1997 ANNUAL REPORT
- --------------------------------------------------------------------------------
[ADAMS EXPRESS COMPANY LOGO APPEARS HERE]
(R)
BUILDING FOR THE FUTURE
WITH SOLID INVESTMENTS(R)
<PAGE>
1997 AT A GLANCE
- --------------------------------------------------------------------------------
The Company
o a closed-end equity investment company
o objectives: preservation of capital
reasonable income
opportunity for capital gain
o internally-managed
o low expense ratio
o low turnover
Stock Data
NYSE Symbol ADX
Market Price as of 12/31/97 $24 3/16
Discount 15.2%
52-Week Range $19 3/8-$25 1/2
Shares Outstanding 49,949,239
Summary Financial Information
<TABLE>
<CAPTION>
Year Ended December 31
1997 1996
- -------------------------------------------------------------------------------------------------------
<S><C>
Net asset value per share $ 28.51 $ 23.71
Total net assets 1,424,170,425 1,138,760,396
Unrealized appreciation 665,179,036 422,449,125
Net investment income 20,784,601 24,237,044
Total realized gain 71,696,127 57,853,036
Total return (based on market value) 33.1% 16.4%
Total return (based on net asset value) 30.7% 20.1%
Expense ratio 0.39% 0.34%
- -------------------------------------------------------------------------------------------------------
</TABLE>
1997 Dividends and Distributions
Amount
Paid (per share) Type
- --------------------------------------------------------------------------------
March 1, 1997 $0.08 Long-term capital gain
March 1, 1997 0.01 Short-term capital gain
March 1, 1997 0.03 Investment income
June 1, 1997 0.12 Investment income
September 1, 1997 0.12 Investment income
December 27, 1997 1.26 Long-term capital gain
December 27, 1997 0.17 Short-term capital gain
December 27, 1997 0.17 Investment income
- --------------------------------------------------------------------------------
$1.96
================================================================================
1998 Annual Meeting of Stockholders
Location: The Luxury Collection Hotel, Houston, Texas
Date: March 31, 1998
Holders of Record: February 13, 1998
[LOGO APPEARS HERE]
<PAGE>
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
Ten Largest Portfolio Holdings (12/31/97)
Market Value % of Net Assets
------------ ---------------
General Electric Co. $ 48,060,625 3.4
Petroleum & Resources Corporation* 41,813,305 2.9
American International Group 29,362,500 2.1
Norwest Corp. 25,575,000 1.8
Solectron Corp. 24,937,500 1.7
Hewlett-Packard Co. 23,702,500 1.7
Elan Corp. 23,546,250 1.6
Gillette Co. 23,056,432 1.6
Campbell Soup Co. 22,087,500 1.6
Lilly (Eli) & Co. 20,887,500 1.5
------------ ----
Total $283,029,112 19.9%
- ---------
* Non-controlled affiliate
Sector Weightings (12/31/97)
[GRAPH APPEARS HERE -- PLOT POINTS BELOW]
<TABLE>
<CAPTION>
Basic Capital Health Cash &
Industries Goods Consumer Energy Financial Care Technology Transportation Utilities Equivalent
- ---------- ------- -------- ------ --------- ------ ---------- -------------- --------- ----------
<S><C>
3.1 9.9 16.2 8.5 17 12.2 14.9 3.8 12.1 1.9
</TABLE>
[LOGO APPEARS HERE]
1
<PAGE>
LETTER TO STOCKHOLDERS
- --------------------------------------------------------------------------------
In this annual report, you will find our financial statements for 1997, the
report of independent accountants, our year-end portfolio holdings, and summary
financial information for the Company.
The Year in Review
The pickup in growth of the U.S. economy in 1997 from the 2.8% pace in the prior
year to about 3.8% came as a surprise to most observers. After a strong finish
in 1996, real gross domestic product (GDP) growth accelerated in the first
quarter to a seemingly unsustainable 4.9% quarter to quarter. Though inflation
remained at a low level, the Federal Reserve Board took action to raise
short-term interest rates in March, fearful of the potential effects of strong
growth and low unemployment on the inflation rate. While the economy normally
takes from six to nine months to respond to an interest rate change, growth
slowed to 3.3% in the second quarter of the year. This was due almost
exclusively to a slowdown in final demand, as the work force and industrial
production continued to grow in the quarter. With a pickup in demand in the
final half of the year, GDP accelerated a bit, with final year over year growth
of approximately 3.8%. Importantly, despite this strong growth and an
unemployment rate under 5%, signs of wage-related pressure on the inflation rate
have not appeared.
