Good morning, ladies and gentlemen. And welcome to the Ritchie Bros. Auctioneers Fourth Quarter Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for question. [Operator Instructions] I would like to remind everyone that this call is being recorded on Friday, February 27, 2015. I would now like to turn the conference over to the presenters. Please go ahead.

Thank you, Operator. Good morning, everyone. And thanks for joining us on our fiscal fourth quarter and 2014 results earnings conference call. Discussing Ritchie Bros. performance today are Ravi Saligram, Chief Executive Officer; and Rob McLeod, Chief Financial Officer. Joining us for the Q&A session following the formal remarks will be Jim Barr, Group President; Randy Wall, President, Canada; and Todd Wohler, Chief Human Resources Officer. 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 and future earnings, revenue, gross auction proceeds and other items such as our potential addressable market, 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 filings 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 fourth quarter and fiscal 2014 results were made available yesterday after market closed. We encourage you to review our earnings results, MD&A and financial statements, which are available on rbauction.com, as well as EDGAR and SEDAR. All figures discuss on today’s call are in U.S. dollars unless other indicated. I'll now turn the call over to Ravi Saligram, Chief Executive Officer.

Thank you, Jamie, and thanks to everyone for joining us on our earnings call today. I will kick off the call with some quick highlights of our strategic plan, discuss recent events including trends from recent auctions, afterwards, Rob will provide a discussion of our fourth quarter and 2014 performance as well and as well, our 2015 outlook. I will end our prepared remarks by outlining priority execution areas for 2015. As you know, the last several weeks have been very eventful for us. On January 12th, we presented our new strategy to investors and analysts in New York. Immediately following that event we held and off-site meeting with nearly 500 employees, including our entire sales team, where we discussed our strategy in detail, aligned individual and key initiatives with our new strategic direction. And just lastly week, we held our Orlando auction, which is usually the largest auction we hold each year. I hope that many of you joined us at our recent Investor Day or have had the opportunity to listen that webcast replay. We outlined many details of our new strategy during that presentation, which we believe will help us restore growth, drive cash flow and improve shareholder returns. We have organized our strategy across three strategic pillars, growing revenue and earnings, driving efficiencies in the business and optimizing our balance sheet. I will just remind you of a few key points. We are focused on driving growth by improving our market penetration in key regions, namely the U.S. which is our top priority, but also the U.K., France and Germany, we are interest in gaining dept in our markets, not necessarily breath in new one. We are evaluating ways to improve our penetration of key sectors, such as transportation and agriculture by more effectively marketing to…

Thank you, Ravi. I will take a few minutes to discuss our earnings results and then, I will provide you with our expectations for the year ahead. As we had announced in mid-December, we achieved record annual gross auction proceeds in 2014 of $4.2 billion. This is an increase of 10% from 2013 with strong year-over-year GAP growth in the second, third and fourth quarter. And in fact, we achieved a new fourth quarter GAP record in 2014 of $1.2 billion, which is a 12% increase over the quarter four last year. There were also foreign exchange impacts on gross auction proceeds and other line items, especially during the fourth quarter. I will discuss this in detail after we review our operating results, first for the fourth quarter than for 2014. Our fourth quarter revenue rate was 11.2%, lower than the rate we achieved in the past three quarters due to the performance of our at-risk business. During quarter four, underwritten contracts represented 35% of GAP. As you know, fluctuations in our revenue rate occur primarily as a result of the performance of our underwritten contracts. And in the fourth quarter, we were aggressive in pursuing packages of equipment and took calculated risks to obtain these key packages. We also pursued an increased volume of smaller packages of equipment during the quarter, which also impacted our at-risk rate. As we discussed at a recent Investor Day, improving the performance of our at-risk business is the key strategic priority for the company. Over the next several months, we will be making a concerted effort to more effectively transfer best practices in underwritten contract methods from our really experienced teams, primarily in Canada to regions that have recently underperformed in at-risk. We've also recently revised our proven and oversight policies regarding underwritten…

