<PAGE>
TCW/DW TERM TRUST 2002
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- - --------------------------------------------------------------------------------
After continued upward pressure on interest rates during the final three months
of 1994, the first quarter of 1995 saw an overall interest rate decline, causing
Term Trust 2002's net asset value (NAV) to increase from $7.86 per share on
September 30, 1994 to $8.36 per share on March 31, 1995. Based on this increase,
and including reinvestment of income dividends totaling $0.39 per share, the
Trust's total return for the six-month period under review was 11.86 percent. As
of March 31, 1995 the bond market rally seen in the first quarter was not
reflected in the value of the Trust's shares on the New York Stock Exchange
(NYSE). Based on a change in NYSE market price from $8.25 per share to $7.25 per
share, and including reinvestment of income dividends, total return for the six-
month period was -7.58 percent.
THE MARKET
Once evidence of a slowdown in economic growth began to accumulate during the
first quarter of 1995, the market's inflation fears ebbed and interest rates
fell on average by 65 basis points (0.65 percentage points). The decline in the
issuance of new pass-through securities and collateralized mortgage obligations
(CMOs) helped the mortgage sector recover gradually from the difficulties
encountered last spring, when, with interest rates rising and mortgage
prepayment rates falling, investors rushed to sell off their mortgage-backed
holdings, exacerbating price declines. Mortgage prepayment rates have been
declining as a result of the seasonal slowdown in housing turnover and the lack
of attractive refinancing alternatives.
THE PORTFOLIO
Approximately 69 percent of the Trust is invested in AAA-rated fixed rate
collateralized mortgage obligations (CMOs) with durations, average lives or
maturity dates that correspond closely to the Trust's termination date. Another
17 percent is invested in inverse floating rate CMOs (also known as inverse
floaters) issued by agencies of the U.S. government. The interest rate or coupon
on an inverse floater resets by a multiple in a direction opposite to that of a
specified index. In addition, the average lives, durations and expected
maturities of inverse floaters are more sensitive to changes in prepayment rates
and interest rates than some other types of CMOs. However, inverse floaters can
provide a portfolio with strong call protection and attractive projected yields
and total rates of return. As interest rates fell in the first quarter, the
value of these securities has increased. Approximately 14 percent of the Trust
is invested in AAA-rated zero coupon municipal bonds and short-term investments,
which play a role in striving to achieve the Trust's objective of returning the
original offering price of $10 to shareholders when the Trust terminates.
Leverage (the ratio of debt to equity) has declined to less than 30 percent of
total gross assets. We will continue to use prepayments that we receive to pay
down leverage further.
LOOKING AHEAD
The Trust's investment adviser, TCW Funds Management, Inc. (TCW), is generally
positive regarding the mortgage-backed sector, but does not rule out the
possibility of additional rate hikes by the Federal Reserve Board later this
year. The U.S. dollar's weakness is also of concern, as it has some inflationary
implications. In the past, periods of strong bond market performance have been
correlated with high real rates of interest. With today's real interest rates
remaining high, even after the recent bond market rally, TCW anticipates
continued near-term bond market strength. The Trust's value per share, both NAV
and on the NYSE, will continue to fluctuate as the prices of the portfolio's
securities respond to changing market conditions and interest rates.
We would like to remind you that the Trustees have approved a procedure whereby
the Trust, when appropriate, may attempt to reduce or eliminate a market value
discount from net asset value by purchasing 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.
We appreciate your support of TCW/DW Term Trust 2002 and look forward to
continuing to serve your investment needs and objectives.
Very truly yours,
/S/ Charles A. Fiumefreddo
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
<TABLE><CAPTION>
TCW/DW TERM TRUST 2002
PORTFOLIO OF INVESTMENTS March 31, 1995 (unaudited)
- - --------------------------------------------------------------------------------
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- - --------- ------ --------- -------
<S> <C> <C> <C>
COLLATERALIZED MORTGAGE
OBLIGATIONS (117.0%)
U.S. GOVERNMENT AGENCIES (61.0%)
$ 727 Federal Home Loan Mortgage Corp.
1385 SB ......................... 10.74+% 10/15/07 $ 577,017
3,063 Federal Home Loan Mortgage Corp.
1389 SB ......................... 8.293+ 10/15/07 2,105,815
10,500 Federal Home Loan Mortgage Corp.
