Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SOTHEBYS | |
Entity Central Index Key | 823,094 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 52,670,146 |
Condensed Consolidated Income S
Condensed Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Agency commissions and fees | $ 276,807 | $ 273,764 | $ 376,300 | $ 354,829 |
Inventory sales | 19,937 | 5,281 | 91,314 | 12,075 |
Finance | 13,359 | 14,750 | 26,126 | 29,505 |
Other | 4,795 | 4,870 | 8,695 | 8,787 |
Total revenues | 314,898 | 298,665 | 502,435 | 405,196 |
Expenses: | ||||
Agency direct costs | 29,881 | 31,243 | 39,398 | 40,782 |
Cost of inventory sales | 22,255 | 7,381 | 93,662 | 18,119 |
Cost of finance revenues | 5,078 | 4,153 | 10,115 | 8,547 |
Marketing | 5,951 | 4,408 | 11,862 | 9,421 |
Salaries and related | 87,297 | 75,227 | 151,643 | 143,398 |
General and administrative | 43,362 | 40,909 | 82,313 | 76,585 |
Depreciation and amortization | 5,676 | 5,492 | 11,060 | 10,788 |
Voluntary separation incentive programs (net) | 0 | (231) | (162) | (538) |
Total expenses | 199,500 | 168,582 | 399,891 | 307,102 |
Operating income | 115,398 | 130,083 | 102,544 | 98,094 |
Interest income | 367 | 275 | 624 | 671 |
Interest expense | (7,572) | (7,638) | (15,105) | (15,184) |
Non-operating (expense) income | (299) | 374 | 541 | 421 |
Income before taxes | 107,894 | 123,094 | 88,604 | 84,002 |
Income tax expense | 31,468 | 34,355 | 24,176 | 21,569 |
Equity in earnings of investees | 466 | 191 | 1,133 | 587 |
Net income | 76,892 | 88,930 | 65,561 | 63,020 |
Less: Net income (loss) attributable to noncontrolling interest | 1 | (34) | (5) | (60) |
Net income attributable to Sotheby's | $ 76,891 | $ 88,964 | $ 65,566 | $ 63,080 |
Basic earnings per share - Sotheby’s common shareholders (usd per share) | $ 1.44 | $ 1.54 | $ 1.22 | $ 1.04 |
Diluted earnings per share - Sotheby's common shareholders (usd per share) | $ 1.43 | $ 1.52 | $ 1.21 | $ 1.03 |
Weighted average basic shares outstanding (shares) | 52,716 | 57,104 | 52,866 | 60,063 |
Weighted average diluted shares outstanding (shares) | 53,054 | 57,712 | 53,342 | 60,682 |
Cash dividends paid per common share (usd per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income | $ 76,892 | $ 88,930 | $ 65,561 | $ 63,020 |
Other comprehensive income (loss): | ||||
Currency translation adjustments | 5,955 | (15,460) | 8,351 | (18,086) |
Defined benefit pension plan | 215 | 0 | 423 | 81 |
Total other comprehensive income (loss) | 4,754 | (11,634) | 7,572 | (18,668) |
Comprehensive income | 81,646 | 77,296 | 73,133 | 44,352 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 1 | (34) | (5) | (60) |
Comprehensive income attributable to Sotheby's | 81,645 | 77,330 | 73,138 | 44,412 |
Cash flow hedges | ||||
Other comprehensive income (loss): | ||||
Hedges | 38 | (1,947) | 876 | (6,436) |
Net investment hedges | ||||
Other comprehensive income (loss): | ||||
Hedges | $ (1,454) | $ 5,773 | $ (2,078) | $ 5,773 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Current assets: | |||
Cash and cash equivalents | $ 516,402 | $ 496,031 | $ 475,304 |
Restricted cash | 41,258 | 59,106 | 22,416 |
Accounts receivable, net of allowance for doubtful accounts of $7,744, $7,670, and $7,676 | 847,332 | 433,614 | 835,431 |
Notes receivable, net of allowance for credit losses of $1,290, $1,270, and $1,373 | 73,217 | 37,977 | 65,469 |
Inventory (See Note 9) | 131,193 | 159,043 | 205,099 |
Income tax receivables | 14,825 | 6,475 | 3,586 |
Prepaid expenses and other current assets (see Note 10) | 45,455 | 76,607 | 41,775 |
Total current assets | 1,669,682 | 1,268,853 | 1,649,080 |
Notes receivable | 559,605 | 651,159 | 582,079 |
Fixed assets, net of accumulated depreciation and amortization of $218,870, $209,196, and $207,002 | 347,067 | 347,182 | 348,910 |
Goodwill | 50,351 | 50,029 | 47,916 |
Intangible assets (net) | 12,407 | 13,393 | 13,254 |
Income tax receivables | 434 | 686 | 817 |
Deferred income taxes | 7,837 | 7,700 | 7,234 |
Other long-term assets (see Note 10) | 192,995 | 165,424 | 159,205 |
Total assets | 2,840,378 | 2,504,426 | 2,808,495 |
Current liabilities: | |||
Client payables | 867,856 | 511,876 | 782,903 |
Related party client payables (see Note 20) | 0 | 0 | 10,555 |
Accounts payable and accrued liabilities | 91,196 | 85,995 | 99,743 |
Accrued salaries and related costs | 54,733 | 68,387 | 47,083 |
Current portion of York Property Mortgage (net) | 38,825 | 6,629 | 6,491 |
Accrued income taxes | 21,180 | 26,912 | 25,485 |
Other current liabilities (see Notes 8 and 9) | 46,211 | 43,176 | 48,902 |
Total current liabilities | 1,120,001 | 742,975 | 1,021,162 |
Credit facility borrowings | 531,500 | 565,000 | 523,500 |
Long-term debt (net) | 563,762 | 598,941 | 601,944 |
Accrued income taxes | 18,315 | 16,600 | 17,193 |
Deferred income taxes | 11,800 | 10,228 | 15,477 |
Other long-term liabilities (see Note 10) | 51,857 | 65,080 | 58,923 |
Total liabilities | 2,297,235 | 1,998,824 | 2,238,199 |
Commitments and contingencies (see Note 14) | |||
Shareholders’ equity: | |||
Common Stock, $0.01 par value, Authorized shares - 200,000,000, Issued shares - 70,817,787; 70,378,873; and 70,386,886, Outstanding shares - 52,670,146; 52,971,232; and 55,134,327 | 708 | 703 | 703 |
Additional paid-in capital | 442,560 | 444,611 | 437,103 |
Treasury stock shares, at cost — 18,147,641; 17,407,641; and 15,252,559 | (543,995) | (509,885) | (432,160) |
Retained earnings | 726,469 | 660,347 | 649,313 |
Accumulated other comprehensive loss | (82,786) | (90,358) | (84,872) |
Total shareholders’ equity | 542,956 | 505,418 | 570,087 |
Noncontrolling interest | 187 | 184 | 209 |
Total equity | 543,143 | 505,602 | 570,296 |
Total liabilities and shareholders’ equity | $ 2,840,378 | $ 2,504,426 | $ 2,808,495 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts receivable | $ 7,744 | $ 7,670 | $ 7,676 |
Allowance for notes receivable | 1,290 | 1,270 | 1,373 |
Fixed assets, accumulated depreciation | $ 218,870 | $ 209,196 | $ 207,002 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 70,817,787 | 70,378,873 | 70,386,886 |
Common stock, shares outstanding (shares) | 52,670,146 | 52,971,232 | 55,134,327 |
Treasury stock, shares outstanding (shares) | 18,147,641 | 17,407,641 | 15,252,559 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities: | ||
Net income attributable to Sotheby's | $ 65,566 | $ 63,080 |
Adjustments to reconcile net income attributable to Sotheby's to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 11,060 | 10,788 |
Deferred income tax expense (benefit) | 11,551 | (21,688) |
Share-based payments | 12,015 | 7,488 |
Net pension benefit | (2,447) | (3,086) |
Inventory writedowns and bad debt provisions | 7,470 | 7,971 |
Amortization of debt discount and issuance costs | 827 | 793 |
Equity in earnings of investees | (1,133) | (587) |
Other | 453 | 719 |
Changes in assets and liabilities: | ||
Accounts receivable | (359,192) | 34,620 |
Client payables | 330,368 | 108,293 |
Related party client payables (see Note 20) | 0 | (274,863) |
Inventory | 21,026 | (500) |
Changes in other operating assets and liabilities (see Note 11) | (41,207) | 19,865 |
Net cash provided (used) by operating activities | 56,357 | (47,107) |
Investing Activities: | ||
Funding of notes receivable | (101,896) | (159,406) |
Collections of notes receivable | 124,879 | 215,956 |
Capital expenditures | (8,420) | (10,641) |
Acquisitions, net of cash acquired (see Note 19) | 0 | (50,718) |
Funding of investments (see Note 10) | (5,537) | (200) |
Distributions from investees | 2,550 | 825 |
Proceeds from the sale of equity investment (see Note 4) | 2,110 | 175 |
Settlement of net investment hedges (see Note 8) | 29,110 | (2,863) |
Decrease in restricted cash | 7,749 | 9,819 |
Net cash provided by investing activities | 50,545 | 2,947 |
Financing Activities: | ||
Debt issuance and other borrowing costs | (23) | 0 |
Proceeds from credit facility borrowings | 28,500 | 63,000 |
Repayments of credit facility borrowings | (62,000) | (81,000) |
Repayments of York Property Mortgage | (3,810) | (3,611) |
Increase in restricted cash related to York Property Mortgage (see Note 7) | (2,799) | (2,282) |
Repurchases of common stock | (33,940) | (282,160) |
Dividends paid | (2,375) | (1,743) |
Funding of employee tax obligations upon the vesting of share-based payments | (14,573) | (5,150) |
Net cash used by financing activities | (91,020) | (312,946) |
Effect of exchange rate changes on cash and cash equivalents | 4,489 | (16,287) |
Increase (decrease) in cash and cash equivalents | 20,371 | (373,393) |
Cash and cash equivalents at beginning of period | 496,031 | 848,697 |
Cash and cash equivalents at end of period | $ 516,402 | $ 475,304 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Accounting Principles —The unaudited Condensed Consolidated Financial Statements included herein have been prepared by the management of Sotheby’s (or the "Company") in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. In our opinion, the unaudited Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year (see Note 2 ). We urge you to read these Condensed Consolidated Financial Statements in conjunction with the information included in our 2016 Form 10-K filed with the SEC on February 27, 2017. Principles of Consolidation —The unaudited Condensed Consolidated Financial Statements include the accounts of our wholly-owned subsidiaries and Sotheby's (Beijing) Auction Co., Ltd. ("Sotheby's Beijing"), a joint venture in which we have a controlling 80% ownership interest. The net income (loss) attributable to the minority owner of Sotheby's Beijing is reported as "Net Income (Loss) Attributable to Noncontrolling Interest" in our Condensed Consolidated Income Statements and the non-controlling 20% ownership interest is reported as "Noncontrolling Interest" within the Equity section of our Condensed Consolidated Balance Sheets. Intercompany transactions and balances among our subsidiaries are eliminated in consolidation. Equity investments through which we exercise significant influence over the investee, but do not control, are accounted for using the equity method. Under the equity method, our share of investee earnings or losses is recorded within Equity in Earnings of Investees in our Condensed Consolidated Income Statements. Our interest in the net assets of these equity method investees is recorded within Other Long-Term Assets on our Condensed Consolidated Balance Sheets. Our equity method investees include: (i) Acquavella Modern Art ("AMA"), a partnership through which a collection of fine art is being sold, (ii) RM Sotheby's, an auction house for investment-quality automobiles, and (iii) a partnership formed in the second quarter of 2017 through which artworks are being purchased and sold (see Note 10). Presentation of Salaries and Related Costs —We do not allocate salaries and related costs to our cost of revenue, marketing expense, and general and administrative expense line items, as many employees often perform duties that could be categorized across more than one of these line items. Estimates and Assumptions —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Adoption of Accounting Standards Update ("ASU") 2016-09 —In March 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting and presentation of share-based payment transactions, including the accounting for the related income tax consequences and certain classifications within the statement of cash flows. We adopted ASU 2016-09 on its effective date of January 1, 2017. ASU 2016-09 requires that all excess tax benefits and deficiencies resulting from the vesting of share-based payments be recorded in the statement of operations, whereas previous guidance generally permitted such items to be recorded in the equity section of the balance sheet provided that an adequate level of previously recorded excess tax benefits existed. We adopted this aspect of ASU 2016-09 on a prospective basis beginning on January 1, 2017. The adoption of ASU 2016-09 and the vesting of certain share-based payments in the first quarter of 2017 resulted in the recording of a discrete $2.6 million income tax benefit in our Condensed Consolidated Income Statements, which decreased our effective income tax rate for the six months ended June 30, 2017 by approximately 3% . Under previous guidance, this income tax benefit would have been recorded as an increase to Additional Paid-In Capital on our Condensed Consolidated Balance Sheets. ASU 2016-09 also changed how excess tax benefits resulting from the vesting of share-based payments are presented in the statement of cash flows. ASU 2016-09 requires that such excess tax benefits be classified within Operating Activities along with other income tax cash flows. Under previous guidance, excess tax benefits resulting from the vesting of share-based payments were presented as a cash inflow within Financing Activities and a corresponding cash outflow within Operating Activities. The adoption of ASU 2016-09 in the first quarter of 2017 resulted in the classification of $2.6 million of excess tax benefits within Operating Activities in our Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017. The retrospective adoption of ASU 2016-09 did not have an effect on our Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2016 because no excess tax benefits were recorded in that period. The adoption of the other aspects of ASU 2016-09 did not have a material impact on our Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2017 and 2016. Adoption of Other Recently Issued Accounting Standards —In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging: Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships , which clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument would not, in and of itself, be considered a termination of the derivative instrument, provided that all other hedge accounting criteria continue to be met. The adoption of ASU 2016-05 on its effective date of January 1, 2017 did not have a material effect on our Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2017 and 2016. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging-Contingent Put and Call Options in Debt Instruments , which aims to reduce the diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The adoption of ASU 2016-06 on its effective date of January 1, 2017 did not have a material effect on our Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2017 and 2016. |
Seasonality of Business
Seasonality of Business | 6 Months Ended |
Jun. 30, 2017 | |
Seasonality Of Business [Abstract] | |
Seasonality of Business | Seasonality of Business The global art auction market has two principal selling seasons, which generally occur in the second and fourth quarters of the year. In the aggregate, second and fourth quarter Net Auction Sales 1 represented 82% and 78% of our total annual Net Auction Sales for the years ended December 31, 2016 and 2015 , respectively, with auction commission revenues comprising approximately 75% of our total revenues in each of those years. Accordingly, our financial results are seasonal, with peak revenues and operating income generally occurring in the second and fourth quarters. Consequently, first and third quarter results have historically reflected lower revenues when compared to the second and fourth quarters and, typically, a net loss due to the fixed nature of many of our operating expenses. ___________________________________________________________________ 1 Represents the total hammer (sale) price of property sold at auction. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Sotheby's is a global art and luxury business, offering its clients opportunities to connect with and transact in the world's most extraordinary objects. Auctioneers since 1744, today we offer a variety of innovative art-related services, including the brokerage of private art sales, the brokerage of private jewelry sales through our Sotheby's Diamonds brand, exclusive private selling exhibitions at our S|2 galleries, art-related financing, and art advisory services, as well as retail wine locations in New York and Hong Kong. Our operations are organized under two segments—the Agency segment and the Finance segment, which does business as and is referred to in this report as Sotheby's Financial Services (or "SFS"). Thomas S. Smith, Jr, Sotheby's Chief Executive Officer, is our chief operating decision maker. Mr. Smith regularly evaluates financial information about each of our segments in deciding how to allocate resources and assess performance. The performance of each segment is measured based on segment income before taxes, which excludes the unallocated items highlighted in the reconciliation below. Through our Agency segment, we accept property on consignment, stimulate buyer interest through professional marketing techniques, and match sellers (also known as consignors) to buyers through the auction or private sale process. Prior to offering a work of art for sale, we perform due diligence activities to authenticate and determine the ownership history of the property being sold. To a much lesser extent, Agency segment activities also include the sale of artworks that are principally acquired as a consequence of the auction process, and RM Sotheby's, an equity investee that operates as an auction house for investment-quality automobiles. The Agency segment is an aggregation of the auction, private sale, and other related activities conducted by our operating segments in the Americas, Europe, and Asia, which have similar economic characteristics and are similar in their services, customers, and the manner in which their services are provided. SFS is an art financing company that operates as a niche lender with the ability to tailor attractive financing packages for clients who wish to obtain immediate access to liquidity from their art assets. SFS deploys a unique combination of art expertise, skill in international law and finance, and access to capital to provide art collectors and dealers with financing secured by their works of art, allowing them to unlock the value in their collections. Art Agency, Partners (“AAP”), through which we offer art advisory services, provides art collectors with strategic guidance on collection identity and development, acquisitions, and short and long-term planning, and provides advice to artists and artists' estates. AAP was acquired on January 11, 2016 (see Note 19). Our advisory services are classified within All Other for segment reporting purposes, along with our retail wine business, brand licensing activities, the results from certain equity method investments (see Note 10), and sales of the remaining inventory of Noortman Master Paintings, an art dealer that was owned and operated by us from its acquisition in 2006 until its closure in December 2013. The following table presents our segment information for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 Agency SFS All Other Reconciling items (a) Total Revenues $ 294,513 $ 16,362 $ 7,026 $ (3,003 ) $ 314,898 Segment income before taxes $ 97,226 $ 8,879 $ 2,255 $ (466 ) (b) $ 107,894 Three Months Ended June 30, 2016 Revenues $ 277,058 $ 16,552 $ 6,857 $ (1,802 ) $ 298,665 Segment income before taxes $ 110,716 $ 10,675 $ 1,894 $ (191 ) (b) $ 123,094 Six Months Ended June 30, 2017 Revenues $ 462,932 $ 30,733 $ 13,377 $ (4,607 ) $ 502,435 Segment income before taxes $ 68,804 $ 16,212 $ 4,721 $ (1,133 ) (b) $ 88,604 Six Months Ended June 30, 2016 Revenues $ 362,833 $ 33,032 $ 12,858 $ (3,527 ) $ 405,196 Segment income before taxes $ 60,424 $ 20,940 $ 3,225 $ (587 ) (b) $ 84,002 (a) The reconciling items related to Revenues consist principally of amounts charged by SFS to the Agency segment, including interest and facility fees related to certain loans made to Agency segment clients, as well as fees charged for term loan collateral sold at auction or privately through the Agency segment. (b) The reconciling items related to segment income before taxes are detailed in the table below. The table below presents a reconciliation of segment income before taxes to consolidated income before taxes for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Agency $ 97,226 $ 110,716 $ 68,804 $ 60,424 SFS 8,879 10,675 16,212 20,940 All Other 2,255 1,894 4,721 3,225 Segment income before taxes 108,360 123,285 89,737 84,589 Reconciling items: Equity in earnings of investees (a) (466 ) (191 ) (1,133 ) (587 ) Income before taxes $ 107,894 $ 123,094 $ 88,604 $ 84,002 (a) For segment reporting purposes, our share of earnings related to equity investees is included as part of income before taxes. However, such earnings are reported separately below income before taxes in our Condensed Consolidated Income Statements. The table below presents segment assets, as well as a reconciliation of segment assets to consolidated assets as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, 2017 December 31, 2016 June 30, 2016 Agency $ 2,130,731 $ 1,759,670 $ 2,114,220 SFS 663,500 687,649 642,118 All Other 48,051 42,246 40,520 Total segment assets 2,842,282 2,489,565 2,796,858 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 23,096 14,861 11,637 Reconciling item related to SFS (a) (25,000 ) — — Consolidated assets $ 2,840,378 $ 2,504,426 $ 2,808,495 (a) As of June 30, 2017, segment assets for SFS include a $25 million consignor advance that is netted against an associated auction payable balance on our Condensed Consolidated Balance Sheets. Substantially all of our capital expenditures for the six months ended June 30, 2017 , the year ended December 31, 2016 , and the six months ended June 30, 2016 were attributable to the Agency segment. |
Receivables
Receivables | 6 Months Ended |
Jun. 30, 2017 | |
Accounts and Notes Receivable, Net [Abstract] | |
