-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LzFvo19O94xDTdyxVqnyhL/y9J3/NbB2zJG8pkmfjyCWJ5zWB2LBaxGiNGNNnWuO zpfxaPrm9rHTaWSavM7hpg== 0000935069-97-000130.txt : 19970912 0000935069-97-000130.hdr.sgml : 19970911 ACCESSION NUMBER: 0000935069-97-000130 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970828 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06557 FILM NUMBER: 97671341 BUSINESS ADDRESS: STREET 1: 2 OLIVER STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6109896602 MAIL ADDRESS: STREET 1: 530 E SWEDESFORD ROAD CITY: WAYNE STATE: PA ZIP: 19087-1693 N-30D 1 STI CLASSIC VARIABLE TRUST SEMI-ANNUAL FINANCIAL REPORT STI CLASSIC VARIABLE TRUST [graphic of columns omitted] JUNE 30, 1997 [STI Classic Variable Trust logo omitted] Dear STI Classic Variable Trust Shareholders: The following 1997 Semi-Annual Financial Report provides you a detailed summary of each of the STI Classic Variable Trust Funds. The STI Classic Funds and the STI Classic Variable Trust have presented investors exposure to a variety of investment opportunities since 1992. The five STI Classic Variable Trust Funds were developed specifically to meet the rapidly changing needs of today's investor. Each of these funds offers an investment discipline that identifies a specific mix of risk and return. Together, the STI Classic Variable Trust Funds complement one another, providing access to different segments of the stock and bond markets. The combination of these funds is intended to offer the ideal investment program for almost any investor. - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST FUNDS (UNAUDITED) NET OF FEES PERFORMANCE AS OF JUNE 30, 1997 - -------------------------------------------------------------------------------- SINCE INCEPTION INCEPTION SIX MONTHS ONE YEAR (ANNUALIZED) DATE - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST INTERNATIONAL EQUITY FUND 17.13% N/A 31.22% 11/7/96 - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST MID CAP EQUITY FUND 8.18% 18.11% 15.99% 10/2/95 - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST CAPITAL GROWTH FUND 21.87% 35.43% 31.51% 10/2/95 - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST VALUE INCOME STOCK FUND 15.81% 26.40% 24.91% 10/2/95 - -------------------------------------------------------------------------------- STI CLASSIC VARIABLE TRUST INVESTMENT GRADE BOND FUND 2.64% 6.80% 4.98% 10/2/95 - -------------------------------------------------------------------------------- PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RETURNS. The STI Classic Variable Trust is a well-established family of mutual funds, nationally recognized for the diversity and quality of investment options that they provide. As the advisor to the STI Classic Variable Trust, STI Capital Management is committed to providing you quality investment products which will aid you in achieving your investment objectives. I hope you will find the information on the following pages useful. It is intended to give you a better understanding of how our portfolio managers are investing your money. Thank you for your interest and participation in the STI Classic Variable Trust. We look forward to many successful years of investing in the future. Sincerely, /S/SIGNATURE Anthony R. Gray Chief Executive Officer and Chief Investment Officer STI Capital Management, N.A. STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 VALUE INCOME STOCK FUND - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- COMMON STOCK (90.3%) BASIC MATERIALS (13.3%) Consolidated Papers 6,600 $ 356 Cyprus AMAX Minerals 21,700 532 Eastman Chemical 3,300 210 Ethyl 40,300 373 Georgia Pacific 7,100 606 Hercules 16,700 799 Imperial Chemical Industries 6,800 387 International Flavors & Fragrances 13,400 677 International Paper 15,200 738 Nalco Chemical 11,100 429 Olin 15,000 586 Reynolds Metals 6,300 449 Union Camp 9,500 475 Witco Chemical 14,500 550 ------ 7,167 ------ CAPITAL GOODS (14.3%) AMP 26,200 1,094 Cooper Industries 9,400 468 Federal Signal 16,300 410 Foster Wheeler 13,800 559 General Signal 14,700 641 National Service Industries 8,400 409 Pall 29,100 677 Rockwell International 9,300 549 Tenneco 21,900 990 Thomas & Betts 9,800 515 Tomkins 20,600 368 Trinity Industries 9,100 289 Waste Management 22,000 707 ------ 7,676 ------ COMMUNICATIONS SERVICES (7.0%) Alltel 20,000 669 BellSouth 11,500 533 Frontier 27,600 550 GTE 25,800 1,132 Southern New England Telecommunications 16,300 634 Sprint 5,300 279 ------ 3,797 ------ - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- CONSUMER CYCLICALS (13.7%) American Greetings, Cl A 14,200 $ 527 Dana 15,100 574 Echlin 16,600 598 H & R Block 14,500 468 ITT Industries 36,300 935 J.C. Penney 22,400 1,169 Masco 12,700 530 May Department Stores 15,000 709 Maytag 11,100 290 McGraw-Hill 9,200 541 Mercantile Stores 7,600 478 Reader's Digest, Cl A 5,600 161 Shaw Industries 37,900 403 ------ 7,383 ------ CONSUMER STAPLES (11.3%) Anheuser Busch 12,900 541 Cadbury Schweppes ADR 13,700 502 