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: 811-00248
---------------------------------------------
THE ADAMS EXPRESS COMPANY
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(Exact name of registrant as specified in charter)
7 Saint Paul Street, Suite 1140, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip code)
Lawrence L. Hooper, Jr.
The Adams Express Company
7 Saint Paul Street
Suite 1140
Baltimore, Maryland 21202
Registrant's telephone number, including area code: 410-752-5900
Date of fiscal year end: December 31, 2005
Date of reporting period: June 30, 2005
Item 1: Reports to Stockholders.
THE ADAMS EXPRESS COMPANY
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Board of Directors
Enrique R. Arzac/ 1,3/ Kathleen T. McGahran /2,4/
Phyllis O. Bonanno /1,3/ Douglas G. Ober/ 1/
Daniel E. Emerson/ 3,4 / John J. Roberts/ 1,4 /
Thomas H. Lenagh/ 1,4/ Susan C. Schwab/ 2,4 /
W.D. MacCallan/ 2,3/ Robert J.M. Wilson/ 1,2 /
1. Member of Executive Committee
2. Member of Audit Committee
3. Member of Compensation Committee
4. Member of Retirement Benefits Committee
Officers
Douglas G. Ober Chairman and
Chief Executive Officer
Joseph M. Truta President
Lawrence L. Hooper, Jr. Vice President, General
Counsel and Secretary
Maureen A. Jones Vice President,
Chief Financial Officer
and Treasurer
Stephen E. Kohler Vice President--Research
David R. Schiminger Vice President--Research
D. Cotton Swindell Vice President--Research
Christine M. Sloan Assistant Treasurer
Geraldine H. Pare Assistant Secretary
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Stock Data
--------
Market Price (6/30/05) $12.87
Net Asset Value (6/30/05) $15.06
Discount: 14.5%
New York Stock Exchange and Pacific Exchange ticker symbol: ADX
NASDAQ Mutual Fund Quotation Symbol: XADEX
Newspaper stock listings are generally under the abbreviation: AdaEx
----------------
Distributions in 2005
----------------
From Investment Income (paid or declared) $0.14
From Net Realized Gains 0.01
-----
Total $0.15
=====
----------------------
2005 Dividend Payment Dates
----------------------
March 1, 2005
June 1, 2005
September 1, 2005
December 27, 2005*
*Anticipated
Semi-Annual Report
June 30,2005
[GRAPHIC]
[GRAPHIC]
LETTER TO STOCKHOLDERS
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We submit herewith the audited financial statements of the Company for the six
months ended June 30, 2005. Also provided are the report of the independent
registered public accounting firm, a schedule of investments and other summary
financial information.
Net assets of the Company at June 30, 2005 were $15.06 per share on 84,960,583
shares outstanding, compared with $15.04 per share at December 31, 2004 on
86,135,292 shares outstanding. On March 1, 2005, a distribution of $0.05 per
share was paid, consisting of $0.03 from 2004 investment income, $0.01 from
2004 short-term capital gain, and $0.01 from 2005 investment income, all
taxable in 2005. A 2005 investment income dividend of $0.05 per share was paid
on June 1, 2005 and another $0.05 investment income dividend has been declared
to shareholders of record August 16, 2005, payable on September 1, 2005.
Net investment income for the six months ended June 30, 2005 amounted to
$8,701,535, compared with $7,719,995 for the same period in 2004. These
earnings are equal to $0.10 and $0.09 per share, respectively, on the average
number of shares outstanding during each period.
Net capital gain realized on investments for the six months ended June 30, 2005
amounted to $17,716,584, the equivalent of $0.21 per share.
The Annual Meeting, held on April 27, 2005 in Baltimore, was well attended. The
results of the voting at the Annual Meeting are shown on page 17.
Current and potential shareholders can find information about the Company,
including the daily net asset value (NAV) per share, the market price, and the
discount/ premium to the NAV, at its website (www.adamsexpress.com). Also
available at the website are a history of the Company, historical financial
information, and other useful information. Further information regarding
shareholder services is located on page 18 of this report.
Mr. W. Perry Neff retired from the Board of Directors in April 2005. Mr. Neff
was elected to the Board in 1987 and generously shared his extensive financial
knowledge acquired from his long and successful career in the banking industry.
We wish him well in his retirement and thank him for his eighteen years of
distinguished service as a director.
We are pleased to announce effective April 27, 2005, the Board of Directors
elected Mr. David R. Schiminger to Vice President--Research. Mr. Schiminger has
been with the Company since 2002 as a research analyst covering the healthcare
and consumer staples sectors.
-----------------
The Company is an internally-managed equity fund whose investment policy is
based on the primary objectives of preservation of capital, the attainment of
reasonable income from investments, and an opportunity for capital appreciation.
By order of the Board of Directors,
/s/ DOUGLAS G. OBER
Douglas G. Ober,
Chairman and
Chief Executive Officer
/s/ JOSEPH M. TRUTA
Joseph M. Truta,
President
July 20, 2005
STATEMENT OF ASSETS AND LIABILITIES
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June 30, 2005
Assets
Investments* at value:
Common stocks and convertible securities
(cost $890,690,578) $1,184,235,477
Non-controlled affiliate, Petroleum & Resources Corporation
(cost $27,963,162) 59,579,880
Short-term investments (cost $30,767,784) 30,767,784 $1,274,583,141
-----------------------------------------------------------------------------------------
Cash 297,344
Receivables:
Investment securities sold 28,049
Dividends and interest 1,482,516
Prepaid pension cost 5,547,843
Prepaid expenses and other assets 1,548,765
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Total Assets 1,283,487,658
-------------------------------------------------------------------------------------------------------
Liabilities
Investment securities purchased 225,066
Open written option contracts at value (proceeds $765,056) 946,750
Accrued expenses 3,050,750
-------------------------------------------------------------------------------------------------------
Total Liabilities 4,222,566
-------------------------------------------------------------------------------------------------------
Net Assets $1,279,265,092
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Net Assets
Common Stock at par value $1.00 per share, authorized 150,000,000 shares;
issued and outstanding 84,960,583 shares (includes 13,941 restricted
shares and restricted stock units for 6,750 shares) (Note 6) $ 84,960,583
Additional capital surplus 845,310,951
Undistributed net investment income 5,814,847
Undistributed net realized gain on investments 18,198,788
Unrealized appreciation on investments 324,979,923
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Net Assets Applicable to Common Stock $1,279,265,092
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Net Asset Value Per Share of Common Stock $15.06
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*See Schedule of Investments on pages 9 through 10.
