<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ------------------
Commission File Number 1-5846
------
THE LIBERTY CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
South Carolina 57-0507055
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
Post Office Box 789, Wade Hampton Boulevard, Greenville, SC 29602
------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 864/609-8436
------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
------ ------
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of the latest practicable date.
Number of shares Outstanding
Title of each class as of September 30, 1996
------------------- ----------------------------
Common Stock 20,186,351
Page 1 of 12 sequentially numbered pages.
The Exhibit Index is on Page 10.
<PAGE> 2
PART I, ITEM 1
THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED BALANCE SHEETS
<TABLE>
(In 000's) SEPTEMBER 30, December 31, 1995
1996
-------------- ----------------
ASSETS (Unaudited)
<S> <C> <C>
Investments:
Fixed Maturity Securities available for sale, at
market, cost of $1,444,978 at 9/30/96 and $1,383,324
at 12/31/95 $ 1,478,573 $ 1,467,039
Equity Securities, at market, cost of $68,569 at
9/30/96 and $68,637 at 12/31/95 79,562 82,508
Mortgage Loans 227,469 213,223
Investment Real Estate 140,368 135,306
Loans to Policyholders 97,837 98,369
Other Long-Term Investments 23,449 27,535
Short-Term Investments 250 ---
--------------------- ---------------------
Total Investments 2,047,508 2,023,980
Cash 35,979 43,741
Accrued Investment Income 19,629 20,018
Receivables 49,766 46,098
Receivable from Reinsurers 254,505 275,090
Deferred Acquisition Costs and Cost of Business Acquired 333,801 352,113
Buildings and Equipment 79,657 79,789
Intangibles Related to Television Operations 94,954 99,056
Goodwill Related to Insurance Acquisitions 36,020 37,239
Other Assets 57,609 57,172
--------------------- ---------------------
Total Assets $ 3,009,428 $ 3,034,296
===================== =====================
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Liabilities
Policy Liabilities $ 1,872,557 $ 1,862,859
Notes, Mortgages and Other Debt 163,421 158,444
Long Term Debt 100,000 100,000
Accrued Income Taxes 10,189 6,665
Deferred Income Taxes 150,241 182,083
Accounts Payable and Accrued Expenses 89,330 67,094
Other Liabilities 24,977 35,722
--------------------- ---------------------
Total Liabilities 2,410,715 2,412,867
--------------------- ---------------------
Redeemable Preferred Stock
1994-A Series, $35.00 redemption value, shares issued
and outstanding - 668,207 in 1996 and 1995 23,387 23,387
1994-B Series, $37.50 redemption value, shares issued
and outstanding - 593,826 in 1996 and 594,126 in 1995 22,269 22,280
--------------------- ---------------------
Total Redeemable Preferred Stock 45,656 45,667
--------------------- ---------------------
Shareholders' Equity
Common Stock 162,553 158,735
Series 1995-A Convertible Preferred Stock, $35.00
redemption value, 599,985 shares issued and outstanding 20,999 20,999
Unearned Stock Compensation (7,363) (6,050)
Unrealized Investment Gains (Losses) 26,879 57,986
Cumulative Foreign Currency Translation Adjustment (933) (999)
Retained Earnings 350,922 345,091
--------------------- ---------------------
Total Shareholders' Equity 553,057 575,762
--------------------- ---------------------
Total Liabilities, Redeemable Preferred Stock and
Shareholders' Equity $ 3,009,428 $ 3,034,296
===================== =====================
</TABLE>
See Notes to Consolidated and Condensed Financial Statements.
