DEAN WITTER LIMITED TERM MUNICIPAL TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
===============================================================================
This is the first annual report to shareholders of Dean Witter Limited
Term Municipal Trust. The Fund commenced operations on July 12, 1993 in a
declining interest rate environment. Cash inflows were invested as received in
order to achieve a portfolio structure and dividend rate commensurate with the
Fund's stated objective. Investments were concentrated in the 8 to 12-year
range, with an average maturity of 10 years. New purchases emphasized quality
with a preference for upper-investment-grade issues rated double or triple "A"
by Moody's Investors Service, Inc. or Standard & Poor's Corp.
THE MARKET
During the 12 months ended March 31, 1994, the fixed- income markets
rallied to record-low yields and then retreated to levels not seen in more than
a year. Intermediate-term yields, as measured by 10-year "AA" rated general
obligation bonds, fell from 4.90 percent in July to 4.45 percent at the end of
January. The final quarter of 1993 was marked by strong economic activity. The
Federal Reserve Board demonstrated its resolve to resist potential inflation in
the first quarter of 1994 by raising the federal-funds rate--the interest rate
that banks charge each other for overnight loans--by 50 basis points from 3.00
percent to 3.50 percent in two separate moves. Although this action was
presented as a pre-emptive strike against inflation, the bond market
interpreted the move as the beginning of a trend toward higher interest rates.
By March 31, 1994, intermediate-term yields stood at 5.40 percent, their
highest level in over a year.
<TABLE>
<CAPTION>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
GROWTH OF $10,000
($ IN THOUSANDS)
DATE TOTAL LEHMAN
- -------------------------------------------------------------------------------
<S> <C> <C>
July 9, 1993 $10000 $10000
- -------------------------------------------------------------------------------
July 31, 1993 $10014 $10025
- -------------------------------------------------------------------------------
August 31, 1993 $10152 $10233
- -------------------------------------------------------------------------------
September 30, 1993 $10290 $10358
- -------------------------------------------------------------------------------
October 31, 1993 $10315 $10375
- -------------------------------------------------------------------------------
November 30, 1993 $10269 $10290
- -------------------------------------------------------------------------------
December 31, 1993 $10466 $10509
- -------------------------------------------------------------------------------
January 31, 1994 $10596 $10621
- -------------------------------------------------------------------------------
February 28, 1994 $10281 $10330
- -------------------------------------------------------------------------------
March 31, 1994 $ 9889 (2) $ 9936
- -------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
LIFE OF FUND
-------------------------------------
No Load - 1.53 (1)
-------------------------------------
-------------------------------------
_____Fund _____Lehman (3)
-------------------------------------
Past performance is not predictive of future returns.
_____________
(1) Figure shown assumes reinvestment of all distributions. There
is no sales charge.
(2) Closing value assuming a complete redemption on March 31, 1994.
(3) The Lehman Brothers 10-Year Muni Bond Index measures the
performance of municipal bonds rated at least Baa + by Moody's
Investors Service, Inc. with maturities ranging between 9 and
12 years.
<PAGE>
New-issue municipal underwriting totaled $290 billion in 1993, a 23
percent increase over the previous high of $235 billion set in 1992. Refunding
issues, which are used by state and local governments to refinance higher-
coupon debt, represented 66 percent of total volume last year. This year's
underwriting is estimated to decline by 30 percent to about $200 billion. It is
anticipated that approximately $260 billion in municipal bonds will either
mature or be called in 1994, thus reducing the amount of municipal debt
outstanding. In line with these projections, new-issue volume for the first
three months of 1994 declined by 27 percent and totaled $49 billion. Refunding
activity, the catalyst of last year's record underwriting, dropped even more
sharply.
