Thanks. Good morning.

Thanks for being on the call and your interest with a strong global art market and strong spring sales worldwide we achieved a 42% increase in adjusted operating income in the first half of this year. This is substantial improvement is principally due to a 24% increase in net auction sales to a first half total of 2.7 billion which generated an 18% increase in auction commission revenues.

In a growing market costs were well controlled and consistent with prior guidance; adjusted expenses increased 7% and 4% during the second quarter and the first half when compared to a year ago. Last month we announced a restructuring plan which will further address costs as we reallocate our resources towards those areas affording us the greatest opportunities for growth.

The headcount reductions will be implemented by year end and we will be back to you at some specific expense guidance for ’15 in due course. At it's core however we are demonstrating an increased level of operating leverage which is a real positive.

Last month we announced partnership with eBay which will make our existing live auctions, works of art antiques and collectibles visible and accessible to millions of potential art collectors worldwide. This is part of the program in our aspiration to become a preeminent online market for authenticated art, collectibles, and antiques and we’re pleased with our progress towards this goal.

Sotheby is seeing success today and it's well positioned to deliver some compelling results to our clients and value to our shareholders. The number of buyers at all levels, the amount of property we’re interested to sell and the prices we’re achieving are all up significantly this year.

We sold 487 lots in the first half for over a $1 million more than any other art market participants. 26% of our buyers in the first half of the year were first time clients showing that we’re engaging with the new generation of collectors and that’s very exciting for us.

These facts demonstrate that the art market is robust and we’re serving new as well as existing clients who trust Sotheby’s to deliver unrivaled expertise, superior market knowledge and attractive results. We’re looking forward to building on these successes of the six months with a number of exceptional sales that I will talk about in a little bit later in the year.

I will turn it over now to Patrick McClymont to go through the P&L for you.

Thank you Bill. Before I get into the financials I just like to thank the team here at Sotheby’s for a job well done this quarter.

Our business getters won one attractive consignments and drove successful sales and across the organization the team focused on running the business efficiently and helped us achieve improve profitability. It's a job well done, as I go through the financials please refer to the financial information at the end of the press release or in the 10Q which will be filed shortly.

Beginning with our overall results adjusted net income for the full six months is 84.9 million and adjusted diluted earnings per share is $1.20. This compares to 69.4 million or $1 per diluted share a year ago.

For the second quarter adjusted net income is 87.8 million and adjusted diluted EPS is a $1.26. Compared to 2013 second quarter net income of 91.7 million or $1.33 per diluted share.

The adjusted net income excludes the cost of special charges. Year-to-date our adjusted operating income margin is 32.2% a 470 basis point expansion in margins compared to 2013.

This is good progress in our work to drive operating leverage in the business. Now let’s look at each of our main operating segments.

Starting with the agency segment, agency revenues grew 21.2 million or 7% to 316.2 million in the second quarter due to a $35.5 million or 13% increase in auction commission revenues resulting from a 19% increase in net auction sales over the period. In the first half agency revenues increased to 52.2 million or 13% to 439.3 million due to a $61.6 million or 18% increase in auction commission revenues as a result of the 24% increase in net auction sales versus the prior year.

Auction commission margins decreased in the quarter from 15.9% to 15.2% and from 15.7% to 14.9% in the half. This is primarily due to competitive conditions for high value consignments as well as sales mix.

Offsetting the gains in auction commission revenues, private sale commissions decreased to 9.1 million or 35% for the quarter and 9.7 million or 24% in the first half when compared to the prior periods. This is largely due to the significant level of high value transactions completed in the second quarter of 2013.

Although the number of private sale transactions has increased approximately 40% this year, 2014 has not seen the big ticket sales which drove prior year results. Turning to the principal segment, thee activities include the sale of artworks that have been purchased opportunistically by Sotheby and our retail wine business.

Principal revenues grew to 34.7 million in the half and correspondingly cost of principal revenues increased to 32 million in the same period. Therefore principal gross profit for the quarter totaled 2.7 million, an improvement of 4.2 million versus the prior year.

