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Sotheby's Reports Second Quarter and First Half 2013 Financial Results

Sotheby's Reports Second Quarter and First Half 2013 Financial Results

         oGenerates Net Income of $91.7 Million in the Second Quarter
           oBoard Declares Third Quarter Dividend of $0.10 Per Share

NEW YORK, Aug. 6, 2013 (GLOBE NEWSWIRE) -- Sotheby's (NYSE:BID) today reported
financial results for the second quarter and first half ended June 30, 2013.

Sotheby's reported second quarter total revenues of $304.8 million and first
half total revenues of $406.6 million in 2013, which essentially match both
periods in the prior year. Auction commission revenues were positively
impacted by the buyer's premium rate increase that took effect on March 15^th
and contributed an additional $19.8 million of second quarter revenue. For the
full six months of 2013, the benefit of the new rate structure was offset by
contracting sellers' margins, attributable to competitive pressures to win
high-value consignments. However, subsequent to the rate change, auction
commission margin improved from 15.3% to 15.9% in the second quarter.Total
expenses increased 2% in the second quarter and 5% in the first half of 2013,
due in part to support Sotheby's multi-year strategic initiatives to invest in
those areas which best serve the Company's clients, expand business growth,
and enhance shareholder value. These include the significant improvements to
Sotheby's digital media offerings and the development of China and other
emerging markets. Management expects that these strategic investments will
benefit Sotheby's future financial results.

Sotheby's net income for the three and six months ended June 30, 2013
benefited from a $6.8 million income tax benefit recognized in the second
quarter.There was no similar tax benefit recorded in the prior year.For the
second quarter of 2013, net income was $91.7 million, or $1.33 per diluted
share, a 7% ($6.3 million) improvement from the second quarter of 2012. For
the first half, net income was $69.4 million, or $1.00 per diluted share, a 7%
($5.4 million) shortfall from prior year.

"Our business and the market for quality art at the high end continue to be
strong," said Bill Ruprecht, Chairman, President and Chief Executive
Officer."We saw significant sales growth in Impressionist, Modern and
Contemporary Art and posted the best results in the market in the vast
majority of key sales this Spring. We continue to see fierce competition for
high-end consignments and as a result, lower auction commission margins.

"We're very pleased to see impressive participation from emerging market
clients as we continue to pursue a number of initiatives, particularly in
China and the Middle East, as well as in our digital space, that we believe
will better serve our clients and enhance the long-term value of the
franchise," Ruprecht continued.

"Sotheby's has become so much more than an auction house. Today, we are a
pioneering global art business that offers our clients expertise and
opportunities to transact through multiple channels year-round – an enhanced
digital platform that serves clients at any time, any place and on any device,
our global S|2 Contemporary galleries, retail wine and diamonds, unique
Financial Services offerings, and real estate and educational opportunities
through our partners," he added."Underpinning that transformation are the
prudent financial management steps and strategic investments we have been
making to provide unrivalled service to our clients and enhance shareholder
value, both near and longer-term."

The Company announced earlier today that its Board declared a third quarter
dividend of $0.10 per share. Other key recent financial and operational
initiatives include:

