##### 



SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-K/A
 (Amendment No. 2)
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the fiscal year ended December 31, 2003
 or
 o
    
    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
  South Carolina
    
    57-0507055(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 Post Office Box 502, 135 South Main Street, Greenville, S. C. 29602(Address of principal executive offices)                (Zip Code)
 (864) 241-5400
  Name of Each Exchange onTitle of Each Class
    
    Which RegisteredCommon Stock, no par value per share
    
    New York Stock ExchangeRights to Purchase Series A Participating Cumulative Preferred Stock
    
    New York Stock Exchange
 þ o
 o
 þ o
  Common Stock, No Par Value
    
    $933,941,333
  Common Stock, No Par Value
    
    18,905,695




---



##### 



Explanatory Note:
  Part I
 Item 1. Business
 General
  Managements Discussion and Analysis
 Television Broadcasting and Related Operations
  PercentageNetwork
    
    
    
    
    
    of U.S.Market
    
    
    
    
    
    
    
    
    
    Contract
    
    Station
    
    televisionRank
    
    
    
    
    
    Network
    
    Expiration
    
    Rank
    
    households
    
    Date
    
    DateMarket
    
    Station
    
    (1)
    
    Channel
    
    Affiliation
    
    (2)
    
    (3)
    
    (4)
    
    Formed
    
    AcquiredLouisville, KY
    
    WAVE-TV
    
    
    50
    
    
    
    3
    
    
    NBC
    
    
    2011
    
    
    
    3
    
    
    
    0.57
    %
    
    
    1948
    
    
    
    1981Toledo, OH
    
    WTOL-TV
    
    
    69
    
    
    
    11
    
    
    CBS
    
    
    2014
    
    
    
    1
    
    
    
    0.40
    
    
    
    1958
    
    
    
    1965Columbia, SC
    
    WIS-TV
    
    
    84
    
    
    
    10
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.33
    
    
    
    1953
    
    
    
    1953Jackson, MS
    
    WLBT-TV
    
    
    90
    
    
    
    3
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.30
    
    
    
    1953
    
    
    
    2000Harlingen, TX
    
    KGBT-TV
    
    
    97
    
    
    
    4
    
    
    CBS
    
    
    2014
    
    
    
    3
    
    
    
    0.27
    
    
    
    1955
    
    
    
    1998Evansville, IN
    
    WFIE-TV
    
    
    99
    
    
    
    14
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.26
    
    
    
    1953
    
    
    
    1981Tyler, TX
    
    KLTV-TV
    
    
    107
    
    
    
    7
    
    
    ABC
    
    
    2002
    *
    
    
    1
    
    
    
    0.24
    
    
    
    1954
    
    
    
    2000Lufkin, TX
    
    KTRE-TV
    
    
    107
    
    
    
    9
    
    
    ABC
    
    
    2002
    *
    
    
    1
    
    
    
    0.24
    
    
    
    1955
    
    
    
    2000(satellite of KLTV)Montgomery, AL
    
    WSFA-TV
    
    
    115
    
    
    
    12
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.23
    
    
    
    1959
    
    
    
    1959Wilmington, NC
    
    WWAY-TV
    
    
    142
    
    
    
    3
    
    
    ABC
    
    
    2005
    
    
    
    2
    
    
    
    0.14
    
    
    
    1964
    
    
    
    1998Albany, GA
    
    WALB-TV
    
    
    145
    
    
    
    10
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.14
    
    
    
    1954
    
    
    
    1998Lubbock, TX
    
    KCBD-TV
    
    
    147
    
    
    
    11
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.14
    
    
    
    1953
    
    
    
    2000Biloxi, MS
    
    WLOX-TV
    
    
    156
    
    
    
    13
    
    
    ABC
    
    
    2004
    
    
    
    1
    
    
    
    0.12
    
    
    
    1962
    
    
    
    1995Lake Charles, LA
    
    KPLC-TV
    
    
    175
    
    
    
    7
    
    
    NBC
    
    
    2011
    
    
    
    1
    
    
    
    0.09
    
    
    
    1954
    
    
    
    1986Jonesboro, AR
    
    KAIT-TV
    
    
    179
    
    
    
    8
    
    
    ABC
    
    
    2004
    
    
    
    1
    
    
    
    0.08
    
    
    
    1963
    
    
    
    1986
 
 *
    
    KLTV-TV and KTRE-TV have been operating under short term renewals of their existing ABC
affiliation contracts since their original expiration date in 2002. It is anticipated that new
affiliation contract negotiations will be completed and the Company will enter into long term
contracts for these stations sometime during 2004.(1)
    
    Market rank is based on the relative size of the designated market areas among the 212
generally recognized designated market areas in the U.S.(2)
    
    Contracts may be subject to renewal provisions that effectively extend the expiration date.(3)
    
    Station rank in its market area based on Nielsen Media Research average 3 book estimates
(February, May, and November) 2003 ratings (Sun.  Sat.; 6:00A-2:00A).(4)
    
    Based on Nielsen Media Research estimates.
 2




---



##### 



Network Affiliations
     3




---



##### 



Sources of Television Operating Revenues
  2003
    
    2002
    
    2001Local and regional advertising
    
    
    59
    %
    
    
    55
    %
    
    
    61
    %National spot advertising
    
    
    31
    
    
    
    29
    
    
    
    32Network compensation
    
    
    2
    
    
    
    2
    
    
    
    4Political advertising
    
    
    5
    
    
    
    12
    
    
    
    1Other
    
    
    3
    
    
    
    2
    
    
    
    2
    Competition
   4




---



##### 



Mandated Conversion to Digital Technology
   Federal Regulation of Broadcasting
  5




---



##### 



FCC Regulation.
 
    
    the assignment of frequency bands of broadcast television;
    
    the approval of a television stations frequency, location, and operating power;
    
    the issuance, renewal, revocation or modification of a television stations FCC license;
    
    the approval of changes in the ownership or control of a television stations license;
    
    the regulation of equipment used by television stations; and
    
    the adoption and implementation of regulations and policies concerning the ownership
and operation of television stations.
 License Renewals, Assignments and Transfers .
 Multiple and Cross-Ownership Rules
     6




---



##### 



Alien Ownership.
 Restrictions on Broadcast Advertising .
   Cable and Satellite Must-Carry or Retransmission Consent Rights .
 7




---



##### 



Advanced Television Technology.
    Recent Developments, Proposed Legislation, and Regulation.
  Other Business.
 8




---



##### 



Industry Segment Data.
 Employees.
 Internet
Address. www.libertycorp.com.
 Item 2. Properties
   Item 3. Legal Proceedings
  Item 4. Submission of Matters to a Vote of Shareholders
  9




---



##### 



PART II
 Item 5. Market for the Registrants Common Stock and Related Security Stockholder Matters
  2003
    
    
    
    
    
    
    
    
    
    2002
    
    
    
    
    
    
    
    
    
    2001Quarterly
    
    
    
    
    
    
    
    
    
    Quarterly
    
    
    
    
    
    
    
    
    
    QuarterlyMarket Price Per Share
    
    Dividend
    
    Market Price Per Share
    
    Dividend
    
    Market Price Per Share
    
    DividendHigh
    
    Low
    
    Per Share
    
    High
    
    Low
    
    Per Share
    
    High
    
    Low
    
    Per ShareFourth Quarter
    
    $
    47.25
    
    
    $
    41.89
    
    
    $
    0.24
    
    
    $
    40.50
    
    
    $
    32.10
    
    
    $
    0.22
    
    
    $
    44.25
    
    
    $
    39.00
    
    
    $
    0.22Third Quarter
    
    
    45.00
    
    
    
    40.91
    
    
    
