<PAGE>
TCW/DW TERM TRUST 2000 Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS September 30, 1997
DEAR SHAREHOLDER:
For the fiscal year ended September 30, 1997, TCW/DW Term Trust 2000's net
asset value per share increased from $8.81 to $9.52. Based on this change,
and including reinvestment of dividends totaling approximately $0.59 per
share, the Trust's total return on net asset value for the fiscal year was
15.82 percent. Over the same period, the market price of the Trust's shares
on the New York Stock Exchange (NYSE) increased from $7.875 to $8.875 per
share. Based on this change, and including reinvestment of dividends, the
Trust's total return for the period was 20.80 percent. This strong investment
performance is largely attributable to the Trust's market discount to net
asset value narrowing from 10.6 percent to 6.8 percent during the fiscal year,
as well as the impressive rally in the fixed-income markets.
In response to increasing portfolio earnings, the Trust raised its monthly
dividend from $0.044 to $0.0465 per share in February 1997. The increase in
portfolio earnings during the period is largely attributable to the decline
in short-term interest rates experienced over the past two years.
THE MARKET
Propelled by reassuring inflation data, a declining federal budget deficit
and a watchful Federal Reserve Board, the fixed-income sector posted strong
returns during the year. However, some economists now doubt the market's
ability to sustain this rally, noting recent indications that the pace of
economic growth may be accelerating. Nonetheless, the Federal Reserve Board
was not expected to raise interest rates at its September meeting and indeed
the central bank did not alter its policy at that time.
Investor demand for mortgage-backed securities is strong and even though
yield spreads have tightened, the sector has retained its yield advantage
over other fixed-income securities. The Trust's investment adviser,
TCW Funds Management, Inc. (TCW), believes that mortgage-backed yield spreads
are positioned to remain relatively stable in the coming months provided the
yield on the 10 year U.S. Treasury note does not fall below six percent,
which would renew mortgage prepayment fears. Issuance of
<PAGE>
TCW/DW TERM TRUST 2000
LETTER TO THE SHAREHOLDERS, continued
collateralized mortgage obligations (CMOs) in 1997 is now in excess of $100
billion, which has helped support the mortgage-backed market as a whole.
THE PORTFOLIO
Approximately 60 percent of the Trust is invested in AAA-rated mortgage
pass-through securities or CMOs with durations, average lives or expected
maturity dates that correspond closely to the termination date of the Trust.
An additional 26 percent is invested in inverse floating rate CMOs issued by
U.S. government agencies. Inverse floaters have coupons that reset by a
multiple in a direction opposite that of a specified index. The remaining 14
percent is invested in AAA-rated municipal bonds and short-term investments.
The municipal bond holdings play an important role as the Trust seeks to
achieve its objective of returning the original $10 offering price to
shareholders at maturity. As of September 30, 1997, the Trust's degree of
leverage (the ratio of debt to assets) was 21 percent of total assets.
LOOKING AHEAD
TCW remains generally positive regarding the mortgage-backed sector's
long-term prospects. Although signs of robust economic activity have
reappeared in recent months, real interest rates remain at historically high
levels. (In the past, periods of strong bond market performance have
correlated with high real rates of interest.) The Trust's net asset and NYSE
market values will continue to fluctuate as both respond to changes in market
conditions and interest rates.
We would like to remind you that the Trustees have approved a procedure
whereby the Trust may attempt, when appropriate, to reduce or eliminate a
market value discount from net asset value by repurchasing 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. During
the fiscal year, the Trust repurchased 3,120,300 shares of common stock at a
weighted average market discount of 7.49 percent.