The restructuring and downsizing which have characterized the industrial sector
for the past several years continued in 1997, though at a slower pace. With much
of the excess wrung out of operations, managements focused on outsourcing
overhead items. In addition, there has been a wave of mergers, joint ventures
and acquisitions across many industries, as companies have sought economies of
scale or strategic advantages. Notable among these have been the banking,
energy, health care and technology industries. Deregulation has also sparked
changes in the telecommunications and electric utility industries, with much
more to come in the next several years. The net results have been strong growth
in capital spending and only a modest deceleration in the growth of corporate
profits to about 8%, despite overall sales growth of only 3% or so. The
to-be-reported earnings for 1997 of Standard & Poor's Composite of 500
companies, however, are expected to have grown by approximately 11%, slightly
more than in 1996.
Consumer spending in 1997 continued to reflect the modest gains realized in
wages and income during the year. While sentiment about the outlook improved
through the year, people increased their savings rate rather than spending. This
is apparent in statistics on housing starts, automobile sales and retail chain
sales, all of which experienced modest growth at best.
For much of the year, the stock market traced the level of economic activity in
this country. The market's upward surge of the first quarter was brought to a
halt by the action of the Federal Reserve on March 25 but resumed in April when
leading indicators registered a slowdown in projected economic growth. The
expectation of less growth drove investors into more defensive stocks, which
have historically fared better during periods of lower growth. The steady flow
of money into mutual funds and individual investor action served to drive the
valuations of many of these stocks to new record highs. In August, investors
began to realize that the Asian monetary and economic problems were going to
impact U.S. companies, especially the large multinationals which had been in
favor for several years. This became apparent in October when third quarter
earnings reports and pre-release announcements gave details of the effects. The
rout on October 27 was followed by an immediate bounce as investors once again
"bought the dip." As a result, the performance of the popular indices was better
for the month of October than it was for August. The year concluded with another
gain in excess of 20%, the first time the stock market has ever had such gains
three years in a row.
The stocks in the Adams Express portfolio have continued to provide our
shareholders with an excellent return in 1997. With a majority of our holdings
in large-capitalization, multinational companies, we benefited from investment
trends in the first half. In more recent months, some individual stocks have
been overly depressed due to their perceived Asian exposure, but in general the
portfolio has done well. Outstanding returns were provided by our bank, consumer
staples, and health care holdings, while our investments in basic materials and
technology had good returns relative to their industry sectors.
For the twelve months of 1997, the return on net assets of The Adams Express
Company, including income and capital gains distributions, was 30.7% compared to
a return of 33.3% for the Standard & Poor's 500. On the basis of market prices,
the fund's return was greater, at 33.1%, due to the narrowing of the discount of
the market price of Adams Express stock from 16.7% at the beginning of the year
to 15.2% at year-end. Our year-end holdings of cash and short-term investments
stood at 1.9% of net assets compared to 4.7% of assets a year ago.
Investment Results
At the end of 1997 our net assets were $1,424,170,425 or $28.51 per share on
49,949,239 shares outstanding as compared with $1,138,760,396 or $23.71 per
share on 48,036,528 shares outstanding a year earlier.
Net investment income for the year 1997 was $20,784,601 compared to $24,237,044
for the year 1996. These earnings are equal to $0.43 and $0.52 per share,
respectively, on the average number of shares outstanding throughout each year.
Net realized gains amounted to $71,696,127 during the year, while the unrealized
appreciation on investments increased from $422,449,125 at December 31, 1996 to
$665,179,036 at year end.
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2
<PAGE>
LETTER TO STOCKHOLDERS
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Dividends and Distributions
As announced on November 13, 1997, a year-end distribution consisting of
investment income of $0.17 and capital gains of $1.43 was made on December 27,
1997, both realized and taxable in 1997. On January 8, 1998, an additional
distribution of $0.12 per share was declared payable March 1, 1998, representing
the balance of undistributed net investment income and capital gains earned
during 1997 and an initial distribution from 1998 net investment income, all
taxable to shareholders in 1998.
Outlook for 1998
On the economic front, we are essentially in uncharted waters at this point. The
U.S. economy has rarely experienced over six years of continuous growth without
generating higher levels of inflation, unemployment, and interest rates. There
has been much talk about a new paradigm or way of thinking about economic
relationships as a result of great strides made in worker productivity and the
effects of a more global marketplace. It is our belief, however, that the old
relationships will reassert themselves in the form of higher wages and a slower
rate of economic growth. The effects of the problems in Southeast Asia are still
largely unknown, but one can surmise that worldwide prices will feel downward
pressure, affecting profit margins negatively. Exports to the area are likely to
decline due to lower currency values and the market for infrastructure-building
goods and services will shrink. Since the magnitude of the problems has caught
most investors by surprise, there was very little that could be done to take
advantage of the situation.
Our belief is that economic growth in this country will be a full percentage
point lower as a result of the Asian "flu" than it might otherwise have been.
