Ritchie Bros. Auctioneers Annual Report 2009

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FY2009 Annual Report · Ritchie Bros. Auctioneers

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AnnuAl RepoRt 2009

Gross Auction Proceeds in billions of US dollars

7
5
.
3

3.5

9
4
3

9
1
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3

2
7
.
2

9
0
.
2

9
7
.
1

6
5
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1

82 83 84

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

06 07 08

3.0

2.5

2.0

1.5

1.0

0.5

contents

Letter to Shareholders

Innovation

Our Customers

Why Buyers Choose Ritchie Bros.
Why Sellers Choose Ritchie Bros.

rbauction.com

Our Auction Sites

Growth Strategy

Corporate Governance

Our Auction Process

Financial Information

Supplemental Quarterly Data

Selected Financial and Operating Data

Shareholder Information

16
16
20

Buyers* in thousands

8
.
7
9

90.0

0
4
8

3
.
0
8

0
.
4
7

8
.
2
6

9
.
8
5

9
.
5
5

82 83 84

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

06 07 08

Consignors* in thousands

6
.
6
3

0
.
7
3

9
4
3

1
2
3

9
7
2

5
3
2

9
4
2

82 83 84

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

06 07 08

*Industrial auctions only

60.0

30.0

20.0

10.0

In this Annual Report, all dollar amounts are stated in United States dollars unless a different currency is indicated.

Gross auction proceeds (“GAP”) represent 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 our financial performance, liquidity or revenue
and is not presented in our consolidated financial statements. Auction revenues is the most directly comparable measure in our Statement of Operations and represents the revenues we earn
in the course of conducting our auctions. Auction Revenues are primarily comprised of the commissions earned on straight commission and gross guarantee contracts, plus the net profit on the
sale of lots purchased and sold by the Company as principal.

We define adjusted net earnings as financial statement net earnings excluding the after-tax effects of excess property sales and significant foreign exchange gains or losses resulting from
financing activities we do not expect to recur. Adjusted net earnings is a non-GAAP financial measure that does not have a standardized meaning, and is therefore unlikely to be comparable to
similar measures presented by other companies. We believe that comparing our adjusted net earnings for different financial periods provides more useful information about the growth or decline
of our net earnings for the relevant financial period and identifies the impact of items which we do not consider to be part of our normal operating results.

Forward-looking statements: The discussion in this Annual Report includes forward-looking statements, which involve risks and uncertainties as to possible future outcomes. Readers should
refer to the discussion concerning forward-looking statements and risk factors included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations for the
year ended December 31, 2009, which is included in the Financial Information section of this Annual Report.

the year in review 2009

Headquartered in Vancouver, Canada, Ritchie Bros. Auctioneers is the world’s largest industrial

auctioneer. In 2009 we conducted 327 unreserved public auctions in 14 countries around the world,

selling $3.49 billion of used and unused equipment for the construction, transportation, agricultural and

other industries. We welcomed record numbers of bidders to our auctions, sold a record number of equipment

items and confirmed our position as the world leader in on-site and online equipment auctions. While many companies

were downsizing we continued to grow, hiring more people, establishing new auction sites and expanding our presence

in markets around the world.

We achieved this through a unique combination of tradition and innovation.

online bidding records

auction site network expansion

Record amount of equipment sold online: $831 million
Reached $3 billion in cumulative online gross
auction proceeds
Surpassed 100,000 approved online bidders

record bidder registrations

Record number of bidder registrations at industrial
auctions: 336,000
Regional bidder registration records set at 25 auction sites

auction records

Record number of lots sold at industrial auctions: 283,000
Largest auctions in Company history in Canada, the Middle
East, Italy and France
Regional gross auction proceeds records set at 11 auction sites

milestones

First auctions in India and Turkey; second auction in Poland;
first auction in Central America (Panama) since 1998
Acquisition of Tipton, California-based Martella Auction
Company; signed lease on Martella’s 65-acre auction site,
which became our 40th auction site worldwide

strategic partnerships

Partnership with uShip, the world’s largest online shipping
marketplace, to offer online shipping quotes and estimates
through rbauction.com

Grand Opening auctions held at five new or replacement

permanent auction sites:

∙ Minneapolis, Minnesota

– replaced smaller permanent site

∙ Houston, Texas

– replaced smaller permanent site

∙ London, Ontario – new site
∙ Grande Prairie, Alberta

– replaced smaller permanent site

∙ Mexico City, Mexico

– replaced regional auction unit

Regional auction unit established in Madrid, Spain
– our second auction site in Spain
Land purchased for three new permanent auction sites:

∙ Caorso, Italy (62 acres)

– will replace existing regional auction unit

∙ Madrid, Spain (74 acres)

– will replace existing regional auction unit

∙ St. Louis, Missouri (67 acres)

– new permanent auction site

Long-term leases signed on 41 acres of land in Meppen,
Germany and 37 acres of land in Salt Lake City, Utah,
on which we’ll establish new regional auction units

Edmonton, Alberta, Canada

2009 annual report | ritchie bros. auctioneers

Letter to Shareholders

e at Ritchie Bros. Auctioneers are very proud

of our company’s history of innovation.

Ritchie Bros. has made a lasting impression

on the auction industry and the entire used

equipment market over the past 50 years,

through a combination of innovation and

adhering to our tradition of commitment to fairness and integrity.

There are many unique features of Ritchie Bros. unreserved public

auctions that have become part of the fabric of our business, and

these are things of which we are all very proud.

Whether it was the development of the ramp style auction back in the
1960s or the advent of auctions that offer the best of both worlds – seamless
integration of live AND internet bidding – our business is built on, and has
remained successful in part because of, our continuing commitment to
innovation, to improve the value of service we provide to our customers.

One of the keys to our success is execution of our strategy. 2009 was a
challenging year for many companies, and Ritchie Bros. was not immune
to the malaise plaguing economies around the world. A state of paralysis
among equipment owners in the United States affected our ability to grow
our gross auction proceeds in 2009, yet we remained focused on execution
and innovation. This focus in part allowed our adjusted earnings per share to
grow 8% in 2009.

Over the last 50 years we have used innovation in many ways, and some
of the benefits were clearly demonstrated in 2009. We sold 12% more lots
in 2009, yet we were able to keep operating costs in check. Innovation
contributed to our ability to sell more items in an efficient manner and deliver
earnings growth in the face of tough economic headwinds.

Our earnings growth in 2009 came in spite of our gross auction proceeds
being down 2% compared to 2008. This lack of growth was largely as a result
of lower average auction values and challenges generating consignments in
the United States, as well as a shift in the mix of equipment we sold at our
auctions towards lower valued items. That being said, our 2009 gross auction
proceeds in local currencies were 10% ahead of our local currency gross
auction proceeds in 2008. In spite of the challenging economic environment,
we grew our business and to us this indicates clearly that our model is intact.
Earnings per share remain the focal point of our efforts and the
ultimate measure of our success, and to further our goals we developed
and implemented a number of new innovations in 2009 that we expect

will allow us to continue to grow our earnings per share
at a reasonable rate over the long term. Although we are
pleased with our earnings growth in 2009, we can do more.
One example of our recent initiatives that we expect
to contribute to earnings growth in the future is the
development of our Timed Auction system that was piloted
in 2009 and is being rolled out in 2010. The Timed Auction
system is an online bidding system that creates another
option for our customers and ensures that we continue to
have flexibility and convenience in our auction process.
This initiative will result in tremendous efficiencies as we
sell thousands of lower valued items, such as buckets and
attachments, using this system.

Our Timed Auction system has the potential to
allow us to reduce our number of auction days, which
should translate into lower costs and higher margins.
It will allow us to sell many more items per day, with
fewer staff and less cost, while maximizing the return
to the consignor. Our bidders will benefit because the
Timed Auction system creates much more convenience
for them. It will also allow us to focus our efforts at the
auction on higher value items, where the value add of
the live auction experience is most dramatic. Our aim is
to use the auction method that generates the best return
for our customers, and now we have one more available
alternative. Please see our discussion elsewhere in this
report for a more comprehensive explanation of this
exciting new technology.

There have been many other examples of innovation
in our auctions and our business practices over the years,
but the common theme in all of these is value, allowing
us to continue to grow by focusing on what we see as our
fundamental purpose – creating compelling value for our
customers, employees and shareholders.

We generate value for our customers by using unreserved
auctions to create a global marketplace where people can
buy and sell equipment in a fair and transparent way. The
key to that transparency is the open and honest nature of our
auctions. Auctioneering has been around for a long time, yet
it has not always been conducted to the highest standards
of integrity. Being a public company has created even more

2009 annual report | ritchie bros. auctioneers

Management Advisory Committee

back row: vic pospiech senior vp – administration & human resources – steve simpson senior vp – western usa

bill cooksley vp – information technology – gary seybold divisional manager – us south east – brad bass senior valuation analyst – europe
karl werner vp – auction operations – jeremy black vp – business development; corporate secretary – rob mackay president

front row: david hobbs vp – south central us – kevin tink senior vp – canada & agriculture – jeroen rijk vp – southern europe
dean siddle vp – senior valuation analyst – guylain turgeon senior vp – managing director europe, middle east & asia
warwick mackrell vp – australia & asia – gary caufield senior director – legal affairs

transparency in our business and
allowed us to demonstrate clearly –
day in and day out – that we operate
to the highest level of business
conduct and ethics, and this has
become a competitive advantage.

Over the last 50 years of continual
innovation, we have grown to become
the world’s largest auctioneer of
construction, transportation and
agricultural equipment – both live
and online. We have accumulated
a series of strategic assets that helps set us apart from
any other offering available in the marketplace. One of our
most important strategic assets is our global network
of auction facilities, complete with state of the art
refurbishing facilities.

Our global auction site network allows us to take care of
all the details of the auction process, allowing our customers
to focus on their business. We save our customers time,

2009 annual report | ritchie bros. auctioneers

effort and money by making the
purchase and sale process easy and
flexible. We have been refining our
current auction facility model since
we first introduced a prototype in the
1990s, and as a result, our facilities
are leading edge. We made further
progress in 2009 as we formalized a
design prototype that is making the
development of our auction facilities
more efficient.

In 2009 we also made significant
progress expanding our global auction site network. We opened a brand new
permanent site in London, Ontario and conducted our first auctions at our
new property near Madrid, Spain. We expect to open a permanent site at
this location in 2010. We moved into a new site near Melbourne, Australia
and replaced permanent auction sites with significantly expanded capacity
in Minneapolis, Minnesota; Houston, Texas; and Grande Prairie, Alberta. We
also replaced a leased facility with a new permanent auction site near Mexico
City, Mexico.

back row: scott forke vp – special projects – peter blake chief executive officer – stephen branch vp – marketing
rob blackadar divisional manager – national & major accounts – bob armstrong chief operating officer
curt hinkelman senior vp – eastern usa – joe boyle vp – north east usa – brian butzelaar vp – northern europe

front row: richard aldersley divisional manager – us south west – rob whitsit senior vp – rob mcleod chief financial officer
simon wallan vp – agriculture – mike johnston divisional manager – us central west – nick nicholson senior vp – central usa, mexico & south america

robert thompson senior director – properties – brian glenn (not pictured) – divisional manager – western canada

2010 is already off to a roaring start: we conducted our first auction at our
new permanent auction site in Narita (near Tokyo), Japan in January 2010. Again,
innovation played a role in this facility as it was constructed without our standard
“ramp” – all equipment in our Narita auctions is sold on-site through our Virtual
Ramp system to both the live crowd and internet bidders. Entering Japan allows
us to make a huge leap forward in our Asia strategy. Japan is an important used
equipment market and having a permanent facility there after approximately 20
years of business in that country should allow us to reap tremendous rewards.

We have five more facilities under development that we expect to open
in 2010, as well as our regional auction unit in Tipton, CA that had its first
auction in February 2010. We have been on an accelerated capital expenditure
program for several years now and we believe that it peaked in 2009. We spent
$157 million in 2009 and we expect expenditures to be in the range of $100
million per year as we move towards a more sustainable capex level. Our long
term goal is to add at least two new sites to our network each year, as well as
a number of replacement facilities.

With all this investment in 2009 and previous years we have deliberately
spent more than we’ve earned because it was more important to accelerate
our innovations and expand our auction site capacity to prepare for future
growth. Turning potential auction consignments away from auction yards

that are already full is not the way to deliver value to our
customers. We have made meaningful progress over the last
few years and we expect to return to a positive cash flow
situation in 2010 or 2011, with free cash flow improving
steadily in the years ahead.

We often get asked why our investments in auction
sites are so important. There’s a simple answer: having
care, custody and control of the equipment we sell means
our sellers do not have to worry about their assets while we
prepare them for sale and our buyers can bid in confidence
knowing that transactions will be completed. When our
buyers travel from overseas or participate online, they know
exactly with whom they are dealing and where the assets
are located. We let our bidders, the majority of whom are
end users, inspect, test and compare the equipment prior
to the auction so they can trust their own eyes and not need
to rely on third party information to gain comfort on value.
And few other auction companies can offer their sellers a
local presence with a global reach, which is what we do
every day with our strategically located yards around the

2009 annual report | ritchie bros. auctioneers

OUR CORE VALUES

We do what is right

We maintain the highest level of business integrity

We build and maintain strong and enduring customer relationships

We never lose track of the basics

We face our issues immediately and are solution oriented

We have a hunger and passion for the deal

We are nimble and opportunistic

We have fun

registrations. We sold $831 million of equipment
to online buyers, maintaining our position as the
world’s largest seller of used equipment to online
and on-site buyers. As most of the charts and
graphs in this report show, these numbers have
been increasing. To us, this is a clear sign that our
strategy and model are working.

We invest in innovative ways to serve our
customers better in an effort to transform the way
the world buys and sells commercial and industrial
assets. We believe that our future growth and
expansion is directly dependent on our ability to
create compelling value for our customers, and we
are always looking for new and innovative ways to
accomplish that.

Today, as we plan for the future, we are aiming
to become the world’s largest marketplace for
commercial and industrial assets. Right now our
planning horizon is $10 billion in gross auction
proceeds and beyond, and that motivates us to
maintain our focus on execution and innovation.
We continue to serve just a tiny share of a
large and extremely fragmented market, and
the biggest restriction on our growth is our
conservative growth strategy and our ability to

world. That may seem basic, but few other companies offer
the global reach of our network. Our auction site network
is a critical strategic asset that has become a significant
competitive advantage.

In addition to the tremendous activity on the auction
site development front, we also had success in our frontier
market initiatives in 2009. After five years of developing our
business in India, we conducted our first sale in Hyderabad
in September 2009. We recently
completed our second sale in India
and expect many more in the future.
We also conducted our first sale
in Turkey, which is another large
equipment market with tremendous
potential for us, and our first sale in
ten years in Panama, with another
sale completed in February 2010.
We expect to see more activity from
all of these markets in the future.
Pioneering new markets helps
us to expand our global bidding
audiences at our auctions, which is
another demonstration of our innovative approach to the
auction business.

Our continuous focus on innovation and execution has
helped us become the world’s largest industrial auction
company. At end of 2009, our team was comprised of
1,148 employees working out of more than 110 offices in
25 countries, including 40 auction sites. During 2009, we
sold 283,000 lots for 37,000 consignors at 195 unreserved
public industrial auctions, attracting 336,000 bidder

execute that strategy.

It’s very important to recognize that recent times have been tough for our
customers. Yet, there is still a lot of work going on and analysts estimate that
over $100 billion of used equipment is trading every year. We are the world’s
largest auctioneer of industrial equipment but we handle only a small fraction
of the used equipment that’s bought and sold around the world. That means we
enjoy both the benefit of market leadership and the potential for tremendous
growth. The liquidity that we create is very appealing to equipment owners
around the world, and we intend to
continue to look for innovative ways
to make it even more appealing.

Despite all of our growth over
the years, we still believe that we are
just beginning to scratch the surface.
One of the keys to our ability to grow
is our people. Without continuing to
attract, train, develop and retain the
right people, we will not continue to
grow over the long term. This is an
often-misunderstood aspect of our
business. We are pleased that we
increased our sales force by 14%
in 2009. We expect these new members of our team to make an increasing
contribution to our growth in the years ahead.

Ours is a business built on relationships, meaning that our growth is
limited by our capacity to meet and develop relationships with customers.
We build these relationships in many ways, including interactively and online
via our industry-leading web site at rbauction.com, over the phone when
customers are dealing directly with our sale sites and our customer service
group, and, most importantly, the old-fashioned way – face to face with our
sales force.

2009 annual report | ritchie bros. auctioneers

In 2009 we made some big leaps forward in our efforts to develop deeper
relationships with our customers. We invested in the development of an
exciting new web site, and this will be rolled out in 2010. Not only will the
new rbauction.com offer much more convenience and value for our customers,
but it will also allow us to develop
deeper and more meaningful online
relationships with our customers
and help us understand their buying
and selling patterns. Our website
attracted millions of unique users in
2009 and 29.6 million equipment
searches were completed. There is a
tremendous amount of information
that we will be able to extract with our
new site.

Closely linked to our efforts to
deepen our customer relationships
is our sales force automation tool.
We are excited to be rolling this out
in early 2010 and expect meaningful
sales force efficiencies as a result
of this new tool. Please see further
discussion in this report for a
more complete description of our
Salesplace tool.

On a similar vein, another recent
example of innovation in our business
is the creation of a centralized team
to reach out to all of our first-time customers to ensure we are developing
more meaningful relationships with them and serving them as effectively as
possible. We have a very high level of repeat business among established
customers, and we expect this team will ensure we do an even better job
connecting with our new customers. In 2009, a significant percentage of
bidders attending our auctions were there for the very first time, and we want
to enhance their experience so we can continue to penetrate the massive
global equipment market.

Our growth strategies are geared towards our dual goals of (a) maintaining
and enhancing our corporate culture and (b) growing our earnings per share
at an average annual rate of 15% while generating a reasonable return on

Letter to Shareholders (continued)

invested capital. We fear that chasing faster growth could
dilute our high level of customer service and make it more
challenging for us to maintain and enhance our corporate
culture. That is a risk we are not prepared to take.

As we write this letter in the early
days of 2010 the world remains an
uncertain place in the short term – it
is hard to say what the year ahead
will have in store for Ritchie Bros.
Precise visibility into the future is a
challenge for any organization at the
best of times. The future direction
of the global economy over the
coming year remains cloudy and
many of our customers are facing
ongoing uncertainty, which makes
forecasting even more challenging
for us. However, there is one thing we
are clear about – we believe we are
well positioned for ongoing earnings
growth over the long term and that’s
our focus for the future.

W e a r e p r o u d o f o u r
accomplishments and ongoing
innovation in 2009 – although it was
a difficult year, we delivered revenue
and adjusted earnings growth in the
face of challenging conditions. We
could not have accomplished these results without the hard
work and determination of all the men and women on the
Ritchie Bros. team. Thanks to the energy, dedication and
passion of our team, we are getting closer every year to our
ultimate goal of becoming the world’s largest marketplace
for commercial and industrial assets.

And finally, thanks to our shareholders, for their ongoing
confidence in us, and to the ever-increasing number of
equipment owners who are choosing to participate in our
unreserved auctions. We truly appreciate your support and
are proud to be working with you.

Robert W. Murdoch

Chairman

Peter J. Blake

Chief Executive Officer

2009 annual report | ritchie bros. auctioneers

Moerdijk, The Netherlands

2009 annual report | ritchie bros. auctioneers

Innovation

ore than a few things have
changed since the first
Ritchie Bros. unreserved
auction in 1958. If you
attended a typical Ritchie
Bros. auction in 2009, you
would have seen hundreds,
if not thousands, of bidders in the auction theater
and heard bids coming in over the internet from all
over the world. You would have seen the electronic
signboards, displaying the current ask price and
updating in real time, and an Electronic Auction
Clerking system tracking auction results in real time.
You probably watched mobile equipment rolling
over the ramp and saw photos of stationary items
projected onto a Virtual Ramp screen as they were
sold. You might even have seen people using their
mobile phones to place bids on items being sold in
an online Timed Auction.

A little different from those first Ritchie Bros. auctions in
the 1950s and ’60s, even though those first auctions were
innovative in their own right.

But in many ways, Ritchie Bros. auctions today are
fundamentally the same as they’ve always been: open to

2009 annual report | ritchie bros. auctioneers

the public and strictly unreserved, with no minimum bids or reserve prices.
Interested buyers can still inspect, test and compare items at the auction
site, with everything under our care, custody and control. Owners are still
forbidden from bidding on their own items, so bidders can be sure that there
is no artificial price manipulation and that every item will be sold to a new
owner on auction day, regardless of price. And every customer is still treated
with fairness and respect.

Ritchie Bros. earned – and has maintained – its position as the world’s
largest industrial auctioneer largely due to this unique combination of tradition
and innovation. For that we have to thank our founders, the three Ritchie
brothers: true pioneers in their field. They turned a secondhand furniture store
into a very successful auction company. They established auctions as a fair
and legitimate means of buying and selling equipment. They pioneered the
ramp style auction method, bringing the equipment to the bidders – not the
other way around.

That innovative spirit continued in the 1970s and ’80s, with national and
international expansion and the opening up of the global used equipment
marketplace, through the 1990s, with auctions and bidders being linked by
video satellite conference, and into the 2000s, with the introduction of real-
time internet bidding.

The prototype auction facility that became the model for what we build
today was developed in Olympia, Washington and Fort Worth, Texas in the
1990s. At that point no other company had built as innovative an auction
facility as those early models.

Becoming a public company in 1998 was another form of innovation
for Ritchie Bros. Our business is built on trust, and what better way to help
customers develop trust than having our financial
statements and detailed financial and operating
data out in the open, available for public inspection.
Transparency is a critical element of our business,
and being a public company has helped us display
that we operate to the highest standards of ethics
and business conduct.

Innovation is as much a part of Ritchie Bros. as
our commitment to Auctions Done Right. You’ll see
evidence of both throughout this Annual Report –
including in our financial statements. Coupled with
our commitment to fair, transparent unreserved
auctions, our innovative mindset helps us serve
more people in more places, attract more bidders
to our auctions, sell more equipment without
increasing costs, and deliver exceptional value to
our customers, our employees and our shareholders.

Online Shipping

During the year, thousands of our

customers took advantage of this convenient
free service, requesting transportation
quotes through rbauction.com

IN 2009, RITCHIE BROS.
CONTINuED TO PRESERvE
THE BEST Of THE PAST
wHILE EMBRACING THE
POTENTIAL Of THE fuTuRE:

the internet

Our web site receives millions of
unique visitors every year, making it one
of our most powerful marketing tools.
Following development and testing
throughout 2009, we intend to launch our
new 21-language web site in early 2010.
The new rbauction.com will make it easier
for our customers to find the information
they want and the equipment they need
in the language they speak. Equipment
buyers around the world will be able to
search the world’s largest used equipment
inventory, access the world’s largest
database of used equipment values or bid
online at auctions around the globe, all in
their own language. Our new web site will
help us reach a massive audience of non-
English speaking equipment buyers and
sellers, while giving all of our customers
more tools and information to help them
manage their equipment fleets – and more

reasons to visit rbauction.com daily. The
new rbauction.com will allow us to develop
deeper and richer online relationships with
our customers.

online bidding

We introduced our real-time internet
bidding service in 2002, giving our
customers the ability to bid at auctions
all over the world without getting on an
airplane and creating a global bidding
audience for equipment sellers. Between
then and the close of 2009, online bidders
had purchased almost $3.3 billion of
equipment at Ritchie Bros. auctions.

In early 2009 we released an enhanced
version of our online bidding software,
making it easier for our customers to bid in
multiple auctions taking place at the same
time. And in 2010 we intend to launch the
new rbauction.com with online bidding in
seven languages, giving even more people

around the world the ability to bid online
at our auctions in their own language. The
interplay of the live auction with real time
internet participation is important in the
used equipment world, and has allowed
us to become the largest seller of used
equipment in the world to online AND
on-site customers.

online shipping service

We entered into a partnership with
uShip, the world’s largest online shipping
marketplace, allowing us to offer online
shipping quotes and estimates to
customers participating at our auctions in
the U.S. and Canada. During the year,
thousands of our customers took
advantage of this convenient free service.
This relationship is another innovative
way that we have made it easier for our
customers to buy and sell through
Ritchie Bros. auctions.

2009 annual report | ritchie bros. auctioneers

The Virtual Ramp

In 2009, the virtual Ramp

became an indispensable part of our
auctions – and a standard feature
of our permanent auction sites.

timed auctions

We conducted successful Timed Auction
pilot projects at a number of auctions in
2009. At these auctions, we sold most
items in the regular live auction; however,
lower value items, such as consumer
goods and equipment attachments, were
sold in an online Timed Auction, without
an auctioneer. On-site and online bidders
could place bids in the Timed Auction over
several days through our web site, using
internet kiosks at the auction site, or with
a mobile device.

Bidders appreciated the ease and
convenience, sellers were pleased with the
returns, and our professional auctioneers,
bid catchers, clerks and other staff
enjoyed greater productivity and more
time to focus on our customers. In order to
achieve our goal of growing our earnings
at a sustainably strong rate over the long
term, we need to sell more equipment in
the same amount of time; Timed Auctions
will help us realize that goal. Due to the
success of our 2009 pilot project, we will
be introducing Timed Auctions for the sale
of certain lower value items at our auction
sites around the world in 2010.

the virtual ramp

A few years ago we introduced the
Virtual Ramp to improve our customers’
experience when bidding on stationary

equipment or items located off-site, such
as real estate. Photos and descriptions
of these items are projected onto a large
theater-style screen, together with bid and
ask prices, so the bidders know exactly what
they’re bidding on, without venturing out
into inclement weather. In our experience,
the more comfortable the bidders, the more
likely they are to participate.

In 2009, the Virtual Ramp became
an indispensable part of our auctions –

and a standard feature of our permanent
auction sites. Thanks to the new Virtual
Ramp theatre, bidders at our Grande
Prairie auction site Grand Opening auction
in November could stay indoors for the
entire auction, out of the cold, for the first
time ever. And in September, we were able
to conduct a major mining equipment
auction by Virtual Ramp in West Virginia,
even though the equipment was scattered
at mine sites in various states. We will sell
everything by Virtual Ramp at our new
permanent auction site in Narita, Japan,
making best use of the limited acreage
while giving our customers the true Ritchie
Bros. auction experience.

handheld appraisal device

In 2009 we streamlined our appraisal
process by introducing our new Field
Asset Information Management system,
known as FAIM. Our Territory Managers
can now use handheld devices to capture
more complete, accurate and consistent
information about the equipment they’re
inspecting; it’s not only more efficient, it
results in a more accurate appraisal. Our
head office appraisal team can now
receive detailed inspection reports,
with digital photos, within hours of a
Territory Manager’s field visit, enabling
us to get back to our customers quickly
with value estimates.

