<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to ______
Commission file number: 0-19075
JONES PROGRAMMING PARTNERS 1-A, LTD.
(Exact name of registrant as specified in its charter)
COLORADO 84-1088820
(State of Organization) (IRS Employer Identification No.)
9697 E. MINERAL AVENUE, ENGLEWOOD, COLORADO 80112 (303) 792-3111
(Address of principal executive office and Zip Code) (Registrant's telephone no.
including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: Yes X No
--- ---
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
---
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>
Information contained in this Form 10-K Report contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts, included in
this Form 10-K Report that address activities, events or developments that the
General Partner or the Partnership expects, believes or anticipates will or may
occur in the future are forward-looking statements. These forward-looking
statements are based upon certain assumptions and are subject to a number of
risks and uncertainties. Actual results could differ materially from the results
predicted by these forward-looking statements.
PART I.
ITEM 1. BUSINESS
Jones Programming Partners 1-A, Ltd. (the "Partnership") is a Colorado
limited partnership that was formed in April 1989 pursuant to the public
offering of limited partnership interests in the Jones Programming Partners
Limited Partnership Program. Jones Entertainment Group, Ltd., a Colorado
corporation engaged in the development, production, acquisition and distribution
of its original entertainment programming, is the general partner of the
Partnership (the "General Partner"). The Partnership was formed to acquire,
develop and own rights to produce and license original programming. The
Partnership generates revenues from the licensing of its programming. All the
Partnerships films are subject to a variety of license agreements for various
markets. Some of these agreements will last beyond the year 2000. The General
Partner charges the Partnership for direct costs incurred on the Partnership's
behalf. See further discussion of such costs charged to the Partnership by the
General Partner in ITEM 8, FINANCIAL STATEMENTS, NOTE 4. As of December 31,
1999, the Partnership had three programming projects: "The Little Kidnappers,"
"The Story Lady" and "Curacao." It is not anticipated that the Partnership will
invest in any additional programming, but instead will focus on the distribution
and/or sale of its existing programming projects. Following is a description of
the Partnership's programming projects.
THE LITTLE KIDNAPPERS
In January 1990, the General Partner, on behalf of the Partnership, entered
into an agreement with Jones Maple Leaf Productions ("Maple Leaf") to produce a
full-length made-for-television film 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
amortized its net investment in this film. From inception to December 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
help finance the film's production. As of December 31, 1999, the Partnership had
outstanding receivables from the film's distributors and licensees totaling
$156. These amounts were received by the Partnership in February 2000.
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
amortized its net investment in this film. From inception to December 31, 1999,
the Partnership has recognized approximately $2,299,000 of revenue from this
film. In December 1999, the Partnership wrote off the outstanding receivable of
$26,129 from NBC Productions because it did not anticipate payment, as explained
below.
The Partnership has an agreement with NBC Productions, Inc. ("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.
2
<PAGE>
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.
At yearend, 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 be lower accordingly. At yearend, 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.
CURACAO
In October 1992, the General Partner, on behalf of the Partnership, entered
into an agreement with Showtime Networks, Inc. ("Showtime") for the production
of a full-length, made-for-television film entitled "Curacao." The total
production cost of the film incurred by the Partnership was approximately
$4,410,000. In addition to the costs of production, the Partnership paid the
General Partner $500,000 as a production and overhead fee for services rendered
in connection with arranging the Showtime presale and supervising production of
this picture. From inception to December 31, 1999, the Partnership has
recognized approximately $4,036,000 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 December 31, 1999, the
Partnership had outstanding net receivables of $3,472. These amounts were
received by the Partnership in February 2000.
During the fourth quarter of 1999, 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
estimated television sales projections, 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, a determination was made by the General Partner that the
Partnership's net investment in "Curacao" of $58,946 exceeded the film's
estimated net realizable value. As a result, the Partnership fully wrote-down
the production cost of the film.
