<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 Commission File No.
MARCH 31, 1995 0-14105
------------
MURRAY INCOME PROPERTIES I, LTD.
(Exact Name of Registrant as Specified in its Charter)
Texas 75-1946214
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5550 LBJ Freeway, Suite 675, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (214) 991-9090
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
----- -----
<PAGE> 2
MURRAY INCOME PROPERTIES I, LTD.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ -----------
(unaudited)
<S> <C> <C>
ASSETS
Investment properties, at cost
Land $ 6,232,801 $ 6,232,801
Buildings and improvements 20,066,024 20,060,761
----------- -----------
26,298,825 26,293,562
Less accumulated depreciation 7,435,657 7,225,381
----------- -----------
Net investment properties 18,863,168 19,068,181
Cash and cash equivalents 1,202,413 1,255,015
Accounts and notes receivable,
net of allowance of $24,829 and
$21,466, in 1995 and 1994, respectively 692,363 655,081
Other assets, at cost, net of accumulated
amortization of $321,686 and $306,266
in 1995 and 1994, respectively 263,951 256,049
----------- -----------
$20,994,895 $21,234,326
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 22,611 $ 20,860
Accrued property taxes 96,933 184,447
Security deposits 174,445 153,563
----------- -----------
Total liabilities 293,989 358,870
----------- -----------
Minority interest in joint venture 1,590,064 1,602,538
----------- -----------
Partners' equity:
General Partners:
Capital contributions 1,000 1,000
Cumulative net earnings 164,606 160,647
Cumulative cash distributions (282,945) (275,744)
----------- -----------
(117,339) (114,097)
----------- -----------
Limited Partners (28,227 Interests):
Capital contributions, net of offering
costs 24,570,092 24,570,092
Cumulative net earnings 8,522,463 8,328,460
Cumulative cash distributions (13,864,374) (13,511,537)
----------- -----------
19,228,181 19,387,015
----------- -----------
Total partners' equity 19,110,842 19,272,918
----------- -----------
$20,994,895 $21,234,326
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 3
MURRAY INCOME PROPERTIES I, LTD.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Income:
Rental $ 698,988 $693,634
Interest 17,600 9,716
Termination fee income -0- 18,830
--------- --------
716,588 722,180
--------- --------
Expenses:
Depreciation 210,276 212,991
Property operating 183,691 186,168
General and administrative 91,750 94,127
Bad debts, net 3,383 674
--------- --------
489,100 493,960
--------- --------
Earnings before minority interest 227,488 228,220
Minority interest in joint venture's
earnings 29,526 30,622
--------- --------
Net earnings $ 197,962 $197,598
========= ========
Earnings per limited partnership interest $ 6.87 $ 6.86
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
MURRAY INCOME PROPERTIES I, LTD.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ---------- -------------
<S> <C> <C> <C>
Three months ended March 31, 1994:
Balance at December 31, 1993 $ (101,640) $19,997,421 $19,895,781
Net earnings 3,952 193,646 197,598
Cash distributions ( 7,201) (352,837) (360,038)
---------- ----------- -----------
Balance at March 31, 1994 $( 104,889) $19,838,230 $19,733,341
========== =========== ===========
Three months ended March 31, 1995:
Balance at December 31, 1994 $ (114,097) $19,387,015 $19,272,918
Net earnings 3,959 194,003 197,962
Cash distributions ( 7,201) (352,837) (360,038)
---------- ----------- -----------
Balance at March 31, 1995 $ (117,339) $19,228,181 $19,110,842
========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
MURRAY INCOME PROPERTIES I, LTD.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 197,962 $ 197,598
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Bad debts, net 3,383 674
Depreciation 210,276 212,991
Amortization of other assets 15,420 18,582
Minority interest in joint venture's earnings 29,526 30,622
Change in assets and liabilities:
Accounts and notes receivable ( 40,665) (107,490)
Other assets 3,678 (13,178)
Accounts payable 1,751 5,496
Accrued property taxes and security deposits ( 66,632) (79,045)
---------- ----------
Net cash provided by operating activities 354,699 266,250
---------- ----------
Cash flows from investing activities -
additions to investment properties ( 5,263) (82,329)
---------- ----------
Cash flows from financing activities:
Distributions to minority interest in
joint venture ( 42,000) ( 42,750)
Cash distributions (360,038) (360,038)
---------- ----------
Net cash used in financing activities (402,038) (402,788)
---------- ----------
Net decrease in cash and cash equivalents ( 52,602) (218,867)
Cash and cash equivalents at beginning of period 1,255,015 1,364,545
---------- ----------
Cash and cash equivalents at end of period $1,202,413 $1,145,678
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
MURRAY INCOME PROPERTIES I, LTD.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF ACCOUNTING
The consolidated financial statements include the accounts of the
Partnership and Tower Place Joint Venture (85% owned by the Partnership). All
significant intercompany balances and transactions have been eliminated in
consolidation.
