##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 )
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For
the quarterly period endedJune 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from ___to ___
 1-5846
 THE LIBERTY CORPORATION
  South Carolina
(State or other jurisdiction of
incorporation or organization)
    
    57-0507055
(IRS Employer
identification No.)
 135 South Main Street, Greenville, SC 29601
 864/241-5400
 o þ
 þ o
  Number of shares OutstandingTitle of each class
    
    as of June 30, 2005Common Stock
    
    18,300,782




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##### 



PART I, ITEM 1  FINANCIAL STATEMENTS
 
 (In 000s)
 June 30,
    
    December 31,2005
    
    2004(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    23,269
    
    
    $
    16,389Receivables (net of allowance for doubtful accounts)
    
    
    40,479
    
    
    
    41,576Program rights
    
    
    1,492
    
    
    
    4,766Prepaid and other current assets
    
    
    6,079
    
    
    
    6,077Income taxes receivable
    
    
    1,811
    
    
    
    Deferred income taxes
    
    
    2,623
    
    
    
    2,453Total current assets
    
    
    75,753
    
    
    
    71,261Property, plant, and equipmentLand
    
    
    5,636
    
    
    
    5,636Buildings and improvements
    
    
    45,931
    
    
    
    44,073Furniture and equipment
    
    
    177,099
    
    
    
    172,993Less: Accumulated depreciation
    
    
    (142,929
    )
    
    
    (134,133
    )85,737
    
    
    
    88,569Intangible assets subject to amortization (net of
$647 and $701 accumulated amortization in 2005 and
2004, respectively)
    
    
    347
    
    
    
    234FCC licenses
    
    
    241,866
    
    
    
    241,866Goodwill
    
    
    101,387
    
    
    
    101,387Investments and other assets
    
    
    23,546
    
    
    
    24,522Total assets
    
    $
    528,636
    
    
    $
    527,839LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    15,252
    
    
    $
    21,396Dividends payable
    
    
    4,462
    
    
    
    4,510Program contract obligations
    
    
    1,486
    
    
    
    4,791Accrued income taxes
    
    
    
    
    
    
    3,573Total current liabilities
    
    
    21,200
    
    
    
    34,270Unearned revenue
    
    
    16,070
    
    
    
    15,965Deferred income taxes
    
    
    61,504
    
    
    
    60,187Other liabilities
    
    
    7,761
    
    
    
    7,097Revolving credit facility
    
    
    110,000
    
    
    
    20,000Total liabilities
    
    
    216,535
    
    
    
    137,519Shareholders equityCommon stock
    
    
    42,533
    
    
    
    49,273Unearned stock compensation
    
    
    (17,790
    )
    
    
    (17,396
    )Retained earnings
    
    
    287,609
    
    
    
    358,575Unrealized investment losses
    
    
    (251
    )
    
    
    (132
    )Total shareholders equity
    
    
    312,101
    
    
    
    390,320Total liabilities and shareholders equity
    
    $
    528,636
    
    
    $
    527,839
 .
 2




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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES  CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS
 (In 000s, except per share data)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(Unaudited)REVENUESTelevision station revenues (net of commissions)
    
    $
    49,734
    
    
    $
    51,138
    
    
    $
    93,260
    
    
    $
    95,738Cable advertising and other revenues (net of commissions)
    
    
    3,566
    
    
    
    3,899
    
    
    
    6,564
    
    
    
    7,130Net revenues
    
    
    53,300
    
    
    
    55,037
    
    
    
    99,824
    
    
    
    102,868EXPENSESOperating expenses (exclusive of depreciation and
amortization shown separately below)
    
    
    31,383
    
    
    
    32,441
    
    
    
    62,774
    
    
    
    62,680Amortization of program rights
    
    
    1,868
    
    
    
    1,781
    
    
    
    3,744
    
    
    
    3,516Depreciation and amortization of intangibles
    
    
    4,956
    
    
    
    5,047
    
    
    
    9,699
    
    
    
    9,539Corporate, general, and administrative expenses
    
    
    4,534
    
    
    
    5,882
    
    
    
    9,002
    
    
    
    9,185Total operating expenses
    
    
    42,741
    
    
    
    45,151
    
    
    
    85,219
    
    
    
    84,920Operating income
    
    
    10,559
    
    
    
    9,886
    
    
    
    14,605
    
    
    
    17,948Net investment income (loss)
    
    
    550
    
    
    
    (4,739
    )
    
    
    2,284
    
    
    
    (5,389
    )Interest expense
    
    
    (1,080
    )
    
