RB Global Inc (RBA) 2018 Q4 法說會逐字稿

Good morning, afternoon, evening. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers Fourth Quarter Conference Call. (Operator Instructions) I will now turn the call over to Mr. Zaheed Mawani of Investor Relations to open the conference call. Mr. Mawani, you may begin your conference.

Thank you, Emily. Good morning, and thank you for joining us on today's call to discuss our fourth quarter and full year 2018 results. I'm joined this morning by Ravi Saligram, our Chief Executive Officer; and Sharon Driscoll, our Chief Financial Officer. Also with us today for the Q&A portion of the call will be other members of the leadership team. The following discussion will include forward-looking statements as defined by the SEC and Canadian rules and regulations. Comments that are not a statement of fact, including projections of future earnings, revenue, gross auction proceeds or other items, are considered forward-looking and involve risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our SEC and Canadian securities filings available on the SEC and SEDAR websites, as well as our Investor Relations website at investor.ritchiebros.com. Our definition of gross transaction value may differ from those used by other participants in our industry. It's not a measure of financial performance, liquidity or revenue and is not presented in our statement of operations.

Our fourth quarter and full year results were made available yesterday evening after market close. We encourage you to review our earnings release and Form 10-K, which includes our MD&A and financial statements which are available on our website, as well as EDGAR and SEDAR.

On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures to the most directly comparable GAAP financial measures and a reconciliation between the two, see our earnings release and Form 10-K. Presentation slides accompany our commentary today. These slides can be viewed through the live or recorded webcast or downloaded from our website. All figures discussed on today's call are in U.S. dollars, unless otherwise indicated.

I'll now turn the call over to Ravi Saligram, our Chief Executive Officer. Ravi?

Thank you, Zaheed. Good morning, everybody, and thank you for joining our fourth quarter earnings call. We've had a great year in 2018 and strengthened the company in more ways than quarterly financials reflect. Technology is truly becoming a competitive advantage. We are systematically addressing legacy systems. We are a digital leader in our industry. Our operational prowess is noteworthy. We're driving efficiencies with scale, and our data analytic capabilities are accelerating. We've strengthened our core competence of connecting buyers and sellers in multiple channels across multiple geographies and multiple sectors.

Let me illustrate with a day in the life of Ritchie Bros. Take Thursday, December 6, this was an exciting day. We're not saying everyday goes this way, but this is indicative of the new Ritchie Bros. On our websites, 295,000 unique users or visitors visited various RB properties around the globe. Many of these users were new users based on Google Analytics. These users generated 390,000 sessions. Of these sessions, 54% of them were on mobile devices, 43% originated outside Americas, 48% were between the ages of 25 and 54 (sic) [44], a prime demographic.

Again, the new Ritchie Bros. is not just one father's company, it is also a son's company and a grandson's company and a granddaughter's company. The tradition of multigenerational customers working with Ritchie Bros. is alive and well as we remain passionately committed to deep and enduring personal relationships. At Ritchie Bros., every day is a new day. Our mantra is move, build, grow. Take this past Tuesday, February 26, 2019, the number of users jumped to 345,000 and the sessions to 445,000. These are impressive figures and while not every day may be like these, the examples bring to life the power of the platform and domain we're growing our base.

Since I mentioned December 6, let me talk about the week of December 9, 2018. In just that week alone, we sold 1,281 trucks across both our RB and truck liner platforms for a total of $30 million, shattering our previous weekly record on December 6, 2015, when we sold 875 trucks for $25 million.

In fact, transportation, which is partly trucks, trailers, but excluding vocational trucks, drove GTV up over $860 million in 2018. If you add vocational in there, it is well past $1 billion. We're no longer just a yellow iron company, we're much more. While construction remains our core with 57% of GTV in 2018, transportation is 17% and agriculture is 9%.

In 2018, 59% of our GTV was online, which includes the portion of online associated with the live auctions. Essentially, across all our channels, 59% online.

At the end of 2018, we had over a million followers on Facebook, Instagram, Twitter and LinkedIn, up 26% versus 2017. And we had on average, 5 million users per month visiting our websites and generated 580 million page views in all of 2018, which is why we drove 8.5 million bids in 2018 across all our channels, up 16% versus 2017. You can see we are clearly generating network effects and are more than an auction company, much more. Let me turn it over to Sharon, who will go through the fourth quarter results. I'll return to discuss 2018 and our outlook for 2019.

Thank you, Ravi, and good morning, everyone. Looking at our fourth quarter performance, GTV was up 3%. While we aspire for more, we view this as a positive outcome, and are pleased with our ability to navigate tough market conditions as equipment availability continued to be tight in the quarter. From a channel perspective, GTV growth was led by another quarter of strong online performance, with double-digit growth in our weekly featured auction. Our live industrial auctions grew at low single digits, albeit with 15% fewer selling days and 23 fewer industrial auctions year-on-year.

Live auction comps continued to deliver well with 70% of our live auctions posting year-on-year positive comps in the quarter. Regionally, Canada led the way with strong double-digit GTV growth, with both the Western and Eastern regions performing well, and notable in profit performance by our agriculture business posting 43% GTV growth. Our international GTV grew mid-single digits, led by good performances in the Middle East, Australia and Europe. Our U.S. region delivered another outstanding online quarter, but was slightly down overall. Despite the strong online performance, the U.S. continued to disproportionately feel the effects of the equipment supply shortages as well as cycling a major nonrecurring Kruse auction event from the fourth quarter of 2017.

To recap some auction highlights in the quarter, in the U.S., our Fort Worth auction sold $60 million of equipment and delivered 19% year-over-year growth; our Houston auction posted 11% growth and set site records for bidders and confiners; and our Chehalis, Washington auction posted $27 million in GTV and 25% year-over-year growth. Our Canadian team posted strong results in both Edmonton auctions for combined growth of 19% over last year. Our Toronto site continued their record-breaking streak in the fourth quarter selling $29 million, a 36% increase over 2017. Internationally, our Moerdijk, Netherlands auction drove $48 million of GTV and posted a massive 69% growth over the previous year, posting their largest sale in 10 years. And finally, our Dubai site held a $37 million auction and posted 47% growth over last year's December sales.

Moving on to revenue and agency proceeds. Our revenue and agency proceeds were up 22% and 8%, respectively, driven by higher revenue from inventory sales in the U.S. and Europe, as well as higher fee revenues and growth in our other services led by Ritchie Bros. Financial Services. Our agency proceeds growth of 8% was driven by the partial buyer fee harmonization, offset by some weaker guaranteed contract performance, particularly in the U.S., which I will discuss in more detail shortly.

