-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VDFgyoFveaX6ixfJh7LSBCJLBiQipaXMranbrZHP3Pj2VUQM8IEYNge8J1OS+3Z3 RIE+G6UejBW8Mx1ictEnSw== 0000002230-08-000057.txt : 20080722 0000002230-08-000057.hdr.sgml : 20080722 20080722120505 ACCESSION NUMBER: 0000002230-08-000057 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20080630 FILED AS OF DATE: 20080722 DATE AS OF CHANGE: 20080722 EFFECTIVENESS DATE: 20080722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADAMS EXPRESS CO CENTRAL INDEX KEY: 0000002230 IRS NUMBER: 134912740 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00248 FILM NUMBER: 08962915 BUSINESS ADDRESS: STREET 1: SEVEN ST PAUL ST STE 1140 CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 4107525900 MAIL ADDRESS: STREET 1: 7 ST PAUL STREET SUITE 1140 CITY: BALTIMORE STATE: MD ZIP: 21202 N-CSRS 1 adxncsrs06302008.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, 2008 Date of reporting period: June 30, 2008 Item 1: Reports to Stockholders. THE ADAMS EXPRESS COMPANY - -------------------------------------------------------------------------------- Board of Directors Enrique R. Arzac /2,4/ Roger W. Gale /1,3,5/ Phyllis O. Bonanno /1,4,5/ Thomas H. Lenagh /2,3/ Kenneth J. Dale/ 3,4/ Kathleen T. McGahran /1,4,5/ Daniel E. Emerson/ 1,3,5 / Douglas G. Ober/ 1/ Frederic A. Escherich /2,3/ Craig R. Smith /2,4/
1.Member of Executive Committee 2.Member of Audit Committee 3.Member of Compensation Committee 4.Member of Retirement Benefits Committee 5.Member of Nominating and Governance Committee Officers Douglas G. Ober Chairman and Chief Executive Officer Joseph M. Truta President David D. Weaver Executive Vice President Lawrence L. Hooper, Jr. Vice President, General Counsel and Secretary Maureen A. Jones Vice President, Chief Financial Officer and Treasurer 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 (6/30/08) $11.85 Net Asset Value (6/30/08) $13.74 Discount: 13.8%
New York Stock Exchange ticker symbol: ADX NASDAQ Mutual Fund Quotation Symbol: XADEX Newspaper stock listings are generally under the abbreviation: AdaEx ---------------- Distributions in 2008 ---------------- From Investment Income (paid or declared) $0.13 From Net Realized Gains 0.02 ----- Total $0.15 =====
---------------------- 2008 Dividend Payment Dates ---------------------- March 1, 2008 June 1, 2008 September 1, 2008 December 27, 2008* *Anticipated Generation after generation - [GRAPHIC] we grow with you. tm INVEST|PROTECT|GROW The Adams Express Company Semi-Annual Report - June 30, 2008 LETTER TO STOCKHOLDERS - -------------------------------------------------------------------------------- We submit herewith the financial statements of The Adams Express Company (the Company) for the six months ended June 30, 2008. Also provided are the report of the independent registered public accounting firm, a schedule of investments, and other financial information. Net assets of the Company at June 30, 2008 were $13.74 per share on 86,647,623 shares outstanding, compared with $15.72 per share at December 31, 2007 on 87,668,847 shares outstanding. On March 1, 2008, a distribution of $0.05 per share was paid, consisting of $0.02 from 2007 investment income, $0.01 from 2007 short-term capital gain, $0.01 from 2007 long-term capital gain, and $0.01 from 2008 investment income, all taxable in 2008. A 2008 investment income dividend of $0.05 per share was paid on June 1, 2008, and another $0.05 per share investment income dividend has been declared to shareholders of record August 12, 2008, payable September 1, 2008. Net investment income for the six months ended June 30, 2008 amounted to $11,509,546, compared with $16,387,719 for the same six month period in 2007. These earnings are equal to $0.13 and $0.19 per share in each period. Net capital gain realized on investments for the six months ended June 30, 2008 amounted to $18,996,616, or $0.22 per share. For the six months ended June 30, 2008, the total return on the net asset value (with dividends and capital gains reinvested) of the Company's shares was (11.9)%. The total return on the market value of the Company's shares for the period was (15.4)%. These compare to a (11.6)% total return for the Standard & Poor's 500 Composite Stock Index and a (11.5)% total return for the Lipper Large Cap Core Mutual Fund Average over the same time period. For the twelve months ended June 30, 2008, the Company's total return on net asset value was (13.4)% and on market value was (14.4)%. Comparable figures for the S&P 500 and the Lipper Large Cap Core Mutual Fund Average were (13.1)% and (12.3)%, respectively. Current and potential stockholders 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, on our website at www.adamsexpress.com. Also available on the website are a history of the Company, historical financial information, and other useful content. Further information regarding stockholder services is located on page 15 of this report. ----------------- By order of the Board of Directors, /s/ Douglas G. Ober, Chairman and Chief Executive Officer /s/ Joseph M. Truta Joseph M. Truta, President July 10, 2008 STATEMENT OF ASSETS AND LIABILITIES - -------------------------------------------------------------------------------- June 30, 2008 Assets Investments* at value: Common stocks and convertible securities (cost $862,257,962) $1,014,805,608 Non-controlled affiliate, Petroleum & Resources Corporation (cost $34,735,404) 95,321,479 Short-term investments (cost $75,619,755) 75,619,755 Securities lending collateral (cost $106,477,312) 106,477,312 $1,292,224,154 - ------------------------------------------------------------------------------------------------- Cash 374,536 Receivables: Investment securities