PERFORMANCE
Dean Witter Limited Term Municipal Trust's total return from inception
through March 31, 1994, was -1.11 percent. This return is based on a change in
the Fund's net asset value from $10.00 per share on July 12, 1993 to $9.61 per
share on March 31, 1994 and reinvestment of all dividends. Tax-free
distributions totaled $0.29 per share. The Lehman Brothers 10-Year Municipal
Bond Index recorded a total return of -0.64 percent (since data for the index
is available only as of month end, this return is for the period from June 30,
1993 through March 31, 1994). As of March 31, 1994, the Fund's 30-day SEC yield
was a competitive 4.51 percent and its distribution rate was 4.42 percent. The
Fund's taxable equivalent yield was 7.47 percent for shareholders subject to a
maximum effective federal tax rate of 39.6 percent. At the end of the period
the Fund's net assets exceeded $170 million. The accompanying chart illustrates
the growth of a $10,000 investment in the Fund since inception through
March 31, 1994, versus the performance of a similar hypothetical investment
in the issues that comprise the Lehman Brothers 10-Year Municipal Bond Index.
PORTFOLIO STRUCTURE
As of March 31, the portfolio was diversified among 15 municipal
sectors and 74 separate issuers. The three largest municipal sectors at the end
of the period were: general obligation, public facilities and transportation
revenue. These sectors represented 44 percent of the portfolio. Bonds subject
to the alternative minimum tax (AMT) accounted for 11.6 percent of net assets.
We appreciate your support of Dean Witter Limited Term Municipal Trust
and look forward to continuing to serve your investment needs.
Very truly yours,
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
<TABLE>
PORTFOLIO OF INVESTMENTS March 31, 1994
===================================================================================================================================
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- ------ ------ -----
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (96.2%)
GENERAL OBLIGATION (17.5%)
$ 5,000 North Slope Borough, Alaska, Ser 1993 B (MBIA Insured) ............... 4.60 % 1/ 1/00 $ 4,830,450
2,000 Wilmington, Delaware, Refg Ser 1993 B (FGIC Insured) ................. 4.60 7/ 1/04 1,825,000
1,000 District of Columbia, Ser 1993 E (FGIC Insured)....................... 4.75 6/ 1/00 973,870
2,000 District of Columbia, Refg Ser 1994 A (MBIA Insured).................. 4.95 6/ 1/05 1,842,940
1,000 Honolulu, Hawaii, Refg Ser 1993 B..................................... 5.00 10/ 1/03 972,380
1,400 Chicago, Illinois, Ser 1993 (FGIC Insured)............................ 5.10 1/ 1/05 1,333,024
2,000 Rosemont, Illinois, Ser 1993 B........................................ 5.30 12/ 1/04 1,934,960
4,000 Massachusetts, Refg Ser 1993 C........................................ 4.80 8/ 1/03 3,775,080
4,600 Atlantic City Board of Education, New Jersey, Ser 1992
(AMBAC Insured)...................................................... 6.00 12/ 1/05 4,805,942
4,800 New York City, New York, Ser 1992 A................................... 6.10 8/ 1/02 4,830,624
1,000 Massillon City School District, Ohio, Refg Ser 1994
(AMBAC Insured)...................................................... 4.70 12/ 1/05 900,520
2,000 Ysleta Independent School District, Texas, Refg Ser 1993.............. 4.50 8/15/04 1,806,580
- -------- -----------
30,800 29,831,370
- -------- -----------
EDUCATIONAL FACILITIES REVENUE (4.8%)
1,500 University of Delaware, Ser 1993...................................... 4.90 11/ 1/02 1,445,955
1,665 Indiana State University, Ser H (AMBAC Insured)....................... 4.70 10/ 1/05 1,484,481
2,000 Massachusetts Health & Educational Facilities Authority,
Boston College Ser K................................................. 4.80 6/ 1/04 1,877,080
1,750 University of Minnesota, Ser 1993 A INFLOS............................ 6.781+ 8/15/03 1,583,750
2,000 New York State Dormitory Authority, State University
