##### 



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 March 31, 2003                                            
|  |  |                                                                                          
|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




(Exact name of registrant as specified in its charter)


|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|South Carolina                                                 |  | 57-0507055                       
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer
identification No.)

135 South Main Street, Greenville, SC 29601




(Address of principal executive offices)


Registrants telephone number, including area code: 864/241-5400

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   o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes   x   
No   o

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 March 31, 2003        
|                    |  |                             
|Common Stock        |  | 19,175,041                  





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##### 



PART I, ITEM 1

THE LIBERTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED AND CONDENSED BALANCE SHEETS


|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |          |         |         | 
|------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------- | -------------------------- | ------------------------------------------ | ------------ | ----------- | ------- | ------- | -------- | ------- | ------- | 
|(In 000s)                                                                                                               |                                                      | March 31,                  |                                            | December 31,
|                                                                                                                         |                                                      |                            |                                            |              | 2003        |         | 2002   
|                                                                                                                         |                                                      |                            |                                            |              |             |         |        
|                                                                                                                         |                                                      |                            |                                            |              | (Unaudited) |         |         |          |        
|ASSETS                                                                                                                   |                                                      |                            |                                            |              |             |         |         |         
|Current assets:                                                                                                          |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         | Cash and cash equivalents                            |                            | $                                          | 50,088       |             |         | $       | 67,917   |        
|                                                                                                                         | Receivables (net of allowance for doubtful accounts) |                            |                                            | 34,232       |             |         |         | 42,069   |        
|                                                                                                                         | Program rights                                       |                            |                                            | 2,967        |             |         |         | 4,433    |        
|                                                                                                                         | Prepaid and other current assets                     |                            |                                            | 2,710        |             |         |         | 2,982    |        
|                                                                                                                         | Income taxes receivable                              |                            |                                            | 4,839        |             |         |         | 2,370    |        
|                                                                                                                         | Deferred income taxes                                |                            |                                            | 5,508        |             |         |         | 5,508    |        
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      |                            | Total current assets                       |              |             | 100,344 |         |          |         | 125,279 | 
|Property, plant, and
equipment                                                                                           |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         | Land                                                 |                            |                                            | 5,639        |             |         |         | 5,639    |        
|                                                                                                                         | Buildings and improvements                           |                            |                                            | 57,989       |             |         |         | 52,638   |        
|                                                                                                                         | Furniture and equipment                              |                            |                                            | 156,984      |             |         |         | 157,401  |        
|                                                                                                                         | Less: Accumulated depreciation                       |                            |                                            | (120,999     | )           |         |         | (120,409 | )      
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      |                            | 99,613                                     |              |             |         | 95,269  |         
|Intangible assets subject to amortization (net of
$812 and $751 accumulated amortization in 2003 and
2002, respectively) |                                                      |                            | 308                                        |              |             |         | 369     |         
|FCC licenses and network affiliations                                                                                    |                                                      |                            | 304,285                                    |              |             |         | 304,285 |         
|Goodwill                                                                                                                 |                                                      |                            | 101,387                                    |              |             |         | 101,387 |         
|Investments and other assets                                                                                             |                                                      |                            | 45,920                                     |              |             |         | 44,162  |         
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      |                            | Total assets                               |              | $           | 651,857 |         |          | $       | 670,751 | 
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                     |                                                      |                            |                                            |              |             |         |         |         
|Current liabilities:                                                                                                     |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         | Accounts payable and accrued expenses                |                            | $                                          | 17,103       |             |         | $       | 24,433   |        
|                                                                                                                         | Program contract obligations                         |                            |                                            | 3,000        |             |         |         | 4,486    |        
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      | Total current liabilities  |                                            |              | 20,103      |         |         |          | 28,919  |        
|Unearned revenue                                                                                                         |                                                      |                            | 5,212                                      |              |             |         | 5,637   |         
|Deferred income taxes                                                                                                    |                                                      |                            | 91,863                                     |              |             |         | 91,647  |         
|Other liabilities                                                                                                        |                                                      |                            | 7,325                                      |              |             |         | 6,312   |         
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      |                            | Total liabilities                          |              |             | 124,503 |         |          |         | 132,515 | 
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|Shareholders equity                                                                                                     |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         | Common stock                                         |                            |                                            | 83,000       |             |         |         | 92,978   |        
|                                                                                                                         | Unearned stock compensation                          |                            |                                            | (3,528       | )           |         |         | (3,802   | )      
|                                                                                                                         | Retained earnings                                    |                            |                                            | 447,640      |             |         |         | 448,887  |        
|                                                                                                                         | Unrealized investment gains (losses)                 |                            |                                            | 242          |             |         |         | 173      |        
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      | Total shareholders equity |                                            |              | 527,354     |         |         |          | 538,236 |        
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         
|                                                                                                                         |                                                      |                            | Total liabilities and shareholders equity |              | $           | 651,857 |         |          | $       | 670,751 | 
|                                                                                                                         |                                                      |                            |                                            |              |             |         |         |         

