Jamie Kokoska - Director of IR Ravi Saligram - CEO Sharon Driscoll - CFO Jim Barr - Group President Terry Dolan - President of US and Latin America Karl Werner - Head of Operations & Head of the Middle East Randy Wall - President of Canada.

Bert Powell - BMO Capital Markets Nate Brochmann - William Blair Stephen Volkmann - Jefferies Yuri Lynk - Canaccord Genuity. John Healy - Northcoast Research Nick Coppola - Thompson Research Group Scott Schneeberger - Oppenheimer.

Good morning. My name is Jamie and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers Q3 2015 earnings call. [Operator Instructions] Ravi Saligram, CEO, you may begin your conference..

This is actually Jamie, Director of IR, and thank you, operator. Good morning, everyone, and thanks for joining us on our fiscal third quarter 2015 results earnings conference call. Discussing Ritchie Bros' performance today are Ravi Saligram, Chief Executive Officer, and Sharon Driscoll, Chief Financial Officer.

Joining them for the Q&A session following the formal remarks will be Jim Barr, Group President; Rob McLeod, Chief Business Development Officer; Todd Wohler, Chief Human Resources Officer; Randy Wall, President of Canada; and Terry Dolan, President of US and Latin America.

The following discussion will include forward-looking statements as defined by SEC and Canadian rules and regulations. Comments that are not a statement of fact, including projections of future earnings, revenue, gross auction proceeds and other items are considered forward-looking and involve risks and uncertainties.

The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our SEC and Canadian Securities fillings available on the SEC and SEDAR websites, as well as rbauction.com.

Our definition of gross auction proceeds may differ from those used by other participants in our industry. It is not a measure of financial performance, liquidity or revenue and is not presented in our statement of operations. Our third quarter 2015 results were made available yesterday after market close.

We encourage you to review our earnings release, MD&A and financial statements, which are available on rbauction.com as well as EDGAR and SEDAR. Presentation slides accompany our commentary today. These slides can be viewed through the live or recorded webcast or downloaded from our website.

All figures discussed on today's call are in US dollars, unless otherwise indicated. While we may use million- or billion-dollar figures for brevity in today's discussion, all percent changes have been calculated using full, unrounded figures. I'll now turn the call over to Ravi Saligram, the Chief Executive Officer..

Thank you, Jamie, and thanks to everybody for joining us on our earnings call today. By the way, Carl Warner, our Head of Operations and Head of Middle East, will also be joining in the Q&A. Our fiscal third quarter demonstrated yet another strong effort by our team in driving year-over-year revenue growth and improved underwritten performance.

As you likely noted from our recent earnings call discussions, our focus is squarely on generating revenue growth through a combination of GAP generation and driving higher revenue rates through more disciplined contract negotiation on our underwritten business while accelerating straight commission growth.

These efforts have sustained a much improved revenue rate for the first nine months of 2015, which has helped us to offset continued foreign exchange headwinds and marginally lower used equipment values relative to the peak we saw in the first quarter of the year.

As you'll have noticed in our third quarter GAP results, GAP grew 9.4% on an organic basis using the same exchange rates as last year, but a more modest 0.9% as reported in US dollars. I'm pleased to report that we achieved significantly better growth on key performance metrics for the third quarter.

On a reported basis, revenue for the quarter grew 7%. Operating profit grew 47%. Diluted EPS of $0.19 grew 41% compared to adjusted EPS of $0.13 in the third quarter last year, or 118% compared to the unadjusted EPS in the same quarter last year. Operating free cash flow improved 75% from the year-ago quarter. RONA improved 1,065 bps.

RONA, excluding a term loan reclassification, grew 826 bps. And our ROIC, on a 12-month rolling basis, was 15.1%, the highest level since 2009. As mentioned previously, foreign exchange headwinds are still causing drag on our reported US dollar results given the amount of business we conduct in Canada, Europe and abroad.

On an organic basis, using the same exchange rates as last year, during the third quarter revenue for the quarter grew 16% and operating income grew 51%. Our success this quarter was due to the efforts of global sales, marketing and operations teams in many of the regions we operate in.

In fact, many auction records were established in the third quarter. I would like to highlight several auction events in particular. In our two-day July Fort Worth, Texas, auction, over $53 million of assets were sold. We also achieved a new lot-count record for this site.

At our two-day Houston, Texas, auction event in August, the team sold more than $45 million of assets, including $24 million sold to buyers outside of Texas. The sale truly demonstrated the strength of our global marketing efforts and the value of our global reach through our live online bidding platform.

At our two-day Dubai auction, we sold over $42 million of equipment, US dollars, making this the largest Dubai auction we've ever held in any third quarter. At our three-day September Edmonton auction we sold more than 7,300 lots, generating a whopping $101 million in gross auction proceeds, making it the largest September auction we've ever held.

Interestingly, while 80% of the assets sold at this monster auction were sold to Canadian buyers, 17% was sold to US-based bidders, which is the highest percent of US buyers at any Edmonton auction ever held. The relative strength of the US dollar at Canadian auctions appear to generate some increased US-based bidding.

The Fort Worth side generated a command performance at its second auction during the third quarter. At the three-day September auction more than $70 million of assets were sold making this the largest Texas auction Ritchie Bros. has ever held. Interestingly, nearly 70% of the assets sold in this auction went to buyers outside the state.

Many of you were likely aware of the growth of auctions I just spoke of given our commitment to disclosing the results of any auction over $40 million US and GAP by news release, but I also want to draw your attention to the strong growth we are seeing outside of our largest auction sites.

At our Donington Park, UK, auction held in July we sold $17 million US of equipment and other assets, which was the largest sale ever conducted at our US auction site. At our September auction in Polotitlan, Mexico, we sold more than $19 million US of assets, making it the largest auction Ritchie Bros. has ever held in Mexico during the third quarter.

At our September 29 St. Aubin sur Gaillon, France, we achieved $15 million in sales, making it the largest auction Ritchie Bros. has ever held in France during the third quarter.

We also demonstrated our operational and logistical prowess at our two-day Salt Lake City, Utah, auction which was held in two different locations and included the sale of nearly 3,500 lots from an off-site location.

So while our long-term, longtime top-performing sites continue to grow and break records, we also saw meaningful and important growth in many regions, with less exposure to resource and energy industries.

Turning to lot and volume trends we saw during the third quarter, lots sold during the third quarter of 2015 increased 16% relative to Q3 last year, growing by 12,000 additional lots. As the chart on the right-hand side of slide 7 shows, the vast majority of this lot volume increase came from customers in the heavy construction sector.

In fact, we saw a 37% increase in lots consigned from heavy construction customers, or more than 5,000 additional lots compared to this sector last year. Assets from customers in the transportation sector also grew meaningfully at 32% and providing nearly 1,200 additional lots compared to the transportation sector last year.

