<PAGE> 1
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST Two World Trade Center, New
LETTER TO THE SHAREHOLDERS June 30, 1996 York, New York 10048
DEAR SHAREHOLDER:
In contrast to the pattern of lower interest rates in 1995, tax-free money
market yields trended upward during the first six months of 1996. The fixed
income markets opened the year with a confident tone and the decline in
short-term interest rates which started one year earlier was sustained into
mid-February. The positive outlook faded, however, as healthy economic
indicators aroused concern that the Federal Reserve's easing step in late
January could be its last. The shift in market psychology began in earnest after
a surprisingly large increase in payroll employment was reported in early March.
By the end of June prevailing sentiment entertained the possibility of the Fed
tightening later in the summer.
At the long end of the tax-free money market, yields for municipal securities
maturing in six months to one year moved higher in conjunction with the rise in
taxable money market yields. The Bond Buyer One Year Note Index, a widely
followed indicator of longer-term municipal money market interest rates, dipped
to a two-year low of 3.08 percent in mid-February aided by seasonal demand. For
the balance of the first half of 1996 one year note rates rose steadily and the
Index reached 3.88 percent at the end of June.
Interest rates for shorter maturities, represented by daily and weekly variable
rate demand obligations (VRDOs), responded to the seasonal pattern of cash
flows. Weekly VRDO yields dropped quickly at the start of the year falling from
5.00 percent in late December to 3.00 percent in early February in the face of
strong demand, rose above 4.00 percent during tax payment season in late April
and declined again to finish June at 3.30 percent.
<PAGE> 2
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1996, continued
PORTFOLIO MANAGEMENT AND PERFORMANCE
Dean Witter California Tax-Free Daily Income Trust produced a total return of
1.30 percent for the six-month period ended June 30, 1996. Thirty-day yields
ranged from a low of 2.38 percent for the month of March to a high of 2.84
percent for the month of May.
The Fund's net assets exceeded $255 million, with 48 percent of the Fund's
portfolio invested in VRDOs. California-exempt commercial paper and municipal
notes, the two other types of securities utilized in the portfolio, comprised 39
percent and 13 percent of the portfolio, respectively.
During most of the six-month period, the Fund's weighted average maturity fell
within a short to moderate range of 25 to 50 days. Seasonal purchases of new
one-year tax and revenue anticipation notes (TRANS) marketed in June caused the
average maturity to extend. At the end of June, the Fund's average maturity had
lengthened to 71 days, well within the overall limit of 90 days.
Portfolio holdings are continuously reviewed to maintain or improve
creditworthiness. Particular attention is devoted to monitoring the credit
quality of banks providing letters of credit and liquidity facilities for our
investments. Over the past several years, mounting concern about Japanese bank
exposure had prompted the steady reduction in securities supported by these
banks. The final holding was eliminated early in the first half of 1996.
LOOKING AHEAD
Over the coming months, the market's attention will be focused on the Federal
Reserve Board's next step in monetary policy. Strong employment numbers and the
potential for inflation prompt a cautious approach to the risk of rising
interest rates. In this uncertain environment the average maturity of the Fund's
portfolio is expected to remain conservative. As always, we will maintain our
emphasis on high quality and liquidity in making investment selections.
