-----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, VJBrSpoFah8ZednI49NCxKaSBjFvn+lxeRpH71zw9TPA1TAltry8cdD23XArWhXy CMxA/YBfxNkvLRkAbRr7VA== 0000950144-97-011726.txt : 19971111 0000950144-97-011726.hdr.sgml : 19971111 ACCESSION NUMBER: 0000950144-97-011726 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971110 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: SEC FILE NUMBER: 001-05846 FILM NUMBER: 97711162 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 FORM 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 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: 864/609-8256 ------------ 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 September 30, 1997 ------------------- ---------------------------- Common Stock 20,504,046 Page 1 of 13 sequentially numbered pages. The Exhibit Index is on Page 11. 2 PART I, ITEM 1 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED BALANCE SHEETS (In 000's)
September 30, December 31, 1997 1996 ------------- ------------ (Unaudited) ASSETS Investments: Fixed Maturity Securities available for sale, at market, cost of $1,570,443 at 9/30/97 and $1,465,213 at 12/31/96 $ 1,637,923 $ 1,517,539 Equity Securities, at market, cost of $57,199 at 9/30/97 and $61,431 at 12/31/96 75,563 75,591 Mortgage Loans 237,464 230,910 Investment Real Estate 54,208 132,696 Loans to Policyholders 100,590 98,816 Other Long-Term Investments 22,738 22,470 Short-Term Investments 250 250 ------------- ------------- Total Investments 2,128,736 2,078,272 Cash 36,852 36,774 Accrued Investment Income 21,527 20,817 Receivables 62,867 64,074 Receivable from Reinsurers 280,113 277,578 Deferred Acquisition Costs and Cost of Business Acquired 337,950 332,946 Buildings and Equipment 74,742 79,808 Intangibles Related to Television Operations 91,055 93,979 Goodwill Related to Insurance Acquisitions 34,381 35,608 Other Assets 49,576 40,909 ------------- ------------- Total Assets $ 3,117,799 $ 3,060,765 ============= ============= LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY Liabilities Policy Liabilities $ 1,949,813 $ 1,913,111 Notes, Mortgages and Other Debt 199,914 147,861 Long Term Debt --- 100,000 Accrued Income Taxes 2,671 5,163 Deferred Income Taxes 171,557 163,139 Accounts Payable and Accrued Expenses 103,030 101,209 Other Liabilities 3,834 3,822 ------------- ------------- Total Liabilities 2,430,819 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 - 568,022 in 1997 and 592,334 in 1996 21,301 22,212 ------------- ------------ Total Redeemable Preferred Stock 44,688 45,599 ------------- ------------ Shareholders' Equity Common Stock 175,221 163,443 Series 1995-A Convertible Preferred Stock, $35.00 redemption value, 599,985 shares issued and outstanding 20,999 20,999 Unearned Stock Compensation (11,921) (7,168) Unrealized Investment Gains 51,220 39,726 Cumulative Foreign Currency Translation Adjustment 826 (204) Retained Earnings 405,947 364,065 ------------- ------------ Total Shareholders' Equity 642,292 580,861 ------------- ------------ Total Liabilities, Redeemable Preferred Stock and Shareholders' Equity $ 3,117,799 $ 3,060,765 ============= ============
See Notes to Consolidated and Condensed Financial Statements. 2 3 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
Three Months ended Nine Months ended September 30, September 30, -------------------------- ------------------- (In 000's, except per share data) 1997 1996 1997 1996 ----------- ------------ -------- --------- (Unaudited) REVENUES Insurance Premiums & Policy Charges $ 88,445 $ 82,215 $ 263,807 $ 238,221 Broadcasting Revenues 33,517 34,706 100,753 98,372 Net Investment Income 40,122 38,949 118,454 114,528 Service Contract Revenue 1,872 1,971 5,302 5,591 Realized Investment Gains (Losses) 2,728 (1,372) 8,739 (1,183) ------------ ------------ ------------ --------- Total Revenues 166,684 156,469 497,055 455,529 ------------ ------------ ------------ --------- EXPENSES Policyholder Benefits 55,637 52,820 172,293 163,338 Insurance Commissions 20,030 17,702 59,262 48,932 General Insurance Expenses 16,796 25,779 50,584 57,630 Amortization of Deferred Acquisition Costs 11,167 39,656 33,105 61,949 Broadcasting Expenses 24,115 24,034 70,282 69,265 Interest Expense 3,123 3,962 10,093 11,421 Other Expenses 4,822 8,747 14,470 14,100 ------------ ------------ ------------ --------- Total Expenses 135,690 172,700 410,089 426,635 ------------ ------------ ------------ --------- Income (Loss) Before Income Taxes 30,994 (16,231) 86,966 28,894 Income Tax Provision (Benefit) 10,765 (5,411) 30,472 9,359 NET INCOME (LOSS) $ 20,229 $ (10,820) $ 56,494 $ 19,535 ============ ============ ============ ========= EARNINGS (LOSS) PER SHARE: (Exhibit 11) $ 0.92 $ (0.55) $ 2.58 $ 0.84 Dividends Per Common Share $ .20 $ .185 $ .585 $ .54
