SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8K
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 1, 2000
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The Liberty Corporation
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(Exact name of Registrant as Specified in Charter)
South Carolina 1-5846 57-0507055
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
2000 Wade Hampton Boulevard, Greenville, SC 29615
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (864) 609-8256
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n/a
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On June 19, 2000, The Liberty Corporation ("Liberty") entered into a
Purchase Agreement (the "Purchase Agreement") with Royal Bank of Canada
("RBC"), a Canadian-chartered bank, pursuant to which RBC was to acquire from
Liberty all of the issued and outstanding shares of capital stock of Liberty
Life Insurance Company, Liberty Insurance Services Corporation, The Liberty
Marketing Corporation, LC Insurance Limited and Liberty Capital Advisors, Inc.,
for a total of approximately $648 million, consisting of a dividend from
Liberty Life Insurance Company of up to $70.0 million and the balance in cash
from RBC. On September 29, 2000, the shareholders of the Company approved the
Purchase Agreement. The transaction closed on November 1, 2000, with Liberty
receiving $631 million in net cash proceeds and approximately $16 million in
non-cash assets.
The total value of the consideration paid for Liberty's insurance
operations was determined based on arm's length negotiations between Liberty and
RBC which took into account a wide variety of factors including, but not
limited to, an opinion delivered by Goldman, Sachs & Co., Liberty's financial
advisor, as to the fairness of the transaction from a financial point of view.
There are no material relationships between RBC and Liberty or any of its
affiliates, any director or officer of Liberty, or any associate of such
director or officer.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
Not applicable.
(b) Pro Forma Financial Information.
(i) The Liberty Corporation Pro Forma Combined Condensed
Statement of Income For the Nine Months Ended
September 30, 2000
(ii) The Liberty Corporation Pro Forma Combined Condensed
Statement of Income For the Year Ended December 31,
1999
(iii) The Liberty Corporation Pro Forma Combined Condensed
Balance Sheet As of September 30, 2000
(c) Exhibits.
Exhibits Description
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2.1* Purchase Agreement, dated as of June 19, 2000, between The
Liberty Corporation and Royal Bank of Canada
9.1 * Voting Agreement, dated as of June 30, 2000, entered into by
W. Hayne Hipp and Royal Bank of Canada
9.2 * Form of Voting Agreement, dated as of June 30, 2000, entered
into by certain shareholders of the Liberty Corporation and
Royal Bank of Canada
99.1* Press Release, dated as of June 19, 2000, of The Liberty
Corporation
99.2** Press Release, dated as of November 1, 2000, of The Liberty
Corporation
* Filed as part of the Registrant's current Report on Form 8-K dated
June 30, 2000 and incorporated herein by reference.
** Filed as part of the Registrant's current Report on Form 8-K dated
November 1, 2000 and incorporated herein by reference.
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<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed balance sheet ("pro
forma balance sheet") as of September 30, 2000, and the unaudited pro forma
combined condensed statements of income for the year ended December 31, 1999
and for the nine months ended September 30, 2000 ("pro forma income
statements") give effect individually and in the aggregate to the sale of
Liberty's insurance operations to the Royal Bank of Canada (the "transaction").
The pro forma balance sheet as of September 30, 2000 presents the financial
position of Liberty as if the transaction had occurred on that date. The pro
forma income statements have been prepared assuming the transaction occurred as
of the beginning of each period presented.
The pro forma combined condensed financial statements, which have been
prepared in accordance with the rules prescribed by Article 11 of Regulation
S-X, are provided for informational purposes only and should not be construed
as being indicative of Liberty's results of operations or financial position
had the transaction been consummated on the dates assumed. These pro forma
combined condensed financial statements also do not project the results of
operation or financial position for any future period or date. Assumptions were
used in the preparation of the pro forma combined condensed financial
statements and the pro forma results would differ had alternative assumptions
been used. Additionally, the unaudited pro forma combined condensed financial
statements have been prepared based on estimates of the taxable gain, and taxes
payable, from the transaction. The actual results may change as additional
facts become known.
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<PAGE>
The Liberty Corporation
Pro Forma Combined Condensed Statement of Income
For the nine months ended September 30, 2000
(in thousands except per share amounts)
<TABLE>
Pro Forma
Adjustments
Historical for
Results of Insurance
Operations Operations Pro Forma
9/30/00 Sale 9/30/00
---------- ----------- --------
<S> <C> <C> <C>
Broadcasting revenues (net of agency commissions) $114,737 $114,737
Cable and other revenues 9,539 9,539
-------- -------- --------
Total revenues 124,276 -- 124,276
Station operating expenses 68,166 68,166
Amortization of program rights 4,792 4,792
Depreciation and amortization 14,864 14,864
Corporate general and administrative expenses 8,025 8,025
-------- -------- --------
Total operating expense 95,847 -- 95,847
Operating income 28,429 28,429
Net investment income 12,016 12,016
Interest expense 12,705 $(12,705) (a) --
-------- -------- --------
Income before income taxes 27,740 12,705 40,445
Income taxes 11,448 5,082 (b) 16,530
-------- -------- --------
Income from continuing operations 16,292 7,623 23,915
Income from discontinued operations 26,061 (26,061) (c) --
-------- -------- --------
Net income $ 42,353 $(18,438) $ 23,915
======== ======== ========
Basic earnings per common share $2.18 $1.22
Diluted earnings per common share $2.15 $1.21
Denominator for basic earnings per share 19,281 19,281
Denominator for diluted earnings per share 19,721 19,721
</TABLE>
(a) Elimination of interest expense, as the Company's debt would have been
repaid in full from the cash proceeds from the sale of its insurance
operations.