Receivables | Receivables Accounts Receivable (Net) —Through our Agency segment, we accept property on consignment and match sellers, also known as consignors, to buyers through the auction or private sale process. Following an auction or private sale, we invoice the buyer for the purchase price of the property (including our commission, as well as any applicable taxes and royalties), collect payment from the buyer, and remit to the consignor the net sale proceeds after deducting our commissions, expenses and applicable taxes and royalties. Under our standard auction payment terms, the purchase price is due from the buyer no more than 30 days after the sale date, with the net proceeds due to the consignor 35 days from the sale date. For private sales, payment from the buyer is typically due on the sale date, with the net sale proceeds due to the consignor shortly thereafter. We also sometimes provide extended payment terms to an auction or private sale buyer. For auctions, the extent to which extended payment terms are provided can vary considerably from selling season to selling season. Extended payment terms typically extend the payment due date to a date that is no longer than one year from the sale date. In limited circumstances, the payment due date may be extended to a date that is beyond one year from the sale date. When providing extended payment terms, we attempt to match the timing of cash receipt from the buyer with the timing of our payment to the consignor, but are not always successful in doing so. All extended payment term arrangements are approved by management under our internal corporate governance policy. In the limited circumstances when the buyer's payment due date is extended to a date that is beyond one year from the sale date, if the consignor does not provide matched payment terms (i.e., we pay the consignor before receiving payment from the buyer), the receivable balance is reclassified from Accounts Receivable to Notes Receivable on our Condensed Consolidated Balance Sheets. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Notes Receivable within the Agency segment included $2.6 million , $7.5 million , and $12.2 million , respectively, of such balances that have been reclassified from Accounts Receivable. See discussion of Agency segment Notes Receivable below. Under the standard terms and conditions of our auction and private sales, we are not obligated to pay the consignor for property that has not been paid for by the buyer. If a buyer defaults on payment, the sale may be cancelled, and the property will be returned to the consignor. Alternatively, the consignor may reoffer the property at one of our future auctions or negotiate a private sale with us acting as their agent. In certain instances, and subject to management approval under our internal corporate governance policy, we may pay the net sale proceeds to the consignor before payment is collected from the buyer and/or we may allow the buyer to take possession of the property before making payment. In situations when the buyer takes possession of the property before making payment, we are liable to the seller for the net sales proceeds whether or not the buyer makes payment. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Accounts Receivable (net) included $85.3 million , $90.1 million , and $104.5 million , respectively, related to situations when we paid the consignor all or a portion of the net sales proceeds before payment was collected from the buyer. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Accounts Receivable (net) also included $33.4 million , $76.3 million , and $33.9 million , respectively, related to situations when we allowed the buyer to take possession of the property before making payment. Notes Receivable (Sotheby's Financial Services) —SFS makes term loans secured by artworks that are not presently intended for sale, allowing us to establish or enhance mutually beneficial relationships with art collectors. Term loans may also generate future auction or private sale consignments and/or purchases. In certain situations, term loans are made to refinance receivables generated by the auction and private sale purchases of our clients. Term loans normally have initial maturities of up to two years and typically carry a variable market rate of interest. To a much lesser extent, SFS also makes consignor advances secured by artworks that are contractually committed, in the near term, to be offered for sale through our Agency segment. Consignor advances allow sellers to receive funds upon consignment for an auction or private sale that will occur up to one year in the future and normally have short-term maturities. The lending activities of SFS are predominantly funded with borrowings drawn from a dedicated revolving credit facility. To a lesser extent, cash balances are also used to fund a portion of the loans made by SFS, as appropriate. See Note 7 for information related to the dedicated revolving credit facility for SFS. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , the net Notes Receivable balance of SFS was $651.4 million , $675.1 million , and $629.7 million , respectively. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , the total net Notes Receivable balance of SFS included $85.6 million , $88.7 million , and $104.4 million , respectively, of term loans issued by SFS to refinance client auction and private sale purchases. For the six months ended June 30, 2017 and 2016 , SFS issued $3.8 million and $9.3 million , respectively, of such loans. These loans are accounted for as non-cash transfers between Accounts Receivable (net) and Notes Receivable (net) and are, therefore, not reflected as the funding of Notes Receivable within Investing Activities in our Condensed Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such Notes Receivable is classified within Operating Activities in our Condensed Consolidated Statements of Cash Flows. For the six months ended June 30, 2017 and 2016 , such repayments totaled $6.9 million and $13.7 million , respectively. The repayment of secured loans can be adversely impacted by a decline in the art market in general or in the value of the collateral, which is concentrated within certain collecting categories. In addition, in situations when there are competing claims on the collateral and/or when a borrower becomes subject to bankruptcy or insolvency laws, our ability to realize on our collateral may be limited or delayed. We aim to mitigate the risk associated with a potential devaluation in our collateral by targeting a 50% loan-to-value ("LTV") ratio (i.e., the principal loan amount divided by the low auction estimate of the collateral). However, loans may also be made with LTV ratios between 51% and 60% , and, in rare circumstances, loans may be made at an initial LTV ratio higher than 60% . The revolving credit facility for SFS permits borrowings of up to 85% of the portion of any loan that does not exceed a 60% LTV ratio. The LTV ratio of certain loans may increase above the 50% target due to a decrease in the low auction estimates of the collateral. The revaluation of term loan collateral is performed by our specialists on an annual basis or more frequently if there is a material change in the circumstances related to the loan, the value of the collateral, the disposal plans for the collateral, or if an event of default occurs. We believe that the LTV ratio is a critical credit quality indicator for the secured loans made by SFS. The table below provides the aggregate LTV ratio for the SFS loan portfolio as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Secured loans $ 651,361 $ 675,109 $ 629,681 Low auction estimate of collateral $ 1,445,847 $ 1,405,856 $ 1,296,760 Aggregate LTV ratio 45 % 48 % 49 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Secured loans with an LTV ratio above 50% $ 209,483 $ 270,111 $ 316,170 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 375,933 $ 486,973 $ 571,922 Aggregate LTV ratio of secured loans with an LTV ratio above 50% 56 % 55 % 55 % The table below provides other credit quality information regarding secured loans made by SFS as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Total secured loans $ 651,361 $ 675,109 $ 629,681 Loans past due $ 108,560 $ 90,508 $ 3,952 Loans more than 90 days past due $ 41,448 $ 158 $ 167 Non-accrual loans $ — $ 158 $ 167 Impaired loans $ — $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — $ — Allowance for credit losses based on historical data 1,290 1,270 1,373 Total allowance for credit losses - secured loans $ 1,290 $ 1,270 $ 1,373 We consider a loan to be past due when principal payments are not paid by the contractual maturity date. Typically, a loan becomes past due only for a short period of time during which either the loan is renewed or collateral is sold to satisfy the borrower's obligations. As of June 30, 2017 , $108.6 million of the net Notes Receivable balance was past due, of which $41.4 million was more than 90 days past due. The collateral securing these past due loans has a low auction estimate of approximately $232.5 million resulting in an LTV ratio of approximately 47% . We are continuing to accrue interest on all past due loans. In consideration of expected loan renewals, loan payments, and $33.3 million in collateral sales to date related to loans that are more than 90 days past due for which the proceeds have not yet been collected from the buyer, as well as the value of the remaining collateral and our current collateral disposal plans, we believe that the principal and interest amounts owed for these past due loans will be collected. A non-accrual loan is a loan for which future Finance revenue is not recorded due to our determination that it is probable that future interest on the loan is not collectible. Any cash receipts subsequently received on non-accrual loans are first applied to reduce the recorded principal balance of the loan, with any proceeds in excess of the principal balance then applied to interest owed by the borrower. The recognition of Finance revenue may resume on a non-accrual loan if sufficient additional collateral is provided by the borrower or if we become aware of other circumstances that indicate that it is probable that the borrower will make future interest payments on the loan. As of June 30, 2017 , there were no non-accrual loans outstanding. As of December 31, 2016 and June 30, 2016 , there was a $0.2 million non-accrual loan outstanding. This loan was written-off in the second quarter of 2017. A loan is considered to be impaired when we determine that it is probable that a portion of the principal and interest owed by the borrower will not be recovered after taking into account the estimated realizable value of the collateral securing the loan, as well as the ability of the borrower to repay any shortfall between the value of the collateral and the amount of the loan. If a loan is considered to be impaired, Finance revenue is no longer recognized and bad debt expense is recorded for any principal or accrued interest that is deemed uncollectible. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , there were no impaired loans outstanding. During the period January 1, 2017 to June 30, 2017 , activity related to the Allowance for Credit Losses was as follows (in thousands of dollars): Allowance for credit losses as of January 1, 2017 $ 1,270 Change in loan loss provision 20 Allowance for credit losses as of June 30, 2017 $ 1,290 As of June 30, 2017 , unfunded commitments to extend additional credit through SFS were approximately $26 million . Notes Receivable (Agency Segment) —We are obligated under the terms of certain auction guarantees to advance a portion of the guaranteed amount prior to the auction. Such auction guarantee advances are recorded on our Condensed Consolidated Balance Sheets within Notes Receivable (net). As of June 30, 2017 and June 30, 2016 , there were no auction guarantee advances outstanding. As of December 31, 2016 , there were $1 million of auction guarantee advances outstanding. See Note 16 for additional information related to auction guarantees. As discussed above, in the limited circumstances when the payment due date for an auction or private sale receivable is extended to a date that is beyond one year from the sale date, if the consignor does not provide matched payment terms, the receivable balance is reclassified from Accounts Receivable (net) to Notes Receivable (net) on our Condensed Consolidated Balance Sheets. As of June 30, 2017 and December 31, 2016 , Notes Receivable (net) within the Agency segment included $2.6 million and $7.5 million , respectively, of such amounts reclassified from Accounts Receivable (net), against which we hold approximately $3.1 million of collateral. As of June 30, 2016 , Notes Receivable (net) within the Agency segment included $12.2 million of such reclassified amounts, against which we held $6.6 million of collateral. These Notes Receivable are accounted for as non-cash transfers between Accounts Receivable (net) and Notes Receivable (net) and are, therefore, not reflected as the funding of Notes Receivable within Investing Activities in our Condensed Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such Notes Receivable is classified within Operating Activities in our Condensed Consolidated Statements of Cash Flows. For the six months ended June 30, 2017 and 2016, such repayments totaled $5 million and $7.5 million , respectively. Under certain circumstances, we provide loans to certain art dealers to finance the purchase of works of art. In these situations, we acquire a partial ownership interest or a security interest in the purchased property in addition to providing the loan. Upon the eventual sale of the property acquired, the loan is repaid. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , such loans totaled $3.8 million , $3.8 million , and $4.1 million , respectively. We are no longer accruing interest with respect to one of these loans with a balance of $2.1 million , but management believes that this balance is collectible. Notes Receivable (Other) —In the second quarter of 2013 , we sold our interest in an equity method investee for $4.3 million . The sale price was funded by an upfront cash payment of $0.8 million and the issuance of a $3.5 million unsecured loan. This loan had a variable market rate of interest, required monthly payments during the loan term, and was initially scheduled to mature in December 2018. As of December 31, 2016 and June 30, 2016 , the carrying value of this loan was approximately $2.1 million and $2.3 million , respectively. The entire remaining balance of the loan was repaid in the second quarter of 2017. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill —For the six months ended June 30, 2017 and 2016 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Agency All Other Total Agency All Other Total Beginning balance as of December 31 $ 43,878 $ 6,151 $ 50,029 $ 13,621 $ — $ 13,621 Goodwill acquired (see Note 19) — — — 28,339 6,151 34,490 Foreign currency exchange rate changes 322 — 322 (195 ) — (195 ) Ending balance as of June 30 $ 44,200 $ 6,151 $ 50,351 $ 41,765 $ 6,151 $ 47,916 Intangible Assets —As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2017 December 31, 2016 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 19) 8 years 10,800 10,800 10,800 Non-compete agreements - AAP (see Note 19) 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,125 1,125 — Total intangible assets subject to amortization 14,985 14,985 13,860 Accumulated amortization (2,902 ) (1,916 ) (930 ) Total amortizable intangible assets (net) 12,083 13,069 12,930 Total intangible assets (net) $ 12,407 $ 13,393 $ 13,254 (a) Relates to a license obtained in conjunction with the purchase of a retail wine business in 2008 . (b) Relates to a database containing historic information concerning repeat sales of works of art. This database was acquired along with the associated business in the third quarter of 2016. For the three and six months ended June 30, 2017 , amortization expense related to intangible assets was approximately $0.5 million and $1 million , respectively. For the three and six months ended June 30, 2016 , amortization expense related to intangible assets was approximately $0.4 million and $0.9 million , respectively. The estimated aggregate amortization expense for the remaining useful lives of intangible assets subject to amortization during the five -year period succeeding the June 30, 2017 balance sheet date are as follows (in thousands of dollars): Period Amount July 2017 to June 2018 $ 1,972 July 2018 to June 2019 $ 1,972 July 2019 to June 2020 $ 1,972 July 2020 to June 2021 $ 1,972 July 2021 to June 2022 $ 1,717 |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 6 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Defined Benefit Pension Plan | Defined Benefit Pension Plan We sponsor a defined benefit pension plan in the U.K. (the "U.K. Pension Plan"). Effective April 1, 2004, participation in the U.K. Pension Plan was closed to new employees. On April 30, 2016, after the completion of a statutory consultation process, the U.K. Pension Plan was closed to accrual of future service costs for active participants, who became participants in a defined contribution plan. For the three and six months ended June 30, 2017 and 2016 , the components of the net credits related to the U.K. Pension Plan were as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Service cost $ — $ 289 $ — $ 1,153 Interest cost 1,999 2,611 3,937 5,215 Expected return on plan assets (3,514 ) (4,733 ) (6,921 ) (9,454 ) Prior service cost 15 — 30 — Amortization of actuarial loss 280 — 553 — Amortization of prior service cost (23 ) — (46 ) — Net pension credit $ (1,243 ) $ (1,833 ) $ (2,447 ) $ (3,086 ) |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Instruments [Abstract] | |
Debt | Debt Revolving Credit Facilities —We are party to a credit agreement with an international syndicate of lenders, which provides for separate dedicated revolving credit facilities for the Agency segment (the "Agency Credit Facility") and SFS (the "SFS Credit Facility") (the "Credit Agreement"). The maturity date of the Credit Agreement is August 22, 2020. The Agency Credit Facility and the SFS Credit Facility are asset-based revolving credit facilities which may be used primarily for the working capital and other general corporate needs of each segment, including for the funding of SFS loans. The Credit Agreement allows the proceeds from borrowings under each of the revolving credit facilities to be transferred between the Agency segment and SFS. The maximum aggregate borrowing capacity of the Credit Agreement, which is subject to a borrowing base, is approximately $1.335 billion , with $300 million committed to the Agency segment and $1.035 billion committed to SFS. The borrowing capacity of the Agency Credit Facility includes a $50 million incremental revolving credit facility with higher advance rates against certain assets and higher commitment and borrowing costs (the "Incremental Facility"). On July 25, 2017, the maturity date of the Incremental Facility was extended by one year to August 22, 2018, in accordance with the terms of the Credit Agreement. This maturity date may be extended for an additional 365 days on an annual basis with the consent of the lenders who agree to extend their commitments under the Incremental Facility. The Credit Agreement has a sub-limit of $400 million for foreign currency borrowings, with up to $50 million available for foreign currency borrowings under the Agency Credit Facility and up to $350 million available for foreign currency borrowings under the SFS Credit Facility. The Credit Agreement also includes an accordion feature, which allows us to seek an increase to the borrowing capacity of the Credit Agreement until February 23, 2020 by an amount not to exceed $150 million in the aggregate. Though new commitments would need to be obtained, the uncommitted accordion feature permits us to seek an increase to the aggregate commitments of the Credit Agreement under an expedited arrangement process. The borrowing base under the Agency Credit Facility is determined by a calculation that is primarily based upon a percentage of the carrying values of certain auction guarantee advances (see Note 4 ), a percentage of the carrying value of certain inventory, a percentage of the carrying value of certain extended payment term receivables arising from auction or private sale transactions (see Note 4 ), and the fair value of certain of our trademarks. The borrowing base under the Incremental Facility is determined by a calculation that is based on a percentage of the carrying values of certain inventory and the fair value of certain of our trademarks. The borrowing base under the SFS Credit Facility is determined by a calculation that is primarily based upon a percentage of the carrying value of certain SFS loans (see Note 4 ) and the fair value of certain of our trademarks. The obligations under the Credit Agreements are cross-guaranteed and cross-collateralized. Domestic borrowers are jointly and severally liable for all obligations under the Credit Agreement and, subject to certain limitations, borrowers in the U.K. and Sotheby's Hong Kong Limited, are jointly and severally liable for all obligations of the foreign borrowers under the Credit Agreement. In addition, the obligations of the borrowers under the Credit Agreement are guaranteed by certain of their subsidiaries. Our obligations under the Credit Agreement are secured by liens on all or substantially all of the personal property of the entities that are borrowers and guarantors under the Credit Agreement. The Credit Agreement contains certain customary affirmative and negative covenants including, but not limited to, limitations on capital expenditures, a $600 million limitation on net outstanding auction guarantees (i.e., auction guarantees less the impact of related risk and reward sharing arrangements), and limitations on the use of proceeds from borrowings under the Credit Agreement. The Credit Agreement does not limit dividend payments and common stock repurchases provided that, both before and after giving effect thereto: (i) there are no events of default, (ii) the aggregate available borrowing capacity equals or exceeds $100 million , and (iii) the Liquidity Amount, as defined in the Credit Agreement, equals or exceeds $200 million . The Credit Agreement also contains certain financial covenants, which are only applicable during certain defined compliance periods. These financial covenants were not applicable for the twelve month period ended June 30, 2017 . Since August 2009, we have incurred aggregate fees of approximately $21.7 million in conjunction with the establishment of and subsequent amendments to the Credit Agreement. These fees are being amortized on a straight-line basis through the August 22, 2020 maturity date of the Credit Agreement. As of June 30, 2017 , $6.8 million of such unamortized fees are included within Other Long-Term Assets on our Condensed Consolidated Balance Sheets. The following tables summarize information related to the Credit Agreement as of and for the periods ended June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): As of and for the three and six months ended June 30, 2017 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 146,097 $ 546,108 $ 692,205 Borrowings outstanding $ — $ 531,500 $ 531,500 Available borrowing capacity (a) $ 146,097 $ 14,608 $ 160,705 Average Borrowings Outstanding: Three months ended June 30, 2017 $ — $ 541,874 $ 541,874 Six months ended June 30, 2017 $ — $ 552,130 $ 552,130 Borrowing Costs - Three Months Ended June 30, 2017: Interest $ — (b) $ 4,407 (c) $ 4,407 Fees 685 (b) 671 (c) 1,356 Total $ 685 $ 5,078 $ 5,763 Borrowing Costs - Six Months Ended June 30, 2017: Interest $ — (b) $ 8,725 (c) $ 8,725 Fees 1,364 (b) 1,390 (c) 2,754 Total $ 1,364 $ 10,115 $ 11,479 As of and for the year ended December 31, 2016 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 165,443 $ 569,021 $ 734,464 Borrowings outstanding $ — $ 565,000 $ 565,000 Available borrowing capacity (a) $ 165,443 $ 4,021 $ 169,464 Average borrowings outstanding $ — $ 534,433 $ 534,433 As of and for the three and six months ended June 30, 2016 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 202,699 $ 529,100 $ 731,799 Borrowings outstanding $ — $ 523,500 $ 523,500 Available borrowing capacity (a) $ 202,699 $ 5,600 $ 208,299 Average Borrowings Outstanding: Three months ended June 30, 2016 $ — $ 518,544 $ 518,544 Six months ended June 30, 2016 $ — $ 529,129 $ 529,129 Borrowing Costs - Three Months Ended June 30, 2016: Interest $ — (b) $ 3,457 (c) $ 3,457 Fees 715 (b) 696 (c) 1,411 Total $ 715 $ 4,153 $ 4,868 Borrowing Costs - Six Months Ended June 30, 2016: Interest $ — (b) $ 7,130 (c) $ 7,130 Fees 1,388 (b) 1,417 (c) 2,805 Total $ 1,388 $ 8,547 $ 9,935 (a) The available borrowing capacity is calculated as the borrowing base less borrowings outstanding. (b) Borrowing costs related to the Agency Credit Facility, which include interest and fees, are reflected in our Condensed Consolidated Income Statements as Interest Expense. See the table below for additional information related to Interest Expense associated with the Agency Credit Facility. (c) Borrowing costs related to the SFS Credit Facility are reflected in our Condensed Consolidated Income Statements within Cost of Finance Revenues. For the three and six months ended June 30, 2017 and 2016, the weighted average cost of borrowings related to the SFS Credit Facility was approximately 3.7% and 3.2% , respectively. Long-Term Debt —As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Long-Term Debt consisted of the following (in thousands of dollars): June 30, December 31, June 30, York Property Mortgage, net of unamortized debt issuance costs of $5,050, $5,555, and $6,060 $ 305,907 $ 309,212 $ 312,398 2022 Senior Notes, net of unamortized debt issuance costs of $3,320, $3,642, and $3,963 296,680 296,358 296,037 Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010, $1,010, and $1,010 (38,825 ) (6,629 ) (6,491 ) Total Long-Term Debt, net $ 563,762 $ 598,941 $ 601,944 See the captioned sections below for information related to the York Property Mortgage and the 2022 Senior Notes. York Property Mortgage —On February 6, 2009, we purchased the land and building located at 1334 York Avenue, New York, New York (the "York Property") from RFR Holding Corp. ("RFR") for a purchase price of $370 million . The York Property is home to our sole North American auction salesroom and principal North American exhibition space, including S|2, our private sale exhibition gallery. The York Property is also home to the U.S. operations of SFS, as well as our corporate offices. We financed the $370 million purchase price through an initial $50 million cash payment made in conjunction with the signing of the related purchase and sale agreement on January 11, 2008, an $85 million cash payment made when the purchase was consummated on February 6, 2009, and the assumption of a $235 million mortgage that carried an initial annual rate of interest of approximately 5.6% (the "Original York Property Mortgage"). The Original York Property Mortgage was due to mature on July 1, 2035, but had an optional pre-payment date of July 1, 2015, after which the annual rate of interest was scheduled to increase to 10.6% . On July 1, 2015, we entered into a seven -year, $325 million mortgage loan (the "York Property Mortgage") to refinance the Original York Property Mortgage. After the repayment of the Original York Property Mortgage and the funding of all