GENERAL MATTERS
The General Partner, on behalf of the Partnership, is currently considering
the sale of the Partnership's interests in its programming projects. See further
discussion of the Partnership's distribution efforts concerning these films in
ITEM 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. None of the Partnership's films are presently generating any
significant revenue. There is no assurance that the Partnership will be
successful in obtaining a buyer or buyers for the assets of the Partnership or
that the terms or conditions of any sale will be favorable to the Partnership.
Many of the factors set forth below which affect the distribution of the films
will also affect the salability of the films themselves. If efforts to sell the
Partnership's assets are not successful, the Partnership will continue to seek
distribution for its films.
The Partnership has encountered and will continue to encounter intense
competition in connection with its attempts to distribute its programming. There
is competition within the television programming industry for exhibition time on
cable television networks, broadcast networks and independent television
stations. In most cases, potential customers of the Partnership's programming
also produce their own competitive programs. In recent years, the number of
television production companies and the volume of programming being distributed
have increased, thereby intensifying this competition. Acceptance of the
programming in certain distribution media may be limited and the programming
will compete with other types of television programming in all domestic and
international distribution media and markets. The success of programming is also
dependent in part on public taste, which is unpredictable and susceptible to
change. In international markets, the Partnership has and will encounter
additional risks, such as foreign currency rate fluctuations, compliance and
regulatory requirements, differences in tax laws, and economic and political
environments.
3
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The Partnership's films have been distributed in a number of markets. It is
not known whether the Partnership can successfully exploit any of its films in
these or other markets in the future. Any distribution revenues from the
Partnership's programming will rely heavily on the existence and size of
remaining distribution markets and media, if any, that have not been exploited
by the Partnership in its previous distribution efforts in the domestic and
international theatrical, home video, television, and ancillary markets. There
can be no assurance that the distribution efforts made by the Partnership, the
General Partner or unaffiliated parties on behalf of the Partnership for its
programming will be successful.
ITEM 2. PROPERTIES
See ITEM 1.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for the
limited partnership interests and it is not expected that such a market will
develop in the future. As of February 15, 2000, the number of equity security
holders in the Partnership was 727.
4
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ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------
1995 1996 1997 1998 1999
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Gross revenues $ 699,023 $ 211,669 $ 222,714 $ 195,717 $ 9,077
Costs of filmed entertainment 250,173 107,418 93,983 11,546 6,027
Distribution fees and expenses 113,877 58,229 98,471 196,695 119,104
Loss from write-down of
film production cost 244,164 656,744 -- -- 58,946
Operating, general and administrative
expenses 39,454 62,499 94,162 115,247 61,810
Operating income (loss) 51,355 (673,221) (63,902) (127,771) (236,810)
Net income (loss) 80,758 (654,916) (54,372) (117,496) (237,119)
Net income (loss) per limited
partnership unit 6.27 (50.88) (4.22) (9.13) (18.42)
Weighted average number of limited
partnership units outstanding 12,743 12,743 12,743 12,743 12,743
General partner's deficit (36,299) (49,284) (49,828) (52,612) (54,983)
Limited partners' capital 1,802,941 517,422 463,594 187,985 (46,763)
Total assets 1,933,539 657,221 442,164 265,317 90,254
General partner advances (10,728) 15,600 8,303 11,045 10,273
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the Partnership's financial condition and
results of operations contains, in addition to historical information,
forward-looking statements that are based upon certain assumptions and are
subject to a number of risks and uncertainties. The Partnership's actual results
may differ significantly from the results predicted in such forward-looking
statements.
RESULTS OF OPERATIONS
1999 COMPARED TO 1998
Revenues of the Partnership decreased $186,640, from $195,717 in 1998 to $9,077
in 1999. This decrease was due primarily to a decrease in domestic and
international sales of "The Little Kidnappers" and "The Story Lady," which were
$12,354 and $183,324, respectively, for 1998 as compared to $4,455 and $919,
respectively, in 1999. International sales of "Curacao" increased $3,664, from
$39 in 1998 to $3,703 in 1999.