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.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO
- --------------------------
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE> 3
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON DEMAND
THOUSANDS RATE+ DATE* VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(52.7%)
California Educational Facilities Authority,
$ 6,300 California Institute of Technology Ser 1994............................ 3.10% 07/04/96 $ 6,300,000
5,775 Stanford University Ser L-2............................................ 2.90 07/03/96 5,775,000
California Health Facilities Financing Authority,
4,200 Catholic HealthCare West 1988 Ser A (MBIA)............................. 3.00 07/03/96 4,200,000
6,000 Childrens Hospital of Orange County Ser 1991 (MBIA).................... 3.00 07/04/96 6,000,000
5,000 Memorial Health Services Ser 1994...................................... 3.00 07/03/96 5,000,000
10,000 St Francis Medical Center 1995 Ser E (MBIA)............................ 3.00 07/03/96 10,000,000
5,300 St Francis Memorial Hospital Ser 1993 B................................ 3.10 07/01/96 5,300,000
6,000 St Joseph Health System Ser 1991 B..................................... 3.00 07/01/96 6,000,000
4,000 Scripps Memorial Hospital Ser 1991 B (MBIA)............................ 3.05 07/03/96 4,000,000
2,300 Sutter Health Ser 1990 A............................................... 3.10 07/01/96 2,300,000
California Pollution Control Financing Authority,
1,615 Chevron USA Ser 1983................................................... 4.00 11/15/96 1,616,785
2,000 Chevron USA Ser 1984 B................................................. 3.70 06/16/97 2,000,000
3,000 Chevron USA Ser 1984 B................................................. 4.25 06/16/97 3,001,252
3,400 Noranda-Grey Eagle Mines Inc Ser 1985 C................................ 3.40 07/03/96 3,400,000
2,000 Pacific Gas & Electric Co Ser 1996 F................................... 3.40 07/01/96 2,000,000
10,000 California Public Capital Improvements Financing Authority, Pooled
Ser 1988 C............................................................. 3.65 09/15/96 10,000,000
6,000 California Statewide Communities Development Authority, Kaiser
Permanente Ser 1995 COPs............................................... 3.00 07/03/96 6,000,000
11,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Ser 1995 C... 3.10 07/03/96 11,000,000
5,000 Long Beach, Memorial Health Services Ser 1991........................... 3.00 07/03/96 5,000,000
5,900 Los Angeles, Multi-family 1985 Ser K.................................... 3.10 07/02/96 5,900,000
5,000 Los Angeles County Metropolitan Transportation Authority, Prop C Sales
Tax Refg Ser 1993 A (MBIA)............................................. 3.00 07/04/96 5,000,000
5,500 Newport Beach, Hoag Memorial Hospital/Presbyterian 1992 Ser A........... 3.55 07/01/96 5,500,000
4,000 Sacramento County, Administration Center & Courthouse Ser 1990 COPs..... 3.10 07/04/96 4,000,000
5,000 San Diego, Lusk Mira Mesa Apts Issue E 1985............................. 3.10 07/04/96 5,000,000
9,000 Southern California Public Power Authority, Transmission 1991 Refg Ser
(AMBAC)................................................................ 3.10 07/03/96 9,000,000
1,700 Puerto Rico Highway & Transportation, Ser X............................. 3.00 07/03/96 1,700,000
-----------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(Amortized Cost $134,993,037).................................................................. 134,993,037
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 4
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY
AMOUNT IN COUPON MATURITY ON DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER (42.5%)
California,
$ 2,500 Ser 1996.................................................. 3.55% 08/21/96 3.55 % $ 2,500,000
3,500 Ser 1996.................................................. 3.55 08/21/96 3.55 3,500,000
6,000 Ser 1996.................................................. 3.55 08/28/96 3.55 6,000,000
California Pollution Control Financing Authority,
3,000 Pacific Gas & Electric Co 1988 Ser E...................... 3.15 07/31/96 3.15 3,000,000
