<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
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Stocks, buoyed by low interest rates and flat inflation, gained 10.10
percent in 1993, as measured by the Standard & Poor's Composite Index of 500
Stocks (S&P 500). The overall economic recovery picked up some steam toward year
end, driven by accelerating industrial production, stronger consumer confidence
and lower unemployment. We anticipate a low-inflation, low-interest rate
environment will continue to benefit the stock market in 1994. By most
historical measures of interest rates and inflation, equities are currently as
much as 20 to 50 percent undervalued.
As for the bond markets, intermediate-and long-term rates were pressured
higher in the fourth quarter by renewed economic momentum. But while many
economic indicators are up, wage gains are at a low 2.3 percent and commodity
prices are down sharply. What's more short-term money market rates have held
steady since October, indicating that the business demand for credit remains
manageable, if not subdued. We suspect that the economic recovery may slow by
the second half of 1994 and that inflation will run about 2 to 3 percent.
CAPITAL GROWTH PORTFOLIO
The Capital Growth Portfolio had net assets of $50.3 million on December 31,
1993. For the fiscal year, the Portfolio's total return was -6.99 percent. The
reason for this underperformance was a combination of the economic recession and
the Portfolio's stock screening process. In an attempt to improve performance,
we have slightly modified the stock-screening process to qualify a broader list
of securities so that, going forward, the Portfolio will consist of more
industries and more stocks, all of which we are confident will be consistent
growers.
At year end, the Portfolio owned 44 stocks spread among 29 industries,
versus 34 stocks representing 23 industries prior to the modification. Additions
to the portfolio include: Federal Signal, Genuine Parts, W.W. Grainger, Nalco
Chemical, Thermo Electron, Circus Circus and Cintas.
Looking to the future, we believe that the changes made during the year will
enhance performance both on a relative and an absolute basis. In fact,
performance did improve in the fourth quarter of 1993 as the Portfolio produced
a total return of 5.81 percent versus 2.35 percent for the S&P 500. We believe
the modifications made to the Portfolio's stock-screening process were largely
responsible. The chart at right illustrates the growth of a $10,000 investment
in the Portfolio from inception (March 1, 1991) through the fiscal year ended
December 31, 1993, versus a similar investment in the issues that comprise the
Standard & Poor's 500 Index.
[ART]
DIVIDEND GROWTH PORTFOLIO
For the fiscal year, the Dividend Growth Portfolio provided a total return
of 14.34 percent. While the climate for common stocks in general was favorable,
the Portfolio's outperformance of the broad market index was largely
attributable to the proprietary screening process used in selecting individual
stocks for the Portfolio.
The Portfolio's net assets totaled $483.1 million on December 31, 1993, an
increase of more than $290 million from the start of the year. Five new common
stock positions were added to the Portfolio during the year: Abbott
Laboratories, General Motors, Philip Morris, Raytheon and U.S. West. At year
end, the Portfolio consisted of 46 equity issues spread among 30 different
industry groups, as well as 6 U.S. Treasury bond and note issues. The chart
below illustrates the growth of a $10,000 investment in the Portfolio from
inception (March 1, 1990) through the fiscal year ended December 31, 1993,
versus a similar investment in the issues that comprise the Standard & Poor's
500 Index.
<PAGE>
[ART]
EQUITY PORTFOLIO
The Equity Portfolio produced a total return of 19.72 percent for the fiscal
year ended December 31, 1993. The portfolio benefited from a focus on
automobiles, housing, technology, media, industrial and transportation stocks.
Net assets grew 136 percent to $183 million as of December 31, 1993.
At year end, the Portfolio's holdings were tilted toward cyclical growth
issues. We expect the current economic cycle will continue to be industrially
led, rather than consumer led. Increased global competition should continue to
restrain wage inflation in the industrialized countries and maintain the focus
on productivity improvements. Thus, the Portfolio remains focused on
productivity-enhancement companies with the potential for superior earnings
growth in the technology and health care management sectors. The Portfolio is
also overweighted in media/telecommunication companies that should benefit from
increased economies of scale as the local and long distance telephone companies
and cable companies consolidate. The Portfolio remains heavily weighted in
sectors that benefit from low interest rates, such as housing-related, and in
consumer cyclicals that have gained market share because of their international
cost advantages, such as automobiles. The chart on the following page
illustrates the growth of a $10,000 investment in the Portfolio from inception
(March 9, 1984) through the fiscal year ended December 31, 1993, versus a
similar investment in the issues that comprise the Standard & Poor's 500 Index.
While we are expecting 1994 real gross domestic product (GDP) growth of 3
percent, we believe inflation will remain subdued at 3 percent.
[ART]
EUROPEAN GROWTH PORTFOLIO
Reflecting strong regional gains, the European Growth Portfolio had a solid
year, with a total return of 40.88 percent.
The Portfolio has a substantial portion of its assets invested in Europe's
peripheral nations, which are benefiting from more stimulatory money policies
and weaker currencies than elsewhere in the region. At year end, the Portfolio
had 32 percent of its net assets invested in the UK, 11 percent invested in
Scandinavia and 11 percent invested in Italy and Spain. The balance was split
primarily among Germany, France, Switzerland and Holland.
On the continent, the Portfolio is focused on interest rate-sensitive
industries (banks, property/ casualty and reinsurers) and companies with
inherently attractive business characteristics or strong management. These
include telecommunications/broadcasting and discount retailers. There is a
significant emphasis on the relatively undervalued medium-and
smaller-capitalized segment of the market. The UK portfolio is somewhat more
diversified and geared toward a consumer-driven economic recovery. The chart at
right illustrates the growth of a $10,000 investment in the Portfolio from
inception (March 1, 1991) through the fiscal year ended December 31, 1993,
versus a similar investment in the issues that comprise the Standard & Poor's
500 Index.
[ART]
HIGH YIELD PORTFOLIO
Over the fiscal year ended December 31, 1993, the High Yield Portfolio
benefited from the favorable high-yield market environment, posting a strong
total return of 24.08 percent.
Driving the market once again has been the overall decline in interest
rates, as well as the substantial improvement in corporate credit quality over
the past few years, a result of both the economic recovery and efforts by
corporations to deleverage and refinance debt at today's lower rates. Looking
ahead to 1994, we expect continued slow economic growth along with subdued
inflation and a low interest rate environment. This bodes well for the
high-yield bond market. In light of this positive outlook, the Portfolio enters
1994 positioned for continued strong performance in the market, and plans to
remain nearly fully invested with a continued emphasis on issues that should
benefit from the improving economy; quality ratings are expected to be in
<PAGE>
the mid-B category as measured by Moody's Investors Service, Inc. or Standard &
Poor's Corp. The chart below illustrates the growth of a $10,000 investment in
the Portfolio from inception (March 9, 1984) through the fiscal year ended
December 31, 1993, versus a similar investment in the issues that comprise the
Lehman Brothers Mutual Fund Corporate/High Yield Index (the Lehman Brothers
figure is for the period from March 31, 1984 through December 31, 1993).
[ART]
MANAGED ASSETS PORTFOLIO
The Managed Assets Portfolio finished 1993 with a total return of 10.38
percent. The Portfolio surpassed the performance of the S&P 500 despite
maintaining a money-market position that averaged 37 percent of net assets.
The Portfolio began the year with 55 percent of its assets invested in
equities, 15 percent in longer-term bonds and 30 percent in money-market
instruments. By the end of March, a strong market reduced the S&P 500 yield to
2.74 percent. This lower yield available from stocks, combined with an end to
monetary easing by the Federal Reserve Board, led the Portfolio to reduce equity
exposure to 45 percent and increase money markets to 40 percent. The S&P 500
traded down immediately after this allocation change and stayed at lower levels
throughout the spring and into the summer.
In mid-August, with the S&P 500 still below the March 31 level, a report of
lower inflation sparked rallies in both the stock and bond markets. The
Portfolio anticipated these rallies by returning to the allocation it maintained
as the year began. By mid-September, the market rallies had reduced the yields
on the S&P 500 and the 30-year U.S. Treasury bond to 2.71 percent and 5.99
percent, respectively. The Portfolio responded by reducing its equity allocation
to 50 percent of net assets and its fixed-income allocation to 10 percent, while
increasing money-market exposure to 40 percent. The fourth quarter of 1993 saw
stocks move modestly higher, with the S&P 500 closing at 466.45 with a yield of
2.68 percent. Bond prices dropped sharply at this time, with interest rates on
the 30-year U.S. Treasury bond rising to 6.35 percent. The chart on the
following page illustrates the growth of a $10,000 investment in the Fund from
inception (March 1, 1987) through the fiscal year ended December 31, 1993,
versus a similar investment in the issues that comprise the Standard & Poor's
500 Index.
On December 31, 1993, the Portfolio held 61 common stocks, representing 12
major economic sectors. The Portfolio also held 11 fixed-income issues with an
average coupon of 7.79 percent, an average maturity of 26.5 years and an average
quality rating of AA+.
[ART]
MONEY MARKET PORTFOLIO
The Money Market Portfolio's net assets exceeded $129 million on December
31, 1993. Its yield for the fiscal year was 2.75 percent; on December 31, 1993,
the Portfolio's annualized 7-day yield was 2.78 percent. The Portfolio consisted
of high-quality, liquid securities of which 63 percent was invested in
first-tier-quality commercial paper, 23 percent in bankers' acceptances and the
remaining 14 percent in U.S. Treasury and federal agency obligations.
Stability is the word that best characterizes the money markets during the
second half of 1993. The U.S. economy currently is enjoying a moderate,
sustainable expansion. We believe the Federal Reserve Board was pleased with
overall economic conditions and the behavior of the financial markets for 1993.
Of course, the Federal Reserve Board's Governors must always be alert to
inflationary dangers, currency realignments and a host of other constantly
changing variables. We expect the Fed may register its concerns at some point
early in 1994 by raising short-term rates modestly. Nonetheless, we do not
anticipate dramatic changes in monetary conditions since we expect both
inflation and the pace of economic recovery to remain moderate during 1994. As
always, we continue to emphasize liquidity and stability of value while working
to keep yields in line with the trends of money market rates.
[ART]
<PAGE>
QUALITY INCOME PLUS PORTFOLIO
The Quality Income Plus Portfolio continued to achieve excellent results
during the recently concluded fiscal year. For the year ended December 31, 1993,
the Portfolio provided a total return of 12.99 percent, outperforming the Lehman
Brothers Aggregate Bond Index which returned 9.75 percent.
The Portfolio's net assets totaled more than $487 million at year end and
were allocated as follows: 60 percent in corporate bonds, 35 percent in U.S.
government securities (28 percent mortgage-backed securities), and 5 percent in
Yankee bonds (dollar-denominated bonds issued in the U.S. by foreign banks and
corporations). This asset allocation, combined with the Portfolio's average
credit rating of "AA," and a 16.5 year weighted average maturity, leaves the
Portfolio well positioned to benefit from the current low inflation economic
environment.
During the fiscal year, since the yield curve was very steep by historical
standards, the Portfolio emphasized the 18-to 20-year corporate sector. During
the fourth quarter, selective selling of U.S. Treasury bonds occurred, with the
proceeds invested in 30-year corporate bonds. This was balanced by an increased
weighting in the mortgage sector. This strategy focused on absolute yield, as
well as value along the yield curve. The Portfolio's diversified-sector strategy
is expected to be maintained in 1994 with asset allocation shifts occurring
regularly to respond to the constantly changing investment environment. The
chart on the following page illustrates the growth of a $10,000 investment in
the Fund from inception (March 1, 1987) through the fiscal year ended December
31, 1993, versus a similar investment in the issues that comprise the Lehman
Brothers Mutual Fund Aggregate Bond Index (the Lehman Brothers figure is for the
period from March 31, 1987 through December 31, 1993).
[ART]
UTILITIES PORTFOLIO
The Utilities Portfolio performed well during the fiscal year ended December
31, 1993, registering a very competitive total return of 15.69 percent. The 2.01
percent total return for the month of December reflected in part a stabilization
of interest rates and provided some recovery of the subdued net asset value
(NAV) performance realized earlier in the fourth quarter.
After more than eight strong months in 1993 the electric utilities sector
began to underperform. Clearly, historically high industry valuation levels and
a turn to higher interest rates triggered this downturn, but other factors were
at work, most notably uncertainty over competition within the industry.
Unanswered questions regarding regulation and dividend payouts were part of the
equation as well. In anticipation of and response to this environment, the Fund
realized selective capital gains from the electric utilities sector. These funds
on balance were reinvested in other utility-related areas, with a heavy emphasis
on the telecommunications sector as reflected by the increased allocation from
the prior year-end level of 25 percent to 31 percent of the equity portfolio.
The telecommunications portfolio includes selective foreign securities, which
account for 9 percent of the Portfolio's net assets. At year end, the balance of
the equity portion of the Portfolio was allocated to electric utilities (41
percent) and natural gas utilities (12 percent). To enhance the Fund's income
and take advantage of the lower interest rates experienced for much of 1993, the
Portfolio's fixed-income allocation was increased from 8 percent of total assets
to 12 percent. The chart below illustrates the growth of a $10,000 investment in
the Portfolio from inception (March 1, 1990) through the fiscal year ended
December 31, 1993, versus a similar investment in the issues that comprise the
Standard & Poor's 500 Index.
Dividends declared in 1993 totaled $0.498 per share, including a December
payment of $0.051 per share. On December 31, 1993, the Portfolio's net assets
totaled more than $490 million, an increase of approximately $337 million since
year end 1992.
We appreciate your support of Dean Witter Variable Investment Series and
look forward to continuing to serve your financial objectives.
Very truly yours,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
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<TABLE>
<CAPTION>
MONEY QUALITY
MARKET INCOME PLUS HIGH YIELD UTILITIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (identified
cost $130,334,737, $555,756,259, $97,886,321,
$460,847,634, $437,283,701, $49,149,416,
$73,813,258, $183,271,753, and $274,759,819,
respectively) (Note 1)........................ $130,334,737 $565,561,400 $ 88,515,986 $497,619,970
Cash............................................ 1,034 -- -- --
Receivable for:
Investments sold (Note 3)..................... -- 1,160,038 -- --
Interest...................................... -- 7,139,836 1,582,578 991,601
Shares of beneficial interest sold............ 5,684 158,529 242,176 91,115
Principal paydowns............................ -- 15,265 -- --
Dividends..................................... -- -- -- 1,606,159
Foreign withholding taxes reclaimed........... -- -- -- --
Prepaid expenses and other assets............... 5,903 5,951 3,384 4,299
------------ ------------ ------------ ------------
TOTAL ASSETS............................ 130,347,358 574,041,019 90,344,124 500,313,144
------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Investments purchased (Note 3)................ -- 85,922,447 -- 8,826,805
Shares of beneficial interest repurchased..... 314,865 51,792 120 148,826
Payable to bank................................. -- -- -- --
Investment management fees payable (Note 2)..... 52,914 202,290 36,737 262,829
Accrued expenses and other payables (Note 3).... 54,492 217,959 106,866 140,650
------------ ------------ ------------ ------------
TOTAL LIABILITIES....................... 422,271 86,394,488 143,723 9,379,110
------------ ------------ ------------ ------------
NET ASSETS:
Paid in capital................................. 129,925,002 470,430,381 167,033,904 450,588,803
Accumulated undistributed realized gains
(losses)--net................................. -- 7,410,431 (67,497,283) 2,223,366
Unrealized appreciation (depreciation)--net..... -- 9,805,141 (9,370,335) 36,772,336
Accumulated undistributed investment
income--net................................... 85 578 34,115 1,349,529
------------ ------------ ------------ ------------
NET ASSETS.............................. $129,925,087 $487,646,531 $ 90,200,401 $490,934,034
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING....... 129,925,002 44,202,872 12,692,791 35,718,712
------------ ------------ ------------ ------------
NET ASSET VALUE PER SHARE (unlimited authorized
shares of $.01 par value)..................... $1.00 $11.03 $7.11 $13.74
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS
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1. ORGANIZATION AND ACCOUNTING POLICIES--Dean Witter Variable Investment Series
(the "Fund") is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company and is comprised of
nine Portfolios: the Money Market Portfolio, the Quality Income Plus Portfolio,
the High Yield Portfolio, the Utilities Portfolio, the Dividend Growth
Portfolio, the Capital Growth Portfolio, the European Growth Portfolio, the
Equity Portfolio and the Managed Assets Portfolio. The Fund was organized on
February 25, 1983 as a Massachusetts business trust and the Money Market, High
Yield, and Equity Portfolios commenced operations on March 9, 1984. The Quality
Income Plus and Managed Assets Portfolios commenced operations on March 1, 1987.
The Utilities and Dividend Growth Portfolios commenced operations on March 1,
1990 and the Capital Growth and European Growth Portfolios commenced operations
on March 1, 1991. All shares of the portfolios are owned by Northbrook Life
Insurance Company ("Northbrook"), or Allstate Life Insurance Company of New York
("Allstate New York") for allocation to Northbrook Variable Annuity Account as
the underlying investment for
<PAGE>
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<TABLE>
<CAPTION>
DIVIDEND CAPITAL EUROPEAN MANAGED
GROWTH GROWTH GROWTH EQUITY ASSETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (identified
cost $130,334,737, $555,756,259, $97,886,321,
$460,847,634, $437,283,701, $49,149,416,
$73,813,258, $183,271,753, and $274,759,819,
respectively) (Note 1)........................ $487,067,203 $ 50,280,065 $ 80,706,175 $195,730,137 $288,591,096
Cash............................................ 65,727 -- -- -- --
Receivable for:
Investments sold (Note 3)..................... 230,122 271,243 1,434,161 2,618,753 --
Interest...................................... 759,526 -- 9,813 134,713 528,270
Shares of beneficial interest sold............ 711,010 76,072 630,492 225,986 87,914
Principal paydowns............................ -- -- -- -- --
Dividends..................................... 1,076,498 85,185 97,911 70,604 276,719
Foreign withholding taxes reclaimed........... -- -- 34,545 -- --
Prepaid expenses and other assets............... 1,839 5,073 -- 4,515 4,224
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS............................ 489,911,925 50,717,638 82,913,097 198,784,708 289,488,223
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payable for:
Investments purchased (Note 3)................ 6,387,942 140,177 3,166,072 15,818,899 1,756,700
Shares of beneficial interest repurchased..... -- 16,803 41,306 -- 12,892
Payable to bank................................. -- 197,467 528,398 -- --
Investment management fees payable (Note 2)..... 247,672 26,724 60,613 73,332 118,575
Accrued expenses and other payables (Note 3).... 131,171 27,629 64,319 64,613 97,707
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES....................... 6,766,785 408,800 3,860,708 15,956,844 1,985,874
------------ ------------ ------------ ------------ ------------
NET ASSETS:
Paid in capital................................. 434,458,025 49,506,852 68,663,150 155,059,170 266,889,041
Accumulated undistributed realized gains
(losses)--net................................. (1,891,505) (389,715) 2,641,419 15,116,085 6,070,167
Unrealized appreciation (depreciation)--net..... 49,783,502 1,130,649 6,880,648 12,458,384 13,831,277
Accumulated undistributed investment
income--net................................... 795,118 61,052 867,172 194,225 711,864
------------ ------------ ------------ ------------ ------------
NET ASSETS.............................. $483,145,140 $ 50,308,838 $ 79,052,389 $182,827,864 $287,502,349
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING....... 37,793,203 4,259,434 5,634,890 8,255,004 22,668,551
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE PER SHARE (unlimited authorized
shares of $.01 par value)..................... $12.78 $11.81 $14.03 $22.15 $12.68
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
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the variable annuity contracts issued by Northbrook and flexible premium
deferred variable annuity contracts issued by Allstate New York, respectively.
Northbrook and Allstate New York are subsidiaries of Sears, Roebuck and Co.
("Sears"). Prior to June 30, 1993, the Fund's Investment Manager, Dean Witter
InterCapital Inc. (the "Investment Manager"), formerly the InterCapital Division
of Dean Witter Reynolds, Inc., and Distributor, Dean Witter Distributors, Inc.
(the "Distributor"), were indirect subsidiaries of Sears. On June 30, 1993,
Sears spun-off its remaining 80% ownership in Dean Witter, Discover & Co., the
parent company of the Investment Manager and Distributor, to existing Sears
stockholders.
The following is a summary of the significant accounting policies:
(A) VALUATION OF INVESTMENTS--The Money Market Portfolio: Portfolio
securities are valued at amortized cost, which approximates market value.
