10-Q 1 d86951e10-q.txt FORM 10-Q FOR QUARTER ENDED MARCH 31, 2001 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 10-Q ---------- (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001..................... 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 NO. 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) (972) 991-9090 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 [ ] 1 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE CONSOLIDATED BALANCE SHEETS

~~September~~March 3031, December 31, 2001 2000 ~~1999~~ ------------ ------------ (unaudited) ASSETS Properties held for sale: Land $ 3,427,563 $ 63,~~232~~427,~~801~~563 Buildings and improvements 1314,~~218~~432,~~275~~898 2014,~~490~~399,~~165~~997 ------------ ------------ 1617,~~645~~860,~~838~~461 2617,~~722~~827,~~966~~560 Less accumulated depreciation 7,~~333~~334,~~880~~946 117,~~446~~334,~~824~~946 ------------ ------------ Net properties held for sale 910,~~311~~525,~~958~~515 1510,~~276~~492,~~142~~614 Cash and cash equivalents 101,~~255~~922,~~784~~487 12,~~835~~174,~~163~~211 Accounts receivable, ~~net of allowance of $3~~258,~~677~~305 ~~and $6~~250,~~568,~~095 ~~in 2000 and 1999, respectively 256,600 635,472~~ Other assets, at cost, net of accumulated amortization of $~~494~~515,~~321~~385 and $~~636~~504,~~144~~409 in ~~2000~~2001 and ~~1999~~2000, respectively ~~324~~332,~~932~~049 ~~293~~347,~~169~~435 ------------ ------------ $ 2013,~~149~~038,~~274~~356 $ 1813,~~039~~264,~~946~~355 ============ ============ LIABILITIES AND PARTNERS' EQUITY Accounts payable $ 6672,~~519~~046 $ 3477,~~880~~186 Accrued property taxes ~~120~~40,~~025~~008 ~~213~~160,~~431~~033 Security deposits ~~111~~and other liabilities 315,~~343~~130 ~~165~~335,~~484~~608 ------------ ------------ Total liabilities ~~297~~427,~~887~~184 ~~413~~572,~~795~~827 ------------ ------------ Minority interest in joint venture 1,~~360~~346,~~857~~754 1,~~237~~362,~~802~~094 ------------ ------------ Partners' equity: General Partners: Capital contributions 1,000 1,000 Cumulative net earnings ~~744~~845,~~157~~419 ~~263~~826,~~173~~046 Cumulative cash distributions (~~466~~887,~~205~~949) (~~435~~862,~~962~~074) ------------ ------------ ~~278~~(41,~~952~~530) (~~171~~35,~~789~~028) ------------ ------------ Limited Partners (28,227 Interests): Capital contributions, net of offering costs 24,570,092 24,570,092 Cumulative net earnings 16,~~485~~656,~~582~~576 1316,~~352~~482,~~224~~217 Cumulative cash distributions (2229,~~844~~920,~~096~~720) (2129,~~362~~687,~~178~~847) ------------ ------------ 1811,~~211~~305,~~578~~948 1611,~~560~~364,~~138~~462 ------------ ------------ Total partners' equity 1811,~~490~~264,~~530~~418 1611,~~388~~329,~~349~~434 ------------ ------------ $ 2013,~~149~~038,~~274~~356 $ 1813,~~039~~264,~~946~~355 ============ ============

See accompanying notes to consolidated financial statements. 2 3 MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

