<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
LETTER TO THE SHAREHOLDERS April 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 Insured Municipal Income Trust (IIM) for the period ended
April 30, 1999.
The financial markets have begun to recover from last year's global economic
difficulties. The turmoil which included the Asian crisis, the Russian debt
default and the rescue of a major U.S. hedge fund has given way to more normal
financial conditions. The major catalyst for this return to stability was the
liquidity provided by the Federal Reserve Board's 75 basis point reduction in
the federal-funds rate during the fourth quarter of 1998.
International economic problems precipitated a "flight to quality" rally in
fixed income securities and U.S. Treasury yields reached 30-year lows in
October 1998. As the world markets recovered, foreign investors repatriated
funds and Treasury yields began to rise. Interest rates also rose in response
to the surprisingly robust domestic economic growth reported over the second
half of 1998. The bond market became concerned that the central bank might
become more restrictive by taking back some of the liquidity provided during
the crisis.
MUNICIPAL MARKET CONDITIONS
During 1998, municipal yields were less volatile than Treasury yields. This
pattern of stability continued into 1999. Long-term insured index yields stood
at 5.25 percent at the end of April, only 20 basis points higher than their
October 1998 levels. In contrast, Treasury bond yields rose 50 basis points
from 5.15 to 5.65 percent. During the past six months, the yield pick up for
extending tax-exempt maturities from one to 30 years averaged 225 basis points.
The modest rally of municipals during 1998 created a favorable relative value
relationship to Treasuries. Municipals underperformed Treasuries and the ratio
of municipal yields to Treasury yields climbed to 99 percent by December. The
higher the ratio, the more attractive municipals are relative to Treasuries.
Municipals have outperformed Treasuries this year and the ratio declined to 92
percent by April. The high-to-low annual range of municipal/Treasury yields for
the past five years has averaged 93 to 84 percent.
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
In addition to lagging 1998's Treasury rally, municipals also experienced a
glut of new-issue supply. Underwriting volume of $284 billion was up 28 percent
from the prior year and approached 1993's record. Issuers actively refinanced
at lower interest rates and refundings were 29 percent of the total volume.
This year's rise in interest rates has reduced the amount of refunding
activity. Refunding volume was down 42 percent in the first four months of 1999
while total underwriting declined 22 percent.
PERFORMANCE
The Trust's net asset value (NAV) decreased from $15.47 per share to $15.24 per
share for the six-month period ended April 30, 1999. Based on this change plus
reinvestment of tax-free dividends totaling $0.42 per share, the Trust's total
NAV return was 1.29 percent. IIM's value on the New York Stock Exchange
decreased from $14.8125 to $14.6875 per share during the same period. Based on
this change plus reinvestment of tax-free dividends, IIM's total market return
was 1.95 percent. As of April 30, 1999, IIM's share price was a 3.63 percent
discount to its NAV.
Monthly dividends for the second quarter of 1999 remained $0.070 per share. The
Trust's level of undistributed net investment income was $0.129 per share on
April 30, 1999, versus $0.144 per share on October 31, 1998.
30-YEAR BOND YIELDS 1994-1999
[LINE GRAPH]
DATE AAA INS TSY % RELATIONSHIP
12/31/93 5.40% 6.34% 85.17%
01/31/94 5.40 6.24 86.54%
02/28/94 5.80 6.66 87.09%
03/31/94 6.40 7.09 90.27%
04/29/94 6.35 7.32 86.75%
05/31/94 6.25 7.43 84.12%
06/30/94 6.50 7.61 85.41%
07/29/94 6.25 7.39 84.57%
08/31/94 6.30 7.45 84.56%
09/30/94 6.55 7.81 83.87%
10/31/94 6.75 7.96 84.80%
11/30/94 7.00 8.00 87.50%
12/30/94 6.75 7.88 85.66%
01/31/95 6.40 7.70 83.12%
02/28/95 6.15 7.44 82.66%
03/31/95 6.15 7.43 82.77%
04/28/95 6.20 7.34 84.47%
05/31/95 5.80 6.66 87.09%
06/30/95 6.10 6.62 92.15%
07/31/95 6.10 6.86 88.92%
08/31/95 6.00 6.66 90.09%
09/29/95 5.95 6.48 91.82%
10/31/95 5.75 6.33 90.84%
