<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST Two World Trade Center,
New York, New York 10048
LETTER TO THE SHAREHOLDERS July 31, 1997
DEAR SHAREHOLDER:
During the six-month period ended July 31, 1997, money market rates remained
stable, even following the 25-basis-point rate increase effected by the
Federal Reserve Board on March 25, 1997. We expect that this stability will
continue for the last half of the Trust's fiscal year. While the economy is
currently strong, based on indicators such as nonfarm payroll and retail
sales, the Federal Reserve Board seems content to sit on the sidelines since
there is no clear evidence of inflation at this time. However, the Fed can be
expected to take corrective action if they see inflation becoming an issue.
PORTFOLIO
As of July 31, 1997, Dean Witter U.S. Government Money Market Trust had
assets in excess of $885 million, with an average life of 74 days. The
Trust's annualized net yield for the six-month fiscal period ended July 31,
1997, was 4.36 percent, and its annualized yield for July was 4.50 percent.
On July 31, 1997, approximately 99 percent of the Trust's portfolio consisted
of federal agency obligations, with the remaining 1 percent invested in U.S.
Treasury bills. At the end of this fiscal period, more than 82 percent of the
Trust's assets were due to mature in less than four months, positioning the
portfolio for stability of value with a high degree of liquidity. We continue
to operate the Trust in a straightforward, conservative style without
"structured notes" or derivatives, which could fluctuate excessively with
changing interest rates.
LOOKING AHEAD
At this time we anticipate a moderate pace for economic activity in the
second half of 1997, with no major adverse surprises in the rate of
inflation. We believe that investment yields available to the Trust during
the next six months will not differ significantly from those in the first
half of 1997.
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
LETTER TO THE SHAREHOLDERS July 31, 1997, continued
We appreciate your ongoing support of Dean Witter U.S. Government Money
Market Trust and look forward to continuing to serve your investment needs
and objectives.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
RESULTS OF SPECIAL MEETING (unaudited)
* * *
On May 21, 1997, a special meeting of shareholders of Dean Witter U.S.
Government Money Market Trust was held for the purpose of voting on four
separate matters, the results of which are as follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE TRUST AND
DEAN WITTER INTERCAPITAL INC., IN CONNECTION WITH THE MERGER OF MORGAN
STANLEY GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:
<TABLE>
<CAPTION>
<S> <C>
For ....... 459,935,236
Against .. 13,475,960
Abstain .. 39,905,651
</TABLE>
(2) ELECTION OF TRUSTEES:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Michael Bozic John R. Haire Michael E. Nugent
For ............ 485,365,863 For ............ 485,062,572 For .............. 485,834,746
Withheld ....... 27,950,984 Withheld ....... 28,254,275 Withheld ......... 27,482,101
Charles A. Fiumefreddo Wayne E. Hedien Philip J. Purcell
For ............ 485,307,412 For ............ 485,703,822 For .............. 485,689,228
Withheld ....... 28,009,435 Withheld ....... 27,613,025 Withheld ......... 27,627,619
Edwin J. Garn Dr. Manuel H. Johnson John L. Schroeder
For ............ 485,489,880 For ............ 485,749,264 For .............. 485,466,124
Withheld ....... 27,826,967 Withheld ....... 27,567,583 Withheld ......... 27,850,723
</TABLE>
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN
CERTAIN OTHER INVESTMENT COMPANIES:
<TABLE>
<CAPTION>
<S> <C>
For ....... 360,732,223
Against .. 105,351,921
Abstain .. 47,232,703
</TABLE>
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE TRUST'S
INDEPENDENT ACCOUNTANTS:
<TABLE>
<CAPTION>
<S> <C>
For ....... 473,150,952
Against .. 7,124,625
Abstain .. 33,041,270
</TABLE>
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
PORTFOLIO OF INVESTMENTS July 31, 1997 (unaudited)
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD
AMOUNT IN AND ON DATE OF
THOUSANDS MATURITY DATE PURCHASE VALUE
- ----------- ---------------------------------------------------------------- ------------ --------------
<S> <C> <C> <C>
U.S. GOVERNMENTAGENCIES (99.2%)
Federal Farm Credit Bank
$134,430 08/01/97-12/02/97 .............................................. 5.32-5.78 % $132,975,580
Federal Home Loan Banks
365,050 08/07/97-03/12/98 .............................................. 5.29-5.78 360,165,435
Federal Home Loan Mortgage Corp.