The Quality Income Plus, High Yield, Utilities, Dividend Growth, Capital
Growth, European Growth, Equity and Managed Assets Portfolios: (1) an equity
portfolio security listed or traded on the New York or American Stock
Exchange or other domestic or foreign
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993
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<TABLE>
<CAPTION>
MONEY QUALITY
MARKET INCOME PLUS HIGH YIELD UTILITIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME
Interest........................................ $ 3,514,869 $ 22,561,165 $ 7,724,230 $ 3,158,348
Dividends....................................... -- -- -- 11,881,516*
------------ ------------ ------------ ------------
TOTAL INCOME................................ 3,514,869 22,561,165 7,724,230 15,039,864
------------ ------------ ------------ ------------
EXPENSES
Investment management fees (Note 2)............. 535,284 1,676,538 311,460 2,195,197
Professional fees............................... 28,509 32,851 31,026 24,872
Shareholder reports and notices................. 11,080 19,921 1,710 26,700
Trustees' fees and expenses (Note 3)............ 4,555 6,869 2,494 5,436
Custodian fees.................................. 17,298 43,402 10,387 21,917
Transfer agent fees (Note 3).................... 500 500 500 500
Registration fees............................... 10,901 98,177 12,920 104,631
Other........................................... 654 3,808 990 2,033
------------ ------------ ------------ ------------
TOTAL EXPENSES.............................. 608,781 1,882,066 371,487 2,381,286
------------ ------------ ------------ ------------
INVESTMENT INCOME--NET.................. 2,906,088 20,679,099 7,352,743 12,658,578
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET (NOTE 1):
Realized gain (loss) on investments--net........ -- 8,180,477 (4,735,637) 2,261,234
Realized gain on option contracts
written--net................................... -- -- -- --
Realized gain on foreign exchange
transactions--net.............................. -- -- -- --
------------ ------------ ------------ ------------
Total realized gain (loss)--net............. -- 8,180,477 (4,735,637) 2,261,234
Change in unrealized appreciation or
depreciation on:
Investments--net.............................. -- 4,200,907 9,877,901 19,355,022
Written options............................... -- -- -- --
Translation of other assets and liabilities
denominated in foreign currencies--net...... -- -- -- --
------------ ------------ ------------ ------------
NET GAIN (LOSS)............................. -- 12,381,384 5,142,264 21,616,256
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 2,906,088 $ 33,060,483 $ 12,495,007 $ 34,274,834
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
- ----------
* Net of $95,189, $48,883, $68,147, $2,045 and $34,839 in foreign withholding
tax, respectively.
** Net of $4,978 in foreign withholding tax.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
stock exchange is valued at its latest sale price on that exchange prior to
the time when assets are valued (if there were no sales that day, the
security is valued at the latest bid price) (in cases where securities are
traded on more than one exchange, the securities are valued on the exchange
designated as the primary market by the Trustees); (2) all other portfolio
securities for which over-the-counter market quotations are readily
available are valued at the latest available bid price prior to the time of
valuation; (3) listed options on debt securities are valued at the latest
sale price on the exchange on which they are listed unless no sales of such
options have taken place that day, in which case they will be valued at the
mean between their latest bid and asked prices. Unlisted options on debt
securities and all options on equity securities are valued at the mean
between their latest bid and asked prices; (4) a futures contract is valued
at the latest sale price on the commodities exchange on which it trades
unless the Trustees determine that such price does not reflect its market
value, in which case it will be valued at its fair value as determined by
the Trustees; (5) when market quotations are not readily available,
portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of
the Fund's Trustees; 6) certain of the Fund's portfolio securities may be
valued by an outside pricing service approved by the Fund's Trustees. The
<PAGE>
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<TABLE>
<CAPTION>
DIVIDEND CAPITAL EUROPEAN MANAGED
GROWTH GROWTH GROWTH EQUITY ASSETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME
Interest........................................ $ 2,347,716 $ 19,376 $ 147,551** $ 677,477 $ 4,469,289
Dividends....................................... 9,753,901* 688,310 506,707* 805,327* 3,316,305*
------------ ------------ ------------ ------------ ------------
TOTAL INCOME................................ 12,101,617 707,686 654,258 1,482,804 7,785,594
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment management fees (Note 2)............. 2,049,082 302,274 290,371 581,935 1,058,182
Professional fees............................... 30,023 24,228 27,215 24,359 32,468
Shareholder reports and notices................. 34,862 3,542 1,151 10,606 24,972
Trustees' fees and expenses (Note 3)............ 6,200 730 161 3,922 5,065
Custodian fees.................................. 21,501 9,054 32,343 26,628 27,858
Transfer agent fees (Note 3).................... 500 500 500 500 500
Registration fees............................... 85,730 3,023 19,688 29,688 45,141
Other........................................... 3,133 590 601 1,248 2,818
------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES.............................. 2,231,031 343,941 372,030 678,886 1,197,004
------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME--NET.................. 9,870,586 363,745 282,228 803,918 6,588,590
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET (NOTE 1):
Realized gain (loss) on investments--net........ 1,384,492 (240,483) 2,921,085 15,242,235 8,034,397
Realized gain on option contracts
written--net................................... -- -- 5,371 -- --
Realized gain on foreign exchange
transactions--net.............................. -- -- 693,880 -- --
------------ ------------ ------------ ------------ ------------
Total realized gain (loss)--net............. 1,384,492 (240,483) 3,620,336 15,242,235 8,034,397
Change in unrealized appreciation or
depreciation on:
Investments--net.............................. 30,925,020 (3,491,305) 6,867,941 3,236,728 5,370,815
Written options............................... -- -- (4,463) -- --
Translation of other assets and liabilities
denominated in foreign currencies--net...... -- -- (10,272) -- --
------------ ------------ ------------ ------------ ------------
NET GAIN (LOSS)............................. 32,309,512 (3,731,788) 10,473,542 18,478,963 13,405,212
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 42,180,098 $ (3,368,043) $ 10,755,770 $ 19,282,881 $ 19,993,802
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
pricing service utilizes a matrix system incorporating security quality,
maturity and coupon as the evaluation model parameter, and/or research and
evaluations by its staff, including review of broker-dealer market price
quotations, in determining what it believes is the fair valuation of the
portfolio securities valued by such pricing service; and (7) short-term debt
securities having a maturity date of more than sixty days are valued on a
"mark-to-market" basis, that is, at prices based on market quotations for
securities of similar type, yield, quality and maturity, until sixty days
prior to maturity and thereafter at amortized value. 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. Dividend income is recorded on the ex-dividend date, except for
certain dividends from foreign securities which are recorded as soon as the
Fund is informed after the ex-dividend date. Interest income is accrued
daily except where collection is not expected. In determining
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993 AND DECEMBER 31, 1992
<TABLE>
<CAPTION>
QUALITY INCOME
MONEY MARKET PORTFOLIO PLUS PORTFOLIO HIGH YIELD PORTFOLIO
-------------------------- -------------------------- --------------------------
1993 1992 1993 1992 1993 1992
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Investment income--net...... $ 2,906,088 $ 3,340,475 $ 20,679,099 $ 8,358,915 $ 7,352,743 $ 5,638,817
Realized gain (loss)--net... -- -- 8,180,477 1,425,195 (4,735,637) (2,735,572)
Change in unrealized
appreciation or
depreciation--net.......... -- -- 4,200,907 (488,292) 9,877,901 3,484,859
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations............. 2,906,088 3,340,475 33,060,483 9,295,818 12,495,007 6,388,104
------------ ------------ ------------ ------------ ------------ ------------
Dividends and distributions to
shareholders from:
Investment income--net...... (2,906,087) (3,340,485) (20,733,963) (8,306,548) (7,316,733) (5,638,817)
Realized gain--net.......... -- -- -- -- -- --
Paid in capital............. -- -- -- -- -- (24,809)
------------ ------------ ------------ ------------ ------------ ------------
(2,906,087) (3,340,485) (20,733,963) (8,306,548) (7,316,733) (5,663,626)
------------ ------------ ------------ ------------ ------------ ------------
Transactions in shares of
beneficial
interest:
Net proceeds from sales..... 110,933,469 55,821,577 305,118,024 82,974,696 43,270,397 8,628,243
Reinvestment of dividends
and distributions.......... 2,906,086 3,340,483 20,733,884 8,306,547 7,316,732 5,663,626
Cost of shares
repurchased................ (80,065,561) (67,288,300) (13,899,740) (10,820,607) (5,607,128) (9,577,189)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets from
transactions in shares
of beneficial
interest............... 33,773,994 (8,126,240) 311,952,168 80,460,636 44,980,001 4,714,680
------------ ------------ ------------ ------------ ------------ ------------
Total increase
(decrease)........... 33,773,995 (8,126,250) 324,278,688 81,449,906 50,158,275 5,439,158
NET ASSETS:
Beginning of period......... 96,151,092 104,277,342 163,367,843 81,917,937 40,042,126 34,602,968
------------ ------------ ------------ ------------ ------------ ------------
END OF PERIOD (including
undistributed net
investment income of $85
and $84; $578 and $55,442;
$34,115 and $(1,895);
$1,349,529 and $570,112;
$795,118 and $352,872;
$61,052 and $35,481;
$867,172 and $156,577;
$194,225 and $151,113 and
$711,864 and $462,866,
respectively).............. $129,925,087 $ 96,151,092 $487,646,531 $163,367,843 $ 90,200,401 $ 40,042,126
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold........................ 110,933,469 55,821,577 27,855,790 8,050,389 6,223,673 1,267,088
Issued in reinvestment of
dividends and
distributions.............. 2,906,086 3,340,483 1,881,374 808,170 1,053,326 832,332
Repurchased................. (80,065,561) (67,288,300) (1,260,583) (1,051,319) (809,003) (1,414,463)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease)............. 33,773,994 (8,126,240) 28,476,581 7,807,240 6,467,996 684,957
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
UTILITIES PORTFOLIO
--------------------------
1993 1992
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Investment income--net...... $ 12,658,578 $ 4,613,417
Realized gain (loss)--net... 2,261,234 476,228
Change in unrealized
appreciation or
depreciation--net.......... 19,355,022 9,930,195
------------ ------------
Net increase in net
assets resulting from
operations............. 34,274,834 15,019,840
------------ ------------
Dividends and distributions to
shareholders from:
Investment income--net...... (11,879,161) (4,364,959)
Realized gain--net.......... (454,570) --
Paid in capital............. -- --
------------ ------------
(12,333,731) (4,364,959)
------------ ------------
Transactions in shares of
beneficial
interest:
Net proceeds from sales..... 315,722,662 74,860,552
Reinvestment of dividends
and distributions.......... 12,333,731 4,364,959
Cost of shares
repurchased................ (12,811,170) (4,581,889)
------------ ------------
Net increase in net
assets from
transactions in shares
of beneficial
interest............... 315,245,223 74,643,622
------------ ------------
Total increase
(decrease)........... 337,186,326 85,298,503
NET ASSETS:
Beginning of period......... 153,747,708 68,449,205
------------ ------------
END OF PERIOD (including
undistributed net
investment income of $85
and $84; $578 and $55,442;
$34,115 and $(1,895);
$1,349,529 and $570,112;
$795,118 and $352,872;
$61,052 and $35,481;
$867,172 and $156,577;
$194,225 and $151,113 and
$711,864 and $462,866,
respectively).............. $490,934,034 $153,747,708
------------ ------------
------------ ------------
SHARES ISSUED AND REPURCHASED:
Sold........................ 23,293,456 6,509,419
Issued in reinvestment of
dividends and
distributions.............. 902,622 383,493
Repurchased................. (934,385) (403,887)
------------ ------------
Net increase
(decrease)............. 23,261,693 6,489,025
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
net investment income, the Money Market Portfolio amortizes premiums and
discounts on securities owned; gains and losses realized upon sale of such
securities are based on their amortized cost. The Quality Income Plus, High
Yield, Utilities, Dividend Growth, Capital Growth, European Growth, Equity
and Managed Assets Portfolios do not amortize premiums or accrue discounts
on fixed income securities in the portfolio, except those original issue
discounts for which amortization is required for federal income tax
purposes; gains and losses realized upon sale of such securities are based
on their identified cost. Additionally, with respect to market discount on
bonds, a portion of any capital gain realized upon disposition may be
recharacterized as investment income.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIVIDEND GROWTH PORTFOLIO CAPITAL GROWTH PORTFOLIO EUROPEAN GROWTH PORTFOLIO
-------------------------- -------------------------- --------------------------
1993 1992 1993 1992 1993 1992
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Investment
income--net.......... $ 9,870,586 $ 4,687,188 $ 363,745 $ 187,939 $ 282,228 $ 58,623
Realized gain
(loss)--net.......... 1,384,492 (1,585,163) (240,483) 10,509 3,620,336 124,133
Change in unrealized
appreciation or
depreciation--net.... 30,925,020 8,566,758 (3,491,305) 1,828,625 6,853,206 (111,683)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in
net assets
resulting from
operations....... 42,180,098 11,668,783 (3,368,043) 2,027,073 10,755,770 71,073
------------ ------------ ------------ ------------ ------------ ------------
Dividends and
distributions to
shareholders from:
Investment
income--net.......... (9,428,340) (4,535,358) (338,174) (184,354) (258,172 ) (66,052)
Realized gain--net.... -- -- -- (49,053) (199,841 ) (12,486)
Paid in capital....... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
(9,428,340) (4,535,358) (338,174) (233,407) (458,013 ) (78,538)
------------ ------------ ------------ ------------ ------------ ------------
Transactions in shares
of beneficial
interest:
Net proceeds from
sales................ 260,254,121 91,915,940 24,319,197 28,254,879 59,000,547 9,392,087
Reinvestment of
dividends and
distributions........ 9,428,340 4,535,358 338,174 233,407 458,013 78,554
Cost of shares
repurchased.......... (11,840,572) (9,056,491) (15,747,254) (3,576,670) (1,390,412 ) (2,430,005)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in
net assets from
transactions in
shares of
beneficial
interest......... 257,841,889 87,394,807 8,910,117 24,911,616 58,068,148 7,040,636
------------ ------------ ------------ ------------ ------------ ------------
Total increase
(decrease)..... 290,593,647 94,528,232 5,203,900 26,705,282 68,365,905 7,033,171
NET ASSETS:
Beginning of period... 192,551,493 98,023,261 45,104,938 18,399,656 10,686,484 3,653,313
------------ ------------ ------------ ------------ ------------ ------------
END OF PERIOD
(including
undistributed net
investment income of
$85 and $84; $578 and
$55,442; $34,115 and
$(1,895); $1,349,529
and $570,112;
$795,118 and
$352,872; $61,052 and
$35,481; $867,172 and
$156,577; $194,225
and $151,113 and
$711,864 and
$462,866,
respectively)........ $483,145,140 $192,551,493 $ 50,308,838 $ 45,104,938 $79,052,389 $10,686,484
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
SHARES ISSUED AND
REPURCHASED:
Sold.................. 21,274,912 8,221,658 2,077,229 2,360,929 4,664,827 909,337
Issued in reinvestment
of dividends and
distributions........ 767,569 405,424 29,150 19,979 38,773 7,435
Repurchased........... (979,408) (809,973) (1,374,613) (303,434) (118,865 ) (236,051)
------------ ------------ ------------ ------------ ------------ ------------
Net increase
(decrease)....... 21,063,073 7,817,109 731,766 2,077,474 4,584,735 680,721
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
EQUITY PORTFOLIO MANAGED ASSETS PORTFOLIO
-------------------------- --------------------------
1993 1992 1993 1992
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Investment
income--net.......... $ 803,918 $ 793,977 $ 6,588,590 $ 4,072,311
Realized gain
(loss)--net.......... 15,242,235 6,003,596 8,034,397 6,242,360
Change in unrealized
appreciation or
depreciation--net.... 3,236,728 (5,776,162) 5,370,815 (2,516,919)
------------ ------------ ------------ ------------
Net increase in
net assets
resulting from
operations....... 19,282,881 1,021,411 19,993,802 7,797,752
------------ ------------ ------------ ------------
Dividends and
distributions to
shareholders from:
Investment
income--net.......... (760,806) (806,303) (6,339,592) (4,029,532)
Realized gain--net.... (6,092,158) (6,090,407) (7,347,526) (1,127,378)
Paid in capital....... -- -- -- --
------------ ------------ ------------ ------------
(6,852,964) (6,896,710) (13,687,118) (5,156,910)
------------ ------------ ------------ ------------
Transactions in shares
of beneficial
interest:
Net proceeds from
sales................ 96,261,692 23,153,349 137,119,451 46,866,138
Reinvestment of
dividends and
distributions........ 6,852,964 6,896,710 13,687,118 5,156,910
Cost of shares
repurchased.......... (10,243,552) (10,171,532) (6,351,926) (5,702,279)
------------ ------------ ------------ ------------
Net increase in
net assets from
transactions in
shares of
beneficial
interest......... 92,871,104 19,878,527 144,454,643 46,320,769
------------ ------------ ------------ ------------
Total increase
(decrease)..... 105,301,021 14,003,228 150,761,327 48,961,611
NET ASSETS:
Beginning of period... 77,526,843 63,523,615 136,741,022 87,779,411
------------ ------------ ------------ ------------
END OF PERIOD
(including
undistributed net
investment income of
$85 and $84; $578 and
$55,442; $34,115 and
$(1,895); $1,349,529
and $570,112;
$795,118 and
$352,872; $61,052 and
$35,481; $867,172 and
$156,577; $194,225
and $151,113 and
$711,864 and
$462,866,
respectively)........ $182,827,864 $ 77,526,843 $287,502,349 $136,741,022
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SHARES ISSUED AND
REPURCHASED:
Sold.................. 4,485,338 1,188,114 10,942,015 3,874,536
Issued in reinvestment
of dividends and
distributions........ 336,539 390,496 1,102,080 427,092
Repurchased........... (483,237) (531,726) (506,227) (471,239)
------------ ------------ ------------ ------------
Net increase
(decrease)....... 4,338,640 1,046,884 11,537,868 3,830,389
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
(C) OPTIONS AND FUTURES--(1) Options on debt obligations, equities and
foreign currency: When the Fund writes a call or a put option, an amount
equal to the premium received is included in the Fund's Statement of Assets
and Liabilities as an asset and as an equivalent liability. The amount of
the liability is subsequently marked-to-market to reflect the current market
value of the option written. If an option which the Fund has written either
expires on its stipulated expiration date, or if the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss if the cost
of a closing purchase transaction exceeds the premium received when the
option was written) without regard to any unrealized gain or loss on the
underlying security or currency, and the liability related to such option is
extinguished. If a call option which the Fund has written is exercised, the
Fund realizes a gain or loss from the sale
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
of the underlying security or currency and the proceeds from such sale are
increased by the premium originally received. If a put option which the Fund
has written is exercised, the amount of the premium originally received will
reduce the cost of the security which the Fund purchases upon exercise of
the option; (2) Options on futures contracts: The Fund is required to
deposit U.S. Government securities, "initial margin" and "variation margin,"
with respect to put and call options on futures contracts written. If an
option which the Fund has written expires on its stipulated expiration date,
the Fund realizes a gain. If a call or put option which the Fund has written
is exercised, premiums received will decrease the unrealized loss or
increase the unrealized gain on the future. If the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss if the cost
of a closing purchase transaction exceeds the premium received when the
option was written) without regard to any unrealized gain or loss on the
underlying futures contract, and the liability related to such option is
extinguished; (3) Futures contracts: A futures contract is an agreement
between two parties to buy and sell financial instruments at a set price on
a future date. Upon entering into such a contract the Fund is required to
pledge to the broker cash or U.S. Government securities equal to the minimum
"initial margin" requirements of the applicable futures exchange. Pursuant
to the contract, the Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin", and are recorded by
the Fund as unrealized gains or losses. When the contract is closed, the
Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed.
The premium paid by the Fund for the purchase of a call or a put option
is included in the Fund's Statement of Assets and Liabilities as an
investment and subsequently marked-to-market to reflect the current market
value of the option. If an option which the Fund has purchased expires on
the stipulated expiration date, the Fund will realize a loss in the amount
of the cost of the option. If the Fund enters into a closing sale
transaction, the Fund will realize a gain or loss, depending on whether the
proceeds from the closing sale transaction are greater or less than the cost
of the option. If the Fund exercises a put option, it will realize a gain or
loss from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid. If the Fund exercises
a call option, the cost of the security which the Fund purchases upon
exercise will be increased by the premium originally paid.
(D) FOREIGN CURRENCY TRANSLATION--The books and records of the European
Growth Portfolio are maintained in U.S. dollars as follows: (1) the foreign
currency market value of investment securities, other assets and liabilities
and forward contracts stated in foreign currencies are translated at the
exchange rates at the end of the period; and (2) purchases, sales, income
and expenses are translated at the rate of exchange prevailing on the
respective dates of such transactions. The resultant exchange gains and
losses are included in the Statement of Operations. Pursuant to U.S. Federal
income tax regulations, certain net foreign exchange gains/losses included
in realized and unrealized gain/loss in the Statement of Operations for the
year ended December 31, 1993 are included in or are a reduction of ordinary
income for federal income tax purposes.
(E) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS--The European Growth
Portfolio may enter into forward foreign currency contracts as a hedge
against fluctuations in foreign exchange rates. All forward contracts are
valued daily at the appropriate exchange rates and any resulting unrealized
currency gains or losses are reflected in the Portfolio's accounts. The
Portfolio records realized gains or losses on delivery of the currency.
(F) REPURCHASE AGREEMENTS--The Fund's custodian takes possession on behalf
of the Fund of the collateral pledged for investments in repurchase
agreements. It is the policy of the Fund to value the
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
underlying collateral daily on a mark-to-market basis to determine that the
value, including accrued interest, is at least equal to the repurchase price
plus accrued interest. In the event of default of the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation.
(G) FEDERAL INCOME TAX STATUS--It is the Fund's policy to comply
individually for each Portfolio 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.
(H) 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 reclassifications.
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.
(I) EXPENSES--Direct expenses are charged to the respective Portfolio and
general corporate expenses are allocated on the basis of relative net
assets.
2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS--Pursuant to an Investment
Management Agreement (the "Agreement"), Dean Witter InterCapital Inc. (the
"Investment Manager"), formerly the InterCapital Division of Dean Witter
Reynolds Inc. ("DWR"), manages the Fund's investments. Under the Agreement, the
Fund pays its Investment Manager a monthly management fee, calculated and
accrued daily, by applying the annual rate of 1.0% to the net assets of the
European Growth Portfolio, 0.50% to the net assets of each of the Money Market
Portfolio, the Quality Income Plus Portfolio, the High Yield Portfolio, the
Equity Portfolio and the Managed Assets Portfolio, 0.65% to the net assets of
the Utilities and Capital Growth Portfolios, and 0.625% to the net assets of the
Dividend Growth Portfolio, in each case determined as of the close of each
business day. 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.
