UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05908
John Hancock Patriot Premium Dividend Fund II
(Exact name of registrant as specified in charter)
101 Huntington Avenue, Boston, Massachusetts 02199
(Address of principal executive offices) (Zip code)
Alfred P. Ouellette
Senior Attorney and Assistant Secretary
101 Huntington Avenue
Boston, Massachusetts 02199
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-375-1513
Date of fiscal year end: October 31
Date of reporting period: April 30, 2005
ITEM 1. REPORT TO SHAREHOLDERS.
JOHN HANCOCK
Patriot Premium
Dividend Fund II
4.30.2005
Semiannual Report
[A 2" x 1" John Hancock (Signature)/John Hancock Funds logo in lower,
center middle of page. A tag line below reads "JOHN HANCOCK FUNDS."]
[A photo of James A. Shepherdson, Chief Executive Officer, flush left next
to first paragraph.]
CEO CORNER
Table of contents
Your fund at a glance
page 1
Managers' report
page 2
Fund's investments
page 6
Financial statements
page 10
For more information
page 25
Dear Fellow Shareholders,
After advancing for a second straight year in 2004, the stock market
pulled back in the first four months of 2005. For much of 2004 the market
had been in the doldrums as investors fretted about rising oil prices,
higher interest rates, the war in Iraq and a closely contested
presidential race. But the year ended on a high note with a sharp rally
sparked by a definitive end to the U.S. presidential election and
moderating oil prices.
Investors were brought back down to earth in January, however, as the
market declined in three of the four weeks and produced negative results
for the month in a broad-based move downward. Rising oil prices and
interest rates, and concerns about less robust corporate earnings growth
were among the culprits that kept investors on the sidelines. Investors
began to re-enter the market in February, reversing January's decline. But
as the month progressed into March and April investors again grew
concerned about further spikes in oil prices and rising interest rates. As
a result, the first four months of 2005 ended with the major indexes in
the red. By the end of April, the Dow Jones Industrial Average had
returned -4.81%, the S&P 500 Index returned -4.00%, while the Nasdaq
Composite Index fell by 11.67%. Bonds performed slightly better, managing
to produce positive results, with the Lehman Brothers Aggregate Bond Index
returning 0.87%.
The way the financial markets have been playing out recently serves as a
good reminder of why keeping a long-term perspective is such a critical
element of successful investing. Getting caught up in the day-to-day
twists and turns of the market -- and trying to act on them -- can wreak
havoc with your portfolio and derail progress toward meeting your overall
financial objectives.
Since no one can predict the market's moves, the best way to reach your
goals is to stay invested and stick to your plan. Investing should be a
marathon, not a sprint. Do not try to time the market, and make sure you
work with your investment professional to ensure that your portfolio
remains properly diversified to meet your long-term objectives. For
example, after several years of dominance, small-cap stocks and value
stocks could now represent higher percentages of your portfolio than you
may want. If you are comfortable with your financial plan, it becomes
easier to ride out the market's daily ups and downs. It could also provide
you with a greater chance of success over time.
Sincerely,
/S/ James A. Shepherdson
James A. Shepherdson,
Chief Executive Officer
This commentary reflects the CEO's views as of April 30, 2005. They are
subject to change at any time.
YOUR FUND
AT A GLANCE
The Fund seeks to
provide high current
income, consistent
with modest growth
of capital, for hold
ers of its common
shares by investing
at least 80% of its
assets in dividend-
paying securities.
Over the last six months
* Despite rising interest rates, preferred stocks posted strong gains in
response to strong demand, weak supply and hopes that dividend tax cuts
would be made permanent.
* The Fund benefited from good security selection.
* High quality, tax-advantaged preferred stocks and select utility common
stock aided performance.
[Bar chart with heading "John Hancock Patriot Premium Dividend Fund II."
Under the heading is a note that reads "Fund performance for the six months
ended April 30, 2005." The chart is scaled in increments of 4% with 0% at
the bottom and 8% at the top. The first bar represents the 6.62% Net asset
value of the Fund. The second bar represents the 6.78% Market value of the
Fund. A note below the chart reads "The total returns for the Fund are with
all distributions reinvested. The performance data contained within this
material represents past performance, which does not guarantee future
results."]
Top 10 issuers
4.2% Bear Stearns Cos., Inc.
3.5% Citigroup, Inc.
3.3% El Paso Tennessee Pipeline Co.
3.2% Lehman Brothers Holdings, Inc.
3.2% DTE Energy Co.
3.0% Energy East Corp.
2.8% CH Energy Group, Inc.
2.8% Monongahela Power Co.
2.8% KeySpan Corp.
2.7% NSTAR
As a percentage of net assets plus the value of preferred shares on April
30, 2005.
1
BY GREGORY K. PHELPS AND MARK T. MALONEY FOR THE PORTFOLIO
MANAGEMENT TEAM
MANAGERS'
REPORT
JOHN HANCOCK
Patriot Premium
Dividend Fund II
Dividend-paying securities encountered mixed conditions during the
six-month period ended April 30, 2005. Preferred stocks -- which are the
primary emphasis of John Hancock Patriot Premium Dividend Fund II --
performed reasonably well from the beginning of the period last November
through roughly mid-February 2005. Because preferreds make fixed payments
in the form of dividends, their prices tend to follow those of U.S.
Treasury securities. Despite evidence of a strengthening economy and
additional short-term interest rate hikes by the Federal Reserve Board,
preferred stock prices generally moved higher, mirroring a somewhat
positive tone in the U.S. Treasury market. That rally was based on
investors' confidence that even though the Fed might continue to raise
rates, those rate hikes would be small and measured given the potential
for record high oil prices and higher interest rates themselves to dampen
economic growth. Preferred stocks were further boosted by the combination
of constrained supply and strong demand. Supply was muted, as fewer
companies issued new preferred securities, while others bought back their
outstanding shares. Demand was fueled by investors' appetite for yield,
particularly in light of the fact that changes in the tax code in 2003
helped to make ownership of certain dividend-yielding stocks more
attractive. Investors also viewed the re-election of President George Bush
as a positive for tax-advantaged preferred stocks, because he vowed to
make permanent the 2003 provisions that reduced the tax rate most
individuals pay on many stock dividends.