11/30/95 5.50 6.14 89.58%
12/29/95 5.35 5.94 90.07%
01/31/96 5.40 6.03 89.55%
02/29/96 5.60 6.46 86.69%
03/29/96 5.85 6.66 87.84%
04/30/96 5.95 6.89 86.36%
05/31/96 6.05 6.99 86.55%
06/28/96 5.90 6.89 85.63%
07/31/96 5.85 6.97 83.93%
08/30/96 5.90 7.11 82.98%
09/30/96 5.70 6.93 82.25%
10/31/96 5.65 6.64 85.09%
11/29/96 5.50 6.35 86.61%
12/31/96 5.60 6.63 84.46%
01/31/97 5.70 6.79 83.95%
02/28/97 5.65 6.80 83.09%
03/31/97 5.90 7.10 83.10%
04/30/97 5.75 6.94 82.85%
05/30/97 5.65 6.91 81.77%
06/30/97 5.60 6.78 82.60%
07/30/97 5.30 6.30 84.13%
08/31/97 5.50 6.61 83.21%
09/30/97 5.40 6.40 84.38%
10/31/97 5.35 6.15 86.99%
11/30/97 5.30 6.05 87.60%
12/31/97 5.15 5.92 86.99%
01/31/98 5.15 5.80 88.79%
02/28/98 5.20 5.92 87.84%
03/31/98 5.25 5.93 88.53%
04/30/98 5.35 5.95 89.92%
05/29/98 5.20 5.80 89.66%
06/30/98 5.20 5.65 92.04%
07/31/98 5.18 5.71 90.72%
08/31/98 5.03 5.27 95.45%
09/30/98 4.95 5.00 99.00%
10/31/98 5.05 5.16 97.87%
11/30/98 5.00 5.06 98.81%
12/31/98 5.05 5.10 99.02%
01/31/99 5.00 5.09 98.23%
02/28/99 5.10 5.58 91.40%
03/31/99 5.15 5.63 91.47%
04/30/99 5.20 5.66 91.87%
Source: Municipal Market Data -- A Division of Thomson Financial Municipal Group
2
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
LARGEST SECTORS AS OF APRIL 30, 1999 CREDIT ENHANCEMENTS AS OF APRIL 30, 1999
(% OF NET ASSETS) (% OF TOTAL LONG-TERM PORTFOLIO)
ELECTRIC 18% MBIA 39%
WATER & SEWER 13% AMBAC 25%
IDR/PCR* 11% FGIC 20%
HOSPITAL 11% FSA 16%
MORTGAGE 9%
REFUNDED 9%
GENERAL OBLIGATION 8%
TRANSPORTATION 6%
EDUCATION 5%
*INDUSTRIAL DEVELOPMENT/POLLUTION PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
CONTROL REVENUE. PORTFOLIO STRUCTURE
IS SUBJECT TO CHANGE.
CALL STRUCTURE AS OF APRIL 30, 1999
(% OF TOTAL LONG-TERM PORTFOLIO) WEIGHTED AVERAGE
PERCENT CALLABLE CALL PROTECTION: 6 YEARS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010+
0% 2% 0% 15% 58% 4% 2% 1% 1% 4% 2% 11%
YEARS BONDS CALLABLE
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
</TABLE>
3
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
PORTFOLIO STRUCTURE
The Trust's investments were diversified among 12 long-term sectors and 74
credits. At the end of April, the portfolio's average maturity was 20 years.
Portfolio duration, a measure of sensitivity to interest-rate changes, was 6.0
years. Issues in the refunded bond category comprised 9 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 call structure, largest sectors and mix of credit enhancements.
THE IMPACT OF LEVERAGING
As discussed in previous 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 the ARPS expenses (ARPS
auction rate and expenses). The greater the spread and the larger the 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.
During this six-month period, ARPS leverage contributed approximately $0.04 per
share to common share earnings. Weekly ARPS yields ranged between 2.75 and 5.00
percent. Five ARPS series totaling $155 million represented 26 percent of net
assets.
ARPS leverage also increases the price volatility of common shares and has the
effect of extending portfolio duration.
LOOKING AHEAD
The combination of a flight to quality and the flood of new municipal issues
made the municipal-to-Treasury yield relationship more favorable late last year
than it had been in the previous 10 years. Although municipals have thus far
outperformed Treasuries in 1999, we believe that municipals still offer
investors considerable value versus their historical 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 addition, we would like to
remind you that the Trustees have approved a procedure whereby the Trust may,
when appropriate, 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.
4
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
LETTER TO THE SHAREHOLDERS April 30, 1999, continued
On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley
Dean Witter Funds. Mr. Merin is also the President and Chief Operating Officer
of Asset Management of Morgan Stanley Dean Witter & Co. and President, Chief
Executive Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the
Trust's Investment Manager. He also serves as Chairman, Chief Executive Officer
and Director of Morgan Stanley Dean Witter Distributors Inc. and Morgan Stanley
Dean Witter Trust FSB.