  *Sotheby's retired its 2013 Convertible Notes ($182 million) in June and,
    taking advantage of historically low interest rates, lowered the cost of
    Company debt with a $300 million, 5.25% Senior Notes issuance, last
    September. As a result, Sotheby's will now realize an annual interest
    expense savings of nearly $5 million. Going forward, a strong balance
    sheet will afford the Companythe flexibility to invest in growth
    initiatives for the future.
  *Sotheby's extended the maturity of its credit facility and amended the
    facility to increase borrowing capacity from $200 million to $300 million
    last December.The facility is currently undrawn.The credit facility was
    further amended in June 2013 to allow for an increase to $300 million of
    net outstanding guarantee exposure.This will provide enhanced flexibility
    to negotiate major deal opportunities and may provide Sotheby's with an
    opportunity to improve margins and profitability by taking prudent balance
    sheet risk.The Company will also continue to use irrevocable bids to
    reduce the risk associated with auction guarantees.
  *Sotheby's Financial Services is both a unique specialty service to clients
    and an increasingly valuable pipeline for profitable auction consignments.
    The Financial Services loan portfolio has increased by almost 30% over the
    last twelve months to a total of $430 million at June 30^th. As this
    business has grown, the Company has assessed the possibility of
    alternative financing structures, but has concluded that Sotheby's would
    be sacrificing agility to respond to opportunities as well as profit
    margins under the alternatives reviewed to-date.
  *Sotheby's continues to explore options for its New York headquarters. This
    Spring, real estate professionals were engaged to assist in assessing the
    value of the premises and evaluating available alternatives within New
    York City. While Sotheby's has no current plans to relocate its York
    Avenue operations, this is an ongoing, complex process.Management is
    currently considering a variety of options.Any transaction has to deliver
    substantial post-mortgage value, while any sale must afford Sotheby's
    funds for attractive purpose-built new space, which meets the Company's
    unique facility requirements.Any future action relative to Sotheby's
    premises will be taken only after fully assessing all financial and tax
    costs as well as operational challenges and concluding that the
    incremental value created for shareholders will be meaningful and
    lasting.Similarly, Sotheby's is planning to assess the value of its
    London New Bond Street premises in the future, using a similar approach.
  *Private sales and private selling exhibitions are an increasingly
    important part of Sotheby's business as the Company leverages experts'
    expertise and experience with a low level of associated expenses.
    Sotheby's is opening a Contemporary private sales gallery - S|2 - in
    London this autumn, joining S|2 galleries in Hong Kong and New York.
  *Sotheby's continues to invest in China and other emerging markets and
    expects those investments to greatly benefit future results as interest
    from new markets continues to grow. Two statistics offer context for these
    investments: 22% of the first-time buyers in Sotheby's worldwide 2013
    Spring sales were from Asia. Further, just five years ago, 21% of
    Sotheby's sold lots were purchased by buyers from 'new markets'; today
    that figure is 39% – nearly double.
  *Sotheby's has launched innovations on its web platform, allowing clients
    to transact at any time, from anywhere, on any device. A refreshed web
    presence with responsive design better reflects the Sotheby's of today –
    an innovative global art business encompassing auction, but also a great
    deal more – and with better reach to clients. More than 30% of all
    clients participating in Sotheby's global salesrooms in 2013 registered
    for paddles on the website.

Second and Third Quarter Sales

Sotheby's London June Impressionist and Modern Art sales brought impressive
results – a series total of $199.3 million, towards the high end of the
pre-sale estimate and a 42% increase on the prior year, and the top price of
the London summer season for Claude Monet's 1908 view of Venice, Le Palais
Contarini for $30.8 million.Exceptional estate collections drew participants
in record numbers.

The following week, also in London, we held our sales of Contemporary Art
which brought a total of $147.6 million, well within the pre-sale
estimate.Leading the sale were two works by Francis Bacon – his 1966 triptych
portrait Three Studies of Isabel Rawsthorne sold for $17.4 million and his
Head III, the first work the artist ever sold, brought $16.1
million.Fifty-four years ago, just across the road from Sotheby's at the
Hanover Gallery on St. George Street, the same work fetched £150 at Bacon's
first ever commercial show.

In addition, Sotheby's London Old Master and British Paintings sales last
month realized a total of $60.1 million.The highlight of the Old Master
Paintings evening auction was the historic sale of El Greco's Saint Dominic in
Prayer for $13.9 million, almost double the high end of the pre-sale estimate
and a new record for a Spanish Old Master work at auction.Eight auction
records were set at the evening sale.

