SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/_x_/ Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended June 30, 2003
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 33-26038
DSI REALTY INCOME FUND XI, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________33-0324161
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
6700 E. Pacific Coast Hwy, Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
_________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
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__.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Rule 10-01 of Regulation S-X is
included in the Quarterly Report to the Limited Partners of Registrant for
the period ended June 30, 2003 which is attached hereto as Exhibit "20"
and incorporated herein by this reference.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Registrant incorporates by this reference its Quarterly Report to
Limited Partners for the period ended June 30, 2003.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K.
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended June 30, 2003.
(B) Registrant did not file any reports on Form 8-K for the
period reported upon.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: July 31, 2003 DSI REALTY INCOME FUND XI
A California Limited Partnership
(Registrant)
By____\s\ Robert J. Conway_____
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: July 31, 2003 DSI REALTY INCOME FUND XI
A California Limited Partnership
(Registrant)
By__\s\ Robert J. Conway________
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
July 31, 2003
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND XI
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended June 30, 2003. The following is Management's
discussion and analysis of the Partnership's financial condition and
results of its operations.
For the three-month periods ended June 30, 2003 and 2002, total revenues
increased 0.7% from $562,263 to $566,320 and total expenses increased 7.0%
from $332,167 to $355,556 and other income decreased from $121 to $78. As
a result, net income decreased 8.4% from $230,217 for the three-month period
June 30, 2002, to $210,842 for the same period in 2003. Rental revenue
remained relatively constant. Occupancy levels for the Partnership's four
mini-storage facilities averaged 85.1% for the three-month period ended
June 30, 2003 as compared to 86.5% for the same period in 2002. The Partner-
ship is continuing its marketing efforts to attract and keep new tenants in
its various mini-storage facilities. Operating expenses increased approxi-
mately $13,700 (4.8%) primarily as a result of higher advertising, real
estate tax and salaries and wages expenses, partially offset by decreases in
in office supplies and workers compensation insurance expenses. General and
administrative expenses increased approximately $9,700 (19.8%) primarily due
to state tax payments, partially offset by lower legal and professional and
equipment and computer lease expenses.
For the six-month periods ended June 30, 2003, and 2002, total revenues
decreased 2.2% from $1,191,486 to $1,164,915 and total expenses increased
3.6% from $664,626 to $688,661 and other income decreased from $371 to $201.
As a result, net income decreased 9.6% from $527,231 for the six-month period
ended June 30, 2002, to $476,455 for the same period in 2003. Rental revenue
decreased as a result of lower occupancy and unit rental rates. Operating
expenses increased approximately $13,000 (2.3%) primarily as a result of
higher advertising, telephone, real estate tax, salaries and wages, power and
sweeping expenses, partially offset by decreases in repairs and maintenance
and office supplies and workers compensation insurance expenses. General and
administrative expenses increased approximately $11,000 (11.6%) as a result
of higher state tax payments partially offset by decreases in legal and pro-
fessional expense.
On April 5, 2002, the General Partners received a copy of a hostile tender
offer from MacKenzie Patterson, Inc. and associated corporations and limited
partnerships to purchase all of the Units in the Partnership. This offer was
also filed with the Securities and Exchange Commission on the same date. The
General Partners have determined that the hostile tender offer was not in
the best interests of the Limited Partners, that the tender offer was grossly
inadequate given the performance history of the Limited Partnership and the
inherent value of the Units, and recommended that the Limited Parners reject
the hostile tender offer and not tender their Units pursuant thereto. The
offer was subsequently increased and extended to June 30, 2002 and again to
July 22, 2002. The General Partners' initial determination regarding the
offer did not change. Prior to the expiration date of the offer, Limited
Partners tendered 30 Units representing 0.150% of the outstanding Units of
the Partnership.
The Limited Partners have approved an amendment to the Partnership Agreement
granting the General Partners ten days to review certain types of transfers
during which the General Partners may match, exceed or approve the proposed
transfers. The Court has rejected all preliminary attempts to halt implemen-
tation of the amendment.
The General Partners plan to continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from operations.
The Partnership's financial resources appear to be adequate to meet its needs.