Under a Sub-Advisory Agreement between Morgan Grenfell Investment Services
Limited (the "Sub-Advisor") and the Investment Manager, the Sub-Advisor provides
the European Growth Portfolio with investment advice and portfolio management
relating to the Portfolio's investments in securities, subject to the overall
supervision of the Investment Manager. As compensation for its services provided
pursuant to the Sub-Advisory Agreement, the Investment Manager pays the
Sub-Advisor monthly compensation equal to 40% of its monthly compensation.
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES--Purchases and
sales/maturities of portfolio securities, excluding short-term investments
(except for the Money Market Portfolio), for the year ended December 31, 1993
were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES/MATURITIES
-------------- --------------
<S> <C> <C> <C>
Money Market $ 814,691,627 $784,117,583
Quality Income Plus 1,061,307,474 738,417,698 Includes purchases/sales of U.S. Government
agencies/obligations of $732,505,700 and $614,619,899,
respectively.
High Yield 138,684,889 103,636,422 Includes purchases/sales of U.S. Government obligations of
$3,230,000 and -0-, respectively.
Utilities 331,064,290 37,468,644
Dividend Growth 283,970,128 18,927,792 Includes purchases/sales of U.S. Government obligations of
$22,965,313 and $8,040,000, respectively.
Capital Growth 25,619,823 16,853,631
European Growth 69,276,693 20,960,866 Additionally, the Portfolio purchased and sold $2,052,115
and $2,360,215 of put options, respectively.
Equity 359,352,556 284,653,568 Includes purchases/sales of U.S. Government obligations of
$16,440,938 and $11,306,250, respectively.
Managed Assets 140,473,893 74,522,939 Includes purchases/sales of U.S. Government
agencies/obligations of $11,749,722 and $9,170,508
respectively.
</TABLE>
Transactions in written options on foreign equities for the European Growth
Portfolio were as follows:
<TABLE>
<CAPTION>
# OF CONTRACTS PREMIUMS
-------------- ----------
<S> <C> <C>
Options written: outstanding at beginning
of period................................ 120 $ 5,371
Options written........................... -0- -0-
Options closed............................ (120 ) (5,371)
----- ----------
Options written: outstanding at end of
period................................... -0- -0-
----- ----------
----- ----------
</TABLE>
For the year ended December 31, 1993, the Utilities, Dividend Growth,
Capital Growth, Equity and Managed Assets Portfolios incurred brokerage
commissions of $92,190, $152,045, $28,363, $117,990 and $61,401, respectively,
to Dean Witter Reynolds Inc. for portfolio transactions executed on behalf of
such Portfolios.
Included in the Utilities, Dividend Growth, Capital Growth, Equity and
Managed Assets Portfolios' payables for investments purchased and included in
the Dividend Growth, Capital Growth and Equity Portfolios' receivable for
investments sold are $481,720, $5,962,692, $61,677, $7,981,827, $1,756,700,
$230,122, $205,243 and $107,591, respectively, for unsettled trades with Dean
Witter Reynolds Inc. at December 31, 1993.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. For the year ended December 31, 1993,
each of the Money Market, Quality Income Plus, High Yield, Utilities, Dividend
Growth, Capital Growth, European Growth, Equity and Managed Assets Portfolios
incurred transfer agent fees of $500.
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 an independent Trustee 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, 1993, included in Trustees' fees and expenses in the
Statement of Operations for the Money Market, Quality Income Plus, High Yield,
Utilities, Dividend Growth, Equity and Managed Assets Portfolios, amounted to
$2,683, $2,161, $1,081, $1,102, $1,712, $1,540 and $2,198, respectively. At
December 31, 1993, the Fund had an accrued pension liability for the Money
Market, Quality Income Plus, High
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
Yield, Utilities, Dividend Growth, Equity and the Managed Assets Portfolios in
the amount of $10,534, $5,952, $3,521, $3,537, $5,503, $4,245 and $6,798,
respectively, which is included in accrued expenses in the Statement of Assets
and Liabilities.
4. FEDERAL INCOME TAXES--At December 31, 1993, the High Yield Portfolio had a
net capital loss carryover of approximately $7,297,000, which will be available
through December 31, 1996 and a net capital loss carryover of approximately
$10,694,000, which will be available through December 31, 1997. The High Yield
and Dividend Growth Portfolios had net capital loss carryovers of approximately
$34,291,000, and $1,372,000, respectively, which will be available through
December 31, 1998. The High Yield Portfolio had a net capital loss carryover of
approximately $7,336,000, which will be available through December 31, 1999. The
High Yield Portfolio had a net capital loss carryover of approximately
$3,057,000 which will be available through December 31, 2000. The High Yield
Portfolio had a net capital loss carryover of approximately $4,736,000 which
will be available through December 31, 2001. Such capital loss carryovers may be
used to offset future capital gains, to the extent provided by regulations.
During the year ended December 31, 1993, the Quality Income Plus, Dividend
Growth and Capital Growth Portfolios utilized net capital loss carryovers of
approximately $668,000, $163,000 and $96,000, respectively. Capital losses
incurred after October 31 within the taxable year are deemed to arise on the
first business day of the Portfolios' next taxable year. The Quality Income
Plus, Utilities and Capital Growth Portfolios incurred and will elect to defer
net capital losses of approximately $39,000, $418,000, and $165,000,
respectively, during such period in fiscal 1993. To the extent that these
carryover losses are used to offset future capital gains, it is probable that
the gains so offset will not be distributed to shareholders.
The primary reason(s) for significant temporary book/tax differences are as
follows:
<TABLE>
<CAPTION>
POST-OCTOBER
CAPITAL LOSSES WASH SALES
--------------- ------------
<S> <C> <C>
Capital Growth........................................................... - -
Dividend Growth.......................................................... -
Equity................................................................... -
Managed Assets........................................................... -
Quality Income Plus...................................................... -
Utilities................................................................ -
</TABLE>
The primary reason for significant permanent book/tax differences are as
follows:
<TABLE>
<CAPTION>
DIVIDEND FOREIGN CURRENCY
REDESIGNATIONS GAINS/LOSSES
--------------- -----------------
<S> <C> <C>
Equity Portfolio................................................... -
European Growth Portfolio.......................................... -
High Yield Portfolio............................................... -
Managed Assets Portfolio........................................... -
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
NOTES TO FINANCIAL STATEMENTS FOR ALL PORTFOLIOS (CONTINUED)
- --------------------------------------------------------------------------------
At December 31, 1992, the CUMULATIVE effect of permanent book/tax
reclassifications charged/ (credited) was as follows:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED
NET NET REALIZED
INVESTMENT GAINS
INCOME (LOSSES) PAID-IN-CAPITAL
------------- ------------- --------------
<S> <C> <C> <C>
Equity Portfolio........................................ (103,402) 226 103,176
European Growth Portfolio............................... (156,577) 156,577 --
High Yield Portfolio.................................... 1,895 331,505 (333,400)
Managed Assets Portfolio................................ (204,090) 183,098 20,992
</TABLE>
To reflect reclassifications arising from permanent book/tax differences for
the year ended December 31, 1993, the European Growth Portfolio charged
accumulated undistributed net realized gains and credited undistributed net
investment income for approximately $687,000.
5. DIVIDENDS AND DISTRIBUTIONS--The Money Market, Quality Income Plus and High
Yield Portfolios declare daily dividends of substantially all of their net
investment income. Such dividends are payable to shareholders of record as of
the close of business the preceding day. The Utilities, Dividend Growth, Capital
Growth, European Growth, Equity and Managed Assets Portfolios declare and
distribute monthly, substantially all of their net investment income. Net
realized capital gains, if any, from all nine portfolios are distributed at
least annually.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK--As of December 31, 1993,
the European Growth Portfolio had outstanding forward foreign currency exchange
contracts ("forward contracts") as a hedge against changes in foreign exchange
rates. Forward contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Portfolio bears the
risk of an unfavorable change in the foreign exchange rates underlying the
forward contracts.
<TABLE>
<S> <C> <C>
1993 FEDERAL TAX NOTICE (UNAUDITED)
During the fiscal year ended December 31, 1993, the Utilities, European Growth,
Equity and Managed Assets Portfolios paid to shareholders $0.01964, $0.0204, $0.9129
and $0.4111 per share from long-term capital gains, respectively.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--MONEY MARKET PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD ON
AMOUNT (IN AND DATE OF
THOUSANDS) MATURITY DATE PURCHASE VALUE
--------------- ----------------------------- ------------- ---------------
<C> <S> <C> <C>
BANKERS' ACCEPTANCES (A) (22.8%)
COMMERCIAL BANKS
$4,248 CoreStates Bank N.A.
Philadelphia
2/1/94 to 3/30/94.......... 3.37 to 3.38 % $ 4,224,368
5,000 Bank of New York
1/18/94 to 3/14/94......... 3.25 to 3.30 4,977,730
2,000 First Bank National Assoc.
4/22/94.................... 3.26 1,980,082
2,000 Harris Trust & Savings Bank
1/3/94..................... 3.24 1,999,642
1,700 Mellon Bank N.A.
4/21/94.................... 3.38 1,682,703
1,500 NationsBank of North
Carolina, N.A.
3/18/94.................... 3.25 1,489,867
1,500 NBD Bank N.A.
2/14/94.................... 3.28 1,494,042
5,907 PNC Bank N.A.
3/23/94 to 5/24/94......... 3.27 to 3.37 5,839,626
1,000 U.S. Nat'l Bank of Oregon
1/19/94.................... 3.23 998,400
5,000 U.S. Bank of Washington, N.A.
2/2/94 to 4/7/94........... 3.23 to 3.28 4,968,275
---------------
TOTAL BANKERS' ACCEPTANCES
(AMORTIZED COST $29,654,735).............. 29,654,735
---------------
COMMERCIAL PAPER (A) (63.1%)
AUTOMOTIVE: FINANCE (3.3%)
4,270 Ford Motor Credit Company
1/25/94 to 2/18/94......... 3.23 to 3.39 4,254,522
---------------
BANKS: COMMERCIAL (13.6%)
3,440 ABN AMRO N.A. Fin. Inc.
1/24/94 to 3/14/94......... 3.22 to 3.37 3,423,597
2,000 BNP U.S. Finance Corp.
1/4/94..................... 3.38 1,999,447
2,955 Canadian Imperial Holdings
Inc.
1/27/94.................... 3.24 2,948,171
2,500 National Australia Funding
(Delaware) Inc.
1/14/94.................... 3.37 2,496,975
2,000 Societe Generale N.A. Inc.
1/11/94.................... 3.35 1,998,167
4,820 Toronto Dominion Holdings
(USA) Inc.
3/17/94 to 5/23/94......... 3.32 to 3.34 4,771,706
---------------
17,638,063
---------------
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD ON
AMOUNT (IN AND DATE OF
THOUSANDS) MATURITY DATE PURCHASE VALUE
--------------- ----------------------------- ------------- ---------------
<C> <S> <C> <C>
BANK HOLDING COMPANIES (7.4%)
$3,585 BankAmerica Corp.
1/31/94.................... 3.34 % $ 3,575,201
2,000 Bankers Trust N.Y. Corp.
1/12/94.................... 3.35 1,997,989
2,000 NationsBank Corp.
1/20/94.................... 3.23 1,996,622
2,000 Norwest Corporation
1/13/94.................... 3.37 1,997,767
---------------
9,567,579
---------------
BROKERAGE (8.4%)
5,500 Goldman Sachs Group L.P.
2/11/94 to 3/9/94.......... 3.35 to 3.38 5,472,806
5,490 Morgan Stanley Group Inc.
1/26/94 to 3/16/94......... 3.32 to 3.40 5,463,823
---------------
10,936,629
---------------
DRUG (1.5%)
2,000 Lilly, (Eli) & Co.
2/8/94..................... 3.20 1,993,350
---------------
FINANCE: DIVERSIFIED (20.9%)
2,580 American Express Credit Corp.
1/10/94 to 1/19/94......... 3.21 to 3.24 2,577,138
5,295 American General Finance
Corp.
1/5/94 to 2/3/94........... 3.21 to 3.41 5,287,885
5,700 Avco Financial Services Inc.
2/15/94 to 2/24/94......... 3.23 to 3.26 5,675,338
5,290 CIT Group Holdings Inc.
2/23/94 to 5/2/94.......... 3.25 to 3.38 5,249,119
5,815 General Electric Capital
Corp.
2/1/94 to 2/28/94.......... 3.19 to 3.37 5,793,456
2,600 ITT Financial Corp.
1/5/94 to 1/21/94.......... 3.21 to 3.25 2,597,212
---------------
27,180,148
---------------
FOOD AND BEVERAGE (2.6%)
3,500 Anheuser-Busch Cos., Inc.
6/15/94 to 6/20/94......... 3.35 to 3.38 3,446,375
---------------
TELEPHONE (5.4%)
3,000 American Telephone &
Telegraph Co.
1/6/94 to 2/16/94.......... 3.27 to 3.39 2,994,960
4,000 NYNEX Corp.
1/7/94 to 2/18/94.......... 3.23 to 3.38 3,990,320
---------------
6,985,280
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $82,001,946).............. 82,001,946
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--MONEY MARKET PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL DESCRIPTION YIELD ON
AMOUNT (IN AND DATE OF
THOUSANDS) MATURITY DATE PURCHASE VALUE
--------------- ----------------------------- ------------- ---------------
U.S. GOVERNMENT AGENCIES (A) (14.4%)
<C> <S> <C> <C>
$ 3,610 Federal Farm Credit Bank
7/18/94 to 8/4/94.......... 3.37 to 3.43 % $ 3,541,720
1,535 Federal Home Loan Banks
8/4/94..................... 3.45 1,504,381
3,000 Federal Home Loan Mortgage
Corp.
4/25/94 to 11/23/94........ 3.40 to 3.62 2,947,279
10,845 Federal National Mortgage
Association
1/28/94 to 9/28/94......... 3.14 to 3.51 10,684,676
---------------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $18,678,056).............. 18,678,056
---------------
<CAPTION>
VALUE
---------------
<C> <S> <C> <C>
TOTAL INVESTMENTS (AMORTIZED COST $130,334,737)
(B).......................................... 100.3 % $ 130,334,737
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS....................................... (0.3 ) (409,650)
------ ---------------
NET ASSETS..................................... 100.0 % $ 129,925,087
------ ---------------
------ ---------------
</TABLE>
- ----------
(a) Bankers' Acceptances, Commercial Paper, and U.S. Government Agencies were
purchased on a discount basis. The rates shown have been adjusted to reflect
a bond equivalent yield.
(b) Cost is the same for federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--QUALITY INCOME PLUS PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (59.8%)
AUTOMOTIVE INDUSTRY (1.5%)
$ 3,000 Ford Motor Co. ... 9.50 % 9/15/11 $ 3,838,920
1,000 Ford Motor Co. ... 8.875 1/15/22 1,174,190
1,000 General Motors
Acceptance
Corp. .......... 9.625 12/ 1/00 1,177,450
1,000 General Motors
Acceptance
Corp. .......... 9.40 7/15/21 1,187,880
-------------
7,378,440
-------------
BANK HOLDING COMPANIES (12.3%)
1,000 Banc One Corp. ... 8.74 9/15/03 1,162,650
2,000 Banc One,
Milwaukee, NA... 6.625 4/15/03 2,030,480
1,000 BankAmerica
Corp. .......... 9.625 2/13/01 1,184,460
1,000 BankAmerica
Corp. .......... 7.75 7/15/02 1,074,360
1,000 BankAmerica
Corp. .......... 7.875 12/ 1/02 1,083,080
2,000 Boatmen's
Bancshares,
Inc. ........... 9.25 11/ 1/01 2,364,160
2,000 Boatmen's
Bancshares,
Inc. ........... 6.75 3/15/03 2,036,840
1,000 Comerica, Inc. ... 7.25 10/15/02 1,055,670
3,000 Comerica, Inc. ... 7.125 12/ 1/13 2,945,520
1,000 CoreStates
Financial
Corp. .......... 9.625 2/15/01 1,191,420
6,000 CoreStates
Financial
Corp. .......... 5.875 10/15/03 5,759,820
4,000 Fleet Mortgage
Group, Inc. .... 6.50 9/15/99 4,070,560
2,000 Golden West
Financial
Corp. .......... 7.00 1/15/00 2,077,580
2,000 Huntington
National
Bank ........... 7.625 1/15/03 2,152,700
3,000 Marshall & Ilsley
Corp. .......... 6.375 7/15/03 2,994,480
2,000 Mellon Bank, NA... 6.75 6/ 1/03 2,031,460
5,000 Nationsbank Corp. 6.50 8/15/03 4,991,600
1,000 NBD Bancorp,
Inc. ........... 7.25 8/15/04 1,071,100
3,145 PNC Funding
Corp. .......... 9.875 3/ 1/01 3,803,815
1,000 Republic NY
Corp. .......... 7.875 12/12/01 1,111,290
4,000 Republic NY
Corp. .......... 5.875 10/15/08 3,781,000
1,000 Society National
Bank............ 7.85 11/ 1/02 1,093,410
5,000 State Street
Boston Corp..... 5.95 9/15/03 4,851,700
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 2,000 Wachovia Corp..... 7.00 % 12/15/99 $ 2,116,420
2,000 Wachovia Corp..... 6.375 4/15/03 2,018,480
-------------
60,054,055
-------------
BEVERAGES--SOFT DRINKS (0.2%)
1,000 Coca-Cola
Enterprises..... 8.50 2/ 1/22 1,147,720
-------------
BROADCAST MEDIA (0.2%)
1,000 Paramount
Communications,
Inc. ........... 8.25 8/ 1/22 977,290
-------------
COMPUTER EQUIPMENT (0.8%)
4,000 Digital Equipment
Corp. .......... 7.75 4/ 1/23 4,021,040
-------------
ETHICAL DRUGS & DISTRIBUTORS (0.4%)
910 Marion Merrell
Corp. .......... 9.11 8/ 1/05 1,055,535
1,000 McKesson Corp. ... 8.625 2/ 1/98 1,100,000
-------------
2,155,535
-------------
FINANCE & BROKERAGE (8.9%)
5,000 Aetna Life &
Casualty Co..... 7.25 8/15/23 4,957,450
2,000 American Express
Co. ............ 8.625 5/15/22 2,252,020
1,000 Associates Corp.