The accompanying notes are an integral part of the financial statements.
2
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
Six Months Ended June 30, 2005
Investment Income
Income:
Dividends:
From unaffiliated issuers $ 10,757,754
From non-controlled affiliate 397,199
Interest and other income 312,439
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Total Income 11,467,392
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Expenses:
Investment research 1,229,364
Administration and operations 571,087
Directors' fees 147,463
Reports and stockholder communications 142,085
Transfer agent, registrar and custodian expenses 191,183
Auditing and accounting services 56,924
Legal services 105,685
Occupancy and other office expenses 208,985
Travel, telephone and postage 50,934
Other 62,147
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Total Expenses 2,765,857
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Net Investment Income 8,701,535
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Realized Gain and Change in Unrealized Appreciation on Investments
Net realized gain on security transactions 17,597,424
Net realized gain distributed by regulated investment company (non-controlled affiliate) 119,160
Change in unrealized appreciation on investments (18,690,489)
--------------------------------------------------------------------------------------------------------
Net Gain(Loss) on Investments (973,905)
--------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting from Operations $ 7,727,630
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The accompanying notes are an integral part of the financial statements.
3
STATEMENTS OF CHANGES IN NET ASSETS
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Six Months Ended Year Ended
June 30, 2005 December 31, 2004
---------------- -----------------
From Operations:
Net investment income $ 8,701,535 $ 19,008,405
Net realized gain on investments 17,716,584 54,713,903
Change in unrealized appreciation on investments (18,690,489) 61,557,921
---------------------------------------------------------------------------------------------
Change in net assets resulting from operations 7,727,630 135,280,229
---------------------------------------------------------------------------------------------
Distributions to Stockholders from:
Net investment income (7,689,212) (20,157,724)
Net realized gain from investment transactions (856,720) (55,099,990)
---------------------------------------------------------------------------------------------
Decrease in net assets from distributions (8,545,932) (75,257,714)
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From Capital Share Transactions:
Value of shares issued in payment of distributions -- 35,690,590
Cost of shares purchased (Note 4) (15,489,364) (19,026,661)
Deferred compensation (Notes 4, 6) 23,858 --
---------------------------------------------------------------------------------------------
Change in net assets from capital share transactions (15,465,506) 16,663,929
---------------------------------------------------------------------------------------------
Total Change in Net Assets (16,283,808) 76,686,444
Net Assets:
Beginning of period 1,295,548,900 1,218,862,456
---------------------------------------------------------------------------------------------
End of period (including undistributed net investment
income of $5,814,847 and $5,038,545, respectively) $1,279,265,092 $1,295,548,900
---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
4
NOTES TO FINANCIAL STATEMENTS
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1. Significant Accounting Policies
The Adams Express Company (the Company) is registered under the Investment
Company Act of 1940 as a diversified investment company. The Company's
investment objectives as well as the nature and risk of its investment
transactions are set forth in the Company's registration statement.
Security Valuation -- Investments in securities traded on a national security
exchange are valued at the last reported sale price on the day of valuation.
Over-the-counter and listed securities for which a sale price is not available
are valued at the last quoted bid price. Short-term investments (excluding
purchased options) are valued at amortized cost. Purchased and written options
are valued at the last quoted asked price.
Affiliated Companies -- Investments in companies 5% or more of whose
outstanding voting securities are held by the Company are defined as
"Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940.
Security Transactions and Investment Income -- Investment transactions are
accounted for on the trade date. Gain or loss on sales of securities and
options is determined on the basis of identified cost. Dividend income and
distributions to shareholders are recognized on the ex-dividend date, and
interest income is recognized on the accrual basis.
2. Federal Income Taxes
The Company's policy is to distribute all of its taxable income to its
shareholders in compliance with the requirements of the Internal Revenue Code
applicable to regulated investment companies. Therefore, no federal income tax
provision is required. For federal income tax purposes, the identified cost of
securities at June 30, 2005 was $948,934,273 and net unrealized appreciation
aggregated $325,648,868, of which the related gross unrealized appreciation and
depreciation were $432,136,900 and $106,488,032, respectively.
Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. Accordingly, annual
reclassifications are made within the Company's capital accounts to reflect
income and gains available for distribution under income tax regulations.
3. Investment Transactions
The Company's investment decisions are made by a committee of management, and
recommendations to that committee are made by the research staff.
Purchases and sales of portfolio securities, other than options and short-term
investments, during the six months ended June 30, 2005 were $91,383,757 and
$102,728,044, respectively. Options may be written (sold) or purchased by the
Company. The Company, as writer of an option, bears the risks of possible
illiquidity of the option markets and from movements in security values. The
risk associated with purchasing an option is limited to the premium originally
paid. A schedule of outstanding option contracts as of June 30, 2005 can be
found on page 12.
Transactions in written covered call and collateralized put options during the
six months ended June 30, 2005 were as follows:
Covered Calls Collateralized Puts
------------------- -------------------
Contracts Premiums Contracts Premiums
--------- --------- --------- ---------
Options outstanding,
December 31, 2004 3,600 $ 386,349 2,655 $ 268,082
Options written 6,430 721,641 4,140 475,563
Options terminated in closing
purchase transactions (936) (98,506) -- --
Options expired (3,034) (339,834) (3,485) (361,698)
Options exercised (1,780) (207,743) (650) (78,798)
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Options outstanding,
June 30, 2005 4,280 $ 461,907 2,660 $ 303,149
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4. Capital Stock
The Company has 10,000,000 authorized and unissued preferred shares without par
value.
On December 27, 2004, the Company issued 2,745,430 shares of its Common Stock
at a price of $13.00 per share (the average market price on December 13, 2004)
to stockholders of record on November 23, 2004 who elected to take stock in
payment of the year-end distribution from 2004 capital gain and investment
income.