1446 NB (PAC)++ ................. 7.50 12/15/22 9,652,629
30,000 Federal Home Loan Mortgage Corp.
1465 G (PAC)++ .................. 7.00 12/15/07 27,922,920
15,600 Federal Home Loan Mortgage Corp.
1481 H (PAC) .................... 6.88 8/15/21 14,364,698
4,999 Federal Home Loan Mortgage Corp.
1519 J .......................... 5.693+ 5/15/08 4,021,040
16,447 Federal Home Loan Mortgage Corp.
1606 SC ......................... 7.94+ 11/15/08 9,798,718
11,103 Federal Home Loan Mortgage Corp.
1609 LG (PAC) ................... 4.062+ 11/15/23 6,578,666
19,884 Federal Home Loan Mortgage Corp.
1611 QB (PAC) ................... 7.438+ 11/25/23 13,275,852
18,300 Federal Home Loan Mortgage Corp.
1633 B .......................... 6.50 9/15/23 16,059,641
18,500 Federal Home Loan Mortgage Corp.
1638 K (PAC)++ .................. 6.50 3/15/23 16,524,810
2,540 Federal National Mortgage Assoc.
1992-138 O++ .................... 7.50 7/25/22 2,432,987
13,993 Federal National Mortgage Assoc.
1992-150 SV (PAC) ............... 11.908+ 5/25/21 11,596,685
7,430 Federal National Mortgage Assoc.
1992-206 MB (PAC)++ .............. 7.00 9/25/22 6,643,208
15,703 Federal National Mortgage Assoc.
1992-208 C (TAC)++ ............... 7.50 10/25/07 15,344,322
20,760 Federal National Mortgage Assoc.
1992-214 K++ ..................... 7.50 12/25/22 19,220,507
8,333 Federal National Mortgage Assoc.
1993-139 SP (PAC) ................ 5.37+ 2/25/21 5,544,275
31,055 Federal National Mortgage Assoc.
1993-141 A++ ..................... 7.00 12/25/22 28,680,933
9,843 Federal National Mortgage Assoc.
1993-179 SV .................... 1.142+ 10/25/21 5,027,450
9,258 Federal National Mortgage Assoc.
1993-190 SB (PAC)++ .............. 7.50 10/25/08 6,931,870
18,193 Federal National Mortgage Assoc.
1993-190 S ....................... 5.712+ 10/25/08 10,369,778
5,814 Federal National Mortgage Assoc.
1993-238 SA ...................... 7.755+ 7/25/08 3,611,947
20,000 Federal National Mortgage Assoc.
G1992-44 SC ..................... 13.359+ 8/25/20 18,837,500
------------
TOTAL U.S. GOVERNMENT AGENCIES
(Identified Cost $309,086,368) ...................... 255,123,268
------------
PRIVATE ISSUES (56.0%)
9,022 Bear Stearns Mortgage Securities,
Inc 1993-10 A7 (PAC) ............. 7.20 7/25/24 8,288,926
6,364 Capstead Securities Corp.
IV 1992-15 C ..................... 7.50 6/25/23 6,373,706
19,844 Citicorp Mortgage Securities,
Inc. 1992-20 A5++ ................ 7.50 12/15/07 19,248,680
19,574 CMC Securities Corporation
III 1994-C A9 (PAC) .............. 6.75 3/25/24 17,469,795
11,232 CountryWide Funding Corp.
