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STATEMENT OF CHANGES IN NET ASSETS

1. Significant Accounting Policies

The Adams Express Company (the Company) is registered under the Investment Company Act of 1940 as a diversified in-vestment company. The Company’s investment objectives as well as the nature and risk of its investment transactions are set forth in the Company’s registration statement.

Security Valuation -Investments in securities traded on a national security exchange are valued at the last reported sale price on the day of valuation. Over-the-counter and listed securities for which a sale price is not available are valued at the last quoted bid price. Short-term investments are valued at amortized cost. Options are valued at the last sale price or last quoted asked price.

Affiliated Companies -Investments in companies 5% or more of whose outstanding voting securities are held by the Company are defined as "Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940.

Security Transactions and Investment Income -Investment transactions are accounted for on the trade date. Gain or loss on sales of securities and options is determined on the basis of identified cost. Dividend income and distributions to shareholders are recognized on the ex-dividend date, and interest income is recognized on the accrual basis.

2. Federal Income Taxes

The Company’s policy is to distribute all of its taxable income to its shareholders in compliance with the requirements of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. For federal income tax purposes, the identified cost of securities, including options, at March 31, 2000 was $917,863,250, and net unrealized appreciation aggregated $1,394,404,188 of which the related gross unrealized apprecia-tion and depreciation were $1,468,871,274 and 74,467,086, respectively.

Distributions are determined in accordance with income tax regulations which may differ from generally accepted account-ing 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 three months ended March 31, 2000 were $72,969,721 and $116,274,269, 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 March 31, 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. During the three months ended March 31, 2000, the Company purchased 690,600 shares of common stock at a total cost of $23,388,422 and a weighted average discount from net asset value of 14.9%. At March 31, 2000, the Company held a total of 734,100 shares of its com-mon stock.

The Company has 10,000,000 authorized and unissued pre-ferred 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 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 surrender. Under the plan, the exercise price of the options and related stock appreciation rights is reduced by the per share amount of capital gain paid by the Company during subsequent years. At the beginning of 2000, 253,050 options were outstanding, with a weighted average exercise price of $12.5875 per share. During the three months ended March 31, 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 relating to 20,764 stock option shares were exercised at a weighted average market price of $33.8516 per share and the stock options relating to those rights, which had a weighted average exercise price of $8.7156 per share, were cancelled. At March 31, 2000, there were outstanding exercisable options to purchase 59,517 common shares at $7.985-21.595 per share (weighted average price of $9.9279), and unexercisable options to purchase 195,277 common shares at $7.9850–$24.1825 per share (weighted average price of $16.1063). The weighted average remaining contractual life of outstanding exercisable and unexercisable options is 4.6898 years and 6.3955 years, respectively. Total compensation expense recognized for the three months ended March 31, 2000 related to the stock options and stock appreciation rights plan was $737,922. At March 31, 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-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 of investments in individual stocks and bonds and mutual funds..

The actuarially computed net pension cost credit for the three months ended March 31, 2000 was $141,711, and consisted of service cost of $44,917, interest cost of $84,505, expected return on plan assets of $223,330, and net amortization credit of $47,803.

In determining the actuarial present value of the projected ben-efit obligation, the interest rate used for the weighted average discount rate was 8.0%, the expected rate of annual salary in-creases was 7.0%, and the long-term expected 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 three months ended March 31, 2000, the projected benefit obligation in-creased due to service cost and interest cost of $44,917 and $84,505, respectively, and decreased due to benefit paymentsin the amount of $48,786. The projected benefit obligation March 31, 2000 was $4,403,477.

On January 1, 2000, the actual fair value of plan assets was $11,264,093. During the three months ended March 31, 2000, the fair value of plan assets increased due to the expected re-turn on plan assets of $223,330 and decreased due to benefit payments in the amount of $48,786. At March 31, 2000, the projected fair value of plan assets amounted to $11,438,637 which resulted in excess plan assets of $7,035,160. The remaining components of prepaid pension cost at March 31, 2000 included $2,100,186 in unrecognized net gain, $625,197 in unrecognized prior service cost and $167,864 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 March 31, 2000 was $5,392,307.

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 March 31, 2000 for employees and former employees of the Company was $5,672,421. Aggregate remuneration paid or accrued during the three months ended March 31, 2000 to officers and directors amounted to $1,429,839.

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 three months ended March 31, 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 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 March 31, 2000, the Company had securities on loan of $493,394,657 and held collateral of $504,246,747.

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