<PAGE>
Letter to Stockholders
-------------------------------------------------------------------------------
We are pleased to submit the financial statements for the six months ended
June 30, 2000. In addition, the report of independent accountants, a schedule
of investments, and summary financial information for the Company are
provided.
Net assets of the Company at June 30, 2000 were $42.64 per share on 52,791,127
shares outstanding, compared with $40.28 per share at December 31, 1999, on
53,894,827 shares outstanding. On March 1, 2000, a distribution of $0.12 per
share was paid consisting of $0.07 from 1999 long-term capital gain and $0.05
from 2000 investment income. All are taxable in 2000. A 2000 investment income
dividend of $0.12 per share was paid on June 1, 2000 and another $0.12 invest-
ment income dividend has been declared to shareholders of record August 18,
2000, payable September 1, 2000.
Net investment income for the six months ended June 30, 2000 amounted to
$8,799,608, compared with $9,574,280 for the same period in 1999. These earn-
ings are equal to $0.17 and $0.18 per share, respectively, on the average num-
ber of shares outstanding during each period.
Net capital gain realized on investments for the six months ended June 30,
2000 amounted to $76,676,129, the equivalent of $1.45 per share.
Current and potential shareholders can find information about the Company, in-
cluding the daily net asset value (NAV) per share, the market price, and the
discount/premium to the NAV, at its site on the Internet. The address for the
site is www.adamsexpress.com. Also available at the website are a brief his-
tory of the Company, historical financial information, and more general indus-
try material. Further information regarding shareholder services is located on
page 11 of this report.
The Company is an internally-managed equity fund whose investment policy is
essentially based on the primary objectives of preservation of capital, the
attainment of reasonable income from investments and, in addition, an opportu-
nity for capital appreciation.
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
July 21, 2000
<PAGE>
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
June 30, 2000
<TABLE>
<S> <C> <C>
Assets
Investments* at value:
Common stocks and convertible securities
(cost $826,409,180) $2,150,175,099
Non-controlled affiliate, Petroleum &
Resources Corporation
(cost $24,134,839) 44,470,624
Short-term investments (cost $56,270,112) 56,270,112 $2,250,915,835
--------------------------------------------------------------
Cash 148,152
Securities lending collateral 332,294,404
Receivables:
Investment securities sold 10,175
Dividends and interest 1,494,242
Prepaid expenses and other assets 6,209,029
-----------------------------------------------------------------------------
Total Assets 2,591,071,837
-----------------------------------------------------------------------------
Liabilities
Investment securities purchased 870,000
Open written option contracts at value
(proceeds $751,047) 786,269
Obligations to return securities lending
collateral 332,294,404
Accrued expenses 6,196,054
-----------------------------------------------------------------------------
Total Liabilities 340,146,727
-----------------------------------------------------------------------------
Net Assets $2,250,925,110
-----------------------------------------------------------------------------
Net Assets
Common Stock at par value $1.00 per share,
authorized 150,000,000 shares; issued and
outstanding 52,791,127 shares $ 52,791,127
Additional capital surplus 776,934,142
Undistributed net investment income 281,538
Undistributed net realized gain on investments 76,851,821
Unrealized appreciation on investments 1,344,066,482
-----------------------------------------------------------------------------
Net Assets Applicable to Common Stock $2,250,925,110
-----------------------------------------------------------------------------
Net Asset Value Per Share of Common Stock $42.64
-----------------------------------------------------------------------------
</TABLE>
*See Schedule of Investments on pages 6 through 8.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Statement of Operations
--------------------------------------------------------------------------------
Six Months Ended June 30, 2000
<TABLE>
<S> <C>
Investment Income
Income:
Dividends:
From unaffiliated issuers $ 9,533,853
From non-controlled affiliate 326,723
Interest 2,650,925
---------------------------------------------------------------------------
Total income 12,511,501
---------------------------------------------------------------------------
Expenses:
Investment research 1,866,913
Administration and operations 869,658
Directors' fees 97,250
Reports and stockholder communications 228,927
Transfer agent, registrar and custodian expenses 196,757
Auditing services 27,696
Legal services 61,639
Occupancy and other office expenses 135,851
Travel, telephone and postage 79,087
Other 148,115
---------------------------------------------------------------------------
Total expenses 3,711,893
---------------------------------------------------------------------------
Net Investment Income 8,799,608
---------------------------------------------------------------------------
Realized Gain and Change in Unrealized Appreciation on
Investments
Net realized gain on security transactions 76,518,818
Net realized gain distributed by regulated investment company
(non-controlled affiliate) 157,311
Change in unrealized appreciation on investments 45,403,796
---------------------------------------------------------------------------
Net Gain on Investments 122,079,925
