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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to ______
Commission file number: 0-19075
JONES PROGRAMMING PARTNERS 1-A, LTD.
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(Exact name of registrant as specified in its charter)
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<S> <C>
Colorado 84-1088820
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(State of Organization) (IRS Employer Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 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
--- ---
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
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DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
Jones Programming Partners 1-A, Ltd. (the "Partnership") is a Colorado
limited partnership that was formed in April 1989 pursuant to the public
offering of limited partnership interests in the Jones Programming Partners
Limited Partnership Program. Jones Entertainment Group, Ltd., a Colorado
corporation, is the general partner of the Partnership (the "General Partner").
The Partnership was formed to acquire, develop and own rights to produce and
distribute original programming (the "Programming"). The Partnership generates
revenues from the licensing of the Programming. Available cash not distributed
to the partners is expected to be invested in additional Programming projects
that meet the investment objectives of the Partnership.
The Partnership engages primarily in the business of acquiring,
developing, producing and distributing original programming ("Programming") to
be owned by the Partnership. As of December 31, 1994, the Partnership had
three Programming projects: "The Little Kidnappers," "The Story Lady" and
"Curacao." Following is a description of these Programming projects.
The Little Kidnappers. In January 1990, the General Partner, on
behalf of the Partnership, entered into an agreement with Jones Maple Leaf
Productions ("Maple Leaf") to produce a full-length feature film for television
entitled "The Little Kidnapers." The total film cost was approximately
$3,200,000, and the Partnership has invested its share of approximately
$2,794,000, which included a production and overhead fee of $300,000 paid to
the General Partner. At December 31, 1994, the Partnership's net investment in
the film, after consideration of amortization, was $132,701. From inception to
December 31, 1994, the Partnership has recognized approximately $2,877,000 of
revenue from this film.
The Partnership advanced funds as production advances to Maple Leaf to
complete the film. In return for such production advances, the Partnership
received all distribution rights in all markets except Canada in perpetuity.
The General Partner, on behalf of the Partnership, licensed the film to The
Disney Channel and Maple Leaf licensed the film to the Canadian Broadcasting
Corporation. Aggregate license fees of approximately $1,365,000 were received
from these licensees. The original Disney Channel license expired in September
1993. The General Partner has relicensed the film to The Disney Channel for an
additional license period of five years beginning January 1, 1994, for an
additional fee of $300,000. As of December 31, 1994, the Partnership had
received $200,000 of such fee from The Disney Channel and is expected to
receive the remaining $100,000 in 1996. The Canadian Broadcasting Corporation
license expired in the second quarter of 1994.
In April 1991, the General Partner, on behalf of the Partnership,
entered into a distribution agreement with an unaffiliated party that purchased
the rights to distribute "The Little Kidnappers" in the non-theatrical domestic
markets (defined as 16 mm sales and rentals, in-flight, oil rigs, ships at sea,
military installations, libraries, restaurants, hotels, motels or other
institutional or commercial enterprises). At December 31, 1994, gross sales
made under this arrangement totaled $94,190 of which $23,548 was retained by
the distributor for its fees. The remaining $70,642 has been received by the
Partnership. In July 1991, the General Partner, on behalf of the Partnership,
entered into an agreement with another unaffiliated party that purchased the
rights to distribute "The Little Kidnappers" in the domestic home video market
for a period not to exceed five years. Under this agreement, the Partnership
is to receive a guaranteed minimum of $500,000. The Partnership received
$100,000 upon execution of the agreement and delivery of the film, which
occurred in October 1991. The Partnership discounted the remaining $400,000 at
an imputed interest rate of 8%, which created a discount of $79,157. This
discount is being amortized over a four-year period. The Partnership received
$50,000 in October 1992, $75,000 in October 1993, $75,000 in October 1994 and
is scheduled to receive $200,000 in October 1995 as full payment for the
$500,000 domestic home video guarantee.
In the third quarter of 1990, the General Partner, on behalf of the
Partnership, entered into a distribution agreement with an unaffiliated party,
granting the rights to distribute "The Little Kidnappers" in international
television and international home video markets for a period of five years,
which ends in November 1996. At December 31, 1994, gross sales made under this
arrangement totaled $1,133,123, of which $351,608 was retained
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by the distributor for its fees and marketing costs. The remaining $781,515
will be paid to the Partnership as collected by the distributor. At December
31, 1994, the Partnership had received $742,795 of such amount. The remaining
$38,720 will be paid to the Partnership over the next three to twenty-four
months as collected by the distributor. Such collections by the distributor
will generally occur as the film becomes available for exhibition within the
respective territories. The Partnership plans to recover its remaining
investment in this film from net revenues generated in remaining worldwide
television and home video markets.
The Story Lady. In 1991, the General Partner, on behalf of the
Partnership, entered into an agreement with NBC Productions, Inc. ("NBC") for
the production of a full-length made-for-television film entitled "The Story
Lady." The total cost of the film was approximately $4,300,000, and the
Partnership has invested its share of approximately $1,183,000 in return for
world-wide distribution rights to this film. Included in the total amount
invested in "The Story Lady" is a production and overhead fee of $120,000 paid
to the General Partner. At December 31, 1994, the Partnership's net investment
in the film, after consideration of amortization, was $63,064. From inception
to December 31, 1994, the Partnership has recognized approximately $1,398,000
of revenue from this film.
In 1992, the General Partner, on behalf of the Partnership, entered
into a distribution agreement with an unaffiliated party, granting rights to
distribute "The Story Lady" in the non-theatrical domestic markets. At
December 31, 1994, gross sales made under this arrangement totaled $264,584, of
which $66,146 was retained by the distributor for its fees. The remaining
$198,438 has been received by the Partnership. The General Partner, on behalf
of the Partnership, has entered into an agreement with The Disney Channel,
granting The Disney Channel exclusive domestic television rights to the film
for one year, from June 1994 until June 1995, for a license fee of $40,000. Of
this license fee, $26,667 was received in July 1994, with the remaining balance
of $13,333 due in the second quarter of 1995. In addition, the film was
distributed in the domestic home video market by the General Partner and a
third party consultant beginning in the second quarter of 1994. At December
31, 1994, gross sales under this arrangement totaled $159,317, which were
applied towards the General Partner's recoupment of its distribution costs.
Any additional sales, net of fees, will flow to the Partnership.
The Partnership has sub-licensed certain distribution rights to a
distribution affiliate of NBC for approximately eight years, after which these
rights will revert to the Partnership. At December 31, 1994, gross sales from
the distribution of "The Story Lady" totaled $1,061,013, of which $281,244 was
retained by the distributor for its fees and marketing costs, with the
remaining $779,769 belonging to the Partnership. At December 31, 1994, the
Partnership had received $746,815 of such amounts. The remaining $32,954 will
be paid to the Partnership over the next three to twenty-four months as
collected by the distributor.
