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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FROM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2000 COMMISSION FILE NUMBER: 2-22997
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, 150 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
NUMBER OF TRUST UNITS OUTSTANDING AS OF JUNE 2, 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 AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
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(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Receipts:
Mills Music, Inc. $197,719 $259,851 $549,486 $533,897
Undistributed cash at
beginning of the period 31 35 31 39
Disbursements-
administrative expenses ( 22,205) ( 16,695) ( 36,330) ( 24,031)
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Balance available for
distribution 175,545 243,191 513,187 509,905
Cash distribution to unit
holders 175,514 243,165 513,156 509,879
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Undistributed cash at end of
the period $ 31 $ 26 $ 31 $ 26
=========== ========== ========== ==========
Cash distribution per unit
(based on 277,712 units
outstanding) $ .63 $ .88 $ 1.85 $ 1.84
=========== ========== ========== ==========
</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 AND SIX MONTHS ENDED JUNE 30, 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 disbursement 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, HSBC Bank USA
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 limitations and to prior confirmation by a
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MILLS MUSIC TRUST
NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
THREE MONTHS AND SIX MONTHS ENDED June 30, 2000 and 1999
(CONTINUED)
(UNAUDITED)
majority interest of Trust Certificate holders. Pursuant to these provisions,
disbursements to related parties were made as follows for the six months ended
June 30, 2000 and 1999.
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Trustee Fees:
Bernard D. Fischman $1,250 $ 1,250
HSBC Bank USA 1,250 1,250
HSBC Bank USA
Transfer agent and registrar $5,345 $ 0
</TABLE>
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. EMI deducted this amount from its
remittance for the second quarter of 2000. Even though it was required to do so,
EMI did not utilize the revised
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royalty calculation and, therefore, was not entitled to deduct this amount. The
trustees are contemplating what, if any, actions will be taken regarding this
deduction.
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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
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(Registrant)
Date August 2, 2000 By: BERNARD D. FISCHMAN
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Bernard D. Fischman, Trustee
Date August 2, 2000 By: MARCIA MARKOWSKI
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HSBC Bank USA
Corporate Trustee
