<PAGE>
Morgan Stanley Dean Witter Two World Trade Center,
Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999 New York, New York 10048
DEAR SHAREHOLDER:
The U.S. economy, led by consumer demand, has continued to experience robust
growth this year. The fixed-income markets anticipated that the Federal Reserve
Board would remove the liquidity it provided during last year's international
economic crises. The Fed changed monetary policy and raised the federal-funds
rate 50 basis points to 5.25 percent during the summer. By October long-term
interest rates had risen to levels last seen two years ago. Subsequently, the
Fed raised the federal-funds rate an additional 25 basis points to 5.50 percent
in November.
MUNICIPAL MARKET CONDITIONS
Long-term insured municipal index yields began 1999 near a record low of 5.05
percent. By the end of October, municipal index yields had increased 100 basis
points to 6.05 percent. Since bond prices move inversely to changes in interest
rates, these higher yields resulted in significantly lower bond prices. The
increase in yields translated into a 13 percent price decline for a generic
insured municipal bond with a 30-year maturity.
The municipal market outperformed U.S. Treasury bonds early in the year but
gradually gave ground. The ratio of long-term insured municipal index yields to
benchmark 30-year Treasury yields is a measure of relative performance. The
ratio declined from 99 percent at the end of 1998 to 91 percent in May before
rising to 98 percent by the end of October. A declining ratio means that
municipals have outperformed Treasuries. Over the past five years the ratio has
ranged from a high of 99 percent, to a low of 82 percent.
Higher interest rates led to a reduction in municipal market underwriting this
year. New issue volume declined 20 percent in the first ten months of 1999.
Refunding activity, the most interest rate sensitive component of supply, was
down 50 percent.
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999, continued
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
30-YEAR BOND YIELDS 1994-1999
AAA AAA
Date Ins Tsy % Relationship Date Ins Tsy % Relationship
12/31/93 5.40% 6.34% 85.17% 11/29/96 5.50 6.35 86.61%
01/31/94 5.40 6.24 86.54% 12/31/96 5.60 6.63 84.46%
02/28/94 5.80 6.66 87.09% 01/31/97 5.70 6.79 83.95%
03/31/94 6.40 7.09 90.27% 02/28/97 5.65 6.80 83.09%
04/29/94 6.35 7.32 86.75% 03/31/97 5.90 7.10 83.10%
05/31/94 6.25 7.43 84.12% 04/30/97 5.75 6.94 82.85%
06/30/94 6.50 7.61 85.41% 05/30/97 5.65 6.91 81.77%
07/29/94 6.25 7.39 84.57% 06/30/97 5.60 6.78 82.60%
08/31/94 6.30 7.45 84.56% 07/30/97 5.30 6.30 84.13%
09/30/94 6.55 7.81 83.87% 08/31/97 5.50 6.61 83.21%
10/31/94 6.75 7.96 84.80% 09/30/97 5.40 6.40 84.38%
11/30/94 7.00 8.00 87.50% 10/31/97 5.35 6.15 86.99%
12/30/94 6.75 7.88 85.66% 11/30/97 5.30 6.05 87.60%
01/31/95 6.40 7.70 83.12% 12/31/97 5.15 5.92 86.99%
02/28/95 6.15 7.44 82.66% 01/31/98 5.15 5.80 88.79%
03/31/95 6.15 7.43 82.77% 02/28/98 5.20 5.92 87.84%
04/28/95 6.20 7.34 84.47% 03/31/98 5.25 5.93 88.53%
05/31/95 5.80 6.66 87.09% 04/30/98 5.35 5.95 89.92%
06/30/95 6.10 6.62 92.15% 05/29/98 5.20 5.80 89.66%
07/31/95 6.10 6.86 88.92% 06/30/98 5.20 5.65 92.04%
08/31/95 6.00 6.66 90.09% 07/31/98 5.18 5.71 90.72%
09/29/95 5.95 6.48 91.82% 08/31/98 5.03 5.27 95.45%
10/31/95 5.75 6.33 90.84% 09/30/98 4.95 5.00 99.00%
11/30/95 5.50 6.14 89.58% 10/31/98 5.05 5.16 97.87%
12/29/95 5.35 5.94 90.07% 11/30/98 5.00 5.06 98.81%
01/31/96 5.40 6.03 89.55% 12/31/98 5.05 5.10 99.02%
02/29/96 5.60 6.46 86.69% 01/31/99 5.00 5.09 98.23%
03/29/96 5.85 6.66 87.84% 02/28/99 5.10 5.58 91.40%
04/30/96 5.95 6.89 86.36% 03/31/99 5.15 5.63 91.47%
05/31/96 6.05 6.99 86.55% 04/30/99 5.20 5.66 91.87%
06/28/96 5.90 6.89 85.63% 05/31/99 5.30 5.83 90.91%
07/31/96 5.85 6.97 83.93% 06/30/99 5.47 5.96 91.78%
08/30/96 5.90 7.11 82.98% 07/31/99 5.55 6.10 90.98%
09/30/96 5.70 6.93 82.25% 08/31/99 5.75 6.06 94.88%
10/31/96 5.65 6.64 85.09% 09/30/99 5.85 6.05 96.69%
10/31/99 6.03 6.16 97.89%
Source: Municipal Market Data-A Division of Thomson Financial Municipal Group
and Bloomberg L.P.
