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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996.
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[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
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Commission File Number 0-19075
Jones Programming Partners 1-A, Ltd.
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Exact name of registrant as specified in charter
Colorado #84-1088820
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State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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Address of principal executive office
(303) 792-3111
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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.
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(A Limited Partnership)
INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position as of
June 30, 1996 and December 31, 1995 3-4
Unaudited Statements of Operations for the
Three and Six Months Ended June 30, 1996 and 1995 5
Unaudited Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1995 6
Notes to Unaudited Financial Statements as of
June 30, 1996 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
PART II. OTHER INFORMATION 13
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
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June 30, December 31,
1996 1995
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ASSETS
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CASH AND CASH EQUIVALENTS $ 476,775 $ 502,435
RECEIVABLES:
Foreign income receivable 169,786 317,319
Domestic income receivable 110,000 140,000
Accounts receivable from affiliates 6,912 36,848
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,030,460 and $7,952,542
as of June 30, 1996 and December 31, 1995, respectively 856,746 934,664
OTHER ASSETS 1,799 2,273
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Total assets $1,622,018 $1,933,539
========== ==========
</TABLE>
The accompanying notes to the unaudited financial statements
are an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
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June 30, December 31,
1996 1995
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
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LIABILITIES:
Accrued distributions payable to partners $ 160,897 $ 160,897
Accrued liabilities 3,000 6,000
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Total liabilities 163,897 166,897
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PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (37,613) (34,395)
Accumulated deficit (2,771) (2,904)
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Total general partner's deficit (39,384) (36,299)
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Limited partners -
Contributed capital, net of offering costs (12,743 units outstanding
as of June 30, 1996 and December 31, 1995) 5,459,327 5,459,327
Distributions (3,723,638) (3,405,062)
Accumulated deficit (238,184) (251,324)
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Total limited partners' capital 1,497,505 1,802,941
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Total partners' capital 1,458,121 1,766,642
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Total liabilities and partners' capital $ 1,622,018 $ 1,933,539
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</TABLE>
The accompanying notes to the unaudited financial statements
are an integral part of these unaudited financial statements.
4
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended For the Six Months Ended
June 30, June 30,
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1996 1995 1996 1995
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GROSS REVENUES $66,283 $70,138 $147,401 $172,382
COSTS AND EXPENSES:
Costs of filmed entertainment 16,113 46,729 77,918 127,838
Distribution fees and expenses 19,599 8,282 41,632 32,766
Operating, general and administrative expenses 14,427 7,818 25,284 19,643
------- ------- -------- --------
Total costs and expenses 50,139 62,829 144,834 180,247
------- ------- -------- --------
OPERATING INCOME (LOSS) 16,144 7,309 2,567 (7,865)
------- ------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 5,349 7,292 10,706 15,000
------- ------- -------- --------
Other income, net 5,349 7,292 10,706 15,000
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NET INCOME $21,493 $14,601 $ 13,273 $ 7,135
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ALLOCATION OF NET INCOME:
General Partner $ 215 $ 146 $ 133 $ 71
======= ======= ======== ========
Limited Partners $21,278 $14,455 $ 13,140 $ 7,064
======= ======= ======== ========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 1.67 $ 1.13 $ 1.03 $ .55
======= ======= ======== ========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743 12,743 12,743
======= ======= ======== ========
</TABLE>
The accompanying notes to the unaudited financial statements
are an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Six Months Ended
June 30,
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1996 1995
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,273 $ 7,135
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Amortization of filmed entertainment costs 77,918 127,838
Amortization of discount - (7,763)
Net change in assets and liabilities:
Decrease in foreign income receivable 147,533 22,990
Decrease in domestic income receivable 30,000 -
Decrease in other assets 474 2,857
Net change in amounts due to/from affiliates 29,936 23,878
Decrease in accrued liabilities (3,000) (2,173)
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Net cash provided by operating activities 296,134 174,762
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in production advances - 21,887
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Net cash provided by investing activities - 21,887
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CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (321,794) (321,794)
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Net cash used in financing activities (321,794) (321,794)
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DECREASE IN CASH AND CASH EQUIVALENTS (25,660) (125,145)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 502,435 668,088
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 476,775 $ 542,943
========= =========
</TABLE>
The accompanying notes to the unaudited financial statements
are an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 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 Statements of
Financial Position and Statements of Operations and Cash Flows in
conformity with generally accepted accounting principles. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the financial
position of Jones Programming Partners 1-A, Ltd. (the "Partnership") as of
June 30, 1996 and December 31, 1995 and its results of operations and its
cash flows for the three and six month periods ended June 30, 1996 and
1995. Results of operations for these periods are not necessarily
indicative of results to be expected for the full year.
