1996 ANNUAL REPORT
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[Adams Express Company Logo](TM)
BUILDING FOR THE FUTURE
WITH SOLID INVESTMENTS(R)
<PAGE>
THE ADAMS EXPRESS COMPANY
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<TABLE>
<S> <C>
Board of Directors (with their principal affiliations) Officers
Enrique R. Arzac(3,4) Augustine R. Marusi(1,3) Douglas G. Ober
Professor of Finance Chairman Emeritus Chairman and
and Economics Borden Inc. Chief Executive Officer
Columbia University
W. Perry Neff(1,4) Joseph M. Truta
Leigh Carter(1,3) Retired Executive Vice President President
Retired President Chemical Bank
The BFGoodrich Co. Richard F. Koloski
Douglas G. Ober(1) Executive Vice President
Allan Comrie(2,4) Chairman of the Company
Retired President of Joan E. Sinclair
U.S. & Foreign Landon Peters(1,3) Vice President--Research
Securities Corporation Private Investor
Richard B. Tumolo
Daniel E. Emerson(1,3) John J. Roberts Vice President--Research
Retired Executive Vice President Vice Chairman, American
NYNEX Corporation International Group, Inc. Simeon F. Wooten, III
Vice President--Research
Thomas H. Lenagh(2,4) Robert J.M. Wilson(1,2)
Financial Advisor Retired President of the Company J.G. Whitney
and Petroleum & Resources Vice President and Secretary
W.D. MacCallan(2,4) Corporation
Retired Chairman of the Company Maureen A. Jones
and Petroleum & Resources Treasurer
Corporation
R.M. Carlsson
Assistant Treasurer
Geraldine H. Stegner
Assistant Secretary
</TABLE>
1. Member of Executive Committee
2. Member of Audit Committee
3. Member of Compensation Committee
4. Member of Retirement Benefits Committee
<PAGE>
THE ADAMS EXPRESS COMPANY
Seven St. Paul Street, Suite 1140
Baltimore, MD 21202
(410) 752-5900 or (800) 638-2479
ADX
Listed
NYSE
THE NEW YORK STOCK EXCHANGE
(Recycled logo) Printed on Recycled Paper
<PAGE>
1996 AT A GLANCE
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<TABLE>
<CAPTION>
The Company Stock Data
<S> <C>
(bullet) a closed-end equity investment company NYSE Symbol ADX
(bullet) objectives: preservation of capital Market Price as of 12/31/96 $19 3/4
reasonable income Discount 16.7%
opportunity for capital gain 52-Week Range $21 1/8-$17 3/4
(bullet) internally-managed Shares Outstanding 48,036,528
(bullet) low expense ratio
(bullet) low turnover
</TABLE>
Summary Financial Information Year Ended December 31
1996 1995
- --------------------------------------------------------------------------------
Net asset value per share $ 23.71 $ 21.36
Total net assets 1,138,760,396 986,230,914
Unrealized appreciation 422,449,125 309,089,749
Net investment income 24,237,044 22,394,045
Total realized gain 57,853,036 50,917,119
Total return (based on market value) 16.4% 29.5%
Total return (based on net asset value) 20.1% 29.9%
Expense ratio 0.34% 0.46%
- --------------------------------------------------------------------------------
1996 Dividends and Distributions
Amount
Paid (per share) Type
- --------------------------------------------------------------------------------
March 1, 1996 $0.03 Short-term capital gain
March 1, 1996 0.09 Investment income
June 1, 1996 0.12 Investment income
September 1, 1996 0.12 Investment income
December 27, 1996 1.06 Long-term capital gain
December 27, 1996 0.11 Short-term capital gain
December 27, 1996 0.19 Investment income
- --------------------------------------------------------------------------------
$1.72
================================================================================
1997 Annual Meeting of Stockholders
Location: Hotel Nikko, San Francisco, California
Date: March 25, 1997
Holders of Record: February 11, 1997
<PAGE>
PORTFOLIO REVIEW
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Ten Largest Portfolio Holdings (12/31/96)
Market Value % of Net Assets
------------ ---------------
Petroleum & Resources Corporation* $ 39,808,558 3.5%
General Electric Co. 34,606,250 3.0%
American International Group 19,485,000 1.7%
Duracell International Inc. 18,516,875 1.6%
Minnesota Mining & Manufacturing Co. 16,600,000 1.5%
Kimberly-Clark Corp. 16,192,500 1.4%
Solectron Corp. 16,012,500 1.4%
Elan Corp., plc ADR 15,295,000 1.4%
Campbell Soup Co. 15,247,500 1.3%
Rockwell International Corp. 15,218,750 1.3%
------------ -----
Total $206,982,933 18.1%
* Non-controlled affiliate
Sector Weightings (12/31/96)
[Graph appears here--plot points are listed below]
<PAGE>
LETTER TO STOCKHOLDERS
- --------------------------------------------------------------------------------
We are pleased to submit the financial statements of the Company for the year
ended December 31, 1996. In addition, there is a schedule of investments, a list
of principal changes in portfolio securities during the fourth quarter and the
report of the independent accountants. Certain historical financial statistics
are also listed, including a record of the Company's income dividends and
capital gain distributions for the last fifteen years.
The Year in Review
The U. S. economy grew at a moderate pace in 1996 for the second year in a row
with the strength experienced in sectors such as technology and energy largely
offset by weakness in other areas, notably paper and steel. After a relatively
slow start, the economy picked up steam in the second quarter as some
inventory buildup occurred. The third quarter was characterized by a
slowdown in consumer spending, which immediately kicked off efforts to
cut inventories through reduced production.
Consumer spending remained anemic during the summer and into the fall. Retailer
hopes for a strong holiday selling season appeared borne out in the first week
following Thanksgiving, but the final sales figures have shown only a modest
increase from the dismal holiday season of 1995. Despite solid income growth,
there has been a propensity to save rather than spend. With the consumer
responsible for approximately two thirds of economic activity, much growth is
unlikely if spending does not improve.
