8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: February 25, 2016

Ritchie Bros. Auctioneers Incorporated
(Exact Name of Registrant as Specified in Its Charter)

Canada	001-13425	N/A
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification)

9500 Glenlyon Parkway, Burnaby, British Columbia, Canada V5J0C6
(Address of principal executive offices) (Zip Code)

(778) 331-5500
(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Item 2.02 Results of Operations and Financial Condition

On February 25, 2016, Ritchie Bros. Auctioneers Incorporated (“we” or the “Company”) issued a press release announcing our financial results for the fiscal year and fourth quarter ended December 31, 2015. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the
“Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01 Regulation FD Disclosure

The information contained in Item 2.02 is incorporated herein by reference.

We transitioned from International Financial Reporting Standards (“IFRS”) to accounting principles generally accepted in the United States (“U.S. GAAP”). We are filing this Current Report on Form 8-K to amend our condensed consolidated interim financial statements for (i) the three months ended March 31, 2015, (i) the three and six months ended June 30, 2015 and (iii) the three and nine months ended September 30, 2015 (collectively, the “2015 Interim Financial Statements”) to reflect the Company’s transition to U.S. GAAP. The original 2015 Interim Financial Statements were filed on Forms 6-K on May 7, 2015, August 6, 2015 and November 5, 2015, respectively, under IFRS.

Except for changes related to the Company’s adoption of U.S. GAAP, this Form 8-K does not reflect events occurring after the filing of each original 2015 Interim Financial Statement. These amended condensed consolidated interim financial statements supersede the Company’s original 2015 Interim Financial Statements.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1, 99.2, 99.3 and 99.4, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	News release, dated February 25, 2016 issued by Ritchie Bros. Auctioneers Incorporated
99.2	Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2015
99.3	Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2015
99.4	Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 25, 2016	Ritchie Bros. Auctioneers Incorporated
	By:	/s/ Darren Watt
		Darren Watt
		General Counsel & Corporate Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	News release, dated February 25, 2016 issued by Ritchie Bros. Auctioneers Incorporated
99.2	Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2015
99.3	Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2015
99.4	Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2015

EX-99.1

Exhibit 99.1

  News Release

Ritchie Bros. reports fourth quarter and annual 2015 results

· Q4 2015 net income attributable to stockholders of $46.5 million, or $0.43 per diluted share

· Q4 2015 Adjusted Net Income attributable to stockholders of $31.4 million, or $0.29 per diluted share¹

· Q4 2015 revenues increased 6% on a constant currency (organic) basis, removing FX translation impact

· Full year 2015 revenue of $515.9 million; 7% increase over 2014 (16% on an organic basis)

· Full year 2015 net income attributable to stockholders of $136.2 million; 50% increase over 2014

· Full year 2015 Adjusted^[2] Net Income attributable to stockholders of $121.1 million; 21% increase over 2014¹

· Acquired Mascus in February 2016 – a leading global used equipment listing company

· Q4 2015, fiscal 2015 and all future periods reported in accordance with US GAAP (IFRS previously)

(All figures are presented in U.S. dollars)

VANCOUVER, February 25, 2016 – Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA, the “Company” or “Ritchie Bros.”) reports results for the three months and year ended December 31, 2015. During the fourth quarter, the Company generated $135.5 million of revenues, a 2% decrease compared to revenues of $138.5 million in the fourth quarter last year, and net income attributable to stockholders for the fourth quarter of $46.5 million, a 48% increase compared to $31.4 million in the same period last year. Diluted earnings per share (“EPS”) attributable to stockholders were $0.43, a 48% increase compared to $0.29 in the same quarter last year. Included in this quarter’s results were $7.9 million of tax savings generated by tax loss utilization and $8.4 million ($7.3 million after-tax) of revenue related to the sale of property adjacent to Ritchie Bros.’ Edmonton auction site. On an adjusted basis, removing the impact of these items, the Company generated Adjusted Net Income attributable to stockholders of $31.4 million during the fourth quarter, a 12% decrease compared to $35.6 million in the fourth quarter of 2014, and Diluted Adjusted EPS attributable to stockholders of $0.29, a 12% decrease from $0.33 in the same period of last year. 

In the year ended December 31, 2015, the Company generated $515.9 million of revenues, and net income attributable to stockholders of $136.2 million, or $1.27 per diluted share, a 50% increase from net income attributable to stockholders of $91.0 million, or $0.85 per diluted share, in 2014. Adjusted Net Income attributable to stockholders in 2015 was $121.1 million, or $1.13 per diluted share, a 21% increase from Adjusted Net Income attributable to stockholders of $100.3 million, or $0.93 per diluted share, in 2014.

“I’m proud of the strong results achieved by the Ritchie Bros. team in 2015, with revenues up 7%, 16% organic; adjusted operating income up 20%, 28% organic; and diluted adjusted EPS up 22% versus prior year.  We also achieved an adjusted EBITDA margin of 40.4%, up 244 basis points, and return on net assets of 23.8%, up 910 basis points versus 2014. Our operating free cash flow of $182.2 million increased 28% compared to last year, once again demonstrating that Ritchie Bros. is a powerful cash generating engine,” said Ravi Saligram, Chief Executive Officer, Ritchie Bros.  “We’re beginning to make solid progress executing our strategic plan: in the US we grew revenues 15% versus prior year – a key geographic focus, and in Canada we continued to grow rapidly, with 23% revenue growth in local currency.  Our multichannel initiatives also gained traction, as EquipmentOne generated 14% revenue growth versus last year and achieved positive EBITDA during 2015.  Our world class online reach to our global customer base allowed us to drive a record $1.9 billion of online sales during 2015, demonstrating our strong digital prowess.  In addition, we launched Ritchie Bros. Private Treaty, and recently announced the acquisition of Mascus – a global online listing service.  Similarly, our services strategy gained excellent momentum with Ritchie Bros. Financial Services registering significant growth and our recent acquisition of Xcira providing additional fee-based revenue streams. We have a strong executive team in place and passionate employees who are committed to winning, which makes me confident we will continue to capitalize on opportunities in the marketplace in 2016.” 

¹ Adjusted Net Income attributable to stockholders and Adjusted Diluted EPS attributable to stockholders are non-GAAP measures. Refer to “Use of Non-GAAP Measures” below for a description of how the Company defines and uses these measures, and Appendix A for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in the Company’s consolidated financial statements.

² 2015 adjusting items include an $8.4 million ($7.3 million after-tax) gain from the sale of excess property and $7.9 million of tax savings generated by tax loss utilization. 2014 adjusting items include an $8.1 million ($8.1 million after-tax) impairment loss on our property in Japan, $5.5 million ($4.2 million after-tax) of management reorganization costs, and a $3.4 million ($2.9 million after-tax) gain from the sale of excess property.

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Income statement scorecard³

(in U.S. $ millions, except EPS)	Three months ended December 31,									Year ended December 31,
	2015			2014			Better/ (Worse)			2015			2014			Better/ (Worse)
Gross Auction Proceeds ("GAP")	$	1,135.4		$	1,241.2			(9	%)	$	4,247.6		$	4,212.6			1	%
Revenues	$	135.5		$	138.5			(2	%)	$	515.9		$	481.1			7	%
Revenue Rate		11.93	%		11.16	%		77 bps			12.14	%		11.42	%		72 bps
Adjusted Operating Income	$	42.0		$	46.7			(10	%)	$	166.5		$	138.2			20	%
Adjusted Operating Income Margin		31.0	%		33.7	%		(270	bps)		32.3	%		28.7	%		360 bps
Diluted Adjusted EPS attributable to
stockholders	$	0.29		$	0.33			(12	%)	$	1.13		$	0.93			22	%

Balance sheet scorecard³

(in U.S. $ millions)	Year ended December 31,
	2015			2014			Better/ (Worse)
Operating Free Cash Flow ("OFCF")	$	182.2		$	141.8			28	%
Working Capital Intensity		-3.2	%		-2.3	%		90 bps
CAPEX Intensity		2.8	%		6.2	%		340 bps
Return on Invested Capital ("ROIC")		15.1	%		12.0	%		310 bps
Return on Net Assets ("RONA")		25.7	%		14.7	%		1100 bps
RONA excluding current portion of long-term debt		23.8	%		14.7	%		910 bps
Debt/Adjusted EBITDA		0.5	x		0.6	x		0.1	x

In the table above, the acronym EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization.

Income statement scorecard analysis

For the three months ended December 31, 2015

GAP was $1.14 billion for the fourth quarter of 2015, a 9% decrease compared to the fourth quarter of 2014. EquipmentOne, the Company’s online equipment marketplace, contributed $36.1million of gross transaction value (“GTV”)⁴ to GAP in the fourth quarter of 2015 compared to $34.9 million in the fourth quarter of 2014. GAP for the fourth quarter of 2015 would have been $92.2 million higher, resulting in a 1% decrease over the fourth quarter of 2014, if foreign exchange rates had remained consistent with those in 2014. This adverse effect on GAP is primarily due to the declining value of the Canadian dollar and the Euro relative to the U.S. dollar.

3 GAP represent the total proceeds from all items sold at the Company’s auctions and online marketplaces. It is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company’s consolidated financial statements. Revenue Rate is a calculated as revenues divided by GAP. Revenue Rate is calculated by dividing revenues by GAP. Adjusted Operating Income, Adjusted Operating Income Margin, OFCF, Working Capital Intensity, CAPEX Intensity, ROIC, RONA, RONA excluding the current portion of long-term debt, and Debt/Adjusted EBITDA are non-GAAP measures. Refer to “Use of Non-GAAP Measures” below for a description of how the Company defines and uses these measures, and Appendix A for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in the Company’s consolidated financial statements. Diluted Adjusted EPS attributable to stockholders is a non-GAAP measure that is reconciled to the most directly comparable GAAP measures in the Company’s consolidated financial statements under “Selected Consolidated Financial Information” below.

4 GTV represents the total proceeds from all items sold at the Company’s online marketplaces. In addition to the total value of the items sold in online marketplace transactions, GTV includes a buyers’ premium component applicable only to the Company’s online marketplace transactions. It is not a measure of financial performance, liquidity, or revenue, and is not presented in the Company’s consolidated financial statements.

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Revenue declined 2% during the fourth quarter of 2015 to $135.5 million, compared to $138.5 million in the fourth quarter of 2014, primarily due to lower GAP generated in the quarter which was adversely impacted from foreign exchange changes relative to the same period last year. Revenue would have been $11.8 million higher, resulting in a 6% increase over the fourth quarter of 2014, if foreign exchange rates had remained consistent with those in 2014. 

The Revenue Rate was 11.93% in the fourth quarter of 2015, compared to 11.16% in the fourth quarter of 2014. The increase in the Revenue Rate is primarily due to the performance of the Company’s underwritten (guarantee and inventory) commission contracts. As a percent of total GAP, the volume of underwritten commission contracts decreased to 29% during the fourth quarter of 2015 compared to 35% for the same period in 2014.

Adjusted Operating Income declined 10% during the fourth quarter of 2015 to $42.0 million, compared to $46.7 million in the fourth quarter of 2014. This decline was primarily due to the decrease in revenues combined with the effects of the adjusting items, which included an $8.4 million pre-tax gain on sale of excess property adjacent to the Company’s Edmonton auction site in the fourth quarter of 2015, compared to $5.5 million in pre-tax management reorganization costs in the fourth quarter of 2014. Operating income would have been $5.3million higher, resulting in a 35% increase over the fourth quarter of 2014, if foreign exchange rates had remained consistent with those in 2014.

Adjusted Operating Income Margin was 31.0% for the fourth quarter of 2015, 270 basis points lower than 33.7% for the same period last year, primarily due to the decrease in revenues and Adjusted Operating Income noted above.

Diluted Adjusted EPS attributable to stockholders for the fourth quarter of 2015 was $0.28 per diluted share, a 15% decrease compared to the fourth quarter of 2014. Not included in the 2015 fourth quarter adjusted results were $7.9 million of tax savings generated by tax loss utilization and the $7.3 million after-tax gain on sale of excess property noted above. New information that arose during the Company’s tax planning initiatives in the fourth quarter of 2015 allowed the Company to recognize tax losses that had been carried forward from certain historical tax years. The decrease in Diluted Adjusted EPS attributable to stockholders in the fourth quarter of 2015 compared to the same period in 2014 was primarily due to the decrease in GAP and Adjusted Operating Income as discussed above.

Income statement scorecard analysis

For the year ended December 31, 2015

GAP was $4.25 billion for 2015, an annual record and a 1% increase compared to $4.21 billion in 2014. GTV contributed $120.0 million to GAP in 2015 compared to $106.1 million in 2014. GAP would have been $319.4 million higher, resulting in an 8% increase over 2014, if foreign exchange rates had remained consistent with those in 2014. This adverse effect on GAP is primarily due to the declining value of the Canadian dollar and the Euro, relative to the US dollar, which Ritchie Bros. reports in.

Revenue grew 7% during 2015 to an annual record of $515.9 million, compared to $481.1 million in 2014, as a result of the record GAP and higher Revenue Rate achieved during the year. Revenue would have been $40.5 million higher, resulting in a 16% increase over 2014, if foreign exchange rates had remained consistent with those in 2014.

The Revenue Rate was 12.14% in 2015, an increase of 72 basis points compared to 11.42% in 2014. The increase in the Revenue Rate is primarily due to the performance of the Company’s underwritten commission contracts. Underwritten commission contracts represented 29% of GAP during 2015, compared to 31% of GAP in 2014.

Adjusted Operating Income grew 20% during 2015 to $166.5 million, compared to $138.2 million in 2014. This increase is primarily due to revenue growth outpacing the growth of operating expenses after the pre-tax effect of adjusting items are taken into consideration. This demonstrates the leverage inherent in the Company’s business model. While Canadian dollar expenses related to head office selling, general and administrative (“SG&A”) expenses and amortization related to our information systems developed in Canada were positively impacted by foreign exchange translation, a larger proportion of revenues were generated in Canada during 2015 and those revenues were negatively impacted by foreign exchange translation. Operating income would have been $12.1million higher, resulting in a 46% increase over 2014, if foreign exchange rates had remained consistent with those in 2014. 

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Adjusted Operating Income Margin increased 360 basis points to 32.3% in 2015, compared to 28.7% in 2014. This increase was primarily due to revenue growth outpacing the growth of operating expenses after the pre-tax effect of adjusting items are taken into consideration, as noted above.

Diluted Adjusted EPS attributable to stockholders increased 22% to $1.13 per diluted share in 2015, compared to $0.93 in 2014. This increase was primarily driven by increases in GAP, revenue and other income, which outpaced increases in operating expenses after the pre-tax effect of adjusting items are taken into consideration.

Balance sheet scorecard analysis

As at and for the 12 months ended December 31, 2015

OFCF increased 28% to $182.2 million during 2015, compared to $141.8 million in 2014. This increase was a result of greater cash generated by operating activities combined with less net capital spending. Net capital spending decreases were primarily due to fewer property, plant and equipment and intangible asset additions. There was also an 80% increase in proceeds from the disposition of property, plant and equipment, in 2015 compared to 2014, which was due mostly to the sale of excess property in the fourth quarter of 2015. Ritchie Bros. believes OFCF is a strong indicator of cash flows remaining for discretionary return to shareholders, acquisitions and growth initiatives.

Working Capital Intensity was -3.2% for the year ended December 31, 2015, an improvement of 90 basis points from

-2.3% for 2014. This improvement is primarily the result of increased revenues and decreased advances against auction contracts. Significant fluctuations in Working Capital Intensity are primarily the result of the timing and size of auctions just prior to each period end. The fact that the Company’s Working Capital Intensity is negative highlights the minimal amount of working capital required to run the business.

CAPEX Intensity highlights the amount of capital expenditure that is required to generate revenues. CAPEX Intensity decreased 340 basis points to 2.8% in 2015, compared to 6.2% in 2014. This decrease is primarily due to the increase of revenues combined with a decrease in net capital spending.

ROIC increased 310 basis points to 15.1% in 2015, compared to 12.0% in 2014. This increase was primarily due to a decrease in average long-term debt resulting from a lower level of borrowings in 2015 combined with the impact of foreign exchange translation of Canadian dollar denominated debt into reported US dollars. The increase in ROIC was also the result of an increase in net income attributable to stockholders after the effects of the adjusting items are considered, partially offset by an increase in average stockholders’ equity during the year.

RONA for 2015 was 25.7%, an increase of 1100 basis points compared to 14.7% in 2014. This increase was primarily due to an increase in net income attributable to stockholders combined with a decrease in cash and cash equivalents and an increase in current liabilities, as well as foreign exchange effects on non-U.S. dollar denominated assets. The increase in current liabilities is primarily due to the CA$60 million long-term debt that became current in the second quarter of 2015. Management intends to refinance this term loan when it falls due in May 2016.

The addition of a current portion of long-term debt to current liabilities in 2015 had a positive effect on RONA. Excluding the current portion of long-term debt, RONA for 2015 would have been 23.8%, an increase of 910 basis points compared to RONA for 2014.

Debt/Adjusted EBITDA, which is an indicator of our leverage, decreased to 0.5x in 2015, compared to 0.6x in 2014. This improvement is primarily the result of an increase in Adjusted Operating Income and combined with a decrease in depreciation and amortization expenses, as well as a 7% decrease in debt.