2009 annual report | ritchie bros. auctioneers

Houston, Texas, uSA

sales force automation

In late 2009 we rolled out our new
sales force automation tool, giving
our Territory Managers instant access
to our database of over 620,000
customers through their laptop or
mobile device. When they’re out in the
field, our sales team can now quickly
retrieve the most up-to-date information
about their customers, instantly email
marketing materials in response to
questions or current needs, and record any
new information from meetings, including
email correspondence, for future reference.
They can also retrieve their customers’
buying and selling history. This tool will
help increase sales force productivity while
providing a more personal and meaningful
experience for our customers.

state-of-the-art auction facilities

When we started to invest in
permanent auction sites in the 1970s, we
changed the face of the equipment auction
industry. Through their permanence,
location and design, our sites instill
confidence in both buyers and sellers
of equipment. Look beyond the land
and buildings and you’ll see acres of
equipment in our care, custody and
control. Interested buyers can inspect

and compare items side-by-side in the
yard, and then see the machines in front
of them while they are bidding – seated
comfortably inside. Our sites are located
close to major transportation routes, so
our customers can get their equipment
to and from our sites with ease, and they
can feel confident doing business with us
because they know we’ll be in the same
place next week, and next year. In 2009 we
developed a more standardized auction
site prototype to make the development
of new permanent auctions sites more
efficient, cost effective and timely.

ritchie wiki

2009 also marked the first anniversary
of RitchieWiki, the Ritchie Bros.-sponsored
public heavy equipment wiki, which now
includes more than 2,000 articles, over
2,600 photos and detailed specifications
for more than 11,200 different machines.
RitchieWiki and the associated
RitchieSpecs are valuable resources
for the industries we serve, and also an

excellent way to introduce our brand to
new customers.

new bidder workshops

Not every innovation involves
technology. In the past year we welcomed
tens of thousands of first-time bidders
to our auctions, in part because demand
for used equipment rises in economic
downturns when people are focused
more than ever on value, but also because
we’re expanding our presence in new
markets worldwide. Many of our first-time
bidders have never attended any kind of
auction before and we want them to feel
comfortable, confident and ready to bid
on auction day. That’s why we introduced
“How to Bid” workshops in 2009. Hundreds
of people attended these free workshops
prior to our successful auctions in India,
Panama and Turkey in 2009; for our
Panama auction we conducted workshops
in many countries across Latin America. Our
new customers can look forward to similar
workshops at other sites in 2010.

2009 annual report | ritchie bros. auctioneers

Why UnRESERVEd?

Every Ritchie Bros. auction is unreserved.
That means there are no minimum bids or reserve
prices on any item we sell. we also forbid owners
and their agents, by contract, from bidding on
the items they are selling. As a result, every item
in our auctions is sold to the highest bidder on
auction day and prices are set by the bidders, not
by the sellers or the auctioneer.

Bidders come to our auctions in the hundreds
and thousands from around the world because
they know that there are no hidden reserves, that
every item will be sold to a new owner on auction
day and that they will always pay fair market
value for their purchases.

Consignors choose to sell their equipment at
our unreserved auctions because they know that
they are reaching the largest possible audience
of potential buyers from around the world, that
their equipment will be sold on auction day, and
that it will be sold for the best possible price in
the global market. That is particularly compelling
for sellers who are faced with the challenges of a
depressed local market.

fair, transparent, unreserved auctions
benefit both buyers and sellers of equipment.
That’s why we conduct unreserved auctions –
and that’s how we’ve established and maintained
our position as the world’s largest industrial
auctioneer. A simple concept, but innovative in
the equipment auction world.

2009 annual report | ritchie bros. auctioneers

Houston, Texas, uSA

2009 annual report | ritchie bros. auctioneers

Our Customers

wHY BuYERS CHOOSE RITCHIE BROS.

We provide our buyers with innovative bidding options and value added
services to make their buying experience convenient and rewarding, and to
keep them coming back to our auctions. Some of the other innovative features
of our auctions that our buyers appreciate include:
fair, transparent auction processes

Every Ritchie Bros. auction is unreserved, with no minimum bids or reserve
prices. We also forbid owners from bidding on their own items. Our customers
can be confident that the bidders – not the sellers or the auctioneer – set the
prices at our auctions, so they always pay fair market value. And they know
that every item will be sold on auction day, regardless of price.
comprehensive selection of equipment

More than 1,400 items are sold at an average Ritchie Bros. industrial
auction – everything from skid steer loaders and forklifts to motor graders
and truck tractors. In 2009, we sold almost 283,000 lots, making our auctions
one of the best sources for used equipment in the world.
convenient locations around the world

We choose our auction sites carefully. Our 40+ auction sites are
strategically located close to major transportation routes and services, making
it more convenient and cost-effective for out-of-region bidders to participate
on auction day.
the ability to inspect, test and compare items
We marshal the equipment we sell at our
secure auction sites so our customers can
inspect, test and compare a diverse selection of
makes, models and years from many different
sellers, all in one place, before they bid on
auction day. Our customers don’t have to rely
on a third-party inspection report: they can trust
their own eyes and verify the condition and
assess the value of a machine for themselves, or
have their own trusted mechanic do so for them.
They also know exactly where their purchases
are located: in the care, custody and control of

very year, we help more
people in more places
around the world buy and
sell equipment.

Our customers are a diverse
bunch. They come from more
than 200 countries. Some are
buyers, some are sellers; an increasing number are both.
Many people have been attending our auctions for years;
others recently bid for the first time. Some own multi-
million dollar fleets of equipment; others operate one or
two machines.

Our customers represent a diverse range of end
markets and include end-users of equipment and
dealers; finance companies and banks; rental companies
and manufacturers. They work in the construction,
transportation, agricultural, material handling, mining,
forestry, petroleum, marine and other industries.

We sometimes conduct complete dispersals
for people who are retiring or companies that are
discontinuing a line of business or ceasing operations,
but most of our customers are buying and selling
equipment as part of a regular fleet turnover program.
Only a small fraction of our business comes out of
bankruptcy situations.

In spite of these differences, our customers have
many similarities. They appreciate honesty, integrity and
transparency. They want to be treated right. They want to
know that they are paying a fair price when they buy and
that they are getting a fair return when they sell. They want
value – and they want their business to be valued.

That’s why an increasing number of people turn to
Ritchie Bros. auctions every year for their equipment buying
and selling needs: because we do auctions right.

16
16

2009 annual report | ritchie bros. auctioneers
2009 annual report | ritchie bros. auctioneers

Hyderabad, India

Our Customers: 2009

620,000 customers in 200 countries
130,000 approved online bidders

from 196 countries

336,000 bidder registrations*

98,000 buyers*
37,000 consignors*

*Industrial auctions only

Lake Lenore, Saskatchewan, Canada

2009 annual report | ritchie bros. auctioneers

Orlando, florida, uSA

2009 annual report | ritchie bros. auctioneers

Our Customers (continued)

value-added services

We continue to enhance our customers’ buying
experience by inviting third-party vendors to our auctions
(such as finance companies, transportation companies,
customs brokers and caterers) and partnering with
companies that offer value-added services (such as
Like-Kind Exchange services, credit card payments and
shipping quotes).

We registered a record 336,000
on-site and online bidders at
our industrial auctions in 2009:
A 21% increase over 2008.

Ritchie Bros. These features are particularly important for
our end user buyers – they are buying equipment at our
auctions because they have a job to do.
lien-free equipment

Our search department works to identify and release
any liens and encumbrances before auction day, so our
customers can be confident that the equipment they
are bidding on comes with clear title. If we can’t deliver
clear title, we offer a full refund of the
purchase price.
no hidden fees or premiums

Our auctions are open to the public;
registration to bid is free. Unlike some
auction companies, we do not charge
unsuccessful bidders any fees and we
don’t place reserve prices on any item
we sell. We also do not charge buyers’
premiums – when the auctioneer says
sold, that’s the price you pay. Bidders do
not have to calculate additional fees in
their head as they are bidding, so they can
focus on bidding – not math.
convenient bidding options

Our customers can bid in person, online in real time or
by proxy at most of our auctions. Most people still prefer
the experience of bidding in person, but they appreciate
the option of bidding online if they can’t make it to the
auction site on auction day – or simply for the convenience
of bidding on equipment being sold all over the world at
multiple auctions without leaving home.

on-site refurbishing

Many buyers take advantage of the convenient on-site
refurbishing services we offer at most of our auction sites:
they can have their newly purchased machine painted and
repaired before it leaves the auction site, so they only have
to make one payment and they can transport it straight to
their worksite.

Edmonton, Alberta, Canada

2009 annual report | ritchie bros. auctioneers

Our Customers (continued)

Houston, Texas, uSA

Average Industrial Auction: 2009

Our auctions range in size from small,
single-owner auctions on a customer’s
property to multi-day, multi-million dollar
auctions at our permanent auction sites.

$17.3 million in gross auction proceeds
24% sold to online bidders
1,450 lots

190 consignors
1,720 bidders (total)

570 online bidders (33%)
60% sold to out-of-region bidders
82% sold to end-users

2009 annual report | ritchie bros. auctioneers

wHY SELLERS CHOOSE RITCHIE BROS.

We take care of all of the details of the sale process for our consignors, so
they can focus on their business. Whether they are operating a single machine
or a large fleet of equipment, our approach is the same. We use innovation and
good old fashioned customer service to deliver value, including:
fair, transparent auction processes

Our sellers value our commitment to fair, transparent, unreserved auctions
as much as our bidders. For a start, many of them are also buyers. More
importantly, they know that it’s our integrity that attracts such large bidding
crowds to our auctions – helping sellers achieve the best possible returns on
auction day.
flexible contract options

We offer different contract options to meet our customers’ sale objectives
and risk tolerance, including straight commission, guarantee and outright
purchase options.
unparalleled marketing

We employ a comprehensive global marketing campaign for each and
every industrial auction using our high-traffic web site; full-color auction
brochures; email campaigns; print and online advertising; and often, media
relations campaigns. Our consignors can be confident that they are reaching
the maximum number of potential buyers from around the world when they
sell through Ritchie Bros.
global fair market value

An average Ritchie Bros. industrial auction attracts more than 1,700
on-site and online bidders from around the world and from a diverse range of

Detroit, Michigan, uSA

end markets. Reaching beyond the local market for buyers
enables our consignors to sell their equipment for its global
fair market value, regardless of local market conditions.
access to end-users

We attract large numbers of end-users to our auctions

We sold a record 283,000 lots
from 37,000 consignments
at our industrial auctions in 2009:
A 12% increase over 2008.

because they know they can buy a piece of equipment today and put it to work
almost instantly. Unlike wholesale buyers or resellers, end-users are rarely
speculative buyers; they tend to bid when they need a machine for a specific
project, which motivates them to outbid their competitors.
exposure to online and on-site bidders

Despite the convenience of online bidding, most Ritchie Bros. customers
still prefer to bid in person at our auction sites. They like “kicking the tires”
on the equipment they’re interested in and they like to see it running over the
ramp as they bid. When you’re selling a machine that’s worth tens or hundreds
of thousands of dollars, it’s important to reach every potential buyer – not just
the ones who choose to bid online.
on-site refurbishing

Many of our consignors have their equipment painted or refurbished at the
convenient, cost-competitive refurbishing facilities at our permanent auction
sites. Buyers will often pay a premium for a machine that is ready to be put
straight to work.
selling experience and expertise

Selling equipment takes time, expertise and resources. We take care of
every aspect of the sale of our customers’ equipment – from advertising to
meeting potential buyers to collecting proceeds to coordinating load out – so

they can focus on what they do best: running their business.
Our customers appreciate the convenience and value of our
after sale completion process. We coordinate all after sale
activities on their behalf, helping them avoid the hassles of
dealing with multiple buyers of their equipment. They also
take comfort in the fact that their valuable equipment is safe
and secure in our auction site.
almost instant liquidity

At Ritchie Bros. unreserved auctions, every single item
is sold on auction day. Within three weeks our consignors
have the net proceeds of the sale. Unlike most other sales
channels, our unreserved auctions provide almost instant
liquidity and certainty of sale for equipment sellers.
peace of mind

Ritchie Bros. is listed on the New York and Toronto
stock exchanges. We have a solid balance sheet and
more than 50 years of experience in the auction business.
Our customers feel confident placing their equipment in
our hands because we have the expertise, integrity and
financial ability to deliver on our commitments.

2009 annual report | ritchie bros. auctioneers

OuR CuSTOMERS vISIT rbauction.com TO:

check the auction calendar

In 2009 we conducted 327 unreserved auctions; as soon as we set an auction
date, add equipment or have new details about an auction, we can update our
web site, making rbauction.com the best place for our customers to find up-to-
the-minute auction information

search for equipment

We post detailed information about every item we sell on rbauction.com –
including photos, specifications and serial numbers – so our customers can
make accurate and informed buying decisions

look up past auction results

We publish the results for every auction item over the previous 24 months on
our web site within 48 hours of each auction, giving our customers free access
to worldwide equipment values and adding to the transparency of our auctions

bid online in real time

If they can’t make it to the auction site on auction day, our customers can visit
rbauction.com to bid online in real time, giving them greater access to the
worldwide equipment marketplace

place deposits or make payments

Our customers can use our Online Payment Service to place deposits or
make payments using their credit card, which is especially convenient for
our online bidders

get online shipping quotes or estimates

Customers buying or selling equipment at our auctions in the U.S. and Canada
can obtain quick estimates or competitive shipping quotes through our web site

find their local Ritchie Bros. representative or office

We have offices and auction sites in more than 25 countries to serve our
global customer base; finding your local representative is as easy as visiting
rbauction.com and looking for your country or region

rbauction.com

illions of people visit
rbauction.com every year,
making it one of the most
popular equipment web
sites in the world and one
of our most important
marketing channels. Our
web site is often our first point of contact with a
new customer; many people make a point of visiting
daily. We take advantage of the latest online tools
to attract new visitors to rbauction.com and then
provide useful tools and relevant content that give
them a reason to come back frequently.

rbauction.com Stats: 2009

29.6 million equipment searches
2.3 million auction results searches
30% more unique visitors than 2008

Grande Prairie, Alberta, Canada

2009 annual report | ritchie bros. auctioneers

OnLInE bIddIng

Edmonton, Alberta, Canada

Online bidding is a convenient option for many of our customers, and a
preferred option for some: they can bid on equipment being sold on the other
side of the world without leaving home, take 10 minutes out of their work day
to place a bid over the internet, or bid in multiple auctions taking place on the
same day.

Our online bidding service is designed to mimic the experience of bidding
on-site as closely as possible: internet bidders can hear the auctioneer, see
pictures and details of items as they’re sold, make selections from choice
groups, keep track of bids coming from on-site and online bidders, and place
bids – all in real time.

The 2009 version of our online bidding software improved greatly that
experience: online bidders can now see more equipment photos, enlarge the
images for a closer look and participate in multiple auctions taking place at
the same time without having to open new browser sessions.

Although most people still prefer to bid in person at our auctions, online
bidding greatly expands our international reach. By offering on-site and
online bidding, we’re able to attract the largest and most diverse audience

of potential buyers to our auctions, ensuring that our
consignors achieve maximum returns on the sale of their
equipment, regardless of local conditions.

By taking an innovative approach to serving both buyers
and sellers of equipment, and giving them the choice of how
they participate in our auctions, Ritchie Bros. confirmed its
position as the world’s largest industrial auctioneer in 2009
– on-site and online. The proof is in the numbers:

Almost 130,000 approved online bidders

from 196 countries

33 percent of our bidders participated

online in 2009

$831 million of equipment sold to online bidders

in 2009

Almost $3.3 billion of equipment sold to online

bidders since 2002

2009 annual report | ritchie bros. auctioneers

Our Auction Sites

ur global network of auction
sites is a critical strategic
asset and one of our most
significant competitive
advantages. We had 40
auction sites in North
America, Europe, the Middle
East and Australia at the end of 2009, including
32 permanent sites, with another seven new or
replacement sites under construction in Canada,
the U.S.A., Japan, Spain, Italy and Germany.

preferred

Our online bidding service is convenient, easy to
use and popular – and yet 67 percent of our registered
bidders participated in person at our auction sites in 2009,
purchasing over 75 percent of the equipment sold (by value).
Many customers still travel hundreds or thousands of miles
to attend our auctions because they prefer the live auction
experience. They like to assess the value and condition of
the equipment in the yard for themselves, see the machines
in operation while they bid, meet with other people in their
industry and enjoy the excitement of auction day.

convenient

An average Ritchie Bros. industrial auction features 1,450 items – and we
can display all of that equipment at our large, conveniently-located auction
sites. Bidders can visit the auction site in person prior to the auction and
inspect, test and compare items from many different sellers, all in one place,
which helps them make informed decisions on auction day.
secure

Both buyers and sellers take comfort in knowing that we have full care,
custody and control of the equipment we sell, from the time it enters our
secure auction sites to the time we release it to the new owner – fully paid for.
dependable

There is no substitute for a permanent address and regular auction
schedule. Our customers know where they can find us, where they can find
their equipment, and when the auctions usually take place. In addition, this
permanence helps maintain and enhance trust, a cornerstone of our business.
efficient

We conduct many off-site auctions at temporary locations, when that
option best serves the needs of our customers and the assets they are selling
– such as when a customer is selling their entire farm or when they have a
large equipment fleet located some distance away from our auction sites.
In most cases, however, it is more efficient and cost-effective to conduct the
auction at one of our own sites, where we can sell more equipment from more
sellers using the same amount of company time and resources.

canada

Vancouver, bC 1
Prince george, bC 2
grande Prairie, Ab 3
Edmonton, Ab 4
Saskatoon, SK 5
Regina, SK 6
London, On 7
Toronto, On 8
Montréal, QC 9
halifax, nS 10

usa

Olympia, WA 11
Sacramento, CA 12
Tipton, CA 13
Los Angeles, CA 14
Las Vegas, nV 15
Phoenix, AZ 16
Albuquerque, nM 17
denver, CO 18
Fort Worth, TX 19
houston, TX 20
Kansas City, MO 21
Minneapolis, Mn 22
Chicago, IL 23

nashville, Tn 24
Atlanta, gA 25
Columbus, Oh 26
Statesville, nC 27
Orlando, FL 28
north East, Md 29
hartford, CT 30

mexico
Mexico City 31

europe

Moerdijk, The netherlands 32
Paris, France 33
Caorso, Italy 34
Madrid, Spain 35
Moncofa, Spain 36

middle east

dubai, UAE 37

asia

narita, Japan 38

australia
brisbane, QLd 39
geelong, VIC 40

2009 annual report | ritchie bros. auctioneers

1
11

13
14

ThE EVOLUTIOn OF An AUCTIOn SITE

we intend to add an average of at least two new sites to our global

network every year, plus a number of replacement sites. when

assessing the potential for a new auction site we look at many factors,

including our auction history and the size and growth of our customer

base in that region; local regulations and conditions that impact

buying, selling and moving equipment; and the availability and

suitability of land near major transportation routes, airports, hotels

and other services. we don’t establish auction sites overnight; we

start small and build on our successes.

Minneapolis, Minnesota, uSA

First, we get to

1
know customers from
a new region when they
attend our auctions
in other regions.

2 Next, we send
a Territory Manager
into that region to assess
the market opportunity,
meet customers and
establish a sales office.

3 We then help
new customers in
that region buy and
sell equipment at our
auctions in other areas.

4 When the time

is right, we’ll conduct
an auction at a temporary
location in the new region.

5 After several

successful auctions,
we’ll usually open
a regional auction unit
on leased land with
limited auction and
administrative facilities.

6 When the growth
in gross auction proceeds
and the market potential
warrants the investment,
we’ll purchase land and
establish a full-service
permanent auction site –
and celebrate with
a Grand Opening auction.

2009 annual report | ritchie bros. auctioneers

growth Strategy

he future of ritchie bros.

The mission of Ritchie Bros.
is simple: to become the
world’s largest marketplace
for commercial and industrial
assets. We believe this mission
is both realistic and achievable,
as long as we maintain our innovative mindset, focus
on execution and stay true to our founding principles:
conducting strictly unreserved auctions and treating every
customer fairly and with respect. As we pursue this long-
term mission we intend to remain focused on two core goals:
(a) to maintain and enhance our corporate culture; and (b)
to grow our earnings per share at a manageable pace while
maintaining a reasonable return on invested capital.

the world each year. Auctions represent a very small segment of that market;
most people still sell their surplus equipment privately, by placing ads in
magazines or on the internet, or through other third party methods. Our
unreserved auctions offer significant benefits over these sales channels,
which is one of the reasons for our continued success.

Ritchie Bros. is the world’s largest auctioneer of industrial equipment; we
also sell more used equipment than any other organization in the world. Yet
we sold only $3.5 billion of equipment at our auctions in 2009 – less than four
percent of the amount trading hands. In other words, we are the dominant
player in the used equipment industry, with a very small share of a very large and
fragmented market – giving us significant potential for long-term, stable growth.
We will continue to focus on increasing our market share in our core
markets of construction, transportation and agricultural equipment, as well
as complementary markets such as mining, material handling, forestry and
petroleum assets.

While our stated mission is growth, we will not pursue
growth opportunities that offer short-term rewards but
run counter to our core values or jeopardize our high level
of customer service. We believe that compromising our
corporate culture would in fact inhibit our long-term growth
potential and be a disservice to our customers, employees
and shareholders.

Our growth strategy

To achieve our long-term objectives we are investing simultaneously on
three fronts: our people, places and processes. Our people help us achieve
our goals, our places give us the capacity to handle and locations for future
growth, and our processes enable us to become more efficient and effective
as we expand around the world.

opportunities for growth

our people

The worldwide market for used equipment is massive
and highly fragmented. Analysts estimate that more than
$100 billion of used equipment is bought and sold around

At its heart, our business is about relationships. We don’t sell a product,
we sell a service – and we need the right people interacting with our
customers, explaining the value that we provide and reflecting the integrity
of our auction processes. Recruiting, training and
retaining the right people – especially sales staff
– is one of our key priorities. We look for bright,
hardworking people with positive attitudes to join
our team. We give them the tools and training they
need to be effective and productive, and offer them
competitive compensation and opportunities for
growth within our organization.

We also remain focused on active succession
planning and leadership development, with an
emphasis on developing our employees from within.
We are committed to making Ritchie Bros. the kind
of company where motivated individuals can build
a rewarding career.

At the end of 2009, we had 1,148 full-
time employees working in more than 25
countries around the world, including 302 sales
representatives and 19 Trainee Territory Managers.

Panama City, Panama

2009 annual report | ritchie bros. auctioneers

Orlando, florida, uSA

MAnAgIng RISK

Most of our business is conducted
on a straight commission basis and is
therefore relatively risk free. In 2009,
approximately 80 percent of our business
was conducted on a straight commission
basis, which is marginally higher than the
average proportion in recent years. The
other 20 percent of our business involved a
guarantee of minimum sale proceeds or an
outright purchase of a customer’s assets.

We mitigate risk when entering into
underwritten contracts by building a
risk premium into our commission rate
and by following a rigorous inspection
and appraisal process that draws on our
extensive field experience and unparalleled

database of equipment values. We sell more
used equipment than any other company in
the world, giving us unparalleled knowledge
of the global equipment marketplace. As
a result, we can stay ahead of changing
market conditions and anticipate any shifts
in supply and demand, then adjust our
appraisals accordingly.

Equipment values are more stable
than stock and commodity prices and tend
not to fluctuate dramatically over short
periods of time, so the limited timeframe
that our guarantee and purchase contracts
are outstanding also mitigates our risk
on underwritten business. The time from
signing a contract to selling on auction

day is typically between 30 and 45 days,
which enables us to give more confident
assessments of potential auction day prices.
During economic downturns, demand
for underwritten contracts typically
increases. We’re one of the few companies
still in a position to offer guarantees; on the
other hand, we tend to be more conservative
when evaluating and structuring deals
during periods of market uncertainty, which
helps us further mitigate our risk. Faced
with the options and considering the cost of
an underwritten arrangement, most of our
customers choose a straight commission
contract – and realize the full benefit of
selling unreserved directly.

2009 annual report | ritchie bros. auctioneers

Mexico City, Mexico

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2009 annual report | ritchie bros. auctioneers
2009 annual report | ritchie bros. auctioneers

Our sales force grew 14 percent in 2009,
demonstrating the effectiveness of our recruiting
and retention programs.

our places

We intend to increase our share of existing
markets while simultaneously developing new
markets and expanding our international network
of auction sites. When we talk about markets,
we are referring to both market sectors and to
geographic areas.

Although we expect that most of our short-
term growth will come from regions where we are
already well established, such as the United States
and Western Europe, we believe that emerging
markets in developing countries offer significant
potential for long-term growth. That is why we
have established offices and are developing
relationships with new customers in countries like
China, India, Turkey and Poland among others.

We plan to expand our international network
of auction sites, adding at least two new sites to
our network every year, with a short-term focus on
the United States and Western Europe. We will also
continue conducting off-site auctions to expand
our presence in new regions.

Ritchie Bros. added three new auction
sites in 2009: London, Ontario; Madrid, Spain;
and Tipton, California.

At the end of 2009 we had 40 auction sites
in North America, Europe, the Middle East and
Australia, including 32 permanent sites.

We have seven new or
replacement auction sites under
development: permanent auction
sites in Vancouver, British Columbia;
Madrid, Spain; Caorso, Italy; Narita,
Japan; and St. Louis, Missouri, and
regional auction units in Meppen,
Germany and Salt Lake City, Utah.

We conducted a Grand
Opening auction in January 2010
at our new permanent auction site
in Narita, and finalized plans to
close our Buxton, North Dakota
permanent auction site.

our processes

We are committed to making our
business more consistent, efficient
and scalable by implementing
new and improved processes and
systems. Technology will continue
to play a large role in our business,
enabling us to improve the quality of

EnVIROnMEnTAL PRInCIPLES

Ritchie Bros. is committed to contributing to the protection of the
natural environment by preventing and reducing adverse impacts of
our operations. Our objective is to be more than compliant; we want to
make a positive contribution and be true to our core value: “We do what
is right.”

