-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, a7bYd/5covlVBMqjAU8G3nN7jNUcbJvG9IL7A1LdwogK5qtGtd9OKW2HcEkF3RiQ ozGo9IodlhkkyE8r9TQ+pQ== 0000950134-94-001354.txt : 19941122 0000950134-94-001354.hdr.sgml : 19941122 ACCESSION NUMBER: 0000950134-94-001354 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES PROGRAMMING PARTNERS 2-A LTD CENTRAL INDEX KEY: 0000868610 STANDARD INDUSTRIAL CLASSIFICATION: 7812 IRS NUMBER: 841088829 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20944 FILM NUMBER: 94559464 BUSINESS ADDRESS: STREET 1: 9697 E MINERAL AVE STREET 2: C/O JONES ENTERTAINMENT GROUP LTD CITY: ENGLEWOOD STATE: CO ZIP: 80155-3309 BUSINESS PHONE: 3037923111 MAIL ADDRESS: STREET 1: P O BOX 3309 STREET 2: 9697 E MINERAL AVE CITY: ENGLEWOOD STATE: CO ZIP: 80155 FORMER COMPANY: FORMER CONFORMED NAME: JONES PROGRAMMING PARTNERS 2 DATE OF NAME CHANGE: 19600201 10-Q 1 FORM 10-Q (FOR THE PERIOD ENDED 09/30/94) 1 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, 1994. ( ) 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 0-20944 Jones Programming Partners 2-A, Ltd. Exact name of registrant as specified in charter Colorado #84-1088819 State of organization I.R.S. employer I.D.# 9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309 Address of principal executive office (303) 792-3111 Registrant's telephone number Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding l2 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 2 JONES PROGRAMMING PARTNERS 2-A, LTD. (A Limited Partnership) UNAUDITED BALANCE SHEETS
September 30, December 31, ASSETS 1994 1993 ------ ----------- ---------- CASH AND CASH EQUIVALENTS $ 104,460 $ 253,758 ACCOUNTS RECEIVABLE Domestic income receivable 600,000 - Foreign income receivable - 274,338 INVESTMENT/ADVANCES FOR FILM PRODUCTION, net of accumulated amortization of $2,774,709 and $707,920 at September 30, 1994 and December 31, 1993, respectively 3,177,057 4,861,698 ---------- Total assets $3,881,517 $5,389,794 ========== LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- LIABILITIES: Accounts payable to affiliates $ 406,134 $ 168,028 Production and overhead fee payable to the General Partner - 468,000 Accrued distributions to partners 141,781 141,781 Accrued liabilities 4,696 2,500 ----------- ---------- 552,611 780,309 ----------- ---------- DEFERRED REVENUE - 980,167 ----------- ---------- PARTNERS' CAPITAL (DEFICIT): General Partner- Contributed capital 1,000 1,000 Distributions (11,999) (7,745) Accumulated deficit (2,962) (4,237) ----------- ---------- (13,961) (10,982) ----------- ---------- Limited Partners - Net contributed capital (11,229 units outstanding at September 30, 1994 and December 31, 1993, respectively) 4,823,980 4,826,514 Distributions (1,187,881) (766,792) Accumulated deficit (293,232) (419,422) ----------- ---------- 3,342,867 3,640,300 ---------- Total liabilities and partners' capital (deficit) $ 3,881,517 $5,389,794 ==========
The accompanying notes to unaudited financial statements are an integral part of these unaudited balance sheets. 2 3 JONES PROGRAMMING PARTNERS 2-A, LTD. (A Limited Partnership) UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended September 30, September 30, ------------------------- ------------------------------ 1994 1993 1994 1993 -------- ------- ---------- ------- GROSS REVENUES $727,006 $ - $2,313,149 $ - COSTS AND EXPENSES: Costs of filmed entertainment 683,384 - 2,066,789 - Distribution fees and expenses 95,146 - 104,839 - Operating, general and administrative expenses 4,150 4,239 18,369 23,648 -------- ------- ---------- ------- OPERATING INCOME (LOSS) (55,674) (4,239) 123,152 (23,648) -------- ------- ---------- ------- OTHER INCOME (EXPENSE): Interest income 1,656 5,879 4,313 35,792 Other, net - 18,507 - 18,507 -------- ------- ---------- ------- NET INCOME (LOSS) $(54,018) $20,147 $ 127,465 $30,651 ======== ======= ========== ======= ALLOCATION OF NET INCOME (LOSS): General Partner $ (540) $ 201 $ 1,275 $ 307 ======== ======= ========== ======= Limited Partners $(53,478) $19,946 $ 126,190 $30,344 ======== ======= ========== ======= NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT $ (4.76) $ 1.78 $ 11.24 $ 2.81 ======== ======= ========== ======= WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS OUTSTANDING 11,229 11,229 11,229 10,794 ======== ======= ========== =======
