RB Global Inc (RBA) 2007 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Ritchie Bros. Auctioneers 2007 year end earnings results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session.

(OPERATOR INSTRUCTIONS)

As a reminder, this conference is being recorded, Thursday, February 21, 2008.

I'd now like to call the conference over to Peter Blake. Go ahead, sir.

Thanks, James.

Good morning, and welcome to the Ritchie Bros. Auctioneers Investor Conference Call for the year ended December 31, 2007.

I'm Peter Blake, Ritchie Bros.' CEO. Joining me on the call today are Bob Armstrong, our Chief Operating Officer and Chief Financial Officer, Rob McLeod, our Director of Global Accounting, and Jeremy Black, our Director of Business Development and Corporate Secretary.

Today, we'll be discussing our financial results for the year ended December 31, 2007, as well as our expectations for 2008. The presentation will take about 20 or 25 minutes, and then we'll be open -- we'll open for questions after that.

Before we start, I'd like to make a Safe Harbor statement. The following discussion will include forward-looking statements, as defined by SEC and Canadian rules and regulations. Comments that are not facts are considered forward-looking statements that involve risks and uncertainties and include statements about our projected future results of operations and financial performance, growth and other strategic initiatives, property development plans and other matters. These risks and uncertainties include the numerous factors that influence the supply of and demand for used equipment, fluctuations in the market values of used equipment, seasonal and periodic variations in operating results, actions of competitors, conditions in local and regional markets and other risks and uncertainties as detailed from time to time in our SEC and Canadian securities filings, including our management's discussion and analysis of financial conditions and results of operations for the year ended December 31, 2007, which was filed this morning and is available on the SEC, SEDAR and company websites. Actual results may differ materially from those contemplated in the forward-looking statements. We do not undertake any obligation to update the information contained in this call, which speaks only as of today's date.

I'd also like to note that during today's call, we will be speaking about gross auction proceeds, which represents the total proceeds from all items sold at our auctions. Our definition of gross auction proceeds may differ from those used by other participants in our industry. Gross auction proceeds is an important measure we use in comparing and assessing our operating performance. It is not a measure of financial performance, liquidity or revenue and is not presented in our statement of operations. The most directly comparable measure in our financial statements is auction revenues, which represents the revenue we earn in the course of conducting our auctions.

I'll speak to our business and overall performance in 2007. I'll then turn the call over to Bob, who'll give an update on the three elements of our growth strategy, which are People, Places and Processes. Rob will then provide an overview of our financial performance in 2007. Jeremy will outline our guidance for 2008. And then I will make some concluding comments before we open the call to questions.

At Ritchie Bros., we have a lot to celebrate, especially in 2008. It's our 50th anniversary in the auction business, the 45th anniversary of our first industrial auction and the 10th anniversary of our IPO. We just concluded another record-breaking year, with gross auction proceeds of $3.19 billion. We attracted a record number of consignments and bidders to our auctions and broke regional gross auction proceeds records in 18 locations. We also added four new facilities to our worldwide network of auction sites in 2007, and another since the start of the year, so we now have 38 auction sites around the world.

When I was preparing for this call, I realized it was a good time to take a look back, not just at the past year, but the past 50 years. Our company was founded in 1958 on two basic principles -- every auction should be strictly unreserved, and every customer should be treated fairly and with respect. For our origins as a small, family-run business, we've grown to become the world's largest industrial auctioneer, and yet our commitment to conducting fair, transparent auctions and providing exceptional customer service has never wavered. In fact, we think our commitment to these basic principles has been and continues to be one of the keys to our success. It certainly has fueled our growth.

In 1998, the year that we went public, we conducted 106 unreserved auctions around the world, generating $1.1 billion in gross auction proceeds. Nine years later in 2007, we conducted more than 350 unreserved auctions, generating gross auction proceeds of $3.19 billion. Since going public, we have tripled the size of our business. Our ability to attract a worldwide audience of bidders to our auctions enables equipment sellers to transcend local market conditions and achieve global fair value for their assets. In 2007, close to 60% of our gross auction proceeds came from buyers living outside the region of the auction, and more than 20% of the gross auction proceeds at are U.S. auctions came from out-of-country buyers, compared to just 50% and 15% respectively in 2006. These are pretty powerful indicators of the global market we deliver, and both increased significantly in 2007.

Last week, I was catching bids at our auction in Phoenix, Arizona. Wheel loaders were crossing the ramp, and bids were coming in from the crowd on-site, as well as over the Internet. In the hour span that I was out there, we sold loaders to bidders from the Emirates, Lebanon, Mexico, Egypt, all throughout North America, and to the crowd in the theater. We helped our Arizona consigners sell for a world market value rather than Arizona market value. And in 2008, we expect that to be the norm for us.

Our global presence is not just a bragging point, it's our business model. It's also something we intend to continue to invest in going forward. We deliver value to our customers by conducting unreserved auctions that provide transparent and efficient access to global market -- global equipment marketplace. In 2007, we conducted 183 unreserved industrial auctions around the world. Each one featured, on average, over 1,400 lots from 191 consigners and attracted more than 1,300 registered bidders either on-site or online. Although most of our customers prefer to bid on-site, our internet bidding service, rbauctionBid-Live, makes it possible for our customers to bid in real time over the Internet at auctions around the world. In 2007, about 25% of the bidders at our auctions participated over the Internet.

Our ability to create value for customers has enabled us to become the world's largest industrial auctioneer, and we believe we can be bigger and better. Over the long-term, our mission is to become the world's largest marketplace for commercial and industrial assets. That's why we are increasingly investing in training and developing our employees, expanding and improving our global network of auction sites, and streamlining our business processes. These three Ps, the People, Places and Processes, form the core of our growth strategy. And as Bob will explain in a minute, we made tremendous progress at all three fronts in 2007. Our 3P strategy is designed to help us achieve our two corporate goals -- one, to grow our earnings per share by an average of 15% per year while delivering reasonable return on invested capital, and two, to maintain our corporate culture.

As a company, we're in an enviable position. Despite our tremendous growth in recent years and our position as a dominant player in our industry, we still only hold about 3% of the world's $100 billion-plus used equipment market. We expect most of our near-term growth to come from our established markets such as North America and Western Europe, but we're also planting the seeds -- excuse me -- for future growth in emerging markets such as China, India, Eastern Europe and South America. Whether we're establishing a permanent auction site or opening our first office in a new country, our focus is not on an immediate return on that investment, but on sustainable long-term growth.