Ser 1993 B........................................................... 5.25 5/15/05 1,867,060
- -------- -----------
8,915 8,258,326
- -------- -----------
ELECTRIC FACILITIES REVENUE (6.7%)
1,000 Salt River Project Agricultural Improvement & Power
District, Arizona, Refg Ser 1993 B................................... 4.75 1/ 1/03 940,420
1,000 New York State Power Authority, General Purpose Ser CC................ 4.50 1/ 1/03 923,330
2,000 North Carolina Eastern Municipal Power Agency, Refg
Ser 1993 C........................................................... 5.25 1/ 1/04 1,905,880
5,000 San Antonio,Texas, Electric & Gas Refg Ser 1994....................... 4.70 2/ 1/05 4,528,050
1,000 Lewis County, Public Utility District #1, Washington,
Cowlitz Falls Hydro Refg Ser 1993.................................... 4.875 10/ 1/03 950,680
2,320 Snohomish County Public Utility District #1, Washington,
Generation Ser 1993 B (AMT).......................................... 5.35 1/ 1/05 2,196,274
- -------- -----------
12,320 11,444,634
- -------- -----------
HOSPITAL REVENUE (10.7%)
2,000 California Statewide Communities Development
Authority, Cedars-Sinai Medical Center Ser 1993...................... 4.70 11/ 1/03 1,857,980
1,770 Contra Costa County, California, Merrithew Memorial
Hospital Ser 1992 COPs............................................... 6.40 11/ 1/05 1,828,959
4,000 Massachusetts Health & Educational Facilities Authority,
Massachusetts General Hospital Ser G
(AMBAC Insured)...................................................... 4.90 7/ 1/05 3,752,360
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
</TABLE>
<TABLE>
PORTFOLIO OF INVESTMENTS March 31, 1994 (continued)
===================================================================================================================================
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- ------ ------ -----
<C> <S> <C> <C> <C>
$ 1,420 Michigan Hospital Finance Authority, McLaren
Obligated Group Ser 1993 A........................................... 5.00 % 10/15/04 $ 1,312,307
2,000 Missouri Health & Educational Facilities Authority,
Barnes Jewish Inc/Christian Health Services Ser 1993 A............... 4.75 5/15/05 1,806,600
4,000 Tulsa County Industrial Authority, Oklahoma,
St Francis Hospital Ser 1993 B (a)................................... 5.15 12/15/18 3,948,560
1,000 Richland County, South Carolina, Richland Memorial
Hospital Ser 1993 B (MBIA Insured)................................... 4.80 6/ 1/03 944,540
1,000 Murray, Utah, IHC Hospitals Inc Refg Ser 1993
(AMBAC Insured)...................................................... 5.00 5/15/04 957,760
1,000 Fairfax County Industrial Development Authority, Virginia,
Inova Health System Foundation Refg Ser 1993 A....................... 4.70 8/15/04 937,340
1,000 Wisconsin Health & Educational Facilities Authority,
Hospital Sisters Services Ser 1993 (MBIA Insured).................... 5.00 6/ 1/03 956,660
- -------- -----------
19,190 18,303,066
- -------- -----------
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL
REVENUE (1.7%)
1,000 Massachusetts Industrial Finance Agency, Eastern
Edison Co Refg Ser 1993.............................................. 5.875 8/ 1/08 924,620
2,000 Greenwood, Wisconsin, Land O'Lakes Inc (AMT).......................... 5.50 9/ 1/03 1,914,880
- -------- -----------
3,000 2,839,500
- -------- -----------
MORTGAGE REVENUE--MULTI-FAMILY (1.2%)
2,130 Wisconsin Housing & Economic Development Authority,
Ser 1993 B (AMT)..................................................... 5.10 11/ 1/03 2,050,189
- -------- -----------
MORTGAGE REVENUE--SINGLE FAMILY (1.1%)
2,000 Connecticut Housing Finance Authority, 1993 Subseries F-1............. 4.90 5/15/04 1,898,740
- -------- -----------
NURSING & HEALTH RELATED FACILITIES REVENUE (1.6%)
3,000 Ohio Public Facilities Commission, Mental Health
Ser II--93B.......................................................... 4.30 6/ 1/03 2,649,990
- -------- -----------
PUBLIC FACILITIES REVENUE (15.5%)
5,000 Los Angeles County Public Works Financing Authority,