PERFORMANCE
In this interest rate environment, the net asset value (NAV) of Morgan Stanley
Dean Witter Insured Municipal Income Trust (IIM) declined from $15.47 to $13.69
per share for the fiscal year ended October 31, 1999. Based on this change plus
reinvestment of tax-free dividends totaling $0.8425 per share, the Trust's total
NAV return was -6.25 percent. IIM's value on the New York Stock Exchange (NYSE)
fell from $14.8125 to $13.25 per share during the same period. Based on this
change plus reinvestment of tax-free dividends, the IIM's total market return
was -5.17 percent. On October 31, 1999, IIM's NYSE market price represented a
3.21 percent discount to its NAV.
Monthly dividends for the fourth quarter of 1999 were declared in September.
Beginning with the October payment, the dividend was increased from $0.07 to
$0.0725 per share. The new dividend rate reflects the Trust's estimated earnings
over the next 6 - 12 months and its $0.117 per share cushion of undistributed
net investment income on October 31, 1999.
2
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999, continued
PORTFOLIO STRUCTURE
The Trust's investments were diversified among 13 long-term sectors and 75
credits. At the end of October, the portfolio's average maturity was 19 years.
Average duration, a measure of sensitivity to interest rate changes, was 10.3
years. Issues in the refunded bond category comprised 8 percent of net assets.
These bonds have been refinanced and will be redeemed on the dates shown in the
portfolio. The accompanying charts provide current information on the
portfolio's credit enhancements, sector distribution and geographic
diversification. Optional call provisions by year with their respective cost
(book) yields are also charted.
THE IMPACT OF LEVERAGING
As discussed in previous shareholder reports, the total income available for
distribution to common shareholders includes incremental income provided by the
Trust's outstanding Auction Rate Preferred shares (ARPS). ARPS dividends reflect
prevailing short-term interest rates on maturities normally ranging from one
week to one year. Incremental income to common shareholders depends on two
factors. The first factor is the amount of ARPS outstanding, while the second is
the spread between the portfolio's cost yield and ARPS expenses (ARPS auction
rate and expenses). The greater the spread and amount of ARPS outstanding, the
greater the amount of incremental income available for distribution to common
shareholders. The level of net investment income available for distribution to
common shareholders varies with the level of short-term interest rates. ARPS
leverage also increases the price volatility of common shares and has the effect
of extending portfolio duration.
During the 12-month period, ARPS leverage contributed approximately $0.08 per
share to common share earnings. Weekly ARPS yields ranged between 2.75 and 5.00
percent. In comparison, the yield on 1-year municipal notes increased from 3.04
percent at the end of 1998, to 3.77 percent at the end of October 1999. The
Trust's five ARPS series totaled $155 million and represented 29 percent of net
assets.
LOOKING AHEAD
The Federal Reserve Board raised interest rates twice in the summer and again in
November 1999. This confirmed its previously disclosed bias of becoming less
accommodative in the face of continued strong domestic economic growth.
Depending on the impact of tight labor markets and higher commodity prices on
inflation, the central bank may raise short-term interest rates further.
However, we believe municipal bonds continue to offer long-term investors good
value especially in relationship to Treasuries.
The Trust's procedure for reinvestment of all dividends and distributions on
common shares is through purchases in the open market. This method helps
support the market value of the Trust's shares. In
3
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999, continued
addition, we would like to remind you that the Trustees have approved a
procedure whereby the Trust, when appropriate, may purchase 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. The Trust may
also utilize procedures to reduce or eliminate the amount of outstanding ARPS,
including their purchase in the open market or in privately negotiated
transactions. During the fiscal year ended October 31, 1999 the Trust purchased
and retired 368,900 shares of common stock at a weighted average market discount
of 5.33 percent.
We appreciate your ongoing support of Morgan Stanley Dean Witter Insured
Municipal Income Trust and look forward to continuing to serve your investment
needs.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
- -------------------------- ---------------------
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
4
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999, continued
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
LARGEST SECTORS AS OF OCTOBER 31, 1999
(% OF NET ASSETS)
ELECTRIC 19%
WATER & SEWER 13%
HOSPITAL 12%
IDR/PCR* 11%
HOUSING 9%
REFUNDED 8%
GENERAL OBLIGATION 8%
TRANSPORTATION 7%
* INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
CREDIT ENHANCEMENTS AS OF OCTOBER 31, 1999
(% OF TOTAL LONG-TERM PORTFOLIO)
FSA 17%
FGIC 20%
AMBAC 22%
MBIA 41%
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
GEOGRAPHIC SUMMARY OF INVESTMENTS
BASED ON MARKET VALUE AS A PERCENT OF NET ASSETS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ALABAMA ....................... 0.8% KENTUCKY ...................... 3.2% NORTH CAROLINA ................ 3.5%
ALASKA ........................ 0.6 LOUISIANA ..................... 2.7 OHIO .......................... 0.8
ARIZONA ....................... 1.8 MAINE ......................... 1.9 PENNSYLVANIA .................. 6.7
CALIFORNIA .................... 4.6 MASSACHUSETTS ................. 3.5 RHODE ISLAND .................. 2.8
COLORADO ...................... 1.4 MICHIGAN ...................... 3.6 SOUTH CAROLINA ................ 4.3
CONNECTICUT ................... 2.8 MINNESOTA ..................... 0.4 TENNESSEE ..................... 1.6
DISTRICT OF COLUMBIA .......... 2.9 MISSOURI ...................... 0.8 TEXAS ......................... 9.1
FLORIDA ....................... 4.0 MONTANA ....................... 1.0 UTAH .......................... 0.7
GEORGIA ....................... 1.4 NEVADA ........................ 4.3 VIRGINIA ...................... 2.2
HAWAII ........................ 0.3 NEW JERSEY .................... 2.4 WASHINGTON .................... 5.1
ILLINOIS ...................... 5.8 NEW MEXICO .................... 1.0 WEST VIRGINIA ................. 2.4
INDIANA ....................... 5.0 NEW YORK ...................... 1.0 WISCONSIN ..................... 2.7
----
TOTAL ......................... 99.1%
====
</TABLE>
Portfolio structure is subject to change.
