John Hancock
Patriot Premium
DIVIDEND FUND I
ANNUAL
REPORT
9.30.02
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of Maureen R. Ford, Chairman and Chief Executive Officer, flush left
next to first paragraph.]
WELCOME
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
Fund's investments
page 6
Financial statements
page 9
Trustees & officers
page 23
For your information
page 29
Dear Fellow Shareholders,
The year 2002 has been an extremely difficult one for the stock market. A steady
stream of accounting scandals and corporate misdeeds has shaken investors' faith
in corporate America. Plus, questions about the strength of the economic rebound
and prospects for corporate earnings have hung over the financial markets, along
with increased fears about Middle East tensions and terrorism.
With all these concerns, the major stock market indexes have fallen
significantly. In the first nine months of 2002, the broad Standard & Poor's 500
Index is down 28%, the Dow Jones Industrial Average is off 23% and the
technology-laden Nasdaq Composite Index has fallen 40%. Investors in equity
mutual funds have been unable to escape the market's descent, as more than 99%
of all U.S. domestic equity funds have produced negative results in the first
nine months of 2002, according to Lipper, Inc., and the average equity fund has
lost 27%. Bonds, on the other hand, outperformed stocks and gained some ground,
as often happens when investors seek safer havens.
At such trying times as these, the impulse to flee is understandable, especially
after the negative stock market returns in 2000 and 2001. But we urge you to
stay the course and keep a well-diversified portfolio and a longer-term
investment perspective. Working with your investment professional on your
long-term plan is especially critical in turbulent times. Financial markets have
always moved in cycles, and even though the current down cycle is painful, it
comes after five straight years of 20%-plus returns between 1995 and 1999.
As discouraging as conditions may seem in the short term, history shows us that
the bad times do pass. We believe that remains the case today. The economy is
sound and the vast majority of U.S. corporations are honest institutions
striving to do their best for their shareholders. And the efforts of both the
private sector and the U.S. government should address the current issues of
corporate governance, so that corporate credibility and therefore investor
confidence are restored.
Sincerely,
/S/ MAUREEN R. FORD
Maureen R. Ford,
Chairman and Chief Executive Officer
YOUR FUND
AT A GLANCE
The Fund seeks
to provide high
current income,
consistent with
modest growth
of capital, for
holders of its
common shares
by investing in
a diversified
portfolio of
dividend-paying
preferred and
common equity
securities.
Over the last twelve months
o Preferred stocks held up relatively well amid a common-stock bear market and
an anemic economy.
o The Fund benefited from its oil and natural gas-related preferred holdings.
o Most utility commons stumbled, although the Fund's focus on basic transmission
and distribution companies helped it avoid problems.
[Bar chart with heading "John Hancock Patriot Premium Dividend Fund I". Under
the heading is a note that reads "Fund performance for the year ended September
30, 2002." The chart is scaled in increments of 2% with -10% at the bottom and
0% at the top. The first bar represents the -8.62% total return for John Hancock
Patriot Premium Dividend Fund I. A note below the chart reads "Total return for
the Fund is at net asset value with all distributions reinvested."]
Top 10 issuers
5.6% Puget Energy, Inc.
5.2% Energy East Corp.
4.3% TDS Capital Trust
4.3% Lehman Brothers Holdings, Inc.
4.1% Shaw Communications, Inc.
3.6% NSTAR
3.4% CH Energy Group, Inc.
3.4% El Paso Tennessee Pipeline Co.
3.0% Sierra Pacific Power
2.9% South Carolina Electric & Gas Co.
As a percentage of net assets plus value of preferred shares on September 30,
2002.
1
MANAGERS' REPORT
BY GREGORY K. PHELPS, FOR THE PORTFOLIO MANAGEMENT TEAM
John Hancock
Patriot Premium Dividend Fund I
Given all the economic uncertainty and stock market turmoil that have dominated
the past 12 months, preferred stocks -- which make up about two-thirds of John
Hancock Patriot Premium Dividend Fund I -- turned in reasonably good
performances for the year. Early on, the performance of preferred stocks was
boosted by falling interest rates. In the final calendar quarter of 2001, the
Federal Reserve Board continued to cut interest rates, bringing them to lows not
seen since the 1950s. Preferred stocks pay dividends, just like bonds pay
interest. Because of this dividend feature, preferred stock prices tend to rise
when interest rates fall, just as bond prices do.
"...preferred stocks continued to perform well, even as common stock prices were
collapsing."
Even though there were no further rate cuts in 2002, preferred stocks continued
to perform well, even as common stock prices were collapsing. The reason? A key
benefit of preferred stocks is that their yields are often significantly higher
than what companies pay on their bonds and common stock. Many preferred stocks
continued to yield between 7% and 9%, outstripping both the yields paid by
corporate bonds and the dividends paid by common stocks. Furthermore, increasing
numbers of investors found preferreds to be attractive alternatives to U.S.
Treasury securities, whose yields had fallen substantially amid a darkening
outlook for the economy.
UTILITY COMMON STOCKS SHORT CIRCUIT
Despite a few brief bouts of strength, utility common stocks -- the Fund's other
primary investment focus -- were bitter disappointments during the period. Much
of their poor performance stemmed from the investigation and collapse of
energy-trading company Enron and subsequent investigations of similar companies.
Questions about corporate accounting practices,
2
[A photo of Greg Phelps flush right next to first paragraph.]
accountability and ethics at these rogue companies cast a pall over the entire
utility common stock group. In the late summer, even the most "plain vanilla"
utilities that transmit and distribute electricity came under pressure, as
mutual fund managers sold their strongest utility performers in order to meet
the swell of shareholder redemptions that resulted from a weak overall stock
market environment.
FUND PERFORMANCE
For the 12 months ended September 30, 2002, John Hancock Patriot Premium
Dividend Fund I returned -8.62% at net asset value. By comparison, the average
income and preferred closed-end fund returned -4.27%, according to Lipper, Inc.
The Fund's comparatively large stake in utility common stocks -- the bulk of
which we continued to hang onto because we felt that many were unfairly painted
with the brush of problems associated with Enron and other energy trading firms
-- accounted for its underperformance relative to its peers. The Dow Jones
Utility Average, which tracks the performance of 15 electric and natural gas
utilities, returned -25.58%, and the broader stock market, as measured by the
Standard & Poor's 500 Index, returned -20.47%.