    0.24
    
    
    
    40.08
    
    
    
    28.50
    
    
    
    0.22
    
    
    
    42.00
    
    
    
    38.45
    
    
    
    0.22Second Quarter
    
    
    45.30
    
    
    
    40.46
    
    
    
    0.24
    
    
    
    45.00
    
    
    
    39.00
    
    
    
    0.22
    
    
    
    40.00
    
    
    
    33.80
    
    
    
    0.22First Quarter
    
    
    43.60
    
    
    
    37.85
    
    
    
    0.24
    
    
    
    42.51
    
    
    
    39.20
    
    
    
    0.22
    
    
    
    42.32
    
    
    
    33.25
    
    
    
    0.22
  Registrar and Transfer Agent
 For a free copy of the 10-K or other information, contact:
 Written shareholder correspondence and requests for transfer should be sent to:    th
 Dividend Reinvestment and Direct Stock Purchase and Sale Plan
  Direct Deposit of Cash Dividends
  Equity Compensation Plan Information
 Number of SecuritiesRemaining Available ForNumber of Securities To Be
    
    
    Weighted-Average
    
    
    Future Issuance UnderIssued Upon Exercise of
    
    
    Exercise Price of
    
    
    Equity Compensation PlansOutstanding Options,
    
    
    Outstanding Options,
    
    
    ( Excluding SecuritiesPlan Category
    
    Warrants and Rights
    
    
    Warrants, and Rights
    
    
    Reflected in Column(a))(a)
    
    
    (b)
    
    
    (c)Equity compensation
plans approved by
security holders
    
    
    1,034,210
    
    
    $
    35.09
    
    
    
    669,138Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    1,034,210
    
    
    $
    35.09
    
    
    
    669,138
 10




---



##### 



Item 6. Selected Financial Data
 Years Ended December 31,(In $000s, except per share data)
    
    2003
    
    2002
    
    2001
    
    2000
    
    1999Net revenues *
    
    $
    200,284
    
    
    $
    206,678
    
    
    $
    178,431
    
    
    $
    173,672
    
    
    $
    154,000Income from continuing operations
    
    $
    23,897
    
    
    $
    32,995
    
    
    $
    16,576
    
    
    $
    24,995
    
    
    $
    18,630Income from discontinued operations**
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,563
    
    
    
    25,939Cumulative effect of a change in accounting
principle***
    
    
    
    
    
    
    (47,388
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    23,897
    
    
    $
    (14,393
    )
    
    $
    16,576
    
    
    $
    53,558
    
    
    $
    44,569Adjusted net income (loss)****
    
    $
    23,897
    
    
    $
    32,995
    
    
    $
    25,947
    
    
    $
    57,715
    
    
    $
    46,842Income from continuing operations per diluted share
    
    $
    1.24
    
    
    $
    1.68
    
    
    $
    0.84
    
    
    $
    1.27
    
    
    $
    0.91Income from discontinued operations per diluted share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.45
    
    
    
    1.34Cumulative effect of a change in accounting
principle per diluted share***
    
    
    
    
    
    
    (2.41
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss) per diluted share
    
    $
    1.24
    
    
    $
    (0.73
    )
    
    $
    0.84
    
    
    $
    2.72
    
    
    $
    2.25Adjusted net income per diluted share****
    
    $
    1.24
    
    
    $
    1.68
    
    
    $
    1.32
    
    
    $
    2.93
    
    
    $
    2.42Dividends per common share
    
    $
    0.96
    
    
    $
    0.88
    
    
    $
    0.88
    
    
    $
    0.88
    
    
    $
    0.88Assets
    
    $
    662,265
    
    
    $
    670,751
    
    
    $
    730,195
    
    
    $
    896,007
    
    
    $
    858,302Notes, mortgages and other debts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    234,000Shareholders equity
    
    $
    522,000
    
    
    $
    538,236
    
    
    $
    581,671
    
    
    $
    580,993
    
    
    $
    554,224
 
 *
    
    During 2000, the Company acquired four television stations located in Texas and
Mississippi.**
    
    In November of 2000, the Company sold it insurance operations.***
    
    See Note 4 of the Consolidated Financial Statements regarding the cumulative effect of a change
in accounting principle related to the adoption of Statement of Financial Accounting Standards No.
142 Goodwill and Other Intangible Assets****
    
    Includes adjustments to reflect the effect of Statement of Financial
Accounting Standards No. 142 had it been effective as of January 1, 1999. Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
  FORWARD-LOOKING INFORMATION
  11




---



##### 



EXECUTIVE SUMMARY
    SIGNIFICANT ACCOUNTING POLICIES AND ASSUMPTIONS
        12




---



##### 



SEASONALITY OF TELEVISION REVENUES
   SUMMARY OF CONSOLIDATED RESULTS
 The Year 2003 Compared With 2002
 (In $000s)
    
    2003
    
    
    2002
    
    
    ChangeNational
    
    $
    67,045
    
    
    $
    64,174
    
    
    $
    2,871Local and regional
    
    
    127,233
    
    
    
    122,542
    
    
    
    4,691Political
    
    
    10,657
    
    
    
    27,299
    
    
    
    (16,642
    )Network
    
    
    4,229
    
    
    
    4,324
    
    
    
    (95
    )Other broadcasting
    
    
    7,097
    
    
    
    6,260
    
    
    
    837Gross station revenues
    
    
    216,261
    
    
    
    224,599
    
    
    
    (8,338
    )Agency commissions
    
    
    (31,625
    )
    
    
    (34,147
    )
    
    
    2,522Station revenues (net of commissions)
    
    
    184,636
    
    
    
    190,452
    
    
    
    (5,816
    )Cable and other (net of commissions)
    
    
    15,648
    
    
    
    16,226
    
    
    
    (578
    )Net revenues
    
    $
    200,284
    
    
    $
    206,678
    
    
    $
    (6,394
    )
     13




---



##### 



The Year 2002 Compared With 2001
 (In $000s)
    
    2002
    
    
    2001
    
    
    ChangeNational
    
    $
    64,174
    
    
    $
    61,476
    
    
    $
    2,698Local and regional
    
    
    122,542
    
    
    
    118,034
    
    
    
    4,508Political
    
    
    27,299
    
    
    
    1,957
    
    
    
    25,342Network
    
    
    4,324
    
    
    
    7,894
    
    
    
    (3,570
    )Other broadcasting
    
    
    6,260
    
    
    
    3,172
    
    
    
    3,088Gross station revenues
    
    
    224,599
    
    
    
    192,533
    
    
    
    32,066Agency commissions
    
    
    (34,147
    )
    
    
    (27,322
    )
    
    
    (6,825
    )Station revenues (net of commissions)
    
    
    190,452
    
    
    
    165,211
    
    
    
    25,241Cable and other (net of commissions)
    
    
    16,226
    
    
    
    13,220
    
    
    
    3,006Net revenues
    
    $
    206,678
    
    
    $
    178,431
    
    
    $
    28,247
     14




---



##### 



Goodwill and Other Intangible Assets
    INVESTMENTS
   LIQUIDITY AND CAPITAL RESOURCES
   15




---



##### 



OFF-BALANCE SHEET ARRANGEMENTS
  16




---



##### 



TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
 Payments Due By PeriodLess
    
    
    
    
    
    
    
    
    
    
    MoreContractual Obligations
    
    
    
    
    
    Than 1
    
    
    1-3
    
    
    3-5
    
    
    Than 5(In $000s)
    
    Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-Term Debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    1,524
    
    
    
    694
    
    
    
    744
    
    
    
    68
    
    
    
    18Purchase Obligations
    
    
    14,350
    
    
    