Combining this with the tight labor market and high capacity utilization in this
country, we can see growth decelerating to the 2% range in 1998. Most
forecasters are still looking for a 2.5% or higher rate and may have to reduce
their expectations as the year unfolds. Should this be the case, it would be
necessary for analysts to reduce their corporate earnings estimates, which in
turn would trigger a negative reaction in the stock market. With the current
anticipation of 7% growth in earnings, the Standard & Poor's 500 Composite Index
is trading at a 1998 price/earnings multiple of 20. With a low general level of
interest rates, such a valuation may be appropriate. Given the uncertainty of
the impact of the Asian crisis on our economy, however, the market seems
overvalued at this point and we would expect a correction to occur as the
situation is clarified.
It is interesting to note that, after several years of watching and waiting for
the Federal Reserve Board to cause the end of the bull market, the focus of
interest has shifted to the Far East. The logic behind this is there will be no
need for the Fed to take action to slow economic growth in order to keep
inflation under control. The stock market has historically reacted almost
immediately to action by the Fed and we have seen it do the same with each new
revelation of the depth of the Asian problems. The response to Fed action has
generally lasted some time, whereas with this new influence, the market has
recovered each time progress seems to have been made toward resolving some
aspect of the problems. The result has been an increase in the volatility of the
market as a whole. Sooner or later, we believe that the impact of little or no
economic growth in what has been the most dynamic part of the world will be
fully realized and valuations will come down accordingly. The effect on
companies with heavy exposure in Asia will be the greatest, naturally, but the
entire market is expected to decline measurably.
With its emphasis on companies with strong balance sheets and geographically
diversified operations, The Adams Express Company's portfolio should outperform
the market during such a correction. We believe we are well-positioned in
companies and industries which, while they may have temporary setbacks, have
strategies and managements in place to produce excellent returns over the long
term.
------
Mr. Leigh Carter retired from the Board of Directors as of December 31, 1997.
Mr. Carter joined the Board in 1982 while he was President of the Engineered
Products Group of the BFGoodrich Co., and Chairman of the Board and Chief
Executive Officer of Tremco, Inc. He has been an invaluable source of knowledge
and wisdom during his fifteen years of service as a director of the Company. We
wish to express our sincere appreciation to him and, along with the Board of
Directors, wish him well in all his future endeavors.
Effective January 1, 1998, Ms. Maureen A. Jones was promoted to Vice President
and Treasurer. Ms. Jones was formerly Treasurer of the Company.
The proxy statement for the Annual Meeting of Stockholders to be held in
Houston, Texas on March 31, 1998, will be mailed on or about February 17, 1998
to holders of record on February 13, 1998.
By order of the Board of Directors,
/s/ Douglas G. Ober /s/ Joseph M. Truta
- ------------------------ ------------------------
Douglas G. Ober, Joseph M. Truta,
Chairman and Chief President
Executive Officer
January 16, 1998
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3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<S><C>
Assets
Investments* at value:
Common stocks and convertible securities
(cost $708,084,958) $1,353,895,107
Non-controlled affiliate, Petroleum & Resources Corporation
(cost $22,153,015) 41,813,305
Short-term investments (cost $26,757,114) 26,757,114 $1,422,465,526
- ----------------------------------------------------------------------------------
Cash 157,818
Dividends and interest receivable 2,189,994
Prepaid expenses and other assets 3,814,533
- ----------------------------------------------------------------------------------------------------
Total Assets 1,428,627,871
- ----------------------------------------------------------------------------------------------------
Liabilities
Open written option contracts at value (proceeds $800,160) 1,091,563
Accrued expenses 3,365,883
- ----------------------------------------------------------------------------------------------------
Total Liabilities 4,457,446
- ----------------------------------------------------------------------------------------------------
Net Assets $1,424,170,425
====================================================================================================
Net Assets
Common Stock at par value $1.00 per share, authorized 75,000,000
shares; issued and outstanding 49,949,239 shares $ 49,949,239
Additional capital surplus 704,167,465
Undistributed net investment income 1,821,822
Undistributed net realized gain on investments 3,052,863
Unrealized appreciation on investments 665,179,036
- ----------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Stock $1,424,170,425
====================================================================================================
Net Asset Value Per Share of Common Stock $28.51
====================================================================================================
</TABLE>
*See schedule of investments on pages 11 through 15.
The accompanying notes are an integral part of the financial statements.