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Dividend Information 

Quarterly dividend

On January 25, 2016 the Company declared a quarterly dividend of $0.16 per common share payable on March 4, 2016 to shareholders of record on February 12, 2016.

Operational Review

Online statistics

During 2015, the Company attracted record online bidder registrations and sold approximately $1.9 billion of equipment, trucks and other assets to online auction bidders and EquipmentOne customers. This represents an 8% increase compared to the $1.8 billion of assets sold online during 2014.

Auction activity

During the fourth quarter of 2015, Ritchie Bros. conducted 67 unreserved industrial auctions in 14 countries throughout North America, Central America, Europe, the Middle East, Australia, and Asia. Auctions during the quarter included: 

· At the December 16, 2015 St. Louis, Missouri auction, the Company achieved new auction site GAP and lot records, selling more than 1,650 lots for US$31+ million.

· At the December 7 – 8, 2015 Toronto, Ontario auction, Ritchie Bros. sold more than CA$32 million (US$24 million) of assets for equipment consignors – a new local currency site record.

· At the December 10 – 12, 2015 Edmonton, Alberta auction, the Company sold over CA$98 million (US$71 million) worth of assets, making it Ritchie Bros.’ largest ever December auction in Canada.

· At the December 2 – 3, 2015 Fort Worth, Texas auction, Ritchie Bros. sold more than US$43 million worth of assets for equipment consignors.

· At the November 18 – 19, 2015 Meppen, Germany auction, Ritchie Bros. sold nearly €15 million (US$16 million) of assets for equipment consignors – a new local currency site record.

· At the November 11 – 12, 2015 Houston, Texas auction, the Company sold more than US$50 million worth of assets for equipment consignors.

· At the October 27 – 29, 2015 Edmonton, Alberta auction, Ritchie Bros. sold more than CA$137 million (US$104 million) worth of assets, making it the Company’s largest ever October auction.

There are currently 141 unreserved auctions on the Ritchie Bros. auction calendar at www.rbauction.com, including auctions in North America, Central America, Europe, the Middle East, Australia and Asia.

EquipmentOne activity

During the fourth quarter of 2015, EquipmentOne sold more than $36.1million of equipment and other assets on behalf of customers. The Company also saw an 11% increase in the number of average monthly users of the website www.equipmentone.com as of December 31, 2015 compared to December 31, 2014.

Corporate Developments

Acquisition of Mascus International Holding B.V.

On February 19, 2016, the Company acquired 100% of the equity interests in Mascus International Holding B.V. (“Mascus”), a leading global equipment sales listing service, for a provisional purchase price of €24.0 million ($26.6 million) subject to working capital adjustments under the terms of the agreement.  The acquisition expands the breadth of sales solutions Ritchie Bros. provides equipment sellers, and provides Ritchie Bros. with a turn-key asset management software solution to offer customers.

Mascus is a leading online listing service for used heavy machinery and trucks, with a strong market presence in Europe. Through Mascus’ listing service, subscriptions are offered to equipment dealers, brokers, exporters and equipment manufacturers to list equipment available for sale.

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Mascus provides services to many of the world’s leading equipment dealerships, operates in 58 countries and 42 languages, and has 36 offices globally. Mascus’ websites attract more than 3.2 million monthly visitors, and generate nearly 24 million monthly page views. Nearly 329,000 items are currently advertised on Mascus’ websites, catering specifically to the construction, transport, agriculture, material handling, forestry and grounds-care industries. Based in Amsterdam, Mascus will continue to operate under its current branding and existing management team. No operational changes are anticipated.

The transaction is viewed as strategically important as it expands the sales solutions offered by Ritchie Bros. and provides the Company with another customer touchpoint in the used equipment sales cycle. Additional cash compensation, totaling no more than €3.4 million ($3.8 million), may be provided to Mascus’ management team, which is contingent upon certain operating performance targets being achieved over the next three years. Ritchie Bros. does not expect this acquisition will have a material impact on its 2016 results. The transaction is expected to initially be marginally accretive to net income.

Acquisition of a 75% stake in Xcira

As previously announced, on November 4, 2015 Ritchie Bros. acquired a 75% stake in Xcira. Contributions from Xcira since the acquisition are included in Ritchie Bros.’ fourth quarter results on a fully consolidated basis, with the portion attributable to the 25% minority stake included within the non-controlling interests line of the Company’s consolidated income statement.

Expansion of EquipmentOne into Canada

In February 2016, Ritchie Bros.’ EquipmentOne’s sales solution was expanded to offer Canadian equipment customers with Canadian dollar pricing and transaction details. It is another way EquipmentOne is making it easy for customers to transact equipment, and access an international equipment market. Ritchie Bros.’ Canadian based sales team will begin selling EquipmentOne solutions to customers, alongside Ritchie Bros. unreserved auctions, once training concludes during the first half of 2016.

Sale of excess property in Edmonton

During the fourth quarter of 2015, Ritchie Bros. sold 50 acres of excess, undeveloped land that was adjacent to its auction site in Edmonton, Alberta. CA$11.5 million in pre-tax proceeds (CA$10.0 million after tax) was generated by this land sale, which was treated as an adjusting item in the Company’s fourth quarter and fiscal 2015 results.

Share repurchase program

Ritchie Bros. has made an application with the Toronto Stock Exchange (“TSX”) to renew its Normal Course Issuer Bid upon expiry of its existing Normal Course Issuer Bid on March 2, 2016, which renewal will, subject to TSX acceptance, provide the Company with the ability to continue pursuing share repurchases through both the New York Stock Exchange (“NYSE”) and the TSX. Ritchie Bros. intends to continue using its share repurchase program to primarily neutralize dilution from options. Full details of the new Normal Course Issuer Bid will be announced upon TSX acceptance.

Transition to US GAAP reporting

As noted in prior quarters, Ritchie Bros. began reporting its results in accordance with US GAAP effective for the fourth quarter and fiscal 2015 results. This transition is a result of the fact that the Company now meets the definition of a Domestic Filer by the United States Securities and Exchange Commission (“SEC”). As a Domestic Filer, the Company prepares consolidated financial statements in accordance with US GAAP, reports with the SEC on domestic forms, and complies with SEC rules and regulations applicable to domestic issuers.

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As a non-U.S. company listed on the NYSE, Ritchie Bros. had previously met the definition of a Foreign Private Issuer (“FPI”), and reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs.

All prior reporting periods have been converted to US GAAP, with the first, second, and third quarter 2015 unaudited condensed consolidated interim financial statements re-filed in accordance with US GAAP.

Q4 2015 Earnings Conference Call

Ritchie Bros. is hosting a conference call to discuss its financial results for the quarter ended December 31, 2015, at 8:00 am Pacific time / 11:00 am Eastern time / 4:00 pm GMT on February 26, 2016. A replay will be available shortly after the call.

Conference call and webcast details are available at the following link:

https://investor.ritchiebros.com

Use of Non-GAAP Measures

The Company makes reference to various non-GAAP performance measures throughout this news release, which are discussed in detail below. These measures do not have a standardized meaning, and are therefore unlikely to be comparable to similar measures presented by other companies. Refer to Appendix A of this news release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures reflected in the Company’s consolidated financial statements.

Adjusted Operating Income and Adjusted Operating Income Margin

The Company believes that comparing Adjusted Operating Income for different financial periods provides useful information about the growth or decline of net income for the relevant financial period, and eliminates the financial impact of items the Company does not consider to be part of normal operating results. The Company believes that comparing Adjusted Operating Income Margin for different financial periods is the best indicator of how efficiently the Company translates revenue into pre-tax income.

The Company calculates Adjusted Operating Income as operating income excluding the pre-tax effects of significant items that it does not consider to be part of normal operating results such as management reorganization costs, severance, gains/losses on sale of certain property, plant and equipment, impairment losses, and certain other items, which the Company refers to as ‘adjusting items’. The Company calculates Adjusted Operating Income Margin as Adjusted Operating Income divided by revenues.

Adjusted Net Income attributable to stockholders and Diluted Adjusted EPS attributable to stockholders

The Company believes that comparing Adjusted Net Income attributable to stockholders and Diluted Adjusted EPS attributable to stockholders for different financial periods provides useful information about the growth or decline of the Company’s net income for the relevant financial period, and eliminates the financial impact of items the Company does not consider to be part of its normal operating results.

Adjusted Net Income attributable to stockholders represents net income attributable to stockholders excluding the after-tax effects of adjusting items. The Company calculates Diluted Adjusted EPS attributable to stockholders by dividing Adjusted Net Income attributable to stockholders by the weighted average number of diluted shares outstanding.

OFCF

Due to the seasonality of the business, the Company believes that comparing OFCF on a 12-month rolling basis for different financial periods provides an effective measure of the cash generated by the Company’s business and provides useful information regarding cash flows remaining for discretionary return to shareholders, mergers and acquisitions, or debt reduction. The Company calculates OFCF by subtracting net capital spending from cash provided by operating activities.

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Working Capital Intensity

The Company believes that comparing Working Capital Intensity on a 12-month rolling basis for different financial periods is the best indicator of how efficiently the Company converts revenue into cash. The lower the percentage, the faster revenues are converted into cash. The Company calculates Working Capital Intensity as trade and other receivables, plus inventory and advances against auction contracts, less auction proceeds payable and trade payables, divided by revenues.

CAPEX Intensity

The Company believes that comparing CAPEX Intensity on a 12-month rolling basis for different financial periods provides useful information as to the amount of capital expenditure that is required by the Company to generate revenues. CAPEX Intensity presents net capital spending as a percentage of revenue.

ROIC and RONA

The Company believes that comparing ROIC and RONA on 12-month rolling bases for different financial periods are the best indicators of the after-tax returns generated by the Company’s investments and the Company’s net assets employed by the business, respectively.

As noted above, Adjusted Net Income attributable to stockholders represents net income attributable to stockholders excluding the pre-tax effects of adjusting items. Average Invested Capital is calculated as the average long-term debt (including current and non-current portions) and stockholders’ equity over the rolling 12-month period. The Company calculates ROIC as Adjusted Net Income attributable to stockholders divided by Average Invested Capital.

The Company calculates RONA by dividing net income attributable to stockholders, excluding net after-tax interest expenses, by total assets, excluding cash and cash equivalents, restricted cash, and current liabilities.

Debt/Adjusted EBITDA

The Company believes that comparing Debt/Adjusted EBIDTA on a 12-month rolling basis for different financial periods is the best indicator of the Company’s leverage. The Company calculates Debt/Adjusted EBITDA by dividing debt by operating income excluding depreciation and amortization expenses and the effects of pre-tax adjusting items.

About Ritchie Bros.

Established in 1958, Ritchie Bros. is the world’s largest seller of used equipment for the construction, transportation, agricultural, material handling, energy, mining, forestry, marine, real estate and other industries. Ritchie Bros.^™ solutions make it easy for the world’s builders to buy and sell equipment with confidence, including through the core business of unreserved public auctions and a secure online equipment marketplace. Ritchie Bros. Auctioneers® unreserved auctions are conducted live, with bidding on-site and online at www.rbauction.com. Ritchie Bros. Auctioneers conducts hundreds of unreserved public auctions each year, selling more equipment to on-site and online bidders than any other auction business in the world. The Ritchie Bros. EquipmentOne^™ online marketplace can be accessed at www.EquipmentOne.com.

Ritchie Bros. also offers a range of value-added services, including equipment financing available through Ritchie Bros. Financial Services (www.rbauctionfinance.com). Ritchie Bros. has operations in over 15 countries, including 44 auction sites worldwide. Learn more at www.RitchieBros.com.

Forward-looking Statements

This news release contains forward-looking statements and forward-looking information within the meaning of applicable U.S. and Canadian securities legislation (collectively, “forward-looking statements”), including, in particular, statements regarding future financial and operational results, including growth prospects and potential; new product offerings; ability to generate cash; shareholder returns; refinancing of borrowings; the impact of acquisitions; share repurchases; and payment of dividends. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as “expect”, “plan, “anticipate”, “project”, “target”, “potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend” or “believe” and similar expressions or their negative connotations, or statements that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur.  All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made.  Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond the Company’s control, including the numerous factors that influence the supply of and demand for used equipment; fluctuations in the market conditions and values of used equipment; seasonal and periodic variations in operating results; actions of competitors; the market acceptance of the Company’s initiatives including Ritchie Bros. EquipmentOne; economic and other conditions in local, regional and global markets; market reaction to oil and gas industry changes; and the risks and uncertainties set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, available on the SEC, SEDAR, and Company websites. The foregoing list is not exhaustive of the factors that may affect the Company’s forward-looking statements.  There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements are made as of the date of this news release and the Company does not undertake any obligation to update the information contained herein unless required by applicable securities legislation.  For the reasons set forth above, you should not place undue reliance on forward-looking statements.

Ritchie Bros. 8

Selected Consolidated Financial Information

Consolidated Income Statements

(Expressed in thousands of United States dollars, except share and per share amounts)

Three months ended December 31,	2015			2014
Gross auction proceeds	$	1,135,397		$	1,241,184
Revenues	$	135,462		$	138,457
Direct expenses excluding depreciation and amortization		15,345			17,518
		120,117			120,939
Selling, general and administrative expenses		67,825			68,179
Depreciation and amortization expenses		10,630			11,554
Gain on disposition of property, plant and equipment		(8,491	)		(79	)
Foreign exchange loss (gain)		(271	)		115
Operating income	$	50,424		$	41,170
Other income (expense):
Interest income		585			574
interest expense		(1,146	)		(1,235	)
Equity income		147			135
Other, net		612			1,793
		198			1,267
Income before income taxes	$	50,622		$	42,437
Income tax expense		3,250			10,488
Net income	$	47,372		$	31,949
Net income attributable to:
Stockholders		46,529			31,417
Non-controlling interests		843			532
	$	47,372		$	31,949
EPS attributable to stockholders:
Basic	$	0.43		$	0.29
Diluted	$	0.43		$	0.29
Weighted average number of share outstanding:
Basic		107,176,813			107,457,122
Diluted		107,428,709			107,876,180
Net income attributable to stockholders	$	46,529		$	31,417
After-tax adjusting items:
Management reorganization (1)		-			4,212
Gain on sale of excess property (2)		(7,294	)		-
Tax loss utilization (3)		(7,862	)		-
Adjusted net income attributable to stockholders	$	31,373		$	35,629
EPS attributable to stockholders:
Basic	$	0.29		$	0.33
Diluted	$	0.29		$	0.33

(1) Net income for the fourth quarter of 2014 included expenses totaling $5.5 million ($4.2 million after tax, or $0.04 per diluted share) recorded to recognize termination benefits relating to the Company's management reorganization.

(2) Net income for the fourth quarter of 2015 included an $8.4 million ($7.3 million after tax, or $0.07 per diluted share) gain on the sale of excess property in Edmonton, Canada.

(3) Net income for the fourth quarter of 2015 included $7.9 million ($7.9 million after tax, or $0.07 per diluted share) of tax savings generated by tax loss utilization.

Ritchie Bros. 9

Consolidated Income Statements

(Expressed in thousands of United States dollars, except share and per share amounts)

Year ended December 31,	2015			2014
Gross auction proceeds	$	4,247,635		$	4,212,641
Revenues	$	515,875		$	481,097
Direct expenses excluding depreciation and amortization		56,026			57,884
		459,849			423,213
Selling, general and administrative expenses		254,990			248,220
Depreciation and amortization expenses		42,032			44,536
Gain on disposition of property, plant and equipment		(9,691	)		(3,512	)
Impairment loss		-			8,084
Foreign exchange gain		(2,322	)		(2,042	)
Operating income	$	174,840		$	127,927
Other income (expense):
Interest income		2,660			2,222
interest expense		(4,962	)		(5,277	)
Equity income		916			458
Other, net		2,982			3,708
		1,596			1,111
Income before income taxes	$	176,436		$	129,038
Income tax expense		37,861			36,475
Net income	$	138,575		$	92,563
Net income attributable to:
Stockholders		136,214			90,981
Non-controlling interests		2,361			1,582
	$	138,575		$	92,563
EPS attributable to stockholders:
Basic	$	1.27		$	0.85
Diluted	$	1.27		$	0.85
Weighted average number of share outstanding:
Basic		107,075,845			107,268,425
Diluted		107,432,474			107,654,828
Net income attributable to stockholders	$	136,214		$	90,981
After-tax adjusting items:
Management reorganization (1)		-			4,212
Gain on sale of excess property (2)		(7,294	)		(2,946	)
Impairment loss (3)		-			8,084
Tax loss utilization (4)		(7,862	)		-
Adjusted net income attributable to stockholders	$	121,058		$	100,331
EPS attributable to stockholders:
Basic	$	1.13		$	0.94
Diluted	$	1.13		$	0.93

(1) 2014 net income included expenses totaling $5.5 million ($4.2 million after tax, or $0.04 per diluted share) recorded to recognize termination benefits relating to the Company's management reorganization.

(2) Net income for 2015 included an $8.4 million ($7.3 million after tax, or $0.07 per diluted share) gain on the sale of excess property in Edmonton, Canada. Net income for 2014 included a $3.4 million ($2.9 million after tax, or $0.03 per diluted share) gain recorded on the sale of the Company's former permanent auction site in Grande Prairie, Canada.

