-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V4UMC30uiM7NZQpnz8xVHNqjfXR6xjZLD9jLT9ccSjmOJnMsATlANSYj2oKdOpYB PUmcOMaVSzEIArgC1WnrMA== 0000950144-97-009115.txt : 19970815 0000950144-97-009115.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950144-97-009115 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: CSX SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY CORP CENTRAL INDEX KEY: 0000059229 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 570507055 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05846 FILM NUMBER: 97660432 BUSINESS ADDRESS: STREET 1: P O BOX 789 STREET 2: 2000 WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29615 BUSINESS PHONE: 8032688283 MAIL ADDRESS: STREET 1: P O BOX 789 STREET 2: WADE HAMPTON BLVD CITY: GREENVILLE STATE: SC ZIP: 29602 10-Q 1 LIBERTY CORPORATION 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Mark One) [xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 ------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- --------------- Commission File Number 1-5846 ------- THE LIBERTY CORPORATION ----------------------- (Exact name of registrant as specified in its charter) South Carolina 57-0507055 (State or other jurisdiction of (IRS Employer incorporation or organization) identification No.) Post Office Box 789, Wade Hampton Boulevard, Greenville, SC 29602 ------------------------------------------------------------------ (Address of principal executive offices) Registrant's telephone number, including area code: 864/609-8436 ------------ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- -------- Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of the latest practicable date. Number of shares Outstanding Title of each class as of June 30, 1997 ------------------- ---------------------------- Common Stock 20,207,580 Page 1 of 12 sequentially numbered pages. The Exhibit Index is on Page 10. 2 PART I, ITEM 1 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED BALANCE SHEETS
(In 000's) JUNE 30, 1997 December 31, 1996 ------------- ----------------- ASSETS (Unaudited) Investments: Fixed Maturity Securities available for sale, at market, cost of $1,536,596 at 6/30/97 and $1,465,213 at 12/31/96 $1,590,361 $1,517,539 Equity Securities, at market, cost of $68,390 at 6/30/97 and $61,431 at 12/31/96 81,043 75,591 Mortgage Loans 238,362 230,910 Investment Real Estate 59,436 132,696 Loans to Policyholders 99,816 98,816 Other Long-Term Investments 23,081 22,470 Short-Term Investments 250 250 ---------- ---------- Total Investments 2,092,349 2,078,272 Cash 25,064 36,774 Accrued Investment Income 21,295 20,817 Receivables 64,149 64,074 Receivable from Reinsurers 280,208 277,578 Deferred Acquisition Costs and Cost of Business Acquired 337,114 332,946 Buildings and Equipment 78,088 79,808 Intangibles Related to Television Operations 92,030 93,979 Goodwill Related to Insurance Acquisitions 34,788 35,608 Other Assets 44,182 40,909 ---------- ---------- Total Assets $3,069,267 $3,060,765 ========== ========== LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY LIABILITIES Policy Liabilities $1,937,231 $1,913,111 Notes, Mortgages and Other Debt 115,396 147,861 Long Term Debt 95,000 100,000 Accrued Income Taxes 1,391 5,163 Deferred Income Taxes 163,147 163,139 Accounts Payable and Accrued Expenses 97,831 101,209 Other Liabilities 3,770 3,822 ---------- ---------- Total Liabilities 2,413,766 2,434,305 ---------- ---------- Redeemable Preferred Stock 1994-A Series, $35.00 redemption value, shares issued and outstanding - 668,207 in 1997 and 1996 23,387 23,387 1994-B Series, $37.50 redemption value, shares issued and outstanding - 581,190 in 1997 and 592,334 in 1996 21,795 22,212 ---------- ---------- Total Redeemable Preferred Stock 45,182 45,599 ---------- ---------- Shareholders' Equity Common Stock 163,303 163,443 Series 1995-A Convertible Preferred Stock, $35.00 redemption value, 599,985 shares issued and outstanding 20,999 20,999 Unearned Stock Compensation (4,541) (7,168) Unrealized Investment Gains (Losses) 39,337 39,726 Cumulative Foreign Currency Translation Adjustment 527 (204) Retained Earnings 390,694 364,065 ---------- ---------- Total Shareholders' Equity 610,319 580,861 ---------- ---------- Total Liabilities, Redeemable Preferred Stock and Shareholders' Equity $3,069,267 $3,060,765 ========== ==========
See Notes to Consolidated and Condensed Financial Statements. 2 3 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED STATEMENTS OF INCOME