Our adjusted operating income improved 33%, led by improved leverage from strong expense management, coupled with lower acquisition-related costs in the quarter and a small increase in property gains from the sale of 2 closed site locations. Adjusted earnings per share growth grew 23% for the quarter due to strong operating income performance, offset by a slight increase in interest costs and an increase in the quarterly effective income tax rate to just over 25%, bringing our full year tax effective rate to 20.3%. The increase in the quarter tax rate is due to a greater proportion of our earnings being taxed in jurisdictions with higher tax rates. Also in the quarter, the U.S. tax regulations were clarified, resulting in a minor true up of the tax rate provision impacted by these new rules. As we continue to grow earnings in the U.S. and Canada, and with the dynamic changes to international tax regulations, we believe it is appropriate to model our effective tax rate for 2019, which we expect to be in the range of 26% to 28%.

Turning to our fourth quarter Auctions and Marketplaces segment agency proceeds. These proceeds were up -- agency proceeds were up 8% in the quarter, driven by continued online GTV growth, with favorable impact of the partial fee harmonization and year-over-year price trends. One notable offset to these agency proceeds growth drivers was softness we experienced in some of our guaranteed contracts in the U.S. While we have significant experience in pricing at-risk and inventory deals, inherently, there is always some level of uncertainty when the item ultimately sells at auction. In December, we saw fluid pricing environment on certain categories, such as scrapers and motor graders at a small number of auction events. This in turn drove some price softness, resulting in certain deals selling at the lower ranges of our guaranteed pricing.

A&M agency proceeds rates improved 80 basis points over last year to 13.4%. This year-over-year rate improvement was driven by the stronger year-over-year pricing environment and the favorable impact of the partial fee harmonization. Sequentially, however, we did see the agency proceeds rate decline roughly 50 basis points from 13.9% in Q3 of 2018. In this quarter, we did see an increase in the volume of at-risk deals sold and increased to 21% of GTV, up from 17% of GTV in Q4 of 2017, and also up from our 2018 full year rate of 17%. As the market continues to be extremely competitive for supply, our sales teams have been aggressive to secure volume. And with increasing uncertainty in the economic outlook, we did experience some lower rates on at-risk deal performance in the quarter. Although supply may be loosening, it still remains competitive for quality gear and packages, and we may continue to see some downward pressure on at-risk rates relative to our positive rate experience during most of 2018. We maintain our Auctions and Marketplaces agency proceeds rate range of 12.25% to 13.25%.

Turning now to our Other Services category. Our Ritchie Bros. Financial Services business continues to deliver double-digit growth with revenues in the quarter solidly up 50% to $7 million. Our financial services program continues to have a robust growth outlook. We see several pathways to grow, including increasing our live auction penetration, a significant opportunity to grow our IronPlanet financing program, and lastly, building on early success of our Follow the Customer initiatives.

Mascus has also generated revenue growth in the quarter of 3% to $3.1 million, as it cycled over strong Q4 2017 performance and ended the full year with 21% revenue growth over 2017.

Moving on to expenses. Cost of services and SG&A expenses combined increased 7%. Cost of services increased 18% to $46 million, with the majority of the increase related to the repair and haulage costs associated with the increase in ancillary revenues associated with our at-risk contracts, primarily in our European region. In addition, we did incur an increase in our direct expenses related to our GovPlanet operations to support the new government surplus contract, which was partially offset by a reduction in live event costs due to fewer live events conducted in the quarter. In moving the portion of cost of services included in agency proceeds calculation, the year-on-year growth is 4% or half the rate of the agency proceeds growth.

Our SG&A was very well controlled in the quarter, with an increase of 3%, driven by continued investments to operationalize our GovPlanet surplus stock contract and higher incentive compensation, offset by lower share unit expenses and lower travel and entertainment expenditures. Overall, we continue to make good progress with our cost management initiatives and are encouraged by another sequential quarter of SG&A leverage, as our agency proceeds growth nicely outpaced our SG&A expense growth. This is particularly positive as we are finding ways to drive our expense discipline mandate in the company without compromising our investments in our growth businesses, such as GovPlanet, RBFS and RB Asset Solutions.

On a rate basis, SG&A was 50% of total agency proceeds, down roughly 200 basis points from the fourth quarter of last year. This rate performance came in slightly better than expected. As you recall last quarter, we provided the expected range of rate improvement for Q4 to be between 50 to 150 basis points.

Looking ahead, we will continue to stay focused on our cost management, and we expect continued improvement with slight incremental SG&A leverage in Q1 over last year's Q1 performance.

Turning to our balance sheet and liquidity metrics. We are very pleased with our strong balance sheet position and cash flow generation in the year. Our operating free cash flow of $112 million is exceptional strong when you consider the CapEx investments in the year to support integration activities and the development of MARS and the investment of $75 million in inventory to support future revenues in our international, U.S. and government business units. A small portion of this inventory is considered permanent resulting from the startup of operations to support the new government surplus contract. Most of the inventory increase, however, is related to our normal deal activity, which will flow into auctions during the first half of 2019. Our debt reduction is well ahead of schedule, with an additional voluntary repayment of $30 million in Q4, taking total voluntary repayment in the year to $80 million and total debt reduction of $102 million in 2018.

We ended the year with an adjusted net debt-to-adjusted-EBITDA ratio of 1.9x, down from 2.9x last year and well within our Evergreen Model target of below 2.5x. The credit rating agencies have noticed and they've responded with recent upgrades.

In the second quarter of 2018, we also modestly increased our dividend and for the full year returned $76 million to shareholders. We continue to prioritize having a strong balance sheet to ensure the company has significant financial flexibility and capacity to fund our growth, remain well positioned for any market condition changes and to seek high-value opportunities to increase long-term shareholder value.

Our financial focus for 2019 will be on operating leverage, cash flow management, prudent capital allocation and managing changes resulting from the revenue recognition accounting standard. We feel good about the progress we are making in driving productivity and SG&A leverage. In 2019, we will remain very focused on driving efficiencies into our operating model and increasing our flow-through and margin expansion by maintaining cost growth lower than agency proceeds growth.

Ritchie Bros. is a business with a strong cash generation profile. And in 2019, we will continue to be focused on operating free cash flow growth to improve the earnings and working capital efficiency. A few areas we'll be prioritizing are the optimization and efficient management of our GovPlanet inventory levels, supporting our international growth with sound management over equipment inventory purchases and total at-risk deal management across the company.

