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, 2007
Date of reporting period: March 31, 2007
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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March 31, 2007
(unaudited)
Shares Value (A)
- --------- ------------
Stocks and Convertible Securities -- 96.5%
Consumer -- 17.6%
Consumer Discretionary -- 7.0%
BJ's Wholesale Club, Inc. (B) 500,000 $ 16,915,000
Clear Channel
Communications, Inc. 175,000 6,132,000
Comcast Corp. (B) 525,000 13,623,750
Gannett Co., Inc. 112,500 6,332,625
Harley-Davidson, Inc. 120,000 7,050,000
Newell Rubbermaid Inc. 400,000 12,436,000
OSI Restaurant Partners, Inc. 315,000 12,442,500
Ryland Group Inc. (C) 135,000 5,695,650
Target Corp. 290,000 17,185,400
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97,812,925
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Consumer Staples -- 10.6%
Avon Products, Inc. 430,000 16,021,800
Bunge Ltd. 180,000 14,799,600
Coca-Cola Co. 200,000 9,600,000
Dean Foods Co. (B) 340,000 15,891,600
Del Monte Foods Co. 1,115,000 12,800,200
PepsiCo, Inc. 400,000 25,424,000
Procter & Gamble Co. 340,000 21,474,400
Safeway Inc. 390,000 14,289,600
Unilever plc ADR 550,000 16,538,500
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146,839,700
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Energy -- 12.1%
ConocoPhillips 345,000 23,580,750
ENSCO International, Inc. 209,150 11,377,760
Exxon Mobil Corp. 215,000 16,221,750
Marathon Oil Co. 120,000 11,859,600
Murphy Oil Corp. 38,500 2,055,900
Petroleum & Resources
Corporation (D) 2,186,774 75,727,984
Schlumberger Ltd. 380,000 26,258,000
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167,081,744
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Financials -- 18.7%
Banking -- 15.0%
BankAtlantic Bancorp, Inc. 880,000 9,644,800
Bank of America Corp. 610,000 31,122,200
Bank of New York Co., Inc.
(The) 375,000 15,206,250
Compass Bancshares Inc. 300,000 20,640,000
Fifth Third Bancorp (C) 280,000 10,833,200
Investors Financial Services
Corp. 382,500 22,242,375
Morgan Stanley 170,000 13,389,200
PNC Financial Services Group
Inc. 200,000 14,394,000
Prosperity Bancshares, Inc. 200,000 6,948,000
Wachovia Corp. 470,000 25,873,500
Wells Fargo & Co. 650,000 22,379,500
Wilmington Trust Corp. 363,000 15,307,710
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207,980,735
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Shares Value (A)
- --------- ------------
Insurance -- 3.7%
AMBAC Financial Group, Inc. 200,000 $ 17,278,000
American International Group,
Inc. 500,000 33,610,000
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50,888,000
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Health Care -- 12.5%
Abbott Laboratories 320,000 17,856,000
Advanced Medical Optics,
Inc. (B) 325,000 12,090,000
Bristol-Myers Squibb Co. 345,000 9,577,200
CVS/Caremark Corp. 208,750 7,126,725
Genentech, Inc. (B) 220,000 18,066,400
Johnson & Johnson 255,000 15,366,300
MedImmune, Inc. (B) 225,000 8,187,750
Medtronic, Inc. 310,000 15,208,600
Pfizer Inc. 1,120,000 28,291,200
Teva Pharmaceutical Industries
Ltd. ADR 385,000 14,410,550
Wyeth Co. 325,000 16,259,750
Zimmer Holdings, Inc. (B) 125,000 10,676,250
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173,116,725
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Industrials -- 13.0%
Cintas Corp. (C) 300,000 10,830,000
Curtiss-Wright Corp. 460,000 17,728,400
Emerson Electric Co. 400,000 17,236,000
General Electric Co. 1,487,700 52,605,072
Illinois Tool Works Inc. 250,000 12,900,000
Masco Corp. (C) 450,000 12,330,000
Oshkosh Truck Corp. 270,000 14,310,000
3M Co. 160,000 12,228,800
United Parcel Service, Inc. 155,000 10,865,500
United Technologies Corp. 300,000 19,500,000
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180,533,772
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Information Technology -- 11.0%
Communication Equipment -- 1.3%
Avaya Inc. (B) 600,000 7,086,000
Corning Inc. (B) 500,000 11,370,000
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18,456,000
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Computer Related -- 8.1%
Automatic Data Processing Inc. 300,000 14,520,000
BEA Systems, Inc. (B) 800,000 9,272,000
Cisco Systems, Inc. (B) 850,000 21,700,500
Dell Inc. (B) 585,000 13,577,850
Microsoft Corp. 1,180,000 32,886,600
Oracle Corp. (B) 1,100,000 19,943,000
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111,899,950
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Electronics -- 1.6%
Cree, Inc. (B)(C) 375,000 6,172,500
Intel Corp. 800,000 15,304,000
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21,476,500
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8
SCHEDULE OF INVESTMENTS (CONTINUED)
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March 31, 2007
(unaudited)
Shares Value (A)
- ------- --------------
Materials -- 5.2%
Air Products and Chemicals, Inc. 250,000 $ 18,472,500
du Pont (E.I.) de Nemours
and Co. 360,000 17,794,800
Florida Rock Industries Inc. 200,000 13,458,000
Martin Marietta Materials, Inc. 14,600 1,973,920
Rohm & Haas Co. 400,000 20,688,000
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72,387,220
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Telecom Services -- 2.8%
Alltel Corp. 300,000 18,600,000
AT&T Corp. 400,000 15,772,000
Windstream Corp. 310,178 4,556,515