    9,628
    
    
    
    4,720
    
    
    
    2
    
    
    
    Other Long-Term
Liabilities Reflected on
the Registrants Balance
Sheet
Under GAAP
    
    
    6,621
    
    
    
    500
    
    
    
    913
    
    
    
    97
    
    
    
    5,111Total
    
    $
    22,495
    
    
    $
    10,822
    
    
    $
    6,377
    
    
    $
    167
    
    
    $
    5,129
  Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    17




---



##### 



Item 8. Financial Statements and Supplementary Information
 CONSOLIDATED BALANCE SHEETS
THE LIBERTY CORPORATION AND SUBSIDIARIES  (In $000s)
 As of December 31,2003
    
    
    2002ASSETSCurrent assets:Cash and cash equivalents
    
    $
    62,177
    
    
    $
    67,917Receivables (net of allowance for doubtful
accounts of $1,738 and $1,963 in 2003 and
2002, respectively)
    
    
    42,364
    
    
    
    42,069Program rights
    
    
    4,564
    
    
    
    4,433Prepaid and other current assets
    
    
    3,013
    
    
    
    2,982Income taxes receivable
    
    
    
    
    
    
    2,370Deferred income taxes
    
    
    2,183
    
    
    
    5,508Total current assets
    
    
    114,301
    
    
    
    125,279Property, plant, and equipment:Land
    
    
    5,657
    
    
    
    5,639Buildings and improvements
    
    
    48,969
    
    
    
    52,638Furniture and equipment
    
    
    167,775
    
    
    
    157,401Less: Accumulated depreciation
    
    
    (125,417
    )
    
    
    (120,409
    )96,984
    
    
    
    95,269Intangible assets subject to amortization (net
of $841 and $751 accumulated amortization in
2003 and 2002, respectively)
    
    
    270
    
    
    
    369FCC licenses
    
    
    304,525
    
    
    
    304,285Goodwill
    
    
    101,387
    
    
    
    101,387Investments and other assets
    
    
    44,798
    
    
    
    44,162Total assets
    
    $
    662,265
    
    
    $
    670,751LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    23,817
    
    
    $
    24,433Program contract obligations
    
    
    4,734
    
    
    
    4,486Accrued income taxes payable
    
    
    3,874
    
    
    
    Total current liabilities
    
    
    32,425
    
    
    
    28,919Unearned revenue
    
    
    11,802
    
    
    
    5,637Deferred income taxes
    
    
    89,417
    
    
    
    91,647Other liabilities
    
    
    6,621
    
    
    
    6,312Total liabilities
    
    
    140,265
    
    
    
    132,515Shareholders equity:Common stock (authorized  50,000,000
shares, no par value, shares issued and
outstanding  18,930,500 shares in 2003,
19,423,317 shares in 2002)
    
    
    71,788
    
    
    
    92,978Unearned stock compensation
    
    
    (4,405
    )
    
    
    (3,802
    )Retained earnings
    
    
    454,379
    
    
    
    448,887Unrealized investment gains
    
    
    238
    
    
    
    173Total shareholders equity
    
    
    522,000
    
    
    
    538,236Total liabilities and shareholders equity
    
    $
    662,265
    
    
    $
    670,751
 See notes to consolidated financial statements.
 18




---



##### 



CONSOLIDATED STATEMENTS OF INCOME
THE LIBERTY CORPORATION AND SUBSIDIARIES  (In $000s, except per share data)
 For the Years Ended December 31,2003
    
    
    2002
    
    
    2001REVENUESStation revenues (net of commissions)
    
    $
    184,636
    
    
    $
    190,452
    
    
    $
    165,211Cable advertising (net of commissions) and other revenues
    
    
    15,648
    
    
    
    16,226
    
    
    
    13,220Net revenues
    
    
    200,284
    
    
    
    206,678
    
    
    
    178,431EXPENSESOperating expenses
    
    
    121,642
    
    
    
    115,979
    
    
    
    104,054Amortization of program rights
    
    
    7,214
    
    
    
    7,281
    
    
    
    7,937Depreciation and amortization of intangibles
    
    
    18,462
    
    
    
    17,762
    
    
    
    31,970Corporate, general, and administrative expenses
    
    
    14,382
    
    
    
    13,481
    
    
    
    11,820Total operating expenses
    
    
    161,700
    
    
    
    154,503
    
    
    
    155,781Operating income
    
    
    38,584
    
    
    
    52,175
    
    
    
    22,650Net investment income (loss)
    
    
    (348
    )
    
    
    616
    
    
    
    4,086Income before income taxes and the cumulative effect of a change
in accounting principle
    
    
    38,236
    
    
    
    52,791
    
    
    
    26,736Provision for income taxes
    
    
    14,339
    
    
    
    19,796
    
    
    
    10,160INCOME BEFORE THE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE
    
    
    23,897
    
    
    
    32,995
    
    
    
    16,576Cumulative effect of a change in accounting principle (net
of $29,045 of income taxes)
    
    
    
    
    
    
    (47,388
    )
    
    
    NET INCOME (LOSS)
    
    $
    23,897
    
    
    $
    (14,393
    )
    
    $
    16,576BASIC EARNINGS (LOSS) PER COMMON SHARE:From continuing operations
    
    $
    1.25
    
    
    $
    1.68
    
    
    $
    0.85From the cumulative effect of a change in accounting principle
    
    
    
    
    
    
    (2.41
    )
    
    
    Basic earnings (loss) per common share
    
    $
    1.25
    
    
    $
    (0.73
    )
    
    $
    0.85DILUTED EARNINGS (LOSS) PER COMMON SHAREFrom continuing operations
    
    $
    1.24
    
    
    $
    1.68
    
    
    $
    0.84From the cumulative effect of a change in accounting principle
    
    
    
    
    
    
    (2.41
    )
    
    
    Diluted earnings (loss) per common share
    
    $
    1.24
    
    
    $
    (0.73
    )
    
    $
    0.84
 See notes to consolidated financial statements.
 19




---



##### 



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
THE LIBERTY CORPORATION AND SUBSIDIARIES  (In 000s, except per share data)
 UnrealizedCommon
    
    
    
    
    
    Unearned
    
    InvestmentShares
    
    Common
    
    Stock
    
    Gains
    
    RetainedOutstanding
    
    Stock
    
    Compensation
    
    (Losses)
    
    Earnings
    
    Total(1)Balance at January 1, 2001
    
    
    19,538
    
    
    $
    99,033
    
    
    $
    
    
    
    $
    690
    
    
    $
    481,270
    
    
    $
    580,993Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,576
    
    
    
    16,576Net unrealized investment gains (losses), net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (753
    )
    
    
    
    
    
    
    (753
    )Dividends  Common Stock  $0.88 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,290
    )
    
    
    (17,290
    )Stock issued for employee benefit and performance incentive
compensation programs
    
    
    452
    
    
    
    14,200
    
    
    
    (3,687
    )
    
    
    
    
    
    
    
    
    
    
    10,513Income tax benefit resulting from employee exercise of options
    
    
    
    
    
    
    1,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,274Stock repurchased
    
    
    (240
    )
    
    
    (9,642
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,642
    )Balance at December 31, 2001
    
    
    19,750
    
    
    
    104,865
    
    
    
    (3,687
    )
    
    
    (63
    )
    
    
    480,556
    
    
    
    581,671Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,393
    )
    
    
    (14,393
    )Net unrealized investment gains (losses), net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    236
    
    
    
    
    
    
    
    236Dividends  Common Stock  $0.88 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,276
    )
    
    
    (17,276
    )Stock issued for employee benefit and performance incentive
compensation programs
    
    
    77
    
    
    
    3,321
    
    
    
