Cautionary Note Regarding Forward-Looking Statements



Forward-looking statements may appear throughout this Quarterly Report on Form
10-Q, including the following section "Management's Discussion and Analysis of
Financial Condition and Results of Operations". Forward-looking statements are
typically identified by such words as "aim", "anticipate", "believe", "could",
"continue", "estimate", "expect", "intend", "may", "ongoing", "plan",
"potential", "predict", "will", "should", "would", "could", "likely",
"generally", "future", "long-term", or the negative of these terms, and similar
expressions intended to identify forward-looking statements. Forward-looking
statements are based on current expectations and assumptions that are subject to
risks and uncertainties that may cause actual results to differ materially, and
include, among others, statements relating to:

 ? our future strategy, objectives, targets, projections and performance;

? potential growth and market opportunities;

? potential future mergers and acquisitions, including the planned acquisitions

of the Euro Auctions (as hereinafter defined);

? our ability to integrate potential acquisitions;

? the impact of our new initiatives, services, investments, and acquisitions on

us and our customers;

? our future capital expenditures and returns on those expenditures; and

financing available to us pursuant to the Commitment Letter (as hereinafter

? defined), our credit facilities or other sources, our ability to refinance

borrowings, and the sufficiency of our working capital to meet our financial

needs.


While we have not described all potential risks related to our business and
owning our common shares, the important factors discussed in "Part II, Item 1A:
Risk Factors" of this Quarterly Report on Form 10-Q and in "Part I, Item 1A:
Risk Factors" of our Annual Report on Form 10-K for the year ended December 31,
2020, which is available on our website at www.rbauction.com, on EDGAR at
www.sec.gov, or on SEDAR at www.sedar.com, are among those that we consider may
affect our performance materially or could cause our actual financial and
operational results to differ significantly from our expectations. Except as
required by applicable securities law and regulations of relevant securities
exchanges, we do not intend to update publicly any forward-looking statements,
even if our expectations have been affected by new information, future events or
other developments.

We prepare our consolidated financial statements in accordance with United
States generally accepted accounting principles ("US GAAP"). Except for Gross
Transaction Value ("GTV")1, which is a measure of operational performance and
not a measure of financial performance, liquidity, or revenue, the amounts
discussed below are based on our consolidated financial statements. Unless
indicated otherwise, all tabular dollar amounts, including related footnotes,
presented below are expressed in thousands of United States ("US") dollars.

In the accompanying analysis of financial information, we sometimes use
information derived from consolidated financial data but not presented in our
financial statements prepared in accordance with US GAAP. Certain of these data
are considered "non-GAAP financial measures" under the SEC rules. The
definitions of and reasons we use these non-GAAP financial measures and the
reconciliations to their most directly comparable US GAAP financial measures are
included either with the first use thereof or in the Non-GAAP Measures section
within the Management's Discussion and Analysis of Financial Condition and
Results of Operations. Non-GAAP financial measures referred to in this Quarterly
Report on Form 10-Q are labeled as "non-GAAP measure" or designated as such with
an asterisk (*). Please see pages 59-60 for explanations of why we use these
non-GAAP measures and the reconciliation to the most comparable GAAP financial
measures.

1 GTV represents total proceeds from all items sold at our auctions and online marketplaces. GTV is not a measure of financial performance, liquidity, or revenue, and is not presented in our consolidated financial statements.

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Overview



Ritchie Bros. Auctioneers Incorporated ("Ritchie Bros.", the "Company", "we", or
"us") (NYSE & TSX: RBA) was founded in 1958 in Kelowna, British Columbia, Canada
and is a world leader in asset management technologies and disposition of
commercial assets, selling $5.41 billion of used equipment and other assets
during 2020. Our expertise, extensive global reach, market insight, and trusted
portfolio of brands provide us with a unique position in the used equipment
market. We sell used equipment for our customers through our unreserved auctions
at over 40 auction sites worldwide, which are also simulcast online to reach a
global bidding audience and through our online marketplaces.



Through our unreserved auctions, online marketplaces, and private brokerage
services, we sell a broad range of used and unused commercial assets, including
earthmoving equipment, truck tractors, truck trailers, government surplus, oil
and gas equipment and other industrial assets. Construction and heavy machinery
comprise the majority of the equipment sold. Customers selling equipment through
our sales channels include end users (such as construction companies), equipment
dealers, original equipment manufacturers ("OEMs") and other equipment owners
(such as rental companies). Our customers participate in a variety of sectors,
including heavy construction, transportation, agriculture, energy, and mining.