We believe 2008 is lining up to be an exciting year for Ritchie Bros. Our ability to deliver a global marketplace will be especially important as we face an uncertain year in the world economy. We've all heard about the growth challenges in the United States and fears of a recession in 2008 and beyond. And while we're not economists, we get asked regularly what our views are for the future, particularly as they relate to the equipment world. All we can say right now is that there is no better time to be the largest player in the used equipment marketplace with an unsurpassed ability to access and deliver the global market. We don't expect the anticipated economic slowdown in the United States to adversely affect our business. In fact, we believe it will benefit -- we will benefit from it.

Over the past 5 decades, we've demonstrated our ability to grow at all points in the economic cycle. During slow economic periods, an increased supply of used equipment typically comes to market, but prices don't typically decline as much as you'd expect. As equipment users shift their buying preferences from new to good quality-late model used machinery and other assets, the demand for used equipment at our auctions tends to increase, helping prices to remain stable. Our experience so far this year, including the first two days at our Orlando auction, continues to support this view. It's important to note that our business is significantly more global than it was during previous economic downturns, and this will enable us to provide even greater value to customers than in prior cycles. Our ability to attract buyers from economies where demand for equipment remains high plays an important role in our ability to deliver strong returns on the equipment we sell, regardless of local market conditions. And that differentiates us from other channels.

Over the coming years, we believe our growth will be constrained by only one factor -- ourselves. The used equipment market is massive, and our share of that market is tiny. So, as long as we continue to stick to our strategy, we believe we will be successful, and our earnings will continue to grow. We are mindful of not growing too fast. We don't want to risk diluting our corporate culture or diminishing the quality of our customer service. Our preference is sustainable sales and earnings growth, and our strategy is focused on making the necessary investments now to ensure we are enable to deliver -- we are able to deliver that growth over the long-term. It may come from growing our gross auction proceeds, it may come from improving our operating leverage or a combination of these two, but at the end of the day, we aim to deliver earnings growth, and we believe we will be successful in delivering value to our customers, to our employees and to our shareholders.

Let me turn the call over to Bob Armstrong now, our COO and CFO.

Thanks, Pete. And good morning, everyone.

As Peter described, our growth strategy requires simultaneous investment on three fronts -- our People, our Places and our Processes. This strategy is essentially the same approach we've been following throughout the history of our company, and we've chosen to stick with the strategy because it works. Our business is built on relationships, not equipment. That's why we invest significant resources in training, developing and retaining the people who serve our customers.

In 2007, we added more than 120 employees to our team, bringing the total to 943, including 265 sales staff. About 60% of our general and admin expenses in 2007 were related to personnel costs. Our operating leverage, which we define as our gross -- excuse me -- as our G&A as a percentage of gross auction proceeds eroded slightly in 2007. Over the past few years, we grew faster than expected, achieving an almost 80% increase in gross auction proceeds over the past three yes, and that required a higher-than-expected investment in staff and related infrastructure.

Although we believe that our operating leverage will improve over the long-term. it will not happen every year. It did not improve in 2007, and it may not improve in 2008, because of ongoing future-oriented investments. While our mature operations in Canada and the U.S. continue to become more efficient and cost effective, we are incurring costs to expand our presence in new market sectors and regions well in advance of earning any income from these investments. Examples of this include investments in our sales offices in China, India and Eastern Europe, and our real estate and our U.S. agricultural initiatives. We believe these investments will facilitate sales and earnings growth in the future even though they will not generate a meaningful return in the first few years. As Pete pointed out, our goal is to grow our earnings over the long-term, and our focus is on investing prudently in new markets to help us achieve that goal.

We pride ourselves on running a very lean and efficient organization, with excellent operating leverage and high margins. Improving our operating leverage is one tool for delivering earnings per share growth, but maintaining a focus on growing our gross auction proceeds offers a more significant opportunity. Most of our strategies are geared towards driving top-line growth, as we believe that is the most effective place to focus in our drive to grow earnings per share. We have a strong history of earnings growth, and we intend to continue on that path.

On the properties front in 2007, we had a very active year, and for the first time we were able to achieve capital expenditures in excess of $100 million. We opened a replacement permanent auction site in Denver, Colorado and a new permanent auction site in Columbus, Ohio. We were also active in the development of auction sites in Houston, Texas, Kansas City, Missouri, Minneapolis, Minnesota and Paris, France. In 2007, we also acquired land on which we intend to build auction sites in Grande Prairie, Alberta, London, Ontario and in Mexico City, Mexico. We also purchased an office property in Lincoln, Nebraska, into which we recently relocated our U.S. headquarters.

Going forward, for the next few years, we hope our CapEx -- our annual CapEx will remain in the range of 100 to $150 million or more, as we continue to expand our worldwide network of auction sites, which we consider one of our most significant competitive advantages. If we can spend more than this, we will, but history has taught us that this will be a challenge.

Our efforts to develop and continually refine the processes and systems that we use to conduct our business also continued in 2007. We made significant progress on our process improvement initiatives in '07, and as we are often asked for details, I will quickly outline some of the recent process improvement accomplishments.

Last year, we launched our virtual ramp service, which allows bidders to compete on stationery items without having to brave the elements in the auction yard. We now accept credit card payments at most of our auction sites and online. We are currently rolling out our newly developed electronic auction clerking technology, which creates significant efficiencies for us during our auctions. Over the past year, we deployed several sales site system enhancements, aimed at reducing the manual effort required by our auction site staff. The creation of the Manager of Regional Operations position has allowed us to free up valuable time for our regional managers, so they can spend more time on sales and less time on administration. We have taken advantage of our Oracle ERP system to streamline and enhance our internal financial reporting. And we have developed many new and enhanced training programs.

Our focus on processes has evolved into a mind-set of continuous improvement throughout our company. We believe that this continuous improvement focus will be a key tool as we move from $3 billion in sales to $10 billion in sales and beyond.

And with that, I would like to introduce you to Rob McLeod, our Director of Global Accounting. Rob has proven himself to be an extremely capable and dedicated member of our team during his 15-year career with Ritchie Bros. He understands numbers, but more importantly he understands our business. He started with us in Vancouver, moved to our Lincoln office to head up our U.S. administration group, then moved to our European headquarters, where he was our Senior Manager of Operations, before returning to Vancouver. And this history with our company will serve him and us very well when he steps into the CFO role later this year.

Rob?

Thanks, Bob. And thanks for the introduction.

As Bob mentioned, I've been around the company for many years, but this is the first time as a speaker on our conference call. I look forward to providing you with helpful information today and in the future. I hope you've all had a chance to review our earnings release for the year ended December, 31, 2007, which will form the basis of my comments today. The release was issued and filed this morning, along with our audited annual financial statements and MD&A. All three documents will be available shortly on the SEC, SEDAR and Ritchie Bros. websites. All dollar amounts in our filings and on this call are stated in U.S. dollars.

