived Intangible Assets



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at September 30, 2017

 

Cost

 

 

Accumulated amortization

 

 

Net book value

Trade names and trademarks

$

54,229 

 

$

(347)

 

$

53,882 

Customer relationships

 

124,295 

 

 

(6,317)

 

 

117,978 

Software

 

96,860 

 

 

(22,155)

 

 

74,705 

Software under development

 

14,557 

 

 

 -

 

 

14,557 



$

289,941 

 

$

(28,819)

 

$

261,122 











 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

As at December 31, 2016

 

Cost

 

 

Accumulated amortization

 

 

Net book value

Trade names and trademarks

$

5,585 

 

$

(50)

 

$

5,535 

Customer relationships

 

25,618 

 

 

(1,072)

 

 

24,546 

Software

 

36,566 

 

 

(13,116)

 

 

23,450 

Software under development

 

18,773 

 

 

 -

 

 

18,773 



$

86,542 

 

$

(14,238)

 

$

72,304 



Goodwill (Tables)
Schedule of Goodwill



 

 

 

 

 



 

 

 

 

 

Balance, December 31, 2016

 

 

 

$

97,537 

Additions

 

 

 

 

567,785 

Foreign exchange movement

 

 

 

 

4,324 

Balance, September 30, 2017

 

 

 

$

669,646 



Equity-Accounted Investments (Tables)
Summary of Investments



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

Ownership

 

 

September 30,

 

 

December 31,



 

percentage

 

 

2017 

 

 

2016 

Cura Classis entities

 

48% 

 

$

4,650 

 

$

4,594 

Other equity investments

 

32% 

 

 

2,637 

 

 

2,732 



 

 

 

 

7,287 

 

 

7,326 



Debt (Tables)
Schedule of Debt



 

 

 

 

 

 

 



 

 

 

 

 

 

 



 

 

Carrying amount



 

 

September 30,

 

December 31,



 

2017 

 

 

2016 

Short-term debt

$

8,567 

 

$

23,912 



 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 



 

 

 

 

 

 

 



Revolving loans:

 

 

 

 



 

Denominated in Canadian dollars, unsecured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 2.380%, due in monthly installments of interest only, with the

 

 

 

 

 



 

committed, revolving credit facility available until October 2021

 

 -

 

 

69,926 



 

Denominated in United States dollars, unsecured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 2.075%, due in monthly installments of interest only, with the

 

 

 

 

 



 

committed, revolving credit facility available until October 2021

 

 -

 

 

30,000 



Delayed draw term loan:

 

 

 

 



 

Denominated in Canadian dollars, secured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 3.044%, due in monthly installments of interest only and

 

 

 

 

 



 

quarterly installments of principal, with the committed credit facility,

 

 

 

 

 



 

available until October 2021

 

189,050 

 

 

 -



 

Denominated in United States dollars, secured, bearing interest at a weighted

 

 

 

 

 



 

average rate of 3.157%, due in monthly installments of interest only and

 

 

 

 

 



 

quarterly installments of principal, with the committed credit facility,

 

 

 

 

 



 

available until October 2021

 

146,397 

 

 

 -



 

Less: unamortized debt issue costs

 

(4,448)

 

 

 -



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

 

(13,114)

 

 

(4,220)



 

 

 

817,885 

 

 

595,706 



 

 

 

 

 

 

 

Total debt

$

826,452 

 

$

619,618 



 

 

 

 

 

 

 

Long-term debt:

 

 

 

 

 

Current portion

$

16,985 

 

$

 -

Non-current portion

 

800,900 

 

 

595,706 



$

817,885 

 

$

595,706 



Equity and Dividends (Tables)
Schedule of Quarterly Dividends Declared and Paid



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Declaration date

 

Dividend per share

 

Record date

 

 

Total dividends

 

Payment date

Nine months ended September 30, 2017:

 

 

 

 

 

 

 

 

 

 

 

Fourth quarter 2016

January 23, 2017

 

$

0.1700 

 

February 10, 2017

 

$

18,160 

 

March 3, 2017

First quarter 2017

May 4, 2017

 

 

0.1700 

 

May 23, 2017

 

 

18,188 

 

June 13, 2017

Second quarter 2017

August 4, 2017

 

 

0.1700 

 

August 25, 2017

 

 

18,210 

 

September 15, 2017



 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

Fourth quarter 2015

January 15, 2016

 

$

0.1600 

 

February 12, 2016

 

$

17,154 

 

March 4, 2016

First quarter 2016

May 9, 2016

 

 

0.1600 

 

May 24, 2016

 

 

17,022 

 

June 14, 2016

Second quarter 2016

August 5, 2016

 

 

0.1700 

 

September 2, 2016

 

 

18,127 

 

September 23, 2016



 

 

 

 

 

 

 

 

 

 

 



Share-Based Payments (Tables)



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three months ended

 

Nine months ended



September 30,

 

September 30,



 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Stock option compensation expense:

 

 

 

 

 

 

 

 

 

 

 

SG&A expenses

$

2,920 

 

 

1,555 

 

$

6,244 

 

$

4,025 

Acquisition-related costs

 

 -

 

 

 -

 

 

4,752 

 

 

 -

Share unit expense (recovery):

 

 

 

 

 

 

 

 

 

 

 

Equity-classified PSUs

 

(176)

 

 

736 

 

 

1,871 

 

 

1,222 

Liability-classified share units

 

821 

 

 

1,515 

 

 

246 

 

 

8,295 

Employee share purchase plan -

 

 

 

 

 

 

 

 

 

 

 

employer contributions

 

468 

 

 

403 

 

 

1,350 

 

 

1,152 



$

4,033 

 

$

4,209 

 

$

14,463 

 

$

14,694 





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

 

WA

 



Common

 

 

WA

remaining

 

 

Aggregate



shares under

 

 

exercise

contractual

 

 

intrinsic



option

price

life (in years)

value

Outstanding, December 31, 2016

3,366,714 

 

$

24.02  7.5 

 

$

33,601 

Granted

960,057 

 

 

31.14 

 

 

 

 

Assumed in acquisition (note 22)

737,358 

 

 

14.26 

 

 

 

 

Exercised

(355,514)

 

 

22.32 

 

 

$

3,202 

Forfeited

(124,414)

 

 

18.85 

 

 

 

 

Outstanding, September 30, 2017

4,584,201 

 

$

21.92  7.6 

 

$

23,721 

Exercisable, September 30, 2017

1,917,439 

 

$

23.25  6.2 

 

$

14,418 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Equity-classified awards

 

Liability-classified awards



PSUs

 

PSUs (1)

 

Restricted share units ("RSUs")

 

DSUs



 

 

WA grant

 

 

WA grant

 

 

WA grant

 

 

 

WA grant



 

 

 

date fair

 

 

 

date fair

 

 

 

date fair

 

 

 

 

date fair



Number

 

 

value

 

Number

 

value

 

Number

 

value

 

Number

 

 

value



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding, December 31, 2016

243,968 

 

$

27.48 

 

311,329 

$

23.96 

 

160,009 

$

23.37 

 

73,520 

 

$

25.41 

Granted

133,452 

 

 

30.31 

 

94,982 

 

31.40 

 

849 

 

32.47 

 

13,548 

 

 

30.77 

Reclassification on modification

81,533 

 

 

24.47 

 

(81,533)

 

24.66 

 

 -

 

 -

 

 -

 

 

 -

Vested and settled

(27,326)

 

 

26.82 

 

(49,873)

 

23.64 

 

(152,544)

 

23.26 

 

 -

 

 

 -

Forfeited

 -

 

 

 -

 

(15,806)

 

26.31 

 

 -

 

 -

 

 -

 

 

 -

Outstanding, September 30, 2017

431,627 

 

$

27.83 

 

259,099 

$

26.39 

 

8,314 

$

26.29 

 

87,068 

 

$

26.24 

(1)

Liability-classified PSUs include PSUs awarded under the employee PSU plan and the previous 2013 PSU plan, in place prior to 2015, that are cash-settled and not subject to market vesting conditions.





