SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 13, 1997
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THE LIBERTY CORPORATION
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(Exact Name of Registrant as Specified in Charter)
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<S> <C> <C>
South Carolina 1-5846 57-0507055
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(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
2000 Wade Hampton Boulevard; Greenville, South Carolina 29602
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(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (864) 609-8256
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(Former Name or Former Address, if Changed Since Last Report)
The Liberty Corporation hereby amends its Current Report on
Form 8-K dated November 25, 1997 to amend and restate the "Pro Forma Condensed
Financial Statements" filed as Exhibit 99.1 to this report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Exhibits.
Exhibit 10.1 Stock Purchase Agreement by and among Fortis, Inc.,
Interfinancial Inc., The Liberty Corporation, Liberty
Life Insurance Company, and The Liberty Marketing
Corporation.(*)
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(*) Previously filed.
Exhibit 99.1 Pro Forma Condensed Financial Statements of The Liberty
Corporation and Subsidiaries
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: February 11, 1998
THE LIBERTY CORPORATION
By: /s/ Martha G. Williams
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Martha G. Williams
Vice President, General Counsel
and Secretary
By: /s/ Kenneth W. Jones
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Kenneth W. Jones
Corporate Controller
INDEX TO EXHIBITS
Exhibit
Number Designation
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10.1 Stock Purchase Agreement by and among Fortis, Inc., Interfinancial
Inc., The Liberty Corporation, Liberty Life Insurance Company, and
The Liberty Marketing Corporation. (1)
99.1 Pro Forma Condensed Financial Statements of The Liberty Corporation
and Subsidiaries.
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(1) Previously filed.
Exhibit 99.1
THE LIBERTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED FINANCIAL STATEMENTS
OF THE LIBERTY CORPORATION AND SUBSIDIARIES
The following unaudited pro forma condensed statements of income for the nine
months ended September 30, 1997 and the year ended December 31, 1996, and the
unaudited pro forma condensed balance sheet as of September 30, 1997 give
effect to the stock purchase transaction whereby Pierce National Life
Insurance Company will be sold to Fortis, Inc. The condensed statements of
income were prepared assuming the sale occurred January 1, 1996, and the
condensed balance sheet was prepared assuming the sale occurred September 30,
1997.
The unaudited pro forma condensed financial statements presented do not
purport to represent what the results of operations or financial condition
would actually have been if the pro forma adjustments had occurred on the dates
referred to above or to be indicative of the future results of operations or
financial position of The Liberty Corporation. The pro forma adjustments are
based on available information and certain assumptions the Registrant believes
are reasonable. The pro forma condensed financial statements should be read
in conjunction with the audited financial statements and notes thereto as
included in The Liberty Corporation 1996 Annual Report on Form 10-K.
THE LIBERTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
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(a)
Sale of Other
1997 Pierce Pro Forma 1997
As Reported National Adjustments Pro Forma
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(In 000's, except per share data)
(Unaudited)
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Revenues
Insurance premiums and policy charges......... $263,807 (79,744) $184,063
Broadcasting revenues......................... 100,753 100,753
Net investment income......................... 118,454 (41,658) 2,071 (b) 78,867
Service contract revenues..................... 5,302 7,500 (c) 12,802
Realized investment gains..................... 8,739 2,353 11,092
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Total Revenues............................. 497,055 (119,049) 9,571 387,577
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Expenses
Policyholder benefits......................... 172,293 (74,978) 97,315
Insurance commissions......................... 59,262 (7,679) 51,583
General insurance expenses.................... 50,584 (13,173) 7,950 (c)(f) 45,361
Amortization of deferred acquisition costs.... 33,105 (8,001) 25,104
Broadcasting expenses......................... 70,282 70,282
Interest expense.............................. 10,093 (5,542) (d) 4,551
Other expenses................................ 14,470 14,470
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410,089 (103,831) 2,408 308,666
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Total Expenses.............................