As Pete mentioned, 2007 was a record-breaking year for Ritchie Bros. We generated gross auction proceeds of $3.19 billion, a 17% increase over 2006 and higher than our initial forecast of $2.95 billion. Our quarter 4 gross auction proceeds came in at $873 million, above our estimate of $800 million at the beginning of the quarter. No one auction or region caused us to outperform expectations in quarter 4 or 2007. Rather, we experienced strong growth in almost all of our regions around the world. This strong gross auction proceeds performance helped boost our auction revenues for 2007 to $315 million, almost 21% higher than 2006. Our auction revenue rate increased from 9.59% in 2006 to 9.89% in 2007, close to the upper end of our expected range of 9.5 to 10%. This increase was primarily due to the better-than-expected performance of our underwritten business, which accounted for approximately 25% of our 2007 gross auction proceeds.

In 2007, we achieved a direct expense rate of 1.33% of our gross auction proceeds, compared to 1.36% in 2006. Direct expenses are costs we incur to conduct an auction such as wages for temporary staff, auction advertising, site security, rental costs for off-site auctions and travel expenses for out-of-town employees working at an auction. Our direct expense rate decreased slightly in 2007 primarily because the average size of our auctions increased, giving us better economies of scale, although this was partially offset by an increased number of off-site auctions, which typically have a higher direct expense rate than auctions held at our permanent sites. We recorded general and administrative expenses of $142 million in 2007, a 20% increase over 2006.

As Bob mention previously, personnel costs accounted for about 60% of our total G&A expenses in 2007, and our head count increased 15% over 2006 levels. This is on top of the 22% increase in our head count in 2006. We have been growing our team in response to our above trend gross auction proceeds growth and as part of our investment in frontier markets. [All right], our head count has increased 53% over the last three years, while the gross auction proceeds have increased 80% over the same period.

Recently, there have been significant fluctuations in the value of the Canadian dollar and Euro relative to United States dollar. These fluctuations affect our reported auction revenues and operating expenses when non-United States dollar amounts are converted into United States dollars for financial statement reporting purposes. In recent periods, the effect on auction revenues and operating expenses reported in our annual consolidated financial statements has largely offset, making the impact of the currency fluctuation on our annual earnings insignificant. However, in 2007, our net earnings included a $2.8 million gain, resulting from the translation and settlement of foreign currency denominated monetary assets and liabilities.

Our effective income tax rate decreased from 38% in 2006 to 32% in 2007. That's a result of 2 factors -- a higher proportion of our earnings coming from jurisdictions with lower tax rates, and adjustments made in 2007 to reflect actual cash tax expenses that arose when we completed our 2006 income tax filings. Going forward, we estimate that our tax rate will likely be in the range of 33%.

Our net earnings increased to $76 million in 2007 or $2.17 per diluted weighted average share, thanks primarily to the increase in our gross auction proceeds and a higher auction revenue rate. This represents an increase of 33% over net earnings in 2006, or 35% if you exclude gains on the sale of surplus property in 2006, which we do not consider part of our normal operating results.

We paid dividends of $31.3 million in 2007, representing about 41% of our net earnings. On January 24, 2008, our Board of Directors declared another quarterly cash dividend of $0.24 per common share payable on March 14th to shareholders of record on February 22, 2008. We expect to pay out approximately $8.4 million for this dividend. Following payment of this dividend, we will have paid a total of over $100 million to our shareholders since initiating our dividend program in 2003. In addition, our Board has approved a 3-for-1 stock split, subject to the approval of our shareholders at our upcoming annual and special meeting.

And now, Jeremy Black, our Director of Business Development and Corporate Secretary, will outline our guidance for 2008.

Thanks, Rob.

Based on accumulated past experience, extensive input from our field managers around the world, and an analysis of the used equipment market, we are forecasting gross auction proceeds to be in the range of $3.6 billion for 2008. This would represent an increase of 13% over 2007 results. Our annual auction revenue rate guidance has remained at 9.5 to 10% for the past few years. However, on January 1 of this year, we increased some of our existing fees and commissions, including the minimum commission rate for low-value lots, and the document administration fee paid by consigners. We've not raised any of our rates since 1990 but felt these changes were necessary in light of the increasing costs of conducting our auctions and the higher value services we offer to our customers such as our internet bidding service. All things being equal, the estimated impact of these changes to our fee and commission structure should result in about a 25 basis point increase in our auction revenue rate in 2008.

Starting January 1, 2008, we are also making certain changes to our statement of operations to improve the presentation of our financial results. In the past, we've recorded interest income that was incidental to our auction business in auction revenues. It was never a big number, and auction revenues was the most appropriate place to record the balance. Late in 2007, we undertook a review of all of the items that might be considered revenue to ensure the presentation adopted in prior years was still appropriate going forward. Based on this review, there are certain items we will be reclassifying in our statement of operations, the largest of which is interest income, which will be recorded as a separate line item in other income starting in 2008. In 2007, our interest income was $7.4 million. The other reclassifications are less significant. Had we adopted this new presentation at the start of 2007, the net effect of these reclassifications would have been to reduce our auction revenue rate by approximately 10 basis points or 0.10% in 2007, and our direct expense rate would have been 1.46% rather than 1.33% in 2007. There would have been no effect on our net earnings. We will be reclassifying the relevant comparative information each quarter as we release our 2008 quarterly results. [With these fee] changes and reclassifications adopted in 2008, we believe our annual auction revenue rate in 2008 will be in the range of 10% plus or minus 25 basis points. Of course, quarterly experience could well be above or below this range as has happened in the past.

As Pete discussed earlier, we remain focused on achieving average annual earnings per share growth of 15%. We expect there will be years when we exceed this target and years when we don't. Without a doubt, 2007 was an exceptional year, with year-over-year normalized EPS growth of 35%, which may make it very difficult for us to achieve 15% EPS growth in 2008. However, we still expect to deliver 15% on average over the coming years.

Now, I'll let Pete wrap up the call.

Thanks, Jeremy. And before we open the call to questions, I'll quickly recap the main points we covered on today's call.

