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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 MARCH 31, 2000.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from to .
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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 (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
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JONES PROGRAMMING PARTNERS 2-A, LTD.
(A Limited Partnership)
INDEX
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<CAPTION>
Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position as of
December 31, 1999 and March 31, 2000 3
Unaudited Statements of Operations for the
Three Months Ended March 31, 1999 and 2000 4
Unaudited Statements of Cash Flows for the
Three Months Ended March 31, 1999 and 2000 5
Notes to Unaudited Financial Statements as of
March 31, 2000 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. OTHER INFORMATION 10
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JONES PROGRAMMING PARTNERS 2-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
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<CAPTION>
December 31, March 31,
ASSETS 1999 2000
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CASH AND CASH EQUIVALENTS $ 128,458 $ 178,671
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 March 31, 2000, respectively (Note 3) 7,883 7,596
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Total assets $ 187,453 $ 186,267
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Accounts payable to affiliates $ 836 $ 9,803
Accrued liabilities 8,193 4,525
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Total liabilities 9,029 14,328
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PARTNERS' CAPITAL (DEFICIT):
General partner-
Contributed capital 1,000 1,000
Distributions (34,685) (34,685)
Accumulated deficit (11,781) (11,846)
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Total general partner's deficit (45,466) (45,531)
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Limited partners -
Contributed capital, net of offering costs (11,229 units outstanding
as of December 31, 1999 and March 31, 2000) 4,823,980 4,823,980
Distributions (3,433,691) (3,433,691)
Accumulated deficit (1,166,399) (1,172,819)
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Total limited partners' capital 223,890 217,470
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Total partners' capital (deficit) 178,424 171,939
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Total liabilities and partners' capital (deficit) $ 187,453 $ 186,267
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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 OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
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1999 2000
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<S> <C> <C>
GROSS REVENUES $ 1,005 $ 287
COSTS AND EXPENSES:
Costs of filmed entertainment 1,005 287
Operating, general and administrative expenses 5,875 8,020
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Total costs and expenses 6,880 8,307
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OPERATING LOSS (5,875) (8,020)
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OTHER INCOME:
Interest income 785 1,535
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Total other income 785 1,535
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NET LOSS $ (5,090) $ (6,485)
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ALLOCATION OF NET LOSS:
General Partner $ (51) $ (65)
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Limited Partners $ (5,039) $ (6,420)
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NET LOSS PER LIMITED PARTNERSHIP UNIT $ (.45) $ (.57)
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WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 11,229 11,229
======== ========
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The accompanying notes to these 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
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<CAPTION>
For the Three Months
Ended March 31,
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1999 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(5,090) $ (6,485)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Amortization of filmed entertainment costs 1,005 287
Net change in assets and liabilities:
Decrease in accounts receivable 62,588 51,112
Decrease in accrued liabilities (4,075) (3,668)
Increase (decrease) in accounts payable to affiliates (106) 8,967
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Net cash provided by operating activities 54,322 50,213
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INCREASE IN CASH AND CASH EQUIVALENTS 54,322 50,213
CASH AND CASH EQUIVALENTS, beginning of period 128,275 128,458
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CASH AND CASH EQUIVALENTS, end of period $182,597 $ 178,671
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The accompanying notes to the unaudited financial statements
are an integral part of these unaudited financial statements.
</TABLE>
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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 March 31,
2000 and its results of operations and its cash flows for the three
month periods ended March 31, 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 $2,162 and $3,710 to the Partnership for direct expenses to the
Partnership for the three months ended March 31, 1999 and 2000,
respectively.
(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 March 31, 2000, the Partnership has recognized
$2,009,525 of revenue from this film, of which $888,720 was retained by
the distributors of the film for their fees and marketing costs and
$1,120,805 was received by the Partnership as of March 31, 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 March 31, 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 March 31, 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 marketing costs and $168,172 has been received by the Partnership
as of March 31, 2000. The Partnership's net
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investment in the film, after consideration of amortization and
writedowns, was $7,596 as of March 31, 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.
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 and amounts
received from the domestic and international distribution of its programming. As
of March 31, 2000, the Partnership had approximately $179,000 in cash. Cash
generated from operations for the three months ended March 21, 2000 was
approximately $50,000. 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. 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 the current timing of 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.
RESULTS OF OPERATIONS
Revenues of the Partnership decreased $718, from $1,005 to $287 for the three
months ended March 31, 1999 and 2000, respectively. This decrease was the result
of a decrease in the distribution of "The Whipping Boy" for the three months
ended March 31, 1999 as compared to the similar period in 1999.
Filmed entertainment costs decreased $718, from $1,005 to $287 for the three
months ended March 31, 1999 and 2000, respectively. This decrease was the result
of decreased revenues from the Partnership's programming as discussed above.
8
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Filmed entertainment costs are amortized over the life of the film in the ratio
that current gross revenues bear to anticipated total gross revenues.
Operating, general and administrative expenses increased $2,145, from $5,875 to
$8,020 for the three months ended March 31, 1999 and 2000, respectively. This
increase was due primarily to increased direct costs allocable to the operations
of the Partnership that were charged to the Partnership by affiliates of the
General Partner for the three months ended March 31, 2000 as compared to the
similar period in 1999. The increase in direct costs allocable to the
Partnership's operations resulted mainly from the increase in direct time spent
by the affiliates of the General Partner on the accounting and administrative
functions of the Partnership.
Interest income increased $750, from $785 to $1,535 for the three months ended
March 31, 1999 and 2000, respectively. This increase was the result of higher
levels of invested cash balances in the three months ended March 31, 2000 as
compared to the same period in 1999.
Limited Partners' net loss per partnership unit changed $(.12), from $(.45) to
$(.57) for the three months ended March 31, 1999 and 2000, respectively. This
change was due to the result 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
10
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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/ Thom Anema
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Thom Anema
Vice President/Finance and Treasurer
(Principal Financial Officer)
Dated: May 15, 2000
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 178,671
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 186,267
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 186,267
<CURRENT-LIABILITIES> 14,328
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 171,939
<TOTAL-LIABILITY-AND-EQUITY> 186,267
<SALES> 0
<TOTAL-REVENUES> 287
<CGS> 0
<TOTAL-COSTS> (8,307)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,535
<INCOME-PRETAX> (6,485)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,485)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,485)
<EPS-BASIC> (.57)
<EPS-DILUTED> (.57)
</TABLE>
