a_taxadvdivincome.htm
   
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 811-21416 
 
John Hancock Tax-Advantaged Dividend Income Fund 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Salvatore Schiavone, 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






Tax-Advantaged Dividend Income Fund
As of 7-31-11 (Unaudited)

     
  Shares  Value 
 
Common Stocks 87.81% (58.83% of Total Investments)    $582,528,245 

(Cost $528,429,228)     
 
Energy 9.93%    65,883,280 

 
Oil, Gas & Consumable Fuels 9.93%     
BP PLC, ADR (L)(Z)  187,500  8,520,000 
Chevron Corp. (L)(Z)  90,000  9,361,800 
ConocoPhillips  97,500  7,019,025 
Kinder Morgan, Inc.  11,000  310,530 
Spectra Energy Corp. (L)(Z)  1,050,000  28,371,000 
Total SA, ADR (L)(Z)  227,500  12,300,925 
 
Industrials 1.24%    8,238,600 

 
Industrial Conglomerates 1.24%     
General Electric Company (L)(Z)  460,000  8,238,600 
 
Telecommunication Services 5.00%    33,138,150 

 
Diversified Telecommunication Services 3.08%     
Alaska Communications Systems Group, Inc. (Z)  55,000  397,650 
AT&T, Inc. (Z)  400,000  11,704,000 
Verizon Communications, Inc. (L)(Z)  235,000  8,293,150 
     
Wireless Telecommunication Services 1.92%     
Vodafone Group PLC, ADR (L)(Z)  453,500  12,743,350 
 
Utilities 71.64%    475,268,215 

 
Electric Utilities 19.79%     
American Electric Power Company, Inc. (L)(Z)  595,000  21,931,700 
Duke Energy Corp. (L)(Z)  765,000  14,229,000 
Entergy Corp. (L)(Z)  145,000  9,686,000 
FirstEnergy Corp. (Z)  510,000  22,771,500 
PNM Resources, Inc. (Z)  58,000  871,160 
Progress Energy, Inc. (L)(Z)  600,000  28,044,000 
Southern Company (Z)  441,867  17,471,421 
UIL Holdings Corp.  510,000  16,284,300 
     
Gas Utilities 9.37%     
Atmos Energy Corp. (L)(Z)  725,000  24,236,750 
Northwest Natural Gas Company (Z)  132,500  5,910,825 
ONEOK, Inc. (Z)  440,000  32,027,600 
     
Multi-Utilities 42.48%     
Ameren Corp. (L)(Z)  555,000  15,995,100 
Black Hills Corp. (L)(Z)  600,000  17,928,000 
CH Energy Group, Inc. (Z)  457,000  23,338,990 
Consolidated Edison, Inc. (L)(Z)  265,000  13,939,000 
Dominion Resources, Inc. (L)(Z)  420,000  20,349,000 
DTE Energy Company (L)(Z)  543,100  27,068,104 
Integrys Energy Group, Inc. (L)(Z)  555,000  27,866,550 
National Grid PLC, ADR  200,000  9,838,000 
NiSource, Inc. (Z)  790,500  15,912,765 
NSTAR  575,000  25,489,750 
OGE Energy Corp.  620,000  31,024,800 
Public Service Enterprise Group, Inc. (L)(Z)  360,000  11,790,000 
Vectren Corp. (L)(Z)  790,000  20,863,900 
Xcel Energy, Inc. (L)(Z)  850,000  20,400,000 

 

 
1 

 



Tax-Advantaged Dividend Income Fund
As of 7-31-11 (Unaudited)

     
  Shares  Value 
  
Preferred Securities 61.26% (41.05% of Total Investments)    $406,450,343 

(Cost $414,802,260)     
 
Consumer Discretionary 0.47%    3,131,580 

 
Media 0.47%     
Comcast Corp., 7.000% (Z)  123,000  3,131,580 
 
Energy 3.35%    22,201,540 

 
Oil, Gas & Consumable Fuels 3.35%     
Nexen, Inc., 7.350% (C)  882,765  22,201,540 
 
Financials 35.75%    237,198,448 

 
Capital Markets 0.00%     
Lehman Brothers Holdings, Inc., Depositary Shares, Series C,     
5.940% (I)  274,760  2,748 
Lehman Brothers Holdings, Inc., Depositary Shares, Series D,     
5.670% (I)  65,000  4,550 
Lehman Brothers Holdings, Inc., Depositary Shares, Series F,     
6.500% (I)  219,300  2,193 
     
Commercial Banks 12.02%     
Barclays Bank PLC, Series 5, 8.125% (L)(Z)  460,078  11,653,776 
HSBC Holdings PLC, 8.000% (C)  325,000  8,872,500 
HSBC Holdings PLC, 8.125% (Z)  50,000  1,329,500 
Royal Bank of Scotland Group PLC, Series L, 5.750% (L)(Z)  858,500  14,920,730 
Santander Finance Preferred SA Unipersonal, Series 10, 10.500%  242,000  6,742,120 
Santander Finance Preferred SA, Series 1, 6.410%  15,500  356,500 
Santander Holdings USA, Inc., Series C, 7.300%  40,000  1,002,000 
USB Capital VIII, Series 1, 6.350%  55,000  1,373,350 
Wells Fargo & Company, 8.000% (L)(Z)  1,207,000  33,494,250 
     