Three Months ended Six Months ended June 30, June 30, -------------------- ------------------------ (In 000's, except per share data) 1997 1996 1997 1996 --------- --------- ------ -------- (Unaudited) REVENUES Insurance Premiums & Policy Charges $ 88,921 $ 78,480 $175,362 $156,006 Broadcasting Revenues 37,215 34,786 67,236 63,666 Net Investment Income 39,277 38,263 78,332 75,579 Service Contract Revenue 1,705 1,829 3,430 3,620 Realized Investment Gains (Losses) 3,336 (1,006) 6,011 189 -------- -------- -------- -------- Total Revenues 170,454 152,352 330,371 299,060 -------- -------- -------- -------- EXPENSES Policyholder Benefits 58,051 52,990 116,656 110,518 Insurance Commissions 20,176 15,976 39,232 31,230 General Insurance Expenses 17,215 16,776 33,788 31,851 Amortization of Deferred Acquisition Costs 10,571 10,356 21,938 22,293 Broadcasting Expenses 24,233 23,479 46,167 45,231 Interest Expense 3,315 3,802 6,970 7,459 Other Expenses 5,043 4,508 9,648 5,353 -------- -------- -------- -------- Total Expenses 138,604 127,887 274,399 253,935 -------- -------- -------- -------- Income Before Income Taxes 31,850 24,465 55,972 45,125 Provision for Income Taxes 11,452 8,165 19,707 14,770 -------- -------- -------- -------- NET INCOME $ 20,398 $ 16,300 $ 36,265 $ 30,355 ======== ======== ======== ======== EARNINGS PER SHARE: (Exhibit 11) $ .94 $ .75 $ 1.66 $ 1.39 Dividends Per Common Share $ .20 $ .185 $ .385 $ .355
See Notes to Consolidated and Condensed Financial Statements. 3 4 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, ---------------------------- (In 000's) 1997 1996 ------------- ------------- (Unaudited) OPERATING ACTIVITIES Net Income $ 36,265 $ 30,355 Adjustments to reconcile net income to net cash provided (used) in operating activities: Increase in policy liabilities 4,627 44 (Decrease) increase in accounts payable and accrued liabilities (5,450) 2,525 (Increase) decrease in receivables (3,201) 81 Amortization of policy acquisition costs 21,938 22,293 Policy acquisition costs deferred (26,374) (25,123) Realized investment (gains) losses (6,011) (189) Gain on sale of operating assets (984) (1,257) Depreciation and amortization 9,800 10,913 Amortization of bond premium and discount (3,139) (1,262) Provision for deferred income taxes 106 (168) All other operating activities, net (5,450) (15,695) ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 22,127 22,517 INVESTMENT ACTIVITIES Investment securities sold 85,637 86,260 Investment securities matured or redeemed by issuer 50,892 41,479 Cost of investment securities acquired - available for sale (164,577) (164,560) Mortgage loans made (23,513) (24,069) Mortgage loan repayments 15,934 13,574 Purchase of investment real estate, buildings and equipment (11,633) (27,265) Sale of investment real estate, buildings and equipment 44,902 14,722 Purchase of short-term investments --- (52,559) Sales of short-term investments --- 52,309 All other investment activities, net (1,680) 2,942 ---------- ---------- NET CASH (USED IN) INVESTING ACTIVITIES (4,038) (57,167) FINANCING ACTIVITIES Proceeds from borrowings 1,444,000 1,384,500 Principal payments on debt (1,481,465) (1,372,495) Dividends paid (9,636) (9,045) Stock issued for employee benefit and compensation programs 812 344 Return of policyholders' account balances (20,851) (18,650) Receipts credited to policyholders' account balances 37,341 36,729 ---------- ---------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (29,799) 21,383 INCREASE (DECREASE) IN CASH (11,710) (13,267) Cash at beginning of year 36,774 43,741 ---------- ---------- CASH AT END OF PERIOD $ 25,064 $ 30,474 ========== ==========
See Notes to Consolidated and Condensed Financial Statements. 4 5 THE LIBERTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS June 30, 1997 (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited consolidated and condensed financial statements of The Liberty Corporation and Subsidiaries have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The information included is not necessarily indicative of the annual results that may be expected for the year ended December 31, 1997, but it does reflect all adjustments (which are of a normal and recurring nature) considered, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. For further information, refer to the consolidated financial statements and footnotes thereto included in The Liberty Corporation annual report on Form 10-K for the year ended December 31, 1996. 2. EARNINGS PER SHARE In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). This Standard is effective for financial statements issued for periods ending after December 15, 1997, with no early application permitted. This Standard replaces Accounting Principles Board Opinion No. 15, "Earnings Per Share" ("APB 15") by making the requirements for earnings per share information more consistent with international accounting standards. SFAS 128 replaces the presentation of primary earnings per share with basic earnings per share, which is a simpler calculation that assumes no dilution from common stock equivalents. Basic earnings per share is calculated by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. In addition to basic earnings per share, diluted earnings per share must also be presented, which is calculated similarly to fully diluted earnings per share pursuant to APB 15. The adoption of this Standard will not result in material differences from the earnings per share as calculated and reported under APB 15. 3. COMMITMENTS AND CONTINGENCIES At June 30, 1997, the Company had made commitments as shown below: (In 000's) Investment real estate $ 2,356 Mortgage loans and bonds 48,055 Other 12,885 ------- $63,296 =======