As many rental companies have commented on their respective earnings calls already, there was increased activity from customers in our rental sales and leasing customer segments. We saw a 15% increase from customers in rental or equipment distribution space, which provided 2,280-plus more lots relative to this segment in the third quarter last year.

Assets specifically from customers in the oil and gas sector, and this was specifically from the oil and gas sector, increased only 15% relative to the same quarter last year and provided only 214 additional lots to our auctions compared to assets consigned by customers in this sector last year.

If we removed incremental lot additions by customer both from oil and gas and rental sales and leasing segments, our auction lot volumes would still have increased 13% compared to the third quarter last year versus the reported 16%.

This indicates that we are nimble and quick to capitalize on sector dislocation, such as oil and gas, while remaining focused on driving growth in our core sectors, such as construction and transportation. As with last quarter, we did see a reduction in the average GAP per lot during the third quarter relative to the comparable period last year.

FX was the largest factor in this reduction, causing over 8% of the 13% average GAP per lot decline. Similar to Q2, we did see more complete dispersals during the third quarter. We generally include many smaller assets alongside the larger equipment we aim to sell. As discussed last quarter, this is not a trend we are particularly concerned with.

Assets and [offshore consequence] are full dispersals, which generally attract team bidders given the quality of equipment being sold. As well, our fee structure for smaller lots actually produces more revenue per dollar sold than our high-value lots.

While we don't aim to grow the number of small-value lots at our auctions, they do not cause any drag on our overall revenue or revenue rate. Equipment pricing has been a hot topic recently and one that seems to be weighed in frequently by many third-party sources. Our focus, obviously, is on the trends we see in our auctions.

Yes, overall used equipment pricing has declined from the peak we all saw in the first quarter this year. However, the decline is largely weighted to oil and gas-specific assets and the excess supply of certain categories of equipment hitting the market.

First on pricing strength, forestry equipment has performed very well recently, often exceeding our expectations. We are experiencing strong demand for forest harvesting machinery from bidders in both Canada and the US.

On the pricing weakness side, as you can imagine oil and gas-specific assets are selling for considerably less than they were a year ago, by our calculation, a 10% to 25% decline from the second quarter, dependant on the asset and its conditions, as well as some heavy construction assets, such as large excavators, have exhibited weakness in a few of our auctions.

That said, excavator values at our most recent Edmonton auction in October appeared to have rebound. Other assets, such as motor graders and wheel loaders, have had more erratic performance for the course of the third quarter, with different pricing strength depending on the month and region of the sale, as well as the age of equipment.

In both of these categories, lower hour units did continue to perform well. While we've been asked to quantify pricing trends increases and declines for the market, we do not currently provide this data publicly.

It is valuable data we use internally when considering underwritten transactions and negotiating deal terms and for our sales force when they are discussing specific equipment valuations with prospects and customers. It allows us to provide more value to our customers than other sales channels can provide.

The age of equipment we're selling is largely unchanged from what we saw in the first half of the year. During the first nine months of 2015, 23.7% of GAP has come from equipment aged three to five years old, up from 18.5% in this age bracket in 2014. Suffice to say, we are pleased for the year-on-year improvement.

Turning back to our key financial metrics now, revenue for the quarter was a third quarter record. At $109 million, it was 7% higher than Q3 last year. We achieved 16% revenue growth on an organic basis, demonstrating phenomenal local currency growth in many of our regions. Both volume and rate helped us achieve our third quarter revenue record.

Approximately 9% of the total 16% of our organic growth and revenue was attributable to volume increases, while 7% of the growth came from improvements in our revenue rate.

As you know, foreign exchange did impact our reported revenue growth for the quarter, reducing the organic growth rate by about 9%, which resulted in reported revenue growth of 7% compared to the third quarter last year. The strength of our underwritten business continued to bolster our performance during the third quarter.

Our team has been very smart about when and how to pursue at risk deals and when appropriate to walk away. To the credit of our sales team and our valuations teams, especially in parts of the US and Canada, we have seen sustained improvement in our underwritten revenue rates.

This is due partly to being smarter about how we approach deal structure, but it is also due to the fact that we are more disciplined about when underwritten transactions make economic sense. That said, we are continuing to strongly encourage our sales teams to proactively pursue underwritten deals that make economic sense.

Importantly, we want to aggressively pursue packages that are newer, low-hour equipment that can act as a magnet to fill an auction with straight commission business. Year-to-date, we have not only improved our at-risk rate, but we have also grown our straight commission business.

We are committed to defending and growing our share and our underwritten business continues to be a competitive advantage. No other industrial auctioneer in the world has the capital base and cash that we do and we will capitalize on this strength when pursuing important deals.

During the third quarter, approximately 53% of the revenue we generated came from our US operations, with 25% from Canada. The proportion of revenue attributable to each of our regions is reflective of where our auctions occurred during the quarter.

As the chart on the right of Slide 14 indicates, the US generated the most significant increase in revenue during the third quarter, up 28% versus prior year, important not only as it's a key growth region for us, but also because revenue generated in the US is not impacted by FX headwinds like many of our other regions.

Our operations in Australia, Canada and parts of Europe also generated strong revenue growth. However, the translation of revenue from these regions was severely impacted by translational foreign exchange when converted into US dollars.

Net earnings for the quarter were $20.3 million, a 40% increase from adjusted net earnings of $14.5 million in the third quarter last year. As you likely remember, there was a non-cash adjusting item in Q3 last year due to the write-down we took on our Japan auction site.

On a reported basis, net earnings for the third quarter this year increased 118% compared to non-adjusted net earnings of $9.3 million in the third quarter last year.

EquipmentOne has provided second sequential quarter of positive EBITDA, an important indication that the efforts we are making to bolster the performance of this business unit are taking hold. While still a relatively small contribution to our overall performance, we are pleased with the trajectory EquipmentOne is demonstrating.

Operationally, we are making strong progress in EquipmentOne as well. Gross transactional value of items sold on EquipmentOne during the third quarter of 2015 increased 31% from the same period last year. Just as important, website traffic increased 21% in the same period.

What's driving this improvement? Our US sales team is now fully trained in our go-to-market approach for EquipmentOne and contributions to this sales channel have been slowly growing as a result, and strategic accounts, which has been the backbone of EquipmentOne, continues to drive EquipmentOne.

As well, we've been investing in this site and have continued making website improvements to better meet the needs of our customers and to enhance their user experience. The average length of time spent on the EquipmentOne website is up 13% since January and the number of mobile device visits is up almost 50%. Ritchie Bros.

