<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- -----------------------------------------------------------------------------
MARKET CONDITIONS
Interest rates moved higher throughout 1994 as the fixed-income markets
focused on the strong pace of economic growth and the potential for higher
inflation. Satisfied that economic growth would be sustained, the Federal
Reserve Board began to tighten monetary policy. Between February and November,
the central bank raised the federal-funds rate from 3.00 percent to 5.50
percent in six stages. This led to a severe bear market in bonds.
Municipal yields, as tracked by The Bond Buyer Revenue Bond Index,* began
1994 at 5.52 percent, nearly a record low. The Index peaked at 7.37 percent
in November and ended the year at 6.97 percent. The 145 basis point yield
increase during the year was equivalent to an 18 percent price decline for a
bond with a 30 year maturity. In contrast, over the six-year period between
1987 and 1993, yields fell from 9.00 percent to 5.50 percent and bond prices
appreciated 24 percent.
The municipal bond market's weakness paralleled trends in other
fixed-income sectors. The 30-year U.S. Treasury bond's yield increased 160
basis points and closed 1994 at 7.84 percent. During the year, the ratio of
Revenue Bond Index yields to 30-year U.S. Treasury bond yields ranged from a
low of 85 percent to a high of 92 percent and ended the year at 89 percent.
At higher ratios municipals are more attractive relative to taxable
investments.
DEAN WITTER TAX-EXEMPT MUNICIPAL SECURITIES TRUST
GROWTH OF $10,000
($ IN THOUSANDS)
LEHMAN BROTHERS
MUNICIPAL BOND
DATE TOTAL INDEX
---- ------ --------------
December 31, 1984 $ 9,600 $10,000
December 31, 1985 $11,649 $12,003
December 31, 1986 $13,999 $14,321
December 31, 1987 $13,798 $14,537
December 31, 1988 $15,594 $16,014
December 31, 1989 $17,248 $17,742
December 31, 1990 $18,258 $19,035
December 31, 1991 $20,578 $21,346
December 31, 1992 $22,449 $23,229
December 31, 1993 $24,970 $26,081
December 31, 1994 $23,583(3) $24,733
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
-5.55(1) 6.46(1) 9.40(1)
-9.33(2) 5.59(2) 8.96(2)
____ Fund ____ Lehman (4)
Past performance is not predictive of future returns.
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction
of the maximum applicable front-end sales charge (4%). See the Fund's
current prospectus for complete details on fees and sales charges.
(3) Closing value including the deduction of a 4% front-end sales charge,
assuming a complete redemption on December 31, 1994.
(4) The Lehman Brothers Municipal Bond Index tracks the performance of
municipal bonds with maturities of 2 years or greater and a minimum
credit rating of Baa or BBB, as rated by Moody's Investors Service,
Inc. or Standard & Poor's Corp. The Index does not include any
expenses, fees, or charges.
The fiscal year was also marked by periods of supply/demand imbalance in
municipals. Between February and May, dealer inventories reached near-record
levels as long-term bonds were sold to pay taxes and increase cash. A
semblance of stability returned to the market between June and August.
However, after Labor Day the market was again subject to a renewed round of
bond sales as fund redemptions mounted and tax-loss selling accelerated.
Market conditions improved in December as the "January effect" -- the
reinvestment of coupons, redemptions and maturities at a time of seasonally
scarce supply -- was anticipated. This seasonal pattern more than offset
market uncertainty caused by the Orange County, California bankruptcy filing.
On December 6, 1994, Orange County, one of the most affluent areas in the
country, was forced to seek protection after its pooled investment fund faced
unprecedented losses.
Higher interest rates slowed the level of state and local government debt
issuance. New-issue volume dropped 44 percent to $163 billion in 1994. The
driving force behind this sharp decline was the virtual halt in refunding
issues, which plummeted 74 percent. Last year
*The Bond Buyer Revenue Bond Index is an arithmetic average of the yields
of 25 selected municipal revenue bonds with 30-year maturities. Credit
ratings of these bonds range from Aa1 to Baa1 by Moody's and AA+ to A-by
Standard & Poor's.
<PAGE>
the level of redemptions from maturing debt and refunding calls reached $191
billion and exceeded the supply of new issues coming to market. This marked
the first decline in the amount of municipal securities outstanding. A repeat
of this supply scarcity is expected in 1995 and bodes well for the relative
performance of municipals.
PERFORMANCE REVIEW
Dean Witter Tax-Exempt Securities Trust's total return for the fiscal year
ended December 31, 1994 was -5.55 percent. Tax free dividends totaling $0.70
per share were paid during the year. At year end, the Fund's net assets
totaled $1.3 billion. Since inception the Fund has provided shareholders with
an average annual total return of 9.59 percent. The accompanying chart
illustrates the performance of a $10,000 investment in the Fund over the
10-year period ended December 31, 1994, versus the performance of a similar
hypothetical investment in the Lehman Brothers Municipal Bond Index.
INVESTMENT STRATEGY
During a year of rapidly rising interest rates, the Fund benefited from
its established mix of older high-coupon bonds. At the end of the fiscal
year, the portfolio held 14 percent of its net assets in refunded issues,
which were secured by U.S. government securities held in escrow to redeem
these issues on their first call dates. The Fund also increased its
short-term investment and cash position to 7 percent of net assets in 1994.
