<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 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)
Item 2. Acquisition or Disposition of Assets.
On December 1, 2000 The Liberty Corporation's broadcasting subsidiary, Cosmos
Broadcasting Corp., completed its previously announced acquisition of Civic
Communication for $204 million in cash. The Company used proceeds from the sale
of its insurance operations, which sale was completed November 1, 2000, to fund
the transaction.
The acquisition adds WLBT-TV, the NBC affiliate in Jackson, MS., KLTV-TV, the
ABC affiliate in Tyler, Tx., and KTRE-TV, the satellite affiliate of KLTV in
Lufkin, Tx., to the Cosmos station group. With the addition of the Civic
stations, Cosmos now owns fifteen network-affiliated television stations.
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
(1) Civic Communications Corporation II
Consolidated Financial Statements For the
Year Ended December 31, 1999 And Report of
Independent Auditors.
(2) Unaudited Condensed Consolidated Financial
Statements of Civic Communications
Corporation II for the Nine Months Ended
September 30, 2000.
(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.
2.1 Stock Purchase Agreement Dated As Of July 27, 2000
Among Civic Communications Corporation II Its Common
And Preferred Stockholders And Cosmos Broadcasting
Corporation
<PAGE> 3
CIVIC COMMUNICATIONS CORPORATION II
INDEPENDENT AUDITORS' REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 1999
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of Civic Communications Corporation II:
We have audited the accompanying consolidated balance sheet of Civic
Communications Corporation II and subsidiaries (the "Company") as of December
31, 1999, and the related consolidated statements of income, changes in
deficiency in assets and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Civic Communications Corporation II
and subsidiaries as of December 31, 1999, and the results of their operations
and their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Jackson, Mississippi
March 24, 2000, except for Note 9, the date
of which is December 1, 2000
<PAGE> 5
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
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ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,176,336
Accounts receivable, less allowance for doubtful accounts
of approximately $172,000 6,035,676
Refundable income taxes 1,180,207
Current portion of film contract rights 1,135,476
Prepaid expenses and other current assets 169,657
-----------
Total current assets 10,697,352
PROPERTY AND EQUIPMENT - net 4,337,419
INTANGIBLE ASSETS:
Broadcast and network rights - at cost, less accumulated
amortization of approximately $13,151,000 10,525,466
Excess of cost over net assets of business acquired, less
accumulated amortization of approximately $9,013,000 2,490,065
Other intangible assets - at cost, less accumulated amortization
of approximately $7,813,000 545,160
Debt issue costs less accumulated amortization of
approximately $1,470,000 1,468,586
Film contract rights, excluding current portion, less allowance
of approximately $80,000 2,764,083
-----------
17,793,360
-----------
NET DEFERRED TAX ASSET 2,922,803
ESTIMATED TOWER REPLACEMENT COST (Note 8) 3,733,867
OTHER ASSETS 164,382
TOTAL ASSETS $39,649,183
===========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
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LIABILITIES AND DEFICIENCY IN ASSETS
<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable $ 450,261
Accrued expenses and other current liabilities 1,446,005
Current portion of film contracts payable 1,170,023
Current portion of long-term debt 2,320,019
------------
Total current liabilities 5,386,308
OTHER LIABILITIES:
Long-term debt, excluding current portion 50,973,276
Non-voting convertible preferred dividends payable 6,000,000
Film contracts payable, excluding current portion 2,799,717
Deferred compensation liability 7,432,509
------------
67,205,502
COMMITMENTS AND CONTINGENCIES (Note 8)
DEFICIENCY IN ASSETS:
Non-voting convertible preferred stock, $1 par value and
stated value of $4,228 per share, authorized 5,912 shares;
issued and outstanding 5,911.98 shares 24,579,574
Common Stock:
Voting, $.01 par value; authorized 50,000 shares;
issued and outstanding 639.12 shares 6
Non-voting, $.01 par value; authorized 50,000 shares;
no shares issued
Additional paid-in capital (deficit) (15,163,912)
Retained earnings (deficit) (42,358,295)
------------
(32,942,627)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ 39,649,183
============
</TABLE>
<PAGE> 7
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999
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OPERATING REVENUE (net of agency commissions of
approximately $5,259,000 $ 29,683,094
OPERATING EXPENSES:
Salaries and other employee benefits 10,408,218
Programming cost 2,615,003
Facility expense 1,410,539
Other 2,083,675
------------
Total operating expenses 16,517,435
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OPERATING INCOME BEFORE DEPRECIATION,
AMORTIZATION AND ADMINISTRATIVE EXPENSES 13,165,659
DEPRECIATION AND AMORTIZATION EXPENSE 3,260,450
ADMINISTRATIVE EXPENSES 2,106,681
------------
NET OPERATING INCOME 7,798,528
NON-OPERATING EXPENSE (INCOME):
Interest and other income (110,844)
Interest expense 4,967,305
------------
Total non-operating expense 4,856,461
------------
INCOME BEFORE INCOME TAX BENEFIT 2,942,067
INCOME TAX BENEFIT (3,019,290)
------------
NET INCOME $ 5,961,357
============
See notes to consolidated financial statements.
