-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U3na+ZYdMoOUgGlYcZd11NtATpODU5pTnu34IawQoZ+DCIkRUCN5uJYJ4h/6U7vZ l6w7mnJx8I9YSEVmpgB1zg== 0000950123-01-504698.txt : 20010727 0000950123-01-504698.hdr.sgml : 20010727 ACCESSION NUMBER: 0000950123-01-504698 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST CENTRAL INDEX KEY: 0000842891 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133498050 STATE OF INCORPORATION: NY FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05688 FILM NUMBER: 1689425 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123922550 FORMER COMPANY: FORMER CONFORMED NAME: MUNICIPAL PREMIUM INCOME TRUST/MA DATE OF NAME CHANGE: 19930721 FORMER COMPANY: FORMER CONFORMED NAME: ALLSTATE MUNICIPAL PREIMIUM INCOME TRUST/MA DATE OF NAME CHANGE: 19930721 FORMER COMPANY: FORMER CONFORMED NAME: MUNICIPAL PREMIUM INCOME TRUST/ DATE OF NAME CHANGE: 19930721 N-30D 1 y50613n-30d.txt MSDW MUNICIPAL PREMIUM INCOME TRUST 1 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 Two World Trade Center, New York, New York 10048 Dear Shareholder: The U.S. economy shifted from an extended growth cycle to a pronounced slowdown during the Fund's fiscal year ended May 31, 2001. This change in economic conditions and the Federal Reserve Board's aggressive easing, created a favorable environment for the fixed-income markets. By the third quarter of 2000, the U.S. economy began to show signs of a slowdown as retail sales flattened, capital spending stalled and unemployment edged upward. The stock market became more volatile and the value of many equities declined. Earlier fears about inflation were replaced with concerns over weakening asset prices. The change in market psychology was reinforced last December when comments by Federal Reserve Board Chairman Alan Greenspan indicated that the central bank was ready to switch to a bias toward easing rates if the economy continued to show weakness. These comments sparked a strong year-end rally in the fixed-income markets that lowered interest rates across the yield curve. Between January and May 2001, the Fed followed through by lowering the federal funds rate, in five 50-basis-point moves, from 6.50 to 4.00 percent. Subsequent to the end of the reporting period, on June 27, 2001, the Federal Reserve lowered rates an additional 25 basis points. Municipal Market Conditions Municipal yields reacted positively to slower economic growth and the shift in Fed policy. The yield of the long-term insured municipal bond index declined 50 basis points from 5.90 percent to 5.40 percent during the fiscal year. Short-term rates declined more rapidly and the yield curve steepened. The yield pickup for extending tax-exempt maturities from one to 30 years increased from 135 to 250 basis points. The most significant change in relative value occurred in California issues. That state's electric crisis adversely affected the relative value of California municipal bonds. Yields on California general obligation bonds had been substantially lower than general market levels but are presently at or above comparable national yields. Historically, the ratios of municipal yields as a percentage of Treasury yields have been used to track the relationship between the two markets. The ratio of 30-year insured municipals to Treasuries declined from 98 percent to 94 percent during the fiscal year. A declining ratio means municipals have outperformed Treasuries. Between 1998 and 2000, the ratio has ranged between 86 and 100 percent. Lower interest rates have led to a resurgence in new-issue supply. During the first five months of 2001, new-issue volume increased 40 percent, to $103 billion. Refunding issues, the most interest-rate sensitive category of underwriting surged by 300 percent. For all of calendar year 2000 total new-issue volume was $200 billion. 2 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 continued 30-YEAR BOND YIELDS 1995 - 2001
Insured U.S. Insured Municipal Yields/ Municipal Yields Treasury Yields U.S. Treasury Yields (Ratio) 1995 6.40 7.70 83.12% 6.15 7.44 82.66 6.15 7.43 82.77 6.20 7.34 84.47 5.80 6.66 87.09 6.10 6.62 92.15 6.10 6.86 88.92 6.00 6.66 90.09 5.95 6.48 91.82 5.75 6.33 90.84 5.50 6.14 89.58 5.35 5.94 90.07 1996 5.40 6.03 89.55 5.60 6.46 86.69 5.85 6.66 87.84 5.95 6.89 86.36 6.05 6.99 86.55 5.90 6.89 85.63 5.85 6.97 83.93 5.90 7.11 82.98 5.70 6.93 82.25 5.65 6.64 85.09 5.50 6.35 86.61 5.60 6.63 84.46 1997 5.70 6.79 83.95 5.65 6.80 83.09 5.90 7.10 83.10 5.75 6.94 82.85 5.65 6.91 81.77 5.60 6.78 82.60 5.30 6.30 84.13 5.50 6.61 83.21 5.40 6.40 84.38 5.35 6.15 86.99 5.30 6.05 87.60 5.15 5.92 86.99 1998 5.15 5.80 88.79 5.20 5.92 87.84 5.25 5.93 88.53 5.35 5.95 89.92 5.20 5.80 89.66 5.20 5.65 92.04 5.18 5.71 90.72 5.03 5.27 95.45 4.95 5.00 99.00 5.05 5.16 97.87 5.00 5.06 98.81 5.05 5.10 99.02 1999 5.00 5.09 98.23 5.10 5.58 91.40 5.15 5.63 91.47 5.20 5.66 91.87 5.30 5.83 90.91 5.47 5.96 91.78 5.55 6.10 90.98 5.75 6.06 94.88 5.85 6.05 96.69 6.03 6.16 97.89 6.00 6.29 95.39 5.97 6.48 92.13 2000 6.18 6.49 95.22 6.04 6.14 98.37 5.82 5.83 99.83 5.91 5.96 99.16 5.91 6.01 98.34 5.84 5.90 98.98 5.73 5.78 99.13 5.62 5.67 99.12 5.74 5.89 97.45 5.65 5.79 97.58 5.55 5.61 98.93 5.27 5.46 96.52 2001 5.30 5.50 96.36 5.27 5.31 99.25 5.26 5.44 96.69 5.45 5.79 94.13 5.40 5.75 93.91