California, Multiple Capital Proj IV (MBIA Insured).................. 4.90 12/ 1/05 4,682,350
1,875 San Diego Unified School District, California, Refg
Ser 1993 B COPs............. 4.80 7/ 1/03 1,748,419
3,000 Michigan Building Authority, Refg Ser 1993 I.......................... 6.50 10/ 1/04 3,217,050
St Paul Housing & Redevelopment Authority, Minnesota,
1,400 Civic Center Ser 1993................................................ 4.80 11/ 1/03 1,302,980
1,500 Civic Center Ser 1993................................................ 4.90 11/ 1/04 1,392,015
3,660 Kansas City School District Building Corporation, Missouri,
Elementary Ser 1993 D (FGIC Insured)................................. 4.80 2/ 1/04 3,401,311
1,500 St Louis Municipal Finance Corporation, Missouri,
Refg Ser 1993 A...................................................... 5.60 7/15/05 1,463,130
2,000 Regional Convention & Sports Complex Authority, Missouri,
Refg Ser A 1993...................................................... 4.75 8/15/04 1,801,700
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
</TABLE>
<TABLE>
PORTFOLIO OF INVESTMENTS March 31, 1994 (continued)
===================================================================================================================================
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- ------ ------ -----
<C> <S> <C> <C> <C>
$ 2,000 Ohio Building Authority, Correctional Refg 1994 Ser A................. 4.65 % 10/ 1/04 $ 1,816,600
1,945 Pittsburgh Stadium Authority, Pennsylvania, Refg
Ser 1993 (MBIA Insured).............................................. 4.85 10/ 1/04 1,812,798
3,000 Rhode Island Convention Center Authority, Refg Ser 1993 B
(MBIA Insured)....................................................... 5.00 5/15/05 2,826,150
1,000 Virginia Public Building Authority, Ser 1993 A........................ 4.90 8/ 1/02 970,640
- -------- -----------
27,880 26,435,143
- -------- -----------
RESOURCE RECOVERY REVENUE (1.2%)
2,000 Northeast Maryland Waste Disposal Authority,
Montgomery County Ser 1993 A (AMT) .................................. 5.50 7/ 1/01 1,972,820
- -------- -----------
STUDENT LOAN REVENUE (6.7%)
3,000 New England Education Loan Marketing Corporation,
Massachusetts, Ser 1992 G............................................ 5.20 8/ 1/02 2,872,530
3,500 Montana Higher Education Student Assistance Corporation,
Senior Ser 1993 B (AMT).............................................. 5.10 12/ 1/01 3,383,345
4,000 South Carolina Education Assistance Authority,
Ser 1993 A-1 (AMT)................................................... 5.00 9/ 1/03 3,803,480
1,500 Utah Board of Regents, Ser 1993 B (AMT)............................... 5.35 11/ 1/03 1,457,235
- -------- -----------
12,000 11,516,590
- -------- -----------
TAX ALLOCATION REVENUE (3.9%)
1,970 Pleasanton Joint Powers Financing Authority, California,
Reassessment Ser 1993 A.............................................. 5.60 9/ 2/00 1,945,887
3,000 Sacramento Financing Authority, California, Refg
Ser 1993 A (AMBAC Insured)........................................... 4.85 11/ 1/04 2,819,730
2,000 Santa Maria Redevelopment Agency, California,
Town Center & Westside Parking Refg Ser 1993......................... 4.75 6/ 1/03 1,872,420
- -------- -----------
6,970 6,638,037
- -------- -----------
TRANSPORTATION REVENUE (11.0%)
1,000 Alaska, International Airports Refg Ser I (MBIA Insured)
(AMT)................................................................ 5.10 10/ 1/03 958,560
1,000 Delaware River & Bay Authority, Delaware & New Jersey,
Ser 1993............................................................. 4.50 1/ 1/04 907,610
2,000 Washington Metropolitan Area Transit Authority, District
of Columbia, Refg Ser 1993 (FGIC Insured)............................ 4.90 1/ 1/05 1,897,180
3,560 Metropolitan Atlanta Rapid Transit Authority, Georgia,
Sales Tax Refg Ser 1991 M............................................ 6.35 7/ 1/04 3,795,316
4,000 Chicago, Illinois, Chicago--O'Hare Int'l Airport Refg