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4
<PAGE>
STATEMENT OF OPERATIONS
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Year Ended December 31, 1997
<TABLE>
<CAPTION>
Investment Income
<S><C>
Income:
Dividends:
From unaffiliated issuers $ 18,705,723
From non-controlled affiliate 1,031,013
Interest 6,047,783
- --------------------------------------------------------------------------------------
Total income 25,784,519
- --------------------------------------------------------------------------------------
Expenses:
Investment research 2,409,796
Administration and operations 945,747
Directors' fees 184,350
Reports and stockholder communications 259,255
Transfer agent, registrar and custodian expenses 395,951
Auditing services 63,466
Legal services 52,737
Occupancy and other office expenses 245,678
Travel, telephone and postage 163,932
Other 279,006
- --------------------------------------------------------------------------------------
Total expenses 4,999,918
- --------------------------------------------------------------------------------------
Net Investment Income 20,784,601
- --------------------------------------------------------------------------------------
Realized Gain and Change in Unrealized Appreciation on Investments
Net realized gain on security transactions 70,057,962
Net realized gain distributed by regulated investment company
(non-controlled affiliate) 1,638,165
Change in unrealized appreciation on investments 242,729,911
- --------------------------------------------------------------------------------------
Net Gain on Investments 314,426,038
- --------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $335,210,639
======================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
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5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
----------------------------------
Dec. 31, 1997 Dec. 31, 1996
- -------------------------------------------------------------------------------------------------------------------
<S><C>
From Operations:
Net investment income $ 20,784,601 $ 24,237,044
Net realized gain on investments 71,696,127 57,853,036
Change in unrealized appreciation on investments 242,729,911 113,359,376
- -------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations 335,210,639 195,449,456
- -------------------------------------------------------------------------------------------------------------------
Dividends to Stockholders From:
Net investment income (21,136,073) (24,006,069)
Net realized gain from investment transactions (73,015,523) (55,398,620)
- -------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions (94,151,596) (79,404,689)
- -------------------------------------------------------------------------------------------------------------------
From Capital Share Transactions:
Value of common shares issued in payment of optional distributions 44,350,986 36,484,715
- -------------------------------------------------------------------------------------------------------------------
Total Increase In Net Assets 285,410,029 152,529,482
Net Assets:
Beginning of year 1,138,760,396 986,230,914
- -------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $1,821,822 and $2,173,294, respectively) $1,424,170,425 $1,138,760,396
===================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
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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. Written 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, 1997 was $757,599,485, and net
unrealized appreciation aggregated $665,666,201, of which the related gross
unrealized appreciation and depreciation were $676,896,899 and $11,230,698,
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, 1997 were $216,385,444 and
$215,674,909, respectively. Option transactions comprised an insignificant
portion of operations during the year ended December 31, 1997. 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, 1997, the Company issued 1,912,711 shares of its stock at a
price of $23.1875 per share (market value) to stockholders of record November
24, 1997 who elected to take stock in payment of the distribution from 1997
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, 1997.
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 1997, 396,175 options were outstanding
with a weighted average exercise price of $14.7782 per share. During 1997, the
Company granted options, including stock appreciation rights, for 7,935
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7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
shares of common stock with an exercise price of $20.25 per share. During the
year stock appreciation rights relating to 74,395 stock option shares were
exercised at a weighted average market price of $21.0351 per share and the stock
options relating to these rights which had a weighted average exercise price of
$13.1028 per share were cancelled. In addition, stock options and stock
appreciation rights relating to 17,597 shares which had a weighted average
exercise price of $16.9381, were cancelled during the year ended December 31,
1997. At December 31, 1997, there were outstanding exercisable options to
purchase 91,493 common shares at $6.4850-$15.7175 per share (weighted average
price of $11.6895), and unexercisable options to purchase 220,625 common shares
at $11.765-$18.820 per share (weighted average price of $14.4699). The weighted
average remaining contractual life of outstanding exercisable and unexercisable
options was 5.9261 years and 6.9105 years, respectively. Total compensation
expense recognized in 1997 related to the stock options and stock appreciation
rights plan was $1,751,085. At December 31, 1997, there were 923,487 shares
available for future option grants.
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,
1997 was $511,605, and consisted of service expense of $178,678, interest
expense of $326,372, expected return on plan assets of $767,345, and a net
amortization credit of $249,310.
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, 1997, the accumulated benefit obligation, including vested
benefits, was $3,567,110. The fair value of the plan assets was $9,715,752 and
the projected benefit obligation for service rendered to date was $4,475,562,
which resulted in excess plan assets of $5,240,190. The remaining components of
prepaid pension cost at January 1, 1997 included $2,029,896 in unrecognized net
gain, $508,900 in unrecognized prior service cost and $623,224 is 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, 1997 was $3,607,575.
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, 1997 for employees and
former employees of the Company was $3,157,637. Aggregate remuneration paid or
accrued during the year ended December 31, 1997 to officers and directors
amounted to $3,247,542.
Research, accounting and other office services provided to and reimbursed by the
Company's non-controlled affiliate, Petroleum & Resources Corporation, amounted
to $475,342 for the year ended December 31, 1997.
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, 1997, the value of security
loans outstanding was $23,525,775.
