<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1998.
---------------
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________ .
Commission File Number 0-19075
Jones Programming Partners 1-A, Ltd.
- --------------------------------------------------------------------------------
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
-----------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ________
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
INDEX
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Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position
December 31, 1997 and March 31, 1998 3
Unaudited Statements of Operations
Three Months Ended March 31, 1997 and 1998 4
Unaudited Statements of Cash Flows
Three Months Ended March 31, 1997 and 1998 5
Notes to Unaudited Financial Statements
March 31, 1998 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
PART II. OTHER INFORMATION 12
2
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
------------------------------------------
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
------------- -----------
<S> <C> <C>
ASSETS
------
CASH AND CASH EQUIVALENTS $ 234,842 $ 230,348
RECEIVABLES:
Foreign income receivable 122,528 122,469
Domestic income receivable 5,000 5,000
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,810,687 and $8,818,011
as of December 31, 1997 and March 31, 1998, respectively 76,519 69,195
OTHER ASSETS 3,275 3,275
----------- ----------
Total assets $ 442,164 $ 430,287
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
LIABILITIES:
Accounts payable to affiliates $ 8,303 $ 1,963
Accrued distributions payable to partners - 160,897
Accrued liabilities 4,539 5,000
----------- ----------
Total liabilities 12,842 167,860
----------- ----------
UNEARNED REVENUE 15,556 7,778
----------- ----------
PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (40,831) (42,440)
Accumulated deficit (9,997) (9,979)
----------- ----------
Total general partner's deficit (49,828) (51,419)
----------- ----------
Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of December 31, 1997
and March 31, 1998) 5,459,327 5,459,327
Distributions (4,042,214) (4,201,502)
Accumulated deficit (953,519) (951,757)
----------- ----------
Total limited partners' capital 463,594 306,068
----------- ----------
Total partners' capital 413,766 254,649
----------- ----------
Total liabilities and partners' capital (deficit) $ 442,164 $ 430,287
=========== ==========
</TABLE>
The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
3
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months
Ended March 31,
--------------------
1997 1998
-------- --------
GROSS REVENUES $ 17,918 $ 7,948
COSTS AND EXPENSES:
Costs of filmed entertainment 17,571 7,324
Distribution fees and expenses 9,153 -
Operating, general and administrative expenses 20,451 5,102
-------- --------
Total costs and expenses 47,175 12,426
-------- --------
OPERATING LOSS (29,257) (4,478)
-------- --------
OTHER INCOME (EXPENSE):
Interest income 2,685 6,232
Other income (expense), net (857) 26
-------- --------
Other income, net 1,828 6,258
-------- --------
NET INCOME (LOSS) $(27,429) $ 1,780
======== ========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ (274) $ 18
======== ========
Limited Partners $(27,155) $ 1,762
======== ========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (2.13) $ .14
======== ========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743
======== ========
The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
4
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
For the Three Months
Ended March 31,
--------------------
1997 1998
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (27,429) $ 1,780
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Amortization of filmed entertainment costs 17,571 7,324
Net change in assets and liabilities:
Increase in foreign income receivable (12,610) 59
Decrease in domestic income receivable 41,427 -
Decrease in other assets 387 -
Net change in amounts due to/from affiliates 5,969 (6,340)
Increase (decrease) in accrued liabilities (518) 461
Increase in unearned revenue 60,000 (7,778)
--------- --------
Net cash provided by operating activities 84,797 (4,494)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (160,897) -
--------- --------
Net cash used in financing activities (160,897) -
--------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (76,100) (4,494)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 266,452 234,842
--------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 190,352 $230,348
========= ========
The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
5
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A LIMITED PARTNERSHIP)
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
December 31, 1997 and March 31, 1998 and its results of operations and its
cash flows for the three month periods ended March 31, 1997 and 1998.
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. Because the indirect expenses incurred by the General Partner on
behalf of the Partnership are immaterial, the General Partner generally
does not charge indirect expenses to the Partnership. The General Partner
charged $13,728 and $2,841 to the Partnership for direct expenses for the
three month periods ended March 31, 1997 and 1998, respectively.