On the industrial side of the economy, a great many corporations have
restructured or reorganized to such an extent that their gross and operating
profit margins are substantially higher than they were earlier in this
business cycle. Therefore, profit levels have remained strong or grown
despite modest growth in revenues. Overall profit growth slowed measurably
in the third quarter of 1996, however, and probably did so again in the final
quarter though we have not seen many reports yet. This is one of our major
concerns going into 1997. There has also been an increasing amount of merger,
acquisition and spinoff activity around the world. As global competition heats
up, more and more companies are seeking partners in order to compete
effectively or are divesting non-core assets in order to devote their capital
to their principal operations.
Financial markets in the United States, after a spurt in February, were rather
volatile but directionless until July. Strategists and economists spent much
of the time debating whether or not the Federal Reserve Board would act to
raise or cut interest rates as a consequence of statistical reports on the
condition of the economy. After the report of strong growth in the second
quarter there was real concern that the Federal Reserve would raise interest
rates to put a damper on growth and the first major setback in financial markets
in some time occurred, as stocks fell by nearly 10% in early July. The
mini-correction was short-lived, however, with investors hunting for
bargains within weeks and the upward trend resuming. In December, the stock
market again fell briefly as a result of remarks made by Mr. Greenspan of the
Federal Reserve about equity valuations and of concerns about a pullback by
foreign buyers of U.S. Treasury securities. Investor demand recovered and the
market set a new record high before a final-day setback.
The performance of the portfolio of The Adams Express Company kept pace with
the market through the first nine months of the year, as investors showed
increasing interest in companies with strong balance sheets, histories of
consistent growth, and reasonable expectations for the future. By the end of
the third quarter, many of these stocks were fully valued and investors began
searching elsewhere for undervalued companies with less certain prospects.
Rather than investing in lesser-quality stocks, we chose to add to our
positions in stocks already in the portfolio which were not yet fully valued.
By the end of the calendar year, the return on net assets of The Adams Express
Company was 20.1% compared to a return of 22.8% for the Standard &Poor's 500. On
the basis of market prices, the fund's return was less, at 16.4%, due to the
widening of the discount of the market price of Adams Express stock from 13.4%
at the beginning of the year to 16.7% at year-end. Our year-end holdings of cash
and short-term investments stood at 4.7% of net assets compared to 10.9% of
assets a year ago.
Investment Results
At the end of 1996 our net assets were $1,138,760,396 or $23.71 per share on
48,036,528 shares outstanding as compared with $986,230,914 or $21.36 per
share on 46,165,517 shares outstanding a year earlier.
Net investment income for the year 1996 was $24,237,044 compared to $22,394,045
for the year 1995. These earnings are equal to $0.52 and $0.50 per share,
respectively, on the average number of shares outstanding throughout each
year.
2
<PAGE>
Net realized gains amounted to $57,853,036 during the year, while the
unrealized appreciation on investments increased from $309,089,749 at
December 31, 1995 to $422,449,125 at year end.
Dividends and Distributions
As announced on November 14, 1996, a year-end distribution consisting of
investment income of $0.19 and capital gains of $1.17 was made on December 27,
1996, both realized and taxable in 1996. On January 9, 1997 an additional
distribution of $0.12 per share was declared payable March 1, 1997, representing
the balance of undistributed net investment income and capital gains earned
during 1996 and an initial distribution from 1997 net investment income, all
taxable to shareholders in 1997.
Outlook For 1997
Economic activity in this country increased slightly in 1996 from the prior year
as a result of some monetary stimulus and slightly better exports to the rest of
the world. With the absence of either of these influences in 1997, our
expectation is that growth will fall back to around 2% and the possibility of a
recession occurring is a bit higher. As indicated previously, we do not think
corporate profits are likely to grow much in 1997, as most of the benefits of
cost-cutting and rationalization have been realized already. With only a few
exceptions such as the energy industry, capital spending is not expected to be
robust and we are hard pressed to see where much growth is going to come from.
The major economies outside of the U.S. seem to be following a similar path,
though not necessarily for the same reasons. The more rapidly growing economies,
particularly in Asia, are also showing some signs of a slowdown to a more
sustainable rate of growth, albeit a higher one than the more developed
countries.
Factors that could influence this outlook dramatically are a change in consumer
spending to more accurately reflect apparent confidence in the future and
activity on the part of the Federal Reserve Board to raise or cut interest
rates. The latest survey of consumers has indicated a high level of
confidence in the immediate future and some economists have anticipated a surge
in spending to reflect that. The markdowns taken by retailers after the holiday
season have stimulated some buying, but we believe it reflects the
bargain-hunting mentality that has prevailed for some time. Action by the Fed in
order to either restrain or stimulate the economy, while not having an immediate
effect, would certainly see a rapid response in the financial markets. The
sensitivity of the stock market to anticipated Fed action or to remarks by Mr.
Greenspan was apparent throughout 1996. Should there be evidence of higher
inflation in the economy, quick action is likely in order to bring it back to a
low level, whether the economy is growing more rapidly or not. This would have a
major negative effect on the market. On the other hand, if growth subsides
further and inflation is benign, we might expect some stimulus from the Fed and
a better market. We do not expect either of these to occur; the most optimistic
scenario would be a year of single digit returns, with a decline in the market a
more likely outcome. Whether this would take the form of a sharp correction or a
more gradual decline is not of great significance to long-term investors such as
ourselves, but our portfolio is in excellent condition to perform well in such
an environment.
The proxy statement for the Annual Meeting of Stockholders to be held in San
Francisco, California on March 25, 1997 will be mailed on or about February
13, 1997 to holders of record on February 11, 1997.