93,000 08/01/97-01/02/98 .............................................. 5.48-5.75 92,383,593
Federal National Mortgage Assoc.
240,480 08/04/97-01/16/98 .............................................. 5.49-5.81 238,154,343
Student Loan Marketing Assoc.
40,000 09/22/97-09/30/97 .............................................. 5.51 39,665,904
Tennessee Valley Authority
15,000 09/11/97 ....................................................... 5.51 14,907,067
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(Amortized Cost $878,251,922)................................................. 878,251,922
--------------
U.S. GOVERNMENT OBLIGATION (1.1%)
U.S. Treasury Bill 11/13/97
10,000 (Amortized Cost $9,851,944) .................................... 5.33 9,851,944
--------------
REPURCHASE AGREEMENT (0.4%)
3,707 The Bank of New York due 08/01/97 (dated 07/31/97; proceeds $3,707,682;
collateralized by $790,475
Federal Home Loan Banks 0.00% due 08/22/97 valued at $787,788;
$1,399,173
Federal Home Loan Banks 5.68% due 09/11/98 valued at $1,428,362 and
$1,500,000 Federal National Mortgage Association 7.15% due 10/11/06
valued at $1,565,081 (Identified Cost $3,707,090) .............. 5.75 3,707,090
--------------
TOTAL INVESTMENTS
(Identified Cost $891,810,956)(a) ............................... 100.7 % 891,810,956
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS .................. (0.7) (5,934,205)
------------ --------------
NET ASSETS ..................................................... 100.0 % $885,876,751
============ ==============
</TABLE>
- ------------
(a) Cost is the same for federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $891,810,956) ....................................... $891,810,956
Cash .................................................................. 90,001
Receivable for shares of beneficial interest sold ..................... 282,785
Prepaid expenses and other assets ..................................... 166,964
--------------
TOTAL ASSETS ........................................................ 892,350,706
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased ........................... 5,956,730
Investment management fee ........................................... 346,854
Plan of distribution fee ............................................ 75,508
Accrued expenses and other payables ................................... 94,863
--------------
TOTAL LIABILITIES ................................................... 6,473,955
--------------
NET ASSETS .......................................................... $885,876,751
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital ....................................................... $885,894,332
Dividends in excess of net investment income .......................... (19,530)
Accumulated undistributed net realized gain ........................... 1,949
--------------
NET ASSETS .......................................................... $885,876,751
==============
NET ASSET VALUE PER SHARE,
885,894,332 shares outstanding (unlimited shares authorized of $.01
par value) ........................................................... $ 1.00
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended July 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME .................. $24,730,634
-------------
EXPENSES
Transfer agent fees and expenses 2,467,951
Investment management fee ........ 2,058,634
Plan of distribution fee ......... 415,545
Shareholder reports and notices . 75,852
Registration fees ................ 43,010
Professional fees ................ 23,916
Custodian fees ................... 22,771
Trustees' fees and expenses ..... 8,959
Other ............................ 8,078
-------------
TOTAL EXPENSES ................. 5,124,716
-------------
NET INVESTMENT INCOME .......... 19,605,918
NET REALIZED GAIN .............. 1,949
-------------
NET INCREASE ..................... $19,607,867
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 1997 JANUARY 31, 1997
- ------------------------------------------------------ --------------- ----------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 19,605,918 $ 39,392,462
Net realized gain ..................................... 1,949 --
--------------- ----------------
NET INCREASE ........................................ 19,607,867 39,392,462
Dividends from net investment income .................. (19,627,394) (39,391,745)
Net increase (decrease) from transactions in shares of
beneficial interest .................................. (41,188,343) 24,364,860
--------------- ----------------
NET INCREASE (DECREASE) ............................. (41,207,870) 24,365,577
NET ASSETS:
Beginning of period ................................... 927,084,621 902,719,044
--------------- ----------------
END OF PERIOD
(Including dividends in excess of net investment
income of $19,530 and undistributed net investment
income of $1,946, respectively) ..................... $885,876,751 $927,084,621
=============== ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1997 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter U.S. Government Money Market Trust (the "Trust") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Trust's investment
objectives are security of principal, high current income and liquidity. The
Trust was organized as a Massachusetts business trust on November 18, 1981
and commenced operations on February 17, 1982.
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 at amortized
cost, which approximates market value.
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. Premiums are amortized and discounts are accreted over the life of
the respective securities.
