10-Q 1 dxi302.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 March 31, 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 March 31, 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 March 31, 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 March 31, 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: April 26, 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: April 26, 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 April 26, 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 March 31, 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 March 31, 2002 and 2001, total revenues increased 7.1% from $587,421 to $629,223, total expenses increased 9.8% from $302,878 to $332,459 and other income decreased from $1,145 to $250. As a result, net income increased 4.0% to $297,014 for the three-month period ended March 31, 2002, from $285,688 for the same period in 2001. Rental revenue increased as a result of higher occupancy and unit rental rates. Occupancy levels for the Partnership's four mini-storage facilities averaged 87.9% for the three month period ended March 31, 2002 as compared to 85.6% for the same period in 2001. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses increased approximately $28,000 (10.8%) primarily as a result of increases in maintenance and repair, property management fees and workers compensation insurance expenses partially off- set by decreases in advertising and power and sweeping expenses. Property management fees, which are based on rental revenue, increased as a result of the increase in rental revenue. General and administrative expenses remained constant. 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. The General Partners have determined that the hostile tender offer is not in the best interests of the Limited Partners, that the tender offer is grossly inadequate given the performance history of the Limited Partnership and the inherent value of the units, and recommend that the Limited Partners reject the hostile tender offer and not tender their units pursuant thereto. The General Partners plan to continue their policy of funding the continuing improvement 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) MARCH 31, 2002 AND DECEMBER 31, 2001 March 31, December 31, 2002 2001 ASSETS CASH AND CASH EQUIVALENTS $ 588,858 $ 451,762 PROPERTY,NET 4,727,346 4,790,794 OTHER ASSETS 51,241 51,241 TOTAL $5,367,445 $5,293,797 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 314,195 $ 335,541 PARTNERS' EQUITY(DEFICIT): General Partners (39,134) (40,084) Limited Partners 5,092,384 4,998,340 Total partners' equity 5,053,250 4,958,256 TOTAL $5,367,445 $5,293,797 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 March 31, March 31, 2002 2001 REVENUES: Rental Income $ 629,223 $ 587,421 EXPENSES: Operating 286,353 258,344 General and administrative 46,106 44,534 Total expenses 332,459 302,878 OPERATING INCOME 296,764 284,543 OTHER INCOME Interest 250 1,145 INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 297,014 285,688 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 0 0 NET INCOME $ 297,014 $ 285,688 AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 294,044 $ 282,831 General partners 2,970 2,857 TOTAL $ 297,014 $ 285,688 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 14.70 $ 14.14 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 THREE MONTHS ENDED MARCH 31, 2002 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2002 ($40,084) $4,998,340 $4,958,256 NET INCOME 2,970 294,044 297,014 DISTRIBUTIONS (2,020) (200,000) (202,020) BALANCE AT MARCH 31, 2002 ($39,134) $5,092,384 $5,053,250 See accompanying notes to financial statements(unaudited). STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001 March 31, March 31, 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 297,014 $ 285,688 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 79,698 79,698 Changes in assets and liabilities: (Decrease)increase in liabilities (21,346) 31,303 Net cash provided by operating activities 355,366 396,689 CASH FLOWS FROM INVESTING ACTIVIIES Additions to property (16,250) CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (202,020) (202,020) NET INCREASE CASH AND CASH EQUIVALENTS 137,096 194,669 CASH AND CASH EQUIVALENTS: At beginning of period 451,762 362,863 At end of period $ 588,858 $ 557,532 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 March 31, 2002, and for the periods ended March 31, 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 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 March 31, 2002, the total property cost and accumulated depreciation are as follows: Land $ 1,894,250 Buildings 6,541,922 Furniture and equipment 7,594 Total 8,443,766 Less: Accumulated Depreciation ( 3,716,420) Property - Net $ 4,727,346
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.