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8
<PAGE>
THE ADAMS EXPRESS COMPANY
- --------------------------------------------------------------------------------
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 1983-1997. 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.
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
- ----------------------------------------------------------------------
1983 $10,028 $ 528 $ 580 $11,136 $12,005
1984 9,327 1,325 1,035 11,687 12,626
1985 10,869 2,528 1,773 15,170 16,083
1986 10,729 5,600 2,280 18,609 18,983
1987 8,345 6,952 2,375 17,672 18,913
1988 8,275 8,446 2,897 19,618 21,426
1989 8,766 10,802 3,963 23,531 27,635
1990 8,275 11,795 4,651 24,721 28,190
1991 10,659 17,149 6,924 34,732 36,944
1992 11,220 20,187 8,133 39,540 40,489
1993 10,028 20,370 8,016 38,414 42,507
1994 8,766 20,179 7,961 36,906 42,469
1995 10,379 26,641 10,655 47,675 55,045
1996 11,080 31,612 12,687 55,379 66,483
1997 13,569 43,076 16,981 73,626 86,784
[GRAPH APPEARS HERE]
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9
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S><C>
Per Share Operating Performance
Net asset value, beginning of year $23.71 $21.36 $17.98 $19.78 $20.48
- --------------------------------------------------------------------------------------------------------------------
Net investment income 0.43 0.52 0.50 0.51 0.48
Net realized gains and change in unrealized
appreciation and other changes 6.33 3.55 4.54 (0.71) 1.18
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations 6.76 4.07 5.04 (0.20) 1.66
Less distributions
Dividends from net investment income (0.44) (0.52) (0.52) (0.50) (0.45)
Distributions from net realized gains (1.52) (1.20) (1.14) (1.10) (1.18)
- --------------------------------------------------------------------------------------------------------------------
Total distributions (1.96) (1.72) (1.66) (1.60) (1.63)
Dilution resulting from the rights offering -- -- -- -- (0.73)
Net asset value, end of year $28.51 $23.71 $21.36 $17.98 $19.78
====================================================================================================================
Per share market price, end of year $24.1875 $19.75 $18.50 $15.625 $17.875
- --------------------------------------------------------------------------------------------------------------------
Total Investment Return
Based on market price 33.1% 16.4% 29.5% (3.7)% (2.7)%
Ratios/Supplemental Data
Net assets, end of year (in 000's) $1,424,170 $1,138,760 $986,231 $798,298 $840,610
Ratio of expenses to average net assets 0.39% 0.34% 0.46% 0.33% 0.36%
Ratio of net investment income to
average net assets 1.61% 2.30% 2.51% 2.65% 2.33%
Portfolio turnover 17.36% 19.60% 23.98% 19.23% 21.40%
Average brokerage commission rate $0.06 $0.07 -- -- --
Number of shares outstanding at
end of year (in 000's) 49,949 48,037 46,166 44,390 42,498
</TABLE>
-------------
QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shown in thousands of dollars and per common share:
Three Months Ended
-----------------------------------------------------------------------------------
March 31, 1997 June 30, 1997 September 30, 1997 December 31, 1997
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Total investment income $ 6,111 $0.13 $ 6,490 $0.13 $ 6,260 $0.13 $ 6,924 $0.14
Net investment income 4,949 0.10 5,128 0.11 5,061 0.10 5,647 0.12
Net realized gain
and change in
unrealized appreciation 5,266 0.11 185,344 3.86 89,032 1.85 34,784 0.72
<CAPTION>
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
</TABLE>
[LOGO APPEARS HERE]
10
<PAGE>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Stocks and Convertible Securities -- 98.0%
Basic Industries -- 3.1%
Consolidated Papers, Inc. 100,000 $ 5,337,500
du Pont (E.I.) de Nemours & Co. 250,000 15,015,625
Inco Ltd. 5.75% Conv. Debs. due 2004 $4,000,000 3,860,000
Mead Corp. 140,000 3,920,000
Olin Corp. 350,000 16,406,250
------------
44,539,375
------------
Capital Goods-- 9.9%
Boeing Co. 198,400 9,709,200
Caterpillar Inc. 270,000 13,095,000
Deere & Co. 260,000 15,145,000
Dover Corp. 240,000 8,670,000
Emerson Electric Co. 73,000 4,119,937
General Electric Co. 655,000 48,060,625
