<PAGE>
[ADAMS
EXPRESS
COMPANY
LOGO]
Annual Report
1999
building for the future
with solid investments/r/
<PAGE>
1999 AT A GLANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE COMPANY STOCK DATA
<S> <C>
o a closed-end equity investment company NYSE Symbol ................................ADX
o objectives: preservation of capital Market Price as of 12/31/99............$33 9/16
reasonable income Discount..................................16.7%
opportunity for capital gain 52-Week Range...............$33 15/16 - $25 3/4
o internally-managed Shares Outstanding...................53,894,827
o low expense ratio
o low turnover
</TABLE>
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Year Ended December 31
1999 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value per share $ 40.28 $ 32.54
Total net assets 2,170,801,875 1,688,080,336
Unrealized appreciation 1,298,662,686 879,139,734
Net investment income 19,143,783 22,579,513
Total realized gain 106,820,166 82,933,498
Total return (based on market value) 36.1% 19.3%
Total return (based on net asset value) 33.6% 23.7%
Expense ratio 0.32% 0.22%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
1999 DIVIDENDS AND DISTRIBUTIONS
<TABLE>
<CAPTION>
Amount
Paid (per share) Type
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
March 1, 1999 $0.06 Long-term capital gain
March 1, 1999 0.06 Investment income
June 1, 1999 0.12 Investment income
September 1, 1999 0.12 Investment income
December 27, 1999 1.97 Long-term capital gain
December 27, 1999 0.03 Short-term capital gain
December 27, 1999 0.09 Investment income
- ---------------------------------------------------------------------------------------------------------------
$2.45
===============================================================================================================
</TABLE>
2000 ANNUAL MEETING OF STOCKHOLDERS
Location: The Colony Hotel, Palm Beach, Florida
Date: March 28, 2000
Time: 11 a.m.
Holders of Record: February 14, 2000
<PAGE>
PORTFOLIO REVIEW
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TEN LARGEST PORTFOLIO HOLDINGS (12/31/99)
Market Value % of Net Assets
------------ ---------------
General Electric Co. $101,361,251 4.7
Cisco Systems, Inc. 98,287,187 4.5
Solectron Corp. 95,125,000 4.4
Nokia Corp. ADR 92,150,000 4.2
Sapient Corp. 80,334,375 3.7
Nortel Networks Corp. 76,760,000 3.5
Nextel Communications, Inc. 61,875,000 2.9
Corning Inc. 59,311,250 2.7
American International Group, Inc. 54,738,282 2.5
QRS Corp. 52,762,501 2.4
------------ ----
Total $772,704,846 35.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS (12/31/99)
[BAR GRAPH APPEARS HERE -- SEE PERCENTAGES BELOW]
Basic Materials 2.4%
Capital Goods 9.3%
Communication Services 13.9%
Consumer 8.1%
Energy 5.4%
Financial 11.9%
Health Care 8.4%
Technology 34.9%
Transportation .6%
Utilities 3.4%
Cash & Equivalent 1.8%
- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO STOCKHOLDERS
- --------------------------------------------------------------------------------
Your Company provided an outstanding return from its investments in 1999. In
this annual report, you will find our financial statements for the year, the
report of independent accountants, our year-end portfolio holdings, and summary
financial information for the Company.
THE YEAR IN REVIEW
The first quarter of 1999 was marked by moderate swings in the market, as
corporate earnings reports for the end of 1998 were mixed and there were no
strong signals of economic direction. The release of first quarter G.D.P.
figures in April indicated that the domestic economy was not slowing down and
the rest of the world was showing signs of improvement. This was especially true
in Southeast Asia, which had been a drag from both an economic and a financial
standpoint in 1998. By mid-year, the Company's portfolio had generated a return
of 10.3%, while the Standard & Poor's 500 Stock Index had returned 12.4%. The
market, very "narrow" at the start of the year, with only a few stocks
contributing to its performance, widened in the second quarter to reflect a
better outlook for most sectors of the economy. Economic growth estimates were
raised and increased corporate earnings estimates followed. Despite growth in
the economy of nearly 4%, there were no signs of acceleration in wage or price
inflation, as increases in wages appeared to be completely offset by higher
productivity. The Federal Reserve Board raised short-term interest rates in June
to help slow the economy's pace and control the rate of inflation.
The July announcement of slower second quarter economic growth was ignored as
attention was focussed on indications of a pick-up in general activity in the
third quarter. Fears of interest rate increases, followed by further action by
the Federal Reserve, forced investors to take a long, hard look at valuations in
the market, resulting in three months of declines in the S&P 500. The economy,
however, was not to be deterred and continued to grow apace, fueled by strong
consumer spending and the final corporate push to eliminate any possibility of
Year 2000 computer problems. The indicators of inflation were virtually
unchanged, leading investors to believe the Fed had done its job and rates would
not be pushed up further. The stocks of technology and communications companies
led the markets in the fourth quarter to new all-time highs. Outperformance was
restricted almost exclusively to large-capitalization growth stocks, as
evidenced by the fact that 30% of all New York Stock Exchange stocks and 31% of
NASDAQ stocks were down 20% or more for the year.
The Adams Express portfolio, comprised principally of large-capitalization
companies with superior long term growth prospects, recorded exceptional
performance in 1999. Our technology and communication services holdings did very
well, especially companies such as Nortel Networks, Nextel, and QRS, which have
been in the portfolio for a number of years, and Sapient, Global Crossing, and
Oracle, which were new to the portfolio this year. The outperformance by these
sectors, as well as basic materials, capital goods, and consumer cyclical
holdings, was partially offset by our healthcare, financial, and consumer staple
stocks. It should be noted, however, that there were individual names in each
underperforming sector which did very well, including Chiron, American
International Group, and MediaOne Group, all long term holdings.
