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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 March 31, 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
    
    26-1812865(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)6363 Woodway Drive, Suite 110Houston, Texas
    
    77057(Address of Principal Executive Offices)
    
    (Zip Code)
 (713) 977-7500
(Registrants Telephone Number, Including Area Code)
 
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
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MOODY NATIONAL REIT I, INC.
INDEX
 PagePART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    2Condensed Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008
    
    
    2Notes to Condensed Consolidated Balance Sheets
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4T. Controls and Procedures
    
    
    20PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22EX-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)
 March 31, 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 March 31, 2009
(unaudited)
 1. Organization
      3




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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 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
  Organization and Offering Costs
  4




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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 2009
(unaudited)
    Income Taxes
  Accounting for Income Taxes
 Concentration of Credit Risk
  Valuation and Allocation of Real Property  Acquisition
 Business Combinations Goodwill and Other
Intangible Assets
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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 2009
(unaudited)
        6




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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 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 March 31, 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 March 31, 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
 3. Capitalization
   4. Related Party Arrangements
     9




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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 2009
(unaudited)
       5. Incentive Awards Plan
  6. Subordinated Participation Interest
  10




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Moody National REIT I, Inc.
Notes to Condensed Consolidated Balance Sheets
 As of March 31, 2009
(unaudited)
  7. Subsequent Events
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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 March 31, 2009, our
assets total $202,000;
    
    the fact that, as of March 31, 2009, we have not identified any real estate
assets to acquire;
    
    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.
  12




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Overview
      Market Outlook
   13




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Liquidity and Capital Resources
  Results of Operations
   Critical Accounting Policies
 General
  14




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Income Taxes
  Accounting for Income Taxes
 Valuation and Allocation of Real Property  Acquisition
 Business Combinations Goodwill and Other
Intangible Assets
    15




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Valuation and Allocation of Real Property  Ownership
     YearsBuildings and improvements
    
    
    27-45Exterior improvements
    
    
    10-20Equipment and fixtures
    
    
    5-10
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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 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
  17




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Revenue Recognition
   Valuation of Accounts and Rents Receivable
  Recent Accounting Pronouncements
 Noncontrolling
Interests in Consolidated Financial Statementsan amendment of ARB No. 51
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Classification and Measurement of Redeemable
Securities
 Inflation
  REIT Compliance
  Distributions
  Funds from Operations
  19




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Off-Balance Sheet Arrangements
  Subsequent Events
 Status of Offering
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   
 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.
   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).
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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
    
    Escrow Agreement among Moody National REIT I, Inc., Moody Securities, LLC and UMB Bank, N.A.
(filed as Exhibit 10.1 to Pre-Effective Amendment No. 5 to the Companys Registration Statement
on Form S-11 (No. 333-150612) and incorporated herein by reference).10.2
    
    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. (filed as Exhibit 10.2 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.3
    
    Limited Partnership Agreement of Moody National Operating Partnership I, L.P. (filed as Exhibit
10.3 to Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.4
    
    Moody National REIT I, Inc. 2009 Long-Term Incentive Plan (filed as Exhibit 10.4 to Pre-Effective
Amendment No. 5 to the Companys Registration Statement on Form S-11 (No. 333-150612) and
incorporated herein by reference).10.5
    
    Moody National REIT I, Inc. Independent Directors Compensation Plan (filed as Exhibit 10.5 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.6
    
    Dealer Manager Agreement (filed as Exhibit 1.1 to Pre-Effective Amendment No. 5 to the Companys
Registration Statement on Form S-11 (No. 333-150612) and incorporated herein by reference).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: May 29, 2009
    By:
    /s/ Brett C. MoodyBrett C. MoodyChairman of the Board, Chief Executive Officer and
President
(Principal Executive Officer)Date: May 29, 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
    
    Escrow Agreement among Moody National REIT I, Inc., Moody Securities, LLC and UMB Bank, N.A.
(filed as Exhibit 10.1 to Pre-Effective Amendment No. 5 to the Companys Registration Statement
on Form S-11 (No. 333-150612) and incorporated herein by reference).10.2
    
    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. (filed as Exhibit 10.2 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.3
    
    Limited Partnership Agreement of Moody National Operating Partnership I, L.P. (filed as Exhibit
10.3 to Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.4
    
    Moody National REIT I, Inc. 2009 Long-Term Incentive Plan (filed as Exhibit 10.4 to Pre-Effective
Amendment No. 5 to the Companys Registration Statement on Form S-11 (No. 333-150612) and
incorporated herein by reference).10.5
    
    Moody National REIT I, Inc. Independent Directors Compensation Plan (filed as Exhibit 10.5 to
Pre-Effective Amendment No. 5 to the Companys Registration Statement on Form S-11 (No.
333-150612) and incorporated herein by reference).10.6
    
    Dealer Manager Agreement (filed as Exhibit 1.1 to Pre-Effective Amendment No. 5 to the Companys
Registration Statement on Form S-11 (No. 333-150612) and incorporated herein by reference).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