Edgar Filing: LIBERTY CORP

The Liberty Corporation

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 June 30, 2004

[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission File Number 1-5846

THE LIBERTY CORPORATION

(Exact name of registrant as specified in its charter)


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

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 [ ]

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

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock as of the latest practicable date.


		Number of shares Outstanding
Title of each class		as of June 30, 2004

Common Stock		18,770,530

PART I, ITEM 1

THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED BALANCE SHEETS


	June 30,			December 31,
(In 000’s)	2004			2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35,807		$	62,177
Receivables (net of allowance for doubtful accounts)		39,910			42,364
Program rights		1,200			4,564
Prepaid and other current assets		5,468			3,013
Deferred income taxes		2,398			2,183

Total current assets		84,783			114,301
Property, plant, and equipment
Land		5,647			5,657
Buildings and improvements		50,387			48,969
Furniture and equipment		171,740			167,775
Less: Accumulated depreciation		(134,517	)		(125,417	)

		93,257			96,984
Intangible assets subject to amortization (net of $606 and $841 accumulated amortization in 2004 and 2003, respectively)		329			270
FCC licenses		304,525			304,525
Goodwill		101,387			101,387
Investments and other assets		26,349			44,798

Total assets	$	610,630		$	662,265

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	16,412		$	19,283
Dividends payable		4,593			4,534
Program contract obligations		1,165			4,734
Accrued income taxes		899			3,874

Total current liabilities		23,069			32,425
Unearned revenue		13,580			11,802
Deferred income taxes		92,060			89,417
Other liabilities		6,869			6,621
Revolving credit facility		55,000			—

Total liabilities		190,578			140,265

Shareholders’ equity
Common stock		62,127			71,788
Unearned stock compensation		(19,849	)		(4,405	)
Retained earnings		377,578			454,379
Unrealized investment gains		196			238

Total shareholders’ equity		420,052			522,000

Total liabilities and shareholders’ equity	$	610,630		$	662,265

See Notes to Consolidated and Condensed Financial Statements.

THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In 000’s, except per share data)	2004			2003			2004			2003
				(Unaudited)
REVENUES
Station revenues (net of commissions)	$	51,138		$	48,062		$	95,738		$	88,941
Cable advertising and other revenues		3,899			3,599			7,130			6,654

Net revenues		55,037			51,661			102,868			95,595
EXPENSES
Operating expenses		32,441			30,300			62,680			59,504
Amortization of program rights		1,781			1,744			3,516			3,460
Depreciation and amortization of intangibles		5,047			4,522			9,539			8,822
Corporate, general, and administrative expenses		5,882			3,583			9,185			6,825

Total operating expenses		45,151			40,149			84,920			78,611
Operating income		9,886			11,512			17,948			16,984
Net investment loss		(4,739	)		(644	)		(5,389	)		(748	)
Interest expense		(242	)		—			(262	)		—

Income before income taxes		4,905			10,868			12,297			16,236
Provision for income taxes		1,839			4,076			4,611			6,089

NET INCOME	$	3,066		$	6,792		$	7,686		$	10,147

BASIC EARNINGS PER COMMON SHARE:	$	0.17		$	0.36		$	0.41		$	0.53
DILUTED EARNINGS PER COMMON SHARE:	$	0.16		$	0.35		$	0.41		$	0.53
Dividends per common share	$	0.25		$	0.24		$	0.50		$	0.48
Special dividend per common share	$	—		$	—		$	4.00		$	—

See Notes to Consolidated and Condensed Financial Statements.

THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
(In 000’s)	2004			2003
	(Unaudited)
OPERATING ACTIVITIES
Net income	$	7,686		$	10,147
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on sale of operating assets		28			8
Realized investment losses		6,215			1,410
Depreciation		9,449			8,699
Amortization of intangibles		90			123
Amortization of program rights		3,516			3,460
Cash paid for program rights		(3,721	)		(3,441	)
Provision for deferred income taxes		2,428			1,313
Changes in operating assets and liabilities:
Receivables		2,454			3,065
Other assets		(1,234	)		1,350
Accounts payable and accrued expenses		(1,230	)		(2,589	)
Accrued income taxes		(1,877	)		—
Unearned revenue		1,778			2,448
Other liabilities		248			228
All other operating activities		(531	)		(414	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		25,299			25,807
INVESTING ACTIVITIES
Purchase of property, plant, and equipment		(5,817	)		(11,941	)
Proceeds from sale of property, plant, and equipment		67			—
Investments acquired		(500	)		(5,500	)
Investments sold		11,257			—
Proceeds from sale of investment properties		1,055			1,871
Other		—			45

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		6,062			(15,525	)
FINANCING ACTIVITIES
Proceeds from borrowings		55,000			—
Dividends paid		(84,429	)		(9,219	)
Stock issued for employee benefit and compensation programs		4,087			1,213
Repurchase of common stock		(32,389	)		(12,321	)

NET CASH PROVIDED BY(USED IN) FINANCING ACTIVITIES		(57,731	)		(20,327	)
DECREASE IN CASH		(26,370	)		(10,045	)
Cash at beginning of period		62,177			67,917

CASH AT END OF PERIOD	$	35,807		$	57,872

See Notes to Consolidated and Condensed Financial Statements.

THE LIBERTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
June 30, 2004
(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 accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States 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, 2004, but 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. In addition, 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.

		The December 31, 2003 financial information was derived from the Company’s previously filed 2003 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, 2003.

2.		COMPREHENSIVE INCOME

		The components of comprehensive income, net of related income taxes, for the three and six month periods ended June 30, 2004 and 2003, respectively, are as follows:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In 000’s)	2004			2003		2004			2003
Net income	$	3,066		$	6,792	$	7,686		$	10,147
Unrealized gains (losses) on securities		(23	)		23		(42	)		92

Comprehensive income	$	3,043		$	6,815	$	7,644		$	10,239

3.		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 and six month periods ended June 30, 2004 and 2003:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In 000’s)	2004			2003			2004			2003
Revenues (net of commissions)
Broadcasting	$	51,138		$	48,062		$	95,738		$	88,941
Cable advertising		3,883			3,490			7,076			6,471
Other		16			109			54			183

Total net revenues	$	55,037		$	51,661		$	102,868		$	95,595

Income before income taxes
Broadcasting	$	15,588		$	15,061		$	27,165		$	24,254
Cable advertising		589			455			782			353
Corporate and other		(11,272	)		(4,648	)		(15,650	)		(8,371	)

Total income before income taxes	$	4,905		$	10,868		$	12,297		$	16,236

		There were no material changes in assets by segment from those disclosed in the Company’s 2003 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.

4.		EMPLOYEE BENEFITS

		The Company has a postretirement plan that provides medical and life insurance benefits for qualified retired employees. The postretirement medical plan is generally contributory with retiree contributions adjusted annually to limit employer contributions to predetermined amounts. The postretirement life plan provides free insurance coverage for retirees and is insured with an unaffiliated company.

		The information presented in this footnote does not reflect the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the “Act”) signed into law December 8, 2003. Specifically, the measures of Net Periodic Postretirement Benefit cost shown do not reflect this Act. Specific authoritative guidance on the accounting treatment of the Act is pending and upon issuance, may require a change in previously reported information.