The accompanying notes to unaudited financial statements are an integral part of these unaudited statements. 3 4 JONES PROGRAMMING PARTNERS 2-A, LTD. (A Limited Partnership) UNAUDITED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, ----------------------------- 1994 1993 ---------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 127,465 $ 30,651 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of filmed entertainment costs 2,066,789 - Increase in domestic income receivable (600,000) - Decrease in foreign income receivable 274,338 - Decrease in interest receivable - 20,345 Increase in other assets - (67,925) Increase (decrease) in accrued liabilities 2,196 (845) Increase in accounts payable to affiliates 238,106 468,930 Increase (decrease) in deferred revenue (980,167) 490,083 ---------- ------------ Net cash provided by operating activities 1,128,727 941,239 ---------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Payment of production and overhead fee (468,000) - Film production advances (382,148) (3,925,458) ---------- ------------ Net cash used in investing activities (850,148) (3,925,458) ---------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Contributed capital, net of commissions and syndication costs - 843,525 Interest distribution to limited partners (2,534) - Increase in accrued distributions to partners - 23,953 Distributions to partners (425,343) (425,343) ---------- ------------ Net cash provided by (used in ) financing activities (427,877) 442,135 ---------- ------------ Decrease in cash and cash equivalents (149,298) (2,542,084) Cash and cash equivalents, beginning of period 253,758 2,784,773 ---------- ------------ Cash and cash equivalents, end of period $ 104,460 $ 242,689 ========== ============
The accompanying notes to unaudited financial statements are an integral part of these unaudited statements. 4 5 JONES PROGRAMMING PARTNERS 2-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 Balance Sheets 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 2-A, Ltd. (the "Partnership") at September 30, 1994 and December 31, 1993 and the results of operations and its cash flows for the three and nine month periods ended September 30, 1994 and 1993. Results of operations for these periods are not necessarily indicative of results to be expected for the full year. Certain prior year amounts have been reclassified to conform to the 1994 presentation. (2) TRANSACTIONS WITH AFFILIATED ENTITIES Jones Entertainment Group, Ltd. (the "General Partner") receives a production and overhead fee for administering the affairs of the Partnership equal to 12 percent of the lower of direct costs or budgeted direct costs of each programming project. This fee will be calculated and payable at the time principal photography commences on each particular project and, in the case of a series, is payable on a per episode basis. The Partnership paid a $100,000 production and overhead fee to the General Partner in March 1993 for the production of "Household Saints." In addition, the Partnership paid a $468,000 production and overhead fee to the General Partner in the second quarter of 1994 for the production of "The Whipping Boy." These fees are included in Investment/Advances for Film Production on the Partnership's Unaudited Balance Sheets. It is not anticipated that the General Partner will receive any additional production and overhead fees from the Partnership as the Partnership is not expected to invest in any additional programming projects. The General Partner also 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 and auditing expenses, preparation and distribution of reports to investors and salaries of any full or part-time employees. The General Partner believes that the methodology used in allocating overhead and administrative expenses is reasonable. Although the General Partner is entitled to reimbursement for all direct and indirect expenses allocable to the Partnership, for the three month periods ended September 30, 1994 and 1993, only $1,674 and $624, respectively, were charged to the Partnership for such expenses and for the nine month periods ended September 30, 1994 and 1993, only $3,261 and $3,612, respectively, were charged to the Partnership for such expenses. (3) INVESTMENT/ADVANCES FOR FILM PRODUCTION "Charlton Heston Presents: The Bible" In May 1992, the General Partner, on behalf of the Partnership, entered into an agreement with Agamemnon Films, an unaffiliated party, to produce four one-hour programs for television, entitled "Charlton Heston Presents: The Bible" (the "Bible Programs"). The production costs of the Bible Programs were approximately $2,100,000. In addition, the Partnership paid a $240,000 production and overhead fee to the General Partner. In return for agreeing to fund these production costs, the Partnership acquired all rights to the Bible Programs in all markets and in all media in perpetuity. As described in the following paragraph, the Partnership subsequently assigned half of its ownership of the Bible Programs to an unaffiliated party for an investment of $1,000,000 toward the production costs for the Bible Programs. After consideration of this investment by the unaffiliated party, the Partnership's total investment in the Bible Programs was $1,369,765 and its net investment, after consideration of amortization, was $993,733 at September 30, 1994. 