The Company may purchase shares of its Common Stock from time to time at such
prices and amounts as the Board of Directors may deem advisable.
Transactions in Common Stock for 2005 and 2004 were as follows:
Shares Amount
----------------------- --------------------------
Six months Six months
ended Year ended ended Year ended
June 30, December 31, June 30, December 31,
2005 2004 2005 2004
---------- ------------ ------------ ------------
Shares issued in
payment of dividends -- 2,745,430 $ -- $ 35,690,590
Shares purchased
(at a weighted
average discount
from net asset
value of 12.6%
and 13.0%,
respectively) (1,195,400) (1,496,550) (15,489,364) (19,026,661)
Nonvested shares/units
granted under the
Equity Incentive
Compensation Plan 20,691 -- 23,858 --
---------------------------------------------------------------------------
Net change (1,174,709) 1,248,880 $(15,465,506) $ 16,663,929
---------------------------------------------------------------------------
5. Retirement Plans
The Company's qualified defined benefit pension plan covers all employees with
at least one year of service. In addition, the Company has a nonqualified
defined benefit plan which provides eligible employees with retirement benefits
to supplement the qualified plan. Benefits are based on length of service
5
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
and compensation during the last five years of employment. The Company's policy
is to contribute annually to the plans those amounts that can be deducted for
federal income tax purposes, plus additional amounts as the Company deems
appropriate in order to provide assets sufficient to meet benefits to be paid
to plan participants. During the six months ended June 30, 2005, the Company
contributed $9,422 to the plans. The Company anticipates contributing an
additional $9,422 to the plans in 2005.
The following table aggregates the components of the plans' net periodic
pension cost for the six months ended June 30, 2005:
Service cost $ 179,999
Interest cost 252,165
Expected return on plan assets (394,669)
Amortization of prior service cost 63,277
Amortization of net loss 94,231
---------------------------------------------
Net periodic pension cost $ 195,003
---------------------------------------------
The Company also sponsors a defined contribution plan that covers substantially
all employees. For the six months ended June 30, 2005, the Company expensed
contributions of $88,304. The Company does not provide postretirement medical
benefits.
6. Stock-Based Compensation
The Stock Option Plan adopted in 1985 ("1985 Plan") permits the issuance of
stock options and stock appreciation rights for the purchase of up to 2,610,146
shares of the Company's Common Stock at the fair market value on the date of
grant. The exercise price of the options and related stock appreciation rights
is reduced by the per share amount of capital gains paid by the Company during
subsequent years. Options are exercisable beginning not less than one year
after the date of grant and stock appreciation rights are exercisable beginning
not less than two years after the date of grant. The stock appreciation rights
allow the holders to surrender their rights to exercise their options and
receive cash in an amount equal to the difference between the option exercise
price and the fair market value of the Common Stock at the date of surrender.
All options terminate 10 years from the date of grant if not exercised. With
the adoption of the 2005 Equity Incentive Compensation Plan ("2005 Plan") at
the 2005 Annual Meeting, no further grants will be made under the 1985 Plan,
although unexercised awards granted in 2004 and prior years remain outstanding.
A summary of option activity under the 1985 Plan as of June 30, 2005, and
changes during the period then ended is presented below:
Weighted- Weighted-
Average Average
Exercise Remaining
Options Price Life (Years)
- ------- --------- ------------
Outstanding at January 1, 2005 283,297 $11.76
Exercised -- --
Forfeited -- --
-------------------------------------------------------------
Outstanding at June 30, 2005 283,297 $11.75 5.97
-------------------------------------------------------------
Exercisable at June 30, 2005 180,888 $11.44 5.86
-------------------------------------------------------------
The options outstanding as of June 30, 2005 are set forth below:
Weighted Weighted
Average Average
Options Exercise Remaining
Exercise Price Outstanding Price Life (Years)
-------------- ----------- -------- ------------
$3.00-$6.74 23,418 $ 4.18 1.15
$6.75-$10.49 72,764 9.67 6.44
$10.50-$14.24 135,967 10.85 6.88
$14.25-$18.00 51,148 17.59 5.09
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Outstanding at June 30, 2005 283,297
--------------------------------------------------------------
Compensation cost resulting from stock options and stock appreciation rights
granted under the 1985 Plan is based on the intrinsic value of the award,
recognized over the award's vesting period, and remeasured at each reporting
date through the date of settlement. The total compensation cost recognized for
the six months ended June 30, 2005 was ($8,205).
The 2005 Plan permits the grant of stock options, restricted stock awards and
other stock incentives to key employees and all non-employee directors. The
2005 Plan provides for the issuance of up to 3,413,131 shares of the Company's
Common Stock. Restricted stock was granted to key employees on April 27, 2005
at fair market value on that date, vesting over a three year period. Restricted
stock units were granted to non-employee directors on April 27, 2005 at fair
market value on that date and vest over a one year period. The number of shares
of Common Stock which remain available for future grants under the Plan at
June 30, 2005 is 3,392,440 shares. The Company pays dividends and dividend
equivalents on outstanding awards, which are charged to net assets when paid.
Dividends and dividend equivalents paid on restricted awards that are later
forfeited are reclassified to compensation expense.
A summary of the status of the Company's awards granted as of June 30, 2005,
and changes during the period then ended is presented below:
Grant-Date Fair
Awards Shares/Units Value
------ ------------ ---------------
Balance at January 1, 2005 -- --
Granted:
Restricted stock 13,941 $12.56
Restricted stock units 6,750 12.56
Vested -- --
Forfeited -- --
-------------------------------------------------------
Nonvested at June 30, 2005 20,691 $12.56
-------------------------------------------------------
Compensation costs resulting from restricted stock and restricted stock units
granted under the 2005 Plan are recognized over the relevant service period
based on the fair value of the awards granted. Any unearned compensation is
included in "Undistributed net investment income" and is subsequently expensed
as services are rendered. The fair value of restricted stock is based on the
average of the high and low market price on the date an award is granted. The
total compensation costs for restricted stock granted to employees for the six
months ended June 30, 2005 was $9,728. The total compensation costs for
restricted stock units granted to non-employee directors
6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
under the 2005 Plan for the six months ended June 30, 2005 was $14,130. As of
June 30, 2005, there was $236,021 of total unrecognized compensation cost
related to nonvested share-based compensation arrangements granted under the
2005 Plan. That cost is expected to be recognized over a weighted average
period of 2.2 years.