CPC International 8,700 803 Deluxe 7,300 249 Food Lion, Cl A 50,100 358 Kelly Services, Cl A 8,200 257 Kimberly-Clark 11,300 562 McCormick 17,400 439 R.R. Donnelley & Sons 16,900 619 Rubbermaid 22,200 660 UST 19,200 533 Whitman 21,900 554 ------ 6,077 ------ ENERGY (7.6%) Amoco 8,300 722 Chevron 10,600 784 Dresser Industries 14,700 548 Kerr-McGee 10,800 684 Mobil 10,200 713 Phillips Petroleum 14,400 630 ------ 4,081 ------ 2 ================================================================================ UNAUDITED - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- FINANCIALS (8.0%) American Financial Group 13,300 $ 564 American General 12,000 573 AmSouth Bancorp 6,600 250 Central Fidelity Banks 8,150 289 Crestar Financial 7,100 276 First American Bank 5,400 247 First American of Tennessee 7,300 280 Hibernia, Cl A 18,500 258 Magna Group 7,700 268 Mercantile Bancorp 4,200 255 Signet Banking 7,300 263 Summit Bancorp 5,170 259 TIG Holdings 17,500 547 ------- 4,329 ------- HEALTH CARE (5.8%) American Home Products 9,800 750 Baxter International 14,100 737 C.R. Bard 14,800 537 Pharmacia Upjohn ADR 31,800 1,105 ------- 3,129 ------- TECHNOLOGY (1.0%) Eastman Kodak 7,300 560 ------- TRANSPORTATION (1.8%) KLM Royal Dutch Air 18,700 577 Illinois Central 10,800 377 ------- 954 ------- UTILITIES (6.5%) Central & South West 12,900 274 Duke Power 11,500 551 Enron 22,800 930 Pacificorp 25,000 550 Questar 12,900 521 Southern 31,700 693 ------- 3,519 ------- TOTAL COMMON STOCK (Cost $43,936) 48,672 ------- - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- REPURCHASE AGREEMENT (9.4%) Morgan Stanley 6.05%, dated 06/30/97, matures 07/01/97, repurchase price $5,100,931 (collateralized by various FNMA obligations, total par value $5,135,000, 7.146%-7.800%, 12/01/24- 08/25/26: total market value $5,212,014) $5,100 $ 5,100 ------- Total Repurchase Agreement (Cost $5,100) 5,100 ------- Total Investments (99.7%) (Cost $49,036) 53,772 ------- OTHER ASSETS AND LIABILITIES, NET (0.3%) 149 ------- NET ASSETS: Portfolio Shares (unlimited authorization -- no par value) based on 3,792,141 outstanding shares of beneficial interest 45,471 Accumulated net realized gain on investments 3,716 Net unrealized appreciation on investments 4,736 Overdistribution of net investment income (2) ------- Total Net Assets (100.0%) $53,921 ======= Net Asset Value, Offering Price and Redemption Price Per Share $14.22 ======= ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION *NON-INCOME PRODUCING SECURITY THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 3 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 MID-CAP EQUITY FUND - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- COMMON STOCK (92.3%) BASIC MATERIALS (3.3%) IMC Fertilizer Group 8,600 $ 301 Potash of Saskatchewan 4,200 315 ------ 616 ------ CAPITAL GOODS (13.9%) Fisher Scientific International 5,200 247 Foster Wheeler 3,400 138 Hubbell, Cl B 3,800 167 Philip Services* 24,100 383 Solectron* 6,400 448 Sundstrand 4,000 223 U.S. Filter* 17,300 471 United Waste Systems* 6,300 258 York International 4,800 221 ------ 2,556 ------ CONSUMER CYCLICALS (19.4%) Bed Bath and Beyond* 8,000 243 Boston Chicken* 21,000 294 Cracker Barrel Old Country Stores 10,800 286 Dollar General 10,537 395 Harley-Davidson 7,700 369 International Speedway 9,900 194 Men's Wearhouse* 1,500 47 Nine West Group* 6,500 248 Ralph Lauren* 6,600 181 Saks Holdings* 13,500 337 Stanley Works 4,100 164 Staples* 19,600 456 West Marine* 13,700 353 ------ 3,567 ------ CONSUMER STAPLES (6.1%) Dial 18,000 281 Hannaford Brothers 8,200 292 JP Foodservice* 8,600 247 Nabisco Holdings, Cl A 7,500 299 ------ 1,119 ------ - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- ENERGY (6.0%) Anadarko Petroleum 4,400 $ 264 Santa Fe International 5,600 190 Tosco 7,100 213 Western Atlas* 6,000 440 ------ 1,107 ------ FINANCIALS (13.5%) Crestar Financial 9,200 358 First Security 8,625 236 First Virginia Banks 2,600 157 Hartford Life, Cl A* 5,100 191 North Fork Bancorporation 7,200 154 PMI Group 3,100 193 Regions Financial 7,200 228 SouthTrust 2,900 120 Summit Bancorp 6,000 301 Trustmark 11,300 316 Union Planters 4,500 233 ------ 2,487 ------ HEALTH CARE (12.0%) Allergan 5,050 161 Biogen* 11,300 383 DePuy* 8,000 184 McKesson 4,300 333 Medpartners* 12,100 262 Pacificare Health Systems, Cl B* 4,600 294 Teva Pharmaceuticals ADR 3,300 214 Watson Pharmaceuticals* 8,700 368 ------ 2,199 ------ 4 ================================================================================ UNAUDITED - --------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------- TECHNOLOGY (15.5%) ADC Telecommunications* 10,700 $ 357 Analog Devices* 16,733 444 Atmel* 8,300 232 Ceridian* 7,500 317 Flextronics International* 15,900 429 Micron Electronics* 12,500 223 Network General* 16,300 242 Sawtek 1,000 33 Teradyne* 14,700 577 ------- 2,854 ------- TRANSPORTATION (1.1%) ASA Holdings 6,800 195 ------- UTILITIES (1.5%) Wisconsin Energy 11,200 277 ------- Total Common Stock (Cost $15,536) 16,977 ------- REPURCHASE AGREEMENT (7.8%) Morgan Stanley 5.70%, dated 06/30/97, matures 07/01/97, repurchase price $1,442,386 (collateralized by U.S. Treasury Note, par value $1,475,000, 6.25%, 06/30/98: market value $1,482,091) $1,442 1,442 ------- Total Repurchase Agreement (Cost $1,442) 1,442 ------- Total Investments (100.1%) (Cost $16,978) 18,419 ------- OTHER ASSETS AND LIABILITIES, NET (-0.1%) (23) ------- - --------------------------------------------------------------- VALUE (000) - --------------------------------------------------------------- NET ASSETS: Portfolio Shares (unlimited authorization -- no par value) based on 1,435,214 outstanding shares of beneficial interest $15,600 Accumulated net realized gain on investments 1,356 Net unrealized appreciation on investments 1,441 Overdistribution of net investment income (1) ------- Total Net Assets (100.0%) $18,396 ======= Net Asset Value, Offering Price and Redemption Price Per Share $12.82 ======= ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS *NON-INCOME PRODUCING SECURITY THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 5 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 CAPITAL GROWTH FUND - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- COMMON STOCK (88.4%) BASIC MATERIALS (4.1%) Aluminum Company of America 4,400 $ 332 Hercules 10,200 488 Monsanto 11,600 500 Morton International* 4,300 130 Potash of Saskatchewan 1,600 120 Praxair 3,500 196 W.R. Grace* 1,600 88 ------ 1,854 ------ CAPITAL GOODS (13.7%) Allied Signal 11,600 974 Crown Cork & Seal 5,000 267 Deere 3,800 209 Emerson Electric 9,200 507 Fluor 2,100 116 General Electric 17,600 1,151 General Signal 8,100 353 Keystone International 7,000 243 Lockheed Martin 2,700 280 McDonnell Douglas 2,700 185 Molten Metal Technology* 5,600 28 Rockwell International 5,200 307 Thomas & Betts 4,806 253 Tyco International 8,600 598 United Technologies 5,600 465 USA Waste Services* 3,200 124 Wheelabrator Technologies 9,400 145 ------ 6,205 ------ - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- COMMUNICATION SERVICES (1.1%) Airtouch Communications* 1,700 $ 47 BellSouth 4,000 185 Ericsson Telephone ADR 2,700 106 GTE 4,100 180 ------ 518 ------ CONSUMER CYCLICALS (10.5%) American Standard* 7,500 336 Borders Group* 6,000 145 Carnival 11,600 478 Costco * 5,900 194 CUC International* 12,900 333 Federated Department Stores* 7,300 254 Gannett 2,800 276 Hasbro 10,000 284 Home Depot 7,900 545 Intimate Brands 4,100 86 Lear* 3,800 169 Marriott 2,900 178 Mattel 5,000 169 McGraw-Hill 5,000 294 Office Depot* 9,700 189 Rite Aid 4,000 200 Staples* 7,000 163 TJX 6,000 158 Tribune 6,000 288 ------ 4,739 ------ 6 ================================================================================ UNAUDITED - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- CONSUMER STAPLES (13.1%) American Stores 3,400 $ 168 Avon Products 11,200 790 Colgate-Palmolive 4,000 261 CPC International 1,000 92 CVS 6,700 343 Dial 6,100 95 Fort Howard* 4,200 213 Gillette 7,992 757 Kimberly Clark 1,600 80 Nabisco Holdings, Cl A 5,500 219 Philip Morris 17,300 768 Ralston Purina Group 2,900 238 RJR Nabisco 5,800 191 Safeway* 8,400 387 Sara Lee 6,300 262 Sysco 2,900 106 Unilever ADR 1,200 257 Viacom, Cl B* 3,000 90 Walt Disney 4,719 379 Wendy's International 8,000 207 ------ 5,903 ------ ENERGY (6.6%) Amoco 1,700 148 British Petroleum ADR 4,000 299 Dresser Industries 5,000 186 Halliburton 4,400 349 Kerr-McGee 3,500 222 Mobil 8,800 615 Royal Dutch Petroleum ADR 11,000 598 Schlumberger 2,900 362 Union Pacific Resources Group 7,901 197 ------ 2,976 ------ - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- FINANCIALS (12.8%) American International Group 1,900 $ 284 BankAmerica 7,500 484 Banc One 9,560 463 BB&T 800 36 Chase Manhattan Bank 11,700 1,136 Citicorp 2,000 241 Conseco 5,000 185 FHLMC 9,700 333 First Union 3,500 324 FNMA 5,100 222 General Re 1,800 328 Great Western Financial 3,800 204 Hartford Financial Services Group 4,400 364 Nationsbank 3,000 193 Nationwide Financial Services* 8,000 213 PMI Group 6,000 374 Travelers 3,733 235 U.S. Bancorp 300 19 Washington National 4,700 134 ------ 5,772 ------ HEALTHCARE (13.8%) Alza* 400 12 American Home Products 5,900 451 Amgen* 3,500 203 Baxter International 6,300 329 Boston Scientific* 6,347 390 Bristol-Myers Squibb 10,300 834 Columbia/HCA Healthcare 8,900 350 Eli Lilly 3,400 372 Healthsouth* 19,890 496 Johnson & Johnson 14,050 904 Medpartners* 15,300 331 7 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 CAPITAL GROWTH FUND -- CONCLUDED - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- HEALTHCARE (CONTINUED) Merck 5,400 $ 559 Schering Plough 6,500 311 SmithKline Beecham 4,100 376 Tenet Healthcare* 9,900 293 ------ 6,211 ------ TECHNOLOGY (11.4%) Automatic Data Processing 2,300 108 Cadence Design Systems* 400 13 Ceridian* 6,200 262 Cisco Systems* 7,000 470 Eastman Kodak 4,400 338 First Data 12,600 554 Hewlett Packard 2,000 112 IBM 3,000 271 Intel 6,000 851 Lucent Technologies 3,193 230 Microsoft* 