Financial Services continues to show momentum. During the third quarter, funded loans increased 42% from the same period last year, growing to $44 million during the quarter. We continue to be pleased with the performance of our financial services unit and see opportunities how the business contributes even more to our results.

The team there has been active in growing the services they can offer our customer base. In just this quarter, we introduced new working capital loans. So, this new offering by RBFS, customers are able to apply for unsecured loans for use on activity besides equipment purchases, such as marketing, repairs or maintenance.

As a quick reminder, RBFS does not create any balance sheet risk for Ritchie Bros. The business acts as a brokerage, leveraging the strong relationships we have with many lending institutions to get our customers the best rates and service possible. I now want to take some time to update you on two strategic initiatives.

First, I'm very pleased to announce that we have acquired a 75% stake in Xcira LLC, which offers the leading online auction bidding platform in the world. Ritchie Bros. has been a longtime and valued customer of Xcira for nearly 14 years.

This close working relationship, coupled with their expertise and the operating scale of their platform, made the business attractive from both a strategic and diversification standpoint. In 2014 alone, $6.7 billion US of sales occurred as online purchasers on Xcira's online ringman system.

They provide auction bidding capabilities to many of the world's leading auction companies in the collectible, fine art, auto and real estate sectors. While Ritchie Bros.

has, and obviously retains, exclusive use of their technology for the industrial auction space, leading auction companies in the luxury goods, fine art, auto and salvage industries are also long time and valued customers of this business.

In fact, Xcira facilitated online bidding capabilities during the sale of nearly $62 billion of assets sold via auction last year. As we welcome them to the Ritchie Bros. family, we expect to invest further in the development of next-generation technologies, some of which are already underway.

We believe the rollout of these exceptional products will enhance the user experience and overall value our customers will see when using our live online bidding capabilities. This will be an important strategy to further differentiate the customer experience Ritchie Bros. provides relative to other industrial auction companies.

Like us, Xcira's other non-industrial clients will also benefit from the next-generation of online bidding technology Xcira plans to unveil. Xcira's platform truly is a global leader in the auction space. During 2014, their OnLine Ringman online bidding solution was used in nearly 24,000 auction events.

Through these auctions, more than 4 million items were offered for sale to online bidders and they have supported auction events in 26 countries. Looking at Ritchie Bros. online activity specifically, so far this year more than 132,000 assets were sold to online bidders at our auctions, or 46% of our total lots sold so far in 2015.

Perhaps more importantly, 43% of our total GAP was sold to online bidders. These are very meaningful numbers that underscore the strategic value of securing Xcira’s technology for continued development in future years.

These figures also demonstrate just how strong our online bidding capabilities are, which are complementary to the live auction sites we offer to provide our customers with the ability to test and inspect equipment first-hand. It's a full-service global experience that almost no other industrial auctions can provide.

The second strategic update I want to discuss is Ritchie Bros. Private Treaty services. As you may have seen on our website recently, during the third quarter we also soft launched this new sale solution.

This small but important addition to our business is aimed to catering to equipment owners who have needs that cannot be met through the unreserved auction model, or who require more personal handling then EquipmentOne was built to provide. Through this new sales channel, Private Treaty leverages Ritchie Bros.

vast customer network, detailed equipment sales and supply data and market demand intelligence to target market packages of unique equipment to qualified buyers. We do not utilize our balance sheet in these transactions and work on a fee or commission basis.

Revenue from transactions occurring through our Private Treaty channel will be recognized as and when items are sold and sales commissions are received. As one example of how this new sales model caters to the needs of equipment sellers, we are currently marketing a large packet of equipment from Sweden consisting of specialized mining equipment.

The owner of these assets believes a more comprehensive control process will be best for their circumstances, given the targeted market the equipment is being marketed to. And with that update, I'll turn the call over to Sharon Driscoll to discuss aspects of our third quarter financial performance in detail.

Sharon?.

Thank you, Ravi, and good morning, everyone. As you saw in our pre-released monthly GAP disclosures, gross auction proceeds during the third quarter were $895 million. On a reported US dollar basis, this was a 1% increase from GAP reported in Q3 2014. But as you are all aware, foreign exchange translation did have a meaningful impact.

On an organic basis, using the same exchange rates as Q3 last year to remove the impacts of the foreign exchange translation, GAP growth was over 9% compared to Q3 last year. On a 12-month trailing basis ending September 30, Ritchie Bros.

has sold over $4.35 billion of assets on behalf of our customers, a 7% increase relative to the same period ended September 30 last year. We have also disclosed this morning that October GAP came in at $351 million. This is a 1% decline from October last year on a reported US dollar basis, but a 9% increase on an organic basis.

We expect the next two quarters will be impacted most significantly – most negatively by FX translation on a comparative basis to last year. Barring any further erosion of the Canadian dollar and the euro against the US dollar, beginning in Q2 2016, FX translation headwinds should dissipate.

Although we are not providing forward guidance, we do acknowledge that we're lapping Q4 2014 strong GAAP performance from our US region. This, coupled with the FX headwinds, will prove challenging to our reported GAP growth performance for Q4 this year.

As Ravi mentioned earlier, our third quarter generated $109 million of revenue, a 7% increase from Q3 last year. This was bolstered by the 12.22% revenue rate we achieved during the quarter, which was 69 basis points higher than the 11.53% rate we achieved in the third quarter last year.

The strength of our revenue rate was achieved through better performance from our underwritten business, especially in Australia, Canada and the US central region, as well as continued growth of fee-based revenue, which is largely attributable to increased Ritchie Bros. financial services revenue and buyers fees.

We saw particularly strong revenue growth from our US operations, which helped to offset reported revenue declines in other geographies due to foreign exchange translation. Our flow-through rate for the quarter, or the amount of incremental revenue that flowed to operating income, was 105%.

This was more than 100%, given the decrease in expenses due to controlled SG&A spending, foreign exchange translation impact and a decrease in share-based compensation expenses.

Operating income for the third quarter was $29.1 million, a 47% increase relative to Q3 last year, and diluted EPS for the quarter was $0.19, a 118% increase compared to reported diluted EPS of $0.09 in Q3 2014, or a 41% increase compared to adjusted diluted EPS of $0.13 in Q3 last year, which excluded the impacts of items the Company does not considered to be part of its normal operating results in Q3 2014.

Our effective tax rate for the third quarter of 2015 was 28.5%, nearly unchanged from the adjusted tax rate of 28.4% in Q3 last year. Our reported tax rate in Q3 this year is significantly lower than the reported tax rate of 39.6% in the third quarter of 2014, due to the impact of adjusting items in the third quarter last year.

Earnings growth during the quarter was due to solid operational execution, which drove revenue growth and disciplined expense management. As you will notice, revenue grew 7%, while SG&A, excluding depreciation and amortization, declined 1% with SG&A aided by foreign exchange translation.

