ITEM 1. BUSINESS
Jones Programming Partners 2-A, Ltd. (the "Partnership") is a Colorado limited partnership that was formed in March 1992 pursuant to the public offering of limited partnership interests in the Jones Programming Partners Limited Partnership Program. Jones Entertainment Group, Ltd. is the general partner of the Partnership (the "General Partner"). The Partnership was formed to acquire, develop, produce and distribute original programming to be owned by the Partnership. All the Partnership's films are subject to a variety of license agreements for various markets. Some of these agreements will last beyond the year 2001. 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. During 2000, the Partnership had two programming properties: "Charlton Heston Presents: The Bible" and "The Whipping Boy." 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 these programming projects.
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 $2,370,000, which included a $240,000 production and overhead fee paid 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 for an investment of $1,000,000 toward the production costs for the Bible Programs. After consideration of the reimbursement, the Partnership's total investment in the Bible Programs was $1,369,764. In June 1998, the Partnership fully amortized its net investment in this film. From inception to December 31, 2000, the Partnership has recognized $2,036,811 of revenue from this film, of which $900,677 was retained by the distributors of the film for their fees and marketing costs. Of the remaining $1,136,134, the Partnership received $1,129,421 as of December 31, 2000. The Partnership will receive the outstanding balance of $6,713 due from J/G Distribution Company in 2001.
THE WHIPPING BOY
In August 1993, the Partnership acquired the rights to the Newbury Award-winning book, "The Whipping Boy." "The Whipping Boy" was produced as a two-hour telefilm which premiered in the North American television market on The Disney Channel. The film's final cost was approximately $4,100,000. As of December 31, 2000, the Partnership had invested $2,661,487 in the film, which included a $468,000 production and overhead fee paid to the General Partner. The film was co-produced by the General Partner and Gemini Films, a German company. From inception to December 31, 2000, the Partnership has recognized $2,277,544 of revenue from this film, of which $2,100,000 represents the initial license fee from The Disney Channel that was used to finance the film's production. Of the remaining $177,544, $8,497 was retained by the distributors of the film for their fees and marketing costs and $169,047 was received by the Partnership as of December 31, 2000.
During the fourth quarter of 1999, the General Partner reassessed the anticipated gross revenues remaining from the distribution of "The Whipping Boy" 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 "The Whipping Boy" of $147,883 exceeded the film's estimated net realizable value of $7,883 as of December 31, 1999, resulting in a write-down of $140,000. The film's estimated net realizable value was calculated based on an estimate of anticipated revenues remaining over the life of the film from international and domestic television distribution, net of estimated distribution fees and costs, as of December 31, 1999.
During the fourth quarter of 2000, the General Partner again reassessed the anticipated gross revenue remaining from the distribution of "The Whipping Boy" 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 "The Whipping boy" of $6,722 should be fully written off, resulting in a final write down of $6,722.
As of December 31, 2000 the Partnership, after consideration of amortization and write-downs, fully amortized its net investment in the film.
GENERAL MATTERS
The General Partner, on behalf of the Partnership, is pursuing the sale of the Partnership's interests in its programming. See further discussion of the Partnership's distribution efforts concerning its films in ITEM 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 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 saleability 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 obtained 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 Partnership has encountered 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. 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 age and technical specifications of the Partnership's programming may also limit distribution in certain international and domestic 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, in the past, and may again encounter additional risks, such as foreign currency rate fluctuations, compliance and regulatory requirements, differences in tax laws, and economic and political environments.
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. 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 the programming will be successful.
ITEM 2.
ITEM 2. PROPERTIES
See ITEM 1.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II.
ITEM 5.
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 28, 2001, the number of equity security holders in the Partnership was 642.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7.
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
2000 COMPARED TO 1999
Revenues of the Partnership decreased $212,289, from $240,736 in 1999 to $28,447 in 2000. This decrease in revenues was primarily the result of a significant decrease in home video and other sales of "The Bible Programs". Also, revenues from "The Whipping Boy" decreased in 2000 compared to 1999.
Filmed entertainment costs decreased $956, from $2,117 in 1999 to $1,161 in 2000. This decrease corresponds to the decrease in revenues from "The Whipping Boy" in 2000 compared to 1999. Filmed entertainment costs are amortized over the life of each film in the ratio that current gross revenues bear to anticipated total gross revenues.
Distribution fees and expenses decreased $68,080, from $80,037 in 1999 to $11,957 in 2000. This decrease was the result of decreased home video sales of the "Bible Programs" under the Partnership's distribution agreement with J/G Distribution Company, which is owned 50% by the General Partner and 50% by GoodTimes Home Video Corporation. Distribution fees and expenses relate to the compensation due and costs incurred by various parties 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 was $140,000 in 1999, and an additional $6,722 was written down in 2000. The loss on write-down of film production in 2000 was the result of a full write-down of the Partnerships' net investment in "The Whipping Boy".
