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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, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________to ________
Commission File Number: 0-19075
JONES PROGRAMMING PARTNERS 1-A, LTD.
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(Exact name of registrant as specified in charter)
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Colorado 84-1088820
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(State of organization) (I.R.S. Employer Identification No.)
9697 E. Mineral Avenue, Englewood, Colorado 80112 (303) 792-3111
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(Address of principal executive office and Zip Code) (Registrant's telephone no, including area code)
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interest
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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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy of
information statements incorporated by reference in Part III of this Form 10-K
or any amendments to this Form 10-K. X
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DOCUMENTS INCORPORATED BY REFERENCE: None
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JONES PROGRAMMING PARTNERS 1-A, LTD.
INDEX
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Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position
December 31, 1999 and March 31, 2000 3
Unaudited Statements of Operations
Three Months Ended March 31, 1999 and 2000 4
Unaudited Statements of Cash Flows
Three Months Ended March 31, 1999 and 2000 5
Notes to Unaudited Financial Statements
March 31, 2000 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. OTHER INFORMATION 10
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
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December 31, March 31,
1999 2000
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ASSETS
CASH AND CASH EQUIVALENTS $ 86,626 $ 105,819
RECEIVABLES:
Foreign income receivable 156 -
Domestic income receivable 3,472 -
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,887,206 and $8,887,206
as of December 31, 1999 and March 31, 2000, respectively - -
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Total assets $ 90,254 $ 105,819
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Accounts payable to affiliates $ 10,273 $ 42,608
Accrued liabilities 181,727 177,721
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Total liabilities 192,000 220,329
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PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (42,440) (42,440)
Accumulated deficit (13,543) (13,671)
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Total general partner's deficit (54,983) (55,111)
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Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of December 31, 1999
and March 31, 2000) 5,459,327 5,459,327
Distributions (4,201,502) (4,201,502)
Accumulated deficit (1,304,588) (1,317,224)
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Total limited partners' deficit (46,763) (59,399)
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Total partners' capital (deficit) (101,746) (114,510)
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Total liabilities and partners' capital (deficit) $ 90,254 $ 105,819
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The accompanying notes to these unaudited financial statements are an
integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
UNAUDITIED STATEMENTS OF OPERATIONS
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For the Three Months
Ended March 31,
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1999 2000
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GROSS REVENUES $ 4,278 $ -
COSTS AND EXPENSES:
Costs of filmed entertainment 2,305 -
Distribution fees and expenses 23 -
Operating, general and administrative expenses 5,709 13,907
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Total costs and expenses 8,037 13,907
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OPERATING LOSS (3,759) (13,907)
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OTHER INCOME (EXPENSE):
Interest income 321 1,143
Other income (expense), net (20) -
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Total other income, net 301 1,143
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NET LOSS $ (3,458) $ (12,764)
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ALLOCATION OF NET LOSS:
General Partner $ (35) $ (128)
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Limited Partners $ (3,423) $ (12,636)
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NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (.27) $ (.99)
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WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743
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The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
UNAUDITED STATEMENTS OF CASH FLOWS
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For the Three Months
Ended March 31,
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1999 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,458) $ (12,764)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization of filmed entertainment costs 2,305 -
Net change in assets and liabilities:
Decrease in foreign income receivable 378 156
Decrease in domestic income receivable 33,622 3,472
Net change in amounts due to affiliates (2,908) 32,335
Decrease in accrued liabilities (11,413) (4,006)
Decrease in unearned revenue (3,889) -
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Net cash provided by operating activities 14,637 19,193
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INCREASE IN CASH AND CASH EQUIVALENTS 14,637 19,193
CASH AND CASH EQUIVALENTS, beginning of period 90,672 86,626
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CASH AND CASH EQUIVALENTS, end of period $ 105,309 $ 105,819
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The accompanying notes to these unaudited financial statements are
an integral part of these unaudited financial statements.
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JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Statements of
Financial Position and Statements of Operations and Cash Flows in
conformity with generally accepted accounting principles. However, in the
opinion of management, this data includes all adjustments, consisting only
of normal recurring accruals, necessary to present fairly the financial
position of Jones Programming Partners 1-A, Ltd. (the "Partnership") as of
December 31, 1999 and March 31, 2000 and its results of operations and its
cash flows for the three month periods ended March 31, 1999 and 2000.
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 direct expenses of $3,026
and $4,681, to the Partnership for the three month periods ended March 31,
1999 and 2000, 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 includes a
production and overhead fee of $300,000 paid to the General Partner. From
inception to March 31, 2000, 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.
In March 1999, the Partnership fully amortized its net investment in this
film.
"THE STORY LADY"
In April 1991, the General Partner, on behalf of the Partnership, entered
into an agreement with NBC Productions, Inc. ("NBCP") 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. From
inception to March 31, 2000, the Partnership has recognized approximately
$2,299,000 of revenue from this film.
