<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1997.
-----------------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to ____________.
Commission File Number 0-20944
Jones Programming Partners 2-A, Ltd.
- ------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-1088819
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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Address of principal executive office
(303) 792-3111
-----------------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 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
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JONES PROGRAMMING PARTNERS 2-A, LTD.
------------------------------------
INDEX
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Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position as of
September 30, 1997 and December 31, 1996 3
Unaudited Statements of Operations for the
Three and Nine Months Ended September 30, 1997 and 1996 4
Unaudited Statements of Cash Flows for the
Nine Months Ended September 30, 1997 and 1996 5
Notes to Unaudited Financial Statements as of
September 30, 1997 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II. OTHER INFORMATION 13
2
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JONES PROGRAMMING PARTNERS 2-A. LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
------ ------------------- -------------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 609,126 $ 537,638
ACCOUNTS RECEIVABLE 71,413 76,090
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $3,648,360 and $3,466,616
as of September 30, 1997 and December 31, 1996, respectively 382,891 564,635
NOTE RECEIVABLE FROM GENERAL PARTNER,
net of unamortized discount of $0 and $14,207 as of
September 30, 1997 and December 31, 1996, respectively - 374,959
OTHER ASSETS 2,560 2,285
------------ -----------
Total assets $ 1,065,990 $ 1,555,607
============ ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
------------------------------------------
LIABILITIES:
Accounts payable to affiliates $ 15,970 $ 29,106
Accrued distribution to partners 141,781 141,781
Accrued liabilites 3,308 7,705
------------ -----------
Total liabilites 161,059 178,592
------------ -----------
PARTNERS' CAPITAL (DEFICIT):
General partner-
Contributed capital 1,000 1,000
Distributions (29,014) (24,759)
Accumulated deficit (10,187) (9,720)
------------ -----------
Total general partner's deficit (38,201) (33,479)
------------ -----------
Limited partners-
Contributed capital, net of offering costs (11,229 units
outstanding as of September 30, 1997 and December 31, 1996) 4,823,980 4,823,980
Distributions (2,872,238) (2,451,150)
Accumulated deficit (1,008,610) (962,336)
------------ -----------
Total limited partners' capital 943,132 1,410,494
------------ -----------
Total partners' capital 904,931 1,377,015
------------ -----------
Total liabilities and partners' capital $ 1,065,990 $ 1,555,607
============ ===========
</TABLE>
The accompanying notes to the unaudited financial statements are an integral
part of these unaudited financial statements.
3
<PAGE>
JONES PROGRAMMING PARTNERS 2-A. LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------------- ----------------------------------
1997 1996 1997 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 77,268 $ 39,445 $ 184,686 $ 200,526
COSTS AND EXPENSES:
Costs of filmed entertainment 76,859 35,192 181,744 166,820
Distribution fees and expenses 3,156 18,367 17,771 52,439
Operating, general and administrative expenses 24,502 7,243 64,165 21,054
------- ------- -------- -------
Total costs and expenses 104,517 60,802 263,680 240,313
------- ------- -------- -------
OPERATING LOSS (27,249) (21,357) (78,994) (39,787)
------- ------- -------- -------
OTHER INCOME:
Interest income 7,978 18,511 32,253 70,511
------- ------- -------- -------
Other income, net 7,978 18,511 32,253 70,511
------- ------- -------- -------
NET INCOME (LOSS) $ (19,271) $ (2,846) $ (46,741) $ 30,724
========== ========= ========== ========
ALLOCATION OF NET INCOME (LOSS):
General partner $ (193) $ (29) $ (467) $ 307
========== ========= ========== ========
Limited partners $ (19,078) $ (2,817) $ (46,274) $ 30,417
========== ========= ========== ========
NET INCOME (LOSS PER LIMITED
PARTNERSHIP UNIT $ (1.70) $ (0.25) $ (4.12) $ 2.71
========== ========= ========== ========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING $ 11,229 $ 11,229 $ 11,229 $ 11,229
========== ========= ========== ========
</TABLE>
The accompanying notes to the unaudited financial statements are an integral
part of these unaudited financial statements.
