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, 2006
Date of reporting period: March 31, 2006
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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March 31, 2006
(unaudited)
Shares Value (A)
- --------- ------------
Stocks and Convertible Securities -- 98.1%
Consumer -- 17.0%
Consumer Discretionary -- 6.8%
BJ's Wholesale Club, Inc. (B) 500,000 $ 15,755,000
Clear Channel
Communications, Inc. 350,000 10,153,500
Comcast Corp. (B) 365,000 9,548,400
Gannett Co., Inc. 112,500 6,741,000
Newell Rubbermaid Inc. 515,000 12,972,850
Outback Steakhouse, Inc. 315,000 13,860,000
Target Corp. 410,000 21,324,100
------------
90,354,850
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Consumer Staples -- 10.2%
Avon Products, Inc. 420,000 13,091,400
Bunge Ltd. 235,000 13,091,850
Coca-Cola Co. 200,000 8,374,000
Dean Foods Co. (B) 450,000 17,473,500
Del Monte Foods Co. 1,115,000 13,223,900
PepsiCo, Inc. 440,000 25,427,600
Procter & Gamble Co. 340,000 19,590,800
Safeway Inc. 423,000 10,625,760
Unilever plc ADR 345,000 14,169,150
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135,067,960
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Energy -- 11.5%
BP plc ADR 270,000 18,613,800
ConocoPhillips 345,000 21,786,750
Exxon Mobil Corp. 130,000 7,911,800
Marathon Oil Co. 110,000 8,378,700
Murphy Oil Corp. 90,000 4,483,800
Petroleum & Resources
Corporation (C) 1,985,996 65,935,067
Schlumberger Ltd. 190,000 24,048,300
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151,158,217
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Financials -- 17.0%
Banking -- 12.7%
Bank of America Corp. 550,000 25,047,000
BankAtlantic Bancorp, Inc. 750,000 10,792,500
Compass Bancshares Inc. 300,000 15,183,000
Fifth Third Bancorp 280,000 11,020,800
Investors Financial Services
Corp. 382,500 17,927,775
Morgan Stanley 175,000 10,993,500
North Fork Bancorp, Inc. 525,000 15,135,750
Wachovia Corp. 395,000 22,139,750
Wells Fargo & Co. 325,000 20,757,750
Wilmington Trust Corp. 420,000 18,207,000
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167,204,825
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Insurance -- 4.3%
AMBAC Financial Group, Inc. 295,000 23,482,000
American International Group,
Inc. 500,000 33,045,000
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56,527,000
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Shares Value (A)
- --------- ------------
Health Care -- 13.0%
Abbott Laboratories 350,000 $ 14,864,500
Advanced Medical Optics,
Inc. (B) 300,000 13,992,000
Bristol-Myers Squibb Co. 345,000 8,490,450
Genentech, Inc. (B) 220,000 18,592,200
HCA Inc. 250,000 11,447,500
Johnson & Johnson 255,000 15,101,100
Laboratory Corp. of America
Holdings (B) 225,000 13,158,000
MedImmune, Inc. (B) 225,000 8,230,500
Medtronic, Inc. 310,000 15,732,500
Pfizer Inc. 1,120,000 27,910,400
Wyeth Co. 325,000 15,769,000
Zimmer Holdings, Inc. (B) 125,000 8,450,000
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171,738,150
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Industrials -- 13.1%
Cintas Corp. 300,000 12,786,000
Curtiss-Wright Corp. 230,000 15,226,000
Donnelley (R.R.) & Sons Co. 260,000 8,507,200
Emerson Electric Co. 200,000 16,726,000
General Electric Co. 1,487,700 51,742,206
Illinois Tool Works Inc. (D) 125,000 12,038,750
Masco Corp. 450,000 14,620,500
3M Co. 160,000 12,110,400
United Parcel Service, Inc. 155,000 12,303,900
United Technologies Corp. 300,000 17,391,000
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173,451,956
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Information Technology -- 13.3%
Communication Equipment -- 2.2%
Avaya Inc. (B) 600,000 6,780,000
Corning Inc. (B) 500,000 13,455,000
Lucent Technologies Inc. (B) 2,900,000 8,845,000