Now to the finance segment, finance segment revenues increased 2.2 million or 27% in the quarter and increased 3.3 million or 22% for the half. Reflecting the continued growth of the client loan portfolio.

As previously announced we have established a separate capital structure for the finance segment that provides for the debt funding of loans through a dedicated revolving credit facility. Debt funding the loan portfolio reduces the finance segments cost of capital and enhances returns.

As of July 31st, the finance segment loan portfolio was approximately 611 million, a 28% increase from year-end and associated borrowings under the credit facility were 379 million. Switching to marketing expenses, for the 3 and 6 months ended June 30, 2014 marketing expenses decreased 1.3 million or 22% and 2.8 million or 27% respectively reflecting a more targeted approach to spending on core strategic priorities in 2014.

Moving to salaries and related costs which increased 16.6 million or 20% in the second quarter of 2014 and 21.6 million or 15% in the first half. For the quarter the higher level of salaries and related cost was largely due to increases in three areas.

First, a 9 million or 37% increase in accrued incentive compensation expense which is determined for me likely as a function of our strong first half earnings with adjusted EBITDA increasing 40% for the half year. As is always the case no incentive compensation is actually committed until the compensation committee in Board assessable year results at year-end.

Second, a 2.6 million or 7% increase in full time salaries do in part the impact of mid-year strategic headcount and salary increases in 2013 and targeted salary increase is taking effect in 2014. The third factor is a 2.9 million increase in benefits resulting from four different issues, one the higher level of full time salaries and accrued incentive compensation, two, improved investment performance related to Sotheby’s U.S.

deferred compensation plan which increased the plans pension liability. On a consolidated basis the cost for the deferred compensation liability is offset by market gains and the related trust asset which is reflected below operating income within the other expense, other income slash expense line.

The third factor is the new statutory enrollment requirements for the Sotheby UK defined contribution plan and then the fourth fact is higher cost associated with health welfare and life insurance programs. The increase in salaries and related cost for the first half is largely due to an 8.7 million or 32% increase incentive comp, 5.6 million or 8% growth in full time salaries and a 3.2% or 33% increase in share based payment expense.

The increase in share based payment expense is largely due to management’s quarter assessment of the likelihood that performance based equity compensation awards were best. For the full year 2014 we expect that full time salaries will increase by approximately 5% excluding the impact of changes in foreign currency exchange rates.

And as Bill mentioned last month we announced the restructuring plan which will further reduce costs, the restructuring plan is expected to result in employer related restructuring charges in the range of 13 million in the third quarter of this year. The headcount reductions will be fully implemented by year end and we will be back to you with specific expense guidance on how to think about 2015 payroll cost in due course.

Let’s move to general and administrative costs, in the second quarter G&A expenses decreased 6.2 million or 14% and in the half G&A decreased 12.8 million or 15% largely due to decreases in professional fees, travel and entertainment and other indirect expenses. We expect to reduce professional fees by approximately 9 million or 15% in the full year 2014 principally as a result of negotiated reductions in rates and a reduced scope of services.

We also project spending reductions were approximately 7 million across other categories of general and administrative expenses. Special charges, Sotheby has incurred 18.6 million in the quarter and 24.3 million in the half of third party advisory, legal and other professional service fees directly associated with issues related to the shareholder activism and the resulting proxy contest with Third Point LLC and the associated litigation.

We expect to recover a portion of the professional service fees related to the litigation; however the amount of the eventual insurance recovery is currently uncertain. Let’s move to net interest expense, for the 3 and 6 months ended June 30, ’14 net interest expense decreased 2.3 million, 22% and 6.1 million or 27% as a result of the repayment of Sotheby’s convertible notes upon the maturity in 2013.

Now we would like to provide an update on work we’re doing on our credit facilities. In July we started a process to negotiate amendments to her credit agreements that would increase the aggregate borrowing capacity under these agreements from 600 million to 850 million and increase the maximum permissible amount of net outstanding auction guarantees from 300 million to 600 million.

