<PAGE> 1
DEAN WITTER GOVERNMENT INCOME TRUST Two World Trade Center, New York, New York
10048
LETTER TO THE SHAREHOLDERS September 30, 1998
DEAR SHAREHOLDER:
The economy continued to expand from late 1997 through the third quarter of
1998. During this period, employment expanded, income climbed and consumers
remained resilient. Despite strong economic growth, inflation did not
materialize, attributable in large part to continued turmoil in the Asian and
emerging-market economies. As a result, the central bank left interest rates
unchanged until late September. We believe that the deflationary trend of Asian
and emerging-market economies could help keep inflation in check in the United
States well into 1999.
The current inflation environment remains benign. Members of the Federal Reserve
Board's Open Market Committee voted to reduce rates in September 1998 and again
in mid-October, and are expected to do so again over the course of the next
year. We will continue to monitor the situation closely.
During the last year, interest rates on intermediate-term U.S. Treasury
securities were highly volatile, with five-year notes ranging in yield between
4.22 percent and 6.08 percent. On September 30, 1998, the five-year note was
yielding 4.22 percent compared to 5.99 percent 12 months ago.
PERFORMANCE AND PORTFOLIO
The Trust's performance for the fiscal year ended September 30, 1998 was
enhanced by the declining interest rate environment. On September 30, 1998, the
Trust's net asset value (NAV) was $9.72 per share, up from $9.32 per share on
September 30, 1997. Based on this increase, and including reinvestment of income
dividends totaling $0.60 per share, the Trust's total return for the fiscal year
ended September 30, 1998 was 11.72 percent. Over the same period, the Trust's
market price on the New York Stock Exchange (NYSE) was up from $8.438 per share
<PAGE> 2
DEAN WITTER GOVERNMENT INCOME TRUST
LETTER TO THE SHAREHOLDERS September 30, 1998, continued
to $9.00 per share. On this basis, total return including reinvestment of income
dividends was 14.26 percent.
As of September 30, 1998, the Trust had net assets in excess of $423 million. In
light of the sharp decline in interest rates over the course of the past two
years, beginning with the October 1998 dividend, the Trust's dividend rate was
reduced to $0.047 per month. This new rate better reflects the income being
earned by the fund. In addition, the Trust has declared the following dividends:
<TABLE>
<CAPTION>
AMOUNT RECORD PAYABLE
PER SHARE DATE DATE
- --------- ---------------- -----------------
<S> <C> <C>
$0.047 November 6, 1998 November 20, 1998
0$.047.. December 4, 1998 December 18, 1998
</TABLE>
During the past 12 months, the Trust's maturity averaged between 5.3 years and
6.2 years. While this strategy has proven successful in 1998, adjustments to the
Trust's weighted-average maturity in the months ahead will be made as conditions
warrant and as attractive investment opportunities become available.
At fiscal year-end, 63 percent of the Trust's net assets were invested in
mortgage-backed securities issued by the Government National Mortgage
Association (GNMA), the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corp. (FHLMC), 10 percent in U.S. Treasury
securities, 25 percent in U.S. agency obligations and the balance in cash
equivalents.
LOOKING AHEAD
U.S. economic growth is expected to slow for the balance of 1998, and into early
1999. The Federal Reserve Board will, however, need to continually reassess its
stance on monetary policy in the months ahead.
In the coming months, as conditions warrant, income and proceeds from sales
and/or maturities may be reinvested in mortgage-backed securities, which we
believe continue to offer significant long-term value, an incremental yield
incentive over U.S. Treasury securities of similar maturity and the potential
for attractive total returns. We believe that the Trust continues to be a
competitive investment alternative in the current low inflation environment.
Please remember that the Trustees have approved a procedure whereby the Trust,
when appropriate, may repurchase shares in the open market or in privately
negotiated transactions at a price not above market value or net asset value,
whichever is lower at the time of purchase. In accordance with this
2
<PAGE> 3
DEAN WITTER GOVERNMENT INCOME TRUST
LETTER TO THE SHAREHOLDERS September 30, 1998, continued
procedure, 2,570,700 shares of the Trust were purchased on the New York Stock
Exchange over the fiscal year ended September 30, 1998.
We appreciate your support of Dean Witter Government Income Trust and look
forward to continuing to serve your investment objectives.