Filmed entertainment costs decreased $5,519, from $11,546 in 1998 to $6,027 in
1999. This decrease resulted primarily from the decrease in Partnership revenues
and the full amortization in March 1999 of the "Little Kidnappers". Filmed
entertainment costs are amortized over the life of the film in the ratio that
current gross revenues bear to anticipated gross revenues.
Distribution fees and expenses decreased $77,591, from $196,695 in 1998 to
$119,104 in 1999. This decrease was due primarily to royalties that became due
to artisan guilds in 1998 related to "Story Lady" and the decrease in revenues
received from the three films. These distribution fees and expenses relate to
the compensation due and costs incurred by distributors in selling the
Partnership's programming in the domestic and international markets. The timing
and amount of distribution fees and expenses vary depending upon the individual
market in which programming is distributed.
Loss on write-down of film production of $58,946 in 1999, was the result of a
full write-down of the Partnership's net investment in "Curacao", as of December
31, 1999. No such write-down was taken in 1998. As of December 31, 1999, the
Partnership had expensed all costs related to the production of films.
5
<PAGE>
Operating, general and administrative expenses decreased $53,437, from $115,247
in 1998 to $61,810 in 1999. This decrease was due primarily to an allowance of
$80,300 made during 1998 related to the potential uncollectibility of an
outstanding international income receivable.
Interest income decreased $6,198, from $9,535 in 1998 to $3,337 in 1999. This
decrease in interest income was the result of lower average levels of invested
cash balances existing during 1999 as compared to 1998.
Limited Partners' net income per partnership unit changed $(9.29), from $(9.13)
in 1998 to $(18.42) in 1999. This change was due to the results of operations as
discussed above.
1998 COMPARED TO 1997
Revenues of the Partnership decreased $26,997, from $222,714 in 1997 to $195,717
in 1998. This decrease was due primarily to a decrease in domestic and
international sales of "The Little Kidnappers" and "Curacao," which were $79,243
and $20,170, respectively, for 1997 as compared to $12,354 and $39,
respectively, in 1998. International sales of "The Story Lady" increased
$60,023, from $123,301 in 1997 to $183,324 in 1998.
Filmed entertainment costs decreased $82,437, from $93,983 in 1997 to $11,546 in
1998. This decrease resulted primarily from the decrease in Partnership revenues
received from "The Little Kidnappers" and "Curacao"as discussed above. Filmed
entertainment costs are amortized over the life of the film in the ratio that
current gross revenues bear to anticipated gross revenues.
Distribution fees and expenses increased $98,224, from $98,471 in 1997 to
$196,695 in 1998. This increase was due primarily to royalties that became due
to artisan guilds during 1998. This increase was also due to the overall
increase in domestic and international sales of "The Story Lady." These
distribution fees and expenses relate to the compensation due and costs incurred
by distributors in selling the Partnership's programming in the domestic and
international markets. The timing and amount of distribution fees and expenses
vary depending upon the individual market in which programming is distributed.
Operating, general and administrative expenses increased $21,085, from $94,162
in 1997 to $115,247 in 1998. This increase was due primarily to an allowance of
$80,300 made during 1998 related to the potential uncollectibility of an
outstanding international income receivable. The increase was partially offset
by a decrease in direct costs allocable to the operations of the Partnership
that were charged to the Partnership by the General Partner and its affiliates
in 1998 as compared to 1997. The 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 decreased $892, from $10,427 in 1997 to $9,535 in 1998. This
decrease in interest income was the result of lower average levels of invested
cash balances existing during 1998 as compared to 1997.
Limited Partners' net income per partnership unit changed $(4.91), from $(4.22)
in 1997 to $(9.13) in 1998. This change was due to the results of operations as
discussed above.
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 $87,000 in cash as of December
31, 1999. 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 had outstanding net receivable from unaffiliated
distributors totaling approximately $3,600 as of December 31, 1999. The
international net receivable of approximately $150 was received in February
2000. The approximately $3,500 of domestic income receivable was received in
February 2000.
