<PAGE> 1
JOHN HANCOCK FUNDS
- --------------------------------------------------------------------------------
PATRIOT
PREMIUM
DIVIDEND
FUND I
ANNUAL REPORT
September 30, 1995
<PAGE> 2
TRUSTEES
EDWARD J. BOUDREAU, JR.
THOMAS W.L. CAMERON
JAMES F. CARLIN*
WILLIAM H. CUNNINGHAM*
CHARLES F. FRETZ*
HAROLD R. HISER, JR.*
CHARLES L. LADNER*
LEO E. LINBECK, JR.*
PATRICIA P. MCCARTER*
STEVEN R. PRUCHANSKY*
RICHARD S. SCIPIONE
LT. GEN. NORMAN J. SMITH, USMC (RET.)*
JOHN P. TOOLAN*
*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
JOHN A. MORIN
Vice President and Compliance Officer
JAMES J. STOKOWSKI
Vice President and Treasurer
INVESTMENT ADVISER
JOHN HANCOCK ADVISERS, INC.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
800-843-0900
CUSTODIAN AND TRANSFER AGENT FOR
COMMON SHAREHOLDERS
STATE STREET BANK AND TRUST COMPANY
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
800-426-5523
TRANSFER AGENT FOR DARTS
CHEMICAL BANK
450 WEST 33RD STREET
NEW YORK, NEW YORK 10001
LEGAL COUNSEL
HALE AND DORR
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2604
CHAIRMAN'S MESSAGE
LISTED: NEW YORK STOCK EXCHANGE SYMBOL:PDF
JOHN HANCOCK CLOSED-END FUNDS:
1-800-843-0090
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
BY GREGORY K. PHELPS FOR THE PORTFOLIO MANAGEMENT TEAM
JOHN HANCOCK
PATRIOT PREMIUM
DIVIDEND FUND I
Bond market advance fuels Fund performance
John Hancock Patriot Premium Dividend Fund I is run by a team of portfolio
managers, including Andrew F. St. Pierre, who has managed the Fund since 1992,
Gregory K. Phelps and Laura L. Provost, who both joined the team in January
1995. What follows is a discussion of their views on the market, the Fund's
current investment strategy and the outlook for the months ahead.
Fixed-income investors couldn't have asked for more. After falling for much of
1994, bond prices have staged a strong comeback so far this year. In fact, in
the first half, it seemed like the bond market had nowhere to go but up.
Propelled by hopes of a "soft landing" -- a moderately growing economy with low
inflation -- the benchmark 30-year U.S. Treasury bond rose nearly 20%.
[A 2 1/2" x 3 3/4" photo of the Patriot management team, bottom center. Caption
reads: "The Patriot management team: Laura Provost, Gregory Phelps and Andrew
St. Pierre."]
Gains in the third quarter, though, didn't come quite as easily, because a
host of mixed economic signals confused bond investors. On July 6, the Federal
Reserve Board cut short-term interest rates one-quarter of a percentage
[CAPTION]
"Utility stocks...rebounded sharply
this year."
3
<PAGE> 4
John Hancock Funds - Patriot Premium Dividend Fund I
[A pie chart with the heading "Portfolio Diversification" at top of left hand
column. The chart is divided into five sections. Going from top left to right:
Financials, 17%, Industrials 11%, Short-Term & Other investments 6%, Preferred
Stock Utilities 30%, Common Stock utilities 36%. A footnote states: "As a
percentage of net assets on September 30, 1995."]
point to spur economic growth. By early August, however, it appeared that the
economy wasn't headed for a recession but, in fact, was gaining steam. That,
coupled with an enormous auction of new U.S. Treasury bonds, sent prices
tumbling. Then in September, bonds reversed course once again as a preponderance
of weaker-than-expected economic news pushed prices back up. In the end, bonds
ended the past 12 months with strong gains.
PREFERRED AND UTILITY STOCK HOLDINGS ARE
STRONG PERFORMERS
The rising bond market boosted the Fund's preferred stock holdings, which made
up slightly more than 60% of the Fund's net assets at the end of September.
Because of their fixed yields, preferred stocks tend to track movements in the
bond market closely. In particular, preferred stocks with dividend received
deduction (DRD) eligibility were strong performers this year. (DRD-eligible
preferred stocks offer special tax advantages to corporations.) With the supply
of DRDs drying up quickly, demand has been unusually strong, and that's driven
the stock prices way up.
Utility stocks, both common and preferred -- which together totaled more
than 65% of the Fund's net assets -- also rebounded sharply this year. That's
not surprising given that utilities tend to follow the bond market closely. But
other factors also lifted the group. Utility investors breathed a collective
sigh of relief as closely-watched California regulators relaxed their aggressive
stance on deregulation. What's more, a few key mergers fueled takeover
speculation throughout the industry, pushing utility shares higher. Among our
biggest winners were Texas Utilities, which received a credit upgrade on its
preferred shares, and Potomac Electric Power Co., which recently announced its
intent to merge with Baltimore Gas & Electric. Of course, not all of our utility
holdings went up. Gulf States Utilities was probably our biggest disappointment.
