<PAGE> 1
JOHN HANCOCK FUNDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INCOME SECURITIES TRUST
THIRD QUARTER REPORT
September 30, 1995
<PAGE> 2
TRUSTEES
Edward J. Boudreau, Jr.
Chairman
Dennis S. Aronowitz*
Richard P. Chapman, Jr.*
William J. Cosgrove*
Gail D. Fosler*
Bayard Henry*
Richard S. Scipione
Edward J. Spellman*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Andrew F. St. Pierre
President
Thomas H. Drohan
Senior Vice President and Secretary
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President, Assistant Secretary and
Compliance Officer
James J. Stokowski
Vice President and Treasurer
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Listed: New York Stock Exchange Symbol: JHS
John Hancock Closed-End Funds: 1-800-843-0090
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
[A 1 1/4" x 1" photo of Edward J. Boudreau, Jr., Chairman and Chief Executive
Officer, flush right, next to second paragraph.]
Investors around the world have been watching Wall Street in awe for the better
part of 1995. Through September, the Dow Jones Industrial Average had reached
record highs and had grown, along with the Standard & Poor's 500-Stock Index, by
more than 20%. Investors who stayed in the market after a disappointing 1994
have been rewarded.
On another street, Pennsylvania Avenue, one of the hot topics many
people are watching is Medicare reform. While the Congressional rhetoric is just
beginning to heat up, today's Medicare debate should serve as another wake-up
call to all Americans about the need to have a financial plan and to save for
retirement. Whether or not the government changes the way health-care benefits
are allotted to senior citizens, the message is clear: your future security and
well-being lies in your own hands -- not Uncle Sam's.
We know you've heard it a hundred times. Pick up almost any financial
periodical today, and you'll see cover stories on retirement. Many of them will
perhaps scare you or make you think that the task of saving for retirement is
just too daunting. But take heart. We don't believe that and neither do many
financial experts.
Yet retirement planning is not to be taken lightly. To live the way you
want to -- the way you deserve to after all those years of hard work -- you need
to plan and save now, on a regular basis, no matter what your other costs, no
matter how small the amount, no matter what your current age. It may be easier
if you start earlier, but it's never too late.
Building a secure nest egg is indeed doable. Talk to your financial
adviser about establishing your retirement planning roadmap, if you haven't
already. And educate yourself by reading some of the many articles about how to
save for retirement. Take control of your future by saving today. That way, when
it comes time for retirement, you shouldn't have to think about any street but
Easy Street.
Sincerely,
/s/ Edward J. Boudreau, Jr.
- ---------------------------
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE> 3
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON SEPTEMBER 30, 1995. YOU'LL
ALSO FIND THE NET ASSET VALUE PER SHARE AS OF THAT DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Publicly traded bonds (cost - $156,985,463) ............ $159,308,741
Joint repurchase agreement (cost - $6,425,000) ......... 6,425,000
Corporate savings account .............................. 658
-----------
165,734,399
Receivable for investments sold. ......................... 1,424,759
Interest receivable ...................................... 3,501,204
-----------
Total Assets .............. 170,660,362
-----------------------------------------------
LIABILITIES:
Payable for variation margin - Note A .................... 41,250
Payable for investments purchased ........................ 2,383,846
Payable to John Hancock Advisers, Inc. and
affiliates - Note B .................................... 291,356
Accounts payable and accrued expenses .................... 95,417
-----------
Total Liabilities 2,811,869
-----------------------------------------------
NET ASSETS:
Capital paid-in .......................................... 165,774,061
Accumulated net realized loss on investments
and financial futures contracts ........................ ( 158,418)
Net unrealized appreciation of investments
and financial futures contracts ........................ 2,262,809
Distributions in excess of net investment income ......... ( 29,959)
------------
Net Assets $167,848,493
===============================================
NET ASSET VALUE PER SHARE:
(based on 10,291,596 shares of beneficial interest
outstanding - 30 million shares authorized with
no par value) ............................................ $ 16.31
=============================================================================
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND FOR THE PERIOD STATED. IT ALSO SHOWS NET
GAINS (LOSSES) FOR THE PERIOD STATED.
