- A $20 million insurance recovery from the key man life insurance policy covering Robert Noortman, who died unexpectedly in January 2007;

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1 First Quarter 2007 Earnings Conference Call Outline May 7, 2007 Summary: Today we are pleased to announce our highest first quarter earnings from continuing operations in Company history. Traditionally a loss quarter due to seasonality, we are reporting income from continuing operations of $24 million, a $28 million increase from the $4 million loss in the first quarter of This significant improvement is largely due to the substantial increase in auction revenues attributable to the 50% increase in Net Auction Sales over the first quarter of 2006, as sales in both New York and London again broke records. The largest contributors to the sales increase over 2006 include: - An $87.3 million, or 43%, improvement in results from the February Impressionist and Contemporary art sales in London, which achieved their highest totals ever in London in their respective categories. - A $35.4 million, or 55%, increase in results from the January various-owner Old Master Paintings sales which realized the highest Old Masters total ever and included the sale of Rembrandt s Saint James the Greater for $23 million. - A $32.4 million, or 74%, increase in Asian art sales in New York, reflecting continued market growth in the areas of Chinese Contemporary Art and Chinese Works of Art. The second quarter is off to a terrific start and we have a number of remarkable sales that we are looking forward to which I will speak to a little later in the call. First Quarter 2007 Overall Results Income from continuing operations for the first quarter of 2007 was $24.3 million or $0.37 per diluted share, compared to ($3.9) million, or ($0.07) per diluted share, in the prior period. Significant items were recorded in the first quarter of 2007 which resulted in a net improvement of $9.8 million before taxes. These items were: - A $20 million insurance recovery from the key man life insurance policy covering Robert Noortman, who died unexpectedly in January 2007; - A $15 million impairment charge related to intangible assets and goodwill of Noortman Master Paintings; and - A $4.8 million gain on the sale of our former Billingshurst salesroom property in the United Kingdom. Excluding these items, income from continuing operations would have been $16.0 million, or $0.25 per diluted share, a $19.9 million improvement from the first quarter of

2 - This $19.9 million improvement in income from continuing operations is largely due to the significantly higher sales results in the first quarter of Net auction sales increased 50% to $665.9 million which resulted in a $40.3 million, or 45%, increase in auction and related revenues. - Partially offsetting this increase in revenues is a $30.1 million, or 32%, increase in operating expenses from the first quarter of Operating Revenues In the first quarter of 2007, auction and related revenues increased $40.3 million, or 45%, to $129.8 million, when compared to the prior period. - This improvement is almost entirely due to a $36.7 million, or 50%, increase in auction commission revenues, largely due to the $222.9 million, or 50%, increase in net auction sales over the period. - Also contributing to the increase in auction and related revenues is a $4.2 million, or 55%, improvement in private sales commissions. - In addition, excluding the favorable impact of foreign currency translations of $8 million, auction and related revenues increased $32.3 million or 36% to $121.8 million. Direct Costs of Services (from Continuing Operations) Consists largely of catalogue production and distribution costs, as well as sale marketing costs and corporate marketing expenses. In the first quarter of 2007, direct costs of services increased $4.3 million, or 34%, to $17.2 million when compared to the prior year due to the higher level of sales volume in the first quarter of Excluding the unfavorable impact of foreign currency translations, direct costs of services for the first quarter of 2007 increased $3.3 million, or 26% - Specifically, direct costs from single-owner sales increased $1.5 million when compared the first quarter of 2006, and the Company experienced higher shipping and promotional costs related to the highly successful February Impressionist and Contemporary sales in London. Salaries and Related Costs (from Continuing Operations) For the first quarter of 2007, salaries and related costs increased $10.8 million, or 25%, to $54.8 million, when compared to the first quarter of Excluding the unfavorable impact of foreign currency translations of $2.6 million, salaries and related costs for the first quarter of 2007 increased $8.2 million, or 19%. 2

3 Full-time salaries increased $3.9 million, or 15%, to $30.4 million. Excluding the impact of unfavorable foreign currency translations, full-time salaries increased $2.5 million, or 9%, to $29 million, primarily due to strategic headcount additions subsequent to the first quarter of 2006, as well as the impact of limited salary increases. Stock compensation expense increased $3.4 million primarily due to costs for restricted stock awarded in conjunction with employment arrangements established with key senior executives in 2006 and restricted stock awarded in February, Also contributing to the increase is a $2.8 million rise in employee benefit costs primarily due to $1.6 million in severance costs related to staff reductions in certain lower end sales categories in New York, London and Amsterdam. General & Administrative Costs (from Continuing Operations) In the first quarter of 2007, general and administrative expenses increased $6.5 million, or 20%, to $38.5 million, when compared to the prior year period. Excluding the unfavorable impact of foreign currency translations, general and administrative expenses increased $5.2 million, or 16%, to $37.2 million. This increase is largely attributable to the following factors: - A $4.2 million, or 57%, increase in professional fees. $1.3 million of the increase relates to an initiative for outsourcing our catalogue production in Europe, $1.6 million of the increase stems from tax outsourcing fees, while a portion of the increase is attributable to higher consulting and legal fees supporting various strategic initiatives. - A $1 million, or 21%, increase in travel and entertainment costs principally due to the higher level of travel for pursuing business opportunities during the period. Also contributing to the higher level of T&E were price increases for airfares, hotels and other travel costs. - General and administrative costs of $0.8 million related to NMP, which was acquired in June 2006 so there are no comparable costs in the same period of the prior year. Gain on Sale of Land and Building In March 2007, the Company finally completed the sale of land and building at Billingshurst, West Sussex which had been an auction salesroom. As a result, a gain of $4.7 million was recognized in the first quarter of 2007, for which there was no comparable transaction in the prior period. Net Interest Expense In the first quarter of 2007, net interest expense decreased $3.2 million, or 40%, to $4.8 million, when compared to the prior year due to significantly higher cash balances from the substantial improvement in the Company s operating results. 3

