hi 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, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 0-19075
JONES PROGRAMMING PARTNERS 1-A, LTD.
(Exact name of registrant as specified in charter)
COLORADO 84-1088820
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(State of organization) (I.R.S. Employer
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)
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 (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
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Statements of Financial Position
December 31, 2000 and March 31, 2001 3
Unaudited Statements of Operations
Three Months Ended March 31, 2000 and 2001 4
Unaudited Statements of Cash Flows
Three Months Ended March 31, 2000 and 2001 5
Notes to Unaudited Financial Statements
March 31, 2001 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, March 31,
2000 2001
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ASSETS
CASH AND CASH EQUIVALENTS $ 72,725 $ 62,595
ACCOUNTS RECEIVABLE - 33,500
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTION,
net of accumulated amortization of $8,887,206 as of
December 31, 2000 and March 31, 2001, respectively - -
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Total assets $ 72,725 $ 96,095
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LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES:
Accounts payable to affiliates $ 1,973 $ 31,902
Accrued liabilities 198,124 175,559
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Total liabilities 200,097 207,461
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PARTNERS' DEFICIT:
General partner -
Contributed capital 1,000 1,000
Distributions (42,440) (42,440)
Accumulated deficit (13,799) (13,639)
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Total general partner's deficit (55,239) (55,079)
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Limited partners -
Contributed capital, net of offering costs
(12,743 units outstanding as of December 31, 2000
and March 31, 2001) 5,459,327 5,459,327
Distributions (4,201,502) (4,201,502)
Accumulated deficit (1,329,958) (1,314,112)
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Total limited partners' deficit (72,133) (56,287)
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Total partners' deficit (127,372) (111,366)
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Total liabilities and partners' deficit $ 72,725 $ 96,095
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The accompanying notes are an integral part of these financial statements.
-3-
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months
Ended March 31,
-----------------------------------
2000 2001
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REVENUES $ - $ 34,695
COSTS AND EXPENSES:
Distribution fees and expenses - 8,079
Operating, general and administrative expenses 13,907 11,284
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Total costs and expenses 13,907 19,363
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OPERATING INCOME (LOSS) (13,907) 15,332
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INTEREST INCOME 1,143 674
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NET INCOME (LOSS) $ (12,764) $ 16,006
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ALLOCATION OF NET INCOME (LOSS):
General Partner $ (128) $ 160
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Limited Partners $ (12,636) $ 15,846
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NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (.99) $ 1.24
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WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 12,743 12,743
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The accompanying notes are an integral part of these financial statements.
-4-
JONES PROGRAMMING PARTNERS 1-A, LTD.
(A LIMITED PARTNERSHIP)
UNAUDITED STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
--------------------------------
2000 2001
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (12,764) $ 16,006
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Net change in assets and liabilities:
Decrease (increase) in foreign income receivable 156 (33,500)
Decrease in domestic income receivable 3,472 -
Net change in amounts due to affiliates 32,335 29,929
Decrease in accrued liabilities (4,006) (22,565)
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Net cash provided by (used in) operating activities 19,193 (10,130)
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 19,193 (10,130)
CASH AND CASH EQUIVALENTS, beginning of period 86,626 72,725
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CASH AND CASH EQUIVALENTS, end of period $ 105,819 $ 62,595
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The accompanying notes are an integral part of these financial statements.
-5-
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 accounting principles generally accepted in the United
States. However, in the opinion of management, this data includes all
adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position of Jones Programming Partners 1-A, Ltd. (the
"Partnership") as of December 31, 2000 and March 31, 2001 and its results
of operations and its cash flows for the three month periods ended March
31, 2000 and 2001. 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 $4,681
and $5,847, to the Partnership for the three-month periods ended March 31,
2000 and 2001, 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 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, 2001, the Partnership has recognized approximately $3,036,000 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, 2001, the Partnership has recognized approximately
$2,299,000 of revenue from this film. In December 1995, the Partnership
fully amortized its net investment in this film.