Three Months Ended ~~Nine~~March ~~Months Ended September 30~~31, ~~September 30,~~ ------------------------- ~~--------------------------~~2001 2000 ~~1999 2000 1999~~ ---------- ---------- ~~---------- ----------~~ INCOME: Rental $ ~~694~~434,~~005~~342 $ ~~813~~730,~~389~~331 ~~$2,060,579 $2,470,748~~ Interest 5928,~~266~~263 2538,~~059~~525 ~~152,758 68,569~~ Gain on termination of lease -0- ~~-0-~~ 898,562 -0- ~~Gain on sale of property 1,807,693~~ -0- ~~1,807,693~~ -0- ----~~------~~ ---------- ~~---------- ---------- 2~~462,~~560,964~~605 ~~838~~1,~~448 4~~667,~~919,592~~418 ~~2,539,317~~ ---------- ---------- ~~---------- ----------~~ EXPENSES: Depreciation ~~1,066~~-0- ~~206~~130,~~621~~903 ~~133,036 620,736~~ Property operating ~~197~~122,~~090~~868 ~~212~~217,~~862~~731 ~~663,202 626,205~~ General and administrative 84110,~~136~~345 57110,~~778~~902 ~~266,918 235,812~~ Bad debts, net ~~26 918 12,540 733~~ -0-~~--------~~ ~~----------~~10,238 ---------- ---------- ~~282~~233,~~318~~213 ~~478~~469,~~179~~774 ~~1,075,696 1,483,486~~ ---------- ---------- ~~---------- ----------~~ Earnings before minority interest 2229,~~278,646~~392 ~~360,269 3,843,896~~ 1,~~055~~197,~~831~~644 Minority interest in joint venture's earnings ~~33,928~~ 35,~~945~~660 ~~229~~161,~~554~~373 ~~113,177~~ ---------- ---------- ~~---------- ----------~~ Net earnings $~~2,244,718~~ ~~$ 324~~193,~~324~~732 $31,~~614~~036,~~342~~271 ~~$ 942,654~~ ========== ========== ~~========== ==========~~ Basic earnings per limited partnership interest $ 636.4618 $ 1135.2698 ~~$ 111.01 $ 32.73~~ ========== ========== ~~========== ==========~~

See accompanying notes to consolidated financial statements. 3 4 MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)

General Limited Partners Partners Total ------------ ------------ ------------ ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~1999~~2000: Balance at December 31, ~~1998~~1999 $ (~~160~~171,~~476~~789) $ 1716,~~114~~560,~~473~~138 $ 16,~~953~~388,~~997~~349 Net earnings 1820,~~853~~725 ~~923~~1,~~801~~015,546 ~~942~~1,~~654~~036,271 Cash distributions (258,~~923~~641) (1423,~~270,215~~405) (1432,~~296,138~~046) ------------ ------------ ------------ Balance at ~~September~~March 3031, ~~1999~~2000 $ (~~167~~159,~~546~~705) $ 1617,~~768~~152,~~059~~279 $ 16,~~600~~992,~~513~~574 ============ ============ ============ ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2000~~2001: Balance at December 31, ~~1999~~2000 $ (~~171~~35,~~789~~028) $ 1611,~~560~~364,~~138~~462 $ 1611,~~388~~329,~~349~~434 Net earnings ~~480~~19,~~984~~373 3174,~~133,358~~359 3193,~~614,342~~732 Cash distributions (3025,~~243~~875) (1232,~~481,918~~873) (1258,~~512,161~~748) ------------ ------------ ------------ Balance at ~~September~~March 3031, ~~2000~~2001 $ ~~278~~(41,~~952~~530) $ 1811,~~211~~305,~~578~~948 $ 1811,~~490~~264,~~530~~418 ============ ============ ============

See accompanying notes to consolidated financial statements. 4 5 MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

