Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 26, 2019 | Jun. 30, 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-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 46,351,475 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,416,447,198 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Finance | $ 43,887 | $ 50,937 | $ 52,716 |
Total revenues | 1,035,740 | 1,057,380 | 857,942 |
Expenses: | |||
Marketing | 23,897 | 25,377 | 19,695 |
Salaries and related | 342,687 | 318,555 | 315,640 |
General and administrative | 180,360 | 172,950 | 161,356 |
Depreciation and amortization | 27,048 | 24,053 | 21,817 |
Total expenses | 854,395 | 891,705 | 743,307 |
Operating income | 181,345 | 165,675 | 114,635 |
Interest income | 1,467 | 1,184 | 1,294 |
Interest expense | (39,984) | (32,218) | (30,310) |
Extinguishment of debt | (10,855) | 0 | 0 |
Write-off of credit facility fees | (3,982) | 0 | 0 |
Non-operating income | 4,688 | 7,045 | 11,115 |
Income before taxes | 132,679 | 141,686 | 96,734 |
Income tax expense | 27,652 | 25,415 | 25,957 |
Equity in earnings of investees | 3,591 | 2,508 | 3,262 |
Net income | 108,618 | 118,779 | 74,039 |
Less: Net loss attributable to noncontrolling interest | (16) | (17) | (73) |
Net income attributable to Sotheby's | $ 108,634 | $ 118,796 | $ 74,112 |
Basic earnings per share - Sotheby's common shareholders (usd per share) | $ 2.10 | $ 2.22 | $ 1.28 |
Diluted earnings per share - Sotheby's common shareholders (usd per share) | $ 2.09 | $ 2.20 | $ 1.27 |
2014 Restructuring plan | |||
Expenses: | |||
Restructuring charges, net | $ 10,753 | $ 0 | $ 0 |
Voluntary separation incentive programs | |||
Expenses: | |||
Restructuring charges, net | 0 | (162) | (610) |
Total Agency commissions and fees | |||
Revenues: | |||
Revenue | 891,774 | 809,571 | 724,398 |
Expenses: | |||
Cost of revenue | 184,491 | 150,133 | 125,889 |
Inventory sales | |||
Revenues: | |||
Revenue | 80,808 | 178,982 | 62,863 |
Expenses: | |||
Cost of revenue | 81,103 | 181,487 | 81,782 |
Other | |||
Revenues: | |||
Revenue | 19,271 | 17,890 | 17,965 |
Cost of finance revenues | |||
Expenses: | |||
Cost of revenue | $ 4,056 | $ 19,312 | $ 17,738 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 108,618 | $ 118,779 | $ 74,039 |
Other comprehensive (loss) income: | |||
Currency translation adjustments | (9,510) | 13,889 | (34,899) |
Defined benefit pension plan | (2,235) | 14,427 | (6,515) |
Total other comprehensive income (loss) | (9,578) | 27,892 | (24,154) |
Comprehensive income (loss) | 99,040 | 146,671 | 49,885 |
Less: Comprehensive (loss) income attributable to noncontrolling interest | (16) | (17) | (73) |
Comprehensive income attributable to Sotheby's | 99,056 | 146,688 | 49,958 |
Cash Flow Hedges | |||
Other comprehensive (loss) income: | |||
Hedges | 399 | 2,635 | 642 |
Net Investment Hedges | |||
Other comprehensive (loss) income: | |||
Hedges | $ 1,768 | $ (3,059) | $ 16,618 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 178,579 | $ 544,432 |
Restricted cash (see Notes 11 and 15) | 4,836 | 361,578 |
Accounts receivable, net | 978,140 | 795,239 |
Notes receivable, net | 103,834 | 87,746 |
Inventory | 43,635 | 74,483 |
Income tax receivables | 3,353 | 6,601 |
Prepaid expenses and other current assets (see Note 14) | 38,631 | 32,010 |
Total current assets | 1,351,008 | 1,902,089 |
Notes receivable, net | 602,389 | 507,538 |
Fixed assets, net | 386,736 | 352,035 |
Goodwill | 55,573 | 50,547 |
Intangible assets, net | 12,993 | 11,492 |
Income tax receivables | 16,694 | 324 |
Deferred income taxes | 37,035 | 35,674 |
Other long-term assets (see Note 14) | 226,660 | 227,608 |
Total assets | 2,689,088 | 3,087,307 |
Current liabilities: | ||
Client payables | 997,168 | 996,197 |
Accounts payable and accrued liabilities | 101,366 | 90,298 |
Accrued salaries and related costs | 92,219 | 94,310 |
Current portion of long-term debt, net | 13,604 | 308,932 |
Accrued income taxes | 31,169 | 8,127 |
Other current liabilities (see Note 14) | 13,263 | 18,762 |
Total current liabilities | 1,248,789 | 1,516,626 |
Credit facility borrowings | 280,000 | 196,500 |
Long-term debt, net | 638,786 | 653,003 |
Accrued income taxes | 19,933 | 37,651 |
Deferred income taxes | 14,569 | 15,163 |
Other long-term liabilities (see Note 14) | 45,517 | 51,424 |
Total liabilities | 2,247,594 | 2,470,367 |
Commitments and contingencies (see Note 20) | ||
Shareholders’ equity: | ||
Common Stock, $0.01 par value, Authorized shares - 200,000,000, Issued shares—71,188,120 and 70,830,184, Outstanding shares—46,346,863 and 52,461,996 | 711 | 709 |
Additional paid-in capital | 463,623 | 453,364 |
Treasury stock shares, at cost: 24,841,257 and 18,368,188 | (839,284) | (554,551) |
Retained earnings | 888,333 | 779,699 |
Accumulated other comprehensive loss | (72,044) | (62,466) |
Total shareholders’ equity | 441,339 | 616,755 |
Noncontrolling interest | 155 | 185 |
Total equity | 441,494 | 616,940 |
Total liabilities and shareholders' equity | $ 2,689,088 | $ 3,087,307 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 71,188,120 | 70,830,184 |
Common stock, shares outstanding | 46,346,863 | 52,461,996 |
Treasury stock, shares | 24,841,257 | 18,368,188 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Activities: | |||
Net income attributable to Sotheby's | $ 108,634 | $ 118,796 | $ 74,112 |
Adjustments to reconcile net income attributable to Sotheby's to net cash (used) provided by operating activities: | |||
Extinguishment of debt | 10,855 | 0 | 0 |
Write-off of credit facility fees | 3,982 | 0 | 0 |
Depreciation and amortization | 27,048 | 24,053 | 21,817 |
Deferred income tax benefit | (2,361) | (27,985) | (24,156) |
Share-based payments | 29,703 | 23,479 | 15,216 |
Net pension benefit | (3,155) | (4,660) | (6,895) |
Inventory writedowns and bad debt provisions | 10,305 | 14,902 | 23,441 |
Amortization of debt issuance costs | 1,736 | 1,690 | 1,619 |
Equity in earnings of investees | (3,591) | (2,508) | (3,262) |
Other | 1,246 | 1,077 | 794 |
Changes in assets and liabilities: | |||
Accounts receivable | (278,225) | (297,690) | 437,398 |
Client payables | 17,337 | 451,186 | (136,097) |
Related party client payables (see Note 27) | 0 | 0 | (285,418) |
Inventory (see Note 13) | 19,335 | 73,709 | 29,746 |
Changes in other operating assets and liabilities (see Note 15) | (20,661) | (7,589) | 7,873 |
Net cash (used) provided by operating activities | (77,812) | 368,460 | 156,188 |
Investing Activities: | |||
Funding of notes receivable | (389,064) | (198,481) | (321,127) |
Collections of notes receivable | 363,494 | 253,268 | 305,770 |
Capital expenditures | (56,824) | (20,694) | (21,363) |
Acquisitions, net of cash acquired (see Notes 8 and 9) | (6,094) | (75) | (54,343) |
Funding of investments | (257) | (6,542) | (2,200) |
Distributions from investees | 3,204 | 4,825 | 1,925 |
Proceeds from the sale of equity investment | 0 | 2,125 | 325 |
Proceeds from company-owned life insurance | 0 | 2,100 | 2,182 |
Settlement of net investment hedges (see Note 12) | (1,747) | 29,110 | (3,308) |
Net cash (used) provided by investing activities | (87,288) | 65,636 | (92,139) |
Financing Activities: | |||
Proceeds from credit facility borrowings | 743,000 | 181,500 | 164,500 |
Repayments of credit facility borrowings | (659,500) | (550,000) | (141,000) |
Repayments of York Property Mortgage | (14,258) | (39,667) | (7,302) |
Proceeds from the issuance of 2025 Senior Notes (see Note 11) | 0 | 400,000 | 0 |
Settlement of 2022 Senior Notes, including call premium (see Note 11) | (307,875) | 0 | 0 |
Debt issuance and other borrowing costs | (4,482) | (5,729) | (320) |
Repurchases of common stock | (284,733) | (44,495) | (359,885) |
Purchase of forward contract indexed to Sotheby's common stock | (10,500) | 0 | 0 |
Dividends paid | 0 | (2,375) | (1,743) |
Funding of employee tax obligations upon the vesting of share-based payments | (10,222) | (16,857) | (5,890) |
Net cash used by financing activities | (548,570) | (77,623) | (351,640) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (10,022) | 11,252 | (35,472) |
(Decrease) increase in cash, cash equivalents and restricted cash | (723,692) | 367,725 | (323,063) |
Cash, cash equivalents, and restricted cash at beginning of period | 923,926 | 556,201 | 879,264 |
Cash, cash equivalents, and restricted cash at end of period | $ 200,234 | $ 923,926 | $ 556,201 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at beginning of period at Dec. 31, 2015 | $ 806,427 | $ 700 | $ 435,696 | $ (150,000) | $ 586,235 | $ (66,204) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Sotheby's | 74,112 | 74,112 | ||||
Other comprehensive income (loss) | (24,154) | (24,154) | ||||
Common stock shares withheld to satisfy employee tax obligations | (5,890) | (5,890) | ||||
Restricted stock units vested, net | 0 | 3 | (3) | |||
Amortization of share-based payment expense | 15,216 | 15,216 | ||||
Tax deficiency from share-based payments | (1,342) | (1,342) | ||||
Shares and deferred stock units issued to directors | 934 | 934 | ||||
Repurchases of common stock | (359,885) | (359,885) | ||||
Balance at end of period at Dec. 31, 2016 | 505,418 | 703 | 444,611 | (509,885) | 660,347 | (90,358) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Sotheby's | 118,796 | 118,796 | ||||
Other comprehensive income (loss) | 27,892 | 27,892 | ||||
Stock options exercised | 1,107 | 1 | 1,106 | |||
Common stock shares withheld to satisfy employee tax obligations | (16,857) | (16,857) | ||||
Restricted stock units vested, net | 0 | 5 | (5) | |||
Amortization of share-based payment expense | 23,479 | 23,479 | ||||
Shares and deferred stock units issued to directors | 999 | 999 | ||||
Repurchases of common stock | (44,495) | (44,495) | ||||
Other adjustments related to share-based payments | 416 | 31 | (171) | 556 | ||
Balance at end of period at Dec. 31, 2017 | 616,755 | 709 | 453,364 | (554,551) | 779,699 | (62,466) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income attributable to Sotheby's | 108,634 | 108,634 | ||||
Other comprehensive income (loss) | (9,578) | (9,578) | ||||
Common stock shares withheld to satisfy employee tax obligations | (10,222) | (10,222) | ||||
Restricted stock units vested, net | 0 | 2 | (2) | |||
Amortization of share-based payment expense | 29,703 | 29,703 | ||||
Shares and deferred stock units issued to directors | 1,280 | 1,280 | ||||
Repurchases of common stock | (284,733) | (284,733) | ||||
Forward contract indexed to Sotheby's common stock | (10,500) | (10,500) | ||||
Balance at end of period at Dec. 31, 2018 | $ 441,339 | $ 711 | $ 463,623 | $ (839,284) | $ 888,333 | $ (72,044) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Company Overview —Since 1744, Sotheby’s has been uniting collectors with world-class works of art, which in these financial statements is meant to include authenticated fine art, decorative art, jewelry, wine, and collectibles and may also be referred to as "art," "artwork," or "property." Today, Sotheby's offers property from more than 70 collecting categories to clients from 130 countries and presents auctions in ten different salesrooms, including New York, London, Hong Kong and Paris, and Sotheby’s BidNow program allows clients to view all auctions live online and place bids from anywhere in the world. 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 Consolidated Financial Statements included herein have been prepared 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"). 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, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Principles of Consolidation —The 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 Attributable to Noncontrolling Interest" in our Consolidated Income Statements and the non-controlling 20% ownership interest is reported as "Noncontrolling Interest" within the Equity section of our 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 Consolidated Income Statements within Equity in Earnings of Investees. Our interest in the net assets of these investees is recorded on our Consolidated Balance Sheets within Other Long-Term Assets . (See Note 6 for information related to our equity method investments. ) Foreign Currency Translation —Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenues, expenses, gains, and losses recorded in foreign currencies are translated using the monthly average exchange rates prevailing during the period in which they are recognized. Translation adjustments resulting from this process are recorded to Other Comprehensive (Loss) Income and reported on our Consolidated Balance Sheets within Accumulated Other Comprehensive Loss until the subsidiary is sold or liquidated, at which point the adjustments are recognized in Net Income. Valuation of Inventory and Loan Collateral —The art market is not a highly liquid trading market. As a result, the valuation of art is inherently subjective and the realizable value of art often fluctuates over time. In estimating the realizable value of art held in inventory and art pledged as collateral for loans, we consider the following complex array of factors: (i) whether the property is expected to be offered at auction or sold privately, and the timing of any such sale; (ii) the supply and demand for the property, taking into account current art market conditions, as well as changing trends as to which collecting categories and artists are most sought after; (iii) recent sale prices achieved for comparable items within a particular collecting category and/or by a particular artist; (iv) the state of the global economy and financial markets; and (v) our intent and ability to hold the property in order to maximize its realizable value. Due to the inherent subjectivity involved in estimating the realizable value of art held in inventory and art pledged as collateral for loans, our estimates of realizable value may prove, with the benefit of hindsight, to be different than the amount ultimately realized upon sale. Inventory —Inventory consists of artworks that we own and includes the following general categories:(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). (See Note 21 for information related to auction guarantees.) Inventory is valued on a specific identification basis at the lower of cost or our estimate of realizable value (i.e., the expected sale price upon disposition). If there is evidence that the estimated realizable value of a specific item held in Inventory is less than its carrying value, a writedown is recorded to reflect our revised estimate of realizable va lue. For the years ended December 31, 2018 , 2017 , and 2016 , inventory writedowns totaled $9.5 million , $13.6 million , and $22.3 million , respectively, and are recorded within Cost of Inventory Sales in our Consolidated Income Statements. Although all of the items held in Inventory are available for immediate sale, the timing of eventual sale is difficult to predict due to the high value and unique nature of each item, as well as the cyclical nature of the global art market. We expect that the items held in Inventory will be sold in the ordinary course of our business during the normal operating cycle for such items. Fixed Assets —Fixed Assets are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful life of the asset. Buildings are depreciated over a useful life of up to 50 years . Building improvements are depreciated over a useful life of up to 20 years . Furniture and fixtures are depreciated over a useful life of up to seven years. Leasehold improvements are amortized using the straight-line method over the lesser of the term of the related lease or the estimated useful life of the improvement. Computer software purchased or developed for internal use consists of the cost of purchased software, as well as direct external and internal software development costs. These costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically between seven to ten years for enterprise systems and three years for other types of software. (See Note 7 for information related to Fixed Assets.) Goodwill —Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is tested annually for impairment at the reporting unit level as of October 31 and between annual tests if indicators of potential impairment exist. These indicators could include a decline in our stock price and market capitalization, a significant change in the outlook for the reporting unit's business, lower than expected operating results, increased competition, legal factors, or the sale or disposition of a significant portion of a reporting unit. For reporting units with goodwill, an impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value. The fair value of the reporting units in our Agency segment is determined in reference to a blend of the income and market approaches, and the fair value of our art advisory reporting unit is determined using a discounted cash flow methodology. (See Note 9 for information related to Goodwill.) The significant assumptions used in the income approach and discounted cash flow approach include (i) forecasted growth rates and (ii) forecasted profitability, both of which are estimated based on consideration of our historical performance and projections of our future performance, and (iii) discount rates that are used to calculate the value of future projected cash flows, which rates are derived based on our estimated weighted average cost of capital. The significant assumptions used in the market approach include selected multiples applied to certain operating metrics. Considerable judgment is necessary to evaluate the impact of operating changes and business initiatives in order to estimate future growth rates and profitability in order to estimate future cash flows and multiples. This is particularly true in a cyclical business, like that of Sotheby's. Future business results could significantly impact the evaluation of our goodwill which could have a material impact on the determination of whether a potential impairment exists and the size of any such impairment. Intangible Assets —Intangible assets are amortized over their estimated useful lives unless the useful life of a particular intangible asset is deemed to be indefinite. If indicators of potential impairment exist, intangible assets with defined useful lives are tested for impairment based on our estimates of undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. (See Note 9 for information related to Intangible Assets.) Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such situations, long-lived assets are considered impaired when estimated future cash flows (undiscounted and without interest charges) resulting from the use of the asset and its eventual disposition are less than the asset's carrying amount. In such situations, the asset is written down to the present value of the estimated future cash flows. Factors that are considered when evaluating long-lived assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a significant change in the extent or manner in which the long-lived asset is being used. Deferred Tax Assets & Liabilities — We follow the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized, based on enacted tax rates, for the future tax consequences of (i) temporary differences between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements and (ii) operating loss and tax credit carry-forwards for tax purposes. A valuation allowance is recorded to reduce our deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for the valuation allowance, management considers, among other things, projections of future taxable income and ongoing prudent and feasible tax planning strategies. If we determine that sufficient negative evidence exists (for example, if we experience cumulative three-year losses in a certain jurisdiction), then we will consider recording a valuation allowance against a portion or all of the deferred tax assets in that jurisdiction. If, after recording a valuation allowance, our projections of future taxable income and other positive evidence considered in evaluating the need for a valuation allowance prove, with the benefit of hindsight, to be inaccurate, it could prove to be more difficult to support the realization of our deferred tax assets. As a result, an additional valuation allowance could be required, which would have an adverse impact on our effective income tax rate and results. Conversely, if, after recording a valuation allowance, we determine that sufficient positive evidence exists in the jurisdiction in which the valuation allowance was recorded (for example, if we are no longer in a three-year cumulative loss position in the jurisdiction, and we expect to have future taxable income in that jurisdiction based upon our forecasts and the expected timing of deferred tax asset reversals), we may reverse a portion or all of the valuation allowance in that jurisdiction. In such situations, the adjustment made to the deferred tax asset would have a favorable impact on our effective income tax rate and on our results in the period such determination was made. (See Note 18 for information related to income taxes, including the recorded balances of our valuation allowance related to deferred tax assets. ) Revenue Recognition (Agency Commissions and Fees) —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. The revenue recognition policy for each of the principal components of Agency Commissions and Fees is described below. (See Note 4 for a table that summarizes our revenues by segment and type for the years ended December 31, 2018, 2017, and 2016.) (1) Auction Commissions —In our role as auctioneer, we accept works of art on consignment and match sellers 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. (2) Auction Guarantees —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 Consolidated Balance Sheets at the lower of its cost (i.e., the amount paid under the auction guarantee) or our estimate of the property’s net realizable value (i.e., the expected sale price upon its eventual disposition). The market for fine art, decorative art, and jewelry is not a highly liquid trading market. As a result, the valuation of property acquired as a result of failed auction guarantees is inherently subjective and its realizable value often fluctuates over time. Accordingly, the proceeds ultimately realized on the sale of previously guaranteed property may equal, exceed, or be less than the estimated net realizable value recorded as Inventory on our Consolidated Balance Sheets. 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 aggregate 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. The amount of any auction guarantee overage or shortfall is reported on a net basis within Agency Commissions and Fees. (3) 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. (4) 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. (5) 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 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. (6) 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. Revenue Recognition (Inventory Sales) —From time-to-time, the Agency segment earns revenue from the sale of items held in Inventory. Such 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. Revenue Recognition (Finance Revenues) —Finance revenues consist principally of interest income earned on Notes Receivable. Such interest income is recognized when earned, based on the amount of the outstanding loan, the applicable interest rate on the loan, and the length of time the loan is outstanding during the period. (See Note 5 for information related to Notes Receivable.) Revenue Recognition (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. Revenue Recognition (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 re |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted in 2018 Revenue Recognition —In May 2014, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") which amended previous 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 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of the retrospective adoption of ASC 606 on our Consolidated Income Statements for the years ended December 31, 2017 and 2016. 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2016-15 on our Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016. 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2016-18 on our Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016. (See Note 15 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2017-07 on our Consolidated Income Statements for the for the years ended December 31, 2017 and 2016. (See Note 10 for information related to our defined benefit pension plan in the U.K.) 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 (the "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. We adopted ASU 2018-02 in the fourth quarter of 2018 and elected not to reclassify the stranded income tax effects in AOCI related to the Act to retained earnings in the statement of stockholders’ equity. Instead, any stranded income tax effects recorded in AOCI shall be reclassified into earnings in the period in which the underlying item is settled. Defined Benefit Plans —On August 28, 2018, the FASB issued ASU 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. In particular, this standard requires companies to provide the reasons for significant gains and losses in pension benefit obligations ("PBO's") and to explain any other significant changes in PBO's and plan assets not otherwise apparent. We adopted ASU 2018-14 in the fourth quarter of 2018 and provided the required disclosures in this report. (See Note 10.) Summary of Adjustments to Prior Period Presentation The following tables summarize the impact of the retrospective adoption of ASC 606 and ASU 2017-07 on our Consolidated Income Statements for the years ended December 31, 2017 and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 741,580 $ 67,991 $ — $ 809,571 Total revenues $ 989,389 $ 67,991 $ — $ 1,057,380 Expenses: Agency direct costs $ 82,142 $ 67,991 $ — $ 150,133 Salaries and related $ 313,895 $ — $ 4,660 $ 318,555 Total expenses $ 819,054 $ 67,991 $ 4,660 $ 891,705 Operating income $ 170,335 $ — $ (4,660 ) $ 165,675 Non-operating income $ 2,385 $ — $ 4,660 $ 7,045 Net income attributable to Sotheby's $ 118,796 $ — $ — $ 118,796 Year Ended December 31, 2016 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 671,833 $ 52,565 $ — $ 724,398 Total revenues $ 805,377 $ 52,565 $ — $ 857,942 Expenses: Agency direct costs $ 73,324 $ 52,565 $ — $ 125,889 Salaries and related $ 307,659 $ — $ 7,981 $ 315,640 Total expenses $ 682,761 $ 52,565 $ 7,981 $ 743,307 Operating income $ 122,616 $ — $ (7,981 ) $ 114,635 Non-operating income $ 3,134 $ — $ 7,981 $ 11,115 Net income attributable to Sotheby's $ 74,112 $ — $ — $ 74,112 The following tables summarize the impact of the retrospective adoption of ASU 2016-15 and ASU 2016-18 on our Consolidated Statement of Cash Flows for the years ended December 31, 2017, and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Restricted cash related to interest on 2022 Senior Notes $ (4,375 ) $ — $ 4,375 $ — Changes in other operating assets and liabilities $ (5,489 ) $ (2,100 ) $ — $ (7,589 ) Net cash provided by operating activities $ 366,185 $ (2,100 ) $ 4,375 $ 368,460 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,100 $ — $ 2,100 Increase in restricted cash $ (3,276 ) $ — $ 3,276 $ — Net cash provided by investing activities $ 60,260 $ 2,100 $ 3,276 $ 65,636 Financing Activities: Restricted cash related to York Property Mortgage $ 1,527 $ — $ (1,527 ) $ — Restricted cash related to 2022 Senior Notes, principal and premium $ (307,875 ) $ — $ 307,875 $ — Net cash used by financing activities $ (383,971 ) $ — $ 306,348 $ (77,623 ) Effect of exchange rate changes $ 5,927 $ — $ 5,325 $ 11,252 Increase in cash, cash equivalents, and restricted cash (a) $ 48,401 $ — $ 319,324 $ 367,725 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) $ 544,432 $ — $ 379,494 $ 923,926 Year Ended December 31, 2016 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Changes in other operating assets and liabilities $ 10,055 $ (2,182 ) $ — $ 7,873 Net cash provided by operating activities $ 158,370 $ (2,182 ) $ — $ 156,188 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,182 $ — $ 2,182 Increase in restricted cash $ (26,097 ) $ — $ 26,097 $ — Net cash used by investing activities $ (120,418 ) $ 2,182 $ 26,097 $ (92,139 ) Financing Activities: Restricted cash related to York Property Mortgage $ (4,635 ) $ — $ 4,635 $ — Net cash used by financing activities $ (356,275 ) $ — $ 4,635 $ (351,640 ) Effect of exchange rate changes $ (34,343 ) $ — $ (1,129 ) $ (35,472 ) Decrease in cash, cash equivalents, and restricted cash (a) $ (352,666 ) $ — $ 29,603 $ (323,063 ) Cash, cash equivalents, and restricted cash at beginning of period (a) $ 848,697 $ — 30,567 $ 879,264 Cash, cash equivalents, and restricted cash at end of period (a) $ 496,031 $ — $ 60,170 $ 556,201 (a) Restricted cash is included only in the adjusted balances, reflecting the retrospective adoption of ASU 2016-18. 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. On July 30, 2018, the FASB issued ASU 2018-11, which makes targeted improvements to ASU 2016-02 (together, the "New Lease Standard"). We will adopt the New Lease Standard on January 1, 2019, using the modified retrospective method and will not restate comparative periods presented in the year of adoption. We will elect the package of practical expedients available under the transition provisions of the New Lease Standard, including (i) not reassessing whether expired or existing contracts contain leases, (ii) not reassessing previous lease classification, and (iii) not revaluing initial direct costs for existing leases. In addition, we will elect the practical expedient which allows the aggregation of non-lease components with the related lease components when evaluating accounting treatment. Upon the adoption of the New Lease Standard, we expect to record a right-of-use asset and a corresponding operating lease liability of approximately $ 70 million to $ 80 million. In addition, as of January 1, 2019, we have implemented internal controls over financial reporting relevant to the New Lease Standard. We do not expect the New Lease Standard to have a material impact on our results of operations, cash flows, or existing debt covenants. (See Note 22 for additional information regarding our existing portfolio of leases.) 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. Consolidation —In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for VIE's , which, among other things, addresses fees paid to decision makers and related party service providers. ASU 2018-17 is effective for us beginning on January 1, 2020. We are currently assessing the potential impact of adopting ASU 2018-17 on our financial statements. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 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"). 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 operating segments which include the auction, private sale, and other related activities that are conducted within 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 other certain equity method investments (see Note 6). 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. The following table presents our segment information for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 Agency SFS All Other Reconciling items Total Revenues $ 956,647 $ 50,856 $ 35,206 $ (6,969 ) (a) $ 1,035,740 Interest income $ 1,467 $ — $ — $ — $ 1,467 Interest expense $ 33,402 $ — $ — $ 6,582 (b) $ 39,984 Depreciation and amortization $ 26,102 $ 120 $ 826 $ — $ 27,048 Segment income before taxes (b) $ 111,055 $ 26,036 $ 7,762 $ (12,174 ) (c) $ 132,679 Year ended December 31, 2017 Revenues (d) $ 975,548 $ 60,105 $ 30,895 $ (9,168 ) (a) $ 1,057,380 Interest income $ 1,184 $ — $ — $ — $ 1,184 Interest expense $ 29,478 $ — $ — $ 2,740 (b) $ 32,218 Depreciation and amortization $ 23,015 $ 244 $ 794 $ — $ 24,053 Segment income before taxes (b) $ 103,943 $ 33,103 $ 10,696 (c) $ (6,056 ) (c) $ 141,686 Year ended December 31, 2016 Revenues (d) $ 779,227 $ 61,234 $ 25,999 $ (8,518 ) (a) $ 857,942 Interest income $ 1,294 $ — $ — $ — $ 1,294 Interest expense $ 27,597 $ — $ — $ 2,713 (b) $ 30,310 Depreciation and amortization $ 21,081 $ 119 $ 617 $ — $ 21,817 Segment income (loss) before taxes (b) (e) $ 67,284 $ 38,335 $ (482 ) $ (8,403 ) (c) $ 96,734 (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) Our previous credit agreements provided for dedicated asset-based revolving credit facilities for the Agency segment and SFS. The SFS Credit Facility was used to fund a significant portion of client loans. Accordingly, any borrowing costs associated with the SFS Credit Facility were recorded within Cost of Finance Revenues in our Consolidated Income Statements. In September 2017, we modified our cash management strategy in order to reduce borrowing costs by applying excess cash balances against revolver credit facility borrowings. On June 26, 2018, we refinanced our previous credit agreements. The new credit agreement that was entered into in connection with this refinancing combined the Agency Credit Facility and the SFS Credit Facility into one asset-based revolving credit facility. Subsequent to the refinancing and resulting elimination of the SFS Credit Facility, the SFS loan portfolio is no longer directly funded with revolving credit facility borrowings. Accordingly, beginning in the third quarter of 2018, all borrowing costs associated with our revolving credit facility are recorded as interest expense in our Consolidated Income Statements. As a result of this refinancing and the concurrent elimination of the separate segment-based revolving credit facilities, beginning in the third quarter of 2018, when measuring segment profitability: (i) revolving credit facility costs are no longer allocated to our segments and (ii) SFS receives a corporate finance charge that is calculated assuming that 85% of their loan portfolio is funded with debt. Segment results for all prior periods have been recast to reflect these changes in the measurement of segment profitability. (c) The reconciling items related to segment income before taxes are detailed in the table below. (d) Agency segment revenue for the years ended December 31, 2017 and 2016 has been recast to reflect the retrospective adoption of ASC 606. (See Notes 2 and 3.) (e) Agency segment income before taxes for the year ended December 31, 2016 includes $23.9 million of compensation expense related to an earn-out arrangement with the former principals of AAP. All Other segment income (loss) before taxes for the year ended December 31, 2016 includes $11.1 million of compensation expense related to this earn-out arrangement. (See Note 8 .) The table below presents a reconciliation of segment income (loss) before taxes to consolidated income before taxes for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 2017 2016 Agency $ 111,055 $ 103,943 $ 67,284 SFS 26,036 33,103 38,335 All Other 7,762 10,696 (482 ) Segment income before taxes 144,853 147,742 105,137 Unallocated amounts and reconciling items: Revolving credit facility costs (a) (14,623 ) (22,052 ) (20,451 ) SFS corporate finance charge 16,895 18,504 15,310 Extinguishment of debt (10,855 ) — — Equity in earnings of investees (b) (3,591 ) (2,508 ) (3,262 ) Income before taxes $ 132,679 $ 141,686 $ 96,734 (a) For the year ended ended December 31, 2018, revolving credit facility costs in the table above includes approximately $4 million of unamortized fees related to our previous credit agreements that were written off in the second quarter of 2018. (See Note 11.) (b) 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 Consolidated Income Statements. (See Note 6 .) The table below presents geographic information about our revenues for the years ended December 31, 2018 , 2017 , and 2016 for all countries which exceeded 5% of total revenues (in thousands of dollars): Year ended December 31, 2018 2017 2016 United States $ 484,275 $ 423,169 $ 399,500 United Kingdom 263,116 248,802 204,262 Hong Kong and China 176,636 227,753 149,792 Switzerland 43,351 97,246 51,327 France 58,313 56,114 46,631 Other countries 17,018 13,464 14,948 Reconciling item: Intercompany revenue (6,969 ) (9,168 ) (8,518 ) Total $ 1,035,740 $ 1,057,380 $ 857,942 The table below presents segment assets, as well as a reconciliation of segment assets to consolidated assets as of December 31, 2018 , 2017 , and 2016 (in thousands of dollars): December 31, 2018 2017 2016 Agency $ 1,886,986 $ 2,395,429 $ 1,759,670 SFS 705,779 608,713 687,649 All Other 39,241 40,566 42,246 Total segment assets 2,632,006 3,044,708 2,489,565 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 57,082 42,599 14,861 Consolidated assets $ 2,689,088 $ 3,087,307 $ 2,504,426 Substantially all of our capital expenditures for the years ended December 31, 2018 , 2017 , and 2016 were attributable to the Agency segment. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 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 2 for information regarding the retrospective adoption of ASC 606.) The following tables summarize our revenues by segment and type for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 767,881 $ — $ — $ 767,881 Auction related fees, net (a) 29,088 — — 29,088 Private sale commissions 82,263 — 1,000 83,263 Other Agency commissions and fees 11,181 — 361 11,542 Total Agency commissions and fees 890,413 — 1,361 891,774 Inventory sales 66,234 — 14,574 80,808 Advisory revenues — — 6,147 6,147 License fee and other revenues — — 13,124 13,124 Total revenue from contracts with customers 956,647 — 35,206 991,853 Finance revenue: Interest and related fees — 43,887 — 43,887 Total revenues $ 956,647 $ 43,887 $ 35,206 $ 1,035,740 Year ended December 31, 2017 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 694,501 $ — $ — $ 694,501 Auction related fees, net (a) 32,459 — — 32,459 Private sale commissions 67,343 — 815 68,158 Other Agency commissions and fees 13,617 — 836 14,453 Total Agency commissions and fees 807,920 — 1,651 809,571 Inventory sales 167,628 — 11,354 178,982 Advisory revenues — — 5,767 5,767 License fee and other revenues — — 12,123 12,123 Total revenue from contracts with customers 975,548 — 30,895 1,006,443 Finance revenue: Interest and related fees — 50,937 — 50,937 Total revenues $ 975,548 $ 50,937 $ 30,895 $ 1,057,380 Year ended December 31, 2016 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 641,220 $ — $ — $ 641,220 Auction related fees, net (a) 16,594 — — 16,594 Private sale commissions 54,984 — — 54,984 Other Agency commissions and fees 11,600 — — 11,600 Total Agency commissions and fees 724,398 — — 724,398 Inventory sales 54,829 — 8,034 62,863 Advisory revenues — — 6,596 6,596 License fee and other revenues — — 11,369 11,369 Total revenue from contracts with customers 779,227 — 25,999 805,226 Finance revenue: Interest and related fees — 52,716 — 52,716 Total revenues $ 779,227 $ 52,716 $ 25,999 $ 857,942 (a) Auction Related Fees, net includes the net overage or shortfall attributable to auction guarantees, consignor expense recoveries, and shipping fees charged to buyers. The table below summarizes the balances recorded on our Consolidated Balance Sheets related to contracts with customers as of and for the years ended December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Accounts Receivable Balance as of beginning of period $ 783,706 $ 424,418 Balance as of end of period $ 967,817 $ 783,706 Increase $ 184,111 $ 359,288 Client Payables Balance as of beginning of period $ 996,197 $ 511,876 Balance as of end of period $ 997,168 $ 996,197 Increase $ 971 $ 484,321 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 Consolidated Balance Sheets, are excluded from this table because they are not considered to be contract balances under ASC 606. The increases in Accounts Receivable and Client Payables during the year ended December 31, 2018 are primarily due to a higher level of Net Auction Sales in the fourth quarter of 2018 as compared to the same period in 2017. The increases versus the prior year are also influenced by the timing of auction sale settlements, which resulted in us holding significant balances of net sales proceeds at the end of 2017 that were disbursed to consignors in early 2018. The increases in Accounts Receivable and Client Payables during the year ended December 31, 2017 are primarily due to a higher level of Net Auction Sales in the fourth quarter of 2017 as compared to the same period in 2016. In certain instances, and subject to management approval under our internal corporate governance policy, we may pay the net sale proceeds to the consignor before payment is collected from the buyer and/or we may allow the buyer to take possession of the property before making payment. In situations when the buyer takes possession of the property before making payment, we are liable to the seller for the net sales proceeds whether or not the buyer makes payment. As of December 31, 2018 and 2017 , Accounts Receivable (net) included $118.7 million and $92.1 million , respectively, related to situations when we paid the consignor all or a portion of the net sales proceeds before payment was collected from the buyer. As of December 31, 2018 and 2017 , Accounts Receivable (net) also included $39.6 million and $53.8 million , respectively, related to situations when we allowed the buyer to take possession of the property before making payment. 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 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 Consolidated Income Statements. As of December 31, 2018 and 2017 , the contract cost balances recorded within Prepaid Expenses and Other Current Assets were $10.8 million and $9.6 million , respectively. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Accounts and Notes Receivable, Net [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 an initial maturity of one year with an option to renew for an additional year, and typically carry a variable market rate of interest. To a much lesser extent, SFS also makes consignor advances secured by artworks that are contractually committed, in the near term, to be offered for sale through our Agency segment. Consignor advances allow sellers to receive funds upon consignment for an auction or private sale that will occur up to one year in the future and normally have short-term maturities. As of December 31, 2018 and 2017 , the net Notes Receivable balance of SFS was $694 million and $590.6 million , respectively. As of December 31, 2018 and 2017 , $99.7 million and $85.1 million , respectively, of the net Notes Receivable balance of SFS was classified within current assets on our Consolidated Balance Sheets, with the remainder classified within non-current assets. The classification of a loan as current or non-current takes into account the contractual maturity date of the loan, as well as the likelihood of renewing the loan on or before its contractual maturity date. As of December 31, 2018 and 2017 , the net Notes Receivable balance of SFS includes $126.2 million and $54.4 million , respectively, of term loans issued by SFS to refinance client auction and private sale purchases. For the years ended December 31, 2018 and 2017 , SFS issued $130 million and $6.5 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 Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such Notes Receivable is classified within Operating Activities in our Consolidated Statements of Cash Flows. For the years ended December 31, 2018 and 2017 , such repayments totaled $58.2 million and $40.8 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 our 50% target due to a decrease in the low auction estimate 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 the 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 December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Secured loans $ 693,977 $ 590,609 Low auction estimate of collateral $ 1,629,270 $ 1,369,235 Aggregate LTV ratio 43 % 43 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Secured loans with an LTV ratio above 50% $ 264,916 $ 168,116 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 476,157 $ 269,063 Aggregate LTV ratio of secured loans with an LTV above 50% 56 % 62 % The table below provides other credit quality information regarding secured loans made by SFS as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Total secured loans $ 693,977 $ 590,609 Loans past due $ 14,405 $ 62,570 Loans more than 90 days past due $ 8,911 $ 56,087 Non-accrual loans $ 3,854 $ — Impaired loans $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — Allowance for credit losses based on historical data 1,075 1,253 Total allowance for credit losses - secured loans $ 1,075 $ 1,253 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 obligation. As of December 31, 2018 , $14.4 million of the net Notes Receivable balance was past due, of which $8.9 million was more than 90 days past due. We are continuing to accrue interest on $10.6 million of past due loans and, as of December 31, 2018, the collateral securing such loans has a low auction estimate of approximately $110.2 million , resulting in a weighted average LTV ratio of approximately 40% . In consideration of expected loan renewals, loan repayments received to date in 2019, 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 will 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, which then had a recorded investment balance of $49.5 million consisting of a principal balance of $47.7 million and $1.8 million in accrued interest, was placed on non-accrual status. Subsequent to January 1, 2018, the balance of this loan was reduced through the collection of collateral sale proceeds and, as of December 31, 2018, our recorded investment in the loan was approximately $5.6 million , consisting of the $3.8 million principal balance and $ 1.8 million in accrued interest. The remaining investment in this loan was collected in January 2019 through the collection of additional collateral sale proceeds. 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. The determination of whether a specific loan is impaired and the amount of any required allowance is based on the facts available to management and is reevaluated and adjusted as additional facts become known. 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 December 31, 2018 and 2017 , there were no impaired SFS loans outstanding. As of December 31, 2018 , unfunded commitments to extend additional credit through SFS were approximately $54 million . Agency Segment — As discussed in Note 1, 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 Consolidated Balance Sheets. 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 Consolidated Statements of Cash Flows. Upon repayment, the cash received in settlement of such Notes Receivable is classified within Operating Activities in our Consolidated Statements of Cash Flows. As of December 31, 2017, Notes Receivable (net) within the Agency segment included a $2.7 million balance that was reclassified from Accounts Receivable (net). This loan was substantially repaid in the fourth quarter of 2018. 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. In the fourth quarter of 2017, we determined that one such loan was 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 December 31, 2018 and 2017 loans of this type totaled $3.1 million and $2.1 million , respectively. These balances include a loan of $2.1 million for which we are no longer accruing interest, but believe that the recorded balance is collectible. In certain limited situations, the Agency segment will also provide advances to consignors that are secured by property scheduled to be offered at auction in the near term. Such Agency segment consignor advances are recorded on our Consolidated Balance Sheets within Notes Receivable (net) and totaled $3.2 million as of December 31, 2018. Allowance for Credit Losses —For the years ended December 31, 2018 and 2017 , 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, 2017 $ 1,270 $ — $ 1,270 Change in loan loss provision based on historical data (17 ) — (17 ) Change in loan loss provision for impaired loans — 1,525 1,525 Balance as of December 31, 2017 1,253 1,525 2,778 Change in loan loss provision based on historical data (178 ) — (178 ) Balance as of December 31, 2018 $ 1,075 $ 1,525 $ 2,600 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Method Investments | Equity Method Investments Acquavella Modern Art— On May 23, 1990, we purchased the common stock of the Pierre Matisse Gallery Corporation ("Matisse") for approximately $153 million . The assets of Matisse consisted of a collection of fine art (the "Matisse Inventory"). Upon consummation of the purchase, we entered into an agreement with Acquavella Contemporary Art, Inc. ("ACA") to form AMA, a partnership through which the Matisse Inventory would be sold. We contributed the Matisse Inventory to AMA in exchange for a 50% interest in the partnership. The original term of the AMA partnership agreement was due to expire in 2000, and it was renewed on an annual basis through 2016. On April 27, 2017, the AMA partnership agreement was amended to extend the term of the partnership to May 1, 2022. Upon dissolution of AMA, if we and ACA elect not to liquidate the property and assets of AMA, any assets remaining after the payment of expenses and any other liabilities of AMA will be distributed to us and AMA as tenants-in-common or in some other reasonable manner. The net assets of AMA consist almost entirely of the Matisse Inventory. As of December 31, 2018 and 2017 , the carrying value of the Matisse Inventory was $30 million and $33.9 million , respectively. As of December 31, 2018 and 2017 , the carrying value of our investment in AMA was $2.7 million and $4.8 million , respectively. For the years ended December 31, 2018 , 2017 , and 2016 , our results include $1.2 million , $1.7 million , and $1.3 million , respectively, of equity earnings related to AMA. From time-to-time, we transact with the principal shareholder of ACA in the normal course of our business. RM Sotheby's— On February 18, 2015, we acquired a 25% ownership interest in RM Auctions, an auction house for investment-quality automobiles, for $30.7 million . Following our investment, RM Auctions is now known as RM Sotheby's. In addition to the initial 25% ownership interest, we have governance participation through a comprehensive partnership agreement. As of December 31, 2018 and 2017 , the carrying value of our investment in RM Sotheby's was $39.1 million and $36.4 million , respectively. For the years ended December 31, 2018 , 2017 , and 2016 , our results include $2.7 million , $1.2 million , and $2 million , respectively, of equity earnings related to RM Sotheby's. Other— In the second quarter of 2017, we formed a partnership through which artworks are being purchased and sold. As of December 31, 2018 and 2017 our investment in this partnership was $5.7 million , representing our 50% ownership interest. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets As of December 31, 2018 and 2017 , Fixed Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Land $ 92,338 $ 92,591 Buildings and building improvements 235,469 235,222 Leasehold improvements 82,350 84,504 Computer hardware and software 94,632 77,179 Furniture, fixtures and equipment 81,628 81,031 Construction in progress 34,233 9,492 Other 3,297 1,767 Sub-total 623,947 581,786 Less: Accumulated depreciation and amortization (237,211 ) (229,751 ) Total Fixed Assets, net $ 386,736 $ 352,035 In September 2017, we initiated an enhancement program to our headquarters building at 1334 York Avenue in New York (the "York Property") to create new state-of-the art galleries, as well as new public and client exhibition spaces. As a result of this enhancement program, certain building improvements and other fixed assets were removed from service before the end of their originally estimated useful lives, resulting in accelerated depreciation expense of $3.4 million and $1.9 million recognized in 2018 and 2017, respectively, recorded on our Consolidated Income Statements within Amortization and Depreciation. For the years ended December 31, 2018 , 2017 , and 2016 , Depreciation and Amortization related to Fixed Assets was $24 million , $22.1 million , and $19.9 million , respectively. |
Acquisition of Art Agency, Part
Acquisition of Art Agency, Partners | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Art Agency, Partners | Acquisition of Art Agency, Partners On January 11, 2016, we acquired Art Agency, Partners, a firm that provides a range of art-related services, in exchange for initial cash consideration of $50 million and future earn-out payments of up to $35 million , as discussed in more detail below. The purchase agreement governing the acquisition of AAP includes non-competition and non-solicitation covenants that continue in effect until January 2021. In connection with this acquisition, each of the former principals of AAP also entered into a five -year employment agreement that extends through January 2021. Each employment agreement also includes non-competition and non-solicitation covenants that continue through January 2021, and are in effect for 12 months following the end of employment. As indicated above, in connection with the acquisition of AAP, we agreed to make future earn-out payments to the former principals of AAP not to exceed $35 million in the aggregate, contingent on the achievement of a level of cumulative financial performance within the Impressionist, Modern and Contemporary Art collecting categories, as well as from AAP's art advisory business. Progress against the cumulative financial target (the "Target") was to be measured at the end of each calendar year during the four -year performance period following the acquisition, after adjusting the Target to reflect the annual growth or contraction of the auction market for Impressionist, Modern and Contemporary Art, when compared to the year ended December 31, 2015. Amounts owed pursuant to the earn-out arrangement are considered to be compensation expense for accounting purposes and are classified within Salaries and Related Costs in our Consolidated Income Statements. For the year ended December 31, 2016, we recognized $35 million of compensation expense associated with the AAP earn-out arrangement, reflecting the full achievement of the Target as a result of our improved market share in the Contemporary Art collecting category, as well as an improvement in auction commission margins, during the initial annual period. The $35 million owed under the earn-out arrangement is being paid in four annual increments of $8.75 million in the first quarter of each year beginning in 2017 and through 2020. The portion of the accrued liability due in the first quarter of 2019 ( $8.75 million) is recorded within Accrued Salaries and Related Costs on our Consolidated Balance Sheets. The remaining liability ( $8.75 million) is recorded within Other Long-Term Liabilities. (See Note 14 .) The table below summarizes the allocation of the total purchase price paid for AAP to the assets acquired and liabilities assumed (in thousands of dollars): Purchase price: Initial cash consideration $ 50,000 Working capital adjustment 1,189 Total purchase price $ 51,189 Allocation of purchase price: Net working capital acquired $ 1,572 Fixed assets and other long-term assets 173 Goodwill 34,490 Intangible assets - customer relationships (see Note 9) 10,800 Intangible assets - non-compete agreements (see Note 9) 3,060 Deferred tax assets 1,094 Total purchase price $ 51,189 Upon completion of the purchase price allocation in the second quarter of 2016, $28.3 million of the resulting goodwill was allocated to the Agency segment and $6.2 million was allocated to the acquired art advisory business, which is reported within All Other for segment reporting purposes. The goodwill is tax deductible over a period of 15 years. We incurred $0.8 million of transaction costs in connection with the acquisition of AAP, which were recognized within General and Administrative Expenses in our Consolidated Income Statements in the fourth quarter of 2015 ( $0.6 million ) and the first quarter of 2016 ( $0.2 million ). It is impracticable to compute the amount of revenues and earnings contributed to the Agency segment as a result of the acquisition because the related activities have been integrated into the segment. Disclosure of pro-forma revenues and earnings attributable to the acquisition is also excluded because it is impracticable to determine since AAP was a closely-held private entity and its historical financial records are not available in U.S. GAAP. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill —For the years ended December 31, 2018 and 2017 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Year ended December 31, 2018 Year ended December 31, 2017 Agency All Other Total Agency All Other Total 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 (233 ) — (233 ) 518 — 518 Balance as of December 31, $ 49,422 $ 6,151 $ 55,573 $ 44,396 $ 6,151 $ 50,547 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 was immaterial and complements and enhances our online sales program, and provides an additional sale format to offer clients. In October 2018, Viyet was rebranded as Sotheby's Home. Intangible Assets —As of December 31, 2018 and 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period December 31, 2018 December 31, 2017 Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 8) 8 years 10,800 10,800 Non-compete agreements - AAP (see Note 8) 5-6 years 3,060 3,060 Artworks database (b) 10 years 1,275 1,200 Technology 4 years 4,461 — Total intangible assets subject to amortization 19,596 15,060 Accumulated amortization (6,927 ) (3,892 ) Total amortizable intangible assets (net) 12,669 11,168 Total intangible assets (net) $ 12,993 $ 11,492 (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 with the associated business in exchange for an initial cash payment made in the third quarter of 2016 and subsequent cash payments made in the third quarters of 2017 and 2018. For the years ended December 31, 2018 , 2017 , and 2016 amortization expense related to intangible assets was approximately $3 million , $2 million , and $1.9 million , respectively. The estimated aggregate amortization expense for the remaining useful lives of intangible assets subject to amortization during the five -year period succeeding the December 31, 2018 balance sheet date are as follows (in thousands of dollars): Period Amount 2019 $ 3,186 2020 $ 3,186 2021 $ 2,937 2022 $ 1,573 2023 $ 1,480 |
Pension Arrangements
Pension Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension Arrangements | Pension Arrangements Retirement Savings Plan —We sponsor a qualified defined contribution plan for our employees in the U.S. (the "Retirement Savings Plan"). Participants in the Retirement Savings Plan who are not at least a Senior Vice President may elect to contribute between 2% and 50% of their eligible compensation to the plan, on a pre-tax or after-tax Roth basis. Participants in the Retirement Savings Plan that are at least a Senior Vice President may elect to contribute between 2% and 25% of their eligible compensation, on a pre-tax or after-tax Roth basis. We may match participant savings with a contribution of up to 3% of eligible employee compensation. We may also contribute an annual discretionary amount to the Retirement Savings Plan, which varies as a percentage of each participant's eligible compensation depending on our profitability. For the years ended December 31, 2018 , 2017 , and 2016 , we accrued discretionary contributions of $1.6 million , $2.1 million , and $1.2 million , respectively, related to the Retirement Savings Plan, which is equal to 2% , 3% , and 2% of eligible compensation paid in those years, respectively. For the years ended December 31, 2018 , 2017 , and 2016 , total pension expense related to matching and discretionary contributions to the Retirement Savings Plan, net of forfeitures, was $3.3 million , $3.7 million , and $2.5 million , respectively. Both participant and Company contributions to the Retirement Savings Plan are subject to limitations under IRS regulations. Deferred Compensation Plan —We sponsor a non-qualified Deferred Compensation Plan (the "DCP"), which is available to certain U.S. officers for whom contributions to the Retirement Savings Plan are limited by IRS regulations. The DCP provides participants with a menu of investment crediting options that track a portfolio of various deemed investment funds. We credit participant accounts on the same basis as matching and discretionary contributions to the Retirement Savings Plan, as discussed above. For the year ended December 31, 2018 , 2017 , and 2016 , we accrued discretionary contributions of $0.5 million , $0.5 million , and $0.3 million , respectively, related to the DCP, which is equal to 2% , 3% , and 2% of eligible compensation paid during those years, respectively. For the years ended December 31, 2018 , 2017 , and 2016 , total pension expense related to our matching and discretionary contributions to the DCP was $0.9 million , $0.9 million , and $0.6 million , respectively. Employee deferrals and our accrued contributions to the DCP are informally funded into a rabbi trust which provides benefit security by sheltering assets in the event of a change-in-control of Sotheby's and certain other situations. DCP liabilities are financed through the trust almost entirely by using company-owned variable life insurance ("COLI"), and, to a lesser extent, investments in money market mutual funds. As of December 31, 2018 and 2017 , the DCP liability, which is recorded on our Consolidated Balance Sheets within Other Long-Term Liabilities (see Note 14), was $28.3 million and $25.6 million , respectively, and the assets held in the rabbi trust consisted of the following (in thousands of dollars): December 31, 2018 2017 Company-owned variable life insurance $ 23,887 $ 25,567 Money market mutual fund investments 4,630 673 Total $ 28,517 $ 26,240 The COLI and money market mutual fund investments are aggregated and recorded on our Consolidated Balance Sheets within Other Long-Term Assets (see Note 14). The COLI is reflected at its cash surrender value. The money market mutual fund investments are classified as trading securities and reflected at their fair value. Changes in the fair value of the DCP liability, which result from gains and losses in deemed participant investments, are recognized in our Consolidated Income Statements within Salaries and Related Costs in the period in which they occur. Gains in deemed participant investments increase the DCP liability, as well as Salaries and Related Costs. Losses in deemed participant investments decrease the DCP liability, as well as Salaries and Related Costs. For the years ended December 31, 2018 , 2017 , and 2016 , net (losses) gains in deemed participant investments totaled ($1.1) million , $3.1 million , and $1.6 million , respectively. Gains and losses resulting from changes in the cash surrender value of the COLI and the fair value of the money market mutual fund investments, as well as COLI-related expenses, are recognized in our Consolidated Income Statements within Non-Operating Income in the period in which they occur. For the years ended December 31, 2018 , 2017 , and 2016 , net (losses) gains related to the COLI and the money market mutual fund investments were ($1.6) million , $2.6 million , and $0.4 million , respectively. U.K. Defined Contribution Plan —Beginning on April 1, 2004, a defined contribution plan was made available to employees in the U.K. (the "U.K. Defined Contribution Plan"). Participants in the U.K. Defined Contribution Plan must contribute 3% of their eligible compensation to the plan with no cap on maximum contributions. We may match participant savings with a contribution of up to 9% of eligible employee compensation. We may also contribute an annual discretionary amount to the U.K. Defined Contribution Plan, which varies as a percentage of each participant's eligible compensation depending on our profitability. For the years ended December 31, 2018 , 2017 , and 2016 , we accrued discretionary contributions of $1.1 million related to the U.K. Defined Contribution Plan, which is equal to 2% , 3% , and 2% of eligible compensation paid during those years, respectively. For the years ended December 31, 2018 , 2017 , and 2016 , pension expense related to the U.K. Defined Contribution Plan was $4 million , $4.5 million , and $4.3 million , respectively. U.K. Defined Benefit Pension Plan —We sponsor a defined benefit pension plan in the U.K. (the "U.K. Pension Plan"). Effective April 1, 2004, participation in the U.K. Pension Plan was closed to new employees. On April 30, 2016, after the completion of a statutory consultation process, the U.K. Pension Plan was closed to accrual of future service costs for active participants, who became participants in the U.K. Defined Contribution Plan. Benefit Obligation, Plan Assets, and Funded Status The table below details the changes in the projected benefit obligation, plan assets, and funded status of the U.K. Pension Plan, as well as the net pension asset recognized on our Consolidated Balance Sheets, within Other Long-Term Assets (see Note 14), as of and for the years ended December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Reconciliation of benefit obligation Projected benefit obligation at beginning of year $ 345,876 $ 327,619 Interest cost 7,597 8,053 Actuarial gain (17,745 ) (781 ) Prior service cost 967 — Benefits paid (9,913 ) (8,508 ) Settlement payments — (11,880 ) Foreign currency exchange rate changes (17,065 ) 31,373 Projected benefit obligation at end of year 309,717 345,876 Reconciliation of plan assets Fair value of plan assets at beginning of year 454,702 406,195 Actual return on plan assets (8,832 ) 28,827 Benefits paid (9,913 ) (8,508 ) Settlement payments — (11,880 ) Foreign currency exchange rate changes (22,701 ) 40,068 Fair value of plan assets at end of year 413,256 454,702 Funded Status Net pension asset $ 103,539 $ 108,826 For the year ended December 31, 2018, the projected benefit obligation decreased $36.2 million ( 10% ) largely due to an increase in the discount rate assumption used to value the obligation (see table below), foreign currency exchange rate changes, and, to a lesser extent, a change in mortality assumptions, partially offset by higher actual and assumed inflation, which together resulted in a pre-tax actuarial gain of $17.7 million . The net decrease in the projected benefit obligation during the current year was also influenced by the estimated pre-tax prior service cost (approximately $1 million ) related to the U.K. High Court ruling on October 26, 2018 which requires that certain guaranteed minimum pension benefits be equalized between men and women. For the year ended December 31, 2017, the projected benefit obligation increased $18.3 million ( 6% ) largely due to foreign currency exchange rate changes, partially offset by settlement payments of ($11.9) million made to plan participants who transferred their accrued benefits from the U.K. Pension Plan to alternative arrangements not associated with Sotheby's. We did not make any contributions to the U.K. Pension Plan in 2018 and 2017, and we do not expect to make any regular contributions in 2019. As of December 31, 2018 and 2017 , the accumulated benefit obligation for the U.K. Pension Plan was $309.7 million and $345.8 million , respectively, and is identical to the projected benefit obligation on those dates because the plan is closed to accrual of future service costs. Components of Net Pension Benefit For the years ended December 31, 2018 , 2017 , and 2016 , the components of the net pension benefit related to the U.K. Pension Plan are as follows (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Service cost $ — $ — $ 1,086 Interest cost 7,597 8,053 9,817 Prior service cost — 60 — Expected return on plan assets (11,131 ) (14,159 ) (17,798 ) Amortization of actuarial loss 481 1,139 — Amortization of prior service cost (102 ) (97 ) — Settlement loss — 344 — Net pension benefit $ (3,155 ) $ (4,660 ) $ (6,895 ) As discussed in Note 2, we retrospectively adopted ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , on January 1, 2018. ASU 2017-07 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). Accordingly, in the table above, the service cost recognized for the year ended December 31, 2016 is presented within Salaries and Related Costs while the remaining components are presented within Non-Operating Income. Amounts Recognized in Other Comprehensive (Loss) Income Net Actuarial (Loss) Gain —The net actuarial (loss) gain related to the U.K. Pension Plan, which is recognized net of tax in Other Comprehensive (Loss) Income, is generally the result of: (i) actual results differing from previous actuarial assumptions (for example, the expected return on plan assets) and (ii) changes in actuarial assumptions between balance sheet dates (for example, the discount rate). For the years ended December 31, 2018 , 2017 , and 2016 , the net (loss) gain related to the U.K. Pension Plan was ($1.8) million , $13.3 million , and ($6.5) million , respectively. Prior Service Cost —For the year ended December 31, 2018, we recognized estimated after-tax prior service cost of $0.8 million in Other Comprehensive (Loss) Income related to a U.K. High Court ruling on October 26, 2018 which requires that certain guaranteed minimum pension benefits be equalized between men and women. Amounts Included in Accumulated Other Comprehensive Loss Net Actuarial Loss —As of December 31, 2018 and 2017 , the net actuarial loss related to the U.K. Pension Plan recorded in Accumulated Other Comprehensive Loss was ($2.4) million and ($1) million , respectively. If the amount recorded in Accumulated Other Comprehensive Loss exceeds 10% of the greater of (i) the market-related value of plan assets or (ii) the benefit obligation, that excess amount is amortized as a component of future net pension cost or benefit over the average expected future life of plan participants, which is approximately 28.4 years . The market-related value of plan assets adjusts the market value of plan assets by recognizing changes in fair value over a period of five years. Prior Service Cost —As of December 31, 2018 , the prior service cost related to the U.K. Pension Plan recorded in Accumulated Other Comprehensive Loss was $0.8 million . Assumptions As of and for the years ended December 31, 2018 , 2017 , and 2016 , the following assumptions were used in determining the benefit obligation and net pension benefit related to the U.K. Pension Plan: Benefit Obligation 2018 2017 Weighted average discount rate 2.9% 2.5% Net Pension Benefit 2018 2017 2016 Weighted average discount rate - service cost N/A N/A 3.8% Weighted average discount rate - interest cost 2.3% 2.4% 3.4% Weighted average rate of compensation increase N/A N/A 4.1% Weighted average expected long-term rate of return on plan assets 2.8% 3.8% 5.2% The discount rate represents the approximate weighted average rate at which the obligations of the U.K. Pension Plan could be effectively settled and is based on a yield curve for a selection of high-quality corporate bonds with maturity dates approximating the length of time remaining until individual benefit payment dates. In 2016, we used a separate discount rate for the service and interest cost components of the net pension benefit. The discount rate used for each component in 2016 contemplates a full yield curve in respect to the expected timing of the cash flows related to these components. In 2018 and 2017, the measurement of the net pension benefit does not include an assumption of a discount rate to measure service cost due to the closure of the U.K. Pension Plan to the accrual of future service costs, as discussed above. Similarly, as of December 31, 2018 and 2017 , the measurement of the benefit obligation does not include an assumption for future annual compensation increases. The expected long-term rate of return is weighted according to the composition of invested assets and is based on expected future appreciation, as well as dividend and interest yields currently available in the equity and bond markets. In particular, the expected rate of return for growth assets represents our estimate of median annualized returns by asset class. The expected rate of return on debt securities is based on interest yields currently available on long-dated U.K. government bonds and highly-rated corporate bonds. No allowance is made in the expected rate of return for potential market out-performance by fund managers. Plan Assets The investment policy for the U.K. Pension Plan is established by its Trustees in consultation with our management. The Trustees' investment objective is to maximize the return on assets while controlling the level of risk so as to ensure that sufficient assets are available to pay participants' benefits as and when they arise. The Trustees have agreed that a portfolio of assets with some growth content is appropriate, but so as to avoid an undue concentration of risk, a diverse spread of assets is held within the portfolio. The diversification is both within and across asset categories. Professional investment managers are provided target allocation percentages for different categories within each asset class; actual allocation percentages are permitted to fall within a reasonable range of these targets. In setting specific asset allocation targets, the Trustees take advice as required from professional investment advisors and require that the majority of the assets be realizable at short notice. As a result of the closure of the U.K. Pension Plan to the accrual of future service costs in April 2016 and a $24.2 million contribution made in December 2016, there has been an improvement in the funded status of the plan in recent years. Accordingly, in February 2017, we