UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) - December 17, 2002
SOTHEBY'S HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
MICHIGAN 1-9750 38-2478409
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
38500 Woodward Avenue, Suite 100
BLOOMFIELD HILLS, MICHIGAN 48304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 646-2400
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ITEM 5. Other Events
On December 17, 2002, Sotheby's (the "Company") entered into an agreement to
sell its headquarters building located at 1334 York Avenue, New York, NY (the
"Building") to RFR Holding, LLC ("RFR") for $175 million in cash. A copy of the
press release announcing this sale agreement is attached as Exhibit 99(a).
The Company will lease the Building back from RFR for an initial 20-year term,
with options to extend the lease for two additional 10-year terms. The rental
obligation during the initial term will be approximately $18.0 million per year,
escalating 7% every three years during the term of the lease. The lease will be
classified as a capital lease in accordance with generally accepted accounting
principles.
Net cash proceeds received from the sale of the Building will primarily be used
to repay $100 million in short-term borrowings under the Term Facility of the
Company's Amended and Restated Credit Agreement due February 11, 2003 and to
fund the $20.1 million fine imposed on the Company by the European Commission
due February 8, 2003. The remaining proceeds will be used for general corporate
purposes.
This sale-leaseback transaction will be dilutive to the Company's earnings in
2003 due to increased charges for interest and depreciation resulting from the
capital lease obligation and capital lease asset that will be reflected on the
Company's consolidated balance sheet.
SOTHEBY'S HOLDINGS, INC.
AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SOTHEBY'S HOLDINGS, INC.
By: /s/ MICHAEL L. GILLIS
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Michael L. Gillis
Senior Vice President,
Controller and Chief
Accounting Officer
Date: DECEMBER 17, 2002
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99(a) Press Release, dated December 17, 2002