~~Nine~~Three Months Ended ~~September~~March 3031, ----------------------------- 2001 2000 ~~1999~~ ------------ ----------- Cash flows from operating activities: Net earnings $ 3193,~~614,342~~732 $ ~~942~~1,~~654~~036,271 Adjustments to reconcile net earnings to net cash provided by operating activities: Bad debts, net 12-0- 10,~~540~~238 ~~733~~ Depreciation ~~133,036~~-0- ~~620~~130,~~736~~903 Amortization of other assets 4810,~~621~~976 5118,~~054~~684 Gain on ~~sale~~termination of ~~property~~lease ~~held for sale (1,807,693)~~ -0- ~~Gain on termination of lease~~ (898,562) ~~-0-~~ Proceeds from termination of lease -0- 2,206,834 ~~-0-~~ Minority interest in joint venture's earnings ~~229~~35,~~554~~660 ~~113~~161,~~177~~373 Change in assets and liabilities: Accounts receivable ~~168~~(8,~~376~~210) (17,~~857)~~287 Other assets ~~(156~~4,~~864)~~410 (9575,~~669~~694) Accounts payable 31(5,~~639~~140) 73,~~548~~822 Accrued property taxes, ~~and~~ security deposits and other liabilities (~~147~~140,~~547~~503) 5(93,~~653~~402) ------------ ----------- Net cash provided by operating activities 390,~~434,276~~925 12,~~628~~517,~~029~~754 ------------ ----------- Cash flows from investing activities: - Additions to properties held for sale (~~360~~32,~~528~~901) (6744,~~081~~908) ~~Net proceeds from sale of property 6,965,534~~ -0- ---------~~---~~ ----------- ~~Net cash provided by (used in) investment activities 6,605,006 (67,081) ------------ -----------~~ Cash flows from financing activities: Distributions to minority interest in joint venture (~~106~~51,~~500~~000) (~~165~~49,~~450~~500) Cash distributions (1258,~~512,161~~748) (1432,~~296,138~~046) ------------ ----------- Net cash used in financing activities (1309,~~618,661~~748) (1481,~~461,588~~546) ------------ ----------- Net (decrease) increase in cash and cash equivalents 8(251,~~420,621~~724) 991,~~360~~991,300 Cash and cash equivalents at beginning of period 12,~~835~~174,~~163~~211 1,~~808~~835,~~765~~163 ------------ ----------- Cash and cash equivalents at end of period $ 101,~~255~~922,~~784~~487 $ 13,~~908~~826,~~125~~463 ============ ===========