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. Fiumfreddo /s/ Mitchell M. Merin
CHARLES A. FIUMFREDDO MITCHELL M. MERIN
Chairman of the Board President
5
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX-EXEMPT MUNICIPAL BONDS (98.0%)
General Obligation (7.7%)
District of Columbia,
$ 5,000 Refg Ser 1993 B (AMBAC) ..................................................... 5.50 % 06/01/09 $ 5,359,700
6,000 Refg Ser 1993 B (FSA) ....................................................... 5.50 06/01/10 6,421,500
10,000 Cook County, Illinois, Ser B (FGIC) .......................................... 5.50 11/15/22 10,195,600
5,000 River Rouge School District, Michigan, 1993 Bldg & Site Unltd Tax (FSA) ...... 5.625 05/01/22 5,205,050
3,000 Vicksburg Community Schools, Michigan, 1993 Refg (MBIA) ...................... 5.625 05/01/20 3,124,140
6,000 Clark County Sanitation District, Nevada, Refg 1993 (FGIC) ................... 5.70 07/01/12 6,391,020
8,000 Washoe County, Nevada, Reno -- Sparks Convention Ltd Tax Ser 1993 A
(FGIC) ...................................................................... 5.75 07/01/22 8,498,400
-------- ------------
43,000 45,195,410
-------- ------------
Educational Facilities Revenue (5.2%)
4,000 Alabama State University, General Tuition & Fee Ser 1993 (MBIA) .............. 5.70 05/01/15 4,198,600
3,000 District of Columbia, American Association for the Advancement of Science
Ser 1997 (AMBAC) ............................................................. 5.125 01/01/27 2,924,010
4,000 Illinois Educational Facilities Authority, DePaul University Refg Ser 1997
(AMBAC) ...................................................................... 5.50 10/01/19 4,131,160
4,000 Indiana University, Student Fee Ser J (FGIC) ................................. 5.00 08/01/18 3,931,760
10,000 Wayne State University, Michigan, Ser 1993 (AMBAC) ........................... 5.50 11/15/18 10,224,600
Rhode Island Health & Educational Building Corporation,
2,500 Providence College Ser 1993 (MBIA) .......................................... 5.60 11/01/15 2,594,475
2,500 Providence College Ser 1993 (MBIA) .......................................... 5.60 11/01/22 2,576,800
-------- ------------
30,000 30,581,405
-------- ------------
Electric Revenue (18.4%)
16,000 Redding, California, Ser 1993 A COPs (FGIC) .................................. 5.684 06/01/19 16,711,040
Massachusetts Municipal Wholesale Electric Company,
6,000 1993 Ser A (AMBAC) .......................................................... 5.00 07/01/10 6,104,700
10,000 1993 Ser A (AMBAC) .......................................................... 5.45 07/01/18 10,290,900
20,000 North Carolina Municipal Power Agency #1, Catawba Ser 1993 (MBIA) ............ 5.60 01/01/20 20,633,000
4,000 Piedmont Municipal Power Agency, South Carolina, Refg Ser 1993 (MBIA) ........ 5.375 01/01/25 4,167,880
15,000 South Carolina Public Service Authority, 1993 Refg Ser A (MBIA) .............. 5.50 07/01/21 15,335,400
6,000 Lower Colorado River Authority, Texas, Jr Lien Refg 4th Ser (FSA) ............ 5.625 01/01/17 6,176,640
8,000 Texas Municipal Power Agency, Refg Ser 1993 (MBIA) ........................... 5.25 09/01/12 8,271,680
10,000 Washington Public Power Supply System, Nuclear Proj #1 Refg Ser 1993 A
(MBIA) ....................................................................... 5.70 07/01/17 10,402,400
10,000 Wisconsin Public Power Incorporated, Refg Ser 1993 A (AMBAC) ................. 5.25 07/01/21 9,934,500
-------- ------------
105,000 108,028,140
-------- ------------
Hospital Revenue (10.9%)
2,100 District of Columbia, Children's Hospital Refg Ser 1992 A (FGIC) ............. 6.25 07/15/10 2,272,473
5,000 Sarasota County Public Hospital Board, Florida, Sarasota Memorial Hospital
Refg Ser 1998 B (MBIA) ....................................................... 5.25 07/01/24 5,148,450
8,000 Fulton-DeKalb Hospital Authority, Georgia, Grady Memorial Hospital
Refg Ser 1993 (MBIA) ......................................................... 5.50 01/01/20 8,213,760
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 4,000 Indiana Health Facilities Financing Authority, Deaconess Hospital Inc
Refg Ser 1993 (MBIA) ....................................................... 5.75% 03/01/15 $ 4,174,600
5,000 Kentucky Economic Development Finance Authority, St Elizabeth Medical
Center Inc Ser 1993 A (FGIC) ............................................... 6.00 12/01/22 5,460,900
3,935 Maine Health & Higher Educational Facilities Authority, Ser 1993 A (FSA) ..... 5.50 07/01/23 4,031,762
5,000 Massachusetts Health & Educational Facilities Authority, Lahey Clinic
