Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
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, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 51,613,426 |
CONDENSED CONSOLIDATED INCOME S
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Agency commissions and fees | $ 290,879 | $ 301,768 | $ 456,405 | $ 413,033 |
Inventory sales | 40,106 | 19,937 | 56,342 | 91,314 |
Finance | 9,641 | 13,359 | 19,522 | 26,126 |
Other | 5,010 | 4,795 | 9,163 | 8,695 |
Total revenues | 345,636 | 339,859 | 541,432 | 539,168 |
Expenses: | ||||
Agency direct costs | 59,449 | 54,842 | 94,722 | 76,131 |
Cost of inventory sales | 42,414 | 22,255 | 58,409 | 93,662 |
Cost of finance revenues | 1,793 | 5,078 | 4,056 | 10,115 |
Marketing | 6,276 | 5,951 | 11,998 | 11,862 |
Salaries and related | 96,718 | 88,540 | 175,437 | 154,090 |
General and administrative | 45,671 | 43,362 | 89,484 | 82,313 |
Depreciation and amortization | 7,343 | 5,676 | 14,443 | 11,060 |
Voluntary separation incentive programs, net | 0 | 0 | 0 | (162) |
Restructuring charges | 2,146 | 0 | 2,146 | 0 |
Total expenses | 261,810 | 225,704 | 450,695 | 439,071 |
Operating income | 83,826 | 114,155 | 90,737 | 100,097 |
Interest income | 482 | 367 | 847 | 624 |
Interest expense | (8,894) | (7,572) | (18,207) | (15,105) |
Write-off of credit facility fees | (3,982) | 0 | (3,982) | 0 |
Extinguishment of debt | 0 | 0 | (10,855) | 0 |
Non-operating income | 2,449 | 944 | 3,873 | 2,988 |
Income before taxes | 73,881 | 107,894 | 62,413 | 88,604 |
Income tax expense | 17,838 | 31,468 | 13,702 | 24,176 |
Equity in earnings of investees | 1,234 | 466 | 2,040 | 1,133 |
Net income | 57,277 | 76,892 | 50,751 | 65,561 |
Less: Net (loss) income attributable to noncontrolling interest | (5) | 1 | (9) | (5) |
Net income attributable to Sotheby's | $ 57,282 | $ 76,891 | $ 50,760 | $ 65,566 |
Basic earnings per share - Sotheby’s common shareholders (USD per share) | $ 1.09 | $ 1.44 | $ 0.96 | $ 1.22 |
Diluted earnings per share - Sotheby's common shareholders (USD per share) | $ 1.08 | $ 1.43 | $ 0.95 | $ 1.21 |
Weighted average basic shares outstanding (shares) | 51,780 | 52,716 | 52,122 | 52,866 |
Weighted average diluted shares outstanding (shares) | 52,210 | 53,054 | 52,491 | 53,342 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net income | $ 57,277 | $ 76,892 | $ 50,751 | $ 65,561 |
Other comprehensive (loss) income: | ||||
Currency translation adjustments | (14,206) | 5,955 | (7,006) | 8,351 |
Defined benefit pension plan | 81 | 215 | 163 | 423 |
Total other comprehensive (loss) income | (10,639) | 4,754 | (3,797) | 7,572 |
Comprehensive income | 46,638 | 81,646 | 46,954 | 73,133 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (5) | 1 | (9) | (5) |
Comprehensive income attributable to Sotheby's | 46,643 | 81,645 | 46,963 | 73,138 |
Cash flow hedges | ||||
Other comprehensive (loss) income: | ||||
Hedges | 136 | 38 | 1,306 | 876 |
Net investment hedges | ||||
Other comprehensive (loss) income: | ||||
Hedges | $ 3,350 | $ (1,454) | $ 1,740 | $ (2,078) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 432,357 | $ 544,432 | $ 516,402 |
Restricted cash (see Notes 8 and 11) | 28,979 | 361,578 | 41,258 |
Accounts receivable, net of allowance for doubtful accounts of $9,667, $8,722, and $7,744 | 1,088,569 | 795,239 | 847,332 |
Notes receivable, net of allowance for credit losses of $1,132, $1,253, and $1,290 | 92,770 | 87,746 | 73,217 |
Inventory | 32,639 | 74,483 | 131,193 |
Income tax receivables | 18,051 | 6,601 | 14,825 |
Prepaid expenses and other current assets (see Note 11) | 43,262 | 32,010 | 45,455 |
Total current assets | 1,736,627 | 1,902,089 | 1,669,682 |
Notes receivable, net of allowance for credit losses of $1,525, $1,525, and $0 | 390,507 | 507,538 | 559,605 |
Fixed assets, net of accumulated depreciation and amortization of $239,705, $229,751, and $218,870 | 356,162 | 352,035 | 347,067 |
Goodwill | 55,670 | 50,547 | 50,351 |
Intangible assets, net | 14,613 | 11,492 | 12,407 |
Income tax receivables | 327 | 324 | 434 |
Deferred income taxes | 27,948 | 35,674 | 7,837 |
Other long-term assets (see Note 11) | 229,813 | 227,608 | 192,995 |
Total assets | 2,811,667 | 3,087,307 | 2,840,378 |
Current liabilities: | |||
Client payables | 1,191,581 | 996,197 | 867,856 |
Accounts payable and accrued liabilities | 104,608 | 90,298 | 91,196 |
Accrued salaries and related costs | 62,160 | 94,310 | 54,733 |
Current portion of long-term debt, net | 13,423 | 308,932 | 38,825 |
Accrued income taxes | 23,012 | 8,127 | 21,180 |
Other current liabilities (see Note 10) | 11,785 | 18,762 | 46,211 |
Total current liabilities | 1,406,569 | 1,516,626 | 1,120,001 |
Credit facility borrowings | 63,000 | 196,500 | 531,500 |
Long-term debt, net | 648,411 | 653,003 | 563,762 |
Accrued income taxes | 26,737 | 37,651 | 18,315 |
Deferred income taxes | 14,035 | 15,163 | 11,800 |
Other long-term liabilities (see Note 11) | 46,171 | 51,424 | 51,857 |
Total liabilities | 2,204,923 | 2,470,367 | 2,297,235 |
Commitments and contingencies (see Note 15) | |||
Shareholders’ equity: | |||
Common stock, $0.01 par value, Authorized shares — 200,000,000, Issued shares —70,777,023; 70,378,873; and 70,373,836, Outstanding shares —52,503,235; 52,971,232; and 55,017,175 | 711 | 709 | 708 |
Additional paid-in capital | 458,712 | 453,364 | 442,560 |
Treasury stock shares, at cost — 19,560,792; 18,368,188; and 18,147,641 | (617,048) | (554,551) | (543,995) |
Retained earnings | 830,459 | 779,699 | 726,469 |
Accumulated other comprehensive loss | (66,263) | (62,466) | (82,786) |
Total shareholders’ equity | 606,571 | 616,755 | 542,956 |
Noncontrolling interest | 173 | 185 | 187 |
Total equity | 606,744 | 616,940 | 543,143 |
Total liabilities and shareholders’ equity | $ 2,811,667 | $ 3,087,307 | $ 2,840,378 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 9,667 | $ 8,722 | $ 7,744 |
Allowance for credit losses | 1,132 | 1,253 | 1,290 |
Allowance for Notes, Loans and Financing Receivable, Noncurrent | 1,525 | 1,525 | 0 |
Accumulated depreciation and amortization | $ 239,705 | $ 229,751 | $ 218,870 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Authorized shares (in shares) | 200,000,000 | 200,000,000 | 200,000,000 |
Issued shares (in shares) | 71,173,857 | 70,830,184 | 70,817,787 |
Outstanding shares (in shares) | 51,613,065 | 52,461,996 | 52,670,146 |
Treasury stock shares (in shares) | 19,560,792 | 18,368,188 | 18,147,641 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities: | ||
Net income attributable to Sotheby's | $ 50,760 | $ 65,566 |
Adjustments to reconcile net income attributable to Sotheby's to net cash provided by operating activities: | ||
Extinguishment of debt | 10,855 | 0 |
Write-off of credit facility fees | 3,982 | 0 |
Depreciation and amortization | 14,443 | 11,060 |
Deferred income tax expense | 2,873 | 11,551 |
Share-based payments | 14,689 | 12,015 |
Net pension benefit | (1,626) | (2,447) |
Inventory writedowns and bad debt provisions | 8,106 | 7,470 |
Amortization of debt issuance costs | 877 | 827 |
Equity in earnings of investees | (2,040) | (1,133) |
Other | 947 | 453 |
Changes in assets and liabilities: | ||
Accounts receivable | (285,172) | (359,192) |
Client payables | 205,791 | 330,368 |
Inventory | 33,680 | 21,026 |
Changes in other operating assets and liabilities (see Note 12) | (41,370) | (43,307) |
Net cash provided by operating activities | 16,795 | 54,257 |
Investing Activities: | ||
Funding of notes receivable | (66,608) | (101,896) |
Collections of notes receivable | 161,192 | 124,879 |
Capital expenditures | (19,075) | (8,420) |
Acquisitions, net of cash acquired | (5,702) | 0 |
Funding of investments | (64) | (5,537) |
Distributions from investees | 2,179 | 2,550 |
Proceeds from the sale of equity investment | 0 | 2,110 |
Proceeds from company-owned life insurance | 0 | 2,100 |
Settlement of net investment hedges | (5,921) | 29,110 |
Net cash provided by investing activities | 66,001 | 44,896 |
Financing Activities: | ||
Proceeds from credit facility borrowings | 108,000 | 28,500 |
Repayments of credit facility borrowings | (241,500) | (62,000) |
Repayments of York Property Mortgage | (3,978) | (3,810) |
Settlement of 2022 Senior Notes, including call premium | (307,875) | 0 |
Debt issuance and other borrowing costs | (3,457) | (23) |
Repurchases of common stock | (62,497) | (33,940) |
Dividends paid | 0 | (2,375) |
Funding of employee tax obligations upon the vesting of share-based payments | (9,903) | (14,573) |
Net cash used by financing activities | (521,210) | (88,221) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (6,734) | 7,859 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (445,148) | 18,791 |
Cash, cash equivalents, and restricted cash at beginning of period | 923,926 | 556,201 |
Cash, cash equivalents, and restricted cash at end of period | $ 478,778 | $ 574,992 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Company Overview —Sotheby's (or the "Company") offers collectors the opportunity to connect with and transact in the world's most extraordinary art and luxury goods, which in this report may collectively be referred to as "art," "works of art," "artwork," or "property." Auctioneers since 1744, today we present auctions in ten different salesrooms, including New York, London, Hong Kong and Paris. We also offer collectors a variety of innovative art-related services, including the brokerage of private art sales, private jewelry sales through Sotheby's Diamonds, exclusive private selling exhibitions, art-related financing, and art advisory services, as well as retail wine locations in New York and Hong Kong. Accounting Principles —The unaudited Condensed Consolidated Financial Statements included herein have been prepared by the management of Sotheby’s 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. The interim results presented in our Condensed Consolidated Income Statements are not necessarily indicative of results for a full year. See Note 2 for information about the seasonality of our business. We urge you to read these unaudited Condensed Consolidated Financial Statements in conjunction with the information included in our 2017 Form 10-K filed with the SEC on March 1, 2018. 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 loss attributable to the minority owner of Sotheby's Beijing is reported as "Net Loss (Income) 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 may significantly influence, but not control, the investee, are accounted for using the equity method. Under the equity method, our share of investee earnings or losses is recorded in our Condensed Consolidated Income Statements within Equity in Earnings of Investees. Our interest in the net assets of these investees is recorded on our Condensed Consolidated Balance Sheets within Other Long-Term Assets. 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. 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. Revenue Recognition —In May 2014, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") which amends revenue recognition guidance and requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is codified in U.S. GAAP under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers . We adopted ASC 606 on January 1, 2018 using the full retrospective method. The adoption of ASC 606 did not impact the timing of our revenue recognition, but it changed the presentation of certain revenues and expenses previously reported on a net basis in our Condensed Consolidated Income Statements. Specifically, the following items previously reported on a net basis within Agency Commissions and Fees are now reported on a gross basis within Agency Direct Costs: (i) fees owed to the counterparties in auction guarantee risk sharing arrangements and (ii) fees owed to third parties who introduce us to auction or private sale consignors. In addition, consignor expense recoveries and buyer shipping fees previously reported on a net basis within Agency Direct Costs are now reported on a gross basis within Agency Commission and Fees. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of the retrospective adoption of ASC 606 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 . Statement of Cash Flows —In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , which updated the guidance on how certain cash receipts and cash payments should be presented and classified within the statement of cash flows. We retrospectively adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 changed how we classify cash proceeds received from our investment in company-owned life insurance ("COLI"), which is held in a rabbi trust and used to fund certain deferred compensation liabilities. Prior to the adoption of ASU 2016-15, COLI proceeds were classified as cash inflows from operating activities, but are now classified as cash inflows from investing activities. The adoption of ASU 2016-15 also required us to make certain accounting policy elections with respect to the statement of cash flows. First, ASU 2016-15 clarifies that COLI premiums paid may be classified as cash outflows from operating or investing activities, or a combination of both. In connection with the adoption of ASU 2016-15, we made an accounting policy election to classify COLI premiums paid as cash outflows from operating activities, consistent with our previous presentation of such payments. Second, ASU 2016-15 allows distributions received from equity method investees to be classified using either the cumulative earnings approach or the nature of distribution approach. In connection with the adoption of ASU 2016-15, we made an accounting policy election to classify distributions received from equity method investees using the cumulative earnings approach, consistent with our previous presentation of such distributions. The other aspects of ASU 2016-15 did not result in a change to our existing accounting policies for the preparation of the statement of cash flows. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2016-15 on our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 . In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows , to add and clarify guidance on the classification and presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In particular, ASU 2016-18 requires that restricted cash and restricted cash equivalents be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period totals disclosed in the statement of cash flows. Transfers between restricted and unrestricted cash accounts are not to be reported within the statement of cash flows. Only restricted cash receipts or payments directly with third parties are to be reported in the statement of cash flows as either an operating, investing, or financing activity, depending on the nature of the transaction. We retrospectively adopted ASU 2016-18 on January 1, 2018. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2016-18 on our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 . (See Note 11 for information related to our restricted cash balances.) Presentation of Pension and Postretirement Costs —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 that the service cost component of net periodic pension cost be presented in the same statement of operations line item as other employee compensation costs, while the remaining components of net periodic pension cost be presented outside of operating income (loss). We retrospectively adopted ASU 2017-07 on January 1, 2018. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2017-07 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 . (See Note 7 for information related to our defined benefit pension plan in the U.K.) Summary of Adjustments to Prior Period Presentation —The following table summarizes the impact of the retrospective adoption of ASC 606 and ASU 2017-07 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 (in thousands of dollars): Three months ended June 30, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 276,807 $ 24,961 $ — $ 301,768 Total revenues $ 314,898 $ 24,961 $ — $ 339,859 Expenses: Agency direct costs $ 29,881 $ 24,961 $ — $ 54,842 Salaries and related $ 87,297 $ — $ 1,243 $ 88,540 Total expenses $ 199,500 $ 24,961 $ 1,243 $ 225,704 Operating income $ 115,398 $ — $ (1,243 ) $ 114,155 Non-operating (expense) income $ (299 ) $ — $ 1,243 $ 944 Net income attributable to Sotheby's $ 76,891 $ — $ — $ 76,891 Six months ended June 30, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 376,300 $ 36,733 $ — $ 413,033 Total revenues $ 502,435 $ 36,733 $ — $ 539,168 Expenses: Agency direct costs $ 39,398 $ 36,733 $ — $ 76,131 Salaries and related $ 151,643 $ — $ 2,447 $ 154,090 Total expenses $ 399,891 $ 36,733 $ 2,447 $ 439,071 Operating income $ 102,544 $ — $ (2,447 ) $ 100,097 Non-operating income $ 541 $ — $ 2,447 $ 2,988 Net income attributable to Sotheby's $ 65,566 $ — $ — $ 65,566 The following table summarizes the impact of the retrospective adoption of ASU 2016-15 and ASU 2016-18 on our Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017 (in thousands of dollars): As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Changes in other operating assets and liabilities $ (41,207 ) $ (2,100 ) $ — $ (43,307 ) Net cash provided by operating activities $ 56,357 $ (2,100 ) $ — $ 54,257 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,100 $ — $ 2,100 Decrease in restricted cash $ 7,749 $ — $ (7,749 ) $ — Net cash provided by investing activities $ 50,545 $ 2,100 $ (7,749 ) $ 44,896 Financing Activities: Increase in restricted cash related to York Property Mortgage $ (2,799 ) $ — $ 2,799 $ — Net cash used by financing activities $ (91,020 ) $ — $ 2,799 $ (88,221 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash $ 4,489 $ — $ 3,370 $ 7,859 Increase (decrease) in cash, cash equivalents, and restricted cash (a) $ 20,371 $ — $ (1,580 ) $ 18,791 Cash, cash equivalents, and restricted cash at beginning of period (a) $ 496,031 $ — 60,170 $ 556,201 Cash, cash equivalents, and restricted cash at end of period (a) $ 516,402 $ — $ 58,590 $ 574,992 (a) Restricted cash is included only in the adjusted balances, reflecting the retrospective adoption of ASU 2016-18. |
Seasonality of Business
Seasonality of Business | 6 Months Ended |
Jun. 30, 2018 | |
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 80% and 82% of our total annual Net Auction Sales in 2017 and 2016, respectively, with auction commission revenues comprising approximately 66% and 75% , of our total revenues, respectively. 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, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting 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 CEO, 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 works of art on consignment and match sellers (also known as consignors) to buyers through the auction or private sale process. In both auction and private sale transactions, we act as exclusive agent for the seller. Prior to offering a work of art for sale, we perform due diligence activities to authenticate and determine the ownership history and condition of the consigned artwork. 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 that are conducted across various collecting categories, all of 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 leverages the art expertise of the Agency segment, 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, short and long-term planning, and provides advice to artists and artists' estates. In addition, from time-to-time, AAP brokers private art sales for its advisory clients. Our advisory services are classified within All Other for segment reporting purposes, along with our retail wine business, brand licensing activities, and the results from certain equity method investments. The following table presents our segment information for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, 2018 Agency SFS All Other Reconciling items Total Revenues $ 327,445 $ 11,823 $ 8,550 $ (2,182 ) (a) $ 345,636 Segment income before taxes $ 67,173 $ 6,891 $ 1,051 $ (1,234 ) (b) $ 73,881 Three Months Ended June 30, 2017 Revenues (c) $ 319,474 $ 16,362 $ 7,026 $ (3,003 ) (a) $ 339,859 Segment income before taxes $ 97,226 $ 8,879 $ 2,255 $ (466 ) (b) $ 107,894 Six Months Ended June 30, 2018 Revenues $ 507,178 $ 24,239 $ 14,732 $ (4,717 ) (a) $ 541,432 Segment income before taxes $ 57,467 $ 15,402 $ 2,439 $ (12,895 ) (b) $ 62,413 Six Months Ended June 30, 2017 Revenues (c) $ 499,665 $ 30,733 $ 13,377 $ (4,607 ) (a) $ 539,168 Segment income before taxes $ 68,804 $ 16,212 $ 4,721 $ (1,133 ) (b) $ 88,604 (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. (c) Agency segment revenue for the three and six months ended June 30, 2017 has been recast to reflect the retrospective adoption of ASC 606. See Notes 1 and 4 . The table below presents a reconciliation of total segment income before taxes to consolidated income before taxes for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Agency $ 67,173 $ 97,226 $ 57,467 $ 68,804 SFS 6,891 8,879 15,402 16,212 All Other 1,051 2,255 2,439 4,721 Segment income before taxes 75,115 108,360 75,308 89,737 Unallocated amounts and reconciling items: Extinguishment of debt — — (10,855 ) — Equity in earnings of investees (a) (1,234 ) (466 ) (2,040 ) (1,133 ) Income before taxes $ 73,881 $ 107,894 $ 62,413 $ 88,604 (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, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, 2018 December 31, 2017 June 30, 2017 Agency $ 2,227,296 $ 2,395,429 $ 2,130,731 SFS 494,420 608,713 663,500 All Other 43,625 40,566 48,051 Total segment assets 2,765,341 3,044,708 2,842,282 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 46,326 42,599 23,096 Reconciling item related to SFS (a) — — (25,000 ) Consolidated assets $ 2,811,667 $ 3,087,307 $ 2,840,378 (a) As of June 30, 2017, segment assets for SFS included 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, 2018 , the year ended December 31, 2017 , and the six months ended June 30, 2017 were attributable to the Agency segment. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The Agency segment, which is our predominant source of revenue, earns commissions and fees by acting as agent for clients wishing to sell their artworks through the auction or private sale process. To a much lesser extent, the Agency segment also earns revenues from the sale of artworks that are owned by Sotheby's. Outside of the Agency segment, we earn revenues from art advisory services, retail wine sales, and brand licensing activities, which are aggregated and classified within All Other for segment reporting purposes, as well as from the art-related financing activities conducted by SFS. The revenues earned by the Agency and All Other segments are accounted for in accordance with ASC 606, Revenue from Contracts with Customers , which was retrospectively adopted on January 1, 2018. The revenues earned by SFS are not within the scope of ASC 606. (See Note 1 for information regarding the retrospective adoption of ASC 606.) The following table summarizes our revenues by segment and type for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Agency SFS All Other Total Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 257,799 $ — $ — $ 257,799 $ 266,949 $ — $ — $ 266,949 Auction related fees, net (a) 6,081 — — 6,081 16,045 — — 16,045 Private sale commissions 24,016 — 500 24,516 14,827 — — 14,827 Other Agency commissions and fees 2,359 — 124 2,483 3,947 — — 3,947 Total Agency commissions and fees 290,255 — 624 290,879 301,768 — — 301,768 Inventory sales 37,190 — 2,916 40,106 17,706 — 2,231 19,937 Advisory revenues — — 1,156 1,156 — — 1,431 1,431 License fee and other revenues — — 3,854 3,854 — — 3,364 3,364 Total revenue from contracts with customers 327,445 — 8,550 335,995 319,474 — 7,026 326,500 Finance revenue: Interest and related fees — 9,641 — 9,641 — 13,359 — 9,881 13,359 Total revenues $ 327,445 $ 9,641 $ 8,550 $ 345,636 $ 319,474 $ 13,359 $ 7,026 $ 339,859 Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Agency SFS All Other Total Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 389,929 — $ — — $ — $ 389,929 $ 357,565 — $ — — $ — $ 357,565 Auction related fees, net (a) 17,824 — — — — 17,824 21,498 — — — — 21,498 Private sale commissions 43,501 — — — 500 44,001 28,047 — — — — 28,047 Other Agency commissions and fees 4,351 — — — 300 4,651 5,923 — — — — 5,923 Total Agency commissions and fees 455,605 — 800 456,405 413,033 — — 413,033 Inventory sales 51,573 — — — 4,769 56,342 86,632 — 4,682 91,314 Advisory revenues — — — — 2,406 2,406 — — — — 2,829 2,829 License fee and other revenues — — — — 6,757 6,757 — — — — 5,866 5,866 Total revenue from contracts with customers 507,178 — 14,732 521,910 499,665 — 13,377 513,042 Finance revenue: Interest and related fees — — 19,522 — — 19,522 — — 26,126 — — 26,126 Total revenues $ 507,178 $ 19,522 $ 14,732 $ 541,432 $ 499,665 $ 26,126 $ 13,377 $ 539,168 (a) Auction Related Fees, net includes the net overage or shortfall attributable to auction guarantees, consignor expense recoveries, and shipping fees charged to buyers. Auction Commissions —In our role as auctioneer, we accept works of art on consignment and match sellers (also known as consignors) to buyers through the auction process. In an auction transaction, we act as exclusive agent for the seller. The terms of our arrangement with the seller are stipulated in a consignment agreement, which, among other things, entitles us to collect and retain an auction commission as compensation for our service. Our auction commission includes a premium charged to the buyer and, to a lesser extent, a commission charged to the seller, both of which are calculated as a percentage of the hammer price of the property sold at auction. In certain situations, in order to secure a high-value consignment, we may not charge a seller's commission and/or may share a portion of our buyer's premium with the seller. In situations when we share a portion of our buyer's premium with the seller, our auction commission revenue is recorded net of the amount paid to the seller. Prior to the date of the auction, we perform a number of activities in connection with our obligations under an auction consignment agreement, which may include: (i) transporting the consigned artwork to the location of the auction sale; (ii) performing due diligence to authenticate and determine the ownership history and condition of the consigned artwork; (iii) preparing the consigned artwork for auction (e.g., framing and cleaning); (iv) preparing catalogue content related to the consigned artwork (e.g., photography and description of the artwork); (v) marketing the artwork through exhibitions and advertising campaigns; (vi) establishing presale estimates for the consigned artwork in response to an assessment of buyer demand and overall market conditions; and (vii) conducting pre-auction bidder registration and qualification. The services associated with these activities are necessary components of our auction service, which culminates in the creation of a public marketplace for the sale and purchase of art that, if successful, results in the matching of the seller to a buyer upon the fall of the auctioneer's hammer. Upon the fall of the auctioneer's hammer, the highest bidder becomes legally obligated to pay the aggregate purchase price (i.e., the hammer price plus buyer's premium) and the consignor is legally obligated to relinquish the property in exchange for the net sale proceeds (i.e., the hammer price less any seller's commission and expense recoveries). However, if the bidding for an individual artwork does not reach its reserve price (i.e., the confidential minimum hammer price at which the consignor has agreed to sell), the sale is not completed, and we are not entitled to collect a commission. Accordingly, the consignor receives the benefit of our auction service only when the sale is completed, upon the fall of the auctioneer's hammer, at which point in time we recognize our auction commission revenue. Under the standard terms and conditions of our auction 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 is cancelled, and the property is returned to the consignor. We continually evaluate the collectability of amounts due from individual buyers and only recognize auction commission revenue when the collection of the amount due from the buyer is probable. If we determine that payment from the buyer is not probable, a cancelled sale is recorded in the period in which that determination is made and the associated Accounts Receivable balance, including our auction commission, is reversed. Our judgments regarding the collectability of Accounts Receivable are based on an assessment of the buyer's payment history, discussions with the buyer, and the value of any property held as security against the buyer's payment obligation. Our judgments with respect to the collectability of amounts due from buyers for auction purchases may prove, with the benefit of hindsight, to be incorrect. Historically, cancelled sales have not been material in relation to the aggregate hammer price of property sold at auction. For artworks purchased at auction, the buyer is provided a five-year guarantee of authenticity. Subject to certain limitations, this guarantee generally attests to the authorship of the artwork. In the event a valid claim is made by the buyer under the authenticity guarantee, the sale is rescinded and we are obligated to refund the aggregate purchase price to the buyer. In these circumstances, the consignor is obligated to return any net sale proceeds paid to them. Outside of a valid authenticity claim, the buyer has no right to rescind an auction sale. The authenticity guarantee provided to the auction buyer is a product warranty that is associated with the provision of our auction service; it may not be purchased separately and does not provide an additional service to the buyer. Auction Guarantee Overage (Shortfall) —From time-to-time, in the ordinary course of business, we will provide a guarantee to the consignor that their consigned artwork will achieve a specified minimum sale price at auction. This type of arrangement is known as an auction guarantee. If the property offered under an auction guarantee sells above the minimum guaranteed price, we are generally entitled to a share of 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 shortfall between the sale price at auction and the amount of the auction guarantee. If the property offered under the auction guarantee does not sell, we must pay the amount of the auction guarantee to the consignor and then 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. In situations when an item of guaranteed property does not sell and we take ownership of the property, it is taken into Inventory and recorded on our balance sheet 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). We may reduce our financial exposure under auction guarantees through contractual risk sharing arrangements. Such auction guarantee risk sharing arrangements include irrevocable bid arrangements and, from time-to-time, partner sharing arrangements. An irrevocable bid is an arrangement under which a counterparty irrevocably 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, as their fee, a share of the buyer's premium earned on the sale and/or a share of any auction guarantee overage. Such fees paid to irrevocable bid counterparties are recorded within Agency Direct Costs in the period of the sale. If the irrevocable bid is the winning bid, the counterparty may sometimes receive a fee as compensation for providing the irrevocable bid. This fee is netted against the counterparty's obligation to pay the full purchase price (i.e., the hammer price plus buyer's premium) and is recorded as a reduction to our auction commission revenue in the period of the sale. 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, if the property sells, the counterparty in a partner sharing arrangement is generally entitled to receive, as their fee, a share of the buyer's premium earned on the sale and/or a share of any auction guarantee overage. Such fees paid to the counterparties in auction guarantee partner sharing arrangements are recorded within Agency Direct Costs in the period of the sale. Similar to a standard auction transaction, for property sold under an auction guarantee, the consignor receives the benefit of our auction service only when the sale is completed, upon the fall of the auctioneer's hammer, at which point in time we recognize our auction commission revenue and any auction guarantee overage or shortfall. In the event that the property offered under an auction guarantee sells for a hammer price that is less than the minimum guaranteed price, the amount of the shortfall is recorded net of any buyer’s premium commission earned on the sale. An auction guarantee shortfall may also be recognized prior to the date of the auction if we determine that it is probable that the expected selling price of the property, including buyer's premium, will not exceed the amount of the auction guarantee. Consignor Expense Recoveries —We incur various direct costs in the fulfillment of our auction service. These costs principally relate to the transport of consigned artworks to the location of the auction sale, various sale marketing activities including catalogue production and distribution, and the exhibition of consigned artworks. Auction consignment agreements sometimes permit us to recover all or a portion of these costs from the consignor through a deduction from their net sale proceeds if the item is sold at auction. Such recoveries are recognized as revenue in the period of the auction sale. Buyer Shipping Fees —Auction buyers may be charged a fee for shipping services associated with their purchased property. Such fees are recognized as revenue in the period when the shipping service is provided. Private Sale Commissions —Private sale commission revenues are earned through the direct brokering of purchases and sales of art. Private sales are generally initiated by a client wishing to sell their artwork (i.e., the consignor) with Sotheby's acting as their exclusive agent in the transaction. Such arrangements are evidenced by a legally binding consignment agreement between us and the seller, which outlines the terms of the arrangement, including the desired sale price and the amount or rate of commission that we may earn if a sale is completed, as well as, in certain instances, the period of time over which the artwork may be offered for private sale. The terms of the private sale consignment agreement create our sole performance obligation, which is to broker a legally binding sale of the consigned artwork to a qualified buyer as exclusive agent for the seller. In connection with our efforts to fulfill our performance obligation under a private sale consignment agreement, we perform a number of activities, which may include: (i) transporting the consigned artwork to the location of the sale; (ii) performing due diligence to authenticate and determine the ownership history and condition of the consigned artwork; (iii) preparing the consigned artwork for sale (e.g., framing and cleaning); (iv) providing advice as to an appropriate asking price for the consigned artwork in response to an assessment of buyer demand and overall market conditions; (v) marketing the artwork to a select group of potential buyers or through theme-based private sale exhibitions; and (vi) completing all relevant administrative tasks related to completion of the sale. In certain situations, when completing a private sale, we may execute a legally binding agreement with the buyer stipulating the terms pursuant to which the buyer will purchase the consigned artwork. In situations when a legally binding buyer agreement is not executed, only an invoice is issued to provide the buyer with the information necessary for finalizing the transaction (e.g., the amount owed and any associated taxes and royalties, the payment due date, payment instructions, etc.). The consignor receives the benefit of our private sale service only upon the completion of a legally binding sale. For private sales where we execute a buyer agreement, the consignor receives the benefit of our private sale service and revenue is recognized at the point in time when the agreement is signed by the buyer. At this point in time, the buyer becomes legally obligated to pay the purchase price and the consignor is legally obligated to relinquish the property in exchange for the net sale proceeds (i.e., the purchase price less our commission). In the absence of an executed buyer agreement, the consignor receives the benefit of our private sale service and revenue is recognized at the point in time when the full purchase price is paid by the buyer. At this point in time, we have performed all of our service obligations in the transaction and the consignor is legally obligated to relinquish the property in exchange for the net sale proceeds. If we are not successful in completing a sale according to the terms of the private sale consignment agreement, we are not entitled to collect a commission. For artworks purchased in a private sale transaction, the buyer is provided a guarantee of authenticity for a period of up to five years. Subject to certain limitations, this guarantee generally attests to the authorship of the artwork. In the event a valid claim is made by the buyer under the authenticity guarantee, the sale is rescinded and we are obligated to refund the purchase price to the buyer. In these circumstances, the consignor is obligated to return any net sale proceeds paid to them. Outside of a valid authenticity claim, the buyer has no right to rescind a completed private sale. The authenticity guarantee provided to the buyer is a product warranty that is associated with the provision of our private sale service; it may not be purchased separately and does not provide an additional service to the buyer. Other Agency Commissions and Fees —From time-to-time, we earn commissions and fees connected with sales of art brokered by third parties. These commissions and fees are recognized at a point in time in the period when we receive confirmation from the third parties that the sale has been completed. Inventory Sales —From time-to-time, the Agency segment earns revenue from the sale of: (i) artworks that have been obtained as a result of the failure of guaranteed property to sell at auction; (ii) artworks that have been purchased opportunistically, including property acquired for sale at auction; and (iii) other objects obtained incidental to the auction process (e.g., as a result of buyer default). Inventory sales may be consummated through either a private sale transaction or through an auction sale. For artworks that are sold privately, an executed agreement with the buyer is used to document the terms and conditions of the transaction. For artworks that are sold at auction, the sale is completed pursuant to the conditions of sale published in the corresponding auction catalogue. Regardless of the method of sale, title and control of the artwork are transferred to the buyer only upon payment of the full purchase price. Accordingly, sales of inventory are recognized at a point in time in the period when title and control of the artwork is transferred to the buyer. Advisory Revenues —Advisory revenues consist of fees earned from providing art-related advice to certain clients. These arrangements may be evidenced by a legally binding written retainer agreement with the client, which outlines the nature of the services to be provided and the amount of fees to be earned. Advisory retainer agreements are typically one year in duration. Advisory services are also sometimes provided on the basis of a verbal agreement with the client. For advisory arrangements with written retainer agreements, revenues are recognized ratably over time, based on the contractual period and as services are provided to the client. In the absence of a written retainer agreement, revenue recognition is deferred until we have performed our substantive service obligations and the client has made payment for those services, thereby evidencing the terms of the arrangement. License Fee Revenues —Prior to 2004, we were engaged in the marketing and brokerage of luxury residential real estate sales through Sotheby's International Realty ("SIR"). In 2004, we sold SIR to a subsidiary of Realogy Corporation ("Realogy"), formerly Cendant Corporation. In conjunction with the sale, we entered into an agreement with Realogy to license the SIR trademark and certain related trademarks for an initial 50 -year term with a 50 -year renewal option (the "Realogy License Agreement"). The Realogy License Agreement is applicable worldwide.The Realogy License Agreement provides for an ongoing license fee during its term based on the volume of commerce transacted under the licensed trademarks. We also license the Sotheby's name for use in connection with the art auction business in Australia, and art education services in the U.S. and the U.K. The license fees earned from these arrangements are sales-based and are recognized in the periods in which the underlying sales occur. Sales, Use and Value-Added Taxes —Sales, use and value-added taxes assessed by governmental authorities that are both imposed on and concurrent with revenue-producing transactions between us and our clients are reported on a net basis within revenues. Resale Royalties —In certain foreign jurisdictions, various resale royalties and other fees are imposed on auctioneers upon the completion of an auction sale. These royalties and fees are reported on a gross basis within Agency Direct Costs. Contract Balances —Following the completion of an auction or private sale, we invoice the buyer for the aggregate purchase price of the property, which includes our buyer's premium or private sale commission, as well as any applicable taxes and royalties. The amount owed by the buyer is recorded within Accounts Receivable, and the amount of net sale proceeds due to the seller is recorded within Client Payables. Upon collection from the buyer, we are obligated to remit the net proceeds to the seller after deducting our commissions and related fees, as well as any applicable taxes and royalties, which are ultimately paid to the appropriate taxing authority or royalty association. 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 after 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 seller does not provide matched payment terms (i.e., we pay the seller before receiving payment from the buyer), the receivable balance is reclassified from Accounts Receivable to Notes Receivable on our Condensed Consolidated Balance Sheets. See Note 5 for information on Agency segment Notes Receivable. When the buyer's due date is extended to a date that is one year or less from the sale date, as a practical expedient, we do not record a discount to our commission to account for the effects of the financing component. However, in the limited circumstances when the buyer's due date is extended to a date that is beyond one year from the sale date, we record a discount to our commission revenue to reflect the financing component, if material. The table below summarizes the balances related to our contracts with customers as of and for the six months ended June 30, 2018 and 2017 (in thousands of dollars): June 30, June 30, Accounts Receivable Balance as of beginning of period $ 783,706 $ 424,418 Balance as of end of period $ 1,076,152 $ 837,200 Increase/(decrease) $ 292,446 $ 412,782 Client Payables Balance as of beginning of period $ 996,197 $ 511,876 Balance as of end of period $ 1,191,581 $ 867,856 Increase/(decrease) $ 195,384 $ 355,980 The balances of Accounts Receivable presented in the table above relate almost entirely to amounts due from auction and private sale buyers. To a much lesser extent, they also include amounts owed to us in relation to our advisory services and brand licensing activities. Interest and related fees due to SFS, which are recorded within Accounts Receivable on our Condensed Consolidated Balance Sheets, are excluded from this table because they are not considered to be contract balances under ASC 606. The net increases in Accounts Receivable and Client Payables for the periods ending June 30, 2018 and 2017 are largely the result of auction sales occurring in the second quarter for which the sale proceeds were not yet collected from buyers and remitted to sellers as of the balance sheet date. When compared to June 30, 2017, the increases in Accounts Receivable and Client Payables are principally due to the higher levels of auction and private sales through the second quarter of 2018, a decrease in early consignor settlements (as discussed in the following paragraph), and the general timing of buyer and consignor settlements. In certain instances, and subject to management approval under our internal corporate governance policy, we may pay the net sale proceeds to the seller 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, 2018 , December 31, 2017 , and June 30, 2017 , Accounts Receivable included $75.3 million , $92.1 million , and $85.3 million , respectively, related to situations when we paid the seller all or a portion of the net sales proceeds before payment was collected from the buyer. As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Accounts Receivable (net) also included $26.9 million , $53.8 million , and $33.4 million , respectively, related to situations when we allowed the buyer to take possession of the property before making payment. Deferred revenue balances are generally not material. However, as of June 30, 2017 , our Condensed Consolidated Balance Sheets include a significant deferred revenue balance related to the sale of an item of Inventory. (See Note 10 .) Contract Costs —We incur various direct costs in the fulfillment of our auction services. These costs principally relate to the transport of consigned artworks to the location of the auction sale, various sale marketing activities including catalogue production and distribution, and the exhibition of consigned artworks. A large portion of these costs are funded prior to the auction and are recorded on our Condensed Consolidated Balance Sheets within Prepaid Expenses and Other Current Assets until the date of the auction sale when they are expensed to Direct Costs of Services in the Condensed Consolidated Income Statements. As of June 30, 2018 , December 31, 2017, and June 30, 2017 , the contract cost balances recorded within Prepaid Expenses and Other Current Assets were $6.8 million , $9.6 million , and $7.5 million , respectively. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Notes Receivable | 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 through the sale of the collateral at the conclusion of the loan and/or through future purchases of new property by the borrower. In certain situations, term loans are made to refinance the accounts receivable balances 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 the 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. As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , the net Notes Receivable balance of SFS was $480 million , $590.6 million , and $651.4 million , respectively. As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , the total net Notes Receivable balance of SFS included $28.4 million , $54.4 million , and $85.6 million , respectively, of term loans issued by SFS to refinance client auction and private sale purchases. For the six months ended June 30, 2018 and 2017 , SFS issued $15.1 million and $3.8 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, 2018 and 2017 , such repayments totaled $41.1 million and $6.9 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 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, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Secured loans $ 479,972 $ 590,609 $ 651,361 Low auction estimate of collateral $ 1,159,693 $ 1,369,235 $ 1,445,847 Aggregate LTV ratio 41 % 43 % 45 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Secured loans with an LTV ratio above 50% $ 105,744 $ 168,116 $ 209,483 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 182,398 $ 269,063 $ 375,933 Aggregate LTV ratio of secured loans with an LTV ratio above 50% 58 % 62 % 56 % The table below provides other credit quality information regarding secured loans made by SFS as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Total secured loans $ 479,972 $ 590,609 $ 651,361 Loans past due $ 62,310 $ 62,570 $ 108,560 Loans more than 90 days past due $ 41,819 $ 56,087 $ 41,448 Non-accrual loans $ 15,402 $ — $ — Impaired loans $ — $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — $ — Allowance for credit losses based on historical data 1,132 1,253 1,290 Total allowance for credit losses - secured loans $ 1,132 $ 1,253 $ 1,290 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, 2018 , $62.3 million of the net Notes Receivable balance was past due, of which $41.8 million was more than 90 days past due. We are continuing to accrue interest on $46.9 million of past due loans and, as of June 30, 2018 , the collateral securing such loans had a low auction estimate of approximately $190.8 million , resulting in an LTV ratio of approximately 25% . In consideration of expected loan renewals, collateral sales to date 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 January 1, 2018, one of the past due loans included in the table above was placed on non-accrual status. During the first and second quarters of 2018, our investment in this loan was reduced by $32 million as the result of proceeds collected from collateral sales. As of June 30, 2018 , our recorded investment in this loan was approximately $17.2 million , consisting of the $15.4 million principal balance and $1.8 million in accrued interest. Additional collateral sale proceeds of $14.1 million are expected to be collected from auction buyers later in 2018. Following the collection of these collateral sale proceeds, our recorded investment in the loan will be approximately $3.1 million . We expect to recover our investment in this loan through the future sale of the remaining loan collateral, which is expected to be offered at auction and through private sales during the remainder of 2018. 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, 2018 , December 31, 2017 , and June 30, 2017 , there were no impaired loans outstanding. As of June 30, 2018 , unfunded commitments to extend additional credit through SFS were approximately $50.2 million . Agency Segment —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, 2018 , December 31, 2017 , and June 30, 2017 , Notes Receivable (net) within the Agency segment included $1.2 million , $2.7 million , and $2.6 million of such amounts reclassified from Accounts Receivable (net). 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, 2018 and 2017, such repayments totaled $1 million and $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 , such loans totaled $3.8 million . In the fourth quarter of 2017, we determined one of these loans to be impaired as a result of the bankruptcy of the art dealer and recorded a credit loss of $1.5 million in the period. We have commenced legal proceedings against one of the individuals who personally guaranteed this loan. As of June 30, 2018 and December 31, 2017 , we had one loan outstanding of this type with a balance of $2.1 million . We are no longer accruing interest on this loan, but we believe that the recorded balance of this loan is collectible. Allowance for Credit Losses —During the period January 1, 2018 to June 30, 2018 , activity related to the Allowance for Credit Losses by segment was as follows (in thousands of dollars): SFS Agency Total Balance as of January 1, 2018 $ 1,253 $ 1,525 $ 2,778 Change in loan loss provision based on historical data (121 ) — (121 ) Balance as of June 30, 2018 $ 1,132 $ 1,525 $ 2,657 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill —For the six months ended June 30, 2018 and 2017 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Agency All Other Total Agency All Other Total Beginning balance as of January 1 $ 44,396 $ 6,151 $ 50,547 $ 43,878 $ 6,151 $ 50,029 Goodwill acquired 5,259 — 5,259 — — — Foreign currency exchange rate changes (136 ) — (136 ) 322 — 322 Ending balance as of June 30 $ 49,519 $ 6,151 $ 55,670 $ 44,200 $ 6,151 $ 50,351 On February 2, 2018, we acquired Viyet, an online marketplace for interior design specializing in vintage and antique furniture, decorative objects, and accessories. This acquisition complements and enhances our online sales program, and provides an additional sale format to offer clients. Intangible Assets —As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2018 December 31, 2017 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - Art Advisory Partners 8 years 10,800 10,800 10,800 Non-compete agreements - Art Advisory Partners 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,200 1,200 1,125 Technology 4 years 4,461 — — Total intangible assets subject to amortization 19,521 15,060 14,985 Accumulated amortization (5,232 ) (3,892 ) (2,902 ) Total amortizable intangible assets (net) 14,289 11,168 12,083 Total intangible assets (net) $ 14,613 $ 11,492 $ 12,407 (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 exchange for an initial cash payment made in the third quarter of 2016 and a subsequent cash payment made in the third quarter of 2017. For the three and six months ended June 30, 2018 , amortization expense related to intangible assets was approximately $0.7 million and $1.3 million , respectively. 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. 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, 2018 balance sheet date are as follows (in thousands of dollars): Period Amount July 2018 to June 2019 $ 3,095 July 2019 to June 2020 $ 3,095 July 2020 to June 2021 $ 3,095 July 2021 to June 2022 $ 2,376 July 2022 to June 2023 $ 1,470 |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [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"), which was closed to future service cost accruals on April 30, 2016. For the three and six months ended June 30, 2018 and 2017 , the components of the net pension credit for the U.K. Pension Plan recorded within Non-Operating Income in our Condensed Consolidated Income Statements were as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Interest cost $ 1,939 $ 1,999 3,920 3,937 Expected return on plan assets (2,839 ) (3,514 ) (5,741 ) (6,921 ) Prior service cost — 15 — 30 Amortization of actuarial loss 122 280 247 553 Amortization of prior service cost (26 ) (23 ) (52 ) (46 ) Net pension credit $ (804 ) $ (1,243 ) $ (1,626 ) $ (2,447 ) |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Credit Facilities —Prior to June 26, 2018, we were party to credit agreements with an international syndicate of lenders that, among other things, provided for dedicated asset-based revolving credit facilities for the Agency segment (the "Agency Credit Facility") and SFS (the "SFS Credit Facility") (collectively, the "Previous Credit Agreements"). The Previous Credit Agreements were scheduled to mature on August 22, 2020. On June 26, 2018, we refinanced the Previous Credit Agreements and entered into a new credit agreement with an international syndicate of lenders led by JPMorgan Chase Bank, N.A. (the “New Credit Agreement”). The proceeds under the New Credit Agreement may be used for our working capital and other general corporate purposes and borrowings thereunder are available in U.S. Dollars, Pounds Sterling, Euros, Swiss Francs or Hong Kong Dollars. The New Credit Agreement reduces the interest rate margins for borrowings when compared to those under the Previous Credit Agreements by 25 basis points. Such interest rate margins are determined by reference to a pricing grid that is based on the level of borrowings outstanding under the New Credit Agreement. The New Credit Agreement is scheduled to mature on June 26, 2023. The New Credit Agreement combines the previous Agency Credit Facility and previous SFS Credit Facility into one asset-based revolving credit facility with an aggregate borrowing capacity of $1.1 billion , which is subject to an enhanced borrowing base. The New Credit Agreement has a sub-limit of $350 million for foreign currency borrowings, as well as an accordion feature, which allows us to seek an increase to the borrowing capacity of the New Credit Agreement by an amount not to exceed $300 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 borrowing capacity under the New Credit Agreement pursuant to an expedited documentation process. The borrowing base under the New Credit Agreement is determined by a calculation that is based upon, among other things, a percentage of: (i) eligible cash; (ii) the value of certain auction guarantee advances; (iii) the value of certain art inventory; (iv) the value of certain extended payment term receivables arising from auction or private sale transactions; (v) the value of certain loans in the SFS loan portfolio; (vi) the fair market value of certain eligible real property located in the U.K.; and (vii) the net orderly liquidation value of certain of our trademarks. Domestic borrowers are jointly and severally liable for all obligations under the New 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 New Credit Agreement. In addition, the obligations of the borrowers under the New Credit Agreement are guaranteed by certain of their subsidiaries. Our obligations under the New 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 New Credit Agreement. The New Credit Agreement contains certain customary affirmative and negative covenants including, but not limited to, limitations on indebtedness, liens, investments, restricted payments, and the use of proceeds from borrowings under the Credit Agreement. The New Credit Agreement also contains a limitation on net outstanding auction guarantees (i.e., auction guarantees less the impact of related risk sharing arrangements). The New Credit Agreement permits dividend payments, common stock repurchases, investments and certain debt prepayments, so long as no event of default exists and subject to maintaining a minimum level of borrowing availability. The New 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, 2018. We incurred aggregate fees of approximately $4 million in fees related to the New Credit Agreement, which are being amortized on a straight-line basis through its June 26, 2023 maturity date. As a result of this refinancing, $4 million of unamortized fees related to the Previous Credit Agreements were written off in the second quarter of 2018. The following tables summarize information related to our credit facilities as of and for the periods ended June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): As of and for the periods ended June 30, 2018 December 31, 2017 June 30, 2017 Maximum borrowing capacity (a) $ 1,100,000 $ 1,100,000 $ 1,335,000 Borrowing base $ 655,198 $ 605,927 $ 692,205 Borrowings outstanding (b) $ 63,000 $ 196,500 $ 531,500 Available borrowing capacity (c) $ 592,198 $ 409,427 $ 160,705 Average Borrowings Outstanding: Three months ended June 30, $ 63,637 N/A $ 541,874 Six months ended June 30, $ 105,823 N/A $ 552,130 Year ended December 31, N/A $ 479,367 N/A (a) On October 2, 2017, we reduced the borrowing capacity of the previous SFS Credit Facility by $235 million . This reduction, which was entirely at our option and as part of our ongoing capital allocation analysis, was executed in order to reduce facility fees for unused borrowing capacity. (b) The $63 million in borrowings outstanding under the New Credit Agreement as of June 30, 2018 were repaid in July 2018. (c) The available borrowing capacity is calculated as the borrowing base less borrowings outstanding. Borrowing costs under the Previous Credit Agreements related to the Agency segment, which include interest and fees, are reflected in our Condensed Consolidated Income Statements as Interest Expense. Borrowing costs under the Previous Credit Agreements related to SFS are reflected in our Condensed Consolidated Income Statements within Cost of Finance Revenues. Long-Term Debt —As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , 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 $4,039, $4,545, and $5,050 $ 267,082 $ 270,556 $ 305,907 2022 Senior Notes, net of unamortized debt issuance costs of $0, $2,998, and $3,320 — 297,002 296,680 2025 Senior Notes, net of unamortized debt issuance costs of $5,248, $5,623, and $0 394,752 394,377 — Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010, $1,010, and $1,010 (13,423 ) (11,930 ) (38,825 ) 2022 Senior Notes, net of unamortized debt issuance costs of $0, $2,998, and $0 — (297,002 ) — Total Long-Term Debt, net $ 648,411 $ 653,003 $ 563,762 See the captioned sections below for information related to the York Property Mortgage, the 2022 Senior Notes, and the 2025 Senior Notes. York Property Mortgage —The York Property, which is our headquarters building located at 1334 York Avenue in New York, is subject to a seven -year, $325 million mortgage loan (the "York Property Mortgage") that matures on July 1, 2022. As of June 30, 2018 , the outstanding principal balance of the York Property Mortgage was $271.1 million . As of June 30, 2018 , 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 . 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 common stock repurchases. As of June 30, 2018 , Sotheby's net worth was $606.7 million . In conjunction with this amendment, on July 3, 2017, we made a prepayment of $32 million to reduce the outstanding principal balance of the York Property Mortgage, and agreed to make annual prepayments funded primarily with cash accumulated in a restricted cash management account, as discussed below, 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 principal 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. On July 2, 2018, a $6.25 million principal payment funded primarily from the restricted cash management account was made in accordance with the June 2017 amendment to the York Property Mortgage. (See Note 9 for information related to the interest protection agreements that were entered into in connection with the York Property Mortgage.) 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, Sotheby's 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. The lender will retain any excess cash after monthly debt service, insurance, and taxes as security. On July 3, 2017, $7 million from the Cash Management Account was used to fund a portion of the $32 million principal prepayment of the York Property Mortgage discussed above. As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , the Cash Management Account had a balance of $5.3 million , $3.1 million , and $7.4 million , respectively, which is reflected within Restricted Cash on our Condensed Consolidated Balance Sheets. • At all times during the term of the York Property Mortgage, we are required to maintain a net worth of at least $325 million , subject to a cure period. Senior Unsecured Debt —On September 27, 2012, we issued $300 million aggregate principal amount of 5.25% Senior Notes, due October 1, 2022 (the "2022 Senior Notes"). On December 12, 2017, we issued $400 million aggregate principal amount of 4.875% Senior Notes due on December 15, 2025 (the “2025 Senior Notes”). The net proceeds from the issuance of the 2025 Senior Notes were approximately $395.5 million , after deducting fees paid to the initial purchasers, of which $312.3 million was irrevocably deposited with a trustee for the benefit of the holders of the 2022 Senior Notes, which were redeemed using these funds on January 11, 2018, as discussed below. The $312.3 million deposited with the trustee was classified within Restricted Cash on our Condensed Consolidated Balance Sheets as of December 31, 2017. The remaining net proceeds from the issuance of the 2025 Senior Notes were used for general corporate purposes, including reductions to revolving credit facility borrowings. Interest on the 2025 Senior Notes is payable in cash semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2018. The 2025 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 2025 Senior Notes do not have registration rights, and the 2025 Senior Notes have not been and will not be registered under the Securities Act. The 2025 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. The 2025 Senior Notes will be redeemable, in whole or in part, on or after December 15, 2020, at specified redemption prices set forth in the underlying indenture, plus accrued and unpaid interest to, but excluding, the redemption date. Prior to December 15, 2020, the 2025 Senior Notes are redeemable, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2025 Senior Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus a make-whole premium (as defined in the underlying indenture). In addition, at any time prior to December 15, 2020, we may redeem up to 40% of the aggregate principal amount of the 2025 Senior Notes with the net cash proceeds of certain equity offerings at the redemption price of 104.875% plus accrued and unpaid interest. If Sotheby's experiences a Change of Control (as defined in the underlying indenture), we must offer to repurchase all of the 2025 Senior Notes then outstanding at 101% of the aggregate principal amount of the 2025 Senior Notes repurchased, plus accrued and unpaid interest. The underlying indenture for the 2025 Senior Notes also contains customary covenants that limit, among other things, our ability to grant liens on our assets; enter into sale and leaseback transactions; and merge, consolidate or transfer or dispose of substantially all of our assets. The above covenants are subject to a number of exceptions and qualifications set forth in the underlying indenture. As of June 30, 2018 , the $400 million principal amount of the 2025 Senior Notes had a fair value of approximately $382.5 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. On January 11, 2018, we redeemed the 2022 Senior Notes for a redemption price of $312.3 million , including the $300 million principal amount plus $4.4 million of accrued interest and a call premium of $7.9 million . As a result of the redemption of the 2022 Senior Notes, we wrote-off $3 million of related unamortized debt issuance costs, which, when combined with the $7.9 million call premium, resulted in a total loss on the extinguishment of debt of $10.9 million recognized in the first quarter of 2018. Future Principal and Interest Payments —The aggregate future principal and interest payments due under the New Credit Agreement, the York Property Mortgage, and the 2025 Senior Notes during the five-year period after June 30, 2018 are as follows (in thousands of dollars): Period Amount July 2018 to June 2019 $ 109,344 July 2019 to June 2020 $ 47,174 July 2020 to June 2021 $ 46,774 July 2021 to June 2022 $ 46,371 July 2022 to June 2023 $ 230,678 The table above assumes that the annual interest rate for the York Property Mortgage will be within the interest rate collar's floor and ceiling rates for the remainder of the mortgage term based on available forecasts of LIBOR rates for the future periods through maturity. The table above also assumes York Property Mortgage principal payments consistent with the related mortgage amortization schedule, as well as annual principal prepayments of $6.25 million each July beginning in 2018 and continuing through 2021, as discussed above. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): Assets Liabilities June 30, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Other Current Assets $ 274 N/A $ — Interest rate collar N/A — Other Current Liabilities 25 Interest rate collar N/A — Other Long-Term Liabilities 207 Total cash flow hedges 274 — 232 Net Investment Hedges: Foreign exchange contracts Other Current Assets 4,444 N/A — Total $ 4,718 $ 232 Assets Liabilities December 31, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Other Current Assets $ 339 N/A $ — Interest rate collar N/A — Other Current Liabilities 666 Interest rate collar N/A — Other Long-Term Liabilities 1,501 Total cash flow hedges 339 2,167 Net Investment Hedges: Foreign exchange contracts N/A — Other Current Liabilities 3,756 Total $ 339 $ 5,923 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 During the six months ended June 30, 2018, we settled derivative financial instruments designated as net investment hedges with an aggregate notional value of $97.9 million and realized a net loss of ($5.9) 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 Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive Income - 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, 2018 2017 2018 2017 2018 2017 Cash Flow Hedges: Interest rate swaps $ 15 $ (7 ) Interest Expense $ (93 ) $ (50 ) $ — $ — Interest rate collar 207 (527 ) Interest Expense 7 — — — Interest rate collar — — Non-operating income — — — 622 Total cash flow hedges 222 (534 ) (86 ) (50 ) — 622 Net Investment Hedges: Foreign exchange contracts 3,350 (1,454 ) N/A — — — — Total $ 3,572 $ (1,988 ) $ (86 ) $ (50 ) $ — $ 622 Gain (Loss) Recognized in Other Comprehensive Income - 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, 2018 2017 2018 2017 2018 2017 Cash Flow Hedges: Interest rate swaps $ 95 $ 134 Interest Expense $ (145 ) $ 35 $ — $ — Interest rate collar 1,187 85 Interest Expense 169 — — — Interest rate collar — — Non-operating income — — — 622 Total cash flow hedges 1,282 219 24 35 — 622 Net Investment Hedges: Foreign exchange contracts 1,740 (2,078 ) N/A — — — — Total $ 3,022 $ (1,859 ) $ 24 $ 35 $ — $ 622 See the captioned sections below for information related to the derivative financial instruments designated as cash flow hedges or net investment hedges. Derivative Financial Instruments Designated as Cash Flow Hedges —In connection with the York Property Mortgage (see Note 8), we entered into interest rate protection agreements secured by the York Property, consisting of a 2 -year interest rate swap (the "Mortgage Swap"), effective as of July 1, 2015 , and a 5 -year interest rate collar (the "Mortgage Collar"), effective as of July 1, 2017 . The Mortgage Swap fixed the LIBOR rate on the York Property Mortgage at an annual rate equal to 0.877% through its July 1, 2017 expiration date. The Mortgage Collar effectively fixes the LIBOR rate on the York Property Mortgage at an annual rate of no less than 1.917% , but no more than 3.75% , for the remainder of the mortgage's 7 -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 its remaining 7 -year term. Beginning on the effective date of the Mortgage Collar and through June 30, 2018, the weighted average interest rate for the York Property Mortgage was 4.172% . In conjunction and concurrent with the June 2017 amendment to the York Property Mortgage (see Note 8), the notional value of the Mortgage Collar was reduced by $57 million to reflect: (i) the $32 million principal 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 reduction in the notional value of the Mortgage Collar relates to previously forecasted interest payments that are no longer probable of occurring following the June 2017 amendment to the York Property Mortgage. The reduction in the notional value 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, 2018 , the notional value of the Mortgage Collar was $271.1 million , which is equal to the principal balance of the York Property Mortgage on that date. For the remainder of its term, the Mortgage Collar will have a notional value 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 agreement(s) 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 to eliminate the variability in expected cash outflows associated with the one-month LIBOR-indexed interest payments owed on $63 million of revolving credit facility borrowings (the "Revolving Credit Facility Swap"). As of June 30, 2018 , the notional value of the Credit Facility Swap was $63 million . At their inception, the Mortgage Swap, the Mortgage Collar, and the Revolving Credit Facility 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 in the second quarter of 2017. Management performs a quarterly assessment to determine whether each of the outstanding 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, 2018 , each of the outstanding 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 was 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 Revolving Credit Facility 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 our revolving 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, 2018 , the aggregate notional value of our outstanding net investment hedge contracts was $56.3 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 value 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, 2018 , the notional value of outstanding forward exchange contracts not designated as hedging instruments was $251.9 million . Notional values do not quantify risk or represent 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 any of these counterparties to fail to meet their obligations, given their investment grade short-term credit ratings. As of June 30, 2018 , the aggregate fair value of these contracts represented an asset of $3.7 million , which was recorded on our Condensed Consolidated Balance Sheets within Prepaid Expenses and Other Current Assets. As of December 31, 2017 and June 30, 2017 , the aggregate fair value of these contracts represented liabilities of $0.8 million and $1.4 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, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Sale of Pink Diamond | Sale of Pink Diamond In the second quarter of 2016, we sold an undivided legal and beneficial 50% ownership interest in a Fancy Vivid Pink Diamond (the "Pink Diamond") held in Inventory for $34.2 million in cash, which was recorded on our Condensed Consolidated Balance Sheets within Other Current Liabilities. 