Suffering from regulatory difficulties as well as problems at its nuclear
plants, Gulf States' preferred stock was downgraded in March.
Against this backdrop, John Hancock Patriot Premium Dividend Fund I finished
the year with strong gains. For the twelve months ended September 30, 1995, the
Fund had a total return of 27.26% at net asset value. By comparison, the Dow
Jones Utility Average had
[Table entitled "Scorecard" at bottom left hand column. The header for the left
column is "Investment" the header for the right column is "Recent
performance...and what's behind the numbers." The first listing is "Potomac
Electric Power Co." followed by an up arrow and the phrase "To merge with
Baltimore Gas & Electric". The second listing is "Bowater" followed by an up
arrow and the phrase "Rising paper prices/credit upgrade". The third listing is
"Gulf States Utilities" followed by a down arrow and the phrase "Credit
downgrade". Footnote below reads: "See "Schedule of Investments." Investment
holdings are subject to change."]
[CAPTION]
"WE HAVEN'T MADE ANY MAJOR CHANGES TO OUR INVESTMENT STRATEGY..."
4
<PAGE> 5
John Hancock Funds - Patriot Premium Dividend Fund I
[Bar chart with heading "Fund Performance" at top of left hand column. Under the
heading is the footnote "For the year ended September 30, 1995." The chart is
scaled in increments of 10% from top to bottom with 30% at the top and 0% at the
bottom. Within the chart, there are three solid bars. The first represents the
27.26% total return for John Hancock Patriot Premium Dividend Fund I. The
second represents the 18.09% total return for the Dow Jones Utility Average.
The third represents the 18.20% total return for the average income-oriented
closed-end equity fund. Footnote below reads: "The total return for John Hancock
Patriot Premium Dividend Fund I is at net asset value with all distributions
reinvested. The average income-oriented, closed-end equity fund is tracked by
Lipper Analytical Services. The Dow Jones Utility Average is an unmanaged index
which measures the performance of the utility industry in the United
States.(1)"]
a total return of 18.09%, and the average income-oriented, closed-end equity
fund had total return of 18.20%, according to Lipper Analytical Services.1
PORTFOLIO ADJUSTMENTS
We haven't made any major changes to our investment strategy, only minor
adjustments along the way. Throughout the year, we've continued to slowly cut
back our utility common stocks in favor of utility and non-utility preferred
stocks. The main reason: preferred stocks, especially the DRDs, offer better
value and more attractive yields. At the end of September, we owned 36% in
utility common stocks, 30% in utility preferred stocks and 28% in non-utility
preferred stocks.
With utility common stocks, our focus remains on higher-yielding issues with
steady dividends, such as Houston Industries and Public Service Enterprise
Group. Because of the strong utility run-up in the last few months, however, it
has become more difficult to find stocks with attractive yields. In fact, we've
started selling holdings -- such as Central & Southwest Corp. -- where yields
are getting too low. With utility preferred stocks, we've concentrated on
"cushion" preferreds, especially those with DRD eligibility and good call
protection (that is, protection from being redeemed early by the issuer).
Cushion preferreds tend to have above-average yields, which can cushion against
rising interest rates -- hence their name. We've recently added to existing
positions such as Commonwealth Edison and MCN Michigan as well as established
new positions such as UtiliCorp.
With our non-utility preferred stocks, we own a combination of industrial
and financial stocks. Here, we've also emphasized higher-yielding cushion
preferreds. One of our biggest winners has been paper manufacturer Bowater.
Sharply rising paper prices and aggressive cost-cutting has fueled Bowater's
earnings and stock price. Thanks to continued strong earnings and rapid industry
consolidation, our bank holdings have also performed well. In this area, we've
recently added Boston-based Shawmut National Corp. It's a DRD-eligible preferred
with a high current yield and five years of call protection. What's more,
Shawmut's pending merger with Fleet Financial Group will eventually lead to a
credit upgrade.
- --------------------------------------------------------------------------------
(1) Source: Lipper Analytical Services
[CAPTION]
"THE BOND MARKET...ADVANCE IS LIKELY TO CONTINUE, ALBEIT AT A SLOWER PACE..."
5
<PAGE> 6
John Hancock Funds - Patriot Premium Dividend Fund I
LOOKING AHEAD
The bond market probably won't repeat its spectacular returns of the last three
quarters. But in our view, its advance is likely to continue, albeit at slower
pace, for several reasons. Inflation remains extremely low. What's more, there's
reason to be optimistic that Congress and President Clinton will come up with
some meaningful cuts in the budget to help reduce the deficit. Finally, while
the Fed appears to be in a wait-and-see mode right now, we believe its next move
will be to cut short-term interest rates again.
