<PAGE>
TCW/DW TERM TRUST 2000
LETTER TO THE SHAREHOLDERS March 31, 1997
Two World Trade Center, New York, New York 10048
DEAR SHAREHOLDER:
For the six months ended March 31, 1997, the net asset value of TCW/DW Term
Trust 2000 increased from $8.81 to $8.86 per share. Based on this change, and
assuming reinvestment of dividends totaling approximately $0.31 per share,
the Trust's total return for the period from October 1, 1996 through March
31, 1997 was 4.37 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
$8.125 per share. Based on this change, and assuming reinvestment of
dividends, the Trust's total return for the six-month period was 7.08
percent. This strong investment performance is largely attributable to the
narrowing of the Trust's market discount to net asset value from 11 percent
to 8 percent during the period.
In February, the Trust raised its monthly dividend from $0.0440 to $0.0465
per share to reflect an increase in portfolio earnings. This earnings
increase is largely attributable to the decline in short-term interest rates
over the past 18 months.
THE MARKET
In response to continuing signs of economic growth, the financial markets saw
a modest sell off of securities over the past six months. Unemployment claims
moved lower, there was a strong gain in manufacturing activity and reports of
higher retail sales indicate that consumer spending is fueling further
expansion. These strong economic data prompted the Federal Reserve Board to
tighten monetary policy by 25 basis points (0.25 percentage points) on March
25, 1997.
According to the Trust's investment adviser, TCW Funds Management, Inc.
(TCW), the recent rise in long-term interest rates reduced home mortgage
prepayment risk, which helped the mortgage-backed sector's recent
performance. The issuance of new collateralized mortgage obligations (CMOs)
is currently at a fraction of the volume generated in previous years, lending
support to mortgage yield spreads.
<PAGE>
TCW/DW TERM TRUST 2000
LETTER TO THE SHAREHOLDERS, continued
THE PORTFOLIO
Approximately 60 percent of the Trust's assets is invested in AAA-rated
mortgage pass-through securities or CMOs. 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 are 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. On
March 31, 1997, the Trust's degree of leverage (the ratio of debt to assets)
was 24 percent of total assets.
LOOKING AHEAD
TCW remains generally positive regarding the mortgage-backed sector's
long-term prospects. Although overall economic activity is still robust, 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.
Many analysts feel that a benign inflationary environment should temper the
severity of any future central bank actions.
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 period under review, the Trust purchased 1,736,300 shares of common stock
at a weighted average market discount of 8.46 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
RESULTS OF ANNUAL MEETING (unaudited)
* * *
On December 27, 1996, an annual meeting of the Trust's shareholders was held
for the purpose of voting on three separate matters, the results of which
were as follows:
(1) Election of Trustees:
Richard M. DeMartini
For...................................................... 35,096,175
Withheld ................................................ 948,481
Thomas E. Larkin, Jr.
For ..................................................... 35,099,685
Withheld ................................................ 944,971
The following Trustees were not standing for reelection at this meeting: John
C. Argue, Charles A. Fiumefreddo, John R. Haire, Dr. Manuel H. Johnson, Michael
E. Nugent, John L. Schroeder and Marc I. Stern.
(2) Continuance of the Currently Effective Investment Advisory Agreement
between the Trust and TCW Funds Management, Inc.:
For...................................................... 32,383,810
Against ................................................. 2,053,639
Abstain ................................................. 1,607,207
(3) Ratification of Price Waterhouse LLP as Independent Accountants:
For ..................................................... 33,805,709
Against ................................................. 1,199,885
Abstain ................................................. 1,039,062
In addition, a shareholder proposal to amend the Trust's Declaration of Trust
to require each Trustee, within 30 days of election, to become a shareholder
of the Trust failed to obtain the necessary quorum of a majority of shares
outstanding and entitled to vote at the meeting. Although no quorum was
obtained, the following represents the total of the shares whose votes
returned to the Trust prior to the meeting.