The objective of this exercise is to give us more flexibility and more liquidity to pursue attractive business in a growing market. We’re currently negotiating these amendments with an international syndicate of lenders and we anticipate executing an amended credit agreement in the third quarter.

Moving to taxes, Sotheby’s effective tax rate for the first half of 2014 is 39% as a compared to 23% in 2013. This is due to the accrual the U.S.

taxes on earnings of foreign subsidiaries in 2014 and the impact of a 6.8 million tax benefit that was recorded discreetly in the second quarter of 2013 related to a loss on the tax basis on the foreign subsidiary for which there is no corresponding benefit in the current year. Management estimates that Sotheby’s annual effective income tax rate for 2014 excluding discreet items will be approximately 38%.

In 2013, Sotheby’s annual effective income tax rate excluding discreet items was approximately 30%; the increase in the estimated annual effective tax rate between the periods is principally due to management’s conclusion in the first quarter of 2014 that the current and future earnings of Sotheby’s of foreign subsidiaries will not be indefinitely reinvested overseas. At this time I would like to hand the call back over to Bill for his concluding remarks.

Thanks Patrick. Couple of comments on what’s been going on since end of June, we had a terrific summer sales season in London which brought over a $0.5 billion during the end of June and July, the impression is to modern art sales brought $247 million in sales, near the high end of their presale estimate and the contemporary sales realized a $185 million also due to the high end of the presale estimate highlighted by a wonderful small Francis Bacon Triptych Three studies for the portrait of George Dyer which brought $45 million a record for one of these small triptychs by the artist and surpassing it's presale estimates by a wide margin.

And we had the Old Master in British painting sales in early July which brought $127 million plus for the week, well surpassing our presale estimates of $73 million to a $108 million and really some very strong solid results for our client Upcoming towards the autumn and winter season, we’re very excited to be offering property from the collection of Mrs. Paul Mellon in a series of auctions this autumn in New York.

There are more than 2000 individual items which have an estimated value in excess of a $100 million and include exceptional fine art, jewelry, furniture and decorative art works. Proceeds from these sales will benefit The Gerald B.

Lambert Foundation, a charitable entity established by Mrs. Mellon in memory of her father.

From the 4th to the 8th of October, Sotheby is Hong Kong will hold it's autumn sale series featuring Chinese ceramics works of art, paintings, contemporary literati, 20th century Chinese art, Asian contemporary art and modern and South-East Asian paintings, jewelry, watches and indeed wine. The five day sales series is highlighted by an by a Fish Stemcup from an important Chinese collection with a value in excess of 40 million in Hong Kong of 35 carat Columbian emerald ring, a 26-carat yellow and brownish diamond, pearl and diamond Ballerina Butterfly brooch designed by Sarah Jessica Parker and Asian jewelry designer Cindy Chao.

The benefits of the sale of that work will benefit the New York City Ballet and that should be exciting. New York at Sotheby will offer more than 400 pieces of fine English and European furniture from the New York legendary Kentshire Galleries in a dedicated auction on the 18th of October.

The range of furniture and objects carries estimates from as little as a $100 to an over $100,000 with the vast majority of the works been sold without reserve. A unique opportunity for new as well as established collectors and designers to acquire some of the very best from these celebrated connoisseurs.

On November 11th, Sotheby is privileged to present The Henry Graves Supercomplication. Made by Patek Philippe in 1933, this masterpiece of watch making is the most famous watch in the world and the most complicated watch ever made completely by human hand.

It's reappearance on the market 15 years after it's first record of sale at Sotheby will coincide with Patek Philippe 175th year celebrations and will be a tribute to the genius of the Swiss manufacturer. The watch will be offered in Sotheby’s important sale of wrist watches and watches with an estimate in excess of CHF15 million.

On the 11th and 12th of December Sotheby’s in New York will present master works to celebrate a 175 years of photography; Property from Joy of Giving Something Foundation, a single owner sale of the most significant collection of photographs in private hands today. The collection was meticulously put together over decades by Howard Stein, one of photography's greatest collectors, whose vision and keen understanding of the medium informed his purchases.