See Notes to Consolidated and Condensed Financial Statements.

2



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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS


|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |        |         |       | 
|-------------------------------------------------------------------------------------- | ------------------------ | ----------------- | ---------------------------------------------------------------------------------------- | ------ | ------------------ | ----- | ------- | ------ | ------- | ----- | 
|                                                                                       |                          |                   |                                                                                          |        | Three Months Ended
|                                                                                       |                          |                   |                                                                                          |        | March 31,         
|                                                                                       |                          |                   |                                                                                          |        |                   
|(In 000s, except per share data)                                                      |                          | 2003              |                                                                                          | 2002  
|                                                                                       |                          |                   |                                                                                          |        |                    |       |        
|                                                                                       |                          |                   |                                                                                          |        | (Unaudited)       
|REVENUES                                                                               |                          |                   |                                                                                          |        |                    |       |         |       
|Station revenues (net of commissions)                                                  |                          | $                 | 40,575                                                                                   |        |                    | $     | 39,510  |       
|Cable advertising and other revenues                                                   |                          |                   | 3,354                                                                                    |        |                    |       | 3,316   |       
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|                                                                                       | Net revenues             |                   |                                                                                          | 43,929 |                    |       |         | 42,826 |        
|EXPENSES                                                                               |                          |                   |                                                                                          |        |                    |       |         |       
|Operating expenses                                                                     |                          |                   | 29,199                                                                                   |        |                    |       | 26,857  |       
|Amortization of program rights                                                         |                          |                   | 1,716                                                                                    |        |                    |       | 1,852   |       
|Depreciation and amortization of intangibles                                           |                          |                   | 4,300                                                                                    |        |                    |       | 4,720   |       
|Corporate, general, and administrative expenses                                        |                          |                   | 3,242                                                                                    |        |                    |       | 2,805   |       
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|                                                                                       | Total operating expenses |                   |                                                                                          | 38,457 |                    |       |         | 36,234 |        
|                                                                                       |                          |                   | Operating income                                                                         |        |                    | 5,472 |         |        |         | 6,592 | 
|Net investment income (loss)                                                           |                          |                   | (104                                                                                     | )      |                    |       | 2       |       
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|                                                                                       |                          |                   | Income before income taxes and the cumulative
effect of a change in accounting principle |        |                    | 5,368 |         |        |         | 6,594 | 
|Provision for income taxes                                                             |                          |                   | 2,013                                                                                    |        |                    |       | 2,506   |       
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|                                                                                       |                          |                   | Income before the cumulative effect of a
change in accounting principle                  |        |                    | 3,355 |         |        |         | 4,088 | 
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|Cumulative effect of a change in accounting
principle (net of income taxes of $29,045) |                          |                   |                                                                                         |        |                    |       | (47,388 | )     
|                                                                                       |                          | NET INCOME (LOSS) |                                                                                          | $      | 3,355              |       |         | $      | (43,300 | )    
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|BASIC EARNINGS PER COMMON SHARE:                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|From income before the cumulative effect of a
change in accounting principle           |                          | $                 | 0.17                                                                                     |        |                    | $     | 0.21    |       
|Cumulative effect of a change in accounting principle                                  |                          |                   |                                                                                         |        |                    |       | (2.42   | )     
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|Basic earnings (loss) per common share                                                 |                          | $                 | 0.17                                                                                     |        |                    | $     | (2.21   | )     
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|DILUTED EARNINGS PER COMMON SHARE:                                                     |                          |                   |                                                                                          |        |                    |       |         |       
|From income before the cumulative effect of a
change in accounting principle           |                          | $                 | 0.17                                                                                     |        |                    | $     | 0.21    |       
|Cumulative effect of a change in accounting principle                                  |                          |                   |                                                                                         |        |                    |       | (2.40   | )     
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|Diluted earnings (loss) per common share                                               |                          | $                 | 0.17                                                                                     |        |                    | $     | (2.19   | )     
|                                                                                       |                          |                   |                                                                                          |        |                    |       |         |       
|Dividends per common share                                                             |                          | $                 | 0.24                                                                                     |        |                    | $     | 0.22    |       

