UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1997 OR ___ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________to__________ Commission File Number 0-15763 ML DELPHI PREMIER PARTNERS, L.P. (Exact name of registrant as specified in its charter) Delaware 13-3350265 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 666 Third Avenue, New York, New York 10017 (Address of principal executive offices) (Zip Code) (212) 983-9040 (Registrant's telephone number, including area code) 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____ ML DELPHI PREMIER PARTNERS, L.P. (A Delaware Limited Partnership) BALANCE SHEETS (000's Omitted) Unaudited March December 31, 31, 1997 1996 ASSETS Cash $ $ 255 187 Short-Term Investments 1,075 39,262 Receivable from Tri-Star-ML Delphi Premier Productions, net 400 2,179 Receivable from Columbia Pictures (Distributor) 118 103 Interests in Motion Pictures Released, net of accumulated amortization of $11,529 and $11,527, respectively 0 2 Motion Picture Costs Recoverable from Special Recoupment Payments 0 1,516 Total Assets $ $ 1,848 43,249 LIABILITIES AND PARTNERS' CAPITAL Liabilities: Accrued Expenses and Accounts $ $ Payable 18 30 Distribution Payable 0 38,163 Total Liabilities 18 38,193 Partners' Capital (Note 2): General Partner (140) 123 Limited Partners 1,970 4,933 Total Partners' Capital 1,830 5,056 Total Liabilities $ $ and Partners' Capital 1,848 43,249 See accompanying notes to the financial statements. ML DELPHI PREMIER PARTNERS, L.P. (A Delaware Limited Partnership) STATEMENTS OF OPERATIONS (000's Omitted, except net profit per unit) Unaudited For the Three Months Ended March 31, 1997 1996 Net Revenue from Motion Pictures Released $ $ 15 3 Special Recoupment Payment Accrual 0 53 Interest Income 115 9 130 65 Expenses: Management Fee 0 142 Amortization of Interests in Motion Pictures 2 0 Released Operating Expenses 78 9 80 151 Profit (Loss)before Share of Profit in Motion Picture 50 (86) Venture Share of Profit in Motion Picture Venture--Tri- Star- ML-Delphi Premier Productions 50 464 Net Profit $ $ 100 378 Net Profit Per Unit of Limited Partnership Interest (12,610 units) $ $ 0 30 See accompanying notes to the financial statements. ML DELPHI PREMIER PARTNERS, L.P. (A Delaware Limited Partnership) STATEMENTS OF CASH FLOWS (000's Omitted) Unaudited For the Three Months Ended March 31, 1997 1996 Cash Flow From Operating Activities: Net Profit $ $ 100 378 Adjustments to reconcile Net Profit to net cash provided (used) by operating activities: Share of Profit in Motion Picture (50) (464) Venture Distributions from Joint Venture 50 484 Changes in Assets and Liabilities: Increase in Prepaid Expense 0 (427) Decrease (Increase) in Motion Picture Costs Recoverable from Special Recoupment Payments 1,516 (53) (Increase) Decrease in Receivable from Columbia Pictures (15) 1 (Distributor) Decrease (Increase) in Receivable from Tri-Star-ML Delphi 1,779 (425) Premier Productions, net Decrease in Accrued Expenses and Accounts Payable (12) (22) Net Cash Provided (Used) by Operating Activities 3,368 (528) Cash Flow From Investing Activities: Purchases of Short-Term Investments (7,551) (108) Redemptions of Short-Term Investments 45,738 0 Net Cash Provided (Used) by Investing Activities 38,187 (108) Cash Flow from Financing Activities: Distributions to Partners (41,487) 0 Net Cash Used by Financing Activities (41,487) 0 Increase (Decrease) In Cash 68 (636) Cash at beginning of period 187 714 Cash at end of period $ $ 255 78 See accompanying notes to the financial statements. ML DELPHI PREMIER PARTNERS, L.P. (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS Unaudited 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. There has been no material change in the information disclosed in the notes to financial statements of the Partnership included in the Annual Report on Form 10-K for the year ended December 31, 1996. The information furnished includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Partnership as of March 31, 1997 and the results of operations and cash flows for the periods ended March 31, 1997 and 1996. Results of operations for the three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the entire fiscal year. 2. Current Operations As of March 31, 1997, the Partnership had an interest in twenty SF Interest films, three of which are owned directly and distributed through Columbia Pictures ("Columbia") and seventeen of which are owned through a Joint Venture with