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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, 1995.
[ ] 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 0-19075
Jones Programming Partners 1-A, Ltd.
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Exact name of registrant as specified in charter
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<S> <C>
Colorado #84-1088820
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State of organization I.R.S. employer I.D.#
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9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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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 1-A, LTD.
INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Balance Sheets
March 31, 1995 and December 31, 1994 3-4
Unaudited Statements of Operations
Three Months Ended March 31, 1995 and 1994 5
Unaudited Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994 6
Notes to Unaudited Financial Statements
March 31, 1995 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II. OTHER INFORMATION 11
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2
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
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March 31, December 31,
1995 1994
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ASSETS
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CASH AND CASH EQUIVALENTS $ 606,201 $ 668,088
RECEIVABLES:
Foreign income receivable 171,367 185,007
Domestic income receivable, net of unamortized
discount of $4,015 and $7,858 as of March 31, 1995 and
December 31, 1994, respectively 195,985 192,142
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $7,539,314 and $7,458,205
as of March 31, 1995 and December 31, 1994, respectively 1,368,757 1,450,888
OTHER ASSETS 655 2,857
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Total assets $2,342,965 $2,498,982
========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited financial statements.
3
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
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LIABILITIES:
Accounts payable to affiliates $ 11,133 $ 1,100
Accrued distributions payable to partners 160,897 160,897
Accrued liabilities 9,826 7,513
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Total liabilities 181,856 169,510
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PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (29,568) (27,959)
Accumulated deficit (3,787) (3,712)
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Total general partner deficit (32,355) (30,671)
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Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of March 31, 1995
and December 31, 1994) 5,459,327 5,459,327
Distributions (2,927,198) (2,767,910)
Accumulated deficit (338,665) (331,274)
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Total limited partners' capital 2,193,464 2,360,143
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Total partners' capital 2,161,109 2,329,472
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Total liabilities and partners' capital $ 2,342,965 $ 2,498,982
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited financial statements.
4
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended
March 31,
----------------------------
1995 1994
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GROSS REVENUES $102,244 $36,646
COSTS AND EXPENSES:
Costs of filmed entertainment 81,109 44,814
Distribution fees and expenses 24,484 37,307
Operating, general and administrative expenses 11,825 17,309
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Total costs and expenses 117,418 99,430
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OPERATING LOSS (15,174) (62,784)
INTEREST INCOME 7,708 4,552
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NET LOSS $ (7,466) $(58,232)
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ALLOCATION OF NET LOSS:
General Partner $ (75) $ (582)
======== ========
Limited Partners $ (7,391) $(57,650)
======== ========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (.58) $ (4.52)
======== ========
WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743
======== ========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited financial
statements.
5
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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<CAPTION>
For the Three Months Ended
March 31,
----------------------------
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,466) $ (58,232)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Amortization of filmed entertainment costs 81,109 44,814
Amortization of discount (3,843) (4,936)
Decrease in foreign income receivable 13,640 328,648
Decrease (increase) in other assets 2,202 (14,869)
Increase in accrued liabilities 2,313 1,485
Increase (decrease) in accounts payable to affiliates 10,033 (225,418)
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Net cash provided by operating activities 97,988 71,492
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in production advances 1,022 (2,036)
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Net cash provided by (used in) investing activities 1,022 (2,036)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (160,897) (160,897)
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Net cash used in financing activities (160,897) (160,897)
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Decrease in cash and cash equivalents (61,887) (91,441)
Cash and cash equivalents, beginning of period 668,088 834,066
--------- ---------
Cash and cash equivalents, end of period $ 606,201 $ 742,625
========= =========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited financial statements.
6
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JONES PROGRAMMING PARTNERS 1-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 Balance Sheets 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 1-A, Ltd. (the "Partnership") as of March 31, 1995 and December 31,
1994 and its results of operations and its cash flows for the three month
periods ended March 31, 1995 and 1994. Results of operations for these periods
are not necessarily indicative of results to be expected for the full year.
(2) TRANSACTIONS WITH AFFILIATED ENTITIES
The General Partner is entitled to reimbursement from the Partnership
for its direct and indirect expenses allocable to the 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, the Partnership was charged $1,701 and $243 for direct expenses
only for the three month periods ended March 31, 1995 and 1994, respectively.
(3) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
"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
Kidnappers." The total film cost was approximately $3,200,000. Of this
amount, the Partnership invested approximately $2,794,000, which included a
production and overhead fee of $300,000 paid to the General Partner. As of
March 31, 1995, the Partnership's net investment in the film, after
consideration of amortization, is $128,923. From inception to March 31, 1995,
the Partnership has recognized approximately $2,881,000 of gross revenue from
this film, which includes the initial license fees of approximately $1,365,000
from The Disney Channel and the Canadian Broadcasting Corporation, which was
used to finance the film's production.
"The Story Lady"
In April 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. Of this amount, the Partnership
invested approximately $1,183,000 in return for world-wide distribution rights
to this film, excluding United States and Canadian broadcast television rights.
Included in the total amount invested is a production and overhead fee of
$120,000 paid to the General Partner. As of March 31, 1995, the Partnership's
net investment in the film, after consideration of amortization, was $39,686.
From inception to March 31, 1995, the Partnership has recognized approximately
$1,434,000 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 $4,431,000. 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 pre-sale and supervising production of this picture. As of March
31, 1995, the Partnership's net investment in the film, after consideration of
amortization, was $1,200,148. From inception to March 31, 1995, the
Partnership has recognized approximately $3,789,000 of gross revenue from this
film, which includes the initial license fee and home video advance from
Showtime of $2,650,000, which was used to finance the film's production.