North America... 6.75 10/15/99 1,040,340
1,000 The Bear Stearns
Companies,
Inc. ........... 9.125 4/15/98 1,129,600
1,000 General Electric
Capital
Corp. .......... 8.125 5/15/12 1,128,580
3,500 Household
Financial
Corp. .......... 7.75 6/ 1/99 3,799,215
2,000 Household
Financial
Corp. .......... 8.95 9/15/99 2,284,120
1,000 Morgan Stanley
Group, Inc. .... 9.25 3/ 1/98 1,121,760
2,000 Morgan Stanley
Group, Inc. .... 7.00 10/ 1/13 1,924,600
5,000 Morgan Stanley
Group, Inc. .... 7.25 10/15/23 4,814,550
2,000 Norwest Financial,
Inc. ........... 7.00 1/15/03 2,083,480
5,000 Norwest Financial,
Inc. ........... 6.65 10/15/23 4,663,100
3,000 Primerica Corp.... 7.75 6/15/99 3,259,290
5,000 Shearson Lehman
Bros. Holdings,
Inc. ........... 8.375 2/15/99 5,460,950
3,000 Source One
Mortgage
Services........ 9.00 6/ 1/12 3,496,050
-------------
43,415,105
-------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--QUALITY INCOME PLUS PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
FINANCIAL & DATA SERVICING (0.6%)
$ 3,000 Equifax, Inc. .... 6.50 % 6/15/03 $ 3,019,950
-------------
FOOD SERVICES (1.0%)
2,000 Archer-Daniels-
Midland Co. .... 0.00 5/ 1/02 1,192,520
2,000 Grand Metropolitan
Investment
Corp............ 8.00 9/15/22 2,180,620
1,000 McDonald's Corp... 8.875 4/ 1/11 1,193,810
-------------
4,566,950
-------------
HEALTHCARE--DIVERSIFIED (0.7%)
2,000 Kaiser Foundation
Health Plan,
Inc. ........... 9.00 11/ 1/01 2,309,620
1,000 Kaiser Foundation
Health Plan,
Inc. ........... 9.55 7/15/05 1,244,220
-------------
3,553,840
-------------
INDUSTRIALS (9.4%)
7,000 Amoco Canada
Petroleum Co. .. 6.75 9/ 1/23 6,679,190
1,000 Bass America,
Inc. ........... 6.75 8/ 1/99 1,037,730
1,000 Boeing Co. ....... 7.95 8/15/24 1,095,070
1,000 BP North America,
Inc. ........... 7.875 5/15/02 1,103,770
1,000 Burlington
Resources,
Inc. ........... 8.50 10/ 1/01 1,131,550
1,000 Caterpillar,
Inc. ........... 9.375 7/15/01 1,180,440
3,000 Caterpillar,
Inc. ........... 8.00 2/15/23 3,231,240
1,000 Corning, Inc. .... 8.875 8/15/21 1,200,900
1,000 Dow Capital BV.... 8.70 5/15/22 1,137,120
6,000 Gillette Co....... 5.75 10/15/05 5,788,860
2,000 Kimberly Clark
Corp. .......... 7.875 2/ 1/23 2,157,980
1,000 Knight Ridder,
Inc. ........... 8.50 9/ 1/01 1,118,620
2,000 Martin Marietta
Corp. .......... 7.375 4/15/13 2,047,820
1,000 Maytag Corp. ..... 9.75 5/15/02 1,191,730
1,000 Motorola, Inc. ... 7.60 1/ 1/07 1,108,330
1,000 Pepsico, Inc. .... 6.25 9/ 1/99 1,024,680
3,000 Times Mirror
Co. ............ 7.375 7/ 1/23 3,048,120
3,500 Westvaco Corp. ... 7.75 2/15/23 3,598,560
3,000 Westvaco Corp. ... 7.00 8/15/23 2,855,850
2,000 Weyerhaeuser
Co. ............ 7.50 3/ 1/13 2,092,620
2,000 Weyerhaeuser
Co. ............ 7.25 7/ 1/13 2,043,600
-------------
45,873,780
-------------
OIL INTEGRATED--DOMESTIC (0.5%)
821 Mobil Oil
Corp. .......... 9.17 2/29/00 886,546
1,000 Texaco Capital,
Inc............. 9.75 3/15/20 1,295,200
-------------
2,181,746
-------------
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
PHARMACEUTICAL (1.4%)
$ 2,000 Bristol--Myers
Squibb Co. ..... 7.150% 6/15/23 $ 2,074,820
5,000 Zeneca Wilmington,
Inc. 7.00 11/15/23 4,852,300
-------------
6,927,120
-------------
REAL ESTATE INVESTMENT TRUST (1.0%)
5,000 Kimco Realty
Corp. .......... 6.50 10/ 1/03 4,827,550
-------------
RETAIL--DEPARTMENT STORES (3.6%)
1,000 Dayton Hudson
Corp. .......... 9.25 8/15/11 1,154,700
1,000 Dayton Hudson
Corp. .......... 9.00 10/ 1/21 1,174,180
1,000 Dayton Hudson
Corp. .......... 8.50 12/ 1/22 1,072,140
2,000 Dillard Department
Stores, Inc. ... 7.85 10/ 1/12 2,166,980
2,000 K Mart Corp. ..... 7.95 2/ 1/23 2,125,500
1,000 Penney, J.C.,
Inc. ........... 5.375 11/15/98 984,930
1,000 Penney, J.C.,
Inc. ........... 9.75 6/15/21 1,216,190
1,000 Penney, J.C.,
Inc. ........... 8.25 8/15/22 1,075,460
3,000 Walmart Stores,
Inc. ........... 7.49 6/21/07 3,333,810
3,000 Walmart Stores,
Inc. ........... 7.25 6/ 1/13 3,088,950
-------------
17,392,840
-------------
TRANSPORTATION (1.4%)
1,000 AMR Corp. ........ 10.20 3/15/20 1,166,390
1,000 Consolidated Rail
Corp. .......... 9.75 6/15/20 1,293,420
1,000 Delta Air Lines,
Inc............. 10.375 2/ 1/11 1,117,430
1,000 Norfolk Southern
Corp. .......... 7.875 2/15/04 1,127,220
2,000 Union Pacific
Corp. .......... 7.875 2/ 1/23 2,099,680
-------------
6,804,140
-------------
UTILITIES--ELECTRIC (14.0%)
1,000 Chugach Electric
Association,
Inc. ........... 9.14 3/15/22 1,176,420
2,000 Dayton Power &
Light Co. ...... 8.15 1/15/26 2,140,680
6,000 Duke Power Co. 7.00 7/ 1/33 5,790,660
2,000 Florida Power &
Light Co. ...... 7.875 1/ 1/13 2,073,580
6,000 Florida Power &
Light Co. ...... 7.05 12/ 1/26 5,808,120
2,000 Georgia Power Co. 8.625 6/ 1/22 2,142,240
1,000 Houston Lighting &
Power Co........ 8.75 3/ 1/22 1,116,200
2,000 Houston Lighting &
Power Co........ 7.75 3/15/23 2,052,900
3,000 Jersey Central
Power & Light
Co.............. 6.75 11/ 1/25 2,792,100
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--QUALITY INCOME PLUS PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 5,000 Northern States
Power Co........ 5.75 % 12/ 1/00 $ 4,991,450
1,000 Pacific Gas &
Electric Co. ... 8.25 11/ 1/22 1,087,400
5,000 Pacific Gas &
Electric Co. ... 7.05 3/ 1/24 4,931,100
1,000 Pacific Gas &
Electric Co. ... 8.00 10/ 1/25 1,054,790
5,000 Pacific Gas &
Electric Co. ... 7.25 8/ 1/26 4,938,650
2,000 Pennsylvania Power
& Light Co. .... 7.875 2/ 1/23 2,097,700
3,000 Potomac Electric
Power Co. ...... 6.875 10/15/24 2,839,620
3,000 Public Service
Electric & Gas
Co. ............ 7.875 11/ 1/01 3,324,240
2,000 Public Service
Electric & Gas
Co. ............ 7.50 3/ 1/23 2,001,520
5,000 Public Service
Electric & Gas
Co. ............ 7.00 9 1/24 4,804,600
2,000 South California
Edison Co. ..... 7.25 3/ 1/26 1,975,400
2,000 South Carolina
Electric & Gas
Co. ............ 7.625 6/ 1/23 2,026,980
1,000 South Carolina
Electric & Gas
Co. ............ 7.50 6/15/23 1,001,110
2,000 Virginia Electric
& Power Co. .... 6.75 10/ 1/23 1,855,480
1,000 Western Resource,
Inc. ........... 7.65 4/15/23 1,018,760
1,000 Wisconsin Electric
Power Co. ...... 7.25 8/ 1/04 1,100,090
2,000 Wisconsin Electric
Power Co. ...... 7.70 12/15/27 2,099,280
-------------
68,241,070
-------------
UTILITIES--TELEPHONE (1.9%)
4,000 Alltel Corp. ..... 6.50 11/ 1/13 3,798,880
1,000 American Telephone
& Telegraph
Co. ............ 8.125 7/15/24 1,088,750
1,000 GTE Corp. ........ 10.25 11/ 1/20 1,250,120
1,000 GTE Corp. ........ 8.75 11/ 1/21 1,151,000
2,000 U.S West
Communications,
Inc. ......... 6.875 9/15/33 1,867,800
-------------
9,156,550
-------------
TOTAL CORPORATE BONDS (IDENTIFIED COST
$282,716,066).......................... 291,694,721
-------------
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES &
OBLIGATIONS (35.2%)
$ 1,000 Federal Home Loan
Mortgage
Corp. .......... 7.14 % 12/15/07 $ 1,077,500
141 Federal Home Loan
Mortgage 5/ 1/19-
Corp. .......... 11.50 6/ 1/20 159,279
1,000 Federal Home Loan
Mortgage Corp.
(CMO Series 1046
F).............. 7.00 12/15/19 1,020,630
1,000 Federal Home Loan
Mortgage Corp.
(CMO Series 1177
HA)............. 7.50 2/15/18 1,016,870
13,000 Federal National
Mortgage
Association..... 6.50 2/14/24 12,833,438
27,000 Federal National
Mortgage
Association..... 7.00 1/13/24 27,379,688
10,893 Federal National
Mortgage 12/ 1/22-
Association 1... 7.50 1/13/24 11,253,767
5,000 Federal National
Mortgage
Association 15
year............ 6.00 1/20/08 4,960,938
5,000 Federal National
Mortgage
Association 15
year............ 6.00 2/17/08 4,945,313
2,000 Federal National
Mortgage
Association
Principal
Stripped........ 8.40 + 8/21/01 1,763,125
5,000 Government
National
Mortgage
Association 1... 6.00 1/19/23 4,817,188
19,986 Government
National
Mortgage 11/15/23-
Association 1... 6.50 12/15/23 19,798,802
20,489 Government
National
Mortgage 8/15/23-
Association 1... 7.00 1/19/24 20,815,823
13,922 Government
National
Mortgage 6/15/22-
Association 1... 7.50 8/15/23 14,439,884
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--QUALITY INCOME PLUS PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 2,000 Government
National
Mortgage
Association 1... 8.00 % 1/19/23 $ 2,105,625
1,171 Government
National
Mortgage 1/15/17-
Association 1... 8.50 11/15/21 1,242,175
4,280 Government
National
Mortgage 6/15/16-
Association 1... 9.00 2/15/21 4,578,660
916 Government
National
Mortgage 7/15/17-
Association 1... 9.50 4/15/20 989,931
516 Government
National
Mortgage 5/15/16-
Association 1... 10.00 4/15/19 569,241
5,000 Private Export
Funding
Services........ 5.48 9/15/03 4,970,200
1,000 Resolution Funding
Corp............ 0.00 7/15/04 518,992
1,000 Student Loan
Marketing
Association*.... 12.05 3/19/96 726,250
1,000 Tennessee Valley
Authority....... 7.75 12/15/22 1,039,688
1,000 U.S. Treasury
Bond............ 7.75 2/15/95 1,042,656
5,000 U.S. Treasury
Bond............ 7.625 11/15/22 5,707,030
12,000 U.S. Treasury
Bond............ 6.25 8/15/23 11,842,500
3,000 U.S. Treasury
Note............ 7.50 5/15/02 3,356,250
3,000 U.S. Treasury
Note............ 5.75 8/15/03 2,989,687
1,000 U.S. Treasury
Strip........... 0.00 5/15/01 659,803
5,000 U.S. Treasury
Strip........... 0.00 11/15/01 3,187,714
-------------
TOTAL U.S. GOVERNMENT AGENCIES &
OBLIGATIONS
(IDENTIFIED COST $170,578,721)......... 171,808,647
-------------
FOREIGN GOVERNMENT AGENCIES &
OBLIGATIONS (5.7%)
1,000 Hydro Quebec...... 9.40 2/ 1/21 1,227,930
1,000 Hydro Quebec...... 8.25 1/15/27 1,101,000
7,000 Italy-Republic.... 6.875 9/27/23 6,645,380
3,000 Province of New
Brunswick....... 6.75 8/15/13 2,898,450
3,000 Province of Nova
Scotia.......... 8.75 4/ 1/22 3,455,040
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 3,000 Province of
Ontario......... 7.75 % 6/ 4/02 $ 3,264,000
9,000 Province of
Quebec.......... 7.50 7/15/23 9,149,400
-------------
TOTAL FOREIGN GOVERNMENT AGENCIES &
OBLIGATIONS (IDENTIFIED COST
$27,799,600)........................... 27,741,200
-------------
SHORT - TERM INVESTMENTS (15.3%)
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (11.6%)
27,500 Federal Home
Loan Mortgage
Corp.(a)........ 3.13 1/13/94 27,471,308
1,000 Student Loan
Marketing
Association*.... 14.25 3/ 7/94 707,500
4,500 Tennessee Valley
Authority(a).... 3.18 2/16/94 4,481,715
5,000 U.S. Treasury
Bill(a)......... 3.025 1/20/94 4,981,514
5,000 U.S. Treasury
Bill(a)......... 3.035 1/20/94 4,986,230
4,000 U.S. Treasury
Bill(a)......... 3.04 1/20/94 3,988,966
4,000 U.S. Treasury
Bill(a)......... 3.03 2/10/94 3,967,562
3,000 U.S. Treasury
Bill(a)......... 3.04 2/10/94 2,976,254
3,000 U.S. Treasury
Bill(a)......... 3.03 3/10/94 2,983,445
-------------
TOTAL U.S. GOVERNMENT AGENCIES &
OBLIGATIONS
(IDENTIFIED COST $56,889,534).......... 56,544,494
-------------
COMMERCIAL PAPER (A) (3.1%)
AUTOMOTIVE FINANCE
4,000 Ford Motor Credit
Co.............. 3.188 1/13/94 3,995,760
3,000 Ford Motor Credit
Co.............. 3.209 1/19/94 2,995,200
1,000 Ford Motor Credit
Co.............. 3.209 1/20/94 998,311
-------------
7,989,271
-------------
FINANCE--DIVERSIFIED
2,000 General Electric
Capital Corp.... 3.188 1/13/94 1,997,880
2,000 General Electric
Capital Corp.... 3.175 2/14/94 1,992,276
-------------
3,990,156
-------------
FINANCE--ENERGY
3,000 Chevron Oil
Financial Co.... 3.188 1/13/94 2,996,820
-------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$14,976,247)........................... 14,976,247
-------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--QUALITY INCOME PLUS PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- -------------
REPURCHASE AGREEMENT (0.6%)
<C> <S> <C> <C> <C>
$ 2,796 The Bank of New York 2.75% due 1/3/94
(Identified Cost $2,796,091) (dated
12/31/93; proceeds $2,796,732;
collateralized by $2,805,106 U.S.
Treasury Note 5.125% due 3/31/98 valued
at $2,852,013)......................... $ 2,796,091
-------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL SHORT - TERM INVESTMENTS
(IDENTIFIED COST $74,661,872)......... 74,316,832
---------------
VALUE
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $555,756,259) (B)..................... 116.0 % $ 565,561,400
LIABILITIES IN EXCESS OF OTHER ASSETS........
(16.0 ) (77,914,869)
------ ---------------
NET ASSETS................................... 100.0 % $ 487,646,531
------ ---------------
------ ---------------
</TABLE>
- ----------
+ Currently zero coupon bond under terms of initial offering.
* Principal exchange rate linked security.
(a) Securities were purchased on a discount basis. The interest rates shown have
been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost of investments for federal income tax purposes is
$556,720,103; the aggregate gross unrealized appreciation is $13,550,745 and
the aggregate gross unrealized depreciation is $4,709,448, resulting in net
unrealized appreciation of $8,841,297.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--HIGH YIELD PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ------------- --------------- --------------- ---------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (85.8%)
AEROSPACE (6.6%)
$ 3,000 GPA Del, Inc. ................ 8.75% 12/15/98 $ 2,287,500
2,000 PA Holdings
Corp. ...................... 13.75 7/15/99 2,132,500
1,500 Sabreliner Corp. ............. 12.50 4/15/03 1,545,000
---------------
5,965,000
---------------
AIRLINES (0.2%)
548 Trans World Airlines, Inc. ... 8.00+ 11/ 3/00 208,167
---------------
BUILDING & CONSTRUCTION (3.6%)
3,100 American Standard, Inc. ...... 14.25 6/30/03 3,270,500
---------------
CABLE & TELECOMMUNICATIONS (3.5%)
2,000 Cablevision Systems Corp. .... 14.00 11/15/03 2,090,000
1,000 Marcus Cable.................. 11.875 10/ 1/05 1,040,000
---------------
3,130,000
---------------
CHEMICALS (2.5%)
2,000 Georgia Gulf Corp. ........... 15.00 4/15/00 2,220,000
---------------
COMPUTER EQUIPMENT (0.4%)
1,450 Memorex Telex Corp.(b)........ 10.00+ 2/15/98 318,936
---------------
CONSUMER PRODUCTS (0.6%)
500 Playtex Family Products
Corp. ...................... 14.75 12/15/97 528,750
---------------
CONSUMER SERVICES (1.7%)
1,500 Envirotest Systems Corp. ..... 9.625 4/ 1/03 1,560,000
---------------
CONTAINERS (3.2%)
2,000 Crown Packaging-- 144A**...... 12.25++ 11/ 1/03 900,000
4,000 Ivex Packaging Corp.
(Series B).................. 13.25++ 3/15/05 1,960,000
---------------
2,860,000
---------------
ENTERTAINMENT, GAMING & LODGING (12.1%)
3,000 Aztar Mortgage Funding,
Inc. ....................... 13.50 9/15/96 3,150,000
1,000 Belle Casino, Inc. --144 A**.. 12.00 10/15/00 990,000
1,000 Boomtown, Inc. --144 A**...... 11.50 11/ 1/03 1,017,500
1,000 Casino America, Inc. ......... 11.50 11/15/01 1,010,000
2,000 Fair Lanes, Inc. ............. 11.875 8/15/97 1,360,000
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ------------- --------------- --------------- ---------------
<C> <S> <C> <C> <C>
$ 2,000 Treasury Bay Gaming & Resorts,
Inc.--
144 A**..................... 12.25% 11/15/00 $ 2,000,000
1,500 Trump Plaza Holding Assoc. ... 12.50+ 6/15/03 1,395,000
1 Trump's Taj Mahal Funding,
Inc. ....................... 11.35+ 11/15/99 570
---------------
10,923,070
---------------
FOOD & BEVERAGE (0.6%)
1,000 Specialty Foods............... 13.00++ 08/15/05 500,000
---------------
FOREST & PAPER PRODUCTS (4.8%)
800 Container Corp. .............. 15.50++ 12/ 1/04 1,552,000
3,000 Fort Howard Corp. ............ 14.125++ 11/ 1/04 2,775,000
---------------
4,327,000
---------------
HEALTHCARE--DIVERSIFIED (0.6%)
500 Epic Healthcare Group,
Inc. ....................... 15.00 2/ 1/01 531,250
---------------
HEALTHCARE--PRODUCTS (6.1%)
3,000 Alco Health Services Corp. ... 14.50 9/15/99 3,330,000
2,000 Scherer R.P. Corp. ........... 14.00 11/ 1/99 2,175,000
---------------
5,505,000
---------------
MANUFACTURING (3.5%)
2,000 Snydergeneral Corp. .......... 14.25 11/15/00 2,100,000
1,000 Talley Industries, Inc. ...... 12.25++ 10/15/05 585,000
500 Uniroyal Technology Corp. .... 11.75 6/ 1/03 513,750
---------------
3,198,750
---------------
MANUFACTURING--DIVERSIFIED (9.4%)
2,000 Interlake Corp. .............. 12.125 3/ 1/02 2,025,000
3,000 Jordan Industries, Inc. ...... 11.75++ 8/ 1/05 1,785,000
3,000 MS Essex Holdings, Inc. ...... 16.00++ 5/15/04 2,625,000
1,000 Roadmaster Industries,
Inc. ....................... 11.75 7/15/02 1,002,500
1,549 Thermadyne Industries, Inc.
(b) ........................ 12.75+* 11/ 1/99 1,070,843
---------------
8,508,343
---------------
OIL & GAS (1.7%)
1,500 Presidio Oil Co. ............. 14.05*** 07/15/02 1,575,000
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--HIGH YIELD PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ------------- --------------- --------------- ---------------
RESTAURANTS (6.3%)
<C> <S> <C> <C> <C>
$ 4,000 American Restaurant Group
Holdings (Units)--
144A** ..................... 14.00++% 12/15/05 $ 2,050,000
2,000 Carrols Corp. ................ 11.50 8/15/03 2,047,500
1,000 Flagstar Corp. ............... 11.25 11/ 1/04 1,020,000
500 Foodmaker, Inc. .............. 14.25 5/15/98 532,500
---------------
5,650,000
---------------
RETAIL (5.6%)
1,000 Cole National Group Corp. .... 11.25 10/ 1/01 1,030,000
2,000 Cort Furniture Rental Corp.
(Series Unit)............... 12.00 9/ 1/00 2,019,980
2,000 County Seat Stores Co.
(Units)..................... 12.00 10/ 1/01 1,960,000
---------------
5,009,980
---------------
RETAIL--FOOD CHAINS (8.0%)
2,000 Big Bear Stores Co. .......... 13.75 6/15/99 2,145,000
2,000 Food 4 Less Holdings, Inc. ... 15.25++ 12/15/04 1,290,000
15,000 Grand Union Capital Corp.
(Series A).................. 0.00 1/15/07 1,800,000
2,000 Purity Supreme, Inc. (Series
B).......................... 11.75 8/ 1/99 1,960,000
---------------
7,195,000
---------------
TEXTILES (2.1%)
2,000 JPS Textiles Group, Inc. ..... 10.85 6/ 1/99 1,935,000
---------------
TRANSPORTATION (2.7%)
1,250 Greyhound Lines, Inc.
(Conv.) .................... 8.50 3/31/07 1,475,000
2,000 Transtar Holdings (Series A
Units)-- 144A**............. 13.375++ 12/15/03 990,000
---------------
2,465,000
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $78,506,483).................................... 77,384,746
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ---------------
<C> <S> <C> <C> <C>
PREFERRED STOCK (D)(0.1%)
AIRLINES (0.1%)
19,893 Trans World Airlines, Inc. $12.00 (Identified Cost $103,338) .... $ 54,706
---------------
COMMON STOCKS (1.3%)
AIRLINES (0.1%)
11,977 Trans World Airlines, Inc. (d) .................................. 67,371
---------------
BUILDING & CONSTRUCTION (0.4%)
13,538 USG Corp. (a) ................................................... 395,987
---------------
ENTERTAINMENT, GAMING & LODGING (0.1%)
4,000 Trump Taj Mahal, Inc. Class A (a) ............................... 100,000
71,890 Vagabonds Inns Inc. Class D (c)(d)............................... 72
---------------
100,072
---------------
FOOD & BEVERAGE (0.0%)
15,000 Specialty Foods ................................................. 30,000
---------------
FOREST & PAPER PRODUCTS (0.1%)
9,504 Gaylord Container Corp. Class A (a) ............................. 43,362
---------------
HEALTHCARE--DIVERSIFIED (0.6%)
20,309 Charter Medical Corp. (a) ....................................... 525,495
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $9,458,763)................................... 1,162,287
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
WARRANTS EXPIRATION DATE
- ------------- ---------------
<C> <S> <C> <C> <C>
WARRANTS (A)(0.6%)
AEROSPACE (0.0%)
1,500 Sabreliner Corp. (d)........................... 4/15/03 30,000
---------------
BUILDING & CONSTRUCTION (0.2%)
7,016 National Gypsum
Corp. (d) ................................... 7/ 1/00 115,763
6,320 USG Corp. (d).................................. 5/ 6/98 105,860
---------------
221,623
---------------
CONTAINERS (0.1%)
2,000 Crown Packaging-- 144A** ...................... 10/15/03 50,000
---------------
ENTERTAINMENT, GAMING & LODGING (0.1%)
1,000 Belle Casino, Inc-- 144A**..................... 10/15/03 20,000
3,263 Casino America, Inc............................ 10/15/03 19,986
100 Trump Plaza Holding Assoc...................... 6/15/96 70,000
---------------
109,986
---------------
FOREST & PAPER PRODUCTS (0.2%)
50,484 Gaylord Container Corp. (d).................... 10/15/03 183,005
---------------
MANUFACTURING (0.0%)
5,000 Uniroyal Technology Corp. ..................... 6/ 1/03 10,000
---------------
RETAIL--FOOD CHAINS (0.0%)
6,931 Purity Supreme, Inc (d)........................ 8/ 1/97 346
---------------
TOTAL WARRANTS
(IDENTIFIED COST $386,263)..................................... 604,960
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--HIGH YIELD PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ------------- ---------------
SHORT-TERM INVESTMENTS (10.3%)
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATION (3.5%)
$ 3,000 U.S. Treasury Note 13.125% due 5/15/94 (Identified Cost
$3,230,000).................................................... $ 3,107,813
---------------
COMMERCIAL PAPER (E) (6.5%)
AUTOMOTIVE FINANCE (4.0%)
3,600 Ford Motor Credit Co. 3.352% due 1/3/94........ 3,599,330
---------------
U.S. GOVERNMENT AGENCY (2.5%)
2,300 Federal Farm Credit Bank 3.091% due 1/5/94..... 2,299,210
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $5,898,540).................................... 5,898,540
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ------------- ---------------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT (0.3%)
$ 303 The Bank of New York 2.75% due 1/3/94 (Identified Cost $302,934)
(dated 12/31/93; proceeds $303,003; collateralized by $303,902
U.S. Treasury Note 5.125% due 3/31/98 valued at $308,993)...... $ 302,934
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $9,431,474).......................