On December 31, 1994, the portfolio's long-term investments were
diversified among 13 specific municipal sectors and 119 credits. None of the
Fund's holdings was identified as a participant in the Orange County
investment pool. The three largest sectors were transportation facilities,
electric and water & sewer revenue bonds, representing 36 percent of net
assets. The average maturity and call protection of the Fund's long-term
holdings were 18 years and 7 years, respectively. Bonds subject to the
alternative minimum tax (AMT) comprised approximately 13 percent of net
assets. The credit-quality ratings of long-term portfolio are summarized
below:
<TABLE>
<CAPTION>
MOODY'S OR STANDARD & POOR'S RATING PERCENT
- ----------------------------------- ---------
<S> <C>
Aaa or AAA ................. 30%
Aa or AA ................... 27
A or A ..................... 30
Baa or BBB ................. 7
Not rated .................. 6
</TABLE>
LOOKING AHEAD
Moving into 1995, the Fund plans to reduce its defensive positions,
including refunded bonds, as the pace of economic growth and inflationary
expectations moderate. New investments will continue to stress credit quality
and essential service sectors. However, even with the move to higher yields
that occurred last year, the Fund cannot obtain the yield of many older
investments that may be called or sold in the next few years.
We appreciate your ongoing support of Dean Witter Tax-Exempt Securities
Trust and look forward to continuing to serve your investment needs.
Very truly yours,
/s/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (90.0%)
GENERAL OBLIGATION (6.7%)
$10,000 Birmingham, Alabama, Cap Impr & Refg Ser 1985 (Crossover Refunded) 9.80 % 10/01/10 $10,554,800
North Slope Borough, Alaska,
3,500 Refg 1990 Ser I (MBIA Insured) .................................... 0.00 06/30/99 2,696,995
3,900 Ser 1992 A (MBIA Insured) ......................................... 0.00 06/30/03 2,306,070
5,000 Ser 1992 A Conv (MBIA Insured) .................................... 5.90 06/30/03 4,950,700
4,000 Connecticut, College Savings 1989 Ser A ............................ 0.00 07/01/08 1,706,600
Massachusetts,
20,000 Fiscal Recovery 1990 Ser A ........................................ 7.25 06/01/96 20,579,000
1,500 Refg 1992 Ser B ................................................... 6.50 08/01/08 1,513,365
11,500 Refg 1993 Ser A ................................................... 5.50 02/01/11 10,051,345
8,000 1994 Ser C (FGIC Insured) ......................................... 6.75 11/01/12 8,109,520
4,000 Clark County, Nevada, Transportation Ser 1992 A (AMBAC Insured) ... 6.50 06/01/17 3,930,280
New York City, New York,
12,000 1990 Ser D ........................................................ 6.00 08/01/07 11,052,960
10,000 1990 Ser D ........................................................ 6.00 08/01/08 9,107,200
- ------------ --------------
93,400 86,558,835
- ------------ --------------
EDUCATIONAL FACILITIES REVENUE (5.2%)
10,000 FSU Financial Assistance Inc, Florida, Impr & Refg Ser 1994 ....... 5.25 10/01/15 8,259,700
850 University of Maryland, 1989 Refg Ser A ............................ 7.20 10/01/09 889,040
7,000 Massachusetts Health & Educational Facilities Authority, Boston
University 1991 Ser ................................................ 6.66 10/01/31 6,848,800
15,000 New Hampshire Higher Educational & Health Facilities Authority,
Dartmouth College Ser 1993 ......................................... 5.375 06/01/23 12,240,300
2,000 New Jersey Economic Development Authority, The Seeing Eye Inc 1991 7.30 04/01/11 1,964,280
11,000 New York State, City University -John Jay College COPs ............ 7.25 08/15/07 11,165,330
New York State Dormitory Authority, State University
5,000 Ser 1989 B ........................................................ 0.00 05/15/02 3,192,250
21,000 Ser 1990 B ........................................................ 7.00 05/15/16 20,859,300
2,000 Pennsylvania Higher Educational Facilities Authority, University of
Pennsylvania Ser 1987 .............................................. 6.625 01/01/17 1,955,880
- ------------ --------------
73,850 67,374,880
- ------------ --------------
ELECTRIC REVENUE (12.0%)
10,000 Sacramento Municipal Utility District, California, Refg 1994 Ser I
(MBIA Insured) ..................................................... 5.75 01/01/15 8,931,300
20,000 Southern California Public Power Authority, Mead -Adelanto 1994 Ser
A (AMBAC Insured) .................................................. 5.01 07/01/15 16,360,800
10,000 Municipal Electric Authority of Georgia, Fifth Crossover Ser ...... 6.50 01/01/17 9,605,000
19,000 Nebraska Public Power District, Power 1993 Ser C ................... 5.00 01/01/17 14,944,070
15,000 New York State Power Authority, Gen Pur Ser CC ..................... 5.25 01/01/18 12,166,500
5,000 North Carolina Municipal Power Agency #1, Catawba Ser 1988 ........ 6.00 01/01/15 4,485,800
Puerto Rico Electric Power Authority, Power
