SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
Commission File Number 1-9750
Sotheby's Holdings, Inc.
(Exact name of registrant as specified in its charter)
Michigan 38-2478409
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (810) 646-2400
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X .
No .
As of July 31, 1997, there were outstanding 38,657,572 shares of Class A
Limited Voting Common Stock, par value $0.10 per share, and 17,217,847
shares of Class B Common Stock, par value $0.10 per share, of the
Registrant. Each share of Class B Common Stock is freely convertible
into one share of Class A Limited Voting Common Stock.
<PAGE>
INDEX
PART I: FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements:
Consolidated Statements of Income for the Three
and Six Months Ended June 30, 1997 and 1996 3
Consolidated Balance Sheets at June 30, 1997
and December 31, 1996 4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1997 and 1996 5
Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
EXHIBIT INDEX 18
SIGNATURE 19
<PAGE>
PART 1: FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Consolidated Statements of Income
Sotheby's Holdings, Inc. and Subsidiaries
(Thousands of dollars, except per share data)
(UNAUDITED)
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Auction and related $116,095 $115,784 $160,878 $149,546
Other 14,907 8,814 24,206 15,848
Total revenues 131,002 124,598 185,084 165,394
Expenses:
Direct costs of services (21,956) (24,155) (31,944) (32,948)
Salaries and related costs (34,003) (29,547) (62,950) (54,942)
General and administrative (21,124) (20,845) (42,563) (39,082)
Depreciation and amortization (2,622) (2,246) (5,184) (4,527)
Non-recurring charges (3,000) 0 (5,500) 0
Total expenses (82,705) (76,793) (148,141) (131,499)
Operating income 48,297 47,805 36,943 33,895
Interest income 616 877 1,408 1,964
Interest expense (1,185) (653) (1,799) (1,586)
Other expense (226) (411) (170) (251)
Income before taxes 47,502 47,618 36,382 34,022
Income taxes (18,162) (19,048) (13,825) (13,609)
Net Income $29,340 $28,570 $22,557 $20,413
Earnings Per Share $0.51 $0.50 $0.40 $0.36
Weighted Average Shares Outstanding (in millions) 57.2 56.8 56.6 56.4
Dividends Per Share $0.10 $0.08 $0.20 $0.16
See accompanying Notes to the Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Consolidated Balance Sheets
Sotheby's Holdings, Inc. and Subsidiaries
(Thousands of dollars)
(UNAUDITED)
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $13,950 $66,886
Accounts and notes receivable, net of allowance
for doubtful accounts of $10,802 and $10,156
Accounts receivable 300,048 250,780
Notes receivable 104,628 81,761
Other 17,909 12,810
Total Accounts and Notes Receivable, Net 422,585 345,351
Inventory, net 17,734 14,801
Deferred income taxes 5,005 4,655
Prepaid expenses and other current assets 16,545 14,689
Total Current Assets 475,819 446,382
Notes receivable 104,344 69,418
Properties, less allowance for depreciation
and amortization of $67,310 and $63,983 69,387 70,576
Intangible assets, less allowance for
amortization of $15,990 and $15,607 29,316 27,199
Investment in partnership 35,709 35,834
Other assets 6,313 6,689
Total Assets 720,888 656,098
Liabilities And Shareholders' Equity
Current Liabilities
Due to consignors 278,888 277,751
Short-term borrowings 20,431 3,211
Accounts payable and accrued liabilities 67,782 75,023
Deferred revenue 6,404 7,166
Accrued income taxes 31,278 25,765
Total Current Liabilities 404,783 388,916
Long-Term Liabilities
Commercial Paper 45,000 0
Deferred income taxes 12,661 12,493
Other long-term obligations 1,158 1,217
Total Liabilities 463,602 402,626
Shareholders' Equity
Common Stock, $0.10 par value:
Authorized shares - 125,000,000 of Class A and 75,000,000 of Class B
Issued and outstanding shares - 38,559,573 and 38,669,411 of Class A, and
17,219,847 and 17,214,987 of Class B, at June 30, 1997 and
December 31, 1996, respectively 5,578 5,589