9,309,287
---------------
TOTAL INVESTMENTS (IDENTIFIED
COST $97,886,321)(F)...................................... 98.1 % 88,515,986
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.............. 1.9 1,684,415
------ ---------------
NET ASSETS.................................................. 100.0 % $ 90,200,401
------ ---------------
------ ---------------
</TABLE>
- ----------
* Adjustable rate. Rate shown is the rate in effect at December 31, 1993.
** Resale is restricted to qualified institutional investors.
*** Floating rate. Coupon is linked to the Gas Index. Rate shown is the rate in
effect at December 31, 1993
+ Payment in kind securities.
++ Currently zero coupon bond under terms of initial offering.
(a) Non-income producing security.
(b) Non-income producing, bond in default.
(c) Non-income producing, issuer in bankruptcy.
(d) Acquired through exchange offer.
(e) Commercial paper was purchased on a discount basis. The rate shown has been
adjusted to reflect a bond equivalent yield.
(f) The aggregate cost for federal income tax purposes is $97,973,009; the
aggregate gross unrealized appreciation is $1,704,133 and the aggregate
gross unrealized depreciation is $11,161,156, resulting in net unrealized
depreciation of $9,457,023.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--UTILITIES PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ------------- --------------- --------------- ---------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (11.5%)
UTILITIES--ELECTRIC (8.6%)
$ 2,000 Arizona Public Service
Company..................... 7.250% 8/ 1/23 $ 1,920,120
2,000 Arizona Public Service
Company..................... 8.000 2/ 1/25 2,084,680
5,000 Arkansas Power & Light
Company..................... 7.000 10/ 1/23 4,653,450
1,000 Central Power & Light
Company..................... 7.500 4/ 1/23 1,013,980
2,000 Consumer Power Company........ 7.375 9/15/23 1,933,240
2,000 Dayton Power & Light
Company..................... 7.875 2/15/24 2,073,420
1,000 Dayton Power & Light
Company..................... 8.150 1/15/26 1,070,340
2,000 Florida Power & Light
Company..................... 7.050 12/ 1/26 1,936,040
1,000 Georgia Power Company......... 8.625 6/ 1/22 1,071,120
1,000 Illinois Power Company........ 8.750 7/ 1/21 1,101,690
1,000 New York State Electric & Gas
Corp. ...................... 8.875 11/ 1/21 1,122,980
1,000 Niagara Mohawk Power Corp. ... 7.375 8/ 1/03 1,049,860
1,000 Old Dominion Electric
Company..................... 8.760 12/ 1/22 1,165,640
2,000 Pacific Gas & Electric
Company..................... 8.750 1/ 1/01 2,315,540
4,000 Pacific Gas & Electric
Company..................... 7.250 8/ 1/26 3,950,920
1,000 Pennsylvania Power & Light
Company..................... 7.875 2/ 1/23 1,048,850
2,000 Philadelphia Electric
Company..................... 7.750 5/ 1/23 1,995,200
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) COUPON RATE MATURITY DATE VALUE
- ------------- --------------- --------------- ---------------
<C> <S> <C> <C> <C>
$ 500 Public Service Company of New
Hampshire................... 9.170% 5/15/98 $ 558,320
2,000 South Carolina Electric & Gas
Company..................... 7.625 6/ 1/23 2,026,980
1,000 Texas Utilities Company....... 7.460 1/ 1/15 1,017,690
1,000 Union Electric Company........ 8.250 10/15/22 1,097,290
2,000 Western Resources, Inc........ 7.650 4/15/23 2,037,520
3,000 Wisconsin Electric Power
Company..................... 7.050 8/ 1/24 2,911,350
1,000 Wisconsin Electric Power
Company..................... 7.700 12/15/27 1,049,640
---------------
42,205,860
---------------
UTILITIES--NATURAL GAS (0.4%)
1,000 Enron Corp. .................. 7.625 9/10/04 1,076,660
1,000 Panhandle Eastern Pipeline
Company..................... 7.950 3/15/23 1,024,420
---------------
2,101,080
---------------
UTILITIES--TELEPHONE (2.5%)
1,000 American Telephone & Telegraph
Company .................... 8.125 1/15/22 1,086,450
2,000 GTE Corp...................... 7.830 5/ 1/23 2,094,580
5,000 Southern New England Telephone
Company..................... 7.250 12/15/33 4,942,000
2,000 Sprint Corp. ................. 9.250 4/15/22 2,384,020
2,000 U.S. West Communications,
Inc. ....................... 6.875 9/15/33 1,867,800
---------------
12,374,850
---------------
TOTAL CORPORATE BONDS
(IDENTIFIED COST $55,384,840).................................. 56,681,790
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--UTILITIES PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ------------- ---------------
PREFERRED STOCK (0.1%)
<C> <S> <C> <C> <C>
UTILITIES--ELECTRIC (0.1%)
4,000 Cleveland Electric Illuminating Co. Series N, $9.125 (Identified
Cost $408,000)................................................. $ 407,500
---------------
COMMON STOCKS (83.4%)
UTILITIES--ELECTRIC (40.8%)
55,000 Atlantic Energy, Inc. ........................................... 1,196,250
230,000 Baltimore Gas & Electric Company................................. 5,836,250
265,000 CMS Energy Corp. ................................................ 6,658,125
125,000 Carolina Power & Light Company................................... 3,765,625
140,000 Centerior Energy Corp. .......................................... 1,837,500
165,000 Central & South West Corp. ...................................... 4,991,250
130,000 Consolidated Edison Company of New York, Inc. ................... 4,176,250
205,000 DPL, Inc. ....................................................... 4,228,125
135,000 DQE, Inc. ....................................................... 4,657,500
150,000 Detroit Edison Company........................................... 4,500,000
200,000 Entergy Corp. ................................................... 7,200,000
145,000 FPL Group, Inc. ................................................. 5,673,125
175,000 General Public Utilities Corp. .................................. 5,403,125
115,000 Hawaiian Electric Industries, Inc. .............................. 4,125,625
145,000 Houston Industries, Inc. ........................................ 6,905,625
265,000 Illinois Power Company........................................... 5,863,125
145,000 IPALCO Enterprises, Inc. ........................................ 5,147,500
160,000 Kansas City Power & Light Company................................ 3,680,000
185,000 Long Island Lighting Company..................................... 4,509,375
150,000 Montana Power Company............................................ 3,862,500
180,000 NIPSCO Industries, Inc. ......................................... 5,917,500
110,000 New England Electric System...................................... 4,303,750
110,000 New York State Electric & Gas Corp. ............................. 3,382,500
240,000 Niagara Mohawk Power Corp. ...................................... 4,860,000
100,000 Northeast Utilities.............................................. 2,375,000
255,000 PSI Resources, Inc............................................... 6,757,500
150,000 Pacific Gas & Electric Company................................... 5,268,750
310,000 Pacificorp....................................................... 5,967,500
240,000 Pinnacle West Capital Corp....................................... 5,370,000
110,000 Portland General Corp. .......................................... 2,255,000
130,000 Potomac Electric Power Company................................... 3,477,500
220,000 Public Service Company of Colorado............................... 7,067,500
215,000 Public Service Company of New Mexico*............................ 2,418,750
155,000 Public Service Enterprise Group, Inc............................. 4,960,000
100,000 Puget Sound Power & Light Company................................ 2,487,500
145,000 SCEcorp.......................................................... 2,900,000
120,000 San Diego Gas & Electric Company................................. 3,015,000
90,000 SCANA Corp. ..................................................... 4,477,500
140,000 Southern Company................................................. 6,177,500
<CAPTION>
NUMBER
OF SHARES VALUE
- ------------- ---------------
<C> <S> <C> <C> <C>
140,000 Texas Utilities Electric Company................................. $ 6,055,000
120,000 United Illuminating Company...................................... 4,830,000
170,000 Western Resources Corp. ......................................... 5,928,750
210,000 Wisconsin Energy Corp............................................ 5,801,250
---------------
200,270,625
---------------
UTILITIES--NATURAL GAS (12.1%)
90,000 Apache Corp. .................................................... 2,103,750
120,000 Burlington Resources, Inc. ...................................... 5,085,000
120,000 Columbia Gas System*............................................. 2,685,000
145,000 El Paso Natural Gas Company...................................... 5,220,000
180,000 ENSERCH Corp. ................................................... 2,925,000
65,000 Equitable Resource, Inc.......................................... 2,380,625
100,000 Louisiana Land & Exploration..................................... 4,012,500
130,000 Panhandle Eastern Corp........................................... 3,071,250
100,000 Questar Corp. ................................................... 3,300,000
200,000 Seagull Energy Corp.*............................................ 5,075,000
145,000 Tenneco, Inc. ................................................... 7,630,625
145,000 TransCanada Pipelines Ltd. ...................................... 2,229,375
70,000 Transco Energy Company........................................... 988,750
85,000 UGI Corp. ....................................................... 1,912,500
110,000 USX-Delhi Group.................................................. 1,691,250
150,000 Union Texas Petroleum Holdings, Inc.............................. 3,056,250
250,000 Williams Companies, Inc. ........................................ 6,093,750
---------------
59,460,625
---------------
TELECOMMUNICATIONS (30.5%)
225,000 ALLTEL Corp. .................................................... 6,637,500
130,000 American Telephone & Telegraph Company........................... 6,825,000
185,000 BCE, Inc. ....................................................... 6,451,875
300,000 Cable & Wireless PLC ADR+........................................ 7,200,000
155,000 Century Telephone Enterprises, Inc. ............................. 3,991,250
55,000 Cincinnati Bell, Inc. ........................................... 990,000
180,000 Comcast Corp. (Class A).......................................... 6,502,500
85,000 Compania De Telefonos De Chile ADR+.............................. 8,659,375
155,000 Comsat Corp...................................................... 4,611,250
110,000 Ericsson (L.M.) TEL ADR+......................................... 4,413,750
165,000 GTE Corp. ....................................................... 5,775,000
80,000 General Instruments Corp. ....................................... 4,490,000
110,000 MCI Communications Corp. ........................................ 3,093,750
100,000 MFS Communications Co., Inc.*.................................... 3,250,000
115,000 McCaw Cellular Communications (Class A)*......................... 5,778,750
180,000 Northern Telecom Ltd. ........................................... 5,557,500
140,000 NYNEX Corp. ..................................................... 5,617,500
130,000 Pacific Telesis Group, Inc. ..................................... 7,020,000
115,000 Rochester Telephone Corp. ....................................... 5,189,375
185,000 Southern New England Telecommunications Corp. ................... 6,683,125
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--UTILITIES PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ------------- ---------------
<C> <S> <C> <C> <C>
130,000 Southwestern Bell Corp. ......................................... $ 5,395,000
245,000 Tele-Communications, Inc. (Class A)*............................. 7,380,625
95,000 Telecommunications Corp. of New Zealand Ltd. ADR+................ 4,809,375
165,000 Telefonos De Mexico SA Series L ADR+............................. 11,137,500
135,000 Telephone Data Systems, Inc. .................................... 7,036,875
110,000 U.S. West, Inc. ................................................. 5,046,250
---------------
149,543,125
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $373,798,489)................................. 409,274,375
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
- -------------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS (6.4%)
COMMERCIAL PAPER (A)(6.3%)
AUTOMOTIVE FINANCE (1.5%)
$ 7,575 Ford Motor Credit Co. 3.203% due 1/11/94......................... 7,568,267
---------------
FINANCE--DIVERSIFIED (4.8%)
5,500 American General Finance Corp. 3.224% due 1/ 4/94................ 5,498,524
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ------------- ---------------
<C> <S> <C> <C> <C>
$ 18,000 General Electric Capital Corp. 3.402% due 1/3/94................. $ 17,996,600
---------------
23,495,124
---------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $31,063,391)................................... 31,063,391
---------------
REPURCHASE AGREEMENT (0.1%)
193 The Bank of New York 2.75% due 1/ 3/94 (dated 12/31/93: proceeds
$192,958: collateralized by $193,531 U.S. Treasury Note 5.125%
due 3/31/98 valued at $196,772) (Identified Cost $192,914)..... 192,914
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED COST $31,256,305)....... 31,256,305
---------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED COST $460,847,634)(B).............. 101.4 % 497,619,970
LIABILITIES IN EXCESS OF OTHER ASSETS............................ (1.4 ) (6,685,936)
------ -------------
NET ASSETS....................................................... 100.0 % $ 490,934,034
------ -------------
------ -------------
</TABLE>
- ----------
* Non-income producing security.
+ American Depository Receipt.
(a) Commercial paper was purchased on a discount basis. The interest rates shown
have been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost for federal income tax purposes is $460,887,456; the
aggregate gross unrealized appreciation is $45,950,925 and the aggregate
gross unrealized depreciation is $9,218,411, resulting in net unrealized
appreciation of $36,732,514.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--DIVIDEND GROWTH PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ---------------
<C> <S> <C>
COMMON STOCKS (91.2%)
AIRCRAFT & AEROSPACE (3.9%)
145,000 Raytheon Co. ............................................... $ 9,570,000
150,000 United Technologies Corp. .................................. 9,300,000
---------------
18,870,000
---------------
ALUMINUM (2.0%)
139,000 Aluminum Co. of America..................................... 9,643,125
---------------
AUTO PARTS (1.9%)
136,000 TRW, Inc. .................................................. 9,418,000
---------------
AUTOMOBILES (3.9%)
146,000 Ford Motor Co. ............................................. 9,417,000
172,000 General Motors Corp. ....................................... 9,438,500
---------------
18,855,500
---------------
BANKING (3.9%)
206,100 BankAmerica Corp. .......................................... 9,557,888
118,000 Bankers Trust N.Y. Corp. ................................... 9,336,750
---------------
18,894,638
---------------
BEVERAGES (2.0%)
235,000 PepsiCo, Inc. .............................................. 9,605,625
---------------
CHEMICALS (6.0%)
166,800 Dow Chemical Co. (The)...................................... 9,465,900
240,500 Grace (W.R.) & Co. ......................................... 9,770,313
129,000 PPG Industries, Inc. ....................................... 9,787,875
---------------
29,024,088
---------------
COMPUTER EQUIPMENT (2.0%)
173,000 International Business Machines Corp........................ 9,774,500
---------------
CONGLOMERATES (4.1%)
87,400 Minnesota Mining & Manufacturing Co......................... 9,504,750
193,500 Tenneco, Inc. .............................................. 10,182,938
---------------
19,687,688
---------------
COSMETICS (2.0%)
163,700 Gillette Co. (The).......................................... 9,760,612
---------------
DRUGS (6.1%)
338,000 Abbott Laboratories......................................... 9,971,000
146,800 American Home Products Corp. ............................... 9,505,300
168,200 Bristol-Myers Squibb Co. ................................... 9,776,625
---------------
29,252,925
---------------
ELECTRIC--MAJOR (3.6%)
94,600 General Electric Co. ....................................... 9,921,175
525,000 Westinghouse Electric Corp. ................................ 7,415,625
---------------
17,336,800
---------------
FINANCE (2.1%)
306,000 Household International, Inc. .............................. 9,983,250
---------------
FOODS (4.0%)
138,700 Quaker Oat's Co. (The)...................................... 9,847,700
377,000 Sara Lee Corp. ............................................. 9,425,000
---------------
19,272,700
---------------
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ---------------
<C> <S> <C>
FOREST PRODUCTS (2.0%)
137,300 Georgia Pacific Corp. ...................................... $ 9,439,375
---------------
HOUSEHOLD PRODUCTS (2.0%)
168,900 Procter & Gamble Co. ....................................... 9,627,300
---------------
INSURANCE (2.0%)
159,000 Aetna Life & Casualty Co. .................................. 9,599,625
---------------
NATURAL GAS (2.0%)
269,000 El Paso Natural Gas Co. .................................... 9,684,000
---------------
NATURAL GAS--PIPELINES (2.1%)
428,000 Panhandle Eastern Corp. .................................... 10,111,500
---------------
OFFICE EQUIPMENT & SUPPLIES (2.0%)
233,000 Pitney-Bowes, Inc. ......................................... 9,640,375
---------------
OIL & GAS PRODUCTS (2.0%)
225,000 Burlington Resources, Inc. ................................. 9,534,375
---------------
OIL--DOMESTIC (1.9%)
87,000 Atlantic Richfield Co. ..................................... 9,156,750
---------------
OIL--INTERNATIONAL (5.9%)
152,000 Exxon Corp. ................................................ 9,576,000
123,500 Mobil Corp. ................................................ 9,756,500
89,400 Royal Dutch Petroleum Co. .................................. 9,331,125
---------------
28,663,625
---------------
PAPER & FOREST PRODUCTS (2.0%)
211,500 Weyerhaeuser Co. ........................................... 9,438,187
---------------
PHOTOGRAPHY (2.1%)
181,000 Eastman Kodak Co. .......................................... 10,136,000
---------------
RAILROADS (2.0%)
169,000 Burlington Northern, Inc. .................................. 9,780,875
---------------
RETAIL (4.1%)
454,800 K-Mart Corp. ............................................... 9,664,500
406,000 Woolworth Corp. ............................................ 10,302,250
---------------
19,966,750
---------------
TELECOMMUNICATIONS (5.8%)
159,800 Bell Atlantic Corp. ........................................ 9,428,200
273,000 GTE Corp. .................................................. 9,555,000
199,500 U.S. West, Inc. ............................................ 9,152,062
---------------
28,135,262
---------------
TOBACCO (1.9%)
169,000 Philip Morris Cos., Inc. ................................... 9,421,750
---------------
UTILITIES--ELECTRIC (3.9%)
336,000 Commonwealth Edison Co. .................................... 9,492,000
245,000 FPL Group, Inc. ............................................ 9,585,625
---------------
19,077,625
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $393,148,542)............................ 440,792,825
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--DIVIDEND GROWTH PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ---------- ------ -------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (7.6%)
$ 2,000 U.S. Treasury Bond................. 8.125 % 8/15/19 $ 2,380,313
5,000 U.S. Treasury Bond................. 8.00 11/15/21 5,919,531
5,000 U.S. Treasury Bond................. 7.125 2/15/23 5,407,031
8,000 U.S. Treasury Bond................. 6.25 8/15/23 7,895,000
10,000 U.S. Treasury Note................. 4.25 7/31/95 10,025,000
5,000 U.S. Treasury Note................. 6.375 1/15/99 5,249,219
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (IDENTIFIED COST
$34,736,875)....................................... 36,876,094
------------
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ---------- ------ -------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (A)(2.0%)
ENERGY (0.3%)
$ 1,400 Exxon Supply Co. .................. 3.201 % 1/ 3/94 $ 1,399,751
------------
FINANCE--ENERGY (1.7%)
8,000 Chevron Oil Finance Co. ........... 3.302 1/ 3/94 7,998,533
------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $9,398,284)........................ 9,398,284
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED COST
$437,283,701)(B)......................... 100.8 % 487,067,203
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS................................... (0.8 ) (3,922,063)
------- -------------
NET ASSETS................................. 100.0 % $ 483,145,140
------- -------------
------- -------------
</TABLE>
- ----------
(a) Commercial Paper was purchased on a discount basis. The rates shown have
been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost for federal income tax purpose is $437,803,312; the
aggregate gross unrealized appreciation is $52,895,118 and the aggregate
unrealized depreciation is $3,631,227, resulting in net unrealized
appreciation of $49,263,891.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--CAPITAL GROWTH PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS (98.0%)
ADVERTISING (2.3%)
36,800 Interpublic Group of Cos., Inc.................................. $ 1,177,600
-----------
APPAREL (2.4%)
36,500 Cintas Corp. ................................................... 1,222,750
-----------
AUTOMOTIVE (2.4%)
31,600 Genuine Parts................................................... 1,188,950
-----------
BANKING (7.0%)
30,300 Banc One Corp. ................................................. 1,185,488
43,800 Central Fidelity Banks, Inc. ................................... 1,215,450
22,100 Fifth Third Bancorp ............................................ 1,138,150
-----------
3,539,088
-----------
BEVERAGES--SOFT DRINKS (2.3%)
24,000 Anheuser-Busch Cos., Inc. ...................................... 1,179,000
-----------
BUSINESS SYSTEMS (2.4%)
40,900 General Motors Corp., Class "E"................................. 1,196,325
-----------
CHEMICALS--SPECIALTY (4.8%)
32,700 Nalco Chemical.................................................. 1,226,250
25,500 Sigma-Aldrich, Inc. ............................................ 1,211,250
-----------
2,437,500
-----------
COMPUTER SERVICES (2.3%)
20,700 Automatic Data Processing, Inc. ................................ 1,143,675
-----------
CONSUMER SERVICES (2.4%)
29,500 Block (H & R), Inc. ............................................ 1,202,125
-----------
COSMETICS (2.4%)
10,700 International Flavors/Fragrances ............................... 1,217,125
-----------
DISTRIBUTION (2.3%)
39,500 Sysco Corp. .................................................... 1,155,375
-----------
DRUGS & HEALTHCARE (6.2%)
40,100 Abbott Laboratories............................................. 1,182,950
19,570 Block Drugs, Inc., (Class A).................................... 724,090
25,900 Forest Labs, Inc.*.............................................. 1,233,488
-----------
3,140,528
-----------
ELECTRONICS (6.7%)
37,200 Dionex Corp*.................................................... 1,162,500
57,100 EG & G, Inc. ................................................... 1,049,212
20,300 Grainger (W.W.), Inc. .......................................... 1,167,250
-----------
3,378,962
-----------
ENTERTAINMENT (2.5%)
34,100 Circus Circus Entrp.*........................................... 1,261,700
-----------
FOODS (11.7%)
45,500 ConAgra, Inc. ................................................. 1,200,062
30,100 Smucker (J.M.) Co., (Class A)................................... 673,488
22,000 Smucker (J.M.) Co., (Class B)................................... 462,000
16,900 Tootsie Roll Industries, Inc. .................................. 1,199,900
49,000 Tyson Foods, Inc., (Class A).................................... 1,163,750
27,100 Wrigley (W.W.) Jr., (Class A)................................... 1,195,788
-----------
5,894,988
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------- ---------------
<C> <S> <C>
HOUSEHOLD PRODUCTS (2.4%)
34,100 Rubbermaid, Inc. ....................................... $ 1,184,975
---------------
INSURANCE (2.3%)
73,800 Crawford & Co., (Class B)............................... 1,171,575
---------------
MACHINERY--DIVERSIFIED (2.4%)
29,000 Thermo Electron Co.*.................................... 1,218,000
---------------
MANUFACTURED HOUSING (2.4%)
50,100 Clayton Homes, Inc.*.................................... 1,214,925
---------------
MANUFACTURING (2.4%)
42,800 Federal Signal Corp. ................................... 1,198,400
---------------
MEDICAL EQUIPMENT (2.6%)
45,800 Stryker Corp. .......................................... 1,282,400
---------------
MEDICAL PRODUCTS & SUPPLIES (2.3%)
112,900 Biomet, Inc.*........................................... 1,157,225
---------------
RESTAURANTS (4.6%)
67,200 International Dairy Queen, (Class A)*................... 1,176,000
20,000 McDonald's Corp. ....................................... 1,140,000
---------------
2,316,000
---------------
RETAIL (2.4%)
45,400 Wal-Mart Stores, (Class A) ............................. 1,135,000
---------------
RETAIL--DEPARTMENT STORES (2.5%)
32,800 Dillard Dept. Stores, (Class A)......................... 1,246,400
---------------
RETAIL--DRUG STORES (2.3%)
28,300 Walgreen Co. ........................................... 1,156,762
---------------
SUPERMARKETS (2.3%)
44,100 Albertson's, Inc. ...................................... 1,179,675
---------------
TOBACCO (4.7%)
20,800 Philip Morris Cos., Inc. ............................... 1,159,600
42,700 UST, Inc. .............................................. 1,184,925
---------------
2,344,525
---------------
UTILITIES (2.3%)
32,695 Citizens Utilities Co. of Delaware, (Series A).......... 588,520
30,565 Citizens Utilities Co. of Delaware, (Series B).......... 550,170
---------------
1,138,690
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $48,149,594) ........................ 49,280,243
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
----------
<C> <S> <C>
COMMERCIAL PAPER (A)(1.9%)
ENERGY (1.9%)
$ 1,000 Exxon Supply Co. 3.2% due 1/3/94 (Amortized Cost
$999,822)............................................ 999,822
---------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED
COST $49,149,416)(B)............................................ 99.9 % 50,280,065
OTHER ASSETS IN EXCESS OF LIABILITIES............................. 0.1 28,773
----- -----------
NET ASSETS........................................................ 100.0% $50,308,838
----- -----------
----- -----------
</TABLE>
- ------------
* Non-income producing security.