See Notes to Consolidated and Condensed Financial Statements. 3 4 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, ------------------------------- (In 000's) 1997 1996 ------------------------------- (Unaudited) OPERATING ACTIVITIES Net Income $ 56,494 $ 19,535 Adjustments to reconcile net income to net cash provided (used) in operating activities: Increase in policy liabilities 7,186 (195) (Decrease) increase in accounts payable and accrued liabilities (285) 25,496 (Increase) decrease in receivables (2,055) 9,472 Amortization of policy acquisition costs 33,105 61,949 Policy acquisition costs deferred (39,549) (38,204) Realized investment (gains) losses (8,739) 1,183 Gain on sale of operating assets (1,604) (1,780) Depreciation and amortization 15,389 16,962 Amortization of bond premium and discount (5,354) (3,166) Provision for deferred income taxes 3,205 (15,338) All other operating activities, net (9,456) (20,856) ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 48,337 55,058 INVESTMENT ACTIVITIES Investment securities sold 108,522 121,703 Investment securities matured or redeemed by issuer 77,770 55,619 Cost of investment securities acquired - available for sale (229,800) (229,809) Mortgage loans made (34,112) (31,173) Mortgage loan repayments 27,290 16,875 Purchase of investment real estate, buildings and equipment (17,795) (33,766) Sale of investment real estate, buildings and equipment 54,959 21,663 Purchase of short-term investments --- (64,406) Sales of short-term investments --- 64,156 All other investment activities, net (767) (2,311) ----------- ----------- NET CASH (USED IN) INVESTING ACTIVITIES (13,933) (81,449) FINANCING ACTIVITIES Proceeds from borrowings 2,001,000 2,237,703 Principal payments on debt (2,048,947) (2,234,404) Dividends paid (14,613) (13,704) Stock issued for employee benefit and compensation programs 3,446 1,062 Return of policyholders' account balances (28,756) (26,633) Receipts credited to policyholders' account balances 53,544 54,605 ----------- ----------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (34,326) 18,629 INCREASE (DECREASE) IN CASH 78 (7,762) Cash at beginning of year 36,774 43,741 ----------- ----------- CASH AT END OF PERIOD $ 36,852 $ 35,979 =========== ===========
See Notes to Consolidated and Condensed Financial Statements. 4 5 THE LIBERTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS September 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. SEGMENT REPORTING 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. SFAS 131 requires that a public company report financial and descriptive information on the basis that it is reported internally for evaluating segment performance and deciding how to allocate resources to segments. The adoption of this Standard will have no impact on the Company's consolidated results of operations, financial position or cash flows, and is expected to have very little impact on the Company's financial statement disclosures. 4. COMMITMENTS AND CONTINGENCIES At September 30, 1997, the Company had made commitments as shown below:
(In 000's) Investment real estate $1,238 Mortgage loans and bonds 44,300 Other 8,806 ----- $54,344 =======
5 6 5. 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. 6 7 PART I, ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Unaudited) OPERATIONS Consolidated third quarter net income totaled $20.2 million, compared with a net loss of $10.8 million for the third quarter of 1996 (see table below). The third quarter of 1996 included a non-recurring after-tax charge of $26.9 million related principally to the write-off of deferred acquisition costs determined to no longer be recoverable following an extensive study of the Company's insurance product lines. In the accompanying financial statements, the effects of the special charges are reported in general insurance expenses and amortization of deferred acquisition costs on the income statement, and deferred acquisition costs and other assets on the balance sheet. Excluding the special charges, the Company would have reported net income of $16.1 million for the third quarter of 1996. Operating earnings (which exclude net realized investment gains and losses and the special charge in 1996) increased $1.5 million (9%) over the third quarter of 1996. Net income reflects realized investment gains (after-tax) of $1.7 million in the third quarter of 1997, compared with losses of $0.9 million during the same period last year. Year-to-date net income of $56.5 million increased $37.0 million over the comparable 1996 period. Operating earnings increased $4.1 million (9%) over the same period of 1996. Net income includes realized investment gains (after-tax) of $5.3 million for the first nine months of 1997, compared with losses of $0.6 million for the first nine months of 1996.