By order of the Board of Directors,
/s/ Douglas G. Ober
_________________________
Douglas G. Ober,
Chairman and Chief Executive Officer
/s/ Joseph M. Truta
_________________________
Joseph M. Truta,
President
January 17, 1997
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<S> <C>
Assets
Investments* at value:
Non-controlled affiliate, Petroleum & Resources Corporation
(cost $22,153,015) $ 39,808,558
Common stocks and convertible securities
(cost $638,789,329) 1,043,558,641
Short-term investments (cost $53,526,017) 53,526,017 $1,136,893,216
- -----------------------------------------------------------------------------------
Cash 99,486
Receivables:
Investment securities sold 496,458
Dividends and interest 2,248,998
Prepaid expenses and other assets 3,368,220
- -------------------------------------------------------------------------------------------------------
Total Assets 1,143,106,378
- -------------------------------------------------------------------------------------------------------
Liabilities
Investment securities purchased 1,931,489
Open option contracts at value (proceeds $543,020) 518,750
Accrued expenses 1,895,743
- -------------------------------------------------------------------------------------------------------
Total Liabilities 4,345,982
- -------------------------------------------------------------------------------------------------------
Net Assets $1,138,760,396
=======================================================================================================
Net Assets
Common Stock at par value $1.00 per share, authorized 75,000,000
shares; issued and outstanding 48,036,528 shares $ 48,036,528
Additional capital surplus 661,729,190
Undistributed net investment income 2,173,294
Undistributed net realized gain on investments 4,372,259
Unrealized appreciation on investments 422,449,125
- -------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Stock $1,138,760,396
=======================================================================================================
Net Asset Value Per Share of Common Stock $23.71
=======================================================================================================
</TABLE>
*See schedule of investments on pages 11 through 15.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended December 31, 1996
Investment Income
Income:
Dividends:
From unaffiliated issuers $ 17,066,585
From non-controlled affiliate 1,168,481
Interest 9,552,347
- --------------------------------------------------------------------------------
Total income 27,787,413
- --------------------------------------------------------------------------------
Expenses:
Investment research 1,191,215
Administration and operations 649,130
Directors' fees 151,500
Reports and stockholder communications 267,185
Transfer agent, registrar and custodian expenses 404,011
Auditing services 56,434
Legal services 121,200
Occupancy and other office expenses 223,931
Travel, telephone and postage 148,722
Other 337,041
- --------------------------------------------------------------------------------
Total expenses 3,550,369
- --------------------------------------------------------------------------------
Net Investment Income 24,237,044
- --------------------------------------------------------------------------------
Realized Gain and Change in Unrealized Appreciation on Investments
Net realized gain on security transactions 56,569,998
Net realized gain distributed by regulated investment company
(non-controlled affiliate) 1,283,038
Change in unrealized appreciation on investments 113,359,376
- --------------------------------------------------------------------------------
Net Gain on Investments 171,212,412
- --------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $195,449,456
================================================================================
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
-------------------------------
Dec. 31, 1996 Dec. 31, 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
From Operations:
Net investment income $ 24,237,044 $ 22,394,045
Net realized gain on investments 57,853,036 50,917,119
Change in unrealized appreciation on investments 113,359,376 155,573,255
- --------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations 195,449,456 228,884,419
- --------------------------------------------------------------------------------------------------------------------
Dividends to Stockholders From:
Net investment income (24,006,069) (23,082,795)
Net realized gain from investment transactions (55,398,620) (50,604,589)
- --------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions (79,404,689) (73,687,384)
- --------------------------------------------------------------------------------------------------------------------
From Capital Share Transactions:
Value of common shares issued in payment of optional distributions 36,484,715 32,736,279
- --------------------------------------------------------------------------------------------------------------------
Total Increase In Net Assets 152,529,482 187,933,314
Net Assets:
Beginning of year 986,230,914 798,297,600
- --------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $2,173,294 and $1,846,967, respectively) $1,138,760,396 $986,230,914
====================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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'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 are valued at
amortized cost. Options are valued at the last sale price or last quoted asked
price.
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 shareholders are recognized on the ex-dividend date, and
interest income is recognized on the accrual basis.
2. Federal Income Taxes
The Company's policy is to distribute all of its taxable income to its
shareholders in compliance with the requirements of the Internal Revenue Code
applicable to regulated investment companies. Therefore, no federal income
tax provision is required. For federal income tax purposes, the identified
cost of securities including options, at December 31, 1996 was $714,509,542,
and net unrealized appreciation aggregated $422,926,694, of which the related
gross unrealized appreciation and depreciation were $436,915,409 and
$13,988,715, respectively.
Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. Accordingly,
periodic reclassifications are made within the Company's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
3. Investment Transactions
Purchases and sales of portfolio securities, other than options and
short-term investments, during the year ended December 31, 1996 were
$229,828,959 and $186,029,588, respectively. Option transactions comprised
an insignificant portion of operations during the year ended December 31,
1996. All investment decisions are made by a committee, and no one person is
primarily responsible for making recommendations to that committee.
4. Capital Stock
On December 27, 1996, the Company issued 1,871,011 shares of its stock at a
price of $19.50 per share (market value) to stockholders of record November 25,
1996 who elected to take stock in payment of the distribution from 1996 capital
gain and investment income.
The Company may purchase shares of its Common Stock from time to time at such
prices and amounts as the Board of Directors may deem advisable. No
purchases were made during the year ended December 31, 1996.
The Company has 10,000,000 unissued preferred shares without par value.
The Company has an employee incentive stock option and stock appreciation
rights plan which provides for the issuance of options and stock
appreciation rights for the purchase of up to 2,050,000 shares of the
Company's common stock at 100% of the fair market value at date of grant.