(a) Commercial Paper was purchased on a discount basis. The rate shown has been
adjusted to reflect a bond equivalent yield.
(b) The aggregate cost for federal income tax purposes is $49,512,309; the
aggregate gross unrealized appreciation is $3,579,400 and the aggregate
gross unrealized depreciation is $2,811,644, resulting in net unrealized
appreciation of $767,756.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EUROPEAN GROWTH PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS,
WARRANTS AND BONDS (86.9%)
AUSTRIA (2.4%)
ELECTRIC UTILITIES
7,500 Evn Energieversorgung Ni....... $ 962,879
15,500 Oester Elex CI A............... 943,478
------------
1,906,357
------------
BELGIUM (2.1%)
RETAIL STORES
9,520 Colruyt SA..................... 1,578,772
------------
DENMARK (1.4%)
MULTI-INDUSTRY
14,000 Sophus Berendsen............... 1,110,095
------------
FINLAND (0.1%)
ELECTRONICS
2,000 Nokia AB (Pref.)............... 99,777
------------
FRANCE (4.7%)
AUTOMOTIVE
1,505 Renault SA..................... 613,351
------------
BROADCAST MEDIA
2,380 Nrj SA......................... 205,259
------------
FINANCIAL SERVICES
5,405 Credit Local de France......... 446,676
------------
INSURANCE
7,873 Scor SA........................ 818,787
900 SA Francaise De Reassurance.... 127,843
------------
946,630
------------
MERCHANDISING
1,625 Agache (Societe Financiere).... 200,600
------------
MULTI-INDUSTRY
2,700 Eurafrance..................... 1,057,445
------------
TEXTILES
3,500 Hermes International*.......... 275,277
------------
TOTAL FRANCE................... 3,745,238
------------
GERMANY (5.6%)
BUSINESS SERVICES
101 Sap AG (Pref.)................. 94,515
------------
FOOD, BEVERAGE, TOBACCO
& HOUSEHOLD PRODUCTS
638 Binding Brauerei AG............ 212,703
860 Holsten Brauerei AG............ 271,886
------------
484,589
------------
INSURANCE
652 Koelnische Rueckers AG......... 304,694
------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
PHARMACEUTICAL
3,100 Gehe A.G....................... $ 917,687
1,120 Schering AG.................... 739,714
------------
1,657,401
------------
RETAIL
975 Ave Allgemeine Handels Der
Verba........................ 473,573
1,080 Hornback Holding AG (Pref.).... 1,039,834
1,020 Oppermann Versandhaus*......... 147,163
------------
1,660,570
------------
RETAIL STORES
367 Hornbach Baumarkt Holding...... 232,052
------------
TOTAL GERMANY.................. 4,433,821
------------
ITALY (5.4%)
ELECTRICAL EQUIPMENT
57,800 Ansaldo Trans.................. 168,488
------------
ELECTRICAL UTILITIES
110,000 Edison SPA..................... 477,772
------------
ELECTRICAL ELECTRONICS
10,625 Gewiss......................... 105,677
------------
FOREIGN GOVERNMENT OBLIGATION
ITL 305,000M Italy Republic 12.00% due
1/1/98....................... 197,963
------------
HOUSEHOLD FURNISHINGS AND APPLIANCES
32,700 Industrie Natuzzi SPA ADR*+.... 903,338
------------
MANUFACTURING
25,500 Fila Holdings, SPA ADR*+....... 392,062
------------
PUBLISHING
24,000 Silvio Berlusconi Editore*..... 204,285
------------
TELECOMMUNICATIONS
65,480 MedioBanca International
(Warrants 3/30/98)*.......... 80,511
702,750 Sip Itl 1000................... 1,475,764
377,000 Sip Itl (Warrants 12/31/94)*... 132,095
164,000 Softe SA (Warrants 3/24/97)*... 145,905
------------
1,834,275
------------
TOTAL ITALY.................... 4,283,860
------------
LUXEMBOURG (0.5%)
FINANCIAL SERVICES
290,000 Intrum Justitia, PLC........... 406,500
------------
NETHERLANDS (6.2%)
BUSINESS SERVICES
8,000 Randstad Holdings.............. 240,592
------------
INSURANCE
15,500 Aegon NV....................... 840,659
33,250 International Nederlanden...... 1,587,973
990 International Nederlanden
(Pref.)*..................... 4,169
------------
2,432,801
------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EUROPEAN GROWTH PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
PHARMACEUTICAL
43,750 OPG (Apoth. Coop.) UA.......... $ 1,261,760
------------
PUBLISHING
840 Elsevier....................... 78,680
------------
TRANSPORTATION
23,310 Boskalis Westminster........... 553,630
12,900 Boskalis Westminster (Pref.)... 306,384
------------
860,014
------------
TOTAL NETHERLANDS.............. 4,873,847
------------
NORWAY (4.0%)
BANKING
94,000 Sparebanken NK 100*............ 1,897,325
------------
INSURANCE
12,400 Vital Forsikring............... 141,609
------------
PUBLISHING
6,700 Schibsted...................... 306,947
------------
TELECOMMUNICATIONS
2,035 Alcatel........................ 64,045
------------
TRANSPORTATION
30,395 Havenlager..................... 16,145
30,395 Helikopter Service............. 409,674
36,300 Smedvig Tankships*............. 308,501
------------
734,320
------------
TOTAL NORWAY................... 3,144,246
------------
SPAIN (5.3%)
BANKING
2,120 Banco Popular ESP.............. 238,602
------------
ELECTRIC UTILITIES
281,000 Fuerzas Electricas De Catoluna,
Sec A. ...................... 1,693,268
------------
FINANCIAL SERVICES
1,180 Banco de Andalucia............. 131,074
44 Banco Pastor SA (Registered)... 2,092
------------
133,166
------------
OIL--RELATED
45,000 Repsol SA,..................... 1,388,850
------------
METAL & MINING
8,000 Acerinox....................... 612,932
6,600 Hullas del Coto Cortes Minas... 137,952
------------
750,884
------------
TOTAL SPAIN.................... 4,204,770
------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
SWEDEN (5.1%)
BANKING
41,550 Skand Enskilda Bknser A*....... $ 278,719
8,225 Svenska Handelsbank*........... 110,347
------------
389,066
------------
BUSINESS SERVICES
18,000 Getinge Industries*............ 403,201
------------
ENTERTAINMENT & LEISURE TIME
16,290 Kinnevik Industriforvatnings (B
Shares)...................... 353,189
------------
PHARMACEUTICAL
90,525 Astra AB (A Shares)............ 2,060,294
37,000 Astra AB (B Shares)............ 824,369
------------
2,884,663
------------
TOTAL SWEDEN................... 4,030,119
------------
SWITZERLAND (11.9%)
ELECTRICAL EQUIPMENT
1,600 Sprecher & Schuh Holdings AG... 473,277
------------
FINANCIAL SERVICES
855 Baer Holdings.................. 1,034,622
1,930 Bil GT Gruppe.................. 823,899
8,900 Safra Republic Holdings........ 823,250
8,000 Safra Republic Holdings
S.A.*........................ 734,118
------------
3,415,889
------------
HOUSEHOLD FURNISHINGS & APPLIANCES
1,100 Fust SA, Dipl.................. 299,496
------------
INDUSTRIALS
3,470 Hilti AG PTG Certs............. 2,122,823
1,290 Schindler Holdings............. 1,370,218
------------
3,493,041
------------
LEISURE
32 Reiseburo Kuoni (Bearer)....... 817,479
60 Reiseburo Kuoni................ 77,849
------------
895,328
------------
PHARMACEUTICAL
194 Roche Holdings NPV............. 822,951
54 Roche Holdings NPV (Warrants
5/12/94)*.................... 6,244
------------
829,195
------------
TOTAL SWITZERLAND.............. 9,406,226
------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EUROPEAN GROWTH PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
UNITED KINGDOM (32.2%)
AEROSPACE AND DEFENSE
90,000 British Aerospace.............. $ 545,787
50,000 Smiths Industries, PLC......... 337,888
------------
883,675
------------
BANKING
135,000 Royal Bank of Scotland Group,
PLC.......................... 904,333
195,000 TSB GROUP, PLC................. 693,410
------------
1,597,743
------------
BUILDING & CONSTRUCTION
207,400 CRH, PLC....................... 1,071,065
131,500 John Mowlem & Co., PLC......... 259,997
------------
1,331,062
------------
BUSINESS SERVICES
61,000 Saatchi & Saatchi Co., PLC*.... 119,707
9,259 Saatchi & Saatchi Co., PLC
(New)*....................... 18,170
------------
137,877
------------
CONGLOMERATES
134,159 BTR, PLC....................... 734,400
222,000 Harrison & Crosfield........... 612,538
------------
1,346,938
------------
ELECTRIC UTILITIES
75,000 Powergen, PLC.................. 604,217
110,000 Scottish Power, PLC............ 741,733
------------
1,345,950
------------
FOOD, BEVERAGE, TOBACCO &
HOUSEHOLD PRODUCTS
80,000 Allied Lyons, PLC.............. 799,130
170,000 Argyll Group, PLC.............. 687,287
94,261 BAT Industries, PLC............ 766,342
62,000 Dalgety, PLC................... 446,427
110,000 Grand Metropolitan PLC......... 764,456
107,000 Rothmans International Units... 753,080
48,500 Tate & Lyle, PLC............... 284,815
114,000 Vendome Luxury GRP Units*...... 647,595
------------
5,149,132
------------
FOREST PRODUCTS, PAPER & PACKAGING
51,500 De La Rue Co. ................. 649,699
------------
HEALTH & PERSONAL CARE
105,000 Smithkline Beecham............. 565,485
------------
<CAPTION>
SHARES/
PRINCIPAL
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
INSURANCE
38,000 Britannic Assurance, PLC....... $ 244,460
35,718 Commercial Union Assurance
Co., PLC..................... 339,927
39,000 Refuge Group................... 184,182
135,000 Royal Insurance, PLC........... 671,278
------------
1,439,847
------------
LEISURE
104,000 Granada Group, PLC............. 793,345
------------
OIL & RELATED
135,000 British Petroleum Co., PLC..... 719,084
84,500 Enterprise Oil................. 557,318
73,000 Lasmo Oil...................... 122,790
------------
1,399,192
------------
PHARMACEUTICAL
175,000 Glaxo Holdings, PLC............ 1,864,293
------------
REAL ESTATE
107,000 Hammerson Prop Inv & Dev,
PLC.......................... 647,300
67,500 MEPC, PLC...................... 536,823
------------
1,184,123
------------
RETAIL STORES
60,000 Kingfisher, PLC................ 684,336
240,000 Morrison Supermarkets.......... 389,532
289,000 Next, PLC...................... 976,500
------------
2,050,368
------------
TELECOMMUNICATIONS
260,700 British Telecomm, PLC.......... 1,815,608
------------
TRANSPORTATION
150,000 British Airways, PLC........... 993,748
------------
UTILITIES
105,000 Anglican Water, PLC............ 915,621
------------
TOTAL UNITED KINGDOM........... 25,463,706
------------
TOTAL COMMON AND PREFERRED
STOCKS, WARRANTS AND BONDS
(IDENTIFIED COST
$61,590,802)................. 68,687,334
------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EUROPEAN GROWTH PORTFOLIO DECEMBER 31, 1993
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- ------------
<C> <S> <C>
COMMERCIAL PAPER (A) (14.7%)
UNITED STATES
AUTO FINANCE
U.S. $2,500 Ford Motor Credit Co. 3.03% due 1/03/94............... $ 2,499,579
------------
FINANCE--DIVERSIFIED
3,500 General Electric Capital Corp. 3.25% due 1/05/94...... 3,498,737
------------
FINANCE--ENERGY
3,800 Chevron Oil Finance Co. 3.10%
due 1/11/94......................................... 3,796,430
1,800 Exxon Supply Company 3.10% due 1/07/94................ 1,799,070
------------
5,595,500
------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $11,593,816)... 11,593,816
------------
</TABLE>
<TABLE>
<CAPTION>
PURCHASED PUT OPTIONS ON FOREIGN CURRENCY (0.5%)
CURRENCY AMOUNT EXPIRATION MONTH/
(IN THOUSANDS) EXERCISE PRICE VALUE
------------------ ------------------------------------ ---------------
22,500 February 94/SFr 1.4650 $ 30,375
<C> <S> <C>
57,500 February 94/SFr 1.5030 36,800
39,000 February 94/DEM 1.6973 111,150
10,000 February 94/DEM 1.7170 19,500
5,000 February 94/DKR 6.7950 5,300
30,000 February 94/FFr 5.9195 37,500
45,000 February 94/NGlr 1.9055 113,850
25,000 February 94/BFr 7.3650 65,250
5,000 February 94/BFr 36.250 5,300
---------------
TOTAL PURCHASED PUT OPTIONS ON FOREIGN CURRENCY
(IDENTIFIED COST $628,640).......................
425,025
---------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED
COST $73,813,258) (B)............................ 102.1% 80,706,175
LIABILITIES IN EXCESS OF CASH
AND OTHER ASSETS................................. (2.1 ) (1,653,786)
----- ---------------
NET ASSETS......................................... 100.0% $ 79,052,389
-----
----- ---------------
---------------
</TABLE>
- ----------
*
Non-income producing security.
+
American Depository Receipt.
(a)
Commercial Paper was purchased on a discount basis. The rates shown have
been adjusted to reflect a bond equivalent yield.
(b)
The aggregate cost for federal income tax purposes is $73,775,551; the
aggregate gross unrealized appreciation is $7,865,898 and the aggregate
gross unrealized depreciation is $935,274, resulting in net unrealized
appreciation of $6,930,624.
