#1INVESTOR BRIEFING APRIL 2019 Forward-looking Statements: This presentation contains certain "forward-looking statements" (as such term is defined in the Securities and Exchange Act of 1934, as amended) relating to future events and the financial performance of the Company. See Statement on Forward-Looking Statements in the Appendix to this presentation. Sotheby's#22#3Fo Investor Briefing: April 2019 We have an established position in an industry with high barriers to entry The art and luxury goods market is large and growing We have expanded our range of products and services with adjacencies to high-end auctions 3 $ We are digitizing Sotheby's to add capacity at low incremental cost Our financials indicate future profitability Sotheby's#4Investor Briefing: April 2019 37% of lots sold online in 2018 + $694 million Sotheby's Financial Services Loan Book, as of December 31, 2018 Founded in 1744, the oldest company on the New York Stock Exchange To Sotheby's has been uniting collectors with the world's nest objects for over 275 years and today is using technology to drive growth 4 $ 0 70+ Selling categories 5 year authenticity guarantee on purchases backed by in-house Scienti c Research Department Sotheby's#5THE ART MARKET IS GLOBAL, SO IS SOTHEBY'S Seattle San Francisco Investor Briefing: April 2019 Los Angeles. Dallas Monterrey Minneapolis Chicago St. Louis • Houston Mexico City Toronto ● New York Philadelphia Washington DC Palm Beach Caracas Sao Paulo Rio de Janeiro Buenos Aires Edinburgh Lille Oslo Lisbon Brussels and Luxembourg Copenhagen Hamburg Berlin Helsinki Cologne Amsterdam London. Bordeaux Madrid Paris. Geneva. Stockholm Prague 5 Milan Lyon Marseille Monte Carlo Munich Lugano Vienna Florence Rome Athens Cairo Moscow Istanbul Doha Dubai Mumbai Hong Kong Kuala Lumpur Bangkok Singapore Beijing Jakarta Seoul Shanghai Taipei Manila Tokyo 80 OFFICES AROUND THE WORLD Sotheby's#6ART MARKET STRUCTURE $67.4B • Sales in the global art market in 2018 reached $67.4 billion, up 6% year-on-year - 46% auction sector and 54% dealer sector. • Post-War and Contemporary art was the largest sector of the ne art auction market in 2018, accounting for 50% by value and 47% by volume. After two years of growth, the sector reached total [auction] sales of $7.2 billion in 2018, an increase of 16% year-on-year. • The auction market for works by living artists advanced by 23% to $3.3 billion in 2018. • Works of art selling at prices in excess of $1 million accounted for 61% of total sales value in the ne art auction market but for just 1% of lots sold. All statistics from Art Basel & UBS Art Market Report 2019 Investor Briefing: April 2019 Decorative Art & Antiques 51% 6 Global Auction Sales "Sotheby's and Christie's have over 80% of the market for works over $1M." - Martin Gammon, Art Newspaper Old Masters 3% Post-War & Contemporary 25% Modern Art 14% Impressionist & Modern Art 7% Sotheby's#7SOTHEBY'S DIGITAL HIGHLIGHTS $ in thousands Online Sales (A) Online Sales Growth Rate (B) Lots sold to online buyers as % of total sales (C) 37% Online Underbid Volume (D) Online Underbidders as % of total (E) Online-Only Sales (F) Online Consignment Platform sales (G) 2018 $220,399 24% $545,715 53% Investor Briefing: April 2019 $55,854 $ 56,468 2017 $178,042 16% 25% $518,934 48% $18,945 $7,338 2016 $154,142 19% 19% $406,389 41% $7,297 n/a 2015 $129,455 22% 15% $323,653 31% $529 n/a A. Online Sales include the aggregate sale price of lots purchased through online bids at our live auctions and lots purchased in our online-only auctions, as well as items purchased through our retail websites, Sotheby's Home and Sotheby's Wine. B. Represents the year-on-year percentage increase in Online Sales. C. Represents the total number of lots purchased in Online Sales as a percentage of total lots sold. D. Represents the total value of unsuccessful bids placed either through online bidding in a live sale or in an Online- Only sale. E. Represents the number of unsuccessful online bidders in a live or online-only auction as a percentage of the overall number of unsuccessful bidders in a live or online-only auction. F. Represents the aggregate purchase price of lots purchased in our online-only auctions, including commissions and fees paid by the buyer and through our retail websites Sotheby's Home and Sothebys Wine. G. Represents Aggregate Auction Sales attributable to lots purchased either through bids at our live auctions or lots purchased in our online-only sales that were consigned through our Online Consignment Platform. 