As part of this commitment, Ritchie Bros. will:

1) empower our employees to identify and address

environmental issues;

2) consider environmental impacts as part of all business decisions;

3) conduct business in compliance with applicable regulations and

legislation, and where appropriate, adopt the most stringent as our
global benchmark;

4) use resources wisely and efficiently to minimize our

environmental impact;

5) communicate transparently with our stakeholders about

environmental matters;

6) conduct ongoing assessments to ensure compliance and

good stewardship;

7) hold management accountable for providing leadership on

environmental matters, achieving targets, and providing education
to employees.

The purpose of these principles is to stimulate local decision-making
in line with our environmental principles and with executive leadership
as necessary.

our auctions and deliver added value
to our buyers and sellers. We believe
that the continuous improvement
mindset we’ve developed over the
past few years will help us improve
our margins over the long term.

In 2009, our process
improvement initiatives and
company-wide efforts to control
costs started to pay dividends:
we sold a record 283,000 lots,
12 percent more than 2008,
without an equivalent increase in
operating costs.

A m o n g t h e p ro cess
i m p r o v e m e n t
i n i t i a t i v e s
implemented or expanded in 2009:
new online bidding software, sales
force automation tool, FAIM tool,
web site redesign, Timed Auction
system, Virtual Ramp auctions and
uShip partnership.

2009 annual report | ritchie bros. auctioneers

Brisbane, Australia

Corporate governance

ur Board of Directors
is currently composed
of seven members. All
Board members except
Peter Blake, our CEO, are
independent directors.

robert murdoch — chairman

Bob Murdoch was elected to the Company’s Board
in 2006. Mr. Murdoch spent his career with Lafarge
Corporation and affiliates, suppliers of construction
materials, retiring from the position of President and Chief
Executive Officer of Lafarge North America Inc. (NYSE &
TSX: “LAF”) in 1992. Mr. Murdoch was a member of the
board of Lafarge, S.A. (NYSE: “LR”; Paris Stock Exchange
(Eurolist): “LG”) the Paris-based parent company of Lafarge
Corporation, until 2005 and still sits on their advisory board.
Mr. Murdoch is a director of Lallemand Inc., Weatherhaven
Inc. and Timberwest Forest Corp. (TSX: “TWF.un”). Mr.
Murdoch holds an LLB degree. Mr. Murdoch sits on the
Nominating & Corporate Governance Committee.

peter blake

Peter Blake joined Ritchie Bros. in 1991, having
worked previously with predecessor firms of
PricewaterhouseCoopers and KPMG. Mr. Blake is a
Chartered Accountant and started with the Company as
Controller. He was appointed Vice President, Finance in
1994, and in 1997 he was appointed Chief Financial Officer
and was elected to the Board. In 2002 Mr. Blake was
appointed Senior Vice President and became CEO effective
November 2004.

beverley briscoe

Bev Briscoe was appointed to the Ritchie Bros. Board
in 2004. Ms. Briscoe has an extensive background working
in industries complementary to the auction business and
currently works as a business consultant and is President
of Briscoe Management Ltd. Ms. Briscoe previously owned
and was president of Hiway Refrigeration Limited. Before
that she held executive positions with Wajax Industries Ltd.,
the Rivtow Group, and the Jim Pattison Group, and was a

manager at a predecessor firm of PricewaterhouseCoopers. Ms. Briscoe is a
member of the board of Goldcorp Inc. (TSX: “G”; NYSE: “GG”), as well as a
director of several non-profit organizations, including the B.C. Forest Safety
Council, the Boys and Girls Club of Greater Vancouver, Forum of Women
Entrepreneurs and Coast Opportunities Funds. Ms. Briscoe holds a Bachelor
of Commerce degree and is a Chartered Accountant (Fellow). Ms. Briscoe is
currently Chair of the Audit Committee and a member of the Nominating &
Corporate Governance Committee.

eric patel

Eric Patel was first elected to the Ritchie Bros. Board in 2004. Mr. Patel
has extensive business and financial experience, and is currently CFO of
Pembrook Mining Corp. (formerly Paget Resources Corporation), a private
mining company. Prior to that Mr. Patel acted as the CFO of Crystal Decisions,
Inc., a privately held software company. Mr. Patel joined Crystal Decisions
in 1999 after holding executive level positions, including that of CFO, with
University Games, Inc., a privately held manufacturer of educational toys
and games. Before 1997, Mr. Patel worked for Dreyer’s Grand Ice Cream
as Director of Strategy, for Marakon Associates strategy consultants and
for Chemical Bank. Mr. Patel holds an MBA degree. Mr. Patel is currently a
member of the Audit Committee and is Chair of the Nominating & Corporate
Governance Committee.

edward pitoniak

Ed Pitoniak was appointed to the Company’s Board in 2006 and is
currently Chair of the Company’s Compensation Committee. Mr. Pitoniak is
a businessman and until 2008 was President and CEO of bcIMC Hospitality,
a private hotel company. Prior to joining the predecessor firm of bcIMC
Hospitality Group in 2004 (Canadian Hotel Income Properties Real Estate
Investment Trust – TSX: “HOT.un”), Mr. Pitoniak was a Senior Vice-President
at Intrawest Corporation for eight years. Before Intrawest, Mr. Pitoniak spent
nine years with Times Mirror Magazines, where he held both top editorial and
advertising positions with Ski Magazine — specifically, editor-in-chief and
advertising director. Mr. Pitoniak has a Bachelor of Arts degree.

james micali

Jim Micali was appointed to the Company’s Board in 2008. Mr. Micali is
a senior advisor and limited partner of Azalea Capital (a private equity fund)
and a counsel of Ogletree Deakins, a labour and employment law firm. Mr.
Micali retired in 2008 from the position of Chairman and President of Michelin
North America, where he had responsibility for Michelin’s operations in North
America. He started his career with Michelin in 1977 and over the years had

2009 annual report | ritchie bros. auctioneers

beverley briscoe – eric patel – robert murdoch – peter blake – edward pitoniak – james micali – christopher zimmerman

Our Management Advisory Committee is responsible
for all of our significant policies and procedures. The
Committee is comprised of all of our Vice Presidents and
Divisional Managers. The members of the Management
Advisory Committee are pictured on pages 4 and 5 and are
listed on page 64.

responsibility for many of Michelin’s major business functions. Prior to joining
Michelin, Mr. Micali obtained his legal education from Boston College Law
School and was admitted to the bars of Rhode Island and Massachusetts.
Mr. Micali also served on the board of directors of Lafarge North America, a
supplier of construction materials (NYSE & TSX: “LAF”) from 2003 until May
2006. Mr. Micali sits on the Boards of Sonoco Products Company (NYSE:
“SON”), SCANA Corporation (NYSE: “SCG”), American Tire Distributors
Holdings, Inc. and Humphries Companies, LCC. Mr. Micali is a member of the
Company’s Audit Committee and Compensation Committee.

christopher zimmerman

Chris Zimmerman was elected to the Company’s Board in 2008. Mr.
Zimmerman is President of Easton-Bell Sports, Inc., a California based
designer, developer and marketer of sports equipment and accesories,
effective March 1, 2010, and was President and Chief Executive Officer of
Canucks Sports and Entertainment in Vancouver, B.C. until 2009. Before
joining them, Mr. Zimmerman held various senior positions with Nike,
most recently as President and Chief Executive Officer of Nike Bauer Inc. He
joined Nike in 1998 after spending 16 years in a variety of senior advertising
positions, including USA Advertising Director for the Nike Brand and Senior
Vice President at Saatchi and Saatchi Advertising in New York, where he
directed the advertising development for brands such as Tide, Wendy’s,
Champion Sportswear, Finesse Shampoo, Kenner Toys, and LifeSavers Candy.
Mr. Zimmerman has an MBA degree. Mr. Zimmerman is a member of the
Compensation Committee.

further governance information, including our Report on
Corporate Governance, which is included in our Information
Circular, is available on our web site at rbauction.com.

2009 annual report | ritchie bros. auctioneers

OUR AUCTIOn PROCESS: FROM SURPLUS TO SOLd

Selling through Ritchie Bros. is one of the best ways to turn assets into cash – quickly, efficiently and for
the best possible returns in the global market. We’ve developed a consistent, efficient and reliable auction
process that gives our customers the confidence they need when selling their valuable equipment.

STEP ONE: getting to know the customer
We take time to get to know our customers and find out how we can best meet their needs. The process of selling a piece
of equipment usually starts with a meeting between the owner and their local Ritchie Bros. representative – a meeting
that often marks the start or continuation of a long relationship.

STEP TwO: assessing the value of the equipment
Ritchie Bros. sells more used equipment than anyone else in the world. We can draw on our extensive experience and
knowledge of the global used equipment market to assess the value of a customer’s equipment and make the most
appropriate selling recommendations for their needs.

STEP THREE: drafting the auction contract
We offer our consignors a range of contract options, including straight commission, guarantee and outright purchase.
We strive to offer flexible contract options for our customers while accepting appropriate levels of risk.

STEP fOuR: getting the equipment ready for the auction
We will recommend and coordinate any cleaning, painting, repairs or other refurbishing that’s needed to help our
consignors achieve maximum value for their equipment on auction day.

STEP fIvE: marketing the equipment to the world
We post equipment photos and details on our high-traffic web site,
mail full-color auction brochures to tens of thousands of selected
customers, conduct email campaigns, arrange online, print and
radio advertising, and often employ strategic media relations
campaigns to attract the largest possible audience of potential
buyers to our auctions.

STEP SIX: searching the equipment for liens
Our search department works to identify and resolve any title issues
before the auction. If we can’t deliver clear and marketable title on
auction day, we will offer the buyer a full refund. Our customers bid
knowing they can take possession and put their auction purchases
straight to work as soon as they’ve paid.

STEP SEvEN: setting up the auction yard
We arrange equipment in logical groupings at the auction site so
our customers can easily inspect, test and compare different items
before they bid. We also provide any available documentation to
potential buyers, including work and repair history, so they can
assess the value of the equipment for themselves.

STEP EIGHT: conducting the auction
Our professional team works together to ensure that the auction
progresses smoothly and efficiently, and to make our bidders feel
confident and comfortable. We conduct fair, transparent auctions
and design our auction sites with comfort and convenience in mind.

STEP NINE: taking care of business
Once the auction is over, we collect the proceeds from the buyers; only then do we release the equipment to the new
owner. We then remit any taxes and fees to the appropriate authorities and – within three weeks of the auction – deliver
the net proceeds of the sale to our consignors, along with a detailed settlement statement.

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2009 annual report | ritchie bros. auctioneers
2009 annual report | ritchie bros. auctioneers

Financial Information

Management’s Discussion and Analysis
Auditors’ Reports
Consolidated Financial Statements

Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Comprehensive Income
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

PAGE

33
48

49
50
50
51
51
52

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following discussion summarizes significant factors affecting the consolidated operating
results and financial condition of Ritchie Bros. Auctioneers Incorporated (“Ritchie Bros.”,
the “Company”, “we” or “us”) for the year ended December 31, 2009 compared to the year
ended December 31, 2008. This discussion should be read in conjunction with our audited
consolidated financial statements and notes thereto for the year ended December 31, 2009,
and with the disclosures below regarding forward-looking statements and risk factors. The
date of this discussion is as of March 1, 2010. Additional information relating to our Company,
including our Annual Information Form, is available by accessing the SEDAR website at www.
sedar.com. None of the information on the SEDAR website is incorporated by reference into
this document by this or any other reference.

We prepare our consolidated financial statements in accordance with generally accepted
accounting principles in Canada, or Canadian GAAP. There are no material measurement
differences between the financial position and results of operations reflected on those
financial statements and the financial position and results of operations that would be
reported under generally accepted accounting principles in the United States, or U.S. GAAP,
except as described in note 14 to our audited consolidated financial statements. Amounts
discussed below are based on our audited consolidated financial statements prepared
in accordance with Canadian GAAP and are presented in U.S. dollars. Unless indicated
otherwise, all tabular and related footnote dollar amounts presented below are expressed
in thousands of dollars, except per share amounts.

Ritchie Bros. is the world’s largest auctioneer of industrial equipment, selling more equipment
to on-site and online bidders than any other company in the world. Our world headquarters
are located in Vancouver, British Columbia, Canada, and as of the date of this discussion,
we operated from over 110 locations in more than 25 countries, including 40 auction sites
worldwide. We sell, through unreserved public auctions, a broad range of used and unused
industrial assets, including equipment, trucks and other assets utilized in the construction,
transportation, agricultural, material handling, mining, forestry, petroleum and marine
industries. Our purpose is to use unreserved auctions to create a global marketplace for
our customers.

We operate mainly in the auction segment of the global industrial equipment marketplace.
Our primary target markets within that marketplace are the used truck and equipment
sectors, which are large and fragmented. The world market for used trucks and equipment
continues to grow, primarily as a result of the increasing, cumulative supply of used trucks
and equipment, which is driven by the ongoing production of new trucks and equipment.
Industry analysts estimate that the world-wide value of used equipment transactions, of the
type of equipment we sell at our auctions, is greater than $100 billion per year. Although we
sell more used equipment than any other company in the world, our share of this fragmented
market is in the range of 3%.

In recent periods, approximately 80% of what was sold at our auctions was purchased by
end users of trucks and equipment (retail buyers), such as contractors, with the remainder
being purchased primarily by truck and equipment dealers, rental companies and brokers
(wholesale buyers). Consignors to our auctions represent a broad mix of equipment owners,
the majority being end users of equipment, with the balance being finance companies, truck
and equipment dealers and equipment rental companies, among others. Consignment
volumes at our auctions are affected by a number of factors, including regular fleet upgrades
and reconfigurations, financial pressure, retirements, and inventory reductions, as well as
by the timing of the completion of major construction and other projects.

We compete directly for potential purchasers of industrial assets with other auction companies.
Our indirect competitors include truck and equipment manufacturers, other third party

methods, and equipment rental companies that offer an alternative to purchasing. When
sourcing equipment to sell at our auctions, we compete with other auction companies, other
third party methods, and equipment owners that have traditionally disposed of equipment
through private sales. Private sales between equipment owners are the dominant form of
transaction in the used truck and equipment sectors.

We have several key strengths that we believe provide distinct competitive advantages and
will enable us to grow and make our auctions more appealing to both buyers and sellers of
industrial assets. Some of our principal strengths include:

Our reputation for conducting only unreserved auctions and our widely recognized

commitment to honesty and fair dealing.

Our ability to transcend local market conditions and create a global marketplace for
industrial assets by attracting diverse audiences of mainly end-user bidders from around
the world to our auctions.

Our size, our financial strength and access to capital, the international scope of our

operations, our extensive network of auction sites, and our marketing skills.

Our ability to enhance our live auctions with technology using our online bidding service,
our proprietary Virtual Ramp methodology, which projects equipment photos and
information onto a large screen to allow bidders to view each item as they bid. Also our
Timed Auction system, which we piloted in 2009 and started rolling out to our auction
sites at the beginning of 2010; this allows our customers to bid on lower valued items
at their convenience rather than waiting for the auction schedule.

Our in-depth experience in the marketplace, including our equipment valuation expertise

and proprietary customer and equipment databases.

Our dedicated and experienced workforce, which allows us to, among other things,
enter new geographic markets, structure deals to meet our customers’ needs and
provide high quality and consistent service to consignors and bidders.

Strict adherence to the unreserved auction process is one of our founding principles and,
we believe, one of our most significant competitive advantages. When we say “unreserved”
we mean that there are no minimum bids or reserve prices on anything sold at a Ritchie
Bros. auction – each item sells to the highest bidder on sale day, regardless of the price.
In addition, consignors (or their agents) are not allowed to bid on or buy back or in any way
influence the selling price of their own equipment. We maintain this commitment to the
unreserved auction process because we believe that an unreserved auction is a fair auction.

We attract a broad base of bidders from around the world to our auctions. Our worldwide
marketing efforts help to attract bidders, and they are willing to travel long distances or
participate online in part because of our reputation for conducting fair auctions. These
diverse multinational, mainly end user bidding audiences provide a global marketplace that
allows our auctions to transcend local market conditions, which we believe is a significant
competitive advantage. Evidence of this is the fact that in recent periods an average of
approximately 60% of the value of equipment sold at our auctions left the region of the sale.

We believe that our ability to consistently draw significant numbers of local and international
bidders from many different end markets to our auctions, most of whom are end users rather
than resellers, is appealing to sellers of used trucks and equipment and helps us to attract
consignments to our auctions. Higher consignment volumes attract more bidders, which in
turn attract more consignments, and so on in a self-reinforcing process that has helped us
to achieve substantial momentum in our business.

2009 annual report | ritchie bros. auctioneers

In spite of the difficulties being faced by many companies as a result of recent economic
events, we believe that our business model remains strong and our strategy continues to
be viable. Financial and economic uncertainty generally acts as an incentive for equipment
owners to turn their surplus assets into cash quickly, efficiently and for fair market value,
which we believe benefits our business. In our experience over the last 50 years, when
cash flow or credit is tight and there is uncertainty in the market, traditional buyers of new
equipment are more likely to look for good quality, late-model used equipment, resulting
in demand for equipment at our auctions. We believe there is still a significant volume of
surplus used equipment in the market. However, in some geographic areas in which we
operate, particularly the United States, gross auction proceeds (described below) in 2009
were adversely affected by market uncertainty. We believe many equipment owners are
holding on to idle assets rather than selling them, hoping for the economy to recover and
used equipment pricing to improve. We have seen recent signs in many of our geographic
markets that equipment owners and their financial institutions are starting to accept the
current environment as the new reality, and we believe we are well positioned to assist these
owners when they do decide to sell their surplus assets. In some other markets, such as
Canada, we experienced strong growth in 2009.

Our strategy, which is discussed in more detail below, is designed in part to increase our
share of the large and highly fragmented used equipment market, and market share gains
tend not to be directly impacted by economic uncertainty. Also, there are still a significant
amount of infrastructure and other construction projects being undertaken around the
world, which we believe benefit our business by generating equipment buying and selling
activity at our auctions.

Equipment values at our auctions trended down through 2007, 2008 and into the early
part of 2009; they remained relatively stable for the balance of 2009. In 2009 we generally
saw these auction value decreases being offset by increased consignment volumes in our
Canadian and European auctions, but not in the United States market. The mix of equipment
being sold at our auctions changes continually and in 2009 the mix included an increase
in the number of lower value lots (which generally attract a higher commission rate). This
mix shift resulted in lower average gross auction proceeds per lot in 2009 and modestly
increased our auction revenue rate (i.e. auction revenues as a percentage of gross auction
proceeds – please see further discussion below) as lower value lots are generally charged
at a higher commission rate.

We have re-examined our growth strategy, including operating and capital plans, and overall
we continue to believe our business model is well suited for current economic conditions. We
also believe that designing and executing our strategy over the long term will continue to be
a more significant determinant of our ability to grow our earnings than the macro economic
environment, in part because our share of the world market for used trucks and equipment
is so small. We believe that our growth is not directly dependent on growth of the broader
used truck and equipment market.

2. Our places

We intend to continue to expand our presence in existing markets and enter new markets,
and to expand our international auction site network to handle expected growth in our
business. When we talk about markets, we are referring to geographic markets and
industry sectors.

Although we expect that most of our growth in the near future will come from expanding
our business and increasing our penetration in regions where we already have a presence,
such as the United States and Western Europe, we anticipate that emerging markets in
developing countries will be important in the longer term. Our sales offices in many of
these emerging markets have been established to position us to take advantage of these
future growth opportunities and we will continue to invest in frontier markets in the future.

We plan to expand our worldwide network of auction sites, adding an average of at least
two new permanent auction sites or regional auction units to our network every year. In
addition, we intend to expand or replace existing auction sites as necessary to provide
capacity for increased sales volumes. Our auction site network does not directly drive
our growth, but is a critical competitive advantage and helps us to sustain efficient and
scalable growth. We also intend to continue to hold offsite auctions in new regions to
expand the scope of our operations.

We also aim to increase our market share in our core markets of construction, transportation
and agricultural equipment, and to sell more assets in categories that are complimentary
to these core markets. Examples of these complimentary categories include mining,
forestry and petroleum assets.

3. Our processes

We are committed to developing and continually refining the processes and systems
that we use to conduct our business. We believe that this continuous improvement
focus will allow us to grow our revenues faster than our operating costs over the long
term. We also intend to use technology to facilitate our growth and enhance the quality
and service level of our auctions.

Over the past few years we have made significant progress in developing business
processes and systems that are efficient, consistent and scalable, including the successful
implementation of a new enterprise resource planning system.

We believe that these three components work together because our people help us to
achieve our growth objectives, our places give us focus areas for and the capacity to handle
growth, and our processes help us to achieve that growth with efficiency and consistency
while continuing to deliver value to our customers.

Strategy Execution in 2009

Highlights of the year ended December 31, 2009, included:

Growth Strategies

People

Our long-term mission is to be the world’s largest marketplace for commercial and industrial
assets. Our principal goals are to grow our earnings per share at a manageable pace over
the long term while maintaining a reasonable return on invested capital, and to maintain
and enhance the Ritchie Bros. culture. Our preference is to pursue sustainable growth with
a consistently high level of customer service, rather than targeting aggressive growth and
risking erosion of the strong customer relationships and high level of customer service that
we believe differentiate us from our competitors.

To grow our business, we are focusing simultaneously on three different fronts, and we
believe these three key components of our strategy work in unison.

1. Our people

People are a key driver of our growth, and one of our key strategies is to build the team that
will help us achieve our goals. This includes recruiting, training and developing the right
people, as well as enhancing the productivity of our sales force and our administrative
support teams by giving them the tools and training they need to be effective. This
component of our strategy also includes active succession planning and leadership
development, with a focus on developing employees from within our Company.

Our ability to recruit, train and retain capable new members for our sales team has
a significant influence on our rate of growth. Ours is a relationship business and our
Territory Managers are the main point of contact with our customers. We look for bright,
hard-working individuals with positive attitudes, and we are committed to providing our
people with a great workplace and opportunities to grow with the Company and become
future leaders of our global team. Our target is to increase our sales force by an average
of 5—10% per year.

In 2009 we increased our sales team to 302 people, a 14% increase compared to the end
of 2008. Because our business depends on trusting relationships with our customers to
generate consignments to our auctions, it can often take two to three years for a sales
person to achieve a suitable level of productivity. Our productivity, which we measure as
gross auction proceeds per revenue producer, was lower in 2009 than 2008 in part as a
result of this more rapid than normal growth in our sales force; it may take a year or more for
our productivity to improve. However, we expect that investing in our sales force will help
us to achieve our growth strategies.

Places

During 2009 we added three auction sites to our network and replaced an additional four
sites with larger facilities. In 2010, we plan to add at least four sites to our network and
replace three sites. Other achievements regarding our strategic plan for ‘Places’ included:

We held our first auctions in India and Turkey, our second auction in Poland and our
first auction in Panama since 1999, continuing the development of our business in our
frontier markets.

We completed the acquisition of the auction business and certain assets of Martella
Auction Company Inc., an agricultural and industrial equipment auctioneer based in
Tipton, California. As part of that acquisition, we signed a lease for Martella’s 65-acre
Tipton auction site. This transaction added to our sales team and our network of auction
sites.

We broke regional gross auction proceeds records in Denver, Colorado; Fort Worth,
Texas; Houston, Texas; Dubai, UAE; Caorso, Italy; Moncofa, Spain; Madrid, Spain; Paris,
France; Edmonton, Alberta; London, Ontario; and Montreal, Quebec.

2009 annual report | ritchie bros. auctioneers

We held our first auction at our replacement permanent auction sites in Houston, Texas;
Minneapolis, Minnesota; Grande Prairie, Alberta; and Mexico City, Mexico and at our
new permanent auction site in London, Ontario and our new regional auction unit in
Madrid, Spain.

revenue rate (because they generally attract a higher commission rate). This increase in
volume in 2009 offset some of the declines in auction values that we experienced in 2009
compared to 2008. The higher lot volume in 2009 did not translate into a significant increase
in our direct expense rate, suggesting a marked improvement in operational efficiency.

We completed the purchase of approximately 62 acres of land in Caorso, Italy, on which
we built a new permanent auction site to replace our existing regional auction unit in
that region. This new permanent auction site is expected to conduct its grand opening
auction in early 2010.

We completed the purchase of approximately 74 acres of land in Madrid, Spain, and
held our first auction at that location. We are building a new permanent auction site in
Madrid to complement our existing regional auction unit in Moncofa, Spain which we
expect to open in 2010.

We completed the purchase of approximately 67 acres of land near St. Louis, Missouri,
on which we are building a new permanent auction site that we expect to open in 2010.

We conducted our first auction at our new regional auction unit in Geelong, Australia,

which replaced our regional auction unit in Melbourne, Australia.

We extended the term of the lease on our regional auction unit in Las Vegas, Nevada to

25 years.

We signed a long term lease on 41 acres of land in Meppen, Germany and began
construction of a regional auction unit scheduled to open in 2010; and a long term
lease on 37 acres in Salt Lake City, Utah on which we intend to construct a new regional
auction unit to open in 2010.

Additionally, subsequent to year end, we conducted our grand opening auction at our new
permanent auction facility in Narita, Japan. We also completed the construction of and
relocated to our new Vancouver, British Columbia replacement permanent auction site.

Processes

Key achievements regarding our strategic plan for ‘Processes’ included:

We piloted our new Timed Auction technology, which allows us to sell certain consumer and
lower value items, such as buckets and attachments, without our usual live auctioneers
and ringmen. This automated system will result in tremendous efficiencies at our
auctions, allowing us to sell many lower value items in a shorter time and for lower
costs. We intend to roll out our Timed Auction system throughout our network in 2010.

We completed a worldwide rollout of our Field Asset Information Management System,
which is an automated system that enables our personnel to perform equipment
inspections and appraisals in a more consistent and efficient basis using a hand held
tool and sophisticated image management system.

We initiated the worldwide rollout to our sales team of a new sales force automation
tool. This tool will allow our sales force to manage relationships with their customers,
consignments to our auctions, and many other aspects of their roles with much greater
efficiency and scalability. We expect this tool to contribute to improve sales force
productivity in the future.

We entered into an arrangement with uShip.com, the world’s largest online shipping
marketplace, to provide online shipping solutions to our customers participating in our
U.S. and Canadian auctions.

Operations

The majority of our industrial auctions are held at our permanent auction sites, where we
own the land and facilities, or at regional auction units, where we usually lease the land and
typically have more modest facilities. We also hold off-site auctions at temporary locations,
often on land owned by one of the main consignors to the particular auction. Most of our
agricultural auctions are off-site auctions that take place on the consignor’s farm. During
2009, 90% of the gross auction proceeds from our auctions were attributable to auctions
held at our permanent auction sites and regional auction units (2008 – 89%). Gross auction
proceeds represent the total proceeds from all items sold at our auctions (please see “Sources
of Revenue and Revenue Recognition” below).