<PAGE> 8
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN DEFICIENCY IN ASSETS
YEAR ENDED DECEMBER 31, 1999
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NON-VOTING CONVERTIBLE PREFERRED STOCK
Balance - Beginning of year $ 24,369,359
Amortization of stock issuance cost 210,215
------------
Balance - End of year $ 4,579,574
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COMMON STOCK - Voting
Balance - Beginning of year $ 6
------------
Balance - End of year 6
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ADDITIONAL PAID-IN CAPITAL (DEFICIT)
Balance - Beginning of year $(15,163,912)
------------
Balance - End of year $(15,163,912)
============
RETAINED EARNINGS (DEFICIT):
Balance - beginning of year $ 46,109,437)
Amortization of preferred stock issuance cost (210,215)
Preferred stock dividend accrued (2,000,000)
Net income 5,961,357
------------
Balance - End of year $(42,358,295)
============
See notes to consolidated financial statements.
<PAGE> 9
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,961,357
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,260,450
Deferred income tax benefit (410,482)
Amortization of film contract rights 1,350,255
Provision for losses on accounts receivable 113,000
Loss on sale of property and equipment 1,013
Provision for estimated loss on film contract rights (45,524)
Changes in operating assets and liabilities:
Increase in accounts receivable (150,736)
Decrease in insurance recoverable 728,784
Increase in prepaid expenses and other assets 1,293
Increase in income tax refundable (1,180,207)
Decrease in accounts payable, accrued expenses
and other current liabilities 311,527
Increase in income taxes payable (1,068,138)
-----------
Net cash provided by operating activities 8,872,592
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (910,029)
Other (100,000)
-----------
Net cash used in investing activities (1,010,029)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (6,348,375)
Principal payments on film contracts payable (1,213,178)
-----------
Net cash used in financing activities (7,561,553)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 301,010
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,875,326
-----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,176,336
===========
(Continued)
<PAGE> 10
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
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SUPPLEMENTAL CASH FLOW DISCLOSURES:
Non-cash activities:
Purchase of film contract rights and addition
of obligation $2,945,000
==========
Other assets acquired with long-term debt $ 100,000
==========
Interest paid $4,696,000
==========
Income taxes paid $ 800,000
==========
See notes to consolidated financial statements. (Concluded)
<PAGE> 11
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
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1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
BUSINESS - Civic Communications Corporation II (and its
subsidiaries collectively referred to as "the Company") owns all of the
outstanding capital stock of TV-3, Inc. ("TV-3"). Civic License Holding
Company, Inc., which is wholly owned by TV-3, owns licenses to operate
television stations in Mississippi and Texas. The license agreements to
operate the television stations are subject to periodic renewal. The
Company's ability to continue to operate these stations is subject to
these renewals.
a. PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary,
TV-3, Inc. and its wholly-owned subsidiary. All significant
intercompany transactions and balances have been eliminated.
b. USE OF ESTIMATES - The Company's consolidated financial statements
have been prepared in conformity with accounting principles
generally accepted in the United States of America. In preparing its
financial statements, the Company is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as
of the date of the balance sheet and the reported amounts of
revenues and expenses for the year then ended. Actual results could
differ significantly from those estimates.
c. PROPERTY AND EQUIPMENT AND DEPRECIATION - Property and equipment are
stated at cost. Costs of capitalized leased assets are stated at the
present value of the future minimum lease payments. Depreciation,
including amortization of capitalized leases, is computed by the
straight-line method over the estimated useful lives of the assets
which range from three to twenty years.
d. INTANGIBLE ASSETS - The cost of broadcast and network rights and the
excess of cost over net assets of businesses acquired are being
amortized by the straight-line method over twenty years.
Debt issue costs are being amortized over the life of the related
debt.
Other intangibles include the value of specifically identifiable
assets arising principally from business acquisitions. These
intangibles are being amortized principally by the straight-line
method over their estimated lives, which range from two to twenty
years.
e. FILM CONTRACT RIGHTS - Film contract rights, which represent a
contractual right to use program material, are carried at the lower
of unamortized cost or estimated net realizable value. These rights
are recorded as an asset and liability at their gross amount. The
asset is segregated on the balance sheet between current and
noncurrent based upon anticipated telecasts and the liability is
segregated between current and
<PAGE> 12
noncurrent based upon payment terms. The film contract rights are
being amortized over the contract period by an accelerated method
based on anticipated telecasts, which provides a matching of
anticipated revenue and related costs.
f. EMPLOYEE BENEFITS - The Company has a 401(k) profit sharing plan
which covers substantially all full-time employees. Employees are
permitted to contribute from one to ten percent of their gross
salaries. No employer matching contributions are required, although
employer contributions are permitted at the discretion of the Board
of Directors. Operating expenses include contributions of
approximately $249,000.
g. INCOME TAXES - The Company recognizes deferred tax assets and
liabilities based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse.
h. CASH EQUIVALENTS - The Company considers all highly liquid
investments with a maturity of three months or less when purchased
to be cash equivalents for purposes of the consolidated statement of
cash flows.
i. STOCK-BASED COMPENSATION - The Company elected to continue to
measure compensation cost for its management incentive plan using
the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees".
j. INTEREST RATE SWAP CONTRACTS - The Company uses interest rate swap
and rate cap contracts to reduce the Company's interest rate risk
exposure related to its outstanding long-term indebtedness. Amounts
to be paid or received under interest rate swap agreements are
accrued as interest rates change and are recognized over the life of
the swap agreements as an adjustment to interest expense. The fair
value of the swap agreements is not recognized in the consolidated
financial statements as they are accounted for as hedges. Gains and
losses resulting from early terminations are deferred and amortized
as an adjustment to the yield of the related debt over the remaining
life of the debt.
k. RECENT ACCOUNTING PRONOUNCEMENTS - In June 1998, the Financial
Accounting Standards Board issued Statement on Financial Accounting
Standards No. 133, as amended, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for fiscal
years beginning after June 15, 2000. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments imbedded in
other contracts, for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at
fair value. The Company has not completed the process of evaluating
the impact that will result from adopting SFAS No. 133, as amended.