We also provide our customers with a wide array of other services aligned with
our growth strategy to create a global marketplace for used equipment services
and solutions. Our other services include equipment financing, asset appraisals
and inspections, online equipment listing, logistical services, and ancillary
services such as equipment refurbishment. Additionally, we offer our customers
asset technology solutions to manage the end-to-end disposition process of their
assets and provide market data intelligence to make more accurate and reliable
business decisions.

We operate globally with locations in more than 12 countries, including the U.S., Canada, Australia, the United Arab Emirates, and the Netherlands, and employ more than 2,600 full time employees worldwide.

Proposed acquisition of Euro Auctions





On August 9, 2021, through our indirect, wholly owned subsidiary Ritchie Bros
UK. Holdings Ltd, we entered into a Sale and Purchase Agreement ("SPA") pursuant
to which we have agreed to purchase Euro Auctions Limited and its subsidiaries,
William Keys & Sons Holdings Limited and its subsidiaries, Equipment & Plant
Services Ltd, and Equipment Sales Ltd. (collectively, "Euro Auctions"), each
being private limited companies incorporated in Northern Ireland (the "Euro
Auctions Acquisition").



Under the terms of the SPA, we will acquire all of the outstanding shares of
Euro Auctions from their existing shareholders for approximately £775,000,000
(approximately $1.04 billion) cash consideration, to be paid on closing. The
Euro Auctions acquisition is subject to regulatory clearances and the
satisfaction of other customary closing conditions, including obtaining of
antitrust clearance in the United Kingdom. Euro Auctions are providers of
unreserved auction services in the commercial assets space with strong
international expertise, presence and brand, with operations in the United
Kingdom, the United Arab Emirates, Australia and the United States.



In connection with the execution of the SPA, we also obtained a financing
commitment letter ("Commitment Letter"), dated August 8, 2021 from Goldman Sachs
Bank USA ("GS Bank") pursuant to which GS Bank and certain other financial
institutions committed to provide a $530 million senior secured revolving credit
facility and a $100 million senior secured term loan facility (together, the
"Bank Commitments"), and a senior unsecured bridge loan facility up to $1,150
million (the "Bridge Commitment"). On September 21, 2021, we amended our
existing Credit Agreement and thereby cancelled the Bank Commitments. Further,
the Bridge Commitment was reduced by $200 million. The remaining aggregate
principal amount of the total financing commitment from GS Bank was reduced from
$1,150 million to $950 million.



GS Bank is also acting as our financial adviser with respect to the Euro
Auctions Acquisition. Consideration of $15,000,000 is payable to GS Bank in
respect of such services, contingent on consummation of the acquisition. GS Bank
also agrees to credit (or, at GS Bank's option, refund) $2,000,000 of the
transaction fee, to the extent paid, against any further transaction fee that
becomes payable to GS Bank in connection with it acting in connection with a
financing transaction as described above. These costs have not been recognized
as at September 30, 2021. The fee of $15,000,000 (or $13,000,000, net of any
amounts credited) will be expensed as acquisition related costs when it is
recognized.



The acquisition of Euro Auctions is aligned with our accelerated growth efforts
and with our strategy of becoming the trusted global marketplace for insights,
services and transaction solutions for commercial assets. Euro Auctions will
enhance our international presence and accelerate our international growth by
offering diversified choice to customers around the world, facilitate better
price




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discovery and more equipment selection. In addition, both companies will achieve
synergy by unlocking value for Euro Auctions customers post acquisition through
adoption of our inventory management system platform.



Acquisition of SmartEquip



On September 24, 2021, we entered into an Agreement and Plan of Merger ("Merger
Agreement") to acquire SmartEquip, a Delaware, United States corporation.
SmartEquip has a multi-manufacturer platform that provides customers with
real-time service and diagnostic support, dynamically customized, via serial
number, to each asset in their fleet, and enables the electronic procurement of
parts from original equipment manufacturers and their dealers.

On November 2, 2021, we closed the acquisition of SmartEquip and issued a total of 63,971 common shares to certain of the former shareholders of SmartEquip.


Under the terms of the Merger Agreement, we acquired all of the issued and
outstanding common shares of SmartEquip for $175,000,000, subject to certain
adjustments, including for working capital, indebtedness, and SmartEquip's
transaction expenses. The purchase price was paid in cash, with the exception of
a portion of the consideration payable to certain of SmartEquip's shareholders
who are entering into employment agreements with the Company, which was paid in
common shares of the Company.



The acquisition of SmartEquip will enable and accelerate adoption of parts and
service sales on behalf of our dealer and original equipment manufacturer
partners by providing a seamless experience for end users, and will deepen our
inventory management system connectivity and will further enable digital
solutions at scale around inspections and ancillary services, while enabling
better optimization of search and advertising revenue streams. The acquisition
further aligns to our execution strategy of becoming a trusted global
marketplace for insights, services and transaction solutions for commercial
assets.