sold 959,765 Dividends and interest 1,526,235 Prepaid pension cost 3,173,760 Prepaid expenses and other assets 2,229,074 - ---------------------------------------------------------------------------------------------------------------- Total Assets 1,300,487,524 - ---------------------------------------------------------------------------------------------------------------- Liabilities Open written option contracts at value (proceeds $454,707) 220,400 Obligations to return securities lending collateral 106,477,312 Accrued expenses 3,368,931 - ---------------------------------------------------------------------------------------------------------------- Total Liabilities 110,066,643 - ---------------------------------------------------------------------------------------------------------------- Net Assets $1,190,420,881 - ---------------------------------------------------------------------------------------------------------------- Net Assets Common Stock at par value $0.001 per share, authorized 150,000,000 shares; issued and outstanding 86,647,623 shares (includes 106,486 restricted shares, 7,500 restricted stock units, and 6,333 deferred stock units) (Note 6) $ 86,648 Additional capital surplus 952,601,143 Accumulated other comprehensive income (Note 5) (1,549,593) Undistributed net investment income 7,581,579 Undistributed net realized gain on investments 18,333,076 Unrealized appreciation on investments 213,368,028 - ---------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Stock $1,190,420,881 - ---------------------------------------------------------------------------------------------------------------- Net Asset Value Per Share of Common Stock $13.74 - ----------------------------------------------------------------------------------------------------------------
* See Schedule of Investments on pages 9 and 10. The accompanying notes are an integral part of the financial statements. 2 STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- Six Months Ended June 30, 2008 Investment Income Income: Dividends: From unaffiliated issuers $ 13,033,402 From non-controlled affiliate 459,223 Interest and other income 974,768 - ---------------------------------------------------------------------------------------------------------- Total income 14,467,393 - ---------------------------------------------------------------------------------------------------------- Expenses: Investment research 1,182,504 Administration and operations 666,167 Directors' fees 181,435 Transfer agent, registrar and custodian expenses 178,099 Reports and stockholder communications 153,296 Occupancy and other office expenses 115,943 Insurance 99,492 Investment data services 96,936 Auditing and accounting services 67,383 Travel, telephone and postage 47,410 Legal services 36,626 Other 132,556 - ---------------------------------------------------------------------------------------------------------- Total expenses 2,957,847 - ---------------------------------------------------------------------------------------------------------- Net Investment Income 11,509,546 - ---------------------------------------------------------------------------------------------------------- Other Comprehensive Income (Note 5) 430,570 - ---------------------------------------------------------------------------------------------------------- Realized Gain and Change in Unrealized Appreciation on Investments Net realized gain on security transactions 18,887,277 Net realized gain distributed by regulated investment company (non-controlled affiliate) 109,339 Change in unrealized appreciation on investments (197,086,942) - ---------------------------------------------------------------------------------------------------------- Net Loss on Investments (178,090,326) - ---------------------------------------------------------------------------------------------------------- Change in Net Assets Resulting from Operations $(166,150,210) - ----------------------------------------------------------------------------------------------------------
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, 2008 December 31, 2007 ---------------- ----------------- From Operations: Net investment income $ 11,509,546 $ 25,884,799 Net realized gain on investments 18,996,616 60,426,376 Change in unrealized appreciation on investments (197,086,942) (8,301,286) Other comprehensive income (Note 5) 430,570 (156,058) - ---------------------------------------------------------------------------------------------- Change in net assets resulting from operations (166,150,210) 77,853,831 - ---------------------------------------------------------------------------------------------- Distributions to Stockholders from: Net investment income (6,961,677) (27,409,018) Net realized gain from investment transactions (1,749,608) (60,607,292) - ---------------------------------------------------------------------------------------------- Decrease in net assets from distributions (8,711,285) (88,016,310) - ---------------------------------------------------------------------------------------------- From Capital Share Transactions: Value of shares issued in payment of distributions 2,787 33,223,573 Cost of shares purchased (Note 4) (13,498,454) (22,516,525) Deferred compensation (Notes 4,6) 298,516 516,648 - ---------------------------------------------------------------------------------------------- Change in net assets from capital share transactions (13,197,151) 11,223,696 - ---------------------------------------------------------------------------------------------- Total Change in Net Assets (188,058,646) 1,061,217 Net Assets: Beginning of period 1,378,479,527 1,377,418,310 - ---------------------------------------------------------------------------------------------- End of period (including undistributed net investment income of $7,581,579 and $3,033,710, respectively) $1,190,420,881 $1,378,479,527 - ----------------------------------------------------------------------------------------------
