ITEM 1. BUSINESS.
General. Murray Income Properties I, Ltd. (the "Partnership") was formed March 12, 1984 under the Texas Uniform Limited Partnership Act to acquire recently constructed income-producing shopping centers located in growth markets. As of November 1989, the Partnership became governed by the Texas Revised Limited Partnership Act. The General Partners of the Partnership are Murray Realty Investors VIII, Inc., a Texas corporation, and Crozier Partners VIII, Ltd., a Texas limited partnership.
The Partnership acquired its first shopping center, Mountain View Plaza ("Mountain View"), in 1985, and its second shopping center, Castle Oaks Village ("Castle Oaks"), in 1986. The Partnership also in 1986 acquired an 85% interest in Tower Place Joint Venture, which owns Tower Place Festival Shopping Center ("Tower Place"). The remaining 15% interest in the joint venture is owned by Murray Income Properties II, Ltd., a publicly-registered real estate limited partnership, the general partners of which are affiliates of the General Partners. All acquisitions were paid for in cash. For a more detailed description of the joint venture interest and the properties acquired by the Partnership, see "Item 2.
ITEM 2. PROPERTIES.
The Partnership owns the properties described below:
The Partnership also owns an 85% interest in Tower Place Joint Venture which owns the property described below:
Pineville (Charlotte), Tower Place Festival Shopping Center North Carolina A 114,586 square foot shopping center situated on 10.777 acres. At December 31, 1999, Tower Place was 86% leased at an average annual lease rate of $14.62. Lease rental rates range from $12.37 to $17.00 per square foot.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings to which the General Partners or the Partnership is a party or to which any of the Partnership's properties are subject.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth quarter of the year covered by this report through the solicitation of proxies or otherwise.
On March 10, 2000, a special meeting of the Limited Partners was held to approve the sale of the Partnership's properties, in one or a series of sale transactions (which may include one or more properties owned by Murray Income Properties II, Ltd., an affiliate of the Partnership under joint management), 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. At the meeting, holders of 22,627 Interests (80%) out of a total of 28,277 Interests were represented by proxy. The vote was 21,949 Interests (78%) for the proposal, 244 Interests (1%) against the proposal and 434 Interests (1%) abstaining. Because more than 50% of the outstanding Interests voted to approve the proposal, the Partnership will begin marketing the properties for sale, and after the sale of the last property and the winding up of all other business affairs, the Partnership will be liquidated and dissolved.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS.
A public market for Interests does not exist and is not likely to develop. Consequently, a Limited Partner may not be able to liquidate its investment in the event of emergency or for any other reason, and Interests may not be readily accepted as collateral for a loan. Further, the transfer of Interests is subject to certain limitations. For a description of such limitations, see Article XIII of the Agreement of Limited Partnership as contained in the Prospectus dated May 31, 1984 filed as a part of Amendment No. 2 to Registrant's Form S-11 Registration Statement (File No. 2-90016) attached hereto as Exhibit 99b.
At December 31, 1999, there were 2,222 record holders, owning an aggregate of 28,227 Interests.
The Partnership made its initial Cash Distribution from Operations following the quarter ended March 31, 1985, the first complete quarter subsequent to the acceptance of subscriptions for the minimum number of Interests offered, and has continued to make distributions after each subsequent quarter. See "Item 6.
ITEM 6. SELECTED FINANCIAL DATA.
* Based on Limited Partnership Interests outstanding at year-end and net earnings or distributions allocated to the Limited Partners.
The above selected financial data should be read in conjunction with the financial statements and related notes appearing in Item 8 of this report.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
As of December 31, 1999, the Partnership had cash and cash equivalents of $1,835,163. Such amounts represent cash generated from operations and working capital reserves.
An increase in investment properties, buildings and improvements of $100,766 from December 31, 1998 to December 31, 1999 is primarily due to new HVAC units at Tower Place and Mountain View and tenant improvements at Mountain View and Castle Oaks.