<PAGE> 13
2. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
Land $ 305,870
Buildings and improvements 1,611,800
Technical equipment 15,194,670
Tower and antenna system 1,804,480
Office furniture and equipment 1,017,070
Automobiles 796,393
Assets under capital leases 582,972
------------
21,313,255
Less accumulated amortization and depreciation (16,975,836)
------------
$ 4,337,419
============
3. LONG-TERM DEBT
Long-term debt consisted of the following:
Senior secured reducing revolving line of credit $ 47,762,500
Term note 5,000,000
Capitalized leases 430,795
Other 100,000
------------
53,293,295
Less current portion of long-term debt (2,320,019)
------------
$ 50,973,276
============
TV-3, Inc. has a loan agreement which provides for borrowings
maturing on December 31, 2002 under a $65 million senior secured
reducing revolving line of credit and a $5 million term loan. The
revolving line of credit reduces quarterly in annual amounts ranging
from $3,000,000 to $7,500,000 through 2001 with the balance due in
2002. The term note is repayable in seven quarterly installments of
$250,000 commencing on March 31, 2001 with the balance due on December
31, 2002. The loans are collateralized by an assignment of life
insurance on the Company's chief executive officer and by the pledge
and assignment of substantially all of the assets of the Company and
its subsidiaries and all of the outstanding capital stock of TV-3, Inc.
and its subsidiary.
In addition, cash prepayments are required on each April 30 in
the event excess cash flows, as defined, are accumulated. The estimated
excess cash flow prepayment for the following year was included in the
current portion of long-term debt and approximated $1,513,000 at
December 31, 1999.
<PAGE> 14
The loan agreement provides for borrowings under the line of
credit and term loan to be comprised of both notes in which interest is
indexed to prime (base rate loans) and those in which interest is
indexed to LIBOR (LIBOR loans). Base rate loans are issued at a minimum
of $500,000 with integral multiples of $250,000 and LIBOR loans require
a minimum of $3,000,000 with integral multiples of $500,000. Interest
on base rate loans is payable quarterly with interest on LIBOR loans
due at the end of the specified interest period (ranging from one to
three months).
The Company is required to enter into interest rate swap or
fixed rate financing arrangements with the lending agent wherein a
minimum of 50% of total outstanding debt is hedged and where the
borrower pays a fixed rate of interest. The Company had interest rate
swap agreements or options on swaps with notional amounts approximating
$29,000,000 at December 31, 1999, which expire at various dates through
February 20, 2002. Under these agreements, the Company will pay the
counterparty interest at a weighted average fixed rate of 4.9% for the
year ended December 31, 1999 and receive interest at variable rates
equal to three month LIBOR.
Settlements under these financing agreements are made
quarterly and resulted in additional interest expense of approximately
$290,000.
The loan agreement contains covenants which restrict or limit,
among other things, the amount of dividends payable annually, the
amount of capital expenditures annually, the amount of permitted
additional indebtedness, and requires that certain financial conditions
and ratios be met.
As of December 31, 1999, estimated annual maturities of
long-term debt were as follows:
<TABLE>
<CAPTION>
REVOLVING
LINE OF TERM CAPITAL
CREDIT LOAN LEASE OTHER TOTAL
<S> <C> <C> <C> <C> <C>
2000 1,512,500 54,045 33,333 1,599,878
2001 7,500,000 $ 1,000,000 59,715 33,333 8,593,048
2002 38,750,000 4,000,000 65,383 33,334 42,848,717
2003 71,053 71,053
2004 and thereafter 180,599 180,599
------------------------------------------------------------------------
Total 47,762,500 5,000,000 430,795 100,000 53,293,295
Less current
maturities of
long-term debt (2,232,641) (54,045) (33,333) (2,320,019)
------------------------------------------------------------------------
$45,529,859 $ 5,000,000 $ 376,750 $ 66,667 $50,973,276
========================================================================
</TABLE>
<PAGE> 15
4. DEFERRED COMPENSATION LIABILITY
Under the terms of an amended management incentive plan, the
Company has outstanding options for the purchase of 1,331.54 shares of
its common stock which are fully vested and exercisable at $.01 per
share. These vested options expire on December 31, 2002, if not
exercised, and were deemed vested under mutual agreement by
shareholders pursuant to a refinancing and recapitalization which
occurred in a prior year. The deferred compensation liability, which
approximated $7,433,000 at December 31, 1999, represents the difference
in the estimated fair value of the options and their exercise price at
the date of vesting.
5. STOCKHOLDERS' EQUITY
Both classes of common stock have identical dividend and
liquidation preferences. In addition, holders of each class of common
stock have the right to convert their shares into the other class of
common stock at any time at the election of the holder with no
additional consideration.