(3) Net income for 2014 included an $8.1 million ($8.1 million after tax, or $0.08 per diluted share) impairment loss recorded against the Company's land and improvements and auction building in Narita, Japan.

(4) Net income for2015 included $7.9 million ($7.9 million after tax, or $0.07 per diluted share) of tax savings generated by tax loss utilization.

Ritchie Bros. 10

Foreign Exchange Impacts on Performance

Like many businesses, Ritchie Bros.' performance can be affected by changing foreign exchange rates. As a reminder, Ritchie Bros. discloses all financial figures in U.S. dollars (unless otherwise noted), yet operates in over 15 countries worldwide.

The translational impact of foreign exchange rates on our results is presented below:

Foreign exchange impacts on 2015 performance
(Reported 2015 performance compared to 2015 performance measured using 2014 exchange rates)

(in U.S. $ millions)	Three months ended December 31,							Year ended December 31,
	2015, as		2015, using		%			2015, as		2015, using		%
	reported		2014 rates		Difference			reported		2014 rates		Difference
GAP	$	1,135.4	$	1,227.6		8	%	$	4,247.6	$	4,567.1		8	%
Revenues	$	135.5	$	147.3		9	%	$	515.9	$	556.3		8	%
Operating Income	$	50.4	$	55.7		10	%	$	174.8	$	186.9		7	%

Organic growth

(2015 performance measured using 2014 exchange rates compared to reported 2014 performance)

Ritchie Bros. defines organic growth as an improvement in current year performance compared to prior year performance, where current year performance is measured using foreign exchange rates consistent with those of the comparative year ago period. The Company believes that using organic growth information is important in evaluating the operational health of the business.

The following table outlines the organic growth of selected measures of performance:

(in U.S. $ millions)	Three months ended December 31,							Year ended December 31,
	2015, using		2014, as		%			2015, using		2014, as		%
	2014 rates		reported		Change			2014 rates		reported		Change
GAP	$	1,227.6	$	1,241.2		(1	%)	$	4,567.1	$	4,212.6		8	%
Revenues	$	147.3	$	138.5		6	%	$	556.3	$	481.1		16	%
Operating Income	$	55.7	$	41.2		35	%	$	186.9	$	127.9		46	%

Selected Data

Selected balance sheet data

(in U.S. $000's)	December 31,		December 31,
	2015		2014
Current assets	$	430,099	$	394,573
Current liabilities		289,966		254,091
Working capital	$	140,133	$	140,482
Total assets	$	1,120,115	$	1,121,510
Long-term debt		97,915		110,846
Stockholders' equity		703,176		691,932

Ritchie Bros. 11

Selected operating data

(Unaudited)

As at and for the year ended December 31,	2015			2014
Revenue Rate		12.14	%		11.42	%
Number of consignments at industrial auctions		47,600			45,250
Number of bidder registrations at industrial auctions		507,500			463,500
Number of buyers at industrial auctions		123,700			112,850
Number of lots at industrial auctions		354,500			319,500
Number of permanent auction sites		39			39
Number of regional auction sites		5			5
Total auction sites		44			44
Number of industrial auctions		229			233
Number of revenue producers		342			353
Number of territory managers		296			307

Average industrial auction data

Year ended December 31,	2015		2014
GAP	$	16.8 million		$ 16.5 million
Bidder registrations		2,219		1,988
Consignors		209		195
Lots		1,551		1,370

For further information, please contact:

Jamie Kokoska

Director, Investor Relations

Phone: 1.778.331.5219

Email: jkokoska@rbauction.com

Ritchie Bros. 12

News Release

Appendix A

(All figures are presented in U.S. dollars)

VANCOUVER, February 25, 2016 – This is an appendix to the news release dated February 25, 2016, wherein the Company reported its fourth quarter and annual 2015 results.

Non-GAAP Measures

The following tables reconcile non-GAAP measures referred to in the related news release to the most directly comparable GAAP measures reflected in the Company’s consolidated financial statements.

Adjusted Net Income attributable to stockholders and Diluted Adjusted EPS attributable to stockholders are reconciled to net income attributable to stockholders and the weighted average number of diluted shares outstanding as follows:

(in U.S. $000's, except share and per share amounts)	Three months ended December 31,
	2015			2014		2013
Net income attributable to stockholders	$	46,529		$	31,417	$	33,397
After-tax adjusting items:
Management reorganization		-			4,212		-
CEO separation agreement		-			-		3,389
Gain on sale of excess property		(7,294	)		-		(6,810	)
Tax loss utilization		(7,862	)		-		-
Adjusted Net Income attributable to stockholders	$	31,373		$	35,629	$	29,976
Weighted average number of diluted shares outstanding		107,428,709			107,876,180		107,241,675
Diluted Adjusted EPS attributable to stockholders	$	0.29		$	0.33	$	0.28

(in U.S. $000's, except share and per share amounts)	Year ended December 31,
	2015			2014			2013
Net income attributable to stockholders	$	136,214		$	90,981		$	93,644
After-tax adjusting items:
Management reorganization		-			4,212			-
CEO separation agreement		-			-			3,389
Gain on sale of excess property		(7,294	)		(2,946	)		(7,225	)
Impairment loss		-			8,084			-
Tax loss utilization		(7,862	)		-			-
Adjusted Net Income attributable to stockholders	$	121,058		$	100,331		$	89,808
Weighted average number of diluted shares outstanding		107,432,474			107,654,828			107,155,173
Diluted Adjusted EPS attributable to stockholders	$	1.13		$	0.93		$	0.84

Ritchie Bros. 1

Adjusted Operating Income and Adjusted Operating Income Margin reconcile to revenues and operating income as follows:

(in U.S. $ millions)	Three months ended December 31,									Year ended December 31,
	2015			2014			Better/ (Worse)			2015			2014			Better/ (Worse)
Revenues	$	135.5		$	138.5			(2	)%	$	515.9		$	481.1			7	%
Operating income	$	50.4		$	41.2			22	%	$	174.8		$	127.9			37	%
Adjusting items:
Management reorganization		-			5.5			(100	)%		-			5.5			(100	)%
Gain on sale of excess property		(8.4	)		-			100	%		(8.4	)		(3.4	)		148	%
Impairment loss		-			-			-			-			8.1			(100	)%
Adjusted Operating Income	$	42.0		$	46.7			(10	)%	$	166.5		$	138.2			20	%
Adjusted Operating Income Margin		31.0	%		33.7	%		-270 bps			32.3	%		28.7	%		360 bps

Operating Free Cash Flow reconciles to cash flows provided by operating activities and net capital spending as follows:

(in U.S. $ millions)	Year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Cash provided by operating activities	$	196.4		$	171.4		$	146.6			15	%		17	%
Property, plant and equipment additions		22.1			25.0			35.9			(12	%)		(30	%)
Intangible asset additions		8.8			13.9			15.7			(37	%)		(11	%)
Proceeds on disposition of property
plant and equipment		(16.7	)		(9.3	)		(14.5	)		80	%		(36	%)
Net capital spending	$	14.2		$	29.6		$	37.1			(52	%)		(20	%)
Operating Free Cash Flow	$	182.2		$	141.8		$	109.5			28	%		29	%

Working Capital Intensity reconciles to the following current assets and current liabilities, and revenues as follows:

(in U.S. $ millions)	As at and for the year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Trade and other receivables	$	59.4		$	76.1		$	85.9			(22	)%		(11	)%
Inventory		58.5			42.8			52.4			37	%		(18	)%
Advances against auction contracts		4.8			26.2			12.2			(82	)%		115	%
Auction proceeds payable		(101.2	)		(109.4	)		(125.9	)		(7	)%		(13	)%
Trade payables		(38.2	)		(46.8	)		(41.2	)		(18	)%		14	%
	$	(16.7	)	$	(11.1	)	$	(16.6	)		50	%		(33	)%
Revenues		515.9			481.1			467.4			7	%		3	%
Working Capital Intensity		-3.2	%		-2.3	%		-3.6	%		39	%		(36	)%

Ritchie Bros. 2

CAPEX Intensity reconciles to net capital spending and revenues as follows:

(in U.S. $ millions)	Year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Net capital spending	$	14.2		$	29.6		$	37.1			(52	)%		(20	)%
Revenues		515.9			481.1			467.4			7	%		3	%
CAPEX Intensity		2.8	%		6.2	%		7.9	%		(55	)%		(22	)%

Return on Invested Capital reconciles to net income attributable to stockholders, long-term debt, and stockholders’ equity as follows:

(in U.S. $ millions)	Year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Net income attributable to stockholders	$	136.2		$	91.0		$	93.6			50	%		(3	%)
After-tax adjusting items:
Management reorganization		-			4.2			-			(100	%)		100	%
CEO separation agreement		-			-			3.4			-			(100	%)
Gain on sale of excess property		(7.3	)		(2.9	)		(7.2	)		152	%		(60	%)
Impairment loss		-			8.1			-			(100	%)		100	%
Tax loss utilization		(7.9	)		-			-			(100	%)		-
Adjusted Net Income attributable to
stockholders	$	121.1		$	100.3		$	89.8			21	%		12	%
Opening long-term debt		110.8			177.2			200.7			(37	%)		(12	%)
Ending long-term debt		97.9			110.8			177.2			(12	%)		(37	%)
Average long-term debt	$	104.4		$	144.0		$	189.0			(28	%)		(24	%)
Opening stockholders' equity		691.9			686.1			653.1			1	%		5	%
Ending stockholders' equity		703.2			691.9			686.1			2	%		1	%
Average stockholders' equity	$	697.6		$	689.0		$	669.6			1	%		3	%
Average invested capital	$	802.0		$	833.0		$	858.6			(4	%)		(3	%)
Return on Invested Capital		15.1	%		12.0	%		10.5	%		26	%		14	%

Ritchie Bros. 3

Return on Net Assets (“RONA”) reconciles to net income attributable to stockholders, interest income, interest expense, total assets, cash and cash equivalents, restricted cash, and current liabilities as follows:

(in U.S. $ millions)	As at and for the year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Net income attributable to stockholders	$	136.2		$	91.0		$	93.6			50	%		(3	)%
Less: Interest income		(2.7	)		(2.2	)		(2.7	)		23	%		(19	)%
Add: Interest expense		5.0			5.3			7.4			(6	)%		(28	)%
Less: Income tax recovery on
finance costs		(0.5	)		(0.9	)		(1.4	)		(44	)%		(36	)%
	$	138.0		$	93.2		$	96.9			48	%		(4	)%
Total assets	$	1,120.1		$	1,121.5		$	1,162.0			(0	)%		(3	)%
Less: Cash and cash equivalents		(210.1	)		(139.8	)		(114.6	)		50	%		22	%
Less: Restricted cash		(83.1	)		(93.3	)		(119.8	)		(11	)%		(22	)%
Less: Current liabilities		(290.0	)		(254.1	)		(288.2	)		14	%		(12	)%
	$	536.9		$	634.3		$	639.4			(15	)%		(1	)%
RONA		25.7	%		14.7	%		15.2	%		75	%		(3	)%

Debt/Adjusted EBITDA reconciles to debt, operating income, and depreciation and amortization expenses as follows:

(in U.S. $ millions)	As at and for the year ended December 31,
										% Change
	2015			2014			2013			2015 over 2014			2014 over 2013
Short-term debt	$	12.4		$	7.8		$	4.4			59	%		77	%
Long-term debt		97.9			110.8			177.2			(12	%)		(37	%)
Debt	$	110.3		$	118.6		$	181.6			(7	%)		(35	%)
Operating income	$	174.8		$	127.9		$	137.0			37	%		(7	%)
Adjusting items:
Management reorganization		-			5.5			-			(100	%)		100	%
CEO Separation Agreement		-			-			4.6			-			(100	%)
Gain on sale of excess property		(8.4	)		(3.4	)		(9.9	)		146	%		(66	%)
Impairment loss		-			8.1			-			(100	%)		100	%
Adjusted Operating Income	$	166.5		$	138.2		$	131.7			20	%		5	%
Depreciation and amortization expenses		42.1			44.6			43.3			(6	%)		3	%
	$	208.6		$	182.8		$	175.0			14	%		4	%
Debt/Adjusted EBITDA		0.5	x		0.6	x		1	x		(17	%)		(40	%)

For further information, please contact:

Jamie Kokoska

Director, Investor Relations

Phone: 1.778.331.5219

Email: jkokoska@rbauction.com

Ritchie Bros. 4

EX-99.2

EXHIBIT 99.2

Condensed Consolidated Interim Financial Statements of

Ritchie Bros. Auctioneers Incorporated

for the three months ended March 31, 2015 

The accompanying unaudited condensed consolidated interim financial statements do not include all information and footnotes required for a complete set of annual financial statements prepared in accordance with United States generally accepted accounting principles. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the relevant periods have been made. Results for the interim periods are not necessarily indicative of the results to be expected for the year or any other period. These financial statements should be read in conjunction with the summary of accounting policies and the notes to the audited annual consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, a copy of which has been filed with the U.S. Securities and Exchange Commission. These policies have been applied on a consistent basis.

Condensed Consolidated Interim Income Statements

(Expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three months ended March 31,	2015			2014
Revenues (note 5)	$	115,618		$	98,588
Direct expenses, excluding depreciation and amortization		11,609			10,300
		104,009			88,288
Selling, general and administrative expenses		63,756			59,972
Depreciation and amortization expenses		10,616			10,597
Gain on disposition of property, plant and equipment		(175	)		(71	)
Foreign exchange gain		(3,207	)		(1,291	)
Operating income		33,019			19,081
Other income (expense):
Interest income		847			508
Interest expense		(1,269	)		(1,419	)
Equity income		233			82
Other, net		713			725
		524			(104	)
Income before income taxes		33,543			18,977
Income tax expense (recovery) (note 6):
Current		10,713			5,063
Deferred		(1,280	)		479
		9,433			5,542
Net income	$	24,110		$	13,435
Net income attributable to:
Stockholders	$	23,777		$	13,174
Non-controlling interests		333			261
	$	24,110		$	13,435
Earnings per share attributable to stockholders (note 8):
Basic	$	0.22		$	0.12
Diluted	$	0.22		$	0.12
Weighted average number of  shares outstanding:
Basic		107,484,944			107,047,253
Diluted		107,807,948			107,383,597

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 1

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

(Expressed in thousands of United States dollars)

(Unaudited)

Three months ended March 31,	2015			2014
Net income	$	24,110		$	13,435
Other comprehensive loss, net of income tax:
Foreign currency translation adjustment		(28,298	)		(1,073	)
Total comprehensive income (loss)	$	(4,188	)	$	12,362
Total comprehensive income (loss)  attributable to:
Stockholders		(4,335	)		12,112
Non-controlling interests		147			250
	$	(4,188	)	$	12,362

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 2

Condensed Consolidated Interim Balance Sheets

(Expressed in thousands of United States dollars, except share data)

(Unaudited)

	March 31,			December 31,
	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	176,260		$	139,815
Restricted cash		124,668			93,274
Trade and other receivables respectively		123,541			76,062
Inventory (note 11)		27,902			42,750
Advances against auction contracts		7,643			26,180
Prepaid expenses and deposits		11,778			11,587
Assets held for sale (note 12)		3,130			1,668
Income taxes receivable		3,668			3,237
		478,590			394,573
Property, plant and equipment		549,254			580,701
Equity-accounted investments (note 13)		3,045			3,001
Other non-current assets		5,257			5,504
Intangible assets		44,176			45,504
Goodwill		81,422			82,354
Deferred tax assets		2,173			9,873
	$	1,163,917		$	1,121,510
Liabilities and Equity
Current liabilities:
Auction proceeds payable	$	255,120		$	109,378
Trade and other payables		109,254			126,738
Income taxes payable		4,813			10,136
Short-term debt (note 14)		7,579			7,839
Current portion of long-term debt (note 14)		-			-
		376,766			254,091
Long-term debt (note 14)		104,069			110,846
Share unit liabilities		6,173			5,844
Other non-current liabilities		6,762			7,436
Deferred tax liabilities		23,891			34,074
		517,661			412,291
Contingencies (note  17)
Contingently redeemable non-controlling interest (note 7)		14,678			17,287
Stockholders’ equity (note 15):
Share capital:
Common stock; no par value, unlimited shares authorized, issued and outstanding: 106,013,467 shares (December 31, 2014 – 107,687,935)		99,398			141,257
Additional paid-in capital		30,827			31,314
Retained earnings		546,215			536,111
Accumulated other comprehensive income		(44,862	)		(16,750	)
Stockholders’ equity		631,578			691,932
	$	1,163,917		$	1,121,510

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 3

Condensed Consolidated Interim Statements of Changes in Equity

(Expressed in thousands of United States dollars, except share amounts)

(Unaudited)

