| UNITED STATES | |
| SECURITIES AND EXCHANGE COMMISSION | |
| Washington, D.C. 20549 | |
| FORM N-Q | |
| QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED | |
| MANAGEMENT INVESTMENT COMPANIES | |
| Investment Company Act file number 811-05908 | |
| John Hancock Premium Dividend Fund | |
| (Exact name of registrant as specified in charter) | |
| 601 Congress Street, Boston, Massachusetts 02210 | |
| (Address of principal executive offices) (Zip code) | |
| Salvatore Schaivone | |
| Treasurer | |
| 601 Congress Street | |
| Boston, Massachusetts 02210 | |
| (Name and address of agent for service) | |
| Registrant's telephone number, including area code: 617-663-4497 | |
| Date of fiscal year end: | October 31 |
| Date of reporting period: | July 31, 2011 |
ITEM 1. SCHEDULE OF INVESTMENTS
Premium Dividend Fund
As of 7-31-11 (Unaudited)
| Shares | Value | |
| Preferred Securities 92.82% (61.26% of Total Investments) | $596,850,402 | |
|
|
||
| (Cost $609,927,319) | ||
| Consumer Discretionary 1.07% | 6,881,114 | |
|
|
||
| Media 1.07% | ||
| Comcast Corp., 7.000% (Z) | 42,530 | 1,082,814 |
| Viacom, Inc., 6.850% (L)(Z) | 230,000 | 5,798,300 |
| Consumer Staples 3.20% | 20,560,922 | |
|
|
||
| Food & Staples Retailing 3.20% | ||
| Ocean Spray Cranberries, Inc., Series A, 6.250% (S)(Z) | 224,250 | 20,560,922 |
| Energy 5.17% | 33,233,205 | |
|
|
||
| Oil, Gas & Consumable Fuels 5.17% | ||
| Apache Corp., Series D, 6.000% (L)(Z) | 80,500 | 5,243,770 |
| Nexen, Inc., 7.350% | 1,112,900 | 27,989,435 |
| Financials 40.43% | 259,973,322 | |
|
|
||
| Capital Markets 2.30% | ||
| Credit Suisse Guernsey, 7.900% (Z) | 174,000 | 4,602,300 |
| Lehman Brothers Holdings, Inc., Depositary Shares, Series D, | ||
| 5.670% (I) | 488,600 | 34,202 |
| Morgan Stanley Capital Trust III, 6.250% (Z) | 99,900 | 2,383,614 |
| The Goldman Sachs Group, Inc., Series B, 6.200% (Z) | 312,500 | 7,784,375 |
| Commercial Banks 8.73% | ||
| Barclays Bank PLC, Series 3, 7.100% | 95,000 | 2,298,050 |
| Barclays Bank PLC, Series 5, 8.125% | 277,000 | 7,016,410 |
| HSBC Holdings PLC, Series A, 6.200% (Z) | 25,000 | 606,000 |
| Santander Finance Preferred SA Unipersonal, Series 10, 10.500% | ||
| (Z) | 234,600 | 6,535,956 |
| Santander Holdings USA, Inc., Series C, 7.300% (Z) | 456,000 | 11,422,800 |
| Wells Fargo & Company, 8.000% (L)(Z) | 1,017,000 | 28,221,750 |
| Consumer Finance 7.02% | ||
| HSBC Finance Corp., Depositary Shares, Series B, 6.360% (Z) | 35,600 | 851,552 |
| HSBC USA, Inc., 2.858% (L)(Z) | 499,700 | 24,250,441 |
| SLM Corp., Series A, 6.970% (Z) | 445,500 | 20,047,500 |
| Diversified Financial Services 15.61% | ||
| Bank of America Corp., 6.375% (L)(Z) | 1,160,000 | 25,311,200 |
| Bank of America Corp., 6.625% (L)(Z) | 360,000 | 8,262,000 |
| Bank of America Corp., 8.200% (Z) | 35,000 | 876,050 |
| Bank of America Corp., Depositary Shares, Series D, 6.204% (L)(Z) | 960,000 | 21,158,400 |
| Bank of America Corp., Series MER, 8.625% (Z) | 102,000 | 2,605,080 |
| Citigroup Capital VII, 7.125% | 35,000 | 878,850 |
| Citigroup Capital VIII, 6.950% | 36,600 | 906,216 |
| Citigroup Capital XII (8.500% to 3-30-15, then 3 month LIBOR + | ||
| 5.870%) (Z) | 291,500 | 7,500,295 |
| Citigroup Capital XIII (7.875% to 10-30-15, then 3 month LIBOR + | ||
| 6.370%) | 26,000 | 703,820 |
| Citigroup, Inc., 8.125% (Z) | 328,830 | 8,861,969 |
| Deutsche Bank Contingent Capital Trust II, 6.550% (L)(Z) | 285,275 | 6,726,785 |