4. RECLASSIFICATIONS Certain reclassifications have been made in the previously reported financial statements to make the prior year amounts comparable to those of the current year. Such reclassifications had no effect on previously reported net income, total assets, or shareholders' equity. 5 6 PART I, ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Unaudited) OPERATIONS Consolidated second quarter net income of $20.4 million increased 25% over 1996's second quarter (see table below). Operating earnings (which exclude net realized investment gains and losses) increased $1.6 million (10%) over the second quarter of 1996. Net income reflects realized investment gains (after-tax) of $1.9 million in the second quarter of 1997, compared with losses of $0.6 million during the same period last year. Year-to-date net income of $36.3 million increased 19% over the comparable 1996 period. Operating earnings increased $2.6 million (9%) over the same period of 1996. Net income includes realized investment gains (after tax) of $3.6 million and $0.3 million for the first six months of 1997 and 1996, respectively. During the quarter Liberty implemented plans to reduce its direct investments in real estate. On May 14, 1997, Liberty completed the sale of its business rental property and the majority of its business park land development projects to a real estate investment trust (REIT). Liberty received cash, a note receivable, and partnership units of the REIT in exchange for the properties. Cash proceeds of approximately $35 million were used to repay debt. Concurrent with the decision to sell its business rental property and business park land development Liberty also de-emphasized its residential real estate operations. Future investments in residential real estate are expected to be limited to the amount necessary to complete on-going residential projects and the existing portfolio will be reduced as projects currently under development are sold. For financial reporting purposes all residential properties have been classified as held for disposal and are reported at the lower of cost or the fair market value less cost to sell. Included in realized gains for the quarter is a gain of approximately $2.5 million related to real estate.
Second Quarter Year-to-date ---------------- ------------------ 1997 1996 1997 1996 ------- ------- ------- ------- Income Before Income Taxes $31,850 $24,465 $55,972 $45,125 Income Taxes 11,452 8,165 19,707 14,770 ---------------- ----------------- Net Income $20,398 $16,300 $36,265 $30,355 ================ =================
Excluding realized gains and losses, the Company's insurance operations generated an increase in operating earnings of $0.9 million over the comparable prior year quarter, broadcasting reported an increase of $1.1 million, and the Parent Company had a $0.4 million higher loss than in the prior year. The $0.9 million operating earnings increase for insurance operations was due to a $0.6 million improvement in Liberty Life, a $0.5 million improvement in FamilySide preneed, and a decrease in operating earnings of $.02 million for Liberty Insurance Services, the Company's third party administration arm. The increase in Liberty Life was a result of strong year-over-year earnings growth in the Mortgage Protection division which continues to be driven by the success of an accidental death product. This more than offset a reduction in Agency (home service) earnings compared to the prior year which resulted from an increase in benefits expense. The increase in FamilySide for the quarter was driven by improved investment income and a positive comparison of commissions expense which included non-recurring expenses in the second quarter of 1996. The increase in operating earnings reported by the broadcasting operations was attributable to revenue growth of approximately $2.4 million, with the majority of the increase coming from the national and local categories. The 6 7 The Liberty Corporation and Subsidiaries Management's Discussion and Analysis of Operations June 30, 1997 improvement of these categories more than offset the expected decline in political revenues compared to the prior year quarter. The parent company reported a $0.4 million higher loss as higher operating expenses offset a reduction in interest expense resulting from the paydown of bank debt with proceeds from the sale of the commercial real estate previously mentioned. Consolidated revenues increased $18.1 million over the prior year quarter. Excluding realized gains and losses, revenues increased $13.8 million over the second quarter of 