Source: Municipal Market Data - A Division of Thomson Financial Municipal Group and Bloomberg L.P. Performance During the 12-month period ended May 31, 2001, the net asset value (NAV) of Morgan Stanley Dean Witter Municipal Premium Income Trust (PIA) increased from $9.08 to $9.88 per share. Based on this change, plus a reinvestment of tax-free dividends totaling $0.54 per share, the Fund's total NAV return was 14.76 percent. PIA's value on the New York Stock Exchange (NYSE) increased from $7.75 to $8.88 per share during this period. PIA's total market return, which includes the reinvestment of tax-free dividends, was 21.92 percent. As of May 31, 2001, PIA's share price was at a 10.12 percent discount to its NAV. Monthly dividends for the third quarter of 2001, declared in June, were unchanged at $0.045 per share. The Fund's level of undistributed net investment income was $0.077 per share on May 31, 2001, versus $0.106 per share a year ago. Portfolio Structure The Fund's net assets of $310 million were diversified among 13 long-term sectors and 75 credits. Electric revenue sector exposure was reduced, while exposure to water & sewer issues were increased. The Fund also trimmed holdings of California bonds. The portfolio's average maturity and call protection were 18 and 6 years, respectively. Average duration, a measure of 2 3 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 continued sensitivity to interest-rate changes, was 6.8 years. Generally, bonds with longer durations have greater volatility. The accompanying charts provide current information on the portfolio's credit enhancements, maturity distribution and sector concentrations. Optional call (redemption) provisions by year with their respective cost (book) yields are also shown. 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 Fund'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 $0.05 per share to common share earnings. The Fund's five ARPS series totaling $100 million represented 32 percent of net assets. Yields on the Fund's three weekly ARPS series ranged between 3.00 and 5.10 percent. The yield on the series with an annual auction maturing in September 2001 and January 2002 were 4.25 and 3.90 percent, respectively. In comparison, the yield on 1-year municipal notes has fallen from 4.20 percent in September 2000 to 2.75 percent at the end of May. Looking Ahead The slower pace of economic growth and the Federal Reserve Board's shift in monetary policy have created a favorable backdrop for fixed-income investments. We believe that the relative attractiveness of tax-free bonds versus Treasuries continues to offer good long-term value to municipal investors. The Fund's investment strategy is focused on maintaining high-grade credit quality, emphasizing essential service sectors and improving call protection. The Fund's procedure for reinvesting all dividends and distributions in common shares is through purchases in the open market. This method helps support the market value of the Fund's shares. In addition, we would like to remind you that the Trustees have approved a procedure whereby 3 4 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 continued the Fund 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 Fund 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 12-month period ended May 31, 2001, the Fund purchased and retired 763,999 shares of common stock at a weighted average market discount of 10.77 percent. We appreciate your ongoing support of Morgan Stanley Dean Witter Municipal Premium 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 5 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 continued LARGEST SECTOR as of May 31, 2001 (% of Net Assets) [LARGEST SECTORS BAR CHART] Transportation 15% Electric 13% Hospital 13% IDR/PCR* 12% Water & Sewer 11% General Obligation 10% Mortgage 6% Refunded 6%
* Industrial Development/Pollution Control Revenue Portfolio structure is subject to change. CREDIT RATINGS as of May 31, 2001 (% of Total Long-Term Portfolio) [CREDIT RATINGS PIE CHART] Aaa or AAA 67% Aa or AA 21% A or A 1% Baa or BBB 8% Ba or BB 1% NR 2%
As measured by Moody's Investors Service, Inc. or Standard & Poor's Corp. Portfolio structure is subject to change. DISTRIBUTION BY MATURITY (% of Net Assets) Weighted Average Maturity: 18 Years [DISTRIBUTION BY MATURITY BAR CHART] Under 1 Year 2.0% 1-5 Years 8.4% 5-10 Years 7.8% 10-20 Years 30.0% 20-30 Years 46.2% 30+ Years 5.3%
Portfolio structure is subject to change. 5 6 Morgan Stanley Dean Witter Municipal Premium Income Trust LETTER TO THE SHAREHOLDERS - MAY 31, 2001 continued CALL AND COST (BOOK) YIELD STRUCTURE (BASED ON LONG-TERM PORTFOLIO) MAY 31, 2001 Weighted Average Call Protection: 6 Years PERCENT CALLABLE 2001 14.0% 2002 8.0% 2003 0.0% 2004 8.0% 2005 9.0% 2006 11.0% 2007 3.0% 2008 22.0% 2009 5.0% 2010 7.0% 2011+ 13.0%
Years Bonds Callable Weighted Average Book Yield: 5.92% COST (BOOK) YIELD* 2001 7.3% 2002 6.3% 2003 2004 6.4% 2005 6.1% 2006 5.3% 2007 6.2% 2008 5.5% 2009 5.6% 2010 5.7% 2011+ 5.3%
