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 September 30, 2005
/___/ 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.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
September 30, December 31,
2005 2004
ASSETS
CASH AND CASH EQUIVALENTS $ 442,008 $ 335,279
PROPERTY,NET 3,641,377 3,901,485
OTHER ASSETS 55,460 55,460
---------- ----------
TOTAL $4,138,845 $4,292,224
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $ 202,020 $ 202,020
Capital lease obligation 103,092 130,092
Other liabilities 145,652 171,618
---------- ----------
Total liabilities 450,764 503,730
---------- ----------
PARTNERS' EQUITY(DEFICIT):
General Partners (52,786) (51,782)
Limited Partners 3,740,867 3,840,276
---------- ----------
Total partners' equity 3,688,081 3,788,494
---------- ----------
TOTAL $4,138,845 $4,292,224
========== ==========
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental Income $ 606,234 $ 572,026
---------- ----------
EXPENSES:
Operating 328,038 321,120
General and administrative 33,733 27,818
---------- ----------
Total expenses 361,771 348,938
---------- ----------
OPERATING INCOME 244,463 223,088
OTHER INCOME
Interest 84 83
---------- ----------
INCOME BEFORE MINORITY INTEREST
IN INCOME OF REAL
ESTATE JOINT VENTURE 244,547 223,171
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURE (136,654) (144,354)
---------- ----------
NET INCOME $ 107,893 $ 78,817
========== ==========
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 106,814 $ 78,029
General partners 1,079 788
---------- ----------
TOTAL $ 107,893 $ 78,817
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 5.34 $ 3.90
========== ==========
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 20,000 20,000
====== ======
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental income $1,791,745 $1,711,352
---------- ----------
EXPENSES:
Operating 993,791 912,994
General and administrative 155,901 154,723
---------- ----------
Total expenses 1,149,692 1,067,717
---------- ----------
OPERATING INCOME 642,053 643,635
OTHER INCOME
Interest 248 247
---------- ----------
INCOME BEFORE MINORITY INTEREST
IN INCOME OF REAL
ESTATE JOINT VENTURE 642,301 643,882
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURE (136,654) (144,354)
---------- ----------
NET INCOME $ 505,647 $ 499,528
========== ==========
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 500,591 494,533
General Partners 5,056 4,995
---------- ----------
TOTAL $ 505,647 $ 499,528
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $25.03 $24.73
====== ======
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 20,000 20,000
====== ======
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2005 ($51,782) $3,840,276 $3,788,494
NET INCOME 5,056 500,591 505,647
DISTRIBUTIONS (6,060) (600,000) (606,060)
-------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2005 ($52,786) $3,740,867 $3,688,081
======== ========== ==========
See accompanying notes to financial statements.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 505,647 $ 499,528
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 260,108 239,094
Changes in assets and
liabilities:
Decrease in liabilities (52,966) (508)
--------- ---------
Net cash provided by
operating activities 712,789 738,114
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (606,060) (606,060)
---------- ---------
NET INCREASE CASH AND
CASH EQUIVALENTS 106,729 132,054
CASH AND CASH EQUIVALENTS:
At beginning of period 335,279 527,509
--------- ---------
At end of period $ 442,008 $ 659,563
========= =========
See accompanying notes to financial statements.
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 Partnership has entered into four joint venture arrangements with
affiliates of Dahn Corporation ("Dahn"). The Partnership and its joint
venture partners have acquired four mini-storage properties located in
Whittier, California; Edgewater, New Jersey; Bloomingdale, Illinois; and
Sterling Heights, Michigan. The properties were acquired from Dahn.
Pursuant to the terms of each joint venture agreement, annual profits (before
depreciation) of each joint venture will be allocated to the Joint Venture
Partners on the basis of actual distributions received, while annual losses
(before depreciation) are to be allocated in proportion to the ownership
percentages as specified above. Cash distributions are to be made to each
Joint Venture Partner based upon each Joint Venture Partner's ownership
percentage. However, the Joint Venture Partners have subordinated their
rights to any distributions to the Partnership's receipt of an annual, non-
cumulative, 8% return (7.75% for the Whittier property) from the operation of
the joint ventures. Requirements under the subordination agreement were met
during 2004, 2003 and 2002. A minority interest in real estate joint venture
is recorded to the extent of any distributions due to the Joint Venture
Partners. The Joint Venture Partners are also entitled to receive a percentage
based upon a pre-determined formula, of the net proceeds from the sale of the
properties. The Partnership is required by the agreements to pay Dahn a
management fee equal to 6% of gross revenue from operations, defined as the
entire amount of all receipts from the renting or leasing of storage compart-
ments and sale of locks.
