ITEM 1. REPORT TO STOCKHOLDERS.
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John Hancock
Patriot
Premium
DIVIDEND FUND I
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Annual
Report
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9.30.03
[LOGO] John Hancock
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Table of contents
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Your fund at a glance
page 1
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Managers' report
page 2
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Fund's investments
page 6
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Financial statements
page 9
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Trustees & officers
page 22
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For your information
page 29
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[A photo of Maureen Ford Goldfarb, Chairman and Chief Executive Officer, flush
left next to first paragraph.]
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Dear Fellow Shareholders,
The stock market has made a strong recovery in 2003. Historically low interest
rates, improving corporate earnings and government stimulus in the form of tax
cuts gave investors hope that the economy would soon begin to strengthen. The
markets move up began in April and the breadth of the rally was enormous. As a
result, the major indexes were able to wipe out their first-quarter losses and
post solid gains for the first nine months of the year. With technology leading
the way, the tech-heavy Nasdaq Composite Index rose 33.80% through September,
while the Dow Jones Industrial Average was up 13.18% and the Standard & Poors
500 Index returned 14.71%. With falling interest rates, bonds also did well,
although they reversed course in July and August. High yield bonds led the pack,
returning 21.77% through September, as measured by the Lehman Brothers High
Yield Index.
In other news, we are pleased to inform you that on September 28, 2003, the
Boards of Directors of Canada-based Manulife Financial Corporation and
Boston-based John Hancock Financial Services, Inc., the parent company of John
Hancock Funds, unanimously voted to merge the two companies.
Please be assured that the completion of the merger - anticipated to occur in
the first half of 2004 - will have no effect on your investment in our John
Hancock mutual funds. Your funds adviser and board of trustees will remain the
same, as will your relationship with your financial adviser.
The merger is subject to customary closing conditions, including receipt of
required regulatory approvals and approval by John Hancock stockholders. If you
only own shares in a John Hancock mutual fund, you are not affected and will not
receive a proxy.
Additional information on this transaction is available on our Web site:
www.jhfunds.com. If you have questions about the merger, you may also call
1-800-732-5543. Separately, for information about your investments in John
Hancock mutual funds, please contact your financial adviser or our Customer
Service representatives at 1-800-225-5291.
Sincerely,
/s/Maureen Ford Goldfarb
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Maureen Ford Goldfarb,
Chairman and Chief Executive Officer
This commentary reflects the chairmans views as of September 30, 2003. They are
subject to change at any time.
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YOUR FUND
AT A GLANCE
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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
[] Preferred stocks performed well as interest rates fell and Congress enacted a
dividend tax cut.
[] Utility common stocks rallied strongly.
[] The Fund benefited from tax-advantaged dividend-paying preferred and common
stocks.
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[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, 2003." The chart is scaled in increments of 5% with 0% at the bottom and 20%
at the top. The first bar represents the 14.60% total return for John Hancock
Patriot Premium Dividend Fund I. A note below the chart reads "The total return
for the Fund is at net asset value with all distributions reinvested."]
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Top 10 issuers
7.3% NSTAR
5.4% Energy East Corp.
5.0% Puget Energy, Inc.
4.9% Shaw Communications, Inc.
4.7% Lehman Brothers Holdings, Inc.
3.1% CH Energy Group, Inc.
3.0% El Paso Tennessee Pipeline Co.
2.8% South Carolina Electric & Gas Co.
2.7% Alabama Power Co.
2.7% Sierra Pacific Power Co.
As a percentage of net assets plus value of preferred shares on September 30,
2003.
1
BY GREGORY K. PHELPS AND MARK T. MALONEY FOR THE PORTFOLIO MANAGEMENT TEAM
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MANAGERS'
REPORT
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John Hancock
Patriot Premium
Dividend Fund I
Preferred stocks performed well amid mostly favorable conditions during the
12-month period ended September 30, 2003. Much of what was behind the preferred
stock rally was action by the Federal Reserve Board, which lowered interest
rates on two separate occasions during the year. Also boosting preferred stocks
was demand from income-seeking individual investors and income-oriented mutual
funds looking for significantly higher yields than what companies paid on their
bonds and common stocks. The yields on many preferred stocks - which generally
ranged from 6% to 7% - continued to outstrip by a fairly wide margin the yields
available on Treasury and corporate bonds, as well as the dividends paid on
common stocks. Demand also strengthened in advance of, and in response to,
President Bushs dividend tax-cut package, which greatly reduced the taxes that
individuals pay on many stock dividends. A dramatic rise in interest rates and
bond yields in the summer briefly tempered an otherwise favorable backdrop for
fixed-income-oriented investments, including preferreds. But they regained some
of their footing by the final month of the period when weaker-than-expected
economic reports helped to cool inflation concerns.
