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- 21131
John Hancock Preferred Income Fund
(Exact name of registrant as specified in charter)
601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Alfred P. Ouellette, Senior Counsel and Assistant Secretary
601 Congress Street
Boston, Massachusetts 02210
(Name and address of agent for service)
| Registrant's telephone number, including area code: | 617-663-4324 |
| Date of fiscal year end: | July 31 |
Date of reporting period: April 30, 2007
ITEM 1. SCHEDULE OF INVESTMENTS
John Hancock
Preferred Income Fund
Securities owned by the Fund on
April 30, 2007 (unaudited)
| Interest | Maturity | Credit | Par value | |||
| Issuer, description | rate | date | rating (A) | (000) | Value | |
| Bonds 2.17% | $19,766,263 | |||||
|
| ||||||
| (Cost $19,771,543) | ||||||
| Electric Utilities 1.19% | 10,820,412 | |||||
|
| ||||||
| Black Hills Corp., | ||||||
| Note | 6.500% | 05-15-13 | BBB- | $5,950 | 6,043,237 | |
| Entergy Gulf States, Inc., | ||||||
| 1st Mtg Bond | 6.200 | 07-01-33 | BBB+ | 5,000 | 4,777,175 | |
| Gas Utilities 0.98% | 8,945,851 | |||||
|
| ||||||
| Southern Union Co., | ||||||
| Jr Sub Note Ser A (P) | 7.200 | 11-01-66 | BB | 8,800 | 8,945,851 | |
| Credit | Par value | |||||
| Issuer, description, maturity date | rating (A) | (000) | Value | |||
| Capital preferred securities 6.89% | $62,760,978 | |||||
|
| ||||||
| (Cost $55,465,089) | ||||||
| Diversified Banks 0.83% | 7,527,450 | |||||
|
| ||||||
| Lloyds TSB Bank Plc, 6.90%, 11-29-49 (United | ||||||
| Kingdom) | A+ | $7,500 | 7,527,450 | |||
| Electric Utilities 3.21% | 29,220,000 | |||||
|
| ||||||
| DPL Capital Trust II, 8.125%, 09-01-31 | BB+ | 24,000 | 29,220,000 | |||
| Gas Utilities 2.85% | 26,013,528 | |||||
|
| ||||||
| KN Capital Trust I, 8.56%, Ser B, 04-15-27 | B- | 17,500 | 18,140,360 | |||
| KN Capital Trust III, 7.63%, 04-15-28 | B- | 8,000 | 7,873,168 | |||
| Issuer | Shares | Value | ||||
| Common stocks 3.23% | $29,450,976 | |||||
|
| ||||||
| (Cost $22,962,896) | ||||||
| Electric Utilities 0.48% | 4,406,400 | |||||
|
| ||||||
| Great Plains Energy, Inc. | 135,000 | 4,406,400 | ||||
| Independent Power Producers & Energy Traders 0.79% | 7,213,800 | |||||
|
| ||||||
| TXU Corp. | 110,000 | 7,213,800 | ||||
| Integrated Oil & Gas 0.28% | 2,508,276 | |||||
|
| ||||||
| BP Plc, American Depositary Receipt (ADR) | ||||||
| (United Kingdom) | 37,259 | 2,508,276 | ||||
Page 1
John Hancock
Preferred Income Fund
Securities owned by the Fund on
April 30, 2007 (unaudited)
| Multi-Utilities 1.68% | 15,322,500 | |||||
|
| ||||||
| Alliant Energy Corp. | 190,000 | 8,322,000 | ||||
| TECO Energy, Inc. | 390,000 | 7,000,500 | ||||
| Credit | ||||||
| Issuer, description | rating (A) | Shares | Value | |||
| Preferred stocks 84.32% | $768,652,071 | |||||
|
| ||||||
| (Cost $763,967,578) | ||||||
| Agricultural Products 1.37% | 12,454,413 | |||||
|
| ||||||
| Ocean Spray Cranberries, Inc., 6.25%, | ||||||
| Ser A (S) | BB+ | 143,000 | 12,454,413 | |||
| Automobile Manufacturers 2.03% | 18,504,158 | |||||
|
| ||||||