Rental income is recognized as earned under the leases. Accordingly, the
Partnership accrues rental income for the full period of occupancy using the
straight line method over the related terms. At March 31, 1995 and December
31, 1994, $478,194 and $463,485, respectively, of accounts receivable related
to such accruals.
Other assets consist primarily of deferred leasing costs which are
amortized using the straight line method over the lives of the related leases.
Depreciation is provided over the estimated useful lives of the respective
assets using the straight line method. The estimated useful lives of the
buildings and improvements range from three to twenty-five years.
The Partnership periodically reevaluates the propriety of the carrying
amounts of investment properties to determine whether current events and
circumstances warrant an adjustment to such carrying amounts. Such evaluations
are performed utilizing annual appraisals performed by independent appraisers
as well as internally developed estimates of expected undiscounted future cash
flows. In the event the carrying value of an individual property exceeds
expected future undiscounted cash flows, the property is written down to the
most recently appraised value. Since inception of the Partnership, none of the
Partnership's properties have required write downs.
No provision for income taxes has been made as the liabilities for such
taxes are those of the individual Partners rather than the Partnership. The
Partnership files its tax return on the accrual basis used for Federal income
tax purposes.
Earnings per limited partnership interest are based upon the limited
partnership interests outstanding at period-end and the net earnings allocated
to the Limited Partners in accordance with the Partnership Agreement.
For purposes of reporting cash flows, the Partnership considers all
certificates of deposit and highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
2. PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or losses
of the Partnership and cash distributions are generally allocated 98% to the
Limited Partners and 2% to the General Partners. Cash distributions from the
sale or refinancing of a property are allocated as follows:
(a) First, all Cash Distributions from Sales or Refinancings shall be
allocated 99% to the Limited Partners and 1% to the Non-corporate General
Partner until the Limited Partners have been returned their original
invested Capital from Cash Distributions from Sales or Refinancings, plus
their Preferred Return from Cash Distributions from Operations or Cash
Distributions from Sales or Refinancings, or both.
6
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(b) Next, all Cash Distributions from Sales or Refinancings shall be
allocated 1% to the Non-corporate General Partner and 99% to the Limited
Partners and the General Partners. Such 99% will be allocated (i) first
to the Corporate General Partner in an amount equal to any unpaid Cash
Distributions from Operations subordinated to the Limited Partners' 7%
non-cumulative annual return and (ii) thereafter, 80% to the Limited
Partners and 20% to the General Partners.
Cash Distributions from Sales or Refinancings (other than the 1% of Cash
Distributions from Sales or Refinancings payable to the Non-corporate
General Partner) payable to the General Partners shall be allocated 62
1/2% to the Non-corporate General Partner and 37 1/2% to the Corporate
General Partner.
3. INVESTMENT PROPERTIES
The Partnership owns and operates Mountain View Plaza, a shopping center
located in Scottsdale, Arizona, and Castle Oaks Village, a shopping center
located in Castle Hills (San Antonio), Texas. In addition, the Partnership
owns an 85% interest in Tower Place Joint Venture, a joint venture which owns
Tower Place Festival Shopping Center located in Pineville (Charlotte), North
Carolina. The remaining 15% interest in the joint venture is owned by Murray
Income Properties II, Ltd. ("MIP II"), an affiliated real estate limited
partnership. The Tower Place Joint Venture Agreement provides that the
Partnership will share profits, losses, and cash distributions according to the
Partnership's 85% ownership interest in the joint venture.
4. OTHER
Information furnished in this interim report reflects all adjustments
consisting of normal recurring adjustments, which, in the opinion of
management, are necessary to reflect a fair presentation of the results for the
periods presented.