Ser 1993 A........................................................... 4.80 1/ 1/05 3,664,920
3,000 Harris County, Texas, Toll Road Refg Ser 1994
(AMBAC Insured)...................................................... 4.85 8/15/05 2,795,670
1,250 Texas Turnpike Authority, Dallas North Tollway Refg
Ser 1993 (AMBAC Insured)............................................. 4.60 1/ 1/04 1,148,125
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
</TABLE>
<TABLE>
PORTFOLIO OF INVESTMENTS March 31, 1994 (continued)
===================================================================================================================================
<CAPTION>
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- --------- ------ ------ -----
<C> <S> <C> <C> <C>
Port of Seattle, Washington,
$ 2,000 Refg Ser 1994 C (b).................................................. 4.60 % 7/ 1/04 $ 1,792,000
2,000 Refg Ser 1994 C (b).................................................. 4.70 7/ 1/05 1,786,300
- -------- -----------
19,810 18,745,681
- -------- -----------
WATER AND SEWER REVENUE (10.9%)
1,225 Phoenix Civic Improvement Corporation, Arizona,
Wastewater Refg Ser 1993............................................. 4.625 7/ 1/05 1,083,917
1,000 Atlanta, Georgia, Water & Sewer Ser 1993.............................. 4.50 1/ 1/04 907,610
Massachusetts Water Resources Authority,
1,000 Refg Ser 1992 B...................................................... 5.875 11/ 1/04 1,013,690
1,200 Ser 1993 C........................................................... 5.10 12/ 1/04 1,142,004
2,000 Ser 1993 C........................................................... 5.25 12/ 1/06 1,879,880
4,000 New York City Municipal Water Finance Authority,
New York, Ser 1994 B................................................. 5.125 6/15/04 3,793,840
5,000 Suffolk County Industrial Development Agency,
New York, Suffolk County Southwest Sewer
Ser 1994 (FGIC Insured).............................................. 4.80 2/ 1/05 4,582,700
1,500 Pittsburgh Water & Sewer Authority, Pennsylvania, Refg
Ser 1993 A (FGIC Insured)............................................ 4.60 9/ 1/03 1,394,415
3,000 Southeastern Public Service Authority, Virginia, Regional
Solid Waste Refg Ser 1993 A (MBIA Insured)........................... 4.70 7/ 1/04 2,780,280
- -------- -----------
19,925 18,578,336
- -------- -----------
OTHER REVENUE (1.7%)
1,000 Palm Beach County, Florida, Beach Acquisition Refg
Ser 1993 (FGIC Insured).............................................. 5.125 11/ 1/06 956,580
2,000 Pennsylvania Intergovernmental Cooperation Authority,
Special Tax Ser 1993 (FGIC Insured).................................. 5.05 6/15/04 1,916,660
- -------- -----------
3,000 2,873,240
- -------- -----------
172,940 TOTAL MUNICIPAL BONDS (Identified Cost $173,461,361).................. 164,035,662
- -------- -----------
SHORT-TERM MUNICIPAL OBLIGATIONS (4.1%)
3,000 District of Columbia, General Fund Recovery Ser B-3
(Tender 4/4/94)...................................................... 2.95 * 6/ 1/03 3,000,000
2,000 Louisiana Offshore Terminal Authority, LOOP Inc
Ser 1992 A (Tender 4/4/94)........................................... 2.85 * 9/ 1/08 2,000,000
2,000 Sublette County, Wyoming, Exxon Corp Ser 1987 B
(AMT) (Tender 4/4/94)................................................ 3.00 * 7/ 1/17 2,000,000
- -------- -----------
7,000 TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS
(Identified Cost $7,000,000)......................................... 7,000,000
- -------- -----------
$179,940 TOTAL INVESTMENTS (Identified Cost $180,461,361) (c).................. 100.3% 171,035,662
========
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS........................ (0.3) (446,254)
------ ------------
NET ASSETS............................................................ 100.0% $170,589,408
====== ============
<FN>
- ----------
+ Current coupon rate for residual interest bonds. This rate resets periodically as the auction rate on the related short-term
security fluctuates.
