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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, 1995
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)
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 (Registrant's telephone no.
office and Zip Code) including area code)
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
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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
license original programming (the "Programming"). The Partnership generates
revenues from the licensing of the Programming. As of December 31, 1995, 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 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 December 31, 1995, the Partnership's net investment in the
film, after consideration of amortization, was $102,276. From inception to
December 31, 1995, the Partnership has recognized approximately $2,890,000 of
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 December
31, 1995, $110,205 in receivables was outstanding from the film's distributors
and licensees. The Partnership anticipates payment of these amounts in 1996.
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 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
December 31, 1995, the Partnership has fully recovered its remaining net
investment in this film. From inception to December 31, 1995, the Partnership
has recognized approximately $1,925,000 of revenue from this film. As of
December 31, 1995, the Partnership had outstanding receivables from the film's
domestic and international distributors and licensees totaling $347,114. 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 production cost of the film incurred by the
Partnership 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 presale and supervising production of this picture. From inception to
December 31, 1995, the Partnership has recognized approximately $3,894,000 of
revenue from this film, which included the initial license fee and home video
advances from Showtime of $2,650,000, which was used to finance the film's
production.
During the third quarter of 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
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production cost of $244,164 was incurred to write-down the unamortized cost of
the film to its estimated net realizable value. 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 December 31, 1995, the Partnership's net
investment in the film, after consideration of amortization and the write-down
discussed above, was $832,388. The Partnership plans to recover its remaining
net investment in this film of $832,388 from the net revenues generated from
remaining international and domestic television markets.
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. 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.
See further discussion of the Partnership's distribution efforts concerning
these films in Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The Partnership has encountered and will continue to encounter
intense competition in connection with its attempts to distribute the
Programming. There is competition within the television programming industry
for exhibition time on cable television networks, broadcast networks and
independent television stations. In most cases, potential customers of the
Partnership's Programming also produce their own competitive programs. In
recent years, the number of television production companies and the volume of
programming being distributed have increased, thereby intensifying this
competition. Acceptance of the Programming in certain distribution media may
be limited and the Programming will compete with other types of television
programming in all domestic and international distribution media and markets.
The success of programming is also dependent in part on public taste, which is
unpredictable and susceptible to change. In international markets, the
Partnership will encounter additional risks, such as foreign currency rate
fluctuations, compliance and regulatory requirements, differences in tax laws,
and economic and political environments. Profitability of the Partnership
will depend largely on the Programming's acceptance in various domestic and
international television markets, on the level of distribution of the
Programming in such markets and the license fees and library values generated
thereby, which are outside the control of the Partnership. There can be no
assurance that the distribution efforts made by the Partnership, the General
Partner or unaffiliated parties on behalf of the Partnership for the
Programming will be sufficient to recover the Partnership's investment or
produce profits for the Partnership.
ITEM 2. PROPERTIES
See Item 1.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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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, 1996, the number of equity
security holders in the Partnership was 724.
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ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Years Ended December 31,
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1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
Gross Revenues $ 699,023 $ 413,756 $4,839,139 $ 865,228 $ 478,743
Costs of Filmed Entertainment 250,173 345,428 4,622,494 746,550 445,956
Distribution Fees and Expenses 113,877 63,583 543,763 273,040 5,355
Loss from Write-Down of
Film Production Cost 244,164 - - - -
Operating, General and Administrative
Expenses 39,454 37,349 38,519 48,173 21,280
Operating Income (Loss) 51,355 (32,604) (365,637) (202,535) 6,152
Net Income (Loss) 80,758 (9,389) (360,874) (124,368) 169,036
Net Income (Loss) per Limited
Partnership Unit 6.27 (.73) (28.04) (9.66) 13.13
Weighted Average Number of Limited
Partnership Units Outstanding 12,743 12,743 12,743 12,743 12,743
General Partner's Deficit (36,299) (30,671) (24,141) (14,096) (6,577)
Limited Partners' Capital 1,802,941 2,360,143 3,006,590 4,001,007 4,745,354
Total Assets 1,933,539 2,498,982 3,374,770 6,972,638 5,772,382
Debt - - - - -
General Partner Advances - 1,100 225,418 292,055 138,685
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
1995 Compared to 1994
Revenues of the Partnership increased $285,267, from $413,756 in 1994 to
$699,023 in 1995. This increase was primarily due to a $264,065 increase in
international distribution sales of "The Story Lady" in 1995 and the
recognition of a $178,659 license fee relating to a licensing agreement entered
into in October 1995 for "The Story Lady." These increases were partially
offset by a decrease of $33,735 in domestic sales of "The Story Lady" and a
decrease of $169,094 in domestic and international sales of "The Little
Kidnappers" in 1995. International and domestic sales of "Curacao" increased
$45,372, from $114,224 in 1994 to $159,596 in 1995.