<TABLE>
STATEMENT OF OPERATIONS
Nine months ended September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest $10,695,082
----------
Expenses:
Investment management fee - Note B ......................... 762,112
Transfer agent fee ......................................... 106,734
Printing ................................................... 78,853
Custodian fee .............................................. 35,709
Auditing fee ............................................... 31,601
New York Stock Exchange fee ................................ 18,837
Trustees' fees ............................................. 13,068
Miscellaneous .............................................. 8,029
Legal fees ................................................. 4,620
----------
Total Expenses ................ 1,059,563
-----------------------------------------------
Net Investment Income ......... 9,635,519
-----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FINANCIAL FUTURES CONTRACTS
Net realized gain on investments sold ....................... 1,174,421
Net realized loss on financial futures contracts ............ ( 446,505)
Change in net unrealized appreciation/depreciation
of investments ............................................ 11,652,727
Change in net unrealized appreciation/depreciation
of financial futures contracts ............................ 52,031
----------
Net Realized and Unrealized
Gain on Investments and
Financial Futures Contracts ... 12,432,674
-----------------------------------------------
Net Increase in Net Assets
Resulting from Operations ..... $22,068,193
===============================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ................................................................. $ 9,635,519 $ 12,941,765
Net realized gain (loss) on investments sold and financial futures contracts .......... 727,916 (886,334)
Change in net unrealized appreciation/depreciation of investments and financial
futures contracts ................................................................... 11,704,758 (17,096,620)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations ...................... 22,068,193 (5,041,189)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.9450 and $1.2775 per share, respectively) .... (9,671,645) (12,935,598)
Distributions from net realized gain on investments sold and financial futures
contracts (none and $0.0782 per share, respectively) ................................ -- (788,088)
------------ ------------
Total Distributions to Shareholders .................................................. (9,671,645) (13,723,686)
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET:*
(Market value of shares issued to shareholders in reinvestment of distributions) ...... 1,335,484 1,892,903
------------ ------------
NET ASSETS:
Beginning of period ................................................................... 154,116,461 170,988,433
------------ ------------
End of period (including distributions in excess of net investment income of
($29,959) and undistributed net investment income of $6,167, respectively) .......... $167,848,493 $154,116,461
============= ============
* ANALYSIS OF FUND SHARE TRANSACTIONS:
Shares outstanding beginning of period................................................. 10,205,263 10,076,246
Shares issued to shareholders in reinvestment of distributions......................... 86,333 129,017
------------ ------------
Shares outstanding end of period....................................................... 10,291,596 10,205,263
============ ============
</TABLE>
THE 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 DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT GAINS AND LOSSES, DISTRIBUTIONS PAID TO
SHAREHOLDERS, AND ANY INCREASE DUE TO REINVESTMENT OF DISTRIBUTIONS IN THE FUND.
THE FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES OUTSTANDING AT THE BEGINNING
OF THE PERIOD, REINVESTED AND OUTSTANDING AT THE END OF THE PERIOD, FOR THE LAST
TWO PERIODS.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the
period indicated, investment returns, key ratios and supplemental data are
listed as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
---------------------- ------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........ $ 15.10 $ 16.97 $ 16.97 $ 16.31 $ 16.25 $ 15.19 $ 15.61
-------- -------- -------- -------- -------- -------- --------
Net Investment Income ....................... 0.94 0.96 1.28 1.31 1.37 1.44 1.47
Net Realized and Unrealized Gain (Loss) on
Investments and Financial Futures
Contracts ................................. 1.22 (1.57) (1.79) 0.80 0.07 1.08 (0.42)
-------- -------- -------- -------- -------- -------- --------
Total from Investment Operations ....... 2.16 (0.61) (0.51) 2.11 1.44 2.52 1.05
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ......... (0.95) (0.96) (1.28) (1.32) (1.38) (1.46) (1.47)
Distributions from Net Realized Gain on
Investments Sold and Financial Futures
Contracts ................................. -- (0.08) (0.08) (0.13) -- -- --
-------- -------- -------- -------- -------- -------- --------
Total Distributions ....................... (0.95) (1.04) (1.36) (1.45) (1.38) (1.46) (1.47)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period ............... $ 16.31 $ 15.32 $ 15.10 $ 16.97 $ 16.31 $ 16.25 $ 15.19
======== ======== ======== ======== ======== ======== ========
Per Share Market Value, End of Period ........ $ 15.500 $ 14.500 $ 13.750 $ 16.500 $ 16.750 $ 17.000 $ 15.000
Total Investment Return at Market Value ...... 19.75%(a) (5.91)%(a) (8.70)% 7.22% 7.16% 23.25% 6.07%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) .... $167,848 $155,878 $154,116 $170,988 $162,468 $159,990 $147,764
Ratio of Expenses to Average Net Assets ...... 0.86%* 0.86%* 0.87% 0.84% 0.81% 0.74% 0.70%
Ratio of Net Investment Income to Average
Net Assets ................................ 7.86%* 7.96%* 8.03% 7.67% 8.46% 9.28% 9.64%
Portfolio Turnover Rate ...................... 71% 66% 82% 95% 111% 92% 85%
<FN>
* On an annualized basis.
(a) Not annualized.
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DIVIDENDS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW THE FUND'S NET
ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD.
ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE
FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY INCOME
SECURITIES TRUST ON SEPTEMBER 30, 1995. IT'S DIVIDED INTO TWO MAIN CATEGORIES:
PUBLICLY TRADED BONDS AND SHORT-TERM INVESTMENTS. THE SECURITIES ARE FURTHER
BROKEN DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE
FUND'S "CASH" POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
September 30, 1995 (Unaudited)
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ----------
<S> <C> <C> <C> <C>
PUBLICLY TRADED BONDS
AEROSPACE (0.34%)
Jet Equipment Trust Ser 1995-B,
*Cert 08-15-14 (R)........................................ 10.91% BB+ $ 550 $ 570,845
-----------
BANKS (13.60%)
Abbey National First Capital B.V.,
Sub Note 10-15-04......................................... 8.200 AA- 750 816,698
African Development Bank,
Sub Note 12-15-03......................................... 9.750 AA 1,000 1,182,100
Bank of Montreal - Chicago Branch,
Sub Note 11-01-00......................................... 9.800 A+ 1,000 1,000,910
Barclays North American Capital Corp.,
Gtd Cap Note 05-15-21..................................... 9.750 AA- 900 1,034,937
Den Danske Bank Aktieselskab,
*Sub Note 06-15-05 (R).................................... 7.250 BBB+ 800 803,576
International Bank For Reconstruction And Development,
30 Yr Bond 07-15-17....................................... 9.25 AAA 4,000 4,969,040
Landeskreditbank Baden - Wurttemberg
Sub Note 02-01-23......................................... 7.625 AAA 1,500 1,581,180
Midland American Capital Corp.,
Gtd Note 11-15-03......................................... 12.750 A 1,500 1,756,305
National Westminster Bank PLC - New York Branch,
Sub Note 05-01-01......................................... 9.450 AA- 1,250 1,415,088
Scotland International Finance No. 2 B.V.,
Sub Gtd Note 01-27-04 (R)................................. 8.80 A+ 2,000 2,221,920
Sub Gtd Note 11-01-06 (R)................................. 8.850 A+ 750 852,941
Security Pacific Corp.,
Medium Term Sub Note 04-26-01............................. 10.5 A- 1,500 1,774,860
Sub Note 11-15-00......................................... 11.50 A- 1,000 1,205,150
Toronto Dominion Bank - New York Branch,
Sub Note 01-15-09......................................... 6.450 AA- 1,000 951,700
Westdeutsche Landesbank Girozentrale - New York Branch
Sub Note 06-15-05......................................... 6.750 AA+ 1,250 1,255,562
-----------
22,821,967
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
SCHEDULE OF INVESTMENTS
September 30, 1995 (Unaudited)
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ----------
<S> <C> <C> <C> <C>
BROADCASTING (5.15%)
Cablevision Systems Corp.,
Sr Sub Deb 04-01-04....................................... 10.750% B $1,000 $ 1,052,500
Century Communications Corp.,
Sr Sub Deb 10-15-03....................................... 11.875 B+ 1,250 1,328,125
Continental Cablevision, Inc.,
Sr Sub Deb 06-01-07....................................... 11.000 BB- 1,000 1,105,000
Jones Intercable, Inc.,
*Sr Sub Deb 07-15-04...................................... 11.500 BB 500 546,250
Le Groupe Videotron Ltee,
*Sr Note 02-15-05......................................... 10.625 BB+ 250 262,500
Rogers Cablesystems Ltd.,
*Sr Sec Second Priority Note 03-15-05..................... 10.000 BBB 500 525,000
TKR Cable I, Inc.,
Sr Deb 10-30-07........................................... 10.500 BBB- 2,000 2,301,800
Turner Broadcasting System, Inc.,
*Sr Note 07-01-13......................................... 8.375 BB+ 550 551,275
Viacom International,
Sub Deb 07-07-06.......................................... 8.000 BB- 1,000 980,000
-----------
8,652,450
-----------
COMPUTERS (1.29%)
Unisys Corp.,
Credit Sensitive Note 07-01-97............................ 13.500 BB- 2,000 2,165,000
-----------
CONTAINERS (0.31%)
Stone Container Corp.,
Sr Sub Note 10-01-04...................................... 11.500 B 500 525,000
-----------
COSMETICS & TOILETRIES (0.43%)
Johnson & Johnson,
Deb 11-15-23.............................................. 6.730 AAA 750 721,440
-----------
FINANCE (5.43%)
APP International Finance Co. B.V.,
*Gtd Sec Note 10-01-05.................................... 11.750 BB 250 251,875
Banc One Credit Card Master Trust,
Class A Asset Backed Ctf, Ser 1994-B 12-15-99............. 7.550 AAA 1,000 1,027,180
CIT Group Holdings, Inc. (The),
Medium Term Sr Sub Cap Note 03-15-01...................... 9.250 A 1,000 1,120,050
DR Structured Finance Corp.,
Sec Pass thru Ctf Ser 1993K-1 08-15-18.................... 7.430 BBB 1,000 860,000
Great Western Financial Corp.,
Note 02-01-02............................................. 8.600 BBB+ 1,250 1,343,575
Green Tree Financial Corp.,
*Ctf Home Improv Ln Ser 1995-D Cl M-2 09-15-25............ 6.950 AAA 650 643,703
Merrill Lynch Mortgage Investors, Inc.,
Sr/Sub Pass thru Ctf Ser 1992, Class B (Sub) 04-15-12..... 8.500 AA 482 493,835
Santander Financial Issuances Ltd.,
*Sub Gtd Note 04-15-05.................................... 7.875 A+ 1,000 1,054,170
