Good morning. My name is Scott, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Ritchie Bros. Auctioneers Q3 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Jamie Kokoska, Director of Investor Relations, you may begin your conference.

Thank you, Scott. Good morning, everyone, and thanks for joining us on our fiscal third quarter 2016 results 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; Randy Wall, President of Canada; Terry Dolan, President of U.S. and Latin America; and Doug Olive, SVP of Pricing and Valuations. 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 filings, available on the SEC and SEDAR websites, as well as our Investor Relations website at investor.ritchiebros.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 2016 results were made available yesterday after market close. We encourage you to review our earnings release and Form 10-Q interim report, which includes our MD&A and financial statements and are available on our website, as well as EDGAR and SEDAR. On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures to the most directly comparable GAAP financial measures and a reconciliation between the two, see our earnings release and Form 10-Q. Presentation slides do 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 U.S. 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 and rounded figures. I will now turn the call over to Ravi Saligram, Chief Executive Officer.

Thank you, Jamie, and good morning, everybody, and thanks to everyone for joining us on our earnings call today. As you likely saw in our earnings release yesterday, our third quarter results were impacted by both an impairment charge related to EquipmentOne and acquisition-related costs associated primarily with our announced acquisition of IronPlanet. While these costs certainly created some noise in the quarter and negatively impacted our reported results, overall, we are still really pleased with how our underlying business performed during the quarter. And our hope today is to provide you with some clarity on how the business performed on a truly comparative basis, absent the impairment and acquisition-related costs. We'll start off today's call by reviewing our reported U.S. GAAP results. Gross auction proceeds for the third quarter were $999 million, up 12% relative to the same period last year. Revenue was $129 million, an increase of 18% and SG&A expenses were $69 million, a 19% increase. In addition, $4.7 million of acquisition-related costs were booked during the quarter, primarily due to due diligence, legal and other activities related to our impending acquisition of IronPlanet, but a small portion also was attributable to activities taken for the acquisition of Petrowsky Auctioneers, which closed during the quarter. Including the impact of a $28.2 million non-cash impairment charge taken in connection with our EquipmentOne business and the acquisition-related costs, operating income for the third quarter was $2.3 million, a 92% decrease from the same quarter last year, which resulted in operating income margin of 1.8%. After taxes, our business generated a net loss per share of $0.05. While we clearly are not happy about the U.S. GAAP results we reported for the quarter, an impairment charge was necessary given the recent performance of EquipmentOne relative to our growth targets. We…

Thank you, Ravi, and good morning, everyone. As you know, there was some noise in the third quarter that affected our reported third quarter results. I'd like to highlight what our reported U.S. GAAP, our adjusted and our comparable results were, so you can evaluate our performance more effectively. As you're aware, our reported U.S. GAAP performance of $2.3 million of operating income includes the impact of both the non-cash impairment charges for EquipmentOne and acquisition-related costs primarily associated with our announced acquisition of IronPlanet. The adjusted operating income of $30.5 million we reported in our earnings release yesterday and showed on slide 19 exclude the impact of the EOne impairment but still include the impact of acquisition-related costs. As these acquisition costs are expected to continue into the future, they do not qualify as adjustable items. Although our reported and adjusted results provide the appropriate accounting and regulatory treatment, we have provided some additional comparable information to help give you a better indication of the health and performance of our underlying business. First, we have added acquisition-related costs as a separate line on the face of the financial statements. And second, we are presenting comparable results on our call today, which exclude these non-standard expense items. The reconciliation table provided on slide 19 shows the calculation of comparable performance relative to our U.S. GAAP and adjusted figures. Due to the non-deductible tax nature of both the impairment and acquisition costs, our effective tax rate is only meaningful on an adjusted and a comparable basis. On slide 20 of our presentation, I've outlined operating income, operating income margin, EBITDA and diluted EPS for U.S. GAAP adjusted and comparable performance. For the remainder of my discussion today, I'll focus on comparable results. Relative to the third quarter last year, our comparable…