Impact of COVID-19 to our Business



In March 2020, the World Health Organization declared the outbreak of COVID-19
as a pandemic, which quickly spread throughout the world, resulting in
significant global economic disruption that materially impacted several
countries and regions in which we operate, including the United States, Canada,
Europe, the Middle East, Australia and Asia. It has resulted in travel
restrictions, economic uncertainty, and business slowdowns or shutdowns in
affected areas and has negatively disrupted global manufacturing and workforce
participation, including our own.

In Q3 2021, our ability to move equipment to and from our auction sites, and
across borders continues to vary regionally with Asia and Australia continuing
to be negatively impacted as regional governments continue to enforce heavy
travel restrictions and quarantine requirements. In these regions, the
restrictions have also resulted in some challenges in customer interactions and
challenges for our customers to complete equipment inspections. In our
International region, travel and quarantine restrictions are slowly being lifted
as people become vaccinated, which is slowly driving up our auction volumes as
equipment can be moved between borders more easily. In the United States and
Canada, COVID-19 has not materially impacted our ability to operate our
businesses and move equipment. Globally, we continued to see surges in shipping
and freight costs combined with extended lead times, making transportation of
equipment both more costly and more challenging which is negatively impacting
the buying and selling behaviours of our customers. Additionally, COVID-19 in
combination with various macro economic factors is still impacting the supply
chains of new equipment production, which is negatively affecting the supply of
used equipment being sold throughout our regions, most predominantly in North
America.



Our top priority regarding the COVID-19 pandemic remains the health and welfare
of our employees, customers, suppliers and others with whom we partner to run
our business activities. We continue to adhere to all local government and
jurisdictional safety guidelines, and, in some instances, we are applying
additional over-and-above safety measures. Many of our employees continue to
work from home on a temporary basis and travel continues to be limited given
ongoing travel restrictions.



Since the beginning of the COVID-19 pandemic, we continue to be able to operate
and serve our customers' equipment and immediate liquidity needs through our
platform of auction technology solutions and online auction capabilities. In
addition to running our IronPlanet weekly featured online auction, our online
Marketplace-E solution and our GovPlanet online auctions, we modified our
operations in March 2020 to transition all of our traditional live on site
industrial auctions and events to online bidding. Buyers are generally still
able to visit our auction sites in advance of the auctions to conduct
inspections and pick up equipment post auction, but we have not been holding
live auction events in our theatres. As restrictions ease in the US and
elsewhere, we will be considering a transition back to some measure of in-person
attendance at our on site auction events.




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Our priority is to continue to support our employees, and we are actively
monitoring the situation and changing dynamics in each of our respective regions
and adjusting our operations as necessary. As of September 30, 2021, layoffs or
furlough activities related to the COVID-19 pandemic have been limited in scope.

The extent of the ongoing impact of the COVID-19 pandemic on our operational and
financial performance, including our ability to execute our business strategies
and initiatives, will depend on future developments, including the duration and
spread of the pandemic in light of new variants, timing of mass vaccine
distribution, and any related restrictions implemented by governments in various
jurisdictions, as well as supply and demand impacts driven by our consignor and
buyer base, all of which are uncertain and cannot be easily predicted. Although
as of September 30, 2021, we continue to operate our auctions in all regions,
there is no assurance that our operations could not be impacted in the future.

We continue to actively monitor the evolving impact COVID-19 is having in the
world and remain ready to take further actions or adjust our response based on
any new governmental guidance or recommendations. It is unknown how long the
pandemic will last, or whether we will see a resurgence of cases as new variants
develop or spread, how many people are ultimately going to be affected by it,
and the long-term implications to local or global economies. Equally, the
effects of the COVID-19 pandemic on equipment supply, buyer demand, and
potential pricing volatility, or the potential impact on our buyers' ability to
pay or secure financing are still not readily discernable. Additionally, there
is a level of uncertainty about the long-term impact of the COVID-19 pandemic on
our third party vendors, partners and the service providers with whom we
currently do business with today. As such, given the ongoing nature of the
COVID-19 pandemic, we are not currently able to reasonably estimate the future
impacts on our business operations, results of operations, cash flows, financial
performance or our ability to pay dividends.

Service Offerings



We offer our equipment seller and buyer customers multiple distinct,
complementary, multi-channel brand solutions that address the range of their
needs. Our global customer base has a variety of transaction options, breadth of
services, and the widest selection of used equipment available to them. For a
complete listing of channels and brand solutions available under our Auctions &
Marketplace ("A&M") segment, as well as our Other Services segment, please refer
to our Annual Report on Form 10-K for the year ended December 31, 2020, which is
available on our website at www.rbauction.com, on EDGAR at www.sec.gov, or

on
SEDAR at www.sedar.com.