"Our emphasis on utility companies that do rather mundane things...helped us
avoid the most put-upon electric trading companies..."
HIGHER ENERGY PRICES BOOST HOLDINGS
Among our best-performing preferred stocks during the year were companies
involved in the production and distribution of oil and natural gas, particularly
Anadarko Petroleum and Devon Energy. The run-up in oil prices -- which also
helped pump up natural gas prices -- was due largely to concerns about the
escalation of tensions in the Middle East and a possible U.S. attack on Iraq,
which could disrupt oil supplies. Oil prices briefly
3
[Table at top left-hand side of page entitled "Top five industry groups(1)." The
first listing is Utilities 71%, the second is Broker services 7%, the third Oil
& gas 6%, the fourth Media 4%, and the fifth Finance 2%.]
surged above the important psychological barrier of $30 a barrel late in the
period for the first time since February 2001. Another preferred stock holding
with decent returns was Energy East, which was helped by the fact that it
yielded 8.25% -- a very attractive yield in a low interest-rate environment.
But there were some notable disappointments among our preferred stock holdings.
Our holdings in El Paso Tennessee Pipeline Co. and its wholly owned subsidiary
Coastal, came under pressure when a judge ruled that the company had manipulated
pipeline capacity during the 2001 California power crisis. We think the company
will be exonerated in its appeal to the Federal Energy Regulatory Commission.
Our holdings in Sierra Pacific also came under pressure due to what we believe
to be an unfair rate decision, which resulted in a substantial downgrade of the
company's credit quality. Despite that development, we continue to hang onto the
stock because the company has a very strong management team, and the demand for
the electricity it provides is growing much faster than most of its counterparts
across the country.
[Pie chart in middle of page with heading "Portfolio diversification(1)." The
chart is divided into three sections (from top to left): Preferred stocks 69%,
Common stocks 28% and Short-term investments & other 3%.]
BORING DOES BETTER
Our emphasis on utility companies that do rather mundane things like
transmitting and distributing electricity, mostly in regulated markets, helped
us avoid the most put-upon electric trading
4
[Table at top of page entitled "SCORECARD". The header for the left column is
"INVESTMENT" and the header for the right column is "RECENT PERFORMANCE...AND
WHAT'S BEHIND THE NUMBERS." The first listing is Anadarko Petroleum followed by
an up arrow with the phrase "Oil prices spike amid fears of Iraq war." The
second listing is Energy East followed by an up arrow with the phrase "Demand
for high-yielding stocks boosts price." The third listing is El Paso Tennessee
Pipeline Co. followed by a down arrow with the phrase "Company's role in
California power crisis questioned."]
companies such as Enron. Holdings such as NSTAR held up better than most in part
due to the favorable regulatory environment in its service area. Investors also
liked the company's reputation for paying reliable dividends: NSTAR declared its
453rd consecutive dividend in July. Other holdings that held up better than the
utility common stock group overall included companies such as CH Energy Group,
DTE Energy, KeySpan and Northeast Utilities. Their resilience was due to their
lack of energy trading operations, and their location in favorable regulatory
environments that are enjoying strong and growing demand.
"Low interest rates should continue to prompt strong demand for preferred
stocks."
OUTLOOK
Our view is that continued lackluster economic growth will preclude the need for
interest-rate hikes until well into 2003. Low interest rates should continue to
prompt strong demand for preferred stocks. As for utility common stocks, we
think that most of the trouble associated with the fallout from Enron is behind
them. In our view, utility common stocks are very attractive given their
earnings growth prospects and their low prices. Even if the economy starts to
grow faster next year, we don't think that preferred stocks and utility common
stocks -- two sectors that historically have lagged in a strong economy -- will
be left out in the cold.
This commentary reflects the views of the portfolio management team through the
end of the Fund's period discussed in this report. Of course, the team's views
are subject to change as market and other conditions warrant.
(1) As a percentage of the Fund's portfolio on 9-30-02
5
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
September 30, 2002
This schedule is divided into three main categories: preferred stocks, common
stocks and short-term investments. The stocks are further broken down by
industry group. Short-term investments, which represent the Fund's cash
position, are listed last.
SHARES ISSUER VALUE
PREFERRED STOCKS 106.27% $132,486,870
(Cost $139,824,957)
Agricultural Operations 2.33% $2,905,000
35,000 Ocean Spray Cranberries, Inc., 6.25% (R) 2,905,000
Banks -- Foreign 1.85% 2,303,320
89,000 Australia and New Zealand Banking Group Ltd.,
9.125% (Australia) 2,303,320
Broker Services 10.76% 13,417,045
62,460 Bear Stearns Cos., Inc., 5.72%, Ser F 2,654,550
102,700 Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D 4,339,075
90,400 Lehman Brothers Holdings, Inc., 5.94%, Ser C 3,891,720
90,000 Merrill Lynch & Co., Inc., 9.00%, Depositary Shares, Ser A 2,531,700
Diversified Operations 1.09% 1,355,760
48,420 Grand Metropolitan Delaware, L.P., 9.42%, Gtd Ser A 1,355,760
Finance 3.27% 4,080,000
72,000 J.P. Morgan Chase & Co., 6.625%, Depositary Shares, Ser H 3,456,000
12,000 SLM Corp., 6.97%, Ser A 624,000
Leasing Companies 1.62% 2,016,000
96,000 AMERCO, 8.50%, Ser A 2,016,000
Media 6.40% 7,976,311
200,453 Shaw Communications, Inc., 8.45%, Ser A (Canada) 4,003,046
199,361 Shaw Communications, Inc., 8.50% (Canada) 3,973,265
See notes to
financial statements.