The financial information included in this interim report as of March 31,
1995 and for the three months ended March 31, 1995 and 1994 has been prepared
by management without audit by independent public accountants who do not
express an opinion thereon. The Partnership's annual report contains audited
consolidated financial statements. The notes to the consolidated financial
statements in the Partnership's 1994 annual report are an integral part of the
consolidated financial statements presented herein.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1995, the Partnership had cash and cash equivalents of
$1,202,413. Such amounts represent cash generated from operations and working
capital reserves.
Rental income from leases with escalating rental rates is accrued using
the straight line method over the related lease terms. At March 31, 1995 and
December 31, 1994, there were $478,194 and $463,485, respectively, of accounts
receivable related to such accruals. Accounts receivable also consist of
tenant receivables, receivables for rent collected (but not yet remitted by the
property management companies), and interest receivable on short-term
investments. The increase in accounts receivable of $40,655 from December 31,
1994 to March 31, 1995 is primarily due to an increase in receivables for rent
collected (but not yet remitted by the property management companies) at Tower
Place Festival Shopping Center and Castle Oaks Shopping Center, and receivables
related to the accruals described above at Tower Place Festival Shopping Center
and Mountain View Plaza Shopping Center. As of March 31, 1995 and December 31,
1994, the Partnership had allowances of $24,829 and $21,446, respectively, for
uncollectible accounts receivable.
The decrease of $87,514 in accrued property taxes from December 31, 1994 to
March 31, 1995 is primarily due to the payment of 1994 property taxes for the
Partnership's properties.
During the three months ended March 31, 1995, the Partnership made Cash
Distributions from Operations totaling $360,038 related to the three month
period ended December 31, 1994. Subsequent to March 31, 1995, the Partnership
made a Cash Distribution from Operations of $360,038 (which was reduced by
$17,586 related to 1994 North Carolina state income taxes paid on behalf of the
partners in connection with the operation of Tower Place Joint Venture)
relating to the three months ended March 31, 1995. The distributed funds were
derived from the net cash flow generated from operations of the Partnership's
properties and from interest earned, net of administrative expenses, on funds
invested in short-term money market instruments.
Future liquidity is currently expected to result from cash generated from
the operations of the Partnership's properties (which could be affected
negatively in the event of weakened occupancies, and/or rental rates), interest
earned on funds invested in short-term money market instruments and ultimately
through the sale of the Partnership's properties.
8
<PAGE> 9
RESULTS OF OPERATIONS
Rental income increased $5,354 for the three months ended March 31, 1995 as
compared to the same period in 1994. The following information details the
rental income generated, bad debt expense incurred, and average occupancy for
the periods shown for each of the Partnership's properties.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Mountain View Plaza Shopping Center
Rental income $ 209,412 $ 207,601
Bad debt expense $ 926 $ -0-
Average occupancy 98% 97%
Castle Oaks Village Shopping Center
Rental income $ 75,996 $ 91,332
Bad debt expense (recovery) $ 3,080 $ (3,670)
Average occupancy 77% 90%
Tower Place Festival Center
Rental income $ 413,580 $ 394,701
Bad debt expense (recovery) $( 623) $ 4,344
Average occupancy 95% 88%
</TABLE>
Rental income at Mountain View Plaza increased $1,811 for the three months
ended March 31, 1995 as compared to the same period in 1994 due to higher
occupancy, offset by decreased tenant reimbursements for insurance costs.
Occupancy at Mountain View Plaza in Scottsdale, Arizona averaged 98% during
the quarter ended March 31, 1995, a two percent increase over the previous
quarter. During November, 1994, two new tenants totalling 1,880 square feet
took occupancy of their spaces. In February, 1995, one tenant who occupies
1,127 square feet renewed its lease for five years. The shopping center will
be painted in July, and paint colors have been submitted for approval to the
City of Scottsdale and to the McCormick Ranch Homeowner's Association. As of
March 31, Mountain View Plaza was 98% occupied.
Rental income at Castle Oaks decreased $15,336 for the three months ended
March 31, 1995 as compared to the same period in 1994 primarily due to a
decrease in occupancy and lower tenant reimbursements for real estate taxes.