7. Expenses
The aggregate remuneration paid or accrued during the six months ended June 30,
2005 to officers and directors amounted to $1,518,593, of which $147,463 was
paid or accrued as fees to directors who were not officers.
8. Portfolio Securities Loaned
The Company makes loans of securities to brokers, secured by cash deposits,
U.S. Government securities, or bank letters of credit. The Company accounts for
securities lending transactions as secured financing and receives compensation
in the form of fees or retains a portion of interest on the investment of any
cash received as collateral. The Company also continues to receive interest or
dividends on the securities loaned. The loans are secured at all times by
collateral of at least 102% of the fair value of the securities loaned plus
accrued interest. Gain or loss in the fair value of the securities loaned that
may occur during the term of the loan will be for the account of the Company.
At June 30, 2005, the Company had no securities on loan.
7
FINANCIAL HIGHLIGHTS
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------------------------
Six Months Ended
----------------------
Year Ended December 31
June 30, June 30, -------------------------------------------------------
2005 2004 2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
Per Share Operating Performance
Net asset value, beginning of period $15.04 $14.36 $14.36 $12.12 $16.05 $23.72 $26.85
---------------------------------------------------------------------------------------------------------------------
Net investment income 0.10 0.09 0.23* 0.19 0.20 0.26 0.26
Net realized gains and
increase(decrease) in
unrealized appreciation (0.01) 0.43 1.39 2.85 (3.38) (6.21) (1.51)
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.09 0.52 1.62 3.04 (3.18) (5.95) (1.25)
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Less distributions
Dividends from net investment
income (0.09) (0.08) (0.24) (0.17) (0.19) (0.26) (0.22)
Distributions from net
realized gains (0.01) (0.02) (0.66) (0.61) (0.57) (1.39) (1.63)
---------------------------------------------------------------------------------------------------------------------
Total distributions (0.10) (0.10) (0.90) (0.78) (0.76) (1.65) (1.85)
---------------------------------------------------------------------------------------------------------------------
Capital share repurchases 0.03 0.01 0.02 0.04 0.05 0.04 0.10
Reinvestment of distributions -- -- (0.06) (0.06) (0.04) (0.11) (0.13)
---------------------------------------------------------------------------------------------------------------------
Total capital share transactions 0.03 0.01 (0.04) (0.02) 0.01 (0.07) (0.03)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.06 $14.79 $15.04 $14.36 $12.12 $16.05 $23.72
---------------------------------------------------------------------------------------------------------------------
Per share market price, end
of period $12.87 $12.72 $13.12 $12.41 $10.57 $14.22 $21.00
Total Investment Return
Based on market price (1.2)% 3.3% 13.2% 25.2% (20.6)% (24.7)% 1.7%
Based on net asset value 0.9% 3.8% 12.1% 26.3% (19.4)% (24.7)% (4.3)%
Ratios/Supplemental Data
Net assets, end of period
(in 000's) $1,279,265 $1,248,430 $1,295,549 $1,218,862 $1,024,810 $1,368,366 $1,951,563
Ratio of expenses to average
net assets 0.44%+ 0.43%+ 0.43% 0.47% 0.34% 0.19% 0.24%
Ratio of net investment income to
average net assets 1.37%+ 1.25%+ 1.54% 1.45% 1.42% 1.33% 0.97%
Portfolio turnover 14.82%+ 13.10%+ 13.43% 12.74% 17.93% 19.15% 12.74%
Number of shares outstanding at
end of period (in 000's) 84,961 84,409 86,135 84,886 84,536 85,233 82,292
------------------------
--------
* In 2004 the Fund received $2,400,000, or $0.03 per share, in an extraordinary
dividend from Microsoft Corp.
+ Ratios presented on an annualized basis.
8
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
June 30, 2005
Shares Value (A)
- --------- ------------
Stocks and Convertible Securities -- 97.2%
Consumer -- 17.0%
Consumer Discretionary -- 6.4%
Brinker International Inc. (B) 190,000 $ 7,609,500
Clear Channel Communications
Inc. 350,000 10,825,500
Comcast Corp. (B) 325,000 9,977,500
Gannett Co., Inc. 87,500 6,223,875
Newell Rubbermaid Inc. 515,000 12,277,600
Outback Steakhouse, Inc. 225,000 10,179,000
Target Corp. 460,000 25,028,600
------------
82,121,575
------------
Consumer Staples -- 10.6%
BJ's Wholesale Club, Inc. (B) 500,000 16,245,000
Bunge Ltd. 205,000 12,997,000
Coca-Cola Co. 200,000 8,350,000
Dean Foods Co. (B) 500,000 17,620,000
Del Monte Foods Co. (B) 1,115,000 12,008,550
PepsiCo, Inc. 440,000 23,729,200
Procter & Gamble Co. 340,000 17,935,000
Safeway, Inc. 423,000 9,555,570
Treehouse Foods Inc. (B) 100,000 2,851,000
Unilever plc ADR 345,000 13,403,250
------------
134,694,570
------------
Energy -- 10.3%
BP plc ADR 270,000 16,842,600
ConocoPhillips 380,000 21,846,200
Exxon Mobil Corp. 130,000 7,471,100
Murphy Oil Corp. 229,600 11,992,008