Third Quarter Year-to-date -------------- ------------ 1997 1996 1997 1996 ---------------------------- ------------------------- Income Before Income Taxes and Special Charges $ 30,994 $ 24,412 $ 86,966 $ 69,537 Income Taxes 10,765 8,288 30,472 23,058 ----------------------------- ------------------------ Income Before Special Charges 20,229 16,124 56,494 46,479 Special Charges --- (40,643) --- (40,643) Income Tax Benefit from Special Charges --- (13,699) --- (13,699) ----------------------------- ------------------------- Net Income $ 20,229 $ (10,820) $ 56,494 $ 19,535 ============================= =========================
Excluding realized gains and losses, the Company's insurance operations generated an increase in operating earnings of $2.8 million over the comparable prior year quarter, broadcasting reported a decrease of $0.7 million, and the Parent Company had a $0.6 million higher loss than in the prior year. The $2.8 million operating earnings increase for insurance operations was due to a $2.7 million improvement in Liberty Life, combined with a $0.1 million improvement in the FamilySide preneed operations. The increase in Liberty Life was a result of strong year-over-year earnings growth in both the Agency (home service) division and the Mortgage Protection division. The improvement in Agency was driven by higher net investment income compared with the prior year, along with lower deferred acquisition cost amortization. Mortgage Protection reported an increase of $1.5 million over the prior year as that division continues to be driven by the success of an accidental death product. The nominal increase in FamilySide's reported earnings compared with the prior year was a result of improvements in investment income and deferred acquisition cost amortization offsetting negative mortality experience compared to the prior year. The broadcasting operations reported a 14% decrease in operating earnings compared with the comparable prior year quarter. This was anticipated as the third quarter of 1996 included substantial Olympic and political revenues which would not repeat this year. The parent company reported a $0.6 million higher loss as higher operating expenses offset a reduction in interest expense resulting from the paydown of bank debt in the second quarter of 1997 with proceeds from the sale of the commercial real estate. 7 8 The Liberty Corporation and Subsidiaries Management's Discussion and Analysis of Operations September 30, 1997 Consolidated revenues increased $10.2 million over the prior year quarter. Excluding realized gains and losses, revenues increased $6.3 million over the third quarter of 1996. Insurance premiums and policy charges increased $6.2 million (8%) over the prior year on the strength of premium growth in the Mortgage Protection division. The 11% year-to-date increase in premiums and policy charges also is primarily due to the Mortgage Protection division. The $2.3 million (13%) 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 $10.3 million is also due to the reporting of the payments to this third party marketing organization. As previously mentioned, the decrease in general insurance expenses, deferred acquisition cost amortization and other expenses was due to the impact of the special charges during the third quarter of 1996. Interest expense decreased from the prior year third quarter by $0.8 million as a result of the paydown of debt using the cash proceeds from the sale of the company's commercial real estate. Additionally, during the third quarter of 1997 the Company repaid its term loan using funds from the Company's revolving credit facility. This resulted in interest savings for the quarter as current floating rates are lower than the rate the Company was paying on the term loan. INVESTMENTS As of September 30, 1997, Liberty's consolidated investment portfolio was carried at $2.1 billion. Approximately 77% 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 (2%), and other long term investments (1%). The overall average credit rating of fixed maturity securities as of September 30, 1997 was AA-. Less than investment grade securities comprised 2.2% of the fixed maturity portfolio at September 30, 1997. Approximately 40% of the Company's $1.6 billion bond portfolio at September 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 comprised 19% of the book value of the Company's mortgage-backed securities at September 30, 1997, and 17% at December 31, 1996, are sensitive to prepayment or extension risk. The remaining 81% and 83% of the Company's mortgage-backed investment portfolio at September 30, 1997 and December 31, 1996, respectively, consisted of planned amortization class ("PAC") instruments. 