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38,928,515
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Utilities -- 3.6%
Aqua America, Inc. 608,000 13,649,600
Duke Energy Corp. 611,560 12,408,552
MDU Resources Group, Inc. 562,500 16,166,250
Spectra Energy Corp. 305,780 8,032,840
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50,257,242
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Total Stocks and Convertible Securities
(Cost $913,530,603) (E) $1,337,659,028
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Prin. Amt. Value (A)
- ----------- --------------
Short-Term Investments -- 3.3%
U.S. Government Obligations --1.2%
U.S. Treasury Bills,
5.00%, due 5/17/07 $16,500,000 $ 16,394,583
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Time Deposit -- 0.0%
Citibank, N.A.,
4.69%, due 4/2/07 348,083
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Commercial Paper -- 2.1%
American General Finance,
Inc., 5.20 - 5.25%, due
4/3/07-4/5/07 10,800,000 10,795,392
Chevron Funding Corp.,
5.21%, due 4/19/07 5,900,000 5,884,630
General Electric Capital
Corp., 5.22 - 5.23%, due
4/5/07-4/26/07 9,500,000 9,479,802
Toyota Motor Credit Corp.,
5.22%, due 4/12/07 3,300,000 3,294,737
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29,454,561
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Total Short-Term Investments
(Cost $46,197,227) 46,197,227
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Total Securities Lending Collateral -- 2.1%
(Cost $28,643,337)
Brown Brothers Investment
Trust, 5.26%, due 4/2/07 28,643,337
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Total Investments -- 101.9%
(Cost $988,371,167) 1,412,499,592
Cash, receivables, prepaid pension cost,
prepaid expenses and other assets, less
liabilities -- (1.9)% (26,207,414)
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Net Assets -- 100% $1,386,292,178
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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)Some of the shares of this company are on loan. See note 8 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 March 31, 2007
covering open call option contracts written was $17,688,210. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$9,290,000.
9
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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March 31, 2007
(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... $ 80 Jun 07 $ 5,399
100 Bunge Ltd......................... 70 Apr 07 (116,125)
150 Bunge Ltd......................... 75 Apr 07 (95,701)
100 Bunge Ltd......................... 80 Apr 07 (21,300)
100 Bunge Ltd......................... 90 Jul 07 (15,800)
375 Comcast Corp...................... 33 Jul 07 24,874
100 Harley-Davidson, Inc.............. 80 May 07 10,499
250 Investors Financial Services Corp. 50 Apr 07 (180,126)
100 Marathon Oil Co................... 105 Apr 07 14,724
100 Martin Marietta Materials, Inc.... 130 Apr 07 (51,528)
100 Morgan Stanley.................... 75 Apr 07 (19,301)
100 Morgan Stanley.................... 80 Apr 07 (2,800)
100 Morgan Stanley.................... 85 Jul 07 (6,800)
200 Ryland Group Inc.................. 65 Jul 07 39,398
250 Safeway Inc....................... 40 Sep 07 (8,376)
100 Target Corp....................... 65 Apr 07 12,200
100 Target Corp....................... 70 Jul 07 9,950
45 3M Co............................. 85 Apr 07 5,490
100 United Technologies Corp.......... 75 May 07 12,200
100 Zimmer Holdings, Inc.............. 85 Jun 07 (19,301)
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2,770 (402,424)
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COLLATERALIZED PUTS
150 Advanced Medical Optics, Inc...... 35 Apr 07 18,298
250 ENSCO International, Inc.......... 40 Jun 07 37,998
100 Exxon Mobil Corp.................. 65 Jul 07 6,100
150 Florida Rock Industries Inc....... 40 Jun 07 8,549
250 Oshkosh Truck Corp................ 45 July 07 4,249
150 Oshkosh Truck Corp................ 50 Jul 07 (10,950)
100 PNC Financial Services Group, Inc. 72.50 May 07 (11,800)
100 PNC Financial Services Group, Inc. 70 Aug 07 (12,300)
100 Ryland Group Inc.................. 40 Apr 07 2,750
100 Ryland Group Inc.................. 42.50 Apr 07 (4,800)
35 Ryland Group Inc.................. 40 Jul 07 (6,405)
250 3M Co............................. 70 Jul 07 15,499
100 Wachovia Corp..................... 50 Apr 07 10,900
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1,835 58,088
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$(344,336)
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11
(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 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.
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 March 31, 2007 was $987,883,916 and net
unrealized appreciation aggregated $424,615,676, of which
the related gross unrealized appreciation and depreciation
were $485,201,590 and $60,585,914, 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 March 31, 2007, the Company had securities on loan of
$28,050,440 and held collateral of $28,643,337, 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, 2007, 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, 2007, 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, 2007
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, 2007
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, 2007