<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1999
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
We are pleased to present the semiannual report on the operations of Morgan
Stanley Dean Witter California Tax-Free Daily Income Trust for the six-month
period ended June 30, 1999.
Tax-free money-market yields moved upward during this period, following the
lead of the taxable money market. This increase in yield reversed the trend of
the latter half of 1998 and reflected the market's response to the persistent
strength in the U.S. economy. The steady release of robust economic data
prompted the Federal Reserve Board to adopt a bias toward higher short-term
interest rates in mid-May. The anticipated Fed tightening became reality at the
end of June when the federal funds rate was increased from 4.75 percent to 5.00
percent. At the same time, however, the Fed reverted to a neutral stance that
appeared to make prospects for another rate hike less likely over the near
term. This had a stabilizing effect on the fixed-income markets.
MUNICIPAL MONEY MARKET OVERVIEW
Within the municipal money market, the trend of interest rates was most
apparent among securities maturing in six months to one year. Early in the
year, one-year yields declined moderately as demand for securities outstripped
supply, but from late February through the end of June, yields moved higher
along with taxable money-market yields. The Bond Buyer One Year Note Index, a
benchmark indicator for the longest maturities in the tax-free money market
sector, registered a net increase of 35 basis points, from 3.04 percent at the
end of December 1998 to 3.39 percent in late June. Nevertheless, one-year
yields as measured by the Index were still 20 basis points lower at the end of
June compared to one year earlier. The ratio of the One Year Note Index to the
yield for one-year U.S. Treasury bills was 66 percent at the end of June,
unchanged from a year earlier. A stable ratio means that performance of
securities in this sector of the municipal market has tracked the performance
of Treasuries with comparable maturities.
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1999, continued
At the short end of the tax-free money market, interest rates fluctuated in a
wider pattern. Yields for variable-rate demand obligations (VRDOs) with daily
and weekly rate changes were driven primarily by changing cash flows and
fluctuated more widely than yields for longer maturities. Yields for weekly
VRDOs moved over a 180-basis-point range from a low of 2.20 percent in early
February, when cash inflows were strong, to a high of 4.00 percent during tax
season in April. However, during periods when supply and demand were in
balance, the municipal money market yield curve was flat with little difference
between one-year note yields and yields for daily or weekly VRDOs. The average
yield for weekly VRDOs was approximately 3.10 percent for the first half of
1999. This was comparable to the average yield for one-year notes over the same
period.
PERFORMANCE AND PORTFOLIO STRATEGY
Morgan Stanley Dean Witter California Tax-Free Daily Income Trust's annualized
net investment income ratio was 2.14 percent for the six-month period ended
June 30, 1999. The Fund's thirty-day average yield was 2.29 percent as of June
30, 1999.
On June 30, the Fund's net assets totaled $252.9 million with 56 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 27 percent and 17 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
our investments. The Fund has had no exposure to Asian bank letters of credit
or liquidity facilities for more than three years.
At the end of June the Fund's average maturity was 64 days, up from 40 days at
the end of December. The Fund's weighted average maturity is usually extended
each year between mid-June and early July when newly issued one-year tax and
revenue anticipation notes (TRANs) come to market in large supply. The addition
of longer fixed-rate securities smoothes out portfolio yields by offsetting
some of the yield volatility of VRDOs with daily and weekly rate changes.
LOOKING AHEAD
With the rate change in June the Federal Reserve Board has confirmed its
previously signaled intention of becoming less accommodative in the face of
continued strong domestic economic growth by taking back some of the liquidity
it provided in the fall of 1998. In this environment the Fund's average
maturity will be monitored carefully in order to meet the stated objectives of
stability of principal and liquidity.
2
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
LETTER TO THE SHAREHOLDERS June 30, 1999, continued
On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley
Dean Witter Funds. Mr. Merin is the President and Chief Operating Officer of
Asset Management for Morgan Stanley Dean Witter & Co. and President, Chief
Executive Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the
Fund's investment manager. He also serves as Chairman, Chief Executive Officer
and Director of the Fund's distributor and transfer agent.
We appreciate your ongoing support of Morgan Stanley Dean Witter California
Tax-Free Daily Income Trust and look forward to continuing to serve your
investment objectives.