began to change our allocation of plan assets to reduce investment risk, resulting in an approximate allocation of 40% to growth assets and 60% to debt securities and cash and cash equivalents. In December 2017, another change in asset allocation was made to further reduce investment risk, resulting in an approximate allocation of 23% to growth assets and 77% to debt securities and cash and cash equivalents. In 2018, we made two further changes to the composition of plan assets to continue to reduce investment risk. First, in July 2018, we sold $133 million of debt securities in order to purchase a buy-in annuity contract from an insurer. The intent of the buy-in annuity contract is to generate returns designed to match the funding of pensioners currently receiving payments from the plan. In particular, the buy-in annuity contract offers the ability to lock-in the cash value of a portion of the pension benefit obligation and significantly reduce future volatility in plan assets. Then, in December 2018, another change in asset allocation was made, resulting in an approximate allocation of 17% to growth assets and 83% to debt and debt-like securities (including the buy-in annuity contract) and cash and cash equivalents. The investment managers for the U.K. Pension Plan have some discretion in making investment decisions, subject to the investment mandate set forth by the Trustees. It is the Trustees' policy not to invest in the common stock of Sotheby's or any of its subsidiaries. The performance of the investment managers is benchmarked against suitable indices. The table below presents the fair value of U.K. Pension Plan assets, by investment category, as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 % of Total 2017 % of Total Growth assets $ 69,617 16.8 % $ 104,735 23.0 % Debt securities : Corporate 37,332 9.0 % 41,804 9.2 % Index-linked 147,891 35.8 % 219,428 48.3 % Total debt securities 185,223 44.8 % 261,232 57.5 % Buy-in annuity contract 131,416 31.8 % — — % Real estate mutual funds 33 — % 3,233 0.6 % Cash and cash equivalents 26,967 6.5 % 85,502 18.8 % Total fair value of plan assets $ 413,256 $ 454,702 The assets of the U.K. Pension Plan, which are measured at fair value, are classified and disclosed according to one of the following categories: • Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Level 1 inputs generally provide the most reliable evidence of fair value. • Level 2—Pricing inputs are 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. • Level 3—Pricing inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The table below provides fair value measurement information for the U.K. Pension Plan assets as of December 31, 2018 (in thousands of dollars): Fair Value Measurements Using: Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Growth assets $ 69,617 $ 69,617 $ — $ — Debt securities: Corporate 37,332 37,332 — — Index-linked 147,891 146,582 1,309 — Total debt securities 185,223 183,914 1,309 — Buy-in annuity contract 131,416 — — 131,416 Real estate mutual funds 33 — 33 — Cash and cash equivalents 26,967 26,967 — — Total fair value of plan assets $ 413,256 $ 280,498 $ 1,342 $ 131,416 As of December 31, 2018 , the following U.K. Pension Plan assets are classified as Level 1 fair value measurements: Growth Assets —Includes investments in a publicly-traded mutual fund, the fair value of which is based on exchange quoted prices in active markets. Debt Securities —Includes investments in publicly-traded bond mutual funds, the fair values of which are based on exchange quoted prices in active markets. Cash and Cash Equivalents —Includes investments in cash and money market instruments that are highly liquid and for which book value approximates fair value. As of December 31, 2018, the following U.K. Pension Plan assets are classified as Level 2 fair value measurements: Debt Securities —Includes investments in pooled funds which do not have directly observable quoted market prices, but for which the underlying value is determined by publicly-traded bonds that have directly observable exchange quoted prices in active markets. Real Estate Mutual Funds —Includes investments in real estate mutual funds, the fair value of which are based on directly and indirectly observable real estate prices, including comparable prices. As of December 31, 2018 , the following U.K. Pension Plan assets are classified as Level 3 fair value measurements: Buy-in Annuity Contract —The value of the buy-in annuity contract as of December 31, 2018 is based on the premium paid in July 2018 to purchase the contract of approximately $133 million , updated for actual benefit payments made in the second half of 2018 (approximately $3.6 million ) and interest and market condition adjustments commensurate with an investment of this type. Estimated Future Benefit Payments Estimated future benefit payments related to the U.K. Pension Plan are as follows (in thousands of dollars): Year Benefit Payments 2019 $ 8,343 2020 $ 9,227 2021 $ 11,393 2022 $ 10,776 2023 $ 11,854 2024 to 2028 $ 65,289 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [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 needs and other general corporate purposes, and borrowings thereunder are available in U.S. Dollars, Pounds Sterling, Euros, Swiss Francs, and 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 Agency Credit Facility and 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 carrying value of certain auction guarantee advances; (iii) the carrying value of certain art inventory; (iv) the carrying value of certain extended payment term receivables arising from auction or private sale transactions; (v) the carrying 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 thereunder. 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). Subject to maintaining a minimum level of available borrowing capacity, the New Credit Agreement permits dividend payments, common stock repurchases, investments, and certain debt prepayments, so long as no event of default exists. 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 December 31, 2018. We incurred aggregate fees of approximately $4.3 million 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 revolving credit facilities as of and for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): As of and for the years ended December 31, 2018 December 31, 2017 December 31, 2016 Maximum borrowing capacity (a) $ 1,100,000 $ 1,100,000 $ 1,335,000 Borrowing base $ 857,773 $ 605,927 $ 734,464 Borrowings outstanding $ 280,000 $ 196,500 $ 565,000 Available borrowing capacity (b) $ 577,773 $ 409,427 $ 169,464 Average borrowings outstanding $ 106,181 $ 479,367 $ 534,433 Legend: (a) On October 2, 2017, we reduced the borrowing capacity of the 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 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 Income Statements as Interest Expense. Borrowing costs under the Previous Credit Agreements related to SFS are reflected in our Consolidated Income Statements within Cost of Finance Revenues as any borrowings thereunder were used to directly fund client loans. Subsequent to the change in our cash management strategy (as discussed in Note 3), the refinancing of the Previous Credit Agreements and the resulting elimination of the SFS Credit Facility on June 26, 2018, the SFS loan portfolio is no longer being directly funded with revolving credit facility borrowings. Accordingly, all borrowing costs associated with the New Credit Agreement are recorded as Interest Expense in our Consolidated Income Statements. Long-Term Debt —As of December 31, 2018 and 2017 , Long-Term Debt consisted of the following (in thousands of dollars): December 31, 2018 2017 York Property Mortgage, net of unamortized debt issuance costs of $3,559 and $4,545 $ 257,284 $ 270,556 2022 Senior Notes, net of unamortized debt issuance costs of $0 and $2,998 — 297,002 2025 Senior Notes, net of unamortized debt issuance costs of $4,894 and $5,623 395,106 394,377 Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010 and $1,010 (13,604 ) (11,930 ) 2022 Senior Notes, net of unamortized debt issuance costs of $0 and $2,998 — (297,002 ) Total Long-Term Debt, net $ 638,786 $ 653,003 See the captioned sections below for information related to the York Property Mortgage and our senior unsecured debt, including the 2022 Senior Notes and the 2025 Senior Notes. York Property Mortgage —The York Property, our headquarters building located at 1334 York Avenue in New York, is subject to a seven -year, $325 million mortgage loan that matures on July 1, 2022 (the "York Property Mortgage"). As of December 31, 2018 , the outstanding principal balance of the York Property Mortgage was $260.8 million . As of December 31, 2018 , the fair value of the York Property Mortgage approximated its book value due to the variable interest rate associated with the mortgage. This 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 (the "First Amendment") 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 future common stock repurchases. On October 18, 2018, the York Property Mortgage was further amended (the "Second Amendment") to modify the definition of net worth whereby the balance recorded within Treasury Stock Shares on our Consolidated Balance Sheets is added back to Total Equity for the purposes of calculating net worth. Although the minimum net worth required by the York Property Mortgage remains at $325 million , the change to the definition of net worth provides continued flexibility regarding potential future common stock repurchases. Our net worth as of December 31, 2018 , as calculated under the Second Amendment, is approximately $1.3 billion . In conjunction with the First Amendment to the York Property Mortgage, on July 3, 2017, we made a prepayment of $32 million to reduce the outstanding principal balance of the mortgage and agreed to make annual principal prepayments beginning in July 2018 and continuing through July 2021. Such annual prepayments are to be funded primarily with cash accumulated in a restricted cash management account, as discussed below, and 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 the restricted cash management account. On July 2, 2018, we made an additional $6.25 million principal payment from the restricted cash management account in accordance with the First Amendment to the York Property Mortgage. (See Note 12 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 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 measured on 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 debt service, insurance, and taxes as security. As of December 31, 2018 and 2017, the Cash Management Account had a balance of $0.7 million and $3.1 million , respectively, which is reflected within Restricted Cash on our Consolidated Balance Sheets. • At all times during the term of the York Property Mortgage, we are required to maintain a minimum net worth as discussed above, 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 December 15, 2025 (the “2025 Senior Notes”). The net proceeds from the sale 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. The $312.3 million redemption price that was deposited with the trustee, consisting of the $300 million principal amount plus $4.4 million of accrued interest and a call premium of $7.9 million , was classified within Restricted Cash on our Consolidated Balance Sheets as of December 31, 2017. 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 $10.9 million recognized in the first quarter of 2018. 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 December 31, 2018 , the $400 million principal amount of the 2025 Senior Notes had a fair value of approximately $366 million based on a broker quoted price derived via a pricing model using observable and unobservable inputs. As such, this fair value measurement is considered to be a Level 3 fair value measurement in the fair value hierarchy as per ASC 820. Future Payments Due Under Outstanding Debt —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 December 31, 2018 are as follows (in thousands of dollars): Year Amount 2019 $ 47,035 2020 $ 47,267 2021 $ 46,845 2022 $ 241,095 2023 $ 299,500 The table above assumes that the annual interest rate for the York Property Mortgage will be within the ceiling and floor rates of the associated interest rate collar for the remainder of the mortgage term based on available forecasts of LIBOR rates for the future periods through maturity (see Note 12 ). 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 through 2021, as discussed above. Interest Paid —In 2018 , 2017 , and 2016 , interest paid totaled $43.6 million , $51.8 million , and $44.5 million , respectively. Interest paid consists of cash payments related to the York Property Mortgage, our long-term debt securities, and revolving credit facility borrowings (including fees). In 2018 , 2017 , and 2016 , interest paid includes debt issuance costs of $4.5 million , $5.7 million , and $0.3 million , respectively, which are amortized to Interest Expense in our Consolidated Income Statements. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 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 December 31, 2018 and 2017 (in thousands of dollars): Assets Liabilities December 31, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate collar N/A — Other Current Liabilities 40 Interest rate collar N/A — Other Long-Term Liabilities 1,185 Total cash flow hedges — — 1,225 Net Investment Hedges: Foreign exchange contracts Prepaid Expenses and Other Current Assets 462 N/A — Total $ 462 $ 1,225 Assets Liabilities December 31, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Prepaid Expenses and 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 In 2018 , we settled derivative financial instruments designated as net investment hedges with an aggregate notional value of $202 million and realized a net loss of ($1.9) million . In 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 Consolidated Balance Sheets within Accumulated Other Comprehensive Loss. The following table summarizes the effect of the derivative financial instruments designated as hedging instruments on our Consolidated Income Statements and Consolidated Statements of Comprehensive Income for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive (Loss) 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 Year Ended December 31, 2018 2017 2016 2018 2017 2016 2018 2017 2016 Cash Flow Hedges: Interest rate swaps $ 95 $ 201 $ (704 ) Interest Expense $ (145 ) $ 16 $ 813 $ — $ — $ — Interest rate swap — — — Non-operating income — — — (160 ) — — Interest rate collar 440 1,219 533 Interest Expense 169 577 — — — — Interest rate collar — — — Non-operating income — — — — 622 — Total cash flow hedges 535 1,420 (171 ) 24 593 813 (160 ) 622 — Net Investment Hedges: Foreign exchange contracts 1,826 (3,059 ) 16,618 Non-operating income — — — (58 ) — — Total $ 2,361 $ (1,639 ) $ 16,447 $ 24 $ 593 $ 813 $ (218 ) $ 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 11), we entered into interest rate protection agreements secured by the York Property, consisting of a two -year interest rate swap (the "Mortgage Swap"), effective as of July 1, 2015, and a five -year interest rate collar (the "Mortgage Collar"), effective as of July 1, 2017. 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 seven -year term. Beginning on the July 1, 2017 effective date of the Mortgage Collar through December 31, 2018, the weighted average interest rate for the York Property Mortgage was 4.33% . In conjunction and concurrent with the First Amendment to the York Property Mortgage in June 2017 (see Note 10), 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 the reclassification of a $0.6 million loss (net of tax) from Accumulated Other Comprehensive Loss into Net Income in the second quarter of 2017. As of December 31, 2018 , the notional value of the Mortgage Collar was $260.8 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"). In the third quarter of 2018, these revolving credit facility borrowings were repaid, and the Revolving Credit Facility Swap was terminated, resulting in the reclassification of a $0.2 million gain (net of tax) from Accumulated Other Comprehensive Loss into Net Income. 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 remains outstanding and is effective, any unrealized gains and losses related to changes in their fair value are recorded to Accumulated Other Comprehensive Loss on our Consolidated Balance Sheets and then reclassified to Interest Expense in our 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 Consolidated Balance Sheets would be immediately reclassified into Net Income. Management performs a quarterly assessment to determine whether the Mortgage Collar, as amended, 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 the York Property Mortgage. As of December 31, 2018, 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 the York Property Mortgage. 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 were 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 was based on a discounted cash flow methodology using the contractual terms of the instrument and observable LIBOR-curve rates that were consistent with the timing of the interest payments related to our revolving credit facility. Derivative Financial Instruments Designated as Net Investment Hedges —We were 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 December 31, 2018 , the aggregate notional value of our outstanding net investment hedge contracts was $55.7 million . In the fourth quarter of 2018, the net investment in the foreign subsidiary underlying one of our net investment hedges decreased below the notional value of the corresponding foreign currency forward exchange contract resulting in the reclassification of a ($0.1) million gain (net of tax) from Accumulated Other Comprehensive Loss into Net Income. 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 were reported in the cumulative translation adjustment accounts within Accumulated Other Comprehensive Loss on our Consolidated Balance Sheets. The foreign currency forward exchange contracts designated as net investment hedges were considered Level 2 fair value measurements within the fair value hierarchy provided by ASC 820. Level 2 fair value measurements had pricing inputs other than quoted prices in active markets, which were 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 were 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 Consolidated Income Statements in Non-Operating Income. As of December 31, 2018 , the notional value of outstanding forward exchange contracts not designated as hedging instruments was $187.6 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 were exposed to credit-related risks in the event of nonperformance by the counterparties to our outstanding forward exchange contracts that were 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 December 31, 2018 , our Consolidated Balance Sheets include an asset of $1.7 million within Prepaid Expenses and Other Current Assets and a liability of $1.5 million within Accounts Payable and Accrued Liabilities, representing the fair values of these contracts on that date. As of December 31, 2017, the aggregate fair value of these contracts represented a liability of $0.8 million , which was recorded on our Consolidated Balance Sheets within Accounts Payable and Accrued Liabilities. |
Sale of Pink Diamond
Sale of Pink Diamond | 12 Months Ended |
Dec. 31, 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 Consolidated Balance Sheets as deferred revenue 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 paid to our partner in the Pink Diamond and other costs related to the sale. |
Supplemental Consolidated Balan
Supplemental Consolidated Balance Sheet Information | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Consolidated Balance Sheet Information | Supplemental Consolidated Balance Sheet Information As of December 31, 2018 and 2017 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Prepaid expenses $ 25,672 $ 25,418 Derivative financial instruments (see Note 12) 462 339 Insurance recoveries 4,353 — Other 8,144 6,253 Total Prepaid and Other Current Assets $ 38,631 $ 32,010 As of December 31, 2018 and 2017 , Other Long-Term Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Defined benefit pension plan asset (see Note 10) $ 103,539 $ 108,826 Equity method investments (see Note 6) 47,507 46,905 Trust assets related to deferred compensation liability (see Note 10) 28,517 26,240 Restricted cash (a) (see Note 15) 16,819 17,916 Insurance recoveries 13,882 12,242 Other 16,396 15,479 Total Other Long-Term Assets $ 226,660 $ 227,608 (a) Principally relates to funds held in escrow pending the payment of sale proceeds to a consignor). As of December 31, 2018 and 2017 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): December 31, 2018 2017 Deferred compensation liability (see Note 10) $ 28,255 $ 25,614 Acquisition earn-out consideration (see Note 8) 8,750 17,500 Interest rate collar liability (see Note 12) 1,185 1,501 Other 7,327 6,809 Total Other Long-Term Liabilities $ 45,517 $ 51,424 |
Supplemental Consolidated Cash
Supplemental Consolidated Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Consolidated Cash Flow Information | Supplemental Consolidated Cash Flow Information Cash, Cash Equivalents, and Restricted Cash —As of December 31, 2018 and 2017, cash, cash equivalents, and restricted cash consisted of the following (in thousands of dollars): December 31, 2018 2017 Cash and cash equivalents 178,579 $ 544,432 Restricted cash (a), recorded within current assets: Consignor funds held in legally segregated accounts 3,938 46,029 Funds deposited with the trustee for the redemption of the 2022 Senior Notes (see Note 11) — 312,250 Cash Management Account related to the York Property Mortgage (see Note 11) 716 3,107 Other 182 192 Restricted cash, recorded within current assets (a) 4,836 361,578 Restricted cash, recorded within other long-term assets (a) (b) 16,819 17,916 Total restricted cash 21,655 379,494 Cash, cash equivalents, and restricted cash $ 200,234 $ 923,926 (a) Restricted cash generally includes legally restricted deposits or amounts and cash balances restricted as a result of contracts entered into with third parties. (b) Principally relates to funds held in escrow pending the payment of sale proceeds to a consignor. Changes in Other Operating Assets and Liabilities — For the years ended December 31, 2018 , 2017 and 2016 , changes in other operating assets and liabilities as reported in the Consolidated Statements of Cash Flows included the following (in thousands of dollars): Year Ended December 31, 2018 2017 2016 (Increase) decrease in: Prepaid expenses and other current assets $ (6,244 ) $ 17,160 $ (14,510 ) Other long-term assets (3,537 ) (12,449 ) (12,188 ) Income tax receivables and deferred income tax assets (15,003 ) (33,532 ) 2,395 Increase (decrease) in: Accrued income taxes and deferred income tax liabilities 7,826 35,421 14,879 Accounts payable and accrued liabilities and other liabilities (3,703 ) (14,189 ) 17,297 Total changes in other operating assets and liabilities $ (20,661 ) $ (7,589 ) $ 7,873 |
Shareholders' Equity and Divide
Shareholders' Equity and Dividends | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity and Dividends [Abstract] | |
Shareholders' Equity and Dividends | Shareholders' Equity and Dividends Common Stock —Our common stock is traded on the New York Stock Exchange (the "NYSE") under the symbol BID. Each share of our common stock has a par value of $0.01 per share and is entitled to one vote. As of December 31, 2018 and 2017 , there were 46,346,863 and 52,461,996 shares of our common stock outstanding, respectively. Preferred Stock —We have the authority to issue 50 million shares of no par value preferred stock. No shares of preferred stock were outstanding as of December 31, 2018 and 2017 . Common Stock Repurchase Program —The following table provides information regarding our common stock repurchase program for the years ended December 31, 2018, 2017, and 2016 (in thousands, except for per share data): Year Ended December 31, 2018 2017 2016 Three-Year Total Shares repurchased 6,473 961 13,144 20,578 Aggregate purchase price $ 284,733 $ 44,495 $ 359,885 $ 689,113 Average price per share $ 43.99 $ 46.32 $ 27.38 $ 33.49 The share repurchases made in 2018 include open market purchases, purchases made pursuant to a Rule 10b5-1 plan, and purchases made pursuant to two separate accelerated share repurchase ("ASR") agreements, as detailed below. On September 11, 2018, we paid $95 million upon entry into an ASR agreement (the "September 2018 ASR Agreement"). Pursuant to the September 2018 ASR Agreement, on September 12, 2018, we received an initial delivery of 1,792,453 shares of our common stock with a value of $85.5 million , or $47.70 per share. In conjunction with our entry into the September 2018 ASR Agreement, we recorded $85.5 million to Treasury Stock to reduce Shareholders’ Equity for the value of the initial shares received and $9.5 million to Additional Paid-In Capital to reduce Shareholders’ Equity for the value of the unsettled portion of the agreement, which represented a forward contract indexed to our common stock. In November 2018, the counterparty to the September 2018 ASR Agreement elected to conclude the agreement, and we received an additional 325,927 shares of our common stock. Upon conclusion of the September 2018 ASR Agreement, the $9.5 million initially recorded to Additional Paid-In Capital was reclassified to Treasury Stock on our Consolidated Statements of Shareholders' Equity. In total, the September 2018 ASR Agreement resulted in the repurchase of 2,118,380 shares of our common stock for an average price of $44.85 per share. On December 13, 2018, we paid $70 million upon entry into an ASR agreement (the "December 2018 ASR Agreement"). Pursuant to the December 2018 ASR Agreement, on December 14, 2018, we received an initial delivery of 1,605,938 shares of our common stock with a value of $59.5 million , or $37.05 per share. In conjunction with our entry into the December 2018 ASR Agreement, we recorded $59.5 million to Treasury Stock to reduce Shareholders’ Equity for the value of the initial shares received and $10.5 million to Additional Paid-In Capital to reduce Shareholders’ Equity for the unsettled portion of the agreement, which represents a forward contract indexed to our common stock. The total number of shares that we will ultimately purchase upon the conclusion of the December 2018 ASR Agreement will generally be based on the average of the daily volume-weighted average prices of our common stock during the term of the agreement, less an agreed discount. Upon final settlement of the December 2018 ASR Agreement, we may be entitled to receive additional shares of our common stock or, under certain circumstances, we may be required to deliver shares or make an additional cash payment to the counterparty, at our option. The December 2018 ASR Agreement is scheduled to expire on March 1, 2019, but may conclude earlier at the counterparty's option, and may be terminated early upon the occurrence of certain events. The amount paid to enter into the December 2018 ASR Agreement effectively utilized the remaining share repurchase authorization from our Board of Directors. The share repurchases made in 2017 and 2016 generally include open market purchases and purchases made pursuant to a Rule 10b5-1 plan. The share repurchases made in 2016 also include purchases made pursuant to an agreement with funds managed by Marcato Capital Management LP ("Marcato") in which we acquired 2,050,000 shares of our common stock from Marcato for an aggregate purchase price of $73.8 million , or $36.00 per share. At the time of this agreement, Marcato owned 8.5% of our outstanding common stock. Special Dividend —On January 29, 2014, our 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 was charged to Retained Earnings. For the years ended December 31, 2017 and 2016, $2 million and $1.4 million , respectively, of such dividends were paid to employees upon the vesting of the share-based payments. No such dividends were paid during the year ended December 31, 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 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 during the period January 1, 2016 to December 31, 2018 (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Currency Translation Adjustments Balance at January 1 $ (74,505 ) $ (89,478 ) $ (52,279 ) Other comprehensive (loss) income before reclassifications, net of tax of ($498), $1,760, and ($13,113) (9,546 ) 14,973 (37,199 ) Other comprehensive (loss) income (9,546 ) 14,973 (37,199 ) Balance at December 31 (84,051 ) (74,505 ) (89,478 ) Cash Flow Hedges Balance at January 1 (1,029 ) (3,664 ) (4,306 ) Other comprehensive income (loss) before reclassifications, net of tax of $177, $888, and ($106) 535 1,420 (171 ) Reclassifications from accumulated other comprehensive loss, net of tax of ($106), $753, and $502 (136 ) 1,215 813 Other comprehensive income 399 2,635 642 Balance at December 31 (630 ) (1,029 ) (3,664 ) Net Investment Hedges Balance at January 1 13,559 16,618 — Other comprehensive income (loss) before reclassifications, net of tax of $635, ($1,885), and $10,354 1,826 (3,059 ) 16,618 Reclassifications from accumulated other comprehensive loss, net of tax ($20), $0, and $0 (58 ) — — Other comprehensive income (loss) 1,768 (3,059 ) 16,618 Balance at December 31 15,327 13,559 16,618 Defined Benefit Pension Plan Balance at January 1 (491 ) (13,834 ) (9,619 ) Currency translation adjustments 36 (1,084 ) 2,300 Net actuarial (loss) gain, net of tax of ($364), $2,719, and ($1,427) (1,775 ) 13,277 (6,515 ) Prior service cost, net of tax of ($157), $0, and $0 (774 ) — — Other comprehensive (loss) income before reclassifications, net of tax (2,513 ) 12,193 (4,215 ) Prior service cost amortization, net of tax of ($17), ($17), and $0 (85 ) (80 ) — Actuarial loss amortization, net of tax of $82, $194, and $0 399 945 — Settlement cost, net of tax of $0, $59, and $0 — 285 — Reclassifications from accumulated other comprehensive loss, net of tax 314 1,150 — Other comprehensive (loss) income (2,199 ) 13,343 (4,215 ) Balance at December 31 (2,690 ) (491 ) (13,834 ) Total other comprehensive (loss) income attributable to Sotheby's (9,578 ) 27,892 (24,154 ) Accumulated other comprehensive loss at December 31 $ (72,044 ) $ (62,466 ) $ (90,358 ) Year Ended December 31, 2018 2017 2016 Cash Flow Hedges Settlements of interest rate swaps $ (242 ) $ 1,968 $ 1,315 Tax effect 106 (753 ) (502 ) Reclassification adjustments, net of tax (136 ) 1,215 813 Net Investment Hedges Dedesignation of net investment hedge (78 ) — — Tax effect 20 — — Reclassification adjustments, net of tax (58 ) — — Defined Benefit Pension Plan Prior service cost amortization (102 ) (97 ) — Settlement loss — 344 — Actuarial loss amortization 481 1,139 — Pre-tax total 379 1,386 — Tax effect (65 ) (236 ) — Reclassification adjustments, net of tax 314 1,150 — Total reclassification adjustments, net of tax $ 120 $ 2,365 $ 813 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the years ended December 31, 2018 , 2017 , and 2016 , the significant components of income tax expense consisted of the following (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Income (loss) before taxes: Domestic $ 5,355 $ 3,636 $ (38,567 ) Foreign 127,324 138,050 135,301 Total $ 132,679 $ 141,686 $ 96,734 Income tax (benefit) expense—current: Domestic $ (17,510 ) $ 24,427 $ 18,443 State and local 2,987 1,492 1,766 Foreign 44,536 27,481 29,904 Sub-total 30,013 53,400 50,113 Income tax (benefit) expense—deferred: Domestic (2,787 ) (34,501 ) (19,114 ) State and local (252 ) 1,285 (1,034 ) Foreign 678 5,231 (4,008 ) Sub-total (2,361 ) (27,985 ) (24,156 ) Total $ 27,652 $ 25,415 $ 25,957 As of December 31, 2018 and 2017 , the components of Deferred Tax Assets and Deferred Tax Liabilities consisted of the following (in thousands of dollars): December 31, 2018 2017 Deferred tax assets: Asset provisions and liabilities $ 8,992 $ 4,832 Inventory writedowns 2,061 3,408 Tax loss and credit carryforwards 4,549 3,908 Difference between book and tax basis of depreciable and amortizable assets 11,438 20,218 Share-based payments and deferred compensation 19,012 15,130 Sub-total 46,052 47,496 Valuation allowance (2,360 ) (3,194 ) Total deferred tax assets 43,692 44,302 Deferred tax liabilities: Difference between book and tax basis of other assets and liabilities 1,720 859 Pension obligations 16,521 16,280 Basis differences in equity method investments 371 1,269 Undistributed earnings of foreign subsidiaries 2,614 2,571 Bond redemption costs — 2,812 Total deferred tax liabilities 21,226 23,791 Total net deferred tax assets $ 22,466 $ 20,511 As of December 31, 2018 , we had deferred tax assets related to various foreign and state loss and tax credit carryforwards totaling $4.5 million that begin to expire in 2020. As of December 31, 2018 and 2017 , we provided valuation allowances of $2.4 million and $3.2 million , respectively, relating to net operating loss carryforwards. The decrease in the valuation allowance in 2018 is primarily due to the use of net operating losses for which a valuation allowance had been recognized. For the years ended December 31, 2018 , 2017 , and 2016 , our effective income tax rate varied from the U.S. statutory tax rate that was in effect during the periods as follows: Year Ended December 31, 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 35.0 % State and local taxes, net of federal tax benefit 1.6 % 0.8 % 0.5 % Foreign taxes at rates different from U.S. rates (1.2 %) (13.5 %) (25.0 %) U.S. taxes on foreign earnings 1.8 % 1.2 % 9.9 % Effect of enacted tax legislation (6.6 %) 0.8 % (0.1 %) Changes in tax reserves 0.2 % (4.5 %) 1.6 % Effective settlement of income tax audits 4.2 % 0.0 % 0.0 % Other (0.2 %) (1.9 %) 4.9 % Effective income tax rate 20.8 % 17.9 % 26.8 % Our effective income tax rate is 20.8% for the year ended December 31, 2018 , compared to 17.9% in the prior year. The increase in our effective income tax rate is primarily due to a net tax charge of $4.8 million recorded in the current year related to the effective settlement of an income tax audit and a $7 million benefit recorded in the prior year to reverse a liability for a previously uncertain tax position for which the statute of limitations had expired. These factors are partially offset by an income tax benefit of $8.7 million recorded in the current year to adjust the provisional income tax expense of $1.2 million recorded in the prior year upon the enactment of the U.S. Tax Cuts and Jobs Act in 2017, as discussed below. U.S. Tax Reform —The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted into law on December 22, 2017. Certain provisions of the Act have the effect of reducing our effective tax rate beginning on January 1, 2018, such as: (i) a reduction of the U.S. corporate income tax rate from 35% to 21%; (ii) the transition from a worldwide tax system to a modified territorial tax system, under which dividends from foreign subsidiaries are not subject to additional U.S. tax; and (iii) the creation of Foreign Derived Intangible Income (“FDII”), a new category of income that is taxed at a lower rate. Conversely, certain provisions of the Act have the effect of increasing our effective tax rate beginning on January 1, 2018, such as: (i) the creation of global intangible low-taxed income (“GILTI”), which requires income earned by foreign subsidiaries in excess of a nominal return on their depreciable assets to be included currently in the income of the U.S. shareholder; (ii) the imposition of the Base Erosion Anti-Abuse Tax (“BEAT”), a minimum tax on certain non-US related-party payments; and (iii) more restrictive limitations on the deductibility of executive compensation. Upon enactment of the Act, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Cuts and Jobs Act , which allowed companies to record the income tax effects of the Act as a provisional amount based on reasonable estimates for those tax effects and provided a one-year measurement period for companies to finalize the accounting of the income tax effects of the Act. 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. This provisional net income tax expense was then adjusted in 2018 through the recording of $8.7 million in tax benefits as we finalized our accounting for the Act. In total, between 2017 and 2018, we recorded a net income tax benefit of $7.5 million related to the Act, which consists of the following components: • An expense of $36.4 million to record a liability for the one-time transition tax on certain unremitted and untaxed earnings of our foreign subsidiaries. This amount consists of a $40.4 million liability that was recorded in the fourth quarter of 2017, which was adjusted in 2018 through a $4 million income tax benefit that was recorded to reduce the liability as a result of guidance that was issued by the IRS during the year and as a result of revisions made to certain estimates used in the calculation as of December 31, 2017; • An expense of $16.3 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%. This amount consists of a $19.8 million charge recorded in the fourth quarter of 2017, which was adjusted in 2018 through a $2.2 million income tax benefit to increase the value of our net deferred tax assets based on further analysis of available tax accounting methods and elections and a $1.3 million income tax benefit to increase the value of our deferred tax assets related to certain executive compensation based on guidance that was issued by the IRS during the year; and • An income tax benefit of $60.2 million to reduce our deferred tax liability related to the earnings of our foreign subsidiaries that were not deemed to be indefinitely reinvested. This amount consists of a $59 million income tax benefit recorded in the fourth quarter of 2017, which was adjusted in 2018 through a $1.2 million income tax benefit recorded to reduce our estimate of the deferred tax liability. Our accounting for the effects of the Act is complete as of December 31, 2018; however, there may be some elements of the Act that remain subject to further clarification by the issuance of future regulations or notices by the U.S. Treasury Department or IRS which could result in adjustments to previously recorded amounts, including the issuance of final regulations on January 15, 2019 related to the one-time transition tax. We are evaluating the effect of the final regulations on the amount of the transition tax liability, but don't believe that the regulations will have a material impact on the recorded liability. The FASB voted to permit companies to elect to record deferred taxes on temporary basis differences that are expected to reverse as GILTI in the future, rather than recording the tax effect of those temporary differences as a period cost. We have chosen to account for any taxes associated with GILTI as a period cost and, accordingly, we have included the impact of changes in these temporary differences on GILTI as a period cost in our current tax provision. Repatriation of Foreign Earnings —As discussed above, as a result of the Act, we incurred a $36.4 million liability as of December 31, 2018 related to the one-time mandatory transition tax on the unremitted and untaxed earnings of our foreign subsidiaries. As of December 31, 2018, we have provided tax on substantially all of the undistributed earnings of our foreign subsidiaries for which we are not indefinitely reinvested and have recognized a deferred tax liability of approximately $2.6 million on such earnings. Income Tax Payments —Total net income tax payments during 2018 , 2017 , and 2016 were $36.8 million , $52.3 million , and $32.4 million , respectively. |