Additional paid-in capital 74,412 78,382
Retained earnings 190,182 178,805
Foreign currency translation adjustments (12,886) (9,304)
Total Shareholders' Equity 257,286 253,472
Total Liabilities And Shareholders' Equity $720,888 $656,098
See accompanying Notes to the Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
Sotheby's Holdings, Inc. and Subsidiaries
(Thousands of dollars)
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, 1997 1996
<S> <C> <C>
Operating Activities:
Net income $22,557 $20,413
Adjustments to reconcile net income to net cash
provided (used) in operating activities:
Depreciation and amortization 5,184 4,527
Deferred income taxes (182) 1,143
Tax benefit of stock option exercises 858 1,109
Asset provisions 2,571 2,725
Other 459 213
Changes in assets and liabilities:
Increase in accounts receivable (57,727) (74)
Increase in inventory (3,971) (24,869)
Decrease (increase) in prepaid expenses and other current assets (1,462) 2,751
Decrease in other assets 336 161
Increase (decrease) in due to consignors 1,137 (2,406)
Increase in accrued income taxes 5,513 17,350
Decrease in other liabilities (8,399) (3,657)
Net cash provided (used) by operating activities (33,126) 19,386
Investing Activities:
Increase in notes receivable (109,519) (54,393)
Collections of notes receivable 47,808 47,245
Capital expenditures (4,829) (2,867)
Decrease in investment in partnership 125 2,761
Acquisitions (1,854) 0
Net cash used by investing activities (68,269) (7,254)
Financing Activities:
Increase (decrease) in commercial paper 45,000 (13,000)
Increase in short term borrowings 16,004 2,558
Proceeds from exercise of stock options 2,320 1,954
Repurchase of common stock (7,794) (8,973)
Dividends (11,180) (8,937)
Net cash provided(used) by financing activities 44,350 (26,398)
Effect of exchange rate changes on cash 4,109 1,673
Decrease in cash and cash equivalents (52,936) (12,593)
Cash and cash equivalents at beginning of period 66,886 40,713
Cash and cash equivalents at end of period $13,950 $28,120
See accompanying Notes to the Consolidated Financial Statements
</TABLE>
<PAGE>
SOTHEBY'S HOLDINGS, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The consolidated financial statements included herein have been
prepared by Sotheby's Holdings, Inc. (together with its
subsidiaries, the "Company") pursuant to the rules and regulations
of the Securities and Exchange Commission. These consolidated
financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto
incorporated by reference in the Company's Annual Report on Form 10-
K for the year ended December 31, 1996 (the "Annual Report").
In the opinion of the management of the Company, all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of the results of operations for the three and six
month periods ended June 30, 1997 and 1996 have been included.
Certain prior period amounts have been restated to conform to the
current year's presentation.
2. Notes Receivable
As of June 30, 1997, an amount equal to approximately 39% of the
Company's notes receivable (current and non-current) was extended
to two borrowers. No other individual loans amounted to more than
5% of total assets at June 30, 1997. Although the Company's
general policy has been to make secured loans at loan to value
ratios (principal loan amount divided by the low auction estimate
of the collateral) of 50% or lower, on certain occasions the
Company will lend, on a secured basis, at loan to value ratios
higher than 50%. The loan to value ratios on the loans noted above
exceed 50%, however, neither loan has a loan to value ratio greater
than 70%. In addition, on certain occasions, the Company will lend
amounts to consignors at loan to value ratios higher than 50% where
the Company participates in a share of the sale proceeds of the
consigned property higher than the standard selling commission if
the consigned property sells for more than an agreed target amount.
