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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    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 333-150612
 
 MOODY NATIONAL REIT I, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 
 Maryland
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    26-1812865
(I.R.S. Employer
Identification No.)6363 Woodway Drive, Suite 110
Houston, Texas
(Address of Principal Executive Offices)
    
    77057
(Zip Code)
 (713) 977-7500
 (Registrants Telephone Number, Including Area Code)
 
 þ o
 o o
  Large Accelerated filer o
Accelerated filer o
Non-Accelerated filer þ(Do not check if a smaller reporting company)Smaller reporting company o
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MOODY NATIONAL REIT I, INC.
INDEX
 PagePART I FINANCIAL INFORMATION
    
    
    2Item 1.
    
    Financial Statements
    
    
    2Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
(unaudited)
    
    
    2Notes to Condensed Consolidated Balance Sheets (unaudited)
    
    
    3Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4T.
    
    Controls and Procedures
    
    
    22PART II OTHER INFORMATION
    
    
    23Item 1.
    
    Legal Proceedings
    
    
    23Item 1A.
    
    Risk Factors
    
    
    23Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3.
    
    Defaults Upon Senior Securities
    
    
    23Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    23Item 5.
    
    Other Information
    
    
    23Item 6.
    
    Exhibits
    
    
    24EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1EX-32.2
   
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PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS.
 
 MOODY NATIONAL REIT I, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 June 30, 2009
    
    
    December 31, 2008ASSETSCash
    
    $
    202,000
    
    
    $
    202,000Total Assets
    
    $
    202,000
    
    
    $
    202,000LIABILITIES AND EQUITYTotal Liabilities
    
    $
    
    
    
    $
    Special Partnership Units 100
Special Units of the Operating
Partnership
    
    
    1,000
    
    
    
    1,000Equity:Stockholders equity:Common stock, $0.01 par value per
share; 400,000,000 shares
authorized, 22,222 issued and
outstanding
    
    
    222
    
    
    
    222Preferred stock, $0.01 par value
per share; 50,000,000 shares
authorized, none issued and
outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    199,778
    
    
    
    199,778Retained earnings
    
    
    
    
    
    
    Total stockholders equity
    
    
    200,000
    
    
    
    200,000Noncontrolling interest-100 common
units of the Operating Partnership
    
    
    1,000
    
    
    
    1,000Total Equity
    
    
    201,000
    
    
    
    201,000TOTAL LIABILITIES AND EQUITY
    
    $
    202,000
    
    
    $
    202,000
  2




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Moody National REIT I, Inc.
 
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
 1. Organization
      3




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
  2. Summary of Significant Accounting Policies
 Consolidation
  Consolidation of
Variable Interest Entities  An Interpretation of ARB No. 51
  Determining Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, Consolidated Financial Statements Accounting for Investments in Real Estate Ventures
 Interim Financial Information
  4




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
 Organization and Offering Costs
    Income Taxes
  Accounting for Income Taxes
 Concentration of Credit Risk
  Valuation and Allocation of Real Property  Acquisition
 Business Combinations
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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
 Goodwill and Other Intangible Assets
       6




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
  Valuation and Allocation of Real Property  Ownership
     YearsBuildings and improvements
    
    
    27-45Exterior improvements
    
    
    10-20Equipment and fixtures
    
    
    5-10
 Investments in Real Estate Securities
 Accounting for Certain Investments in Debt and Equity Securities
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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
 Debt-Related Investments
  Investment Impairments
    Revenue Recognition
   8




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
 Valuation of Accounts and Rents Receivable
  Recent Accounting Pronouncements
 Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 Classification and Measurement of Redeemable
Securities
 Subsequent Events
 Amendments to FASB Interpretation No. 46(R).
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 3. Investments
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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
   4. Capitalization
   5. Distributions
 th
 6. Related Party Arrangements
     10




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
      7. Incentive Awards Plan
  8. Subordinated Participation Interest
  11




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Moody National REIT I, Inc.
 Notes to Condensed Consolidated Balance Sheets
As of June 30, 2009
 (unaudited)
  12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
  Forward-Looking Statements
   
    
    the fact that we have no operating history and, as of June 30, 2009, our assets total
$202,000;
    
    our ability to effectively deploy the proceeds raised in our initial public offering;
    
    changes in economic conditions generally and the real estate and debt markets
specifically;
    
    legislative or regulatory changes (including changes to the laws governing the taxation
of REITs);
    
    the availability of capital;
    
    interest rates; and
    
    changes to generally accepted accounting principles, or GAAP.
   13




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Overview
        14




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Market Outlook
   Liquidity and Capital Resources
  Results of Operations
   15