Consumer Finance 1.04%     
HSBC Finance Corp., Depositary Shares, Series B, 6.360% (Z)  150,000  3,588,000 
SLM Corp., Series A, 6.970% (Z)  74,000  3,330,000 
     
Diversified Financial Services 18.99%     
Bank of America Corp., 6.700% (Z)  500,000  11,675,000 
Bank of America Corp., 6.375% (Z)  139,000  3,032,980 
Bank of America Corp., 6.625% (L)(Z)  355,000  8,147,250 
Bank of America Corp., 8.200% (Z)  135,000  3,379,050 
Bank of America Corp., Depositary Shares, Series D, 6.204% (Z)  240,000  5,289,600 
Bank of America Corp., Series MER, 8.625% (C)  652,800  16,672,512 
Citigroup Capital VIII, 6.950% (L)(Z)  540,000  13,370,400 
Citigroup Capital XIII (7.875% to 10/30/2015, then 3 month LIBOR +     
6.370%), 7.875%  27,100  733,597 
Citigroup, Inc., 8.125%  270,400  7,287,280 
Deutsche Bank Capital Funding Trust VIII, 6.375% (Z)  282,000  6,463,440 
Deutsche Bank Contingent Capital Trust II, 6.550% (Z)  310,000  7,309,800 
Deutsche Bank Contingent Capital Trust III, 7.600% (L)(Z)  797,893  20,138,819 
ING Groep NV, 7.050% (Z)  140,000  3,138,800 
ING Groep NV, 6.200% (Z)  109,100  2,242,005 
JPMorgan Chase & Company, 8.625% (Z)  140,000  3,822,000 
RBS Capital Funding Trust VII, 6.080%  983,000  13,260,670 
     
Insurance 3.68%     
MetLife, Inc., Series B, 6.500% (L)(Z)  977,200  24,420,228 

 

 
2 

 



Tax-Advantaged Dividend Income Fund
As of 7-31-11 (Unaudited)

     
  Shares  Value 
 
Financials (continued)     

 
Thrifts & Mortgage Finance 0.02%     
Federal National Mortgage Association, Series S, 7.750%  60,000  142,800 
 
Telecommunication Services 2.28%    15,155,584 

 
Diversified Telecommunication Services 1.25%     
Qwest Corp., 7.375%  320,000  8,304,000 
     
Wireless Telecommunication Services 1.03%     
Telephone & Data Systems, Inc., 6.875%  240,176  6,033,221 
United States Cellular Corp., 6.950%  32,181  818,363 
 
Utilities 19.41%    128,763,191 

 
Electric Utilities 13.63%     
Alabama Power Company, Class A, 5.300% (Z)  193,200  4,830,000 
Carolina Power & Light Company, 5.440% (Z)  111,493  10,853,152 
Duquesne Light Company, 6.500% (L)(Z)  427,000  21,203,240 
Entergy Arkansas, Inc., 4.560% (Z)  9,388  784,192 
Entergy Arkansas, Inc., 6.450% (Z)  110,000  2,701,875 
Entergy Mississippi, Inc., 4.920% (Z)  8,190  772,931 
Entergy Mississippi, Inc., 6.250% (Z)  197,500  4,962,188 
FPC Capital I, Series A, 7.100% (Z)  55,000  1,402,500 
Mississippi Power Company, 5.250%  262,500  6,591,375 
PPL Corp., 9.500%  285,000  15,985,650 
PPL Electric Utilities Corp., Depositary Shares, 6.250% (Z)  500,000  12,540,000 
Southern California Edison Company, 6.125% (Z)  50,000  4,842,190 
Southern California Edison Company, Series C, 6.000% (Z)  30,000  2,923,125 
     
Independent Power Producers & Energy Traders 2.44%     
Constellation Energy Group, Inc., Series A, 8.625% (L)(Z)  597,483  16,185,814 
     
Multi-Utilities 3.34%     
BGE Capital Trust II, 6.200% (Z)  160,500  4,015,710 
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%  16,400  1,492,400 
Consolidated Edison Company of New York, Inc., Series D, 4.650%  5,000  422,764 
Interstate Power & Light Company, Series B, 8.375% (Z)  230,000  6,596,400 
Xcel Energy, Inc., Series G, 4.560% (Z)  77,350  7,205,153 
  
Short-Term Investments 0.19% (0.13% of Total Investments)    $1,248,000 

(Cost $1,248,000)     
 
  Shares  Value 
 
Repurchase Agreement 0.19%    1,248,000 

Repurchase Agreement with State Street Corp. dated 7-29-11 at 0.010% to be     
repurchased at $1,248,000 on 7-1-11, collateralized by $1,160,000 Federal Home     
Loan Mortgage Corp., 0.515% due 11-26-12 (valued at $1,164,350) and $110,000     
U.S. Treasury Notes, 2.375% due 6-30-18 (valued at $112,063, including interest)  1,248,000  1,248,000 
 
 
Total investments (Cost $944,479,488)† 149.26%    $990,226,588 

 
Other assets and liabilities, net (49.26%)    ($326,821,211) 

 
Total net assets 100.00%    $663,405,377 

 


The percentage shown for each investment category is the total value the category as a percentage of the net assets of the Fund.