See accompanying notes to consolidated financial statements. 5 6 MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2001 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. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. On March 10, 2000, in a special meeting of the Limited Partners, the Limited Partners approved the proposed sale of the Partnership's properties, the subsequent dissolution and liquidation of the Partnership upon the sale of the Partnership's last property, and an amendment to the Partnership Agreement to permit the proposed asset sale, dissolution and liquidation on the terms set forth in a proxy statement mailed to the Limited Partners on or about January 14, 2000. As a result, the Partnership began marketing the properties for sale and continues to operate until such time as the properties are sold and the Partnership is dissolved and liquidated. Effective March 10, 2000, the Partnership's properties are reported as properties held for sale at the lower of carrying value or fair value less estimated cost to sell. Management of the Partnership expects no loss to result from the sale of its properties, and no adjustment was made to account for the reclassification to properties held for sale. 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, 2001 and December 31, 2000, $108,166 and $107,083, 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. Prior to March 10, 2000, depreciation was 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. No depreciation is provided on properties held for sale after March 10, 2000, the date on which the Partnership changed the classification of its properties to properties held for sale. 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. Basic earnings and cash distributions per limited partnership interest are based upon the Limited Partnership Interests outstanding at period-end and the net earnings and cash distributions allocated to the Limited Partners in accordance with the Partnership Agreement, as amended. 6 7 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. The following information relates to estimated fair values of the Partnership's financial instruments as of March 31, 2001 and December 31, 2000. For cash and cash equivalents, accounts receivable, accounts payable, accrued property taxes payable, and security deposits, the carrying amounts approximate fair value because of the short maturity of these instruments. 2. PARTNERSHIP AGREEMENT Pursuant to the terms of the Partnership Agreement, Cash Distributions from Operations ("Operating Distributions") are allocated and paid 7% to the Non-corporate General Partner, 3% to the Corporate General Partner and 90% to the Limited Partners. An amount equal to 5% of Operating Distributions out of the 7% allocated to the Non-corporate General Partner and the entire amount of Operating Distributions allocated to the Corporate General Partner is subordinated to the prior receipt by the Limited Partners of a non-cumulative 7% annual return from either Operating Distributions or Cash Distributions from Sales or Refinancings. Net profits or losses, excluding gain or loss from sales or refinancing, are allocated to the General Partners and Limited Partners in the same proportions as the Operating Distributions for the year. 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. (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. (c) Upon the sale of the last property owned by the Partnership, Cash Distributions from Sales or Refinancings shall be allocated and paid to the Partners in an amount equal to, and in proportion with, their existing capital account balances. Such distributions shall be made only after distribution of all Cash Distributions from Operations and only after all allocations of Partnership income, gain, loss, deduction and credit (including net gain from the sale or other disposition of the properties) have been closed to the Partners' respective capital accounts. 7 8 3. PROPERTIES HELD FOR SALE During the three month period ended March 31, 2001, the Partnership owned and operated Castle Oaks Village, a shopping center located in Castle Hills (San Antonio), Texas. Subsequent to the quarter ended March 31, 2001, on May 4, 2001, the Partnership sold Castle Oaks for a sales price of $3,150,000. After reductions for the collection of estimated straight line rent receivable and sales costs totaling approximately $170,000, the sale resulted in net sales proceeds of approximately $2,980,000, and a net gain of approximately $300,000. The Partnership also 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., 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. On April 6, 2001, the Tower Place Joint Venture entered into a non-binding letter of intent to sell Tower Place. A formal definitive purchase agreement must still be negotiated and executed, and a number of contingencies must be satisfied before the property is sold. There can be no assurance that the Tower Place Joint Venture will be able to successfully negotiate and enter into a definitive agreement, or that Tower Place will be sold at all or under the proposed terms in the letter of intent. The Partnership has adopted Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information", which established standards for the way that public business enterprises report information about operating segments in audited financial statements, as well as related disclosures about products and services, geographic areas, and major customers. The Partnership defines each of its shopping centers as operating segments; however, management has determined that all of its properties have similar economic characteristics and also meet the other criteria which permit the properties to be aggregated into one reportable segment. Management of the Partnership makes decisions about resource allocation and performance assessment based on the same financial information presented throughout these consolidated financial statements. 