(2) TRANSACTIONS WITH AFFILIATED ENTITIES
-------------------------------------
The General Partner is entitled to reimbursement from the Partnership for
its direct and indirect expenses allocable to the operations of the
Partnership, which shall include, but not be limited to, rent, supplies,
telephone, travel, legal expenses, accounting expenses, preparation and
distribution of reports to investors and salaries of any full or part-time
employees. Although the General Partner is entitled to reimbursement for
all direct and indirect expenses allocable to the partnership, the
partnership was charged $3,093 and $3,693 for direct expenses only for the
three month periods ended June 30, 1996 and 1995, respectively. For the
six month periods ended June 30, 1996 and 1995, $9,629 and $5,393,
respectively, were charged to the Partnership for direct expenses.
(3) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
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"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
June 30, 1996, the Partnership's net investment in the film, after
consideration of amortization, was $92,400. From inception to June 30,
1996, the Partnership has recognized approximately $2,902,000 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 were used to finance the film's production.
As of June 30, 1996, $9,176 in receivables was outstanding from the film's
distributors and licensees, and is expected to be paid over the next three
to twenty-four months as collected by distributors.
"The Story Lady"
---------------
In April 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. 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
June 30, 1996, the Partnership had fully recovered its total investment in
the film. From inception to June 30, 1996, the Partnership has recognized
approximately $1,970,000 of revenue from this film. As of June 30, 1996,
the Partnership had outstanding receivables from the film's domestic and
international distributors and licensees totaling $270,299. The
Partnership anticipates payment of these amounts over the next three to
twenty-four months as collected by distributors.
"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 $4,410,000. 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 June 30, 1996, the Partnership's net investment in the film, after
consideration of amortization, was $764,346. From inception to June 30,
1996, the Partnership has recognized approximately $3,985,000 of gross
revenue from this film, which includes the initial license fee and home
video advance from
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Showtime of $2,650,000, which was used to finance the film's production. As of
June 30, 1996, the Partnership had outstanding receivables from the film's
international distributors totaling $311, which were paid in July 1996.
8
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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
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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 $476,775 in cash as of June 30, 1996. 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 $280,000 as of June 30, 1996. Approximately
$170,000 of this amount will be paid to the Partnership over the next three to
twenty-four months as collected by the distributors and the remaining $110,000
will be paid to the Partnership over the next twelve months.
For the six months ended June 30, 1996, the Partnership declared distributions
to partners totaling $321,794, of which $160,897 was paid in May 1996 with the
remaining $160,897 to be paid in August 1996. These distributions are made
using cash on hand, interest income and cash provided by operating activities.
Quarterly distributions are expected to continue through the fourth quarter of
1996 at the same level as those made during the first two quarters of 1996.
Thereafter, distributions will likely be suspended or substantially reduced.
The Partnership will retain a certain level of working capital, including any
necessary reserves, to fund its operating activities. Any amounts in excess of
the Partnership's working capital needs received from continued second cycle
distribution of the Partnership's programming will be periodically distributed
to partners.
The General Partner, on behalf of the Partnership, will continue to manage and
arrange for the second cycle distribution of the Partnership's programming in
remaining unexploited territories and markets. In addition, the General
Partner, on behalf of the Partnership, has engaged an independent public
accounting firm for purposes of performing distribution audits of the major
distributors of the Partnership's programming. The purpose of these audits is
to identify and facilitate payment of any excess film revenue proceeds retained
by the distributors that belong to the Partnership. There can be no assurance
that either the continued second cycle distribution of the Partnership's
programming or the performance of these audits will generate significant revenue
for the Partnership.
It is anticipated that proceeds from the sale of the Partnership's interests in
its programming will be distributed to partners in the future as the
Partnership's interests in the programming are sold. The General Partner cannot
predict at this time when, which or at what price the Partnership's interests in
its programming projects ultimately will be sold.
The General Partner believes that the Partnership has, and will continue to
have, sufficient liquidity to fund its operations and to meet its obligations.
Cash flow from operating activities will be generated primarily from the
Partnership's programming projects as follows:
"The Little Kidnappers"
----------------------
During 1990, the Partnership invested approximately $2,794,000 in a film
entitled "The Little Kidnappers." 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 which had been received by the
Partnership as of June 30, 1996. The Canadian Broadcasting Corporation license
expired in the second quarter of 1994 and was not renewed.
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 for a period not
to exceed seven years. Non-theatrical markets include 16mm sales and rentals,
in-flight, oil rigs, ships at sea, military installations, libraries,
restaurants, hotels, motels or other institutional or commercial enterprises.