"Dividend-paying securities
encountered mixed conditions
during the six-month period
ended April 30, 2005."
From about mid-February through early April 2005, preferred stocks
weakened in response to a series of developments that suggested further
interest rate hikes were in the offing. These developments included
record-setting oil prices, stronger-than-expected data on the
2
jobs market and comments from the Fed that it had seen evidence of a
pickup in inflation. Then, from mid April to the end of the period April
30, preferred stocks regained much of their lost ground as Treasury prices
rallied on weaker March employment and retail sales data, as well as
turbulence in the equity markets.
[Photos of Greg Phelps and Mark Maloney, flush right next to first
paragraph.]
Utility common stocks
Utility common stocks -- the Fund's other main focus -- also seesawed
during the period. They generally lagged the overall stock market in the
fourth quarter of 2004, as investors sought out companies with higher
growth prospects. But utility common stocks held their ground far better
than preferred and many other common-stock groups in the final weeks of
the period. Their resiliency was due to the combination of growing demand
for their tax-advantaged dividends and a perception that utility
companies' financial shape continued to improve.
"The strong demand for tax-
advantaged preferred holdings
helped support many of our
holdings that sported that feature."
Performance
For the six months ended April 30, 2005, John Hancock Patriot Premium
Dividend Fund II returned 6.62% at net asset value and 6.78% at market
value. The difference in the Fund's net asset value (NAV) performance and
its market performance stems from the fact that the market share price is
subject to the dynamics of secondary market trading, which could cause it
to trade at a discount or premium to the Fund's NAV share price at any
time. By comparison, the average income and preferred stock closed-end
fund returned 4.28% at net asset value, according to Lipper, Inc. In the
same six-month period, the Dow Jones Utility Average -- which tracks the
performance of 15 electric and natural gas utilities -- returned 20.75%,
and the broader stock market as measured by the Standard & Poor's 500
Index returned 3.28%.
Tax-advantaged holdings among top performers
The strong demand for tax-advantaged preferred stocks helped support many
of our holdings that sported that feature. A good example was Baltimore
Gas & Electric Co., a regulated electric and gas public utility in central
Maryland. It also benefited from the
3
fact that it carried a high coupon, which helped cushion its price
declines, and the fact that there is a limited supply of this high-quality
holding. Southern Union Co. also enjoyed relatively good performance for
similar reasons. On the flip side, our lower-coupon holdings in Royal Bank
of Scotland, a major commercial bank, proved somewhat disappointing.
[Table at top left-hand side of page entitled "Industry distribution 1."
The first listing is Electric utilities - 36%, the second is
Multi-utilities & unregulated power - 23%, the third is Gas utilities -
10%, the fourth is Investment banking & brokerage - 7%, the fifth is Oil &
gas exploration & production - 6%, the sixth is Other diversified financial
services - 5%, the seventh is Diversified banks - 3%, the eighth is
Consumer finance - 2%, the ninth is Regional banks - 2%, the tenth is
Integrated oil & gas - 1%, the eleventh is Agricultural products - 1% and
the twelfth is All other - 3%.]
Oil and gas-related utility stocks also post strong results
Rising energy prices provided the fuel for improved company profitability
and higher prices for some of our holdings in utility common stocks
involved with oil and gas production. Among the best performers were our
common-stock holdings in Dominion Resources, one of the nation's largest
producers of energy. Other winners in this segment included National Fuel
Gas Co., an integrated natural gas company, and NiSource Inc., which is
engaged in natural gas transmission, storage and distribution, as well as
electric generation, transmission and distribution. Among our preferred
stock holdings in this sector, we had strong performances from Anadarko
Petroleum Corp., Apache Corporation and Devon Energy Corp.
[Pie chart in middle of page with heading "Portfolio diversification 1."
The chart is divided into three sections (from top to right): Preferred
stocks 64%, Common stocks 35%, and Short-term investments & other 1%.]
Outlook
In our view, the Fed probably hasn't yet reached the end of its campaign
to raise short-term interest rates to cool economic growth and potential
inflationary pressures. This could pose periodic short-term challenges for
dividend-producing securities. Over the longer term, however, we're more
upbeat, especially given the fact that we believe a good portion, if not
all, of future
4
[Table at top of page entitled "Scorecard." The header for the left column
is "Investment" and the header for the right column is "Period's
performance...and what's behind the numbers." The first listing is
Baltimore Gas & Electric followed by an up arrow with the phrase "High
yield helps stock weather market decline." The second listing is Dominion
Resources followed by an up arrow with the phrase "Rising energy prices
boost financial performance." The third listing is Royal Bank of Scotland
followed by a down arrow with the phrase "Low coupon offers little cushion
against market selloff."]
interest rate hikes already have been factored into preferred and utility
common stock prices. Furthermore, there are already some tangible signs
that economic growth has cooled as rates have moved higher. The housing
market has started to slow, with adjustable-rate mortgages moving higher
and conventional 30-year mortgages exceeding 6% at times. Higher oil
prices will also probably act as a drag on economic growth, most likely by
reducing consumers' disposable income and raising corporate America's cost
of doing business. Another signal pointing to slack economic growth is the
March retail sales numbers, which were lackluster at best. We believe that
a slower-growth, low-inflationary environment will provide a favorable
backdrop for both preferred and utility common stocks. That, coupled with
what we believe will continue to be a favorable supply and demand
backdrop, could benefit many dividend-paying securities in the months to
come.
"We believe that a slower-growth,
low-inflationary environment
will provide a favorable backdrop
for both preferred and utility
common stocks."
This commentary reflects the views of the team through the end of the
Fund's period discussed in this report. The team's statements reflect
their own opinions. As such they are in no way guarantees of future
events, and are not intended to be used as investment advice or a
recommendation regarding any specific security. They are also subject to
change at any time as market and other conditions warrant.
The Fund normally will invest at least 65% of its managed assets in
securities of companies in the utilities industry. Such an investment
concentration makes the Fund more susceptible than a more broadly
diversified fund to factors adversely affecting the utilities industry.