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 is an internally-managed fund whose investment objectives are preservation of capital, the attainment of reasonable income from investments, and an opportunity for capital appreciation. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates made by Company management. Management believes that estimates and security valuations are appropriate; however, actual results may differ from those estimates, and the security valuations reflected in the financial statements may differ from the value the Company ultimately realizes upon sale of the securities. 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 stockholders are recognized on the ex-dividend date, and interest income is recognized on the accrual basis. 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 which approximates fair value. Purchased and written options are valued at the last quoted asked price. The Company adopted Financial Accounting Standard Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective January 1, 2008. There was no impact on the fair value of assets individually or in aggregate upon adoption. In accordance with FAS 157, fair value is defined as the price that the Company would receive upon selling an investment in an orderly transaction to an independent buyer. FAS 157 established a three-tier hierarchy to establish classification of fair value measurements, summarized as follows: . Level 1 -- fair value is determined based on market data obtained from independent sources; for example, quoted prices in active markets for identical investments, . Level 2 -- fair value is determined using other assumptions obtained from independent sources; for example, quoted prices for similar investments, . Level 3 -- fair value is determined using the Company's own assumptions, developed based on the best information available in the circumstances. The Company's investments at June 30, 2008 are classified as follows:
Investment in securities Written options -------------- --------------- Level 1 $1,110,127,087 $220,400 Level 2 182,097,067* -- Level 3 -- -- ---------------------------------------- Total $1,292,224,154 $ 220,400
- -------------------------------------------------------------------------------- *Comprised of short-term investments and securities lending collateral. 2. Federal Income Taxes The Company's policy is to distribute all of its taxable income to its stockholders 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, 2008 was $1,078,603,181 and net unrealized appreciation aggregated $213,620,973, of which the related gross unrealized appreciation and depreciation were $361,956,158 and $148,335,185, 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. Any income tax-related interest or penalties would be classified as income tax expense. 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, 2008 were $108,005,817 and $103,510,389, respectively. Options may be written (sold) or purchased by the Company. When the Company writes an option, an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from unexercised put/call options are treated as realized gains from investments, premiums received from exercised put options reduces the cost basis of the securities purchased, and premiums received from exercised call options are added to the proceeds from the sale of the underlying security in determining whether there is a realized gain or loss. The Company as writer of an option bears the risks of possible illiquidity of the option markets and the unfavorable change in the price of the security underlying the written option. The risk is limited to the premium originally paid for the option. A schedule of outstanding option contracts as of June 30, 2008 can be found on page 12. Transactions in written covered call and collateralized put options during the six months ended June 30, 2008 were as follows:
Covered Calls Collateralized Puts ------------------- ------------------- Contracts Premiums Contracts Premiums --------- --------- --------- --------- Options outstanding, December 31, 2007 1,757 $ 197,788 1,726 $ 194,530 Options written 4,700 574,828 3,400 431,681 Options terminated in closing purchase transactions (200) (26,300) -- -- Options expired (2,814) (339,129) (2,900) (362,288) Options exercised (743) (92,390) (1,076) (124,013) ---------------------------------------------------------------- Options outstanding, June 30, 2008 2,700 $ 314,797 1,150 $ 139,910 ----------------------------------------------------------------
4. Capital Stock The Company has 10,000,000 authorized and unissued preferred shares, $0.001 par value. On December 27, 2007, the Company issued 2,381,872 shares of its Common Stock at a price of $13.945 per share (the average market price on December 10, 2007) to stockholders of record on 5 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- November 21, 2007 who elected to take stock in payment of the year-end distribution from 2007 capital gain and investment income. In addition, 597 shares were issued at a weighted average price of $14.00 per share as dividend equivalents to holders of deferred stock units and restricted stock units under the 2005 Equity Incentive Compensation Plan. During 2008, the Company has issued 392 shares of its Common Stock at a weighted average price of $12.97 per share as dividend equivalents to holders of deferred stock units and restricted stock units under the 2005 Equity Incentive Compensation Plan. 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 2008 and 2007 were as follows:
Shares Amount ----------------------- -------------------------- Six months Six months ended Year ended ended Year ended June 30, December 31, June 30, December 31, 2008 2007 2008 2007 ---------- ------------ ------------ ------------ Shares issued in payment of distributions 392 2,382,469 $ 2,787 $ 33,223,573 Shares purchased (at a weighted average discount from net asset value of 13.1% and 13.2%, respectively) (1,063,308) (1,585,773) (13,498,454) (22,516,525) Net activity under the Equity- Based Compensation Plans 41,692 33,928 298,516 516,648 -------------------------------------------------------------------------- Net change (1,021,224) 830,624 $(13,197,151) $ 11,223,696 --------------------------------------------------------------------------
5. Retirement Plans The Company's non-contributory qualified defined benefit pension plan ("qualified plan") covers all employees with at least one year of service. In addition, the Company has a non-contributory nonqualified defined benefit plan which provides eligible employees with retirement benefits to supplement the qualified plan. Benefits are based on length of service and compensation during the last five years of employment. The funded status of the plans is recognized as an asset (overfunded plan) or a liability (underfunded plan) in the Statement of Assets and Liabilities. Changes in the prior service costs and accumulated actuarial gains and losses are recognized as accumulated other comprehensive income, a component of net assets, in the year in which the changes occur. 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, 2008, the Company did not contribute to the plans. The Company does not anticipate making any contribution to the overfunded qualified plan in 2008. The following table aggregates the components of the plans' net periodic pension cost:
Six months ended Year ended June 30, December 31, 2008 2007 ---------- ------------ Service cost $ 168,823 $ 487,315 Interest cost 224,561 568,495 Expected return on plan assets (345,871) (855,553) Amortization of prior service cost 47,930 94,508 Amortization of net loss 59,449 162,625 ----------------------------------------------------------- Net periodic pension cost $ 154,892 $ 457,390 -----------------------------------------------------------
The Company also sponsors a defined contribution plan that covers substantially all employees. For the six months ended June 30, 2008, the Company expensed contributions of $84,817. The Company does not provide postretirement medical benefits. 6. Equity-Based Compensation Although the Stock Option Plan of 1985 ("1985 Plan") has been discontinued and no further grants will be made under this plan, unexercised grants of stock options and stock appreciation rights granted in 2004 and prior years remain outstanding. The exercise price of the unexercised options and related stock appreciation rights is the fair market value on date of grant, reduced by the per share amount of capital gains paid by the Company during subsequent years. All options and related stock appreciation rights terminate 10 years from date of grant, if not exercised. A summary of option activity under the 1985 Plan as of June 30, 2008, and changes during the six month period then ended, is presented below:
Weighted- Weighted- Average Average Exercise Remaining Options Price Life (Years) ------- --------- ------------ Outstanding at December 31, 2007 146,804 $11.63 3.47 Exercised (9,246) 8.63 -- ----------------------------------------------------------------- Outstanding at June 30, 2008 137,558 $11.82 3.16 ----------------------------------------------------------------- Exercisable at June 30, 2008 89,258 $11.59 2.93 -----------------------------------------------------------------
The options outstanding as of June 30, 2008 are set forth below:
Weighted Weighted Average Average Options Exercise Remaining Exercise Price Outstanding Price Life (Years) -------------- ----------- -------- ------------ $7.00-$9.24 18,222 $ 7.67 4.50 $9.25-$11.49 68,188 10.12 3.61 $11.50-$13.74 -- -- -- $13.75-$16.00 51,148 15.56 2.09 --------------------------------------------------------------- Outstanding at June 30, 2008 137,558 $11.82 3.16 ---------------------------------------------------------------
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/(credit) recognized for the six months ended June 30, 2008 was $(161,490). 6 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- The 2005 Equity Incentive Compensation Plan ("2005 Plan"), adopted at the 2005 Annual Meeting, 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, including both performance and nonperformance-based restricted stock. Performance-based restricted stock awards vest at the end of a specified three year period, with the ultimate number of shares earned contingent on achievement of certain performance targets. If performance targets are not achieved, all or a portion of the performance-based awards are forfeited and become available for future grants. Nonperformance-based restricted stock awards vest ratably over a three year period and nonperformance-based restricted stock units (granted to non-employee directors) vest over a one year period. It is the current intention that employee grants will be performance-based. The 2005 Plan provides for accelerated vesting in the event of death or retirement. Non- employee directors also may elect to defer a portion of their cash compensation, with such deferred amount to be paid by delivery of deferred stock units. Outstanding awards are granted at fair market value on grant date. The number of shares of Common Stock which remains available for future grants under the 2005 Plan at June 30, 2008 is 3,258,668 shares. A summary of the status of the Company's awards granted under the 2005 Plan as of June 30, 2008, and changes during the six month period then ended, is presented below:
Weighted Average Shares/ Grant-Date Awards Units Fair Value ------ ------- ---------- Balance at December 31, 2007 87,471 $13.29 Granted: Restricted stock 34,438 13.14 Restricted stock units 7,500 12.49 Deferred stock units 1,026 13.26 Vested (10,116) 13.46 Forfeited -- -- --------------------------------------------------------------- Balance at June 30, 2008 (includes 103,354 performance-based awards and 16,965 nonperformance-based awards) 120,319 $13.18 ---------------------------------------------------------------
Compensation costs resulting from awards granted under the 2005 Plan are based on the fair value of the award on grant date (determined by the average of the high and low price on grant date) and recognized on a straight-line basis over the requisite service period. For those awards with performance conditions, compensation costs are based on the most probable outcome and, if such goals are not met, compensation cost is not recognized and any previously recognized compensation cost is reversed. The total compensation costs for restricted stock granted to employees for the period ending June 30, 2008 were $247,205. The total compensation costs for restricted stock units granted to non- employee directors for the period ended June 30, 2008 were $53,968. As of June 30, 2008, there were total unrecognized compensation costs of $731,029, a component of additional capital surplus, related to nonvested equity-based compensation arrangements granted under the 2005 Plan. Those costs are expected to be recognized over a weighted average period of 1.79 years. The total fair value of shares vested during the six month period ended June 30, 2008 was $106,363. 7. Officer and Director Compensation The aggregate remuneration paid during the six months ended June 30, 2008 to officers and directors amounted to $1,665,343, of which $167,281 was paid as fees and compensation to directors who were not officers. These amounts represent the taxable income to the Company's officers and directors and therefore differ from the amounts reported in the accompanying Statement of Operations that are recorded and expensed in accordance with generally accepted accounting principles. 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. The market value of the loaned securities is calculated based upon the most recent closing prices and any additional required collateral is delivered to the Company on the next business day. 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, 2008, the Company had securities on loan of $102,136,348 and held collateral of $106,477,312, consisting of an investment trust fund which may invest in money market instruments, commercial paper, repurchase agreements, U.S. Treasury Bills, and U.S. agency obligations. ----------------- 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. 7 FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
------------------------ Six Months Ended Year Ended December 31 ---------------------- ------------------------------------------------------ June 30, June 30, 2008 2007 2007 2006 2005 2004 2003 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Per Share Operating Performance Net asset value, beginning of period $15.72 $15.86 $15.86 $14.71 $15.04 $14.36 $12.12 - --------------------------------------------------------------------------------------------------------------------- Net investment income 0.13 0.19 0.30* 0.23 0.22 0.23** 0.19 Net realized gains and increase (decrease) in unrealized appreciation (2.03) 1.09 0.61 1.86 0.32 1.39 2.85 Change in accumulated other comprehensive income (note 5) 0.00 0.00 0.00 (0.02) -- -- -- - --------------------------------------------------------------------------------------------------------------------- Total from investment operations (1.90) 1.28 0.91 2.07 0.54 1.62 3.04 - --------------------------------------------------------------------------------------------------------------------- Less distributions Dividends from net investment income (0.08) (0.09) (0.32) (0.23) (0.22) (0.24) (0.17) Distributions from net realized gains (0.02) (0.01) (0.71) (0.67) (0.64) (0.66) (0.61) - --------------------------------------------------------------------------------------------------------------------- Total distributions (0.10) (0.10) (1.03) (0.90) (0.86) (0.90) (0.78) - --------------------------------------------------------------------------------------------------------------------- Capital share repurchases 0.02 0.02 0.04 0.04 0.05 0.02 0.04 Reinvestment of distributions 0.00 0.00 (0.06) (0.06) (0.06) (0.06) (0.06) - --------------------------------------------------------------------------------------------------------------------- Total capital share transactions 0.02 0.02 0.02 (0.02) (0.01) (0.04) (0.02) - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $13.74 $17.06 $15.72 $15.86 $14.71 $15.04 $14.36 - --------------------------------------------------------------------------------------------------------------------- Market price, end of period $11.85 $14.89 $14.12 $13.87 $12.55 $13.12 $12.41 Total Investment Return Based on market price (15.4)% 8.1% 9.4% 17.9% 2.2% 13.2% 25.2% Based on net asset value (11.9)% 8.3% 6.5% 15.0% 4.5% 12.1% 26.3% Ratios/Supplemental Data Net assets, end of period (in 000's) $1,190,421 $1,465,250 $1,378,480 $1,377,418 $1,266,729 $1,295,549 $1,218,862 Ratio of expenses to average net assets 0.46%+ 0.46%+ 0.44% 0.50% 0.45% 0.43% 0.47% Ratio of net investment income to average net assets 1.79%+ 2.31%+ 1.82% 1.50% 1.44% 1.54% 1.45% Portfolio turnover 17.15%+ 13.11%+ 10.46% 10.87% 12.96% 13.43% 12.74% Number of shares outstanding at end of period (in 000's) 86,648 85,893 87,669 86,838 86,100 86,135 84,886 ------------------------
