<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS December 31, 1995
DEAR SHAREHOLDER:
Bonds rallied significantly during 1995. Progressive tightening of monetary
policy by the Federal Reserve Board over the 12 months through February 1995
slowed economic growth and caused bonds to advance throughout the year. The
trend toward lower long-term interest rates was aided by the central bank's
easing of short-term interest rates in July and December.
MUNICIPAL MARKET CONDITIONS
Long-term municipal bond yields declined from 6.97 percent in
December 1994 to 5.71 percent at the end of December 1995, as tracked by The
Bond Buyer Revenue Bond Index*. This 126 basis point drop in yield
corresponded to a 10 percent price increase for callable municipal bonds with
30-year maturities. Yields on 1-year municipal notes experienced a similar
move, declining from 4.95 to 3.60 percent. At the end of the year, the yield
pickup for extending maturity from 1-year (3.60%) to 30-years (5.71%) was 211
basis points.
Tax-exempt bond prices began the year by outperforming the prices of U.S.
Treasury bonds, but gradually deteriorated. The ratio of the Revenue Bond
Index yield to the 30-year U.S. Treasury bond yield moved from
89 percent in December 1994 to 84 percent by the end of February 1995. A
declining ratio means that municipal bond prices have been stronger than U.S.
Treasury prices. In the spring the municipal market began to discount the
risk of comprehensive changes in the tax code created by flat-tax rhetoric
from Washington. This caused the yield ratio to move above 90 percent during
the summer and end the year at 95 percent. Over the past 10 years, long
municipal yields have averaged 89 percent of U.S. Treasury yields.
- ------------
* 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 Investors
Service, Inc., and AA+ to A- by Standard & Poor's Corp.
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
LETTER TO THE SHAREHOLDERS December 31, 1995, continued
Despite a resurgence in new issue volume in the second half of 1995, the
municipal market continued to experience consolidation. Municipal
underwriting was down 25 percent through June 1995, but ended the year only 5
percent below 1994's level. This followed a 44 percent drop in volume for all
of 1994. Lower underwriting volume and diminished profitability caused
several major dealers to withdraw from the municipal business.
TAX REFORM
Flat-tax advocates have generated increased publicity for their proposals and
have influenced the municipal market since early 1995. Most tax-reform
discussions have been based on concepts containing broad assumptions and
lacking specific details. The various plans seek to simplify the tax process,
but raise questions about the fairness of changing from a progressive tax
structure. Flat-tax proposals call for the elimination of deductions of
mortgage interest, charitable contributions, property taxes, and state and
local income taxes. As politicians have focused more on tax reform as an
issue in the 1996 elections, media coverage has expanded from the financial
page to the front page. Municipal bonds have periodically come under
political pressure in the past. For example, prior to passage of major tax
reform legislation in 1986, municipal yields briefly exceeded taxable yields.
Flat-tax proposals would also affect municipal credits. If mortgage interest
and property tax deductions were eliminated, municipalities would experience
a decline in their property tax base. The loss of state and local income tax
deductions would increase the relative economic disadvantage that high-tax
states already face. The flat tax represents an attempt to shift tax
accountability from the federal level to local governments. Taxpayer
recognition of the extent of the changes under consideration may impede the
passage of comprehensive tax reform.
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
<TABLE>
<CAPTION>
GROWTH OF $10,000
DATE TOTAL LEHMAN MUNI BOND
INDEX
<S> <C> <C>
December 31, 1985 $ 9,600 $10,000
December 31, 1986 $11,537 $11,931
December 31, 1987 $11,370 $12,111
December 31, 1988 $12,851 $13,342
December 31, 1989 $14,214 $14,781
December 31, 1990 $15,046 $15,859
December 31, 1991 $16,958 $17,784
December 31, 1992 $18,500 $19,353
December 31, 1993 $20,577 $21,729
December 31, 1994 $19,435 $20,606
December 31, 1995 $22,811(3) $24,202
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS
17.37(1) 8.68(1) 9.04(1)
12.68(2) 7.79(2) 8.60(2)
_____Fund _____Lehman (4)
Past performance is not predictive of future returns.
<FN>
_____________________________________
(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, assuming a complete redemption on December 31, 1995.
(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
Index is unmanaged and should not be considered an investment.
</TABLE>
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
LETTER TO THE SHAREHOLDERS December 31, 1995, continued
PERFORMANCE
Dean Witter Tax Exempt Securities Trust's total return for the fiscal year
ended December 31, 1995 was 17.37 percent. The Fund's net asset value, increased
from $11.01 to $12.09 per share, after capital gains distribution of $0.11 per
share. Tax-free dividends totaling $0.67 per share were also paid during the
year.
Since inception (March 27, 1980) the Fund has provided shareholders with an
average annual total return of 10.07 percent. The accompanying chart
illustrates the performance of a $10,000 investment in the Fund for the 10
years ended December 31, 1995, versus the performance of a similar
hypothetical investment in the issues comprising the Lehman Brothers
Municipal Bond Index.