Thank you, Sharon. I'm very proud of Sharon for her leadership on the financing effort and the oversubscription just shows the strength of the Ritchie Bros. model. So, let me turn to our year-to-date reported results. Our year-to-date reported results are impacted by the impairment loss we booked in the quarter. However, our operating performance, absent noise from impairment charges and acquisition costs, are still quite robust and a better indication of the strength of our underlying business. GAP has grown 6%, revenue has grown 10%, but our reported operating income declined 24%. On an adjusted basis, operating income in the first nine months of 2016 declined 1%, but grew 3% on a comparable basis. While reported diluted EPS is down 24% relative to the first nine months last year, on an adjusted basis, it was up 1%, and on a comparable basis, it was up 7%. Our business also remains a great cash generator that Sharon alluded to with $163.4 million in net cash from operating activities, up 3% from the first nine months of 2015. We're confident that the investments we've made to enhance the strength of our executive team, our platform and IT systems over the past year will provide a solid foundation for the future integration of IronPlanet. These were strategic investments to elevate the capabilities and scalability of our business, even though they have grown our cost base so far this year. As you likely saw earlier this week, we disclosed our October GAP. As many of you expected, auction timing differences relative to last year's auction schedule were responsible for the same year-over-year differences. Both the Columbus and Montreal auctions that occurred in September this year occurred in October last year and our upcoming Orlando auction in November was also held in October last…

Your first question comes from the line of Sara O'Brien from RBC. Your line is open.

Hi. Good morning.

Hi, Sara.

You commented that the revenue rate was sort of the highest historically. And just wondering, as we look forward post-IronPlanet, what's the opportunity to improve that, both given the underwritten business performing better now, but maybe also with the Cat strategic deal involved, just wondering if the expectation in targets could go up from that level?

Sara, at this point, look, I think we need to let's first get the close of IP. We've talked about they also have comparable revenue rates. So, at this point, though, the whole purpose of this acquisition is not about trying to raise prices or margin expansion. It's really about providing unprecedented choice to our customers. And to me, the more we satisfy our customers, the more we can drive volume and really have an integrated business. And the beauty of this is really the ability to go past just sort of an auction or marketplace borders to really go and get to the $360 billion. That has been our real goal. And I think having options for customers where we're going to provide solutions based on their needs an all-in-one house as a one-stop shop, I think that is the beauty of this acquisition.

Okay. Great. And then just a quick one on the flow of goods U.S.-Canada and U.S. International, just wondering post the election results in the U.S., how much of your business would you expect could be impacted by flows diminishing or changing under new trade agreements?

Sara, this is Randy Wall. It's very early days, so it's difficult to have any certainty there. And I can tell you that the largest impacter, however, in international flow of goods tends to be currencies. And there's a lot of arbitrage that is performed globally. And depending upon how things fare for global currencies and the posture of the U.S. towards international trade, they will affect some of those things but very early days to affect that. And I can tell you, at least from a Canadian perspective, it's very, very small despite perceptions of a lot of the equipment flowing from the North to the South is actually is in the single-digits and has been fairly stable over the last 24 months.

Yeah. I think, Sara, just to build on what Randy said, most of our auctions, 90% or so of the GAP in our Canadian auctions remain in Canada. And if you look at Alberta auctions, 50% stays within Alberta. So, I think that is – I doubt that that, at this point anyway, it's really difficult to predict what is going to happen with NAFTA and so on, but we think that it's unlikely to have a huge impact.

Okay. And most of the U.S. buyers buy U.S. equipment. They're not buying from international regions typically?

The U.S, I think, again, it's been most – because of also consideration of Tier 4 and a lot of those, I think pretty much is the same. You don't see a lot of – you'd see some international, but the currencies – I think Randy was absolutely right. The currency plays a big impact. And given – that's why we have auction sites in these major markets, so that it's really – these are driving domestic businesses, the international is an important one. But where it gets affected is more places like Mexico and some of these markets. But, clearly, U.S. and Canada are domestic drivers. Randy, you want to add something?