The Partnership has an agreement with NBCP to distribute "The Story Lady"
in foreign markets. Under this agreement, the Partnership paid $1,000,000
for all the distribution rights to "The Story Lady" except for NBC network
exhibition and certain other rights. The Partnership licensed back the
foreign rights to NBCP for an eight year term (which expired at the end of
1999 and has been extended) and the Partnership retained domestic
distribution rights, principally home video, non-network free television,
pay television, and non-theatrical.
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The Partnership and NBCP revenues are pooled and are to be paid to the
parties until each receives its original investment plus interest (the
"unrecouped amount"). The Partnership is fully recouped. In September 1999,
NBCP first claimed that it had mistakenly not taken the full amount of its
distribution fees, and was entitled to an additional approximately
$200,000. The Partnership does not believe that NBCP is entitled to the
distribution fees that it claims.
As of December 31, 1999, NBCP reported that it has not recouped
approximately $475,000 of its original investment, plus interest. NBCP is
entitled to recover its unrecouped amount under the agreement, which makes
it unlikely that the Partnership will receive any income from this film in
the near future, or at all. The Partnership has also received approximately
$175,000 from distributors, which was not applied to NBCP's unrecouped
amount. If so applied, NBCP's unrecouped amount would lower accordingly. As
of March 31, 2000, the Partnership has reported this amount as an accrued
liability, but believes a basis exists to deny some or all of such
liability. There is no assurance regarding the favorable resolution of this
matter. The Partnership does not have the funds to make such payments, nor
is it likely that the Partnership could borrow the necessary funds.
In December 1995, the Partnership fully amortized 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 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, 2000, the Partnership has recognized approximately $4,036,000 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.
In December 1999, after consideration of amortization and write-downs, the
Partnership fully amortized its net investment in this film.
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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 approximately $106,000 in cash as of March 31,
2000. The Partnership will not invest in any additional programming projects,
but instead will focus on the distribution and/or sale of its three existing
films.
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. There is no assurance regarding the timing or
amount of any future distributions.
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
believes that proceeds from future sales and distributions of the Partnership
films will equal or exceed the current liability, although there can be no
assurance to that effect in the absence of any actual sales transactions. The
General Partner has no obligation to purchase any assets of the Partnership,
nor is it anticipated that the General Partner will purchase such assets.
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,
but will initiate sales efforts in 2000. The projects may be sold as a group or
on a one by one basis, in the judgement of the General Partner. Any direct
costs incurred by the General Partner on behalf of the Partnership in
soliciting and arranging for the sale, or sales, of the Partnership's
programming projects will be charged to the Partnership. It is anticipated that
the net proceeds from the sale, or sales, of the Partnership's interests in its
programming, after payment of outstanding obligations, will be distributed to
the partners after such sale. 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 and the Partnership is able to
reach a satisfactory resolution with respect to contingent claims by NBCP.
However, there can be no assurance that such resolution can be achieved. The
General Partner does not anticipate cash flow from the films to increase
significantly in the future.
RESULTS OF OPERATIONS
Revenues of the Partnership decreased $4,278, from $4,278 to $0 for the three
months ended March 31, 1999 and 2000, respectively. This decrease was due
primarily to a decrease in the revenue received for sales of "The Little
Kidnappers".
Filmed entertainment costs decreased $2,305, from $2,305 to $0 for the three
months ended March 31, 1999 and 2000, 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 decreased $23, from $23 to $0 for the three
months ended March 31, 1999 and 2000, respectively. This decrease was also the
result of decreased film revenues as discussed above. These distribution fees
and
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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 $8,201, from $5,706 to
$13,907 for the three months ended March 31, 1999 and 2000, respectively. This
increase was due to an increase in legal expenses related to the potential sale
or sales of the Partnership's assets during the three months ended March 31,
2000. This increase was also due to an 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, 2000
as compared to the same period in 1999. 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.
Interest income increased $822, from $321 to $1,143 for the three months ended
March 31, 1999 and 2000, respectively. This increase in interest income was the
result of above average levels of invested cash balances existing during the
first three months of 1999 as compared to the same period in 2000.
Limited Partners' net loss per partnership unit changed $(.72), from $(.27) to
$(.99) for the three months ended March 31, 1999 and 2000, respectively. This
change was due to the result of the operations as discussed above.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES PROGRAMMING PARTNERS 1-A, LTD.
BY: JONES ENTERTAINMENT GROUP, LTD.
General Partner
By: /s/ Thom Anema
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Thom Anema
Vice President/Finance and Treasurer
(Principal Financial Officer)
Dated: May 15, 2000
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<ARTICLE> 5
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 105,819
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 105,819
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 105,819
<CURRENT-LIABILITIES> 220,329
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (114,510)
<TOTAL-LIABILITY-AND-EQUITY> 105,819
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (13,907)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,143
<INCOME-PRETAX> (12,764)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,764)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,764)
<EPS-BASIC> (.99)
<EPS-DILUTED> (.99)
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