"Preferred stocks performed well amid mostly favorable conditions during the
12-month period ended September 30, 2003."
Utility common stocks - the Funds other area of emphasis - performed even better
than preferreds, buoyed by a combination of utility companies ability to clean
up their balance sheets and improve corporate earnings, and strong demand from
investors seeking tax-advantaged dividend-paying stocks. Even the August
electricity blackout that plagued cities from New York to Cleveland did not dim
investors enthusiasm for the group. In fact, the blackout helped underscore the
need for better,
2
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[Photos of Greg Phelps and Mark Maloney]
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expensive high-voltage transmission and distribution systems, which would be
fostered by state regulatory bodies granting the utilities higher allowable
rates of return.
FUND PERFORMANCE
For the 12 months ended September 30, 2003, John Hancock Patriot Premium
Dividend Fund I returned 14.60% at net asset value. Over the same period, the
average income and preferred stock closed-end fund returned 21.10%, according to
Lipper, Inc. The Funds lag stemmed primarily from our focus on high-quality
investments; lower-quality junk names soared during the year in response to
better-than-expected corporate earnings, fewer corporate defaults and a
reduction in the rate of corporate credit downgrades. Meanwhile, the Standard &
Poors 500 Index, a broad measure of the overall stock market, returned 24.37%
and the Dow Jones Utility Average, which tracks the performance of 15 electric
and natural gas utilities, returned 21.95%.
OIL AND GAS SHINES
Preferred stocks paying tax-advantaged dividends were some of the Funds best
performers during the period. In particular, some of our best-performing and
largest holdings in the category were oil and natural gas companies such as
Anadarko Petroleum and Devon Energy which, along with strong investor demand,
were helped by relatively high energy prices and favorable energy supply/demand
conditions. In the electric utility segment of the tax-advantaged preferred
group, our winners included holdings such as Boston Edison and Great Plains
Energy. They got an added boost from their call protection, meaning they had
some measure of protection against being redeemed by their issuers before
maturity. In the financial segment, our winners included J.P. Morgan Chase,
which also benefited from an increase in the growth of its private banking
business, as well as an increased market share in stock and bond underwriting.
Our holdings in Bear Stearns also posted good gains, primarily due to its
ability to avoid scandals and produce financial results that met or exceeded
expectations.
"Preferred stocks paying tax-advantaged dividends were some of the Funds best
performers during the period."
3
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[Table at top left-hand side of page entitled "Top five industry groups1." The
first listing is Utilities 68%, the second is Broker services 8%, the third
Banks-United States 5%, the fourth Media 5%, and the fifth Oil & gas 5%.]
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In the utility common stock portion of the Fund, our best performers included
Alliant Energy, Northeast Utilities and Dominion Resources. Alliant benefited
from its back-to-basics approach and improved balance sheet. Dominion was helped
by its increasingly valued oil and gas reserves and natural gas pipeline and
storage assets. Investors rewarded Northeast in large measure because of its
above-average dividend growth and its attractive service area, which boasts
higher-than-average growth in electricity usage.
In contrast, our common stock holdings in Aquila Inc. proved disappointing.
Investors punished the stock because the company made an ill-timed foray into
energy/merchant trading, which forced it to take write-downs and reduce
dividends. That said, we believe that the companys efforts to return to its
regulated electric and gas roots and reduce debt will help to restore its
financial health over time.
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[Pie chart in middle of page with heading "Portfolio diversification1" The chart
is divided into three sections (from top to left): Preferred stocks 64%, Common
stocks 29% and Short-term investments 7%.]
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OUTLOOK
For the balance of 2003, we remain optimistic about the outlook for preferred
and utility common stocks. Much of our optimism stems from our macroeconomic
outlook, which calls for a continually sluggish economy coupled with sustained
low interest rates. This could continue to prompt strong demand for relatively
high-yielding preferred and utility common stocks. Were also heartened by the
fact that dividend tax relief could help boost demand for many stocks that pay
high dividends, not only in the short-term but also over the next decade or so,
as more aging Americans increasingly seek out income-oriented investment
options. Utility common stocks have other
4
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[Table at top of page entitled "SCORECARD". The header for the left column is
"INVESTMENT" and the header for the right column is "PERIOD'S PERFORMANCE...AND
WHAT'S BEHIND THE NUMBERS." The first listing is Northeast Utilities followed by
an up arrow with the phrase "Strong demand for tax-advantage stocks." The second
listing is J.P. Morgan Chase followed by an up arrow with the phrase "Uptick in
high-net-worth clients/security underwriting." The third listing is Aquila, Inc.
followed by a down arrow with the phrase "Reduction in dividend/credit
ratings."]