7
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JONES PROGRAMMING PARTNERS 1-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 the
Partnership's programming. The Partnership had $606,201 in cash as of March
31, 1995. 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 has outstanding amounts receivable from
unaffiliated distributors totaling approximately $367,000 as of March 31, 1995.
Approximately $167,000 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.
In December 1994, the Partnership declared a distribution of $160,897
which was paid to the partners in February 1995. In March 1995, the
Partnership declared a distribution of $160,897, which will be paid to the
partners in May 1995. These distributions are 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 liquidity to conduct its operations and to meet
its obligations during 1995.
"The Little Kidnappers"
During 1990, the Partnership invested approximately $2,794,000 in a
film entitled "The Little Kidnappers." Network pre-sales 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 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.
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 perpetuity in all markets except Canada.
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 March 31, 1995, 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 and was not renewed. The Partnership subsequently
engaged an unaffiliated distribution company to further exploit the Canadian
market.
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 16mm sales and rentals, in-flight, oil rigs, ships at sea,
military installations, libraries, restaurants, hotels, motels or other
institutional or commercial enterprises). As of March 31, 1995, gross sales
made under this arrangement totaled $94,190, of which $23,548 was retained by
the distributor for its fees. 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
8
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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 1995. As of March 31, 1995, gross sales made under this
arrangement totaled $1,133,123 of which $356,154 was retained by the
distributor for its fees and marketing costs. The remaining $776,969 will be
paid to the Partnership as collected by the distributor. As of March 31, 1995,
the Partnership had received $753,452 of such amount. The remaining $23,517
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 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 all distribution rights to this
film after the contractual airings by NBC Productions, Inc., which have been
concluded.
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. As of
March 31, 1995, gross sales made under this arrangement totaled $266,584 of
which $66,646 was retained by the distributor for its fees. The remaining
$199,938 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. As of March
31, 1995, 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. As of March 31, 1995, gross
sales made by this distributor totaled $1,102,470, of which $287,666 will be
retained by the distributor for its fees and marketing costs, with the
remaining $814,804 belonging to the Partnership. As of March 31, 1995, the
Partnership had received $780,228 of such amounts. The remaining $34,576 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 $4,431,000. 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 pre-sale and supervising production of this picture.
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 additional revenues beyond the original Showtime
advance 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. As of
March 31, 1995, gross sales made under this arrangement totaled $117,358, of
which $29,340 was retained by the distributor for its fees.
9
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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. As of March 31, 1995, the
Partnership had recorded international gross revenues of $1,020,557, of which
$310,030 was retained by the distributor for its fees and marketing costs, and
the remaining $710,527 had been received by the Partnership as of March 31,
1995.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $65,598, from $36,646 for the
three months ended March 31, 1994 to $102,244 for the three months ended March
31, 1995. This increase was primarily the result of an increase in
international and domestic sales of "The Story Lady," which were $43,476 for
the three month period ended March 31, 1995 as compared to $17,445 for the same
period in 1994. Domestic sales of "Curacao" also contributed to the increase
in revenues, which resulted in revenues of $54,711 for the three month period
ended March 31, 1995 as compared to $0 for the similar period in 1994. The
increases were partially offset by a decrease in revenues from "The Little
Kidnappers," which were $4,057 for the three month period ended March 31, 1995
as compared to $19,201 for the same period in 1994.
Filmed entertainment costs increased $36,295, from $44,814 for the
three months ended March 31, 1994 to $81,109 for the three months ended March
31, 1995. This increase was the result of increased revenues as mentioned
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 $12,823, from $37,307 for the
three months ended March 31, 1994 to $24,484 for the three months ended March
31, 1995. This change was the result of changes in the mix of 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. The timing and amount of distribution fees
and expenses vary depending upon the individual market in which programming is
distributed.
Operating, general and administrative expenses decreased $5,484, from
$17,309 for the three months ended March 31, 1994 to $11,825 for the three
months ended March 31, 1995. This decrease was primarily the result of a
decrease in the royalties paid to the writer of "The Little Kidnappers" to
$4,763 in 1995 as compared to $12,737 for the similar period in 1994.
Interest income increased $3,156, from $4,552 for the three months
ended March 31, 1994 to $7,708 for the three months ended March 31, 1995. This
increase in interest income is the result of higher average cash balances
invested during the first quarter of 1995 as compared to average balances
invested in the first quarter 1994.
10
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Part II - OTHER INFORMATION
NONE
11
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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 1-A, LTD.
BY: JONES ENTERTAINMENT GROUP, LTD.
General Partner
By: /s/ Theodore A. Henderson
------------------------------------------
Theodore A. Henderson
Principal Financial and Accounting Officer
Dated: May 15, 1995
12
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit Description Page
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27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 606,201
<SECURITIES> 0
<RECEIVABLES> 367,352
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,342,965
<CURRENT-LIABILITIES> 181,856
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,161,109
<TOTAL-LIABILITY-AND-EQUITY> 2,342,965
<SALES> 0
<TOTAL-REVENUES> 102,244
<CGS> 0
<TOTAL-COSTS> 117,418
<OTHER-EXPENSES> (7,708)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,466)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,466)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,466)
<EPS-PRIMARY> (.58)
<EPS-DILUTED> (.58)
</TABLE>
