<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS June 30, 1997
DEAR SHAREHOLDER:
We are pleased to present the semiannual report on the operations of Dean
Witter California Tax-Free Daily Income Trust for the six-month period ended
June 30, 1997.
The most noteworthy news for the tax-free money market during the first half
of 1997 was the Federal Reserve Board's 25 basis point increase in the
federal-funds rate. That move came midway through the period, following the
Federal Open Market Committee's meeting in late March. During the second
quarter, however, favorable inflation reports and moderate economic growth
kept the Federal Reserve on the sidelines. In the absence of outside
influences, the movement of tax-free money market interest rates was driven
primarily by seasonal changes in supply and demand.
Yields moved higher for securities maturing in six months to one year, the
long end of the municipal money market. The Bond Buyer One Year Note Index, a
benchmark indicator of longer-term municipal money market yields, rose from
3.51 percent at the end of December to 3.85 percent at the end of March.
During the second quarter, the Index peaked at 3.96 percent in late April,
when pressures related to the tax payment season caused all municipal money
market yields to increase. At the end of June, the Index stood at 3.85
percent, unchanged from the end of the first quarter.
By the end of June, the ratio of the One Year Note Index to the yield for
one-year U.S. Treasury Bills was 68 percent, up from 64 percent at the end of
1996. This higher ratio indicates that yields in this sector of the municipal
money market became more attractive in relation to Treasuries with comparable
maturities.
At the short end of the tax-free money market maturity range, variable rate
demand obligations (VRDOs) with daily and weekly rate changes conformed to
the recurring pattern of wide interest rate swings and the predictable timing
of highs and lows. The low for weekly VRDO yields was set at 2.85 percent
during the first week of January when positive
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1997, continued
cash flows were the strongest. The high yield of 4.50 percent came at the end
of April along with heavy seasonal outflows associated with tax payments.
Improved cash inflow in May and early June caused weekly VRDO yields to drop
to 3.35 percent by the first week of June before rising again to 4.125
percent in late June.
PORTFOLIO MANAGEMENT AND PERFORMANCE
Dean Witter California Tax-Free Daily Income Trust produced a total return of
1.38 percent for the six-month period ended June 30, 1997. Thirty-day yields
for the Fund ranged from a low of 2.43 percent for the month of March to a
high of 3.11 percent for May.
On June 30, the Fund's net assets exceeded $253 million, with 58 percent of
the Fund's portfolio invested in VRDOs. California tax-exempt commercial
paper and municipal notes, the two other types of securities held by the
portfolio, comprised 30 percent and 12 percent of the portfolio,
respectively.
Portfolio holdings are continuously reviewed to maintain or improve
creditworthiness. Particular effort is devoted to monitoring the credit
quality of institutions that provide credit enhancement and liquidity
facilities for money market investments.
The Fund's weighted average maturity moved within a range of 22 to 53 days
during the six-month period. Normally, seasonal purchases of new one-year tax
and revenue anticipation notes (TRANs) cause the average maturity to extend
during the month of June. However, because attractive yields were available
for shorter maturities and new one-year financings were aggressively priced,
the incentive to extend maturities was reduced this year. At the end of June,
the Fund's weighted average maturity was 52 days.
LOOKING FORWARD
The economy has enjoyed steady growth with low inflation for a prolonged
period, which has produced a tightened labor market. If this low unemployment
continues, it could produce wage pressures and threaten price stability. In
the months ahead, we anticipate that the Federal Reserve will be watchful for
any signs of accelerating wage and price increases, which could prompt
further tightening of monetary policy. In such an environment, the weighted
average maturity for the Fund's portfolio would be held in a moderate range,
to maintain investment flexibility.
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1997, continued
We appreciate your support of Dean Witter California Tax-Free Daily Income
Trust and look forward to continuing to serve your investment needs and
objectives.
Sincerely,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
RESULTS OF SPECIAL MEETING (unaudited)
On May 21, 1997, a special meeting of the shareholders of Dean Witter
California Tax-Free Daily Income Trust was held for the purpose of voting on
four separate matters, the results of which are as follows:
(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND
DEAN WITTER INTERCAPITAL INC., IN CONNECTION WITH THE MERGER OF MORGAN
STANLEY GROUP INC. WITH DEAN WITTER, DISCOVER & CO.