The BFGoodrich Co. 110,000 4,558,125
Minnesota Mining & Manufacturing Co. 200,000 16,412,500
Pall Corp. 450,000 9,309,375
Rockwell International Corp. 215,000 11,233,750
------------
140,313,512
------------
Consumer -- 16.2%
Consumer Distribution-- 2.7%
American Stores Co. 257,000 5,284,562
Borders Group, Inc. (C) 260,000 8,141,250
Dillard Department Stores, Inc. 200,000 7,050,000
Penney (J.C.) Co., Inc. 200,000 12,062,500
Polo Ralph Lauren Corp. (C) 125,000 3,031,250
Tiffany & Co. 95,000 3,425,938
------------
38,995,500
------------
Consumer Services-- 3.1%
Cracker Barrel Old Country Store, Inc. 350,000 11,681,250+
McDonald's Corp. 315,000 15,041,250
Scandinavian Broadcasting System SA 7.25% Conv. Sub. Debs. due 2005 $3,000,000 3,030,000+
Time Warner Inc. 150,000 9,300,000
USWEST Media Group, Inc. (C) 150,000 4,331,250
------------
43,383,750
------------
</TABLE>
[LOGO APPEARS HERE]
11
<PAGE>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Consumer Staples--10.4%
CPC International Inc. 127,500 $ 13,770,000
Campbell Soup Co. 380,000 22,087,500
Coca-Cola Co. 170,000 11,336,875
Crown Cork & Seal Co., Inc. 4.50% Conv. Pfd. 285,000 13,334,883
Gillette Co. 229,560 23,056,432
Interstate Bakeries Corp. 138,000 5,157,750
Kimberly-Clark Corp. 340,000 16,766,250
PepsiCo, Inc. 320,000 11,600,000
Procter & Gamble Co. 230,000 18,356,875
Ralston Purina 7.00% SAILS due 2000 180,000 12,566,250
------------
148,032,815
------------
Energy -- 8.5%
British Petroleum plc ADR 150,000 11,953,125
Enron Corp. 6.25% Exch. Notes due 1998 411,900 8,495,438
Enron Corp. 100,000 4,156,250
MCN Energy Group Inc. 400,000 16,150,000
Mobil Corp. 120,000 8,662,500
Petroleum & Resources Corporation (D) 1,145,570 41,813,305
Royal Dutch Petroleum Co. 180,000 9,753,750
Schlumberger Ltd. 88,400 7,116,200
Union Pacific Resources Group Inc. 275,102 6,671,224
Unocal Capital Trust $3.125 Conv. Pfd. 111,600 6,270,525+
------------
121,042,317
------------
Financial -- 17.0%
Banking -- 11.8%
Associates First Capital Corp. Ser. A 273,400 19,462,662
Banc One Corp. 300,000 16,293,750
Federal Home Loan Mortgage Corp. 360,000 15,097,500
Investors Financial Services Corp. 274,700 12,636,200+
Mellon Bank Corp. 330,000 20,006,250
National City Corp. 80,000 5,260,000
Norwest Corp. 660,000 25,575,000
Peoples Heritage Financial Group 237,000 10,902,000+
Provident Bankshares Corp. 137,812 8,802,742+
Southwest Bancorp. of Texas, Inc. (C) 175,000 5,446,875
Wachovia Corp. 190,000 15,413,750
Wilmington Trust Corp. 210,000 13,098,750+
------------
167,995,479
------------
Insurance -- 5.2%
AMBAC Financial Group, Inc. 379,600 17,461,600
American International Group, Inc. 270,000 29,362,500
Reinsurance Group of America, Inc. 299,850 12,762,366
Salomon Inc. 7.625% Exch. Notes due 1999 (B) 375,000 15,187,500
------------
74,773,966
------------
</TABLE>
[LOGO APPEARS HERE]
12
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Health Care -- 12.2%
Drugs -- 7.1%
Alza Corp. (C) 500,000 $ 15,906,250
Elan Corp., plc ADR (C) 460,000 23,546,250
Forest Laboratories, Inc. (C) 165,000 8,136,562
Lilly (Eli) &Co. 300,000 20,887,500
Merck & Co., Inc. 140,000 14,840,000
SmithKline Beecham plc ADR 360,000 18,517,500
------------
101,834,062
------------
Medical Supplies and Services -- 5.1%
Abbott Laboratories 240,000 15,720,000
American Retirement Corp. 5.75% Conv. Sub. Debs due 2002 $4,000,000 4,100,000
American Retirement Corp. (C) 151,100 3,022,000
Beckman Instruments, Inc. 80,000 3,200,000
Integrated Health Services, Inc. 5.75% Conv. Sub. Debs. due 2001 $6,675,000 7,075,500
Integrated Health Services, Inc. 6% Conv. Sub. Debs. due 2003 $500,000 530,000
Integrated Health Services, Inc. 165,000 5,145,937
Life Technologies, Inc. 307,500 10,224,375+
MedPartners 6.50% TAPS due 2000 100,000 2,206,250
MedPartners Inc. (C) 273,000 6,108,375
ONCOR, Inc. (C) 900,000 4,162,500
Sunrise Assisted Living, Inc. 250,000 10,781,250
------------
72,276,187
------------
Technology -- 14.9%
Communication Equipment -- 4.1%
Ericsson (L.M.) Telephone Co. 4.25% Conv. Sub. Debs. due 2000 $120,000 630,000+
Ericsson (L.M.) Telephone Co. ADR 440,000 16,417,500+
Lucent Technologies Inc. 64,816 5,177,178
Motorola, Inc. LYONs due 2009 $650,000 679,250