Thank you, Rob. Let me quickly summarize our 2014 performance and then go into our key focus areas for 2015. We had strong volume momentum in 2014, with 10% GAP growth. Unfortunately, we did not do as good a job converting GAP to revenues due to soft revenue rates on our underwritten business, particularly in the U.S. and Europe and which occurred in fourth quarter. Having said that, it is encouraging that our organic revenue growth rate at constant currency in 2014 was actually 6% versus the reported 3%. I am very proud of our team’s performance in driving $1.8 billion in GAP online in '14, a growth of 18% versus 2013. We are truly becoming a leading multichannel player. We controlled SG&A well and improved adjusted operating margins by 24 basis points. We grew adjusted EPS nearly 12%, but acknowledged that 40% of this growth came from an unusually low tax rate in 2014. Operating free cash flow in 2014 was 119% of adjusted net earnings and RONA would have been 16.3% for the year, a 100 bps improvement in 2014, excluding the Japan impairment. You can see we did a good job controlling our capital expenditures. Overall, good marks on our scorecard in many areas, except for GAP to revenue conversion. Going into 2015, my focus and my team’s focus has been cascading down to the organization as follows. Our first priority is to improve our revenue rate with a laser focus on improving the performance of our underwritten business, particularly in the U.S. and Europe and reducing inconsistency and volatility. Our second priority is to spur straight commission growth across all geographies. Both of these priorities will be achieved through disciplined execution, monitoring performance for operational metrics, increasing awareness of improving margins, and improving our sales force…

Everybody on the call if you would like to ask the question, can you please press star one to queue up again and we will start the Q&A session.

And our apologies for the delay. Operator, are you ready to announce the question please?

Yes, one moment please. One moment please, for your first question. Your first question comes from Cherilyn Radbourne from TD Securities.

Thanks very much and good morning.

Good morning. Thanks for your patience.

Yes. Our apologies. First sorry about whatever glitch that occurred.

So first question I had was on your U.S. auction revenue. That was down year-over-year for the first three quarters of the year, but it appears to have posted some pretty good growth in Q4. So I am just curious how much of that was GAP growth and how much was good performance of the underwritten business?

Hi, Cherilyn, it’s Rob. And I would say, it’s mainly GAP growth. We were -- as we know -- as you saw on our remarks, the revenue rate did fall in quarter four and the U.S. makes up half of our marketplace or half of the business. And so really it was geared to the GAP growth. And obviously, that’s why we have a focus going forward on improving that at-risk performance and also trying to mitigate some of the volatility in that rate as well.

And I think it was mentioned at your January Investor Day that you had a couple of good fleet dispersals in the fourth quarter. Were those in the U.S. market?

I can’t recall the exact comment that we made in the January meetings, but I suspect one of them was in Canada for sure and the other one probably was in the United States.

Okay. And then last one for me. Just to be clear on what sort of impact on income you are expecting from foreign exchange in 2015. Can you give us a bit of range there on a net profit basis?

You mean the impact on…

The net impact on either EBIT or net income, whatever you prefer.

Right. And so in our remarks we said in the Evergreen model that we have the, let’s say, net earnings growth in the high-single digits, and potentially it would -- foreign exchange would draw that down to low-single digits.

Okay. Thank you. That’s all my questions. I will get back into the queue.

Cherilyn, one thing to remember on the net earnings is the tax rate. So when you look at the operational health of the business really, so we had said, if it’s constant currency on an organic basis, we’re looking at low-double digits, but that would come down to high-single digits as an impact of the FX.

Your next question comes from Sara O'Brien. Please go ahead.

Hi, good morning. Ravi, can you help us reconcile the focus to improve the revenue rate? When -- in the time when you are looking to gain market share to grow GAP at the same time. I am just wondering if there is an bit of an trade-off expectation there that you get a little more aggressive on the underwritten portion of the business if you didn’t in Q4. And would that not perhaps continue some pressure on that revenue rate?