The Partnership has an agreement with NBCP to distribute "The Story Lady"
in foreign markets. 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 on a month to month basis) and the Partnership retained domestic
distribution rights, principally home video, non-network free television,
pay television, and non-theatrical.
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.
-6-
As of March 31, 2001, NBCP reported that it had not recouped approximately
$170,000 of its original investment in this film and approximately $283,000
in interest thereon. Interest will continue to accrue on this unrecouped
balance. Through March 31, 2001, the Partnership had received approximately
$174,000 from distributors, which was not applied to NBCP's unrecouped
amount. As of March 31, 2001, the Partnership had reported this amount as
an accrued liability. There is no assurance regarding the favorable
resolution of this matter. The Partnership does not have the funds to make
any such payments to NBCP, 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
pre-sale and supervising production of this picture. From inception to
March 31, 2001, the Partnership has recognized approximately $4,064,000 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 approximately $3,450,000 in
amortization and approximately $960,000 in write-downs, the Partnership
fully amortized its net investment in this film.
-7-
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. As of March 31, 2001, the Partnership had approximately $63,000 in
cash. Cash used in operations for the three months ended March 31, 2001 was
approximately $10,000. 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
future distributions, if any, 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 pursuing the sale of the
Partnership's interests in its programming. 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 when or at what price the Partnership's interests in its programming
ultimately will be sold, but has initiated sales efforts. The films may be sold
as a group or on an individual basis, in the judgement of the General Partner.
The films could also be packaged with the films of an affiliated public limited
partnership. 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. The
Partnership does not have the funds necessary to pay NBCP its claimed fees and
unrecouped cost and interest involved with "The Story Lady" and even if the
Partnership is successful in finding a buyer or buyers for some or all of its
programming, the proceeds may not be sufficient to allow for any distributions
to the Partners. It is probable that the distributions of the proceeds from the
sales of the Partnership's programming projects, if any, 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
Partnership has retained the services of a broker to assist in the sale of the
Partnership's films. Pursuant to the services agreement, the broker will receive
a 10% commission for arranging the sale, or sales, of the Partnership's films.
The General Partner believes that the Partnership has, and will continue to
have, sufficient liquidity to fund its ongoing operations and to meet its
obligations so long as quarterly distributions are suspended and provided the
Partnership is able to reach a satisfactory resolution with respect to the
claims made by NBCP. However, there can be no assurance that such a resolution
can be achieved. The General Partner does not anticipate cash flow from the
films to increase significantly in the future. The lack of significant cash flow
presently being generated by the Partnership's films may negatively effect the
ultimate sales price of the films.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $34,695, from $0 to $34,695 for the three
months ended March 31, 2000 and 2001, respectively. This increase in revenue was
the result of royalties received from "Curacao" and distribution revenue
recognized for "The Little Kidnappers".
Distribution fees and expenses increased $8,079, from $0 to $8,079 for the three
months ended March 31, 2000 and 2001, respectively. This increase was primarily
the result of an $8,000 payment made to an unaffiliated company to perform
technical work on "The Little Kidnappers", potentially allowing for the film to
be redistributed in parts of Europe. Distribution fees and expenses typically
relate to the compensation due and costs incurred 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.
-8-
Operating, general and administrative expenses decreased $2,623, from $13,907 to
$11,284 for the three months ended March 31, 2000 and 2001, respectively. This
decrease was primarily due to a decrease in legal and accounting expenses during
the three months ended March 31, 2001 compared to the same period in 2000.
Interest income decreased $469, from $1,143 to $674 for the three months ended
March 31, 2000 and 2001, respectively. This decrease in interest income was
primarily the result of lower average levels of invested cash balances and lower
interest rates during the first three months of 2001 compared to the same period
in 2000.
Limited Partners' net income (loss) per partnership unit changed $2.23, from
$(.99) to $1.24 for the three months ended March 31, 2000 and 2001,
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
None
b) Reports on Form 8-K
None
-10-
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: May 10, 2001
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