PERCENTAGE OF
VOTE NO. OF SHARES OUTSTANDING SHARES
-------- ------------- ------------------
For 7,130,886 13.74%
Against 14,439,181 27.82%
Abstain 1,583,802 3.05%
<PAGE>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS March 31, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (85.2%)
U.S. GOVERNMENT AGENCIES (41.1%)
$ 8,035 Federal Home Loan Mortgage Corp. 1513 O++ ....................... 6.50 % 03/15/08 $ 7,727,636
13,574 Federal Home Loan Mortgage Corp. 1604 JD ........................ 5.909+ 11/15/08 11,751,883
18,146 Federal Home Loan Mortgage Corp. 1609 LG (PAC) .................. 5.416+ 11/15/23 13,347,486
15,515 Federal Home Loan Mortgage Corp. 1635 IB (PAC) .................. 5.159+ 12/15/08 13,373,831
17,853 Federal Home Loan Mortgage Corp. 1635 P (TAC) ................... 6.642+ 12/15/08 14,341,914
9,122 Federal Home Loan Mortgage Corp. 1649 S ......................... 7.971+ 12/15/08 7,234,757
26,140 Federal Home Loan Mortgage Corp. 1650 LB (PAC)++ ................ 6.50 06/15/22 23,964,230
7,243 Federal Home Loan Mortgage Corp. 1661 SB ........................ 7.406+ 01/15/09 5,237,886
16,932 Federal Home Loan Mortgage Corp. 1661 SD ........................ 3.337+ 01/15/09 9,153,677
13,492 Federal Home Loan Mortgage Corp. 1671 MB (PAC) .................. 9.45 + 02/15/24 10,388,742
13,740 Federal Home Loan Mortgage Corp. 1673 S ......................... 7.456+ 10/15/22 8,999,773
8,737 Federal Home Loan Mortgage Corp. 1680 EA (PAC)++ ................ 6.50 02/15/24 8,217,936
13,997 Federal National Mortgage Assoc. 1993-170 SE .................... 7.832+ 09/25/08 10,873,461
11,763 Federal National Mortgage Assoc. 1993-188 AN (PAC)++ ............ 6.00 + 10/25/08 10,946,418
14,588 Federal National Mortgage Assoc. 1993-214 S (TAC) ............... 6.054+ 12/25/08 10,006,679
7,103 Federal National Mortgage Assoc. 1993-225 SU (PAC) .............. 6.546+ 12/25/23 6,321,966
10,027 Federal National Mortgage Assoc. 1994-17 S ...................... 7.133+ 02/25/09 7,807,336
3,982 Federal National Mortgage Assoc. G1993-35 SB (PAC) .............. 10.937+ 11/25/23 3,683,512
--------------
TOTAL U.S. GOVERNMENT AGENCIES (Identified Cost $222,827,066).................... 183,379,123
--------------
PRIVATE ISSUES (44.1%)
17,450 CMC Securities Corp. II 1993-E2 E2H (PAC) ....................... 7.00 10/25/23 16,937,319
17,028 CMC Securities Corp. III 1994-A6 (PAC) .......................... 6.75 02/25/24 16,565,009
14,400 CountryWide Funding Corp. 1993-10 A3 (PAC)++ ................... 6.75 01/25/24 14,008,464
7,893 CountryWide Mortgage-Backed Securities, Inc. 1993-E A2 (PAC) ... 6.50 01/25/24 7,781,117
22,885 General Electric Capital Mortgage Services, Inc. 1994-1 A5 (TAC) 6.50 01/25/24 21,692,118
26,909 General Electric Capital Mortgage Services, Inc. 1994-6 A9 (TAC) 6.50 09/25/22 23,082,785
6,614 General Electric Capital Mortgage Services, Inc. 1994-29 A1 ..... 8.30 11/25/24 6,625,680
13,561 General Electric Capital Mortgage Services, Inc. 1995-7 A1 ..... 7.50 09/25/25 13,541,760
24,031 Prudential Home Mortgage Securities 1993-34 C (PAC) ............. 7.00 08/25/23 23,811,677
25,000 Prudential Home Mortgage Securities 1993-47 A3 (PAC) ............ 6.75 12/25/23 22,863,093
22,561 Residential Funding Mortgage Securities I 1993-S43 A3 .......... 5.95 11/25/23 22,078,447
8,234 Securitized Asset Sales, Inc. 1995-6 A1 ........................ 7.00 12/25/10 8,177,730
--------------
TOTAL PRIVATE ISSUES (Identified Cost $205,465,105)........................... 197,165,199