---------------------------------------------------------------------------
Change in Net Assets Resulting from Operations $130,879,533
---------------------------------------------------------------------------
</TABLE>
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30, 2000 Dec. 31, 1999
------------------- -------------
<S> <C> <C>
From Operations:
Net investment income $ 8,799,608 $ 19,143,783
Net realized gain on investments 76,676,129 106,820,166
Change in unrealized appreciation on
investments 45,403,796 419,522,952
--------------------------------------------------------------------------------
Increase in net assets resulting from
operations 130,879,533 545,486,901
--------------------------------------------------------------------------------
Dividends to Stockholders from:
Net investment income (9,020,493) (20,231,884)
Net realized gain from investment
transactions (3,740,074) (106,865,901)
--------------------------------------------------------------------------------
Decrease in net assets from distributions (12,760,567) (127,097,785)
--------------------------------------------------------------------------------
From Capital Share Transactions:
Value of common shares issued in payment
of optional distributions - 0 - 65,780,453
Cost of common shares purchased (note 4) (37,995,731) (1,448,030)
--------------------------------------------------------------------------------
Change in net assets from capital share
transactions (37,995,731) 64,332,423
--------------------------------------------------------------------------------
Total Increase in Net Assets 80,123,235 482,721,539
Net Assets:
Beginning of period 2,170,801,875 1,688,080,336
--------------------------------------------------------------------------------
End of period (including undistributed net
investment income of $281,538 and $502,423,
respectively) $2,250,925,110 $2,170,801,875
--------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<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 invest-
ment 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 outstand-
ing voting securities are held by the Company are defined as "Affiliated Com-
panies" in Section 2(a)(3) of the Investment Company Act of 1940.
Security Transactions and Investment Income -- Investment transactions are ac-
counted 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 distribu-
tions to shareholders are recognized on the ex-dividend date, and interest in-
come is recognized on the accrual basis.
2. Federal Income Taxes
The Company's policy is to distribute all of its taxable income to its share-
holders in compliance with the requirements of the Internal Revenue Code ap-
plicable 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 June 30, 2000 was $907,113,235, and net
unrealized appreciation aggregated $1,344,553,647 of which the related gross
unrealized appreciation and depreciation were $1,424,834,554 and 80,280,907,
respectively.
Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. Accordingly, peri-
odic reclassifications are made within the Company's capital accounts to re-
flect income and gains available for distribution under income tax regula-
tions.
3. Investment Transactions
Purchases and sales of portfolio securities, other than options and short-term
investments, during the six months ended June 30, 2000 were $125,276,394 and
$181,673,955, 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 period ended June 30, 2000. All investment decisions are
made by a committee, and no one person is primarily responsible for making
recommendations to that committee.
4. Capital Stock
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. At the begin-
ning of 2000, the Company had purchased and was holding 43,500 shares of com-
mon stock at a total cost of $1,448,030 and a weighted average discount from
net asset value of 16.2% During the six months ended June 30, 2000, the Com-
pany purchased 1,103,700 shares of common stock at a total cost of $37,995,731
and a weighted average discount from net asset value of 14.3%. At June 30,
2000, the Company held a total of 1,147,200 shares of its common stock.
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 exercis-
able 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 ex-
ercisable 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 holders 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 sur-
render. 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 2000, 253,050 options
were outstanding, with a weighted average exercise price of $12.5875 per
share. During the six months ended June 30, 2000, the Company granted options
including stock appreciation rights for 22,508 shares of common stock with a
weighted average exercise price of $33.3125. Stock appreciation rights relat-
ing to 38,978 stock option shares were exercised at a weighted average market
price of $35.4244 per share and the stock options relating to those rights,
which had a weighted average exercise price of $10.1408 per share, were can-
celled. At June 30, 2000, there were outstanding exercisable options to pur-
chase 52,806 common shares at $7.985-24.1825 per share (weighted average price
of $12.2797), and unexercisable options to purchase 183,774 common shares at
$7.985-$21.595 per share (weighted average price of $15.6352). The weighted
average remaining contractual life of outstanding exercisable and
unexercisable options is 5.4131 years and 5.9484 years, respectively. Total
compensation expense recognized for the six months ended June 30, 2000 related
to the stock options and stock appreciation rights plan was $789,956. At June
30, 2000, there were 883,713 shares available for future option grants.