For the year ending December 31, 1999, the return on net assets of the Company,
including income and capital gains distributions, was 33.6%, compared to a
return of 27.2% for the Dow Jones Industrials and 21.0% for the Standard &
Poor's 500. Based on market prices, the Adams Express Company's return was 36.1%
aided by the narrowing of the discount of the market price to the net asset
value per share from 18.2% at the beginning of the year to 16.7% at year-end.
INVESTMENT RESULTS
At the end of 1999 our net assets were $2,170,801,875 or $40.28 per share on
53,894,827 shares outstanding as compared with $1,688,080,336 or $32.54 per
share on 51,876,651 shares outstanding a year earlier. The year-end asset figure
represented the first quarter-end at which the Company's net assets exceeded the
$2 billion mark in its seventy years as a closed-end fund.
Net investment income for 1999 was $19,143,783 compared to $22,579,513 for 1998.
These earnings are equal to $0.37 and $0.45 per share, respectively, on the
average number of shares outstanding throughout the year. It has been
increasingly difficult to generate income in the portfolio as both the
percentage of stocks paying dividends and the percentage of dividend increases
have declined markedly in the past several years. The dividend yield on the
Standard & Poor's 500 has fallen from 3.76% in 1990 to 1.16% in 1999. We
continue to seek ways to generate additional income without impacting
performance through the use of convertible securities and other actions. In
1999, our 0.32% expense ratio (expenses to net assets) was once again at a very
low level compared to the industry.
Net realized gains amounted to $106,820,166 during the year, while the
unrealized appreciation on investments increased from $879,139,734 at December
31, 1998 to $1,298,662,686 at year end.
DIVIDENDS AND DISTRIBUTIONS
As announced on November 11, 1999, a year-end distribution consisting of
investment income of $0.09 and capital gains of $2.00 was made on December 27,
1999, both realized and taxable in 1999. On January 13, 2000, an additional
distribution of $0.12 per share was declared payable March 1, 2000, representing
the balance of undistributed capital gains earned during 1999 and an initial
distribution from 2000 net investment income, all taxable to shareholders in
2000.
OUTLOOK FOR 2000
We have expressed the opinion for some time that economic growth would slow in
the U.S. to the 2% range. While not succumbing to the "new economy" arguments
2
<PAGE>
LETTER TO STOCKHOLDERS (CONTINUED)
- --------------------------------------------------------------------------------
espoused by many, our belief now is that demand both here and abroad will be
strong enough to drive the economy at about a 3.5% growth rate this year. There
appears to be sufficient productive capacity in place around the world to meet
demand without causing notable price increases. In fact, overall corporate
profits have grown only modestly in the past several years since the
availability of capacity worldwide has resulted in very little pricing power for
corporations except large technology companies whose profits have fueled the
growth of the S&P 500's earnings. This situation is expected to continue in
2000, with further divergence between the growth rates of profitability of the
companies in the S&P Index and corporations in general.
The rate increases implemented by the Federal Reserve in 1999 and those expected
in the early part of this year should begin to be felt by the economy in the
next several quarters. We anticipate that, with a modest slowing in growth,
inflation will remain at a very low level throughout the year. The only serious
concern we have is the tightness of the labor supply. General demographic trends
are keeping the labor force from growing to meet the needs of the economy; the
unemployment rate is the lowest it has been in decades. Continued tightness will
necessarily exert upward pressure on wages as there are more jobs than people to
fill them. The trend in productivity has precluded this from happening to date,
but it is unlikely to continue to do so indefinitely. By raising interest rates
to slow the growth rate of the economy, the Federal Reserve intends to keep
wages under control.
With these factors in mind, we must consider the appropriateness of the
valuations currently in the stock market. Since the beginning of 2000, investors
have rapidly shifted money out of the favorite technology stocks of 1999 and
into more prosaic industries such as consumer goods and energy. The highest
flying stocks, many related to the Internet, have corrected by 10% or more, but
still carry incredible prices relative to the normal measures of valuation.
Meanwhile, the rest of the market has begun to perform a bit better as defensive
investments have been sought. We expect that these trends will continue as
slower growth will have the most impact on those companies which have been
perceived as super-growth stories. Our technology holdings are feeling the
effects of the current sector rotation, but they only represent about a third of
the portfolio and the bulk of the companies continue to report excellent growth
and profits. We have benefited, and will continue to do so, from the rotation
into more defensive stocks which comprise the majority of our portfolio. We
believe that all of the companies we hold have excellent long term fundamentals
and should therefore do well in a period of more moderate economic growth.
SHARE REPURCHASE PROGRAM
On November 11, 1999, the Board of Directors authorized the management to
repurchase up to 5% of the outstanding shares of the Company (approximately
2,600,000 shares) over the ensuing twelve months, as long as the discount of the
market price of the shares from the net asset value is greater than 10%. It was
felt that, by so doing, the growth in the number of shares outstanding would
slow, the net asset value per share would increase, and the dilution caused by
the issuance of shares in lieu of cash for the year-end capital gain
distribution would diminish. In addition, the liquidity of the Company's shares
in the marketplace should increase and the discount to net asset value could
decrease. This program is expected to benefit all the shareholders of the
Company.