See Notes to Consolidated and Condensed Financial Statements.

3



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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS


|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |        |       | 
|-------------------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------------------------- | ------- | ---------------------------- | ----- | - | ------- | ------ | ----- | 
|                                                                                                   |                                       |                                                                     |         | Three Months Ended March 31,
|                                                                                                   |                                       |                                                                     |         |                             
|(In 000s)                                                                                         |                                       | 2003                                                                |         | 2002                        
|                                                                                                   |                                       |                                                                     |         |                              |       |  
|                                                                                                   |                                       |                                                                     |         | (Unaudited)                 
|OPERATING ACTIVITIES                                                                               |                                       |                                                                     |         |                              |       |   |         |       
|Net income (loss)                                                                                  |                                       | $                                                                   | 3,355   |                              |       | $ | (43,300 | )     
|Less: Cumulative effect of a change in accounting principle                                        |                                       |                                                                     |        |                              |       |   | 47,388  |       
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       
|                                                                                                   |                                       | Income before cumulative effect of a change in
accounting principle |         |                              | 3,355 |   |         |        | 4,088 | 
|Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                       |                                                                     |         |                              |       |   |         |       
|                                                                                                   | Loss on sale of operating assets      |                                                                     |         | 340                          |       |   |         |       |      
|                                                                                                   | Realized investment losses            |                                                                     |         | 550                          |       |   |         | 21     |      
|                                                                                                   | Depreciation                          |                                                                     |         | 4,239                        |       |   |         | 4,175  |      
|                                                                                                   | Amortization of intangibles           |                                                                     |         | 61                           |       |   |         | 545    |      
|                                                                                                   | Amortization of program rights        |                                                                     |         | 1,716                        |       |   |         | 1,852  |      
|                                                                                                   | Cash paid for program rights          |                                                                     |         | (1,736                       | )     |   |         | (1,939 | )    
|                                                                                                   | Provision for deferred income taxes   |                                                                     |         | 216                          |       |   |         | 2,748  |      
|Changes in operating assets and liabilities:                                                       |                                       |                                                                     |         |                              |       |   |         |       
|                                                                                                   | Receivables                           |                                                                     |         | 7,837                        |       |   |         | 4,939  |      
|                                                                                                   | Other assets                          |                                                                     |         | (1,311                       | )     |   |         | 2,405  |      
|                                                                                                   | Accounts payable and accrued expenses |                                                                     |         | (5,827                       | )     |   |         | (897   | )    
|                                                                                                   | Accrued income taxes                  |                                                                     |         |                             |       |   |         | (313   | )    
|                                                                                                   | Unearned revenue                      |                                                                     |         | (425                         | )     |   |         | (546   | )    
|                                                                                                   | Other liabilities                     |                                                                     |         | 1,013                        |       |   |         | 11     |      
|                                                                                                   | All other operating activities        |                                                                     |         | (333                         | )     |   |         | 477    |      
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                |                                       |                                                                     | 9,695   |                              |       |   | 17,566  |       
|INVESTING ACTIVITIES                                                                               |                                       |                                                                     |         |                              |       |   |         |       
|Purchase of property, plant, and equipment                                                         |                                       |                                                                     | (8,918  | )                            |       |   | (4,213  | )     
|Investments acquired                                                                               |                                       |                                                                     | (4,000  | )                            |       |   | (6,500  | )     
|Proceeds from sale of investment properties                                                        |                                       |                                                                     | 1,686   |                              |       |   | 959     |       
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                                |                                       |                                                                     | (11,232 | )                            |       |   | (9,754  | )     
|FINANCING ACTIVITIES                                                                               |                                       |                                                                     |         |                              |       |   |         |       
|Dividends paid                                                                                     |                                       |                                                                     | (4,602  | )                            |       |   | (4,322  | )     
|Stock issued for employee benefit and compensation programs                                        |                                       |                                                                     | 631     |                              |       |   | 242     |       
|Repurchase of common stock                                                                         |                                       |                                                                     | (12,321 | )                            |       |   |        |       
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                |                                       |                                                                     | (16,292 | )                            |       |   | (4,080  | )     
|INCREASE (DECREASE) IN CASH                                                                        |                                       |                                                                     | (17,829 | )                            |       |   | 3,732   |       
|Cash at beginning of period                                                                        |                                       |                                                                     | 67,917  |                              |       |   | 35,489  |       
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       
|CASH AT END OF PERIOD                                                                              |                                       | $                                                                   | 50,088  |                              |       | $ | 39,221  |       
|                                                                                                   |                                       |                                                                     |         |                              |       |   |         |       