5. Retirement Plans
The Company provides retirement benefits for its employees under a non-con-
tributory 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 of investments in individual stocks and bonds and mutual funds.
The actuarially computed net pension cost credit for the six months ended June
30, 2000 was $283,422, and consisted of service cost of $89,834, interest cost
of $169,011, expected return on plan assets of $446,660, and net amortization
credit of $95,607.
In determining the actuarial present value of the projected benefit obliga-
tion, the interest rate used for the weighted average discount rate was 8.0%,
the expected rate of annual salary increases was 7.0%, and the long-term ex-
pected rate of return on plan assets was 8.0%.
On January 1, 2000, the projected benefit obligation for service rendered to
date was $4,322,841. During the six months ended June 30, 2000, the projected
benefit obligation increased due to service cost and interest cost of $89,834
and
4
<PAGE>
Notes to Financial Statements (continued)
-------------------------------------------------------------------------------
$169,011, respectively, and decreased due to benefit payments in the amount of
$97,572. The projected benefit obligation June 30, 2000 was $4,484,114.
On January 1, 2000, the actual fair value of plan assets was $11,264,093. Dur-
ing the six months ended June 30, 2000, the fair value of plan assets in-
creased due to the expected return on plan assets of $446,660 and decreased
due to benefit payments in the amount of $97,572. At June 30, 2000, the pro-
jected fair value of plan assets amounted to $11,613,181 which resulted in ex-
cess plan assets of $7,129,067. The remaining components of prepaid pension
cost at June 30, 2000 included $2,047,943 in unrecognized net gain, $596,776
in unrecognized prior service cost and $143,883 is the remaining portion of
the unrecognized net asset existing at January 1, 1987, which is being amor-
tized over 15 years. Prepaid pension cost included in prepaid expenses and
other assets at June 30, 2000 was $5,534,017.
In addition, the Company has a nonqualified benefit plan which provides em-
ployees 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 June 30, 2000 for employees and
former employees of the Company was $5,433,018. Aggregate remuneration paid or
accrued during the six months ended June 30, 2000 to officers and directors
amounted to $1,873,603.
Research, accounting and other office services provided to and reimbursed by
the Company's non-controlled affiliate, Petroleum & Resources Corporation,
amounted to $125,083 for the six months ended June 30, 2000.
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 compen-
sation 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 in-
terest or dividends on the securities loaned. The loans are secured by collat-
eral 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 June 30, 2000, the Company had securities on loan of
$324,685,645 and held collateral of $332,294,404.
<TABLE>
<CAPTION>
Financial Highlights
---------------------------------------------------------------------------------------------------------------------------
Six Months Ended
------------------------ Year Ended December 31
June 30, June 30, --------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
----------- ----------- ---------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $40.28 $32.54 $32.54 $28.51 $23.71 $21.36 $17.98
---------------------------------------------------------------------------------------------------------------------------
Net investment income 0.17 0.18 0.37 0.45 0.43 0.52 0.50
Net realized gains and change in
unrealized appreciation and other
changes 2.43 3.10 9.82 5.68 6.33 3.55 4.54
---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.60 3.28 10.19 6.13 6.76 4.07 5.04
Less distributions
Dividends from net investment income (0.17) (0.18) (0.39) (0.45) (0.44) (0.52) (0.52)
Distributions from net realized gains (0.07) (0.06) (2.06) (1.65) (1.52) (1.20) (1.14)
---------------------------------------------------------------------------------------------------------------------------
Total distributions (0.24) (0.24) (2.45) (2.10) (1.96) (1.72) (1.66)
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $42.64 $35.58 $40.28 $32.54 $28.51 $23.71 $21.36
---------------------------------------------------------------------------------------------------------------------------
Per share market price, end of period $36.875 $29.125 $33.5625 $26.625 $24.1875 $19.75 $18.50
Total Investment Return
Based on market price 10.6% 10.4% 36.1% 19.3% 33.1% 16.4% 29.5%
Based on net asset value 6.6% 10.3% 33.6% 23.7% 30.7% 21.0% 29.9%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $2,250,925 $1,845,897 $2,170,802 $1,688,080 $1,424,170 $1,138,760 $986,231
Ratio of expenses to average net assets 0.34%/+/ 0.26%/+/ 0.32% 0.22% 0.39% 0.34% 0.46%
Ratio of net investment income to
average net assets 0.81%/+/ 1.10%/+/ 1.06% 1.48% 1.61% 2.30% 2.51%
Portfolio turnover 11.76%/+/ 21.56%/+/ 15.94% 22.65% 17.36% 19.60% 23.98%
Number of shares outstanding at
end of period (in 000's) 52,791 51,877 53,895 51,877 49,949 48,037 46,166
</TABLE>
--------
/+/Ratios presented on an annualized basis.