2
<PAGE> 3
THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
September 30, September 30,
----------------------- ------------------------
(In 000's, except per share data) 1996 1995 1996 1995
------------ --------- ----------- ---------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Insurance Premiums & Policy Charges $ 82,215 $ 83,554 $ 238,221 $252,308
Broadcasting Revenues 34,706 29,323 98,372 86,210
Net Investment Income 38,895 38,149 114,360 109,321
Service Contract Revenue --- 2,221 --- 6,713
Realized Investment Gains (Losses) (1,372) (14) (1,183) (2,708)
Other Income 417 --- 657 ---
----------- -------- ------------ --------
Total Revenues 154,861 153,233 450,427 451,844
----------- -------- ------------ --------
EXPENSES
Policyholder Benefits 52,820 58,746 163,338 182,236
Insurance Commissions 17,702 14,022 48,932 40,946
General Insurance Expenses 24,171 16,559 52,528 50,564
Amortization of Deferred Acquisition Costs 39,656 11,214 61,104 31,861
Broadcasting Expenses 24,034 21,275 69,265 61,431
Interest Expense 3,962 3,935 11,421 11,138
Other Expenses 8,747 3,860 14,945 11,120
----------- -------- ------------ --------
Total Expenses 171,092 129,611 421,533 389,296
----------- -------- ------------ --------
Income (Loss) Before Income Taxes (16,231) 23,622 28,894 62,548
Income Tax Provision (Benefit) (5,411) 8,404 9,359 21,387
NET INCOME (LOSS) $ (10,820) $ 15,218 $ 19,535 $ 41,161
=========== ======== ============ ========
EARNINGS (LOSS) PER SHARE: (Exhibit 11) $ (0.55) $ .70 $ 0.84 $ 1.91
Dividends Per Common Share $ .185 $ .17 $ .54 $ .495
</TABLE>
See Notes to Consolidated and Condensed Financial Statements.
3
<PAGE> 4
THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
(In 000's) 1996 1995
------------- -------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 19,535 $ 41,161
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Increase in policy liabilities (195) 17,701
Decrease in accounts payable and accrued liabilities 25,496 7,377
Decrease in receivables 9,472 (2,743)
Amortization of policy acquisition costs 61,104 31,861
Policy acquisition costs deferred (38,204) (40,952)
Realized investment (gains) losses 1,183 2,708
Gain on sale of operating assets (1,780) (2,488)
Depreciation and amortization 16,962 14,187
Amortization of bond premium and discount (3,166) (5,003)
Provision for deferred income taxes (15,338) 1,687
All other operating activities, net (20,011) 2,413
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 55,058 67,909
INVESTMENT ACTIVITIES
Investment securities sold - available for sale 121,703 108,270
Investment securities matured or redeemed by issuer:
Available for sale 55,619 21,523
Held to maturity --- 18,542
Cost of investment securities acquired - available for sale (229,809) (241,487)
Mortgage loans made (31,173) (15,446)
Mortgage loan repayments 16,875 17,316
Purchase of investment real estate, buildings and equipment (33,766) (49,028)
Sale of investment real estate, buildings and equipment 21,663 22,486
Purchase of short-term investments (64,406) (33,690)
Sales of short-term investments 64,156 39,347
Net cash paid on purchase of television station --- (5,140)
All other investment activities, net (2,311) (2,642)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (81,449) (119,949)
FINANCING ACTIVITIES
Proceeds from borrowings 2,237,703 1,690,400
Principal payments on debt (2,234,404) (1,661,910)
Dividends paid (13,704) (12,506)
Stock issued for employee benefit and compensation programs 1,062 2,190
Return of policyholders' account balances (26,633) (26,761)
Receipts credited to policyholders' account balances 54,605 56,790
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 18,629 48,203
INCREASE (DECREASE) IN CASH (7,762) (3,837)
Cash at beginning of year 43,741 51,400
---------- ----------
CASH AT END OF PERIOD $ 35,979 $ 47,563
========== ==========
</TABLE>
See Notes to Consolidated and Condensed Financial Statements.
4
<PAGE> 5
THE LIBERTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
September 30, 1996
(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, 1996, but it does reflect all adjustments
considered, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented (See Note 2
below for discussion of special charges reported in the third quarter of
1996). 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, 1995.