    
    (242
    )
    
    
    (1,272
    )
    
    
    (262
    )Income before income taxes
    
    
    10,029
    
    
    
    4,905
    
    
    
    15,617
    
    
    
    12,297Provision for income taxes
    
    
    1,703
    
    
    
    1,839
    
    
    
    3,844
    
    
    
    4,611NET INCOME
    
    $
    8,326
    
    
    $
    3,066
    
    
    $
    11,773
    
    
    $
    7,686BASIC EARNINGS PER COMMON SHARE:
    
    $
    0.47
    
    
    $
    0.17
    
    
    $
    0.66
    
    
    $
    0.41DILUTED EARNINGS PER COMMON SHARE:
    
    $
    0.46
    
    
    $
    0.16
    
    
    $
    0.65
    
    
    $
    0.41Dividends per common share
    
    $
    0.25
    
    
    $
    0.25
    
    
    $
    0.50
    
    
    $
    0.50Special dividend per common share
    
    $
    
    
    
    $
    
    
    
    $
    4.00
    
    
    $
    4.00
  3




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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES  CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
 (In 000s)
 Six Months Ended June 30,2005
    
    2004(Unaudited)OPERATING ACTIVITIESNet income
    
    $
    11,773
    
    
    $
    7,686Adjustments to reconcile net income to net cash
provided by (used in) operating activities:(Gain) Loss on sale of operating assets
    
    
    (35
    )
    
    
    28Realized investment (gains) losses
    
    
    (1,635
    )
    
    
    6,215Depreciation
    
    
    9,586
    
    
    
    9,449Amortization of intangibles
    
    
    113
    
    
    
    90Provision for bad debts
    
    
    478
    
    
    
    441Amortization of program rights
    
    
    3,744
    
    
    
    3,516Cash paid for program rights
    
    
    (3,775
    )
    
    
    (3,721
    )Restricted stock amortization
    
    
    2,653
    
    
    
    1,198Provision for (Benefit from) deferred income taxes
    
    
    1,147
    
    
    
    2,428Changes in operating assets and liabilities:Receivables
    
    
    619
    
    
    
    2,013Other assets
    
    
    (1,606
    )
    
    
    (2,432
    )Accounts payable and accrued expenses
    
    
    (4,420
    )
    
    
    (1,230
    )Accrued income taxes
    
    
    (2,878
    )
    
    
    (1,877
    )Unearned revenue
    
    
    105
    
    
    
    1,778Other liabilities
    
    
    664
    
    
    
    248All other operating activities
    
    
    (226
    )
    
    
    (531
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    16,307
    
    
    
    25,299INVESTING ACTIVITIESPurchase of property, plant, and equipment
    
    
    (6,844
    )
    
    
    (5,817
    )Proceeds from sale of property, plant, and equipment
    
    
    125
    
    
    
    67Investments acquired
    
    
    
    
    
    
    (500
    )Investments sold
    
    
    2,285
    
    
    
    11,257Proceeds from sale of investment properties
    
    
    
    
    
    
    1,055NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
    
    
    (4,434
    )
    
    
    6,062FINANCING ACTIVITIESProceeds from borrowings
    
    
    142,000
    
    
    
    55,000Principal payments on debt
    
    
    (52,000
    )
    
    
    Dividends paid
    
    
    (82,787
    )
    
    
    (84,429
    )Proceeds from the exercise of stock options
    
    
    661
    
    
    
    4,087Repurchase of common stock
    
    
    (12,867
    )
    
    
    (32,389
    )NET CASH PROVIDED BY(USED IN) FINANCING ACTIVITIES
    
    
    (4,993
    )
    
    
    (57,731
    )INCREASE (DECREASE) IN CASH
    
    
    6,880
    
    
    
    (26,370
    )Cash at beginning of period
    
    
    16,389
    
    
    
    62,177CASH AT END OF PERIOD
    
    $
    23,269
    
    
    $
    35,807
  4




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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
       Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(In 000s)Net income
    
    $
    8,326
    
    
    $
    3,066
    
    
    $
    11,773
    
    
    $
    7,686Unrealized gains
(losses) on
securities
    
    
    (72
    )
    
    
    (23
    )
    
    
    (119
    )
    
    
    (42
    )Comprehensive income
    
    $
    8,254
    
    
    $
    3,043
    
    
    $
    11,654
    
    
    $
    7,644
 5




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##### 



3.
    