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 $237.5 million comprised 11% of the consolidated investment portfolio at September 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. 8 9 The Liberty Corporation and Subsidiaries Management s Discussion and Analysis of Operations September 30, 1997 Investment real estate at September 30, 1997, of $54.2 million comprised 2% of the consolidated investment portfolio, compared with $132.7 million (6%) at December 31, 1996. The decline is associated with the sale of the Company's commercial real estate to a real estate investment trust 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 $51.2 million on fixed maturity securities available for sale and equity securities as of September 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 $48.3 million for the first nine months of 1997 compared to $55.1 million for the same period of 1996. The Company's net cash used in investing activities was $13.9 million, and cash flow used in financing activities was $34.3 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 a $0.1 million increase in cash compared to a decrease of $7.8 million in the same period in 1996. At September 30, 1997, the Company's borrowings and notes payable amounted to $199.9 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 4 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. 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. 9 10 The Liberty Corporation and Subsidiaries Management s Discussion and Analysis of Operations September 30, 1997 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. 10 11 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 third quarter of 1997. INDEX TO EXHIBITS EXHIBIT 11 Consolidated Earnings Per Share Computation EXHIBIT 27 Financial Data Schedule (Electronic Filing Only) 11 12 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 - ----------------------- (Registrant) /s/ Kenneth W. Jones Date: November 10, 1997 - -------------------- Kenneth W. Jones Corporate Controller /s/ Martha G. Williams Date: November 10, 1997 - ---------------------- Martha G. Williams Vice President, General Counsel and Secretary 12 EX-11 2 CONSOLIDATED EARNINGS PER SHARE 1 EXHIBIT 11 THE LIBERTY CORPORATION AND SUBSIDIARIES CONSOLIDATED EARNINGS PER SHARE COMPUTATION
Three Months Ended Nine Months Ended September 30 September 30, -------------------------- ------------------------- 1997 1996 1997 1996 ----------- ------------ ----------- ----------- (Unaudited) PRIMARY SHARES Common shares outstanding - end of period 20,504,046 20,186,351 20,504,046 20,186,351 Weighted average common shares outstanding 20,471,752 20,183,661 20,318,976 20,134,707 Weighted average common stock options outstanding 234,238 144,040 211,418 145,726 Preferred stock considered a common stock equivalent 599,985 599,985 599,985 599,985 ----------- ------------ ----------- ----------- Total primary shares 21,305,975 20,927,686 21,130,379 20,880,418 =========== ============ =========== =========== FULLY DILUTED SHARES Weighted average common shares outstanding 20,471,752 20,183,661 20,318,976 20,134,707 Weighted average common stock options outstanding 252,124 171,368 223,798 154,854 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 1,246,703 1,262,033 1,253,468 1,261,782 ----------- ------------ ----------- ----------- Total fully diluted shares 22,570,564 22,217,047 22,396,227 22,151,328 =========== ============ ============ ============ NET INCOME 20,229,000 $(10,820,000) $56,494,000 $19,535,000 Preferred stock dividends on redeemable preferred stock $ 654,000 $ 663,000 $ 1,976,000 $ 1,989,000 ----------- ------------ ----------- ----------- Net income available to common shares $19,575,000 $(11,483,000) $54,518,000 $17,546,000 =========== ============ =========== =========== Primary earnings per share (net income available to common shares divided by total primary shares) $ 0.92 $ (0.55) $ 2.58 $ 0.84 =========== ============ =========== =========== Fully diluted earnings per share (net income divided by total fully diluted $ 0.90 $ (0.55) $ 2.52 $ 0.84 shares) =========== ============ =========== ===========
13 EX-27 3 FINANCIAL DATA SCHEDULE
7 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1,637,923 0 0 75,563 237,464 54,208 2,128,736 36,852 280,113 337,950 3,117,799 1,884,970 0 35,676 29,167 199,914 44,688 20,999 175,221 446,072 3,117,799 263,807 118,454 8,739 106,055 172,293 33,105 109,846 86,966 30,472 56,494 0 0 0 56,494 2.58 2.52 0 0 0 0 0 0 0
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