6
SHARES ISSUER VALUE
Oil & Gas 9.84% $12,264,464
45,278 Anadarko Petroleum Corp., 5.46%, Depositary Shares 3,984,464
50,000 Devon Energy Corp., 6.49%, Ser A 4,950,000
30,000 Lasmo America Ltd., 8.15% (R) 3,330,000
Telecommunications 2.64% 3,292,537
50,850 Touch America Holdings, Inc., $6.875 3,292,537
Utilities 66.47% 82,876,433
225,000 Alabama Power Co., 5.20% 4,837,500
34,000 Baltimore Gas & Electric Co., 6.99%, Ser 1995 3,519,000
47,029 Boston Edison Co., 4.25% 3,174,457
215,000 Coastal Finance I, 8.375% 3,762,500
156,400 El Paso Tennessee Pipeline Co., 8.25%, Ser A 6,568,800
200,000 Energy East Capital Trust I, 8.25% 5,200,000
42,000 Florida Power & Light Co., 6.75%, Ser U 4,200,000
100,000 Hawaiian Electric Industries Capital Trust I, 8.36% 2,531,000
13,000 Idaho Power Co., 7.07% 1,345,500
64,200 MCN Financing II, 8.625% 1,646,730
13,500 Massachusetts Electric Co., 6.99% 1,407,375
34,500 Monongahela Power Co., 7.73%, Ser L 3,605,250
37,000 PSI Energy, Inc., 6.875% 3,634,510
25,800 Public Service Electric & Gas Co., 6.92% 2,657,400
254,000 Puget Sound Energy, Inc., 7.45%, Ser II 6,350,000
210,000 Sierra Pacific Power Co., 7.80%, Ser 1 (Class A) 4,200,000
55,000 South Carolina Electric & Gas Co., 6.52% 5,555,000
185,000 Southern Union Financing I, 9.48% 4,650,900
195,035 TDS Capital Trust I, 8.50% 4,862,223
141,400 TDS Capital Trust II, 8.04% 3,478,441
35,300 TXU US Holdings Co., $1.875, Depositary Shares, Ser A 878,970
36,000 TXU US Holdings Co., $7.98 3,783,377
10,000 Virginia Electric & Power Co., $7.05 1,027,500
COMMON STOCKS 43.44% $54,159,930
(Cost $65,875,945)
Telecommunications 0.11% 134,292
216,600 Touch America Holdings, Inc.* 134,292
Utilities 43.33% 54,025,638
150,380 Alliant Energy Corp. 2,894,815
180,000 Aquila, Inc. 738,000
140,300 CH Energy Group, Inc. 6,584,279
101,000 DTE Energy Co. 4,110,700
64,300 Dominion Resources, Inc. 3,261,939
40,000 Duke Energy Corp. 782,000
247,000 Energy East Corp. 4,893,070
126,000 KeySpan Corp. 4,221,000
44,000 NiSource, Inc. 758,120
215,000 Northeast Utilities 3,633,500
175,000 NSTAR 6,921,250
See notes to
financial statements.
7
SHARES ISSUER VALUE
Utilities (continued)
42,500 Peoples Energy Corp. $1,431,825
52,500 Progress Energy, Inc. 2,145,675
69,000 Progress Energy, Inc. (Contingent Value Obligation) 12,420
216,900 Puget Energy, Inc. 4,426,929
246,600 Sierra Pacific Resources 1,504,260
173,000 TECO Energy, Inc. 2,747,240
40,400 WPS Resources Corp. 1,431,776
164,000 Xcel Energy, Inc. 1,526,840
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
SHORT-TERM INVESTMENTS 5.12% $6,377,000
(Cost $6,377,000)
Oil & Gas 5.12%
Chevron USA, Inc., Discount Commercial Paper, 10-01-02 1.65% $6,377 6,377,000
TOTAL INVESTMENTS 154.83% $193,023,800
OTHER ASSETS AND LIABILITIES, NET (54.83%) ($68,353,453)
TOTAL NET ASSETS 100.00% $124,670,347
Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer.
* Non-income producing security.
(R) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold, normally to
qualified institutional buyers, in transactions exempt from registration.
Rule 144A securities amounted to $6,235,000 or 5.00% of net assets as of
September 30, 2002.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
See notes to
financial statements.
8
FINANCIAL STATEMENTS
ASSETS AND
LIABILITIES
September 30, 2002
This Statement
of Assets and
Liabilities is the
Fund's balance
sheet. It shows
the value of
what the Fund
owns, is due
and owes.
You'll also find
the net asset
value for each
common share.
ASSETS
Investments at value (cost $212,077,902) $193,023,800
Cash 856
Dividends receivable 547,375
Other assets 44,230
Total assets 193,616,261
LIABILITIES
Payable to affiliates 191,753
Other payables and accrued expenses 119,673
Total liabilities 311,426
Dutch Auction Rate Transferrable Securities preferred shares
Series A (DARTS), at value, unlimited number of shares of
beneficial interest authorized with no par value, 685 shares
issued, liquidation preference of $100,000 per share 68,634,488
NET ASSETS
Common shares capital paid-in 141,016,976
Accumulated net realized loss on investments (590,438)
Net unrealized depreciation of investments (19,054,102)
Accumulated net investment income 3,297,911
Net assets applicable to common shares $124,670,347
NET ASSET VALUE PER COMMON SHARE
Based on 15,017,782 shares of beneficial interest
outstanding -- unlimited number of shares
authorized with no par value $8.30
See notes to
financial statements.
9
FINANCIAL STATEMENTS
OPERATIONS
For the year ended
September 30, 2002
This Statement
of Operations
summarizes the
Fund's investment
income earned
and expenses
incurred in oper-
ating the Fund.
It also shows net
gains (losses) for
the period stated.
INVESTMENT INCOME
Dividends $14,137,069
Interest 98,904
Total investment income 14,235,973
EXPENSES
Investment management fee 1,751,001
Administration fee 207,841
DARTS auction fee 178,750
Federal excise tax 96,209
Transfer agent fee 55,255
Miscellaneous 54,980
Auditing fee 53,550
Printing 46,975
Custodian fee 39,903
Trustees' fee 10,474
Legal fee 3,334
Interest expense 457
Total expenses 2,498,729
Net investment income 11,737,244
REALIZED AND UNREALIZED LOSS
Net realized loss on investments (331,608)
Change in net unrealized appreciation
(depreciation) of investments (22,050,939)
Net realized and unrealized loss (22,382,547)
Distributions to DARTS (1,262,310)
Decrease in net assets from operations ($11,907,613)
See notes to
financial statements.