Contract options

We offer consignors several contract options to meet their individual needs and sale objectives. Through our A&M business, options include:

? Straight commission contracts, where the consignor receives the gross proceeds

from the sale less a pre-negotiated commission rate;

? Guarantee contracts, where the consignor receives a guaranteed minimum amount

plus an additional amount if proceeds exceed a specified level; and

? Inventory contracts, where we purchase, take custody, and hold used equipment

and other assets before they are resold in the ordinary course of business.

We collectively refer to guarantee and inventory contracts as underwritten or "at-risk" contracts.



Value-added services

We also provide a wide array of value-added services to make the process of
selling and buying equipment convenient for our customers, including repair and
refurbishment services, financial services through Ritchie Bros. Financial
Services ("RBFS"), logistical services through RB Logistics, end-to-end asset
management and disposition services through RB Asset Solutions, as well as other
services such as appraisals, insights, data intelligence and performance
benchmarking solutions.

Seasonality



Our GTV and associated A&M segment revenues are affected by the seasonal nature
of our business. GTV and A&M segment revenues tend to increase during the second
and fourth calendar quarters, during which time we generally conduct more
business than in the first and third calendar quarters. Given the operating
leverage inherent in our business model, the second and fourth quarter also tend
to produce higher operating margins, given the higher volume and revenue
generated in those quarters.

The restrictions imposed and effects of the overall economic environment as a result of the COVID-19 pandemic may continue to impact these trends.








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Revenue Mix Fluctuations

Our revenue is comprised of service revenue and inventory sales revenue. Service
revenue from A&M segment activities include commissions earned at our auctions,
online marketplaces, and private brokerage services, and various auction-related
fees, including listing and buyer transaction fees. We also recognize revenues
from our Other Segment as fees within service revenue. Inventory sales revenue
is recognized as part of our A&M activities and relates to revenues earned
through our inventory contracts.

Inventory sales revenue can fluctuate significantly, as it changes based on
whether our customers sell using a straight or guarantee commission contract, or
an inventory contract at time of selling. Straight or guarantee commission
contracts will result in the commission being recognized as service revenue,
while inventory contracts will result in the gross transaction value of the
equipment sold being recorded as inventory sales revenue with the related cost
recognized in cost of inventory sold. As a result, a change in the revenue mix
between service revenues and revenue from inventory sales can have a significant
impact on revenue growth percentages.






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Performance Overview

Net income attributable to stockholders decreased 29% to $32.3 million, compared
to $45.4 million in Q3 2020. Diluted earnings per share ("EPS") attributable to
stockholders decreased 29% to $0.29 per share in Q3 2021 as compared to $0.41
per share in Q3 2020. Non-GAAP diluted adjusted EPS attributable to
stockholders* decreased 10% to $0.44 per share in Q3 2021 compared to $0.49

per
share in Q3 2020.



Beginning in the third quarter of 2021, we updated the calculation of our
non-GAAP diluted adjusted EPS attributable to stockholders* to add-back
share-based payments expense, all acquisition-related costs, amortization of
acquired intangible assets, and gain or loss on disposition of property, plant
and equipment. These adjustments have been applied retrospectively to all
periods presented.

For the third quarter of 2021 as compared to the third quarter of 2020:

Consolidated results:

? Total revenue in Q3 2021 decreased 1% to $329.7 million

o Service revenue in Q3 2021 decreased 4% to $214.2 million

o Inventory sales revenue in Q3 2021 increased 6% to $115.5 million

? Total selling, general and administrative expenses ("SG&A") in Q3 2021

decreased 1% to $108.6 million

? Operating income in Q3 2021 decreased 20% to $53.6 million

? Non-GAAP adjusted operating income* in Q3 2021 decreased 11% to $75.1 million

? Non-GAAP adjusted Earnings Before Interest, Taxes, Depreciation and

Amortization* ("EBITDA) in Q3 2021 decreased 9% to $90.6 million

? Net income in Q3 2021 decreased 29% to $32.4 million

? Cash provided by operating activities was $304.1 million for the first nine

months of 2021

? Cash on hand at the end of Q3 2021 was $468.4 million, of which $362.6 million


  was unrestricted

Auctions & Marketplaces segment results:

? GTV in Q3 2021 decreased 4% to $1.3 billion and decreased 5% when excluding the

impact of foreign exchange

? A&M total revenue in Q3 2021 decreased 1% to $293.8 million

o Service revenue in Q3 2021 decreased 6% to $178.3 million

o Inventory sales revenue in Q3 2021 increased 6% to $115.5 million

Other Services segment results:

? Other Services total revenue in Q3 2021 increased 6% to $35.8 million

o RBFS revenue in Q3 2021 increased 55% to $11.3 million

o Rouse revenue of $6.5 million was recognized in Q3 2021, which was its third


   full quarter since its acquisition on December 8, 2020




In addition, total number of organizations activated on our Business Inventory
Management System ("IMS"), a gateway into our marketplace, increased by 141% as
compared to Q2 2021.