We appreciate your support of TCW/DW Term Trust 2000 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>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS September 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (84.6%)
U.S. GOVERNMENT AGENCIES (41.5%)
$3,159 Federal Home Loan Mortgage Corp. 1513 O++ ...................... 6.50 % 03/15/08 $3,147,812
12,528 Federal Home Loan Mortgage Corp. 1604 JD ....................... 5.347+ 11/15/08 11,771,345
17,676 Federal Home Loan Mortgage Corp. 1609 LG (PAC) ................. 5.01 + 11/15/23 15,433,788
14,145 Federal Home Loan Mortgage Corp. 1635 IB (PAC) ................. 4.367+ 12/15/08 13,256,341
17,677 Federal Home Loan Mortgage Corp. 1635 P (TAC) .................. 6.228+ 12/15/08 16,081,962
9,122 Federal Home Loan Mortgage Corp. 1649 S ........................ 7.828+ 12/15/08 7,944,532
7,243 Federal Home Loan Mortgage Corp. 1661 SB ....................... 7.192+ 01/15/09 6,018,803
16,932 Federal Home Loan Mortgage Corp. 1661 SD ....................... 2.225+ 01/15/09 10,238,329
13,492 Federal Home Loan Mortgage Corp. 1671 MB (PAC) ................. 8.794+ 02/15/24 12,681,101
13,740 Federal Home Loan Mortgage Corp. 1673 S ........................ 7.23 + 10/15/22 10,038,801
8,147 Federal Home Loan Mortgage Corp. 1680 EA (PAC)++ ............... 6.50 02/15/24 7,957,153
16,260 Federal Home Loan Mortgage Corp. 1939 C ........................ 7.00 05/15/17 16,414,407
13,997 Federal National Mortgage Assoc. 1993-170 SE ................... 7.595+ 09/25/08 12,189,972
11,763 Federal National Mortgage Assoc. 1993-188 AN (PAC)++ ........... 6.00 + 10/25/08 11,505,136
14,588 Federal National Mortgage Assoc. 1993-214 S (TAC) .............. 5.872+ 12/25/08 11,543,138
6,317 Federal National Mortgage Assoc. 1993-225 SU (PAC) ............. 6.289+ 12/25/23 5,716,876
10,027 Federal National Mortgage Assoc. 1994-17 S ..................... 7.052+ 02/25/09 9,108,592
9,414 Federal National Mortgage Assoc. 1997-41 C++ ................... 7.25 12/18/16 9,565,733
3,063 Federal National Mortgage Assoc. G1993-35 SB (PAC) ............. 10.792+ 11/25/23 2,885,557
-----------
TOTAL U.S. GOVERNMENT AGENCIES (Identified Cost $214,117,162) ..................... 193,499,378
-----------
PRIVATE ISSUES (43.1%)
17,028 CMC Securities Corp. III 1994-A6 (PAC) ......................... 6.75 02/25/24 17,139,704
14,400 CountryWide Funding Corp. 1993-10 A3 (PAC)++ ................... 6.75 01/25/24 14,494,464
22,000 CountryWide Home Loans 1997-3 A2 (PAC) ......................... 7.50 06/25/27 22,522,500
7,893 CountryWide Mortgage-Backed Securities, Inc. 1993-E A2 (PAC) ... 6.50 01/25/24 7,877,421
22,200 General Electric Capital Mortgage Services, Inc. 1994-1 A5 (TAC) 6.50 01/25/24 21,821,323
27,791 General Electric Capital Mortgage Services, Inc. 1994-6 A9 (TAC) 6.50 09/25/22 25,922,716
3,750 General Electric Capital Mortgage Services, Inc. 1994-29 A1 .... 8.30 11/25/24 3,759,333
10,956 General Electric Capital Mortgage Services, Inc. 1995-7 A1 ..... 7.50 09/25/25 11,017,601
24,793 Norwest Asset Securities Corp. 1997-6 A1 (PAC) ................. 7.50 05/25/27 25,381,834
21,901 Prudential Home Mortgage Securities 1993-34 C (PAC) ............ 7.00 08/25/23 21,946,261
22,561 Residential Funding Mortgage Securities I 1993-S43 A3 .......... 5.95 11/25/23 22,409,812
6,827 Securitized Asset Sales, Inc. 1995-6 A1 ........................ 7.00 12/25/10 6,850,382
-----------
TOTAL PRIVATE ISSUES (Identified Cost $201,909,688) .............................. 201,143,351
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Identified Cost $416,026,850) ................................................... 394,642,729