5
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Letter to the Shareholders October 31, 1999, continued
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
CALL AND COST (BOOK) YIELD STRUCTURE
OCTOBER 31, 1999
PERCENT CALLABLE*
1999 0%
2000 2%
2001 0%
2002 16%
2003 55%
2004 3%
2005 2%
2006 1%
2007 1%
2008 3%
2009 5%
2010+ 12%
WEIGHTED AVERAGE CALL PROTECTION: 6 YEARS
COST (BOOK) YIELD**
1999 0.0%
2000 6.0%
2001 0.0%
2002 5.8%
2003 5.8%
2004 5.8%
2005 5.9%
2006 5.9%
2007 5.6%
2008 5.3%
2009 5.5%
2010+ 5.7%
WEIGHTED AVERAGE BOOK YIELD: 5.8%
* % BASED ON LONG-TERM PORTFOLIO.
** COST OR "BOOK" YIELD IS THE ANNUAL INCOME EARNED ON A PORTFOLIO INVESTMENT
BASED ON ITS ORIGINAL PURCHASE PRICE BEFORE TRUST OPERATING EXPENSES. FOR
EXAMPLE, THE TRUST EARNED A BOOK YIELD OF 5.8% ON 16% OF THE LONG-TERM
PORTFOLIO THAT IS CALLABLE IN 2002.
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
6
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Results of Annual Meeting (unaudited)
* * *
On October 28, 1999, an annual meeting of the Trust's shareholders was held for
the purpose of voting on three separate matters, the results of which were as
follows:
(1) ELECTION OF TRUSTEES BY ALL SHAREHOLDERS:
Wayne E. Hedien
For ...................................... 19,896,360
Withheld ................................. 373,000
John L. Schroeder
For ...................................... 19,889,666
Withheld ................................. 379,694
(2) ELECTION OF TRUSTEE BY PREFERRED SHAREHOLDERS:
Dr. Manuel H. Johnson
For ...................................... 2,713
Withheld ................................. 1
The following Trustees were not standing for reelection at this meeting:
Michael Bozic, Charles A. Fiumefreddo, Edwin J. Garn, Michael E. Nugent
and Philip J. Purcell.
(3) RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANTS:
For ...................................... 19,811,129
Against .................................. 86,623
Abstain .................................. 371,608
7
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Portfolio of Investments October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
TAX-EXEMPT MUNICIPAL BONDS (96.9%)
General Obligation (7.7%)
District of Columbia,
$ 5,000 Refg Ser 1993 B (AMBAC) ..................................................... 5.50 % 06/01/09 $ 5,040,500
6,000 Refg Ser 1993 B (FSA) ....................................................... 5.50 06/01/10 5,990,160
10,000 Cook County, Illinois, Ser B (FGIC) .......................................... 5.50 11/15/22 9,181,400
5,000 River Rouge School District, Michigan, 1993 Bldg & Site Unltd Tax (FSA) ...... 5.625 05/01/22 4,770,100
3,000 Vicksburg Community Schools, Michigan, 1993 Refg (MBIA) ...................... 5.625 05/01/20 2,878,500
6,000 Clark County Sanitation District, Nevada, Refg 1993 (FGIC) ................... 5.70 07/01/12 6,051,480
8,000 Washoe County, Nevada, Reno - Sparks Convention Ltd Tax Ser 1993 A
(FGIC) ...................................................................... 5.75 07/01/22 7,676,720
--------- ------------
43,000 41,588,860
--------- ------------
Educational Facilities Revenue (3.3%)
4,000 Alabama State University, General Tuition & Fee Ser 1993 (MBIA) .............. 5.70 05/01/15 3,957,840
3,000 District of Columbia, American Association for the Advancement of Science
Ser 1997 (AMBAC) ............................................................ 5.125 01/01/27 2,571,930
4,000 Illinois Educational Facilities Authority, DePaul University Refg Ser 1997
(AMBAC) ..................................................................... 5.50 10/01/19 3,733,920
3,000 Indiana University, Student Fee Ser J (FGIC) ................................. 5.00 08/01/18 2,615,850
Rhode Island Health & Educational Building Corporation,
2,500 Providence College Ser 1993 (MBIA) .......................................... 5.60 11/01/15 2,412,975
2,500 Providence College Ser 1993 (MBIA) .......................................... 5.60 11/01/22 2,346,500
--------- ------------
19,000 17,639,015
--------- ------------
Electric Revenue (18.5%)
16,000 Redding, California, Ser 1993 A COPs (FGIC) .................................. 5.684 06/01/19 15,673,760
Massachusetts Municipal Wholesale Electric Company,
5,000 1993 Ser A (AMBAC) .......................................................... 5.00 07/01/10 4,842,950
10,000 1993 Ser A (AMBAC) .......................................................... 5.45 07/01/18 9,375,900