Curacao. In October 1992, the General Partner, on behalf of the
Partnership, entered into an agreement with Showtime Networks, Inc.
("Showtime") for the production of a full-length made-for-television film
entitled "Curacao." The total cost of the film was approximately $4,432,000.
In addition to the costs of production, the Partnership paid the General
Partner $500,000 as a production and overhead fee for services rendered in
connection with arranging the Showtime presale and supervising production of
this picture. At December 31, 1994, the Partnership's net investment in the
film, after consideration of amortization, was $1,255,123. From inception to
December 31, 1994, the Partnership has recognized approximately $3,734,000 of
revenue from this film.
The Partnership has received license fees and a home video advance
totaling $2,650,000 from Showtime in return for granting Showtime the right to
market domestic pay television rights to the film for 42 months and for the
right to market domestic home video rights for seven years. Home video
revenues in excess of $875,000 will be shared 50/50 between the Partnership and
Showtime until Showtime has received $1,875,000 after which the Partnership
will receive all of the home video revenues. It is unlikely that the
Partnership will receive any revenues from the domestic home video distribution
of "Curacao."
In May 1993, the General Partner, on behalf of the Partnership,
entered into a distribution agreement with an unaffiliated party, granting
rights to distribute "Curacao" in the non-theatrical domestic markets. At
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December 31, 1994, gross sales made under this arrangement totaled $117,358, of
which $29,340 was retained by the distributor for its fees. The remaining
$88,018 has been received by the Partnership.
The Partnership has contracted with an unaffiliated international
sales agent to market all other rights worldwide. The General Partner has
approved an agreement negotiated by the international sales agent with an
unaffiliated party to market international theatrical and home video rights.
The terms of such agreement provide for an advance payment of $950,000 against
international theatrical and home video revenues in return for the exclusive
rights to distribute the film in these media for 10 years. This unaffiliated
party is entitled to a 35 percent distribution fee on net theatrical rentals
and will pay the Partnership a royalty equal to 30 percent of home video sales.
The net receipts to the Partnership will be reduced by fees due to the
international sales agent. The General Partner expects the Partnership to
receive these proceeds over the next twelve months. At December 31, 1994, the
Partnership had recorded international gross revenues of $965,846, of which
$295,640 was retained by the distributor for its fees and marketing costs, and
the remaining $670,206 had been received by the Partnership at December 31,
1994.
During 1994, the Partnership declared distributions totaling $643,588.
At December 31, 1994, all of these distributions had been paid except for
$160,897, which was paid in February 1995. These distributions were made using
cash on hand, interest income and cash provided by operating activities.
Distributions are expected to continue, although no determination has been made
regarding any specific level of future distributions. Distributions reduce the
financial flexibility of the Partnership. See Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations.
The General Partner, on behalf of the Partnership, continues to seek
additional licensing agreements for the distribution of the Partnership's
filmed entertainment. The Partnership will seek to recover its investment in
filmed entertainment by relicensing its assets through international sales,
domestic cable or syndication, home video and ancillary markets.
The Partnership is in competition with many other organizations that
acquire, develop, produce and exploit programming, many of which have far
greater financial and personnel resources. These include the major film
studios, independent production companies, cable television networks and
distributors. Also, there is substantial competition in the industry for a
limited number of writers, producers, directors, actors and properties that are
able to attract major distribution in the various media and markets throughout
the world. Television itself competes with many other forms of entertainment.
Many writers, performers, directors and technical personnel who may be involved
in the Programming are members of guilds or unions that bargain collectively
with producers on an industry-wide basis from time to time. Any work stoppages
or other labor difficulties could significantly delay or stop the production of
Programming, which may result in increased production costs and delayed or
reduced returns to investors.
There is intense competition within the television programming
industry for exhibition time on cable television networks, domestic broadcast
networks, independent television stations and foreign television. In addition
to this substantial competition, not all productions are licensed in all media.
In recent years, the number of television production companies and the volume
of programming have increased, thereby intensifying this competition. The
Programming will be based on ideas, scripts and screenplays approved for
production by the General Partner. Acceptance of the Programming in certain
distribution media may be limited and the Programming will compete with other
types of television programming in all distribution media.
ITEM 2. PROPERTIES
See Item 1.
ITEM 3. LEGAL PROCEEDINGS
None.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests and it is not expected that such a market
will develop in the future. As of February 15, 1995, the approximate number of
equity security holders in the Partnership was 723.
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ITEM 6. SELECTED FINANCIAL DATA
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For the Year Ended December 31,
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1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C>
Gross Revenues $ 413,756 $4,839,139 $ 865,228 $ 478,743 $1,413,022
Costs of Filmed Entertainment 345,428 4,622,494 746,550 445,956 1,297,777
Distribution Fees and Expenses 62,209 543,763 273,040 5,355 171,900
Operating, General and Administrative
Expenses 38,723 38,519 48,173 21,280 40,459
Operating Income (Loss) (32,604) (365,637) (202,535) 6,152 (97,114)
Net Income (Loss) (9,389) (360,874) (124,368) 169,036 (67,680)
Net Income (Loss) per Limited
Partnership Unit (.73) (28.04) (9.66) 13.13 (6.81)
Weighted Average Number of Limited
Partnership Units Outstanding 12,743 12,743 12,743 12,743 9,843
General Partner's Deficit (30,671) (24,141) (14,096) (6,577) (2,603)
Limited Partners' Capital 2,360,143 3,006,590 4,001,007 4,745,354 5,138,763
Total Assets 2,498,982 3,374,770 6,972,638 5,772,382 5,445,094
Debt - - - - -
General Partner Advances 1,100 225,418 292,055 138,685 179,113
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
1994 Compared to 1993
Revenues of the Partnership decreased $4,425,383, from $4,839,139 in 1993
to $413,756 in 1994. This decrease was primarily due to the recognition of the
license fee revenue for "Curacao" of $2,650,000 and international home video
revenues of $960,000 in 1993 and the fact that the Partnership received no
similar license fee for any of its programming during 1994. International and
domestic sales of "Curacao" decreased $3,505,776, from $3,620,000 in 1993 to
$114,224 in 1994. International and domestic sales of "The Story Lady"
decreased $665,951, from $783,384 for 1993 as compared to $117,433 in 1994.
International and domestic sales for "The Little Kidnappers" decreased
approximately $253,656, from $435,755 in 1993 to $182,099 in 1994.
Filmed entertainment costs decreased $4,277,066, from $4,622,494 in 1993
to $345,428 in 1994. This decrease was the result of the decrease in revenues
as mentioned above because 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 $481,554, from $543,763 in 1993
to $62,209 in 1994. This decrease was the result of decreases in domestic and
international sales of the Partnership's programming. These distribution fees
and expenses relate to the compensation due and costs incurred by unaffiliated
parties in selling the Partnership's programming in the international
television and home video markets.
Interest income increased $18,452, from $4,763 in 1993 to $23,215 in 1994.