PORTFOLIO STRUCTURE
On December 31, 1995, the Fund's $1.3 billion in net assets was diversified
among 12 long-term municipal sectors and 121 credits. The three largest
sectors -- electric, water & sewer and transportation revenue bonds --
represented approximately 36 percent of the portfolio. Bonds callable in the
next four years were reduced from 26 to 16 percent of the portfolio. As a
result, call protection improved from 7 to 8 years on average. The average
maturity of the long-term portfolio moved from 18 to 20 years. Credit quality
was upgraded during 1995. Long-term holdings rated AA and AAA increased from
57 to 64 percent. The credit quality of the portfolio is illustrated on the
right.
(The chart below represents information which appears as a graphic in
the printed report)
A pie chart reflecting the credit quality of the portfolio as rated by
Moody's or Standard & Poors Credit Ratings on December 31, 1995.
CREDIT RATING PERCENT
- ------------- -------
Aaa or AA 40%
Aa or AA 24%
A or A 23%
Baa or BBB 8%
Not rated 5%
LOOKING AHEAD
The slower pace of economic growth in 1995 and the Federal Reserve Board's
latest interest rate moves have improved bond-market expectations. The
decreasing supply of new issues, combined with significant maturities and
calls for redemptions, should continue to be positive for the municipal
market. However, tax-reduction proposals are likely to continue to receive
publicity and cloud the outlook for tax-exempt bonds. With long-term
municipal securities yielding more than 90 percent of the yield on U.S.
Treasuries, the market has already begun the process of discounting the risk
that a flat tax might eventually become law.
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
LETTER TO THE SHAREHOLDERS December 31, 1995, continued
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, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (99.9%)
General Obligation (9.9%)
North Slope Borough, Alaska,
$ 3,900 Ser 1992 A (MBIA) .................................... 0.00 % 06/30/03 $ 2,737,176
5,000 Ser 1992 A Conv (MBIA) ............................... 5.90 06/30/03 5,378,950
15,000 Ser 1994 B (CGIC) .................................... 0.00 06/30/05 9,383,400
18,500 Ser 1995 A (MBIA) .................................... 0.00 06/30/06 10,932,205
4,000 Connecticut, College Savings 1989 Ser A ............... 0.00 07/01/08 2,143,840
10,000 Florida Board of Education, Capital Outlay Refg 1995
Ser A ................................................ 5.50 06/01/13 10,279,100
Massachusetts,
10,000 Refg 1993 Ser A ...................................... 5.50 02/01/11 10,178,300
8,000 1994 Ser C (FGIC) .................................... 6.75 11/01/12 9,072,080
4,000 Clark County, Nevada, Transportation Ser 1992 A (AMBAC) 6.50 06/01/17 4,666,800
New York City, New York,
12,000 1990 Ser D ........................................... 6.00 08/01/07 12,052,920
10,000 1990 Ser D ........................................... 6.00 08/01/08 10,028,100
5,000 1996 Refg Ser E ...................................... 5.50 02/15/08 4,857,600
10,000 Pennsylvania, First Ser 1995 (FGIC) ................... 5.50 05/01/12 10,279,100
7,500 Shelby County, Tennesee, Refg 1995 Ser A .............. 5.625 04/01/14 7,798,650
20,120 King County, Washington, Ltd Tax 1995 (MBIA) .......... 6.00 01/01/23 20,996,427
- ------------ ---------------
143,020 130,784,648
- ------------ ---------------
Educational Facilities Revenue (5.4%)
10,000 FSU Financial Assistance Inc, Florida, Impr & Refg Ser
1994 ................................................. 5.25 10/01/15 9,676,800
10,000 Indiana University, Student Fee Ser K (MBIA) .......... 5.875 08/01/20 10,369,800
7,000 Massachusetts Health & Educational Facilities
Authority,
Boston University Ser 1991 (MBIA) ................... 6.66 10/01/31 7,612,500
15,000 New Hampshire Higher Educational & Health Facilities
Authority,
Dartmouth College Ser 1993 .......................... 5.375 06/01/23 14,819,100
2,000 New Jersey Development Authority, The Seeing Eye Inc
1991 ................................................. 7.30 04/01/11 2,092,280
New York State Dormitory Authority, State University
5,000 Ser 1989 B ........................................... 0.00 05/15/02 3,586,100
20,000 Ser 1990 B ........................................... 7.00 05/15/16 21,694,800
2,000 Pennsylvania Higher Educational Facilities Authority,
University of Pennsylvania Ser 1987 ................. 6.625 01/01/17 2,040,740
- ------------ ---------------
71,000 71,892,120
- ------------ ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
Electric Revenue (13.6%)