-----------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS September 30, 1997, continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE
PASS-THROUGH SECURITIES (24.6%)
$10,497 Federal Home Loan Mortgage Corp. PC Gold++ ..................... 6.00 % 02/01/09 $ 10,238,187
93,709 Federal National Mortgage Assoc.++ ............................. 5.50- 08/01/01-
6.00 02/01/09 90,238,584
13,983 Government National Mortgage Assoc. II ARM ..................... 7.375 06/20/25 14,394,011
-----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE
PASS-THROUGH SECURITIES (Identified Cost $116,707,755) ............................. 114,870,782
-----------
MUNICIPAL BONDS (17.1%)
Electric Revenue (5.6%)
5,825 Owensboro, Kentucky, Electric Light & Power Refg Ser B (AMBAC) . 0.00 01/01/02 4,834,691
Intermountain Power Agency, Utah,
3,255 Refg Ser A (AMBAC) ............................................ 0.00 07/01/01 2,756,399
22,000 Refg Ser B (AMBAC) ............................................ 0.00 07/01/01 18,630,040
-----------
26,221,130
-----------
Other Revenue (5.6%)
10,000 North Slope Boro, Alaska, Ser B (MBIA) ......................... 0.00 01/01/01 8,657,900
2,000 Maricopa County Unified High School District #04, Arizona,
Glendale Refg (AMBAC) ......................................... 0.00 07/01/01 1,699,860
4,250 Boston, Massachusetts, Refg Ser A (AMBAC) ...................... 4.30 07/01/01 4,265,853
13,650 Texas, Refg Ser A (AMBAC) ...................................... 0.00 10/01/01 11,454,124
-----------
26,077,737
-----------
Resource Recovery Revenue (1.2%)
5,620 Westchester County Industrial Development Agency, New York,
Resco Co Ser A (AMBAC) ........................................ 4.95 07/01/01 5,758,702
-----------
Transportation Facilities Revenue (2.7%)
10,000 Kentucky Turnpike Authority, Economic Development Road
Revitalization Refg (FGIC) .................................... 0.00 01/01/02 8,299,900
4,250 Harris County, Texas, Toll Road Sr Lien (AMBAC) ................ 4.45 08/15/01 4,293,520
-----------
12,593,420
-----------
Water & Sewer Revenue (2.0%)
10,855 New Jersey Wastewater Treatment, Ser A (FGIC) .................. 0.00 09/01/01 9,191,363
-----------
TOTAL MUNICIPAL BONDS (Identified Cost $77,135,008) ................................. 79,842,352
-----------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS September 30, 1997, continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
-----------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (0.5%)
REPURCHASE AGREEMENT
$2,278 The Bank of New York (dated 09/30/97; proceeds $2,278,718) (a)
(Identified Cost $2,278,386) .................................. 5.25% 10/01/97 $2,278,386
---------------
TOTAL INVESTMENTS (Identified Cost $612,147,999) (b) ..................... 126.8% 591,634,249
LIABILITIES IN EXCESS OF OTHER ASSETS .................................... (26.8) (125,210,114)
---------------
NET ASSETS ............................................................... 100.0% $466,424,135
===============
</TABLE>
- ------------
ARM Adjustable rate mortgage.
PC Participation Certificate.
PAC Planned Amortization Class.
TAC Targeted Amortization Class.
+ Inverse floater: interest 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
reverse repurchase agreements.
(a) Collateralized by $758,888 U.S. Treasury Note 6.50% due 05/31/01
valued at $788,493 and $1,519,789 U.S. Treasury Note 6.00% due
08/15/99 valued at $1,535,461.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$4,150,268 and the aggregate gross unrealized depreciation is
$24,664,018, resulting in net unrealized depreciation of
$20,513,750.