Petroleum & Resources
Corporation (C) 1,985,996 59,579,880
Schlumberger Ltd. 190,000 14,428,600
------------
132,160,388
------------
Financials -- 15.6%
Banking -- 11.5%
Bank of America Corp. 550,000 25,085,500
BankAtlantic Bancorp Inc. 300,000 5,685,000
Compass Bancshares Inc. 300,000 13,500,000
Fifth Third Bancorp 270,000 11,126,700
Investors Financial Services
Corp. 380,000 14,371,600
North Fork Bancorporation, Inc. 450,000 12,640,500
Provident Bankshares Corp. 200,000 6,382,000
Wachovia Corp. 370,000 18,352,000
Wells Fargo & Co. 400,000 24,632,000
Wilmington Trust Corp. 420,000 15,124,200
------------
146,899,500
------------
Insurance -- 4.1%
AMBAC Financial Group, Inc. 295,000 20,579,200
American International Group,
Inc. 550,000 31,955,000
------------
52,534,200
------------
Shares Value (A)
- --------- ------------
Health Care -- 13.2%
Abbott Laboratories 350,000 $ 17,153,500
Bristol-Myers Squibb Co. 345,000 8,618,100
Genentech, Inc. (B) 250,000 20,070,000
HCA Inc. 325,000 18,417,750
Johnson & Johnson 255,000 16,575,000
Laboratory Corp. of America
Holdings (B) 235,000 11,726,500
MedImmune, Inc. (B) 225,000 6,012,000
Medtronic Inc. 310,000 16,054,900
Pfizer Inc. 1,120,000 30,889,600
Wyeth Co. 325,000 14,462,500
Zimmer Holdings Inc. (B) 125,000 9,521,250
------------
169,501,100
------------
Industrials -- 10.7%
Canadian National Railway
Co. 67,000 3,862,550
Cintas Corp. 300,000 11,580,000
Donnelley (R.R.) & Sons Co. 300,000 10,353,000
Emerson Electric Co. 200,000 12,526,000
General Electric Co. 1,487,700 51,548,805
Illinois Tool Works Inc. 125,000 9,960,000
3M Co. 160,000 11,568,000
United Parcel Service, Inc. 155,000 10,719,800
United Technologies Corp. 300,000 15,405,000
------------
137,523,155
------------
Information Technology -- 13.9%
Communication Equipment -- 2.3%
Avaya Inc. (B) 600,000 4,992,000
Corning Inc. (B) 1,000,000 16,620,000
Lucent Technologies Inc. (B) 2,900,000 8,439,000
------------
30,051,000
------------
Computer Related -- 9.4%
Automatic Data Processing
Inc. 300,000 12,591,000
BEA Systems Inc. (B) 800,000 7,024,000
Cisco Systems, Inc. (B) 1,200,000 22,932,000
Dell Inc. (B) 400,000 15,804,000
DiamondCluster
International Inc. (B) 497,500 5,621,750
Microsoft Corp. 800,000 19,872,000
Oracle Corp. (B) 880,000 11,616,000
Sapient Corp. (B) 1,150,000 9,119,500
Siebel Systems Inc. 800,000 7,120,000
Sun Microsystems Inc. (B) 95,000 354,350
Symantec Corp. (B) 400,000 8,696,000
------------
120,750,600
------------
Electronics -- 2.2%
Cree, Inc. (B) 500,000 12,735,000
Intel Corp. 310,000 8,078,600
Solectron Corp. (B) 1,850,000 7,011,500
------------
27,825,100
------------
9
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
June 30, 2005
Shares Value (A)
------- --------------
Materials -- 5.3%
Air Products and Chemicals, Inc. 250,000 $ 15,075,000
du Pont (E.I.) de Nemours and
Co. 400,000 17,204,000
Martin Marietta Materials, Inc. 141,600 9,787,392
Rohm & Haas Co. 400,000 18,536,000
Smurfit-Stone Container
Corp. (B) 650,000 6,610,500
--------------
67,212,892
--------------
Telecom Services -- 4.2%
Alltel Corp. 350,000 21,798,000
BellSouth Corp. 200,000 5,314,000
SBC Communications Inc. 595,000 14,131,250
Vodafone Group plc
ADS 492,613 11,980,348
--------------
53,223,598
--------------
Utilities -- 7.0%
Aqua America, Inc. 900,000 26,766,000
Black Hills Corp. 245,000 9,028,250
CINergy Corp. 300,000 13,446,000
Duke Energy Corp. 611,560 18,181,679
Keyspan Corp. 140,000 5,698,000
MDU Resources Group, Inc. 575,000 16,197,750
--------------
89,317,679
--------------
Total Stocks and Convertible Securities
(Cost $918,653,740) (D) $1,243,815,357
--------------
Prin. Amt. Value (A)
----------- --------------
Short-Term Investments -- 2.4%
U.S. Government Obligations -- 1.4%
U.S. Treasury Bills,
2.77%, due 8/18/05 $17,500,000 $ 17,434,666
--------------
Time Deposit -- 0.0%
Citibank N.A.,
2.70%, due 7/1/05 101,346
--------------
Commercial Paper -- 1.0%
AIG Funding Inc.,
3.21%, due 7/12/05 1,275,000 1,273,749
General Electric Capital Corp.,
2.99-3.25%,
due 7/7/05-7/19/05 5,500,000 5,493,316
Toyota Motor Credit Corp.,
3.19-3.24%,
due 7/14/05-7/21/05 6,475,000 6,464,707
--------------
13,231,772
--------------
Total Short-Term Investments
(Cost $30,767,784) 30,767,784
--------------
Total Investments -- 99.6%
(Cost $949,421,524) 1,274,583,141
Cash, receivables and other
assets, less liabilities -- 0.4% 4,681,951
--------------
Net Assets -- 100% $1,279,265,092
==============
--------------------------------------------------------------------------------
Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ.
(B) Presently non-dividend paying.
(C) Non-controlled affiliate, a closed-end sector fund, registered as an
investment company under the Investment Company Act of 1940.
(D) The aggregate market value of stocks held in escrow at June 30, 2005
covering open call option contracts written was $23,284,850. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$12,912,500.