 

 



 

 

Nine months ended September 30,

2017  2016 

Risk free interest rate

2.0%  1.1% 

Expected dividend yield

2.14%  2.36% 

Expected lives of the stock options

5 years

5 years

Expected volatility

27.8%  26.9% 





 



 

Nine months ended September 30,

2017 

Risk free interest rate

0.8% 

Expected dividend yield

2.19% 

Expected lives of the stock options

0.4 years

Expected volatility

32.1% 





 

 

 



 

 

 

Nine months ended September 30,

 

2017  2016 

Risk free interest rate

 

1.4%  1.2% 

Expected dividend yield

 

1.92%  2.49% 

Expected lives of the PSUs

 

3 years

3 years

Expected volatility

 

28.2%  29.9% 

Average expected volatility of comparable companies

 

37.0%  37.0% 





 

 



 

 

Nine months ended September 30,

 

2017 

Risk free interest rate

 

1.6% 

Expected dividend yield

 

2.54% 

Expected lives of the PSU

 

4 years

Expected volatility

 

28.6% 



Business Combinations (Tables)



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended

 

Six months ended



 

June 30,

 

June 30,

Nine months ended September 30,

 

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Revenue

 

$

185,485 

 

$

187,089 

 

$

340,029 

 

$

349,893 

Net income

 

 

28,619 

 

 

32,021 

 

 

47,168 

 

 

11,671 

Basic earnings per share

 

 

0.27 

 

 

0.29 

 

 

0.44 

 

 

0.10 

Diluted earnings per share

 

 

0.26 

 

 

0.29 

 

 

0.43 

 

 

0.10 





 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

May 31, 2017

Cash consideration paid to former equity holders

 

 

 

 

$

723,810 

Settlement of IronPlanet's debt

 

 

 

 

 

36,313 

Settlement of IronPlanet's transaction costs

 

 

 

 

 

12,583 

Cash consideration paid on closing

 

 

 

 

 

772,706 

Cash consideration paid related to closing adjustments

 

 

 

 

 

1,771 

Less: cash and cash equivalents acquired

 

 

 

 

 

(95,626)

Less: restricted cash acquired

 

 

 

 

 

(3,000)

Acquisition of IronPlanet, net of cash acquired

 

 

 

 

$

675,851 



 

 

 

 

 

 

Cash consideration paid on closing

 

 

 

 

$

772,706 

Replacement stock option awards attributable to pre-

 

 

 

 

 

 

combination services

 

 

 

 

 

4,926 

Stock option compensation expense from accelerated vesting

 

 

 

 

 

 

of awards attributable to post-combination services

 

 

 

 

 

(2,596)

Cash consideration paid relating  to closing adjustments

 

 

 

 

 

1,771 

Settlement of pre-existing intercompany balances

 

 

 

 

 

(333)

Purchase price

 

 

 

 

$

776,474 





 

 

 



 

 

 



 

 

May 31, 2017

Purchase price

 

$

776,474 



 

 

 

Assets acquired:

 

 

 

Cash and cash equivalents

 

$

95,626 

Restricted cash

 

 

3,000 

Trade and other receivables

 

 

13,021 

Inventory

 

 

1,012 

Advances against auction contracts

 

 

4,623 

Prepaid expenses and deposits

 

 

1,233 

Income taxes receivable

 

 

170 

Property, plant and equipment

 

 

2,381 

Other non-current assets

 

 

2,551 

Deferred tax assets

 

 

1,497 

Intangible assets ~

 

 

188,000 



 

 

 

Liabilities assumed:

 

 

 

Auction proceeds payable

 

 

63,616 

Trade and other payables

 

 

14,511 

Income taxes payable

 

 

55 

Deferred tax liabilities

 

 

25,868 

Fair value of identifiable net assets acquired

 

 

209,064 

Goodwill acquired on acquisition

 

$

567,410 



~Intangible assets consist of indefinite-lived trade names and trademarks, customer relationships with estimated useful lives of ranging from six to 13 years, and a technology platform with an estimated useful life of 7 years.



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three months ended

 

Nine months ended



 

September 30,

 

September 30,

Nine months ended September 30,

 

 

2017 

 

 

2016 

 

 

2017 

 

 

2016 

Revenue

 

$

141,047 

 

$

153,817 

 

$

481,076 

 

$

503,711 

Net income (loss)

 

 

10,323 

 

 

(9,583)

 

 

57,491 

 

 

2,089 

Basic earnings (loss) per share

 

 

0.10 

 

 

(0.09)

 

 

0.54 

 

 

0.00 

Diluted earnings (loss) per share

 

 

0.09 

 

 

(0.09)

 

 

0.53 

 

 

0.00 







 

 



 

 

February 19, 2016

Purchase price

$

29,580 

Fair value of contingent consideration

 

3,431 

Non-controlling interests (1)

 

596 

Total fair value at Mascus Acquisition Date

 

33,607 



 

 

Fair value of assets acquired:

 

 

Cash and cash equivalents

$

1,457 

Trade and other receivables

 

1,290 

Prepaid expenses

 

528 

Property, plant and equipment

 

104 

Intangible assets (2)

 

14,817 



 

 

Fair value of liabilities assumed:

 

 

Trade and other payables

 

1,533 

Other non-current liabilities

 

37 

Deferred tax liabilities

 

2,683 

Fair value of identifiable net assets acquired

 

13,943 

Goodwill acquired on acquisition

$

19,664 



22.  Business combinations (continued)

(d)Mascus acquisition (continued)

Mascus purchase price allocation (continued)

(1)

The Company acquired 100% of Mascus and within the Mascus group of entities there were two subsidiaries that were not wholly-owned, one domiciled in the United States and one domiciled in Denmark. As such, the Company acquired non-controlling interests.  The fair value of each non-controlling interest was determined using an income approach based on cash flows of the respective entities that were attributable to the non-controlling interest. On May 27, 2016, Ritchie Bros. Holdings (America) Inc. acquired the remaining issued and outstanding shares of the Mascus subsidiary domiciled in the United States for cash consideration of $226,000.

(2)

Intangible assets consist of customer relationships with estimated useful lives of 17 years, indefinite-lived trade names, and software assets with estimated useful lives of five years.



 

 



 

 



 

August 1, 2016

Purchase price

$

6,250 

Fair value of contingent consideration

 

1,433 

Total fair value at Petrowsky Acquisition Date

 

7,683 



 

 

Assets acquired:

 

 

Property, plant and equipment

$

441 

Intangible assets ~

 

2,934 

Fair value of identifiable net assets acquired

 

3,375 

Goodwill acquired on acquisition

$

4,308 

~Consists of customer relationships with estimated useful lives of 10 years.



 

November 15, 2016

Purchase price

$

11,138 

Deferred purchase note consideration

 

223 

Fair value of contingent consideration

 

538 

Total fair value at Petrowsky Acquisition Date

 

11,899 



 

 

Assets acquired:

 

 

Property, plant and equipment

$

399 

Intangible assets ~

 

4,678 

Fair value of identifiable net assets acquired

 

5,077 

Goodwill acquired on acquisition

$

6,822 



~Consists of customer relationships and trade names with estimated useful lives of 10 and three years, respectively.    