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factors going for them as well, including the potential for more stable credit
ratings, attractive valuations and the possible elimination of an anachronistic
law limiting utility mergers.
This commentary reflects the views of the portfolio management team through the
end of the Funds period discussed in this report. The managers statements
reflect their own opinions. As such, they are in no way guarantees of future
events, and are not intended to be used as investment advice or a recommendation
regarding any specific security. They are also subject to change at any time as
market and other conditions warrant.
The Fund normally will invest more than 65% of its managed assets in securities
of companies in the utilities industry. Such an investment concentration makes
the Fund more susceptible than a broader diversified fund to factors adversely
affecting the utilities industry. Sector investing is subject to greater risks
than the market as a whole.
1 As a percentage of the Funds portfolio on September 30, 2003.
5
FINANCIAL STATEMENTS
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FUND'S
INVESTMENTS
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Securities owned
by the Fund on
September 30, 2003
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 Funds cash position,
are listed last.
SHARES ISSUER, DESCRIPTION VALUE
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PREFERRED STOCKS 97.51% $130,298,630
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(Cost $134,394,430)
Agricultural Operations 1.96% 2,625,000
35,000 Ocean Spray Cranberries, Inc., 6.25%, Ser A (R) 2,625,000
Banks - United States 7.53% 10,058,252
45,000 HSBC USA, Inc., $2.8575 2,333,250
72,000 J.P. Morgan Chase & Co., 6.625%, Ser H 3,924,000
50,000 J.P. Morgan Chase Capital XI, 5.875% 1,186,000
111,800 Royal Bank of Scotland Group Plc, 5.75%, Ser B
(United Kingdom) 2,615,002
Broker Services 11.39% 15,223,922
62,460 Bear Stearns Cos., Inc. (The), 5.72%, Ser F 3,229,182
102,700 Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D 5,032,300
90,400 Lehman Brothers Holdings, Inc., 5.94%,
Depositary Shares, Ser C 4,483,840
90,000 Merrill Lynch & Co., Inc., 9.00%, Depositary Shares,
Ser A 2,478,600
Diversified Operations 0.98% 1,309,761
48,420 Grand Metropolitan Delaware, L.P., 9.42%, Gtd Ser A 1,309,761
Finance 0.52% 693,000
12,000 SLM Corp., 6.97%, Ser A 693,000
Leasing Companies 1.40% 1,872,000
96,000 AMERCO, 8.50%, Ser A 1,872,000
Media 7.47% 9,981,351
200,453 Shaw Communications, Inc., 8.45%, Ser A (Canada) 5,003,307
199,361 Shaw Communications, Inc., 8.50% (Canada) 4,978,044
Oil & Gas 7.14% 9,537,244
45,278 Anadarko Petroleum Corp., 5.46%,
Depositary Shares, Ser B 4,437,244
50,000 Devon Energy Corp., 6.49%, Ser A 5,100,000
Telecommunications 1.10% 1,474,650
50,850 Touch America Holdings, Inc., $6.875 1,474,650
See notes to
financial statements.
6
FINANCIAL STATEMENTS
SHARES ISSUER, DESCRIPTION VALUE
Utilities 58.02% $77,523,450
225,000 Alabama Power Co., 5.20% 5,523,750
34,000 Baltimore Gas & Electric Co., 6.99%, Ser 1995 3,553,000
57,879 Boston Edison Co., 4.25% 4,420,509
23,161 Boston Edison Co., 4.78% 1,986,056
215,000 Coastal Finance I, 8.375% 4,259,150
156,400 El Paso Tennessee Pipeline Co., 8.25%, Ser A 6,099,600
200,000 Energy East Capital Trust I, 8.25% 5,394,000
42,000 Florida Power & Light Co., 6.75%, Ser U 4,386,375
23,638 Great Plains Energy, Inc., 4.35% 1,680,662
12,510 Great Plains Energy, Inc., 4.50% 949,509
100,000 Hawaiian Electric Industries Capital Trust I, 8.36% 2,637,000
13,000 Idaho Power Co., 7.07% 1,366,219
64,200 MCN Financing II, 8.625% 1,640,310
34,500 Monongahela Power Co., $7.73, Ser L 2,863,500
60,000 PSEG Funding Trust II, 8.75% 1,632,000
37,000 PSI Energy, Inc., 6.875% 3,718,500
26,800 Public Service Electric & Gas Co., 6.92% 2,749,680
204,000 Puget Energy, Inc., 7.45%, Ser II 5,144,880
210,000 Sierra Pacific Power Co., 7.80%, Ser 1 (Class A) 4,200,000
55,000 South Carolina Electric & Gas Co., 6.52% 5,665,000
185,000 Southern Union Financing I, 9.48% 4,680,500
39,800 TECO Capital Trust I, 8.50% 1,044,750
10,000 Virginia Electric & Power Co., $7.05 1,037,500
13,500 Xcel Energy, Inc., $4.11, Ser D 891,000
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COMMON STOCKS 44.02% $58,821,097
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(Cost $66,199,755)
Telecommunications 0.00% 1,420
200,000 Touch America Holdings, Inc.* 1,420
Utilities 44.02% 58,819,677
150,380 Alliant Energy Corp. 3,308,360
180,000 Aquila, Inc. 608,400
140,300 CH Energy Group, Inc. 6,173,200
64,300 Dominion Resources, Inc. 3,980,170
116,000 DTE Energy Co. 4,279,240
40,000 Duke Energy Corp. 712,400
247,000 Energy East Corp. 5,540,210
126,000 KeySpan Corp. 4,420,080
44,000 NiSource, Inc. 879,120
215,000 Northeast Utilities 3,852,800
175,000 NSTAR 8,312,500
See notes to
financial statements.