Other Company developments:

? On September 8, 2021, the Company appointed its Chief Operating Officer, James

Kessler, to the additional role of President of the Company.

On October 6, 2021, Sharon Driscoll, the Company's Chief Financial Officer,

announced that she intends to retire within two years. As part of an effective ? succession process, Ms. Driscoll will continue to serve as CFO until her

successor has been appointed and will then assume a role as an Executive Vice


  President serving as an advisor to the Company.









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Results of Operations

Financial overview


                                                Three months ended September 30,                     Nine months ended September 30,
                                                                            % Change                                             % Change
(in U.S. $000's, except EPS and
percentages)                               2021           2020         2021 over 2020            2021            2020         2021 over 2020
Service revenue:
Commissions                             $   110,275    $   112,762                 (2) %     $     343,584    $   331,711                   4 %
Fees                                        103,918        109,917                 (5) %           329,387        308,230                   7 %
Total service revenue                       214,193        222,679                 (4) %           672,971        639,941                   5 %

Inventory sales revenue                     115,489        108,863         

         6 %           384,627        353,906                   9 %
Total revenue                               329,682        331,542                 (1) %         1,057,598        993,847                   6 %
Costs of services                            33,038         39,223                (16) %           108,107        118,026                 (8) %

Cost of inventory sold                      102,993         96,253                   7 %           344,763        320,972                   7 %
Selling, general and administrative
expenses                                    108,578        110,186                 (1) %           336,475        309,203                   9 %
Operating expenses                          276,063        264,158                   5 %           869,960        803,581                   8 %
Operating income                             53,619         67,384                (20) %           187,638        190,266                 (1) %
Operating income as a % of total
revenue                                        16.3 %         20.3 %             (400) bps            17.7 %         19.1 %             (140) bps
Non-GAAP adjusted operating income*          75,055         84,588                (11) %           239,563        225,454                   6 %
Net income attributable to
stockholders                                 32,336         45,387                (29) %           121,273        121,239                   0 %
Non-GAAP adjusted net income
attributable to stockholders*                49,276         54,592                (10) %           159,638        148,266                   8 %
Diluted earnings per share
attributable to stockholders            $      0.29    $      0.41                (29) %     $        1.09    $      1.10                 (1) %
Non-GAAP diluted adjusted EPS
attributable to stockholders*           $      0.44    $      0.49                (10) %     $        1.43    $      1.35                   6 %
Effective tax rate                             28.8 %         25.3 %               350 bps            26.0 %         28.6 %             (260) bps

Total GTV                                 1,270,258      1,321,379                 (4) %         4,072,439      3,962,386                   3 %
Service GTV                               1,154,769      1,212,516                 (5) %         3,687,812      3,608,480                   2 %

Service revenue as a % of total GTV            16.9 %         16.9 %                 - bps            16.5 %         16.2 %                30 bps
Inventory GTV                               115,489        108,863                   6 %           384,627        353,906                   9 %

Service revenue as a % of total
revenue                                        65.0 %         67.2 %             (220) bps            63.6 %         64.4 %              (80) bps
Inventory sales revenue as a % of
total revenue                                  35.0 %         32.8 %               220 bps            36.4 %         35.6 %                80 bps
Cost of inventory sold as a % of
operating expenses                             37.3 %         36.4 %                90 bps            39.6 %         39.9 %              (30) bps
Service GTV as a % of total GTV -
Mix                                            90.9 %         91.8 %              (90) bps            90.6 %         91.1 %              (50) bps
Inventory sales revenue as a % of
total GTV - Mix                                 9.1 %          8.2 %                90 bps             9.4 %          8.9 %                50 bps




Total GTV

Total GTV decreased 4% to $1.3 billion in Q3 2021 and increased 3% to $4.1 billion in the first nine months of 2021. Total GTV decreased 5% in Q3 2021 and increased 3% in the first nine months of 2021, when excluding the impact of foreign exchange.