Sara, that’s a great question. To me, it is and it’s how we manage the execution. This is the crude analogy is that we need to walk and chew gum at the same time. And so to me taking calculated risk on smart deals is a good thing and we are not going to take the foot off the accelerator on doing at-risk deals on underwritten. That’s a competitive advantage. That’s using the strength of our balance sheet. And as we’ve shown in Canada, Canada has a very predictable good rate. Occasionally, they may have some deals that may go all right, but in general, they do extremely well. The U.S. has been inconsistent, and we’ve done a lot of analysis on this. Part of the issue is actually smaller deals rather than bigger deals. And this is where we have looked at sort of the internal control mechanisms and the expertise. And one of the things we are looking at we have a great expertise with our senior evaluation analyst, who have very strong appraisal accuracy. And we are now going to make sure that on the smaller deals that they are involved and in the whole process more than that and have a part of the approval process. So I think the smaller deals represent a good area for us. And this is where there is also an important thing on sales training, as we are getting a lot of new sales people into the fold, continuing to train them about the whole methodology and transferring best practices is going to be quite important. So the net message here is that we just need to get -- we do a tremendous job, the fact that we have done $10 billion of at-risk business over 11 years and every year we have been profitable. Yes, there are few deals that we lose on an individual basis but the majority we do pretty well. So I think it is just getting the balance right and not doing its -- if you walk -- having the ability to walk away from things that at the outset look like they will be unprofitable, unless it has a real magnetic effect of filling the auction with good straight commission business.

Okay. And just from my understanding, the smaller deals, is that mainly a U.S phenomenon versus Canada that the at-risk business would be more small deals versus larger lots?

I think, no. Everyone has small deals, but it’s just we do much better in Canada on small deals. And so in parts of Europe, in Southern Europe we do quite well, but not as much in Northern Europe. So we’ve now really done a very detailed analysis on the performance by size of deals, by geography and we’re using these analytics to help cascade and with the organization to get this focus. So its not that smaller deals are wrong. In fact, we do -- that’s bread and butter of our business because that those deals M&A from our end-users, mid-market end-users. So it is just getting a little bit more proficient with it.

Okay. And then just try to reconcile, recognizing its early days in 2015, but the outlook for potentially flat GAP in a current FX environment where you’ve just seen the Edmonton auction up 60% year-on-year, 30% in U.S. dollars and the Orlando auction? Just wondering, is there something -- is it a conservative guidance or is this something that you expect will kind of worsen either on pricing or something else throughout the year?

Yeah. Great question, Sara. And I think a really important thing to remember is that quarter one 2014 was flat compared to quarter one 2013. It was a very challenging environment at this time last year and so -- and then we had growth in each one of the following three quarters in 2014. And so to see growth on ‘15 versus 2014 is really simply a continuation of where we ended the year.

Sara I wanted to little bit of color on that is, look our guidance is usually the best we can at that particular time based on what we know. And our history has been a little bit of over promise on the deliver. This team really wants to over deliver on our promises. So let me if you get it that.

Okay. And maybe just for understanding, what FX rate are you assuming? Is it a $1.25 or is it another range for the Canadian dollar?

Yeah. We have rates both for Canadian Dollar, Euro, Australian dollar and those are really the main ones that affect our lines of business. And we’re really using the current rates and so the rates that are in effect in the last week or so to anticipate the impact on the business in 2015. And so as I say, if those rates persist than that’s the effect and it’s a challenge forecasting them, obviously.

I mean, clearly, Sara, as you know, every global company…

Yeah.

… facing this issue today with the foreign exchange rates. That’s why we are more laser focused on the organic health of the company and what is the organic health of the operations and hence, are trying to separate the FX from that. And what we are very laser focus on is, how do we drive that organic growth, because we can’t control the FX.

Fair enough. Okay. Thank you.

Thanks, Sara.

Your next question comes from Nate Brochmann from William Blair. Please go ahead.

Good morning, everyone.

Good morning, Nate.

