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  "docSlug": "c6a949b90946",
  "documentTitle": "Sotheby's (BID)",
  "authorId": "07_Marcato",
  "authorName": "Marcato Capital Management",
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  "presentationDate": "2014-04-22 00:00:00",
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  "notes": "The slide uses a financial buildup to expose a gap between actual performance and stated corporate goals.",
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      "text": "Substantially below Company's stated ROE target of 20%. According to the 10-K, BID generated $26M of 2013 Agency commission revenue from Finance loan collateral. Assuming ~28% average Agency margins and 35% taxes, yields $4.7M of net income, or ~4% of ROE.",
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      "text": "Substantially below Company's stated ROE target of 20%",
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      "text": "Return on Equity: 7.9%",
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      "text": "According to the 10-K, BID generated $26M of 2013 Agency commission revenue from Finance loan collateral. Assuming ~28% average Agency margins and 35% taxes, yields $4.7M of net income, or ~4% of ROE. Some of these sales may have occurred without financing.",
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      "text": "Source: Someby's Capital Allocation and Financial Policy Review, January 2014.",
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      "text": "Finance Segment Loan Balance $474; 2013 Wtd Avg Interest Rate 4.9%; Interest Income $23; Interest Income @ 2.25% ($8); Pretax $15; Tax Expense @ 35% ($5); Net Income $10; Total Debt $348; Effective LTV 73.4%; Total Equity $126; Return on Equity 7.9%",
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      "text": "However, SFS Does Not Meet Its Own Stated 20% Hurdle",
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