20,000 North Carolina Municipal Power Agency #1, Catawba Ser 1993 (MBIA) ............ 5.60 01/01/20 18,913,400
4,000 Piedmont Municipal Power Agency, South Carolina, Refg Ser 1993 (MBIA) ........ 5.375 01/01/25 3,682,880
11,600 South Carolina Public Service Authority, 1993 Refg Ser A (MBIA) .............. 5.50 07/01/21 10,755,056
10,000 Lower Colorado River Authority, Texas, Refg Ser 1999 A (FSA) (WI) ............ 5.875 05/15/16 9,973,500
8,000 Texas Municipal Power Agency, Refg Ser 1993 (MBIA) ........................... 5.25 09/01/12 7,752,560
10,000 Washington Public Power Supply System, Nuclear Proj #1 Refg Ser 1993 A
(MBIA) ...................................................................... 5.70 07/01/17 9,691,900
10,000 Wisconsin Public Power Incorporated, Refg Ser 1993 A (AMBAC) ................. 5.25 07/01/21 8,940,400
--------- ------------
104,600 99,602,306
--------- ------------
Hospital Revenue (11.7%)
5,000 Mesa Industrial Development Authority, Arizona, Discovery Health
Ser 1999 A (MBIA) ........................................................... 5.875 01/01/16 4,945,550
2,100 District of Columbia, Children's Hospital Refg Ser 1992 A (FGIC) ............. 6.25 07/15/10 2,211,090
5,000 Sarasota County Public Hospital Board, Florida, Sarasota Memorial Hospital
Refg Ser 1998 B (MBIA) ...................................................... 5.25 07/01/24 4,508,050
</TABLE>
See Notes to Financial Statements
8
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Portfolio of Investments October 31, 1999 , continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- -------- ---------- ------------
<S> <C> <C> <C> <C>
$ 8,000 Fulton-DeKalb Hospital Authority, Georgia, Grady Memorial Hospital
Refg Ser 1993 (MBIA) ......................................................... 5.50 % 01/01/20 $ 7,464,080
4,000 Indiana Health Facilities Financing Authority, Deaconess Hospital Inc
Refg Ser 1993 (MBIA) ......................................................... 5.75 03/01/15 3,908,080
5,000 Kentucky Economic Development Finance Authority, St Elizabeth Medical
Center Inc Ser 1993 A (FGIC) ................................................. 6.00 12/01/22 4,974,950
3,935 Maine Health & Higher Educational Facilities Authority, Ser 1993 A (FSA) ...... 5.50 07/01/23 3,631,690
5,000 Massachusetts Health & Educational Facilities Authority, Lahey Clinic
Medical Center Ser B (MBIA) .................................................. 5.625 07/01/15 4,825,500
5,000 Missouri Health & Educational Facilities Authority, SSM Health Care
Ser 1998 A (MBIA) ............................................................ 5.00 06/01/22 4,324,650
5,000 Washington County Hospital Authority, Pennsylvania, Washington Hospital
Ser 1993 (AMBAC) ............................................................. 5.625 07/01/23 4,698,100
4,000 Chattanooga-Hamilton County Hospital Authority, Tennessee, Erlanger
Medical Center Refg Ser 1993 (FSA) ........................................... 5.50 10/01/13 3,908,600
5,075 Amarillo Health Facilities Corporation, Texas, Baptist St Anthony's Hospital
Ser 1998 (FSA) ............................................................... 5.50 01/01/17 4,836,171
4,000 Washington Health Care Facilities, Swedish Health Services Ser 1998
(AMBAC) ...................................................................... 5.125 11/15/22 3,441,160
5,500 Wisconsin Health & Educational Facilities Authority, Sisters of the Sorrowful
Mother Health Care Ser AA (MBIA) ............................................. 6.25 06/01/20 5,519,140
--------- ------------
66,610 63,196,811
--------- ------------
Industrial Development/Pollution Control Revenue (10.6%)
7,500 Adams County, Colorado, Public Service Co of Colorado Refg 1993 Ser A
(MBIA) ....................................................................... 5.875 04/01/14 7,538,625
4,000 St Johns County Industrial Development Authority, Florida, Professional Golf
Hall of Fame Ser 1996 (MBIA) ................................................. 5.875 09/01/23 3,997,080
12,000 Indiana Development Finance Authority, PSI Energy Inc Ser 1993 B (AMT)
(MBIA) ....................................................................... 5.75 02/15/28 11,213,040
4,900 Monroe County, Michigan, Detroit Edison Co Ser CC (AMT) (MBIA) ................ 6.55 06/01/24 5,082,427