4. GAIN ON TERMINATION OF LEASE On February 14, 2000, the Partnership executed a lease termination agreement with General Cinema at Tower Place Festival Shopping Center. Pursuant to this agreement, General Cinema paid Tower Place Joint Venture a termination fee of $2,206,834 as consideration for the Joint Venture releasing the tenant from its future lease obligations, including $197,957 of straight line rent receivable. In conjunction with the termination, the Joint Venture retired the net book value of the theater and related assets of $1,110,315, which was demolished. The Partnership recorded a gain on termination of the lease of $898,562 during the year ended December 31, 2000. Pursuant to a lease with Bally Total Fitness Corporation dated February 14, 2000, a new Bally facility is being constructed on the site previously occupied by the theater. The addition of the Bally Total Fitness facility and approximately 6,500 square feet of additional retail space are anticipated to enhance the value of the shopping center, which is currently being marketed for sale. 5. 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, 2001 and for the three months ended March 31, 2001 and 2000 has been prepared by management without audit 8 9 by independent public accountants. The Partnership's 2000 annual report contains audited consolidated financial statements including the notes to the consolidated financial statements and should be read in conjunction with the financial information contained in this interim report. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Liquidity and Capital Resources On March 10, 2000, in a special meeting of the Limited Partners, the Limited Partners approved the proposed sale of the Partnership's properties, the subsequent dissolution and liquidation of the Partnership upon the sale of the Partnership's last property, and an amendment to the Partnership Agreement to permit the proposed asset sale, dissolution and liquidation on the terms set forth in a proxy statement mailed to the Limited Partners on or about January 14, 2000. As a result, the Partnership began marketing the properties for sale and continues to operate until such time as the properties are sold and the Partnership is dissolved and liquidated. Subsequent to the quarter ended March 31, 2001, on May 4, 2001 the Partnership sold Castle Oaks for a sales price of $3,150,000. After reductions for the collection of estimated straight line rent receivable and sales costs totaling approximately $170,000, the sale resulted in net sales proceeds to the Partnership of approximately $2,980,000. On April 6, 2001, the Tower Place Joint Venture entered into a non-binding letter of intent to sell Tower Place. A formal definitive purchase agreement must still be negotiated and executed, and a number of contingencies must be satisfied before the property is sold. There can be no assurance that the Tower Place Joint Venture will be able to successfully negotiate and enter into a definitive agreement, or that Tower Place will be sold at all or under the proposed terms in the letter of intent. If the Partnership is successful in selling the remaining properties, the Partnership will be liquidated and dissolved. Effective March 10, 2000, the Partnership's properties are reported as properties held for sale at the lower of carrying value or fair value less estimated cost to sell. Management of the Partnership expects no loss to result from the sale of its properties, and no adjustment was made to account for the reclassification to properties held for sale. As of March 31, 2001, the Partnership had cash and cash equivalents of $1,922,487. Such amounts represent cash generated from operations, sales of properties held for sale 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, 2001 and December 31, 2000, there were $108,166 and $107,083, respectively, of accounts receivable related to such accruals. Accounts receivable also consist of tenant receivables, receivables for rent collected (but not yet remitted to the Partnership by the property management companies), and interest receivable on short-term investments. The increase in accounts receivable of $8,210 from December 31, 2000 to March 31, 2001 is primarily due to an increase in receivables for rent collected (but not yet remitted to the Partnership by the property management companies) partially offset by a reduction in tenant receivables. As of March 31, 2001 and December 31, 2000, the Partnership had no allowances for uncollectible accounts receivable. The decrease of $120,025 in accrued property taxes from December 31, 2000 to March 31, 2001 is primarily due to the payment of 2000 property taxes for the Partnership's properties. The decrease in security deposits and other liabilities of $20,478 was due primarily to severance benefits paid to one Partnership employee whose employment was terminated on February 28, 2001. 9 10 During the three months ended March 31, 2001, the Partnership made Cash Distributions from Operations totaling $258,748 related to the three month period ended December 31, 2000. Subsequent to March 31, 2001, the Partnership made a Cash Distribution from Operations of $258,748 (which was reduced by $73,105 related to 2000 North Carolina state income taxes paid on behalf of the partners in connection with the operation of Tower Place Joint Venture) related to the three months ended March 31, 2001. 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 remaining 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 remaining properties. Results of Operations Excluding the rental income recognized during the three months ended March 31, 2001 and March 31, 2000 from Mountain View Plaza, which was sold on September 26, 2000, rental income decreased $16,463 (4%) for the three months ended March 31, 2001 as compared to the same period in 2000. 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 remaining properties.