Turning to our capital allocation, we reiterate our previously stated allocation priorities and will be prioritizing continued debt reduction and maintaining our leverage ratio below 2x. From a capital expenditure standpoint, we will continue to invest in technology and back office efficiency projects with our normal maintenance capital programs with our large sites in place. We remain committed to our dividend, and we look to return cash to our shareholders through ongoing dividends within a payout ratio of 55% to 60%. And once our leverage ratio is well below our stated target, we will have the balance sheet strength and flexibility to consider other strategic options such as share buybacks and acquisitions.

Finally, as you know, we adopted the new revenue recognition accounting standard in the first quarter of 2018. As part of that change, we introduced agency proceeds as a supplemental non-GAAP measure as we felt this would be helpful to investors to understand that sometimes volatile nature of our revenues, given that the portion of revenues derived from inventory as opposed to consignments, can fluctuate considerably.

Based on letters and discussions with the Securities and Exchange Commission, we have been unsuccessful in convincing the SEC that this measure is a helpful supplemental measure, and as such, they're affirming their stance that this measure could be misconstrued as a substitute for revenue, and we have been informed that we must discontinue the use of agency proceeds in our MD&A and investor materials beginning in Q1 of 2019. As such, we will continue to improve our disclosures to assist the users of our statements to understand the volatility that the mix of contracts now plays in our revenue. You will see new charts in our 10-K that identify new metrics, such as revenue from inventory sales as a percentage of GTV and as a percentage of revenue, also cost of goods sold as a percentage of total operating expenses. These measures will form the basis of our discussions related to revenue and operating costs in future filings. We are working through the impact of this decision on our Evergreen Model metrics, but must emphasize it is strictly a change in revenue presentation and this does not change how we fundamentally operate or manage the business. We are working through the change and expect to keep you apprised on this issue as we progress through it.

To close out the quarter discussion, I would like to thank all Ritchie Bros. employees for their dedication and significant efforts to deliver successful quarter and a strong year. I am very excited about the long-term prospects and growth opportunities ahead of us.

With that, I'll turn it over to Ravi to discuss the full year of 2018 and the future ahead.

Thank you, Sharon. Just a reminder that we purchased IronPlanet in June 2017, and our reported data includes only 7 months of IP in 2017. When I compare 2018 to '17, I'll provide like-for-like comparisons where possible. I'd like to now spend some time sharing some deeper insights on the full year of 2018, as we felt it was a year of tremendous progress and one where we accelerated our strategy on many fronts. From a financial perspective, it was an excellent year for Ritchie Bros. We delivered record GTV, touching $5 billion; accelerated our top line with agency proceeds up 19% on a reported basis and roughly up 11% on a like-for-like basis versus the prior year. Importantly, we worked hard to drive synergies and control SG&A costs to improve leverage. Specifically, in the second half of 2018, the agency proceeds were up 10% on a like-for-like basis, while SG&A growth was up only 3%, which allowed us to deliver a 33% increase in adjusted EPS, all while navigating through one of the toughest equipment supply environments we have seen.

Let me touch on our key growth drivers in 2018. I am pleased to say we grew both live and online channels under unprecedented equipment supply challenges. Our IT weekly auction momentum was galvanized by a hearts and minds tour in the second quarter that acted as a catalyst to deliver consecutive double-digit growth over the last few quarters. MPE has become an attractive complement to the live auctions, specifically in Canada and international. But the part I am extremely pleased about is that the combined Ritchie Bros. and IronPlanet companies online pure-play volume in 2018 significantly exceeded the pure-play online volume generated by IronPlanet in its peak year of 2016 as a stand-alone company, excluding tier auction services that includes live auctions.

Our go-to-market execution of selling multi-channel is improving, and we are building momentum with online, both operationally and culturally, and I would expect to carry that strength into 2019.

Our Ritchie Bros. Financial Services team went from strength to strength, each quarter, delivering 44% total revenue growth in 2018, and as of the fourth quarter, 27 consecutive quarters of double-digit growth.

Importantly, Ritchie Bros. Financial Services achieved close to 19% penetration of addressable GTV, up 390 basis points versus prior year. Our aspirational long-term opportunity would be get -- would be to get penetration up to 25% or higher. With new customer acquisition being critical for us as a growth driver, our Strategic Accounts group really stepped up and drove new customer acquisition growth and impressive double-digit GTV growth in each of the last 3 quarters. The Strategic Accounts team acquired 181 new accounts in 2018, which generated roughly $100 million in GTV. Canada returned to strong growth levels as that team aggressively focused on new business, including selling agricultural real estate utilizing market pricing. International is steadily gaining traction from mega inventory deals, leveraging the CAT Alliance and championing marketplace deals.

International alone delivered $100 million in pure-play online GTV, excellent results for a first year startup. These were all fantastic growth and market penetration accomplishments. But I would remiss if I didn't comment on the strength of our CAT Alliance. The partnership is driving value as evidenced by incremental CAT volume growth in 2018, especially in international, and the relation should be a key catalyst for repositioning our Japan business. You'll recall before the alliance, we were close -- poised to close down the site and now it's been reinvigorated, and Narita delivered the strongest GTV year in its history.

Last year, I laid out 4 key strategic objectives for our teams: First, grow our auction business; second, penetrate the upstream nonauction segment; third, deliver magical customer experiences; and fourth, achieve operational efficiencies. We made major strides against these priorities in '18, driving auction growth starts to driving GTV, for both live and [IPVT] and optimizing our model for both events and -- as a regular flow business. Our live industrial auctions, while growing modestly, did so with greater than 65% of auctions delivering year-on-year comp growth and notably with fewer auctions and overall fewer selling days.

Marketplace-E is targeted at giving the customer who transacts privately, control over the disposition price with 3 reserve-type formats. RB Asset Solutions is driving strategic partnerships at the retail level of upstreams, with large OEM dealers, OEMs and major national global accounts by offering inventory management systems, data analytic and pricing tools, inspection apps, workshop services, et cetera.

In 2018, we achieved a mix of 83% live auctions and 17% online on GTV. Longer term, our aim is to deliver a 75%-25% mix. We made good progress on both improving the customer experience and driving operational efficiencies. In fact in many cases, the same initiatives, such as MARS, allowed us to achieve both goals. MARS has replaced RB's legacy live site-by-site auction operation system with a cloud-based common IronPlanet technology platform. Modules have been sequentially introduced with great success. We introduced the registration module in Orlando, which reduced customer rate times, and our MARS title module has reduced handling titles from 2 days to just 2 minutes -- well, maybe a few more minutes than that.