2007, another record-breaking year for Ritchie Bros. We conducted over 350 unreserved auctions around the world, generating total gross auction proceeds of $3.19 billion and attracting a record number of consignments and bidders. We are forecasting gross auction proceeds to be in the range of $3.6 billion in 2008. We delivered EPS growth in 2007, normalized, of 35% over the 2006 number. We set regional gross auction proceed records at 18 of our sites conducted -- the largest auction in our company history in Orlando, Florida, selling more than 6,500 lots over 5 days in February of last year. Currently, the Orlando sale's going on right now. In fact, you're welcome to dial in and watch at rbauction.com when you conclude the call, and we're seeing some terrific results coming out of there, and we'll be following along with a press release early next week to announce the results there. Finally, we invested more than $113 million in capital expenditures to support our future growth and expansion, adding four new auction sites to our global network. Also, our Board of Directors has approved the 3-for-1 stock splits, our common shares, subject to approval of our shareholders at our annual special meeting that's going to be held in April.

We've enjoyed phenomenal growth since going public in 1998. Our goals and growth strategy have not changed in that time. And every year we break records and post results that exceed those of the year before. By staying focused on our founding principles and long-standing goals, we have managed to create value for our customers and our shareholders. But despite our success and dominant market position, we have not grown complacent. We are constantly looking at new markets to pursue and new ways to improve, always with one eye on the future and the other eye on the bottom line.

We appreciate you guys joining us today. James, would you please open the call to questions?

Thank you. (OPERATOR INSTRUCTIONS) One moment, please, for our first question. And it comes from Bert Powell of BMO Capital Markets. Please proceed.

Yes. Thank you. Rob, what was the FX gained you mentioned in your presentation?

$2.8 million.

Okay. And how was -- where is that booked, and is it this quarter?

That was partially -- it was in each one of the quarters, so $2.8 million was the annual amount and it's booked as part of G&A.

Okay. So, it's spread fairly evenly?

More or less. Well, it's actually spread relatively evenly and relative to the bouncing around of the Canadian dollar and the Euro.

Okay. And just looking at the G&A for the 4th quarter, was there anything in there in terms of one-time items that would be noteworthy? Was there any bonus catch-ups related to performance being better than you expected for the year? Could you just give us a little bit more detail on the 4th quarter G&A?

Yes, really the -- if you call it a one-time item but it's unique to the 4th quarter is the increase in head count from quarter 4 from the prior quarters in the year. Other than that, there wasn't any one-time significant items.

What was the number of -- we saw quite a significant increase in head count during the 4th quarter.

Yes.

Is it like a 2 --?

A little over 4%.

Just in the quarter alone.

Just in the quarter alone.

Okay. And, Bob, just in your presentation, you talked about the investments necessary and obviously doing some missionary work in some new markets -- weighing in on expenses. Can you give us a sense as to what you would expect for either head count or G&A growth next year? You have come down slightly in terms of the overall percentage at GAAP, but this is two years in a row where we're 20% growth in G&A pretty much in line with auction revenues, and this is kind of the pressure point for the leverage, right, in the business model? Wonder if you could just give us a little bit of color in terms of what your thinking is for the next couple years, in terms of what you're going to have to do for investment in G&A for growth.

Sure. You're right. The G&A as a percentage of gross auction proceeds has not been coming down. In fact, it snuck up a little bit in the last couple years. Our view is -- first, that it's still a very efficient lean operation. Having said that, we believe that over the longer-term, that the G&A as a percentage of gross auction proceeds will indeed come down. I don't have a target number for it, but lower than current levels. But we're consciously spending right now, and as you mentioned, in some of these missionary and frontier markets. And so, that's masking the efficiencies that you would see if we isolated just sort of Canada and the U.S. Our largest operations are becoming more efficient as we get bigger and throw more business through our system. It's very scalable. But at the same time, we're deploying people and investing in facilities and so on in greener pastures with an eye to the future. Those will pay off down the road. We're consciously doing that. We really don't want to hold back on that, just so we can say, "Hey, guys, our leverage improved by X basis points."

No. Totally understand that.

And I'm not suggesting you're making that recommendation, but it crosses our minds. Like, it's no fun to say we want to see leverage, but then to offset that with big investments. So, to your question directly, when do we think it will change? I don't have a target date for you. The message in this call is it probably -- it may not or probably won't improve this year because we know we're spending on -- fairly aggressively on those areas now. But I would think that it's not that far away. I mean, I'm being a bit dodgy in not giving you a date, but it's not that far away because we're seeing great momentum in Europe right now, one of our fastest growing markets, and so that's losing its frontier status and becoming a hot producer.

Is there anyway, Bob -- And maybe this is an impossible question, but is there any way you can give us a sense of how much of it is kind of future investment G&A versus what's kind of, you know, at the -- the stuff that you need to kind of put up the numbers you've got now?

You're right. It is a -- that's a hard question to ask. It would get into the definitional stuff, so I think I'll avoid it.

Okay. I won't ask any more questions I don't want Ben to get upset.

That's okay. He still will.

Okay.

(inaudible) you guys? Come on.

Our next question is from Ben Cherniavsky from Raymond James. Please proceed.

I don't know what to say. Bert stole my favorite topic.

Go ahead. Open up with a rude remark about Bert.

I don't know how he always gets to the front of the cue, but I'll get on him for it. Anyway, I -- so, I won't beat the G&A question to death. Just a couple of points of clarification. Did I hear that you guys said you were going to get -- you expect your CapEx to be as much as or more than $150 million a year?

Yes, you heard that correctly. We're not saying we will. We're saying we hope to. This year, we were quite excited we finally broke through $100 million. It has been $113 million. And the specific guidance this year, we think, we'll be in the range of 100 to $150 million, but it could be more or less. We're saying that because we have projects on the books, Ben, that could take us past $150 million. Our history tells us that that may not be doable, but if everything that's on our plates now came together, it could happen. And so, we feel an obligation to let you know that. If it did, we'd be ringing bells and high-fiving around the office here.

But is my -- do I have my numbers right? Was that only about $60 million at the 3rd quarter, your CapEx? Did you have a huge amount in the 4th quarter of CapEx?

Rob is across the table from me, nodding yes. The answer is yes, it was quite a lot in the 4th. I'm trying to recall what the numbers were.

That would have been substantially more than you would have expected a year ago for '07, is that right?

When we started '07, I think we were saying 50 to $100 million, so with the caveat it could be higher or lower. So, we ended up being just ahead of the range we talked about for the year. I think, by the end of last year, like at the end of Q3, if I go back 3 months from now, I think on our conference call, we were saying around $100 million.

So, do you guys think that you're hitting a different inflection point in your business? I mean, as you know, I've been listening to these calls for years and watching these numbers, and I've never really -- you've always been a growth company, but the idea of the G&A acceleration and new missionary work and the very high CapEx targets, like, these are sort of higher than what one would have assumed a couple years ago. Do you see the momentum changing, and you've got to capitalize on that? Or what explains these numbers at this point?