This increase in interest income was the result of higher average cash balances
invested during 1994 as compared to average balances invested in 1993.
The Partnership recognized a net loss of $360,874 in 1993 compared to a
net loss of $9,389 in 1994. This decrease in net loss is primarily due to a
decrease in costs of filmed entertainment and distribution fees and expenses
exceeding the decrease in revenues and also due to an increase in interest
income.
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1993 Compared to 1992
Revenues of the Partnership increased $3,973,911, from $865,228 in 1992 to
$4,839,139 in 1993. This increase was primarily the result of foreign and
domestic sales of "The Story Lady" being recognized during 1993 over the amount
recognized in 1992, and the recognition of license fee revenue of $2,650,000
and international theatrical and home video sales totaling $960,000 for
"Curacao" in 1993.
Filmed entertainment costs increased $3,875,944, from $746,550 in 1992 to
$4,622,494 in 1993. This change was the result of the change in revenues as
mentioned above. Filmed entertainment costs are amortized over the life of each
film in the ratio that current gross revenues bear to anticipated total gross
revenues. Filmed entertainment costs as a percentage of revenue increased in
1993 compared to 1992 due to the mix of revenues generated by the films.
Distribution fees and expenses increased $270,723, from $273,040 in 1992
to $543,763 in 1993. These distribution fees and expenses relate to the
compensation due and costs incurred by unaffiliated parties in selling the
Partnership's film productions in the international television and home video
markets.
Operating, general and administrative expenses decreased $9,654, from
$48,173 in 1992 to $38,519 in 1993. This decrease was primarily due to a
decrease in the direct expense allocable to the operation of the Partnership
from the General Partner.
Interest income decreased $73,404, from $78,167 in 1992 to $4,763 in 1993.
This decrease in interest income was the result of lower average cash balances
invested during 1993 as compared to average balances invested in 1992.
Financial Condition
Jones Programming Partners 1-A, Ltd. was formed on April 17, 1989. The
principal objectives of the Partnership are to own a group of programming
assets and to license the rights to the programming on television and in other
media throughout the world. The Partnership intends to achieve these
objectives by producing or acquiring movies, mini-series, events, specials and
other types of programming.
Capital Resources
The Partnership's potential sources of capital are funds to be received
from the domestic and international distribution of the Partnership's
programming.
The Partnership received limited partner subscriptions totaling
$6,371,500, of which $5,495,419 was available for investment after payment of
sales commissions and other organizational and offering costs. The Partnership
has invested all of its net offering proceeds in film projects and at December
31, 1994 had $668,088 in cash. It is not anticipated that the Partnership will
invest in any additional programming projects, but instead will focus on the
distribution of its existing projects.
The Partnership had outstanding amounts receivable from unaffiliated
distributors totaling approximately $385,000 at December 31, 1994.
Approximately $185,000 of this amount will be paid to the Partnership as
collected by the distributors and $200,000 of this amount, which represents the
final payment for the domestic home video rights for "The Little Kidnappers,"
is due in October 1995.
Liquidity
The Partnership's principal sources of liquidity are amounts to be
received from the domestic and international distribution of its programming.
During 1990, the Partnership invested approximately $2,794,000 in a film
entitled "The Little Kidnappers." Network presales to The Disney Channel and
the Canadian Broadcasting Corporation totaling approximately $1,365,000 were
collected by the Partnership upon delivery. The Partnership received $200,000
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from The Disney Channel and is expected to receive an additional $100,000 in
1996 for the relicensing of "The Little Kidnappers" to The Disney Channel for
an additional five years beginning January 1, 1994.
In April 1991, the General Partner, on behalf of the Partnership, entered
into a distribution agreement with an unaffiliated party, granting rights to
distribute "The Little Kidnappers" in the non-theatrical domestic markets
(defined as 16 mm sales and rentals, in-flight, oil rigs, ships at sea,
military installations, libraries, restaurants, hotels, motels, or other
institutional or commercial enterprises). At December 31, 1994, gross sales
made under this arrangement totaled $94,190, of which $23,548 was retained by
the distributor for its fees. The remaining $70,642 has been received by the
Partnership. In July 1991, the General Partner, on behalf of the Partnership,
entered into an agreement with another unaffiliated party that purchased the
rights to distribute "The Little Kidnappers" in the domestic home video market
for a period not to exceed five years. Under this agreement, the Partnership
is to receive a guaranteed minimum of $500,000. The Partnership received
$100,000 upon the execution of the agreement and delivery of the film, which
occurred in October 1991. The Partnership received $50,000 in October 1992,
$75,000 in October 1993, $75,000 in October 1994, and is scheduled to receive
$200,000 in October 1995 as full payment for the $500,000 domestic home video
guarantee.
In the third quarter of 1990, the General Partner, on behalf of the
Partnership, entered into a distribution agreement with an unaffiliated party,
granting rights to distribute "The Little Kidnappers" in international
television and international home video markets for a period not to exceed ten
years. At December 31, 1994, gross sales made under this arrangement totaled
$1,133,123, of which $351,608 was retained by the distributor for its fees and
marketing costs. The remaining $781,515 will be paid to the Partnership as
collected by the distributor. At December 31, 1994, the Partnership had
received $742,795 of such amount. The remaining $38,720 will be paid to the
Partnership over the next three to twenty-four months as collected by the
distributor. Such collections by the distributor will generally occur as the
film becomes available for exhibition within the respective territories. The
Partnership plans to recover its remaining investment in this film from net
revenues generated in remaining worldwide television and home video markets.
In 1991, the General Partner, on behalf on the Partnership, entered into
an agreement with NBC Productions, Inc. for the production of a full-length
made-for-television film entitled "The Story Lady." The total cost of the
film was approximately $4,300,000, and the Partnership has invested its share
of approximately $1,183,000 in return for worldwide distribution rights to this
film.
In 1992, the General Partner, on behalf of the Partnership, entered into a
distribution agreement with an unaffiliated party, granting rights to
distribute "The Story Lady" in the non-theatrical domestic markets. At
December 31, 1994, gross sales made under this arrangement totaled $264,584, of
which $66,146 was retained by the distributor for its fees. The remaining
$198,438 has been received by the Partnership. The General Partner, on behalf
of the Partnership, has entered into an agreement with The Disney Channel,
granting The Disney Channel exclusive domestic television rights to the film
for one year, from June 1994 until June 1995, for a license fee of $40,000. Of
this license fee, $26,667 was received in July 1994, with the remaining balance
of $13,333 due in the second quarter of 1995. In addition, the film was
distributed in the domestic home video market by the General Partner and a
third party consultant beginning in the second quarter of 1994. At December
31, 1994, gross sales under this arrangement totaled $159,317, which were
applied towards the General Partner's recoupment of its distribution costs.
Any additional sales, net of fees, will flow to the Partnership.