5,400 Forsyth, Montana, Puget Sound Power & Light Co Ser 1993 (MBIA) ................ 5.875 04/01/20 5,320,836
Washoe County, Nevada, Sierra Pacific Power Co
3,000 Ser 1987 (AMBAC) ............................................................. 6.30 12/01/14 3,090,720
5,000 Ser 1990 (AMT) (MBIA) ........................................................ 6.65 06/01/17 5,264,550
6,000 New York State Energy Research & Development Authority,
Brooklyn Union Gas Co Ser D-1 & 2 (AMT) (MBIA) ............................... 5.635 07/08/26 5,589,540
10,000 Brazos River Authority, Texas, Texas Utilities Electric Co Ser 1993 A (AMT)
(AMBAC) ...................................................................... 6.05 04/01/25 9,841,400
--------- ------------
57,800 56,938,218
--------- ------------
Mortgage Revenue - Multi-Family (1.5%)
8,675 West Virginia Housing Development Fund, Ser A (AMBAC) ......................... 5.65 11/01/21 8,236,739
--------- ------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Portfolio of Investments October 31, 1999 , continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Mortgage Revenue - Single Family (7.8%)
$ 3,000 Alaska Housing Finance Corporation, Governmental 1995 Ser A (MBIA) ............ 5.875% 12/01/24 $ 2,889,450
15,690 Connecticut Housing Finance Authority, 1992 Ser A-2 (AMT)
(Secondary FSA) .............................................................. 6.05 11/15/25 15,249,111
1,195 Maine Housing Authority, Mortgage Purchase 1990 Ser A-6 (AMT)
(Secondary MBIA) ............................................................. 6.35 11/15/22 1,197,713
13,000 New Jersey Housing & Mortgage Finance Agency, Home Buyer
1990 Ser F-3 (AMT) (MBIA) .................................................... 5.95 04/01/25 12,854,920
10,000 Virginia Housing Development Authority, 1992 Ser B (AMT) (Secondary FSA)....... 6.30 01/01/27 9,934,600
--------- ------------
42,885 42,125,794
--------- ------------
Public Facilities Revenue (4.3%)
10,000 California Public Works Board, Corrections Refg 1993 Ser A (AMBAC) ............ 5.00 12/01/19 8,991,800
5,000 Florida Department of Management Services, Pool Refg Ser 1992 (AMBAC) ......... 5.40 09/01/14 4,858,500
10,000 Marion County Convention & Recreational Facilities Authority, Indiana,
Excise Tax Refg Ser 1993 A (AMBAC) ........................................... 5.50 06/01/21 9,295,900
--------- ------------
25,000 23,146,200
--------- ------------
Student Loan Revenue (3.3%)
18,000 Pennsylvania Higher Education Assistance Agency, 1988 Ser D (AMT)
--------- (AMBAC) ...................................................................... 6.05 01/01/19 17,848,980
------------
Transportation Facilities Revenue (6.6%)
5,000 Tucson, Arizona, Street & Highway Jr Lien Refg Ser 1993 (MBIA) ................ 5.50 07/01/12 4,999,600
5,000 Chicago, Illinois, Chicago-O'Hare Int'l Airport Second Lien Refg 1993 Ser A
(AMT) (MBIA) ................................................................. 5.60 01/01/18 4,704,200
3,000 Kentucky Turnpike Authority, Econ Dev Road Revitalization Refg Ser 1993
(AMBAC) ...................................................................... 5.50 07/01/11 3,012,780
2,500 Minneapolis - St Paul Metropolitan Airports Commission, Minnesota,
Ser 1999 A (FGIC) ............................................................ 5.125 01/01/31 2,165,000
1,250 Clark County, Nevada, Las Vegas - McCarran Int'l Airport Sub Lien
Ser 1999 A (MBIA) (WI) ....................................................... 6.00 07/01/29 1,239,600
9,000 Pennsylvania Turnpike Commission, Refg Ser O 1992 (FGIC) ...................... 5.50 12/01/17 8,602,470
5,000 South Carolina Transportation Infrastructure Bank, Ser 1999 A (AMBAC) ......... 5.50 10/01/16 4,813,350
4,000 Salt Lake City, Utah, Airport Refg Ser 1993 B (FGIC) .......................... 5.875 12/01/18 3,890,280
2,000 Richmond Metropolitan Authority, Virginia, Expressway 1992 Ser B (FGIC) ....... 6.25 07/15/22 2,019,220
--------- ------------
36,750 35,446,500
--------- ------------
Water & Sewer Revenue (12.9%)
2,000 Honolulu City and County, Hawaii, Wastewater Sr Ser 1998 (FGIC) ............... 4.75 07/01/28 1,622,440
15,000 Central Lake County Joint Action Water Agency, Illinois, Refg Ser 1993
(FGIC) ....................................................................... 5.375 05/01/20 13,753,500
10,000 Louisville & Jefferson County Metropolitan Sewer District, Kentucky,