We are not enclosing a copy of the Partnership Form 10-Q as filed with the
Securities and Exchange Commission since all the information set forth
therein is contained either in this letter or in the attached financial
statements. However, if you wish to receive a copy of said report, please
send a written request to DSI Realty Income Fund XI, P.O. Box 357, Long
Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND XI
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
JUNE 30, 2003 AND DECEMBER 31, 2002
June 30, December 31,
2003 2002
ASSETS
CASH AND CASH EQUIVALENTS $ 821,486 $ 597,284
PROPERTY,NET 4,295,070 4,454,466
OTHER ASSETS 39,837 39,837
TOTAL $5,156,393 $5,091,587
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 343,843 $ 351,482
PARTNERS' EQUITY(DEFICIT):
General Partners (41,541) (42,266)
Limited Partners 4,854,061 4,782,371
Total partners' equity 4,812,520 4,740,105
TOTAL $5,156,363 $5,091,587
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
June 30, June 30,
2003 2002
REVENUES:
Rental Income $ 566,320 $ 562,263
EXPENSES:
Operating 296,829 283,159
General and administrative 58,727 49,008
Total expenses 355,556 332,167
OPERATING INCOME 210,764 230,096
OTHER INCOME
Interest 78 121
INCOME BEFORE MINORITY INTEREST
IN INCOME OF REAL
ESTATE JOINT VENTURE 210,842 230,217
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURE 0 0
NET INCOME $ 210,842 $ 230,217
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 208,734 $ 227,915
General partners 2,108 2,302
TOTAL $ 210,842 $ 230,217
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 10.44 $ 11.40
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 20,000 20,000
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED) FOR THE SIX MONTHS
ENDED JUNE 30, 2003 AND 2002
June 30, June 30,
2003 2002
REVENUES:
Rental income $1,164,915 $1,191,486
EXPENSES:
Operating 582,548 569,512
General and administrative 106,113 95,114
Total expenses 688,661 664,626
OPERATING INCOME 476,254 526,860
OTHER INCOME
Interest 201 371
INCOME BEFORE MINORITY INTEREST
IN INCOME OF REAL
ESTATE JOINT VENTURE 476,455 527,231
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURE 0 0
NET INCOME $ 476,455 $ 527,231
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 471,690 521,959
General Partners 4,765 5,272
TOTAL $ 476,455 $ 527,231
NET INCOME PER LIMITED
PARTNERSHIP UNIT $23.58 $26.10
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 20,000 20,000
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2003
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2003 ($42,266) $4,482,371 $4,740,105
NET INCOME 4,765 471,690 476,455
DISTRIBUTIONS (4,040) (400,000) (404,040)
BALANCE AT JUNE 30, 2003 ($41,541) $4,854,061 $4,812,520
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
June 30, June 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 476,455 $ 527,231
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 159,396 159,396
Changes in assets and
liabilities:
Decrease in other assets 0 1,827
Decrease in liabilities (7,639) (14,999)
Net cash provided by
operating activities 628,212 673,455
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property 0 (16,250)
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (404,040) (404,040)
NET INCREASE CASH AND
CASH EQUIVALENTS 224,172 253,165
CASH AND CASH EQUIVALENTS:
At beginning of period 597,284 451,762
At end of period $ 821,456 $ 704,927
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund XI (the "Partnership"), a limited partnership, has
three general partners (DSI Properties, Inc., Robert J. Conway and
Joseph W. Conway) and limited partners owning 20,000 limited partnership
units. The Partnership was formed under the California Uniform Limited
Partnership Act for the primary purpose of acquiring and operating real
estate.
The accompanying financial information as of June 30, 2003, and for the
periods ended June 30, 2003, and 2002 is unaudited. Such financial
information includes all adjustments which are considered necessary by
the Partnership's management for a fair presentation of the results for
the periods indicated.
2. PROPERTY
The Partnership holds a 90% interest in a joint venture that owns a mini-
storage facility in Whittier, California; an 85% interest in an operating
mini-storage in Edgewater Park, New Jersey; a 90% interest in an operating
mini-storage facility in Bloomingdale, Illinois; and a 75% interest in an
operating mini-storage in Sterling Heights, Michigan.
As of June 30, 2003, the total property cost and accumulated depreciation
are as follows:
Land $ 1,894,250
Buildings 6,541,922
Furniture and equipment 8,803
Total 8,444,975
Less: Accumulated Depreciation ( 4,149,905)
Property - Net $ 4,295,070
3. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the
net income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Partnership evaluated
the effectiveness of its disclosure controls and procedures. The evaluation
was performed by the Partnership's Controller with assistance of the Partner-
ship's President and the Chief Executive Officer. These disclosure controls
and procedures are designated to ensure that the information required to be
disclosed by the Partnership in its periodic reports filed with the Securities
and Exchange Commission (the Commission) is recorded, processed, summarized
and reported, within the time periods specified by the certifying officers
on a timely basis. Based on this evaluation, the Partnership concluded that
its disclosure controls and procedures were effective. There have been no
significant changes in the Partnership's internal controls or in the factors
that could significantly affect the internal controls subsequent to the date
of their evaluation.
CERTIFICATIONS
I, Robert J. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund XI;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: July 31, 2003
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund XI;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: July 31, 2003
Richard P. Conway
Vice President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-Q for the period ending June 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Robert J. Conway
Chief Executive Officer
July 31, 2003
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-Q for the period ending June 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Richard P. Conway
Vice President
July 31, 2003