Operating, general and administrative expenses increased $4,533, from $27,549 in 1999 to $32,082 in 2000. This increase was primarily the result of an increase in legal expenses related to the potential sale of the Partnership's assets during 2000 compared to 1999.
Interest income increased $2,953, from $3,583 in 1999 to $6,536 in 2000. This increase was the result of higher interest rates and higher average levels of invested cash balances during 2000 compared to 1999.
Limited Partners' net loss per partnership unit increased $(1.02), from $(.47) in 1999 to $(1.49) in 2000. This change was due to the results of operations as discussed above.
1999 COMPARED TO 1998
Revenues of the Partnership decreased $51,833, from $292,569 in 1998 to $240,736 in 1999. This decrease in revenues was primarily related to a $53,421 decrease in the sales of "The Bible Programs," from $292,040 in 1998 to $238,619 in 1999.
Filmed entertainment costs decreased $17,712, from $19,829 in 1998 to $2,117 in 1999. This decrease was the result of the full amortization of the capitalized production costs relating to "The Bible Programs" during 1998. Filmed entertainment costs are amortized over the life of each film in the ratio that current gross revenues bear to anticipated total gross revenues.
Distribution fees and expenses decreased $66,040, from $146,077 in 1998 to $80,037 in 1999. This decrease was the result of decreased home video sales of the "Bible Programs" under the Partnership's distribution agreement with J/G Distribution Company. Distribution fees and expenses relate to the compensation due and costs incurred by unaffiliated parties 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 was $194,907 in 1998, and an additional $140,000 was written down in 1999. The 1999 write down resulted in a remaining net investment in "The Whipping Boy" of $7,883 as of December 31, 1999.
Operating, general and administrative expenses decreased $3,171, from $30,720 in 1998 to $27,549 in 1999. This decrease was due primarily to decreased direct costs allocable to the operations of the Partnership that were charged to the Partnership by the General Partner and its affiliates in 1999 as compared to 1998. The decrease in direct costs allocable to the Partnership's operations resulted mainly from 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 $13,199, from $16,782 in 1998 to $3,583 in 1999. This decrease was due primarily to lower levels of invested cash balances existing during 1999 as compared to 1998.
Limited Partners' net loss per partnership unit changed $6.77, from $(7.24) in 1998 to $(.47) in 1999. 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 its programming. As of December 31, 2000, the Partnership had approximately $21,000 in cash. Cash generated from operations for the year ended December 31, 2000 was approximately $34,000. The
Partnership will not invest in any additional programming projects, but instead will focus on the distribution and/or sale of its two existing films. The Partnership had outstanding receivables totaling approximately $7,000 as of December 31, 2000. The Partnership anticipates that these amounts will be received in the first quarter of 2001.
Regular quarterly distributions were suspended beginning with the quarter ended September 30, 1998. However, a distribution of $141,782 was declared for the three months ended March 31, 1999, and was paid in May 1999. A distribution of $141,781 was declared for the three months ended June 30, 2000 and was paid in August 2000. 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 once proceeds are received from the sale, or sales, of the Partnership's assets. There is no assurance regarding 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 cannot predict when or at what price the Partnership's interests in its programming ultimately will be sold, but has initiated sales efforts. 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 will be distributed to the partners after such sale. It is probable that the distributions of the proceeds from the sale or 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 70% of their initial capital contributions to the Partnership. The Partnership has obtained 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.
In May 1992, the General Partner, on behalf of the Partnership, entered into an agreement with Agamemnon Films ("Agamemnon") with respect to the production of the Bible Programs. Pursuant to this agreement, Agamemnon does not participate in profit sharing until certain revenues to the General Partner and the Partnership from the distribution of the Bible Programs are first applied towards the Partnership's recoupment of its production investment, its share of production overages, and a production fee plus interest on the unrecouped investment. In 2000, the Partnership fully recouped the requisite amount and Agamemnon began to participate in profits from the distribution of the Bible Programs. The Partnership will therefore receive a decreased percentage of the net proceeds from the distribution of the Bible Programs.
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. Any cash flow from operating activities will be primarily generated from the Bible Programs.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Partnership does not hold any financial instruments which present significant interest or market risk.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS
JONES PROGRAMMING PARTNERS 2-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 2000
INDEX
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Jones Programming Partners 2-A, Ltd.:
We have audited the accompanying statements of financial position of Jones Programming Partners 2-A, Ltd. (a Colorado limited partnership) as of December 31, 1999 and 2000, and the related statements of operations, partners' capital (deficit) and cash flows for each of the three years in the period ended December 31, 2000. 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 auditing standards generally accepted 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 2-A, Ltd. as of December 31, 1999 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Denver, Colorado, March 2, 2001.