Uncertain Tax Positions
Uncertain Tax Positions | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Uncertainties [Abstract] | |
Uncertain Tax Positions | Uncertain Tax Positions As of December 31, 2018 , 2017 , and 2016 , the liability for unrecognized tax benefits, excluding interest and penalties, was $11.5 million , $13.2 million , and $19.5 million , respectively, and is recorded within long-term Accrued Income Taxes on our Consolidated Balance Sheets. As of December 31, 2018 and 2017 , the total amount of unrecognized tax benefits that, if recognized, would favorably affect our effective income tax rate was $2.9 million and $4.1 million , respectively. The table below presents a reconciliation of the beginning and ending balances of the liability for unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Balance at January 1 $ 13,174 $ 19,478 $ 22,042 Increases in unrecognized tax benefits related to the current year 2,583 2,512 1,700 Increases in unrecognized tax benefits related to prior years 4,503 2,430 29 Decreases in unrecognized tax benefits related to prior years (1,334 ) (793 ) — Decreases in unrecognized tax benefits related to settlements (4,812 ) (2,075 ) — Decreases in unrecognized tax benefits due to the lapse of the applicable statute of limitations (2,639 ) (8,378 ) (4,293 ) Balance at December 31 $ 11,475 $ 13,174 $ 19,478 The net decrease to the liability for unrecognized tax benefits in 2018 is primarily due to the reversal of tax reserves upon the settlement of tax audits. Also contributing to the decrease in the liability for unrecognized tax benefits is the lapse of the statute of limitations for certain tax years. These decreases are partially offset by the accrual of tax reserves related to transfer pricing and other U.S. federal and state and non-U.S. matters. The net decreases to the liability for unrecognized tax benefits in 2017 and 2016 were primarily attributable to the expiration of the statutes of limitations for certain tax years, partially offset by the accrual of tax reserves related to transfer pricing and other U.S. federal and state and non-U.S. matters. The net decrease in 2017 was also due to the settlement of tax audits. We recognize interest expense and penalties related to unrecognized tax benefits as a component of Income Tax Expense in our Consolidated Income Statements. During 2018 , 2017 , and 2016 , we recognized a net benefit of $0.1 million , a net benefit of $0.9 million , and a net expense of $0.3 million , respectively, for interest expense and penalties related to unrecognized tax benefits. As of December 31, 2018 , 2017 , and 2016 , the liability for tax-related interest and penalties included on our Consolidated Balance Sheets was $1.1 million , $1.2 million , and $2.1 million , respectively. The net decreases in 2018 and 2017 were due to the reversal of interest accrued on unrecognized tax benefits, partially offset by the accrual of additional interest on existing unrecognized tax benefits. We are subject to taxation in the U.S. and various state and foreign jurisdictions and, as a result, may be 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 believe it is reasonably possible that a decrease of $2.2 million in the balance of unrecognized tax benefits can occur within 12 months of the December 31, 2018 balance sheet date primarily as a result of the expiration of statutes of limitation and the expected settlements of ongoing tax audits. Our policy is to record interest expense related to sales, value-added and other non-income based taxes as Interest Expense in our Consolidated Income Statements. Penalties related to such taxes are recorded as General and Administrative Expenses in our Consolidated Income Statements. Interest expense and penalties related to income taxes are recorded as a component of Income Tax Expense in our Consolidated Income Statements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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 $11.4 million as of December 31, 2018 . Indirect Tax Contingencies —We are subject to laws and regulations in many countries involving sales, use, value-added and other indirect taxes which are assessed by various governmental authorities and imposed on certain revenue-producing transactions between us and our clients. The application of these laws and regulations to our unique business and global client base, and the estimation of any related liabilities, is complex and requires a significant amount of judgment. We are generally not responsible for these indirect tax liabilities unless we fail to collect the correct amount of sales, value-added, or other indirect taxes. Failure to collect the correct amount of indirect tax on a transaction may expose us to claims from tax authorities and could require us to record a liability and corresponding charge to our income statement. Legal Contingencies —We become involved in various claims and lawsuits incidental to the ordinary course of our business. We are required to assess the likelihood of any adverse judgments or outcomes related to these legal contingencies, as well as potential ranges of probable or reasonably possible losses. The determination of the amount of any losses to be recorded or disclosed as a result of these contingencies is based on a careful analysis of each individual exposure with, in some cases, the assistance of outside legal counsel. The amount of losses recorded or disclosed for such contingencies may change in the future due to new developments in each matter or a change in settlement strategy. While the impact of any one or more legal claims or proceedings could be material to our operating results in any period, we do not believe that the outcome of any of these pending claims or proceedings (including the matter discussed below), 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. Sotheby’s filed its detailed Statement of Claim on July 11, 2017. 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. 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. On October 2, 2018, two entities controlled by Mr. Rybolovlev commenced proceedings against Sotheby’s and Sotheby’s, Inc. in the U.S. District Court for the Southern District of New York. In their complaint, these entities allege that Sotheby’s and its agents aided and abetted an alleged fraud that Mr. Bouvier allegedly perpetrated against Mr. Rybolovlev and affiliated entities and are claiming a minimum of $380 million in damages. The plaintiffs also allege that Sotheby’s, in commencing the Swiss Action, violated a tolling agreement that the parties had entered into and seek an injunction prohibiting Sotheby’s from prosecuting the Swiss Action. On January 18, 2019, Sotheby’s filed a motion to dismiss this complaint, which it believes to be meritless, on numerous grounds. |
Auction Guarantees
Auction Guarantees | 12 Months Ended |
Dec. 31, 2018 | |
Auction Guarantees [Abstract] | |
Auction Guarantees | Auction Guarantees As of December 31, 2018 , we had outstanding auction guarantees totaling $98.3 million . Each of the outstanding auction guarantees has a minimum guaranteed price that is within or below the range of the pre-sale auction estimates for the underlying property. The property related to these auction guarantees is being offered at auctions throughout 2019. Our financial exposure under these auction guarantees is reduced by $45.6 million as a result of our use of contractual risk-sharing arrangements with third parties, as discussed above. After taking into account these risk-sharing arrangements, as of December 31, 2018 , our net financial exposure related to the auction guarantees was $52.7 million . The contractual risk-sharing arrangements used to reduce our exposure to auction guarantees include irrevocable bid arrangements and, from time-to-time, partner sharing arrangements. The counterparties to these 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. Additionally, 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 1 for additional information related to our use of auction guarantees and related risk-sharing arrangements.) As of December 31, 2018 and 2017 , the estimated fair value of our obligation to perform under our outstanding auction guarantees totaled $2.9 million and $0.9 million , respectively, and is recorded within Accounts Payable and Accrued Liabilities on our Consolidated Balance Sheets. This estimated fair value is based on an analysis of historical loss experience related to auction guarantees and does not include the impact of risk-sharing arrangements that may have mitigated all or a portion of any historical losses. As of February 26, 2019, we had outstanding auction guarantees totaling $244.5 million and, as of that date, our financial exposure was reduced by contractual risk-sharing arrangements totaling $133.3 million . Each of the auction guarantees outstanding as of February 26, 2019, had a minimum guaranteed price that was within or below the range of the pre-sale auction estimates for the underlying property. The property related to these auction guarantees is being offered at auctions throughout 2019. After taking into account these risk-sharing arrangements, as of February 26, 2019, our net financial exposure related to the auction guarantees was $111.2 million . As of February 26, 2019, we have advanced $7.6 million of the total guaranteed amount. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Operating [Abstract] | |
Lease Commitments | Lease Commitments We conduct business on premises leased in 23 different countries under operating leases expiring at various dates through 2060. Our operating lease commitments primarily relate to salesroom and exhibition space, office space, and warehouse facilities used predominantly for Agency segment operations. Under the terms of certain operating leases, we are required to pay real estate taxes and utility costs and may be subject to escalations in the amount of future minimum lease payments based on certain contractual provisions. For the years ended December 31, 2018 , 2017 , and 2016 , net rental expense under our operating leases was $19.7 million , $18.7 million , and $18.4 million , respectively, which was recorded within General and Administrative Expenses in our Consolidated Income Statements. The following table summarizes future minimum lease payments due under non-cancellable operating leases in effect at December 31, 2018 (in thousands of dollars): 2019 $ 20,039 2020 17,771 2021 14,033 2022 11,750 2023 9,449 Thereafter 32,318 Total future minimum lease payments $ 105,360 The amounts included in the table above represent undiscounted non-cancellable future minimum lease payments including any contractual market-based or indexed rent adjustments that are currently in effect. Common area maintenance, insurance, and real estate tax payments for which we are also obligated under the terms of certain leases are excluded from the table above, as well as future minimum sublease rental receipts of $11.7 million owed to us under noncancellable subleases. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2018 | |
Dividends, Share-based Compensation [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 years ended December 31, 2018 , 2017 , and 2016 , compensation expense related to share-based payments was reflected in the following accounts in our Consolidated Income Statements (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Salaries and related costs $ 29,703 $ 23,479 $ 15,935 Voluntary separation incentive programs (see Note 24) — — (719 ) Total share-based payment expense (pre-tax) $ 29,703 $ 23,479 $ 15,216 Total share-based payment expense (after-tax) $ 22,846 $ 15,555 $ 10,810 On January 1, 2017, we adopted ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 requires, among other things, that all excess tax benefits and deficiencies resulting from the vesting of share-based payments be recorded in the statement of operations, whereas previous guidance generally permitted such items to be recorded in the equity section of the balance sheet provided that an adequate level of previously recorded excess tax benefits existed. This aspect of ASU 2016-09 was adopted on a prospective basis. In 2018 and 2017, we recognized $1.2 million and $2.7 million , respectively, in excess tax benefits related to share-based payments in our Consolidated Income Statements. These tax benefits represent the amount by which the tax deduction resulting from the vesting of share-based payments and the exercise of stock options during those years exceeded the tax benefit initially recognized in our Consolidated Financial Statements. In 2016, we recognized a ($1.3) million tax shortfall related to share-based payment arrangements. This tax shortfall represents the amount by which the tax deduction resulting from the vesting of share-based payments during the year was less than the tax benefit initially recognized in our Consolidated Financial Statements. As discussed above, prior to the adoption of ASU 2016-09 on January 1, 2017, such tax shortfalls were accounted for as a reduction to previously recorded excess tax benefits related to share-based payments within Additional Paid-in Capital on our Consolidated Balance Sheets. As of December 31, 2018 , unrecognized compensation expense related to the unvested portion of share-based payments to employees was $23.9 million . This compensation expense is expected to be amortized over a weighted-average period of approximately 1.8 years . We do not capitalize 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. 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. 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. 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 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. In 2018, the Compensation Committee approved share-based payment awards with a total grant date fair value of $32.7 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 award 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 . • 412,708 RSU's with a grant date fair value of $19.6 million and annual vesting opportunities over a three -year service period. Summary of Outstanding Share-Based Payment Awards —For the year ended December 31, 2018 , changes to the number of outstanding RSU's, PSU's, and Restricted Stock shares were as follows (shares in thousands): RSU's, PSU's, and Restricted Weighted Average Grant Date Fair Value Outstanding at January 1, 2018 1,922 $ 36.59 Granted 696 $ 47.05 Vested (545 ) $ 39.21 Canceled (221 ) $ 40.20 Outstanding at December 31, 2018 1,852 $ 39.12 As of December 31, 2018 , 6.9 million shares were available for future awards pursuant to the Restricted Stock Unit Plan. The aggregate fair value of RSU's and PSU's that vested during 2018 , 2017 , and 2016 was $27.6 million , $39.7 million , and $15.2 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 . The exercised stock options had an intrinsic value of $1.4 million . Also, as a result of the exercise of these stock options, we recognized an excess tax benefit of $0.2 million in our Consolidated Income Statement in the fourth quarter of 2017. As of December 31, 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 NYSE 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. In 2018 , 2017 , and 2016 , we recognized $1.3 million , $1 million , and $0.9 million , respectively, within General and Administrative Expenses in our Consolidated Income Statements related to common stock shares awarded under the Directors Stock Plan. As of December 31, 2018 , 186,124 deferred stock units were outstanding under the Directors Stock Plan and 88,047 units were available for future issuance. |
Voluntary Separation Incentive
Voluntary Separation Incentive Programs, net | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Voluntary Separation Incentive Programs, net | Voluntary Separation Incentive Programs, net On November 13, 2015, we announced a series of regional voluntary separation incentive programs (the "Programs") aimed at reducing headcount and associated compensation costs. The Programs were offered to our employees in jurisdictions where it was practical to do so. Employees who elected to participate in the Programs were accepted only upon approval by management. In the fourth quarter of 2015, we recognized a charge of $36.9 million as a result of the Programs, consisting of $33.8 million in cash severance benefits and $3.1 million in accelerated equity compensation expense related to awards that will continue to vest after termination of employment, subject to our achievement of the underlying profitability targets, when applicable. In 2016, we recognized a net credit of $0.6 million primarily resulting from our quarterly assessment of the likelihood that the performance-based stock units held by participants in the Programs will vest. In 2017, we recognized a credit of $0.2 million as a result of the reversal of the remaining liability related to the Programs following the final payment of severance benefits. Restructuring Charges Beginning in the second quarter of 2018, we implemented a restructuring plan with the principal goal of reducing headcount through the elimination of certain Agency segment and corporate level positions (the "2018 Restructuring Plan"). The 2018 Restructuring Plan was completed in the fourth quarter of 2018 and resulted in $10.8 million of related charges, almost entirely attributable to severance-related costs. As of December 31, 2018, the remaining restructuring liability was $5.9 million and is recorded on our Consolidated Balance Sheets within Accounts Payable and Accrued Liabilities. This liability is expected to be substantially settled through cash payments to be made throughout 2019. |
Restructuring Charges, net
Restructuring Charges, net | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges, net | Voluntary Separation Incentive Programs, net On November 13, 2015, we announced a series of regional voluntary separation incentive programs (the "Programs") aimed at reducing headcount and associated compensation costs. The Programs were offered to our employees in jurisdictions where it was practical to do so. Employees who elected to participate in the Programs were accepted only upon approval by management. In the fourth quarter of 2015, we recognized a charge of $36.9 million as a result of the Programs, consisting of $33.8 million in cash severance benefits and $3.1 million in accelerated equity compensation expense related to awards that will continue to vest after termination of employment, subject to our achievement of the underlying profitability targets, when applicable. In 2016, we recognized a net credit of $0.6 million primarily resulting from our quarterly assessment of the likelihood that the performance-based stock units held by participants in the Programs will vest. In 2017, we recognized a credit of $0.2 million as a result of the reversal of the remaining liability related to the Programs following the final payment of severance benefits. Restructuring Charges Beginning in the second quarter of 2018, we implemented a restructuring plan with the principal goal of reducing headcount through the elimination of certain Agency segment and corporate level positions (the "2018 Restructuring Plan"). The 2018 Restructuring Plan was completed in the fourth quarter of 2018 and resulted in $10.8 million of related charges, almost entirely attributable to severance-related costs. As of December 31, 2018, the remaining restructuring liability was $5.9 million and is recorded on our Consolidated Balance Sheets within Accounts Payable and Accrued Liabilities. This liability is expected to be substantially settled through cash payments to be made throughout 2019. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 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 stock shares held by employees, both of which have non-forfeitable rights to dividends. See Note 23 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 23 for information on our share-based payment programs. For the years ended December 31, 2018 , 2017 , and 2016 , approximately 1 million potential common shares related to share-based payment awards were excluded from the computation of diluted earnings per share because the financial performance or stock price targets inherent in such awards were not achieved as of the respective balance sheet dates. The table below summarizes the computation of basic and diluted earnings per share for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars, except per share amounts): Year Ended December 31, 2018 2017 2016 Basic Earnings Per Share: Numerator: Net income attributable to Sotheby's $ 108,634 $ 118,796 $ 74,112 Less: Net income attributable to participating securities 1,620 1,765 1,001 Net income attributable to Sotheby's common shareholders $ 107,014 $ 117,031 $ 73,111 Denominator: Weighted average common shares outstanding 50,872 52,684 57,024 Basic earnings per share - Sotheby's common shareholders $ 2.10 $ 2.22 $ 1.28 Diluted Earnings Per Share: Numerator: Net income attributable to Sotheby's 108,634 $ 118,796 $ 74,112 Less: Net income attributable to participating securities 1,620 1,765 1,001 Net income attributable to Sotheby's common shareholders $ 107,014 $ 117,031 $ 73,111 Denominator: Weighted average common shares outstanding 50,872 52,684 57,024 Weighted average effect of dilutive potential common shares: Performance share units 229 231 465 Deferred stock units 177 161 149 Stock options — 25 15 Weighted average dilutive potential common shares outstanding 406 417 629 Weighted average diluted shares outstanding 51,278 53,101 57,653 Diluted earnings per share - Sotheby's common shareholders $ 2.09 $ 2.20 $ 1.27 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 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 our Board of Directors and management, buy and sell property at our auctions or through private sales. For the years ended December 31, 2018 , 2017 , and 2016 , our Consolidated Income Statements include Agency Commissions and Fees of $5.1 million , $5.2 million , and $4.1 million , respectively, attributable to transactions with related parties. In 2018, our Consolidated Income Statements include Inventory Sales (and related cost of sales) of $5.3 million attributable to transactions with related parties. As of December 31, 2018 and December 31, 2017 , Client Payables included amounts owed to related party consignors totaling $4.3 million and $0.4 million , respectively. There were no related party Accounts Receivable balances outstanding as of December 31, 2018 and 2017. On October 3, 2016, we entered into an agreement with funds managed by Marcato Capital Management LP, pursuant to which we purchased 2,050,000 shares of our common stock from Marcato for an aggregate purchase price of $73.8 million , or $36.00 per share. At the time of this agreement, Marcato owned 8.5% of our outstanding common stock. (See Note 16 .) |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | Quarterly Results (Unaudited) 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 76% and 80% of our total annual Net Auction Sales in 2018 and 2017 , respectively, with auction commission revenues comprising approximately 74% and 66% 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. On January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers . The adoption of ASC 606 did not impact the timing of our revenue recognition, but it changed the presentation of certain Agency-related revenues and expenses previously reported on a net basis in our Consolidated Income Statements. Results for the quarterly periods in 2017 have been recast to reflect the retrospective adoption of ASC 606. (See Note 2 for additional information on our adoption of ASC 606.) _________________________________________________________________ 1 Net Auction Sales represents the hammer or sale price of property sold at auction, excluding amounts related to the sale of our inventory at auction, which are reported within inventory sales. First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Year Ended December 31, 2018 Net Auction Sales $ 691,369 $ 1,707,432 $ 373,152 $ 1,623,640 Income Statement Data: Revenues: Agency commissions and fees $ 165,526 $ 290,879 $ 96,721 $ 338,648 Inventory sales 16,236 40,106 6,498 17,968 Finance 9,881 9,641 11,423 12,942 Other 4,153 5,010 4,519 5,589 Total revenues $ 195,796 $ 345,636 $ 119,161 $ 375,147 Operating income (loss) $ 6,911 $ 83,826 $ (30,667 ) $ 121,275 Net (loss) income attributable to Sotheby's $ (6,522 ) $ 57,282 $ (27,838 ) $ 85,712 Per Share Amounts: Basic (loss) earnings per share - Sotheby's common shareholders $ (0.12 ) $ 1.09 $ (0.55 ) $ 1.75 Diluted (loss) earnings per share - Sotheby's common shareholders $ (0.12 ) $ 1.08 $ (0.55 ) $ 1.72 Shares Outstanding: Basic 52,464 51,780 50,927 48,318 Diluted 52,464 52,210 50,927 49,003 Year Ended December 31, 2017 Net Auction Sales $ 474,903 $ 1,543,331 $ 286,722 $ 1,511,836 Income Statement Data: Revenues: Agency commissions and fees $ 111,265 $ 301,768 $ 81,264 $ 315,274 Inventory sales 71,377 19,937 81,501 6,167 Finance 12,767 13,359 11,697 13,114 Other 3,900 4,795 5,546 3,649 Total revenues $ 199,309 $ 339,859 $ 180,008 $ 338,204 Operating (loss) income $ (14,058 ) $ 114,155 $ (41,056 ) $ 106,634 Net (loss) income attributable to Sotheby's $ (11,325 ) $ 76,891 $ (23,479 ) $ 76,709 Per Share Amounts: Basic (loss) earnings per share - Sotheby's common shareholders $ (0.21 ) $ 1.44 $ (0.45 ) $ 1.44 Diluted (loss) earnings per share - Sotheby's common shareholders $ (0.21 ) $ 1.43 $ (0.45 ) $ 1.43 Shares Outstanding: Basic 53,016 52,716 52,532 52,471 Diluted 53,016 53,054 52,532 52,853 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | SCHEDULE II SOTHEBY'S VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2018 , 2017 , AND 2016 Column A Column B Column C Column D Column E Description Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period (Thousands of dollars) Valuation reserve deducted in the balance sheet from the asset to which it applies: Receivables: 2018 Allowance for doubtful accounts and credit losses $ 11,500 $ 2,256 $ — $ 2,031 $ 11,725 2017 Allowance for doubtful accounts and credit losses $ 8,940 $ 2,679 $ — $ 119 $ 11,500 2016 Allowance for doubtful accounts and credit losses $ 10,099 $ 928 $ — $ 2,087 $ 8,940 Deferred tax assets: 2018 Valuation allowance $ 3,194 $ 18 $ — $ 852 $ 2,360 2017 Valuation allowance $ 2,819 $ 384 $ — $ 9 $ 3,194 2016 Valuation allowance $ 2,437 $ 526 $ — $ 144 $ 2,819 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | —The Consolidated Financial Statements included herein have been prepared 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"). |
Principles of Consolidation | Principles of Consolidation —The 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 Attributable to Noncontrolling Interest" in our Consolidated Income Statements and the non-controlling 20% ownership interest is reported as "Noncontrolling Interest" within the Equity section of our 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 Consolidated Income Statements within Equity in Earnings of Investees. Our interest in the net assets of these investees is recorded on our Consolidated Balance Sheets within Other Long-Term Assets . |
Foreign Currency Translation | Foreign Currency Translation —Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenues, expenses, gains, and losses recorded in foreign currencies are translated using the monthly average exchange rates prevailing during the period in which they are recognized. Translation adjustments resulting from this process are recorded to Other Comprehensive (Loss) Income and reported on our Consolidated Balance Sheets within Accumulated Other Comprehensive Loss until the subsidiary is sold or liquidated, at which point the adjustments are recognized in Net Income. |
Valuation of Inventory and Loan Collateral | Valuation of Inventory and Loan Collateral —The art market is not a highly liquid trading market. As a result, the valuation of art is inherently subjective and the realizable value of art often fluctuates over time. In estimating the realizable value of art held in inventory and art pledged as collateral for loans, we consider the following complex array of factors: (i) whether the property is expected to be offered at auction or sold privately, and the timing of any such sale; (ii) the supply and demand for the property, taking into account current art market conditions, as well as changing trends as to which collecting categories and artists are most sought after; (iii) recent sale prices achieved for comparable items within a particular collecting category and/or by a particular artist; (iv) the state of the global economy and financial markets; and (v) our intent and ability to hold the property in order to maximize its realizable value. Due to the inherent subjectivity involved in estimating the realizable value of art held in inventory and art pledged as collateral for loans, our estimates of realizable value may prove, with the benefit of hindsight, to be different than the amount ultimately realized upon sale. |
Inventory | Inventory —Inventory consists of artworks that we own and includes the following general categories:(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). (See Note 21 for information related to auction guarantees.) Inventory is valued on a specific identification basis at the lower of cost or our estimate of realizable value (i.e., the expected sale price upon disposition). If there is evidence that the estimated realizable value of a specific item held in Inventory is less than its carrying value, a writedown is recorded to reflect our revised estimate of realizable va lue. For the years ended December 31, 2018 , 2017 , and 2016 , inventory writedowns totaled $9.5 million , $13.6 million , and $22.3 million , respectively, and are recorded within Cost of Inventory Sales in our Consolidated Income Statements. Although all of the items held in Inventory are available for immediate sale, the timing of eventual sale is difficult to predict due to the high value and unique nature of each item, as well as the cyclical nature of the global art market. We expect that the items held in Inventory will be sold in the ordinary course of our business during the normal operating cycle for such items. |
Fixed Assets | Fixed Assets —Fixed Assets are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful life of the asset. Buildings are depreciated over a useful life of up to 50 years . Building improvements are depreciated over a useful life of up to 20 years . Furniture and fixtures are depreciated over a useful life of up to seven years. Leasehold improvements are amortized using the straight-line method over the lesser of the term of the related lease or the estimated useful life of the improvement. Computer software purchased or developed for internal use consists of the cost of purchased software, as well as direct external and internal software development costs. These costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically between seven to ten years for enterprise systems and three years for other types of software. |
Goodwill | Goodwill —Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but is tested annually for impairment at the reporting unit level as of October 31 and between annual tests if indicators of potential impairment exist. These indicators could include a decline in our stock price and market capitalization, a significant change in the outlook for the reporting unit's business, lower than expected operating results, increased competition, legal factors, or the sale or disposition of a significant portion of a reporting unit. For reporting units with goodwill, an impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value. The fair value of the reporting units in our Agency segment is determined in reference to a blend of the income and market approaches, and the fair value of our art advisory reporting unit is determined using a discounted cash flow methodology. (See Note 9 for information related to Goodwill.) The significant assumptions used in the income approach and discounted cash flow approach include (i) forecasted growth rates and (ii) forecasted profitability, both of which are estimated based on consideration of our historical performance and projections of our future performance, and (iii) discount rates that are used to calculate the value of future projected cash flows, which rates are derived based on our estimated weighted average cost of capital. The significant assumptions used in the market approach include selected multiples applied to certain operating metrics. Considerable judgment is necessary to evaluate the impact of operating changes and business initiatives in order to estimate future growth rates and profitability in order to estimate future cash flows and multiples. This is particularly true in a cyclical business, like that of Sotheby's. Future business results could significantly impact the evaluation of our goodwill which could have a material impact on the determination of whether a potential impairment exists and the size of any such impairment. |
Intangible Assets | Intangible Assets —Intangible assets are amortized over their estimated useful lives unless the useful life of a particular intangible asset is deemed to be indefinite. If indicators of potential impairment exist, intangible assets with defined useful lives are tested for impairment based on our estimates of undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. (See Note 9 for information related to Intangible Assets.) |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. In such situations, long-lived assets are considered impaired when estimated future cash flows (undiscounted and without interest charges) resulting from the use of the asset and its eventual disposition are less than the asset's carrying amount. In such situations, the asset is written down to the present value of the estimated future cash flows. Factors that are considered when evaluating long-lived assets for impairment include a current expectation that it is more likely than not that the long-lived asset will be sold significantly before the end of its useful life, a significant decrease in the market price of the long-lived asset, and a significant change in the extent or manner in which the long-lived asset is being used. |