6,000 758 Motorola 1,300 99 Oracle* 4,300 217 Scientific-Atlanta 6,600 144 Tandem Computers 4,500 91 Xerox 8,200 647 ------ 5,165 ------ TRANSPORTATION (0.8%) Burlington Northern Santa Fe 1,200 108 Delta Air Lines 1,500 123 Union Pacific 1,700 120 ------ 351 ------ - --------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - --------------------------------------------------------------- UTILITIES (0.5%) Enron 1,600 $ 65 Sonat 3,500 179 ------- 244 ------- Total Common Stock (Cost $34,917) 39,938 ------- PREFERRED STOCKS (1.3%) FINANCIALS (0.5%) National Australia Bank, CV to 0.3273 Shares* 8,000 224 TECHNOLOGY (0.8%) Microsoft, Ser A, CV to 1 Share 4,000 348 ------- Total Preferred Stocks (Cost $520) 572 ------- CONVERTIBLE BONDS (2.1%) Alza, CV to 12.987 Shares, (A) 0.000%, 07/14/14 $400 178 Office Depot, CV to 29.2635 Shares, (A) 0.000%, 12/11/07 300 201 USA Waste Services, CV to 22.9594 Shares, Callable 02/01/00 @ 101.6 4.000%, 02/01/02 200 215 WMX Technologies, CV to 26.078 Shares 2.000%, 01/24/05 400 372 ------- Total Convertible Bonds (Cost $910) 966 ------- 8 ================================================================================ UNAUDITED - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- REPURCHASE AGREEMENT (7.4%) Morgan Stanley 6.05%, dated 06/30/97, matures 07/01/97, repurchase price $3,324,828 (collateralized by various FNMA obligations, total par value $3,498,000, 7.146%-8.004%, 12/01/24- 10/01/32: total market value $3,393,214) $3,325 $ 3,325 ------- Total Repurchase Agreement (Cost $3,325) 3,325 ------- Total Investments (99.2%) (Cost $39,672) 44,801 ------- OTHER ASSETS AND LIABILITIES, NET (0.8%) 340 ------- - ------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------- NET ASSETS: Portfolio Shares (unlimited authorization -- no par value) based on 2,845,350 outstanding shares of beneficial interest $35,359 Accumulated net realized gain on investments 4,655 Net unrealized appreciation on investments 5,129 Overdistribution net investment income (2) ------- Total Net Assets (100.0%) $45,141 ------- Net Asset Value, Offering Price and Redemption Price Per Share $15.86 ======= ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS CV -- CONVERTIBLE SECURITY FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATIONs FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION SER -- SERIES *NON-INCOME PRODUCING SECURITY (A)ZERO COUPON BOND THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 9 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 INVESTMENT GRADE BOND FUND - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- CORPORATE OBLIGATIONS (58.3%) American General Finance 6.875%, 07/01/99 $150 $151 Aristar 6.750%, 05/15/99 500 503 Associates of North America, MTN 6.650%, 08/30/99 100 100 AT&T Capital, MTN 6.920%, 04/29/99 250 252 Bear Stearns 7.000%, 03/01/07 300 295 General Electric Capital 6.660%, 05/01/18 150 151 General Motors Acceptance 7.125%, 05/01/01 300 303 General Motors Acceptance, MTN 6.750%, 11/04/04 200 196 Homeside Lending, MTN 6.875%, 05/15/00 250 250 Ikon Capital, MTN 6.730%, 06/15/01 150 149 International Lease Finance 6.700%, 04/30/99 300 302 Lockheed Martin 6.550%, 05/15/99 50 50 Morgan Stanley Group 6.875%, 03/01/07 200 197 Philip Morris 7.250%, 09/15/01 300 302 7.500%, 04/01/04 150 152 RHG Finance 8.875%, 10/01/05 200 218 - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- Salomon 6.500%, 03/01/00 $ 350 $ 348 6.750%, 02/15/03 200 195 Service International 7.375%, 04/15/04 250 255 Sunamerica 6.200%, 10/31/99 250 249 US West Capital Funding 7.300%, 01/15/07 150 151 ------ Total Corporate Obligations (Cost $4,758) 4,769 ------ U.S. TREASURY OBLIGATIONS (24.1%) U.S. Treasury Bonds 7.500%, 11/15/16 450 481 8.125%, 08/15/19 1,050 1,198 6.625%, 02/15/27 250 245 U.S. Treasury Note 6.500%, 05/31/02 50 50 ------ Total U.S. Treasury Obligations (Cost $1,925) 1,974 ------ U.S. GOVERNMENT AGENCY (11.4%) FHLMC 7.500%, 09/01/03 274 280 FNMA 7.000%, 10/01/03 650 652 ------ Total U.S. Government Agency (Cost $936) 932 ------ 10 ================================================================================ UNAUDITED - -------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------- REPURCHASE AGREEMENT (5.4%) Lehman Brothers 5.38%, dated 06/30/97, matures 07/01/97, repurchase price $443,830 (collateralized by U.S. Treasury Note, par value $431,660, 7.00%, 07/15/06: market value $459,808) $444 $ 444 ------ Total Repurchase Agreement (Cost $444) 444 ------ Total Investments (99.2%) (Cost $8,063) 8,119 ------ OTHER ASSETS AND LIABILITIES, NET (0.8%) 67 ------ - ------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------- NET ASSETS: Portfolio Shares (unlimited authorization -- no par value) based on 827,761 outstanding shares of beneficial interest $8,204 Accumulated net realized loss on investments (74) Net unrealized appreciation on investments 56 ------ Total Net Assets (100.0%) $8,186 ====== Net Asset Value, Offering Price and Redemption Price Per Share $9.89 ====== FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 11 SCHEDULE OF INVESTMENTS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 INTERNATIONAL EQUITY FUND - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- FOREIGN COMMON STOCKS (92.0%) ARGENTINA (1.7%) YPF Sociedad Anonima, Cl D, ADR 4,300 $132 ---- AUSTRALIA (2.6%) Australian & New Zealand Banking Group 9,600 72 QBE Insurance 22,000 133 ---- 205 ---- AUSTRIA (0.9%) VAE 700 69 ---- BRAZIL (1.7%) Telebras ADR* 900 137 ---- CANADA (3.2%) Bombardier, Cl B 3,300 75 CAE 8,115 65 Suncor 4,000 107 ---- 247 ---- CZECH REPUBLIC (0.7%) SPT Telecom* 500 53 ---- DENMARK (0.7%) Sophus Berendsen, Cl B 400 58 ---- FINLAND (5.6%) Cultor, Series 2 2,000 105 Finnlines 1,400 43 Metra, Cl B 1,700 51 Nokia ADR 1,800 133 UPM-Kymmene 4,500 104 ---- 436 ---- FRANCE (7.6%) Accor 720 108 Christian Dior 620 102 Credit Local de France 700 68 Lafarge 1,200 75 SGS -Thomson Microelectronics* 1,000 80 Technip 1,400 162 ---- 595 ---- - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- GERMANY (3.5%) Siemens 900 $ 54 Veba 1,200 68 Volkswagen 200 152 ---- 274 ---- GREECE (2.2%) Greek Telecom 7,260 170 Greek Telecom Rights* 185 -- ---- 170 ---- HONG KONG (1.2%) HSBC Holdings 3,235 97 ---- INDONESIA (1.6%) Modern Photo Film, F 24,000 85 United Tractors, F 10,000 37 ---- 122 ---- ISRAEL (3.4%) ECI Telecom 4,200 125 Technomatrix Technologies Limited* 4,300 140 ---- 265 ---- ITALY (3.7%) Banca Popolare di Milano 6,300 38 ENI 24,600 139 Istituto Bancario san Paolo di Torino 4,000 29 Saipem 16,500 84 ---- 290 ---- JAPAN (7.9%) Canon 3,000 82 FCC 3,000 76 Fuji Photo Film 2,000 80 Honda Motor 3,000 90 Sony ADR 1,200 106 TDK 1,000 73 Terumo 6,000 115 ---- 622 ---- MALAYSIA (1.0%) UMW Holdings 16,000 75 ---- 12 ================================================================================ UNAUDITED - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- NETHERLANDS (4.9%) Akzo 500 $ 68 Hollandsche Beton Groep 411 94 Ing Groep 2,639 122 KPN 900 35 Phillips Electronics 900 64 ---- 383 ---- NEW ZEALAND (0.5%) Fletcher Challenge Building 14,000 42 ---- PANAMA (1.4%) Banco Latinamericano de Exportaciones 2,500 108 ---- PERU (1.8%) CPT Telefoncia del Peru 3,600 94 Credicorp 2,300 51 ---- 145 ---- PORTUGAL (1.1%) Portugal Telecom ADR 2,200 88 ---- SINGAPORE (1.2%) Elec & Eltek International 17,000 95 ---- SOUTH AFRICA (4.2%) De Beers Consolidated Mines ADR 2,200 81 First National Bank 11,800 102 Gencor 15,000 69 Sasol 6,000 79 ---- 331 ---- SPAIN (3.2%) Financiera Alba 800 102 Telefonica de Espana 5,200 150 ---- 252 ---- SWEDEN (2.6%) Castellum AB* 10,100 76 Ericsson Telephone, Series B 1,800 71 Skandia Forsakrings 1,500 55 ---- 202 ---- - ------------------------------------------------------------- SHARES VALUE (000) - ------------------------------------------------------------- SWITZERLAND (5.9%) ABB 85 $ 129 Nestle 75 99 Novartis, Registered 150 239 ------ 467 ------ TURKEY (0.5%) Sabanci 4,800 43 ------ UNITED KINGDOM (15.0%) Avis Europe* 38,000 86 Bank of Ireland 8,200 90 Bass 8,600 105 BOC Group 4,800 84 Compass Group 1,600 18 Granada Group 4,800 63 Halma 11,500 31 London Forfaiting 16,200 107 Morgan Crucible 9,400 70 Powerscreen International 5,000 55 Reckit & Colman 8,200 122 Reuters Holdings 7,000 74 Select Appointments 9,400 73 SmithKline Beecham 1,300 119 Vodafone Group 17,200 84 ------ 1,181 ------ UNITED STATES (0.5%) Rhone-Poulenc Rorer 400 36 ------ Total Foreign Common Stocks (Cost $6,439) 7,220 ------ Total Investments (92.0% of Net Assets) (Cost $6,439) $7,220 ====== ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS F -- FOREIGN REGISTRY SHARES * NON-INCOME PRODUCING SECURITY THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 13 STATEMENT OF ASSETS AND LIABILITIES (000) ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 UNAUDITED ------------- INTERNATIONAL EQUITY FUND ------------- Assets: Investments at Market Value (Cost $6,439) ........................ $7,220 Cash and Foreign Currency ........................................ 739 Receivables for Investment Securities Sold ....................... 45 Receivables for Portfolio Shares Sold ............................ 21 Other Assets ..................................................... 30 ------ Total Assets ..................................................... 8,055 ------ Liabilities: Payables for Investment Securities Purchased ..................... 189 Accrued Expenses ................................................. 16 ------ Total Liabilities ................................................ 205 ------ Net Assets: Portfolio Shares (Unlimited Authorization -- No Par Value) Based on 659,471 Outstanding Shares of Beneficial Interest ..... 7,068 Undistributed Net Investment Income .............................. 34 Accumulated Net Realized Loss on Investments ..................... (29) Accumulated Net Realized Loss on Foreign Currency Transactions ... (4) Net Unrealized Appreciation on Investments ....................... 781 ------ Total Net Assets ................................................. $7,850 ====== Net Asset Value, Offering and Redemption Price Per Share ............ $11.90 ====== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 14 STATEMENT OF OPERATIONS (000) ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997 UNAUDITED