Options are exercisable beginning not less than one year after the date of
grant and extend and vest over ten years from the date of grant. Stock
appreciation rights are exercisable beginning not less than two years after the
date of grant and extend over the period during which the option is
exercisable. The stock appreciation rights allow the optionees to surrender
their rights to exercise their options and receive cash or shares in an amount
equal to the difference between the option price and the fair market value of
the common stock at the date of surrender. Under the plan, the exercise price of
the options and related stock appreciation rights is reduced by the per share
amount of capital gain paid by the Company during subsequent years. At the
beginning of 1996, 517,250 options were outstanding with exercise prices of
$8.770-$18.438 per share. During 1996, the Company granted options,
7
<PAGE>
including stock appreciation rights, for 29,551 shares of common stock with
an exercise price of $19.625 per share. During the year stock appreciation
rights relating to 73,903 stock option shares were exercised at market
prices between $18.500-$20.375 per share and the stock options relating to
these rights which had exercise prices between $9.175-$16.455 per share
were cancelled. In addition, stock options and stock appreciation rights
relating to 76,723 shares which had exercise prices of $15.255-$17.238, were
cancelled during the year ended December 31, 1996. At December 31, 1996,
there were outstanding exercisable options to purchase 130,109 common shares
at $7.5700-$17.2375 per share and unexercisable options to purchase
266,066 common shares at $15.255-$19.625 per share. Total compensation
expense recognized in 1996 related to the stock options and stock
appreciation rights plan was $439,113. At December 31, 1996, there were
913,825 shares available for future option grants.
During the year ended December 31, 1996, the provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation," became effective. The provisions of this Statement had no
significant impact on the financial statements of the Company.
5. Retirement Plans
The Company provides retirement benefits for its employees under a
non-contributory qualified defined benefit pension plan. The benefits are based
on years of service and compensation during the last 36 months of employment.
The Company's current funding policy is to contribute annually to the plan only
those amounts that can be deducted for federal income tax purposes. The plan
assets consist primarily of investments in mutual funds.
The actuarially computed net pension cost credit for the year ended
December 31, 1996 was $435,513, and consisted of service expense of
$175,115, interest expense of $300,549, expected return on plan assets of
$705,383, and a net amortization credit of $205,794.
In determining the actuarial present value of the projected benefit obligation,
the interest rate used for the weighted-average discount rate and the expected
rate of annual salary increases was 7.0%, and the expected long-term rate of
return on plan assets was 8.0%.
On January 1, 1996, the accumulated benefit obligation, including vested
benefits, was $3,553,626. The fair value of the plan assets was $8,912,506
and the projected benefit obligation for service rendered to date was
$4,388,767, which resulted in excess plan assets of $4,523,739. The remaining
components of prepaid pension cost at January 1, 1996 included $1,700,630 in
unrecognized net gain, $585,217 in unrecognized prior service cost and
$747,869 in the remaining portion of the unrecognized net asset existing at
January 1, 1987 which is being amortized over 15 years. Prepaid pension cost
included in other assets at December 31, 1996 was $3,095,970.
In addition, the Company has a nonqualified unfunded benefit plan which
provides employees with defined retirement benefits to supplement the
qualified plan. The Company does not provide postretirement medical benefits.
6. Expenses
The cumulative amount of accrued expenses at December 31, 1996 for employees
and former employees of the Company was $1,697,427. Aggregate
remuneration paid or accrued during the year ended December 31, 1996 to officers
and directors amounted to $1,721,708.
Research, accounting and other office services provided to and reimbursed by
the Company's non-controlled affiliate, Petroleum & Resources Corporation,
amounted to $539,508 for the year ended December 31, 1996.
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 value of which exceeds
the market value of such loaned securities. The Company receives compensation
for lending securities in the form of fees. The Company continues to receive
dividends on the securities loaned. At December 31, 1996, the value of security
loans outstanding was $31,231,200.
8
<PAGE>
THE ADAMS EXPRESS COMPANY
- --------------------------------------------------------------------------------
Calendar Market Cumulative Cumulative Total Total net
Years value market value market value market asset
of of capital of income value value
original gains dividends
shares distributions taken in
taken in shares
shares
- ---------------------------------------------------------------------------
1982 $11,172 $ 1,004 $ 873 $13,049 $13,571
1983 11,494 1,751 1,663 14,908 16,071
1984 10,690 2,753 2,217 15,660 16,918
1985 12,458 4,535 3,350 20,343 21,567
1986 12,297 8,648 4,032 24,977 25,480
1987 9,565 10,222 3,954 23,741 25,408
1988 9,484 12,243 4,646 26,373 28,805
1989 10,047 15,468 6,141 31,656 37,177
1990 9,484 16,767 7,040 33,291 37,963
1991 12,217 24,238 10,342 46,797 49,777
1992 12,860 28,420 12,020 53,300 54,579
1993 11,494 28,539 11,769 51,802 57,322
1994 10,050 28,166 11,584 49,800 57,302
1995 11,896 37,088 15,378 64,362 74,311
1996 12,699 43,894 18,200 74,793 89,790
Illustration of an assumed 15 year
investment of $10,000
Investment income dividends and capital gains distributions are taken in
additional shares. This chart covers the years 1982-1996. These results should
not be considered representative of the dividend income or capital gain or loss
which may be realized in the future. No adjustment has been made for any income
taxes payable by stockholders on income dividends or on capital gains
distributions.