Interest income on impaired loans is recognized to the extent cash
is received. Where there is doubt regarding the ultimate
collectibility of principal for impaired loans, cash receipts,
whether designated as principal or interest, are thereafter applied
to reduce the recorded investment in the loan. Following are the
changes in the allowance for credit losses relating to both current
and non-current notes receivable for the six months ended June 30,
1997 and 1996 (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Allowance for credit losses
at December 31, 1996 and 1995 $2,501 $3,052
Provisions 1,126 311
Write-offs (3) (374)
Other 108 (7)
Allowance for credit losses
at June 30, 1997 and 1996 $3,732 $2,982
</TABLE>
3. Credit Arrangements
At June 30, 1997, pursuant to the Company's $200 million U.S.
commercial paper program, there were $45.0 million of outstanding
commercial paper notes at weighted average discount rates of 5.7%
with average maturities of 20.5 days. These notes have been
classified on the consolidated balance sheet as long-term
liabilities based on the Company's ability to maintain or refinance
these obligations on a long-term basis. At June 30, 1997, the
Company also had $20.4 million outstanding under domestic and
foreign bank lines of credit at weighted average interest rates of
6.8%.
4. Commitments and Contingencies
The Company, in the normal course of business, is a defendant in
various legal actions.
In conjunction with the client loan program, the Company enters
into legally binding arrangements to lend, generally on a
collateralized basis, to potential consignors and other individuals
who have collections of fine art and other objects. In addition,
on certain occasions, the Company will guarantee to the
consignor a minimum price in connection with the sale of property
at auction. The Company must perform under its guarantee only in
the event that (a) the property fails to sell and the consignor
prefers to be paid the minimum price rather than retain ownership
of the unsold property, resulting in the Company's purchase of the
property at the minimum price or (b) the property sells for less
than the minimum price and the Company must pay the difference
between the sale price at auction and the amount of the guarantee.
Under the auction guarantees, the Company participates in a share
of the proceeds if the property under guarantee sells above a
minimum price.At August 8, 1997, the Company had outstanding
guarantees and unfunded commitments to extend additional credit
totaling approximately $95 million.
In early 1997, a television program aired in the U.K. and a related
book was published, both of which contain certain allegations of
improper or illegal conduct by current and former employees of the
Company. In response to these allegations, the Board of Directors,
in February 1997, established a committee of independent directors
to review the issues raised by the book and related matters. The
Independent Review Committee has retained outside independent
counsel in the U.S. and the U.K. to assist and advise the Committee
in its review. The Company's management is conducting its own
review. These investigations are ongoing, therefore, it is not
possible at this time to estimate the full impact of any of the
alleged activities or the expenses associated with these
investigations on the Company's financial condition and results of
operations. However, the non-recurring expenses to be incurred in
connection with this matter may be material to the Company's
operating results for the year ended December 31, 1997. During the
first six months of 1997, the Company recorded $5.5 million in non-
recurring charges which consist largely of legal and other
professional fees associated with the Independent Review Committee.
Except for the matters referred to in the preceding paragraph, in
the opinion of management, the commitments and contingencies
described above currently are not expected to have a material
adverse effect on the Company's consolidated financial statements.
5. Future Impact of Recently Issued Accounting Standards
The Financial Accounting Standards Board ("FASB") recently issued
Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings Per Share," which is effective for financial statements
for both interim and annual periods ending after December 15, 1997.
Early adoption of this statement is not permitted. The Company has
applied this statement to results for both the three and six month
periods ended June 30, 1997 and 1996 as well as the annual results
for 1996 and determined that the adoption of this standard would not
have a material impact on the earnings per share calculations for
these periods.
In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive
Income", which is effective for fiscal years beginning after
December 15, 1997 with earlier application permitted. The Company
will adopt this standard in the first quarter of 1998. This
statement requires certain transactions to be included as
adjustments to net income in order to report comprehensive income.
These transactions represent items that, under previous accounting
standards, bypassed the statement of income and were reported
directly as adjustments to the equity section of the balance sheet.
Adoption of this standard will require the Company to report these
transactions, which may be material, on the statement of
comprehensive income.
The FASB also issued SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information" in June of 1997, which is
effective for fiscal years beginning after December 15, 1997 with
earlier application permitted. The Company will adopt this standard
in the first quarter of 1998. This statement requires additional
disclosure of financial and descriptive information on operating
segments. Adoption of this standard may require the Company to
report information about certain operating segments that was not
previously disclosed.
