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, 2004
Date of reporting period: September 30, 2004
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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September 30, 2004
(unaudited)
Prin. Amt.
or Shares Value (A)
- ---------- ------------
Stocks and Convertible Securities -- 95.3%
Consumer -- 14.2%
Consumer Discretionary -- 7.1%
BJ's Wholesale Club, Inc. (B)(C) 500,000 $ 13,670,000
Brinker International Inc. (B)(C) 400,000 12,460,000
Clear Channel Communications
Inc. 205,000 6,389,850
Gannett Co., Inc. 87,500 7,329,000
Mattel, Inc. (C) 575,000 10,424,750
Newell Rubbermaid Inc. 515,000 10,320,600
Ryland Group Inc. 65,000 6,022,900
Target Corp. 460,000 20,815,000
------------
87,432,100
------------
Consumer Staples -- 7.1%
Coca-Cola Co. 200,000 8,010,000
Dean Foods Co. (B) 506,600 15,208,132
Hershey Foods Corp. 140,000 6,539,400
PepsiCo, Inc. 440,000 21,406,000
Procter & Gamble Co. 340,000 18,400,800
Safeway, Inc. (B) 423,000 8,168,130
Unilever plc ADR (C) 300,000 9,906,000
------------
87,638,462
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Energy -- 8.4%
BP plc ADR 270,000 15,533,101
ConocoPhillips 200,000 16,570,000
Exxon Mobil Corp. 130,000 6,282,900
Petroleum & Resources
Corporation (D) 1,985,996 52,311,148
Schlumberger Ltd. (C) 190,000 12,788,900
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103,486,049
------------
Financials -- 17.0%
Banking -- 10.4%
Bank of America Corp. 440,000 19,065,200
Compass Bancshares Inc. 300,000 13,146,000
Fifth Third Bancorp 200,000 9,844,000
Investors Financial Services
Corp. (C) 430,000 19,405,900
Provident Bankshares Corp. (C) 335,021 11,239,983
Wachovia Corp. 370,000 17,371,500
Wells Fargo & Co. 400,000 23,852,000
Wilmington Trust Corp. 420,000 15,208,200
------------
129,132,783
------------
Insurance -- 6.6%
AMBAC Financial Group, Inc. 390,000 31,180,500
American International Group,
Inc. 738,675 50,222,514
------------
81,403,014
------------
Prin. Amt.
or Shares Value (A)
- ---------- ------------
Health Care -- 12.8%
Abbott Laboratories 350,000 $ 14,826,000
Bristol-Myers Squibb Co. 345,000 8,166,150
Enzon Pharmaceuticals, Inc.
(B) 100,000 1,595,000
Genentech, Inc. (B)(C) 250,000 13,105,000
HCA Inc. 450,000 17,167,500
Johnson & Johnson 265,000 14,927,450
Laboratory Corp. of America
Holdings (B)(C) 300,000 13,116,000
MedImmune, Inc. (B) 225,000 5,332,500
Medtronic Inc. 310,000 16,089,000
Pfizer Inc. (C) 1,100,000 33,660,000
Wyeth Co. 325,000 12,155,000
Zimmer Holdings Inc. (B)(C) 110,000 8,694,400
------------
158,834,000
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Industrials -- 12.6%
Canadian National Railway
Co. 255,000 12,367,500
Donnelley (R.R.) & Sons Co. 355,000 11,118,600
Emerson Electric Co. 200,000 12,378,000
General Electric Co. 1,487,700 49,956,966
Illinois Tool Works Inc. 135,000 12,577,950
Parker-Hannifin Corp. 225,000 13,243,500
3M Co. 165,000 13,195,050
United Parcel Service, Inc. 80,000 6,073,600
United Technologies Corp. 265,000 24,745,700
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155,656,866
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SCHEDULE OF INVESTMENTS (CONTINUED)
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September 30, 2004
(unaudited)
Prin. Amt.
