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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 June 30, 2000.
[ ] 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.
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Exact name of registrant as specified in charter
Colorado #84-1088819
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State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, Englewood, Colorado 80112
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Address of principal executive office
(303) 792-3111
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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.
(A Limited Partnership)
INDEX
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position as of
December 31, 1999 and June 30, 2000 3
Unaudited Statements of Operations for the
Three and Six Months Ended June 30, 1999 and 2000 4
Unaudited Statements of Cash Flows for the
Six Months Ended June 30, 1999 and 2000 5
Notes to Unaudited Financial Statements as of
June 30, 2000 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. OTHER INFORMATION 10
</TABLE>
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JONES PROGRAMMING PARTNERS 2-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31, June 30,
ASSETS 1999 2000
----------- -----------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 128,458 $ 187,555
ACCOUNTS RECEIVABLE 51,112 --
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $4,023,368 and $4,023,655 as of
December 31, 1999 and June 30, 2000, respectively (Note 3) 7,883 7,596
----------- -----------
Total assets $ 187,453 $ 195,151
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Accounts payable to affiliates $ 836 $ 18,581
Accrued liabilities 8,193 4,550
Accrued distributions payable to partners -- 141,781
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Total liabilities 9,029 164,912
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PARTNERS' CAPITAL (deficit):
General partner-
Contributed capital 1,000 1,000
Distributions (34,685) (36,103)
Accumulated deficit (11,781) (11,845)
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Total general partner's deficit (45,466) (46,948)
----------- -----------
Limited partners -
Contributed capital, net of offering costs (11,229 units outstanding
as of December 31, 1999 and June 30, 2000) 4,823,980 4,823,980
Distributions (3,433,691) (3,574,054)
Accumulated deficit (1,166,399) (1,172,739)
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Total limited partners' capital 223,890 77,187
----------- -----------
Total partners' capital (deficit) 178,424 30,239
----------- -----------
Total liabilities and partners' capital (deficit) $ 187,453 $ 195,151
=========== ===========
</TABLE>
The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
3
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JONES PROGRAMMING PARTNERS 2-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
1999 2000 1999 2000
-------- -------- -------- --------
<S> <C> <C> <C> <C>
GROSS REVENUES $130,579 $ 12,968 $131,585 $ 13,255
COSTS AND EXPENSES:
Costs of filmed entertainment 623 -- 1,628 287
Distribution fees and expenses 39,703 6,484 39,704 6,484
Operating, general and administrative expenses 10,658 8,803 16,533 16,823
-------- -------- -------- --------
Total costs and expenses 50,984 15,287 57,865 23,594
-------- -------- -------- --------
OPERATING INCOME (LOSS) 79,595 (2,319) 73,720 (10,339)
-------- -------- -------- --------
OTHER INCOME:
Interest income 1,088 2,400 1,873 3,935
-------- -------- -------- --------
Total other income 1,088 2,400 1,873 3,935
-------- -------- -------- --------
NET INCOME (LOSS) $ 80,683 $ 81 $ 75,593 $ (6,404)
======== ======== ======== ========
ALLOCATION OF NET INCOME (LOSS):
General partner $ 807 $ 1 $ 756 $ (64)
======== ======== ======== ========
Limited partners $ 79,876 $ 80 $ 74,837 $ (6,340)
======== ======== ======== ========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 7.11 $ .01 $ 6.66 $ (.56)
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 11,229 11,229 11,229 11,229
======== ======== ======== ========
</TABLE>
The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 2-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
----------------------------
1999 2000
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 75,593 $ (6,404)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Amortization of filmed entertainment costs 1,628 287
Net change in assets and liabilities:
Decrease (increase) in accounts receivable (27,780) 51,112
Increase in accounts payable to affiliates 11,820 17,745
Decrease in accrued liabilities (3,850) (3,643)
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Net cash provided by operating activities 57,411 59,097
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CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (141,781) --
--------- ---------
Net cash used in financing activities (141,781) --
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (84,370) 59,097
CASH AND CASH EQUIVALENTS, beginning of period 128,275 128,458
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 43,905 $ 187,555
========= =========
SUPPLEMENTAL NON-CASH DISCLOSURE
Accrued distributions payable to partners $ -- $ 141,781
========= =========
</TABLE>
The accompanying notes to the unaudited financial statements are
an integral part of these unaudited financial statements.
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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
December 31, 1999 and June 30, 2000, its results of operations for the
three and six month periods ended June 30, 1999 and 2000, and its cash
flows for the six month periods ended June 30, 1999 and 2000. Results of
operations for these periods are not necessarily indicative of results to
be expected for the full year.
(2) TRANSACTIONS WITH AFFILIATED ENTITIES
Jones Entertainment Group, Ltd. ("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 $1,213 and $1,266 to the
Partnership for direct expenses to the Partnership for the three months
ended June 30, 1999 and 2000, respectively. For the six month periods ended
June 30, 1999 and 2000, $3,375 and $4,976, 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. In June 1998, the Partnership fully amortized its net
investment in this film. From inception to June 30, 2000, the Partnership
has recognized $2,022,493 of revenue from this film, of which $895,205 was
retained by the distributors of the film for their fees and marketing costs
and $1,127,288 was received by the Partnership as of June 30, 2000.
"THE WHIPPING BOY"
In August 1993, the Partnership acquired the film 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 June 30, 2000, 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. From inception to June 30, 2000, the
Partnership has recognized $2,276,669 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 $176,669,
$8,497 has been retained by the distributors of the film for their fees and
6
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marketing costs and $168,172 has been received by the Partnership as of
June 30, 2000. The Partnership's net investment in the film, after
consideration of amortization and writedowns, was $7,596 as of June 30,
2000. The Partnership plans to amortize its remaining investment in this
film from net revenues generated from domestic and international home video
and television markets or recover its remaining investment from the sale of
the Partnership's interests in the film.