7
FINANCIAL STATEMENTS
SHARES ISSUER, DESCRIPTION VALUE
Utilities (continued)
42,500 Peoples Energy Corp. $1,758,650
52,500 Progress Energy, Inc. 2,334,150
69,000 Progress Energy, Inc.* (Contingent Value Obligation) (A) 6,900
216,900 Puget Energy, Inc. 4,865,067
246,600 Sierra Pacific Resources* 1,196,010
173,000 TECO Energy, Inc. 2,390,860
40,400 WPS Resources Corp. 1,664,480
164,000 Xcel Energy, Inc. 2,537,080
INTEREST PAR VALUE
ISSUER, DESCRIPTION, MATURITY DATE RATE (000s OMITTED) VALUE
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SHORT-TERM INVESTMENTS 9.56% $12,778,000
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(Cost $12,778,000)
Oil & Gas 9.56%
Chevron USA, Inc., Discount Commercial Paper, 10-01-03 0.82% $12,778 12,778,000
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TOTAL INVESTMENTS 151.09% $201,897,727
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OTHER ASSETS AND LIABILITIES, NET (51.09%) ($68,272,605)
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TOTAL NET ASSETS 100.00% $133,625,122
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* Non-income producing security.
(A) This security is valued in good faith under procedures established by the
Board of Trustees.
(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 $2,625,000 or 1.96% of the Funds net assets as of
September 30, 2003.
Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer.
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
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ASSETS AND
LIABILITIES
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September 30, 2003
This Statement of Assets and Liabilities is the Funds balance sheet. It shows
the value of what the Fund owns, is due and owes. Youll also find the net asset
value for each common share.
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ASSETS
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Investments at value (cost $213,372,185) $201,897,727
Cash 4,701
Dividends receivable 476,248
Other assets 40,882
Total assets 202,419,558
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LIABILITIES
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Payable to affiliates
Management fee 166,363
Other 16,555
Other payables and accrued expenses 89,643
Total liabilities 272,561
Dutch Auction Rate Transferable 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 68,521,875
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NET ASSETS
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Common shares capital paid-in 141,943,091
Accumulated net realized loss on investments (79,377)
Net unrealized depreciation of investments (11,474,458)
Accumulated net investment income 3,235,866
Net assets applicable to common shares $133,625,122
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NET ASSET VALUE PER COMMON SHARE
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Based on 15,142,247 shares of beneficial interest
outstanding - unlimited number of shares authorized
with no par value $8.82
See notes to
financial statements.
9
FINANCIAL STATEMENTS
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OPERATIONS
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For the year ended
September 30, 2003
This Statement of Operations summarizes the Funds investment income earned and
expenses incurred in operating the Fund. It also shows net gains (losses) for
the period stated.
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INVESTMENT INCOME
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Dividends (net of foreign withholding taxes of $4,330) $12,801,439
Interest 73,688
Total investment income 12,875,127
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EXPENSES
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Investment management fee 1,615,720
Administration fee 194,349
DARTS auction fee 178,750
Federal excise tax 135,621
Auditing fee 53,800
Printing 48,805
Transfer agent fee 48,282
Custodian fee 41,103
Registration and filing fee 33,497
Miscellaneous 24,840
Trustees fee 13,307
Legal fee 2,991
Total expenses 2,391,065
Net investment income 10,484,062
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REALIZED AND UNREALIZED GAIN
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Net realized gain on investments 510,730
Change in net unrealized appreciation (depreciation)
of investments 7,579,644
Net realized and unrealized gain 8,090,374
Distributions to DARTS (906,591)
Increase in net assets from operations $17,667,845
See notes to
financial statements.