or Shares Value (A)
---------- ------------
Information Technology -- 14.2%
Communication Equipment -- 2.4%
Avaya Inc. (B) 600,000 $ 8,364,000
Corning Inc. (B) 1,170,000 12,963,600
Lucent Technologies Inc. (B)(C) 2,820,000 8,939,400
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30,267,000
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Computer Related -- 9.3%
BEA Systems Inc. (B)(C) 800,000 5,528,000
BMC Software Inc. (B)(C) 310,000 4,901,100
Cisco Systems, Inc. (B) 1,200,000 21,720,000
Dell Inc. (B) 400,000 14,240,000
DiamondCluster International
Inc. (B) 497,500 6,069,500
Microsoft Corp. 800,000 22,120,000
Oracle Corp. (B) 880,000 9,926,400
Sapient Corp. (B)(C) 1,150,000 8,774,500
Siebel Systems Inc. (B) 800,000 6,032,000
Sun Microsystems Inc. (B) 515,000 2,080,600
Symantec Corp. 3.00% Conv.
Sub. Notes due 2006 $500,000 1,610,938
Symantec Corp. (B)(C) 215,000 11,799,200
------------
114,802,238
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Electronics -- 2.5%
Cree, Inc. (B)(C) 500,000 15,265,000
Intel Corp. 310,000 6,218,600
Solectron Corp. (B)(C) 1,850,000 9,157,500
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30,641,100
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Prin. Amt.
or Shares Value (A)
- ---------- --------------
Materials -- 4.9%
Air Products and Chemicals, Inc. 250,000 $ 13,595,000
du Pont (E.I.) de Nemours and Co. 400,000 17,120,000
Rohm & Haas Co. 400,000 17,188,000
Smurfit-Stone Container
Corp. (B)(C) 650,000 12,590,500
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60,493,500
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Telecom Services -- 4.5%
Alltel Corp.(C) 350,000 19,218,500
BellSouth Corp. 315,000 8,542,800
SBC Communications Inc. 595,000 15,440,250
Vodafone Group plc
ADS (C) 492,613 11,876,899
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55,078,449
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Utilities -- 6.7%
Aqua America, Inc.(C) 900,000 19,899,000
Black Hills Corp. (C) 245,000 6,806,100
CINergy Corp. (C) 300,000 11,880,000
Duke Energy Corp. (C) 611,560 13,998,608
Keyspan Corp. 400,000 15,680,000
MDU Resources Group, Inc.(C) 575,000 15,139,750
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83,403,458
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Total Stocks and Convertible Securities
(Cost $913,240,742) (E) $1,178,269,019
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SCHEDULE OF INVESTMENTS (CONTINUED)
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September 30, 2004
(unaudited)
Prin. Amt. Value (A)
----------- -----------
Short-Term Investments -- 4.1%
U.S. Government Obligations -- 2.0%
U.S. Treasury Bills,
1.38%, due 11/18/04 $24,900,000 $24,844,611
-----------
Commercial Paper -- 2.1%
American General Finance
Corp., 1.69 - 1.75%,
due 10/12/04-10/21/04 5,770,000 5,765,724
ChevronTexaco Funding Corp.,
1.72%, due 10/14/04 5,300,000 5,296,708
General Electric Capital Corp.,
1.53%, due 10/5/04 2,900,000 2,899,507
General Electric Capital
Services, Corp.,
1.58%, due 10/7/04 3,000,000 2,999,210
Toyota Motor Credit Corp.,
1.72 - 1.74%,
due 10/19/04-10/26/04 8,515,000 8,506,346
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25,467,495
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Total Short-Term Investments
(Cost $50,312,106) $50,312,106
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Value (A)
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Securities Lending Collateral -- 6.1%
Money Market Fund
BNY Institutional Cash Reserves Fund,
1.79%, due 10/1/04 $ 75,405,097
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Total Securities Lending Collateral
(Cost $75,405,097) 75,405,097
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Total Investments -- 105.5%
(Cost $1,038,957,945) 1,303,986,222
Cash, receivables and other
assets, less liabilities -- (5.5)% (67,382,577)
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Net Assets -- 100.0% $1,236,603,645
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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, except
restricted securities.