Pete, you want that one?

Yes, I'd love to take that one. Ben, this is Pete here. And I think your comment is good that we are pretty opportunistic, and we're looking at the markets that we'd like to be in. If we could go back 5 or 10 years and snapped our fingers and have all of the sites in place today that we would have had 10 years ago, we would be further along the curve. So, we recognize that, that we're already dominant. We're larger than 50 competitors combined in small market share overall, and we recognize that. As we continue to expand our global footprint, it simply feeds the global network and creates -- as example, if we open -- as we open an office in Romania or in Poland, the investment there helps us to create more Polish buyers to come to France or vice versa. So, it's all nicely intertwined. Recognizing that, that we want to continue to expand our global footprint, that if we can do it right away, let's do it. So, we've been on an aggressive kick in the last 2 or 3 years to pinpoint those markets that we think really we need to be in now. Rather than waiting, let's do one a year, and maybe we'll find another one later on. Our Board has recognized that, as well, and they've given us the green light to say, "Guys, we want you to step it up and really make the global footprint happen as quickly as you can reasonably do it." Albeit, you know, we were very vigilant. The Board is full of chartered accountants, as well as a management team. So, we're very vigilant in making sure you're deploying capital with a proper return and proper capital investment decisions are made. But our preference is to be able to do this now. And it's a more aggressive clip than we'll probably stay on for the coming years, and we got lots of appetite for that right now. So, our property guys are running ragged and making sure they're identifying and executing. But I think it's the right thing for us to do where we are right now, that we're taking advantage of some markets where the real estate is going to be worth a whole lot more than it is today. So, let's accelerate some of these markets that we just know we need to be in.

So, having said that, why wouldn't you change your long-term earnings growth projections if you're accelerating your growth initiatives?

Well, we only speak to -- you know, we speak to more of the current term. And on the long term, our goal right now is to be 15% EPS on average over the years. And if we can see that trend trending up, then we'll signal the market that that's the case. Right now, we're not. We're focused on executing the strategy right now and building out the platform for a process improvement. I guess, if anyone has a chance of getting there, it will be us, and growing at a clip greater than 15%. You know, never say never. But we're not guiding to that market number right now.

And just finally, on that number. You said about 13% GAAP target for this year, but it would be challenging to get to 15% earnings growth. Just point of clarification, is that because of the investments you're making, and that you don't expect the leverage to kick in this year?

I'll take that one, Pete. I think we're saying that the leverage is likely not going to improve much this year, so rather than -- it's not kicking in yet. We still think it will come in the future, but, yes, you're right, we think it will be more consistent down the operating statement.

Right. So, 13% GAAP will be your earnings as targeted. Less than that, it sounds like.

I wouldn't say less, but in the range of.

Or in that range. Okay, Great. Thanks, guys.

(inaudible) It's hard to beep over 35% earnings and even the prior year at 24. So, we know we're on a pretty good clip. And I think we're delivering good value for our shareholders, and that's what our focus is --customer value first, employee value, and then shareholder value will follow.

Thanks.

Our next question comes from the line of Scott Stember from Sidoti. Please proceed.

Good morning.

Hi, Scott.

Can you talk about the auction revenue rate? It was down slightly versus last year. Can you talk about the underwritten business? Maybe talk about that.

Sure, the underwritten business -- the percentage of total was virtually unchanged. It goes around 25% both years. It has been, Scott, for many years. And as we often talk about the performance of the underwritten business, it has a huge impact on the auction revenue rate. So, in a given period, if the auction revenue rate is a little bit lower or higher than the prior year, then you're going to see -- we'll attribute that to better performance of the underwritten business. The actual numbers for 2007 was 9.79%, and the prior year in 2006 was 9.48%. So, it's actually a slight improvement. What, did I just give the restated numbers?

Yes, you just gave the restated numbers.

What are the actual numbers, Rob?

Hang on for a second. I'm actually looking for -- that's what the numbers will look like when we give you our comparatives for last year. It was 9.59% in 2006, 9.89% in 2007.

So, up 30 basis points year over year, which just means that the underwritten business in '07 performed better than it did in '06.

I was actually referring to the 4th quarter.

Oh, sorry. And you're comparing it to what, Q4 to Q3 or to Q4 the prior year?

Q4 to the previous year, yes.

Okay. So, I guess, that's just -- you've got a lot of issues there, and now, you're in a very distinct 90-day period with a small number of auctions. It's very hard to compare, but it's easy for me to say that it would be related to the performance of the underwritten business.

And to that point, you haven't seen any trends that would alarm you with pricing? It's just a function of just the general movement within the 90 days that you're referring to?

The underwritten business is affected by a number of factors. And pricing only affects the underwritten business to the extent that pricing moves on it between the date of committing to a deal and holding the auction, and only to the extent that we didn't anticipate that particular pricing movement. So, in a given contract or two, we might have a 30 or 45-day window between the date of doing a deal and the date of the auction. When we price that deal, we're anticipating doing our best, crystal-balling it, anticipating what we think things will sell for 30 or 45 days out. To the extent that we're conservative or aggressive or right or wrong, that can impact it. But it doesn't necessarily mean that prices are going up or going down. It's certainly one of the factors, though.

Okay. And can you maybe just talk about some of the regions throughout the world? I mean, we all know that the U.S. has been soft, and there are concerns about Europe, things slowing down. Can you talk about what you're seeing there and what you would expect internationally?

Pete?

Yes, sure. I'll speak, and then we've got Rob Mackay on the line, as well. Rob's our President. And he's down in Orlando, watching the equipment across the ramp, as he's on the call here. So, I'll ask him to speak after I do.

But in general, what we're seeing is a rather -- maybe characterize it as a perfect storm for Ritchie Bros. in the world. You've got some challenges going on in the United States that are creating change. And for us, change is good. Change creates the need to do something, and we're usually in the middle of that in terms of providing the ability for some to access a global marketplace to get global value. In Europe in general, we're seeing an awful lot of activity in the equipment market. Lots of things going into Eastern Europe in terms of infrastructure build, labor markets shifting, the new EU participants moving into Western Europe to modify and rebalance the labor pools. Lots of stuff going on in Russia. Lots of stuff going on in the Middle East. I mean, massive, massive builds still in the Middle East and huge demand for stuff. Commodity currencies like the Canadian and the Australian economies are going great guns, and there's no real signs of slowing down apart from -- you know, there's issues around environmental things, about making sure that you're doing carbon-neutral and carbon-friendly extraction for power. But at the same time, such a demand in the emerging markets for power that even when we cut back in the first world countries, the third world -- 10 years from now, the third world is going to be consuming more than we consumed [with the thing]. So, there's lots of churn in the marketplace. There's lots of things happening that just for us, really line up with the value proposition that we put in front of our customers, and in being efficient, effective marketplace, transparent and global values being delivered by doing things the same and consistently all across the globe.