The combination of revenue rate improvements and lower expense spending in the quarter has resulted in an EBIT margin rate of 35.9%, the highest Q3 rate in five years. This operating income margin is particularly strong considering our third quarter is typically one of our smaller quarters and given the fixed nature of most of our expenses.

As you are aware, the second and fourth quarter are typically our largest quarters and generally produce our best margins, given the operating leverage inherent in our business model. As we've discussed, Ritchie Bros.

reports in US dollars, but operates in multiple currencies, and the translation effects of converting our results into US dollars has muted our year-over-year reported growth.

This is especially true for our business units that operate in the Canadian dollar and euro, as both currencies have experienced significant declines against the US dollar since mid 2014.

As slide 27 shows, on an organic basis, using the same exchange rates as Q3 last year, GAAP grew 9%, revenue grew 16%, expenses grew 8% and operating profit grew 51%.

We believe these organic growth figures more accurately reflect the operational health of our business as they showcase how our business has performed absent these translational FX headwinds. As you can see, FX did have a positive impact on our expense line during the quarter, ultimately creating a decline in expenses year-over-year.

But as Slide 28 shows, revenue growth has continued to significantly outpace SG&A growth on both a reported and organic basis. Our commitment to ensuring expenses grow at a slower rate than revenues has been delivered over our last three quarters. It also showcases our ability to further drive the operating leverage inherent in our business model.

Within SG&A, expenses related to employee compensation, travel and administration and other selling and general expenses declined on a reported basis during the quarter, while expenses related to buildings and facilities increased marginally.

Within the employee comp line, we did benefit from a decrease in equity compensation expenses relative to Q2 related to the performance of our stocks during the quarter. Turning to our balance sheet, I will quickly review some key figures and capital metrics for the 12 months ended September 30.

Operating free cash flow increased to $250.6 million, a 75 % increase compared to the same period ended September 30 last year. This increase is attributable to more cash generated from increased operating activity, working capital management, as well as reduced capital spending.

Our Capex intensity for the quarter was 4.2%, down 40 basis points from 4.6% in the same period ended September 30 last year. As a reminder, Capex intensity highlights the amount of net capital expenditures we've made in the last 12 months relative to our revenue.

As we noted in our Evergreen model, we are focused on achieving Capex intensity equal to, or less than, 10%. Capex intensity as low as this period may not be truly indicative of what you should expect over the long term, as we will continue to invest in our business.

Return on net assets for the 12 months ended September 30 was 26.5%, an increase of more than 1,000 basis points. This includes the positive effect of the $60 million Canadian term loan that was reclassified from non-current to current borrowings during the second quarter.

As we noted last quarter, we intend to refinance this borrowing when it falls due in May of 2016. Excluding the effects of this re-class, RONA for the 12 months ended September 30 was 24.1%, an increase of 826 basis points compared to the same period ending last year.

In addition, our ROIC on a 12-month rolling basis was 15.1%, the first time since 2009 that we have broken through the 15% level. Our cash dividend for the quarter was approved by our Board at $0.16 per share, payable on December 18 to shareholders of record as of November 27.

This equates to a healthy dividend yield of nearly 2.5%, as of yesterday's closing price. As a reminder, our capital allocation priorities remain unchanged. As you know, we've already achieved our first two priorities, which are outlined on Slide 30 and are focused on delivering value through our third priority, acquisitions.

Yesterday's announcement of our acquisition of a majority stake in Xcira demonstrates our M&A strategy is well underway. We are hopeful that we will have more announcements related to acquisitions in the coming quarters.

As discussed at our January Investor Day, we are interested in pursuing opportunities that could bolster the sales volume and performance of our core auction business in key regional markets or sectors that could provide technology or sales channels that would be complementary to our customer base or leapfrog the market through disruptive innovations, and three, could be needle movers that would meaningfully enhance the scale of our operations.

We are actively pursuing several exciting prospects and have a healthy M&A pipeline. However, given the uncertainty of transactions due to a variety of reasons in the M&A world, we cannot give you certainty of when these will come to fruition.

We are committed to delivering an acquisition pipeline in the long term, but only when we believe transaction strategies, synergies and pricing will result in a favorable result for our shareholders.

As you will recall from our Q2 filings, we no longer meet the definition of a foreign private issuer and consequently, our 2015 annual consolidated financial statements will be prepared in accordance with US GAAP. The transition from IFRS to US GAAP will include retrospective application of US GAAP to all reporting periods from our inception.

We are currently evaluating the impact that our transition to US GAAP will have on our consolidated financial statements. We are on track for timely completion within our filing deadlines. And with that financial overview, I'll now turn the call back over to Ravi for some closing remarks..

Thank you, Sharon. Given the current macro trends and as the competitive environment is intensifying, we've received some questions from analysts and investors that we would like to address today.

These topics aren’t areas I plan to spend time on every call, but we believe there is value in discussing these aspects of our business at this specific point in time.

First on our sector exposure, while construction equipment continues to be the majority of what we sell, we have been actively engaged in driving further share growth in both transportation and agricultural equipment sectors.

During the first nine months of 2015, transportation sector assets comprised 18% of GAP, up nearly 300 basis points from prior year and agricultural assets and related real estate continue to comprise 10%. The increase of transportation assets in our overall mix is a direct result of executing against our sectoral growth strategy.

On the construction sector front, the equipment we sell comes from a wide variety of brands, makes and models, including all of the top brands.

CAT-branded equipment does comprise a portion of what we sell, especially in North America, but it is important to note that all of the CAT-branded equipment sold at our auctions, the majority of it, more than 85% in fact, comes from end users, as well as well as finance and rental companies.

Only about 15% of CAT-branded equipment we sell is consigned to us by CAT dealers. We're also pleased to tell you that the volume in GAP from CAT-branded equipment consigned to end users, rental companies, finance companies, et cetera, grew both in third quarter and year-to-date in both the US and Canada.

Our value proposition is recognized as putting our clients at the very center of all the decisions we make. We work for, and on behalf of, equipment sellers, regardless of whether they are end users or brokers or rental companies. Working for the best interest of equipment owners is what makes Ritchie Bros.

the foremost equipment auctioneer in the world and we believe our customers reward us for our protection of their interest, privacy and trust. While we value each equipment owner and seller and go out of our way to cater to their specific needs, it is not surprising that end users make up the majority of our equipment consignors.

In fact, dealers from all sectors and all brands, makes and models only contribute less than 15% of our total annual gross auction proceeds. If you speak to any day dealer, they will tell you firsthand that they general try to sell their inventory through their own channels first rather than turning to any third-party sales channel.