| Ford Motor Co., 7.50% | CCC+ | 40,000 | 776,400 | |||
| General Motors Corp., 7.25%, Ser 04-15-41 | B- | 378,700 | 7,373,289 | |||
| General Motors Corp., 7.25%, Ser 07-15-41 | B- | 82,000 | 1,603,920 | |||
| General Motors Corp., 7.25%, Ser 02-15-52 | B- | 254,300 | 4,941,049 | |||
| General Motors Corp., 7.375%, Ser 05-15-48 | Caa1 | 65,000 | 1,274,650 | |||
| General Motors Corp., 7.375%, Ser 10-01-51 | B- | 129,000 | 2,534,850 | |||
| Broadcasting & Cable TV 2.41% | 21,989,100 | |||||
|
| ||||||
| Comcast Corp., 7.00% | BBB+ | 222,000 | 5,760,900 | |||
| Comcast Corp., 7.00%, Ser B | BBB+ | 629,000 | 16,228,200 | |||
| Consumer Finance 4.30% | 39,175,279 | |||||
|
| ||||||
| Ford Motor Credit Co., 7.60% | B1 | 315,600 | 7,041,036 | |||
| HSBC Finance Corp., 6.00% | AA- | 134,200 | 3,324,134 | |||
| HSBC Finance Corp., 6.36%, Depositary | ||||||
| Shares, Ser B | A | 297,000 | 7,692,300 | |||
| HSBC Finance Corp., 6.875% | AA- | 399,800 | 10,174,910 | |||
| SLM Corp., 6.00% | A | 194,100 | 4,142,094 | |||
| SLM Corp., 6.97%, Ser A | BBB+ | 137,390 | 6,800,805 | |||
Page 2
John Hancock
Preferred Income Fund
Securities owned by the Fund on
April 30, 2007 (unaudited)
| Diversified Banks 5.26% | 47,903,158 | |||||
|
| ||||||
| BAC Capital Trust IV, 5.875% | A+ | 30,000 | 716,700 | |||
| Bank One Capital Trust VI, 7.20% | A | 81,100 | 2,054,263 | |||
| Fleet Capital Trust VIII, 7.20% | A+ | 464,750 | 11,800,002 | |||
| HSBC Holdings Plc, 6.20%, Ser A (United | ||||||
| Kingdom) | A | 150,000 | 3,801,000 | |||
| Royal Bank of Scotland Group Plc, 5.75%, | ||||||
| Ser L (United Kingdom) | A | 550,900 | 13,232,618 | |||
| Royal Bank of Scotland Group Plc, 6.35%, | ||||||
| Ser N, ADR (United Kingdom) | A | 20,000 | 507,600 | |||
| Santander Finance Preferred SA Unipersonal, | ||||||
| 6.41%, Ser 1 (Spain) | A+ | 225,000 | 5,737,500 | |||
| USB Capital VIII, 6.35%, Ser 1 | A+ | 169,800 | 4,239,906 | |||
| USB Capital X, 6.50% | A+ | 45,000 | 1,137,600 | |||
| Wachovia Preferred Funding Corp., 7.25%, | ||||||
| Ser A | A | 69,000 | 1,931,310 | |||
| Wells Fargo Capital Trust IV, 7.00% | AA- | 108,100 | 2,744,659 | |||
| Electric Utilities 16.08% | 146,648,002 | |||||
|
| ||||||
| Duquesne Light Co., 6.50% | BB+ | 73,650 | 3,697,230 | |||
| Entergy Arkansas, Inc., 6.70% | AAA | 25,300 | 637,813 | |||
| Entergy Mississippi, Inc., 7.25% | A- | 346,000 | 8,836,840 | |||
| FPC Capital I, 7.10%, Ser A | BBB- | 844,691 | 21,488,939 | |||
| FPL Group Capital Trust I, 5.875% | BBB+ | 502,200 | 12,143,196 | |||
| Georgia Power Capital Trust VII, 5.875% | BBB+ | 250,600 | 6,001,870 | |||
| Georgia Power Co., 6.00%, Ser R | A | 395,497 | 9,883,470 | |||
| HECO Capital Trust III, 6.50% | BBB- | 375,400 | 9,613,994 | |||
| Interstate Power & Light Co., 8.375%, Ser B | Baa2 | 700,000 | 22,968,750 | |||
| Northern States Power Co., 8.00% | BBB- | 235,000 | 6,039,500 | |||
| NSTAR Electric Co., 4.78% | A- | 15,143 | 1,362,870 | |||
| PPL Electric Utilities Corp., 6.25%, | ||||||
| Depositary Shares | BBB | 300,000 | 7,884,390 | |||
| PPL Energy Supply, LLC, 7.00% | BBB | 383,660 | 9,925,284 | |||