Rental income from leases with escalating rental rates is accrued using the straight line method over the related lease terms. At December 31, 1999 and December 31, 1998, there were $414,813 and $457,406, 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. A decrease from December 31, 1998 to December 31, 1999 in accounts receivable (before bad debts) of $2,279 is primarily due to a decrease in receivables related to the accruals described above at Tower Place. As of December 31, 1999 and 1998, the Partnership had allowances of $6,568 and $8,676, respectively, for uncollectible accounts receivable.
Other assets consist primarily of deferred leasing costs. The increase in other assets of $154,932 (exclusive of amortization) is primarily due to an increase in leasing commissions paid at Mountain View and Castle Oaks and deferred costs related to a proxy solicitation mailed subsequent to year end.
During the year ended December 31, 1999, the Partnership made Cash Distributions from Operations totaling $1,728,184. Subsequent to December 31, 1999, the Partnership made a Cash Distribution from Operations of $432,046 relating to the three months ended December 31, 1999. 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.
Overall market conditions remained stable in the cities in which the Partnership owns property. Each of the properties experienced slight declines in average occupancy during the year. Occupancies at Tower Place Festival and Castle Oaks Village both fell significantly during the fourth quarter due to the loss of several tenants at each property. Industry-wide and in the Partnership's markets, the year was characterized by increased vacancy in large anchor spaces caused by bankruptcies and consolidation among large retailers. In all three markets, and specifically at Tower Place and Mountain View, anchor and large space users have vacated their spaces due to increased competition within their industries. The development of power centers, or centers with several anchors, in the early 1990's has left many markets with an abundance of vacant anchor stores. This oversupply, coupled with the very specific build-out needs and square footage requirements of large
users, makes these spaces difficult to re-lease. The vacant space at Tower Place, which was occupied by General Cinema, has been leased to Bally Total Fitness, and it is anticipated that they will take occupancy in late 2000 or early 2001. The theater will be demolished and a new building will be constructed for Bally. Management continues to work diligently to lease the space previously occupied by Wild Oats Markets at Mountain View and Famous Footwear at Tower Place.
Results of Operations
Rental income increased $53,434 (2%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998. Rental income decreased $28,945 (1%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997. The following information details the rental income generated, bad debt expense incurred, and average occupancy for the years ended December 31, 1999, December 31, 1998 and December 31, 1997, respectively, for each of the Partnership's properties:
Rental income at Mountain View increased $5,978 (1%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998 due to higher rental rates. Rental income at Mountain View decreased $60,010 (6%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997 due to lower tenant reimbursements for common area maintenance and real estate taxes.
Mountain View averaged 97% occupancy during 1999, a one percent decrease from the previous year. During the year, a restaurant, which occupied 1,540 square feet vacated its space prior to the expiration of its lease. The tenant paid all of its rental obligations through the term and the space was subsequently leased to a new restaurant for five years. Another tenant who occupied 1,125 square feet vacated its premises prior to the expiration of its lease. This space has been leased to a new tenant for a five year term. Two tenants totaling 4,039 square feet renewed their leases for five years. Three tenants who occupy a total of 3,435 square feet renewed their leases for three years. One tenant who occupies 1,100 square feet renewed its lease for two years and another tenant who occupies 1,080 square feet renewed its lease for one year. During the fourth quarter, a new lease for 1,278 square feet was signed and the tenant took occupancy in January 2000. In May, management was successful in re-zoning the property to a classification, which expands the permitted uses at the shopping center. The primary reason for the re-zoning was to help the re-leasing of the space previously occupied by Wild Oats Markets. Wild Oats has continued to pay rent since vacating the space, and management is aggressively pursuing a replacement tenant. In September two new light standards were added to the parking lot in order to increase visibility at night. Also, management signed a contract to replace all of the tenant signs with more modern and updated signs. This project
should be completed during the first quarter of 2000. As of December 31, 1999, Mountain View was 100% leased.
Rental income at Castle Oaks increased $30,991 (7%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998 primarily due to an increase in rental rates and higher tenant reimbursements for common area maintenance costs and real estate taxes. Rental income at Castle Oaks increased $16,651 (4%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997 primarily due to an increase in occupancy, an increase in rental rates, and higher tenant reimbursements for common area maintenance costs, real estate taxes and insurance costs.