Our mobile app is growing from strength to strength. In fourth quarter 2018, over 10% of online GTV was driven through the mobile app. We relaunched RitchieSpecs, adding 4,000 new specs. RitchieSpecs, where equipment specs are provided, is widely used by customers and reinforces the perception of Ritchie Bros. as a top leader. We also now have both IP and Mascus on Oracle. Last, but not least, we created a data-like merging IP in RB customer data, which will be very useful in cross-selling and valuing new business.

Turning now to our Evergreen Model update. As a reminder, we created our Evergreen Model in 2015 to reflect our expectations of how we believe our business will grow on an average annual basis over a 5- to 7-year horizon. On this basis in 2015 and '16, as a stand-alone company, we achieved all our targets with the exception of GTV. In 2017, we were challenged in delivering most of the metrics, except for 3 since it was both a transition year post the IP acquisition, and we were severely impacted by the supply shortage.

In 2018, through stronger operational execution performance, we've met the majority of our Evergreen Model metrics. Notably, the ROIC and adjusted EBITDA targets have finite achievement dates in the future, but both metrics showed good progress, with ROIC improving year-over-year and adjusted EBITDA rate expansion to 35.3% for 2018. We continue to be committed, we focus on achieving the 40% EBITDA target by 2019 on a run rate basis.

Our Evergreen Model serves as a playbook for driving shareholder value. In 2018, we delivered 11.6% total shareholder return, significantly higher than the S&P 500, MidCap 400 and Russell 2000. On a 3-year period, our TSR was 32%, which compares favorably to the same indices.

Ultimately, the most attractive component of our model is that we are a cash-generating engine. In the last 5 years, we achieved a cumulative operating free cash flow of $675 million and returned over -- nearly 2/3 of this to shareholders, primarily in the form of dividends and some share buybacks.

In 2018, our newly combined teams came together and delivered a record-breaking Orlando auction -- I'm sorry, that was in 2018. In 2019, our teams executed to build and showcase the largest selection of inventory ever, cleaning up every square inch of our 222 -- 220-acre site. It was (inaudible) historically because we delivered another record-breaking Orlando auction in February 2019, with $297 million in GTV, up 7% versus last year. And I am pleased to say that we delivered fantastic results without any safety incidents. Safety is of the utmost importance to us, and making sure our team members are safe is a priority for all of us, and it's #1 priority. We had approximately 10% more sellers than last year, with total registrants up 19% and online registration up 31%. And probably many registrants came through our GovPlanet registered user base. This is another proof point that our network effect is definitely having an impact. We experienced strong pricing on late-model OR construction equipment, but softer pricing on older equipment with higher usage in hours. Orlando was a major success, but we need to be careful not to extrapolate Orlando's results through the quarter or the year as Orlando is a one-of-a-kind global event.

We're also pleased that February auctions in Tipton, California, Houston and Edmonton and Maltby, U.K., have all grown versus prior year.

Moving now to some considerations for H1 of 2019. As you know, we do not provide guidance since it's extremely difficult to forecast this business and especially on a quarterly basis. However, we're opting the following insights for your consideration as you model the first quarter of 2019.

First, the tailwinds. The higher levels of supply we've been able to source and showcase at our auctions early in 2019 are encouraging indications. Now the overall supply environment is starting to loosen up. Our sense is that end-user projects still remain healthy, but not as robust as in 2018. OEM production levels appear to be catching up with pending orders, allowing dealers and equipment owners and like to begin defleeting older equipment and upgrading to newer (inaudible) more hour but used options. Now this is not a case for all asset classes. Lead times are still long in certain categories. The demand and supply harmonization combined with the possibility of a slowdown in economic demand with certain global economies already showing signs of contraction, all point to signs we should start to see loosening of supply. We will also look to capitalize on various North American projects that are currently bottlenecked. End users have been carrying fleets in anticipation of various infrastructure projects that have not moved forward, and the cost to carry nonworking inventory could create opportunity as they look to sell off equipment. At the same time as even pipeline projects get completed, there could be significant lease returns to OEMs and dealers, which eventually, we hope, will find its way to RB channels.

Next, the headwinds. With the supply landscape looking as though they're starting to loosen, and we're seeing a gradual moderation in the rate of price-performance growth in construction. However, when looking at transportation and order of trucks, pricing is still holding strong. One category where pricing is actually soft is material handling as regular companies return highly used high hour boom and scissor lifts, et cetera. We're carefully monitoring the evolution of pricing trends and taking them into account as we price underwriting deals. It is to be expected that some deals could be impacted as the market inflects. We saw some of this in the U.S. in the fourth quarter and even in Orlando recently. We will be agile in our pricing and pivot as needed. There are few other considerations, which we feel are important for our investors to understand.

First, in terms of Q1 auction comp, our Grande Prairie site will have one less auction this year, as the Q1 auction last year, which generated $37 million in GTV, won't come in Q1 of 2019. Second, to reiterate Sharon's comments, we will have a higher effective tax rate due to continued changes in tax legislations. And in the first quarter, we'll have a fewer number of selling days versus prior year.

For 2019, we have 5 executional priorities. The first is to relentlessly drive multi-channel new customer acquisition through stronger executional cadence and operational rhythms with our sales organization to drive new business through buyer conversion win backs and new customer acquisitions. Second is to drive upstream through aggressively scaling Marketplace-E by enhancing the differentiating value proposition, driving yield and fill rate improvements and enhancing our service initiatives. Third is to grow our government business as we utilize all channels, including live and bring the full force of Ritchie Bros.' resources and marketing muscle to scale the business. We're also highly focused on managing inventories and rapidly increasing throughput and sell-through. Fourth is to secure a key set of reference accounts for RB Asset Solutions. We're focused on quality over quantity, and we look forward to on-boarding 10 to 15 core strategic plans and build a solid foundation and exceptional customer experiences. And finally, pursue efficient operations and strengthen our sales support functions, continue to implement our MARS platform and drive value-added improvements for our customers in our back office functions. These priorities will be driven in the context of keeping SG&A under control. We are committed to keeping SG&A growth significantly lower than agency proceeds growth, but we will continue to make investment in high-growth businesses, such as GovPlanet, RB Asset Solutions and Ritchie Bros. Financial Services. Aspirationally, we continue to target internally to get to SG&A growth to half the rate of agency proceeds growth on a full year basis, not on a quarterly but on a full year basis.