| Southern California Edison Co., 6.125% | BBB- | 119,000 | 11,870,250 | |||
| Southern Co. Capital Trust VI, 7.125% | BBB+ | 49,800 | 1,256,952 | |||
| Virginia Power Capital Trust, 7.375% | BB+ | 518,150 | 13,036,654 | |||
| Forest Products 0.14% | 1,295,225 | |||||
|
| ||||||
| ING Groep NV 6.125% (Netherlands) | A | 51,500 | 1,295,225 | |||
| Gas Utilities 2.22% | 20,263,588 | |||||
|
| ||||||
| Southern Union Co., 5.00%, Conv | BBB- | 25,000 | 1,399,000 | |||
| Southern Union Co., 7.55%, Ser A | BB | 296,600 | 7,637,450 | |||
| Southwest Gas Capital II, 7.70% | BB | 404,300 | 10,374,338 | |||
| TransCanada Pipelines Ltd., 8.25% (Canada) | BBB | 32,800 | 852,800 | |||
| Hotels, Resorts & Cruise Lines 0.33% | 3,026,903 | |||||
|
| ||||||
| Hilton Hotels Corp., 8.00% | BB+ | 118,100 | 3,026,903 | |||
Page 3
John Hancock
Preferred Income Fund
Securities owned by the Fund
on April 30, 2007 (unaudited)
| Integrated Telecommunication Services 3.07% | 27,950,441 | |||||
|
| ||||||
| Telephone & Data Systems, Inc., 6.625% | BB+ | 233,000 | 5,710,830 | |||
| Telephone & Data Systems, Inc., 7.60%, Ser A | BB+ | 690,687 | 17,253,361 | |||
| Verizon New England, Inc., 7.00%, Ser B | A3 | 199,450 | 4,986,250 | |||
| Investment Banking & Brokerage 7.95% | 72,478,953 | |||||
|
| ||||||
| Bear Stearns Capital Trust III, 7.80% | BBB+ | 40,600 | 1,047,480 | |||
| Goldman Sachs Group, Inc., 6.20%, Ser B | A | 460,000 | 11,803,600 | |||
| Lehman Brothers Holdings Capital Trust III, | ||||||
| 6.375%, Ser K | A- | 150,000 | 3,763,500 | |||
| Lehman Brothers Holdings, Inc., 5.94%, | ||||||
| Depositary Shares, Ser C | A- | 175,600 | 8,999,500 | |||
| Merrill Lynch Preferred Capital Trust III, | ||||||
| 7.00% | A | 330,500 | 8,391,395 | |||
| Merrill Lynch Preferred Capital Trust IV, | ||||||
| 7.12% | A | 247,752 | 6,330,064 | |||
| Merrill Lynch Preferred Capital Trust V, | ||||||
| 7.28% | A | 367,000 | 9,435,570 | |||
| Morgan Stanley Capital Trust II, 7.25% | A- | 240,200 | 6,029,020 | |||
| Morgan Stanley Capital Trust III, 6.25% | A- | 192,400 | 4,773,444 | |||
| Morgan Stanley Capital Trust IV, 6.25% | A- | 57,000 | 1,404,480 | |||
| Morgan Stanley Capital Trust V, 5.75% | A1 | 347,000 | 8,223,900 | |||
| Morgan Stanley Capital Trust VI, 6.60% | A- | 90,000 | 2,277,000 | |||
| Life & Health Insurance 4.73% | 43,148,140 | |||||
|
| ||||||
| Lincoln National Capital VI, 6.75%, Ser F | A- | 165,800 | 4,189,766 | |||
| MetLife, Inc., 6.50%, Ser B | BBB | 950,500 | 25,017,160 | |||
| PLC Capital Trust IV, 7.25% | BBB+ | 186,600 | 4,709,784 | |||
| PLC Capital Trust V, 6.125% | BBB+ | 256,000 | 6,223,360 | |||
| Prudential Plc, 6.50% (United Kingdom) | A- | 117,000 | 3,008,070 | |||
| Movies & Entertainment 2.17% | 19,822,192 | |||||
|
| ||||||
| Viacom Inc., 6.85% | BBB | 789,100 | 19,822,192 | |||
| Multi-Line Insurance 3.91% | 35,649,353 | |||||
|
| ||||||
| Aegon NV, 6.375% (Netherlands) | A- | 444,900 | 11,554,053 | |||
| Aegon NV, 6.50% (Netherlands) | A- | 111,100 | 2,844,160 | |||
| ING Groep NV, 6.20% (Netherlands) | A | 134,793 | 3,388,696 | |||