For ....... 140,184,933
Against .. 8,501,267
Abstain .. 13,804,509
(2) ELECTION OF TRUSTEES:
Michael Bozic
For .................. 149,847,464
Withheld ............. 12,643,245
Charles A. Fiumefreddo
For .................. 149,731,980
Withheld ............. 12,758,729
Edwin J. Garn
For .................. 150,067,856
Withheld ............. 12,422,853
John R. Haire
For .................. 148,389,592
Withheld ............. 14,101,117
Wayne E. Hedien
For .................. 150,179,842
Withheld ............. 12,310,867
Dr. Manuel H. Johnson
For .................. 149,869,348
Withheld ............. 12,621,361
Michael E. Nugent
For .................. 150,066,544
Withheld ............. 12,424,165
Philip J. Purcell
For .................. 149,989,710
Withheld ............. 12,500,999
John L. Schroeder
For .................. 149,460,453
Withheld ............. 13,030,256
(3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN
CERTAIN OTHER INVESTMENT COMPANIES:
For ....... 134,919,558
Against .. 11,418,222
Abstain .. 16,152,929
(4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:
For ....... 152,955,281
Against .. 3,466,725
Abstain .. 6,068,703
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON DEMAND
THOUSANDS RATE+ DATE* VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- -------------
<S> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(60.2%)
California Educational Facilities Authority,
$10,300 California Institute of Technology Ser 1994 .................... 3.90% 07/08/97 $10,300,000
2,500 Stanford University Ser L-2 .................................... 3.85 07/08/97 2,500,000
California Health Facilities Financing Authority,
4,100 Catholic HealthCare West 1988 Ser A (MBIA) ..................... 4.05 07/08/97 4,100,000
6,000 Childrens Hospital of Orange County Ser 1991 (MBIA) ............ 4.00 07/08/97 6,000,000
8,000 Memorial Health Services Ser 1994 .............................. 3.95 07/08/97 8,000,000
9,800 St Francis Medical Center 1995 Ser E (MBIA) .................... 3.75 07/08/97 9,800,000
California Pollution Control Financing Authority,
1,615 Chevron USA Ser 1983 ........................................... 3.90 11/15/97 1,618,426
5,000 Chevron USA Ser 1984 B ......................................... 3.90 06/15/98 5,001,112
3,400 Noranda-Grey Eagle Mines Inc Ser 1985 C ........................ 4.05 07/08/97 3,400,000
9,800 Pacific Gas & Electric Co 1996 Ser F & 1997 Ser A .............. 3.85 07/01/97 9,800,000
5,000 Southern California Edison Co 1986 Ser A ....................... 5.20 07/01/97 5,000,000
10,000 California Public Capital Improvements Financing Authority,
Pooled Ser 1988 C .............................................. 3.90 09/15/97 10,000,000
California Statewide Communities Development Authority,
6,000 Kaiser Permanente Ser 1995 COPs ................................ 3.85 07/08/97 6,000,000
5,000 St Joseph Health System COPs ................................... 3.90 07/08/97 5,000,000
5,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Ser
1995 C ........................................................ 3.90 07/08/97 5,000,000
2,300 Kern County, Public Facilities Ser 1986 D COPs .................. 4.00 07/08/97 2,300,000
5,900 Los Angeles, Multi-family 1985 Ser K ............................ 3.75 07/08/97 5,900,000
5,000 Los Angeles County Metropolitan Transportation Authority, Prop C
Sales Tax Refg Ser 1993 A (MBIA) ............................... 4.00 07/08/97 5,000,000
Newport Beach, Hoag Memorial Hospital/Presbyterian 1992 Ser &