(3) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
----------------------------------------------
"The Little Kidnappers"
---------------------
In January 1990, the General Partner, on behalf of the Partnership, entered
into an agreement with Jones Maple Leaf Productions ("Maple Leaf") to
produce a full-length feature film for television entitled "The Little
Kidnappers." The total film cost was approximately $3,200,000. Of this
amount, the Partnership invested approximately $2,794,000, which included a
production and overhead fee of $300,000 paid to the General Partner. As of
March 31, 1998, the Partnership's net investment in the film, after
consideration of amortization, was $6,393. From inception to March 31,
1998, the Partnership has recognized approximately $2,993,000 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 March
31, 1998, $8,915 in net receivables was outstanding from the film's
distributors and licensees. The Partnership anticipates payment of these
amounts over the next three to twenty-four months as collected by
distributors. The Partnership plans to recover its remaining net investment
of $6,393 from net revenues generated in remaining worldwide television and
home video markets from direct distribution efforts to be made on behalf of
the Partnership by the General Partner and by nonaffiliated distributors or
from sale of the Partnership's interests in the film.
"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. In
December 1995, the Partnership fully recovered its remaining net investment
in the film. From inception to March 31, 1998, the Partnership has
recognized approximately $2,126,000 of revenue from this film. As of March
31, 1998, the Partnership had outstanding receivables from the film's
domestic and international distributors and licensees totaling $118,554.
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
6
<PAGE>
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 March
31, 1998, the Partnership has recognized approximately $4,032,000 of
revenue from this film, which included the initial license fee and home
video advance from Showtime of $2,650,000, which was used to finance the
film's production. As of March 31, 1998, the Partnership's net investment
in the film, after consideration of amortization was $62,802. The
Partnership plans to recover its remaining net investment in this film from
the net revenues generated from remaining international and domestic
television markets or from sale of the Partnership's interest in the film.
7
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JONES PROGRAMMING PARTNERS 1-A, LTD.
------------------------------------
(A LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
----------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
FINANCIAL CONDITION
-------------------
Liquidity and Capital Resources
- -------------------------------
The Partnership's principal sources of liquidity are cash on hand and amounts
received from the domestic and international distribution of the Partnership's
programming. The Partnership had $230,348 in cash as of March 31, 1998. It is
not anticipated that the Partnership will invest in any additional programming
projects, but instead will focus on the distribution of its existing programming
projects. The Partnership had outstanding amounts receivable from unaffiliated
distributors totaling approximately $127,000 as of March 31, 1998. The foreign
income receivable of approximately $122,000 will be paid to the Partnership over
the next three to twenty-four months as collected by distributors. The domestic
income receivable of approximately $5,000 will be paid to the Partnership over
the next three months.
Given the near completion of the second cycle distribution of the Partnership's
programming, as previously announced, regular quarterly distributions were
suspended beginning with the quarter ended March 31, 1997. However, upon further
evaluation by the General Partner of the cash reserves and cash operating needs
of the Partnership, a final regular quarterly cash flow distribution totaling
$160,897 will be made for the quarter ending March 31, 1998, to be paid in May
1998. The Partnership will retain a certain level of working capital, including
any necessary reserves, to fund its operating activities. It is anticipated that
any future distributions will only be made from proceeds received from the sale
of the Partnership's assets.
The General Partner, on behalf of the Partnership, is currently beginning to
engage in efforts to sell the Partnership's interests in its programming
projects. Estimates of value obtained from independent consulting firms in late
1996 and early 1997 are being used by the General Partner in planning sales.
There can be no assurance that the ultimate negotiated sales prices of the
programming projects sold to unaffiliated parties will be at least equal to the
films' estimated fair market value. If the General Partner or one of its
affiliates exercises its right to purchase a programming project, however, the
sales price for such a transaction will be equal to the average of three
independent appraisals of the programming project's fair market value. Any sale
of all or substantially all of the Partnership's assets will be subject to the
approval of the partnership's limited partners prior to closing of the sale.
The General Partner cannot predict at this time when or at what price the
Partnership's interests in its programming projects ultimately will be sold.