1994-4 A12++ ..................... 6.95 4/25/24 9,420,80
21,117 CountryWide Mortgage Backed
Securities, Inc. 1993-B A6 (PAC).. 6.75 11/25/23 17,692,097
25,562 General Electric Capital Mortgage
Services, Inc. 1994-6 A9 ......... 6.50 9/25/22 20,533,758
35,694 Prudential Home Mortgage
Securities 1992-50 A3++ .......... 8.00 2/25/23 35,699,457
13,170 Prudential Home Mortgage
Securities 1993-2 A7 ............. 7.00 2/25/08 12,199,784
20,000 Prudential Home Mortgage
Securities 1993-60 A3 (PAC) ...... 6.75 12/25/23 17,727,560
41,182 Resolution Funding Mortgage
Securities I 1992-S38 A6 ......... 7.50 2/25/18 40,725,127
16,836 Resolution Funding Mortgage
Securities I 1993-S40 A8 (TAC) .... 6.75 11/25/23 15,077,011
9,197 Resolution Trust Corp 1993-C1 A1B .... 7.75 5/25/24 8,996,080
4,731 Ryland Mortgage Securities
Corp. 1992-18 C ................. 7.75 9/25/19 4,707,345
------------
TOTAL PRIVATE ISSUES
(Identified Cost $246,915,661) ....................... 234,160,126
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (Identified Cost $556,002,029) ............ 489,283,394
------------
MUNICIPAL BONDS (19.4%)
EDUCATIONAL FACILITY REVENUE (1.0%)
6,600 Austin Independent School District,
Texas (PSF Guaranteed) ........... 0.00 8/01/03 4,178,922
------------
</TABLE>
<PAGE>
<TABLE><CAPTION>
TCW/DW TERM TRUST 2002
PORTFOLIO OF INVESTMENTS March 31, 1995 (unaudited) (continued)
- - --------------------------------------------------------------------------------
Principal
Amount (in Coupon Maturity
thousands) Rate Date Value
- - --------- ------ --------- -------
<S> <C> <C> <C>
ELECTRIC REVENUE (2.7%)
$ 4,355 Austin, Texas, Combined Utility
Ser A (FGIC Insured) (ETM) ........ 0.00% 5/15/03 $ 2,838,458
5,195 Austin, Texas, Combined Utility
Ser A (FGIC Insured) ............. 0.00 5/15/03 3,327,605
8,400 Lower Colorado River Authority,
Texas, Jr Lien
4th Ser (FGIC Insured) ............ 0.00 1/01/04 5,169,696
------------
11,335,759
------------
INDUSTRIAL DEVELOPMENT (3.9%)
14,010 Metropolitan Pier & Exposition
Authority, Illinois, McCormick
Place (AMBAC Insured) ............ 0.00 6/15/02 9,288,216
10,465 Pennsylvania Convention Center
Authority, Ser A (FGIC
Insured) (ETM) .................. 0.00 9/01/02 7,033,317
------------
16,321,533
------------
OTHER REVENUE (6.6%)
33,140 Johnson County, Kansas,
(AMBAC Insured) (ETM) ............ 0.00 6/01/12 9,978,123
17,500 North Slope Boro, Alaska,
Ser 1992 A (MBIA Insured) ........ 0.00 6/30/03 10,997,875
10,400 Texas, Superconducting Supercolider
Refg Ser C (FGIC Insured) ........ 0.00 4/01/03 6,706,440
------------
27,682,438
------------
TAX ALLOCATION REVENUE (2.0%)
12,370 Harris County, Texas (MBIA Insured).. 0.00 10/01/02 8,234,585
------------
TRANSPORTATION REVENUE (1.8%)
12,000 Contra Costa Transportation
Authority, California, Sales
Tax (FGIC Insured) (ETM) ......... 0.00 3/01/04 7,494,120
------------
WATER & SEWER REVENUE (1.4%)
9,500 Pittsburgh, Pennsylvania,
Water & Sewer Ser A
(FGIC Insured) (ETM) ............. 0.00 9/01/04 5,751,870
------------
TOTAL MUNICIPAL BONDS
(Identified Cost $78,109,703) ........................ 80,999,227
------------
SHORT-TERM INVESTMENTS (0.8%)
U.S. GOVERNMENT AGENCY (a) (0.4%)
2,000 Federal Home Loan Mortgage Corp.
(Amortized Cost $1,999,317) ....... 6.15 4/03/95 1,999,317
REPURCHASE AGREEMENT (0.4%)
1,488 The Bank of New York (dated 3/31/95,
proceeds $1,487,998,
collateralized by $1,537,860
U.S. Treasury Bill 6.10% due
9/07/95 valued at $1,498,913)
(Identified Cost $1,487,755) ..... 5.875 4/03/95 1,487,755
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $3,487,072) .......................... 3,487,072
------------
TOTAL INVESTMENTS (Identified
Cost $637,598,804) (b) ..................... 137.2% 573,769,693
LIABILITIES IN EXCESS OF OTHER ASSETS ......... (37.2) (155,624,413)
------- ------------
NET ASSETS 100.0% $418,145,280
======= ============
</TABLE>
[FN]
- - ------------
ETM Escrowed to Maturity
PAC Planned Amortization Class.
TAC Targeted Amortization Class
+ Inverse floater - rate moves inversely to a designated index, such as
LIBOR (London Inter-Bank Offered Rate) or COFI
(Cost of Funds Index), typically at a multiple of the changes of the
relevant index rate.