Deferred Tax Assets & Liabilities | Deferred Tax Assets & Liabilities — We follow the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized, based on enacted tax rates, for the future tax consequences of (i) temporary differences between the tax basis of assets and liabilities and their reported amounts in our consolidated financial statements and (ii) operating loss and tax credit carry-forwards for tax purposes. A valuation allowance is recorded to reduce our deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for the valuation allowance, management considers, among other things, projections of future taxable income and ongoing prudent and feasible tax planning strategies. If we determine that sufficient negative evidence exists (for example, if we experience cumulative three-year losses in a certain jurisdiction), then we will consider recording a valuation allowance against a portion or all of the deferred tax assets in that jurisdiction. If, after recording a valuation allowance, our projections of future taxable income and other positive evidence considered in evaluating the need for a valuation allowance prove, with the benefit of hindsight, to be inaccurate, it could prove to be more difficult to support the realization of our deferred tax assets. As a result, an additional valuation allowance could be required, which would have an adverse impact on our effective income tax rate and results. Conversely, if, after recording a valuation allowance, we determine that sufficient positive evidence exists in the jurisdiction in which the valuation allowance was recorded (for example, if we are no longer in a three-year cumulative loss position in the jurisdiction, and we expect to have future taxable income in that jurisdiction based upon our forecasts and the expected timing of deferred tax asset reversals), we may reverse a portion or all of the valuation allowance in that jurisdiction. In such situations, the adjustment made to the deferred tax asset would have a favorable impact on our effective income tax rate and on our results in the period such determination was made. |
Revenue Recognition | Revenue Recognition (Agency Commissions and Fees) —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. The revenue recognition policy for each of the principal components of Agency Commissions and Fees is described below. (See Note 4 for a table that summarizes our revenues by segment and type for the years ended December 31, 2018, 2017, and 2016.) (1) Auction Commissions —In our role as auctioneer, we accept works of art on consignment and match sellers 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. (2) Auction Guarantees —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 Consolidated Balance Sheets at the lower of its cost (i.e., the amount paid under the auction guarantee) or our estimate of the property’s net realizable value (i.e., the expected sale price upon its eventual disposition). The market for fine art, decorative art, and jewelry is not a highly liquid trading market. As a result, the valuation of property acquired as a result of failed auction guarantees is inherently subjective and its realizable value often fluctuates over time. Accordingly, the proceeds ultimately realized on the sale of previously guaranteed property may equal, exceed, or be less than the estimated net realizable value recorded as Inventory on our Consolidated Balance Sheets. 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 aggregate 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. The amount of any auction guarantee overage or shortfall is reported on a net basis within Agency Commissions and Fees. (3) 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. (4) 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. (5) 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 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. (6) 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. Revenue Recognition (Inventory Sales) —From time-to-time, the Agency segment earns revenue from the sale of items held in Inventory. Such 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. Revenue Recognition (Finance Revenues) —Finance revenues consist principally of interest income earned on Notes Receivable. Such interest income is recognized when earned, based on the amount of the outstanding loan, the applicable interest rate on the loan, and the length of time the loan is outstanding during the period. (See Note 5 for information related to Notes Receivable.) Revenue Recognition (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. Revenue Recognition (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 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. We maintain an Allowance for Doubtful Accounts against our Accounts Receivable balances, which principally includes estimated losses associated with situations when we have paid the net sale proceeds to the seller and it is probable that payment will not be collected from the buyer. The Allowance for Doubtful Accounts also includes an estimate of probable losses inherent in the remainder of the Accounts Receivable balance. The amount of the required allowance is based on the facts available to management, including the value of any property held as collateral, and is reevaluated and adjusted as additional facts become known. Based on all available information, we believe that the Allowance for Doubtful Accounts is adequate as of December 31, 2018; however, actual losses may ultimately exceed the recorded allowance. As of December 31, 2018 and 2017, the Allowance for Doubtful Accounts was $9.1 million and $8.7 million , respectively. Agency Direct Costs —A large portion of Agency Direct Costs relate to sale marketing expenses such as catalogue production and distribution, advertising and promotion costs, and traveling exhibition costs. Such costs are deferred and recorded on our Consolidated Balance Sheets within Prepaid Expenses and Other Current Assets until the date of the sale when they are recognized in our Consolidated Income Statements. |
Salaries and Related Costs | Salaries and Related Costs —Salaries and related costs are not allocated to our cost of revenue, marketing expense, and general and administrative expense line items, as many of our employees perform duties that could be categorized across more than one of these line items. |
Share-Based Payments | Share-Based Payments —We grant share-based payment awards as compensation to certain employees. The amount of compensation expense recognized for share-based payments is based, in part, on our estimate of the number of units or shares ultimately expected to vest as a result of employee service. For share-based payment awards that vest annually over a multi-year period of service, compensation expense is amortized over the requisite service period according to a graded vesting schedule. For share-based payment awards that have a single vesting opportunity at the end of a service period, compensation expense is amortized on a straight-line basis over the requisite service period. (See Note 23 for additional information related to share-based payments.) A substantial portion of the share-based payment awards vest only if we achieve established profitability (for awards granted prior to 2016) or certain return on invested capital (or "ROIC") targets (for awards granted beginning in 2016). The amount of compensation expense recognized for such performance-based awards is dependent upon our quarterly assessment of the likelihood of achieving these future profitability or ROIC targets. If, as a result of our assessment, we project that a greater number of performance share units will vest than previously anticipated, a life-to-date adjustment to increase compensation expense is recorded in the period such determination is made. Conversely, if, as a result of our assessment, we project that a lower number of performance share units will vest than previously anticipated, a life-to-date adjustment to decrease compensation expense is recorded in the period such determination is made. Accordingly, if our projections of future performance against these targets prove, with the benefit of hindsight, to be inaccurate, the amount of life-to-date and future compensation expense related to share-based payments could significantly increase or decrease. In 2015, we granted a share-based payment award to Thomas S. Smith, Jr., our President and CEO, with a single vesting opportunity after a five -year service period contingent upon the achievement of pre-determined levels of appreciation related to our common stock. The compensation expense recognized for this share-based payment is based on our estimate of the grant date fair value of the award. In developing this estimate, we considered then-current market conditions, historical data, and any other relevant data. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted in 2018 Revenue Recognition —In May 2014, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") which amended previous 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 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of the retrospective adoption of ASC 606 on our Consolidated Income Statements for the years ended December 31, 2017 and 2016. 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2016-15 on our Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016. 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2016-18 on our Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016. (See Note 15 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 tables below under "Summary of Adjustments to Prior Period Presentation" show the impact of our retrospective adoption of ASU 2017-07 on our Consolidated Income Statements for the for the years ended December 31, 2017 and 2016. (See Note 10 for information related to our defined benefit pension plan in the U.K.) 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 (the "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. We adopted ASU 2018-02 in the fourth quarter of 2018 and elected not to reclassify the stranded income tax effects in AOCI related to the Act to retained earnings in the statement of stockholders’ equity. Instead, any stranded income tax effects recorded in AOCI shall be reclassified into earnings in the period in which the underlying item is settled. Defined Benefit Plans —On August 28, 2018, the FASB issued ASU 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. In particular, this standard requires companies to provide the reasons for significant gains and losses in pension benefit obligations ("PBO's") and to explain any other significant changes in PBO's and plan assets not otherwise apparent. We adopted ASU 2018-14 in the fourth quarter of 2018 and provided the required disclosures in this report. (See Note 10.) Summary of Adjustments to Prior Period Presentation The following tables summarize the impact of the retrospective adoption of ASC 606 and ASU 2017-07 on our Consolidated Income Statements for the years ended December 31, 2017 and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 741,580 $ 67,991 $ — $ 809,571 Total revenues $ 989,389 $ 67,991 $ — $ 1,057,380 Expenses: Agency direct costs $ 82,142 $ 67,991 $ — $ 150,133 Salaries and related $ 313,895 $ — $ 4,660 $ 318,555 Total expenses $ 819,054 $ 67,991 $ 4,660 $ 891,705 Operating income $ 170,335 $ — $ (4,660 ) $ 165,675 Non-operating income $ 2,385 $ — $ 4,660 $ 7,045 Net income attributable to Sotheby's $ 118,796 $ — $ — $ 118,796 Year Ended December 31, 2016 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 671,833 $ 52,565 $ — $ 724,398 Total revenues $ 805,377 $ 52,565 $ — $ 857,942 Expenses: Agency direct costs $ 73,324 $ 52,565 $ — $ 125,889 Salaries and related $ 307,659 $ — $ 7,981 $ 315,640 Total expenses $ 682,761 $ 52,565 $ 7,981 $ 743,307 Operating income $ 122,616 $ — $ (7,981 ) $ 114,635 Non-operating income $ 3,134 $ — $ 7,981 $ 11,115 Net income attributable to Sotheby's $ 74,112 $ — $ — $ 74,112 The following tables summarize the impact of the retrospective adoption of ASU 2016-15 and ASU 2016-18 on our Consolidated Statement of Cash Flows for the years ended December 31, 2017, and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Restricted cash related to interest on 2022 Senior Notes $ (4,375 ) $ — $ 4,375 $ — Changes in other operating assets and liabilities $ (5,489 ) $ (2,100 ) $ — $ (7,589 ) Net cash provided by operating activities $ 366,185 $ (2,100 ) $ 4,375 $ 368,460 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,100 $ — $ 2,100 Increase in restricted cash $ (3,276 ) $ — $ 3,276 $ — Net cash provided by investing activities $ 60,260 $ 2,100 $ 3,276 $ 65,636 Financing Activities: Restricted cash related to York Property Mortgage $ 1,527 $ — $ (1,527 ) $ — Restricted cash related to 2022 Senior Notes, principal and premium $ (307,875 ) $ — $ 307,875 $ — Net cash used by financing activities $ (383,971 ) $ — $ 306,348 $ (77,623 ) Effect of exchange rate changes $ 5,927 $ — $ 5,325 $ 11,252 Increase in cash, cash equivalents, and restricted cash (a) $ 48,401 $ — $ 319,324 $ 367,725 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) $ 544,432 $ — $ 379,494 $ 923,926 Year Ended December 31, 2016 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Changes in other operating assets and liabilities $ 10,055 $ (2,182 ) $ — $ 7,873 Net cash provided by operating activities $ 158,370 $ (2,182 ) $ — $ 156,188 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,182 $ — $ 2,182 Increase in restricted cash $ (26,097 ) $ — $ 26,097 $ — Net cash used by investing activities $ (120,418 ) $ 2,182 $ 26,097 $ (92,139 ) Financing Activities: Restricted cash related to York Property Mortgage $ (4,635 ) $ — $ 4,635 $ — Net cash used by financing activities $ (356,275 ) $ — $ 4,635 $ (351,640 ) Effect of exchange rate changes $ (34,343 ) $ — $ (1,129 ) $ (35,472 ) Decrease in cash, cash equivalents, and restricted cash (a) $ (352,666 ) $ — $ 29,603 $ (323,063 ) Cash, cash equivalents, and restricted cash at beginning of period (a) $ 848,697 $ — 30,567 $ 879,264 Cash, cash equivalents, and restricted cash at end of period (a) $ 496,031 $ — $ 60,170 $ 556,201 (a) Restricted cash is included only in the adjusted balances, reflecting the retrospective adoption of ASU 2016-18. 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. On July 30, 2018, the FASB issued ASU 2018-11, which makes targeted improvements to ASU 2016-02 (together, the "New Lease Standard"). We will adopt the New Lease Standard on January 1, 2019, using the modified retrospective method and will not restate comparative periods presented in the year of adoption. We will elect the package of practical expedients available under the transition provisions of the New Lease Standard, including (i) not reassessing whether expired or existing contracts contain leases, (ii) not reassessing previous lease classification, and (iii) not revaluing initial direct costs for existing leases. In addition, we will elect the practical expedient which allows the aggregation of non-lease components with the related lease components when evaluating accounting treatment. Upon the adoption of the New Lease Standard, we expect to record a right-of-use asset and a corresponding operating lease liability of approximately $ 70 million to $ 80 million. In addition, as of January 1, 2019, we have implemented internal controls over financial reporting relevant to the New Lease Standard. We do not expect the New Lease Standard to have a material impact on our results of operations, cash flows, or existing debt covenants. (See Note 22 for additional information regarding our existing portfolio of leases.) 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. Consolidation —In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for VIE's , which, among other things, addresses fees paid to decision makers and related party service providers. ASU 2018-17 is effective for us beginning on January 1, 2020. We are currently assessing the potential impact of adopting ASU 2018-17 on our financial statements. |
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"). 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 operating segments which include the auction, private sale, and other related activities that are conducted within 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 other certain equity method investments (see Note 6). |
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 stock shares held by employees, both of which have non-forfeitable rights to dividends. See Note 23 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 23 for information on our share-based payment programs. |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Schedule of New Accounting Pronouncements | The following tables summarize the impact of the retrospective adoption of ASC 606 and ASU 2017-07 on our Consolidated Income Statements for the years ended December 31, 2017 and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 741,580 $ 67,991 $ — $ 809,571 Total revenues $ 989,389 $ 67,991 $ — $ 1,057,380 Expenses: Agency direct costs $ 82,142 $ 67,991 $ — $ 150,133 Salaries and related $ 313,895 $ — $ 4,660 $ 318,555 Total expenses $ 819,054 $ 67,991 $ 4,660 $ 891,705 Operating income $ 170,335 $ — $ (4,660 ) $ 165,675 Non-operating income $ 2,385 $ — $ 4,660 $ 7,045 Net income attributable to Sotheby's $ 118,796 $ — $ — $ 118,796 Year Ended December 31, 2016 As Previously Reported ASC 606 Adjustment ASU 2017-07 Adjustment As Adjusted Revenues: Agency commissions and fees $ 671,833 $ 52,565 $ — $ 724,398 Total revenues $ 805,377 $ 52,565 $ — $ 857,942 Expenses: Agency direct costs $ 73,324 $ 52,565 $ — $ 125,889 Salaries and related $ 307,659 $ — $ 7,981 $ 315,640 Total expenses $ 682,761 $ 52,565 $ 7,981 $ 743,307 Operating income $ 122,616 $ — $ (7,981 ) $ 114,635 Non-operating income $ 3,134 $ — $ 7,981 $ 11,115 Net income attributable to Sotheby's $ 74,112 $ — $ — $ 74,112 The following tables summarize the impact of the retrospective adoption of ASU 2016-15 and ASU 2016-18 on our Consolidated Statement of Cash Flows for the years ended December 31, 2017, and 2016 (in thousands of dollars): Year Ended December 31, 2017 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Restricted cash related to interest on 2022 Senior Notes $ (4,375 ) $ — $ 4,375 $ — Changes in other operating assets and liabilities $ (5,489 ) $ (2,100 ) $ — $ (7,589 ) Net cash provided by operating activities $ 366,185 $ (2,100 ) $ 4,375 $ 368,460 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,100 $ — $ 2,100 Increase in restricted cash $ (3,276 ) $ — $ 3,276 $ — Net cash provided by investing activities $ 60,260 $ 2,100 $ 3,276 $ 65,636 Financing Activities: Restricted cash related to York Property Mortgage $ 1,527 $ — $ (1,527 ) $ — Restricted cash related to 2022 Senior Notes, principal and premium $ (307,875 ) $ — $ 307,875 $ — Net cash used by financing activities $ (383,971 ) $ — $ 306,348 $ (77,623 ) Effect of exchange rate changes $ 5,927 $ — $ 5,325 $ 11,252 Increase in cash, cash equivalents, and restricted cash (a) $ 48,401 $ — $ 319,324 $ 367,725 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) $ 544,432 $ — $ 379,494 $ 923,926 Year Ended December 31, 2016 As Previously Reported ASU 2016-15 Adjustments ASU 2016-18 Adjustments As Adjusted Operating Activities: Changes in other operating assets and liabilities $ 10,055 $ (2,182 ) $ — $ 7,873 Net cash provided by operating activities $ 158,370 $ (2,182 ) $ — $ 156,188 Investing Activities: Proceeds from company-owned life insurance $ — $ 2,182 $ — $ 2,182 Increase in restricted cash $ (26,097 ) $ — $ 26,097 $ — Net cash used by investing activities $ (120,418 ) $ 2,182 $ 26,097 $ (92,139 ) Financing Activities: Restricted cash related to York Property Mortgage $ (4,635 ) $ — $ 4,635 $ — Net cash used by financing activities $ (356,275 ) $ — $ 4,635 $ (351,640 ) Effect of exchange rate changes $ (34,343 ) $ — $ (1,129 ) $ (35,472 ) Decrease in cash, cash equivalents, and restricted cash (a) $ (352,666 ) $ — $ 29,603 $ (323,063 ) Cash, cash equivalents, and restricted cash at beginning of period (a) $ 848,697 $ — 30,567 $ 879,264 Cash, cash equivalents, and restricted cash at end of period (a) $ 496,031 $ — $ 60,170 $ 556,201 (a) Restricted cash is included only in the adjusted balances, reflecting the retrospective adoption of ASU 2016-18. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents our segment information for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 Agency SFS All Other Reconciling items Total Revenues $ 956,647 $ 50,856 $ 35,206 $ (6,969 ) (a) $ 1,035,740 Interest income $ 1,467 $ — $ — $ — $ 1,467 Interest expense $ 33,402 $ — $ — $ 6,582 (b) $ 39,984 Depreciation and amortization $ 26,102 $ 120 $ 826 $ — $ 27,048 Segment income before taxes (b) $ 111,055 $ 26,036 $ 7,762 $ (12,174 ) (c) $ 132,679 Year ended December 31, 2017 Revenues (d) $ 975,548 $ 60,105 $ 30,895 $ (9,168 ) (a) $ 1,057,380 Interest income $ 1,184 $ — $ — $ — $ 1,184 Interest expense $ 29,478 $ — $ — $ 2,740 (b) $ 32,218 Depreciation and amortization $ 23,015 $ 244 $ 794 $ — $ 24,053 Segment income before taxes (b) $ 103,943 $ 33,103 $ 10,696 (c) $ (6,056 ) (c) $ 141,686 Year ended December 31, 2016 Revenues (d) $ 779,227 $ 61,234 $ 25,999 $ (8,518 ) (a) $ 857,942 Interest income $ 1,294 $ — $ — $ — $ 1,294 Interest expense $ 27,597 $ — $ — $ 2,713 (b) $ 30,310 Depreciation and amortization $ 21,081 $ 119 $ 617 $ — $ 21,817 Segment income (loss) before taxes (b) (e) $ 67,284 $ 38,335 $ (482 ) $ (8,403 ) (c) $ 96,734 (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) Our previous credit agreements provided for dedicated asset-based revolving credit facilities for the Agency segment and SFS. The SFS Credit Facility was used to fund a significant portion of client loans. Accordingly, any borrowing costs associated with the SFS Credit Facility were recorded within Cost of Finance Revenues in our Consolidated Income Statements. In September 2017, we modified our cash management strategy in order to reduce borrowing costs by applying excess cash balances against revolver credit facility borrowings. On June 26, 2018, we refinanced our previous credit agreements. The new credit agreement that was entered into in connection with this refinancing combined the Agency Credit Facility and the SFS Credit Facility into one asset-based revolving credit facility. Subsequent to the refinancing and resulting elimination of the SFS Credit Facility, the SFS loan portfolio is no longer directly funded with revolving credit facility borrowings. Accordingly, beginning in the third quarter of 2018, all borrowing costs associated with our revolving credit facility are recorded as interest expense in our Consolidated Income Statements. As a result of this refinancing and the concurrent elimination of the separate segment-based revolving credit facilities, beginning in the third quarter of 2018, when measuring segment profitability: (i) revolving credit facility costs are no longer allocated to our segments and (ii) SFS receives a corporate finance charge that is calculated assuming that 85% of their loan portfolio is funded with debt. Segment results for all prior periods have been recast to reflect these changes in the measurement of segment profitability. (c) The reconciling items related to segment income before taxes are detailed in the table below. (d) Agency segment revenue for the years ended December 31, 2017 and 2016 has been recast to reflect the retrospective adoption of ASC 606. (See Notes 2 and 3.) (e) Agency segment income before taxes for the year ended December 31, 2016 includes $23.9 million of compensation expense related to an earn-out arrangement with the former principals of AAP. All Other segment income (loss) before taxes for the year ended December 31, 2016 includes $11.1 million of compensation expense related to this earn-out arrangement. (See Note 8 .) |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The table below presents a reconciliation of segment income (loss) before taxes to consolidated income before taxes for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 2017 2016 Agency $ 111,055 $ 103,943 $ 67,284 SFS 26,036 33,103 38,335 All Other 7,762 10,696 (482 ) Segment income before taxes 144,853 147,742 105,137 Unallocated amounts and reconciling items: Revolving credit facility costs (a) (14,623 ) (22,052 ) (20,451 ) SFS corporate finance charge 16,895 18,504 15,310 Extinguishment of debt (10,855 ) — — Equity in earnings of investees (b) (3,591 ) (2,508 ) (3,262 ) Income before taxes $ 132,679 $ 141,686 $ 96,734 (a) For the year ended ended December 31, 2018, revolving credit facility costs in the table above includes approximately $4 million of unamortized fees related to our previous credit agreements that were written off in the second quarter of 2018. (See Note 11.) (b) 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 Consolidated Income Statements. (See Note 6 . |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | The table below presents geographic information about our revenues for the years ended December 31, 2018 , 2017 , and 2016 for all countries which exceeded 5% of total revenues (in thousands of dollars): Year ended December 31, 2018 2017 2016 United States $ 484,275 $ 423,169 $ 399,500 United Kingdom 263,116 248,802 204,262 Hong Kong and China 176,636 227,753 149,792 Switzerland 43,351 97,246 51,327 France 58,313 56,114 46,631 Other countries 17,018 13,464 14,948 Reconciling item: Intercompany revenue (6,969 ) (9,168 ) (8,518 ) Total $ 1,035,740 $ 1,057,380 $ 857,942 |
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 December 31, 2018 , 2017 , and 2016 (in thousands of dollars): December 31, 2018 2017 2016 Agency $ 1,886,986 $ 2,395,429 $ 1,759,670 SFS 705,779 608,713 687,649 All Other 39,241 40,566 42,246 Total segment assets 2,632,006 3,044,708 2,489,565 Unallocated amounts and reconciling items: Deferred tax assets and income tax receivable 57,082 42,599 14,861 Consolidated assets $ 2,689,088 $ 3,087,307 $ 2,504,426 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Segment | The following tables summarize our revenues by segment and type for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year ended December 31, 2018 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 767,881 $ — $ — $ 767,881 Auction related fees, net (a) 29,088 — — 29,088 Private sale commissions 82,263 — 1,000 83,263 Other Agency commissions and fees 11,181 — 361 11,542 Total Agency commissions and fees 890,413 — 1,361 891,774 Inventory sales 66,234 — 14,574 80,808 Advisory revenues — — 6,147 6,147 License fee and other revenues — — 13,124 13,124 Total revenue from contracts with customers 956,647 — 35,206 991,853 Finance revenue: Interest and related fees — 43,887 — 43,887 Total revenues $ 956,647 $ 43,887 $ 35,206 $ 1,035,740 Year ended December 31, 2017 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 694,501 $ — $ — $ 694,501 Auction related fees, net (a) 32,459 — — 32,459 Private sale commissions 67,343 — 815 68,158 Other Agency commissions and fees 13,617 — 836 14,453 Total Agency commissions and fees 807,920 — 1,651 809,571 Inventory sales 167,628 — 11,354 178,982 Advisory revenues — — 5,767 5,767 License fee and other revenues — — 12,123 12,123 Total revenue from contracts with customers 975,548 — 30,895 1,006,443 Finance revenue: Interest and related fees — 50,937 — 50,937 Total revenues $ 975,548 $ 50,937 $ 30,895 $ 1,057,380 Year ended December 31, 2016 Agency SFS All Other Total Revenue from contracts with customers: Agency commissions and fees: Auction commissions $ 641,220 $ — $ — $ 641,220 Auction related fees, net (a) 16,594 — — 16,594 Private sale commissions 54,984 — — 54,984 Other Agency commissions and fees 11,600 — — 11,600 Total Agency commissions and fees 724,398 — — 724,398 Inventory sales 54,829 — 8,034 62,863 Advisory revenues — — 6,596 6,596 License fee and other revenues — — 11,369 11,369 Total revenue from contracts with customers 779,227 — 25,999 805,226 Finance revenue: Interest and related fees — 52,716 — 52,716 Total revenues $ 779,227 $ 52,716 $ 25,999 $ 857,942 (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 recorded on our Consolidated Balance Sheets related to contracts with customers as of and for the years ended December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Accounts Receivable Balance as of beginning of period $ 783,706 $ 424,418 Balance as of end of period $ 967,817 $ 783,706 Increase $ 184,111 $ 359,288 Client Payables Balance as of beginning of period $ 996,197 $ 511,876 Balance as of end of period $ 997,168 $ 996,197 Increase $ 971 $ 484,321 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts and Notes Receivable, Net [Abstract] | |
Financing Receivable Credit Quality Indicators | The table below provides the aggregate LTV ratio for the SFS loan portfolio as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Secured loans $ 693,977 $ 590,609 Low auction estimate of collateral $ 1,629,270 $ 1,369,235 Aggregate LTV ratio 43 % 43 % The table below provides the aggregate LTV ratio for secured loans made by SFS with an LTV ratio above 50% as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Secured loans with an LTV ratio above 50% $ 264,916 $ 168,116 Low auction estimate of collateral related to secured loans with an LTV ratio above 50% $ 476,157 $ 269,063 Aggregate LTV ratio of secured loans with an LTV above 50% 56 % 62 % |
Summary Of Other Credit Quality Information Regarding Finance Segment Secured Loans | The table below provides other credit quality information regarding secured loans made by SFS as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Total secured loans $ 693,977 $ 590,609 Loans past due $ 14,405 $ 62,570 Loans more than 90 days past due $ 8,911 $ 56,087 Non-accrual loans $ 3,854 $ — Impaired loans $ — $ — Allowance for credit losses: Allowance for credit losses for impaired loans $ — $ — Allowance for credit losses based on historical data 1,075 1,253 Total allowance for credit losses - secured loans $ 1,075 $ 1,253 |
Activity Related To Allowance For Credit Losses | For the years ended December 31, 2018 and 2017 , 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, 2017 $ 1,270 $ — $ 1,270 Change in loan loss provision based on historical data (17 ) — (17 ) Change in loan loss provision for impaired loans — 1,525 1,525 Balance as of December 31, 2017 1,253 1,525 2,778 Change in loan loss provision based on historical data (178 ) — (178 ) Balance as of December 31, 2018 $ 1,075 $ 1,525 $ 2,600 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Fixed Assets | As of December 31, 2018 and 2017 , Fixed Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Land $ 92,338 $ 92,591 Buildings and building improvements 235,469 235,222 Leasehold improvements 82,350 84,504 Computer hardware and software 94,632 77,179 Furniture, fixtures and equipment 81,628 81,031 Construction in progress 34,233 9,492 Other 3,297 1,767 Sub-total 623,947 581,786 Less: Accumulated depreciation and amortization (237,211 ) (229,751 ) Total Fixed Assets, net $ 386,736 $ 352,035 |
Acquisition of Art Agency, Pa_2
Acquisition of Art Agency, Partners (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of total purchase price allocation to assets acquired and liabilities assumed | The table below summarizes the allocation of the total purchase price paid for AAP to the assets acquired and liabilities assumed (in thousands of dollars): Purchase price: Initial cash consideration $ 50,000 Working capital adjustment 1,189 Total purchase price $ 51,189 Allocation of purchase price: Net working capital acquired $ 1,572 Fixed assets and other long-term assets 173 Goodwill 34,490 Intangible assets - customer relationships (see Note 9) 10,800 Intangible assets - non-compete agreements (see Note 9) 3,060 Deferred tax assets 1,094 Total purchase price $ 51,189 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | For the years ended December 31, 2018 and 2017 , changes in the carrying value of Goodwill were as follows (in thousands of dollars): Year ended December 31, 2018 Year ended December 31, 2017 Agency All Other Total Agency All Other Total 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 (233 ) — (233 ) 518 — 518 Balance as of December 31, $ 49,422 $ 6,151 $ 55,573 $ 44,396 $ 6,151 $ 50,547 |
Indefinite-lived Intangible Assets | Intangible Assets —As of December 31, 2018 and 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period December 31, 2018 December 31, 2017 Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 8) 8 years 10,800 10,800 Non-compete agreements - AAP (see Note 8) 5-6 years 3,060 3,060 Artworks database (b) 10 years 1,275 1,200 Technology 4 years 4,461 — Total intangible assets subject to amortization 19,596 15,060 Accumulated amortization (6,927 ) (3,892 ) Total amortizable intangible assets (net) 12,669 11,168 Total intangible assets (net) $ 12,993 $ 11,492 (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 with the associated business in exchange for an initial cash payment made in the third quarter of 2016 and subsequent cash payments made in the third quarters of 2017 and 2018. |
Finite-lived Intangible Assets | Intangible Assets —As of December 31, 2018 and 2017 , intangible assets consisted of the following (in thousands of dollars): Amortization Period December 31, 2018 December 31, 2017 Indefinite lived intangible assets: License (a) N/A $ 324 $ 324 Intangible assets subject to amortization: Customer relationships - AAP (see Note 8) 8 years 10,800 10,800 Non-compete agreements - AAP (see Note 8) 5-6 years 3,060 3,060 Artworks database (b) 10 years 1,275 1,200 Technology 4 years 4,461 — Total intangible assets subject to amortization 19,596 15,060 Accumulated amortization (6,927 ) (3,892 ) Total amortizable intangible assets (net) 12,669 11,168 Total intangible assets (net) $ 12,993 $ 11,492 (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 with the associated business in exchange for an initial cash payment made in the third quarter of 2016 and subsequent cash payments made in the third quarters of 2017 and 2018. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated aggregate amortization expense for the remaining useful lives of intangible assets subject to amortization during the five -year period succeeding the December 31, 2018 balance sheet date are as follows (in thousands of dollars): Period Amount 2019 $ 3,186 2020 $ 3,186 2021 $ 2,937 2022 $ 1,573 2023 $ 1,480 |
Pension Arrangements (Tables)
Pension Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Trust Assets Related to Deferred Compensation Liability | As of December 31, 2018 and 2017 , the DCP liability, which is recorded on our Consolidated Balance Sheets within Other Long-Term Liabilities (see Note 14), was $28.3 million and $25.6 million , respectively, and the assets held in the rabbi trust consisted of the following (in thousands of dollars): December 31, 2018 2017 Company-owned variable life insurance $ 23,887 $ 25,567 Money market mutual fund investments 4,630 673 Total $ 28,517 $ 26,240 |
Change In Benefit Obligation, Change in Fair Value of Plan Assets, and Funded Status | The table below details the changes in the projected benefit obligation, plan assets, and funded status of the U.K. Pension Plan, as well as the net pension asset recognized on our Consolidated Balance Sheets, within Other Long-Term Assets (see Note 14), as of and for the years ended December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 2017 Reconciliation of benefit obligation Projected benefit obligation at beginning of year $ 345,876 $ 327,619 Interest cost 7,597 8,053 Actuarial gain (17,745 ) (781 ) Prior service cost 967 — Benefits paid (9,913 ) (8,508 ) Settlement payments — (11,880 ) Foreign currency exchange rate changes (17,065 ) 31,373 Projected benefit obligation at end of year 309,717 345,876 Reconciliation of plan assets Fair value of plan assets at beginning of year 454,702 406,195 Actual return on plan assets (8,832 ) 28,827 Benefits paid (9,913 ) (8,508 ) Settlement payments — (11,880 ) Foreign currency exchange rate changes (22,701 ) 40,068 Fair value of plan assets at end of year 413,256 454,702 Funded Status Net pension asset $ 103,539 $ 108,826 |
Pension Benefit Plan | For the years ended December 31, 2018 , 2017 , and 2016 , the components of the net pension benefit related to the U.K. Pension Plan are as follows (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Service cost $ — $ — $ 1,086 Interest cost 7,597 8,053 9,817 Prior service cost — 60 — Expected return on plan assets (11,131 ) (14,159 ) (17,798 ) Amortization of actuarial loss 481 1,139 — Amortization of prior service cost (102 ) (97 ) — Settlement loss — 344 — Net pension benefit $ (3,155 ) $ (4,660 ) $ (6,895 ) |