Maybe, Rob, if you're on, I'll defer to you, and you can give some more current commentary.

Sure, Pete. Good morning, everyone.

Listening to your part of your call but heavily focused on what's going on here. As we're speaking, we got two auction rings going on, and one of them selling a row of cranes that's anywhere from $400,000 to a $1 million plus a copy. And over the ramp, we've got a huge selection of crawler tractors. So, as usual, as we see here in Orlando, we've got massive international participation in this sale. We're seeing lots of equipment being bought from the northern part of the countries in South America, Colombia, Venezuela, all the oil-producing countries down there, including Mexico. We've got a couple of big buyers here from the African continents. We're seeing pretty good demand and equipment flow going to buyers in the European continent. But as Pete suggested, Europe is still rolling on quite strong. The fallout from the interest rate issues that are going on there is not known yet or yet to be seen, I guess, in our world. We're seeing pretty good demand in that market from the Eastern Bloc countries. Middle East, of course, is booming, and you can see that as they're bidding here today. In the last 20 minutes here, we've sold about a dozen cranes, two of them went to Lebanon, and one of them went to India over the Internet. So, those guys are swooping in here and outbidding everybody in the local market for that commodity. The Asian market, of course, is still strong, as with Australia. And we're seeing a pretty good participation in this auction as a whole from our Canadian buyers. So, all in all, the apprehension that was around the air of this auction at the beginning here on Monday and Tuesday has sure changed. And it goes to show that when you bring the global market into one event like this, it takes out any regional economic disparities that are going on. And the places in the world where demand exists, that's where this product will flow. So, we're pretty excited here today. It's been a great three days, and we've got a couple more to go. But it's pretty positive, what we've seen so far.

Okay. Just one last question. Could you just touch on what's going on on the agricultural side?

Agriculture, well, with commodity prices as high as we've seen them here recently and demand for new Ag equipment, those guys out there have had pretty exciting year -- strong prices in new and strong prices for sure in the used side of it. We would anticipate that the demand for the Ag equipment and maybe the lack of supply not as bad as we probably saw in the construction equipment side of it. Supply will be catching up here to demand, I think, within this year. And you'll probably see a leveling off there. But Ag prices and Ag equipment have been very strong during '07, and we had a little bit of Ag year here and it was very strong.

All right. That's all I have. Thank you.

Thank you.

Our next question comes from the line of Bruce Simpson from William Blair. Please proceed.

Hi. Good morning, guys.

Bruce.

I would just like to point out that contrary to stereotypes, it was the two Canadian guys beating each other up, where the nice Americans are all playing nicely?

Okay. A couple of things. First, just some nuts and bolts. It looked to me like you formally raised your target on auction revenue rate by about 25 basis points to reflect the fees and so forth. However, I believe either Rob or Jeremy had mentioned that there's sort of an implicit 10 basis point dilution to that measure by some -- just moving things around within the various lines in the P&L. So, am I reading it right that, actually, by saying 10%, give or take 25 bips, that that's actually kind of really more of a 35 basis point hike relative to what it was coming into this quarter?

Okay. Sort of, yes. The answer is you're right in that we've raised the guidance 25 basis points, but through reclassification, there is a minus 10. So, it's a pretty small amount. We didn't really make much noise about it. But in fairness, I guess we're saying, Bruce, that we see a little bit of sustainable growth to the last year in that rate. And, so we're willing to sort of bake that in. But it was -- it's pretty small, like 10 basis points, so not worthy of a full parade.

Okay. So, I guess the answer to my question was yes.

You're so sharp, it's painful.

All right. And then can you clarify a little bit on the interest charge -- I'm sorry -- had the interest which will now be broken out separately been earlier included within revenue?

Yes, that's right. It's incidental to our auction business, so we've always included it since day one of this company as part of our auction revenues. But it's become larger and larger. As the company's been growing and we have more and more money flowing through our system, our interest income has been growing. And as Jeremy pointed out in his comments, upon looking at it, this year, we just said, you know what? It's large enough. Let's break it out.

Okay. So, it was about $7 million, I think you said, in 2007?

7.4.

Okay, great. And then just so that I make sure I understand the currency, the $2.8 million. So, is what you're saying simply that it always fluctuates a little bit? And this year, across the 4 quarters is a $2.8 million net benefit to operating income?

Correct.

Okay. So, that seems like it's about $0.05 or so in EPS impact across the full year. Do you think that's accurate?

Yes.

Okay. Cool. And then let's see. Can we talk a little bit about free cash flow expectations in light of what you said about potentially spending a little bit more here in the near-term on CapEx? I know that it can be cloudy, of course, because of the working capital fluctuations around quarter end and so forth, but kind of year on year, can you tell us what you think is a fair total generation of operating cash flow before your CapEx?

I think the best way to look at operating cash flow, Bruce, would be to look at your expectations for total income after tax and add back your depreciation. I don't really think that working capital flows will have a meaningful impact on it. I think you're looking at pretty simple income statement with a depreciation add back to get an idea of your cash flow from operations, and then you've got your CapEx and dividends to deal with after that.

Okay. So, just kind of go with total growth in net income really is the key driver there?

I believe it is.

Okay. Let's see, I guess the last thing for me, and returning to that good old subject of SG&A for a moment, the -- can you -- are you interested in providing a 2008 forecast of what that $42 million might go to, and -- I mean, I realize that the focus here has been sort of generally on '08, may not be the year in which you actually deliver leverage because of ongoing investment. But it might be helpful to sort of quantify what you're thinking for the upcoming year in terms of year-on-year growth for that number.

We have sort of stopped giving line item guidance as of a couple years ago. So, using that precedent, I'll avoid answering the question. The real focus, Bruce, you know, continues to be -- I think, Pete said it really well. We're looking at EPS growth. We still think we'll be able to deliver and are totally focused on delivering 15% per year on average. Sometimes, that will come through improvements in operating leverage. Sometimes, it will come through growth in gross auction proceeds. Sometimes, both. And the signal for this year, it's probably more a gross auctions proceeds story right now. We're still quite committed, convinced and excited about improving the leverage over the longer term. But we're also -- Pete answered to a question a while ago -- very focused on taking advantage of growth opportunities that are in front of us. We have them right now, so we're going to jump on them. There will be times when we don't have those growth opportunities quite as clear as we have them right now. And I suspect those are the years when you'll see the leverage being a highlight part of the story.

