N-CSRS 1 adxncsrs06302005.txt 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 -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 7 Saint Paul Street, Suite 1140, Baltimore, Maryland 21202 -------------------------------------------------------------------------------- (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 -------------------------------------------------------------------------------- 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
-------- 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 -------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Stock $1,279,265,092 ------------------------------------------------------------------------------------------------------- Net Asset Value Per Share of Common Stock $15.06 -------------------------------------------------------------------------------------------------------
*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 -------------------------------------------------------------------------------------------------------- Total Income 11,467,392 -------------------------------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------------------------------- Total Expenses 2,765,857 -------------------------------------------------------------------------------------------------------- Net Investment Income 8,701,535 -------------------------------------------------------------------------------------------------------- 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 --------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 3 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
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) --------------------------------------------------------------------------------------------- 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 -------------------------------------------------------------------------------- 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) ----------------------------------------------------------------------- Options outstanding, June 30, 2005 4,280 $ 461,907 2,660 $ 303,149 -----------------------------------------------------------------------
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 -------------------------------------------------------------- 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 --------------------------------------------------------------------------------
------------------------ 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) --------------------------------------------------------------------------------------------------------------------- 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