UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-00248
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THE ADAMS EXPRESS COMPANY
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(Exact name of registrant as specified in charter)
7 Saint Paul Street, Suite 1140, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip code)
Lawrence L. Hooper, Jr.
The Adams Express Company
7 Saint Paul Street
Suite 1140
Baltimore, Maryland 21202
Registrant's telephone number, including area code: 410-752-5900
Date of fiscal year end: December 31, 2005
Date of reporting period: September 30, 2005
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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September 30, 2005
(unaudited)
Shares Value (A)
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Stocks and Convertible Securities -- 95.7%
Consumer -- 16.1%
Consumer Discretionary -- 6.7%
BJ's Wholesale Club,
Inc. (B) ..................... 500,000 $ 13,900,000
Clear Channel Communications
Inc. ......................... 350,000 11,511,500
Comcast Corp. (B) ............. 350,000 10,283,000
Gannett Co., Inc. ............. 97,500 6,710,925
Newell Rubbermaid Inc. ........ 515,000 11,664,750
Outback Steakhouse, Inc. ...... 300,000 10,980,000
Target Corp. .................. 410,000 21,291,300
------------
86,341,475
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Consumer Staples -- 9.4%
Bunge Ltd. .................... 205,000 10,787,100
Coca-Cola Co. ................. 200,000 8,638,000
Dean Foods Co. (B)............. 500,000 19,430,000
Del Monte Foods Co. (B) ....... 1,115,000 11,963,950
PepsiCo, Inc. ................. 440,000 24,952,400
Procter & Gamble Co. .......... 340,000 20,216,400
Safeway, Inc. ................. 423,000 10,828,800
Unilever plc ADR .............. 345,000 14,565,900
------------
121,382,550
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Energy -- 11.6%
BP plc ADR .................... 270,000 19,129,500
ConocoPhillips ................ 380,000 26,565,800
Exxon Mobil Corp. ............. 130,000 8,260,200
Murphy Oil Corp. .............. 209,600 10,452,752
Petroleum & Resources
Corporation (C) .............. 1,985,996 69,410,560
Schlumberger Ltd. ............. 190,000 16,032,200
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149,851,012
------------
Financials -- 14.7%
Banking -- 10.6%
Bank of America Corp. ......... 550,000 23,155,000
BankAtlantic Bancorp Inc. ..... 300,000 5,097,000
Compass Bancshares Inc. ....... 300,000 13,749,000
Fifth Third Bancorp ........... 270,000 9,917,100
Investors Financial Services
Corp. (D) .................... 380,000 12,502,000
North Fork Bancorporation,
Inc. ......................... 450,000 11,475,000
Provident Bankshares Corp. .... 110,000 3,825,800
Wachovia Corp. ................ 370,000 17,608,300
Wells Fargo & Co. ............. 400,000 23,428,000
Wilmington Trust Corp. ........ 420,000 15,309,000
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136,066,200
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Insurance -- 4.1%
AMBAC Financial Group,
Inc. ......................... 295,000 21,257,700
American International Group,
Inc. ......................... 500,000 30,980,000
------------
52,237,700
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Health Care -- 12.5%
Abbott Laboratories 350,000 $ 14,840,000
Bristol-Myers Squibb Co. 345,000 8,300,700
Genentech, Inc. (B) 240,000 20,210,400
HCA Inc. 310,000 14,855,200
Johnson & Johnson 255,000 16,136,400
Laboratory Corp. of America
Holdings (B) 235,000 11,446,850
MedImmune, Inc. (B) 225,000 7,571,250
Medtronic Inc. 310,000 16,622,200
Pfizer Inc. 1,120,000 27,966,400
Wyeth Co. 325,000 15,037,750
Zimmer Holdings Inc. (B) 125,000 8,611,250
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161,598,400
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Industrials -- 11.4%
Cintas Corp. 300,000 12,315,000
Curtiss-Wright Corp. 195,500 12,064,305
Donnelley (R.R.) & Sons Co. 260,000 9,638,200
Emerson Electric Co. 200,000 14,360,000
General Electric Co. 1,487,700 50,090,859
Illinois Tool Works Inc. 125,000 10,291,250
3M Co. 160,000 11,737,600
United Parcel Service, Inc. 155,000 10,715,150
United Technologies Corp. 300,000 15,552,000
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146,764,364
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Information Technology -- 13.8%