(B) Presently non-dividend paying.
(C) Some or all of these securities are on loan. See note 7 to financial
statements.
(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 September 30, 2004
covering open call option contracts written was $19,513,350. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$19,497,500.
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2004
(unaudited)
Contracts
(100 Contract
shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
--------- -------- ------ ---------- --------------
COVERED CALLS
150 AMBAC Financial Group, Inc. $ 80 Nov 04 $(19,951)
150 AMBAC Financial Group, Inc. 80 Jan 05 (34,951)
250 American International Group, Inc. 80 Feb 05 19,399
200 Brinker International Inc. 40 Jan 05 17,299
100 ConocoPhillips 80 Jan 05 (36,300)
100 Genentech, Inc. 60 Dec 04 200
100 Illinois Tool Works Inc. 100 Dec 04 1,700
100 Illinois Tool Works Inc. 105 Mar 05 (3,400)
150 Investors Financial Services Corp. 47.50 Oct 04 3,450
150 Investors Financial Services Corp. 50 Oct 04 9,300
150 Investors Financial Services Corp. 50 Jan 05 1,799
100 Laboratory Corp. of America Holdings 45 Jan 05 (5,675)
200 Parker-Hannifin Corp. 65 Feb 05 (4,351)
200 Procter & Gamble Co. 60 Oct 04 8,700
100 Ryland Group Inc. 105 Jan 05 (2,801)
100 Symantec Corp. 55 Oct 04 (2,400)
100 Symantec Corp. 55 Jan 05 (26,300)
150 Symantec Corp. 65 Apr 05 (10,331)
150 3M Co. 90 Jan 05 9,149
100 United Technologies Corp. 100 Nov 04 5,200
100 United Technologies Corp. 105 Nov 04 12,100
100 United Technologies Corp. 110 Feb 05 5,700
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3,000 (52,464)
----- --------
COLLATERALIZED PUTS
250 Avaya Inc. 12.50 Dec 04 17,999
200 Bank of America Corp. 35 Nov 04 9,700
60 Canadian National Railway Co. 35 Oct 04 4,070
250 du Pont (E.I.) de Nemours and Co. 37.50 Oct 04 21,749
150 Fifth Third Bancorp 45 Jan 05 300
100 Gannett Co., Inc. 75 Oct 04 7,350
250 Microsoft Corp. 22.50 Oct 04 22,999
100 Murphy Oil Corp. 50 Oct 04 7,700
175 Murphy Oil Corp. 75 Nov 04 3,034
200 Murphy Oil Corp. 60 Jan 05 13,200
175 Murphy Oil Corp. 65 Jan 05 1,252
200 Pfizer Inc. 30 Dec 04 (5,100)
250 Ryland Group Inc. 65 Oct 04 24,249
150 Ryland Group Inc. 70 Oct 04 13,800
100 Ryland Group Inc. 60 Jan 05 16,199
150 Schlumberger Ltd. 50 Jan 05 11,550
200 Target Corp. 40 Oct 04 31,125
100 Target Corp. 35 Jan 05 6,700
250 United Parcel Service, Inc. 65 Jan 05 18,749
250 Wachovia Corp. 40 Jan 05 14,499
100 Wyeth Co. 30 Oct 04 9,200
100 Wyeth Co. 35 Oct 04 12,750
150 Zimmer Holdings Inc. 60 Dec 04 15,675
100 Zimmer Holdings Inc. 65 Dec 04 14,749
100 Zimmer Holdings Inc. 60 Mar 05 11,699
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4,110 305,197
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$252,733
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(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.
7. 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, 2004, the Company had securities on loan of
$73,553,358 and held collateral of $75,405,097, consisting
of a money market fund.
Item 2. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and
procedures:
(a) As of November 11, 2004, 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 11, 2004, 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 11, 2004
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 11, 2004
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: November 11, 2004