10
FINANCIAL STATEMENTS
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CHANGES IN
NET ASSETS
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These Statements of Changes in Net Assets show how the value of the Funds net
assets has changed during the last two periods. The difference reflects earnings
less expenses, any investment gains and losses, distributions, if any, paid to
shareholders and any increase due to the sales of common shares.
YEAR YEAR
ENDED ENDED
9-30-02 9-30-03
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INCREASE IN NET ASSETS
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From operations
Net investment income $11,737,244 $10,484,062
Net realized gain (loss) (331,608) 510,730
Change in net unrealized
appreciation (depreciation) (22,050,939) 7,579,644
Distributions to DARTS (1,262,310) (906,591)
Increase (decrease) in net assets
resulting from operations (11,907,613) 17,667,845
Distributions to
common shareholders
From net investment income (9,713,863) (9,775,707)
From Fund share transactions 350,897 1,062,637
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NET ASSETS
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Beginning of period 145,940,926 124,670,347
End of period1 $124,670,347 $133,625,122
1 Includes accumulated net investment income of $3,297,911 and $3,235,866,
respectively.
See notes to
financial statements.
11
FINANCIAL HIGHLIGHTS
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FINANCIAL
HIGHLIGHTS
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COMMON SHARES
The Financial Highlights show how the Funds net asset value for a share has
changed since the end of the previous period.
PERIOD ENDED 9-30-99 9-30-00 9-30-01 9-30-02 9-30-03
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PER SHARE OPERATING PERFORMANCE
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Net asset value, beginning of period $10.85 $9.91 $10.13 $9.74 $8.30
Net investment income1 0.83 0.85 0.83 0.78 0.69
Net realized and unrealized
gain (loss) on investments (0.90) 0.23 (0.39) (1.49) 0.54
Distribution to DARTS (0.18) (0.21) (0.18) (0.08) (0.06)
Total from investment operations (0.25) 0.87 0.26 (0.79) 1.17
Less distributions
to common shareholders
From net investment income (0.69) (0.65) (0.65) (0.65) (0.65)
Net asset value, end of period $9.91 $10.13 $9.74 $8.30 $8.82
Per share market value, end of period $8.81 $8.25 $8.75 $9.15 $9.24
Total return at market value2 (%) (7.01) 1.19 13.79 12.03 8.91
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RATIOS AND SUPPLEMENTAL DATA
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Net assets applicable to common shares,
end of period (in millions) $148 $152 $146 $125 $134
Ratio of expenses to average net assets3 (%) 1.66 1.75 1.72 1.79 1.90
Ratio of net investment income
to average net assets4 (%) 7.92 8.94 8.35 8.42 8.33
Portfolio turnover (%) 18 19 23 11 10
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SENIOR SECURITIES
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Total value of DARTS outstanding
(in millions) $68 $68 $68 $68 $69
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 unit5 $323,124 $315,176 $318,208 $280,462 $287,811
1 Based on the average of the common shares outstanding.
2 Assumes dividend reinvestment.
3 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%, 1.18%, 1.18%,
1.20% and 1.23%, respectively.
4 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 5.52%, 6.03%, 5.72%, 5.65% and 5.39%, respectively.
5 Calculated by subtracting the Funds total liabilities from the Funds total
assets and dividing such amount by the number of DARTS outstanding as of the
applicable 1940 Act Evaluation Date, which may differ from the financial
reporting date.
See notes to
financial statements.
12
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NOTES TO
STATEMENTS
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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 Funds 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.
Expenses
The majority of expenses are directly identifiable to an individual fund.
Expenses that are not readily identifiable to a specific fund will be allocated
in such a manner as deemed equitable, taking into consideration, among other
things, the nature and type of expense and the relative sizes of the funds.
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 $55,954 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 the loss carryforward expires
September 30, 2010.
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 to foreign withholding taxes,
which are accrued as applicable.
The Fund records distributions to common and preferred shareholders from net
investment income and net realized gains on the ex-dividend date. During the
year ended September 30, 2003, the tax character of distributions paid was as
follows: ordinary income $10,682,298. As of
13
September 30, 2003, the components of distributable earnings on a tax basis
included $3,201,220 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 Funds
financial statements as a return of capital.