5,500 Pacific Gas & Electric Co 1988 Ser C...................... 3.30 08/08/96 3.30 5,500,000
4,000 Pacific Gas & Electric Co 1988 Ser E...................... 3.15 08/15/96 3.15 4,000,000
3,000 Southern California Edison Co Ser A 1985.................. 3.30 08/13/96 3.30 3,000,000
3,000 Southern California Edison Co Ser D 1985.................. 3.35 08/20/96 3.35 3,000,000
1,100 Southern California Edison Co Ser D 1985.................. 3.45 08/20/96 3.45 1,100,000
6,000 Delmar Race Track Authority, Ser 1993 BANs.................. 3.35 08/15/96 3.35 6,000,000
East Bay Municipal Utility District,
5,000 Water..................................................... 3.45 07/25/96 3.45 5,000,000
2,500 Water..................................................... 3.45 08/27/96 3.45 2,500,000
4,500 Water..................................................... 3.50 08/27/96 3.50 4,500,000
Metropolitan Water District of Southern California,
5,000 Ser 1991.................................................. 3.45 08/06/96 3.45 5,000,000
6,100 Ser 1991.................................................. 3.50 08/22/96 3.50 6,100,000
Sacramento Municipal Utility District,
5,000 Ser I..................................................... 3.30 09/25/96 3.30 5,000,000
5,000 Ser I..................................................... 3.50 10/22/96 3.50 5,000,000
San Diego,
4,000 San Diego Gas & Electric Co Ser 1995 A.................... 3.35 09/26/96 3.35 4,000,000
4,000 San Diego Gas & Electric Co Ser 1995 A.................... 3.50 10/24/96 3.50 4,000,000
San Diego County Water Authority,
5,500 Ser #1.................................................... 3.35 08/23/96 3.35 5,500,000
5,000 Ser #1.................................................... 3.45 08/29/96 3.45 5,000,000
West & Central Basin Financing Authority,
4,000 West Basin Municipal Water District TRANs................. 3.40 08/14/96 3.40 4,000,000
3,000 West Basin Municipal Water District TRANs................. 3.50 10/03/96 3.50 3,000,000
Puerto Rico
4,000 Puerto Rico Government Development Bank..................... 3.20 07/11/96 3.20 4,000,000
3,500 Puerto Rico Government Development Bank..................... 3.70 07/24/96 3.70 3,500,000
5,000 Puerto Rico Government Development Bank..................... 3.65 09/11/96 3.65 5,000,000
-----------
TOTAL CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER
(Amortized Cost $108,700,000)............................. 108,700,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited) continued
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY
AMOUNT IN COUPON MATURITY ON DATE OF
THOUSANDS RATE DATE PURCHASE VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES & BONDS
(14.9%)
$ 6,000 California School Cash Reserve Program Authority, 1995 Pool
Ser A, dtd 07/05/95........................................ 4.75% 07/03/96 3.75 % $ 6,000,631
7,000 Contra Costa County, 1996-1997 TRANs, dtd 07/01/96 (WI)..... 4.50 07/03/97 3.753 7,050,640
5,000 Riverside County, 1996-1997 Ser A TRANs, dtd 07/01/96
(WI)....................................................... 4.50 06/30/97 3.90 5,028,750
5,000 San Bernardino County, 1996-1997 TRANs, dtd 07/01/96 (WI)... 4.50 06/30/97 3.875 5,030,000
4,000 San Diego, 1996-1997 Ser A TANs, dtd 07/02/96 (WI).......... 4.50 07/02/97 3.75 4,028,880
6,000 Santa Barbara County, 1995-1996 Ser A TRANs, dtd 07/06/95... 4.50 07/05/96 3.79 6,000,673
5,000 Ventura County, Ser 1996 TRANs, dtd 07/02/96 (WI)........... 4.75 07/02/97 3.85 5,043,300
----------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES & BONDS
(Amortized Cost $38,182,874)..................................................................... 38,182,874
----------
TOTAL INVESTMENTS (Amortized Cost $281,875,911) (a).........................................110.1% 281,875,911
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS..............................................(10.1) (25,898,983)
---- ------------
NET ASSETS..................................................................................100.0% $255,976,928
==== ============
</TABLE>
- ---------------------
BANs Bond Anticipation Notes.
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, 1996.
* Date on which the principal amount can be recovered through
demand.
(a) Cost is the same for federal income tax purposes.