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"). Although the Auction occurred in the second quarter of 2017, the sale was recognized in our financial statements in the third quarter of 2017 upon collection of the Purchase Price from the winning bidder in September 2017. Upon the collection of the Purchase Price, the $68.4 million carrying value of the Pink Diamond was removed from Inventory and the related $34.2 million cash payment received in the second quarter of 2016 was removed from Other Current Liabilities. The sale of the Pink Diamond resulted in a gain of approximately $0.4 million in 2017, after taking into account the associated Cost of Inventory Sales of $70.8 million , which includes amounts due to our partner in the Pink Diamond and other costs related to the sale. |
Supplemental Condensed Consolid
Supplemental Condensed Consolidated Balance Sheet Information | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Condensed Consolidated Balance Sheet Information | Supplemental Condensed Consolidated Balance Sheet Information Prepaid and Other Current Assets — As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Prepaid expenses $ 25,586 $ 25,418 $ 27,293 Derivative financial instruments (see Note 9) 274 339 308 Insurance recoveries 2,335 — — Other 15,067 6,253 17,854 Total Prepaid Expenses and Other Current Assets $ 43,262 $ 32,010 $ 45,455 Other Long-Term Assets — As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Other Long-Term Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Defined benefit pension plan asset $ 107,647 $ 108,826 $ 86,317 Equity method investments (a) 46,789 46,905 47,299 Trust assets related to deferred compensation liability 30,017 26,240 25,128 Restricted cash (see Note 12) 17,442 17,916 17,332 Insurance recoveries 12,782 12,242 14,527 Other 15,136 15,479 2,392 Total Other Long-Term Assets $ 229,813 $ 227,608 $ 192,995 (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. Other Long-Term Liabilities — As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): June 30, December 31, June 30, Deferred compensation liability $ 29,605 $ 25,614 $ 24,477 Acquisition earn-out consideration 8,750 17,500 17,500 Interest rate collar liability (see Note 9) 207 1,501 3,257 Other 7,609 6,809 6,623 Total Other Long-Term Liabilities $ 46,171 $ 51,424 $ 51,857 |
Supplemental Condensed Consol18
Supplemental Condensed Consolidated Cash Flow Information | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Condensed Consolidated Cash Flow Information | Supplemental Condensed Consolidated Cash Flow Information Cash, Cash Equivalents, and Restricted Cash —As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , cash, cash equivalents, and restricted cash consisted of the following (in thousands of dollars): June 30, December 31, June 30, Cash and cash equivalents $ 432,357 $ 544,432 $ 516,402 Restricted cash, recorded within current assets: Consignor funds held in legally segregated accounts 23,528 46,029 33,164 Funds deposited with the trustee for the redemption of the 2022 Senior Notes (see Note 8) — 312,250 — Cash Management Account related to the York Property Mortgage (see Note 8) 5,264 3,107 7,434 Other 187 192 660 Restricted cash, recorded within current assets 28,979 361,578 41,258 Restricted cash, recorded within other long-term assets (a) 17,442 17,916 17,332 Total restricted cash 46,421 379,494 58,590 Cash, cash equivalents, and restricted cash $ 478,778 $ 923,926 $ 574,992 (a) 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. Changes in Other Operating Assets and Liabilities —For the six months ended June 30, 2018 and 2017 , 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, 2018 2017 (Increase) decrease in: Prepaid expenses and other current assets $ (8,233 ) $ 2,342 Other long-term assets (3,611 ) (1,306 ) Income tax receivables and deferred income tax assets (9,782 ) (20,896 ) (Decrease) increase in: Accounts payable and accrued liabilities and other liabilities (23,870 ) (20,575 ) Accrued income taxes and deferred income tax liabilities 4,126 (2,872 ) Total changes in other operating assets and liabilities $ (41,370 ) $ (43,307 ) |
Shareholders' Equity and Divide
Shareholders' Equity and Dividends | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity and Dividends | Shareholders' Equity and Dividends Common Stock Repurchase Program —On February 28, 2018, the Board of Directors approved a $100 million increase to our share repurchase authorization, resulting in an updated share repurchase authorization of $195.7 million as of that date. The following table provides information regarding our common stock repurchase program for the six months ended June 30, 2018 and 2017 (in thousands, except for per share data): Six Months Ended June 30, 2018 June 30, 2017 Shares repurchased 1,193 740 Aggregate purchase price $ 62,497 $ 33,940 Average price per share $ 52.40 $ 45.86 As of August 3, 2018, $133.2 million remained available under the current share repurchase authorization. Management expects to continue to repurchase shares of common stock via open market purchases, purchases made pursuant to a Rule 10b5-1 plan, and/or accelerated share repurchase agreements, subject to the factors described below. 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, we accrued approximately $10 million for dividend equivalents owed on share-based payments to employees, which we charged to retained earnings. For the six months ended June 30, 2017, $2 million of such dividends were paid to employees upon the vesting of the share-based payments. No such dividends were paid during the six months ended June 30, 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following is a summary of the changes in Accumulated Other Comprehensive Loss and the details regarding any reclassification adjustments made for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Currency Translation Adjustments Balance at beginning of period $ (67,280 ) $ (86,853 ) $ (74,505 ) $ (89,478 ) Other comprehensive (loss) income before reclassifications, net of tax of $0, $835, $400, and $1,421 (14,238 ) 6,526 (7,013 ) 9,151 Other comprehensive (loss) income (14,238 ) 6,526 (7,013 ) 9,151 Balance at end of period (81,518 ) (80,327 ) (81,518 ) (80,327 ) Cash Flow Hedges Balance at beginning of period 141 (2,826 ) (1,029 ) (3,664 ) Other comprehensive income (loss) before reclassifications, net of tax of $73, ($331), $423, and $135 222 (534 ) 1,282 219 Reclassifications from accumulated other comprehensive loss, net of tax of ($28), $354, $8, and $407 (86 ) 572 24 657 Other comprehensive income 136 38 1,306 876 Balance at end of period 277 (2,788 ) 277 (2,788 ) Net Investment Hedges Balance at beginning of period 11,949 15,994 13,559 16,618 Other comprehensive income (loss) before reclassifications, net of tax of $1,094, ($885), $569, and ($1,270) 3,350 (1,454 ) 1,740 (2,078 ) Other comprehensive income (loss) 3,350 (1,454 ) 1,740 (2,078 ) Balance at end of period 15,299 14,540 15,299 14,540 Defined Benefit Pension Plan Balance at beginning of period (434 ) (13,855 ) (491 ) (13,834 ) Currency translation adjustments 32 (571 ) 7 (800 ) Other comprehensive income (loss) before reclassifications 32 (571 ) 7 (800 ) Prior service cost amortization, net of tax of ($4), ($3), ($8), and ($7) (21 ) (20 ) (43 ) (39 ) Actuarial loss amortization, net of tax of $19, $45, $40, and $91 102 235 206 462 Reclassifications from accumulated other comprehensive loss, net of tax 81 215 163 423 Other comprehensive income (loss) 113 (356 ) 170 (377 ) Balance at end of period (321 ) (14,211 ) (321 ) (14,211 ) Total other comprehensive (loss) income attributable to Sotheby's (10,639 ) 4,754 (3,797 ) 7,572 Accumulated other comprehensive loss as of June 30 $ (66,263 ) $ (82,786 ) $ (66,263 ) $ (82,786 ) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cash Flow Hedges Settlements $ (114 ) $ 926 $ 32 $ 1,064 Tax effect 28 (354 ) (8 ) (407 ) Reclassification adjustments, net of tax (86 ) 572 24 657 Defined Benefit Pension Plan Prior service cost amortization (26 ) (23 ) (52 ) (46 ) Actuarial loss amortization 122 280 247 553 Pre-tax total 96 257 195 507 Tax effect (15 ) (42 ) (32 ) (84 ) Reclassification adjustments, net of tax 81 215 163 423 Total reclassification adjustments, net of tax $ (5 ) $ 787 $ 187 $ 1,080 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
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 March 31, 2020 and December 31, 2022 . 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 $14.1 million as of June 30, 2018 . Guarantees of Collection— A guarantee of collection is a commitment to a consignor that, under certain conditions, Sotheby's will fund the payment of the net sale proceeds to the consignor even if the purchaser has not yet made payment. It is not a guarantee that the property will be sold at a certain minimum price. In the event that any item subject to a guarantee of collection is sold and the purchaser does not pay by the settlement date, we are required to pay the consignor the net sale proceeds, but would then take title to the property and have the right to pursue the defaulting buyer and/or reoffer the property at a future sale. In certain limited circumstances, we may also have the right to recover the net sale proceeds from the consignor in the event of an ultimate purchaser default. As of June 30, 2018 , we had a guarantee of collection outstanding related to property that sold for a hammer price of $26.8 million in April 2018. The remaining amount owed by the buyer is due to be paid in the fourth quarter of 2018. 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 statement of operations. 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. On November 17, 2017, Sotheby’s, together with its London, Geneva and Vienna subsidiaries, and one of its employees (collectively, “the Sotheby’s Parties”), initiated a declaratory judgment action (requête en conciliation) in Switzerland (the “Swiss Action”), at the Tribunal de Première Instance de la République et Canton de Genève, against Dmitry Rybolovlev and various persons and entities affiliated with him. The Sotheby’s Parties’ action seeks a declaration that the Sotheby’s Parties owe no liability or debt to Mr. Rybolovlev and his affiliates in connection with sales of art and related services to entities affiliated with Mr. Yves Bouvier, as discussed in more detail below. The Sotheby’s Parties filed the Swiss Action in response to the stated intent of Mr. Rybolovlev’s counsel to initiate litigation in the U.K. against several of the Sotheby’s Parties. Specifically, on October 27, 2017, counsel for entities affiliated with Mr. Rybolovlev filed papers with the U.S. District Court for the Southern District of New York requesting authority to use documents previously obtained from Sotheby’s pursuant to 28 U.S.C. § 1782. This statute allows parties to conduct discovery in the U.S. for use in foreign legal proceedings. Mr. Rybolovlev sought discovery to support a contemplated U.K. proceeding alleging that Sotheby’s and its agents aided and abetted an alleged fraud that Mr. Bouvier allegedly perpetrated against Mr. Rybolovlev and affiliated entities. On December 22, 2017, the District Court in New York approved Mr. Rybolovlev’s request to use Sotheby’s previously disclosed documents both in the contemplated U.K. proceedings, and in the Sotheby’s Parties’ Swiss declaratory judgment proceeding against Mr. Rybolovlev and his affiliates. To date, we are not aware of Mr. Rybolovlev actually filing the threatened U.K. litigation against Sotheby’s, and believe that Geneva is the correct venue for the dispute, that the Lugano Convention effectively precludes Mr. Rybolovlev from sustaining an action in the U.K., and that the Sotheby’s Parties will prevail in the Swiss Action. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017. The Act includes significant changes to the U.S. corporate income tax system that became effective on January 1, 2018, including, among other things, (i) a reduction of the U.S. corporate income tax rate from 35% to 21%, (ii) the transition to a modified territorial tax system from a worldwide tax system, (iii) limitations on the deductibility of interest expense and executive compensation, (iv) the imposition of the Base Erosion Anti-Abuse Tax (“BEAT”), a new minimum tax on international payments meant to reduce the ability of multinational companies to erode the U.S. tax base through deductible payments to related parties, and (v) the creation of two new categories of income: (a) foreign-derived intangible income (“FDII”), which is income derived from the sale of property or services to a foreign person which may be taxed at a rate lower than 21%, and (b) global intangible low taxed income (“GILTI”), which is certain income earned by foreign subsidiaries that must be included in the income of the U.S. shareholder. In addition, the Act imposed a one-time transition tax in 2017 on the mandatory deemed repatriation of certain unremitted foreign earnings as of December 31, 2017. Soon after the Act was signed into law, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118"), which allows companies to record the income tax effects of the Act as a provisional amount based on reasonable estimates. The provisional amount is subject to adjustment as companies complete their analysis of the Act, and collect and prepare the necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, IRS, the FASB, and other standard-setting and regulatory bodies. Any such adjustments may be made within a subsequent measurement period, which should not extend beyond one year from the enactment date. In accordance with SAB 118, in the fourth quarter of 2017, we recorded a provisional net income tax expense of approximately $1.2 million based on reasonable estimates of the tax effects of the Act, which included an expense of $40.4 million to record a liability for the one-time mandatory transition tax on certain unremitted and untaxed earnings of our foreign subsidiaries. In the second quarter of 2018, we recorded an income tax benefit of approximately $2.3 million to reduce this liability as a result of guidance that was issued by the IRS during the period and as a result of revisions made to certain estimates used in the calculation as of December 31, 2017. The provisional net income tax expense recorded in the fourth quarter of 2017 also included an expense of $19.8 million to reduce the value of our net deferred tax assets, primarily as a result of the change in the U.S. corporate income tax rate from 35% to 21%. In the second quarter of 2018, we recorded an income tax benefit of $2.6 million to adjust the remeasurement of our net deferred tax asset based on further analysis of available tax accounting methods and elections. As of June 30, 2018, we are continuing to gather additional information and expect to complete our accounting for the tax effects of the Act within the prescribed measurement period, which will not exceed one year from the December 22, 2017 enactment date. We are still evaluating the GILTI provisions of the Act in order to determine whether we will make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse as GILTI income in future periods or to provide for the tax expense related to GILTI in the year in which the tax is incurred. Accordingly, no deferred taxes have been provided for GILTI income. As of June 30, 2018, our Condensed Consolidated Balance Sheets reflect a provisional income tax payable of $20.2 million within long-term liabilities on our Condensed Consolidated Balance Sheets, for the one-time mandatory transition tax on unremitted foreign earnings discussed above. We intend to elect to settle this liability in installments over eight years, as allowed by the Act. |
Uncertain Tax Positions
Uncertain Tax Positions | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Uncertain Tax Positions | Uncertain Tax Positions As of June 30, 2018 , our liability for unrecognized tax benefits, excluding interest and penalties, was $12.3 million , representing a net decrease of $0.9 million when compared to a liability of $13.2 million as of December 31, 2017 . This net decrease is primarily the result of the expiration of the statute of limitations for certain tax years and the settlement of a tax audit, partially offset by the accrual of tax reserves related to transfer pricing and other U.S. federal and state and non-U.S. matters, and an increase due to changes in foreign exchange rates. As of June 30, 2017 , our liability for unrecognized tax benefits, excluding interest and penalties, was $20.4 million . As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , the total amount of unrecognized tax benefits that, if recognized, would favorably impact our effective income tax rate was $4.5 million , $4.1 million , and $9.6 million , respectively. We believe it is reasonably possible that a decrease of $2.6 million in the balance of unrecognized tax benefits can occur within 12 months of the June 30, 2018 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 2011. We recognize interest expense and penalties related to unrecognized tax benefits as a component of Income Tax Expense in our Condensed Consolidated Income Statements. For the three months ended June 30, 2018 , the accrual of such interest and penalties increased by approximately $0.1 million . 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, 2018 | |
Guarantees [Abstract] | |