6
<PAGE>
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 transaction. The
General Partner has no obligation to purchase any assets of the Partnership, nor
is it anticipated that the General Partner will purchase any of 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 a resolution can be achieved.
During 1999, the cash flow from operating activities continued to decrease from
prior periods. The General Partner does not anticipate cash flow from the films
to increase significantly in the future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
The Partnership does not hold any financial instruments which present
significant interest or market risk.
7
<PAGE>
ITEM 8. FINANCIAL STATEMENTS
JONES PROGRAMMING PARTNERS 1-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1999
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants 9
Statements of Financial Position 10
Statements of Operations 11
Statements of Partners' Capital (Deficit) 12
Statements of Cash Flows 13
Notes to Financial Statements 14
</TABLE>
8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Jones Programming Partners 1-A, Ltd.:
We have audited the accompanying statements of financial position of Jones
Programming Partners 1-A, Ltd. (a Colorado limited partnership) as of December
31, 1998 and 1999, and the related statements of operations, partners' capital
(deficit) and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
General Partner's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jones Programming Partners 1-A,
Ltd. as of December 31, 1998 and 1999, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles in the United States.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 17, 2000
9
<PAGE>
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1998 1999
----------- -----------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS (Note 2) $ 90,672 $ 86,626
RECEIVABLES:
International income receivable, net of allowance for
doubtful accounts of $80,300 and $0 as of
December 31, 1998 and 1999, respectively (Note 5) 25,275 156
Domestic income receivable 81,122 3,472
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,822,233 and $8,887,206
as of December 31, 1998 and 1999, respectively (Notes 2 and 5) 64,973 --
OTHER ASSETS 3,275 --
----------- -----------
Total assets $ 265,317 $ 90,254
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Accounts payable to affiliates $ 11,045 $ 10,273
Accrued liabilities 118,899 181,727
----------- -----------
Total liabilities 129,944 192,000
----------- -----------
PARTNERS' CAPITAL (DEFICIT) (Note 3):
General partner -
Contributed capital 1,000 1,000
Distributions (42,440) (42,440)
Accumulated deficit (11,172) (13,543)
----------- -----------
Total general partner's deficit (52,612) (54,983)
----------- -----------
Limited partners -
Contributed capital
(12,743 units outstanding as of December 31, 1998 and 1999) 5,459,327 5,459,327
Distributions (4,201,502) (4,201,502)
Accumulated deficit (1,069,840) (1,304,588)
----------- -----------
Total limited partners' capital (deficit) 187,985 (46,763)
----------- -----------
Total partners' capital (deficit) 135,373 (101,746)
----------- -----------
Total liabilities and partners' capital (deficit) $ 265,317 $ 90,254
=========== ===========
</TABLE>
The accompanying notes to these financial statements
are an integral part of these financial statements.
10
<PAGE>
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
REVENUES (Notes 2 and 5) $ 222,714 $ 195,717 $ 9,077
COSTS AND EXPENSES:
Costs of filmed entertainment (Notes 2 and 5) 93,983 11,546 6,027
Distribution fees and expenses (Note 2) 98,471 196,695 119,104
Loss from write-down of film production cost
(Notes 2 and 5) -- -- 58,946
Operating, general and administrative
expenses (Note 4) 94,162 115,247 61,810
--------- --------- ---------
Total costs and expenses 286,616 323,488 245,887
--------- --------- ---------
OPERATING LOSS (63,902) (127,771) (236,810)
--------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income 10,427 9,535 3,337
Other income (expense), net (897) 740 (3,646)
--------- --------- ---------
Total other income (expense), net 9,530 10,275 (309)
--------- --------- ---------
NET LOSS $ (54,372) $(117,496) $(237,119)
========= ========= =========
ALLOCATION OF NET LOSS:
General partner $ (544) $ (1,175) $ (2,371)
========= ========= =========
Limited partners $ (53,828) $(116,321) $(234,748)
========= ========= =========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (4.22) $ (9.13) $ (18.42)
========= ========= =========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743 12,743
========= ========= =========
</TABLE>
The accompanying notes to these financial statements
are an integral part of these financial statements.