Medical Center Ser B (MBIA) ................................................ 5.625 07/01/15 5,190,600
5,000 Missouri Health & Educational Facilities Authority, SSM Health Care
Ser 1998 A (MBIA) .......................................................... 5.00 06/01/22 4,885,950
5,000 Washington County Hospital Authority, Pennsylvania, Washington Hospital
Ser 1993 (AMBAC) ........................................................... 5.625 07/01/23 5,155,750
4,000 Chattanooga-Hamilton County Hospital Authority, Tennessee, Erlanger
Medical Center Refg Ser 1993 (FSA) ......................................... 5.50 10/01/13 4,211,600
5,075 Amarillo Health Facilities Corporation, Texas, Baptist St Anthony's Hospital
Ser 1998 (FSA) ............................................................. 5.50 01/01/17 5,363,920
4,000 Washington Health Care Facilities, Swedish Health Services Ser 1998
(AMBAC) .................................................................... 5.125 11/15/22 3,906,360
5,500 Wisconsin Health & Educational Facilities Authority, Sisters of the
Sorrowful Mother Health Care Ser AA (MBIA) ................................. 6.25 06/01/20 5,931,310
-------- ------------
61,610 63,947,435
-------- ------------
Industrial Development/Pollution Control Revenue (11.4%)
7,500 Adams County, Colorado, Public Service Co of Colorado Refg 1993 Ser A
(MBIA) ..................................................................... 5.875 04/01/14 8,035,575
4,000 St Johns County Industrial Development Authority, Florida, Professional Golf
Hall of Fame Ser 1996 (MBIA) ............................................... 5.875 09/01/23 4,294,280
12,000 Indiana Development Finance Authority, PSI Energy Inc Ser 1993 B (AMT)
(MBIA) ..................................................................... 5.75 02/15/28 12,428,400
4,900 Monroe County, Michigan, Detroit Edison Co Ser CC (AMT) (MBIA) ............... 6.55 06/01/24 5,385,443
5,400 Forsyth, Montana, Puget Sound Power & Light Co Ser 1993 (MBIA) ............... 5.875 04/01/20 5,754,996
Washoe County, Nevada, Sierra Pacific Power Co
3,000 Ser 1987 (AMBAC) ............................................................ 6.30 12/01/14 3,243,540
5,000 Ser 1990 (AMT) (MBIA) ....................................................... 6.65 06/01/17 5,495,100
6,000 New York State Energy Research & Development Authority,
Brooklyn Union Gas Co Ser D-1 & 2 (AMT) (MBIA) ............................. 5.635 07/08/26 6,167,340
15,000 Brazos River Authority, Texas, Texas Utilities Electric Co Ser 1993 A
(AMT) (AMBAC) ............................................................... 6.05 04/01/25 16,033,500
-------- ------------
62,800 66,838,174
-------- ------------
Mortgage Revenue -- Multi-Family (1.5%)
8,675 West Virginia Housing Development Fund, Ser A (AMBAC) ........................ 5.65 11/01/21 8,936,204
-------- ------------
Mortgage Revenue -- Single Family (7.6%)
3,000 Alaska Housing Finance Corporation, Governmental 1995 Ser A (MBIA) ........... 5.875 12/01/24 3,144,990
15,845 Connecticut Housing Finance Authority, 1992 Ser A-2 (AMT)
(Secondary FSA) ............................................................ 6.05 11/15/25 16,408,765
1,195 Maine Housing Authority, Mortgage Purchase 1990 Ser A-6 (AMT)
(Secondary MBIA) ........................................................... 6.35 11/15/22 1,253,459
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 13,000 New Jersey Housing & Mortgage Finance Agency, Home Buyer
1990 Ser F-3 (AMT) (MBIA) ................................................... 5.95% 04/01/25 $ 13,313,820
10,000 Virginia Housing Development Authority, 1992 Ser B (AMT)
(Secondary FSA) ............................................................... 6.30 01/01/27 10,412,200
-------- ------------
43,040 44,533,234
-------- ------------
Public Facilities Revenue (4.3%)
10,000 California Public Works Board, Corrections Refg 1993 Ser A (AMBAC) ............ 5.00 12/01/19 10,102,400
5,000 Florida Department of Management Services, Pool Refg Ser 1992 (AMBAC) ......... 5.40 09/01/14 5,227,950
10,000 Marion County Convention & Recreational Facilities Authority, Indiana,
Excise Tax Refg Ser 1993 A (AMBAC) ........................................... 5.50 06/01/21 10,152,700
-------- ------------
25,000 25,483,050
-------- ------------
Student Loan Revenue (3.2%)
18,000 Pennsylvania Higher Education Assistance Agency, 1988 Ser D (AMT)
(AMBAC) ...................................................................... 6.05 01/01/19 19,163,340
-------- ------------
Transportation Facilities Revenue (5.9%)
5,000 Tucson, Arizona, Street & Highway Jr Lien Refg Ser 1993 (MBIA) ................ 5.50 07/01/12 5,302,350