    SEGMENT REPORTING
   Three Months Ended
    
    Six Months Ended(In 000s)
    
    June 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenues (net of commissions)Television station
    
    $
    49,734
    
    
    $
    51,138
    
    
    $
    93,260
    
    
    $
    95,738Cable advertising
    
    
    3,511
    
    
    
    3,883
    
    
    
    6,479
    
    
    
    7,076Other
    
    
    55
    
    
    
    16
    
    
    
    85
    
    
    
    54Total net revenues
    
    $
    53,300
    
    
    $
    55,037
    
    
    $
    99,824
    
    
    $
    102,868Income (loss) before income taxesBroadcasting
    
    $
    14,888
    
    
    $
    15,588
    
    
    $
    23,671
    
    
    $
    27,165Cable advertising
    
    
    472
    
    
    
    589
    
    
    
    517
    
    
    
    782Corporate and other
    
    
    (5,331
    )
    
    
    (11,272
    )
    
    
    (8,571
    )
    
    
    (15,650
    )Total income before income taxes
    
    $
    10,029
    
    
    $
    4,905
    
    
    $
    15,617
    
    
    $
    12,297
  4.
    
    EMPLOYEE BENEFITS
   6




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##### 







Three Months Ended
    
    Six Months Ended(In 000s)
    
    June 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Service cost
    
    $
    7
    
    
    $
    6
    
    
    $
    13
    
    
    $
    13Amortization of prior service cost
    
    
    2
    
    
    
    1
    
    
    
    4
    
    
    
    1Amortization of actuarial net gain
    
    
    3
    
    
    
    5
    
    
    
    6
    
    
    
    10Interest cost
    
    
    30
    
    
    
    34
    
    
    
    60
    
    
    
    67Net periodic postretirement benefit cost
    
    $
    42
    
    
    $
    46
    
    
    $
    83
    
    
    $
    91


5.
    
    EARNINGS PER SHARE




Three Months Ended
    
    Six Months Ended(In 000s except per share data)
    
    June 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Numerator  Earnings:Net income
    
    $
    8,326
    
    
    $
    3,066
    
    
    $
    11,773
    
    
    $
    7,686Effect of dilutive securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Numerator for basic and diluted
earnings per common share
    
    $
    8,326
    
    
    $
    3,066
    
    
    $
    11,773
    
    
    $
    7,686Denominator  Average Shares Outstanding:Denominator for basic earnings per
common share  weighted average shares
    
    
    17,903
    
    
    
    18,526
    
    
    
    17,972
    
    
    
    18,633Effect of dilutive securities:Stock options
    
    
    43
    
    
    
    137
    
    
    
    66
    
    
    
    154Denominator for diluted earnings
per common share
    
    
    17,946
    
    
    
    18,663
    
    
    
    18,038
    
    
    
    18,787Basic earnings per common share
    
    $
    0.47
    
    
    $
    0.17
    
    
    $
    0.66
    
    
    $
    0.41Diluted earnings per common share
    
    $
    0.46
    
    
    $
    0.16
    
    
    $
    0.65
    
    
    $
    0.41




7



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##### 



6.
    
    EQUITY COMPENSATION
     (In 000s, except per share amounts)
    
    For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004Stock-based compensation cost included in
net income (net of taxes)
    
    $
    803
    
    
    $
    515
    
    
    $
    1,638
    
    
    $
    749Net income:As reported
    
    $
    8,326
    
    
    $
    3,066
    
    
    $
    11,773
    
    
    $
    7,686Pro forma compensation expense (net of
taxes)
    
    
    (195
    )
    
    
    (202
    )
    
    
    (391
    )
    
    
    (405
    )Pro forma net income
    
    $
    8,131
    
    
    $
    2,864
    
    
    $
    11,382
    
    
    $
    7,281Basic earnings per share:As reported
    
    $
    0.47
    
    
    $
    0.17
    
    
    $
    0.66
    
    
    $
    0.41Pro forma
    
    
    0.45
    
    
    
    0.15
    
    
    
    0.63
    
    
    
    0.39Diluted earnings per share:As reported
    
    $
    0.46
    
    
    $
    0.16
    
    
    $
    0.65
    
    
    $
    0.41Pro forma
    
    
    0.45
    
    
    
    0.15
    
    
    
    0.63
    
    
    
    0.39
 8




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##### 



7.
    
    COMMON STOCK
  (In 000s)
    
    Common Shares Outstanding
    
    Common StockBalance as of 12/31/04
    
    
    18,469
    
    
    $
    49,273Stock issued for employee
benefit and performance
incentive compensation
programs
    
    
    143
    
    
    
    5,432Income tax benefit resulting
from employee exercise of
options
    
    
    
    
    
    
    695Stock repurchased
    
    
    (311
    )
    
    
    (12,867
    )Balance as of 6/30/05
    
    
    18,301
    
    
    $
    42,533
  8.
    