Filmed entertainment costs decreased $95,255, from $345,428 in 1994 to $250,173
in 1995. This decrease resulted primarily from the overall net decrease in
revenues between "The Little Kidnappers" and "Curacao" as discussed above. In
addition, this decrease was due to the Partnership's net investment in "The
Story Lady" becoming fully amortized during 1995 prior to the full recognition
of the $178,659 license fee discussed above. Filmed entertainment costs are
amortized over the life of the film in the ratio that current gross revenues
bear to anticipated total gross revenues. Distribution fees and expenses
increased $50,294, from $63,583 in 1994 to $113,877 in 1995. This increase was
the result of the overall increased sales of the Partnership's programming in
1995 as discussed above. 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 and distribution media in which programming is distributed.
Loss from write-down of film production cost increased $244,164 from $-0- in
1994 to $244,164 in 1995. This increase was the result of the write-down of
the Partnership's net investment in "Curacao" to the film's estimated net
realizable value of $832,500 as of September 30, 1995 based on the film's
estimated future revenue sources.
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Interest income increased $6,188, from $23,215 in 1994 as compared to $29,403
in 1995. This increase in interest income was primarily the result of higher
average levels of invested cash balances existing during 1995 as compared to
1994.
The Partnership realized net income of $80,758 in 1995 as compared to a net
loss of $9,389 in 1994. This change was primarily the result of the increases
in film revenue and decreases in costs of filmed entertainment which were
partially offset by the $244,164 loss from write-down of film production cost
recognized during 1995 and an increase in distribution fees and expenses.
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
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 fees 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
$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.
Distribution fees and expenses decreased $480,180, from $543,763 in 1993 to
$63,583 in 1994. This decrease was the result of decreases in domestic and
international sales of the Partnership's programming.
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 was primarily due to a
decrease in costs of filmed entertainment and distribution fees and expenses
exceeding the decrease in revenues as well as an increase in interest income.
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 $502,435 in cash as of December 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 had outstanding amounts receivable from
unaffiliated distributors totaling $457,319 as of December 31, 1995. Of this
amount, $217,319 will be paid to the Partnership as collected by the
distributors and $100,000, which represents the final license fee due from The
Disney Channel for the domestic telecast rights for "The Little Kidnappers," is
expected to be paid in 1996. The remaining $140,000 will be paid to the
Partnership over the next fourteen months.
For the year ending December 31, 1995, the Partnership declared distributions
to partners totaling $643,588, of which $160,897 was paid in May 1995, $160,897
was paid in August 1995, and $160,897 was paid in November 1995, with the
remaining $160,897 paid in February 1996. These distributions are made using
cash on hand, interest income and cash provided by operating activities.
Distributions are expected to continue during 1996, although no determination
has been made regarding any specific level of 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. Cash flow from operating activities will be generated primarily
from the Partnership's programming projects as follows:
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"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. As of December 31, 1995,
the Partnership has 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.
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 December 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 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.
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 as the international distribution rights 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 December 31,
1995, international gross sales made under the original distribution agreement
totaled $1,134,175, of which $357,878 was retained by the distributor for its
fees and marketing costs. The remaining $776,297 will be paid to the
Partnership as collected by the distributor. As of December 31, 1995, the
Partnership had received $766,092 of such amounts. The remaining $10,205 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 anticipates that it will recover its
remaining net investment in this film of $102,276 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 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
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
December 31, 1995, 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 December
31, 1995, net sale proceeds under this arrangement totaled $99,312, which were
applied towards the General Partner's recoupment of its distribution costs. As
the General Partner had fully recovered its remaining distribution costs as of
December 31, 1995, any additional sales, net of fees, will flow to the
Partnership.