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- ---- -------- -------- -----
<S> <C> <C> <C> <C>
FINANCE (CONTINUED)
Standard Credit Card Master Trust I,
*Class A Credit Card Part Ctf Ser 1995-2 01-07-00 ........................ 8.625 AAA $1,250 $ 1,287,500
Class A Credit Card Part Ctf Ser 1994-2 04-07-08 ........................ 7.250 AAA 1,000 1,033,750
-----------
9,115,638
-----------
GLASS PRODUCTS (0.49%)
Owens-Illinois, Inc.,
Sr Deb 12-01-03 ......................................................... 11.000 BB 750 824,063
-----------
GOLD MINING & PROCESSING (1.14%)
Magna Copper Co.,
Sr Sub Note 12-15-01 .................................................... 12.000 BB+ 1,750 1,920,625
-----------
GOVERNMENTAL - FOREIGN (1.97%)
Brazil, Republic of,
*Par Bond YL4 04-15-24 .................................................. 4.250 NR 250 120,625
Nova Scotia, Province of,
Deb 04-01-22 ............................................................ 8.750 A- 850 957,653
Ontario, Province of,
Bond 06-04-02 ........................................................... 7.750 AA- 500 532,550
Deb 05-01-11 ............................................................ 15.125 AA- 325 358,940
Deb 08-31-12 ............................................................ 15.250 AA- 350 423,241
Quebec, Province of,
Deb 10-01-13 ............................................................ 13.000 A+ 500 605,965
United Mexican States
*Coll Par Bond Ser B 12-31-19 ........................................... 6.250 BB 500 302,500
-----------
3,301,474
-----------
GOVERNMENTAL - U.S. (17.74%)
United States Treasury,
Bond 08-15-05 ........................................................... 10.750 AAA 3,557 4,713,594
Bond 08-15-17 ........................................................... 8.875 AAA 2,050 2,570,516
Bond 05-15-18 ........................................................... 9.125 AAA 2,250 2,895,458
Bond 02-15-23 ........................................................... 7.125 AAA 3,835 4,070,507
Note 11-15-96 ........................................................... 7.250 AAA 1,130 1,147,300
Note 04-15-98 ........................................................... 7.875 AAA 1,000 1,045,940
Note 05-15-98 ........................................................... 9.000 AAA 2,850 3,060,644
Note 11-30-99 ........................................................... 7.750 AAA 5,810 6,174,926
Note 05-15-01 ........................................................... 8.000 AAA 3,760 4,102,498
-----------
29,781,383
-----------
GOVERNMENTAL - U.S. AGENCIES (14.48%)
Federal National Mortgage Association,
15 Yr SF Pass thru Ctf 01-25-05 ......................................... 8.000 AAA 1,000 1,028,120
15 Yr SF Pass thru Ctf 02-01-08 ......................................... 7.500 AAA 788 801,217
*30 Yr SF Pass thru Ctf 10-01-23 ......................................... 7.000 AAA 904 891,196
Financing Corp.,
Bond Ser A 02-08-18 ..................................................... 9.400 AAA 2,000 2,527,180
Bond Ser B 04-06-18 ..................................................... 9.800 AAA 2,000 2,621,240
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- ---- -------- -------- -----
<S> <C> <C> <C> <C>
GOVERNMENTAL - U.S. AGENCIES (CONTINUED)
Government National Mortgage Association,
30 Yr SF Pass thru Ctf 10-15-23.......................................... 7.000% AAA $ 871 $ 861,093
*30 Yr SF Pass thru Ctf 02-15-24 to 8-15-2025............................. 7.500 AAA 824 832,016
*30 Yr SF Pass thru Ctf 11-15-22 to 06-15-25+............................. 8.000 AAA 4,742 4,875,699
*30 Yr SF Pass thru Ctf 01-15-23 to 12-15-24.............................. 8.500 AAA 4,756 4,955,015
30 Yr SF Pass thru Ctf 04-15-21.......................................... 9.000 AAA 844 891,316
*30 Yr SF Pass thru Ctf 11-15-19 to 02-28-25.............................. 9.500 AAA 2,055 2,196,323
30 Yr SF Pass thru Ctf 11-15-20.......................................... 10.000 AAA 675 736,482
Tennessee Valley Authority,
Power Bonds 1989 Ser G 11-15-29.......................................... 8.625 AAA 1,000 1,083,100
----------
24,299,997
----------
INSURANCE (2.08%)
Liberty Mutual Insurance Co.,
*Surplus Note 05-04-07 (R)............................................... 8.200 A2 375 393,761
Massachusetts Mutual Life Insurance Co.,
Surplus Note 11-15-23 (R)................................................ 7.625 AA- 750 725,715
Metropolitan Life Insurance Co.,
Surplus Note 11-01-03 (R)................................................ 6.300 AA 1,000 941,760
New York Life Insurance Co.,
Surplus Note 12-15-23 (R)................................................ 7.500 AA 1,500 1,431,180
----------
3,492,416
LEISURE & RECREATION (0.09%)
Mohegan Tribal Gaming Authority
*Sr Sec Note 11-15-02 (R)................................................ 13.500 NR 150 155,625
----------
OIL & GAS (3.55%)
Ashland Oil, Inc.,
SF Deb 10-15-17.......................................................... 11.125 BBB 1,000 1,127,540
Coastal Corp. (The),