Auction Guarantees | Auction Guarantees As of June 30, 2018 , we had outstanding auction guarantees totaling $31.2 million . Each of the auction guarantees outstanding as of June 30, 2018 has a minimum guaranteed price that is within or below the range of the pre-sale auction estimates for the underlying property. All of the property related to these auction guarantees is being offered at auctions during the second half of 2018 . Our financial exposure under these auction guarantees is reduced by $31.2 million as a result of our use of contractual risk sharing arrangements with third parties. Such risk sharing arrangements include irrevocable bid arrangements and, from time-to-time, partner sharing arrangements. As a result of these risk-sharing arrangements, we did not have any net financial exposure related to the auction guarantees that were outstanding as of June 30, 2018. The counterparties to our auction guarantee risk 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 risk 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. (See Note 4 for additional information related to our use of auction guarantees and related risk sharing arrangements.) We are obligated under the terms of certain auction guarantees to advance all or a portion of the guaranteed amount prior to auction. There were no auction guarantee advances outstanding as of June 30, 2018, December 31, 2017, and June 30, 2017. As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , the estimated fair value of our obligation to perform under our outstanding auction guarantees totaled $0.9 million , $0.9 million , and $0.4 million , respectively, and is recorded within Accounts Payable and Accrued Liabilities on our Condensed Consolidated Balance Sheets. As of August 3, 2018 , we had outstanding auction guarantees totaling $194 million and, as of that date, our financial exposure was reduced by risk-sharing arrangements totaling $81.2 million . As a result of these risk-sharing arrangements, our net financial exposure related to auction guarantees was $112.8 million as of August 3, 2018. Each of the auction guarantees outstanding as of August 3, 2018 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 second half of 2018 and throughout 2019. As of August 3, 2018 , we have advanced $1 million of the total guaranteed amount. |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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 common stock and deferred stock units. A description of each of these share-based payments is provided below. For the three and six months ended June 30, 2018 and 2017 , compensation expense related to share-based payments was as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Pre-tax $ 6,312 $ 5,946 $ 14,689 $ 12,015 After-tax $ 5,087 $ 3,940 $ 11,726 $ 7,997 For the six months ended June 30, 2018 and 2017, we recognized $1.2 million and $2.6 million , respectively, in excess tax benefits related to share-based payments in our Condensed Consolidated Income Statements. These tax benefits represent 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. As of June 30, 2018 , unrecognized compensation expense related to the unvested portion of share-based payments to employees was $37.3 million . This compensation expense is expected to be amortized over a weighted-average period of approximately 2.25 years. We do not capitalize any compensation expense related to share-based payments to employees. Shareholder Approval of 2018 Equity Incentive Plan —The Sotheby’s 2018 Equity Incentive Plan (the “Equity Plan”) was adopted by our Board of Directors on February 28, 2018 and approved by our stockholders on May 3, 2018. The Equity Plan replaces the Sotheby’s Restricted Stock Unit Plan (as amended and restated, the "Restricted Stock Unit Plan") and the Sotheby’s 1997 Stock Option Plan (collectively, the “Prior Plans”), which are discussed in more detail below. The Equity Plan permits the issuance of restricted stock, restricted stock units, performance shares, performance share units, stock options, stock appreciation rights (or, "SAR's"), and other equity-related awards. No further awards will be granted under the Prior Plans after May 3, 2018. However, the terms and conditions of the Prior Plans and related award agreements will continue to apply to all awards granted prior to May 3, 2018 under the Prior Plans. The Equity Plan is a fungible share plan. Each option or SAR granted under the Equity Plan will count as one share from the available share pool. Each full-value award granted under the Equity Plan, including restricted stock units and performance share units, will count as 2.14 shares from the available pool. Restricted Stock Unit Plan —Prior to May 3, 2018, the Restricted Stock Unit Plan provided for the issuance of restricted stock units ("RSU's") and restricted shares to employees. Awards made under the Restricted Stock Unit Plan were subject to the approval of the Compensation Committee of our Board of Directors. In making awards under the Restricted Stock Unit Plan, the Compensation Committee took 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 deemed 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 issued under the Restricted Stock Unit Plan 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 issued under the Restricted Stock Unit Plan 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. For RSU's and restricted shares issued after May 3, 2018 under the new Equity Plan, dividend equivalents will generally be credited to holders of RSU's at the same rate as dividends are paid on our common stock (if and when such dividends are paid), but will only be paid for RSU's and restricted shares that 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, 2018 , the Compensation Committee approved share-based payment awards with a total grant date fair value of $32.3 million , as follows: • 283,019 PSU's with a grant date fair value of $13.2 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 566,038 . • 402,899 RSU's with a grant date fair value of $19.1 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, 2018 , 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, 2018 1,922 $ 36.59 Granted 686 $ 47.06 Vested (526 ) $ 38.95 Canceled (157 ) $ 39.83 Outstanding at June 30, 2018 1,925 $ 39.41 As of June 30, 2018, 6.2 million shares were available for future awards issued pursuant to the new Equity Plan. The aggregate fair value of RSU’s and PSU's that vested during the six months ended June 30, 2018 and 2017 was $26.8 million and $35.9 million , respectively, based on the closing stock price on the dates the shares vested. Stock Options —Prior to the shareholder approval of the new Equity Plan on May 3, 2018, stock options were issued pursuant to the 1997 Stock Option Plan and were exercisable into authorized, but unissued shares of our common stock. These stock options vested evenly over four years and expired ten years after the date of grant. In the fourth quarter of 2017, the remaining 50,000 stock options that were outstanding under the 1997 Stock Option Plan were exercised at an exercise price of $22.11 . As of June 30, 2018, there were no stock options outstanding or exercisable. 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 months ended June 30, 2018 and 2017 , we recognized $0.3 million within General and Administrative Expenses in our Condensed Consolidated Income Statements related to common stock shares awarded under the Directors Stock Plan. For the six months ended June 30, 2018 and 2017 , such expense was $0.6 million and $0.5 million , respectively. As of June 30, 2018 , 171,165 deferred stock units were outstanding under the Directors Stock Plan and 104,467 units were available for future issuance. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
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 loss per share as the impact would be anti-dilutive. Our participating securities include unvested restricted stock units and unvested restricted shares awarded to employees prior to May 3, 2018, both of which have non-forfeitable rights to dividends. See Note 19 for information on our share-based payment programs. 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 principally include unvested performance share units held by employees and deferred stock units held by members of our Board of Directors. See Note 19 for information on our share-based payment programs. The table below summarizes the computation of basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Basic : Numerator: Net income attributable to Sotheby’s $ 57,282 $ 76,891 $ 50,760 $ 65,566 Less: Net income attributable to participating securities 844 1,176 763 1,019 Net income attributable to Sotheby’s common shareholders $ 56,438 $ 75,715 $ 49,997 $ 64,547 Denominator: Weighted average common shares outstanding 51,780 52,716 52,122 52,866 Basic earnings per share - Sotheby’s common shareholders $ 1.09 $ 1.44 $ 0.96 $ 1.22 Diluted : Numerator: Net income attributable to Sotheby’s $ 57,282 $ 76,891 $ 50,760 $ 65,566 Less: Net income attributable to participating securities 844 1,176 763 1,019 Net income attributable to Sotheby’s common shareholders $ 56,438 $ 75,715 $ 49,997 $ 64,547 Denominator: Weighted average common shares outstanding 51,780 52,716 52,122 52,866 Weighted average effect of dilutive potential common shares: Performance share units 259 151 197 293 Deferred stock units 171 159 172 157 Stock options — 28 — 26 Weighted average dilutive potential common shares outstanding 430 338 369 476 Weighted average diluted shares outstanding 52,210 53,054 52,491 53,342 Diluted earnings per share - Sotheby’s common shareholders $ 1.08 $ 1.43 $ 0.95 $ 1.21 For the three and six months ended June 30, 2018 and 2017 , approximately 1 million potential common shares related to share-based payments were excluded from the computation of diluted loss per share because the financial performance or stock price targets inherent in such awards were not achieved as of the respective balance sheet dates. |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges For the three and six months ended June 30, 2018, we recognized $2.1 million in Restructuring Charges for severance related costs attributable to the elimination of certain senior level positions. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
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. For the three and six months ended June 30, 2018 , our Condensed Consolidated Income Statements include Agency Commissions and Fees of $3.2 million and $3.4 million , respectively, attributable to transactions with related parties. For the six months ended June 30, 2018, our Condensed Consolidated Income Statements include Inventory Sales (and related cost of sales) of $5.3 million attributable to transactions with related parties. For the three and six months ended June 30, 2017 , our Condensed Consolidated Income Statements include Agency Commissions and Fees of $1 million and $4.6 million attributable to transactions with related parties. As of June 30, 2018 , there was a related party receivable balance of $3.6 million . As of December 31, 2017 and June 30, 2017, there were no related party Accounts Receivable balances outstanding. As of June 30, 2018 and December 31, 2017, Client Payables included amounts owed to related party consignors totaling $0.4 million and $0.4 million , respectively. As of June 30, 2017, no amounts were owed to related party consignors. |
Recent Accounting Standards Not
Recent Accounting Standards Not Yet Adopted | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Standards Not Yet Adopted | Recent Accounting Standards Not Yet Adopted Leases —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 statement of operations 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. Our assessment of the impact of adopting ASU 2016-02 on our financial statements is ongoing. We have identified all material lease agreements and have chosen a lease management software solution to assist the adoption process. Credit Losses —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. We are currently assessing the potential impact of adopting ASU 2016-13 on our financial statements. Goodwill —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. We do not expect the adoption of ASU 2017-04 to have a material impact on our financial statements. Derivatives —In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities , which provides targeted guidance regarding the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 is effective for us beginning on January 1, 2019. We are currently assessing the potential impact of adopting ASU 2017-12 on our financial statements. Accumulated Comprehensive Income —On February 14, 2018, the FASB issued ASU 2018-02 to address industry concerns related to the application of ASC 740, Income Taxes , to certain provisions of the U.S. Tax Cuts and Jobs Act. Specifically, some constituents in the banking and insurance industries had expressed concerns about the requirement in ASC 740 that the effect of a change in tax laws or rates on deferred tax assets and liabilities be included in income from continuing operations in the reporting period that contains the enactment date of the change. That guidance applies even in situations in which the tax effects were initially recognized directly in other comprehensive income at the previous rate, resulting in stranded amounts in accumulated other comprehensive income ("AOCI") related to the income tax rate differential. Upon adopting ASU 2018-02, an entity is required to disclose: • Its accounting policy related to releasing income tax effects from AOCI; • Whether it has elected to reclassify, to retained earnings in the statement of stockholders’ equity, the stranded tax effects in AOCI related to the Act; and • If it has elected to reclassify to retained earnings the stranded tax effects in AOCI related to the Act, what the reclassification encompasses (i.e., whether it only includes the change in the federal corporate tax rate or whether it also includes other changes resulting from the Act that affect AOCI). The guidance in ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods therein. An entity will apply this guidance to each period in which the effect of the Act (or portion thereof) is recorded and may apply it either (1) retrospectively as of the date of enactment or (2) as of the beginning of the period of adoption. We are currently evaluating the potential impact of adopting ASU 2018-02 on our financial statements. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Adjustments to Prior Period Presentation and Other Recently Issued Accounting Standards | Revenue Recognition —In May 2014, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") which amends revenue recognition guidance and requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is codified in U.S. GAAP under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers . We adopted ASC 606 on January 1, 2018 using the full retrospective method. The adoption of ASC 606 did not impact the timing of our revenue recognition, but it changed the presentation of certain revenues and expenses previously reported on a net basis in our Condensed Consolidated Income Statements. Specifically, the following items previously reported on a net basis within Agency Commissions and Fees are now reported on a gross basis within Agency Direct Costs: (i) fees owed to the counterparties in auction guarantee risk sharing arrangements and (ii) fees owed to third parties who introduce us to auction or private sale consignors. In addition, consignor expense recoveries and buyer shipping fees previously reported on a net basis within Agency Direct Costs are now reported on a gross basis within Agency Commission and Fees. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of the retrospective adoption of ASC 606 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 . Statement of Cash Flows —In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , which updated the guidance on how certain cash receipts and cash payments should be presented and classified within the statement of cash flows. We retrospectively adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 changed how we classify cash proceeds received from our investment in company-owned life insurance ("COLI"), which is held in a rabbi trust and used to fund certain deferred compensation liabilities. Prior to the adoption of ASU 2016-15, COLI proceeds were classified as cash inflows from operating activities, but are now classified as cash inflows from investing activities. The adoption of ASU 2016-15 also required us to make certain accounting policy elections with respect to the statement of cash flows. First, ASU 2016-15 clarifies that COLI premiums paid may be classified as cash outflows from operating or investing activities, or a combination of both. In connection with the adoption of ASU 2016-15, we made an accounting policy election to classify COLI premiums paid as cash outflows from operating activities, consistent with our previous presentation of such payments. Second, ASU 2016-15 allows distributions received from equity method investees to be classified using either the cumulative earnings approach or the nature of distribution approach. In connection with the adoption of ASU 2016-15, we made an accounting policy election to classify distributions received from equity method investees using the cumulative earnings approach, consistent with our previous presentation of such distributions. The other aspects of ASU 2016-15 did not result in a change to our existing accounting policies for the preparation of the statement of cash flows. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2016-15 on our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 . In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows , to add and clarify guidance on the classification and presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In particular, ASU 2016-18 requires that restricted cash and restricted cash equivalents be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period totals disclosed in the statement of cash flows. Transfers between restricted and unrestricted cash accounts are not to be reported within the statement of cash flows. Only restricted cash receipts or payments directly with third parties are to be reported in the statement of cash flows as either an operating, investing, or financing activity, depending on the nature of the transaction. We retrospectively adopted ASU 2016-18 on January 1, 2018. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2016-18 on our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 . (See Note 11 for information related to our restricted cash balances.) Presentation of Pension and Postretirement Costs —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 that the service cost component of net periodic pension cost be presented in the same statement of operations line item as other employee compensation costs, while the remaining components of net periodic pension cost be presented outside of operating income (loss). We retrospectively adopted ASU 2017-07 on January 1, 2018. The table below under "Summary of Adjustments to Prior Period Presentation" shows the impact of our retrospective adoption of ASU 2017-07 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 . (See Note 7 for information related to our defined benefit pension plan in the U.K.) |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements | The following table summarizes the impact of the retrospective adoption of ASC 606 and ASU 2017-07 on our Condensed Consolidated Income Statements for the three and six months ended June 30, 2017 (in thousands of dollars): Three months ended June 30, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 276,807 $ 24,961 $ — $ 301,768 Total revenues $ 314,898 $ 24,961 $ — $ 339,859 Expenses: Agency direct costs $ 29,881 $ 24,961 $ — $ 54,842 Salaries and related $ 87,297 $ — $ 1,243 $ 88,540 Total expenses $ 199,500 $ 24,961 $ 1,243 $ 225,704 Operating income $ 115,398 $ — $ (1,243 ) $ 114,155 Non-operating (expense) income $ (299 ) $ — $ 1,243 $ 944 Net income attributable to Sotheby's $ 76,891 $ — $ — $ 76,891 Six months ended June 30, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 376,300 $ 36,733 $ — $ 413,033 Total revenues $ 502,435 $ 36,733 $ — $ 539,168 Expenses: Agency direct costs $ 39,398 $ 36,733 $ — $ 76,131 Salaries and related $ 151,643 $ — $ 2,447 $ 154,090 Total expenses $ 399,891 $ 36,733 $ 2,447 $ 439,071 Operating income $ 102,544 $ — $ (2,447 ) $ 100,097 Non-operating income $ 541 $ — $ 2,447 $ 2,988 Net income attributable to Sotheby's $ 65,566 $ — $ — $ 65,566 The following table summarizes the impact of the retrospective adoption of ASU 2016-15 and ASU 2016-18 on our Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017 (in thousands of dollars): As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Changes in other operating assets and liabilities $ (41,207 ) $ (2,100 ) $ — $ (43,307 ) Net cash provided by operating activities $ 56,357 $ (2,100 ) $ — $ 54,257 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,100 $ — $ 2,100 Decrease in restricted cash $ 7,749 $ — $ (7,749 ) $ — Net cash provided by investing activities $ 50,545 $ 2,100 $ (7,749 ) $ 44,896 Financing Activities: Increase in restricted cash related to York Property Mortgage $ (2,799 ) $ — $ 2,799 $ — Net cash used by financing activities $ (91,020 ) $ — $ 2,799 $ (88,221 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash $ 4,489 $ — $ 3,370 $ 7,859 Increase (decrease) in cash, cash equivalents, and restricted cash (a) $ 20,371 $ — $ (1,580 ) $ 18,791 Cash, cash equivalents, and restricted cash at beginning of period (a) $ 496,031 $ — 60,170 $ 556,201 Cash, cash equivalents, and restricted cash at end of period (a) $ 516,402 $ — $ 58,590 $ 574,992 (a) Restricted cash is included only in the adjusted balances, reflecting the retrospective adoption of ASU 2016-18. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents our segment information for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, 2018 Agency SFS All Other Reconciling items Total Revenues $ 327,445 $ 11,823 $ 8,550 $ (2,182 ) (a) $ 345,636 Segment income before taxes $ 67,173 $ 6,891 $ 1,051 $ (1,234 ) (b) $ 73,881 Three Months Ended June 30, 2017 Revenues (c) $ 319,474 $ 16,362 $ 7,026 $ (3,003 ) (a) $ 339,859 Segment income before taxes $ 97,226 $ 8,879 $ 2,255 $ (466 ) (b) $ 107,894 Six Months Ended June 30, 2018 Revenues $ 507,178 $ 24,239 $ 14,732 $ (4,717 ) (a) $ 541,432 Segment income before taxes $ 57,467 $ 15,402 $ 2,439 $ (12,895 ) (b) $ 62,413 Six Months Ended June 30, 2017 Revenues (c) $ 499,665 $ 30,733 $ 13,377 $ (4,607 ) (a) $ 539,168 Segment income before taxes $ 68,804 $ 16,212 $ 4,721 $ (1,133 ) (b) $ 88,604 (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. (c) Agency segment revenue for the three and six months ended June 30, 2017 has been recast to reflect the retrospective adoption of ASC 606. See Notes 1 and 4 . |
Reconciliation of Segment (Loss) Income Before Taxes | The table below presents a reconciliation of total segment income before taxes to consolidated income before taxes for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Agency $ 67,173 $ 97,226 $ 57,467 $ 68,804 SFS 6,891 8,879 15,402 16,212 All Other 1,051 2,255 2,439 4,721 Segment income before taxes 75,115 108,360 75,308 89,737 Unallocated amounts and reconciling items: Extinguishment of debt — — (10,855 ) — Equity in earnings of investees (a) (1,234 ) (466 ) (2,040 ) (1,133 ) Income before taxes $ 73,881 $ 107,894 $ 62,413 $ 88,604 (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, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, 2018 December 31, 2017 June 30, 2017 Agency $ 2,227,296 $ 2,395,429 $ 2,130,731 SFS 494,420 608,713 663,500 All Other 43,625 40,566 48,051 Total segment assets 2,765,341 3,044,708 2,842,282 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 46,326 42,599 23,096 Reconciling item related to SFS (a) — — (25,000 ) Consolidated assets $ 2,811,667 $ 3,087,307 $ 2,840,378 (a) As of June 30, 2017, segment assets for SFS included a $25 million consignor advance that is netted against an associated auction payable balance on our Condensed Consolidated Balance Sheets. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Segment | for information regarding the retrospective adoption of ASC 606.) The following table summarizes our revenues by segment and type for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Agency SFS All Other Total Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 257,799 $ — $ — $ 257,799 $ 266,949 $ — $ — $ 266,949 Auction related fees, net (a) 6,081 — — 6,081 16,045 — — 16,045 Private sale commissions 24,016 — 500 24,516 14,827 — — 14,827 Other Agency commissions and fees 2,359 — 124 2,483 3,947 — — 3,947 Total Agency commissions and fees 290,255 — 624 290,879 301,768 — — 301,768 Inventory sales 37,190 — 2,916 40,106 17,706 — 2,231 19,937 Advisory revenues — — 1,156 1,156 — — 1,431 1,431 License fee and other revenues — — 3,854 3,854 — — 3,364 3,364 Total revenue from contracts with customers 327,445 — 8,550 335,995 319,474 — 7,026 326,500 Finance revenue: Interest and related fees — 9,641 — 9,641 — 13,359 — 9,881 13,359 Total revenues $ 327,445 $ 9,641 $ 8,550 $ 345,636 $ 319,474 $ 13,359 $ 7,026 $ 339,859 Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Agency SFS All Other Total Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 389,929 — $ — — $ — $ 389,929 $ 357,565 — $ — — $ — $ 357,565 Auction related fees, net (a) 17,824 — — — — 17,824 21,498 — — — — 21,498 Private sale commissions 43,501 — — — 500 44,001 28,047 — — — — 28,047 Other Agency commissions and fees 4,351 — — — 300 4,651 5,923 — — — — 5,923 Total Agency commissions and fees 455,605 — 800 456,405 413,033 — — 413,033 Inventory sales 51,573 — — — 4,769 56,342 86,632 — 4,682 91,314 Advisory revenues — — — — 2,406 2,406 — — — — 2,829 2,829 License fee and other revenues — — — — 6,757 6,757 — — — — 5,866 5,866 Total revenue from contracts with customers 507,178 — 14,732 521,910 499,665 — 13,377 513,042 Finance revenue: Interest and related fees — — 19,522 — — 19,522 — — 26,126 — — 26,126 Total revenues $ 507,178 $ 19,522 $ 14,732 $ 541,432 $ 499,665 $ 26,126 $ 13,377 $ 539,168 (a) Auction Related Fees, net includes the net overage or shortfall attributable to auction guarantees, consignor expense recoveries, and shipping fees charged to buyers. |