++ Some or all of these securities are pledged in connection with the
Reverse Repurchase Agreements.
(a) Securities were purchased on a discount basis. The interest rate shown
has been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost of investments for federal income tax purposes is
$637,598,804; the aggregate gross unrealized apprecation is
$5,064,878 and the aggregate gross unrealized depreciation
is $68,893,989, resulting in net unrealized depreciation of
$63,829,111.
See Notes to Financial Statements
<PAGE>
<TABLE>
TCW/DW TERM TRUST 2002
FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
<CAPTION>
Statement of Assets and Liabilities
March 31, 1995 (unaudited)
- - --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $637,598,804) ............................ $ 573,769,693
Receivable for:
Interest ................................................... 3,447,481
Principal paydowns ......................................... 68,798
Deferred organizational expenses ............................. 37,451
Prepaid expenses and other assets ............................ 87,290
-------------
Total Assets ........................................ 577,410,713
-------------
LIABILITIES:
Reverse repurchase agreements ................................ 158,195,000
Payable for:
Interest ................................................... 747,138
Management fee ............................................. 155,218
Investment advisory fee .................................... 103,479
Accrued expenses and other payables ........................... 64,598
Contingencies (Note 9)
-------------
Total Liabilities .................................... 159,265,433
-------------
NET ASSETS:
Paid-in-capital ................................................ 469,394,543
Net unrealized depreciation .................................... (63,829,111)
Accumulated undistributed net investment income ................ 12,540,839
Accumulated net realized gain .................................. 39,009
-------------
Net Assets ............................................... $418,145,280
=============
Net Asset Value Per Share, 50,010,640
shares outstanding (unlimited shares
authorized of $.01 par value) ................................. $8.36
=====
</TABLE>
<TABLE><CAPTION>
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED MARCH 31, 1995 (unaudited)
- - --------------------------------------------------------------------------------
<S> <C>
NET INVESTMENT INCOME:
Interest Income ........................................... $23,789,332
-------------
Expenses
Management fee ............................................... 752,019
Investment advisory fee ...................................... 501,346
Transfer agent fees and expenses ............................. 83,904
Professional fees ............................................ 37,711
Shareholder reports and notices .............................. 25,575
Custodian fees ............................................... 22,076
Trustees' fees and expenses .................................. 23,909
Registration fees ............................................ 18,559
Organizational expenses ...................................... 7,145
Other ....................................................... 25,953
------------
Total Operating Expenses .............................. 1,498,197
Interest expense ........................................... 4,784,624
------------
Total Expenses ........................................ 6,282,821
-------------
Net Investment Income ................................. 17,506,511
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain ......................................... 39,009
Net change in unrealized depreciation ..................... 27,189,100
-------------
Net Gain ........................................... 27,228,109
-------------
Net Increase ........................................ $44,734,620
=============
</TABLE>
<TABLE><CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
For the
six months ended
March 31, 1995 For the year ended
(unaudited) September 30, 1994
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................ $ 17,506,511 $ 49,369,201
Net realized gain .................... 39,009 99,325
Net change in unrealized
appreciation/depreciation ........... 27,189,100 (122,565,499)
------------- ------------
Net increase (decrease) ........... 44,734,620 (73,096,973)
------------- ------------
Dividends and distributions
to shareholders from:
Net investment income ................. (19,486,657) (41,923,533)
Net realized gain ..................... (17,102) (1,284,694)
------------- ------------
Total ............................... (19,503,759) (43,208,227)
------------- ------------
Total increase (decrease) ............. 25,230,861 (116,305,200)
NET ASSETS:
Beginning of period ...................... 392,914,419 509,219,619
------------- ------------
End of period (including undistributed
net investment income of $12,540,839
and $14,520,985, respectively) .......... $418,145,280 $392,914,419
============ ==============
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE><CAPTION>
TCW/DW Term Trust 2002
Financial Statements (continued)
- - --------------------------------------------------------------------------------
Statement of Cash Flows
For the six months ended March 31, 1995 (unaudited)
- - --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN CASH:
Cash Flows from Operating Activities:
Net investment income ..................................... $ 17,506,511
Adjustments to reconcile net investment
income to net cash from operating activities:
Decrease in receivables and other
assets related to operations ........................ 391,293
Increase in payables related to operations ............ 485,041
Net amortization of discount/premium .................. (2,249,978)
--------------
Net cash from operating activities .............. 16,132,867