closing costs, reserves, and expenses, we received net cash proceeds of approximately $98 million . The York Property Mortgage bears interest based on the one -month LIBOR rate (the "LIBOR rate") plus a spread of 2.25% and is being amortized based on a 25 -year mortgage-style amortization schedule over its seven -year term. On June 21, 2017, the York Property Mortgage was amended to reduce the minimum net worth that Sotheby's is required to maintain from $425 million to $325 million in order to provide continued flexibility regarding potential future share repurchases. In conjunction with this amendment, on July 3, 2017, we made a partial prepayment of $32 million to reduce the outstanding principal balance of the York Property Mortgage, and agreed to make annual prepayments beginning in July 2018 and continuing through July 2021 that are not to exceed $25 million in the aggregate during that period. The $32 million payment made on July 3, 2017 was funded with $25 million from existing cash balances and $7 million from a restricted cash management account associated with the York Property Mortgage. Any prepayments made during the period July 2018 to July 2021 will also be funded from the restricted cash management account. See below for information related to the cash management account associated with the York Property Mortgage. In connection with the York Property Mortgage, we entered into interest rate protection agreements secured by the York Property, consisting of a two -year interest rate swap effective as of July 1, 2015 and a five -year interest rate collar effective as of July 1, 2017. In conjunction and concurrent with the June 2017 amendment to the York Property Mortgage, the notional amount of the interest rate collar was reduced by $57 million to reflect: (i) the $32 million prepayment made on the York Property Mortgage on July 3, 2017 and (ii) potential annual prepayments of $6.25 million each beginning in July 2018 and continuing through July 2021. See Note 8 for additional information related to the interest rate protection agreements. The York Property, the York Property Mortgage, and the related interest rate protection agreements are held by 1334 York, LLC (the "LLC"), a separate legal entity of Sotheby's that maintains its own books and records and whose results are ultimately consolidated into our Condensed Consolidated Financial Statements. The LLC is the sole owner and lessor of the York Property. The LLC presently leases the York Property to Sotheby's, Inc., which is also controlled by Sotheby's. The assets of the LLC are not available to satisfy the obligations of our other affiliates or any other entity. The loan agreement governing the York Property Mortgage contains the following financial covenants, which are subject to additional terms and conditions as provided in the underlying loan agreement: • As of July 1, 2020, the LTV ratio (i.e., the principal balance of the York Property Mortgage divided by the appraised value of the York Property) may not exceed 65% (the "Maximum LTV") based on the then-outstanding principal balance of the York Property Mortgage. If the LTV ratio exceeds the Maximum LTV, the LLC may, at its option, post cash or a letter of credit or pay down the York Property Mortgage without any prepayment penalty or premium, in an amount that will cause the LTV ratio not to exceed the Maximum LTV. • At all times during the term of the York Property Mortgage, the Debt Yield will not be less than 8.5% (the "Minimum Debt Yield"). The Debt Yield is calculated by dividing the annual net operating income of the LLC, which primarily consists of lease income from Sotheby's, Inc. (calculated on a cash basis), by the outstanding principal balance of the York Property Mortgage. If the Debt Yield falls below the Minimum Debt Yield, the LLC has the option to post cash or a letter of credit or prepay the York Property Mortgage without any prepayment penalty or premium, in an amount that will cause the Debt Yield to exceed the Minimum Debt Yield. • If Sotheby's corporate credit rating from Standard & Poor’s Rating Services ("S&P") is downgraded to "BB-", the lender may require that the LLC establish cash management accounts (the "Cash Management Accounts") under the lender's control for potential monthly debt service, insurance, and tax payments. If the rating is downgraded to "B+" or "B", the lender may require the LLC to deposit a certain amount of debt service into the Cash Management Accounts (approximately 6 and 12 months of debt service, respectively). If the rating is downgraded to lower than "B", the LLC must make principal payments on the mortgage such that the LTV ratio does not exceed 65% . On February 9, 2016, our corporate credit rating from S&P was downgraded to "BB-" from "BB". As a result, a Cash Management Account was established under the control of the lender for monthly debt service, insurance, and tax payments. The lender will retain any excess cash after debt service, insurance, and taxes as security. As of June 30, 2017 , December 31, 2016, and June 30, 2016, the Cash Management Account had a balance of $7.4 million , $4.6 million , and $2.3 million , respectively, which is reflected within Restricted Cash on our Condensed Consolidated Balance Sheets. On July 3, 2017, $7 million from the Cash Management Account was used to fund a portion of the $32 million prepayment of the York Property Mortgage discussed above. • Prior to June 21, 2017, Sotheby's was required to maintain a net worth of at least $425 million , subject to a cure period. As discussed above, on June 21, 2017, the York Property Mortgage was amended to reduce this $425 million requirement to $325 million . As of June 30, 2017 , the fair value of the York Property Mortgage approximated its book value due to the variable interest rate associated with the mortgage. The fair value measurement is considered to be a Level 2 fair value measurement in the fair value hierarchy as per ASC 820, Fair Value Measurements . 2022 Senior Notes —On September 27, 2012, we issued $300 million aggregate principal amount of 5.25% Senior Notes, due October 1, 2022 (the "2022 Senior Notes"). The 2022 Senior Notes were offered only to qualified institutional buyers in accordance with Rule 144A and to non-U.S. Persons under Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). Holders of the 2022 Senior Notes do not have registration rights, and the 2022 Senior Notes have not been and will not be registered under the Securities Act. The net proceeds from the issuance of the 2022 Senior Notes were approximately $294.6 million , after deducting fees paid to the initial purchasers, and were principally used to retire $80 million of unsecured debt that was due in June 2015 and $182 million of convertible debt that was due in June 2013. The 2022 Senior Notes are guaranteed, jointly and severally, on a senior unsecured basis by certain of our existing and future domestic subsidiaries to the extent and on the same basis that such subsidiaries guarantee borrowings under the Credit Agreement. Interest on the 2022 Senior Notes is payable semi-annually in cash on April 1 and October 1 of each year. We may redeem the 2022 Senior Notes, in whole or in part, on or after October 1, 2017, at specified redemption prices set forth in the underlying indenture, plus accrued and unpaid interest to, but excluding, the redemption date. Prior to October 1, 2017, we may redeem the 2022 Senior Notes, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus a premium equal to the greater of 1% of the principal amount of the 2022 Senior Notes and a make-whole premium (as defined in the underlying indenture). The 2022 Senior Notes are not callable by holders unless we are in default under the terms of the underlying indenture. As of June 30, 2017 , the $300 million principal amount of the 2022 Senior Notes had a fair value of approximately $301.5 million based on a broker quoted price derived via a pricing model using observable and unobservable inputs. As such, this fair value measurement is considered to be a Level 3 fair value measurement in the fair value hierarchy as per ASC 820. Future Principal and Interest Payments —The aggregate future principal and interest payments due under the Credit Agreement, the York Property Mortgage, and the 2022 Senior Notes during the five-year period after June 30, 2017 are as follows (in thousands of dollars): Period Amount July 2017 to June 2018 $ 65,337 July 2018 to June 2019 $ 39,362 July 2019 to June 2020 $ 39,203 July 2020 to June 2021 $ 570,569 July 2021 to June 2022 $ 38,927 The table above assumes that the annual interest rate for the York Property Mortgage will be at the interest rate collar's floor rate of 4.167% for the remainder of the mortgage term. Interest Expense —For the three and six months ended June 30, 2017 and 2016 , Interest Expense consisted of the following (in thousands of dollars): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Agency Credit Facility: Amendment and arrangement fees $ 288 $ 278 $ 576 $ 556 Commitment fees 397 437 788 832 Sub-total 685 715 1,364 1,388 York Property Mortgage 2,715 2,774 5,418 5,562 2022 Senior Notes 4,106 4,106 8,204 8,204 Other interest expense 66 43 119 30 Total Interest Expense $ 7,572 $ 7,638 $ 15,105 $ 15,184 In the table above, Interest Expense related to the York Property Mortgage and the 2022 Senior Notes includes the amortization of debt issuance costs. Borrowing costs related to the SFS Credit Facility are reflected within Cost of Finance Revenues in our Condensed Consolidated Income Statements. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Derivative Financial Instruments Designated as Hedging Instruments —The following tables present fair value information related to the derivative financial instruments designated as hedging instruments as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): Assets Liabilities June 30, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swaps Other Current Assets $ 308 N/A $ — Interest rate collar N/A — Other Current Liabilities 1,550 Interest rate collar N/A — Other Long-Term Liabilities 3,257 Total cash flow hedges 308 — 4,807 Net Investment Hedges: Foreign exchange contracts N/A — Other Current Liabilities 2,176 Total $ 308 $ 6,983 Assets Liabilities December 31, 2016 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swaps Other Current Assets $ 82 Other Current Liabilities $ 163 Interest rate collar N/A — Other Long-Term Liabilities 5,952 Total cash flow hedges 82 6,115 Net Investment Hedges: Foreign exchange contracts Other Current Assets 30,258 N/A — Total $ 30,340 $ 6,115 Assets Liabilities June 30, 2016 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap N/A $ — Other Current Liabilities $ 1,341 Interest rate collar N/A — Other Long-Term Liabilities 16,194 Total cash flow hedges — 17,535 Net Investment Hedges: Foreign exchange contracts Other Current Assets 12,828 Other Current Liabilities 315 Total $ 12,828 $ 17,850 During the three months ended June 30, 2017, we settled a derivative financial instrument designated as a net investment hedge with a notional value of $13.6 million and realized a loss of $0.1 million . During the six months ended June 30, 2017, we settled derivative financial instruments designated as net investment hedges with an aggregate notional value of $213.8 million and realized a net gain of $29.1 million . Realized gains and losses related to the settlement of derivative financial instruments designated as net investment hedges are reflected on our Condensed Consolidated Balance Sheets within Accumulated Other Comprehensive Loss. The following tables summarize the effect of the derivative financial instruments designated as hedging instruments on our Condensed Consolidated Income Statements and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion Classification of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion Three Months Ended June 30, 2017 2016 2017 2016 2017 2016 Cash Flow Hedges: Interest rate swaps $ (7 ) $ (290 ) Interest Expense $ (50 ) $ 216 $ — $ — Interest rate collar (527 ) (1,873 ) Non-operating (expense) income — — 622 — Total cash flow hedges (534 ) (2,163 ) (50 ) 216 622 — Net Investment Hedges: Foreign exchange contracts (1,454 ) 5,773 N/A — — — — Total $ (1,988 ) $ 3,610 $ (50 ) $ 216 $ 622 $ — Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion Classification of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion Six Months Ended June 30, 2017 2016 2017 2016 2017 2016 Cash Flow Hedges: Interest rate swaps $ 134 $ (1,083 ) Interest Expense $ 35 $ 439 $ — $ — Interest rate collar 85 (5,792 ) Non-operating (expense) income — — 622 — Total cash flow hedges 219 (6,875 ) 35 439 622 — Net Investment Hedges: Foreign exchange contracts (2,078 ) 5,773 N/A — — — — Total $ (1,859 ) $ (1,102 ) $ 35 $ 439 $ 622 $ — See the captioned sections below for information related to derivative financial instruments designated as cash flow hedges or as net investment hedges. Derivative Financial Instruments Designated as Cash Flow Hedges —On July 1, 2015, we entered into a seven -year, $325 million mortgage loan to refinance the previous mortgage on the York Property. The York Property Mortgage bears interest based on the one -month LIBOR rate plus a spread of 2.25% and is being amortized based on a 25 -year mortgage-style amortization schedule over its seven -year term. On June 21, 2017, the York Property Mortgage was amended to reduce the minimum net worth that Sotheby's is required to maintain from $425 million to $325 million in order to provide continued flexibility regarding potential future share repurchases. In conjunction with this amendment, on July 3, 2017, we made a partial prepayment of $32 million to reduce the outstanding principal balance of the York Property Mortgage, and agreed to make annual prepayments beginning in July 2018 and continuing through July 2021 that are not to exceed $25 million in the aggregate during that period. The $32 million payment made on July 3, 2017 was funded with $25 million from existing cash balances and $7 million from a restricted cash management account related to the mortgage. Any prepayments made during the period July 2018 to July 2021 will also be funded from the restricted cash management account. See Note 7 for information on the restricted cash management account related to the York Property Mortgage. In connection with the York Property Mortgage, we entered into interest rate protection agreements secured by the York Property, consisting of a two -year interest rate swap (the "Mortgage Swap"), effective as of July 1, 2015 , and a five -year interest rate collar (the "Mortgage Collar"), effective as of July 1, 2017 . These interest rate protection agreements effectively fix the LIBOR rate on the York Property Mortgage at an annual rate equal to 0.877% for the first two years, and then at an annual rate of no less than 1.917% , but no more than 3.75% , for the remainder of the seven -year term. After taking into account the interest rate protection agreements, the annual interest rate for the first two years of the York Property Mortgage was approximately 3.127% and then will be between a floor of 4.167% and a cap of 6% for the remaining seven -year term. In conjunction and concurrent with the June 2017 amendment to the York Property Mortgage, the notional amount of the Mortgage Collar was reduced by $57 million to reflect: (i) the $32 million prepayment made on the York Property Mortgage on July 3, 2017 and (ii) potential annual prepayments of $6.25 million each beginning in July 2018 and continuing through July 2021. The reduced notional amount of the Mortgage Collar relates to the previously forecasted interest payments that are no longer probable of occurring as a result of the June 2017 amendment to the York Property Mortgage. This reduction in the notional amount of the Mortgage Collar resulted in a $0.6 million (net of tax) reclassification from Accumulated Other Comprehensive Loss into Net Income in the second quarter of 2017. As of June 30, 2017 , the notional value of the Mortgage Swap was $311 million and the notional value of the Mortgage Collar was $278.3 million . As of June 30, 2017 , the Mortgage Swap and the Mortgage Collar each have a notional amount that is no greater than the applicable forecasted principal balance of the York Property Mortgage. The York Property, the York Property Mortgage, and the related interest rate protection agreements are held by 1334 York, LLC, a separate legal entity of Sotheby's that maintains its own books and records and whose results are ultimately consolidated into our financial statements. On November 21, 2016, we entered into a two-year interest rate swap agreement (the “SFS Swap”) to eliminate the variability in expected cash outflows associated with the one-month LIBOR indexed interest payments owed on $63 million of SFS Credit Facility borrowings. As of June 30, 2017 , the notional value of the SFS Swap was $63 million . See Note 7 for additional information related to the SFS Credit Facility. At their inception, the Mortgage Swap, the Mortgage Collar, and the SFS Swap (collectively, the "Cash Flow Hedges") were each individually designated as cash flow hedges of the risk associated with the variability in expected cash outflows related to the one-month LIBOR-indexed interest payments owed on their respective debt instruments. Accordingly, to the extent that each of the Cash Flow Hedges is effective, any unrealized gains and losses related to changes in their fair value are recorded to Accumulated Other Comprehensive Loss on our Condensed Consolidated Balance Sheets and then reclassified to Interest Expense in our Condensed Consolidated Income Statements in the same period that interest expense related to the underlying debt instruments is recorded. Any hedge ineffectiveness is immediately recognized in Net Income. In addition, if any of the forecasted transactions associated with the Cash Flow Hedges are no longer probable of occurring, any related amounts previously recorded in Accumulated Other Comprehensive Loss on our Condensed Consolidated Balance Sheets would be immediately reclassified into Net Income. As discussed above, certain previously forecasted interest payments associated with the Mortgage Collar became no longer probable of occurring in the second quarter of 2017 and, as a result, $0.6 million (net of tax) of the amount previously recorded in Accumulated Other Comprehensive Loss was immediately reclassified into Net Income. Management performs a quarterly assessment to determine whether each of the Cash Flow Hedges continues to be highly effective in hedging the risk associated with the variability in expected cash outflows related to the one-month LIBOR-indexed interest payments on their respective debt instruments. As of June 30, 2017, each of the Cash Flow hedges, including the Mortgage Collar, as amended, is expected to continue to be highly effective in hedging the risk associated with the variability in expected cash outflows related to the one-month LIBOR-indexed interest payments on their respective debt instruments. The assets and liabilities associated with the Cash Flow Hedges have been designated as Level 2 fair value measurements within the fair value hierarchy provided by ASC 820. Level 2 fair value measurements have pricing inputs other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Level 2 fair value measurements may be determined through the use of models or other valuation methodologies. The fair value of the Mortgage Swap is based on a discounted cash flow methodology using the contractual terms of the instrument and observable LIBOR-curve rates that are consistent with the timing of the interest payments related to the York Property Mortgage. The fair value of the Mortgage Collar is based on an option pricing model using observable LIBOR-curve rates for each forecasted monthly settlement, with the projected cash flows discounted using the contractual terms of the instrument. The fair value of the SFS Swap is based on a discounted cash flow methodology using the contractual terms of the instrument and observable LIBOR-curve rates that are consistent with the timing of the interest payments related to the SFS Credit Facility. Derivative Financial Instruments Designated as Net Investment Hedges —We are exposed to variability in the U.S. Dollar equivalent of the net investments in our foreign subsidiaries and, by extension, the U.S. Dollar equivalent of any foreign earnings repatriated to the U.S. due to potential changes in foreign currency exchange rates. As a result, we regularly enter into foreign currency forward exchange contracts to hedge the net investments in our foreign subsidiaries from which we expect to repatriate earnings to the U.S. As of June 30, 2017 , the aggregate notional value of our outstanding net investment hedge contracts was $49.7 million . We use the forward rate method to assess the effectiveness of our net investment hedges. Under the forward rate method, if both the notional amount of the derivative designated as a hedge of a net investment in a foreign subsidiary equals the portion of the net investment designated as being hedged and the derivative relates solely to the foreign exchange rate between the functional currency of the hedged net investment and the investor’s functional currency, then all changes in fair value of the derivative are reported in the cumulative translation adjustment accounts within Accumulated Other Comprehensive Loss on our Condensed Consolidated Balance Sheets. The foreign currency forward exchange contracts designated as net investment hedges are considered Level 2 fair value measurements within the fair value hierarchy provided by ASC 820. Level 2 fair value measurements have pricing inputs other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value may be determined through the use of models or other valuation methodologies. The fair value of these foreign currency forward exchange contracts is based on the estimated amount to settle the contracts using applicable market exchange rates as of the balance sheet date. Derivative Financial Instruments Not Designated as Hedging Instruments —We also utilize forward contracts to hedge cash flow exposures related to foreign currency exchange rate movements arising from short-term foreign currency denominated intercompany balances and, to a much lesser extent, foreign currency denominated client payable balances, as well as foreign currency denominated auction guarantee obligations. Such forward exchange contracts are typically short-term with settlement dates less than six months from their inception. These instruments are not designated as hedging instruments for accounting purposes. Accordingly, changes in the fair value of these instruments are recognized in our Condensed Consolidated Income Statements in Non-Operating Income. As of June 30, 2017 , the notional value of outstanding forward exchange contracts not designated as hedging instruments was $197.9 million . Notional values do not quantify risk or represent our assets or liabilities, but are used to calculate cash settlements under outstanding forward exchange contracts. We are exposed to credit-related risks in the event of nonperformance by the counterparties to our outstanding forward exchange contracts that are not designated as hedging instruments. We do not expect either of these counterparties to fail to meet their obligations, given their high short-term (A1/P1) credit ratings. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 the aggregate fair value of these contracts represented liabilities of $1.4 million , $3.6 million , and $3.7 million , respectively, which were recorded on our Condensed Consolidated Balance Sheets within Accounts Payable and Accrued Liabilities. |
Sale of Pink Diamond
Sale of Pink Diamond | 6 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Sale of Pink Diamond | Sale of Pink Diamond Our reported inventory balances include a Fancy Vivid Pink Diamond (the "Pink Diamond") with a carrying value of $68.4 million . In the second quarter of 2016, we sold an undivided legal and beneficial 50% ownership interest in the Pink Diamond for $34.2 million in cash. In April 2017, at our Magnificent Jewels and Jadeite Sale in Hong Kong (the "Auction"), the Pink Diamond was sold for a total purchase price of approximately $71.2 million (the "Purchase Price"). The purchaser of the Pink Diamond, who is one of the largest jewelery retailers in the world, is legally obligated to pay the Purchase Price by no later than April 4, 2018. Although the Auction occurred in the second quarter of 2017, the sale will not be recognized in our financial statements until we collect the Purchase Price and transfer title and possession of the Pink Diamond to the purchaser. Until that time, the Pink Diamond will continue to be reported on our balance sheet within Inventory at its $68.4 million carrying value, with the $34.2 million cash payment received in the second quarter of 2016 recorded within Other Current Liabilities. When payment is collected and the related revenue is recognized in our financial statements, the sale of the Pink Diamond will result in a gain of approximately $0.5 million , after taking into account the associated Cost of Inventory Sales of $70.7 million , which includes amounts due to our partner and other costs related to the sale. |
