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: September 30, 2007
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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September 30, 2007
(unaudited)
Shares Value (A)
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Stocks and Convertible Securities -- 94.1%
Consumer -- 16.1%
Consumer Discretionary -- 6.1%
BJ's Wholesale Club, Inc. (B)(C) 415,000 $ 13,761,400
Comcast Corp. (B) 525,000 12,694,500
Gannett Co., Inc. 112,500 4,916,250
Harley-Davidson, Inc. 120,000 5,545,200
Lowe's Companies, Inc. 575,000 16,111,500
Newell Rubbermaid Inc. 400,000 11,528,000
Ryland Group Inc. 343,500 7,361,205
Target Corp. 290,000 18,435,300
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90,353,355
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Consumer Staples -- 10.0%
Avon Products, Inc. (C) 418,400 15,702,552
Bunge Ltd. 133,000 14,290,850
Coca-Cola Co. 200,000 11,494,000
Dean Foods Co. 340,000 8,697,200
Del Monte Foods Co. 1,300,000 13,650,000
PepsiCo, Inc. 400,000 29,304,000
Procter & Gamble Co. 340,000 23,915,600
Safeway Inc. 390,000 12,912,900
Unilever plc ADR 550,000 17,418,500
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147,385,602
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Energy -- 13.9%
ConocoPhillips 345,000 30,280,650
ENSCO International, Inc. 209,150 11,733,315
Exxon Mobil Corp. 215,000 19,900,400
Marathon Oil Co. 240,000 13,684,800
Murphy Oil Corp. 38,500 2,690,765
Petroleum & Resources
Corporation (D) 2,186,774 88,214,463
Schlumberger Ltd. 380,000 39,900,000
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206,404,393
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Financials -- 15.8%
Banking -- 12.7%
BankAtlantic Bancorp, Inc. 880,000 7,629,600
Bank of America Corp. 710,000 35,691,700
Bank of New York Mellon Corp. 403,775 17,822,629
Fifth Third Bancorp 280,000 9,486,400
Morgan Stanley 180,000 11,340,000
PNC Financial Services Group
Inc. 200,000 13,620,000
Prosperity Bancshares, Inc. 200,000 6,632,000
State Street Corp. 323,895 22,076,683
Wachovia Corp. 520,000 26,078,000
Wells Fargo & Co. 650,000 23,153,000
Wilmington Trust Corp. 363,000 14,120,700
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187,650,712
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Shares Value (A)
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Insurance -- 3.1%
AMBAC Financial Group,
Inc. (C) 200,000 $ 12,582,000
American International Group,
Inc. 500,000 33,825,000
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46,407,000
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Health Care -- 11.7%
Abbott Laboratories 320,000 17,158,400
Advanced Medical Optics,
Inc. (B)(C) 325,000 9,941,750
Bristol-Myers Squibb Co. 345,000 9,942,900
CVS/Caremark Corp. 208,750 8,272,763
Genentech, Inc. (B) 220,000 17,164,400
Johnson & Johnson 255,000 16,753,500
Medtronic, Inc. 310,000 17,487,100
Pfizer Inc. 1,120,000 27,361,600
Senomyx, Inc. (B)(C) 560,000 6,860,000
Teva Pharmaceutical Industries
Ltd. ADR 385,000 17,120,950
Wyeth Co. 325,000 14,478,750
Zimmer Holdings, Inc. (B) 125,000 10,123,750
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172,665,863
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Industrials -- 14.6%
Cintas Corp. 300,000 11,130,000
Curtiss-Wright Corp. 360,000 17,100,000
Emerson Electric Co. 400,000 21,288,000
General Electric Co. 1,421,000 58,829,400
Illinois Tool Works Inc. 250,000 14,910,000
Masco Corp. (C) 450,000 10,426,500
Oshkosh Truck Corp. 270,000 16,731,900
3M Co. 160,000 14,972,800
Spirit AeroSystems Holdings,
Inc. (B) 400,000 15,576,000
United Parcel Service, Inc. 155,000 11,640,500
United Technologies Corp. 300,000 24,144,000
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216,749,100
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Information Technology -- 11.8%
Communication Equipment -- 0.8%
Corning Inc. 500,000 12,325,000
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Computer Related -- 8.6%
Automatic Data Processing Inc. 300,000 13,779,000
BEA Systems, Inc. (B) 800,000 11,096,000
Cisco Systems, Inc. (B) 850,000 28,143,500
Dell Inc. (B) 585,000 16,146,000
Microsoft Corp. 1,180,000 34,762,800
Oracle Corp. (B) 1,100,000 23,815,000
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127,742,300
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Electronics -- 2.4%
Broadcom Corp. (B) 400,000 14,576,000
Intel Corp. 800,000 20,688,000
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35,264,000
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9
SCHEDULE OF INVESTMENTS (CONTINUED)
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September 30, 2007
(unaudited)
Shares/
Prin. Amt Value (A)
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Materials -- 5.1%
Air Products and Chemicals,
Inc. 230,000 $ 22,484,800
du Pont (E.I.) de Nemours
and Co. 360,000 17,841,600
Lubrizol Corp 200,000 13,012,000
Rohm & Haas Co. 400,000 22,268,000
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75,606,400
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Telecom Services -- 1.6%
Alltel Corp. 40,000 2,787,200
AT&T Corp. 400,000 16,924,000
Windstream Corp. 310,178 4,379,713
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24,090,913
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Utilities -- 3.5%
Aqua America, Inc. (C) 499,000 11,317,320
Duke Energy Corp. 611,560 11,430,056
MDU Resources Group, Inc. 562,500 15,660,000
Northeast Utilities 180,000 5,142,600
Spectra Energy Corp. 305,780 7,485,494
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51,035,470