--------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Identified Cost $428,292,171)........................................ 380,544,322
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS March 31, 1997 (unaudited) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE
PASS-THROUGH SECURITIES (27.2%)
$ 11,180 Federal Home Loan Mortgage Corp. PC Gold++ ...................... 6.00 % 02/01/09 $ 10,523,605
100,700 Federal National Mortgage Assoc.++ .............................. 5.50- 08/01/01-
6.00 02/01/09 93,728,798
16,845 Government National Mortgage Assoc. II ARM ...................... 7.125 06/20/25 17,179,722
--------------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE
PASS-THROUGH SECURITIES (Identified Cost $127,170,672)......................... 121,432,125
--------------
MUNICIPAL BONDS (17.3%)
Electric Revenue (5.7%)
5,825 Owensboro, Kentucky, Electric Light & Power Refg Ser B (AMBAC) .. 0.00 01/01/02 4,639,146
Intermountain Power Agency, Utah,
3,255 Refg Ser A (AMBAC) ............................................. 0.00 07/01/01 2,655,234
22,000 Refg Ser B (AMBAC) ............................................. 0.00 07/01/01 17,946,280
--------------
25,240,660
--------------
Other Revenue (5.6%)
10,000 North Slope Boro, Alaska, Ser B (MBIA) .......................... 0.00 01/01/01 8,339,900
2,000 Maricopa County Unified High School District #04, Arizona,
Glendale Refg (AMBAC) .......................................... 0.00 07/01/01 1,638,260
4,250 Boston, Massachusetts, Refg Ser A (AMBAC) ....................... 4.30 07/01/01 4,173,372
13,650 Texas, Refg Ser A (AMBAC) ....................................... 0.00 10/01/01 11,002,173
--------------
25,153,705
--------------
Resource Recovery Revenue (1.3%)
5,620 Westchester County Industrial Development Agency, New York,
Resco Co Ser A (AMBAC) ......................................... 4.95 07/01/01 5,655,968
--------------
Transportation Facilities Revenue (2.7%)
10,000 Kentucky Turnpike Authority, Economic Development Road
Revitalization Refg (FGIC) ..................................... 0.00 01/01/02 7,964,200
4,250 Harris County, Texas, Toll Road Sr Lien (AMBAC) ................. 4.45 08/15/01 4,208,563
--------------
12,172,763
--------------
Water & Sewer Revenue (2.0%)
10,855 New Jersey Wastewater Treatment, Ser A (FGIC) ................... 0.00 09/01/01 8,848,996
--------------
TOTAL MUNICIPAL BONDS (Identified Cost $75,629,603).......................... 77,072,092
--------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
PORTFOLIO OF INVESTMENTS March 31, 1997 (unaudited) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (1.1%)
REPURCHASE AGREEMENT
$ 4,943 The Bank of New York (dated 03/31/97; proceeds $4,943,495;
collateralized by $5,075,651 Federal Home Loan Banks 6.04% due
08/31/98 valued at $5,041,612)(Identified Cost $4,942,757) ... 5.375% 04/01/97 $ 4,942,757
--------------
TOTAL INVESTMENTS (Identified Cost $636,035,203)(a) ............. 130.8% 583,991,296
LIABILITIES IN EXCESS OF OTHER ASSETS ........................... (30.8) (137,563,680)
-------- ---------------
NET ASSETS ...................................................... 100.0% $446,427,616
======== ===============
</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) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$1,635,625 and the aggregate gross unrealized depreciation is
$53,679,532, resulting in net unrealized depreciation of
$52,043,907.
