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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Commission File Number 1-5846

THE LIBERTY CORPORATION

135 South Main Street, Greenville, SC 29601

Registrant’s telephone number, including area code: 864/241-5400

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]       No [   ]

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

PART I, ITEM 1
THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED BALANCE SHEETS

See Notes to Consolidated and Condensed Financial Statements.

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THE LIBERTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

See Notes to Consolidated and Condensed Financial Statements.

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

See Notes to Consolidated and Condensed Financial Statements.

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THE LIBERTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
June 30, 2002
(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, 2002, but it does reflect all adjustments (which are of a normal and recurring nature) considered, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The December 31, 2001 financial information was derived from the Company’s previously filed 2001 Form 10-K. For further information, refer to the consolidated financial statements and footnotes thereto included in The Liberty Corporation annual report on Form 10-K for the year ended December 31, 2001.
2.		ADOPTION OF FASB STATEMENT NO. 142 GOODWILL AND OTHER INTANGIBLE ASSETS
		During the second quarter of 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 142 “Goodwill and Other Intangible Assets”. Statement No. 142 requires that goodwill and certain other identified intangibles no longer be amortized to earnings, but instead be reviewed for impairment. The amortization of goodwill and certain other identified intangibles ceases upon adoption of the Statement, which for the Company was January 1, 2002. The Company recorded $3.8 million ($2.4 million net of income taxes) and $7.4 million ($4.6 million net of income taxes) of amortization expense related to intangibles that are no longer required to be amortized for the three and six month periods ending June 30, 2001, respectively. In connection with the adoption of Statement No. 142, the Company reduced the carrying value of its FCC licenses by $76.4 million ($47.4 million after-tax) as a cumulative effect of a change in accounting principle.
		The following table reconciles net income for the three and six month periods ended June 30, 2001 as reported to the adjusted June 30, 2001 net income, had Statement No. 142 been in effect as of January 1, 2001.

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The following tables reconcile basic and diluted earnings per share as reported at June 30, 2001 to the adjusted June 30, 2001 basic and diluted earnings per share, had Statement No. 142 been in effect as of January 1, 2001.

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At June 30, 2002 and December 31, 2001, the Company’s intangible assets not subject to amortization were comprised of FCC licenses and network affiliations. At June 30, 2002 and December 31, 2001, the Company’s intangible assets subject to amortization were comprised of leases acquired through station purchases for space on certain of its towers, non-compete agreements, and loan costs associated with the Company’s unused line of credit. Estimated amortization expense resulting from intangible assets subject to amortization for the five year period ending 2006 is expected to be as follows:

3.		COMPREHENSIVE INCOME
		The components of comprehensive income, net of related income taxes, for the three and six month periods ended June 30, 2002 and 2001, respectively, are as follows:

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4.		SEGMENT REPORTING
		The Company operates primarily in the television broadcasting and cable advertising businesses. The Company currently owns and operates fifteen television stations, primarily in the Southeast and Midwest. Each of the stations is affiliated with a major network, with eight NBC affiliates, five ABC affiliates, and two CBS affiliates. The Company evaluates segment performance based on income before income taxes, excluding unusual, or non-operating items.
		The following table summarizes financial information by segment for the three and six month periods ended June 30, 2002 and 2001:

There were no material changes in assets by segment from those disclosed in the Company’s 2001 annual report other than the impact of the adoption of FASB Statement No. 142 “Goodwill and Other Intangible Assets” as described in Note 2 to the Consolidated and Condensed Financial Statements. The goodwill that appears on the face of the balance sheet arose through the acquisition of certain television stations, and therefore has been assigned in its entirety to the Broadcasting segment.

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5.		EARNINGS PER SHARE
		The calculation of basic and diluted earnings per common share from continuing operations is as follows:

6.		CREDIT FACILITY
		On March 21, 2001, the Company entered into a $100 million unsecured 364-day revolving credit facility with a bank. On May 20, 2002, the Company renewed the facility for an additional year on substantially similar terms. No amounts have been drawn on this facility since inception.
7.		RECLASSIFICATIONS
		Certain reclassifications have been made in the previously reported financial statements to make the prior year amounts comparable to those of the current year.

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PART I, ITEM 2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Unaudited)

The Liberty Corporation is a holding company with operations primarily in the television broadcasting industry. The Company’s television broadcasting subsidiary, Cosmos Broadcasting, consists of fifteen network-affiliated stations located in the Southeast and Midwest, a cable advertising company, a video production company and a professional broadcast equipment dealership. Eight of the Company’s television stations are affiliated with NBC, five with ABC, and two with CBS.