Very truly yours,
/S/ CHARLES A. FIUMEFREDDO
CHARLES A. FIUMEFREDDO
Chairman of the Board
3
<PAGE> 4
DEAN WITTER GOVERNMENT INCOME TRUST
PORTFOLIO OF INVESTMENTS September 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
MORTGAGE-BACKED SECURITIES (63.0%)
Federal Home Loan Mortgage Corp. (6.6%)
$ 4,506 12/01/18......................................... 9.50 % $ 4,786,258
12,743 04/01/20......................................... 10.00 13,734,201
8,600 05/01/19......................................... 10.50 9,397,689
------------
27,918,148
------------
Federal National Mortgage Assoc. (39.8%)
18,050 11/01/08......................................... 6.00 18,242,059
45,133 05/01/07 - 09/15/23.............................. 6.50 45,949,019
41,485 11/01/23......................................... 7.00 42,626,275
29,563 12/01/22......................................... 7.50 30,487,133
18,259 12/01/21......................................... 8.00 18,949,084
8,979 08/01/17......................................... 8.50 9,360,455
902 11/01/20 - 07/01/23.............................. 9.00 951,945
1,819 09/01/19......................................... 9.50 1,940,159
------------
168,506,129
------------
Government National Mortgage Assoc. (16.6%)
3,956 03/15/26......................................... 6.00 3,975,367
1,976 04/20/28 (a)..................................... 6.50 2,007,906
12,235 06/15/24......................................... 7.00 12,628,729
9,131 12/15/22......................................... 7.50 9,462,040
10,345 06/15/16......................................... 8.00 10,775,156
21,943 05/15/16......................................... 8.50 23,204,260
6,902 04/15/17......................................... 9.00 7,354,985
741 08/15/18......................................... 9.50 800,153
------------
70,208,596
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Identified Cost $256,075,490)............................. 266,632,873
------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS (35.3%)
1,500 Federal Farm Credit Bank
06/17/05........................................ 5.80 1,581,690
3,085 Federal Farm Credit Bank
01/10/05........................................ 5.90 3,258,439
2,000 Federal Farm Credit Corp.
09/23/04........................................ 6.30 2,161,240
1,000 Federal Farm Credit Corp.
09/24/07........................................ 6.52 1,105,030
14,000 Federal Home Loan Banks
02/25/04 - 07/02/12............................. 0.00 9,674,220
2,000 Federal Home Loan Banks
04/23/03........................................ 5.785 2,079,160
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
DEAN WITTER GOVERNMENT INCOME TRUST
PORTFOLIO OF INVESTMENTS September 30, 1998, continued
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
$ 1,000 Federal Home Loan Banks
07/28/08........................................ 5.945% $ 1,056,620
2,000 Federal Home Loan Banks
02/05/08........................................ 5.96 2,130,940
2,000 Federal Home Loan Banks
03/17/08........................................ 6.02 2,141,260
3,500 Federal Home Loan Banks
10/10/07........................................ 6.20 3,783,395
2,000 Federal Home Loan Banks
08/15/07........................................ 6.295 2,173,080
2,500 Federal National Mortgage Assoc.
02/01/04 - 08/01/04............................. 0.00 1,921,543
1,000 Federal National Mortgage Assoc.
07/30/07........................................ 6.75 1,063,250
103,000 Resolution Funding Corp.
10/15/01 - 10/15/07............................. 0.00 73,931,150
10,000 U.S. Treasury Note
01/31/03 - 05/31/03............................. 5.50 10,472,625
6,500 U.S. Treasury Note
12/31/02 - 02/15/06............................. 5.625 6,941,650
2,000 U.S. Treasury Note
11/15/05........................................ 5.875 2,182,960
5,000 U.S. Treasury Note
08/15/07........................................ 6.125 5,611,600
8,500 U.S. Treasury Note
02/15/07........................................ 6.25 9,563,350
2,000 U.S. Treasury Note
08/15/05........................................ 6.50 2,251,880
5,000 U.S. Treasury Strip
02/15/03........................................ 0.00 4,144,850
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Identified Cost $134,500,858)............................. 149,229,932
------------
SHORT-TERM INVESTMENT (b) (1.0%)
U.S. GOVERNMENT AGENCY
4,000 Federal Home Loan Mortgage Corp.
10/01/98 (Amortized Cost $4,000,000)............ 5.38 4,000,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
DEAN WITTER GOVERNMENT INCOME TRUST
PORTFOLIO OF INVESTMENTS September 30, 1998, continued
<TABLE>
<CAPTION>
VALUE
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Identified Cost $394,576,348) (c)................... 99.3% $419,862,805
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.7 3,167,311
----- ------------
NET ASSETS.......................................... 100.0% $423,030,116
===== ============
</TABLE>
- ---------------------
<TABLE>
<C> <S>
(a) Securities purchased on a forward commitment basis with an
approximate principal amount. The actual principal amount
will be determined upon settlement.
(b) Security was purchased on a discount basis. The interest
rate shown has been adjusted to reflect a money market
equivalent yield.