	Attributable to Stockholders																		Contingently
													Accumulated						Redeemable
	Common Stock						Additional						Other						Non-
	Number of						Paid-In			Retained			Comprehensive			Total			Controlling
	Shares			Amount			Capital			Earnings			Loss			Equity			Interest
Balance, December 31, 2014		107,687,935		$	141,257		$	31,314		$	536,111		$	(16,750	)	$	691,932		$	17,287
Net income		-			-			-			23,777			-			23,777			333
Change in value of contingently redeemable non-controlling interest		-			-			-			1,416						1,416			(1,416	)
Other comprehensive  income (loss)		-			-			-			-			(28,112	)		28,112			(186	)
		-			-			-			25,193			(28,112	)		(2,919	)		(1,269	)
Exercise of stock options		225,532			5,630			(1,209	)		-			-			4,421			-
Stock-option compensation  tax adjustment		-			-			(1	)		-			-			(1	)		-
Stock-option compensation expense (note 16)		-			-			723			-			-			723			-
Share repurchase (note 15)		(1,900,000	)		(47,489	)		-			-			-			(47,489	)		-
Cash dividends paid		-			-			-			(15,089	)		-			(15,089	)		(1,340	)
Balance, March 31, 2015		106,013,467		$	99,398		$	30,827		$	546,215		$	(44,862	)	$	631,578		$	14,678

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 4

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of United States dollars)

(Unaudited)

Three months ended March 31,	2015			2014
Cash provided by (used in):
Operating activities:
Net income	$	24,110		$	13,435
Adjustments for items not affecting cash:
Depreciation and amortization expenses		10,616			10,597
Inventory write down		60			-
Stock option compensation expense		723			950
Deferred income tax expense (recovery)		(1,280	)		479
Equity income less dividends received		(233	)		(82	)
Unrealized foreign exchange gain		(996	)		(208	)
Gain on disposition of property, plant and equipment		(175	)		(71	)
		8,715			11,665
Net changes in operating assets and liabilities (note 9)		77,409			60,628
Net cash provided by operating activities		110,234			85,728
Investing activities:
Property, plant and equipment additions		(3,327	)		(6,670	)
Intangible asset additions		(2,419	)		(4,305	)
Other, net		773			680
Net cash used in investing activities		(4,973	)		(10,295	)
Financing activities:
Issuances of share capital		4,421			1,313
Share repurchase		(47,489	)		-
Dividends paid to stockholders		(15,089	)		(13,915	)
Dividends paid to contingently redeemable non-controlling interests		(1,340	)		-
Proceeds from short-term debt		(185	)		4,952
Repayment of long-term debt		-			(30,000	)
Repayment of finance lease obligations		(532	)		(366	)
Other, net		(105	)		(380	)
Net cash used in financing activities		(60,319	)		(38,396	)
Effect of changes in foreign currency rates on cash and cash equivalents		(8,497	)		(3,121	)
Increase in cash and cash equivalents		36,445			33,916
Cash and cash equivalents, beginning of period		139,815			114,596
Cash and cash equivalents, end of period	$	176,260		$	148,512

See supplemental cash flow information (note 9)

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 5

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

1. Basis of preparation

The accompanying unaudited condensed consolidated interim financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”) from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated.

Certain information and footnote disclosure required by U.S. GAAP for complete annual financial statements have been omitted and, therefore, these condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Previously, the Company prepared its consolidated financial statements under International Financial Reporting Standards (“IFRS”), for reporting as permitted by security regulators in Canada and the United States under the status of a Foreign Private Issuer as defined by the United States Securities and Exchange Commission (“SEC”). At the end of the second quarter of 2015, the Company determined that it no longer qualified as a foreign private issuer under the SEC rules. As a result, beginning January 1, 2016 the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to U.S. GAAP was made retrospectively for all periods from the Company’s inception. In conjunction with the transition, the Company is refiling the interim financial information included herein to comply with Canadian securities regulations.

2. Significant accounting policies

There have been no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Ritchie Bros. 6

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

2. Significant accounting policies (continued)

(a) Adoption of new accounting pronouncements

During fiscal year 2015, the Company transitioned its accounting from IFRS to U.S. GAAP. The transition was made retrospectively for all periods presented. The transitional included the adoption of any relevant accounting pronouncements effective for fiscal years commencing January 1, 2015.

(i) In January 2015, the Company early adopted Accounting Standards Update (“ASU”) 2015-11, Inventory
(Topic 330): Simplifying the Measurement of Inventory, which requires the Company to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completions, disposal, and transportation. The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

(ii) In November 2015, the Financial Accounting Standards Board, (“FASB”) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(iii) In April 2015, the FSAB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual periods beginning after December 15, 2015. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(b) Recent accounting pronouncements not yet adopted

(i) In July 2015, the FASB, delayed the effective date of ASU 2014-09, Revenue from Contracts with Customers by one year. Reporting entities may choose to adopt the standard as of the original effective date. Based on its outreach to various stakeholders and the forthcoming amendments to ASU 2014-09, the FASB decided that a deferral is necessary to provide adequate time to effectively implement the new revenue standard. ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

(ii) In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. ASU 2015-02 changes the evaluation of whether limited partnerships, and similar legal entities, are variable interest entities, or VIEs, and eliminates the presumption that a general partner should consolidate a limited partnership that is a voting interest entity. The new guidance also alters the analysis for determining when fees paid to a decision maker or service provider represent a variable interest in a VIE and how interests of related parties affect the primary beneficiary determination. ASU 2015-02 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The new standard allows early adoption, including early adoption in an interim period. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

Ritchie Bros. 7

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

2. Significant accounting policies (continued)

(iii) In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard is effective for fiscal years beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

3. Seasonality of operations

The Company's operations are both seasonal and event driven. Revenues tend to be highest during the second and fourth calendar quarters. The Company generally conducts more auctions during these quarters than during the first and third calendar quarters. Late December through mid-February and mid-July through August are traditionally less active periods.

4. Segmented information

The Company’s principal business activity is the sale of industrial equipment and other assets at auctions. The Company’s operations are comprised of two reportable segments as determined by their differing service delivery model, these are:

· Core Auction segment, a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding; and

· EquipmentOne segment, a secure online marketplace that facilitates private equipment transactions.

The accounting policies of the segments are similar to those described in the significant accounting policies in note 2. The Chief Operating Decision Maker evaluates each segment’s performance based on earnings (loss) from operations. The significant non-cash items included in segment earnings (loss) from operations is depreciation and amortization.

	Core			Equipment-
Three months ended March 31, 2015	Auction			One			Consolidated
Revenues	$	112,645		$	2,973		$	115,618
Direct expenses		(11,609	)		-			(11,609	)
Selling, general and administrative expenses		(60,598	)		(3,158	)		(63,756	)
Depreciation and amortization expenses		(9,696	)		(920	)		(10,616	)
	$	30,742		$	(1,105	)	$	29,637
Gain on disposition of property, plant and equipment								175
Foreign exchange gain								3,207
Operating income							$	33,019
Equity income								233
Other and income tax expenses								(9,142	)
Net income							$	24,110

Ritchie Bros. 8

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

4. Segmented information (continued)

	Core			Equipment-
Three months ended March 31, 2014	Auction			One			Consolidated
Revenues	$	96,132		$	2,456		$	98,588
Direct expenses		(10,300	)		-			(10,300	)
Selling, general and administrative expenses		(55,909	)		(4,063	)		(59,972	)
Depreciation and amortization expenses		(9,681	)		(916	)		(10,597	)
	$	20,242		$	(2,523	)	$	17,719
Gain on disposition of property, plant and equipment								71
Foreign exchange gain								1,291
Operating income							$	19,081
Equity income								82
Other and income tax expenses								(5,728	)
Net income							$	13,435

The Chief Operating Decision Maker does not evaluate the performance of its operating segments based on segment assets and liabilities. The Company does not classify liabilities on a segmented basis.

5. Revenues

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

	Three months ended March 31,
	2015		2014
Commissions	$	93,140	$	78,174
Fees		22,478		20,414
	$	115,618	$	98,588

Net profits on inventory sales included in commissions are:

	Three months ended March 31,
	2015			2014
Revenue from inventory sales	$	153,281		$	151,697
Cost of inventory sold		(138,578	)		(140,238	)
	$	14,703		$	11,459

6. Income taxes

The Company’s consolidated effective tax rate in respect of operations for the three months ended March 31, 2015 was 28.1% (2014: 29.2%).

Ritchie Bros. 9

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

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

The Company holds a 51% interest in Ritchie Bros. Financial Services (“RBFS”), an entity that provides loan origination services to enable the Company’s auction customers to obtain financing from third party lenders. As a result of the Company’s involvement with RBFS, the Company is exposed to risks related to the recovery of the net assets of RBFS as well as liquidity risks associated with the put option discussed below.

The Company has determined RBFS is a variable interest entity because the Company provides subordinated financial support to RBFS and because the Company’s voting interest is disproportionately low in relation to its economic interest in RBFS while substantially all the activities of RBFS involve or are conducted on behalf of the Company. The Company has determined it is the primary beneficiary of RBFS as it is part of a related party group that has the power to direct the activities that most significantly impact RBFS’s economic performance, and although no individual member of that group has such power, the Company represents the member of the related party group that is most closely associated with RBFS.

The Company and the non-controlling interest (“NCI”) holders each hold options pursuant to which the Company may acquire, or be required to acquire, the NCI holders’ 49% interest in RBFS. These call and put options become exercisable in April 2016. As a result of the existence of the put option, the NCI is accounted for as a contingently redeemable equity instrument (the “contingently redeemable NCI”).

At all reporting periods presented, the Company determined that redemption was probable and measured the carrying value of the contingently redeemable NCI at its estimated redemption value. The NCI can be redeemed at a purchase price to be determined through an independent appraisal process conducted in accordance with the terms of the agreement, or at a negotiated price (the “redemption value”) and therefore, the redemption value on exercise may materially differ from the redemption value as at December 31, 2015. The Company has the option to elect to pay the purchase price in either cash or shares of the Company, subject to the Company obtaining all relevant security exchange and regulatory consents and approvals.

The redemption value of the contingently redeemable NCI was determined based on a blended analysis of a capitalized cash flow approach and a market value approach towards determining an estimated fair value of RBFS, with adjustments for relevant market participant data. The Company has estimated the redemption value using the capitalized cash flow approach, with significant inputs including the capitalization multiple, which is based on an estimated weighted average cost of capital of 15%, as well as a long-term earnings growth for RBFS of 4% and foreign exchange rates. Significant estimates in the market value approach include identifying similar companies with comparable business factors to RBFS, and implied valuation multiples for these companies.

The estimation of fair value as a basis of determining the redemption value required management to make significant judgments, estimates, and assumptions as of the reporting date. Those judgments, estimates, and assumptions could vary significantly between the reporting date and when the call and put options become exercisable in April 2016.

8. Earnings per share attributable to shareholders

	Net				Per share
Three months ended March 31, 2015	earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	24,110		107,484,944	$	0.22
Effect of dilutive securities:
Stock options		-		323,004		-
Diluted earnings per share attributable to shareholders	$	24,110		107,807,948	$	0.22

Ritchie Bros. 10

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

	Net				Per share
Three months ended March 31, 2014	earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	13,435		107,047,253	$	0.12
Effect of dilutive securities:
Stock options		-		336,344		-
Diluted earnings per share attributable to shareholders	$	13,435		107,383,597	$	0.12

For the three months ended March 31, 2015, stock options to purchase 438,358 common shares were outstanding but were excluded from the calculation of diluted earnings per share as they were anti-dilutive (2014: 1,408,959).

9. Supplemental cash flow information

Three months ended March 31,	2015			2014
Restricted cash	$	(35,335	)	$	(20,234	)
Trade and other receivables		(51,577	)		(57,996	)
Inventory		13,839			2,044
Advances against auction contracts		18,301			(6,118	)
Prepaid expenses and deposits		(823	)		(3,930	)
Income taxes receivable		(431	)		(2,294	)
Auction proceeds payable		149,813			159,589
Trade and other payables		(15,001	)		(3,508	)
Income taxes payable		(4,910	)		(6,772	)
Share unit liabilities		741			1,264
Other		2,792			(1,417	)
Net changes in operating assets and liabilities	$	77,409		$	60,628

Three months ended March 31	2015		2014
Interest paid, net of interest capitalized	$	1,302	$	1,214
Interest received		847		504
Net income taxes paid		15,551		14,980
Non-cash transactions
Non-cash purchase of property, plant and equipment under capital lease		-		91

Ritchie Bros. 11

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

10. Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement or disclosure, as explained in the Company’s audited annual financial statements.

			March 31, 2015				December 31, 2014
			Carrying				Carrying
Fair values disclosed	Category		Amount		Fair Value		Amount		Fair Value
Recurring:
Cash and cash  equivalents		Level 1	$	176,260	$	176,260	$	139,815	$	139,815
Restricted cash		Level 1		124,668		124,668		93,274		93,274
Short-term debt		Level 2		7,579		7,579		7,839		7,839
Long-term debt		Level 2		104,069		108,581		110,846		114,532
Non-recurring:
Japanese assets:
Land and  improvements		Level 3	$	14,489		$ N/A	$	14,719	$	16,150
Auction building		Level 3		4,272		N/A		4,368		4,779

The carrying value of the Company‘s cash and cash equivalents, trade and other current receivables, advances against auction contracts, auction proceeds payable, trade and other payables, and current long-term approximate their fair values due to their short terms to maturity. The fair values of non-current borrowings are determined through the calculation of each liability‘s present value using market rates of interest at period close.

During the year ended December 31, 2014, the Company recognized an impairment loss on its auction site property located in Narita, Japan. The impairment loss was for the land and improvements and the auction building (the “Japanese assets“). Management assessed the recoverable amounts of the Japanese assets when results of an assessment of the Japan auction operations and performance of that auction site indicated impairment, and management concluded that the step 1 undiscounted cash flow resulted in recoverable amounts below the carrying value of the Japanese assets. The fair values of the Japanese assets were determined to be $16,150,000 for the land and improvements and $4,779,000 for the auction building based on the fair value less costs of disposal.

The Company performed a valuation of the Japanese assets as at December 31, 2014. The fair value of the land and improvements was determined based on comparable data in similar regions and relevant information regarding recent events impacting the local real-estate market (Level 3 inputs). The fair value of the auction building was determined based on a depreciated asset cost model with adjustments for relevant market participant data based on the Company‘s experience with disposing of similar auction buildings and current real estate transactions in similar regions (Level 3 inputs).

Determination of the recoverable amount of the Japanese assets involved estimating any costs that would be incurred if the assets were disposed of, including brokers‘ fees, costs to prepare the Japanese assets for sale and other selling fees. In determining these costs, management assumed that any costs required to prepare the Japanese assets for sale could be estimated based on current market rates for brokers‘ fees and management‘s experience with disposing of similar auction sites, taking into consideration the relative newness of the Japan auction site (Level 3 inputs).

The impaired Narita land and improvements and auction building form part of the Company‘s Core Auction reportable segment.

Ritchie Bros. 12

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

11. Inventory

At each period end, inventory is reviewed to ensure that it is recorded at the lower of cost and net realizable value. During the three months ended March 31, 2015, the Company recorded inventory write downs of $60,000 (2014: Nil).

Of inventory held at March 31, 2015, 100% is expected to be sold prior to the end of June 2015 (December 31, 2014: 97% sold prior to the end of March 2015, with the remainder expected to sold by the end of June 2015).

12. Assets held for sale

At March 31, 2015, the Company’s assets held for sale consisted of land located in Edmonton and London, Canada.

Balance, December 31, 2014	$	1,668
Reclassified from property, plant and equipment		1,597
Other		(135	)
Balance, March 31, 2015	$	3,130

13. Equity-accounted investments

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

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

	Ownership			March 31		December 31
	percentage			2015		2014
Cura Classis entities		48	%	$	3,045	$	3,001

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

Ritchie Bros. 13

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

14. Debt

	Carrying value
	March 31,		December 31,
	2015		2014
Short-term debt	$	7,579	$	7,839
Long-term debt:
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 4.225%, due in quarterly installments of interest only,  with the full amount of the principal due in May 2022.	$	26,802	$	29,257
Term loan, denominated in United States dollars, unsecured, bearing interest at 3.59%, due in quarterly installments of interest only,  with the full amount of the principal due in May 2022.		30,000		30,000
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 6.385%, due in quarterly installments of interest only, with the full amount of the principal due in May 2016.		47,267		51,589
	$	104,069	$	110,846
Total Debt	$	111,648	$	118,685

As at March 31, 2015, short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facility of $285,000,000 (December 31, 2014: $285,000,000), and had a weighted average interest rate of 1.72% (December 31, 2014: 1.83%).

15. Stockholders’ equity and dividends

Preferred shares

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

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

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

Share repurchase

During March 2015, 1,900,000 common shares were repurchased at a weighted average share price of $24.98 per share. The repurchased shares were cancelled on March 26, 2015.