10
PORTFOLIO SUMMARY
--------------------------------------------------------------------------------
Ten Largest Portfolio Holdings (6/30/05)
Market Value % of Net Assets
------------ ---------------
Petroleum & Resources Corporation* $ 59,579,880 4.7
General Electric Co. 51,548,805 4.0
American International Group, Inc. 31,955,000 2.5
Pfizer Inc. 30,889,600 2.4
Aqua America, Inc. 26,766,000 2.1
Bank of America Corp. 25,085,500 2.0
Target Corp. 25,028,600 2.0
Wells Fargo & Co. 24,632,000 1.9
PepsiCo, Inc. 23,729,200 1.8
Cisco Systems, Inc. 22,932,000 1.8
------------ ----
Total $322,146,585 25.2%
---------------------------------------------------------------
*Non-controlled affiliate
Sector Weightings (6/30/05)
[CHART]
Consumer 17.0
Energy 10.3
Financial 15.6
Health Care 13.2
Industrials 10.7
Information Technology 13.9
Materials 5.3
Telecom Services 4.2
Utilities 7.0
Cash & Equivalent 2.4
11
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
--------------------------------------------------------------------------------
June 30, 2005
Contracts
(100 Contract
shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
--------- ------------------------------------ ------ ---------- --------------
COVERED CALLS
200 Air Products & Chemicals, Inc. $ 65 Sep 05 $ 5,399
100 AMBAC Financial Group, Inc. 75 Jul 05 11,699
100 AMBAC Financial Group, Inc. 75 Aug 05 7,199
100 AMBAC Financial Group, Inc. 85 Aug 05 10,699
100 AMBAC Financial Group, Inc. 90 Aug 05 12,544
100 AMBAC Financial Group, Inc. 85 Nov 05 18,574
500 American International Group, Inc. 60 Aug 05 20,997
150 Brinker International, Inc. 40 Jul 05 7,049
100 Brinker International, Inc. 40 Oct 05 (6,801)
30 Canadian National Railway Co. 65 Jul 05 2,210
200 ConocoPhillips 65 Aug 05 1,750
150 HCA Inc. 47.50 Aug 05 (127,201)
250 HCA Inc. 50 Aug 05 (150,626)
100 HCA Inc. 60 Aug 05 4,200
100 Illinois Tool Works Inc. 105 Sep 05 (40,300)
100 Illinois Tool Works Inc. 90 Dec 05 (5,301)
100 Investors Financial Services Corp. 55 Jul 05 14,850
100 Investors Financial Services Corp. 60 Jul 05 10,700
150 Laboratory Corp. of America Holdings 55 Aug 05 11,549
200 Martin Marietta Materials, Inc. 70 Oct 05 (33,601)
200 Murphy Oil Corp. 50 Jul 05 (46,300)
200 Murphy Oil Corp. 60 Oct 05 (12,300)
150 Target Corp. 60 Oct 05 (4,800)
100 Target Corp. 60 Jan 06 5,399
100 3M Co. 90 Jul 05 9,200
200 United Technologies Corp. 55 Jul 05 10,699
200 United Technologies Corp. 55 Aug 05 7,950
200 United Technologies Corp. 57.50 Aug 05 7,470
----- ---------
4,280 (247,093)
----- ---------
COLLATERALIZED PUTS
250 Automatic Data Processing Inc. 40 Aug 05 14,249
100 Bank of America Corp. 45 Aug 05 8,199
250 Bunge Ltd. 45 Jul 05 16,749
150 Bunge Ltd. 50 Jul 05 23,549
150 Cintas Corp. 35 Nov 05 6,299
100 Exxon Mobil Corp. 55 Jul 05 6,200
100 Exxon Mobil Corp. 50 Oct 05 6,699
250 Fifth Third Bancorp 40 Aug 05 14,249
100 Fifth Third Bancorp 40 Nov 05 (2,801)
100 Gannett Co., Inc. 75 Jul 05 (26,300)
150 Gannett Co., Inc. 70 Oct 05 (16,201)
150 Investors Financial Services Corp. 37.50 Oct 05 (13,951)
200 Martin Marietta Materials, Inc. 45 Jul 05 16,772
10 Martin Marietta Materials, Inc. 50 Jul 05 970
200 Murphy Oil Co. 35 Jul 05 10,417
100 3M Co. 65 Oct 05 2,200
100 United Parcel Service, Inc. 70 Jul 05 (2,300)
100 United Parcel Service, Inc. 60 Oct 05 2,700
100 United Parcel Service, Inc. 65 Oct 05 (2,300)
----- ---------
2,660 65,399
----- ---------
$(181,694)
=========
12
CHANGES IN PORTFOLIO SECURITIES
--------------------------------------------------------------------------------
During the Three Months Ended June 30, 2005
(unaudited)
Shares
--------------------------------------
Held
Additions Reductions June 30, 2005
--------- ---------- -------------
Automatic Data Processing Inc....... 75,000 300,000
Bank of America Corp................ 50,000 550,000
Bank Atlantic Bancorp Inc........... 80,000 300,000
Bunge Ltd........................... 35,000 205,000
Clear Channel Communications Inc.... 25,000 350,000
ConocoPhillips...................... 190,000/(1)/ 380,000
Del Monte Foods Co.................. 80,000 1,115,000
Fifth Third Bancorp................. 70,000 270,000
Murphy Oil Corp..................... 144,800/(1)/ 75,500 229,600
Outback Steakhouse, Inc............. 225,000 225,000
Treehouse Foods Inc................. 100,000/(2)/ 100,000
United Parcel Service, Inc.......... 10,000 155,000
United Technologies Corp............ 150,000/(1)/ 5,000 300,000
AMBAC Financial Group, Inc.......... 85,000 295,000
Brinker International Inc........... 210,000 190,000
Canadian National Railway Co........ 68,000 67,000
Corning Inc......................... 170,000 1,000,000
Dean Foods Co....................... 6,600 500,000
Enzon Pharmaceuticals, Inc.......... 67,088 --
HCA Inc............................. 20,000 325,000
Johnson & Johnson................... 10,000 255,000
Laboratory Corp. of America Holdings 5,000 235,000
Provident Bankshares Corp........... 135,021 200,000
Ryland Group Inc.................... 20,000 --
Sun Microsystems Inc................ 315,000 95,000
--------
/(1)/ By Stock Split.
/(2)/ Received 1 share of Treehouse Foods Inc. for 5 shares of Dean Foods Co.
held.
-----------------
This report, including the financial statements herein, is transmitted to the
stockholders of The Adams Express Company for their information. It is not a
prospectus, circular or representation intended for use in the purchase or
sale of shares of the Company or of any securities mentioned in the report.
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if sold, may be worth more or less than their original
cost. Past performance is not indicative of future investment results.