Castle Oaks averaged 89% occupancy for the year, a three percent decrease from the previous year. One tenant who occupied 1,278 square feet expanded, taking an additional 932 square feet. This tenant also extended the term of its lease for one year. One tenant who occupied 2,990 square feet vacated its premises upon the expiration of its lease. This space was then leased to another of the shopping center's tenants who was occupying 1,800 square feet. This tenant signed a new 38 month lease. Two tenants who occupied 2,732 square feet vacated their spaces upon expiration of their leases. Two tenants who occupy a total of 1,775 square feet renewed their leases for three years and one tenant who occupies 1,800 square feet renewed its lease for two years. In January 1999, the lighting was upgraded, making the parking lot brighter at night. At December 31, 1999, Castle Oaks was 81% leased.
Rental income at Tower Place increased $16,465 (1%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998, with increases in rental rates offset by decreases in tenant reimbursements for common area maintenance costs and insurance costs. The increase is also due to the receipt of a lease termination fee from a tenant who elected, pursuant to its lease, to terminate its lease. Rental income at Tower Place increased $14,414 (1%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997, with increases in rental rates offset by decreases in tenant reimbursements for common area maintenance costs, reimbursements for common advertising costs and a decrease in percentage rent received.
Tower Place averaged 95% occupancy for the year ended December 31, 1999, a one percent decrease from the previous year. A new lease for 1,600 square feet was signed and the tenant took occupancy in April. A lease for 2,310 square feet was signed; however, the tenant never opened for business. This space was subsequently leased to a restaurant who took occupancy in the first quarter of 2000. Effective October 5, 1999, Famous Footwear, who occupied 9,600 square feet, exercised a clause in its lease which allowed it to terminate the lease and vacate its space. Management is pursuing a replacement tenant for this space. During the year, five tenants who occupy a total of 9,250 square feet renewed their leases for three years. One tenant who occupies 4,200 square feet renewed its lease for five years. Three tenants who occupied 3,710 square feet vacated their spaces prior to the expiration of their leases. Two tenants who occupied 2,170 square feet vacated their spaces upon expiration of their leases. General Cinema, who vacated their eight-screen theater in 1998, continued to pay rent according to the terms of its lease. Effective January 31, 2000, this lease was terminated and a new lease was signed with Bally Total Fitness, who will operate a health and fitness club at the center. Bally will occupy approximately 25,000 square feet and should take occupancy in late 2000 or early 2001. During the year, roof repairs were completed and some of the wood trim along the fascia of the property was repaired and painted. At December 31, 1999, Tower Place was 86% leased.
Interest income of the Partnership increased $3,671 (4%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998 primarily due to larger balances of invested funds. Interest income of the Partnership increased $2,676 (3%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997 primarily due to larger balances of invested funds.
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. Property operating expenses increased $15,405 (2%) for the year ended December 31, 1999 as compared to the previous year primarily because of higher repair and maintenance costs at Tower Place, higher legal fees at Mountain View and higher real estate taxes at each of the partnership's properties. Mountain View's total operating expenses increased $4,350 (1%), with increases in legal and professional expenses incurred in the rezoning of the property and higher real estate taxes being offset by decreases in parking lot repairs. Castle Oaks' total operating expenses decreased $12,933 (8%) primarily due to lower repair and maintenance costs. Tower Place's total operating expenses increased $23,988 (6%), with higher repair and maintenance costs, landscaping costs and real estate taxes offset by lower utility costs and security costs.
Property operating expenses increased $32,190 (4%) for the year ended December 31, 1998 as compared to the previous year primarily because of higher repair and maintenance costs at each of the Partnership's properties and higher real estate taxes at Mountain View and Castle Oaks. Mountain View's total operating expenses increased, with increases in parking lot repairs, legal fees, leasing and promotion costs and real estate taxes being offset by decreases in security costs and property management fees. Castle Oaks' total operating expenses increased primarily because of higher repair and maintenance costs and real estate taxes. Tower Place's total operating expenses decreased, with higher repair and maintenance costs offset by lower leasing and promotion costs. During 1998, the tenants at Tower Place stopped paying into a marketing fund for common advertising costs. This resulted in lower income from reimbursements for advertising costs and a corresponding decrease in advertising expenses.