Hey. I wanted to tackle bit more on Sara’s questions, if I can drove that a little bit further in terms of just thinking about the topline growth? Clearly, we still heard seems that we still have some momentum in the underlying operating environment, both in terms of pricing and construction activity and whatnot? And in addition to that, I mean, clearly, I understand that this is a “transition” year, but I would assume that incrementally as we get the sales force training up and going and we have some clear momentum in the sales force coming out of a lot of year event it seems like, I would think that there be a little bit of a incremental extra kind of push or extra kind of juice that kind of go along with those kind of more operating tailwinds? And, again, I get the sense of being conservative and that’s absolutely right approach after a lot of years have not been able to predict this business. But just wondering if you kind of explore, maybe both the operating environment as well as some of the initiatives, whether those get delayed in the following years as they get put in place or whether there might be some benefit later this year that we’re not really anticipating?

So, Ben, good morning again. And three -- I'd say three factors. Number one is Canada and because Canada has been on a huge growth trajectory, five years of growth, terrific work. It’s difficult at this stage still to really predict where these oil and gas prices will have an effect. We’re very encouraged obviously with the Edmonton auction, which just occurred. We don't know. Is that the prognosis for the rest of the year? Don’t know. It’s tough to predict. So Canada, clearly and how Canada will do is a factor for us, as we thought about the year and our guidance. And frankly, as you know, the Edmonton auction just finished last night, so we are encouraged also by the pricing trend. And the strength that we saw in sectors outside of oil and gas is just the strength of that. Number two?

Approximately? How much of your..?

Increased participation from other parts of Canada, which was quite interesting? In Eastern Canada, for example, acquired a greater share of the auction than they have averaged over the last year? Another important factor, I think when it comes to currency is replacement cost of new equipment. And for Canadians, new equipment prices are heavily influenced by foreign exchange. It's often priced in U.S. or it’s built in the U.S. And so replacement costs renewed, the Canadian buyers has jumped significantly. So that helps to turn people to the used market for late model. So that may also have been a factor helping to support the stability of a pricing level we saw here this week.

Yeah. So I guess I still struggle going back to an earlier question. I don’t remember if Cherilyn or Sara asked it. But just about where you are coming up with this sort of flat GAP for the year. And you’ve come off some momentum in the fourth quarter. You’ve got some momentum in these early auctions in the first. I understand you want to exceed expectations but you can’t set expectation so low that -- and then beat them. You expect to get credit for that because in the meantime, you’re going to face some scrutiny over low target. So, I’m struggling to reconcile that. You’ve got a lot of volatility in the energy markets, which should free up equipment for you. We’ve seen it in Houston and Edmonton. You’ve got all these initiatives underway. EquipmentOne had some momentum in the fourth quarter, so how does this all shake out?

So, I think Ben, there is absolutely no intention here to -- we’re giving you the best views based on the plan. And these plans were developed based on our ‘14 performance and as we looked into the full year. So it’s not trying to say, hey, let slow ball it so that we can do better and get credit. I think we want to give our shareholders the best view based on where we are. Having said that look, I think, we have focused more on what we can control, which is how we’re going to grow the base business on an organic basis. And when you think about that, what we’ve said really is that both GAP and revenues, we talked about it in terms of mid-single digits. And so who knows how we can predict. What is going to happen with exchange rates throughout the year and that’s the one, that’s our keen focus. And you should also recognize, given that we’ve said both GAP and revenue, whereas in Evergreen Model we had said that the revenue would actually be lower than GAP growth. And our concern there was the underwritten contracts and getting into new sectors, we’ve actually signaled that it will be at the same sort of levels, which is same we’re going to -- we are committed to making improvements in the at-risk rates. So to me, I would rather focus on our organic growth rates and where our focus is and delivering that because the foreign exchange is a little bit out of our control. And we were just telling you the potential impact if currency rates persist. This is a new team. We’ve just put in a new strategy. We’re getting the organization to stabilize in the transition year, so a lot depends on how we can get momentum on the execution. So based on that this is our best case and if things improve, we’ll clearly be communicating that.

Okay. Thanks very much.

Thanks, Ben.