Bond Insurance:
AMBAC AMBAC Indemnity Corporation.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 6
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS
<TABLE>
<S> <C>
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1996 (unaudited)
ASSETS:
Investments in securities, at value
(amortized cost $281,875,911)........... $281,875,911
Cash..................................... 137,260
Interest receivable...................... 1,565,473
Prepaid expenses and other assets........ 52,381
------------
TOTAL ASSETS......................... 283,631,025
------------
LIABILITIES:
Payable for:
Investments purchased................ 26,158,280
Shares of beneficial interest
repurchased......................... 1,294,170
Investment management fee............ 98,872
Plan of distribution fee............. 19,774
Accrued expenses......................... 83,001
------------
TOTAL LIABILITIES.................... 27,654,097
------------
NET ASSETS:
Paid-in-capital.......................... 255,976,751
Accumulated undistributed net investment
income.................................. 177
------------
NET ASSETS........................... $255,976,928
============
NET ASSET VALUE PER SHARE
255,976,751 shares outstanding
(unlimited shares authorized of $.01 par
value).................................. $1.00
====
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(unaudited)
NET INVESTMENT INCOME:
INTEREST INCOME............................ $4,282,547
----------
EXPENSES
Investment management fee.................. 654,672
Plan of distribution fee................... 128,760
Transfer agent fees and expenses........... 62,449
Professional fees.......................... 18,117
Shareholder reports and notices............ 9,300
Trustees' fees and expenses................ 8,559
Custodian fees............................. 7,759
Registration fees.......................... 3,694
Other...................................... 2,595
----------
TOTAL EXPENSES BEFORE EXPENSE OFFSET... 895,905
LESS: EXPENSE OFFSET................... (7,593)
----------
TOTAL EXPENSES AFTER EXPENSE OFFSET.... 888,312
----------
NET INVESTMENT INCOME.................. 3,394,235
NET REALIZED GAIN...................... 933
----------
NET INCREASE............................... $3,395,168
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 7
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS, continued
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
1996 DECEMBER 31, 1995
-------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................... $ 3,394,235 $ 6,918,770
Net realized gain................................... 933 --
----------- -----------
NET INCREASE.................................... 3,395,168 6,918,770
Dividends from net investment income................ (3,394,240) (6,918,924)
Net increase from transactions in shares of
beneficial interest................................ 1,599,649 37,297,439
----------- -----------
TOTAL INCREASE.................................. 1,600,577 37,297,285
NET ASSETS:
Beginning of period................................. 254,376,351 217,079,066
----------- -----------
END OF PERIOD
(Including undistributed net investment income
of $177 and $182, respectively)................. $255,976,928 $ 254,376,351
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 8
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (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 the
daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% to
the
<PAGE> 9
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (unaudited) continued
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, 1996, the distribution fee was accrued at the annual rate of 0.10%.
<PAGE> 10
DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1996 (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, 1996 aggregated $304,034,850 and $276,517,000,
respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1996, the Fund had
transfer agent fees and expenses payable of approximately $16,500.
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, 1996
included in Trustees' fees and expenses in the Statement of Operations amounted
to $422. At June 30, 1996, the Fund had an accrued pension liability of $48,883
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
MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
1996 DECEMBER 31, 1995
------------ -----------------
(unaudited)
<S> <C> <C>
Shares sold........................................................................... 244,353,863 483,320,990
Shares issued in reinvestment of dividends............................................ 3,394,240 6,918,252
------------ ------------
247,748,103 490,239,242
Shares repurchased.................................................................... (246,148,454) (452,941,803)
------------ ------------
Net increase in shares outstanding.................................................... 1,599,649 37,297,439
============ ============
</TABLE>
<PAGE> 11
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
MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31
JUNE 30, ----------------------------------------------
1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................... $1.00 $1.00 $1.00 $1.00
------- ----- ----- -----
Net investment income.................................. 0.013 0.030 0.021 0.018
Less dividends from net investment income.............. (0.013) (0.030) (0.021) (0.018)
------- ----- ----- -----
Net asset value, end of period......................... $1.00 $1.00 $1.00 $1.00
======= ===== ===== =====
TOTAL INVESTMENT RETURN+............................... 1.30%(1) 3.04% 2.17% 1.78%
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................... 0.68%(2) 0.75%(3) 0.72% 0.71%
Net investment income.................................. 2.59%(2) 3.00% 2.13% 1.76%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................ $255,977 $254,376 $217,079 $251,059
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
----------------------------------------------
1992 1991
----------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................... $1.00 $1.00
----- -----
Net investment income.................................. 0.023 0.037
Less dividends from net investment income.............. (0.023) (0.037)
----- -----
Net asset value, end of period......................... $1.00 $1.00
===== =====
TOTAL INVESTMENT RETURN+............................... 2.37% 3.77%
RATIOS TO AVERAGE NET ASSETS:
Expenses............................................... 0.73% 0.70%
Net investment income.................................. 2.35% 3.70%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................ $288,044 $332,426
</TABLE>
- ---------------------
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) The above expense ratio was 0.74% after expense offset, which reflects
0.01% effect for custody cash credits.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 12
BOARD OF DIRECTORS
- -------------------------------------------------------
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
Sheldon Curtis
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 directors,
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
[LOGO]
Semiannual Report
June 30, 1996