Use of estimates
The preparation of these financial statements, in accordance with accounting
principles generally accepted in the United 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 Funds average weekly net assets
and the value attributable to the DARTS, plus 5.00% of the Funds weekly gross
income. The Advisers total fee is limited to a maximum amount equal to 1.00%
annually of the Funds average weekly net assets and the value attributable to
the DARTS. For the year ended September 30, 2003, 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 approximately 0.10% of the Funds average weekly net assets plus
the value attributable to the DARTS.
Ms. Maureen Ford Goldfarb 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 Funds deferred
compensation liability are recorded on the Funds 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
investments as well as any unrealized gains or losses. The Deferred Compensation
Plan investments had no impact on the operations of the Fund.
14
NOTE C
Fund share transactions
Common shares
This listing illustrates the Funds common shares, dividend reinvestments,
reclassification of the Funds capital accounts 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 9-30-02 YEAR ENDED 9-30-03
SHARES AMOUNT SHARES AMOUNT
Beginning of period 14,979,601 $140,765,350 15,017,782 $141,016,976
Dividends reinvested 38,181 350,897 124,465 1,062,637
Reclassification of
capital accounts - (99,271) - (136,522)
End of period 15,017,782 $141,016,976 15,142,247 $141,943,091
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 1.00% to 1.86%
during the year ended September 30, 2003. Accrued dividends on DARTS are
included in the value of DARTS on the Funds 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
as defined in the Funds by-laws. 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.
NOTE D
Investment
transactions
Purchases and proceeds from sales or maturities of securities, other than
short-term securities and obligations of the U.S. government, during the year
ended September 30, 2003, aggregated $18,791,613 and $24,409,059, respectively.
The cost of investments owned on September 30, 2003, including short-term
investments, for federal income tax purposes was $213,395,570. Gross unrealized
appreciation and depreciation of investments aggregated $13,481,979 and
$24,979,822, respectively, resulting in net unrealized depreciation of
$11,497,843. 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.
15
NOTE E
Reclassification
of accounts
During the year ended September 30, 2003, the Fund reclassified amounts to
reflect a decrease in accumulated net realized loss on investments of $331, an
increase in accumulated net investment income of $136,191 and a decrease in
capital paid-in of $136,522. This represents the amount necessary to report
these balances on a tax basis, excluding certain temporary differences, as of
September 30, 2003. 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, book
and tax differences in accounting for deferred compensation and federal excise
tax. The calculation of net investment income per share in the Funds 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, including
the schedule of investments, of John Hancock Patriot Premium Dividend Fund I
(the Fund) as of September 30, 2003, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
years ended September 30, 2002 and 2003, and the financial highlights for each
of the years in the five-year period ended September 30, 2003. These financial
statements and financial highlights are the responsibility of the Funds
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 audits 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, 2003, 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Fund as of
September 30, 2003, the results of its operations, the changes in its net assets
and its financial highlights for the respective stated periods, in conformity
with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 3, 2003
17
-----------
TAX
INFORMATION
-----------
Unaudited
For federal income tax purposes, the following information is furnished with
respect to the distributions of the Fund, if any, paid during its taxable year
ended September 30, 2003.
With respect to the ordinary dividends paid by the Fund for the fiscal year
ended September 30, 2003, 85.93% of the dividends qualify for the corporate
dividends-received deduction.
The Fund hereby designates the maximum amount allowable of its net taxable
income as qualified dividend income as provided in the Jobs and Growth Tax
Relief Reconciliation Act of 2003. This amount will be reflected on Form
1099-DIV for calendar year 2003.
Shareholders will be mailed a 2003 U.S. Treasury Department Form 1099-DIV in
January 2004. This will reflect the total of all distributions that are taxable
for calendar year 2003.
18
INVESTMENT
OBJECTIVE
AND POLICY
The Funds 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 Funds non-fundamental investment policy, with respect to the quality of
ratings of its portfolio investments, was changed by a vote of the Funds
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
Moodys) 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 Funds 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 Funds Trustees approved the following investment
policy investment restriction change, which became 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 participants accounts. Such purchases will be made promptly
after the payable date for such dividend and, in any event, prior to the next
ex-dividend date after
19
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 Agents open market purchases in connection with the
reinvestment of dividends and distributions. The cost per share of the shares
purchased for each participants 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.
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 Agents 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 shareholders 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 shareholders 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).
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
20
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 help with a brokerage firm, you should contact that firm,
bank or other nominee for assistance.