(b) Record adjustment to income taxes related to tax effect of pro forma
adjustments to earnings at the Company's assumed combined effective
federal and state income tax rate of 40%.
(c) Elimination of income from discontinued insurance operations.
The pro forma information above assumes repayment of the Company's revolving
credit facility, as required under its terms. However, it does not include and
adjustments to reflect the effects on income or earnings per share from the use
of the remaining net cash proceeds from the sale of the Company's insurance
operations.
5
<PAGE>
The Liberty Corporation
Pro Forma Combined Condensed Statement of Income
For the Year ended December 31, 1999
(in thousands except per share amounts)
<TABLE>
Pro Forma
Adjustments
Historical for
Results of Insurance
Operations Operations Pro Forma
12/31/99 Sale 2/31/99
---------- ------------ ---------
<S> <C> <C> <C>
Broadcasting revenues (net of agency commissions) $139,278 $139,278
Cable and other revenues 9,167 9,167
-------- -------- --------
Total revenues 148,445 -- 148,445
Station operating expenses 74,834 74,834
Amortization of program rights 5,855 5,855
Depreciation and amortization 16,770 16,770
Corporate general and administrative expenses 8,200 8,200
-------- -------- --------
Total operating expense 105,659 -- 105,659
Operating income 42,786 -- 42,786
Net investment income 2,663 2,663
Interest expense 15,085 $(15,085) (a) --
-------- -------- --------
Income before income taxes 30,364 (15,085) 45,449
Income taxes 11,592 6,034 (b) 17,626
-------- -------- --------
Income from continuing operations 18,772 (9,051) 27,823
Income from discontinued operations 25,797 (25,797) (c) --
-------- -------- --------
Net income $ 44,569 $(16,746) $ 27,823
======== ======== ========
Basic earnings per common share $2.29 $1.40
Diluted earnings per common share $2.26 $1.40
Denominator for basic earnings per share 18,960 18,960
Denominator for diluted earnings per share 19,352 19,896
</TABLE>
(a) Elimination of interest expense, as the Company's debt would have been
repaid in full from the cash proceeds from the sale of its insurance
operations.
(b) Record adjustment to income taxes related to tax effect of pro forma
adjustments to earnings at the Company's assumed combined effective
federal and state income tax rate of 40%.
(c) Elimination of income from discontinued insurance operations.
The pro forma information above assumes repayment of the Company's revolving
credit facility, as required under its terms. However, it does not include and
adjustments to reflect the effects on income or earnings per share from the use
of the remaining net cash proceeds from the sale of the Company's insurance
operations.
6
<PAGE>
The Liberty Corporation
Pro Forma Combined Condensed Balance Sheet
As of September 30, 2000
(Amounts in 000's)
<TABLE>
Pro Forma
Adjustments
As for
Reported Insurance Pro Forma
09/30/00 Operations Sale 09/30/00
-------- --------------- ---------
<S> <C> <C> <C>
Current assets:
Cash 3,640 631,875 (a)
(258,000) (c) 377,515
Receivables 32,301 32,301
Program rights 5,831 5,831
Prepaid and other current assets 4,966 4,966
Deferred income taxes 3,498 3,498
Current assets of discontinued operations 490,275 (490,275) (b) --
-------- -------- --------
Total current assets 540,511 (116,400) 424,111
Net property and equipment 71,497 71,497
Intangibles net of amortization 261,574 261,574
Other assets 43,614 16,194 (a) 59,808
-------- -------- --------
Total assets 917,196 (100,206) 816,990
Current liabilities:
Accounts payable and accrued expenses 20,548 25,334 (a) 45,882
Program contract obligation 5,602 5,602
Accrued income taxes 9,853 122,460 (a) 132,313
Revolving credit facility 258,000 (258,000) (c) --
-------- -------- --------
Total current liabilities 294,003 (110,206) 183,797
Deferred income taxes 29,559 29,559
Other liabilities 12,391 12,391
-------- -------- --------
Total liabilities 335,953 (110,206) 225,747
Shareholders equity
Common stock 113,089 113,089
Unearned stock compensation (7,571) (7,571)
Retained earnings 474,879 10,000 (d) 484,879
Unrealized investment gains (losses) 846 846
-------- -------- --------
Total shareholders equity 581,243 10,000 591,243
Total liabilities and shareholders equity 917,196 (100,206) 816,990
</TABLE>
(a) Represents the net cash proceeds from the proposed sale. Consisting of
$648 million total sales price (comprised of cash of $632 million and
non-cash consideration of $16 million) less $148 million for income taxes
and estimated expenses related to the sale.
(b) Elimination of the net assets of the Company's insurance operations.
(c) Required repayment of the outstanding balance of the Company's revolving
credit facility.
(d) Reflects the estimated after-tax gain from the proposed sale.
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SIGNATURE
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 thereunto duly authorized.
THE LIBERTY CORPORATION
By: /s/ Martha G. Williams
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Name: Martha G. Williams
Title: Vice President, General Counsel
and Secretary
November 14, 2000