Ser 1993 (MBIA) .............................................................. 5.30 05/15/19 9,187,500
2,470 Detroit, Michigan, Sewage Refg Ser 1993 A (FGIC) .............................. 5.70 07/01/13 2,474,520
5,000 Grand Rapids, Michigan, Sewer Impr & Refg Ser 1998 A (FGIC) ................... 4.75 01/01/28 4,073,700
5,000 Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA) ...................... 5.00 01/01/23 4,338,700
</TABLE>
See Notes to Financial Statements
10
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Portfolio of Investments October 31, 1999 , continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
$ 15,000 Houston, Texas, Water & Sewer 1992 Ser C (MBIA) ............................ 5.75 % 12/01/15 $ 14,983,500
Seattle, Washington,
10,000 Sewer Refg Ser Y (FGIC) ................................................... 5.70 01/01/15 9,806,300
5,000 Sewer Refg Ser X (FGIC) ................................................... 5.50 01/01/16 4,797,950
5,000 West Virginia Water Development Authority, Loan Program II
Refg Ser A-11 (FSA) ....................................................... 5.50 11/01/23 4,690,150
--------- -----------
74,470 69,728,260
--------- -----------
Other Revenue (0.5%)
3,000 Florida Department of Environmental Protection, Preservation 2000
--------- Ser 1999 A (FGIC) ......................................................... 5.25 07/01/13 2,914,320
-----------
Refunded (8.2%)
13,700 Louisiana Public Facilities Authority, Our Lady of the Lake Regional Medical
Center Ser 1993 D & E (FSA)** ............................................. 5.90 05/28/04+ 14,417,469
6,065 Maine Health & Higher Educational Facilities Authority, Ser 1993 A (FSA)
(ETM) ..................................................................... 5.50 07/01/23 5,640,389
5,000 Allegheny County Hospital Development Authority, Pennsylvania,
Pittsburgh Mercy Health Ser 1996 (AMBAC) (ETM) ............................ 5.625 08/15/18 4,870,000
10,000 Rhode Island Depositors Economic Protection Corporation, Refg 1992 Ser B
(MBIA) (ETM) .............................................................. 6.00 08/01/17 10,242,800
4,360 Piedmont Municipal Power Agency, South Carolina, Refg Ser 1993 (MBIA)
(ETM) ..................................................................... 5.375 01/01/25 4,072,240
5,000 Shelby County Health, Educational & Housing Facility Board, Tennessee,
LeBonheur Children's Medical Center Inc Ser D (MBIA) (ETM) ................ 5.50 08/15/19 4,828,650
--------- ------------
44,125 44,071,548
--------- ------------
543,915 TOTAL TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $534,832,787) ..................................... 522,483,551
--------- ------------
SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (2.2%)
5,300 Collier County Health Facilities Authority, Florida, Cleveland Clinic
Foundation Ser 1999 (Demand 11/01/99) ..................................... 3.65* 01/01/33 5,300,000
5,200 Farmington, New Mexico, Arizona Public Service Co Ser 1994 B
(Demand 11/01/99) ......................................................... 3.55* 09/01/24 5,200,000
1,700 Harris County Health Facilities Development Corporation, Texas,
St Luke's Episcopal Hospital Ser 1997 B (Demand 11/01/99) ................. 3.65* 02/15/27 1,700,000
--------- ------------
12,200 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (Identified Cost $12,200,000) 12,200,000
--------- ------------
$ 556,115 TOTAL INVESTMENTS (Identified Cost $547,032,787) (a) ................................. 99.1% 534,683,551
=========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ....................................... 0.9 4,593,503
----- ------------
NET ASSETS ........................................................................... 100.0% $539,277,054
===== ============
</TABLE>
See Notes to Financial Statements
11
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Portfolio of Investments October 31, 1999 , continued
- ---------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
ETM Escrowed to maturity.
WI Security purchased on a when-issued basis.
+ Prerefunded to call date shown.
* Current coupon of variable rate demand obligation.
** This security is segregated in connection with the purchase of "when-
issued" securities.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$2,250,713 and the aggregate gross unrealized depreciation is
$14,599,949, resulting in net unrealized depreciation of $12,349,236.