* Cost or "book" yield is the annual income earned on a portfolio investment based on its original purchase price before fund operating expenses. For example, the fund is earning a book yield of 7.3% on 14% of the long-term portfolio that is callable in 2001. Portfolio structure is subject to change. 6 7 Morgan Stanley Dean Witter Municipal Premium Income Trust RESULTS OF ANNUAL MEETING * * * On December 14, 2000, an annual meeting of the Fund's shareholders was held for the purpose of voting on two separate matters, the results of which were as follows: (1) Election of Trustees by All Shareholders: Wayne E. Hedien For......................................................... 16,850,741 Withheld.................................................... 447,237 James F. Higgins For......................................................... 16,860,849 Withheld.................................................... 437,129 John L. Schroeder For......................................................... 16,836,488 Withheld.................................................... 461,490
Election of Trustee by Preferred Shareholders: Dr. Manuel H. Johnson For......................................................... 807 Withheld.................................................... 0
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. (2) Ratification of the selection of Deloitte & Touche LLP as Independent Auditors: For......................................................... 16,929,196 Against..................................................... 86,409 Abstain..................................................... 281,566
7 8 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ---------------------------------------------------------------------------------------------------------- Tax-Exempt Municipal Bonds (97.7%) General Obligation (10.4%) $ 1,000 California, Dtd 10/01/98 Refg (MBIA)...................... 4.50% 10/01/28 $ 862,160 5,000 Los Angeles Unified School District, California, 1997 Ser B (FGIC)................................................ 5.00 07/01/23 4,856,600 3,000 Hawaii, 1999 Ser CT (FSA)................................. 5.875 09/01/17 3,191,190 3,500 Massachusetts, 1995 Ser A (Ambac)......................... 5.00 07/01/12 3,635,765 2,000 Michigan Municipal Bond Authority, School Ser 1998........ 5.25 12/01/13 2,071,100 3,000 Barberton City School District, Ohio, Ser 1998 (FGIC)..... 5.125 11/01/22 2,948,190 3,500 Shelby County, Tennessee, Refg 1995 Ser A................. 5.625 04/01/11 3,667,755 5,000 La Joya Independent School District, Texas, Building Ser 2000 (PSF).............................................. 5.50 02/15/25 5,030,450 5,890 Washington, Ser 1993 A.................................... 5.75 10/01/17 6,010,981 - -------- ----------- 31,890 32,274,191 - -------- ----------- Educational Facilities Revenue (4.0%) 5,500 Oakland University, Michigan, Ser 1995 (MBIA)............. 5.75 05/15/26 5,653,064 New York State Dormitory Authority, 4,000 State University Refg Ser 1993 A........................ 5.50 05/15/08 4,315,760 890 State University Refg Ser 1999 B........................ 7.50 05/15/11 1,054,588 1,250 Ohio State University, General Receipts Ser 1999 A........ 5.75 12/01/24 1,306,588 - -------- ----------- 11,640 12,330,000 - -------- ----------- Electric Revenue (13.1%) 1,550 Los Angeles Department of Water & Power, California, 2001 Ser A................................................... 5.00 07/01/24 1,476,530 5,000 Sacramento Municipal Utility District, California, Refg 1994 Ser I (MBIA)....................................... 6.00 01/01/24 5,194,000 2,950 Kansas City, Kansas, Utility Refg & Impr Ser 1994 (FGIC).................................................. 6.375 09/01/23 3,186,826 7,750 South Carolina Public Service Authority, 1995 Refg Ser A (Ambac)................................................. 6.25 01/01/22 8,252,510 17,000 San Antonio, Texas, Electric & Gas Refg Ser 1994 C........ 4.70 02/01/06 17,501,500 5,000 Intermountain Power Agency, Utah, Refg 1997 Ser B (MBIA)**................................................ 5.75 07/01/19 5,179,350 - -------- ----------- 39,250 40,790,716 - -------- ----------- Hospital Revenue (13.4%) 5,000 Birmingham-Carraway Special Care Facilities Financing Authority, Alabama, Carraway Methodist Health Ser 1995 A (Connie Lee)**.......................................... 5.875 08/15/15 5,222,400 3,260 Colbert County - Northwest Health Care Authority, Alabama, Hellen Keller Hospital Refg Ser 1990.................... 8.75 06/01/09 3,330,057 10,000 Boston, Massachusetts, Boston City Hospital - FHA Mtge Refg Ser B.............................................. 5.75 02/15/13 10,082,300 4,500 New Jersey Health Care Authority, St Barnabas Medical Center Ser 1998 B (MBIA)................................ 4.75 07/01/28 4,173,480 4,000 North Carolina Medical Care Commission, Duke University Health Ser 1998 A....................................... 4.75 06/01/28 3,507,880