5
<PAGE>
Schedule of Investments
--------------------------------------------------------------------------------
June 30, 2000
<TABLE>
<CAPTION>
Shares Value (A)
------ ---------
<S> <C> <C>
Stocks And Convertible Securities -- 97.5%
Basic Materials -- 1.1%
Avery Dennison Corp. 70,000 $ 4,698,750
Cabot Corp. 75,000 2,043,750
Engelhard Corp. 395,000 6,739,688
Mead Corp. 400,000 10,175,000
--------------
23,657,188
--------------
Capital Goods -- 11.6%
Black & Decker Corp. 300,000 11,793,750
Corning, Inc. 425,000 114,537,500
Dover Corp. 260,000 10,546,250
General Electric Co. 1,920,000 101,760,001
Honeywell Int'l. Co. 346,500 11,672,719
Pall Corp. 600,000 11,100,000
--------------
261,410,220
--------------
Communication Services -- 13.6%
Telecommunications --
Cellular and Wireless -- 4.2%
MediaOne Group, Inc.
6.25% PIES due 2001 85,000 7,644,688
Nextel Communications Inc.
5.25% Conv. Notes
due 2010 10,000,000 10,425,000
Nextel Communications Inc. (B) 1,040,000 63,635,000
Vodafone AirTouch plc ADS 287,500 12,003,125
--------------
93,707,813
--------------
Telecommunications -- Long Distance -- 4.0%
Qwest Communications International, Inc.
5.75% TRENDS Pfd.
due 2003 (C) 125,000 10,196,250
Qwest Communications International, Inc. (B) 760,000 37,762,500
Williams Communications Group, Inc. (B) 493,700 16,384,669
WorldCom, Inc. (B) 550,000 25,231,250
--------------
89,574,669
--------------
Telephone -- 5.4%
American Tower Corp.
5.00% Conv. Notes
due 2010 10,000,000 10,075,000
BellSouth Corp. 440,000 18,755,000
Global Crossing Ltd. 6.75% Conv. Pfd. due 2012 40,000 8,780,000
Global Crossing Ltd. (B) 644,000 16,945,250
RCN Corp. (B) 280,000 7,105,000
SBC Communications Inc. 787,960 34,079,270
Time Warner Telecom Inc. (B) 404,500 26,039,688
--------------
121,779,208
--------------
<CAPTION>
Shares Value (A)
------ ---------
<S> <C> <C>
Consumer -- 5.7%
Consumer Cyclical -- 1.0%
Delphi Automotive, Inc. 690,000 $ 10,048,125
Tiffany & Co. 175,000 11,812,500
--------------
21,860,625
--------------
Consumer Staples -- 4.7%
Coca-Cola Co. 170,000 9,764,375
Dean Foods Co. 300,000 9,506,250
Fort James Corp. 700,000 16,187,500
Houston Industries Inc.