I just want to underline what you said, Ravi, and that was the Tier 4. It is engine emission requirements and regulations that differ globally that really create the ability for goods or – goods to either be able to flow internationally or not. And that I don't expect will be changed under any trade regulation.

And, Randy, I think even within U.S. and Canada, some of the specifications and models are quite different U.S. versus Canada on certain things, certain equipment.

They are. That's correct.

Okay. Maybe just to – because of IronPlanet coming in, is there any significant international flow through IronPlanet?

Look, IronPlanet, just like us, is a global brand, and they have a lot of reach, which we like about their model, and they get buyers and bidders from several countries. And that in combination with our brand only extends our reach. What we like about their model is that you don't have to move the equipment, and that plays into a great strength because there are many places like Africa and so on that right now our models, at least the RBA auctions is about moving equipment to our yard. So, this will extend our reach. And then the Cat alliance certainly is a very big positive because with the Cat alliance, we'll be able to go internationally and do auctions on their yards, but also just have those relationships and it extends our reach. So, I think all of those are really positive.

Okay. I'll circle back. Thanks.

Your next question comes from the line of Craig Kennison from Baird. Your line is open. Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker): Yeah. Good morning. Thanks for taking my question here. I wanted to focus on IronPlanet. You've had some time to consider what your top priorities should be, knowing that you've looked at all of the opportunities, there're just a ton of great projects. But what are your top two or three priorities that you think you'll focus on in the next few months as you prepare for a close? Thank you.

Thanks, Craig. Well, clearly, I think we've got our integration planning underway. We are very pleased to reiterate that we've been able to secure all the key executives from IronPlanet. But through these planning sessions, we have work streams for each important area, so whether it's technology, whether it's sales, HR, et cetera. And so we're getting to know more of their people, their people more to us. It's really creating good bonding. Of course, it's a very interesting one. You have to compartmentalize because you meet in the conference room and we plan for the future, but then you have to go back and compete. And I just had a nice call this morning with Darrin, one of their key sales leaders, and he teased me and said, I'm working on a deal to take away from you. And that's the beauty of this. But clearly for us, the key priorities – to answer your question – sales integration is pivotal. We see that as our number one priority because it realizes the vision if we get that right. It realizes the vision of providing unprecedented choice to customers. This is all about customers. This is a very pro customer, customer-friendly acquisition and really we have to think about how soon can we get customer their benefits. And so, that sort of puts some very heavy weight intellectual power behind this from both sides. And we've also engaged a topnotch external firm to help us with some expertise in integration planning for sales, but also for our overall integration. So, the sales piece is definitely very important. The technology piece is very important because that really – again, what we love about the IP model is they're customer-facing, but we have a lot of things, including EOne, where we've…

Your next question comes from the line of Joe Box from KeyBanc. Your line is open.

Hey, good morning, everybody.

Hi, Joe.

So, ex the acquisition costs, looked like a pretty nice job on SG&A control in the face of that 8% head count increase and the $3 million from share payments. Last quarter, you talked about taking a couple of quarters to get SG&A under control. As we're maybe looking at a more normalized revenue growth rate in 4Q, should we start to think about maybe getting some solid SG&A leverage on a year-over-year basis, or is it still too soon given the head count increase and the stock price?

I'll take that. It's Sharon, Joe. So, I think you will see a little bit more leverage in Q4 simply because we did take a sizable true-up in our bonus accruals in 2015 in Q4, so you'll get that natural benefit. We still do have some costs that we're cycling over. So, we did call out the two executives that came into the business in Q1. I probably would say we won't see more – we'll still see kind of elevated SG&A growth until we lap that in Q1 or Q2 of next year.

I'll just add something there, Joe, to what Sharon said, which is a reminder on the Edmonton property sale, which was an offset, so keep that in mind. But also I think, look, the SG&A, we were not talking about crashing and burning and because we made very deliberate SG&A investments for the future of the company, they're beginning to pay off. I think you'll see more of the effect because I think most of the major hires are in place now. And we've got a solid executive team and this is even without the IP side. I'm just talking about RB. So, I think it was more about – it was just a little bit of a – but as we have dug into it, a lot of things have influenced things, like the mark-to-market, et cetera. But I think I'd look at more next year to really completely agree with Sharon.