Benefit Obligation And Net Pension Benefit | As of and for the years ended December 31, 2018 , 2017 , and 2016 , the following assumptions were used in determining the benefit obligation and net pension benefit related to the U.K. Pension Plan: Benefit Obligation 2018 2017 Weighted average discount rate 2.9% 2.5% Net Pension Benefit 2018 2017 2016 Weighted average discount rate - service cost N/A N/A 3.8% Weighted average discount rate - interest cost 2.3% 2.4% 3.4% Weighted average rate of compensation increase N/A N/A 4.1% Weighted average expected long-term rate of return on plan assets 2.8% 3.8% 5.2% |
Components of Net Pension Benefits Related to U.K. Pension Plan Assets | The table below presents the fair value of U.K. Pension Plan assets, by investment category, as of December 31, 2018 and 2017 (in thousands of dollars): December 31, 2018 % of Total 2017 % of Total Growth assets $ 69,617 16.8 % $ 104,735 23.0 % Debt securities : Corporate 37,332 9.0 % 41,804 9.2 % Index-linked 147,891 35.8 % 219,428 48.3 % Total debt securities 185,223 44.8 % 261,232 57.5 % Buy-in annuity contract 131,416 31.8 % — — % Real estate mutual funds 33 — % 3,233 0.6 % Cash and cash equivalents 26,967 6.5 % 85,502 18.8 % Total fair value of plan assets $ 413,256 $ 454,702 |
Fair Value Measurement Information U.K. Pension Plan Assets | The table below provides fair value measurement information for the U.K. Pension Plan assets as of December 31, 2018 (in thousands of dollars): Fair Value Measurements Using: Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Growth assets $ 69,617 $ 69,617 $ — $ — Debt securities: Corporate 37,332 37,332 — — Index-linked 147,891 146,582 1,309 — Total debt securities 185,223 183,914 1,309 — Buy-in annuity contract 131,416 — — 131,416 Real estate mutual funds 33 — 33 — Cash and cash equivalents 26,967 26,967 — — Total fair value of plan assets $ 413,256 $ 280,498 $ 1,342 $ 131,416 |
Estimated Future Benefit Payments | Estimated future benefit payments related to the U.K. Pension Plan are as follows (in thousands of dollars): Year Benefit Payments 2019 $ 8,343 2020 $ 9,227 2021 $ 11,393 2022 $ 10,776 2023 $ 11,854 2024 to 2028 $ 65,289 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instruments [Abstract] | |
Schedule of Credit Agreements | The following tables summarize information related to our revolving credit facilities as of and for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): As of and for the years ended December 31, 2018 December 31, 2017 December 31, 2016 Maximum borrowing capacity (a) $ 1,100,000 $ 1,100,000 $ 1,335,000 Borrowing base $ 857,773 $ 605,927 $ 734,464 Borrowings outstanding $ 280,000 $ 196,500 $ 565,000 Available borrowing capacity (b) $ 577,773 $ 409,427 $ 169,464 Average borrowings outstanding $ 106,181 $ 479,367 $ 534,433 Legend: (a) On October 2, 2017, we reduced the borrowing capacity of the 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 available borrowing capacity is calculated as the borrowing base less borrowings outstanding |
Schedule of Debt | As of December 31, 2018 and 2017 , Long-Term Debt consisted of the following (in thousands of dollars): December 31, 2018 2017 York Property Mortgage, net of unamortized debt issuance costs of $3,559 and $4,545 $ 257,284 $ 270,556 2022 Senior Notes, net of unamortized debt issuance costs of $0 and $2,998 — 297,002 2025 Senior Notes, net of unamortized debt issuance costs of $4,894 and $5,623 395,106 394,377 Less current portion: York Property Mortgage, net of unamortized debt issuance costs of $1,010 and $1,010 (13,604 ) (11,930 ) 2022 Senior Notes, net of unamortized debt issuance costs of $0 and $2,998 — (297,002 ) Total Long-Term Debt, net $ 638,786 $ 653,003 |
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 December 31, 2018 are as follows (in thousands of dollars): Year Amount 2019 $ 47,035 2020 $ 47,267 2021 $ 46,845 2022 $ 241,095 2023 $ 299,500 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivative financial instruments designated as hedging instruments in the Consolidated Balance Sheet | The following tables present fair value information related to the derivative financial instruments designated as hedging instruments as of December 31, 2018 and 2017 (in thousands of dollars): Assets Liabilities December 31, 2018 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate collar N/A — Other Current Liabilities 40 Interest rate collar N/A — Other Long-Term Liabilities 1,185 Total cash flow hedges — — 1,225 Net Investment Hedges: Foreign exchange contracts Prepaid Expenses and Other Current Assets 462 N/A — Total $ 462 $ 1,225 Assets Liabilities December 31, 2017 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Cash Flow Hedges: Interest rate swap Prepaid Expenses and 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 |
Effect of derivative financial instruments designated as hedging instruments on Consolidated Income Statements | The following table summarizes the effect of the derivative financial instruments designated as hedging instruments on our Consolidated Income Statements and Consolidated Statements of Comprehensive Income for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Gain (Loss) Recognized in Other Comprehensive (Loss) 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 Year Ended December 31, 2018 2017 2016 2018 2017 2016 2018 2017 2016 Cash Flow Hedges: Interest rate swaps $ 95 $ 201 $ (704 ) Interest Expense $ (145 ) $ 16 $ 813 $ — $ — $ — Interest rate swap — — — Non-operating income — — — (160 ) — — Interest rate collar 440 1,219 533 Interest Expense 169 577 — — — — Interest rate collar — — — Non-operating income — — — — 622 — Total cash flow hedges 535 1,420 (171 ) 24 593 813 (160 ) 622 — Net Investment Hedges: Foreign exchange contracts 1,826 (3,059 ) 16,618 Non-operating income — — — (58 ) — — Total $ 2,361 $ (1,639 ) $ 16,447 $ 24 $ 593 $ 813 $ (218 ) $ 622 $ — |
Supplemental Consolidated Bal_2
Supplemental Consolidated Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of December 31, 2018 and 2017 , Prepaid Expenses and Other Current Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Prepaid expenses $ 25,672 $ 25,418 Derivative financial instruments (see Note 12) 462 339 Insurance recoveries 4,353 — Other 8,144 6,253 Total Prepaid and Other Current Assets $ 38,631 $ 32,010 |
Schedule of Other Long-Term Assets | Other Long-Term Assets consisted of the following (in thousands of dollars): December 31, 2018 2017 Defined benefit pension plan asset (see Note 10) $ 103,539 $ 108,826 Equity method investments (see Note 6) 47,507 46,905 Trust assets related to deferred compensation liability (see Note 10) 28,517 26,240 Restricted cash (a) (see Note 15) 16,819 17,916 Insurance recoveries 13,882 12,242 Other 16,396 15,479 Total Other Long-Term Assets $ 226,660 $ 227,608 (a) Principally relates to funds held in escrow pending the payment of sale proceeds to a consignor). |
Schedule of Other Long-Term Liabilities | As of December 31, 2018 and 2017 , Other Long-Term Liabilities consisted of the following (in thousands of dollars): December 31, 2018 2017 Deferred compensation liability (see Note 10) $ 28,255 $ 25,614 Acquisition earn-out consideration (see Note 8) 8,750 17,500 Interest rate collar liability (see Note 12) 1,185 1,501 Other 7,327 6,809 Total Other Long-Term Liabilities $ 45,517 $ 51,424 |
Supplemental Consolidated Cas_2
Supplemental Consolidated Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Restricted Cash Classified Within Current Assets | Cash, Cash Equivalents, and Restricted Cash —As of December 31, 2018 and 2017, cash, cash equivalents, and restricted cash consisted of the following (in thousands of dollars): December 31, 2018 2017 Cash and cash equivalents 178,579 $ 544,432 Restricted cash (a), recorded within current assets: Consignor funds held in legally segregated accounts 3,938 46,029 Funds deposited with the trustee for the redemption of the 2022 Senior Notes (see Note 11) — 312,250 Cash Management Account related to the York Property Mortgage (see Note 11) 716 3,107 Other 182 192 Restricted cash, recorded within current assets (a) 4,836 361,578 Restricted cash, recorded within other long-term assets (a) (b) 16,819 17,916 Total restricted cash 21,655 379,494 Cash, cash equivalents, and restricted cash $ 200,234 $ 923,926 (a) Restricted cash generally includes legally restricted deposits or amounts and cash balances restricted as a result of contracts entered into with third parties. (b) Principally relates to funds held in escrow pending the payment of sale proceeds to a consignor. |
Supplemental Condensed Consolidated Cash Flow Information | For the years ended December 31, 2018 , 2017 and 2016 , changes in other operating assets and liabilities as reported in the Consolidated Statements of Cash Flows included the following (in thousands of dollars): Year Ended December 31, 2018 2017 2016 (Increase) decrease in: Prepaid expenses and other current assets $ (6,244 ) $ 17,160 $ (14,510 ) Other long-term assets (3,537 ) (12,449 ) (12,188 ) Income tax receivables and deferred income tax assets (15,003 ) (33,532 ) 2,395 Increase (decrease) in: Accrued income taxes and deferred income tax liabilities 7,826 35,421 14,879 Accounts payable and accrued liabilities and other liabilities (3,703 ) (14,189 ) 17,297 Total changes in other operating assets and liabilities $ (20,661 ) $ (7,589 ) $ 7,873 |
Shareholders' Equity and Divi_2
Shareholders' Equity and Dividends (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity and Dividends [Abstract] | |
Summary of Common Stock Repurchase Program | The following table provides information regarding our common stock repurchase program for the years ended December 31, 2018, 2017, and 2016 (in thousands, except for per share data): Year Ended December 31, 2018 2017 2016 Three-Year Total Shares repurchased 6,473 961 13,144 20,578 Aggregate purchase price $ 284,733 $ 44,495 $ 359,885 $ 689,113 Average price per share $ 43.99 $ 46.32 $ 27.38 $ 33.49 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following is a summary of the changes in Accumulated Other Comprehensive Loss, and the details regarding any reclassification adjustments made during the period January 1, 2016 to December 31, 2018 (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Currency Translation Adjustments Balance at January 1 $ (74,505 ) $ (89,478 ) $ (52,279 ) Other comprehensive (loss) income before reclassifications, net of tax of ($498), $1,760, and ($13,113) (9,546 ) 14,973 (37,199 ) Other comprehensive (loss) income (9,546 ) 14,973 (37,199 ) Balance at December 31 (84,051 ) (74,505 ) (89,478 ) Cash Flow Hedges Balance at January 1 (1,029 ) (3,664 ) (4,306 ) Other comprehensive income (loss) before reclassifications, net of tax of $177, $888, and ($106) 535 1,420 (171 ) Reclassifications from accumulated other comprehensive loss, net of tax of ($106), $753, and $502 (136 ) 1,215 813 Other comprehensive income 399 2,635 642 Balance at December 31 (630 ) (1,029 ) (3,664 ) Net Investment Hedges Balance at January 1 13,559 16,618 — Other comprehensive income (loss) before reclassifications, net of tax of $635, ($1,885), and $10,354 1,826 (3,059 ) 16,618 Reclassifications from accumulated other comprehensive loss, net of tax ($20), $0, and $0 (58 ) — — Other comprehensive income (loss) 1,768 (3,059 ) 16,618 Balance at December 31 15,327 13,559 16,618 Defined Benefit Pension Plan Balance at January 1 (491 ) (13,834 ) (9,619 ) Currency translation adjustments 36 (1,084 ) 2,300 Net actuarial (loss) gain, net of tax of ($364), $2,719, and ($1,427) (1,775 ) 13,277 (6,515 ) Prior service cost, net of tax of ($157), $0, and $0 (774 ) — — Other comprehensive (loss) income before reclassifications, net of tax (2,513 ) 12,193 (4,215 ) Prior service cost amortization, net of tax of ($17), ($17), and $0 (85 ) (80 ) — Actuarial loss amortization, net of tax of $82, $194, and $0 399 945 — Settlement cost, net of tax of $0, $59, and $0 — 285 — Reclassifications from accumulated other comprehensive loss, net of tax 314 1,150 — Other comprehensive (loss) income (2,199 ) 13,343 (4,215 ) Balance at December 31 (2,690 ) (491 ) (13,834 ) Total other comprehensive (loss) income attributable to Sotheby's (9,578 ) 27,892 (24,154 ) Accumulated other comprehensive loss at December 31 $ (72,044 ) $ (62,466 ) $ (90,358 ) |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Year Ended December 31, 2018 2017 2016 Cash Flow Hedges Settlements of interest rate swaps $ (242 ) $ 1,968 $ 1,315 Tax effect 106 (753 ) (502 ) Reclassification adjustments, net of tax (136 ) 1,215 813 Net Investment Hedges Dedesignation of net investment hedge (78 ) — — Tax effect 20 — — Reclassification adjustments, net of tax (58 ) — — Defined Benefit Pension Plan Prior service cost amortization (102 ) (97 ) — Settlement loss — 344 — Actuarial loss amortization 481 1,139 — Pre-tax total 379 1,386 — Tax effect (65 ) (236 ) — Reclassification adjustments, net of tax 314 1,150 — Total reclassification adjustments, net of tax $ 120 $ 2,365 $ 813 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | For the years ended December 31, 2018 , 2017 , and 2016 , the significant components of income tax expense consisted of the following (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Income (loss) before taxes: Domestic $ 5,355 $ 3,636 $ (38,567 ) Foreign 127,324 138,050 135,301 Total $ 132,679 $ 141,686 $ 96,734 Income tax (benefit) expense—current: Domestic $ (17,510 ) $ 24,427 $ 18,443 State and local 2,987 1,492 1,766 Foreign 44,536 27,481 29,904 Sub-total 30,013 53,400 50,113 Income tax (benefit) expense—deferred: Domestic (2,787 ) (34,501 ) (19,114 ) State and local (252 ) 1,285 (1,034 ) Foreign 678 5,231 (4,008 ) Sub-total (2,361 ) (27,985 ) (24,156 ) Total $ 27,652 $ 25,415 $ 25,957 |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2018 and 2017 , the components of Deferred Tax Assets and Deferred Tax Liabilities consisted of the following (in thousands of dollars): December 31, 2018 2017 Deferred tax assets: Asset provisions and liabilities $ 8,992 $ 4,832 Inventory writedowns 2,061 3,408 Tax loss and credit carryforwards 4,549 3,908 Difference between book and tax basis of depreciable and amortizable assets 11,438 20,218 Share-based payments and deferred compensation 19,012 15,130 Sub-total 46,052 47,496 Valuation allowance (2,360 ) (3,194 ) Total deferred tax assets 43,692 44,302 Deferred tax liabilities: Difference between book and tax basis of other assets and liabilities 1,720 859 Pension obligations 16,521 16,280 Basis differences in equity method investments 371 1,269 Undistributed earnings of foreign subsidiaries 2,614 2,571 Bond redemption costs — 2,812 Total deferred tax liabilities 21,226 23,791 Total net deferred tax assets $ 22,466 $ 20,511 |
Schedule of Effective Income Tax Rate Reconciliation | For the years ended December 31, 2018 , 2017 , and 2016 , our effective income tax rate varied from the U.S. statutory tax rate that was in effect during the periods as follows: Year Ended December 31, 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 35.0 % State and local taxes, net of federal tax benefit 1.6 % 0.8 % 0.5 % Foreign taxes at rates different from U.S. rates (1.2 %) (13.5 %) (25.0 %) U.S. taxes on foreign earnings 1.8 % 1.2 % 9.9 % Effect of enacted tax legislation (6.6 %) 0.8 % (0.1 %) Changes in tax reserves 0.2 % (4.5 %) 1.6 % Effective settlement of income tax audits 4.2 % 0.0 % 0.0 % Other (0.2 %) (1.9 %) 4.9 % Effective income tax rate 20.8 % 17.9 % 26.8 % |
Uncertain Tax Positions (Tables
Uncertain Tax Positions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Uncertainties [Abstract] | |
Summary of Income Tax Contingencies | The table below presents a reconciliation of the beginning and ending balances of the liability for unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Balance at January 1 $ 13,174 $ 19,478 $ 22,042 Increases in unrecognized tax benefits related to the current year 2,583 2,512 1,700 Increases in unrecognized tax benefits related to prior years 4,503 2,430 29 Decreases in unrecognized tax benefits related to prior years (1,334 ) (793 ) — Decreases in unrecognized tax benefits related to settlements (4,812 ) (2,075 ) — Decreases in unrecognized tax benefits due to the lapse of the applicable statute of limitations (2,639 ) (8,378 ) (4,293 ) Balance at December 31 $ 11,475 $ 13,174 $ 19,478 |
Lease Commitments Lease Commitm
Lease Commitments Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | uture minimum lease payments due under non-cancellable operating leases in effect at December 31, 2018 (in thousands of dollars): 2019 $ 20,039 2020 17,771 2021 14,033 2022 11,750 2023 9,449 Thereafter 32,318 Total future minimum lease payments $ 105,360 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Dividends, Share-based Compensation [Abstract] | |
Compensation Expense Related to Share-Based Payments | For the years ended December 31, 2018 , 2017 , and 2016 , compensation expense related to share-based payments was reflected in the following accounts in our Consolidated Income Statements (in thousands of dollars): Year Ended December 31, 2018 2017 2016 Salaries and related costs $ 29,703 $ 23,479 $ 15,935 Voluntary separation incentive programs (see Note 24) — — (719 ) Total share-based payment expense (pre-tax) $ 29,703 $ 23,479 $ 15,216 Total share-based payment expense (after-tax) $ 22,846 $ 15,555 $ 10,810 |
Changes in Number of Outstanding Restricted Stock, RSU's and PSU's | For the year ended December 31, 2018 , changes to the number of outstanding RSU's, PSU's, and Restricted Stock shares were as follows (shares in thousands): RSU's, PSU's, and Restricted Weighted Average Grant Date Fair Value Outstanding at January 1, 2018 1,922 $ 36.59 Granted 696 $ 47.05 Vested (545 ) $ 39.21 Canceled (221 ) $ 40.20 Outstanding at December 31, 2018 1,852 $ 39.12 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The table below summarizes the computation of basic and diluted earnings per share for the years ended December 31, 2018 , 2017 , and 2016 (in thousands of dollars, except per share amounts): Year Ended December 31, 2018 2017 2016 Basic Earnings Per Share: Numerator: Net income attributable to Sotheby's $ 108,634 $ 118,796 $ 74,112 Less: Net income attributable to participating securities 1,620 1,765 1,001 Net income attributable to Sotheby's common shareholders $ 107,014 $ 117,031 $ 73,111 Denominator: Weighted average common shares outstanding 50,872 52,684 57,024 Basic earnings per share - Sotheby's common shareholders $ 2.10 $ 2.22 $ 1.28 Diluted Earnings Per Share: Numerator: Net income attributable to Sotheby's 108,634 $ 118,796 $ 74,112 Less: Net income attributable to participating securities 1,620 1,765 1,001 Net income attributable to Sotheby's common shareholders $ 107,014 $ 117,031 $ 73,111 Denominator: Weighted average common shares outstanding 50,872 52,684 57,024 Weighted average effect of dilutive potential common shares: Performance share units 229 231 465 Deferred stock units 177 161 149 Stock options — 25 15 Weighted average dilutive potential common shares outstanding 406 417 629 Weighted average diluted shares outstanding 51,278 53,101 57,653 Diluted earnings per share - Sotheby's common shareholders $ 2.09 $ 2.20 $ 1.27 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results | First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Year Ended December 31, 2018 Net Auction Sales $ 691,369 $ 1,707,432 $ 373,152 $ 1,623,640 Income Statement Data: Revenues: Agency commissions and fees $ 165,526 $ 290,879 $ 96,721 $ 338,648 Inventory sales 16,236 40,106 6,498 17,968 Finance 9,881 9,641 11,423 12,942 Other 4,153 5,010 4,519 5,589 Total revenues $ 195,796 $ 345,636 $ 119,161 $ 375,147 Operating income (loss) $ 6,911 $ 83,826 $ (30,667 ) $ 121,275 Net (loss) income attributable to Sotheby's $ (6,522 ) $ 57,282 $ (27,838 ) $ 85,712 Per Share Amounts: Basic (loss) earnings per share - Sotheby's common shareholders $ (0.12 ) $ 1.09 $ (0.55 ) $ 1.75 Diluted (loss) earnings per share - Sotheby's common shareholders $ (0.12 ) $ 1.08 $ (0.55 ) $ 1.72 Shares Outstanding: Basic 52,464 51,780 50,927 48,318 Diluted 52,464 52,210 50,927 49,003 Year Ended December 31, 2017 Net Auction Sales $ 474,903 $ 1,543,331 $ 286,722 $ 1,511,836 Income Statement Data: Revenues: Agency commissions and fees $ 111,265 $ 301,768 $ 81,264 $ 315,274 Inventory sales 71,377 19,937 81,501 6,167 Finance 12,767 13,359 11,697 13,114 Other 3,900 4,795 5,546 3,649 Total revenues $ 199,309 $ 339,859 $ 180,008 $ 338,204 Operating (loss) income $ (14,058 ) $ 114,155 $ (41,056 ) $ 106,634 Net (loss) income attributable to Sotheby's $ (11,325 ) $ 76,891 $ (23,479 ) $ 76,709 Per Share Amounts: Basic (loss) earnings per share - Sotheby's common shareholders $ (0.21 ) $ 1.44 $ (0.45 ) $ 1.44 Diluted (loss) earnings per share - Sotheby's common shareholders $ (0.21 ) $ 1.43 $ (0.45 ) $ 1.43 Shares Outstanding: Basic 53,016 52,716 52,532 52,471 Diluted 53,016 53,054 52,532 52,853 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2004 | |
Principles of Consolidation | ||||||
Noncontrolling ownership interest percentage | 20.00% | |||||
Inventory | ||||||
Inventory writedown | $ 9.5 | $ 13.6 | $ 22.3 | |||
Revenues | ||||||
Period after sale when purchase price is due | 30 days | |||||
Period from sale date when net proceeds are due | 35 days | |||||
Allowance for doubtful accounts receivable | $ 9.1 | $ 8.7 | ||||
New CEO 2015 Agreement | Performance Shares | ||||||
Share-Based Payments | ||||||
Award service period | 5 years | |||||
Building | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 50 years | |||||
Building improvements | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 20 years | |||||
Furniture and fixtures | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 7 years | |||||
Enterprise systems | Minimum | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 7 years | |||||
Enterprise systems | Maximum | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 10 years | |||||
Computer software | ||||||
Fixed Assets | ||||||
Fixed assets useful life | 3 years | |||||
Sotheby's Beijing | ||||||
Principles of Consolidation | ||||||
Controlling ownership interest percentage by parent | 80.00% | |||||
Trademarks | ||||||
Revenues | ||||||
Initial term | 50 years | |||||
Renewal term | 50 years |
Recently Issued Accounting St_3
Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | |
Revenues: | ||||||||||||
Revenues | $ 375,147 | $ 119,161 | $ 345,636 | $ 195,796 | $ 338,204 | $ 180,008 | $ 339,859 | $ 199,309 | $ 1,035,740 | $ 1,057,380 | $ 857,942 | |
Expenses: | ||||||||||||
Salaries and related | 342,687 | 318,555 | 315,640 | |||||||||
Total expenses | 854,395 | 891,705 | 743,307 | |||||||||
Operating (loss) income | 121,275 | (30,667) | 83,826 | 6,911 | 106,634 | (41,056) | 114,155 | (14,058) | 181,345 | 165,675 | 114,635 | |
Non-operating income | 4,688 | 7,045 | 11,115 | |||||||||
Net (loss) income attributable to Sotheby's | 85,712 | (27,838) | 57,282 | (6,522) | 76,709 | (23,479) | 76,891 | (11,325) | 108,634 | 118,796 | 74,112 | |
Operating Activities: | ||||||||||||
Changes in other operating assets and liabilities | (20,661) | (7,589) | 7,873 | |||||||||
Net cash provided by operating activities | (77,812) | 368,460 | 156,188 | |||||||||
Investing Activities: | ||||||||||||
Proceeds from company-owned life insurance | 0 | 2,100 | 2,182 | |||||||||
Decrease in restricted cash | 0 | 0 | ||||||||||
Net cash provided by investing activities | (87,288) | 65,636 | (92,139) | |||||||||
Financing Activities: | ||||||||||||
Net cash used by financing activities | (548,570) | (77,623) | (351,640) | |||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (10,022) | 11,252 | (35,472) | |||||||||
Decrease in cash, cash equivalents, and restricted cash | (723,692) | 367,725 | (323,063) | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 923,926 | 556,201 | 923,926 | 556,201 | 879,264 | |||||||
Cash, cash equivalents, and restricted cash at end of period | 200,234 | 923,926 | 200,234 | 923,926 | 556,201 | |||||||
Senior Notes | 2022 Senior Notes | ||||||||||||
Operating Activities: | ||||||||||||
Restricted cash related to interest on 2022 Senior Notes | 0 | |||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 0 | |||||||||||
York Property Mortgage | ||||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 0 | 0 | ||||||||||
As Previously Reported | ||||||||||||
Revenues: | ||||||||||||
Revenues | 989,389 | 805,377 | ||||||||||
Expenses: | ||||||||||||
Salaries and related | 313,895 | 307,659 | ||||||||||
Total expenses | 819,054 | 682,761 | ||||||||||
Operating (loss) income | 170,335 | 122,616 | ||||||||||
Non-operating income | 2,385 | 3,134 | ||||||||||
Net (loss) income attributable to Sotheby's | 118,796 | 74,112 | ||||||||||
Operating Activities: | ||||||||||||
Changes in other operating assets and liabilities | (5,489) | 10,055 | ||||||||||
Net cash provided by operating activities | 366,185 | 158,370 | ||||||||||
Investing Activities: | ||||||||||||
Proceeds from company-owned life insurance | 0 | 0 | ||||||||||
Decrease in restricted cash | (3,276) | (26,097) | ||||||||||
Net cash provided by investing activities | 60,260 | (120,418) | ||||||||||
Financing Activities: | ||||||||||||
Net cash used by financing activities | (383,971) | (356,275) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,927 | (34,343) | ||||||||||
Decrease in cash, cash equivalents, and restricted cash | 48,401 | (352,666) | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 544,432 | 496,031 | 544,432 | 496,031 | 848,697 | |||||||
Cash, cash equivalents, and restricted cash at end of period | 544,432 | 544,432 | 496,031 | |||||||||
As Previously Reported | Senior Notes | 2022 Senior Notes | ||||||||||||
Operating Activities: | ||||||||||||
Restricted cash related to interest on 2022 Senior Notes | (4,375) | |||||||||||
Financing Activities: | ||||||||||||
Restricted cash | (307,875) | |||||||||||
As Previously Reported | York Property Mortgage | ||||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 1,527 | (4,635) | ||||||||||
Agency | ||||||||||||
Revenues: | ||||||||||||
Revenues from contracts with customers | $ 338,648 | $ 96,721 | $ 290,879 | 165,526 | 315,274 | $ 81,264 | $ 301,768 | 111,265 | 891,774 | 809,571 | 724,398 | |
Expenses: | ||||||||||||
Agency direct costs | 184,491 | 150,133 | 125,889 | |||||||||
Agency | As Previously Reported | ||||||||||||
Revenues: | ||||||||||||
Revenues from contracts with customers | 741,580 | 671,833 | ||||||||||
Expenses: | ||||||||||||
Agency direct costs | 82,142 | 73,324 | ||||||||||
ASC 606 | Adjustment | ||||||||||||
Revenues: | ||||||||||||
Revenues | 67,991 | 52,565 | ||||||||||
Expenses: | ||||||||||||
Salaries and related | 0 | 0 | ||||||||||
Total expenses | 67,991 | 52,565 | ||||||||||
Operating (loss) income | 0 | 0 | ||||||||||
Non-operating income | 0 | 0 | ||||||||||
Net (loss) income attributable to Sotheby's | 0 | 0 | ||||||||||
ASC 606 | Agency | Adjustment | ||||||||||||
Revenues: | ||||||||||||
Revenues from contracts with customers | 67,991 | 52,565 | ||||||||||
Expenses: | ||||||||||||
Agency direct costs | 67,991 | 52,565 | ||||||||||
ASU 2017-07 | Adjustment | ||||||||||||
Revenues: | ||||||||||||
Revenues | 0 | 0 | ||||||||||
Expenses: | ||||||||||||
Salaries and related | 4,660 | 7,981 | ||||||||||
Total expenses | 4,660 | 7,981 | ||||||||||
Operating (loss) income | (4,660) | (7,981) | ||||||||||
Non-operating income | 4,660 | 7,981 | ||||||||||
Net (loss) income attributable to Sotheby's | 0 | 0 | ||||||||||
ASU 2017-07 | Agency | Adjustment | ||||||||||||
Revenues: | ||||||||||||
Revenues from contracts with customers | 0 | 0 | ||||||||||
Expenses: | ||||||||||||
Agency direct costs | 0 | 0 | ||||||||||
ASU 2016-15 | Adjustment | ||||||||||||
Operating Activities: | ||||||||||||
Changes in other operating assets and liabilities | (2,100) | (2,182) | ||||||||||
Net cash provided by operating activities | (2,100) | (2,182) | ||||||||||
Investing Activities: | ||||||||||||
Proceeds from company-owned life insurance | 2,100 | 2,182 | ||||||||||
Decrease in restricted cash | 0 | 0 | ||||||||||
Net cash provided by investing activities | 2,100 | 2,182 | ||||||||||
Financing Activities: | ||||||||||||
Net cash used by financing activities | 0 | 0 | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 | ||||||||||
Decrease in cash, cash equivalents, and restricted cash | 0 | 0 | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 0 | 0 | 0 | 0 | |||||||
Cash, cash equivalents, and restricted cash at end of period | 0 | 0 | 0 | |||||||||
ASU 2016-15 | Adjustment | Senior Notes | 2022 Senior Notes | ||||||||||||
Operating Activities: | ||||||||||||
Restricted cash related to interest on 2022 Senior Notes | 0 | |||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 0 | |||||||||||
ASU 2016-15 | Adjustment | York Property Mortgage | ||||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 0 | 0 | ||||||||||
ASU 2016-18 | Adjustment | ||||||||||||
Operating Activities: | ||||||||||||
Changes in other operating assets and liabilities | 0 | 0 | ||||||||||
Net cash provided by operating activities | 4,375 | 0 | ||||||||||
Investing Activities: | ||||||||||||
Proceeds from company-owned life insurance | 0 | 0 | ||||||||||
Decrease in restricted cash | 3,276 | 26,097 | ||||||||||
Net cash provided by investing activities | 3,276 | 26,097 | ||||||||||
Financing Activities: | ||||||||||||
Net cash used by financing activities | 306,348 | 4,635 | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,325 | (1,129) | ||||||||||
Decrease in cash, cash equivalents, and restricted cash | 319,324 | 29,603 | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | $ 379,494 | $ 60,170 | $ 379,494 | 60,170 | 30,567 | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ 379,494 | 379,494 | 60,170 | |||||||||
ASU 2016-18 | Adjustment | Senior Notes | 2022 Senior Notes | ||||||||||||
Operating Activities: | ||||||||||||
Restricted cash related to interest on 2022 Senior Notes | 4,375 | |||||||||||
Financing Activities: | ||||||||||||
Restricted cash | 307,875 | |||||||||||
ASU 2016-18 | Adjustment | York Property Mortgage | ||||||||||||
Financing Activities: | ||||||||||||
Restricted cash | $ (1,527) | $ 4,635 | ||||||||||
ASU 2016-02 | Minimum | Subsequent Event | ||||||||||||
Financing Activities: | ||||||||||||
Right-of-use asset | $ 70,000 | |||||||||||
Lease liability | 70,000 | |||||||||||
ASU 2016-02 | Maximum | Subsequent Event | ||||||||||||
Financing Activities: | ||||||||||||
Right-of-use asset | 80,000 | |||||||||||
Lease liability | $ 80,000 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments (in segment) | 2 |
Revenue from external customers as a percentage of total revenue | 5.00% |
Segment Reporting (Schedule Of
Segment Reporting (Schedule Of Revenue And (Loss) Income Before Taxes by Segment) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 375,147,000 | $ 119,161,000 | $ 345,636,000 | $ 195,796,000 | $ 338,204,000 | $ 180,008,000 | $ 339,859,000 | $ 199,309,000 | $ 1,035,740,000 | $ 1,057,380,000 | $ 857,942,000 |
Interest income | 1,467,000 | 1,184,000 | 1,294,000 | ||||||||
Interest expense | 39,984,000 | 32,218,000 | 30,310,000 | ||||||||
Depreciation and amortization | 27,048,000 | 24,053,000 | 21,817,000 | ||||||||
Segment income before taxes | 132,679,000 | 141,686,000 | 96,734,000 | ||||||||
Art Agency, Partners | Earn Out | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Compensation expense related to earn-out arrangement | 35,000,000 | ||||||||||
Reconciling items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | (6,969,000) | (9,168,000) | (8,518,000) | ||||||||
Interest income | 0 | 0 | 0 | ||||||||
Interest expense | 6,582,000 | 2,740,000 | 2,713,000 | ||||||||
Depreciation and amortization | 0 | 0 | 0 | ||||||||
Segment income before taxes | (12,174,000) | (6,056,000) | (8,403,000) | ||||||||
Agency | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 956,647,000 | 975,548,000 | 779,227,000 | ||||||||
Agency | Art Agency, Partners | Earn Out | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Compensation expense related to earn-out arrangement | 23,900,000 | ||||||||||
Agency | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 956,647,000 | 975,548,000 | 779,227,000 | ||||||||
Interest income | 1,467,000 | 1,184,000 | 1,294,000 | ||||||||
Interest expense | 33,402,000 | 29,478,000 | 27,597,000 | ||||||||
Depreciation and amortization | 26,102,000 | 23,015,000 | 21,081,000 | ||||||||
Segment income before taxes | 111,055,000 | 103,943,000 | 67,284,000 | ||||||||
SFS | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 43,887,000 | 50,937,000 | 52,716,000 | ||||||||
Loan portfolio to debt ratio | 85.00% | ||||||||||
SFS | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 50,856,000 | 60,105,000 | 61,234,000 | ||||||||
Interest income | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 120,000 | 244,000 | 119,000 | ||||||||
Segment income before taxes | 26,036,000 | 33,103,000 | 38,335,000 | ||||||||
All Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 35,206,000 | 30,895,000 | 25,999,000 | ||||||||
All Other | Art Agency, Partners | Earn Out | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Compensation expense related to earn-out arrangement | 11,100,000 | ||||||||||
All Other | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 35,206,000 | 30,895,000 | 25,999,000 | ||||||||
Interest income | 0 | 0 | 0 | ||||||||
Interest expense | 0 | 0 | 0 | ||||||||
Depreciation and amortization | 826,000 | 794,000 | 617,000 | ||||||||
Segment income before taxes | $ 7,762,000 | $ 10,696,000 | $ (482,000) |
Segment Reporting (Reconciliati
Segment Reporting (Reconciliation Of Segment (Loss) Income Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Extinguishment of debt | $ 10,855 | $ 0 | $ 0 | |
Equity in earnings of investees | 3,591 | 2,508 | 3,262 | |
Income before taxes | 132,679 | 141,686 | 96,734 | |
New Credit Agreement | ||||
Segment Reporting Information [Line Items] | ||||
Unamortized fees | 4,000 | $ 4,000 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment (loss) income before taxes | 144,853 | 147,742 | 105,137 | |
Reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Revolving credit facility costs | (14,623) | (22,052) | (20,451) | |
Extinguishment of debt | (10,855) | 0 | 0 | |
Equity in earnings of investees | (3,591) | (2,508) | (3,262) | |
Income before taxes | (12,174) | (6,056) | (8,403) | |
Cost of finance revenues | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | 4,056 | 19,312 | 17,738 | |
Cost of finance revenues | Reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenue | 16,895 | 18,504 | 15,310 | |
Agency | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment (loss) income before taxes | 111,055 | 103,943 | 67,284 | |
Income before taxes | 111,055 | 103,943 | 67,284 | |
SFS | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment (loss) income before taxes | 26,036 | 33,103 | 38,335 | |
Income before taxes | 26,036 | 33,103 | 38,335 | |
All Other | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment (loss) income before taxes | 7,762 | 10,696 | (482) | |
Income before taxes | $ 7,762 | $ 10,696 | $ (482) |
Segment Reporting (Schedule o_2
Segment Reporting (Schedule of Revenues by Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | $ 375,147 | $ 119,161 | $ 345,636 | $ 195,796 | $ 338,204 | $ 180,008 | $ 339,859 | $ 199,309 | $ 1,035,740 | $ 1,057,380 | $ 857,942 |
Intercompany revenue | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | (6,969) | (9,168) | (8,518) | ||||||||
United States | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 484,275 | 423,169 | 399,500 | ||||||||
United Kingdom | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 263,116 | 248,802 | 204,262 | ||||||||
Hong Kong and China | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 176,636 | 227,753 | 149,792 | ||||||||
Switzerland | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 43,351 | 97,246 | 51,327 | ||||||||
France | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | 58,313 | 56,114 | 46,631 | ||||||||
Other countries | Reportable Geographical Components | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenues | $ 17,018 | $ 13,464 | $ 14,948 |
Segment Reporting (Reconcilia_2
Segment Reporting (Reconciliation Of Segment Assets To Consolidated Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | |||
Assets | $ 2,689,088 | $ 3,087,307 | $ 2,504,426 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 2,632,006 | 3,044,708 | 2,489,565 |
Operating Segments | Agency | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,886,986 | 2,395,429 | 1,759,670 |
Operating Segments | SFS | |||
Segment Reporting Information [Line Items] | |||
Assets | 705,779 | 608,713 | 687,649 |
Operating Segments | All Other | |||
Segment Reporting Information [Line Items] | |||
Assets | 39,241 | 40,566 | 42,246 |
Reconciling items | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 57,082 | $ 42,599 | $ 14,861 |
Revenues (Revenues by Segment)
Revenues (Revenues by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Jan. 01, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||||