The convertible preferred stock entitles the holders to
receive cumulative dividends at a rate of 8% per annum through December
31, 2002 and at a rate of 13% per annum thereafter. The preferred
stockholders have the right to require the Company to convert the
preferred stock into an amount of common stock equal to not more than
70% of the Company's total outstanding common stock on a fully dilutive
basis upon the occurrence of a public offering, a sale of the common
stock, a sale of substantially all the assets of the Company, a change
in control of Company, or at any time after December 31, 2001. The
conversion or put price will be equal to the face amount of the
preferred stock and the cumulative dividends plus a defined conversion
price.
The preferred stock shareholders have the right of first
refusal for the sale of any shares by the shareholders. The preferred
shareholders have the option to purchase shares from selling
shareholders under certain specified conditions at a price equal to the
offer price. Additionally, the preferred stock shareholders can
designate two of the Company's seven board of directors.
Upon liquidation or dissolution of the Company, the preferred
shareholders are entitled to liquidation preferences equal to the
stated value plus accrued and unpaid dividends before any amounts are
paid to other shareholders.
Except for the occurrence of a material default, as defined,
the holders of the convertible preferred stock are not entitled to
vote. With the occurrence of a material default, the preferred
stockholders can elect a majority of the board of directors.
<PAGE> 16
6. INCOME TAXES
The Company and its subsidiaries file consolidated federal and
state income tax returns.
The income tax benefit consisted of the following:
Current benefit $ (2,608,808)
Deferred benefit (410,482)
------------
$ (3,019,290)
============
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. The tax effects of significant items comprising the Company's
net deferred tax asset as of December 31, 1999 were as follows:
Deferred tax assets:
Allowance for bad debts $ 64,195
Film contract rights valuation allowance 29,840
Accrued health insurance 10,542
Contributions carryforward 111,023
Deferred compensation 2,772,326
Change in tax accounting for intangible assets 78,516
Net operating loss 263,545
3,329,987
Deferred tax liabilities - property and equipment (407,184)
-----------
Net deferred tax asset $ 2,922,803
===========
The income tax benefit differs from the amounts computed by
applying the federal statutory rate to income before income tax benefit
primarily as a result of the following:
Income tax expense at statutory rates $ 1,029,723
Nondeductible amortization 214,536
Change in tax accounting for intangible assets (4,425,147)
Other nondeductible items 161,598
-----------
Income tax benefit $(3,019,290)
===========
<PAGE> 17
During 1998, the Company filed an application with the
Internal Revenue Service for a change in income tax accounting to
amortize for income tax purposes, certain intangible assets that had
previously been amortized only for accounting purposes.
During 1999, the Internal Revenue Service approved the change
in tax accounting for intangible assets. As a result, the 1999
consolidated financial statements include a current tax benefit of
approximately $4,347,000 reflecting the income tax reductions for 1998
and 1999, a deferred tax benefit of approximately $79,000 reflecting
the future income tax reduction for 2000 and 2001.
Refundable income taxes in 1999 represent overpayment of 1999
estimated taxes paid of $1,065,000 as a result of the change in tax
accounting for intangible assets discussed above.
The Internal Revenue Service has also notified the Company
that it intends to examine the Company's 1997 Federal income tax
return.
7. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
a concentration of credit risk principally consist of cash and cash
equivalents, trade accounts receivables and off-balance sheet
transactions relating to its interest rate swap and fixed rate
financing agreements.
The Company invests available cash in money market securities
of various depository institutions, commercial paper of industrial and
other companies with high credit ratings and securities purchased under
agreements to resell which are secured by United States government
securities.
Trade accounts receivable consist of significant amounts
concentrated in amounts due from local, regional and national
advertising agencies. However, amounts due from any one customer billed
through these agencies are not significant.
The Company is exposed if one or more counterparties defaulted
relative to its interest rate swap and fixed rate financing agreements.
However, as of December 31, 1999 all of its agreements are with its
lendor relating to its outstanding undebtedness. Therefore, the Company
believes there is no exposure relating to its interest rate swaps.
8. COMMITMENTS AND CONTINGENCIES
During 1997, the Company entered into an agreement with an
independent contractor to perform maintenance on its broadcast tower
located near Raymond, Mississippi. On October 23, 1997, while this work
was being performed, the
<PAGE> 18
tower collapsed, destroying and damaging not only the tower but other
property close by, and killing three employees of the independent
contractor.
In 1998, the Company filed a claim under its insurance policy
to recover its loss. During 1998 the insurance company advanced
$2,500,000 to the Company against the business income and extra expense
coverage, and then reimbursed the Company approximately $120,000 to
cover loss on surrounding property. The business interruption coverage
is limited to $5,000,000. The amount receivable from the insurer
approximated $2,620,000 at December 31, 1998 and was subsequently
received in the first quarter of 1999.
The insurance company has denied coverage as to the tower loss
claiming exclusion under its policy; however, they have agreed to
participate in mediation proceedings. The tower was fully depreciated.
The Company believes that the coverage is applicable and intends to
pursue collection. The Company also has other recourse available should
the insurance company ultimately prevail. As of December 31, 1999, the
total reconstruction costs approximated $3,734,000 and have been
classified as estimated tower replacement cost.
The Company is defendant in litigation arising from normal
business activities. While these matters are in the discovery stage and
legal counsel is unable to make an informed conclusion as to their
ultimate outcome, management plans to vigorously defend these matters
and presently believes their resolution will not have a material
adverse effect on the consolidated financial statements.
Accordingly, no provision has been recorded.