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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 December
31, 1995, international gross sales totaled $1,347,348, of which $353,783 was
retained by the distributor for its fees and marketing costs, with the
remaining $993,565 due to the Partnership. As of December 31, 1995, the
Partnership had received $786,451 of such amounts. The remaining $207,114 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 right 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 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. In addition, the Partnership has received monthly
license fee payments totaling $10,000 in 1995. The remaining balance of the
licensing agreement of $140,000 will be paid to the Partnership over the next
fourteen 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 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 December
31, 1995, gross sales made under this arrangement totaled $117,358, of which
$29,340 was retained by the distributor for its fees.
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
December 31, 1995, the Partnership had recorded international gross revenues of
$1,124,953, of which $322,988 was retained by the distributor for is fees and
marketing costs, with the remaining $801,965 received by the Partnership.
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. 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
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experience with other films. As of December 31, 1995, the Partnership's net
investment in the film, after consideration of amortization and the write-down
discussed above, was $832,388. The Partnership plans to recover its remaining
net investment in this film of $832,388 from the net revenues generated from
remaining international and domestic television markets.
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Item 8. Financial Statements
JONES PROGRAMMING PARTNERS 1-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994
INDEX
Page
----
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, 1995 and 1994,
and the related statements of operations, partners' capital (deficit) and cash
flows for the years ended December 31, 1995, 1994 and 1993. 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, 1995 and 1994, and the results of its operations
and its cash flows for the years ended December 31, 1995, 1994 and 1993 in
conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 20, 1996.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------------------------------------
1995 1994
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<S> <C> <C>
ASSETS
------
CASH AND CASH EQUIVALENTS (Note 2) $ 502,435 $ 668,088
RECEIVABLES:
Foreign income receivable (Note 5) 317,319 185,007
Domestic income receivable, net of unamortized
discount of $-0- and $7,858 at December 31, 1995
and 1994, respectively (Note 5) 140,000 192,142
Accounts receivable from affiliates 36,848 -
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $7,952,542 and $7,458,205
as of December 31, 1995 and 1994, respectively (Notes 2, 4 and 5) 934,664 1,450,888
OTHER ASSETS 2,273 2,857
---------- ------------
Total assets $1,933,539 $ 2,498,982
========== ============
</TABLE>
The accompanying notes to the financial statements
are an integral part of these financial statements.
12
<PAGE> 13
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
---------------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
LIABILITIES:
Accounts payable to affiliates $ - $ 1,100
Accrued distributions payable to partners 160,897 160,897
Accrued liabilities 6,000 7,513
------------- ------------
Total liabilities 166,897 169,510
------------- ------------
PARTNERS' CAPITAL (DEFICIT) (Note 3):
General partner -
Contributed capital 1,000 1,000
Distributions (34,395) (27,959)
Accumulated deficit (2,904) (3,712)
------------- ------------
Total general partner's deficit (36,299) (30,671)
------------- ------------
Limited partners -
Contributed capital
(12,743 units outstanding at December 31, 1995 and 1994) 5,459,327 5,459,327
Distributions (3,405,062) (2,767,910)
Accumulated deficit (251,324) (331,274)
------------- ------------
Total limited partners' capital 1,802,941 2,360,143
------------- ------------
Total partners' capital 1,766,642 2,329,472
------------- ------------
Total liabilities and partners' capital $ 1,933,539 $ 2,498,982
============= ============
</TABLE>
The accompanying notes to the financial statements
are an integral part of these financial statements.