Significant Accounting Policies (Narrative) (Details)
9 Months Ended
Sep. 30, 2017
item
Significant Accounting Policies [Abstract]
 
Number of operating leases
395 
Number of finance leases
90 
Number of stock option compensation plans
Significant Accounting Policies (Amortization of Intangible Assets) (Details)
9 Months Ended
Sep. 30, 2017
Minimum [Member] |
Trade Names and Trademarks [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
3 years 
Minimum [Member] |
Customer Relationships [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
6 years 
Minimum [Member] |
Software Assets [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
3 years 
Maximum [Member] |
Trade Names and Trademarks [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
15 years 
Maximum [Member] |
Customer Relationships [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
20 years 
Maximum [Member] |
Software Assets [Member]
 
Finite-Lived Intangible Assets [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
7 years 
Significant Accounting Policies (Schedule of Prospective Adoption of New Accounting Pronouncements) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
Revenues
$ 141,047 
$ 128,876 
$ 431,732 
$ 419,626 
Costs of services, excluding depreciation and amortization ("D&A")
19,583 
14,750 
53,987 
49,821 
Gross revenue, net of expenses
121,464 
114,126 
377,745 
369,805 
ASU 2014-09 [Member] |
As Reported [Member]
 
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
Revenues
141,047 
128,876 
431,732 
419,626 
Costs of services, excluding depreciation and amortization ("D&A")
(19,583)
(14,750)
(53,987)
(49,821)
Gross revenue, net of expenses
121,464 
114,126 
377,745 
369,805 
ASU 2014-09 [Member] |
New Revenue Standard Adjustment [Member]
 
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
Revenue from inventory sales
82,213 
176,381 
238,515 
411,970 
Revenues
145,843 
124,595 
442,474 
420,177 
Total revenues
228,056 
300,976 
680,989 
832,147 
Cost of inventory sold
(73,131)
(159,850)
(209,151)
(376,364)
Costs of services, excluding depreciation and amortization ("D&A")
(33,461)
(27,000)
(94,093)
(85,978)
Gross revenue, net of expenses
$ 121,464 
$ 114,126 
$ 377,745 
$ 369,805 
Segmented Information (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
Goodwill
$ 669,646 
$ 97,537 
Auctions and Marketplaces [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Goodwill
648,819 
 
Other Reporting Unit [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Goodwill
$ 20,827 
 
Segmented Information (Schedule of Revenue and (Loss) Income Before Taxes by Segment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Segment Reporting [Line Items]
 
 
 
 
Revenues
$ 141,047 
$ 128,876 
$ 431,732 
$ 419,626 
Costs of services, excluding D&A
(19,583)
(14,750)
(53,987)
(49,821)
SG&A expenses
(85,335)
(68,293)
(230,287)
(209,395)
Impairment loss
(28,243)
(8,911)
(28,243)
Acquisition-related costs
(3,587)
(5,398)
(35,162)
(7,198)
Depreciation and amortization expenses
(14,837)
(10,196)
(37,047)
(30,560)
Gain on disposition of property, plant and equipment
42 
570 
1,071 
1,017 
Foreign exchange gain (loss)
(816)
(281)
(332)
Operating income
16,931 
2,285 
67,416 
95,094 
Other income (expense)
(9,966)
(105)
(20,965)
420 
Income tax recovery (expense)
(3,358)
7,180 
7,982 
29,929 
Net income (loss)
10,323 
(5,000)
38,469 
65,585 
Operating Segments [Member]
 
 
 
 
Segment Reporting [Line Items]
 
 
 
 
Revenues
141,047 
128,876 
431,732 
419,626 
Costs of services, excluding D&A
(19,583)
(14,750)
(53,987)
(49,821)
SG&A expenses
(85,335)
(68,293)
(230,287)
(209,395)
Impairment loss
 
(28,243)
(8,911)
(28,243)
Operating income
36,129 
17,590 
138,547 
132,167 
Segment Reconciling Items [Member]
 
 
 
 
Segment Reporting [Line Items]
 
 
 
 
Acquisition-related costs
(3,587)
(5,398)
(35,162)
(7,198)
Depreciation and amortization expenses
(14,837)
(10,196)
(37,047)
(30,560)
Gain on disposition of property, plant and equipment
42 
570 
1,071 
1,017 
Foreign exchange gain (loss)
(816)
(281)
(332)
Auctions and Marketplaces [Member] |
Operating Segments [Member]
 
 
 
 
Segment Reporting [Line Items]
 
 
 
 
Revenues
130,242 
121,111 
400,565 
395,228 
Costs of services, excluding D&A
(18,383)
(14,493)
(51,948)
(49,213)
SG&A expenses
(81,964)
(65,346)
(220,555)
(200,967)
Impairment loss
 
(28,243)
(8,911)
(28,243)
Operating income
29,895 
13,029 
119,151 
116,805 
Other Reporting Unit [Member] |
Operating Segments [Member]
 
 
 
 
Segment Reporting [Line Items]
 
 
 
 
Revenues
10,805 
7,765 
31,167 
24,398 
Costs of services, excluding D&A
(1,200)
(257)
(2,039)
(608)
SG&A expenses
(3,371)
(2,947)
(9,732)
(8,428)
Operating income
$ 6,234 
$ 4,561 
$ 19,396 
$ 15,362 
Revenues (Revenue from the Rendering of Services) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenues [Abstract]
 
 
 
 
Commissions
$ 97,683 
$ 96,110 
$ 310,007 
$ 314,084 
Fees
43,364 
32,766 
121,725 
105,542 
Total revenues
$ 141,047 
$ 128,876 
$ 431,732 
$ 419,626 
Revenues (Net Profits on Inventory Sales Included in Commissions) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenues [Abstract]
 
 
 
 
Revenue from inventory sales
$ 93,275 
$ 176,381 
$ 255,156 
$ 411,970 
Cost of inventory sold
(82,733)
(159,850)
(222,956)
(376,364)
Net profits on inventory
$ 10,542 
$ 16,531 
$ 32,200 
$ 35,606 
Operating Expenses (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Property, Plant and Equipment [Line Items]
 
 
 
 
Impairment loss
$ 0 
$ 28,243 
$ 8,911 
$ 28,243 
EquipmentOne [Member]
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Goodwill impairment
 
23,574 
 
 
Impairment loss
 
$ 4,669 
 
 
Operating Expenses (Schedule of Direct Operating Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Operating Expenses [Abstract]
 
 
 
 
Employee compensation expenses
$ 10,032 
$ 6,593 
$ 24,321 
$ 21,731 
Buildings, facilities and technology expenses
1,872 
1,709 
5,819 
6,015 
Travel, advertising and promotion expenses
5,562 
4,991 
17,644 
18,287 
Other costs of services
2,117 
1,457 
6,203 
3,788 
Cost of Services, Total
$ 19,583 
$ 14,750 
$ 53,987 
$ 49,821 
Operating Expenses (Schedule of Selling, General and Administrative Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Operating Expenses [Abstract]
 
 
 
 
Employee compensation expenses
$ 55,560 
$ 42,370 
$ 147,420 
$ 133,370 
Buildings, facilities and technology expenses
13,494 
12,466 
39,083 
36,671 
Travel, advertising and promotion expense
8,431 
6,273 
21,218 
18,595 
Professional fees
3,381 
3,675 
9,705 
9,524 
Other SG&A expenses
4,469 
3,509 
12,861 
11,235 
Total selling, general and administrative expenses
$ 85,335 
$ 68,293 
$ 230,287 
$ 209,395 
Operating Expenses (Schedule of Depreciation and Amortization Expenses) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Operating Expenses [Abstract]
 
 
 
 
Depreciation expense
$ 7,228 
$ 7,751 
$ 20,813 
$ 23,466 
Amortization expense
7,609 
2,445 
16,234 
7,094 
Total depreciation and amortization expenses
$ 14,837 
$ 10,196 
$ 37,047 
$ 30,560 
Income Taxes (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Taxes [Abstract]
 
 
 
 
Effective income tax rate
(48.20%)
329.40% 
17.20% 
31.30% 
Earnings Per Share Attributable to Stockholders (Narrative) (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Performance Share Units [Member]
 
 
 
 
Potential common share excluded from computation of diluted earnings per share (shares)
 
253,646 
 
231,671 
Stock Options [Member]
 
 
 
 
Potential common share excluded from computation of diluted earnings per share (shares)
901,969 
585,257 
1,002,929 
Minimum [Member] |
Performance Share Units [Member]
 
 
 
 
Number of units available for grant as a percentage of target
 
 
0.00% 
 
Maximum [Member] |
Performance Share Units [Member]
 
 
 
