NEW YORK, N.Y.- Sotheby’s Holdings, Inc., the parent company of Sotheby’s worldwide auction businesses and art-related financing activities today announced results for the first quarter ended March 31, 2004.  For the quarter ended March 31, 2004, the Company reported auction and related revenues of $59.1 million, compared to $38.1 million in the corresponding period in 2003 for an increase of $21.0 million, or 55%, principally due to the private sale of the Forbes Fabergé Collection in February and increased auction commission revenues.  Additionally, in the first quarter of 2004, the Company recognized license fee revenue of $45.0 million related to a one-time license fee received as consideration for entering into a license agreement with Cendant Corporation in conjunction with the sale of its domestic real estate brokerage business in February.  The Company’s net income from continuing operations for the first quarter of 2004 was $13.5 million, or $0.22 per diluted share, compared to a net loss from continuing operations for the first quarter of 2003 of ($27.6) million, or ($0.45) per diluted share, due to the increases in revenue discussed above, as well as a significant decrease in restructuring charges and employee retention costs.  During the first quarter of 2004, the Company recorded pre-tax charges of $0.9 million, primarily due to antitrust related special charges.  During the same period of 2003, the Company recorded pre-tax charges of $10.1 million consisting of net restructuring charges of $5.8 million, employee retention costs of $3.5 million and antitrust related special charges of $0.8 million.  Excluding these items, the Company would have recorded adjusted net income from continuing operations of $14.1* million, or $0.23* per diluted share, in the first quarter of 2004, as compared to an adjusted net loss from continuing operations of ($21.2)* million, or ($0.34)* per diluted share, in the prior period.

Excluding the one-time license fee revenue and expense recorded in conjunction with the license agreement with Cendant Corporation, the Company’s net loss from continuing operations for the first quarter of 2004 would have been ($14.8)* million, or ($0.24)* per diluted share, compared to a net loss from continuing operations for the first quarter of 2003 of ($27.6) million, or ($0.45) per diluted share.  During the first quarter of 2004, the Company recorded pre-tax charges of $0.9 million, primarily from antitrust related special charges.  During the same period of 2003, the Company recorded pre-tax charges of $10.1 million, detailed above.  Excluding these items and the one-time license fee revenue and expense, the Company would have recorded an adjusted net loss from continuing operations of ($14.2)* million, or ($0.23)* per diluted share, in the first quarter of 2004, as compared to an adjusted net loss from continuing operations of ($21.2)* million, or ($0.34)* per diluted share, in the prior period, an improvement of 33%.

Because of the seasonal nature of the art auction market, Auction Sales (hammer price plus buyer’s premium) in the first quarter have historically only represented approximately 9% - 13% of annual Auction Sales and the first quarter has historically been a loss period for the Company.  As a result, historically, first quarter results have not been indicative of expected full year results. 

"We are extremely pleased with our first quarter results, especially since the large improvement over prior years is not only due to the Forbes Fabergé sale but also to a solid selling season with auction commission revenues increasing $6.3 million, or 20%, from the prior period." said William F. Ruprecht, President and Chief Executive Officer of Sotheby’s Holdings, Inc.  "These strong first quarter results have now been followed by an historic first that took place at Sotheby’s last week when a painting from the fabled Whitney Collection broke the $100 million barrier at auction for the first time ever."

Second and Third Quarter Sales

History was made at Sotheby’s last week with the sale of the Property of the Greentree Foundation from the Collection of Mr. and Mrs. John Hay Whitney when Sotheby’s sold the world’s most expensive painting at auction, Pablo Picasso’s Garcon à la Pipe, for $104.2 million.  The price shattered the previous record of $82.5 million by over $20 million and was the first to break the $100 million threshold.  Auction records for four other artists were broken that night for Sir Alfred Munnings, Jean-Frédéric Bazille, William Blake and Raoul Dufy, with the sale totaling $189.9 million.

The day and evening sales of Impressionist and Modern Art the day after the Greentree Whitney sale brought impressive results as well with a total of $125.0 million, just below the high estimate of $128.8 million.  The total surpasses last year’s May Impressionist and Modern Art sales total of $81.1 million by 54% which clearly demonstrates the vibrancy of the current market.  Eighteen lots sold for over $1 million and Claude Monet’s Le Bassin aux Nymphéas was the highlight of the evening, bringing $16.8 million, soundly above its high estimate of $12 million.  Including the Greentree Whitney sale, the two days of sales led the market by a wide margin with a total of $314.9 million, our highest sales total since May 1990.