The Partnership has sub-licensed certain international distribution rights
to a distribution affiliate of NBC for approximately eight years, after which
these rights will revert to the Partnership. Distribution revenues from these
markets will be shared according to a formula, depending upon area, gross
receipts, and other factors. At December 31, 1994, gross sales made by this
distributor totaled $1,061,013, of which $281,244 will be retained by the
distributor for its fees and marketing costs, with the remaining $779,769
belonging to the Partnership. At December 31, 1994, the Partnership had
received $746,815 of such amounts. The remaining $32,954 will be paid to the
Partnership over the next three to twenty-four months as collected by the
distributor.
In October 1992, the General Partner, on behalf of the Partnership,
entered into an agreement with Showtime Networks, Inc. ("Showtime") for the
production of a full-length made-for-television film entitled "Curacao." The
total cost of the film was approximately $4,432,000. In addition to the costs
of production, the
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Partnership paid the General Partner $500,000 as a production and overhead fee
for services rendered in connection with arranging the Showtime presale and
supervising production of this picture.
The Partnership has received license fees and other consideration of
$2,650,000 from Showtime in return for granting Showtime the right to market
domestic pay television rights to the film for 42 months and for the right to
market domestic home video rights for seven years. Home video revenues in
excess of $875,000 will be shared 50/50 between the Partnership and Showtime
until Showtime has received $1,875,000 after which the Partnership will receive
all of the home video revenues. It is unlikely that the Partnership will
receive any revenues from the domestic home video distribution of "Curacao."
In May 1993, the General Partner, on behalf of the Partnership, entered
into a distribution agreement with an unaffiliated party, granting rights to
distribute "Curacao" in the non-theatrical domestic markets. At December 31,
1994, gross sales made under this arrangement totaled $117,358, of which
$29,340 was retained by the distributor for its fees. The remaining $88,018
has been received by the Partnership.
The Partnership has contracted with an unaffiliated international sales
agent to market all other rights worldwide to "Curacao." The General Partner
has approved an agreement negotiated by the international sales agent with an
unaffiliated party to market international theatrical and home video rights.
The terms of such agreement provides for an advance payment of $950,000 against
international theatrical and home video revenues in return for the exclusive
rights to distribute the film in the above media for 10 years. This
unaffiliated party is entitled to a 35 percent distribution fee on net
theatrical rentals and will pay the Partnership a royalty equal to 30 percent
of home video sales. The net receipts to the Partnership will be reduced by
fees due to the international sales agent. At December 31, 1994, the
Partnership had recorded international gross revenues of $965,846, of which
$295,640 was retained by the distributor for its fees and marketing costs, and
the remaining $670,206 had been received by the Partnership at December 31,
1994.
In December 1993, the Partnership declared a distribution of $160,897,
which was paid to the partners in February 1994. During 1994, the Partnership
declared distributions totaling $643,588, of which $160,897 had not been paid
to the partners as of December 31, 1994, and which was paid to the partners in
February 1995. These distributions were made using cash on hand, interest
income and cash provided by operating activities. Distributions are expected
to continue, although no determination has been made regarding any specific
level of future distributions. Distributions reduce the financial flexibility
of the Partnership.
The General Partner believes that the Partnership has, and will continue
to have, sufficient sources of capital available to conduct its operations and
to meet its obligations during 1995.
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Item 8. Financial Statements
JONES PROGRAMMING PARTNERS 1-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
INDEX
Page
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Report of Independent Public Accountants 11
Balance Sheets 12
Statements of Operations 14
Statements of Partners' Capital (Deficit) 15
Statements of Cash Flows 16
Notes to Financial Statements 17
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Jones Programming Partners 1-A, Ltd.:
We have audited the accompanying balance sheets of Jones Programming
Partners 1-A, Ltd. (a Colorado limited partnership) as of December 31, 1994
and 1993, and the related statements of operations, partners' capital (deficit)
and cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the General
Partner's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Jones Programming Partners
1-A, Ltd. as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 22, 1995.
11
<PAGE> 12
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
---------------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
ASSETS
------
CASH AND CASH EQUIVALENTS $ 668,088 $ 834,066
RECEIVABLES:
Foreign income receivable 185,007 489,410
Domestic income receivable, net of unamortized
discount of $7,858 and $28,202 at December 31, 1994
and 1993, respectively 192,142 246,798
INVESTMENT/ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $7,458,205 and $7,112,777
at December 31, 1994 and 1993, respectively 1,450,888 1,787,342
OTHER ASSETS 2,857 17,154
--------- ---------
Total assets $2,498,982 $3,374,770
========= =========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
12
<PAGE> 13
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------------------------------------- ----------- ------------
<S> <C> <C>
LIABILITIES:
Accounts payable to affiliates $ 1,100 $ 225,418
Accrued distributions payable to partners 160,897 160,897
Accrued liabilities 7,513 6,006
---------- ----------
Total liabilities 169,510 392,321
---------- ----------
PARTNERS' CAPITAL (DEFICIT):
General Partner -
Contributed capital 1,000 1,000
Distributions (27,959) (21,523)
Accumulated deficit (3,712) (3,618)
---------- ----------
(30,671) (24,141)
---------- ----------
Limited Partners -
Contributed capital
(12,743 units outstanding at December 31, 1994
and 1993) 5,459,327 5,459,327
Distributions (2,767,910) (2,130,758)
Accumulated deficit (331,274) (321,979)
---------- ----------
2,360,143 3,006,590
---------- ----------
Total liabilities and partners' capital
(deficit) $ 2,498,982 $ 3,374,770
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
13
<PAGE> 14
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------------
1994 1993 1992
-------------- -------------- ---------------
<S> <C> <C> <C>
GROSS REVENUES $ 413,756 $ 4,839,139 $ 865,228
COSTS AND EXPENSES:
Costs of filmed entertainment 345,428 4,622,494 746,550
Distribution fees and expenses 62,209 543,763 273,040
Operating, general and administrative
expenses 38,723 38,519 48,173
-------- ----------- ----------
OPERATING LOSS (32,604) (365,637) (202,535)
-------- ----------- ----------
INTEREST INCOME 23,215 4,763 78,167
-------- ----------- ----------
NET LOSS $ (9,389) $ (360,874) $ (124,368)
======== ========== ==========
ALLOCATION OF NET LOSS:
General Partner $ (94) $ (3,609) $ (1,244)
======== ========== ==========
Limited Partners $ (9,295) $ (357,265) $ (123,124)
======== ========== ==========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (.73) $ (28.04) $ (9.66)
========= ========== ==========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743 12,743
========= ========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
14
<PAGE> 15
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------------
1994 1993 1992
-------------- -------------- ---------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (24,141) $ (14,096) $ (6,577)
Distributions (6,436) (6,436) (6,275)
Net loss for year (94) (3,609) (1,244)
---------- --------- ----------
Balance, end of year $ (30,671) $ (24,141) $ (14,096)
========= ========= =========
LIMITED PARTNERS:
Balance, beginning of year $3,006,590 $4,001,007 $4,745,354
Distributions (637,152) (637,152) (621,223)
Net loss for year (9,295) (357,265) (123,124)
--------- --------- ---------
Balance, end of year $2,360,143 $3,006,590 $4,001,007
========= ========= =========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
15
<PAGE> 16
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------------------
1994 1993 1992
--------------- ------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,389) $ (360,874) $ (124,368)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Amortization of filmed entertainment costs 345,428 4,622,494 746,550
Amortization of discount (20,344) (24,507) (26,448)
Decrease (increase) in foreign distribution
receivable, net of distribution fees 304,403 (85,227) (191,397)
Decrease in domestic income receivable 75,000 75,000 50,000
Decrease (increase) in other assets 14,297 (1,380) (15,774)
Increase (decrease) in accounts payable to affiliates (224,318) (66,637) 153,370
Increase (decrease) in trade accounts payable and
accrued liabilities 1,507 (3,644) 9,537
Increase (decrease) in unearned revenue - (2,023,125) 2,023,125
-------- ---------- ----------
Net cash provided by operating activities 486,584 2,132,100 2,624,595
-------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Production advances (8,974) (358,409) (4,597,249)
Distribution rights payable - - (750,000)
Payment of production and overhead fee
to General Partner - (500,000) 500,000
--------- ---------- -----------
Net cash used in investing activities (8,974) (858,409) (4,847,249)
--------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (643,588) (643,588) (627,498)
Increase in accrued distributions to partners - - 16,090
-------- ---------- ----------
Net cash used in financing activities (643,588) (643,588) (611,408)
-------- ---------- ----------
Increase (decrease) in cash and cash equivalents (165,978) 630,103 (2,834,062)
Cash and cash equivalents, beginning of year 834,066 203,963 3,038,025
-------- ---------- ----------
Cash and cash equivalents, end of year $ 668,088 $ 834,066 $ 203,963
======== ========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
16
<PAGE> 17
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS
Jones Programming Partners 1-A, Ltd. (the "Partnership"),
organized in April 1989, is a limited partnership formed under Colorado law to
engage in the business of acquiring, developing and owning rights to and
arranging for the production and licensing of original entertainment
programming. Jones Entertainment Group, Ltd. is the "General Partner" of the
Partnership.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, amounts in banks
and highly liquid investments purchased with a maturity of three months or
less.
Film Revenue Recognition
The Partnership recognizes revenues in accordance with the
provisions of Statement of Financial Accounting Standards No. 53 ("SFAS No.
53"). Revenues from domestic and foreign licensing agreements for programming,
which may include the receipt by the Partnership of non-refundable guaranteed
amounts, are recognized when license fees or other revenues are known and the
film is available for exhibition or telecast, providing other conditions of
sale, as prescribed by SFAS No. 53, have been met. Advances received for
licensing or other purposes prior to exhibition or telecast are deferred and
recognized as revenue when the above conditions are achieved. Distribution
revenue receivable for greater than one year is discounted in the accompanying
financial statements based on the Partnership's imputed cost of borrowing.
Investment/Advances in Film Productions
Investment in film costs consists of advances to production
entities for story rights, production, and film completion costs, and is stated
at the lower of cost or estimated net realizable value. In addition,
production and overhead fees payable to the General Partner have been
capitalized and included as investment in film costs. The investment in film
costs will be amortized in the same ratio that current year gross revenues bear
to total estimated ultimate gross revenues on an individual film basis.
Estimated losses, if any, will be provided for in full when determined by the
General Partner. Repayment of production advances will be applied to reduce
amounts outstanding when received.
Distribution Costs
Distribution fees and distribution expenses incurred in
connection with film distribution in any market are recorded when the related
license fees are recorded as revenue in the Partnership's Statements of
Operations. The Partnership expenses its costs of advertising the first time
the advertising takes place.
(3) CONTRIBUTED CAPITAL
The capitalization of the Partnership is set forth in the
accompanying Statements of Partners' Capital (Deficit). No existing limited
partner is obligated to make any additional contributions to Partnership
capital.
The General Partner purchased its interest in the Partnership by
contributing $1,000 to Partnership capital.
17
<PAGE> 18
Profits, losses and distributions of the Partnership will be
allocated 99 percent to the limited partners and 1 percent to the General
Partner until the limited partners have received distributions equal to 100
percent of their capital contributions plus an annual return thereon of 12
percent, cumulative and non-compounded. Thereafter, profits and distributions
will generally be allocated 80 percent to the limited partners and 20 percent
to the General Partner. Interest income earned prior to the start of the
Partnership's first production was allocated 100 percent to the limited
partners.
(4) TRANSACTIONS WITH THE PARTNERSHIP AND AFFILIATED ENTITIES
The General Partner receives a production and overhead fee for
administering the affairs of the Partnership equal to 12 percent of the lower
of direct costs or budgeted direct costs of each programming project. This fee
is calculated and payable at the time principal photography commences on each
particular project and, in the case of a series, is payable on a per episode
basis. In the past three years, the Partnership paid a $500,000 production and
overhead fee for "Curacao."
The General Partner also is entitled to reimbursement from the
Partnership for its direct and indirect expenses allocable to the operation of
the Partnership, which shall include, but not be limited to, rent, supplies,
telephone, travel, legal expenses, accounting and auditing expenses,
preparation and distribution of reports to investors and salaries of any full
or part-time employees. Although the General Partner is entitled to
reimbursement for all direct and indirect expenses allocable to the
Partnership, for the years ended December 31, 1994, 1993 and 1992, only direct
expenses of $6,535, $3,280 and $11,778, respectively, were charged to the
Partnership.
(5) INVESTMENT/ADVANCES FOR FILM PRODUCTION
"The Little Kidnappers"
In January 1990, the General Partner, on behalf of the
Partnership, entered into an agreement with an affiliated Canadian corporation
to produce a full-length feature film for television entitled "The Little
Kidnappers." The total cost of the film was approximately $3,200,000, and the
Partnership has invested its share of approximately $2,794,000, which included
a production and overhead fee of $300,000 paid to the General Partner. At
December 31, 1994, the Partnership's net investment in the film, after
consideration of amortization, was $132,701. From inception to December 31,
1994, the Partnership has recognized approximately $2,877,000 of revenue from
this film.
"The Story Lady"
In 1991, the General Partner, on behalf of the Partnership,
entered into an agreement with NBC Productions, Inc. for the production of a
full-length made-for-television film entitled "The Story Lady." The total cost
of the film was approximately $4,300,000, and the Partnership has invested its
share of approximately $1,183,000 in return for worldwide distribution rights
to this film. Included in the total amount invested is a production and
overhead fee of $120,000 paid to the General Partner. At December 31, 1994,
the Partnership's net investment in the film, after consideration of
amortization, was $63,064. From inception to December 31, 1994, the
Partnership has recognized approximately $1,398,0000 of revenue from this film.