In Q3 2021, GTV decreased primarily in International and Canada, and remained
relatively flat in the US. GTV volume decreased primarily driven by an
unfavourable supply environment across all regions, as well as auction calendar
shifts of $34 million from the impact of the COVID-19 pandemic that were shifted
from the first half of 2020 into Q3 2020 that did not repeat in Q3 2021. These
decreases were partially offset by the continued strong price performance
experienced across all regions due to high demand for used equipment,
predominantly in the construction and transportation sectors. In International,
the decreased volumes were driven by the auction shifts of (1) Moerdijk,
Netherlands, (2) Polotitlan, Mexico and (3) Ocana, Spain auctions in Q3 2020 and
lower volumes selling through our online channels driven by an unfavourable
supply environment. These decreases were partially offset by positive
year-over-year performances in Australia, including a new agricultural event. In
Canada, GTV volume decreased due to the tight supply market which led to an
unfavourable year-over year performance mainly in our Western region, partially
offset by an increased volume from providing escrow services for private
brokered transactions in RBFS. In the US, GTV volumes remained flat despite a
large dispersal of $99 million of pipeline construction equipment in a
single-owner auction event in New Mexico and Texas, and higher volumes selling
through our GovPlanet business from the new non-rolling and rolling stock
contracts effective June 1, 2021. Offsetting these, the US saw lower supply from
our US strategic accounts in the rental and finance sectors which had grown
significantly in the prior year.






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For the first nine months of 2021, total GTV increased 3% due to strong pricing
partially offset by an unfavourable tight supply environment impacting all
regions. We saw higher volumes in International and Canada, partially offset by
relatively flat volumes in the US. In International, GTV increases were driven
by the lifting of border restrictions, improved economic climate and higher
activity in Australia. We also saw strong performances at our auctions in Europe
with the addition of several new auctions and satellite yards as well as
positive impact from foreign exchange. In Canada, we primarily benefited from a
favourable foreign exchange impact, and also saw increased volumes across a
number of our auctions, most notably in Toronto and within the Canadian
agricultural market, and a significant increase in volumes in our RBFS business
as discussed above, offset by softer performances in Western Canada. In the US,
GTV remained flat mainly for the same reasons as discussed above, as well, the
Orlando and Las Vegas, US auctions and the non-repeat of a collector car event,
contributed to lower volumes, offset by positive online performance.

Total revenue

Total revenue decreased 1% to $329.7 million in Q3 2021, with total service revenue decreasing by 4%, offset by an increase in inventory sales revenue by 6%. Total revenue increased 6% to $1.1 billion for the first nine months of 2021.

Foreign currency fluctuation also had a favourable impact on our revenue primarily due to the appreciation of the Canadian dollar, the Australian and the Euro dollar relative to the US dollar.





Service Revenue



Q3 2021


In Q3 2021, total service revenue decreased 4% with fees revenue decreasing 5%
and commissions revenue decreasing 2%. Service revenues comprise commissions
that are earned on Service GTV, and Fees which are earned on total GTV as well
as from our other services such as Ancillary Services, RBFS, Rouse, Mascus, RB
Logistics and RB Asset Solutions.

Service GTV decreased 5% to $1.2 billion primarily due to the unfavourable
supply environment which impacted our volumes across all regions despite
continued strong pricing. In International, lower year-over-year performances
across Europe combined with auction calendar shifts contributed to lower Service
GTV, partially offset by higher volumes in Australia combined with a new
agricultural event. In Canada, lower Service GTV was primarily due to softer
year-over-year performances in Edmonton and Grand Prairie, partially offset by
an increase in escrow services provided by RBFS for private brokered
transactions through our Marketplace-E platform. In the US, Service GTV remained
flat despite a very large dispersal of $99 million of pipeline construction
equipment in a single-owner auction event. In addition, in the prior year, the
US benefited from a strong execution by the US strategic accounts and regional
sales teams driving growth. Softer performances in our Fort Worth and Houston
auctions also contributed to lower volumes.



Fees revenue decreased 5%, primarily due to lower fees on mix of lower
proportion of small value lots across all regions, and lower fees from our
Ancillary services as some sellers have elected to forgo paint or repair
services driven by a strong market demand for used equipment and lower unit of
volumes in the construction and transportation end markets. In the US, we also
saw lower listing fees in line with lower online volumes, and lower document
fees due to a decline in the total number of titled lots sold. These decreases
were partially offset by higher fee revenue from the acquisition of Rouse,
higher funded volume in RBFS, as well as higher buyer fees from the
implementation of the revised global buyer fee structure on May 1, 2021 and from
the higher buyer fee structure in Australia. In addition, we also benefited from
the re-instatement of fees at the Canadian on-the-farm auctions which were
waived in Q3 2020 as part of our COVID-19 pandemic response.



Commissions revenue decreased 2%, partly due to the decrease in Service GTV of
5%, offset by higher rate performance in the US attributable to a lower volume
of US strategic accounts, and stronger straight commission rate performance in
our GovPlanet business driven by favourable mix of contracts.