4
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JONES PROGRAMMING PARTNERS 2-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
----------------------------------------
1997 1996
--------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (46,741) $ 30,724
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Amortization of filmed entertainment costs 181,744 166,820
Amortization of discount (14,207) (55,403)
Net change in assets and liabilities:
Decrease in accounts receivable 4,677 43,592
Increase in other assets (275) (4,036)
Increase (decrease) in accounts payable to affiliates (13,136) 17,003
Decrease in accrued liabilities (4,397) (492)
--------- -------
Net cash provided by operating activities 107,665 198,208
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from payment of note receivable from General Partner 389,166 500,000
--------- -------
Net cash provided by investing activities 389,166 500,000
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (425,343) (425,343)
--------- -------
Net cash used in financing activities (425,343) (425,343)
--------- -------
INCREASE IN CASH AND CASH EQUIVALENTS 71,488 272,865
CASH AND CASH EQUIVALENTS, beginning of period 537,638 377,368
--------- -------
CASH AND CASH EQUIVALENTS, end of period $ 609,126 $ 650,233
========= ========
</TABLE>
The accompanying notes to the unaudited financial statements are an integral
part of these unaudited financial statements.
5
<PAGE>
JONES PROGRAMMING PARTNERS 2-A, LTD.
------------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) BASIS OF PRESENTATION
---------------------
This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Statements of
Financial Position and Statements of Operations and Cash Flows in
conformity with generally accepted accounting principles. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the financial
position of Jones Programming Partners 2-A, Ltd. (the "Partnership") as of
September 30, 1997 and December 31, 1996 and its results of operations and
its cash flows for the three and nine month periods ended September 30,
1997 and 1996. Results of operations for these periods are not necessarily
indicative of results to be expected for the full year.
(2) TRANSACTIONS WITH AFFILIATED ENTITIES
-------------------------------------
The General Partner is entitled to reimbursement from the Partnership for
its direct and indirect expenses allocable to the operations of the
Partnership, which shall include, but not be limited to, rent, supplies,
telephone, travel, legal expenses, accounting expenses, preparation and
distribution of reports to investors and salaries of any full or part-time
employees. Because the indirect expenses incurred by the General Partner
on behalf of the Partnership are immaterial, the General Partner generally
does not charge indirect expenses to the Partnership. The General Partner
charged $14,860 and $1,498 to the Partnership for direct expenses for the
three months ended September 30, 1997 and 1996, respectively. For the nine
month periods ended September 30, 1997 and 1996, $41,684 and $10,642,
respectively, of direct expenses were charged to the Partnership.
(3) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
----------------------------------------------
"Charlton Heston Presents: The Bible"
-----------------------------------
In May 1992, the General Partner, on behalf of the Partnership, entered
into an agreement with Agamemnon Films, an unaffiliated party, to produce
four one-hour programs for television, entitled "Charlton Heston Presents:
The Bible" (the "Bible Programs"). The production costs of the Bible
Programs were approximately $2,370,000, which included a $240,000
production and overhead fee paid to the General Partner. In return for
agreeing to fund these production costs, the Partnership acquired all
rights to the Bible Programs in all markets and in all media in perpetuity.
The Partnership subsequently assigned half of its ownership of the Bible
Programs to an unaffiliated party for an investment of $1,000,000 toward
the production costs for the Bible Programs. After consideration of the
reimbursement, the Partnership's total investment in the Bible Programs was
$1,369,764 and its net investment, after consideration of amortization, was
$155,953 as of September 30, 1997. From inception to September 30, 1997,
the Partnership has recognized $1,329,219 of gross revenue from this film,
of which $548,568 has been retained by the distributors of the film for
their fees and marketing costs and the remaining $780,651 has been received
by the Partnership as of September 30, 1997. The Partnership plans to
recover its remaining investment in this film from net revenues generated
from domestic and international home video markets or from sale of the
Partnership's interests in the film to an unaffiliated third party.
"The Whipping Boy"
----------------
In August 1993, the Partnership acquired the rights to the Newbury Award-
winning book "The Whipping Boy." "The Whipping Boy" was produced as a two-
hour telefilm which premiered in the North American television market on
The Disney Channel. The film's final cost was approximately $4,100,000. As
of September 30, 1997,
6
<PAGE>
the Partnership had invested $2,661,487 in the film, which included a
$468,000 production and overhead fee paid to the General Partner. The film
was co-produced by the General Partner and Gemini Films, a German company.