Bond Insurance:
- ---------------
AMBAC AMBAC Indemnity Corporation.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $612,147,999) ......... $591,634,249
Interest receivable ..................... 2,797,226
Deferred organizational expenses ....... 7,801
Prepaid expenses ........................ 40,506
--------------
TOTAL ASSETS .......................... 594,479,782
--------------
LIABILITIES:
Reverse repurchase agreements............ 127,204,000
Payable for:
Interest .............................. 375,574
Management fee ........................ 146,508
Shares of beneficial interest
repurchased............................ 133,888
Investment advisory fee................ 97,672
Accrued expenses ........................ 98,005
Contingencies (Note 9)................... --
--------------
TOTAL LIABILITIES ..................... 128,055,647
--------------
NET ASSETS ............................ $466,424,135
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital.......................... $476,071,815
Net unrealized depreciation ............. (20,513,750)
Accumulated undistributed net investment
income.................................. 13,995,080
Accumulated net realized loss............ (3,129,010)
--------------
NET ASSETS............................. $466,424,135
==============
NET ASSET VALUE PER SHARE,
49,010,128 shares outstanding
(unlimited shares authorized of $.01
par value).............................. $ 9.52
==============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $40,363,579
-------------
EXPENSES
Management fee ........................ 1,668,236
Investment advisory fee ............... 1,112,158
Transfer agent fees and expenses ...... 182,754
Professional fees ..................... 85,476
Shareholder reports and notices ...... 51,192
Registration fees ..................... 48,673
Insurance expenses .................... 40,872
Trustees' fees and expenses............ 32,355
Organizational expenses ............... 6,700
Other.................................. 58,020
-------------
TOTAL OPERATING EXPENSES ............ 3,286,436
Interest expense ...................... 7,801,779
-------------
TOTAL EXPENSES ...................... 11,088,215
-------------
NET INVESTMENT INCOME................ 29,275,364
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain...................... 291,013
Net change in unrealized depreciation 33,894,424
-------------
NET GAIN............................. 34,185,437
-------------
NET INCREASE .......................... $63,460,801
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 29,275,364 $ 30,565,489
Net realized gain...................................... 291,013 25,414
Net change in unrealized depreciation.................. 33,894,424 (4,041,974)
------------------ ------------------
NET INCREASE ........................................ 63,460,801 26,548,929
Dividends from net investment income................... (29,857,674) (24,403,711)
Net decrease from transactions in shares of beneficial
interest.............................................. (26,401,676) (23,878,590)
------------------ ------------------
NET INCREASE (DECREASE) ............................. 7,201,451 (21,733,372)
NET ASSETS:
Beginning of period ................................... 459,222,684 480,956,056
------------------ ------------------
END OF PERIOD
(Including undistributed net investment income of
$13,995,080 and $14,577,390, respectively)........... $466,424,135 $459,222,684
================== ==================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
FINANCIAL STATEMENTS, continued
STATEMENT OF CASH FLOWS
For the year ended September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
INCREASE (DECREASE) IN CASH:
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net investment income ................................................ $ 29,275,364
Adjustments to reconcile net investment income to net cash provided
by operating activities:
Decrease in receivables and other assets related to operations ...... 286,162
Decrease in payables related to operations ........................... (205,570)
Net amortization of discount/premium ................................. (3,336,516)
--------------
NET CASH PROVIDED BY OPERATING ACTIVITIES .......................... 26,019,440
--------------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Purchases of investments ............................................. (75,089,219)
Principal prepayments/sales of investments ........................... 121,535,780
Net sales of short-term investments .................................. 2,752,986
--------------
NET CASH PROVIDED BY INVESTING ACTIVITIES .......................... 49,199,547
--------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Net payments for shares of beneficial interest repurchased .......... (26,386,363)
Net payments for maturities of reverse repurchase agreements ........ (19,454,000)
Dividends to shareholders from net investment income ................. (29,857,674)
--------------
NET CASH USED FOR FINANCING ACTIVITIES.............................. (75,698,037)
--------------
NET DECREASE IN CASH ................................................. (479,050)
CASH BALANCE AT BEGINNING OF PERIOD .................................. 479,050
--------------
CASH BALANCE AT END OF PERIOD ........................................ $ --
==============
Cash paid during the period for interest ............................. $ 8,002,072
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS September 30, 1997
1. ORGANIZATION AND ACCOUNTING POLICIES
TCW/DW Term Trust 2000 (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as a diversified, closed-end management
investment company. The Trust's investment objective is to provide a high
level of current income and return $10 per share to shareholders on the
termination date. The Trust seeks to achieve its objective by investing in
high quality fixed-income securities. The Trust was organized as a
Massachusetts business trust June 16, 1993 and commenced operations on
November 30, 1993. The Trust will distribute substantially all of its net
assets on or about December 31, 2000 and will then terminate.