Thank you.

Your next question comes from the line of Ben Cherniavsky from Raymond James. Your line is open.

Good morning, guys.

Hi, Ben.

Good morning, Ben.

I would just like to ask a little more about EquipmentOne. First of all, if I read this right, maybe I misunderstood it, but sounds like there was a 39% increase in the gross transaction value, but only a 5% increase in the revenues in the quarter...

Yeah. I think Jim Barr can explain that a little bit, Ben, and some of the things we are doing on it to bring some clarity.

Yeah. The difference there, Ben, and thanks for the question, is related to a new product. There's a lot of progress despite not reaching our goal of revenue growth objectives. There's a lot of good work going on in EquipmentOne. One of those things we call ESS, which is Enterprise Software Solutions, which is a SaaS model where we help customers manage their overall portfolio. And in that model, with dealers in particular and OEM and dealer networks in particular, we help them keep track of all their assets and move their assets. And part of that is a new stream of revenue we've not had before, which is dealer-to-dealer, which helps us penetrate further into the $360 billion market because we weren't touching that before. But essentially, we help facilitate for a much lower revenue rate the transfer of equipment from one dealer of that OEM network to the other. And that's going to be a continuing trend. And I'm very happy we have that product because as you get to see the full portfolio of what our customers have, you can really begin to become what we call a trusted advisor to help them know when to sell, which channels to sell, those types of things. But that GAP grows quite a bit relative to the revenue rate on that model. And as we mix into that, it's all good because it's a new revenue stream, but it does in the short-term affect some of the comparability of the revenue rates.

So, Ben, let me just add a little bit to what Jim said, which is, this is really part of our strategy. Historically, Ritchie Bros. was primarily focused on end users and God bless us, we do that amazingly well. As you know, we have, in the past, talked about how our business is 85% end-users and 15% dealers. But one of the things that if you really want to go beyond sort of the what is thought of to get out of the last resort business to really be first choice and go to the full extent of getting to the $360 billion, a very vital element of our strategy has to be building relationships with OEMs and dealers. And so, versus the transaction basis because when you just do underwritten pieces with dealers, that puts a pressure on margins versus how do you get to a more strategic relationship with dealers where they start looking at you in a different light. Because historically we've sort of viewed dealers as competitors, they've viewed us as competitors, so there's a tension. So, we made a proactive effort to say, how do we go after this business, how do we create this as a key strategy? That resulted, for instance, in the purchase of Mascus. Why? Because 99% of customers on Mascus are dealers who are advertising there. Second, we created this whole ESS thing that Jim just talked about. Interestingly, IronPlanet has a similar product called Asset Management Portal. So, when we bring ourselves together, that will be quite powerful. But this one, when you do it, one of the things that OEMs want is dealer-to-dealer business when they can't sell it directly. We're now enabling this. Now, we do it at a fairly very low margin, but this helps – this is a long-term thing that enables us to really build sticky relationships that will flow into hopefully more transaction stuff over time, but it gets us into their DNA. So, therefore, what you see is a big boost on the GMV, but you don't see the corresponding revenue hence the different relationship.

And it does – one other thing I'll add is – and I think Ravi was alluding to it is if it doesn't go dealer-to-dealer, the next priority is it sells on EquipmentOne or in our core auction with the check of a box. And so, we're there where those decisions of asset disposition can be made if it – and we're in a multiple revenue flows.

Okay. That's helpful. I guess, Ravi, since you brought it up, I wonder if you could elaborate a little more – I think we talked about this on the IronPlanet acquisition on the call when you announced that. But I'm still – I think it'd still be helpful to get a little more clarity on, at least from what you can say, the joint venture with Caterpillar as part of that acquisition, how that plays into, as you said, you're strategical of getting closer to the manufacturers? Because on the surface, what it looks like to me is that they're getting pretty good deal from you guys or a very valuable service by cooperating with the digitalization of their fleet. But there is not, as far as I can see, any sort of firm commitment that they will – to see exactly what you guys get out of it. There's no commercial arrangement from what I understand about how much equipment they will guarantee to give you. It almost sounds like a gentlemen's agreement where they say, well, we'll send you some equipment if you do for this for us. And I just wonder what you can speak to about how that enhances that relationship, what kind of visibility you've got on that beyond maybe just getting back to business that they took from you in the first place through the creation of IronPlanet? Like, how incremental, how offensive is this versus a defensive move?