[Graph appears here--please see plot points below]
Cumulative
Market Value Cumulative
Market Value of Shares from Market Value
of Original Capital Gains of Shares from Net Asset Value
Investment Distributions Income Dividends of Total Shares
1982 11,172 12,176 13,049 13,571
1983 11,494 13,245 14,908 16,071
1984 10,690 13,443 15,660 16,918
1985 12,458 16,993 20,343 21,567
1986 12,297 20,945 24,977 25,480
1987 9,565 19,787 23,741 25,408
1988 9,484 21,727 26,373 28,805
1989 10,047 25,515 31,656 37,177
1990 9,484 26,251 33,291 37,963
1991 12,217 36,455 46,797 49,777
1992 12,860 41,280 53,300 54,579
1993 11,494 40,033 51,802 573,22
1994 10,050 38,216 49,800 57,302
1995 11,896 48,984 64,362 74,311
1996 12,699 56,593 74,793 89,790
9
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------
1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Per Share Operating Performance
Net asset value, beginning of year $21.36 $17.98 $19.78 $20.48 $20.21
- --------------------------------------------------------------------------------------------------------------------------
Net investment income 0.52 0.50 0.51 0.48 0.46
Net realized gains and change in unrealized
appreciation and other changes 3.55 4.54 (0.71) 1.18 1.43
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.07 5.04 (0.20) 1.66 1.89
Less distributions
Dividends from net investment income (0.52) (0.52) (0.50) (0.45) (0.46)
Distributions from net realized gains (1.20) (1.14) (1.10) (1.18) (1.16)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions (1.72) (1.66) (1.60) (1.63) (1.62)
Dilution resulting from the rights offering - - - (0.73) -
Net asset value, end of year $23.71 $21.36 $17.98 $19.78 $20.48
==========================================================================================================================
Per share market price, end of year $19.75 $18.50 $15.625 $17.875 $20.00
- --------------------------------------------------------------------------------------------------------------------------
Total Investment Return
Based on market price 16.4% 29.5% (3.7)% (2.7)% 14.1%
Ratios/Supplemental Data
Net assets, end of year (in 000's) $1,138,760 $986,231 $798,298 $840,610 $696,925
Ratio of expenses to average net assets 0.34% 0.46% 0.33 0.36% 0.49%
Ratio of net investment income to
average net assets 2.30% 2.51% 2.65% 2.33% 2.30%
Portfolio turnover 19.60% 23.98% 19.23% 21.40% 17.97%
Average brokerage commission rate $0.07 - - - -
Number of shares outstanding at
end of year (in 000's) 48,037 46,166 44,390 42,498 34,027
</TABLE>
=========================
QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shown in thousands of dollars and per common share:
Three Months Ended
-----------------------------------------------------------------------------------
March 31, 1996 June 30, 1996 September 30, 1996 December 31, 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Total investment income $ 6,510 $ 0.14 $ 7,615 $0.16 $ 6,768 $0.15 $ 6,894 $ 0.15
Net investment income 5,404 0.12 6,736 0.15 5,632 0.12 6,465 0.13
Net realized gain
and change in
unrealized appreciation 36,519 0.79 35,866 0.78 39,581 0.86 59,246 1.28
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------------------
March 31, 1995 June 30, 1995 September 30, 1995 December 31, 1995
- -------------------------------------------------------------------------------------------------------------------
Total investment income $ 6,002 $ 0.14 $ 6,770 $0.15 $ 6,745 $0.15 $ 7,018 $ 0.16
Net investment income 5,056 0.11 5,824 0.13 5,686 0.13 5,828 0.13
Net realized gain
and change in
unrealized appreciation 48,689 1.10 51,088 1.15 61,514 1.38 45,199 1.02
</TABLE>
10
<PAGE>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Stocks and Convertible Securities -- 95.1%
Basic Industries -- 4.4%
Air Products & Chemicals, Inc. 150,000 $ 10,368,750
Consolidated Papers, Inc. 100,000 4,912,500
du Pont (E.I.) de Nemours &Co. 140,000 13,177,500
Inco Ltd. 7.75% Conv. Debs. due 2016 $5,000,000 5,225,000
Kimberly-Clark Corp. 170,000 16,192,500
------------
49,876,250
------------
Capital Goods-- 11.9%
Boeing Co. 99,600 10,607,400
Caterpillar Inc. 135,000 10,158,750
Cemex, S.A. de C.V. 4.25% Conv. Sub. Debs. due 1997(B) $4,000,000 3,870,000
Cooper Industries, Inc. 7.05% Conv. Sub. Debs. due 2015 $4,540,000 4,812,400
Deere & Co. 270,000 10,935,000
Dover Corp. 50,000 2,525,000
Emerson Electric Co. 36,500 3,535,938
General Electric Co. 350,000 34,606,250
The BFGoodrich Co. 110,000 4,455,000
Granite Construction Inc. 365,000 6,935,000+
Minnesota Mining & Manufacturing Co. 200,000 16,600,000
Pall Corp. 450,000 11,531,250
Rockwell International Corp. 250,000 15,218,750
------------
135,790,738
------------
Consumer -- 15.0%
Consumer Distribution-- 2.3%
Borders Group, Inc. (C) 195,000 6,995,625
Dillard Department Stores, Inc. 200,000 6,175,000
Home Depot, Inc. 80,000 4,010,000
Penney (J.C.) Co., Inc. 180,000 8,775,000
------------
25,955,625
------------
Consumer Services-- 3.5%
Brinker International, Inc. (C) 345,000 5,520,000
Cracker Barrel Old Country Store, Inc. 350,000 8,881,250+
McDonald's Corp. 315,000 14,293,125
Scandinavian Broadcasting System SA 7.25% Conv. Sub. Debs. due 2005 $3,000,000 2,835,000+
Time Warner Inc. 150,000 5,625,000
US WEST Media Group, Inc. (C) 150,000 2,756,250
------------
39,910,625
------------
</TABLE>
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Consumer Staples--9.2%
CPC International Inc. 127,500 $ 9,881,250
Campbell Soup Co. 190,000 15,247,500
Coca-Cola Co. 180,000 9,472,500
Crown Cork & Seal Co., Inc. 205,000 11,146,875
Duracell International Inc. 265,000 18,516,875
Houghton Mifflin Co. 175,400 9,932,025
International Flavors & Fragrances, Inc. 100,000 4,500,000
Interstate Bakeries Corp. 83,400 4,097,025
PepsiCo, Inc. 320,000 9,360,000
Procter & Gamble Co. 115,000 12,376,875
