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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, 2000 COMMISSION FILE NUMBER 2-22997
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MILLS MUSIC TRUST
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-6183792
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
C/O HSBC BANK USA, 140 BROADWAY, NEW YORK, NY 10015
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 658-6014
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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
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NUMBER OF TRUST UNITS OUTSTANDING AS OF MARCH 3, 2000 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, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
2000 1999
Receipts:
<S> <C> <C>
Mills Music, Inc. $351,767 $274,046
Undistributed cash
at beginning of
the period 31 39
Disbursements -
administrative
expenses (14,125) ( 7,336)
-------- --------
Balance available
for distribution 337,673 266,749
Cash distribution
to unit holders 337,642 266,714
-------- --------
Undistributed cash at
end of the period $ 31 $ 35
======== ========
Cash distribution per
unit (based on 277,712
units outstanding) $ 1.22 $ .96
======== ========
</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, 2000 AND 1999
(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, 2000 AND 1999
(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, 2000 and 1999.
2000 1999
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Trustee Fees:
Bernard D. Fischman $ 625 $ 625
HSBC Bank USA 625 625
HSBC Bank USA
Transfer agent and registrar $5,268 0
NOTE 3. FEDERAL INCOME TAXES
No provision for income taxes has been made since the
liability is that of the unit holders and not the Trust.
NOTE 4. ROYALTIES
a)The original (1964) sale agreement assumed by the Trust's
collecting/paying entity ("EMI") provides for a revised royalty
calculation when the remittance to the Trust is less than $167,500 for
the quarter. This occurred in the quarter ended December 31, 1999, for
which the remittance was $155,717. EMI did not calculate that quarter's
payment using the revised royalty calculation, and has been notified
about this matter. Additional monies due to the Trust, if any, under
the revised calculation would be capped at an amount that, when added
to the prior distribution, would not exceed $167,500. The timing of the
receipt of any additional monies due to the Trust is dependent upon
EMI's ability to provide the information required under the revised
royalty calculation.
b)In addition, EMI made a computational error in its
remittance for the fourth quarter of 1999, resulting in a $19,000
overpayment.
The net effect of (a) and (b) above will reduce the Trust's revenue in
a future quarter. The maximum revenue effect to the Trust ($19,000), if
no additional funds are due from EMI, is .07 per unit.
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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, there unto duly authorized.
MILLS MUSIC TRUST
-----------------------------------
(Registrant)
Date May 2, 2000 By: BERNARD D. FISCHMAN
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Bernard D. Fischman, Trustee
Date May 2, 2000 By: MARCIA MARKOWSKI
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HSBC Bank USA
Corporate Trustee
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<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> 351,767
<TOTAL-REVENUES> 351,767
<CGS> 14,125
<TOTAL-COSTS> 14,125
<OTHER-EXPENSES> 337,642
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