13
HISTORICAL FINANCIAL STATISTICS
--------------------------------------------------------------------------------
Dividends Distributions
Net from from
Asset Net Investment Net Realized
Value of Shares Value per Income Gains
December 31 Net Assets Outstanding* Share* per Share* per Share*
----------- ---------- ------------ --------- -------------- -------------
1995......... $ 986,230,914 69,248,276 $14.24 $.35 $ .76
1996......... 1,138,760,396 72,054,792 15.80 .35 .80
1997......... 1,424,170,425 74,923,859 19.01 .29 1.01
1998......... 1,688,080,336 77,814,977 21.69 .30 1.10
1999......... 2,170,801,875 80,842,241 26.85 .26 1.37
2000......... 1,951,562,978 82,292,262 23.72 .22 1.63
2001......... 1,368,366,316 85,233,262 16.05 .26 1.39
2002......... 1,024,810,092 84,536,250 12.12 .19 .57
2003......... 1,218,862,456 84,886,412 14.36 .17 .61
2004......... 1,295,548,900 86,135,292 15.04 .24 .66
June 30, 2005 1,279,265,092 84,960,583 15.06 .14+ .01+
--------
* Prior years have been adjusted to reflect the 3-for-2 stock split effected in
October 2000.
+ Paid or declared.
14
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Board of Directors and Stockholders of
The Adams Express Company:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Adams Express Company
(hereafter referred to as the "Company") at June 30, 2005, and the results of
its operations, the changes in its net assets and the financial highlights for
each of the fiscal periods presented, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 2005, by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
July 13, 2005
15
OTHER INFORMATION
--------------------------------------------------------------------------------
Statement on Quarterly Filing of Complete Portfolio Schedule
In addition to publishing its complete schedule of portfolio holdings in the
First and Third Quarter Reports to shareholders, the Company files its complete
schedule of portfolio holdings with the Securities and Exchange Commission for
the first and third quarters of each fiscal year on Form N-Q. The Company's
Forms N-Q are available on the Commission's website at www.sec.gov. The
Company's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room, and information on the operation of the Public Reference Room
may be obtained by calling 1-800-SEC-0330. The Company also posts its Forms N-Q
on its website at www.adamsexpress.com under the heading "Financial Reports".
Proxy Voting Policies and Record
A description of the policies and procedures that the Company uses to determine
how to vote proxies relating to portfolio securities owned by the Company and
information as to how the Company voted proxies relating to portfolio
securities during the 12 month period ended June 30, 2005 are available (i)
without charge, upon request, by calling the Company's toll free number at
(800) 638-2479; (ii) on the Company's website by clicking on "Corporate
Information" heading on the website; and (iii) on the Securities and Exchange
Commission's website at http//www.sec.gov.
Privacy Policy
In order to conduct its business, The Adams Express Company collects and
maintains certain nonpublic personal information about our stockholders of
record with respect to their transactions in shares of our securities. This
information includes the stockholder's address, tax identification or Social
Security number, share balances, and dividend elections. We do not collect or
maintain personal information about stockholders whose shares of our securities
are held in "street name" by a financial institution such as a bank or broker.
We do not disclose any nonpublic personal information about you, our other
stockholders or our former stockholders to third parties unless necessary to
process a transaction, service an account or as otherwise permitted by law.
To protect your personal information internally, we restrict access to
nonpublic personal information about our stockholders to those employees who
need to know that information to provide services to our stockholders. We also
maintain certain other safeguards to protect your nonpublic personal
information.
-----------------
Common Stock
Listed on the New York Stock Exchange
and the Pacific Exchange
The Adams Express Company
Seven St. Paul Street, Suite 1140, Baltimore, MD 21202
(410) 752-5900 or (800) 638-2479
Website: www.adamsexpress.com
E-mail: contact@adamsexpress.com
Counsel: Chadbourne & Parke L.L.P.
Independent Registered Public Accounting Firm: PricewaterhouseCoopers LLP
Transfer Agent & Registrar: American Stock Transfer & Trust Co.
Custodian of Securities: Brown Brothers Harriman & Co.
16
ANNUAL MEETING OF STOCKHOLDERS
--------------------------------------------------------------------------------
The Annual Meeting of Stockholders was held on April 27, 2005. For those
nominated, the following votes were cast for directors:
votes for votes withheld
- ---------- --------------
(A) Enrique R. Arzac: 71,167,716 1,391,281
(B) Phyllis O. Bonanno: 70,885,091 1,673,906
(C) Daniel E. Emerson: 70,654,340 1,904,657
(D) Thomas H. Lenagh: 70,394,630 2,164,367
(E) W.D. MacCallan: 70,805,684 1,753,313
(F) Kathleen T. McGahran: 71,041,299 1,517,698
(G) Douglas G. Ober: 71,093,555 1,465,442
(H) John J. Roberts: 70,676,777 1,882,220
(I) Susan C. Schwab: 71,042,734 1,516,263
(J) Robert J.M. Wilson: 70,650,502 1,908,495
A proposal to approve and ratify the selection of PricewaterhouseCoopers LLP as
the independent registered public accounting firm for the Company for 2005 was
approved with 71,392,716 votes for, 617,879 votes against, and 548,402 shares
abstaining.
A proposal to approve The Adams Express Company 2005 Equity Incentive
Compensation Plan was approved with 36,347,317 votes for, 7,978,412 votes
against, 2,199,191 shares abstaining, and 26,034,078 shares unvoted.
17
SHAREHOLDER INFORMATION AND SERVICES
--------------------------------------------------------------------------------
DIVIDEND PAYMENT SCHEDULE
The Corporation presently pays dividends four times a year, as follows: (a)
three interim distributions on or about March 1, June 1, and September 1 and
(b) a "year-end" distribution, payable in late December, consisting of the
estimated balance of the net investment income for the year and the net
realized capital gain earned through October 31. Stockholders may elect to
receive the year-end distribution in stock or cash. In connection with this
distribution, all stockholders of record are sent a dividend announcement
notice and an election card in mid-November.
Stockholders holding shares in "street" or brokerage accounts may make their
election by notifying their brokerage house representative.