Upcoming Sales

From September 12^th to 14^th, Sotheby's Hong Kong will be home to an S|2
selling exhibition of Andy Warhol's works, From Warhol, With Love, primarily
devoted to the artist's works on paper that act as a window into the mind of
the Pop genius.This will be followed from October 25^th to November 2^nd by
Eternal Spring - An Exhibition of Contemporary Ceramics by Caroline Cheng, a
renowned Jingdezhen-based artist noted for her Prosperity series comprising
robes made up of tiny porcelain butterflies.

From October 4^th to 8^th, Sotheby's Hong Kong will hold its Autumn Sale
series which will also mark the culmination of the celebration of Sotheby's
40^th anniversary in Asia. Leading the Autumn Sale series is the specially
curated Sotheby's Hong Kong 40^th Anniversary Evening Sale scheduled to take
place on October 5^th, which will bring together rare and fresh-to-the-market
works from important collections encompassing 20^th Century Chinese Art,
Contemporary Asian Art and Modern and Contemporary Southeast Asian Art,
including works by Zao Wouki, Sanyu, Zeng Fanzhi, Yoshitomo Nara, Walter Spies
and Chen Wen Hsi.

Sotheby's November sales of Contemporary Art in New York will include property
from the highly esteemed Dia Art Foundation which is being sold to establish
an endowment for acquisitions. Works by Cy Twombly, John Chamberlain, and
Barnett Newman will be offered in both the Evening and Day auctions and
together, the group of nearly 30 works is estimated to bring in excess of $20
million. Beginning in September, highlights will be shown in Chicago, Los
Angeles, Doha, London and Zurich before the pre-sale exhibition opens in New
York on November 9^th.

On November 21^st, RM Auctions in association with Sotheby's will hold the
first automobile auction in Manhattan for over 10 years. Around 30 cars will
be on view in our 10^th floor galleries – the first time that cars have been
exhibited in that space. Leading early highlights for the sale is the stunning
1956 Aston Martin DB 2/4 MkII 'Supersonic'. A truly unique creation, the car
was first owned by newlywed New Yorkers Gail Whitney Vanderbilt and her
husband, the record-setting water skier Richard C. Cowell. This will be one of
the most significant car auctions ever staged with an overall pre-sale
estimate in excess of $50 million.

For more than three centuries, Chatsworth House in Derbyshire has been home to
the Dukes of Devonshire, whose legendary collection of paintings and
decorative arts is one of the world's greatest. This Autumn, in Chatsworth's
galleries, Sotheby's will host Modern Makers, a selling exhibition of
Contemporary applied art brought together by curator Sarah Griffin. Taking
Chatsworth and the Devonshire Collection as a source of inspiration, some 16
leading international artists have created an outstanding selection of works
including furniture, textiles, ceramics and metalwork, which create a unique
dialogue with their historic surroundings. Highlights will include a
spectacular ash bed by Joseph Walsh, Ptolemy Mann's exquisite textile
installation and a dramatic steel chandelier by Junko Mori.

Note: Estimates do not include buyer's premium.Sale totals for auctions
discussed in this release include buyer's premium.

All Sotheby's Press Releases and SEC filings are available on our web site at
www.sothebys.com. An outline of the conference call will be available at
http://investor.shareholder.com/bid/events.cfm.

Sotheby's will host a conference call at 4:45 PM EDT on August 6, 2013, to
discuss its second quarter and first half 2013 financial results. Please dial
888-371-8897 and for callers outside the United States, Puerto Rico and
Canada, please dial 1-970-315-0479, approximately 15 minutes before the
scheduled start of the call.The call reservation number is 25030113.

The conference call will also be accessible via webcast on the Investor
Relations section of the Sotheby's web site at
http://investor.shareholder.com/bid/events.cfm.