"Curacao"
In October 1992, the General Partner, on behalf of the
Partnership, entered into an agreement with Showtime Networks, Inc.
("Showtime") for the production of a full-length made-for-television film
entitled "Curacao." The total cost of the film was approximately $4,432,000.
In addition to the costs of production, the Partnership paid the General
Partner $500,000 as a production and overhead fee for services rendered in
connection with arranging the Showtime presale and supervising production of
this picture. At December 31, 1994, the Partnership's net investment in the
film, after consideration of amortization, was $1,255,123. From inception to
December 31, 1994, the Partnership has recognized approximately $3,734,000 of
revenue from this film.
18
<PAGE> 19
(6) DISTRIBUTION OF FILM PROJECTS
"The Little Kidnappers"
The Partnership advanced funds as production advances to an
affiliated Canadian corporation to complete the film. In return for such
production advances, the Partnership received all distribution rights in all
markets except Canada in perpetuity. The General Partner, on behalf of the
Partnership, licensed the film to The Disney Channel and the affiliated
Canadian corporation licensed the film to the Canadian Broadcasting
Corporation. Aggregate license fees of approximately $1,365,000 were received
from these licensees. The original Disney Channel license expired in September
1993. The General Partner has relicensed the film to The Disney Channel for an
additional license period of five years beginning January 1, 1994, for an
additional fee of $300,000. As of December 31, 1994, the Partnership had
received $200,000 from The Disney Channel and is expected to receive the
remaining $100,000 in 1996. The Canadian Broadcasting Corporation license
expired in the second quarter of 1994.
In April 1991, the General Partner, on behalf of the Partnership,
entered into a distribution agreement with an unaffiliated party, granting
rights to distribute "The Little Kidnappers" in the non-theatrical domestic
markets (defined as 16 mm sales and rentals, in-flight, oil rigs, ships at
sea, military installations, libraries, restaurants, hotels, motels, or other
institutional or commercial enterprises). At December 31, 1994, gross sales
made under this arrangement totaled $94,190, of which $23,548 was retained by
the distributor for its fees. The remaining $70,642 has been received by the
Partnership. In July 1991, the General Partner, on behalf of the Partnership,
entered into an agreement with another unaffiliated party that purchased the
rights to distribute "The Little Kidnappers" in the domestic home video market
for a period not to exceed five years. Under the agreement terms, the
Partnership is to receive a minimum guarantee of $500,000. The Partnership
received $100,000 upon the execution of the agreement and delivery of the film,
which occurred in October 1991. The Partnership discounted the remaining
$400,000 at an imputed interest rate of 8 percent, which created a discount of
$79,157. This discount is being amortized over a four-year period as gross
revenue in the Partnership's Statements of Operations. For the years ended
December 31, 1994, 1993 and 1992, $20,344, $24,507 and $26,448 of this discount
is included in gross revenues, respectively. The Partnership received $50,000
in October 1992, $75,000 in October 1993, $75,000 in October 1994 and is
scheduled to receive $200,000 in October 1995 as full payment for the $500,000
domestic home video guarantee.
In the third quarter of 1990, the General Partner, on behalf of
the Partnership, entered into a distribution agreement with an unaffiliated
party, granting rights to distribute "The Little Kidnappers" in international
television and international home video markets for a period of five years,
which ends in November 1996. Such agreement entitles the third party to
distribute up to ten years to exhibitors and broadcasters in the international
market. At December 31, 1994, gross sales made under this arrangement totaled
$1,133,123, of which $351,608 was retained by the distributor for its fees and
marketing costs. The remaining $781,515 will be paid to the Partnership as
collected by the distributor. At December 31, 1994, the Partnership had
received $742,795 of such amount. The remaining $38,720 will be paid to the
Partnership over the next three to twenty-four months as collected by the
distributor. Such collections by the distributor will generally occur as the
film becomes available for exhibition within the respective territories. The
Partnership plans to recover its remaining investment in this film from net
revenues generated in remaining worldwide television and home video markets.
"The Story Lady"
In 1992, the General Partner, on behalf of the Partnership,
entered into a distribution agreement with an unaffiliated party, granting
rights to distribute "The Story Lady" in the non-theatrical domestic markets.
At December 31, 1994, gross sales made under this arrangement totaled $264,584,
of which $66,146 was retained by the distributor for its fees. The remaining
$198,438 has been received by the Partnership. The General Partner, on behalf
of the Partnership, has entered into an agreement with The Disney Channel,
granting The Disney Channel exclusive domestic television rights to the film
for one year, from June 1994 until June 1995, for a license fee of $40,000. Of
this license fee, $26,667 was received in July 1994, with the remaining balance
of $13,333 due in the second quarter of 1995. In addition, the film was
distributed in the domestic home video market by the General Partner and a
third party consultant beginning in the second quarter of 1994. At December
31, 1994, gross sales under this arrangement totaled $159,317, which were
applied towards the
19
<PAGE> 20
General Partner's recoupment of its distribution costs. Any additional sales,
net of fees, will flow to the Partnership.
The Partnership has sub-licensed certain international
distribution rights to a distribution affiliate of NBC for approximately eight
years, after which these rights will revert to the Partnership. At December
31, 1994, gross sales made by this distributor totaled $1,061,013, of which
$281,244 will be retained by the distributor for its fees and marketing costs,
with the remaining $779,769 belonging to the Partnership. At December 31,
1994, the Partnership had received $746,815 of such amounts. The remaining
$32,954 will be paid to the Partnership over the next three to twenty-four
months as collected by the distributor.
"Curacao"
The Partnership has received license fees and a home video
advance totaling $2,650,000 from Showtime in return for granting Showtime the
right to market domestic pay television rights to the film for 42 months and
for the right to market domestic home video rights for seven years. Home video
revenues in excess of $875,000 will be shared 50/50 between the Partnership and
Showtime until Showtime has received $1,875,000 after which the Partnership
will receive all of the home video revenues. It is unlikely that the
Partnership will receive any revenues from the domestic home video
distribution of "Curacao."
In May 1993, the General Partner, on behalf of the Partnership,
entered into a distribution agreement with an unaffiliated party, granting
rights to distribute "Curacao" in the non-theatrical domestic markets. At
December 31, 1994, gross sales made under this arrangement totaled $117,358, of
which $29,340 was retained by the distributor for its fees. The remaining
$88,018 has been received by the Partnership.
The Partnership has contracted with an unaffiliated international
sales agent to market all other rights worldwide. The General Partner has
approved an agreement negotiated by the international sales agent with an
unaffiliated party to market international theatrical and home video rights.
The terms of such agreement provide for an advance payment of $950,000 against
international theatrical and home video revenues in return for the exclusive
rights to distribute the film in the above media for 10 years. This
unaffiliated party is entitled to a 35 percent distribution fee on net
theatrical rentals and will pay the Partnership a royalty equal to 30 percent
of home video sales. The net receipts to the Partnership will be reduced by
fees due to the international sales agent. At December 31, 1994, the
Partnership had recorded international gross revenues of $965,846, of which
$295,640 was retained by the distributor for its fees and marketing costs, and
the remaining $670,206 had been received by the Partnership at December 31,
1994.