14,300 1996 Ser B ..................................................... 4.00 07/01/97 14,300,000
11,000 Sacramento County, Administration Center & Courthouse Ser 1990
COPs ........................................................... 3.90 07/08/97 11,000,000
5,000 San Diego, Lusk Mira Mesa Apts Issue E 1985 ..................... 4.10 07/08/97 5,000,000
5,075 San Jacinto Unified School District, 1997 COPs (FSA) ............ 4.10 07/08/97 5,075,000
700 San Jose Redevelopment Agency, Merged Area 1996 Ser B ........... 3.50 07/01/97 700,000
6,600 San Jose-Santa Clara Clean Water Financing Authority, Sewer Ser
1995 B (FGIC) .................................................. 3.90 07/08/97 6,600,000
4,000 Southern California Public Power Authority, Transmission Ser
1996 B (FSA) ................................................... 3.90 07/08/97 4,000,000
1,300 Puerto Rico Highway & Transportation, Ser X ..................... 3.75 07/08/97 1,300,000
-------------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL
OBLIGATIONS
(Amortized Cost $152,694,538) ...................................................... 152,694,538
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY
AMOUNT IN COUPON MATURITY ON DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER (31.0%)
$6,000 California, Ser 1996 ............................................ 3.70% 08/13/97 3.70% $6,000,000
California Pollution Control Financing Authority,
4,000 Pacific Gas & Electric Co Ser 1996 E ........................... 3.55 07/24/97 3.55 4,000,000
4,000 Southern California Edison Co Ser A 1985 ....................... 3.60 08/20/97 3.60 4,000,000
Contra Costa Water District,
4,000 Ser A .......................................................... 3.60 09/10/97 3.60 4,000,000
4,000 Ser A .......................................................... 3.60 10/14/97 3.60 4,000,000
Los Angeles,
5,000 Wastewater Ser 1997 ............................................ 3.65 07/17/97 3.65 5,000,000
2,000 Wastewater Ser 1997 ............................................ 3.55 07/22/97 3.55 2,000,000
4,000 Wastewater Ser 1997 ............................................ 3.65 09/09/97 3.65 4,000,000
3,500 Wastewater Ser 1997 ............................................ 3.65 09/11/97 3.65 3,500,000
Metropolitan Water District of Southern California,
4,500 Ser 1996 B ..................................................... 3.60 07/15/97 3.60 4,500,000
3,000 Ser 1996 B ..................................................... 3.75 08/06/97 3.75 3,000,000
5,100 Sacramento Municipal Utility District, Ser I .................... 3.60 08/22/97 3.60 5,100,000
San Diego,
4,000 San Diego Gas & Electric Co Ser 1995 A ......................... 3.70 08/12/97 3.70 4,000,000
3,500 San Diego Gas & Electric Co Ser 1995 B ......................... 3.75 09/25/97 3.75 3,500,000
3,700 San Diego County Water Authority, Ser # 1 ....................... 3.65 08/14/97 3.65 3,700,000
West & Central Basin Financing Authority,
3,500 West Basin Municipal Water District TRANs ...................... 3.55 07/14/97 3.55 3,500,000
5,000 West Basin Municipal Water District TRANs ...................... 3.80 07/28/97 3.80 5,000,000
3,000 West Basin Municipal Water District TRANs ...................... 3.70 08/07/97 3.70 3,000,000
Puerto Rico Government Development Bank,
2,000 Ser 1996 ....................................................... 3.60 07/24/97 3.60 2,000,000
5,000 Ser 1996 ....................................................... 3.75 09/15/97 3.75 5,000,000
--------------
TOTAL CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER ...................