(c) The aggregate cost for federal income tax purposes
approximates identified cost. The aggregate gross unrealized
appreciation is $31,793,782 and the aggregate gross
unrealized depreciation is $6,507,325, resulting in net
unrealized appreciation of $25,286,457.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
DEAN WITTER GOVERNMENT INCOME TRUST
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1998
ASSETS:
Investments in securities, at value
(identified cost $394,576,348)............................. $419,862,805
Cash........................................................ 196,707
Receivable for:
Interest................................................ 2,498,653
Principal paydowns...................................... 973,722
Prepaid expenses and other assets........................... 22,385
-----------
TOTAL ASSETS............................................ 423,554,272
-----------
LIABILITIES:
Payable for:
Investment management fee............................... 227,044
Shares of beneficial interest repurchased............... 164,478
Accrued expenses and other payables......................... 132,634
-----------
TOTAL LIABILITIES....................................... 524,156
------------
NET ASSETS.............................................. $423,030,116
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $417,948,147
Net unrealized appreciation................................. 25,286,457
Dividends in excess of net investment income................ (50,012)
Accumulated net realized loss............................... (20,154,476)
------------
NET ASSETS.............................................. $423,030,116
============
NET ASSET VALUE PER SHARE,
43,518,600 shares outstanding
(unlimited shares authorized of $.01 par value)............ $9.72
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
DEAN WITTER GOVERNMENT INCOME TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
For the year ended September 30, 1998
NET INVESTMENT INCOME:
INTEREST INCOME............................................. $29,421,346
-----------
EXPENSES
Investment management fee................................... 2,538,648
Transfer agent fees and expenses............................ 180,602
Custodian fees.............................................. 76,622
Professional fees........................................... 45,844
Registration fees........................................... 44,429
Shareholder reports and notices............................. 44,125
Trustees' fees and expenses................................. 22,343
Other....................................................... 9,993
-----------
TOTAL EXPENSES.......................................... 2,962,606
-----------
NET INVESTMENT INCOME................................... 26,458,740
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain........................................... 18,077
Net change in unrealized appreciation....................... 16,040,482
-----------
NET GAIN................................................ 16,058,559
-----------
NET INCREASE................................................ $42,517,299
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
DEAN WITTER GOVERNMENT INCOME TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
- ------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................ $ 26,458,740 $ 28,390,909
Net realized gain................................ 18,077 55,238
Net change in unrealized appreciation............ 16,040,482 9,296,771
------------ ------------
NET INCREASE................................. 42,517,299 37,742,918
Dividends from net investment income............. (26,897,809) (28,178,965)
Net decrease from transactions in shares of
beneficial interest............................. (22,353,586) (19,695,793)
------------ ------------
NET DECREASE................................. (6,734,096) (10,131,840)
NET ASSETS:
Beginning of period.............................. 429,764,212 439,896,052
------------ ------------
END OF PERIOD
(Including dividends in excess of net
investment income of $50,012 and
undistributed net investment income of
$389,057, respectively)...................... $423,030,116 $429,764,212
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
DEAN WITTER GOVERNMENT INCOME TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1998
1. ORGANIZATION AND ACCOUNTING POLICIES
Dean Witter Government Income Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end
management investment company. The Trust's primary investment objective is to
provide as high a level of current income as is consistent with prudent
investment and as a secondary objective, capital appreciation. The Trust
commenced operations on February 29, 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 -- (1) 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; (2) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager"), formerly Dean Witter InterCapital Inc., that sale or bid prices are
not reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the Trustees (valuation of debt securities for
which market quotations are not readily available may be based upon current
market prices of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing similar factors); (3) certain portfolio
securities may be valued by an outside pricing service approved by the Trustees.
The pricing service may utilize a matrix system incorporating security quality,
maturity and coupon as the evaluation model parameters, and/or research and
evaluations by its staff, including review of broker-dealer market price
quotations, if available, in determining what it believes is the fair valuation
of the securities valued by such pricing service; and (4) short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by
10
<PAGE> 11
DEAN WITTER GOVERNMENT INCOME TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1998, continued
the identified cost method. Discounts are accreted over the life of the
respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Trust records dividends
and distributions to its shareholders on the record date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Trust pays the Investment
Manager a management fee, accrued weekly and payable monthly, by applying the
annual rate of 0.60% to the Trust's weekly net assets.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of all
personnel, including officers of the Trust who are employees of the Investment
Manager. The Investment Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Trust.
11
<PAGE> 12
DEAN WITTER GOVERNMENT INCOME TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1998, continued
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales/prepayments of portfolio
securities, excluding short-term investments, for the year ended September 30,
1998 aggregated $68,084,458 and $93,025,766, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager, is
the Trust's transfer agent. At September 30, 1998, the Trust had transfer agent
fees and expenses payable of approximately $2,400.
The Trust has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Trust who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended September 30, 1998
included in Trustees' fees and expenses in the Statement of Operations amounted
to $5,366. At September 30, 1998, the Trust had an accrued pension liability of
$50,544 which is included in accrued expenses in the Statement of Assets and
Liabilities.
4. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL
PAID IN
PAR VALUE EXCESS OF
SHARES OF SHARES PAR VALUE
---------- --------- ------------
<S> <C> <C> <C>
Balance, September 30, 1996................................. 48,438,400 $484,384 $474,997,268
Treasury shares purchased and retired (weighted average
discount 8.91%)*........................................... (2,349,100) (23,491) (19,672,302)
Reclassification due to permanent book/tax differences...... -- -- (10,423,130)
---------- -------- ------------
Balance, September 30, 1997................................. 46,089,300 460,893 444,901,836
Treasury shares purchased and retired (weighted average
discount 7.73%)*........................................... (2,570,700) (25,707) (22,327,879)
Reclassification due to permanent book/tax differences...... -- -- (5,060,996)
---------- -------- ------------
Balance, September 30, 1998................................. 43,518,600 $435,186 $417,512,961
========== ======== ============
</TABLE>
- ---------------------
* The Trustees have voted to retire the shares purchased.
12
<PAGE> 13
DEAN WITTER GOVERNMENT INCOME TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1998, continued
5. DIVIDENDS
On September 29, 1998, the Trust declared the following dividends from net
investment income:
<TABLE>
<CAPTION>
AMOUNT RECORD PAYABLE
PER SHARE DATE DATE
- --------- ---------------- -----------------
<S> <C> <C>
$0.047 October 9, 1998 October 23, 1998
$0.047 November 6, 1998 November 20, 1998
$0.047 December 4, 1998 December 18, 1998
</TABLE>
6. FEDERAL INCOME TAX STATUS
At September 30, 1998, the Trust had a net capital loss carryover of
approximately $20,152,000 to offset future capital gains to the extent provided
by regulations, available through September 30 of the following years:
<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- -------------------------------------------------------------
1999 2002 2003 2004 2006
------ -------- -------- -------- ----
<S> <C> <C> <C> <C>
$191 $8,299 $9,638 $2,019 $5
==== ====== ====== ====== ==
</TABLE>
Capital losses incurred after October 31 ("post-October" losses) within the
taxable year are deemed to arise on the first business day of the Trust's next
taxable year. The Trust incurred and will elect to defer net capital losses of
approximately $2,000 during fiscal 1998.
As of September 30, 1998, the Trust had permanent book/tax differences
attributable to an expired capital loss carryover. To reflect reclassifications
arising from these differences, paid-in-capital was charged and accumulated net
realized loss was credited $5,060,996.
13
<PAGE> 14
DEAN WITTER GOVERNMENT INCOME TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30*
------------------------------------------------------------------
1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period..................... $ 9.32 $ 9.08 $ 9.17 $ 8.69 $ 9.54
---------- -------- -------- -------- --------
Net investment income.................................... 0.59 0.61 0.60 0.58 0.62
Net realized and unrealized gain (loss).................. 0.37 0.19 (0.14) 0.43 (0.77)
---------- -------- -------- -------- --------
Total from investment operations......................... 0.96 0.80 0.46 1.01 (0.15)
---------- -------- -------- -------- --------
Less dividends from net investment income................ (0.60) (0.60) (0.60) (0.60) (0.73)
---------- -------- -------- -------- --------
Anti-dilutive effect of acquiring treasury shares........ 0.04 0.04 0.05 0.07 0.03
---------- -------- -------- -------- --------
Net asset value, end of period........................... $ 9.72 $ 9.32 $ 9.08 $ 9.17 $ 8.69
========== ======== ======== ======== ========
Market value, end of period.............................. $ 9.00 $ 8.438 $ 8.25 $ 8.25 $ 7.875
========== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+................................. 14.26% 9.86% 7.31% 12.97% (5.97)%
RATIOS TO AVERAGE NET ASSETS:
Expenses................................................. 0.70% 0.73% 0.73% 0.71% 0.70 %
Net investment income.................................... 6.27% 6.60% 6.56% 6.50% 6.73 %
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands.................. $423,030 $429,764 $439,896 $475,471 $486,634
Portfolio turnover rate.................................. 16% 19% 21% 25% 59 %
</TABLE>
- ---------------------
* The per share amounts were computed using an average number of shares
outstanding during the period.
+ Total investment return is based upon the current market value on the last
day of each period reported. Dividends are assumed to be reinvested at the
prices obtained under the Trust's dividend reinvestment plan. Total
investment return does not reflect brokerage commissions.
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE> 15
DEAN WITTER GOVERNMENT INCOME TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER GOVERNMENT INCOME TRUST
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter Government Income Trust
(the "Trust") at September 30, 1998, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 1998 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
November 5, 1998
15
<PAGE> 16
TRUSTEES
- ----------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- ----------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Barry Fink
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- ----------------------------------------
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
- ----------------------------------------
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- ----------------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
DEAN WITTER
GOVERNMENT
INCOME TRUST
Annual Report
September 30, 1998