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 increased $3,845 (1%) for the year ended December 31, 1999 as compared to the year ended December 31, 1998 primarily due to increases in salaries and benefits, travel and entertainment expenses, and seminars and education costs offset by decreases in legal fees and investor services costs.
General and administrative expenses decreased $34,483 (10%) for the year ended December 31, 1998 as compared to the year ended December 31, 1997 primarily due to decreases in accounting and legal costs, investor services costs and telephone expenses, offset by increases in salaries and benefits.
Bad debt expenses increased $3,913 for the year ended December 31, 1999 as compared to the same period in 1998 with bad debts at Tower Place being offset by recoveries at Mountain View. Bad debt expenses increased $6,329 for the year ended December 31, 1998 as compared to the same period in 1997 with bad debts at Mountain View being offset by recoveries at Castle Oaks.
The effect of inflation on results of operations for the years ended December 31, 1999, 1998, and 1997 was not significant.
Through March 27, 2000, Management of the Partnership is unaware of any adverse effects of Year 2000 issues on its information technology system and non-information technology system. While Management does not believe it will experience any adverse effects, there can be no assurance that Year 2000 issues will not arise and have an adverse effect on the Partnership's financial position or results of operations.
Words or phrases when used in the Form 10-K 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 7A.
ITEM 7A. 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 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following financial statements are filed as part of this report:
INDEPENDENT AUDITORS' REPORT
The Partners Murray Income Properties I, Ltd.:
We have audited the accompanying consolidated balance sheets of Murray Income Properties I, Ltd. (a limited partnership) and consolidated joint venture as of December 31, 1999 and 1998, and the related consolidated statements of earnings, changes in partners' equity and cash flows for each of the years in the three-year period ended December 31, 1999. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Murray Income Properties I, Ltd. and consolidated joint venture as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1999, in conformity with generally accepted accounting principles.
KPMG LLP
Dallas, Texas February 10, 2000, except as to note 5 which is as of March 10, 2000
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
See accompanying notes to consolidated financial statements.
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF EARNINGS
See accompanying notes to consolidated financial statements.
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
See accompanying notes to consolidated financial statements.
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
See accompanying notes to consolidated financial statements.
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. ORGANIZATION AND BASIS OF ACCOUNTING
The Partnership was formed March 12, 1984 by filing a Certificate and Agreement of Limited Partnership with the Secretary of State of the State of Texas. The Partnership Agreement authorized the issuance of up to 30,000 limited partnership interests at a price of $1,000 each, of which 28,227 limited partnership interests were issued. Proceeds from the sale of limited partnership interests, net of related selling commissions, dealer-manager fees and other offering costs, are recorded as contributed capital.
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 generally accepted accounting principles 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.
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 December 31, 1999 and 1998, there were $414,813 and $457,406, 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.
Continued
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basic earnings and cash distributions per limited partnership interest are based upon the limited partnership interests outstanding at year-end and the net earnings and cash distributions allocated to the Limited Partners in accordance with the Partnership Agreement. Basic earnings per limited partnership interest is based on year-end partnership interests outstanding as there has been no change in partnership interests in any period included in these financial statements. There are no dilutive potential partnership interests and, therefore, there is no difference in basic earnings per limited partner interest and diluted earnings per limited partner interests.
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 December 31, 1999 and 1998. 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.
Effective January 1, 1999, the Partnership implemented the provisions of Statement of Position (SOP) 98-5, Reporting on the Costs of Start-Up Activities. SOP 98-5 requires that the costs of start-up activities, including organizational costs, be expensed as incurred. SOP 98-5 required the initial application to be recorded as of the beginning of the fiscal year in which the SOP is first adopted. Due to the nature of capitalized costs of the Partnership, there was no effect of implementation of this new pronouncement on the financial condition or results of operations of the Partnership.
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
Continued
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
unpaid Cash Distributions from Operations subordinated to the Limited Partners' 7% non-cumulative annual return and (ii) thereafter, 80% to the Limited Partner 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.
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.
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.
The Partnership had no outstanding receivable balances at December 31, 1999 or 1998, which, individually, exceeded 5% of the Partnership's total assets.
Rental income from a major customer was approximately $448,000 for the three years ended 1999, 1998, and 1997, respectively.