Dividends

Declared and paid

The Company declared and paid the following dividends during the three months ended March 31, 2015 and 2014:

	Declaration date	Dividend per share		Record date	Total dividends		Payment date
First quarter 2015	May 7, 2015	$	0.1400	May 29, 2015		14,955	June 19, 2015
First quarter 2014	May 2, 2014		0.1300	May 23, 2014		13,942	June 13, 2014

Ritchie Bros. 14

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

16. Share-based payments

Share-based payments consisted of the following compensation costs recognized in selling, general and administrative expenses for the three months ended March 31, 2015 and 2014:

Three months ended March 31,	2015		2014
Stock option compensation expense	$	723	$	950
Share unit expense		1,017		1,264
Employee share purchase plan - employer contributions		308		310
	$	2,048	$	2,524

(a) Stock option plan

Stock option activity for the three months ended March 31, 2015 and the year ended December 31, 2014 is presented below:

	March 31, 2015					December 31, 2014
	Common shares			WA exercise		Common shares			WA exercise
	under option			price		under option			price
Outstanding, beginning of period		3,897,791		$	22.09		3,749,574		$	21.09
Granted		767,633			24.84		837,364			23.60
Exercised		(225,532	)		19.60		(663,152	)		18.28
Forfeited		(57,450	)		22.75		(25,995	)		23.26
Outstanding, end of period		4,382,442		$	22.69		3,897,791		$	22.09
Exercisable, end of period		2,802,663		$	21.91		2,483,530		$	21.65

The options outstanding at March 31, 2015 expire on dates ranging to March 9, 2025. The weighted average (“WA”) share price of options exercised during the three months ended March 31, 2015 was $26.01 (2014: $23.04).

Ritchie Bros. 15

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

16. Share-based payments (continued)

(a) Stock option plan (continued)

The fair value of the stock option grants was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	2015			2014
Risk free interest rate		1.8	%		1.7	%
Expected dividend yield		2.21	%		2.32	%
Expected lives of the stock options		5 years			5 years
Expected volatility		25.9	%		29.2	%

The WA grant date fair value of options granted during the three months ended March 31, 2015 was $5.21 per option (2014: $5.09). The compensation expense arising from option grants is amortized over the relevant vesting periods of the underlying options.

As at March 31, 2015, the unrecognized stock-based compensation cost related to the non-vested stock options was $6,320,000, which is expected to be recognized over a weighted average period of 3.1 years. Cash received from stock-based award exercises for the three months ended March 31, 2015 was $4,421,000 (2014: $1,313,000).

(b) Share unit plans

During the three months ended March 31, 2015, the Company granted share units under two new performance share unit (“PSU”) plans, a senior executive PSU plan and an employee PSU plan. The two new plans have identical terms and conditions, with the exception of clauses under the senior executive PSU plan that address the treatment of recipients’ PSUs in the event of a change of control of the Company.

Under the plans, the number of PSUs that vest is conditional upon specified market and non-market vesting conditions being met. The market vesting condition is based on the relative performance of the Company’s share price in comparison to the performance of a pre-determined portfolio of other companies’ share prices. The non-market vesting conditions are based on the achievement of specific performance measures and can result in participants earning between 0% and 200% of the target number of PSUs granted.

Both new plans entitle the grant recipient to a payment equal to the dividend-adjusted number of PSUs vested multiplied by the VWAP of the Company’s common shares reported by the New York Stock Exchange for the twenty days prior to vest date. Unlike the Company’s other share unit plans, the two new PSU plans give the Company the option of settling in either cash or equity, with equity-settlement subject to shareholder approval. Shareholder approval had not been sought out or obtained as at March 31, 2015 for equity-settlement of the new PSVs. As such, the Company has determined that there is a present obligation to settle in cash, and has accounted for the two new PSU plans as cash-settled share-based payment transactions.

Ritchie Bros. 16

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except share, unit and per share amounts)

(Unaudited)

Three months ended March 31, 2015 and 2014

16. Share-based payments (continued)

(b) Share unit plans (continued)

The WA grant date fair value of the 183,011 PSUs granted under the new plans during the three months ended March 31, 2015, excluding the effect of dividend adjustments, was $23.95. These PSUs are subject to market vesting conditions and their fair value at grant date was estimated using a binomial model with the following assumptions:

	2015
Risk free interest rate		1.3	%
Expected dividend yield		2.17	%
Expected lives of the PSUs		3 years
Expected volatility		29.4	%
Average expected volatility of comparable companies		32.8	%

The WA grant date fair value of the 15,074 deferred share units (“DSUs”) granted under the DSU plan to members of the Board of Directors during the three months ended March 31, 2015, excluding the effect of dividend adjustments, was $25.67 (2014: $22.61). These DSUs are not subject to market vesting conditions and their fair value was estimated using the 20-day volume weighted average price of the Company’s common shares listed on the New York Stock Exchange.

The total market value of share units vested and released during the three months ended March 31, 2015 was $918,000 (2014: $1,377,000). As at March 31, 2015, the Company had a total share unit liability of $7,646,000 (2014: $3,209,000) in respect of share units under the PSU, RSU and DSU plans described herein.

The compensation expense arising from share unit grants is amortized over the relevant vesting periods of the underlying units.

17. Contingencies

(a) Legal and other claims

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

(b) Guarantee contracts

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

At March 31, 2015 there was $81,675,000 of industrial assets guaranteed under contract, of which 100% is expected to be sold prior to the end of June 2015 (December 31, 2014: $85,967,000 of which 100% is expected to be sold prior to the end of May 2015).

At March 31, 2015 there was $34,831,000 of agricultural assets guaranteed under contract, of which 90% is expected to be sold prior to the end of June 2015, with the remainder to be sold prior to the end of July 2015 (December 31, 2014: $15,793,000 of which 92% is expected to be sold prior to the end of April 2015, with the remainder to be sold by June 2015).

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

Ritchie Bros. 17

EX-99.3

EXHIBIT 99.3

Condensed Consolidated Interim Financial Statements of

Ritchie Bros. Auctioneers Incorporated

for the three and six months ended June 30, 2015

The accompanying unaudited condensed consolidated interim financial statements do not include all information and footnotes required for a complete set of annual financial statements prepared in accordance with United States generally accepted accounting principles. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the relevant periods have been made. Results for the interim periods are not necessarily indicative of the results to be expected for the year or any other period. These financial statements should be read in conjunction with the summary of accounting policies and the notes to the audited annual consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, a copy of which has been filed with the U.S. Securities and Exchange Commission. These policies have been applied on a consistent basis.

Condensed Consolidated Interim Income Statements

(Expressed in thousands of United States dollars, except share and per share amounts)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenues (note 5)	$	155,477		$	141,835		$	271,095		$	240,423
Direct expenses, excluding depreciation and amortization		17,027			17,616			28,636			27,916
		138,450			124,219			242,459			212,507
Selling and, general and administrative expenses		65,239			61,513			128,995			121,485
Depreciation and amortization expenses		10,769			10,979			21,385			21,576
Gain on disposition of property, plant and equipment		(791	)		(258	)		(966	)		(329	)
Foreign exchange loss (gain)		438			212			(2,769	)		(1,079	)
Operating income		62,795			51,773			95,814			70,854
Other income (expense):
Interest income		680			617			1,527			1,125
Interest expense		(1,308	)		(1,345	)		(2,577	)		(2,764	)
Equity income		173			97			406			179
Other, net		918			591			1,631			1,316
		463			(40	)		987			(144	)
Income before income taxes		63,258			51,733			96,801			70,710
Income tax expense (recovery) (note 6):
Current		19,365			12,969			30,078			18,032
Deferred		(1,953	)		1,228			(3,233	)		1,707
		17,412			14,197			26,845			19,739
Net income	$	45,846		$	37,536		$	69,956		$	50,971
Net income attributable to:
Stockholders	$	45,083		$	37,008		$	68,860		$	50,182
Non-controlling interests		763			528			1,096			789
	$	45,846		$	37,536		$	69,956		$	50,971
Earnings per share attributable to stockholders (note 8):
Basic		0.42			0.35			0.64			0.47
Diluted		0.42			0.34			0.64			0.47
Weighted average number of shares outstanding (note 8):
Basic		106,506,916			107,225,226			106,993,228			107,136,745
Diluted		106,978,061			107,618,315			107,390,303			107,501,462

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 1

Condensed Consolidated Interim Statements of Comprehensive Income

(Expressed in thousands of United States dollars)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015			2014
Net income	$	45,846	$	37,536	$	69,956		$	50,791
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		5,212		4,504		(23,086	)		3,431
Total comprehensive income	$	51,058	$	42,040	$	46,870		$	54,222
Total comprehensive income (loss) attributable to:
Stockholders	$	50,295	$	41,471	$	45,960		$	53,403
Non-controlling interests		763		569		910			819
	$	51,058	$	42,040	$	46,870		$	54,222

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 2

Condensed Consolidated Interim Balance Sheets

(Expressed in thousands of United States dollars, except per share data)

(Unaudited)

	June 30,			December 31,
	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	214,209		$	139,815
Restricted cash		151,036			93,274
Trade and other receivables		129,622			76,062
Inventory (note 11)		34,451			42,750
Advances against auction contracts		8,960			26,180
Prepaid expenses and deposits		9,889			11,587
Assets held for sale (note 12)		1,563			1,668
Income taxes receivable		6,412			3,237
		556,142			394,573
Property, plant and equipment		545,713			580,701
Equity-accounted investments (note 13)		3,282			3,001
Other non-current assets		4,327			5,504
Intangible assets, net		44,798			45,504
Goodwill		81,577			82,354
Deferred tax assets		6,301			9,873
	$	1,242,140		$	1,121,510
Liabilities and Equity
Current liabilities:
Auction proceeds payable	$	256,777		$	109,378
Trade and other payables		102,148			126,738
Income taxes payable		14,781			10,136
Short-term debt (note 14)		13,773			7,839
Current portion of long-term debt (note 14)		47,994			-
		435,473			254,091
Long-term debt (note 14)		57,210			110,846
Share unit liabilities		8,915			5,844
Other non-current liabilities		6,695			7,436
Deferred tax liabilities		26,294			34,074
		534,587			412,291
Contingencies (note 17)
Contingently redeemable non-controlling interest (note 7)		16,470			17,287
Stockholders’ equity (note 15):
Share capital:
Common stock: no par value, unlimited shares issued and outstanding: 107,107,570 shares  (December 31, 2014 – 107,687,935)		129,166			141,257
Additional paid-in capital		26,253			31,314
Retained earnings		575,314			536,111
Accumulated other comprehensive loss		(39,650	)		(16,750	)
Stockholder’ equity		691,083			691,932
	$	1,242,140		$	1,121,510

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 3

Condensed Consolidated Interim Statements of Changes in Equity

(Expressed in thousands of United States dollars, except where noted)

(Unaudited)

	Attributable to stockholders
													Accumulated						Contingently
	Common stock						Additional						Other						Redeemable
	Number of						Paid-In			Retained			Comprehensive			Total			Non-controlling
	Shares			Amount			Capital			Earnings			Loss			Equity			Interest
Balance, December 31, 2014		107,687,935		$	141,257		$	31,314		$	536,111		$	(16,750	)	$	691,932		$	17,287
Net income		-			-			-			68,860			-			68,860			1,096
Change in fair value of contingently redeemable non-controlling interest		-			-			-			387			-			387			(387	)
Other comprehensive loss		-			-			-			-			(22,900	)		(22,900	)		(186	)
		-			-			-			69,247			(22,900	)		(46,347	)		523
Stock option exercises		1,319,635			35,398			(7,452	)		-			-			27,946			-
Stock option tax adjustment		-			-			335			-			-			335			-
Stock option compensation expense (note 16)		-			-			2,056			-			-			2,056			-
Shares repurchased (note 15)		(1,900,000	)		(47,489	)		-			-			-			(47,489	)		-
Cash dividends paid		-			-			-			(30,044	)		-			(30,044	)		(1,340	)
Balance, June 30, 2015		107,107,570		$	129,166		$	26,253		$	575,314		$	(39,650	)	$	691,083		$	16,470

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 4

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of United States dollars)

(Unaudited)

	Six months ended June 30,
	2015			2014
Cash provided by (used in):
Operating activities:
Net income	$	69,956		$	50,971
Adjustments for items not affecting cash:
Depreciation and amortization expenses		21,385			21,576
Inventory write down		313			469
Stock option compensation expense (note 16)		2,056			1,581
Deferred income tax expense (recovery)		(3,233	)		1,707
Equity income less dividends received		(406	)		(179	)
Unrealized foreign exchange gain (loss)		187			(179	)
Gain on disposition of property, plant and equipment		(966	)		(329	)
		19,336			24,646
Net changes in operating assets and liabilities (note 9)		43,865			(5,704	)
Net cash provided by operating activities		133,157			69,913
Investing activities:
Property, plant and equipment additions		(4,612	)		(12,388	)
Intangible asset additions		(4,467	)		(7,356	)
Proceeds on disposition of property, plant and equipment		3,896			1,547
Other, net		-			(540	)
Net cash used in investing activities		(5,183	)		(18,737	)
Financing activities:
Issuance of share capital		27,946			5,093
Share repurchase (note 15)		(47,489	)		-
Dividends paid to stockholders		(30,044	)		(27,857	)
Dividends paid to contingently redeemable non-controlling interests		(1,340	)		-
Proceeds from short-term debt		6,497			35,716
Repayment of short-term debt		(416	)		(4,400	)
Repayment of long-term debt		-			(48,100	)
Repayment of finance lease obligations		(1,054	)		(853	)
Other, net		201			(225	)
Net cash used in financing activities		(45,699	)		(40,626	)
Effect of changes in foreign currency rates on cash and cash equivalents		(7,881	)		(2,731	)
Increase in cash and cash equivalents		74,394			7,819
Cash and cash equivalents, beginning of period		139,815			114,596
Cash and cash equivalents, end of period	$	214,209		$	122,415

Supplemental cash flow information (note 9)

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 5

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

1. Basis of preparation

The accompanying unaudited condensed consolidated interim financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”) from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated.

Certain information and footnote disclosure required by U.S. GAAP for complete annual financial statements have been omitted and, therefore, these condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Previously, the Company prepared its consolidated financial statements under International Financial Reporting Standards (“IFRS”), for reporting as permitted by security regulators in Canada and the United States under the status of a Foreign Private Issuer as defined by the United States Securities and Exchange Commission (“SEC”). At the end of the second quarter of 2015, the Company determined that it no longer qualified as a foreign private issuer under the SEC rules. As a result, beginning January 1, 2016 the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to U.S. GAAP was made retrospectively for all periods from the Company’s inception. In conjunction with the transition, the Company is refiling the interim financial information included herein to comply with Canadian securities regulations.

2. Significant accounting policies

There have been no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

(a) Adoption of new accounting pronouncements

During fiscal year 2015, the Company transitioned its accounting from IFRS to U.S. GAAP. The transition was made retrospectively for all periods presented. The transitional included the adoption of any relevant accounting pronouncements effective for fiscal years commencing January 1, 2015.

(i) In January 2015, the Company early adopted Accounting Standards Update (“ASU”) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires the Company to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completions, disposal, and transportation. The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

Ritchie Bros. 6

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

2. Significant accounting policies

(a) Adoption of new accounting pronouncements (continued)

(ii) In November 2015, the Financial Accounting Standards Board, (“FASB”) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(iii) In April 2015, the FSAB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual periods beginning after December 15, 2015. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(b) Recent accounting pronouncements not yet adopted

(i) In July 2015, FASB delayed the effective date of ASU 2014-09, Revenue from Contracts with Customers by one year. Reporting entities may choose to adopt the standard as of the original effective date. Based on its outreach to various stakeholders and the forthcoming amendments to ASU 2014-09, the FASB decided that a deferral is necessary to provide adequate time to effectively implement the new revenue standard. ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

(ii) In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. ASU 2015-02 changes the evaluation of whether limited partnerships, and similar legal entities, are variable interest entities, or VIEs, and eliminates the presumption that a general partner should consolidate a limited partnership that is a voting interest entity. The new guidance also alters the analysis for determining when fees paid to a decision maker or service provider represent a variable interest in a VIE and how interests of related parties affect the primary beneficiary determination. ASU 2015-02 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The new standard allows early adoption, including early adoption in an interim period. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

(iii) In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard is effective for fiscal years beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

Ritchie Bros. 7

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

3. Seasonality of operations

The Company's operations are both seasonal and event driven. Revenues tend to be highest during the second and fourth calendar quarters. The Company generally conducts more auctions during these quarters than during the first and third calendar quarters. Late December through mid-February and mid-July through August are traditionally less active periods.

4. Segmented information

The Company’s principal business activity is the sale of industrial equipment and other assets at auctions. The Company’s operations are comprised of two reportable segments as determined by their differing service delivery model, these are:

· Core Auction segment, a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding; and

· EquipmentOne segment, a secure online marketplace that facilitates private equipment transactions.

The accounting policies of the segments are similar to those described in the significant accounting policies in note 2. The Chief Operating Decision Maker evaluates each segment’s performance based on earnings (loss) from operations. The significant non-cash items included in segment earnings (loss) from operations is depreciation and amortization.

