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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1999.
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[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from __________ to __________.
Commission File Number 0-19075
Jones Programming Partners 1-A, Ltd.
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Exact name of registrant as specified in charter
Colorado #84-1088820
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State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, Englewood, Colorado 80112
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Address of principal executive office
(303) 792-3111
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Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __X__ No _____
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JONES PROGRAMMING PARTNERS 1-A, LTD.
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INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position
December 31, 1998 and March 31, 1999 3
Unaudited Statements of Operations
Three Months Ended March 31, 1998 and 1999 4
Unaudited Statements of Cash Flows
Three Months Ended March 31, 1998 and 1999 5
Notes to Unaudited Financial Statements
March 31, 1999 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II. OTHER INFORMATION 13
</TABLE>
2
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JONES PROGRAMMING PARTNERS 1-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
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December 31, March 31,
1998 1999
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ASSETS
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CASH AND CASH EQUIVALENTS $ 90,672 $ 105,309
RECEIVABLES:
Foreign income receivable 25,275 24,897
Domestic income receivable 81,122 47,500
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,822,233 and $8,824,538
as of December 31, 1998 and March 31, 1999, respectively 64,973 62,668
OTHER ASSETS 3,275 3,275
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Total assets $ 265,317 $ 243,649
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
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LIABILITIES:
Accounts payable to affiliates $ 11,045 $ 8,137
Unearned revenue 3,889 -
Accrued liabilities 115,010 103,597
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Total liabilities 129,944 111,734
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PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (42,440) (42,440)
Accumulated deficit (11,172) (11,207)
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Total general partner's deficit (52,612) (52,647)
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Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of December 31, 1998
and March 31, 1999) 5,459,327 5,459,327
Distributions (4,201,502) (4,201,502)
Accumulated deficit (1,069,840) (1,073,263)
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Total limited partners' capital 187,985 184,562
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Total partners' capital (deficit) 135,373 131,915
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Total liabilities and partners' capital (deficit) $ 265,317 $ 243,649
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</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
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For the Three Months
Ended March 31,
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1998 1999
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GROSS REVENUES $ 7,948 $ 4,278
COSTS AND EXPENSES:
Costs of filmed entertainment 7,324 2,305
Distribution fees and expenses -- 23
Operating, general and administrative expenses 5,102 5,709
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Total costs and expenses 12,426 8,037
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OPERATING LOSS (4,478) (3,759)
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OTHER INCOME (EXPENSE):
Interest income 6,232 321
Other income (expense), net 26 (20)
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Total other income 6,258 301
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NET INCOME (LOSS) $ 1,780 $ (3,458)
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ALLOCATION OF NET INCOME (LOSS):
General Partner $ 18 $ (35)
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Limited Partners $ 1,762 $ (3,423)
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NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ .14 $ (.27)
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WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743
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-------- --------
</TABLE>
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
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<CAPTION>
For the Three Months
Ended March 31,
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1998 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,780 $ (3,458)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Amortization of filmed entertainment costs 7,324 2,305
Net change in assets and liabilities:
Decrease in foreign income receivable 59 378
Decrease in domestic income receivable -- 33,622
Net change in amounts due to/from affiliates (6,340) (2,908)
Increase (decrease) in accrued liabilities 461 (11,413)
Decrease in unearned revenue (7,778) (3,889)
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Net cash provided by (used in) operating activities (4,494) 14,637
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,494) 14,637
CASH AND CASH EQUIVALENTS, beginning of period 234,842 90,672
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CASH AND CASH EQUIVALENTS, end of period $ 230,348 $ 105,309
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</TABLE>
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, 1998 and March 31, 1999 and its results of operations and its
cash flows for the three month periods ended March 31, 1998 and 1999.
Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
(2) TRANSACTIONS WITH AFFILIATED ENTITIES
-------------------------------------
Jones Entertainment Group, Ltd. ("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 $2,841 and $3,026 to the
Partnership for direct expenses for the three month periods ended March 31,
1998 and 1999, respectively.