| ING Groep NV, 7.05% (Netherlands) | A | 703,800 | 17,862,444 | |||
Page 4
John Hancock
Preferred Income Fund
Securities owned by the Fund on
April 30, 2007 (unaudited)
| Multi-Utilities 7.53% | 68,602,859 | |||||
|
| ||||||
| Aquila, Inc., 7.875% | B2 | 511,700 | 12,992,063 | |||
| Baltimore Gas & Electric Co., 6.99%, Ser 1995 | Ba1 | 40,000 | 4,116,252 | |||
| BGE Capital Trust II, 6.20% | BBB- | 831,825 | 20,471,213 | |||
| Dominion CNG Capital Trust I, 7.80% | BB+ | 253,476 | 6,362,248 | |||
| DTE Energy Trust I, 7.80% | BB+ | 135,100 | 3,401,818 | |||
| PNM Resources, Inc., 6.75%, Conv | BBB- | 268,000 | 14,600,640 | |||
| PSEG Funding Trust II, 8.75% | BB+ | 233,500 | 6,000,950 | |||
| Public Service Electric & Gas Co., 4.18%, | ||||||
| Ser B | BB+ | 7,900 | 657,675 | |||
| Oil & Gas Exploration & Production 3.66% | 33,324,610 | |||||
|
| ||||||
| Chesapeake Energy Corp., 6.25%, Conv (G) | B+ | 4,530 | 1,232,160 | |||
| Nexen, Inc., 7.35% (Canada) | BB+ | 1,261,000 | 32,092,450 | |||
| Other Diversified Financial Services 7.34% | 66,895,923 | |||||
|
| ||||||
| ABN AMRO Capital Funding Trust V, 5.90% | A | 626,100 | 15,114,054 | |||
| ABN AMRO Capital Funding Trust VII, 6.08% | A | 328,000 | 8,160,640 | |||
| Citigroup Capital VII, 7.125% | A+ | 138,700 | 3,525,754 | |||
| Citigroup Capital VIII, 6.95% | A+ | 410,600 | 10,388,180 | |||
| Citigroup Capital X, 6.10% | A+ | 40,000 | 994,000 | |||
| Citigroup Capital XI, 6.00% | A+ | 25,000 | 613,500 | |||
| DB Capital Funding VIII, 6.375% | A | 222,000 | 5,683,200 | |||
| JPMorgan Chase Capital X, 7.00%, Ser J | A | 607,100 | 15,420,340 | |||
| JPMorgan Chase Capital XI, 5.875%, Ser K | A | 289,700 | 6,996,255 | |||
| Real Estate Management & Development 3.88% | 35,358,515 | |||||
|
| ||||||
| Duke Realty Corp., 6.50%, Depositary Shares, | ||||||
| Ser K | BBB | 110,000 | 2,777,500 | |||
| Duke Realty Corp., 6.60%, Depositary Shares, | ||||||
| Ser L | BBB | 109,840 | 2,793,231 | |||
| Duke Realty Corp., 6.625%, Depositary | ||||||
| Shares, Ser J | BBB | 59,925 | 1,513,106 | |||
| Duke Realty Corp., 7.99%, Depositary Shares, | ||||||
| Ser B | BBB | 251,830 | 12,567,904 | |||
| Public Storage, Inc., 6.45%, Depositary | ||||||
| Shares, Ser X | BBB+ | 25,000 | 619,500 | |||
| Public Storage, Inc., 6.50%, Depositary | ||||||
| Shares, Ser W | BBB+ | 100,000 | 2,477,000 | |||
| Public Storage, Inc., 7.50%, Depositary | ||||||
| Shares, Ser V | BBB+ | 497,643 | 12,610,274 | |||
| Regional Banks 2.31% | 21,083,088 | |||||
|
| ||||||
| KeyCorp Capital VI, 6.125% | BBB | 20,900 | 511,423 | |||
| PFGI Capital Corp., 7.75% | A | 796,000 | 20,571,665 | |||
Page 5
John Hancock
Preferred Income Fund
Securities owned by the Fund on
April 30, 2007 (unaudited)
| Reinsurance 0.40% | 3,630,001 | |||||
|
| ||||||
| RenaissanceRe Holdings Ltd., 6.08%, Ser C | ||||||
| (Bermuda) | BBB | 153,100 | 3,630,001 | |||
| Specialized Finance 0.48% | 4,355,300 | |||||
|
| ||||||
| CIT Group, Inc., 6.35%, Ser A | BBB+ | 70,000 | 1,819,300 | |||
| Repsol International Capital Ltd., 7.45%, | ||||||