6,000 Ser N ............................................................. 5.00 07/01/12 4,925,880
15,000 Ser O ............................................................. 0.00 07/01/17 3,052,350
6,000 Austin, Texas, Combined Utilities Refg Ser 1993 A .................. 5.75 11/15/13 5,364,480
Intermountain Power Agency, Utah,
25,000 Refg 1985 Ser H GAINS (Prerefunded)** ............................. 0.00 07/01/12 19,882,750
15,000 Refg 1985 Ser H ................................................... 6.00 07/01/21 13,384,050
5,000 Refg 1985 Ser I ................................................... 6.00 07/01/21 4,461,350
8,000 Refg 1993 Ser A ................................................... 5.00 07/01/23 6,131,920
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994 (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
$ 8,000 Lewis County Public Utility District #1, Washington, Cowlitz Falls
Hydro Refg Ser 1993 ................................................ 5.50 % 10/01/13 $ 7,005,760
10,000 Snohomish County Public Utilities District #1, Washington, 1993 Ser
(FGIC Insured) ..................................................... 6.00 01/01/18 9,011,900
16,000 Washington Public Power Supply System, Proj #2 Refg Ser 1994 A .... 6.00 07/01/07 15,191,360
- ------------ --------------
193,000 154,905,270
- ------------ --------------
HOSPITAL REVENUE (10.4%)
3,000 Baxter County, Arkansas, Baxter County Regional Hospital Inc Impr &
Refg Ser 1992 ...................................................... 7.50 09/01/21 2,962,050
10,000 California Health Facilities Financing Authority, Kaiser Permanente
Ser 1985 ........................................................... 5.55 08/15/25 7,969,900
10,000 University of California, UCLA Medical Center Ser 1986
(Prerefunded) ...................................................... 6.90 12/01/16 10,479,400
6,000 Connecticut Health & Educational Facilities Authority, Yale-New
Haven Hospital Ser F (MBIA Insured) ................................ 7.10 07/01/25 6,178,740
8,160 Altamonte Springs Health Facilities Authority, Florida, Adventist
Health/Sunbelt Inc Ser 1984 (MBIA Insured) (Prerefunded) .......... 7.90 10/01/14 8,670,734
Massachusetts Health & Educational Facilities Authority,
8,000 Brigham & Women's Hospital Ser B (Prerefunded) .................... 7.125 07/01/07 8,213,680
1,500 Malden Hospital -FHA Insured Mtge Ser A ........................... 5.00 08/01/16 1,129,155
10,000 New England Medical Center Ser G (MBIA Insured) ................... 5.375 07/01/24 8,174,200
Rochester, Minnesota, Mayo Foundation/Mayo Medical Center
7,000 Ser 1992 I ........................................................ 5.75 11/15/21 6,051,570
3,700 Ser 1992 F ........................................................ 6.25 11/15/21 3,437,115
15,000 Missouri Health & Educational Facilities Authority, Barnes-Jewish
Inc/Christian Health Services Ser 1993 A ........................... 5.25 05/15/14 12,088,350
6,000 New York State Medical Care Facilities Finance Agency, Presbyterian
Hospital -FHA Insured Mtge 1994 Ser A Refg ......................... 5.25 08/15/14 4,971,720
12,000 Charlotte-Mecklenburg County Hospital Authority, North Carolina,
Ser 1992 ........................................................... 6.00 01/01/22 10,888,560
4,000 Cuyahoga County, Ohio, The Cleveland Clinic Foundation Refg Ser
1988 A ............................................................. 8.00 12/01/15 4,286,840
9,000 North Central Texas Health Facilities Development Corporation,
University Medical Center Inc Ser 1987 ............................. 7.75 04/01/17 8,876,340
5,000 Salt Lake City, Utah, IHC Hospital Inc Ser of 1983 (ETM) .......... 5.00 06/01/15 4,097,350
Fairfax County Industrial Development Authority, Virginia,
14,000 Fairfax Hospital System Inc/Inova Health Ser 1991 C RITES
(Prerefunded) ..................................................... 8.327+ 08/29/23 15,925,000
7,500 Inova Health System Foundation Refg Ser 1993 A .................... 5.25 08/15/19 5,831,100
5,000 University of Virginia, Refg Ser E ................................. 6.00 06/01/13 4,481,700
- ------------ --------------
144,860 134,713,504
- ------------ --------------
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE (8.9%)
10,000 Jefferson County, Kentucky, Louisville Gas & Electric Co 1993 Ser B 5.625 08/15/19 8,488,600
1,510 Maryland Industrial Development Financing Authority, Medical Waste
Assocs LP 1989 Ser (AMT) ........................................... 8.75 11/15/10 1,510,000
7,000 Becker, Minnesota, Northern States Power Co Ser A 1989 ............ 6.80 04/01/07 7,066,150
18,000 Claiborne County, Mississippi, Middle South Energy Inc Ser C ...... 9.875 12/01/14 20,149,920
10,500 Clark County, Nevada, Nevada Power Co Ser 1992 A ( AMT) (FGIC
Insured) ........................................................... 6.70 06/01/22 10,154,550
10,000 Washoe County, Nevada, Sierra Pacific Power Co Ser 1987 (AMBAC