2014 $106,534 12% 11% $301,709 26% $555 n/a 7 LOTS SOLD TO ONLINE BUYERS AS % OF TOTAL SALES 11% 2014 $555K 15% ONLINE-ONLY SALES 2014 2015 $529K 2015 $7M 2016 19% 2016 $18M 2017 25% 2017 $56M 2018 37% 2018 Sotheby's#8SOTHEBY'S BUYER'S PREMIUM CHART Overall Auction Commission Margin of 16.1% in 2018 26% 20% 13% 7% 0% Investor Briefing: April 2019 25% Hammer Up to $400,000 20% Hammer $400,000 - $4 Million 8 13.9% Hammer $4 Million+ Sotheby's#9Fo Investor Briefing: April 2019 We have an established position in an industry with high barriers to entry The art and luxury goods market is large and growing We have expanded our range of products and services with adjacencies to high-end auctions 9 $ We are digitizing Sotheby's to add capacity at low incremental cost Our financials indicate future profitability Sotheby's#10INCREASING WEALTH AROUND THE WORLD 50% 00000000 The number of millionaires worldwide is at a historical high of 36.1 million, an increase of nearly 50% from 2010. 3.6 MILLION Investor Briefing: April 2019 The global population of individuals worth more than $5 million is currently 2.5 million, expected to rise to 3.6 million by 2022. Source: Frank Wealth Report 2018 and Art Basel & UBS Art Market Report 2018 10 $106 TRILLION $ The wealth of HNWIs in 2017 will reach $66 trillion, by 2025, forecasts are that this may reach $106 trillion. Sotheby's#11IN SEARCH OF ASSETS $40 BILLION Investor Briefing: April 2019 Just 0.1% of the increase in investable wealth over the next eight years being spent on art and luxury collectables would create a further $40 billion in sales. K'night Frank Wealth Report 2018 and Art Basel & UBS Art Market Report 2018 11 75% TOTAL GROWTH From 2008 to 2016 it is estimated that more than 75% of the total growth in global luxury spending (over $65 billion) could be attributed to purchases made by Chinese consumers, either at home or abroad. Sotheby's#12SOTHEBY'S AND CHRISTIE'S (1989-2018) AUCTION ACTIVITY EXPANSION PERIODS CAGR 6% (1991-2018) $5B $4B $2B $2B $3B $3B $3B Investor Briefing: April 2019 $4B $4B Source: Sotheby's and Christie's public auction results $5B $4B $3B $3B $3B $5B $6B $8B $11B 12 $10B $5B $2B 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $9B $10B $10B 2012 SHIB $13B 2013 2014 $12B 2015 $9B 2016 $11B 2017 $12B 2018 Sotheby's#13SOTHEBY'S AND CHRISTIE'S (1989-2018) 20 YEARS ENDING 2018 Compound Annual Return Standard Deviation, Correlation w/ S&P 500 TR 1 - Defined as standard deviation of annual returns 2-Based on Sotheby's Mei Moses sale indices Investor Briefing: April 2019 ALL ART₂2 4.6% 10.6% 0.05 13 POST-WAR AND CONTEMPORARY 2 9.2% 15.6% 0.06 Sotheby's#14Fo Investor Briefing: April 2019 We have an established position in an industry with high barriers to entry The art and luxury goods market is large and growing We have expanded our range of products and services with adjacencies to high-end auctions 14 $ We are digitizing Sotheby's to add capacity at low incremental cost Our financials indicate future profitability Sotheby's#15INCREASING HIGH-MARGIN CONTEMPORARY ART SALES Sotheby's Contemporary Art Auctions Evening Day Online/Curated 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investor Briefing: April 2019 11 8 6 3 0 Number of Sales Contemporary Curated offers accessibly priced works by leading artists of the post-war and contemporary periods. 