11
<PAGE>
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ (49,284) $ (49,828) $ (52,612)
Distributions -- (1,609) --
Net loss (544) (1,175) (2,371)
--------- --------- ---------
Balance, end of year $ (49,828) $ (52,612) $ (54,983)
========= ========= =========
LIMITED PARTNERS:
Balance, beginning of year $ 517,422 $ 463,594 $ 187,985
Distributions -- (159,288) --
Net loss (53,828) (116,321) (234,748)
--------- --------- ---------
Balance, end of year $ 463,594 $ 187,985 $ (46,763)
========= ========= =========
TOTAL PARTNERS' CAPITAL (DEFICIT) $ 413,766 $ 135,373 $(101,746)
========= ========= =========
</TABLE>
The accompanying notes to these financial statements
are an integral part of these financial statements.
12
<PAGE>
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
1997 1998 1999
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (54,372) $(117,496) $(237,119)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Amortization of filmed entertainment costs 93,983 11,546 6,027
Loss from write-down of film production cost -- -- 58,946
Decrease in international income net receivable 19,074 97,253 25,119
Decrease (increase) in domestic income receivable 72,573 (76,122) 77,650
Decrease (increase) in other assets (2,183) -- 3,275
Net change in amounts due to/from affiliates (7,297) 2,742 (772)
Increase in accrued liabilities 7,509 98,804 62,828
--------- --------- ---------
Net cash provided by (used in) operating activities 129,287 16,727 (4,046)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (160,897) (160,897) --
--------- --------- ---------
Net cash used in financing activities (160,897) (160,897) --
--------- --------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (31,610) (144,170) (4,046)
CASH AND CASH EQUIVALENTS, beginning of year 266,452 234,842 90,672
--------- --------- ---------
CASH AND CASH EQUIVALENTS, end of year $ 234,842 $ 90,672 $ 86,626
========= ========= =========
</TABLE>
The accompanying notes to these financial statements
are an integral part of these financial statements.
13
<PAGE>
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS
Organized in April 1989, Jones Programming Partners 1-A, Ltd. (the
"Partnership") is a limited partnership formed pursuant to the laws of the
State of Colorado to engage in the development, production, acquisition,
licensing and distribution of original entertainment programming. Jones
Entertainment Group, Ltd. is the "General Partner" of the Partnership.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS - The Partnership considers all highly-liquid
investments with a maturity when purchased of three months or less to be
cash equivalents.
FILM REVENUE RECOGNITION - The Partnership recognizes revenues in
accordance with the provisions of Statement of Financial Accounting
Standards No. 53 ("SFAS No. 53"). Revenues from domestic and international
licensing of programming, which may include the receipt of non-refundable
guaranteed amounts, are recognized when such amounts are known, the film is
available for exhibition or telecast, and when certain other SFAS No. 53
criteria are met. Advances received for licensing or other purposes prior
to exhibition or telecast are deferred and recognized as revenue when the
above criteria are met.
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION - Investment in and advances
for film production consists of advances to production entities for story
rights, production costs, and film completion costs, and is stated at the
lower of cost or estimated net realizable value. In addition, film
production and overhead fees payable to the General Partner have been
capitalized and included in investment in film production. Film production
costs are amortized based upon the individual-film-forecast method. As the
Partnership nears completion of the second cycle of distribution for its
programming, it has recovered its remaining investment in its programming,
with consideration to amortization and write-down. The Partnership will
continue to relicense its programming to distributors in remaining
unexploited markets and media, if any, or by selling its remaining
interests in its film projects. Estimated losses have been provided for in
full when determined by the General Partner. Repayment of production
advances will be applied to reduce advances outstanding.