Interest and related fees | $ 12,942 | $ 11,423 | $ 9,641 | $ 9,881 | $ 13,114 | $ 11,697 | $ 13,359 | $ 12,767 | $ 43,887 | $ 50,937 | $ 52,716 | ||
Total revenues | 375,147 | 119,161 | 345,636 | 195,796 | 338,204 | 180,008 | 339,859 | 199,309 | 1,035,740 | 1,057,380 | 857,942 | ||
Accounts receivable, net | 978,140 | 795,239 | 978,140 | 795,239 | |||||||||
Contract costs | 967,817 | 783,706 | 967,817 | 783,706 | $ 783,706 | $ 424,418 | |||||||
Prepaid Expenses and Other Current Assets | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Contract costs | 10,800 | 9,600 | 10,800 | 9,600 | |||||||||
Consignor paid before payment was collected from the buyer | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Accounts receivable, net | 118,700 | 92,100 | 118,700 | 92,100 | |||||||||
Buyer allowed to take possession before making payment | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Accounts receivable, net | 39,600 | 53,800 | 39,600 | 53,800 | |||||||||
Auction commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 767,881 | 694,501 | 641,220 | ||||||||||
Auction related fees, net | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 29,088 | 32,459 | 16,594 | ||||||||||
Private sale commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 83,263 | 68,158 | 54,984 | ||||||||||
Other Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 11,542 | 14,453 | 11,600 | ||||||||||
Total Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 338,648 | 96,721 | 290,879 | 165,526 | 315,274 | 81,264 | 301,768 | 111,265 | 891,774 | 809,571 | 724,398 | ||
Inventory sales | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | $ 17,968 | $ 6,498 | $ 40,106 | $ 16,236 | $ 6,167 | $ 81,501 | $ 19,937 | $ 71,377 | 80,808 | 178,982 | 62,863 | ||
Advisory revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 6,147 | 5,767 | 6,596 | ||||||||||
License fee and other revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 13,124 | 12,123 | 11,369 | ||||||||||
Total revenue from contracts with customers | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 991,853 | 1,006,443 | 805,226 | ||||||||||
Interest and related fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Interest and related fees | 43,887 | 50,937 | 52,716 | ||||||||||
Agency | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Total revenues | 956,647 | 975,548 | 779,227 | ||||||||||
Agency | Auction commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 767,881 | 694,501 | 641,220 | ||||||||||
Agency | Auction related fees, net | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 29,088 | 32,459 | 16,594 | ||||||||||
Agency | Private sale commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 82,263 | 67,343 | 54,984 | ||||||||||
Agency | Other Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 11,181 | 13,617 | 11,600 | ||||||||||
Agency | Total Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 890,413 | 807,920 | 724,398 | ||||||||||
Agency | Inventory sales | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 66,234 | 167,628 | 54,829 | ||||||||||
Agency | Advisory revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
Agency | License fee and other revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
Agency | Total revenue from contracts with customers | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 956,647 | 975,548 | 779,227 | ||||||||||
Agency | Interest and related fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Interest and related fees | 0 | 0 | 0 | ||||||||||
SFS | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Total revenues | 43,887 | 50,937 | 52,716 | ||||||||||
SFS | Auction commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Auction related fees, net | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Private sale commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Other Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Total Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Inventory sales | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Advisory revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | License fee and other revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Total revenue from contracts with customers | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
SFS | Interest and related fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Interest and related fees | 43,887 | 50,937 | 52,716 | ||||||||||
All Other | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Total revenues | 35,206 | 30,895 | 25,999 | ||||||||||
All Other | Auction commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
All Other | Auction related fees, net | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 0 | 0 | 0 | ||||||||||
All Other | Private sale commissions | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 1,000 | 815 | 0 | ||||||||||
All Other | Other Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 361 | 836 | 0 | ||||||||||
All Other | Total Agency commissions and fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 1,361 | 1,651 | 0 | ||||||||||
All Other | Inventory sales | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 14,574 | 11,354 | 8,034 | ||||||||||
All Other | Advisory revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 6,147 | 5,767 | 6,596 | ||||||||||
All Other | License fee and other revenues | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 13,124 | 12,123 | 11,369 | ||||||||||
All Other | Total revenue from contracts with customers | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Revenues from contracts with customers | 35,206 | 30,895 | 25,999 | ||||||||||
All Other | Interest and related fees | |||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||
Interest and related fees | $ 0 | $ 0 | $ 0 |
Revenues (Contracts with Custom
Revenues (Contracts with Customers) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | Jan. 01, 2017 | |
Revenue from Contract with Customer [Abstract] | ||||
Accounts Receivable | $ 967,817 | $ 783,706 | $ 783,706 | $ 424,418 |
Increase | 184,111 | 359,288 | ||
Client Payables | 997,168 | 996,197 | $ 996,197 | $ 511,876 |
Increase | $ 971 | $ 484,321 |
Notes Receivable (Narrative) (D
Notes Receivable (Narrative) (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Feb. 26, 2018 | Jan. 01, 2018 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Balance of secured loan to refinance auction or private sale receivable | $ 126,200,000 | $ 54,400,000 | |||
Secured loan issued to refinance auction or private sale receivable | $ 130,000,000 | 6,500,000 | |||
Loan-to-value ratio | 50.00% | ||||
Loans past due | $ 14,405,000 | 62,570,000 | |||
Loans more than 90 days past due accruing interest | $ 8,911,000 | 56,087,000 | |||
Past due financing receivables, period | 90 days | ||||
Principal balance | $ 3,854,000 | 0 | |||
Impaired loans | 0 | 0 | |||
Unfunded lending commitment to extend additional credit | 54,000,000 | ||||
Buyer receivables classified within other long term assets | 2,700,000 | ||||
Loan balance | 2,600,000 | 2,778,000 | $ 1,270,000 | ||
Total secured loans | 693,977,000 | 590,609,000 | |||
SFS | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Finance segment secured loans | 693,977,000 | 590,609,000 | |||
Collections of loans originally issued to refinance auction or private sale | $ 58,200,000 | $ 40,800,000 | |||
Loan-to-value ratio | 43.00% | 43.00% | |||
Loan To Value (LTV) Ratio | 60.00% | ||||
Low auction estimate of collateral | $ 1,629,270,000 | $ 1,369,235,000 | |||
Investment balance | 5,600,000 | $ 49,500,000 | |||
Principal balance | $ 3,800,000 | 47,700,000 | |||
Accrued interest | 1,800,000 | $ 1,800,000 | |||
Impaired loans | 0 | 0 | |||
Loan balance | 1,075,000 | 1,253,000 | 1,270,000 | ||
Agency | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan balance | 1,525,000 | 1,525,000 | $ 0 | ||
Total secured loans | 3,100,000 | 2,100,000 | |||
Unsecured loan | 2,100,000 | ||||
Segment Consignor Advances | $ 3,200,000 | ||||
Minimum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan-to-value ratio | 50.00% | ||||
Loan To Value (LTV) Ratio | 51.00% | ||||
Maximum | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan To Value (LTV) Ratio | 60.00% | ||||
Notes receivable past due | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan-to-value ratio | 40.00% | ||||
Accrual of interest | $ 10,600,000 | ||||
Low auction estimate of collateral | 110,200,000 | ||||
Current Assets | SFS | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Finance segment secured loans | $ 99,700,000 | $ 85,100,000 |
Notes Receivable (Schedule of F
Notes Receivable (Schedule of Financing Receivable Credit Quality Indicators) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Aggregate LTV ratio of Finance segment secured loans | 50.00% | |
Loan To Value Ratio Above Fifty Percent | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Finance segment secured loans | $ 264,916 | $ 168,116 |
Low auction estimate of collateral | $ 476,157 | $ 269,063 |
Aggregate LTV ratio of Finance segment secured loans | 56.00% | 62.00% |
SFS | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Finance segment secured loans | $ 693,977 | $ 590,609 |
Low auction estimate of collateral | $ 1,629,270 | $ 1,369,235 |
Aggregate LTV ratio of Finance segment secured loans | 43.00% | 43.00% |
Notes Receivable (Summary Of Ot
Notes Receivable (Summary Of Other Credit Quality Information Regarding Finance Segment Secured Loans) (Details) - USD ($) | Dec. 31, 2018 | Feb. 26, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | |||||
Total secured loans | $ 693,977,000 | $ 590,609,000 | |||
Loans past due | 14,405,000 | 62,570,000 | |||
Loans more than 90 days past due | 8,911,000 | 56,087,000 | |||
Non-accrual loans | 3,854,000 | 0 | |||
Impaired loans | 0 | 0 | |||
Allowance for credit losses for impaired loans | 0 | 0 | |||
Total allowance for credit losses - secured loans | 2,600,000 | 2,778,000 | $ 1,270,000 | ||
SFS | |||||
Segment Reporting Information [Line Items] | |||||
Non-accrual loans | $ 3,800,000 | $ 47,700,000 | |||
Impaired loans | 0 | 0 | |||
Allowance for credit losses based on historical data | 1,075,000 | 1,253,000 | |||
Total allowance for credit losses - secured loans | $ 1,075,000 | $ 1,253,000 | $ 1,270,000 |
Notes Receivable (Activity Rela
Notes Receivable (Activity Related To Allowance For Credit Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses | ||
Allowance for credit losses, beginning balance | $ 2,778 | $ 1,270 |
Change in loan loss provision based on historical data | (178) | (17) |
Change in loan loss provision for impaired loans | 1,525 | |
Allowance for credit losses, ending balance | 2,600 | 2,778 |
SFS | ||
Allowance for Loan and Lease Losses | ||
Allowance for credit losses, beginning balance | 1,253 | 1,270 |
Change in loan loss provision based on historical data | (178) | (17) |
Change in loan loss provision for impaired loans | 0 | |
Allowance for credit losses, ending balance | 1,075 | 1,253 |
Agency | ||
Allowance for Loan and Lease Losses | ||
Allowance for credit losses, beginning balance | 1,525 | 0 |
Change in loan loss provision based on historical data | 0 | 0 |
Change in loan loss provision for impaired loans | 1,525 | |
Allowance for credit losses, ending balance | $ 1,525 | $ 1,525 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | Feb. 18, 2015 | May 23, 1990 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investments | $ 257 | $ 6,542 | $ 2,200 | ||
Carrying value of the Matisse Inventory | 30,000 | 33,900 | |||
Carrying value of investment | $ 47,507 | 46,905 | |||
AMA | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investments | $ 153,000 | ||||
Interest in partnership | 50.00% | ||||
Carrying value of investment | $ 2,700 | 4,800 | |||
RM Auctions | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investments | $ 30,700 | ||||
Interest in partnership | 25.00% | ||||
Carrying value of investment | $ 39,100 | 36,400 | |||
Other Equity Method Investment | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Interest in partnership | 50.00% | ||||
Carrying value of investment | $ 5,700 | 5,700 | |||
Reconciling items | Acquavella Modern Art | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity earnings | 1,200 | 1,700 | 1,300 | ||
Reconciling items | RM Auctions | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity earnings | $ 2,700 | $ 1,200 | $ 2,000 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Land | $ 92,338 | $ 92,591 | |
Buildings and building improvements | 235,469 | 235,222 | |
Leasehold improvements | 82,350 | 84,504 | |
Computer hardware and software | 94,632 | 77,179 | |
Furniture, fixtures and equipment | 81,628 | 81,031 | |
Construction in progress | 34,233 | 9,492 | |
Other | 3,297 | 1,767 | |
Sub-total | 623,947 | 581,786 | |
Less: Accumulated depreciation and amortization | (237,211) | (229,751) | |
Total Fixed Assets, net | 386,736 | 352,035 | |
Depreciation and amortization | 27,048 | 24,053 | $ 21,817 |
Service Life | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | 3,400 | 1,900 | |
Fixed Assets | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 24,000 | $ 22,100 | $ 19,900 |
Acquisition of Art Agency, Pa_3
Acquisition of Art Agency, Partners (Details) | Jan. 11, 2016USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)annual_incremental_payment |
Business Acquisition [Line Items] | ||||||||
Acquisition earn-out consideration (see Note 8) | $ 8,750,000 | $ 17,500,000 | ||||||
Allocation of purchase price: | ||||||||
Goodwill | 55,573,000 | 50,547,000 | $ 50,029,000 | |||||
Goodwill acquired | 5,259,000 | 0 | ||||||
Period over which goodwill is tax deductible | 15 years | |||||||
Agency | ||||||||
Allocation of purchase price: | ||||||||
Goodwill | 49,422,000 | 44,396,000 | 43,878,000 | |||||
Goodwill acquired | 5,259,000 | 0 | ||||||
All Other | ||||||||
Allocation of purchase price: | ||||||||
Goodwill | 6,151,000 | 6,151,000 | 6,151,000 | |||||
Goodwill acquired | 0 | $ 0 | ||||||
Art Agency, Partners | ||||||||
Purchase price: | ||||||||
Initial cash consideration | $ 50,000,000 | |||||||
Working capital adjustment | 1,189,000 | |||||||
Total purchase price | 51,189,000 | |||||||
Allocation of purchase price: | ||||||||
Net working capital acquired | 1,572,000 | |||||||
Fixed assets and other long-term assets | 173,000 | |||||||
Goodwill | 34,490,000 | |||||||
Deferred tax assets | 1,094,000 | |||||||
Total purchase price | 51,189,000 | |||||||
Transaction costs | 800,000 | |||||||
Art Agency, Partners | General and Administrative Expenses | ||||||||
Allocation of purchase price: | ||||||||
Transaction expenses | $ (200,000) | $ (600,000) | ||||||
Art Agency, Partners | Agency | ||||||||
Allocation of purchase price: | ||||||||
Goodwill acquired | $ 28,300,000 | |||||||
Art Agency, Partners | All Other | ||||||||
Allocation of purchase price: | ||||||||
Goodwill acquired | $ 6,200,000 | |||||||
Art Agency, Partners | Customer relationships | ||||||||
Allocation of purchase price: | ||||||||
Intangible assets | 10,800,000 | |||||||
Art Agency, Partners | Employment contracts | ||||||||
Allocation of purchase price: | ||||||||
Intangible assets | $ 3,060,000 | |||||||
Art Agency, Partners | Former Owner | ||||||||
Business Acquisition [Line Items] | ||||||||
Employment agreement term | 5 years | |||||||
Non-compete and non-solicit covenants period after employment agreement | 12 months | |||||||
Art Agency, Partners | Earn Out | ||||||||
Business Acquisition [Line Items] | ||||||||
Compensation expense related to earn-out arrangement | $ 35,000,000 | |||||||
Settlement period for earn-out payments | 4 years | |||||||
Number of annual incremental payments | annual_incremental_payment | 4 | |||||||
Maximum annual payments under contingent earn-out agreement | $ 8,750,000 | |||||||
Contingent consideration, liability, current | 8,750,000 | |||||||
Acquisition earn-out consideration (see Note 8) | $ 8,750,000 | |||||||
Art Agency, Partners | Earn Out | Agency | ||||||||
Business Acquisition [Line Items] | ||||||||
Compensation expense related to earn-out arrangement | $ 23,900,000 | |||||||
Art Agency, Partners | Earn Out | All Other | ||||||||
Business Acquisition [Line Items] | ||||||||
Compensation expense related to earn-out arrangement | $ 11,100,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in Goodwill | ||
Beginning balance | $ 50,547 | $ 50,029 |
Goodwill acquired | 5,259 | 0 |
Foreign currency exchange rate changes | (233) | 518 |
Ending balance | 55,573 | 50,547 |
Agency | ||
Changes in Goodwill | ||
Beginning balance | 44,396 | 43,878 |
Goodwill acquired | 5,259 | 0 |
Foreign currency exchange rate changes | (233) | 518 |
Ending balance | 49,422 | 44,396 |
All Other | ||
Changes in 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 Asset_3
Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Indefinite-lived intangible assets | $ 324 | $ 324 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization | 19,596 | 15,060 |
Accumulated amortization | (6,927) | (3,892) |
Total amortizable intangible assets (net) | 12,669 | 11,168 |
Total intangible assets (net) | $ 12,993 | 11,492 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 8 years | |
Intangible assets subject to amortization | $ 10,800 | 10,800 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets subject to amortization | $ 3,060 | 3,060 |
Non-compete agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 5 years | |
Non-compete agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 6 years | |
Artworks database | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 10 years | |
Intangible assets subject to amortization | $ 1,275 | 1,200 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 4 years | |
Intangible assets subject to amortization | $ 4,461 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Estimated Finite-Lived Intangible Asset Amortization by Fiscal Year Maturity) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 3,000 | $ 2,000 | $ 1,900 |
Finite-Lived Intangible Assets, Net, Amortization Expense | |||
2,019 | 3,186 | ||
2,020 | 3,186 | ||
2,021 | 2,937 | ||
2,022 | 1,573 | ||
2,023 | $ 1,480 |
Pension Arrangements (Retiremen
Pension Arrangements (Retirement Savings Plan Narrative) (Details) - Other pension plan - United States - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Savings Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum annual contributions, percentage | 50.00% | ||
Employer matching, percentage | 3.00% | ||
Accrued discretionary employer contribution | $ 1.6 | $ 2.1 | $ 1.2 |
Contribution expense related to matching and discretionary contributions | $ 3.3 | 3.7 | 2.5 |
Retirement Savings Plan | Senior Vice President-level and above | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum annual contributions, percentage | 25.00% | ||
Retirement Savings Plan | Minimum | Senior Vice President-level and above | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pre-tax compensation, percentage | 2.00% | ||
Deferred Compensation Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accrued discretionary employer contribution | $ 0.5 | $ 0.5 | $ 0.3 |
Accrued discretionary contribution, percentage | 2.00% | 3.00% | 2.00% |
Contribution expense related to matching and discretionary contributions | $ 0.9 | $ 0.9 | $ 0.6 |
Pension Arrangements (Deferred
Pension Arrangements (Deferred Compensation Plan Narrative) (Details) - Other pension plan - United States - Deferred Compensation Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accrued discretionary employer contribution | $ 0.5 | $ 0.5 | $ 0.3 |
Accrued discretionary contribution, percentage | 2.00% | 3.00% | 2.00% |
Contribution expense related to matching and discretionary contributions | $ 0.9 | $ 0.9 | $ 0.6 |
DCP Liability | 28.3 | 25.6 | |
Gains (losses) in deemed participant investments | (1.1) | 3.1 | 1.6 |
Net gains (losses) related to COLI and mutual fund investments | $ (1.6) | $ 2.6 | $ 0.4 |
Pension Arrangements (Assets He
Pension Arrangements (Assets Held In Rabbi Trust) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Assets held in rabbi trust | $ 28,517 | $ 26,240 |
Company-owned variable life insurance | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Assets held in rabbi trust | 23,887 | 25,567 |
Mutual fund investments | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Assets held in rabbi trust | $ 4,630 | $ 673 |
Pension Arrangements (U.K. Defi
Pension Arrangements (U.K. Defined Contribution Plan Narrative) (Details) - Other pension plan - U.K. plan - U.K. Defined Contribution Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Pre-tax compensation, percentage | 3.00% | ||
Employer matching, percentage | 9.00% | ||
Accrued discretionary employer contribution | $ 1.1 | $ 1.1 | $ 1.1 |
Accrued discretionary contribution, percentage | 2.00% | 3.00% | 2.00% |
Contribution expense related to matching and discretionary contributions | $ 4 | $ 4.5 | $ 4.3 |
Pension Arrangements (Change In
Pension Arrangements (Change In Benefit Obligation, Change In Fair Value Of Plan Assets, Funded Status And Amounts Recognized In Consolidated Balance Sheets) (Details) - Pension plan - U.K. Pension Plan - U.K. plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of benefit obligation | |||
Projected benefit obligation at beginning of year | $ 345,876 | $ 327,619 | |
Interest cost | 7,597 | 8,053 | $ 9,817 |
Actuarial gain | (17,745) | (781) | |
Prior service cost | 967 | 0 | |
Benefits paid | (9,913) | (8,508) | |
Settlement payments | 0 | (11,880) | |
Foreign currency exchange rate changes | (17,065) | 31,373 | |
Benefit obligation at end of year | 309,717 | 345,876 | 327,619 |
Reconciliation of plan assets | |||
Fair value of plan assets at beginning of year | 454,702 | 406,195 | |
Actual return on plan assets | (8,832) | 28,827 | |
Benefits paid | (9,913) | (8,508) | |
Settlement payments | 0 | (11,880) | |
Foreign currency exchange rate changes | (22,701) | 40,068 | |
Fair value of plan assets at end of year | 413,256 | 454,702 | $ 406,195 |
Net pension asset | $ 103,539 | $ 108,826 |
Pension Arrangements (Benefit O
Pension Arrangements (Benefit Obligation, Plan Assets, and Funded Status Narrative) (Details) - Pension plan - U.K. plan - U.K. Pension Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Projected benefit obligation increase (decrease) | $ (36,200) | $ 18,300 |
Percent change | 10.00% | 6.00% |
Actuarial gain | $ (17,745) | $ (781) |
Prior service cost | 967 | 0 |
Settlement payments | 0 | (11,880) |
Accumulated benefit obligation | $ 309,700 | $ 345,800 |
Pension Arrangements (Component
Pension Arrangements (Components Of Net Pension Benefits Related To U.K. Pension Plan Assets) (Details) - Pension plan - U.K. plan - U.K. Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 0 | $ 0 | $ 1,086 |
Interest cost | 7,597 | 8,053 | 9,817 |
Prior service cost | 0 | 60 | 0 |
Expected return on plan assets | (11,131) | (14,159) | (17,798) |
Amortization of actuarial loss | 481 | 1,139 | 0 |
Amortization of prior service cost | (102) | (97) | 0 |
Settlement loss | 0 | 344 | 0 |
Net pension benefit | $ (3,155) | $ (4,660) | $ (6,895) |
Pension Arrangements (Other Com
Pension Arrangements (Other Comprehensive Income (Loss) Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension plan | U.K. plan | U.K. Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net unrecognized gains (losses) from defined benefit pension plan, net of tax of $xx, $6,445, and ($2,447) | $ (1,800) | $ 13,300 | $ (6,500) |
Net loss included in accumulated other comprehensive loss | $ (2,400) | (1,000) | |
Threshold for recognizing net actuarial gains (losses) | 10.00% | ||
Expected remaining service lives | 28 years 4 months 24 days | ||
Market value of plan assets changes period | 5 years | ||
Prior service cost | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Other comprehensive (loss) income before reclassifications, net of tax | $ (774) | $ 0 | $ 0 |
Pension Arrangements (Benefit_2
Pension Arrangements (Benefit Obligation And Net Pension Benefit) (Details) - U.K. plan - U.K. Pension Plan | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Benefit Obligation | |||
Weighted average discount rate | 2.90% | 2.50% | |
Net Pension Benefit | |||
Weighted average discount rate - service cost | 3.80% | ||
Weighted average discount rate - interest cost | 2.30% | 2.40% | 3.40% |
Weighted average rate of compensation increase | 4.10% | ||
Weighted average expected long-term rate of return on plan assets | 2.80% | 3.80% | 5.20% |
Pension Arrangements (Plan Asse
Pension Arrangements (Plan Assets Narrative) (Details) - Pension plan - U.K. plan - U.K. Pension Plan - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Contribution | $ 24.2 | ||||
Proceeds from sale of debt securities | $ 133 | ||||
Growth assets | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Target allocation of plan assets (as a percent) | 17.00% | 23.00% | 40.00% | ||
Debt securities | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Target allocation of plan assets (as a percent) | 83.00% | 77.00% | 60.00% |
Pension Arrangements (Compone_2
Pension Arrangements (Components Of U.K. Pension Plan Assets) (Details) - Pension plan - U.K. plan - U.K. Pension Plan - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 413,256 | $ 454,702 | $ 406,195 |
Growth assets | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 69,617 | $ 104,735 | |
Total debt securities, % of total | 16.80% | 23.00% | |
Total debt securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 185,223 | $ 261,232 | |
Total debt securities, % of total | 44.80% | 57.50% | |
Corporate | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 37,332 | $ 41,804 | |
Total debt securities, % of total | 9.00% | 9.20% | |
Index-linked | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 147,891 | $ 219,428 | |
Total debt securities, % of total | 35.80% | 48.30% | |
Buy-in annuity contract | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 131,416 | $ 0 | |
Total debt securities, % of total | 31.80% | 0.00% | |
Real estate mutual funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 33 | $ 3,233 | |
Total debt securities, % of total | 0.00% | 0.60% | |
Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 26,967 | $ 85,502 | |
Total debt securities, % of total | 6.50% | 18.80% |
Pension Arrangements (Fair Valu
Pension Arrangements (Fair Value Measurement Information U.K. Pension Plan Assets) (Details) - Pension plan - U.K. plan - U.K. Pension Plan - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 413,256 | $ 454,702 | $ 406,195 |
Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 280,498 | ||
Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 1,342 | ||
Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 131,416 | ||
Growth assets | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 69,617 | 104,735 | |
Growth assets | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 69,617 | ||
Growth assets | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Growth assets | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Total debt securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 185,223 | 261,232 | |
Total debt securities | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 183,914 | ||
Total debt securities | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 1,309 | ||
Total debt securities | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Corporate | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 37,332 | 41,804 | |
Corporate | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 37,332 | ||
Corporate | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Corporate | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Index-linked | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 147,891 | 219,428 | |
Index-linked | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 146,582 | ||
Index-linked | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 1,309 | ||
Index-linked | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Buy-in annuity contract | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 131,416 | 0 | |
Buy-in annuity contract | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Buy-in annuity contract | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Buy-in annuity contract | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 131,416 | ||
Real estate mutual funds | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 33 | 3,233 | |
Real estate mutual funds | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Real estate mutual funds | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 33 | ||
Real estate mutual funds | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Cash and cash equivalents | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 26,967 | $ 85,502 | |
Cash and cash equivalents | Quoted Prices in Active Markets (Level 1) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 26,967 | ||
Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | 0 | ||
Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Total fair value of plan assets | $ 0 |
Pension Arrangements (Buy-in An
Pension Arrangements (Buy-in Annuity Contract) (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Jul. 31, 2018 | Dec. 31, 2018 | |
Pension plan | U.K. plan | U.K. Pension Plan | Buy-in annuity contract | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Purchase of buy-in annuity contract | $ 133 | $ 3.6 |
Pension Arrangements (Estimated
Pension Arrangements (Estimated Future Benefit Payments) (Details) - Pension plan - U.K. Pension Plan - U.K. plan $ in Thousands | Dec. 31, 2018USD ($) |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,019 | $ 8,343 |
2,020 | 9,227 |
2,021 | 11,393 |
2,022 | 10,776 |
2,023 | 11,854 |
2024 to 2028 | $ 65,289 |
Debt (Revolving Credit Facility
Debt (Revolving Credit Facility) (Details) - New Credit Agreement - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | 4,300,000 | |||
Unamortized fees | $ 4,000,000 | $ 4,000,000 |
Debt (Schedule of Line of Credi
Debt (Schedule of Line of Credit Facilities) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 02, 2017 | |
Line of Credit Facility [Line Items] | ||||
Borrowings outstanding | $ 280,000,000 | $ 196,500,000 | ||
New Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 1,100,000,000 | 1,100,000,000 | $ 1,335,000,000 | |
Borrowing base | 857,773,000 | 605,927,000 | 734,464,000 | |
Borrowings outstanding | 280,000,000 | 196,500,000 | 565,000,000 | |
Available borrowing capacity | 577,773,000 | 409,427,000 | 169,464,000 | |
Average borrowings outstanding | $ 106,181,000 | $ 479,367,000 | $ 534,433,000 | |
Decrease to borrowing capacity | $ 235,000,000 |
Debt (Summary Of Long-Term Debt
Debt (Summary Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt [Line Items] | ||
Long-term debt, net | $ 638,786 | $ 653,003 |
York Property Mortgage | ||
Debt [Line Items] | ||
Convertible notes, net of debt issuance costs | 257,284 | 270,556 |
Less current portion | (13,604) | (11,930) |
Unamortized debt issuance costs | 3,559 | 4,545 |
Current unamortized debt issuance costs | 1,010 | 1,010 |
Senior Notes | 2022 Senior Notes | ||
Debt [Line Items] | ||
Convertible notes, net of debt issuance costs | 0 | 297,002 |
Less current portion | 0 | (297,002) |
Unamortized debt issuance costs | 0 | 2,998 |
Current unamortized debt issuance costs | 0 | 2,998 |
Senior Notes | 2025 Senior Notes | ||
Debt [Line Items] | ||
Convertible notes, net of debt issuance costs | 395,106 | 394,377 |
Unamortized debt issuance costs | $ 4,894 | $ 5,623 |
Debt (York Property Mortgage) (
Debt (York Property Mortgage) (Details) - USD ($) | Jul. 02, 2018 | Jul. 03, 2017 | Jul. 01, 2017 | Jul. 01, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Jun. 20, 2017 |
Debt [Line Items] | |||||||||
Equity | $ 441,494,000 | $ 616,940,000 | |||||||
Annual prepayments | 14,258,000 | 39,667,000 | $ 7,302,000 | ||||||
Mortgages | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 32,000,000 | ||||||||
Mortgages | New Mortgage Loan | |||||||||
Debt [Line Items] | |||||||||
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 | 700,000 | $ 3,100,000 | |||||||
Mortgages | York Property Mortgage | |||||||||
Debt [Line Items] | |||||||||
Debt term | 7 years | 7 years | |||||||
Principal amount | $ 325,000,000 | ||||||||
Outstanding balance | $ 260,800,000 | ||||||||
Amortization period | 25 years | ||||||||
Minimum net worth required for compliance | $ 325,000,000 | $ 425,000,000 | |||||||
Mortgages | York Property Mortgage | LIBOR | |||||||||
Debt [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 2.25% | ||||||||
Mortgages | Maximum | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | 25,000,000 | ||||||||
Parent Company | York Property Mortgage Second Amendment | |||||||||
Debt [Line Items] | |||||||||
Equity | $ 1,300,000,000 | ||||||||
Standard & Poor's, B Plus Rating | Mortgages | York Property Mortgage | |||||||||
Debt [Line Items] | |||||||||
Required debt service | 6 months | ||||||||
Standard & Poor's, B Rating | Mortgages | York Property Mortgage | |||||||||
Debt [Line Items] | |||||||||
Required debt service | 12 months | ||||||||
Cash | Mortgages | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | 25,000,000 | ||||||||
Restricted Cash | Mortgages | |||||||||
Debt [Line Items] | |||||||||
Annual prepayments | $ 6,250,000 | $ 7,000,000 |
Debt (Senior Unsecured Debt) (D
Debt (Senior Unsecured Debt) (Details) - USD ($) | Dec. 12, 2017 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 27, 2012 |
Debt [Line Items] | ||||||
Accrued interest | $ 43,600,000 | $ 51,800,000 | $ 44,500,000 | |||
Loss on extinguishment | 10,855,000 | 0 | $ 0 | |||
2022 Senior Notes | Senior Notes | ||||||
Debt [Line Items] | ||||||
Principal amount | $ 300,000,000 | |||||
Debt instrument stated interest percentage | 5.25% | |||||
Accrued interest | 4,400,000 | |||||
Call premium | $ 7,900,000 | $ 7,900,000 | ||||
Write off of debt issuance cost | 3,000,000 | |||||
Loss on extinguishment | $ 10,900,000 | |||||
2025 Senior Notes | Senior Notes | ||||||
Debt [Line Items] | ||||||
Principal amount | $ 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 | $ 366,000,000 | |||||
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 (Aggregate Future Principa
Debt (Aggregate Future Principal And Interest Payments) (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2021 |
Debt Instruments [Abstract] | |||||
2,019 | $ 47,035 | ||||
2,020 | 47,267 | ||||
2,021 | 46,845 | ||||
2,022 | 241,095 | ||||
2,023 | 299,500 | ||||
Debt [Line Items] | |||||
Annual prepayments | $ 14,258 | $ 39,667 | $ 7,302 | ||
Mortgages | |||||
Debt [Line Items] | |||||
Annual prepayments | $ 32,000 | ||||
Scenario, Forecast | Mortgages | |||||
Debt [Line Items] | |||||
Annual prepayments | $ 6,250 |
Debt (Interest Paid) (Details)
Debt (Interest Paid) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instruments [Abstract] | |||
Interest paid | $ 43,600 | $ 51,800 | $ 44,500 |
Debt issuance and other borrowing costs | $ (4,482) | $ (5,729) | $ (320) |
Derivative Financial Instrume_3
Derivative Financial Instruments (Schedule of Fair Value Information Related to Derivative Financial Instruments) (Details) - Designated as Hedging Instruments - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 462 | $ 339 |
Liabilities | 1,225 | 5,923 |
Cash Flow Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 339 |
Liabilities | 1,225 | 2,167 |
Cash Flow Hedges | Interest rate swap | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 339 | |
Cash Flow Hedges | Interest rate collar | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | 40 | 666 |
Cash Flow Hedges | Interest rate collar | Other Long-Term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | 1,185 | 1,501 |
Net Investment Hedges | Foreign exchange contracts | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 462 | |
Net Investment Hedges | Foreign exchange contracts | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ 3,756 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Jul. 01, 2017 | Nov. 21, 2016 | Jul. 01, 2015 | Jun. 30, 2017 | Sep. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2021 |
Derivative [Line Items] | |||||||||||
Realized net gain (loss) | $ 1,747 | $ (29,110) | $ 3,308 | ||||||||
Initial period under interest rate protection agreements | 2 years | ||||||||||
Reduction to notional amount of derivative | $ 57,000 | ||||||||||
Annual prepayments | $ 14,258 | 39,667 | 7,302 | ||||||||
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 | Scenario, Forecast | Minimum | |||||||||||
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 | ||||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | $ 200 | ||||||||||
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 collar | |||||||||||
Derivative [Line Items] | |||||||||||
Notional value of derivative | $ 260,800 | ||||||||||
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 | 4.33% | ||||||||||
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% | ||||||||||