JONES PROGRAMMING PARTNERS 2-A, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL POSITION
The accompanying notes are an integral part of these financial statements.
JONES PROGRAMMING PARTNERS 2-A, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of these financial statements.
JONES PROGRAMMING PARTNERS 2-A, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
The accompanying notes are an integral part of these financial statements.
JONES PROGRAMMING PARTNERS 2-A, LTD. (A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements.
JONES PROGRAMMING PARTNERS 2-A, LTD. (A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND BUSINESS
In March 1992, Jones Programming Partners 2-A, Ltd. (the "Partnership"), was formed as a limited partnership pursuant to the laws of the State of Colorado to engage in the acquisition, development, production, 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 revenue in accordance with the provisions of Statement of Financial Accounting Standards No. 139 ("SFAS No. 139") and AICPA Statement of Position No. 00-2 ("SOP 00-2"). Pursuant to SFAS No. 139 and SOP 00-2, revenues from domestic and international licensing agreements for programming are recognized when such amounts are known and the film is available for exhibition or telecast, and when certain other criteria set forth in SFAS No. 139 and SOP 00-2 are met. Advances received for licensing or other purposes prior to exhibition or telecast are deferred and recognized as revenue when the above conditions are met. The adoption of SFAS No. 139 and SOP 00-2 in 2000 did not materially effect the manner in which the Partnership recognizes revenue.
INVESTMENT IN AND ADVANCES FOR FILM PRODUCTIONS - Investment in and advances for film production consists of advances to production entities for story rights, production, 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 as investment in film production. Film production costs are amortized based upon the individual-film-forecast method. Estimated losses, if any, will be provided for in full when determined by the General Partner (see Note 5.)
DISTRIBUTION COSTS - Commissions, distribution expenses and marketing costs incurred in connection with domestic and international distribution are recorded at the time that the related license fees are recorded as revenue by the Partnership.
USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 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. Thereafter, profits/losses and distributions will generally be allocated 80 percent to the limited partners and 20 percent to the General Partner. 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 70% of their initial capital contributions to the Partnership.
(4) TRANSACTIONS WITH AFFILIATES
The Partnership and Jones Documentary Film Corporation ("JDFC") granted the General Partner the exclusive rights to distribute four one-hour programs for television, entitled "Charlton Heston Presents: The Bible" (the "Bible Programs"). To accomplish this, the General Partner, on its own behalf, and GoodTimes Home Video Corporation ("GoodTimes"), an unaffiliated entity directly involved in the specialty home video and international television distribution business, entered into an agreement to form J/G Distribution Company to distribute the Bible Programs. J/G Distribution Company was formed in June 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 in all markets, all languages, and all media in perpetuity. J/G Distribution Company holds the copyright for the benefit of the Partnership (50 percent interest) and GoodTimes (50 percent interest). Once the Partnership is fully recouped, pursuant to the Jones/Agamemnon agreement, Agamemnon Films begins to receive a portion of the revenue generated from the distribution of the Bible Programs. In the fourth quarter of 2000, Agamemnon Films began to participate in profit sharing from the distribution of the Bible Programs. J/G Distribution Company is currently distributing the Bible Programs in the retail home video market. As of December 31, 2000, gross sales made by J/G Distribution Company totaled $3,589,741, of which $1,794,871 has been retained by J/G Distribution Company for its fees and marketing costs, with the remaining $1,794,870 belonging to the Partnership, GoodTimes, and Agamemnon Films. As of December 31, 2000, the Partnership had received $879,421 from J/G Distribution Company. The Partnership expects to receive the outstanding balance of $6,713 due from J/G Distribution Company in 2001.
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 $9,605, $7,745, and $8,625 for expenses and administrative services for the years ended December 31, 1998, 1999, and 2000, respectively.
(5) INVESTMENT IN AND 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 production costs of the Bible Programs were approximately $2,370,000, which included a $240,000 production and overhead fee paid 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 GoodTimes for an investment of $1,000,000 toward the production
costs for the Bible Programs. After consideration of the reimbursement, the Partnership's total investment in the Bible Programs is $1,369,764. From inception to December 31, 2000, the Partnership has recognized $2,036,811 of revenue from this film, of which $900,677 was paid for distribution fees and marketing costs. Of the remaining $1,136,134, the Partnership received $1,129,421 as of December 31, 2000. The Partnership will receive the outstanding balance of $6,713 due from J/G Distribution Company in 2001.