Continued
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Operating leases with tenants range in terms from two to 20 years. Fixed minimum future rentals under existing leases at December 31, 1999 are as follows:
Year ending December 31:
Rental income includes $586,796, $582,566, and $653,652 in 1999, 1998, and 1997, respectively, related to reimbursements from tenants for common area maintenance costs, real estate taxes and insurance costs.
4. RECONCILIATION OF CONSOLIDATED FINANCIAL STATEMENT NET EARNINGS AND PARTNERS' EQUITY TO FEDERAL INCOME TAX BASIS NET EARNINGS AND PARTNERS' EQUITY
Reconciliation of consolidated financial statement net earnings to Federal income tax basis net earnings is as follows:
Reconciliation of consolidated financial statement partners' equity to Federal income tax basis partners' equity is as follows:
Continued
Continued
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Because many types of transactions are susceptible to varying interpretations under Federal and state income tax laws and regulations, the amounts reported above may be subject to change at a later date upon final determination by the taxing authorities.
5. SUBSEQUENT EVENT
On March 10, 2000 in a special meeting of the Partnership, the Limited Partners approved the sale of the Partnership's properties, in one or a series of sale transactions (which may include one or more properties owned by MIP II), 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 will begin marketing the properties for sale, and after the sale of the last property and the winding up of all other business affairs, the Partnership will be liquidated. Management of the Partnership expects no loss to result from the sale of properties.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.
Murray Realty Investors VIII, Inc., a Texas corporation, and Crozier Partners VIII, Ltd., a Texas limited partnership, are the General Partners of the Partnership. The Limited Partners voting a majority of the interests may, without the consent of the General Partners, remove a General Partner and elect a successor General Partner.
The Partnership Agreement provides that the Partnership will have an Investment Committee consisting initially of three members, appointed by Murray Realty Investors VIII, Inc. (the "Corporate General Partner"). A person appointed to the Investment Committee may be removed by the Corporate General Partner, but the Corporate General Partner must name a replacement. The acquisition, sale, financing or refinancing of a Partnership property must be approved by a majority of the members of the Investment Committee. The members of the Investment Committee currently are Messrs. Jack E. Crozier, Mitchell L. Armstrong and W. Brent Buck. Murray Realty Investors VIII, Inc. is owned 60% by Mr. Armstrong and 40% by Mr. Buck. The following is a brief description of Jack E. Crozier, a general partner of Crozier Partners VIII, Ltd., a General Partner, and the directors and executive officers of the Corporate General Partner:
Crozier Partners VIII, Ltd., General Partner
Jack E. Crozier, 71, General Partner. From 1954 through July 1990, Mr. Crozier was affiliated with Murray Financial Corporation and various of its affiliates. From 1977 through 1988, he was President of Murray Financial Corporation, and from 1982 until June 1989 he also served as President of Murray Savings Association, a principal affiliate of Murray Financial Corporation. He served as President or Director of various other subsidiaries of Murray Financial Corporation which were engaged in real estate finance, development and management. He also served as the general partner in a number of publicly registered limited partnerships, and a number of non-registered limited partnerships, all of which had real estate as their principal assets. He is a consultant to several companies.
Murray Realty Investors VIII, Inc., Corporate General Partner
The directors and executive officers of Murray Realty Investors VIII, Inc. are:
Mitchell L. Armstrong, 49, President and Director. Mr. Armstrong became President of Murray Realty Investors VIII, Inc. on November 15, 1989. From September 1984 to that date, he was Senior Vice President - Product Development of Murray Realty Investors, Inc. and Murray Property Investors, and Vice President - Tax for Murray Properties Company. From November 1988 to November 15, 1989, he also served as Secretary to these companies. From August 1983 to September 1984, he was Executive Vice President of Dover Realty Investors. From September 1980 to August 1983, he was with Murray Properties Company, in charge of tax planning and reporting. From July 1972 to August 1980, he was with the international accounting firm of Deloitte Haskins and Sells (now Deloitte & Touche). Mr. Armstrong is a Certified Public Accountant and a Certified Financial Planner and holds a Bachelor of Business Administration degree with high honors in Accounting from Texas Tech University. He is a member of the American Institute of Certified Public Accountants and a member of the Institute of Certified Financial Planners.