Utility common stocks and preferred stocks -- the Fund's main holdings --
should also continue to perform well. A firm bond market certainly bodes well
for both groups. Waning deregulation fears and ongoing consolidation should keep
utility stocks strong. As for preferreds, positive technical factors for DRDs --
scarce supply and growing demand -- are likely to keep prices moving higher. As
we head into 1996, we'll continue with our current strategy of weighing the
portfolio more heavily toward utility and non-utility preferred stocks,
especially those with DRD eligibility. That's where we see the best value right
now. However, we will also keep a close eye out for attractive opportunities
among utility common stocks.
6
<PAGE> 7
FINANCIAL STATEMENTS
JOHN HANCOCK FUNDS - PATRIOT PREMIUM DIVIDEND FUND I
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET ON SEPTEMBER
30, 1995. YOU'LL ALSO FIND THE NET ASSET VALUE PER SHARE, FOR EACH COMMON SHARE,
AS OF THAT DATE.
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995
- ------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Preferred stocks (cost - $116,739,599)..................... $ 120,524,655
Common stocks (cost - $77,475,612)......................... 74,576,818
Capital securities (cost - $2,500,000)..................... 2,687,500
Trust originated preferred securities
(cost - $2,500,000)...................................... 2,518,750
Short-term investments (cost - $949,842)................... 949,842
-------------
201,257,565
Cash........................................................ 580
Receivable for investments sold............................. 3,144,283
Dividends receivable........................................ 2,033,647
-------------
Total Assets............................... 206,436,075
-----------------------------------------------------------
LIABILITIES:
DARTS dividend payable...................................... 213,225
Common Share dividend payable............................... 988,570
Payable for investments purchased........................... 542,500
Payable to John Hancock Advisers, Inc. - Note B............. 193,130
Accounts payable and accrued expenses....................... 59,310
-------------
Total Liabilities.......................... 1,996,735
-----------------------------------------------------------
NET ASSETS:
Dutch Auction Rate Transferable Securities Preferred
Stock Series A (DARTS)
Without par value, unlimited number of shares of
beneficial interest authorized, 685 shares issued,
liquidation preference of $100,000 per share -
Note A.................................................... 68,500,000
-------------
Common Shares
Without par value, unlimited number of shares of
beneficial interest authorized, 14,821,141 shares
issued and outstanding.................................... 137,780,110
Accumulated net realized loss on investments................ ( 2,906,318)
Net unrealized appreciation of investments.................. 1,092,512
Distributions in excess of net investment income............ ( 26,964)
-------------
Net Assets Applicable to
Common Shares ($9.17 per
share based on 14,821,141
shares outstanding)........................ 135,939,340
-----------------------------------------------------------
Net Assets................................. $ 204,439,340
===========================================================
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Year ended September 30, 1995
- ------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes
of $31,479)................................................ $ 16,312,467
Interest.................................................... 221,875
-------------
16,534,342
-------------
Expenses:
Investment management fee - Note B......................... 1,788,082
DARTS and auction fees..................................... 197,375
Administration fee - Note B................................ 191,958
Printing................................................... 77,016
Transfer agent fee......................................... 74,657
Custodian fee.............................................. 58,819
Auditing fee............................................... 54,100
Miscellaneous.............................................. 50,570
Trustees' fees............................................. 28,960
Organization expense - Note A.............................. 12,000
Legal fees................................................. 8,118
-------------
Total Expenses............................. 2,541,655
Net Investment Income...................... 13,992,687
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments sold....................... ( 1,482,849)
Change in net unrealized appreciation/depreciation
of investments............................................. 20,715,056
-------------
Net Realized and Unrealized
Gain on Investments....................... 19,232,207
-----------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations................. 33,224,894
===========================================================
Distributions to DARTS..................... ( 3,073,252)
-----------------------------------------------------------
Net Increase in Net Assets
Applicable to Common Shareholders
Resulting from Operations
Less DARTS Distributions.................. $30,151,642
===========================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................................................................... $ 13,992,687 $ 12,969,885
Net realized loss on investments sold....................................................... ( 1,482,849) ( 1,423,469)
Change in net unrealized appreciation/depreciation of investments........................... 20,715,056 ( 40,093,062)
-------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations............................ 33,224,894 ( 28,546,646)