Don't get me wrong. Dealers are a very valued customer segment for us when they want to liquidate assets. We have long and established relationships with many of them, as they value our end-to-end service offerings and the sales values we obtain for them.

These stats have been provided simply to correct some confusion in the market as to how much equipment they contribute to our auctions. As our most recent Edmonton auction indicates, we continue to see strength from many of our core auction sites. In fact, at the October 27 to 30 Edmonton auction, we generated a new fourth-quarter record for the site.

At $137 million Canadian, our recent Edmonton auction was the third-largest auction ever held at this site and the largest ever held during our third quarter. Even more impressive, this auction followed another previous auction just six weeks earlier, where $101 million Canadian of equipment was sold.

To put this in perspective, year-to-date with another Edmonton auction to go, our Edmonton team has already surpassed all GAP generated by that site in 2014. Even more, on a year-to-date basis, the Edmonton site has achieved 37% GAP growth relative to the same period last year.

And we often get a lot of questions about auction trends, particularly as it relates to the weaker Canadian dollar relative to the US dollar. At this October Edmonton auction, 51% of the lots sold remained in Alberta, 32% went to buyers in other parts of Canada and 13% went to buyers in the US.

This is actually a decline in US buyer participation relative to our September Edmonton auction, which saw 17% sold to US buyers. So there's clearly some improving demand for used equipment within Canada. Related to Edmonton, I want to speak about the strength of a few of our core auction sites.

Our performance has always been strongly underpinned by both our Alberta and Texas operations, where our auction sites have continuously demonstrated strong results and potential for many years. We consider our sites in these regions foundational platforms.

They've routinely delivered results, regardless of specific downturns of cyclical shifts and their performance benefits from customers in a variety of sectors.

We have all been impressed with Edmonton and Alberta's growth this year, and while Alberta's total GAP growth rate has been an astonishing 28% year-to-date, it is actually a lower growth rate than we achieved in that region last year. So we grew even more in that region prior to any perceived trigger event due to oil and gas sector challenges.

Likewise, our Texas auction sites have achieved a whopping 30% increase in gross auction proceeds this year relative to the same time last year.

This is truly remarkable growth that we are all quite proud of, and it's largely due to the efforts of our teams in that region and also other states, who are providing our Texas sites with a portion of the increased sales volume they've generated this year. Alberta and Texas are foundational flagships of the RBA brand.

Both happen to be in the heart of the oil patch. However, we believe their continued growth is a reflection of brand strength, the ability to showcase large fleets from a variety of sectors and attract a huge following of motivated bidders.

Therefore, we discount the hypothesis that this year's growth in these regions is purely a function of the oil and gas dislocation. Our US operations overall have achieved more than 15% GAAP growth year-to-date and this has not been driven only by the Texas market.

In fact, if you go to slide 36 you will see Colorado, Utah, Minnesota and California have all achieved more than 50% GAAP growth over the first nine months of 2015, along with strong performance from Ohio.

Absent of FX headwinds, on a local currency basis, our teams in France and China have achieved triple-digit GAP growth in the first nine months of the year. Now we acknowledge that growth in both of these geographies is off a smaller GAP base, but indicates strong growth in share gains in two important international areas.

Just as important, we've seen meaningful growth at sites in the UAE, Germany and Italy. In Canada, our growth has not been isolated to Alberta. In fact, our two best performing regions was Saskatchewan with 33% growth – GAAP growth and [DC] with 21% growth on a Canadian-dollar basis.

So while our foundational sites do provide a historically meaningful contribution to our GAP growth figures, I think the growth rates in other geographies demonstrate wide-ranging regional improvement beyond our foundational auction sites.

RBA's brand strength comes not only from our foundational flagships, but also our portfolio of sites and strong global online reach. Together they create a powerful network effect.

Let me review how we've done so far in 2015, on a US-dollar basis, reported basis, GAP grew 5%, revenue grew 11%, operating profit grew 36%, adjusted diluted EPS grew 34%, operating free cash flows improved by 75% and return on net assets has improved more than 800 basis points on an adjusted basis.

These kinds of performance figures demonstrates our ability to executing against our strategy, the strength of our sales team, our marketing, our digital know-how and our operational prowess. These are results we are all very proud of. Taking a step back, I would like to discuss the broader macro environment briefly.

We are all aware that OEMs, equipment rental companies and dealers of new equipment have all been under significant pressure recently, and some OEMs have cut back on new equipment production. Historically, there's been a lag effect before these trends hit our business.

We are cognizant that eventually we may feel the impacts of equipment utilization rates, so we are watching new equipment production sales and pricing closely. Despite all of this, we are encouraged by what we see and have heard about future infrastructure spending in both Canada and the US.

In Canada, we believe infrastructure spending will pick up as light rail and transportation spending increases, which corresponds with funding promises made by the recently elected government.

In the US, indicators such as the Architectural Billings Index also suggest continued strength in the nonresidential construction sector, with strong activity in the South and Midwest regions of the US.

Given the vast majority of equipment we sell is utilized by construction activity, we are optimistic it will spur demand for equipment and help usurp some of the excess equipment supply loosened by the oil and gas sector in recent quarters.

Also, the glut of ag equipment that could come into the market in 2016 or beyond represents a good opportunity as we build our expertise in that area. Let me conclude by saying I am proud of our team for delivering excellent results in the first nine months.

This gives us increasing confidence that we can consistently deliver against our Evergreen model over the long-term. Clearly, we could have quarterly blips.

As Sharon mentioned, fourth quarter may be challenging on account of amplified foreign-exchange headwinds and lapping a strong fourth quarter from last year, especially in the US, where we experienced 11% GAP growth in 2014.

We are confident our long-term investors will look past quarterly blips and evaluate the strength of our model based on our organic growth rates, which are a true reflection of our operational performance.

Finally, we have faith that long-term investors will recognize that once FX headwinds lapse in Q1, barring any further erosion of the Canadian dollar or euro or Australian dollar, we could enter a year of relative tailwinds for reported growth. And with that, we would like to welcome questions from analysts and institutional investors.

Given the level of participation on today's call, we'd ask that you limit yourself to two questions please to provide time for others on the call.

Operator?.

[Operator Instructions] And your first question comes from Bert Powell with BMO Capital Markets. Your line is open..

Yes, thanks. Ravi, this quarter the composition of the revenue rate has shifted. It's gone away from auction commissions, more towards auction fees relative to the first couple of quarters.

So I'm just wondering has the performance of the underwritten business, while up year-over-year, been lackluster this quarter relative to the first couple of quarters? And I'm guessing that the auction fees increases all Ritchie Bros.

financial services?.