W. Brent Buck, 44, Executive Vice President and Director. Mr. Buck became Executive Vice President of Murray Realty Investors VIII, Inc., on November 15, 1989. From September 1981 to November 15, 1989, Mr. Buck served in various capacities for Murray Properties Company and certain subsidiaries. His primary responsibilities included property acquisitions and asset management. He was responsible for initially identifying and negotiating the purchase of all
properties in the Partnership, except for Mountain View Plaza Shopping Center. Since their acquisition to the present time, he has continued to oversee the management of all properties of the Partnership. Mr. Buck holds a Master of Business Administration degree in Finance and a Bachelor of Public Administration degree in Urban Administration from the University of Mississippi. He also holds a Mississippi broker's license.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
Murray Income Properties I, Ltd. does not have any employees. However, pursuant to an amendment to the Partnership Agreement effective November 15, 1989, it reimburses Murray Income Properties II, Ltd. for forty-seven percent (47%) of executive compensation incurred in the management of that partnership and Murray Income Properties I, Ltd. Murray Income Properties II, Ltd. is a real estate limited partnership, the general partners of which are affiliates of the General Partners. The following table presents Murray Income Properties I, Ltd.'s share of executive compensation paid by Murray Income Properties II, Ltd.
SUMMARY COMPENSATION TABLE
* Offices held in Murray Realty Investors VIII, Inc., the Corporate General Partner.
(1) The Partnership provides the named executive officers with certain group life, health, medical and other non-cash benefits generally available to all salaried employees. The amounts shown in this column include the following:
(a) Matching contributions by the Partnership under its SIMPLE-IRA plan which equaled 3% of each employee's covered compensation (salary and term insurance value). During 1999 the Partnership's matching contributions were $1,818 for Mr. Armstrong and $1,348 for Mr. Buck.
(b) Full premium cost of term insurance that will benefit the executive.
The Partnership and Murray Income Properties II, Ltd. entered into severance agreements with Mr. Armstrong and Mr. Buck effective September 16, 1996. Pursuant to these agreements, upon the occurrence of specified events, the Partnership will be obligated for forty-seven (47%) of any benefits paid pursuant to the agreements to either Mr. Armstrong or Mr. Buck. The agreement with Mr. Armstrong provides for a benefit amount equal to the value of the aggregate of one month of his highest monthly salary paid at any time during the twelve months prior to his termination multiplied by fifteen (15), plus the current monthly cost of such health, disability and life benefits (including spousal or similar coverage and coverage for children) which he was receiving or entitled to receive immediately prior to termination multiplied by eighteen (18). The agreement with Mr. Buck provides for a benefit amount equal to the value of the aggregate of one month of his highest monthly salary paid at any time during the twelve months prior to his termination multiplied by twelve (12), plus the current monthly cost of such health, disability and life benefits (including
spousal or similar coverage and coverage for children) which he was receiving or entitled to receive immediately prior to termination multiplied by fourteen (14).
The Partnership has not paid and does not propose to pay any bonuses or deferred compensation, compensation pursuant to retirement or other plans, or other compensation to the officers, directors or partners of the General Partners other than described in the above table or the above paragraph. In addition, there are no restricted stock awards, options or stock appreciation rights, or any other long term incentive payouts.
During the operational and liquidation stages of this Partnership, the General Partners and their affiliates receive various fees and distributions. For information on these types of remuneration, reference is made to the section entitled "Management Compensation" as contained in the Prospectus dated May 31, 1984 filed as a part of Amendment No. 2 to Registrant's Form S-11 Registration Statement (File No. 2-90016) attached hereto as Exhibit 99d. See "Item 13. Certain Relationships and Related Transactions" for information on the fees and other compensation or reimbursements paid to the General Partners or their Affiliates during the year ended December 31, 1998.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
No person (including any "group" as that term is used in Section 13 (d)(3) of the Securities Exchange Act of 1934) is known to the Partnership to be the beneficial owner of more than five percent of the outstanding voting Interests as of December 31, 1999.