    (115
    )
    
    
    
    
    
    
    
    
    
    
    3,206Income tax benefit resulting from employee exercise of options
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73Stock repurchased
    
    
    (404
    )
    
    
    (15,281
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,281
    )Balance at December 31, 2002
    
    
    19,423
    
    
    
    92,978
    
    
    
    (3,802
    )
    
    
    173
    
    
    
    448,887
    
    
    
    538,236Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,897
    
    
    
    23,897Net unrealized investment gains (losses), net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    65Dividends  Common Stock  $0.96 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,405
    )
    
    
    (18,405
    )Stock issued for employee benefit and performance incentive
compensation programs
    
    
    133
    
    
    
    5,167
    
    
    
    (603
    )
    
    
    
    
    
    
    
    
    
    
    4,564Income tax benefit resulting from employee exercise of options
    
    
    
    
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Stock repurchased
    
    
    (625
    )
    
    
    (26,583
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,583
    )Balance at December 31, 2003
    
    
    18,931
    
    
    $
    71,788
    
    
    $
    (4,405
    )
    
    $
    238
    
    
    $
    454,379
    
    
    $
    522,000
  (1)
    
    Comprehensive income (loss), which includes the aggregate of net income (loss) and net unrealized investment gains (losses), was $23,962, $(14,157), and $15,823, for 2003, 2002, and 2001, respectively. See notes to consolidated financial statements
 20




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
THE LIBERTY CORPORATION AND SUBSIDIARIES  (In $000s)
 For the Years Ended December 31,2003
    
    2002
    
    2001OPERATING ACTIVITIESNet income (loss)
    
    $
    23,897
    
    
    $
    (14,393
    )
    
    $
    16,576Cumulative effect of a change in accounting principle
    
    
    
    
    
    
    47,388
    
    
    
    Income before the cumulative effect of a change in accounting principle
    
    
    23,897
    
    
    
    32,995
    
    
    
    16,576Adjustments to reconcile income from continuing operations to net cash
provided by (used in) operating activities:Loss on disposal of operating assets
    
    
    2,160
    
    
    
    296
    
    
    
    147Realized investment losses
    
    
    1,729
    
    
    
    3,544
    
    
    
    2,211Depreciation
    
    
    18,223
    
    
    
    17,063
    
    
    
    16,049Amortization of intangibles
    
    
    239
    
    
    
    699
    
    
    
    15,921Amortization of program rights
    
    
    7,214
    
    
    
    7,281
    
    
    
    7,937Cash paid for program rights
    
    
    (7,097
    )
    
    
    (7,499
    )
    
    
    (7,873
    )Provision for deferred income taxes
    
    
    2,153
    
    
    
    11,900
    
    
    
    9,497Changes in operating assets and liabilities, net of effects of acquisitions:Receivables
    
    
    (295
    )
    
    
    (2,034
    )
    
    
    526Other assets
    
    
    4,049
    
    
    
    17,638
    
    
    
    42,865Accounts payable and accrued expenses
    
    
    888
    
    
    
    4,757
    
    
    
    (52,479
    )Accrued income taxes
    
    
    3,874
    
    
    
    
    
    
    
    (128,254
    )Unearned revenue
    
    
    6,165
    
    
    
    4,756
    
    
    
    881Other liabilities
    
    
    (73
    )
    
    
    (293
    )
    
    
    (245
    )All other operating activities, net
    
    
    (1,426
    )
    
    
    695
    
    
    
    743NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    61,700
    
    
    
    91,798
    
    
    
    (75,498
    )INVESTING ACTIVITIESPurchase of property, plant, and equipment
    
    
    (21,971
    )
    
    
    (24,704
    )
    
    
    (13,853
    )Proceeds from sale of property, plant, and equipment
    
    
    262
    
    
    
    385
    
    
    
    750Investment securities sold
    
    
    
    
    
    
    8,083
    
    
    
    2,755Investment securities acquired
    
    
    (5,900
    )
    
    
    (13,110
    )
    
    
    (12,502
    )Proceeds from sale of investment properties
    
    
    3,578
    
    
    
    1,619
    
    
    
    2,010NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
    
    
    (24,031
    )
    
    
    (27,727
    )
    
    
    (20,840
    )FINANCING ACTIVITIESDividends paid
    
    
    (18,405
    )
    
    
    (17,276
    )
    
    
    (17,290
    )Stock issued for employee benefit and compensation programs
    
    
    1,579
    
    
    
    914
    
    
    
    9,756Repurchase of common stock
    
    
    (26,583
    )
    
    
    (15,281
    )
    
    
    (9,642
    )NET CASH PROVIDED BY(USED IN) FINANCING ACTIVITIES
    
    
    (43,409
    )
    
    
    (31,643
    )
    
    
    (17,176
    )INCREASE (DECREASE) IN CASH
    
    
    (5,740
    )
    
    
    32,428
    
    
    
    (113,514
    )Cash at beginning of year
    
    
    67,917
    
    
    
    35,489
    
    
    
    149,003CASH AT END OF YEAR
    
    $
    62,177
    
    
    $
    67,917
    
    
    $
    35,489
 See notes to consolidated financial statements
 21




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
 1. Nature of Operations
  2. Summary of Significant Accounting Policies
Principles of Consolidation
  Consolidation of Variable Interest Entities
 Variable Interest Entities
  Use of Estimates and Assumptions
  Cash and Cash Equivalents
  Receivables
  Program Rights
  FCC Licenses and Goodwill
 Goodwill and Other Intangible Assets
 22




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
 Program Contract Obligations
  Property, Plant, and Equipment
  Station Revenues
  Cable Advertising Revenues
  Concentration of Credit Risk
  Barter Transactions
   Realized and Unrealized Investment Gains and Losses
   Income Taxes
 Accounting
for Income Taxes
 Equity Compensation
 Accounting for Stock-Based Compensation
 Stock Ownership and Stock Option Plans
  Reclassifications
  23




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
 3. Intangible Assets Subject to Amortization
   Estimated(In $000s)
    
    Amortization2004
    
    $
    1712005
    
    
    1712006
    
    
    1702007
    
    
    1682008
    
    
    167
 4. FCC Licenses and Goodwill
 Goodwill and Other Intangible Assets
  (In $000s)
    
    2003
    
    2002
    
    2001Reported income from continuing
operations
    
    $
    23,897
    
    
    $
    32,995
    
    
    $
    16,576Add back : Goodwill and indefinite
lived intangible amortization (net of
income taxes)
    
    
    
    
    
    
    
    
    
    
    9,371Adjusted income from continuing
operations
    
    $
    23,897
    
    
    $
    32,995
    
    
    $
    25,947
  2003
    
    2002
    
    2001Basic earnings per share:Reported basic earnings per share from
continuing operations
    
    $
    1.25
    
    
    $
    1.68
    
    
    $
    0.85Add back : Goodwill and indefinite lived
intangible amortization (net of income taxes)
    
    
    
    
    
    
    
    
    
    
    0.48Adjusted basic earnings per share from
continuing operations
    
    $
    1.25
    
    
    $
    1.68
    
    
    $
    1.33
 2003
    
    2002
    
    2001Diluted earnings per share:Reported diluted earnings per share form
continuing operations
    
    $
    1.24
    
    
    $
    1.68
    
    
    $
    0.84Add back : Goodwill and indefinite lived
intangible amortization (net of income taxes)
    
    
    
    
    
    
    
    
    
    
    0.48Adjusted diluted earnings per share from
continuing operations
    
    $
    1.24
    
    
    $
    1.68
    
    
    $
    1.32
  5. Investments and Other Assets
   December 31,(In $000s)
    
    2003
    
    2002Private equity investments
    
    $
    11,629
    
    
    $
    10,556Private debt securities
    
    
    16,774
    
    
    
    11,528Real estate related investments
    
    
    2,687
    
    
    
    6,306Investments in venture capital funds
    
    
    5,733
    
    
    
    7,258Investments in low income housing tax credits
    
    
    5,310
    
    
    
    6,343Other
    
    
    2,665
    
    
    
    2,171Total investments and other assets
    
    $
    44,798
    
    
    $
    44,162
 24




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
 Accounting for Certain Investments in Debt and Equity Securities
  
    
    Private equity investments, all of which represent a voting
interest of less than 20%, are carried at cost, which includes
provisions for impaired value when appropriate.
    