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
DARTS ($4,486 and $3,070 per share, respectively ) - Note A................................. ( 3,073,252) ( 2,102,717)
Common Shares - Note A
Dividends from net investment income ($0.7986 and $1.0023 per share, respectively)......... ( 11,772,508) ( 14,533,485)
Distributions from net realized gain on investments sold (none and $0.2481 per share,
respectively)............................................................................ -- ( 3,634,142)
Distributions in excess of net investment income ($0.0018 and none per share,
respectively)............................................................................ ( 26,964) --
-------------- -------------
Total Distributions to Shareholders...................................................... ( 14,872,724) ( 20,270,344)
-------------- -------------
FROM FUND SHARE TRANSACTIONS:
Value of shares issued to common shareholders in reinvestment of distributions *............ 1,464,283 1,256,928
-------------- -------------
NET ASSETS:
Beginning of period......................................................................... 184,622,887 232,182,949
-------------- -------------
End of period (including distributions in excess of and undistributed net
investment income of ($26,964) and $853,073, respectively)................................ $ 204,439,340 $ 184,622,887
============== =============
</TABLE>
* ANALYSIS OF COMMON SHAREHOLDER TRANSACTIONS:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------
1995 1994
------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Shares outstanding, beginning of period................................. 14,645,024 $136,315,827 14,498,442 $ 135,067,998
Shares issued to common shareholders for reinvestment of
distributions......................................................... 176,117 1,464,283 146,582 1,256,928
Reclassification of undistributed net investment income................. -- -- -- ( 9,099)
---------- ------------ ---------- -------------
Shares outstanding, end of period....................................... 14,821,141 $137,780,110 14,645,024 $ 136,315,827
========== ============ ========== =============
</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. THE
FOOTNOTE ILLUSTRATES ANY RECLASSIFICATIONS OF SHARE CAPITAL AMOUNTS, THE NUMBER
OF COMMON SHARES OUTSTANDING AT THE BEGINNING OF THE PERIOD, REINVESTED AND
OUTSTANDING AT THE END OF THE PERIOD, FOR THE LAST TWO PERIODS, ALONG WITH THE
CORRESPONDING DOLLAR VALUE.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a Common Share outstanding throughout the periods indicated,
investment returns, key ratios and supplemental data are listed as follows:
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------
COMMON SHARES 1995 1994 1993 (a)1992(a) 1991
PER SHARE OPERATING PERFORMANCE ---- ---- ---- ---------- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $ 7.93 $ 11.29 $ 10.47 $ 9.54 $ 7.77
------------ ------------ ------------ ------------ ------------
Net Investment Income............................... 0.95 0.89 0.90 0.92 1.00
Net Realized and Unrealized Gain (Loss)
on Investments.................................... 1.30 (2.86) 1.25 0.95 1.86
------------ ------------ ------------ ------------ ------------
Total from Investment Operations................. 2.25 (1.97) 2.15 1.87 2.86
------------ ------------ ------------ ------------ ------------
Less Distributions:
Dividends to DARTS Shareholders................... (0.21) (0.14) (0.13) (0.14) (0.25)
Dividends from Accumulated Net Investment
Income to Common Shareholders.................... (0.80) (1.00) (0.64) (0.54) (0.65)
Distributions from Net Realized Short-term
Capital Gains on Investments to
Common Shareholders.............................. -- (0.25) (0.56) (0.26) (0.19)
------------ ------------ ------------ ------------ ------------
Total Distributions.............................. (1.01) (1.39) (1.33) (0.94) (1.09)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period...................... $ 9.17 $ 7.93 $ 11.29 $ 10.47 $ 9.54
============ ============ ============ ============ ============
Per Share Market Value, End of Period............... $ 9.000 $ 8.000 $ 10.875 $ 10.500 $ 9.000
Total Investment Return at Market Value............. 23.68% (16.05%) 15.66% 26.52% 8.40%
RATIOS AND SUPPLEMENTAL DATA
Net Assets Applicable to Common Shares,
End of Period..................................... $135,939,340 $116,122,887 $163,682,949 $151,458,764 $137,346,639
Ratio of Expenses to Average Net Assets *........... 1.32% 1.29% 1.40% 1.37% 1.48%
Ratio of Net Investment Income to
Average Net Assets *.............................. 7.29% 6.42% 5.62% 6.46% 7.53%
Portfolio Turnover Rate............................. 74% 56% 69% 100% 101%
SENIOR SECURITIES
Total DARTS Outstanding............................. $ 68,500,000 $ 68,500,000 $ 68,500,000 $ 68,500,000 $ 68,500,000
Asset Coverage per Unit (b)......................... $ 290,238 $ 271,736 $ 342,383 $ 318,829 $ 290,615
Involuntary Liquidation Preference per Unit (c)..... $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Approximate Market Value per Unit (c)............... $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
</TABLE>
** Ratios calculated on the basis of expenses and net investment income
applicable to both common and preferred shares relative to the average net
assets for both common and preferred shares.
(a) Prior to the assumption of the advisory contract on May 6, 1992 by John
Hancock Advisers, Inc., the Fund was advised by Patriot Advisers, Inc.
(b) Calculated by subtracting the Fund's total liabilities (not including the
DARTS) from the Fund's total assets and dividing such amount by the number
of DARTS outstanding as of the applicable 1940 Act Evaluation Date.