------------
104,530,925
------------
Energy -- 9.4%
British Petroleum plc ADR 80,000 11,310,000
Enron Corp. 6.25% Exch. Notes due 1998 411,900 9,885,600
MCN Corp. 400,000 11,550,000
Mobil Corp. 60,000 7,335,000
Petroleum & Resources Corporation (D) 1,145,570 39,808,558
Royal Dutch Petroleum Co. 45,000 7,683,750
Schlumberger Ltd. 54,200 5,413,225
Union Pacific Resources Group Inc. 275,102 7,977,958
Unocal Capital Trust $3.125 Conv. Pfd. 111,600 6,319,350+
------------
107,283,441
------------
Financial -- 12.4%
Banking -- 7.1%
Associates First Capital Corp. Ser. A 75,000 3,309,375
Federal Home Loan Mortgage Corp. 90,000 9,933,750
Investors Financial Services Corp. 231,200 6,415,800+
Mellon Bank Corp. 165,000 11,715,000
National City Corp. 80,000 3,590,000
Norwest Corp. 330,000 14,355,000
Peoples Heritage Financial Group 237,000 6,636,000+
Provident Bankshares Corp. 131,250 5,118,750+
Wachovia Corp. 210,000 11,865,000
Wilmington Trust Corp. 210,000 8,295,000+
------------
81,233,675
------------
Insurance -- 5.3%
AMBAC Inc. 199,800 13,261,725
American International Group, Inc. 180,000 19,485,000
Lincoln National Corp. 140,000 7,350,000
Reinsurance Group of America, Inc. 199,900 9,420,288
Salomon Inc. 7.625% Exch. Notes due 1999 (B) 375,000 11,343,750
------------
60,860,763
------------
</TABLE>
12
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Health Care -- 9.3%
Drugs -- 4.7%
Elan Corp., plc ADR (C) 460,000 $15,295,000
Lilly (Eli) & Co. 169,200 12,351,600
Merck & Co., Inc. 170,000 13,536,250
SmithKline Beecham plc ADR 180,000 12,240,000
------------
53,422,850
------------
Medical Supplies and Services -- 4.6%
Abbott Laboratories 290,000 14,717,500
Allergan, Inc. 151,300 5,390,063
Beckman Instruments, Inc. 175,000 6,715,625
Integrated Health Services, Inc. 5.75% Conv. Sub. Debs. due 2001 $6,675,000 6,441,375
Integrated Health Services, Inc. 6% Conv. Sub. Debs. due 2003 $500,000 485,000
Life Technologies, Inc. 307,500 7,687,500+
MedPartners Inc. (C) 373,000 7,739,750
ONCOR, Inc. (C) 900,000 3,600,000
------------
52,776,813
------------
Technology -- 15.0%
Communication Equipment -- 4.2%
Ericsson (L.M.) Telephone Co. 4.25% Conv. Sub. Debs. due 2000 $120,000 502,560+
Ericsson (L.M.) Telephone Co. ADR 440,000 13,282,500+
Lucent Technologies Inc. 64,816 2,997,740
Motorola, Inc. LYONs due 2009 $650,000 728,000
Motorola, Inc. 160,000 9,800,000
Nokia Corp. Pfd. ADR 150,000 8,643,750
Northern Telecom Ltd. 190,000 11,756,250
------------
47,710,800
------------
Computer Related -- 7.2%
Computer Sciences Corp.(C) 136,000 11,169,000
DST Systems Inc. (C) 175,000 5,490,625
Electronic Data Systems Corp. 168,936 7,306,482
First Data Corp. 343,980 12,555,270
Keane, Inc. (C) 350,000 11,112,500
QuickResponse Services, Inc. (C) 218,000 6,213,000+
Sabre Group Holdings, Inc. (C) 425,000 11,846,875
Sterling Commerce, Inc. (C) 304,657 10,739,159
Sterling Software, Inc. (C) 185,000 5,850,625
------------
82,283,536
------------
Electronics -- 3.6%
Intel Corp. 85,000 11,129,688+
Itron, Inc. (C) 226,000 4,011,500+
Solectron Corp. (C) 300,000 16,012,500
Verifone, Inc. (C) 312,500 9,218,750
------------
40,372,438
------------
</TABLE>
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Transportation -- 3.9%
AMR Corp. (C) 57,000 $ 5,023,125
Delta Air Lines, Inc. 150,071 10,636,282
Illinois Central Corp. 210,000 6,720,000
Ryder System, Inc. 500,000 14,062,500
Union Pacific Corp. 130,000 7,816,250
------------
44,258,157
------------
Utilities -- 13.8%
Electric And Gas Utilities -- 6.2%
Black Hills Corp. 312,700 8,794,688
CINergy Corp. 300,000 10,012,500
DPL Inc. 400,000 9,700,000
Empresa Nacional de Electricidad, S.A. ADR 150,000 10,500,000
LG&E Energy Corp. 400,000 9,800,000
Public Service Co. of Colo. 210,000 8,163,750
TECO Energy, Inc. 300,000 7,237,500
Washington Gas Light Co. 257,000 5,814,625
------------
70,023,063
------------
Telephone Utilities -- 7.6%
AT&T Co. 200,000 8,675,000
AirTouch Communications (C) 200,000 5,050,000
Ameritech Corp. 155,000 9,396,875
Bell Atlantic Corp. 100,000 6,475,000
BellSouth Corp. 220,000 8,910,000
First Chicago Corp. 5.50% DECS due 1997 120,000 1,590,000
GTE Corp. 250,000 11,343,750
LCI International, Inc. (C) 335,000 7,244,375
MFS Communications Co. (C) 200,000 10,900,000+
SBC Communications Inc. 200,000 10,375,000
Tele Danmark A/S ADS 260,000 7,117,500
------------
87,077,500
------------
Total Stocks and Convertible Securities
(Cost $660,942,344)(E) 1,083,367,199
------------
</TABLE>
14
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1996
<TABLE>
<CAPTION>
Prin. Amt. Value (A)
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Short-Term Investments -- 4.7%
Certificates of Deposit -- 1.8%
Mercantile-Safe Deposit & Trust Co., 5.45-5.50%, due 1/2/97-1/9/97 $10,000,000 $ 10,000,000
Wachovia Bank of North Carolina N.A., 5.37%, due 1/16/97 10,000,000 10,000,000
------------
20,000,000
------------
Commercial Paper -- 2.9%
Chevron UK Investment PLC, 5.51%, due 1/23/97 9,500,000 9,467,071
Coca-Cola Co., 6.25%, due 1/2/97 4,380,000 4,378,479
Ford Motor Credit Corp., 6.00-6.10%, due 1/2/97-1/3/97 9,400,000 9,397,012
General Electric Capital Corp., 5.40-5.50%, due 1/16/97-1/30/97 6,230,000 6,213,315
USAA Capital Corp., 5.29%, due 1/9/97 4,075,000 4,070,140
------------
33,526,017
------------
Total Short-Term Investments
(Cost $53,526,017) 53,526,017
------------
Total Investments
(Cost $714,468,361) 1,136,893,216
Cash, receivables and other assets, less liabilities 1,867,180
------------
Net Assets-- 100.0% $1,138,760,396
================================================================================================================
</TABLE>
Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange or the Toronto Stock Exchange
except restricted securities and also those marked (+), which are traded
"Over-the-Counter."