Insured) ........................................................... 6.30 12/01/14 9,584,100
3,000 Pennsylvania Industrial Development Authority, Ser A 1991
(Prerefunded) ...................................................... 7.00 01/01/11 3,240,780
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994 (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
$ 8,000 Alliance Airport Authority, Texas, AMR Corp Ser 1990 (AMT) ........ 7.50 % 12/01/29 $ 7,549,200
6,000 Brazos River Authority, Texas, Texas Utilities Electric Co
Collateralized Ser 1988 A (AMT) .................................... 9.25 03/01/18 6,620,460
12,000 Grapevine Industrial Development Corporation, Texas, American
Airlines Inc Ser 1985 .............................................. 9.25 12/01/12 12,551,400
Matagorda County Navigational District #1, Texas, Central Power &
Light Co
7,000 Collateralized Ser 1984 A ......................................... 7.50 12/15/14 7,302,400
10,000 Ser 1986 (AMT) .................................................... 7.875 12/01/16 10,342,500
10,000 Weston, Wisconsin, Wisconsin Public Service Corp Refg Ser 1993 A .. 6.90 02/01/13 10,118,400
- ------------ --------------
113,010 114,678,460
- ------------ --------------
MORTGAGE REVENUE -MULTI-FAMILY (1.7%)
Massachusetts Housing Finance Agency,
4,875 GNMA-Backed Ser 1985 A ............................................ 9.125 12/01/20 5,063,078
2,060 Hsg Dev 1986 Ser A (AMT) .......................................... 7.75 12/01/19 2,111,911
7,000 Michigan Housing Development Authority, Rental Ser A (Bifurcated
FSA Insured) ....................................................... 6.50 04/01/23 6,652,870
New York City Housing Development Corporation, New York
4,651 Ruppert Proj -FHA Insured Sec 223F ................................ 6.50 11/15/18 4,262,442
4,512 Stevenson Commons Proj -FHA Insured Sec 223F ...................... 6.50 05/15/18 4,137,537
- ------------ --------------
23,098 22,227,838
- ------------ --------------
MORTGAGE REVENUE -SINGLE FAMILY (5.6%)
3,065 California Housing Finance Agency, Home Cap Apprec 1983 Ser B ..... 0.00 08/01/15 359,739
13,100 Illinois Housing Development Authority, Residential Ser C (AMT) ... 6.875 02/01/18 12,510,238
8,800 Nebraska Investment Finance Authority, GNMA-Backed 1990 Ser ....... 7.631 09/10/30 9,030,120
4,010 North Carolina Housing Finance Agency, Ser Q (AMT) ................. 8.00 03/01/18 4,057,639
7,600 Ohio Housing Finance Agency, GNMA-Backed 1990 Ser A (AMT) ......... 6.903 03/01/31 7,404,832
Pennsylvania Housing Finance Agency,
8,000 Ser 1993-37A ...................................................... 5.45 10/01/17 6,661,120
10,000 Ser 1991-31 (AMT) ................................................. 7.00 10/01/23 9,605,100
Tennessee Housing Development Agency, Mortgage Finance
4,000 1993 Ser A ........................................................ 5.90 07/01/18 3,483,800
12,700 1993 Ser A ........................................................ 5.95 07/01/28 10,827,385
9,000 Wisconsin Housing & Economic Development Authority, Home Ownership
1991 Ser (AMT) ..................................................... 7.097 10/25/22 8,730,450
- ------------ --------------
80,275 72,670,423
- ------------ --------------
NURSING & HEALTH RELATED FACILITIES REVENUE (0.2%)
4,000 Maine Health & Higher Educational Facilities Authority, Ser 1992 B
(FSA Insured) ...................................................... 5.50 07/01/22 3,284,520
- ------------ --------------
PUBLIC FACILITIES REVENUE (6.7%)
Los Angeles Convention & Exhibition Center Authority, California,
10,000 1993 Refg Ser A (MBIA Insured) .................................... 5.375 08/15/18 8,335,200
9,000 Ser 1985 (Prerefunded) ............................................ 9.00 12/01/20 11,089,980
7,000 Palm Beach County, Florida, Criminal Justice Ser 1990 (FGIC
Insured) ........................................................... 6.00 06/01/13 6,648,390
10,000 Metropolitan Pier & Exposition Authority, Illinois, McCormick Place
Ser 1992 A ......................................................... 6.50 06/15/27 9,325,700
3,000 Maine Municipal Bond Bank, 1988 Ser B (Prerefunded) ................ 7.85 11/01/18 3,309,000
10,000 Michigan Building Authority, 1993 Refg Ser I (AMBAC Insured) ...... 5.30 10/01/16 8,407,600
6,000 Saint Louis Industrial Development Authority, Missouri, Kiel Center
Refg Ser 1992 (AMT) ................................................ 7.75 12/01/13 5,877,180
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994 (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
$14,000 New York State Dormitory Authority, Suffolk County Judicial Ser
1986 (ETM) ........................................................ 7.375% 07/01/16 $15,194,340
Ohio Building Authority, Correctional
5,000 1985 Ser C BIGS** ................................................. 0.00 10/01/05 5,327,700
10,000 1986 Ser A (Prerefunded) .......................................... 7.35 08/01/06 10,849,200
