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, 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 September 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 September 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 September 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: October 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: October 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
October 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 September 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 September 30, 2003 and 2002, total revenues
increased 0.2% from $585,847 to $587,206 and total expenses increased 8.7%
from $331,876 to $360,853 and other income decreased from $203 to $83. Minority
interest in income of real estate joint ventures increased 8,7% from $142,454
to $154,854. As a result, net income decreased 35.9% from $111,720 for the
three-month period ended September 30, 2002, to $71,582 for the same period
in 2003. Rental revenue remained relatively constant. Occupancy levels for
the Partnership's four mini-storage facilities averaged 86.7% for the three-
month period ended September 30, 2003 as compared to 84.9% for the same period
in 2002. The Partnership is continuing its marketing efforts to attract and
keep new tenants in its various mini-storage facilities. Operating expenses
remained relatively constant as higher advertising, real estate tax and
salaries and wages expenses was offset by decreases in repairs and maintenance
and workers compensation insurance expenses. General and administrative
expenses increased approximately $30,900 (96.8%) primarily due to higher legal
and professional expenses, partially offset by lower equipment and computer
lease expenses. Legal expense increased as a result of legal challenges by
dissident Limited Partners to a proposed amendment to the Partnership Agree-
ment (see paragraph below).
For the nine-month periods ended September 30, 2003, and 2002, total revenues
decreased 1.4% from $1,777,333 to $1,752,121 and total expenses increased 5.3%
from $996,502 to $1,049,514 and other income decreased from $574 to $284.
Minority interest in income of real estate joint ventures increased 8.7% from
$142,454 to $154,854. As a result, net income decreased 14.2% from $638,951
for the nine-month period ended September 30, 2002, to $548,037 for the same
period in 2003. Rental revenue decreased as a result of lower unit rental
rates. Operating expenses increased approximately $11,200 (1.3%) primarily
as a result of higher advertising, telephone, real estate tax, salaries and
wages and power and sweeping expenses, partially offset by decreases in repairs
and maintenance, office supplies and workers compensation insurance expenses.
General and administrative expenses increased approximately $41,900 (33.0%)
for the same reasons as discussed above.
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 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. Subsequently, the dissident Limited Partners who
initiated the legal proceedings decided not to pursue the matter any further.
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, 2003 AND DECEMBER 31, 2002
September 30, December 31,
2003 2002
ASSETS
CASH AND CASH EQUIVALENTS $ 809,375 $ 597,284
PROPERTY, Net 4,215,372 4,454,466
OTHER ASSETS 39,837 39,837
TOTAL $5,064,584 $5,091,587
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 382,502 $ 351,482
PARTNERS' EQUITY (DEFICIT):
General Partners (42,846) (42,266)
Limited Partners 4,724,928 4,782,371
Total partners' equity 4,682,082 4,740,105
TOTAL $5,064,584 $5,091,587
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental Income $ 587,206 $ 585,847
EXPENSES:
Operating 298,122 299,997
General and administrative 62,731 31,879
Total expenses 360,853 331,876
OPERATING INCOME 226,353 253,971
OTHER INCOME
Interest 83 203
INCOME BEFORE MINORITY INTEREST IN
INCOME OR REAL ESTATE JOINT VENTURES 226,436 254,174
MINORITY INTEREST IN INCOME OF
REAL ESTATE JOINT VENTURES (154,854) (142,454)
NET INCOME $ 71,582 $ 111,720
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 70,866 $ 110,603
General partners 716 1,117
TOTAL $ 71,582 $ 111,720
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 3.54 $ 5.53
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, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental $1,752,121 $1,777,333
EXPENSES:
Operating 880,670 869,509
General and administrative 168,844 126,993
Total expenses 1,049,514 996,502
OPERATING INCOME 702,607 780,831
OTHER INCOME
Interest 284 574
INCOME BEFORE MINORITY INTEREST IN
INCOME OF REAL ESTATE JOINT VENTURES 702,891 781,405
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURES (154,854) (142,454)
NET INCOME 548,037 638,951
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners 542,557 632,561
General partners 5,480 6,390
TOTAL 548,037 638,951
NET INCOME PER LIMITED
PARTNERSHIP UNIT $27.13 $31.63
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, 2003
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2003 ($42,266) $4,782,371 $4,740,105
NET INCOME 5,480 542,557 548,037
DISTRIBUTIONS (6,060) (600,000) (606,060)
BALANCE AT SEPTEMBER 30, 2003 ($42,846) $4,724,928 $4,682,082
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 548,037 $ 638,951
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 239,094 239,094
Changes in assets and
liabilities:
Decrease in other assets 0 1,827
Increase(decrease) in liabilities 31,020 (15,833)
Net cash provided by
operating activities 818,151 864,039
CASH FLOWS FROM INVESTING ACTIVITIES -
Additions to property 0 (17,459)
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (606,060) (606,060)
NET INCREASE CASH AND
CASH EQUIVALENTS 212,091 240,520
CASH AND CASH EQUIVALENTS:
At beginning of period 597,284 451,762
At end of period $ 809,375 $ 692,282
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, 2003, and for the
periods ended September 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 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, 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 ( 4,229,602)
Property - Net $ 4,215,372
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 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 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, 2003 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 material weaknesses.
Date: November, 2003
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 material weaknesses.
Date: November, 2003
Richard Conway
Vice President