Sr Deb 06-15-06.......................................................... 11.750 BB+ 1,000 1,076,250
Maxus Energy Corp.,
Deb 05-01-13............................................................. 11.250 BB- 229 234,725
Norsk Hydro, a.s.,
Deb 06-15-23............................................................. 7.750 A- 1,000 1,030,640
Occidental Petroleum Corp.,
Sr Deb 09-15-09.......................................................... 10.125 BBB 600 743,376
Oryx Energy Co.,
Note 09-15-98............................................................ 9.750 BB 1,000 1,005,000
TransTexas Gas Corp.,
*Sr Note 06-15-02........................................................ 11.500 BB- 700 733,250
----------
5,950,781
----------
PAPER (0.45%)
Georgia-Pacific Corp.,
Deb 02-15-18............................................................. 9.500 BBB- 450 472,558
S.D. Warren Co.,
Sr Sub Note 12-15-04..................................................... 12.000 B+ 250 276,250
----------
748,808
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- ---- -------- -------- -----
<S> <C> <C> <C> <C>
PUBLISHING (2.10%)
News America Holdings Inc.,
*Deb 08-10-18............................................................ 8.250% BBB- $ 500 $ 521,160
Sr Note 10-15-99......................................................... 9.125 BBB- 1,000 1,085,230
Sr Note 12-15-01......................................................... 12.000 BBB- 750 838,650
Time Warner Inc.,
Deb 01-15-13............................................................. 9.125 BBB- 1,000 1,085,370
-----------
3,530,410
-----------
RETAIL (2.33%)
Grand Union Co.,
*Sr Note 09-01-04........................................................ 12.000 B- 475 456,000
Kroger Co. (The),
Lease Ctf 02-01-09....................................................... 12.950 BB+ 1,910 2,120,100
May Department Stores Co.(The),
Deb 06-15-18............................................................. 10.750 A 254 275,608
Safeway Stores, Inc.,
Lease Ctf 01-15-09....................................................... 13.500 BBB- 474 540,146
Thrifty Payless Inc.,
*Sr Note 04-15-03........................................................ 11.750 B+ 500 526,250
-----------
3,918,104
-----------
STEEL (0.94%)
Ucar Global Enterprises Inc.,
*Sr Sub Note 01-15-05.................................................... 12.000 B 400 446,000
Weirton Steel Corp.,
*Sr Note 03-01-98........................................................ 11.500 B 300 309,000
*Sr Note 10-15-99........................................................ 10.875 B 260 262,600
*Sr Note 06-01-05 (R).................................................... 10.750 B 600 555,000
-----------
1,572,600
-----------
TELECOMMUNICATIONS (0.66%)
British Telecom Finance Inc.,
Gtd Deb 02-15-19......................................................... 9.625 AAA 1,000 1,116,020
-----------
TOBACCO (0.75%)
RJR Nabisco Capital Corp.,
Sr Note 04-15-04......................................................... 8.750 BBB- 1,000 1,012,170
RJR Nabisco Inc.,
*Note 9-15-03............................................................ 7.625 BBB- 250 239,810
-----------
1,251,980
-----------
TRANSPORTATION (5.91%)
American Airlines, Inc.,
1991-A Pass thru Trust 01-02-07.......................................... 9.710 BBB- 614 680,306
NWA Inc.,
Note 08-01-96............................................................ 8.625 B 2,265 2,287,650
Rail Car Trust, No. 1992-1
Trust Note 06-01-04...................................................... 7.750 AAA 1,717 1,809,751
Scandinavian Airlines System,
Bond 07-20-99............................................................ 9.125 A3 1,000 1,069,690
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
TRANSPORTATION (CONTINUED)
Sea-Land Service, Inc.,
Sec Bond Ser A 01-02-11................................... 10.600% BBB+ $1,000 $1,068,290
United Air Lines, Inc.,
Deb Ser B 05-01-14........................................ 11.210 BB 1,000 1,238,750
USAir 1990-A Pass Through Trusts,
Pass thru Ctf Ser 1990-A1 03-19-05........................ 11.200 B+ 1,845 1,762,196
------------
9,916,633
------------
UTILITIES (13.68%)
ALLTEL Corp.,
Deb 04-01-09.............................................. 10.375 A+ 500 529,870
BVPS II Funding Corp.,
*Collateralized Lease Bond 06-01-17....................... 8.890 BB+ 200 184,724
*Collateralized Lease Bond 12-01-07....................... 8.330 BB+ 600 589,446
Chugach Electric Association, Inc.,
1st Mtg 1991 Ser A 03-15-22............................... 9.140 A 2,000 2,245,060
Cleveland Electric Illuminating Co.,
*1st Mtg Ser 2005-B 05-15-05.............................. 9.500 BB 750 751,050
CTC Mansfield Funding Corp.,
Sec Lease Oblig 09-30-16.................................. 11.125 B+ 2,575 2,643,856
E.I.P. Refunding Corp.,
Sec Fac Bond 10-01-12..................................... 10.250 B+ 744 770,791
First PV Funding Corp.,
*Lease Oblig Ser 1986 B 01-15-16.......................... 10.150 B+ 1,500 1,500,000
GG1B Funding Corp.,
*Sec Lease Oblig 01-15-11................................. 7.430 BBB- 591 576,971