* Variable or floating rate securities. Coupon rate shown reflects current rate.
(a) Mandatory tender 12/15/2003.
(b) Securities purchased on a "when issued" basis.
(c) The aggregate cost for federal income tax purposes is $180,461,361; the aggregate gross and net unrealized depreciation is
$9,425,699.
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
<TABLE>
SUMMARY OF INVESTMENTS BY STATE March 31, 1994
===================================================================================================================================
<CAPTION>
Percent of Percent of Percent of
Net Assets Net Assets Net Assets
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
AK 3.4% LA 1.2% OK 2.3%
AZ 1.2 MA 10.1 PA 3.0
CA 9.8 MD 1.2 RI 1.7
CT 1.1 MI 2.7 SC 2.8
DC 4.5 MN 2.5 TX 6.0
DE 2.4 MO 5.0 UT 1.4
FL 0.6 MT 2.0 VA 2.6
GA 2.8 NC 1.1 WA 3.9
HI 0.6 NJ 2.8 WI 2.9
IL 4.1 NY 9.4 WY 1.2
IN 0.9 OH 3.1
======
Total 100.3%
======
</TABLE>
===============================================================================
1994 FEDERAL TAX NOTICE (unaudited)
During the fiscal period ended March 31, 1994, the Fund paid to shareholders
$.294235 per share from net investment income. All of the Fund's dividends from
net investment income were exempt interest dividends, excludable from gross
income for Federal income tax purposes.
===============================================================================
<PAGE>
<TABLE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
FINANCIAL STATEMENTS
<CAPTION>
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1994
===============================================================================
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $180,461,361)(Note 1)..................... $171,035,662
Cash........................................................ 287,936
Receivable for:
Interest................................................... 2,790,622
Shares of beneficial interest sold......................... 2,281,408
Deferred organizational expenses (Note 1)................... 131,686
Receivable from investment manager.......................... 20,377
Prepaid expenses and other assets........................... 16,852
-----------
Total Assets............................................... 176,564,543
-----------
LIABILITIES:
Payable for:
Investments purchased...................................... 4,016,067
Shares of beneficial interest repurchased.................. 1,790,979
Dividends to shareholders................................... 42,906
Investment management fee payable (Note 2).................. 77,026
Accrued expenses (Note 3)................................... 48,157
-----------
Total Liabilities........................................ 5,975,135
-----------
NET ASSETS:
Paid-in-capital............................................. 180,098,554
Accumulated net realized loss on
investments................................................ (83,447)
Net unrealized depreciation on investments.................. (9,425,699)
------------
Net Assets................................................. $170,589,408
============
Net Asset Value Per Share, 17,746,706
shares outstanding (unlimited shares
authorized of $.01 par value).............................. $9.61
=====
<CAPTION>
===============================================================================
STATEMENT OF OPERATIONS For the period
July 12, 1993 through March 31, 1994 (Note 1)
===============================================================================
<S> <C>
INVESTMENT INCOME:
Interest Income............................................ $4,153,560
----------
Expenses
Investment management fee (Note 2)........................ 226,830
Professional fees......................................... 23,496
Transfer agent fees and expenses
(Note 3)................................................. 18,055
Shareholder reports and notices........................... 9,900
Organizational expenses (Note 1).......................... 7,886
Trustees' fees and expenses (Note 3)...................... 7,557
Registration fees......................................... 7,079
Other..................................................... 3,814
----------
Total Expenses............................................. 304,617
----------
Net Investment Income..................................... 3,848,943
----------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (Note 1):
Net realized loss on investments.......................... (83,447)
Unrealized depreciation on investments.................... (9,425,699)
----------
Net Loss on Investments.................................. (9,509,146)
----------
Net Decrease in Net Assets
Resulting from Operations............................... ($5,660,203)
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the period July 12, 1993 through March 31, 1994 (Note 1)
===================================================================================================================================