SHAREHOLDER
MEETINGS
In November 2002, the Board of Trustees adopted several amendments to the Funds
by-laws, including provisions relating to the calling of a special meeting and
requiring advance notice of shareholder proposals or nominees for Trustee. The
advance notice provisions in the by-laws require shareholders to notify the Fund
in writing of any proposal that they intend to present at an annual meeting of
shareholders, including any nominations for Trustee, between 90 and 120 days
prior to the first anniversary of the mailing date of the notice from the prior
years annual meeting of shareholders. The notification must be in the form
prescribed by the by-laws. The advance notice provisions provide the Fund and
its Trustees with the opportunity to thoughtfully consider and address the
matters proposed before the Fund prepares and mails its proxy statement to
shareholders. Other amendments set forth the procedures that must be followed in
order for a shareholder to call a special meeting of shareholders. Please
contact the Secretary of the Fund for additional information about the advance
notice requirements or the other amendments to the by-laws.
On March 20, 2003, the Annual Meeting of the Fund was held to elect four
Trustees and to ratify the actions of the Trustees in selecting independent
auditors for the Fund.
Proxies covering 13,794,599 common shares of beneficial interest were voted at
the meeting. 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
--------------------------------------------------------------------------------
Maureen Ford Goldfarb 13,569,200 225,399
Charles L. Ladner 13,481,391 313,208
John A. Moore 13,482,516 312,083
Proxies covering 685 DARTS were voted at the meeting. The preferred shareholders
elected Ronald Dion to serve until his successor is duly elected and qualified,
with the votes tabulated as follows: 495 FOR and 0 WITHHELD AUTHORITY.
The common shareholders also ratified the Trustees selection of Deloitte &
Touche LLP as the Funds independent auditor for the fiscal year ending September
30, 2003, with votes tabulated as follows: 13,545,840 FOR, 152,157 AGAINST and
97,097 ABSTAINING.
21
----------
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 SINCE1 BY TRUSTEE
---------------------------------------------------------------------------------------------------
James F. Carlin, Born: 1940 1988 31
---------------------------------------------------------------------------------------------------
Director and Treasurer, Alpha Analytical Inc. (analytical
laboratory) (since 1985); 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 and Treasurer, Rizzo Associates
(until 2000); Chairman and CEO, Carlin Consolidated, Inc.
(management/investments) (since 1987); Director and Partner,
Proctor Carlin & Co., Inc. (until 1999); Trustee,
Massachusetts Health and Education Tax Exempt Trust (since
1993); 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 31
---------------------------------------------------------------------------------------------------
Former Chancellor, University of Texas System and former
President of the University of Texas, Austin, Texas;
Chairman and CEO, IBT Technologies (until 2001); Director of
the following: The University of Texas Investment Management
Company (until 2000), Hire.com (since 2000), STC
Broadcasting, Inc. and Sunrise Television Corp. (until
2001), Symtx, Inc. (since 2001), Adorno/ Rogers Technology,
Inc. (since 2001), Pinnacle Foods Corporation (since 2001),
rateGenius (since 2001), LaQuinta Motor Inns, Inc. (hotel
management company) (until 1998), Jefferson-Pilot
Corporation (diversified life insurance company) (since
1985), 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 (since 2000) and Introgen (since 2000);
Advisory Director, Q Investments (since 2000); Advisory
Director, Chase Bank (formerly Texas Commerce Bank Austin)
(since 1988), LIN Television (since 2002) and WilTel
Communications (since 2002).
---------------------------------------------------------------------------------------------------
Ronald R. Dion, Born: 1946 1998 31
---------------------------------------------------------------------------------------------------
Chairman and Chief Executive Officer, R.M. Bradley & Co.,
Inc.; Director, The New England Council and Massachusetts
Roundtable; Trustee, North Shore Medical Center; Director,
BJs Wholesale Club, Inc. and a corporator of the Eastern
Bank; Trustee, Emmanuel College.
22
NUMBER OF
NAME, AGE TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE1 BY TRUSTEE
---------------------------------------------------------------------------------------------------
Charles L. Ladner,2 Born: 1938 1992 31
---------------------------------------------------------------------------------------------------
Chairman and Trustee, Dunwoody Village, Inc. (retirement
services); 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).
---------------------------------------------------------------------------------------------------
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).
---------------------------------------------------------------------------------------------------
Patti McGill Peterson,2 Born: 1943 2002 29
---------------------------------------------------------------------------------------------------
Executive Director, Council for International Exchange of
Scholars (since 1998); Vice President, Institute of
International Education (since 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).
---------------------------------------------------------------------------------------------------
Steven Pruchansky, Born: 1944 1992 31
---------------------------------------------------------------------------------------------------
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 31
---------------------------------------------------------------------------------------------------
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 31
---------------------------------------------------------------------------------------------------
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); Chairman, Smith Barney
Trust Company of Florida (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).