Net periodic postretirement benefit cost included the following components:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In 000’s)	2004		2003		2004		2003
Service cost	$	6	$	7	$	13	$	14
Amortization of prior service cost		1		1		1		1
Amortization of actuarial net gain		5		—		10		—
Interest cost		34		27		67		55

Net periodic postretirement benefit cost	$	46	$	35	$	91	$	70

5.		EARNINGS PER SHARE

		The calculation of basic and diluted earnings per common share from continuing operations is as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In 000’s except per share data)	2004		2003		2004		2003
Numerator – Earnings:
Net income	$	3,066	$	6,792	$	7,686	$	10,147
Effect of dilutive securities		—		—		—		—

Numerator for basic and diluted earnings per common share	$	3,066	$	6,792	$	7,686	$	10,147

Denominator – Average Shares Outstanding:
Denominator for basic earnings per common share – weighted average shares		18,526		19,095		18,633		19,169
Effect of dilutive securities:
Stock options		137		134		154		114

Denominator for diluted earnings per common share		18,663		19,229		18,787		19,283

Basic earnings per common share	$	0.17	$	0.36	$	0.41	$	0.53
Diluted earnings per common share	$	0.16	$	0.35	$	0.41	$	0.53

6.		EQUITY COMPENSATION

		In accordance with the provisions of Statement of Financial Accounting Standards (“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 required by SFAS No. 123, and has been determined as if the Company had accounted for its employee stock options under the Black-Scholes fair value method described in 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. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate.

		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:


	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
(In 000’s, except per share amounts)	2004			2003			2004			2003
Stock-based compensation cost included in net income (net of taxes)	$	515		$	226		$	749		$	733
Net income:
As reported	$	3,066		$	6,792		$	7,686		$	10,147
Pro forma compensation expense (net of taxes)		(202	)		(204	)		(405	)		(359	)

Pro forma net income	$	2,864		$	6,588		$	7,281		$	9,788
Basic earnings per share:
As reported	$	0.17		$	0.36		$	0.41		$	0.53
Pro forma		0.15			0.35			0.39			0.51
Diluted earnings per share:
As reported	$	0.16		$	0.35		$	0.41		$	0.53
Pro forma		0.15			0.34			0.39			0.51

7.		COMMON STOCK

		The following table summarizes the Common Stock activity from the date of the Company’s most recently audited annual financial statements to the end of the period covered by this report:


	Common
	Shares			Common
(In 000’s)	Outstanding			Stock
Balance as of 12/31/03		18,931		$	71,788
Stock issued for employee benefit and performance incentive compensation programs		512			21,630
Income tax benefit resulting from employee exercise of options					1,098
Stock Repurchased		(672	)		(32,389	)

Balance as of 6/30/04		18,771		$	62,127

		During the first quarter of 2004 the Company funded the accrued 2003 discretionary contribution to its employee retirement and savings plan. Half of this funding, approximately $1.6 million, was in the form of approximately 32,000 shares of Liberty common stock.

8.		CREDIT FACILITY

		On March 21, 2001, the Company entered into a $100 million unsecured 364-day revolving credit facility with a bank. On February 2, 2004, the Company renewed the facility through May 18, 2005, on substantially similar terms. On March 24, 2004, the Company made its first and only draw on the line in the amount of $55.0 million. Interest is payable quarterly at 1.75%.

9.		IMPAIRMENT OF INVESTMENTS

		During the second quarter of 2004, the Company recorded a $5.3 million impairment on one of its strategic investments, a developer of digital entertainment to be viewed at existing movie theaters. The Company fully reserved this investment due to the investee company’s current inadequate cash balances and inability to secure financing from additional investors.

10.		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.

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 June 30, 2004 Compared to Three Months Ended June 30, 2003

Total net revenue increased $3.4 million, on a year-over-year basis. Station net revenue increased $3.1 million for the same period. Cable and other net revenue increased $0.3 million on increases in local and political revenue. While station local and national revenue were both up four percent, the most significant portion of the year-over-year increase was from political revenue. Political revenue for the second quarter of 2004 was $3.9 million as compared to $2.0 million in the second quarter of 2003. The Company’s core local and national revenues were up due mainly to increases in the automotive, retail, and financial services categories, while most of the other categories tracked by the Company were flat compared with their 2003 levels.

Operating expenses, which include amortization of program rights, were $34.2 million for the second quarter of 2004, an increase of $2.2 million, seven percent, over the $32.0 million reported for the second quarter of 2003. The increase in operating expenses is due mainly to increased medical insurance costs, programming costs, and planned annual increases in employee compensation.