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income..................................... $ 3,848,943
Net realized loss on investments.......................... (83,447)
Net unrealized depreciation on investments................ (9,425,699)
-------------
Net decrease in net assets resulting from operations..... (5,660,203)
Dividends to shareholders from net investment income....... (3,848,943)
Net increase from transactions in shares of
beneficial interest (Note 4).............................. 179,998,554
-------------
Total increase........................................... 170,489,408
NET ASSETS:
Beginning of period........................................ 100,000
-------------
END OF PERIOD.............................................. $170,589,408
=============
See Notes to Financial Statements
</TABLE>
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS
===============================================================================
1. ORGANIZATION AND ACCOUNTING POLICIES--Dean Witter Limited Term Municipal
Trust (the "Fund") is registered under the Investment Company Act of 1940, as
amended (the "Act"), as a no-load, diversified, open-end management investment
company. It was organized on February 25, 1993 as a Massachusetts business
trust and had no operations until July 12, 1993 other than matters relating to
the sale and issuance of 10,000 shares of beneficial interest for $100,000 to
Dean Witter InterCapital Inc. (the "Investment Manager").
The following is a summary of significant accounting policies:
A. Valuation of Investments--Portfolio securities are valued for the
Fund by an outside independent pricing service approved by the Fund's Trustees.
The pricing service has informed the Fund that in valuing the Fund's portfolio
securities, it uses both a computerized grid 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 Fund's 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.
B. Accounting for Investments--Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). In computing net
investment income, the Fund amortizes premiums and original issue discounts on
fixed income securities. Additionally, with respect to market discount on bonds
purchased after April 30, 1993, a portion of any capital gain realized upon
disposition is recharacterized as taxable investment income. Realized gains and
losses on security transactions are determined on the identified cost method.
Interest income is accrued daily.
C. Federal Income Tax Status--It is the Fund's policy to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable and non-taxable
income to its shareholders. Accordingly, no federal income tax provision is
required.
D. Dividends and Distributions to Shareholders--The Fund records
dividends and distributions to its shareholders on the record date. The amount
of dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. These
"book/tax" differences are either considered temporary or permanent in nature.
To the extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassifications. 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.
E. Organizational Expenses--The Fund's Investment Manager paid the
organizational expenses of the Fund in the amount of $154,180 of which the Fund
reimbursed $139,572 and the remaining amount of $14,608 was assumed by the
Investment Manager through December 31, 1993. The Fund deferred and is
amortizing these organizational expenses by the straight-line method over a
period not to exceed five years from the commencement of operations.
2. INVESTMENT MANAGEMENT AGREEMENT--Pursuant to an Investment Management
Agreement (the "Agreement") with Dean Witter InterCapital Inc., the Fund pays
its Investment Manager a management fee, calculated daily and payable monthly,
at an annual rate of 0.50% of the Fund's net assets determined as of the close
of each business day.
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes office space and facilities, equipment, clerical,
bookkeeping and certain legal services, and pays the salaries of all personnel,
including officers of the Fund who are employees of the Investment Manager. The
Investment Manager also bears the cost of telephone services, heat, light,
power and other utilities provided to the Fund.
The Investment Manager waived the compensation provided for in the
Investment Management Agreement and assumed all other expenses until December
31, 1993. The management fee waived and the other expenses assumed by the
Investment Manager, through December 31, 1993 approximated $264,000 and
$168,000, respectively.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES--The cost of
purchases and the proceeds from sales of portfolio securities for the period
July 12, 1993 (commencement of operations) through March 31, 1994, excluding
short-term investments, aggregated $180,105,966 and $6,533,125, respectively.