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Critical Accounting Policies
 General
  Income Taxes
  Accounting for Income Taxes
 Valuation and Allocation of Real Property  Acquisition
 Business Combinations Goodwill and Other
Intangible Assets
  16




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Valuation and Allocation of Real Property  Ownership
  17




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YearsBuildings and improvements
    
    
    27-45Exterior improvements
    
    
    10-20Equipment and fixtures
    
    
    5-10
 Investments in Real Estate Securities
 Accounting for Certain Investments in Debt and Equity Securities
 Principles of Consolidation
  Consolidation of Variable Interest Entities 
An Interpretation of ARB No. 51
 Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited
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Partnership or Similar Entity When the Limited Partners Have Certain Rights Consolidated Financial Statements Accounting for Investments in Real Estate Ventures
 Debt-Related Investments
  Investment Impairments
    Revenue Recognition
   19




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Valuation of Accounts and Rents Receivable
  Recent Accounting Pronouncements
 Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51 Classification and Measurement of Redeemable Securities
 Subsequent Events
 Amendments to FASB Interpretation No. 46(R).
 The FASB Accounting Standards Codification and the
Hierarcy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 Inflation
  REIT Compliance
  20




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Distributions
   Funds from Operations
  Off-Balance Sheet Arrangements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  21




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ITEM 4T. CONTROLS AND PROCEDURES.
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PART IIOTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 1A. RISK FACTORS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
    
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 ITEM 5. OTHER INFORMATION.
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Consolidated Balance Sheets
    
    December 31, 2008Equity, as previously reported
    
    $
    200,000Increase for SFAS No. 160 reclassification of minority
interest to equity as non-controlling interest
    
    $
    1,000Equity, as adjusted
    
    $
    201,000
 
 ITEM 6. EXHIBITS.
 3.1
    
    Articles of Amendment and Restatement of Moody National REIT I, Inc. (filed as Exhibit 3.1 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).3.2
    
    Bylaws of Moody National REIT I, Inc. (filed as Exhibit 3.2 to the Companys Registration
Statement on Form S-11 (No. 333-150612) and incorporated herein by reference).3.3
    
    Amendment No. 1 to Bylaws of Moody National REIT I, Inc. (filed as Exhibit 3.3 to Pre-Effective
Amendment No. 4 to the Companys Registration Statement on Form S-11 (No. 333-150612) and
incorporated herein by reference).4.1
    
    Form of Subscription Agreement (included as Appendix B to prospectus, incorporated by reference
to Exhibit 4.1 to Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form
S-11 (No. 333-150612)).4.2
    
    Moody National REIT I, Inc. Distribution Reinvestment Plan (included as Appendix C to prospectus,
incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 5 to the Companys
Registration Statement on Form S-11 (No. 333-150612)).10.1
    
    Amended and Restated Advisory Agreement among Moody National REIT I, Inc., Moody National
Operating Partnership I, L.P., Moody National Advisor I, LLC and Moody Realty Company, L.P.10.2
    
    Amended and Restated Independent Directors Compensation Plan.31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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SIGNATURES
  MOODY NATIONAL REIT I, INC.Date: August 14, 2009
    By:
    /s/ Brett C. MoodyBrett C. MoodyChairman of the Board,
Chief Executive Officer and President
(Principal Executive Officer)Date: August 14, 2009
    By:
    /s/ Robert W. EngelRobert W. EngelChief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)




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EXHIBIT INDEX
 3.1
    
    Articles of Amendment and Restatement of Moody National REIT I, Inc. (filed as Exhibit 3.1 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).3.2
    
    Bylaws of Moody National REIT I, Inc. (filed as Exhibit 3.2 to the Companys Registration
Statement on Form S-11 (No. 333-150612) and incorporated herein by reference).3.3
    
    Amendment No. 1 to Bylaws of Moody National REIT I, Inc. (filed as Exhibit 3.3 to Pre-Effective
Amendment No. 4 to the Companys Registration Statement on Form S-11 (No. 333-150612) and
incorporated herein by reference).4.1
    
    Form of Subscription Agreement (included as Appendix B to prospectus, incorporated by reference
to Exhibit 4.1 to Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form
S-11 (No. 333-150612)).4.2
    
    Moody National REIT I, Inc. Distribution Reinvestment Plan (included as Appendix C to prospectus,
incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 5 to the Companys
Registration Statement on Form S-11 (No. 333-150612)).10.1
    
    Advisory Agreement among Moody National REIT I, Inc., Moody National Operating Partnership I,
L.P., Moody National Advisor I, LLC and Moody Realty Company, L.P.10.2
    
    Amended and Restated Independent Directors Compensation Plan.31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002