    Private debt securities classified as available-for-sale are
stated at fair value with unrealized gains and losses, after
adjustment for deferred income taxes, reported directly in
shareholders equity in accumulated other comprehensive income
(loss). Fair values for private debt securities are estimated by
discounting the expected future cash flows using a current market
rate applicable to the yield, credit quality, and maturity of the
investments.
    
    Real estate related investments consist primarily of residential
land and lots in various stages of development and completion, and
receivables related to prior land sales. The Companys real estate
properties were held for sale at December 31, 2003 and 2002, and
accordingly are carried at the lower of cost or fair market value
less costs to sell.
    
    Investments in venture capital funds are generally carried at
cost, which includes provisions for impaired value where
appropriate.
    
    Investments in low income housing tax credits are accounted for
using the cost method, in accordance with Emerging Issues Task
Force 94-1 Accounting for Tax Benefits Resulting from Investments
in Affordable Housing Projects. Under the cost method, any
excess of the carrying amount of the investment over its estimated
residual value is amortized over the remaining period during which
the Company is to receive tax credits.
  Fair Values of Financial Instruments
 6. Revolving Credit Facility
   7. Shareholders Equity
    (In $000s)
    
    2003
    
    2002Carrying value of securities
    
    $
    16,774
    
    
    $
    7,279Amortized cost of securities
    
    
    (16,390
    )
    
    
    (7,000
    )Net unrealized appreciation (depreciation)
    
    
    384
    
    
    
    279Deferred income taxes
    
    
    (146
    )
    
    
    (106
    )Total
    
    $
    238
    
    
    $
    $173
 8. Employee Benefits
   25




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
   (In $000s)
    
    2003
    
    2002
    
    2001Service cost
    
    $
    27
    
    
    $
    29
    
    
    $
    26Amortization of prior service cost
    
    
    2
    
    
    
    3
    
    
    
    3Amortization of actuarial net gain
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Interest cost
    
    
    111
    
    
    
    137
    
    
    
    163Net periodic postretirement benefit cost
    
    $
    140
    
    
    $
    166
    
    
    $
    189
  (In $000s)
    
    2003
    
    2002Benefit obligation at beginning of year
    
    $
    1,723
    
    
    $
    1,979Service cost
    
    
    27
    
    
    
    29Interest cost
    
    
    111
    
    
    
    137Plan participants contributions
    
    
    165
    
    
    
    156Benefits paid
    
    
    (407
    )
    
    
    (305
    )Actuarial gain (loss )
    
    
    640
    
    
    
    (273
    )Benefit obligation at end of year
    
    $
    2,259
    
    
    $
    1,723
  (In $000s)
    
    2003
    
    2002Funded status
    
    $
    2,259
    
    
    $
    1,723Unrecognized prior service cost
    
    
    (18
    )
    
    
    (21
    )Unrecognized net gain (loss)
    
    
    (488
    )
    
    
    152Accrued postretirement benefit obligation
    
    $
    1,753
    
    
    $
    1,854
   1%
    
    1%(In $000s)
    
    Increase
    
    DecreaseEffect on total of service
and interest rate
components
    
    $
    1
    
    
    $
    (1
    )Effect on postretirement
benefit obligation
    
    $
    6
    
    
    $
    (6
    )
  9. Stock Ownership and Stock Option Plans
     26




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##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
 Accounting for Stock-Based Compensation Accounting for Stock
Issued to Employees
   2002
    
    2001Estimated fair value
    
    $
    9.55
    
    
    $
    8.27Underlying assumptions used to determine estimated
fair value:Risk free interest rate
    
    
    4.40
    %
    
    
    4.88
    %Dividend yield
    
    
    2.2
    %
    
    
    2.6
    %Expected stock price volatility
    
    
    0.23
    
    
    
    0.23Weighted average expected life
    
    6 years
    
    7 years
    (In $000s, except per share amounts)
    
    2003
    
    2002
    
    2001Stock-based compensation cost included
in net income (net of taxes)
    
    $
    1,205
    
    
    $
    619
    
    
    $
    469Net income (loss):As Reported
    
    $
    23,897
    
    
    $
    (14,393
    )
    
    $
    16,576Pro forma compensation expense (net of
taxes)
    
    
    (774
    )
    
    
    (901
    )
    
    
    (688
    )Pro forma net income (loss)
    
    $
    23,123
    
    
    $
    (15,294
    )
    
    $
    15,888Basic Earnings (Loss) per Share:As Reported
    
    $
    1.25
    
    
    $
    (0.73
    )
    
    $
    0.85Pro forma
    
    
    1.21
    
    
    
    (0.78
    )
    
    
    0.81Diluted Earnings (Loss) per Share:As Reported
    
    $
    1.24
    
    
    $
    (0.73
    )
    
    $
    0.84Pro forma
    
    
    1.20
    
    
    
    (0.78
    )
    
    
    0.81
 27




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTHE LIBERTY CORPORATION AND SUBSIDIARIES
  Non-QualifiedRestricted Shares
    
    
    Stock OptionsMarketNumber
    
    
    Price at
    
    
    
    
    
    
    Averageof
    
    
    Date
    
    
    Number
    
    
    ExerciseShares
    
    
    Given
    
    
    of Options
    
    
    PriceOutstanding
at January 1, 2001
    
    
    
    
    
    
    
    
    
    
    1,005,925
    
    
    $
    37.86Awarded
    
    
    125,000
    
    
    $
    35.55
    
    
    
    857,000
    
    
    $
    33.54Vested
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    (326,180
    )
    
    $
    29.91Forfeited
    
    
    
    
    
    
    
    
    
    
    (392,207
    )
    
    $
    43.57Outstanding at
December 31, 2001
    
    
    125,000
    
    
    
    
    
    
    
    1,144,538
    
    
    $
    34.94Awarded
    
    
    32,500
    
    
    $
    34.00
    
    
    
    35,100
    
    
    $
    39.50Vested
    
    
    (25,000
    )
    
    $
    35.55Exercised
    
    
    
    
    
    
    
    
    
    
    (27,344
    )
    
    $
    33.44Forfeited
    
    
    
    
    
    
    
    
    
    
    (4,550
    )
    
    $
    45.50Outstanding at
December 31, 2002
    
    
    132,500
    
    
    
    
    
    
    
    1,147,744
    
    
    $
    35.07Awarded
    
    
    60,300
    
    
    $
    42.07Vested
    
    
    (46,300
    )
    
    $
    39.98Exercised
    
    
    
    
    
    
    
    
    
    
    (45,184
    )
    
    $
    34.99Forfeited
    
    
    
    
    
    
    
    
    
    
    (68,350
    )
    
    $
    34.83Outstanding at
December 31, 2003
    
    
    146,500
    
    
    
    
    
    
    
    1,034,210
    
    
    $
    35.09
  Wtd.
    
    
    
    
    
    Wtd.Number
    
    Wtd. Avg.
    
    Avg.
    