INVESTORS CHOICE
INVESTORS CHOICE is a direct stock purchase and sale plan, as well as a
dividend reinvestment plan, sponsored and administered by our transfer agent,
American Stock Transfer & Trust Company (AST). The plan provides registered
stockholders and interested first time investors an affordable alternative for
buying, selling, and reinvesting in Adams Express shares.
The costs to participants in administrative service fees and brokerage
commissions for each type of transaction are listed below.
Initial Enrollment and
Optional Cash Investments
Service Fee $2.50 per investment
Brokerage Commission $0.05 per share
Reinvestment of Dividends*
Service Fee 2% of amount invested
(maximum of $2.50 per investment)
Brokerage Commission $0.05 per share
Sale of Shares
Service Fee $10.00
Brokerage Commission $0.05 per share
Deposit of Certificates for safekeeping $7.50..
Book to Book Transfers Included
To transfer shares to another participant or to a new participant
Fees are subject to change at any time.
Minimum and Maximum Cash Investments
Initial minimum investment (non-holders) $500.00
Minimum optional investment
(existing holders) $50.00
Electronic Funds Transfer
(monthly minimum) $50.00
Maximum per transaction $25,000.00
Maximum per year NONE
A brochure which further details the benefits and features of INVESTORS CHOICE
as well as an enrollment form may be obtained by contacting AST.
For Non-Registered Shareholders
For shareholders whose stock is held by a broker in "street" name, the AST
INVESTORS CHOICE Direct Stock Purchase and Sale Plan remains available through
many registered investment security dealers. If your shares are currently held
in a "street" name or brokerage account, please contact your broker for details
about how you can participate in AST's Plan or contact AST.
----------
The Company
The Adams Express Company
Lawrence L. Hooper, Jr.
Vice President, General Counsel and Secretary
Seven St. Paul Street, Suite 1140, Baltimore, MD 21202
(800) 638-2479
Website: www.adamsexpress.com
E-mail: contact@adamsexpress.com
The Transfer Agent
American Stock Transfer & Trust Company
Address Shareholder Inquiries to:
Shareholder Relations Department
59 Maiden Lane
New York, NY 10038
(877) 260-8188
Website: www.amstock.com
E-mail: info@amstock.com
Investors Choice Mailing Address:
Attention: Dividend Reinvestment
P.O. Box 922
Wall Street Station
New York, NY 10269
Website: www.InvestPower.com
E-mail: info@InvestPower.com
*The year-end dividend and capital gain distribution will usually be made in
newly issued shares of common stock. There are no fees or commissions in
connection with this dividend and capital gain distribution when made in newly
issued shares.
18
Item 2: Code(s) of Ethics for senior financial officers -
Item not applicable to semi-annual report.
Item 3: Audit Committee Financial Expert - Item not
applicable to semi-annual report.
Item 4: Principal Accountant Fees and Services - Item not
applicable to semi-annual report.
Item 5: Audit Committee of Listed Registrants - Item not
applicable to semi-annual report.
Item 6: Schedule of Investments - This schedule is included
as part of the report to shareholders filed under Item 1 of
this form.
Item 7: Disclosure of Proxy Voting Policies and Procedures
for Closed-End Management Investment Companies - Item not
applicable to semi-annual report.
Item 8: Portfolio Managers of Closed-End Management
Investment Companies - Item not applicable to semi-annual
report.
Item 9: Purchases of Equity Securities by Closed-End
Management Investment Company and Affiliated Purchasers.
Maximum
Total Number (or
Number of Approximate
Shares (or Dollar Value)
Total Units) of Shares (or
Number Purchased Units) that
of Average as Part of May Yet Be
Shares Price Publicly Purchased
(or Paid per Announced Under the
Units) Share (or Plans or Plans or
Period(2) Purchased Unit) Programs Programs
-------- --------- --------- --------- ---------
Jan. 2005 330,800 $ 12.91 330,800 3,782,453
Feb. 2005 266,100 $ 13.04 266,100 3,516,353
Mar. 2005 195,800 $ 12.93 195,800 3,320,553
Apr. 2005 14,300 $ 12.79 14,300 3,306,253
May 2005 156,700 $ 12.81 156,700 3,149,553
June 2005 231,700 $ 13.05 231,700 2,917,853
-------- --------- --------- --------- ---------
Total 1,195,400(1) $ 12.96 1,195,400(2) 2,917,853(2)
(1) There were no shares purchased other than through a
publicly announced plan or program.
(2.a) The Plan was announced on December 9, 2004.
(2.b) The share amount approved was 5% of outstanding
shares, or approximately 4,172,453 shares.
(2.c) The Plan will expire on or about December 8, 2005.
(2.d) None.
(2.e) None.
Item 10: Submission of Matters to a Vote of Security Holders
- There were no material changes to the procedures by which
shareholders may recommend nominees to the registrant's
board of directors made or implemented after the registrant
last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
Item 11: Controls and Procedures.
(a) The registrant's Principal Executive Officer and
Principal Financial Officer have evaluated the registrant's
disclosure controls and procedures within 90 days of this
filing and have concluded that the registrant's disclosure
controls and procedures were effective, as of that date, in
ensuring that information required to be disclosed by the
registrant in this Form N-CSR was recorded, processed,
summarized, and reported timely.
(b) Internal Controls. Effective April 25, 2005,
the Company changed custodian from The Bank of New York to
Brown Brothers Harriman & Co. There were no significant
changes in the registrant's internal controls or in other
factors that could significantly affect these controls
subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Item 12: Exhibits attached hereto. (Attach certifications
as exhibits)
(1) Not required at this time.
(2) Separate certifications by the registrant's principal
executive officer and principal financial officer, pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 and
required by Rule 30a-2 under the Investment Company Act of
1940, are attached.
A certification by the registrant's principal executive
officer and principal financial officer, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, is attached.
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.
THE ADAMS EXPRESS COMPANY
BY: /s/ Douglas G. Ober
-----------------------
Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: July 28, 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: /s/ Douglas G. Ober
-----------------------
Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: July 28, 2005
BY: /s/ Maureen A. Jones
-----------------------
Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: July 28, 2005