13
<PAGE> 14
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------
1995 1994 1993
-------------- ------------- -------------
<S> <C> <C> <C>
GROSS REVENUES (Notes 2 and 5) $ 699,023 $ 413,756 $ 4,839,139
COSTS AND EXPENSES:
Costs of filmed entertainment (Notes 2 and 5) 250,173 345,428 4,622,494
Distribution fees and expenses (Note 2) 113,877 63,583 543,763
Loss from write-down of film production cost
(Notes 2 and 5) 244,164 - -
Operating, general and administrative
expenses (Note 4) 39,454 37,349 38,519
------------ ------------ ------------
Total costs and expenses 647,668 446,360 5,204,776
------------ ------------ ------------
OPERATING INCOME (LOSS) 51,355 (32,604) (365,637)
------------ ------------ ------------
OTHER INCOME:
Interest income 29,403 23,215 4,763
------------ ------------ ------------
Total other income 29,403 23,215 4,763
------------ ------------ ------------
NET INCOME (LOSS) $ 80,758 $ (9,389) $ (360,874)
============ ============ ============
ALLOCATION OF NET INCOME (LOSS):
General Partner $ 808 $ (94) $ (3,609)
============ ============ ============
Limited Partners $ 79,950 $ (9,295) $ (357,265)
============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 6.27 $ (.73) $ (28.04)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743 12,743
============ ============ ============
</TABLE>
The accompanying notes to the financial statements
are an integral part of these financial statements.
14
<PAGE> 15
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------------------------------
1995 1994 1993
-------------- -------------- -------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (30,671) $ (24,141) $ (14,096)
Distributions (6,436) (6,436) (6,436)
Net income (loss) for year 808 (94) (3,609)
----------- ----------- -----------
Balance, end of year $ (36,299) $ (30,671) $ (24,141)
=========== =========== ===========
LIMITED PARTNERS:
Balance, beginning of year $ 2,360,143 $ 3,006,590 $ 4,001,007
Distributions (637,152) (637,152) (637,152)
Net income (loss) for year 79,950 (9,295) (357,265)
----------- ----------- -----------
Balance, end of year $ 1,802,941 $ 2,360,143 $ 3,006,590
=========== =========== ===========
TOTAL PARTNERS' CAPITAL $ 1,766,642 $ 2,329,472 $ 2,982,449
=========== ========== ===========
</TABLE>
The accompanying notes to the financial statements
are an integral part of these financial statements
15
<PAGE> 16
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years Ended December 31,
---------------------------------------------
1995 1994 1993
--------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 80,758 $ (9,389) $ (360,874)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Amortization of filmed entertainment costs 250,173 345,428 4,622,494
Loss from write-down of film production cost 244,164 - -
Amortization of discount (7,858) (20,344) (24,507)
Decrease (increase) in foreign income
receivable (132,312) 304,403 (85,227)
Decrease in domestic income receivable 60,000 75,000 75,000
Decrease (increase) in other assets 584 14,297 (1,380)
Net change in amounts due to/from affiliates (37,948) (224,318) (66,637)
Increase (decrease) in trade accounts payable and
accrued liabilities (1,513) 1,507 (3,644)
Decrease in unearned revenue - - (2,023,125)
--------- --------- -----------
Net cash provided by operating activities 456,048 486,584 2,132,100
--------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in production advances 21,887 (8,974) (358,409)
Payment of production and overhead fee to General Partner - - (500,000)
--------- --------- -----------
Net cash provided by (used in) investing activities 21,887 (8,974) (858,409)
--------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (643,588) (643,588) (643,588)
--------- --------- -----------
Net cash used in financing activities (643,588) (643,588) (643,588)
--------- --------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (165,653) (165,978) 630,103
CASH AND CASH EQUIVALENTS, beginning of year 668,088 834,066 203,963
--------- --------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 502,435 $ 668,088 $ 834,066
========= ========= ===========
</TABLE>
The accompanying notes to the financial statements
are an integral part of these financial statements.
16
<PAGE> 17
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS
Organized in April 1989, Jones Programming Partners 1-A, Ltd. (the
"Partnership") is a limited Partnership formed pursuant to the laws of
the State of Colorado to engage in the development, production,
acquisition, licensing and distribution 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 - The Partnership considers all
highly-liquid investments with maturity when purchased of three months
or less to be cash equivalents.