Income before income taxes.................... 86,966 (15,218) 7,163 78,911
Provision for income taxes.................... 30,472 (5,030) 2,087 (e) 27,529
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Net Income.................................... $ 56,494 (10,188) 5,076 $51,382
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Preferred Dividends........................... $ 1,976 $ 1,976
Net Income Available to Common Shares......... $ 54,518 $49,406
Weighted Average Common Shares................ 21,130 21,130
Earnings Per Common Share..................... $ 2.58 $ 2.34
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See notes to condensed pro forma income statement.
THE LIBERTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1996
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(a)
Sale of Other
1996 Pierce Pro Forma 1996
As Reported National Adjustments Pro Forma
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(In 000's, except per share data)
(Unaudited)
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Revenues
Insurance premiums and policy charges........ $321,371 (104,653) $216,718
Broadcasting revenues........................ 137,336 137,336
Net investment income........................ 155,221 (52,176) 2,761 (b) 105,806
Service contract revenues.................... 7,751 10,000 (c) 17,751
Realized investment gains.................... (2,582) (672) (3,254)
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Total Revenues............................ 619,097 (157,501) 12,761 474,357
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Expenses
Policyholder benefits........................ 218,751 (95,788) 122,963
Insurance commissions........................ 66,483 (11,931) 54,552
General insurance expenses................... 73,790 (21,465) 10,600 (c)(f) 62,925
Amortization of deferred acquisition costs... 73,967 (13,029) 60,938
Broadcasting expenses........................ 94,867 94,867
Interest expense............................. 15,139 (7,390) (d) 7,749
Other expenses............................... 19,601 19,601
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Total Expenses............................ 562,598 (142,213) 3,210 423,595
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Income before income taxes................... 56,499 (15,288) 9,551 50,762
Provision for income taxes................... 19,159 (5,643) 2,783 (e) 16,299
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Net Income................................... $ 37,340 (9,645) 6,768 $34,463
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Preferred Dividends.......................... $ 2,652 $2,652
Net Income Available to Common Shares........ $ 34,688 $31,811
Weighted Average Common Shares............... 20,903 20,903
Earnings Per Common Share.................... $ 1.66 $ 1.52
See notes to condensed pro forma income statement.
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THE LIBERTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED INCOME STATEMENTS
(a) The pro forma condensed income statement reflects, for the periods
presented, the exclusion of the actual reported amounts for Pierce
National Life Insurance Company.
(b) The pro forma condensed income statement reflects, for the periods
presented, the earnings, net of investment expenses, on assets currently
owned by Pierce that will be acquired by The Liberty Corporation, or its
subsidiaries, prior to the sale of Pierce. The adjustment assumes
approximately $87 million of assets owned by Pierce are to be acquired by
the Company, or its subsidiaries, prior to closing. Approximately $39
million of the assets to be retained are expected to be purchased from
Pierce by Liberty Life Insurance Company ("Liberty Life"), a wholly-
owned subsidiary of the Registrant. Funds for the assets to be
purchased by Liberty Life are expected to come from a combination of
cash and proceeds from sales of other securities currently held by
Liberty Life earning a comparable yield to the assets being purchased.
The remaining $48 million of assets to be purchased from Pierce will
initially be acquired by the Registrant and, for the purposes of the
pro forma financial information, the value of the assets to be acquired
are assumed to reduce the proceeds from the sale of Pierce that will be
available to repay debt.
(c) The pro forma condensed income statement reflects, for the periods
presented, the revenues and expenses associated with the five year
service contract between Liberty Insurance Services Corporation and
Fortis, Inc., whereby Liberty Insurance Services Corporation will
provide administrative services for Pierce and United Family Life
Insurance Company (a subsidiary of Fortis, Inc.).
(d) The pro forma condensed income statement reflects, for the periods
presented, the interest savings resulting from the reduction in bank debt
using the net proceeds from the sale of Pierce National.
(e) The pro forma condensed income statement reflects, for the periods
presented, the tax effects of the adjustments made using a 35%
effective tax rate. Additionally, the pro forma income statement
assumes a tax credit of approximately $.5 million associated with
certain investments that will be retained by Liberty Corporation as
described in footnote (b) above.