Sector investing is subject to greater risks than the market as a whole.
1 As a percentage of the Fund's portfolio on April 30, 2005.
5
FINANCIAL STATEMENTS
FUND'S
INVESTMENTS
Securities owned
by the Fund on
April 30, 2005
(unaudited)
This schedule is divided into three main categories: common stocks,
preferred stocks and short-term investments. The stocks are further broken
down by industry group. Short-term investments, which represent the Fund's
cash position, are listed last.
Issuer Shares Value
Common stocks 53.86% $98,029,862
(Cost $88,704,137)
Electric Utilities 24.22% 44,077,976
Alliant Energy Corp. 199,900 5,265,366
Ameren Corp. 80,000 4,136,000
CH Energy Group, Inc. 186,200 7,941,430
Cinergy Corp. 40,000 1,584,000
Consolidated Edison, Inc. 78,000 3,375,840
Great Plains Energy, Inc. 10,750 328,735
NSTAR 138,000 7,471,320
OGE Energy Corp. 137,632 3,798,643
Progress Energy, Inc. 79,000 3,317,210
Progress Energy, Inc. (Contingent Value Obligation) (B)(I) 176,250 21,150
WPS Resources Corp. 55,400 2,921,242
Xcel Energy, Inc. 228,000 3,917,040
Gas Utilities 7.97% 14,496,123
KeySpan Corp. 205,700 7,802,201
NiSource, Inc. 133,550 3,103,702
Peoples Energy Corp. 70,200 2,779,920
Vectren Corp. 30,000 810,300
Integrated Telecommunication Services 1.12% 2,046,800
SBC Communications, Inc. 86,000 2,046,800
Multi-Utilities & Unregulated Power 20.55% 37,408,963
Dominion Resources, Inc. 79,700 6,009,380
Duke Energy Corp. 90,000 2,627,100
DTE Energy Co. 193,500 8,891,325
Energy East Corp. 330,000 8,586,600
National Fuel Gas Co. 70,700 1,925,161
Public Service Enterprise Group, Inc. 16,000 929,600
See notes to
financial statements.
6
FINANCIAL STATEMENTS
Issuer Shares Value
Multi-Utilities & Unregulated Power (continued)
Puget Energy, Inc. 55,000 $1,179,199
Sierra Pacific Resources (I) 369,000 3,992,580
TECO Energy, Inc. 196,750 3,268,018
Credit
Issuer, description rating (A) Shares Value
Preferred stocks 99.94% $181,893,967
(Cost $174,341,912)
Agricultural Products 2.07% 3,773,698
Ocean Spray Cranberries, Inc., 6.25%, Ser A (S) BB+ 44,250 3,773,698
Broadcasting & Cable TV 0.62% 1,119,461
Shaw Communications, Inc., 8.50% (Canada) B+ 44,300 1,119,461
Consumer Finance 2.80% 5,101,400
SLM Corp., 6.97%, Ser A A 92,000 5,101,400
Diversified Banks 5.01% 9,123,744
Bank of America Corp., 6.75%,
Depositary Shares, Ser VI A 93,800 5,358,794
Royal Bank of Scotland Group Plc, 5.75%,
Ser L (United Kingdom) A 155,000 3,764,950
Electric Utilities 31.90% 58,051,120
Alabama Power Co., 5.20% BBB+ 249,475 6,236,875
Boston Edison Co., 4.78% BBB+ 67,342 6,212,300
Carolina Power & Light Co., $4.20 Baa3 41,151 3,297,224
Carolina Power & Light Co., $5.44 BB+ 10,607 1,039,486
Delmarva Power & Light Co., 3.70% BBB- 13,109 991,368
Duquesne Light Co., 6.50% BB+ 107,000 5,658,160
Georgia Power Co., 6.00%, Ser R A 34,900 879,479
Interstate Power & Light Co., 7.10%, Ser C BBB- 51,500 1,416,250
Interstate Power & Light Co., 8.375%, Ser B BBB- 25,000 850,000
Monongahela Power Co., $6.28, Ser D B 24,931 2,268,721
Monongahela Power Co., $7.73, Ser L B 55,500 5,536,125
PPL Electric Utilities Corp., 4.40% BBB 29,140 2,374,910
PSI Energy, Inc., 6.875% BBB- 49,260 5,073,780
Sierra Pacific Power Co., 7.80%, Ser 1 (Class A) CCC+ 200,986 5,024,650
Virginia Electric & Power Co., $4.80 BBB- 6,338 610,825
Virginia Electric & Power Co., $6.98 BBB- 35,000 3,661,875
Virginia Electric & Power Co., $7.05 BBB- 10,000 1,046,563
Wisconsin Public Service Corp., 6.76% A 35,883 3,720,619
See notes to
financial statements.