1996. Insurance premiums and policy charges increased $11.4 million (13%) over the prior year on the strength of premium growth in the Mortgage Protection division. FamilySide also reported an increase over the prior year. The year-to-date increase in premiums and policy charges also is primarily due to the Mortgage Protection division. Cosmos contributed $2.4 million of the revenue increase for the quarter. The increase in broadcasting revenues for the quarter was driven by a local revenue increase of $1.6 million, and a $1.5 million increase in national revenues. Year to date, national and local revenues increased by $2.2 million and $2.4 million, respectively. Benefits expense increased over the second quarter of 1996 by approximately $5.1 million. This increase was primarily incurred in the Agency division. The $4.2 million (26%) increase in insurance commissions for the quarter is related to the growth of the Company's accidental death product group sold through the Mortgage Protection division. A substantial amount of this line of business is marketed through a third party marketing organization. All payments to this third party, which include commissions and certain payments for certain general and administrative functions, are reported as commissions expense. The year-to-date variance of $8.0 million is also due to the reporting of the payments to this third party marketing organization. Interest expense decreased from the prior year second quarter by $0.5 million as a result of the paydown of debt using the proceeds from the sale of the company's commercial real estate. The year to date increase in other expenses is due to lower 1996 expenses resulting from the release of an accrual in 1996 related to a change in how vacation benefits are earned. INVESTMENTS As of June 30, 1997, Liberty's consolidated investment portfolio was carried at $2.1 billion. Approximately 76% of consolidated invested assets were in fixed maturity securities (bonds and redeemable preferred stocks), 11% were in mortgage loans, 5% in policy loans, with the balance consisting of equity securities (4%), real estate (3%), and other long term investments (1%). The overall average credit rating of fixed maturity securities as of June 30, 1997 was AA-. Less than investment grade securities comprised 2.5% of the fixed maturity portfolio at June 30, 1997. Approximately 42% of the Company's $1.6 billion bond portfolio at June 30, 1997, was comprised of mortgage-backed securities compared to 45% at December 31, 1996. Certain mortgage-backed securities are subject to significant prepayment or extension risk due to changes in interest rates. In periods of declining interest rates, mortgages may be repaid more rapidly than scheduled as borrowers refinance higher rate mortgages to take advantage of the lower current rates. As a result, holders of mortgage-backed securities may receive large prepayments on their investments which cannot be reinvested at interest rates comparable to the rates on the prepaid mortgages. In a rising interest rate environment refinancings are significantly curtailed and the payments to the holders of the securities decline, limiting the ability of the holder to reinvest at the higher interest rates. Mortgage-backed pass-through securities and sequential collateralized mortgage obligations ("CMO's"), which 7 8 The Liberty Corporation and Subsidiaries Management's Discussion and Analysis of Operations June 30, 1997 comprised 18% of the book value of the Company's mortgage-backed securities at June 30, 1997, and 17% at December 31, 1996, are sensitive to prepayment or extension risk. The remaining 82% and 83% of the Company's mortgage-backed investment portfolio at June 30, 1997 and December 31, 1996, respectively, consisted of planned amortization class ("PAC") instruments compared to approximately 80% at December 31, 1995. These investments are designed to amortize in a more predictable manner by shifting the primary prepayment and extension risk of the underlying collateral to investors in other tranches of the CMO. Mortgage loans of $238.4 million comprised 11% of the consolidated investment portfolio at June 30, 1997. Substantially all of these mortgage loans are commercial mortgages with a loan to value ratio not exceeding 75% when made. These loans are concentrated in the southeast primarily in the states of North Carolina, South Carolina, Georgia, Florida, Virginia, Louisiana and Tennessee. Investment real estate at June 30, 1997, of $59.4 million comprised 3% of the consolidated investment portfolio, compared with $132.7 million (6%) at December 31, 1996. As previously mentioned, the decline is associated with the sale of the Company's commercial real estate during the second quarter of 1997. The balance of Liberty's investment real estate assets consists primarily of residential land development properties. The majority of the Company's remaining investment real estate is