5 6 In order to reduce the Partnership's financial exposure, the General Partner, on behalf of the Partnership, assigned one-half of the Partnership's interest in the Bible Programs to GoodTimes Home Video Corporation ("GoodTimes"), an unaffiliated entity directly involved in the specialty home video and international television distribution business, for an investment by GoodTimes of $1,000,000. The Partnership and GoodTimes funded Jones Documentary Film Corporation ("JDFC"), which in turn contracted with Agamemnon Films for the production of the Bible Programs. JDFC was formed to insulate the Partnership and GoodTimes from certain risks and potential liabilities associated with the production of programming in foreign countries because the Bible Programs were filmed on location in the Holy Lands. The Partnership and JDFC granted the General Partner the exclusive rights to distribute the Bible Programs. To accomplish this, the General Partner, on its own behalf, and GoodTimes entered into an agreement to form J/G Distribution Company to distribute the Bible Programs. J/G Distribution Company was formed effective as of June 24, 1992 and the Partnership granted it the sole and exclusive right to exhibit and distribute, and to license others to exhibit and distribute, the Bible Programs throughout the universe, in perpetuity, in all languages and in all media. J/G Distribution Company holds the copyright for the benefit of the Partnership (50 percent interest) and GoodTimes (50 percent interest). J/G Distribution Company is currently distributing the Bible Programs in the retail home video market. As of September 30, 1994, the Partnership's share of gross revenues totalled $171,994, of which $85,997 was retained by the distributor for its fees and marketing costs. The remaining $85,997 has been received by the Partnership. "Household Saints" In February 1993, the Partnership acquired a one-third ownership interest in a film scheduled for world-wide theatrical release entitled "Household Saints." The budgeted production costs of "Household Saints" were approximately $5,000,000, and the final production costs were approximately $5,300,000. For a one-third ownership interest in the film, the Partnership has contributed one-third of the budgeted production costs, or $1,666,667. Two unaffiliated entities contributed similar amounts. At September 30, 1994, the Partnership had invested approximately $1,913,890 in the film, which included production and overhead fee of $100,000 paid to the General Partner by the Partnership. Although under the terms of the Partnership's limited partnership agreement the General Partner is entitled to a fee of 12 percent of the lower of actual or budgeted production costs for each Partnership film project, which fee would have been approximately $600,000 for "Household Saints," the General Partner only took $100,000 as its production and overhead fee due to the limited involvement of the General Partner in the film's production. At September 30, 1994, the Partnership's net investment in the film, after consideration of amortization, was $1,389,138. The other owners of the film, which are not affiliated with the Partnership or the General Partner, are New Line Productions, Inc. ("New Line") and Columbia Tristar Home Video ("Columbia Tristar"), each of which owns a one-third interest in the film for contributing one-third of the film's budgeted production costs and completion costs. As equal participants in the film, the Partnership, New Line and Columbia Tristar will generally share equally in the net revenues generated by the film's distribution in all markets until they each have recouped their investment in the film plus 12 percent per annum interest on their unrecouped investment, after which net revenues will also be shared with the film's talent. "Household Saints" was released in theatres in the United States and Canada in September 1993 and the film performed to a disappointing box office of approximately $600,000 in the United States. Fine Line, a subsidiary of New Line, was the film's North American theatrical distributor. Fine Line earned a distribution fee equal to 20 percent of gross revenues generated by the distribution of the film in theatres in the United States and Canada and it was entitled to reimbursement of its distribution costs. Net theatrical revenues were split equally among the Partnership, New Line and Columbia Tristar. The funds that the Partnership and New Line each contributed for prints and advertising in connection with the film's North American theatrical release have been reimbursed to the Partnership and New Line. As of September 30, 1994, the Partnership's share of gross revenues totalled $603,198, of which $203,198 will be retained by