(c) Plus accumulated and unpaid dividends.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
FUND ON SEPTEMBER 30, 1995. IT'S DIVIDED INTO FIVE MAIN CATEGORIES: PREFERRED
STOCKS, COMMON STOCKS, CAPITAL SECURITIES, TRUST ORIGINATED PREFERRED SECURITIES
AND SHORT-TERM INVESTMENTS. THE STOCKS, CAPITAL SECURITIES AND TRUST ORIGINATED
PREFERRED SECURITIES ARE FURTHER BROKEN DOWN BY INDUSTRY GROUPS. UNDER EACH
INDUSTRY GROUP IS A LIST OF THE STOCKS OWNED BY THE FUND. SHORT-TERM
INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED LAST.
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
September 30, 1995
- --------------------------------------------------------------------------------
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
PREFERRED STOCKS
AUTO/TRUCK (2.17%)
Ford Motor Co., 8.25%,
Depositary Shares, Ser B................... 60,000* $ 1,642,500
General Motors Corp., 9.12%,
Depositary Shares, Ser G................... 100,000 2,787,500
------------
4,430,000
------------
BANKS - FOREIGN (0.65%)
Banesto Holdings Ltd., 10.50%,
Gtd Ser A (Guernsey) (R)................... 50,000 1,331,250
------------
BANKS - U.S. (10.56%)
Ahmanson, H.F. & Co., 9.60%,
Depositary Shares, Ser B................... 106,300* 2,763,800
Bank of Boston Corp., 8.60%,
Depositary Shares, Ser E................... 148,654 3,846,422
BankAmerica Corp., 9.00%, Ser H............. 30,000* 787,500
BankAmerica Corp., 9.625%, Ser F............ 60,000 1,552,500
Chase Manhattan Corp., 9.76%, Ser H......... 26,700 744,263
Citicorp, 7.75%, Depositary Shares,
Ser 22..................................... 40,000* 1,035,000
First Fidelity Bancorporation, 10.64%,
Depositary Shares, Ser F................... 30,000 783,750
First Interstate Bancorp, 9.875%,
Depositary Shares, Ser F................... 65,000 1,698,125
LaSalle National Corp., 8.75%, Ser K (R).... 60,000 3,120,000
Mellon Bank Corp., 9.60%, Ser I............. 55,000* 1,450,625
Shawmut National Corp., 9.35%,
Depositary Shares.......................... 140,000* 3,797,500
------------
21,579,485
------------
COMPUTER SERVICES (0.38%)
Comdisco, Inc., 8.75%, Ser A................ 30,900 780,225
------------
CONGLOMERATE (0.48%)
Grand Metropolitan Deleware, 9.42%,
Gtd Ser A.................................. 35,420* 991,760
------------
EQUIPMENT LEASING (0.88%)
AMERCO, 8.50%, Ser A........................ 80,000 1,810,000
------------
FINANCIAL SERVICES (1.67%)
Merrill Lynch & Co., 9.00%, Depositary
Shares, Ser A.............................. 30,000* 840,000
Morgan Stanley Group, Inc., 8.88%,
Depositary Shares.......................... 30,000 776,250
Salomon, Inc., 8.08%, Depositary
Shares, Ser D.............................. 50,000 1,243,750
Santander Finance Ltd., 7.375%,
Gtd Ser A (Cayman Islands)................. 25,000* 546,875
------------
3,406,875
------------
INSURANCE (2.61%)
Progressive Corp., 9.375%, Ser A............ 60,000 1,530,000
Provident Life & Accident Insurance Co. of
America, 8.10%, Depositary Shares.......... 41,500 1,079,000
SunAmerica, Inc., 9.25%, Ser B.............. 50,000 1,318,750
Travelers Group, Inc., 9.25%, Depositary
Shares, Ser D.............................. 54,000* 1,417,500
------------
5,345,250
------------
OIL & GAS (6.73%)
Coastal Corp., $2.125, Ser H
.............................................. 128,500* 3,228,563
Elf Overseas Ltd., 8.50%, Gtd Ser A
(Cayman Islands)........................... 150,000 3,862,500
ENSERCH Corp., Adjustable Rate
Preferred ("ARP"), Depositary
Shares, Ser F.............................. 25,000 543,750
Enterprise Oil PLC, 10.50%, American
Depositary Receipt ("ADR"), Ser A
(United Kingdom)........................... 24,000 624,000
Lasmo PLC, 10.00%, ADR, Ser A
(United Kingdom)........................... 117,500 2,805,312
Phillips Gas Co., 9.32%, Ser A.............. 101,100 2,691,788
------------
13,755,913
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
PAPER (1.98%)
Boise Cascade Corp., 9.40%, Ser F....... 35,000 $ 927,500
Bowater, Inc., 8.40%, Depositary
Shares, Ser C.......................... 120,000 3,120,000
-----------
4,047,500
-----------
PUBLISHING (0.37%)
Newscorp Overseas Ltd., 8.625%,
Gtd Ser A (Cayman Islands)............. 30,000 761,250
-----------
UTILITIES (30.47%)
Baltimore Gas & Electric Co., 6.99%..... 25,000* 2,531,250
Boston Edison Co., 4.25% .............. 24,777* 1,412,289
CL & P Capital Corp., 9.30%, Ser A...... 61,050* 1,617,825
Central Maine Power Co., 7.999%, Ser A.. 10,000 960,000
Central Maine Power Co., 8.875% (R)..... 16,000 1,536,000
