<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 SEPTEMBER 30, 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
<PAGE> 2
PART I - FINANCIAL STATEMENTS
Item 1. Financial Information
MILLS MUSIC TRUST
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
--------- --------- --------- ---------
Receipts:
<S> <C> <C> <C> <C>
Mills Music, Inc. $ 278,631 $ 326,735 $ 751,562 $ 813,904
Undistributed cash
at beginning of
the period 11 13 8 20
Disbursements -
administrative expenses (3,433) (6,273) (23,304) (31,337)
--------- --------- --------- ---------
Balance available
for distribution 275,209 320,475 728,266 782,587
Cash distribution
to unit holders 275,185 319,786 728,242 781,898
--------- --------- --------- ---------
Undistributed cash at
end of the period $ 24 $ 689 $ 24 $ 689
========= ========= ========= =========
Cash distribution per
unit (based on 277,712
units outstanding) $ .99 $ 1.15 $ 2.62 $ 2.82
========= ========= ========= =========
</TABLE>
See accompanying Notes to Statements of Cash Receipts and Disbursements.
<PAGE> 3
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MILLS MUSIC TRUST
NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 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
<PAGE> 4
Page 4
MILLS MUSIC TRUST
NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 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
nine months ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
1998 1997
------ ------
Trustee Fees:
<S> <C> <C>
Bernard D. Fischman $1,875 $1,875
Marine Midland Bank 1,875 1,250
Marine Midland Bank - Transfer
Agent and Registrar 0 5,932
</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 1987 royalty examination is
pending final resolution by the Trust. It cannot be determined at
this time, what, if any, amount may ultimately be received by the
Trust.
No examination of royalty information has 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.
<PAGE> 5
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.
<PAGE> 6
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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 October 12, 1998 By: BERNARD D. FISCHMAN
Bernard D. Fischman,Trustee
Date October 12, 1998 By: MARCIA MARKOWSKI
Marine Midland Bank
Corporate Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 751,562
<TOTAL-REVENUES> 751,562
<CGS> 23,304
<TOTAL-COSTS> 23,304
<OTHER-EXPENSES> 728,242
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16
<INCOME-TAX> 0
<INCOME-CONTINUING> 16
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