It's almost ironic, Bruce, that--I mean, we're working as hard as we can and executing like mad to try to get this foundation built, and we don't deliver the operating leverage that you guys are so wanting to look at. We still think it's the business that's usually net margin, yum yum yum type delivering. But--That's a technical term. The ironic situation is that we just sit back and did nothing, which would be real easy for us to do. We probably drive higher percentage of return relative to the metrics you guys tend to look another in terms of how well are you guys performing. So, we got this sort of long-term view that if we built in the frontier markets now, 10 years from now, we're going to look like heroes, but we could look like heroes today and just sit in the hammock and watch things kind of clip along, and we'd look like heroes for 10 years until somebody figured out we should have been busier today than not. So, it's a bit of an anomaly, I guess, from the way things sort of work out, but we're still focused on long-term stuff. We think in 5 and 10-year chunks, and that's the way we're going to continue to think.

And, Pete, earlier, you mentioned return on invested capital as kind of a key governor on your capital decisions as you look to ramp up the CapEx. Can you share what capital base you're using? Kind of on a firmwide basis not just to open site by site. But is there any particular measure which you grade yourself on, that you can look back and say the return that we watch for '07 was this number?

Yes, Bob, do you want to take that or--?

Sure. The ROIC is an important measure for us in a couple of different ways, Bruce. We look at it every time we look at an investment in an auction site. We want to see what is the expected return on a particular investment if we did isolate it. But more importantly, what is the likely impact on the ROIC for the company as a whole? And we spent quite a bit of time with our Board, actually, on that very topic. Capital allocation is an important issue for management and for the Board. We're consciously eroding our ROIC over the short-term, every time we have large investments. But as Pete said, that's because we're consciously growing it over the long term. We don't want to see it slip very much. But we're quite happy to see it go down a little bit, knowing that it's got a long-term payoff.

Okay. Can you repeat the number of territory managers you ended the year with?

265.

265.

How many do you think you'll end '08 with?

If I had to guess, I think we would add 5 to 10% to that number during the course of the year.

Okay. And last thing -- I'll get off. When you think about gross auction proceeds as the primary driver of earnings growth in 2008, is there a particular geographic region that you would expect to be growing faster than the others?

Silence being jumped into by Bob here. The answer is United States and Western Europe, in my opinion. I think over the next five-years you'll see the bulk of our growth in terms of dollars in the U.S. and in Western Europe. If you look at it percentagewise, I would look to Western Europe to be the larger percentage grower.

Okay. Thanks, everybody.

Our next question comes from the line of Gary Prestopino from Barrington Research. Please proceed.

Hey. Good morning, everyone.

Hey, Gary.

Bob, I couldn't write down fast enough in terms of what you did in sites for 2007. Could we just go through that in terms of new permanent auction sites, regional sites and land purchase for future sites?

Yes, let me just flip to the right page, so I get the right information. We added -- Jeremy, correct me if I get the number wrong. But I think we added a net four sites, or not a net four -- excuse me -- but we opened four sites last year, and then we opened a site in Las Vegas the beginning of this year. We moved to a new location in Las Vegas and signed a longer term lease, and so we now have a regional auction unit in Las Vegas as of just few --as of a month ago. Page, 8.

That's right, Bob. In 2007, we opened regional auction units in Hartford, Connecticut, and just outside Paris, France, and then we opened new permanent auction sites in Columbus, Ohio and Denver, Colorado.

Denver was a replacement.

Yes, Denver replaced our old site in that market.

And we also opened--.

And you're still on track to do -- as far as land goes for new sites, you're still on track to do 3 to 4 this year?

I guess I said two to three, but you're right. For the current year, it could easily be 3 or 4.

And you've got -- the ones that are coming onstream in '08 are Kansas City. Houston should come onstream later in the year. Paris should come onstream later -- Paris, France, later in the year. And we--.

And possibly Minneapolis.

And KC is a replacement site?

No, it's new. Net new.

(inaudible) Houston is new or replacement?

Replacement.

Paris and Minneapolis are new?

Paris is new, and Houston -- Minneapolis is a replacement.

Paris is replacing a regional auction unit in the market.

Well, when I say replacement, I mean replacement of a permanent auction site.

Okay. Alright. Thank you.

Totally confusing.

Our next question comes from the line of Craig Kennison from Robert W. Baird. Please proceed.

Good morning, everyone.

Hey, Craig.

Many of my questions have already been asked. Maybe I'll go and ask about Orlando just once again. You mentioned it was going terrific, I think. Can you mention whether your lots are up year over year at that auction so far?

Lots meaning number of lots?

Correct.

Where do I go, Bob?

Go ahead, you can answer the question.

Sorry. I was on mute, so I unhooked.

What's the number of lots in the sale, Rob?

The number of lots is down slightly from last year, but the dollar volume average is up. We're somewhat constrained here for space, and so we purposely shied away from some of the smaller items that we would have typically sold and focused on the bigger higher-dollar volume. So, number of lots may be down a couple hundred, but the average value per lot is up.

Okay. Thank you. That's helpful. And then you did address a lot of the geographic issues that are really benefiting your company. Could you talk about some of the change happening in various industries such as residential construction for example, and whether there's still momentum in sort of liquidation of assets in the residential sector?

Well, maybe I'll comment on it quickly, Craig, and then ask Rob to chime in, as well. On the residential side, a lot of that -- you recall a lot of the equipments used in residential construction that can be used in other forms, nonresidential construction, as well. So, unless it's specifically or targeted primarily for use in that particular industry, it gets redeployed. The issue becomes one of utilization for the guys that have the equipment and whether they can make money with it. And some of these guys that were perhaps solely focused on the residential construction side and can't redeploy it or they don't have the expertise to redeploy it on the non-res side, they will choose to redistribute the equipment through a distribution channel, hopefully ours. The demand for that equipment, however, can be driven by things other than the housing market. The U.S. economy is 13 and a bit trillion dollars. And in a recession -- if you had a huge recession, you'd be down by what? 2 or 3%, which would be catastrophic in the eyes of the Wall Street world. But the reality is in our world, people are still building roads, and bridges have to be repaired, and things just don't stop out there. So, there's still a demand for equipment out there. And what happens is people turn to more--rationalizing purchase decisions and acquiring a loader with 600 hours on it rather than a brand-new loader to got and get the job done. So, that's the perfect storm stuff that we talked about earlier. That's really what we see. That's not on the residential side. Non-res, I think things are going fairly strongly. I mean, just in the United States only. Different markets occur. In the Canadian marketplace, things are going very very well, lots of activity. We've already spoken to some of the other Middle Eastern and Asian markets, Australia, commodity currency-related things.