SEASONALITY OF TELEVISION REVENUES

The Company’s revenues are usually subject to seasonal fluctuations. The advertising revenues of the stations are generally highest in the second and fourth quarter of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. Additionally, advertising revenues in even-numbered years tend to be higher as they benefit from advertising placed by candidates for political offices and demand for advertising time in Olympic broadcasts.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001

Total net revenue increased $3.7 million, on a year-over-year basis. Station net revenue increased $2.9 million for the same period. Station net revenue was up due mainly to the presence of political spending during 2002 that was absent during 2001. Political revenue for the second quarter of 2002 was $3.9 million as compared to $0.7 million in the second quarter of 2001. Local revenue was up three percent and national revenue was up one percent on a year-over-year basis. Local revenue increased primarily due to increases in the automotive, retail, and fast-food advertising categories. Network compensation was down on a year-over-year basis as a majority of the Company’s stations began operating under new network contracts during the second half of 2001. Cable and other revenue increased due to political revenue in 2002 that was not present in 2001, and generally stronger advertising environments in several of its markets.

Operating expenses, which include amortization of program rights, were $30.8 million for the second quarter of 2002, an increase of $2.5 million over the $28.3 million reported for the second quarter of 2001. The increase in operating expenses is mainly attributable to increased personnel costs related to the addition of personnel in the Company’s cable advertising business, the addition of nightly and weekend news casts at one of the Company’s stations, and annual salary increases across all of the Company’s stations.

Depreciation and amortization was $4.2 million for the second quarter of 2002, a decrease of $3.2 million over the $7.4 million reported for the second quarter of 2001. During the first quarter of 2002, the Company adopted FASB Statement No.142 “Goodwill and Other Intangible Assets”. Statement No. 142 requires that goodwill and certain other identified intangibles no longer be amortized to earnings, but instead be reviewed for impairment. Had Statement No. 142 been effective as of the beginning of the first quarter of 2001, reported depreciation and amortization expense would have been approximately $3.6 million. (See Note 2 of the accompanying Notes to Consolidated and Condensed Financial Statements for further details).

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Management’s Discussion and Analysis

Net investment income for the second quarter of 2002 was $0.2 million as compared to $2.5 million for the second quarter of 2001. During the second quarter of 2002, the Company received $2.7 million of distributions from venture capital investments and interest income which were offset by a $2.5 million non-cash impairment charge taken on one of the Company’s private equity investments. The impairment charge resulted from the Company determining during the quarter that this investment had a carrying value in excess of its fair value, and that the excess was other than temporary. The net investment income of $2.5 million reported in 2001 was related to gains from the Company’s marketable equity and real estate portfolios.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Total net revenue increased $4.6 million, on a year-over-year basis. Station net revenue increased $3.4 million for the same period. Net revenue was up due mainly to the presence of political spending during 2002 that was absent during 2001. Political revenue for the first half of 2002 was $5.5 million as compared to $0.8 million in the first half of 2001. Local revenue was up four percent while national revenue was flat on a year-over-year basis. Local revenue increased primarily due to increases in the automotive and fast-food advertising categories. Network compensation was down on a year-over-year basis as a majority of the Company’s stations began operating under new network contracts during the second half of 2001. Cable and other revenue increased due to political revenue in 2002 that was not present in 2001, generally stronger advertising environments in several of its markets, and start up operations at certain locations in the previous year being fully operational during 2002.

Operating expenses, which include amortization of program rights, were $59.5 million for the first half of 2002, an increase of $3.7 million over the $55.8 million reported for the first half of 2001. The increase in operating expenses is mainly attributable to increased personnel costs related to the addition of personnel in the Company’s cable advertising business, the addition of nightly and weekend news casts at one of the Company’s stations, and annual salary increases across all of the Company’s stations.

Depreciation and amortization was $8.9 million for the first half of 2002, a decrease of $6.4 million over the $15.3 million reported for the first half of 2001. During the first quarter of 2002, the Company adopted FASB Statement No.142 “Goodwill and Other Intangible Assets”. Statement No. 142 requires that goodwill and certain other identified intangibles no longer be amortized to earnings, but instead be reviewed for impairment. Had Statement No. 142 been effective as of the beginning of the first quarter of 2001, reported depreciation and amortization expense would have been approximately $7.9 million. (See Note 2 of the accompanying Notes to Consolidated and Condensed Financial Statements for further details).