Three Months Ended ~~Nine~~March ~~Months Ended September 30~~31, ~~September 30,~~ ---------------------- ~~-------------------------~~2001 2000 ~~1999 2000 1999~~ -------- -------- ~~-------- ----------- Mountain View Plaza Shopping Center Rental income $313,764 $258,878 $856,323 $ 737,277 Bad debt expense (recovery) -0- -0- -0- (185) Average occupancy 100% 97% 100% 97%~~ Castle Oaks Village Shopping Center Rental income $~~105~~104,~~277~~144 $~~106~~104,~~261~~317 ~~$315,254 $ 358,849~~ Bad debt expense (recovery) -0- -0- ~~2,276 -0-~~ Average occupancy 8482% 8782% ~~83% 91%~~ Tower Place Festival Shopping Center Rental income $~~274~~326,~~964~~697 $~~448~~342,~~250~~987 ~~$889,002 $ 1,374,622~~ Gain on termination of lease -0- 0- 898,562 ~~-0-~~ Bad debt expense (recovery) 26-0- ~~918~~ 10,~~264~~238 ~~918~~ Average occupancy 7794% 9878% ~~77% 98%~~

Rental income at Castle Oaks Village in Castle Hills (San Antonio), Texas decreased $173 for the three months ended March 31, 2001 as compared to the same period in 2000, with lower rents being partially offset by higher tenant reimbursements for common area maintenance costs, real estate taxes and insurance costs. Occupancy at Castle Oaks averaged 82% during the quarter ended March 31, 2001, a 2 percent decrease over the previous quarter. In January 2001, a tenant who occupied 932 square feet vacated its space prior to the expiration of its lease. During the quarter plumbing repairs were completed at the property. Rental income at Tower Place Festival in Pineville (Charlotte), North Carolina decreased $16,290 for the three months ended March 31, 2001 as compared to the same period in 2000 primarily due to lower tenant reimbursements for real estate taxes. General Cinema, which occupied approximately 28% of the total leaseable space at Tower Place, terminated its lease on February 14, 2000, after payment of approximately $2,200,000 as consideration for the termination of its lease. The Partnership recorded a gain on termination of the lease of $898,562. Pursuant to a 10 11 lease with Bally Total Fitness Corporation signed on February 14, 2000, a new Bally Total Fitness facility is being constructed on the site previously occupied by the theater. Bally began paying rent in April 2001 and opened for business on April 27, 2001. In addition to the Bally Total Fitness facility, approximately 6,500 square feet of new retail space is being constructed on the site previously occupied by the theater. Occupancy at Tower Place averaged 94% during the quarter ended March 31, 2001, a 14 percent increase from the previous quarter. One new tenant who signed a lease for 9,600 square feet took occupancy of its space during the fourth quarter of 2000. A tenant who signed a lease for 1,050 square feet took occupancy in January 2001 and a tenant who signed a lease for 1,120 square feet took occupancy in February 2001. Bally Total Fitness, who occupies 25,767 square feet, opened for business on April 27, 2001. The addition of a new anchor tenant should generate greater customer traffic at the shopping center. Prior to March 10, 2000, depreciation was 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. No depreciation is provided on properties held for sale after March 10, 2000, the date on which the Partnership changed the classification of its properties to properties held for sale. 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. Property operating expenses, excluding the expenses incurred during the three months ended March 31, 2001 and March 31, 2000 from Mountain View Plaza, which was sold on September 26, 2000, decreased $7,980 (6%) for the period ended March 31, 2001 as compared to the same period in 2000 due to lower operating costs at Castle Oaks and Tower Place. Castle Oaks' total operating expenses decreased $7,019 (17%) primarily due to lower repair and maintenance costs, pest control, landscaping costs and legal fees. Tower Place's total operating expenses decreased $961 (1%), with decreases in property management fees, legal fees and utility costs partially offset by higher repair and maintenance costs. 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 were flat for the quarter ended March 31, 2001 as compared to the same period in 2000, with increases in accounting and legal fees and investor services costs being offset by lower travel costs and other administrative costs. Words or phrases when used in the Form 10-Q or other filings with the Securities and Exchange Commission, such as "does not believe" and "believes" or similar expressions, are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Partnership's financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued property taxes payable, and security deposits. The carrying amount of these instruments approximate fair value due to the short-term nature of these instruments. Therefore, the Partnership believes it is relatively unaffected by interest rate changes or other market risks. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the first quarter of the year covered by this report through the solicitation of proxies or otherwise. 11 12 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 2a Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on January 13, 2000. (File No. 0-14105) 2b Definitive Soliciting Additional Materials to Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on February 9, 2000. (File No. 0-14105) 2c Definitive Soliciting Additional Materials to Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on February 23, 2000. (File No. 0-14105) 3a Agreement of Limited Partnership of Murray Income Properties Ltd.-84. Reference is made to Exhibit A of the Prospectus dated May 31, 1984 contained in Amendment No. 2 to Partnership's Form S-11 Registration Statement. (File No. 2-90016) 3b Amended and Restated Certificate and Agreement of Limited Partnership dated as of May 23, 1984. Reference is made to Exhibit 3b to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 3c Amended and Restated Certificate and Agreement of Limited Partnership dated as of June 25, 1984. Reference is made to Exhibit 3c to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 3d Amended and Restated Certificate and Agreement of Limited Partnership dated as of November 27, 1984. Reference is made to Exhibit 3d to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 3e Amended and Restated Certificate and Agreement of Limited Partnership dated as of April 1, 1985. Reference is made to Exhibit 3e to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 3f Amended and Restated Certificate and Agreement of Limited Partnership dated as of November 15, 1989. Reference is made to Exhibit 3f to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 12 13 3g Amended and Restated Certificate and Agreement of Limited Partnership dated as of January 10, 1990. Reference is made to Exhibit 3g to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1990. (File No. 0-14105) 3h Amendment to Amended and Restated Certificate and Agreement of Limited Partnership, dated March 22, 2000. Reference is made to Exhibit 3h to the 1999 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2000. (File No. 0-14105) 99a Glossary, as contained in the Prospectus dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith. 99b Article XIII of the Agreement of Limited Partnership as contained in the Prospectus dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith. 99c Amendment number nine to the Agreement of Limited Partnership contained in the Proxy Statement dated October 11, 1989. Filed herewith. 99d Management Compensation as contained in the Prospectus (Pages 10 through 17) dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith. (b) Reports on Form 8-K filed during the quarter ended March 31, 2001: None 13 14 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, 2001 By: /s/ Mitchell Armstrong ---------------------------------------- Mitchell Armstrong President and Chief Financial Officer 14 15 INDEX TO EXHIBITS