As of January 13, 2000, a total of 236,200 shares have been repurchased at a
total cost of $7,835,559 and a weighted average discount from net asset value of
14.5%. The Company was restricted from buying shares until late in December,
1999.
YEAR 2000 READINESS DISCLOSURE
The countdown is over for Year 2000, and we have entered into the new century
unscathed. We are pleased to report there were no system failures, either in-
house or reported by any of our critical vendors or portfolio companies. The
Company incurred no significant costs relating to the Year 2000 issue.
----------------
The Company included in its Third Quarter Report to Shareholders a postcard
inviting shareholders to send us the names of investors who might be interested
in learning more about the Company. We have received a good response to this
initiative, with over 320 cards returned and information packages mailed out to
prospective holders. It is our intention to repeat the insertion in our First
Quarter Report and periodic future mailings. Please feel free to provide us with
names and addresses at any time, either by mail, telephone, or through our soon
to be updated website at www.adamsexpress.com.
----------------
Mr. Allan Comrie resigned from the Board of Directors as of December 31, 1999.
Mr. Comrie, a director since 1987, shared his extensive investment knowledge
with the Board as former President and Chief Executive Officer of U.S. & Foreign
Securities Corp. We have been enriched by his participation on the Board and
wish him all the best in the future.
The proxy statement for the Annual Meeting of Stockholders to be held in Palm
Beach, Florida on March 28, 2000, will be mailed on or about February 17, 2000
to holders of record on February 14, 2000.
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 21, 2000
3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<S> <C> <C>
ASSETS
Investments* at value:
Common stocks and convertible securities
(cost $807,754,279) $2,094,613,981
Non-controlled affiliate, Petroleum & Resources Corporation
(cost $24,134,839) 39,025,241
Short-term investments (cost $39,771,245) 39,771,245 $2,173,410,467
- -------------------------------------------------------------------------------------------------
Cash 114,174
Securities lending collateral 352,176,117
Dividends and interest receivable 1,422,060
Prepaid expenses and other assets 5,853,498
- ------------------------------------------------------------------------------------------------------------------
Total Assets 2,532,976,316
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES
Open written option contracts at value (proceeds $554,463) 3,641,881
Obligations to return securities lending collateral 352,176,117
Accrued expenses and other liabilities 6,356,443
- ------------------------------------------------------------------------------------------------------------------
Total Liabilities 362,174,441
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS $2,170,801,875
==================================================================================================================
NET ASSETS
Common Stock at par value $1.00 per share, authorized 75,000,000 shares;
issued and outstanding 53,894,827 shares $ 53,894,827
Additional capital surplus 813,826,173
Undistributed net investment income 502,423
Undistributed net realized gain on investments 3,915,766
Unrealized appreciation on investments 1,298,662,686
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON STOCK $2,170,801,875
==================================================================================================================
NET ASSET VALUE PER SHARE OF COMMON STOCK $40.28
==================================================================================================================
</TABLE>
*See schedule of investments on pages 11 through 14.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
Year Ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Income:
Dividends:
From unaffiliated issuers $ 17,536,183
From non-controlled affiliate 950,823
Interest 6,334,316
- ----------------------------------------------------------------------------------
Total income 24,821,322
- ----------------------------------------------------------------------------------
Expenses:
Investment research 2,821,877
Administration and operations 1,199,107
Directors' fees 186,500
Reports and stockholder communications 327,186
Transfer agent, registrar and custodian expenses 357,976
Auditing services 54,663
Legal services 44,654
Occupancy and other office expenses 310,182
Travel, telephone and postage 130,671
Other 244,723
- ----------------------------------------------------------------------------------
Total expenses 5,677,539
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME 19,143,783
- ----------------------------------------------------------------------------------
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS
Net realized gain on security transactions 105,101,811
Net realized gain distributed by regulated investment company
(non-controlled affiliate) 1,718,355
Change in unrealized appreciation on investments 419,522,952
- ----------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 526,343,118
- ----------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $545,486,901
==================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
-------------------------------
Dec. 31, 1999 Dec. 31,1998
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 19,143,783 $ 22,579,513
Net realized gain on investments 106,820,166 82,933,498
Change in unrealized appreciation on investments 419,522,952 213,960,698
- ------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations 545,486,901 319,473,709
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO STOCKHOLDERS FROM:
Net investment income (20,231,884) (22,477,158)
Net realized gain from investment transactions (106,865,901) (82,416,244)
- ------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions (127,097,785) (104,893,402)
- ------------------------------------------------------------------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS:
Value of common shares issued in payment of optional distributions 65,780,453 49,329,604
Cost of common shares purchased (note 4) (1,448,030) --
- ------------------------------------------------------------------------------------------------------------------
Change in net assets from capital share transactions 64,332,423 49,329,604
- ------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 482,721,539 263,909,911
NET ASSETS:
Beginning of year 1,688,080,336 1,424,170,425
- ------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $502,423 and $1,924,176, respectively) $2,170,801,875 $1,688,080,336
==================================================================================================================
</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. Written options are valued at the 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, 1999 was $874,815,079, and net
unrealized appreciation aggregated $1,299,149,851, of which the related gross
unrealized appreciation and depreciation were $1,352,706,185 and $53,556,334,
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, 1999 were $301,435,159 and
$350,243,557, respectively. The Company, as writer of an option, bears the
market risk of an unfavorable change in the price of the security underlying the
written option. Option transactions comprised an insignificant portion of
operations during the year ended December 31, 1999. 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, 1999, the Company issued 2,061,676 shares of its stock at a
price of $31.9063 per share (market value) to stockholders of record November
22, 1999 who elected to take stock in payment of the distribution from 1999
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. During 1999,
the Company purchased and is holding 43,500 shares of common stock at a total
cost of $1,448,030 and a weighted average discount from net asset value of
16.2%.