2014 Contemporary Curated and Contemporary Online Online/Curated 50% 15 2015 2016 of buyers in online- only sales are new to Sotheby's 2017 20% 2018 1200 900 600 300 Annual Total (USD, 000s) of those go on to bid in a live sale Sotheby's I#16SOTHEBY'S PRIVATE SALES Investor Briefing: April 2019 $673M 2015 $583M 2016 $745M 2017 16 $1,018M 2018 $1,200M $900M $600M $300M $OM Sotheby's#17EXPANDED RANGE OF PRODUCTS AND SERVICES Sotheby's Wine RM Sotheby's RM AUCTIONS 17 Sotheby's Diamonds Art Agency, Partners Sotheby's#18Sotheby's Home Low-touch online consignment marketplace specializing in furniture, decorative objects and accessories SA ᎭᎭᏞᏞ •The start-up Viyet was acquired in January 2018 and re-launched in October 2018 as Sotheby's Home More favorable fee-structure with substantial vendor as well as buyer commission •Site traffic up over 200% since acquisition, doubling monthly revenue Investor Briefing: April 2019 Sotheby's Home NEW ARRIVALS GIFTS FEATURED ART FURNITURE RUGS LIGHTING ACCESSORIES SALE New Arrivals Every Day 18 SEATING ageless beauty STORAGE 44 DECOR SHOP ANTIQUES TABLES CONSIGN GET 20% OFF LOGIN QO MacBook Air LIGHTING RUGS Sotheby's#19Fo Investor Briefing: April 2019 We have an established position in an industry with high barriers to entry The art and luxury goods market is large and growing We have expanded our range of products and services with adjacencies to high-end auctions 19 $ We are digitizing Sotheby's to add capacity at low incremental cost Our financials indicate future profitability Sotheby's#20USING TECHNOLOGY TO BRING IN NEW CLIENTS AND CREATE VALUE Safari File Edia View History Bookmarks Develop Window Help 4 Mp//www.sbs.com Sotheby's BONO and Mode Ning Sale 18 HENRY MOORE RECLINING FIGURE ID NOW 2200 2005 Sotheby's BIDNOW Impressionist and Modern Art Evening Sale 15 AUGUST 2012 NEW YORK NOR; PADDLE HOOD 19 MARK ROTHKO NO ROYAL RED AND BLUE 20 PARLIAMENT HOUSE OF COMMONS 21 FRANCESCO PRIMATICCO ASCATED PROPHET WITH AR SOTHEBY'S BID NOW > 4:32 PM Contemporary Curated 3 YORK JOSSAMEST LONDO Contemporary Curated Wareh A Lot Detail NEW YORK 12 SESSIO SESSION 1 THU.03 MAR 16 10:00 SESSION 2 THU.03MAR 16102 exhibit Contemporary Curated SOTHEBY'S MOBILE APP 20 DASHCARD TEM QUEUE REPORTS FAVORITES JWL-NY-86025018 DETAILS JWL-NY-86025C18 Category Location Department Office Location SAP 0 Hammer Price - $1,400,000 $295 100 $300,000-$400,000 Estimate Carney D 900 46GETS VER Accepted: 15 Dec 2017 ABGES MacBook Pro Low Low: SOTHEBY'S X ORION ANALYTICAL ONLINE CONSIGNMENT PLATFORM Recan Sale Sche N09 Lat Nu Depart County#21SOTHEBY'S DIGITAL INNOVATION DRIVES SALES $9.1 BILLION The online fine art market is projected to more than double by 2021 to $9.1 billion. Source: Hiscox Online Art Trade Report 2018 and Sotheby's data Investor Briefing: April 2019 $550 MILLION Over $550 million online underbids in 2018, up 27% from the prior year. 21 $220 MILLION Online buyers spent $220 million at Sotheby's in 2018, up 24% year over year. Sotheby's#22SOTHEBY'S DIGITAL INNOVATION DRIVES SALES Index of Online vs. Offline Volume 1,000% 750% 500% 250% Online Lots Oine Lots 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investor Briefing: April 2019 37% 37% of lots were sold to online buyers in 2018, up from 19% in 2016 22 64% We saw a record number of new bidders in 2018 and 64% of those bid online Sotheby's#23SOTHEBY'S DIGITAL DEVELOPMENT TIMELINE 2018 Investor Briefing: April 2019 Mobile bidding successfully piloted New Sotheby's Wine e-commerce site Sales increase • Template for future retail initiatives Search Engine Marketing • Google ad 'quality score' increase • Lowering advertising costs as content is more prominent in search results organically 23 Dedicated Consignment Landing Pages • Improved conversion rate to successful property submission Identity access management system Auth0 platform increases security and privacy ● Enhancement of auction calendar with series of online-only summer sales Sotheby's#24SOTHEBY'S DIGITAL DEVELOPMENT TIMELINE 2019 Investor