~~Exhibit~~EXHIBIT ~~Number~~NUMBER ~~Description~~DESCRIPTION ------- ----------- 2a Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on January 13, 2000. (File No. 0-14105) 2b Definitive Soliciting Additional Materials to Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on February 9, 2000. (File No. 0-14105) 2c Definitive Soliciting Additional Materials to Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934. Reference is made to the Partnership's Schedule 14A, filed with the Securities and Exchange Commission on February 23, 2000. (File No. 0-14105) 3a Agreement of Limited Partnership of Murray Income Properties, Ltd.-84. Reference is made to Exhibit A of the Prospectus dated May 31, 1984 contained in Amendment No. 2 to Partnership's Form S-11 Registration Statement. (File No. 2-90016) 3b Amended and Restated Certificate and Agreement of Limited Partnership dated as of May 23, 1984. Reference is made to Exhibit 3b to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105) 3c Amended and Restated Certificate and Agreement of Limited Partnership dated as of June 25, 1984. Reference is made to Exhibit 3c to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105) 3d Amended and Restated Certificate and Agreement of Limited Partnership dated as of November 27, 1984. Reference is made to Exhibit 3d to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105) 3e Amended and Restated Certificate and Agreement of Limited Partnership dated as of April 1, 1985. Reference is made to Exhibit 3e to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105) 3f Amended and Restated Certificate and Agreement of Limited Partnership dated as of November 15, 1989. Reference is made to Exhibit 3f to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105) 3g Amended and Restated Certificate and Agreement of Limited Partnership dated as of January 10, 1990. Reference is made to Exhibit 3g to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, ~~1989~~1990. (File No. 0-14105)

15 16 3h Amendment to Amended and Restated Certificate and Agreement of Limited Partnership, dated March 22, 2000. Reference is made to Exhibit 3h to the 1999 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2000. (File No. 0-14105) 99a Glossary, as contained in the Prospectus dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith. 99b Article XIII of the Agreement of Limited Partnership as contained in the Prospectus dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith. 99c Amendment number nine to the Agreement of Limited Partnership contained in the Proxy Statement dated October 11, 1989. Filed herewith. 99d Management Compensation as contained in the Prospectus (Pages 10 through 17) dated May 31, 1984 filed as part of Amendment No. 2 to Registrant's Form S-11 Registration Statement. (File No. 2-90016) Filed herewith.

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