$ 25,000 Salt River Project Agricultural Improvement & Power
District, Arizona, Refg 1993 Ser C .................. 5.50 % 01/01/10 $ 26,119,750
10,000 Sacramento Municipal Utility District, California, Refg
1994 Ser I (MBIA) .................................... 5.75 01/01/15 10,283,400
20,000 Southern California Public Power Authority,
Mead-Adelanto 1994 Ser A (AMBAC) .................... 5.15 07/01/15 19,902,600
10,000 Municipal Electric Authority of Georgia, Fifth
Crossover Ser ........................................ 6.50 01/01/17 11,290,400
15,000 Nebraska Public Power District, Power 1993 Ser C ...... 5.00 01/01/17 14,143,800
15,000 New York State Power Authority, Gen Purpose Ser CC .... 5.25 01/01/18 14,655,600
5,000 North Carolina Municipal Power Agency #1, Catawba Ser
1988 ................................................. 6.00 01/01/15 5,004,650
15,000 Puerto Rico Electric Power Authority, Power Ser O ..... 0.00 07/01/17 4,683,900
15,000 South Carolina Public Service Authority, 1995 Refg Ser
A (AMBAC) ............................................ 6.25 01/01/22 16,185,900
6,000 Austin, Texas, Combined Utilities Refg Ser 1993 A ..... 5.75 11/15/13 6,161,400
Intermountain Power Agency, Utah,
15,000 Refg 1985 Ser H ...................................... 6.00 07/01/21 15,001,650
5,000 Refg 1985 Ser I ...................................... 6.00 07/01/21 5,000,550
8,000 Refg 1993 Ser A ...................................... 5.00 07/01/23 7,414,880
8,000 Lewis County Public Utility District #1, Washington,
Cowlitz Falls Hydro Refg Ser 1993 ................... 5.50 10/01/13 7,910,000
15,000 Washington Public Power Supply System, Proj #2 Refg Ser
1994 A ............................................... 6.00 07/01/07 15,949,050
- ------------ ---------------
187,000 179,707,530
- ------------ ---------------
Hospital Revenue (8.5%)
10,000 Birmingham - Carraway Special Care Facilities Financing
Authority, Alabama Carraway Methodist Health Systems
Ser 1995 A (Connie Lee) .............................. 6.25 08/15/09 10,933,300
3,000 Baxter County, Arkansas, Baxter County Regional
Hospital Inc
Impr & Refg Ser 1992 ................................ 7.50 09/01/21 3,250,020
10,000 California Health Facilities Financing Authority,
Kaiser Permanente Ser 1985 .......................... 5.55 08/15/25 9,799,900
3,000 Colorado Springs, Colorado, Memorial Hospital Refg Ser
1995 (MBIA) .......................................... 6.00 12/15/24 3,151,620
6,000 Connecticut Health & Educational Facilities Authority,
Yale-New Haven Hospital Ser F (MBIA) ................ 7.10 07/01/25 6,673,320
Massachusetts Health & Educational Facilities
Authority,
1,500 Malden Hospital - FHA Insured Mtge Ser A ............. 5.00 08/01/16 1,350,120
10,000 New England Medical Center Ser G (MBIA) .............. 5.375 07/01/24 9,863,600
Rochester, Minnesota, Mayo Foundation/Mayo Medical
Center
7,000 Ser 1992 I ........................................... 5.75 11/15/21 7,099,540
3,700 Ser 1992 F ........................................... 6.25 11/15/21 3,908,532
15,000 Missouri Health & Educational Facilities Authority,
Barnes-Jewish Inc/Christian Health Services Ser 1993
A .................................................... 5.25 05/15/14 14,484,600
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
$ 6,000 New York State Medical Care Facilities Finance Agency,
Presbyterian Hospital - FHA Insured Mtge 1984 Ser A
Refg ................................................. 5.25 % 08/15/14 $ 5,874,000
10,000 Charlotte-Mecklenburg County Hospital Authority, North
Carolina, Ser 1992 ................................... 6.00 01/01/22 10,210,000
4,000 Cuyahoga County, Ohio, The Cleveland Clinic Foundation
Refg Ser 1988 A ...................................... 8.00 12/01/15 4,272,400
9,000 North Central Texas Health Facilities Development
Corporation,
University Medical Center Inc Ser 1987 .............. 7.75 04/01/17 9,368,460
7,000 Fairfax County Industrial Development Authority,
Virginia, Inova Health System Foundation Refg Ser
1993 A ............................................... 5.25 08/15/19 6,733,860
5,000 University of Virginia, Refg Ser E .................... 6.00 06/01/13 5,109,550
- ------------ ---------------
110,200 112,082,822
- ------------ ---------------
Industrial Development/Pollution Control Revenue (9.0%)
10,000 Jefferson County, Kentucky, Louisville Gas & Electric
Co 1993 Ser B ........................................ 5.625 08/15/19 10,076,900
1,490 Maryland Industrial Development Financing Authority,
Medical Waste Assocs LP 1989 Ser (AMT) .............. 8.75 11/15/10 1,490,000