(Amortized Cost $78,800,000).................................................................... 78,800,000
--------------
CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES (13.1%)
7,000 Contra Costa County, 1996-1997 TRANs, dtd 07/01/96 .............. 4.50 07/03/97 3.755 7,000,276
4,000 San Diego, 1996-1997 Ser A TANs, dtd 07/02/96 ................... 4.50 07/02/97 3.75 4,000,079
7,000 San Bernadino County, Ser 1997-98 Ser A TRANs , dtd 07/01/97
(WI) ........................................................... 4.50 06/30/98 3.85 7,043,680
4,000 San Mateo County, Ser 1997-98 TRANs, dtd 07/01/97 (WI) .......... 4.50 07/01/98 3.80 4,026,960
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1997 (unaudited) continued
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY
AMOUNT IN COUPON MATURITY ON DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Ventura County,
$5,000 Ser 1996 TRANs, dtd 07/02/96 ................................... 4.75% 07/02/97 3.85% $5,000,119
6,000 Ser 1997 TRANs, dtd 07/01/97 (WI) .............................. 4.50 07/01/98 3.80 6,040,440
--------------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES
(Amortized Cost $33,111,554) .................................................................... $33,111,554
--------------
TOTAL INVESTMENTS (Amortized Cost $264,606,092) (a) ................................. 104.3% 264,606,092
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ...................................... (4.3) (10,797,643)
------------ --------------
NET ASSETS .......................................................................... 100.0% $253,808,449
============ ==============
</TABLE>
- ------------
COPs Certificates of Participation.
TANs Tax Anticipation Notes.
TRANs Tax and Revenue Anticipation Notes.
WI Security purchased on a when issued basis.
+ Rate shown is rate in effect at June 30, 1997.
* Date on which the principal amount can be recovered through
demand.
(a) Cost is the same for federal income tax purposes.
Bond Insurance:
- ---------------
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $264,606,092)......................................... $264,606,092
Cash................................................................... 6,400,620
Interest receivable.................................................... 1,635,065
Prepaid expenses and other assets...................................... 33,641
--------------
TOTAL ASSETS ........................................................ 272,675,418
--------------
LIABILITIES:
Payable for:
Investments purchased................................................ 17,111,080
Shares of beneficial interest repurchased............................ 1,533,696
Investment management fee ........................................... 110,105
Plan of distribution fee............................................. 22,021
Accrued expenses....................................................... 90,067
--------------
TOTAL LIABILITIES ................................................... 18,866,969
--------------
NET ASSETS:
Paid-in-capital ....................................................... 253,808,210
Accumulated undistributed net investment income........................ 239
--------------
NET ASSETS .......................................................... $253,808,449
==============
NET ASSET VALUE PER SHARE,
253,808,210 shares outstanding (unlimited shares authorized of $.01
par value)............................................................ $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $4,458,050
------------
EXPENSES
Investment management fee.............. 641,026
Plan of distribution fee............... 128,205
Transfer agent fees and expenses ...... 84,662
Shareholder reports and notices ....... 30,548
Professional fees...................... 27,214
Trustees' fees and expenses............ 8,242
Custodian fees......................... 7,071
Other.................................. 6,451
------------
TOTAL EXPENSES ...................... 933,419
LESS: EXPENSE OFFSET ............... (6,955)
------------
NET EXPENSES ........................ 926,464
------------
NET INVESMENT INCOME AND NET INCREASE $3,531,586
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 1997 DECEMBER 31, 1996
- ------------------------------------------------------ --------------- -----------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 3,531,586 $ 6,971,719
Net realized gain...................................... -- 1,280
--------------- -----------------
NET INCREASE......................................... 3,531,586 6,972,999
Dividends from net investment income................... (3,531,482) (6,972,113)
Net increase (decrease) from transactions in shares of
beneficial interest................................... (5,782,001) 5,213,109
--------------- -----------------
NET INCREASE (DECREASE) ............................. (5,781,897) 5,213,995
NET ASSETS:
Beginning of period.................................... 259,590,346 254,376,351
--------------- -----------------
END OF PERIOD
(Including undistributed net investment income of
$239 and $135, respectively)......................... $253,808,449 $259,590,346
=============== =================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter California Tax-Free Daily Income Trust (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Fund's investment
objective is to provide a high level of daily income which is exempt from
federal and California income tax, consistent with stability of principal and
liquidity. The Fund was organized as a Massachusetts business trust on April
25, 1988 and commenced operations on
July 22, 1988.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued at amortized
cost, which approximates market value.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. The Fund amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends
and distributions to shareholders as of the close of each business day.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.50% to the portion of the daily net assets not exceeding $500
million; 0.425% to the portion of the daily net assets exceeding $500 million
but not exceeding $750 million; 0.375% to the portion of the daily net assets
exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
the daily net assets exceeding $1 billion but not exceeding $1.5 billion;
0.325% to the portion of the daily net assets exceeding $1.5 billion but not
exceeding $2 billion; 0.30% to the portion of the daily net assets exceeding
$2 billion but not exceeding $2.5 billion; 0.275% to the portion of the daily
net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% to
the portion of the daily net assets exceeding
$3 billion.