10
FINANCIAL STATEMENTS
CHANGES IN
NET ASSETS
This Statement
of Changes in
Net Assets
shows how the
value of the
Fund's net assets
has changed
since the end of
the previous
period. The dif-
ference reflects
earnings less
expenses, any
investment gains
and losses, distri-
butions paid to
shareholders,
if any, and any
increase due to
the sale of com-
mon shares.
YEAR YEAR
ENDED ENDED
9-30-01 9-30-02
INCREASE IN NET ASSETS
From operations
Net investment income $12,474,424 $11,737,244
Net realized gain (loss) 1,507,882 (331,608)
Change in net unrealized
appreciation (depreciation) (7,314,735) (22,050,939)
Distributions to DARTS (2,734,970) (1,262,310)
Increase (decrease) in net assets
resulting from operations 3,932,601 (11,907,613)
Distributions to common shareholders
From net investment income (9,705,946) (9,713,863)
From Fund share transactions -- 350,897
NET ASSETS APPLICABLE TO COMMON SHARES
Beginning of period 151,714,271 145,940,926
End of period(1) $145,940,926 $124,670,347
(1) Includes accumulated (distributions in excess of) net investment income of
($293,734) and $3,297,911, respectively.
See notes to
financial statements.
11
FINANCIAL
HIGHLIGHTS
COMMON SHARES
The Financial Highlights show how the Fund's net asset value for a share has
changed since the end of the previous period.
PERIOD ENDED 9-30-98 9-30-99 9-30-00 9-30-01 9-30-02
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $9.88 $10.85 $9.91 $10.13 $9.74
Net investment income(1) 0.87 0.83 0.85 0.83 0.78
Net realized and unrealized
gain (loss) on investments 0.99 (0.90) 0.23 (0.39) (1.49)
Distribution to DARTS (0.19) (0.18) (0.21) (0.18) (0.08)
Total from investment operations 1.67 (0.25) 0.87 0.26 (0.79)
Less distributions
to common shareholders
From net investment income (0.70) (0.66) (0.64) (0.65) (0.65)
In excess of net investment income --(2) (0.03) (0.01) -- --
(0.70) (0.69) (0.65) (0.65) (0.65)
Net asset value, end of period $10.85 $9.91 $10.13 $9.74 $8.30
Per share market value, end of period $10.19 $8.81 $8.25 $8.75 $9.15
Total return at market value(3) (%) 16.57 (7.01) 1.19 13.79 12.03
RATIOS AND SUPPLEMENTAL DATA
Net assets applicable to common shares,
end of period (in millions) $163 $148 $152 $146 $125
Ratio of expenses to average net assets(4) (%) 1.65 1.66 1.75 1.72 1.79
Ratio of net investment income
to average net assets(5) (%) 8.26 7.92 8.94 8.35 8.42
Portfolio turnover (%) 32 18 19 23 11
SENIOR SECURITIES
Total value of DARTS outstanding
(in millions) $68 $68 $68 $68 $68
Involuntary liquidation preference
per unit (in thousands) $100 $100 $100 $100 $100
Approximate market value
per unit (in thousands) $100 $100 $100 $100 $100
Asset coverage per unit (6) $330,525 $323,124 $315,176 $318,208 $280,462
(1) Based on the average of the shares outstanding.
(2) Less than $0.01 per share.
(3) Assumes dividend reinvestment.
(4) Ratios calculated on the basis of expenses applicable to the common shares
relative to the average net assets of common shares. Without the exclusion
of preferred shares, the ratio of expenses would have been 1.15%, 1.15%,
1.18%, 1.18% and 1.20%, respectively.
(5) Ratios calculated on the basis of net investment income applicable to common
shares relative to the average net assets of common shares. Without the
exclusion of preferred shares, the ratio of net investment income would have
been 5.75%, 5.52%, 6.03%, 5.72% and 5.65%, respectively.
(6) Calculated by subtracting the Fund's total liabilities from the Fund's total
assets and dividing such amount by the number of DARTS outstanding as of the
applicable 1940 Act Evaluation Date.
See notes to
financial statements.
12
NOTES TO
STATEMENTS
NOTE A
Accounting policies
John Hancock Patriot Premium Dividend Fund I (the "Fund") is a diversified
closed-end management investment company registered under the Investment Company
Act of 1940.
Significant accounting policies of the Fund are as follows:
Valuation of investments
Securities in the Fund's portfolio are valued on the basis of market quotations,
valuations provided by independent pricing services or at fair value as
determined in good faith in accordance with procedures approved by the Trustees.
Short-term debt investments maturing within 60 days are valued at amortized
cost, which approximates market value. The Fund determines the net asset value
of the common shares each business day.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are determined
on the identified cost basis.
Federal income taxes
The Fund qualifies as a "regulated investment company" by complying with the
applicable provisions of the Internal Revenue Code and will not be subject to
federal income tax on taxable income that is distributed to shareholders.
Therefore, no federal income tax provision is required. For federal income tax
purposes, the Fund has $188,602 of a capital loss carryforward available, to the
extent provided by regulations, to offset future net realized capital gains. To
the extent that such carryforward is used by the Fund, no capital gain
distributions will be made. The entire amount of loss carryforward expires
September 30, 2010. Net capital losses of $378,454 attributable to security
transactions incurred after October 31, 2001 are treated as arising on October
1, 2002, the first day of the Fund's next taxable year.
Dividends, interest and distributions
Dividend income on investment securities is recorded on the ex-dividend date or,
in the case of some foreign securities, on the date thereafter when the Fund
identifies the dividend. Interest income on investment securities is recorded on
the accrual basis. Foreign income may be subject
13
to foreign withholding taxes, which are accrued as applicable.
The Fund records distributions to shareholders from net investment income and
realized gains on the ex-dividend date. During the year ended September 30,
2002, the tax character of distributions paid was as follows: ordinary income
$10,976,173. As of September 30, 2002, the components of distributable earnings
on a tax basis included $3,164,803 of undistributed ordinary income.
Such distributions and distributable earnings on a tax basis are determined in
conformity with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. Distributions in
excess of tax basis earnings and profits, if any, are reported in the Fund's
financial statements as a return of capital.