7,000 Becker, Minnesota, Northern States Power Co Ser A 1989 6.80 04/01/07 7,532,210
18,000 Claiborne County, Mississippi, Middle South Energy Inc
Ser C ................................................ 9.875 12/01/14 20,659,140
10,000 Clark County, Nevada, Nevada Power Co Ser 1992 A (AMT)
(FGIC) ............................................... 6.70 06/01/22 10,782,500
10,000 Washoe County, Nevada, Sierra Pacific Power Co Ser 1987
(AMBAC) .............................................. 6.30 12/01/14 10,684,100
8,000 Alliance Airport Authority, Texas, AMR Corp Ser 1990
(AMT) ................................................ 7.50 12/01/29 8,609,760
20,000 Dallas-Fort Worth International Airport Facility
Improvement Corporation, Texas, American Airlines Inc
Ser 1995 ............................................. 6.00 11/01/14 19,946,600
Matagorda County Navigational District #1, Texas,
Central Power & Light Co
7,000 Collateralized Ser 1984 A ............................ 7.50 12/15/14 7,794,290
10,000 Ser 1986 (AMT) ....................................... 7.875 12/01/16 10,476,200
10,000 Weston, Wisconsin, Wisconsin Public Service Corp Refg
Ser 1993 A ........................................... 6.90 02/01/13 11,050,600
- ------------ ---------------
111,490 119,102,300
- ------------ ---------------
Mortgage Revenue - Multi-Family (2.1%)
2,060 Massachusetts Housing Finance Agency, Hsg Dev 1986 Ser
A (AMT) .............................................. 7.75 12/01/19 2,132,615
7,000 Michigan Housing Development Authority, Rental Ser A
(Bifurcated FSA) ..................................... 6.50 04/01/23 7,254,170
9,000 New Jersey Housing & Mortgage Finance Agency, 1995 Ser
A (AMBAC) ............................................ 6.05 11/01/20 9,191,700
New York City Housing Development Corporation, New
York,
4,585 Ruppert Proj - FHA Insured Sec 223F .................. 6.50 11/15/18 4,787,933
4,445 Stevenson Commons Proj - FHA Insured Sec 223F ........ 6.50 05/15/18 4,638,917
- ------------ ---------------
27,090 28,005,335
- ------------ ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
Mortgage Revenue - Single Family (6.5%)
$10,000 Alaska Housing Finance Corporation, Governmental 1995
Ser A (MBIA) ......................................... 5.875% 12/01/24 $10,054,800
2,440 California Housing Finance Agency, Home Cap Apprec 1983
Ser B ................................................ 0.00 08/01/15 334,231
12,100 Illinois Housing Development Authority, Residential
1991 Ser C (AMT) ..................................... 6.875 02/01/18 12,792,846
7,600 Nebraska Investment Finance Authority, GNMA-Backed 1990
Ser (AMT) ............................................ 7.631 09/10/30 8,208,532
4,010 North Carolina Housing Finance Agency, Ser Q (AMT) .... 8.00 03/01/18 4,303,813
7,450 Ohio Housing Finance Agency, GNMA-Backed 1990 Ser A
(AMT) ................................................ 6.903 03/01/31 7,848,128
Pennsylvania Housing Finance Agency,
8,000 Ser 1993-37 A ........................................ 5.45 10/01/17 7,722,640
10,000 Ser 1991-31 (AMT) .................................... 7.00 10/01/23 10,566,400
Tennessee Housing Development Agency, Mortgage Finance
4,000 1993 Ser A ........................................... 5.90 07/01/18 4,037,640
11,000 1993 Ser A ........................................... 5.95 07/01/28 11,055,440
8,620 Wisconsin Housing & Economic Development Authority,
Home Ownership 1991 Ser (AMT) ....................... 7.097 10/25/22 9,126,597
- ------------ ---------------
85,220 86,051,067
- ------------ ---------------
Public Facilities Revenue (3.7%)
10,000 Los Angeles Convention & Exhibition Center Authority,
California, 1993 Refg Ser A COPs (MBIA) ............. 5.375 08/15/18 9,966,900
5,000 Palm Beach County, Florida, Criminal Justice Ser 1990
(FGIC) ............................................... 6.00 06/01/13 5,150,000
10,000 Metropolitan Pier & Exposition Authority, Illinois,
McCormick Place Ser 1992 A .......................... 6.50 06/15/27 10,556,100
10,000 Michigan Building Authority, 1993 Refg Ser I (AMBAC) .. 5.30 10/01/16 9,936,900
6,000 Saint Louis Industrial Development Authority, Missouri,
Kiel Center Refg Ser 1992 (AMT) ..................... 7.75 12/01/13 6,405,060
5,000 Ohio Building Authority, Correctional 1985 Ser C BIGS . 0.00+ 10/01/05 6,403,400
- ------------ ---------------
46,000 48,418,360
- ------------ ---------------
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 9,972,000
4,950 Bridgeport RESCO Ser A ............................... 7.625 01/01/09 5,212,647
6,705 Broward County, Florida, SES Broward County South Ser