So, that's great. Clearly, we are both gentlemen, but we are gentlemen and we are both commercial. So, it's a very mutually rewarding relationship. There is clearly commercial arrangements on if we provide them data feeds on who bought Caterpillar equipment that this reciprocity in terms of equipment being consigned. We've just not disclosed the specifics because of some confidentiality agreements right now in place. That doesn't mean they're not there. We've just not disclosed it. So I would not look at that as sort of a wish and a prayer and hope that people will be gentlemen. We have enormous respect for Caterpillar and we're just very thrilled. I was just invited to speak at the Caterpillar Used Equipment Managers Conference along with Greg and we got a very, very positive response. We cannot wait for the closing of this transaction because once it really comes to play – now clearly as I have, I'll continue to reiterate, we're going to continue to, because one of the UMs at Caterpillar asked me about, hey, will we have strategic relationships with others? The relationship with Cat is very special, clearly, but we are going to continue to look at relationships with other OEMs as well down the road. Let's get this one done first and done right. But, no, this is going to be very – this is a huge long-term incremental benefit. We absolutely do not look at it as a defensive move. We just have not chosen for mutual reasons to not give specifics of that at this stage. And at this stage, we are not going to. It doesn't mean that at some point, we will not.

Okay. That's helpful.

Once the transaction closes, we may actually do that.

Okay. That's good to know. Can you say anything about how you would expect to, like, where the equipment would come from? Does some of this come from Cat Financial or the rental fleet or direct from the dealers, like, what – can you elaborate a little bit on...?

All of the above.

All of the above. Okay. That's helpful. Thanks.

And international as well.

Great.

Your next question comes from the line of Cherilyn Radbourne from TD Securities. Your line is open.

Thanks very much and good morning. I'm going to ask a question on EquipmentOne as well. Just curious how you communicated the impairment internally to make sure that you didn't lose the level of sales force engagement on that product offering?

Jim?

Yeah. Absolutely, a great concern for us because we have to separate what turns out to be an accounting decision. And that's what we said is, guys, this is an accounting decision based on where we are and this in no way impacts our view of the future. We're reiterating our commitment to our multi-channel strategy, which has had great progress over the last year to 18 months with our acquisitions and our reinvestments in EquipmentOne after an early stage really not integrating it very well. So, we're saying that we're absolutely committed to it and we are. We're not just saying that. We need people to focus on this. There's been a lot of good progress. We've had some headwinds in transportation pricing and energy pricing, like the rest of our business at times. And at this stage, we haven't overcome those headwinds. And so the growth hasn't been where we want it. But going forward, as we look, there has never been stronger engagement with the sales force. There has never been more – there has never been better bidding activity. As Ravi mentioned, we now have enabled the TMs just in the last few weeks to use the same tool that use to sell auctions, our core auction business to also sell EOne. So, we're focusing on the progress. We're focusing on the future. And we're saying to put this accounting issue that in many cases preceded many of the people on the team to rest. And you can only look forward. And our commitment going forward, whether or not we do IronPlanet, this is a very, very important part of our strategy and we'll stress that again at our town hall today.

Great. Thank you.