Net investment income for the first half of 2002 was $0.2 million, as approximately $3.2 million of interest income, venture capital distributions, and gains on the sale of real estate were offset by $3.0 million of impairment charges taken in the Company’s venture capital and private equity portfolios. The net investment income of $5.9 million reported for the first half of 2001 was related to the interest earned on $135 million of residual insurance operations sales proceeds and gains from the Company’s marketable equity and real estate portfolios. The residual insurance operations sales proceeds were remitted at the end of the first quarter of 2001 to the federal government to pay income taxes related to the November 2000 sale of the company’s insurance operations.

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Management’s Discussion and Analysis

Broadcast Cash Flow Information

The Company has included operating cash flow and broadcast cash flow data because management believes that such data are commonly used as measures of performance among companies in the broadcast industry. The Company also believes that these measures are frequently used by investors, analysts, valuation firms, and lenders as some of the important determinants of underlying asset value. Operating cash flow and broadcast cash flow should not be considered in isolation, or as alternatives to operating income (as determined in accordance with generally accepted accounting principles) as an indicator of the entity’s operating performance, or to cash flow from operating activities (as determined in accordance with generally accepted accounting principles) as a measure of liquidity. These measures are believed to be, but may not be, comparable to similarly titled measures used by other companies.

Broadcast cash flow was $22.6 million for the second quarter of 2002, compared with $19.9 million for the prior-year second quarter. Broadcast cash flow was $38.3 million and $34.2 million for the six months ended June 30, 2002 and 2001, respectively. The increase in broadcast cash flow for both the quarter and year-to-date periods is attributable to political spending in 2002, and to the policy the Company adopted in late 2001 to make up to 50% of the discretionary contribution to the Company’s retirement and savings plan in 2002 in stock as opposed to cash.

Capital, Financing and Liquidity

At June 30, 2002, the Company had cash of $50.5 million and an unused line of credit of $100 million. The Company anticipates that its primary sources of cash, those being current cash balances, operating cash flow, and the available line of credit will be sufficient to finance the operating requirements of its stations and their anticipated capital expenditures, for both the next 12 months and the foreseeable future thereafter.

Cash Flows

The Company’s net cash flow provided by operating activities was $39.9 million for the first six months of 2002 compared to cash used in operating activities of $110.0 million for the same period of 2001. The change in cash provided by operating activities is attributable primarily to the $135 million of taxes related to the sale of the Company’s insurance operations that were remitted to taxing authorities during the first quarter of 2001. Excluding these tax payments, cash provided by operations during the first half of 2001 was $25.0 million. The Company’s net cash used in investing activities was $16.8 million for the six month period ended June 30, 2002, as compared to $3.6 million for the same period of 2001. The increase in net cash used in investing activities is attributable to higher levels of fixed asset purchases and increased investing activity in 2002 as the Company deployed a portion of its cash to acquire investments in private

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Management’s Discussion and Analysis

debt and equity securities. Net cash used in financing activities for the six months ended June 30, 2002 was $8.0 million compared to $13.8 million for the first six months of 2001. The decrease in net cash used in financing activities is due mainly to the absence of stock repurchases during 2002, offset by lower levels of employee stock option exercises.

Forward Looking Information

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information contained herein or in any other written or oral statements made by, or on behalf of the Company, is or may be viewed as forward-looking. The words “expect,” “believe,” “anticipate” or similar expressions identify forward-looking statements. Although the Company has used appropriate care in developing any such forward-looking information, forward-looking information involves risks and uncertainties that could significantly impact actual results. These risks and uncertainties include, but are not limited to, the following: changes in national and local markets for television advertising; changes in general economic conditions, including the performance of financial markets and interest rates; competitive, regulatory, or tax changes that affect the cost of or demand for the Company’s products; and adverse litigation results. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise.

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PART II, ITEM 4. Submission of Matters to a Vote of Security Holders

	a.		The annual meeting of shareholders of the registrant was held May 7, 2002.
	b.		The following individuals were elected to serve for three-year terms: Benjamin F. Payton, Frank E. Melton, John H. Mullin, III, and Eugene E. Stone, IV.
	c.		Matters voted upon at the annual meeting were as follows:

d.

There were no settlements between the registrant and any other participants.

PART II, ITEM 6. Exhibit and Reports on Form 8-K

INDEX TO EXHIBITS

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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.

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