located in South Carolina and Georgia. FINANCIAL POSITION In accordance with the provisions of SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities", the Company reported an unrealized gain of $39.3 million on fixed maturity securities available for sale and equity securities as of June 30, 1997. This compares with an unrealized gain of $39.7 million at December 31, 1996. Due to the requirements of SFAS No. 115, shareholders' equity will be subject to future volatility from the effects of interest rate fluctuations on the fair value of fixed maturity securities. CAPITAL, FINANCING AND LIQUIDITY The Company's net cash flow from operating activities was $22.1 million for the first six months of 1997 compared to $22.5 million for the same period of 1996. The Company's net cash used in investing activities was $4.0 million, and cash flow used in financing activities was $29.8 million. As previously mentioned, in consideration of the property contributed to the REIT, Liberty received cash, a note receivable, and partnership units in the REIT. For financial reporting, notes receivable of approximately $17.3 million and partnership units of the REIT of approximately $23.5 million are non-cash items for purposes of the Statement of Cash Flows. The majority of the cash used in financing activities was to repay debt following the sale of the commercial real estate. As a result of its activities, the Company had an $11.7 million decrease in cash compared to a decrease of $13.3 million in the same period in 1996. At June 30, 1997, the Company's borrowings and notes payable amounted to $210.4 million, a decrease from the $247.8 million outstanding at December 31, 1996. The Company has periodically used various interest rate swaps and caps to help minimize the impact of a potential significant rise in short term interest rates. (See the Company's 1996 Annual Report to Shareholders for a description of the interest rate swaps and caps in place.) The Company has not used interest rate swaps or any other derivative financial instruments to manage its interest rate exposure on interest sensitive universal-life type products. Other Company commitments are shown in Note 3 contained in the accompanying financial statements. Additional detail as to commitments and financing is contained in the Notes to the Consolidated Financial Statements in the Company's annual report on Form 10K for the year ended December 31, 1996. 8 9 The Liberty Corporation and Subsidiaries Management's Discussion and Analysis of Operations June 30, 1997 Further discussion of investments and valuation is contained in Notes 1 and 2 to the Consolidated Financial Statements in the Company's annual report on Form 10K for the year ended December 31, 1996. ACCOUNTING DEVELOPMENTS In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). This standard is effective for financial statements issued for periods ending after December 15, 1997, with no early application permitted. The adoption of this Standard is not expected to result in material differences from the earnings per share as calculated under APB 15. For additional information, see Note 2 to the Consolidated and Condensed Financial Statements within this report. In June, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This standard is effective for financial statements issued for periods beginning after December 15, 1997. This Standard will require companies to report and display comprehensive income and its components as part of the general financial statements. The most significant items which will effect Liberty's comprehensive income are the change in unrealized security gains and losses and the change in the foreign currency translation adjustment, both items which historically have been reported only as a component of shareholders' equity. This Standard requires reclassification of financial statements for earlier periods provided for comparative purposes. The Company plans to adopt this Standard January 1, 1998. In June, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS 131"). This standard is effective for financial statements issued for periods beginning after December 15, 1997. This Statement establishes standards which will require additional disclosures about a company's operating segments in annual financial statements, and beginning in the second year of application, will require companies to report selected information about operating segments in interim financial statements. The Company plans to adopt this Standard January 1, 1998. FORWARD LOOKING INFORMATION The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. Certain information contained herein or in any other written or oral statements made by, or on behalf of the Company, are or may be viewed as forward looking. Although the Company has used appropriate care in developing any such forward looking information, forward looking information involves risks and uncertainties that could significantly impact actual results. These risks and uncertainties include, but are not limited to, the following: changes in general economic conditions, including the performance of financial markets and interest rates; competitive, regulatory, or tax changes that affect the cost of or demand for the Company's products; and adverse litigation results. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future developments, or otherwise. 9 10 PART II, ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of shareholders of the registrant was held May 6, 1997. (b) The following four individuals were elected as directors to serve for three-year terms: W. Hayne Hipp, Buck Mickel, J. Thurston Roach, William B. Timmerman. Listed below are directors who continued their term of office after the meeting: Rufus C. Barkley, Jr., Edward E. Crutchfield, John R. Farmer, W. W. Johnson, William O. McCoy, John H. Mullin, III, Benjamin F. Payton and Eugene E. Stone IV. (c) Matters voted upon at the annual meeting are as follows:
WITHHELD/ BROKER FOR AGAINST ABSTENTIONS NONVOTES -------------------------------------------- To elect as directors: W. Hayne Hipp 19,824,691 --- 7,034 --- Buck Mickel 19,822,435 --- 9,260 --- J. Thurston Roach 19,824,687 --- 7,038 --- William B. Timmerman 19,680,838 --- 150,887 --- To elect as independent auditors: Ernst & Young LLP 19,769,583 5,766 56,376 --- To amend the Company's restated Articles of Incorporation regarding director liabilities 19,418,857 254,389 158,479 --- To approve the material amendments to, and eligible Participants under, the Performance Incentive Compensation Plan 16,907,455 1,834,089 91,644 998,537
(d) There were no settlements between the registrant and any other participants. PART II, ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K (a) A list of the exhibits filed with this report is included in the Index to Exhibits filed herewith. (b) The filing of Form 8-K was not required during the second quarter of 1997. INDEX TO EXHIBITS EXHIBIT 11 Consolidated Earnings Per Share Computation EXHIBIT 27 Financial Data Schedule (Electronic Filing Only) 10 11 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE LIBERTY CORPORATION Date: August 14, 1997 - ----------------------- (Registrant) /s/ Kenneth W. Jones - ----------------------- Kenneth W. Jones Corporate Controller /s/ Martha G. Williams - ----------------------- Martha G. Williams Vice President, General Counsel and Secretary 11 EX-11 2 CONSOLIDATED EARNINGS PER SHARE COMPUTATION 1 EXHIBIT 11 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED EARNINGS PER SHARE COMPUTATION
Three Months Ended Six Months Ended June 30 June 30, 1997 1996 1997 1996 ----------- ----------- ----------- ------------------- (Unaudited) PRIMARY SHARES Common shares outstanding - end of period 20,207,580 20,175,451 20,207,580 20,175,451 Weighted average common shares outstanding 20,250,445 20,140,321 20,242,589 20,110,230 Weighted average common stock options outstanding 192,047 132,893 200,008 146,570 Preferred stock considered a common stock equivalent 599,985 599,985 599,985 599,985 ----------- ----------- ----------- ----------- Total primary shares 21,042,477 20,873,199 21,042,582 20,856,785 =========== =========== =========== =========== FULLY DILUTED SHARES Weighted average common shares outstanding 20,250,445 20,140,321 20,242,589 20,110,230 Weighted average common stock options outstanding 198,206 132,904 209,636 146,597 Preferred stock considered a common stock equivalent 599,985 599,985 599,985 599,985 Assumed conversion of redeemable preferred stock not considered a common stock equivalent 1,254,465 1,262,033 1,256,851 1,261,657 ----------- ----------- ----------- ----------- Total fully diluted shares 22,303,101 22,135,243 22,309,061 22,118,469 =========== =========== =========== =========== NET INCOME $20,398,000 $16,300,000 $36,265,000 $30,355,000 Preferred stock dividends on redeemable preferred stock $ 661,000 $ 663,000 $ 1,322,000 $ 1,326,000 ----------- ----------- ----------- ----------- Net income available to common shares $19,737,000 $15,637,000 $34,943,000 $29,029,000 =========== =========== =========== =========== Primary earnings per share (net income available to common shares divided by total primary shares) $ 0.94 $ 0.75 $ 1.66 $ 1.39 =========== =========== =========== =========== Fully diluted earnings per share (net income divided by total fully diluted shares) $ 0.91 $ 0.74 $ 1.63 $ 1.37 =========== =========== =========== ===========
12 EX-27 3 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF LIBERTY CORPORATION FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 1,590,361 0 0 81,043 238,362 59,436 2,092,349 25,064 280,208 337,114 3,069,267 1,874,189 0 33,916 29,126 210,396 45,182 20,999 163,303 426,017 3,069,267 175,362 78,332 6,011 70,666 116,656 21,938 73,020 55,972 19,707 36,265 0 0 0 36,265 1.66 1.63 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----