the distributor for its fees and marketing costs. The remaining $400,000 has been received by the Partnership and has been applied toward recoupment of its $406,000 prints and advertising expenditures. The film's international distribution in all media is being undertaken by New Line International, also a subsidiary of New Line. From the gross revenues generated by the film's distribution in all international media, New Line International will be entitled to a 20 percent distribution fee plus reimbursement of its costs, which are not to exceed $50,000, incurred in distributing the film internationally. Net international revenues will be split equally among the Partnership, New Line and Columbia Tristar. As of September 30, 1994, international sales of approximately $1,050,000 had been made, of which approximately $946,000 was attributed to sales in Italy and Spain. Distribution in the international media is continuing. 6 7 The film's domestic home video distribution was undertaken by Columbia Tristar. The disappointing U.S.theatrical box office translated to a disappointing unit volume of rental home video sales (under 10,000 units have been sold). From the gross revenues generated by the distribution of the film in U.S. home video markets, Columbia Tristar will be entitled to a 20 percent distribution fee plus reimbursement of its distribution costs, which are not to exceed 18 percent of home video gross revenues. Net revenues from home video sales will be split equally among the Partnership, New Line and Columbia Tristar. As of September 30, 1994, domestic home video sales of approximately $24,000 had been made. The film's distribution on television in the United States is being undertaken jointly by New Line and the General Partner. From gross revenues generated by the distribution of the film in U.S. television markets, New Line and the General Partner will split a 20 percent distribution fee and will be entitled to reimbursement of their costs incurred in distributing the film in such markets. Net revenues from the distribution of the film in U.S. television markets will be split equally among the Partnership, New Line and Columbia Tristar. All of the foregoing net revenue splits will govern until the Partnership, New Line and Columbia Tristar recoup their original investments plus interest on any unrecouped funds. Thereafter, a portion of net revenues will be shared with the production unit, which includes the producers, writers, director and actors. Such net post-recoupment revenues will be split 35 percent to the production unit, 25 percent to the Partnership, 20 percent to New Line and 20 percent to Columbia Tristar until the production unit has received $1,000,000 in net revenues. After the production unit has received $1,000,000 in net revenues and until it has received $2,000,000 in net revenues, the split will be 25 percent to the production unit, 35 percent to the Partnership, 20 percent to New Line and 20 percent to Columbia Tristar. After the production unit has received $2,000,000 in net revenues, and thereafter, in perpetuity, net revenues will be split 10 percent to the production unit, 50 percent to the Partnership, 20 percent to New Line and 20 percent to Columbia Tristar. The terms of the distribution agreements with each of New Line and Columbia Tristar are 15 years, and can be renewed by New Line and Columbia Tristar at their option subject to the Partnership's right, at five-year intervals thereafter, to acquire New Line's and/or Columbia Tristar's distribution rights if the Partnership has not yet recouped its investment in the film and if the Partnership has another bona fide distribution plan in place. "The Whipping Boy" In August 1993, the Partnership acquired the rights to "The Whipping Boy." "The Whipping Boy" has been made into a two-hour telefilm. The film premiered in the North American television market on The Disney Channel, which is one of the leading pay cable television services in the United States and Canada, in July 1994. The film cost was approximately $4,100,000. At September 30, 1994, the Partnership had invested approximately $2,668,111 in the film, which includes a $468,000 production and overhead fee paid to the General Partner. At September 30, 1994, the Partnership's net investment in the film, after consideration of amortization, was $794,186. The film was co-produced by the General Partner and Gemini Films, a German company. Principal photography on the movie commenced in September 1993, and post-production occurred in October 1993. The completed picture was delivered to The Disney Channel in the second quarter of 1994. The Partnership was responsible for approximately one-half of the $4,100,000 production cost, with the balance of the production budget funded by Gemini Films and other co-production partners and/or