Again the resale estimate here is from $13 million to $20 million which will be the highest in the history of the photography market. We’re delighted to be showing one of the largest and most impressive installations to-date by Xu Bing, one of China's best known and sought after artists and will be among the highlights of the 9th Annual Beyond Limits sculpture selling show at Chatsworth in Derbyshire, England beginning on the 8th of September.

This is an exciting time at Sotheby’s where we continue to enjoy global demand for great work of art and high prices for individual works. As usual for this time of year we’re in the midst of property gathering for our autumn sales, we have already secured as I have indicated really first rate collections for the fall and we’re in the hunt for some terrific additional material.

I believe it's going to be an exciting season and we look forward to reporting back to you in the coming months. That concludes our remarks.

We look forward to your questions.

I wanted to ask you two questions regarding two separate cohorts within your customer base. One is if you can Bill, speak to the health of the Asian buyer throughout the first half of the year and through the summer, if you can?

And then two is, you mentioned 26% of your buyers are first time clients. Can you provide some context into that figure?

What does it look like in past seasons? And what do you think is driving that?

On the Chinese buyer year-to-date, we have these short windows of data sets in terms of what takes place and in our New York sales series Asian consumers were very vigorous and then in Hong Kong in early April we had a very, very strong series of sales compared to the prior period. We were up I believe something in the order of 40% to 50% on prior period in that period.

Now there has been an awful lot written of course about Chinese bullishness or Chinese bearishness and some indication suggest that there is a new stimulation around going on in China that could potentially freshen demand for great works of art. I think it's fair to say that our experience through the sales have certainly been rewarding and reassuring as to the ongoing relevance and appetite for great works of art from the collector base in broader China.

I don’t have in the last two weeks significant data about any shift or turn in that regard but everything that we know suggests a continuity of ongoing demand and interest. As it relates to new buyers, one of the curious things about this business is that new people hit our business with some frequency.

I can’t on this call give you accurate year-over-year-year-over-year trends in that regard although I think it's fair to say we’re keenly focused on both drawing and welcoming new participants in the business and growing the overall pool of people who find what we have as offerings relevant that will lead in our hope and expectation to growth and how we treat new customers is something that we’re keenly focused on to make sure that they don’t have one time experiences, repeat experience is coming back to us again and again.

And, Patrick, I have one for you. Back in January you established distinct capital structures, you outlined target agency adjusted EBITDA -- or debt to EBITDA leverage of around 3.5 to 4 throughout the cycle.

Can you tell us where that figure currently stands?

Well we haven't disclosed what the through the cycle EBITDA is because it will evolve overtime, we’re certainly below the 3.5 to 4 times in terms of where the agency balance sheet is now and we continue to think about where that number is evolving to and the different ways we could get to something close to that 3.5 to 4 times. We could have something to do with where we end up on real estate, it could be something on the directly on the balance sheet.

It's one of the issues that we’re spending time on now.

And the key adjustments to debt would be, can you remind us what they would be?

To get to?

To get to adjusted debt versus reported debt.

It's the on balance sheet debt, so it's the bond deal is outstanding, it's the mortgage on this building, those are the two big components to debt and then we do adjust for rent.

Could you share with us the strategic difference here in the eBay relationship and how you are approaching online now versus the past? And where is the size of the addressable market and how should we think about how this will impact your financials?

Also, Bill and Patrick, if you could give us an update on the auction commission front and what you are seeing there? If there's anything incremental on the horizon.

And then thanks for the details of the private sales. What happened there, what’s the nature of what happened there?

And how do you think it will trend? Do you think big ticket is an opportunity?

I counted five all over, so let me take the first couple and then you may need to remind me of one of them. In the first instance you spoke to eBay, in the first instance of course what we’re doing is distributing the events that Sotheby is current conduct to a much, much, much broader audience than has had of the opportunity to participate in those sales.