About Sotheby's

Sotheby's has been uniting collectors with world-class works of art since
1744. Sotheby's became the first international auction house when it expanded
from London to New York (1955), the first to conduct sales in Hong Kong (1973)
and France (2001), and the first international fine art auction house in China
(2012). Today, Sotheby's presents auctions in eight different salesrooms,
including New York, London, Hong Kong and Paris, and Sotheby's BIDnow program
allows visitors to view all auctions live online and place bids from anywhere
in the world. Sotheby's offers collectors the resources of Sotheby's Financial
Services, the world's only full-service art financing company, as well as
private sale opportunities in more than 70 categories, including S|2, the
gallery arm of Sotheby's Contemporary Art department, and two retail
businesses, Sotheby's Diamonds and Sotheby's Wine. Sotheby's has a global
network of 90 offices in 40 countries and is the oldest company listed on the
New York Stock Exchange (BID).

Forward-looking Statements

This release contains certain "forward-looking statements" (as such term is
defined in the Securities and Exchange Act of 1934, as amended) relating to
future events and the financial performance of the Company.Such statements
are only predictions and involve risks and uncertainties, resulting in the
possibility that the actual events or performances will differ materially from
such predictions.Major factors, which the Company believes could cause the
actual results to differ materially from the predicted results in the
"forward-looking statements" include, but are not limited to, the overall
strength of the international economy and financial markets, political
conditions in various nations, competition with other auctioneers and art
dealers, the success of our risk reduction and margin improvement efforts, the
amount of quality property being consigned to art auction houses and the
marketability at auction of such property.Please refer to our most recently
filed Form 10-Q (and/or 10-K) for a complete list of Risk Factors.

Financial Table Follows

SOTHEBY'S
CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
(Thousands of dollars, except per share data)
                                                                
                                  Three Months Ended    Six Months Ended
                                  June 30,   June 30,   June 30,   June 30,
                                   2013       2012       2013       2012
Revenues:                                                        
Auction and related revenues       $294,943 $290,151 $389,118 $387,561
Finance revenues                   5,561      4,580      10,494     8,155
Dealer revenues                    2,122      7,394     3,205     10,072
License fee revenues               2,090     1,592     3,276     2,493
Other revenues                     152        232        520        627
Total revenues                     304,868    303,949    406,613    408,908
                                                                
Expenses:                                                        
Direct costs of services          31,260    27,308    39,709     34,699
Dealer cost of sales               3,998     6,559     4,698      9,071
Marketing expenses                 5,859     4,611     10,546     9,008
Salaries and related costs         81,265    84,876    141,960    141,102
General and administrative         44,371    39,863    88,382     78,773
expenses
Depreciation and amortization      4,801     4,334     9,317      8,554
expense
Restructuring charges, net         --        13        --        22
Total expenses                     171,554    167,564    294,612    281,229
Operating income                   133,314    136,385    112,001    127,679
                                                                
Interest income                    1,441     213       1,827      822
Interest expense                   (12,137)  (10,184)  (24,652)   (20,292)
Other (loss) income               (168)     (947)     1,531      795
                                                                
Income before taxes                122,450    125,467    90,707     109,004
Equity in (losses) earnings of     (14)      (44)      (12)       177
investees, net of taxes
Income tax expense                 30,707    39,993    21,311     34,415
                                                                
Net income                         $91,729  $85,430  $69,384  $74,766
                                                                
Basic earnings per share -         $1.34    $1.26    $1.02    $1.10
Sotheby's common shareholders
                                                                
Diluted earnings per share -       $1.33    $1.24    $1.00    $1.09
Sotheby's common shareholders
                                                                
Weighted average basic shares      68,306     67,753     68,129     67,605
outstanding
                                                                
Weighted average diluted shares    68,889     68,416     68,990     68,526
outstanding
                                                                
Cash dividends paid per common     $--      $0.08    $--      $0.16
share
                                                                

CONTACT: Press Department
         212 606 7176
         Andrew Gully
         Andrew.Gully@Sothebys.com
        
         Press Department
         +44 (0)20 7293 5168
         Matthew Weigman
         Matthew.Weigman@Sothebys.com
        
         Investor Relations
         212 894 1023
         Jennifer Park
         Jennifer.Park@Sothebys.com
 
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