I'll just add one thing to that which is, look, it's a little bit – the unfortunate thing here is timing is everything and we need to do – being a very high integrity company, we're going to do the right things from an accounting standpoint. It's just this business was acquired four years ago. I've been very candid that the first two years, there was complete organ rejection and we kind of really made the brand go backwards. And after I got in and Jim got in, we really – it took us almost a year of creating paradigm shifts, getting people to believe in a multi-channel strategy. And finally, I think organ rejection became a thing of the past. And our strategic accounts team was already using it, but we got it to the other TMs. We also launched it in Canada. But as the people started using it, we started realizing that we had a completely different sales process for our regular Ritchie Bros. auctions versus for EquipmentOne. That created lots of issues. They're also not used to that process, and so there's a lot of – it was really sort of this year has been really the first year of real usage of EquipmentOne. So, it is ironic when the brand is best poised to take off, we had to do it, but that's the right thing to do. But it has nothing to do with the trajectory. Right now, just since we made the change, one of our executives, Frank Roth, has done a marvelous job working with IT to get now the same process using salesforce.com. And just since that, what we've seen in November is a surge of listings from our TMs. And we listed I think in the prepared remarks a lot of the things we're doing. Clearly, we have to make some tough decisions of holding off on the expansion to Europe, but we are ready to go. So, that's what resulted in the decision, but we have a town hall right after this and Jim and I and Sharon are very much planning to rev up the troops of our EquipmentOne. So, trust me on this. Ravi Saligram and Jim Barr will be at their evangelical best.

There's some pressure. The one thing I will add, though, is as we go forward, assuming we close the IronPlanet transaction, I believe this, I'll call it training wheels on multi-channel selling for our entire organization will put us in a much better spot than we've ever been to be able to do this because that is the dream on the other side of this transaction is that we sell multiple channels, we do solution selling effectively and we've really learned a lot through this process. We don't have it down perfectly, but we've learned a lot that we'll carry through to IronPlanet.

One thing there, Jim, to add is EquipmentOne is analogous to the Daily Marketplace on IronPlanet and recognize, IronPlanet has been doing this for 15 years and have got very good at it. The EquipmentOne size is not too distant from the IP one and in a combination, there will be great scale of the Daily Marketplace and EquipmentOne and we will have to figure out how best to integrate those and how we go forward. But it all says that there is – EquipmentOne and the Daily Marketplace in a combination will do even better than where they are today. And today, we do not have a weekly auction unreserved format, which is the strength of IronPlanet. So, we're on this journey and hence why the IronPlanet acquisition makes so much sense.

Thank you. That's my one question.

Your next question comes from the line of Scott Schneeberger from Oppenheimer. Your line is open. Daniel Hultberg - Oppenheimer & Co., Inc. (Broker): Hi. This is Daniel in for Scott. Thanks for squeezing me in. I'm curious on the sectors, if you can help us think about both from a volume and pricing perspective going forward, what do you expect on a customer sector basis? Thank you.

Sure, Daniel. I think, look, the one that – let's start with our sweet spot construction. I would say construction right now is what we're excited about. And notwithstanding in the U.S. which sort of side of the aisle you are, the one thing that both contenders agreed on was infrastructure. And Donald Trump I think talked about $600 billion to spend on infrastructure. I think that excludes the wall. So, it is very exciting. If he really makes that come true, I think this is going to be amazingly good. So, it all remains to be seen whether that will happen. But even without that, Dodge predicted – Dodge, which is one of the foremost forecasters here in this business of jobs and new projects, saw in 2017 and 2018 continuing good construction performance in the U.S. And on the other side, Prime Minister Trudeau has also talked about infrastructure. In fact, instead of lowering interest rates and going to negative interest rates, his whole strategy has been infrastructure. So now we need to see whether all of these come to play. But I think if they do come to play over the next several years, construction which is, we're proud to be the yellow iron company, is going to be positive. So, that bodes well. But it all depends on whether – words are very easy, action speaks louder. But if it's going to happen, I think that will be good. And last year, the highway bill, the bridges, they were all passed. So, that's also positive. On transportation, right now, the demand side, forgive my vulgarity, is sucking canal water. Hence, the prices have really – because there is so much supply and freight business has come down, so I think it will be a couple of years. So, right now, there's a lot of supply, which is implication for us, we are being very judicious about underwritten contracts, not doing large ones where we get several hundred trucks and then once – if the first one falls, it's a domino effect. So my dear friend Doug Olive is holding a big stick over our teams to say, don't send me 200, 300, 400, 500 packages of trucks. But straight commission business still makes sense and we're being more – we are being smarter about it and using EquipmentOne and so on and so forth. Agriculture, I think, we – maybe Randy can talk. He's more of an expert on that. Daniel Hultberg - Oppenheimer & Co., Inc. (Broker): Thanks, Ravi.