Dutch Auction Rate Transferable Securities preferred shares Series A
The Fund issued 685 shares of Dutch Auction Rate Transferable Securities
preferred shares Series A ("DARTS") in a public offering. The underwriting
discount was recorded as a reduction of the capital of common shares.
Dividends on the DARTS, which accrue daily, are cumulative at a rate that was
established at the offering of the DARTS and has been reset every 49 days
thereafter by an auction. Dividend rates on DARTS ranged from 1.50% to 2.89%
during the year ended September 30, 2002. Accrued dividends on DARTS are
included in the value of DARTS on the Fund's statement of assets and
liabilities.
The DARTS are redeemable at the option of the Fund, at a redemption price equal
to $100,000 per share, plus accumulated and unpaid dividends on any dividend
payment date. The DARTS are also subject to mandatory redemption at a redemption
price equal to $100,000 per share, plus accumulated and unpaid dividends, if the
Fund is in default on its asset coverage requirements with respect to the DARTS.
If the dividends on the DARTS shall remain unpaid in an amount equal to two full
years' dividends, the holders of the DARTS, as a class, have the right to elect
a majority of the Board of Trustees. In general, the holders of the DARTS and
the common shareholders have equal voting rights of one vote per share, except
that the holders of the DARTS, as a class, vote to elect two members of the
Board of Trustees, and separate class votes are required on certain matters that
affect the respective interests of the DARTS and common shareholders. The DARTS
have a liquidation preference of $100,000 per share, plus accumulated and unpaid
dividends. The Fund is required to maintain certain asset coverage with respect
to the DARTS, as defined in the Fund's by-laws.
Change in financial classification for DARTS
In accordance with the provisions of EITF D-98, "Classification and Measurement
of Redeemable Securities," effective for the current period, the Fund has
reclassified its DARTS outside of permanent equity in the net assets section of
the statement of assets and liabilities. In addition, distributions to DARTS
shareholders are now classified as a component of the "Increase in net assets
resulting from operations" on the statement of operations and statement of
changes in net assets, and as a component of the "Total from investment
operations" in the financial highlights. Prior years' amounts presented have
been restated to conform to this year's presentation. This change has no impact
on the net assets applicable to common shares of the Fund.
Use of estimates
The preparation of these financial statements, in accordance with accounting
principles generally accepted in the United
14
States of America, incorporates estimates made by management in determining the
reported amount of assets, liabilities, revenues and expenses of the Fund.
Actual results could differ from these estimates.
NOTE B
Management fee and transactions with affiliates and others
The Fund has an investment management contract with John Hancock Advisers, LLC
(the "Adviser"), a wholly owned subsidiary of The Berkeley Financial Group, LLC.
Under the investment management contract, the Fund pays a monthly management fee
to the Adviser at an annual rate of 0.50% of the Fund's average weekly net
assets and the value attributable to the DARTS, plus 5.00% of the Fund's weekly
gross income. The Adviser's total fee is limited to a maximum amount equal to
1.00% annually of the Fund's average weekly net assets and the value
attributable to the DARTS. For the year ended September 30, 2002, the advisory
fee incurred did not exceed the maximum advisory fee allowed.
The Fund has an administrative agreement with the Adviser under which the
Adviser oversees the custodial, auditing, valuation, accounting, legal, stock
transfer and dividend disbursing services and maintains Fund communications with
the shareholders. The Fund pays the Adviser a monthly administration fee at an
annual rate of 0.10% of the Fund's average weekly net assets plus the value
attributable to the DARTS.
Ms. Maureen R. Ford and Mr. John M. DeCiccio are directors and/or officers of
the Adviser and/or its affiliates, as well as Trustees of the Fund. The
compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated
Trustees may elect to defer for tax purposes their receipt of this compensation
under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes
investments into other John Hancock funds, as applicable, to cover its liability
for the deferred compensation. Investments to cover the Fund's deferred
compensation liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related other asset are always equal and
are marked to market on a periodic basis to reflect any income earned by the
investment as well as any unrealized gains or losses. The Deferred Compensation
Plan investments had no impact on the operations of the Fund.
NOTE C
Fund common share transactions
This listing illustrates the reclassification of the Fund's capital accounts,
dividend reinvestments and the number of common shares outstanding at the
beginning and end of the last two periods, along with the corresponding dollar
value.
YEAR ENDED 9-30-01 YEAR ENDED 9-30-02
SHARES AMOUNT SHARES AMOUNT
Beginning of period 14,979,601 $140,818,196 14,979,601 $140,765,350
Reclassification of
capital accounts -- (52,846) -- (99,271)
Dividends reinvested -- -- 38,181 350,897
End of period 14,979,601 $140,765,350 15,017,782 $141,016,976
15
NOTE D
Investment transactions
Purchases and proceeds from sales of securities, other than short-term
securities and obligations of the U.S. government, during the year ended
September 30, 2002, aggregated $23,075,059 and $27,062,235, respectively.
The cost of investments owned on September 30, 2002, including short-term
investments, for federal income tax purposes was $212,101,287. Gross unrealized
appreciation and depreciation of investments aggregated $7,225,117 and
$26,302,604, respectively, resulting in net unrealized depreciation of
$19,077,487. The difference between book basis and tax basis net unrealized
depreciation of investments is attributable primarily to the tax deferral of
losses on wash sales.
NOTE E
Reclassification of accounts
During the year ended September 30, 2002, the Fund reclassified amounts to
reflect an increase in accumulated net realized loss on investments of
$2,731,303, an increase in accumulated net investment income of $2,830,574 and a
decrease in capital paid-in of $99,271. This represents the amount necessary to
report these balances on a tax basis, excluding certain temporary differences as
of September 30, 2002. Additional adjustments may be needed in subsequent
reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to certain differences in
the computation of distributable income and capital gains under federal tax
rules versus accounting principles generally accepted in the United States of
America. The calculation of net investment income per share in the financial
highlights excludes these adjustments.