In conclusion, 2018 was an excellent year. We're advancing our strategies. We've strengthened our core business and built the foundation for new growth into 2019 and beyond. Our reach, scale and innovative product portfolio puts us in a great position to build on a business model that is substantially and durably differentiated from our competitors. We are entering 2019 with some wind at our back with acceleration and improved performance against our financial objectives, a very strong balance sheet and the right foundation for multi-year growth.

If you look at Ritchie Bros. going into 2019, it is very different company than it was just 2 years ago. We have shifted the paradigm from being the world's largest unreserved live auction company, which we're still very proud of, to one that is uniquely diversified with multiple ways to win, multiple ways to serve and grow our customer base and a solid foundation for shareholder value creation. I thank our teams for a strong 2018, and we are enthusiastic about 2019.

With that, we are ready to take questions. Operator, please open the line for questions.

(Operator Instructions) And our first question comes from the line of Michael Doumet from Scotiabank.

So the A&M agency proceeds rate was down in the quarter and you provided some comments there, but still much higher than last year's levels. Could you provide some insights on how we should think about that in the next several quarters? Your rate guidance is still unchanged, but we're still above the upper range. So excluding the fee harmonization, is there a reason why we shouldn't normalize over time?

Well, yes, Michael. So the reason we're reiterating the range is, as we grow certain areas of account growth, whether it be strategic accounts, international regions, opening up agriculture and with what we see as kind of the potential increasing risk on the pricing side for at risk fields, we're feeling that, that range is still appropriate for you to use to model. We have been above that range as you've noted, and we will not have an increase next year as a result of additional fee harmonization, and so that was a onetime thing even though it carries on permanently, but we believe that is the right range that we see inside of 2019.

So let me add to what Sharon said, Michael. First, I think you started by saying agency proceeds was down, so not sure, maybe I misheard you. So because the agency proceeds, on a like-for-like basis, was up 8%, maybe the rate of growth is what you were talking about versus previous quarters which was double digits like 10% or so. And, look, you'll have quarterly variations, which we see in this business. And to me, probably the key driver of why it came off of it really had to do with a few things, with principally, I think, that we had some inflection on our at-risk deals and that had some effect. So -- and look, I have absolutely no major concerns because underwritten business -- and I think many of you have been sort of critical of thinking we have not pursued at-risk deals, only to drive rate, whereas, we've always said, we want to balance underwritten -- the rate and volume. And last year, in a tough supply environment, where there was a lot of competition, we were aggressive about going after deals. Now, when the market inflects sometimes in certain categories or in certain geographies, you will have underwritten results which you might not have expected, but that's the nature of it. In the main, as I've always maintained over the last 10 years since [I've seen] the records, overall on underwritten, we've always been profitable, but there will be a few contracts you'll not do well or you may lose money, but I'm fine with that because that's what we want to drive and that's our competitive advantage. So I think, in the main -- now the last thing I'd say is, why we don't have the buyer's fee next year, I think that supply losing [some]. We're going to go back to, I think, gradually over the course of the year, volumes picking up and we'll still -- I think we're very good at managing at-risk. So now we will go back to being a little bit more, "Hey, if the market inflects, a bit more careful." in that regard.

Really great comments. And maybe just to squeeze in an unrelated follow-up. Just on the working capital, that was a cash outflow in '18. That's, I think, the first I've seen in a number of years. And you mentioned GovPlanet's impact there. So the question is, should we think of that as a onetime impact? Or is there a structural shift there with working capital if inventories may need to rise as a result of GovPlanet?

Yes. So we did see inventory rise. It increased $75 million year-on-year. The vast majority of that increase was actually normal deal volume and not related to GovPlanet. There is a minor amount of GovPlanet that is permanent and perhaps a small amount in excess of what that permanent amount is, we've not detailed out the inventory components related to each of those subbusinesses. But it's really, I would view it as more of a minor add to ongoing permanent inventory levels. We should be able to see most of that additional increased sell-through within the first half of the year.

So I'll just add something. On GovPlanet specifically, Michael, one has to note that we won the award at the end of '17, but it actually -- the formal award process took to about midyear or just a little bit before that. And the Gov, though, stopped sending it to the previous supplier, so they have a massive amount of inventory that they had built up, but as soon as the contract got operationalized, they kind of flooded us with a lot. So -- and we have to -- because of the totally new business, we had to put up warehouses, build a whole team, et cetera, cope with this and clearly, it's a different dynamic, but I'm very proud that the team has taken this on. And what we're doing is actually building an amazing buyer base for Gov and that buyer base, as we commented, even helped us in Orlando. Actually, GovPlanet now is attracting more users than RB and IP, which is quite incredible and that speaks volumes for later on in terms of acceleration of network effects. So -- and as the -- as Sharon pointed out, most of the significant part of inventory was normal stuff that we do. It's just international, we're chasing some mega deals, and we're actually very, very feel good that we're accelerating our international growth and it's becoming a powerful growth engine.

Our next question comes from the line of Derek Spronck from RBC.

Just to start off, second quarter now, where we've left IronPlanet, for 2019, how should we think about GTV growth? Should we be thinking of it kind of in the low single-digit range? And then as the equipment supply, if that loosens up, for 2018, I believe you had a 3% reduction in lots offset by a 6% increase in GTV per lot. If that changes where lots go up, but the GTV per lot goes down, are you agnostic from a margin perspective on whether you're getting more lots but less pricing or vice versa, less lots and better pricing?

Okay. Let me pass through that. I guess, there's a lot of things in there. I think, first, as you know, we don't provide specific guidance on specific metrics. So I would still refer you back to our Evergreen Model where we talk about high single-digit agency proceeds growth to low teens. So that's kind of the range. And that's again, on average, over a 5- or 7-year period. And so to me, the strength of this management team is to pivot depending on market environment. So this, in '18, the fact that we got to 10%-or-so is because of the buyers fee. And next year, volume growth, we think volume will be a lot better, and so better than the GTV that we have this year, but I can't tell you exactly how much. It'll be gradual every quarter. I think it will start increasing as supply loosens up. But we're pretty confident that we -- to drive better agency proceeds growth and that's what we're focused on. And in terms of your -- the rest of your question's on, I think, you paid price per lot went up, the number of lots went down, it's very tough. It's not like we try to choose. It all depends on what consignors want to give us, and clearly, our sweet spot is 3- to 5-year equipment -- heavy equipment, but a lot of times that there's a full dispersal, they'll give you small lots, but for small lots you have higher buyer fees so you have to look at this as an overall portfolio. And our job is to take all of that and keep driving consistently top line growth, and we're quite committed to doing that.