Briefing: April 2019 Mobile payment Full mobile bidding in all time-based online only sales Digital Auction Management ● An in-house system to digitize core ● Paperless auction room Bid clerk and auctioneer apps auction business New platform to run all sales by end of 2019 ● • Efficiencies at all stages of auction process ● ● 24 New bidding system will improve data capture and security Recommendations engine to drive middle-market sales developed by in-house A.I. team Sotheby's#25MAKING DATA CENTRAL TO DIGITIZATION • Sotheby's has access to a number of different collections of data on valuable objects, provenance, title, authenticity, ownership, pricing, buyer preferences and behaviors, and sales transactions. ● Data team led by Thread Genius a startup specializing in taste-based image recognition and recommendation technologies acquired in early 2018. • Will use data and technology to drive innovation improving both internal processes and client experience. ● Sold $56M of property from online consignment platform in 2018 with healthy commission rates. Investor Briefing: April 2019 Thread Genius 25 COLOR CORAL COLOR RED LONG BEAD ILLAM DEBORABAY MacBook Air ULO LAG OSAM KODAYA LUKUD SUNG DANE ZOUDOK ANISH KAPOOR JONATHAN Ost : 12 درصه Sotheby's#26Fo Investor Briefing: April 2019 We have an established position in an industry with high barriers to entry The art and luxury goods market is large and growing We have expanded our range of products and services with adjacencies to high-end auctions 26 $ We are digitizing Sotheby's to add capacity at low incremental cost Our Onancials indicate future pro tability Sotheby's#272018 AND 2017 ANNUAL RESULTS $ in millions Consolidated Sales ₁ Operating Revenues, Net 2 Adjusted Expenses 3 Adjusted Operating Income 3 Adjusted Net Interest and Other Non-Op. Expense 3 Adjusted Income Tax Expense 3 Adjusted Net Income 3 Adjusted EBITDA 3 Adjusted Diluted EPS 3 Auction Commission Margin Investor Briefing: April 2019 1- Represents the sum of Aggregate Auction Sales, Private Sales and inventory sales, as defined in our most recently field Form 10-K 2-Auction, Inventory and SFS are included net of cost of revenues 3-Non-GAAP financial measure. See Appendix to this presentation for a description of this non-GAAP financial measure and a reconciliation to the most comparable GAAP amount. 27 2018 $6,350.2 $766.1 $(568.0) $198.1 $(30.2) $(38.9) $128.9 $230.1 $2.48 16.1% 2017 $5,490.9 $706.4 $(539.0) $167.4 $(20.5) $(25.2) $121.7 $200.2 $2.25 17.2% % change 16% 8% 5% 18% 48% 54% 6% 15% 10% -110bps Sotheby's#282018 AND 2017 BALANCE SHEET METRICS $ in millions Total Cash (Excluded Restricted Cash) Available Borrowing Capacity 1 Total Available Liquidity Mortgage Debt Unsecured Notes SFS Borrowing Total Consolidated Debt Consolidated Debt / Adjusted EBITDA Ratio Adjusted Leverage Ratio SFS Loan Portfolio Inventory Investor Briefing: April 2019 2 28 Dec 31, 2018 $178.6 $577.8 $756.4 $260.8 $400.0 $280.0 $940.8 4.1x 3.1x $694.0 $43.6 Dec 31, 2017 $544.4 $409.4 $953.8 $275.1 $400.0 $196.5 $871.6 4.4x 3.9x $590.6 $74.5 1- Represents consolidated available borrowing capacity under our revolving credit facility (unused). 2-Adjusted EBITDA and Adjusted Leverage Ratio are non-GAAP financial measures. See Appendix to this presentation for a description of these non-GAAP financial measures and a reconciliation to the most comparable GAAP amounts. We define Adjusted Leverage Ratio as Long- Term Debt divided by Adjusted EBITDA excluding SFS. Sotheby's#29LONG TERM RESULTS Revenue $309M$317M $31M $37M Adjusted EBITDA¹ $451M Investor Briefing: April 2019 2002 2003 2004 $514M $110M $665M $145M 2005 $918M $218M 2006 $692M $314M 2007 $485M 2008 $99M $89M $774M 2009 $832M 2010 $295M $293M $769M 2011 2012 $854M $236M $246M 29 $938M 2013 $962M 2014 $290M $278M $857M 2015 1- Non-GAAP financial measure. See comparable GAAP amount Note: 2004 revenues exclude $46 million in non-recurring license revenue that was earned in