territorial advances from the film's international distributors. The amount contributed to the production budget by the Partnership will be partially reimbursed by license advances totalling $2,100,000 from The Disney Channel, of which $1,500,000 has been received by the Partnership at September 30, 1994. Gemini Films will have, in perpetuity, the copyright and all exploitation rights to the film in German language territories (defined as Germany, Austria, German-speaking Switzerland and German-speaking Luxembourg). It is anticipated that the film will be released theatrically in Germany in the fourth quarter. Although these exploitation rights will remain the sole property of Gemini Films, Gemini Films will account to the Partnership for any revenue therefrom. The Partnership will own the world-wide copyright, excluding German language territories, in perpetuity. Although the Partnership will own all exploitation rights in all media in North America, which is defined as the United States, Canada and their respective territories and possessions, the Partnership will account to Gemini Films for any revenue generated therefrom. 7 8 From the movie's North American revenues, the Partnership will first be entitled to recover its investment plus interest. Thereafter, the Partnership will receive 90 percent of all North American revenues and Gemini Films will receive 10 percent of such revenues. With respect to international revenues from the movie's distribution, after Gemini Films recovers $250,000 of its investment in the movie's production budget, any funded overages and interest out of net international revenues, the Partnership will receive 20 percent of net international revenues and Gemini Films will receive 80 percent of net international revenues. The General Partner and Gemini Films have selected Canal Plus Distribution as the company that will distribute and exploit the movie outside of North America. Canal Plus Distribution will earn distribution fees of 15 percent of the film's gross receipts outside of North America, and it will be reimbursed for its expenses capped at 10 percent of the film's gross receipts outside of North America (excluding dubbing costs). Canal Plus Distribution will be responsible for accounting and remitting to Gemini Films the net revenues from the film's distribution in all markets and in all media outside of North America. Gemini Films will be responsible for forwarding the Partnership's share of such revenues within 10 days of receipt of such funds from Canal Plus. 8 9 JONES PROGRAMMING PARTNERS 2-A, LTD. (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Capital Resources The Partnership's potential sources of capital are funds to be received from the domestic and international distribution of the Partnership's programming. The Partnership received limited partner subscriptions totaling $5,614,500, of which $4,842,506 was available for investment after payment of sales commissions and other organizational and offering costs. The Partnership has distributed $18,526 of interest earned on these subscriptions; $15,992 was distributed to the limited partners in 1992 when the Partnership was formed and an additional $2,534 was distributed to the limited partners in 1994 for interest earned on subscriptions during the rescission period. The Partnership has invested all of its net offering proceeds in film projects. At September 30, 1994, the Partnership had $104,460 in cash. It is not anticipated that the Partnership will invest in any additional programming projects, but instead will focus on the distribution of its existing projects. Liquidity The Partnership's principal sources of liquidity are cash on hand and amounts to be received fromthe domestic and international distribution of its programming. In May 1992, the General Partner, on behalf of the Partnership, entered into an agreement with Agamemnon Films, an unaffiliated party, to produce four one-hour programs for television, entitled "Charlton Heston Presents: The Bible" (the "Bible Programs"). The production costs of the Bible Programs were approximately $2,100,000. In addition, the Partnership paid a $240,000 production and overhead fee to the General Partner. In return for agreeing to fund these production costs, the Partnership acquired all rights to the Bible Programs in all markets and in all media in perpetuity. The Partnership subsequently assigned half of its ownership of the Bible Programs to an unaffiliated party, GoodTimes, for an investment of $1,000,000 toward the production costs for the Bible Programs. In April 1992, the General Partner, on behalf of the Partnership, entered into an agreement with an affiliate of the Arts & Entertainment Network (the "A&E Network") for the rights to exhibit the Bible Programs over the A&E Network for a period of four years. Under the