2. SPECIAL CHARGES
During the third quarter of 1996, and concurrent with a realignment of the
Company's management structure, the Company completed a detailed study of
its insurance product lines, including products currently being marketed
as well as those previously sold by the Company's subsidiaries (including
recently acquired companies). This study identified several specific
products, marketing programs, underwriting and service methods that were
inconsistent with the Company's current strategies and profit objectives.
Based on this analysis, the Company took a $26.9 million after-tax charge,
which principally represents the write-off of deferred acquisition costs
where recovery is no longer assured due to actual experience on these
products being worse than originally assumed. In addition to the
product-related charges, the Company wrote off previously deferred costs
associated with acquiring and modifying an administrative system for the
Company's pre-need business. With the realignment previously mentioned, a
decision was made to move to a new administrative platform for pre-need.
All of the charges represent non-cash items, and will have no material
impact on the insurance companies' statutory financial condition.
3. COMMITMENTS AND CONTINGENCIES
At September 30, 1996, the Company had made commitments as shown below:
(In 000's)
<TABLE>
<S> <C>
Investment real estate $ 2,241
Mortgage loans and bonds 39,630
Other 10,746
-------
$52,617
=======
</TABLE>
5
<PAGE> 6
PART I, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Unaudited)
OPERATIONS
For the third quarter of 1996, the Company reported a consolidated net loss of
$10.8 million, compared with net income of $15.2 million for the same period
during 1995 (see table below). This $26.0 million decrease includes a
non-recurring after-tax charge of $26.9 million. During the third quarter, and
concurrent with a realignment of the Company's management structure, the
Company completed a detailed study of its insurance product lines, including
products currently being marketed as well as those previously sold by the
Company's subsidiaries (including recently acquired companies). This study
identified several specific products, marketing programs, underwriting and
service methods that were inconsistent with the Company's current strategies
and profit objectives. Based on this analysis, the Company took a $26.9
million charge, which principally represents the write-off of deferred
acquisition costs where recovery is no longer assured due to actual experience
on these products being worse than originally assumed. In addition to the
product-related charges, the Company wrote off previously deferred costs
associated with acquiring and modifying an administrative system for the
Company's pre-need business. With the realignment previously mentioned, a
decision has been made to move to a new administrative platform for pre-need.
All of the charges represent non-cash items, and will have no material impact
on the insurance companies' statutory financial condition. In the accompanying
financial statements, the effects of the special charges are reported in
general insurance expenses and amortization of deferred acquisition costs on
the income statement, and deferred acquistion costs and other assets on the
balance sheet. Excluding the special charges, the Company would have reported
net income of $16.1 million, an increase of 6% over the prior year.
Operating earnings of $17.0 million (which exclude the special charges and net
realized investment gains and losses) increased $1.8 million (11%) over 1995's
third quarter. Net income reflects the $26.9 million special charge and
realized investment losses (after-tax) of $.9 million and $.1 million in the
third quarter of 1996 and 1995, respectively.
Year-to-date net income of $19.5 million decreased 53% from the comparable 1995
period as a result of the special charges. Excluding the special charges, net
income would have increased $5.3 million (13%). Operating earnings increased
$4.0 million (9%) over the same period of 1995. Net income includes realized
investment losses (after tax) of $.6 million for the first nine months of 1996
compared to realized investment losses of $1.9 million for the 1995 period.
The remainder of the discussion will exclude the impact of the special charges.
<TABLE>
<CAPTION>
Third Quarter Year-to-date
------------------- -------------------
1996 1995 1996 1995
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Income Before Income Taxes and Special Charges $ 24,412 $ 23,622 $ 69,537 $ 62,548
Income Taxes 8,288 8,404 23,058 21,387
-------- -------- -------- --------
Income Before Special Charges 16,124 15,218 46,479 41,161
Special Charges (40,643) --- (40,643) ---
Income Tax Benefit from Special Charges (13,699) --- (13,699) ---
-------- -------- -------- --------
Net Income $(10,820) $ 15,218 $ 19,535 $ 41,161
======== ======== ======== ========
</TABLE>
Excluding realized gains and losses, over the comparable prior year quarter the
Company's insurance operations reported a decrease in pre-tax income of $.2
million, broadcasting had an increase in pre-tax income of $2.6 million, and
the Parent Company had an increased pre-tax loss of $.3 million.