Supplemental Condensed Consolid
Supplemental Condensed Consolidated Balance Sheet Information | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Balance Sheet Information [Abstract] | |
Supplemental Condensed Consolidated Balance Sheet Information | Supplemental Condensed Consolidated Balance Sheet Information As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Prepaid expenses $ 27,293 $ 20,436 $ 17,906 Derivative financial instruments (see Note 8) 308 30,340 12,828 Other (a) 17,854 25,831 11,041 Total Prepaid Expenses and Other Current Assets $ 45,455 $ 76,607 $ 41,775 (a) Other principally includes receivables related to insurance recoveries and, to a much lesser extent, other miscellaneous short-term assets. For the six months ended June 30, 2017, we settled derivative financial instruments designated as net investment hedges with an aggregate notional value $213.8 million and realized a net gain of $29.1 million . See Note 8 for additional information related to derivative financial instruments. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Other Long-Term Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Defined benefit pension plan asset (see Note 6) $ 86,317 $ 78,576 $ 64,141 Equity method investments (a) 47,299 43,143 41,575 Trust assets related to deferred compensation liability 25,128 26,713 37,686 Restricted cash (b) 17,332 1,064 1,126 Other 16,919 15,928 14,677 Total Other Long-Term Assets $ 192,995 $ 165,424 $ 159,205 (a) Includes our equity method investments in RM Sotheby's and AMA, as well as a partnership that was formed in the second quarter of 2017 through which artworks are being purchased and sold. As of June 30, 2017, our investment in this partnership was $5.3 million , representing our 50% ownership interest. (b) As of June 30, 2017, restricted cash reflected within Other Long-Term Assets principally relates to $15.3 million of funds held in escrow pending the final settlement of a sale. As of December 31, 2016 and June 30, 2016, restricted cash reflected within Other Long-Term Assets primarily consists of segregated cash related to long-term lease arrangements. As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): June 30, December 31, June 30, Deferred compensation liability $ 24,477 $ 25,914 $ 35,707 Acquisition earn-out consideration (see Note 19) 17,500 26,250 — Interest rate collar liability (see Note 8) 3,257 5,952 16,194 Other 6,623 6,964 7,022 Total Other Long-Term Liabilities $ 51,857 $ 65,080 $ 58,923 |
Supplemental Condensed Consol17
Supplemental Condensed Consolidated Cash Flow Information | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Condensed Consolidated Cash Flow Information | Supplemental Condensed Consolidated Cash Flow Information For the six months ended June 30, 2017 and 2016 , changes in other operating assets and liabilities as reported in the Condensed Consolidated Statements of Cash Flows included the following (in thousands of dollars): Six Months Ended June 30, 2017 2016 (Increase) decrease in: Prepaid expenses and other current assets $ 2,342 $ 2,851 Other long-term assets 794 431 Income tax receivables and deferred income tax assets (20,896 ) 27,551 Decrease in: Accrued income taxes and deferred income tax liabilities (2,872 ) (7,823 ) Accounts payable and accrued liabilities and other liabilities (20,575 ) (3,145 ) Total changes in other operating assets and liabilities $ (41,207 ) $ 19,865 |
Shareholders' Equity and Divide
Shareholders' Equity and Dividends | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Shareholders' Equity and Dividends | Shareholders' Equity and Dividends Common Stock Repurchase Program —The following table provides information regarding our common stock repurchase program for the six months ended June 30, 2017 and 2016 (in thousands, except for per share data): Six Months Ended June 30, 2017 June 30, 2016 Shares repurchased 740 10,989 Aggregate purchase price $ 33,940 $ 282,205 Average price per share $ 45.86 $ 25.68 As of June 30, 2017 and August 2, 2017, the remaining authorization from our Board of Directors under our common stock repurchase program was $6.3 million . The timing of further share repurchases and the actual amount purchased will depend on a variety of factors including the market price of our common stock, general market and economic conditions, securities law requirements, and other corporate considerations. Repurchases may continue to be made pursuant to plans intended to comply with Rule 10b5-1 under the Exchange Act, which allows us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board of Directors at any time. Special Dividend —On January 29, 2014, the Board of Directors declared a special dividend of $300 million ($ 4.34 per share) that was paid on March 17, 2014. In conjunction with this special dividend, approximately $11 million was accrued for dividend equivalents owed on share-based payments to employees, which was charged to retained earnings. For the six months ended June 30, 2017 and 2016, approximately $2 million and $1.4 million , respectively, of such accrued dividend equivalents were paid upon the vesting of the underlying awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following is a summary of the changes in Accumulated Other Comprehensive Loss for the three months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 2016 Currency Translation Adjustments Balance at April 1 $ (86,853 ) $ (55,242 ) Other comprehensive income (loss) before reclassifications, net of tax of $835 and ($1,750) 6,526 (16,032 ) Other comprehensive income (loss) 6,526 (16,032 ) Balance at June 30 (80,327 ) (71,274 ) Cash Flow Hedges Balance at April 1 (2,826 ) (8,795 ) Other comprehensive loss before reclassifications, net of tax of ($331) and ($1,340) (534 ) (2,163 ) Reclassifications from accumulated other comprehensive loss, net of tax of $354 and $134 572 216 Other comprehensive income (loss) 38 (1,947 ) Balance at June 30 (2,788 ) (10,742 ) Net Investment Hedges Balance at April 1 15,994 — Other comprehensive (loss) income before reclassifications, net of tax of ($885) and $3,877 (1,454 ) 5,773 Other comprehensive (loss) income (1,454 ) 5,773 Balance at June 30 14,540 5,773 Defined Benefit Pension Plan Balance at April 1 (13,855 ) (9,201 ) Currency translation adjustments (571 ) 572 Prior service cost amortization, net of tax of ($3) and $0 (20 ) — Actuarial loss amortization, net of tax of $45 and $0 235 — Other comprehensive (loss) income (356 ) 572 Balance at June 30 (14,211 ) (8,629 ) Total other comprehensive income (loss) attributable to Sotheby's 4,754 (11,634 ) Accumulated other comprehensive loss as of June 30 $ (82,786 ) $ (84,872 ) The following is a summary of the reclassification adjustments made to Accumulated Other Comprehensive Loss for the three months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 2016 Cash Flow Hedges Settlements $ 926 $ 350 Tax effect (354 ) (134 ) Reclassification adjustments, net of tax 572 216 Defined Benefit Pension Plan Prior service cost amortization (23 ) — Actuarial loss amortization 280 — Pre-tax total 257 — Tax effect (42 ) — Reclassification adjustments, net of tax 215 — Total reclassification adjustments, net of tax $ 787 $ 216 The following is a summary of the changes in Accumulated Other Comprehensive Loss for the six months ended June 30, 2017 and 2016 (in thousands of dollars): Six Months Ended June 30, 2017 2016 Currency Translation Adjustments Balance at January 1 $ (89,478 ) $ (52,279 ) Other comprehensive income (loss) before reclassifications, net of tax of $1,421 and ($2,745) 9,151 (18,995 ) Other comprehensive income (loss) 9,151 (18,995 ) Balance at June 30 (80,327 ) (71,274 ) Cash Flow Hedges Balance at January 1 (3,664 ) (4,306 ) Other comprehensive income (loss) before reclassifications, net of tax of $135 and ($4,260) 219 (6,875 ) Reclassifications from accumulated other comprehensive income (loss), net of tax of $407 and $272 657 439 Other comprehensive income (loss) 876 (6,436 ) Balance at June 30 (2,788 ) (10,742 ) Net Investment Hedges Balance at January 1 16,618 — Other comprehensive (loss) income before reclassifications, net of tax of ($1,270) and $3,877 (2,078 ) 5,773 Other comprehensive (loss) income (2,078 ) 5,773 Balance at June 30 14,540 5,773 Defined Benefit Pension Plan Balance at January 1 (13,834 ) (9,619 ) Currency translation adjustments (800 ) 909 Net actuarial gain, net of tax of $0 and ($81) — 81 Prior service cost amortization, net of tax of ($7) and $0 (39 ) — Actuarial loss amortization, net of tax of $91 and $0 462 — Other comprehensive (loss) income (377 ) 990 Balance at June 30 (14,211 ) (8,629 ) Total other comprehensive income (loss) attributable to Sotheby's 7,572 (18,668 ) Accumulated other comprehensive loss as of June 30 $ (82,786 ) $ (84,872 ) The following is a summary of the reclassification adjustments made to Accumulated Other Comprehensive Loss for the six months ended June 30, 2017 and 2016 (in thousands of dollars): Six Months Ended June 30, 2017 2016 Cash Flow Hedges Settlements $ 1,064 $ 711 Tax effect (407 ) (272 ) Reclassification adjustments, net of tax 657 439 Defined Benefit Pension Plan Prior service cost amortization (46 ) — Actuarial loss amortization 553 — Pre-tax total 507 — Tax effect (84 ) — Reclassification adjustments, net of tax 423 — Total reclassification adjustments, net of tax $ 1,080 $ 439 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Compensation Arrangements —We are party to compensation arrangements with certain senior employees, which expire at various points between October 26, 2017 and January 11, 2021 . Such arrangements may provide, among other benefits, for minimum salary levels and for compensation under our incentive compensation programs that is payable only if specified Company and individual goals are attained. Additionally, under certain circumstances, certain of these arrangements provide annual share-based payments, severance payments, and other cash compensation. The aggregate remaining commitment for salaries and other cash compensation related to these compensation arrangements, excluding any participation in our incentive compensation programs, was approximately $15.4 million as of June 30, 2017 . Tax Contingencies —We are subject to laws and regulations in many countries involving sales, use, value-added and other indirect taxes which are assessed by various governmental authorities and imposed on certain revenue-producing transactions between us and our clients. The application of these laws and regulations to our unique business and global client base, and the estimation of any related liabilities, is complex and requires a significant amount of judgment. We are generally not responsible for these indirect tax liabilities unless we fail to collect the correct amount of sales, value-added, or other indirect taxes. Failure to collect the correct amount of indirect tax on a transaction may expose us to claims from tax authorities and could require us to record a liability and corresponding charge to our income statement. Legal Contingencies —We become involved in various claims and lawsuits incidental to the ordinary course of our business. We are required to assess the likelihood of any adverse judgments or outcomes related to these legal contingencies, as well as potential ranges of probable or reasonably possible losses. The determination of the amount of any losses to be recorded or disclosed as a result of these contingencies is based on a careful analysis of each individual exposure with, in some cases, the assistance of outside legal counsel. The amount of losses recorded or disclosed for such contingencies may change in the future due to new developments in each matter or a change in settlement strategy. While the impact of any one or more legal claims or proceedings could be material to our operating results in any period, we do not believe that the outcome of any of these pending claims or proceedings, individually or in the aggregate, will have a material adverse effect on our consolidated financial condition. See Note 4 for information related to unfunded commitments to extend additional loans through SFS. See Note 7 for information related to debt commitments. See Note 15 for information related to income tax contingencies. See Note 16 for information related to auction guarantees. See Note 19 for information related to our commitment to make earn-out payments to the former principals of AAP. |
Uncertain Tax Positions
Uncertain Tax Positions | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Uncertainties [Abstract] | |
Uncertain Tax Positions | Uncertain Tax Positions As of June 30, 2017 , our liability for unrecognized tax benefits, excluding interest and penalties, was $20.4 million , representing a net increase of $0.9 million when compared to a liability of $19.5 million as of December 31, 2016 . This net increase is primarily the result of the accrual of tax reserves related to transfer pricing and other U.S. federal and state and non-U.S. matters, partially offset by the expiration of the statute of limitations for certain tax years and the favorable settlement of tax audits. As of June 30, 2016 , the liability for unrecognized tax benefits, excluding interest and penalties, was $19.5 million . As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , the total amount of unrecognized tax benefits that, if recognized, would favorably affect our effective income tax rate was $9.6 million , $9.3 million , and $13.7 million , respectively. We believe it is reasonably possible that a decrease of $10.1 million in the balance of unrecognized tax benefits can occur within 12 months of the June 30, 2017 balance sheet date as a result of the expiration of statutes of limitations and the expected settlement of ongoing tax audits. We are subject to taxation in the U.S., as well as in various U.S. state and foreign jurisdictions. As a result, we are subject to tax audits in these jurisdictions. We are currently under examination by various U.S. state and foreign taxing authorities. The earliest open tax year for the major jurisdictions in which we do business, which includes the U.S. (including various state and local jurisdictions), the U.K., and Hong Kong, is 2009. We recognize interest expense and penalties related to unrecognized tax benefits as a component of Income Tax Expense. The accrual for such interest and penalties increased by $0.5 million for the six months ended June 30, 2017 . Our policy is to record interest expense related to sales, value added and other non-income based taxes as Interest Expense in our Condensed Consolidated Income Statements. Penalties related to such taxes are recorded as General and Administrative Expenses in our Condensed Consolidated Income Statements. Interest expense and penalties related to income taxes are recorded as a component of Income Tax Expense in our Condensed Consolidated Income Statements. |
Auction Guarantees
Auction Guarantees | 6 Months Ended |
Jun. 30, 2017 | |
Guarantees [Abstract] | |
Auction Guarantees | Auction Guarantees From time-to-time in the ordinary course of our business, we will guarantee to a consignor a minimum sale price in connection with the sale of property at auction (an "auction guarantee"). If the property offered under the auction guarantee sells above the minimum guaranteed price, we are generally entitled to a share of the excess proceeds (the "overage"). In the event that the property sells for less than the minimum guaranteed price, we must perform under the auction guarantee by funding the difference between the sale price at auction and the amount of the auction guarantee (the "shortfall"). The amount of any shortfall recorded in our Condensed Consolidated Income Statements is reduced by any auction commissions earned on property sold under the auction guarantee. If any item of property offered under the auction guarantee does not sell, the amount of the auction guarantee must be paid, but we take ownership of the unsold property and may recover the amount paid through its future sale. In certain limited situations, if the guaranteed property fails to sell at auction or if the purchaser defaults, the consignor has the right to cancel the auction guarantee and retain the property. Depending on the mix of items subject to an auction guarantee, in advance of peak selling seasons, a small number of guaranteed items may represent a substantial portion of the aggregate amount of outstanding auction guarantees. In situations when an item of guaranteed property does not sell and we take ownership of the property, it is recorded as Inventory on our Condensed Consolidated Balance Sheets at the lower of its cost (i.e., the amount paid under the auction guarantee) or our estimate of the property's net realizable value (i.e., the expected sale price upon its eventual disposition). The market for fine art, decorative art, and jewelry is not a highly liquid trading market. As a result, the valuation of property acquired as a result of failed auction guarantees is inherently subjective and its realizable value often fluctuates over time. Accordingly, the proceeds ultimately realized on the sale of previously guaranteed property may equal, exceed, or be less than the estimated net realizable value recorded as Inventory on our Condensed Consolidated Balance Sheets. We may reduce our financial exposure under auction guarantees through contractual risk and reward sharing arrangements. Such auction guarantee risk and reward sharing arrangements include irrevocable bids and partner sharing arrangements. An irrevocable bid is an arrangement under which a counterparty commits to bid a predetermined price on the guaranteed property. If the irrevocable bid is not the winning bid, the counterparty is generally entitled to receive a share of the auction commission earned on the sale and/or a share of any overage. If the irrevocable bid is the winning bid, the counterparty may receive a fixed fee as compensation for providing the irrevocable bid. This fee may be netted against the counterparty's obligation to pay the full purchase price (i.e., the hammer price plus the applicable buyer's premium). In a partner sharing arrangement, a counterparty commits to fund: (i) a share of the difference between the sale price at auction and the amount of the auction guarantee if the property sells for less than the minimum guaranteed price or (ii) a share of the minimum guaranteed price if the property does not sell while taking ownership of a proportionate share of the unsold property. In exchange for accepting a share of the financial exposure under the auction guarantee, the counterparty in a partner sharing arrangement is generally entitled to receive a share of the auction commission earned if the property sells and/or a share of any overage. The counterparties to our auction guarantee risk and reward sharing arrangements are typically major international art dealers or major art collectors. We could be exposed to losses in the event any of these counterparties do not perform according to the terms of these contractual arrangements. Although irrevocable bid and partner sharing arrangements may be used to reduce the risk associated with auction guarantees, we may also enter into auction guarantees without securing such arrangements. In these circumstances, we could be exposed to deterioration in auction commission margins and/or auction guarantee losses if one or more of the guaranteed items fails to sell at its minimum guaranteed price. Furthermore, in such situations, our liquidity could be reduced. Our credit agreement has a covenant that imposes a $600 million limitation on net outstanding auction guarantees (i.e., the aggregate financial exposure under outstanding auction guarantees less the impact of related risk and reward sharing arrangements). In addition to compliance with this covenant, significant auction guarantees and related risk and reward sharing arrangements are subject to approval by our Board of Directors. As of June 30, 2017 , we had outstanding auction guarantees totaling $9.8 million . Our financial exposure under these auction guarantees is reduced by irrevocable bids totaling $2.7 million . Each of the outstanding auction guarantees has a minimum guaranteed price that is within or below the range of the pre-sale auction estimates for the underlying property. The property related to these auction guarantees is being offered at auctions during the fourth quarter of 2017 . We are obligated under the terms of certain auction guarantees to advance all or a portion of the guaranteed amount prior to auction. As of June 30, 2017 and December 31, 2016 , the estimated fair value of our obligation to perform under our outstanding auction guarantees totaled $0.4 million and $0.6 million , respectively, and is recorded within Accounts Payable and Accrued Liabilities on our Condensed Consolidated Balance Sheets. As of June 30, 2016, the liability related to our obligation to perform under our outstanding auction guarantees was not material. As of August 2, 2017 , we had outstanding auction guarantees totaling $17 million and, as of that date, our financial exposure was reduced by irrevocable bids totaling $2.7 million . Each of the auction guarantees outstanding as of August 2, 2017 , had a minimum guaranteed price that was within or below the range of the pre-sale auction estimates for the underlying property. The property related to these auction guarantees is being offered at auctions in the fourth quarter of 2017 . As of August 2, 2017 , we have advanced $1.1 million of the total guaranteed amount. |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation [Abstract] | |