So once again when you have even at our most expansive sales 1200 or 1500 people in a room and couple of 100 people on the phone, you have through the distribution of these events and the ability to participate in these events for as much as a 100 million plus people. You completely change the inclusiveness and the opportunity to participate in what we’re currently doing.

I think how much relevance our sales and how that participation from an eBay customer coming into our traditional live business as of corollary audience is going to teach us quite a lot as to what some of the steps and the other kinds of sales that we offer to that community. I think it's really, really important to understand that we view the art collecting community holistically.

This is not an online versus offline community. Most people use both channels and our job is to be inclusive and get the very best, most exciting offering on both platforms that are reinforcing to one another rather than online only versus live only at the core of our strategy.

I think that’s important. As a barometer of who eBay is, they sell over 3500 objects a day for more than $5000.

So there is a very significant overlap in terms of what kinds of things they are doing and the kinds of things that we’re already doing in the $5000 to $10,000 space and we think there is real synergies there that we will learn from and continue to adapt and change our offerings. On the private sale side which is a subject which I’ve got some familiarity with.

As Patrick indicated, the number of transactions and the relevance of the private channel to our audience and our ability to penetrate and engage with customers has gone up grammatically. 40% more transactional events which we view very positively.

What you’re seeing in this quarter is -- we didn’t have a couple of very, very large and in some cases $100 million plus transactions that skew the overall margin which would be available to Sotheby’s on those transactions. The pipeline in that business is reasonable, I don’t believe that there has been a fundamental shift in demand or interest in the high value works in the private marketplace and as we indicated in the public auction marketplace we sold 480 some odd lots for more than a $1 million Oliver, the highest of any art market participant in the period.

So I don’t see any particular thunder clouds there. It's a chunky and unpredictable business.

The last area of your enquiry I believe related to auction commission margins which as Patrick indicated roughly a significant portion of which was just competitive pressure, the other significant portion of it was related as I’ve indicated to the high value dollar mix in the skewing of mix towards high dollar transactions in the quarter.

And what are your thoughts going forward on the commission margin line? Will it continue to trend in the mid-teens range?

I don’t want to be glib Oliver, but more is better, we like higher margins rather than lower margins and we’re committed to managing the business in the way that we think balances getting the right things in our sales and getting rewarded for what we do. I can’t predict it for you.

Just a follow-up, our final question. It is encouraging about the restructuring plan.

Could you give us more color on the reallocation and where you are looking to shift, to realize some opportunities there? Thank you.

I’m reluctant to detail how our investment spending at this point in different parts of the business but I think you should be reassured by is that we’re really focused on putting our resources in a place where we see opportunities for growth and the expansion of the franchise and both inside the auction business and potentially outside of the business.

I just wanted to ask the auction margin question a little bit different, it is continued to come down and I am just curious if you could try to break out how much of that might be mix versus how much of that might be competitive?

George, I think I’ve gotten as far as I can get. The competitive pressure was significant but so was the mix issue and I’m not prepared to give you a 20 basis points versus 40 basis narrative in that regard.

Okay. And just having lived through a couple of cycles, I do look with a little trepidation on the increase in the guarantee availability.

Can you just walk through the logic of putting that into place? I understand having more flexibility and I assume all of the controls are in place.

But if you can just walk through the thought process there that would be helpful.

The controls, the disciplines, the interest in making sure that we’re underwriting our risk in an effective way has never been more disciplined or rigorous. That doesn’t mean that people who make thoughtful decisions don’t make mistakes.

I think we as an organization and as an institution, I believe that we’re in a very robust art market and want to make sure we’ve got the flexibility to do business that we believe will be profitable for the organization. When markets turn on you you’ve inevitably opportunities to scramble to limit your downside risk and cost.

George, I think the end of quarter guarantee numbers are extremely modest and you will see that we’re building a book of business and I think in an incredibly responsible way. We look to syndicate away risk in some circumstances through irrevocable bids and alike.

So I don’t think that there is anything about our approach other than ensuring we have got the flexibility to do business that we’re convinced is it is going to be rewarding for the franchise in any sort of reckless or attitude of new or meaningfully up scaled risk.