DISTRIBUTION COSTS - Distribution fees and expenses incurred in connection
with domestic and international film distribution are recorded at the time
that the related licensing fees are recognized as revenue by the
Partnership. Similarly, the Partnership expenses film advertising costs
related to distribution when the advertising takes place.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the
14
<PAGE>
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(3) PARTNERS' CAPITAL (DEFICIT)
The capitalization of the Partnership is set forth in the accompanying
Statements of Partners' Capital (Deficit). No limited partner is or will be
obligated to make any additional contributions to the Partnership. The
General Partner purchased its interest in the Partnership by contributing
$1,000 to Partnership capital.
Profits, losses and distributions of the Partnership are allocated 99
percent to the limited partners and 1 percent to the General Partner until
the limited partners have received distributions equal to 100 percent of
their capital contributions plus an annual return thereon of 12 percent,
cumulative and non-compounded. 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. Thereafter, profits/losses and distributions will
generally be allocated 80 percent to the limited partners and 20 percent to
the General Partner. Interest income earned prior to the start of the
Partnership's first production was allocated 100 percent to the limited
partners.
(4) TRANSACTIONS WITH AFFILIATES
The General Partner 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 $35,028, $0, and $0 to the Partnership for the
years ended December 31, 1997, 1998, and 1999, respectively.
The Partnership reimburses the General Partner for providing certain
administrative services to the Partnership. These services, which consist
primarily of accounting services, are allocated to the Partnership at cost,
which includes salaries, related benefits, and overhead. Allocations for
services are generally based on actual time spent by affiliated associates
with respect to the Partnership. The General Partner and its affiliates
charged the Partnership $20,443, $15,442 and $10,856 for these services for
the years ended December 31, 1997, 1998 and 1999, respectively.
(5) INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION
"THE LITTLE KIDNAPPERS"
In January 1990, the General Partner, on behalf of the Partnership, entered
into an agreement with Jones Maple Leaf Productions ("Maple Leaf") to
produce a full-length feature film for television entitled "The Little
Kidnappers." The total film cost was approximately $3,200,000. Of this
amount, the Partnership has invested approximately $2,794,000, which
includes a production and overhead fee of $300,000 paid to the General
Partner. From inception to December 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. As of December 31, 1999, the Partnership
had outstanding receivables from the film's international distributors and
licensees totaling $156. The Partnership received payment in February 2000.
In March 1999, the Partnership fully amortized its net investment in this
film.
"THE STORY LADY"
15
<PAGE>
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 December 31, 1999, the Partnership has recognized
approximately $2,299,000 of revenue from this film. In December 1999, the
Partnership wrote off the outstanding receivable of $26,129. This write off
is reflected in operating, general and administrative expenses in the
accompanying statement of position.
In December 1995, the Partnership fully amortized its net investment in
this film.
At yearend, 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 be lower accordingly. At yearend,
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.
"CURACAO"
In October 1992, the General Partner, on behalf of the Partnership, entered
into an agreement with Showtime Networks, Inc. ("Showtime") for the
production of a full-length, made-for-television film entitled "Curacao."
The total production cost of the film was approximately $4,410,000. In
addition to the costs of production, the Partnership paid the General
Partner $500,000 as a production and overhead fee for services rendered in
connection with arranging the Showtime pre-sale and supervising production
of this picture. From inception to December 31, 1999, 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. As of December
31, 1999, the Partnership had outstanding receivables from the film's
distributors and licensees totaling $3,472. These amounts were received by
the Partnership in February 2000.
During the fourth quarter 1999, the General Partner 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" exceeded the film's estimated net realizable value
as of December 31, 1999, resulting in a write down of $58,946.
These revenue projections were estimated by the General Partner based on
the film's prior distribution history, the remaining international and
domestic territories available to the film for future television
distribution and the General Partner's previous distribution experience
with other films.
In December 1999, after consideration of amortization and write-downs, the
Partnership fully amortized its net investment in this film.