7
FINANCIAL STATEMENTS
Credit
Issuer, description rating (A) Shares Value
Electric Utilities (continued)
Xcel Energy, Inc., $4.08, Ser B BB+ 8,610 $706,020
Xcel Energy, Inc., $4.11, Ser D BB+ 8,770 666,520
Xcel Energy, Inc., $4.16, Ser E BB+ 9,390 779,370
Gas Utilities 7.83% 14,254,100
El Paso Tennessee Pipeline Co., 8.25%, Ser A CCC- 186,000 9,300,000
Southern Union Co., 7.55% BB+ 185,200 4,954,100
Integrated Oil & Gas 2.24% 4,067,250
Coastal Finance I, 8.375% CCC- 165,000 4,067,250
Integrated Telecommunication Services 0.03% 50,000
Touch America Holdings, Inc., $6.875 (H)(I) D 50,000 50,000
Investment Banking & Brokerage 11.49% 20,902,970
Bear Stearns Cos., Inc. (The), 5.49%,
Depositary Shares, Ser G BBB 50,650 2,562,890
Bear Stearns Cos., Inc. (The), 5.72%,
Depositary Shares, Ser F BBB 95,300 4,869,830
Bear Stearns Cos., Inc. (The), 6.15%,
Depositary Shares, Ser E BBB 84,000 4,368,000
Lehman Brothers Holdings, Inc., 5.67%,
Depositary Shares, Ser D BBB+ 124,800 6,364,800
Lehman Brothers Holdings, Inc., 5.94%,
Depositary Shares, Ser C BBB+ 53,000 2,737,450
Multi-Utilities & Unregulated Power 14.58% 26,539,089
Baltimore Gas & Electric Co., 6.70%, Ser 1993 Baa1 20,250 2,106,000
Baltimore Gas & Electric Co., 6.99%, Ser 1995 Baa1 30,000 3,142,500
BGE Capital Trust II, 6.20% BBB- 191,000 4,839,940
Energy East Capital Trust I, 8.25% BBB- 180,700 4,687,358
Public Service Electric & Gas Co., 4.18%, Ser B BB+ 12,737 1,007,497
Public Service Electric & Gas Co., 6.92% BB+ 47,998 5,008,294
South Carolina Electric & Gas Co., 6.52% Baa1 55,000 5,747,500
Oil & Gas Exploration & Production 9.56% 17,404,120
Anadarko Petroleum Corp., 5.46%,
Depositary Shares, Ser B BBB- 47,700 4,714,849
Apache Corp., 5.68%, Depositary Shares, Ser B BBB 51,500 5,283,581
Devon Energy Corp., 6.49%, Ser A BB+ 50,645 5,320,890
Nexen, Inc., 7.35% (Canada) BB+ 80,000 2,084,800
See notes to
financial statements.
8
FINANCIAL STATEMENTS
Credit
Issuer, description rating (A) Shares Value
Other Diversified Financial Services 8.34% $15,175,195
Citigroup, Inc., 6.213%, Depositary Shares, Ser G A 96,000 5,078,400
Citigroup, Inc., 6.231%, Depositary Shares, Ser H A 64,500 3,337,875
Citigroup, Inc., 6.365%, Depositary Shares, Ser F A 28,500 1,513,920
J.P. Morgan Chase & Co., 6.625%,
Depositary Shares, Ser H A- 100,000 5,245,000
Regional Banks 2.72% 4,957,920
HSBC USA, Inc., $2.8575 A1 93,900 4,957,920
Trucking 0.75% 1,373,900
AMERCO, 8.50%, Ser A CCC+ 55,000 1,373,900
Interest Par value
Issuer, description, maturity date rate (000) Value
Short-term investments 1.08% $1,974,841
(Cost $1,974,841)
Commercial Paper 1.08% 1,974,841
ChevronTexaco Funding Corp., 05-02-05 2.890% $1,975 1,974,841
Total investments 154.88% $281,898,670
Other assets and liabilities, net 0.06% $108,947
Fund preferred shares, at value (54.94%) ($100,000,000)
Total net assets 100.00% $182,007,617
(A) Credit ratings are unaudited and are rated by Moody's Investors
Service where Standard & Poor's ratings are not available.
(B) This security is fair valued in good faith under procedures
established by the Board of Trustees.
(H) Non-income-producing issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(I) Non-income-producing security.
(S) This security is exempt from registration under Rule 144A of the
Securities Act of 1933. Such security may be resold, normally to qualified
institutional buyers, in transactions exempt from registration. Rule 144A
securities amounted to $3,773,698 or 2.07% of the Fund's net assets as of
April 30, 2005.
Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer.
The percentage shown for each investment category is the total value of
that category as a percentage of the net assets of the Fund.
See notes to
financial statements.
9
FINANCIAL STATEMENTS
ASSETS AND
LIABILITIES
April 30, 2005
(unaudited)
This Statement
of Assets and
Liabilities is the
Fund's balance
sheet. It shows
the value of
what the Fund
owns, is due
and owes. You'll
also find the net
asset value for each
common share.
Assets
Investments, at value (cost $265,020,890) $281,898,670
Cash 73,414
Receivable for investments sold 747,135
Dividends receivable 1,128,362
Other assets 58,809
Total assets 283,906,390
Liabilities
Payable for investments purchased 496,000
Common shares dividends payable 978,025
Payable to affiliates
Management fees 185,783
Other 23,135
Other payables and accrued expenses 77,028
Total liabilities 1,759,971
Dutch Auction Rate Transferrable Securities preferred
shares (DARTS), Series A, at value, unlimited number
of shares of beneficial interest authorized with no
par value, 500 shares issued, liquidation preference
of $100,000 per share 50,080,006
DARTS Series B, at value, unlimited number of shares
of beneficial interest authorized with no par value,
500 shares issued, liquidation preference of
$100,000 per share 50,058,796
Net assets
Common shares capital paid-in 168,345,748
Accumulated net realized loss on investments (4,930,419)
Net unrealized appreciation of investments 16,877,780
Accumulated net investment income 1,714,508
Net assets applicable to common shares $182,007,617
Net asset value per common share
Based on 15,046,539 shares of beneficial interest
outstanding -- unlimited number of shares
authorized with no par value $12.10
See notes to
financial statements.
10
FINANCIAL STATEMENTS
OPERATIONS
For the period ended
April 30, 2005
(unaudited) 1
This 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.
Investment income
Dividends $7,924,002
Interest 65,554
Total investment income 7,989,556
Expenses
Investment management fees 1,098,165
Administration fees 139,737
DARTS auction fees 133,065
Federal excise tax 37,893
Miscellaneous 26,612
Custodian fees 26,148
Professional fees 22,194
Transfer agent fees 21,669
Printing 21,145
Registration and filing fees 11,771
Trustees' fees 6,994
Total expenses 1,545,393
Net investment income 6,444,163
Realized and unrealized gain (loss)
Net realized loss on investments (4,868,673)
Change in net unrealized appreciation
(depreciation) of investments 10,770,134
Net realized and unrealized gain 5,901,461
Distributions to DARTS Series A (518,173)
Distributions to DARTS Series B (522,120)
Increase in net assets from operations $11,305,331
1 Semiannual period from 11-1-04 through 4-30-05.
See notes to
financial statements.