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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 and amounts
received from the domestic and international distribution of its programming. As
of June 30, 2000, the Partnership had approximately $188,000 in cash. Cash
generated from operations for the six months ended June 30, 2000 was
approximately $59,000. The Partnership will not invest in any additional
programming projects, but instead will focus on the distribution and sale of its
two existing films.
Given the near completion of the second cycle distribution of the Partnership's
programming, as previously announced, regular quarterly distributions were
suspended beginning with the quarter ended September 30, 1998. However, upon
further evaluation by the General Partner of the cash reserves and cash
operating needs of the Partnership, an additional quarterly cash flow
distribution totaling $141,781 was declared for the three months ended March 31,
1999, and was paid in May 1999. In 2000, upon further evaluation by the General
Partner of the cash reserves and cash operating needs of the Partnership, an
additional quarterly cash flow distribution totaling $141,781 was declared for
the three months ended June 30, 2000, and will be paid in August 2000. The
Partnership will retain a certain level of working capital, including any
necessary reserves, to fund its operating activities. It is anticipated that any
future distributions, if any, will only be made once proceeds are received from
the sale of the Partnership's assets, although the General Partner will continue
to make quarterly evaluations of the Partnership's working capital position and
needs. There is no assurance regarding any future distributions.
The General Partner, on behalf of the Partnership, is currently considering the
sale of the Partnership's interests in its programming projects. If the General
Partner or one of its affiliates exercises its right to purchase the
Partnership's interests in a programming project, however, the sales price for
such a transaction will be at least equal to the average of three independent
appraisals of the programming project's fair market value. The General Partner
has no obligation to purchase any assets of the Partnership, nor is it
anticipated that the General Partner will purchase any of such assets.
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, but
will initiate sales efforts in 2000. The projects may be sold as a group or on a
one on one basis, in the judgment of the General Partner. Any direct costs
incurred by the General Partner on behalf of the Partnership in soliciting and
arranging for the sale, or sales, of the Partnership's programming projects will
be charged to the Partnership. It is anticipated that the net proceeds from the
sale, or sales, of the Partnership's interests in its programming will be
distributed to the partners after such sale. It is probable that the
distributions of the proceeds from the sale or sales of the Partnership's
programming projects, together with all prior distributions paid to the limited
partners, will return to the limited partners less than 70% of their initial
capital contributions 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 so
long as quarterly distributions are suspended. Any cash flow from operating
activities will be primarily generated from the Bible Programs.
8
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RESULTS OF OPERATIONS
Revenues of the Partnership decreased $117,611, from $130,579 to $12,968 for the
three months ended June 30, 1999 and 2000, respectively. Revenues of the
Partnership decreased $118,330, from $131,585 to $13,255 for the six months
ended June 30, 1999 and 2000, respectively. These decreases were primarily the
result of a decrease in royalty revenue received from the distribution of the
Bible Programs for the three and six month periods ended June 30, 2000 as
compared to the same periods in 1999.
Filmed entertainment costs decreased $623, from $623 to $0 for the three months
ended June 30, 1999 and 2000, respectively. Filmed entertainment costs decreased
$1,341, from $1,628 to $287 for the six months ended June 30, 1999 and 2000,
respectively. These decreases were the result of decreased revenues from the
Partnership's programming 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 $33,219, from $39,703 to $6,484 for the
three months ended June 30, 1999 and 2000, respectively. Distribution fees and
expenses decreased $33,220, from $39,704 to $6,484 for the six months ended June
30, 1999 and 2000, respectively. The decrease was primarily the result of the
reduction of distribution fees and expenses for the Bible Programs. 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 the distribution fees and
expenses vary depending upon the individual market in which programming is
distributed.
Operating, general and administrative expenses decreased $1,855, from $10,658 to
$8,803 for the three months ended June 30, 1999 and 2000, respectively.
Operating, general and administrative expenses increased $290, from $16,533 to
$16,823 for the six months ended June 30, 1999 and 2000, respectively. The
decrease for the three month period ended June 30, 2000, compared to the same
period in 1999, was due primarily to a decrease in printing charges. The
increase for the six months ended June 30, 2000, compared to the same period in
1999, resulted primarily from the increase in direct costs allocable to the
Partnership's operations that were charged to the Partnership by the General
Partner and its affiliates for direct time spent on the accounting function of
the Partnership and on preparation of the sale of the Partnership's assets.
Interest income increased $1,312, from $1,088 to $2,400 for the three months
ended June 30, 1999 and 2000, respectively. Interest income increased $2,062,
from $1,873 to $3,935 for the six months ended June 30, 1999 and 2000,
respectively. These increases were the result of higher levels of invested cash
balances in the three and six month periods ended June 30, 2000 as compared to
the same periods in 1999.
Limited Partners' net income per partnership unit changed $(7.10), from $7.11 to
$.01 for the three months ended June 30, 1999 and 2000, respectively. Limited
Partners' net income (loss) per partnership unit changed $(7.22), from $6.66 to
$(.56) for the six months ended June 30, 1999 and 2000, respectively. These
changes were due to the results of operations as discussed above.
9
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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
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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/ Timothy J. Burke
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Timothy J. Burke
Vice President
By: /s/ Barbara K. Gutierrez
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Barbara K. Gutierrez
Chief Accounting Officer
(Principal Accounting Officer)
Dated: August 14, 2000
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