Future minimum annual rental commitments for noncancellable operating
leases were as follows:
2000 $ 160,000
2001 98,000
2202 28,000
2003 9,000
2004 5,000
Thereafter 4,000
---------
Total $ 304,000
=========
In addition to the above, the Company leases various equipment
under monthly lease agreements. Costs under all operating leases
approximated $280,000.
<PAGE> 19
9. SUBSEQUENT EVENTS
On March 15, 2000, management of the Company entered into a
non-binding letter of intent with Cosmos Broadcasting Corporation to
sell the stock of the Company for cash approximating $204,000,000, net
of any outstanding indebtedness of the Company, and related prepayment
penalties associated with early repayment. The transaction was
completed on December 1, 2000.
As of September 30, 2000, the Company has settled its claim
relative to its tower claim (paragraph 3 of Note 8) and the proceeds,
less the cost of reconstruction and professional fees, resulted in a
gain of approximately $12,622,000 which was recorded in 2000.
<PAGE> 20
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,406,995
Accounts receivable, less allowance for doubtful accounts
of approximately $256,000 5,926,350
Refundable income taxes 375,399
Current portion of film contract rights 1,212,000
Prepaid expenses and other current assets 198,406
-----------
Total current assets 10,119,150
PROPERTY AND EQUIPMENT - net 7,422,711
INTANGIBLE ASSETS:
Broadcast and network rights - at cost, less accumulated
amortization of approximately $14,021,000 9,655,553
Excess of cost over net assets of business acquired, less
accumulated amortization of approximately $9,445,000 2,058,692
Other intangible assets - at cost, less accumulated amortization
of approximately $7,857,000 501,548
Debt issue costs less accumulated amortization of
approximately $2,207,000 1,101,440
Film contract rights, excluding current portion, less allowance
of approximately $80,000 3,308,781
-----------
16,626,014
-----------
NET DEFERRED TAX ASSET 1,709,011
OTHER ASSETS 134,382
-----------
TOTAL ASSETS $36,011,268
===========
</TABLE>
See notes to consolidated financial statements.
See notes to financial statements.
<PAGE> 21
LIABILITIES AND DEFICIENCY IN ASSETS
<TABLE>
<S> <C>
CURRENT LIABILITIES:
Accounts payable $ 319,709
Accrued expenses and other current liabilities 1,318,759
Current portion of film contracts payable 1,178,163
Current portion of long-term debt 91,631
Income taxes payable 2,764,658
------------
Total current liabilities 5,672,920
OTHER LIABILITIES:
Long-term debt, excluding current portion 34,628,329
Non-voting convertible preferred dividends payable 7,500,000
Film contracts payable, excluding current portion 3,393,269
Deferred compensation liability 7,432,509
------------
52,954,107
COMMITMENTS AND CONTINGENCIES (Note 8)
DEFICIENCY IN ASSETS:
Non-voting convertible preferred stock, $1 par value and stated value of
$4,228 per share, authorized 5,912 shares;
issued and outstanding 5,911.98 shares 24,737,232
Common Stock:
Voting, $.01 par value; authorized 50,000 shares;
issued and outstanding 639.12 shares 6
Non-voting, $.01 par value; authorized 50,000 shares;
no shares issued
Additional paid-in capital (deficit) (15,163,912)
Retained earnings (deficit) (32,189,085)
------------
(22,615,759)
------------
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ 36,011,268
============
</TABLE>
See notes to financial statements.
<PAGE> 22
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------------------------------------------------
OPERATING REVENUE (net of agency commissions of
approximately $3,963,000 $ 22,847,109
OPERATING EXPENSES:
Salaries and other employee benefits 7,868,905
Programming cost 1,931,362
Facility expense 1,159,646
Other 1,392,252
------------
Total operating expenses 12,352,165
------------
OPERATING INCOME BEFORE DEPRECIATION,
AMORTIZATION AND ADMINISTRATIVE EXPENSES 10,494,944
DEPRECIATION AND AMORTIZATION EXPENSE 2,445,960
ADMINISTRATIVE EXPENSES 1,217,146
------------
NET OPERATING INCOME 6,831,838
NON-OPERATING EXPENSE (INCOME):
Interest and other income (109,619)
Gain on tower collapse (12,622,416)
Interest expense 3,486,877
------------
Total non-operating expense (9,245,158)
------------
INCOME BEFORE INCOME TAX EXPENSE 16,076,996
INCOME TAX EXPENSE 4,250,128
------------
NET INCOME $ 11,826,868
============
See notes to financial statements.
<PAGE> 23
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
-------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,826,868
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,445,960
Deferred income taxes 1,213,792
Amortization of film contract rights 921,098
Provision for losses on accounts receivable 125,444
Changes in operating assets and liabilities:
Increase in accounts receivable (16,118)
Decrease in income tax refundable 804,808
Decrease in prepaid expenses and other assets 1,251
Decrease in insurance recoverable 514,190
Decrease in accounts payable, accrued expenses
and other current liabilities (257,798)
Increase in income taxes payable 2,764,658
------------
Net cash provided by operating activities 20,344,153
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (599,531)
------------
Net cash used in investing activities (599,531)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (19,573,335)
Proceeds from borrowings of long-term debt 1,000,000
Principal payments on film contracts payable (940,628)
------------
Net cash used in financing activities (19,513,963)
------------
NET INCREASE IN CASH AND 230,659
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,176,336
------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 2,406,995
============
See notes to financial statements.