The Company has 10,000,000 authorized and 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
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
years. At the beginning of 1999, 254,301 options were outstanding with a
weighted average exercise price of $13.2803 per share. During 1999, the Company
granted options, including stock appreciation rights, for 25,859 shares of
common stock with an exercise price of $26.294 per share. During the year stock
appreciation rights relating to 27,110 stock option shares were exercised at a
weighted average market price of $27.7618 per share and the stock options
relating to these rights which had a weighted average exercise price of $12.9101
per share were cancelled. At December 31, 1999, there were outstanding
exercisable options to purchase 80,281 common shares at $6.740-$21.665 per share
(weighted average price of $9.6686), and unexercisable options to purchase
172,769 common shares at $8.0550-$24.2525 per share (weighted average price of
$13.9439). The weighted average remaining contractual life of outstanding
exercisable and unexercisable options was 4.4242 years and 6.0782 years,
respectively. Total compensation expense recognized in 1999 related to the stock
options and stock appreciation rights plan was $1,878,397. At December 31, 1999,
there were 906,221 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,
1999 was $539,884, and consisted of service expense of $188,540, interest
expense of $297,079, expected return on plan assets of $854,061, and net
amortization credit of $171,442.
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, 1999, the projected benefit obligation for service rendered to
date was $4,501,469. During 1999, the projected benefit obligation increased due
to service cost and interest cost of $188,540 and $297,079 respectively, and
decreased due to benefits paid in the amount of $200,583. The projected benefit
obligation at December 31, 1999 was $4,786,505.
On January 1, 1999, the fair value of plan assets was $10,776,045. During 1999,
the fair value of plan assets increased due to the expected return on plan
assets of $854,061 and decreased due to benefits paid in the amount of $200,583.
At December 31, 1999, the projected fair value of plan assets amounted to
$11,429,523, which resulted in excess plan assets of $6,643,018. The remaining
components of prepaid pension cost on December 31, 1999 included $1,854,196 in
unrecognized gain, $653,618 in unrecognized prior service cost and $191,844 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, 1999 was $5,250,596.
In addition, the Company has a nonqualified 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, 1999 for employees and
former employees of the Company was $5,320,779. Aggregate remuneration paid or
accrued during the year ended December 31, 1999 to officers and directors
amounted to $3,440,178.
Research, accounting and other office services provided to and reimbursed by the
Company's non-controlled affiliate, Petroleum & Resources Corporation, amounted
to $391,126 for the year ended December 31, 1999.
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 Company accounts for
securities lending transactions as secured financing and receives compensation
in the form of fees or retains a portion of interest on the investment of any
cash received as collateral. The Company also continues to receive interest or
dividends on the securities loaned. The loans are secured by collateral of at
least 102%, at all times, of the fair value of the securities loaned plus
accrued interest. Gain or loss in the fair value of the securities loaned that
may occur during the term of the loan will be for the account of the Company. At
December 31, 1999, the Company had securities on loan of $344,850,318 and held
collateral of $352,176,117.
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
- --------------------------------------------------------------------
1985 $11,354 $ 820 $ 478 $12,652 $ 13,413
1986 11,207 3,373 911 15,491 15,803
1987 8,717 4,779 1,216 14,712 15,745
1988 8,644 6,020 1,650 16,314 17,818
1989 9,156 7,906 2,485 19,547 22,956
1990 8,644 8,775 3,084 20,503 23,380
1991 11,134 12,911 4,721 28,766 30,598
1992 11,720 15,365 5,655 32,740 33,526
1993 10,475 15,647 5,678 31,800 35,189
1994 9,156 15,639 5,736 30,531 35,133
1995 10,841 20,793 7,808 39,442 45,540
1996 11,574 24,811 9,416 45,801 54,983
1997 14,174 33,972 12,710 60,856 71,731
1998 15,602 41,764 15,107 72,473 88,574
1999 19,668 58,629 20,209 98,506 118,222
- --------------------------------------------------------------------
ILLUSTRATION OF AN ASSUMED 15 YEAR
INVESTMENT OF $10,000 (UNAUDITED)
Investment income dividends and capital gains distributions are taken in
additional shares. This chart covers the years 1985-1999. 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.