4 Earnings per Share Overall, first quarter 2007 diluted earnings per share from continuing operations was $0.37, up $0.44, as compared to diluted loss per share of ($0.07) for the first quarter of Liquidity Information (in millions) 3/31/2007 3/31/2006 Cash and S-Term Investments $83.6 $19.8 Restricted Cash $4.0 $6.8 Total Cash and ST Investments $87.6 $26.6 Current Assets $810.9 $529.8 Current Liabilities $483.2 $298.0 Credit facility borrowings $0.0 $94.8 Long-term debt $99.8 $ Sales To Date Worldwide sales have been extremely strong so far this year as demonstrated by the remarkable results of the first quarter and that strength has certainly continued into the second quarter thus far. Last month, Sotheby s Hong Kong held a successful series of sales with a total of $134 million, near the high end of its pre-sale estimate of $114 to $149 million. A number of records were broken including the record for any Chinese painting at auction which was set by Xu Beihong s Put Down Your Whip which sold for $9.2 million, more than double its pre-sale estimate of $3.8 million. In April in New York, Sotheby s held an exceptional combined Russian Paintings and Works of Art sale. The sale totaled $51 million, surpassing its pre-sale high estimate of $50 million with nine works selling for $1 million or more. Upcoming Sales Beginning tomorrow night, we have our New York sales of Impressionist and Modern Art to look forward to which are estimated to achieve a total of $265 to $361 million. - Highlights of the sale include Henri Matisse s Odalisque Grise et Jaune of Henriette Darricarrère, one of Matisse s favorite models in the 1920s which is estimated to bring $15/20 million and Pablo Picasso s Tête d'arlequin which is from his Rose period and is estimated between $14 and $18 million. - Other highlights are Paul Cézanne s Nature Morte au Melon Vert and Amedeo Modigliani s Jeune Fille en Bleu which are estimated to bring $14/18 million and $12/15 million, respectively. - Nine lots tomorrow evening have estimates of $10 million or more. 4

5 Next week, we will hold our spring sales of Contemporary Art here in New York which is estimated to realize $251 to 341 million in total. - The evening sale will feature Mark Rothko s White Center (Yellow, Pink and Lavender on Rose) which is being sold by David Rockefeller who purchased the painting in 1960 from its original owner. It is one of the most important Rothko s still in private hands and is estimated to bring in excess of $40 million. - Also on offer is Francis Bacon s Study from Innocent X which comes from a series of paintings based on Spanish artist Diego Velázquez s Portrait of Pope Innocent X, 1650, the most important of Bacon s works. The painting, which also has never before appeared at auction, is estimated to achieve in excess of $30 million. - Other highlights are Jackson Pollack s drip paintings Number 16, 1949 and Rythmical Dance which are estimated to sell for $18/25 million and $12/16 million, respectively. Competitive Environment/Outlook These first quarter results were extraordinary and the best ever in our Company s history from continuing operations. We are encouraged by 2007 auction sales results to date, as well as by the level of consignments for the remainder of the spring auction season and currently see no evidence to suggest that this strong market will not continue through the rest of the spring season and beyond. Forward Looking Statements: GAAP refers to Generally Accepted Accounting Principles in the United States of America. In this earnings call, financial measures are presented in accordance with GAAP and also on a non-gaap basis. When significant, the Company excludes the impact of changes in foreign currency exchange rates when comparing current year results to the prior year. Consequently, such period-to-period comparisons are provided on a constant dollar basis by eliminating the impact of changes in foreign currency exchange rates since the prior year. Management believes that excluding the impact of significant changes in foreign currency exchange rates when comparing current year results to the prior year provides a more meaningful discussion and analysis of fluctuations in the Company s operating results. Management also utilizes this non-gaap financial measure when analyzing its operating results. Reconciliations of these non-gaap financial measures used in this earnings call to the comparable GAAP amounts are provided as applicable in Appendix B of the Company s earnings press release for the quarter ended March 31, 2007, which is available via the Investor Relations section of the Company s website, Also, during the course of this call, the Company may make projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that such projections and 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. We refer you to the documents the Company files periodically with the Securities and Exchange Commission, specifically the Company s most recently filed Form 10-Q and 10-K. These documents identify important factors that could cause the actual results to differ materially from those contained in the projections or forward-looking statements 5