And then lastly, relative to the 26% new customers are you able to discuss sort of where they come from geographically? I'm curious if there are a lot of folks coming from some of the more emerging markets relative to some of the developed economies?

I think that’s a number that moves around a lot, quarter-to-quarter depending upon what the offerings that we have are. I think in this quarter we saw very rewarding significant new customers come to the organization both from the Asian marketplace, Eastern Europe, Western Europe, United States, Mexico, that’s anecdotal rather than analytic but a global really global group of collectors engaged with our business at very significant levels for the first time and that’s an extremely rewarding and exciting reality.

As we take care of those customers well as we gain trust with those people, it gives us an opportunity to expand our franchise.

A couple of questions. First, as far as expense reductions, I guess, you were targeting 22 million this year, can you tell us where you stand as far as that goal?

Sure. We’re very confident that we will achieve that goal, we have provided an update today on how we’re tracking against that and everything is going according to plan.

So the headcount reductions and the charges that you’re taking in Q3 related to that, that falls within the 22 million?

No, the 22 million was announced earlier this year and that was really focused on non-headcount. We focused on things like general and administrative expenses, marketing expenses, direct auction expenses, professional fees, outsourced relationships and so that was very much a focus on non-headcount expenses.

What we have done more recently with the restructuring is we dove more deeply into the business and thought about which parts of the business could we allocate resources too to support growth and which part for the business did we need to take resources down. And so that’s a very distinct process, so we’re taking the charge in the third quarter and then as we go through our planning process for 2015 we will think about how much of those savings we want to reinvest in the business and how much we will want to retain and then when we give folks guidance how we’re thinking about cost for 2015, that’s when we will lay out how we came out on those questions.

And then is it fair to say that the eBay partnership could actually help ease some of the pressure on margins, the commission margin due to mix?

Well I think as I tried to indicate Kristine, there are over time we expect several threads of activity and work which will become part of a relationship that we evolve with this partner. In the first instance what you would expect to see is new bidders and participants in our sales that are ongoing and those new bidders would be adding to the hammer prices of works of art that in general terms are at price points which are very attractive to us in terms of margin.

As you know, you have seen the bell jar curves on this business any number of times, there is a very significant portion of our revenues which were generated in mid-price works of art which is clearly where this kind of a relationship can have a very powerful effect in helping on the distribution side which in turn should help on the supply generation side.

Okay. And then how did you do, you had a lot of artwork that was guaranteed at major auctions in the spring, how did you do with the guarantees overall?

We did well is the short answer. We had a number of guarantees in the contemporary auction, one large one that was multi-lot but we continued our property that will sell over time that we have done well with.

We have had a couple of items that failed to sell at auction that were guaranteed that we have bought in and the expense associated with that is reflected in the second quarter numbers but on balance when we look at the book of guarantees it's accomplished what we expected which is we’re able to use guarantees to win important works and in some cases we keep the guarantees, we don’t syndicate the risk when we see an opportunity to drive attractive margins and that’s how it's unfolded so far this year.

Just two quick follow-ups. The 38% tax rate, I think last call you had mentioned, you had said 36% is that the new run-rate to expect going forward?

Or is this something unique that is isolated to this year?

I think that’s a good assumption on a go forward basis, it may move around depending on where the earnings are in those kind of issues but something in the 38% is a good assumption going forward.

Okay. And then the other question we had was last year you had that 40th anniversary sale in Hong Kong in October, it's pretty big volume event for you, is that something, how do we think about the anniversary of that this year in the fall?

Those sales are still in the collecting stage so I can’t give you an overall scale of event. I spoke to some of the highlights of those sales.

There are wonderful things being offered in that set of sales, the certainly the marketing run-up to that was a very significant cost for the organization and something or the other which is not being replicated whether the sales totals or the earning is coming out of that cycle is at the level of the last year is something rather -- we just cannot to speak to yet.

Thanks for your interest. Wish us luck through the gathering cycle of the early autumn.

Have a good remainder of the summer. Best of luck.

Good bye.