Sotheby's Posts Highest Fourth Quarter And Full Year Revenues In Company's History

NEW YORK CITY

:Sotheby's Holdings, Inc, the parent company of Sotheby's worldwide auction, private sales and art-related financing activities, recently announced results for the fourth quarter and full year ended December 31, 2005.

For the quarter ended December 31, 2005, the company reported auction and related revenues of $200.6 million, its highest fourth quarter total ever, and a $25.1 million, or 14 percent, increase over the prior fourth quarter, primarily due to higher auction commission revenues and private sale commissions. The company's income from continuing operations for the fourth quarter of 2005 was $51.7 million or $0.90 per diluted share compared to $36.1 million or $0.57 per diluted share for the prior period, a 43 percent or $15.6 million improvement. This growth is largely due to the improvement in auction commission revenues, partially offset by higher direct costs of services from additional single-owner sales and increased incentive bonus costs due to improved company performance.

In 2005, Sotheby's achieved its highest yearly total ever for revenues with $513.5 million. Auction and related revenues for the full year 2005 totaled $502 million, an increase of $58.9 million, or 13 percent, from the prior year largely due to a significant improvement in auction commission margins, attributable to the increase in buyer's premium rates in January 2005 and a favorable change in sales mix over the period. In 2004, a greater proportion of auction sales came from high-end works of art for which commission margins are traditionally lower due to the level of competition for such objects. Accordingly, auction commission margins increased from 16.4 percent in 2004 to 18.7 percent in 2005, a 14 percent improvement.

"2005 was our best year in 15 years and was without question, one of Sotheby's best years ever," said Bill Ruprecht, president and chief executive officer of Sotheby's Holdings, Inc. Ruprecht continued, "Sotheby's ability to attract extraordinary paintings and objects for sale last year, coupled with a strong art market, resulted in broad-based strength across a number of categories and geographic locations. Additionally, Sotheby's had the two top achievements of the auction world in 2006: the year's highest price at auction with the sale in London of Canaletto's 'Venice, the Grand Canal' - $32.5 million - and the world auction record price for Contemporary art with the sale in New York of David Smith's 'Cubi XXVIII,' $23.8 million."

Ruprecht noted that many other areas were particularly noteworthy in 2005. Auction results in the emerging markets of China and Russia saw worldwide sales up dramatically in those categories by 74 percent and 166 percent, respectively, and single owner sales were also extremely successful, among them Easton Neston in England, which brought $16 million, the Hanover collection in Germany, which brought $50 million, and the Safra collection, which brought $48.9 million. Also, Sotheby's announced the launch of a retail jewelry joint venture with the Steinmetz Diamond Group.

Ruprecht added: "2006 has begun with great promise. Our best Impressionist and Modern and Contemporary sales ever in London and the best Old Master paintings sale ever in New York contributed to a significant increase in sales for the year thus far. And looking ahead, we are fortunate to have a number of exciting future consignments, among which will be one of the major highpoints of the spring. Picasso's 'Dora Maar au Chat,' one of the most important portraits of his mistress, has not been seen on the market for 40 years and is estimated to bring in excess of $50 million.

For information, 212-606-7000 or www.sothebys.com.