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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 SEPTEMBER 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
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NUMBER OF TRUST UNITS OUTSTANDING AS OF SEPTEMBER 5, 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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
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2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Receipts:
Mills Music, Inc. $ 335,399 $ 225,547 $ 884,885 $ 759,444
Undistributed cash at
beginning of the period 31 26 31 39
Disbursements-
administrative expenses
(11,273) (11,609) (47,603) (35,640)
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Balance available for
distribution
324,157 213,964 837,313 723,843
Cash distribution to unit
holders
324,118 213,939 837 ,274 723,818
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Undistributed cash at end
of the period
$ 39 $ 25 $ 39 $ 25
========= ========= ========= =========
Cash distribution per unit
(based on 277,712 units
outstanding)
$ 1.17 $ .77 $ 3.01 $ 2.61
========= ========= ========= =========
</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 NINE MONTHS ENDED SEPTEMBER 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 NINE MONTHS ENDED SEPTEMBER 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 nine months ended
September 30, 2000 and 1999.
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Trustee Fees:
Bernard D. Fischman $1,875 $1,875
HSBC Bank USA 1,875 1,875
HSBC Bank USA
Transfer agent and registrar $5,367 $5,687
</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
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quarter of 2000. Even though it was required to do so, EMI did not utilize the
revised 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 October , 2000 By: BERNARD D. FISCHMAN
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Bernard D. Fischman, Trustee
Date October , 2000 By: MARCIA MARKOWSKI
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HSBC Bank USA
Corporate Trustee