Share-Based Payments | Share-Based Payments Share-Based Payments —Share-based payments made to employees include performance-based stock unit awards, market-based stock unit awards, restricted stock units, restricted shares, and stock options. Share-based payments are also made to members of our Board of Directors through the issuance of deferred stock units. A description of each of these share-based payments is provided below. For the three and six months ended June 30, 2017 and 2016 , compensation expense for share-based payments made to employees was reflected in the following accounts in our Condensed Consolidated Income Statements (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Salaries and related costs $ 5,946 $ 2,291 $ 12,015 $ 8,128 Voluntary separation incentive programs — (334 ) — (640 ) Total share-based payment expense (pre-tax) $ 5,946 $ 1,957 $ 12,015 $ 7,488 Total share-based payment expense (after-tax) $ 3,940 $ 1,609 $ 7,997 $ 5,410 For the three and six months ended June 30, 2016 , our Condensed Consolidated Income Statements include credits of ($0.3) million and ($0.6) million , respectively, related to the voluntary separation incentive programs enacted in the fourth quarter of 2015. These credits were the result of changes in our estimate of the number of performance-based stock units held by program participants that were expected to vest. As discussed in Note 1, on January 1, 2017, we adopted ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 requires, among other things, that all excess tax benefits and deficiencies resulting from the vesting of share-based payments be recorded in the statement of operations, whereas previous guidance generally permitted such items to be recorded in the equity section of the balance sheet provided that an adequate level of previously recorded excess tax benefits existed. This aspect of ASU 2016-09 was adopted on a prospective basis. For the six months ended June 30, 2017 , we recognized a $2.6 million excess tax benefit related to share-based payment in our Condensed Consolidated Income Statements. This tax benefit represents the amount by which the tax deduction resulting from the vesting of share-based payments in the period exceeded the tax benefit initially recognized in our Condensed Consolidated Financial Statements. For the six months ended June 30, 2016, we recognized a ($1.3) million tax shortfall related to share-based payment. This tax shortfall represents the amount by which the tax deduction resulting from the vesting of share-based payments in the period was less than the tax benefit initially recognized in our Condensed Consolidated Financial Statements. As discussed above, prior to the adoption of ASU 2016-09 on January 1, 2017, such tax shortfalls were accounted for as a reduction to previously recorded excess tax benefits related to share-based payments within Additional Paid-in Capital on our Condensed Consolidated Balance Sheets. As of June 30, 2017 , unrecognized compensation expense related to the unvested portion of share-based payments to employees was $33.3 million . This compensation expense is expected to be amortized over a weighted-average period of approximately 2.4 years. We do not capitalize any compensation expense related to share-based payments to employees. Restricted Stock Unit Plan —The Sotheby's Restricted Stock Unit Plan (as amended and restated, the "Restricted Stock Unit Plan") provides for the issuance of restricted stock units ("RSU's") and restricted shares to employees. Awards made under the Restricted Stock Unit Plan are subject to the approval of the Compensation Committee of our Board of Directors (the "Compensation Committee"). In making awards under the Restricted Stock Unit Plan, the Compensation Committee takes into account the nature of the services rendered by employees, their present and potential future contributions to Sotheby's success, and such other factors as the Compensation Committee in its discretion deems relevant. RSU's and restricted shares issued under the Restricted Stock Unit Plan generally vest evenly over a three -year service period. Prior to vesting, holders of RSU's and restricted shares are entitled to receive non-forfeitable dividend equivalents and dividends, respectively, at the same rate as dividends are paid on our common stock (if and when such dividends are paid). Prior to vesting, holders of RSU's do not have voting rights, while holders of restricted shares have voting rights. RSU's and restricted shares may not be sold, assigned, transferred, pledged or otherwise encumbered until they vest. Performance Share Units (or "PSU's") are RSU's that generally vest over three or four -year service periods, subject to the achievement of certain profitability targets (for awards granted prior to 2016) or certain return on invested capital ("ROIC") targets (for awards granted beginning in 2016). Prior to vesting, holders of PSU's do not have voting rights and are not entitled to receive dividends or dividend equivalents. Dividend equivalents are generally credited to holders of PSU's at the same rate as dividends are paid on our common stock (if and when such dividends are paid), but are only paid for PSU's that vest and become shares of our common stock. PSU's may not be sold, assigned, transferred, pledged or otherwise encumbered until they vest. For the six months ended June 30, 2017 , the Compensation Committee approved share-based payment awards with a total grant date fair value of $30.8 million , as follows: • 369,897 PSU's with a grant date fair value of $14.6 million and a single vesting opportunity after a three -year service period. These PSU's provide the recipient with an opportunity to vest in incremental PSU's of up to 100% of the initial units awarded subject to the achievement of certain ROIC targets, for a total maximum vesting opportunity of 200% of the initial award. The maximum number of shares of common stock that may be payable with respect to these awards is 739,794 . • 401,997 RSU's with a grant date fair value of $16.2 million and annual vesting opportunities over a three -year service period. Summary of Outstanding Share-Based Payment Awards —For the six months ended June 30, 2017 , changes to the number of outstanding RSU’s, PSU’s, and restricted shares were as follows (shares in thousands): Restricted Shares, RSU's and PSU's Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 2,235 $ 36.40 Granted 772 $ 39.87 Vested (754 ) $ 39.07 Canceled (183 ) $ 38.88 Outstanding at June 30, 2017 2,070 $ 36.50 As of June 30, 2017 , 2.3 million shares were available for future awards issued pursuant to the Restricted Stock Unit Plan. The aggregate fair value of RSU’s and PSU's that vested during the six months ended June 30, 2017 and 2016 was $35.9 million and $13.8 million , respectively, based on the closing stock price on the dates the shares vested. Stock Options —Stock options issued pursuant to the 1997 Stock Option Plan are exercisable into authorized, but unissued shares of our common stock. Stock options vest evenly over four years and expire ten years after the date of grant. As of June 30, 2017 , 104,100 shares of our common stock were available for the issuance of stock options under the Stock Option Plan. As of June 30, 2017 , 50,000 stock options were outstanding and exercisable with a weighted average exercise price of $22.11 per share, a weighted average remaining contractual term of 2.6 years, and an aggregate intrinsic value of $1.6 million . No stock options were exercised or granted during the six months ended June 30, 2017 and 2016 . Directors Stock Plan —Common stock is issued quarterly under the Sotheby’s Stock Compensation Plan for Non-Employee Directors (as amended and restated, the “Directors Stock Plan”). Directors may elect to receive this compensation in the form of deferred stock units, which are credited in an amount that is equal to the number of shares of common stock the director otherwise would have received. The number of shares of common stock awarded is calculated using the closing price of the common stock on the New York Stock Exchange on the business day immediately prior to the quarterly grant date. Deferred stock units are held until a director’s termination of service, at which time the units are settled on a one-for one basis in shares of our common stock on the first day of the calendar month following the date of termination. For the three and six months ended June 30, 2017 and 2016 , we recognized $0.3 million and $0.5 million , respectively, within General and Administrative Expenses in our Condensed Consolidated Income Statements related to common stock shares awarded under the Directors Stock Plan. As of June 30, 2017 , 158,917 deferred stock units were outstanding under the Directors Stock Plan and 125,552 units were available for future issuance. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share —Basic earnings per share attributable to Sotheby's common shareholders is computed under the two-class method using the weighted average number of common shares outstanding during the period. The two-class method requires that the amount of net income attributable to participating securities be deducted from consolidated net income in the computation of basic earnings per share. In periods with a net loss, the net loss attributable to participating securities is not deducted from consolidated net loss in the computation of basic earnings per share as the impact would be anti-dilutive. Our participating securities include unvested restricted stock units and unvested restricted shares held by employees, both of which have non-forfeitable rights to dividends (see Note 17). Diluted earnings per share —Diluted earnings per share attributable to Sotheby's common shareholders is computed in a similar manner to basic earnings per share under the two-class method, using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential common shares outstanding during the period. Our potential common shares include unvested performance share units held by employees, incremental common shares issuable upon the exercise of employee stock options, and deferred stock units held by members of our Board of Directors (see Note 17 ). For the three and six months ended June 30, 2017 and 2016, approximately 1 million potential common shares related to share-based payment awards were excluded from the computation of diluted earnings per share because the financial performance or stock price targets inherent in such awards were not achieved as of the respective balance sheet dates. The table below summarizes the computation of basic and diluted earnings per share for the three and six months ended June 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic: Numerator: Net income attributable to Sotheby’s $ 76,891 $ 88,964 $ 65,566 $ 63,080 Less: Net income attributable to participating securities 1,176 1,226 1,019 821 Net income attributable to Sotheby’s common shareholders $ 75,715 $ 87,738 $ 64,547 $ 62,259 Denominator: Weighted average common shares outstanding 52,716 57,104 52,866 60,063 Basic earnings per share - Sotheby’s common shareholders $ 1.44 $ 1.54 $ 1.22 $ 1.04 Diluted : Numerator: Net income attributable to Sotheby’s $ 76,891 $ 88,964 $ 65,566 $ 63,080 Less: Net income attributable to participating securities 1,176 1,226 1,019 821 Net income attributable to Sotheby’s common shareholders $ 75,715 $ 87,738 $ 64,547 $ 62,259 Denominator: Weighted average common shares outstanding 52,716 57,104 52,866 60,063 Weighted average effect of dilutive potential common shares: Performance share units 151 458 293 454 Deferred stock units 159 137 157 153 Stock options 28 13 26 12 Weighted average dilutive potential common shares outstanding 338 608 476 619 Weighted average diluted shares outstanding 53,054 57,712 53,342 60,682 Diluted earnings per share - Sotheby’s common shareholders $ 1.43 $ 1.52 $ 1.21 $ 1.03 The decrease in weighted average common shares outstanding between the current and prior year reporting periods is due to common stock repurchases made throughout 2016 and in the second quarter of 2017. See Note 12 for additional information on our share repurchase program. |
Acquisition of Art Agency, Part
Acquisition of Art Agency, Partners | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Art Agency, Partners | Acquisition of Art Agency, Partners On January 11, 2016, we acquired Art Agency, Partners, a firm that provides a range of art-related services, in exchange for initial cash consideration of $50 million and future earn-out payments of up to $35 million , as discussed in more detail below. The purpose of this acquisition is to grow auction and private sale revenues by enhancing our relationships with art collectors and by improving our position in the fine art market, particularly in Impressionist, Modern and Contemporary Art. Also, as a result of this acquisition, we have added a new revenue stream by integrating AAP's existing art advisory business, providing a new avenue for growth. The purchase agreement governing the acquisition of AAP includes non-competition and non-solicitation covenants that continue in effect until January 2021. In connection with this acquisition, each of the former principals of AAP also entered into a five -year employment agreement that extends through January 2021. Each employment agreement also includes non-competition and non-solicitation covenants that continue in effect for 12 months following the end of employment. As indicated above, in connection with the acquisition of AAP, we agreed to make future earn-out payments to the former principals of AAP not to exceed $35 million in the aggregate, contingent on the achievement of a level of cumulative financial performance within the Impressionist, Modern and Contemporary Art collecting categories, as well as from AAP's art advisory business. Progress against the cumulative financial target (the "Target") was to be measured at the end of each calendar year during the four -year performance period following the acquisition, after adjusting the Target to reflect the annual growth or contraction of the auction market for Impressionist, Modern and Contemporary Art, when compared to the year ended December 31, 2015. Amounts owed pursuant to the earn-out arrangement are considered to be compensation expense for accounting purposes and are classified within Salaries and Related Costs in our Condensed Consolidated Income Statements. For the three and six months ended June 30, 2016 , we recognized $2.2 million and $4.4 million , respectively, of compensation expense associated with the AAP earn-out arrangement based on our initial estimate of progress against the Target. For the year ended December 31, 2016, we recognized $35 million of compensation expense associated with the AAP earn-out arrangement, reflecting the full achievement of the Target as a result of our improved market share in the Contemporary Art collecting category, as well as an improvement in auction commission margins, during the initial annual period. The $35 million owed under the earn-out arrangement is being paid in four annual increments of $8.75 million in the first quarter of each year beginning in 2017 and through 2020. The portion of the accrued liability due in the first quarter of 2018 ( $8.75 million ) is recorded within Accrued Salaries and Related Costs on our Condensed Consolidated Balance Sheets, and the remaining liability ( $17.5 million ) is recorded within Other Long-Term Liabilities. See Note 10 . The table below summarizes the allocation of the total purchase price paid for AAP to the assets acquired and liabilities assumed (in thousands of dollars): Purchase price: Initial cash consideration $ 50,000 Working capital adjustment 1,189 Total purchase price $ 51,189 Allocation of purchase price: Net working capital acquired $ 1,572 Fixed assets and other long-term assets 173 Goodwill (see Note 5) 34,490 Intangible assets - customer relationships (see Note 5) 10,800 Intangible assets - non-compete agreements (see Note 5) 3,060 Deferred tax assets 1,094 Total purchase price $ 51,189 Upon completion of the purchase price allocation in the second quarter of 2016, $28.3 million of the resulting goodwill was allocated to the Agency segment and $6.2 million was allocated to the acquired art advisory business, which is reported within All Other for segment reporting purposes. The goodwill is tax deductible over a period of 15 years. We incurred $0.8 million of transaction costs in connection with the acquisition of AAP, which were recognized within General and Administrative Expenses in the fourth quarter of 2015 ( $0.6 million ) and the first quarter of 2016 ( $0.2 million ). It is impracticable to compute the amount of revenues and earnings contributed to the Agency segment as a result of the acquisition because the related activities have been integrated into the segment. Disclosure of pro-forma revenues and earnings attributable to the acquisition is also excluded because it is impracticable to determine since AAP was a closely-held private entity and its historical financial records are not available in U.S. GAAP. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions From time-to-time, in the ordinary course of business, related parties such as members of the Board of Directors and management, buy and sell property at our auctions or through private sales brokered by Sotheby's. For the three and six months ended June 30, 2017 , we recognized Agency Commissions and Fees of $1 million and $4.6 million , respectively, related to property sold or purchased by related parties. For the three and six months ended June 30, 2016 , such amounts totaled $0.1 million and $0.7 million , respectively. As of June 30, 2017 , no amounts were owed to related party consignors. As of June 30, 2016 , amounts owed to related party consignors totaled $10.6 million . |
Recent Accounting Standards Not
Recent Accounting Standards Not Yet Adopted | 6 Months Ended |
Jun. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Standards Not Yet Adopted | Recent Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which introduces a new five-step framework for revenue recognition. The core principal of the standard is that entities should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with customers. ASU 2014-09 can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. On August 12, 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of Effective Date , which defers the effective date of ASU 2014-09 to January 1, 2018 with early adoption beginning January 1, 2017. We have identified all material contract types and are in the process of evaluating the impact of adopting ASU 2014-09. We expect to quantify and disclose the expected impact, if any, of adopting ASU 2014-09, in our Form 10-Q for the period ended September 30, 2017. Based on our progress to date, we do not expect the adoption of ASU 2014-09 to have a material impact on the timing of our revenue recognition. However, based on our preliminary conclusions, we anticipate a change in the classification of certain ancillary revenue streams currently recorded on a net basis in our income statement. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments, including requirements to measure most equity investments at fair value with changes in fair value recognized in net income, to perform a qualitative assessment of equity investments without readily determinable fair values, and to separately present financial assets and liabilities by measurement category and by type of financial asset on the balance sheet or in the accompanying notes to the financial statements. ASU 2016-01 will be effective for us beginning on January 1, 2018, and will be applied by means of a cumulative effect adjustment to the balance sheet, except for effects related to equity securities without readily determinable values, which will be applied prospectively. We are currently assessing the potential impact of adopting ASU 2016-01 on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases , which requires long-term lease arrangements to be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all long-term leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and interest expense for financing leases. The amendments also require certain new quantitative and qualitative disclosures regarding leasing arrangements. ASU 2016-02 will be effective for us beginning on January 1, 2019. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2016-02 on our financial statements. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments , which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. ASU 2016-13 is effective for us beginning on January 1, 2020. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2016-13 on our financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , which updates guidance as to how certain cash receipts and cash payments should be presented and classified within the statement of cash flows. ASU 2016-15 is intended to reduce the existing diversity in practice and is effective for us beginning on January 1, 2018. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2016-15 on our financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows , which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for us beginning on January 1, 2018. Early adoption is permitted. We are currently assessing the potential impact of adopting ASU 2016-18 on our financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business , which amends the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 is effective for us beginning on January 1, 2018 and must be applied prospectively on or after the effective date. We do not expect the adoption of ASU 2017-01 to have a material impact on our financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. ASU 2017-04 is effective for us beginning on January 1, 2020. Early adoption is permitted. We do not expect the adoption of ASU 2017-04 to have a material impact on our financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires entities to disaggregate the current service cost component from the other components of net pension cost (the "other components") to be included in compensation costs in the income statement and present the other components elsewhere in the income statement and outside of income from operations, if that subtotal is presented. In addition, ASU 2017-07 requires entities to disclose the income statement lines that contain the other components if they are not presented on appropriately described separate lines. ASU 2017-07 is effective for us beginning on January 1, 2018. The adoption of ASU 2017-07 will result in the recording of the expected return on plan assets and the amortization of actuarial losses related to the U.K. Pension Plan outside of operating income. Currently, these components of net pension cost (credit) are recorded within Salaries and Related Costs. See Note 6. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements. ASU 2017-09 provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation . Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. We will apply ASU 2017-09 prospectively to any share-based payment awards modified on or after its January 1, 2018 effective date. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents our segment information for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 Agency SFS All Other Reconciling items (a) Total Revenues $ 294,513 $ 16,362 $ 7,026 $ (3,003 ) $ 314,898 Segment income before taxes $ 97,226 $ 8,879 $ 2,255 $ (466 ) (b) $ 107,894 Three Months Ended June 30, 2016 Revenues $ 277,058 $ 16,552 $ 6,857 $ (1,802 ) $ 298,665 Segment income before taxes $ 110,716 $ 10,675 $ 1,894 $ (191 ) (b) $ 123,094 Six Months Ended June 30, 2017 Revenues $ 462,932 $ 30,733 $ 13,377 $ (4,607 ) $ 502,435 Segment income before taxes $ 68,804 $ 16,212 $ 4,721 $ (1,133 ) (b) $ 88,604 Six Months Ended June 30, 2016 Revenues $ 362,833 $ 33,032 $ 12,858 $ (3,527 ) $ 405,196 Segment income before taxes $ 60,424 $ 20,940 $ 3,225 $ (587 ) (b) $ 84,002 (a) The reconciling items related to Revenues consist principally of amounts charged by SFS to the Agency segment, including interest and facility fees related to certain loans made to Agency segment clients, as well as fees charged for term loan collateral sold at auction or privately through the Agency segment. (b) The reconciling items related to segment income before taxes are detailed in the table below. |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated | The table below presents a reconciliation of segment income before taxes to consolidated income before taxes for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Agency $ 97,226 $ 110,716 $ 68,804 $ 60,424 SFS 8,879 10,675 16,212 20,940 All Other 2,255 1,894 4,721 3,225 Segment income before taxes 108,360 123,285 89,737 84,589 Reconciling items: Equity in earnings of investees (a) (466 ) (191 ) (1,133 ) (587 ) Income before taxes $ 107,894 $ 123,094 $ 88,604 $ 84,002 (a) For segment reporting purposes, our share of earnings related to equity investees is included as part of income before taxes. However, such earnings are reported separately below income before taxes in our Condensed Consolidated Income Statements. |
Reconciliation of Segment Assets to Consolidated Assets | The table below presents segment assets, as well as a reconciliation of segment assets to consolidated assets as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, 2017 December 31, 2016 June 30, 2016 Agency $ 2,130,731 $ 1,759,670 $ 2,114,220 SFS 663,500 687,649 642,118 All Other 48,051 42,246 40,520 Total segment assets 2,842,282 2,489,565 2,796,858 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 23,096 14,861 11,637 Reconciling item related to SFS (a) (25,000 ) — — Consolidated assets $ 2,840,378 $ 2,504,426 $ 2,808,495 (a) As of June 30, 2017, segment assets for SFS include a $25 million consignor advance that is netted against an associated auction payable balance on our Condensed Consolidated Balance Sheets. |
Receivables (Tables)
Receivables (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounts and Notes Receivable, Net [Abstract] | |
Financing Receivable Credit Quality Indicators | The table below provides the aggregate LTV ratio for the SFS loan portfolio as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Secured loans $ 651,361 $ 675,109 $ 629,681 Low auction estimate of collateral $ 1,445,847 $ 1,405,856 $ 1,296,760 Aggregate LTV ratio 45 % 48 % 49 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Secured loans with an LTV ratio above 50% $ 209,483 $ 270,111 $ 316,170 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 375,933 $ 486,973 $ 571,922 Aggregate LTV ratio of secured loans with an LTV ratio above 50% 56 % 55 % 55 % |