Schedule of Contract with Customer | The table below summarizes the balances related to our contracts with customers as of and for the six months ended June 30, 2018 and 2017 (in thousands of dollars): June 30, June 30, Accounts Receivable Balance as of beginning of period $ 783,706 $ 424,418 Balance as of end of period $ 1,076,152 $ 837,200 Increase/(decrease) $ 292,446 $ 412,782 Client Payables Balance as of beginning of period $ 996,197 $ 511,876 Balance as of end of period $ 1,191,581 $ 867,856 Increase/(decrease) $ 195,384 $ 355,980 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Aggregate LTV Ratio | The table below provides the aggregate LTV ratio for the SFS loan portfolio as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Secured loans $ 479,972 $ 590,609 $ 651,361 Low auction estimate of collateral $ 1,159,693 $ 1,369,235 $ 1,445,847 Aggregate LTV ratio 41 % 43 % 45 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Secured loans with an LTV ratio above 50% $ 105,744 $ 168,116 $ 209,483 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 182,398 $ 269,063 $ 375,933 Aggregate LTV ratio of secured loans with an LTV ratio above 50% 58 % 62 % 56 % |
Schedule of Other Credit Quality Information | The table below provides other credit quality information regarding secured loans made by SFS as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): June 30, December 31, June 30, Total secured loans $ 479,972 $ 590,609 $ 651,361 Loans past due $ 62,310 $ 62,570 $ 108,560 Loans more than 90 days past due $ 41,819 $ 56,087 $ 41,448 Non-accrual loans $ 15,402 $ — $ — Impaired loans $ — $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — $ — Allowance for credit losses based on historical data 1,132 1,253 1,290 Total allowance for credit losses - secured loans $ 1,132 $ 1,253 $ 1,290 |
Schedule of Activity Related to Allowance for Credit Losses | Allowance for Credit Losses —During the period January 1, 2018 to June 30, 2018 , activity related to the Allowance for Credit Losses by segment was as follows (in thousands of dollars): SFS Agency Total Balance as of January 1, 2018 $ 1,253 $ 1,525 $ 2,778 Change in loan loss provision based on historical data (121 ) — (121 ) Balance as of June 30, 2018 $ 1,132 $ 1,525 $ 2,657 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | For the six months ended June 30, 2018 and 2017 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Agency All Other Total Agency All Other Total Beginning balance as of January 1 $ 44,396 $ 6,151 $ 50,547 $ 43,878 $ 6,151 $ 50,029 Goodwill acquired 5,259 — 5,259 — — — Foreign currency exchange rate changes (136 ) — (136 ) 322 — 322 Ending balance as of June 30 $ 49,519 $ 6,151 $ 55,670 $ 44,200 $ 6,151 $ 50,351 |
Schedule of Indefinite-Lived Intangible Assets | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2018 December 31, 2017 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - Art Advisory Partners 8 years 10,800 10,800 10,800 Non-compete agreements - Art Advisory Partners 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,200 1,200 1,125 Technology 4 years 4,461 — — Total intangible assets subject to amortization 19,521 15,060 14,985 Accumulated amortization (5,232 ) (3,892 ) (2,902 ) Total amortizable intangible assets (net) 14,289 11,168 12,083 Total intangible assets (net) $ 14,613 $ 11,492 $ 12,407 (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 exchange for an initial cash payment made in the third quarter of 2016 and a subsequent cash payment made in the third quarter of 2017. |
Schedule of Finite-lived Intangible Assets | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period June 30, 2018 December 31, 2017 June 30, Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - Art Advisory Partners 8 years 10,800 10,800 10,800 Non-compete agreements - Art Advisory Partners 6 years 3,060 3,060 3,060 Artworks database (b) 10 years 1,200 1,200 1,125 Technology 4 years 4,461 — — Total intangible assets subject to amortization 19,521 15,060 14,985 Accumulated amortization (5,232 ) (3,892 ) (2,902 ) Total amortizable intangible assets (net) 14,289 11,168 12,083 Total intangible assets (net) $ 14,613 $ 11,492 $ 12,407 (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 exchange for an initial cash payment made in the third quarter of 2016 and a subsequent cash payment made in the third quarter of 2017. |
Schedule of Estimated Aggregate 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, 2018 balance sheet date are as follows (in thousands of dollars): Period Amount July 2018 to June 2019 $ 3,095 July 2019 to June 2020 $ 3,095 July 2020 to June 2021 $ 3,095 July 2021 to June 2022 $ 2,376 July 2022 to June 2023 $ 1,470 |
Defined Benefit Pension Plan (T
Defined Benefit Pension Plan (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Credits Related to the U.K. Pension Plan | For the three and six months ended June 30, 2018 and 2017 , the components of the net pension credit for the U.K. Pension Plan recorded within Non-Operating Income in our Condensed Consolidated Income Statements were as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Interest cost $ 1,939 $ 1,999 3,920 3,937 Expected return on plan assets (2,839 ) (3,514 ) (5,741 ) (6,921 ) Prior service cost — 15 — 30 Amortization of actuarial loss 122 280 247 553 Amortization of prior service cost (26 ) (23 ) (52 ) (46 ) Net pension credit $ (804 ) $ (1,243 ) $ (1,626 ) $ (2,447 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Information Related to the Credit Agreement | The following tables summarize information related to our credit facilities as of and for the periods ended June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): As of and for the periods ended June 30, 2018 December 31, 2017 June 30, 2017 Maximum borrowing capacity (a) $ 1,100,000 $ 1,100,000 $ 1,335,000 Borrowing base $ 655,198 $ 605,927 $ 692,205 Borrowings outstanding (b) $ 63,000 $ 196,500 $ 531,500 Available borrowing capacity (c) $ 592,198 $ 409,427 $ 160,705 Average Borrowings Outstanding: Three months ended June 30, $ 63,637 N/A $ 541,874 Six months ended June 30, $ 105,823 N/A $ 552,130 Year ended December 31, N/A $ 479,367 N/A (a) On October 2, 2017, we reduced the borrowing capacity of the previous SFS Credit Facility by $235 million . This reduction, which was entirely at our option and as part of our ongoing capital allocation analysis, was executed in order to reduce facility fees for unused borrowing capacity. (b) The $63 million in borrowings outstanding under the New Credit Agreement as of June 30, 2018 were repaid in July 2018. (c) The available borrowing capacity is calculated as the borrowing base less borrowings outstanding. |
Schedule of Long-Term Debt | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , 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 $4,039, $4,545, and $5,050 $ 267,082 $ 270,556 $ 305,907 2022 Senior Notes, net of unamortized debt issuance costs of $0, $2,998, and $3,320 — 297,002 296,680 2025 Senior Notes, net of unamortized debt issuance costs of $5,248, $5,623, and $0 394,752 394,377 — Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010, $1,010, and $1,010 (13,423 ) (11,930 ) (38,825 ) 2022 Senior Notes, net of unamortized debt issuance costs of $0, $2,998, and $0 — (297,002 ) — Total Long-Term Debt, net $ 648,411 $ 653,003 $ 563,762 |
Schedule of Aggregate Future Principal and Interest Payments | The aggregate future principal and interest payments due under the New Credit Agreement, the York Property Mortgage, and the 2025 Senior Notes during the five-year period after June 30, 2018 are as follows (in thousands of dollars): Period Amount July 2018 to June 2019 $ 109,344 July 2019 to June 2020 $ 47,174 July 2020 to June 2021 $ 46,774 July 2021 to June 2022 $ 46,371 July 2022 to June 2023 $ 230,678 |
Derivative Financial Instrume38
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value Information Related to Derivative Financial Instruments | The following tables present fair value information related to the derivative financial instruments designated as hedging instruments as of June 30, 2018 , December 31, 2017 , and June 30, 2017 (in thousands of dollars): Assets Liabilities June 30, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Other Current Assets $ 274 N/A $ — Interest rate collar N/A — Other Current Liabilities 25 Interest rate collar N/A — Other Long-Term Liabilities 207 Total cash flow hedges 274 — 232 Net Investment Hedges: Foreign exchange contracts Other Current Assets 4,444 N/A — Total $ 4,718 $ 232 Assets Liabilities December 31, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Other Current Assets $ 339 N/A $ — Interest rate collar N/A — Other Current Liabilities 666 Interest rate collar N/A — Other Long-Term Liabilities 1,501 Total cash flow hedges 339 2,167 Net Investment Hedges: Foreign exchange contracts N/A — Other Current Liabilities 3,756 Total $ 339 $ 5,923 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 |
Summary of the Effect of the Derivative Financial Instruments | The following tables summarize the effect of the derivative financial instruments designated as hedging instruments on our Condensed Consolidated Income Statements and Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive Income - 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, 2018 2017 2018 2017 2018 2017 Cash Flow Hedges: Interest rate swaps $ 15 $ (7 ) Interest Expense $ (93 ) $ (50 ) $ — $ — Interest rate collar 207 (527 ) Interest Expense 7 — — — Interest rate collar — — Non-operating income — — — 622 Total cash flow hedges 222 (534 ) (86 ) (50 ) — 622 Net Investment Hedges: Foreign exchange contracts 3,350 (1,454 ) N/A — — — — Total $ 3,572 $ (1,988 ) $ (86 ) $ (50 ) $ — $ 622 Gain (Loss) Recognized in Other Comprehensive Income - 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, 2018 2017 2018 2017 2018 2017 Cash Flow Hedges: Interest rate swaps $ 95 $ 134 Interest Expense $ (145 ) $ 35 $ — $ — Interest rate collar 1,187 85 Interest Expense 169 — — — Interest rate collar — — Non-operating income — — — 622 Total cash flow hedges 1,282 219 24 35 — 622 Net Investment Hedges: Foreign exchange contracts 1,740 (2,078 ) N/A — — — — Total $ 3,022 $ (1,859 ) $ 24 $ 35 $ — $ 622 |
Supplemental Condensed Consol39
Supplemental Condensed Consolidated Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Prepaid expenses $ 25,586 $ 25,418 $ 27,293 Derivative financial instruments (see Note 9) 274 339 308 Insurance recoveries 2,335 — — Other 15,067 6,253 17,854 Total Prepaid Expenses and Other Current Assets $ 43,262 $ 32,010 $ 45,455 |
Schedule of Other Long-Term Assets | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Other Long-Term Assets consisted of the following (in thousands of dollars): June 30, December 31, June 30, Defined benefit pension plan asset $ 107,647 $ 108,826 $ 86,317 Equity method investments (a) 46,789 46,905 47,299 Trust assets related to deferred compensation liability 30,017 26,240 25,128 Restricted cash (see Note 12) 17,442 17,916 17,332 Insurance recoveries 12,782 12,242 14,527 Other 15,136 15,479 2,392 Total Other Long-Term Assets $ 229,813 $ 227,608 $ 192,995 (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. |
Schedule of Other Long-Term Liabilities | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): June 30, December 31, June 30, Deferred compensation liability $ 29,605 $ 25,614 $ 24,477 Acquisition earn-out consideration 8,750 17,500 17,500 Interest rate collar liability (see Note 9) 207 1,501 3,257 Other 7,609 6,809 6,623 Total Other Long-Term Liabilities $ 46,171 $ 51,424 $ 51,857 |
Supplemental Condensed Consol40
Supplemental Condensed Consolidated Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Restricted Cash Classified Within Current Assets | As of June 30, 2018 , December 31, 2017 , and June 30, 2017 , cash, cash equivalents, and restricted cash consisted of the following (in thousands of dollars): June 30, December 31, June 30, Cash and cash equivalents $ 432,357 $ 544,432 $ 516,402 Restricted cash, recorded within current assets: Consignor funds held in legally segregated accounts 23,528 46,029 33,164 Funds deposited with the trustee for the redemption of the 2022 Senior Notes (see Note 8) — 312,250 — Cash Management Account related to the York Property Mortgage (see Note 8) 5,264 3,107 7,434 Other 187 192 660 Restricted cash, recorded within current assets 28,979 361,578 41,258 Restricted cash, recorded within other long-term assets (a) 17,442 17,916 17,332 Total restricted cash 46,421 379,494 58,590 Cash, cash equivalents, and restricted cash $ 478,778 $ 923,926 $ 574,992 (a) 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. |
Supplemental Condensed Consolidated Cash Flow Information | For the six months ended June 30, 2018 and 2017 , 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, 2018 2017 (Increase) decrease in: Prepaid expenses and other current assets $ (8,233 ) $ 2,342 Other long-term assets (3,611 ) (1,306 ) Income tax receivables and deferred income tax assets (9,782 ) (20,896 ) (Decrease) increase in: Accounts payable and accrued liabilities and other liabilities (23,870 ) (20,575 ) Accrued income taxes and deferred income tax liabilities 4,126 (2,872 ) Total changes in other operating assets and liabilities $ (41,370 ) $ (43,307 ) |
Shareholders' Equity and Divi41
Shareholders' Equity and Dividends (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Information Regarding Common Stock Repurchase Program | The following table provides information regarding our common stock repurchase program for the six months ended June 30, 2018 and 2017 (in thousands, except for per share data): Six Months Ended June 30, 2018 June 30, 2017 Shares repurchased 1,193 740 Aggregate purchase price $ 62,497 $ 33,940 Average price per share $ 52.40 $ 45.86 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss | The following is a summary of the changes in Accumulated Other Comprehensive Loss and the details regarding any reclassification adjustments made for the three and six months ended June 30, 2018 and 2017 (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Currency Translation Adjustments Balance at beginning of period $ (67,280 ) $ (86,853 ) $ (74,505 ) $ (89,478 ) Other comprehensive (loss) income before reclassifications, net of tax of $0, $835, $400, and $1,421 (14,238 ) 6,526 (7,013 ) 9,151 Other comprehensive (loss) income (14,238 ) 6,526 (7,013 ) 9,151 Balance at end of period (81,518 ) (80,327 ) (81,518 ) (80,327 ) Cash Flow Hedges Balance at beginning of period 141 (2,826 ) (1,029 ) (3,664 ) Other comprehensive income (loss) before reclassifications, net of tax of $73, ($331), $423, and $135 222 (534 ) 1,282 219 Reclassifications from accumulated other comprehensive loss, net of tax of ($28), $354, $8, and $407 (86 ) 572 24 657 Other comprehensive income 136 38 1,306 876 Balance at end of period 277 (2,788 ) 277 (2,788 ) Net Investment Hedges Balance at beginning of period 11,949 15,994 13,559 16,618 Other comprehensive income (loss) before reclassifications, net of tax of $1,094, ($885), $569, and ($1,270) 3,350 (1,454 ) 1,740 (2,078 ) Other comprehensive income (loss) 3,350 (1,454 ) 1,740 (2,078 ) Balance at end of period 15,299 14,540 15,299 14,540 Defined Benefit Pension Plan Balance at beginning of period (434 ) (13,855 ) (491 ) (13,834 ) Currency translation adjustments 32 (571 ) 7 (800 ) Other comprehensive income (loss) before reclassifications 32 (571 ) 7 (800 ) Prior service cost amortization, net of tax of ($4), ($3), ($8), and ($7) (21 ) (20 ) (43 ) (39 ) Actuarial loss amortization, net of tax of $19, $45, $40, and $91 102 235 206 462 Reclassifications from accumulated other comprehensive loss, net of tax 81 215 163 423 Other comprehensive income (loss) 113 (356 ) 170 (377 ) Balance at end of period (321 ) (14,211 ) (321 ) (14,211 ) Total other comprehensive (loss) income attributable to Sotheby's (10,639 ) 4,754 (3,797 ) 7,572 Accumulated other comprehensive loss as of June 30 $ (66,263 ) $ (82,786 ) $ (66,263 ) $ (82,786 ) |
Summary of Reclassification Adjustments | Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cash Flow Hedges Settlements $ (114 ) $ 926 $ 32 $ 1,064 Tax effect 28 (354 ) (8 ) (407 ) Reclassification adjustments, net of tax (86 ) 572 24 657 Defined Benefit Pension Plan Prior service cost amortization (26 ) (23 ) (52 ) (46 ) Actuarial loss amortization 122 280 247 553 Pre-tax total 96 257 195 507 Tax effect (15 ) (42 ) (32 ) (84 ) Reclassification adjustments, net of tax 81 215 163 423 Total reclassification adjustments, net of tax $ (5 ) $ 787 $ 187 $ 1,080 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Expense for Share-Based Payments | For the three and six months ended June 30, 2018 and 2017 , compensation expense related to share-based payments was as follows (in thousands of dollars): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Pre-tax $ 6,312 $ 5,946 $ 14,689 $ 12,015 After-tax $ 5,087 $ 3,940 $ 11,726 $ 7,997 |
Schedule of Changes to the Number of Outstanding RSU's, PSU's, and Restricted Shares | For the six months ended June 30, 2018 , 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, 2018 1,922 $ 36.59 Granted 686 $ 47.06 Vested (526 ) $ 38.95 Canceled (157 ) $ 39.83 Outstanding at June 30, 2018 1,925 $ 39.41 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted (Loss) 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, 2018 and 2017 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Basic : Numerator: Net income attributable to Sotheby’s $ 57,282 $ 76,891 $ 50,760 $ 65,566 Less: Net income attributable to participating securities 844 1,176 763 1,019 Net income attributable to Sotheby’s common shareholders $ 56,438 $ 75,715 $ 49,997 $ 64,547 Denominator: Weighted average common shares outstanding 51,780 52,716 52,122 52,866 Basic earnings per share - Sotheby’s common shareholders $ 1.09 $ 1.44 $ 0.96 $ 1.22 Diluted : Numerator: Net income attributable to Sotheby’s $ 57,282 $ 76,891 $ 50,760 $ 65,566 Less: Net income attributable to participating securities 844 1,176 763 1,019 Net income attributable to Sotheby’s common shareholders $ 56,438 $ 75,715 $ 49,997 $ 64,547 Denominator: Weighted average common shares outstanding 51,780 52,716 52,122 52,866 Weighted average effect of dilutive potential common shares: Performance share units 259 151 197 293 Deferred stock units 171 159 172 157 Stock options — 28 — 26 Weighted average dilutive potential common shares outstanding 430 338 369 476 Weighted average diluted shares outstanding 52,210 53,054 52,491 53,342 Diluted earnings per share - Sotheby’s common shareholders $ 1.08 $ 1.43 $ 0.95 $ 1.21 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)salesroom | Jun. 30, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of salesrooms | salesroom | 10 | |||
Ownership interest in joint venture (as a percent) | 80.00% | 80.00% | ||
Ownership interest reported as Noncontrolling Interest (as a percent) | 20.00% | 20.00% | ||
Revenues: | ||||
Agency commissions and fees | $ 290,879 | $ 301,768 | $ 456,405 | $ 413,033 |
Total revenues | 345,636 | 339,859 | 541,432 | 539,168 |
Expenses: | ||||
Agency direct costs | 59,449 | 54,842 | 94,722 | 76,131 |
Salaries and related | 96,718 | 88,540 | 175,437 | 154,090 |
Total expenses | 261,810 | 225,704 | 450,695 | 439,071 |
Operating loss | 83,826 | 114,155 | 90,737 | 100,097 |
Non-operating income | 2,449 | 944 | 3,873 | 2,988 |
Net income attributable to Sotheby’s | 57,282 | 76,891 | 50,760 | 65,566 |
Operating Activities: | ||||
Changes in other operating assets and liabilities | (41,370) | (43,307) | ||
Net cash provided by operating activities | 16,795 | 54,257 | ||
Investing Activities: | ||||
Proceeds from company-owned life insurance | 0 | 2,100 | ||
Decrease in restricted cash | 0 | |||
Net cash provided by investing activities | 66,001 | 44,896 | ||
Financing Activities: | ||||
Increase in restricted cash related to York Property Mortgage | 0 | |||
Net cash used by financing activities | (521,210) | (88,221) | ||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (6,734) | 7,859 | ||
Increase (decrease) in cash, cash equivalents, and restricted cash (a) | (445,148) | 18,791 | ||
Cash, cash equivalents, and restricted cash at beginning of period | 923,926 | 556,201 | ||
Cash, cash equivalents, and restricted cash at end of period | $ 478,778 | 574,992 | $ 478,778 | 574,992 |
As Previously Reported | ||||
Revenues: | ||||
Agency commissions and fees | 276,807 | 376,300 | ||
Total revenues | 314,898 | 502,435 | ||
Expenses: | ||||
Agency direct costs | 29,881 | 39,398 | ||
Salaries and related | 87,297 | 151,643 | ||
Total expenses | 199,500 | 399,891 | ||
Operating loss | 115,398 | 102,544 | ||
Non-operating income | (299) | 541 | ||
Net income attributable to Sotheby’s | 76,891 | 65,566 | ||
Operating Activities: | ||||
Changes in other operating assets and liabilities | (41,207) | |||
Net cash provided by operating activities | 56,357 | |||
Investing Activities: | ||||
Proceeds from company-owned life insurance | 0 | |||
Decrease in restricted cash | 7,749 | |||
Net cash provided by investing activities | 50,545 | |||
Financing Activities: | ||||
Increase in restricted cash related to York Property Mortgage | (2,799) | |||
Net cash used by financing activities | (91,020) | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 4,489 | |||
Increase (decrease) in cash, cash equivalents, and restricted cash (a) | 20,371 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 496,031 | |||
Cash, cash equivalents, and restricted cash at end of period | 516,402 | 516,402 | ||
ASC 606 | Adjustment | ||||
Revenues: | ||||
Agency commissions and fees | 24,961 | 36,733 | ||
Total revenues | 24,961 | 36,733 | ||
Expenses: | ||||
Agency direct costs | 24,961 | 36,733 | ||
Salaries and related | 0 | 0 | ||
Total expenses | 24,961 | 36,733 | ||
Operating loss | 0 | 0 | ||
Non-operating income | 0 | 0 | ||
Net income attributable to Sotheby’s | 0 | 0 | ||
ASU 2017-07 | Adjustment | ||||
Revenues: | ||||
Agency commissions and fees | 0 | 0 | ||
Total revenues | 0 | 0 | ||
Expenses: | ||||
Agency direct costs | 0 | 0 | ||
Salaries and related | 1,243 | 2,447 | ||
Total expenses | 1,243 | 2,447 | ||
Operating loss | (1,243) | (2,447) | ||
Non-operating income | 1,243 | 2,447 | ||
Net income attributable to Sotheby’s | 0 | 0 | ||
ASU 2016-15 | Adjustment | ||||
Operating Activities: | ||||
Changes in other operating assets and liabilities | (2,100) | |||
Net cash provided by operating activities | (2,100) | |||
Investing Activities: | ||||
Proceeds from company-owned life insurance | 2,100 | |||
Decrease in restricted cash | 0 | |||
Net cash provided by investing activities | 2,100 | |||
Financing Activities: | ||||
Increase in restricted cash related to York Property Mortgage | 0 | |||
Net cash used by financing activities | 0 | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | |||
Increase (decrease) in cash, cash equivalents, and restricted cash (a) | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 0 | 0 | ||
ASU 2016-18 | Adjustment | ||||
Operating Activities: | ||||
Changes in other operating assets and liabilities | 0 | |||
Net cash provided by operating activities | 0 | |||
Investing Activities: | ||||
Proceeds from company-owned life insurance | 0 | |||
Decrease in restricted cash | (7,749) | |||
Net cash provided by investing activities | (7,749) | |||
Financing Activities: | ||||
Increase in restricted cash related to York Property Mortgage | 2,799 | |||
Net cash used by financing activities | 2,799 | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 3,370 | |||
Increase (decrease) in cash, cash equivalents, and restricted cash (a) | (1,580) | |||