I don't know – thanks Bert. I don't know that it is all. Definitely, RBFS contributes to the revenue rate. We did have – the volume of underwritten business did go down versus last year. We are not sure that's necessarily a trend because we are encouraging our sales teams to go after it.

And the third quarter generally is a soft quarter so we are watching it closely. The fees sometimes – it is a mix issue and we're going to just keep pushing all the levers. But as I said on the call, the underwritten business continues to be a great focus for us and to drive volume through it..

Okay.

So there's no real read that you would say is a major trend, the fact that the auction commissions have gone down from close to 9.75% down to 9.35%, it's just that's seasonally the weaker quarter?.

I would just say that, look, yes, it came down in terms of the underwritten business volume, and remember with the underwritten business, it is – that is why we always say look, guide between 11% and 12% because – I am sorry, the total revenue rate of 11% and 12% because there's going to be fluctuation.

We do a lot of deals and some do better, some don't do as well. Our view is really continuous improvement over the longer-term and so far we are satisfied with the improvements we are seeing and we are not seeing any underlying shifts that we would comment on..

Okay, just a second question related to that, Ravi. I know you made some changes in the organization that I think speak to a permanently higher rate.

I'm just wondering, one of those things was the percentage of the outperformance that you participate in whether, that's 10% of the upside or 30%, can you just give us a sense as to how that is going, year-end or year-to-date relative to prior periods?.

Are you talking about…?.

Yes, when you do an unwritten big deal, and you share the upside of the econmics, 90:10, 70:30?.

Got it, got it.

We – clearly that's been the overage you are talking about, the overage in underwritten deals?.

Yes..

But we are pushing every lever we can and we don't comment on specifically where it comes from because clearly that's a competitive and confidential information.

But definitely one of the things is, the philosophy is on one hand, it is our capital and we need to get better returns on it, but recognize when we go into – when we do these deals, the owner has a certain view of what the value may be, and we have a certain value and we get to a compromise. So it is not – and so we have different structures.

Sometimes we may say, here's a base rate and a let's push more on the overage, but certainly I'm encouraging our sales teams to do more on the overage so that we gain on the upside as well, but each deal is unique and we look at a variety and it all depends on where the starting point or where the owner was and where we were..

Okay, that's great. Thanks, Ravi..

Thank you, Bert..

Your next question comes from Nate Brochmann with William Blair. Your line is open..

Good morning, everyone, and congrats on another great quarter there..

Thanks, Nate..

Ravi, so on the operating margin side, obviously I know there are some puts and takes with the FX but there continues to obviously be a focus and you guys are doing a great job there.

How much more is there to go in terms of the sustainability of continuing to lower that as a percentage in terms of just internal initiatives rather than relying just on upside volume leverage?.

Sharon, you want to comment on it?.

So I think we would still point you towards the Evergreen model kind of growth expectations that we have over the long-term. We would continue to improve our management of expense control. However, as you notice that the foreign exchange translation is benefiting that SG&A rate, particularly in this quarter..

Okay. And then Ravi, in terms of obviously you're rolling out the Private Treaty, EquipmentOne seems to be getting an ounce of traction.

What are some of the key milestones in terms of thinking about those businesses and where you would like them to go and how fast they can kind of get there in terms of at least your internal outlooks or the levers that you are pushing to grow those different channels?.

I think, Nate, it is really important for us to scale it, put them on a – I'll have Jim Barr make a comment or two on it. And I think it has to be an important source of growth for us and now that, as I mentioned when I first joined 15 months ago, we had the whole [rejection of E-One].

Now we brought it to acceptance and so I think we are beginning to get it going. I want to keep seeing better and better performance over time where it scaled and it is really a meaningful part of our business.

I'm not prepared to disclose numbers, but suffice to say, it is got to become a meaningful size of business, not just icing on the cake, but part of the cake.

Jim, you want to add anything?.

Sure, as Ravi said, I mean this really goes back to customers. Customers have a variety of different needs and we are creating more channels to meet those needs over time, whether they have a need for a control or timing or price or whatever happens to be, and each of these channels has its own qualities that way.

As we said at Investor Day, we are looking to build a – we're looking to be the multi-channel leader in asset disposition and asset management and this is the march that we are on. Each of these channels has a role in that.

Specific to EquipmentOne, as we've discussed previously, the real hyper growth comes when you get a great balance of supply and demand. We are seeing a nice flow of supply. We have gotten our sales force around selling it more than – the vast majority of our US sales force has now at least listed something on EquipmentOne.

They're learning about such metrics as yield, which are more unique to EquipmentOne and really not resident in our other business and they are really learning how to do it well. On the demand side, the crown jewel is really our Ritchie buyer base. And in so far we just barely begun to tap that buyer base.

And so I got a feel the key thing here is matching that supply and demand at the appropriate pace to get a very, very robust marketplace and we are excited about the prospect of doing that..

It sounds great. I appreciate the time..

Thank you, Nate..

Your next question comes from Stephen Volkmann with Jefferies. Your line is open..

Hi, good morning..

Hi, Steve..

I guess I'm just trying to – thanks, Ravi, for all the detailed information. And I apologize, I may be slow on the uptake but I'm going to ask you one more question about some of these end market trends. I guess I'm trying to maybe the bottom line is just figure out whether, I mean, you said, I think, October was down 1% as reported.

That is not terribly different than what you saw in the third quarter and I know that you said the currency headwinds get a little stronger.

I guess I'm trying to figure out whether organic growth in GAP is going to be lower in the fourth quarter? In other words, have we sort of worked our way through this bubble, I don't know, bubble is probably too strong a word, but this bunch of equipment that needed to be sort of reallocated out of places like mining and oil and gas and so forth, or do you think the underlying organic fundamentals sort of remain as they are and it is just the comps that get tougher? Thanks..

I think first I'd never, ever accuse anyone of being slow on the uptake except for perhaps myself, so very, very good question there. Look, I think first of all, I'm not – again I don't know that our growth this year is just a bubble effect. I think we went through quite a bit to give you a sense that it has been a balanced growth.

But notwithstanding that, I don't think there's anything underlying that has changed in our business and our momentum, but we do want to – and we are not going to give guidance on the numbers, but we thought it would be remiss if we did not point out that we had a very strong GAP comp last year, and it is a tough comp.

So that's what we wanted to alert analysts and investors and I think because that was a very sizable last year, double digits, so we just need to work our way through it. The teams are going about their business as they would so that is basically what I'd have to say at this time..

Okay. All right, that's helpful color. And then maybe just a quick follow-on. I know you've sort of targeted, I don't know, let's call it, market share growth particularly in the United States as one of your strategic objectives, how do you monitor that and do you think it is happening? I will leave it at that..

Well, I think first I've got – we've got a great team in the US and now they have a great leader in Terry, and we've got other functional leaders who are outstanding, and so Terry has got a complete team to support him.