 
Number of units available for grant as a percentage of target
 
 
200.00% 
 
Earnings Per Share Attributable to Stockholders (Computation of Basic and Diluted Earnings Per Share) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Earnings Per Share Attributable to Stockholders [Abstract]
 
 
 
 
Basic, Net income attributable to stockholders
$ 10,261 
$ (5,137)
$ 38,273 
$ 63,979 
Effect of dilutive securities: PSUs, Net income attributable to stockholders
 
 
(50)
 
Diluted, Net income attributable to stockholders
$ 10,261 
$ (5,137)
$ 38,223 
$ 63,979 
Basic, WA number of shares
107,120,618 
106,622,376 
106,993,358 
106,595,088 
Effect of dilutive securities: PSUs, WA number of shares
214,304 
81,610 
337,570 
27,203 
Effect of dilutive securities: Stock options, WA number of shares
843,381 
821,065 
738,696 
599,099 
Diluted, WA number of shares
108,178,303 
107,525,051 
108,069,624 
107,221,390 
Basic, Per share amount
$ 0.10 
$ (0.05)
$ 0.36 
$ 0.60 
Effect of dilutive securities: Stock options, Per share amount
$ (0.01)
 
$ (0.01)
 
Diluted, Per share amount
$ 0.09 
$ (0.05)
$ 0.35 
$ 0.60 
Supplemental Cash Flow Information (Narrative) (Details) (5.375% Senior Unsecured Note, Due January 2025 [Member], USD $)
0 Months Ended 9 Months Ended
Dec. 21, 2016
Sep. 30, 2017
Dec. 31, 2016
Dec. 21, 2016
5.375% Senior Unsecured Note, Due January 2025 [Member]
 
 
 
 
Principal amount
 
$ 500,000,000 
 
$ 500,000,000 
Interest rate
 
5.375% 
5.375% 
5.375% 
Maturity date
Jan. 15, 2025 
Jan. 15, 2025 
 
 
Supplemental Cash Flow Information (Schedule of Net Changes In Operating Assets and Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Supplemental Cash Flow Information [Abstract]
 
 
Trade and other receivables
$ (139,411)
$ (129,980)
Inventory
(16,460)
15,257 
Advances against auction contracts
601 
914 
Prepaid expenses and deposits
4,498 
(774)
Income taxes receivable
(8,062)
(3,387)
Auction proceeds payable
186,147 
172,273 
Trade and other payables
(9,451)
(5,331)
Income taxes payable
(3,075)
(9,410)
Share unit liabilities
(5,848)
2,413 
Other
1,608 
(4,995)
Net changes in operating assets and liabilities
$ 10,547 
$ 36,980 
Supplemental Cash Flow Information (Schedule of Supplemental Cash Flow) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Supplemental Cash Flow Information [Abstract]
 
 
Interest paid, net of interest capitalized
$ 20,233 
$ 3,859 
Interest received
2,460 
1,353 
Net income taxes paid
28,037 
44,869 
Non-cash purchase of property, plant and equipment under capital lease
$ 6,851 
$ 1,009 
Supplemental Cash Flow Information (Schedule of Cash, Cash Equivalents and Restricted Cash) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
Supplemental Cash Flow Information [Abstract]
 
 
 
 
Cash and cash equivalents
$ 224,474 
$ 207,867 
$ 230,984 
 
Restricted cash, Current
89,846 
50,222 
 
 
Restricted cash, Non-current
 
500,000 
 
 
Cash, cash equivalents, and restricted cash
$ 314,320 
$ 758,089 
$ 314,397 
$ 293,246 
Supplemental Cash Flow Information (Schedule of Cash, Cash Equivalents and Restricted Cash Adjustments) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Dec. 31, 2015
Net changes in operating assets and liabilities
$ 10,547 
$ 36,980 
 
 
Net cash provided by (used in) operating activities
97,215 
161,421 
 
 
Effect of changes in foreign currency rates on cash
17,270 
6,656 
 
 
Increase (decrease) in cash
(443,769)
21,151 
 
 
Cash and cash equivalents
224,474 
230,984 
207,867 
 
Total cash, cash equivalents and restricted cash
314,320 
314,397 
758,089 
293,246 
As Reported [Member]
 
 
 
 
Net changes in operating assets and liabilities
 
38,982 
 
 
Net cash provided by (used in) operating activities
 
163,423 
 
 
Effect of changes in foreign currency rates on cash
 
4,339 
 
 
Increase (decrease) in cash
 
$ 20,836 
 
 
Fair Value Measurement (Fair Value Assets Recurring and Nonrecurring) (Details) (Recurring [Member], USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Carrying Amount [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
$ 224,474 
$ 207,867 
Restricted Cash
89,846 
550,222 
Fair Value [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and cash equivalents
224,474 
207,867 
Restricted Cash
89,846 
550,222 
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
8,567 
23,912 
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
8,567 
23,912 
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
486,886 
495,780 
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
526,875 
509,500 
Revolving 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
 
99,926 
Revolving 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
 
99,926 
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
330,999 
 
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
$ 335,447 
 
Inventory (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Inventory [Abstract]
 
 
 
 
 
Inventory write down
$ 122 
$ 882 
$ 778 
$ 2,284 
 
Percentage of inventory held and is expected to be sold
100.00% 
 
100.00% 
 
93.00% 
Assets Held For Sale (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Timing of sale
12 months 
 
Proceeds on disposition of assets
$ 3,487 
$ 3,259 
Orlando, United States [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Proceeds on disposition of assets
953 
 
Gain on sale of assets
$ 564 
 
Assets Held For Sale (Summary of Assets Held For Sale) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Assets Held For Sale [Abstract]
 
Beginning balance
$ 632 
Reclassified from property, plant and equipment
411 
Disposal
(389)
Ending balance
$ 654 
Property, Plant And Equipment (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Property, Plant and Equipment [Abstract]
 
 
 
 
Interest capitalized
$ 40 
$ 42 
$ 78 
$ 65 
Interest cost rate
2.70% 
4.40% 
2.70% 
4.40% 
Property, Plant And Equipment (Schedule of Property, Plant and Equipment) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
Cost
$ 831,023 
$ 792,360 
Accumulated depreciation
(300,528)
(277,330)
Net book value
530,495 
515,030 
Land and Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
377,491 
362,283 
Accumulated depreciation
(67,164)
(60,576)
Net book value
310,327 
301,707 
Buildings [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
265,816 
256,168 
Accumulated depreciation
(101,301)
(91,323)
Net book value
164,515 
164,845 
Yard and Automotive Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
60,125 
55,352 
Accumulated depreciation
(39,489)
(38,560)
Net book value
20,636 
16,792 
Computer Software and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
68,728 
66,265 
Accumulated depreciation
(59,639)
(57,624)
Net book value
9,089 
8,641 
Office Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
24,875 
22,963 
Accumulated depreciation
(18,443)
(16,706)
Net book value
6,432 
6,257 
Leasehold Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
21,369 
20,199 
Accumulated depreciation
(14,492)
(12,541)
Net book value
6,877 
7,658 
Assets under Development [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Cost
12,619 
9,130 
Net book value
$ 12,619 
$ 9,130 
Intangible Assets (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Impairment loss
$ 0 
$ 28,243 
$ 8,911 
$ 28,243 
Interest costs, weighted average rate
 
 
2.70% 
5.32% 
Interest capitalized
40 
42 
78 
65 
EquipmentOne [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Impairment loss
 
4,669 
 
 
Customer Relationships [Member] |
EquipmentOne [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Impairment loss
 
4,669 
 
4,669 
Software Under Development [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Interest capitalized
$ 74 
$ 111 
$ 140 
$ 287 
Intangible Assets (Schedule Of Indefinite-Lived And Definite-Lived Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Indefinite-Lived and Finite-Lived Intangible Assets By Major Class [Line Items]
 
 
Cost
$ 289,941 
$ 86,542 
Accumulated amortization
(28,819)
(14,238)
Net book value
261,122 
72,304 
Trade Names and Trademarks [Member]
 