    Number
    
    Avg.Range of
    
    Out-
    
    Remaining
    
    Exercise
    
    Exercis-
    
    ExerciseExercise Prices
    
    standing
    
    Life
    
    Price
    
    able
    
    Price$25.75 - $29.99
    
    
    15,000
    
    
    
    0.39
    
    
    $
    25.75
    
    
    
    15,000
    
    
    $
    25.75$30.00 - $39.99
    
    
    853,850
    
    
    
    6.98
    
    
    $
    33.81
    
    
    
    382,598
    
    
    $
    33.62$40.00 - $51.88
    
    
    165,360
    
    
    
    3.93
    
    
    $
    42.60
    
    
    
    165,360
    
    
    $
    42.60Total or wtd. average
    
    
    1,034,210
    
    
    
    6.39
    
    
    $
    35.09
    
    
    
    562,958
    
    
    $
    36.09
  10. Provision for Income Taxes
  (In $000s)
    
    2003
    
    2002
    
    2001Current:Federal
    
    $
    10,614
    
    
    $
    7,274
    
    
    $
    State and local
    
    
    1,572
    
    
    
    622
    
    
    
    663Total current
    
    
    12,186
    
    
    
    7,896
    
    
    
    663Deferred:Federal
    
    
    2,052
    
    
    
    10,960
    
    
    
    8,747State and local
    
    
    101
    
    
    
    940
    
    
    
    750Total deferred
    
    
    2,153
    
    
    
    11,900
    
    
    
    9,497Total tax provision
    
    $
    14,339
    
    
    $
    19,796
    
    
    $
    10,160Cumulative effect of a
change in accounting
principle
    
    $
    
    
    
    $
    (29,045
    )
    
    $
    
   (In $000s)
    
    2003
    
    2002Deferred tax liabilities:Basis in fixed assets
    
    $
    12,603
    
    
    $
    11,837Basis in intangible assets
    
    
    91,272
    
    
    
    88,243Basis in partnerships
    
    
    
    
    
    
    411Total deferred tax liabilities
    
    
    103,875
    
    
    
    100,491Deferred tax assets:Bad debts
    
    
    657
    
    
    
    839Net operating losses/tax credits/
capital losses
    
    
    8,097
    
    
    
    8,607Employee benefits
    
    
    3,936
    
    
    
    1,582Impairment of assets
    
    
    357
    
    
    
    2,046Unearned revenue
    
    
    4,458
    
    
    
    2,178Book over tax partnership losses
    
    
    586
    
    
    
    Other, net
    
    
    
    
    
    
    550Valuation reserves
    
    
    (1,450
    )
    
    
    (1,450
    )Total deferred tax assets
    
    
    16,641
    
    
    
    14,352Net deferred tax liability
    
    $
    87,234
    
    
    $
    86,139
  (In $000s)
    
    2003
    
    2002
    
    2001Federal income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %Rate applied to pre-tax income
    
    $
    13,383
    
    
    $
    18,476
    
    
    $
    9,358State taxes, net of federal tax
benefit
    
    
    2,118
    
    
    
    2,275
    
    
    
    1,503Tax credits
    
    
    (1,331
    )
    
    
    (1,000
    )
    
    
    (1,200
    )Other
    
    
    169
    
    
    
    45
    
    
    
    499Provision for income taxes
    
    $
    14,339
    
    
    $
    19,796
    
    
    $
    10,160
  11. Quarterly Results of Operations (Unaudited)
  28




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
   (In $000s, except per share data)
 Quarter Ended 2003March 31
    
    June 30
    
    Sept. 30
    
    Dec. 31Net revenues
    
    $
    43,929
    
    
    $
    51,666
    
    
    $
    49,075
    
    
    $
    55,614Operating income
    
    $
    5,472
    
    
    $
    11,512
    
    
    $
    9,116
    
    
    $
    12,484Net income
    
    $
    3,355
    
    
    $
    6,792
    
    
    $
    6,119
    
    
    $
    7,631Basic earnings
per share
    
    $
    0.17
    
    
    $
    0.36
    
    
    $
    0.32
    
    
    $
    0.40Diluted earnings
per share
    
    $
    0.17
    
    
    $
    0.35
    
    
    $
    0.32
    
    
    $
    0.40
 (In $000s, except per share data)
 Quarter Ended 2002March 31
    
    June 30
    
    Sept. 30
    
    Dec. 31Net revenues
    
    $
    42,826
    
    
    $
    51,805
    
    
    $
    50,166
    
    
    $
    61,881Operating income
    
    $
    6,592
    
    
    $
    14,059
    
    
    $
    11,596
    
    
    $
    19,928Income before the
cumulative effect of
a change in
accounting principle
    
    $
    4,088
    
    
    $
    8,840
    
    
    $
    7,177
    
    
    $
    12,890Cumulative effect of
a change in
accounting principle
    
    $
    (47,388
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (43,300
    )
    
    $
    8,840
    
    
    $
    7,177
    
    
    $
    12,890Basic earnings (loss)
per share
    
    $
    (2.21
    )
    
    $
    0.45
    
    
    $
    0.37
    
    
    $
    0.66Diluted earnings
(loss) per share
    
    $
    (2.19
    )
    
    $
    0.44
    
    
    $
    0.36
    
    
    $
    0.66
 12. Earnings Per Share
  (In $000s, except per share data)
 Shares
    
    
    PerIncome
    
    
    (Denom-
    
    
    ShareFor the Year Ended 2003
    
    (Numerator)
    
    
    inator)
    
    
    AmountBasic EPS:Income before the cumulative
effect of a change in accounting
principle available to common
shareholders
    
    
    23,898
    
    
    
    19,123
    
    
    $
    1.25Effect of Dilutive Securities:Stock options
    
    
    
    
    
    
    125Diluted EPS:Income before the cumulative
effect of a change in accounting
principle available to common
shareholders plus assumed
conversions
    
    $
    23,898
    
    
    
    19,248
    
    
    $
    1.24
 (In $000s, except per share data)
 Shares
    
    
    PerIncome
    
    
    (Denom-
    
    
    ShareFor the Year Ended 2002
    
    (Numerator)
    
    
    inator)
    
    
    AmountBasic EPS:Income before the
cumulative effect of a change in
accounting principle available
to common shareholders
    
    
    32,995
    
    
    
    19,610
    
    
    $
    1.68Effect of Dilutive Securities:Stock options
    
    
    
    
    
    
    84Diluted EPS:Income before the
cumulative effect of a change in
accounting principle available
to common shareholders plus
assumed conversions
    
    $
    32,995
    
    
    
    19,694
    
    
    $
    1.68
 (In $000s, except per share data)
 Shares
    
    
    PerIncome
    
    
    (Denom-
    
    
    ShareFor the Year Ended 2001
    
    (Numerator)
    
    
    inator)
    
    
    AmountBasic EPS:Income before the
cumulative effect of a change
in accounting principle
available to common
shareholders
    
    
    16,576
    
    
    
    19,581
    
    
    $
    0.85Effect of Dilutive Securities:Stock options
    
    
    
    
    
    
    99Diluted EPS:Income before the
cumulative effect of a change
in accounting principle
available to common
shareholders plus assumed
conversions
    
    $
    16,576
    
    
    
    19,680
    
    
    $
    0.84
  13. Fair Values of Financial Instruments
 Disclosures about Fair Value of Financial Instruments
 
    
    Cash and cash equivalents: The carrying amounts reported in the
balance sheet for these instruments approximate their fair values.
 
    
    Receivables, income taxes receivable, and accounts payable: The
carrying amounts reported in the balance sheet for these
instruments approximate their fair value due to the short maturity
of these items.
 29




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
  
 
    
    Program contract obligations: Fair values on program contract obligations are
estimated to approximate their carrying value as a result of their short term
nature.
 