Thank you. Your next question comes from Ross Gilardi from Bank of America. Please go ahead.

Yeah. Good morning. Can you hear me, okay?

Yes. We can. Thank you.

Yeah. Thanks. Hey, Ravi, I’m just wondering if you could talk a little bit more about Orlando and what you saw from a pricing perspective. I think you mentioned that pricing was pretty good. I wasn't clear if you were talking about your auction revenue rate or if you were talking about used equipment pricing. Anecdotally, we’re hearing that the pricing was down a little bit month-on-months in Orlando where it's usually up pretty nicely. So can you speak to that? Is that accurate? And if it is, why do you think used equipment prices are softening up right now?

So, I think, let me take a short at it and then, Rob can also add some color. So number one, when we say record revenue performance, it was really our underwritten portfolio performing well and that had a substantial impact compared to last year. And that was the driver because of our focus on that and some particular packages performed extremely well for us which we’re very pleased with. Now it’s an interesting thing, as we are dissecting the Orlando auction. The mix clearly was quite different from that of last year. We had a lot more claims last year. We had less this year. This year, we have lot more transportation assets than last year and transportation on a GAP lot is much lower than construction per lot. So when you look at those variables that’s how the asset impact. And in Orlando in particular, what we saw is the type of equipment we have. We had a sound equipment ages in Orlando. We’re a little older than last year and that’s not necessarily a trend at all, but it just what we were able to get. It’s also because we were been a bit more selective about the types of packages. Especially, dealer packages that we -- some of which we walked away because we felt they would not be necessarily profitable for us on an underwritten basis. So there’s a whole combination of stuff. And for me, it is tough to deduce right now rather that is a real sense of softening. On the other hand, when you look at Edmonton, we actually saw -- we could say there was pretty solid pricing in Edmonton and newer equipment and across the board. So, I think it’s a bit early to tell to come to any sort of reasonable conclusion whether pricing is softening. Rob, would you have any other color to add to that?

Well, maybe just a little bit more specifics on the mix of the equipment. There is a lot of commentary prior to the auction about the growth in the number of items, the number of lots in the auction. And therefore, extrapolated what the expected GAP was going to be, which is always a tenuous thing to do. Part of that growth in the lots for sure was small items and so what we sell in our Timed Auction lot system that had a higher growth rate than the large items if you will. And also, I think it was in Sara’s commentary after the auction she came and visited us there. The feedback that she got from people there at the auction was that there was a lot of -- sorry, I would say in a different way. There wasn’t as many shiny, bright, shiny items in the auction this year compared to last year and there was fewer kind of one or two-year old pieces. And I think that goes exactly what Ravi said, is that those one to two-year or even brand new items normally come into the auction in some form of an underwritten package. And we were a little bit more selective this year in pursuing those packages, which has an impact on that age and that mix.

Okay. Thanks very much. And then just Ravi, I want to ask you just more big picture. I mean more Ritchie's business is clearly going online and you’ve had a lot of success there yet. You’re pushing for the auction revenue rate to go up over the next several years. Don't you have just a normal underlying, some underlying erosion in auction revenue rate over time as just the overall business model moves more to an electronic, how do you offset that?

I’m sorry -- because the online stuff shouldn't have an impact on the rates because it’s a multi-channel and the more bidders you have, typically that drives up the competition but Rob, do you have some more.

I guess it’s -- I am not sure if you are thinking about the different, two channels, the unreserved auction on EquipmentOne. But on the unreserved auction, the majority of the revenue comes from the consigner and their participation -- the online participation is obviously from the buyer and now there isn’t any distinction between the fees that we’ll receive from buyers whether they bid online or their on-site. And so -- as there is more bidders and buyers online, it doesn't actually change the revenue model. Whereas on the EquipmentOne, the majority of the -- obviously it’s all online and the majority of the revenue does come from that buyers in the form of a buyers fee.

And the last comment I’d like to make that is in terms of EquipmentOne, the overall -- the margins we’ll make on EquipmentOne are very similar to the auction business. So it’s really not that you are trading one for another.

