<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1998 COMMISSION FILE NUMBER 2-22997
MILLS MUSIC TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-6183792
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
C/O MARINE MIDLAND BANK, 140 BROADWAY, NEW YORK, NY 10015
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 658-6014
INDICATE BY CHECK-MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 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
NUMBER OF TRUST UNITS OUTSTANDING AS OF MARCH 10, 1998 277,712
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PART I - FINANCIAL STATEMENTS
Item 1. Financial Information
MILLS MUSIC TRUST
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------
1998 1997
---- ----
<S> <C> <C>
Receipts:
Mills Music, Inc. $199,882 $259,173
-------- --------
Total Receipts 199,882 259,173
Undistributed cash
at beginning of
the period 8 20
Disbursements -
administrative expenses ( 12,270) ( 10,850)
-------- --------
Balance available
for distribution 187,620 248,343
Cash distribution
to unit holders 187,620 248,330
-------- --------
Undistributed cash at
end of the period $ 0 $ 13
======== ========
Cash distribution per
unit (based on 277,712
units outstanding) $ .6756 $ .8942
======== ========
</TABLE>
See accompanying Notes to Statements of Cash Receipts and Disbursements.
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MILLS MUSIC TRUST
NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
NOTE 1. ACCOUNTING POLICIES AND GENERAL INFORMATION
Mills Music Trust ("the Trust") was created in 1964
for the purpose of acquiring the rights to receive payments of
a deferred contingent purchase price contract obligation
payable by Mills Music, Inc. ("Mills"). The contingent
payments are determined quarterly, and are based on a formula
which takes into account gross royalty income from certain
music copyrights and licenses of Mills, less royalties paid
and amounts deducted by Mills in accordance with contract
terms.
Payments from Mills to the Trust are made in March,
June, September, and December, and include net royalty income
of the preceding calendar quarter. The payments received are
accounted for on a cash basis, as are expenses paid. The
Declaration of Trust requires the distribution of all funds
received by the Trust to the Unit holders after payment of
expenses.
The statements of cash receipts and disbursements
reflect only cash transactions and do not present transactions
that would be included in financial statements presented on
the accrual basis of accounting, as contemplated by generally
accepted accounting principles.
There is no book value per unit because cumulative
distributions are in excess of the initial investment in the
Trust.
NOTE 2. RELATED PARTY TRANSACTIONS
The Declaration of Trust provides that each trustee
shall receive reimbursement for expenses reasonably incurred
in the performance of his duties and annual compensation of
$2,500 per year for his services as trustee, provided that
such aggregate compensation to the trustees as a group may not
exceed 3% of the monies received by the Trust in any year. The
Declaration of Trust further provides for reimbursement to the
corporate trustee for its clerical and administrative services
to the Trust. Accordingly, Marine Midland Bank receives
reimbursement for such services and for services performed as
Registrar and Transfer Agent. The Declaration of Trust further
provides that if any trustee performs unusual or extraordinary
services, reasonable compensation for such services shall be
paid, subject to certain
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MILLS MUSIC TRUST
NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(CONTINUED)
(UNAUDITED)
limitations and to prior confirmation by a majority in
interest of Trust Certificate holders. Pursuant to these
provisions, disbursements to related parties were made as
follows for the three months ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C> <C>
Trustee Fees:
Bernard D. Fischman $625 $625
Marine Midland Bank 625 625
</TABLE>
NOTE 3. ROYALTY EXAMINATION
The Trust's claim against Belwin Mills Publishing
Corporation, the former administrators of the Old Mills
Catalogue, in connection with a royalty examination is
pending. It cannot be determined at this time, what, if any,
amount may ultimately be received by the Trust.
Legal and accounting fees paid from inception (1987)
through March 31, 1998 by the Trust in connection with this
examination aggregate $75,438.
No examinations of royalty information have been
performed subsequent to February, 1987.
NOTE 4. FEDERAL INCOME TAXES
No provision for income taxes has been made since the
liability is that of the unit holders and not the Trust.
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Page 5
PART I - FINANCIAL STATEMENTS
Item 2. Management's Discussion and Analysis of Results of Operations
The Trust's receipts from Mills Music, Inc. are
derived from copyrights established prior to 1964 and such
receipts fluctuate based upon public interest in the
"nostalgia" appeal of older songs.
PART II - OTHER INFORMATION
Items 1 through 6, inclusive, are not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MILLS MUSIC TRUST
(Registrant)
Date April 22, 1998 By: BERNARD D. FISCHMAN
---------------------- -----------------------
Bernard D. Fischman, Trustee
Date April 22, 1998 By: MARCIA MARKOWSKI
----------------------- ---------------------
Marine Midland Bank
Corporate Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 0
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0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 199882
<TOTAL-REVENUES> 199882
<CGS> 12270
<TOTAL-COSTS> 12270
<OTHER-EXPENSES> 187620
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8)
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