11
FINANCIAL STATEMENTS
CHANGES IN
NET ASSETS
These Statements
of Changes in Net
Assets show how
the value of the
Fund's net assets
has changed
during the last
two periods. The
difference reflects
earnings less
expenses, any
investment
gains and losses,
distributions, if
any, paid to
shareholders and
the net of Fund
share transactions.
Year Period
ended ended
10-31-04 4-30-05 1
Increase (decrease) in net assets
From operations
Net investment income $12,631,030 $6,444,163
Net realized gain (loss) 502,635 (4,868,673)
Change in net unrealized
appreciation (depreciation) 11,520,595 10,770,134
Distributions to DARTS
Series A and B (1,311,189) (1,040,293)
Increase in net assets resulting
from operations 23,343,071 11,305,331
Distributions to common shareholders
From net investment income (12,187,484) (5,868,151)
From Fund share transactions 73,246 --
Net assets
Beginning of period 165,341,604 176,570,437
End of period 2 $176,570,437 $182,007,617
1 Semiannual period from 11-1-04 through 4-30-05. Unaudited.
2 Includes accumulated net investment income of $2,178,789 and $1,714,508,
respectively.
See notes to
financial statements.
12
FINANCIAL HIGHLIGHTS
FINANCIAL
HIGHLIGHTS
COMMON SHARES
The Financial Highlights show how the Fund's net asset value for a share
has changed since the end of the previous period.
Period ended 10-31-00 10-31-01 10-31-02 10-31-03 10-31-04 4-30-05 1
Per share operating performance
Net asset value,
beginning of period $12.09 $12.24 $12.06 $10.01 $10.99 $11.73
Net investment income 2 1.06 1.05 0.99 0.87 0.84 0.43
Net realized and unrealized gain
(loss) on investments 0.21 (0.20) (2.14) 1.21 0.80 0.39
Distributions to DARTS
Series A and B (0.31) (0.25) (0.12) (0.08) (0.09) (0.06)
Total from
investment operations 0.96 0.60 (1.27) 2.00 1.55 0.76
Less distributions
to common shareholders
From net investment income (0.81) (0.78) (0.78) (1.02) (0.81) (0.39)
Net asset value, end of period $12.24 $12.06 $10.01 $10.99 $11.73 $12.10
Per share market value,
end of period $10.13 $10.93 $9.40 $11.14 $11.19 $11.56
Total return at market value 3 (%) 12.56 15.22 (7.55) 30.87 8.06 6.78 4
Ratios and supplemental data
Net assets applicable to common shares,
end of period (in millions) $184 $181 $150 $165 $177 $182
Ratio of expenses
to average net assets 5 (%) 1.85 1.78 1.91 1.91 1.78 1.71 6
Ratio of net investment income
to average net assets 7 (%) 9.13 8.46 8.66 8.45 7.38 7.15 6
Portfolio turnover (%) 18 27 10 9 9 2
Senior securities
Total DARTS Series A outstanding
(in millions) $50 $50 $50 $50 $50 $50
Total DARTS Series B outstanding
(in millions) $50 $50 $50 $50 $50 $50
Involuntary liquidation preference DARTS
Series A per unit (in thousands) $100 $100 $100 $100 $100 $100
Involuntary liquidation preference DARTS
Series B per unit (in thousands) $100 $100 $100 $100 $100 $100
Average market value
per unit (in thousands) $100 $100 $100 $100 $100 $100
Asset coverage per unit 8 $283,629 $283,166 $247,689 $264,239 $272,034 $281,462
See notes to
financial statements.
13
FINANCIAL HIGHLIGHTS
Notes to Financial Highlights
1 Semiannual period from 11-1-04 to 4-30-05. Unaudited.
2 Based on the average of the shares outstanding.
3 Assumes dividend reinvestment.
4 Not annualized.
5 Ratios calculated on the basis of expenses relative to the average net
assets of common shares. Without the exclusion of preferred shares, the
annualized ratio of expenses would have been 1.17%, 1.16%, 1.20%, 1.16%,
1.12% and 1.11%, respectively.
6 Annualized
7 Ratios calculated on the basis of net investment income relative to the
average net assets of common shares. Without the exclusion of preferred
shares, the annualized ratio of net investment income would have been
5.80%, 5.50%, 5.46%, 5.14%, 4.66% and 4.61%, respectively.
8 Calculated by subtracting the Fund's total liabilities from the Fund's
total assets and dividing such amount by the number of DARTS outstanding
as of the applicable 1940 Act Evaluation Date, which may differ from the
financial reporting date.
See notes to
financial statements.
14
NOTES TO
STATEMENTS
Unaudited
Note A
Accounting policies
John Hancock Patriot Premium Dividend Fund II (the "Fund") is a
diversified closed-end management investment company registered under the
Investment Company Act of 1940.
Significant accounting policies
of the Fund are as follows:
Valuation of investments
Securities in the 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 which have a remaining
maturity of 60 days or less may be valued at amortized cost which
approximates market value. The Fund determines the net asset value of the
common shares each business day.
Investment transactions
Investment transactions are recorded as of the date of purchase, sale or
maturity. Net realized gains and losses on sales of investments are
determined on the identified cost basis.
Expenses
The majority of expenses are directly identifiable to an individual fund.
Expenses that are not readily identifiable to a specific fund are
allocated in such a manner as deemed equitable, taking into consideration,
among other things, the nature and type of expense and the relative sizes
of the funds.
Federal income taxes
The Fund qualifies as a "regulated investment company" by complying with
the applicable provisions of the Internal Revenue Code and will not be
subject to federal income tax on taxable income that is distributed to
shareholders. Therefore, no federal income tax provision is required. For
federal income tax purposes, the Fund has $52,139 of a capital loss
carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. To the extent that such carryforward is
used by the Fund, no capital gain distributions will be made. The loss
carryforward expires as follows: October 31, 2010 -- $30,872 and October
31, 2011 -- $21,267.
Dividends, interest
and distributions
Dividend income on investment securities is recorded on the ex-dividend
date or, in the case of some foreign securities, on the date thereafter
when the Fund identifies the dividend. Interest income on investment
securities is recorded on the accrual basis. The Fund may place a security
on a non-accrual status and reduced related investment income by ceasing
current accruals or writing off interest, or dividends receivable when the
collection of income has become doubtful. Foreign income may be subject to
foreign withholding taxes, which are accrued as applicable.