<PAGE> 24
CIVIC COMMUNICATIONS CORPORATION II AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
BUSINESS - Civic Communications Corporation II (and its subsidiaries
collectively referred to as "the Company") owns all of the outstanding
capital stock of TV-3, Inc. ("TV-3"). Civic License Holding Company, Inc.,
which is wholly owned by TV-3, owns licenses to operate television
stations in Mississippi and Texas. The license agreements to operate the
television stations are subject to periodic renewal. The Company's ability
to continue to operate these stations is subject to these renewals.
UNAUDITED INFORMATION - The information set forth in these consolidated
financial statements as of September 30, 2000 and for the nine months
ended September 30, 2000 is unaudited and reflects all adjustments,
consisting only of normal recurring adjustments, that, in the opinion of
management, are necessary to present fairly the financial position and
results of operations of the Company for the period. Results of operations
for the interim period are not necessarily indicative of the results of
operations for the full fiscal year.
a. PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary,
TV-3, Inc. and its wholly-owned subsidiary. All significant
intercompany transactions and balances have been eliminated.
b. USE OF ESTIMATES - The Company's consolidated financial statements
have been prepared in conformity with accounting principles
generally accepted in the United States of America. In preparing its
financial statements, the Company is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as
of the date of the balance sheet and the reported amounts of
revenues and expenses for the period then ended. Actual results
could differ significantly from those estimates.
c. PROPERTY AND EQUIPMENT AND DEPRECIATION - Property and equipment are
stated at cost. Costs of capitalized leased assets are stated at the
present value of the future minimum lease payments. Depreciation,
including amortization of capitalized leases, is computed by the
straight-line method over the estimated useful lives of the assets
which range from three to twenty years.
<PAGE> 25
d. INTANGIBLE ASSETS - The cost of broadcast and network rights and the
excess of cost over net assets of businesses acquired are being
amortized by the straight-line method over twenty years.
Debt issue costs are being amortized over the life of the related
debt.
Other intangibles include the value of specifically identifiable
assets arising principally from business acquisitions. These
intangibles are being amortized principally by the straight-line
method over their estimated lives, which range from two to twenty
years.
e. FILM CONTRACT RIGHTS - Film contract rights, which represent a
contractual right to use program material, are carried at the lower
of unamortized cost or estimated net realizable value. These rights
are recorded as an asset and liability at their gross amount. The
asset is segregated on the balance sheet between current and
noncurrent based upon payment terms. The film contract rights are
being amortized over the contract period by an accelerated method
based on anticipated telecasts, which provides a matching of
anticipated revenue and related costs.
f. EMPLOYEE BENEFITS - The Company has a 401(k) profit sharing plan
which covers substantially all full-time employees. Employees are
permitted to contribute form one to ten percent of their gross
salaries. No employer matching contributions are required, although
employer contributions are permitted at the discretion of the Board
of Directors. Operating expenses include contributions of
approximately $203,000.
g. INCOME TAXES - The Company recognizes deferred tax assets and
liabilities based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse.
h. CASH EQUIVALENTS - The Company considers all highly liquid
investments with a maturity of three months or less purchased to be
cash equivalents for purposes of the consolidated statement of cash
flows.
i. STOCK-BASED COMPENSATION - The Company elected to continue to
measure compensation cost for its management incentive plan using
the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees".
j. INTEREST RATE SWAP CONTRACTS - The Company uses interest rate swap
and rate cap contracts to reduce the Company's interest rate risk
related to its outstanding long-term indebtedness. Amounts to be
paid or received under interest rate swap agreements are accrued as
interest rates change and are recognized over the life of the swap
agreements as an adjustments as an adjustment to interest expense.
The fair value of the swap agreements is not recognized in the
consolidated financial statements as they are
<PAGE> 26
accounted for as hedges. Gains and losses resulting from early
terminations are deferred and amortized as an adjustment to the
yield of the related debt over the remaining life of the debt.
k. RECENT ACCOUNTING PRONOUNCEMENTS - In June 1998, the Financial
Accounting Standards Board issued Statement on Financial Accounting
Standards No. 133, as amended, "Accounting for Derivative
Instruments and Hedging Activities," which is effective for fiscal
years beginning after June 15, 2000. SFAS No. 133; as amended,
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments imbedded in
other contracts, for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at
fair value. The Company has not completed the process of evaluating
the impact that will result from adopting SFAS No. 133 as amended.
2. CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to a
concentration of credit risk principally consist of cash and cash
equivalents, trade accounts receivables and off-balance sheet transactions
relating to its interest rate swap and fixed financing agreements.
The Company invests available cash in money market securities of various
depository institutions, commercial paper of industrial and other
companies with high credit ratings and securities purchased under
agreements to resell which are secured by United States government
securities.
Trade accounts receivable consist of significant amounts concentrated in
amounts due from local, regional and national advertising agencies.
However, amounts due from any one customer billed through theses agencies
are not significant.
The Company is exposed if one or more counterparties defaulted relative to
its interest rate swap and fixed rate financing agreements. However, as of
September 30, 2000 all of its agreements are with its lendor relating to
its outstanding indebtedness. Therefore, the company believes there is no
exposure relating to its interest rate swaps.