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29,080,000
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Computer Related -- 9.2%
Automatic Data Processing Inc. 300,000 13,704,000
BEA Systems, Inc. (B) 800,000 10,504,000
Cisco Systems, Inc. (B) 1,200,000 26,004,000
Dell Inc. (B) 400,000 11,904,000
Microsoft Corp. 1,180,000 32,107,800
Oracle Corp. (B) 1,356,001 18,563,654
Sapient Corp. (B) 1,150,000 8,774,500
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121,561,954
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Electronics -- 1.9%
Cree, Inc. (B)(D) 375,000 12,303,750
Intel Corp. 310,000 5,998,500
Solectron Corp. (B) 1,850,000 7,400,000
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25,702,250
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8
SCHEDULE OF INVESTMENTS (CONTINUED)
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March 31, 2006
(unaudited)
Shares Value (A)
- ------- --------------
Materials -- 5.9%
Air Products and Chemicals, Inc. 250,000 $ 16,797,500
du Pont (E.I.) de Nemours
and Co. 360,000 15,195,600
Florida Rock Industries Inc. 150,000 8,433,000
Martin Marietta Materials, Inc. 83,000 8,883,490
Rohm & Haas Co. 400,000 19,548,000
Smurfit-Stone Container
Corp. (B) 650,000 8,820,500
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77,678,090
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Telecom Services -- 2.7%
Alltel Corp. 300,000 19,425,000
AT&T Corp. 595,000 16,088,800
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35,513,800
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Utilities -- 4.6%
Aqua America, Inc. 800,000 22,256,000
Black Hills Corp. 245,000 8,330,000
Duke Energy Corp. 611,560 17,826,974
MDU Resources Group, Inc. 375,000 12,543,750
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60,956,724
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Total Stocks and Convertible Securities
(Cost $922,750,861) (E) $1,295,995,776
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Prin. Amt. Value (A)
- ----------- --------------
Short-Term Investments -- 1.8%
U.S. Government Obligations -- 1.4%
U.S. Treasury Bills, 4.40%,
due 5/18/06 $18,500,000 $ 18,393,613
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Time Deposit -- 0.0%
Citibank, N.A., 4.15%, due
4/3/06 493,011
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Commercial Paper -- 0.4%
AIG Funding Inc., 4.74%,
due 4/6/06 1,000,000 999,342
Chevron Funding Corp.,
4.71%, due 4/13/06 1,000,000 998,430
General Electric Capital
Corp., 4.72%, due 4/4/06 1,600,000 1,599,371
Toyota Motor Credit Corp.,
4.74%, due 4/11/06 1,000,000 998,683
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4,595,826
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Total Short-Term Investments
(Cost $23,482,450) 23,482,450
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Securities Lending Collateral -- 1.5%
Brown Brothers Investment
Trust, 4.67%, due 4/3/06 19,229,896
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Total Securities Lending Collateral
(Cost $19,229,896) 19,229,896
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Total Investments -- 101.4%
(Cost $965,463,207) 1,338,708,122
Cash, receivables, prepaid
expenses and other assets, less
liabilities -- (1.4)% (18,197,006)
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Net Assets -- 100% $1,320,511,116
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9
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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 March 31, 2006
covering open call option contracts written was $22,374,100. In addition,
the aggregate market value of securities segregated by the Company's
custodian required to collateralize open put option contracts written was
$15,682,000.