(7) INCOME TAXES
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The Federal and state
income tax returns of the Partnership will be prepared and filed by the General
Partner.
The Partnership's tax returns, the qualification of the
Partnership as such for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by Federal and state
taxing authorities. If such examinations result in changes with respect to the
Partnership's qualification as such, or in changes with respect to the
Partnership's recorded income or loss, the tax liability of the general and
limited partners would likely be changed accordingly.
The tax basis of assets is different from that reported on the
Balance Sheets due to the difference in depreciation recognized under generally
accepted accounting principles and the expense allowed for tax purposes under
the Modified Accelerated Cost Recovery System (MACRS). There are no other
significant differences between the tax basis assets and the assets reported
on the Balance Sheets. The net difference between the tax bases and the amounts
reported on the Balance Sheets are immaterial.
20
<PAGE> 21
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain
information concerning directors and executive officers of the General Partner
of the Registrant is set forth below.
<TABLE>
<CAPTION>
Name Age Positions with the General Partner
---- --- ----------------------------------
<S> <C> <C>
Glenn R. Jones 65 Chairman of the Board and
Chief Executive Officer
Philip D. Fehrle 53 Executive Vice President
Theodore A. Henderson 37 Vice President, Treasurer and Director
Lani Daniels 41 Vice President
Elizabeth M. Steele 42 Secretary and Director
David K. Zonker 41 Director
Wilfred N. Cooper, Sr. 64 Director
J. Rodney Dyer 59 Director
Derek H. Burney 55 Director
</TABLE>
Mr. Glenn R. Jones has served as Chairman of the Board of Directors
and Chief Executive Officer of the General Partner since its inception and he
has served as President of the General Partner since April 1994. Mr. Jones is
also the Chairman of the Board of Directors and Chief Executive Officer of the
General Partner's parent, Jones Digital Century, Inc. ("Digital Century"), a
subsidiary of Jones International, Ltd. Mr. Jones has served as Chairman of
the Board of Directors and Chief Executive Officer of Jones Intercable, Inc.,
one of the nation's largest cable television companies, since its formation in
1970, and he was President of that company from June 1984 until April 1988.
Mr. Jones is the sole shareholder, President and Chairman of the Board of
Directors of Jones International, Ltd. He is also Chairman of the Board of
Directors of other affiliates of the General Partner. He is a member of the
Board of Directors of the National Cable Television Association and a former
member of its Executive Committee. He also is a member of the Board of
Directors and Executive Committee of Cable in the Classroom and was formerly on
the Board of Directors and the Executive Committee of C-SPAN, the cable public
affairs network. In addition to his cable television affiliations, Mr. Jones
is a founding member of the James Madison Council of the Library of Congress,
is a member of the Board of Governors of the American Society for Training and
Development (ASTD) and he serves on the board of the National Alliance of
Business (NAB). Mr. Jones' many awards and honors include the Grand Tam Award
in 1989, the highest award from the Cable Television Administration and
Marketing Society, the Chairman's Award from the Investment Partnership
Association, which is an association of sponsors of public syndications; the
cable television industry's Public Affairs Association President's Award in
1990; the 1993 International Distance Learning Conference (IDLCON) Most
Outstanding Corporate Individual Achievement Award; 1994 inductee into
Broadcasting and Cable's Hall of Fame; the American Academy of Achievement's
Golden Plate Award, recognizing greatness in achievement; and the 1994 Man of
the Year Award for outstanding accomplishments in the area of education from
Achievement Rewards for College Scientists (ARCS). He is author of the Jones
Cable Television and Information Infrastructure Dictionary (and its three
predecessors), a global reference book for the cable television industry, and
Make All America a School, an overview of the role of distance learning in the
American educational environment.
Mr. Philip D. Fehrle joined the General Partner in January 1989. Mr.
Fehrle has over twenty-five years' experience in all phases of television and
motion picture production, development, budgeting, and
21
<PAGE> 22
negotiating agreements with both talent and exhibitors. Mr. Fehrle is
responsible for the management of all creative and actual production matters of
the General Partner, which includes the procurement of underlying material,
talent selection and supervision of all productions. He has extensive direct
experience in both traditional studio productions and independent productions.
Prior to joining the General Partner in January 1989, Mr. Fehrle was President
of Philip D. Fehrle Productions, a firm he created for the purposes of
developing and producing motion picture and television properties in December
1986. Mr. Fehrle's company has served as a consultant to Frank Fehmers
Productions (Amsterdam, Holland), and Noel Films and DIC Entertainment in Los
Angeles, California. From December 1986 to September 1987, Mr. Fehrle also
produced Dennis The Menace Returns, a two-hour movie for television. Mr.
Fehrle is a member of the Writers Guild of America; the Directors Guild of
America; the Producers Guild of America; the Caucus for Writers, Producers and
Directors; and the Academy of Television Arts and Sciences.
Mr. Theodore A. Henderson has been Vice President and a Director of
the General Partner since formation in 1988 and was named Treasurer of the
General Partner in 1993. Mr. Henderson is also a Vice President and a director
of Digital Century. Mr. Henderson is involved in all aspects of the
negotiation, documentation and implementation of business matters regarding
talent, distribution and co-production activities for the General Partner. He
joined Jones International Securities, Ltd., an affiliate of the General
Partner, as a Director of Field Support in 1984 and was elected Vice President
in 1985 and Senior Vice President in 1988.
Ms. Elizabeth M. Steele is Secretary and a Director of the General
Partner. She is also Vice President/General Counsel and Secretary of Jones
Intercable, Inc. and Jones Spacelink, Ltd. From August 1980 until joining
Jones Intercable, Inc., Ms. Steele was an associate and then a partner at the
Denver law firm of Davis, Graham & Stubbs, which serves as counsel to the
General Partner.
Ms. Lani Daniels joined the General Partner in January 1989 as
Director of Development. Ms. Daniels has more than twelve years of experience
in the development and production of television, movie, mini-series and series
programming. She was previously employed as Development Executive for Procter
& Gamble Productions; Director of Development for Tomorrow Entertainment and
Director of Dramatic Development for Embassy Television. As an independent
contractor, she created three dramatic television series concepts for Motown
Productions in 1984, developed a television movie project for Indian Neck
Productions in 1986, and developed a feature film project for Georgio Moroder
in 1987-1988.
Mr. David K. Zonker became a director of the General Partner in
December 1994. Mr. Zonker has been the President of Jones International
Securities, Ltd. since January 1984 and he has been its Chief Executive Officer
since January 1988. Mr. Zonker is a member of the Board of Directors of
various Jones companies. Mr. Zonker is licensed by the National Association of
Securities Dealers, Inc. and he is the immediate past chairman of the
Investment Program Association, a trade organization based in Washington, D.C.
that promotes direct investments.