 

 
 
3 

 



Tax-Advantaged Dividend Income Fund
As of 7-31-11 (Unaudited)

ADR American Depositary Receipts

LIBOR London Interbank Offered Rate

(C) All or a portion of this security is segregated at the custodian as collateral for options. Total collateral value at 7-31-11 was $50,792,187.

(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 $300,504,253.

(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 $647,078,892.

† At 7-31-11, the aggregate cost of investment securities for federal income tax purposes was $956,607,347. Net unrealized appreciation aggregated $33,619,241, of which $103,922,756 related to appreciated investment securities and $70,303,515 related to depreciated investment securities.

 
4 

 



Notes 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:

           
       Total      Level 2     Level 3 
      Market    Level 1    Significant    Significant 
      Value at    Quoted    Observable    Unobservable 
       7/31/2011    Price    Inputs    Inputs 

Common Stocks           
Energy    $65,883,280  $65,883,280  -  - 
Industrials    8,238,600  8,238,600  -  - 
Telecommunication Services    33,138,150  33,138,150  -  - 
Utilities    475,268,215  475,268,215  -  - 
Preferred Securities           
Consumer Discretionary    3,131,580  3,131,580  -  - 
Energy    22,201,540  22,201,540  -  - 
Financials    237,198,448  237,195,700  $2,748  - 
Telecommunication Services    15,155,584  15,155,584  -  - 
Utilities    128,763,191  79,297,534  49,465,657  - 
Short-Term Investments    1,248,000  -  1,248,000  - 
   
Total investments in Securities    $990,226,588  $939,510,183  $50,716,405  - 
Other Financial Instruments:           
Written Options    ($1,038,225)  ($1,038,225)  -  - 

 

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, including forward foreign currency contracts, are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing service. Certain securities and forward foreign currency contracts traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. 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.

 
5 

 



Repurchase agreements. The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement, it receives collateral which is held in a segregated account by the Fund’s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline.

Options. There are two types of options, a put option and a call option. A call option gives the purchaser of the option the right to buy (and the seller the obligation to sell) the underlying instrument at the exercise price. A put option gives the purchaser of the option the right to sell (and the writer the obligation to buy) the underlying instrument at the exercise price. Writing puts and buying calls may increase the Fund’s exposure to changes in the value of the underlying instrument. Buying puts and writing calls may decrease the Fund’s exposure to such changes. Risks related to the use of options include the loss of the premium, possible illiquidity of the options markets, trading restrictions imposed by an exchange and movements in underlying security values.

Options are traded either over-the-counter or on an exchange. Options listed on an exchange are valued at their closing price. If no closing price is available, then they are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. For options not listed on an exchange, an independent pricing source is used to value the options at the mean between the last bid and ask prices. When the Fund purchases an option, the premium paid by the Fund is included in the Portfolio of Investments and subsequently “marked-to-market” to reflect current market value. When the Fund writes an option, the premium received is included as a liability and subsequently “marked-to-market” to reflect current market value of the option written.

During the nine months ended July 31, 2011, the Fund wrote option contracts to generate income and reduce overall volatility of the portfolio. The following tables summarize the Fund’s written options activities during the nine months ended July 31, 2011 and the contracts held at July 31, 2011.

     
  NUMBER OF  PREMIUMS RECEIVED 
  CONTRACTS  (PAID) 

Outstanding, beginning of period  2,519  $2,370,329 
Options written  19,149  24,739,679 
Options closed  (15,538)  (23,825,133) 
Options expired  (4,315)  (1,459,639) 
Outstanding, end of period  1,815  $1,825,236 

 

           
NAME OF ISSUER  EXERCISE  EXPIRATION  NUMBER OF  PREMIUM  VALUE 
  PRICE  DATE  CONTRACTS     

CALLS           
Morgan Stanley Cyclical           
Index  $1,080  Aug 2011  70  $164,288  ($32,900) 
Russell 2000 Index  835  Aug 2011  90  160,131  (50,400) 
S&P 100 Index  590  Aug 2011  865  845,086  (622,800) 
S&P 400 MidCap Index  980  Aug 2011  80  150,958  (59,200) 
S&P 500 Index  1,355  Aug 2011  540  430,368  (253,800) 
S&P 600 MidCap Index  460  Aug 2011  170  74,405  (19,125) 
Total      1,815  $1,825,236  ($1,038,225) 

 

 
6 

 



Fair value of derivative instruments by risk category

The table below summarizes the fair value of derivatives held by the Fund at July 31, 2011 by risk category:

       
Risk    Financial instruments location    Asset Derivatives    Liability Derivatives 
      Fair Value    Fair Value 

Equity contracts  Written options  -  ($1,038,225) 

 

For additional information on the Fund's significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report.

 

 
7 

 






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 Tax-Advantaged Dividend Income 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