Cash, cash equivalents, and restricted cash at beginning of period | 60,170 | |||
Cash, cash equivalents, and restricted cash at end of period | $ 58,590 | $ 58,590 |
Seasonality of Business (Detail
Seasonality of Business (Details) - principal_selling_season | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Seasonality Of Business [Abstract] | |||
Number of principal selling seasons | 2 | ||
Second and fourth quarter Net Auction Sales (as a percent) | 80.00% | 82.00% | |
Auction commission revenues (as a percent) | 66.00% | 75.00% |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting [Line Items] | ||||
Revenues | $ 345,636 | $ 339,859 | $ 541,432 | $ 539,168 |
Segment income before taxes | 73,881 | 107,894 | 62,413 | 88,604 |
Operating Segments | ||||
Segment Reporting [Line Items] | ||||
Segment income before taxes | 75,115 | 108,360 | 75,308 | 89,737 |
Operating Segments | Agency | ||||
Segment Reporting [Line Items] | ||||
Revenues | 327,445 | 319,474 | 507,178 | 499,665 |
Segment income before taxes | 67,173 | 97,226 | 57,467 | 68,804 |
Operating Segments | SFS | ||||
Segment Reporting [Line Items] | ||||
Revenues | 11,823 | 16,362 | 24,239 | 30,733 |
Segment income before taxes | 6,891 | 8,879 | 15,402 | 16,212 |
Operating Segments | All Other | ||||
Segment Reporting [Line Items] | ||||
Revenues | 8,550 | 7,026 | 14,732 | 13,377 |
Segment income before taxes | 1,051 | 2,255 | 2,439 | 4,721 |
Reconciling items | ||||
Segment Reporting [Line Items] | ||||
Revenues | (2,182) | (3,003) | (4,717) | (4,607) |
Segment income before taxes | $ (1,234) | $ (466) | $ (12,895) | $ (1,133) |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment (Loss) Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | $ 73,881 | $ 107,894 | $ 62,413 | $ 88,604 |
Extinguishment of debt | 0 | 0 | 10,855 | 0 |
Equity in earnings of investees | 1,234 | 466 | 2,040 | 1,133 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | 75,115 | 108,360 | 75,308 | 89,737 |
Operating Segments | Agency | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | 67,173 | 97,226 | 57,467 | 68,804 |
Operating Segments | SFS | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | 6,891 | 8,879 | 15,402 | 16,212 |
Operating Segments | All Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | 1,051 | 2,255 | 2,439 | 4,721 |
Reconciling items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Segment income before taxes | (1,234) | (466) | (12,895) | (1,133) |
Extinguishment of debt | 0 | 0 | (10,855) | 0 |
Equity in earnings of investees | $ (1,234) | $ (466) | $ (2,040) | $ (1,133) |
Segment Reporting - Reconcili50
Segment Reporting - Reconciliation of Segment Assets to Consolidated Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Segment Reporting [Line Items] | |||
Consolidated assets | $ 2,811,667 | $ 3,087,307 | $ 2,840,378 |
Operating Segments | |||
Segment Reporting [Line Items] | |||
Consolidated assets | 2,765,341 | 3,044,708 | 2,842,282 |
Operating Segments | Agency | |||
Segment Reporting [Line Items] | |||
Consolidated assets | 2,227,296 | 2,395,429 | 2,130,731 |
Operating Segments | SFS | |||
Segment Reporting [Line Items] | |||
Consolidated assets | 494,420 | 608,713 | 663,500 |
Operating Segments | All Other | |||
Segment Reporting [Line Items] | |||
Consolidated assets | 43,625 | 40,566 | 48,051 |
Unallocated amounts and reconciling items | |||
Segment Reporting [Line Items] | |||
Consolidated assets | 46,326 | 42,599 | 23,096 |
Unallocated amounts and reconciling items | SFS | |||
Segment Reporting [Line Items] | |||
Consolidated assets | $ 0 | $ 0 | $ 25,000 |
Revenues (Revenues by Segment)
Revenues (Revenues by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2004 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | $ 345,636 | $ 339,859 | $ 541,432 | $ 539,168 | ||||
Period after sale when purchase price is due | 30 days | |||||||
Period from sale date when net proceeds are due | 35 days | |||||||
Accounts Receivable (net) | 1,088,569 | 847,332 | $ 1,088,569 | 847,332 | $ 795,239 | |||
Contract costs | 1,076,152 | 837,200 | 1,076,152 | 837,200 | $ 783,706 | $ 424,418 | ||
Prepaid Expenses and Other Current Assets | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Contract costs | 6,800 | 7,500 | 6,800 | 7,500 | 9,600 | |||
Consignor paid before payment was collected from the buyer | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Accounts Receivable (net) | 75,300 | 85,300 | 75,300 | 85,300 | 92,100 | |||
Buyer allowed to take possession before making payment | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Accounts Receivable (net) | 26,900 | 33,400 | 26,900 | 33,400 | $ 53,800 | |||
Trademarks | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Initial term | 50 years | |||||||
Renewal term | 50 years | |||||||
Auction commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 257,799 | 266,949 | 389,929 | 357,565 | ||||
Auction related fees, net | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 6,081 | 16,045 | 17,824 | 21,498 | ||||
Private sale commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 24,516 | 14,827 | 44,001 | 28,047 | ||||
Other Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 2,483 | 3,947 | 4,651 | 5,923 | ||||
Total Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 290,879 | 301,768 | 456,405 | 413,033 | ||||
Inventory sales | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 40,106 | 19,937 | 56,342 | 91,314 | ||||
Advisory revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 1,156 | 1,431 | 2,406 | 2,829 | ||||
License fee and other revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 3,854 | 3,364 | 6,757 | 5,866 | ||||
Total revenue from contracts with customers | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 335,995 | 326,500 | 521,910 | 513,042 | ||||
Interest and related fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 9,641 | 13,359 | 19,522 | 26,126 | ||||
Agency | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 327,445 | 319,474 | 507,178 | 499,665 | ||||
Agency | Auction commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 257,799 | 266,949 | 389,929 | 357,565 | ||||
Agency | Auction related fees, net | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 6,081 | 16,045 | 17,824 | 21,498 | ||||
Agency | Private sale commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 24,016 | 14,827 | 43,501 | 28,047 | ||||
Agency | Other Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 2,359 | 3,947 | 4,351 | 5,923 | ||||
Agency | Total Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 290,255 | 301,768 | 455,605 | 413,033 | ||||
Agency | Inventory sales | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 37,190 | 17,706 | 51,573 | 86,632 | ||||
Agency | Advisory revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
Agency | License fee and other revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
Agency | Total revenue from contracts with customers | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 327,445 | 319,474 | 507,178 | 499,665 | ||||
Agency | Interest and related fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 9,641 | 13,359 | 19,522 | 26,126 | ||||
SFS | Auction commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Auction related fees, net | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Private sale commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Other Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Total Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Inventory sales | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Advisory revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | License fee and other revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Total revenue from contracts with customers | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
SFS | Interest and related fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 9,641 | 13,359 | 19,522 | 26,126 | ||||
All Other | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 8,550 | 7,026 | 14,732 | 13,377 | ||||
All Other | Auction commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
All Other | Auction related fees, net | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 0 | 0 | 0 | 0 | ||||
All Other | Private sale commissions | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 500 | 0 | 500 | 0 | ||||
All Other | Other Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 124 | 0 | 300 | 0 | ||||
All Other | Total Agency commissions and fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 624 | 0 | 800 | 0 | ||||
All Other | Inventory sales | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 2,916 | 2,231 | 4,769 | 4,682 | ||||
All Other | Advisory revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 1,156 | 1,431 | 2,406 | 2,829 | ||||
All Other | License fee and other revenues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 3,854 | 3,364 | 6,757 | 5,866 | ||||
All Other | Total revenue from contracts with customers | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | 8,550 | 7,026 | 14,732 | 13,377 | ||||
All Other | Interest and related fees | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenue from contracts with customers | $ 0 | $ 0 | $ 0 | $ 0 |
Revenues (Contracts with Custom
Revenues (Contracts with Customers) (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Jan. 01, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Accounts Receivable | $ 1,076,152 | $ 837,200 | $ 783,706 | $ 424,418 |
Increase/(decrease) | 292,446 | 412,782 | ||
Client Payables | 1,191,581 | 867,856 | $ 996,197 | $ 511,876 |
Increase/(decrease) | $ 195,384 | $ 355,980 |
Notes Receivable - Sotheby's Fi
Notes Receivable - Sotheby's Financial Services Narrative (Details) - USD ($) | Aug. 03, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Period in advance during which sellers may receive funds upon consignment (up to) | 1 year | |||
Repayments collected | $ 41,100,000 | $ 6,900,000 | ||
Target LTV ratio | 50.00% | 50.00% | 50.00% | |
Past due period | 90 days | |||
Unfunded commitments to extend additional credit through SFS | $ 50,200,000 | |||
Subsequent Event | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Additional proceeds | $ 14,100,000 | |||
Recorded investment | $ 3,100,000 | |||
Minimum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
LTV ratio | 51.00% | |||
Maximum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
LTV ratio | 60.00% | |||
Term loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Initial maturities of term loans (up to) (term) | 2 years | |||
Past due loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Target LTV ratio | 25.00% | |||
Accrual of interest | $ 46,900,000 | |||
Collateral held against amounts reclassified from Accounts Receivable (net) | 190,800,000 | |||
SFS | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Net Notes Receivable balance of SFS | 479,972,000 | $ 651,361,000 | $ 590,609,000 | |
Term loans issued by SFS | 28,400,000 | 85,600,000 | $ 54,400,000 | |
Loans issued to refinance client auction and private sale purchases | $ 15,100,000 | $ 3,800,000 | ||
Target LTV ratio | 41.00% | 45.00% | 43.00% | |
Net Notes Receivable balance past due | $ 62,310,000 | $ 108,560,000 | $ 62,570,000 | |
Net Notes Receivable balance 90 days past due | 41,819,000 | 41,448,000 | 56,087,000 | |
Collateral held against amounts reclassified from Accounts Receivable (net) | 1,159,693,000 | 1,445,847,000 | 1,369,235,000 | |
Additional proceeds | (32,000,000) | |||
Recorded investment | 17,200,000 | |||
Non-accrual loan outstanding | 15,402,000 | 0 | 0 | |
Accrued interest | 1,800,000 | |||
Impaired loans outstanding | $ 0 | $ 0 | $ 0 |
Notes Receivable - Schedule of
Notes Receivable - Schedule of Aggregate LTV Ratio (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Segment Reporting [Line Items] | |||
Aggregate LTV ratio | 50.00% | 50.00% | 50.00% |
SFS | |||
Segment Reporting [Line Items] | |||
Secured loans | $ 479,972 | $ 590,609 | $ 651,361 |
Low auction estimate of collateral | $ 1,159,693 | $ 1,369,235 | $ 1,445,847 |
Aggregate LTV ratio | 41.00% | 43.00% | 45.00% |
SFS | Loan to Value Ratio Above 50% | |||
Segment Reporting [Line Items] | |||
Secured loans | $ 105,744 | $ 168,116 | $ 209,483 |
Low auction estimate of collateral | $ 182,398 | $ 269,063 | $ 375,933 |
Aggregate LTV ratio | 58.00% | 62.00% | 56.00% |
Notes Receivable - Schedule o55
Notes Receivable - Schedule of Other Credit Quality Information (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Allowance for credit losses: | |||
Total allowance for credit losses - secured loans | $ 2,657,000 | $ 2,778,000 | |
SFS | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total secured loans | 479,972,000 | 590,609,000 | $ 651,361,000 |
Loans past due | 62,310,000 | 62,570,000 | 108,560,000 |
Loans more than 90 days past due | 41,819,000 | 56,087,000 | 41,448,000 |
Non-accrual loans | 15,402,000 | 0 | 0 |
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 | 1,132,000 | 1,253,000 | 1,290,000 |
Total allowance for credit losses - secured loans | $ 1,132,000 | $ 1,253,000 | $ 1,290,000 |
Notes Receivable - Schedule o56
Notes Receivable - Schedule of Activity Related to Allowance for Credit Losses (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Allowance for Loan and Lease Losses | |
Allowance for credit losses, beginning balance | $ 2,778 |
Change in loan loss provision | (121) |
Allowance for credit losses, ending balance | 2,657 |
SFS | |
Allowance for Loan and Lease Losses | |
Allowance for credit losses, beginning balance | 1,253 |
Change in loan loss provision | (121) |
Allowance for credit losses, ending balance | 1,132 |
Agency | |
Allowance for Loan and Lease Losses | |
Allowance for credit losses, beginning balance | 1,525 |
Change in loan loss provision | 0 |
Allowance for credit losses, ending balance | $ 1,525 |
Notes Receivable - Agency Segme
Notes Receivable - Agency Segment Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Repayments collected | $ 41,100 | $ 6,900 | |
Credit loss | 2,657 | $ 2,778 | |
Agency | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes Receivable within the Agency segment | 1,200 | 2,600 | 2,700 |
Repayments collected | 1,000 | 5,000 | |
Total secured loans | 2,100 | $ 3,800 | 2,100 |
Credit loss | $ 1,525 | $ 1,525 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill | ||
Beginning balance | $ 50,547 | $ 50,029 |
Goodwill acquired | 5,259 | 0 |
Foreign currency exchange rate changes | (136) | 322 |
Ending balance | 55,670 | 50,351 |
Agency | ||
Goodwill | ||
Beginning balance | 44,396 | 43,878 |
Goodwill acquired | 5,259 | 0 |
Foreign currency exchange rate changes | (136) | 322 |
Ending balance | 49,519 | 44,200 |
All Other | ||
Goodwill | ||
Beginning balance | 6,151 | 6,151 |
Goodwill acquired | 0 | 0 |
Foreign currency exchange rate changes | 0 | 0 |
Ending balance | $ 6,151 | $ 6,151 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets - Schedule of Indefinite and Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets subject to amortization | $ 19,521 | $ 15,060 | $ 14,985 |
Accumulated amortization | (5,232) | (3,892) | (2,902) |
Total amortizable intangible assets (net) | 14,289 | 11,168 | 12,083 |
Total intangible assets (net) | 14,613 | 11,492 | 12,407 |
License | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 324 | 324 | 324 |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 8 years | ||
Intangible assets subject to amortization | $ 10,800 | 10,800 | 10,800 |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 6 years | ||
Intangible assets subject to amortization | $ 3,060 | 3,060 | 3,060 |
Artworks database | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 10 years | ||
Intangible assets subject to amortization | $ 1,200 | 1,200 | 1,125 |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 4 years | ||
Intangible assets subject to amortization | $ 4,461 | $ 0 | $ 0 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense related to intangible assets | $ 0.7 | $ 0.5 | $ 1.3 | $ 1 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets - Schedule of Estimated Aggregate Amortization Expense (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract] | |
July 2018 to June 2019 | $ 3,095 |
July 2019 to June 2020 | 3,095 |
July 2020 to June 2021 | 3,095 |
July 2021 to June 2022 | 2,376 |
July 2022 to June 2023 | $ 1,470 |
Defined Benefit Pension Plan (D
Defined Benefit Pension Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Retirement Benefits [Abstract] | ||||
Interest cost | $ 1,939 | $ 1,999 | $ 3,920 | $ 3,937 |
Expected return on plan assets | (2,839) | (3,514) | (5,741) | (6,921) |
Prior service cost | 0 | 15 | 0 | 30 |
Amortization of actuarial loss | 122 | 280 | 247 | 553 |
Amortization of prior service cost | (26) | (23) | (52) | (46) |
Net pension credit | $ (804) | $ (1,243) | $ (1,626) | $ (2,447) |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility Narrative (Details) - Credit Agreement - USD ($) | Jun. 26, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Debt [Line Items] | ||||
Maximum borrowing capacity | $ 1,100,000,000 | $ 1,100,000,000 | $ 1,335,000,000 | |
Line of credit, sub limit | 350,000,000 | |||
Maximum increase in borrowing capacity | 300,000,000 | |||
Aggregate fees paid | 4,000,000 | |||
Unamortized fees included within Other Long-Term Assets | $ 4,000,000 | |||
LIBOR | ||||
Debt [Line Items] | ||||
Decrease in basis points | 0.25% |
Debt - Summary of Information R
Debt - Summary of Information Related to the Credit Agreement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Oct. 02, 2017 | |
Line of Credit Facility [Line Items] | ||||||
Borrowings outstanding | $ 63,000,000 | $ 531,500,000 | $ 63,000,000 | $ 531,500,000 | $ 196,500,000 | |
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 1,100,000,000 | 1,335,000,000 | 1,100,000,000 | 1,335,000,000 | 1,100,000,000 | |
Borrowing base | 655,198,000 | 692,205,000 | 655,198,000 | 692,205,000 | 605,927,000 | |
Borrowings outstanding | 63,000,000 | 531,500,000 | 63,000,000 | 531,500,000 | 196,500,000 | |
Available borrowing capacity | 592,198,000 | 160,705,000 | 592,198,000 | 160,705,000 | 409,427,000 | |
Average borrowings outstanding | $ 63,637,000 | $ 541,874,000 | $ 105,823,000 | $ 552,130,000 | $ 479,367,000 | |
SFS Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Decrease to borrowing capacity | $ 235,000,000 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Debt [Line Items] | |||
Total Long-Term Debt, net | $ 648,411 | $ 653,003 | $ 563,762 |
York Property Mortgage | |||
Debt [Line Items] | |||
Long-term debt | 267,082 | 270,556 | 305,907 |
Less current portion | (13,423) | (11,930) | (38,825) |
Unamortized debt issuance costs, noncurrent | 4,039 | 4,545 | 5,050 |
Unamortized debt issuance costs, current | 1,010 | 1,010 | 1,010 |
2022 Senior Notes | |||
Debt [Line Items] | |||
Long-term debt | 0 | 297,002 | 296,680 |
Less current portion | 0 | (297,002) | 0 |
Unamortized debt issuance costs, noncurrent | 0 | 2,998 | 3,320 |
2025 Senior Notes | |||
Debt [Line Items] | |||
Long-term debt | 394,752 | 394,377 | 0 |
Unamortized debt issuance costs, noncurrent | 5,248 | 5,623 | 0 |
Unamortized debt issuance costs, current | $ 0 | $ 2,998 | $ 0 |
Debt - York Property Mortgage N
Debt - York Property Mortgage Narrative (Details) - USD ($) | Jul. 02, 2018 | Jul. 03, 2017 | Jul. 01, 2017 | Jul. 01, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2021 | Dec. 31, 2017 | Jun. 20, 2017 |
Debt [Line Items] | |||||||||
Equity | $ 606,744,000 | $ 543,143,000 | $ 616,940,000 | ||||||
Annual prepayments | 3,978,000 | 3,810,000 | |||||||
Parent Company | |||||||||
Debt [Line Items] | |||||||||
Equity | 606,700,000 | ||||||||
Mortgages | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 32,000,000 | ||||||||
Mortgages | Scenario, Forecast | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 6,250,000 | ||||||||
Mortgages | Maximum | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | 25,000,000 | ||||||||
Mortgages | Cash | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | 25,000,000 | ||||||||
Mortgages | Restricted Cash | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 7,000,000 | ||||||||
Mortgages | Restricted Cash | Subsequent Event | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 6,250,000 | ||||||||
Mortgages | York Property Mortgage | |||||||||
Debt [Line Items] | |||||||||
Debt term | 7 years | 7 years | |||||||
Principal amount | $ 325,000,000 | ||||||||
Unsecured debt retired | $ 271,100,000 | ||||||||
Amortization period | 25 years | ||||||||
Maximum Loan-To-Value ratio under agreement (as a percent) | 65.00% | ||||||||
Minimum debt yield under agreement (as a percent) | 8.50% | ||||||||
Restricted cash and cash equivalents | $ 5,300,000 | $ 7,400,000 | $ 3,100,000 | ||||||
Minimum net worth required for compliance | $ 325,000,000 | $ 425,000,000 | |||||||
Mortgages | York Property Mortgage | Standard & Poor's, B Rating | |||||||||
Debt [Line Items] | |||||||||
Required debt service | 12 months | ||||||||
Mortgages | York Property Mortgage | Standard & Poor's, B Plus Rating | |||||||||
Debt [Line Items] | |||||||||
Required debt service | 6 months | ||||||||
Mortgages | York Property Mortgage | LIBOR | |||||||||
Debt [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 2.25% |
Debt - Senior Unsecured Debt Na
Debt - Senior Unsecured Debt Narrative (Details) - USD ($) | Jan. 11, 2018 | Dec. 12, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 27, 2012 |
Debt [Line Items] | |||||||
Extinguishment of debt | $ 0 | $ 0 | $ 10,855,000 | $ 0 | |||
2022 Senior Notes | Senior Notes | |||||||
Debt [Line Items] | |||||||
Principal amount | $ 300,000,000 | $ 300,000,000 | |||||
Debt instrument stated interest percentage | 5.25% | ||||||
Amount redeemed | 312,300,000 | ||||||
Accrued interest | 4,400,000 | ||||||
Payment for debt extinguishment | 7,900,000 | ||||||
Write off of debt issuance cost | 3,000,000 | ||||||
Extinguishment of debt | $ 10,900,000 | ||||||
2025 Senior Notes | Senior Notes | |||||||
Debt [Line Items] | |||||||
Principal amount | $ 400,000,000 | 400,000,000 | 400,000,000 | ||||
Debt instrument stated interest percentage | 4.875% | ||||||
Net proceeds from issuance of long term debt | $ 395,500,000 | ||||||
Amount deposited to trustee | $ 312,300,000 | ||||||
Fair value | $ 382,500,000 | $ 382,500,000 | |||||
2025 Senior Notes | Senior Notes | Prior to December 15, 2020 | |||||||
Debt [Line Items] | |||||||
Percentage of principal amount redeemed | 100.00% | ||||||
2025 Senior Notes | Senior Notes | After December 15, 2020 | |||||||
Debt [Line Items] | |||||||
Percentage of principal amount redeemed | 40.00% | ||||||
Redemption percentage | 104.875% | ||||||
2025 Senior Notes | Senior Notes | Change of Control | |||||||
Debt [Line Items] | |||||||
Percentage of principal amount redeemed | 101.00% |
Debt - Schedule of Aggregate Fu
Debt - Schedule of Aggregate Future Principal and Interest Payments (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
July 2018 to June 2019 | $ 109,344 |
July 2019 to June 2020 | 47,174 |
July 2020 to June 2021 | 46,774 |
July 2021 to June 2022 | 46,371 |
July 2022 to June 2023 | $ 230,678 |
Derivative Financial Instrume69
Derivative Financial Instruments - Schedule of Fair Value Information Related to Derivative Financial Instruments (Details) - Designated as Hedging Instruments - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Derivatives, Fair Value [Line Items] | |||
Assets | $ 4,718 | $ 339 | $ 308 |
Liabilities | 232 | 5,923 | 6,983 |
Cash Flow Hedges | |||
Derivatives, Fair Value [Line Items] | |||
Assets | 274 | 339 | 308 |
