NEW YORK CITY – Sotheby’s Holdings, Inc., the parent company of Sotheby’s worldwide live and online auction businesses, art-related financing and real estate brokerage activities, announced on May 14 results for the first quarter ended March 31.

Net loss for the first quarter of 2002 was ($23.1) million, or ($0.38) per diluted share, compared to a net loss of ($22.5) million, or ($0.38) per diluted share, for the first quarter of 2001. Due to the seasonal nature of the art auction market, auction sales in the first quarter have historically represented approximately 9% to 13% of annual auction sales and the first quarter has historically been a loss period for the company. Consequently, first quarter results are not indicative of expected full year results.

“Operating expenses totaled $76.6 million in the first quarter of 2002, compared to $87.0 million for the same period in 2001. Excluding employee retention costs and net benefits to special charges and restructuring charges, first quarter 2002 operating expenses decreased 11% to $73.4 million from $82.5 million for the same period in 2001. We remain pleased with the progress we continue to make in controlling costs,” said William F. Ruprecht, President and Chief Executive Officer of Sotheby’s Holdings, Inc.

“Auction sales (hammer price plus buyer’s premium) for the first quarter of 2002 totaled $190.1 million, a decrease of 12% compared to the first quarter of 2001,” continued Ruprecht. “This decrease principally reflects a smaller amount of property offered in our London Impressionist and Contemporary Art sales in February and decreased sales in North America. Nevertheless, we had several successful sales in the first quarter, most notably our Americana Week sales that achieved a record $27.8 million and Important Photographs from the Jammes Collection in Paris, which totaled $10.4 million — soundly exceeding its high estimate.”

Ruprecht said, “Our first quarter was substantially better than our plan and we expect that 2002 will bring us back to profitability on the operating income line, especially as the economy recovers from last year’s downturn. Additionally, buyers are increasingly attracted to art and real estate, there is a more stable competitive environment and we expect our new pricing structure to favorably impact our financial results.”

Internet

Internet-related expenses for the first quarter of 2002 were $3.1 million, as compared to $7.8 million from the same period a year ago. The impact of the Internet related operating loss was ($0.02) per share, as compared to ($0.06) a year earlier.

“In the first three months of 2002, Sothebys.com had $8.9 million in online auction sales, compared to $11.9 million in the same period in 2001. Sothebys.com continues to hold special sales, including the recent successful sale of Seinfeld memorabilia. We anticipate that the level of Internet-related expenses will continue to decrease throughout 2002 due to the launching of our strategic alliance with eBay, Inc. this summer, and the access to eBay’s 42 million users will be positive for our Internet business,” said Ruprecht.

Second and Third Quarter Sales

“Looking to the second quarter,” continued Ruprecht, “our Impressionist & Modern art sales held last week in our New York salesroom were an outstanding success. Sotheby’s led the competition, achieving a sales total of $149.1 million. The Luella and Samuel Maslon Collection of Impressionist and Modern Art brought $34.2 million – well beyond its high estimate, with the evening sale of Impressionist & Modern Art totaling $126.0 million and only three of the 55 lots failing to sell. Among the many high points of the evening was Alberto Giacometti’s Grande tete de Diego, which sold for $13.8 million and almost doubled its presale high estimate of $7 million.”

We were also pleased with the results of our April sales. Among them was the highly successful sale of Magnificent Jewels of Janice H. Levin, which totaled $8.2 million. The Levin Collection, along with our annual various owners sale brought our New York Magnificent Jewels total to $17.5 million, making Sotheby’s the clear leader in April Jewelry sales. Other notable April sales held in New York include A Celebration of the English Country House and 19th Century European Art, which brought $8.2 million and $8.3 million respectively.”

In Hong Kong, our annual spring Important Watches sales were successful bringing a combined $5.7 million, exceeding the presale high estimate by a half million dollars. Included in these sales was an outstanding single-owner collection of Important Rolex wristwatches, which saw all but three lots sell. Another highlight from Hong Kong this spring was the sale of a recently discovered famille-rose enameled peach vase from the Qing Dynasty, that sold for $5.3 million, breaking its high estimate of $3.2 million and setting a world auction record for Qing porcelain. The vase, which was used as a lamp by its previous owner until it was discovered by a Sotheby’s expert, is one of the rarest and most beautiful Qing pieces ever to come to auction.”