Motorola, Inc. 150,000 8,578,125
Nokia Corp. Pfd. ADR 150,000 10,425,000
Northern Telecom Ltd. 190,000 16,862,500
------------
58,769,553
------------
Computer Related -- 8.2%
Cisco Systems, Inc. (C) 322,500 17,979,375+
Computer Sciences Corp.(C) 136,000 11,356,000
DST Systems Inc. (C) 400,000 17,075,000
First Data Corp. 343,980 10,061,415
Hewlett-Packard Co. 380,000 23,702,500
QuickResponse Services, Inc. (C) 350,000 12,950,000+
Sabre Group Holdings, Inc. (C) 300,000 8,662,500
Sterling Commerce, Inc. (C) 400,000 15,375,000
------------
117,161,790
------------
Electronics -- 2.6%
Intel Corp. 170,000 11,942,500+
Solectron Corp. (C) 600,000 24,937,500
------------
36,880,000
------------
</TABLE>
[LOGO APPEARS HERE]
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Transportation -- 3.8%
Delta Air Lines, Inc. 150,071 $ 17,858,449
Federal Express Corp. (C) 260,000 15,876,250
Illinois Central Corp. 210,000 7,153,125
Ryder System, Inc. 400,000 13,100,000
------------
53,987,824
------------
Utilities -- 12.1%
Electric And Gas Utilities -- 5.7%
Black Hills Corp. 370,000 13,042,500
CINergy Corp. 300,000 11,493,750
Empresa Nacional de Electricidad, S.A. ADR 450,000 8,184,375
LG&E Energy Corp. 400,000 9,925,000
New Century Energy 250,000 11,984,375
TECO Energy, Inc. 300,000 8,437,500
United Water Resources Inc. 500,000 9,781,250
Washington Gas Light Co. 257,000 7,950,938
------------
80,799,688
------------
Telephone Utilities -- 6.4%
AirTouch Communications (C) 200,000 8,312,500
Ameritech Corp. 155,000 12,477,500
BellSouth Corp. 220,000 12,388,750
GTE Corp. 250,000 13,062,500
LCI International, Inc. (C) 460,000 14,145,000
NEXTEL Communications, Inc. (C) 120,000 3,120,000+
SBC Communications Inc. 200,000 14,650,000
WorldCom, Inc. (C) 420,000 12,705,000+
------------
90,861,250
------------
Other -- 0.3%
Stocks under accumulation 4,061,344
------------
Total Stocks and Convertible Securities
(Cost $730,237,973)(E) 1,395,708,412
-------------
</TABLE>
[LOGO APPEARS HERE]
14
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
Prin. Amt. Value (A)
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Short-Term Investments -- 1.9%
U.S. Government Obligations -- 1.0%
U.S. Treasury Bills, 5.14%, due 2/26/98 $15,000,000 $ 14,880,067
-------------
Certificates of Deposit -- 0.4%
Harris Trust & Savings Bank, 5.70%, due 1/29/98 5,000,000 5,000,000
--------------
Commercial Paper -- 0.5%
Chevron USA, 6.10%, due 1/8/98 3,745,000 3,740,558
General Electric Capital Corp., 5.78%, due 1/8/98 3,140,000 3,136,489
--------------
6,877,047
--------------
Total Short-Term Investments
(Cost $26,757,114) 26,757,114
--------------
Total Investments
(Cost $756,995,087) 1,422,465,526
Cash, receivables and other assets, less liabilities 1,704,899
--------------
Net Assets -- 100.0% $1,424,170,425
===================================================================================================================
</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 security (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,
1997 covering open call option contracts written was $23,749,375. In
addition, the required aggregate market value of securities
segregated by the custodian to collateralize open put option
contracts written was $12,037,500.
[LOGO APPEARS HERE]
15
<PAGE>
PRINCIPAL CHANGES IN PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
During the Three Months Ended December 31, 1997
<TABLE>
<CAPTION>
Shares or Principal Amount
- -------------------------------------------------------------------------------------------------------------------
Held
Dec. 31,
Additions Reductions 1997
- -------------------------------------------------------------------------------------------------------------------
<S><C>
Cisco Systems, Inc. 107,500(1) 322,500
Dover Corp. 120,000(1) 240,000
Interstate Bakeries Corp. 69,000(1) 138,000
Lilly (Eli) & Co. 150,000(1) 300,000
Norwest Corp. 330,000(1) 660,000
Tiffany & Co. 95,000 95,000
Cemex, S.A. de C.V. 4.25% Conv. Sub Debs. due 1997 $4,000,000 --
Crown Cork & Seal Co., Inc. 45,000 --
Sabre Group Holdings, Inc. 100,000 300,000
Union Pacific Corp. 130,000 --
</TABLE>
- ---------
(1) By stock split.