6. Seasonality of Business
The worldwide art auction market has two principal selling seasons,
spring and fall. During the summer and winter, sales are
considerably lower. The table below demonstrates that at least 80%
of the Company's auction sales are derived from the second and
fourth quarters of the year.
<TABLE>
<CAPTION>
Percentage of Annual
Auction Sales
1996 1995 1994
<S> <C> <C> <C>
January - March 10% 11% 12%
April - June 39% 39% 40%
July - September 9% 7% 8%
October - December 42% 43% 40%
100% 100% 100%
</TABLE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The worldwide auction business is highly seasonal in nature, with
two principal selling seasons, spring and fall. Accordingly, first
and third quarter results reflect lower auction sales and lower
operating margins than the second and fourth quarters due to the
fixed nature of many of the operating expenses. (See Note 6 in the
Notes to the Consolidated Financial Statements for additional
information.)
Following is a geographical breakdown of the Company's auction
sales for the three and six month periods ended June 30, 1997 and
1996 (in thousands):
<TABLE>
<CAPTION>
For the Second Quarter For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
North America $294,182 $314,937 $431,352 $405,430
Europe 308,350 288,562 373,292 352,225
Asia 48,075 27,482 53,225 28,361
Total $650,607 $630,981 $857,869 $786,016
</TABLE>
For the quarter ended June 30, 1997, worldwide auction sales of
$650.6 million increased $19.6 million, or 3%, compared to the
second quarter of 1996. For the six months ended June 30, 1997,
worldwide auction sales increased $71.9 million, or 9%, compared to
1996. Auction sales recorded by the Company's foreign operations
were positively affected by translation into U.S. Dollars, which
increased auction sales by $7.6 million and $6.6 million for the
quarter and six months ended June 30, 1997, respectively. The
decrease in sales in North America in the second quarter was a
result of the 1996 sale of property from the Estate of Jacqueline
Kennedy Onassis, for which there was no comparable sale in the
current year, offset by an increase in Impressionist and Modern
art. Sales in Europe increased $19.8 million, or 7%, in the second
quarter due to increases in the United Kingdom ("U.K.") offset, in
part, by a decline in Jewelry sales in Geneva. The increase in
sales in the U.K. was attributable to several single owner sales,
most notably the sale of Illuminated manuscripts from the Beck
Collection as well as Impressionist and Modern art. Sales in Asia
in the second quarter increased due to Hong Kong's successful
spring sales series. Sales for the first six months of the year
grew due to the sales previously mentioned as well as New York's
sales of Old Masters paintings.
For the second quarter of 1997, worldwide auction and related
revenue was generally flat compared to 1996. An increase in
auction and related revenue primarily resulting from higher auction
sales volume due to the sales discussed above, an increase in
commissions from private sales of art and an increase in expense
recoveries (excluding the non-recurring recovery of expenses
associated with the 1996 sale of property from the Estate of
Jacqueline Kennedy Onassis) was mostly offset by a decrease in
rates earned at auction. Auction and related revenue as a
percentage of sales for the three months ended June 30, 1997,
excluding expense recoveries from the Onassis sale, increased to
17.8% from 17.6% in 1996.
For the six months ended June 30, 1997, auction and related revenue
increased $11.3 million, or 8%, compared to 1996. This increase
was primarily a result of higher auction sales volume due to the
sales discussed above, an increase in commissions from private
sales of art and an increase in expense recoveries (excluding the
non-recurring recovery of expenses associated with the 1996 sale of
property from the Estate of Jacqueline Kennedy Onassis) partially
offset by a decrease in rates earned at auction. Auction and
related revenue as a percentage of sales for the six months ended
June 30, 1997, excluding expense recoveries from the Onassis sale,
increased to 18.8% in 1997 from 18.4% in 1996.
Other revenue, which primarily includes revenues from art-related
financing activities and real estate operations, increased $6.1
million in the second quarter of 1997 when compared to the same
quarter of 1996. For the six months ended June 30, 1997, other
revenue increased $8.4 million compared to 1996. These increases
were due largely to higher revenues from real estate operations
resulting from stronger real estate sales in the U.S. (up 64% in
the first half of the year), an increase in principal activities
and an increase in art-related financing due to an increase in the
average loan portfolio balance of $41.1 million. Foreign currency
movements did not materially impact other revenue for the second
quarter or first six months of 1997.