TriStar Pictures, Inc. ("TriStar"). In addition, as of March 31, 1997, the Partnership has an interest in three Extra Films through the Tri-Star Joint Venture. All films in which the Partnership has an interest, as of March 31, 1997, have completed their theatrical release and are being distributed in various ancillary markets. Based on the anticipated performance of one SF Interest film released through the Tri-Star Joint Venture, it is expected that the Distributor of the Tri-Star Joint Venture will be required to make a Special Recoupment Payment with respect to that film. Accordingly, distribution fees earned and expected to be earned by the Distributor as of March 31, 1997 of approximately $448,000 have been accrued by the Partnership as a receivable from the Tri-Star Joint Venture. For the purpose of computing the net profit per unit, the net profit for the period is computed in accordance with the Partnership Agreement. 3. Additional Information Additional information, including the audited year end 1996 Financial Statements and the Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1996 on file with the Securities and Exchange Commission. Management's Discussion and Analysis of Financial Condition and Results of Operations a. Financial Condition The Partnership has fully satisfied its commitment to contribute funds to the Tri-Star Joint Venture and to Columbia for the production of, and acquisition of SF Interests in, films. As of March 31, 1997, the Partnership held cash of approximately $255,000 and short-term investments of approximately $1,075,000. The Partnership commenced cash distributions to its partners in December 1987. Distributions through March 31, 1997 to the limited partners have aggregated $6,100 per unit. Accordingly, the limited partners have received cash distributions in excess of their original investment in the Partnership. The Partnership has begun evaluating the value of its interest in the film assets for the purpose of possibly selling that interest and liquidating the Partnership. The General Partner anticipates that the Partnership may be liquidated in 1998. No assurance can be provided that the film assets will be sucessfully sold, or if sold, when such sale would occur. Upon the ultimate sale of the film assets, the Partnership will commence taking steps to dissolve and liquidate. Cash distributions as a result of the liquidation may be made to the partners to the extent, and only to the extent, the proceeds from a sale of the Partnerships' interest in the film assets in connection with the liquidation are in excess of the Distributors' entitlement to the recoupment of Special Recoupment Payments and a reserve for the Partnership's remaining obligations and operating expenses. Since the Partnership's obligations to make contributions to the Tri-Star Joint Venture for the production of, and acquisition of interests in, films have been satisfied, all revenue received by the Partnership (for other than Unrecouped Films) is used to pay operating expenses of the Partnership and to make cash distributions to partners. The Partnership does not anticipate significant future revenues and accordingly, the Partnership does not currently anticipate making cash distributions to partners on a quarterly basis. However, the Partnership may make future distributions if it realizes proceeds from its interest in films or from the sale of its interest in films (should the sale occur) net of a reserve for the Partnership's operating expenses. b. Results of Operations The Partnership's operating results are primarily dependent upon the operating results of the Tri-Star Joint Venture's films and films owned directly by the Partnership and are significantly impacted by the Tri-Star Joint Venture's and Columbia's policies. The performance of each film, where net proceeds determines the amount of revenue recognized, is based upon the amount expended for production and other costs associated with a film and the gross receipts generated by a film. The amount and timing of gross receipts generated by each film is dependent upon the degree of acceptance by the consumer public and the particular ancillary market in which the film is then being exhibited. Amounts contributed toward each film are compared periodically to the expected total revenue to be generated for that film, and write-downs may occur to the extent the amounts invested exceed the expected total revenue for that film. Additionally, the Tri-Star