NEW YORK.- Sotheby's Holdings, Inc. the parent company of Sotheby's worldwide auction businesses, art-related financing and private sales activities, today announced results for the fourth quarter and full year ended December 31, 2004.

For the quarter ended December 31, 2004, the Company's Auction Sales (aggregate hammer price of property sold at auction, including buyer's premium), were $1,147.0 million, a 45% increase from $792.9 million in the prior period. Contributing to these results were: the impressive fall New York Impressionist and Modern Art sales which brought $232.0 million, a 59% increase from the prior fall; the November New York Contemporary Art sales of $121.1 million, a 23% increase from the prior year; the winter New York American Paintings sales which totaled $107.9 million, an almost four-fold increase from the prior year's sale of $31.2 million; and record breaking Hong Kong sales in October of $75.8 million. For the fourth quarter of 2004, the Company reported auction and related revenues of $175.5 million, a 31% or $41.3 million increase from the prior period, largely due to the significant increase in auction sales. The Company's income from continuing operations was $36.1 million or $0.57 per diluted share for the fourth quarter of 2004 compared to income from continuing operations of $17.6 million, or $0.28 per diluted share in the prior-year period, a 106% or $18.5 million improvement.

Auction Sales totaled $2,694.5 million for the full year of 2004, an increase of 59% from $1,690.7 million in the prior period. Auction and related revenues for the full year 2004 totaled $443.1 million, an increase of $134.1 million, or 43%, from the prior year largely due to the significant increase in auction sales. This increase was partially offset by lower auction commission margins as a sizeable portion of the increase in auction sales came from high-end works of art for which commission margins are traditionally lower due to the competition for such objects. Income from continuing operations was $62.4 million, or $1.00 per diluted share for the full year 2004, compared to a loss from continuing operations of ($26.0) million, or ($0.42) per diluted share in the prior period, an improvement of $88.4 million. This upturn was primarily due to a significant increase in auction commission revenues as well as the recognition of $45.0 million in license fee revenue related to a one-time non-refundable payment received for entering into a license agreement with Cendant Corporation in conjunction with the Company's sale of its domestic real estate brokerage business in February 2004.

For the full year 2004, the Company recorded pre-tax charges of $2.4 million, largely attributable to antitrust related special charges which are run-off legal and administrative costs. For the prior period, pre-tax charges were $16.6 million, primarily due to the Company's employee retention programs and net restructuring charges. Excluding these items and the Cendant license fee revenue and associated expense, the Company would have recorded adjusted income from continuing operations of $35.6* million, or $0.57* per diluted share, for the full year 2004, as compared to an adjusted loss from continuing operations of ($14.4)* million, or ($0.23)* per diluted share, in the prior period, an improvement of $50.0 million.

The year 2004 saw a significant strengthening of Sotheby's financial position. In addition to the outstanding operating results in 2004, Sotheby's realized proceeds of over $100 million on the sale of its Realty operations in February of 2004 and also signed a three-year credit facility for $200 million. As a result, cash and short-term investments totaled $257 million at December 31, 2004. This dramatic improvement in earnings and significant strengthening of the balance sheet also led to a credit rating upgrade from both Standard & Poor's and Moody's in 2004 and a 33% increase in Sotheby's share price during 2004.

"Our focus and our energies have been on a return to profitability and in 2004 we successfully achieved that goal," said Bill Ruprecht, President and Chief Executive Officer of Sotheby's Holdings, Inc. "2004 was a remarkable year for Sotheby's and we are delighted with these results. The 45% increase in sales for the fourth quarter translated to a doubling of net income, dramatically reflecting the operating leverage in the business and we have seen even larger gains in sales and net income for the full year. We will continue to challenge the Company's cost structure and seek additional opportunities for revenue growth.

"Sotheby's made history both in auction sales and in private sales last year," Mr. Ruprecht continued. "Sotheby's auctioned the world's most expensive painting when Picasso's Garcon a la Pipe crossed the $100 million threshold for the first time and sold for $104.2 million. And the sale of the fabled Faberge Collection from the Forbes family became possibly the largest private sale ever when the collection was acquired privately in its entirety and repatriated to Russia.
"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. That strength has continued into 2005 and we are encouraged by the 41% increase in sales for the first two months of 2005 compared to 2004 as well as the level of consignments for the spring season."

Throughout the year, many extraordinary prices were achieved across a multitude of collecting categories. Sotheby's sold eight of the top ten lots sold at auction in 2004, which was a remarkable achievement. Along with Pablo Picasso's Garcon a la Pipe that sold in May for a world record $104.2 million, Amedeo Modigliani's Jeanne Hebuterne (Devant une Porte) sold for $31.4 million, Johannes Vermeer's A Young Woman Seated at the Virginals sold for $30.0 million, John Singer Sargent's Group with Parasols (a Siesta) sold for $23.5 million and Paul Gauguin's Maternite (II) sold for $39.2 million.
Outstanding results were also posted in a number of single owner sales during 2004. The most notable examples were the Greentree Foundation sale of Property from the Collection of Mr. and Mrs. John Hay Whitney, which brought $213.2 million and was our highest total ever for a single owner sale; Rita and Daniel Fraad's record breaking Collection of American Paintings which brought $65.1 million, the highest auction total ever for a single owner sale of American paintings; the contents of contemporary artist Damien Hirst's restaurant Pharmacy which was 100% sold and totaled $20.1 million, more than double its pre-sale estimate; the collection of extraordinary timepieces from the Time Museum which sold for $18.2 million; and the Estate of Katharine Hepburn which also was 100% sold and achieved $6.1 million. Sotheby's experienced a three-fold increase in single owner sales volume from the prior year and our highest yearly total of single owner sales in fourteen years.

Year to Date 2005 Sales -

Worldwide sales have been strong to date, highlighted by the exceptional Impressionist and Contemporary sales held last month in London. The London Impressionist and Modern Art sales achieved $103.8 million, up 37% from the prior year with ten works selling for more than 1 million pounds. The top lot of the sales was a masterpiece by Fernand Leger entitled Nature Morte a la Lampe which achieved $5.4 million. The Contemporary Art sales also fared exceptionally well, totaling $42.0 million, an increase of 19% from the prior winter, with the evening sale achieving the highest total ever for a European Contemporary sale at Sotheby's.

In January, Sotheby's New York held an extremely strong week of Americana sales. The week total led the market with $25.3 million, a significant increase of 86% from the prior year. This was largely due to the exce