Total expenses, including non-recurring charges of $3.0 million,
increased $5.9 million, or 7%, in the second quarter of 1997
compared to 1996. For the six months ended June 30, 1997, total
expenses, including non-recurring charges of $5.5 million,
increased $16.6 million, or 13%, in comparison to 1996. Foreign
currency exchange rate movements did not materially impact total
expenses for the second quarter or first six months of 1997.
Direct costs of services (which consist largely of catalogue
production and distribution costs as well as corporate marketing
and sale marketing expenses) decreased $2.2 million, or 9%, during
the second quarter of 1997 compared to the same period of 1996. For
the six months ended June 30, 1997, direct costs totaled $31.9
million compared to $32.9 million in 1996, a decrease of $1.0
million. These decreases largely reflect the impact of costs
associated with the Onassis sale in 1996 which are partly offset by
increased costs associated with the increased sales volume
discussed above. Foreign exchange rate movements did not materially
impact direct costs for the second quarter or first six months of
1997.
Excluding non-recurring charges, all other operating expenses
(which include salaries and related costs, general and
administrative expenses as well as depreciation and amortization)
totaled $57.7 million for the second quarter of 1997, an increase
of 10% compared to the second quarter of 1996. For the six months
ended June 30, 1997, these expenses increased $12.1 million, or
12%, to $110.7 million compared to 1996. These increases were
principally due to an increase in salaries and related costs and,
to a lesser extent, higher travel and entertainment expenses as
well as professional fees.
The Company recorded non-recurring charges of $3.0 million and $5.5
million in the second quarter and first six months of 1997,
respectively, which consist largely of legal and other professional
fees associated with the Independent Review Committee (See Note 4
in the Notes to the Consolidated Financial Statements for
additional information).
Interest income decreased $0.3 million and $0.6 million for the
three and six month periods ended June 30, 1997, respectively, due
largely to lower cash balances in Europe. Interest expense
increased $0.5 million and $0.2 million for the three and six month
periods ended June 30, 1997, respectively, due to higher average
borrowings to support a higher average loan portfolio.
The consolidated effective tax rate was 38% for the quarter and six
months ended June 30, 1997 compared to 40% for the quarter and six
months ended June 30, 1996.
For the second quarter of 1997, net income increased 3%, to $29.3
million from net income of $28.6 million in the second quarter of
1996. Earnings per share for the second quarter of 1997 increased
2% to $0.51 from $0.50 in the second quarter of 1996. For the six
months ended June 30, 1997, net income increased 11% to $22.6
million from net income of $20.4 million in 1996. Earnings per
share for the first six months increased 11% to $0.40 from $0.36 in
1996. Foreign currency movements did not have a material impact on
net income or earnings per share for the quarter or year-to-date
periods ended June 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net debt position (total debt, which includes short-
term borrowings and commercial paper, less cash and cash
equivalents) totaled $51.5 million at June 30, 1997 compared to a
net cash position of $63.7 million at December 31, 1996, reflecting
the funding of the loan portfolio and an increase in auction
receivables. Working capital (current assets less current
liabilities) at June 30, 1997 was $71.0 million compared to $57.5
million at December 31, 1996.
The Company's client loan portfolio increased to $212.7 million at
June 30, 1997 from $153.7 million at December 31, 1996. These
amounts include $104.3 million and $69.4 million of loans which
have a maturity of more than one year at June 30, 1997 and December
31, 1996, respectively.
The Company relies on internally generated funds and borrowings to
meet its financing requirements. The Company may issue up to $200
million of short-term notes pursuant to its U.S. commercial paper
program. The Company supports any short-term notes issued under its
U.S. commercial paper program with committed credit facilities.
The Company maintains $300 million of committed and available
financing to July 11, 2001 pursuant to a bank credit agreement.