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% | ||||||||||
Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Notional value of derivative | $ 187,600 | ||||||||||
Forward exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Current derivative liability | 800 | ||||||||||
Designated as Hedging Instruments | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | 218 | (622) | 0 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 24 | 593 | 813 | ||||||||
Net Investment Hedges | Designated as Hedging Instruments | Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Aggregate notional value | 202,000 | 213,800 | |||||||||
Realized net gain (loss) | (1,900) | 29,100 | |||||||||
Notional value of derivative | 55,700 | ||||||||||
Net Investment Hedges | Non-operating income | Designated as Hedging Instruments | Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | 58 | 0 | 0 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | 0 | 0 | ||||||||
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 | 160 | (622) | 0 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 24 | 593 | 813 | ||||||||
Cash flow hedges | Non-operating income | Designated as Hedging Instruments | Interest rate swap | |||||||||||
Derivative [Line Items] | |||||||||||
Reduction in notional amount of derivative reclassified from Accumulated Other Comprehensive Loss into Net Income | 160 | 0 | 0 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | 0 | 0 | ||||||||
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 | 0 | (622) | 0 | |||||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | $ 0 | $ 0 | ||||||||
Accounts Payable and Accrued Liabilities | Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative assets (liabilities), at fair value | (1,500) | ||||||||||
Prepaid Expenses and Other Current Assets | Foreign exchange contracts | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative assets (liabilities), at fair value | $ 1,700 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Summary of the Effect of the Derivative Financial Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest rate swap | |||||
Derivative Instruments | |||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | $ 200 | ||||
Designated as Hedging Instruments | |||||
Derivative Instruments | |||||
Gain (Loss) Recognized in Other Comprehensive (Loss) Income - Effective Portion | $ 2,361 | $ (1,639) | $ 16,447 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 24 | 593 | 813 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | (218) | 622 | 0 | ||
Designated as Hedging Instruments | Cash Flow Hedges | |||||
Derivative Instruments | |||||
Gain (Loss) Recognized in Other Comprehensive (Loss) Income - Effective Portion | 535 | 1,420 | (171) | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 24 | 593 | 813 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | (160) | 622 | 0 | ||
Designated as Hedging Instruments | Cash Flow Hedges | Interest rate swap | |||||
Derivative Instruments | |||||
Gain (Loss) Recognized in Other Comprehensive (Loss) Income - Effective Portion | 95 | 201 | (704) | ||
Designated as Hedging Instruments | Cash Flow Hedges | Interest rate swap | Interest Expense | |||||
Derivative Instruments | |||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | (145) | 16 | 813 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 0 | 0 | ||
Designated as Hedging Instruments | Cash Flow Hedges | Interest rate swap | Non-operating income | |||||
Derivative Instruments | |||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | 0 | 0 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | (160) | 0 | 0 | ||
Designated as Hedging Instruments | Cash Flow Hedges | Interest rate collar | |||||
Derivative Instruments | |||||
Gain (Loss) Recognized in Other Comprehensive (Loss) Income - Effective Portion | 440 | 1,219 | 533 | ||
Designated as Hedging Instruments | Cash Flow Hedges | Interest rate collar | Interest Expense | |||||
Derivative Instruments | |||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 169 | 577 | 0 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | 0 | 0 | 0 | ||
Designated as Hedging Instruments | 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 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | $ (600) | 0 | 622 | 0 | |
Designated as Hedging Instruments | Net Investment Hedges | Foreign exchange contracts | |||||
Derivative Instruments | |||||
Gain (Loss) Recognized in Other Comprehensive (Loss) Income - Effective Portion | 1,826 | (3,059) | 16,618 | ||
Designated as Hedging Instruments | Net Investment Hedges | Foreign exchange contracts | Non-operating income | |||||
Derivative Instruments | |||||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Effective Portion | 0 | 0 | 0 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss into Net Income - Ineffective Portion | $ (58) | $ 0 | $ 0 |
Sale of Pink Diamond (Details)
Sale of Pink Diamond (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Apr. 30, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | 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 | ||||||||||||
Revenues | $ 375,147 | $ 119,161 | $ 345,636 | $ 195,796 | $ 338,204 | $ 180,008 | $ 339,859 | $ 199,309 | $ 1,035,740 | $ 1,057,380 | $ 857,942 | ||
Inventory | $ 43,635 | $ 74,483 | $ 43,635 | 74,483 | |||||||||
Pink Diamond | |||||||||||||
Product Information [Line Items] | |||||||||||||
Revenues | $ 71,200 | ||||||||||||
Inventory | $ 68,400 | ||||||||||||
Gain on sale of Pink Diamond | 400 | ||||||||||||
Cost of revenue | $ 70,800 |
Supplemental Consolidated Bal_3
Supplemental Consolidated Balance Sheet Information (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 25,672 | $ 25,418 |
Derivative financial instruments | 462 | 339 |
Insurance recoveries | 4,353 | 0 |
Other | 8,144 | 6,253 |
Total Prepaid and Other Current Assets | $ 38,631 | $ 32,010 |
Supplemental Consolidated Bal_4
Supplemental Consolidated Balance Sheet Information (Schedule of Other Long-Term Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Defined benefit pension plan asset (see Note 10) | $ 103,539 | $ 108,826 |
Equity method investments (see Note 6) | 47,507 | 46,905 |
Trust assets related to deferred compensation liability (see Note 10) | 28,517 | 26,240 |
Restricted cash | 16,819 | 17,916 |
Insurance recoveries | 13,882 | 12,242 |
Other | 16,396 | 15,479 |
Total Other Long-Term Assets | $ 226,660 | $ 227,608 |
Supplemental Consolidated Bal_5
Supplemental Consolidated Balance Sheet Information (Schedule of Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred compensation liability (see Note 10) | $ 28,255 | $ 25,614 |
Acquisition earn-out consideration (see Note 8) | 8,750 | 17,500 |
Interest rate collar liability (see Note 12) | 1,185 | 1,501 |
Other | 7,327 | 6,809 |
Total Other Long-Term Liabilities | $ 45,517 | $ 51,424 |
Supplemental Consolidated Cas_3
Supplemental Consolidated Cash Flow Information - Schedule of Restricted Cash Classified Within Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 178,579 | $ 544,432 | ||
Total restricted cash | 21,655 | 379,494 | ||
Cash, cash equivalents, and restricted cash | 200,234 | 923,926 | $ 556,201 | $ 879,264 |
Current Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 4,836 | 361,578 | ||
Other Long-Term Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 16,819 | 17,916 | ||
Consignor funds held in legally segregated accounts | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 3,938 | 46,029 | ||
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 | ||
Cash Management Account related to the York Property Mortgage (see Note 8) | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | 716 | 3,107 | ||
Other | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total restricted cash | $ 182 | $ 192 |
Supplemental Consolidated Cas_4
Supplemental Consolidated Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
(Increase) decrease in: | |||
Prepaid expenses and other current assets | $ (6,244) | $ 17,160 | $ (14,510) |
Other long-term assets | (3,537) | (12,449) | (12,188) |
Income tax receivables and deferred income tax assets | (15,003) | (33,532) | 2,395 |
Increase (decrease) in: | |||
Accrued income taxes and deferred income tax liabilities | 7,826 | 35,421 | 14,879 |
Accounts payable and accrued liabilities and other liabilities | (3,703) | (14,189) | 17,297 |
Total changes in other operating assets and liabilities | $ (20,661) | $ (7,589) | $ 7,873 |
Shareholders' Equity and Divi_3
Shareholders' Equity and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 13, 2018 | Sep. 12, 2018 | Sep. 11, 2018 | Oct. 03, 2016 | Nov. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Sep. 30, 2018 |
Dividends Payable [Line Items] | ||||||||||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares outstanding | 46,346,863 | 52,461,996 | 46,346,863 | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | ||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |||||||
Initial purchase price | $ 95,000 | |||||||||
Treasury stock acquired (in shares) | 1,792,453 | 2,050,000 | 6,473,000 | 961,000 | 13,144,000 | 20,578,000 | ||||
Aggregate purchase price | $ 85,500 | $ 284,733 | $ 44,495 | $ 359,885 | $ 689,113 | |||||
Cost per share of stock acquired (usd per share) | $ 47.70 | $ 36 | $ 43.99 | $ 46.32 | $ 27.38 | $ 33.49 | ||||
Equity | $ 441,494 | $ 616,940 | $ 441,494 | |||||||
Stock repurchased during period, value | $ 73,800 | |||||||||
Ownership percentage in Sotheby's outstanding Common Stock prior to sale | 8.50% | |||||||||
September 2018 ASR Agreement | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Treasury stock acquired (in shares) | 325,927 | 2,118,380 | ||||||||
Cost per share of stock acquired (usd per share) | $ 44.85 | |||||||||
September 2018 ASR Agreement | Treasury Stock | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Equity | $ 9,500 | $ 85,500 | ||||||||
September 2018 ASR Agreement | Additional Paid-In Capital | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Equity | $ 9,500 | |||||||||
December 2018 ASR Agreement | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Initial purchase price | $ 70,000 | |||||||||
Treasury stock acquired (in shares) | 1,605,938 | |||||||||
Aggregate purchase price | $ 59,500 | |||||||||
Cost per share of stock acquired (usd per share) | $ 37.05 | |||||||||
December 2018 ASR Agreement | Treasury Stock | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Equity | $ 59,500 | |||||||||
December 2018 ASR Agreement | Additional Paid-In Capital | ||||||||||
Dividends Payable [Line Items] | ||||||||||
Equity | $ 10,500 |
Shareholders' Equity and Divi_4
Shareholders' Equity and Dividends (Common Stock Share Repurchase Program) (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 12, 2018 | Sep. 11, 2018 | Oct. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 |
Shareholders' Equity and Dividends [Abstract] | |||||||
Shares repurchased (in shares) | 1,792,453 | 2,050,000 | 6,473,000 | 961,000 | 13,144,000 | 20,578,000 | |
Aggregate purchase price | $ 85,500 | $ 284,733 | $ 44,495 | $ 359,885 | $ 689,113 | ||
Average price per share (usd per share) | $ 47.70 | $ 36 | $ 43.99 | $ 46.32 | $ 27.38 | $ 33.49 |
Shareholders' Equity and Divi_5
Shareholders' Equity and Dividends (Special Dividend) (Details) - USD ($) | Mar. 17, 2014 | Jan. 29, 2014 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Dividends Payable [Line Items] | |||||
Cash dividend equivalents paid on share-based payments | $ 0 | $ 2,000,000 | $ 1,400,000 | ||
Special Dividend | |||||
Dividends Payable [Line Items] | |||||
Dividends, common stock | $ 300,000,000 | ||||
Dividends declared (usd per share) | $ 4.34 | ||||
Share-based compensation based on special dividends | $ 10,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Changes in Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | $ 616,755 | $ 505,418 | $ 806,427 |
Reclassifications from other comprehensive (loss) income | 120 | 2,365 | 813 |
Total other comprehensive income (loss) | (9,578) | 27,892 | (24,154) |
Balance at end of period | 441,339 | 616,755 | 505,418 |
Accumulated Other Comprehensive Loss | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (62,466) | (90,358) | (66,204) |
Total other comprehensive income (loss) | (9,578) | 27,892 | (24,154) |
Balance at end of period | (72,044) | (62,466) | (90,358) |
Currency Translation Adjustments | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (74,505) | (89,478) | (52,279) |
Other comprehensive (loss) income before reclassifications, net of tax | (9,546) | 14,973 | (37,199) |
Total other comprehensive income (loss) | (9,546) | 14,973 | (37,199) |
Balance at end of period | (84,051) | (74,505) | (89,478) |
Other comprehensive income (loss) before reclassifications, tax | (498) | 1,760 | (13,113) |
Derivative Financial Instruments | Cash Flow Hedges | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (1,029) | (3,664) | (4,306) |
Other comprehensive (loss) income before reclassifications, net of tax | 535 | 1,420 | (171) |
Reclassifications from other comprehensive (loss) income | (136) | 1,215 | 813 |
Total other comprehensive income (loss) | 399 | 2,635 | 642 |
Balance at end of period | (630) | (1,029) | (3,664) |
Other comprehensive income (loss) before reclassifications, tax | 177 | 888 | (106) |
Reclassification from AOCI, current period, tax | (106) | 753 | 502 |
Derivative Financial Instruments | Net Investment Hedges | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | 13,559 | 16,618 | 0 |
Other comprehensive (loss) income before reclassifications, net of tax | 1,826 | (3,059) | 16,618 |
Reclassifications from other comprehensive (loss) income | (58) | 0 | 0 |
Total other comprehensive income (loss) | 1,768 | (3,059) | 16,618 |
Balance at end of period | 15,327 | 13,559 | 16,618 |
Other comprehensive income (loss) before reclassifications, tax | 635 | (1,885) | 10,354 |
Reclassification from AOCI, current period, tax | (20) | 0 | 0 |
Defined Benefit Pension Items | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Balance at beginning of period | (491) | (13,834) | (9,619) |
Other comprehensive (loss) income before reclassifications, net of tax | (2,513) | 12,193 | (4,215) |
Reclassifications from other comprehensive (loss) income | 314 | 1,150 | 0 |
Total other comprehensive income (loss) | (2,199) | 13,343 | (4,215) |
Balance at end of period | (2,690) | (491) | (13,834) |
Currency translation adjustments | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Other comprehensive (loss) income before reclassifications, net of tax | 36 | (1,084) | 2,300 |
Net actuarial (loss) gain | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Other comprehensive (loss) income before reclassifications, net of tax | (1,775) | 13,277 | (6,515) |
Other comprehensive income (loss) before reclassifications, tax | (364) | 2,719 | (1,427) |
Prior service cost | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Other comprehensive (loss) income before reclassifications, net of tax | (774) | 0 | 0 |
Reclassifications from other comprehensive (loss) income | (85) | (80) | 0 |
Other comprehensive income (loss) before reclassifications, tax | (157) | 0 | 0 |
Reclassification from AOCI, current period, tax | (17) | (17) | 0 |
Actuarial loss amortization | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Reclassifications from other comprehensive (loss) income | 399 | 945 | 0 |
Reclassification from AOCI, current period, tax | 82 | 194 | 0 |
Settlement cost | |||
Changes in Accumulated Other Comprehensive Income (Loss) | |||
Reclassifications from other comprehensive (loss) income | 0 | 285 | 0 |
Reclassification from AOCI, current period, tax | $ 0 | $ 59 | $ 0 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Reclassifications) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification adjustments, net of tax | $ 120 | $ 2,365 | $ 813 |
Derivative Financial Instruments | Cash Flow Hedges | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | 106 | (753) | (502) |
Reclassification adjustments, net of tax | (136) | 1,215 | 813 |
Derivative Financial Instruments | Net Investment Hedges | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | 20 | 0 | 0 |
Reclassification adjustments, net of tax | (58) | 0 | 0 |
Defined Benefit Pension Items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification adjustments, net of tax | 314 | 1,150 | 0 |
Prior service cost amortization | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | 17 | 17 | 0 |
Reclassification adjustments, net of tax | (85) | (80) | 0 |
Settlement loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | 0 | (59) | 0 |
Reclassification adjustments, net of tax | 0 | 285 | 0 |
Actuarial loss amortization | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | (82) | (194) | 0 |
Reclassification adjustments, net of tax | 399 | 945 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss | Derivative Financial Instruments | Cash Flow Hedges | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | (242) | 1,968 | 1,315 |
Tax effect | 106 | (753) | (502) |
Reclassification adjustments, net of tax | (136) | 1,215 | 813 |
Reclassification out of Accumulated Other Comprehensive Loss | Derivative Financial Instruments | Net Investment Hedges | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | (78) | 0 | 0 |
Tax effect | 20 | 0 | 0 |
Reclassification adjustments, net of tax | (58) | 0 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss | Defined Benefit Pension Items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | 379 | 1,386 | 0 |
Tax effect | (65) | (236) | 0 |
Reclassification adjustments, net of tax | 314 | 1,150 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss | Prior service cost amortization | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | (102) | (97) | 0 |
Reclassification out of Accumulated Other Comprehensive Loss | Settlement loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | 0 | 344 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss | Actuarial loss amortization | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Reclassification before tax | $ 481 | $ 1,139 | $ 0 |
Income Taxes (Summary Of Signif
Income Taxes (Summary Of Significant Components Of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (loss) before taxes: | |||
Domestic | $ 5,355 | $ 3,636 | $ (38,567) |
Foreign | 127,324 | 138,050 | 135,301 |
Income before taxes | 132,679 | 141,686 | 96,734 |
Income tax (benefit) expense—current: | |||
Domestic | (17,510) | 24,427 | 18,443 |
State and local | 2,987 | 1,492 | 1,766 |
Foreign | 44,536 | 27,481 | 29,904 |
Sub-total | 30,013 | 53,400 | 50,113 |
Income tax (benefit) expense—deferred: | |||
Domestic | (2,787) | (34,501) | (19,114) |
State and local | (252) | 1,285 | (1,034) |
Foreign | 678 | 5,231 | (4,008) |
Sub-total | (2,361) | (27,985) | (24,156) |
Income tax expense, Total | $ 27,652 | $ 25,415 | $ 25,957 |
Income Taxes (Summary Of Compon
Income Taxes (Summary Of Components Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Asset provisions and liabilities | $ 8,992 | $ 4,832 |
Inventory writedowns | 2,061 | 3,408 |
Tax loss and credit carryforwards | 4,549 | 3,908 |
Difference between book and tax basis of depreciable and amortizable assets | 11,438 | 20,218 |
Share-based payments and deferred compensation | 19,012 | 15,130 |
Sub-total | 46,052 | 47,496 |
Valuation allowance | (2,360) | (3,194) |
Total deferred tax assets | 43,692 | 44,302 |
Deferred tax liabilities: | ||
Difference between book and tax basis of other assets and liabilities | 1,720 | 859 |
Pension obligations | 16,521 | 16,280 |
Basis differences in equity method investments | 371 | 1,269 |
Undistributed earnings of foreign subsidiaries | 2,614 | 2,571 |
Bond redemption costs | 0 | 2,812 |
Total deferred tax liabilities | 21,226 | 23,791 |
Total net deferred tax assets | $ 22,466 | $ 20,511 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Deferred tax assets, foreign and state loss and tax credit carryforwards | $ 4,500 | $ 4,500 | |||
Valuation allowance | $ 3,194 | $ 2,360 | $ 3,194 | 2,360 | |
Effective income tax rate | 20.80% | 17.90% | 26.80% | ||
Tax settlement | $ 4,800 | ||||
Reverse of a liability for a previously uncertain tax position | $ 7,000 | ||||
Income tax expense (benefit) adjustment | 1,200 | 8,700 | 7,500 | ||
Provisional income tax expense, unremitted and untaxed earnings of our foreign subsidiaries | 40,400 | 36,400 | 36,400 | ||
Provisional income tax expense, unremitted and untaxed earnings of our foreign subsidiaries, adjustment | 4,000 | ||||
Provisional non-cash income tax expense, deferred tax assets | 19,800 | 16,300 | |||
Provisional non-cash income tax expense, deferred tax assets. adjustment | 2,200 | ||||
Income tax benefit from executive compensation | 1,300 | ||||
Non-cash income tax benefit, deferred tax liabilities | $ 59,000 | 60,200 | |||
Non-cash income tax benefit, deferred tax liabilities, adjustment | 1,200 | ||||
Deferred tax liability not recognized | 2,600 | $ 2,600 | |||
Net income tax payments | $ 36,800 | $ 52,300 | $ 32,400 |
Income Taxes (Summary Of Effect
Income Taxes (Summary Of Effective Income Tax Rate) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Tax Cuts and Jobs Act, Measurement Period Adjustment, Income Tax Expense (Benefit) | $ 1.2 | $ 8.7 | $ 7.5 | ||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% | ||
State and local taxes, net of federal tax benefit | 1.60% | 0.80% | 0.50% | ||
Foreign taxes at rates different from U.S. rates | (1.20%) | (13.50%) | (25.00%) | ||
U.S. taxes on foreign earnings | 1.80% | 1.20% | 9.90% | ||
Effect of enacted tax legislation | (6.60%) | 0.80% | (0.10%) | ||
Changes in tax reserves | 0.20% | (4.50%) | 1.60% | ||
Effective settlement of income tax audits | 4.20% | 0.00% | 0.00% | ||
Other | (0.20%) | (1.90%) | 4.90% | ||
Effective income tax rate | 20.80% | 17.90% | 26.80% |
Uncertain Tax Positions (Narrat
Uncertain Tax Positions (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Uncertainties [Abstract] | ||||
Unrecognized tax benefits | $ 11,475 | $ 13,174 | $ 19,478 | $ 22,042 |
Unrecognized tax benefits that would impact effective tax rate | 2,900 | 4,100 | ||
Unrecognized tax benefits, income tax and interest penalties (benefits) | (100) | 900 | (300) | |
Unrecognized tax benefits, income tax penalties and interest accrued | 1,100 | $ 1,200 | $ 2,100 | |
Decrease in unrecognized tax benefits within 12 months | $ 2,200 |
Uncertain Tax Positions (Reconc
Uncertain Tax Positions (Reconciliation Of Beginning And Ending Balances Of Liability For Unrecognized Tax Benefits, Excluding Interest And Penalties) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1 | $ 13,174 | $ 19,478 | $ 22,042 |
Increases in unrecognized tax benefits related to the current year | 2,583 | 2,512 | 1,700 |
Increases in unrecognized tax benefits related to prior years | 4,503 | 2,430 | 29 |
Decreases in unrecognized tax benefits related to prior years | (1,334) | (793) | 0 |
Decreases in unrecognized tax benefits related to settlements | (4,812) | (2,075) | 0 |
Decreases in unrecognized tax benefits due to the lapse of the applicable statute of limitations | (2,639) | (8,378) | (4,293) |
Balance at December 31 | $ 11,475 | $ 13,174 | $ 19,478 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Oct. 02, 2018 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Commitment for salaries and other cash compensation under employment arrangement | $ 11.4 | |
Threatened Litigation | ||
Loss Contingencies [Line Items] | ||
Damages sought | $ 380 |
Auction Guarantees (Details)
Auction Guarantees (Details) - USD ($) | Feb. 26, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Guarantor Obligations [Line Items] | |||
Outstanding guarantee maximum exposure | $ 98,300,000 | ||
Irrevocable bids | 45,600,000 | ||
Net financial exposure | 52,700,000 | ||
Estimated fair value of obligation to perform under auction guarantees | $ 2,900,000 | $ 900,000 | |
Subsequent Event | |||
Guarantor Obligations [Line Items] | |||
Outstanding guarantee maximum exposure | $ 244,500,000 | ||
Irrevocable bids | 133,300,000 | ||
Net financial exposure | 111,200,000 | ||
Auction guarantee advances outstanding | $ 7,600,000 |
Lease Commitments (Narrative) (
Lease Commitments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases, Operating [Abstract] | |||
Rental expense under operating leases | $ 19.7 | $ 18.7 | $ 18.4 |
Future minimum sublease rental receipts | $ 11.7 |
Lease Commitments (Schedule Of
Lease Commitments (Schedule Of Future Minimum Rental Payments For Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2,019 | $ 20,039 |
2,020 | 17,771 |
2,021 | 14,033 |
2,022 | 11,750 |
2,023 | 9,449 |
Thereafter | 32,318 |
Total future minimum lease payments | $ 105,360 |
Share-Based Payments (Compensat
Share-Based Payments (Compensation Expense Related To Share-Based Payments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation Expense Related to Share-Based Payments | |||
Total share-based payment expense (pre-tax) | $ 29,703 | $ 23,479 | $ 15,216 |
Total share-based payment expense (after-tax) | 22,846 | 15,555 | 10,810 |
Salaries and related costs | |||
Compensation Expense Related to Share-Based Payments | |||
Total share-based payment expense (pre-tax) | 29,703 | 23,479 | 15,935 |
Voluntary separation incentive programs | Voluntary separation incentive programs | |||
Compensation Expense Related to Share-Based Payments | |||
Total share-based payment expense (pre-tax) | $ 0 | $ 0 | $ (719) |
Share-Based Payments (Share-Bas
Share-Based Payments (Share-Based Payment Awards Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Excess tax benefits from share-based payments | $ 1,200 | $ 2,700 | |||
Tax shortfall related to share-based payment arrangements | $ (1,342) | ||||
Unrecognized compensation expense related to the unvested portion of share-based payments | $ 23,900 | ||||
Compensation expense is expected to be amortized over a weighted-average period | 1 year 9 months 24 days | ||||
Granted (shares) | 696,000 | ||||
Share-based payment expense (credit) | $ 29,703 | 23,479 | 15,216 | ||
Stock options, expiration term | 10 years | ||||
Remaining shares (in shares) | 50,000 | ||||
Options outstanding, weighted average exercise price (usd per share) | $ 22.11 | ||||
Restricted Stock Unit Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of stock granted during period | $ 32,700 | ||||
Stock Option and SARS | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares called by share-based award | 1 | ||||
RSUs and PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares called by share-based award | 2.14 | ||||
Performance Shares | Single vesting opportunity after three years of service | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Fair value of stock granted during period | $ 13,200 | ||||
Granted (shares) | 283,019 | ||||
Maximum vesting percentage for incremental PSU's | 100.00% | ||||
Performance Shares | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Performance Shares | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Performance Shares | Maximum | Single vesting opportunity after three years of service | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (shares) | 566,038 | ||||
Maximum vesting percentage for incremental PSU's | 200.00% | ||||
Restricted Stock Units (RSUs) | Restricted Stock Unit Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Restricted Stock Units (RSUs) | Restricted Stock Unit Plan | Annual vesting over three years | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Fair value of stock granted during period | $ 19,600 | ||||
Granted (shares) | 412,708 | ||||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Options outstanding (shares) | 0 | ||||
Restricted Stock Restricted Stock Unit And Performance Share Unit | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future awards (shares) | 6,900,000 | ||||
Fair value of share vested | $ 27,600 | $ 39,700 | $ 15,200 |
Share-Based Payments (Changes I
Share-Based Payments (Changes In Number Of Outstanding Restricted Stock, RSU's And PSU's) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
RSU's, PSU's, and Restricted Stock Shares | |
Outstanding beginning balance, Shares | shares | 1,922 |
Granted, Shares | shares | 696 |
Vested, Shares | shares | (545) |
Canceled, Shares | shares | (221) |
Outstanding ending balance, Shares | shares | 1,852 |
Weighted Average Grant Date Fair Value | |
Outstanding beginning balance (usd per share) | $ / shares | $ 36.59 |
Granted (usd per share) | $ / shares | 47.05 |
Vested (usd per share) | $ / shares | 39.21 |
Canceled (usd per share) | $ / shares | 40.20 |
Outstanding ending balance (usd per share) | $ / shares | $ 39.12 |
Share-Based Payments (Stock Opt
Share-Based Payments (Stock Options Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, expiration term | 10 years | |||
Remaining shares (in shares) | 50,000 | |||
Options outstanding, weighted average exercise price (usd per share) | $ 22.11 | |||
Exercisable (in shares) | 0 | |||
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 4 years | |||
Options outstanding, aggregate intrinsic value | $ 1.4 | |||
Tax benefit from exercise of stock options | $ 0.2 | |||
Options outstanding (shares) | 0 |
Share-Based Payments (Directors
Share-Based Payments (Directors Stock Plan Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment expense (credit) | $ 29,703 | $ 23,479 | $ 15,216 |
Outstanding (in shares) | 1,852,000 | 1,922,000 | |
Director's Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment expense (credit) | $ 1,300 | $ 1,000 | $ 1,000 |
Outstanding (in shares) | 186,124 | ||
Shares available for future awards (shares) | 88,047 |
Voluntary Separation Incentiv_2
Voluntary Separation Incentive Programs, net (Details) - Voluntary separation incentive programs - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credit), net | $ 36,900 | $ 0 | $ (162) | $ (610) |
Employee severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credit), net | 33,800 | |||
Accelerated equity compensation expense | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges (credit), net | $ 3,100 |
Restructuring Charges, net (Det
Restructuring Charges, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Reserve | $ 5,900 | ||
2014 Restructuring plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges (credit), net | $ 10,753 | $ 0 | $ 0 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Potential common share excluded from computation of diluted earnings per share (shares) | 1 | 1 | 1 |
Earnings Per Share (Computation
Earnings Per Share (Computation Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to Sotheby's | $ 85,712 | $ (27,838) | $ 57,282 | $ (6,522) | $ 76,709 | $ (23,479) | $ 76,891 | $ (11,325) | $ 108,634 | $ 118,796 | $ 74,112 |
Less: Net income attributable to participating securities | 1,620 | 1,765 | 1,001 | ||||||||
Net income attributable to Sotheby's common shareholders | $ 107,014 | $ 117,031 | $ 73,111 | ||||||||
Denominator: | |||||||||||
Weighted average basic shares outstanding (shares) | 48,318 | 50,927 | 51,780 | 52,464 | 52,471 | 52,532 | 52,716 | 53,016 | 50,872 | 52,684 | 57,024 |
Basic earnings per share - Sotheby's common shareholders (usd per share) | $ 1.75 | $ (0.55) | $ 1.09 | $ (0.12) | $ 1.44 | $ (0.45) | $ 1.44 | $ (0.21) | $ 2.10 | $ 2.22 | $ 1.28 |
Numerator: | |||||||||||
Net (loss) income attributable to Sotheby's | $ 85,712 | $ (27,838) | $ 57,282 | $ (6,522) | $ 76,709 | $ (23,479) | $ 76,891 | $ (11,325) | $ 108,634 | $ 118,796 | $ 74,112 |
Less: Net income attributable to participating securities | 1,620 | 1,765 | 1,001 | ||||||||
Net income attributable to Sotheby's common shareholders | $ 107,014 | $ 117,031 | $ 73,111 | ||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding (shares) | 48,318 | 50,927 | 51,780 | 52,464 | 52,471 | 52,532 | 52,716 | 53,016 | 50,872 | 52,684 | 57,024 |
Weighted average effect of dilutive potential common shares: | |||||||||||
Performance share units (shares) | 229 | 231 | 465 | ||||||||
Deferred stock units (shares) | 177 | 161 | 149 | ||||||||
Stock options (shares) | 0 | 25 | 15 | ||||||||
Weighted average dilutive potential common shares outstanding (shares) | 406 | 417 | 629 | ||||||||
Denominator for calculation of diluted earnings per share (shares) | 49,003 | 50,927 | 52,210 | 52,464 | 52,853 | 52,532 | 53,054 | 53,016 | 51,278 | 53,101 | 57,653 |
Diluted earnings (loss) per share - Sotheby’s common shareholders (usd per share) | $ 1.72 | $ (0.55) | $ 1.08 | $ (0.12) | $ 1.43 | $ (0.45) | $ 1.43 | $ (0.21) | $ 2.09 | $ 2.20 | $ 1.27 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Sep. 12, 2018 | Sep. 11, 2018 | Oct. 04, 2016 | Oct. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||||||||
Auction commission revenues | $ 5,100,000 | $ 5,200,000 | $ 4,100,000 | |||||
Cost of goods sold | 5,300,000 | |||||||
Related party client payable | 997,168,000 | 996,197,000 | $ 997,168,000 | |||||
Accounts Receivable (net) | $ 0 | $ 0 | $ 0 | |||||
Treasury stock acquired (in shares) | 1,792,453 | 2,050,000 | 6,473,000 | 961,000 | 13,144,000 | 20,578,000 | ||
Aggregate purchase price | $ 85,500,000 | $ 284,733,000 | $ 44,495,000 | $ 359,885,000 | $ 689,113,000 | |||
Cost per share of stock acquired (usd per share) | $ 47.70 | $ 36 | $ 43.99 | $ 46.32 | $ 27.38 | $ 33.49 | ||
Ownership percentage in Sotheby's outstanding Common Stock prior to sale | 8.50% | |||||||
Marcato Capital Management | Sale of stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Treasury stock acquired (in shares) | 2,050,000 | |||||||
Aggregate purchase price | $ 73,800,000 | |||||||
Cost per share of stock acquired (usd per share) | $ 36 | |||||||
Ownership percentage in Sotheby's outstanding Common Stock prior to sale | 8.50% | |||||||
Related party consignors | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party client payable | $ 4,300,000 | $ 400,000 | $ 4,300,000 |
Quarterly Results (Unaudited)_2
Quarterly Results (Unaudited) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($)principal_selling_season$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)principal_selling_season$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Number of principal selling seasons | principal_selling_season | 2 | 2 | |||||||||
Percentage of total net auction sales | 76.00% | 80.00% | |||||||||
Auction commission revenues percent | 74.00% | 66.00% | |||||||||
Net Auction Sales | $ 1,623,640 | $ 373,152 | $ 1,707,432 | $ 691,369 | $ 1,511,836 | $ 286,722 | $ 1,543,331 | $ 474,903 | |||
Finance | 12,942 | 11,423 | 9,641 | 9,881 | 13,114 | 11,697 | 13,359 | 12,767 | $ 43,887 | $ 50,937 | $ 52,716 |
Total revenues | 375,147 | 119,161 | 345,636 | 195,796 | 338,204 | 180,008 | 339,859 | 199,309 | 1,035,740 | 1,057,380 | 857,942 |
Operating (loss) income | 121,275 | (30,667) | 83,826 | 6,911 | 106,634 | (41,056) | 114,155 | (14,058) | 181,345 | 165,675 | 114,635 |
Net (loss) income attributable to Sotheby's | $ 85,712 | $ (27,838) | $ 57,282 | $ (6,522) | $ 76,709 | $ (23,479) | $ 76,891 | $ (11,325) | $ 108,634 | $ 118,796 | $ 74,112 |
Basic earnings (loss) per share - Sotheby’s common shareholders (usd per share) | $ / shares | $ 1.75 | $ (0.55) | $ 1.09 | $ (0.12) | $ 1.44 | $ (0.45) | $ 1.44 | $ (0.21) | $ 2.10 | $ 2.22 | $ 1.28 |
Diluted earnings (loss) per share - Sotheby’s common shareholders (usd per share) | $ / shares | $ 1.72 | $ (0.55) | $ 1.08 | $ (0.12) | $ 1.43 | $ (0.45) | $ 1.43 | $ (0.21) | $ 2.09 | $ 2.20 | $ 1.27 |
Weighted average basic shares outstanding (shares) | shares | 48,318 | 50,927 | 51,780 | 52,464 | 52,471 | 52,532 | 52,716 | 53,016 | 50,872 | 52,684 | 57,024 |
Weighted average diluted shares outstanding (shares) | shares | 49,003 | 50,927 | 52,210 | 52,464 | 52,853 | 52,532 | 53,054 | 53,016 | 51,278 | 53,101 | 57,653 |
Total Agency commissions and fees | |||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Revenue | $ 338,648 | $ 96,721 | $ 290,879 | $ 165,526 | $ 315,274 | $ 81,264 | $ 301,768 | $ 111,265 | $ 891,774 | $ 809,571 | $ 724,398 |
Inventory sales | |||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Revenue | 17,968 | 6,498 | 40,106 | 16,236 | 6,167 | 81,501 | 19,937 | 71,377 | 80,808 | 178,982 | 62,863 |
Other | |||||||||||
Effect of Fourth Quarter Events [Line Items] | |||||||||||
Revenue | $ 5,589 | $ 4,519 | $ 5,010 | $ 4,153 | $ 3,649 | $ 5,546 | $ 4,795 | $ 3,900 | $ 19,271 | $ 17,890 | $ 17,965 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Receivables | |||
Valuation reserve deducted in the balance sheet from the asset to which it applies: | |||
Balance at Beginning of Period | $ 11,500 | $ 8,940 | $ 10,099 |
Charged to Costs and Expenses | 2,256 | 2,679 | 928 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 2,031 | 119 | 2,087 |
Balance at End of Period | 11,725 | 11,500 | 8,940 |
Deferred tax assets | |||
Valuation reserve deducted in the balance sheet from the asset to which it applies: | |||
Balance at Beginning of Period | 3,194 | 2,819 | 2,437 |
Charged to Costs and Expenses | 18 | 384 | 526 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 852 | 9 | 144 |
Balance at End of Period | $ 2,360 | $ 3,194 | $ 2,819 |