5,000 Chicago, Illinois, Chicago-O'Hare Int'l Airport Second Lien Refg 1993 Ser A
(AMT) (MBIA) ................................................................ 5.60 01/01/18 5,131,250
3,000 Kentucky Turnpike Authority, Econ Dev Road Revitalization Refg Ser 1993
(AMBAC) ..................................................................... 5.50 07/01/11 3,158,190
2,000 Minneapolis - St Paul Metropolitan Airports Commission, Minnesota,
Ser 1998 A (AMBAC) .......................................................... 5.00 01/01/30 1,959,900
10,000 Pennsylvania Turnpike Commission, Refg Ser O 1992 (FGIC) ...................... 5.50 12/01/17 10,284,700
3,000 North Texas Tollway Authority, Dallas North Tollway Ser 1998 (FGIC) ........... 4.75 01/01/29 2,805,360
4,000 Salt Lake City, Utah, Airport Refg Ser 1993 B (FGIC) .......................... 5.875 12/01/18 4,178,200
2,000 Richmond Metropolitan Authority, Virginia, Expressway 1992 Ser B (FGIC) ....... 6.25 07/15/22 2,170,580
-------- ------------
34,000 34,990,530
-------- ------------
Water & Sewer Revenue (12.9%)
2,000 Honolulu City & County, Hawaii, Wastewater Sr Ser 1998 (FGIC) ................. 4.75 07/01/28 1,871,200
15,000 Central Lake County Joint Action Water Agency, Illinois, Refg Ser 1993
(FGIC) ...................................................................... 5.375 05/01/20 15,156,900
10,000 Louisville & Jefferson County Metropolitan Sewer District, Kentucky,
Ser 1993 (MBIA) ............................................................. 5.30 05/15/19 10,128,500
2,470 Detroit, Michigan, Sewage Refg Ser 1993 A (FGIC) .............................. 5.70 07/01/13 2,637,021
5,000 Grand Rapids, Michigan, Sewer Impr & Refg Ser 1998 A (FGIC) ................... 4.75 01/01/28 4,680,400
5,000 Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA) ...................... 5.00 01/01/23 4,897,700
15,000 Houston, Texas, Water & Sewer 1992 Ser C (MBIA) ............................... 5.75 12/01/15 15,777,750
Seattle, Washington,
10,000 Sewer Refg Ser Y (FGIC) ...................................................... 5.70 01/01/15 10,623,400
5,000 Sewer Refg Ser X (FGIC) ...................................................... 5.50 01/01/16 5,154,050
5,000 West Virginia Water Development Authority, Loan Program II
Refg Ser A-II (FSA) ........................................................... 5.50 11/01/23 5,170,950
-------- ------------
74,470 76,097,871
-------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Refunded (9.0%)
$ 5,000 Indianapolis, Indiana, Gas Utility Ser 1994 A (AMBAC) .............. 5.875% 06/01/04+ $ 5,526,250
13,700 Louisiana Public Facilities Authority, Our Lady of the
Lake Regional Medical Center Ser 1993 D & E (FSA) ................ 5.90 05/28/04+ 14,996,294
6,065 Maine Health & Higher Educational Facilities Authority,
Ser 1993 A (FSA) (ETM) ........................................... 5.50 07/01/23 6,381,472
5,000 Allegheny County Hospital Development Authority,
Pennsylvania, Pittsburgh Mercy Health Ser 1996
(AMBAC) (ETM) .................................................... 5.625 08/15/18 5,360,150
10,000 Rhode Island Depositors Economic Protection Corporation,
Refg 1992 Ser B (MBIA) (ETM) ..................................... 6.00 08/01/17 11,001,200
4,360 Piedmont Municipal Power Agency, South Carolina, Refg
Ser 1993 (MBIA) (ETM) ............................................ 5.375 01/01/25 4,595,920
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 5,362,100
-------- ------------
49,125
--------
554,720 TOTAL TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $544,389,969)..... 53,223,386
-------- ------------
SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (0.3%) 577,018,179
800 Missouri Health & Educational Facilities Authority, Cox Health ------------
Systems 1997 (MBIA) (Demand 05/03/99) ............................ 4.25* 06/01/15 800,000
800 Harris County Health Facilities Development Corporation, Texas,
-------- Methodist Hospital Ser 1994 (Demand 05/03/99) .................... 4.30* 12/01/25 800,000
------------
1,600 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS
(Identified Cost $1,600,000).,.................................... 1,600,000
-------- ------------
$556,320 TOTAL INVESTMENTS (Identified Cost $545,989,969) (a)................ 98.3% 578,618,179
========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ..................... 1.7 9,761,373
------ ------------
NET ASSETS ......................................................... 100.0% $588,379,552
====== ============
</TABLE>
- ---------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
ETM Escrowed to maturity.