During 2009, we had approximately 336,000 bidder registrations at our industrial auctions,
compared to approximately 278,000 in 2008, an increase of 21%. This statistic points to the
value of our auctions. In addition, throughout our history, consignors to our auctions have
often developed their relationship with us starting as bidders at our auction.

In both 2009 and 2008 we received nearly 37,000 industrial asset consignments (typically
comprised of multiple lots). We handled approximately 283,000 lots in 2009, representing
an increase of 12% over 2008. The majority of these additional lots in 2009 were low value
lots, which affected the average lot value at our auctions and modestly increased our auction

During 2009, we conducted 195 unreserved industrial auctions at locations in North and
Central America, Europe, the Middle East, Australia and India (2008 – 193 auctions). We also
held 132 unreserved agricultural auctions during the year in Canada (2008 – 147). Although
our auctions have varied in size, our average industrial auction in 2009 attracted over 1,700
bidder registrations (2008 – over 1,400) and featured over 1,400 lots (2008 – over 1,300)
consigned by 190 consignors (2008 – 189), generating average gross auction proceeds of
approximately $17.3 million per auction, compared to approximately $17.7 million in 2008.
Our agricultural auctions in both 2009 and 2008 averaged approximately $0.9 million in size.

We sold approximately $830 million of trucks, equipment, and other assets to online bidders
during 2009, representing an 18% increase compared to 2008 (2008 – approximately $700
million). Our online sales growth in 2009 cemented our position as the world’s largest seller
of industrial equipment to online buyers.

In 2009, approximately 54% of our auction revenues was earned from operations in the United
States (2008 – 54%), 24% was generated from auctions in Canada (2008 – 21%) and the
remaining 22% was earned from operations in countries other than the United States and
Canada, primarily in Europe, the Middle East, Australia, and Mexico (2008 – 25%). We had
1,148 full-time employees at December 31, 2009, including 302 sales representatives and 19
trainee territory managers, compared to 1,077 full-time employees, 265 sales representatives
and 29 trainee territory managers at the end of 2008.

We are a public company and our common shares are listed under the symbol “RBA” on
the New York and Toronto Stock Exchanges. On March 1, 2010 we had 105,401,820 common
shares issued and outstanding and stock options outstanding to purchase a total of 2,899,393
common shares. On April 24, 2008, our issued and outstanding common shares were split
on a three-for-one basis. All share and per share amounts in this document reflect the stock
split on a retroactive basis.

Sources of Revenue and Revenue Recognition

Gross auction proceeds represent 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 our financial performance,
liquidity or revenue and is not presented in our consolidated financial statements. We believe
that auction revenues, which is the most directly comparable measure in our Statements of
Operations, and certain other line items, are best understood by considering their relationship
to gross auction proceeds. Auction revenues represent the revenues we earn in the course
of conducting our auctions. The portion of gross auction proceeds that we do not retain is
remitted to our customers who consign the items we sell at our auctions.

Auction revenues are comprised of auction commissions earned from consignors through
straight commission and guarantee contracts, net profits or losses on the sale of inventory
items, administrative and documentation fees on the sale of certain lots, auction advertising
fees, and the fees applicable to purchases made through our internet and proxy bidding
systems. All revenue is recognized when the auction sale is complete and we have determined
that the auction proceeds are collectible.

Straight commissions are our most common type of auction revenues and are generated
when we act as agent for consignors and earn a pre-negotiated, fixed commission rate on
the gross sales price of the consigned equipment at auction. In recent periods, straight
commission sales have represented approximately 75% of our gross auction proceeds
volume on an annual basis.

In the normal course of business, we sometimes guarantee minimum sales proceeds to
the consignor and earn a commission based on the actual results of the auction, typically
including a pre-negotiated percentage of any sales proceeds in excess of the guaranteed
amount. The consigned equipment is sold on an unreserved basis in the same manner as
other consignments. If the actual auction proceeds are less than the guaranteed amount,
our commission is reduced, and if the proceeds are sufficiently less, we can incur a loss
on the sale. We factor in a higher rate of commission on these sales to compensate for the
increased risk we assume.

Our financial exposure from guarantee contracts fluctuates over time, but in recent periods
industrial and agricultural auction guarantees have had an average period of exposure (days
remaining until date of auction as at quarter-end) of approximately 30 days and 80 days,
respectively. At December 31, 2009, our outstanding industrial and agricultural guarantees
totaled approximately $22 million, of which approximately $10 million had already been
sold at our auctions as of the date of this discussion. The combined financial exposure

2009 annual report | ritchie bros. auctioneers

from guarantee contracts at any period end can fluctuate significantly depending on the
timing of auctions; however the quarter-end balances averaged approximately $57 million
during 2009. Losses, if any, resulting from guarantee contracts are recorded in the period
in which the relevant auction is completed, unless the loss is incurred after the period end
but before the financial reporting date, in which case the loss is accrued in the financial
statements for the period end.

11%

Auction revenues also include the net profit or loss on the sale of inventory in cases where
we acquire ownership of equipment for a short time prior to an auction sale. We purchase
equipment for specific auctions and sell it at those auctions in the same manner as consigned
equipment. During the period that we retain ownership, the cost of the equipment is recorded as
inventory on our balance sheet. The net gain or loss on the sale is recorded as auction revenues.

10%

We generally refer to our guarantee and outright purchase business as our underwritten or
at-risk business. In recent periods, our at-risk business represented approximately 25% of
gross auction proceeds on an annual basis.

The choice by consignors between straight commission, guarantee, or outright purchase
arrangements depends on many factors, including the consignor’s risk tolerance and sale
objectives. In addition, we do not have a target for the relative mix of contracts. As a result, the
mix of contracts in a particular quarter or year fluctuates and is not necessarily indicative of the
mix in future periods. The composition of our auction revenues and our auction revenue rate
(i.e. auction revenues as a percentage of gross auction proceeds) is affected by the mix and
performance of contracts entered into with consignors in the particular period and fluctuates
from period to period. Our auction revenue rate performance is presented in the table below.

Q4
Q2
08
05
Quarterly Auction Revenue Rate and Trailing Twelve Month Average Auction Revenue Rate – 5 Year History(1)

Q3
08

Q3
05

Q4
04

Q1
05

Q4
05

Q1
06

Q2
06

Q3
06

Q4
06

Q1
07

Q2
07

Q4
07

Q3
07

Q1
08

Q2
08

Q4
04

Q1
05

Q2
05

Q3
05

Q4
05

Q1
06

Q2
06

Q3
06

Q4
06

Q1
07

Q2
07

Q4
07

Q3
07

Q1
08

Q2
08

Q4
08

Q3
08

Q1
09

Q2
09

Q4
09

Q3
09

Q1
09

Q2
09

Quarterly Auction Revenue Rate

Trailing Twelve Month Average Auction Revenue Rate

11%

10%

Q4
04

Q1
05

Q2
05

Q3
05

Q4
05

Q1
06

Q2
06

Q3
06

Q4
06

Q1
07

Q2
07

Q3
07

Q4
07

Q1
08

Q2
08

Q3
08

Q4
08

Q1
09

Q2
09

Q3
09

Q4
09

(1) Our historical auction revenue rates have been restated to conform to the presentation adopted in 2008. The revised presentation had an insignificant impact on auction revenue

rates for the periods 2004 through 2007. On an annual basis, the impact on auction revenue rates during this period was between one to 12 basis points.

Prior to 2008, our expected average annual auction revenue rate was in the range of 9.50%
to 10.00%. At the beginning of 2008, we made changes to certain of our existing fees charged
to our customers, including the minimum commission rate applicable to low value lots and
the consignor document administration fee. These fees were increased slightly to reflect
increased costs of conducting auctions. In addition, effective January 2008, we made certain
reclassifications in our statement of operations that affected our auction revenue rate,
including the reclassifications of interest income from auction revenues to other income and
auction advertising fees and documentation fees from direct expenses to auction revenues.
These changes were made to improve the presentation in our financial statements and had
no impact on our reported net earnings. As a result of the changes to our existing fees and
the reclassifications, in 2008 we increased our expected annual average auction revenue
rate to be in the range of 9.75% to 10.25%. However, our past experience has shown that our
auction revenue rate is difficult to estimate precisely, meaning our actual auction revenue
rate in future periods may be above or below our expected range. In 2009, we achieved an
auction revenue rate of 10.80% (2008 – 9.95%).

The largest contributor to the variability in our auction revenue rate is the performance, rather
than the amount, of our underwritten business. In a period when our underwritten business
performs better than average, our auction revenue rate typically exceeds the expected average
rate. Conversely, if our underwritten business performs below average, our auction revenue
rate will typically be below the expected average rate.

Our gross auction proceeds and auction revenues are influenced by the seasonal nature of the
auction business, which is determined mainly by the seasonal nature of the construction and
natural resources industries. Gross auction proceeds and auction revenues tend to be higher
during the second and fourth calendar quarters, during which time we generally conduct
more business than in the first and third calendar quarters. This seasonality contributes
to quarterly variability in our net earnings because a significant portion of our operating
costs is relatively fixed.

Gross auction proceeds and auction revenues are also affected on a period-to-period basis
by the timing of major auctions. In newer markets where we are developing operations, the
number and size of auctions and, as a result, the level of gross auction proceeds and auction
revenues, are likely to vary more dramatically from period to period than in our established
markets where the number, size and frequency of our auctions are more consistent. In
addition, economies of scale are achieved as our operations in a region evolve from conducting
intermittent auctions, to establishing a regional auction unit, and ultimately to developing a
permanent auction site. Economies of scale are also achieved when our auctions increase in size.

Because of these seasonal and period-to-period variations, we believe that gross auction
proceeds and auction revenues are best compared on an annual basis, rather than on a
quarterly basis.

Overall Performance

Our gross auction proceeds were $3.49 billion for the year ended 2009, which is a decrease
of 2% from 2008. The decrease is mainly attributable to the lower auction values in 2009
versus 2008 which was generally offset by higher volumes of equipment in most markets,
except for the United States. Equipment owners had the unusual situation of low interest rates
and generally more accommodating lenders, so in the face of a high degree of uncertainty
in the market and depressed equipment values, many equipment owners chose to hold
on to their assets.

Foreign exchange fluctuations had a modest impact on our 2009 gross auction proceeds.
Applying the foreign exchange rates in effect in 2008 our reported gross auction proceeds
in 2009 would have been approximately $35 million higher.

For the year ended December 31 2009, we recorded auction revenues of $377.2 million and net
earnings of $93.5 million, or $0.88 per diluted common share. This performance compares to
auction revenues of $354.8 million and net earnings of $101.4 million, or $0.96 per diluted
share for the year ended December 31, 2008. We ended 2009 with working capital of $30.5
million, compared to $47.1 million at December 31, 2008.

Adjusted net earnings for the year ended December 31, 2009 were $92.0 million, or $0.87
per diluted share, compared to adjusted net earnings of $85.5 million, or $0.81 per diluted
share for the year ended December 31, 2008. We define adjusted net earnings as financial
statement net earnings excluding the after-tax effects of sales of excess properties and
significant foreign exchange gains or losses resulting from financing activities that we do
not expect to recur in the future (please see our reconciliation below).

Adjusted net earnings is a non-GAAP measure that does not have a standardized meaning,
and is therefore unlikely to be comparable to similar measures presented by other companies.
We believe that comparing adjusted net earnings as defined above for different financial
periods provides more useful information about the growth or decline of net earnings for
the relevant period, and identifies the impact of items which we do not consider to be part
of our normal operating results.

Our adjusted net earnings in 2009 grew by approximately 8% compared to 2008 as a result
of a stronger auction revenue rate partially offset by higher operating costs.

2009 annual report | ritchie bros. auctioneers

A reconciliation of our net earnings to adjusted net earnings is as follows:

Year ended December 31,

Net earnings under Canadian GAAP
Gain on sale of excess property(1)
Net foreign exchange impact on
financing transactions(2)
Tax relating to reconciling items
Adjusted net earnings

2009

93,452
(1,097)

(759)
446
92,042

2008

$ 101,400
(8,304)

(9,188)
1,571
85,479

(1) In 2009, we recorded a gain of $1,097 ($746, or $0.01 per diluted share, after tax) on the sale of excess property. In 2008, we recorded a gain of $8,304 ($7,295, or $0.07 per diluted

share, after tax) on the sale of our former headquarters property located in Richmond, British Columbia.

(2) During 2009, we recorded a foreign exchange gain of $759 ($664, or 0.01 per diluted share, after tax) on U.S. dollar denominated bank debt held by a subsidiary that has the Canadian dollar
as its functional currency. The equivalent amount in 2008 was a foreign exchange loss of $5,835 ($4,989, or $0.05 per diluted share, after tax). We have highlighted this amount because in
January 2009, the Canadian subsidiary assigned the bank debt to an affiliate whose functional currency is the U.S. dollar to eliminate the future impact of currency fluctuations. In addition,
for the year ended December 31, 2008, we reclassified to net earnings foreign currency translation gains in the cumulated translation adjustment account of $15,023 ($13,615, or $0.13
per diluted share, after tax) as a result of the settlement of a number of foreign currency denominated intercompany loans that were considered long-term in nature. We did not settle any
long-term intercompany loans during 2009 that resulted in a significant foreign exchange adjustment. We have highlighted these amounts because we do not expect the foreign exchange
gains or losses on these financial transactions to recur in future periods.

Selected Annual Information

The following selected consolidated financial information as at December 31, 2009, 2008 and 2007 and for each of the years in the three-year period ended December 31, 2009 has been
derived from our audited consolidated financial statements. This data should be read together with those financial statements and the risk factors described below.

Our consolidated financial statements are prepared in U.S. dollars in accordance with Canadian GAAP. As disclosed in note 14, Canadian GAAP differs in certain respects from accounting
principles generally accepted in the United States.

Year Ended December 31,

Statement of Operations Data:
Auction revenues(1)
Direct expenses

Operating expenses(2)
Other income(3)
Earnings before income taxes
Income taxes
Net earnings

Net earnings per share — basic
Net earnings per share — diluted

Cash dividends declared per share(4)

Balance Sheet Data (year end):
Working capital (including cash)
Capital assets
Total assets
Long-term liabilities

Statement of Cash Flows Data:
Capital asset additions

2009

2008

2007

$ 377,211
(49,890)
327,321

(200,073)
4,275
131,523
38,071
93,452

0.89
0.88

0.38

30,510
597,945
857,821
145,213

$ 354,818
(49,750)
305,068

(189,320)
23,536
139,284
37,884
$ 101,400

0.97
0.96

0.34

47,109
453,642
689,488
77,495

$ 311,906
(46,481)
265,425

(164,233)
10,703
111,895
35,912
75,983

0.73
0.72

0.30

58,207
390,044
672,887
58,793

$ 157,416

$ 145,024

$ 113,219

(1) Auction revenues are comprised of commissions earned from consignors through straight commission and guarantee contracts, the net profit or loss on the sale of inventory items,

internet and proxy purchase fees, administrative and documentation fees on the sale of certain lots, and auction advertising fees.

(2) Operating expenses include depreciation and amortization and general and administrative expenses.
(3) Other income in 2009 included a $759 foreign exchange gain ($664, or $0.01 per diluted share, after tax) on U.S. dollar denominated bank debt held by a subsidiary that has the
Canadian dollar as its functional currency. The equivalent amount in 2008 was a foreign exchange loss of $5,835 ($4,989, or $0.05 per diluted share, after tax) and in 2007 was a gain
of $4,789 ($4,093, or $0.04 per diluted share, after tax). We have highlighted this amount because in January 2009, the Canadian subsidiary assigned the bank debt to an affiliate
whose functional currency is the U.S. dollar to eliminate the future impact of these currency fluctuations. In addition, during 2008, we reclassified to net earnings foreign currency
translation gains reported in the cumulative translation adjustment account of $15,023 ($13,615, or $0.13 per diluted share, after tax) as a result of the settlement of a number of
foreign currency denominated intercompany loans that were considered long-term in nature. We did not settle any long-term intercompany loans in 2009 that resulted in a significant
foreign exchange adjustment. We have highlighted these amounts because we do not expect such foreign exchange gains or losses relating to financial transactions to recur in future
periods. In addition, other income in 2009 included a gain of $1,097 ($746, or $0.01 per diluted share after tax) on the sale of excess property; other income in 2008 included an
$8,304 ($7,295, or $0.07 per diluted share, after tax) gain recorded on the sale of our former headquarters property located in Richmond, British Columbia.

(4) In addition to the cash dividends declared and paid in 2009, we declared a cash dividend of $0.10 per common share on January 22, 2010 relating to the quarter ended December

31, 2009, which is not included in this amount.

2009 annual report | ritchie bros. auctioneers

Results of Operations

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

We conduct operations around the world in a number of different currencies, but our reporting currency is the U.S. dollar. In 2009, approximately 40% of our revenues and approximately 50%
of our operating costs were denominated in currencies other than the U.S. dollar.

The main currencies other than the U.S. dollar in which our revenues and operating costs are denominated are the Canadian dollar and the Euro. In recent periods there have been significant
fluctuations in the value of the Canadian dollar and the Euro relative to the U.S. dollar. These fluctuations affect our reported auction revenues and operating expenses when non-U.S. dollar
amounts are converted into U.S. dollars for financial statement reporting purposes.

It is difficult, if not impossible, to quantify how foreign exchange rate movements affect such variables as the supply of and demand for the assets we sell. However, excluding these impacts,
the effect of foreign exchange rate fluctuations on our translated auction revenues and operating expenses in our consolidated financial statements has largely offset, making the net impact
of the currency fluctuation on our annual net earnings insignificant. Excluding the foreign exchange impacts on financing transactions discussed in “Overall Performance” above, our adjusted
net earnings for 2009 included a $1.8 million pre-tax loss (2008 – $2.5 million pre-tax gain) resulting from the revaluation and settlement of our foreign currency denominated monetary assets
and liabilities.

United States Dollar Exchange Rate Comparison
Years ended December 31,

2009

% Change in U.S.$

2008

% Change in U.S.$

2007

Value of one U.S. dollar:
Year-end exchange rate:
Canadian dollar
Euro

Average exchange rate:
Canadian dollar
Euro

Auction Revenues

Years ended December 31,

Auction revenues – United States(1)
Auction revenues – Canada(1)
Auction revenues – Europe(1)
Auction revenues – Other(1)
Total auction revenues

Gross auction proceeds
Auction revenue rate

$ 1.0513
€ 0.6985

-13.6%
-2.4%

$ 1.2168
€ 0.7159

22.5%
4.5%

$ 0.9937
0.685
€

$ 1.1415
€ 0.7197

7.0%
5.2%

$ 1.0671
€ 0.6839

-0.6%
-6.4%

$ 1.0740
€ 0.7305

2009

$ 202,415
90,148
57,714
26,934
$ 377,211

$ 3,492,021
10.80%

2008

% Change

$ 191,459
75,683
54,635
33,041
$ 354,818

$ 3,567,160
9.95%

6%
19%
6%
-18%
6%

-2%

(1) Information by geographic segment is based on auction location.

Our auction revenues increased in 2009 compared to 2008 primarily as a result of a higher auction revenue rate, partially offset by slightly lower gross auction proceeds and the impact of
currency fluctuations. Gross auction proceeds growth in Canada and the Middle East was offset by a decrease in the United States and Europe. Our gross auction proceeds in 2009 in local
currency, primarily being the United States, Canadian and Australian dollar and the Euro, increased by 2% compared to 2008. Excluding the United States market, gross auction proceeds
increased by 10% in local currency in 2009 compared to 2008.

Our underwritten business represented 21% of our total gross auction proceeds in 2009 (24% in 2008). As discussed above under “Sources of Revenue and Revenue Recognition,” we do not
have a target for the relative mix of contracts. The mix experienced in 2009 was driven by our consignor’s risk tolerance and sale objectives, and is not necessarily indicative of the mix in future
periods or a trend.

Our auction revenue rate was 10.80% for 2009, which was higher than our current expected range of 9.75% to 10.25%. The increase compared to our experience in 2008 related primarily to
the performance of our underwritten business (guarantee and inventory contracts), which performed better in 2009 than in 2008. This better performance reflected our efforts to apply a more
conservative approach to evaluating potential underwritten contracts in 2009 in the face of uncertainty in the market. We do not expect this above trend performance to continue in the future;
our experience has shown that rates usually revert to the mean. As a result, we expect our annual average auction revenue rate to be in the range of 9.75% to 10.25% in the foreseeable future.
Our actual auction revenue rate in future periods may be above or below our expected range.

Our auction revenues and our net earnings are influenced to a great extent by small changes in our auction revenue rate. For example, a 10 basis point (0.1%) increase or decrease in our auction
revenue rate during 2009 would have impacted auction revenues by approximately $3.5 million, of which approximately $2.5 million, or $0.02 per share, would have flowed through to net
earnings after tax in our statement of operations, assuming no other changes. This factor is important to consider when evaluating our current and past performance, as well as when judging
future prospects.

Direct Expenses
Years ended December 31,

Direct expenses
Direct expenses as a percentage of gross auction proceeds

2009

49,890
1.43%

2008

% Change

49,750
1.39%

0.3%

Direct expenses are the costs we incur specifically to conduct an auction. Direct expenses include the costs of hiring temporary personnel to work at the auction, advertising costs directly related
to the auction, travel costs for employees to attend and work at the auction, security personnel hired to safeguard equipment at the auction site and rental expenses for temporary auction
sites. At each quarter end, we estimate the direct expenses incurred with respect to auctions completed near the end of the period. In the subsequent quarter, these accruals are adjusted,
to the extent necessary, to reflect actual costs incurred.

2009 annual report | ritchie bros. auctioneers

Our direct expense rate, which represents direct expenses as a percentage of gross auction
proceeds, fluctuates from period to period based in part on the size and location of the
auctions we hold during a particular period. The direct expense rate generally decreases as
the average size of our auctions increases. In addition, we usually experience lower direct
expense rates for auctions held at our permanent auction sites compared to auctions held
at offsite locations, mainly as a result of the economies of scale and other efficiencies that
we typically experience at permanent auction sites. Our direct expense rate for 2009 was
marginally higher than the rate for 2008 mainly as a result of the slight decrease in our gross
auction proceeds. We were able to keep our direct expenses in line with 2008 even though
we sold 12% more lots in 2009, which is a demonstration of improved operating efficiency.

Depreciation and Amortization Expense
Years ended December 31,

2009

2008

% Change

Depreciation and amortization expense

$ 31,761

$ 24,764

28%

Depreciation is calculated on either a straight line or a declining balance basis on capital
assets employed in our business, including buildings, computer hardware and software,
automobiles and yard equipment. Depreciation increased in 2009 compared to 2008 as a
result of depreciation relating to new assets that we have put into service in recent periods,
such as our new permanent auction sites and new computer hardware and software outlined
elsewhere in this discussion. We expect our depreciation in future periods to increase in line
with our recent and on-going capital expenditures. A significant number of capital assets were
put into use during the fourth quarter of 2009 and further assets are expected to be put into
use in the first quarter of 2010. The timing of these and other future additions is expected to
increase our depreciation expense in 2010 by an estimated 40% compared to 2009.

General and Administrative Expenses
Years ended December 31,

2009

2008

% Change

General and administrative expenses
G&A as a percentage of gross

$ 168,312

$ 164,556

auction proceeds

4.82%

4.61%

General and administrative expenses, or G&A, include such expenditures as personnel (salaries,
wages, bonuses and benefits), information technology, non-auction related travel, repairs and
maintenance, leases and rentals and utilities. G&A expenses exclude foreign exchange gains
or losses resulting from the revaluation and settlement of monetary assets and liabilities.

Foreign currency fluctuations contributed to a decrease in our G&A of approximately $6.6
million in 2009 compared to 2008 in connection with the translation into U.S. dollars for
reporting purposes of our foreign operations’ G&A expenses.

Our ongoing investments in our people, places and processes continued to contribute to
the growth in our gross auction proceeds in local currency and adjusted net earnings during
2009. Please refer to “Overall Performance” for a description of adjusted net earning and
for a reconciliation of adjusted net earnings to net earnings for 2009 and 2008. Our future
success is dependent upon adding people to grow our business, building the places required
to handle our anticipated future growth, and developing and implementing processes to help
gain efficiencies and ensure consistency. Our sales force and administrative support teams
are instrumental in carrying out these building and development programs and are necessary
to facilitate and accommodate that growth. Personnel costs are the largest component of our
G&A representing roughly 60% of our G&A on an annual basis, and our workforce increased
7% from December 31, 2008 to December 31, 2009. This increase was partially offset by the
foreign currency effect discussed above. Our ongoing expansion will continue to influence
future levels of G&A.

Interest Expense
Years ended December 31,

2009

2008

% Change

Interest expense

544

859

-37%

Interest expense is comprised mainly of interest paid on long-term debt and revolving credit
facilities. Interest expense decreased in 2009 compared to 2008 primarily because of an increase
in the amount of interest we capitalized to property under development. The relationship
between capital expenditures and interest paid will likely result in higher interest expense in
2010. We expect that a lower proportion of our interest costs will be capitalized to properties
under development in 2010 because our capital expenditures are expected to decrease
(please see further discussion below).

Interest Income
Years ended December 31,

2009

2008

% Change

Interest income

$ 2,400

$ 4,994

-52%

Interest income, which is earned on payments from customers and our excess cash balances
invested in conservative and liquid investments, is mostly affected by market interest rates.
In recent periods, market interest rates in Canada and the United States have decreased
dramatically, which resulted in a decrease in our interest income. In addition, our interest
income can fluctuate from period to period depending on our cash position, which is affected
by the timing, size and number of auctions held during the period, as well as the timing of the
receipt of auction proceeds from buyers which may bear interest.

Foreign Exchange Gain (Loss)
Years ended December 31,

2009

2008

% Change

Foreign exchange gain (loss)

$ (1,085)

$ 11,656

90%

Foreign exchange gains or losses arise when foreign currency denominated monetary items
are revalued to the exchange rates in effect at the end of the reporting period. The gain or loss
recognized in any given period is affected by changes in foreign exchange rates as well as the
composition of our foreign currency denominated assets and liabilities. In 2009, the foreign
exchange loss included the impact of foreign exchange rates on U.S. dollar denominated bank
debt held by a Canadian subsidiary, which was assigned in January 2009 to an affiliate whose
functional currency is the U.S. dollar to eliminate the impact of these currency fluctuations
on this debt in future periods. The foreign exchange impact of this bank debt in the first
quarter of 2009 was a $0.8 million gain compared to a $5.8 million foreign exchange loss in
2008. In 2008, the foreign exchange gain also included the reclassification to net earnings
of foreign currency translation gains of $15.0 million reported in the cumulative translation
adjustment account as a result of the settlement of a number of foreign currency denominated
intercompany loans that had been considered long-term (see discussion under “Overall
Performance”). We did not settle any intercompany loans in 2009 that resulted in a significant
foreign exchange adjustment.