As of June 30, 1996, gross sales made under this arrangement totaled $94,190, of
which $23,548 was retained by the distributor for its fees and the remaining
$70,642 was remitted to the Partnership.
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in July 1991, the General Partner, on behalf of the Partnership, entered into an
agreement with an unaffiliated party granting 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 received a minimum guarantee
of $500,000, of which $100,000 was received upon delivery of the film in October
1991. The Partnership discounted the remaining $400,000 at an imputed interest
rate of 8%, which created a discount of $79,157. The Partnership received
$50,000 in October 1992, $75,000 in October 1993, $75,000 in October 1994 and
the remaining $200,000 in October 1995. The Partnership does not expect to
receive any additional proceeds under this agreement.
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
home video markets for a period of five years. This agreement expired in
October 1995. The international distribution rights for the film are now being
handled by the General Partner on behalf of the Partnership. The General
Partner will earn a distribution fee equal to 25 percent of gross international
sales and will recover its actual distribution and marketing costs incurred,
with remaining net revenues to be paid to the Partnership. As of June 30, 1996,
international gross sales made under the original distribution agreement totaled
$1,139,570, of which $359,165 was retained by the distributor for its fees and
marketing costs and $771,229 was remitted to the Partnership as of June 30,
1996. The remaining $9,176 will be paid to the Partnership over the next three
to twenty-four months as collected by the distributor. The Partnership
anticipates that it will recover its remaining net investment in this film of
$92,400 from net revenues to be generated in remaining worldwide television and
home video markets by direct distribution efforts to be made on behalf of the
Partnership by the General Partner.
"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 invested its share of
approximately $1,183,000 in return for all distribution rights to this film
after the contractual airings on the NBC television network, which have been
completed.
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 June 30, 1996,
gross sales made under this arrangement totaled $300,969, of which $75,241 was
retained by the distributor for its fees. The remaining $225,728 has been
received by the Partnership. The General Partner, on behalf of the Partnership,
entered into an agreement with the Disney Channel, granting the Disney Channel
exclusive domestic television rights to the film for one year, from September
1994 until September 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
received in April 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 June 30, 1996, net sale proceeds under
this arrangement totaled $99,312, which were applied towards the General
Partner's recoupment of its total distribution costs as of June 30, 1996. As
the General Partner has now fully recovered its remaining distribution costs,
any additional sales, net of fees, will flow to the Partnership.
On behalf of the Partnership, the General Partner has sub-licensed under the NBC
agreement international television and home video distribution rights to a
distribution affiliate of NBC for approximately eight years. As of June 30,
1996, international gross sales totaled $1,392,148, of which $367,778 was
retained by the distributor for its fees and marketing costs, with the remaining
$1,024,370 due to the Partnership. As of June 30, 1996, the Partnership had
received $864,071 of such amounts. The remaining $160,299 will be paid to the
Partnership over the next three to twenty-four months as collected by the
distributor.
In October 1995, the General Partner, on behalf of the Partnership, entered into
a license agreement with an unaffiliated party, granting rights to distribute
"The Story Lady" in the domestic home video market through direct, non-retail
sales for a license fee of $200,000. Under the original terms of the three year
agreement, the Partnership was entitled to $50,000 upon execution of the
agreement, and $10,000 per month for fifteen consecutive months. Of this
license fee, $50,000 was received by the General Partner in November 1995, of
which $21,341 was retained by the General Partner to be applied towards
recoupment of its remaining distribution costs incurred on behalf of the
Partnership for "The Story Lady." The remaining $28,659 was remitted to the
Partnership. As of June 30, 1996, the Partnership had received license fee
payments totaling $40,000. In accordance with new payment terms renegotiated
with the distributor, the remaining balance due under the licensing agreement of
$110,000 will be paid to the Partnership periodically over the next twelve
months. During 1995, the Partnership recovered its remaining net investment in
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
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approximately $4,410,000. 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 a pay television
license through 1997 and 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 June 30, 1996, gross
sales made under this arrangement totaled $117,358, of which $29,340 was
retained by the distributor for its fees and $88,018 was received by the
Partnership.
The Partnership has contracted with an unaffiliated international sales agent to
market theatrical, home video, and television rights outside the United States
and Canada for a period of five years. The General Partner approved an
agreement negotiated by the international sales agent with an unaffiliated party
to market international theatrical and home video rights for a period of ten
years. The terms of such agreement provide for an advance payment of $950,000
against international theatrical and home video revenues. The payment has been
received by the Partnership net of distribution fees and expenses retained by
the distributor. No international theatrical or home video overages are
expected to be received for the remaining term of the agreement. International
television sales continue and are remitted to the Partnership, net of
distribution fees and expenses, as collected by the distributor. As of June 30,
1996, the Partnership had recorded international gross revenues of $1,214,998,
of which $349,337 was retained by the distributor for its fees and marketing
costs, with the remaining $865,661 remitted to the Partnership as of June 30,
1996.