[MOUNTAIN GRAPH APPEARS HERE -- SEE PLOT POINTS BELOW]
Cumulative Market Value
Market Value of Shares from Capital Net Asset
of Original Gains Distribution Total Value of
Investment and Income Dividend Market Value Total Shares
10,000 10,000 10,000 10,000
85 11,354 12,174 12,652 13,413
86 11,207 14,580 15,491 15,803
87 8,717 13,496 14,712 15,745
88 8,644 14,664 16,314 17,818
89 9,156 17,062 19,547 22,956
90 8,644 17,419 20,503 23,380
91 11,134 24,045 28,766 30,598
92 11,720 27,085 32,740 33,526
93 10,475 26,122 31,800 35,189
94 9,156 24,795 30,531 35,133
95 10,841 31,634 39,442 45,540
96 11,574 36,385 45,801 54,983
97 14,174 48,146 60,856 71,731
98 15,602 57,366 72,473 88,574
99 19,668 78,297 98,506 118,222
Net Asset Value of Total Shares
Total Market Value
Initial Net Asset Value
$10,525
9
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $32.54 $28.51 $23.71 $21.36 $17.98
- --------------------------------------------------------------------------------------------------------------------
Net investment income 0.37 0.45 0.43 0.52 0.50
Net realized gains and change
in unrealized appreciation and
other changes 9.82 5.68 6.33 3.55 4.54
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations 10.19 6.13 6.76 4.07 5.04
- --------------------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income (0.39) (0.45) (0.44) (0.52) (0.52)
Distributions from net realized gains (2.06) (1.65) (1.52) (1.20) (1.14)
- --------------------------------------------------------------------------------------------------------------------
Total distributions (2.45) (2.10) (1.96) (1.72) (1.66)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $40.28 $32.54 $28.51 $23.71 $21.36
====================================================================================================================
Per share market price, end of year $33.5625 $26.625 $24.1875 $19.75 $18.50
- --------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN
Based on market price 36.1% 19.3% 33.1% 16.4% 29.5%
Based on net asset value 33.6% 23.7% 30.7% 21.0% 29.9%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000's) $2,170,802 $1,688,080 $1,424,170 $1,138,760 $986,231
Ratio of expenses to average net assets 0.32% 0.22% 0.39% 0.34% 0.46%
Ratio of net investment income to
average net assets 1.06% 1.48% 1.61% 2.30% 2.51%
Portfolio turnover 15.94% 22.65% 17.36% 19.60% 23.98%
Number of shares outstanding at
end of year (in 000's) 53,895 51,877 49,949 48,037 46,166
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stocks and Convertible Securities-- 98.3%
BASIC MATERIALS-- 2.4%
Avery Dennison Corp. ................................................... 227,200 $ 16,557,200
Consolidated Papers, Inc. .............................................. 410,000 13,043,125
Engelhard Corp. ........................................................ 320,000 6,040,000
Mead Corp. ............................................................. 400,000 17,375,000
------------
53,015,325
------------
CAPITAL GOODS-- 9.3%
Black & Decker Corp. ................................................... 300,000 15,675,000
Corning Inc. ........................................................... 460,000 59,311,250
Dover Corp. ............................................................ 260,000 11,797,500
General Electric Co. ................................................... 655,000 101,361,251
Pall Corp. ............................................................. 600,000 12,937,500
------------
201,082,501
------------
COMMUNICATION SERVICES-- 13.9%
Telecommunications-- Cellular and Wireless-- 3.9%
MediaOne Group, Inc. 6.25% PIES due 2001 ............................... 85,000 9,180,000
Nextel Communications Inc. (B).......................................... 600,000 61,875,000
Vodafone AirTouch plc ADS............................................... 287,500 14,231,250
------------
85,286,250
------------
Telecommunications-- Long Distance-- 3.8%
MCI WorldCom, Inc. (B).................................................. 615,000 32,633,438
Qwest Communications International, Inc. 5.75% TRENDSPfd. due 2003 (C).. 125,000 8,843,750
Qwest Communications International, Inc. (B)............................ 792,012 34,056,516
Williams Communications Group, Inc. (B)................................. 220,000 6,366,250
------------
81,899,954
------------
Telephone-- 6.2%
BellSouth Corp. ........................................................ 440,000 20,597,500
Global Crossing Ltd. (B)................................................ 922,500 46,125,000
RCN Corp. (B)........................................................... 172,500 8,366,250
SBC Communications, Inc. ............................................... 787,960 38,413,050
Time Warner Telecom Inc. (B)............................................ 404,500 20,199,719
------------
133,701,519
------------
CONSUMER-- 8.1%
Consumer Cyclical-- 1.3%
Delphi Automotive, Inc. ................................................ 690,000 10,867,500
Tiffany & Co. .......................................................... 200,000 17,850,000
------------
28,717,500
------------
Consumer Staples-- 6.8%
Coca-Cola Co. .......................................................... 170,000 9,902,500
Dean Foods Co. ......................................................... 300,000 11,925,000
Fort James Corp. ....................................................... 500,000 13,687,500
Gillette Co. ........................................................... 439,120 18,086,255
Houston Industries Inc. 7.00% Conv. DECS due 2000....................... 150,000 18,075,000
Interstate Bakeries Corp. .............................................. 138,000 2,501,250
Ivex Packaging Corp. (B)................................................ 900,000 9,000,000
McDonald's Corp. ....................................................... 560,000 22,575,000
MediaOne Group, Inc. (B)................................................ 150,000 11,521,875
Owens-Illinois, Inc. (B)................................................ 535,000 13,408,438
PepsiCo, Inc. .......................................................... 295,000 10,398,750
Ralston Purina 7.00% SAILS due 2000..................................... 180,000 6,581,250
------------
147,662,818
------------
</TABLE>
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY-- 5.4%
BP Amoco plc ADR........................................................ 300,000 $ 17,793,751
Enron Corp. ............................................................ 500,000 22,187,500
Exxon Mobil Corp. ...................................................... 158,418 12,762,550
Petroleum & Resources Corporation (D)................................... 1,210,085 39,025,241
Royal Dutch Petroleum Co. .............................................. 80,000 4,845,000
Schlumberger Ltd. ...................................................... 88,400 4,972,500
Transocean Sedco Forex, Inc. ........................................... 17,114 576,528
Williams Companies, Inc. ............................................... 500,000 15,281,250
------------
117,444,320
------------
FINANCIAL-- 11.9%
Banking-- 6.9%
Associates First Capital Corp. Ser. A.................................. 546,800 15,002,825