Gain on Disposition of Capital Assets
Years ended December 31,

2009

2008

% Change

Gain on disposition of capital assets

647

$ 6,370

N/A

The gain on disposition of capital assets in 2009 included a $1.1 million gain ($0.7 million
after tax) on the sale of our former Minneapolis, Minnesota permanent auction site, which was
partially offset by writing off costs incurred on property and software developments that were
no longer considered viable. The gain on disposition of capital assets in 2008 included an $8.3
million gain recorded on the sale of our former headquarters property located in Richmond,
British Columbia, which was partially offset by write offs of costs incurred on property and
software development projects that were no longer considered viable.

Income Taxes
Years ended December 31,

Income taxes
Effective income tax rate

2009

2008

% Change

$ 38,071
28.9%

$ 37,884
27.2%

0.5%

Income taxes have been calculated using the tax rates in effect in each of the tax jurisdictions
in which we earn our income. The effective tax rate for the year ended December 31, 2009
includes a favourable tax adjustment in the amount of $1.9 million relating to uncertain tax
positions. The effective tax rate for 2008 includes adjustments recorded in 2008 to reflect
our actual cash tax expenses arising from our 2007 tax filings. In 2008 we also realized the
benefit of foreign exchange gains on financing transactions and the gain on sale of property
which were subject to a lower tax rate. These did not recur to the same extent in 2009. Income
tax rates in future periods will fluctuate depending upon the impact of unusual items and the
level of earnings in the different tax jurisdictions in which we earn our income.

2009 annual report | ritchie bros. auctioneers

Net Earnings
Years ended December 31,

Net earnings before income taxes
Net earnings
Net earnings per share – basic
Net earnings per share – diluted

2009

$ 131,523
93,452
0.89
0.88

2008

% Change

$ 139,284
101,400
0.97
0.96

-5.6%
-7.8%
-8.2%
-8.3%

Our net earnings decreased in 2009 compared to 2008 as a result of the gain recorded on the sale of our former headquarters property in 2008, offset by higher auction revenues in 2009.
Adjusted net earnings for 2009 were $92.0 million, or $0.87 per diluted share, compared to adjusted net earnings of $85.5 million, or $0.81 per diluted share in 2008, representing an 8%
increase in 2009. Adjusted net earnings in 2009 were higher compared to 2008, primarily as a result of increased auction revenues and lower operating costs. Please see “Overall Performance”
for a description of adjusted net earnings and for a reconciliation of adjusted net earnings to net earnings for 2009 and 2008.

Summary of Fourth Quarter Results

We earned auction revenues of $97.1 million and net earnings of $21.8 million, or $0.21 per diluted share, during the fourth quarter of 2009. Adjusted net earnings for the fourth quarter of 2009
were $21.1 million, or $0.20 per diluted share. This compares to auction revenues of $81.7 million, net earnings of $27.1 million, or $0.26 per diluted share, and adjusted net earnings of $19.2
million, or $0.18 per diluted share, in the fourth quarter of 2008.

A reconciliation of our net earnings under Canadian GAAP to adjusted net earnings for each of the quarters ended December 31, 2009 and 2008 is as follows:

Quarter ended December 31,

Net earnings under Canadian GAAP
Gain on sale of excess property(1)
Net foreign exchange impact on
financing transactions(2)
Tax relating to reconciling items
Adjusted net earnings

2009

21,834
(1,097)

–
351
21,088

2008

27,140
–

(8,476)
558
19,222

(1) During the three months ended December 31, 2009, we recorded a gain of $1,097 ($746, or $0.01 per diluted share, after tax) on the sale of excess property.
(2) During the three months ended December 31, 2008, we recorded a foreign exchange loss of $3,778 ($3,230, or $0.03 per diluted share, after tax) on U.S. dollar denominated bank debt
held by a subsidiary that has the Canadian dollar as its functional currency. We have highlighted this amount because in January 2009, the Canadian subsidiary assigned the bank debt
to an affiliate whose functional currency is the U.S. dollar to eliminate the future impact of these currency fluctuations. No amount was recorded in the three months ended December 31,
2009. In addition, during the fourth quarter of 2008, we reclassified to net earnings foreign currency translation gains reported in the cumulated translation adjustment account of $12,254
($11,148, or $0.11 per diluted share, after tax) as a result of the settlement of a number of foreign currency denominated intercompany loans that were considered long-term in nature. We
did not settle any long-term intercompany loans during the fourth quarter of 2009 that resulted in a significant foreign exchange adjustment. We have highlighted these amounts because
we do not expect the foreign exchange gains or losses on these financing transactions to recur in future periods.

Our gross auction proceeds were $891.1 million for the quarter ended December 31, 2009, which is an increase of 4% compared to the comparable period in 2008. This increase in our gross
auction proceeds was mainly attributable to increased gross auction proceeds earned in Canada and foreign exchange fluctuations. It is difficult to isolate the effects of currency fluctuations
on our customers’ buying and selling patterns and therefore, our gross auction proceeds. However, had the foreign exchange rates in effect in the fourth quarter of 2008 been applied to the
gross auction proceeds achieved in the fourth quarter of 2009, our reported gross auction proceeds would have been approximately 6% lower.

Our auction revenue rate increased to 10.90% in the fourth quarter of 2009 from 9.57% in the comparable period in 2008, mainly as a result of the stronger performance of our underwritten
business in the fourth quarter of 2009.

Our G&A expenses increased to $45.0 million in the fourth quarter of 2009, compared to $38.3 million in the comparable 2008 period. During the fourth quarter of 2009, the translation into
U.S. dollars of our non-U.S. operations’ G&A expenses resulted in an increase in consolidated G&A expenses of approximately $3.2 million, primarily as a result of foreign currency fluctuations.
Our G&A also increased because of the 1% increase in our workforce in the fourth quarter of 2009.

We experienced a 20.0% decrease in our earnings in the fourth quarter of 2009 compared to the equivalent period in the prior year primarily as a result of foreign exchange gains realized in
2008. Adjusted net earnings in the fourth quarter of 2009 increased by 10% compared to 2008, due to increased auction revenues partially offset by higher operating expenses.

Capital asset additions were $40.1 million for the fourth quarter of 2009, compared to $47.2 million in the fourth quarter of 2008. Our capital expenditures in the fourth quarter of 2009 related
primarily to construction of our new or replacement permanent auction sites in St Louis, Missouri; Grande Prairie, Alberta; Chilliwack, British Columbia; Caorso, Italy; Madrid, Spain; Mexico
City, Mexico; and Narita, Japan, as well as the expansion of our existing permanent auction site in Orlando, Florida. Exchange rate changes relating to capital assets held in currencies other
than the U.S. dollar resulted in a decrease in our reported capital assets on our consolidated balance sheet of $0.3 million in the fourth quarter of 2009 compared to a decrease of $14.8 million
in the equivalent period in 2008.

Summary of Quarterly Results

The following tables present our unaudited consolidated quarterly results of operations for each of our last eight fiscal quarters. This data has been derived from our unaudited consolidated
financial statements, which were prepared on the same basis as our annual audited consolidated financial statements and, in our opinion, include all normal recurring adjustments necessary
for the fair presentation of such information. These unaudited quarterly results should be read in conjunction with our audited consolidated financial statements for the years ended December
31, 2009 and 2008, and our discussion above about the seasonality of our business.

2009 annual report | ritchie bros. auctioneers

Q4 2009

Q3 2009

Q2 2009

Q1 2009

Gross auction proceeds(1)

$ 891,111

$ 693,288

$ 1,109,331

$ 798,291

Auction revenues
Net earnings
Adjusted net earnings(6)

Net earnings per share — basic
Net earnings per share — diluted
Adjusted net earnings per share — diluted(6)

97,143
21,834(4)
21,088

0.21
0.21
0.20

75,934
12,892
12,892

0.12
0.12
0.12

$ 120,459
38,847
38,847

0.37
0.37
0.37

83,675
19,879(2)
19,215

0.19
0.19
0.18

Q4 2008

Q3 2008

Q2 2008

Q1 2008

Gross auction proceeds(1)

$ 853,927

$ 767,718

$ 1,163,546

$ 781,969

Auction revenues
Net earnings
Adjusted net earnings(6)

Net earnings per share — basic(5)
Net earnings per share — diluted(5)
Adjusted net earnings per share — diluted(6)

81,693
27,140(2)(3)
19,222

0.26
0.26
0.18

75,909
11,934(2)
13,025

0.11
0.11
0.12

$ 115,822

45,919(2)(3)(4)
37,942

0.44
0.43
0.36

81,394
16,407(2)(3)
15,290

0.16
0.16
0.14

(1) Gross auction proceeds represent the total proceeds from all items sold at our auctions. Gross auction proceeds are not a measure of revenue and are not presented in our consolidated

financial statements. Please see further discussion above under “Sources of Revenue and Revenue Recognition”.

(2) Net earnings included the impact of foreign exchange rates on U.S. dollar denominated bank debt held by a Canadian subsidiary, which was assigned in January 2009 to an affiliate whose
functional currency is the U.S. dollar to eliminate the impact of these currency fluctuations on this debt in future periods. Please see further discussion above under “Overall Performance”.
The foreign exchange impact of this bank debt in the first quarter of 2009 was a $759 gain ($664, or $0.01 per diluted share, after tax). The impact in the fourth, third, second and first
quarters of 2008 was a $3,778 loss ($3,230, or $0.03 per diluted share, after tax), $1,276 loss ($1,091, or $0.01 per diluted share, after tax), $205 gain ($175, or less than $0.01 per
diluted share, after tax), and $986 loss ($843, or $0.01 per diluted share, after tax), respectively.

(3) Net earnings in the fourth quarter of 2008 included the reclassification of foreign currency translation gains of $12,254 ($11,148, or $0.11 per diluted share, after tax) relating to the
settlement of foreign currency denominated intercompany loans. Amounts included in the second and first quarters of 2008 relating to these settlements were $680 ($507, or less than
$0.01 per diluted share, after tax) and $2,089 ($1,960, or $0.02 per diluted share, after tax), respectively. We have highlighted these amounts as we do not expect these items to recur in
future periods.

(4) Net earnings in the fourth quarter of 2009 included a gain of $1,097 (746, or $0.01 per diluted share, after tax) on the sale of excess property. Net earnings in the second quarter of 2008
included a gain of $8,304 recorded on the sale of our former headquarters property in Richmond, British Columbia ($7,295, or $0.07 per basic and diluted share, after tax). Excluding this
amount, net earnings for the fourth quarter would have been $38,624, or $0.37 per basic and diluted share.

(5) Net earnings per share amounts have been adjusted on a retroactive basis to reflect the April 24, 2008 three-for-one stock split.
(6) Adjusted net earnings is a non-GAAP measure that does not have a standardized meaning and is therefore unlikely to be comparable to similar measures presented by other Companies.

Please refer to “Overall Performance” for a description of adjusted net earnings.

Liquidity and Capital Resources

December 31,

Working capital

2009

2008

30,510

47,109

% Change

-35.2%

Our cash position can fluctuate significantly from period to period, largely as a result of differences in the timing, size and number of auctions, the timing of the receipt of auction proceeds from
buyers, and the timing of the payment of net amounts due to consignors. We generally collect auction proceeds from buyers within seven days of the auction and pay out auction proceeds to
consignors approximately 21 days following an auction. If auctions are conducted near a period end, we may hold cash in respect of those auctions that will not be paid to consignors until after
the period end. Accordingly, we believe that working capital, including cash, is a more meaningful measure of our liquidity than cash alone. For 2009, our working capital decreased by $16.6
million, mostly as a result of our capital expenditures and dividend payments partially offset by positive operating results and the proceeds from draws on our credit facilities during 2009.

There are a number of factors that could potentially impact our working capital, such as current global economic conditions, which may affect the financial stability of our buyers and their
ability to pay on a timely basis. However, we have substantial borrowing capacity in the event of any temporary working capital requirements. As at December 31, 2009, we had $461 million
of unused credit facilities, which included a $166 million five-year committed credit facility expiring in January 2014, and a $193 million three-year uncommitted non-revolving credit facility
expiring in November 2011. We believe our existing working capital and credit facilities are sufficient to satisfy our present operating requirements, as well as to fund future growth initiatives,
such as property acquisitions and development. Our access to capital resources has not been impacted by the recent events in credit markets, and we do not expect that the current economic
environment will have a material adverse impact on our capital resources or our business. However, there can be no assurance that the cost or availability of future borrowings under our credit
facilities will not be affected should there be a prolonged capital market disruption.

Contractual Obligations
Payments Due by Year

Long-term debt obligations
Operating leases obligations
Other long-term obligations
Total contractual obligations

Total

In 2010

In 2011 and 2012

In 2013 and 2014

After 2014

$ 130,827
159,851
1,592
$ 292,270

14,268
9,952
338
24,558

30,000
18,125
687
48,812

29,487
15,093
567
45,147

57,072
116,681
–
$ 173,753

2009 annual report | ritchie bros. auctioneers

Our long-term debt included in the table above is comprised mainly of term loans put in place in 2005 with original terms to maturity of five years, a revolving loan drawn under a credit facility
that is available until January 2014, as well as a term loan put in place in 2009 with a term to maturity of seven years. Our operating leases relate primarily to land on which we operate regional
auction units and administrative offices. These properties are located in Canada, the United States, Panama, Spain, Germany, the Netherlands, the United Arab Emirates, India, Japan and China.

In the normal course of our business, we will sometimes guarantee to a consignor a minimum level of proceeds in connection with the sale at auction of that consignor’s equipment. Our total
exposure at December 31, 2009 from these guarantee contracts was $21.6 million (compared to $17.9 million at December 31, 2008), which we anticipate will be offset by the proceeds that
we will receive from the sale at auction of the related equipment. We do not record any liability in our financial statements in respect of these guarantee contracts, and they are not reflected in
the contractual obligations table above.

Cash Flows
December 31,

Cash provided by (used in):

Operations
Investing
Financing

2009

2008

% Change

$ 138,455
(164,656)
22,914

90,688
(110,211)
(6,194)

52%
48%
N/A

Similar to the discussion above about our cash position, our cash provided by operations can fluctuate significantly from period to period, largely as a result of differences in the timing, size
and number of auctions during the period, the timing of the receipt of auction proceeds from buyers, and the timing of the payment of net amounts due to consignors. During 2009, cash used
for the investment in capital assets exceeded our cash provided by operations. As we continue to execute our strategy to expand our presence in existing and new markets in the near term,
cash used in investing activities may continue to exceed cash provided by our operations. Depending on the timing of capital expenditures, we may be required to take on additional debt to
fund these investments.

Capital asset additions were $157.4 million for 2009 compared to $145.0 million in 2008. Our capital expenditures in 2009 related primarily to the acquisition of land in Caorso, Italy; Madrid,
Spain; and St. Louis, Missouri; the expansion of our existing permanent auction site in Orlando, Florida and the construction of our new permanent auction sites in Houston, Texas; St. Louis,
Missouri; Grande Prairie, Alberta; Chilliwack, British Columbia; Caorso, Italy; Madrid, Spain; Mexico City, Mexico; and Narita, Japan. Capital asset additions also included investments in computer
software and hardware as part of our process improvement initiatives and our acquisition of the business of Martella Auction Company. Exchange rate changes relating to capital assets held
in currencies other than the U.S. dollar, which are not reflected as capital asset additions on our consolidated statements of cash flows, resulted in an increase of $24.9 million in the capital
assets reported on our consolidated balance sheet as at December 31, 2009, compared to a decrease of $26.0 million in 2008.

Based on our most recent review of our auction site development and process improvement initiatives, we expect that our annual capital expenditures will be in the range of $100 million per year
for the near term. We intend to add auction facilities in selected locations around the world as appropriate opportunities arise, either to replace existing facilities or to establish new sites. We
plan to add an average of at least two new permanent auction sites or regional auction units to our network per year, as well as a number of replacement facilities. Actual expenditures will vary
depending on the availability and cost of suitable expansion opportunities and prevailing business and economic conditions. Depending on the scope of the required system improvements,
the process improvement expenditures will likely be primarily for hardware, the development, purchase and implementation of software, and related systems. We expect to fund future capital
expenditures from operating cash flows and borrowings under credit facilities.

During 2009, we provided a secured loan of $5.3 million with market terms to a lessor with whom we have a long-term property lease. The loan is repayable in monthly installments of principal
and interest, with the balance due in March 2013. The loan is secured by the underlying property and a neighbouring property.

We declared and paid regular cash dividends of $0.09 per share for each of the quarters ended December 31, 2008 and March 31, 2009, and declared and paid dividends of $0.10 per share
for each of the quarters ended June 30, 2009 and September 30, 2009. The payments of these dividends were made in 2009 and the total dividend payments for 2009 were $40.0 million
compared to $35.6 million in 2008. All dividends we pay are “eligible dividends” for Canadian income tax purposes unless indicated otherwise.

Long-term Debt and Credit Facilities
Our long-term debt and available credit facilities at December 31, 2009 and December 31, 2008 were as follows:

Long-term debt

Revolving credit facilities – total available:
Revolving credit facilities – total unused:

Non-revolving credit facilities – total available:
Non-revolving credit facilities – total unused:

Total unused credit facilities

December 31, 2009

December 31, 2008

$ 130,394

67,411

% Change

93%

$ 318,423
$ 268,011

$ 250,000
$ 192,928

$ 460,939

$ 330,119
$ 262,316

$ 250,000
$ 250,000

$ 512,316

Our credit facilities are with financial institutions in the United States, Canada, The Netherlands and The United Kingdom. Certain of the facilities include commitment fees applicable to the
unused credit amount. During 2009, we increased our revolving credit facilities in Europe by approximately €20 million. As at December 31, 2009, we had fixed rate and floating rate long-term
debt with interest rates ranging from 1.1% to 6.4%. We were in compliance with all financial covenants applicable to our debt at December 31, 2009. Our long term debt and credit facilities have
increased in 2009 in order to fund our auction site development activities.

Future scheduled interest expenses over the next five years under our existing term debt are as follows:

In 2010

In 2011

In 2012

In 2013

In 2014

Interest expense on long-term debt

5,967

4,001

3,968

3,671

2009 annual report | ritchie bros. auctioneers

Quantitative and Qualitative Disclosure about Market Risk

Although we cannot accurately anticipate the future effect of inflation on our financial condition
or results of operations, inflation historically has not had a material impact on our operations.

Because we conduct operations in local currencies in countries around the world, yet have the
U.S. dollar as our reporting currency, we are exposed to currency fluctuations and exchange rate
risk on all operations conducted in currencies other than the U.S. dollar. We cannot accurately
predict the future effects of foreign currency fluctuations on our financial condition or results of
operations. For 2009, approximately 40% of our revenues were earned in currencies other than
the U.S. dollar and approximately 50% of our operating costs were denominated in currencies
other than the U.S. dollar. On an annual basis, we expect these amounts to substantially offset
and generally act as a natural hedge against exposure to fluctuations in the value of the U.S.
dollar. We have not adopted a long-term hedging strategy to protect against foreign currency
fluctuations associated with our operations denominated in currencies other than the U.S. dollar,
but we will consider hedging specific transactions if we deem them appropriate in the future.

During the year ended December 31, 2009, we recorded an increase in our foreign currency
translation adjustment balance of $18.4 million, compared to a decrease of $26.9 million in
2008, excluding the impact of the reclassification to net earnings of foreign currency transaction
gains of $14.9 million in 2008. Our foreign currency translation adjustment arises from the
translation at the end of each reporting period of our net assets denominated in currencies
other than the U.S. dollar into our reporting currency. Changes in this balance arise primarily
from the strengthening or weakening of non-United States currencies against the U.S. dollar.

We have not experienced significant interest rate exposure historically, as our long-term
debt generally bears fixed rates of interest. However, borrowings under our global revolving
credit facility are only available at floating rates of interest. If our portfolio of floating rate
debt increases, we may consider the use of interest rate swaps to mitigate our exposure
to interest rate fluctuations. As at December 31, 2009, we had $29.5 million (December 31,
2008 – $25.4 million) in revolving loans bearing floating rates of interest. With other variables
unchanged, a 100 basis points or 1% increase or decrease in interest rates would have no
significant impact on the Company’s financial position or results of operations for the year
ended December 31, 2009.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current
or future material effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital resources.

Legal and Other Proceedings

From time to time we have been, and expect to continue to be, subject to legal proceedings
and claims in the ordinary course of our business. Such claims, even if lacking merit, could
result in the expenditure of significant financial and managerial resources. We are not aware
of any legal proceedings or claims that we believe will have, individually or in the aggregate,
a material adverse effect on us or on our financial condition or results of operations or that
involve a claim for damages, excluding interest and costs, in excess of 10% of our current assets.

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements in conformity with Canadian GAAP, we must
make decisions that impact the reported amounts and related disclosures. Such decisions
include the selection of the appropriate accounting principles to be applied and the assumptions
on which to base accounting estimates. In reaching such decisions, we apply judgments based
on our understanding and analysis of the relevant circumstances and historical experience.
On an ongoing basis, we evaluate these judgments and estimates, including consideration
of uncertainties relating to revenue recognition criteria, valuation of consignors’ equipment
and other assets subject to guarantee contracts, recoverability of capital assets, goodwill and
future income tax assets, and the assessment of possible contingent assets or liabilities that
should be recognized or disclosed in our consolidated financial statements. Actual amounts
could differ materially from those estimated by us at the time our consolidated financial
statements are prepared.

The following discussion of critical accounting policies and estimates is intended to supplement
the significant accounting policies presented as note 1 to our consolidated financial statements,
which summarizes the accounting policies and methods used in the preparation of those
consolidated financial statements. The policies and the estimates discussed below are included
here because they require more significant judgments and estimates in the preparation and
presentation of our consolidated financial statements than other policies and estimates.

Accounting for Income Taxes
We record income taxes relating to our business in each of the jurisdictions in which we operate.
We estimate our actual current tax exposure and the temporary differences resulting from
differing treatment of items for tax and book accounting purposes. These differences result in
future income tax assets and liabilities, which are included within our consolidated balance

sheet. We must then assess the likelihood that our future income tax assets will be recovered
from future taxable income. If recovery of these future tax assets is considered unlikely, we
must establish a valuation allowance. To the extent we either establish or increase a valuation
allowance in a period, we must include an expense within the tax provision in the consolidated
statement of operations. Significant management judgment is required in determining our
provision for income taxes, our measurement of future tax assets and liabilities, and any
valuation allowance recorded against our net future tax assets. If actual results differ from
these estimates or we adjust these estimates in future periods, we may need to establish a
valuation allowance that could materially impact the presentation of our financial position
and results of operations.

Valuation of Goodwill
We assess the possible impairment of goodwill in accordance with standards issued by the
Canadian Institute of Chartered Accountants in Canada (known as the CICA) and the Financial
Accounting Standards Board in the United States. The standards stipulate that reporting
entities test the carrying value of goodwill for impairment annually at the reporting unit level
using a two-step impairment test; if events or changes in circumstances indicate that the
asset might be impaired, the test is conducted more frequently.

In the first step of the impairment test, the net book value of each reporting unit is compared
with its fair value. We operate as a single reporting unit, which is the consolidated public
company. As a result, we are able to refer to the stock market for a third party indicator of our
Company’s fair value. As long as the fair value of the reporting unit exceeds its net book value,
goodwill is considered not to be impaired and the subsequent step of the impairment test is
unnecessary. Changes in the market value of our common shares may impact our assessment as
to whether goodwill has been impaired. These changes may result from changes in our business
plans or other factors, including those that are outside our control. We perform the goodwill
test each year as at September 30, or more frequently if events or changes in circumstances
indicate that goodwill might be impaired. We performed the test as at September 30, 2009
and determined that no impairment had occurred.

Changes in Accounting Policies

On January 1, 2009, we adopted the Canadian Institute of Chartered Accountants (CICA) Handbook
Section 3064 Goodwill and Intangible Assets, the revisions to Section 3855 Financial Instruments
– Recognition and Measurement and Section 3862 Financial Instrument – Disclosures and
the Emerging Issues Committee (EIC) Abstract 173 Credit risk and the Fair Value of Financial
Assets and Financial Liabilities. Section 3064 establishes new standards for the recognition
and measurement of intangible assets, but accounting for goodwill is unchanged. Revisions to
Sections 3855 and 3862 were to enhance the disclosure requirements for publicly accountable
enterprises. The adoption of Section 3064 and EIC 173 did not impact the presentation of our
consolidated financial position or results of operations.

Recent Accounting Pronouncements

In January 2009, the CICA issued Handbook Section 1582 Business Combinations, 1601
Consolidated Financial Statements and 1602 Non-controlling Interests which replace Sections
1581 Business Combinations and 1600 Consolidated Financial Statements. These new standards
are harmonized with International Financial Reporting Standards (IFRS) and will become
effective in 2011; early adoption is permitted.

International Financial Reporting Standards

In February 2008, the Canadian Accounting Standards Board confirmed its strategy of replacing
Canadian GAAP with International Financial Reporting Standards (or IFRS) for Canadian publicly
accountable enterprises. IFRS is issued by the International Accounting Standards Board (IASB).
IFRS will be effective for our interim and annual financial statements effective January 1, 2011.
The conversion to IFRS will impact our accounting policies, information technology and data
systems, internal control over financial reporting, and financial statement presentation and
disclosure. The transition may also impact our business processes and operations, including
such areas as contractual arrangements, debt covenants, and compensation arrangements.

We commenced our IFRS conversion project in 2007 and have established a conversion
plan and an IFRS project team. We have identified the standards that have an impact on our
financial statements, business processes and systems. We have presented and discussed
the following major identified differences with the Audit Committee of our Board of Directors:

Property, plant and equipment (PP&E) – we have chosen to use the cost method under IFRS
and will review annually depreciation methods and useful lives. We have identified assets
meeting the investment property criteria under IAS 40: Investment Property; these will be
shown separately on the financial statements. We have also chosen to use the cost method
of accounting for these assets. Our annual impairment testing methodology will change as
we will be testing at the cash-generating unit level, rather than the reporting unit level. We
have not identified any indications of expected impairment to either PP&E or goodwill on the
date of transition to IFRS.