Okay. And just maybe -- just moving on to the strategic accounts. Are there any big strategic accounts that you feel is -- are out there that could provide for potential opportunity going forward?

Yes, I think in my prepared remarks, we said we had already captured the 181 in the U.S. and that's just the U.S., mind you. We've got strategic accounts teams in Canada as well as in Europe who are also making good progress. Just in the U.S. alone, that team has identified outside of the one -- I mean, are in addition to the 181, that universe was about 800. They captured about 181. So there's still 600-or-so accounts that are on their radar and target. Strategic accounts do take some time. They don't -- you don't immediately sort of go in and get the thing, you have to build a relationship. But once you get it and you will perform and do a great job for them, it is a great predictable annuity-driven kind of business. Now sometimes, they are lower rate than end-user business, but it provides a very good systematic predictable flow. So our teams are very, very focused on getting -- continuing to drive new acquisition, customer acquisition, strategic accounts, but also on the end-user side.

Is there -- some of your new initiatives at the management, is that helping sell your services to these strategic accounts? And how are you leveraging that?

Yes, and that's a great, great question. I'll actually have Matt Ackley, who is the guru of our RB Asset Solutions to have a quick word on that.

I'm sorry, could you repeat the question?

Just how are you leveraging... Go ahead, Matt.

Yes, the way we're leveraging RB Asset Solutions for the strategic accounts is, we have many sellers who are looking for essentially better data, better tools to help them manage the disposition process. So sellers are looking at their entire portfolio of assets and trying to decide what is the best possible way to dispose of them to kind of maximize their profitability. And so by us being able to come to them with our data and with our software, and essentially partner with them, to give them the tools necessary to help them in that process. So whether it's selling on their own, whether it's selling to one of our channels, whether it's selling through their -- to their dealers privately, we offer a set of tools and data that basically helps them manage the process and allows us to be better partners with them.

Are you offering that?

I'm sorry. We have to sort of move along, sorry. There's a number of other callers on the line, I apologize.

Our next question comes from the line of John Healy from Northcoast Research.

Ravichandra, I want to ask a little bit about expenses in 2019. I know that's been a focus area for you guys and in the slide deck, you guys talk about growing SG&A at a lower grace -- or lower rate than agency proceeds. I was just hoping to get more color in terms of how those 2 metrics may trend in 2019. And maybe on the low side and on the high side, how that might shake out from the standpoint of what sort of top line or volume numbers do you need to get to grow over -- at the SG&A increase, and at what point does it really inflect where maybe the growth rate versus the SG&A level is maybe more like 2:1 or something like that?

Yes, so I'll start and then Ravi can perhaps add some additional color. But certainly, we've learned a lot this year in terms of how to drive synergy through the automate -- the technology that the IronPlanet now provides to us as well as simplifying the integration assets. So a lot of the synergy action that was taken inside of 2018 has really yet to show up in terms of added value to providing that scale. So that as the top line grows, we will not have to invest at matching cost, particularly in SG&A to support that growth. So MARS is an example of that. The Oracle integration in the finance team is also an example of that. So that's why we are confident that we can keep SG&A growth significantly below agency proceeds growth for the year. And certainly, there is an element of SG&A that is fixed. So as that revenue and volume starts to pump through, that certainly will aid with the leverage. And I think, we've quoted historical flow-through rates kind of in the high 70s in the past. That may be something to look at modeling when we start to get into that higher kind of revenue, the top end of the range on revenue and, hopefully, that's helpful.

So to add -- just philosophically, John, we have a principle and even though we make investments in growth businesses as pay-as-you-go. So we're not very big on hockey stick approaches saying, "Hey, keep investing, and some day see the growth." So -- and when we start seeing it, we are not hesitant like RBFS. We have only had 27 quarters of growth, and we are willing to keep adding sales people because we are just hitting the ball out of the park. So having said all of that, I think, if we are -- I think, philosophically, we are very careful, especially the learnings from '17 and '18 that appear supply-constrained environment. You cannot count on growth. Now the way we look at is, plan for the worst and if things get better, that's icing on the cake. So I think we try to -- we want to keep SG&A levels low. I think you've seen total year '18, and you've seen the second half of '18, so we'll let you draw your own conclusions on what this team can drive, but the key is that it's significantly lower and not only internally, aspirationally. That doesn't mean that's [down], so we want to be very clear that we do want to try to get to half the rate of agency proceeds but on SG&A.

Great. That's very helpful. And then I just wanted to ask kind of a larger-picture question. I know you mentioned that you guys might revisit some of the Evergreen Model metrics, so it's due to the change in reporting. But I was kind of curious just your feel on the progress towards the Evergreen goals. Are there any of the kind of descriptive categories that you've outlined that you feel better about or maybe a little even worse about achieving over the kind of the multi-year time frame? And then additionally, specifically, on the ROIC target, it seems like that you've made some improvements there over '17 levels, but just kind of curious kind of what the strategy is in terms of how you kind of get to that 15% number by 2021, and if maybe changing the capital returns is part of that.

Yes. So certainly, there's nothing that we're seeing today that would say, that we are not in line with those targets, certainly on modeling, would be volume-growth dependent. So those will be the key drivers to both achieve both the EBITDA margin target as well as the ROIC target. And certainly, our discussion around we're looking at the Evergreen Model is purely the fact that these measures are really based on revenue as the denominator. And with the inability to refer to agency proceeds on a go-forward basis, that's where we all are calling out. We're not calling out any change in our expectations on what the model is capable of delivering.

And I think the last thing is the EBITDA margin, which is the one that we've been very committed to, the fact we've delivered 35.3 and in the quarter, much higher than that. I think it's just indicative that we're steadily making progress. We remain confident and if you can keep that basis, which we cannot talk about, that we feel confident we'll get there.

Our next question comes from the line of Craig Kennison from Baird.

It's on RB Asset solutions. How many subscribers do you have today? And can you frame what success looks like in 2019?