Banc One Corp. ......................................................... 330,000 10,560,000
Federal Home Loan Mortgage Corp. ....................................... 360,000 16,942,500
Greenpoint Financial Corp. ............................................. 435,000 10,358,437
Investors Financial Services Corp. ..................................... 450,000 20,700,000
Mellon Bank Corp. ...................................................... 420,000 14,306,250
National City Corp. .................................................... 160,000 3,790,000
Peoples Heritage Financial Group ....................................... 474,000 7,139,625
Provident Bankshares Corp. ............................................. 303,875 5,260,844
Wachovia Corp. ......................................................... 190,000 12,920,000
Wells Fargo & Co. ...................................................... 550,000 22,240,625
Wilmington Trust Corp. ................................................. 210,000 10,132,500
------------
149,353,606
------------
Insurance-- 5.0%
AMBAC Financial Group, Inc. ............................................ 379,600 19,810,375
American International Group, Inc. ..................................... 506,250 54,738,282
Annuity & Life Re (Holdings), Ltd. ..................................... 700,000 18,287,500
Financial Security Assurance Holdings Ltd. ............................. 307,387 16,022,547
------------
108,858,704
------------
HEALTH CARE-- 8.4%
Abbott Laboratories..................................................... 255,000 9,259,688
ALZA Corp. (B).......................................................... 340,000 11,772,500
American Home Products Corp. ........................................... 425,000 16,681,250
Baxter International ................................................... 255,000 16,017,187
Chiron Corp. (B)........................................................ 550,000 23,306,250
Elan Corp., plc ADR (B)................................................. 870,000 25,665,000
Lilly (Eli) & Co. ...................................................... 290,000 19,285,000
Johnson & Johnson....................................................... 110,000 10,257,500
Merck & Co., Inc. ...................................................... 300,000 20,156,250
Pharmacia & Upjohn Inc. ................................................ 310,000 13,950,000
SmithKline Beecham plc ADR.............................................. 260,000 16,672,500
------------
183,023,125
------------
</TABLE>
12
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-- 34.9%
Communication Equipment-- 13.0%
Ericsson (L.M.) Telephone Co. 4.25% Conv. Sub. Debs. due 2000........... 120,000 $ 2,250,000
Ericsson (L.M.) Telephone Co. ADR....................................... 750,000 49,265,625
Lucent Technologies Inc. ............................................... 508,920 38,073,578
Motorola, Inc. ......................................................... 161,874 23,835,946
Nokia Corp. ADR......................................................... 485,000 92,150,000
Nortel Networks Corp. .................................................. 760,000 76,760,000
--------------
282,335,149
--------------
Computer Related-- 16.2%
BMC Software Inc. (B)................................................... 275,000 21,982,812
Cisco Systems, Inc. (B)................................................. 917,500 98,287,187
DST Systems Inc. (B).................................................... 70,000 5,341,875
First Data Corp. ....................................................... 343,980 16,962,514
Hewlett-Packard Co. .................................................... 200,000 22,750,000
Oracle Corp. (B)........................................................ 295,000 33,058,437
QRS Corp. (B)........................................................... 502,500 52,762,501
Sapient Corp. (B)....................................................... 570,000 80,334,375
Sterling Commerce, Inc. (B)............................................. 575,000 19,550,000
--------------
351,029,701
--------------
Electronics-- 5.7%
Intel Corp. ............................................................ 340,000 27,986,250
Solectron Corp. (B)..................................................... 1,000,000 95,125,000
--------------
123,111,250
--------------
TRANSPORTATION-- 0.6%
Canadian National Railway Co. 5.25% Conv. Pfd. QUIDS due 2029........... 15,000 630,000
Canadian National Railway Co. .......................................... 60,000 1,590,000
Ryder System, Inc. ..................................................... 445,000 10,874,687
--------------
13,094,687
--------------
UTILITIES-- 3.4%
Black Hills Corp. ...................................................... 555,000 12,314,063
Calpine Capital Trust 5.75% Conv. Pfd. High Tides....................... 125,000 8,140,625
Calpine Corp. (B)....................................................... 35,000 2,240,000
CINergy Corp. .......................................................... 300,000 7,181,250
ENDESA, S.A. ADR........................................................ 350,000 7,065,625
Northwestern Corp. ..................................................... 500,000 11,000,000
TECO Energy, Inc. ...................................................... 300,000 5,568,750
United Water Resources Inc. ............................................ 600,000 20,512,500
--------------
74,022,813
--------------
TOTAL STOCKS AND CONVERTIBLE SECURITIES
(Cost $831,889,118)(E).................................................. 2,133,639,222
--------------
</TABLE>
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
- -------------------------------------------------------------------------------
December 31, 1999
<TABLE>
<CAPTION>
Prin. Amt.
or Shares Value (A)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS-- 1.8%
U.S. Government Obligations-- 0.5%
U.S. Treasury Bills, 4.90-5.10%, due 2/24/00............................ $12,000,000 $ 11,908,740
--------------
Certificates of Deposit-- 0.5%
SouthTrust Bank of Alabama, 6.00%, due 1/27/00.......................... $10,000,000 10,000,000
--------------
Commercial Paper-- 0.8%
Chevron USA, 6.35%, due 1/13/00......................................... $2,050,000 2,045,661
Ford Motor Credit Corp., 5.25-6.01%, due 1/4/00-2/17/00................. $7,505,000 7,477,395
General Electric Capital Corp., 6.55-6.60%, due 1/11/00-1/12/00......... $8,355,000 8,339,449
--------------
17,862,505
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $39,771,245)...................................................... 39,771,245
--------------
TOTAL INVESTMENTS
(Cost $871,660,363)..................................................... 2,173,410,467
Cash, receivables and other assets, less liabilities................. (2,608,592)
--------------
NET ASSETS-- 100.0%........................................................ $2,170,801,875
===================================================================================================================
</TABLE>
Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ, except
restricted securities.