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
12
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $547,032,787).......................................... $534,683,551
Cash ..................................................................... 96,299
Receivable for:
Interest .............................................................. 9,824,398
Investments sold ...................................................... 6,444,712
Prepaid expenses and other assets ........................................ 315,293
-------------
TOTAL ASSETS .......................................................... 551,364,253
-------------
LIABILITIES:
Payable for:
Investments purchased ................................................. 11,446,392
Dividends to preferred shareholders ................................... 339,901
Investment management fee ............................................. 193,884
Accrued expenses ......................................................... 107,022
-------------
TOTAL LIABILITIES ..................................................... 12,087,199
-------------
NET ASSETS ............................................................... $539,277,054
=============
COMPOSITION OF NET ASSETS:
Preferred shares of beneficial interest (1,000,000 shares authorized of
non-participating $.01 par value, 3,100 shares outstanding) ............ $155,000,000
-------------
Common shares of beneficial interest (unlimited shares authorized of
$.01 par value, 28,064,113 shares outstanding).......................... 403,247,136
Net unrealized depreciation .............................................. (12,349,236)
Accumulated undistributed net investment income .......................... 3,295,888
Accumulated net realized loss ............................................ (9,916,734)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .......................... 384,277,054
-------------
TOTAL NET ASSETS ...................................................... $539,277,054
=============
NET ASSET VALUE PER COMMON SHARE
($384,277,054 divided by 28,064,113 common shares outstanding).......... $13.69
=======
</TABLE>
See Notes to Financial Statements
13
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Financial Statements, continued
STATEMENT OF OPERATIONS
For the year ended October 31, 1999
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ............................... $ 31,422,847
------------
EXPENSES
Investment management fee ..................... 2,029,156
Auction commission fees ....................... 506,356
Professional fees ............................. 112,562
Transfer agent fees and expenses .............. 112,156
Shareholder reports and notices ............... 50,976
Auction agent fees ............................ 41,115
Registration fees ............................. 33,274
Custodian fees ................................ 24,327
Trustees' fees and expenses ................... 17,857
Other ......................................... 47,012
------------
TOTAL EXPENSES ............................. 2,974,791
Less: expense offset .......................... (24,166)
------------
NET EXPENSES ............................... 2,950,625
------------
NET INVESTMENT INCOME ...................... 28,472,222
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain ............................. 1,342,564
Net change in unrealized appreciation ......... (51,093,174)
------------
NET LOSS ................................... (49,750,610)
------------
NET DECREASE .................................. $(21,278,388)
============
</TABLE>
See Notes to Financial Statements
14
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Financial Statements, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................... $ 28,472,222 $ 29,004,299
Net realized gain ....................................... 1,342,564 3,722,951
Net change in unrealized appreciation ................... (51,093,174) 16,764,229
------------- -------------
NET INCREASE (DECREASE) .............................. (21,278,388) 49,491,479
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Preferred ............................................... (5,349,191) (5,734,332)
Common .................................................. (23,908,726) (22,792,814)
------------- -------------
TOTAL DIVIDENDS ...................................... (29,257,917) (28,527,146)
------------- -------------
Decrease from transactions in common shares of beneficial
interest .............................................. (4,993,279) (15,886,137)
------------- -------------
NET INCREASE (DECREASE) .............................. (55,529,584) 5,078,196
NET ASSETS:
Beginning of period ..................................... 594,806,638 589,728,442
------------- -------------
END OF PERIOD
(Including undistributed net investment income
of $3,295,888 and $4,081,583, respectively)........... $ 539,277,054 $ 594,806,638
============= =============
</TABLE>
See Notes to Financial Statements
15
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Notes to Financial Statements October 31, 1999
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Insured Municipal 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 investment
objective is to provide current income which is exempt from federal income tax.
The Trust was organized as a Massachusetts business trust on March 12, 1992 and
commenced operations on February 26, 1993.
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 by an outside
independent pricing service approved by the Trustees. The pricing service has
informed the Trust that in valuing the portfolio securities, it uses both a
computerized matrix of tax-exempt securities and evaluations by its staff, in
each case based on information concerning market transactions and quotations
from dealers which reflect the bid side of the market each day. The portfolio
securities are thus valued by reference to a combination of transactions and
quotations for the same or other securities believed to be comparable in
quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. 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 the identified cost method.
The Trust 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 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 and nontaxable 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 ex-dividend 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
16
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Notes to Financial Statements October 31, 1999, continued
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, calculated weekly and payable monthly, by applying the
annual rate of 0.35% to the Trust's weekly net assets.
Under the terms of the Agreement, 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.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended October 31, 1999 aggregated
$30,853,663 and $41,538,786, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager, is
the Trust's transfer agent. At October 31, 1999, the Trust had transfer agent
fees and expenses payable of approximately $1,800.
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 October 31, 1999 included
in Trustees' fees and expenses in the Statement of Operations amounted to
$5,299. At October 31, 1999, the Trust had an accrued pension liability of
$37,735 which is included in accrued expenses in the Statement of Assets and
Liabilities.
17
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Notes to Financial Statements October 31, 1999, continued
4. PREFERRED SHARES OF BENEFICIAL INTEREST
The Trust is authorized to issue up to 1,000,000 non-participating preferred
shares of beneficial interest having a par value of $.01 per share, in one or
more series, with rights as determined by the Trustees, without approval of the
common shareholders. The Trust has issued Series 1 through 5 Auction Rate
Preferred Shares ("Preferred Shares") which have a liquidation value of $50,000
per share plus the redemption premium, if any, plus accumulated but unpaid
dividends, whether or not declared, thereon to the date of distribution. The
Trust may redeem such shares, in whole or in part, at the original purchase
price of $50,000 per share plus accumulated but unpaid dividends, whether or not
declared, thereon to the date of redemption.
Dividends, which are cumulative, are reset through auction procedures.
AMOUNT IN RESET RANGE OF
SERIES SHARES* THOUSANDS* RATE* DATE DIVIDEND RATES**
- -------- --------- ------------ ------------ ---------- -----------------
1 400 $20,000 3.55 % 11/01/99 2.75% - 5.00 %
2 900 45,000 3.85 09/05/00 3.52 - 3.85
3 1,000 50,000 3.60 07/10/00 3.58 - 3.60
4 400 20,000 3.298 11/01/99 2.75 - 4.75
5 400 20,000 3.55 11/01/99 2.75 - 4.875
- ---------------
* As of October 31, 1999.
** For the year ended October 31, 1999.
Subsequent to October 31, 1999 and up through December 3, 1999, the Trust paid
dividends to each of the Series 1 through 5 at rates ranging from 3.00% to 3.85%
in the aggregate amount of $788,021.
The Trust is subject to certain restrictions relating to the preferred shares.