Summary of Other Credit Quality Information Regarding Finance Segment Secured Loans | The table below provides other credit quality information regarding secured loans made by SFS as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): June 30, December 31, June 30, Total secured loans $ 651,361 $ 675,109 $ 629,681 Loans past due $ 108,560 $ 90,508 $ 3,952 Loans more than 90 days past due $ 41,448 $ 158 $ 167 Non-accrual loans $ — $ 158 $ 167 Impaired loans $ — $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — $ — Allowance for credit losses based on historical data 1,290 1,270 1,373 Total allowance for credit losses - secured loans $ 1,290 $ 1,270 $ 1,373 |
Activity Related to Allowance For Credit Losses | During the period January 1, 2017 to June 30, 2017 , activity related to the Allowance for Credit Losses was as follows (in thousands of dollars): Allowance for credit losses as of January 1, 2017 $ 1,270 Change in loan loss provision 20 Allowance for credit losses as of June 30, 2017 $ 1,290 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | For the six months ended June 30, 2017 and 2016 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Agency All Other Total Agency All Other Total Beginning balance as of December 31 $ 43,878 $ 6,151 $ 50,029 $ 13,621 $ — $ 13,621 Goodwill acquired (see Note 19) — — — 28,339 6,151 34,490 Foreign currency exchange rate changes 322 — 322 (195 ) — (195 ) Ending balance as of June 30 $ 44,200 $ 6,151 $ 50,351 $ 41,765 $ 6,151 $ 47,916 |
Indefinite-lived Intangible Assets | Intangible Assets —As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2017 December 31, 2016 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 19) 8 years 10,800 10,800 10,800 Non-compete agreements - AAP (see Note 19) 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,125 1,125 — Total intangible assets subject to amortization 14,985 14,985 13,860 Accumulated amortization (2,902 ) (1,916 ) (930 ) Total amortizable intangible assets (net) 12,083 13,069 12,930 Total intangible assets (net) $ 12,407 $ 13,393 $ 13,254 (a) Relates to a license obtained in conjunction with the purchase of a retail wine business in 2008 . (b) Relates to a database containing historic information concerning repeat sales of works of art. This database was acquired along with the associated business in the third quarter of 2016. |
Finite-lived Intangible Assets | Intangible Assets —As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2017 December 31, 2016 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 19) 8 years 10,800 10,800 10,800 Non-compete agreements - AAP (see Note 19) 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,125 1,125 — Total intangible assets subject to amortization 14,985 14,985 13,860 Accumulated amortization (2,902 ) (1,916 ) (930 ) Total amortizable intangible assets (net) 12,083 13,069 12,930 Total intangible assets (net) $ 12,407 $ 13,393 $ 13,254 (a) Relates to a license obtained in conjunction with the purchase of a retail wine business in 2008 . (b) Relates to a database containing historic information concerning repeat sales of works of art. This database was acquired along with the associated business in the third quarter of 2016. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for the remaining useful lives of intangible assets subject to amortization during the five -year period succeeding the June 30, 2017 balance sheet date are as follows (in thousands of dollars): Period Amount July 2017 to June 2018 $ 1,972 July 2018 to June 2019 $ 1,972 July 2019 to June 2020 $ 1,972 July 2020 to June 2021 $ 1,972 July 2021 to June 2022 $ 1,717 |
Defined Benefit Pension Plan (T
Defined Benefit Pension Plan (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Pension Benefit Plan | For the three and six months ended June 30, 2017 and 2016 , the components of the net credits related to the U.K. Pension Plan were as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Service cost $ — $ 289 $ — $ 1,153 Interest cost 1,999 2,611 3,937 5,215 Expected return on plan assets (3,514 ) (4,733 ) (6,921 ) (9,454 ) Prior service cost 15 — 30 — Amortization of actuarial loss 280 — 553 — Amortization of prior service cost (23 ) — (46 ) — Net pension credit $ (1,243 ) $ (1,833 ) $ (2,447 ) $ (3,086 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Instruments [Abstract] | |
Schedule of Line of Credit Facilities | The following tables summarize information related to the Credit Agreement as of and for the periods ended June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): As of and for the three and six months ended June 30, 2017 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 146,097 $ 546,108 $ 692,205 Borrowings outstanding $ — $ 531,500 $ 531,500 Available borrowing capacity (a) $ 146,097 $ 14,608 $ 160,705 Average Borrowings Outstanding: Three months ended June 30, 2017 $ — $ 541,874 $ 541,874 Six months ended June 30, 2017 $ — $ 552,130 $ 552,130 Borrowing Costs - Three Months Ended June 30, 2017: Interest $ — (b) $ 4,407 (c) $ 4,407 Fees 685 (b) 671 (c) 1,356 Total $ 685 $ 5,078 $ 5,763 Borrowing Costs - Six Months Ended June 30, 2017: Interest $ — (b) $ 8,725 (c) $ 8,725 Fees 1,364 (b) 1,390 (c) 2,754 Total $ 1,364 $ 10,115 $ 11,479 As of and for the year ended December 31, 2016 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 165,443 $ 569,021 $ 734,464 Borrowings outstanding $ — $ 565,000 $ 565,000 Available borrowing capacity (a) $ 165,443 $ 4,021 $ 169,464 Average borrowings outstanding $ — $ 534,433 $ 534,433 As of and for the three and six months ended June 30, 2016 Agency Credit Facility SFS Credit Facility Total Maximum borrowing capacity $ 300,000 $ 1,035,000 $ 1,335,000 Borrowing base $ 202,699 $ 529,100 $ 731,799 Borrowings outstanding $ — $ 523,500 $ 523,500 Available borrowing capacity (a) $ 202,699 $ 5,600 $ 208,299 Average Borrowings Outstanding: Three months ended June 30, 2016 $ — $ 518,544 $ 518,544 Six months ended June 30, 2016 $ — $ 529,129 $ 529,129 Borrowing Costs - Three Months Ended June 30, 2016: Interest $ — (b) $ 3,457 (c) $ 3,457 Fees 715 (b) 696 (c) 1,411 Total $ 715 $ 4,153 $ 4,868 Borrowing Costs - Six Months Ended June 30, 2016: Interest $ — (b) $ 7,130 (c) $ 7,130 Fees 1,388 (b) 1,417 (c) 2,805 Total $ 1,388 $ 8,547 $ 9,935 (a) The available borrowing capacity is calculated as the borrowing base less borrowings outstanding. (b) Borrowing costs related to the Agency Credit Facility, which include interest and fees, are reflected in our Condensed Consolidated Income Statements as Interest Expense. See the table below for additional information related to Interest Expense associated with the Agency Credit Facility. (c) Borrowing costs related to the SFS Credit Facility are reflected in our Condensed Consolidated Income Statements within Cost of Finance Revenues. For the three and six months ended June 30, 2017 and 2016, the weighted average cost of borrowings related to the SFS Credit Facility was approximately 3.7% and 3.2% , respectively. |
Schedule of Debt | Long-Term Debt —As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Long-Term Debt consisted of the following (in thousands of dollars): June 30, December 31, June 30, York Property Mortgage, net of unamortized debt issuance costs of $5,050, $5,555, and $6,060 $ 305,907 $ 309,212 $ 312,398 2022 Senior Notes, net of unamortized debt issuance costs of $3,320, $3,642, and $3,963 296,680 296,358 296,037 Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010, $1,010, and $1,010 (38,825 ) (6,629 ) (6,491 ) Total Long-Term Debt, net $ 563,762 $ 598,941 $ 601,944 |
Aggregate Future Principal And Interest Payments | The aggregate future principal and interest payments due under the Credit Agreement, the York Property Mortgage, and the 2022 Senior Notes during the five-year period after June 30, 2017 are as follows (in thousands of dollars): Period Amount July 2017 to June 2018 $ 65,337 July 2018 to June 2019 $ 39,362 July 2019 to June 2020 $ 39,203 July 2020 to June 2021 $ 570,569 July 2021 to June 2022 $ 38,927 The table above assumes that the annual interest rate for the York Property Mortgage will be at the interest rate collar's floor rate of 4.167% for the remainder of the mortgage term. |
Components of Interest Expense | For the three and six months ended June 30, 2017 and 2016 , Interest Expense consisted of the following (in thousands of dollars): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Agency Credit Facility: Amendment and arrangement fees $ 288 $ 278 $ 576 $ 556 Commitment fees 397 437 788 832 Sub-total 685 715 1,364 1,388 York Property Mortgage 2,715 2,774 5,418 5,562 2022 Senior Notes 4,106 4,106 8,204 8,204 Other interest expense 66 43 119 30 Total Interest Expense $ 7,572 $ 7,638 $ 15,105 $ 15,184 |
Derivative Financial Instrume33
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative financial instruments designated as hedging instruments in the Condensed Consolidated Balance Sheet | The following tables present fair value information related to the derivative financial instruments designated as hedging instruments as of June 30, 2017 , December 31, 2016 , and June 30, 2016 (in thousands of dollars): Assets Liabilities June 30, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swaps Other Current Assets $ 308 N/A $ — Interest rate collar N/A — Other Current Liabilities 1,550 Interest rate collar N/A — Other Long-Term Liabilities 3,257 Total cash flow hedges 308 — 4,807 Net Investment Hedges: Foreign exchange contracts N/A — Other Current Liabilities 2,176 Total $ 308 $ 6,983 Assets Liabilities December 31, 2016 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swaps Other Current Assets $ 82 Other Current Liabilities $ 163 Interest rate collar N/A — Other Long-Term Liabilities 5,952 Total cash flow hedges 82 6,115 Net Investment Hedges: Foreign exchange contracts Other Current Assets 30,258 N/A — Total $ 30,340 $ 6,115 Assets Liabilities June 30, 2016 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap N/A $ — Other Current Liabilities $ 1,341 Interest rate collar N/A — Other Long-Term Liabilities 16,194 Total cash flow hedges — 17,535 Net Investment Hedges: Foreign exchange contracts Other Current Assets 12,828 Other Current Liabilities 315 Total $ 12,828 $ 17,850 |
Effect of derivative financial instruments designated as hedging instruments on Condensed Consolidated Income Statements | The following tables summarize the effect of the derivative financial instruments designated as hedging instruments on our Condensed Consolidated Income Statements and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion Classification of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion Three Months Ended June 30, 2017 2016 2017 2016 2017 2016 Cash Flow Hedges: Interest rate swaps $ (7 ) $ (290 ) Interest Expense $ (50 ) $ 216 $ — $ — Interest rate collar (527 ) (1,873 ) Non-operating (expense) income — — 622 — Total cash flow hedges (534 ) (2,163 ) (50 ) 216 622 — Net Investment Hedges: Foreign exchange contracts (1,454 ) 5,773 N/A — — — — Total $ (1,988 ) $ 3,610 $ (50 ) $ 216 $ 622 $ — Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion Classification of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Net Income Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion Six Months Ended June 30, 2017 2016 2017 2016 2017 2016 Cash Flow Hedges: Interest rate swaps $ 134 $ (1,083 ) Interest Expense $ 35 $ 439 $ — $ — Interest rate collar 85 (5,792 ) Non-operating (expense) income — — 622 — Total cash flow hedges 219 (6,875 ) 35 439 622 — Net Investment Hedges: Foreign exchange contracts (2,078 ) 5,773 N/A — — — — Total $ (1,859 ) $ (1,102 ) $ 35 $ 439 $ 622 $ — |
Supplemental Condensed Consol34
Supplemental Condensed Consolidated Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Balance Sheet Information [Abstract] | |
Prepaid Expenses and Other Current Assets | As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Prepaid expenses $ 27,293 $ 20,436 $ 17,906 Derivative financial instruments (see Note 8) 308 30,340 12,828 Other (a) 17,854 25,831 11,041 Total Prepaid Expenses and Other Current Assets $ 45,455 $ 76,607 $ 41,775 (a) Other principally includes receivables related to insurance recoveries and, to a much lesser extent, other miscellaneous short-term assets. |
Other Long-Term Assets | As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Other Long-Term Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Defined benefit pension plan asset (see Note 6) $ 86,317 $ 78,576 $ 64,141 Equity method investments (a) 47,299 43,143 41,575 Trust assets related to deferred compensation liability 25,128 26,713 37,686 Restricted cash (b) 17,332 1,064 1,126 Other 16,919 15,928 14,677 Total Other Long-Term Assets $ 192,995 $ 165,424 $ 159,205 (a) Includes our equity method investments in RM Sotheby's and AMA, as well as a partnership that was formed in the second quarter of 2017 through which artworks are being purchased and sold. As of June 30, 2017, our investment in this partnership was $5.3 million , representing our 50% ownership interest. (b) As of June 30, 2017, restricted cash reflected within Other Long-Term Assets principally relates to $15.3 million of funds held in escrow pending the final settlement of a sale. As of December 31, 2016 and June 30, 2016, restricted cash reflected within Other Long-Term Assets primarily consists of segregated cash related to long-term lease arrangements. |
Other Long-Term Liabilities | As of June 30, 2017 , December 31, 2016 , and June 30, 2016 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): June 30, December 31, June 30, Deferred compensation liability $ 24,477 $ 25,914 $ 35,707 Acquisition earn-out consideration (see Note 19) 17,500 26,250 — Interest rate collar liability (see Note 8) 3,257 5,952 16,194 Other 6,623 6,964 7,022 Total Other Long-Term Liabilities $ 51,857 $ 65,080 $ 58,923 |
Supplemental Condensed Consol35
Supplemental Condensed Consolidated Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Condensed Consolidated Cash Flow Information | For the six months ended June 30, 2017 and 2016 , changes in other operating assets and liabilities as reported in the Condensed Consolidated Statements of Cash Flows included the following (in thousands of dollars): Six Months Ended June 30, 2017 2016 (Increase) decrease in: Prepaid expenses and other current assets $ 2,342 $ 2,851 Other long-term assets 794 431 Income tax receivables and deferred income tax assets (20,896 ) 27,551 Decrease in: Accrued income taxes and deferred income tax liabilities (2,872 ) (7,823 ) Accounts payable and accrued liabilities and other liabilities (20,575 ) (3,145 ) Total changes in other operating assets and liabilities $ (41,207 ) $ 19,865 |
Shareholders' Equity and Divi36
Shareholders' Equity and Dividends (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Common Stock Repurchase Program | The following table provides information regarding our common stock repurchase program for the six months ended June 30, 2017 and 2016 (in thousands, except for per share data): Six Months Ended June 30, 2017 June 30, 2016 Shares repurchased 740 10,989 Aggregate purchase price $ 33,940 $ 282,205 Average price per share $ 45.86 $ 25.68 |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following is a summary of the changes in Accumulated Other Comprehensive Loss for the six months ended June 30, 2017 and 2016 (in thousands of dollars): Six Months Ended June 30, 2017 2016 Currency Translation Adjustments Balance at January 1 $ (89,478 ) $ (52,279 ) Other comprehensive income (loss) before reclassifications, net of tax of $1,421 and ($2,745) 9,151 (18,995 ) Other comprehensive income (loss) 9,151 (18,995 ) Balance at June 30 (80,327 ) (71,274 ) Cash Flow Hedges Balance at January 1 (3,664 ) (4,306 ) Other comprehensive income (loss) before reclassifications, net of tax of $135 and ($4,260) 219 (6,875 ) Reclassifications from accumulated other comprehensive income (loss), net of tax of $407 and $272 657 439 Other comprehensive income (loss) 876 (6,436 ) Balance at June 30 (2,788 ) (10,742 ) Net Investment Hedges Balance at January 1 16,618 — Other comprehensive (loss) income before reclassifications, net of tax of ($1,270) and $3,877 (2,078 ) 5,773 Other comprehensive (loss) income (2,078 ) 5,773 Balance at June 30 14,540 5,773 Defined Benefit Pension Plan Balance at January 1 (13,834 ) (9,619 ) Currency translation adjustments (800 ) 909 Net actuarial gain, net of tax of $0 and ($81) — 81 Prior service cost amortization, net of tax of ($7) and $0 (39 ) — Actuarial loss amortization, net of tax of $91 and $0 462 — Other comprehensive (loss) income (377 ) 990 Balance at June 30 (14,211 ) (8,629 ) Total other comprehensive income (loss) attributable to Sotheby's 7,572 (18,668 ) Accumulated other comprehensive loss as of June 30 $ (82,786 ) $ (84,872 ) The following is a summary of the changes in Accumulated Other Comprehensive Loss for the three months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 2016 Currency Translation Adjustments Balance at April 1 $ (86,853 ) $ (55,242 ) Other comprehensive income (loss) before reclassifications, net of tax of $835 and ($1,750) 6,526 (16,032 ) Other comprehensive income (loss) 6,526 (16,032 ) Balance at June 30 (80,327 ) (71,274 ) Cash Flow Hedges Balance at April 1 (2,826 ) (8,795 ) Other comprehensive loss before reclassifications, net of tax of ($331) and ($1,340) (534 ) (2,163 ) Reclassifications from accumulated other comprehensive loss, net of tax of $354 and $134 572 216 Other comprehensive income (loss) 38 (1,947 ) Balance at June 30 (2,788 ) (10,742 ) Net Investment Hedges Balance at April 1 15,994 — Other comprehensive (loss) income before reclassifications, net of tax of ($885) and $3,877 (1,454 ) 5,773 Other comprehensive (loss) income (1,454 ) 5,773 Balance at June 30 14,540 5,773 Defined Benefit Pension Plan Balance at April 1 (13,855 ) (9,201 ) Currency translation adjustments (571 ) 572 Prior service cost amortization, net of tax of ($3) and $0 (20 ) — Actuarial loss amortization, net of tax of $45 and $0 235 — Other comprehensive (loss) income (356 ) 572 Balance at June 30 (14,211 ) (8,629 ) Total other comprehensive income (loss) attributable to Sotheby's 4,754 (11,634 ) Accumulated other comprehensive loss as of June 30 $ (82,786 ) $ (84,872 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following is a summary of the reclassification adjustments made to Accumulated Other Comprehensive Loss for the six months ended June 30, 2017 and 2016 (in thousands of dollars): Six Months Ended June 30, 2017 2016 Cash Flow Hedges Settlements $ 1,064 $ 711 Tax effect (407 ) (272 ) Reclassification adjustments, net of tax 657 439 Defined Benefit Pension Plan Prior service cost amortization (46 ) — Actuarial loss amortization 553 — Pre-tax total 507 — Tax effect (84 ) — Reclassification adjustments, net of tax 423 — Total reclassification adjustments, net of tax $ 1,080 $ 439 The following is a summary of the reclassification adjustments made to Accumulated Other Comprehensive Loss for the three months ended June 30, 2017 and 2016 (in thousands of dollars): Three Months Ended June 30, 2017 2016 Cash Flow Hedges Settlements $ 926 $ 350 Tax effect (354 ) (134 ) Reclassification adjustments, net of tax 572 216 Defined Benefit Pension Plan Prior service cost amortization (23 ) — Actuarial loss amortization 280 — Pre-tax total 257 — Tax effect (42 ) — Reclassification adjustments, net of tax 215 — Total reclassification adjustments, net of tax $ 787 $ 216 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Share-based Compensation [Abstract] | |
Compensation Expense Related to Share-Based Payments | For the three and six months ended June 30, 2017 and 2016 , compensation expense for share-based payments made to employees was reflected in the following accounts in our Condensed Consolidated Income Statements (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Salaries and related costs $ 5,946 $ 2,291 $ 12,015 $ 8,128 Voluntary separation incentive programs — (334 ) — (640 ) Total share-based payment expense (pre-tax) $ 5,946 $ 1,957 $ 12,015 $ 7,488 Total share-based payment expense (after-tax) $ 3,940 $ 1,609 $ 7,997 $ 5,410 |
Changes in Number of Outstanding Restricted Stock, RSU's and PSU's | For the six months ended June 30, 2017 , changes to the number of outstanding RSU’s, PSU’s, and restricted shares were as follows (shares in thousands): Restricted Shares, RSU's and PSU's Weighted Average Grant Date Fair Value Outstanding at January 1, 2017 2,235 $ 36.40 Granted 772 $ 39.87 Vested (754 ) $ 39.07 Canceled (183 ) $ 38.88 Outstanding at June 30, 2017 2,070 $ 36.50 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted Earnings Per Share | The table below summarizes the computation of basic and diluted earnings per share for the three and six months ended June 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Basic: Numerator: Net income attributable to Sotheby’s $ 76,891 $ 88,964 $ 65,566 $ 63,080 Less: Net income attributable to participating securities 1,176 1,226 1,019 821 Net income attributable to Sotheby’s common shareholders $ 75,715 $ 87,738 $ 64,547 $ 62,259 Denominator: Weighted average common shares outstanding 52,716 57,104 52,866 60,063 Basic earnings per share - Sotheby’s common shareholders $ 1.44 $ 1.54 $ 1.22 $ 1.04 Diluted : Numerator: Net income attributable to Sotheby’s $ 76,891 $ 88,964 $ 65,566 $ 63,080 Less: Net income attributable to participating securities 1,176 1,226 1,019 821 Net income attributable to Sotheby’s common shareholders $ 75,715 $ 87,738 $ 64,547 $ 62,259 Denominator: Weighted average common shares outstanding 52,716 57,104 52,866 60,063 Weighted average effect of dilutive potential common shares: Performance share units 151 458 293 454 Deferred stock units 159 137 157 153 Stock options 28 13 26 12 Weighted average dilutive potential common shares outstanding 338 608 476 619 Weighted average diluted shares outstanding 53,054 57,712 53,342 60,682 Diluted earnings per share - Sotheby’s common shareholders $ 1.43 $ 1.52 $ 1.21 $ 1.03 |
Acquisition of Art Agency, Pa40
Acquisition of Art Agency, Partners (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of total purchase price allocation to assets acquired and liabilities assumed | The table below summarizes the allocation of the total purchase price paid for AAP to the assets acquired and liabilities assumed (in thousands of dollars): Purchase price: Initial cash consideration $ 50,000 Working capital adjustment 1,189 Total purchase price $ 51,189 Allocation of purchase price: Net working capital acquired $ 1,572 Fixed assets and other long-term assets 173 Goodwill (see Note 5) 34,490 Intangible assets - customer relationships (see Note 5) 10,800 Intangible assets - non-compete agreements (see Note 5) 3,060 Deferred tax assets 1,094 Total purchase price $ 51,189 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Ownership percentage by parent | 80.00% | |
Ownership percentage by non controlling interest | 20.00% | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by (used by) operating activities | $ 56,357 | $ (47,107) |
Net cash provided by (used by) financing activities | (91,020) | $ (312,946) |
Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Income tax benefit related to adoption of 2016-09 | $ 2,600 | |
Increase in benefit to effective tax rate related to adoption of 2016-09 | 3.00% | |
Net cash provided by (used by) operating activities | $ 2,600 | |
Net cash provided by (used by) financing activities | $ (2,600) |
Seasonality of Business (Detail
Seasonality of Business (Details) - principal_selling_season | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | |
Seasonality Of Business [Abstract] | |||
Number of principal selling seasons | 2 | ||
Q2 and Q4 Net Auction Sales as a percentage of total auction sales | 82.00% | 78.00% | |
Auction commission revenues as percentage of total revenues | 75.00% | 75.00% |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Revenue and Income before Taxes by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Segment Reporting [Line Items] | |||||
Revenues | $ 314,898 | $ 298,665 | $ 502,435 | $ 405,196 | |
Segment income before taxes | 107,894 | 123,094 | 88,604 | 84,002 | |
Operating Segments | |||||
Segment Reporting [Line Items] | |||||
Segment income before taxes | 108,360 | 123,285 | 89,737 | 84,589 | |
Operating Segments | Agency | |||||
Segment Reporting [Line Items] | |||||
Revenues | 294,513 | 277,058 | 462,932 | 362,833 | |
Segment income before taxes | 97,226 | 110,716 | 68,804 | 60,424 | |
Operating Segments | SFS | |||||
Segment Reporting [Line Items] | |||||
Revenues | 16,362 | 16,552 | 30,733 | 33,032 | |
Segment income before taxes | 8,879 | 10,675 | 16,212 | 20,940 | |
Operating Segments | All Other | |||||
Segment Reporting [Line Items] | |||||
Revenues | 7,026 | 6,857 | 13,377 | 12,858 | |
Segment income before taxes | 2,255 | 1,894 | 4,721 | 3,225 | |
Reconciling Items | |||||
Segment Reporting [Line Items] | |||||
