Consolidated Financial Statements of RITCHIE BROS. AUCTIONEERS INCORPORATEDForbearance Agreement |
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EXHIBIT
NO. 2
Consolidated Financial Statements of
RITCHIE
BROS. AUCTIONEERS INCORPORATED
Years
ended December 31, 2004 and 2003
INDEPENDENT AUDITORS’ REPORT TO THE
SHAREHOLDERS
We have audited the consolidated balance
sheets of Ritchie Bros. Auctioneers Incorporated (the “Company”) as
at December 31, 2004 and 2003 and the consolidated statements of
operations, shareholders’ equity and cash flows for each of the years in
the three-year period ended December 31, 2004. 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 conducted our audits in accordance with
Canadian generally accepted auditing standards. 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, 2004 and 2003 and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 2004 in accordance with Canadian generally accepted
accounting principles.
/s/ KPMG LLP
Chartered Accountants
Vancouver, Canada
February 11, 2005
RITCHIE BROS. AUCTIONEERS INCORPORATED
Consolidated Statements of Operations
(Expressed in thousands of United States dollars, except share and per share
amounts)
Years ended December 31, 2004, 2003 and
2002
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2004 |
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2003 |
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2002 |
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Auction revenues |
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$ |
182,257 |
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$ |
161,542 |
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$ |
133,552 |
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Direct expenses |
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23,472 |
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22,099 |
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19,684 |
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158,785 |
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139,443 |
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113,868 |
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Expenses: |
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Depreciation and amortization |
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12,708 |
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11,773 |
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9,208 |
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General and administrative |
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85,667 |
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71,265 |
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63,786 |
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98,375 |
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83,038 |
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72,994 |
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Earnings from operations |
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60,410 |
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56,405 |
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40,874 |
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Other income (expenses): |
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Interest |
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(3,217 |
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(4,772 |
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(4,302 |
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Other |
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1,053 |
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1,060 |
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2,455 |
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(2,164 |
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(3,712 |
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(1,847 |
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Earnings before income taxes |
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58,246 |
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52,693 |
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39,027 |
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Income taxes (note 9): |
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Current |
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22,251 |
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14,738 |
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8,097 |
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Future |
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1,096 |
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1,361 |
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2,559 |
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23,347 |
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16,099 |
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10,656 |
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Net Earnings |
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$ |
34,899 |
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$ |
36,594 |
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$ |
28,371 |
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Net earnings per share (notes 1(l) and 7(e)): |
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Basic |
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$ |
1.02 |
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$ |
1.08 |
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$ |
0.84 |
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Diluted |
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1.01 |
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1.07 |
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0.84 |
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Weighted average number of shares outstanding |
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34,160,678 |
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33,795,978 |
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33,586,404 |
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Approved on behalf of the Board:
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/s/ G. Edward Moul |
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/s/ Peter J. Blake |
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G. Edward Moul |
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Peter J. Blake |
See accompanying notes to consolidated
financial statements.
-3-
RITCHIE BROS. AUCTIONEERS INCORPORATED
Consolidated Balance Sheets
(Expressed in thousands of United States dollars)
December 31, 2004 and 2003
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2004 |
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2003 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
132,632 |
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$ |
119,009 |
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Accounts receivable |
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19,281 |
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17,064 |
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Inventory |
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13,091 |
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9,580 |
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Advances against auction contracts |
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968 |
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110 |
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Funds committed for debt repayment (note 6) |
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1,857 |
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13,000 |
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Prepaid expenses and deposits |
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2,323 |
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2,553 |
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Net investment in lease (note 4) |
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654 |
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— |
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Current future income tax asset (note 9) |
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496 |
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354 |
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171,302 |
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