 
Indefinite-Lived and Finite-Lived Intangible Assets By Major Class [Line Items]
 
 
Cost
54,229 
5,585 
Accumulated amortization
(347)
(50)
Net book value
53,882 
5,535 
Customer Relationships [Member]
 
 
Indefinite-Lived and Finite-Lived Intangible Assets By Major Class [Line Items]
 
 
Cost
124,295 
25,618 
Accumulated amortization
(6,317)
(1,072)
Net book value
117,978 
24,546 
Software Assets [Member]
 
 
Indefinite-Lived and Finite-Lived Intangible Assets By Major Class [Line Items]
 
 
Cost
96,860 
36,566 
Accumulated amortization
(22,155)
(13,116)
Net book value
74,705 
23,450 
Software Under Development [Member]
 
 
Indefinite-Lived and Finite-Lived Intangible Assets By Major Class [Line Items]
 
 
Cost
14,557 
18,773 
Net book value
$ 14,557 
$ 18,773 
Goodwill (Schedule Of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
 
Goodwill, Balance
$ 97,537 
Additions
567,785 
Foreign exchange movement
4,324 
Goodwill, Balance
$ 669,646 
Equity-Accounted Investments (Summary of Investments) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
 
 
Equity-accounted investments
$ 7,287 
$ 7,326 
Cura Classis Entities [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
48.00% 
 
Equity-accounted investments
4,650 
4,594 
Other Equity Investments [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Ownership percentage
32.00% 
 
Equity-accounted investments
$ 2,637 
$ 2,732 
Debt (Narrative) (Details) (USD $)
0 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Committed Revolving Credit Facilities [Member]
Dec. 21, 2016
5.375% Senior Unsecured Note, Due January 2025 [Member]
Sep. 30, 2017
5.375% Senior Unsecured Note, Due January 2025 [Member]
Dec. 31, 2016
5.375% Senior Unsecured Note, Due January 2025 [Member]
Dec. 21, 2016
5.375% Senior Unsecured Note, Due January 2025 [Member]
May 31, 2017
Syndicated Facilities [Member]
Credit Agreement [Member]
Dec. 31, 2016
Syndicated Facilities [Member]
Credit Agreement [Member]
Sep. 30, 2017
Multicurrency Facilities [Member]
Credit Agreement [Member]
May 31, 2017
Multicurrency Facilities [Member]
Credit Agreement [Member]
Oct. 27, 2016
Multicurrency Facilities [Member]
Credit Agreement [Member]
May 31, 2017
Delayed-Draw Facility [Member]
Credit Agreement [Member]
Sep. 30, 2017
Delayed-Draw Facility [Member]
Credit Agreement [Member]
May 31, 2017
Delayed-Draw Facility [Member]
Credit Agreement [Member]
Oct. 27, 2016
Delayed-Draw Facility [Member]
Credit Agreement [Member]
Oct. 27, 2016
Maximum [Member]
Multicurrency Facilities [Member]
Credit Agreement [Member]
Debt [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amount
 
 
 
 
$ 500,000,000 
 
$ 500,000,000 
 
 
 
 
$ 675,000,000 
 
 
$ 325,000,000 
$ 325,000,000 
$ 50,000,000 
Current portion
16,985,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-term debt weighted average interest rate
2.80% 
2.20% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
647,213,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available borrowing capacity
 
 
637,891,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization, first period
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
Amortization, second period
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
Debt issue costs
 
 
 
 
13,114,000 
4,220,000 
13,945,000 
9,704,000 
 
 
4,753,000 
 
 
 
4,951,000 
 
 
Unamortized deferred debt issue costs
 
 
 
 
$ 13,114,000 
$ 4,220,000 
 
 
$ 6,182,000 
$ 4,054,000 
 
 
 
$ 4,448,000 
 
 
 
Interest rate
 
 
 
 
5.375% 
5.375% 
5.375% 
 
 
 
 
 
 
 
 
 
 
Maturity date
 
 
 
Jan. 15, 2025 
Jan. 15, 2025 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Summary of Debt) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 9 Months Ended
Dec. 21, 2016
Sep. 30, 2017
Dec. 31, 2016
Dec. 21, 2016
Debt [Line Items]
 
 
 
 
Short-term debt
 
$ 8,567 
$ 23,912 
 
Long-term Debt, Total
 
817,885 
595,706 
 
Total debt
 
826,452 
619,618 
 
Current portion
 
16,985 
 
 
Non-current portion
 
800,900 
595,706 
 
Revolving Loan, In Canadian Dollars, Available until October 2021 [Member]
 
 
 
 
Debt [Line Items]
 
 
 
 
Long-term Debt
 
 
69,926 
 
Weighted average interest rate
 
2.38% 
 
 
Maturity date
 
Oct. 27, 2021 
 
 
Revolving Loan, In US Dollars, Available until October 2021 [Member]
 
 
 
 
Debt [Line Items]
 
 
 
 
Long-term Debt
 
 
30,000 
 
Weighted average interest rate
 
2.075% 
 
 
Maturity date
 
Oct. 27, 2021 
 
 
Delayed Draw Term Loan, In Canadian Dollars, Available until October 2021 [Member]
 
 
 
 
Debt [Line Items]
 
 
 
 
Long-term Debt
 
189,050 
 
 
Interest rate
 
3.044% 
 
 
Maturity date
 
Oct. 27, 2021 
 
 
Delayed Draw Term Loan, In US Dollars, Available until October 2021 [Member]
 
 
 
 
Debt [Line Items]
 
 
 
 
Long-term Debt
 
146,397 
 
 
Less: unamortized debt issue costs
 
(4,448)
 
 
Interest rate
 
3.157% 
 
 
Maturity date
 
Oct. 27, 2021 
 
 
5.375% Senior Unsecured Note, Due January 2025 [Member]
 
 
 
 
Debt [Line Items]
 
 
 
 
Long-term Debt
 
500,000 
500,000 
 
Less: unamortized debt issue costs
 
$ (13,114)
$ (4,220)
$ (13,945)
Interest rate
 
5.375% 
5.375% 
5.375% 
Maturity date
Jan. 15, 2025 
Jan. 15, 2025 
 
 
Equity and Dividends (Narrative) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended
Mar. 31, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Nov. 8, 2017
Subsequent Event [Member]
Dividends Payable [Line Items]
 
 
 
 
 
 
Preferred shares issued
 
 
 
 
Stock repurchased during period, shares
1,460,000 
 
 
 
 
Dividends declared (usd per share)
 
 
 
 
 
$ 0.17 
Payment date
 
 
 
 
 
Dec. 20, 2017 
Record date
 
 
 
 
 
Nov. 29, 2017 
Intra-entity foreign currency transactions
 
$ 5,838 
$ 958 
$ 17,322 
$ 9,569 
 
Equity and Dividends (Schedule of Quarterly Dividends Declared and Paid) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2017
First Quarter 2017 [Member]
Sep. 30, 2017
Second Quarter 2017 [Member]
Sep. 30, 2016
First Quarter 2016 [Member]
Sep. 30, 2016
Second Quarter 2016 [Member]
Sep. 30, 2017
Fourth Quarter 2016 [Member]
Sep. 30, 2016
Fourth Quarter 2015 [Member]
Dividends Payable [Line Items]
 
 
 
 
 