(3) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
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"The Little Kidnappers"
---------------------
In January 1990, the General Partner, on behalf of the Partnership, entered
into an agreement with Jones Maple Leaf Productions ("Maple Leaf") to
produce a full-length feature film for television entitled "The Little
Kidnappers." The total film cost was approximately $3,200,000. Of this
amount, the Partnership invested approximately $2,794,000, which included a
production and overhead fee of $300,000 paid to the General Partner. In
March 1999, the Partnership fully recovered its remaining net investment in
this film. From inception to March 31, 1999, the Partnership has recognized
approximately $3,002,000 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.
"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 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. In
December 1995, the Partnership fully recovered its remaining net investment
in the film. From inception to March 31, 1999, the Partnership has
recognized approximately $2,309,000 of revenue from this film. As of March
31, 1999, the Partnership had outstanding receivables from the film's
domestic and international distributors and licensees totaling $72,397, of
which $5,000 was received by the Partnership in April 1999. The Partnership
anticipates payment of the remaining $67,397 over the next three to
twenty-four months as collected by distributors.
"Curacao"
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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
pre-sale and supervising production of this picture. From inception to
March 31, 1999, the Partnership has recognized approximately $4,032,000 of
revenue from this film, which included the initial license fee
6
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and home video advance from Showtime of $2,650,000, which was used to
finance the film's production. As of March 31, 1999, the Partnership's net
investment in the film, after consideration of amortization was $62,763.
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
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Liquidity and Capital Resources
- -------------------------------
The Partnership's principal sources of liquidity are cash on hand and amounts
received from the domestic and international distribution of the
Partnership's programming. The Partnership had approximately $105,000 in cash
as of March 31, 1999. It is not anticipated that the Partnership will invest
in any additional programming projects, but instead will focus on the
distribution and/or sale of its existing programming projects. The
Partnership had outstanding amounts receivable from unaffiliated distributors
totaling approximately $72,000 as of March 31, 1999. The domestic income
receivable of approximately $48,000 will be paid to the Partnership over the
next five months. The foreign income receivable of approximately $24,000 will
be paid to the Partnership over the next three to twenty-four months as
collected by distributors.
Given the near completion of the second cycle distribution of the
Partnership's programming, as previously announced, regular quarterly
distributions from operations 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, an additional
quarterly cash flow distribution totaling $160,897 was declared for the
quarter ending March 31, 1998 and paid in May 1998. The Partnership will
retain a certain level of working capital, including any necessary reserves,
to fund its operating activities and/or satisfy its outstanding liabilities.
It is anticipated that any future distributions will only be made once
proceeds are received from the sale of the Partnership's assets.
The General Partner, on behalf of the Partnership, is currently considering
the sale of the Partnership's interests in its programming projects. If the
General Partner or one of its affiliates exercises its right to purchase the
Partnership's interests in a programming project, however, the sales price
for such a transaction will be at least equal to the average of three
independent appraisals of the programming project's fair market value. The
General Partner has no obligation to purchase any assets of the Partnership.
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.
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 the net
proceeds from the sale of the Partnership's interests in its programming will
be distributed to the partners after such sale. Based on the General
Partner's estimates of value and indications of value obtained from
unaffiliated parties, it is probable that the distributions of the proceeds
from the sales of the Partnership's programming projects, together with all
prior distributions paid to the limited partners, will return to the limited
partners less than 75% of their initial capital contributions 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, 1999. The Canadian Broadcasting Corporation license expired in the
second quarter of 1994 and was not renewed.
In April 1991, the General Partner, on behalf of the Partnership, entered
into a distribution agreement with an unaffiliated party granting rights to
distribute "The Little Kidnappers" in the non-theatrical domestic markets for
a period not to exceed seven years.
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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, 1999, 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, 1999,
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.
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 which has been received by the Partnership as of
March 31, 1999. 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, 1999, the
Partnership had recognized $20,000 in revenue under this agreement.
In March 1999, the Partnership recovered its net investment in this 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, 1999, 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, 1999, 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.
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, 1999, international gross sales totaled $1,474,299, of which $434,387 was
retained by the distributor for its fees and marketing costs, with the
remaining $1,039,912 due to the Partnership. As of March 31, 1999, the
Partnership had received $1,015,015 of such amounts. The remaining $24,897
will be paid to the Partnership over the next three to twenty-four months as
collected by the distributor.