Joint Venture and the Partnership may record income with respect to Special Recoupment Payments, to the extent available, which may allow them to recover their respective investment in SF Interest films. For the three month period ended March 31, 1997, the Tri-Star Joint Venture had a net profit of which the Partnership's share was approximately $50,000, and the Partnership had an overall net profit of approximately $100,000. The Partnership's share of the Tri-Star Joint Venture's net profit was primarily due to revenue accrued with respect to certain films offset, in part, by the recapture of Special Recoupment Payments. The variance between the Partnership's share of the Tri-Star Joint Venture's net profit and the Partnership's net profit was primarily due to the amount by which the Partnership's interest income earned on Partnership funds and revenue recognized with respect to films owned directly exceeded the Partnership's expenses (including amortization of the Partnership's direct interest in motion pictures). For the three month period ended March 31, 1996, the Tri-Star Joint Venture had a net profit of which the Partnership's share was approximately $464,000, and the Partnership had an overall net profit of approximately $378,000. The Partnership's share of the Joint Venture's net profit was primarily due to interest income related to the accrual of Special Recoupment Payments and to revenue accrued with respect to certain films offset, in part, by interest expense related to Acceleration Payments. The variance between the Partnership's share of the Tri-Star Joint Venture's net profit and the Partnership's net profit was primarily due to the amount by which the Partnership's expenses exceeded the recognition of the Special Recoupment Payment for films owned directly, interest income earned on Partnership funds and revenue recognized with respect to films owned directly. The Partnership reports net revenue from motion picture exploitation for the three films in which it owns interests directly. The increase in net revenue for the three month period ended March 31, 1997 as compared with the corresponding period in 1996 is due primarily to an increase in the accrual of syndicated television revenues in 1997. The increase in interest income for the three month period ended March 31, 1997 as compared with the corresponding period in 1996 was due primarily to more funds being available for short-term investments as well as higher interest rates earned on short-term investments during 1997. The decrease in total expenses for the three month period ended March 31, 1997 (inclusive of amortization of the Partnership's direct interest in motion pictures) as compared with the corresponding period in 1996 was primarily attributable to the Management Fee incurred in 1996 but not in 1997 due to the expiration of the Management Fee arrangement at the end of 1996 offset, in part, by an increase in Operating Expenses. The increase in Operating Expenses is due primarily to the increase in the reimbursement to the General Partner in 1997 for out-of- pocket expenses incurred in connection with its management of the Partnership's business. TRI-STAR- ML DELPHI PREMIER PRODUCTIONS (A Joint Venture) BALANCE SHEETS (000's Omitted) Unaudited March December 31, 31, 1997 1996 ASSETS Motion Picture Production and Advertising Costs, net of accumulated amortization of $280,584 and $280,547, $ 333 $ respectively 370 Motion Picture Costs Recoverable from Special Recoupment Payments 7,149 31,640 Receivable from TriStar Pictures, Inc. (Distributor), net 1,931 1,962 Total $ 9,413 $ 33,972 Assets LIABILITIES AND VENTURERS' CAPITAL Liabilities: Payable to TriStar Pictures, $ 8,680 $ 31,423 Inc. Payable to ML Delphi Premier Partners, L.P., net 2,179 400 Total 9,080 33,602 Liabilities Venturers' Capital: TriStar Pictures, Inc. 333 370 ML Delphi Premier Partners, L.P. 0 0 Total Venturers' Capital 333 370 Total Liabilities and Venturers' $ $ 33,972 Capital 9,413 See accompanying notes to the financial statements. TRI-STAR-ML DELPHI PREMIER PRODUCTIONS (A Joint Venture) STATEMENTS OF OPERATIONS (000's Omitted) Unaudited For the Three Months Ended March 31, 1997 1996 Net Revenues From Motion Picture Exploitation $ $ 378 524 Less: Amortization of Motion Picture Production and Advertising Costs 37 90 Income from Operations 341 434 Special Recoupment Payment Recapture (63) 0 Interest Income, net 0 1,803 Net Income $ $ 278 2,237 See accompanying notes to the