For the six months ended June 30, 1997, the Company's primary
sources of liquidity were derived from available cash balances
supplemented by commercial paper and short term borrowings. The
most significant cash uses during the first six months of 1997 were
the net funding of the client loan portfolio, operations, and
payment of shareholder dividends.
Capital expenditures, consisting primarily of office and auction
facility refurbishment and the acquisition of computer equipment,
totaled $4.9 million and $2.9 million for the first six months of
1997 and 1996, respectively.
In certain instances, consignor advances are made with recourse
limited only to the works of art consigned for sale and pledged as
security for the loan. As of June 30, 1997, no such advances were
outstanding. Although the Company's general policy has been to
make secured loans at loan to value ratios of 50% or lower, on
certain occasions the Company will lend, on a secured basis, at
loan to value ratios higher than 50%. In addition, on certain
occasions the Company will lend amounts to consignors at loan to
value ratios higher than 50% where the Company participates in a
share of the sale proceeds of the consigned property higher than
the standard selling commission if the property consigned sells for
more than an agreed target amount. From time to time, the Company
has off-balance sheet commitments to consignors that property will
sell at a minimum price and legally binding lending commitments in
conjunction with the client loan program. See Note 4 in the Notes
to the Consolidated Financial Statements for additional
information. The Company does not believe that material liquidity
risk exists relating to these commitments.
The Company believes that operating cash flows will be adequate to
meet normal working capital requirements and that the commercial
paper program and credit facilities will continue to be adequate to
fund the client loan program, peak working capital requirements and
short-term commitments to consignors.
The Company evaluates, on an ongoing basis, the adequacy of its
principal auction premises for the requirements of the present and
future conduct of its business. Any significant alteration to
these premises may require utilization of additional capital which
the Company believes is adequately available.
FORWARD-LOOKING STATEMENTS
This form 10-Q contains certain forward-looking statements, as such
term is defined in Section 21E of the Securities Act of 1934, as
amended, relating to future events and the financial performance of
the Company, particularly with respect to the adequacy of working
capital as well as additional capital necessary for relocation of
all or a portion of the Company. Such statements are only
predictions and involve risks and uncertainties, resulting in the
possibility that the actual events or performance 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 following, which are not listed in any
particular rank order:
(1) The Company's business is seasonal, with peak revenues and
operating income occurring in the second and fourth quarters of each
year as a result of the traditional spring and fall art auction
season.
(2) The overall strength of the international economy and financial
markets and, in particular, the economies of the United States, the
United Kingdom, and the major countries of Continental Europe and
Asia (principally Japan and Hong Kong).
(3) Competition with other auctioneers and art dealers.
(4) The volume of consigned property and the marketability at
auction of such property.
See Note 4 in the Notes to the Consolidated Financial Statements for
additional information.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits
27. Financial Data Schedule
(b)Reports on Form 8-K
None.
Exhibit Index
Exhibit No. Description
27. Financial Data Schedule
<PAGE>
SOTHEBY'S HOLDINGS, INC.
AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed this
the 14th day of August, 1997, on its behalf by the undersigned,
thereunto duly authorized and in the capacity indicated.
SOTHEBY'S HOLDINGS, INC.
By: PATRICIA A. CARBERRY
Patricia A. Carberry
Vice President, Controller
and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 13,950
<SECURITIES> 0
<RECEIVABLES> 422,585
<ALLOWANCES> 10,802
<INVENTORY> 17,734
<CURRENT-ASSETS> 475,819
<PP&E> 69,387
<DEPRECIATION> 67,310
<TOTAL-ASSETS> 720,888
<CURRENT-LIABILITIES> 404,783
<BONDS> 0
<COMMON> 5,578
0
0
<OTHER-SE> 251,708
<TOTAL-LIABILITY-AND-EQUITY> 720,888
<SALES> 0
<TOTAL-REVENUES> 185,084
<CGS> 0
<TOTAL-COSTS> 31,944
<OTHER-EXPENSES> 65,173
<LOSS-PROVISION> 649
<INTEREST-EXPENSE> 1,799
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