16
AUDITORS'
REPORT
Report of
Deloitte & Touche
LLP, Independent
Auditors
To The Board of Trustees and Shareholders of
John Hancock Patriot Premium Dividend Fund I,
We have audited the accompanying statement of assets and liabilities of John
Hancock Patriot Premium Dividend Fund I (the "Fund") including the schedule of
investments, as of September 30, 2002, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at September 30, 2002, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
John Hancock Patriot Premium Dividend Fund I as of September 30, 2002, the
results of its operations 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
October 28, 2002
17
TAX
INFORMATION
Unaudited
For federal income tax purposes, the following information is furnished with
respect to the distributions of the Fund paid during its taxable year ended
September 30, 2002.
With respect to the ordinary dividends paid by the Fund for the fiscal year
ended September 30, 2002, 85.69% of the dividends qualify for the corporate
dividends-received deduction.
Shareholders will be mailed a 2002 U.S. Treasury Department Form 1099-DIV in
January 2003. This will reflect the total of all distributions that are taxable
for calendar year 2002.
18
INVESTMENT
OBJECTIVE
AND POLICY
The Fund's investment objective is to provide a high current income, consistent
with modest growth of capital, for holders of its common shares of beneficial
interest. The Fund will pursue its objective by investing in a diversified
portfolio of dividend paying preferred and common stocks.
The Fund's non-fundamental investment policy, with respect to the quality of
ratings of its portfolio investments, was changed by a vote of the Fund's
Trustees on September 13, 1994. The new policy, which became effective October
15, 1994, stipulates that preferred stocks and debt obligations in which the
Fund will invest will be rated investment-grade (at least "BBB" by S&P or "Baa"
by Moody's) at the time of investment or will be preferred stocks of issuers of
investment grade senior debt, some of which may have speculative
characteristics, or, if not rated, will be of comparable quality as determined
by the Adviser. The Fund will invest in common stocks of issuers whose senior
debt is rated investment grade or, in the case of issuers that have no rated
senior debt outstanding, whose senior debt is considered by the Adviser to be of
comparable quality. The new policy supersedes the requirement that at least 80%
of the Fund's total assets consist of preferred stocks and debt obligations
rated "A" or higher and dividend paying common stocks whose issuers have senior
debt rated "A" or higher.
On November 20, 2001, the Fund's Trustees approved the following investment
policy investment restriction change, effective December 15, 2001. Under normal
circumstances the Fund will invest at least 80% of its assets in dividend-paying
securities. The "Assets" are defined as net assets including the liquidation
preference amount of the DARTS plus borrowings for investment purposes. The Fund
will notify shareholders at least 60 days prior to any change in this 80%
investment policy.
DIVIDEND
REINVESTMENT PLAN
The Fund offers its shareholders a Dividend Reinvestment Plan (the "Plan"),
which offers the opportunity to earn compounded yields. Each holder of common
shares will automatically have all distributions of dividends and capital gains
reinvested by Mellon Investor Services, as Plan agent for the common
shareholders (the "Plan Agent"), unless an election is made to receive cash.
Holders of common shares who elect not to participate in the Plan will receive
all distributions in cash, paid by check mailed directly to the shareholder of
record (or if the common shares are held in street or other nominee name, then
to the nominee) by the Plan Agent, as dividend disbursing agent. Shareholders
whose shares are held in the name of a broker or a nominee should contact the
broker or nominee to determine whether and how they may participate in the Plan.
If the Fund declares a dividend payable either in common shares or in cash,
non-participants will receive cash and participants in the Plan will receive the
equivalent in common shares. If the market price of the common shares on the
payment date of the dividend is equal to or exceeds their net asset value as
determined on the payment date, participants will be issued common shares (out
of authorized but unissued shares) at a value equal to the higher of net asset
value or 95% of the market price. If the net asset value exceeds the market
price of the common shares at such time, or if the Board of Trustees declares a
dividend payable only in cash, the Plan Agent will, as agent for Plan
participants, buy shares in the open market, on the New York Stock Exchange or
elsewhere, for the participant's accounts. Such
19
purchases will be made promptly after the payable date for such dividend and, in
any event, prior to the next ex-dividend date after such date, except where
necessary to comply with federal securities laws. If, before the Plan Agent has
completed its purchases, the market price exceeds the net asset value of the
common shares, the average per share purchase price paid by the Plan Agent may
exceed the net asset value of the common shares, resulting in the acquisition of
fewer shares than if the dividend had been paid in shares issued by the Fund
Each participant will pay a pro rata share of brokerage commissions incurred
with respect to the Plan Agent's open market purchases in connection with the
reinvestment of dividends and distributions. In each case, the cost per share of
the shares purchased for each participant's account will be the average cost,
including brokerage commissions, of any shares purchased on the open market plus
the cost of any shares issued by the Fund. There will be no brokerage charges
with respect to common shares issued directly by the Fund. There are no other
charges to participants for reinvesting dividends or capital gain distributions,
except for certain brokerage commissions, as described above.
Participants in the Plan may withdraw from the Plan at any time by contacting
the Plan Agent by telephone, in writing or by visiting the Plan Agent's Web site
at www.melloninvestor.com. Such withdrawal will be effective immediately if
received prior to a dividend record date; otherwise, it will be effective for
all subsequent dividend record dates. When a participant withdraws from the Plan
or upon termination of the Plan, as provided below, certificates for whole
common shares credited to his or her account under the Plan will be issued and a
cash payment will be made for any fraction of a share credited to such account.
The Plan Agent maintains each shareholder's account in the Plan and furnishes
monthly written confirmations of all transactions in the accounts, including
information needed by the shareholders for personal and tax records. The Plan
Agent will hold common shares in the account of each Plan participant in
non-certificated form in the name of the participant. Proxy material relating to
the shareholder's meetings of the Fund will include those shares purchased as
well as shares held pursuant to the Plan.
The reinvestment of dividends and distributions will not relieve participants of
any federal income tax that may be payable or required to be withheld on such
dividends or distributions. Participants under the Plan will receive tax
information annually. The amount of dividend to be reported on 1099-DIV should
be (1) in the case of shares issued by the Fund, the fair market value of such
shares on the dividend payment date and (2) in the case of shares purchased by
the Plan Agent in the open market, the amount of cash used by the Plan Agent to
purchase shares in the open market, including the amount of cash allocated to
brokerage commissions paid on such purchases.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
dividend or distribution paid subsequent to written notice of the change sent to
all shareholders of the Fund at least 90 days before the record date for the
dividend or distribution. The Plan may be amended or terminated by the Plan
Agent after at least 90 days' written notice to all shareholders of the Fund.