conjunction with the disposition of Sotheby's international Realty in 2004. Total reported revenue including this amount was $497 million $1,057M $1,036M $192M 2016 $200M 2017 $230M 2018 $1200M $900M $600M $300M $OM Sotheby's#30EXPENSE GROWTH LEVELING Growth in Adjusted Expenses Investor Briefing: April 2019 8% Q1 2017 13% Q2 2017 13% Q3 2017 18% Q4 2017 13% Q1 2018 30 8% Q2 2018 2% Q3 2018 0% Q4 2018 20% 15% 10% 5% 0% Sotheby's#31Investor Briefing: April 2019 31 Sotheby's Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Number of Shares Outstanding 40 ğ 50 09 70 Cumulative Cost of Repurchases, USDm Shares Outstanding - Cumulative Cost of Repurchases SHARE REPURCHASES#32ADJUSTED RETURN ON EQUITY 2013-2018 13.1% 2013 14.1% Investor Briefing: April 2019 2014 17.0% 2015 15.2% 2016 21.1% 32 2017 24.4% 1- Non-GAAP financial measure. Adjusted ROE is calculated using Adjusted Net Income divided by average equity. See Appendix for the reconciliation of Adjusted Net Income to Net Income in accordance with U.S. GAAP. 2018 30% 20% 10% 0% ROE % Sotheby's#33SUMMARY Sotheby's is well positioned to... Capitalize on a strengthening globalized art market Investor Briefing: April 2019 Embrace technology to further advance and bene t the business A Diversify our revenue sources to mitigate market cyclicality 33 17 ото Accelerate our secular growth rate E Optimize our strong balance sheet for maximum capital e ciency Sotheby's#34DISCLAIMER INDUSTRY / MARKET DATA: Industry and market data used in this presentation have been obtained from industry publications and sources as well as from third-party research reports prepared for other purposes. The data obtained from these sources has not been independently verified and no guarantee is made of the data's accuracy and completeness. FORWARD LOOKING STATEMENTS: This presentation contains certain forward looking statements, as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, relating to future events and the financial performance of the Company. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that the actual events or performance will differ materially from such predictions. As such, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as to management's plans, assumptions and expectations as of the date hereof. Major factors which the Company believes could cause the actual results to differ materially from the predicted results in the forward looking statements include, but are not limited to, the following, which are not ranked in any particular order. In addition to the considerations and factors referred to in below and prior filings and releases, major factors which the Company believes could cause actual events to differ materially include, but are not limited to, the overall strength of the international economy and financial markets, political conditions in various nations, competition with other auctioneers and art dealers, the success of the Company's risk reduction and margin improvement efforts, the amount of quality property being consigned to art auction houses, the marketability at auction of such property, the success of the Company's autumn auction sales and the results of the Company's announced capital allocation and financial review and other initiatives. The Company disclaims any duty to update or alter any forward-looking statements, except as required by applicable law. Investor Briefing: April 2019 34 Sotheby's#35APPENDIX GAAP refers to generally accepted accounting principles in the United States of America. Included in this presentation are financial measures presented in accordance with GAAP and also on a non-GAAP basis. The non- GAAP financial measures shown in this presentation are: (1) Adjusted Expenses (2) Adjusted Operating Income (3) Adjusted Income Tax Expense (4) Adjusted Net Interest and Other Non-Operating Expense (5) Adjusted Net Income (6) Adjusted Diluted EPS (7) EBITDA (8) Adjusted EBITDA (9) Adjusted Leverage Ratio - Consolidated, excluding SFS (10) Adjusted Return on Equity We caution users of our financial statements that amounts presented in accordance with our definitions of these non-GAAP financial measures as provided below may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate such measures in the same manner. Explanation of these non-GAAP financial measures is provided in our previously filed 10-K and in our most recent earnings release furnished on Form 8-K on February 28, 2019. Investor Briefing: April 2019 35 Sotheby's#36APPENDIX A reconciliation of various GAAP to non-GAAP financial measures follows: Adjusted Expenses - Reference: Page 27 Total expenses Subtract: Agency direct costs Subtract: Cost of inventory sales Subtract: Cost of finance revenues Subtract: Restructuring charges Subtract: Contractual severance agreement charges, net Subtract: Accelerated depreciation charges Adjusted Expenses Adjusted Operating Income - Reference: Page 27 Operating income Add: Restructuring charges Add: Contractual severance agreement charges, net Add: Accelerated depreciation charges Adjusted Operating Income Investor Briefing: April 2019 36 2018 $854 184 81 4 11 3 3 $568 millions of dollars 2018 Year Ended Dec 31, $181 11 3 3 $198 2017 Year Ended Dec 31, $892 150 182 19 T 2 $539 millions of dollars 2017 $165 2 $167 Sotheby's#37APPENDIX Adjusted Net Interest and Other Non-Operating Expense - Reference: Page 27 Net interest expense Non-operating income Equity in earnings of investees Net Interest and Other Non-Operating Expense Add: Charge related to interest rate collar amendment Adjusted Net Interest and Other Non-Operating Expense Adjusted Income Tax Expense - Reference: Page 27 Income tax expense Add: Income tax benefit from restructuring charges, net Add: Income tax benefit from contractual severance agreement charges, net Add: Income tax benefit from accelerated depreciation charges Add: Loss on extinguishment of debt Add: Write-off of credit facility fees Add: Income tax benefit of charge related to interest rate collar amendment Add: Net charge associated with the effective settlement of an income tax audit Add: Net income tax (benefit) expense associated with the enactment of the U.S. Tax Cuts and Jobs Act Adjusted Income Tax Expense Investor Briefing: April 2019 2018 37 ($39) 5 4 ($30) millions of dollars ($30) 2018 $28 2 1 1 3 1 Year Ended Dec 31, (5) 8 $39 The income tax e ect of each line item in the reconciliation of net income attributable to Sotheby's to Adjusted Net Income is computed using the relevant jurisdictional tax rates for each item. 2017 Year Ended Dec 31, millions of dollars ($31) 7 3 ($21) 1 ($20) 2017 $25 1 (1) $25 Sotheby's#38APPENDIX Adjusted Net Income - Reference: Page 27 Net income attributable to Sotheby's Add: Restructuring charges (net), net of tax Add: Contractual severance agreement charges (net), net of tax Add: Accelerated depreciation charges, net of tax Add: Write-off of credit facility fees, net of tax Add: Extinguishment of debt, net of tax Add: Charge related to interest rate collar amendment, net of tax Add: Net charge associated with the effective settlement of an income tax audit Add: Net income tax (benefit) expense associated with the enactment of the U.S. Tax Cuts and Jobs Act Adjusted Net Income The income tax e ect of each line item in the reconciliation above of net income attributable to Sotheby's to Adjusted Net Income is computed using the relevant jurisdictional tax rates for each item. Adjusted Diluted Earnings Per Share - Reference: Page 27 Diluted earnings per share Add: Restructuring charges (net), per share Add: Contractual severance agreement charges (net), per share Add: Accelerated depreciation charges, per share Add: Write-off of credit facility fees, per share Add: Extinguishment of debt, per share Add: Charge related to interest rate collar amendment, per share Add: Net charge associated with the effective settlement of an income tax audit, per share Add: Net income tax (benefit) expense associated