(B) Presently non-dividend paying.
(C) Restricted security Qwest Communications International, Inc. 5.75% TRENDS
Pfd. due 2003, acquired 12/4/98, cost $5,218,750).
(D) Non-controlled affiliate and is a registered investment company.
(E) The aggregate market value of stocks held in escrow at December 31, 1999
covering open call option contracts written was $16,514,294. In addition,
the required aggregate market value of securities segregated by the
custodian to collateralize open put option contracts written was $5,225,313.
14
<PAGE>
PRINCIPAL CHANGES IN PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
During the Three Months Ended December 31, 1999
(unaudited)
<TABLE>
<CAPTION>
Shares or Principal Amount
------------------------------------------------
Held
Additions Reductions Dec. 31, 1999
----------- ------------- ---------------
<S> <C> <C> <C>
BMC Software Inc. ........................................... 275,000 275,000
BP Amoco plc ADR............................................. 150,000(1) 300,000
Calpine Corp. ............................................... 35,000 35,000
Calpine Capital Trust, 5.75% Conv. Pfd. High Tides........... 125,000 125,000
Exxon Mobil Corp. ........................................... 158,418(2) 158,418
Ivex Packaging Corp. ........................................ 300,000 900,000
Johnson & Johnson............................................ 110,000 110,000
Lucent Technologies Inc. .................................... 338,920(3) 508,920
MCI WorldCom Inc. ........................................... 205,000(1) 615,000
RCN Corp. ................................................... 167,500 172,500(4)
SBC Communications, Inc. .................................... 407,960(5) 787,960
Sapient Corp. ............................................... 285,000(6) 570,000
Vodafone AirTouch plc ADS.................................... 230,000(1) 287,500
Williams Communications...................................... 220,000 220,000
Abbott Laboratories ......................................... 175,000 255,000
Albertson's Inc. ............................................ 308,700 --
American Retirement Corp., 5.75% Conv. Sub Debs due 2002..... $4,000,000 --
Ameritech Corp. ............................................. 310,000(5) --
CBRL Group, Inc. ............................................ 340,000 --
DST Systems Inc. ............................................ 249,000 70,000
Fort James Corp. ............................................ 75,000 500,000
International Network Services............................... 400,000(3) --
Mobil Corp. ................................................. 120,000(2) --
Royal Dutch Petroleum Co. ................................... 100,000 80,000
Ryder System, Inc. .......................................... 155,000 445,000
Polo Ralph Lauren Corp. ..................................... 135,000 --
Sunrise Assisted Living, Inc. ............................... 440,000 --
</TABLE>
- -------
(1) By stock split.
(2) Merger of Exxon and Mobil. Received 1.32015 shares of Exxon Mobil Corp. for
1 share of Mobil held.
(3) Received .8473 shares of Lucent Technologies Inc. for each share of
International Network Services held.
(4) Includes shares previously listed under "Stocks under accumulation" in the
Schedule of Investments.
(5) Received 1.316 shares of SBC Communications, Inc. for each share of
Ameritech Corp. held.
(6) By stock split and purchased additional 15,000 shares.
---------------------
COMMON STOCK
Listed on the New York Stock Exchange
and the Pacific Exchange
THE ADAMS EXPRESS COMPANY
Seven St. Paul Street, Suite 1140, Baltimore, MD 21202
Website: www.adamsexpress.com
E-mail: [email protected]
Telephone: (410) 752-5900 or (800) 638-2479
Counsel: Chadbourne & Parke L.L.P.
Independent Accountants: PricewaterhouseCoopers LLP
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: [email protected]
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Board of Directors and Stockholders of
The Adams Express Company:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statement of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Adams Express Company,
hereafter referred to as the "Company", at December 31, 1999, and the results of
its operations for the year then ended, the changes in its 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 in conformity with generally accepted
accounting principles of the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards of the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999, by correspondence with custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 7, 2000
16
<PAGE>
SHAREHOLDER INFORMATION AND SERVICES
- -------------------------------------------------------------------------------
WE ARE OFTEN ASKED--
HOW DO I INVEST IN ADAMS EXPRESS?
Adams Express common stock is listed on the New York Stock Exchange and the
Pacific Exchange. The stock's ticker symbol is "ADX" and may be bought and sold
through registered investment security dealers. Your broker will be able to
assist you in this regard. In addition, stock may be purchased through the Bank
of New York's BuyDIRECT Purchase and Sale Plan (see page 18).
WHERE DO I GET INFORMATION ON THE STOCK'S PRICE, TRADING AND/OR NET ASSET VALUE?
The daily net asset value (NAV) per share and closing market price may be
obtained from our website at www.adamsexpress.com. The daily NAV is also
available on the NASDAQ Mutual Fund Quotation System under the symbol XADEX. The
week-ending NAV 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 or visit our
website.
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. Transferring 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, provide the Transfer Agent with your bank's name, your branch's mailing
address and your account number at your bank. (Sorry, The Bank of New York
cannot electronically transfer funds at this time.)
WHO DO I NOTIFY OF A CHANGE OF ADDRESS?