Failure to comply with these restrictions could preclude the Trust from
declaring any distributions to common shareholders or purchasing common shares
and/or could trigger the mandatory redemption of preferred shares at liquidation
value.
The preferred shares, which are entitled to one vote per share, generally vote
with the common shares but vote separately as a class to elect two Trustees and
on any matters affecting the rights of the preferred shares.
18
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Notes to Financial Statements October 31, 1999, continued
5. COMMON SHARES OF BENEFICIAL INTEREST
Transactions in common shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL
PAID IN
EXCESS OF
SHARES PAR VALUE PAR VALUE
--------------- ----------- ---------------
<S> <C> <C> <C>
Balance, October 31, 1997 . ............................................. 29,583,513 $ 295,835 $ 423,830,717
Treasury shares purchased and retired (weighted average discount 8.69%)* (1,150,500) (11,505) (15,874,632)
---------- --------- -------------
Balance, October 31, 1998 ............................................... 28,433,013 284,330 407,956,085
Treasury shares purchased and retired (weighted average discount 5.33%)* (368,900) (3,689) (4,989,590)
---------- --------- -------------
Balance, October 31, 1999 ............................................... 28,064,113 $ 280,641 $ 402,966,495
========== ========= =============
</TABLE>
- ---------------
* The Trustees have voted to retire the shares purchased.
6. FEDERAL INCOME TAX STATUS
During the year ended October 31, 1999, the Trust utilized approximately
$1,343,000 of its net capital loss carryover. At October 31, 1999, the Trust had
a net capital loss carryover of approximately $9,917,000, which may be used to
offset future capital gains to the extent provided by regulations, which is
available through October 31 of the following years:
AMOUNT IN THOUSANDS
------------------------------
2002 2003 2004
-------- -------- --------
$4,884 $4,412 $621
====== ====== ====
7. DIVIDENDS TO COMMON SHAREHOLDERS
On September 28, 1999, the Trust declared the following dividends from net
investment income:
AMOUNT RECORD PAYABLE
PER SHARE DATE DATE
-------------- ------------------- -------------------
$0.0725 November 5, 1999 November 19, 1999
$0.0725 December 3, 1999 December 17, 1999
19
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Financial Highlights
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31*
---------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period ....................... $15.47 $14.69 $13.86 $13.69 $11.41
------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income ..................................... 1.01 1.00 1.00 0.97 0.96
Net realized and unrealized gain (loss) ................... (1.77) 0.71 0.70 (0.01) 2.22
------ ------ ------ ------ ------
Total income (loss) from investment operations ............. (0.76) 1.71 1.70 0.96 3.18
------ ------ ------ ------ ------
Less dividends from:
Net investment income ..................................... (0.84) (0.78) (0.78) (0.75) (0.80)
Common share equivalent of dividends paid to preferred
shareholders ............................................. (0.19) (0.20) (0.19) (0.17) (0.16)
------ ------ ------ ------ ------
Total dividends ............................................ (1.03) (0.98) (0.97) (0.92) (0.96)
------ ------ ------ ------ ------
Anti-dilutive effect of acquiring treasury shares .......... 0.01 0.05 0.10 0.13 0.06
------ ------ ------ ------ ------
Net asset value, end of period ............................. $13.69 $ 15.47 $14.69 $ 13.86 $13.69
====== ====== ====== ====== ======
Market value, end of period ................................ $13.25 $14.813 $13.25 $11.625 $11.50
====== ====== ====== ====== ======
TOTAL RETURN+ ............................................. (5.17)% 18.27% 21.21% 7.81% 19.11%
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:
Total expenses ............................................. 0.70% 0.69% 0.68%(1) 0.68%(1) 0.71%(1)
Net investment income before preferred stock dividends ..... 6.71% 6.60% 7.04% 7.06% 7.51%
Preferred stock dividends .................................. 1.26% 1.30% 1.31% 1.25% 1.38%
Net investment income available to common shareholders ..... 5.45% 5.30% 5.73% 5.81% 6.13%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .................... $539,277 $594,807 $589,728 $591,016 $612,839
Asset coverage on preferred shares at end of period ........ 347% 383% 380% 381% 395%
Portfolio turnover rate .................................... 5% 7% 2% 1% 1%
</TABLE>
- -------------
* The per share amounts were computed using an average number of shares
outstanding during the period.
+ Total 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 return does not
reflect brokerage commissions.
(1) Does not reflect the effect of expense offset of 0.01%.
See Notes to Financial Statements
20
<PAGE>
Morgan Stanley Dean Witter Insured Municipal Income Trust
Report of Independent Accountants
TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL 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 Morgan Stanley Dean Witter Insured
Municipal Income Trust (the "Trust") at October 31, 1999, 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 October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 8, 1999
1999 FEDERAL TAX NOTICE (unaudited)
For the year ended October 31, 1999, all of the Trust's dividends from
net investment income received by both common and preferred
shareholder classes were exempt interest dividends, excludable from
gross income for Federal income tax purposes.
21
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
(This page has been left blank intentionally.)
<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
James F. Willison
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
MORGAN STANLEY
DEAN WITTER
INSURED
MUNICIPAL
INCOME TRUST
ANNUAL REPORT
OCTOBER 31, 1999