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
March 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $636,035,203)........... $583,991,296
Interest receivable....................... 2,946,345
Deferred organizational expenses.......... 11,160
Prepaid expenses ......................... 46,111
------------
TOTAL ASSETS............................ 586,994,912
------------
LIABILITIES:
Reverse repurchase agreements............. 139,316,000
Payable for:
Shares of beneficial interest
repurchased............................. 538,825
Interest................................. 398,195
Management fee........................... 139,596
Investment advisory fee.................. 93,064
Accrued expenses ......................... 81,616
Contingencies (Note 9) ................... --
------------
TOTAL LIABILITIES....................... 140,567,296
------------
NET ASSETS:
Paid-in-capital........................... 488,056,047
Net unrealized depreciation............... (52,043,907)
Accumulated undistributed net investment
income.................................. 13,815,098
Accumulated net realized loss............. (3,399,622)
------------
NET ASSETS.............................. $446,427,616
============
NET ASSET VALUE PER SHARE,
50,394,128 shares outstanding (unlimited
shares authorized of $.01 par value).... $ 8.86
============
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended March 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME....................... $20,755,878
-----------
EXPENSES
Management fee........................ 839,245
Investment advisory fee............... 559,497
Transfer agent fees and expenses ..... 111,869
Professional fees..................... 43,474
Registration fees..................... 24,374
Insurance expenses.................... 21,876
Shareholder reports and notices ...... 19,709
Trustees' fees and expenses........... 16,767
Custodian fees........................ 14,270
Service fees.......................... 11,576
Organizational expenses............... 3,342
Other................................. 818
-----------
TOTAL OPERATING EXPENSES............ 1,666,817
Interest Expense...................... 3,891,916
-----------
TOTAL EXPENSES ..................... 5,558,733
-----------
NET INVESTMENT INCOME............... 15,197,145
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain..................... 20,401
Net change in unrealized
depreciation......................... 2,364,267
-----------
NET GAIN ........................... 2,384,668
-----------
NET INCREASE.......................... $17,581,813
===========
</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 SIX
MONTHS ENDED FOR THE YEAR
MARCH 31, ENDED
1997 SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 15,197,145 $ 30,565,489
Net realized gain...................................... 20,401 25,414
Net change in unrealized depreciation.................. 2,364,267 (4,041,974)
------------ ------------
NET INCREASE......................................... 17,581,813 26,548,929
Dividends from net investment income................... (15,959,437) (24,403,711)
Net decrease from transactions in shares of beneficial
interest.............................................. (14,417,444) (23,878,590)
------------ ------------
NET DECREASE......................................... (12,795,068) (21,733,372)
NET ASSETS:
Beginning of period.................................... 459,222,684 480,956,056
------------ ------------
END OF PERIOD
(Including undistributed net investment income of
$13,815,098 and $14,577,390, respectively)........... $446,427,616 $459,222,684
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
FINANCIAL STATEMENTS, continued
STATEMENT OF CASH FLOWS
For the six months ended March 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
INCREASE (DECREASE) IN CASH:
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net investment income ................................................ $ 15,197,145
Adjustments to reconcile net investment income to net cash provided
by operating activities:
Decrease in receivables and other assets related to operations ...... 128,079
Decrease in payables related to operations ........................... (210,858)
Net amortization of discount/premium ................................. (1,737,786)
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES .......................... 13,376,580
------------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Purchase of investments .............................................. (856,154)
Principal prepayments/sales of investments ........................... 24,231,665
Net sales of short-term investments .................................. 67,490
------------
NET CASH PROVIDED BY INVESTING ACTIVITIES .......................... 23,443,001
------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Net payments for shares of beneficial interest repurchased .......... (13,997,194)
Net payments for maturities of reverse repurchase agreements ........ (7,342,000)
Dividends to shareholders from net investment income ................. (15,959,437)
------------
NET CASH USED FOR FINANCING ACTIVITIES ............................. (37,298,631)
------------
NET DECREASE IN CASH ................................................. (479,050)
CASH AT BEGINNING OF PERIOD .......................................... 479,050
------------
CASH BALANCE AT END OF PERIOD ........................................ $ --
============
Cash paid during the period for interest ............................. $ 4,069,588
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS March 31, 1997 (unaudited)
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 March 31, 1997 (unaudited) 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 March 31, 1997 (unaudited) 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 six months ended March
31, 1997 were as follows:
SALES/
PURCHASES PREPAYMENTS
--------- -----------
U.S. Government Agencies ......................... $ -- $16,210,245
Private Issue Collateralized Mortgage Obligations 856,154 8,021,420
Dean Witter Trust Company, an affiliate of the Manager, is the Trust's
transfer agent. At March 31, 1997, the Trust had transfer agent fees and
expenses payable of approximately $22,900.