    CREDIT FACILITY
    9




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##### 



9.
    
    PROVISION FOR INCOME TAXES
   10.
    
    COMMITMENTS AND CONTINGENCIES
  11.
    
    NEW ACCOUNTING PRONOUNCEMENTS
    10




---



##### 



1.
    
    A modified prospective method in which compensation cost is
recognized beginning with the effective date (a) based on the requirements of
Statement 123(R) for all share-based payments granted after the effective date
and (b) based on the requirements of Statement 123 for all awards granted to
employees prior to the effective date of Statement 123(R) that remain unvested
on the effective date.2.
    
    A modified retrospective method which includes the requirements
of the modified prospective method described above, but also permits entities
to restate based on the amounts previously recognized under Statement 123 for
purposes of pro forma disclosures either (a) all prior periods presented or (b)
prior interim periods of the year of adoption.
   11




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##### 





PART I, ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS




SEASONALITY OF TELEVISION REVENUES




RESULTS OF OPERATIONS


Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004
    12




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##### 



Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004
    13




---



##### 



Capital, Financing and Liquidity
    14




---



##### 



Cash Flows
  Forward Looking Information
  15




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##### 



PART I, ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  PART I, ITEM 4  CONTROLS AND PROCEDURES
   16




---



##### 



PART II, ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Total
    
    
    
    
    
    
    Total Number of
    
    
    Maximum NumberNumber of
    
    
    
    
    
    
    Shares (or Units)
    
    
    of Shares that MayShares (or
    
    
    Average Price
    
    
    Purchased as Part of
    
    
    Yet Be PurchasedUnits)
    
    
    Paid per Share
    
    
    Publicly Announced
    
    
    Under the Plans orPeriod
    
    Purchased
    
    
    (or Unit)
    
    
    Plans or Programs
    
    
    ProgramsApril 1 30, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,815,400May 1  31, 2005
    
    
    124,069
    
    
    $
    36.94
    
    
    
    116,900
    
    
    
    3,698,500June 1  30, 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    3,698,500Total
    
    
    124,069
    
    
    $
    36.94
    
    
    
    116,900
    
    
    
    3,698,500
   PART II, ITEM 4.  Submission Of Matters To A Vote Of Security Holders
 a.
    
    The annual meeting of shareholders of the registrant was held May 3, 2005.b.
    
    The following individuals were elected to serve for three-year terms: Frank E. Melton,
John H. Mullin, III, and Eugene E. Stone, IV. The following individuals are currently
serving as incumbent directors: Hayne Hipp, J. Thurston Roach, William B. Timmerman,
Edward E. Crutchfield, John R. Farmer, William O. McCoy.c.
    
    Matters voted upon at the annual meeting were as follows:
 Withheld/
    
    BrokerFor
    
    Against
    
    Abstentions
    
    Non-VotesTo elect as director:Frank E. Melton
    
    
    10,168,172
    
    
    
    
    
    
    
    6,056,779John H. Mullin, III
    
    
    10,166,272
    
    
    
    
    
    
    
    6,058,679Eugene E. Stone, IV
    
    
    10,146,856
    
    
    
    
    
    
    
    6,078,095To ratify the
selection of Ernst &
Young as independent
public accountants:
    
    
    15,843,894
    
    
    
    325,237
    
    
    
    55,821To consider and act
upon a shareholder
proposal requesting
that the Board of
Directors of the
Company redeem the
rights issued
pursuant to the
Companys Shareholder
Rights Plan
    
    
    7,988,695
    
    
    
    6,736,946
    
    
    
    86,652
    
    
    
    1,412,658
 17




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##### 



PART II, ITEM 5.  OTHER INFORMATION
  PART II, ITEM 6.  EXHIBITS
 INDEX TO EXHIBITS
 EXHIBIT 11
    
    Consolidated Earnings Per Share Computation (included in Note 5
of Notes to Consolidated and Condensed Financial Statements)EXHIBIT 31
    
    Rule 13a-14(a)/15d-14(a) CertificationsEXHIBIT 32
    
    Section 1350 Certifications
 18




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##### 



SIGNATURES
  THE LIBERTY CORPORATION
    
    Date: August 2, 2005(Registrant)/s/ Howard L. SchrottHoward L. SchrottChief Financial Officer/s/ Martha G. WilliamsMartha G. WilliamsVice President and General Counsel
 19