And I think the results show ultimately, action speaks louder than words, just look at the results, how we have done in revenues this year.

If the US had not performed the way it did, we would be sunk with our FX headwinds because that's what's [Indiscernible] – and that's why fourth quarter, by the way, going back to your earlier question, my concern on the comps is that big growth last year was driven by the US. And the US is what's been helping us offset the currency declines.

But outside of that, we are very focused on operating reviews, looking at how we're doing auction by auction. This is a granular business and Terry looks at it, I look at it but we have calls and just monitor performance. And Terry is very aware and I will let him speak to it for a second of how important the US is and the number-one priority..

Yes, again, this is Terry Dolan. Thanks, Steve, and Ravi, thank you for that. Our approach is really about making sure we have a disciplined approach to driving growth and expanding our customer base.

That's a lot of what our sales teams and organizations out there are doing is a concentration on taking care and satisfying the customers that we do business with on a regular basis and continue to do that while continuing to expand and grow our customer base and bring more people in to understand the value proposition of what we have done.

That's the reason why were seeing some of the growth in transportation and we're starting to see more traction in agricultural, those kind of areas..

Thank you..

Your next question comes from Yuri Lynk with Canaccord Genuity.. Your line is open..

Hi, thanks for taking my question. Just a quick one for me, Ravi, the number of territory managers has remained fairly flat over the last few quarters.

Is that on purpose or is it harder to find people, and at what point does productivity top out and you are going to need to hire some more TMs?.

Yes, I think there are a couple of things, Yuri. We're clearly in the past, the only strategy we seem to have had was just keep adding TMs and hopefully it will stick. I think we have changed that in terms of one, hey, what is the type of TMs and we continue to have turnover which we want to reduce.

But the quality of TMs, improving their productivity, sales productivity has again increased, so we are pleased with the productivity gains we are making. And when appropriate and where appropriate, we will absolutely add TMs, because that is the lifeblood of this business.

And where, for instance, in RBFS, we've been adding a lot of sales people there because that business needs to be scaled. We are adding it there. Terry is also working now on a potentialization project. Give 30 seconds on that, Terry..

So to your point, our goal is to make sure we increase the productivity and efficiency of our sales people, to maximize the time that they can spend in front of customers. So we are going through and making sure we have a more disciplined approach to the types of customers who we're calling on and how we are calling on them.

And then trying to take some of the non-value added things we had the territory manager do in the past, and put that more on the shoulders of the operations teams, so we have a better partnership with that, and that shift will give us a better coverage with our organization..

When Terry said non-value added, it's value added ultimately to the customer but better served by the operations team. So it is really – our sales team had the whole focus of cradle to grave and doing everything as project managers. I mentioned that at the investor conference.

It is really now as we scale, our operations team or marketing teams are all very capable and it is passing the baton. The other thing we are trying to really push is doing more hunting for new customers. So all of that is going on, but be reassured we will add the TMs wherever which region needs it.

If there's growth potential, we are not trying – that is one place we will not be ever stingy about..

Okay.

And would you happen to have the number of regional sales managers handy?.

Yuri, I could follow up with you on that after the call..

That's great. That's it for me, guys. Thanks..

Thank you..

Your next question comes from John Healy with Northcoast Research. Your line is open. .

Thank you. Ravi, I wanted to talk a little bit about the outperformance on the auction rate line. I know going into the year, one of the big priorities was to help work on the underwritten business here in the US.

Could you tell us maybe what inning you are in terms of getting that business to function the way you would like? And then, if I think about the improvements that you are making in that business as well as the launch into some of these additional financing services on RBFS, why wouldn't the auction rate have the potential to maybe have a more normalized high-end, maybe around 12.5 or something like that?.

First I have to clarify, since I'm originally from the Commonwealth, which game you are talking about, cricket or baseball, in terms of innings, so let's use baseball, or hockey, where I just discovered there are three periods..

You guess well..

Look, I think the idea here is continuous improvement and I want to really caution here that I don't want irrational exuberance, and that this is a rocket ship that can keep going up on revenue rates, because ultimately we have to – it is going to be a balanced growth between GAP growth and revenue rate.

So our focus is really – and this is the kind of thing, because we do 1,000 deals per year. So we are very fortunate that the first nine months have gone well.

That is why I'm still not, in terms of overall revenue rate, willing to get off the 11% to 12%, because sometimes you take one step forward, it may be two steps back because you may have one big deal that goes sour on you. The good news is, in aggregate we make money.

I am just trying to get the volatility less, and I'm not trying to sandbag or be conservative, it is just the nature of the business. We just need to be careful about it. But having said that, look I've been consistent in mentioning Canada is our best-performing business on underwritten.

Then the US is the next, but in US each region is at a different level, and then Europe comes after that. So what we want to do is steadily keep improving each of those and – but we are also in an era of increased competition. We're going to vigorously defend our share as well. So you've got to take all of that into account.

Now clearly, one of the things, the revenue rate is also bolstered by RBFS, which is a beautiful business for us, so that is something to keep in mind as well.

I think you had a question about RBFS, Sharon or Rob, anyone who wants to answer that? You want to just repeat that Yuri in terms of the RBFS question?.

Yes.

I was just wondering why the contribution of kind of some of the extensions you are getting into in terms of the leasing business that you talked a bit about, why the penetration rate of that product just wouldn't help push the higher end of the auction rate revenues higher?.

Okay I will have Jim, who oversees that business, talk to….

First of all, as Ravi said, we really like the RBFS business. It is a great example of how we can use our ecosystem that we created over decades and monetize that ecosystem in a way that benefits customers, brings more to auctions, and so we're very excited about that business.

We have a great team and great leader there and it is a nice model with great lending partners that help us create this value.

Still, most of what we do there is penetrating really what we called addressable GAP, which is the part of the GAP that can be financed, and we are not near topping out on our penetration rate on that one, so that's really carrying most of the growth there.

But just as we think about our multi-channel business where we are trying to help more and more customers in different ways, same way here.

We found that if we just follow the customer, even if we did not actually transact with them this time, but we can help their business in a way and finance their business and help them grow, that's what we are all about, being a trusted advisor for our customers and we are very pleased with the direction of this business..

Great. And then just one other question on the commentary you gave about the fourth quarter. And I think about some of the things you've said, US has clearly been a driver for you guys.

Is it reasonable to think that the comparisons will remain difficult in the first part of 2016, just given what you have to grow over in the US in the currency issues? Should we be thinking about maybe some of these comp issues continuing into 2016 or is it too early to tell?.

One, it is a bit early to tell, but Q1 definitely will still be – that's when the FX headwinds are a big issue globally, because that's when the plunge occurred so we've got that. Then we had a very strong first quarter.