8 See Notes to Financial Statements 9 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001 continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ---------------------------------------------------------------------------------------------------------- $ 2,985 Lehigh County General Purpose Authority, Pennsylvania, St Lukes Hospital Ser 1992 (Ambac)......................... 6.25% 07/01/22 $ 3,069,655 2,650 Jefferson County Health Facilities Development Corporation, Texas, Baptist Health Ser 1989............. 8.30 10/01/14 2,520,256 5,000 Washington Health Care Facilities Authority, Swedish Health Ser 1998 (Ambac)................................. 5.125 11/15/22 4,808,000 5,000 Wisconsin Health & Educational Facilities Authority, Wausau Hospital Refg Ser 1998 A (Ambac)................. 5.125 08/15/20 4,836,450 - -------- ----------- 42,395 41,550,478 - -------- ----------- Industrial Development/Pollution Control Revenue (12.0%) 9,000 Pima County Industrial Development Authority, Arizona, Tucson Electric Power Co Refg Ser 1988 A (FSA).......... 7.25 07/15/10 9,452,340 10,000 Burlington, Kansas, Kansas Gas & Electric Co Ser 1991 (MBIA)**................................................ 7.00 06/01/31 10,227,500 8,000 New York City Industrial Development Agency, New York, Brooklyn Navy Yard Cogeneration Partners LP Ser 1997 (AMT)................................................... 5.65 10/01/28 7,438,160 10,000 Alliance Airport Authority, Texas, AMR Corp Ser 1990 (AMT)................................................... 7.50 12/01/29 10,218,700 - -------- ----------- 37,000 37,336,700 - -------- ----------- Mortgage Revenue - Multi-Family (3.2%) 1,250 Lake Charles Non-Profit Housing Development Corporation, Louisiana, Ser 1990 A (FSA)............................. 7.875 02/15/25 1,253,375 Massachusetts Housing Finance Agency, 1,790 Rental 1994 Ser A (AMT) (Ambac)......................... 6.60 07/01/14 1,879,482 4,340 Rental 1994 Ser A (AMT) (Ambac)......................... 6.65 07/01/19 4,541,246 2,380 Minnesota Housing Finance Agency, Rental 1995 Ser D (MBIA).................................................. 6.00 02/01/22 2,430,099 - -------- ----------- 9,760 10,104,202 - -------- ----------- Mortgage Revenue - Single Family (2.9%) 1,930 Colorado Housing & Finance Authority, Ser 1997 A-2 (AMT)................................................... 7.25 05/01/27 2,094,070 100 Idaho Housing Agency, Ser 1988 D-2 (AMT).................. 8.25 01/01/20 104,911 490 Kansas City Leavenworth & Lenexa, Kansas, GNMA-Backed Ser 1998 C (AMT)............................................ 8.00 11/01/20 503,308 Olathe, Kansas, 65 GNMA Collateralized Ser 1990 B.......................... 7.50 09/01/10 66,711 155 GNMA Collateralized Ser 1989 A (AMT) (MBIA)............. 8.00 11/01/20 156,607 880 New Orleans Home Mortgage Authority, Louisiana, GNMA Collateralized 1989 Ser B-1 (AMT)....................... 8.25 12/01/21 881,021 330 Mississippi Housing Finance Corporation, GNMA-Backed Ser 1989 (AMT) (FGIC)....................................... 8.25 10/15/18 332,541 1,815 Missouri Housing Development Commission, Homeownership 1996 Ser D (AMT)........................................ 7.10 09/01/27 1,892,246
9 See Notes to Financial Statements 10 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001 continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ---------------------------------------------------------------------------------------------------------- $ 810 South Carolina Housing Finance & Development Authority, Homeownership 1991 Ser A (AMT).......................... 7.40% 07/01/23 $ 826,718 45 Utah Housing Finance Agency, Ser 1991 B-1................. 7.50 07/01/16 45,866 2,000 Virginia Housing Development Authority, 1992 Ser A........ 7.10 01/01/25 2,054,301 - -------- ----------- 8,620 8,958,300 - -------- ----------- Nursing & Health Related Facilities Revenue (0.0%) 80 New York State Medical Care Facilities Finance Agency, - -------- Mental Health Ser 1987.................................. 8.875 08/15/07 83,096 ------------- Public Facilities Revenue (2.8%) 3,000 Broward County School Board, Florida, Ser 2001 A COPs (FSA)................................................... 5.00 07/01/26 2,867,760 2,000 Metropolitan Pier & Exposition Authority, Illinois, McCormick Place Refg Ser 1998 A (FGIC).................. 5.50 06/15/18 2,101,980 Saint Paul Independent School District #625, Minnesota, 1,700 Ser 1995 C COPs......................................... 5.45 02/01/11 1,748,705 1,800 Ser 1995 C COPs......................................... 5.50 02/01/12 1,850,904 - -------- ----------- 8,500 8,569,349 - -------- ----------- Transportation Facilities Revenue (14.9%) 5,000 Arizona Transportation Board, Highway Ser 2001............ 5.25 07/01/19 5,050,450 4,000 Colorado Department of Transportation, Ser 2000 (Ambac)... 6.00 06/15/14 4,389,320 2,500 Miami-Dade County, Florida, Miami International Airport Ser 2000 B (FGIC)....................................... 5.75 10/01/24 2,621,625 1,940 Atlanta, Georgia, Airport Ser 1994 B (AMT) (Ambac)........ 6.00 01/01/21 2,000,877 Chicago, Illinois, 5,000 Chicago-O'Hare International Airport Ser 1996 A (Ambac)................................................. 5.625 01/01/12 5,244,650 1,805 Midway Airport 1994 Ser A (AMT) (MBIA).................. 6.25 01/01/24 1,871,641 5,000 New Jersey Transportation Trust Authority, 1998 Ser A (FSA)................................................... 4.50 06/15/19 4,589,050 3,500 Pennsylvania Turnpike Commission, Ser R 2001 (Ambac)...... 