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
international licensing of programming, which may include the receipt
of non-refundable guaranteed amounts, are recognized when such amounts
are known, the film is available for exhibition or telecast, and when
certain other SFAS No. 53 criteria are met. Advances received for
licensing or other purposes prior to exhibition or telecast are
deferred and recognized as revenue when the above criteria are met.
Investment in and Advances for Film Production - Investment in film
production consists of advances to production entities for story
rights, production costs, and film completion costs, and is stated at
the lower of cost or estimated net realizable value. In addition,
film production and overhead fees payable to the General Partner have
been capitalized and included in investment in film production. Film
production costs are amortized based upon the individual-film-forecast
method. 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 advances outstanding.
Distribution Costs - Distribution fees and expenses incurred in
connection with domestic and international film distribution are
recorded at the time that the related licensing fees are recognized as
revenue by the Partnership. Similarly, the Partnership expenses film
advertising costs related to distribution when the advertising takes
place.
Use of Estimates- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications - Certain prior year amounts have been reclassified
to conform to the 1995 presentation.
(3) PARTNERS' CAPITAL
The capitalization of the Partnership is set forth in the accompanying
Statements of Partners' Capital (Deficit). Currently, no existing
limited partner is obligated to make any additional contributions to
the Partnership. The General Partner purchased its interest in the
Partnership by contributing $1,000 to Partnership capital.
Profits, losses and distributions of the Partnership are 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/losses and distributions will generally be allocated 80
percent to the
17
<PAGE> 18
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 AFFILIATES
The General Partner receives a production and overhead fee for
administering the affairs of the Partnership equal to 12 percent of
the lower of actual or budgeted direct costs of each of the
Partnership's programming projects. This fee was calculated and
payable at the time principal photography commenced on each particular
project. In 1993, the Partnership paid a $500,000 production and
overhead fee to the General Partner for the film "Curacao."
The General Partner is also entitled to reimbursement from the
Partnership for its direct and indirect expenses allocable to the
operation of the Partnership, which include, but are not limited to,
rent, supplies, telephone, travel, legal expenses, accounting
expenses, preparing and distributing reports to investors and salaries
of any full or part-time employees. The General Partner allocated
$11,204, $6,035 and $3,280 of such expenses to the Partnership for the
years ended December 31, 1995, 1994, and 1993 respectively.
(5) 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 has invested approximately
$2,794,000, which includes a production and overhead fee of $300,000
paid to the General Partner. As of December 31, 1995, the
Partnership's net investment in the film, after consideration of
amortization, is $102,276. From inception to December 31, 1995, the
Partnership has recognized approximately $2,890,000 of 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
December 31, 1995, $110,205 in receivables was outstanding from the
film's distributors and licensees. The Partnership expects to be paid
these amounts during 1996.
"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 its share of $1,183,000 in
return for worldwide 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 December 31, 1995, the Partnership
has fully recovered its remaining net investment in the film. From
inception to December 31, 1995, the Partnership has recognized
approximately $1,925,000 of revenue from this film. As of December
31, 1995, the Partnership had outstanding receivables from the film's
domestic and international distributors and licensees totaling
$347,114. 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 production 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. From inception to December
31, 1995, the Partnership has recognized approximately
18
<PAGE> 19
$3,894,000 of 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.
During the third quarter of 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. In accordance with Statement of Financial accounting Standards
("SFAS") No. 53, unamortized film production costs are to be
periodically compared with the net realizable value of a film, which
is determined based on the total estimated future gross revenues from
the film less any direct costs of distribution. If estimated future
gross revenues from a film are not sufficient to recover the
unamortized film costs and related distribution expenses, the
unamortized film costs are to be written down to the film's net
realizable value. 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 of
$244,164 was incurred to write-down the unamortized cost of the film
to its estimated net realizable value. 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 December 31, 1995, the
Partnership's net investment in the film, after consideration of
amortization and the write-down discussed above, was $832,388.
(6) INCOME TAXES
Income tax provision (benefit) resulting from the Partnership's
operations are not reflected in the accompanying financial statements
as such amounts accrue directly to the partners. The Federal and
state income tax returns of the Partnership are prepared and filed by
the General Partner.
