-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ApmPvhvy0JUFeO0sC2eVpDAdiD6YDUw3RKQt/TIaCdQ0F3d2df5bz2sJDvgDtyWY TcTC4yq9yBFhJcApPsscbQ== 0000318835-02-000032.txt : 20021113 0000318835-02-000032.hdr.sgml : 20021113 20021113173206 ACCESSION NUMBER: 0000318835-02-000032 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSI REALTY INCOME FUND XI CENTRAL INDEX KEY: 0000844048 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330324161 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18286 FILM NUMBER: 02821081 BUSINESS ADDRESS: STREET 1: 3701 LONG BEACH BLVD CITY: LONG BEACH STATE: CA ZIP: 90807 BUSINESS PHONE: 2135957711 MAIL ADDRESS: STREET 1: 6700 E. PACIFIC COAST HWY. STREET 2: P.O. BOX 357 CITY: LONG BEACH STATE: CA ZIP: 90801 10-Q 1 dsi11902.txt 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, 2002 /___/ 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 September 30, 2002, 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 September 30, 2002. 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 September 30, 2002. (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, 2002 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, 2002 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 October 31, 2002 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 September 30, 2002. 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, 2002 and 2001, total revenues increased 1.8% from $575,643 to $585,847 and total expenses decreased 1.3% from $336,224 to $331,876 and other income decreased from $708 to $203. Minority interest in income of real estate joint ventures decreased 2.7% from $146,404 to $142,454. As a result, net income increased 19.2% from $93,723 for the three-month period ended September 30, 2001, to $111,720 for the same period in 2002. Rental revenue increased as a result of higher unit rental rates. Occupancy levels for the Partnership's four mini-storage facilities averaged 84.9% for the three-month period ended September 30, 2002 as compared to 88.5% for the same period in 2001. The Partnership is continuing its market- ing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses decreased approximately $7,500 (2.4%) primarily as a result of lower maintenance and repair and travel expenses, partially offset by an increase in workers compensation insurance expense. General and administrative expenses remained relatively constant. For the nine-month periods ended September 30, 2002, and 2001, total revenues increased 1.8% from $1,745,267 to $1,777,333 and total expenses increased 1.8% from $978,739 to $996,502 and other income decreased from $2,733 to $574. Minority interest in income of real estate joint ventures decreased 2.7% from $146,404 to $142,454. As a result, net income increased 2.6% from $622,857 for the nine-month period ended September 30, 2001, to $638,951 for the same period in 2002. Rental revenue increased as a result of higher unit rental rates. Operating expenses remained relatively constant. General and admini- strative expenses increased approximately $20,200 (18.9%) as a result in legal and professional and equipment and computer lease expenses. 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 Partners 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 has not changed. Prior to the expiration date of the offer, Limited Partners tendered 30 Units representing 0.150% of the outstanding Units of the Partnership. 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) SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 September 30, December 31, 2002 2001 ASSETS CASH AND CASH EQUIVALENTS $ 692,282 $ 451,762 PROPERTY, Net 4,569,159 4,790,794 OTHER ASSETS 49,414 51,241 TOTAL $5,310,855 $5,293,797 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 319,708 $ 335,541 PARTNERS' EQUITY (DEFICIT): General Partners (39,754) (40,084) Limited Partners 5,030,901 4,998,340 Total partners' equity 4,991,147 4,958,256 TOTAL $5,310,855 $5,293,797 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 REVENUES: Rental Income $ 585,847 $ 575,643 EXPENSES: Operating 299,997 307,545 General and administrative 31,879 28,679 Total expenses 331,876 336,224 OPERATING INCOME 253,971 239,419 OTHER INCOME Interest 203 708 INCOME BEFORE MINORITY INTEREST IN INCOME OR REAL ESTATE JOINT VENTURES 254,174 240,127 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURES (142,454) (146,404) NET INCOME $ 111,720 $ 93,723 AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 110,603 $ 92,786 General partners 1,117 937 TOTAL $ 111,720 $ 93,723 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 5.53 $ 4.64 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 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 REVENUES: Rental $1,777,333 $1,745,267 EXPENSES: Operating 869,509 871,937 General and administrative 126,993 106,802 Total expenses 996,502 978,739 OPERATING INCOME 780,831 766,528 OTHER INCOME Interest 574 2,733 INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURES 781,405 769,261 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURES (142,454) (146,404) NET INCOME 638,951 622,857 AGGREGATE NET INCOME ALLOCATED TO: Limited partners 632,561 616,628 General partners 6,390 6,229 TOTAL 638,951 622,857 NET INCOME PER LIMITED PARTNERSHIP UNIT $31.63 $30.83 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 (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2002 ($40,084) $4,998,340 $4,958,256 NET INCOME 6,390 632,561 638,951 DISTRIBUTIONS (6,060) (600,000) (606,060) BALANCE AT SEPTEMBER 30, 2002 ($39,754) $5,030,901 $4,991,147 See accompanying notes to financial statements(unaudited). STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 638,951 $ 622,857 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 239,094 239,094 Changes in assets and liabilities: Decrease(increase)in other assets 1,827 (6,000) Decrease in liabilities (15,833) (4,904) Net cash provided by operating activities 864,039 851,047 CASH FLOWS FROM INVESTING ACTIVITIES - Additions to property (17,459) (9,000) CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (606,060) (606,060) NET INCREASE CASH AND CASH EQUIVALENTS 240,520 235,987 CASH AND CASH EQUIVALENTS: At beginning of period 451,762 362,863 At end of period $ 692,282 $ 598,850 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 September 30, 2002, and for the periods ended September 30, 2002, and 2001 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 mini-storage facility in Whittier, California; an 85% interest in an existing 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 September 30, 2002, 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 ( 3,875,816) Property - Net $ 4,569,169 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. This evaluation was performed by the Partnership's Controller with the assistance of the Partnership's President and the Chief Executive Officer. These disclosure controls and procedures are designed 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 Commission's rules and forms, and that the information is communicated to the certifying officers on a timely basis. Based on this evaluation, the Partnership con- cluded that its disclosure controls and procedures were effective. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation. DSI REALTY INCOME FUND XI Form 10-Q CERTIFICATION Each of the undersigned hereby certifies in his capacity as an officer of DSI Properties, Inc. (corporate General Partner) of DSI REALTY INCOME FUND XI (the "Partnership") that the Quarterly Report of the Partnership on Form 10-Q for the periods ended September 30, 2002 fully complies with the requirements of Section 13(a) of the Securities and Exchange Act of 1934 and that inform- ation contained in such report fairly presents, in all material respects, the financial condition of the Partnership at the end of such periods and the results of operations of the Partnership for such periods. ROBERT J. CONWAY, CEO RICHARD P. CONWAY, VP CERTIFICATIONS I, Robert 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 covered 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 consoli- dated 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 and the audit com- mitee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, 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 internal 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 materinal weaknesses. Date: November, 2002 Robert Conway President CERTIFICATIONS I, Richard 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 covered 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 consoli- dated 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 and the audit com- mitee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, 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 internal 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 materinal weaknesses. Date: November, 2002 Richard Conway Vice President -----END PRIVACY-ENHANCED MESSAGE-----