But I think the whole point about this business, because I try not to run the Company on a quarter-to-quarter basis and really look at so what are we trying to achieve in the longer term where we can deliver consistently on our Evergreen model.

What we are trying to do, the whole essence of our strategy is diversification and it is finding ways of different sectors that we can continue to drive growth. As I already said, transportation we grew. But now we're going to continue to try and scale that business. Agriculture I think is a great opportunity.

We are already do well in Canada but US is a big opportunity for us. So we will try to find new ways. The key is we are a growth Company. We are very committed to that. Each quarter we'll – they will have issues, but I would say yes, your – in terms of some of the challenges, Q4 and Q1 definitely represent tougher comps and tougher FX..

Okay. Thank you, guys..

Thanks John. We will go another five minutes and a few more questions..

Your next question comes from Nick Coppola with Thompson Research Group. Your line is open..

Hi, good morning..

Good morning, Nick..

Another ARR question, can you just give us any concrete examples of what you are doing there to improve performance? Just help us think about that..

Sure. I can give you – I don't want to get too detailed. This is like saying to our competition, here is our play book, why don't you copy it. So you will understand and respect that I'm not exactly going to divulge our secret sauce here, so please don't think I'm being rude. But look, here's – I think let me just reiterate a few things we are doing.

Number one, on smaller deals, there used to be a little less oversight and control, so like $0 to $0.5 million, where our valuation groups were not as involved in the past. Our valuations group is an outstanding group and they are definitely weighing in on those.

And they have veto rights on things that – and remember the $0 to $500,000 is driven by our TMs and whereas the higher, the bigger deals it goes up to RSMs and VPs and so on. So it is also really a training and education thing, where as our valuations teams are very experienced.

So part of that is better oversight and coaching and saying, hey, when do you walk way, because our same TMs do an amazing job driving straight commission business on the $0 to $500,000. So we're putting a little bit more oversight in that regard.

Secondly, we've regionalized our valuations group so that it builds more and more expertise in the regional market. So we've got valuators now in the US specific than and they partner alongside their VPs.

So there's – we've got a valuator, a senior valuation person for the East, someone for Central, someone for the West and so they start getting to really know and understand, and they are working a lot closer with our business teams. Third is just trying to reduce the number of dumb deals we do.

If we know going in that – by the way, that's not my term, it's my valuations team who gave me that word, which is, if you know going in you will lose money and you just want to do it because you want to drive GAP, and that's the shift we are creating in the organization that is about revenue, not just GAP.

So that we are trying to play it a little bit more disciplined on that. So I will stop there because I don't want to go into each deal in how we tactically approach it, because that would just be telling our competitors, here is the play book..

Understood, and that was certainly very helpful.

And then I guess shifting gears a little bit, can you guys talk a little bit more about the Private Treaty channel and how that fits certain customer needs and how it differs maybe from EquipmentOne?.

Why don't I have Karl, who has also worked on some of these, actually give an example of how we may go, without mentioning the specific.

Karl, are you there on the phone?.

Yes, I'm here, Ravi..

Go ahead and talk about that, on a hypothetical example..

Sure. So in this market right now, there are certain categories of assets are challenged, to put it lightly. So in one example would be in the mining industry, where you've got reduced demand on some larger type assets.

And those are typical types that we can utilize a Private Treaty strategy on to take more time to market, go to the right places in the world to find buyers for them, and give the seller a little more control over their destiny when they are letting something like that go..

Randy, you worked on a few of these in the recent past, want to – is there anything you want to add?.

Thank you, Ravi. I think Karl has hit the nail on the head. In terms of the asset categories that are large, sometimes have unusual circumstances in terms of their location physically, their cost to move and their relative value sometimes will be more suited for a model like a Private Treaty.

If you imagine very, very large capital items involved in the mining business, the decision-making process for organizations to acquire or spend that capital is more complex and time-consuming and that also fits better with the Private Treaty style model. That's one particular example, I think, where it is really well suited..

Nick, the strategy is when you think about customers, as we have done on our segmentation, there is a huge level of, there's a customer segment that are fans of the auction and get used to it, but even they don't give us 100% share of wallet. Then there is the whole risk-averse one.

So the dynamics in this is immediacy of price and getting liquidity versus control and control would be on price, product, place, et cetera. So the more control you need, especially if they are very high-value assets, it is catering to that segment.

And as Randy and Karl pointed out, if those fleets are quite large in value, the customers really want one, a personal touch, but they appreciate the reach that Ritchie Bros. has. In the past, they've approached us, but we were, as you know, we were a very single-channel company.

As our vision has changed to really become a multi-channel provider of diversified sectors, services and channels, this is definitely leveraging all our current equity and assets. Okay.

Next?.

That's helpful. Thanks for answering my questions..

All right.

One last question and then we will – is there any other questions waiting?.

Do we have time for one more?.

Time for one more then, and we will end it there..

So your next question comes from Scott Schneeberger with Oppenheimer. Your line is open. .

Thanks, I will be quick. Just one topic, Ravi, on the transportation group, almost a fifth of the business up 300 bps year-over-year, it's quite impressive.

Could you speak to, is that mostly a component of the sales team and the focus or is there a competitive dynamic that may be at work, or is there an end-market dynamic that may be at work just solely on that? And then lastly, is there a lot of that risk business in the transportation space? Thanks..

So, and Terry, you may want to also add something here. The key is, we've made it a dedicated focus. We've created a Transportation Center of Excellence in Texas and a couple of other areas in the West coast.

So we are doing a number of things to improve our expertise in that area, so it is getting – going about in a more disciplined way and concentrating. In the past, it was mostly vocational stuff. Now we are focusing more on the on-the-road stuff. The market has been there and so it is just improving our share of market and driving it..

Yes, it's become recognized as a significant leader in this space. We are now being recognized in transportation. Having dedicated people, having people who understand the transportation market, being involved in their associations, et cetera, has been really what's driving a lot of that..

You had another question about do we do underwritten? Yes, we do underwritten business in the transportation. We are getting smarter about it. But in the past, when we looked at it just like [Indiscernible], and made mistakes and lost money on a number of deals.

As we get to know this area better and smarter, we are trying to improve our product knowledge and expertise, so we will continue to not hesitate but we just want to make sure we have the expertise before we plunge in.

I think with that first I want to apologize to all of you that our written remarks, or commentary today was a little longer than usual. It is just that we had so many questions from analysts and investors that we thought it is better to do it publicly and do it once and for all.

So, we really thank you for your patience and we will revert back to our shorter prepared comments in the future, but appreciate all the support, and onwards and upwards. Thank you very much..

This concludes today's conference call. You may now disconnect..