Yes. So on that, Craig, we -- essentially, you've got -- a lot of this also came from Mascus. And so a lot of people -- a lot of customers are using that solution, and now we've just added the transactional vehicles to that. So we've got a base there, and we are also getting customers. The key, as I mentioned in my prepared remarks, is really 15 to 20 reference accounts globally. And I would not look at this as a material revenue or half a driver necessary in 2019, so that we don't give you a wrong impression. It is more of a marathon longer-term thing, but once you get in and get these tools into the customers, eventually the big win for us is when they start using our transactional engines and cascade it. And so that's going to be a build over time. And we are actually excited about the long-term prospects, but I wouldn't look at it as a huge driver in '19.

And as it relates to GovPlanet, could you frame what you think of as the long-term opportunity in that marketplace?

Sure. So we're already -- we have the rolling stock with the Defense Logistics Agency, the nonrolling stock, which we just talked about. We have the Marine Corps exchanges. There are so many governmental agencies in the United States. We're a profitable business. The government loves the team because we add a lot of value to them. They trust us, and that's just in the United States alone. So there are so many agencies that we can go. And then you have the local and municipal state opportunities that we just -- that team was embryonic. We created a team and we are building on that. So long term, I see this -- again, it's going to be a long-term opportunity, but I see this as a very potent and powerful opportunity to drive meaningful growth, top line and bottom line, over time.

Our next question comes from the line of Ben Cherniavsky from Raymond James.

Ravi, you and I have talked quite a bit in the past about, including managing the GTV up through both channels and not trading one for the other. And so there's one comment in the press release that I wanted to ask you about because you mentioned that $829 million of online full year GTV was generated last year, which was quite a bit higher than IronPlanet's last year as a stand-alone company, which is encouraging to see obviously, but if you subtract that from the total GTV, it suggests that your live auction GTV last year was about 15% less than what Ritchie's was as a stand-alone in 2016. So I just wonder if you can comment on that, if I'm thinking about that the right way or what the different moving parts of that look like.

Yes. I think, so the comparison to me that more relevant front right now, and I understand how you'd look at that, if one doesn't accept the premise that we've been in a very supply-constrained environment, then no matter what I say, it will be very tough to believe that. We have an extraordinary environment in '17 and '18 that -- we saw the best live auction levels in '17 in the first half even before we bought IronPlanet. So I think this has been -- ultimately, it is all about our customer choice. We are agnostic in terms of A, does the customer want to be on-market play? Does he want to be -- or she on weekly auction or on live? Our culture and DNA as such, legacy Ritchie Bros. sales people, have a natural affinity for the live auction, and so any concerns, and there, the majority of the end-user business, any concerns that there's cannibalization, that is the last thing I worry about, frankly. It's on my priorities as 100, it will not even make 100 of that cannibalization of online to live. I think it is really what customers are choosing. It depends on the mix because if you have smaller items, if you want to put it on the weekly auction to get flow-through. And then last thing is strategic accounts. So Strategic Accounts, they tend to be more -- their mix is kind of, they look at both online and live the same, which was truly even when we had a certain lot. So I think, those play. And then last thing, we have had additional GTV coming out of international, I said $100 million of MPE weekly, a lot of those are new customers who never wanted to deal with us because we were only a live auction company. So I think we now have all the channels to suit customer needs. And the one thing I can reassure everybody is, our live auction company is very alive. We are all very proud of it and that is our core, and that is going to continue to be part of our core. And I think, you saw in Orlando, $297 million. If that doesn't show love for live auctions, I don't know what else will.

Is there something that in the online channel is less sensitive to equipment supply constraints? Like wouldn't those same headwinds have made it -- is it difficult to get to grow that side of the business? Or is there some different sort of way that -- mechanics there that is...

No, that's -- No. IronPlanet also got hit in '17 first half as a stand-alone company and then we saw it also happen in the second half of '17. I think the difference is that we are, on both channels, aggressively going after new customers. And Marketplace-E has been a big part of this because as you have said, it's over $200 million brand and in its first year. And that's all people who wanted was their option, which we never had, and that we had EquipmentOne, IronPlanet had Daily Marketplace, but it was not the way we have now constructed it. That has driven some incremental growth. So -- and when you think about it, where it is, we said versus the peak year of '16 was up significantly. By end of the day, when you look at actual dollars, that's the thing you need to think about. So because the base of live auctions is so big that I think that has some impact as well.

Okay, that's helpful color. And you are right. That was a big testament to your model in Orlando.

Our next question comes from the line of Maxim Sytchev from National Bank Financial.

Just a quick couple of quick ones. In terms of -- Ravi, I was thinking about equipment loosening dynamic. I mean, do you mind maybe providing a couple of tidbits that are bit more tangible just relative to what you're holding that you are seeing something? Is there any issues on that basis?

Jeff, if you're on the line, maybe you can just make a few comments so that we also hear from some others on the loosening and you're right in the [cold] place?

Yes, thanks, Ravi. Maxim, 2 weeks ago, when we were in Orlando, obviously, that gives us a good opportunity to get in front of a lot of people, a lot of our sellers. And I think in those conversations, you just get a sense of what we've known as fleets have gotten very large, rental fleets have gotten large and as new equipment is also loosening up, in those conversations, you just get a strong sense that, that inventory is going to start to turn this year. There, some of the equipment has gotten older. And now, they can replace it. They're starting to think about 2020. So they're starting to think about what is the right time to start moving those assets into the market. We obviously saw a little bit of that in Orlando. As we were up this year, we've seen some very positive comps in the other auctions we've had thus far in Q1. So I think it's just -- all of those conversations that they kind of add up. We know a lot of the pipeline works completing. We know there are a lot of assets that are coming out of that sector. And so it's really all of these kind of data points that we add up that give us the -- that enthusiasm that supply will start to free up this year. And look, is -- it will be gradual. I think, as Ravi mentioned, but it just feels very different in all of those conversations that we're having.

Okay, that's helpful. And in terms of...

One thing to add there, Max. The one thing that we noticed in Orlando this year, which was different from last year, a lot of the OEM dealers were very engaged last year in backing up the pricing, driving it, trying to buy the equipment because of shortages, et cetera. This year, we noticed a noticeable absence of that, and I think a lot of them are concerned that they're going to get [lease] returns. We've heard of certainly a few pipeline projects coming to an end, which could bring several hundred piece of equipment into the market. So I think, all of those, as Jeff said, when you add them, I think we do feel that it is beginning to turn.

Okay, that's helpful. Can I maybe quantify as well, in your Page 20, the fewer selling days in Q1 '19 versus Q1 '18, is it possible to quantify that on a percentage basis?