| Ser A (Cayman Islands) | BB+ | 100,000 | 2,536,000 | |||
| Thrifts & Mortgage Finance 1.35% | 12,340,400 | |||||
|
| ||||||
| Abbey National Plc, 7.375% (United Kingdom) | A+ | 370,000 | 9,386,900 | |||
| Sovereign Capital Trust V, 7.75% | BB+ | 110,000 | 2,953,500 | |||
| Wireless Telecommunication Services 1.40% | 12,752,470 | |||||
|
| ||||||
| United States Cellular, 7.50% | BB+ | 507,460 | 12,752,470 | |||
| Interest | Maturity | Credit | Par value | |||
| Issuer, description | rate | date | rating (A) | (000) | Value | |
| Short-term investments 3.39% | $30,900,000 | |||||
|
| ||||||
| (Cost $30,900,000) | ||||||
| Government U.S. Agency 3.39% | 30,900,000 | |||||
|
| ||||||
| Federal Home Loan Bank, Disc Note | 5.06% | 05-01-07 | AAA | $30,900 | 30,900,000 | |
| Total investments (Cost $893,067,106) 100.00% | $911,530,288 | |||||
|
| ||||||
Page 6
John Hancock
Preferred Income Fund
Footnotes to Schedule of Investments
April 30, 2007 (unaudited)
(A) Credit ratings are unaudited and are rated by Moody's Investors Service where Standard & Poor's ratings are not available, unless indicated otherwise.
(G) Security rated internally by John Hancock Advisers, LLC.
(P) Represents rate in effect on April 30, 2007.
(S) This security is 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 $12,454,413 or 1.37% of the Fund's total investments as of April 30, 2007.
Parenthetical disclosure of a foreign country in the security description represents country of a 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 total investments of the Fund.
The cost of investments owned on April 30, 2007, including short-term investments, was $893,067,106. Gross unrealized appreciation and depreciation of investments aggregated $35,993,402 and $17,530,220, respectively, resulting in net unrealized appreciation of $18,463,182.
Footnotes to Schedule of Investments - Page 1
John Hancock
Preferred Income Fund
Financial futures contracts
April 30, 2007 (unaudited)
| Number of | ||||
| Open contracts | contracts | Position | Expiration | Depreciation |
|
| ||||
| U.S. 10-year Treasury Note | 840 | Short | June-07 | $436,241 |
Financial futures contracts
John Hancock
Preferred Income Fund
Interest rate swap contracts
April 30, 2007 (unaudited)
| Rate type | ||||||
|
|
||||||
| Notional | Payments made | Payments received | Termination | |||
| amount | by Fund | by Fund | date | Appreciation | ||
|
| ||||||
| $70,000,000 | 2.56% | (a) | 3-month LIBOR | Jun 08 | $1,984,022 | |
|
| ||||||
| $1,984,022 | ||||||
(a) Fixed rate
Interest rate swap contracts
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 financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's 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 financial 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 Preferred Income Fund
By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and
Chief Executive Officer
Date: June 29, 2007
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: June 29, 2007
By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer
Date: June 29, 2007