First nine months of 2021

For the first nine months of 2021, total service revenue increased 5% with fees revenue increasing 7% and commissions revenue increasing 4%.





Service GTV increased 2% to $3.7 billion with increases in Canada and
International while performances in the US remained relatively flat. In Canada,
positive year-over-year performances in Toronto and in our Canadian agricultural
market, and an increase in escrow services provided by our RBFS business
contributed to higher Service GTV, which was partially offset by softer
performances in Grand Prairie and Edmonton. International saw higher service GTV
as a result of increased activity in Australia combined with a new agricultural
event, and higher activity in Europe as a result of improved market economic
conditions and the ease of restrictions from the gradual recovery of the
COVID-19 pandemic. Service GTV remained flat in the US as discussed above.

In
addition, softer




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performances at our Orlando, Las Vegas, and regional combined auctions and the
non-repeat of a collector car event contributed to lower volume partially offset
by higher Service GTV sold through our online platform.



Fees revenue increased 7%, mainly due to fee revenue earned from the acquisition
of Rouse, higher fees driven by higher funded volume in RBFS, and higher buyer
fees in line with higher GTV of 3%. We also implemented our revised global
buyer-fee structure on May 1, 2021, and re-instated fees at the Canadian
on-the-farm auctions at the beginning of the year, which contributed to higher
buyer fees. In addition, Australia and our GovPlanet business have higher buyer
fee structures, which also led to higher buyer fees. These increases were
partially offset by lower fees on mix of lower proportion of small value lots
across all regions and lower fees from our Ancillary services as discussed
above, and lower fees from the non-repeat of a collector car event in the US.



Commissions revenue increased 4%, largely driven by the increase in Service GTV
of 2%. The remaining increase in commission revenue was driven by improved rates
on straight commission contracts in Canada and within our GovPlanet business.



Inventory Sales Revenue

Inventory sales revenue as a percentage of total GTV increased to 9.1% from 8.2% in Q3 2021 and increased to 9.4% from 8.9% in the first nine months of 2021.

Q3 2021



In Q3 2021, inventory sales revenue increased 6% primarily in International,
offset by the US and Canada. The improved year-over-year performance in our
International region was driven by an increased activity in Australia combined
with a new agricultural event. In the US, an unfavourable supply environment
combined with the non-repeat of several inventory contracts led to lower
inventory sales revenue. These decreases were primarily offset by increased
volumes sold through our GovPlanet business from the new non-rolling and rolling
stock contracts effective June 1, 2021 as well as higher activity following the
government shut down in response to COVID-19 in prior year. In Canada, the tight
supply market contributed to lower volumes across Western Canada.



First nine months of 2021



For the first nine months of 2021, inventory sales revenue increased 9%
primarily due to a higher mix of inventory contracts, as well as higher activity
in Australia and across various countries in Europe partly due to the overall
improved economic conditions from the gradual recovery of the COVID-19 pandemic
and the addition of several new auctions. We also saw higher volumes in our
GovPlanet business, partially offset by softer performances in both the US

and
Canada, as discussed above.



Underwritten Contracts



We offer our customers the opportunity to use underwritten commission contracts
to serve their disposition strategy needs, entering into such contracts where
the risk and reward profile of the terms are agreeable. Our underwritten
contracts, which include inventory and guarantee contracts increased to 22.5% in
Q3 2021 compared to 15.4% in Q3 2020. For the first nine months of 2021, our
underwritten contracts were 18.3% compared to 18.7% in the prior period.

Operating Income



For Q3 2021, operating income decreased 20% or $13.8 million to $53.6 million,
primarily due to a 4% decrease in service revenues, coupled with a 5% increase
in total operating expenses. Operating expenses included $10.3 million in
acquisition-related costs for the proposed acquisitions of Euro Auctions and
SmartEquip, and continuing acquisition related costs incurred for the
acquisition of Rouse in Q4 2020, as well as incremental depreciation and
amortization of the intangible assets acquired in Rouse. In terms of ongoing
operations, cost of services and selling and general administrative expenses
were lower. For the first nine months of 2021, operating income decreased 1% or
$2.6 million to $187.6 million primarily due to higher operating expenses due to
the same reasons noted above, partially offset by higher service revenues and
flow through from inventory sales.

Income tax expense and effective tax rate



At the end of each interim period, we estimate the effective tax rate expected
to be applicable for the full fiscal year. The estimate reflects, among other
items, management's best estimate of operating results. It does not include the
estimated impact of foreign exchange rates or unusual and/or infrequent items,
which may cause significant variations in the customary relationship between
income tax expense and income before income taxes.