The Fund records distributions to common and preferred shareholders from
net investment
15
income and net realized gains, if any, on the ex-dividend
date. During the year ended October 31, 2004, the tax character of
distributions paid was as follows: ordinary income $13,498,673.
Such distributions, on a tax basis, are determined in conformity with
income tax regulations, which may differ from accounting principles
generally accepted in the United States of America. Distributions in
excess of tax basis earnings and profits, if any, are reported in the
Fund's financial statements as a return of capital.
Use of estimates
The preparation of these financial statements, in accordance with
accounting principles generally accepted in the United States of America,
incorporates estimates made by management in determining the reported
amount of assets, liabilities, revenues and expenses of the Fund. Actual
results could differ from these estimates.
Note B
Management fee and
transactions with
affiliates and others
The Fund has an investment management contract with John Hancock Advisers,
LLC (the "Adviser"), a wholly owned subsidiary of John Hancock Financial
Services, Inc. Under the investment management contract, the Fund pays a
monthly management fee to the Adviser at an annual rate of 0.50% of the
Fund's average weekly net assets and the value attributable to the Dutch
Auction Rate Transferable Securities preferred shares (collectively,
"managed assets"), plus 5.00% of the Fund's weekly gross income. The
Adviser's total fee is limited to a maximum amount equal to 1.00% annually
of the Fund's average weekly managed assets. For the period ended April
30, 2005, the advisory fee incurred did not exceed the maximum advisory
fee allowed.
The Fund has an administrative agreement with the Adviser under which the
Adviser oversees the custodial, auditing, valuation, accounting, legal,
stock transfer and dividend disbursing services and maintains Fund
communications with the shareholders. The Fund pays the Adviser a monthly
administration fee at an annual rate of 0.10% of the Fund's average weekly
managed assets. The compensation for the period amounted to $139,737. The
Fund also paid the Adviser the amount of $5 for certain publishing
services, included in the printing fees.
Mr. James A. Shepherdson is a director and officer of the Adviser, as well
as affiliated Trustee of the Fund, and is compensated by the Adviser. The
compensation of unaffiliated Trustees is borne by the Fund. The
unaffiliated Trustees may elect to defer, for tax purposes, their receipt
of this compensation under the John Hancock Group of Funds Deferred
Compensation Plan. The Fund makes investments into other John Hancock
funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation
liability are recorded on the Fund's books as an other asset. The deferred
compensation liability and the related other asset are always equal and
are marked to market on a periodic basis to reflect any income earned by
the investments, as well as any unrealized gains or losses. The Deferred
Compensation Plan investments had no impact on the operations of the Fund.
The Fund is listed for trading on the New York Stock Exchange (NYSE) and
has filed with the NYSE its chief executive officer certification
regarding compliance with the NYSE's listing standards. The Fund also
files with the Securities and Exchange Commission the certification of its
chief executive officer and chief accounting officer required by Section
302 of the Sarbanes-Oxley Act.
16
Note C
Fund share transactions
This listing illustrates distribution reinvestments, reclassification of
the Fund's capital accounts and the number of common shares outstanding at
the beginning and end of the last two periods, along with the
corresponding dollar value.
Year ended 10-31-04 Period ended 4-30-05 1
Shares Amount Shares Amount
Beginning of period 15,039,985 $168,356,100 15,046,539 $168,345,748
Distributions reinvested 6,554 73,246 -- --
Reclassification of
capital accounts -- (83,598) -- --
End of period 15,046,539 $168,345,748 15,046,539 $168,345,748
1 Semiannual period from 11-1-04 through 4-30-05. Unaudited.
Dutch Auction Rate
Transferable Securities
preferred shares Series A
and Series B
The Fund issued Dutch Auction Rate Transferable Securities preferred
shares ("DARTS"), 598 shares of Series A and 598 shares of Series B in a
public offering. The underwriting discount was recorded as a reduction of
the capital of common shares. During the year ended October 31, 1990, the
Fund retired 98 shares of DARTS from both Series A and Series B.
Dividends on the DARTS, which accrue daily, are cumulative at a rate that
was established at the offering of the DARTS and has been reset every 49
days thereafter by an auction. Dividend rates on DARTS Series A and B
ranged from 1.79% to 2.40% and from 1.99% to 2.49%, respectively, during
the period ended April 30, 2005. Accrued dividends on DARTS are included
in the value of DARTS on the Fund's Statement of Assets and Liabilities.
The DARTS are redeemable at the option of the Fund, at a redemption price
equal to $100,000 per share, plus accumulated and unpaid dividends on any
dividend payment date. The DARTS are also subject to mandatory redemption
at a redemption price equal to $100,000 per share, plus accumulated and
unpaid dividends, if the Fund is in default on its asset coverage
requirements with respect to the DARTS, as defined in the Fund's by-laws.
If the dividends on the DARTS shall remain unpaid in an amount equal to
two full years' dividends, the holders of the DARTS, as a class, have the
right to elect a majority of the Board of Trustees. In general, the
holders of the DARTS and the common shareholders have equal voting rights
of one vote per share, except that the holders of the DARTS, as a class,
vote to elect two members of the Board of Trustees, and separate class
votes are required on certain matters that affect the respective interests
of the DARTS and common shareholders.
Note D
Investment
transactions
Purchases and proceeds from sales or maturities of securities, other than
short-term securities and obligations of the U.S. government, during the
period ended April 30, 2005, aggregated $9,611,463 and $6,025,134,
respectively.
The cost of investments owned on April 30, 2005, including short-term
investments, for federal income tax purposes, was $265,030,446. Gross
unrealized appreciation and depreciation of investments aggregated
$29,128,531 and $12,260,307, respectively, resulting in net unrealized
appreciation of $16,868,224. The difference between book basis and tax
basis net unrealized appreciation of investments is attributable primarily
to the tax deferral of losses on certain sales of securities.