+ Prerefunded to call date shown.
* Current coupon of variable rate demand obligation.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$32,763,864 and the aggregate gross unrealized depreciation is
$135,654, resulting in net unrealized appreciation of $32,628,210.
<PAGE>
Bond Insurance:
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS April 30, 1999 (unaudited) continued
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percent of Net Assets
April 30, 1999
<TABLE>
<S> <C>
Alabama ...................... 0.7%
Alaska ....................... 0.5
Arizona .................... 0.9
California ................... 4.6
Colorado ..................... 1.4
Connecticut .................. 2.8
District of Columbia ......... 2.9
Florida ...................... 2.5
Georgia ...................... 1.4
Hawaii ....................... 0.3
Illinois ................... 5.9
Indiana ...................... 6.2
Kentucky ................... 3.2%
Louisiana .................. 2.5
Maine ........................ 2.0
Massachusetts ................ 3.7
Michigan ..................... 5.3
Minnesota .................... 0.3
Missouri ..................... 1.0
Montana ...................... 1.0
Nevada ....................... 4.0
New Jersey ................. 2.3
New York ..................... 1.0
North Carolina ............... 3.5
Ohio ......................... 0.8%
Pennsylvania ................. 6.8
Rhode Island ................. 2.7
South Carolina ............... 4.1
Tennessee .................... 1.6
Texas ........................ 9.4
Utah ....................... 0.7
Virginia ................... 2.1
Washington ................... 5.1
West Virginia ................ 2.4
Wisconsin .................... 2.7
----
Total ...................... 98.3%
====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 (unaudited)
<TABLE>
<S> <C>
ASSETS :
Investments in securities, at value
(identified cost $545,989,969).......................................... $ 578,618,179
Cash ..................................................................... 85,518
Interest receivable ...................................................... 10,184,154
Prepaid expenses ......................................................... 133,224
-------------
TOTAL ASSETS .......................................................... 589,021,075
-------------
LIABILITIES:
Payable for:
Dividends to preferred shareholders .................................... 334,344
Investment management fee .............................................. 198,232
Accrued expenses ......................................................... 108,947
-------------
TOTAL LIABILITIES ..................................................... 641,523
-------------
NET ASSETS ............................................................ $ 588,379,552
=============
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, 28,433,013 shares outstanding) ......................... 408,240,415
Net unrealized appreciation .............................................. 32,628,210
Accumulated undistributed net investment income .......................... 3,680,466
Accumulated net realized loss ............................................ (11,169,539)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS ........................... 433,379,552
-------------
TOTAL NET ASSETS ....................................................... $ 588,379,552
=============
NET ASSET VALUE PER COMMON SHARE
($433,379,552 divided by 28,433,013 common shares outstanding) .......... $ 15.24
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999 (unaudited)
<TABLE>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ............................... $ 15,673,643
------------
EXPENSES
Investment management fee ..................... 1,029,040
Auction commission fees ....................... 251,097
Transfer agent fees and expenses .............. 58,642
Professional fees ............................. 48,036
Shareholder reports and notices ............... 28,129
Auction agent fees ............................ 20,149
Registration fees ............................. 16,404
Custodian fees ................................ 11,750
Trustees' fees and expenses ................... 9,141
Other ......................................... 24,799
------------
TOTAL EXPENSES ............................. 1,497,187
Less: expense offset .......................... (11,669)