The Transfer Agent.
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 its system; simply send
the temporary address and the dates you plan to be there to The Bank of New
York.
I WANT TO GIVE SHARES TO MY CHILDREN, GRANDCHILDREN, ETC. AS A GIFT. HOW DO I GO
ABOUT IT?
Giving shares of Adams Express is simple and is handled through our Transfer
Agent. 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.
17
<PAGE>
SHAREHOLDER INFORMATION 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 1, June 1, and September 1, and (b) a
"year-end" distribution, payable in late December, consisting of the estimated
balance of the net investment income for the year and the net realized capital
gain earned through October 31. Stockholders may elect to receive the year-end
distribution in stock or cash. In connection with this distribution, all
STOCKHOLDERS OF RECORD are sent a dividend announcement notice and an election
card in mid-November.
STOCKHOLDERS HOLDING SHARES IN "STREET" OR BROKERAGE ACCOUNTS MAY MAKE THEIR
ELECTION BY NOTIFYING THEIR BROKERAGE HOUSE REPRESENTATIVE.
BuyDIRECT/SM*/
BuyDIRECT is a direct purchase and sale plan, as well as a dividend reinvestment
plan, sponsored and administered by our transfer agent, The Bank of New York.
The Plan provides registered stockholders and interested first time investors an
affordable alternative for buying, selling, and reinvesting in Adams Express
shares. Direct purchase plans are growing in popularity and Adams Express is
pleased to participate in such a plan.
The costs to participants in administrative service fees and brokerage
commissions for each type of transaction are listed below. Please note that the
fees for the reinvestment of dividends as well as the $0.05 per share commission
for each share purchased under the Plan have not increased since 1973.
Initial Enrollment $7.50
A one-time fee for new accounts who are not currently registered holders.
Optional Cash Investments
Service Fee $2.50 per investment
Brokerage Commission $0.05 per share
Reinvestment of Dividends**
Service Fee 10% of amount invested
(maximum of $2.50 per investment)
Brokerage Commission $0.05 per share
Sale of Shares
Service Fee $10.00
Brokerage Commission $0.05 per share
Deposit of Certificates for safekeeping Included
Book to Book Transfers Included
To transfer shares to another participant or to a new participant
Fees are subject to change at any time.
MINIMUM AND MAXIMUM CASH INVESTMENTS
Initial minimum investment (non-holders) $500.00
Minimum optional investment
(existing holders) $50.00
Electronic Funds Transfer
(monthly minimum) $50.00
Maximum per transaction $25,000.00
Maximum per year NONE
A brochure which further details the benefits and features of BuyDIRECT as well
as an enrollment form may be obtained by contacting The Bank of New York.
FOR NON-REGISTERED SHAREHOLDERS
For shareholders whose stock is held by a broker in "street" name, The Bank of
New York's Dividend Reinvestment Plan remains 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 or contact The Bank of New York about the BuyDIRECT
Plan.
-------------
THE COMPANY THE TRANSFER AGENT
The Adams Express Company The Bank of New York
Lawrence L. Hooper, Jr., Shareholder Relations
Vice President, Secretary and Dept.-8W
General Counsel P.O. Box 11258
Seven St. Paul Street, Church Street Station
Suite 1140 New York, NY 10286
Baltimore, MD 21202 (800) 432-8224
(800) 638-2479 Website:
Website: http://stock.bankofny.com
www.adamsexpress.com E-mail:
E-mail: Shareowner-svcs@
[email protected] bankofny.com
*BuyDIRECT is a service mark of The Bank of New York.
**The year-end dividend and capital gain distribution may be made in newly
issued shares of common stock in which event there would be no fees or
commissions in connection with this dividend and capital gain distribution.
18
<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> <C> <C> <C> <C>
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
1998 1,688,080,336 51,876,651 32.54 .45 1.65
1999 2,170,801,875 53,894,827 40.28 .39 2.06
</TABLE>
--------------
Stock Data
--------------
Price (12/31/99) $33.5625
Net Asset Value (12/31/99) $40.28
Discount: 16.7%
New York Stock Exchange and Pacific Exchange ticker symbol: ADX
NASDAQ Mutual Fund Quotation Symbol: XADEX
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. The rates
of return will vary and the principal value of an investment will fluctuate.
Shares, if sold, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
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19
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THE ADAMS EXPRESS COMPANY
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<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS (with their principal affiliations) OFFICERS
Enrique R. Arzac/1,3/ W. Perry Neff/1,3/ Douglas G. Ober
Professor of Finance and Economics Retired Executive Vice President Chairman and
Columbia University Chemical Bank Chief Executive Officer
Daniel E. Emerson/2,4/ Douglas G. Ober/1/ Joseph M. Truta
Retired Executive Vice President Chairman of the Company President
NYNEX Corporation
Landon Peters/2,4/ Richard F. Koloski
Thomas H. Lenagh/3,4/ Private Investor Executive Vice President
Financial Advisor
John J. Roberts/1,4/ Barbara L. Rishel
W.D. MacCallan/1,3/ Senior Advisor, American Vice President -- Research
Retired Chairman of the Company International Group, Inc.
and Petroleum & Resources Richard B. Tumolo
Corporation Robert J.M. Wilson/2,4/ Vice President -- Research
Retired President of the Company
and Petroleum & Resources Lawrence L. Hooper, Jr.
Corporation Vice President, Secretary and
General Counsel
Maureen A. Jones
Vice President and Treasurer
Christine M. Griffith
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
20
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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.adamsexpress.com
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