Rob, you want to throw a few comments in?

Sure. Typically as we see it out there, the housing industry starts the cycle and a bunch of equipment goes into it and--sorry, I'm on speaker. There you go. Sorry. And you see a bunch of equipment go into the housing market. Once the housing -- tracts of land are leveled and the sewer and water guys go in and build it, houses get built, and what follows after that, obviously, is the commercial side of it -- the schools, the mega malls, the vertical construction of the offices is going on. And we're at the point right now where we've seen the slowdown and that stop in the housing, particularly in the number of states. But overall, you feel the pinch across the country. But there's lots of commercial stuff going on, shopping malls and that sort of stuff, catching up to the housing end of it. So, a lot of this stuff that was used in residential construction, as Pete mentioned, has moved across into the other types of construction. Albeit that things like telescopic forklifts that are used in and around housing projects, there's no secret, there's a surplus of those around. We sold 222 of them, I think, yesterday in Orlando. So that's a big, big number for one auction sale. But given the pricing that occurred on them, it was still pretty decent. And they've just moved into either other markets or other industries. So, housing has affected it. Guys that used to work on leveling sites in California and Arizona that [fourtracks] the land, they've had to take their big motor scrapers and go and focus on highway projects or other things, which, of course, has created more competition on the other jobs and more competitive pricing for the people that are out there tendering it. So, it's either gone into different types of work, or in some instances, as we've seen in California, some of those big motor scraper fleets are on the market and for sale.

Okay. That's all very helpful. And lastly, could you just address any progress in the opportunity you have in the real estate market? Thanks.

Rob, you want to take that or --?

Sure. The real estate market is something we've got our toe into. We're not jumping in there head first by any stretch. It's a market that has behaved typically different than what we have in our normal world. It has reserves on it. It has all sorts of different parameters around it that we have not been used to dealing in, nor maybe would we. We've got a team of guys put together. And we're moving along slowly and pursuing opportunities that we think are the best fit for us, but not at any breakneck speed, nor do we plan to. We're going to go at it relatively slowly and nibble away at the stuff that makes the most sense to us.

Does that help, Craig?

Thank you.

James, we probably have time for one more question, and then we'll wrap it up.

Okay. Our last question comes from the line of Susan McGarry from Granahan. Please proceed.

Hi. I was wondering if you could just go into a little more detail about the auction rate because it was quite different from the last few quarters. And so, was the mix of underwritten business different, or was there a big change in pricing? Could you give us a little more detail on that?

[Susan, it's] Bob. Really the answer is unfortunately, no, there's no magic answer. The explanation is very accurate and consistent with what we've said in the past when the rate has been higher or lower than prior quarters and it's to do with the performance of the underwritten business. If I look deeper within just the underwritten business, I can't find any particular single event or package or style of equipment or geography. It really was very much across-the-board. It would be nice if we could find a particular explanation and sort of take actions specifically geared toward that. But I can tell you, we approach the underwritten business in Q4 exactly the same way as approached in all prior quarters. The results are very much an up and down. You don't see it, but I get graphs of how the underwritten business performed all by itself. And there's nothing unusual in that graph. Yes, it was down from the prior quarter, but it often seesaws around. If I was to see 5 or 6 quarters in a row, all performing in the same kind of really good or really bad way, I call it a trend. This is not a trend. At least, there's no evidence of it. It's a single data point and has not caused us any undue stress. It's no different than any other quarter. I wish I didn't have that answer because it would be really tempting for all of us to be able to hang our hats on something. But interestingly, in this case, as in most other quarters, no such answer.

Okay. I have a couple more questions. In terms of your gross auction proceeds, expectations for this year, it also represents a little bit of a deceleration from last year, and you have spent a lot of time on the call talking about growth opportunities. So, in terms of, like, a 15% top-line growth, you think that that is a thing of the past, and you're growing off of a bigger base? Or is there something in particular about '08 which is decelerating the growth rate temporarily?

I'll try that one. And then, Pete or Rob, if you guys want to jump in with additional comments.

I wouldn't say that it's something special about '08. It's a tough comp. 13, 14, 15%, those are are the kind of rates that are comfortable for us in terms of sustainable growth. We did ourselves probably a disservice by having a 30% growth rate two years ago. That set people's sights pretty high, almost killed us as a company, though. It's very tough for us to grow that fast. It's very much of a relationship business, and to build our people up, that kind of light speed, to take that on, was tough on the company. Growing in this 10 to 15% range, and I guess, this year, we're thinking we're in the middle of that somewhere. That's a comfortable, sustainable long-term growth rate for us. And so, we're quite pleased if we can pull that off. We are definitely coming off some tough comps and that -- maybe that has us being a little bit cautious. 13% feels pretty aggressive to us, given what we've pulled off in the last few years.

Pete, Rob, other --.

Yes, it's not a perfect science by any stretch to come up with a number. We do the best we can for forecasting, and we say, "in the range of," because we do mean that. Last year, we guided at 2.950 and we ended with 3.1, so clearly exceeding our initial expectations. But we refine them as we go along and we get a little more clarity, a little more visibility in the coming quarters. So, stay tuned for the April call for Q1 because we'll update you guys on that number, as well.

Yes, okay. That's really helpful. And then my last question is what was the geographic breakdown of the revenues for the year?

You know what? That will be -- that's published, so I can tell you as I flip quickly through my financial statements. My segmented of information. I know it's in here.

Just broadly, it's about 56, 57% in the U.S., maybe 55-ish. Canada's is about -- between 17% to 20%. Europe is a little bit less than that, and the rest of the world sort of picks up the rest. Pretty close?

Yes.

What was Europe?

Europe was about -- around 12%.

Okay. So, 55%, U.S., Canada, 17 to 20%, Europe 12%, and the rest of the world is the remainder?

Yes.

Great. Thanks so much.

Great.

Okay. Thanks, everyone. I appreciate you dialing in. And we'll get back to work. Mackay, get back on the ramp and start catching some bids. And we'll look forward -- please look for our press release following the Orlando sale, which completes on Saturday, so we'll have a press release out early next week to give you all the color, and particularly, note with interest the activity from the non-U.S. buyers. I think you'll see a real strong surge of buying coming from outside the United States, and we're experiencing that the last two days and even today, as well. We'll give you more color and hard numbers on that in the press release, okay? Thanks, everyone, appreciate your time. Thanks, James.

Thank you. Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation, and ask that you please disconnect your lines. Thank you.