It's more a Canadian business.

Yeah. The agricultural space is quite different, north and south of the border. In Canada, things have been fairly strong. There's lots of challenges with weather and late harvest that are affecting buying behavior. And as I mentioned earlier, currency is a really, really big issue, and it's making the replacement cost of new equipment in Canada very high right now, which is turning lots of buyers to good quality use. So, that's benefiting ourselves at the moment, but there is excess supply and demand issues in the U.S. for that same equipment.

Randy, maybe since you also delve in this, talk for a minute about mining and some of the things they've seen there.

The mining sector is – I mean, it's still at a low point, but we believe it's bottomed out. MINExpo, a couple of months ago in Las Vegas, was very well attended. And some new technological innovations – and what the predictions are is that we'll see some return to demand, but not a lot yet in the new asset purchases companies. What we're seeing is they're starting to turn again to us a little bit more affordable, and that is good quality used equipment. So, we've become active that we have a new fledgling mining division that's pursuing this space with some early success and we are seeing some areas of demand improvement as some of the sector's coal prices are better and gold, of course, is a winner these days. So that's helping to drive some demand as well.

And the mining we are driving primarily through Private Treaty, which makes a – because of the high value of the assets. And, Doug, was there anything on the macro you want to add?

Maybe just the oil and gas sector. We talked a little bit about the Columbus sale. And at that sale, it was nice to see a lot of the people that are thinking long term and that there's some optimism about the pipeline markets coming back 2017, 2018. So, depending on how Mr. Trump handles this, the infrastructure work going North-South or East-West of certain pipelines could drive a lot more business in that both sectors as well.

Okay. One last question, Jamie?

Two quick.

Two quick? Okay.

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

Hi. Good morning.

Hi, Nick.

Back on volumes, how much equipment are you seeing from dealers where leases are being returned? Has that moved higher for you and how has that been impacting your business?

Doug or Randy, one of you should answer it and Terry, he is on the line.

Yeah. We're not seeing significant flows from that in Canada, anyway.

Doug? Anything globally?

No.

Terry, did you have anything to add?

Yeah. No, I would say the same thing. We're not seeing a significant amount of that coming from dealers. We have seen from OEMs that we do work with lease returns but not a significant buying coming from dealers.

Okay.

Okay. That's helpful. And then revenues in Europe were down year-over-year. You called out headwinds. Just any color on trends there and what you expect going forward?

Yeah. One issue to keep in mind there, Nick, is the exchange rate of the British pound. That's one place where there has been, as you know, with the Brexit, there's been a little impact. But also Southern Europe has really – because the economies there, Spain and Italy having a really tough time. So, that's been one of the issues. UK, if you don't look at exchange rate, UK has actually done well. Our teams are doing quite well in the UK. But just the macro headwinds, it's a tough business. And unlike U.S. or Canada, a big part of it is rentals and there's a lot of margin pressure in Europe. So, we're careful about how we go about it and we've got some competitors there who would love for a race to the bottom. So, we tend to be a bit more cautious.

Okay. That's helpful. Thanks for taking my questions.

Your next question comes from the line of Bert Powell from BMO Capital Markets. Your line is open.

Thanks. I just want to quickly go back to EOne, Ravi. Gross transaction values have actually or in terms of those bookings, those have actually grown quite well. It's the revenue that hasn't. So, is it really been the fee formula that you haven't quite been able to crack around EquipmentOne that's causing this? And also I just want to make sure in terms of thinking about the impairment. Is there redundancy that you see with IronPlanet that causes you to kind of say, well, these things are going to merge. So, we've got to then look at what we've got on the books for this?

I'll have the second part of your question answered by Sharon. And then we'll go back to Jim for the first.