 
Declaration date
May 04, 2017 
Aug. 04, 2017 
May 09, 2016 
Aug. 05, 2016 
Jan. 23, 2017 
Jan. 15, 2016 
Dividends per share
$ 0.1700 
$ 0.1700 
$ 0.1600 
$ 0.1700 
$ 0.1700 
$ 0.1600 
Record date
May 23, 2017 
Aug. 25, 2017 
May 24, 2016 
Sep. 02, 2016 
Feb. 10, 2017 
Feb. 12, 2016 
Total dividends
$ 18,188 
$ 18,210 
$ 17,022 
$ 18,127 
$ 18,160 
$ 17,154 
Payment date
Jun. 13, 2017 
Sep. 15, 2017 
Jun. 14, 2016 
Sep. 23, 2016 
Mar. 03, 2017 
Mar. 04, 2016 
Share-Based Payments (Narrative) (Details) (USD $)
9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2017
Sep. 30, 2017
Stock Option Plan [Member]
Sep. 30, 2017
Stock Options [Member]
item
Sep. 30, 2017
Stock Options Assumed [Member]
Sep. 30, 2017
Performance Share Units, Equity Classified Awards [Member]
Sep. 30, 2017
Performance Share Units, Liability Classified Awards [Member]
Sep. 30, 2017
Performance Share Units [Member]
Minimum [Member]
Sep. 30, 2017
Performance Share Units [Member]
Maximum [Member]
May 1, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Aug. 11, 2014
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
May 1, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Sep. 30, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Tranche One [Member]
Sep. 30, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Tranche Two [Member]
Sep. 30, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Tranche Three [Member]
Sep. 30, 2017
Performance Share Units [Member]
Sign-on Grant Performance Share Unit Plans [Member]
Tranche Four [Member]
Sep. 30, 2017
Restricted Share Units [Member]
Sep. 30, 2017
Deferred Share Units [Member]
Nov. 8, 2017
Subsequent Event [Member]
Restricted Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
 
 
 
 
 
 
 
 
 
2 years 
3 years 
4 years 
5 years 
 
 
 
Remaining shares authorized for grant
 
 
 
 
 
 
 
 
 
 
150,000 
 
 
 
 
 
 
 
Weighted average grant date fair value of options granted
 
 
$ 7.24 
 
 
 
 
 
$ 24.47 
 
 
 
 
 
 
 
 
 
Weighted average share price of options assumed
 
 
 
$ 16.93 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs
 
$ 8,924,000 
 
 
$ 5,986,000 
$ 4,030,000 
 
 
 
 
 
 
 
 
 
$ 58,000 
$ 0 
 
Unrecognized compensation costs, period for recognition
 
2 years 4 months 24 days 
 
 
1 year 10 months 24 days 
1 year 9 months 18 days 
 
 
 
 
 
 
 
 
 
1 year 
 
 
Number of plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of units available for grant as a percentage of target
 
 
 
 
 
 
0.00% 
200.00% 
 
 
 
 
 
 
 
 
 
 
Units granted
 
 
 
 
133,452 
94,982 1
 
 
 
102,375 
 
 
 
 
 
849 
13,548 
 
Share unit liability
 
 
 
 
 
 
 
 
 
 
1,421,000 
 
 
 
 
 
 
 
Share units reclassified to temporary equity
(382,000)
 
 
 
 
 
 
 
1,803,000 
 
 
 
 
 
 
 
 
 
Shares to be issued for settlement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 300,000 
Share-Based Payments (Summary of Stock Option Activity) (Details) (Stock Option Plan [Member], USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Stock Option Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Outstanding beginning balance, Common shares under option
3,366,714 
 
Granted, Common shares under option
960,057 
 
Assumed in acquisition, Common shares under option
737,358 
 
Exercised, Common shares under option
(355,514)
 
Forfeited, Common shares under option
(124,414)
 
Outstanding ending balance, Common shares under option
4,584,201 
3,366,714 
Exercisable, Common shares under option
1,917,439 
 
Outstanding beginning balance, Weighted average exercise price (per share)
$ 24.02 
 
Granted, Weighted average exercise price (per share)
$ 31.14 
 
Assumed in acquisition, Weighted average exercise price (per share)
$ 14.26 
 
Exercised, Weighted average exercise price (per share)
$ 22.32 
 
Forfeited, Weighted average exercise price (per share)
$ 18.85 
 
Outstanding ending balance, Weighted average exercise price (per share)
$ 21.92 
$ 24.02 
Exercisable, Weighted average exercise price (per share)
$ 23.25 
 
Outstanding, Weighted average remaining contractual life (in years)
7 years 7 months 6 days 
7 years 6 months 
Exercisable, Weighted average remaining contractual life (in years)
6 years 2 months 12 days 
 
Outstanding beginning balance, Aggregate intrinsic value
$ 33,601 
 
Exercised, Aggregate intrinsic value
3,202 
 
Outstanding ending balance, Aggregate intrinsic value
23,721 
33,601 
Exercisable, Aggregate intrinsic value
$ 14,418 
 
Share-Based Payments (Summary of Stock Option and Performance Share Unit Pricing Assumptions) (Details)
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sign-on Grant Performance Share Unit Plans [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk free interest rate
1.60% 
 
Expected dividend yield
2.54% 
 
Expected lives
4 years 
 
Expected volatility
28.60% 
 
Stock Options [Member] |
Stock Option Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk free interest rate
2.00% 
1.10% 
Expected dividend yield
2.14% 
2.36% 
Expected lives
5 years 
5 years 
Expected volatility
27.80% 
26.90% 
Stock Options Assumed [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk free interest rate
0.80% 
 
Expected dividend yield
2.19% 
 
Expected lives
4 months 24 days 
 
Expected volatility
32.10% 
 
Performance Share Units, Liability Classified Awards [Member] |
Senior Executive and Employee Performance Share Unit Plans [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk free interest rate
1.40% 
1.20% 
Expected dividend yield
1.92% 
2.49% 
Expected lives
3 years 
3 years 
Expected volatility
28.20% 
29.90% 
Average expected volatility of comparable companies
37.00% 
37.00% 
Share-Based Payments (Summary of Share Unit Activity) (Details) (USD $)
9 Months Ended
Sep. 30, 2017
Performance Share Units, Equity Classified Awards [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Outstanding beginning balance, Number of units
243,968 
Granted, Number of units
133,452 
Reclassification on modification, Number of units
81,533 
Vested and settled, Number of units
(27,326)
Forfeited, Number of units
   
Outstanding ending balance, Number of units
431,627 
Outstanding beginning balance, Weighted average grant date fair value (per share)
$ 27.48 
Granted, Weighted average grant date fair value (per share)
$ 30.31 
Reclassification on modification, WA grant date fair value (per share)
$ 24.47 
Vested and settled, Weighted average grant date fair value (per share)
$ 26.82 
Forfeited, Weighted average grant date fair value (per share)
   
Outstanding ending balance, Weighted average grant date fair value (per share)
$ 27.83 
Performance Share Units, Liability Classified Awards [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Outstanding beginning balance, Number of units
311,329 1
Granted, Number of units
94,982 1
Reclassification on modification, Number of units
(81,533)1
Vested and settled, Number of units
(49,873)1
Forfeited, Number of units
(15,806)1
Outstanding ending balance, Number of units
259,099 1
Outstanding beginning balance, Weighted average grant date fair value (per share)
$ 23.96 1
Granted, Weighted average grant date fair value (per share)
$ 31.40 1
Reclassification on modification, WA grant date fair value (per share)
$ 24.66 1
Vested and settled, Weighted average grant date fair value (per share)
$ 23.64 1
Forfeited, Weighted average grant date fair value (per share)
$ 26.31 1
Outstanding ending balance, Weighted average grant date fair value (per share)
$ 26.39 1
Restricted Share Units [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Outstanding beginning balance, Number of units
160,009 
Granted, Number of units
849 
Reclassification on modification, Number of units
   
Vested and settled, Number of units
(152,544)
Forfeited, Number of units
   
Outstanding ending balance, Number of units
8,314 
Outstanding beginning balance, Weighted average grant date fair value (per share)
$ 23.37 
Granted, Weighted average grant date fair value (per share)
$ 32.47 
Reclassification on modification, WA grant date fair value (per share)
   
Vested and settled, Weighted average grant date fair value (per share)
$ 23.26 
Forfeited, Weighted average grant date fair value (per share)
   
Outstanding ending balance, Weighted average grant date fair value (per share)
$ 26.29 
Deferred Share Units [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Outstanding beginning balance, Number of units
73,520 
Granted, Number of units
13,548 
Reclassification on modification, Number of units
   