VALUE INCOME MID-CAP CAPITAL INVESTMENT INTERNATIONAL STOCK EQUITY GROWTH GRADE EQUITY FUND FUND FUND BOND FUND FUND ---------- -------- -------- ---------- ------------ Investment Income: Interest Income .............................................. $ 75 $ 45 $ 234 $278 $ 13 Dividend Income .............................................. 615 61 100 -- 64 Less: Foreign Taxes Withheld ................................. -- -- -- -- (8) ------ ------ ------ ---- ---- Total Investment Income .................................. 690 106 334 278 69 ------ ------ ------ ---- ---- Expenses: Investment Advisory Fees ..................................... 167 94 199 31 27 Less: Investment Advisory Fees Waived ........................ (64) (63) (81) (31) (27) Less: Reimbursement from Advisor ............................. -- -- -- (21) (33) Administrator Fees ........................................... 31 31 31 31 37 Custody Fees ................................................. 16 8 13 6 6 Transfer Agent Fees .......................................... 13 9 8 5 9 Professional Fees ............................................ 14 6 11 3 2 Trustee Fees ................................................. 4 2 3 2 -- Registration Fees ............................................ 4 1 4 -- 2 Printing Expenses ............................................ 6 3 5 3 1 Pricing Fees ................................................. 1 1 1 -- 9 Insurance and Other Fees ..................................... 6 1 4 1 1 Amortization of Deferred Organization Costs .................. 1 1 1 1 1 ------ ------ ------ ---- ---- Total Expenses ........................................... 199 94 199 31 35 ------ ------ ------ ---- ---- Net Investment Income .................................. 491 12 135 247 34 ------ ------ ------ ---- ---- Net Realized Gain (Loss) on Securities Sold .................. 2,589 645 3,311 (34) (29) Net Realized Loss on Foreign Currency Transactions -- -- -- -- (5) Net Unrealized Appreciation on Investments ................... 3,406 738 3,734 20 767 ------ ------ ------ ---- ---- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency ..................... 5,995 1,383 7,045 (14) 733 ------ ------ ------ ---- ---- Increase in Net Assets from Operations .......................... $6,486 $1,395 $7,180 $233 $767 ====== ====== ====== ==== ==== Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 15 STATEMENT OF CHANGES IN NET ASSETS (000) ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS UNAUDITED
VALUE INCOME STOCK FUND MID-CAP EQUITY FUND CAPITAL GROWTH FUND -------------------- ---------------------- -------------------- 01/01/97- 01/01/96- 01/01/97- 01/01/96- 01/01/97- 01/01/96- 06/30/97 12/31/96 06/30/97 12/31/96 06/30/97 12/31/96 --------- --------- ---------- ---------- --------- --------- Investment Activities: Net Investment Income ....................................... $ 491 $ 361 $ 12 $ 47 $ 135 $ 139 Net Realized Gain (Loss) on Investments and Foreign Currency Transactions ..................................... 2,589 1,122 645 702 3,311 1,357 Net Unrealized Appreciation (Depreciation) on Investments ... 3,406 1,133 738 637 3,734 1,199 ------- ------- ------- ------- ------- ------- Increase in Net Assets Resulting from Operations ............... 6,486 2,616 1,395 1,386 7,180 2,695 ------- ------- ------- ------- ------- ------- Distributions to Shareholders: Net Investment Income ....................................... (499) (355) (13) (47) (138) (138) Capital Gains -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- Total Distributions ..................................... (499) (355) (13) (47) (138) (138) ------- ------- ------- ------- ------- ------- Capital Transactions: Proceeds from Shares Issued ................................. 17,682 24,660 4,210 9,578 14,109 18,759 Reinvestment of Cash Distributions .......................... 232 355 10 47 61 139 Cost of Shares Repurchased .................................. (1,196) (75) (1,500) (79) (1,260) (44) ------- ------- ------- ------- ------- ------- Increase in Net Assets from Capital Transactions ............ 16,718 24,940 2,720 9,546 12,910 18,854 ------- ------- ------- ------- ------- ------- Total Increase in Net Assets ............................ 22,705 27,201 4,102 10,885 19,952 21,411 ------- ------- ------- ------- ------- ------- Net Assets: Beginning of Period ......................................... 31,216 4,015 14,294 3,409 25,189 3,778 ------- ------- ------- ------- ------- ------- End of Period ............................................... $53,921 $31,216 $18,396 $14,294 $45,141 $25,189 ======= ======= ======= ======= ======= ======= Shares Issued and Redeemed: Shares Issued ............................................... 