1984 ................................................. 7.95 12/01/08 7,587,512
7,000 Savannah Resource Recovery Development Authority,
Georgia, Savannah Energy Systems Co Ser 1992 ........ 6.30 12/01/06 7,465,220
10,000 Northeast Maryland Waste Disposal Authority, Montgomery
County Ser 1993 A (AMT) ............................. 6.30 07/01/16 10,413,300
3,000 Greater Detroit Resource Recovery Authority, Michigan,
Ser C ................................................ 9.25 12/13/08 3,098,130
9,000 Mercer County Improvement Authority, New Jersey, Refg
Ser A 1992 (AMT) (FGIC) ............................. 6.70 04/01/13 9,476,190
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
$ 9,000 Union County Utilities Authority, New Jersey, 1991 Ser
A (AMT) .............................................. 7.20 % 06/15/14 $ 9,621,990
10,000 Hempstead Industrial Development Agency, New York, 1985
American REF-FUEL Co of Hempstead ................... 7.40 12/01/10 10,413,400
6,000 New York State Environmental Facilities Corporation,
Huntington 1989 Ser A (AMT) ......................... 7.50 10/01/12 6,389,760
5,000 Onondaga County Resource Recovery Agency, New York,
1992 Ser (AMT) ....................................... 6.875 05/01/06 5,170,600
5,000 Fairfax County Economic Development Authority,
Virginia, Ogden Martin Systems of Fairfax Inc Ser
1988 A (AMT) ......................................... 7.75 02/01/11 5,502,300
- ------------ ---------------
84,655 90,323,049
- ------------ ---------------
Transportation Facilities Revenue (10.8%)
Mid-Bay Bridge Authority, Florida,
8,965 Sr Lien Crossover Refg Ser 1993 A .................... 6.00 10/01/13 9,136,321
2,500 Jr Lien Advance Refg Ser 1993 D ...................... 6.125 10/01/22 2,522,550
10,000 Atlanta, Georgia, Airport Ser 1990 (AMT) .............. 6.25 01/01/21 10,395,800
8,100 Metropolitan Atlanta Rapid Transit Authority, Georgia,
Sales Tax
Refg Ser K .......................................... 7.25 07/01/10 8,779,185
5,000 Hawaii, Airports Second Ser 1991 (AMT) ................ 7.00 07/01/18 5,436,250
Kentucky Turnpike Authority,
9,000 Economic Development Road Refg Ser 1995 (AMBAC) ...... 6.50 07/01/08 10,316,340
30,000 Resource Recovery Road Refg 1987 Ser A ............... 5.00 07/01/08 29,862,000
11,000 New Jersey Highway Authority, Sr Parkway Refg 1992 Ser 6.25 01/01/14 11,726,220
6,595 Albuquerque, New Mexico Airport Refg Ser 1997
(AMT)(AMBAC) (WI) .................................... 6.375 07/01/15 6,916,374
7,000 Ohio Turnpike Commission, 1994 Ser A .................. 5.75 02/15/24 7,123,130
Pennsylvania Turnpike Commission,
5,000 Ser L of 1991 (MBIA) ................................. 6.00 06/01/15 5,193,600
5,000 Ser A of 1986 ........................................ 6.00 12/01/17 5,025,050
10,000 Puerto Rico Highway & Transportation Authority, Refg
Ser X ................................................ 5.50 07/01/15 10,095,600
10,000 Texas Turnpike Authority, Dallas North
Tollway/President George Bush Turnpike Refg Ser 1995
(FGIC) (WI) .......................................... 5.25 01/01/23 9,872,000
4,000 Virginia Transportation Board, US Route 58 Corridor Ser
1993 B ............................................... 5.625 05/15/13 4,094,840
7,000 Port of Seattle, Washington, Ser 1992 B (AMT) ......... 6.00 11/01/17 7,077,490
- ------------ ---------------
139,160 143,572,750
- ------------ ---------------
Water & Sewer Revenue (11.4%)
10,000 Birmingham Water Works & Sewer Board, Alabama, Ser 1994 5.50 01/01/20 10,061,100
10,000 Phoenix Civic Improvement Corporation, Arizona, Jr Lien
Water Ser 1994 ....................................... 5.45 07/01/19 10,000,000
10,000 California Department of Water Resources, Central
Valley Refg Ser L .................................... 5.50 12/01/23 9,900,900
5,000 Central Coast Water Authority, California, Ser 1992
(AMBAC) .............................................. 6.60 10/01/22 5,482,700
19,750 East Bay Municipal Utility District, California, Water
Refg Ser 1993 (MBIA) ................................. 5.00 06/01/21 19,060,528
10,000 Los Angeles, California, Wastewater Ser 1994-A (MBIA) . 5.875 06/01/24 10,326,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
$ 10,000 Dade County, Florida, Water & Sewer Ser 1995 (FGIC) ... 5.50 % 10/01/25 $ 10,068,000
15,000 Chicago, Illinois, Wastewater Ser 1995 (FGIC) ......... 5.125 01/01/25 14,505,450
Massachusetts Water Resources Authority,
10,000 1993 Ser C ........................................... 5.25 12/01/15 9,938,500
10,000 Refg 1992 Ser B ...................................... 5.50 11/01/15 9,892,100