Very truly yours,
/s/ Charles. A Fiumefreddo /s/ Mitchell M. Merin
- ---------------------------- -----------------------
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
3
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1999 (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 (62.9%)
$ 4,920 Alameda-Contra Costa Schools Financing Authority, Capital Improvements Ser F
COPs ......................................................................... 3.45% 07/08/99 $ 4,920,000
California Educational Facilities Authority,
10,300 California Institute of Technology Ser 1994 .................................. 3.40 07/08/99 10,300,000
8,275 Stanford University Ser L-2 .................................................. 3.05 07/08/99 8,275,000
California Health Facilities Financing Authority,
3,000 Catholic Healthcare West 1997 Ser B (MBIA) ................................... 3.00 07/08/99 3,000,000
8,000 Memorial Health Services 1994 Ser** .......................................... 3.20 07/08/99 8,000,000
9,400 St Francis Medical Center 1995 Ser E (MBIA)** ................................ 3.35 07/08/99 9,400,000
8,855 St Joseph Health System Ser 1985A ............................................ 2.85 07/01/99 8,855,000
California Pollution Control Financing Authority,
1,000 Chevron USA Inc Ser 1983 ..................................................... 3.10 11/15/99 1,000,286
5,000 Chevron USA Inc Ser 1984B .................................................... 3.15 12/15/99 5,000,832
8,850 Pacific Gas & Electric Co 1996 Ser F & 1997 Ser A ............................ 3.10 07/01/99 8,850,000
10,000 California Public Capital Improvements Financing Authority, Pooled
Ser 1988 C** ................................................................. 3.15 09/15/99 10,000,000
California Statewide Communities Development Authority,
3,000 House Ear Institute 1993 Ser A COPs .......................................... 3.10 07/01/99 3,000,000
5,000 St Joseph Health System COPs ................................................. 3.10 07/08/99 5,000,000
8,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Ser 1995C ........... 3.30 07/08/99 8,000,000
8,100 Los Angeles, Multi-family 1985 Ser K ........................................... 3.30 07/08/99 8,100,000
5,000 Los Angeles County Metropolitan Transportation Authority, Prop C Sales Tax
Refg Ser 1993-A (MBIA)** ..................................................... 3.35 07/08/99 5,000,000
12,000 Metropolitan Water District of Southern California, Water 1997 Ser B &
1998 Ser C ................................................................... 3.50 07/08/99 12,000,000
3,900 Monterey County Financing Authority, 1995 Ser A ................................ 3.45 07/08/99 3,900,000
12,900 Newport Beach, Hoag Memorial Hospital Presbyterian Ser 1992 & 1996 Ser A ....... 3.15 07/01/99 12,900,000
5,000 Oakland Joint Powers Financing Authority, 1998 Ser A-2 (FSA) ................... 3.50 07/08/99 5,000,000
6,000 Rancho California Water District Financing Authority, Ser 1998A (FGIC) ......... 3.00 07/08/99 6,000,000
4,000 Southern California Public Power Authority, Transmission Refg Sub 1991 Ser
(AMBAC) ...................................................................... 3.25 07/08/99 4,000,000
PUERTO RICO
8,500 Puerto Rico Highway & Transportation Authority, Transportation 1998 Ser A
(AMBAC) ...................................................................... 3.10 07/08/99 8,500,000
-----------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(Amortized Cost $159,001,118) .................................................. 159,001,118
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1999 (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 (29.6%)
$ 4,000 California Pollution Control Financing Authority, Southern
California Edison Co Ser 1985 A .............................. 3.00% 08/16/99 3.00% $ 4,000,000
4,800 Contra Costa Water District, Ser A ............................. 2.90 07/20/99 2.90 4,800,000
East Bay Municipal Utility District,
