-----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, WJtchl4m73LW+e3dl0yfVBRMXNPvAbHBxOnTkz0AtqjQWUFcXeAKAm8v1z/S0pgU QD+w8XOAbPL7cat9sfAqdA== 0000318835-03-000029.txt : 20030813 0000318835-03-000029.hdr.sgml : 20030813 20030813152838 ACCESSION NUMBER: 0000318835-03-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030813 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: 03841000 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 dsixi-603.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 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 -----END PRIVACY-ENHANCED MESSAGE-----