terms of this agreement, the Partnership received $400,000 from the A&E Network. Of the $400,000 received by the Partnership pursuant to its agreement with the A&E Network, $191,000 was paid to GoodTimes Home Video Corporation for its 50 percent interest, net of $9,000 in administrative costs. The Partnership and the A&E Network each had an option to terminate their agreement at the end of the four-year exhibition period within twelve months from the November 6, 1992 delivery of the Bible Programs to the A&E Network by paying the non-terminating party $50,000. In November 1993, the A&E Network decided to terminate the agreement. The Partnership granted the General Partner the exclusive rights to distribute the Bible Programs. To accomplish this, the General Partner, on its own behalf, and GoodTimes entered into an agreement to form J/G Distribution Company to distribute the Bible Programs. J/G Distribution Company was formed effective as of June 24, 1992 and the Partnership granted it the sole and exclusive right to exhibit and distribute, and to license others to exhibit and distribute, the Bible Programs throughout the universe, in perpetuity, in all languages and in all media. J/G Distribution Company holds the copyright for the benefit of the Partnership (50 percent interest) and GoodTimes (50 percent interest). J/G Distribution Company is currently distributing the Bible Programs in the retail home video market. At September 30, 1994, the Partnership had received $85,997 from the sale of the Bible Programs in the home video market by J/G Distribution Company. 9 10 In February 1993, the Partnership acquired a one-third ownership interest in a film scheduled for world-wide theatrical release entitled "Household Saints." For a one-third ownership interest in the film, the Partnership has contributed one-third of the budgeted production costs, or $1,666,667, along with two other unaffiliated entities. At September 30, 1994, the Partnership had invested approximately $1,913,890 in the film, which included production and overhead fee of $100,000 paid to the General Partner by the Partnership. Although under the terms of the Partnership's limited partnership agreement the General Partner is entitled to a fee of 12 percent of the lower of actual or budgeted production costs for each Partnership film project, which fee would have been approximately $600,000 for "Household Saints," the General Partner only took $100,000 as its production and overhead fee due to the limited involvement of the General Partner in the film's production. In addition, the Partnership paid approximately $406,000 for prints and advertising costs. An unaffiliated entity began marketing the film in all international media in March 1993, and in September 1993, the film was released in theaters in the United States and Canada. The film performed to a disappointing box office of approximately $600,000 in the United States. The disappointing U.S. theatrical box office translated to a disappointing unit volume of rental home video sales (under 10,000 units have been sold). The funds that the Partnership and another one-third owner contributed for prints and advertising in connection with the film's theatrical release will be reimbursed from world-wide revenues in a senior position before the three owners begin participating in the one-third revenue split. As of September 30, 1994, the Partnership's share of gross revenues totalled $603,198, of which $203,198 has been retained by the distributor for its fees and marketing costs. The remaining $400,000 has been received by the Partnership and had been applied toward recoupment of its prints and advertising costs. In August 1993, the Partnership acquired the rights to "The Whipping Boy." "The Whipping Boy" has been made into a two-hour telefilm. At September 30, 1994, the Partnership had invested approximately $2,668,111 in the film, which includes a $468,000 production and overhead fee payable to the General Partner. The Partnership has received approximately $1,500,000 and expects to receive $600,000 in the fourth quarter from The Disney Channel for licensing certain rights to the film to The Disney Channel. In December 1993, the Partnership declared a distribution of $141,781 which was paid to the partners in February 1994. In March 1994, the Partnership declared a distribution of $141,781, which was paid to the partners in May 1994. In June 1994, the Partnership declared a distribution of $141,781, which was paid to the partners in August 1994. In September 1994, the Partnership declared a distribution of $141,781, which will be paid to the partners in November 1994. These distributions were made using cash on hand, interest income and cash provided by operations. Distributions are expected to continue, although no determination has been made regarding any