The completed picture was delivered to The Disney Channel in the second
quarter of 1994. The Partnership's net investment in the film, after
consideration of amortization, was $226,938 as of September 30, 1997. From
inception to September 30, 1997, the Partnership has recognized $2,392,234
of gross revenue from this film, of which $2,100,000 represents the initial
license fee from The Disney Channel that was used to finance the film's
production. Of the remaining $292,234, $8,325 has been retained by the
distributors of the film for their fees and marketing costs and
$212,496 has been received by the Partnership as of September 30, 1997. The
remaining $71,413 was received by the Partnership in October 1997. The
Partnership plans to recover its remaining investment in this film from net
revenues generated from domestic and international home video and
television markets or from sale of the Partnership's interests in the film
to an unaffiliated third party.
7
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JONES PROGRAMMING PARTNERS 2-A, LTD.
------------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
FINANCIAL CONDITION
-------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership's principal sources of liquidity are cash on hand, including
amounts received from the General Partner in payment of the promissory notes
discussed below, and amounts received from the domestic and international
distribution of its programming. As of September 30, 1997, the Partnership had
$609,126 in cash. The Partnership will not invest in any additional programming
projects, but instead will focus on the distribution or sale of its existing
programming projects. The Partnership had outstanding amounts receivable
totaling $71,413 as of September 30, 1997. These amounts were received by the
Partnership in October 1997.
On June 30, 1995, the Partnership sold its interest in the film "Household
Saints" to the General Partner for $1,389,166. The purchase price was paid
$500,000 in cash at closing, $500,000 in the form of a non-interest bearing
promissory note which was paid in full on June 30, 1996 and $389,166 in the form
of a non-interest bearing promissory note which was paid in full on June 30,
1997. The sale proceeds from "Household Saints" have contributed to the
liquidity and capital resources of the Partnership, helping enable the
Partnership to fund its operating needs and distributions to the limited
partners through 1997.
During the nine months ended September 30, 1997, the Partnership declared
distributions to partners totaling $425,343, of which $141,781 was paid in May
1997 and $141,781 in August 1997, with the remaining $141,781 to be paid in
November 1997. These distributions are made using cash on hand, interest
income, proceeds received from the sale of "Household Saints" and cash provided
by operating activities. Quarterly distributions are expected to continue
through the fourth quarter of 1997 at the same level as those made during the
first three quarters of 1997. Thereafter, distributions will be suspended. The
Partnership will retain a certain level of working capital, including any
necessary reserves, to fund its operating activities. Any amounts in excess of
the Partnership's working capital needs received from continued distribution of
the Partnership's programming will be periodically distributed to partners.
The General Partner, on behalf of the Partnership, is now completing the second
cycle distribution of the Partnership's programming. In addition, the General
Partner, on behalf of the Partnership, engaged an independent public accounting
firm during 1996 for purposes of performing distribution audits of the major
distributors of the Partnership's programming. The purpose of these audits was
to identify and facilitate payment of any excess film proceeds improperly
retained by the distributors that belong to the Partnership. Revenue proceeds
identified and collected by the Partnership in conjunction with these audits in
1997 were not material. There can also be no assurance that the continued
second cycle distribution of the Partnership's programming will generate
significant revenue for the Partnership.
The General Partner, on behalf of the Partnership, is currently engaged in
efforts to sell the Partnership's interests in its programming projects to one
or more unaffiliated third parties. In preparation for arranging the future
sale of the Partnership's programming, the General Partner engaged three
independent consulting firms in late 1996 and early 1997 for purposes of
obtaining informal appraisals of the programming projects' estimated net
realizable value, which are based on an estimate of anticipated revenues
remaining over the life of the films from international and domestic
distribution. These estimates of value will be used by the General Partner in
negotiating a definitive sales agreement with one or more unaffiliated third
parties. There can be no assurance that the ultimate negotiated sales price of
the programming projects will be at least equal to the films' estimated fair
market value based on the three estimates obtained. Any sale of all or
substantially all of the Partnership's assets will be subject to the approval of
the Partnership's limited partners prior to closing of the sale.
8
<PAGE>
The General Partner cannot predict at this time when or at what price the
Partnership's interests in its programming projects ultimately will be sold.