2009 annual report | ritchie bros. auctioneers

Business combinations that occurred prior to January 1, 2010 will remain unchanged, subject to
the requirements of appendix C of IFRS 1 First Time Adoption of International Financial Reporting
Standards. From January 1, 2010 onwards we intend to account for all business combinations
in line with IFRS 3 Business Combinations for our IFRS financial reporting.

Leases will be assessed for classification as operating or finance lease under IAS 17 Leases.
Our preliminary assessment has not indicated any change to the classification of our leases
currently recorded as operating leases.

Income taxes will be reviewed for past uses of initial recognition exemption the effects of which
will be removed in the transition adjustments. Stock options issued which are tax deductible
must be revalued at each reporting date under IFRS. The temporary differences created on this
revaluation will be included in deferred tax. Furthermore, our future tax assets and liabilities
recorded in our consolidated balance sheets will be reclassified to be entirely non-current
and renamed “deferred tax assets and liabilities”.

We have also prepared draft annual financial statements and related notes in compliance
with IFRS. The following IFRS 1 exemptions from retrospective application are available to us
and may be used on transition to IFRS:

“Internal Control – Integrated Framework”, management concluded that our internal control
structure and procedures over financial reporting were effective as of December 31, 2009.

The effectiveness of our internal controls over financial reporting as of December 31, 2009 has
been audited by KPMG LLP, the independent registered public accounting firm that audited
our December 31, 2009 consolidated annual financial statements, as stated in their report
which is included in our consolidated financial statements.

Changes in Internal Controls Over Financial Reporting

There has been no change in our internal control over financial reporting during 2009 that
has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.

Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. These statements
are based on current expectations and estimates about our business, and include, among
others, statements relating to:

Business Combinations: At the date of transition to IFRS on January 1, 2010 we will apply
IFRS 3 prospectively and use the exemption in IFRS to treat prior business combinations
in a manner consistent with Canadian GAAP.

our future performance;

growth of our operations;

Share Based Payments: We have not elected to apply IFRS 2: Share Based Payments to
options granted before November 7, 2002 and those options that were granted after
November 7, 2002 which were vested at January 1, 2010.

Cumulative Translation Differences: We will “reset” cumulative translation differences
accumulated as at the date of transition to zero. The gain/loss on a subsequent disposal
of any foreign operation then excludes translation differences that arose before the date
of transition, but includes all later translation differences.

As the IASB will continue to issue new accounting standards during our conversion period
the final impact of IFRS on the presentation of our financial position and results of operations
and our financial statement disclosure will only be measured once the IFRS applicable at our
conversion date are known.

As the new accounting policies under IFRS are finalized, a review of the integrity of our internal
control over financial reporting and disclosure controls and procedures will be completed.
At this time, we believe that the current framework is sufficiently robust to incorporate the
changes to the financial reporting processes.

We have conducted training sessions targeted to various levels of our organization. We also
plan to continue to provide training to other key employees and will monitor the impacts on
our business processes and operations, our information systems, and develop a broader
external communication plan.

Our transition plans relating to IFRS are on schedule and we will continue to provide updates on
the status of key activities for this project in our quarterly and annual Management’s Discussion
and Analysis throughout the period to initial adoption on January 1, 2011.

Disclosure Controls and Procedures

We have established and maintained disclosure controls and procedures in order to provide
reasonable assurance that material information relating to our Company is made known to
the appropriate level of management in a timely manner.

Based on current securities legislation in Canada and the United States, our Chief Executive
Officer and Chief Financial Officer are required to certify that they have assessed the effectiveness
of our disclosure controls and procedures as at December 31, 2009.

We performed an evaluation under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls
and procedures as at December 31, 2009. Based on that evaluation, we concluded that our
disclosure controls and procedures were effective as of that date to provide reasonable
assurance that information required to be disclosed by us in the reports that we file or submit
is accumulated and communicated to our management, including our principal executive and
principal financial officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.

growth of the world market for used trucks and equipment;

increases in the number of consignors and bidders participating in our auctions;

the impact of the current economic environment on our operations and capital resources,
and our customers, including the number of bidders and buyers attending our auctions and
consignment volumes at those auctions; the demand for our services during challenging
economic times; our bidders’ ability to access credit to fund their purchases; the impact
of the economic environment on equipment prices, supply and demand, risk and our
business model;

our principal operating strengths, our competitive advantages, and the appeal of our

auctions to buyers and sellers of industrial assets;

our ability to draw consistently significant numbers of local and international end-user

bidders to our auctions;

our long-term mission to be the world’s largest marketplace for commercial and industrial

assets;

our people, including our ability to recruit, train, retain and develop the right people to

help us achieve our goals and the desired increase in our sales force;

our places, including our ability to add the capacity necessary to accommodate our
growth; our ability to increase our market share in our core markets and regions; and
our ability to expand into complimentary market sectors and new geographic markets,
including our ability to take advantage of growth opportunities in emerging markets; the
acquisition and development of auction facilities and the related impact on our capital
expenditures;

our processes, including our process improvement and system continuity initiatives and
their effect on our business, results of operations and capital expenditures, particularly
our ability to grow revenues faster than operating costs;

the relative percentage of gross auction proceeds represented by straight commission,
guarantee and inventory contracts;

our auction revenue rates, the sustainability of those rates, and the impact of our
commission rate and fee changes implemented in 2008, as well as the seasonality of
gross auction proceeds and auction revenues;

our direct expense and income tax rates, depreciation expenses and general and

administrative expenses;

our future capital expenditures;

our internet initiatives and the level of participation in our auctions by internet bidders;

the proportion of our revenues and operating costs denominated in currencies other
than the U.S. dollar or the effect of any currency exchange and interest rate fluctuations
on our results of operations; and

financing available to us and the sufficiency of our working capital to meet our financial

Internal Control over Financial Reporting

needs.

Management is responsible for establishing and maintaining an adequate internal control
structure and procedures for financial reporting. Under the supervision and with the participation
of management, including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation under the framework in

Forward-looking statements are typically identified by such words as “anticipate”, “believe”,
“could”, “feel”, “continue”, “estimate”, “expect”, “intend”, “may”, “ongoing”, “plan”,
“potential”, “predict”, “will”, “should”, “would”, “could”, “likely”, “generally”, “future”,
“period to period”, “long term”, or the negative of these terms, and similar expressions intended
to identify forward-looking statements. Our forward-looking statements are not guarantees
of future performance and involve risks, uncertainties and assumptions that are difficult to

2009 annual report | ritchie bros. auctioneers

predict. While we have not described all potential risks related to our business and owning
our common shares, the important factors listed under “Risk Factors” below are those that
we consider may affect our performance significantly or could cause our actual financial and
operational results to differ significantly from our predictions. Except as required by applicable
securities law and regulations of relevant securities exchanges, we do not intend to update
publicly any forward-looking statements, even if our predictions have been affected by new
information, future events or other developments. You should consider our forward-looking
statements in light of these and other relevant factors.

Risk Factors

Our business is subject to a number of risks and uncertainties, and our past performance is no
guarantee of our performance in future periods. Some of the more important risks that we face
are outlined below and holders of our common shares should consider these risks. The risks
and uncertainties described below are not the only risks and uncertainties we face. Additional
risks and uncertainties not currently known to us or that we currently deem immaterial may
also impair our business operations. If any of the following risks actually occur, our business,
results of operations and financial condition would suffer.

Damage to our reputation for fairness, integrity and conducting only unreserved auctions
could harm our business.
Strict adherence to the unreserved auction process is one of our founding principles and,
we believe, one of our most significant competitive advantages. Closely related to this is our
reputation for fairness and honesty in our dealings with our customers. Our ability to attract
new customers and continue to do business with existing customers could be harmed if our
reputation for fairness, integrity and conducting only unreserved auctions was damaged. If
we are unable to maintain our reputation and police and enforce our policy of conducting
unreserved auctions, we could lose business and our results of operations would suffer.

Decreases in the supply of, demand for, or market values of industrial assets, primarily
used industrial equipment, could harm our business.
Our auction revenues could be reduced if there was significant erosion in the supply of,
demand for, or market values of used industrial equipment, which would affect our financial
condition and results of operations. We have no control over any of the factors that affect the
supply of, and demand for, used industrial equipment, and the circumstances that cause
market values for industrial equipment to fluctuate – including, among other things, economic
uncertainty, disruptions to credit and financial markets, a sustained economic recession,
lower commodity prices, and our customers’ restricted access to capital – are beyond our
control. Any increase in the volume or change in the mix of equipment at our auctions may
not be sufficient to offset declines in the market value for that equipment as a result of the
current economic environment. In addition, price competition and availability of industrial
equipment directly affect the supply of, demand for, and market value of used industrial
equipment. Climate change initiatives, including significant changes to engine emission
standards applicable to industrial equipment, may also impact the supply of, demand for or
market values of industrial equipment.

We may incur losses as a result of our guarantee and outright purchase contracts and
advances to consignors.
In recent periods, approximately 75% of our business has been conducted on a straight
commission basis. In certain other situations we will either offer to:

guarantee a minimum level of sale proceeds to the consignor, regardless of the ultimate

selling price of the consignment at the auction; or

purchase the equipment outright from the consignor for sale in a particular auction.

The level of guaranteed proceeds or inventory purchase price is based on appraisals performed
on equipment by our internal personnel. Inaccurate appraisals could result in guarantees or
inventory values that exceed the realizable auction proceeds. If auction proceeds are less than
the guaranteed amount, our commission will be reduced or, if sufficiently lower, we will incur a
loss. If auction proceeds are less than the purchase price we paid for equipment that we take
into inventory temporarily, we will incur a loss. Because all of our auctions are unreserved,
there is no way for us to protect against these types of losses by bidding on or acquiring any of
the items at the auction. In recent periods, guarantee and inventory contracts have generally
represented approximately 25% of our annual gross auction proceeds.

Occasionally we advance to consignors a portion of the estimated auction proceeds prior to
the auction. We generally make these advances only after taking possession of the assets to
be auctioned and upon receipt of a security interest in the assets to secure the obligation. If
we were unable to auction the assets or if auction proceeds were less than amounts advanced,
we could incur a loss.

or businesses from third parties. We may not be successful in growing our business or in
managing this growth. For us to grow our business successfully, we need to accomplish a
number of objectives, including:

recruiting and retaining suitable sales and managerial personnel;

identifying and developing new geographic markets and market sectors;

identifying and acquiring, on terms favourable to us, suitable land on which to build new
auction facilities and, potentially, businesses that might be appropriate acquisition targets;

managing expansion successfully;

obtaining necessary financing on terms favourable to us, and securing the availability

of our credit facilities to fund our growth initiatives;

receiving necessary authorizations and approvals from governments for proposed
development or expansion;

integrating successfully new facilities and any acquired businesses into our existing
operations;

achieving acceptance of the auction process in general by potential consignors, bidders

and buyers;

establishing and maintaining favourable relationships with consignors, bidders and
buyers in new markets and market sectors, and maintaining these relationships in our
existing markets;

succeeding against local and regional competitors in new geographic markets;

capitalizing on changes in the supply of and demand for industrial assets, in our existing
and new markets; and

designing and implementing business processes and operating systems that are able

to support profitable growth.

We will likely need to hire additional employees to manage our growth. In addition, growth may
increase the geographic scope of our operations and increase demands on both our operating
and financial systems. These factors will increase our operating complexity and the level of
responsibility of existing and new management personnel. It may be difficult for us to attract
and retain qualified sales personnel, managers and employees, and our existing operating
and financial systems and controls may not be adequate to support our growth. We may not
be able to improve our systems and controls as a result of increased costs, technological
challenges, or lack of qualified employees. Our past results and growth may not be indicative
of our future prospects or our ability to expand into new markets, many of which may have
different competitive conditions and demographic characteristics than our existing markets.

In addition, we continue to pursue our strategy of investing in our people, places and processes
to give us the capacity to handle expected future growth, including investments in frontier
markets that may not generate profitable growth in the near term. Planning for future growth
requires investments to be made now in anticipation of growth that may not materialize, and
if we are not successful growing our gross auction proceeds our earnings may be adversely
impacted. A large component of our G&A expenses is considered fixed costs that we will incur
regardless of gross auction proceeds growth. There can be no assurances that our gross auction
proceeds and auction revenues will grow at a more rapid rate than our fixed costs, especially
in the event of a deep and prolonged recession, which would have a negative impact on our
margins and earnings per share.

Our future expenses may increase significantly or our operations and ability to expand
may be limited as a result of environmental and other regulations.
A variety of federal, provincial, state and local laws, rules and regulations, including local tax
and accounting rules, apply to our business. These relate to, among other things, the auction
business, imports and exports of equipment, worker safety, privacy of customer information,
and the use, storage, discharge and disposal of environmentally sensitive materials. Complying
with revisions to laws, rules and regulations could result in an increase in expenses and a
deterioration of our financial performance. Failure to comply with applicable laws, rules and
regulations could result in substantial liability to us, suspension or cessation of some or
all of our operations, restrictions on our ability to expand at present locations or into new
locations, requirements for the acquisition of additional equipment or other significant
expenses or restrictions.

The development or expansion of auction sites depends upon receipt of required licenses,
permits and other governmental authorizations. Our inability to obtain these required items
could harm our business. Additionally, changes or concessions required by regulatory authorities
could result in significant delays in, or prevent completion of, such development or expansion.

We may have difficulties sustaining and managing our growth.
One of the main elements of our strategy is to continue to grow our business, primarily by
increasing our presence in markets in which we already operate and by expanding into new
geographic markets and market segments in which we have not had a significant presence
in the past. As part of this strategy, we may from time to time acquire additional assets

Under some environmental laws, an owner or lessee of, or other person involved in, real
estate may be liable for the costs of removal or remediation of hazardous or toxic substances
located on or in, or emanating from, the real estate, and related costs of investigation and
property damage. These laws often impose liability without regard to whether the owner,
lessee or other person knew of, or was responsible for, the presence of the hazardous or toxic

2009 annual report | ritchie bros. auctioneers

substances. Environmental contamination may exist at our owned or leased auction sites,
or at other sites on which we may conduct auctions, or properties that we may be selling by
auction, from prior activities at these locations or from neighbouring properties. In addition,
auction sites that we acquire or lease in the future may be contaminated, and future use of or
conditions on any of our properties or sites could result in contamination. The costs related to
claims arising from environmental contamination of any of these properties could harm our
financial condition and results of operations.

There are restrictions in the United States and Europe that may affect the ability of equipment
owners to transport certain equipment between specified jurisdictions. One example of these
restrictions is environmental certification requirements in the United States, which prevent
non-certified equipment from entering into commerce in the United States. If these restrictions,
or changes to environmental laws, were to inhibit materially the ability of customers to ship
equipment to or from our auction sites, they could reduce gross auction proceeds and harm
our business.

International bidders and consignors could be deterred from participating in our auctions if
governmental bodies impose additional export or import regulations or additional duties, taxes
or other charges on exports or imports. Reduced participation by international bidders and
consignors could reduce gross auction proceeds and harm our business, financial condition
and results of operations.

Disruptions to credit and financial markets and economic uncertainty could harm our
operations.
The recent global economic and financial market events have caused, among other things, a
general tightening in credit markets, lower levels of liquidity, increases in default and bankruptcy
rates, and a level of uncertainty in the used equipment marketplace, all of which may have
a negative impact on our operations, financial condition and liquidity and ability to grow our
business. Our operations and access to our cash balances in the future are dependent upon
the economic viability of our key suppliers and the various financial institutions we utilize.
Our future operations may be disrupted if we cannot obtain products and services necessary
for our auction operations from our key suppliers, or if we lose access to our cash balances. In
addition, our future auction revenues may decrease if our consignors choose not to sell their
assets as a result of economic conditions, or if our buyers are unable to obtain financing for
assets purchases, or if our customers are in financial distress. In addition, our lenders may be
unable to advance funds to us under existing credit facilities, which could harm our liquidity
and ability to operate or grow our business. Our customers may decide to delay the sale of
excess assets due to the uncertainty in the used equipment marketplace and the reduction
in prices which could limit the growth in our gross auction proceeds. The timing and nature of
any recovery in credit and financial markets remain uncertain, and there can be no assurance
that market conditions will improve in the near future and that our results of operations will
not be adversely affected.

Competition in our core markets could result in reductions in our future revenues and
profitability.
The used truck and equipment sectors of the global industrial equipment market, and
the auction segment of those markets, are highly fragmented. We compete directly for
potential purchasers of industrial equipment with other auction companies. Our indirect
competitors include equipment manufacturers, other third party methods, and equipment
rental companies. When sourcing equipment to sell at our auctions, we compete with other
auction companies, other third party methods, and equipment owners that have traditionally
disposed of equipment in private sales.

Our direct competitors are primarily regional auction companies. Some of our indirect competitors
have significantly greater financial and marketing resources and name recognition than we do.
New competitors with greater financial and other resources may enter the industrial equipment
auction market in the future. Additionally, existing or future competitors may succeed in entering
and establishing successful operations in new geographic markets prior to our entry into those
markets. They may also compete against us through internet-based services. If existing or
future competitors seek to gain or retain market share by reducing commission rates, we may
also be required to reduce commission rates, which may reduce our revenue and harm our
operating results and financial condition, or we may lose market share.

Our substantial international operations expose us to foreign exchange rate fluctuations
and political and economic instability that could harm our results of operations.
We conduct business in many countries around the world and intend to continue to expand our
presence in international markets, including emerging markets. Fluctuating currency exchange
rates, acts of terrorism or war, and changing social, economic and political conditions and
regulations, including income tax and accounting regulations, and political interference, may
negatively affect our business in international markets and our related results of operations.
Currency exchange rate fluctuations between the different countries in which we conduct
our operations impact the purchasing power of buyers, the motivation of consignors, asset
values and asset flows between various countries, including those in which we do not have
operations. These factors and other global economic conditions may harm our business and
our operating results.

Although we report our financial results in U.S. dollars, a significant portion of our auction
revenues is generated at auctions held outside the United States, mostly in currencies other
than the U.S. dollar. Currency exchange rate changes against the U.S. dollar, particularly for
the Canadian dollar and the Euro, could affect the presentation of our results in our financial
statements and cause our earnings to fluctuate.

Our business could be harmed if we lost the services of one or more key personnel.
The growth and performance of our business depends to a significant extent on the efforts
and abilities of our executive officers and senior managers. Our business could be harmed
if we lost the services of any of these individuals. We do not maintain key man insurance on
the lives of any of our executive officers. Our future success largely depends on our ability
to attract, develop and retain skilled employees in all areas of our business, and to plan
effectively for succession.

Our internet-related initiatives are subject to technological obsolescence and potential
service interruptions and may not contribute to improved operating results over the
long-term; in addition, we may not be able to compete with technologies implemented
by our competitors.
We have invested significant resources in the development of our internet platform, including
our online bidding service. We use and rely on intellectual property owned by third parties,
which we license for use in providing our online bidding service. Our internet technologies
may not result in any material long-term improvement in our results of operations or financial
condition and may require further significant investment to avoid obsolescence. We may also
not be able to continue to adapt our business to internet commerce and we may not be able to
compete effectively against internet auction services offered by our competitors.

The success of our online bidding service and other services that we offer over the internet,
including equipment-searching capabilities and historical price information, will continue to
depend largely on the performance and reliability of the hardware and software we utilize, our
ability to use suitable intellectual property licensed from third parties, further development
and maintenance of our information technology infrastructure and the internet in general. Our
ability to offer online services depends on the performance of the internet, as well as some of
our internal hardware and software systems.

“Viruses”, “worms” and other similar programs, which have in the past caused periodic
outages and other internet access delays, may in the future interfere with the performance
of the internet and some of our internal systems. These outages and delays could reduce
the level of service we are able to offer over the internet. We could lose customers and our
reputation could be harmed if we were unable to provide services over the internet at an
acceptable level of performance or reliability.

Our business is subject to risks relating to our ability to safeguard the security and
privacy of our customers’ confidential information.
We maintain proprietary databases containing confidential personal information about our
customers and the results of our auctions, and we must safeguard the security and privacy of
this information. Despite our efforts to protect this information, we face the risk of inadvertent
disclosure of this sensitive information or an intentional breach of our security measures.

Security breaches could damage our reputation and expose us to a risk of loss or litigation
and possible liability. We may be required to make significant expenditures to protect against
security breaches or to alleviate problems caused by any breaches. Our insurance policies
may not be adequate to reimburse us for losses caused by security breaches.

The availability and performance of our internal technology infrastructure, as well as the
implementation of an enterprise resource planning system, are critical to our business.
The satisfactory performance, reliability and availability of our website, enterprise resource
planning system, processing systems and network infrastructure are important to our reputation
and our business. We will need to continue to expand and upgrade our technology, transaction
processing systems and network infrastructure both to meet increased usage of our online
bidding service and other services offered on our website and to implement new features
and functions. Our business and results of operations could be harmed if we were unable to
expand and upgrade in a timely manner our systems and infrastructure to accommodate any
increases in the use of our internet services, or if we were to lose access to or the functionality
of our internet systems for any reason.

We use both internally developed and licensed systems for transaction processing and
accounting, including billings and collections processing. We have recently improved these
systems to accommodate growth in our business. If we are unsuccessful in continuing to upgrade
our technology, transaction processing systems or network infrastructure to accommodate
increased transaction volumes, it could harm our operations and interfere with our ability
to expand our business.

We may incur losses if we are required to make payments to buyers and lienholders
because we are unable to deliver clear title on the assets sold at our auctions.
In jurisdictions where title registries are commercially available, we guarantee to our buyers
that each item purchased at our auctions is free of liens and other encumbrances, up to the

2009 annual report | ritchie bros. auctioneers

purchase price paid at our auction. If we are unable to deliver clear title, we provide the buyer
with a full refund of the purchase price. While we exercise considerable effort to ensure that all
liens have been identified and, if necessary, discharged prior to the auction, we occasionally
do not properly identify or discharge liens and have had to make payments to the relevant
lienholders or purchasers. We will incur a loss if we are unable to recover sufficient funds
from the consignors to offset these payments, and aggregate losses from these payments
could be material.

We may incur losses as a result of legal and other claims.
We are subject to legal and other claims that arise in the ordinary course of our business. While
the results of these claims have not historically had a material effect on our business, financial
condition or results of operations, we may not be able to defend ourselves adequately against
these claims in the future and we may incur losses. Aggregate losses from and the legal fees
associated with these claims could be material.

We do not currently have a fully-implemented business continuity plan, which exposes
our business to risks.
We depend on our information and other systems and processes for the continuity and effective
operation of our business. We have recently implemented a formal business continuity plan
covering most significant aspects of our business that would take effect in the event of a
significant interruption to our business, or the loss of key systems as a result of a natural or other
disaster. Although we have tested our business continuity plan as part of the implementation,
there can be no assurance that it will operate effectively or that our business, results of
operations and financial condition will not be materially affected in the event of a significant
interruption of our business.

We are in the process of implementing a formal disaster recovery plan, including a data
center co-location that went into effect in 2009. However, our disaster recovery plan is not
yet complete. If we were subject to a disaster or serious security breach, it could materially
damage our business, results of operations and financial condition.

Our insurance may be insufficient to cover losses that may occur as a result of our operations.
We maintain property and general liability insurance. This insurance may not remain available
to us at commercially reasonable rates, and the amount of our coverage may not be adequate
to cover all liability that we may incur. Our auctions generally involve the operation of large
equipment close to a large number of people, and despite our focus on safe work practices, an
accident could damage our facilities or injure auction attendees. Any major accident could harm
our reputation and our business. In addition, if we were held liable for amounts exceeding the
limits of our insurance coverage or for claims outside the scope of our coverage, the resulting
costs could harm our results of operations and financial condition.

Certain global conditions may affect our ability to conduct successful auctions.
Like most businesses with global operations, we are subject to the risk of certain global
conditions, such as pandemics or other disease outbreaks, that could hinder our ability to
conduct our scheduled auctions, or restrict our customers’ travel patterns or their desire to
attend auctions. If this situation were to occur, we may not be able to generate sufficient
equipment consignments to sustain our business or to attract enough bidders to our auctions
to achieve world fair market values for the items we sell. This could harm our results of
operations and financial condition.

Our operating results are subject to quarterly variations.
Historically, our revenues and operating results have fluctuated from quarter to quarter. We expect
to continue to experience these fluctuations as a result of the following factors, among others:

the size, timing and frequency of our auctions;

the seasonal nature of the auction business in general, with peak activity typically
occurring in the second and fourth calendar quarters, mainly as a result of the seasonal
nature of the construction and natural resources industries;

the performance of our underwritten business (guarantee and outright purchase contracts);

general economic conditions in our markets; and

the timing of acquisitions and development of auction facilities and related costs.

In addition, we usually incur substantial costs when entering new markets, and the profitability
of operations at new locations is uncertain as a result of the increased variability in the number
and size of auctions at new sites. These and other factors may cause our future results to fall
short of investor expectations or not to compare favourably to our past results.

We may not continue to pay regular cash dividends.
We declared and paid total quarterly cash dividends of $0.38 per outstanding common share
in 2009. Any decision to declare and pay dividends in the future will be made at the discretion
of our Board of Directors, after taking into account our operating results, financial condition,
cash requirements, financing agreement restrictions and other factors our Board may deem
relevant. We may be unable or may elect not to continue to declare and pay dividends, even
if necessary financial conditions are met and sufficient cash is available for distribution.

The impact of the adoption of International Financial Reporting Standards IFRS in 2011
is uncertain.
We, as a publicly accountable Canadian enterprise, are required by the Canadian Accounting
Standards Board to adopt IFRS beginning January 2011. We have not yet determined the full
impact of the adoption of IFRS on our consolidated financial statements.

2009 annual report | ritchie bros. auctioneers

Auditors’ Report

To the Shareholders of Ritchie Bros. Auctioneers Incorporated

We have audited the consolidated balance sheets of Ritchie Bros. Auctioneers Incorporated
(the “Company”) as at December 31, 2009 and 2008 and the consolidated statements of
operations, shareholders’ equity, comprehensive income and cash flows for each of the
years in the three-year period ended December 31, 2009. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the Company’s internal control over financial reporting as
of December 31, 2009, based on the criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), and our report dated February 26, 2010 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.

We conducted our audits in accordance with Canadian generally accepted auditing standards
and the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects,
the financial position of the Company as at December 31, 2009 and 2008 and the results
of its operations and its cash flows for each of the years in the three-year period ended
December 31, 2009 in accordance with Canadian generally accepted accounting principles.