All correspondence or additional information concerning the Plan should be
directed to the Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services,
P.O. Box 3338, South Hackensack, NJ 07606-1938 (telephone 1-800-852-0218).
20
SHAREHOLDER
COMMUNICATION
AND ASSISTANCE
If you have any questions concerning the Fund, we will be pleased to assist you.
If you hold shares in your own name and not with a brokerage firm, please
address all notices, correspondence, questions or other communications regarding
the Fund to the transfer agent at:
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Telephone 1-800-852-0218
If your shares are held with a brokerage firm, you should contact that firm,
bank or other nominee for assistance.
21
SHAREHOLDER MEETING (unaudited)
On March 7, 2002, the Annual Meeting of the Fund was held to elect six Trustees
and to ratify the actions of the Trustees in selecting independent auditors for
the Fund.
The common shareholders elected the following Trustees to serve until their
respective successors are duly elected and qualified, with the votes tabulated
as follows:
WITHHELD
FOR AUTHORITY
--------------------------------------------------------------------------------
James F. Carlin 9,112,568 144,189
William H. Cunningham 9,077,137 179,620
John P. Toolan 9,083,749 173,008
John A. Moore 9,089,895 166,862
Patti McGill Peterson 9,080,519 176,238
The preferred shareholders elected John M. DeCiccio to serve until his
respective successors are duly elected and qualified, with the votes tabulated
as follows: 463 FOR and 0 WITHHELD AUTHORITY.
The shareholders also ratified the Trustees' selection of Deloitte & Touche LLP
as the Fund's independent auditors for the fiscal year ending September 30,
2002, with the votes tabulated as follows: 9,046,941 FOR, 85,846 AGAINST and
123,969 ABSTAINING.
22
TRUSTEES
& OFFICERS
This chart provides information about the Trustees and Officers who oversee your
John Hancock Fund. Officers elected by the Trustees manage the day-to-day
operations of the Fund and execute policies formulated by the Trustees.
INDEPENDENT TRUSTEES
NUMBER OF
NAME, AGE TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE(1) BY TRUSTEE
James F. Carlin(2), Born: 1940 1988 29
Chairman and CEO, Alpha Analytical Laboratories (chemical analysis); Part Owner
and Treasurer, Lawrence Carlin Insurance Agency, Inc. (since 1995); Part Owner
and Vice President, Mone Lawrence Carlin Insurance Agency, Inc. (since 1996);
Director/Treasurer, Rizzo Associates (until 2000); Chairman and CEO, Carlin
Consolidated, Inc. (management/investments); Director/Partner, Proctor Carlin &
Co., Inc. (until 1999); Trustee, Massachusetts Health and Education Tax Exempt
Trust; Director of the following: Uno Restaurant Corp. (until 2001), Arbella
Mutual (insurance) (until 2000), HealthPlan Services, Inc. (until 1999),
Flagship Healthcare, Inc. (until 1999), Carlin Insurance Agency, Inc. (until
1999), Chairman, Massachusetts Board of Higher Education (until 1999).
William H. Cunningham, Born: 1944 1995 29
Former Chancellor, University of Texas System and former President of the
University of Texas, Austin, Texas; Chairman, IBT Technologies; Director of the
following: The University of Texas Investment Management Company (until 2000),
Hire.com (since 2000), STC Broadcasting, Inc. and Sunrise Television Corp.
(since 2000), Symtx, Inc. (since 2001), Adorno/Rogers Technology, Inc. (since
2001), Pinnacle Foods Corporation (since 2000), rateGenius (since 2000);
LaQuinta Motor Inns, Inc. (hotel management company) (until 1998),
Jefferson-Pilot Corporation (diversified life insurance company), New Century
Equity Holdings (formerly Billing Concepts) (until 2001), eCertain (until 2001),
ClassMap.com (until 2001), Agile Ventures (until 2001), LBJ Foundation (until
2000), Golfsmith International, Inc. (until 2000), Metamor Worldwide (until
2000); AskRed.com (until 2001), Southwest Airlines and Introgen; Advisory
Director, Q Investments; Advisory Director, Chase Bank (formerly Texas Commerce
Bank - Austin).
23
NUMBER OF
NAME, AGE TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE(1) BY TRUSTEE
Ronald R. Dion, Born: 1946 1998 29
Chairman and Chief Executive Officer, R.M. Bradley & Co., Inc.; Director, The
New England Council and Massachusetts Roundtable; Trustee, North Shore Medical
Center; Director, BJ's Wholesale Club, Inc. and a corporator of the Eastern
Bank; Trustee, Emmanuel College.
Charles L. Ladner(2), Born: 1938 1992 29
Chairman and Trustee, Dunwoody Village, Inc. (continuing care retirement
community); Senior Vice President and Chief Financial Officer, UGI Corporation
(Public Utility Holding Company) (retired 1998); Vice President and Director for
AmeriGas, Inc. (retired 1998); Director of AmeriGas Partners, L.P. (until 1997)
(gas distribution); Director, EnergyNorth, Inc. (until 1995); Director, Parks
and History Association (since 2001).
Patti McGill Peterson, Born: 1943 2002 29
Executive Director, Council for International Exchange of Scholars (since 1998),
Vice President, Institute of International Education (since January 1998);
Senior Fellow, Cornell Institute of Public Affairs, Cornell University (until
1997); President Emerita of Wells College and St. Lawrence University; Director,
Niagara Mohawk Power Corporation (electric utility).
John A. Moore(2), Born: 1939 2002 29
President and Chief Executive Officer, Institute for Evaluating Health Risks,
(nonprofit institution) (until 2001); Senior Scientist, Sciences International
(health research) (since 1998); Principal, Hollyhouse (consulting) (since 2000);
Director, CIIT (nonprofit research) (since 2002).