financial statements. TRI-STAR - ML DELPHI PREMIER PRODUCTIONS (A Joint Venture) STATEMENTS OF CASH FLOWS (000's Omitted) Unaudited For the Three Months Ended March 31, 1997 1996 Cash Flow From Operating Activities: Net Income $ $ 278 2,237 Adjustments to reconcile Net Income to net cash provided by operating activities: Amortization of Motion Picture Production and Advertising Costs 37 90 Accrued Distributions to 24,522 (2,073) Venturers Changes in Assets and Liabilities: (Decrease) Increase in Payable to ML Delphi Premier Partners, L.P., (1,779) 425 net (Decrease) Increase in Payable to TriStar Pictures Inc., net (22,743) 1,647 Decrease (Increase) in Receivable from Tri-Star Pictures, Inc. 31 (10) (Distributor), net Decrease (Increase) in Motion Picture Costs Recoverable from Special Recoupment Payments 24,491 (2,062) Net Cash Provided by Operating Activities 24,837 254 Cash Flow From Financing Activities: Distributions to Venturers (24,837) (254) Net Cash Used by Financing Activities (24,837) (254) Net Change in Cash 0 0 Cash at beginning of period 0 0 Cash at end of period $ $ 0 0 See accompanying notes to the financial statements. TRI-STAR - ML DELPHI PREMIER PRODUCTIONS (A Joint Venture) NOTES TO FINANCIAL STATEMENTS Unaudited 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. There has been no material change in the information disclosed in the notes to financial statements of Tri-Star-ML Delphi Premier Productions (the "Joint Venture") included in the Annual Report on Form 10-K of ML Delphi Premier Partners, L.P. (the "Partnership") for the year ended December 31, 1996. The information furnished includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Joint Venture as of March 31, 1997 and the results of its operations and cash flows for the periods ended March 31, 1997 and 1996. Results of operations for the period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the entire fiscal year. 2. Current Operations All seventeen SF Interest films in which the Joint Venture has an interest have completed their theatrical release and are being distributed in various ancillary markets. In addition, the Joint Venture has an interest in three Extra Films which have completed their theatrical release and are being distributed in various ancillary markets. For the three month period ended March 31, 1997, the Joint Venture is reporting net revenue of $378,000, due primarily to the performance of various SF Interest films in the worldwide free television market. For the three month period ended March 31, 1997, the Joint Venture recorded a decrease of $63,000 in the Special Recoupment Payment accrual due to a decrease in the estimated distribution fee to be earned by its Distributor. For the three month period ended March 31, 1996, the Joint Venture reported net revenue of $524,000, due primarily to the performance of various PF Interest films in the worldwide free television market and to the performance of various SF Interest films in the worldwide free television market and one SF Interest film in the pay television market. In addition, for the three month period ended March 31, 1996, the Joint Venture recorded net interest income of $1,803,000, due primarily to the decrease in the discount period relating to the Special Recoupment Payment net of interest expense related to the Acceleration Payments. 3. Additional Information Additional information, including the audited year end 1996 Financial Statements and the Summary of Significant Accounting Policies, is included in the Annual Report on Form 10-K of the Partnership for the year ended December 31, 1996. PART II Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3.Defaults Upon Senior Securities None Item 4.Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6.Exhibits and Reports on Form 8-K A). Exhibits EXHIBIT NUMBERDESCRIPTIONPAGE NUMBER 27 Financial Data Schedule B). Reports on Form 8-K None 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. ML DELPHI PREMIER PARTNERS, L.P. A Delaware Limited Partnership By: ML DELPHI PARTNERS, L.P., General Partner By: ML Film Entertainment Inc., general partner May 13, 1997 /s/ Roger F. Castoral, Jr. Date Roger F. Castoral, Jr. Vice President and Treasurer of the Managing Partner of the General Partner (principal financial officer and principal accounting officer of the Registrant) May 13, 1997 /s/ Steven N. Baumgarten Date Steven N. Baumgarten Director and Vice President of the general partner of the General Partner