5.00 12/01/30 3,319,260 8,000 Austin, Texas, Airport Prior Lien Ser 1995 A (AMT) (MBIA).................................................. 6.125 11/15/25 8,338,399 5,000 Pocahontas Parkway Association, Virginia, Route 895 Connector Ser 1998 A.................................... 5.50 08/15/28 4,258,500 2,000 Richmond Metropolitan Authority, Virginia, Expressway & Refg Ser 1998 (FGIC).................................... 5.25 07/15/17 2,070,500 2,800 Puerto Rico Highway & Transportation Authority, Ser 1998 A....................................................... 4.75 07/01/38 2,509,556 - -------- ----------- 46,545 46,263,828 - -------- ----------- Water & Sewer Revenue (11.4%) 2,500 Coachella, California, Ser 1992 COPs (FSA)................ 6.10 03/01/22 2,568,700 3,000 Eastern Municipal Water District, Water & Sewer Refg Ser 1998 A COPs (FGIC)...................................... 4.75 07/01/23 2,771,910 3,000 Atlanta, Georgia, Water & Wastewater Ser 1999 A (FGIC).... 5.50 11/01/22 3,143,100 4,000 Augusta, Georgia, Water & Sewerage Ser 2000 (FSA)......... 5.25 10/01/22 3,999,680 5,000 Rockdale County Water & Sewage Authority, Georgia, Ser 1999 A (MBIA)........................................... 5.50 07/01/25 5,077,900
10 See Notes to Financial Statements 11 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001 continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ---------------------------------------------------------------------------------------------------------- $ 5,000 Massachusetts Water Resources Authority, 1998 Ser A (FSA)................................................... 4.75% 08/01/27 $ 4,508,250 4,000 Detroit, Michigan, Water Supply Sr Lien, Ser 2000 A (FGIC).................................................. 5.25 07/01/33 3,885,080 5,000 Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA)................................................... 5.00 01/01/23 4,808,250 5,000 Austin, Texas, Water & Wastewater Refg Ser 2001 A (FSA) (WI).................................................... 5.125 05/15/27 4,783,550 - -------- ----------- 36,500 35,546,420 - -------- ----------- Other Revenue (3.6%) 10,000 New York Local Government Assistance Corporation, Refg Ser 1997 B (MBIA)........................................... 5.00 04/01/21 9,753,600 1,450 Cuyahoga County, Ohio, The Medical Center Co Ser 1998 (Ambac)................................................. 5.125 02/15/28 1,391,464 - -------- ----------- 11,450 11,145,064 - -------- ----------- Refunded (6.0%) 5,000 Regional Transportation Authority, Illinois, Ser 1994 A (Ambac)................................................. 6.25 06/01/04+ 5,483,000 1,340 Missouri Health & Educational Facilities Authority, Missouri, Baptist Medical Center Refg Ser 1989 (ETM).... 7.625 07/01/18 1,376,984 460 New York State Dormitory Authority, State University Refg Ser 1990 B.............................................. 7.50 05/15/10+ 566,035 4,000 Montgomery County, Ohio, Franciscan Medical Center - Dayton Ser 1997 (ETM).......................... 5.50 07/01/18 4,283,560 4,000 Lower Colorado River Authority, Texas, Jr Lien Seventh Ser (FSA) (ETM)............................................. 4.75 01/01/28 3,725,760 3,000 San Antonio, Texas, Electric & Gas Refg Ser 1994 C (ETM)................................................... 4.70 02/01/06 3,075,000 - -------- ----------- 17,800 18,510,339 - -------- ----------- 301,430 Total Tax-Exempt Municipal Bonds (Cost $294,257,208).......................... 303,462,683 - -------- ----------- Short-Term Tax-Exempt Municipal Obligations (2.0%) 1,400 Missouri Health & Educational Facilities Authority, Cox Health Ser 1997 (MBIA) (Demand 06/01/01)................ 3.05* 06/01/15 1,400,000 1,700 Missouri Health & Educational Facilities Authority, Washington University Ser 1996 C (Demand 06/01/01)...... 3.05* 09/01/30 1,700,000 3,000 Lincoln County, Wyoming, Exxon Corp Ser 1984 C (Demand 06/01/01)............................................... 3.10* 11/01/14 3,000,000 - -------- ----------- 6,100 Total Short-Term Tax-Exempt Municipal Obligations (Cost $6,100,000)........... 6,100,000 - -------- -----------
$307,530 Total Investments (Cost $300,357,208) (a)................... 99.7% 309,562,683 ======== Other Assets in Excess of Liabilities....................... 0.3 793,786 ----- ------------ Net Assets.................................................. 100.0% $310,356,469 ===== ============
11 See Notes to Financial Statements 12 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001 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. ** A portion of this security is segregated in connection with the purchase of a "when-issued" security. (a) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $11,666,711 and the aggregate gross unrealized depreciation is $2,461,236, resulting in net unrealized appreciation of $9,205,475. Bond Insurance: - ------------------------------------------------------------------------ Ambac Ambac Assurance Corporation. Connie Lee Connie Lee Insurance Company - A wholly owned subsidiary of Ambac Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation. PSF Texas Permanent School Fund Guarantee Program.