Yeah. So, Bert, that's a good question. From an accounting standpoint, the impairment is a discussion based on this moment in time. So, the IronPlanet's component really has not been taken into account, albeit certainly we do not have plans that we foresee that we would have any further impairments and hence we did show it in the adjusted category. So, that would say that we don't see future impairments for the next two years. However, we're really looking at the future value of those assets based on how the business exists today and its trajectory as a standalone business without the IronPlanet's acquisition.

In an indirect way, but we have to do the accounting by the book. But in an indirect way, we have, of course, made some decisions like delaying launch into Europe, anticipating the merger and stuff. So, Jim, you want to reiterate what you said earlier?

Sure. And I'll pick up a little bit on what Sharon said. I think actually, as you look forward to an integration, possible integration with IronPlanet, I believe that the book of business in EquipmentOne could actually be more valuable because you have a more online buyer base to leverage as one point, the inspection services are very interesting to apply to the EquipmentOne. The collection of equipment information is always a challenge in an online format and they seem to do that pretty well. So, once we are able to merge, if we're able to merge these together, I think the actual GTV is actually going to be more valuable, which is ironic that we're taking this accounting right now, but I believe that is true. And then I'll just reiterate what I said about ESS. It's really the mix to sort of, I'll call it, asset management business where we don't really market make when we do dealer-to-dealer business. We're providing a software that enables dealers to trade with each other. Therefore, we take a very low piece of the revenue there and that allows us to drive GTV in a very high way, but it doesn't result in revenue. Still, it's plus business and it helps us. So, again, it's a good business to be in.

And clearly, if it doesn't transact dealer-to-dealer, the option is that will go to auction or to EquipmentOne, but these are the positive things for the long term that we're doing. And so...

Yeah. No, I hear you prospectively, but I'm just wondering to-date what hasn't worked that you thought was going to work to get to convert some of that growth into revenue? That's kind of – when you came in, Ravi, this was a big focus for you and the organ rejection and whatnot. So, you've got the sales. I'm just trying to figure out, was there a fee problem structure, just what didn't work the way you thought it would work?

Okay. So, I think I would separate out – I think the – I don't know what the numbers are if you extract out the ESS portion. And I think it's important not to look at as, gee, there was a big – we're not getting the rates. Because if you look at true EquipmentOne revenue with – sorry, GAP or GMV without this ESS, I don't know what the numbers are. I don't know if you know offhand, Jim, but it will be substantially lower than the $35 million or whatever we are talking about. So, that portion is really a flow-through business that we're accounting as GMV. So, it's not the issue that we're having a great structure problem on EquipmentOne. The issue has been more all the things we talked about, the delayed start, the organ rejection. Finally, this year, we're getting people used to it. We had two sales systems and our people just – our TMs couldn't understand it. But they didn't know how to do it because it's so different from auctions. We don't have the inspection service, which is a very vibrant thing when you're – because in RB auctions, you see the product and that's a big part of it, whereas we don't have the inspection system to give assurance. So, I think all of these contributed to it. We also have had to make improvements to the website. I think all of that we are learning and getting that fixed. And last year, our growth was 15.5% on revenue. This year it's fallen off. There's also two specific reasons for that. One was transportation was a very big part of EOne and we have talked about how the pricing has deteriorated quite a bit in transportation. That had a major negative effect. Second, energy was a big part and I think that the oil and gas business having its issues and we lost some expertise with some people that left. So, that had a downward drag. But I think we know what the issues are and are fixing it, which is why we have a more bullish view operationally of EOne. I would just sort of separate that. I know it's tough, but the impairment is the impairment because this was – pro forma is done. We did the acquisition then they were revised, whatever. We had said in the MD&A this year it have to get to 20%, it didn't. So, Sharon did the right thing and said, look, we just need to take the impairment. But it would have been a very different story had we felt the brand was in trouble. We, in fact, think it's now at the place where there's so many nifty things happening. So, it's just one of those confluence of events and we're just being really transparent about it.

Okay. Thank you.

All right. Is that a wrap? Onwards and upwards. Thank you very much, everybody.

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