See Notes to Consolidated and Condensed Financial Statements.

4



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##### 



THE LIBERTY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS


March 31, 2003
(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, 2003, 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. The December 31, 2002 financial information was derived from the
Companys previously filed 2002 Form 10-K. 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, 2002.
|  
|2. |  | STATEMENT NO. 142 GOODWILL AND OTHER INTANGIBLE ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | During the second quarter of 2001, the Financial Accounting Standards Board
(FASB) issued Statement No. 142 Goodwill and Other Intangible Assets.
Statement No. 142 requires that goodwill and certain other identified
intangibles no longer be amortized to earnings, but instead be reviewed for
impairment. The amortization of goodwill and certain other identified
intangibles ceased upon adoption of the Statement, which for the Company was
January 1, 2002. In connection with the adoption of Statement No. 142, the
Company reduced the carrying value of its FCC licenses by $76.4 million
($47.4 million after-tax) as a cumulative effect of a change in accounting
principle.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   |  | At March 31, 2003 and December 31, 2002, the Companys intangible assets not
subject to amortization were comprised of FCC licenses and network
affiliations. At March 31, 2003 and December 31, 2002, the Companys
intangible assets subject to amortization were comprised of leases acquired
through station purchases for space on certain of its towers, non-compete
agreements, and loan costs associated with the Companys unused line of
credit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|3. |  | COMPREHENSIVE INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |  | The components of comprehensive income, net of related income taxes, for the
three month periods ended March 31, 2003 and 2002, respectively, are as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

|                               |  |                    |       |      |  |   |         |  
|------------------------------ |  | ------------------ | ----- | ---- |  | - | ------- | -
|                               |  | Three Months Ended
|                               |  | March 31,         
|                               |  |                   
|(In 000s)                     |  | 2003               |       | 2002
|                               |  |                    |       |     
|Net income (loss)              |  | $                  | 3,355 |      |  | $ | (43,300 | )
|Unrealized gains on securities |  |                    | 69    |      |  |   | 504     |  
|                               |  |                    |       |      |  |   |         |  
|Comprehensive income (loss)    |  | $                  | 3,424 |      |  | $ | (42,796 | )
|                               |  |                    |       |      |  |   |         |  

5



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##### 





|4. |  | SEGMENT REPORTING                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The Company operates primarily in the television broadcasting and cable
advertising businesses. The Company currently owns and operates fifteen
television stations, primarily in the Southeast and Midwest. Each of the
stations is affiliated with a major network, with eight NBC affiliates, five
ABC affiliates, and two CBS affiliates. The Company evaluates segment
performance based on income before income taxes, excluding unusual, or
non-operating items.
|  
|   |  | The following table summarizes financial information by segment for the
three month periods ended March 31, 2003 and 2002:                                                                                                                                                                                                                                                                                                                                             