---------------
Cash Flows from Investing Activities:
Purchases of investments .................................. (814,435)
Principal prepayments/sales of investments ................ 10,865,702
Net purchases of short-term investments ................... (2,347,375)
---------------
Net cash from investing activities .............. 7,703,892
---------------
Cash Flows used for Financing Activities:
Net payment from maturities of reverse
repurchase agreements .................................. (4,333,000)
Dividends from net investment income ...................... (19,486,657)
Distributions from capital gains .......................... (17,102)
---------------
Net cash used for financing activities .......... (23,836,759)
---------------
Net increase in cash ...................................... --
Cash at beginning of period ............................... --
---------------
Cash at end of period ..................................... $ --
---------------
Cash paid during the period for interest ..................... $ 4,250,576
---------------
See Notes to Financial Statements
</TABLE>
<PAGE>
TCW/DW Term Trust 2002
Notes to Financial Statements (unaudited)
- - --------------------------------------------------------------------------------
1. Organization and Accounting Policies-TCW/DW Term Trust 2002 (the "Trust") is
registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company. The Trust was organized
as a Massachusetts business trust on August 28, 1992 and commenced operations on
November 30, 1992. The Trust will distribute substantially all of its net
assets on or about December 31, 2002 and will then terminate.
The following is a summary of significant accounting policies:
A. Valuation of Investments-(1) an equity security listed or traded on the
New York or American Stock Exchange is valued at its latest sale price on
that exchange prior to the time when assets are valued, if there were no
sales that day, the security is valued at the latest bid price (in cases
where a security is traded on more than one exchange, the security is
valued on the exchange designated as the primary market by the Trustees,
(2) all other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest available bid
price prior to the time of valuation; (3) when market quotations are not
readily available, including circumstances under which it is determined by
the Adviser that sale and bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Trustees; (4) certain of the Trust's portfolio
securities may be valued by an outside pricing service approved by the
Trustees. The pricing service utilizes a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters,
and/or research and evaluations by its staff, including review of broker-
dealer market price quotations, if available, in determining what it
believes is the fair valuation of the portfolio securities valued by such
pricing service; and (5) short-term debt securities having a maturity date
of more than sixty days at time of purchase are valued on a mark-to-market
basis until sixty days prior to maturity and thereafter at amortized cost
based on their value on the 61st day. Short-term debt securities having a
maturity date of sixty days or less at the time of purchase are valued at
amortized cost.
B. Accounting for Investments-Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. The Trust amortizes premiums and accrues discounts on fixed income
securities. Interest income is accrued daily.
C. Federal Income Tax Status-It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. Dividends and Distributions to Shareholders-The Trust records dividends
and distributions to its shareholders on the 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 reclassification.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax
purposes, they are reported as distributions of paid-in-capital.
E. Organizational Expenses and Offering Costs-Dean Witter InterCapital
Inc.("InterCapital"), an affiliate of Dean Witter Services Company Inc.
(the "Manager"), paid the organizational expenses and offering costs of the
Trust in the amounts of approximately $70,200 and $2,131,000, respectively.
The Trust has reimbursed InterCapital for the organizational expenses which
have been deferred and are being amortized by the Trust on the straight-
line method over a period not to exceed five years from the commencement of
operations. Offering costs were charged to capital at the time of issuance
of the Trust's shares.
2. Management Agreement-Pursuant to a Management Agreement, the Trust pays its
Manager a management fee, accrued weekly and payable monthly, by applying the
annual rate of 0.39% to the Trust's average weekly net assets. Under the terms
of the Management Agreement, the Manager maintains certain of the Trust's books
and records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Trust who are employees of
the Manager. The Manager also bears the cost of telephone services, heat,
light, power and other utilities provided to the Trust.
3. Investment Advisory Agreement-Pursuant to an Investment Advisory Agreement
with TCW Funds Management, Inc. (the "Adviser"), the Trust pays the Adviser an
advisory fee, accrued weekly and payable monthly, by applying the annual rate of
0.26% to the Trust's average weekly net assets. Under the terms of the
Investment Advisory Agreement, the Trust has retained the Adviser to invest the
Trust's assets, including placing orders for the purchase and sale of portfolio
securities. The Adviser obtains and evaluates such information and advice
relating to the economy, securities markets, and specific securities as it
considers necessary or useful to continuously manage the assets of the Trust in
a manner consistent with its investment objective. In addition, the Adviser
pays the salaries of all personnel, including officers of the Trust, who are
employees of the Adviser.