Liberty Life reported a decrease in pre-tax earnings of $.4 million, as strong
sales of an accidental death product in the mortgage protection division and
favorable mortality were offset by higher amortization of deferred acquisition
costs resulting from higher lapses. The FamilySide pre-need business reported
a $.1 million increase in pretax earnings from the prior year, as, similar to
Liberty Life, favorable mortality was offset by higher lapses. Also,
FamilySide continues to be impacted by lower sales since the rollout of the new
product portfolio in late 1995.
6
<PAGE> 7
The Liberty Corporation and Subsidiaries
Management's Discussion and Analysis of Operations September 30, 1996
The broadcasting operations reported pretax earnings of $8.5 million versus
$5.9 million in 1995. Cosmos earnings benefited from the Olympics and strong
political revenues. Local revenues increased 25% over the comparable prior
year quarter.
The parent company reported a $.3 million higher pre-tax loss compared with the
third quarter of 1995, as higher operating expenses and lower lot and land
sales were partially offset by increased rental income from a lease termination
payment. Interest expense remained relatively level with the prior year period
as a higher debt balance was offset by lower interest rates.
Consolidated revenues increased $1.9 million (1%) over the prior year third
quarter due to a $5.4 million (18%) increase in broadcasting revenues; a $4.6
million decrease in revenues from the insurance operations, due to (1) lower
premiums from FamilySide, (2) a $1.8 million negative fluctuation in realized
gains and losses, and (3) a $3.6 million decrease in service revenues as the
operations of Liberty Insurance Services are being reported on an equity basis
in 1996; and a $1.1 million increase in the parent company, primarily due to
the lease termination payment previously discussed. Excluding the impact of
realized investment gains and losses, consolidated revenues increased $3.2
million (2%).
Through the first nine months of 1996, insurance premiums and policy charges
decreased $13.8 million (5%) from the prior year due to the continuing lower
sales in the FamilySide preneed business. The quarterly comparison included
$7.2 million less premiums in FamilySide, offset by an increase of $6.2 million
in Liberty Life, primarily due to strong sales of an accidental death product
in the mortgage protection marketing arm.
The increase in broadcasting revenues for the quarter was driven by a local
revenue increase of $4.0 million due to the strong advertising demand during
the Olympics, and a $1.0 million increases in political revenues. The
year-to-date increase was partially due to WLOX contributing nine months of
revenues in 1996, compared to only seven months in 1995.
The $2.2 million (16%) increase in commissions is primarily related to the
growth of the Company's accidental death product group. A substantial amount
of this line of business is marketed through a third party marketer. All
payments to this third party, which include commissions and certain payments
for certain general and administrative functions, are reported as commissions
expense. The year-to-date variance is also due to the reporting of the
payments to this third party marketer.
Deferred acquisition cost amortization increased over the third quarter of 1995
by $2.3 million, due to higher lapses in both Liberty Life and FamilySide.
Year-to-date broadcasting expenses were up 13% due to the additional expenses
associated with the WLOX-TV operation for two additional months during 1996
compared to 1995.
Other expenses decreased for the nine months compared to the prior year due to
a one-time non-recurring adjustment of $2.4 million related to reducing
previously accrued expenses due to a technical change in how vacation benefits
are earned.
INVESTMENTS
As of September 30, 1996, approximately 62% of the Company's $2.0 billion
consolidated invested assets were in bonds with an overall average credit
rating of AA-. Approximately 3.4% of the bond portfolio was rated below
investment grade.