-----------------------
Common Stock
Listed on the New York Stock Exchange
and the Pacific Exchange
Transfer Agent, Registrar & Custodian of Securities
The Bank of New York
101 Barclay Street
New York, NY 10286
The Bank's Shareholder Relations Department: (800) 432-8224
E-mail Address: [email protected]
The Company Office Address: Seven St. Paul Street, Suite 1140,
Baltimore, MD 21202
The Company Website Address: www.adams-express.com
The Company E-mail Address: [email protected]
The Company Office Telephone: (410) 752-5900 or (800) 638-2479
Counsel: Chadbourne & Parke L.L.P.
Independent Accountants: Coopers & Lybrand L.L.P.
[LOGO APPEARS HERE]
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,
1997, and the related statement of operations for the year then ended, the
statements 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, 1997, 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, 1997, 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 6, 1998
[LOGO APPEARS HERE]
17
<PAGE>
SHAREHOLDER INFO AND 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
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. 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.
You can also obtain this information by visiting our website located at
"www.adams-express.com".
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.)
Who do I notify of a change of address?
The Transfer Agent.
I'm getting two checks or two statements or two reports. What should I do?
Send the duplicate labels to the 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 the Transfer Agent stating the exact intent of your gift
plans and the Agent will send you the instructions and forms necessary to effect
your transfer.
[LOGO APPEARS HERE]
18
<PAGE>
SHAREHOLDER INFO AND SERVICES (CONTINUED)
- --------------------------------------------------------------------------------
DIVIDEND PAYMENT SCHEDULE
The Company presently pays dividends four times a year, as follows: (a) Three
interim distributions 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.
AUTOMATIC DIVIDEND REINVESTMENT PLAN
For Registered Stockholders
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 enrolling in the Plan, participants 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 address below.
What's new in 1998?
For shareholders whose stock is held by a broker in "street" name, The Bank of
New York's Automatic Dividend Reinvestment Plan is now available through many
registered investment security dealers. If your shares are currently held in a
"street" name or brokerage account, please contact your broker for details about
how you can participate in this Plan.
------------
The Company The Transfer Agent
The Adams Express Company The Bank of New York
Lawrence L. Hooper, Jr., Shareholder Relations Dept.-11E
Secretary and General Counsel P.O. Box 11258
Seven St. Paul Street, Suite 1140 Church Street Station
Baltimore, MD 21202 New York, NY 10286
(800) 638-2479 (800) 432-8224
Website: Website:
www.adams-express.com http://stock.bankofny.com
E-mail: E-mail:
contact @adams-express.com [email protected]
[LOGO APPEARS HERE]
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>
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
1997 1,424,170,425 49,949,239 28.51 .44 1.52
</TABLE>
----------
Stock Data
----------
Price (12/31/97) $24.1875
Net Asset Value (12/31/97) $28.51
Discount: 15.2%
New York Stock Exchange and Pacific 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 [Adams Express Logo Here]
<PAGE>
THE ADAMS EXPRESS COMPANY
- --------------------------------------------------------------------------------
<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
Allan Comrie(1,3) Retired Executive Vice President President
Retired President of Chemical Bank
U.S. & Foreign Richard F. Koloski
Securities Corporation Douglas G. Ober(1) Executive Vice President
Chairman of the Company
Daniel E. Emerson(1,3) Richard B. Tumolo
Retired Executive Vice President Landon Peters(1,3) Vice President -- Research
NYNEX Corporation Private Investor
Simeon F. Wooten, III
Thomas H. Lenagh(2,4) John J. Roberts Vice President -- Research
Financial Advisor Vice Chairman, American
International Group, Inc. Maureen A. Jones
W.D. MacCallan(2,4) Vice President and Treasurer
Retired Chairman of the Company Robert J.M. Wilson(2,4)
and Petroleum & Resources Corpo- Retired President of the Company Lawrence L. Hooper, Jr.
ration and Petroleum & Resources Corpo- Secretary and General Counsel
ration
Dana M. Cannon
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
[Adams Express Logo Here]
<PAGE>
THE ADAMS EXPRESS COMPANY
Seven St. Paul Street, Suite 1140
Baltimore, MD 21202
(410) 752-5900 or (800) 638-2479
Contact us on the Web at:
www.adams-express.com
[ADX/NYSE Logo Here]
[recycled logo] Printed on Recycled Paper