Did that answer your question, Ross?

Yeah. Okay. That’s great, guys. Maybe I’ll follow-up afterwards but thank you for that.

Great. Thanks so much.

Your next question comes from Yuri Lynk from Canaccord Genuity. Please go ahead.

Hey. Thanks for fitting me in. Can we talk about the competitive dynamics and how they might be impacting the auction revenue rate? I mean, it used to be that at this point in the cycle when late model used equipment supply is improving that your at-risk business would decline into the mid to low 20s and instead, we are kind of stubbornly high and actually up this year. So can you just explain the puts and takes behind that and where we can expect that number going forward?

Yeah. Thanks, Yuri. Yeah, it’s actually the -- I am not sure that your thesis is 100% correct because when you go back and look in 2010 -- 2009, 2010 for sure, our at-risk volume fell against historic averages. It was kind of in the low 20% range and that was a point in time where equipment was very tight. And then if we go back a little bit further, the last -- the good old days if you will say pre-2008, including 2008, our volume of at-risk business was actually relatively high. And also there was significant volatility in the performance of that at-risk business. Even though the market was very frothy, there was tremendous volumes of transactions and used equipment at that time. And so it's not -- I don’t think it’d be appropriate to say that now that the market has freed up and there’s more transactions, there’ll less at-risk business. And also that's why we are so focused on our at-risk performances because there is the risk in that marketplace or in that market environment to pursue those deals and not be strategic enough about it.

So just one other commentary, it’s really the at-risk biz. Our core is -- we’ve got to think about as to really -- they are not mutually exclusive. But two different types of businesses, a straight commission business, which is our bread and butter and then an at-risk business. And at-risk business really for us has many strategic uses. There are certain owners that may want to do a full dispersal and they maybe a lot more comfortable with having a guaranteed performance. There maybe people who are first time into the auction and into an unreserved auction and this is way for us to bring them in, to give them some reassurance. On the other hand, sometimes we pursue things as a competitive initiative. And what we are always trying to do is determine each package because we do 100s of at-risk deals and their varying sizes and varying geographies then to really say. Down the line thing is can it also help bring in other packages. Sometimes that’s true, sometime that’s not. We handle those on our own merits. But I think what we now know is just with improving execution and how we do some of our deals, that’s the laser focus on improving the performance. Having said that, we are not going to decelerate on our at-risk business because the competitive advantage and something that I think we are very proficient.

Okay. That makes sense. Just capital allocation, I mean you're probably going to have around after you pay the dividend $60 million in free cash flow this year. The types of acquisitions that you're looking at, can you give us some flavor of the size or the number? And if they are more of the physical auction site or they -- are you looking more at boosting your virtual presence?

So I think at this point obviously, we can’t name targets. But to give you a sense for, it’s -- they are really trying to drive strategy and our preference, because you can never time acquisitions and say, if opportunistically something comes up and it’s the right thing, we’ll go for it. But strategically, our number one priority would be more in our core business in terms of auctions and with the particular focus in areas. So it could be we may have a geography, which is not as strong, so let us a particular geography in the east of the United States. So if there is a local player that has strong reputation and even if it’s in construction, but within construction, say, they are good at a certain aspects or certain niches and have a good brand, that maybe an interesting prospect. And for us, that’s also talent acquisition because we are really hungry for bringing more talent as we grow. And so that might be an instance or things that give us sector expertise and say transportation or an agriculture as I mentioned in one of the strengths of Canada is when we bought Kevin Tink’s company and All Peace, which is specialized in agriculture, not only did we get that as a beachhead, but we got Kevin, who later on rose to become the President of Canada and has been a big factor with his team to drive the growth there. So those were the sorts of things we are looking for because as you know, we don't have much of really foothold in agriculture in the United States. So these are the times that we are at. But having said that, we are [indiscernible] looking at what other types of things that that might be in new channels and on online place as well. But our first priority would be the core unless something opportunistically arises.