Revenues | [1] | (3,003) | (1,802) | (4,607) | (3,527) |
Segment income before taxes | [1],[2] | $ (466) | $ (191) | $ (1,133) | $ (587) |
[1] | The reconciling items related to Revenues consist principally of amounts charged by SFS to the Agency segment, including interest and facility fees related to certain loans made to Agency segment clients, as well as fees charged for term loan collateral sold at auction or privately through the Agency segment. | ||||
[2] | The reconciling items related to segment income before taxes are detailed in the table below. |
Segment Reporting (Reconciliati
Segment Reporting (Reconciliation of Segment Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | $ 107,894 | $ 123,094 | $ 88,604 | $ 84,002 | |
Equity in earnings of investees | 466 | 191 | 1,133 | 587 | |
Operating Segments | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | 108,360 | 123,285 | 89,737 | 84,589 | |
Operating Segments | Agency | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | 97,226 | 110,716 | 68,804 | 60,424 | |
Operating Segments | SFS | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | 8,879 | 10,675 | 16,212 | 20,940 | |
Operating Segments | All Other | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | 2,255 | 1,894 | 4,721 | 3,225 | |
Reconciling Items | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Segment income before taxes | [1],[2] | (466) | (191) | (1,133) | (587) |
Equity in earnings of investees | [3] | $ (466) | $ (191) | $ (1,133) | $ (587) |
[1] | The reconciling items related to Revenues consist principally of amounts charged by SFS to the Agency segment, including interest and facility fees related to certain loans made to Agency segment clients, as well as fees charged for term loan collateral sold at auction or privately through the Agency segment. | ||||
[2] | The reconciling items related to segment income before taxes are detailed in the table below. | ||||
[3] | For segment reporting purposes, our share of earnings related to equity investees is included as part of income before taxes. However, such earnings are reported separately below income before taxes in our Condensed Consolidated Income Statements. |
Segment Reporting (Reconcilia46
Segment Reporting (Reconciliation of Segment Assets to Consolidated Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Segment Reporting [Line Items] | ||||
Consolidated assets | $ 2,840,378 | $ 2,504,426 | $ 2,808,495 | |
Operating Segments | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | 2,842,282 | 2,489,565 | 2,796,858 | |
Operating Segments | Agency | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | 2,130,731 | 1,759,670 | 2,114,220 | |
Operating Segments | SFS | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | 663,500 | 687,649 | 642,118 | |
Operating Segments | All Other | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | 48,051 | 42,246 | 40,520 | |
Reconciling Items | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | 23,096 | 14,861 | 11,637 | |
Reconciling Items | SFS | ||||
Segment Reporting [Line Items] | ||||
Consolidated assets | [1] | $ (25,000) | $ 0 | $ 0 |
[1] | As of June 30, 2017, segment assets for SFS include a $25 million consignor advance that is netted against an associated auction payable balance on our Condensed Consolidated Balance Sheets. |
Receivables (Narrative) (Detail
Receivables (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 7 Months Ended | ||
Jun. 30, 2013 | Jun. 30, 2017 | Jun. 30, 2016 | Aug. 02, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Maximum buyer payment term | 30 days | ||||
Consignor payment term | 35 days | ||||
Net accounts receivable | $ 847,332,000 | $ 835,431,000 | $ 433,614,000 | ||
Cash received in settlement of Notes Receivable | $ 6,900,000 | $ 13,700,000 | |||
Loan-to-value ratio | 50.00% | 50.00% | 50.00% | ||
Permitted borrowings, percentage of loan | 85.00% | ||||
Unfunded lending commitment to extend additional credit | $ 26,000,000 | ||||
Proceeds from the sale of equity investment (see Note 4) | $ 2,110,000 | $ 175,000 | |||
Subsequent Event | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Collateral sales related to loans past due | $ 33,300,000 | ||||
Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan to value (LTV) ratio | 51.00% | ||||
Maximum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan to value (LTV) ratio | 60.00% | ||||
Accounts Rec, Consignor Paid | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Net accounts receivable | $ 85,300,000 | 104,500,000 | $ 90,100,000 | ||
Transfer of Possession Without Payment | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Net accounts receivable | $ 33,400,000 | 33,900,000 | 76,300,000 | ||
Notes receivable past due | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan-to-value ratio | 47.00% | ||||
Low auction estimate of collateral | $ 232,500,000 | ||||
Agency | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Buyer receivables | 2,600,000 | 12,200,000 | 7,500,000 | ||
Secured loans | 3,800,000 | 4,100,000 | 3,800,000 | ||
Cash received in settlement of Notes Receivable | 5,000,000 | 7,500,000 | |||
Low auction estimate of collateral | 3,100,000 | 6,600,000 | 3,100,000 | ||
Auction guarantee advances outstanding | 0 | 0 | 1,000,000 | ||
Agency | Non Accrual Loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Other loans | 2,100,000 | ||||
SFS | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Secured loans | 651,361,000 | 629,681,000 | 675,109,000 | ||
Balance of secured loan to refinance auction or private sale receivable | 85,600,000 | 104,400,000 | $ 88,700,000 | ||
Secured loan issued to refinance auction or private sale receivable | $ 3,800,000 | $ 9,300,000 | |||
Loan-to-value ratio | 45.00% | 49.00% | 48.00% | ||
Loans past due | $ 108,560,000 | $ 3,952,000 | $ 90,508,000 | ||
Loans more than 90 days past due | 41,448,000 | 167,000 | 158,000 | ||
Low auction estimate of collateral | 1,445,847,000 | 1,296,760,000 | 1,405,856,000 | ||
Non-accrual loans outstanding | 0 | 167,000 | 158,000 | ||
Impaired loans | $ 0 | 0 | 0 | ||
All Other | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Other loans | $ 2,300,000 | $ 2,100,000 | |||
Sale of interest in equity method investee | $ 4,300,000 | ||||
All Other | Up-front Payment Arrangement | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Proceeds from the sale of equity investment (see Note 4) | 800,000 | ||||
All Other | Unsecured Loan | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Sale of interest in equity method investee | $ 3,500,000 |
Receivables (Summary of Other C
Receivables (Summary of Other Credit Quality Information Regarding Finance Segment Secured Loans) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Aggregate LTV ratio | 50.00% | 50.00% | 50.00% |
Allowance for credit losses: | |||
Total allowance for credit losses - secured loans | $ 1,290,000 | $ 1,270,000 | |
SFS | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Secured loans | 651,361,000 | 675,109,000 | $ 629,681,000 |
Low auction estimate of collateral | $ 1,445,847,000 | $ 1,405,856,000 | $ 1,296,760,000 |
Aggregate LTV ratio | 45.00% | 48.00% | 49.00% |
Secured loans | $ 651,361,000 | $ 675,109,000 | $ 629,681,000 |
Loans past due | 108,560,000 | 90,508,000 | 3,952,000 |
Loans more than 90 days past due | 41,448,000 | 158,000 | 167,000 |
Non-accrual loans | 0 | 158,000 | 167,000 |
Impaired loans | 0 | 0 | 0 |
Allowance for credit losses: | |||
Allowance for credit losses for impaired loans | 0 | 0 | 0 |
Allowance for credit losses based on historical data | 1,290,000 | 1,270,000 | 1,373,000 |
Total allowance for credit losses - secured loans | 1,290,000 | 1,270,000 | 1,373,000 |
SFS | Loan to Value Ratio Above 50% | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Secured loans | 209,483,000 | 270,111,000 | 316,170,000 |
Low auction estimate of collateral | $ 375,933,000 | $ 486,973,000 | $ 571,922,000 |
Aggregate LTV ratio | 56.00% | 55.00% | 55.00% |
Receivables (Activity Related t
Receivables (Activity Related to Allowance for Credit Losses) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Allowance for Loan and Lease Losses [Roll Forward] | |
Allowance for credit losses, beginning balance | $ 1,270 |
Change in loan loss provision | 20 |
Allowance for credit losses, ending balance | $ 1,290 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 50,029 | $ 13,621 | |
Goodwill acquired (see Note 19) | 0 | 34,490 | |
Foreign currency exchange rate changes | 322 | (195) | |
Ending balance | $ 47,916 | 50,351 | 47,916 |
Agency | |||
Goodwill [Roll Forward] | |||
Beginning balance | 43,878 | 13,621 | |
Goodwill acquired (see Note 19) | 28,300 | 0 | 28,339 |
Foreign currency exchange rate changes | 322 | (195) | |
Ending balance | 41,765 | 44,200 | 41,765 |
All Other | |||
Goodwill [Roll Forward] | |||
Beginning balance | 6,151 | 0 | |
Goodwill acquired (see Note 19) | 6,200 | 0 | 6,151 |
Foreign currency exchange rate changes | 0 | 0 | |
Ending balance | $ 6,151 | $ 6,151 | $ 6,151 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Indefinite-lived intangible assets | [1] | $ 324 | $ 324 | $ 324 | $ 324 | $ 324 |
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets subject to amortization | 14,985 | 13,860 | 14,985 | 13,860 | 14,985 | |
Accumulated amortization | (2,902) | (930) | (2,902) | (930) | (1,916) | |
Total amortizable intangible assets (net) | 12,083 | 12,930 | 12,083 | 12,930 | 13,069 | |
Total intangible assets (net) | 12,407 | 13,254 | 12,407 | 13,254 | 13,393 | |
Amortization of intangible assets | 500 | 400 | 1,000 | 900 | ||
Customer relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets subject to amortization | 10,800 | 10,800 | $ 10,800 | 10,800 | 10,800 | |
Amortization Period | 8 years | |||||
Non-compete agreements | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets subject to amortization | 3,060 | 3,060 | $ 3,060 | 3,060 | 3,060 | |
Amortization Period | 6 years | |||||
Artworks database | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets subject to amortization | [2] | $ 1,125 | $ 0 | $ 1,125 | $ 0 | $ 1,125 |
Amortization Period | [2] | 10 years | ||||
[1] | Relates to a license obtained in conjunction with the purchase of a retail wine business in 2008. | |||||
[2] | Relates to a database containing historic information concerning repeat sales of works of art. This database was acquired along with the associated business in the third quarter of 2016. |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets (Future Amortization Expense) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |
July 2017 to June 2018 | $ 1,972 |
July 2018 to June 2019 | 1,972 |
July 2019 to June 2020 | 1,972 |
July 2020 to June 2021 | 1,972 |
July 2021 to June 2022 | $ 1,717 |
Defined Benefit Pension Plan (D
Defined Benefit Pension Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Defined Benefit Plan [Abstract] | ||||
Service cost | $ 0 | $ 289 | $ 0 | $ 1,153 |
Interest cost | 1,999 | 2,611 | 3,937 | 5,215 |
Expected return on plan assets | (3,514) | (4,733) | (6,921) | (9,454) |
Prior service cost | 15 | 0 | 30 | 0 |
Amortization of actuarial loss | 280 | 0 | 553 | 0 |
Amortization of prior service cost | (23) | 0 | (46) | 0 |
Net pension credit | $ (1,243) | $ (1,833) | $ (2,447) | $ (3,086) |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Jul. 03, 2017USD ($) | Jul. 01, 2015USD ($) | Sep. 27, 2012USD ($) | Jul. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jul. 01, 2021USD ($) | Jul. 01, 2017 | Jun. 21, 2017USD ($) | Jun. 20, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 15, 2013USD ($) | Nov. 23, 2012USD ($) | Feb. 06, 2009USD ($) | Jan. 11, 2008USD ($) |
Debt [Line Items] | |||||||||||||||||
Incremental credit facility additional extension period | 365 days | ||||||||||||||||
Partial repayment | $ 3,810,000 | $ 3,611,000 | |||||||||||||||
Decrease in notional amount of derivatives | $ 57,000,000 | ||||||||||||||||
Percentage of principal amount of debt as component of premium price | 1.00% | ||||||||||||||||
Senior Notes 2022 | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Debt instrument stated interest percentage | 5.25% | ||||||||||||||||
Aggregate principal value of debt | $ 300,000,000 | 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||||||
Net proceeds from issuance of long term debt | $ 294,600,000 | ||||||||||||||||
Percentage of senior notes principal as part of redemption price | 100.00% | ||||||||||||||||
Long-term debt, fair value | $ 301,500,000 | $ 301,500,000 | $ 301,500,000 | ||||||||||||||
Purchase Consummated On February 6, 2009 | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Property acquisition price | $ 370,000,000 | ||||||||||||||||
Components of purchase price of land and buildings | 85,000,000 | ||||||||||||||||
Signing Of Related Purchase And Sale Agreement On January 11, 2008 | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Components of purchase price of land and buildings | $ 50,000,000 | ||||||||||||||||
Assumption Of Existing Mortgage | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Components of purchase price of land and buildings | $ 235,000,000 | ||||||||||||||||
Mortgages | Interest rate swaps | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Derivative contract term | 2 years | ||||||||||||||||
Mortgages | Collar | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Derivative contract term | 5 years | ||||||||||||||||
Mortgages | Subsequent Event | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Partial repayment | $ 32,000,000 | ||||||||||||||||
Mortgages | Cash | Subsequent Event | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Partial repayment | $ 25,000,000 | ||||||||||||||||
Mortgages | York Property Mortgage | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Debt instrument term | 7 years | ||||||||||||||||
Aggregate principal value of debt | $ 325,000,000 | ||||||||||||||||
Proceeds from issuance of debt | $ 98,000,000 | ||||||||||||||||
Amortization period | 25 years | ||||||||||||||||
Minimum net worth under agreement | $ 325,000,000 | $ 425,000,000 | |||||||||||||||
Maximum LTV ratio under agreement | 0.65 | 0.65 | 0.65 | ||||||||||||||
Minimum debt yield under agreement | 8.50% | 8.50% | 8.50% | ||||||||||||||
Restricted cash | $ 7,400,000 | $ 7,400,000 | $ 7,400,000 | 2,300,000 | $ 4,600,000 | ||||||||||||
Mortgages | York Property Mortgage | Standard & Poor's, B Rating | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Required debt service period | 12 months | ||||||||||||||||
Mortgages | York Property Mortgage | Standard & Poor's, B Plus Rating | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Required debt service period | 6 months | ||||||||||||||||
Mortgages | York Property Mortgage | Interest rate swaps | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Derivative contract term | 2 years | ||||||||||||||||
Effective interest rate | 3.127% | 3.127% | 3.127% | ||||||||||||||
Mortgages | York Property Mortgage | Interest rate collar | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Derivative contract term | 5 years | ||||||||||||||||
Mortgages | York Property Mortgage | One-Month LIBOR | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Spread on variable rate | 2.25% | ||||||||||||||||
Senior Notes | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Long-term debt | $ 80,000,000 | ||||||||||||||||
Convertible Notes | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Long-term debt | $ 182,000,000 | ||||||||||||||||
Minimum | York Property Mortgage | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Debt instrument stated interest percentage | 5.60% | 5.60% | 5.60% | ||||||||||||||
Minimum | Mortgages | Forecast | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Partial repayment | $ 6,250,000 | ||||||||||||||||
Minimum | Mortgages | York Property Mortgage | Interest rate collar | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Effective interest rate | 4.167% | 4.167% | 4.167% | ||||||||||||||
Maximum | York Property Mortgage | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Debt instrument stated interest percentage | 10.60% | 10.60% | 10.60% | ||||||||||||||
Maximum | Mortgages | Forecast | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Partial repayment | $ 25,000,000 | ||||||||||||||||
Maximum | Mortgages | York Property Mortgage | Forecast | Interest rate collar | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Effective interest rate | 6.00% | ||||||||||||||||
Credit Agreement | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Maximum borrowing capacity | $ 1,335,000,000 | $ 1,335,000,000 | $ 1,335,000,000 | 1,335,000,000 | 1,335,000,000 | ||||||||||||
Incremental revolving credit facility | 692,205,000 | 692,205,000 | 692,205,000 | 731,799,000 | 734,464,000 | ||||||||||||
Line of credit facility, sub-limit | 400,000,000 | 400,000,000 | 400,000,000 | ||||||||||||||
Maximum available increase in borrowing capacity | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||||||
Maximum amount of net auction guarantees permissible | 600,000,000 | 600,000,000 | 600,000,000 | ||||||||||||||
Covenant, aggregate borrowing availability | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||||||
Covenant, total liquidity amount | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||||
Total life-to-date credit facility fees paid | 21,700,000 | 21,700,000 | 21,700,000 | ||||||||||||||
Unamortized debt fees | 6,800,000 | 6,800,000 | 6,800,000 | ||||||||||||||
Agency Credit Facility | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Maximum borrowing capacity | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | ||||||||||||
Incremental revolving credit facility | 146,097,000 | 146,097,000 | 146,097,000 | 202,699,000 | 165,443,000 | ||||||||||||
Line of credit facility, sub-limit | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||
Incremental Credit Facility | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Incremental revolving credit facility | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||
SFS Credit Facility | |||||||||||||||||
Debt [Line Items] | |||||||||||||||||
Maximum borrowing capacity | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | ||||||||||||
Incremental revolving credit facility | 546,108,000 | 546,108,000 | 546,108,000 | $ 529,100,000 | $ 569,021,000 | ||||||||||||
Line of credit facility, sub-limit | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 |
Debt (Schedule of Line of Credi
Debt (Schedule of Line of Credit Facilities) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Line of Credit Facility [Line Items] | ||||||
Borrowings outstanding | $ 531,500,000 | $ 523,500,000 | $ 531,500,000 | $ 523,500,000 | $ 565,000,000 | |
Agency Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | |
Borrowing base | 146,097,000 | 202,699,000 | 146,097,000 | 202,699,000 | 165,443,000 | |
Borrowings outstanding | 0 | 0 | 0 | 0 | 0 | |
Available borrowing capacity | [1] | 146,097,000 | 202,699,000 | 146,097,000 | 202,699,000 | 165,443,000 |
Average borrowings outstanding | 0 | 0 | 0 | 0 | 0 | |
Borrowing Costs | ||||||
Interest | [2] | 0 | 0 | 0 | 0 | |
Fees | [2] | 685,000 | 715,000 | 1,364,000 | 1,388,000 | |
Total | 685,000 | 715,000 | 1,364,000 | 1,388,000 | ||
SFS Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | 1,035,000,000 | |
Borrowing base | 546,108,000 | 529,100,000 | 546,108,000 | 529,100,000 | 569,021,000 | |
Borrowings outstanding | 531,500,000 | 523,500,000 | 531,500,000 | 523,500,000 | 565,000,000 | |
Available borrowing capacity | [1] | 14,608,000 | 5,600,000 | 14,608,000 | 5,600,000 | 4,021,000 |
Average borrowings outstanding | 541,874,000 | 518,544,000 | 552,130,000 | 529,129,000 | 534,433,000 | |
Borrowing Costs | ||||||
Interest | [3] | 4,407,000 | 3,457,000 | 8,725,000 | 7,130,000 | |
Fees | [3] | 671,000 | 696,000 | 1,390,000 | 1,417,000 | |
Total | $ 5,078,000 | $ 4,153,000 | $ 10,115,000 | $ 8,547,000 | ||
Weighted-average cost of borrowing | 3.70% | 3.20% | 3.70% | 3.20% | ||
Total | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 1,335,000,000 | $ 1,335,000,000 | $ 1,335,000,000 | $ 1,335,000,000 | 1,335,000,000 | |
Borrowing base | 692,205,000 | 731,799,000 | 692,205,000 | 731,799,000 | 734,464,000 | |
Borrowings outstanding | 531,500,000 | 523,500,000 | 531,500,000 | 523,500,000 | 565,000,000 | |
Available borrowing capacity | [1] | 160,705,000 | 208,299,000 | 160,705,000 | 208,299,000 | 169,464,000 |
Average borrowings outstanding | 541,874,000 | 518,544,000 | 552,130,000 | 529,129,000 | $ 534,433,000 | |
Borrowing Costs | ||||||
Interest | 4,407,000 | 3,457,000 | 8,725,000 | 7,130,000 | ||
Fees | 1,356,000 | 1,411,000 | 2,754,000 | 2,805,000 | ||
Total | $ 5,763,000 | $ 4,868,000 | $ 11,479,000 | $ 9,935,000 | ||
[1] | The available borrowing capacity is calculated as the borrowing base less borrowings outstanding. | |||||
[2] | Borrowing costs related to the Agency Credit Facility, which include interest and fees, are reflected in our Condensed Consolidated Income Statements as Interest Expense. See the table below for additional information related to Interest Expense associated with the Agency Credit Facility. | |||||
[3] | Borrowing costs related to the SFS Credit Facility are reflected in our Condensed Consolidated Income Statements within Cost of Finance Revenues. For the three and six months ended June 30, 2017 and 2016, the weighted average cost of borrowings related to the SFS Credit Facility was approximately 3.7% and 3.2%, respectively. |
Debt (Summary of Long-Term Debt
Debt (Summary of Long-Term Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Debt [Line Items] | |||
Total Long-Term Debt, net | $ 563,762 | $ 598,941 | $ 601,944 |
York Property Mortgage | |||
Debt [Line Items] | |||
Long-term debt | 305,907 | 309,212 | 312,398 |
Less current portion | (38,825) | (6,629) | (6,491) |
Unamortized debt issuance costs, noncurrent | 5,050 | 5,555 | 6,060 |
Unamortized debt issuance costs, current | 1,010 | 1,010 | 1,010 |
Senior Notes 2022 | |||
Debt [Line Items] | |||
Long-term debt | 296,680 | 296,358 | 296,037 |
Unamortized debt issuance costs, noncurrent | $ 3,320 | $ 3,642 | $ 3,963 |
Debt (Aggregate Future Principa
Debt (Aggregate Future Principal and Interest Payments) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Debt Instruments [Abstract] | |
July 2017 to June 2018 | $ 65,337 |
July 2018 to June 2019 | 39,362 |
July 2019 to June 2020 | 39,203 |
July 2020 to June 2021 | 570,569 |
July 2021 to June 2022 | $ 38,927 |
Debt (Components of Interest Ex
Debt (Components of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt [Line Items] | ||||
Interest expense | $ 7,572 | $ 7,638 | $ 15,105 | $ 15,184 |
Other interest expense | 66 | 43 | 119 | 30 |
York Property Mortgage | ||||
Debt [Line Items] | ||||
Interest expense | 2,715 | 2,774 | 5,418 | 5,562 |
Senior Notes 2022 | ||||
Debt [Line Items] | ||||
Interest expense | 4,106 | 4,106 | 8,204 | 8,204 |
Agency Credit Facility | ||||
Debt [Line Items] | ||||
Amendment and arrangement fees | 288 | 278 | 576 | 556 |
Commitment fees | 397 | 437 | 788 | 832 |
Sub-total | $ 685 | $ 715 | $ 1,364 | $ 1,388 |
Derivative Financial Instrume59
Derivative Financial Instruments (Fair Value) (Details) - Designated as Hedging Instruments - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Derivatives, Fair Value [Line Items] | |||
Assets | $ 308 | $ 30,340 | $ 12,828 |
Liabilities | 6,983 | 6,115 | 17,850 |
Cash flow hedges | |||
Derivatives, Fair Value [Line Items] | |||
Assets | 308 | 82 | |
Liabilities | 4,807 | 6,115 | 17,535 |
Cash flow hedges | Interest rate swaps | Other Current Assets | |||
Derivatives, Fair Value [Line Items] | |||
Assets | 308 | 82 | |
Cash flow hedges | Interest rate swaps | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | 163 | 1,341 | |
Cash flow hedges | Interest rate collar | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | 1,550 | ||
Cash flow hedges | Interest rate collar | Other Long-Term Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | 3,257 | 5,952 | 16,194 |
Net investment hedges | Foreign exchange contracts | Other Current Assets | |||
Derivatives, Fair Value [Line Items] | |||
Assets | $ 30,258 | 12,828 | |
Net investment hedges | Foreign exchange contracts | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | $ 2,176 | $ 315 |
Derivative Financial Instrume60
Derivative Financial Instruments (Gain (Loss) Recognized) (Details) - Designated as Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion | $ (1,988) | $ 3,610 | $ (1,859) | $ (1,102) |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (50) | 216 | 35 | 439 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 622 | 0 | 622 | 0 |