3,500 Water ........................................................ 3.15 08/19/99 3.15 3,500,000
4,000 Water ........................................................ 3.00 09/23/99 3.00 4,000,000
7,000 Los Angeles, Wastewater Ser 1997 ............................... 3.20 08/18/99 3.20 7,000,000
3,500 Los Angeles County Metropolitan Transportation Authority,
Sales Tax Ser A .............................................. 2.80 08/12/99 2.80 3,500,000
San Diego,
4,000 San Diego Gas & Electric Co 1995 Ser A ....................... 2.60 07/14/99 2.60 4,000,000
5,000 San Diego Gas & Electric Co 1995 Ser B ....................... 3.00 08/18/99 3.00 5,000,000
San Diego County Regional Transportation Commission,
5,300 Ser A ........................................................ 3.00 08/11/99 3.00 5,300,000
5,000 Ser A ........................................................ 3.15 09/08/99 3.15 5,000,000
San Diego County Water Authority,
3,700 Ser # 1 ...................................................... 2.80 07/22/99 2.80 3,700,000
6,000 Ser # 1 ...................................................... 2.80 08/09/99 2.80 6,000,000
San Joaquin County Transportation Authority,
5,000 Sales Tax Ser 1997 ........................................... 3.20 08/23/99 3.20 5,000,000
4,000 Sales Tax Ser 1997 ........................................... 2.70 08/25/99 2.70 4,000,000
PUERTO RICO
Puerto Rico Government Development Bank,
5,000 Ser 1996 ..................................................... 2.85 07/21/99 2.85 5,000,000
5,000 Ser 1996 ..................................................... 2.85 09/13/99 2.85 5,000,000
-----------
10,000,000
-----------
TOTAL CALIFORNIA TAX-EXEMPT COMMERCIAL PAPER
(Amortized Cost $74,800,000) ................................................................... 74,800,000
-----------
CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES (19.4%)
Alameda County,
5,000 Ser 1998-99 TRANs, dtd 07/08/98 .............................. 4.50 07/07/99 3.60 5,000,714
3,000 Ser 1999-2000 TRANs, dtd 07/08/99 (WI) ....................... 4.00 07/07/00 3.32 3,019,680
5,000 California Community College Financing Authority, 1999 Ser A
TRANs, dtd 07/01/99 (WI) ..................................... 4.00 06/30/00 3.09 5,044,000
California School Cash Reserve Program Authority,
5,000 1998 Pool Ser, dtd 07/02/98 .................................. 4.50 07/02/99 3.74 5,000,100
10,000 1999 Pool Ser A (AMBAC), dtd 07/02/99 (WI) ................... 4.00 07/03/00 3.10 10,087,500
5,000 Fresno County, 1998-99 TRANs, dtd 07/02/98 ..................... 4.00 07/01/99 3.59 5,000,000
3,000 Kern County, 1999-2000 TRANs, dtd 07/01/99 (WI) ................ 4.00 06/30/00 3.15 3,024,630
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1999 (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>
$ 10,000 Los Angeles County, 1999-2000 Ser A TRANs, dtd 07/01/99 (WI) 4.00% 06/30/00 3.32 % $ 10,065,600
3,000 San Francisco Unified School District, 1998 TRANs, dtd 09/03/98 4.50 09/22/99 3.40 3,007,301
-------------
TOTAL CALIFORNIA TAX-EXEMPT SHORT-TERM MUNICIPAL NOTES
(Amortized Cost $49,249,525) ......................................................................... 49,249,525
-------------
TOTAL INVESTMENTS (Amortized Cost $283,050,643) (a) ..................................... 111.9 % 283,050,643
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS .......................................... (11.9) (30,191,630)
------ -------------
NET ASSETS .............................................................................. 100.0 % $ 252,859,013
=============
</TABLE>
- ---------------
COPs Certificates of Participation.
TRANs Tax Revenue Anticipation Notes.
WI Security purchased on a "when-issued" basis.
+ Rate shown is rate in effect at June 30, 1999.
* Date on which the principal amount can be recovered through demand.
** All or a portion of these securities are segregated in connection
with the purchase of "when-issued" securities.
(a) Cost is the same for federal income tax purposes.