Communication Equipment -- 2.1%
Avaya Inc. (B) 600,000 6,180,000
Corning Inc. (B) 615,000 11,887,950
Lucent Technologies Inc. (B) 2,900,000 9,425,000
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27,492,950
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Computer Related -- 9.6%
Automatic Data Processing
Inc. 300,000 12,912,000
BEA Systems Inc. (B) 800,000 7,184,000
Cisco Systems, Inc. (B) 1,200,000 21,516,000
Dell Inc. (B) 400,000 13,680,000
DiamondCluster
International Inc. (B) 497,500 3,771,050
Microsoft Corp. 1,140,000 29,332,200
Oracle Corp. (B) 880,000 10,903,200
Sapient Corp. (B) 1,150,000 7,187,500
Siebel Systems Inc. 800,000 8,264,000
Symantec Corp. (B) 400,000 9,064,000
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123,813,950
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Electronics -- 2.1%
Cree, Inc. (B)(D) 500,000 12,510,000
Intel Corp. 310,000 7,641,500
Solectron Corp. (B) 1,850,000 7,233,500
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27,385,000
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9
SCHEDULE OF INVESTMENTS (CONTINUED)
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September 30, 2005
(unaudited)
Shares Value (A)
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Materials -- 4.7%
Air Products and Chemicals,
Inc. ........................... 250,000 $ 13,785,000
du Pont (E.I.) de Nemours and
Co. 360,000 14,101,200
Martin Marietta Materials, Inc. 120,000 9,415,200
Rohm & Haas Co. ................. 400,000 16,452,000
Smurfit-Stone Container
Corp. (B) ...................... 650,000 6,734,000
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60,487,400
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Telecom Services -- 4.0%
Alltel Corp. .................... 300,000 19,533,000
BellSouth Corp. ................. 200,000 5,260,000
SBC Communications Inc. ......... 595,000 14,262,150
Vodafone Group plc
ADS ............................ 492,613 12,793,160
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51,848,310
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Utilities -- 6.9%
Aqua America, Inc. .............. 900,000 34,218,000
Black Hills Corp. ............... 245,000 10,625,650
Duke Energy Corp. (D) 611,560 17,839,205
Keyspan Corp. 140,000 5,149,200
MDU Resources Group, Inc. 575,000 20,498,750
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88,330,805
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Total Stocks and Convertible Securities
(Cost $908,078,682) (E) ................... $ 1,233,600,116
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Short-Term Investments -- 3.7%
U.S. Government Obligations -- 1.4%
U.S. Treasury Bills,
3.39%, due 11/17/05 $ 17,500,000 $ 17,422,548
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Time Deposit -- 0.0%
Brown Brothers Harriman &
Co., 3.31%, due 10/3/05 18,616
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Commercial Paper -- 2.3%
American General Finance
Corp., 3.69-3.77%,
due 10/4/05-10/25/05 6,000,000 5,993,743
ChevronTexaco Funding
Corp., 3.60-3.67%,
due 10/13/05-10/18/05 8,800,000 8,787,841
General Electric Capital
Corp., 3.63-3.78%,
due 10/11/05-11/3/05 6,840,000 6,824,345
Toyota Motor Credit Corp.,
3.52-3.69%,
due 10/4/05-10/20/05 8,150,000 8,141,231
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29,747,160
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Total Short-Term Investments
(Cost $47,188,324) 47,188,324
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Securities Lending Collateral -- 2.2%
Brown Brothers Investment
Trust, 3.75%, due 10/3/05.... 28,263,605
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Total Securities Lending Collateral
(Cost $28,263,605) 28,263,605
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Total Investments -- 101.6%
(Cost $983,530,611) 1,309,052,045
Cash, receivables, prepaid
expenses and other assets, less
liabilities -- (1.6)% (20,809,203)
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Net Assets -- 100% $ 1,288,242,842
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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) Some or all of these securities are on loan. See note 8 to financial
statements.
(E) The aggregate market value of stocks held in escrow at September 30, 2005
covering open call option contracts written was $12,876,420. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$14,475,000.