- -------- *In 2007 the Company received $5,100,000, or $0.06 per share, in a special cash dividend from Dean Foods Co., of which $2,295,000, or $0.03 per share, was considered a taxable dividend. **In 2004 the Company 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, 2008 Shares Value (A) - - --------- ------------- Stocks and Convertible Securities -- 93.3% Consumer -- 17.2% Consumer Discretionary -- 4.6% Comcast Corp. 525,000 $ 9,959,250 Harley-Davidson, Inc. 130,000 4,713,800 Lowe's Companies, Inc. (B) 600,000 12,450,000 Newell Rubbermaid Inc. 400,000 6,716,000 Ryland Group Inc. (B) 343,500 7,491,735 Target Corp. 290,000 13,482,100 ------------- 54,812,885 ------------- Consumer Staples -- 12.6% Avon Products, Inc. 402,400 14,494,448 Bunge Ltd. (B) 100,000 10,769,000 Coca-Cola Co. 200,000 10,396,000 CVS/Caremark Corp. 250,000 9,892,500 Dean Foods Co. 340,000 6,670,800 Del Monte Foods Co. 1,300,000 9,230,000 Hansen Natural Corp. (B) (C) 375,000 10,807,500 PepsiCo, Inc. 360,000 22,892,400 Procter & Gamble Co. 340,000 20,675,400 Safeway Inc. 390,000 11,134,500 Unilever plc ADR 800,000 22,728,000 ------------- 149,690,548 ------------- Energy -- 18.2% Chevron Corp. 150,000 14,869,500 ConocoPhillips 295,000 27,845,050 Exxon Mobil Corp. 215,000 18,947,950 Halliburton Co. 300,000 15,921,000 Petroleum & Resources Corporation (D) 2,186,774 95,321,479 Schlumberger Ltd. 380,000 40,823,400 Transocean Inc. (C) 20,000 3,047,800 ------------- 216,776,179 ------------- Financials -- 11.4% Banking -- 9.3% Bank of America Corp. 730,000 17,425,100 Bank of New York Mellon Corp. 403,775 15,274,808 Morgan Stanley (B) 200,000 7,214,000 PNC Financial Services Group, Inc. (The) (B) 200,000 11,420,000 Prosperity Bancshares, Inc. 250,000 6,682,500 State Street Corp. 260,000 16,637,400 Visa Inc. (C) 20,000 1,626,200 Wachovia Corp. (B) 570,000 8,852,100 Wells Fargo & Co. 665,000 15,793,750 Wilmington Trust Corp. (B) 363,000 9,597,720 ------------- 110,523,578 ------------- Shares Value (A) - - --------- ------------- Insurance -- 2.1% American International Group, Inc. (B) 500,000 $ 13,230,000 Prudential Financial, Inc. 190,000 11,350,600 ------------- 24,580,600 ------------- Health Care -- 11.7% Abbott Laboratories 320,000 16,950,400 Bristol-Myers Squibb Co. 345,000 7,082,850 Genentech, Inc. (C) 220,000 16,698,000 Johnson & Johnson 255,000 16,406,700 Medtronic, Inc. 310,000 16,042,500 Pfizer Inc. 1,120,000 19,566,400 Senomyx, Inc. (B) (C) 984,400 4,853,092 Teva Pharmaceutical Industries Ltd. ADR 370,000 16,946,000 Wyeth Co. 325,000 15,587,000 Zimmer Holdings, Inc. (C) 140,000 9,527,000 ------------- 139,659,942 ------------- Industrials -- 12.7% Cintas Corp. 300,000 7,953,000 Curtiss-Wright Corp. (B) 360,000 16,106,400 Emerson Electric Co. 300,000 14,835,000 General Electric Co. 1,388,000 37,045,720 Illinois Tool Works Inc. 250,000 11,877,500 Masco Corp. 450,000 7,078,500 Oshkosh Corp. (B) 305,000 6,310,450 3M Co. 160,000 11,134,400 Spirit AeroSystems Holdings, Inc. (C) 550,000 10,549,000 Tata Motors Ltd. ADR 1,000,000 10,050,000 United Technologies Corp. 300,000 18,510,000 ------------- 151,449,970 ------------- Information Technology -- 11.5% Communication Equipment -- 0.9% Corning Inc. 500,000 11,525,000 ------------- Computer Related -- 8.5% Automatic Data Processing Inc. 300,000 12,570,000 Cisco Systems, Inc. (C) 850,000 19,771,000 Dell Inc. (C) 585,000 12,799,800 Microsoft Corp. 1,180,000 32,461,800 Oracle Corp. (C) 1,100,000 23,100,000 ------------- 100,702,600 ------------- Electronics -- 2.1% Broadcom Corp. (C) 400,000 10,916,000 Intel Corp. 640,000 13,747,200 ------------- 24,663,200 ------------- 9 SCHEDULE OF INVESTMENTS (CONTINUED) - -------------------------------------------------------------------------------- June 30, 2008
Shares/ Prin. Amt Value (A) - - ------------ -------------- Materials -- 5.1% Air Products and Chemicals, Inc. 230,000 $ 22,737,800 du Pont (E.I.) de Nemours and Co. 360,000 15,440,400 Lubrizol Corp 220,000 10,192,600 Rohm & Haas Co. (B) 260,700 12,106,908 -------------- 60,477,708 -------------- Telecom Services -- 1.5% AT&T Corp. 400,000 13,476,000 Windstream Corp. 310,178 3,827,597 -------------- 17,303,597 -------------- Utilities -- 4.0% Duke Energy Corp. 611,560 10,628,913 MDU Resources Group, Inc. 562,500 19,608,750 Northeast Utilities 350,000 8,935,500 Spectra Energy Corp. 305,780 8,788,117 -------------- 47,961,280 -------------- Total Stocks and Convertible Securities (Cost $896,993,366) (E) 1,110,127,087 -------------- Short-Term Investments -- 6.4% U.S. Government Obligations -- 1.7% U.S. Treasury Bills, 1.71%, due 8/14/08 $ 20,000,000 19,958,200 -------------- Time Deposit -- 0.0% Bank of America, 1.60%, due 7/1/08 205,269 -------------- Commercial Paper -- 4.7% American Express Credit Corp., 2.00 - 2.37%, due 7/8/08 - 7/24/08 $11,400,000 11,388,713 American General Finance Corp., 2.47 - 2.68%, due 7/3/08 - 7/22/08 $8,800,000 8,795,513
Prin. Amt. Value (A) - - ----------- -------------- Chevron Funding Corp., 2.07%, due 7/1/08 $ 7,000,000 $ 7,000,000 General Electric Capital Corp., 2.00 - 2.28%, due 7/15/08 - 8/14/08 5,700,000 5,693,960 Prudential Funding, LLC, 1.98 - 2.15%, due 7/8/08 - 7/29/08 15,000,000 14,985,285 Toyota Motor Credit Corp., 2.09 - 2.12%, due 7/10/08 - 7/22/08 7,600,000 7,592,815 -------------- 55,456,286 -------------- Total Short-Term Investments (Cost $75,619,755) 75,619,755 -------------- Total Securities Lending Collateral -- 8.9% (Cost $106,477,312) Brown Brothers Investment Trust, 2.70%, due 7/1/08 106,477,312 -------------- Total Investments -- 108.6% (Cost $1,079,090,433) 1,292,224,154 Cash, receivables, prepaid pension cost, prepaid expenses and other assets, less liabilities -- (8.6)% (101,803,273) -------------- Net Assets -- 100% $1,190,420,881 ==============