17
Investment
objective
and policy
The Fund's investment objective is to provide a high current income
consistent with modest growth of capital for holders of its common shares
of beneficial interest. The Fund will pursue its objective by investing in
a diversified portfolio of dividend paying preferred and common stocks.
The Fund's non-fundamental investment policy, with respect to the quality
of ratings of its portfolio investments, was changed by a vote of the
Fund's Trustees on September 13, 1994. The policy, which became effective
October 15, 1994, stipulates that preferred stocks and debt obligations in
which the Fund will invest will be rated investment-grade (at least "BBB"
by S&P or "Baa" by Moody's) at the time of investment or will be preferred
stocks of issuers of investment-grade senior debt, some of which may have
speculative characteristics, or, if not rated, will be of comparable
quality as determined by the Adviser. The Fund will invest in common
stocks of issuers whose senior debt is rated investment-grade or, in the
case of issuers that have no rated senior debt outstanding, whose senior
debt is considered by the Adviser to be of comparable quality.
On November 20, 2001, the Fund's Trustees approved the following
investment policy investment restriction change, effective December 15,
2001. Under normal circumstances the Fund will invest at least 80% of its
assets in dividend-paying securities. The "Assets" are defined as net
assets including the liquidation preference amount of the DARTS plus
borrowings for investment purposes. The Fund will notify shareholders at
least 60 days prior to any change in this 80% investment policy.
By-laws
In November 2002, the Board of Trustees adopted several amendments to the
Fund's by-laws, including provisions relating to the calling of a special
meeting and requiring advance notice of shareholder proposals or nominees
for Trustee. The advance notice provisions in the by-laws require
shareholders to notify the Fund in writing of any proposal that they
intend to present at an annual meeting of share- holders, including any
nominations for Trustee, between 90 and 120 days prior to the first
anniversary of the mailing date of the notice from the prior year's annual
meeting of shareholders. The notification must be in the form prescribed
by the by-laws. The advance notice provisions provide the Fund and its
Trustees with the opportunity to thoughtfully consider and address the
matters proposed before the Fund prepares and mails its proxy statement to
shareholders. Other amendments set forth the procedures that must be
followed in order for a shareholder to call a special meeting of
shareholders. Please contact the Secretary of the Fund for additional
information about the advance notice requirements or the other amendments
to the by-laws.
On December 16, 2003, the Trustees approved the following change to the
Fund's by-laws. The auction preferred section of the Fund's by-laws was
changed to update the rating agency requirements, in keeping with recent
changes to the agencies' basic maintenance reporting requirements for
leveraged closed-end funds. By-laws now require an independent
accountant's confirmation only once per year, at the Fund's fiscal year
end, and changes to the agencies' basic maintenance reporting requirements
that include modifications to the eligible assets and their respective
discount factors. These revisions bring the Fund's by-laws in line with
current rating agency requirements.
On September 14, 2004, the Trustees approved an amendment to the Fund's
by-laws increasing the maximum applicable dividend rate ceiling on the
preferred shares to conform with the modern calculation methodology used
by the industry and other John Hancock funds.
18
Dividend
reinvestment plan
The Fund offers its shareholders a Dividend Reinvestment Plan (the
"Plan"), which offers the opportunity to earn compounded yields. Each
holder of common shares may elect to have all distributions of dividends
and capital gains reinvested by Mellon Investor Services, as plan agent
for the common shareholders (the "Plan Agent"). Holders of common shares
who do not elect 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 may join the Plan by filling out and mailing an authorization
card, by notifying the Plan Agent by telephone, or by visiting the Plan
Agent's Web site at www.melloninvestor.com. Shareholders must indicate an
election to reinvest all or a portion of dividend payments. If received
in proper form by the Plan Agent before the record date of 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 or nominee to determine whether and how
they may participate in the Plan.
If the Fund declares a dividend payable either in common shares or in
cash, non-participants will receive cash and participants in the Plan will
receive the equivalent in common shares. If the market price of the common
shares on the payment date of the dividend is equal to or exceeds their
net asset value as determined on the payment date, participants will be
issued common shares (out of authorized but unissued shares) at a value
equal to the higher of net asset value or 95% of the market price. If the
net asset value exceeds the market price of the common shares at such
time, or if the Board of Trustees declares a dividend payable only in
cash, the Plan Agent will, as agent for Plan participants, buy shares in
the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts. Such purchases will be made promptly after the
payable date for such dividend and, in any event, prior to the next
ex-dividend date after such date, except where necessary to comply with
federal securities laws. If, before the Plan Agent has completed its
purchases, the market price exceeds the net asset value of the common
shares, the average per share purchase price paid by the Plan Agent may
exceed the net asset value of the common shares, resulting in the
acquisition of fewer shares than if the dividend had been paid in shares
issued by the Fund.
Each participant will pay a pro rata share of brokerage commissions
incurred with respect to the Plan 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 will be no brokerage charges with respect to common shares
issued directly by the Fund. There are no other charges to participants
for reinvesting dividends or capital gain distributions.
Participants in the Plan may withdraw from the Plan at any time by
contacting the Plan Agent by telephone, in writing or by visiting the Plan
Agent's Web site at www.melloninvestor.com. 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.
19
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. The Plan Agent will hold common shares in the account of
each Plan participant in noncertificated form in the name of the
participant. Proxy material relating to the shareholders' meetings of the
Fund will include those shares purchased as well as shares held pursuant
to the Plan.
The reinvestment of dividends and distributions will not relieve
participants of any federal income tax that may be payable or required to
be withheld on such dividends or distributions. Participants under the
Plan will receive tax information annually. The amount of dividend to be
reported on 1099-DIV should be (1) in the case of shares issued by the
Fund, the fair market value of such shares on the dividend payment date
and (2) in the case of shares purchased by the Plan Agent in the open
market, the amount of cash used by the Plan Agent to purchase shares in
the open market, including the amount of cash allocated to brokerage
commissions paid on such purchases.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice
of the change sent to all shareholders of the Fund at least 90 days before
the record date for the dividend or distribution. The Plan may be amended
or terminated by the Plan Agent after at least 90 days' written notice to
all shareholders of the Fund. All correspondence or additional information
concerning the Plan should be directed to the Plan Agent, Mellon Bank,
N.A., c/o Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ
07606-1938 (telephone 1-800-852-0218).