Approximately 47% of the Company's $1.4 billion bond portfolio at September 30,
1996, was comprised of mortgage-backed securities, compared with 56% at
December 31, 1995. Certain mortgage-backed securities are subject to
significant prepayment or extension risk due to changes in interest rates. In
periods of declining interest rates, mortgages may be repaid more rapidly than
7
<PAGE> 8
The Liberty Corporation and Subsidiaries
Management's Discussion and Analysis of Operations September 30, 1996
scheduled as borrowers refinance higher rate mortgages to take advantage of the
lower current rates. As a result, holders of mortgage-backed securities may
receive large prepayments on their investments which cannot be reinvested at
interest rates comparable to the rates on the prepaid mortgages. In a rising
interest rate environment refinancings are significantly curtailed and the
payments to the holders of the securities decline, limiting the ability of the
holder to reinvest at the higher interest rates. Mortgage-backed pass-through
securities and sequential collateralized mortgage obligations ("CMO's"), which
comprised 17% of the book value of the Company's mortgage-backed securities at
September 30, 1996, and 20% at December 31, 1995, are sensitive to prepayment
or extension risk. The remaining 83% of the Company's mortgage-backed
investment portfolio at September 30, 1996, consisted of planned amortization
class ("PAC") instruments compared to approximately 80% at December 31, 1995.
These investments are designed to amortize in a more predictable manner by
shifting the primary prepayment and extension risk of the underlying collateral
to investors in other tranches of the CMO.
Mortgage loans of $227.5 million comprised 11% of the consolidated investment
portfolio at September 30, 1996. Substantially all of these mortgage loans are
commercial mortgages with a loan to value ratio not exceeding 75% when made.
These loans are concentrated in the southeast primarily in the states of North
Carolina, South Carolina, Georgia, Florida, Virginia, Louisiana and Tennessee.
Investment real estate at September 30, 1996, of $140.4 million comprised 7% of
the consolidated investment portfolio, the same percentage as at December 31,
1995. Three key property types make up the bulk of the Company's real estate
investment assets: residential land development, business parks, and business
property rentals. The majority of the Company's investment real estate is
located in South Carolina, Florida, Georgia, and North Carolina.
FINANCIAL POSITION
In accordance with the provisions of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", the Company reported an unrealized
gain of $26.9 million on fixed maturity securities available for sale and
equity securities as of September 30, 1996. This compares with an unrealized
gain of $58.0 million at December 31, 1995. The decrease is due to the
negative impact on the market value of the portfolio associated with rising
interest rates during the first nine months of 1996.
CAPITAL, FINANCING AND LIQUIDITY
The Company's net cash flow from operating activities was $55.1 million for the
first nine months of 1996 compared to $67.9 million for the same period of
1995. The Company's net cash used in investing activities was $81.4 million,
and cash flow provided from financing activities was $18.6 million. As a
result of its activities, the Company had a $7.8 million decrease in cash
compared to a decrease of $3.8 million in the same period in 1995.
At September 30, 1996, the Company's borrowings and notes payable amounted to
$263.4 million, an increase from the $258.4 million outstanding at December 31,
1995. The increase was primarily a function of borrowings used to meet working
capital requirements in the parent company during the first nine months of the
year.
The Company uses various interest rate swaps and caps to help minimize the
impact of a potential significant rise in short term interest rates. (See the
Company's 1995 Annual Report to Shareholders for a description of the interest
rate swaps and caps in place.) The Company has not used interest rate swaps or
any other derivative financial instruments to manage its interest rate exposure
on interest sensitive universal-life type products.
Other Company commitments are shown in Note 3 contained in the accompanying
financial statements. Additional detail as to commitments and financing is
contained in the Notes to the Consolidated Financial Statements in the
Company's annual report on Form 10K for the year ended December 31, 1995.
8
<PAGE> 9
The Liberty Corporation and Subsidiaries
Management's Discussion and Analysis of Operations September 30, 1996
Further discussion of investments and valuation is contained in Notes 1 and 2
to the Consolidated Financial Statements in the Company's annual report on Form
10K for the year ended December 31, 1995.
ACCOUNTING DEVELOPMENTS
The Company adopted Statement of Financial Accounting Standard No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" ("SFAS No. 121"), on January 1, 1996. The results of
adoption did not have a material effect on the net income or financial position
of the Company. For additional information, see Note 2 to the Consolidated and
Condensed Financial Statements in the Company's first quarter report on Form
10-Q.