| Deutsche Bank Contingent Capital Trust III, 7.600% (L)(Z) | 657,000 | 16,582,680 |
| 1 |
Premium Dividend Fund
As of 7-31-11 (Unaudited)
| Shares | Value | |
| Financials (continued) | ||
|
|
||
| Insurance 5.42% | ||
| MetLife, Inc., Series B, 6.500% (L)(Z) | 1,057,000 | $26,414,430 |
| Principal Financial Group, Inc., Series B (6.518% to 6-30-35, then | ||
| higher of 10 year Constant Maturity Treasury (CMT), or 30 year | ||
| CMT or 3 month LIBOR + 2.100%) (Z) | 160,000 | 4,016,000 |
| Prudential PLC, 6.750% (Z) | 176,100 | 4,414,827 |
| Real Estate Investment Trusts 1.27% | ||
| Kimco Realty Company, Depositary Shares, Series F, 6.650% | 200,000 | 4,974,000 |
| Public Storage, Inc., 6.125% (Z) | 35,000 | 877,100 |
| Wachovia Preferred Funding Corp., Series A, 7.250% | 90,500 | 2,309,560 |
| Thrifts & Mortgage Finance 0.08% | ||
| Federal Home Loan Mortgage Corp., Series Z (8.375% to 12-31-12, | ||
| then higher of 3 month LIBOR + 4.160% or 7.875%) (I) | 55,000 | 159,500 |
| Federal National Mortgage Association, Series S (8.250% to 12-31- | ||
| 10, then higher of 3 month LIBOR + 4.230% or 7.750%) (I) | 159,500 | 379,610 |
| Telecommunication Services 6.55% | 42,133,605 | |
|
|
||
| Diversified Telecommunication Services 4.11% | ||
| Qwest Corp., 7.375% (Z) | 1,018,900 | 26,440,455 |
| Touch America Holdings, Inc., 6.875% (I) | 161,778 | 0 |
| Wireless Telecommunication Services 2.44% | ||
| Telephone & Data Systems, Inc., 6.875% (L)(Z) | 166,250 | 4,176,200 |
| Telephone & Data Systems, Inc., 6.625% (Z) | 280,000 | 6,812,400 |
| United States Cellular Corp., 6.950% | 185,000 | 4,704,550 |
| Utilities 36.40% | 234,068,234 | |
|
|
||
| Electric Utilities 26.82% | ||
| Alabama Power Company, 5.200% (L)(Z) | 1,178,600 | 29,358,926 |
| Carolina Power & Light Company, 5.440% (Z) | 11,382 | 1,107,967 |
| Duquesne Light Company, 6.500% | 519,900 | 25,816,310 |
| Entergy Arkansas, Inc., 6.450% | 350,000 | 8,596,875 |
| Entergy Mississippi, Inc., 6.250% | 667,000 | 16,758,375 |
| FPC Capital I, Series A, 7.100% (L)(Z) | 240,000 | 6,120,000 |
| HECO Capital Trust III, 6.500% (Z) | 181,000 | 4,534,050 |
| NSTAR Electric Company, 4.780% (Z) | 100,000 | 9,278,130 |
| PPL Electric Utilities Corp., Depositary Shares, 6.250% (Z) | 1,150,000 | 28,842,000 |
| Southern California Edison Company, 6.125% (Z) | 195,000 | 18,884,541 |
| Southern California Edison Company, Series C, 6.000% (Z) | 150,877 | 14,701,078 |
| Westar Energy, Inc., 6.100% (Z) | 333,700 | 8,459,295 |
| Independent Power Producers & Energy Traders 1.36% | ||
| Constellation Energy Group, Inc., Series A, 8.625% (L)(Z) | 323,600 | 8,766,324 |
| Multi-Utilities 8.22% | ||
| Baltimore Gas & Electric Company, Series 1993, 6.700% (Z) | 20,250 | 2,067,399 |
| Baltimore Gas & Electric Company, Series 1995, 6.990% (Z) | 134,000 | 13,672,194 |
| BGE Capital Trust II, 6.200% | 616,000 | 15,412,320 |
| Consolidated Edison Company of New York, Inc., Series A, 5.000% | 25,180 | 2,452,532 |
| Consolidated Edison Company of New York, Inc., Series C, 4.650% | 18,320 | 1,667,120 |
| Consolidated Edison Company of New York, Inc., Series D, 4.650% | 5,000 | 422,764 |
| Interstate Power & Light Company, Series B, 8.375% (Z) | 132,800 | 3,808,704 |
| Union Electric Company, 3.700% (Z) | 12,262 | 813,124 |
| Virginia Electric & Power Company, 6.980% (Z) | 45,500 | 4,804,518 |