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
8.46%)*................................................................. (1,736,300) (17,363) (14,400,081)
----------- --------- -------------
Balance, March 31, 1997.................................................. 50,394,128 $503,941 $487,552,106
=========== ========= =============
</TABLE>
- --------------
* The Trustees have voted to retire the shares purchased.
6. FEDERAL INCOME TAX STATUS
At September 30, 1996, the Trust had a net capital loss carryover of
approximately $3,420,000 to offset future capital gains to the extent
provided by regulations.
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS March 31, 1997 (unaudited) continued
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 March
31, 1997 securities valued at $142,582,511 were pledged as collateral.
At March 31, 1997, the reverse repurchase agreements outstanding were
$139,316,000 with a weighted interest rate of 5.47% maturing within 43 days.
The maximum and average daily amounts outstanding during the period were
$146,658,000 and $141,656,659, respectively. The weighted average interest
rate during the period was 5.43%.
8. DIVIDENDS
The Trust declared the following dividends from net investment income:
DECLARATION AMOUNT PER RECORD PAYABLE
DATE SHARE DATE DATE
------------ ---------- ------ -------
March 25, 1997 $0.0465 April 4, 1997 April 18, 1997
April 29, 1997 $0.0465 May 9, 1997 May 23, 1997
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 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 plaintiffs' complaint. In
1996, the plaintiffs voluntarily dismissed, without prejudice, their claims
against two defendants who were independent Trustees of the Trust. In March
<PAGE>
TCW/DW TERM TRUST 2000
NOTES TO FINANCIAL STATEMENTS March 31, 1997 (unaudited) continued
1997, all of the remaining defendants in the litigation filed motions for
judgment on the pleadings, seeking dismissal of all of the claims asserted
against them. The defendants' motions were fully briefed by all parties and
were the subject of a hearing before the Court on April 18, 1997. As of May
6, 1997, the motions were still under submission with the Court and no ruling
had yet been entered in connection with those motions. 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 YEAR FOR THE PERIOD
FOR THE SIX FOR THE YEAR ENDED NOVEMBER 30, 1993*
MONTHS ENDED ENDED SEPTEMBER 30, THROUGH
MARCH 31, 1997 SEPTEMBER 30, 1996 1995++++ SEPTEMBER 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<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............................. 0.30 0.59 0.56 0.56
Net realized and unrealized gain (loss)........... 0.03 (0.09) 1.14 (2.09)
------ ------ ------ ------
Total from investment operations.................. 0.33 0.50 1.70 (1.53)
------ ------ ------ ------
Less dividends from net investment income ....... (0.31) (0.46) (0.49) (0.48)
------ ------ ------ ------
Anti-dilutive effect of acquiring treasury shares 0.03 0.06 0.02 -
------ ------ ------ ------
Less offering costs charged against capital ..... - - - (0.01)
------ ------ ------ ------
Net asset value, end of period.................... $ 8.86 $ 8.81 $ 8.71 $7.48
====== ====== ====== ======
Market value, end of period....................... $8.125 $7.875 $ 7.50 $7.875
====== ====== ====== ======
TOTAL INVESTMENT RETURN+.......................... 7.08%(1) 11.29% 1.87% (16.87)%(1)
RATIOS TO AVERAGE NET ASSETS:
Operating expenses................................ 0.72%(2) 0.73% 0.76% 0.74%(2)
Interest expense.................................. 1.67%(2) 1.66% 2.49% 1.41%(2)
Total expenses.................................... 2.39%(2) 2.39% 3.25% 2.15%(2)
Net investment income............................. 6.54%(2) 6.46% 7.12% 8.08%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands........... $446,428 $459,223 $480,956 $422,478
Portfolio turnover rate........................... -%(1)++ 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%.
++++ Restated for comparative purposes.
(1) Not annualized.
(2) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc L. 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 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.
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.
TCW/DW
TERM TRUST
2000
SEMIANNUAL REPORT
MARCH 31, 1997