(B) Restricted securities (Cemex, S.A. de C.V. 4.25% Conv. Sub. Debs. due 1997,
acquired 9/28/94, cost $4,053,999, Salomon Inc. 7.625% Exch. Notes due 1999,
acquired 5/8/96, cost $10,017,100).
(C) Presently non-dividend paying.
(D) Non-controlled affiliate.
(E) The aggregate market value of stocks held in escrow at December 31, 1996
covering open call option contracts written was $10,430,000. In addition,
the required aggregate market value of securities segregated by the
custodian to collateralize open put option contracts written was
$11,275,000.
15
<PAGE>
PRINCIPAL CHANGES IN PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
During the Three Months Ended December 31, 1996
<TABLE>
<CAPTION>
Shares
--------------------------------------------
Held
Dec. 31,
Additions Reductions 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Caterpillar Inc. 135,000 135,000
du Pont (E.I.) de Nemours & Co. 140,000 140,000
First Data Corp. 343,980(1) 343,980
Investors Financial Services Corp. 71,200 231,200
Itron, Inc. 105,000 226,000
Keane, Inc. 175,000(2) 95,000 350,000
LG&E Energy Corp. 150,000 400,000
Lucent Technologies Inc. 64,816(3) 64,816
Pall Corp. 185,000 450,000
Penney (J.C.) Co., Inc. 180,000 180,000
Public Service Co. of Colo. 210,000 210,000
Sabre Group Holdings, Inc. 425,000 425,000
Solectron Corp. 60,000 300,000
Sterling Commerce, Inc. 310,557(4) 15,900 304,657(5)
Union Pacific Resources Group Inc. 110,102(6) 275,102
American Express Co. 6.25% DECS due 1996 210,000(1) --
Merck & Co., Inc. 20,000 170,000
Northern Telecom Ltd. 25,000 190,000
Texaco Inc. 15,000 --
</TABLE>
- ------------
(1) Received .819 shares for each share of American Express Co. 6.25% DECS due
1996 and 171,990 shares by stock split.
(2) By stock split.
(3) Received .32408 shares for each share of AT&T Co. held.
(4) Received 1.5926 shares for each share of Sterling Software, Inc. held.
(5) Includes shares previously listed under "Stocks under Accumulation" in the
Schedule of Investments.
(6) Received .84694 shares for each share of Union Pacific Corp. held.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Stockholders of
The Adams Express Company:
We have audited the accompanying statement of assets and liabilities of The
Adams Express Company, including the schedule of investments, as of December 31,
1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of The
Adams Express Company as of December 31, 1996, and the results of its
operations, the changes in its net assets, and financial highlights for each of
the respective periods stated in the first paragraph, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Baltimore, Maryland
January 8, 1997
17
<PAGE>
SHAREHOLDER INFO AND SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
WE ARE OFTEN ASKED --
How do I invest in Adams Express?
Adams' common stock is listed on the New York Stock Exchange and the Pacific
Stock Exchange. Our stock's ticker symbol is "ADX." Our stock may be bought and
sold through registered investment security dealers. Your broker will be happy
to assist you in this regard. Once a share of stock is registered in your name,
additional stock may be purchased through the Bank of New York's Automatic
Dividend Reinvestment Plan (see page 19).
Where do I get information on the stock's price, trading and/or net asset value?
The net asset value per share is published on Saturdays in various newspapers
and on Mondays in The Wall Street Journal in a table titled "Closed-End Funds."
The table compares the net asset value at the close of the week's last business
day to the market price of the shares, and shows the amount of the discount or
premium.
Adams' daily trading is shown in the stock tables of most daily newspapers,
usually with the abbreviated form "AdaEx." Local newspapers determine, usually
by volume of traded shares, which securities to list. If your paper does not
carry our listing, please telephone the Company at (800) 638-2479.
How do I replace a lost certificate(s) or how do Icorrect a spelling error on my
certificate?
Your Adams Express stock certificates are valuable documents and should be kept
in a safe place. For tax purposes, keep a record of each certificate, including
the cost or market value of the shares it covers at the time acquired. If a
certificate is lost, destroyed or stolen, notify the transfer agent immediately
so a "stop transfer" order can be placed on the records to prevent an
unauthorized transfer of your certificate. The necessary forms and requirements
to permit the issuance of a replacement certificate will then be sent to you. A
certificate can be replaced only after the receipt of an affidavit regarding the
loss accompanied by an open penalty bond, for which a small premium is paid by
the stockholder.
In the event a certificate is issued with the holder's name incorrectly spelled,
a correction can only be made if the certificate is returned to the transfer
agent with instructions for correcting the error. To transfer shares to another
name also requires that the certificate be forwarded to the transfer agent with
the appropriate assignment forms completed and the signature of the registered
owner Medallion guaranteed by a bank or member firm of The New York Stock
Exchange, Inc.
Can you send my dividend checks directly to my bank?
Yes, supply either the Company or the Transfer Agent with your bank's name, your
branch's mailing address and your account number at your bank. (Sorry, we cannot
electronically transfer funds at this time.)