    
    Private debt securities: The carrying amounts
reported in the balance sheet for these securities
approximate their fair value. Fair values are
estimated by discounting the expected future cash
flows using a current market rate applicable to the
yield, credit quality, and maturity of the
investments.
 
    
    Marketable equity securities: The fair values for the
available-for-sale marketable equity securities are
based on quoted market prices.
 
    
    Investments in private equity securities, venture
capital funds, and low income housing tax credits:
The Company determined that it was not practicable to
estimate the fair values of its private equity,
venture capital and low income housing tax credit
investments because of a lack of primary and
secondary market prices and the inability to estimate
fair values without incurring excessive costs.
 14. Comprehensive Income
  (In $000s)
 IncomeAmount
    
    Tax
    
    AmountFor the Year Ended
    
    Before
    
    (Expense)
    
    Net ofDecember 31, 2003
    
    Taxes
    
    Benefit
    
    TaxesUnrealized gain on available for
sale securities
    
    $
    384
    
    
    $
    (146
    )
    
    $
    238Less: reclassification adjustment for
losses realized in net income
    
    
    
    
    
    
    
    
    
    
    --Net unrealized income (loss)
    
    $
    384
    
    
    $
    (146
    )
    
    $
    238Total comprehensive income (loss)
    
    $
    384
    
    
    $
    (146
    )
    
    $
    238
 (In $000s)
 IncomeAmount
    
    Tax
    
    AmountFor the Year Ended
    
    Before
    
    (Expense)
    
    Net ofDecember 31, 2002
    
    Taxes
    
    Benefit
    
    TaxesUnrealized gain on available for
sale securities
    
    $
    380
    
    
    $
    (144
    )
    
    $
    236Less: reclassification adjustment for
losses realized in net income
    
    
    (101
    )
    
    
    38
    
    
    
    (63
    )Net unrealized income (loss)
    
    $
    279
    
    
    $
    (106
    )
    
    $
    173Total comprehensive income (loss)
    
    $
    279
    
    
    $
    (106
    )
    
    $
    173
 (In $000s)
 IncomeAmount
    
    Tax
    
    AmountFor the Year Ended
    
    Before
    
    (Expense)
    
    Net ofDecember 31, 2001
    
    Taxes
    
    Benefit
    
    TaxesUnrealized gain on available
for sale securities
    
    $
    1,029
    
    
    $
    (391
    )
    
    $
    638Less: reclassification adjustment
for gains realized in net income
    
    
    (1,130
    )
    
    
    429
    
    
    
    (701
    )Net unrealized income
    
    $
    (101
    )
    
    $
    38
    
    
    $
    (63
    )Total comprehensive income (loss)
    
    $
    (101
    )
    
    $
    38
    
    
    $
    (63
    )
 15. Segment Information
   (In $000s)
 As of and For the Year
    
    
    
    
    
    
    
    
    
    CorporateEnded December 31, 2003
    
    Broadcasting
    
    
    Cable
    
    
    & Other
    
    
    TotalRevenues (net of commissions)
    
    $
    184,636
    
    
    $
    15,334
    
    
    $
    314
    
    
    $
    200,284Expenses:Operating
    
    
    115,799
    
    
    
    12,800
    
    
    
    14,639
    
    
    
    143,238Depreciation and
amortization
    
    
    16,170
    
    
    
    544
    
    
    
    1,748
    
    
    
    18,462Total operating expenses
    
    
    131,969
    
    
    
    13,344
    
    
    
    16,387
    
    
    
    161,700Operating income (loss)
    
    
    52,667
    
    
    
    1,990
    
    
    
    (16,073
    )
    
    
    38,584Net investment income
(loss)
    
    
    
    
    
    
    
    
    
    
    (348
    )
    
    
    (348
    )Income before income
taxes and the cumulative
effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    38,236Segment assets
    
    $
    599,089
    
    
    $
    4,489
    
    
    $
    58,687
    
    
    $
    662,265Expenditures for property,
plant, and equipment
    
    $
    20,755
    
    
    $
    289
    
    
    $
    927
    
    
    $
    21,971
 (In $000s)
 As of and For the Year
    
    
    
    
    
    
    
    
    
    CorporateEnded December 31, 2002
    
    Broadcasting
    
    
    Cable
    
    
    & Other
    
    
    TotalRevenues (net of
commissions)
    
    $
    190,452
    
    
    $
    15,816
    
    
    $
    410
    
    
    $
    206,678Expenses:Operating
    
    
    109,655
    
    
    
    12,916
    
    
    
    14,170
    
    
    
    136,741Depreciation and
amortization
    
    
    15,813
    
    
    
    623
    
    
    
    1,326
    
    
    
    17,762Total operating expenses
    
    
    125,468
    
    
    
    13,539
    
    
    
    15,496
    
    
    
    154,503Operating income (loss)
    
    
    64,984
    
    
    
    2,277
    
    
    
    (15,086
    )
    
    
    52,175Net investment income
(loss)
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    616Income before income
taxes and the cumulative
effect of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    52,791Segment assets
    
    $
    600,419
    
    
    $
    4,683
    
    
    $
    65,649
    
    
    $
    670,751Expenditures for property,
plant, and equipment
    
    $
    21,472
    
    
    $
    253
    
    
    $
    2,979
    
    
    $
    24,704
 (In $000s)
 As of and For the Year
    
    
    
    
    
    
    
    
    
    CorporateEnded December 31, 2001
    
    Broadcasting
    
    
    Cable
    
    
    & Other
    
    
    TotalRevenues (net of
commissions)
    
    $
    165,211
    
    
    $
    12,144
    
    
    $
    1,076
    
    
    $
    178,431Expenses:Operating
    
    
    100,403
    
    
    
    11,434
    
    
    
    11,974
    
    
    
    123,811Depreciation and
amortization
    
    
    29,453
    
    
    
    635
    
    
    
    1,882
    
    
    
    31,970Total operating expenses
    
    
    129,856
    
    
    
    12,069
    
    
    
    13,856
    
    
    
    155,781Operating income (loss)
    
    
    35,355
    
    
    
    75
    
    
    
    (12,780
    )
    
    
    22,650Net investment income
(loss)
    
    
    
    
    
    
    
    
    
    
    4,086
    
    
    
    4,086Income before income taxes
and the cumulative effect
of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    26,736Segment assets
    
    $
    597,251
    
    
    $
    5,006
    
    
    $
    127,938
    
    
    $
    730,195Expenditures for property,
plant, and equipment
    
    $
    10,734
    
    
    $
    643
    
    
    $
    2,476
    
    
    $
    13,853
 30




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
  16. Commitments and Contingencies
   Year
    
    (In $000s)2004
    
    $
    4172005
    
    
    3522006
    
    
    1932007
    
    
    52008
    
    
    4Thereafter
    
    
    7Total
    
    $
    978
   31




---



##### 



MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING
 
     REPORT OF INDEPENDENT AUDITORS
 
 
     
 32




---



##### 



Item 9. Changes in and Disagreements with Accountant on Accounting and Financial Disclosure
  Item 9A. Controls and Procedures
  PART III
 Item 10. Directors and Executive Officers of the Registrant
  Executive Officers
  
 
 
 
 
 33




---



##### 



Item 11. Executive Compensation
  Item 12. Security Ownership of Certain Beneficial Owners and Management
  Item 13. Certain Relationships and Related Transactions
  Item 14. Principal Accounting Fees and Services
  PART IV
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
 (a) (1) and (2). List of Financial Statements and Financial Statement Schedules
  