Cash flow hedges | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion | (534) | (2,163) | 219 | (6,875) |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (50) | 216 | 35 | 439 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 622 | 0 | 622 | 0 |
Cash flow hedges | Interest rate swaps | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion | (7) | (290) | 134 | (1,083) |
Cash flow hedges | Interest rate swaps | Interest Expense | ||||
Derivative Instruments | ||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (50) | 216 | 35 | 439 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest rate collar | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion | (527) | (1,873) | 85 | (5,792) |
Cash flow hedges | Interest rate collar | Non-operating (expense) income | ||||
Derivative Instruments | ||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | 0 | 0 | 0 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 622 | 0 | 622 | 0 |
Net investment hedges | Foreign exchange contracts | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) - Effective Portion | $ (1,454) | $ 5,773 | $ (2,078) | $ 5,773 |
Derivative Financial Instrume61
Derivative Financial Instruments (Narrative) (Details) - USD ($) | Jul. 03, 2017 | Jul. 01, 2015 | Jul. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jul. 01, 2021 | Jul. 01, 2017 | Jun. 21, 2017 | Jun. 20, 2017 | Dec. 31, 2016 | Nov. 21, 2016 |
Derivative [Line Items] | ||||||||||||||
Gain (loss) recognized from settling hedge | $ 29,110,000 | $ (2,863,000) | ||||||||||||
Partial repayment | 3,810,000 | 3,611,000 | ||||||||||||
Decrease in notional amount of derivatives | $ 57,000,000 | |||||||||||||
Line of credit facility, fair value of amount outstanding | $ 63,000,000 | |||||||||||||
Mortgages | Forecast | Minimum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Partial repayment | $ 6,250,000 | |||||||||||||
Mortgages | Forecast | Maximum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Partial repayment | $ 25,000,000 | |||||||||||||
Mortgages | Subsequent Event | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Partial repayment | $ 32,000,000 | |||||||||||||
Mortgages | York Property Mortgage | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Debt instrument term | 7 years | |||||||||||||
Aggregate principal value of debt | $ 325,000,000 | |||||||||||||
Amortization period | 25 years | |||||||||||||
Minimum net worth under agreement | $ 325,000,000 | $ 425,000,000 | ||||||||||||
Mortgages | York Property Mortgage | One-Month LIBOR | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Spread on variable rate | 2.25% | |||||||||||||
Interest rate swaps | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | $ 311,000,000 | $ 311,000,000 | $ 311,000,000 | |||||||||||
Interest rate swaps | Mortgages | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative contract term | 2 years | |||||||||||||
Interest rate swaps | Mortgages | York Property Mortgage | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative contract term | 2 years | |||||||||||||
Fixed interest rate on hedge | 0.877% | |||||||||||||
Effective interest rate | 3.127% | 3.127% | 3.127% | |||||||||||
Interest rate swaps | Credit Facility Borrowings | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | $ 63,000,000 | $ 63,000,000 | $ 63,000,000 | |||||||||||
Interest rate collar | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | $ 278,300,000 | $ 278,300,000 | $ 278,300,000 | |||||||||||
Interest rate collar | Mortgages | York Property Mortgage | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative contract term | 5 years | |||||||||||||
Interest rate collar | Mortgages | York Property Mortgage | Minimum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Effective interest rate | 4.167% | 4.167% | 4.167% | |||||||||||
Interest rate collar | Mortgages | York Property Mortgage | Forecast | Minimum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Fixed interest rate on hedge | 1.917% | |||||||||||||
Interest rate collar | Mortgages | York Property Mortgage | Forecast | Maximum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Fixed interest rate on hedge | 3.75% | |||||||||||||
Effective interest rate | 6.00% | |||||||||||||
Foreign exchange contracts | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivative | $ 197,900,000 | $ 197,900,000 | $ 197,900,000 | |||||||||||
Derivative liability, net | 1,400,000 | 1,400,000 | $ 3,700,000 | 1,400,000 | 3,700,000 | $ 3,600,000 | ||||||||
Designated as Hedging Instruments | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss in Net Income | (622,000) | 0 | (622,000) | 0 | ||||||||||
Net investment hedges | Designated as Hedging Instruments | Foreign exchange contracts | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional amount of derivatives sold | 13,600,000 | 213,800,000 | ||||||||||||
Gain (loss) recognized from settling hedge | (100,000) | 29,100,000 | ||||||||||||
Notional amount of derivative | $ 49,700,000 | 49,700,000 | 49,700,000 | |||||||||||
Cash flow hedges | Designated as Hedging Instruments | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss in Net Income | (622,000) | 0 | (622,000) | 0 | ||||||||||
Non-operating (expense) income | Cash flow hedges | Designated as Hedging Instruments | Interest rate collar | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss in Net Income | $ (622,000) | $ 0 | $ (622,000) | $ 0 | ||||||||||
Cash | Mortgages | Subsequent Event | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Partial repayment | $ 7,000,000 |
Sale of Pink Diamond (Details)
Sale of Pink Diamond (Details) - USD ($) $ in Thousands | Apr. 04, 2018 | May 10, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | |||||||
Beneficial ownership interest in jointly held inventory | 50.00% | 50.00% | |||||
Advances on inventory purchases | $ 34,200 | $ 34,200 | |||||
Product Information [Line Items] | |||||||
Inventory | $ 131,193 | 205,099 | $ 131,193 | 205,099 | $ 159,043 | ||
Cost of inventory sales | 22,255 | $ 7,381 | 93,662 | $ 18,119 | |||
Pink Diamond | |||||||
Product Information [Line Items] | |||||||
Inventory | $ 68,400 | $ 68,400 | |||||
Sale of inventory | $ 71,200 | ||||||
Pink Diamond | Forecast | |||||||
Product Information [Line Items] | |||||||
Gain | $ 500 | ||||||
Cost of inventory sales | $ 70,700 |
Supplemental Condensed Consol63
Supplemental Condensed Consolidated Balance Sheet Information (Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Prepaid Expenses and Other Current Assets | ||||
Prepaid expenses | $ 27,293 | $ 20,436 | $ 17,906 | |
Derivative financial instruments (see Note 8) | 308 | 30,340 | 12,828 | |
Other | [1] | 17,854 | 25,831 | 11,041 |
Total Prepaid Expenses and Other Current Assets | $ 45,455 | $ 76,607 | $ 41,775 | |
[1] | Other principally includes receivables related to insurance recoveries and, to a much lesser extent, other miscellaneous short-term assets. |
Supplemental Condensed Consol64
Supplemental Condensed Consolidated Balance Sheet Information (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments | |||
Gain (loss) recognized from settling hedge | $ 29,110 | $ (2,863) | |
Designated as Hedging Instruments | Foreign exchange contracts | Net investment hedges | |||
Derivative Instruments | |||
Notional amount of derivatives sold | $ 13,600 | 213,800 | |
Gain (loss) recognized from settling hedge | $ (100) | $ 29,100 |
Supplemental Condensed Consol65
Supplemental Condensed Consolidated Balance Sheet Information (Other Long-Term Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Other Long-Term Assets | ||||
Defined benefit pension plan asset (see Note 6) | $ 86,317 | $ 78,576 | $ 64,141 | |
Equity method investments | [1] | 47,299 | 43,143 | 41,575 |
Trust assets related to deferred compensation liability | 25,128 | 26,713 | 37,686 | |
Restricted cash | [2] | 17,332 | 1,064 | 1,126 |
Other | 16,919 | 15,928 | 14,677 | |
Total Other Long-Term Assets | 192,995 | $ 165,424 | $ 159,205 | |
Funds held in escrow | 15,300 | |||
Other equity method investment | ||||
Other Long-Term Assets | ||||
Equity method investments | $ 5,300 | |||
Ownership interest | 50.00% | |||
[1] | Includes our equity method investments in RM Sotheby's and AMA, as well as a partnership that was formed in the second quarter of 2017 through which artworks are being purchased and sold. As of June 30, 2017, our investment in this partnership was $5.3 million, representing our 50% ownership interest. | |||
[2] | As of June 30, 2017, restricted cash reflected within Other Long-Term Assets principally relates to $15.3 million of funds held in escrow pending the final settlement of a sale. As of December 31, 2016 and June 30, 2016, restricted cash reflected within Other Long-Term Assets primarily consists of segregated cash related to long-term lease arrangements. |
Supplemental Condensed Consol66
Supplemental Condensed Consolidated Balance Sheet Information (Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Other Long-Term Liabilities | |||
Deferred compensation liability | $ 24,477 | $ 25,914 | $ 35,707 |
Acquisition earn-out consideration (see Note 19) | 17,500 | 26,250 | 0 |
Interest rate collar liability (see Note 8) | 3,257 | 5,952 | 16,194 |
Other | 6,623 | 6,964 | 7,022 |
Total Other Long-Term Liabilities | $ 51,857 | $ 65,080 | $ 58,923 |
Supplemental Condensed Consol67
Supplemental Condensed Consolidated Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
(Increase) decrease in: | ||
Prepaid expenses and other current assets | $ 2,342 | $ 2,851 |
Other long-term assets | 794 | 431 |
Income tax receivables and deferred income tax assets | (20,896) | 27,551 |
Decrease in: | ||
Accrued income taxes and deferred income tax liabilities | (2,872) | (7,823) |
Accounts payable and accrued liabilities and other liabilities | (20,575) | (3,145) |
Total changes in other operating assets and liabilities | $ (41,207) | $ 19,865 |
Shareholders' Equity and Divi68
Shareholders' Equity and Dividends (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jan. 29, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Aug. 02, 2017 |
Shares repurchased (in shares) | 740 | 10,989 | ||
Aggregate purchase price | $ 33,940 | $ 282,205 | ||
Average price per share (usd per share) | $ 45.86 | $ 25.68 | ||
Remaining authorized amount | $ 6,300 | |||
Dividend equivalents paid to employees | $ 2,000 | $ 1,400 | ||
Special Dividend | ||||
Dividends, common stock | $ 300,000 | |||
Dividends declared (usd per share) | $ 4.34 | |||
Dividends accrued | $ 11,000 | |||
Subsequent Event | ||||
Remaining authorized amount | $ 6,300 |
Accumulated Other Comprehensi69
Accumulated Other Comprehensive Loss (Components of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 505,418 | |||
Reclassifications from other comprehensive income (loss) | $ 787 | $ 216 | 1,080 | $ 439 |
Total other comprehensive income (loss) | 4,754 | (11,634) | 7,572 | (18,668) |
Ending balance | 542,956 | 570,087 | 542,956 | 570,087 |
Currency Translation Adjustments | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (86,853) | (55,242) | (89,478) | (52,279) |
Other comprehensive income (loss) before reclassifications, net of tax | 6,526 | (16,032) | 9,151 | (18,995) |
Total other comprehensive income (loss) | 6,526 | (16,032) | 9,151 | (18,995) |
Ending balance | (80,327) | (71,274) | (80,327) | (71,274) |
Before reclassifications, tax impacts | 835 | (1,750) | 1,421 | (2,745) |
Qualified Hedging Activity | Cash flow hedges | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (2,826) | (8,795) | (3,664) | (4,306) |
Other comprehensive income (loss) before reclassifications, net of tax | (534) | (2,163) | 219 | (6,875) |
Reclassifications from other comprehensive income (loss) | 572 | 216 | 657 | 439 |
Total other comprehensive income (loss) | 38 | (1,947) | 876 | (6,436) |
Ending balance | (2,788) | (10,742) | (2,788) | (10,742) |
Before reclassifications, tax impacts | (331) | (1,340) | 135 | (4,260) |
Reclassifications, tax impacts | 354 | 134 | 407 | 272 |
Qualified Hedging Activity | Net investment hedges | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 15,994 | 0 | 16,618 | 0 |
Other comprehensive income (loss) before reclassifications, net of tax | (1,454) | 5,773 | (2,078) | 5,773 |
Total other comprehensive income (loss) | (1,454) | 5,773 | (2,078) | 5,773 |
Ending balance | 14,540 | 5,773 | 14,540 | 5,773 |
Before reclassifications, tax impacts | (885) | 3,877 | (1,270) | 3,877 |
Defined Benefit Pension Plan | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (13,855) | (9,201) | (13,834) | (9,619) |
Reclassifications from other comprehensive income (loss) | 215 | 0 | 423 | 0 |
Total other comprehensive income (loss) | (356) | 572 | (377) | 990 |
Ending balance | (14,211) | (8,629) | (14,211) | (8,629) |
Reclassifications, tax impacts | 42 | 0 | 84 | 0 |
Currency translation adjustments | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications, net of tax | (571) | 572 | (800) | 909 |
Net actuarial gain | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Other comprehensive income (loss) before reclassifications, net of tax | 0 | 81 | ||
Reclassifications from other comprehensive income (loss) | 235 | 0 | 462 | 0 |
Before reclassifications, tax impacts | 0 | (81) | ||
Reclassifications, tax impacts | 45 | 0 | 91 | 0 |
Prior service cost amortization | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Reclassifications from other comprehensive income (loss) | (20) | 0 | (39) | 0 |
Reclassifications, tax impacts | (3) | 0 | (7) | 0 |
Accumulated comprehensive loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Ending balance | $ (82,786) | $ (84,872) | $ (82,786) | $ (84,872) |
Accumulated Other Comprehensi70
Accumulated Other Comprehensive Loss (Reclassifications) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustments, net of tax | $ 787 | $ 216 | $ 1,080 | $ 439 |
Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | 926 | 350 | 1,064 | 711 |
Tax effect | (354) | (134) | (407) | (272) |
Reclassification adjustments, net of tax | 572 | 216 | 657 | 439 |
Defined Benefit Pension Plan | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | 257 | 0 | 507 | 0 |
Tax effect | (42) | 0 | (84) | 0 |
Reclassification adjustments, net of tax | 215 | 0 | 423 | 0 |
Prior service cost amortization | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | (23) | 0 | (46) | 0 |
Tax effect | 3 | 0 | 7 | 0 |
Reclassification adjustments, net of tax | (20) | 0 | (39) | 0 |
Net actuarial gain | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | 280 | 0 | 553 | 0 |
Tax effect | (45) | 0 | (91) | 0 |
Reclassification adjustments, net of tax | $ 235 | $ 0 | $ 462 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment for salaries and other cash compensation under employment arrangement | $ 15.4 |
Uncertain Tax Positions (Detail
Uncertain Tax Positions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | |
Income Tax Uncertainties [Abstract] | ||||
Unrecognized tax benefits | $ 20.4 | $ 20.4 | $ 19.5 | $ 19.5 |
Decrease in unrecognized tax benefits | (0.9) | |||
Unrecognized tax benefits that would impact effective tax rate | 9.6 | 9.6 | $ 9.3 | $ 13.7 |
Decrease in unrecognized tax benefits within 12 months | 10.1 | $ 10.1 | ||
Increase in accrual for interest & penalties related to unrecognized tax benefits | $ 0.5 |
Auction Guarantees (Details)
Auction Guarantees (Details) - USD ($) | Aug. 02, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Guarantor Obligations [Line Items] | |||
Outstanding guarantee | $ 9,800,000 | ||
Irrevocable bids that reduce exposure under auction guarantees | 2,700,000 | ||
Estimated fair value of obligation to perform under auction guarantees | 400,000 | $ 600,000 | |
Subsequent Event | |||
Guarantor Obligations [Line Items] | |||
Outstanding guarantee | $ 17,000,000 | ||
Irrevocable bids that reduce exposure under auction guarantees | 2,700,000 | ||
Consignor advances | $ 1,100,000 | ||
Credit Agreement | |||
Guarantor Obligations [Line Items] | |||
Maximum amount of net auction guarantees permissible | $ 600,000,000 |
Share-Based Payments (Narrative
Share-Based Payments (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense (benefit) | $ 5,946 | $ 1,957 | $ 12,015 | $ 7,488 | |
Excess tax benefit related to share-based payment arrangements | 2,600 | ||||
Tax shortfall related to share-based payment arrangements | (1,300) | ||||
Unrecognized compensation expense related to the unvested portion of share-based payments | $ 33,300 | $ 33,300 | |||
Compensation expense is expected to be amortized over a weighted-average period | 2 years 4 months 24 days | ||||
Shares granted (shares) | 772,000 | ||||
Stock options expiration period | 10 years | ||||
Options outstanding and exercisable (shares) | 50,000 | 50,000 | |||
Weighted average exercise price of options outstanding and exercisable (usd per share) | $ 22.11 | $ 22.11 | |||
Weighted average remaining contractual term of outstanding stock options | 2 years 7 months 9 days | ||||
Aggregate intrinsic value of options outstanding | $ 1,600 | $ 1,600 | |||
Number of equity instruments outstanding (shares) | 2,070,000 | 2,070,000 | 2,235,000 | ||
Company's Incentive Compensation Programs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of shares issued | $ 30,800 | ||||
Director's Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense (benefit) | $ 300 | 500 | $ 300 | $ 500 | |
Shares available for future awards (shares) | 125,552 | 125,552 | |||
Number of equity instruments outstanding (shares) | 158,917 | 158,917 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Shares available for future awards (shares) | 2,300,000 | 2,300,000 | |||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Shares available for future awards (shares) | 104,100 | 104,100 | |||
Stock options exercised (shares) | 0 | 0 | |||
Stock options granted (shares) | 0 | 0 | |||
Restricted Shares, RSU's And PSU's | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of share vested | $ 35,900 | $ 13,800 | |||
Minimum | Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Maximum | Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Cliff Vesting | Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (shares) | 369,897 | ||||
Fair value of shares issued | $ 14,600 | ||||
Cliff Vesting | Minimum | Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum vesting percentage of initial performance units awarded | 100.00% | ||||
Cliff Vesting | Maximum | Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (shares) | 739,794 | ||||
Maximum vesting percentage of initial performance units awarded | 200.00% | ||||
Incremental Vesting | Restricted Stock Units (RSUs) | Company's Incentive Compensation Programs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Shares granted (shares) | 401,997 | ||||
Fair value of shares issued | $ 16,200 | ||||
Restructuring charges (net) | Voluntary separation incentive programs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense (benefit) | $ 0 | $ (334) | $ 0 | $ (640) |
Share-Based Payments (Compensat
Share-Based Payments (Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based payment expense (pre-tax) | $ 5,946 | $ 1,957 | $ 12,015 | $ 7,488 |
Total share-based payment expense (after-tax) | 3,940 | 1,609 | 7,997 | 5,410 |
Salaries and related costs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based payment expense (pre-tax) | 5,946 | 2,291 | 12,015 | 8,128 |
Restructuring charges (net) | Voluntary separation incentive programs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total share-based payment expense (pre-tax) | $ 0 | $ (334) | $ 0 | $ (640) |
Share-Based Payments (Restricte
Share-Based Payments (Restricted Shares, RSU's And PSU's Activity) (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Restricted Shares, RSU's and PSU's | |
Beginning Balance (shares) | shares | 2,235 |
Granted (shares) | shares | 772 |
Vested (shares) | shares | (754) |
Canceled (shares) | shares | (183) |
Ending Balance (shares) | shares | 2,070 |
Weighted Average Grant Date Fair Value | |
Beginning Balance (in usd per share) | $ / shares | $ 36.40 |
Granted (in usd per share) | $ / shares | 39.87 |
Vested (in usd per share) | $ / shares | 39.07 |
Canceled (in usd per share) | $ / shares | 38.88 |
Ending Balance (in usd per share) | $ / shares | $ 36.50 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Potential common share excluded from computation of diluted earnings per share | 1 | 1 | 1 | 1 |
Earnings Per Share (Computation
Earnings Per Share (Computation of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||
Net income attributable to Sotheby’s | $ 76,891 | $ 88,964 | $ 65,566 | $ 63,080 |
Less: Net income attributable to participating securities | 1,176 | 1,226 | 1,019 | 821 |
Net income attributable to Sotheby’s common shareholders | $ 75,715 | $ 87,738 | $ 64,547 | $ 62,259 |
Denominator: | ||||
Weighted average common shares outstanding (shares) | 52,716 | 57,104 | 52,866 | 60,063 |
Basic earnings per share - Sotheby’s common shareholders (usd per share) | $ 1.44 | $ 1.54 | $ 1.22 | $ 1.04 |
Numerator: | ||||
Net income attributable to Sotheby’s | $ 76,891 | $ 88,964 | $ 65,566 | $ 63,080 |
Less: Net income attributable to participating securities | 1,176 | 1,226 | 1,019 | 821 |
Net income attributable to Sotheby’s common shareholders | $ 75,715 | $ 87,738 | $ 64,547 | $ 62,259 |
Weighted average effect of dilutive potential common shares: | ||||
Performance share units (shares) | 151 | 458 | 293 | 454 |
Deferred stock units (shares) | 159 | 137 | 157 | 153 |
Stock options (shares) | 28 | 13 | 26 | 12 |
Weighted average dilutive potential common shares outstanding (shares) | 338 | 608 | 476 | 619 |
Weighted average diluted shares outstanding (shares) | 53,054 | 57,712 | 53,342 | 60,682 |
Diluted earnings per share - Sotheby's common shareholders (usd per share) | $ 1.43 | $ 1.52 | $ 1.21 | $ 1.03 |
Acquisition of Art Agency, Pa79
Acquisition of Art Agency, Partners (Narrative) (Details) - USD ($) $ in Thousands | Jan. 11, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||
Acquisition earn-out consideration (see Note 19) | $ 0 | $ 17,500 | $ 0 | $ 26,250 | |||
Goodwill acquired | 0 | 34,490 | |||||
Agency | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill acquired | 28,300 | 0 | 28,339 | ||||
All Other | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill acquired | 6,200 | $ 0 | 6,151 | ||||
Period over which goodwill is tax deductible | 15 years | ||||||
Art Agency, Partners | |||||||
Business Acquisition [Line Items] | |||||||
Initial cash consideration | $ 50,000 | ||||||
Transaction costs | $ 800 | ||||||
Art Agency, Partners | General and Administrative Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related costs | $ 200 | $ 600 | |||||
Art Agency, Partners | Former Owner | |||||||
Business Acquisition [Line Items] | |||||||
Employment agreement term | 5 years | ||||||
Non-compete and non-solicit covenants period after employment agreement | 12 months | ||||||
Art Agency, Partners | Earn Out | |||||||
Business Acquisition [Line Items] | |||||||
Compensation expense related to earn-out arrangement | $ 2,200 | $ 4,400 | 35,000 | ||||
Contingent consideration, current | $ 8,750 | ||||||
Acquisition earn-out consideration (see Note 19) | $ 17,500 | ||||||
Art Agency, Partners | Minimum | Earn Out | |||||||
Business Acquisition [Line Items] | |||||||
Settlement period for earn-out payments | 4 years | ||||||
Art Agency, Partners | Maximum | Earn Out | |||||||
Business Acquisition [Line Items] | |||||||
Maximum annual payments under contingent earn-out agreement | $ 8,750 |
Acquisition of Art Agency, Pa80
Acquisition of Art Agency, Partners (Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Jan. 11, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Allocation of purchase price: | |||||
Goodwill (see Note 5) | $ 50,351 | $ 50,029 | $ 47,916 | $ 13,621 | |
Art Agency, Partners | |||||
Purchase price: | |||||
Initial cash consideration | $ 50,000 | ||||
Working capital adjustment | 1,189 | ||||
Total purchase price | 51,189 | ||||
Allocation of purchase price: | |||||
Net working capital acquired | 1,572 | ||||
Fixed assets and other long-term assets | 173 | ||||
Goodwill (see Note 5) | 34,490 | ||||
Deferred tax assets | 1,094 | ||||
Total purchase price | 51,189 | ||||
Art Agency, Partners | Customer relationships | |||||
Allocation of purchase price: | |||||
Intangible assets | 10,800 | ||||
Art Agency, Partners | Non-compete agreements | |||||
Allocation of purchase price: | |||||
Intangible assets | $ 3,060 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Auction commission revenues from related party | $ 1,000 | $ 100 | $ 4,600 | $ 700 | |
Client payables | 867,856 | 782,903 | 867,856 | 782,903 | $ 511,876 |
Related Party Consignors | |||||
Related Party Transaction [Line Items] | |||||
Client payables | $ 0 | $ 10,600 | $ 0 | $ 10,600 |