with the enactment of the U.S. Tax Cuts and Jobs Act Adjusted Diluted Earnings Per Share Investor Briefing: April 2019 38 Year Ended Dec 31, 2018 2017 millions of dollars $109 $119 8 100 W NN 2 2 3 8 5 (8) $129 Year Ended Dec 31, $2.09 0.16 0.04 0.05 0.06 0.16 1 0.09 (0.17) $2.48 1 1 $122 2018 2017 millions of dollars $2.20 0.02 0.01 0.02 $2.25 Sotheby's#39APPENDIX Adjusted EBITDA - Reference: Pages 27, 28 and 29 Net income attributable to Sotheby's Add: Income tax expense Subtract: Interest income Add: Interest expense Add: Depreciation and amortization expense EBITDA Add: Restructuring charges, net Add: Contractual severance agreement charges, net Add: Extinguishment of debt Add: Write-off of credit facility fees Add: Charge related to interest rate collar amendment Adjusted EBITDA Adjusted Leverage Ratio - Reference: Page 28 Adjusted EBITDA SFS EBITDA: SFS income before taxes Add. SFS depreciation expense SFS EBITDA Adjusted EBITDA - Excluding SFS Long-Term Debt, net Adjusted Leverage Ratio Investor Briefing: April 2019 39 Year Ended Dec 31, 2018 millions of dollars $109 28 2 40 27 $202 11 3 11 4 $230 Year Ended Dec 31, 2017 26 26 $204 $639 3.1 $119 25 1 32 24 $199 1 $200 2018 millions of dollars $230 2017 $200 33 33 $167 $653 3.9 Sotheby's#40APPENDIX Adjusted EBITDA - Reference: Page 29 Net income (loss) attributable to Sotheby's Add: Income tax expense (benefit) related to continuing operations Add: Income tax expense related to discontinued operations Add: Income tax benefit related to cumulative effect of accounting change Add: Income tax expense (benefit) related to equity in earnings of investees Subtract: Interest income Add: Interest expense Add: Depreciation and amortization expense EBITDA Add: Costs related to previous employee retention programs Add: Net restructuring charges Add: Antitrust related matters Add: License fee revenue - SIR¹ Add: License fee agreement expenses - SIR¹ Add: Loss (income) from discontinued operations, pre-tax - SIR¹ Add: Impairment loss - NMP² Add: Life insurance recovery - NMP² Add: Gain on sale of land and buildings Add: Extinguishment of debt (net) Add: Credit facility termination costs Add: Cumulative effect of change in accounting principle, pre-tax Add: EBITDA related to former sothebys.com business Add: Special charges (net) Add: CEO separation and transition costs Add: Leadership transition severance costs Add: Voluntary separation incentive program charges (net) Add: Contractual severance agreement charges (net) Add: Acquisition earn-out compensation expense Adjusted EBITDA 1 Sotheby's International Realty 2 Noortman Master Paintings Investor Briefing: April 2019 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 millions of dollars $74 $44 $118 $26 $131 $76 ($1) $14 ($1) $1 $1 $1 $1 $1 $2 $2 $3 $1 $4 $2 $5 $8 $14 $6 $6 $3 $3 $3 $30 $33 $35 $43 $45 $42 $47 $46 $40 $29 $33 $33 $33 $33 $22 $22 $19 $20 $19 $18 $18 $17 $22 $25 $22 $23 $22 $24 $25 $22 $151 $225 $248 $245 $221 $287 $289 $78 $105 $324 $218 $140 $191 $27 ($31) $9 $23 $5 $2 $3 $41 $20 201 $130 $108 $171 $161 -$7 $56 $51 $60 $65 $22 | | $8 $1 40 $15 III ||| 1 III $12 |||| I CA!! $26 $213 $107 $21 $73 $60 |||||||I ($18) $11 $13 $15 I $6 ($1) ($5) $4 $13 ($1) $37 $7 $35 $192 $278 $290 $246 $236 $293 $295 $89 $99 ($20) ($5) $62 $87 -$21 -$55 $29 $35 ($11) ($20) $15 $4 $3 ||| 131 $2 $2 ($46) $2 52 $ ($39) ($9) ($8) I TTTTTIIII||| $2 $4 ||||| $314 $218 $145 $110 $37 $31 Sotheby's#41APPENDIX Adjusted Return on Equity - Reference: Page 32 Adjusted Net Income Average Equity Adjusted Return on Equity Investor Briefing: April 2019 2018 $129 $529 24.4% 2017 $122 $576 21.1% 41 2016 $100 $656 15.2% 2015 $143 $842 17% 2014 $142 $1,009 14.1% 2013 $139 $1,066 13.1% Sotheby's#422018 NET SALES Below $25K 80% 60% 40% 20% 0% Investor Briefing: April 2019 71% $25k-$1M 27% 2018 Lots Sold Note: Figures exclude wine. $1M-$3M 1% 0.6% 5% $3M+ 32% 16% 2018 Net Sale 42 47% 6% 40% 17% 37% 2018 Buyers Premium Sotheby's#43THANK YOU 43 Sotheby's