C. FEDERAL INCOME TAX STATUS -- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Trust records dividends
and distributions as of the close of each business day.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Trust pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Trust determined as of the close of
each business day: 0.50% to the portion of the daily net assets not exceeding
$500 million; 0.425% to the portion of the daily net assets exceeding $500
million but not exceeding $750 million; 0.375% to the portion of the daily
net assets exceeding $750 million but not exceeding $1 billion; 0.35% to the
portion of the daily net assets exceeding $1 billion but not exceeding $1.5
billion; 0.325% to the portion of the daily
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1997 (unaudited) continued
net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% to the
portion of the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.275% to the portion of the daily net assets exceeding $2.5 billion
but not exceeding $3 billion; and 0.25% to the portion of the daily net
assets exceeding $3 billion.
Under the terms of the Agreement, the Investment Manager maintains certain of
the Trust'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
Trust 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 Trust.
3. PLAN OF DISTRIBUTION
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Trust's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Trust, except for expenses
that the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor, Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and
Distributor, its affiliates and other selected broker-dealers under the Plan:
(1) compensation to, and expenses of, account executives of DWR's and other
selected broker-dealers' account executives and other employees, including
overhead and telephone expenses; (2) sales incentives and bonuses to sales
representatives and to marketing personnel in connection with promoting sales
of the Trust's shares; (3) expenses incurred in connection with promoting
sales of the Trust's shares; (4) preparing and distributing sales literature;
and (5) providing advertising and promotional activities, including direct
mail solicitation and television, radio, newspaper, magazine and other media
advertisements.
The Trust is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Trust's shares. The amount of each monthly reimbursement payment may in no
event exceed an amount equal to a payment at the annual rate of 0.15% of the
Trust's average daily net assets during the month. Expenses incurred by the
Distributor pursuant to the Plan in any fiscal year will not be reimbursed by
the Trust through payments accrued in any subsequent fiscal year. For the six
months ended July 31, 1997, the distribution fee was accrued at the annual
rate of 0.10%.
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS July 31, 1997 (unaudited) continued
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio
securities for the six months ended July 31, 1997 aggregated $6,384,940,916
and $6,449,537,287, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Trust's transfer agent. At July 31, 1997, the Trust had
transfer agent fees and expenses payable of approximately $16,000.
The Trust has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Trust 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 six
months ended July 31, 1997 included in Trustees' fees and expenses in the
Statement of Operations amounted to $1,350. At July 31, 1997, the Trust had
an accrued pension liability of $47,676 which is included in accrued expenses
in the Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JULY 31, 1997 JANUARY 31, 1997
--------------- ----------------
<S> <C> <C>
(unaudited)
Shares sold ................................ 970,443,063 1,937,077,890
Shares issued in reinvestment of dividends 19,552,014 39,246,217
--------------- ----------------
989,995,077 1,976,324,107
Shares repurchased ......................... (1,031,183,420) (1,951,959,247)
--------------- ----------------
Net increase (decrease) .................... (41,188,343) 24,364,860
=============== ================
</TABLE>
<PAGE>
DEAN WITTER U.S. GOVERNMENT MONEY MARKET TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period.
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED JANUARY 31,
MONTHS ENDED ----------------------------------------------------
JULY 31, 1997 1997 1996 1995 1994 1993
- ----------------------------------------- --------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(unaudited)
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- --------- --------- --------- --------- ---------
Net investment income..................... 0.020 0.043 0.049 0.034 0.023 0.029
Less dividends from net investment
income................................... (0.020) (0.043) (0.049) (0.034) (0.023) (0.029)
--------------- --------- --------- --------- --------- ---------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN+.................. 2.57%(1) 4.41% 5.00% 3.47% 2.28% 2.89%
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 1.14%(2) 1.11% 1.09% 1.08% 1.00% 0.93%
Net investment income..................... 4.36%(2) 4.29% 4.86% 3.38% 2.23% 2.87%
SUPPLEMENTAL DATA:
Net assets, end of period, in millions ... $886 $927 $903 $809 $818 $1,027
<FN>
- ------------
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
- ----------------------------------------------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- -----------------------------------------------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Jonathan R. Page
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- -----------------------------------------------------------------------------
Dean Witter Trust FSB
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
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
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
U.S. GOVERNMENT
MONEY MARKET
TRUST
SEMIANNUAL REPORT
JULY 31, 1997
</TABLE>