During 1995, the General Partner reassessed the anticipated total gross revenue
remaining from the distribution of "Curacao" in available international and
domestic television markets. Based on revised television sales projections by
unexploited territory, a reduction was made to the Partnership's estimate of
total gross revenue to be recognized from the future distribution of the film.
Accordingly, based on the reduced revenue projections for the film (primarily in
international television revenues), a determination was made by the General
Partner that the Partnership's net investment in "Curacao" of $1,076,664
exceeded the film's estimated net realizable value of $832,500 as of September
30, 1995. As a result, a loss from write-down of film production cost of
$244,164 was incurred to write-down the unamortized cost of the film to its
estimated net realizable value as of September 30, 1995. The film's estimated
net realizable value was calculated based on the General Partner's estimate of
anticipated revenues remaining over the life of the film from international and
domestic television distribution, net of estimated distribution fees and costs,
as of September 30, 1995. These revenue projections were estimated by the
General Partner based on the film's prior distribution history, the remaining
international and domestic territories available to the film for future
television distribution, and the General Partner's previous distribution
experience with other films. As of June 30, 1996, the Partnership's net
investment in the film, after consideration of amortization and the write-down
discussed above, was $764,346. The Partnership plans to recover its remaining
net investment in this film of $764,346 from net revenues generated from
remaining international and domestic television markets.
RESULTS OF OPERATIONS
---------------------
Revenues of the Partnership decreased $3,855, from $70,138 for the three months
ended June 30, 1995 to $66,283 for the three months ended June 30, 1996. For
the six month periods ended June 30, 1995 and June 30, 1996, revenues of the
Partnership decreased $24,981. These decreases were primarily due to a decrease
in domestic and international sales of "The Story Lady," which were $49,237 and
$92,713, respectively, for the three and six month periods ended June 30, 1995
as compared to $44,800 for the three and six month periods ended June 30, 1996.
These decreases in sales for "The Story Lady" were partially offset by increases
in international and domestic sales of "The Little Kidnappers" and "Curacao" of
$3,506 and $19,426, respectively, for the six months ended June 30, 1996 as
compared to the same period in 1995.
Filmed entertainment costs decreased $30,616, from $46,729 for the three months
ended June 30, 1995 to $16,113 for the same period in 1996 and decreased
$49,920, from $127,838 for the six months ended June 30, 1995 to $77,918 for the
six months ended June 30, 1996. These decreases were mainly the result of the
overall decreases in revenues as discussed above. In addition, the decreases
were due to the Partnership's net investment in "The Story Lady" becoming fully
11
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amortized in late 1995, which resulted in no filmed entertainment costs being
recognized in the current year. 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 increased $11,317, from $8,282 for the three
months ended June 30, 1995 to $19,599 for the similar period in 1996 and
increased $8,866, from $32,766 for the six months ended June 30, 1995 to $41,632
for the same period in 1996. These increases are primarily the result of
increased international sales of "Curacao" during 1996 as discussed above, which
had more distribution-related fees and expenses in comparison to sales of the
Partnership's other programming during 1995. These distribution fees and
expenses relate to the compensation due and costs incurred by distributors in
selling the Partnership's programming in the domestic and international markets.
The timing and amount of distribution fees and expenses vary depending upon the
individual market in which programming is distributed.
Operating, general and administrative expenses increased $6,609, from $7,818 for
the three months ended June 30, 1995 to $14,427 for the three months ended June
30, 1996 and increased $5,641, from $19,643 to $25,284 for the six month periods
ended June 30, 1995 and 1996, respectively. These increases are mainly due to
an increase in royalties paid to the writer of "The Little Kidnappers" as well
as increases in direct costs allocable to the operations of the Partnership that
were charged to the Partnership by the General Partner in 1996 as compared to
1995.
Interest income decreased $1,943, from $7,292 for the three months ended June
30, 1995 to $5,349 for the similar period in 1996 and decreased $4,294, from
$15,000 for the six months ended June 30, 1995 to $10,706 for the same period in
1996. These decreases in interest income were the result of lower average
levels of invested cash balances existing during the first six months of 1996 as
compared to the same period in 1995.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A) EXHIBITS
27) FINANCIAL DATA SCHEDULE
B) REPORTS ON FORM 8-K
NONE
13
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<ARTICLE> 5
<S> <C>
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