| 2 |
Premium Dividend Fund
As of 7-31-11 (Unaudited)
| Shares | Value | |
| Utilities (continued) | ||
|
|
||
| Xcel Energy, Inc., Series B, 4.080% (Z) | 12,110 | $998,469 |
| Xcel Energy, Inc., Series D, 4.110% (L)(Z) | 42,671 | 3,392,344 |
| Xcel Energy, Inc., Series E, 4.160% (Z) | 41,020 | 3,332,875 |
| Shares | Value | |
| Common Stocks 54.48% (35.96% of Total Investments) | $350,319,543 | |
|
|
||
| (Cost $321,266,149) | ||
| Energy 6.11% | 39,256,075 | |
|
|
||
| Oil, Gas & Consumable Fuels 6.11% | ||
| BP PLC, ADR (Z) | 100,000 | 4,544,000 |
| Chevron Corp. (L)(Z) | 110,000 | 11,442,200 |
| ConocoPhillips (L)(Z) | 110,000 | 7,918,900 |
| Kinder Morgan, Inc. | 10,000 | 282,300 |
| Spectra Energy Corp. (L)(Z) | 222,500 | 6,011,950 |
| Total SA, ADR | 167,500 | 9,056,725 |
| Industrials 0.36% | 2,328,300 | |
|
|
||
| Industrial Conglomerates 0.36% | ||
| General Electric Company (L)(Z) | 130,000 | 2,328,300 |
| Telecommunication Services 3.83% | 24,612,775 | |
|
|
||
| Diversified Telecommunication Services 3.83% | ||
| AT&T, Inc. (L)(Z) | 410,000 | 11,996,600 |
| Verizon Communications, Inc. (L)(Z) | 357,500 | 12,616,175 |
| Utilities 44.18% | 284,122,393 | |
|
|
||
| Electric Utilities 12.84% | ||
| American Electric Power Company, Inc. (L)(Z) | 220,000 | 8,109,200 |
| Duke Energy Corp. (L)(Z) | 355,000 | 6,603,000 |
| Entergy Corp. | 165,000 | 11,022,000 |
| FirstEnergy Corp. (Z) | 410,000 | 18,306,500 |
| Northeast Utilities (L)(Z) | 110,000 | 3,740,000 |
| PNM Resources, Inc. (Z) | 500,000 | 7,510,000 |
| Progress Energy, Inc. (L)(Z) | 385,000 | 17,994,900 |
| Progress Energy, Inc. (I) | 337,750 | 33,775 |
| Southern Company | 75,000 | 2,965,500 |
| UIL Holding Corp. | 196,000 | 6,258,280 |
| Gas Utilities 0.85% | ||
| Atmos Energy Corp. (L)(Z) | 110,000 | 3,677,300 |
| ONEOK, Inc. | 25,000 | 1,819,750 |
| Multi-Utilities 30.49% | ||
| Alliant Energy Corp. (Z) | 447,520 | 17,636,763 |
| Ameren Corp. (L)(Z) | 80,000 | 2,305,600 |
| Black Hills Corp. (L)(Z) | 193,000 | 5,766,840 |
| CH Energy Group, Inc. | 600,000 | 30,642,000 |
| Consolidated Edison, Inc. (L)(Z) | 60,000 | 3,156,000 |
| Dominion Resources, Inc. (L)(Z) | 195,000 | 9,447,750 |
| DTE Energy Company (L)(Z) | 410,000 | 20,434,400 |
| Integrys Energy Group, Inc. (L)(Z) | 240,000 | 12,050,400 |
| National Grid PLC, ADR | 180,000 | 8,854,200 |
| 3 |
Premium Dividend Fund
As of 7-31-11 (Unaudited)
| Shares | Value | |||
| Utilities (continued) | ||||
|
|
||||
| NiSource, Inc. (Z) | 560,650 | $11,285,885 | ||
| NSTAR (L)(Z) | 545,000 | 24,159,850 | ||
| OGE Energy Corp. (L)(Z) | 255,000 | 12,760,200 | ||
| Public Service Enterprise Group, Inc. | 120,000 | 3,930,000 | ||
| TECO Energy, Inc. (L)(Z) | 570,000 | 10,562,100 | ||
| Vectren Corp. (L)(Z) | 220,000 | 5,810,200 | ||
| Xcel Energy, Inc. (L)(Z) | 720,000 | 17,280,000 | ||
| Maturity | Par value | |||
| Yield* | date | Value | ||
| Short-Term Investments 4.21% (2.78% of Total Investments) | $27,100,000 | |||
|
|
||||
| (Cost $27,100,000) | ||||
| Commercial Paper 4.21% | 27,100,000 | |||
|
|
||||
| Chevron Corp. | 0.040% | 8-1-11 | $27,100,000 | 27,100,000 |
| Total investments (Cost $958,293,468)† 151.51% | $974,269,945 | |||
|
|
||||
| Other assets and liabilities, net (51.51%) | ($331,230,060) | |||
|
|
||||
| Total net assets 100.00% | $643,039,885 | |||
|
|
||||
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the Fund.