------------
NET EXPENSES ............................... 1,485,518
------------
NET INVESTMENT INCOME ....................... 14,188,125
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain ............................. 89,759
Net change in unrealized appreciation ......... (6,115,728)
------------
NET LOSS ................................... (6,025,969)
------------
NET INCREASE .................................. $ 8,162,156
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 1999 OCTOBER 31, 1998
---------------- -----------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income .............................. $ 14,188,125 $ 29,004,299
Net realized gain .................................. 89,759 3,722,951
Net change in unrealized appreciation .............. (6,115,728) 16,764,229
------------- ------------
NET INCREASE ..................................... 8,162,156 49,491,479
------------- ------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT
INCOME :
Preferred .......................................... (2,647,543) (5,734,332)
Common ............................................. (11,941,699) (22,792,814)
------------- ------------
TOTAL ........................................... (14,589,242) (28,527,146)
------------- ------------
Decrease from transactions in common shares of
beneficial interest .............................. -- (15,886,137)
------------- ------------
NET INCREASE (DECREASE) ......................... (6,427,086) 5,078,196
NET ASSETS:
Beginning of period ................................ 594,806,638 589,728,442
------------- ------------
END OF PERIOD
(Including undistributed net investment income of
$3,680,466 and $4,081,583, respectively)......... $ 588,379,552 $594,806,638
============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited)
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
14
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) continued
income and net realized capital gains are determined in accordance with federal
income tax regulations which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their
federal tax-basis treatment; temporary differences do not require
reclassification. Dividends and distributions which exceed net investment
income and net realized capital gains for financial reporting purposes but not
for tax purposes are reported as dividends in excess of net investment income
or distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax purposes,
they are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Trust pays the Investment
Manager a management fee, 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 six months ended April 30, 1999
aggregated $1,917,280 and $1,736,442, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager,
is the Trust's transfer agent. At April 30, 1999, the Trust had transfer agent
fees and expenses payable of approximately $850.
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 six months ended April 30, 1999
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,754. At April 30, 1999, the Trust had an accrued pension liability of
$36,729 which is included in accrued expenses in the Statement of Assets and
Liabilities.
15
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) 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.
<TABLE>
<CAPTION>
AMOUNT IN RESET RANGE OF
SERIES SHARES* THOUSANDS* RATE* DATE DIVIDEND RATES**
- -------- --------- ------------ ---------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
1 400 $20,000 3.35% 05/03/99 2.75% -- 5.00%
2 900 45,000 3.52 09/07/99 3.52
3 1,000 50,000 3.58 07/12/99 3.58
4 400 20,000 3.35 05/03/99 2.75 -- 4.75
5 400 20,000 3.35 05/03/99 2.75 -- 4.875
</TABLE>
- ---------------
* As of April 30, 1999.
** For the six months ended April 30, 1999.
Subsequent to April 30, 1999 and up through June 4, 1999, the Trust paid
dividends to each of the Series 1 through 5 at rates ranging from 3.10% to
3.65% in the aggregate amount of $761,480.
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.
16
<PAGE>
MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS April 30, 1999 (unaudited) 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 and April 30, 1999 ............................ 28,433,013 $ 284,330 $ 407,956,085
========== ========= =============
</TABLE>
- ---------------
* The Trustees have voted to retire the shares purchased.