Corporate expenses were $5.9 million in the second quarter of 2004, an increase of $2.3 million as compared to the $3.6 million reported for the second quarter of 2003. The increase in corporate expenses is due to annual increases in employee compensation coupled with the $1.6 million charge taken related to the settlement of all outstanding issues associated with the terminated GNS Media (“GNS”) transaction. During 2003, the Company announced that it was in negotiations with GNS for the purpose of entering into certain agreements associated with GNS’s proposed purchase of a television station. Those negotiations were subsequently terminated.

Net investment income for the second quarter of 2004 was a loss of $4.7 million. Interest earned on cash balances and notes receivable, and a $0.7 million gain on sale of an investment in the Company’s venture capital portfolio were offset by a $5.3 million impairment of one of the Company’s strategic investments, a developer of digital entertainment to be viewed at existing movie theaters. The Company fully reserved this investment due to the investee company’s current inadequate cash balances and inability to secure financing from additional investors.

Six Months Ended June 30, 2004 Compared to Six Months Ended June 30, 2003

Total net revenue increased $7.3 million on a year-over-year basis. Station net revenue increased $6.8 million for the same period. Cable and other net revenue increased $0.5 million on increases in local and political revenue. While station local and national revenue were both up five percent, the most significant portion of the year-over-year increase was from political revenue. Political revenue for the first half of 2004 was $6.5 million as compared to $2.7 million in the first half of 2003. The Company’s core local and national revenues increased as the automotive, retail, financial services, and telecommunications categories were up modestly to significantly, while most of the other categories tracked by the Company were flat to off slightly from their 2003 levels.

Operating expenses, which include amortization of program rights, were $66.2 million for the first half of 2004, an increase of $3.2 million, five percent, over the $63.0 million reported for the first half of 2003. The increase in operating expenses is due mainly to increases in medical insurance costs, programming costs, increased payroll related costs associated with higher levels of local sales commissions as a direct result of higher local sales revenue, and planned annual increases in employee compensation.

Corporate expenses were $9.2 million in the first half of 2004, an increase of $2.4 million as compared to the $6.8 million reported for the first half of 2003. The increase in corporate expenses is due to annual increases in employee compensation coupled with the $1.6 million charge taken related to the settlement of all outstanding issues associated with the terminated GNS Media (“GNS”) transaction. During 2003, the Company announced that it was in negotiations with GNS for the purpose of entering into certain agreements associated with GNS’s proposed purchase of a television station. Those negotiations were subsequently terminated.

Net investment income for the first half of 2004 was a loss of $5.4 million. Interest earned on cash balances and notes receivable, and a $0.7 million gain on sale of an investment in the Company’s venture capital portfolio were offset by $1.1 million of impairments taken during the first quarter of 2004 and a $5.3 million impairment of one of the Company’s strategic investments taken during the second quarter of 2004.

Capital, Financing and Liquidity

At June 30, 2004, the Company had cash of $35.8 million, outstanding debt of $55.0 million, and $45.0 million available under its $100 million credit facility. During the first quarter of 2004, the Company declared a special dividend of $4.00 per share in addition to its normal recurring quarterly dividend of $0.25 per share. The accrued dividends of $79.3 million were paid during the second quarter of 2004 using a significant portion of the Company’s cash balances.

The revolving credit facility has both an interest coverage and a leverage coverage covenant. These covenants, which involve debt levels, interest expense, EBIT, and EBITDA (measures of cash earnings defined in the revolving credit agreement), can affect the interest rate on current and future borrowings. The Company was in compliance with all covenants throughout the quarter.