4,000 Detroit, Michigan, Sewage Refg Ser 1993-A (FGIC) ...... 5.70 07/01/13 4,123,080
8,500 New York City Municipal Water Finance Authority, New
York, 1994 Ser B ..................................... 5.30 06/15/06 8,696,605
Philadelphia, Pennsylvania, Water & Wastewater
10,000 Ser 1993 (CGIC) ...................................... 5.50 06/15/15 10,007,000
5,000 Ser 1995 (MBIA) ...................................... 5.60 08/01/18 5,046,400
15,000 Upper Occoquan Sewerage Authority, Virginia, Regl
Sewerage Ser 1995 A
(MBIA) (WI) ......................................... 5.00 07/01/25 14,332,350
- ------------ ---------------
152,250 151,440,713
- ------------ ---------------
Other Revenue (2.9%)
3,500 Denver, Colorado, Excise Tax Ser 1985 A ............... 5.00 11/01/08 3,504,620
New York Local Government Assistance Corporation,
9,000 Ser 1993 C Refg ...................................... 5.375 04/01/14 8,870,580
11,000 Ser 1994 A ........................................... 5.50 04/01/17 11,263,450
10,000 Ser 1995 A ........................................... 6.00 04/01/24 10,483,000
5,000 Houston, Texas, Sr Lien Hotel Occupancy Tax Refg Ser
1995 (FSA) ........................................... 5.50 07/01/11 5,079,750
- ------------ ---------------
38,500 39,201,400
- ------------ ---------------
Refunded (9.3%)
9,000 Los Angeles Convention & Exhibition Center Authority,
California, Ser 1985 COPs ........................... 9.00 12/01/05++ 12,125,790
2,500 Mid-Bay Bridge Authority, Florida, Ser 1991 A
(Crossover) .......................................... 6.875 10/01/22 2,962,525
8,500 Albuquerque, New Mexico, Joint Water & Sewer 1986 Ser A 6.00 07/01/00++ 9,129,340
14,000 New York State Dormitory Authority, Suffolk County
Judicial
Ser 1986 (ETM) ...................................... 7.375 07/01/16 17,007,620
10,000 Ohio Building Authority, Correctional 1986 Ser A ...... 7.35 08/01/99++ 11,254,000
25,000 Intermountain Power Agency, Utah, Refg 1985 Ser H
(GAINS) .............................................. 0.00 ++ 07/01/03++ 23,281,000
5,000 Salt Lake City, Utah, IHC Hospital Inc Ser of 1983
(ETM) ................................................ 5.00 06/01/15 4,842,800
10,000 Fairfax County, Virginia, Sewer Ser A (AMBAC) ......... 7.00 11/15/99++ 11,207,900
28,000 Fairfax County Industrial Development Authority,
Virginia,
Fairfax Hospital System Inc/Inova Health Ser 1991 ... 6.801 08/15/01++ 31,899,280
- ------------ ---------------
112,000 123,710,255
- ------------ ---------------
1,307,585 TOTAL MUNICIPAL BONDS (Identified Cost $1,220,477,089) .......................... 1,324,292,349
- ------------ ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS COUPON RATE MATURITY DATE VALUE
- ------------ ------------------------------------------------------- ----------- ------------- ---------------
<C> <S> <C> <C> <C>
SHORT-TERM MUNICIPAL OBLIGATIONS (1.3%)
$ 2,500 Illinois Health Facilities Authority, Resurrection
Health Care Ser 1993 (Demand 01/02/96) .............. 6.05*% 05/01/11 $ 2,500,000
5,000 Guadalupe-Blanco River Authority, Texas, Central Power
& Light Co Refg Ser 1995 (Demand 01/02/96) .......... 5.90* 11/01/15 5,000,000
9,800 Gulf Coast Waste Disposal Authority, Texas, Amoco Oil
Co Ser 1992 (Demand 01/02/96) ....................... 5.90* 10/01/17 9,800,000
- ------------ ---------------
17,300 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS (Identified Cost $17,300,000) ............ 17,300,000
- ------------ ---------------
$1,324,885 TOTAL INVESTMENTS (Identified Cost $1,237,777,089) (a) ............ 101.2 % 1,341,592,349
============
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS .................... (1.2 ) (16,283,848)
------- ---------------
NET ASSETS ........................................................ 100.0 % $1,325,308,501
======= ===============
</TABLE>
- ------------
AMT Alternative Minimum Tax.
BIGS Bond Income Growth Security.
COPs Certificates of Participation.
ETM Escrowed to Maturity.
GAINS Growth and Income Security.
WI Security purchased on a when issued basis.
+ Currently a zero coupon bond; will convert to 9.75% on October 1,
1996.
++ Currently a zero coupon bond; will convert to 10.00% on July 1,
2000.
++ Prerefunded to call date shown.
* Current coupon of variable rate security.
(a) The aggregate cost for federal income tax purposes is
$1,237,777,089; the aggregate gross unrealized appreciation is
$105,926,422 and the aggregate gross unrealized depreciation is
$2,111,162, resulting in net unrealized appreciation of
$103,815,260.
Bond Insurance:
- ---------------
AMBAC AMBAC Indemnity Corporation.
CGIC Capital Guaranty Insurance Company.