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 -- (1) 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; (2) when market
quotations are not readily available, including circumstances under which it
is determined by TCW Funds Management, Inc. (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; (3) certain
portfolio securities may be valued by an outside pricing service approved by
the Trustees. The pricing service may utilize 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 (4) short-term debt securities having a maturity date of
more than sixty days at time of purchase are valued on a mark-to-market basis
until sixty days prior to maturity and thereafter at amortized cost based on
their value on the 61st day. Short-term debt securities having a maturity
date of sixty days or less at the time of purchase are valued at amortized
cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. The Trust amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily.
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS September 30, 1997, continued
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 -- Dean Witter InterCapital Inc., an affiliate of
Dean Witter Services Company Inc. (the "Manager"), paid the organizational
expenses of the Trust in the amount of approximately $33,500 which have been
reimbursed for the full amount thereof. Such expenses have been deferred and
are being amortized on the straight-line method over a period not to exceed
five years from the commencement of operations.
2. MANAGEMENT AGREEMENT
Pursuant to a Management Agreement, the Trust pays the Manager a management
fee, accrued weekly and payable monthly, by applying the annual rate of 0.36%
to the Trust's 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, the Trust pays the Adviser an
advisory fee, accrued weekly and payable monthly, by applying the annual rate
of 0.24% to the Trust's weekly net assets.
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS September 30, 1997, continued
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 year ended September
30, 1997 were as follows:
<TABLE>
<CAPTION>
SALES/
PURCHASES PREPAYMENTS
------------- -------------
<S> <C> <C>
U.S. Government Agencies ......................... $25,819,331 $62,107,797
Private Issue Collateralized Mortgage Obligations 49,269,888 59,427,983
</TABLE>
Included in the aforementioned, for the period May 31, 1997 through September
30, 1997, are sales of Collateralized Mortgage Obligations with Morgan
Stanley & Co. Inc., an affiliate of the Manager since May 31, 1997, of
$41,715,883.
Dean Witter Trust FSB, an affiliate of the Manager, is the Trust's transfer
agent. At September 30, 1997, the Trust had transfer agent fees and expenses
payable of approximately $1,300.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL
PAID IN
PAR VALUE EXCESS OF
SHARES OF SHARES PAR VALUE
------------- ----------- --------------
<S> <C> <C> <C>
Balance, September 30, 1995.............................................. 55,201,328 $552,013 $525,800,068
Treasury shares purchased and retired (weighted average discount
12.08%)*................................................................ (3,070,900) (30,709) (23,847,881)
------------- ----------- --------------
Balance, September 30, 1996.............................................. 52,130,428 521,304 501,952,187
Treasury shares purchased and retired (weighted average discount 7.49%)* (3,120,300) (31,203) (26,370,473)
------------- ----------- --------------
Balance, September 30, 1997.............................................. 49,010,128 $490,101 $475,581,714
============= =========== ==============
</TABLE>
- ------------
* The Trustees have voted to retire the shares purchased.
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS September 30, 1997, continued
6. FEDERAL INCOME TAX STATUS
During the year ended September 30, 1997, the Trust utilized approximately
$291,000 of its net capital loss carryover. At September 30, 1997, the Trust
had a net capital loss carryover of approximately $3,129,000 which will be
available to offset future capital gains to the extent provided by
regulations.
7. REVERSE REPURCHASE AND DOLLAR ROLL AGREEMENTS
Reverse repurchase and dollar roll agreements 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 or dollar roll agreement files for
bankruptcy or becomes insolvent, the Trust's use of proceeds may be
restricted pending a determination by the other party, its trustee or
receiver, whether to enforce the Trust's obligation to repurchase the
securities.
Reverse repurchase agreements are collateralized by Trust securities with a
market value in excess of the Trust's obligation under the contract. At
September 30, 1997 securities valued at $132,681,607 were pledged as
collateral.
At September 30, 1997, the reverse repurchase agreements outstanding were
$127,204,000 with a weighted interest rate of 5.62% maturing within 56 days.