7.00% Conv. ACES due 2000 90,000 11,193,750
Interstate Bakeries Corp. 138,000 1,932,000
Ivex Packaging Corp. (B) 928,000 10,324,000
McDonald's Corp. 560,000 18,445,000
MediaOne Group, Inc. (B) 150,000 9,964,875
PepsiCo, Inc. 295,000 13,109,063
Ralston Purina
7.00% SAILS due 2000 180,000 5,546,250
--------------
105,973,063
--------------
Energy -- 5.8%
BP Amoco plc ADR 270,000 15,271,876
Enron Corp. 500,000 32,250,000
Exxon Mobil Corp. 158,418 12,435,813
Petroleum & Resources
Corporation (D) 1,210,085 44,470,624
Schlumberger Ltd. 88,400 6,596,850
Williams Companies, Inc. 500,000 20,843,750
--------------
131,868,913
--------------
Financial -- 10.8%
Banking -- 6.5%
Associates First Capital Corp.
Ser. A 546,800 12,200,475
Bank One Corp. 330,000 8,765,625
BankNorth Group, Inc. 474,000 7,258,125
Federal Home Loan Mortgage Corp. 360,000 14,580,000
Greenpoint Financial Corp. 435,000 8,156,250
Investors Financial Services Corp. 800,000 31,750,000
Mellon Financial Corp. 420,000 15,303,750
National City Corp. 160,000 2,720,000
Provident Bankshares Corp. 319,068 4,307,418
Wachovia Corp. 190,000 10,307,500
Wells Fargo & Co. 550,000 21,312,500
Wilmington Trust Corp. 210,000 8,977,500
--------------
145,639,143
--------------
</TABLE>
6
<PAGE>
Schedule of Investments (continued)
--------------------------------------------------------------------------------
June 30, 2000
<TABLE>
<CAPTION>
Shares Value (A)
------ ---------
<S> <C> <C>
Insurance -- 4.3%
AMBAC Financial Group, Inc. 379,600 $ 20,806,825
American International Group, Inc. 506,250 59,484,376
Annuity & Life Re (Holdings), Ltd. 700,000 17,150,000
--------------
97,441,201
--------------
Health Care -- 11.4%
Abbott Laboratories 255,000 11,315,625
ALZA Corp. (B) 340,000 20,102,500
American Home Products Corp. 425,000 24,968,750
Baxter International 255,000 17,929,688
Chiron Corp. (B) 550,000 26,125,000
Edwards Lifesciences 51,000 943,500
Elan Corp., plc ADR (B) 705,000 34,148,438
Johnson & Johnson 180,000 18,337,500
Lilly (Eli) & Co. 290,000 28,855,000
Merck & Co., Inc. 300,000 22,762,500
Pharmacia Corp. 368,900 19,067,519
SmithKline Beecham plc ADR 260,000 16,948,750
Vertex Pharmaceuticals Inc. 5.00% Conv. Sub. Notes
due 2007 (C) 10,000,000 14,300,000
--------------
255,804,770
--------------
Technology -- 32.9%
Communication Equipment -- 13.4%
Ericsson (L.M.) Telephone Co. ADR 3,133,333 62,667,000
Lucent Technologies Inc. 508,920 30,153,510
Motorola, Inc. 485,622 14,113,389
Nokia Corp. ADR 1,840,000 91,885,000
Nortel Networks Corp. 1,490,000 103,182,500
--------------
302,001,399
--------------
<CAPTION>
Shares Value (A)
------ ---------
<S> <C> <C>
Computer Related -- 13.7%
Axent Technologies Inc.(B) 445,000 $ 11,041,563
BMC Software Inc. (B) 300,000 10,945,313
Cisco Systems, Inc. (B) 1,835,000 116,637,188
First Data Corp. 343,980 17,070,008
Hewlett-Packard Co. 200,000 24,900,000
Oracle Corp. (B) 590,000 49,596,875
QRS Corp. (B) 550,000 13,509,375
Sapient Corp. (B) 575,000 61,489,063
Sun Microsystems Inc. (B) 50,000 4,546,875
--------------
309,736,260
--------------
Electronics -- 5.7%
Intel Corp. 340,000 45,453,750
Solectron Corp. (B) 2,000,000 83,750,000
--------------
129,203,750
--------------
Transportation -- 0.5%
Canadian National Railway Co. 5.25% Conv. Pfd. QUIDS
due 2029 15,000 675,000
Canadian National Railway Co. 60,000 1,751,250
Ryder System, Inc. 445,000 8,427,188
--------------
10,853,438
--------------
Utilities -- 4.2%
Black Hills Corp. 555,000 12,522,188
Calpine Capital Trust 5.75% Conv. Pfd. HIGH TIDES 202,500 24,046,875
Calpine Corp. (B) 70,000 4,602,500
CINergy Corp. 300,000 7,631,250
ENDESA, S.A. ADR 350,000 6,825,000
Northwestern Corp. 500,000 11,562,500
TECO Energy, Inc. 300,000 6,018,750
United Water Resources Inc. 600,000 20,925,000
--------------
94,134,063