However, any direct costs incurred by the General Partner on behalf of the
Partnership in soliciting and arranging for the sale of the Partnership's
programming projects will be charged to the Partnership. It is anticipated that
proceeds from the sale of the Partnership's interests in its programming will be
distributed to the partners upon such sale. Based on the independent estimates
of value obtained for the Partnership's programming projects, it now appears
likely that the projects together with all prior distributions paid to the
limited partners will not be sufficient to return to the limited partners 100%
of their initial capital contributions made to the Partnership.
The General Partner believes that the Partnership has, and will continue to
have, sufficient liquidity to fund its operations and to meet its obligations so
long as quarterly distributions are suspended. 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 subsequently 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 March 31, 1998. The Canadian Broadcasting
Corporation license expired in the second quarter of 1994 and was not renewed.
8
<PAGE>
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 March 31, 1998, 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. 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
international home video markets for a period of five years. This agreement
expired in October 1995. As of March 31, 1998, international gross sales made
under the distribution agreement totaled $1,165,070, of which $363,753 was
retained by the distributor for its fees and marketing costs.
The international distribution rights for "The Little Kidnappers" are now being
handled by the General Partner on behalf of the Partnership. The General Partner
will generally 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. In December
1996, the General Partner, acting on behalf of the Partnership, entered into a
distribution agreement with an unaffiliated party, granting the rights to
distribute "The Little Kidnappers" in various international television markets,
including France, the United Kingdom, Scandinavia, Africa and the Middle East,
for license periods of five to six years and a license fee of $35,000. The
General Partner will not earn a distribution fee relating to this agreement. As
the license periods under this agreement vary be territory, $27,222 in revenue
from this agreement has been recognized by the Partnership as of March 31, 1998.
The remaining $7,778 will be recognized by the Partnership over the next six to
twelve months.
In May 1997, the General Partner, acting on behalf on the Partnership, entered
into a five year licensing agreement with an unaffiliated third party, granting
the rights to distribute "The Little Kidnappers" in the North American home
video market. Under this agreement, the Partnership is entitled to a $20,000
license fee, of which $15,000 has been received by the Partnership as of March
31, 1998. The remaining $5,000 is expected to be received by the Partnership
over the next three months. In addition to the initial license fee, the
Partnership will also be entitled to a home video royalty of 10 to 20 percent of
net retail sale proceeds earned by the licensee, with the royalty percentage
dependent on the per video unit sales price obtained. As of March 31, 1998, the
Partnership had recognized $20,000 in license fee revenue under this agreement.
The Partnership anticipates that it will recover its remaining net investment in
this film of $6,393 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 and other non-affiliated
distributors or from sale of the Partnership's interests in the film.
"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 March 31, 1998,
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 March 31, 1998, 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 has fully
recovered its remaining distribution costs, any additional sales, net of fees,
will flow to the Partnership. However, the Partnership does not expect to
receive any additional proceeds under this agreement.
9
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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 March 31,
1997, international gross sales totaled $1,453,599, of which $428,798 was
retained by the distributor for its fees and marketing costs, with the remaining
$1,024,801 due to the Partnership. As of March 31, 1998, the Partnership had
received $931,273 of such amounts. The remaining $93,528 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 March
31, 1998, the Partnership had received monthly license fee payments totaling the
remaining $150,000.
In December 1996, the General Partner, on behalf of the Partnership, entered
into an agreement with Lifetime Television ("Lifetime"), granting rights to
distribute "The Story Lady" in the domestic cable and satellite television
markets for a period of one and a half years commencing in July 1997. In
accordance with the terms of the agreement, the Partnership is entitled to a
$75,000 license fee, of which $50,000 was received in two equal payments in
January 1997 and August 1997. The remaining $25,000 is due to the Partnership in
July 1998.
In May 1997, the General Partner, acting on behalf of the Partnership, entered
into a five year licensing agreement with an unaffiliated third party, granting
the rights to distribute "The Story Lady" in the North American home video
market. Under this agreement, the Partnership is entitled to a $20,000 license
fee which has been received by the Partnership as of March 31, 1998. In addition
to the initial license fee, the Partnership will also be entitled to a home
video royalty of 10 to 20 percent of net retail sale proceeds earned by the
licensee, with the royalty percentage dependent on the per video unit sales
price obtained. As of March 31, 1998, the Partnership has recognized $20,000 in
license fee revenue under this agreement. The Partnership has fully recovered
its 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 March 31, 1998, 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 March 31, 1998, the Partnership
had recorded international gross revenues of $1,245,075, of which $355,733 was
retained by the distributor for its fees and marketing costs. The Partnership
had received the remaining $889,342 as of March 31, 1998.