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.
3. PLAN OF DISTRIBUTION
Dean Witter Distributors Inc. (the "Distributor"), an affiliate of the
Investment Manager, is the distributor of the Fund's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, finances certain expenses in connection therewith.
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses
that the Trustees determine to reimburse, as described below. The following
activities and services may be provided by the Distributor and other
broker-dealers under the Plan: (1) compensation to, and expenses of, the
Distributor and other broker-dealers; (2) sales incentives and bonuses to
sales representatives and to marketing personnel in connection with promoting
sales of the Fund's shares; (3) expenses incurred in connection with
promoting sales of the Fund's shares; (4) preparing and distributing sales
literature; and (5) providing advertising and promotional activities,
including direct mail solicitation and television, radio, newspaper, magazine
and other media advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses the
Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no
event exceed an amount equal to a payment at the annual rate of 0.15% of the
Fund's average daily net assets during the month. Expenses incurred by the
Distributor pursuant to the Plan in any fiscal year will not be reimbursed by
the Fund through payments accrued in any subsequent fiscal year. For the six
months ended June 30, 1997, the distribution fee was accrued at the annual
rate of 0.10%.
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1997 (unaudited) continued
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/maturities of portfolio
securities for the six months ended June 30, 1997 aggregated $288,736,080 and
$285,150,000, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1997, the Fund had
transfer agent fees and expenses payable of approximately $17,000.
The Fund has an unfunded noncontributory defined benefit pension plan
covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation
during the last five years of service. Aggregate pension costs for the six
months ended June 30, 1997 included in Trustees' fees and expenses in the
Statement of Operations amounted to $1,223. At June 30, 1997, the Fund had an
accrued pension liability of $47,414 which is included in accrued expenses in
the Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest, at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
JUNE 30, 1997 DECEMBER 31, 1996
--------------- -----------------
(UNAUDITED)
<S> <C> <C>
Shares sold ................................... 233,586,130 496,028,291
Shares issued in reinvestment of dividends ... 3,531,482 6,972,113
--------------- -----------------
237,117,612 503,000,404
Shares repurchased ............................ (242,899,613) (497,787,295)
--------------- -----------------
Net increase (decrease) in shares outstanding (5,782,001) 5,213,109
=============== =================
</TABLE>
<PAGE>
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED DECEMBER 31,
MONTHS ENDED ------------------------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
- ----------------------------------------- --------------- ---------- ----------- ---------- ---------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- ---------- ----------- ---------- ---------- ---------
Net investment income..................... 0.014 0.026 0.030 0.021 0.018 0.023
Less dividends from net investment
income................................... (0.014) (0.026) (0.030) (0.021) (0.018) (0.023)
--------------- ---------- ----------- ---------- ---------- ---------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ========== =========== ========== ========== =========
TOTAL INVESTMENT RETURN+ ................. 1.38%(1) 2.68% 3.04% 2.17% 1.78% 2.37%
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 0.73%(2)(3) 0.72%(3) 0.75%(3) 0.72% 0.71% 0.73%
Net investment income..................... 2.75%(2) 2.63% 3.00% 2.13% 1.76% 2.35%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .. $253,808 $259,590 $254,376 $217,079 $251,059 $288,044
</TABLE>
- ------------
+ Calculated based on the net asset value as of the last business day
of the period.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
- ---------------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- ---------------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Katherine H. Stromberg
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- ---------------------------------------------
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
- ---------------------------------------------
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- ---------------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.
This report is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
CALIFORNIA TAX-FREE
DAILY INCOME TRUST
SEMIANNUAL REPORT
JUNE 30, 1997
