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, 2008
Date of reporting period: March 31, 2008
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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March 31, 2008
(unaudited)
Shares Value (A)
- --------- -------------
Stocks and Convertible Securities -- 94.9%
Consumer -- 18.0%
Consumer Discretionary -- 5.3%
Comcast Corp. 525,000 $ 10,153,500
Gannett Co., Inc. (B) 112,500 3,268,125
Harley-Davidson, Inc. 130,000 4,875,000
Lowe's Companies, Inc. 600,000 13,764,000
Newell Rubbermaid Inc. 400,000 9,148,000
Ryland Group Inc. (B) 343,500 11,297,715
Target Corp. 290,000 14,697,200
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67,203,540
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Consumer Staples -- 12.7%
Avon Products, Inc. 402,400 15,910,896
BJ's Wholesale Club, Inc. (C) 400,000 14,276,000
Bunge Ltd. 100,000 8,688,000
Coca-Cola Co. 200,000 12,174,000
CVS/Caremark Corp. 250,000 10,127,500
Dean Foods Co. 340,000 6,830,600
Del Monte Foods Co. 1,300,000 12,389,000
PepsiCo, Inc. 360,000 25,992,000
Procter & Gamble Co. 340,000 23,823,800
Safeway Inc. 390,000 11,446,500
Unilever plc ADR 550,000 18,546,000
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160,204,296
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Energy -- 14.3%
ConocoPhillips 295,000 22,481,950
ENSCO International, Inc. 209,150 13,096,973
Exxon Mobil Corp. 215,000 18,184,700
Marathon Oil Co. 240,000 10,944,000
Petroleum & Resources
Corporation (D) 2,186,774 79,664,177
Schlumberger Ltd. 380,000 33,060,000
Transocean Inc. (C) 20,000 2,704,000
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180,135,800
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Financials -- 14.4%
Banking -- 11.7%
Bank of America Corp. 730,000 27,674,300
Bank of New York Mellon Corp. 403,775 16,849,531
Fifth Third Bancorp 280,000 5,857,600
Morgan Stanley 200,000 9,140,000
PNC Financial Services Group,
Inc. (The) 200,000 13,114,000
Prosperity Bancshares, Inc. 250,000 7,165,000
State Street Corp. 260,000 20,540,000
Visa Inc. (C) 20,000 1,247,200
Wachovia Corp. (B) 570,000 15,390,000
Wells Fargo & Co. 665,000 19,351,500
Wilmington Trust Corp. 363,000 11,289,300
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147,618,431
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Shares Value (A)
- --------- -------------
Insurance -- 2.7%
American International Group,
Inc. 500,000 $ 21,625,000
Prudential Financial, Inc. 170,000 13,302,500
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34,927,500
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Health Care -- 11.5%
Abbott Laboratories 320,000 17,648,000
Bristol-Myers Squibb Co. 345,000 7,348,500
Genentech, Inc. (C) 220,000 17,859,600
Johnson & Johnson 255,000 16,541,850
Medtronic, Inc. 310,000 14,994,700
Pfizer Inc. 1,120,000 23,441,600
Senomyx, Inc. (B)(C) 984,400 5,807,960
Teva Pharmaceutical Industries
Ltd. ADR 370,000 17,090,300
Wyeth Co. 325,000 13,572,000
Zimmer Holdings, Inc. (C) 140,000 10,900,400
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145,204,910
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Industrials -- 15.4%
Cintas Corp. 300,000 8,562,000
Curtiss-Wright Corp. 360,000 14,932,800
Emerson Electric Co. 400,000 20,584,000
General Electric Co. 1,388,000 51,369,880
Illinois Tool Works Inc. 250,000 12,057,500
Masco Corp. (B) 450,000 8,923,500
Oshkosh Corp. (B) 295,000 10,702,600
3M Co. 160,000 12,664,000
Spirit AeroSystems Holdings,
Inc. (C) 525,000 11,644,500
Tata Motors Ltd. ADR 750,000 11,715,000
United Parcel Service, Inc. 155,000 11,318,100
United Technologies Corp. 300,000 20,646,000
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195,119,880
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Information Technology -- 10.6%
Communication Equipment -- 1.0%
Corning Inc. 500,000 12,020,000
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Computer Related -- 7.9%
Automatic Data Processing Inc. 300,000 12,717,000
Cisco Systems, Inc. (C) 850,000 20,476,500
Dell Inc. (C) 585,000 11,653,200
Microsoft Corp. 1,180,000 33,488,400
Oracle Corp. (C) 1,100,000 21,516,000
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99,851,100
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Electronics -- 1.7%
Broadcom Corp. (C) 400,000 7,708,000
Intel Corp. 640,000 13,555,200
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21,263,200
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9
SCHEDULE OF INVESTMENTS (CONTINUED)
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March 31, 2008
(unaudited)
Shares/
Prin. Amt Value (A)
- ----------- --------------
Materials -- 5.3%
Air Products and Chemicals,
Inc. 230,000 $ 21,160,000
du Pont (E.I.) de Nemours
and Co. 360,000 16,833,600
Lubrizol Corp 220,000 12,212,200
Rohm & Haas Co. 300,000 16,224,000
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66,429,800
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Telecom Services -- 1.5%
AT&T Corp. 400,000 15,320,000
Windstream Corp. 310,178 3,706,627
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19,026,627
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Utilities -- 3.9%
Aqua America, Inc. (B) 499,000 9,371,220
Duke Energy Corp. 611,560 10,916,346
MDU Resources Group, Inc. 562,500 13,809,375
Northeast Utilities 350,000 8,589,000
Spectra Energy Corp. 305,780 6,956,494
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49,642,435
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Total Stocks and Convertible Securities
(Cost $907,793,071) (E) 1,198,647,519
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Short-Term Investments -- 4.9%
U.S. Government Obligations -- 1.6%
U.S. Treasury Bills,