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Total Stocks and Convertible Securities
(Cost $916,483,131) (E) 1,393,680,108
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Short-Term Investments -- 5.5%
U.S. Government Obligations -- 1.1%
U.S. Treasury Bills,
4.65%, due 11/15/07 $16,500,000 16,404,094
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Time Deposit -- 0.0%
Citibank, N.A.,
4.37%, due 10/1/07 297,327
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Commercial Paper -- 4.4%
American Express Credit
Corp., 4.78%, due 11/1/07 $10,300,000 10,257,604
Prin. Amt. Value (A)
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American General Finance,
Inc., 5.03 - 5.25%,
due 10/18/07-10/23/07 $12,400,000 $ 12,364,976
Chevron Funding Corp.,
5.22%, due 10/2/07 5,800,000 5,799,159
General Electric Capital
Corp., 4.68 - 5.23%,
due 10/4/07-10/9/07 10,400,000 10,392,120
General Electric Capital
Services Corp.,
4.77%, due 10/30/07 2,100,000 2,091,931
Prudential Funding, LLC,
4.69 - 5.23%,
due 10/11/07-10/25/07 10,000,000 9,974,090
Toyota Motor Credit Corp.,
5.21 - 5.25%,
due 10/2/07-10/16/07 11,100,000 11,080,055
United Parcel Service of
America, Inc.,
4.40%, due 10/30/07 3,200,000 3,188,658
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65,148,593
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Total Short-Term Investments
(Cost $81,850,014) 81,850,014
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Total Securities Lending Collateral -- 4.7%
(Cost $70,070,900)
Brown Brothers Investment
Trust, 5.24%, due 10/1/07 70,070,900
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Total Investments -- 104.3%
(Cost $1,068,404,045) 1,545,601,022
Cash, receivables, prepaid pension cost,
prepaid expenses and other assets, less
liabilities -- (4.3)% (64,455,942)
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Net Assets -- 100% $1,481,145,080
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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 September 30, 2007
covering open call option contracts written was $11,479,730. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$10,575,000.
10
PORTFOLIO SUMMARY
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September 30, 2007
(unaudited)
Ten Largest Portfolio Holdings
Market Value % of Net Assets
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Petroleum & Resources Corporation* $ 88,214,463 6.0
General Electric Co. 58,829,400 4.0
Schlumberger Ltd. 39,900,000 2.7
Bank of America Corp. 35,691,700 2.4
Microsoft Corp. 34,762,800 2.3
American International Group, Inc. 33,825,000 2.3
ConocoPhillips 30,280,650 2.0
PepsiCo, Inc. 29,304,000 2.0
Cisco Systems, Inc. 28,143,500 1.9
Pfizer Inc. 27,361,600 1.8
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Total $406,313,113 27.4%
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* Non-controlled affiliate
Sector Weightings
[CHART]
Consumer 16.1%
Energy 13.9%
Financials 15.8%
Health Care 11.7%
Industrials 14.6%
Information Technology 11.8%
Materials 5.1%
Telecom Services 1.6%
Utilities 3.5%
Short-Term Investments 5.5%
11
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2007
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
250 AMBAC Financial Group, Inc....... $ 90 Feb 08 $ 17,299
200 Avon Products, Inc............... 45 Oct 07 22,399
250 BJ's Wholesale Club, Inc......... 45 Dec 07 16,750
100 Bunge Ltd........................ 95 Oct 07 (117,200)
100 Bunge Ltd........................ 100 Oct 07 (77,300)
240 Marathon Oil Co.................. 62.50 Oct 07 5,640
200 Rohm & Hass Co................... 55 Oct 07 (8,075)
250 Ryland Group Inc................. 47.50 Oct 07 23,000
200 Target Corp...................... 70 Oct 07 23,800
150 Target Corp...................... 80 Jan 08 7,999
100 3M Corp.......................... 100 Jan 08 (1,300)
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2,040 (86,988)
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COLLATERALIZED PUTS
200 AMBAC Financial Group, Inc....... 50 Jan 08 (14,601)
200 Exxon Mobil Corp................. 65 Jan 08 16,399
100 Harley-Davidson, Inc............. 52.50 Nov 07 (55,300)
250 Lowe's Companies, Inc............ 30 Oct 07 (28,875)
200 Lubrizol Corp.................... 55 Dec 07 9,399
200 Lubrizol Corp.................... 60 Dec 07 (11,600)
200 Morgan Stanley................... 60 Oct 07 6,399
100 Procter & Gamble Co.............. 60 Oct 07 10,200
150 Ryland Group Inc................. 25 Oct 07 (42,450)
250 Spirit Aerosystems Holdings, Inc. 35 Oct 07 13,355
100 State Street Corp................ 60 Oct 07 12,200
100 State Street Corp................ 55 Nov 07 7,700
100 State Street Corp................ 50 Jan 08 4,750
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2,150 (72,424)
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$(159,412)
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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 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 September 30, 2007 was $1,067,916,794 and net
unrealized appreciation aggregated $477,684,228, of which
the related gross unrealized appreciation and depreciation
were $552,972,186 and $75,287,958, 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, 2007, the Company had securities on loan of
$68,210,267 and held collateral of $70,070,900, 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 October 17, 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 October 17, 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: October 22, 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: October 22, 2007
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: October 22, 2007