3. COMMITMENTS AND CONTINGENCIES
During 1997, the Company entered into an agreement with an independent
contractor to perform maintenance on its broadcast tower located near
Raymond, Mississippi. On October 23, 1997, while this work was being
performed, the tower collapsed, destroying and damaging not only the tower
but other property close by, and killing three employees of the
independent contractor.
In 1998, the Company filed a claim under its insurance policy to recover
it loss. During 1998 the insurance company advanced $2,500,000 to the
Company against the business income and extra expense coverage, and then
reimbursed the Company approximately
<PAGE> 27
$120,000 to cover loss on surrounding property. The business interruption
coverage is limited to $5,000,000. The amount receivable from the insurer
approximated $2,620,000 at December 31, 1998 and was subsequently received
in the first quarter of 1999.
The insurance company denied coverage as to the tower loss claiming
exclusion under its policy; however, they have participated in mediation
proceedings. The tower was fully depreciated. The Company believes that
the coverage is applicable and has pursued collection. The Company also
has pursued recourse against the contractor who was performing work on the
tower when it collapsed.
As of September 30, 2000 the Company has settled its claim, and the
proceeds, less the costs of reconstruction and professional fees has been
recorded as a gain of approximately $12,622,000. As of October 23, 2000
the three year statute of limitations for filing of claims relating to the
tower collapse has ended.
The Company is defendant in litigation arising from normal business
activities. While these matters are in the discovery stage and legal
counsel is unable to make an informed conclusion as to their ultimate
outcome, management plans to vigorously defend these matters and presently
believes their resolution will not have a material adverse effect on the
consolidated financial statements. Accordingly, no provision has been
recorded.
<PAGE> 28
Pro Forma 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, which closed on
November 1, 2000, and to the acquisition of Civic Communications (the
"transactions"). The pro forma balance sheet as of September 30, 2000 presents
the financial position of Liberty as if the transactions had occurred on that
date. The pro forma income statements have been prepared assuming the
transactions occurred as of the beginning of each period presented. In addition,
the unaudited pro forma income statements give effect to the acquisition of
KCBD-TV, which occurred on February 29, 2000, as if that acquisition had
occurred at 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 transactions been consummated on the dates assumed. These pro forma combined
condensed financial statements also do not project the results of operations 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 sale of Liberty's insurance operations, and preliminary
estimates of the allocation of the Civic purchase price to the assets acquired.
The actual results may change as additional facts become known.
<PAGE> 29
The Liberty Corporation
Pro Forma Combined Condensed Statement of Income
For the nine months ended September 30, 2000
(in thousands except per share amounts)
Unaudited
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Historical for Pro Forma Pro Forma
Results of Insurance Adjustments Adjustments
Operations Operations for KCBD for Civic Pro Forma
9/30/00 Sale Acquisition Acquisition 9/30/00
<S> <C> <C> <C> <C> <C>
Broadcasting revenues (net of agency
commissions) $114,737 $ 1,396 (d) $ 22,847 (e) $ 138,980
Cable and other revenues 9,539 9,539
-------------- -------------- ------------- ------------ ----------
Total revenues 124,276 -- 1,396 22,847 148,519
Station operating expenses 68,166 556 (d) 10,421 (e) 79,143
Amortization of program rights 4,792 159 (d) 1,931 (e) 6,882
Depreciation and amortization 14,864 368 (d) 5,681 (e) 20,913
Corporate general and administrative
expenses 8,025 8,025
-------------- -------------- ------------- ------------ ----------
Total operating expense 95,847 -- 1,083 18,033 114,963
OPERATING INCOME 28,429 313 4,814 33,556
Net investment income 12,016 12,016
Interest expense 12,705 $ (12,705)(a) --
-------------- -------------- ------------- ------------ ----------
Income before income taxes 27,740 12,705 313 4,814 45,572
Income taxes 11,448 5,082 (b) 125 (b) 1,926 (b) 18,581
-------------- -------------- ------------- ------------ ----------
INCOME FROM CONTINUING OPERATIONS 16,292 7,623 188 2,888 26,991
INCOME FROM DISCONTINUED
OPERATIONS 26,061 (26,061)(c) -- -- --
-------------- -------------- ------------- ------------ ----------
NET INCOME $42,353 $ (18,438) $ 188 $ 2,888 $ 26,991
============== ============== ============= ============ ==========
BASIC EARNINGS PER COMMON SHARE $2.18 $1.38
DILUTED EARNINGS PER COMMON SHARE $2.15 $1.37
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.
(d) Estimated revenues and expenses of KCBD-TV's operations for the
period from January 1, 2000 until February 29, 2000.
(e) Revenues and estimated, on a purchase accounting basis, expenses of
Civic's operations for the period from January 1, 2000 to September
30, 2000.
The pro forma information above assumes repayment of the Company's
revolving credit facility, as required under it terms. However, it does
not include any 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.