Columbus Southern Power Corp., 7.875% 20,000 2,130,000
Columbus Southern Power Corp., 9.50%,
Ser 02/01/15........................... 7,000* 749,000
Commonwealth Edison Co., $7.24.......... 22,000 2,068,000
Commonwealth Edison Co., $8.40, Ser A... 23,873 2,315,681
Consolidated Edison Co. of NY,
Inc., 5.75%, Ser E..................... 12,882* 1,094,970
Detroit Edison Co., 7.36%............... 15,300 1,453,500
Detroit Edison Co., 7.75%............... 60,000 1,507,500
Florida Power & Light Co., 7.28%, Ser F. 31,697 3,169,700
Florida Power Corp., 7.40%.............. 6,474 650,637
Florida Power Corp., 7.76%.............. 13,600 1,397,400
GTE Florida, Inc., 8.16%................ 25,000 2,575,000
GTE North, Inc., $7.60, Ser IND......... 11,000 1,111,000
Georgia Power Co., $7.80................ 10,000* 1,000,000
Gulf States Utilities Co., $8.52........ 18,996 1,776,126
Gulf States Utilities Co., $9.96........ 8,900* 885,550
Gulf States Utilities Co., ARP, Depository
Shares, Ser B........................... 27,386 1,314,528
Houston Lighting & Power Co., $8.12...... 12,500* 1,278,125
Idaho Power Co., 7.07%................... 13,000* 1,322,750
MCN Michigan, Limited Partnership,
9.375%, Ser A.......................... 140,000* 3,745,000
Massachusetts Electric Co., 6.99% ...... 13,500* 1,375,312
Monongahela Power Co., $7.73, Ser L..... 29,500* 3,104,875
New York State Electric & Gas Corp.,
8.95%, Ser 01/01/16.................... 47,000* 1,227,875
PSI Energy, Inc., 7.44%................. 59,600* 1,490,000
PacifiCorp., 8.375%, Ser A.............. 25,000* 637,500
Peco Energy Co., $7.48.................. 13,000* 1,326,000
Public Servic Co. of NH, 10.60%, Ser A.. 25,000* 662,500
Public Service Electric & Gas Co., 6.80. 24,509* 2,230,319
Public Service Electric & Gas Co., 6.92% 25,800* 2,515,500
Texas Utilities Electric Co., $1.875,
Depositary Shares, Ser A............... 50,000 1,256,250
Texas Utilities Electric Co., $7.98..... 26,000 2,665,000
UtiliCorp Capital, Limited Partnership,
8.875%, Ser A.......................... 119,256* 3,055,935
Washington Natural Gas Co.,
8.50%, Ser III......................... 45,000 1,136,250
-----------
62,285,147
-----------
TOTAL PREFERRED STOCKS
(Cost $116,739,599) (58.95)% 120,524,655
------- -----------
COMMON STOCKS
UTILITIES (36.48%)
American Electric Power Co., Inc........ 110,000 4,001,250
Boston Edison Co........................ 175,000 4,812,500
Central & South West Corp............... 84,000 2,142,000
Cinergy Corp. (formerly Cincinnati Gas &
Electric Co.).......................... 225,000 6,271,875
Consolidated Edison Co. of NY, Inc...... 83,000 2,521,125
DPL, Inc................................ 200,000 4,625,000
Dominion Resources, Inc. of VA.......... 92,000 3,461,500
Florida Progress Corp................... 135,150 4,375,481
Houston Industries, Inc................. 66,400 2,929,900
New England Electric System............. 207,000 7,659,000
Northeast Utilities Co.................. 25,000* 609,375
Pacific Gas and Electric Co............. 196,500 5,870,437
Peco Energy Co.......................... 100,000 2,862,500
Potomac Electric Power Co............... 74,400* 1,804,200
Public Service Enterprise Group, Inc.... 98,500 2,930,375
Puget Sound Power & Light Co............ 126,900 2,950,425
Scana Corp.............................. 175,000 4,200,000
Southern Co............................. 105,000 2,480,625
Texas Utilities Co...................... 131,000 4,568,625
Unicom Corp............................. 96,000 2,904,000
Washington Water Power Co............... 37,000* 596,625
-----------
TOTAL COMMON STOCKS
(Cost $77,475,612) (36.48)% 74,576,818
------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
CAPITAL SECURITIES
BANKS - FOREIGN (1.31%)
Australia and New Zealand Banking
Group Ltd., 9.125%, Capital Securities
(Australia).............................. 100,000 $2,687,500
----------
TOTAL CAPITAL SECURITIES
(Cost $2,500,000) (1.31)% 2,687,500
------- ----------
TRUST ORIGINATED PREFERRED SECURITIES
UTILITIES (1.23%)
Southern Union Financing I, 9.48%,
Ser 05/17/25............................. 50,000* 1,262,500
Virginia Power Capital Trust I, 8.05%,
Ser 09/30/25............................. 50,000* 1,256,250
----------
TOTAL TRUST ORIGINATED
PREFERRED SECURITIES
(Cost $2,500,000) (1.23)% 2,518,750
------- ----------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE
ISSUER, DESCRIPTION RATE (000'S OMITTED) MARKET VALUE
- ------------------- -------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
COMMERCIAL PAPER (0.47%)
Cheveron Oil Finance Co.