- -------------------------------------------------------------------------------- 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)Some of the shares of this company are on loan. See note 8 to financial statements. (C)Presently non-dividend paying. (D)Non-controlled affiliate, a closed-end sector fund, registered as an investment company under the Investment Company Act of 1940. (E)The aggregate market value of stocks held in escrow at June 30, 2008 covering open call option contracts written was $14,050,250. In addition, the aggregate market value of securities segregated by the Company's custodian required to collateralize open put option contracts written was $6,075,000. 10 PORTFOLIO SUMMARY - -------------------------------------------------------------------------------- June 30, 2008 (unaudited) Ten Largest Portfolio Holdings
Market Value % of Net Assets - ------------ --------------- Petroleum & Resources Corporation* $ 95,321,479 8.0 Schlumberger Ltd. 40,823,400 3.4 General Electric Co. 37,045,720 3.1 Microsoft Corp. 32,461,800 2.7 ConocoPhillips 27,845,050 2.4 Oracle Corp. 23,100,000 2.0 PepsiCo, Inc. 22,892,400 1.9 Air Products and Chemicals, Inc. 22,737,800 1.9 Unilever plc ADR 22,728,000 1.9 Procter & Gamble Co. 20,675,400 1.7 ------------ ---- Total $345,631,049 29.0% ----------------------------------------------------------------
*Non-controlled affiliate Sector Weightings [CHART] Sector Weightings Consumer 17.2 Energy 18.2 Financials 11.4 Health Care 11.7 Industrials 12.7 Information Technology 11.5 Materials 5.1 Telecom Services 1.5 Utilities 4.0 Short-Term Investments 6.4 11 SCHEDULE OF OUTSTANDING OPTION CONTRACTS - -------------------------------------------------------------------------------- June 30, 2008
Contracts Contract (100 shares Strike Expiration Appreciation/ each) Security Price Date (Depreciation) - --------------------------------------------------------------------------------- COVERED CALLS 200 Air Products and Chemicals, Inc.... $ 115 Sep 08 $ 400 150 American International Group, Inc.. 39 Aug 08 13,050 200 American International Group, Inc.. 60 Aug 08 21,100 150 Avon Products, Inc................. 45 Jul 08 15,675 100 Bunge Ltd.......................... 160 Jul 08 10,255 200 du Pont (E.I.) de Nemours and Co... 55 Oct 08 27,400 100 Genentech, Inc..................... 100 Sep 08 10,200 250 PepsiCo, Inc....................... 75 Jul 08 31,124 150 Prudential Financial, Inc.......... 105 Sep 08 11,550 250 Ryland Group Inc................... 50 Jul 08 23,220 200 Ryland Group Inc................... 50 Oct 08 27,399 150 State Street Corp.................. 105 Aug 08 17,550 200 Target Corp........................ 65 Jul 08 26,999 200 Target Corp........................ 67.50 Jul 08 21,200 200 Visa Inc........................... 105 Sep 08 (2,974) ----- -------- 2,700 254,148 ----- -------- COLLATERALIZED PUTS 250 Hansen Natural Corp................ 22.50 Sep 08 (9,890) 150 Procter & Gamble Co................ 57.50 Jul 08 10,050 100 Prudential Financial, Inc.......... 65 Jul 08 (54,300) 250 Spirit AeroSystems Holdings, Inc... 20 Jul 08 499 200 State Street Corp.................. 50 Aug 08 10,400 200 Transocean Inc..................... 125 Jul 08 23,400 ----- -------- 1,150 (19,841) ----- -------- $234,307 ========
----------------- Common Stock Listed on the New York Stock 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. 12 CHANGES IN PORTFOLIO SECURITIES - -------------------------------------------------------------------------------- During the Three Months Ended June 30, 2008 (unaudited)
Shares ---------------------------------- Held Additions Reductions June 30, 2008 --------- ---------- ------------- Chevron Corp...................... 150,000 150,000 Halliburton Co.................... 300,000 300,000 Hansen Natural Corp............... 375,000 375,000 Oshkosh Corp...................... 10,000 305,000 Prudential Financial, Inc......... 20,000 190,000 Schlumberger Ltd.................. 140,000 140,000 380,000 Spirit AeroSystems Holdings, Inc.. 25,000 550,000 Tata Motors Ltd. ADR.............. 250,000 1,000,000 Unilever plc ADR.................. 250,000 800,000 Aqua America, Inc................. 499,000 -- BJ's Wholesale Club, Inc.......... 400,000 -- Emerson Electric Co............... 100,000 300,000 ENSCO International, Inc.......... 209,150 -- Fifth Third Bancorp............... 280,000 -- Gannett Co., Inc.................. 112,500 -- Marathon Oil Co................... 240,000 -- Rohm & Haas Co.................... 39,300 260,700 United Parcel Service, Inc........ 155,000 --
HISTORICAL FINANCIAL STATISTICS - -------------------------------------------------------------------------------- (unaudited)
Dividends Distributions Total From From Net Dividends Net Asset Market Investment Realized and Annual Value Of Shares Value Per Value Income Gains Distributions Rate of Dec. 31 Net Assets Outstanding* Share* Per Share* Per Share* Per Share* Per Share* Distribution** - ------- ---------- ------------ --------- ---------- ---------- ------------- ------------- -------------- 1998 $1,688,080,336 77,814,977 $21.69 $17.75 $.30 $1.10 $1.40 8.17% 1999 2,170,801,875 80,842,241 26.85 22.38 .26 1.37 1.63 8.53 2000 1,951,562,978 82,292,262 23.72 21.00 .22 1.63 1.85 7.76 2001 1,368,366,316 85,233,262 16.05 14.22 .26 1.39 1.65 9.44 2002 1,024,810,092 84,536,250 12.12 10.57 .19 .57 .76 6.14 2003 1,218,862,456 84,886,412 14.36 12.41 .17 .61 .78 6.80 2004 1,295,548,900 86,135,292 15.04 13.12 .24 .66 .90 7.05 2005 1,266,728,652 86,099,607 14.71 12.55 .22 .64 .86 6.65 2006 1,377,418,310 86,838,223 15.86 13.87 .23 .67 .90 6.80 2007 1,378,479,527 87,668,847 15.72 14.12 .32 .71 1.03 7.15 June 30, 2008 1,190,420,881 86,647,623 13.74 11.85 .13+ .02+ .15+ --