2,000 Refg 1986 Ser B ................................................... 7.125 09/01/09 2,074,400
- ------------ --------------
86,000 86,438,690
- ------------ --------------
RESOURCE RECOVERY REVENUE (6.8%)
Connecticut Resources Recovery Authority,
9,000 American REF-FUEL Co of Southeastern Connecticut 1988 Ser A (AMT) 8.00 11/15/15 9,474,840
4,950 Bridgeport RESCO Ser A ............................................ 7.625 01/01/09 5,146,515
6,835 Broward County, Florida, SES Broward County South Ser 1984 ........ 7.95 12/01/08 7,368,403
8,500 Savannah Resource Recovery Development Authority, Georgia, Savannah
Energy Systems Co Ser 1992 ......................................... 6.30 12/01/06 8,505,015
10,000 Northeast Maryland Waste Disposal Authority, Montgomery County Ser
1993 A (AMT) ....................................................... 6.30 07/01/16 8,923,200
3,000 Greater Detroit Resource Recovery Authority, Michigan, Ser C ...... 9.25 12/13/08 3,147,360
9,000 Mercer County Improvement Authority, New Jersey, Refg Ser A 1992
(AMT) (FGIC Insured) ............................................... 6.70 04/01/13 9,035,550
9,000 Union County Utilities Authority, New Jersey, 1991 Ser A (AMT) .... 7.20 06/15/14 8,851,680
10,000 Hempstead Industrial Development Agency, New York, 1985 American
REF-FUEL Co of Hempstead ........................................... 7.40 12/01/10 10,170,700
7,030 New York State Environmental Facilities Corporation, Huntington
1989 Ser A (AMT) ................................................... 7.50 10/01/12 7,051,090
5,000 Onondaga County Resource Recovery Agency, New York, 1992 Ser (AMT) 6.875 05/01/06 4,848,500
5,000 Fairfax County Economic Development Authority, Virginia, Ogden
Martin Systems of Fairfax Inc Ser 1988 A (AMT) ..................... 7.75 02/01/11 5,241,600
- ------------ --------------
87,315 87,764,453
- ------------ --------------
TRANSPORTATION FACILITIES REVENUE (12.8%)
Mid-Bay Bridge Authority, Florida,
8,965 Sr Lien Crossover Refg Ser 1993 A ................................. 6.00 10/01/13 8,044,205
2,500 Jr Lien Advance Refg Ser 1993 D ................................... 6.125 10/01/22 2,063,275
2,500 Ser 1991 A (Crossover Refunded) ................................... 6.875 10/01/22 2,573,675
10,000 Atlanta, Georgia, Airport Ser 1990 (AMT) ........................... 6.25 01/01/21 9,085,400
8,100 Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax
Refg Ser K ......................................................... 7.25 07/01/10 8,460,531
5,000 Hawaii, Airports Second Ser 1991 (AMT) ............................. 7.00 07/01/18 4,960,150
Kentucky Turnpike Authority,
5,135 Economic Development Road Revitalization Ser 1990 (Prerefunded) .. 7.25 05/15/10 5,562,746
30,000 Resource Recovery Road Refg 1987 Ser A ............................ 5.00 07/01/08 25,729,800
2,255 Massachusetts Port Authority, Refg Ser 1985 B ...................... 9.375 07/01/15 2,344,929
New Jersey Highway Authority, Sr Parkway
11,000 Refg Ser 1992 ..................................................... 6.25 01/01/14 10,620,940
10,000 1986 Ser (Prerefunded) ............................................ 7.125 01/01/14 10,391,000
Albuquerque, New Mexico, Gross Receipts Tax -Airport Supported
7,000 Sub Lien Ser 12/84 ................................................ 8.25 07/01/06 7,320,740
7,000 Sub Lien Ser 12/84 ................................................ 8.25 07/01/14 7,314,300
10,000 Port Authority of New York & New Jersey, Cons 53rd Ser*** ......... 8.70 07/15/20 10,587,800
7,000 Ohio Turnpike Commission, 1994 Ser A ............................... 5.75 02/15/24 6,144,320
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994 (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
Pennsylvania Turnpike Commission,
$ 5,000 Ser L of 1991 (MBIA Insured) ...................................... 6.00 % 06/01/15 $ 4,649,900
15,000 Ser A of 1986 ..................................................... 6.00 12/01/17 13,827,000
6,000 Ser K of 1989 (Prerefunded) ....................................... 7.50 12/01/19 6,580,560
10,000 Puerto Rico Highway & Transportation Authority, Refg Ser X ........ 5.50 07/01/15 8,485,600
4,000 Virginia Transportation Board, US Route 58 Corridor Ser 1993 B .... 5.625 05/15/13 3,556,760
9,000 Port of Seattle, Washington, Ser 1992 B (AMT) ...................... 6.00 11/01/17 8,170,110
- ------------ --------------
175,455 166,473,741
- ------------ --------------
WATER & SEWER REVENUE (10.8%)
10,000 Birmingham Water Works & Sewer Board, Alabama, Ser 1994 ........... 5.50 01/01/20 8,447,300
10,000 Phoenix Civic Improvement Corporation, Arizona, Jr Lien Water Ser
1994 ............................................................... 5.45 07/01/19 8,348,500
10,000 California Department of Water Resources, Central Valley Refg Ser L 5.50 12/01/23 8,191,700
5,000 Central Coast Water Authority, California, Ser 1992 (AMBAC Insured) 6.60 10/01/22 4,949,050