Connie Lee Connie Lee Insurance Company.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
PORTFOLIO OF INVESTMENTS December 31, 1995, continued
Geographic Summary of Investments
Based on Market Value as a Percent of Net Assets
December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Alabama ....... 1.6%
Alaska ........ 2.9
Arizona ....... 2.7
Arkansas ...... 0.2
California .... 8.1
Colorado ...... 0.5
Connecticut .. 1.8
Florida ....... 4.3
Georgia ....... 2.9
Hawaii ........ 0.4
Illinois ...... 3.0%
Indiana ....... 0.8
Kentucky ...... 3.8
Maryland ...... 0.9
Massachusetts 4.5
Michigan ...... 1.8
Minnesota ..... 1.4
Mississippi .. 1.6
Missouri ...... 1.6
Nebraska ...... 1.7
Nevada ........ 2.0%
New Hampshire 1.1
New Jersey .... 3.2
New Mexico .... 1.2
New York ...... 12.1
North Carolina 1.5
Ohio .......... 2.8
Pennsylvania . 4.2
Puerto Rico .. 1.1
South Carolina 1.2
Tennessee ..... 1.7%
Texas ......... 7.0
Utah .......... 4.2
Virginia ...... 6.0
Washington .... 3.9
Wisconsin ..... 1.5
-------
Total ......... 101.2%
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $1,237,777,089) ....... $1,341,592,349
Cash ..................................... 2,129,087
Receivable for:
Interest ............................... 20,070,485
Shares of beneficial interest sold .... 238,429
Prepaid expenses ......................... 27,920
--------------
TOTAL ASSETS ........................... 1,364,058,270
--------------
LIABILITIES:
Payable for:
Investments purchased .................. 30,521,741
Dividends and distributions ............ 6,765,089
Shares of beneficial interest
repurchased ........................... 817,062
Investment management fee .............. 476,646
Accrued expenses ......................... 169,231
--------------
TOTAL LIABILITIES ...................... 38,749,769
--------------
NET ASSETS:
Paid-in-capital .......................... 1,215,536,596
Net unrealized appreciation .............. 103,815,260
Accumulated undistributed net realized
gain .................................... 5,578,332
Accumulated undistributed net investment
income .................................. 378,313
--------------
NET ASSETS ............................. $1,325,308,501
==============
NET ASSET VALUE PER SHARE,
109,609,420 shares outstanding
(unlimited shares authorized of
$.01 par value) ......................... $ 12.09
==============
MAXIMUM OFFERING PRICE PER SHARE
(net asset value plus 4.17% of net asset
value)* ................................. $ 12.59
==============
</TABLE>
- ------------
* On sales of $25,000 or more, the offering price is reduced.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $ 82,466,837
-------------
EXPENSES
Investment management fee ............. 5,608,466
Transfer agent fees and expenses ..... 474,485
Shareholder reports and notices ...... 73,205
Professional fees ..................... 64,387
Custodian fees ........................ 63,091
Registration fees ..................... 39,052
Trustees' fees and expenses ........... 26,709
Other ................................. 44,656
-------------
TOTAL EXPENSES BEFORE EXPENSE
OFFSET ............................... 6,394,051
LESS: EXPENSE OFFSET ................ (62,815)
-------------
TOTAL EXPENSES AFTER EXPENSE OFFSET 6,331,236
-------------
NET INVESTMENT INCOME ............... 76,135,601
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain ..................... 17,721,238
Net change in unrealized depreciation 117,785,387
-------------
NET GAIN ............................ 135,506,625
-------------
NET INCREASE .......................... $211,642,226
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
- ------------------------------------------------------ ----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 76,135,601 $ 86,889,974
Net realized gain ..................................... 17,721,238 317,254
Net change in unrealized appreciation/depreciation ... 117,785,387 (174,483,958)
----------------- -----------------
NET INCREASE (DECREASE) ............................. 211,642,226 (87,276,730)
----------------- -----------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income ................................. (75,983,289) (86,663,973)
Net realized gain ..................................... (12,426,304) (3,275,754)
----------------- -----------------
TOTAL ............................................... (88,409,593) (89,939,727)
----------------- -----------------
Net decrease from transactions in shares of beneficial
interest ............................................. (93,207,593) (109,486,128)
----------------- -----------------
TOTAL INCREASE (DECREASE) ........................... 30,025,040 (286,702,585)
NET ASSETS:
Beginning of period ................................... 1,295,283,461 1,581,986,046
----------------- -----------------
END OF PERIOD
(Including undistributed net investment income of
$378,313 and $226,001, respectively) ................. $1,325,308,501 $1,295,283,461
================= =================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Tax-Exempt Securities Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to provide
a high level of current income which is exempt from federal income tax,
consistent with the preservation of capital. The Fund was incorporated in
Maryland in 1979, commenced operations on March 27, 1980 and reorganized as a
Massachusetts business trust on April 30, 1987.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates. 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 by the identified cost
method. The Fund amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily.
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
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995, continued
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. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays a management fee, accrued
daily and payable monthly, by applying the following annual rates to the
Fund's net assets determined as of the close of each business day: 0.50% to
the portion of average daily net assets not exceeding $500 million; 0.425% to
the portion of average daily net assets exceeding $500 million but not
exceeding $750 million; 0.375% to the portion of average daily net assets
exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of
average daily net assets exceeding $1 billion but not exceeding $1.25
billion; and 0.325% to the portion of average 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.