The maximum and average daily amounts outstanding during the period were
$146,658,000 and $139,401,071, respectively. The weighted average interest
rate during the period was 5.60%.
8. DIVIDENDS
The Trust declared the following dividends from net investment income:
<TABLE>
<CAPTION>
DECLARATION AMOUNT PER RECORD PAYABLE
DATE SHARE DATE DATE
---------------- -------------- --------------- ---------------
<S> <C> <C> <C>
September 23, 1997 $0.0465 October 3, 1997 October 17, 1997
October 28, 1997 $0.0465 November 7, 1997 November 21, 1997
</TABLE>
9. LITIGATION
Four purported class actions lawsuits 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
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS September 30, 1997, continued
damages, are sought in an unspecified amount. On or about October 20, 1995,
the plaintiffs filed an amended complaint consolidating these four actions.
The defendants thereafter filed answers and affirmative defenses to the
consolidated amended complaint. The defendants' answers deny all of the
material allegations of the plaintiff's complaint. In 1996, the plaintiffs
voluntarily dismissed, without prejudice, their claims against two defendants
who were independent Trustees of the Trust. In March 1997, all of the
remaining defendants in the litigation filed motions for judgment on the
pleadings, seeking dismissal of all of the claims against them. The
defendant's motions were fully briefed by all parties and were the subject of
a hearing before the Court on April 18, 1997. In July, 1997, the Court denied
the motion for judgement on the pleadings. Certain of the defendants in these
suits have asserted their right to 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.
<PAGE>
TCW/DW TERM TRUST 2000
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED SEPTEMBER 30, NOVEMBER 30, 1993*
---------------------------------- THROUGH
1997 1996 1995 SEPTEMBER 30, 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............. $ 8.81 $ 8.71 $ 7.48 $ 9.50
---------- ---------- ----------- ------------------
Net investment income............................. 0.60 0.59 0.56 0.56
Net realized and unrealized gain (loss)........... 0.66 (0.09) 1.14 (2.09)
---------- ---------- ----------- ------------------
Total from investment operations.................. 1.26 0.50 1.70 (1.53)
---------- ---------- ----------- ------------------
Less dividends from net investment income ....... (0.59) (0.46) (0.49) (0.48)
---------- ---------- ----------- ------------------
Anti-dilutive effect of acquiring treasury shares 0.04 0.06 0.02 --
---------- ---------- ----------- ------------------
Less offering costs charged against capital ..... -- -- -- (0.01)
---------- ---------- ----------- ------------------
Net asset value, end of period.................... $ 9.52 $ 8.81 $ 8.71 $ 7.48
========== ========== =========== ==================
Market value, end of period ...................... $8.875 $7.875 $ 7.50 $ 7.875
========== ========== =========== ==================
TOTAL INVESTMENT RETURN+ ......................... 20.80% 11.29% 1.87% (16.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Operating expenses................................ 0.71% 0.73% 0.76% 0.74%(2)
Interest expense ................................. 1.69% 1.66% 2.49% 1.41%(2)
Total expenses ................................... 2.40% 2.39% 3.25% 2.15%(2)
Net investment income............................. 6.33% 6.46% 7.12% 8.08%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $466,424 $459,223 $480,956 $422,478
Portfolio turnover rate .......................... 13% 31% -- ++ 48%(1)
</TABLE>
- ------------
* 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 0.5%.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF TCW/DW TERM TRUST 2000
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations, of changes in net assets, and of cash flows and the financial
highlights present fairly, in all material respects, the financial position
of TCW/DW Term Trust 2000 (the "Trust") at September 30, 1997, the results of
its operations and its cash flows for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the
financial highlights for each of the three years in the period then ended and
for the period November 30, 1993 (commencement of operations) through
September 30, 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 Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits,
which included confirmation of securities at September 30, 1997 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
November 10, 1997
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manual H. Johnson
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
Barry Fink
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 FSB
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.
ADVISE
TCW Funds Management, Inc.
TCW/DW
TERM TRUST
2000
[GRAPHIC OF TCW/DW TERM TRUST]
ANNUAL REPORT
SEPTEMBER 30, 1997