Bond Insurance:
AMBAC AMBAC Assurance Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $283,050,643).......................... $ 283,050,643
Cash .................................................... 1,447,805
Interest receivable ..................................... 1,611,460
Prepaid expenses and other assets ....................... 13,906
-------------
TOTAL ASSETS ...................................... 286,123,814
-------------
LIABILITIES:
Payable for:
Investments purchased ................................ 31,241,410
Shares of beneficial interest repurchased ............ 1,799,452
Investment management fee ............................ 117,159
Plan of distribution fee ............................. 23,432
Accrued expenses ........................................ 83,348
-------------
TOTAL LIABILITIES ................................. 33,264,801
-------------
NET ASSETS ........................................ $ 252,859,013
=============
COMPOSITION OF NET ASSETS:
Paid-in-capital ......................................... $ 252,858,853
Accumulated undistributed net investment income ......... 160
-------------
NET ASSETS ........................................ $ 252,859,013
=============
NET ASSET VALUE PER SHARE,
252,858,853 shares outstanding (unlimited shares
authorized of $.01 par value) ......................... $1.00
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999 (unaudited)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ................................ $3,817,836
----------
EXPENSES
Investment management fee ...................... 670,585
Plan of distribution fee ....................... 129,561
Transfer agent fees and expenses ............... 75,378
Professional fees .............................. 37,061
Shareholder reports and notices ................ 19,275
Trustees' fees and expenses .................... 9,072
Custodian fees ................................. 6,677
Registration fees .............................. 5,647
Other .......................................... 4,538
----------
TOTAL EXPENSES .............................. 957,794
Less: expense offset ........................... (6,677)
----------
NET EXPENSES ................................ 951,117
----------
NET INVESTMENT INCOME AND NET INCREASE ......... $2,866,719
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY 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, 1999 DECEMBER 31, 1998
--------------- ------------------
<S> <C> <C>
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................ $ 2,866,719 $ 7,398,716
Dividends from net investment income ................. (2,866,662) (7,398,744)
Net decrease from transactions in shares of beneficial
interest ........................................... (30,523,394) (3,618,367)
------------- ------------
NET DECREASE ...................................... (30,523,337) (3,618,395)
NET ASSETS:
Beginning of period .................................. 283,382,350 287,000,745
------------- ------------
END OF PERIOD
(Including undistributed net investment income of
$160 and $103, respectively)....................... $ 252,859,013 $283,382,350
============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1999 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley 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 Morgan Stanley Dean Witter
Advisors 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
10
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1999 (unaudited) continued
the portion of 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
Morgan Stanley 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, Morgan
Stanley Dean Witter Financial Advisors and other selected 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, 1999, the distribution fee was accrued at the annual rate of
0.10%.
11
<PAGE>
MORGAN STANLEY DEAN WITTER CALIFORNIA TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS June 30, 1999 (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, 1999 aggregated $244,926,410 and
$246,450,000, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent. At June 30, 1999, the Fund had
transfer agent fees and expenses payable of approximately $3,300.
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, 1999
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,883. At June 30, 1999, the Fund had an accrued pension liability of
$50,816 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, 1999 DECEMBER 31, 1998
----------------- ------------------
(unaudited)
<S> <C> <C>
Shares sold ........................................ 221,794,639 526,385,736
Shares issued in reinvestment of dividends ......... 2,866,662 7,398,744
----------- -----------
224,661,301 533,784,480
Shares repurchased ................................. (255,184,695) (537,402,847)
------------ ------------
Net decrease in shares outstanding ................. (30,523,394) (3,618,367)
============ ============
</TABLE>
12
<PAGE>
MORGAN STANLEY 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
JUNE 30, 1999
----------------------
(unaudited)
<S> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period .............. $1.00
-----
Net income from investments operations ............ 0.011
Less dividends from net investment income ......... (0.011)
-----
Net asset value, end of period .................... $1.00
=====
TOTAL RETURN ...................................... 1.07%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 0.71%(2)(3)
Net investment income ............................. 2.14%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........... $252,859
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
------ -------- ------- -------- ------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period .............. $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Net income from investments operations ............ 0.025 0.028 0.026 0.030 0.021
Less dividends from net investment income ......... (0.025) (0.028) (0.026) (0.030) (0.021)
----- ------ ------ ------ -----
Net asset value, end of period .................... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL RETURN ...................................... 2.54% 2.83% 2.68% 3.04% 2.17%
RATIOS TO AVERAGE NET ASSETS:
Expenses .......................................... 0.70%(3) 0.72%(3) 0.72%(3) 0.75%(3) 0.72%
Net investment income ............................. 2.50% 2.79% 2.63% 3.00% 2.13%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ........... $283,382 $287,001 $259,590 $254,376 $217,079
</TABLE>
- -------------
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
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
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Katherine H. Stromberg
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
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. Read the
prospectus carefully before investing.
MORGAN STANLEY
DEAN WITTER
CALIFORNIA TAX-FREE
DAILY INCOME TRUST
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SEMIANNUAL REPORT
June 30, 1999