4. Security Transactions and Transactions with Affiliates-The cost of purchases
and proceeds from sales/prepayments of portfolio securities, excluding short-
term investments, for the six months ended March 31, 1995 were $814,435 and
$9,758,732, respectively. Included in the aforementioned are sales of U.S.
Government securities of $1,175,768. Dean Witter Trust Company, an affiliate of
the Manager, is the Trust's transfer agent. At March 31, 1995, the Trust had
transfer agent fees and expenses payable of approximately $44,000.
5. Dividends-Subsequent to March 31, 1995 the Trust has declared the following
dividends from net investment income payable to shareholders of record:
<TABLE><CAPTION>
Declaration Amount per Record Payable
Date Share Date Date
-------------------------------------------------------------
<S> <C> <C> <C>
3/28/95 $.0475 4/07/95 4/21/95
4/25/95 $.0475 5/05/95 5/19/95
6. Shares of Beneficial Interest-Transactions in shares of beneficial interest
were as follows:
</TABLE>
<TABLE><CAPTION>
Capital
Par Value Paid in
of Excess of
Shares Shares Par Value
---------- ---------- ----------
<S> <C> <C> <C>
Balance, November 30, 1992 (Note 1) ..... 10,640 $ 106 $ 99,910
Shares issued at close of public
offering on November 30, 1992* ...... 45,000,000 450,000 421,895,000
Shares issued pursuant to an over-
allotment on the public offering on
December 21, 1992 ................... 5,000,000 50,000 46,950,000
Reclassification due to permanent
book/tax differences ................ -- -- (50,473)
---------- ---------- ----------
Balance, September 30, 1993, 1994 and
March 31, 1995 ...................... 50,010,640 $500,106 $468,894,437
========== ========= ===========
</TABLE>
[FN]
- - ------
* Net of offering costs of approximately $655,000.
7. Reverse Repurchase and Dollar Roll Agreements-Reverse repurchase agreements
and dollar rolls involve the risk that the market value of the securities the
Trust is obligated to repurchase under the agreement may decline below the
repurchase price. In the event the buyer of securities under a reverse
repurchase agreement or dollar roll files for bankruptcy or becomes insolvent,
the Trust's use of proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the Trust's obligation to repurchase the securities and the Trust's use of the
proceeds of the reverse repurchase agreement may also effectively be restricted
pending such decision. Reverse repurchase agreements are collateralized by Trust
securities with a market value in excess of the Trust's obligation under the
contract. Securities valued at $168,949,908 were pledged as collateral. At
March 31, 1995, the reverse repurchase agreements outstanding were $158,195,000
with a weighted interest rate of 6.19% maturing within 27 days. The maximum and
average daily amounts outstanding during the period were $79,382,000 and
$162,976,874, respectively. The weighted average interest rate during the
period was 5.84%.
8. Selected Quarterly Financial Data-
<TABLE><CAPTION>
Quarters Ended
3/31/95 12/31/94
---------------- ------------------
Per Per
Total* Share Total* Share
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total investment income ............ $11,679 $0.23 $12,110 $0.24
Net investment income .............. 8,374 0.17 9,132 0.18
Net realized and unrealized
gain (loss) ..................... 45,815 0.91 (18,587) (0.37)
</TABLE>
<PAGE>
<TABLE><CAPTION>
Quarters Ended
-----------------------------------------------------
9/30/94 6/30/94 3/31/94 12/31/93
-------------- ------------ ------- ---------
Per Per Per Per
Total* Share Total* Share Total* Share Total* Share
----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total investment
income ....... $13,865 $0.28 $18,033 $0.36 $13,779 $0.27 $13,807 $0.28
Net investment
income ....... 11,098 0.22 15,303 0.31 11,314 0.23 11,654 0.23
Net realized and
unrealized loss. (74,254) (1.49) (2,652) (0.05) (65,870) (1.32) (20,310) (0.41)
</TABLE>
<TABLE>
<CAPTION>
Quarters Ended
-----------------------------------------------------
9/30/93 6/30/93 3/31/93 12/31/92+
-------------- ------------ ----------- -----------
Per Per Per Per
Total* Share Total* Share Total* Share Total* Share
----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total investment
income ......... $15,773 $0.32 $13,585 $0.27 $11,647 $0.23 $1,638 $0.03
Net investment
income ........ 13,872 0.28 11,490 0.23 9,999 0.19 1,370 0.03
Net realized and
unrealized gain.. 13,239 0.26 2,154 0.04 11,099 0.22 6,258 0.13
</TABLE>
[FN]
- - ----------------
* Totals expressed in thousands.