Vested and settled, Number of units
   
Forfeited, Number of units
   
Outstanding ending balance, Number of units
87,068 
Outstanding beginning balance, Weighted average grant date fair value (per share)
$ 25.41 
Granted, Weighted average grant date fair value (per share)
$ 30.77 
Reclassification on modification, WA grant date fair value (per share)
   
Vested and settled, Weighted average grant date fair value (per share)
   
Forfeited, Weighted average grant date fair value (per share)
   
Outstanding ending balance, Weighted average grant date fair value (per share)
$ 26.24 
Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Industrial Assets Guaranteed Under Contract [Member]
 
 
Guarantor Obligations [Line Items]
 
 
Assets guaranteed under contract
$ 40,722 
$ 3,813 
Percentage of assets expected to be sold
60.00% 
100.00% 
Agricultural Assets Guaranteed Under Contract [Member]
 
 
Guarantor Obligations [Line Items]
 
 
Assets guaranteed under contract
$ 14,577 
$ 11,415 
Percentage of assets expected to be sold
77.00% 
100.00% 
Business Combinations (Narrative) (Details)
3 Months Ended 6 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 4 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
USD ($)
Jun. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Jun. 30, 2016
USD ($)
Jun. 30, 2017
USD ($)
Jun. 30, 2016
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Dec. 31, 2016
USD ($)
May 31, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
Sep. 30, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
Sep. 30, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
Sep. 30, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
Jun. 30, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
May 31, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
Feb. 19, 2016
Mascus International Holdings BV [Member]
USD ($)
Feb. 19, 2016
Mascus International Holdings BV [Member]
EUR (€)
Sep. 30, 2017
Mascus International Holdings BV [Member]
USD ($)
Sep. 30, 2017
Mascus International Holdings BV [Member]
EUR (€)
Dec. 31, 2016
Mascus International Holdings BV [Member]
USD ($)
Dec. 31, 2016
Mascus International Holdings BV [Member]
EUR (€)
Sep. 30, 2016
Mascus International Holdings BV [Member]
USD ($)
Feb. 19, 2016
Mascus International Holdings BV [Member]
USD ($)
Feb. 19, 2016
Mascus International Holdings BV [Member]
EUR (€)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
USD ($)
Sep. 30, 2017
Petrowsky Auctioneers Inc. [Member]
USD ($)
Sep. 30, 2017
Petrowsky Auctioneers Inc. [Member]
USD ($)
Dec. 31, 2016
Petrowsky Auctioneers Inc. [Member]
USD ($)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
USD ($)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
Maximum [Member]
USD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
USD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
CAD ($)
Sep. 30, 2017
Kramer Auctions Ltd. [Member]
USD ($)
Sep. 30, 2017
Kramer Auctions Ltd. [Member]
USD ($)
Sep. 30, 2017
Kramer Auctions Ltd. [Member]
CAD ($)
Dec. 31, 2016
Kramer Auctions Ltd. [Member]
USD ($)
Dec. 31, 2016
Kramer Auctions Ltd. [Member]
CAD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
USD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
CAD ($)
May 31, 2017
Customer Relationships [Member]
Iron Planet Holdings Inc. [Member]
Maximum [Member]
Sep. 30, 2017
Customer Relationships [Member]
Mascus International Holdings BV [Member]
Aug. 1, 2016
Customer Relationships [Member]
Petrowsky Auctioneers Inc. [Member]
Sep. 30, 2017
Customer Relationships [Member]
Kramer Auctions Ltd. [Member]
Sep. 30, 2017
Trade Names [Member]
Mascus International Holdings BV [Member]
Sep. 30, 2017
Trade Names [Member]
Kramer Auctions Ltd. [Member]
Sep. 30, 2017
Software Assets [Member]
Mascus International Holdings BV [Member]
Jun. 30, 2017
Acquisition-related Costs [Member]
Iron Planet Holdings Inc. [Member]
USD ($)
Jun. 30, 2016
Acquisition-related Costs [Member]
Iron Planet Holdings Inc. [Member]
USD ($)
Jun. 30, 2017
Acquisition-related Costs [Member]
Iron Planet Holdings Inc. [Member]
USD ($)
Jun. 30, 2016
Acquisition-related Costs [Member]
Iron Planet Holdings Inc. [Member]
USD ($)
Sep. 30, 2016
EquipmentOne [Member]
USD ($)
Sep. 30, 2016
EquipmentOne [Member]
Customer Relationships [Member]
USD ($)
Sep. 30, 2016
EquipmentOne [Member]
Customer Relationships [Member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total cash consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 11,361,000 
$ 15,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash consideration
 
 
 
 
 
 
 
 
 
772,706,000 
 
 
 
 
 
29,580,000 
26,553,000 
 
 
 
 
 
 
 
6,250,000 
 
 
 
 
 
11,138,000 
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total consideration
 
 
 
 
 
 
 
 
 
776,474,000 
 
 
 
 
 
33,607,000 
 
 
 
 
 
 
 
 
7,683,000 
 
 
 
 
 
11,899,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retention payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
750,000 
333,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncash consideration
 
 
 
 
 
 
 
 
 
2,330,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred purchase note consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
223,000 
300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voting equity interests acquired, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
100.00% 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumption of outstanding options
 
 
 
 
 
 
 
 
 
1,771,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash related to customary adjustments
 
 
 
 
 
 
 
 
 
333,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,563,000 
3,198,000 
 
 
 
3,563,000 
3,198,000 
 
 
 
 
 
3,000,000 
 
 
 
 
 
 
 
1,856,000 
2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment for contingent consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,302,000 
1,215,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent consideration fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,900,000 
1,608,000 
3,431,000 
3,080,000 
 
 
 
 
 
 
1,433,000 
 
 
 
 
 
538,000 
725,000 
538,000 
725,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
669,646,000 
 
 
 
 
 
669,646,000 
 
97,537,000 
 
 
 
 
 
567,410,000 
 
 
 
 
 
 
 
19,664,000 
 
 
 
 
 
4,308,000 
 
 
 
 
 
 
 
 
6,822,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,574,000 
 
 
Impairment loss
 
28,243,000 
 
 
 
8,911,000 
28,243,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,669,000 
4,669,000 
4,669,000 
Pre-combination attribution
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51,678,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Post-combination attribution
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,154,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related costs
 
 
 
 
 
 
4,752,000 
 
 
4,752,000 
 
 
4,752,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unvested options recognized as compensation expense
 
 
 
 
 
 
 
 
 
5,402,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
10,261,000 
 
(5,137,000)
 
 
 
38,273,000 
63,979,000 
 
 
1,696,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,844,000 
3,618,000 
3,343,000 
(16,702,000)
 
 
 
Revenues
141,047,000 
 
128,876,000 
 
 
 
431,732,000 
419,626,000 
 
 
22,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributed Revenue since acquisition date
 
 
 
 
 
 
 
 
 
 
 
33,380,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributed Earnings since acquisition date
 
 
 
 
 
 
 
 
 
 
 
1,404,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributed Revenue
141,047,000 
185,485,000 
153,817,000 
187,089,000 
340,029,000 
349,893,000 
481,076,000 
503,711,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributed Earnings
10,323,000 
28,619,000 
(9,583,000)
32,021,000 
47,168,000 
11,671,000 
57,491,000 
2,089,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing employment costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
419,000 
393,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related costs
 
 
 
 
 
 
 
 
 
 
32,591,000 
32,591,000 
32,591,000 
 
 
 
 
426,000 
 
 
 
1,450,000 
 
 
 
557,000 
557,000 
 
 
 
 
 
429,000 
429,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligation to pay additional amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,849,000 
1,625,000 
 
 
 
 
 
 
 
 
 
 
1,000,000 
 
 
743,000 
743,000 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonrecurring charges
 
 
 
 
 
 
 
 
 
 
 
 
 
55,239,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of contingent consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
193,000 
178,000 
 
 
 
 
 