--------------
Total Stocks and Convertible Securities
(Cost $850,544,019) (E) 2,194,645,723
--------------
</TABLE>
7
<PAGE>
Schedule of Investments (continued)
-------------------------------------------------------------------------------
June 30, 2000
<TABLE>
<CAPTION>
Prin. Amt. Value (A)
---------- ---------
<S> <C> <C>
Short-Term Investments -- 2.5%
U.S. Government Obligations -- 0.7%
U.S. Treasury Bills,
5.77%, due 8/24/00 $15,000,000 $ 14,870,175
--------------
Commercial Paper -- 1.8%
Chevron USA, 6.48%, due 7/11/00 6,400,000 6,388,480
Deere (John) Capital Corp., 6.50%, due 7/31/00 7,675,000 7,633,427
Ford Motor Credit Corp.,
6.47-6.53%, due 7/6/00-7/20/00 13,725,000 13,699,640
<CAPTION>
Prin. Amt. Value (A)
---------- ---------
<S> <C> <C>
General Electric Capital Corp., 6.53-6.75%,
due 7/6/00-7/18/00 $8,715,000 $ 8,689,223
Texaco, Inc., 6.50%,
due 7/13/00 5,000,000 4,989,167
--------------
41,399,937
--------------
Total Short-Term Investments
(Cost $56,270,112) 56,270,112
--------------
Total Investments
(Cost $906,814,131) 2,250,915,835
Cash, receivables and other assets, less liabilities 9,275
--------------
Net Assets -- 100.0% $2,250,925,110
==============
</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 re-
stricted securities.
(B) Presently non-dividend paying.
(C) Restricted securities (Qwest Communications International, Inc. 5.75%
TRENDS Pfd. due 2003, acquired 12/4/98, cost $5,218,750, and Vertex Phar-
maceuticals Inc. Conv. Sub Notes due 2007, acquired 3/9/00, cost
$10,000,000).
(D) Non-controlled affiliate.
(E) The aggregate market value of stocks held in escrow at June 30, 2000 cov-
ering open call option contracts written was $14,383,438. In addition, the
aggregate market value of securities segregated by the custodian required
to collateralize open put option contracts written was $13,346,250.
Historical Financial Statistics
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dividends Distributions
Net from from
Common Asset Net Investment Net Realized
Value of Shares Value per Income Gains
Dec. 31 Net Assets Outstanding Share per Share per Share
------- ---------- ----------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
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
June 30, 2000 .......... 2,250,925,110 52,791,127 42.64 .29* .07
</TABLE>
--------
*Paid or declared
8
<PAGE>
Principal Changes in Portfolio Securities
-------------------------------------------------------------------------------
During the Three Months Ended June 30, 2000
(unaudited)
<TABLE>
<CAPTION>
Principal Amount or Shares
-------------------------------------------------
Held
Additions Reductions June 30, 2000
--------- ---------- -------------
<S> <C> <C> <C>
Agilent Technologies........ 76,280/(1)/ 76,280 --
Axent Technologies Inc. .... 445,000 445,000
Cabot Corp. ................ 75,000 75,000
Calpine Corp. .............. 35,000/(2)/ 70,000
Ericsson (L.M.) Telephone
Co. ADR.................... 2,383,333/(2,4)/ 3,133,333
Fort James Corp. ........... 90,000 700,000
General Electric Co. ....... 1,280,000/(2)/ 5,000 1,920,000
Global Crossing Ltd., 6.75%
Conv. Pfd. due 2012........ 40,000 40,000
Honeywell Int'l Co. ........ 246,500 346,500
Investors Financial Services
Corp. ..................... 400,000/(2)/ 20,000 800,000
Johnson & Johnson........... 53,500 180,000
Motorola, Inc. ............. 323,748/(2)/ 485,622
Nextel Communications
Inc. ...................... 520,000/(2)/ 1,040,000
Nokia Corp. ADR............. 1,380,000/(2)/ 1,840,000
Nortel Networks Corp. ...... 745,000/(2)/ 1,490,000
Pharmacia Corp. ............ 368,900/(3)/ 368,900
Sun MicroSystems Inc. ...... 50,000 50,000
Avery Dennison Corp. ....... 167,800 70,000
Corning Inc. ............... 10,000 425,000
Ericsson (L.M.) Telephone
Co. 4.25% Conv. Sub. Debs.