19,750 East Bay Municipal Utility District, California, Water Refg Ser
1993 (MBIA Insured) ................................................ 5.00 06/01/21 15,294,993
7,500 South Central Connecticut Regional Water Authority, 1986 Ser
(Prerefunded) ...................................................... 7.125 08/01/12 7,844,025
4,750 Baltimore, Maryland, Water Refg Ser 1990-A (MBIA Insured)
(Prerefunded) ...................................................... 6.50 07/01/20 4,938,575
2,315 Boston Water & Sewer Commission, Massachusetts, Ser A 1986
(Prerefunded) ...................................................... 7.875 11/01/13 2,449,594
Massachusetts Water Resources Authority,
10,000 Refg 1992 Ser B ................................................... 5.50 11/01/15 8,571,800
10,000 1993 Ser C ........................................................ 5.25 12/01/15 8,234,500
4,000 Detroit, Michigan, Sewage Refg Ser 1993-A (FGIC Insured) .......... 5.70 07/01/13 3,606,760
8,500 Albuquerque, New Mexico, Joint Water & Sewer 1986 Ser A
(Prerefunded) ...................................................... 6.00 07/01/15 8,642,970
New York City Municipal Water Finance Authority, New York,
8,500 1994 Ser B ........................................................ 5.30 06/15/06 7,533,465
3,700 1991 Ser C (Prerefunded) .......................................... 7.375 06/15/13 4,077,696
10,000 1993 Ser A ........................................................ 6.00 06/15/17 9,021,600
10,000 Philadelphia, Pennsylvania, Water & Wastewater Ser 1993
(CGIC Insured) ..................................................... 5.50 06/15/15 8,545,100
10,000 Fairfax County, Virginia, Sewer Ser A (AMBAC Insured) (Prerefunded) 7.00 11/15/16 10,741,700
10,000 Richmond, Virginia, Public Utilities Ser A (Prerefunded) .......... 8.00 01/15/18 10,863,000
- ------------ --------------
154,015 140,302,328
- ------------ --------------
OTHER REVENUE (2.2%)
3,500 Denver, Colorado, Excise Tax Ser 1985 A ............................ 5.00 11/01/08 3,002,405
New York Local Government Assistance Corporation,
9,000 Ser 1994 A ........................................................ 5.375 04/01/14 7,548,750
11,000 Ser 1993 C Refg ................................................... 5.50 04/01/17 9,326,020
8,000 Ser 1991 D (Prerefunded) .......................................... 7.00 04/01/18 8,711,040
- ------------ --------------
31,500 28,588,215
- ------------ --------------
1,259,778 TOTAL MUNICIPAL BONDS (IDENTIFIED COST $1,179,951,284) ................................... 1,165,981,157
- ------------ --------------
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1994 (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ------------ -------- ---------- --------------
<S> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATIONS (7.4%)
$ 15,000 District of Columbia, General Fund Recovery Ser B-2 (Tender
01/03/95) .......................................................... 6.00%* 06/01/03 $ 15,000,000
12,000 Volusia County Health Facilities Authority, Florida, Pooled
Hospital Ser 1985 (FGIC Insured) (Tender 01/04/95) ................. 5.45 * 11/01/15 12,000,000
17,000 Illinois Health Facilities Authority, Elmhurst Memorial Hospital
Ser 1993 B (Tender 01/03/95) ....................................... 5.90 * 05/01/11 17,000,000
31,500 Gulf Coast Waste Disposal Authority, Texas, Amoco Oil Co Ser 1992
(Tender 01/03/95) .................................................. 6.15 * 10/01/17 31,500,000
19,700 Salt Lake City, Utah, British Petroleum/Service Stations Holdings
Ser 1994 (Tender 01/03/95) ......................................... 6.00 * 02/01/08 19,700,000
- ------------ --------------
95,200 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS (IDENTIFIED COST $95,200,000) ..................... 95,200,000
- ------------ --------------
$1,354,978 TOTAL INVESTMENTS (IDENTIFIED COST $1,275,151,284) (A) ............ 97.4% 1,261,181,157
============
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ..................... 2.6 34,102,304
--------------
NET ASSETS ......................................................... 100.0% $1,295,283,461
==============
<FN>
- ---------------
AMT Alternative Minimum Tax.
BIGS Bond Income Growth Security.
COPs Certificates of Participation.
ETM Escrow to Maturity.
GAINS Growth and Income Securities.
RITES Residual Interest Tax Exempt Security.
+ Current coupon rate for residual interest bonds. This rate resets
periodically as the auction rate on the related short-term securities
fluctuates.
* Variable or floating rate security. Coupon rate shown reflects current
rate.
** Currently zero coupon bond; will become interest bearing at a future
date.
*** Jointly issued within New York and New Jersey.
(a) The aggregate cost for federal income tax purposes is $1,275,151,284;
the aggregate gross unrealized appreciation is $50,180,149 and the
aggregate gross unrealized depreciation is $64,150,276 resulting in net
unrealized depreciation of $13,970,127.