However, any direct costs incurred by the General Partner on behalf of the
Partnership in soliciting and arranging for the sale of the Partnership's
programming projects will be charged to the Partnership. It is anticipated that
proceeds from the sale of the Partnership's interests in its programming will be
distributed to the partners in the future when the Partnership's interests in
the programming are sold. Based on the independent estimates of value obtained
for the Partnership's programming projects, it now appears likely that the
distributions of the proceeds from the sale of the Partnership's programming
projects together with all prior distributions paid to the limited partners will
not be sufficient to return to the limited partners 100% of their initial
capital contributions made to the Partnership.
The General Partner believes that the Partnership has, and will continue to
have, sufficient liquidity to fund its operations and to meet its obligations.
Cash flow from operating activities will be generated primarily from the
Partnership's programming projects as follows:
"Charlton Heston Presents: The Bible"
------------------------------------
In 1992, the General Partner, on behalf of the Partnership, entered into an
agreement with Agamemnon Films, an unaffiliated party, to produce four one-hour
programs for television, entitled "Charlton Heston Presents: The Bible" (the
"Bible Programs") for Arts and Entertainment Network ("A&E"). The production
costs of the Bible Programs were approximately $2,370,000, which included a
$240,000 production and overhead fee to the General Partner. In return for
agreeing to fund these production costs, the Partnership acquired all rights to
the Bible Programs in all markets and in all media in perpetuity.
In order to reduce the Partnership's financial exposure, the General Partner, on
behalf of the Partnership, assigned one-half of the Partnership's interest in
the Bible Programs to GoodTimes Home Video Corporation ("GoodTimes"), an
unaffiliated entity directly involved in the specialty home video and
international television distribution business, for an investment by GoodTimes
of $1,000,000. The Partnership and GoodTimes funded Jones Documentary Film
Corporation ("JDFC"), which in turn contracted with Agamemnon Films for the
production of the Bible Programs. JDFC was formed to insulate the Partnership
and GoodTimes from certain risks and potential liabilities associated with the
production of programming in foreign countries because the Bible Programs were
filmed on location in the Holy Lands.
The Partnership and JDFC granted the General Partner the exclusive rights to
distribute the Bible Programs. To accomplish this, the General Partner, on its
own behalf, and GoodTimes entered into an agreement to form J/G Distribution
Company to distribute the Bible Programs. J/G Distribution Company was formed
in June 1992 and the Partnership granted it the sole and exclusive right to
exhibit and distribute, and to license others to exhibit and distribute, the
Bible Programs in all markets, all languages, and all media in perpetuity. J/G
Distribution Company holds the copyright for the benefit of the Partnership (50
percent interest) and GoodTimes (50 percent interest). J/G Distribution Company
is currently distributing the Bible Programs in the retail home video market.
As of September 30, 1997, gross sales made by J/G Distribution Company totaled
$2,158,272, of which $1,079,136 has been retained by J/G Distribution Company
for its fees and marketing costs, with the remaining $1,079,136 belonging 50
percent to the Partnership and 50 percent to GoodTimes. Additionally, $250,000
was received directly by the Partnership as its share of the initial license fee
from A&E. As of September 30, 1997, the Partnership had received both the
$539,568 from J/G Distribution and the $250,000 from A&E.
In 1994, J/G Distribution Company and Jones Interactive, Inc. ("JII"), an
affiliate of the General Partner, entered into an agreement to produce a CD-ROM
version of the Bible Programs. No Partnership funds were utilized in the
production of the CD-ROM version; however, after production costs, distribution
fees and costs associated with distribution are recovered, five percent of net
revenues (as defined in the agreement) will flow to the Partnership. Revenue
proceeds to be received by the Partnership under this agreement, if any, are not
anticipated to be significant. The production was done on two separate discs,
one for the New Testament, which was completed in the third quarter of 1995, and
a second disc for the Old Testament, which was completed in the first quarter of
1996. The CD-ROM version is being distributed in the United States and Canada
by affiliates of J/G Distribution Company.
The Partnership plans to recover its remaining net investment in the Bible
Programs of $155,953 from net revenues generated from domestic and international
home video markets or from sale of the Partnership's interests in the film to an
unaffiliated third party.