ADR American Depositary Receipts
LIBOR London Interbank Offered Rate
(I) Non-income producing security.
(L) All or a portion of this security is on loan as of 7-31-11, and is part of segregated collateral pursuant to the Committed Facility Agreement. Total value of securities on loan at 7-31-11 was $279,887,161.
(S) 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.
(Z) All or a portion of this security is segregated as collateral pursuant to the Committed Facility Agreement. Total collateral value at 7-31-11 was $652,646,875.
* Yield represents either the annualized yield at the date of purchase.
† At 7-31-11, the aggregate cost of investment securities for federal income tax purposes was $961,215,341. Net unrealized appreciation aggregated $13,054,604, of which $66,441,281 related to appreciated investment securities and $53,386,677 related to depreciated investment securities.
| 4 |
Note to the Schedule of Investments (Unaudited)
Security valuation. Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. The Fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the Fund’s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the values by input classification of the Fund’s investments as of July 31, 2011, by major security category or type:
| Level 2 | Level 3 | ||||||||
| Total Market | Level 1 | Significant | Significant | ||||||
| Value at | Quoted | Observable | Unobservable | ||||||
| 7-31-11 | Price | Inputs | Inputs | ||||||
| Preferred Securities | |||||||||
| Consumer Discretionary | $6,881,114 | $6,881,114 | — | — | |||||
| Consumer Staples | 20,560,922 | — | $20,560,922 | — | |||||
| Energy | 33,233,205 | 33,233,205 | — | — | |||||
| Financials | 259,973,322 | 259,973,322 | — | — | |||||
| Telecommunication Services | 42,133,605 | 42,133,605 | — | — | |||||
| Utilities | 234,068,234 | 117,144,959 | 116,923,275 | — | |||||
| Common Stocks | |||||||||
| Energy | 39,256,075 | 39,256,075 | — | — | |||||
| Industrials | 2,328,300 | 2,328,300 | — | — | |||||
| Telecommunication Services | 24,612,775 | 24,612,775 | — | — | |||||
| Utilities | 284,122,393 | 284,122,393 | — | — | |||||
| Short-Term Investments | 27,100,000 | — | 27,100,000 | — | |||||
|
|
|||||||||
| Total Investments in Securities | $974,269,945 | $809,685,748 | $164,584,197 | — | |||||
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. During the nine-month period ended July 31, 2011, there were no significant transfers in or out of Level 1 or Level 2 assets.
In order to value the securities, the Fund uses the following valuation techniques. Equity securities, including exchange-traded funds, held by the Fund are valued at the last sale price or official closing price on the principal securities exchange on which they trade. In the event there were no sales during the day or closing prices are not available, then securities are valued using the last quoted bid or evaluated price. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing service. Certain short-term securities are valued at amortized cost. Other portfolio securities and assets, where market quotations are not readily available, are valued at fair value, as determined in good faith by the Fund’s Pricing Committee, following procedures established by the Board of Trustees.
For additional information on the Fund's significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report.
| 5 |
ITEM 2. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-Q, the registrant's principal executive officer and principal accounting officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
Separate certifications for the registrant's principal executive officer and principal accounting officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
| SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Premium Dividend Fund
| By: | /s/ Keith F. Hartstein |
| ------------------------------ | |
| Keith F. Hartstein | |
| President and Chief Executive Officer | |
| Date: | September 20, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Keith F. Hartstein |
| ------------------------------ | |
| Keith F. Hartstein | |
| President and Chief Executive Officer | |
| Date: | September 20, 2011 |
| By: | /s/ Charles A. Rizzo |
| ------------------------------- | |
| Charles A. Rizzo | |
| Chief Financial Officer | |
| Date: | September 20, 2011 |