Chartered Accountants

Vancouver, Canada
February 26, 2010

Report of Independent Registered Public Accounting Firm

Because of its inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2009, based on the criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).

We also have conducted our audits on the consolidated financial statements in accordance with
Canadian generally accepted auditing standards. With respect to the years ended December
31, 2009 and 2008, we also have conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Our report dated February
26, 2010 expressed an unqualified opinion on those consolidated financial statements.

Chartered Accountants

Vancouver, Canada
February 26, 2010

To the Shareholders and Board of Directors of Ritchie Bros. Auctioneers Incorporated

We have audited Ritchie Bros. Auctioneers Incorporated (the “Company”)’s internal control
over financial reporting as of December 31, 2009, based on the criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). The Company’s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting included in the section entitled
Internal Controls over Financial Reporting included in Management’s Discussion and
Analysis. Our responsibility is to express an opinion the Company’s internal control over
financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

2009 annual report | ritchie bros. auctioneers

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

Years ended December 31,

Auction revenues
Direct expenses

Expenses:

Depreciation and amortization
General and administrative

Earnings from operations

Other income (expense):
Interest expense
Interest income
Foreign exchange gain (loss)
Gain on disposition of capital assets
Other

Earnings before income taxes

Income tax expense (recovery) (note 10):

Current
Future

Net earnings

Net earnings per share (note 8(e)):

Basic
Diluted

2009

377,211
49,890
327,321

31,761
168,312
200,073

127,248

(544)
2,400
(1,085)
647
2,857
4,275

2008

354,818
49,750
305,068

24,764
164,556
189,320

115,748

(859)
4,994
11,656
6,370
1,375
23,536

2007

311,906
46,481
265,425

19,417
144,816
164,233

101,192

(1,206)
7,393
2,802
243
1,471
10,703

131,523

139,284

111,895

35,230
2,841
38,071

93,452

0.89
0.88

39,101
(1,217)
37,884

101,400

0.97
0.96

33,797
2,115
35,912

75,983

0.73
0.72

Weighted average number of shares outstanding

105,141,368

104,713,375

104,266,113

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

Beverley A. Briscoe

Director

Peter J. Blake

Director and Chief Executive Officer

2009 annual report | ritchie bros. auctioneers

Consolidated Balance Sheets
(Expressed in thousands of United States dollars)

December 31,

Assets
Current assets:

Cash and cash equivalents
Accounts receivable
Inventory
Advances against auction contracts
Prepaid expenses and deposits
Other assets
Income taxes receivable
Future income tax asset (note 10)

Capital assets (note 4)
Other assets (note 5)
Goodwill
Future income tax asset (note 10)

Liabilities and Shareholders’ Equity
Current liabilities:

Auction proceeds payable
Accounts payable and accrued liabilities
Short-term debt (note 6)

Long-term debt (note 7)
Other liabilities
Future income tax liability (note 10)

Shareholders’ equity:

Share capital (note 8)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)

Commitments and contingencies (note 11)

See accompanying notes to consolidated financial statements.

Consolidated Statements of Shareholders’ Equity
(Expressed in thousands of United States dollars)

Balance, December 31, 2006
Exercise of stock options
Stock compensation tax adjustment
Stock compensation expense
Net earnings
Cash dividends paid
Foreign currency translation adjustment

Balance, December 31, 2007
Exercise of stock options
Stock compensation tax adjustment
Stock compensation expense
Net earnings
Cash dividends paid
Foreign currency translation adjustment
Reclassification to net earnings of

foreign currency translation gains

Balance, December 31, 2008
Exercise of stock options
Stock compensation tax adjustment
Stock compensation expense
Net earnings
Cash dividends paid
Foreign currency translation adjustment

Balance, December 31, 2009

Share
capital

85,910
4,313
–
–
–
–
–
90,223
4,143
–
–
–
–
–

–
94,366
5,614
–
–
–
–
–
99,980

Additional
paid-in
capital

10,459
(688)
722
1,978
–
–
–
12,471
(625)
198
2,311
–
–
–

–
14,355
(917)
600
2,108
–
–
–
16,146

See accompanying notes to consolidated financial statements.

2009 annual report | ritchie bros. auctioneers

2009

2008

$ 122,596
51,963
6,640
4,574
8,131
265
3,824
714
198,707

597,945
14,472
45,593
1,104

$ 107,275
60,375
9,711
285
12,088
752
2,674
780
193,940

453,642
1,164
40,233
509

$ 857,821

$ 689,488

74,726
88,402
5,069
168,197

130,394
1,254
13,565
313,410

99,980
16,146
411,326
16,959
544,411

62,717
84,114

–
146,831

67,411
60
10,024
224,326

94,366
14,355
357,845
(1,404)
465,162

$ 857,821

$ 689,488

Retained
earnings

$ 247,349
–
–
–
75,983
(31,286)
–
292,046
–
–
–
101,400
(35,601)
–

–
357,845
–
–
–
93,452
(39,971)
–
$ 411,326

Accumulated
other
comprehensive
income (loss)

24,919
–
–
–
–
–
15,457
40,376
–
–
–
–
–
(26,896)

(14,884)
(1,404)
–
–
–
–
–
18,363
16,959

Total
shareholders’
equity

$ 368,637
3,625
722
1,978
75,983
(31,286)
15,457
435,116
3,518
198
2,311
101,400
(35,601)
(26,896)

(14,884)
465,162
4,697
600
2,108
93,452
(39,971)
18,363
$ 544,411

Consolidated Statements of Comprehensive Income
(Expressed in thousands of United States dollars)

Years ended December 31,

2009

2008

2007

Net earnings
Other comprehensive income (loss):

Foreign currency translation adjustment

Reclassification to net earnings of

foreign currency translation gains

Comprehensive income

See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows
(Expressed in thousands of United States dollars)

Years ended December 31,

Cash provided by (used in):

Operating activities:
Net earnings
Items not involving cash:

Depreciation and amortization
Stock compensation expense
Future income taxes (recoveries)
Foreign exchange loss (gain)
Net gain on disposition of capital assets

Changes in non-cash working capital:

Accounts receivable
Inventory
Advances against auction contracts
Prepaid expenses and deposits
Income taxes receivable
Income taxes payable
Auction proceeds payable
Accounts payable and accrued liabilities
Other

Investing activities:

Acquisition of business
Capital asset additions
Proceeds on disposition of capital assets
Decrease (increase) in other assets

Financing activities:

Issuance of share capital
Dividends on common shares
Issuance of short-term debt
Repayment of short-term debt
Issuance of long-term debt
Repayment of long-term debt
Other

Effect of changes in foreign currency rates on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

Supplemental information:

Interest paid
Income taxes paid

See accompanying notes to consolidated financial statements.

93,452

$ 101,400

75,983

18,363

–

$ 111,815

(26,896)

(14,884)

59,620

15,457

–

91,440

2009

2008

2007

93,452

$ 101,400

75,983

31,761
2,108
2,841
1,085
(647)

15,646
3,856
(3,688)
1,026
(810)
–
(7,966)
(112)
(97)
138,455

(3,803)
(157,416)
4,201
(7,638)
(164,656)

4,697
(39,971)
6,241
(1,058)
66,408
(14,999)
1,596
22,914

18,608

15,321

107,275

$ 122,596

5,593
35,569

24,764
2,311
(1,217)
(11,656)
(6,370)

(6,770)
(4,758)
100
(6,987)
3,420
–
8,355
(9,704)
(2,200)
90,688

–
(145,024)
33,813
1,000
(110,211)

3,518
(35,601)
37,077
(36,459)
25,566
(238)
(57)
(6,194)

(17,323)

(43,040)

150,315

$ 107,275

3,476
34,629

19,417
1,978
2,115
(2,802)
(243)

(22,198)
244
847
153
1,717
(3,880)
3,138
26,922
(2,122)
101,269

(597)
(113,219)
8,455
(364)
(105,725)

3,625
(31,286)
33,415
(33,908)
–
(251)
640
(27,765)

10,515

(21,706)

172,021

$ 150,315

3,078
36,089

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

1. Significant accounting policies:
(a) Basis of presentation:

These consolidated financial statements present the financial position, results of operations, comprehensive income, changes in shareholders’ equity and cash flows of
Ritchie Bros. Auctioneers Incorporated (the “Company”), a company amalgamated in December 1997 under the Canada Business Corporations Act, and its subsidiaries. All
significant intercompany balances and transactions have been eliminated.

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”). As
disclosed in note 14, Canadian GAAP differs in certain material respects from accounting principles generally accepted in the United States.

(b) Cash and cash equivalents:

Cash equivalents consist of highly liquid investments having an original term to maturity of three months or less when acquired.

(c)

Inventory:
Inventory is primarily represented by goods held for auction and has been valued at the lower of cost, determined by the specific identification method, and net realizable
value.

(d) Capital assets:

All capital assets are stated at cost and include capitalized interest on assets under development. Depreciation is provided to charge the cost of the assets to operations
over their estimated useful lives based on their usage as follows:

Asset

Basis

Improvements
Buildings
Yard equipment
Computer software
Automotive equipment
Office equipment
Computer equipment
Leasehold improvements

declining balance
straight-line
declining balance
straight-line
declining balance
declining balance
straight-line
straight-line

Rate/term

10%
30 years
20—30%
3—5 years
30%
20%
3 years
Terms of leases

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such
situations, long-lived assets are considered impaired when undiscounted estimated future cash flows resulting from the use of the asset and its eventual disposition are
less than the asset’s carrying amount.

Legal obligations to retire tangible long-lived assets and assets under operating leases are recorded at the fair value in the period in which they are incurred, if a reasonable
estimate of fair value can be made, with a corresponding increase in asset value. The liability is accreted to face value over the life of the asset. The Company does not have
any significant asset retirement obligations.

(e) Goodwill:

Goodwill represents non-identifiable intangible assets acquired on business combinations. Goodwill is not amortized and is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test compares the carrying amount of the goodwill against its
implied fair value. To the extent that the carrying amount of goodwill exceeds its fair value, an impairment loss is charged against earnings.

(f) Revenue recognition:

Auction revenues are comprised mostly of auction commissions, which are earned by the Company acting as an agent for consignors of equipment and other assets, but
also include net profits on the sale of inventory, internet and proxy purchase fees, administrative and documentation fees on the sale of certain lots, and auction advertising
fees. All revenue is recognized when the auction sale is complete and the Company has determined that the auction proceeds are collectible.

Auction commissions represent the percentage earned by the Company on the gross proceeds from equipment and other assets sold at auction. The majority of auction
commissions is earned as a pre-negotiated fixed rate of the gross selling price. Other commissions are earned when the Company guarantees a certain level of proceeds
to a consignor. This type of commission typically includes a pre-negotiated percentage of the guaranteed gross proceeds plus a percentage of proceeds in excess of the
guaranteed amount. If actual auction proceeds are less than the guaranteed amount, commission is reduced; if proceeds are sufficiently lower, the Company can incur a loss
on the sale. Losses, if any, resulting from guarantee contracts are recorded in the period in which the relevant auction is completed. If a loss relating to a guarantee contract
to be sold after a period end is known at the financial statement reporting date, the loss is accrued in the financial statements for that period. The Company’s exposure from
these guarantee contracts fluctuates over time (see note 11(b)).

Auction revenues also include net profit on the sale of inventory items. In some cases, incidental to its regular commission business, the Company temporarily acquires title
to items for a short time prior to a particular auction sale. The auction revenue recorded is the net gain or loss on the sale of the items.

(g)

Income taxes:
Income taxes are accounted for using the asset and liability method, whereby future taxes are recognized for the tax consequences of temporary differences by applying
substantively enacted or enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing
assets and liabilities. The effect on future taxes of a change in tax rates is recognized in earnings in the period in which the new tax rate is substantively enacted. Future tax
benefits, such as non-capital loss carry forwards, are recognized to the extent that realization of such benefits is considered more likely than not.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

1. Significant accounting policies (continued):

(h) Foreign currency translation:

The Company’s reporting currency is the United States dollar. The functional currency for each of the Company’s operations is usually the currency of the country of residency;
in some cases it is the United States dollar. Each of the Company’s foreign operations is considered to be self-sustaining. Accordingly, the financial statements of the
Company’s operations that are not denominated in United States dollars have been translated into United States dollars using the exchange rate at the end of each reporting
period for asset and liability amounts and the average exchange rate for each reporting period for amounts included in the determination of earnings. Any gains or losses from
the translation of asset and liability amounts have been included in accumulated other comprehensive income, which is included as a separate component of shareholders’
equity. Monetary assets and liabilities recorded in foreign currencies are translated into the appropriate functional currency at the rate of exchange in effect at the balance
sheet date. Foreign currency denominated transactions are translated into the appropriate functional currency at the exchange rate in effect on the date of the transaction.

(i) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Significant financial statement items requiring the use of estimates include the determination of useful lives for depreciation,
the valuation of goodwill and capital assets, the valuation of consignors’ equipment and other assets subject to guarantee contracts, and the estimation of the utilization
of future income tax asset balances. Actual results could differ from such estimates and assumptions.

(j)

Financial instruments:
The Company classifies its cash and cash equivalents as held-for-trading, which is measured at fair value with changes in fair value being recognized in net earnings. Accounts
receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities, auction proceeds payable, and long-term
debt are classified as other financial liabilities, which are measured at amortized cost.

Transaction costs are offset against the outstanding principal of the related debts and are amortized using the effective interest rate method.

All derivative instruments, including embedded derivatives, are recorded in the financial statements at fair value unless exempted from derivative treatment as a normal
purchase and sale. All changes in their fair value are recorded in income unless cash flow hedge accounting is applied, in which case changes in fair value are recorded in
other comprehensive income.

(k) Net earnings per share:

Net earnings per share has been calculated based on the weighted average number of common shares outstanding. Diluted net earnings per share has been calculated
after giving effect to outstanding dilutive options calculated by the treasury stock method (note 8(e)).

(l) Stock-based compensation:

The Company has a stock-based compensation plan, which is described in note 8(c) and (d). The Company uses the fair value based method to account for employee stock-
based compensation. Under the fair value based method, compensation cost attributable to options granted to employees is measured at the fair value of the underlying
option at the grant date using the Black-Scholes option pricing model. Compensation expense is recognized on a straight-line basis over the vesting period of the underlying
option. Any consideration paid by employees on exercise of stock options or purchase of stock is credited to share capital.

(m) Comparative figures:

Certain comparative figures have been reclassified to conform with the presentation adopted in the current year.

2. Changes in accounting policies:

On January 1, 2009, the Company adopted the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3064 Goodwill and Intangible Assets, the revisions to Section
3855 Financial Instruments – Recognition and Measurement and Section 3862 Financial Instrument – Disclosures and the Emerging Issues Committee (EIC) Abstract 173 Credit risk
and the Fair Value of Financial Assets and Financial Liabilities. Section 3064 establishes new standards for the recognition and measurement of intangible assets, but accounting
for goodwill is unchanged. Revisions to Sections 3855 and 3862 were to enhance the disclosure requirements for publicly accountable enterprises. The adoption of Section 3064
and EIC 173 did not have an impact the Company’s presentation of consolidated financial statements.

Future changes in accounting policies:
In February 2008, the Canadian Accounting Standards Board confirmed that International Financial Reporting Standards (“IFRS”) will replace Canadian GAAP in 2011 for all publicly
accountable Canadian enterprises. The Company will be required to report its financial results in accordance with IFRS effective January 1, 2011.

In January 2009, the CICA issued Handbook Section 1582 Business Combinations, 1601 Consolidated Financial Statements and 1602 Non-controlling Interests, which replace
Sections 1581 Business Combinations and 1600 Consolidated Financial Statements. These new standards are harmonized with IFRS. These new standards will become effective in
2011; early adoption is permitted.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

4. Capital assets:

2009

Land and improvements
Buildings
Land and buildings under development
Yard equipment
Computer software and equipment under development
Computer software
Automotive equipment
Office equipment
Computer equipment
Leasehold improvements

2008

Cost

$ 294,134
232,160
57,367
28,945
14,084
29,477
20,124
17,275
14,707
4,396
$ 712,669

Cost

$ 173,901
163,044
112,807
21,831
7,873
19,089
17,811
11,138
9,881
3,436
$ 540,811

Accumulated
depreciation

19,684
40,882
–
13,533
–
15,749
8,223
6,998
7,104
2,551
$ 114,724

Accumulated
depreciation

13,649
35,153
–
10,424
–
8,000
6,868
5,519
5,418
2,138
87,169

Net book
value

$ 274,450
191,278
57,367
15,412
14,084
13,728
11,901
10,277
7,603
1,845
$ 597,945

Net book
value

$ 160,252
127,891
112,807
11,407
7,873
11,089
10,943
5,619
4,463
1,298
$ 453,642

During the year, interest of $5,092,000 (2008 – $2,431,000; 2007 – $1,651,000) was capitalized to the cost of assets under development.

5. Other non-current assets:

Note receivable
Assets held for sale
Long-term prepaids
Other receivables

December 31, 2009

December 31, 2008

5,131
3,675
2,946
2,720
14,472

–
1,031
133
–
1,164

The note receivable is secured by a property the Company is leasing and a neighbouring property. The note is repayable in monthly installments of principal plus interest, with
final payment due in 2013.

6. Short-term debt:

Short-term debt at December 31, 2009 consisted of draws on the Company’s revolving credit facilities with a weighted average interest rate of 1.472% per annum.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

7. Long-term debt:

Term loan, denominated in Canadian dollars, unsecured, bearing interest at 6.385%,

due in quarterly installments of interest only, with full amount of the principal due in 2016.

56,889

–

Term loan, unsecured, bearing interest at 5.610%, due in quarterly installments of interest only,

with the full amount of the principal due in 2011.

29,966

29,933

2009

2008

Revolving loan, denominated in Canadian dollars, unsecured, bearing interest at Canadian bankers’

acceptance rate plus a margin between 0.65% and 1.00%, due in monthly installments of interest only.
The revolving credit facility is available until January 2014. As at December 31, 2009,
the effective rate of interest on this loan, including the margin, was 1.096%.

Term loan, denominated in Canadian dollars, secured by a general security agreement, bearing interest at 4.429%,

due in monthly installments of interest only, with the full amount of the principal due in 2010,
which the Company intends to refinance on a long-term basis by drawing on its available credit facilities.

As at December 31, 2009, principal repayments for the remaining period to the contractual maturity dates are as follows:

2010
2011
2012
2013
2014
2015
2016

29,282

25,220

14,257
$ 130,394

12,258
67,411

14,268
30,000
–
–
29,487
–
57,072

$ 130,827

The following credit facilities are available to the Company:

Committed revolving credit facilities:

Total unused
Expires January 2014
Uncommitted credit facilities:

Total unused
Expires November 2011

8. Share capital:

(a) Authorized:

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

(b)

Issued:
No preferred shares have been issued.
Common shares issued and outstanding are as follows:

Issued and outstanding, December 31, 2006

Issued for cash, pursuant to stock options exercised

Issued and outstanding, December 31, 2007

Issued for cash, pursuant to stock options exercised

Issued and outstanding, December 31, 2008

Issued for cash, pursuant to stock options exercised

Issued and outstanding, December 31, 2009

December 31, 2009

December 31, 2008

$ 180,513
165,513

$ 280,426
192,928

$ 189,524
169,524

$ 322,792
250,000

104,019,300
419,250

104,438,550
449,170

104,887,720
490,900

105,378,620

The Company’s common shares were subdivided on a three-for-one basis effective April 24, 2008. Shareholders of record at the close of business on April 24, 2008 received
two additional common shares for each common share held at that date. The stock split effectively tripled the number of common shares and stock options outstanding on
that date. All share, stock option and per share information in these consolidated financial statements have been restated to reflect the stock split on a retroactive basis.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

8. Share capital: (continued):
(c) Stock option plan:

The Company has a stock option plan that provides for the award of stock options to selected employees, directors and officers of the Company and to other persons approved
by the Board of Directors. Stock options are granted at the fair market value of the Company’s common shares at the grant date, with various vesting periods and a term not
exceeding 10 years. In 2007, the Company’s stock option plan was amended and restated, and an additional 5,059,404 common shares were authorized for stock option
grants. At December 31, 2009, there were 5,950,193 (2008 – 6,890,046; 2007 – 7,338,456) shares authorized and available for grants of options under the stock option plan.

Stock option activity for 2009, 2008 and 2007 is presented below:

Common shares
under option

Weighted average
exercise price

Outstanding, December 31, 2006

Granted
Exercised
Cancelled
Outstanding, December 31, 2007

Granted
Exercised
Cancelled
Outstanding, December 31, 2008

Granted
Exercised
Cancelled
Outstanding, December 31, 2009

Exercisable, December 31, 2009

2,413,044

489,300
(419,250)
(8,700)
2,474,394

460,710
(449,170)
(12,300)
2,473,634

942,053
(490,900)
(2,200)
2,922,587

1,968,634

9.31

18.67
8.65
18.67
11.24

24.35
7.83
24.39
14.23

14.61
9.57
24.39
$ 15.13

$ 15.37

The options outstanding at December 31, 2009 expire on dates ranging to September 9, 2019.

The following is a summary of stock options outstanding and exercisable at December 31, 2009:

Range of
exercise prices

Number outstanding

Options Outstanding

Weighted average
remaining life (years)

Weighted average
exercise price

Options Exercisable
Weighted average
exercise price

Number
exercisable

$ 3.89 —
$ 4.44 —
$ 8.82 —
$ 14.23 —
$ 18.67
$ 24.39 —

$ 4.35
$ 5.18
$ 10.80
$ 14.70

$ 25.76

98,800
178,724
377,200
1,392,400
422,700
452,763
2,922,587

2.0
3.0
4.6
8.1
7.2
8.2

4.28
5.15
9.76
14.55
18.67
24.41

98,800
178,724
377,200
453,000
422,700
438,210
1,968,634

4.28
5.15
9.76
14.67
18.67
24.41

(d) Stock-based compensation:

The Company uses the fair value based method to account for employee stock-based compensation awards. During 2009, the Company recognized compensation cost of
$2,108,000 (2008 – $2,311,000; 2007 – $1,978,000) in respect of options granted under its stock option plan.

For the purposes described above, the fair value of the stock option grants was estimated on the date of the grant using the Black-Scholes option pricing model with the
following assumptions:

Risk free interest rate
Dividend yield
Expected lives of options
Volatility

2009

2.5%
2.47%
5 years
31.8%

2008

2.7%
1.31%
5 years
23.0%

2007

4.5%
1.50%
5 years
21.8%

The weighted average grant date fair value of options granted during the year ended December 31, 2009 was $3.77 per option (2008 – $5.29; 2007 – $4.43). The fair value
method requires that this amount be amortized over the relevant vesting periods of the underlying options.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

8. Share capital: (continued):
(e) Net earnings per share:

Year ended December 31, 2009

Net earnings

Per share amount

Basic net earnings per share
Effect of dilutive securities:

Stock options

Diluted net earnings per share

93,452

105,141,368

–
93,452

632,438
105,773,806

0.89

(0.01)
0.88

Year ended December 31, 2008

Net earnings

Per share amount

Basic net earnings per share
Effect of dilutive securities:

Stock options

Diluted net earnings per share

$ 101,400

104,713,375

–
$ 101,400

1,060,569
105,773,944

0.97

(0.01)
0.96

Year ended December 31, 2007

Net earnings

Per share amount

Basic net earnings per share
Effect of dilutive securities:

Stock options

Diluted net earnings per share

75,983

104,266,113

–
75,983

996,183
105,262,296

0.73

(0.01)
0.72

For the year ended December 31, 2009, stock options to purchase 452,763 common shares (2008 –443,310; 2007 – nil) were outstanding but were excluded from the
calculation of diluted earnings per share as they were anti-dilutive.

9. Segmented information:

The Company’s principal business activity is the sale of consignment and self-owned equipment and other assets at auctions. This business represents a single reportable segment.

The Company determines its activities by geographic segment based on the location of its auctions. Summarized information by geographic segment is as follows:

Year ended December 31, 2009:

Auction revenues
Capital assets and goodwill
Year ended December 31, 2008:

Auction revenues
Capital assets and goodwill
Year ended December 31, 2007:

Auction revenues
Capital assets and goodwill

United States

Canada

Europe

Other

Combined

$ 202,415
298,625

$ 191,459
280,417

$ 173,983
244,528

90,148
176,906

75,683
112,799

71,271
118,493

57,714
105,360

54,635
58,167

38,771
53,405

26,934
62,647

33,041
42,492

27,881
16,230

$ 377,211
643,538

$ 354,818
493,875

$ 311,906
432,656

10. Income taxes:

Income tax expense differs from that determined by applying the United States statutory tax rates to the Company’s results of operations as follows:

Statutory federal and state tax rate in the United States

Expected income tax expense
Differences:

Earnings taxed in foreign jurisdictions
Settlement of intercompany loan
Non-deductible expenses
Foreign exchange gains and losses
Change in valuation allowance
Other

Actual income tax expense

2009

38.5%

$ 50,636

(12,958)
–
1,976
–
901
(2,484)
$ 38,071

2008

38.5%

$ 53,624

(12,846)
(3,612)
1,793
–
756
(1,831)
$ 37,884

2007

40.0%

$ 44,758

(10,199)
–
1,368
(657)
1,009
(367)
$ 35,912

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

10. Income taxes (continued):

Temporary differences that give rise to future income taxes are as follows:

Future income tax asset:
Working capital
Capital assets
Stock-based compensation
Unused tax losses
Other

Valuation allowance
Total future income tax asset
Current future income tax asset
Non-current future income tax asset

Future income tax liability:
Capital assets
Goodwill
Other
Total future income tax liability
Current future income tax liability
Non-current future income tax liability

Net future income taxes

Presented on balance sheet as:
Future income tax asset – current
Future income tax asset – non-current
Future income tax liability – non-current

2009

1,227
–
1,336
5,946
942
9,451
(2,921)
6,530
1,227
5,303

(6,684)
(8,224)
(3,369)
(18,277)
–
(18,277)

2008

793
360
1,061
3,991
1,749
7,954
(1,933)
6,021
793
5,228

(2,933)
(7,089)
(4,734)
(14,756)
–
(14,756)

(11,747)

(8,735)

$714
1,104
(13,565)
(11,747)

$780
509
(10,024)
(8,735)

As at December 31, 2009, the Company has net operating and capital loss carryforwards of approximately $25,289,000 available to reduce future taxable income, of which $6,944,000
expire through 2029, and $18,345,000 remain indefinitely. The Company has recorded a valuation allowance against $13,484,000 of these losses.