12 See Notes to Financial Statements 13 Morgan Stanley Dean Witter Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - MAY 31, 2001 continued Geographic Summary of Investments Based on Market Value as a Percent of Net Assets Alabama................. 2.8% Arizona................. 4.7 California.............. 5.7 Colorado................ 2.1 Florida................. 1.8 Georgia................. 4.6 Hawaii.................. 1.0 Illinois................ 4.6 Kansas.................. 4.6 Louisiana............... 0.7 Massachusetts........... 7.9 Michigan................ 3.7% Minnesota............... 1.9 Mississippi............. 0.1 Missouri................ 2.1 New Jersey.............. 2.8 New York................ 7.5 North Carolina.......... 1.1 Ohio.................... 4.7 Pennsylvania............ 2.1 Puerto Rico............. 0.8 South Carolina.......... 2.9 Tennessee............... 1.2% Texas................... 17.8 Utah.................... 1.7 Virginia................ 2.7 Washington.............. 3.5 Wisconsin............... 1.6 Wyoming................. 1.0 ---- Total................... 99.7% ====
13 See Notes to Financial Statements 14 Morgan Stanley Dean Witter Municipal Premium Income Trust FINANCIAL STATEMENTS Statement of Assets and Liabilities May 31, 2001 Assets: Investments in securities, at value (cost $300,357,208)....................................... $309,562,683 Cash........................................................ 16,331 Receivable for: Interest................................................ 5,533,158 Investments sold........................................ 340,000 Prepaid expenses and other assets........................... 189,588 ------------ Total Assets............................................ 315,641,760 ------------ Liabilities: Payable for: Investments purchased................................... 4,805,864 Dividends to preferred shareholders..................... 135,834 Investment advisory fee................................. 115,752 Administration fee...................................... 72,345 Common shares of beneficial interest repurchased........ 41,877 Accrued expenses and other payables......................... 113,619 ------------ Total Liabilities....................................... 5,285,291 ------------ Net Assets.............................................. $310,356,469 ============ Composition of Net Assets: Preferred shares of beneficial interest (1,000,000 shares authorized of non-participating $.01 par value, 1,000 shares outstanding)....................................... $100,000,000 ------------ Common shares of beneficial interest (unlimited shares authorized of $.01 par value, 21,284,249 shares outstanding).............................................. 200,170,902 Net unrealized appreciation................................. 9,205,475 Accumulated undistributed net investment income............. 1,628,402 Accumulated net realized loss............................... (648,310) ------------ Net Assets Applicable to Common Shareholders............ 210,356,469 ------------ Total Net Assets........................................ $310,356,469 ============ Net Asset Value Per Common Share ($210,356,469 divided by 21,284,249 common shares outstanding).............................................. $9.88 ============
14 See Notes to Financial Statements 15 Morgan Stanley Dean Witter Municipal Premium Income Trust FINANCIAL STATEMENTS continued Statement of Operations For the year ended May 31, 2001 Net Investment Income: Interest Income............................................. $17,666,263 ----------- Expenses Investment advisory fee..................................... 1,244,973 Administration fee.......................................... 778,108 Auction commission fees..................................... 302,314 Transfer agent fees and expenses............................ 102,355 Professional fees........................................... 60,804 Auction agent fees.......................................... 41,062 Registration fees........................................... 34,922 Shareholder reports and notices............................. 32,954 Custodian fees.............................................. 17,716 Trustees' fees and expenses................................. 14,337 Other....................................................... 24,733 ----------- Total Expenses.......................................... 2,654,278 Less: expense offset........................................ (17,687) ----------- Net Expenses............................................ 2,636,591 ----------- Net Investment Income................................... 15,029,672 ----------- Net Realized and Unrealized Gain: Net realized gain........................................... 809,156 Net change in unrealized depreciation....................... 16,630,705 ----------- Net Gain................................................ 17,439,861 ----------- Net Increase................................................ $32,469,533 ===========
15 See Notes to Financial Statements 16 Morgan Stanley Dean Witter Municipal Premium Income Trust FINANCIAL STATEMENTS continued
Statement of Changes in Net Assets FOR THE YEAR FOR THE YEAR ENDED ENDED MAY 31, 2001 MAY 31, 2000 ------------ ------------ Increase (Decrease) in Net Assets: Operations: Net investment income....................................... $ 15,029,672 $ 15,649,034 Net realized gain (loss).................................... 809,156 (1,457,465) Net change in unrealized depreciation....................... 16,630,705 (20,713,171) ------------ ------------ Net Increase (Decrease)................................. 32,469,533 (6,521,602) ------------ ------------ Dividends to preferred shareholders from net investment income.................................................... (4,021,786) (3,734,450) ------------ ------------ Dividends and Distributions to Common Shareholders from: Net investment income....................................... (11,710,175) (12,096,798) Net realized gain........................................... -- (1,623,826) ------------ ------------ Total................................................... (11,710,175) (13,720,624) ------------ ------------ Decrease from transactions in common shares of beneficial interest.................................................. (6,636,662) (12,263,531) ------------ ------------ Net Increase (Decrease)................................. 10,100,910 (36,240,207) Net Assets: Beginning of period......................................... 300,255,559 336,495,766 ------------ ------------ End of Period (Including undistributed net investment income of $1,628,402 and $2,330,691, respectively)................ $310,356,469 $300,255,559 ============ ============