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT DECEMBER 31, 1993:
<TABLE>
<CAPTION>
IN UNREALIZED
CONTRACTS TO EXCHANGE DELIVERY APPRECIATION/
RECEIVE FOR DATE (DEPRECIATION)
- --------------- -------------- -------- -------------
<S> <C> <C> <C>
FFr 6,213,817 US$ 1,067,116 1/04/94 $ (16,331)
L 94,108 US$ 139,045 1/04/94 (188)
US$ 210,038 DKR 364,500 1/05/94 519
FFr 779,031 US$ 132,466 1/10/94 (728)
L 302,304 US$ 449,829 1/10/94 (3,779)
L 346,575 US$ 519,239 1/10/94 (7,867)
US$ 126,287 L 84,870 1/10/94 1,061
ITL 252,074,142 US$ 150,227 1/31/94 (3,267)
-------------
Net Unrealized Depreciation.......................... $ (30,580)
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES--EUROPEAN GROWTH
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- ------------------------------------------------------------------------------------- -------------- ------------
<S> <C> <C>
Aerospace & Defense.................................................................. $ 883,675 1.1%
Automotive........................................................................... 3,112,930 3.9
Banking.............................................................................. 4,122,736 5.1
Broadcast Media...................................................................... 205,259 0.3
Building & Construction.............................................................. 1,331,062 1.6
Business Services.................................................................... 876,185 1.1
Conglomerates........................................................................ 1,346,938 1.7
Electric Utilities................................................................... 5,423,347 6.7
Electrical Equipment................................................................. 641,765 0.8
Electronics.......................................................................... 205,454 0.3
Entertainment & Leisure Time......................................................... 2,041,862 2.5
Financial Services................................................................... 13,496,468 16.7
Food, Beverage, Tobacco & Household Products......................................... 5,633,721 7.0
Foreign Government................................................................... 622,988 0.8
Forest Products, Paper & Packaging................................................... 649,699 0.8
Health & Personal Care............................................................... 565,485 0.7
Household Furnishings and Appliances................................................. 1,202,834 1.5
Industrials.......................................................................... 3,493,041 4.3
Insurance............................................................................ 5,265,581 6.5
Manufacturing........................................................................ 392,062 0.5
Merchandising........................................................................ 200,600 0.2
Metal & Mining....................................................................... 750,884 0.9
Multi-Industry....................................................................... 2,167,540 2.7
Oil & Related........................................................................ 2,788,042 3.5
Pharmaceuticals...................................................................... 8,497,312 10.5
Publishing........................................................................... 589,912 0.7
Real Estate.......................................................................... 1,184,123 1.5
Retail............................................................................... 1,660,570 2.1
Retail Stores........................................................................ 3,861,192 4.8
Telecommunications................................................................... 3,713,928 4.6
Textiles............................................................................. 275,277 0.3
Transportation....................................................................... 2,588,082 3.2
Utilities............................................................................ 915,621 1.1
-------------- -----
$ 80,706,175 100.0%
-------------- -----
-------------- -----
</TABLE>
SUMMARY OF INVESTMENTS BY TYPE DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TYPE OF INVESTMENT
- -------------------------------------------------------------------------------------
<S> <C> <C>
Bonds................................................................................ $ 197,963 0.2%
Commercial Paper..................................................................... 11,593,816 14.4
Common Stocks........................................................................ 66,579,937 82.5
Preferred Stocks..................................................................... 1,544,679 1.9
Put Options.......................................................................... 425,025 0.5
Warrants............................................................................. 364,755 0.5
-------------- -----
$ 80,706,175 100.0%
-------------- -----
-------------- -----
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EQUITY PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------- ---------------
<C> <S> <C>
COMMON STOCKS (88.9%)
AUTO RELATED (8.1%)
20,000 Allied Signal, Inc. .................................... $ 1,580,000
7,000 Automotive Inds. Hldg, Inc. (Class A)*.................. 203,000
37,000 China Tire Holdings Ltd. ............................... 989,750
16,000 Chrysler Corp. ......................................... 852,000
15,000 Dana Corp. ............................................. 898,125
12,000 Federal Mogul........................................... 348,000
39,500 Ford Motor Co. of Delaware.............................. 2,547,750
49,000 General Motors Corp. ................................... 2,688,875
41,000 Gentex Corp.*........................................... 1,435,000
35,000 Magna International, Inc. .............................. 1,741,250
24,000 Mascotech, Inc. ........................................ 669,000
10,000 Morton International, Inc. ............................. 935,000
---------------
14,887,750
---------------
BANKS (0.7%)
35,000 Citicorp*............................................... 1,286,250
---------------
CHEMICALS (0.3%)
10,000 Rohm & Haas Co. ........................................ 595,000
---------------
COMMUNICATIONS--EQUIPMENT &
SOFTWARE (7.4%)
40,000 Antec Corp.*............................................ 960,000
15,000 Cabletron Sys, Inc.*.................................... 1,687,500
15,000 Chipcom Corp.*.......................................... 746,250
35,000 Cisco System, Inc.*..................................... 2,257,500
12,000 FTP Software, Inc.*..................................... 312,000
40,000 General Instruments Corp.*.............................. 2,245,000
20,000 Glenayre Technologies, Inc.*............................ 855,000
7,500 Summa Four, Inc.*....................................... 290,625
30,000 Tellabs, Inc.*.......................................... 1,402,500
35,000 Three Com Corp.*........................................ 1,640,625
18,000 Wellfleet Communications, Inc.*......................... 1,156,500
---------------
13,553,500
---------------
COMPUTER SOFTWARE (2.6%)
55,000 Oracle Systems Corp.*................................... 1,581,250
40,000 Parametric Technology Corp.*............................ 1,530,000
17,500 Platinum Software Corp.*................................ 437,500
28,000 Sybase, Inc.*........................................... 1,176,000
---------------
4,724,750
---------------
CONSUMER/BUSINESS SERVICES (2.7%)
35,125 CUC International, Inc.*................................ 1,264,500
30,000 First Data Corp. ....................................... 1,222,500
30,000 Reuters Hldgs PLC (ADS)++ .............................. 2,366,250
---------------
4,853,250
---------------
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------- ---------------
<C> <S> <C>
CONSUMER PRODUCTS (1.9%)
24,000 Buenos Aires Embotelladora SA (B Shares) (ADR)+ ........ $ 1,080,000
28,000 Coca Cola Femsa SA* (ADR)+ ............................. 917,000
30,000 General Nutrition Co., Inc.*............................ 840,000
10,000 Nature's Bounty*........................................ 200,000
14,500 Perrigo Co.*............................................ 493,000
---------------
3,530,000
---------------
ELECTRONIC COMPONENTS (4.2%)
33,000 DSC Communications Corp.*............................... 2,025,375
140,000 EMC Corp Mass.*......................................... 2,310,000
25,000 General Motors (Class H)................................ 971,875
75,000 Silicon Graphics*....................................... 1,856,250
8,000 Zebra Technologies Corp.*............................... 452,000
---------------
7,615,500
---------------
ELECTRONICS--SEMICONDUCTORS (6.0%)
12,000 Altera Corp.*........................................... 391,500
47,000 Intel Corp. ............................................ 2,914,000
70,000 LSI Logic Corp.*........................................ 1,120,000
30,000 Linear Technology Corp. ................................ 1,162,500
25,000 Maxim Integrated Prods, Inc.*........................... 1,187,500
10,000 Microchip Technology, Inc.*............................. 387,500
28,000 Micron Technology, Inc. ................................ 1,298,500
13,000 Motorola, Inc. ......................................... 1,200,875
19,000 Texas Instruments, Inc. ................................ 1,206,500
5,000 Zilog,Inc.*............................................. 150,000
---------------
11,018,875
---------------
ENERGY (1.8%)
15,000 Anardarko Petroleum..................................... 680,625
35,000 Apache Corp. ........................................... 818,125
30,000 Seagull Energy Corp.*................................... 761,250
25,000 Snyder Oil Corp. ....................................... 443,750
20,000 Williams Cos, Inc....................................... 487,500
---------------
3,191,250
---------------
ENTERTAINMENT (2.3%)
30,000 Blockbuster Entertainment Corp. ........................ 918,750
53,000 Electronic Arts*........................................ 1,590,000
20,000 Gaylord Entertainment Co. (Class A)..................... 562,500
20,000 Sylvan Learning Systems, Inc.*.......................... 275,000
20,000 Time Warner, Inc. ...................................... 885,000
---------------
4,231,250
---------------
ENTERTAINMENT/GAMING (2.2%)
16,000 Mikohn Gaming Corp.*.................................... 240,000
60,000 Mirage Resorts*......................................... 1,432,500
45,000 President Riverboat Casinos*............................ 990,000
30,000 Promus Cos, Inc.*....................................... 1,372,500
---------------
4,035,000
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EQUITY PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------- ---------------
FINANCIAL--MISCELLANEOUS (1.5%)
<C> <S> <C>
25,000 BHC Financial, Inc. .................................... $ 687,500
15,000 First Financial Mgmt Corp. ............................. 851,250
32,100 First USA, Inc. ........................................ 1,147,575
---------------
2,686,325
---------------
HEALTH EQUIPMENT & SERVICES (5.3%)
15,000 Chiron Corp.*........................................... 1,252,500
10,000 Elan Corp* (ADS)++...................................... 423,750
53,200 Genesis Health Ventures, Inc.*.......................... 1,250,200
110,000 Humana Corp. ........................................... 1,938,750
60,000 Mid Atlantic Medical Services*.......................... 1,530,000
100,000 National Medical Enterprises............................ 1,400,000
8,000 Pyxis Corp.*............................................ 598,000
18,000 United Healthcare Corp.*................................ 1,365,750
---------------
9,758,950
---------------
HOTELS/MOTELS (3.6%)
60,000 Hospitality Franchise Systems, Inc.*.................... 3,187,500
45,000 La Quinta Inns, Inc..................................... 1,586,250
60,000 Marriott Intl, Inc. .................................... 1,740,000
---------------
6,513,750
---------------
HOUSING & HOME FURNISHINGS (2.8%)
42,800 Bed Bath & Beyond, Inc.*................................ 1,465,900
24,500 Bombay, Inc.*........................................... 1,102,500
37,500 Heilig-Meyers........................................... 1,462,500
15,000 Whirlpool Corp. ........................................ 997,500
---------------
5,028,400
---------------
INDUSTRIALS (8.2%)
42,000 Caterpillar, Inc. ...................................... 3,738,000
20,000 Deere & Co. ............................................ 1,480,000
9,500 Eaton Corp. ............................................ 479,750
10,000 Foster Wheeler Corp. ................................... 335,000
20,000 General Electric........................................ 2,097,500
35,000 Grupo Tribasa S A (ADR)+................................ 1,211,875
20,000 Johnstown Amer Inds, Inc.*.............................. 475,000
20,000 Loral Corp. ............................................ 755,000
20,000 Titan Wheel Intl, Inc. ................................. 500,000
32,500 Trinity Industries, Inc. ............................... 1,401,562
30,000 Varity Corp.*........................................... 1,342,500
36,000 Wabash National Corp. .................................. 1,224,000
---------------
15,040,187
---------------
INSURANCE (0.0%)
1 Primerica Corp. ........................................ 41
---------------
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------- ---------------
<C> <S> <C>
MEDIA GROUP (8.3%)
2,100 CBS, Inc. .............................................. $ 605,850
5,000 Capital Cities/ABC...................................... 3,097,500
15,900 Century Communications Corp. (Class A)*................. 182,850
18,000 Clear Channel Communications, Inc.*..................... 828,000
44,500 Comcast (Class A)....................................... 1,607,562
41,500 Grupo Televisa SA de CV* (GDS)+++ ...................... 2,905,000
36,500 Infinity Broadcasting Corp.*............................ 1,095,000
13,000 News Corp Ltd (ADR)+ ................................... 685,750
70,000 Tele Communications, Inc (Class A)*..................... 2,108,750
30,000 Turner Broadcasting Sys, Inc. .......................... 810,000
25,000 United Intl Hldgs, Inc (Class A)*....................... 856,250
5,000 Viacom, Inc (Class B)*.................................. 224,375
5,000 Viacom, Inc (Class A)*.................................. 244,375
---------------
15,251,262
---------------
METALS (1.4%)
10,000 American Barrick Res Corp. ............................. 285,000
25,000 Huntco, Inc. (Class A).................................. 1,037,500
24,000 Nucor Corp. ............................................ 1,272,000
---------------
2,594,500
---------------
PAPER & FOREST PRODUCTS (1.2%)
10,100 Georgia Pacific Corp. .................................. 694,375
23,000 Minerals Technologies, Inc. ............................ 667,000
20,000 Weyerhaeuser Co. ....................................... 892,500
---------------
2,253,875
---------------
PUBLISHING (1.6%)
50,000 Enquirer/Star Group, Inc. (Class A)..................... 950,000
10,000 Gannett Co. ............................................ 572,500
22,500 Tribune Co. ............................................ 1,352,812
---------------
2,875,312
---------------
RESTAURANT (0.8%)
17,000 Brinker International*.................................. 782,000
27,000 Lone Star Steakhouse & Saloon*.......................... 735,750
---------------
1,517,750
---------------
RETAIL (2.1%)
9,000 Kohl's Corp.*........................................... 452,250
40,000 Penney (JC)............................................. 2,095,000
50,000 Wal Mart Stores, Inc. .................................. 1,250,000
---------------
3,797,250
---------------
RETAIL--SPECIALTY (1.7%)
24,000 Callaway Golf Co. ...................................... 1,281,000
30,000 Gap, Inc. .............................................. 1,181,250
21,000 Sunglass Hut International*............................. 656,250
---------------
3,118,500
---------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--EQUITY PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------- ---------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (3.4%)
<C> <S> <C>
65,000 Applied Materials, Inc.*................................ $ 2,518,750
30,000 KLA Instruments Corp.*.................................. 832,500
65,000 LAM Reserch Corp.*...................................... 2,096,250
15,000 Novellus Systems, Inc.*................................. 513,750
5,400 Synopsis, Inc.*......................................... 241,650
---------------
6,202,900
---------------
TELECOMMUNICATIONS (3.8%)
13,000 IDB Communications Group, Inc.*......................... 708,500
15,000 Millicom, Inc.*......................................... 318,750
44,000 Pactel Corp.*........................................... 1,094,500
45,000 Telefonos de Mexico SA (Series L) (ADR)+ ............... 3,037,500
20,000 Vodafone Group PLC (ADR)+ .............................. 1,785,000
---------------
6,944,250
---------------
TRANSPORTATION (2.6%)
10,000 CSX Corp. .............................................. 810,000
25,000 Conrail, Inc. .......................................... 1,671,875
20,000 Federal Express* ....................................... 1,417,500
15,000 Wisconsin Central Transmission* ........................ 870,000
---------------
4,769,375
---------------
WIRELESS COMMUNICATION (0.4%)
22,500 Paging Network, Inc.*................................... 675,000
---------------
TOTAL COMMON STOCKS
(IDENTIFIED COST $150,211,931) ...................... 162,550,002
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS)
---------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATION (3.0%)
$ 5,000 U.S. Treasury Bond 7.125% due 2/15/23 (Identified Cost
$5,286,718)......................................... 5,407,031
---------------
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
--------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (15.2%)
COMMERCIAL PAPER (A)(14.8%)
AUTOMOTIVE--FINANCE (2.7%)
$ 5,000 Ford Motor Credit Co. 3.283% due 1/10/94 ............. $ 4,995,900
---------------
FINANCE--DIVERSIFIED (7.4%)
5,000 American General Finance Corp. 3.224% due 1/ 5/94 .... 4,998,211
8,500 Commercial Credit Co. 3.403% due 1/ 6/94 ............. 8,495,986
---------------
FINANCE--ENERGY (4.7%) 13,494,197
---------------
6,500 Chevron Oil Financial Co. 3.302% due 1/ 3/94 ......... 6,498,808
2,125 Exxon Supply Co. 3.201% due 1/ 3/94 .................. 2,124,622
---------------
8,623,430
---------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST $27,113,527) .. 27,113,527
---------------
REPURCHASE AGREEMENT (0.4%)
660 The Bank of New York 2.75% due 1/3/94 (dated 12/31/93;
proceeds $659,726; collateralized by $661,697 U.S.
Treasury Note 5.1257% due 3/31/98 valued at
$672,769)(Identified Cost $659,577) ................ 659,577
---------------
TOTAL SHORT-TERM INVESTMENTS (IDENTIFIED
COST $27,773,104) .................................. 27,773,104
---------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED COST
$183,271,753)(B) ................................... 107.1 % 195,730,137
LIABILITIES IN EXCESS OF OTHER ASSETS ................ (7.1 ) (12,902,273)
------ ---------------
NET ASSETS ........................................... 100.0 % $ 182,827,864
------
------ ---------------
---------------
</TABLE>
- ----------
<TABLE>
<C> <S>
* Non-income producing security.
+ American Depository Receipt.
++ American Depository Shares.
+++ Global Depository Shares.
(a) Commercial Paper was purchased on a discount basis. The interest rates shown have been adjusted to reflect a
bond equivalent yield.
(b) The aggregate cost for federal income tax purposes is $184,838,101; the aggregate gross unrealized
appreciation is $13,812,197 and the aggregate gross unrealized depreciation is $2,920,161, resulting in net
unrealized appreciation of $10,892,036.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--MANAGED ASSETS PORTFOLIO DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------- -----------
<C> <S> <C>
COMMON STOCKS (49.7%)
AEROSPACE (2.0%)
34,000 Lockheed Corp. .................. $ 2,320,500
27,100 Rockwell International Corp. .... 1,006,087
39,400 United Technologies Corp. ....... 2,442,800
-----------
5,769,387
-----------
ALUMINUM (1.7%)
36,000 Aluminum Co. of America ......... 2,497,500
50,000 Reynolds Metals Co. ............. 2,268,750
-----------
4,766,250
-----------
AUTOMOBILES (1.5%)
31,100 Ford Motor Co. .................. 2,005,950
41,700 General Motors Corp. ............ 2,288,287
-----------
4,294,237
-----------
BANKING (2.6%)
58,000 BankAmerica Corp. ............... 2,689,750
49,600 NationsBank Corp. ............... 2,430,400
77,000 Society Corp. ................... 2,290,750
-----------
7,410,900
-----------
BEVERAGES (1.6%)
48,100 Anheuser-Busch Cos., Inc. ....... 2,362,912
82,100 Seagram Co. Ltd. ................ 2,144,863
-----------
4,507,775
-----------
CHEMICALS (5.1%)
42,000 Dow Chemical Co. (The) .......... 2,383,500
51,000 Dupont (El) DeNemours ........... 2,460,750
59,300 Grace (W.R.) & Co. .............. 2,409,063
31,200 Monsanto Co. .................... 2,289,300
34,000 PPG Industries, Inc. ............ 2,579,750
100,200 Williams Cos. ................... 2,442,375
-----------
14,564,738
-----------
COMPUTER EQUIPMENT (1.8%)
30,000 Hewlett-Packard Co. ............. 2,370,000
48,200 International Business
Machines Corp. ................ 2,723,300
-----------
5,093,300
-----------
CONGLOMERATES (1.6%)
19,800 Minnesota Mining &
Manufacturing Co. ............. 2,153,250
47,000 Tenneco, Inc. ................... 2,473,375
-----------
4,626,625
-----------
CONSUMER PRODUCTS (0.9%)
48,000 Kimberly Clark Corp. ............ 2,490,000
-----------
DRUGS (4.4%)
80,100 Abbott Laboratories.............. 2,362,950
44,100 Bristol-Myers Squibb Co. ........ 2,563,312
38,500 Schering-Plough Corp. ........... 2,637,250
88,000 SmithKline Beecham PLC (ADR)+ ... 2,409,000
38,700 Warner-Lambert Co. .............. 2,612,250
-----------
12,584,762
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------- -----------
<C> <S> <C>
ELECTRIC-MAJOR (1.6%)
38,600 Emerson Electric Co. ............ $ 2,325,650
170,000 Westinghouse Electric Corp. ..... 2,401,250
-----------
4,726,900
-----------
ENERGY RELATED (5.4%)
47,600 Amoco Corp ...................... 2,516,850
26,400 Atlantic Richfield Co. .......... 2,778,600
41,600 British Petroleum Co., PLC
(ADR)+......................... 2,662,400
90,000 Enron Corp. ..................... 2,610,000
31,400 Mobil Corp. ..................... 2,480,600
24,000 Royal Dutch Petroleum Co. ....... 2,505,000
-----------
15,553,450
-----------
FOODS (1.2%)
26,000 CPC International, Inc. ......... 1,238,250
18,800 Unilever N.V., N.Y (ADR)+ ....... 2,171,400
-----------
3,409,650
-----------
INSURANCE (2.5%)
69,000 Capital Holding Corp. ........... 2,561,625
31,000 Chubb Corp. ..................... 2,414,125
36,000 Cigna Corp. ..................... 2,259,000
-----------
7,234,750
-----------
MACHINERY (0.9%)
35,500 Deere & Co. ..................... 2,627,000
-----------
MANUFACTURERS (0.7%)
32,200 Whirlpool Corp. ................. 2,141,300
-----------
OFFICE EQUIPMENT & SUPPLIES (1.0%)
30,900 Xerox Corp. ..................... 2,761,688
-----------
PAPER (2.5%)
102,000 Boise Cascade Corp. ............. 2,397,000
38,600 International Paper Co. ......... 2,615,150
51,000 Weyerhaeuser Co. ................ 2,275,875
-----------
7,288,025
-----------
PHOTOGRAPHY (0.8%)
43,300 Eastman Kodak Co. ............... 2,424,800
-----------
RAILROADS (2.3%)
23,800 Burlington Northern, Inc. ....... 1,377,425
32,000 CSX Corp. ....................... 2,592,000
40,300 Union Pacific Corp. ............. 2,523,788
-----------
6,493,213
-----------
RECREATION (0.7%)
120,000 Brunswick Corp. ................. 2,160,000
-----------
RETAIL (1.6%)
35,000 Dayton-Hudson Corp. ............. 2,336,250
101,500 K-Mart Corp. .................... 2,156,875
-----------
4,493,125
-----------
RETAIL--DRUG STORES (0.5%)
100,000 Rite Aid Corp. .................. 1,587,500
-----------
RETAIL--FOOD CHAINS (0.6%)
58,600 Great Atlantic & Pacific Tea
Co. ........................... 1,582,200
-----------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--MANAGED ASSETS PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------- -----------
TELECOMMUNICATIONS (2.4%)
<C> <S> <C>
61,400 GTE Corp. ....................... $ 2,149,000
75,000 Sprint Corp. .................... 2,606,250
50,200 U.S. West, Inc. ................. 2,302,925
-----------
7,058,175
-----------
UTILITIES--ELECTRIC (0.9%)
69,600 FPL Group, Inc. ................. 2,723,100
-----------
WASTE DISPOSAL (0.9%)
101,000 Browning-Ferris Industries,
Inc. .......................... 2,600,750
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$131,189,506).................. 142,973,600
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN MATURITY
THOUSANDS) COUPON RATE DATE
- ----------- ----------- ---------
<C> <S> <C> <C> <C>
CORPORATE AND FOREIGN GOVERNMENT BONDS (2.6%)
AIRLINES (0.2%)
$ 500 Delta
Airlines..... 9.75 % 5/15/21 505,460
-------------
COMPUTER SOFTWARE (0.4%)
1,000 International
Business
Machines
Corp......... 7.50 6/15/13 1,009,720
-------------
FINANCIAL SERVICES (0.3%)
1,000 Aetna Life &
Casualty
Co........... 7.25 8/15/23 991,490
-------------
FOREIGN GOVERNMENT (0.4%)
1,250 Republic of
Italy ....... 6.875 9/27/23 1,186,675
-------------
INDUSTRIALS (0.7%)
1,000 K-Mart
Corp. ....... 7.75 10/ 1/12 1,065,080
1,000 Phillips
Petroleum
Co. ......... 7.20 11/ 1/23 936,250
-------------
2,001,330
-------------
UTILITIES--ELECTRIC (0.6%)
1,500 Southern
California
Edison
Co. ......... 8.875 5/ 1/23 1,679,310
-------------
TOTAL CORPORATE AND FOREIGN GOVERNMENT
BONDS (IDENTIFIED COST $7,339,068)... 7,373,985
-------------
U.S. GOVERNMENT AGENCIES & OBLIGATIONS (7.4%)
950 Private Export
Funding
Corp. ....... 8.75 6/30/03 1,129,313
<CAPTION>
PRINCIPAL
AMOUNT (IN MATURITY
THOUSANDS) COUPON RATE DATE VALUE
- ----------- ----------- --------- -------------
<C> <S> <C> <C> <C>
$ 5,550 U.S. Treasury
Bond ........ 8.125 % 8/15/19 $ 6,605,367
5,000 U.S. Treasury
Bond ........ 8.00 11/15/21 5,919,531
7,000 U.S. Treasury
Bond ........ 7.25 8/15/22 7,631,094
-------------
TOTAL U.S. GOVERNMENT AGENCIES &
OBLIGATIONS (IDENTIFIED COST
$19,273,039) ........................ 21,285,305
-------------
SHORT-TERM INVESTMENTS (40.7%)
COMMERCIAL PAPER (A) (21.1%)
AUTOMOTIVE FINANCE (3.8%)
11,000 Ford Motor
Credit Co.... 3.284 1/13/94 10,987,973
-------------
FINANCE--DIVERSIFIED (12.6%)
11,000 American
General
Finance
Corp......... 3.224 1/ 4/94 10,997,048
13,800 Commercial
Credit
Co. ......... 3.405 1/11/94 13,786,967
11,500 General
Electric
Capital
Corp. ....... 3.205 1/ 6/94 11,494,889
-------------
36,278,904
-------------
FINANCE ENERGY (4.7%)
13,500 Chevron Oil
Financial
Co. ......... 3.206 1/10/94 13,489,200
-------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$60,756,077)......................... 60,756,077
-------------
U.S. GOVERNMENT AGENCIES (A) (19.5%)
22,000 Federal Home
Loan Banks... 3.148 1/19/94 21,965,460
15,000 Federal Home
Loan Mortgage
Corp. ....... 3.148 1/21/94 14,973,833
19,000 Federal
National
Mortgage
Association... 3.152 1/ 3/94 18,996,675
-------------
TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST $55,935,968)......... 55,935,968
-------------
</TABLE>
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
PORTFOLIO OF INVESTMENTS--MANAGED ASSETS PORTFOLIO DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN
THOUSANDS) VALUE
- ----------- -----------
<C> <S> <C>
REPURCHASE AGREEMENT (0.1%)
$ 266 The Bank of New York 2.75%
due 1/3/94 (dated 12/31/93;
proceeds $266,222;
collateralized by $267,013 U.S.