Shareholder
communication
and assistance
If you have any questions concerning the Fund, we will be pleased to
assist you. If you hold shares in your own name and not with a brokerage
firm, please address all notices, correspondence, questions or other
communications regarding the Fund to the transfer agent at:
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Telephone 1-800-852-0218
If your shares are held with a brokerage firm, you should contact that
firm, bank or other nominee for assistance.
20
Shareholder meeting
On March 13, 2005, the Annual Meeting of the Fund was held to elect four
Trustees and to ratify the actions of the Trustees in selecting
independent auditors for the Fund.
Proxies covering 9,355,848 shares of beneficial interest were voted at the
meeting. The shareholders elected the following Trustees to serve until
their respective successors are duly elected and qualified, with the votes
tabulated as follows:
WITHHELD
FOR AUTHORITY
- ------------------------------------------------------------------------
James F. Carlin 9,253,411 102,437
William H. Cunningham 9,250,532 105,316
Richard P. Chapman, Jr. 9,240,943 114,905
James A. Shepherdson 9,250,794 105,054
The shareholders ratified the Trustees' selection of Deloitte & Touche LLP
as the Fund's independent auditor for the fiscal year ending October 31,
2005, with votes tabulated as follows: 9,248,849 FOR, 40,124 AGAINST and
66,875 ABSTAINING.
21
22
23
24
For more information
The Fund's proxy voting policies, procedures and records are available
without charge, upon request:
By phone On the Fund's Web site On the SEC's Web site
1-800-225-5291 www.jhfunds.com/proxy www.sec.gov
Trustees
Charles L. Ladner, Chairman*
James F. Carlin
Richard P. Chapman, Jr.*
William H. Cunningham
Ronald R. Dion
Dr. John A. Moore*
Patti McGill Peterson*
Steven R. Pruchansky
James A. Shepherdson
Lt. Gen. Norman H. Smith,
USMC (Ret.)
*Members of the Audit Committee
Officers
James A. Shepherdson
President and
Chief Executive Officer
William H. King
Vice President and Treasurer
Investment adviser
John Hancock Advisers, LLC
101 Huntington Avenue
Boston, MA 02199-7603
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Transfer agent and
dividend disburser
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Transfer agent for DARTS
Deutsche Bank Trust
Company Americas
280 Park Avenue
New York, NY 10017
Legal counsel
Wilmer Cutler Pickering
Hale and Dorr LLP
60 State Street
Boston, MA 02109-1803
Stock symbol
Listed New York Stock
Exchange:
PDT
For shareholder assistance
refer to page 20
How to contact us
Internet www.jhfunds.com
Mail Regular mail:
Mellon Investor Services
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Phone Customer service representatives 1-800-852-0218
Portfolio commentary 1-800-344-7054
24-hour automated information 1-800-843-0090
TDD line 1-800-231-5469
A listing of month-end portfolio holdings is available on our Web site,
www.jhfunds.com. A more detailed portfolio holdings summary is available
on a quarterly basis 60 days after the fiscal quarter on our Web site or
upon request by calling 1-800-225-5291, or on the Securities and Exchange
Commission's Web site, www.sec.gov.
25
[A 1 1/2" x 1/2" John Hancock (Signature) logo in upper left hand corner.
A tag line below reads "JOHN HANCOCK FUNDS."]
1-800-852-0218
1-800-843-0090 EASI-Line
1-800-231-5469 (TDD)
www.jhfunds.com
P20SA 4/05
6/05
ITEM 2. CODE OF ETHICS.
As of the end of the period, April 30, 2005, the registrant has adopted a
code of ethics, as defined in Item 2 of Form N-CSR, that applies to its
Chief Executive Officer, Chief Financial Officer and Treasurer
(respectively, the principal executive officer, the principal financial
officer and the principal accounting officer, the "Senior Financial
Officers"). A copy of the code of ethics is filed as an exhibit to this
Form N-CSR.
The code of ethics was amended effective February 1, 2005 to address new
Rule 204A-1 under the Investment Advisers Act of 1940 and to make other
related changes.
The most significant amendments were:
(a) Broadening of the General Principles of the code to cover compliance
with all federal securities laws.
(b) Eliminating the interim requirements (since the first quarter of 2004)
for access persons to preclear their personal trades of John Hancock mutual
funds. This was replaced by post-trade reporting and a 30 day hold
requirement for all employees.
(c) A new requirement for "heightened preclearance" with investment
supervisors by any access person trading in a personal position worth
$100,000 or more.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has adopted procedures by which shareholders may recommend
nominees to the registrant's Board of Trustees. A copy of the procedures
is filed as an exhibit to this Form
N-CSR. See attached "John Hancock Funds - Administration Committee Charter"
and "John Hancock Funds - Governance Committee Charter".
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of
this Form N-CSR, the registrant's principal executive officer and principal
financial officer have concluded that those disclosure controls and
procedures provide reasonable assurance that the material information
required to be disclosed by the registrant on this report is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal half-year (the registrant's second fiscal half-year in the case of
an annual report) that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive
officer and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company
Act of 1940, are attached.
(b) Separate certifications for the registrant's principal executive
officer and principal financial officer, as required by 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
and Rule 30a-2(b) under the Investment Company Act of 1940, are attached.
The certifications furnished pursuant to this paragraph are not deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, or otherwise subject to the liability of that section. Such
certifications are not deemed to be incorporated by reference into any
filing under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the Registrant specifically incorporates
them by reference.
(c)(1) Submission of Matters to a Vote of Security Holders is attached. See
attached "John Hancock Funds - Administration Committee Charter" and "John
Hancock Funds - Governance Committee Charter".
(c)(2) Contact person at the registrant.
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 Patriot Premium Dividend Fund II
By:
------------------------------
James A. Shepherdson
President and Chief Executive Officer
Date: June 30, 2005
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:
------------------------------
James A. Shepherdson
President and Chief Executive Officer
Date: June 30, 2005
By:
------------------------------
William H. King
Vice President and Treasurer
Date: June 30, 2005