|                                                                                           |                     |           |                    |        |      |   |        |        |  
|------------------------------------------------------------------------------------------ | ------------------- | --------- | ------------------ | ------ | ---- | - | ------ | ------ | -
|                                                                                           |                     |           | Three Months Ended
|(In 000s)                                                                                 |                     | March 31,
|                                                                                           |                     |           |                   
|                                                                                           |                     |           | 2003               |        | 2002
|                                                                                           |                     |           |                    |        |     
|Revenues (net of commissions)                                                              |                     |           |                    |        |      |   |        |       
|                                                                                           | Broadcasting        |           | $                  | 40,575 |      |   | $      | 39,510 |  
|                                                                                           | Cable advertising   |           |                    | 3,281  |      |   |        | 3,180  |  
|                                                                                           | Other               |           |                    | 73     |      |   |        | 136    |  
|                                                                                           |                     |           |                    |        |      |   |        |       
|Total net revenues                                                                         |                     | $         | 43,929             |        |      | $ | 42,826 |       
|                                                                                           |                     |           |                    |        |      |   |        |       
|Income before income taxes and cumulative
effect of a change in accounting principle       |                     |           |                    |        |      |   |        |       
|                                                                                           | Broadcasting        |           | $                  | 9,118  |      |   | $      | 9,769  |  
|                                                                                           | Cable advertising   |           |                    | (26    | )    |   |        | 16     |  
|                                                                                           | Corporate and other |           |                    | (3,724 | )    |   |        | (3,191 | )
|                                                                                           |                     |           |                    |        |      |   |        |       
|Total income before income taxes and
cumulative effect of a change in accounting
principle |                     | $         | 5,368              |        |      | $ | 6,594  |       
|                                                                                           |                     |           |                    |        |      |   |        |        |  



| |  | There were no material changes in assets by segment from those disclosed in
the Companys 2002 annual report. The goodwill that appears on the face of
the balance sheet arose through the acquisition of certain television
stations, and therefore has been assigned in its entirety to the
Broadcasting segment.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6



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##### 





|5. |  | EARNINGS PER SHARE                                                                                      
|-- |  | --------------------------------------------------------------------------------------------------------
|  
|   |  | The calculation of basic and diluted earnings per common share from
continuing operations is as follows:

|                                                                                                                                           |               |   |                    |    |      |   |        |     | 
|------------------------------------------------------------------------------------------------------------------------------------------ | ------------- | - | ------------------ | -- | ---- | - | ------ | --- | 
|                                                                                                                                           |               |   | Three Months Ended
|(In 000s except per share data)                                                                                                           | March 31,    
|                                                                                                                                           |               |   |                   
|                                                                                                                                           |               |   | 2003               |    | 2002
|                                                                                                                                           |               |   |                    |    |     
|Numerator  Earnings:                                                                                                                      |               |   |                    |    |      |   |        |    
|Income before the cumulative effect of
change in accounting principle                                                                      |               | $ | 3,355              |    |      | $ | 4,088  |    
|Effect of dilutive securities                                                                                                              |               |   |                   |    |      |   |       |    
|                                                                                                                                           |               |   |                    |    |      |   |        |    
|Numerator for basic and diluted earnings
per common share                                                                                  |               | $ | 3,355              |    |      | $ | 4,088  |    
|                                                                                                                                           |               |   |                    |    |      |   |        |    
|Denominator  Average Shares Outstanding:                                                                                                  |               |   |                    |    |      |   |        |    
|Denominator for basic earnings before the
cumulative effect of a change in
accounting principle per common share  weighted average shares |               |   | 19,243             |    |      |   | 19,633 |    
|Effect of dilutive securities:                                                                                                             |               |   |                    |    |      |   |        |    
|                                                                                                                                           | Stock options |   |                    | 94 |      |   |        | 115 | 
|                                                                                                                                           |               |   |                    |    |      |   |        |    
|Denominator for diluted earnings before
the cumulative effect of a change in
accounting principle per common share                         |               |   | 19,337             |    |      |   | 19,748 |    
|                                                                                                                                           |               |   |                    |    |      |   |        |    
|Basic earnings before the cumulative
effect of a change in accounting principle
per common share                                           |               | $ | 0.17               |    |      | $ | 0.21   |    
|Diluted earnings before the cumulative
effect of a change in accounting principle
per common share                                         |               | $ | 0.17               |    |      | $ | 0.21   |    



|6. |  | EQUITY COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | In accordance with the provisions of SFAS No. 123, Accounting for
Stock-Based Compensation, the Company has elected to follow
Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB No. 25) and related interpretations in
accounting for its equity compensation plans and does not recognize
compensation expense for its stock-based compensation plans other
than for awards of restricted shares. Expense is recognized over the
vesting period of the restricted shares.
|  
|   |  | Under APB No. 25, because the exercise price of the Companys
employee stock options at least equals the market price of the
underlying stock on the date of the grant, no compensation expense is
recognized. Pro forma information regarding net income and earnings
per share is                                                                                                                                                                                                                                     