Liabilities | 232 | 2,167 | 4,807 |
Cash Flow Hedges | Interest rate swap | Other Current Assets | |||
Derivatives, Fair Value [Line Items] | |||
Assets | 274 | 339 | 308 |
Cash Flow Hedges | Interest rate collar | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | 25 | 666 | 1,550 |
Cash Flow Hedges | Interest rate collar | Other Long-Term Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | 207 | 1,501 | 3,257 |
Net Investment Hedges | Foreign exchange contracts | Other Current Assets | |||
Derivatives, Fair Value [Line Items] | |||
Assets | 4,444 | ||
Net Investment Hedges | Foreign exchange contracts | Other Current Liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Liabilities | $ 0 | $ 3,756 | $ 2,176 |
Derivative Financial Instrume70
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Jul. 01, 2017 | Nov. 21, 2016 | Jul. 01, 2015 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 31, 2021 | Dec. 31, 2017 |
Derivative [Line Items] | |||||||||||
Realized net gain (loss) | $ 5,921 | $ (29,110) | |||||||||
Initial period under interest rate protection agreements | 2 years | ||||||||||
Reduction to notional amount of derivative | $ 57,000 | ||||||||||
Annual prepayments | $ 3,978 | 3,810 | |||||||||
SFS Credit Facility borrowings | $ 63,000 | ||||||||||
Mortgages | |||||||||||
Derivative [Line Items] | |||||||||||
Annual prepayments | $ 32,000 | ||||||||||
Mortgages | Maximum | |||||||||||
Derivative [Line Items] | |||||||||||
Annual prepayments | $ 25,000 | ||||||||||
Mortgages | Scenario, Forecast | |||||||||||
Derivative [Line Items] | |||||||||||
Annual prepayments | $ 6,250 | ||||||||||
Mortgages | York Property Mortgage | |||||||||||
Derivative [Line Items] | |||||||||||
Term of mortgage loan | 7 years | 7 years | |||||||||
Interest rate swap | |||||||||||
Derivative [Line Items] | |||||||||||
Term of derivative contract | 2 years | ||||||||||
Interest rate swap | Mortgages | York Property Mortgage | |||||||||||
Derivative [Line Items] | |||||||||||
Term of derivative contract | 2 years | ||||||||||
Fixed annual rate | 0.877% | ||||||||||
Annual interest rate taking into account the interest rate protection agreements | 3.127% | 3.127% | |||||||||
Interest rate swap | Credit Facility borrowings | |||||||||||
Derivative [Line Items] | |||||||||||
Notional value of derivative | $ 63,000 | $ 63,000 | |||||||||
Interest rate collar | |||||||||||
Derivative [Line Items] | |||||||||||
Notional value of derivative | $ 271,100 | $ 271,100 | |||||||||
Interest rate collar | Mortgages | York Property Mortgage | |||||||||||
Derivative [Line Items] | |||||||||||
Term of derivative contract | 5 years | ||||||||||
Annual interest rate taking into account the interest rate protection agreements | 4.172% | 4.172% | |||||||||
Interest rate collar | Mortgages | York Property Mortgage | Minimum | |||||||||||
Derivative [Line Items] | |||||||||||
Fixed annual rate | 1.917% | ||||||||||
Annual interest rate taking into account the interest rate protection agreements | 4.167% | 4.167% | |||||||||
Interest rate collar | Mortgages | York Property Mortgage | Maximum | |||||||||||
Derivative [Line Items] | |||||||||||
Fixed annual rate | 3.75% | ||||||||||
Annual interest rate taking into account the interest rate protection agreements | 6.00% | 6.00% | |||||||||
Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Notional value of derivative | $ 251,900 | $ 251,900 | |||||||||
Liabilities recorded within Accounts Payable and Accrued Liabilities | $ 1,400 | 3,700 | $ 1,400 | 3,700 | 1,400 | $ 800 | |||||
Designated as Hedging Instruments | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | 0 | (622) | $ 0 | (622) | |||||||
Not Designated as Hedging Instrument | Forward exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Term of derivative contract | 6 months | ||||||||||
Net investment hedges | Designated as Hedging Instruments | Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Aggregate notional value | $ 97,900 | 213,800 | |||||||||
Realized net gain (loss) | (5,900) | 29,100 | |||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | 0 | 0 | 0 | 0 | |||||||
Notional value of derivative | 56,300 | 56,300 | |||||||||
Cash flow hedges | Designated as Hedging Instruments | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | $ 0 | (622) | $ 0 | $ (622) | |||||||
Cash flow hedges | Non-operating income | Designated as Hedging Instruments | Interest rate collar | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | $ 600 |
Derivative Financial Instrume71
Derivative Financial Instruments - Summary of the Effect of the Derivative Financial Instruments (Details) - Designated as Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income - Effective Portion | $ 3,572 | $ (1,988) | $ 3,022 | $ (1,859) |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (86) | (50) | 24 | 35 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 622 | 0 | 622 |
Cash Flow Hedges | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income - Effective Portion | 222 | (534) | 1,282 | 219 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (86) | (50) | 24 | 35 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 622 | 0 | 622 |
Cash Flow Hedges | Interest rate swap | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income - Effective Portion | 15 | (7) | 95 | 134 |
Cash Flow Hedges | Interest rate swap | Interest Expense | ||||
Derivative Instruments | ||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (93) | (50) | (145) | 35 |
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 - Effective Portion | 207 | (527) | 1,187 | 85 |
Cash Flow Hedges | Interest rate collar | Interest Expense | ||||
Derivative Instruments | ||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 7 | 0 | 169 | 0 |
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 0 | 0 | 0 |
Cash Flow Hedges | Interest rate collar | Non-operating 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 | 0 | 622 | 0 | 622 |
Net Investment Hedges | Foreign exchange contracts | ||||
Derivative Instruments | ||||
Gain (Loss) Recognized in Other Comprehensive Income - Effective Portion | 3,350 | (1,454) | 1,740 | (2,078) |
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 | $ 0 | $ 0 | $ 0 | $ 0 |
Sale of Pink Diamond (Details)
Sale of Pink Diamond (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Apr. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2016 | |
Product Information [Line Items] | ||||||||
Undivided legal and beneficial ownership interest sold (as a percent) | 50.00% | |||||||
Cash received for undivided legal and beneficial interest | $ 34,200 | |||||||
Total purchase price | $ 40,106 | $ 19,937 | $ 56,342 | $ 91,314 | ||||
Carrying value of the Pink Diamond | 32,639 | 131,193 | 32,639 | 131,193 | $ 74,483 | |||
Cost of Inventory Sales | $ 42,414 | 22,255 | $ 58,409 | 93,662 | ||||
Pink Diamond | ||||||||
Product Information [Line Items] | ||||||||
Total purchase price | $ 71,200 | |||||||
Carrying value of the Pink Diamond | $ 68,400 | $ 68,400 | ||||||
Gain on sale of Pink Diamond | $ 400 | |||||||
Cost of Inventory Sales | $ 70,800 |
Supplemental Condensed Consol73
Supplemental Condensed Consolidated Balance Sheet Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Prepaid expenses | $ 25,586 | $ 25,418 | $ 27,293 |
Derivative financial instruments (see Note 9) | 274 | 339 | 308 |
Insurance recoveries | 2,335 | 0 | 0 |
Other | 15,067 | 6,253 | 17,854 |
Total Prepaid Expenses and Other Current Assets | $ 43,262 | $ 32,010 | $ 45,455 |
Supplemental Condensed Consol74
Supplemental Condensed Consolidated Cash Flow Information - Schedule of Restricted Cash Classified Within Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 432,357 | $ 544,432 | $ 516,402 | |
Total restricted cash | 46,421 | 379,494 | 58,590 | |
Cash, cash equivalents, and restricted cash | 478,778 | 923,926 | 574,992 | $ 556,201 |
Escrow deposit | 15,300 | |||
Current Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 28,979 | 361,578 | 41,258 | |
Other long-term assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 17,442 | 17,916 | 17,332 | |
Consignor funds held in legally segregated accounts | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 23,528 | 46,029 | 33,164 | |
Funds deposited with the trustee for the redemption of the 2022 Senior Notes | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 0 | 312,250 | 0 | |
Cash Management Account related to the York Property Mortgage (see Note 8) | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 5,264 | 3,107 | 7,434 | |
Other | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | $ 187 | $ 192 | $ 660 |
Supplemental Condensed Consol75
Supplemental Condensed Consolidated Balance Sheet Information - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Defined benefit pension plan asset | $ 107,647 | $ 108,826 | $ 86,317 |
Equity method investments | 46,789 | 46,905 | 47,299 |
Trust assets related to deferred compensation liability | 30,017 | 26,240 | 25,128 |
Restricted cash | 17,442 | 17,916 | 17,332 |
Insurance recoveries | 12,782 | 12,242 | 14,527 |
Other | 15,136 | 15,479 | 2,392 |
Total Other Long-Term Assets | $ 229,813 | $ 227,608 | $ 192,995 |
Supplemental Condensed Consol76
Supplemental Condensed Consolidated Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
(Increase) decrease in: | ||
Prepaid expenses and other current assets | $ (8,233) | $ 2,342 |
Other long-term assets | (3,611) | (1,306) |
Income tax receivables and deferred income tax assets | (9,782) | (20,896) |
(Decrease) increase in: | ||
Accounts payable and accrued liabilities and other liabilities | (23,870) | (20,575) |
Accrued income taxes and deferred income tax liabilities | 4,126 | (2,872) |
Total changes in other operating assets and liabilities | $ (41,370) | $ (43,307) |
Supplemental Condensed Consol77
Supplemental Condensed Consolidated Balance Sheet Information - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Deferred compensation liability | $ 29,605 | $ 25,614 | $ 24,477 |
Acquisition earn-out consideration | 8,750 | 17,500 | 17,500 |
Interest rate collar liability (see Note 9) | 207 | 1,501 | 3,257 |
Other | 7,609 | 6,809 | 6,623 |
Total Other Long-Term Liabilities | $ 46,171 | $ 51,424 | $ 51,857 |
Shareholders' Equity and Divi78
Shareholders' Equity and Dividends - Narrative (Details) - USD ($) | Feb. 28, 2018 | Mar. 17, 2014 | Jan. 29, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 03, 2018 |
Dividends Payable [Line Items] | ||||||
Increase to share repurchase authorization | $ 100,000,000 | |||||
Aggregate share repurchase authorization | $ 195,700,000 | |||||
Accrued dividend equivalents paid upon vesting | $ 0 | $ 2,000,000 | ||||
Subsequent Event | ||||||
Dividends Payable [Line Items] | ||||||
Remaining authorized repurchase amount | $ 133,200,000 | |||||
Special dividend | ||||||
Dividends Payable [Line Items] | ||||||
Special dividend declared | $ 300,000,000 | |||||
Special dividend declared (in dollars per share) | $ 4.34 | |||||
Dividends accrued | $ 10,000,000 |
Shareholders' Equity and Divi79
Shareholders' Equity and Dividends - Schedule of Information Regarding Common Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Equity [Abstract] | ||
Shares repurchased (in shares) | 1,193 | 740 |
Aggregate purchase price | $ 62,497 | $ 33,940 |
Average price per share (in dollars per share) | $ 52.40 | $ 45.86 |
Accumulated Other Comprehensi80
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | $ 616,940 | |||
Reclassifications from accumulated other comprehensive gain (loss), net of tax | $ (5) | $ 787 | 187 | $ 1,080 |
Total other comprehensive (loss) income | (10,639) | 4,754 | (3,797) | 7,572 |
Balance at end of period | 606,744 | 543,143 | 606,744 | 543,143 |
AOCI Attributable to Parent | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at end of period | (66,263) | (82,786) | (66,263) | (82,786) |
Currency Translation Adjustments | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (67,280) | (86,853) | (74,505) | (89,478) |
Other comprehensive income (loss) before reclassifications, net of tax | (14,238) | 6,526 | (7,013) | 9,151 |
Other comprehensive income (loss) before reclassifications, tax | 0 | 835 | 400 | 1,421 |
Total other comprehensive (loss) income | (14,238) | 6,526 | (7,013) | 9,151 |
Balance at end of period | (81,518) | (80,327) | (81,518) | (80,327) |
Cash Flow & Net Investment Hedges | Cash Flow Hedges | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | 141 | (2,826) | (1,029) | (3,664) |
Other comprehensive income (loss) before reclassifications, net of tax | 222 | (534) | 1,282 | 219 |
Other comprehensive income (loss) before reclassifications, tax | 73 | (331) | 423 | 135 |
Reclassifications from accumulated other comprehensive gain (loss), net of tax | (86) | 572 | 24 | 657 |
Reclassifications from accumulated other comprehensive gain (loss), tax | (28) | 354 | 8 | 407 |
Total other comprehensive (loss) income | 136 | 38 | 1,306 | 876 |
Balance at end of period | 277 | (2,788) | 277 | (2,788) |
Cash Flow & Net Investment Hedges | Net Investment Hedges | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | 11,949 | 15,994 | 13,559 | 16,618 |
Other comprehensive income (loss) before reclassifications, net of tax | 3,350 | (1,454) | 1,740 | (2,078) |
Other comprehensive income (loss) before reclassifications, tax | 1,904 | (885) | 569 | 1,270 |
Total other comprehensive (loss) income | 3,350 | (1,454) | 1,740 | (2,078) |
Balance at end of period | 15,299 | 14,540 | 15,299 | 14,540 |
Defined Benefit Pension Plan | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Balance at beginning of period | (434) | (13,855) | (491) | (13,834) |
Other comprehensive income (loss) before reclassifications, net of tax | 32 | (571) | 7 | (800) |
Reclassifications from accumulated other comprehensive gain (loss), net of tax | 81 | 215 | 163 | 423 |
Reclassifications from accumulated other comprehensive gain (loss), tax | 15 | 42 | 32 | 84 |
Total other comprehensive (loss) income | 113 | (356) | 170 | (377) |
Balance at end of period | (321) | (14,211) | (321) | (14,211) |
Currency translation adjustments | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Other comprehensive income (loss) before reclassifications, net of tax | 32 | (571) | 7 | (800) |
Prior service cost amortization, net of tax | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Reclassifications from accumulated other comprehensive gain (loss), net of tax | (21) | (20) | (43) | (39) |
Reclassifications from accumulated other comprehensive gain (loss), tax | (4) | (3) | (8) | (7) |
Actuarial loss amortization, net of tax | ||||
Increase (Decrease) in Stockholders' Equity | ||||
Reclassifications from accumulated other comprehensive gain (loss), net of tax | 102 | 235 | 206 | 462 |
Reclassifications from accumulated other comprehensive gain (loss), tax | $ 19 | $ 45 | $ 40 | $ 91 |
Accumulated Other Comprehensi81
Accumulated Other Comprehensive Loss - Summary of Reclassification Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustments, net of tax | $ (5) | $ 787 | $ 187 | $ 1,080 |
Defined Benefit Pension Plan | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | 96 | 257 | 195 | 507 |
Tax effect | (15) | (42) | (32) | (84) |
Reclassification adjustments, net of tax | 81 | 215 | 163 | 423 |
Prior service cost amortization | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | (26) | (23) | (52) | (46) |
Tax effect | 4 | 3 | 8 | 7 |
Reclassification adjustments, net of tax | (21) | (20) | (43) | (39) |
Actuarial loss amortization | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | 122 | 280 | 247 | 553 |
Tax effect | (19) | (45) | (40) | (91) |
Reclassification adjustments, net of tax | 102 | 235 | 206 | 462 |
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification adjustment, before tax | (114) | 926 | 32 | 1,064 |
Tax effect | 28 | (354) | (8) | (407) |
Reclassification adjustments, net of tax | $ (86) | $ 572 | $ 24 | $ 657 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate remaining commitment for salaries and other cash compensation, excluding any participation in incentive compensation programs | $ 14.1 |
Guarantee Of Collection | $ 26.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Provisional income tax expense | $ 2.3 | $ 1.2 |
Liability for the one-time mandatory transition tax | 40.4 | |
Expense to reduce the value of net deferred tax assets | 2.6 | $ 19.8 |
Provisional income tax payable | $ 20.2 |
Uncertain Tax Positions (Detail
Uncertain Tax Positions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefits, excluding interest and penalties | $ 12.3 | $ 12.3 | $ 13.2 | $ 20.4 |
Net decrease in unrecognized tax benefits | 0.9 | |||
Unrecognized tax benefits that would favorably affect effective income tax rate | 4.5 | 4.5 | $ 4.1 | $ 9.6 |
Reasonably possible decrease in balance of unrecognized tax benefits within 12 months | 2.6 | $ 2.6 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0.1 |
Auction Guarantees (Details)
Auction Guarantees (Details) - USD ($) | Aug. 03, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Guarantor Obligations [Line Items] | ||||
Outstanding auction guarantees | $ 31,200,000 | |||
Irrevocable bids | 31,200,000 | |||
Estimated fair value of obligation to perform under outstanding auction guarantees | 900,000 | $ 900,000 | $ 400,000 | |
Auction guarantee advances outstanding | $ 0 | $ 0 | $ 0 | |
Subsequent Event | ||||
Guarantor Obligations [Line Items] | ||||
Outstanding auction guarantees | $ 194,000,000 | |||
Irrevocable bids | 81,200,000 | |||
Guarantor Obligations, Minimum Exposure, Undiscounted | 112,800,000 | |||
Auction guarantee advances outstanding | $ 1,000,000 |
Share-Based Payments - Schedule
Share-Based Payments - Schedule of Compensation Expense for Share-Based Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Pre-tax | $ 6,312 | $ 5,946 | $ 14,689 | $ 12,015 |
After-tax | $ 5,087 | $ 3,940 | $ 11,726 | $ 7,997 |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | May 03, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Excess tax benefit related to share-based payments | $ 1.2 | $ 2.6 | |
Unrecognized compensation expense related to the unvested portion of share-based payments | $ 37.3 | ||
Weighted average period of amortization | 2 years 3 months | ||
Shares granted (in shares) | 686,000 | ||
Company's Incentive Compensation Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date fair value | $ 32.3 | ||
Employee Stock Option and SARS | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares from the available pool (in shares) | 1 | ||
RSUs and PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares from the available pool (in shares) | 2.14 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Restricted Stock Units (RSUs) | Incremental Vesting | Company's Incentive Compensation Programs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Grant date fair value | $ 19.1 | ||
Shares granted (in shares) | 402,899 | ||
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Performance Shares | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Performance Shares | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Performance Shares | Cliff Vesting | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant date fair value | $ 13.2 | ||
Shares granted (in shares) | 283,019 | ||
Performance Shares | Cliff Vesting | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total maximum vesting opportunity of initial award (as a percent) | 100.00% | ||
Performance Shares | Cliff Vesting | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 566,038 | ||
Total maximum vesting opportunity of initial award (as a percent) | 200.00% | ||
Restricted Shares, RSU's And PSU's | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future awards (in shares) | 6,200,000 | ||
Aggregate fair value of RSU's and PSU's that vested | $ 26.8 | $ 35.9 |
Share-Based Payments - Schedu88
Share-Based Payments - Schedule of Changes to the Number of Outstanding RSU's, PSU's, and Restricted Shares (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Restricted Shares, RSU's and PSU's | |
Outstanding, beginning balance (in shares) | shares | 1,922 |
Granted (in shares) | shares | 686 |
Vested (in shares) | shares | (526) |
Canceled (in shares) | shares | (157) |
Outstanding, ending balance (in shares) | shares | 1,925 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 36.59 |
Granted (in dollars per share) | $ / shares | 47.06 |
Vested (in dollars per share) | $ / shares | 38.95 |
Canceled (in dollars per share) | $ / shares | 39.83 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 39.41 |
Share-Based Payments - Stock Op
Share-Based Payments - Stock Options Narrative (Details) - $ / shares | 3 Months Ended | 6 Months Ended |
Dec. 31, 2017 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options expiration period | 10 years | |
Stock options exercised (in shares) | 50,000 | |
Exercise price (in dollars per share) | $ 22.11 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Options outstanding and exercisable (in shares) | 0 | |
Options exercisable (in shares) | 0 |
Share-Based Payments - Director
Share-Based Payments - Directors Stock Plan Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Credits related to the voluntary separation incentive programs | $ 6,312 | $ 5,946 | $ 14,689 | $ 12,015 | |
Number of deferred stock units outstanding (in shares) | 1,925,000 | 1,925,000 | 1,922,000 | ||
Director's Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Credits related to the voluntary separation incentive programs | $ 300 | $ 300 | $ 600 | $ 500 | |
Number of deferred stock units outstanding (in shares) | 171,165 | 171,165 | |||
Shares available for future awards (in shares) | 104,467 | 104,467 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted (Loss) Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net income attributable to Sotheby's | $ 57,282 | $ 76,891 | $ 50,760 | $ 65,566 |
Less: Net income attributable to participating securities | 844 | 1,176 | 763 | 1,019 |
Net income attributable to Sotheby’s common shareholders | $ 56,438 | $ 75,715 | $ 49,997 | $ 64,547 |
Denominator: | ||||
Weighted average basic shares outstanding (shares) | 51,780 | 52,716 | 52,122 | 52,866 |
Basic earnings per share - Sotheby’s common shareholders (USD per share) | $ 1.09 | $ 1.44 | $ 0.96 | $ 1.22 |
Diluted: | ||||
Net income attributable to Sotheby’s | $ 57,282 | $ 76,891 | $ 50,760 | $ 65,566 |
Less: Net income attributable to participating securities | 844 | 1,176 | 763 | 1,019 |
Net income attributable to Sotheby’s common shareholders | $ 56,438 | $ 75,715 | $ 49,997 | $ 64,547 |
Performance share units | 259 | 151 | 197 | 293 |
Deferred stock units | 171 | 159 | 172 | 157 |
Stock options | 0 | 28 | 0 | 26 |
Weighted average dilutive potential common shares outstanding | 430 | 338 | 369 | 476 |
Weighted average diluted shares outstanding (shares) | 52,210 | 53,054 | 52,491 | 53,342 |
Diluted earnings per share - Sotheby's common shareholders (USD per share) | $ 1.08 | $ 1.43 | $ 0.95 | $ 1.21 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Potential common shares excluded from computation of diluted earnings per share | 1 | 1 | 1 | 1 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2,146 | $ 0 | $ 2,146 | $ 0 |
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 2,100 | $ 2,100 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |||||
Agency commissions and fees | $ 3.2 | $ 1 | $ 3.4 | $ 4.6 | |
Inventory sales | 5.3 | ||||
Related party receivable balance | 3.6 | 0 | 3.6 | 0 | $ 0 |
Amounts owed to related party | $ 0.4 | $ 0 | $ 0.4 | $ 0 | $ 0.4 |