10
INVESTMENTS IN AND ADVANCES TO AFFILIATES
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Name of Number of Amount of Amount of Value of
issuer and shares equity in dividends or each item
title of net profit interest at close of
issue or and loss for period
nature of the period
indebtedness
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Petroleum & 1,985,996 - 0 - (1) Credited $69,410,560
Resources to Income
Corporation - $655,379
common stock
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(2) Other
(long term
capital
gain)
$119,160
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2005
(unaudited)
Contracts
(100 Contract
shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
100 AMBAC Financial Group, Inc. ......... $ 85 Nov 05 $ 20,574
100 AMBAC Financial Group, Inc. ......... 80 Jan 06 3,199
50 Genentech, Inc. ..................... 100 Oct 05 5,350
100 Genentech, Inc. ..................... 110 Dec 05 7,700
100 Illinois Tool Works, Inc. ........... 90 Dec 05 8,699
100 Illinois Tool Works, Inc. ........... 90 Jan 06 1,700
200 Martin Marietta Materials, Inc. ..... 70 Oct 05 (143,601)
75 Martin Marietta Materials, Inc. ..... 75 Oct 05 (17,476)
170 Martin Marietta Materials, Inc. ..... 75 Jan 06 (102,511)
200 Murphy Oil Corp. .................... 60 Oct 05 7,700
100 Schlumberger Ltd. ................... 100 Jan 06 5,199
150 Target Corp. ........................ 60 Oct 05 15,149
100 Target Corp. ........................ 60 Jan 06 5,200
100 United Technologies Corp. ........... 55 Jan 06 200
100 Zimmer Holdings Inc. ................ 90 Dec 05 8,450
100 Zimmer Holdings Inc. ................ 95 Jan 06 9,700
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1,845 (164,768)
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COLLATERALIZED PUTS
250 Bank of America Corp. ............... 42.50 Jan 06 (12,626)
100 Bunge Ltd. .......................... 50 Oct 05 (300)
100 Bunge Ltd. .......................... 55 Oct 05 (16,301)
100 Bunge Ltd. .......................... 50 Jan 06 (8,801)
150 Cintas Corp. ........................ 35 Nov 05 15,299
150 Comcast Corp. ....................... 30 Jan 06 (7,951)
100 Exxon Mobil Corp. ................... 50 Oct 05 12,199
100 Exxon Mobil Corp. ................... 55 Oct 05 11,199
100 Exxon Mobil Corp. ................... 55 Jan 06 10,199
100 Fifth Third Bancorp ................. 40 Nov 05 (23,301)
150 Gannett Co., Inc. ................... 70 Oct 05 (13,951)
150 Investors Financial Services Corp. .. 37.50 Oct 05 (43,951)
100 Martin Marietta Materials, Inc. ..... 65 Jan 05 7,949
150 Outback Steakhouse, Inc. ............ 40 Oct 05 (39,451)
250 Outback Steakhouse, Inc. ............ 40 Feb 06 (78,251)
100 3M Co. .............................. 65 Oct 05 9,700
100 3M Co. .............................. 65 Jan 06 4,200
100 United Parcel Service, Inc. ......... 60 Oct 05 7,700
100 United Parcel Service, Inc. ......... 65 Oct 05 6,200
150 Zimmer Holdings Inc. ................ 65 Dec 05 (1,951)
250 Zimmer Holdings Inc. ................ 60 Jan 06 499
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2,850 (161,691)
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$ (326,459)
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12
(SELECTED) NOTES TO FINANCIAL STATEMENTS (Unaudited)
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The Adams Express Company (the Company) is registered under
the Investment Company Act of 1940 as a diversified
investment company. The Companys investment objectives as
well as the nature and risk of its investment transactions
are set forth in the Companys 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.
For federal income tax purposes, the identified cost of
securities at September 30, 2005 was $954,779,755 and net
unrealized appreciation aggregated $326,008,685, of which
the related gross unrealized appreciation and depreciation
were $439,609,769 and $113,601,084 respectively.
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 September 30, 2005, the Company had securities
on loan of $27,480,230 and held collateral of $28,263,605,
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.
Item 2. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and
procedures:
(a) As of November 15, 2005, an evaluation was performed
under the supervision and with the participation of the
officers of The Adams Express Company (the "Company"),
including the principal executive officer ("PEO") and
principal financial officer ("PFO"), of the effectiveness of
the Companys disclosure controls and procedures. Based on
that evaluation, the Company's officers, including the PEO
and PFO, concluded that, as of November 15, 2005, the
Companys disclosure controls and procedures were reasonably
designed so as to ensure: (1) that information required to
be disclosed by the Company on Form N-Q is recorded,
processed, summarized and reported within the time periods
specified by the rules and forms of the Securities and
Exchange Commission; and (2) that material information
relating to the Company is made known to the PEO and PFO as
appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no significant changes in the Company'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 Company's last
fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Company's
internal control over financial reporting.
Item 3. EXHIBITS.
The certifications of the principal executive officer and
principal financial officer pursuant to Rule 30a-2(a) under
the Investment Company Act of 1940 are attached hereto as
Form N-Q Certifications.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE ADAMS EXPRESS COMPANY
BY: /s/ Douglas G. Ober
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Douglas G. Ober
Chief Executive Officer
Date: November 15, 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
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Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: November 15, 2005
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: November 15, 2005