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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 in November 1995, of which
$21,341 was remitted to 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 retained by the Partnership. As
of March 31, 1999, the Partnership had received monthly license fee payments
in total for the remaining $150,000. In June 1998, the General Partner agreed
to extend this distribution agreement to the unaffiliated third party for an
additional three years. The distribution agreement extension requires a fee
of $150,000 for the renewal period to be paid in 15 equal monthly
installments. As of March 31, 1999, the Partnership has received $102,500
toward the distribution agreement extension. The remaining $47,500 will be
paid to the Partnership over the next five months.
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 1998. In
accordance with the terms of the agreement, the Partnership is entitled to a
$75,000 license fee, which was received in three equal payments of $25,000 in
January 1997, August 1997 and 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, 1999. 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, 1999, the
Partnership has recognized $31,627 in 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,
1999, 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, 1999, 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 remaining $889,342 has been
received by the Partnership.
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
10
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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, 1999, the Partnership's net investment in the film, after consideration
of amortization and the write-downs discussed above, was $62,763. The
Partnership plans to recover its remaining net investment in this film of
$62,763 from the net revenues generated from remaining international and
domestic television markets or from the sale of the Partnership's interests
in the film.
Impact of the Year 2000 Issue (unaudited)
- -----------------------------------------
The Year 2000 issue is the result of many computer programs being written
such that they will malfunction when reading a year of "00." This problem
could cause system failure or miscalculations causing disruptions of business
processes.
In conjunction with its affiliates, the General Partner has initiated an
assessment of its computer applications to determine the extent of the
problem. Based on this assessment, the General Partner has determined that
the majority of its computer applications supporting business processes,
including accounting and investor services, are designed to handle the Year
2000 appropriately. The General Partner believes there will be no financial
impact to the Partnership due to the Year 2000 issue.
RESULTS OF OPERATIONS
---------------------
Revenues of the Partnership decreased $3,670, from $7,948 to $4,278 for the
three months ended March 31, 1998 and 1999, respectively. This decrease was
due primarily to a decrease in the international and domestic sales of "The
Little Kidnappers" of $3,585, from $7,863 to $4,278, and "The Story Lady" of
$85, from $85 to $0, for the three months ended March 31, 1998 and 1999,
respectively.
Filmed entertainment costs decreased $5,019, from $7,324 to $2,305 for the
three months ended March 31, 1998 and 1999, respectively. This decrease was
the result of decreased film revenues as discussed above. In addition, this
decrease was the result of the full amortization of the capitalized
production costs relating to "The Little Kidnappers" in March 1999. 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 $23, from $0 to $23 for the three
months ended March 31, 1998 and 1999, respectively. This increase resulted
primarily from the royalties paid to artisian guilds related to sales of "The
Little Kidnappers." 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 increased $607, from $5,102 to
$5,709 for the three months ended March 31, 1998 and 1999, respectively. This
increase was due primarily to a increase in the direct costs allocable to the
operations of the Partnership that were charged to the Partnership by
affiliates of the General Partner during the three months ended March 31,
1999 as compared to the same period in 1998. This increase in direct costs
allocable to the Partnership's operations resulted mainly from the increase
in direct time spent by the affiliates of the General Partner on the
accounting function of the Partnership.
11
<PAGE>
Interest income decreased $5,911, from $6,232 to $321 for the three months
ended March 31, 1998 and 1999, respectively. This decrease in interest income
was the result of lower average levels of invested cash balances existing
during the first three months of 1998 as compared to the same period in 1999.
Limited Partners' net income (loss) per partnership unit changed $(.41), from
$.14 to $(.27) for the three months ended March 31, 1998 and 1999,
respectively. This change was due to the results of the operations as
discussed above.
12
<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
13
<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, 1999
14
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<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 105,309
<SECURITIES> 0
<RECEIVABLES> 72,397
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 177,706
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 243,649
<CURRENT-LIABILITIES> 111,734
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 131,915
<TOTAL-LIABILITY-AND-EQUITY> 243,649
<SALES> 0
<TOTAL-REVENUES> 4,278
<CGS> 0
<TOTAL-COSTS> (8,037)
<OTHER-EXPENSES> (20)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 321
<INCOME-PRETAX> (3,458)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,458)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,458)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> (.27)
</TABLE>