<PAGE> 30
The Liberty Corporation
Pro Forma Combined Condensed Statement of Income
For the Year ended December 31, 1999
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Unaudited
----------------------------------------------------------------------
Pro Forma
Adjustments
Historical for Pro Forma Pro Forma
Results of Insurance Adjustments Adjustments
Operations Operations for KCBD for Civic Pro Forma
12/31/99 Sale Acquisition Acquisition 12/31/99
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Broadcasting revenues (net of agency
commissions) $144,044 $ 8,040 (d) $ 29,683 (e) $ 181,767
Cable and other revenues 9,956 9,956
--------------- -------------- ------------- ------------- ------------
Total revenues 154,000 -- 8,040 29,683 191,723
Station operating expenses 80,389 2,785 (d) 13,902 (e) 97,076
Amortization of program rights 5,855 724 (d) 2,615 (e) 9,194
Depreciation and amortization 16,770 2,202 (d) 7,575 (e) 26,547
Corporate general and administrative
expenses 8,200 8,200
--------------- -------------- ------------- ------------- ------------
Total operating expense 111,214 -- 5,711 24,092 141,017
OPERATING INCOME 42,786 -- 2,329 5,591 50,706
Net investment income 2,663 2,663
Interest expense 15,085 $ (15,085) (a) --
--------------- -------------- ------------- ------------- ------------
Income before income taxes 30,364 15,085 2,329 5,591 53,369
Income taxes 11,592 6,034 (b) 932 (b) 2,236 (b) 20,794
--------------- -------------- ------------- ------------- ------------
INCOME FROM CONTINUING OPERATIONS 18,772 9,051 1,397 3,355 32,575
INCOME FROM DISCONTINUED OPERATIONS
25,797 (25,797) (c) --
--------------- -------------- ------------- ------------- ------------
NET INCOME $44,569 $ (16,746) $ 1,397 $ 3,355 $ 32,575
=============== ============== ============= ============= ============
BASIC EARNINGS PER COMMON SHARE $2.29 $1.66
DILUTED EARNINGS PER COMMON SHARE $2.26 $1.64
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.
(d) Estimated revenues and expenses of KCBD-TV's operations for the
period from January 1, 1999 until December 31, 1999.
(e) Revenues and estimated, on a purchase accounting basis, expenses of
Civic's operations for the period from January 1, 1999 until
December 31, 1999.
The pro forma information above assumes repayment of the Company's
revolving credit facility, as required under it terms. However, it does
not include any 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.
<PAGE> 31
The Liberty Corporation
Pro Forma Combined Condensed Balance Sheet
As of September 30, 2000
(Amounts in 000's)
Unaudited
<TABLE>
<CAPTION>
Pro Forma
Adjustments Pro Forma
for for Pro Forma
As Reported Insurance Insurance Adjustments
09/30/00 Operations Operations for Civic Pro Forma
Sale Sale Acquisition 09/30/00
<S> <C> <C> <C> <C> <C>
Current assets:
Cash $ 3,640 $ 631,875 (a)
(258,000) (c) $ 377,515 $ (203,000)(f) $ 174,515
Receivables 32,301 32,301 5,926 (g) 38,227
Current portion of program rights 5,831 5,831 1,212 (g) 7,043
Prepaid and other current assets 4,966 4,966 573 (g) 5,539
Deferred income taxes 3,498 3,498 3,498
Current assets of discontinued operations 490,275 (490,275) (b) - -
------------- ------------- -------------- --------------- -----------
Total current assets 540,511 (116,400) 424,111 (195,289) 228,822
Net property and equipment 71,497 71,497 21,000 (g) 92,497
Intangibles net of amortization 261,574 261,574 180,152 (g) 441,726
Long term portion of program rights 3,309 (g) 3,309
Other assets 43,614 16,194 (a) 59,808 134 59,942
------------- ------------- -------------- --------------- -----------
Total assets $ 917,196 $ (100,206) $ 816,990 $ 9,306 $ 826,296
============= ============= ============== =============== ===========
Current liabilities:
Accounts payable and accrued expenses $ 20,548 $ 17,763 (a) $ 38,311 $ 1,639 (g) $ 39,950
Current portion of program contract obligation 5,602 5,602 1,178 (g) 6,780
Accrued income taxes 9,853 122,460 (a) 132,313 2,764 (g) 135,077
Revolving credit facility 258,000 (258,000) (c) -- -
------------- ------------- -------------- --------------- -----------
Total current liabilities 294,003 (117,777) 176,226 5,581 181,807
Deferred income taxes 29,559 29,559 29,559
Long term portion of program contract obligation 3,393 (g) 3,393
Other liabilities 12,391 12,391 332 (g) 12,723
------------- ------------- -------------- --------------- -----------
Total liabilities 335,953 (117,777) 218,176 9,306 227,482
Shareholders equity
Common stock 113,089 113,089 113,089
Unearned stock compensation (7,571) 7,571 (d) -- --
Retained earnings 474,879 10,000 (e) 484,879 484,879
Unrealized investment gains (losses) 846 846 846
------------- ------------- -------------- --------------- -----------
Total shareholders equity 581,243 17,571 598,814 598,814
Total liabilities and shareholders equity $ 917,196 $ (100,206) $ 816,990 $ 9,306 $ 826,296
============= ============= ============== =============== ===========
</TABLE>
(a) Represents the net cash proceeds from the insurance operations sale.
Consisting of $648 million total sales price (comprised of cash of
$632 million and non-cash consideration of $16 million) less $140
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) Vesting of restricted stock as required by the performance incentive
compensation program.
(e) Reflects the estimated after-tax gain from the insurance operations
sale.
(f) Funding of the Civic purchase using proceeds from the insurance
operations sale (purchase price of $204 million less $1 million of
cash acquired).
(g) Allocation of the Civic acquisition purchase price.
<PAGE> 32
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 Williams
------------------------------------------
Name: Martha Williams
Title: Vice President, General Counsel
and Secretary
December 15, 2000