No General Partner, officer, director or partner of the General Partners beneficially owned or owned of record directly or indirectly any Interest in the Partnership as of December 31, 1999.
No arrangements are known to the Partnership which may result in a change of control of the Partnership.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the year ended December 31, 1999 the Partnership reimbursed Murray Income Properties II, Ltd. ("MIP II") for forty-seven percent (47%) of the costs associated with the management of the Partnership and MIP II. MIP II is a publicly-registered real estate limited partnership the general partners of which are affiliates of the General Partners. The reimbursement has been included in general and administrative expenses.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements - See Index to Financial Statements in Item 8 of this Form 10-K
2. Financial Statement Schedules with Independent Auditors' report Thereon:
(i) Consolidated Valuation and Qualifying Accounts (Schedule II) - Years ended December 31, 1999, 1998, and 1997.
(ii) Consolidated Real Estate and Accumulated Depreciation (Schedule III) - December 31, 1999
All other schedules have been omitted because they are not required or the required information is shown in the consolidated financial statements or notes thereto.
(b) Reports on Form 8-K filed during the last quarter of the year.
None
(c) 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, 1989. (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. (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. (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. (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. (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. (File No. 0-14105)
3h Amendment to Amended and Restated Certificate and Agreement of Limited Partnership, dated March 22, 2000. Filed herewith.
4 Form of Certificate representing Limited Partnership Interest. Reference is made to Exhibit 4 to Amendment No. 1 to Partnership's Form S-11 Registration Statement, filed with the Securities and Exchange Commission on May 17, 1984. (File No. 2-90016)
10a Lease Modification Agreement No. 3, dated January 3, 2000, with Childtime Childcare, Inc. to lease certain premises as described within the Lease Agreement dated April 11, 1983 at Mountain View Plaza Shopping Center. Filed herewith.
10b Lease Agreement with General Cinema Corporation of North Carolina to lease certain premises as described within the Lease Agreement dated July 23, 1985 at Tower Place Festival Shopping Center. Reference is made to Exhibit 10o to the 1989 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 1989. (File No. 0-14105)
10c Termination of Lease Agreement with General Cinema Corporation of North Carolina, dated February 11, 2000, terminating the Lease Agreement dated July 23, 1985 at Tower Place Festival Shopping Center. Filed herewith.
10d Lease Agreement with Bally Total Fitness Corporation to lease certain premises as described within the Lease Agreement dated February 14, 2000 at Tower Place Festival Shopping Center. Filed herewith.
10e Lease Agreement with J&K Cafeterias to lease certain premises as described in the Lease Agreement dated April 12, 1994 at Tower Place Festival Shopping Center. Reference is made to Exhibit 10d to the 1994 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 1995. (File No. 0-14105)
10f Data Processing System Use Agreement between Murray Income Properties I, Ltd. and The Mavricc Management Systems, Inc. dated September 1, 1998. Reference is made to Exhibit 10d to the 1998 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 1999. (File No. 0-14105)
10g Property Management Agreement and Exclusive Marketing Agreement with Zell Management and Development, Inc. for property management services described in the
Property Management Agreement dated December 20, 1989 (as extended pursuant to the Extension of Property Management Agreement dated December 8, 1999 at Mountain View Plaza Shopping Center). Filed herewith.
10h Management Agreement with CK Charlotte Overhead Limited Partnership for management and operation services described in the Management Agreement dated December 2, 1999 at Tower Place Festival Shopping Center. Filed herewith.