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For Q3 2021, income tax expense decreased 15% to $13.1 million and our effective
tax rate increased 350 bps to 29% as compared to Q3 2020. For the nine months
ended September 30, 2021, income tax expense decreased 13% to $42.5 million and
our effective tax rate decreased 260 bps to 26%, as compared to the nine months
ended September 30, 2020.




Increase in the effective tax rate for Q3 2021 was primarily due a decrease in
deductible stock options exercised and a greater estimate of non-deductible
expenses. Partially offsetting this increase was lower income taxes related

to
tax uncertainties.



Decrease in the first nine months of 2021 was primarily due to a decrease in the
estimate of non-deductible expenses, higher tax deduction for share unit
expenses in excess of compensation expense and lower income taxes related to tax
uncertainties. Partially offsetting this decrease was a higher estimate of
income taxed in jurisdictions with higher tax rates and lower deduction for
stock options exercised.



On April 8, 2020, the United States Department of Treasury and the Internal
Revenue Service ("IRS") clarified income tax benefits related to hybrid
financing arrangements would not be deductible ("Hybrid Interest"). The lower
estimate of non-deductible expenses is primarily due to the net income tax
benefits of approximately $6.2 million in the twelve months ended December 31,
2019 which were no longer deductible and accordingly were reversed in the nine
months ended September 30, 2020.



Net income




In Q3 2021, net income attributable to stockholders decreased 29% to $32.3
million primarily related to lower operating income. For the first nine months
of 2021, net income attributable to stockholders remained flat at $121.3
million, primarily due to lower operating income, partially offset by lower

tax
expense.

Diluted EPS

Diluted EPS attributable to stockholders decreased 29% to $0.29 per share for Q3
2021 and decreased 1% to $1.09 per share for the first nine months of 2021. This
decrease is primarily due to the decrease in net income attributable to
stockholders, combined with an increase in the weighted average number of
dilutive shares outstanding over the same comparative period.

US dollar exchange rate comparison

We conduct global operations in many different currencies, with our presentation currency being the US dollar. The following table presents the variance in select foreign exchange rates over the comparative reporting periods:






                                                                                      % Change
                                                                                    2021 over
Value of one local currency to U.S dollar                     2021        2020        2020
Period-end exchange rate
Canadian dollar                                               0.7886      0.7514            5 %
Euro                                                          1.1581      1.1732          (1) %
Australian dollar                                             0.7231      0.7171            1 %

Average exchange rate -Three months ended September 30,
Canadian dollar                                               0.7942      0.7506            6 %
Euro                                                          1.1793      1.1686            1 %
Australian dollar                                             0.7351      0.7148            3 %

Average exchange rate -Nine months ended September 30,
Canadian dollar                                               0.7992      0.7391            8 %
Euro                                                          1.1966      1.1242            6 %
Australian dollar                                             0.7592      0.6764           12 %





For Q3 2021, foreign exchange had a favourable impact on total revenue and an
unfavourable impact on expenses. These impacts were primarily due to the
fluctuations in the Canadian dollar, Australian dollar, and the Euro exchange
rates relative to the US dollar.






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Non-GAAP Measures

As part of management's non-GAAP measures, we may eliminate the financial impact
of adjusting items which are after-tax effects of significant recurring and
non-recurring items that we do not consider to be part of our normal operating
results.

Beginning in Q3 2021, we updated our calculation of non-GAAP measures and included the impact of share-based payments expense, all acquisition-related costs, amortization of acquired intangible assets and gain or loss of disposition of property, plant and equipment. These adjustments have been applied retrospectively to all periods presented.



Non-GAAP adjusted net income attributed to stockholders decreased 10% to $49.3
million in Q3 2021 and increased 8% to $159.6 million for the first nine months
of 2021.

Non-GAAP diluted Adjusted EPS attributable to stockholders decreased 10% to $0.44 per share in Q3 2021 and increased 6% to $1.43 per share for the first nine months of 2021.



Non-GAAP adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") decreased 9% to $90.6 million in Q3 2021 and increased 6% to $286.2
million for the first nine months of 2021.

Debt at the end of Q3 2021 represented 3.8 times net income as at and for the 12
months ended September 30, 2021, consistent with the debt at Q3 2020, which
represented 3.8 times net income as at and for the 12 months ended September 30,
2020. The non-GAAP adjusted net debt/non-GAAP adjusted EBITDA was 0.7 times as
at and for the 12 months ended September 30, 2021, compared to 0.5 times as at
and for the 12 months ended September 30, 2020.

Segment Performance


We provide our customers with a wide array of services. The following table
presents a breakdown of our consolidated results between the A&M segment and
Other Services segment. A complete listing of channels and brand solutions under
the A&M segment, as well as our Other Services segment, is available in our
Annual Report on Form 10-K for the year ended December 31, 2020.

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