7



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##### 





| |  | required by SFAS No. 123, and has been determined as if the Company
had accounted for its employee stock options under the fair value
method of that statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Companys
employee stock options have characteristics significantly different
from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
managements opinion, the existing models do not necessarily provide
a reliable single measure of the fair value of its employee stock
options.
|
| |  | For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options vesting
periods. The Companys pro forma information is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

|                                                                    |                             |   |                 |       |      |   |      |         |  
|------------------------------------------------------------------- | --------------------------- | - | --------------- | ----- | ---- | - | ---- | ------- | -
|(In $000s, except per share amounts)                               | For the Three Months       
|                                                                    |                             |   | Ended March 31,
|                                                                    |                             |   |                
|                                                                    |                             |   | 2003            |       | 2002
|                                                                    |                             |   |                 |       |     
|Stock-based compensation cost included in net
income (net of taxes) |                             | $ | 507             |       |      | $ | 137  |        
|Net income (loss):                                                  |                             |   |                 |       |      |   |      |        
|                                                                    | As reported                 |   | $               | 3,355 |      |   | $    | (43,300 | )
|Pro forma compensation expense (net of taxes)                       |                             |   | (180            | )     |      |   | (228 | )      
|                                                                    |                             |   |                 |       |      |   |      |        
|                                                                    | Pro forma net income (loss) |   | $               | 3,175 |      |   | $    | (43,528 | )
|Basic earnings (loss) per share:                                    |                             |   |                 |       |      |   |      |        
|                                                                    | As reported                 |   | $               | 0.17  |      |   | $    | (2.21   | )
|                                                                    | Pro forma                   |   |                 | 0.16  |      |   |      | (2.22   | )
|Diluted earnings (loss) per share:                                  |                             |   |                 |       |      |   |      |        
|                                                                    | As reported                 |   | $               | 0.17  |      |   | $    | (2.19   | )
|                                                                    | Pro forma                   |   |                 | 0.16  |      |   |      | (2.21   | )



|7. |  | CREDIT FACILITY                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | On March 21, 2001, the Company entered into a $100 million unsecured
364-day revolving credit facility with a bank. On May 20, 2002,
the Company renewed the facility for an additional year on
substantially similar terms. No amounts have been drawn on this
facility since inception. The Company is currently negotiating with
a bank for a renewal of the facility on substantially the same terms.
|  
|8. |  | 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.                                                                                                                                                                                                                                         

8



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##### 



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

The Liberty Corporation is a holding company with operations primarily in the
television broadcasting industry. The Companys television broadcasting
subsidiary, Cosmos Broadcasting, consists of fifteen network-affiliated
stations located in the Southeast and Midwest, along with other ancillary
businesses. Eight of the Companys television stations are affiliated with NBC,
five with ABC, and two with CBS.

SEASONALITY OF TELEVISION REVENUES

The Companys revenues are usually subject to seasonal fluctuations. The
advertising revenues of the stations are generally highest in the second and
fourth quarters of each year, due in part to increases in consumer advertising
in the spring and retail advertising in the period leading up to and including
the holiday season. Additionally, advertising revenues in even-numbered years
tend to be higher as they benefit from advertising placed by candidates for
political offices and demand for advertising time in Olympic broadcasts.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31,
2002

Total net revenue increased $1.1 million, on a year-over-year basis. Station
net revenue increased $1.1 million for the same period. Cable and other net
revenue was essentially level with that of the prior year period. Political
revenue for the first quarter of 2003 was $0.7 million as compared to $1.6
million in the first quarter of 2002. Local revenue was up one percent and
national revenue was up six percent on a year-over-year basis. Sales in the
automotive category were up approximately eight percent, while most other
advertising categories tracked by the Company were off modestly from their
2002 levels.

Operating expenses, which include amortization of program rights, were $30.9
million for the first quarter of 2003, an increase of $2.2 million over the
$28.7 million reported for the first quarter of 2002. The increase in
operating expenses is mainly attributable to increases in medical costs and
planned annual increases in employee compensation.