10i Management agreement with Cavender & Hill Properties, Inc. for management and operation services described in the Management Agreement dated June 30, 1996 at Castle Oaks Shopping Center. Reference is made to Exhibit 10a to the 1996 2nd Quarter Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 1996. (File No. 0-14105)
10j Lease Modification Agreement No. 1 dated February 14, 1992 with Childtime Childcare, Inc. at Mountain View Plaza Shopping Center. Reference is made to Exhibit 10K to the 1992 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 1993. (File No. 0-14105)
10k Lease Agreement with Reay's Ranch Markets, Inc. to lease certain premises as described within the Lease Agreement dated October 20, 1992 at Mountain View Plaza Shopping Center. Reference is made to Exhibit 10m to the 1992 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 1993. (File No. 0-14105)
10l Third Amendment to Lease with Reay's Ranch Markets, Inc. dated November 3, 1993 at Mountain View Plaza Shopping Center. Reference is made to Exhibit 10n to the 1993 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 1994. (File No. 0-14105)
10m Fourth Amendment of Lease Agreement, Consent to Assignment and Estoppel Certificate dated June 30, 1997 by, between and among Wild Oats Markets, Inc., Reay's Ranch Markets, Inc., and Murray Income Properties I, Ltd. Reference is made to Exhibit 10k to the 1997 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 1998. (File No. 0-14105)
10n Lease Agreement with Brown Group Retail, Inc. to lease certain premises as described within the Lease Agreement dated November 9, 1993 at Tower Place Festival Shopping Center. Reference is made to Exhibit 10p to the 1993 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 1994. (File No. 0-14105)
10o Lease Agreement with Razmiko's, Ltd. to lease certain premises as described with the Lease Agreement dated August 1, 1995 at Castle Oaks Shopping Center. Reference is made to Exhibit 10m to the 1995 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 1996. (File No. 0-14105)
10p Severance Agreements by and among Murray Income Properties I, Ltd. and Murray Income Properties II, Ltd. and Mitchell L. Armstrong dated September 16, 1996. Reference is made to Exhibit 10a to the 1996 3rd Quarter Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 1996. (File No. 0-14105)
10q Severance Agreements by and among Murray Income Properties I, Ltd. and Murray Income Properties II, Ltd. and W. Brent Buck dated September 16, 1996. Reference is made to Exhibit 10b to the 1996 3rd Quarter Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 1996. (File No. 0-14105)
27 Financial Data Schedule. Filed herewith.
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 No. 9 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.
(d) Financial Statement Schedules with Independent Auditors' Report Thereon:
(i) Consolidated Valuation and Qualifying Accounts (Schedule II) - Years ended December 31, 1999, 1998, and 1997.
(ii) Consolidated Real Estate and Accumulated Depreciation (Schedule III) - December 31, 1999.
All other schedules have been omitted because they are not required or the required information is shown in the consolidated financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
The Partners Murray Income Properties I, Ltd.:
Under date of February 10, 2000, except as to note 5 which is as of March 10, 2000, we reported on the consolidated balance sheets of Murray Income Properties I, Ltd. (a limited partnership) and consolidated joint venture as of December 31, 1999 and 1998, and the related consolidated statements of earnings, changes in partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1999, as contained in Item 8 of this annual report on Form 10-K. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedules as listed in Item 14(a)2 of this annual report on Form 10-K. These financial statement schedules are the responsibility of the Partnership`s management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
KPMG LLP
Dallas, Texas February 10, 2000, except as to note 5 which is as of March 10, 2000
SCHEDULE II
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
Deductions are primarily for writeoffs of accounts and notes receivables deemed uncollectible by management.
SCHEDULE III
MURRAY INCOME PROPERTIES I, LTD. (A LIMITED PARTNERSHIP) AND CONSOLIDATED JOINT VENTURE CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1999
Notes:
(A) The initial cost to the Partnership represents the original purchase price of the properties.
(B) Reconciliation of real estate owned for 1999, 1998 and 1997:
(C) Reconciliation of accumulated depreciation for 1999, 1998 and 1997:
(D) The aggregate cost of real estate at December 31, 1999 for Federal income tax purposes is $26,861,934.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: Crozier Partners VIII, Ltd. a General Partner
Dated: March 27, 2000 By: /s/ Jack E. Crozier ----------------------------------- Jack E. Crozier a General Partner
By: Murray Realty Investors VIII, Inc. a General Partner
Dated: March 27, 2000 By: /s/ Mitchell Armstrong ----------------------------------- Mitchell Armstrong President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Murray Realty Investors VIII, Inc. a General Partner
Dated: March 27, 2000 By: /s/ Brent Buck ------------------------------------ Brent Buck Executive Vice President Director
Dated: March 27, 2000 By: /s/ Mitchell Armstrong ------------------------------------ Mitchell Armstrong Chief Executive Officer Chief Financial Officer Director
INDEX TO EXHIBITS