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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March 31, 2006
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
------------------------------------------------------------------ --------------
COVERED CALLS
100 Advanced Medical Optics, Inc........ $50 Jul 06 $ (1,800)
100 Air Products and Chemicals, Inc..... 70 Sep 06 (11,801)
200 AMBAC Financial Group, Inc.......... 85 Aug 06 2,398
250 Aqua America, Inc................... 30 Jun 06 8,264
100 Avon Products, Inc.................. 35 Oct 06 (1,300)
150 Bunge Ltd........................... 65 Jul 06 18,299
100 Bunge Ltd........................... 70 Jul 06 12,725
150 ConocoPhillips...................... 75 May 06 13,799
200 Corning Inc......................... 30 Aug 06 (9,600)
100 Cree, Inc........................... 35 Apr 06 1,199
100 Cree, Inc........................... 35 Jun 06 (1,300)
150 Cree, Inc........................... 40 Sep 06 (450)
100 Emerson Electric Co................. 85 Jun 06 (12,800)
100 Emerson Electric Co................. 95 Sep 06 (38,300)
100 Genentech, Inc...................... 100 Jun 06 3,699
150 HCA Inc............................. 55 Aug 06 12,299
100 Illinois Tool Works Inc............. 100 Jun 06 (8,301)
100 Illinois Tool Works Inc............. 100 Sep 06 (28,050)
100 Illinois Tool Works Inc............. 105 Sep 06 (10,800)
150 Investors Financial Services Corp... 45 Jul 06 (56,240)
100 Investors Financial Services Corp... 50 Jul 06 (1,301)
100 Investors Financial Services Corp... 55 Oct 06 (8,175)
150 Laboratory Corp. of America Holdings 60 May 06 (9,125)
100 Laboratory Corp. of America Holdings 65 Aug 06 (3,300)
100 MedImmune, Inc...................... 42.50 Jun 06 5,199
100 Murphy Oil Corp..................... 50 Apr 06 2,200
100 Murphy Oil Corp..................... 55 Jul 06 (800)
150 Outback Steakhouse, Inc............. 50 Aug 06 6,299
250 Rohm & Haas Co...................... 55 Jul 06 17,024
250 Target Corp......................... 65 Apr 06 24,248
150 United Technologies Corp............ 65 Aug 06 8,399
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4,150 (67,392)
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COLLATERALIZED PUTS
20 Advanced Medical Optics, Inc........ 35 Apr 06 2,040
200 Advanced Medical Optics, Inc........ 40 Apr 06 30,398
170 Advanced Medical Optics, Inc........ 35 Jul 06 11,739
250 Automatic Data Processing Inc....... 42.50 Aug 06 10,499
250 Avon Products, Inc.................. 25 Jul 06 16,749
250 Bunge Ltd........................... 45 Jul 06 14,249
150 Exxon Mobil Corp.................... 52.50 Oct 06 2,549
100 Fifth Third Bancorp................. 35 May 06 8,700
100 Florida Rock Industries Inc......... 50 Jun 06 1,200
100 Florida Rock Industries Inc......... 45 Sep 06 (2,300)
100 Marathon Oil Corp................... 65 Apr 06 10,700
65 Marathon Oil Corp................... 70 May 06 (845)
100 Marathon Oil Corp................... 60 Jul 06 7,700
100 Marathon Oil Corp................... 65 Jul 06 14,199
100 Marathon Oil Corp................... 55 Oct 06 5,700
100 Morgan Stanley...................... 60 May 06 3,200
100 Morgan Stanley...................... 55 Jul 06 6,700
100 North Fork Bancorp, Inc............. 25 May 06 7,700
100 Procter & Gamble Co................. 55 Oct 06 (5,800)
100 Target Corp......................... 47.50 Apr 06 11,699
200 3M Co............................... 65 Jul 06 12,399
250 Wachovia Corp....................... 47.50 Jul 06 17,999
250 Zimmer Holdings, Inc................ 60 Jun 06 14,249
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3,255 201,423
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$134,031
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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's investment objectives as
well as the nature and risk of its investment transactions
are set forth in the Company's 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 March 31, 2006 was $964,975,956 and net
unrealized appreciation aggregated $373,732,166, of which
the related gross unrealized appreciation and depreciation
were $455,814,243 and $82,082,077 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, 2006, the Company had securities on
loan of $18,768,540 and held collateral of $19,229,896,
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 21, 2006, 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 21, 2006, 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 27, 2006
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 27, 2006
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: April 27, 2006