The Partnership's tax returns, the qualification of the Partnership as
a limited partnership 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
19
<PAGE> 20
respect to the Partnership's tax status or to the Partnership's
recorded income or loss, the tax liability of the general and limited
partners would be adjusted accordingly.
The Partnership's only significant book-tax differences between the
financial reporting and tax bases of the Partnership's assets and
liabilities are associated with the difference between the amount of
film production cost amortization and loss from write-down of film
production cost recognized under generally accepted accounting
principles and the amount of expense allowed for tax purposes.
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 66 Chairman of the Board and
Chief Executive Officer
Richard K. Rosenberg 51 Executive Vice President and Director
Elizabeth M. Steele 44 Secretary
Jay B. Lewis 37 Treasurer
Derek H. Burney 56 Director
Wilfred N. Cooper, Sr. 65 Director
J. Rodney Dyer 60 Director
William C. Nestel 47 Director
David K. Zonker 42 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 principal shareholder, Jones 21st Century, Inc., 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
and the Executive Committee of the National Cable Television Association. He
also is on the Executive Committee of Cable in the Classroom, an organization
dedicated to education via cable. Additionally, in March 1991, Mr. Jones was
appointed to the Board of Governors for the American Society for Training and
Development, and in November 1992 to the Board of Education Council of the
National Alliance of Business. Mr. Jones is also a founding member of the
James Madison Council of the Library of Congress and is on the Board of
Governors of the American Society of Training and Development. Mr. Jones is a
past director and member of the Executive Committee of C-Span. Mr. Jones has
been the recipient of several awards including 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 Donald G. McGannon
award for the advancement of minorities and women in cable; the STAR Award from
American Women in Radio and Television, Inc. for exhibition of a commitment to
the issues and concerns of women in television and radio; the Women in Cable
Accolade in 1990 in recognition of support of this organization; the Most
Outstanding Corporate Individual Achievement award from the International
Distance Learning Conference; the Golden Plate Award from the American Academy
of Achievement for his advances in distance education; the Man of the Year
named by the Denver chapter of the Achievement Rewards for College Scientists;
and in 1994 Mr. Jones was inducted into Broadcasting and Cable's Hall of Fame.
Mr. Rosenberg was appointed a director of the General Partner in March
1996 and was elected Executive Vice President of the General Partner in
February 1996. Mr. Rosenberg joined Jones Digital Century, Inc., an
21
<PAGE> 22
affiliate of the General Partner, in October 1995 as Vice President of Business
Affairs. Mr. Rosenberg has been involved in business affairs for the
entertainment industry for 23 years. Prior to joining Jones Digital Century,
Inc., Mr. Rosenberg was executive vice president and chief operating officer of
Spencer Entertainment, a diversified multimedia entertainment company. He also
served as vice president of legal and business affairs at Cinetel Films. Mr.
Rosenberg has operated his own entertainment and software businesses, including
RKR Pictures, inc., an independent production and distribution company, where
he financed, produced and distributed six motion pictures, including Alice
Sweet Alice, starring Brooke Shields and The Wild Duck with Liv Ullman and
Jeremy Irons. Mr. Rosenberg is the author of Entertainment Industry Contracts
- - Negotiating and Drafting Guide. He is a member of the editorial board for
the Entertainment Law and Finance Journal, the California, New York, New Jersey
and Florida Bar Associations, ASCAP and BMI, and currently serves as an
arbitrator for both the American Film Marketing Association and the American
Arbitration Association's Entertainment Industry Panel.
Ms. Elizabeth M. Steele is Secretary of the General Partner. She is
also Vice President/General Counsel and Secretary of Jones Intercable, Inc.
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.
Mr. Jay B. Lewis was elected Treasurer of the General Partner in
February 1996. Mr. Lewis is Vice President/Finance and Treasurer for Jones
International, Ltd., an affiliate of the General Partner, and certain of its
subsidiaries. Mr. Lewis joined Jones Spacelink, Ltd., a former affiliate of
the General Partner, in February 1986 as Assistant Controller, was promoted to
Controller in June 1987 and was elected its Treasurer in June 1994.