</TABLE>
<TABLE>
<CAPTION>
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percent of Net Assets
December 31, 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama ............. 1.5% Maryland ...... 2.2% Ohio ........... 2.8%
Alaska .............. 0.8 Massachusetts . 7.2 Pennsylvania . 4.2
Arkansas ............ 0.9 Michigan ..... 1.7 Puerto Rico .. 1.3
California .......... 7.1 Minnesota .... 0.6 Tennessee ...... 1.1
Colorado ............ 0.2 Mississippi .. 1.6 Texas .......... 6.9
Connecticut ......... 2.3 Missouri ...... 1.4 Utah ........... 5.2
District of Columbia 0.2 Nebraska ...... 1.9 Virginia ....... 4.4
Florida ............. 4.3 Nevada ....... 1.8 Washington ... 3.0
Georgia ............. 2.8 New Hampshire . 0.9 Wisconsin ...... 1.5
Hawaii .............. 0.4 New Jersey .... 3.2 Joint Issuers . 0.8
------
Illinois ............ 3.0 New Mexico .... 1.8
Kentucky ............ 3.0 New York ...... 13.4
Maine ............... 0.5 North Carolina . 1.5 Total .......... 97.4%
- -----------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $1,275,151,284) ......... $1,261,181,157
Cash 809,715
Receivable for:
Interest ................................. 22,157,003
Investments sold ......................... 16,337,446
Shares of beneficial interest sold ...... 291,675
Prepaid expenses and other assets ........ 18,601
--------------
TOTAL ASSETS ........................... 1,300,795,597
--------------
LIABILITIES:
Payable for:
Dividends to shareholders ................ 3,173,713
Shares of beneficial interest repurchased 1,712,822
Investment management fee ................ 470,166
Accrued expenses .......................... 155,435
--------------
TOTAL LIABILITIES ...................... 5,512,136
--------------
NET ASSETS:
Paid-in-capital ........................... 1,308,744,189
Net unrealized depreciation ............... (13,970,127)
Accumulated undistributed net investment
income ................................... 226,001
Accumulated net realized gain ............. 283,398
--------------
NET ASSETS ............................. $1,295,283,461
==============
NET ASSET VALUE PER SHARE, 117,602,695
shares outstanding (unlimited shares
authorized of $.01 par value) ............ $11.01
==============
MAXIMUM OFFERING PRICE PER SHARE, (net
asset value plus 4.17% of net asset
value)* .................................. $11.47
==============
</TABLE>
* On sales of $25,000 or more the offering price is reduced
STATEMENT OF OPERATIONS
For the year ended December 31, 1994
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ...................... $ 93,701,738
---------------
EXPENSES
Investment management fee ........... 6,003,589
Transfer agent fees and expenses ... 515,675
Registration fees ................... 90,581
Shareholder reports and notices .... 67,379
Professional fees ................... 51,999
Trustees' fees and expenses ......... 28,022
Custodian fees ...................... 15,390
Other ............................... 39,129
---------------
TOTAL EXPENSES ..................... 6,811,764
---------------
NET INVESTMENT INCOME .............. 86,889,974
---------------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain ................... 317,254
Net change in unrealized
appreciation
. (174,483,958)
---------------
NET LOSS ON INVESTMENTS ............ (174,166,704)
---------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......... $ (87,276,730)
===============
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED DECEMBER ENDED DECEMBER
31, 1994 31, 1993
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................ $ 86,889,974 $ 91,474,661
Net realized gain ............................................ 317,254 8,324,995
Net change in unrealized appreciation ........................ (174,483,958) 54,678,906
----------------- -----------------
Net increase (decrease) ..................................... (87,276,730) 154,478,562
----------------- -----------------
Dividends and distributions to shareholders from:
Net investment income ........................................ (86,663,973) (91,474,661)
Net realized gain ............................................ (3,275,754) (701,643)
----------------- -----------------
Total ....................................................... (89,939,727) (92,176,304)
Net increase (decrease) from transactions in shares of
beneficial interest ........................................... (109,486,128) 196,214,972
----------------- -----------------
Total increase (decrease) ................................... (286,702,585) 258,517,230
NET ASSETS:
Beginning of period ............................................ 1,581,986,046 1,323,468,816
----------------- -----------------
END OF PERIOD (including undistributed net investment income of
$226,001 and $0, respectively) ................................. $1,295,283,461 $1,581,986,046
================= =================
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES --Dean Witter Tax-Exempt Securities
Trust (the "Fund") is registered under the Investment Company Act of 1940, as
amended (the "Act"), as a diversified, open-end management investment
company. The Fund was incorporated in Maryland in 1979 and reorganized as a
Massachusetts business trust on April 30, 1987. The Fund commenced operations
on March 27, 1980.
The following is a summary of significant accounting policies:
A. Valuation of Investments --Portfolio securities are valued for the Fund
by an outside independent pricing service approved by the Trustees. The
pricing service has informed the Fund that in valuing the Fund's portfolio
securities, it uses both a computerized matrix of tax-exempt securities and
evaluations by its staff, in each case based on information concerning market
transactions and quotations from dealers which reflect the bid side of the
market each day. The Fund's portfolio securities are thus valued by reference
to a combination of transactions and quotations for the same or other
securities believed to be comparable in quality, coupon, maturity, type of
issue, call provisions, trading characteristics and other features deemed to
be relevant. Short-term debt securities having a maturity date of more than
sixty days at time of purchase are valued on a mark-to-market basis until
sixty days prior to maturity and thereafter at amortized cost based on their
value on the 61st day. Short-term debt securities having a maturity date of
sixty days or less at the time of purchase are valued at amortized cost.
B. Accounting for Investments --Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined on the identified cost
method. The Fund amortizes premiums and discounts on securities purchased
over the life of the respective securities. Interest income is accrued daily
except where collection is not expected.