Okay. I guess the size of these would be rather small and we would be expecting you to roll up a number of them over time and that’s how we think about it, or are there bigger players out there?

No, I think -- as I’ve mentioned they are tuck-ins and bolt-ons and they are smaller and we want to try to do a roll up, but very deliberate, make sure the integration goes well. We’ve not done this much in the past, so we need to really be deliberate and cautious. And by the way the guidance we provided was really organic and didn’t include any sort of acquisitions in there so.

Got it. Okay. Thanks very much.

I think last question, is it Jamie?

Last question is from Scott Schneeberger from Oppenheimer. Please go ahead.

Thanks for squeezing me in. I just had a couple and I’ll make them real quick. Curious on the commentary and update on Tier 4. And then, I’ll ask my follow-up after. Thanks.

Rob, do you want to comment on Tie 4 or Randy?

I’ll just jump in and then Randy can jump in as well. And I guess the introduction of final Tier 4 has been relatively recent and the comments that we are hearing back from our customers are that it’s not as scary a concept as it might had been a year or two year ago because they actually can understand the impacts on their business of the Tier 4 equipment and they know the pricing of the equipment. Also I think now near to universal ability, universal ability from each OEM to de-tier the equipment, and so how which -- does that presumably helps the residual value or the resell value in year three, year four, year five to be able to attract a greater international marketplace. And so I think that is helped with the acceptance of Tier 4. Randy, do you have any comments?

The only thing I would add to that is that there still is a perception and preference on many used equipment people that they prefer the known quantity and a Tier 3 item is -- can be in demand on the used market. So it’s helping those asset values.

Thanks, guys. Appreciate it. Then just lastly Ravi, it’s for you. With regard to a territory manager, we obviously see what the growth is. Is there any commentary on productivity, I know it’s short-term, but thoughts there? And then insemination programs and is any tinkering there or are you comfortable with the status? Thanks.

Thanks, Scott. I think so first, sales force, our number of sales people did increase in '14, but our sales force productivity as measured by GAP or revenue producer did increase a little bit in '14, 2.5%. So it is modest. I think going forward versus some of the mantra in the past that every year we just need to keep adding sales people and that’s what’s going to drive, we are going to be a little bit more deliberate about it. Clearly, we are going to allow for replacements as turnover occurs. But we are not going on just a spree to say, let’s just, keep adding sales people, because we think we have a pretty good complement in the sales force of over 300 people. Now I think for us the thing is to train them, develop them and really get them to be savvy about our underwritten business etcetera. So the one place that’s our sales force productivity keeps improving significantly is Canada. So no surprise. So we need to get those gains in other countries. And if you do add salespeople to me, it has to be more to build expertise in other sectors. So rather than going back and hiring the construction-oriented TMs, it would be more transportation based TMs or transportation expertise are at TMs which we already started doing for instance in the U.S. We now have about a team of six at TMs. So in Europe we just hired a specialist act person. So I think that’s sort of the view that we are taking. Then your next question on compensation, at this point as I said in the Investor Day we had changed the sales force compensation to be based on revenues couple of years ago. In domain that seems okay though, I think we may want to -- we are going to study it and tweak it and make sure that it’s aligned with the strategy. But for this year, we are going with where we are though and probably look at some tweaks. The one change is actually at that the regional sales manager level, where we -- part of the criterion was that how did they hire TMs and that’s going to be no longer a criterion. It’s really going to be based on revenues and profits, but sales force in general good focus on the revenues side so.

That's great. Thanks very much.

Thanks. We appreciate everyone’s patience and we apologize for that technical glitch that occurred. I think as we’re just wrapping up the call, I think we are really pivoted to execution. I know there have been questions about whether this guidance was conservative. Look we gave the best view. One of the big question marks for us really is Canada. And at the time we did this with oil and gas prices, we don’t know how they’ll behave. So that’s really the biggest question mark. Clearly we have got five years of track record. It’s got a great team in Canada. So we’ll just have to see how that progresses. The Edmonton auction was clearly a positive. And so with that, thank you very much for being on the call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.