10
<PAGE>
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 production cost
$244,164 was incurred to write-down the unamortized cost of the film to its
estimated net realizable value as of September 30, 1995.
Likewise, in the third quarter of 1996, the General Partner again reassessed the
anticipated gross revenue remaining from the distribution of "Curacao" based on
revised estimated television sales projections and actual results of the film's
distribution in comparison to the film's prior projections. A determination was
made by the General Partner that the Partnership's net investment in "Curacao"
of $756,744 exceeded the film's estimated net realizable value of $100,000 as of
September 30, 1996, resulting in a write-down of $656,744. The film's estimated
net realizable value was calculated based on an 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,
1996.
These revenue projections were estimated by the General Partner and the film's
distributor 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 and the distributor's
previous distribution experience with other films. As of March 31, 1998, the
Partnership's net investment in the film, after consideration of amortization
and the write-downs discussed above, was $62,802. The Partnership plans to
recover its remaining net investment in this film of $62,802 from the net
revenues generated from remaining international and domestic television markets
or from the sale of the Partnership's interests in the film.
RESULTS OF OPERATIONS
---------------------
Revenues of the Partnership decreased $9,970, from $17,918 to $7,948 for the
three months ended March 31, 1997 and 1998, respectively. This decrease was due
primarily to a decrease in the international and domestic sales of "Curacao" of
$12,853, from $12,853 to $0, for the three months ended March 31, 1997 and 1998,
respectively. This decrease was partially offset by increases in the revenue
received from the international and domestic sales of "The Little Kidnappers"
and "The Story Lady" for the three months ended March 31, 1998 as compared to
the same period in 1997.
Filmed entertainment costs decreased $10,247, from $17,571 to $7,324 for the
three months ended March 31, 1997 and 1998, respectively. This decrease was the
result of decreased film revenues as 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 decreased $9,153, from $9,153 to $0 for the three
months ended March 31, 1997 and 1998, respectively. This decrease resulted
primarily from the decreased sales of "Curacao" as discussed above. These
distribution fees and expenses relate to the compensation due and costs incurred
by distributors in connection with 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 decreased $15,349, from $20,451
to $5,102 for the three months ended March 31, 1997 and 1998, respectively. This
decrease was due primarily to a decrease in the direct costs allocable to the
operations of the Partnership that were charged to the Partnership by the
General Partner and its affiliates during the three months ended March 31, 1998
as compared to the same period in 1997. This decrease in direct costs allocable
to the Partnership's operations resulted mainly from the decrease in General
Partner personnel expenses and the decrease in direct time spent by the
affiliates of the General Partner on the accounting and legal functions of the
Partnership.
Interest income increased $3,547, from $2,685 to $6,232 for the three months
ended March 31, 1997 and 1998, respectively. This increase in interest income
was the result of higher average levels of invested cash balances existing
during the first three months of 1998 as compared to the same period in 1997.
11
<PAGE>
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
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES PROGRAMMING PARTNERS 1-A, LTD.
BY: JONES ENTERTAINMENT GROUP, LTD.
General Partner
By: /s/ Steven W. Gampp
------------------------------------
Steven W. Gampp
Vice President/Finance and Treasurer
(Principal Financial Officer)
Dated: May 14, 1998
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 230,348
<SECURITIES> 0
<RECEIVABLES> 127,469
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 430,287
<CURRENT-LIABILITIES> 167,860
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 254,649
<TOTAL-LIABILITY-AND-EQUITY> 430,287
<SALES> 0
<TOTAL-REVENUES> 7,948
<CGS> 0
<TOTAL-COSTS> (12,426)
<OTHER-EXPENSES> 26
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,232
<INCOME-PRETAX> 1,780
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,780
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,780
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