11. Commitments and contingencies:

(a) Operating leases:

The Company is party to certain operating leases relating to auction sites and offices located in Canada, the United States, the Netherlands, Spain, Germany, the United
Arab Emirates, Mexico, Panama, Japan, India, and China.

The future minimum lease payments as at December 31, 2009 are approximately as follows:

2010
2011
2012
2013
2014
Thereafter

9,952
9,579
8,546
7,670
7,423
116,681

Total rent expenses in respect of these leases for the year ended December 31, 2009 was $6,211,000 (2008 – $3,449,000; 2007 – $2,131,000).

(b) Contingencies:

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

In the normal course of its business, the Company will in certain situations guarantee to a consignor a minimum level of proceeds in connection with the sale at auction of
that consignor’s equipment. At December 31, 2009, outstanding guarantees under contract for industrial equipment to be sold prior to the end of the second quarter of 2010
totaled $13,553,000 (2008 – $5,829,000 sold prior to the end of the first quarter of 2009). The Company also had guarantees under contract totaling $8,070,000 relating to
agricultural auctions to be held prior to the end of the third quarter of 2010 (2008 – $12,094,000 to be sold prior to the end of the second quarter of 2009). All amounts are
undiscounted and do not reflect estimated proceeds from sale at auction. No liability has been recorded with respect to these guarantee contracts.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

12. Capital risk management:

The Company’s objectives when managing its capital are to maintain a financial position suitable for providing financial capacity and flexibility to meet its growth strategies, to
provide an adequate return to shareholders, and to return excess cash through the payment of dividends. The Company’s invested capital is defined as the sum of shareholders’
equity and long-term debt.

The Company executes a planning and budgeting process to determine the funds required to ensure the Company has appropriate liquidity to meets its operating and growth
objectives. The Company ensures that there are sufficient credit facilities to meet its current and future business requirements, taking into account its anticipated cash flows from
operations and its holding of cash and cash equivalents.

The Company complies with covenant criteria established by its lenders. These include tangible net worth and leverage ratio measurements. As at December 31, 2009 and 2008,
the Company is in compliance with these covenants.

The Company is not subject to any statutory capital requirements, and has not made any changes with respect to its overall capital management strategy during the year ended
December 31, 2009.

13. Financial instruments:

(a) Fair value:

Carrying amounts of certain of the Company’s financial instruments, including accounts receivable, auction proceeds payable, accounts payable and accrued liabilities,
and short-term debt approximate their fair values due to their short terms to maturity. Based on lending rates currently available to the issuer of the note receivable for
notes with similar terms, the carrying amount of its note receivable approximates fair value as at December 31, 2009. The other non-current receivables carrying values
approximate fair value. Based on borrowing rates currently available to the Company for loans with similar terms, the fair value of its long-term debt as at December 31, 2009
was approximately $138,429,000 (2008 – $69,756,000). The other non-current liability is a payable whose carrying value approximates fair value.

(b) Financial risk management:

The Company is exposed to a variety of financial risks by virtue of its activities, including foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Board of
Directors has overall responsibility for the oversight of the Company’s risk management.

Foreign exchange risk
The Company operates internationally and is exposed to currency risk, primarily relating to the Canadian and U.S. dollars, and the Euro, arising from sales, purchases
and loans that are denominated in currencies other than the respective functional currencies of the Company’s international operations. The Company also has various
investments in non-U.S. dollar self-sustaining operations. Upon translation of those operations’ net assets into U.S. dollars, the Company is exposed to foreign exchange
risk. The Company has elected not to actively manage this exposure at this time. Refer to further discussion in the section entitled Quantitative and Qualitative Disclosure
about Market Risk contained in the Company’s Management Discussion and Analysis.

For the year ended December 31, 2009, the currently quantifiable effect, with other variables unchanged, of a 1% strengthening (weakening) of the U.S. dollar against the
Canadian dollar and Euro on the Company’s financial statements is as follows:

decrease (increase) net earnings by approximately $380,000 due to the translation of the foreign operations’ statements of operations into the Company’s reporting
currency, the U.S. dollar;

decrease (increase) net earnings by approximately $180,000 due to the revaluation of significant foreign currency denominated monetary items; and

decrease (increase) other comprehensive income by approximately $1,800,000.

Interest rate risk
The Company’s interest rate risk mainly arises from the interest rate impact on the Company’s cash and cash equivalents and floating rate debt. Cash and cash equivalents
earn interest based on market interest rates. As at December 31, 2009, the Company is not exposed to significant interest rate risk on its cash and cash equivalents.

The Company’s interest rate management policy is generally to borrow at fixed rates. However, floating rate funding has been used if the terms of borrowings are favorable.
The Company will consider utilizing derivative instruments such as interest rate swaps to minimize its exposure to interest rate risk. As at December 31, 2009, approximately
22% of the Company’s borrowings are at floating rates of interest. The weighted average interest rate paid by the Company on its outstanding floating rate borrowings during
the year was 2.12%.

During 2009, the majority of the Company’s interest was capitalized as it relates to the development of various new auction sites. As a result, changes in interest rates
on these borrowings will not materially affect the Company’s net earnings or other comprehensive income until such time as these developments are put into use. For the
year ended December 31, 2009, with other variables unchanged, a 100 basis points or 1% increase or decrease in interest rates would have no significant impact on the
Company’s financial statements.

Credit risk
Credit risk is the risk of financial loss to the Company arising from the non-performance by counterparties of contractual financial obligations. The Company is not exposed
to significant credit risk on accounts receivable because it does not extend credit to buyers at its auctions, and it has a large diversified customer base. In addition, assets
purchased at the Company’s auctions are not normally released to the buyers until the Company receives payment in full. The Company’s maximum exposure to credit risk on
accounts receivable at the reporting date is the carrying value of its accounts receivable, less those receivables relating to assets that have not been released to the buyers.

The Company’s credit risk exposure on liquid financial assets, being cash and cash equivalents, is limited since it maintains its cash and cash equivalents in a range of
large financial institutions around the world.

The Company limited its credit risk on its note receivable by performing credit verification procedures prior to the issuance of the note receivable. In addition, the note
receivable is secured by a property the Company is leasing and a neighbouring property, and is monitored on an ongoing basis. To date, the counterparty has not failed to
meet its financial obligations to the Company.

2009 annual report | ritchie bros. auctioneers

Notes to Consolidated Financial Statements
(Tabular dollar amounts expressed in thousands of United States dollars, except share and per share amounts)

Years ended December 31, 2009, 2008 and 2007

13. Financial instruments (continued):

(b) Financial risk management (continued):

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages its liquidity risk by maintaining adequate
cash and cash equivalent balances, generally by releasing payments to consignors only after receivables from buyers have been collected. The Company also utilizes its
established lines of credit (notes 6 and 7) for short-term borrowings on an as-needed basis. The Company continuously monitors and reviews both actual and forecast cash
flows to ensure there is sufficient working capital to satisfy its operating requirements.

14. United States generally accepted accounting principles:

The consolidated financial statements are prepared in accordance with Canadian GAAP, which differ, in certain respects, from accounting practices generally accepted in the United
States (“US GAAP”) and from requirements promulgated by the Securities and Exchange Commission.

The amounts in the consolidated statements of operations and comprehensive income that differ from those reported under Canadian GAAP are as follows:

Net earnings under Canadian GAAP
Cumulative translation adjustment on settlement

of intercompany loans(a)

2009

2008

2007

93,452

$ 101,400

75,983

–

(14,884)

–

Net earnings under US GAAP

93,452

86,516

Other comprehensive income (loss) under Canadian GAAP

Cumulative translation adjustment(a)

Other comprehensive income (loss) under US GAAP

18,363
–
18,363

(41,780)
14,884
(26,896)

75,983

15,457
–
15,457

Comprehensive income under US GAAP

$ 111,815

59,620

91,440

Net earnings per share in accordance with US GAAP:

Basic
Diluted

$
$

0.89
0.88

$
$

0.83
0.82

$
$

0.73
0.72

The amounts in the consolidated balance sheets that differ from those reported under Canadian GAAP are as follows:

2009
US GAAP
Canadian GAAP

2008
US GAAP
Canadian GAAP

Capital assets(b)
Accounts payable and accrued liabilities(b)

$ 597,945
88,402

$ 453,642
84,114

$ 474,720
105,192

Retained earnings(a)

411,326

396,442

357,845

342,961

Accumulated other comprehensive income (loss)(a)

16,959

31,843

(1,404)

13,480

(a)

(b)

The Company had a number of outstanding intercompany loan balances where settlement was not planned or anticipated in the foreseeable future, which were considered
part of net investments in foreign operations. As such, foreign exchange gains or losses arising from these intercompany loans were reported in the cumulative translation
adjustment account. In 2008, a number of the intercompany loans were settled or planned to be settled, which resulted in the reclassification to net earnings of foreign currency
translation gains of $14,884,000, net of tax of $139,000. Under US GAAP, the reclassification of the pro rata portion of foreign exchange gains or losses in accumulated other
comprehensive income to net earnings only occurs when the reduction in the net investment is the result of a complete sale, or complete or substantially complete liquidation,
which has not occurred in this case.

During 2008, the Company sold its new headquarters building under construction with the intention of leasing the property from the purchaser upon construction completion.
Under US GAAP, the Company recorded an asset under construction as prescribed by the Financial Accounting Standards Codification (ASC) 840, Leases, as the Company was
deemed the owner of the construction project during the construction period. Reimbursements from the lessor to the Company during the construction period were recorded
as accounts payable and accrued liabilities, as construction was expected to be completed within one year. During 2009, construction was completed and a sale-leaseback
transaction occurred under US GAAP. The Company is now leasing the headquarters facility from the lessor. Amounts recorded under asset under construction and accounts
payable and accrued liabilities were derecognized upon completion of the sale-leaseback transaction.

2009 annual report | ritchie bros. auctioneers

(Unaudited; tabular dollar amounts expressed in thousands of United States dollars, except per share data)

Supplemental Quarterly Data

2009

1st quarter
2nd quarter
3rd quarter
4th quarter

2008

1st quarter
2nd quarter
3rd quarter
4th quarter

2007

1st quarter
2nd quarter
3rd quarter
4th quarter

2006

1st quarter
2nd quarter
3rd quarter
4th quarter

2005

1st quarter
2nd quarter
3rd quarter
4th quarter

Gross
Auction Proceeds

798,291
1,109,331
693,288
891,111
3,492,021

Gross
Auction Proceeds

781,969
1,163,546
767,718
853,927
3,567,160

Gross
Auction Proceeds

700,368
945,256
667,553
873,306
3,186,483

Gross
Auction Proceeds

571,528
830,493
580,271
738,731
2,721,023

Gross
Auction Proceeds

456,260
682,711
364,005
589,865
2,092,841

Auction
Revenues

83,675
120,459
75,934
97,143
377,211

Auction
Revenues

81,394
115,822
75,909
81,693
354,818

Auction
Revenues(1)

68,549
94,054
67,174
82,129
311,906

Auction
Revenues(1)

55,920
78,126
54,526
69,285
257,857

Auction
Revenues(1)

48,494
65,738
37,900
59,430
211,562

Net
Earnings

19,879(2)
38,847
12,892
21,834(2)
93,452(2)

Net
Earnings

16,407(3)
45,919(3)
11,934(3)
27,140(3)
101,400(3)

Net
Earnings

17,559(4)
26,555(4)
14,903(4)
16,966(4)
75,983(4)

Net
Earnings

13,198(5)
24,526(5)
9,704(5)
9,790(5)
57,218(5)

Net
Earnings

13,675(6)
21,134(6)
4,568
14,203
53,580(6)

Net Earnings Per Share
Diluted
Basic

Closing
Stock Price

$ 0.19(2)
0.37
0.12
0.21(2)
$ 0.89(2)

$ 0.19(2)
0.37
0.12
0.21(2)
$ 0.88(2)

18.59
23.45
24.54
22.43

Net Earnings Per Share(7)
Diluted
Basic

Closing
Stock Price(7)

$ 0.16(3)
0.44(3)
0.11(3)
0.26(3)
$ 0.97(3)

$ 0.16(3)
0.43(3)
0.11(3)
0.26(3)
$ 0.96(3)

27.37
27.13
23.36
21.42

Net Earnings Per Share(7)
Diluted
Basic

Closing
Stock Price(7)

$ 0.17(4)
0.25(4)
0.14(4)
0.16(4)
$ 0.73(4)

$ 0.17(4)
0.25(4)
0.14(4)
0.16(4)
$ 0.72(4)

19.51
20.87
21.70
27.57

Net Earnings Per Share(7)
Diluted
Basic

Closing
Stock Price(7)

$ 0.13(5)
0.24(5)
0.09(5)
0.09(5)
$ 0.55(5)

$ 0.13(5)
0.23(5)
0.09(5)
0.09(5)
$ 0.55(5)

16.50
17.73
17.87
17.85

Net Earnings Per Share(7)
Diluted
Basic

Closing
Stock Price(7)

$ 0.13(6)
0.21(6)
0.04
0.14
$ 0.52(6)

$ 0.13(6)
0.20(6)
0.04
0.14
$ 0.51(6)

10.53
12.85
14.66
14.08

(1) Figures have been reclassified to conform with presentation adopted in 2008.
(2) Net earnings in the first quarter of 2009 included the impact of foreign exchange on U.S. dollar
denominated bank debt held by a Canadian subsidiary, which was assigned in January 2009
to an affiliate whose functional currency is the U.S. dollar to eliminate the impact of currency
fluctuations on this debt in future periods. The foreign exchange impact of this bank debt in
the first quarter of 2009 was a $0.8 million gain ($0.7 million after tax). Excluding the impact
of this item, net earnings for the first quarter of 2009 would have been $19.2 million ($0.18
per share, basic and diluted).
Additionally, net earnings in the fourth quarter of 2009 included a gain of $1.1 million ($0.7
million after tax) recorded on the sale of excess property. Excluding the impact of this item,
net earnings for the fourth quarter of 2009 would have been $21.1 million ($0.20 per share,
basic and diluted).

(3) Net earnings in the first, second, third and fourth quarters of 2008 included the foreign
exchange impact of the U.S. dollar denominated bank debt held by a Canadian subsidiary.
The foreign exchange impact of this bank debt in the first, second, third and fourth quarters
of 2008 was a $1.0 million ($0.8 million after tax) loss, $0.2 million ($0.2 million after tax)
gain, $1.3 million ($1.1 million after tax) loss, and $3.8 million ($3.2 million after tax) loss,
respectively.
In addition, net earnings in the first, second and fourth quarters of 2008 included the
reclassification of foreign currency translation gains relating to the settlement of foreign
currency denominated intercompany loans. The foreign exchange impact of this reclassification
in the first, second and fourth quarters of 2008 was $2.1 million ($2.0 million after tax), $0.7
million ($0.5 million after tax) and $12.3 million ($11.1 million after tax), respectively.
Finally, net earnings in the second quarter of 2008 included a gain of $8.3 million ($7.3
million after tax) recorded on the sale of excess property.
Excluding the impact of all items above, net earnings for the first, second, third and fourth
quarters of 2008 would have been $15.3 million ($0.15 per basic share and $0.14 per diluted
share), $37.9 million ($0.36 per share, basic and diluted), $13.0 million ($0.12 per share,
basic and diluted) and $19.2 million ($0.18 per share, basic and diluted), respectively. Net
earnings for the full year 2008 would have been $85.5 million ($0.82 per basic share and
$0.81 per diluted share).

(4) Net earnings in 2007 included the foreign exchange impact of the U.S. dollar denominated
bank debt held by a Canadian subsidiary. The foreign exchange impact of this bank debt in
the first, second, third and fourth quarters of 2007 was a gain of $0.3 million ($0.3 million
after tax), $2.4 million ($2.1 million after tax), $2.0 million ($1.7 million after tax) and less
than $0.1 million (less than $0.1 million after tax), respectively. Excluding the impact of these
items, net earnings for the first, second, third and fourth quarters of 2007 would have been
$17.3 million ($0.17 per basic share and $0.16 per diluted share), $24.5 million ($0.23 per
share, basic and diluted), $13.2 million ($0.13 per basic share and $0.12 per diluted share)
and $16.9 million ($0.16 per share, basic and diluted), respectively. Net earnings for the
full year 2007 would have been $71.9 million ($0.69 per basic share and $0.68 per diluted
share).

(5) Net earnings in 2006 included the foreign exchange impact of the U.S. dollar denominated
bank debt held by a Canadian subsidiary. The foreign exchange impact of this bank debt in
the first, second, third and fourth quarters of 2006 was a $0.1 million ($0.1 million after tax)
loss, $1.4 million ($1.2 million after tax) gain, less than $0.1 million (less than $0.1 million
after tax) loss, and $1.3 million ($1.1 million after tax) loss, respectively.
In addition, net earnings in the second and fourth quarters of 2006 included a gain of $1.8
million ($1.1 million after tax) recorded on the sale of excess property and a write-down of
$0.2 million ($0.1 million after tax) on land held for resale, respectively.
Excluding the impact of all items above, net earnings for the first, second, third and fourth
quarters of 2006 would have been $13.3 million ($0.13 per share, basic and diluted), $22.2
million ($0.21 per share, basic and diluted), $9.7 million ($0.09 per share, basic and diluted)
and $11.0 million ($0.11 per share, basic and diluted), respectively. Net earnings for the full
year 2006 would have been $56.3 million ($0.54 per share, basic and diluted).

(6) Net earnings in the first and second quarters of 2005 include gains of $5.5 million ($3.3
million after tax) and $0.9 million ($0.8 million after tax), respectively, recorded on the sale
of excess properties. Excluding the impact of these gains, net earnings for the first and second
quarters of 2005 would have been $10.4 million ($0.10 per share, basic and diluted) and
$20.4 million ($0.20 per share, basic and diluted), respectively. Net earnings for the full year
in 2005 would have been $49.5 million ($0.48 per share, basic and diluted).

(7) The Company’s common shares split on a three-for one basis on April 24, 2008. All per share
amounts in this table have been adjusted on a retroactive basis for the stock split. As well,
the closing stock prices presented in this table have been adjusted for ease of comparison.

2009 annual report | ritchie bros. auctioneers

Selected Financial and Operating Data

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

Years ended December 31,

2009

2008

2007

2006

2005

Gross auction proceeds (unaudited)

$ 3,492,021

$ 3,567,160

$ 3,186,483

$ 2,721,023

$ 2,092,841

Statement of operations data:

Auction revenues(1)
Direct expenses(1)

Depreciation and amortization
General and administrative(1)

Earnings from operations

Interest expense
Interest income(1)
Foreign exchange gain (loss)(1)(2)
Gain (loss) on disposition of capital assets(3)
Other income (loss)

Earnings before income taxes
Income taxes

Net earnings(2)(3)

Net earnings per share-diluted(4)

Balance sheet data (end of year):
Working capital (including cash)
Total assets
Long-term debt
Total shareholders’ equity

Selected operating data (unaudited):

Auction revenues as percentage of gross auction proceeds
Number of consignors at industrial auctions
Number of bidders at industrial auctions
Number of buyers at industrial auctions
Number of permanent auction sites (end of year)

377,211
(49,890)
327,321

(31,761)
(168,312)

354,818
(49,750)
305,068

(24,764)
(164,556)

311,906
(46,481)
265,425

(19,417)
(144,816)

257,857
(40,457)
217,400

(15,017)
(117,714)

127,248

115,748

101,192

84,669

(544)
2,400
(1,085)
647
2,857

131,523
(38,071)

93,452

0.88

30,510
857,821
130,394
544,411

10.80%
37,041
335,900
97,833
32

(859)
4,994
11,656
6,370
1,375

139,284
(37,884)

101,400

0.96

47,109
689,488
67,411
465,162

9.95%
36,595
277,560
84,005
30

(1,206)
7,393
2,802
243
1,471

111,895
(35,912)

75,983

0.72

58,207
672,887
44,844
435,116

9.79%
34,931
254,259
80,340
28

(1,172)
6,664
(451)
1,277
1,079

92,066
(34,848)

57,218

0.55

94,369
554,227
43,081
368,637

9.48%
32,075
241,132
73,967
26

211,562
(29,551)
182,011

(13,172)
(93,806)

75,033

(2,224)
3,587
(864)
6,565
417

82,514
(28,934)

53,580

0.51

84,108
496,396
43,322
325,183

10.11%
27,912
213,896
62,832
23

(1) Figures have been reclassified to conform with presentation adopted in 2008.
(2) Net earnings for year ended December 31, 2009 included the impact of foreign exchange on U.S. dollar denominated bank debt held by a Canadian subsidiary, which was assigned in January 2009
to an affiliate whose functional currency is the U.S. dollar to eliminate the impact of currency fluctuations on this debt in future periods. The foreign exchange impact of this bank debt in the first
quarter of 2009 was a $0.8 million gain ($0.7 million, or less than $0.01 per diluted share, after tax). The equivalent amount in 2008, 2007 and 2006 was a foreign exchange loss of $5.8 million
($5.0 million after tax, or $0.05 per diluted share), a foreign exchange gain of $4.8 million ($4.1 million after tax, or $0.04 per diluted share), and a foreign exchange loss of less than $0.1 million
(less than $0.1 million after tax, or less than $0.1 per diluted share), respectively. Net earnings for the year ended December 31, 2008 also included the reclassification of $15.0 million ($13.6
million after tax, or $0.13 per diluted share) of foreign currency translation gains relating to the settlement of foreign currency denominated intercompany loans.
The Company does not expect such foreign exchange gains or losses relating to financial transactions to recur in future periods.

(3) Net earnings for 2009, 2008, 2006 and 2005 included net gains on sales of excess properties of $1.1 million ($0.7 million after tax, or $0.01 per diluted share), $8.3 million ($7.3 million after

tax, or $0.07 per diluted share), $1.6 million ($1.0 million after tax, $0.01 per diluted share) and $6.4 million ($4.1 million after tax, or $0.03 per diluted share), respectively.

(4) Share and per share amounts have been adjusted on a retroactive basis to reflect the three-for-one stock split that occurred on April 24, 2008.

2009 annual report | ritchie bros. auctioneers

Shareholder Information

Address

Ritchie Bros. Auctioneers Incorporated
9500 Glenlyon Parkway
Burnaby, BC
Canada, V5J 0C6
Telephone:
Canada (toll-free):
USA (toll-free):
Facsimile:
Web site:

778.331.5500
1.800.663.1739
1.800.663.8457
778.331.5501
www.rbauction.com

Board of Directors

Robert W. Murdoch
Peter J. Blake
Beverley A. Briscoe
Eric Patel
Edward B. Pitoniak
Christopher Zimmerman
James M. Micali

Chairman
Director & Chief Executive Officer
Director
Director
Director
Director
Director

Shareholders wishing to speak to the Chairman should call 778.331.5500
or send an email to leaddirector@rbauction.com.

Investor Relations

Securities analysts, portfolio managers, investors and representatives of financial
institutions seeking financial and operating information may contact:

Investor Relations Department
Ritchie Bros. Auctioneers
9500 Glenlyon Parkway
Burnaby, BC
Canada, V5J 0C6
Telephone:
Canada (toll-free):
USA (toll-free):
Facsimile:
Email:

778.331.5500
1.800.663.1739
1.800.663.8457
778.331.4628
ir@rbauction.com

Copies of the Company’s filings with the U.S. Securities & Exchange Commission and with
Canadian securities commissions are available to shareholders and other interested
parties on request or can be accessed directly on the internet at www.rbauction.com.

Annual Meeting

The annual and special meeting of the Company’s shareholders will be held at 11am
on Thursday April 29, 2009 at the Company’s head office located at 9500 Glenlyon
Parkway, Burnaby, BC, V5J 0C6.

Management Advisory Committee

Stock Exchanges

Peter J. Blake
Richard J. Aldersley
Robert S. Armstrong
Bradley M. Bass
Jeremy M.T. Black
Robert G. Blackadar
Joseph P. Boyle
Stephen H. Branch
Brian A. Butzelaar
R. Gary Caufield
William A. Cooksley
Scott L. Forke
Brian L Glenn
Curtis C. Hinkelman
David W. Hobbs
Michael D. Johnston
Robert K. Mackay
Warwick N. Mackrell
Robert A. McLeod
David D. Nicholson
Victor E. Pospiech
Jeroen L.J. Rijk
Gary L. Seybold
J. Dean Siddle
Steven C. Simpson
Kevin R. Tink
Robert G. Thompson
Guylain Turgeon
Simon A. Wallan
Karl W. Werner
Robert K. Whitsit

Chief Executive Officer
Divisional Manager – US South West
Chief Operating Officer
Senior Valuation Analyst – Europe
VP – Business Development; Corporate Secretary
Divisional Manager – National & Major Accounts
VP – North East USA
VP – Marketing
VP – Northern Europe
Senior Director – Legal Affairs
VP – Information Technology
VP – Agriculture Division, USA
Divisional Manager – Western Canada
Senior VP – Eastern USA
VP – South Central USA
Divisional Manager – US Central West
President
VP – Australia & Asia
Chief Financial Officer
Senior VP – Central USA, Mexico & South America
Senior VP – Administration & Human Resources
VP – Southern Europe
Divisional Manager – US South East
VP – Senior Valuation Analyst
Senior VP – Western USA
Senior VP – Canada & Agriculture
Senior Director – Properties
Senior VP – Managing Director Europe, Middle East & Asia
VP – Agriculture
VP – Auction Operations
Senior VP

Ritchie Bros. Auctioneers Incorporated is listed on the New York Stock Exchange and the
Toronto Stock Exchange and on both exchanges, trades under the symbol “RBA”.

Transfer Agent

Communications concerning transfer requirements, address
changes and lost certificates should be directed to:

Computershare Trust Company of Canada
510 Burrard Street
2nd Floor
Vancouver, British Columbia
Canada, V6C 3B9
Telephone:
Canada and USA (toll-free):
Facsimile:
Facsimile (toll-free):
Email:
Self-service:

604.661.0226
1.800.564.6253
604.661.9401
1.800.249.7775
jenny.karim@computershare.com
www.computershare.com

Co-agent in the United States:
Computershare Trust Company of New York
New York, NY

Auditors

KPMG LLP
Vancouver, Canada

Dividends

All dividends paid by Ritchie Bros. Auctioneers are eligible dividends, unless indicated
otherwise in the Company’s quarterly reports or by press release.

2009 annual report | ritchie bros. auctioneers

Ritchie Bros. Auctioneers
9500 Glenlyon Parkway, Burnaby, BC, Canada V5J 0C6
Tel: 778.331.5500 Fax: 778.331.5501

rbauction.com