In June 1998, the Partnership fully amortized its net investment in this film.
"THE WHIPPING BOY"
In August 1993, the Partnership acquired the rights to the Newbury Award-winning book "The Whipping Boy." "The Whipping Boy" was produced as a two hour telefilm which premiered in the North American television market on The Disney Channel. The film's final cost was approximately $4,100,000. As of December 31, 2000, the Partnership had invested $2,661,487 in the film, which included a $468,000 production and overhead fee paid to the General Partner. The film was co-produced by the General Partner and Gemini Films, a German company. The completed picture was delivered to The Disney Channel in the second quarter of 1994. From inception to December 31, 2000, the Partnership has recognized $2,277,544 of revenue from this film, of which $2,100,000 represents the initial license fee from The Disney Channel that was used to finance the film's production. Of the remaining $177,544, $8,497 was retained by the distributors of the film for their fees and marketing costs and the remaining $169,047 was received by the Partnership as of December 31, 2000.
In the fourth quarter of 1998, the General Partner reassessed the anticipated gross revenue remaining from the distribution of the "The Whipping Boy" 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 "The Whipping Boy" of $344,907 exceeded the film's estimated net realizable value of $150,000 as of December 31, 1998, resulting in a write-down of $194,907. The film's estimated net realizable value was calculated based on an estimate of anticipated revenues remaining over the life of the film from international and domestic television distribution, net of estimated distribution fees and costs, as of December 31, 1998.
Likewise, during the fourth quarter of 1999, the General Partner reassessed the anticipated gross revenue remaining from the distribution of "The Whipping Boy" 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 "The Whipping Boy" of $147,883 exceeded the film's estimated net realizable value of $7,883 as of December 31, 1999, resulting in a write-down of $140,000. The film's estimated net realizable value was calculated based on an estimate of anticipated revenues remaining over the life of the film from international and domestic television distribution, net of estimated distribution fees and costs, as of December 31, 1999.
During the fourth quarter of 2000, the General Partner again reassessed the anticipated gross revenue remaining from the distribution of "The Whipping Boy" 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 remaining net investment in "The Whipping Boy" should be written off, resulting in a final write-down of $6,722.
As of December 31, 2000 the Partnership, after consideration of amortization and write-downs, fully amortized its net investment in the film.
(6) INCOME TAXES
Income taxes 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 will be 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 Partnership's tax status, or 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 difference between the financial reporting and tax bases of the Partnership's assets and liabilities is associated with the difference between 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. Film production cost recognized under accounting principles generally accepted in the United States exceeded (was less than) the amount of expense recognized for tax purposes by approximately $214,000, $99,000 and $(20,000) for the years ended December 31, 1998, 1999, and 2000, respectively.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10.
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.
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 of a number of subsidiaries for Jones Media Networks, Ltd. (formerly known as Jones International Networks, Ltd.). 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.
Mr. Timothy J. Burke is Vice President and Director of the General Partner. Mr. Burke is a Group Vice President of Jones International, Ltd. and an officer and/or director of many other Jones International, Ltd. affiliated companies. He has over 24 years of financial experience, and has been employed with Jones for 18 years. Prior to the Jones companies, Mr. Burke was a Tax Manager with Arthur Andersen & Co. He received a B.A. in Accounting and a J.D from the University of Iowa.
ITEM 11.
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 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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 28, 2001, no person or entity owns more than 5 percent of the limited partnership interests in the Partnership.
ITEM 13.
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, which are set forth in the Partnership's limited partnership agreement, 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.
In connection with the distribution of "Charlton Heston Presents: The Bible," J/G Distribution Company, which is owned 50% by the General Partner and 50% by GoodTimes, is entitled to certain distribution rights and fees. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for a description of these distribution rights and fees. As of December 31, 2000, gross sales made by J/G Distribution Company totaled $3,589,741, of which $1,794,871 has been retained by J/G Distribution Company for its fees and marketing costs, with the remaining $1,794,870 belonging to the Partnership, GoodTimes, and Agamemnon Films. Additionally, $250,000 was received directly by the Partnership as its share of the initial license fee from A&E. As of December 31, 2000, the Partnership had received $879,421 from J/G Distribution Company and the $250,000 from A&E. The Partnership will receive the outstanding balance of $6,713 due from J/G Distribution Company in 2001.
PART IV.
ITEM 14.
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. 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.
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 2-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 Executive Officer Dated: March 21, 2001 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 21, 2001 (Principal Executive Officer)
By: /s/ TIMOTHY J. BURKE --------------------------------- Dated: March 21, 2001 Timothy J. Burke