+ For the period November 30, 1992 (commencement of operations) through
December 31, 1992.
9. Litigation-Four purported class actions have been filed in the Superior Court
for the State of California, County of Orange, against some of the Trust's
Trustees and officers, one of its underwriters, the lead representative of its
underwriters, the Adviser, the Manager and other defendants_but not against the
Trust_by certain shareholders of the Trust and other trusts for which the
defendants act in similar capacities. These plaintiffs generally allege
violations of state statutory and common law in connection with the marketing of
the Trust to customers of one of the underwriters. Damages, including punitive
damages, are sought in an unspecified amount. No defendant has yet responded to
any of these state court complaints pending an anticipated consolidation and
submission by the plaintiffs of an amended, consolidated complaint. Certain of
the defendants in these suits have indicated their intention to seek
indemnification from the Trust. The ultimate outcome of these matters is not
presently determinable, and no provision has been made in the Trust's financial
statements for the effect, if any, of such matters.
[/TABLE]
<PAGE>
<TABLE><CAPTION>
TCW/DW TERM TRUST 2002
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
For the
period November
For the six For the 30, 1992*
months ended year ended through
March 31, 1995 September 30, September 30,
(unaudited) 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of
period ............................ $ 7.86 $ 10.18 $ 9.40
-------- -------- --------
Net investment income ............... 0.35 0.99 0.73
Net realized and unrealized
gain (loss) ........................ 0.54 (2.45) 0.65
-------- -------- --------
Total from investment operations ..... 0.89 (1.46) 1.38
-------- -------- --------
Less dividends and distributions
from:
Net investment income ............. (0.39) (0.84) (0.59)
Net realized gain ................. -- (0.02) --
-------- -------- --------
Total ................................ (0.39) (0.86) (0.59)
Less offering costs charged
against capital ................... -- -- (0.01)
-------- -------- --------
Net asset value, end of period ....... $ 8.36 $ 7.86 $ 10.18
======== ======== ========
Market value, end of period .......... $ 7.25 $ 8.25 $ 10.25
======== ======== ========
Total Investment Return+ ........... (7.58)%(1) (12.19)% 8.60%(1)
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) .................. $418,145 $392,914 $509,220
Ratios to average net assets:
Operating expenses .............. 0.78%(2) 0.78% 0.77%(2)
Interest expense ................ 1.24%(2) 1.44% 0.68%(2)
Total expenses ............... 2.02%(2) 2.22% 1.45%(2)
Net investment income ........... 9.08%(2) 10.82% 9.05%(2)
Portfolio turnover rate ............ 0%++ 23% 29%(1)
</TABLE>
[FN]
- - --------------------
* Commencement of operations.
+ Total investment return is based upon the current market value on the first
day of each period reported. Dividends and distributions are assumed
to be reinvested at the prices obtained under the Trust's
reinvestment plan. Total investment return does not reflect brokerage
commissions.
++ Less than 0.50%.
(1) Not annualized.
(2) Annualized.
See Notes to Financial Statements
- - --------------------------------------------------------------------------------
The financial statements included herein have been taken from the records of the
Trust without examination by the independent accountants and accordingly, they
do not express an opinion thereon.
<PAGE>
TRUSTEES
- - -------------------------------------
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern
OFFICERS
- - -------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Thomas E. Larkin, Jr.
President
Sheldon Curtis
Vice President, Secretary and
General Counsel
Philip A. Barach
Vice President
Jeffrey E. Gundlach
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- - -------------------------------------
Dean Witter Trust Company
Harborside Financial Center--Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
- - -------------------------------------
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
MANAGER
- - -------------------------------------
Dean Witter Services Company Inc
ADVISER
- - -------------------------------------
TCW Funds Management, Inc.
<PAGE>
TCW/DW
TERM TRUST
2002
Semiannual Report
March 31, 1995