23
INTERESTED TRUSTEES3
NUMBER OF
NAME, AGE TRUSTEE JOHN HANCOCK
PRINCIPAL OCCUPATION(S) AND OTHER OF FUND FUNDS OVERSEEN
DIRECTORSHIPS DURING PAST 5 YEARS SINCE1 BY TRUSTEE
---------------------------------------------------------------------------------------------------
John M. DeCiccio, Born: 1948 2001 52
---------------------------------------------------------------------------------------------------
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 (Subsidiaries, LLC), Hancock
Natural Resource Group, Independence Investment LLC, Declaration
Management Research LLC, John Hancock Advisers, LLC (the Adviser),
The Berkeley Financial Group, LLC (The Berkeley Group), John Hancock
Funds, LLC (John Hancock Funds) and Massachusetts Business Development
Corporation; Director, John Hancock Insurance Agency, Inc. (Insurance
Agency, Inc.) (until 1999).
---------------------------------------------------------------------------------------------------
Maureen Ford Goldfarb, Born: 1955 2000 52
---------------------------------------------------------------------------------------------------
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, President and
Chief Executive Officer, John Hancock Funds; Chairman,
Director, President and Chief Executive Officer, Sovereign
Asset Management Corporation (SAMCorp.); Director,
Independence Investment LLC, Subsidiaries, LLC and Signature
Services; Investment Company Institute Board of Governors
(since 2002); Senior Vice President, MassMutual Insurance
Co. (until 1999).
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
---------------------------------------------------------------------------------------------------
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).
---------------------------------------------------------------------------------------------------
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).
24
NAME, AGE
POSITION(S) HELD WITH FUND OFFICER
PRINCIPAL OCCUPATION(S) AND OF FUND
DIRECTORSHIPS DURING PAST 5 YEARS SINCE
---------------------------------------------------------------------------------------------------
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 Funds investment adviser,
underwriter and certain other affiliates.
25
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 FOR
COMMON SHAREHOLDERS
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
TRANSFER AGENT
FOR DARTS
Deutsche Bank Trust
Company Americas
280 Park Avenue
New York, New York 10017
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, NJ 07660
Customer service representatives 1-800-852-0218
Portfolio commentary 1-800-344-7054
24-hour automated information 1-800-843-0090
TDD Line 1-800-231-5469
The Funds voting policies and procedures are available without charge, upon request:
By phone 1-800-225-5291
On the Funds Web site www.jhfunds.com/proxy
On the SECs Web site www.sec.gov
--------------------------------------------------------------------------------
29
[LOGO] John Hancock
--------------
PRESORTED
STANDARD
U. S. Postage
PAID
MIS
--------------
1-800-852-0218
1-800-843-0090 EASI-Line
1-800-231-5469 (TDD)
www.jhfunds.com
P100A 9/03
11/03
ITEM 2. CODE OF ETHICS.
As of the end of the period, September 30, 2003, the registrant has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief
Executive Officer, Chief Financial Officer and Treasurer (respectively, the
principal executive officer, the principal financial officer and the principal
accounting officer, the "Senior Financial Officers"). A copy of the code of
ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Charles L. Ladner is the audit committee financial expert and is "independent",
pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
See attached Exhibit "Proxy Voting Policies and Procedures".
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's principal executive officer and principal financial officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 10. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b)(1) Separate certifications for the registrant's principal executive officer
and principal financial officer, as required by 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule
30a-2(b) under the Investment Company Act of 1940, are attached. The
certifications furnished pursuant to this paragraph are not deemed to be "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise
subject to the liability of that section. Such certifications are not deemed to
be incorporated by reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except to the extent that the Registrant
specifically incorporates them by reference.
(c)(1) Proxy Voting Policies and Procedures are attached.
(d)(1) Contact person at the registrant
November 20, 2003
EDGAR
United States Securities and
Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Form N-CSR
John Hancock Patriot Premium Dividend Fund I
File No. 811-5615
Gentlemen:
Enclosed herewith for filing pursuant to the Investment Company Act of 1940 is
Form N-CSR ("certified shareholder report").
If you have any questions or comments regarding this filing, please contact the
undersigned at (617) 375-1513.
Sincerely,
/s/Alfred Ouellette
Alfred Ouellette
Senior Attorney and Assistant Secretary
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By:
------------------------------
Maureen Ford Goldfarb
Chairman, President and Chief Executive Officer
Date: November 19, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:
-------------------------------
Maureen Ford Goldfarb
Chairman, President and Chief Executive Officer
Date: November 19, 2003
By:
-----------------------
Richard A. Brown
Senior Vice President and Chief Financial Officer
Date: November 19, 2003