10-02-95.................... 6.00% 950 $ 949,842
------------
TOTAL SHORT-TERM INVESTMENTS (0.47)% 949,842
------ ------------
TOTAL INVESTMENTS (98.44)% $201,257,565
====== ============
</TABLE>
* Securities, other than short-term investments, newly added to the portfolio
during the period ended September 30, 1995.
(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. See Note A
of the Notes to Financial Statements for valuation policy. Rule 144A
securities amounted to $5,987,250 as of September 30, 1995.
Parenthetical disclosure of a foreign country in the security description
represents country of foreign issuer, however; security is U.S. dollar
denominated.
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 - Patriot Premium Dividend Fund I
NOTE A --
ACCOUNTING POLICIES
Patriot Premium Dividend Fund I (the "Fund") is a diversified closed-end
management investment company, registered under the Investment Company Act of
1940, as amended. 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.
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 $2,648,843 of a 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 gains distributions will be made. The carryforwards expire as
follows:September 30, 2002 -- $1,300,401 and September 30, 2003 -- $1,348,442.
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. Due to
permanent book/tax differences in accounting for certain transactions, this has
the potential for treating certain distributions as return of capital as opposed
to distributions of net investment income or realized capital gains. The Fund
has adjusted for the cumulative effect of such permanent book/tax differences
through September 30, 1995, which has no effect on the Fund's net assets, net
investment income or net realized gains.
DEFERRED ORGANIZATION EXPENSES Expenses incurred in connection with the
organization and reorganization of the Fund have been capitalized and are being
charged ratably to the Fund's operations over a five-year period that began with
the commencement of the investment operations of the Fund and from the effective
date of the reorganization.
DUTCH AUCTION RATE TRANSFERABLE SECURITIES PREFERRED STOCK SERIES A (DARTS) The
Fund issued 685 shares of Dutch Auction Rate Transferable Securities Preferred
Stock Series A (DARTS) concurrently with the issuance of its Common Shares in
the public offering. The underwriting discount was recorded as a reduction of
the capital of the Common Shares. Dividends on the DARTS, which accrue daily,
are cumulative at a rate which was established at the offering of the DARTS and
have been reset every 49 days thereafter by auction. Dividend rates ranged from
3.82% to 4.94% during the period ended September 30, 1995.
The DARTS are redeemable at the option of the Fund, at a redemption price
equal to $100,000 per share, plus accumulated and unpaid dividends on any
dividend payment date. The DARTS are also subject to mandatory redemption at a
redemption price equal to $100,000 per share, plus accumulated and unpaid
dividends, if the Fund is in default on its asset coverage requirements with
respect to the DARTS. If the dividend 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 Shares 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
Shares. The DARTS have a liquidation preference of $100,000 per share, plus
accumulated and unpaid dividends. The Fund is required to maintain certain asset
coverage with respects to the DARTS, as defined in the Fund's By-Laws.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Patriot Premium Dividend Fund I
NOTE B --
MANAGEMENT FEE AND TRANSACTIONS
WITH AFFILIATES AND OTHERS
Under the investment management contract, the Fund pays a monthly management fee
to John Hancock Advisers, Inc. (the "Adviser"), a wholly-owned subsidiary of The
Berkeley Financial Group, for a continuous investment program equivalent, on an
annual basis, to the sum of .50 of 1% of the Fund's average weekly net assets,
plus 5% of the Fund's weekly gross income. The Adviser's total fee is limited to
a maximum amount equal to 1% annually of the Fund's average weekly net assets.
For the period ended September 30, 1995, the advisory fee incurred did not
exceed the maximum advisory fee allowed.
The Fund has entered into 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 services with the shareholders. The Adviser receives a monthly
administration fee equivalent, on an annual basis, to .10 of 1% of the Fund's
average weekly net assets.
Each unaffiliated Trustee is entitled, as compensation for his or her
services, to an annual fee plus remuneration for attendance at various meetings.
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 into 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 and the investment to cover the liability will be marked
to market on a periodic basis to reflect income earned by the investment.