16 See Notes to Financial Statements 17 Morgan Stanley Dean Witter Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - MAY 31, 2001 1. Organization and Accounting Policies Morgan Stanley Dean Witter Municipal Premium Income Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Fund's investment objective is to provide a high level of current income exempt from federal income tax. The Fund was organized as a Massachusetts business trust on November 16, 1988 and commenced operations on February 1, 1989. 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 Fund 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. Discounts are accreted and premiums are amortized over the life of the respective securities. Interest income is accrued daily. C. Federal Income Tax Status -- It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable and nontaxable income to its shareholders. Accordingly, no federal income tax provision is required. D. Dividends and Distributions to Shareholders -- The Fund records dividends and distributions to its shareholders on the ex-dividend date. The amount of dividends and distributions from net 17 18 Morgan Stanley Dean Witter Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - MAY 31, 2001 continued 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 reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital. 2. Investment Advisory/Administration Agreements Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Advisors Inc. (the "Investment Advisor"), formerly Morgan Stanley Dean Witter Advisors Inc., the Fund pays the Investment Advisor an advisory fee, calculated weekly and payable monthly, by applying the annual rate of 0.40% to the Fund's weekly net assets. Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the "Administrator"), an affiliate of the Investment Advisor, the Fund pays an administration fee, calculated weekly and payable monthly, by applying the annual rate of 0.25% to the Fund's weekly net assets. 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 May 31, 2001 aggregated $36,884,143 and $42,456,058, respectively. Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Advisor and Administrator, is the Fund's transfer agent. At May 31, 2001, the Fund had transfer agent fees and expenses payable of approximately $10,800. The Fund has an unfunded noncontributory defined benefit pension plan covering all independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on years of service and compensation during the last five years of service. Aggregate pension costs for the year ended May 31, 2001 included in Trustees' fees and expenses in the Statement of Operations amounted to $5,957. At May 31, 2001, the Fund had an accrued pension liability of $53,664 which is included in accrued expenses in the Statement of Assets and Liabilities. 18 19 Morgan Stanley Dean Witter Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - MAY 31, 2001 continued 4. Common Shares of Beneficial Interest Transactions in shares of beneficial interest were as follows:
CAPITAL PAID IN PAR VALUE EXCESS OF SHARES OF SHARES PAR VALUE ----------- ---------- ------------ Balance, May 31, 1999....................................... 23,585,024 $235,850 $218,835,245 Treasury shares purchased and retired (weighted average discount 9.68%)*.......................................... (1,536,776) (15,368) (12,248,163) ---------- -------- ------------ Balance, May 31, 2000....................................... 22,048,248 220,482 206,587,082 Treasury shares purchased and retired (weighted average discount 10.77%)*......................................... (763,999) (7,640) (6,629,022) ---------- -------- ------------ Balance, May 31, 2001....................................... 21,284,249 $212,842 $199,958,060 ========== ======== ============
- --------------------- * The Trustees have voted to retire the shares purchased. 5. Preferred Shares of Beneficial Interest The Fund 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 the approval of the common shareholders. The Fund has issued Series A through E Auction Rate Preferred Shares ("Preferred Shares") which have a liquidation value of $100,000 per share plus the redemption premium, if any, plus accumulated but unpaid dividends, whether or not declared, thereon to the date of distribution. The Fund may redeem such shares, in whole or in part, at the original purchase price of $100,000 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 NEXT RANGE OF SERIES SHARES* THOUSANDS* RATE* RESET DATE DIVIDEND RATES** - ------ ------- ---------- ----- ---------- ---------------- A 200 20,000 3.05% 06/06/01 3.00% - 4.80% B 200 20,000 3.00 06/06/01 3.00 - 5.10 C 200 20,000 4.25 09/05/01 4.25 D 200 20,000 3.90 01/09/02 3.90 E 200 20,000 3.05 06/06/01 3.00 - 4.50
- --------------------- * As of May 31, 2001. ** For the year ended May 31, 2001. Subsequent to May 31, 2001 and up through July 6, 2001, the Fund paid dividends to each of the Series A through E at rates ranging from 2.55% to 3.10% in the aggregate amount of $308,380. 19 20 Morgan Stanley Dean Witter Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - MAY 31, 2001 continued The Fund is subject to certain restrictions relating to the preferred shares. Failure to comply with these restrictions could preclude the Fund 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. 6. Dividends to Common Shareholders The Fund declared the following dividends from net investment income:
DECLARATION AMOUNT RECORD PAYABLE DATE PER SHARE DATE DATE - -------------- --------- ------------------ ------------------ March 27, 2001 $0.045 June 8, 2001 June 22, 2001 June 26, 2001 $0.045 July 6, 2001 July 20, 2001 June 26, 2001 $0.045 August 3, 2001 August 17, 2001 June 26, 2001 $0.045 September 7, 2001 September 21, 2001
7. Federal Income Tax Status During the year ended May 31, 2001, the Fund utilized approximately $590,000 of its net capital loss carryover. At May 31, 2001, the Fund had a net capital loss carryover of approximately $648,000 which will be available through May 31, 2008 to offset future capital gains to the extent provided by regulations. 8. Expense Offset The expense offset represents a reduction of the custodian fees for earnings on cash balances maintained by the Fund. 9. Risks Relating to Certain Financial Instruments The Fund may invest a portion of its assets in residual interest bonds, which are inverse floating rate municipal obligations. The prices of these securities are subject to greater market fluctuations during periods of changing prevailing interest rates than are comparable fixed rate obligations. At May 31, 2001, the Fund did not hold positions in residual interest bonds. 20 21 Morgan Stanley Dean Witter Municipal Premium Income Trust FINANCIAL HIGHLIGHTS Selected ratios and per share data for a common share of beneficial interest outstanding throughout each period:
FOR THE YEAR ENDED MAY 31* --------------------------------------------------------- 2001 2000 1999 1998 1997 --------- --------- --------- --------- --------- Selected Per Share Data: Net asset value, beginning of period............. $ 9.08 $10.03 $10.41 $10.08 $10.02 -------- -------- -------- -------- -------- Income from investment operations: Net investment income.......................... 0.69 0.68 0.70 0.75 0.78 Net realized and unrealized gain (loss)........ 0.80 (0.96) (0.18) 0.33 0.19 -------- -------- -------- -------- -------- Total income (loss) from investment operations... 1.49 (0.28) 0.52 1.08 0.97 -------- -------- -------- -------- -------- Less dividends and distributions from: Net investment income.......................... (0.54) (0.53) (0.54) (0.60) (0.60) Common share equivalent of dividends paid to preferred shareholders....................... (0.19) (0.16) (0.14) (0.15) (0.14) Net realized gain.............................. -- (0.07) (0.26) -- (0.20) -------- -------- -------- -------- -------- Total dividends and distributions................ (0.73) (0.76) (0.94) (0.75) (0.94) -------- -------- -------- -------- -------- Anti-dilutive effect of acquiring treasury shares......................................... 0.04 0.09 0.04 -- 0.03 -------- -------- -------- -------- -------- Net asset value, end of period................... $ 9.88 $ 9.08 $10.03 $10.41 $10.08 ======== ======== ======== ======== ======== Market value, end of period...................... $ 8.88 $ 7.75 $ 8.75 $9.625 $9.375 ======== ======== ======== ======== ======== Total Return+.................................... 21.92% (4.55)% (1.21)% 9.08% 13.52% Ratios to Average Net Assets of Common Shareholders: Expenses......................................... 1.26%(1) 1.28%(1) 1.19%(1) 1.18%(1) 1.14%(1) Net investment income before preferred stock dividends...................................... 7.12% 7.30% 6.73% 7.31% 7.70% Preferred stock dividends........................ 1.91% 1.74% 1.39% 1.46% 1.41% Net investment income available to common shareholders................................... 5.21% 5.56% 5.34% 5.85% 6.29% Supplemental Data: Net assets, end of period, in thousands.......... $310,356 $300,256 $336,496 $354,392 $349,294 Asset coverage on preferred shares at end of period......................................... 310% 300% 336% 354% 349% Portfolio turnover rate.......................... 12% 11% 17% 21% 5%
- --------------------- * 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 and distributions are assumed to be reinvested at the prices obtained under the Fund'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 21 22 Morgan Stanley Dean Witter Municipal Premium Income Trust INDEPENDENT AUDITORS' REPORT To the Shareholders and Board of Trustees of Morgan Stanley Dean Witter Municipal Premium Income Trust: We have audited the accompanying statement of assets and liabilities of Morgan Stanley Dean Witter Municipal Premium Income Trust (the "Fund"), including the portfolio of investments, as of May 31, 2001, and the related statements of operations and changes in net assets, and the financial highlights for the year then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statement of changes in net assets for the year ended May 31, 2000 and the financial highlights for each of the respective stated periods ended May 31, 2000 were audited by other independent accountants whose report, dated June 30, 2000, expressed an unqualified opinion on that statement and financial highlights. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2001, by correspondence with the custodian and broker. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Morgan Stanley Dean Witter Municipal Premium Income Trust as of May 31, 2001, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP New York, New York July 9, 2001 -------------------------------------------------------------------- 2001 FEDERAL TAX NOTICE (UNAUDITED) For the year ended May 31, 2001, all of the Fund'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. 22 23 (This Page Intentionally Left Blank) 24 TRUSTEES - ---------------------------------- Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien James F. Higgins 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 - ---------------------------------- Deloitte & Touche LLP Two World Financial Center New York, New York 10281 INVESTMENT ADVISOR - ---------------------------------- Morgan Stanley Dean Witter Advisors Inc. Two World Trade Center New York, New York 10048 MORGAN STANLEY DEAN WITTER Municipal Premium Income Trust Annual Report May 31, 2001 -----END PRIVACY-ENHANCED MESSAGE-----