The Company adopted Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123"), on January 1, 1996.
For additional information, see Note 3 to the Consolidated and Condensed
Financial Statements in the Company's first quarter report on Form 10-Q.
9
<PAGE> 10
PART II, ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) A list of the exhibits filed with this report is included in the
Index to Exhibits filed herewith.
(b) The filing of Form 8-K was not required during the third quarter of
1996.
INDEX TO EXHIBITS
EXHIBIT 11 Consolidated Earnings Per Share Computation
EXHIBIT 27 Financial Data Schedule (Electronic Filing Only)
10
<PAGE> 11
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: November 15, 1996
- -----------------------
(Registrant)
/s/ H. Ray Eanes
- ----------------
H. Ray Eanes
Senior Vice President Finance & Treasurer
/s/ John P. Smith
- -----------------
John P. Smith
Corporate Controller
11
<PAGE> 1
EXHIBIT 11
THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED EARNINGS PER SHARE COMPUTATION
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30,
-------------------------- --------------------------
1996 1995 1996 1995
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(Unaudited)
PRIMARY SHARES
Common shares outstanding - end of period 20,186,351 20,025,013 20,186,351 20,025,013
Weighted average common shares
outstanding 20,183,661 19,999,651 20,134,707 19,922,201
Weighted average common stock options
outstanding 144,040 140,654 145,726 106,785
Preferred stock considered a common
stock equivalent 599,985 599,985 599,985 468,877
------------ ----------- ----------- -----------
Total primary shares 20,927,686 20,740,290 20,880,418 20,497,863
============ =========== =========== ===========
FULLY DILUTED SHARES
Weighted average common shares
outstanding 20,183,661 19,999,651 20,134,707 19,922,201
Weighted average common stock options
outstanding 171,368 170,159 154,854 125,405
Preferred stock considered a common
stock equivalent 599,985 599,985 599,985 468,877
Assumed conversion of redeemable
preferred stock not considered a common
stock equivalent 1,262,033 1,264,692 1,261,782 1,265,516
------------ ----------- ----------- -----------
Total fully diluted shares 22,217,047 22,034,487 22,151,328 21,781,999
============ =========== =========== ===========
NET INCOME $(10,820,000) $15,218,000 $19,535,000 $41,161,000
Preferred stock dividends on redeemable
preferred stock $ 663,000 $ 665,000 $ 1,989,000 $ 1,995,000
------------ ----------- ----------- -----------
Net income available to common shares $(11,483,000) $14,553,000 $17,546,000 $39,166,000
============ =========== =========== ===========
Primary earnings per share (net income
available to common shares divided by
total primary shares) $ (0.55) $ 0.70 $ 0.84 $ 1.91
============ =========== =========== ===========
Fully diluted earnings per share (net
income divided by total fully diluted
shares) $ (0.49) $ 0.69 $ 0.88 $ 1.89
============ =========== =========== ===========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LIBERTY TRANSPORTION FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<DEBT-HELD-FOR-SALE> 1,478,573
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 79,562
<MORTGAGE> 227,469
<REAL-ESTATE> 140,368
<TOTAL-INVEST> 2,047,508
<CASH> 35,979
<RECOVER-REINSURE> 254,505
<DEFERRED-ACQUISITION> 333,801
<TOTAL-ASSETS> 3,009,428
<POLICY-LOSSES> 1,839,566
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 3,812
<POLICY-HOLDER-FUNDS> 29,179
<NOTES-PAYABLE> 263,421
45,656
20,999
<COMMON> 162,553
<OTHER-SE> 369,505
<TOTAL-LIABILITY-AND-EQUITY> 3,009,428
238,221
<INVESTMENT-INCOME> 114,360
<INVESTMENT-GAINS> (1,183)
<OTHER-INCOME> 99,029
<BENEFITS> 163,338
<UNDERWRITING-AMORTIZATION> 61,104
<UNDERWRITING-OTHER> 101,460
<INCOME-PRETAX> 28,894
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