2.18%, due 5/15/08 $20,000,000 19,946,711
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Time Deposit -- 0.0%
Wachovia Bank,
1.70%, due 4/1/08 565,897
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Commercial Paper -- 3.3%
AIG Funding, Inc.,
2.85%, due 4/22/08 $3,600,000 3,594,015
Prin. Amt. Value (A)
- ----------- --------------
Chevron Funding Corp.,
2.25%, due 4/3/08 $ 7,500,000 $ 7,499,063
General Electric Capital Corp.,
2.27-2.30%,
due 4/8/08-4/10/08 15,000,000 14,992,604
Toyota Motor Credit Corp.,
1.84-2.44%,
due 4/1/08-4/17/08 15,000,000 14,991,464
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41,077,146
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Total Short-Term Investments
(Cost $61,589,754) 61,589,754
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Total Securities Lending Collateral -- 4.4%
(Cost $55,479,892)
Brown Brothers Investment
Trust, 3.02%, due 4/1/08 55,479,892
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Total Investments -- 104.2%
(Cost $1,024,862,717) 1,315,717,165
Cash, receivables, prepaid pension cost,
prepaid expenses and other assets, less
liabilities -- (4.2)% (53,419,500)
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Net Assets -- 100% $1,262,297,665
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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)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 March 31, 2008
covering open call option contracts written was $17,931,100. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$13,112,500.
10
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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March 31, 2008
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
200 Air Products and Chemicals, Inc... $ 115 Sep 08 $ (3,600)
200 American International Group, Inc. 60 Aug 08 13,499
150 Avon Products, Inc................ 45 Jul 08 3,675
250 BJ's Wholesale Club, Inc.......... 40 Jun 08 (4,410)
200 BJ's Wholesale Club, Inc.......... 45 Sep 08 (1,700)
100 ENSCO International, Inc.......... 65 Apr 08 (5,290)
100 Genentech, Inc.................... 100 Sep 08 1,200
100 Marathon Oil Co................... 55 Apr 08 19,780
100 Marathon Oil Co................... 60 Apr 08 9,200
250 PepsiCo, Inc...................... 75 Jul 08 (17,625)
200 Rohm & Haas Co.................... 55 Apr 08 (3,600)
200 Rohm & Haas Co.................... 60 Apr 08 24,399
250 Ryland Group Inc.................. 50 Jul 08 8,220
200 Ryland Group Inc.................. 50 Oct 08 (3,600)
100 State Street Corp................. 90 Apr 08 5,700
100 State Street Corp................. 95 Apr 08 11,450
150 State Street Corp................. 105 Aug 08 (2,700)
200 Target Corp....................... 65 Jul 08 12,199
200 Target Corp....................... 67.50 Jul 08 11,200
150 Wells Fargo & Co.................. 35 Apr 08 13,049
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3,400 91,046
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COLLATERALIZED PUTS
50 Bunge Ltd......................... 75 Apr 08 (1,900)
100 Bunge Ltd......................... 80 Apr 08 (12,800)
100 Bunge Ltd......................... 65 May 08 (6,300)
100 Oshkosh Corp...................... 35 Apr 08 2,344
100 Oshkosh Corp...................... 40 Apr 08 (21,300)
150 Procter & Gamble Co.............. 57.50 Jul 08 8,550
100 Prudential Financial, Inc......... 60 Apr 08 7,700
100 Prudential Financial, Inc......... 65 Apr 08 7,700
250 Prudential Financial, Inc......... 55 Jun 08 5,499
250 Spirit AeroSystems Holdings, Inc.. 20 Jul 08 (3,250)
200 Target Corp....................... 40 Apr 08 14,374
100 Transocean Inc.................... 115 Apr 08 8,269
200 Transocean Inc.................... 120 Apr 08 19,399
100 Transocean Inc.................... 105 May 08 6,700
100 Transocean Inc.................... 115 May 08 2,700
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2,000 37,685
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$128,731
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(SELECTED) NOTES TO FINANCIAL STATEMENTS (Unaudited)
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1. Significant Accounting Policies
The Adams Express Company (the Company) is registered under
the Investment Company Act of 1940 as a diversified
investment company. The Company 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.
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 March 31, 2008 as classified as
follows:
Investment in
securities Written options
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Level 1 $1,198,647,519 $545,700
Level 2 117,069,646* --
Level 3 -- --
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Total $1,315,717,165 $545,700
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*Comprised of short-term investments and securities lending
collateral.
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 March 31, 2008, the Company had securities on loan of
$54,040,100 and held collateral of $55,479,892, 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 April 30, 2008, 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 Company's
disclosure controls and procedures. Based on that
evaluation, the Company's officers, including the PEO and
PFO, concluded that, as of April 30, 2008, the Company's
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 30 a-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 have materially affected, or are
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: April 30, 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
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Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: April 30, 2008
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: April 30, 2008