Steven Pruchansky, Born: 1944 1992 29
Chairman and Chief Executive Officer, Mast Holdings, Inc. (since 2000); Director
and President, Mast Holdings, Inc. (until 2000); Managing Director, JonJames,
LLC (real estate) (since 2001); Director, First Signature Bank & Trust Company
(until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell
Building Corp. (until 1991).
Norman H. Smith, Born: 1933 1992 29
Lieutenant General, United States Marine Corps; Deputy Chief of Staff for
Manpower and Reserve Affairs, Headquarters Marine Corps; Commanding General III
Marine Expeditionary Force/3rd Marine Division (retired 1991).
John P. Toolan(2), Born: 1930 1993 29
Director, The Smith Barney Muni Bond Funds, The Smith Barney Tax-Free Money
Funds, Inc., Vantage Money Market Funds (mutual funds), The Inefficient-Market
Fund, Inc. (closed-end investment company) and Smith Barney Trust Company of
Florida; Chairman, Smith Barney Trust Company (retired 1991); Director, Smith
Barney, Inc., Mutual Management Company and Smith Barney Advisers, Inc.
(investment advisers) (retired 1991); Senior Executive Vice President, Director
and member of the Executive Committee, Smith Barney, Harris Upham & Co.,
Incorporated (investment bankers) (until 1991).
24
INTERESTED TRUSTEES(3)
NAME, AGE NUMBER OF
POSITION(S) HELD WITH FUND TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE(1) BY TRUSTEE
John M. DeCiccio, Born: 1948 2001 60
Trustee
Executive Vice President and Chief Investment Officer, John Hancock Financial
Services, Inc.; Director, Executive Vice President and Chief Investment Officer,
John Hancock Life Insurance Company; Chairman of the Committee of Finance of
John Hancock Life Insurance Company; Director, John Hancock Subsidiaries, LLC,
Hancock Natural Resource Group, Independence Investment LLC, Independence Fixed
Income LLC, John Hancock Advisers, LLC (the "Adviser") and The Berkeley
Financial Group, LLC ("The Berkeley Group"), John Hancock Funds, LLC ("John
Hancock Funds"), Massachusetts Business Development Corporation; Director, John
Hancock Insurance Agency, Inc. ("Insurance Agency, Inc.") (until 1999) and John
Hancock Signature Services, Inc.("Signature Services") (until 1997).
Maureen R. Ford, Born: 1955 2000 60
Trustee, Chairman, President and Chief Executive Officer
Executive Vice President, John Hancock Financial Services, Inc., John Hancock
Life Insurance Company; Chairman, Director, President and Chief Executive
Officer, the Adviser and The Berkeley Group; Chairman, Director and Chief
Executive Officer, John Hancock Funds; Chairman, Director and President,
Insurance Agency, Inc.; Chairman, Director and Chief Executive Officer,
Sovereign Asset Management Corporation ("SAMCorp."); Director, Independence
Investment LLC, Independence Fixed Income LLC and Signature Services; Senior
Vice President, MassMutual Insurance Co. (until 1999); Senior Vice President,
Connecticut Mutual Insurance Co. (until 1996).
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
NAME, AGE
POSITION(S) HELD WITH FUND OFFICER
PRINCIPAL OCCUPATION(S) AND OF FUND
DIRECTORSHIPS DURING PAST 5 YEARS SINCE
William L. Braman, Born: 1953 2000
Executive Vice President and Chief Investment Officer
Executive Vice President and Chief Investment Officer, the Adviser and each of
the John Hancock funds; Director, SAMCorp., Executive Vice President and Chief
Investment Officer, Baring Asset Management, London U.K. (until 2000).
Richard A. Brown, Born: 1949 2000
Senior Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer and Treasurer, the Adviser, John
Hancock Funds, and The Berkeley Group; Second Vice President and Senior
Associate Controller, Corporate Tax Department, John Hancock Financial Services,
Inc. (until 2001).
25
Thomas H. Connors, Born: 1959 1992
Vice President and Compliance Officer
Vice President and Compliance Officer, the Adviser and each of the John Hancock
funds; Vice President, John Hancock Funds.
William H. King, Born: 1952 1992
Vice President and Treasurer
Vice President and Assistant Treasurer, the Adviser; Vice President and
Treasurer of each of the John Hancock funds; Assistant Treasurer of each of the
John Hancock funds (until 2001).
Susan S. Newton, Born: 1950 1992
Senior Vice President, Secretary and Chief Legal Officer
Senior Vice President, Secretary and Chief Legal Officer, SAMCorp., the Adviser
and each of the John Hancock funds, John Hancock Funds and The Berkeley Group;
Vice President, Signature Services (until 2000), Director, Senior Vice President
and Secretary, NM Capital.
The business address for all Trustees and Officers is 101 Huntington Avenue,
Boston, Massachusetts 02199.
The Statement of Additional Information of the Fund includes additional
information about members of the Board of Trustees of the Fund and is
available, without charge, upon request, by calling 1-800-225-5291.
(1) Each Trustee serves until resignation, retirement age or until his or her
successor is elected.
(2) Member of Audit Committee.
(3) Interested Trustees hold positions with the Fund's investment adviser,
underwriter and certain other affiliates.
26
27
28
FOR YOUR
INFORMATION
INVESTMENT ADVISER
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
The Bank of New York
One Wall Street
New York, New York 10286
TRANSFER AGENT AND DIVIDEND DISBURSER
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
TRANSFER AGENT
FOR DARTS
Bankers Trust Company
4 Albany Street
New York, New York 10005
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
STOCK SYMBOL
Listed New York Stock Exchange:
PDF
For shareholder assistance
refer to page 21
HOW TO
CONTACT US
On the Internet www.jhfunds.com
By regular mail Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
Customer service representatives 1-800-852-0218
Portfolio Commentary 1-800-344-7059
24-hour automated information 1-800-843-0090
TDD Line 1-800-231-5469
29
[A 1 1/2" x 1/2" John Hancock (Signature) logo in upper left hand corner.
A tag line below reads "JOHN HANCOCK FUNDS."]
1-800-852-0218 -------------
1-800-843-0090 PRESORTED
1-800-231-5469 (TDD) STANDARD
U. S. Postage
www.jhfunds.com PAID
MIS
-------------
P100A 9/02
11/02