9
<PAGE>
"The Whipping Boy"
----------------
In August 1993, the Partnership acquired the rights to the Newbury Award-winning
book "The Whipping Boy." The project was co-developed by the Partnership and
The Disney Channel and produced by the General Partner and German and French co-
production partners. The completed telefilm was delivered to The Disney Channel
in the second quarter of 1994 and premiered in the North American television
market in July 1994. As of September 30, 1997, the Partnership had invested
$2,661,487 in the film, which included a $468,000 production and overhead fee
payable to the General Partner. The Partnership has received approximately
$2,100,000 from The Disney Channel for licensing certain rights to the film to
The Disney Channel.
The Partnership was responsible for approximately one-half of the $4,100,000
production cost, with the balance of the production budget funded by Gemini
Films and other co-production partners and/or territorial advances from the
film's international distributors. The amount contributed to the production
budget by the Partnership was partially reimbursed by the license advances
totaling $2,100,000 received from the Disney Channel.
Gemini Films will have, in perpetuity, the copyright and all exploitation rights
to the film in German language territories (defined as Germany, Austria, German-
speaking Switzerland and German-speaking Luxembourg). Although these
exploitation rights will remain the sole property of Gemini Films, Gemini Films
will account to the Partnership for any revenue therefrom.
The Partnership will own the worldwide copyright, excluding German language
territories, in perpetuity. Although the Partnership will own all exploitation
rights in all media in North America, which is defined as the United States,
Canada and their respective territories and possessions, the Partnership will
account to Gemini Films for any revenue generated therefrom.
From the movie's North American revenues, the Partnership will first be entitled
to recover its investment plus interest. Thereafter, the Partnership will
receive 90 percent of all North American revenues and Gemini Films will receive
10 percent of such revenues. With respect to international revenues from the
movie's distribution, after Gemini Films recovers $250,000 of its investment in
the movie's production budget, any funded overages and interest out of net
international revenues, the Partnership will receive 20 percent of net
international revenues and Gemini Films will receive 80 percent.
In March 1995, the General Partner, on behalf of the Partnership, entered into
an agreement with an unaffiliated party granting rights to distribute "The
Whipping Boy" in the non-theatrical domestic markets. Non-theatrical markets
include 16mm sales and rentals, in-flight, oil rigs, ships at sea, military
installations, libraries, restaurants, hotels, motels or other institutional or
commercial enterprises. As of September 30, 1997, gross sales made under this
agreement totaled $33,298, of which $8,325 was retained by the distributor for
its fees and the remaining $24,973 was received by the Partnership.
In May 1995, the General Partner, on behalf of the Partnership, entered into a
distribution agreement with an unaffiliated party granting rights to distribute
"The Whipping Boy" in the domestic home video market for a period not to exceed
five years. As of September 30, 1997, net sales earned and received by the
Partnership under this agreement totaled $254,367 of which $182,954 was received
by the Partnership. The remaining $71,413 was received by the Partnership in
October 1997.
The General Partner and Gemini Films have selected Canal Plus Distribution as
the company that will distribute and exploit the movie outside of North America.
Canal Plus Distribution will earn distribution fees of 15 percent of the film's
gross receipts outside of North America, and it will be reimbursed for its
expenses capped at 10 percent of the film's gross receipts outside of North
America (excluding dubbing costs). Canal Plus Distribution will be responsible
for accounting and remitting to Gemini Films the net revenues from the film's
distribution in all markets and in all media outside of North America. Gemini
Films will be responsible for forwarding the Partnership's share of such
revenues within 10 days of receipt of such funds from Canal Plus.
10
<PAGE>
During the fourth quarter of 1996, the General Partner reassessed the
anticipated total gross revenue remaining from the distribution of "The Whipping
Boy" in available international and domestic television and home video markets.
Based on revised estimated television and home video sales projections provided
by an independent consultant, a reduction was made to the Partnership's estimate
of total gross revenue to be recognized from the future distribution of the
film. Accordingly, based on the reduced revenue projections for the film, a
determination was made by the General Partner that the Partnership's net
investment in "The Whipping Boy" of $952,731 exceeded the film's estimated net
realizable value of approximately $375,000 as of December 31, 1996. As a
result, a loss from write-down of film production cost of $575,000 was incurred
to reduce the unamortized cost of the film to its estimated net realizable value
as of December 31, 1996. The film's estimated net realizable value was
calculated based on an estimate of anticipated revenues remaining over the life
of the film from international and domestic television and home video
distribution, net of estimated distribution fees and costs, as of December 31,
1996. These revenue projections were estimated based on the film's prior
distribution history, the remaining international and domestic territories
available to the film for future television and home video distribution, and the
General Partner's and the independent consultant's previous distribution
experience with other films.