(6) INCOME TAXES
Income tax provision (benefit) resulting from the Partnership's operations
are not reflected in the accompanying financial statements as such amounts
accrue directly to the partners. The Federal and state income tax returns
of the Partnership are prepared and filed by the General Partner.
The Partnership's tax returns, the qualification of the Partnership as a
limited partnership for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by Federal and state
taxing authorities. If such examinations result in changes with respect to
the
16
<PAGE>
Partnership's tax status or to the Partnership's recorded income or loss,
the tax liability of the general and limited partners would be adjusted
accordingly.
The Partnership's only significant book-tax differences between the
financial reporting and tax bases of the Partnership's assets and
liabilities are associated with: 1) the difference between the amount of
film production cost amortization and loss from write-down of film
production cost recognized under generally accepted accounting principles
and the amount of expense allowed for tax purposes; and 2) the allowance
for doubtful accounts which is not yet deductible for tax purposes. Film
production cost recognized under generally accepted accounting principles
exceeded (was less than) the amount of expense recognized for tax purposes
by approximately $178,000, $91,300 and ($472,400) for the years ended
December 31, 1997, 1998 and 1999, respectively.
17
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain information
concerning directors and executive officers of the General Partner of the
Registrant is set forth below. Each of the directors serves until the next
annual meeting of the shareholders of the General Partner and until their
successors shall be elected and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE GENERAL PARTNER
<S> <C> <C>
Glenn R. Jones 70 Chairman of the Board, Chief Executive
Officer and President
Heather O'Mara 33 Executive Vice President
Thom Anema 36 Vice President/Finance & Treasurer and
Chief Accounting Officer
Wilfred N. Cooper, Sr. 69 Director
J. Rodney Dyer 64 Director
</TABLE>
Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its inception and he has
served as President of the General Partner since April 1994. Mr. Jones is also
the Chairman of the Board of Directors and Chief Executive Officer of the
General Partner's principal shareholder, Jones 21st Century, Inc., a subsidiary
of Jones International, Ltd. He is also an officer and director for a number of
subsidiaries of Jones International Networks. For more than five years, until
April 1999, Mr. Jones was Chairman of the Board of Directors and Chief Executive
Officer of Jones Intercable, Inc., a multiple system cable television operator.
In addition, Mr. Jones is a member of the Board and Education Council of the
National Alliance of Business. In 1994, Mr. Jones was inducted into Broadcasting
and Cable's Hall of Fame. Mr. Jones received a B.S. in Economics from Allegheny
College and a J.D. from the University of Colorado School of Law.
Ms. Heather O'Mara is the Executive Vice President of the General Partner.
Ms. O'Mara has more than 13 years of experience in new technologies and
entertainment and has filled various roles for the Jones companies since June
1996. Ms. O'Mara holds a Bachelor of Science in Accounting and International
Business from New York University. A Certified Public Accountant, Ms. O'Mara is
a member of both the American and the New York societies of Certified Public
Accountants.
Mr. Thom Anema is the Vice President of Finance and the Treasurer and Chief
Accounting Officer of the General Partner. Mr. Anema has over ten years of
experience in the telecommunications industry and has filled various roles for
Jones companies since November 1988. Prior to joining Jones, Mr. Anema practiced
public accounting with Touche Ross and Company. Mr. Anema holds a Bachelor of
Science in Accounting from Calvin College.
Mr. Wilfred N. Cooper, Sr. became a director of the General Partner in
December 1994. Mr. Cooper has been the principal shareholder and a Director of
WNC & Associates, Inc. since its organization in 1971, of Shelter Resource
Corporation since its organization in 1981 and of WNC Resources, Inc. from its
organization in 1988 through its acquisition by WNC & Associates, Inc. in 1991,
serving as President of those companies through June 1992 and as Chief Executive
Officer since June 1992.
Mr. J. Rodney Dyer became a director of the General Partner in December
1994. Mr. Dyer has been the President of Total Creative, Inc. since its
formation in 1967. Rod Dyer Group, Inc. specializes in advertising, marketing
and promotion.