	Three months ended June 30, 2015									Three months ended June 30, 2014
	Core Auction			EquipmentOne			Consolidated			Core Auction			EquipmentOne			Consolidated
Revenues	$	151,645		$	3,832		$	155,477		$	138,554		$	3,281		$	141,835
Direct expenses		(17,027	)		-			(17,027	)		(17,616	)		-			(17,616	)
Selling, general and administrative  expenses		(61,801	)		(3,438	)		(65,239	)		(57,584	)		(3,929	)		(61,513	)
Depreciation and amortization expenses		(9,972	)		(797	)		(10,769	)		(10,062	)		(917	)		(10,979	)
	$	62,845		$	(403	)	$	62,442		$	53,292		$	(1,565	)	$	51,727
Gain on disposition of property, plant and equipment											791						258
Foreign exchange loss								(438	)								(212	)
Operating income							$	62,795								$	51,773
Equity income								173									97
Other and income tax expenses								(17,122	)								(14,334	)
Net income							$	45,846								$	37,536

Ritchie Bros. 8

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

4. Segment Reporting (continued)

	Six months ended June 30, 2015									Six months ended June 30, 2014
	Core Auction			EquipmentOne			Consolidated			Core Auction			EquipmentOne			Consolidated
Revenues	$	264,290		$	6,805		$	271,095		$	234,686		$	5,737		$	240,423
Direct expenses		(28,636	)		-			(28,636	)		(27,916	)		-			(27,916	)
Selling, general and administrative expenses		(122,399	)		(6,596	)		(128,995	)		(113,493	)		(7,992	)		(121,485	)
Depreciation and amortization expenses		(19,668	)		(1,717	)		(21,385	)		(19,743	)		(1,833	)		(21,576	)
	$	93,587		$	(1,508	)	$	92,079		$	73,534		$	(4,088	)	$	69,446
Gain on disposition of property, plant and equipment								966									329
Foreign exchange gain								2,769									1,079
Operating income							$	95,814								$	70,854
Equity income								406									179
Other and income tax expenses								(26,264	)								(20,062	)
Net income							$	69,956								$	50,971

The Chief Operating Decision Maker does not evaluate the performance of its operating segments based on segment assets and liabilities. The Company does not classify liabilities on a segmented basis.

5. Revenues

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

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Commissions	$	124,592	$	112,684	$	217,732	$	190,858
Fees		30,885		29,151		53,363		49,565
	$	155,477	$	141,835	$	271,095	$	240,423

Net profits on inventory sales included in commissions are:

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenue from inventory sales	$	150,147		$	191,085		$	303,428		$	342,782
Cost of inventory sold		(136,255	)		(179,782	)		(274,832	)		(320,021	)
	$	13,892		$	11,303		$	28,596		$	22,761

Ritchie Bros. 9

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

6. Income taxes

The Company’s consolidated effective tax rate in respect of operations for the three and six months ended June 30, 2015 was 27.5% and 27.7% respectively (2014: 27.4% and 27.9%). The effective tax rate increased relative to the comparative period primarily as the result of a greater proportion of earnings subject to taxation in jurisdictions with higher tax rates.

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

The Company holds a 51% interest in Ritchie Bros. Financial Services (“RBFS”), an entity that provides loan origination services to enable the Company’s auction customers to obtain financing from third party lenders. As a result of the Company’s involvement with RBFS, the Company is exposed to risks related to the recovery of the net assets of RBFS as well as liquidity risks associated with the put option discussed below.

The Company has determined RBFS is a variable interest entity because the Company provides subordinated financial support to RBFS and because the Company’s voting interest is disproportionately low in relation to its economic interest in RBFS while substantially all the activities of RBFS involve or are conducted on behalf of the Company. The Company has determined it is the primary beneficiary of RBFS as it is part of a related party group that has the power to direct the activities that most significantly impact RBFS’s economic performance, and although no individual member of that group has such power, the Company represents the member of the related party group that is most closely associated with RBFS.

The Company and the non-controlling interest (“NCI”) holders each hold options pursuant to which the Company may acquire, or be required to acquire, the NCI holders’ 49% interest in RBFS. These call and put options become exercisable in April 2016. As a result of the existence of the put option, the NCI is accounted for as a contingently redeemable equity instrument (the “contingently redeemable NCI”).

At all reporting periods presented, the Company determined that redemption was probable and measured the carrying value of the contingently redeemable NCI at its estimated redemption value. The NCI can be redeemed at a purchase price to be determined through an independent appraisal process conducted in accordance with the terms of the agreement, or at a negotiated price (the “redemption value”) and therefore, the redemption value on exercise may materially differ from the redemption value as at December 31, 2015. The Company has the option to elect to pay the purchase price in either cash or shares of the Company, subject to the Company obtaining all relevant security exchange and regulatory consents and approvals.

The redemption value of the contingently redeemable NCI was determined based on a blended analysis of a capitalized cash flow approach and a market value approach towards determining an estimated fair value of RBFS, with adjustments for relevant market participant data. The Company has estimated the redemption value using the capitalized cash flow approach, with significant inputs including the capitalization multiple, which is based on an estimated weighted average cost of capital of 15%, as well as a long-term earnings growth for RBFS of 4% and foreign exchange rates. Significant estimates in the market value approach include identifying similar companies with comparable business factors to RBFS, and implied valuation multiples for these companies.

The estimation of fair value as a basis of determining the redemption value required management to make significant judgments, estimates, and assumptions as of the reporting date. Those judgments, estimates, and assumptions could vary significantly between the reporting date and when the call and put options become exercisable in April 2016.

Ritchie Bros. 10

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

8. Earnings per share attributable to shareholders

	Three months ended						Six months ended
	June 30, 2015						June 30, 2015
	Net				Per share		Net				Per share
	earnings		Shares		amount		earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	45,083		106,506,916	$	0.42	$	68,860		106,993,228	$	0.64
Effect of dilutive securities:
Stock options		-		471,145		-		-		367,075		-
Diluted earnings per share attributable to shareholders	$	45,083		106,978,061	$	0.42	$	69,920		107,390,303	$	0.64

	Three months ended							Six months ended
	June 30, 2014							June 30, 2014
	Net				Per share			Net				Per share
	earnings		Shares		amount			earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	37,008		107,225,226	$	0.35		$	50,182		107,136,745	$	0.47
Effect of dilutive securities:
Stock options		-		393,089		(0.01	)		-		364,717		-
Diluted earnings per share attributable to shareholders	$	37,008		107,618,315	$	0.35		$	50,182		107,501,462	$	0.47

For the three and six months ended June 30, 2015, stock options to purchase 72,309 and 253,622 common shares, respectively were outstanding but were excluded from the calculation of diluted earnings per share as they were anti-dilutive (2014: 789,949 and 1,100,795 for three months and six months ended June 30, 2014).

Ritchie Bros. 11

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

9. Supplemental cash flow information

	Six months ended June 30,
	2015			2014
Restricted cash	$	(60,394	)	$	(35,773	)
Trade and other receivables		(55,670	)		(62,949	)
Inventory		7,261			(813	)
Advances against auction contracts		17,004			(14,127	)
Prepaid expenses and deposits		1,289			(2,263	)
Income taxes receivable		(3,175	)		(6,513	)
Auction proceeds payable		149,860			121,375
Trade and other payables		(23,545	)		(581	)
Income taxes payable		4,950			(4,200	)
Share unit liabilities		3,643			2,522
Other		2,642			(2,382	)
Net changes in operating assets and liabilities	$	43,865		$	(5,704	)

	Six months ended June 30,
	2015		2014
Interest paid, net of interest capitalized	$	2,619	$	2,231
Interest received		1,527		1,121
Net income taxes paid		26,057		26,339
Non-cash transactions:
Non-cash purchase of property, plant and equipment under capital lease		-		1,578

Ritchie Bros. 12

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

10. Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement or disclosure, as explained in the Company’s audited annual financial statements.

	June 30, 2015					December 31, 2014
		Carrying		Fair		Carrying		Fair
	Category	amount		value		amount		value
Fair values disclosed
Recurring:
Cash and cash equivalents	Level 1	$	214,209	$	214,209	$	139,815	$	139,815
Restricted cash	Level 1		151,036		151,036		93,274		93,274
Short-term debt	Level 2		13,773		13,773		7,839		7,839
Current portion of long-term debt	Level 2		47,994		47,994		-		-
Long-term debt	Level 2		57,210		59,444		110,846		114,532
Non-recurring:
Japanese assets:
Land and improvements	Level 3	$	14,261	$	N/A	$	14,719	$	16,150
Auction building	Level 3		4,178		N/A		4,368		4,779

The carrying value of the Company‘s cash and cash equivalents, trade and other current receivables, advances against auction contracts, auction proceeds payable, trade and other payables, and current portion of long-term debt and short-term debt approximate their fair values due to their short terms to maturity.

The fair values of long-term debt are determined through the calculation of each liability‘s present value using market rates of interest at period close.

During the year ended December 31, 2014, the Company recognized an impairment loss on its auction site property located in Narita, Japan. The impairment loss was for the land and improvements and the auction building (the “Japanese assets“). Management assessed the recoverable amounts of the Japanese assets when results of an assessment of the Japan auction operations and performance of that auction site indicated impairment, and management concluded that the step 1 undiscounted cash flow resulted in recoverable amounts below the carrying value of the Japanese assets. The fair values of the Japanese assets were determined to be $16,150,000 for the land and improvements and $4,779,000 for the auction building based on the fair value less costs of disposal.

The Company performed a valuation of the Japanese assets as at December 31, 2014. The fair value of the land and improvements was determined based on comparable data in similar regions and relevant information regarding recent events impacting the local real-estate market (Level 3 inputs). The fair value of the auction building was determined based on a depreciated asset cost model with adjustments for relevant market participant data based on the Company‘s experience with disposing of similar auction buildings and current real estate transactions in similar regions (Level 3 inputs).

Ritchie Bros. 13

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

10. Fair value measurement (continued)

Determination of the recoverable amount of the Japanese assets involved estimating any costs that would be incurred if the assets were disposed of, including brokers‘ fees, costs to prepare the Japanese assets for sale and other selling fees. In determining these costs, management assumed that any costs required to prepare the Japanese assets for sale could be estimated based on current market rates for brokers‘ fees and management‘s experience with disposing of similar auction sites, taking into consideration the relative newness of the Japan auction site (Level 3 inputs).

The impaired Narita land and improvements and auction building form part of the Company‘s Core Auction reportable segment.

11. Inventory

Every period end inventory is reviewed to ensure that it is recorded at the lower of cost and net realizable value. During the three and six months ended June 30, 2015, the Company recorded an inventory write down of $253,000 and $313,000, respectively (2014: $469,000 and $469,000).

Of inventory held at June 30, 2015, 100% is expected to be sold prior to the end of September 2015 (December 31, 2014: 97% sold prior to the end of March 2015, with the remainder expected to sold by the end of June 2015).

Ritchie Bros. 14

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

12. Assets held for sale

At June 30, 2015, the Company held land for sale in Edmonton and London, Canada.

Balance, December 31, 2014	$	1,668
Reclassified from property, plant and equipment		1,597
Disposal		(1,651	)
Foreign exchange movement		(51	)
Balance, June 30, 2015	$	1,563

13. Equity-accounted investments

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

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

	Ownership			June 30		December 31
	percentage			2015		2014
Cura Classis entities		48	%	$	3,282	$	3,001

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

Ritchie Bros. 15

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

14. Debt

	Carrying value
	June 30,		December 31,
	2015		2014
Short-term debt	$	13,773	$	7,839
Long-term debt:
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 4.225%, due in quarterly installments of interest only,   26,802 with the full amount of the principal due in May 2022.	$	27,210	$	29,257
Term loan, denominated in United States dollars, unsecured, bearing interest at 3.59%, due in quarterly installments of interest only,   30,000 with the full amount of the principal due in May 2022.		30,000		30,000
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 6.385%, due in quarterly installments of interest only, with the full amount of the principal due in May 2016.		47,994		51,589
	$	105,204	$	110,846
Total debt	$	118,977	$	118,685
Total long-term debt:
Current portion	$	47,994	$	-
Non-current portion		57,210		110,846
	$	105,204	$	110,846

At June 30, 2015, current portion of long-term debt consisted of a Canadian dollar 60 million term loan under the Company’s uncommitted, non-revolving credit facility and borrowings under the Company’s committed, revolving credit facility.

As at June 30, 2015, short-term debt is comprised of drawings in different currencies on the Company’s revolving credit facility of $285,000,000 (December 31, 2014: $285,000,000), and have a weighted average interest rate of 5.5% (December 31, 2014: 1.83%).

Ritchie Bros. 16

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

15. Stockholders’ equity and dividends

Preferred shares

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

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

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

Share repurchase

During March 2015, 1,900,000 common shares were repurchased at a weighted average share price of $24.98 per share. The repurchased shares were cancelled on March 26, 2015.

Dividends

Declared and paid

The Company declared and paid the following dividends during the six months ended June 30, 2015 and 2014:

	Declaration date	Dividend per share		Record date	Total dividends		Payment date
Six months ended June 30, 2015:
First quarter 2015	May 7, 2015	$	0.1400	May 29, 2015		14,955	June 19, 2015
Second quarter 2015	August 6, 2015		0.1600	September 4, 2015		17,147	September 25, 2015
Six months ended June 30, 2014:
First quarter 2014	May 2, 2014		0.1300	May 23, 2014		13,942	June 13, 2014
Second quarter 2014	August 5, 2014		0.1400	August 22, 2014		15,028	September 12, 2014

16. Share-based payments

Share-based payments consisted of the following compensation costs recognized in selling, general and administrative expenses as follows:

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Stock option compensation expense	$	1,333	$	631	$	2,056	$	1,581
Share unit expense		2,902		1,258		3,919		2,522
Employee share purchase plan – employer contribution		323		320		631		630
	$	4,558	$	2,209	$	6,606	$	4,733

Ritchie Bros. 17

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

16. Share-based payments (continued)

Stock option plan

Stock option activity for the six months ended June 30, 2015 and the year ended December 31, 2014 is presented below:

	June 30, 2015					December 31, 2014
	Common shares			WA exercise		Common shares			WA exercise
	under option			price		under option			Price
Outstanding, beginning of period		3,897,791		$	22.09		3,749,574		$	21.09
Granted		839,942			25,28		837,364			23.60
Exercised		(1,319,634	)		21.18		(663,152	)		18.28
Forfeited		(63,719	)		22.87		(25,995	)		23.26
Outstanding, end of period		3,354,380		$	23.23		3,897,791		$	22.09
Exercisable, end of period		1,802,863		$	22.23		2,483,530		$	21,65

The options outstanding at June 30, 2015 expire on dates ranging to June 8, 2025. The weighted average share price of options exercised during the six months ended June 30, 2015 was $27.76 per option (2014 $23.92).

The fair value of the stock option grants was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

Six months ended June 30,	2015			2014
Risk free interest rate		1.8	%		1.7	%
Expected dividend yield		2.18	%		2.31	%
Expected lives of the stock options		5 years			5 years
Expected volatility		26.3	%		29.2	%

Risk free interest rate is the US Treasury Department five year treasury yield curve rate on the date of the grant. Expected dividend yield assumes a continuation of the most recent dividend payment for the coming quarterly dividends. Expected lives of options is based on the age of the options on the exercise date over the past five years. Expected volatility is based on the historical share price volatility over the past five years.

The weighted average grant date fair value of options granted during the six months ended June 30, 2015 was $5.36 per option (2014 - $5.09). The compensation expense arising from option grants is amortized over the relevant vesting periods of the underlying options.

As at June 30, 2015, the unrecognized stock-based compensation cost related to the non-vested stock options was $5,806,000, which is expected to be recognized over a weighted average period of 2.9 years. Cash received from stock-based award exercises for the six months ended June 30, 2015 was $27,946,000 (2014: $5,093,000).

Share unit plans

During the six months ended June 30, 2015, the Company granted share units under two new performance share unit (“PSU”) plans, a senior executive PSU plan and an employee PSU plan. The two new plans have identical terms and conditions, with the exception of clauses under the senior executive PSU plan that address the treatment of recipients’ PSUs in the event of a change of control of the Company.

Ritchie Bros. 18

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

16. Share-based payments (continued)

Under the plans, the number of PSUs that vest is conditional upon specified market and non-market vesting conditions being met. The market vesting condition is based on the relative performance of the Company’s share price in comparison to the performance of a pre-determined portfolio of other companies’ share prices. The non-market vesting conditions are based on the achievement of specific performance measures and can result in participants earning between 0% and 200% of the target number of PSUs granted.

Both new plans entitle the grant recipient to a payment equal to the dividend-adjusted number of PSUs vested multiplied by the VWAP of the Company’s common shares reported by the New York Stock Exchange for the twenty days prior to vest date. Unlike the Company’s other share unit plans, the two new PSU plans give the Company the option of settling in either cash or equity, with equity-settlement subject to shareholder approval. Shareholder approval for equity-settlement of the new PSUs had not been sought out or obtained as at June 30, 2015. As such, the Company has determined that there is a present obligation to settle in cash, and has accounted for the two new PSU plans as cash-settled share-based payment transactions.

The WA grant date fair value of the 199,938 PSUs granted under the new plans during the six months ended June 30, 2015, excluding the effect of dividend adjustments, was $24.33. These PSUs are subject to market vesting conditions and their fair value at grant date was estimated using a binomial model with the following assumptions:

	2015
Risk free interest rate		1.3	%
Expected dividend yield		2.17	%
Expected lives of the PSUs		3 years
Expected volatility		29.4	%
Average expected volatility of comparable companies		32.8	%

The WA grant date fair value of the 18,743 deferred share units (“DSUs”) granted under the DSU plan to members of the Board of Directors during the six months ended June 30, 2015, excluding the effect of dividend adjustments, was $25.77 (2014 - $22.61). These DSUs are not subject to market vesting conditions and their fair value was estimated using the 20-day volume weighted average price of the Company’s common shares listed on the New York Stock Exchange.