The accompanying financial information as of September 30, 2005, and for
the periods ended September 30, 2005, and 2004 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.
The total property cost and accumulated depreciation is as follows:
September 30, 2005 December 31, 2004
Land $ 1,894,250 $ 1,894,250
Buildings 6,541,922 6,541,922
Furniture and equipment 165,008 165,008
------------ ------------
Total 8,601,180 8,601,180
Less: Accumulated Depreciation ( 4,959,803) (4,699,695)
------------ ------------
Property - Net $ 3,641,377 $ 3,901,485
============ ============
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. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of limited Partnership, the general partners are to
be allocated 1% of the net profits or losses from operations, and the
limited partners are to be allocated the balance of the net profits or
losses from operations in proportion to their limited partnership
interests.
The General Partners are also entitled to receive a percentage, based on
a predetermined formula, of any cash distribution from the sale, other
disposition or refinancing of the project.
In addition, the General Partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is to be paid in an amount equal to 9% per annum of the cash available
for distribution on a cumulative basis, calculated as cash generated from
operations less capital expenditures.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended September 30, 2005. 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 September 30, 2005 and 2004, total revenues
increased 6.0% from $572,026 to $606,234 and total expenses increased 3.7%
from $348,938 to $361,771 and other income increased from $83 to $84. Minority
interest in income of real estate joint venture decreased 5.3% from $144,354
to $136,654. As a result, net income increased 36.9% from $78,817 for the
three-month period ended September 30, 2004, to $107,893 for the same period
in 2005. Rental revenue increased as a result of higher occupancy and unit
rental rates. Occupancy levels for the Partnership's four mini-storage facil-
ities averaged 86.1% for the three-month period ended September 30, 2005 as
compared to 84.3% for the same period in 2004. The Partnership is continuing
its marketing efforts to attract and keep new tenants in its various mini-
storage facilities. Operating expenses increased approximately $6,900 (2.1%)
primarily as a result of higher depreciation, truck insurance and maintenance,
purchase of locks and packing materials and property management fees, partially
offset by a decrease in advertising, maintenance and repair and salaries and
wages expenses. Property management fees, which are based on rental revenue,
increased as a result of the increase in rental revenue. General and admin-
istrative expenses increased approximately $5,900 (21.3%) primarily due to
relatively insignificant fluctuations in various expense accounts.
For the nine-month period ended September 30, 2005, and 2004, total revenues
increased 4.7% from $1,711,352 to $1,791,745 and total expenses increased 7.7%
from $1,067,717 to $1,149,692 and other income increased from $247 to $248.
Minority interest in income of real estate joint venture decreased 5.3% from
$144,354 to $136,654. As a result, net income increased 1.2% from $499,528
for the nine-month period ended September 30, 2004, to $505,647 for the same
period in 2005. Rental revenue increased as a result of higher occupancy and
unit rental rates. Operating expenses increased approximately $80,800 (8.9%)
primarily as a result of higher maintenance and repair, pruchase of locks and
packing materials, property management fees, salaries and wages, truck in-
surance and maintenance and depreciation expenses, partially offset by a de-
crease in advertising expense. General and administrative expenses remained
relatively constant as a decrease in state tax payments was partially offset
by an increase in equipment and computer lease expense.
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.
The General Partners anticipate distributions to the Limited Partners to re-
main at the current level for the foreseeable future.
Item 3. Quantative and Qualitative Disclosures About Market Risk
NONE
Item 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
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 September 30, 2005.
(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: October 31, 2005 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: October 31, 2005 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
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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; 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 over financial reporting.
Date: October 31, 2005
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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; 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 over financial reporting.
Date: October 31, 2005
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 September 30, 2005 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
October 31, 2005
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 September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Vice President of the Corporate General Partner, 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
October 31, 2005