Sec Lease Oblig 01-15-14.................................. 8.200 BBB- 500 482,325
GTE Corp.,
Deb 11-15-17.............................................. 10.300 BBB+ 500 573,595
Deb 11-01-20.............................................. 10.250 BBB+ 1,500 1,753,950
GTE South Inc.,
1st Mtg Ser GG 06-15-30................................... 9.375 A+ 1,000 1,052,230
Hydro-Quebec (Gtd by Province of Quebec),
Deb Ser HS 02-01-21....................................... 9.400 A+ 1,000 1,194,740
Iberdrola International B.V.,
Gtd Note 10-01-02......................................... 7.500 AA- 2,000 2,067,880
Long Island Lighting Co.,
*Deb 03-15-03............................................. 7.050 BB+ 750 712,830
*Gen Ref 05-01-21......................................... 9.750 BBB- 250 253,275
Louisiana Power & Light Co.,
*Sec Lease Oblig Bond Ser B 01-02-17...................... 10.670 BBB- 1,350 1,451,736
Midland Funding Corp. I,
Sr Sec Lease Oblig Ser C 07-23-02......................... 10.330 BB- 1,214 1,250,603
Philippine Long Distance Telephone Co.,
*Note 08-01-05............................................ 9.875 BB 425 434,563
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- --------- ------
<S> <C> <C> <C> <C>
UTILITIES (CONTINUED)
System Energy Resources, Inc.,
1st Mtg 09-01-96.......................................... 10.500% BBB- $1,100 $1,139,644
Tenaga Nasional Berhad,
Note 06-15-04 (R)......................................... 7.875 A+ 750 796,343
------------
22,955,482
------------
TOTAL PUBLICLY TRADED BONDS
(Cost $156,985,463) (94.91)% 159,308,741
----- ------------
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (3.83%)
Investment in a joint repurchase agreement transaction
with UBS Securities Inc., Dated 09-29-95, due 10-02-95
(secured by U.S. Treasury Bonds, 7.500% and 14.000%,
due 11-15-24 and 11-15-11, and U.S. Treasury Notes, 6.625%
and 7.500% due 03-31-97 and 12-31-96) - Note A............ 6.450 -- 6,425 6,425,000
------------
CORPORATE SAVINGS ACCOUNT (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00%........................................ 658
------------
TOTAL SHORT-TERM INVESTMENTS (3.83)% 6,425,658
----- ------------
TOTAL INVESTMENTS (98.74)% $165,734,399
===== ============
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS
(R) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. Such securities may be resold, normally to qualified
institutional buyers, in transactions exempt from registration. Rule 144A
securities amounted to $9,448,666 as of September 30, 1995. See Note A of
the Notes to Financial Statements for valuation policy.
+These securities having an aggregate value of $888,759 or 0.53% of the
Fund's net assets, have been purchased on a when issued basis subsequent to
the date of this schedule. The purchase price and the interest rate of such
security is fixed at trade date, although the Fund does not earn any
interest on such securities until settlement date. The Fund has instructed
its Custodian Bank to segregate assets with a current value at least equal
to the amount of its when issued commitments. Accordingly, the market value
of $1,037,372 of U.S. Treasury Bond 7.125%, maturity 02-15-23 has been
segregated to cover the when issued commitments.
*Securities, other than short-term investments, newly added to the portfolio
during the nine months ended September 30, 1995.
**Credit ratings are rated by Moody's Investor Services or John Hancock
Advisers, Inc. where Standard and Poors ratings are not available.
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.
12
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Income Securities Trust (the "Fund") is a closed-end investment
management 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.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.
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's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investment, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $692,312 of capital loss
carryforward available, to the extent provided by regulations, to offset future
net realized capital gains. If such carryforward is used by the Fund, no capital
gain distributions will be made. The carryforward expires December 31, 2002.
Additionally, net capital losses of $19,610 attributable to security
transactions occurring after October 31, 1994 are treated as arising on the
first day (January 1, 1995) of the Fund's next taxable year.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. Interest income on investment securities is
recorded on the accrual basis.
The Fund records all dividends and distributions to shareholders from net
investment income and realized gains on the ex-dividend date. Such distributions
are determined in conformity with federal income tax regulations, which may
differ from generally accepted accounting principles.
DISCOUNT ON SECURITIES The Fund accretes original issue discount from par value
on securities purchased from either the date of issue or the date of purchase
over the life of the security, as required by the Internal Revenue Code.