- -------- *Adjusted to reflect the 3-for-2 stock split effected in October 2000. **The annual rate of distribution is the total dividends and capital gain distributions during the year divided by the average daily market price of the Company's Common Stock. + Paid or declared. 13 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 (the "Company") at June 30, 2008, the results of its operations, the changes in its net assets and the financial highlights for each of the 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, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland July 14, 2008 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 stockholders, 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 (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, 2008 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, through its transfer agent, currently American Stock Transfer & Trust 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. 14 STOCKHOLDER INFORMATION AND SERVICES - -------------------------------------------------------------------------------- DIVIDEND PAYMENT SCHEDULE The Company 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 Stockholders For stockholders 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 Stockholder Inquiries to: Stockholder 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 10269-0560 Website: www.amstock.com E-mail: info@amstock.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. 15 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. 2008 159,576 $ 12.64 159,576 4,108,860 Feb. 2008 174,918 $ 12.75 174,918 3,933,942 Mar. 2008 240,814 $ 12.44 240,814 3,693,128 Apr. 2008 239,900 $ 12.89 239,900 3,453,228 May 2008 108,100 $ 13.12 108,100 3,345,128 June 2008 140,000 $ 12.47 140,000 3,205,128 - -------- --------- --------- --------- --------- Total 1,063,308(1) $ 12.69 1,063,308(2) 3,205,128(2) (1) There were no shares purchased other than through a publicly announced plan or program. (2.a) The Plan was reapproved on December 13, 2007. (2.b) The share amount approved in 2007 was 5% of outstanding shares, or approximately 4,268,436 shares. (2.c) Unless reapproved, the Plan will expire on or about December 11, 2008. (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 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a- 101)), or this Item. Item 11. Controls and Procedures. Conclusions of principal officers concerning controls and procedures. (a) As of July 22, 2008, an evaluation was performed under the supervision and with the participation of the officers of registrant, including the principal executive officer (PEO) and principal financial officer (PFO), of the effectiveness of registrant's disclosure controls and procedures. Based on that evaluation, the registrant's officers, including the PEO and PFO, concluded that, as of July 22, 2008, the registrant's disclosure controls and procedures were reasonably designed so as to ensure that material information relating to the registrant is made known to the PEO and PFO. (b) There have been no significant changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits attached hereto. (Attach certifications as exhibits) (1) Not applicable. See registrant's response to Item 2, above. (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 22, 2008 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 22, 2008 BY: /s/ Maureen A. Jones ----------------------- Maureen A. Jones Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) Date: July 22, 2008 EX-99.CERT 2 adx302ceo.txt CERTIFICATIONS -------------- I, Douglas G. Ober, certify that: 1. I have reviewed this report on Form N-CSR of The Adams Express Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 22, 2008 /s/ Douglas G. Ober ---------------------- Douglas G. Ober Chief Executive Officer (Principal Executive Officer) EX-99.CERT 3 adx302cfo.txt CERTIFICATIONS -------------- I, Maureen A. Jones, certify that: 1. I have reviewed this report on Form N-CSR of The Adams Express Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 22, 2008 /s/ Maureen A. Jones ---------------------- Maureen A. Jones Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) EX-99.906 CERT 4 adx906.txt Certification of Principal Executive Officer In connection with the Certified Shareholder Report of The Adams Express Company (the Company) on Form N-CSR for the period ended June 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Douglas G. Ober, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: July 22, 2008 /s/ Douglas G. Ober ---------------------- Douglas G. Ober Chief Executive Officer (Principal Executive Officer) A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form with the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. Certification of Principal Financial Officer In connection with the Certified Shareholder Report of The Adams Express Company (the Company) on Form N-CSR for the period ended June 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Maureen A. Jones, Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: July 22, 2008 /s/ Maureen A. Jones ----------------------- Maureen A. Jones Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form with the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----