Occupancy at Castle Oaks Village in Castle Hills (San Antonio), Texas
averaged 77% for the quarter ended March 31, 1995, a seven percent decrease
from the previous quarter. In November, 1994, one tenant who occupied 2,100
square feet vacated its space upon expiration of its lease and in February,
1995, a tenant who occupied 2,060 square feet vacated its space upon its lease
expiration. The General Partners are currently negotiating with a prospective
tenant to lease 2,142 square feet; however, there can be no assurance that
these negotiations will result in a signed lease. As of March 31, Castle Oaks
Village was 73% occupied.
Rental income at Tower Place increased $18,879 for the three months ended
March 31, 1995 as compared to the same period in 1994 primarily due to an
increase in occupancy offset by lower tenant reimbursements for common area
maintenance costs and real estate taxes.
9
<PAGE> 10
Occupancy at Tower Place Festival in Pineville (Charlotte), North Carolina
averaged 95% during the quarter ended March 31, 1995, unchanged from the
previous quarter. In December, 1994, one tenant who occupied 1,260 square feet
vacated its space upon expiration of its lease. Also, in December a new tenant
took occupancy of 2,100 square feet. During the first quarter, three new
leases totalling 5,340 square feet were signed and these tenants will take
occupancy during the second quarter. Two existing tenants totalling 3,011
square feet renewed their leases for three years. Minor parking lot repairs
were completed in March. As of March 31, Tower Place was 94% occupied and 98%
leased.
Depreciation is provided over the estimated useful lives of the respective
assets using the straight line method. The estimated useful lives of the
buildings and improvements range from three to twenty-five years.
Property operating expenses consist primarily of real estate taxes,
property management fees, insurance costs, utility costs, repair and
maintenance costs, leasing and promotion costs, and amortization of deferred
leasing costs. The decrease in property operating expenses of $2,477 for the
quarter ended March 31, 1995 as compared to the previous quarter is primarily
due to lower repair and maintenance costs at Mountain View Plaza and Castle
Oaks. Mountain View Plaza's total operating expenses decreased, with decreases
in repair and maintenance costs being offset by higher real estate taxes and
utility costs. Castle Oaks' total operating expenses decreased primarily
because of decreases in repair and maintenance costs. Tower Places's total
operating expenses increased with increases in repair and maintenance costs,
property management fees and utility costs being offset by lower leasing and
promotion expenses and legal fees.
General and administrative expenses incurred are related to legal and
accounting expenses, rent, investor services costs, salaries and benefits and
various other costs required for the administration of the Partnership,
including reimbursements of shared direct operating costs to Murray Income
Properties II, Ltd. General and administrative expenses decreased $2,377 for
the quarter ended March 31, 1995 as compared to the same period in 1994
primarily because of lower amortization of organization costs.
Bad debt expenses increased $2,709 for the quarter ended March 31, 1995 as
compared to the same period in 1994 with increases at Mountain View Plaza and
Castle Oaks being offset by recoveries at Tower Place.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None
(b) Reports on Form 8-K filed during the quarter ended March 31, 1995:
None
11
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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.
MURRAY INCOME PROPERTIES I, LTD.
By: Murray Realty Investors VIII, Inc.
A General Partner
Date: May 10, 1995 By: /s/ Mitchell Armstrong
-----------------------------
Mitchell Armstrong
President
Chief Financial Officer
12
<PAGE> 13
EXHIBIT INDEX
Exhibit 27 -- Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) MURRAY
INCOME PROPERTIES I, LTD. AND CONSOLIDATED JOINT VENTURE BALANCE SHEET AND
STATEMENT OF EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B)
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,202,413
<SECURITIES> 0
<RECEIVABLES> 717,192
<ALLOWANCES> 24,829
<INVENTORY> 0
<CURRENT-ASSETS> 1,894,776
<PP&E> 26,298,825
<DEPRECIATION> 7,435,657
<TOTAL-ASSETS> 20,994,895
<CURRENT-LIABILITIES> 119,544
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 19,110,842
<TOTAL-LIABILITY-AND-EQUITY> 20,994,895
<SALES> 0
<TOTAL-REVENUES> 716,588
<CGS> 0
<TOTAL-COSTS> 393,967
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,383
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 197,962
<INCOME-TAX> 0
<INCOME-CONTINUING> 197,962
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,962
<EPS-PRIMARY> 6.87
<EPS-DILUTED> 6.87
</TABLE>