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 Company’s operating requirements and 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 $25.3 million for the first six months of 2004 compared to $25.8 million for the same period of the prior year. The Company’s net cash provided by in investing activities was $6.1 million for the six month period ended June 30, 2004, as compared to net cash used in investing activities of $15.5 million for the same period of 2003. The increase in net cash provided by investing activities is attributable to lower levels of fixed asset purchases related to digital television broadcasting during 2004 and the cash realized on the sale of investments in the Company’s venture capital and strategic investment portfolios. Net cash used in financing activities for the six months ended June 30, 2004 was $57.7 million compared to $20.3 million for the first six months of 2003. During 2004, the Company completed the first draw of $55.0 million on its previously unused $100 million line of credit. Excluding the effect of these borrowings, the increase in net cash used in financing activities is due mainly to the special dividend of $4.00 per share paid during the second quarter of 2004, and to higher levels of repurchase activity in the Company’s stock buy-back program during 2004 as compared to 2003.

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.

PART I, ITEM 4
CONTROLS AND PROCEDURES

As of the end of the period covered by 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 as of the end of the period covered by this report the Company’s disclosure controls and procedures are effective in providing reasonable assurance that material information relating to the Company required to be included in the Company’s periodic SEC filings was made known to them during the period covered by this report. 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.

PART II, ITEM 2e.
CHANGES IN SECURITIES AND USE OF PROCEEDS


	Total				Total Number of		Maximum Number
	Number of				Shares (or Units)		of Shares that May
	Shares (or		Average Price		Purchased as Part of		Yet Be Purchased
	Units)		Paid per Share		Publicly Announced		Under the Plans or
Period	Purchased		(or Unit)		Plans or Programs		Programs
April 1 – 30, 2004		—		—		—		3,636,700
May 1 – 31, 2004		130,100	$	45.90		130,100		3,506,600
June 1 – 30, 2004		178,900	$	46.88		178,900		3,327,700
Total		309,000	$	46.47		309,000		3,327,700

On February 4, 2003 Liberty’s Board of Directors extended to February 28, 2004 the Company’s authorization to purchase from time to time up to 4,000,000 shares of stock in the open market or directly negotiated transactions.

On February 3, 2004 Liberty’s Board of Directors extended to February 28, 2005 the Company’s authorization to purchase from time to time up to 4,000,000 shares of stock in the open market or directly negotiated transactions.

PART II, ITEM 4.
Submission Of Matters To A Vote Of Security Holders

a. The annual meeting of shareholders of the registrant was held May 4, 2004.

b. The following individuals were elected to serve for three-year terms: Edward Crutchfield, John R. Farmer, and William O. McCoy. The following individuals are currently serving as incumbent directors: Hayne Hipp, J. Thurston Roach, William B. Timmerman, Frank E. Melton, John H. Mullin, III and Eugene E. Stone, IV.

c. Matters voted upon at the annual meeting were as follows:


					Withheld/		Broker
	For		Against		Abstentions		Non-Votes
To elect as director:
Edward Crutchfield		14,408,035				2,317,203
John R. Farmer		14,437,792				2,287,446
William O. McCoy		14,371,887				2,353,351
To ratify the selection of Ernst & Young as independent public accountants:		16,463,128		212,636		49,474
To consider and act upon a shareholder proposal requesting that the Board of Directors of the Company redeem the rights issued pursuant to the Company’s Shareholder Rights Plan		8,756,775		6,613,402		120,584		1,234,477

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 furnished a current report on Form 8-K dated May 4, 2004 with respect to the press release announcing its first quarter 2004 operating results.

	2.		The Company furnished a current report on Form 8-K dated May 4, 2004 with respect to the Company declaring a regular quarterly dividend of 25 cents per share on its common stock, payable on July 2, 2004 to shareholders of record on June 15, 2004.

INDEX TO EXHIBITS


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

EXHIBIT 31		Rule 13a-14(a)/15d-14(a) Certifications

EXHIBIT 32		Section 1350 Certifications

SIGNATURES

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


THE LIBERTY CORPORATION		Date: August 3, 2004

(Registrant)

/s/ Howard L. Schrott

Howard L. Schrott
Chief Financial Officer

/s/ Martha G. Williams

Martha G. Williams
Vice President, General Counsel and Secretary