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 period
ended September 30, 1995 aggregated $135,224,344 and $134,789,654,
respectively. Purchases and proceeds from sales of obligations of the U.S.
government and its agencies during the period ended September 30, 1995
aggregated $4,484,883 and $4,519,688, respectively.
The cost of investments owned at September 30, 1995 for federal income tax
purposes was $200,778,214. Gross unrealized appreciation and depreciation of
investments aggregated $6,697,084 and $6,217,733, respectively, resulting in
net unrealized appreciation of $479,351 for federal tax purposes.
14
<PAGE> 15
John Hancock Funds - Patriot Premium Dividend Fund I
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
John Hancock Patriot Premium Dividend Fund I:
We have audited the accompanying statement of assets and liabilities of John
Hancock Patriot Premium Dividend Fund I (the Fund), including the schedule of
investments, as of September 30, 1995, the related statement of operations for
the year then ended, and the statement of changes in net assets and the
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
John Hancock Patriot Premium Dividend Fund I as of September 30, 1995, the
results of its operations for the year then ended, and the changes in its net
assets and the financial highlights for the periods presented, in conformity
with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts
November 1, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished with
respect to the taxable distributions of the Fund during its fiscal year ended
September 30, 1995.
The Board of Trustees of the Fund declared dividends on the Common Shares
from undistributed net investment income amounting to $0.80 per share, for the
year ended September 30, 1995. Distributions to preferred and common
shareholders were 100% qualified for the dividends received deductions.
Shareholders will be mailed a 1995 U.S. Treasury Department Form 1099-DIV in
January 1996 representing their proportionate share.
15
<PAGE> 16
John Hancock Funds - Patriot Premium Dividend Fund I
INVESTMENT OBJECTIVE AND POLICY
The Fund's investment objective is to provide high current income, consistent
with modest growth of capital for holders of its common shares. The Fund will
pursue its objective by investing in a diversified portfolio of dividend-paying
preferred and common equity securities.
DIVIDEND REINVESTMENT PLAN
The Fund provides shareholders with 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 State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, 02210, as agent for the common shareholders 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 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,
nonparticipants 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 for the dividend is equal to or exceeds their net asset value as
determined on the payment date, participants will be issued Common Shares (out
of authorized but unissued shares) at a value equal to the higher of net asset
value or 95% of the market price. If the net asset value exceeds the market
price of the Common Shares at such time, or if the Board of Trustees declares a
dividend payable only in cash, the Plan Agent will, as agent for Plan
participants, buy shares in the open market, on the New York Stock Exchange or
elsewhere, for the participant's accounts. Such purchases will be made promptly
after the payable date for such dividend and, in any event, prior to the next
ex-dividend date, after such date except where necessary to comply with federal
securities laws. If, before the Plan Agent has completed its purchases, the
market price exceeds the net asset value of the Common Shares, the average per
share purchase price paid by the Plan Agent may exceed the net asset value of
the Common Shares, resulting in the acquisition of fewer shares than if the
dividend had been paid in shares issued by the Fund.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent. Such withdrawal will be effective immediately if received not
less than ten days prior to a dividend record date; otherwise, it will be
effective for all subsequent dividend record dates. When a participant withdraws
from the Plan or upon termination of the Plan as provided below, certificates
for whole Common Shares credited to his or her account under the Plan will be
issued and a cash payment will be made for any fraction of a Share credited to
such account.
The Plan Agent maintains each shareholder's account in the Plan and
furnishes monthly written confirmations of all transactions in the accounts,
including information needed by the shareholders for personal and tax records.
Common Shares in the account of each Plan participant will be held by the Plan
Agent in non-certificated form in the name of the participant. Proxy material
relating the shareholder's meetings of the Fund will include those shares
purchased as well as shares held pursuant to the Plan.
There will be no brokerage charges with respect to Common Shares issued
directly by the Fund. However, each participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of dividends and distributions. In
each case, the cost per share of the shares purchased for each participant's
account will be the average cost, including brokerage commissions, of any shares
purchased on the open market plus the cost of any shares issued by the Fund.
There are no other charges to participants for reinvesting dividends or capital
gain distributions, except for certain brokerage commissions, as described
above.
The automatic 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
16
<PAGE> 17
John Hancock Funds - Patriot Premium Dividend Fund I
dividend to be reported on Form 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 to purchase them (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, State Street Bank and Trust Company, at P. O. Box
8209, Boston, Massachusetts 02266-8209 (telephone 1-800-426-5523).
17
<PAGE> 18
NOTES
John Hancock Funds - Patriot Premium Dividend Fund I
18
<PAGE> 19
NOTES
John Hancock Funds - Patriot Premium Dividend Fund I
19
<PAGE> 20
[LOGO] JOHN HANCOCK FUNDS Bulk Rate
A GLOBAL INVESTMENT MANAGEMENT FIRM U.S. Postage
101 HUNTINGTON AVENUE BOSTON, MA 02199-7603 PAID
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 P100A 9/95