Mr. Wilfred N. Cooper, Sr. became a director of the General Partner in
December 1994. Mr. Cooper has been the principal shareholder and a Director of
WNC & Associates, Inc. since its organization in 1971, of Shelter Resource
Corporation since its organization in 1981 and of WNC Resources, Inc. from its
organization in 1988 through its acquisition by WNC & Associates, Inc. in 1991,
serving as President of those companies through June 1992 and as Chief
Executive Officer since June 1992.
Mr. J. Rodney Dyer became a director of the General Partner in
December 1994. Mr. Dyer has been the President and sole shareholder of Rod
Dyer Group, Inc. since its formation in 1967. Rod Dyer Group, Inc. specializes
in advertising, marketing and promotion. Rod Dyer Group, Inc. filed for
protection under Chapter 11 of the Federal Bankruptcy Act in December 1991 and
was released in March 1994.
Mr. Derek H. Burney was appointed a director of the General Partner in
December 1994. Mr. Burney is also a director and Vice Chairman of the Board of
Directors of Jones Intercable, Inc., an affiliate of the General Partner. Mr.
Burney joined BCE Inc., Canada's largest telecommunications company, in January
1993 as Executive Vice President, International. He has been the Chairman of
Bell Canada International Inc., a
22
<PAGE> 23
subsidiary of BCE, since January 1993 and, in addition, has been Chief
Executive Officer of BCI since July 1993. Prior to joining BCE, Mr. Burney
served as Canada's ambassador to the United States from 1989 to 1992. Mr.
Burney also served as chief of staff to the Prime Minister of Canada from March
1987 to January 1989 where he was directly involved with the negotiation of the
U.S. - Canada Free Trade Agreement. In July 1993, he was named an Officer of
the Order of Canada. Mr. Burney is chairman of Bell Cablemedia plc. He is a
director of Mercury Communications Limited, Videotron Holdings plc, Tele-Direct
(Publications) Inc., Teleglobe Inc., Bimcor Inc., Maritime Telegraph and
Telephone Company, Limited, Moore Corporation Limited and Northbridge
Programming Inc.
Messrs. Burney, Cooper, Dyer and Zonker became directors of the
General Partner in December 1994. These new directors did not file on a timely
basis reports required by Section 16(a) of the Securities Exchange Act of 1934,
as amended, with respect to their ownership of limited partnership interests in
the Partnership. Messrs. Burney, Cooper, Dyer and Zonker have not owned and do
not own any limited partnership interests in the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate its business. Such personnel are employed by the General
Partner and, pursuant to the terms of the Partnership's limited partnership
agreement, the cost of such employment can be charged by the General Partner to
the Partnership as a reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
No person or entity owns more than 5 percent of the limited
partnership interests in the Partnership, except for Herbert Borbe. Mr.
Borbe's address is 11412 115th Lane N.E., Kirkland, Washington 98033. Mr.
Borbe is not a director, officer or employee of the General Partner or any of
its affiliates, and, except for his 6 percent interest in the Partnership, he
is not otherwise affiliated with the General Partner and its affiliates.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnership as contemplated by the limited partnership agreement of
the Partnership. The General Partner believes that the terms of such
transactions are generally as favorable as could be obtained by the Partnership
from unaffiliated parties. This determination has been made by the General
Partner in good faith, but none of the terms were or will be negotiated at
arm's-length and there can be no assurance that the terms of such transactions
have been or will be as favorable as those that could have been obtained by the
Partnership from unaffiliated parties.
The General Partner receives a production and overhead fee for
administering the affairs of the Partnership equal to 12 percent of the lower
of the direct costs or the budgeted direct costs of each programming project.
This fee is calculated and payable at the time principal photography commences
on each particular project and, in the case of a series, is payable on a per
episode basis. No such fee was paid in 1994.
The General Partner is entitled to reimbursement from the Partnership
for certain allocated overhead and administrative expenses in accordance with
the terms of the limited partnership agreement of the Partnership. These
expenses consist primarily of salaries and benefits paid to corporate
personnel, rent, data processing services and other facilities costs. Such
personnel provide administrative, accounting and legal services to the
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to the Partnership. In
1994, the General Partner only charged the Partnership for direct expenses of
the Partnership totaling $6,535.
23
<PAGE> 24
The General Partner may also advance funds and charge interest on the
balance payable from the Partnership. The interest rate charged the
Partnership approximates the General Partner's weighted average cost of
borrowing. No advances were made in 1994, and thus no interest was paid to
the General Partner by the Partnership in 1994.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<S> <C> <C>
(a)1. Financial statements.
2. Schedules - None.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement. (1)
27 Financial Data Schedule
</TABLE>
----------
(1) Incorporated by reference from the Partnership's Annual Report on
Form 10-K for year ended December 31, 1989.
(b) Reports on Form 8-K.
None.
24
<PAGE> 25
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.
JONES PROGRAMMING PARTNERS 1-A, LTD.,
a Colorado limited partnership
By Jones Entertainment Group, Ltd.,
its General Partner
By: /s/ Glenn R. Jones
----------------------------------------
Glenn R. Jones
Chairman of the Board and
Dated: March 27, 1995 Chief Executive Officer
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.
<TABLE>
<S> <C> <C> <C>
By: /s/ Glenn R. Jones
---------------------------------------------
Glenn R. Jones
Chairman of the Board
and Chief Executive Officer
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Theodore A. Henderson
---------------------------------------------
Theodore A. Henderson
Vice President, Treasurer
and Director
(Principal Financial and
Dated: March 27, 1995 Accounting Officer)
By: /s/ Derek H. Burney
---------------------------------------------
Derek H. Burney
Dated: March 27, 1995 Director
By:
-------------------------------------
Wilfred N. Cooper, Sr.
Dated: Director
By:
-------------------------------------
J. Rodney Dyer
Dated: Director
By: /s/ David K. Zonker
---------------------------------------------
David K. Zonker
Dated: March 27, 1995 Director
</TABLE>
25
<PAGE> 26
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 LIMITED Partnership Agreement(1)
27 Financial Data Schedule
--------
(1) Incorporated by reference from the Partnership's Annual Report on Form 10-K
for year ended December 31, 1989.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 668,088
<SECURITIES> 0
<RECEIVABLES> 377,149
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,498,982
<CURRENT-LIABILITIES> 169,510
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,329,472
<TOTAL-LIABILITY-AND-EQUITY> 2,498,982
<SALES> 413,756
<TOTAL-REVENUES> 413,756
<CGS> 0
<TOTAL-COSTS> 446,360
<OTHER-EXPENSES> (23,215)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,389)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,389)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,389)
<EPS-PRIMARY> (.73)
<EPS-DILUTED> (.73)
</TABLE>