Treasury Note 5.125% due
3/31/98 valued at $271,484)
(Identified Cost $266,161)..... $ 266,161
-----------
TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST
$116,958,206).................. 116,958,206
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
-------------
<S> <C> <C>
TOTAL INVESTMENTS (IDENTIFIED COST
$274,759,819) (B)............... 100.4% $ 288,591,096
LIABILITIES IN EXCESS OF OTHER
ASSETS.......................... (0.4) (1,088,747)
----------- -------------
NET ASSETS........................ 100.0% $ 287,502,349
----------- -------------
----------- -------------
</TABLE>
- ----------
+ American Depository Receipt.
(a) Commercial Paper and U.S. Government Agencies were purchased
on a discount basis. The interest rates shown have been
adjusted to reflect a bond equivalent yield.
(b) The aggregate cost of investments for federal income tax
purposes is $275,587,545; the aggregate gross unrealized
appreciation is $15,696,999 and the aggregate gross
unrealized depreciation is $2,693,448, resulting in net
unrealized appreciation of $13,003,551.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
REALIZED
NET ASSET AND
YEAR VALUE INVESTMENT UNREALIZED TOTAL FROM TOTAL DIVIDENDS
ENDED BEGINNING INCOME-- GAIN INVESTMENT DIVIDENDS TO DISTRIBUTIONS TO AND
DEC. 31 OF PERIOD NET (LOSS)--NET OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
----------- --------- ----------- ----------- ----------- ------------ ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET PORTFOLIO
1984* $ 1.00 $ .077 $ -0- $ .077 $ (.077) $ -0- $ (.077)
1985 1.00 .076 -0- .076 (.076) -0- (.076)
1986 1.00 .062 -0- .062 (.062) -0- (.062)
1987 1.00 .061 -0- .061 (.061) -0- (.061)
1988 1.00 .070 -0- .070 (.070) -0- (.070)
1989 1.00 .086 -0- .086 (.086) -0- (.086)
1990 1.00 .076 -0- .076 (.076) -0- (.076)
1991 1.00 .056 -0- .056 (.056) -0- (.056)
1992 1.00 .034 -0- .034 (.034) -0- (.034)
1993 1.00 .027 -0- .027 (.027) -0- (.027)
QUALITY INCOME PLUS PORTFOLIO
1987** 10.00 .64 (.39) .25 (.64) -0- (.64)
1988 9.61 .85 (.16) .69 (.85) -0- (.85)
1989 9.45 .88 .28 1.16 (.88) -0- (.88)
1990 9.73 .86 (.24) .62 (.86) -0- (.86)
1991 9.49 .85 .85 1.70 (.85) -0- (.85)
1992 10.34 .77 .05 .82 (.77) -0- (.77)
1993 10.39 .69 .64 1.33 (.69) -0- (.69)
HIGH YIELD PORTFOLIO
1984* 10.00 .92 .23 1.15 (.92) -0- (.92)
1985 10.23 1.17 1.50 2.67 (1.17) (.01) (1.18)
1986 11.72 1.09 .90 1.99 (1.09) (.56) (1.65)
1987 12.06 .91 (1.15) (.24) (.91) (.94) (1.85)
1988 9.97 1.14 (.05) 1.09 (1.14) -0- (1.14)
1989 9.92 1.30 (2.40) (1.10) (1.30) -0- (1.30)
1990 7.52 1.13 (2.91) (1.78) (1.13) (.06)++ (1.19)
1991 4.55 .70 1.81 2.51 (.70) (.11)++ (.81)
1992 6.25 .96 .18 1.14 (.96) -0- (.96)
1993 6.43 .81 .68 1.49 (.81) -0- (.81)
UTILITIES PORTFOLIO
1990*** 10.00 .47 (.04) .43 (.41) -0- (.41)
1991 10.02 .54 1.45 1.99 (.54) -0- (.54)
1992 11.47 .51 .88 1.39 (.52) -0- (.52)
1993 12.34 .49 1.43 1.92 (.50) (.02) (.52)
DIVIDEND GROWTH PORTFOLIO
1990*** 10.00 .33 (1.10) (.77) (.30) -0- (.30)
1991 8.93 .36 2.08 2.44 (.37) -0- (.37)
1992 11.00 .37 .51 .88 (.37) -0- (.37)
1993 11.51 .36 1.27 1.63 (.36) -0- (.36)
CAPITAL GROWTH PORTFOLIO
1991**** 10.00 .15 2.67 2.82 (.13) -0- (.13)
1992 12.69 .07 .13 .20 (.08) (.02) (.10)
1993 12.79 .08 (.98) (.90) (.08) -0- (.08)
<CAPTION>
RATIOS TO
AVERAGE NET ASSETS
NET ASSETS ---------------------
YEAR NET ASSET TOTAL AT END OF NET
ENDED VALUE END INVESTMENT PERIOD INVESTMENT PORTFOLIO
DEC. 31 OF PERIOD RETURN+ (000'S) EXPENSES INCOME TURNOVER RATE
----------- --------- ---------- ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET PORTFOLIO
1984* $ 1.00 7.63%(1) $ 13,433 1.33%(2) 9.77%(2) N/A
1985 1.00 7.85 16,386 .74 7.57 N/A
1986 1.00 6.39 42,194 .69 6.03 N/A
1987 1.00 6.26 69,467 .65 6.26 N/A
1988 1.00 7.23 77,304 .62 7.04 N/A
1989 1.00 9.05 76,701 .58 8.67 N/A
1990 1.00 7.89 118,058 .57 7.60 N/A
1991 1.00 5.75 104,277 .57 5.62 N/A
1992 1.00 3.43 96,151 .59 3.38 N/A
1993 1.00 2.75 129,925 .57 2.71 N/A
QUALITY INCOME PLUS PORTFOLIO
1987** 9.61 2.62(1) 24,094 .35(2)(4) 8.33(2) 265 %
1988 9.45 7.32 28,037 .73 8.87 277
1989 9.73 12.78 48,784 .70 9.09 242
1990 9.49 6.84 57,407 .66 9.09 166
1991 10.34 18.75 81,918 .60 8.39 105
1992 10.39 8.26 163,368 .58 7.41 148
1993 11.03 12.99 487,647 .56 6.17 219
HIGH YIELD PORTFOLIO
1984* 10.23 11.97(1) 44,823 .89(2) 11.89(2) 77
1985 11.72 27.42 101,253 .64 10.50 237
1986 12.06 18.13 204,754 .56 9.10 164
1987 9.97 (3.02) 191,631 .53 7.66 287
1988 9.92 10.83 192,290 .56 11.06 140
1989 7.52 (12.44) 96,359 .55 13.94 54
1990 4.55 (25.54) 27,078 .69 17.98 42
1991 6.25 58.14 34,603 1.01 12.29 300
1992 6.43 18.35 40,042 .74 14.05 204
1993 7.11 24.08 90,200 .60 11.80 177
UTILITIES PORTFOLIO
1990*** 10.02 4.52(1) 37,597 .40(2)(5) 6.38(2) 46
1991 11.47 20.56 68,449 .80 5.23 25
1992 12.34 12.64 153,748 .73 4.63 26
1993 13.74 15.69 490,934 .71 3.75 11
DIVIDEND GROWTH PORTFOLIO
1990*** 8.93 (7.81)(1) 57,282 .54(2)(5) 4.50(2) 19
1991 11.00 27.76 98,023 .73 3.61 6
1992 11.51 8.16 192,551 .69 3.42 4
1993 12.78 14.34 483,145 .68 3.01 6
CAPITAL GROWTH PORTFOLIO
1991**** 12.69 28.41(1) 18,400 -0-(2)(6) 1.82(2) 32
1992 12.79 1.64 45,105 .86 .62 22
1993 11.81 (6.99) 50,309 .74 .78 36
</TABLE>
(TABLE CONTINUED ON FOLLOWING PAGE)
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REALIZED
NET ASSET AND
YEAR VALUE INVESTMENT UNREALIZED TOTAL FROM TOTAL DIVIDENDS
ENDED BEGINNING INCOME-- GAIN INVESTMENT DIVIDENDS TO DISTRIBUTIONS TO AND
DEC. 31 OF PERIOD NET (LOSS)--NET OPERATIONS SHAREHOLDERS SHAREHOLDERS DISTRIBUTIONS
----------- --------- ----------- ----------- ----------- ------------ ---------------- ----------------
EUROPEAN GROWTH PORTFOLIO
<S> <C> <C> <C> <C> <C> <C> <C>
1991**** $ 10.00 $ .25 $ (.13) $ .12 $ (.23) $ -0- $ (.23)
1992 9.89 .08 .32 .40 (.10) (.01) (.11)
1993 10.18 .12 3.98 4.10 (.12) (.13) (.25)
EQUITY PORTFOLIO
1984* 10.00 .41 .72 1.13 (.34) -0- (.34)
1985 10.79 .43 2.01 2.44 (.46) (.03) (.49)
1986 12.74 .39 1.74 2.13 (.39) (.07) (.46)
1987 14.41 .30 (.94) (.64) (.33) (.95) (1.28)
1988 12.49 .39 .83 1.22 (.35) -0- (.35)
1989 13.36 .71 1.77 2.48 (.70) -0- (.70)
1990 15.14 .48 (1.03) (.55) (.49) -0- (.49)
1991 14.10 .20 8.05 8.25 (.21) -0- (.21)
1992 22.14 .23 (.47) (.24) (.24) (1.86) (2.10)
1993 19.80 .15 3.63 3.78 (.15) (1.28) (1.43)
MANAGED ASSETS PORTFOLIO
1987** 10.00 .48 (.35) .13 (.48) -0- (.48)
1988 9.65 .70 .51 1.21 (.64) -0- (.64)
1989 10.22 .84 .20 1.04 (.79) (.06) (.85)
1990 10.41 .61 (.46) .15 (.67) (.08) (.75)
1991 9.81 .47 2.24 2.71 (.50) -0- (.50)
1992 12.02 .44 .41 .85 (.45) (.13) (.58)
1993 12.29 .38 .86 1.24 (.38) (.47) (.85)
<CAPTION>
RATIOS TO
AVERAGE NET ASSETS
NET ASSETS ---------------------
YEAR NET ASSET TOTAL AT END OF NET
ENDED VALUE END INVESTMENT PERIOD INVESTMENT PORTFOLIO
DEC. 31 OF PERIOD RETURN+ (000'S) EXPENSES INCOME TURNOVER RATE
----------- --------- ---------- ---------- ----------- -------- -------------
EUROPEAN GROWTH PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
1991**** $ 9.89 1.34%(1) $ 3,653 -0-%(2)(6) 3.18%(2) 77 %
1992 10.18 3.99 10,686 1.73 .74 97
1993 14.03 40.88 79,052 1.28 .97 77
EQUITY PORTFOLIO
1984* 10.79 11.27(1) 7,652 1.47(2)(3) 5.59(2) 112
1985 12.74 23.66 30,045 .73 3.99 73
1986 14.41 16.85 43,266 .63 2.72 89
1987 12.49 (6.23) 52,502 .59 2.02 63
1988 13.36 9.84 39,857 .65 2.77 162
1989 15.14 18.83 58,316 .60 4.85 81
1990 14.10 (3.62) 41,234 .62 3.38 130
1991 22.14 59.05 63,524 .64 1.09 214
1992 19.80 .05 77,527 .62 1.22 286
1993 22.15 19.72 182,828 .58 .69 265
MANAGED ASSETS PORTFOLIO
1987** 9.65 1.23(1) 27,016 .38(2)(4) 6.73(2) 172
1988 10.22 12.79 61,947 .66 7.29 310
1989 10.41 10.67 88,712 .57 8.38 282
1990 9.81 1.56 68,447 .58 6.10 163
1991 12.02 28.26 87,779 .60 4.34 86
1992 12.29 7.24 136,741 .58 3.74 87
1993 12.68 10.38 287,502 .57 3.11 57
</TABLE>
- ------------
* March 9, 1984 (Commencement of Operations) through December 31, 1984.
** March 1, 1987 (Commencement of Operations) through December 31, 1987.
*** March 1, 1990 (Commencement of Operations) through December 31, 1990.
**** March 1, 1991 (Commencement of Operations) through December 31, 1991.
+ Does not reflect the deduction of sales load.
++ Distribution from capital.
(1) Not annualized.
(2) Annualized.
(3) Net of expense reimbursement. If the Investment Manager had not
reimbursed the Equity Portfolio for expenses in excess of the applicable
expense limitation, the ratio of expenses to average net assets would
have been 2.19%.
(4) If the Investment Manager had not assumed all expenses and waived the
management fee for the period March 1, 1987 through August 26, 1987, the
ratio of expenses to average net assets would have been .74% ($.06) for
the Quality Income Plus Portfolio and .74% ($.06) for the Managed Assets
Portfolio.
(5) If the Investment Manager had not assumed all expenses and waived the
management fee for the periods March 1, 1990 through August 31, 1990 for
the Utilities Portfolio and March 1, 1990 through June 26, 1990 for the
Dividend Growth Portfolio, the ratio of expenses to average net assets
would have been .75% ($.06) for the Utilities Portfolio and .74% ($.05)
for the Dividend Growth Portfolio.
(6) If the Investment Manager had not assumed all expenses and waived the
management fee for the period March 1, 1991 through December 31, 1991,
the ratio of expenses to average net assets would have been 1.60% ($.13)
for the Capital Growth Portfolio and 4.12% ($.32) for the European Growth
Portfolio.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER VARIABLE INVESTMENT SERIES
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter Variable Investment Series
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios 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 the Money Market Portfolio, the
Quality Income Plus Portfolio, the High Yield Portfolio, the Utilities
Portfolio, the Dividend Growth Portfolio, the Capital Growth Portfolio, the
European Growth Portfolio, the Equity Portfolio, and the Managed Assets
Portfolio (constituting Dean Witter Variable Investment Series, hereafter
referred to as the "Fund") at December 31, 1993, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods indicated, 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 audits 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, 1993 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE
1177 Avenue of the Americas
New York, New York
February 8, 1994
<PAGE>
TRUSTEES
------------------------------------------------------
<TABLE>
<S> <C>
Jack F. Bennett Dr. Manuel H. Johnson
Charles A. Fiumefreddo Paul Kolton
Edwin J. Garn Michael E. Nugent
John R. Haire Albert T. Sommers
Dr. John E. Jeuck Edward R. Telling
</TABLE>
OFFICERS
------------------------------------------------------
Charles A. Fiumefreddo
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Sheldon Curtis
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
Thomas F. Caloia
TREASURER
<TABLE>
<S> <C>
TRANSFER AGENT INDEPENDENT ACCOUNTANTS
------------------------------------------- -------------------------------------------
Dean Witter Trust Company Price Waterhouse
Harborside Financial Center--Plaza Two 1177 Avenue of the Americas
Jersey City, New Jersey 07311 New York, New York 10036
</TABLE>
INVESTMENT MANAGER
------------------------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
SUB-ADVISOR
(European Growth Portfolio)
------------------------------------------------------
Morgan Grenfell Investment Services Limited
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.
<PAGE>
DEAN WITTER VARIABLE
INVESTMENT SERIES
ANNUAL REPORT
DECEMBER 31, 1993
Northbrook Life
Insurance Company
P.O. Box 94040
Palatine, IL 60094-4040
40113A
<PAGE>
DEAN WITTER VARIABLE CAPITAL GROWTH PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 1, 1991 $10,000 $10,000
December 31, 1991 $12,841 $11,563
December 31, 1992 $13,051 $12,443
December 31, 1993 $12,139(3) $13,700
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
<S> <C>
-6.99 (1) 7.07 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
theaverage performance of 500 widely held common stocks. The index does not
include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE DIVIDEND GROWTH PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 1, 1990 $10,000 $10,000
December 31, 1990 $ 9,219 $10,235
December 31, 1991 $11,778 $13,347
December 31, 1992 $12,740 $14,363
December 31, 1993 $14,567(3) $15,813
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
<S> <C>
14.34 (1) 10.30 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE EQUITY PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 9, 1984 $10,000 $10,000
December 31, 1984 $11,127 $11,256
December 31, 1985 $13,760 $14,828
December 31, 1986 $16,077 $17,595
December 31, 1987 $15,076 $18,519
December 31, 1988 $16,559 $21,584
December 31, 1989 $19,678 $28,412
December 31, 1990 $18,966 $27,533
December 31, 1991 $30,165 $35,905
December 31, 1992 $30,181 $38,637
December 31, 1993 $36,133(3) $42,539
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C>
19.72 (1) 16.89 (1) 13.99 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE EUROPEAN GROWTH PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 1, 1991 $10,000 $10,000
December 31, 1991 $10,134 $11,563
December 31, 1992 $10,539 $12,443
December 31, 1993 $14,847 (3) $13,700
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
<S> <C>
40.88 (1) 14.95 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE HIGH YIELD PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL LEHMAN
<S> <C> <C>
March 9, 1984 $10,000 $10,000
December 31, 1984 $11,197 $11,583
December 31, 1985 $14,267 $14,379
December 31, 1986 $16,854 $16,763
December 31, 1987 $16,345 $17,215
December 31, 1988 $18,116 $18,859
December 31, 1989 $15,862 $21,220
December 31, 1990 $11,810 $22,387
December 31, 1991 $18,677 $27,009
December 31, 1992 $22,104 $29,532
December 31, 1993 $27,427(3) $33,323
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C>
24.08 (1) 8.66 (1) 10.85 (1)
_______ Fund _______ Lehman (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The Lehman Brothers Mutual Fund Corporate/High Yield Index tracks the
performance of all investment and noninvestment-grade corporate debt
securities.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE MANAGED ASSETS PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 4, 1987 $10,000 $10,000
December 31, 1987 $10,123 $ 8,787
December 31, 1988 $11,418 $10,241
December 31, 1989 $12,637 $13,481
December 31, 1990 $12,833 $13,064
December 31, 1991 $16,460 $17,036
December 31, 1992 $17,651 $18,332
December 31, 1993 $19,484(3) $20,184
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C>
10.38 (1) 11.29 (1) 10.26 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE QUALITY INCOME PLUS PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL LEHMAN
<S> <C> <C>
March 3, 1987 $10,000 $10,000
December 31, 1987 $10,262 $10,109
December 31, 1988 $11,014 $10,907
December 31, 1989 $12,421 $12,491
December 31, 1990 $13,271 $13,611
December 31, 1991 $15,759 $15,788
December 31, 1992 $17,060 $16,957
December 31, 1993 $19,276(3) $18,610
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C>
12.99 (1) 11.85 (1) 10.08 (1)
_______ Fund _______ Lehman (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The Lehman Brothers Mutual Fund Aggregate Bond Index tracks the performance
of all U.S. Government agency and Treasury securities, investment-grade
corporate debt securities, agency mortgage-backed securities and asset-
backed securities.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
<PAGE>
DEAN WITTER VARIABLE UTILITIES PORTFOLIO
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL S&P 500
<S> <C> <C>
March 1, 1990 $10,000 $10,000
December 31, 1990 $10,452 $10,235
December 31, 1991 $12,601 $13,347
December 31, 1992 $14,194 $14,363
December 31, 1993 $16,422(3) $15,813
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
1 YEAR LIFE OF FUND
<S> <C>
15.69 (1) 13.81 (1)
_______ Fund _______ S&P 500 (2)
<FN>
Past performance is not predictive of future returns.
________________________________________
(1) Figure assumes reinvestment of all distributions for the underlying fund
and does not reflect the deduction of any account fees or sales charges.
(2) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.
(3) Closing value on December 31, 1993 for the underlying fund. This figure
does not reflect the deduction of any account fees or sales charges.
</TABLE>