(f) The pro forma condensed income statement reflects, for the periods
presented, an estimate of the expenses that will remain in the Company
subsequent to the sale of Pierce, that previously had been absorbed by
Pierce. Actual future expenses may be higher or lower than those
reflected in the pro forma income statements.
THE LIBERTY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
September 30, 1997
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As (a) Pro
Reported Sale Assets Forma
9/30/97 Transaction Retained 9/30/97
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(In 000's)
(Unaudited)
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Investments
Fixed Maturity Securities-available for sale.. $1,637,923 (711,472) 25,799 (c) $ 952,250
Equity Securities............................. 75,563 (2,479) 73,084
Mortgage Loans................................ 237,464 (47,456) 35,891 (c) 225,899
Investment in Real Estate..................... 54,208 (1,497) 245 (c) 52,956
Loans to Policyholders........................ 100,590 (8,671) 91,919
Other Long Term Investments................... 22,738 (5,895) 5,893 (c) 22,736
Short Term Investments........................ 250 250
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Total Investments............................ 2,128,736 (777,470) 67,828 1,419,094
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Cash.......................................... 36,852 (5,916) (20,000) 10,936
Accrued Investment Income..................... 21,527 (8,389) 13,138
Receivables................................... 62,867 (4,958) 57,909
Receivable from Reinsurers.................... 280,113 (236) 279,877
Deferred Acquisition Costs.................... 337,950 (56,514) 281,436
Buildings & Equipment......................... 74,742 74,742
Intangibles Related to Television Operations.. 91,055 91,055
Goodwill related to Insurance Acquisitions.... 34,381 (10,308) 24,073
Other Assets.................................. 49,576 (1,520) 48,056
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TOTAL ASSETS................................. $3,117,799 (865,311) 47,828 $2,300,316
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Liabilities
Policy Liabilities............................ 1,949,813 (623,788) 1,326,025
Notes Mortgages & Other Debt.................. 199,914 (170,980) (b) 47,828 (c) 76,762
Accrued Income Taxes.......................... 2,671 2,194 4,865
Deferred Income Taxes......................... 171,557 (36,140) 135,417
Accounts Payable & Accrued Expenses........... 103,030 609 103,639
Other Liabilities............................. 3,834 3,834
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TOTAL LIABILITIES............................ 2,430,819 (828,105) 47,828 1,650,542
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Redeemable Preferred Stock.................... 44,688 44,688
Convertible Preferred Stock................... 20,999 20,999
Common Stock.................................. 20,504 20,504
Capital in Excess of Par...................... 154,717 154,717
Unearned Stock Compensation................... (11,921) (11,921)
Net Unrealized Investment Gains .............. 51,220 (20,513) 30,707
Cumulative Foreign Currency Translation
Adjustment................................... 826 (826) 0
Retained Earnings............................. 405,947 (15,867) 390,080
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TOTAL SHAREHOLDERS EQUITY ................... 642,292 (37,206) 0 605,086
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PREFERRED STOCK AND
TOTAL LIABILITIES, REDEEMABLE
SHAREHOLDERS EQUITY.......................... $3,117,799 (865,311) 47,828 $2,300,316
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See notes to pro forma condensed balance sheet.
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THE LIBERTY CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED BALANCE SHEET
(a) The pro forma condensed balance sheet reflects the effect of the sale of
Pierce on the consolidated assets and liabilities of The Liberty
Corporation. Additionally, the effect on consolidated equity related
to net unrealized investment gains associated with fixed maturity and
equity securities and the cumulative foreign currency translation
adjustment are reported as an adjustment to consolidated equity.
(b) The pro forma condensed balance sheet assumes the repayment of debt using
the proceeds (net of assets to be acquired, expenses and income taxes
related to the sale) from the sale of Pierce.
(c) The pro forma condensed balance sheet reflects the purchase of
approximately $87 million of assets currently owned by Pierce.
Approximately $48 million of assets will initially be acquired by the
Registrant. The remainder will be purchased by Liberty Life Insurance
Company (a wholly-owned subsidiary of the Registrant) using a combination
of cash and proceeds from sales of other securities earning a comparable
yield to the assets being purchased.