specific level of future distributions. Accounts payable to affiliates totalled $406,134 at September 30, 1994. Advances from affiliates were provided to meet the needs of the Partnership and will be repaid upon receipt of $600,000 from The Disney Channel, which is expected to be received in the fourth quarter. The General Partner believes that the Partnership has, and will continue to have, sufficient sources of capital available to conduct its operations and to meet its future presently anticipated obligations. RESULTS OF OPERATIONS Revenues of the Partnership increased $727,006, from $-0- for the three month period ended September 30, 1993 to $727,006 for the similar period in 1994. Revenues of the Partnership increased $2,313,149, from $-0- for the nine month period ended September 30, 1993 to $2,313,149 for the similar period in 1994. These increases were the result of sales of the Partnership's programming during 1994. In 1994, the Partnership recognized revenues of $41,155 associated with "Household Saints," $171,994 associated with "Charlton Heston Presents: The Bible" (the "Bible Programs") and $2,100,000 associated with "The Whipping Boy." Filmed entertainment costs increased $683,384, from $-0- for the three month period ended September 30, 1993 to $683,384 for the similar period in 1994. Filmed entertainment costs increased $2,066,789, from $-0- for the nine month period ended September 30, 1993 to $2,066,789 for the similar period in 1994. These increases were the result of increased revenues as mentioned above because filmed entertainment costs are amortized over the life of each film in the ratio that current gross revenues bear to anticipated total gross revenues. 10 11 Distribution fees and expenses increased $95,146, from $-0- for the three month period ended September 30, 1993 to $95,146 for the similar period in 1994. Distribution fees and expenses increased $104,839, from $-0- for the nine month period ended September 30, 1993 to $104,839 for the similar period in 1994. These increases were the result of domestic and international home video sales of the "Bible Programs" and of international sales of "Household Saints," which accounted for $85,997 and $18,842, respectively. Distribution fees and expenses relate to the compensation due and costs incurred by unaffiliated parties in selling the Partnership's film productions in the international theatrical, television and home video markets. Operating, general and administrative expenses decreased $89, from $4,239 for the three month period ended September 30, 1993 to $4,150 for the similar period in 1994. Operating, general and administrative expenses decreased $5,279, from $23,648 for the nine month period ended September 30, 1993 to $18,369 for the similar period in 1994. This decrease was primarily due to a decrease in professional service costs incurred by the Partnership during the nine month period ended September 30, 1994 as compared to the similar 1993 period. Interest income decreased $4,223, from $5,879 for the three month period ended September 30, 1993 to $1,656 for the similar period in 1994. Interest income decreased $31,479, from $35,792 for the nine month period ended September 30, 1993 to $4,313 for the similar period in 1994. These decreases in interest income are the result of lower average cash balances invested during 1994 as compared to average balances invested in 1993. The Partnership recorded net income of $20,147 for the three months ended September 30, 1993 as compared to a net loss of $54,018 for the similar period in 1994. This change is primarily due to an increase in the costs of filmed entertainment that exceeded the increase in revenues and a decrease in interest income in 1994. The Partnership recorded net income of $30,651 for the nine months ended September 30, 1993 as compared to net income of $127,465 for the similar period in 1994. This change is primarily due to a decrease in operating, general and administrative expenses and to an increase in revenues, which was only partially offset by an increase in the costs of filmed entertainment, in 1994. 11 12 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 12 13 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 2-A, LTD. BY: JONES ENTERTAINMENT GROUP, LTD. General Partner By: /S/ Theodore A. Henderson Theodore A. Henderson Principal Financial and Accounting Officer Dated: November 11, 1994 13 14 EXHIBIT INDEX
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - - ------- ----------- ------------ 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 1 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 104,460 0 600,000 0 0 0 0 0 3,881,517 552,611 0 0 0 0 3,328,906 3,881,517 0 2,313,149 0 2,189,997 (4,313) 0 0 127,465 0 127,465 0 0 0 127,465 11.24 11.24
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