Substantially all of the assets of Jones Spacelink, Ltd. were acquired by Jones
Intercable, Inc., an affiliate of the General Partner, in December 1994. Prior
to joining Jones Spacelink, Ltd., Mr. Lewis was employed by Arthur Young &
Company, a public accounting firm.
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 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.
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. William C. Nestel was elected a director of the General Partner in
July 1995. Mr. Nestel has been an employee of affiliates of the General
Partner since June 1995. From 1994 until joining the Jones organization, Mr.
Nestel was a partner with Abracadabra Interactive Entertainment, where he was
involved in the design of several interactive projects. During the same time
period, Mr. Nestel was also involved in establishing a strategic relationship
with Electronic Arts and UnderProd, a major independent production company
affiliated with Sony
22
<PAGE> 23
Entertainment. During the period 1992 to 1993, Mr. Nestel was a consultant to
Rastar Productions. From 1987 to 1992, Mr. Nestel was Vice Chairman of Rastar
Productions where his responsibilities included administration of production,
business, legal and all other company operations. Prior to joining Rastar
Productions, Mr. Nestel was an attorney at the Los Angeles law firm of Wood,
Lucksinger and Epstein from 1982 until 1987. In the early 1980s, Mr. Nestel
was Vice President/Business Affairs of CBS Theatrical Films and during the late
1970s he was Vice President of Paramount Pictures.
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.
Derek H. Burney and William C. Nestel are directors of the General
Partner. Reports by Messrs. Burney and Nestel with respect to the ownership of
limited partnership interests in the Partnership required by Section 16(a) of
the Securities Exchange Act of 1934, as amended, were not filed within the
required time. Neither Mr. Burney nor Mr. Nestel 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 1995.
The General Partner is entitled to reimbursement from the Partnership
for certain allocated general 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
23
<PAGE> 24
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner and certain of its affiliates with
respect to the Partnership. In 1995, the General Partner allocated $11,204 of
such expenses to the Partnership.
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 published prime rate plus 2 percent. No advances
were made in 1995, and thus no interest was paid to the General Partner by the
Partnership in 1995.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements
2. Schedules - None.
3. The following exhibits are filed herewith:
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.
(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 29, 1996 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.
By: /s/ GLENN R. JONES
-----------------------------------
Glenn R. Jones
Chairman of the Board
and Chief Executive Officer
Dated: March 29, 1996 (Principal Executive Officer)
By: /s/ JAY B. LEWIS
-----------------------------------
Jay B. Lewis
Treasurer
(Principal Financial and
Dated: March 29, 1996 Accounting Officer)
By: /s/ RICHARD K. ROSENBERG
-----------------------------------
Richard K. Rosenberg
Dated: March 29, 1996 Executive Vice President and
Director
By: /s/ DEREK H. BURNEY
-----------------------------------
Derek H. Burney
Dated: March 29, 1996 Director
By: /s/ WILFRED N. COOPER, SR.
-----------------------------------
Wilfred N. Cooper, Sr.
Dated: March 29, 1996 Director
By: /s/ J. RODNEY DYER
-----------------------------------
J. Rodney Dyer
Dated: March 29, 1996 Director
25
<PAGE> 26
By:
-----------------------------------
William C. Nestel
Dated: March , 1996 Director
By:
-----------------------------------
David K. Zonker
Dated: March , 1996 Director
26
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------- ----------- ------
<S> <C> <C>
4.1 Limited Partnership Agreement.(1)
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 502,435
<SECURITIES> 0
<RECEIVABLES> 494,167
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,933,539
<CURRENT-LIABILITIES> 166,897
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,766,642
<TOTAL-LIABILITY-AND-EQUITY> 1,933,539
<SALES> 0
<TOTAL-REVENUES> 699,023
<CGS> 0
<TOTAL-COSTS> 647,668
<OTHER-EXPENSES> (29,403)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 80,758
<INCOME-TAX> 0
<INCOME-CONTINUING> 80,758
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 80,758
<EPS-PRIMARY> 6.27
<EPS-DILUTED> 6.27
</TABLE>