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, 1995
aggregated $277,176,837 and $258,806,176, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Fund's transfer agent. At December 31, 1995, the Fund had transfer agent fees
and expenses payable of approximately $57,400.
The Fund has 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
<PAGE>
DEAN WITTER TAX-EXEMPT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS December 31, 1995, continued
years of service. Aggregate pension costs for the year ended December 31,
1995 included in Trustees' fees and expenses in the Statement of Operations
amounted to $8,161. At December 31, 1995, the Fund had an accrued pension
liability of $53,592 which is included in accrued expenses in the Statement
of Assets and Liabilities.
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, 1995, it received
approximately $972,000 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.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold ........................................ 3,469,058 $ 40,446,608 7,312,606 $ 84,305,647
Reinvestment of dividends and distributions 4,260,271 50,182,467 4,215,782 50,735,434
-------------- --------------- -------------- ---------------
7,729,329 90,629,075 11,528,388 135,041,081
Repurchased ................................. (15,722,604) (183,836,668) (21,399,631) (244,527,209)
-------------- --------------- -------------- ---------------
Net decrease ................................ (7,993,275) $ (93,207,593) (9,871,243) $(109,486,128)
============== =============== ============== ===============
</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
- --------------------------------------- ----------------------------------------
1995 1994 1993 1992
- --------------------------------------- -------- --------- -------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $ 11.01 $ 12.41 $ 11.88 $ 11.65
-------- --------- -------- ---------
Net investment income .................. 0.67 0.70 0.77 0.79
Net realized and unrealized gain (loss) 1.19 (1.37) 0.54 0.23
-------- --------- -------- ---------
Total from investment operations ...... 1.86 (0.67) 1.31 1.02
-------- --------- -------- ---------
Less dividends and distributions from:
Net investment income ................ (0.67) (0.70) (0.77) (0.79)
Net realized gain .................... (0.11) (0.03) (0.01) --
-------- --------- -------- ---------
Total dividends and distributions ..... (0.78) (0.73) (0.78) (0.79)
-------- --------- -------- ---------
Net asset value, end of period ......... $ 12.09 $11.01 $ 12.41 $11.88
======== ========= ======== =========
TOTAL INVESTMENT RETURN+ ............... 17.37 % (5.55)% 11.23 % 9.09 %
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................... 0.48% 0.47 % 0.47 % 0.49 %
Net investment income .................. 5.76% 6.02 % 6.23 % 6.74 %
SUPPLEMENTAL DATA:
Net assets, end of period, in millions $ 1,325 $1,295 $ 1,582 $1,323
Portfolio turnover rate ................ 21 % 16 % 13 % 4 %
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
- ---------------------------------------
1991 1990 1989 1988 1987 1986
- --------------------------------------- -------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $ 11.09 $ 11.28 $ 10.96 $ 10.45 $ 11.50 $ 10.79
-------- --------- -------- -------- --------- --------
Net investment income .................. 0.80 0.80 0.81 0.81 0.80 0.85
Net realized and unrealized gain (loss) 0.56 (0.18) 0.32 0.51 (0.97) 1.21
-------- --------- -------- -------- --------- --------
Total from investment operations ...... 1.36 0.62 1.13 1.32 (0.17) 2.06
-------- --------- -------- -------- --------- --------
Less dividends and distributions from:
Net investment income ................ (0.80) (0.81) (0.81) (0.81) (0.83) (0.87)
Net realized gain .................... -- -- -- -- (0.05) (0.48)
-------- --------- -------- -------- --------- --------
Total dividends and distributions ..... (0.80) (0.81) (0.81) (0.81) (0.88) (1.35)
-------- --------- -------- -------- --------- --------
Net asset value, end of period ......... $ 11.65 $11.09 $ 11.28 $ 10.96 $10.45 $ 11.50
======== ========= ======== ======== ========= ========
TOTAL INVESTMENT RETURN+ ............... 12.71 % 5.86 % 10.61 % 13.02 % (1.44)% 20.17 %
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................... 0.51 % 0.51 % 0.51 % 0.54 % 0.52 % 0.56 %
Net investment income .................. 7.05 % 7.25 % 7.31 % 7.51 % 7.42 % 7.51 %
SUPPLEMENTAL DATA:
Net assets, end of period, in millions $ 1,145 $1,010 $ 1,033 $ 908 $ 896 $ 966
Portfolio turnover rate ................ 10 % 19 % 13 % 17 % 37 % 42 %
<FN>
- ------------
+ Does not reflect the deduction of sales load.
SEE NOTES TO FINANCIAL STATEMENTS
</TABLE>
<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 investments, 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, 1995, 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 at
December 31, 1995 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 7, 1996
1995 FEDERAL TAX NOTICE (unaudited)
During the year ended December 31, 1995, the Fund paid to the shareholders
$0.67 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, 1995, the Fund paid to shareholders $0.11 per share from long-term
capital gains.
<PAGE>
TRUSTEES
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, 1995