C. Federal Income Tax Status --It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. Dividends and Distributions to Shareholders --The Fund records
dividends and distributions to its shareholders on the record date. The
amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
2. TRANSACTIONS WITH INVESTMENT MANAGER --Pursuant to an Investment
Management Agreement with Dean Witter InterCapital Inc. (the "Investment
Manager"), the Fund pays its Investment Manager a management fee, accrued
daily and payable monthly, by applying the following annual rates to the
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
- -----------------------------------------------------------------------------
Fund's net assets determined as of the close of each business day: 0.50% to
the portion of daily net assets not exceeding $500 million; 0.425% to the
portion of daily net assets exceeding $500 million but not exceeding $750
million; 0.375% to the portion of daily net assets exceeding $750 million but
not exceeding $1 billion; 0.35% to the portion of daily net assets exceeding
$1 billion but not exceeding $1.25 billion; and 0.325% to the portion of
daily net assets exceeding $1.25 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Distributor has
informed the Fund that for the year ended December 31, 1994, it received
approximately $2,276,000 in commissions from the sale of the Fund's shares.
Such commissions are not an expense of the Fund; they are deducted from the
proceeds of the shares.
The Fund has suspended indefinitely the offering of its shares to new
investors. The Fund continues to offer its shares to current shareholders.
Automatic reinvestment of dividends and distributions, and other existing
shareholder services, are not affected.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES --The cost of
purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended December 31, 1994 aggregated
$215,524,646 and $380,333,733, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At December 31, 1994, the Fund had
transfer agent fees and expenses payable of approximately $48,000.
On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all independent Trustees of the Fund who will
have served as independent Trustees for at least five years at the time of
retirement. Benefits under this plan are based on years of service and
compensation during the last five years of service. Aggregate pension costs
for the year ended December 31, 1994, included in Trustees' fees and expenses
in the Statement of Operations amounted to $8,163. At December 31, 1994, the
Fund had an accrued pension liability of $46,887 which is included in accrued
expenses in the Statement of Assets and Liabilities.
4. SHARES OF BENEFICIAL INTEREST --Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER FOR THE YEAR ENDED DECEMBER 31,
31, 1994 1993
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold ......................... 7,312,606 $ 84,305,647 22,369,075 $ 273,876,016
Reinvestment of dividends and
distributions ............... 4,215,782 50,735,434 4,269,905 52,363,197
-------------- -------------- -------------- ---------------
11,528,388 135,041,081 26,638,980 326,239,213
Repurchased .................. (21,399,631) (244,527,209) (10,610,367) (130,024,241)
-------------- -------------- -------------- ---------------
Net increase (decrease) ..... (9,871,243) $(109,486,128) 16,028,613 $ 196,214,972
============== ============== ============== ===============
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period .... $ 12.41 $ 11.88 $ 11.65 $ 11.09 $ 11.28 $ 10.96 $ 10.45 $ 11.50 $ 10.79 $ 9.80
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
Net investment income ... 0.70 0.77 0.79 0.80 0.80 0.81 0.81 0.80 0.85 0.92
Net realized and
unrealized gain (loss)
on investments .......... (1.37) 0.54 0.23 0.56 (0.18) 0.32 0.51 (0.97) 1.21 1.07
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
Total from investment
operations .............. (0.67) 1.31 1.02 1.36 0.62 1.13 1.32 (0.17) 2.06 1.99
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
Less dividends and
distributions from:
Net investment income .. (0.70) (0.77) (0.79) (0.80) (0.81) (0.81) (0.81) (0.83) (0.87) (1.00)
Net realized gain ....... (0.03) (0.01) -- -- -- -- -- (0.05) (0.48) --
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
Total dividends and
distributions ........... (0.73) (0.78) (0.79) (0.80) (0.81) (0.81) (0.81) (0.88) (1.35) (1.00)
--------- -------- -------- -------- -------- -------- -------- --------- -------- --------
Net asset value, end of
period .................. $ 11.01 $ 12.41 $ 11.88 $ 11.65 $ 11.09 $ 11.28 $ 10.96 $ 10.45 $ 11.50 $ 10.79
========= ======== ======== ======== ======== ======== ======== ========= ======== ========
TOTAL INVESTMENT RETURN+ (5.55)% 11.23% 9.09% 12.71% 5.86% 10.61% 13.02% (1.44)% 20.17% 21.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) ........... $1,295 $1,582 $1,323 $1,145 $1,010 $1,033 $908 $896 $966 $489
Ratios to average net
assets:
Expenses ............... 0.47% 0.47% 0.49% 0.51% 0.51% 0.51% 0.54% 0.52% 0.56% 0.61%
Net investment income .. 6.02% 6.23% 6.74% 7.05% 7.25% 7.31% 7.51% 7.42% 7.51% 8.90%
Portfolio turnover rate 16% 13% 4% 10% 19% 13% 17% 37% 42% 116%
<FN>
- ---------------
+ Does not reflect the deduction of sales load.
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter Tax-Exempt Securities Trust
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of invest-ments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Dean Witter
Tax-Exempt Securities Trust (the "Fund") at December 31, 1994, the results of
its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights
for each of the ten years in the period then ended, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities owned at
December 31, 1994 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
February 13, 1995
1994 FEDERAL TAX NOTICE (unaudited)
During the year ended December 31, 1994, the Fund paid to shareholders
$0.696176 per share from net investment income. All of the Fund's dividends
from net investment income were exempt interest dividends, excludable from
gross income for Federal income tax purposes. For the year ended December 31,
1994, the Fund paid to shareholders $0.02611 per share from long-term capital
gains.
<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center -Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
TAX-EXEMPT
SECURITIES
TRUST
ANNUAL REPORT
DECEMBER 31, 1994