18
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are required
to operate its business. Such personnel are employed by the General Partner or
an affiliate of the General Partner and, pursuant to the terms of the
Partnership's limited partnership agreement, the cost of such employment can be
charged by the General Partner to the Partnership as a reimbursement item. See
ITEM 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
As of March 7, 2000, no person or entity owns more than 5 percent of the
limited partnership interests in the Partnership, except for Herbert Borbe. Mr.
Borbe owns 800 of the 12,743 partnership interests outstanding as of December
31, 1999. Mr. Borbe's address is 218 Main Street, Suite 216, Kirkland,
Washington 98033. Mr. Borbe is not a director, officer or employee of the
General Partner or any of its affiliates.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions with
the Partnership as contemplated by the limited partnership agreement of the
Partnership. The General Partner believes that the terms of such transactions
are generally as favorable as could be obtained by the Partnership from
unaffiliated parties. This determination has been made by the General Partner in
good faith, but none of the terms were or will be negotiated at arm's-length and
there can be no assurance that the terms of such transactions have been or will
be as favorable as those that could have been obtained by the Partnership from
unaffiliated parties. During 1999, in aggregate, transactions of this nature
totaled less than $60,000.
19
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
1. Financial statements
2. Schedules - Financial Data Schedule.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement. (1)
(1) Incorporated by reference from the Partnership's Annual Report on
Form 10-K for year ended December 31, 1989.
(b) REPORTS ON FORM 8-K:
None.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JONES PROGRAMMING PARTNERS 1-A, LTD.,
a Colorado limited partnership
By Jones Entertainment Group, Ltd.,
its General Partner
By: /s/ Glenn R. Jones
----------------------------------
Glenn R. Jones
Chairman of the Board, Chief
Dated: March 23, 2000 Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ Glenn R. Jones
----------------------------------
Glenn R. Jones
Chairman of the Board, Chief
Executive Officer and President
Dated: March 23, 2000 (Principal Executive Officer)
By: /s/ Thom Anema
----------------------------------
Thom Anema
Vice President/Finance & Treasurer
Dated: March 23, 2000 Chief Accounting Officer
By: /s/ Wilfred N. Cooper, Sr.
----------------------------------
Wilfred N. Cooper, Sr.
Dated: March 23, 2000 Director
By: /s/ J. Rodney Dyer
----------------------------------
J. Rodney Dyer
Dated: March 23, 2000 Director
SIGNATURES
21
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JONES PROGRAMMING PARTNERS 1-A, LTD.,
a Colorado limited partnership
By Jones Entertainment Group, Ltd.,
its General Partner
By:
----------------------------------
Glenn R. Jones
Chairman of the Board, Chief
Dated: March 23, 2000 Executive Officer and President
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
By:
----------------------------------
Glenn R. Jones
Chairman of the Board, Chief
Executive Officer and President
Dated: March 23, 2000 (Principal Executive Officer)
By:
----------------------------------
Thom Anema
Vice President/Finance and Treasurer
Dated: March 23, 2000 Chief Accounting Officer
By:
----------------------------------
Wilfred N. Cooper, Sr.
Dated: March 23, 2000 Director
By:
----------------------------------
J. Rodney Dyer
Dated: March 23, 2000 Director
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 86,626
<SECURITIES> 0
<RECEIVABLES> 3,628
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 90,254
<CURRENT-LIABILITIES> 192,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (101,746)
<TOTAL-LIABILITY-AND-EQUITY> 90,254
<SALES> 0
<TOTAL-REVENUES> 9,077
<CGS> 0
<TOTAL-COSTS> (245,887)
<OTHER-EXPENSES> (3,646)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,337
<INCOME-PRETAX> (237,119)
<INCOME-TAX> 0
<INCOME-CONTINUING> (237,119)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (237,119)
<EPS-BASIC> (18.42)
<EPS-DILUTED> (18.42)
</TABLE>