 
1,457,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period to make additional amount of obligation upon achievement of certain condition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
3 years 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Useful life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13 years 
17 years 
10 years 
10 years 
5 years 
3 years 
5 years 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 626,000 
$ 620,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Combinations (Schedule of Net Cash Flows and Purchase Price) (Details) (Iron Planet Holdings Inc. [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended 9 Months Ended
May 31, 2017
Sep. 30, 2017
Iron Planet Holdings Inc. [Member]
 
 
Business Acquisition [Line Items]
 
 
Cash consideration paid to former equity holders
$ 723,810 
 
Settlement of IronPlanet's debt
36,313 
 
Settlement of IronPlanet's transaction costs
12,583 
 
Cash consideration paid on closing
772,706 
 
Less: cash and cash equivalents acquired
(95,626)
 
Less: restricted cash acquired
(3,000)
 
Acquisition of IronPlanet, net of cash acquired
675,851 
675,851 
Replacement stock option awards attributable to pre-combination services
4,926 
 
Stock option compensation expense from accelerated vesting of awards attributable to post-combination services
(2,596)
 
Cash consideration paid relating to closing adjustments
1,771 
 
Settlement of pre-existing intercompany balances
(333)
 
Total fair value at acquisition date
$ 776,474 
 
Business Combinations (Schedule of Assets Acquired and Liabilities Assumed) (Details)
In Thousands, unless otherwise specified
9 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2016
USD ($)
Sep. 30, 2017
USD ($)
Dec. 31, 2016
USD ($)
May 31, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
May 31, 2017
Iron Planet Holdings Inc. [Member]
USD ($)
May 31, 2017
Iron Planet Holdings Inc. [Member]
Technology [Member]
Feb. 19, 2016
Mascus International Holdings BV [Member]
USD ($)
Feb. 19, 2016
Mascus International Holdings BV [Member]
EUR (€)
Feb. 19, 2016
Mascus International Holdings BV [Member]
USD ($)
Sep. 30, 2017
Mascus International Holdings BV [Member]
Customer Relationships [Member]
Sep. 30, 2017
Mascus International Holdings BV [Member]
Software Assets [Member]
Sep. 30, 2017
Mascus International Holdings BV [Member]
Trade Names [Member]
May 27, 2016
Mascus Subsidiary [Member]
USD ($)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
USD ($)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
USD ($)
Aug. 1, 2016
Petrowsky Auctioneers Inc. [Member]
Customer Relationships [Member]
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
USD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
CAD ($)
Nov. 15, 2016
Kramer Auctions Ltd. [Member]
USD ($)
Sep. 30, 2017
Kramer Auctions Ltd. [Member]
Customer Relationships [Member]
Sep. 30, 2017
Kramer Auctions Ltd. [Member]
Trade Names [Member]
May 31, 2017
Minimum [Member]
Iron Planet Holdings Inc. [Member]
Customer Relationships [Member]
May 31, 2017
Maximum [Member]
Iron Planet Holdings Inc. [Member]
Customer Relationships [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price
 
 
 
$ 772,706 
 
 
$ 29,580 
€ 26,553 
 
 
 
 
 
$ 6,250 
 
 
$ 11,138 
$ 15,000 
 
 
 
 
 
Deferred purchase note consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
223 
300 
 
 
 
 
 
Fair value of contingent consideration
 
 
 
 
 
 
3,431 
 
 
 
 
 
 
1,433 
 
 
538 
 
 
 
 
 
 
Non-controlling interests
 
 
 
 
 
 
596 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fair value at acquisition date
 
 
 
776,474 
 
 
33,607 
 
 
 
 
 
 
7,683 
 
 
11,899 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
95,626 
 
 
 
1,457 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted cash
 
 
 
 
3,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other receivables
 
 
 
 
13,021 
 
 
 
1,290 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventory
 
 
 
 
1,012 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances against auction contracts
 
 
 
 
4,623 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepaid expenses
 
 
 
 
1,233 
 
 
 
528 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income taxes receivable
 
 
 
 
170 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment
 
 
 
 
2,381 
 
 
 
104 
 
 
 
 
 
441 
 
 
 
399 
 
 
 
 
Other non-current assets
 
 
 
 
2,551 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax assets
 
 
 
 
1,497 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets
 
 
 
 
188,000 2
 
 
 
14,817 3
 
 
 
 
 
2,934 4
 
 
 
4,678 5
 
 
 
 
Auction proceeds payable
 
 
 
 
63,616 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade and other payables
 
 
 
 
14,511 
 
 
 
1,533 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other non-current liabilities
 
 
 
 
 
 
 
 
37 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income taxes payable
 
 
 
 
55 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
 
 
25,868 
 
 
 
2,683 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of identifiable net assets acquired
 
 
 
 
209,064 
 
 
 
13,943 
 
 
 
 
 
3,375 
 
 
 
5,077 
 
 
 
 
Goodwill acquired on acquisition
 
669,646 
97,537 
 
567,410 
 
 
 
19,664 
 
 
 
 
 
4,308 
 
 
 
6,822 
 
 
 
 
Acquisition of NCI
$ 226 
 
 
 
 
 
 
 
 
 
 
 
$ 226 
 
 
 
 
 
 
 
 
 
 
Amortization life
 
 
 
 
 
7 years 
 
 
 
17 years 
5 years 
5 years 
 
 
 
10 years 
 
 
 
10 years 
3 years 
6 years 
13 years 
Business Combinations (Pro Forma Financial Information) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 9 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Sep. 30, 2016
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Business Combinations [Abstract]
 
 
 
 
 
 
 
 
Revenue
$ 141,047 
$ 185,485 
$ 153,817 
$ 187,089 
$ 340,029 
$ 349,893 
$ 481,076 
$ 503,711 
Net income (loss)
$ 10,323 
$ 28,619 
$ (9,583)
$ 32,021 
$ 47,168 
$ 11,671 
$ 57,491 
$ 2,089 
Basic earnings per share
$ 0.10 
$ 0.27 
$ (0.09)
$ 0.29 
$ 0.44 
$ 0.10 
$ 0.54 
$ 0.00 
Diluted earnings per share
$ 0.09 
$ 0.26 
$ (0.09)
$ 0.29 
$ 0.43 
$ 0.10 
$ 0.53 
$ 0.00 
Business Combinations (Pro Forma Financial Information Adjustment) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 9 Months Ended
Sep. 30, 2017
Jun. 30, 2017
Sep. 30, 2016
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Business Combinations [Abstract]
 
 
 
 
 
 
 
 
Revenue
$ 141,047 
$ 185,485 
$ 153,817 
$ 187,089 
$ 340,029 
$ 349,893 
$ 481,076 
$ 503,711 
Net income (loss)
$ 10,323 
$ 28,619 
$ (9,583)
$ 32,021 
$ 47,168 
$ 11,671 
$ 57,491 
$ 2,089 
Basic earnings per share
$ 0.10 
$ 0.27 
$ (0.09)
$ 0.29 
$ 0.44 
$ 0.10 
$ 0.54 
$ 0.00 
Diluted earnings per share
$ 0.09 
$ 0.26 
$ (0.09)
$ 0.29 
$ 0.43 
$ 0.10 
$ 0.53 
$ 0.00 
Contingently Redeemable Non-controlling Interest in Ritchie Bros. Financial Services (Details)
In Thousands, unless otherwise specified
9 Months Ended 0 Months Ended
Sep. 30, 2016
USD ($)
Jul. 12, 2016
Ritchie Bros. Financial Services [Member]
USD ($)
Jul. 12, 2016
Ritchie Bros. Financial Services [Member]
CAD ($)
Jul. 12, 2016
Ritchie Bros. Financial Services [Member]
Redeemable Noncontrolling Interest [Line Items]
 
 
 
 
Percentage of ownership interest
 
51.00% 
51.00% 
 
Percentage ownership by non-controlling interest holders
 
 
 
49.00% 
Total consideration
 
$ 44,141 
$ 57,900 
 
Cash consideration
$ 41,092