Sorry, Max. We don't have that right handy with us, but I can follow up with you, so that you have that information, okay?

Yes, I think it's 4 days less or so.

Yes, it's not a huge number. It's about 4 days.

I'm sure you'll get the right answer.

Okay. And just one last one for Sharon. What has changed in terms of tax rate expectations because obviously, before, we were looking for a lower tax rate if it's possible?

Yes. A couple things, Max. First, we did say at the point of the acquisition that we did expect the tax realization of the tax rate to happen within the first few years of the deal and that's really what's been driving 2016 -- sorry, 2017 and 2018's rate performance. Now as we get to kind of more normalized penetration and profit coming out of North America, which is kind of their highest rate -- tax rate areas, that's what's really driving the growth. Certainly, there was clarification on some of the U.S. tax reform that did have some implications to us on what's considered big -- predominantly big taxes, which is the royalty transfer pricing that goes into the U.S. But we think that it's probably going to be at its highest level inside of 2019 and then should be less of an impact as that region basically clears through all of its NOIs and gets to a higher level of profitability. So, I think, you already said, alternative minimum tax kind of approach that has been put in place. And what we are also seeing is it's not just the U.S. regulations that are changing, it's also the international jurisdictions that we operate in. And so certainly, we just see that it is an environment that continues to change. And that guidance, I will point you to the fact that the U.S. tax rate is probably, all in, about a 26% tax rate, Canada is about 27%, and a lot of our expenses are actually nondeductible in regions. So travel and entertainment, new type of expenses are nondeductible and stock option cost in Canada are not deductible. So those are kind of the major levers that are looking for that increased tax rate in here.

Okay, so before we go to Max, I'll just give you the exact number on the live selling days. It's on live, it's 49 in 2019 versus 53 last year. And on our [pad] power option, it's 6 selling days in '19 versus 8 in '18. So there's puts and takes. We've added some options in '19, taken out some options. So in the main, you come out at 4 less days versus prior year.

Our next question comes from the line of Cherilyn Radbourne from TD Securities.

First off, having deleveraged the balance sheet in 2018, could you just speak to your appetite for acquisitions going forward? In other words, are there still geographies, channels or end markets that you might want to enter inorganically? Or do you pretty much have the platform that you want at this stage?

So let me take a quick shot at that. So Cherilyn, first, at this point, we're not contemplating sort of transformative big mega acquisitions like IronPlanet. However, we are absolutely open and flexible on tuck-in, bolt-on acquisitions, which give us expertise in certain sectors. Would love to find something in agriculture in the U.S., for instance, or build our transportation skills internationally. We are always looking in drive countries to find players that might either be a center of expertise or having deeper penetration geographically. So definitely, that piece is an ongoing thing. And just we need to make sure those acquisitions are value creative and fit our value system because there's a lot of regional players that do business in a different way than we do. But we keep an eye out on those, and I don't want to rule those out.

Okay. That's helpful. If you can, I'd love to get a bit more detail on what you're seeing in Western Canada because you're so dominant in that marketplace that you'd be very well positioned to benefit if things are starting to loosen up.

We can give it to you from the horse's mouth, I think Brian Glenn, our Head of Canada, especially focused on Western Canada, can tell you all about his exciting auctions that finished yesterday. Brian?

Thanks, Ravi. Cherilyn, yes, as the landscape continues to shift, particularly in the oil and gas sector across the prairie provinces, through disruption and I guess some dislocation, we're in front of those customers and those clients each and every day. And as we witnessed here this past week at Edmonton, there is still certainly pockets of activity. No doubt, winter work in the northern regions of Western Canada, helped drive a lot of that, but when it comes down to the root of it, particularly in the oil and gas sector, we do expect a very busy Q2 and Q3 as we head into the summer months. And it's a tale of, I guess, 2 countries in some respect where we see opportunity for us in the West to help clients and customers with some redeployment of assets, so to speak. We also see pockets of activity, as an example, down through Texas where those buyers and those end-users are good clients of Ritchie Bros. So we have the ability to reach out. We talk to those people each and every day to help move the product back and forth. So we expect we are going to be obviously seeing probably an uptick in some insolvency play also across the West and we're well-positioned for that as well if there are Strategic Accounts going to appear to us.

Our last question comes from the line of Michael Feniger from Bank of America.

Can you guys hear me? Hello?

Yes.

Oh, sorry. I may have missed it. Did you quantify the fee harmonization or buyer fee benefit in the fourth quarter? How much did that help the rate?

We had not quantified it. Certainly -- It certainly was a positive impact on the overall rate that we then offset by some of the softness that we experienced on the guaranteed contracts. No, we have not quantified it.

Okay. And then just, I think, as it related to the Evergreen Model, when we look at the fourth quarter results, your profit margin expanded nicely on a year-over-year basis, but it's still kind of below those peak levels we have seen in prior fourth quarters despite where GTV is and rates still near the high end. You did a good job SG&A line. So just to get back to those prior margin levels, is it really just a question of scale that kind of drives that? Or is there anything that we should be cognizant of with the mix maybe going more online or being more international growth or a higher services that kind of changes that profitability discussion versus comparing it to the older Ritchie? Just any color on that would be helpful.

Yes. So I don't know what math you're actually using. When I look at our Q4 rate performance, I actually feel that we are back on trend to some of our historical Q4 performance measures. And we're very pleased with the flow-through that we did experience in Q4 related to kind of maintaining a low-cost profile on an accelerating agency proceeds growth. So again, I think, it is a combination of maintaining that cost management focus and that discipline that we expect to incur inside of 2019 and '20, coupled with that kind of growth profile on agency proceeds that we called out in our Evergreen Model.

And Michael, it's very important not to interpret the Evergreen Model on a quarterly basis. I'll be horrified if that's how people are using it because that is the whole purpose was not to do that because we are not giving quarterly values and we've in fact had 5- to 7-year period average. Having said all of that, Sharon is absolutely right. We actually thought we had terrific EBITDA performance against agency proceeds on fourth quarter, and it is definitely very comparable to, if you go back and look at that and you can call us, even we can run you through some of those numbers, but in our minds, we've done a very raw count, but it was definitely very strong performance.

And there are no further questions at this time. I will turn the call back over to Zaheed Mawani for closing remarks.

Thank you very much, everybody. Have a safe day, and onwards and upwards.

And this concludes today's conference call. You may now disconnect.