The total market value of share units vested and released during the six months ended June 30, 2015 was $1,253,000 (2014: $1,377,000). As at June 30, 2015, the Company had a total share unit liability of $10,328,000 (2014: $4,466,000) in respect of share units under the PSU, RSU and DSU plans described herein.

The compensation expense arising from share unit grants is amortized over the relevant vesting periods of the underlying units.

Ritchie Bros. 19

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and six months ended June 30, 2015 and 2014

17. Contingencies

(a) Legal and other claims

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

(b) Guarantee contracts

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

At June 30, 2015 there was $29,949,000 of industrial equipment guaranteed under contract, all of which is expected to be sold prior to the end of June 2016 (December 31, 2014 - $85,967,000 all of which sold prior to the end of May 2015).

At June 30, 2015 there was $17,718,000 of agricultural equipment guaranteed under contract, of which 90% is expected to be sold prior to the end of September 2015, with the remainder to be sold prior to the end of November 2015 (December 31, 2014 - $15,793,000 of which 92% is expected to be sold prior to the end of April 2015, with the remainder to be sold by June 2015).

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

Ritchie Bros. 20

EX-99.4

EXHIBIT 99.4

Condensed Consolidated Interim Financial Statements of

Ritchie Bros. Auctioneers Incorporated

for the three and nine months ended September 30, 2015

The accompanying unaudited condensed consolidated interim financial statements do not include all information and footnotes required for a complete set of annual financial statements prepared in accordance with United States generally accepted accounting principles. However, in the opinion of management, all adjustments (which consist only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the relevant periods have been made. Results for the interim periods are not necessarily indicative of the results to be expected for the year or any other period. These financial statements should be read in conjunction with the summary of accounting policies and the notes to the audited annual consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, a copy of which has been filed with the U.S. Securities and Exchange Commission. These policies have been applied on a consistent basis.

Condensed Consolidated Interim Income Statements

(Expressed in thousands of United States dollars, except where noted)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2015			2014			2015			2014
Revenues (note 5)	$	109,318		$	102,217		$	380,413		$	342,640
Direct expenses, excluding depreciation and amortization		12,045			12,450			40,681			40,366
		97,273			89,767			339,732			302,274
Selling, general and administrative expenses		58,170			58,556			187,165			180,041
Depreciation and amortization expenses		10,017			11,406			31,402			32,982
Gain on disposition of property, plant and equipment		(234	)		(3,104	)		(1,200	)		(3,433	)
Impairment loss (note 6)		-			8,084			-			8,084
Foreign exchange loss (gain)		718			(1,078	)		(2,051	)		(2,157	)
Operating income		28,602			15,903			124,416			86,757
Other income (expense):
Interest income		548			523			2,075			1,648
Interest expense		(1,239	)		(1,278	)		(3,816	)		(4,042	)
Equity income		363			144			769			323
Other, net		739			599			2,370			1,915
		411			(12	)		1,398			(156	)
Income before income taxes		29,013			15,891			125,814			86,601
Income tax expense (recovery) (note 7):
Current		8,700			5,708			38,778			23,740
Deferred		(934	)		540			(4,167	)		2,247
		7,766			6,248			34,611			25,987
Net income	$	21,247		$	9,643		$	91,203		$	60,614
Net income attributable to:
Stockholders	$	20,825		$	9,382		$	89,685		$	59,564
Non-controlling interests		422			261			1,518			1,050
	$	21,247		$	9,643		$	91,203		$	60,614
Earnings per share attributable to  stockholders (note 9):
Basic	$	0.19		$	0.09		$	0.84		$	0.56
Diluted	$	0.19		$	0.09		$	0.83		$	0.55
Weighted average number of  shares outstanding:
Basic		107,137,417			107,338,795			107,041,819			107,204,835
Diluted		107,517,888			107,735,915			107,433,359			107,580,353

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 1

Condensed Consolidated Interim Statements of Comprehensive Income

(Expressed in thousands of United States dollars)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2015			2014			2015			2014
Net income	$	21,247		$	9,643		$	91,203		$	60,614
Other comprehensive loss, net of income tax:
Foreign currency translation adjustment		(10,817	)		(23,399	)		(33,903	)		(19,968	)
Total comprehensive income (loss)	$	10,430		$	(13,756	)	$	57,300		$	40,646
Total comprehensive income (loss) attributable to:
Stockholders		10,115			(13,947	)		56,075			39,636
Non-controlling interests		315			191			1,225			1,010
	$	10,430		$	(13,756	)	$	57,300		$	40,646

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 2

Condensed Consolidated Interim Balance Sheets

(Expressed in thousands of United States dollars, except share data)

(Unaudited)

	September 30,			December 31,
	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	206,555		$	139,815
Restricted cash		139,219			93,274
Trade and other receivables		135,481			76,062
Inventory (note 12)		42,715			42,750
Advances against auction contracts		2,488			26,180
Prepaid expenses and deposits		10,179			11,587
Assets held for sale (note 13)		3,106			1,668
Income taxes receivable		7,463			3,237
		547,206			394,573
Property, plant and equipment		533,426			580,701
Equity accounted investments (note 14)		3,511			3,001
Other non-current assets		3,249			5,504
Intangible assets, net		41,475			45,504
Goodwill		80,944			82,354
Deferred tax assets		8,399			9,873
	$	1,218,210		$	1,121,510
Liabilities and Equity
Current liabilities:
Auction proceeds payable	$	239,230		$	109,378
Trade and other payables		108,449			126,738
Income taxes payable		15,272			10,136
Short-term debt (note 15)		9,743			7,839
Current portion of long-term debt (note 15)		45,056			-
		417,750			254,091
Long-term debt (note 15)		55,541			110,846
Share unit liabilities		8,739			5,844
Other non-current liabilities		6,001			7,436
Deferred tax liabilities		26,973			34,074
		515,004			412,291
Contingencies (note 18)
Contingently redeemable non-controlling interest (note 8)		16,932			17,287
Stockholders’ equity (note 16):
Share capital:
Common stock; no par value, unlimited shares   authorized, issued and outstanding: 107,167,770 shares   (December 31, 2014 – 107,687,935)		130,822			141,257
Additional paid-in capital		26,967			31,314
Retained earnings		578,845			536,111
Accumulated other comprehensive loss		(50,360	)		(16,750	)
Stockholders’ equity		686,274			691,932
	$	1,218,210		$	1,121,510

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 3

Condensed Consolidated Interim Statements of Changes in Equity

(Expressed in thousands of United States dollars, except where noted)

(Unaudited)

	Attributable to stockholders
													Accumulated						Contingently
	Common stock						Additional						Other						Redeemable
	Number of						Paid-In			Retained			Comprehensive			Total			Non-controlling
	Shares			Amount			Capital			Earnings			Loss			Equity			interest
Balance, December 31, 2014		107,687,935		$	141,257		$	31,314		$	536,111		$	(16,750	)	$	691,932		$	17,287
Net income		-			-			-			89,685			-			89,685			1,518
Change in value of contingently redeemable non-controlling interest		-			-			-			240			-			240			(240	)
Other comprehensive loss		-			-			-			-			(33,610	)		(33,610	)		(293	)
		-			-			-			89,925			(33,610	)		56,315			985
Stock option exercises		1,379,835			37,054			(7,803	)		-			-			29,251			-
Stock option tax adjustment		-			-			362			-			-			362			-
Stock option compensation expense (note 17)		-			-			3,094			-			-			3,094			-
Shares repurchased (note 16)		(1,900,000	)		(47,489	)		-			-			-			(47,489	)		-
Cash dividends paid		-			-			-			(47,191	)		-			(47,191	)		(1,340	)
Balance, September 30, 2015		107,167,770		$	130,822		$	26,967		$	578,845		$	(50,360	)	$	686,274		$	16,932

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 4

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in thousands of United States dollars)

(Unaudited)

	Nine months ended
	September 30,
	2015			2014
Cash provided by (used in):
Operating activities:
Net income	$	91,203		$	60,614
Adjustments for items not affecting cash:
Depreciation and amortization expenses		31,402			32,982
Inventory write down		480			2,044
Impairment loss (note 6)		-			8,084
Stock option compensation expense (note 17)		3,094			2,664
Deferred income tax expense (recovery)		(4,167	)		2,247
Equity income less dividends received		(769	)		(323	)
Unrealized foreign exchange gain (loss)		1,463			(931	)
Gain on disposition of property, plant and equipment		(1,200	)		(3,433	)
		30,303			43,334
Net changes in operating assets and liabilities (note 10)		36,922			(25,174	)
Net cash provided by (used in) operating activities		158,428			78,774
Investing activities:
Property, plant and equipment additions		(12,643	)		(18,014	)
Acquisition of equity investments
Intangible asset additions		(4,248	)		(10,656	)
Proceeds on disposition of property, plant and equipment		4,700			8,483
Other, net		-			(514	)
Net cash used in investing activities		(12,191	)		(20,701	)
Financing activities:
Issuances of share capital		29,251			5,596
Share repurchase		(47,489	)		-
Dividends paid to stockholders		(47,191	)		(42,885	)
Dividends paid to contingently redeemable non-controlling interests		(1,340	)		-
Proceeds from short-term debt		8,381			45,189
Repayment of short-term debt		(6,373	)		(4,400	)
Repayment of long-term debt		-			(58,409	)
Repayment of finance lease obligations		(1,599	)		(1,368	)
Other, net		75			(521	)
Net cash used in financing activities		(66,285	)		(56,798	)
Effect of changes in foreign currency rates on cash and cash equivalents		(13,212	)		(7,971	)
Increase (decrease) in cash and cash equivalents		66,740			(6,696	)
Cash and cash equivalents, beginning of period		139,815			114,596
Cash and cash equivalents, end of period	$	206,555		$	107,900

See supplemental cash flow information (note 10)

See accompanying notes to condensed consolidated interim financial statements.

Ritchie Bros. 5

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

1. Basis of preparation

The accompanying unaudited condensed consolidated interim financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). They include the accounts of Ritchie Bros. Auctioneers Incorporated and its subsidiaries (collectively referred to as the “Company”) from their respective dates of formation or acquisition. All significant intercompany balances and transactions have been eliminated.

Certain information and footnote disclosure required by U.S. GAAP for complete annual financial statements have been omitted and, therefore, these condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Previously, the Company prepared its consolidated financial statements under International Financial Reporting Standards (“IFRS”), for reporting as permitted by security regulators in Canada and the United States under the status of a Foreign Private Issuer as defined by the United States Securities and Exchange Commission (“SEC”). At the end of the second quarter of 2015, the Company determined that it no longer qualified as a foreign private issuer under the SEC rules. As a result, beginning January 1, 2016 the Company is required to report with the SEC on domestic forms and comply with domestic company rules in the United States. The transition to U.S. GAAP was made retrospectively for all periods from the Company’s inception. In conjunction with the transition, the Company is refiling the interim financial information included herein to comply with Canadian securities regulations.

2. Significant accounting policies

There have been no changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

(a) Adoption of new accounting pronouncements

During fiscal year 2015, the Company transitioned its accounting from IFRS to U.S. GAAP. The transition was made retrospectively for all periods presented. The transitional included the adoption of any relevant accounting pronouncements effective for fiscal years commencing January 1, 2015.

(i) In January 2015, the Company early adopted Accounting Standards Update (“ASU”) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which requires the Company to measure inventory at the lower of cost or net realizable value, which consists of the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completions, disposal, and transportation. The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

Ritchie Bros. 6

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

2. Significant accounting policies (continued)

(a) Adoption of new accounting pronouncements (continued)

(ii) In November 2015, the Financial Accounting Standards Board, (“FASB”) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(iii) In April 2015, the FSAB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual periods beginning after December 15, 2015. This standard was adopted retrospectively in the Company’s consolidated financial statements.

(b) Recent accounting pronouncements not yet adopted

(i) In July 2015, the Financial Accounting Standards Board, (“FASB”), delayed the effective date of ASU 2014-09, Revenue from Contracts with Customers by one year. Reporting entities may choose to adopt the standard as of the original effective date. Based on its outreach to various stakeholders and the forthcoming amendments to ASU 2014-09, the FASB decided that a deferral is necessary to provide adequate time to effectively implement the new revenue standard. ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

(ii) In February 2015, the FASB issued ASU 2015-02, Consolidation – Amendments to the Consolidation Analysis. ASU 2015-02 changes the evaluation of whether limited partnerships, and similar legal entities, are variable interest entities, or VIEs, and eliminates the presumption that a general partner should consolidate a limited partnership that is a voting interest entity. The new guidance also alters the analysis for determining when fees paid to a decision maker or service provider represent a variable interest in a VIE and how interests of related parties affect the primary beneficiary determination. ASU 2015-02 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The new standard allows early adoption, including early adoption in an interim period. The Company is evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

(iii) In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard is effective for fiscal years beginning after December 15, 2015. Early application is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

Ritchie Bros. 7

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

3. Seasonality of operations

The Company's operations are both seasonal and event driven. Revenues tend to be highest during the second and fourth calendar quarters. The Company generally conducts more auctions during these quarters than during the first and third calendar quarters. Late December through mid-February and mid-July through August are traditionally less active periods.

4. Segmented information

The Company’s principal business activity is the sale of industrial equipment and other assets at auctions. The Company’s operations are comprised of two reportable segments as determined by their differing service delivery model, these are:

· Core Auction segment, a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding; and

· EquipmentOne segment, a secure online marketplace that facilitates private equipment transactions.

The accounting policies of the segments are similar to those described in the significant accounting policies in note 2. The Chief Operating Decision Maker evaluates each segment’s performance based on earnings (loss) from operations. The significant non-cash items included in segment earnings (loss) from operations is depreciation and amortization.

	Three months ended									Nine months ended
	September 30, 2015									September 30, 2015
	Core			Equipment-						Core			Equipment-
	Auction			One			Consolidated			Auction			One			Consolidated
Revenues	$	105,421		$	3,897		$	109,318		$	369,711		$	10,702		$	380,413
Direct expenses		(12,045	)		-			(12,045	)		(40,681	)		-			(40,681	)
Selling, general and administrative expenses expenses		(54,797	)		(3,373	)		(58,170	)		(177,196	)		(9,969	)		(187,165	)
Depreciation and amortization		(9,357	)		(660	)		(10,017	)		(29,025	)		(2,377	)		(31,402	)
Impairment loss		-			-			-			-			-			-
	$	29,222		$	(136	)	$	29,086		$	122,809		$	(1,644	)	$	121,165
Gain on disposition of property, plant and  equipment  equipment								234									1,200
Foreign exchange (loss) gain								(718	)								2,051
Operating income							$	28,602								$	124,416
Equity income								363									769
Other and income tax expenses								(7,718	)								(33,982	)
Net income							$	21,247								$	91,203

Ritchie Bros. 8

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

4. Segmented information (continued)

	Three months ended									Nine months ended
	September 30, 2014									September 30, 2014
	Core			Equipment-						Core			Equipment-
	Auction			One			Consolidated			Auction			One			Consolidated
Revenues	$	98,911		$	3,306		$	102,217		$	333,597		$	9,043		$	342,640
Direct expenses		(12,450	)		-			(12,450	)		(40,366	)		-			(40,366	)
Selling, general and administrative expenses expenses		(54,585	)		(3,971	)		(58,556	)		(168,078	)		(11,963	)		(180,041	)
Depreciation and amortization		(10,495	)		(911	)		(11,406	)		(30,238	)		(2,744	)		(32,982	)
Impairment loss		(8,084	)		-			(8,084	)		(8,084	)		-			(8,084	)
	$	13,297		$	(1,576	)	$	11,721		$	86,831		$	(5,664	)	$	81,167
Gain on disposition of property, plant and  equipment  equipment								3,104									3,433
Foreign exchange gain								1,078									2,157
Operating income							$	15,903								$	86,757
Equity income								144									323
Other and income tax expenses								(6,404	)								(26,466	)
Net income							$	9,643								$	60,614

The Chief Operating Decision Maker does not evaluate the performance of its operating segments based on segment assets and liabilities. The Company does not classify liabilities on a segmented basis.

5. Revenues

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

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Commissions	$	83,648	$	80,193	$	301,379	$	271,051
Fees		25,670		22,024		79,034		71,589
	$	109,318	$	102,217	$	380,413	$	342,640

Net profits on inventory sales included in commissions are:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Revenue from inventory sales	$	105,678		$	153,016		$	409,105		$	495,798
Cost of inventory sold		(97,745	)		(143,087	)		(372,577	)		(463,107	)
	$	7,933		$	9,929		$	36,528		$	32,691

Ritchie Bros. 9

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

6. Impairment loss

During the nine months ended September 30, 2014, the Company recognized a total impairment loss of $8,084,000 on its auction site property located in Narita, Japan. The impairment loss consisted of $6,094,000 on the land and improvements and $1,990,000 on the auction building (the “Japanese assets“). Management assessed the recoverable amounts of the Japanese assets when results of an assessment of the Japan auction operations and performance of that auction site indicated impairment, and management concluded that the step 1 undiscounted cash flow resulted in recoverable amounts below the carrying value of the Japanese assets. The fair values of the Japanese assets were determined to be $16,150,000 for the land and improvements and $4,779,000 for the auction building based on the fair value less costs of disposal.