Effective January 1, 1994, the Fund adopted an unfunded noncontributory
defined pension plan covering all independent Trustees of the Fund who will
have served as an independent Trustee 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 cost for
the fiscal period ended March 31, 1994, included in Trustees' fees and expenses
in the Statement of Operations, amounted to $2,790. At March 31, 1994, the Fund
had an accrued pension liability of $2,787 which is included in accrued
expenses in the Statement of Assets and Liabilities.
Dean Witter Trust Company, an affiliate of the Investment Manager, is
the Fund's transfer agent. At March 31, 1994, the Fund had transfer agent fees
and expenses payable of $7,623.
4. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
For the period July 12, 1993
through March 31, 1994 (Note 1)
-------------------------------
Shares Amount
------ ------
<S> <C> <C>
Sold.................................. 30,407,994 $308,424,328
Reinvestment of dividends............. 301,685 3,050,020
---------- ------------
30,709,679 311,474,348
Repurchased........................... (12,972,973) (131,475,794)
---------- ------------
Net increase.......................... 17,736,706 $179,998,554
========== =============
</TABLE>
5. FEDERAL INCOME TAX STATUS--Any net capital losses incurred after October 31
("Post-October losses") within the taxable year are deemed to arise on the
first business day of the Fund's next taxable year. The Fund incurred and will
elect to defer net capital losses of approximately $83,400 during fiscal period
1994. To the extent that these losses are used to offset future capital gains,
it is probable that the gains so offset will not be distributed to
shareholders. The Fund has temporary book/tax differences primarily
attributable to Post-October losses.
<PAGE>
DEAN WITTER LIMITED TERM MUNICIPAL TRUST
<TABLE>
FINANCIAL HIGHLIGHTS
===================================================================================================================================
Selected ratios and per share data for a share of beneficial interest outstanding throughout the period:
<CAPTION>
For the period
July 12, 1993*
through
March 31, 1994
-------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period......................... $10.00
-----
Net investment income....................................... 0.29
Net realized and unrealized loss on investments............. (0.39)
-----
Total from investment operations............................. (0.10)
-----
Dividends from net investment income......................... (0.29)
-----
Net asset value, end of period............................... $ 9.61
-----
-----
Total Investment Return....................................... (1.11)%(1)
Ratios/Supplemental Data:
Net assets, end of period (in thousands)..................... $170,589
Ratio of expenses to average net assets...................... 0.31%(2)(3)
Ratio of net investment income to average net assets......... 3.92%(2)(3)
Portfolio turnover rate...................................... 6%
<FN>
- ------------
* Commencement of operations.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all of its expenses that were assumed or waived by the Investment Manager, the above annualized
ratios of expenses and net investment income to average net assets would have been 0.75% and 3.48%, respectively.
See Notes to Financial Statements
</TABLE>
Report of Independent Accountants
===============================================================================
To the Shareholders and Trustees of Dean Witter Limited Term Municipal Trust
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter Limited Term Municipal
Trust (the "Fund") at March 31, 1994, the results of its operations, the
changes in its net assets and the financial highlights for the period July 12,
1993 (commencement of operations) through March 31, 1994, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our
audit 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 audit, which included confirmation of securities owned at March 31, 1994 by
correspondence with the custodian and broker, provides a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE
1177 Avenue of the Americas
New York, New York
May 10, 1994
<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Katherine H. Stromberg
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center--Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
This report is submitted for the general information of shareholders of
the Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an effective prospectus.
DEAN WITTER
LIMITED TERM
MUNICIPAL TRUST
[LOGO]
ANNUAL REPORT
MARCH 31, 1994
<PAGE>
APPENDIX FOR GRAPHIC AND IMAGE MATERIAL
A graphic image which appears on the first page (shareholder's letter)
of the typeset version of the preceding Annual Report has been omitted in this
EDGAR submission due to its incompatibility with the ASCII format. Pursuant to
Rule 304 of Regulation S-T, the information contained in the typeset graphic
has been fairly and accurately described in narrative and/or tabular form on
the first page (shareholder's letter) of this EDGAR submission file.
<PAGE>