    34




---



##### 



(a)(3). List of Exhibits
 3.1
    
    Restated Articles of Incorporation, as amended through May 6, 1997 (filed with the
Registrants Quarterly Report on Form 10Q/A for the period ended March 31, 1997 and
incorporated herein by reference)3.2
    
    Bylaws, as amended through August 3, 1999, filed as Exhibit 3.2 to the Registrants
Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by reference.4.1
    
    See Articles 4, 5, 7 and 9 of the Companys Restated Articles of Incorporation (filed
as Exhibit 3.1) and Articles I, II and VI of the Companys Bylaws (filed as Exhibit 3.2).4.2
    
    See the Form of Rights Agreement dated as of August 7, 1990 between The Liberty
Corporation and The Bank of New York, as Rights Agent, which includes as Exhibit B thereto
the form of Right Certificate (filed as Exhibits 1 and 2 to the Registrants Form 8-A,
dated August 10, 1990, and incorporated herein by reference) with respect to the Rights to
purchase Series A Participating Cumulative Preferred Stock, and the Registrants Form 8-A,
dated October 12, 2000 amending the Form of Rights Agreement to, among other things, extend
the expiration date to August 7, 2010, also incorporated herein by reference.4.3
    
    See Credit Agreement dated March 21, 2001 (filed as Exhibit 10 to the Registrants
Quarterly Report on Form 10Q for the quarter ended June 30, 2001, and incorporated herein
by reference) and the related Fourth Amendment To Credit Agreement dated May 19, 2003
(filed as Exhibit 10 to the Registrants Quarterly Report on Form 10Q for the quarter ended
June 30, 2003, and incorporated herein by reference)10.1
    
    See Credit Agreement dated March 21, 2001, and the related Fourth Amendment to Credit
Agreement dated May 19, 2003, (filed as Exhibit 4.3).10.2
    
    The Liberty Corporation Performance Incentive Compensation Program, as amended and
restated on February 1, 2000, filed as Exhibit 10.2 to the Registrants Form 10-Q for the
quarter ended March 31, 2000, and incorporated herein by reference.11.
    
    The Liberty Corporation and Subsidiaries Consolidated Earnings per Share Computation
included in Note 12 of the Notes to Consolidated Financial Statements filed on page 28 of
this report.21.
    
    The Liberty Corporation and Subsidiaries, List of Subsidiaries23.
    
    Consent of Independent Auditors24.
    
    Powers of Attorney applicable for certain signatures of members of the Board of
Directors in Registrants10-K filed for the years ended December 31, 1983, 1985, 1989,
1994, 1995, 1996, 1997 1998, 1999, 2000, and 2001.31.
    
    Rule 13a-14(a)/15d-14(a) Certifications32.
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 35




---



##### 



(b). Reports on Form 8-K
 The Company furnished a current report on Form 8-K dated November 4, 2003 with
respect to the press release announcing its third quarter 2003 operating results.The Company furnished a current report on Form 8-K dated November 4, 2003 with respect
to The Liberty Corp. declaring a regular quarterly dividend of 24 cents per share on its
common stock, payable on January 5, 2004 to shareholders of record on December 15, 2003The Company furnished a current report on Form 8-K dated November 17, 2003 announcing
its negotiation and intention to enter into certain agreements with GNS Media
Evansville, Inc. (GNS). These agreements between Liberty and GNS are contingent upon
the closing of GNS acquisition of WTVW, the FOX affiliate in Evansville, Indiana.
 (c). Exhibits Filed With This Report
 11.
    
    The Liberty Corporation and Subsidiaries Consolidated Earnings per Share Computation
included in Note 12 of the Notes to Consolidated Financial Statements filed on pages
28-29 of this report.21.
    
    The Liberty Corporation and Subsidiaries, List of Subsidiaries23.
    
    Consent of Independent Auditors31.
    
    Rule 13a-14(a)/15d-14(a) Certifications32.
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
 36




---



##### 



(d). Consolidated Financial Statement Schedule Filed With This Report
  THE LIBERTY CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 2003
 AdditionsBalance at
    
    
    Charged to
    
    
    Charged to
    
    
    
    
    
    
    Balance atBeginning
    
    
    Costs and
    
    
    Other
    
    
    
    
    
    
    EndDeducted From Asset Accounts
    
    of Period
    
    
    Expenses
    
    
    Accounts
    
    
    Deductions
    
    
    of PeriodYear Ended December 31, 2003
Accounts receivable 
reserve for bad debts
    
    $
    1,963
    
    
    $
    757
    
    
    $
    
    
    
    $
    982
    (a)
    
    $
    1,738Deferred
income taxes 
reserve for deferred tax assets
    
    $
    1,450
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,450Year Ended December 31, 2002
Accounts receivable 
reserve for bad debts
    
    $
    2,250
    
    
    $
    1,215
    
    
    $
    
    
    
    $
    1,502
    (a)
    
    $
    1,963Deferred
income taxes 
reserve for deferred tax assets
    
    $
    1,450
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,450Year Ended December 31, 2001
Accounts receivable -
reserve for bad debts
    
    $
    2,218
    
    
    $
    1,127
    
    
    $
    
    
    
    $
    1,095
    (a)
    
    $
    2,250Deferred
income taxes 
reserve for deferred tax assets
    
    $
    
    
    
    $
    1,450
    
    
    $
    
    
    
    $
    
    
    
    $
    1,450
 
 Notes:(a)
    
    Uncollectible accounts written off, net of recoveries. 37




---



##### 



SIGNATURES
 th
 THE LIBERTY CORPORATION
    
    
    
    By:
    
    /s/ Hayne HippRegistrant
    
    
    
    
    
    Hayne HippChief Executive Officer
  By:
    
    /s/ Howard L. Schrott
    
    
    
    *By:
    
    /s/ Frank E. MeltonHoward L. Schrott
    
    
    
    
    
    Frank E. MeltonChief Financial Officer
    
    
    
    
    
    Director*By:
    
    /s/ Edward E. Crutchfield
    
    
    
    *By:
    
    /s/ John H. Mullin IIIEdward E. Crutchfield
    
    
    
    
    
    John H. Mullin IIIDirector
    
    
    
    
    
    Director*By:
    
    /s/ John R. Farmer
    
    
    
    *By:
    
    /s/ J. Thurston RoachJohn R. Farmer
    
    
    
    
    
    J. Thurston RoachDirector
    
    
    
    
    
    DirectorBy:
    
    /s/ Hayne Hipp
    
    
    
    *By:
    
    /s/ Eugene E. Stone, IVHayne Hipp
    
    
    
    
    
    Eugene E. Stone, IVDirector
    
    
    
    
    
    Director*By:
    
    /s/ William O. McCoy
    
    
    
    *By:
    
    /s/ William B. TimmermanWilliam O. McCoy
    
    
    
    
    
    William B. TimmermanDirector
    
    
    
    
    
    Director*By:
    
    /s/ Martha G. Williams*Martha G. Williams, asSpecial Attorney in Fact
 38




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##### 



Annual Report on Form 10-K
The Liberty Corporation
December 31, 2003
 Index to Exhibits
 PageEXHIBITS
    
    Number11.
    
    The Liberty Corporation and Subsidiaries Consolidated Earnings Per Share
     Computation (incorporated herein by reference to Note 12 of the Notes to
     Consolidated Financial Statements included in Part II Item 8 of this
report).
    
    
    28-2921.
    
    The Liberty Corporation and Subsidiaries, List of Significant Subsidiaries
    
    
    3923
    
    Consent of Independent Auditors
    
    
    4031
    
    Rule 13a-14(a)/15d-14(a) Certifications
    
    
    41-4232
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
    
    
    43
 39