FINANCIAL FUTURES CONTRACTS At the time the Fund enters into a financial futures
contract, it is required to deposit with its custodian a specified amount of
cash or U.S. government securities, known as "initial margin", equal to a
certain percentage of the value of the financial futures contract being traded.
Each day, the futures contract is valued at the official settlement price of the
board of trade or U.S. commodities exchange. Subsequent payments, known as
"variation margin", to and from the broker are made on a daily basis as the
market price of the financial futures contract fluctuates. Daily variation
margin adjustments, arising from this "mark to market", are recorded by the Fund
as unrealized gains or losses.
When the contracts are closed, the Fund recognizes a gain or loss. Risks of
entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contract may not
correlate with changes in the value of the underlying securities.
For Federal income tax purposes, the amount, character and timing of the
Fund's gains and/or losses can be affected as a result of futures transactions.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Income Securities Trust
At September 30, 1995, open positions in financial futures contracts were as
follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION DEPRECIATION
- ---------- -------------- -------- ------------
<S> <C> <C> <C>
DECEMBER, 1995 30 U.S. TREASURY NOTE SHORT ($25,313)
DECEMBER, 1995 15 U.S. TREASURY NOTE SHORT ($35,156)
-------
($60,469)
=======
</TABLE>
At September 30, 1995, the Fund has deposited in a segregated account
$75,900 par value of U.S. Treasury Bond, 7.125%, 02-15-23, to cover margin
requirements on open financial futures contracts.
NOTE B --
MANAGEMENT FEE AND
ADMINISTRATIVE SERVICES
Under the present investment management contract, the Fund pays a quarterly
management fee to the Adviser, for a continuous investment program, equivalent
on an annual basis, to the sum of (a) 0.650% of the first $150,000,000 of the
Fund's average weekly net asset value, (b) 0.375% of the next $50,000,000, (c)
0.350% of the next $100,000,000 and (d) 0.300% of the Fund's average weekly net
asset value in excess of $300,000,000.
In the event normal operating expenses of the Fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, exceeds 1.5% of
the first $30,000,000 of the Fund's average weekly net asset value and 1.0% of
the Fund's average weekly net asset value in excess of $30,000,000, the fee
payable to the Adviser will be reduced to the extent of such excess and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses.
Messrs. Edward J. Boudreau, Jr. and Richard S. Scipione 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. Effective with
the fees paid for 1995, 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 will make investments in other John
Hancock Funds, as applicable, to cover its liability with regard to the
deferred compensation. Investments to cover the Fund's deferred compensation
liability will be recorded on the Fund's books as an other asset. The deferred
compensation liability will be marked to market on a periodic basis and income
earned by the investment will be recorded on the Fund's books.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations of
the U.S. government and its agencies and short-term securities, during the
nine months ended September 30, 1995, aggregated $39,014,064 and $42,349,028,
respectively. Purchases and proceeds from sales of obligations of the U.S.
government and its agencies during the nine months ended September 30, 1995,
aggregated $74,321,117 and $73,200,733 respectively.
The cost of investments owned at September 30, 1995 (excluding the corporate
savings account) for Federal income tax purposes was $163,584,875. Gross
unrealized appreciation and depreciation of investment aggregated $4,987,688
and $2,838,822, respectively, resulting in net unrealized appreciation of
$2,148,866.
14
<PAGE> 15
John Hancock Funds - Income Securities Trust
INVESTMENT OBJECTIVE AND POLICY
John Hancock Income Securities Trust is a closed-end diversified investment
management company, shares of which were initially offered to the public on
February 14, 1973 and are publicly traded on the New York Stock Exchange. Its
investment objective is to generate a high level of current income consistent
with prudent investment risk. The Fund invests in a diversified portfolio of
freely marketable debt securities and may invest an amount not exceeding 20% of
its assets in income-producing preferred and common stock. The Fund intends to
engage in short-term trading, may issue a single class of senior securities not
to exceed 33-1/3% of its net assets at market value, may borrow from banks as a
temporary measure for emergency purposes in amounts not to exceed 5% of the
total assets at cost and may lend its portfolio securities. The Fund pays
quarterly dividends from net investment income and intends to distribute any
available net realized capital gains annually. All distributions are paid in
cash unless the shareholder elects to participate in the Automatic Dividend
Reinvestment Plan.
FINANCIAL FUTURES CONTRACTS
The Fund may buy and sell financial futures contracts and options on futures
contracts to hedge against the effects of fluctuations in interest rates and
other market conditions. The Fund's ability to hedge successfully will depend
on the Adviser's ability to predict accurately the future direction of interest
rate changes and other market factors. There is no assurance that a liquid
market for futures and options will always exist. In addition, the Fund could
be prevented from opening, or realizing the benefits of closing out, a futures
or options position because of position limits or limits on daily price
fluctuations imposed by an exchange.