6. FEDERAL INCOME TAX STATUS
At October 31, 1998, the Trust had a net capital loss carryover of
approximately $11,259,000, 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:
<TABLE>
<CAPTION>
AMOUNT IN THOUSANDS
- -----------------------------
2002 2003 2004
- ----------- --------- -------
<S> <C> <C>
$ 6,226 $4,412 $621
======== ====== ====
</TABLE>
7. DIVIDENDS TO COMMON SHAREHOLDERS
On March 30, 1999, the Trust declared the following dividends from net
investment income:
<TABLE>
<CAPTION>
AMOUNT RECORD PAYABLE
PER SHARE DATE DATE
- ----------- --------------- ---------------
<S> <C> <C>
$ 0.07 May 7, 1999 May 21, 1999
$ 0.07 June 4, 1999 June 18, 1999
</TABLE>
17
<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 SIX
MONTHS ENDED
APRIL 30, 1999*
-------------------------
(unaudited)
<S> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period .................... $ 15.47
-----------
Income (loss) from investment operations:
Net investment income .................................. 0.50
Net realized and unrealized gain (loss) ................ ( 0.22)
------------
Total income (loss) from investment operations .......... 0.28
------------
Less dividends from:
Net investment income .................................. ( 0.42)
Common share equivalent of dividends paid to
preferred shareholders ................................ ( 0.09)
------------
Total dividends ......................................... ( 0.51)
------------
Anti-dilutive effect of acquiring treasury shares ....... --
------------
Offering costs charged against capital .................. --
------------
Net asset value, end of period .......................... $ 15.24
============
Market value, end of period ............................. $ 14.688
============
TOTAL RETURN+ ........................................... 1.95%(1)
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Total expenses .......................................... 0.69%(2)(3)
Net investment income before preferred stock
dividends .............................................. 6.54%(2)
Preferred stock dividends ............................... 1.22%(2)
Net investment income available to common
shareholders ........................................... 5.32%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................. $ 588,380
Asset coverage on preferred shares at end of period ..... 379%
Portfolio turnover rate ................................. --
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31*
-------------------------------------------------------------------
1998 1997 1996 1995
------------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period .................... $ 14.69 $ 13.86 $ 13.69 $ 11.41
------- --------- ---------- ---------
Income (loss) from investment operations:
Net investment income .................................. 1.00 1.00 0.97 0.96
Net realized and unrealized gain (loss) ................ 0.71 0.70 (0.01) 2.22
------- --------- ----------- ---------
Total income (loss) from investment operations .......... 1.71 1.70 0.96 3.18
------- --------- ----------- ---------
Less dividends from:
Net investment income .................................. (0.78) (0.78) (0.75) (0.80)
Common share equivalent of dividends paid to
preferred shareholders ................................ (0.20) (0.19) (0.17) (0.16)
-------- --------- ----------- ---------
Total dividends ......................................... (0.98) (0.97) (0.92) (0.96)
-------- --------- ----------- ---------
Anti-dilutive effect of acquiring treasury shares ....... 0.05 0.10 0.13 0.06
-------- --------- ----------- ---------
Offering costs charged against capital .................. -- -- -- --
-------- --------- ----------- ---------
Net asset value, end of period .......................... $ 15.47 $ 14.69 $ 13.86 $ 13.69
======== ========= =========== =========
Market value, end of period ............................. $ 14.813 $ 13.25 $ 11.625 $ 11.50
======== ========= =========== =========
TOTAL RETURN+ ........................................... 18.27% 21.21% 7.81% 19.11%
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Total expenses .......................................... 0.69% 0.68%(3) 0.68%(3) 0.71%(3)
Net investment income before preferred stock
dividends .............................................. 6.60% 7.04% 7.06% 7.51%
Preferred stock dividends ............................... 1.30% 1.31% 1.25% 1.38%
Net investment income available to common
shareholders ........................................... 5.30% 5.73% 5.81% 6.13%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................. $594,807 $ 589,728 $ 591,016 $612,839
Asset coverage on preferred shares at end of period ..... 383% 380% 381% 395%
Portfolio turnover rate ................................. 7% 2% 1% 1%
<CAPTION>
FOR THE YEAR
ENDED OCTOBER
31*
-------------
1994
-------------
<S> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period .................... $ 14.95
--------
Income (loss) from investment operations:
Net investment income .................................. 1.10
Net realized and unrealized gain (loss) ................ (3.53)
--------
Total income (loss) from investment operations .......... (2.43)
--------
Less dividends from:
Net investment income .................................. (0.90)
Common share equivalent of dividends paid to
preferred shareholders ................................ (0.21)
--------
Total dividends ......................................... (1.11)
--------
Anti-dilutive effect of acquiring treasury shares ....... 0.01
--------
Offering costs charged against capital .................. (0.01)
--------
Net asset value, end of period .......................... $ 11.41
========
Market value, end of period ............................. $ 10.375
========
TOTAL RETURN+ ........................................... (25.81)%
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Total expenses .......................................... 0.80%
Net investment income before preferred stock
dividends .............................................. 8.23%
Preferred stock dividends ............................... 1.55%
Net investment income available to common
shareholders ........................................... 6.68%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................. $592,759
Asset coverage on preferred shares at end of period ..... 304%
Portfolio turnover rate ................................. 7%
</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
investment return does not reflect brokerage commissions.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
[This page has been left blank intentionally]
<PAGE>
TRUSTEES
- ---------------------------------------
Michael Bozic
Charles A. Fiumefreddo MORGAN STANLEY
Edwin J. Garn DEAN WITTER
Wayne E. Hedien INSURED
Dr. Manuel H. Johnson MUNICIPAL
Michael E. Nugent INCOME TRUST
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
The financial statements included herein Semiannual Report
have been taken from the records of the April 30, 1999
Trust without examination by the independent
accountants and accordingly they do not
express an opinion thereon.