How often does the Company pay its dividends?
The Company anticipates distributions of 1997 investment income and capital
gains as follows:
March 1
- -------
Interim 1997 investment income payment including remaining undistributed 1996
investment income and capital gain.
June 1
- ------
Interim 1997 investment income payment.
September 1
- -----------
Interim 1997 investment income payment.
December 27
- -----------
The year-end optional distribution approximating the sum of the net capital gain
earned through 10/31/97 and the balance of the net investment income expected
for 1997.
Additional information on the Company's dividend payments and the Automatic
Dividend Reinvestment Plan is set forth on page 19.
Who do I notify of a change of address?
Either the Company or the Transfer Agent.
I'm getting two checks or two statements or two reports. What should I do?
Send the duplicate labels to the Company or Transfer Agent with a short note.
We go to Florida (Arizona) every winter. How do we get our mail from Adams
Express?
The Transfer Agent can program a seasonal address into their system; simply send
the temporary address and the dates you plan to be there to the Bank (check
dividend payments dates).
I want to give shares to my children, grandchildren, etc. as a gift. How do I go
about it?
The stock transfer rules, designed to protect you, the investor, are clear and
precise for most forms of transfer. They will vary slightly depending on each
transfer, so write to either the Company or the Transfer Agent stating the exact
intent of your gift plans and either of us will send you the instructions and
forms necessary to effect your transfer.
------------------
The Company The Transfer Agent
The Adams Express Company The Bank of New York
J.G. Whitney, Secretary Shareholder Relations Dept.
Seven St. Paul Street, Suite 1140 101 Barclay Street, 11E
Baltimore, MD 21202 New York, NY 10007
(800) 638-2479 (800) 432-8224
18
<PAGE>
DIVIDEND PAYMENT SCHEDULE AND THE
AUTOMATIC DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
The Company presently pays dividends four times a year, as follows: (a) Three
interim investment income dividends on or about March, June and September 1st.
(b) A "year-end" payment consisting of the estimated balance of the net
investment income for the year and the net realized capital gain earned through
October 31st, payable in late December. Stockholders may elect to receive this
payment in stock or cash. In connection with this payment, all stockholders of
record are sent a dividend announcement notice and an election card in
mid-November. The following options are available:
(1) Full shares of stock for the combined income dividend and capital gain
distribution to the extent possible.
(2) Full shares of stock for the capital gain distribution to the extent
possible. Fractional shares and the income dividend are paid in cash. Without a
timely response, stockholders will be paid in accordance with this option.
(3) Both the income dividend and capital gain distribution in cash.
Stockholders holding shares in "street" or brokerage accounts may make one of
the above elections by notifying their brokerage house representative.
Stockholders of record of Adams stock have two additional ways to increase their
investment in the Company.
The Bank of New York's Automatic Dividend Reinvestment Plan provides that its
participants' four distributions are automatically invested in additional shares
of Adams common stock. New shares acquired are held on a book basis by the Bank.
Additionally, after the participants' first dividend is reinvested, they are
eligible to make cash payments in any amount from $25.00.
The Bank provides participants with reinvestment confirmations after each
dividend or cash payment. The Bank's fee for this service is 10% of the amount
received up to a maximum of $2.50 for the interim dividend payments and cash
payments. There is no charge for the "year-end" distribution.
The Bank's plan also provides for the deposit of certificate shares into the
participant's "book share" account for a one-time charge of $5.00.
A brochure and enrollment card may be obtained by calling the Bank at (800)
432-8224 or by writing to:
The Bank of New York
Dividend Reinvestment
P.O. Box 11258
Church Street Station
New York, NY 10277
-------------------------
Common Stock
Listed on the New York Stock Exchange
and the Pacific Stock Exchange
Transfer Agent, Registrar & Custodian of Securities
The Bank of New York
101 Barclay Street, 11E
New York, NY 10007
The Bank's Shareholder Relations Department: (800) 432-8224
The Company Office Address: Seven St. Paul Street, Suite 1140,
Baltimore, MD 21202
The Company Office Telephone: (410) 752-5900 or (800) 638-2479
Counsel: Chadbourne & Parke L.L.P.
Independent Accountants: Coopers & Lybrand L.L.P.
19
<PAGE>
HISTORICAL FINANCIAL STATISTICS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dividends Distributions
From Net From Net
Common Net Asset Investment Realized
Value Of Shares Value Income Gains
Dec. 31 Net Assets Outstanding Per Share Per Share Per Share
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
1982 $ 331,632,505 18,352,917 $18.07 $1.05 $1.20
1983 369,991,754 19,204,021 19.27 .92 .81
1984 364,880,744 20,320,139 17.96 .78 1.33
1985 437,819,395 21,313,202 20.54 .72 1.20
1986 468,344,507 24,004,882 19.51 .71 3.74
1987 427,225,965 26,833,998 15.92 .78 2.66
1988 455,825,580 28,295,508 16.11 .50 1.32
1989 550,091,129 29,982,939 18.35 .70 1.36
1990 529,482,769 31,479,340 16.82 .66 1.06
1991 661,895,779 32,747,497 20.21 .54 1.09
1992 696,924,779 34,026,625 20.48 .46 1.16
1993 840,610,252 42,497,665 19.78 .45 1.18
1994 798,297,600 44,389,990 17.98 .50 1.10
1995 986,230,914 46,165,517 21.36 .52 1.14
1996 1,138,760,396 48,036,528 23.71 .52 1.20
</TABLE>
--------------
Stock Data
--------------
Price (12/31/96) $19.75
Net Asset Value (12/31/96) $23.71
Discount: 16.7%
New York Stock Exchange and Pacific Stock Exchange ticker symbol: ADX
Newspaper stock listings are generally under the abbreviation: AdaEx
This report, including the financial statements herein, is transmitted to the
stockholders of The Adams Express Company for their information. It is not a
prospectus, circular or representation intended for use in the purchase or sale
of shares of the Company or of any securities mentioned in the report.
20