The Fund will not engage in transactions in futures contracts and options on
futures for speculation, but only for hedging or other permissible risk
management purposes. All of the Fund's futures contracts and options on futures
will be traded on a U.S. commodity exchange or board of trade. The Fund will
not engage in a transaction in futures or options on futures if, immediately
thereafter, the sum of initial margin deposits on existing positions and
premiums paid for options on futures would exceed 5% of the Fund's total
assets.
DIVIDEND REINVESTMENT PLAN
John Hancock Income Securities Trust offers shareholders the opportunity to
elect to receive shares of the Fund's Common Shares in lieu of cash dividends.
The Plan is available to all shareholders without charge.
Any shareholder of record of John Hancock Income Securities Trust ("Income
Securities") may elect to participate in the Automatic Dividend Reinvestment
Plan (the "Plan") and receive shares of Income Securities' Common Shares in
lieu of all or a portion of the cash dividends.
Shareholders may join the Plan by filling out and mailing an authorization
card showing an election to reinvest all or a portion of dividend payments. If
received in proper form by State Street Bank and Trust Company, P.O. Box 8209,
Boston, Massachusetts 02266-8209 (the "Agent Bank") not later than seven
business days before the record date for a dividend, the election will be
effective with respect to all dividends paid after such record date.
Shareholders whose shares are held in the name of a broker or nominee should
contact the broker, bank, or nominee to participate in the Plan.
Participation in the Plan may be terminated at any time by written notice to
the Agent Bank and such termination will be effective immediately. However,
notice of termination must be received seven days prior to the record date of
any distribution to be effective for that distribution. Upon termination,
certificates will be issued representing the number of full shares of Common
Shares held by the Agent Bank. A shareholder will receive a cash payment for
any fractional share held.
The Agent Bank will act as agent for participating shareholders. The Board
of Trustees of Income Securities will declare dividends from net investment
income payable in cash or, in the case of shareholders participating in the
Plan, partially or entirely in Income Securities' Common Shares. The number of
shares to be issued for the benefit
15
<PAGE> 16
John Hancock Funds - Income Securities Trust
of each shareholder will be determined by dividing the amount of the cash
dividend otherwise payable to such shareholder on shares included under the
Plan by the per share net asset value of the Common Shares on the date for
payment of the dividend, unless the net asset value per share on the payment
date is less than 95% of the market price per share on that date, in which
event the number of shares to be issued to a shareholder will be determined by
dividing the amount of the cash dividend payable to such shareholder by 95% of
the market price per share of the Common Shares on the payment date. The market
price of the Common Shares on a particular date shall be the mean between the
highest and lowest sales price on the New York Stock Exchange on that date. Net
asset value will be determined in accordance with the established procedures of
Income Securities. However, if as of such payment date the market price of the
Common Shares is lower than such net asset value per share, the number of
shares to be issued will be determined on the basis of such market price.
Fractional shares, carried out to three decimal places, will be credited to
your account. Such fractional shares will be entitled to future dividends.
The shares issued to participating shareholders, including fractional
shares, will be held by the Agent Bank in the name of the participant. A
confirmation will be sent to each shareholder promptly, normally within seven
days, after the payment date of the dividend. The confirmation will show the
total number of shares held by such shareholder before and after the dividend,
the amount of the most recent cash dividend which the shareholder has elected
to reinvest and the number of shares acquired with such dividend.
The reinvestment of dividends does not in any way relieve participating
shareholders of any Federal, state or local income tax which may be due with
respect to such dividend. Dividends reinvested in shares will be treated on
your Federal income tax return as though you had received a dividend in cash in
an amount equal to the fair market value of the shares received, as determined
by the prices for shares of the Fund on the New York Stock Exchange as of the
dividend payment date. Distributions from the Fund's long-term capital gains
will be processed as noted above for those electing to reinvest in shares and
will be taxable to you as long-term capital gains. The confirmation referred to
above will contain all the information you will require for determining the
cost basis of shares acquired and should be retained for that purpose. At year
end, each account will be supplied with detailed information necessary to
determine total tax liability for the calendar year.
Additional information may be obtained from the Customer Service Department,
John Hancock Income Securities Trust, 101 Huntington Avenue, Boston,
Massachusetts 02199-7603, 1 (800) 843-0090.
16
<PAGE> 17
NOTES
John Hancock Funds - Income Securities Trust
17
<PAGE> 18
NOTES
John Hancock Funds - Income Securities Trust
18
<PAGE> 19
NOTES
John Hancock Funds - Income Securities Trust
19
<PAGE> 20
Bulk Rate
[LOGO] JOHN HANCOCK FUNDS U.S. Postage
A GLOBAL INVESTMENT MANAGEMENT FUND PAID
101 Huntington Avenue Boston, MA 02199-7603 So. Hackensack
Permit No. 750
[A 1/2" x 1/2" John Hancock Funds logo in upper left hand corner of the page. A
box sectioned in quadrants with a triangle in upper left, a circle in upper
right, a cube in lower left and a diamond in lower right. A tag line below
reads: "A Global Investment Management Firm."]
[A recycled logo in lower left hand corner with caption "Printed on Recycled
Paper."]
JHD P60Q3 9/95
