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 September 30, 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)
Colorado 84-1088820
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(State of organization) (I.R.S. Employer Identification No.)
9697 E. Mineral Avenue, Englewood, Colorado 80112
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(Address of principal executive office and Zip Code)
(303) 792-3111
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(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 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 / /
JONES PROGRAMMING PARTNERS 1-A, LTD.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position
December 31, 1999 and September 30, 2000 3
Unaudited Statements of Operations
Three and Nine Months Ended September 30, 1999 and 2000 4
Unaudited Statements of Cash Flows
Nine Months Ended September 30, 1999 and 2000 5
Notes to Unaudited Financial Statements
September 30, 2000 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II. OTHER INFORMATION 10
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF FINANCIAL POSITION
December 31, September 30,
1999 2000
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ASSETS
CASH AND CASH EQUIVALENTS $ 86,626 $ 76,273
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 September 30, 2000, respectively (Note 3) -- --
----------- -----------
Total assets $ 90,254 $ 76,273
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
LIABILITIES:
Accounts payable to affiliates $ 10,273 $ 2,558
Accrued liabilities 181,727 179,521
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Total liabilities 192,000 182,079
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PARTNERS' CAPITAL (DEFICIT):
General partner -
Contributed capital 1,000 1,000
Distributions (42,440) (42,440)
Accumulated deficit (13,543) (13,584)
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Total general partner's deficit (54,983) (55,024)
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Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of December 31, 1999
and September 30, 2000) 5,459,327 5,459,327
Distributions (4,201,502) (4,201,502)
Accumulated deficit (1,304,588) (1,308,607)
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Total limited partners' deficit (46,763) (50,782)
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Total partners' capital (deficit) (101,746) (105,806)
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Total liabilities and partners' capital (deficit) $ 90,254 $ 76,273
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The accompanying notes to these unaudited financial statements
are an integral part of these unaudited financial statements.
-3-
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
----------------------- -----------------------
1999 2000 1999 2000
-------- -------- -------- --------
GROSS REVENUES $ 114 $ 421 $ 4,905 $ 27,225
COSTS AND EXPENSES:
Costs of filmed entertainment 111 -- 2,548 --
Distribution fees and expenses -- 422 23 463
Operating, general and administrative expenses 5,714 6,606 20,992 35,173
-------- -------- -------- --------
Total costs and expenses 5,825 7,028 23,563 35,636
-------- -------- -------- --------
OPERATING LOSS (5,711) (6,607) (18,658) (8,411)
-------- -------- -------- --------
OTHER INCOME:
Interest income 1,327 1,752 2,302 4,351
Other income, net 1,110 -- 1,033 --
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Other income, net 2,437 1,752 3,335 4,351
-------- -------- -------- --------
NET LOSS $ (3,274) $ (4,855) $(15,323) $ (4,060)
======== ======== ======== ========
ALLOCATION OF NET LOSS:
General partner $ (33) $ (49) $ (153) $ (41)
======== ======== ======== ========
Limited partners $ (3,241) $ (4,806) $(15,170) $ (4,019)
======== ======== ======== ========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (.25) $ (.38) $ (1.19) $ (.32)
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743 12,743 12,743
======== ======== ======== ========
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
For the Nine Months
Ended September 30,
-----------------------
1999 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(15,323) $ (4,060)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization of filmed entertainment costs 2,548 --
Net change in assets and liabilities:
Decrease in domestic income receivable 25,275 3,472
Decrease in foreign income receivable 55,172 156
Net change in amounts due to/from affiliates (6,961) (7,715)
Decrease in accrued liabilities (54,670) (2,206)
Decrease in unearned revenue (3,889) --
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Net cash provided by (used in) operating activities 2,152 (10,353)
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,152 (10,353)
CASH AND CASH EQUIVALENTS, beginning of period 90,672 86,626
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CASH AND CASH EQUIVALENTS, end of period $ 92,824 $ 76,273
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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 September 30, 2000, its results of operations for the
three and nine month periods ended September 30, 1999 and 2000, and its
cash flows for the nine month periods ended September 30, 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 $2,550
and $1,317, to the Partnership for the three month periods ended September
30, 1999 and 2000, respectively. For the nine month periods ended September
30, 1999 and 2000, $7,498 and $7,674, respectively, were charged to the
Partnership for direct expenses.
(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 September 30, 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 September 30, 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 amount of
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 September 30, 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
September 30, 2000, the Partnership has recognized approximately $4,062,000
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 $76,000 in cash as of September
30, 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 has initiated sales efforts but cannot predict at this time
when or at what price the Partnership's interests in its programming projects
ultimately will be sold. 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 any 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 increased $307, from $114 to $421 for the three
months ended September 30, 1999 and 2000, respectively. Revenues of the
Partnership increased $22,320, from $4,905 to $27,225 for the nine months ended
September 30, 1999 and 2000, respectively. The increase was due primarily to an
increase in the revenue received from international sales of "Curacao".
Filmed entertainment costs decreased $111, from $111 to $0 for the three months
ended September 30, 1999 and 2000, respectively. Filmed entertainment costs
decreased $2,548, from $2,548 to $0 for the nine months ended September 30, 1999
and 2000, respectively. These decreases were the result of the full amortization
of the capitalized production costs relating to "The Little Kidnappers" in March
1999 and to "Curacao" in December 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.
-8-
Distribution fees and expenses increased $422, from $0 to $422 for the three
months ended September 30, 1999 and 2000, respectively. Distribution fees and
expenses increased $440, from $23 to $463 for the nine months ended September
30, 1999 and 2000, respectively. These increases primarily resulted from the
payment of royalties in 2000 to artisan guilds for "The Little Kidnappers" and
"Curacao". 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 $892, from $5,714 to
$6,606 for the three months ended September 30, 1999 and 2000, respectively.
Operating, general and administrative expenses increased $14,181, from $20,992
to $35,173 for the nine months ended September 30, 1999 and 2000, respectively.
The increase was primarily due to an increase in legal expenses related to the
potential sale or sales of the Partnership's assets during the three and nine
month periods ended September 30, 2000 as compared to the same periods in 1999.
Interest income increased $425, from $1,327 to $1,752 for the three months ended
September 30, 1999 and 2000, respectively. Interest income increased $2,049,
from $2,302 to $4,351 for the nine months ended September 30, 1999 and 2000,
respectively. These increases in interest income were the result of higher
interest rates and higher levels of invested cash balances during the three and
nine month periods ended September 30, 2000 as compared to the same periods in
1999.
Limited Partners' net income (loss) per partnership unit changed $(.13), from
$(.25) to $(.38) for the three months ended September 30, 1999 and 2000,
respectively. Limited Partners' net income (loss) per partnership unit changed
$.87, from $(1.19) to $(.32) for the nine months ended September 30, 1999 and
2000, respectively. This change was due to the results of 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/ Timothy J. Burke
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Timothy J. Burke
Vice President
Dated: November 14, 2000
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