The Company performed a valuation of the Japanese assets as at September 30, 2014. The fair value of the land and improvements was determined based on comparable data in similar regions and relevant information regarding recent events impacting the local real-estate market (Level 3 inputs). The fair value of the auction building was determined based on a depreciated asset cost model with adjustments for relevant market participant data based on the Company‘s experience with disposing of similar auction buildings and current real estate transactions in similar regions (Level 3 inputs).

Determination of the recoverable amount of the Japanese assets involved estimating any costs that would be incurred if the assets were disposed of, including brokers‘ fees, costs to prepare the Japanese assets for sale and other selling fees. In determining these costs, management assumed that any costs required to prepare the Japanese assets for sale could be estimated based on current market rates for brokers‘ fees and management‘s experience with disposing of similar auction sites, taking into consideration the relative newness of the Japan auction site (Level 3 inputs).

The impaired Narita land and improvements and auction building form part of the Company‘s Core Auction reportable segment.

7. Income taxes

The Company’s consolidated effective tax rate in respect of operations for the three and nine months ended September 30, 2015 was 26.8% and 27.5% (2014: 39.3% and 30.0%).

Ritchie Bros. 10

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

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

The Company holds a 51% interest in Ritchie Bros. Financial Services (“RBFS”), an entity that provides loan origination services to enable the Company’s auction customers to obtain financing from third party lenders. As a result of the Company’s involvement with RBFS, the Company is exposed to risks related to the recovery of the net assets of RBFS as well as liquidity risks associated with the put option discussed below.

The Company has determined RBFS is a variable interest entity because the Company provides subordinated financial support to RBFS and because the Company’s voting interest is disproportionately low in relation to its economic interest in RBFS while substantially all the activities of RBFS involve or are conducted on behalf of the Company. The Company has determined it is the primary beneficiary of RBFS as it is part of a related party group that has the power to direct the activities that most significantly impact RBFS’s economic performance, and although no individual member of that group has such power, the Company represents the member of the related party group that is most closely associated with RBFS.

The Company and the non-controlling interest (“NCI”) holders each hold options pursuant to which the Company may acquire, or be required to acquire, the NCI holders’ 49% interest in RBFS. These call and put options become exercisable in April 2016. As a result of the existence of the put option, the NCI is accounted for as a contingently redeemable equity instrument (the “contingently redeemable NCI”).

At all reporting periods presented, the Company determined that redemption was probable and measured the carrying value of the contingently redeemable NCI at its estimated redemption value. The NCI can be redeemed at a purchase price to be determined through an independent appraisal process conducted in accordance with the terms of the agreement, or at a negotiated price (the “redemption value”) and therefore, the redemption value on exercise may materially differ from the redemption value as at December 31, 2015. The Company has the option to elect to pay the purchase price in either cash or shares of the Company, subject to the Company obtaining all relevant security exchange and regulatory consents and approvals.

The redemption value of the contingently redeemable NCI was determined based on a blended analysis of a capitalized cash flow approach and a market value approach towards determining an estimated fair value of RBFS, with adjustments for relevant market participant data. The Company has estimated the redemption value using the capitalized cash flow approach, with significant inputs including the capitalization multiple, which is based on an estimated weighted average cost of capital of 15%, as well as a long-term earnings growth for RBFS of 4% and foreign exchange rates. Significant estimates in the market value approach include identifying similar companies with comparable business factors to RBFS, and implied valuation multiples for these companies.

The estimation of fair value as a basis of determining the redemption value required management to make significant judgments, estimates, and assumptions as of the reporting date. Those judgments, estimates, and assumptions could vary significantly between the reporting date and when the call and put options become exercisable in April 2016.

Ritchie Bros. 11

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

9. Earnings per share attributable to shareholders

	Three months ended						Nine months ended
	September 30, 2015						September 30, 2015
	Net				Per share		Net				Per share
	earnings		Shares		amount		earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	20,825		107,137,417	$	0.19	$	89,685		107,041,819	$	0.84
Effect of dilutive securities:
Stock options		-		380,471		-		-		391,540		(0.01	)
Diluted earnings per share attributable to shareholders	$	20,825		107,517,888	$	0.19	$	89,685		107,433,359	$	0.83

	Three months ended						Nine months ended
	September 30, 2014						September 30, 2014
	Net				Per share		Net				Per share
	earnings		Shares		amount		earnings		Shares		amount
Basic earnings per share attributable to shareholders	$	9,382		107,338,795	$	0.09	$	59,564		107,204,835	$	0.56
Effect of dilutive securities:
Stock options		-		397,120		-		-		375,518		(0.01	)
Diluted earnings per share attributable to shareholders	$	9,382		107,735,915	$	0.09	$	59,564		107,580,353	$	0.55

For the three and nine months ended September 30, 2015, stock options to purchase 113,073 and 206,773 common shares, respectively were outstanding but were excluded from the calculation of diluted earnings per share as they were anti-dilutive (2014: 1,204,624 and 1,135,405 three months and nine months ended respectively).

Ritchie Bros. 12

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

10. Supplemental cash flow information

	Nine months ended
	September 30,
	2015			2014
Restricted cash	$	(54,547	)	$	(11,000	)
Trade and other receivables		(63,469	)		(96,663	)
Inventory		(1,565	)		(21,984	)
Advances against auction contracts		23,146			(5,045	)
Prepaid expenses and deposits		711			(4,814	)
Income taxes receivable		(4,226	)		(6,859	)
Income taxes payable		5,520			329
Auction proceeds payable		140,728			140,805
Trade and other payables		(15,754	)		(20,915	)
Share unit liabilities		3,631			3,874
Other		2,747			(2,902	)
Net changes in operating assets and liabilities	$	36,922		$	(25,174	)

	Nine months ended September 30,
	2015		2014
Interest paid, net of interest capitalized	$	3,856	$	3,574
Interest received		2,072		1,644
Net income taxes paid		32,775		27,597
Non-cash transactions:
Non-cash purchase of property, plant and equipment under capital lease		53		1,654

Ritchie Bros. 13

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

11. Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement or disclosure, as explained in the Company’s audited annual financial statements.

	September 30, 2015					December 31, 2014
		Carrying		Fair		Carrying		Fair
	Category	amount		value		amount		value
Fair values disclosed
Recurring:
Cash and cash equivalents	Level 1	$	206,555	$	206,555	$	139,815	$	139,815
Restricted cash	Level 1		139,219		139,219		93,274		93,274
Short-term debt	Level 2		9,743		9,743		7,839		7,839
Current portion of long- term debt	Level 2		45,056		45,056		-		-
Long-term debt	Level 2		55,541		57,357		110,846		114,532
Non-recurring:
Japanese assets:
Land and improvements	Level 3	$	14,380	$	N/A	$	14,719	$	16,150
Auction building	Level 3		4,186		N/A		4,368		4,779

The carrying value of the Company‘s cash and cash equivalents, trade and other current receivables, advances against auction contracts, auction proceeds payable, trade and other payables, short-term debt and current portion of long-term debt approximate their fair values due to their short terms to maturity.

The fair values of long-term debt are determined through the calculation of each liability‘s present value using market rates of interest at period close.

12. Inventory

At each period end, inventory is reviewed to ensure that it is recorded at the lower of cost and net realizable value. During the three and nine months ended September 30, 2015, the Company recorded inventory write downs of $167,000 and $480,000, respectively (September 30, 2014: $1,575,000 and $2,044,000).

Of inventory held at September 30, 2015, 86% is expected to be sold prior to the end of December 31, 2015, with the remainder to be sold by the end of March 2016 (December 31, 2014: 100% sold by the end of June 2015).

Ritchie Bros. 14

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

13.         Assets held for sale

At September 30, 2015, the majority of assets held for sale related to land located in Edmonton, Canada. Property held in London, Canada was sold during the nine months ended September 30, 2015.

Balance, December 31, 2014	$	1,668
Reclassified from property, plant and equipment		2,719
Site preparation costs		1,079
Disposal		(2,146	)
Foreign exchange movement		(214	)
Balance, September 30, 2015	$	3,106

14. Equity-accounted investments

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

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

	Ownership			September 30		December 31
	percentage			2015		2014
Cura Classis entities		48	%	$	3,511	$	3,001

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

Ritchie Bros. 15

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

15. Debt

	Carrying value
	September 30,		December 31,
	2015		2014
Short-term debt	$	9,743	$	7,839
Long-term debt:
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 4.225%, due in quarterly installments of interest only,  with the full amount of the principal due in May 2022.	$	25,541	$	29,257
Term loan, denominated in United States dollars, unsecured, bearing interest at 3.59%, due in quarterly installments of interest only,  with the full amount of the principal due in May 2022.		30,000		30,000
Term loan, denominated in Canadian dollars, unsecured, bearing interest at 6.385%, due in quarterly installments of interest only, with the full amount of the principal due in May 2016.		45,056		51,589
	$	100,597	$	110,846
Total debt	$	110,340	$	118,685
Total long-term debt:
Current portion debt	$	45,056	$	-
Non-current portion debt		55,541		110,846
	$	100,597	$	110,846

At September 30, 2015, current portion of long-term debt consisted of a Canadian dollar 60 million term loan under the Company’s uncommitted, non-revolving credit facility and borrowings under the Company’s committed, revolving credit facility.

As at September 30, 2015, short-term debt is comprised of drawings in different currencies on the Company’s committed revolving credit facility of $285,000,000 (December 31, 2014: $285,000,000), and had a weighted average interest rate of 5.6% (December 31, 2014: 1.83%).

Ritchie Bros. 16

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

16. Stockholders’ equity and dividends

Preferred shares

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

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

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

Share repurchase

During March 2015, 1,900,000 common shares were repurchased at a weighted average share price of $24.98 per share. The repurchased shares were cancelled on March 26, 2015.

Dividends

Declared and paid

The Company declared and paid the following dividends during the nine months ended September 30, 2015 and 2014:

	Declaration date	Dividend per share		Record date	Total dividends		Payment date
Nine months ended September 30, 2015:
First quarter 2015	May 7, 2015	$	0.1400	May 29, 2015		14,955	June 19, 2015
Second quarter 2015	August 6, 2015		0.1600	September 4, 2015		17,147	September 25, 2015
Third quarter 2015	November 5, 2015		0.1600	November 27, 2015		17,149	December 18, 2015
Nine months ended September 30, 2014:
First quarter 2014	May 2, 2014		0.1300	May 23, 2014		13,942	June 13, 2014
Second quarter 2014	August 5, 2014		0.1400	August 22, 2014		15,028	September 12, 2014
Third quarter 2014	November 4, 2014		0.1400	November 21, 2014		15,044	December 12, 2014

17. Share-based payments

Share-based payments consisted of the following compensation costs recognized in selling, general and administrative expenses:

	Three months ended					Nine months ended
	September 30,					September 30,
	2015			2014		2015		2014
Stock option compensation expense	$	1,038		$	1,083	$	3,094	$	2,664
Share unit expense (recovery)		(12	)		1,352		3,907		3,874
Employee share purchase plan - employer contributions		346			322		977		952
	$	1,372		$	2,757	$	7,978	$	7,490

Ritchie Bros. 17

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

17. Share-based payments (continued)

Stock option plan

Stock option activity for the nine months ended September 30, 2015 and the year ended December 31, 2014 is presented below:

	September 30, 2015					December 31, 2014
	Common shares			WA exercise		Common shares			WA exercise
	under option			price		under option			price
Outstanding, beginning of period		3,897,791		$	22.09		3,749,574		$	21.09
Granted		880,706			25.50		837,364			23.60
Exercised		(1,379,835	)		21.20		(663,152	)		18.28
Forfeited		(71,985	)		23.02		(25,995	)		23.26
Outstanding, end of period		3,326,677		$	23.34		3,897,791		$	22.09
Exercisable, end of period		1,837,010		$	22.37		2,483,530		$	21.65

The options outstanding at September 30, 2015 expire on dates ranging to August 12, 2025. The weighted average (“WA”) share price of options exercised during the nine months ended September 30, 2015 was $27.84 per option (2014: $23.97).

The fair value of the stock option grants was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

Nine months ended September 30,	2015			2014
Risk free interest rate		1.8	%		1.8	%
Expected dividend yield		2.18	%		2.31	%
Expected lives of the stock options		5 years			5 years
Expected volatility		26.4	%		29.3	%

Risk free interest rate is the US Treasury Department five year treasury yield curve rate on the date of the grant. Expected dividend yield assumes a continuation of the most recent dividend payment for the coming quarterly dividends. Expected lives of options is based on the age of the options on the exercise date over the past five years. Expected volatility is based on the historical share price volatility over the past five years.

The WA grant date fair value of options granted during the nine months ended September 30, 2015 was $5.39 per option (2014: $5.36). The compensation expense arising from option grants is amortized over the relevant vesting periods of the underlying options.

As at September 30, 2015, the unrecognized stock-based compensation cost related to the non-vested stock options was $4,641,000, which is expected to be recognized over a weighted average period of 2.7 years. Cash received from stock-based award exercises for the nine months ended September 30, 2015 was $29,251,000 (2014: $5,596,000).

Share unit plans

During the nine months ended September 30, 2015, the Company granted share units under two new performance share unit (“PSU”) plans, a senior executive PSU plan and an employee PSU plan. The two new plans have identical terms and conditions, with the exception of clauses under the senior executive PSU plan that address the treatment of recipients’ PSUs in the event of a change of control of the Company.

Ritchie Bros. 18

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

17. Share-based payments (continued)

Share unit plan (continued)

Under the plans, the number of PSUs that vest is conditional upon specified market and non-market vesting conditions being met. The market vesting condition is based on the relative performance of the Company’s share price in comparison to the performance of a pre-determined portfolio of other companies’ share prices. The non-market vesting conditions are based on the achievement of specific performance measures and can result in participants earning between 0% and 200% of the target number of PSUs granted.

Both new plans entitle the grant recipient to a payment equal to the dividend-adjusted number of PSUs vested multiplied by the VWAP of the Company’s common shares reported by the New York Stock Exchange for the twenty days prior to vest date. Unlike the Company’s other share unit plans, the two new PSU plans give the Company the option of settling in either cash or equity, with equity-settlement subject to shareholder approval. Shareholder approval had not been sought out or obtained as at September 30, 2015 for equity-settlement of the new PSUs. As such, the Company has determined that there is a present obligation to settle in cash, and has accounted for the two new PSU plans as cash-settled share-based payment transactions.

The WA grant date fair value of the 210,412 PSUs granted under the new plans during the nine months ended September 30, 2015, excluding the effect of dividend adjustments, was $24.48 per share unit. These PSUs are subject to market vesting conditions and their fair value at grant date was estimated using a binomial model with the following assumptions:

	2015
Risk free interest rate		1.3	%
Expected dividend yield		2.17	%
Expected lives of the PSUs		3 years
Expected volatility		29.4	%
Average expected volatility of comparable companies		32.8	%

The WA grant date fair value of the 2,737 restricted share units (“RSUs”) granted under the RSU plan during the nine months ended September 30, 2015, excluding the effect of dividend adjustments, was $27.40 per share unit (2014: $22.82). These RSUs are not subject to market vesting conditions and their fair value was estimated using the 20-day volume weighted average price of the Company’s common shares listed on the New York Stock Exchange.

Ritchie Bros. 19

Notes to the Condensed Consolidated Interim Financial Statements

(Tabular amounts expressed in thousands of United States dollars, except where noted)

(Unaudited)

Three and nine months ended September 30, 2015 and 2014

17. Share-based payments (continued)

The WA grant date fair value of the 22,610 deferred share units (“DSUs”) granted under the DSU plan to members of the Board of Directors during the nine months ended September 30, 2015, excluding the effect of dividend adjustments, was $26.05 per share unit (2014: $22.61). These DSUs are not subject to market vesting conditions and their fair value was estimated using the 20-day volume weighted average price of the Company’s common shares listed on the New York Stock Exchange.

The total market value of share units vested and released during the nine months ended September 30, 2015 was $1,253,000 (2014:$1,578,000). As at September 30, 2015, the Company had a total share unit liability of $10,121,000 (2014: $5,740,000) in respect of share units under the PSU, RSU and DSU plans described herein.

The compensation expense arising from share unit grants is amortized over the relevant vesting periods of the underlying units.

18. Contingencies

(a) Legal and other claims

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

(b) Guarantee contracts

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

At September 30, 2015 there was $73,990,000 of industrial assets guaranteed under contract, of which 100% is expected to be sold prior to the end of December 2015 (December 31, 2014: $85,967,000 of which 100% sold prior to the end of May 2015).

At September 30, 2015 there was $31,630,000 of agricultural assets guaranteed under contract, of which 28% is expected to be sold prior to the end of December 2015, with the remainder to be sold prior to the end of April 2016 (December 31, 2014: $15,793,000 of which 100% sold prior to the end of June 2015).

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

Ritchie Bros. 20