Depreciation and amortization was $4.3 million for the first quarter of 2003, a
decrease of $0.4 million over the $4.7 million reported for the first quarter
of 2002.

Net investment income for the first quarter of 2003 was a loss of $0.1 million.
During the first quarter of 2003, interest earned on cash balances and notes
receivable was offset by an impairment of one of the Companys strategic
investments. The Company fully reserved this investment due to the investee
company receiving a going-concern opinion on its 2002 audited financial
statements.

9



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##### 



Capital, Financing and Liquidity

At March 31, 2003, the Company had cash of $50.1 million and an unused line of
credit of $100 million. The Company anticipates that its primary sources of
cash, those being current cash balances, operating cash flow, and the available
line of credit will be sufficient to finance the operating requirements of its
stations and their anticipated capital expenditures, for both the next 12
months and the foreseeable future thereafter.

Cash Flows

The Companys net cash flow provided by operating activities was $9.7 million
for the first three months of 2003 compared to $17.6 million for the same
period of the prior year. The Companys net cash used in investing activities
was $11.2 million for the three month period ended March 31, 2003, as compared
to $9.8 million for the same period of 2002. The increase in net cash used in
investing activities is attributable to higher levels of fixed asset purchases
related to digital television broadcasting. Net cash used in financing
activities for the three months ended March 31, 2003 was $16.3 million compared
to $4.1 million for the first three months of 2002. The increase in net cash
used in financing activities is due mainly to repurchase activity in the
Companys stock buy-back program during the first quarter of 2003 that was not
present during the same period of 2002.

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, is or
may be viewed as forward-looking. The words expect, believe, anticipate
or similar expressions identify forward-looking statements. 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 national and local
markets for television advertising; 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



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##### 



PART I, ITEM 4
CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Companys
management, including the Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Companys
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures are effective
in timely alerting them to material information relating to the Company
required to be included in the Companys periodic SEC filings. There have been
no significant changes in the Companys internal controls or in other factors
that could significantly affect internal controls subsequent to this
evaluation.

11



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##### 



PART II, ITEM 6.
EXHIBITS 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. |  |                                                                                                   



| | 1. |  | The Company filed a current report on Form 8-K dated
February 4, 2003 with respect to the press release announcing its
fourth quarter 2002 operating results.                                                                                            
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | The Company filed a current report on Form 8-K dated
February 4, 2003 with respect to the Company declaring a regular
quarterly dividend of 24 cents per share on its common stock,
payable on April 2, 2003 to shareholders of record on March 14,
2003.
|
| | 3. |  | The Company filed a current report on Form 8-K dated
March 24, 2003 with respect to the Regulation FD disclosure of
the certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002.          

INDEX TO EXHIBITS

|           |  |                                                                                                                             
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------
|EXHIBIT 11 |  | Consolidated Earnings Per Share Computation (included in Note 5 of
Notes to Consolidated and Condensed Financial Statements)

12



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##### 



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

|                                                                 |  |                  
|---------------------------------------------------------------- |  | -----------------
|THE LIBERTY CORPORATION                                          |  | Date: May 6, 2003
|                                                                 |  |                  
|(Registrant)                                                     | 
|                                                                 |  |                  
|/s/ Howard L. Schrott                                            |  |                  
|                                                                 |  |                  
|Howard L. Schrott
Chief Financial Officer                        |  |                  
|                                                                 |  |                  
|/s/ Martha G. Williams                                           |  |                  
|                                                                 |  |                  
|Martha G. Williams
Vice President, General Counsel and Secretary |  |                  

13



---



##### 



CERTIFICATIONS

I Hayne Hipp, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The Liberty
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                   |  | 
|---------------------------------- |  | 
|Date: May 6, 2003                  |  | 
|                                   |  | 
|/s/ Hayne Hipp                     |  | 
|                                   |  | 
|Hayne Hipp
Chief Executive Officer |  | 

14



---



##### 



I Howard Schrott, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of The Liberty
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                          |  | 
|----------------------------------------- |  | 
|Date: May 6, 2003                         |  | 
|                                          |  | 
|/s/ Howard L. Schrott                     |  | 
|                                          |  | 
|Howard L. Schrott
Chief Financial Officer |  | 

15