The Partnership plans to recover its remaining net investment in this film of
$226,938 primarily from net revenues generated from international and domestic
home video and television distribution or from sale of the Partnership's
interests in the film to an unaffiliated third party.
RESULTS OF OPERATIONS
---------------------
Revenues of the Partnership increased $37,823, from $39,445 to $77,268 for the
three months ended September 30, 1996 and 1997, respectively. This increase was
due primarily to increased domestic home video and non-theatrical sales of "The
Whipping Boy," which totaled $72,555 for the three months ended September 30,
1997 as compared to $5,422 for the same period in 1996. This increase was
partially offset by a decrease in the sales of the "Bible Programs" from $34,023
to $4,713 for the three months ended September 30, 1996 and 1997, respectively.
Revenues of the Partnership decreased $15,840, from $200,526 to $184,686 for the
nine months ended September 30, 1996 and 1997, respectively. This decrease was
primarily the result of decreased sales of the "Bible Programs," which totaled
$33,893 for the nine months ended September 30, 1997 as compared to $93,845 for
the similar period in 1996. This decrease was partially offset by an increase
in the domestic home video and non-threatrical sales of "The Whipping Boy" from
$106,681 to $150,793 for the nine months ended September 30, 1996 and 1997,
respectively.
Filmed entertainment costs increased $41,667, from $35,192 to $76,859 for the
three months ended September 30, 1996 and 1997, respectively, and increased
$14,924, from $166,820 to $181,744 for the nine months ended September 30, 1996
and 1997, respectively. These increases were primarily the result of increased
revenues from "The Whipping Boy" as discussed above. Filmed entertainment costs
are amortized over the life of the film in the ratio that current gross revenues
bear to anticipated total gross revenues.
Distribution fees and expenses decreased $15,211, from $18,367 to $3,156 for the
three months ended September 30, 1996 and 1997, respectively, and decreased
$34,668, from $52,439 to $17,771 for the nine months ended September 30, 1996
and 1997, respectively. These decreases were primarily the result of decreased
home video sales of the "Bible Programs" under the Partnership's distribution
agreement with J/G Distribution Company. Distribution fees and expenses relate
to the compensation due and costs incurred by unaffiliated parties in selling
the Partnership's programming in the domestic and international markets. The
timing and amount of distribution fees and expenses vary depending upon the
individual market in which programming is distributed.
Operating, general and administrative expenses increased $17,259, from $7,243 to
$24,502 for the three months ended September 30, 1996 and 1997, respectively,
and increased $43,111, from $21,054 to $64,165 for the nine months ended
September 30, 1996 and 1997, respectively. These increases were primarily due
to an increase in consulting fees paid relating to revenue projections compiled
for the Partnership's films as well as increased direct costs allocable to the
operations of the Partnership that were charged to the Partnership by the
General Partner in 1997 as compared to 1996. The increase in direct costs
allocable to the Partnership's operations resulted mainly from the increased
involvement of General Partner personnel required to properly administer the
second cycle distribution of the Partnership's programming.
11
<PAGE>
Interest income decreased $10,533, from $18,511 to $7,978 for the three months
ended September 30, 1996 and 1997, respectively, and decreased $38,258, from
$70,511 to $32,253 for the nine months ended September 30, 1996 and 1997,
respectively. These decreases in interest income were due primarily to a $41,196
decrease in interest income recognized during the nine months ended September
30, 1997 as compared to the similar period in 1996 relating to the amortization
of the discount on the promissory notes received from the General Partner as
part of the June 1995 sale of the film "Household Saints." This decrease was
partially offset by higher levels of invested cash balances existing during the
nine months ended September 30, 1997 as compared to the same period in 1996.
12
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Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
13
<PAGE>
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 thereunto duly authorized.
JONES PROGRAMMING PARTNERS 2-A, LTD.
BY: JONES ENTERTAINMENT GROUP, LTD.
General Partner
By: /s/ Steven W. Gampp
--------------------------------------
Steven W. Gampp
Vice President/Finance and Treasurer
(Principal Financial Officer)
Dated: November 14, 1997
14
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