due 2000................... $120,000/(4)/ --
Financial Security Assurance
Holdings Ltd. ............. 307,387 --
Legato Systems Inc. ........ 280,000 --
Owens Illinois Inc. ........ 91,000 701,000 --
Pharmacia & Upjohn Inc. .... 310,000/(3)/ --
</TABLE>
--------
/(1)/Received .3814 shares for each share of Hewlett Packard.
/(2)/By stock split.
/(3)/Received 1.19 shares of Pharmacia Corp. for each share of Pharmacia &
Upjohn Inc. held.
/(4)/Exchanged .9 shares of Ericsson (L.M.) Telephone Co. 4.25% Conv. Sub.
Debs. due 2000 for 1 share of Ericsson (L.M.) Telephone Co. ADR.
------------------
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]
9
<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, includ-
ing the schedule of investments, and the related statements 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 (here-
after referred to as the "Company") at June 30, 2000, and the results of its
operations, the changes in its net assets and the financial highlights for
each of the periods presented, in conformity with accounting principles gener-
ally accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the responsi-
bility of the Company's management; our responsibility is to express an opin-
ion on these financial statements based on our audits. We conducted our audits
of these financial statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial state-
ments are free of material misstatements. 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 presenta-
tion. We believe that our audits, which included confirmation of securities at
June 30, 2000, by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
July 12, 2000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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 pur-
chase or sale of shares of the Company or of any securities mentioned in the
report. The rates of return will vary and the market value of an investment
will fluctuate. Shares, if sold, may be worth more or less than their origi-
nal cost. Past performance is not indicative of future investment results.
-------------------------------------------------------------------------------
10
<PAGE>
Shareholder Information and Services
-------------------------------------------------------------------------------
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 reinvest-
ment plan, sponsored and administered by our transfer agent, The Bank of New
York. The Plan provides registered stockholders and interested first time in-
vestors 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 commis-
sions 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 regis-
tered 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 the 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.
11
<PAGE>
The Adams Express Company
------------------------------------------------------------------------
Board of Directors
Enrique R. Arzac/1,4/ Douglas G. Ober/1/
Daniel E. Emerson/2,4/ Landon Peters/2,4/
Thomas H. Lenagh/2,3/ John J. Roberts/1,4/
W.D. MacCallan/1,3/ Susan C. Schwab/1,3/
W. Perry Neff/1,2/ Robert J.M. Wilson/3,4/
1. Member of Executive Committee
2. Member of Audit Committee
3. Member of Compensation Committee
4. Member of Retirement Benefits Committee
Officers
Douglas G. Ober Chairman and
Chief Executive Officer
Joseph M. Truta President
Richard F. Koloski Executive Vice President
Richard B. Tumolo Vice President--Research
Lawrence L. Hooper, Jr. Vice President,
Secretary and
General Counsel
Maureen A. Jones Vice President and
Treasurer
Christine M. Griffith Assistant Treasurer
Geraldine H. Stegner Assistant Secretary
----------
Stock Data
----------
Price (6/30/00) $36.875
Net Asset Value (6/30/00) $42.64
Discount: 13.5%
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
---------------------
Distributions in 2000
---------------------
From Investment Income $0.29
(paid or declared)
From Net Realized Gains 0.07
-----
Total $0.36
=====
---------------------------
2000 Dividend Payment Dates
---------------------------
March 1, 2000
June 1, 2000
September 1, 2000
December 27, 2000*
*Anticipated
[ART APPEARS HERES]
[ADAMS EXPRESS COMPANY LOGO]
Semi-Annual Report
----------------------
June 30, 2000
building for the future
with solid investments(R)