1,343 2,116 349 877 994 1,567 Shares Issued in Lieu of Cash Distributions ................. 18 30 1 4 5 11 Shares Redeemed ............................................. (85) (6) (120) (7) (82) (4) ------- ------- ------- ------- ------- ------- Net Share Transactions .................................... 1,276 2,140 230 874 917 1,574 ======= ======= ======= ======= ======= ======= INVESTMENT GRADE BOND INTERNATIONAL FUND EQUITY FUND ------------------------ ------------------------ 01/01/97- 01/01/96- 01/01/97- 11/07/96*- 06/30/97 12/31/96 06/30/97 12/31/96 ----------- ----------- ------------ ---------- Investment Activities: Net Investment Income ....................................... $ 247 $ 325 $ 34 $ 1 Net Realized Gain (Loss) on Investments and Foreign Currency Transactions ..................................... (34) (40) (34) 1 Net Unrealized Appreciation (Depreciation) on Investments ... 20 (34) 767 14 ------- ------- ------- ------ Increase in Net Assets Resulting from Operations ............... 233 251 767 16 ------- ------- ------- ------ Distributions to Shareholders: Net Investment Income ....................................... (247) (325) -- (1) Capital Gains -- -- -- -- ------- ------- ------- ------ Total Distributions ..................................... (247) (325) -- (1) ------- ------- ------- ------ Capital Transactions: Proceeds from Shares Issued ................................. 1,656 5,002 6,344 979 Reinvestment of Cash Distributions .......................... 206 325 -- 1 Cost of Shares Repurchased .................................. (1,701) (329) (256) -- ------- ------- ------- ------ Increase in Net Assets from Capital Transactions ............ 161 4,998 6,088 980 ------- ------- ------- ------ Total Increase in Net Assets ............................ 147 4,924 6,855 995 ------- ------- ------- ------ Net Assets: Beginning of Period ......................................... 8,039 3,115 995 -- ------- ------- ------- ------ End of Period ............................................... $ 8,186 $ 8,039 $ 7,850 $ 995 ======= ======= ======= ====== Shares Issued and Redeemed: Shares Issued ............................................... 168 506 584 98 Shares Issued in Lieu of Cash Distributions ................. 21 33 -- -- Shares Redeemed ............................................. (172) (33) (22) -- ------- ------- ------- ------ Net Share Transactions .................................... 17 506 562 98 ======= ======= ======= ====== *Commencement of Operations Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 16 & 17 FINANCIAL HIGHLIGHTS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS FOR THE PERIODS FROM INCEPTION THROUGH JUNE 30, 1997 UNAUDITED FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET NET REALIZED AND NET ASSET VALUE INVESTMENT UNREALIZED GAINS (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ---------- ------------------------- --------------------- ---------------------- VALUE INCOME STOCK FUND 1997** $12.41 $0.14 $1.81 $(0.14) $ -- 1996 10.67 0.23 1.74 (0.23) -- 1995 (1) 10.00 0.06 0.67 (0.06) -- MID-CAP EQUITY FUND (A) 1997** $11.86 $0.01 $0.96 $(0.01) $ -- 1996 10.27 0.06 1.59 (0.06) -- 1995 (1) 10.00 0.05 0.27 (0.05) -- CAPITAL GROWTH FUND 1997** $13.06 $0.05 $2.80 $(0.05) $ -- 1996 10.66 0.12 2.40 (0.12) -- 1995 (1) 10.00 0.04 0.66 (0.04) -- INVESTMENT GRADE BOND FUND 1997** $ 9.92 $0.29 $(0.03) $(0.29) $ -- 1996 10.25 0.54 (0.33) (0.54) -- 1995 (1) 10.00 0.13 0.25 (0.13) -- INTERNATIONAL EQUITY FUND 1997** $10.16 $0.05 $1.69 $ -- $ -- 1996 (2) 10.00 0.01 0.16 (0.01) -- RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS OF PERIOD RETURN PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ------ ------------ ------------------ ------------------ ------------------- VALUE INCOME STOCK FUND 1997** $14.22 15.81% $53,921 0.95% 2.35% 1.25% 1996 12.41 18.64 31,216 0.95 2.45 1.95 1995 (1) 10.67 7.31* 4,015 0.95 2.98 5.72 MID-CAP EQUITY FUND (A) 1997** $12.82 8.18% $18,396 1.15% 0.14% 1.92% 1996 11.86 16.05 14,294 1.15 0.58 2.79 1995 (1) 10.27 3.19* 3,409 1.15 2.22 6.34 CAPITAL GROWTH FUND 1997** $15.86 21.87% $45,141 1.15% 0.78% 1.62% 1996 13.06 23.75 25,189 1.15 1.15 2.43 1995 (1) 10.66 6.96* 3,778 1.15 1.69 6.18 INVESTMENT GRADE BOND FUND 1997** $ 9.89 2.64% $ 8,186 0.75% 5.88% 2.00% 1996 9.92 2.29 8,039 0.75 5.54 2.78 1995 (1) 10.25 3.68* 3,115 0.75 5.04 6.05 INTERNATIONAL EQUITY FUND 1997** $11.90 17.13% $7,850 1.60% 1.62% 4.41% 1996 (2) 10.16 1.70* 995 1.60 1.83 31.39 RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS PORTFOLIO AVERAGE (EXCLUDING WAIVERS TURNOVER COMMISSION AND REIMBURSEMENTS) RATE RATE(3) ------------------ --------- ---------- VALUE INCOME STOCK FUND 1997** 2.05% 47.87% $0.059 1996 1.45 79.80 0.054 1995 (1) (1.79) 7.17 n/a MID-CAP EQUITY FUND (A) 1997** (.63)% 74.61% $0.055 1996 (1.06) 139.60 0.053 1995 (1) (2.97) 13.29 n/a CAPITAL GROWTH FUND 1997** 0.31% 94.94% $0.051 1996 (0.13) 148.48 0.053 1995 (1) (3.34) 8.05 n/a INVESTMENT GRADE BOND FUND 1997** 4.63% 162.45% n/a 1996 3.51 303.30 n/a 1995 (1) (0.26) 108.55 n/a INTERNATIONAL EQUITY FUND 1997** (1.19)% 38.55% $0.033 1996 (2) (27.96) -- 0.062 (1) Commenced operations on October 2, 1995. All ratios for the period have been annualized. (2) Commenced operations on November 7, 1996. All ratios for the period have been annualized. (3) Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate is only required for fiscal years beginning after September 1, 1995. * Returns are for the period indicated and have not been annualized. ** For the six-month period ended June 30, 1997. All ratios for the period except total return have been annualized. (A) During the fiscal year ended December 31, 1996, the Aggressive Growth Fund changed its name to the Mid-Cap Equity Fund. Amounts designated as "--" are either zero or rounded to zero.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 18 & 19 NOTES TO FINANCIAL STATEMENTS ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 1. Organization: The STI Classic Variable Trust (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated April 18, 1995. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with five funds: the Value Income Stock Fund, the Mid-Cap Equity Fund, the Capital Growth Fund, the International Equity Fund (collectively "the Equity Funds") and the Investment Grade Bond Fund. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Fund's prospectus provides a description of each Fund's investment objective policies and strategies. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust. These policies are in conformity with generally accepted accounting principles. SECURITY VALUATION -- Investments in equity securities that are traded on a national securities exchange (or reported on the NASDAQ national market system) are valued at the last quoted sales price if readily available for such equity securities on each business day. If there is no such reported sale, these securities, and unlisted securities for which market quotations are readily available, are valued at the most recently quoted bid price. Foreign securities in the International Equity Fund are valued based upon quotations from the primary market in which they are traded. Debt obligations exceeding sixty days to maturity for which market quotations are readily available are valued at the most recently quoted bid price. Debt obligations with sixty days or less until maturity may be valued either at the most recently quoted bid price or at their amortized cost. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the trade date of the security purchase or sale. Dividend income is recognized on ex-dividend date, and interest income is recognized on an accrual basis and includes, where applicable, the pro rata amortization of premium or accretion of discount. The cost used in determining net realized capital gains and losses on the sale of securities are those of the specific securities sold, adjusted for the accretion and amortization of purchase discounts and premiums during the applicable holding period. Purchase discounts and premiums on securities held by the Investment Grade Bond and the Equity Funds are accreted and amortized to maturity using the scientific interest method, which approximates the effective interest method. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the repurchase agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is calculated on each business day. In general, it is computed by dividing the assets of each Fund, less its liabilities, by the number of outstanding shares of the respective 20 ================================================================================ UNAUDITED class of the Fund. The offering price per share for the shares of the Investment Grade Bond and Equity Funds is the net asset value per share. FOREIGN CURRENCY TRANSACTIONS -- With respect to the International Equity Fund, the books and records are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: (I) market value of investment securities, assets and liabilities at the current rate of exchange; and (II) purchases and sales of investment securities, income, and expenses at the relevent rates of exchange prevailing on the respective dates of such transactions. The International Equity Fund does not isolate the portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to change in market prices of equity securities. The International Equity Fund reports certain foreign currency-related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for Federal income tax purposes. OTHER -- Distributions from net investment income for the Investment Grade Bond Fund are declared daily and paid monthly to shareholders. Distributions from net investment income for the Value Income Stock Fund, the Mid-Cap Equity Fund and the Capital Growth Fund are declared and paid quarterly to shareholders. Distributions from net investment income for the International Equity Fund are declared and paid annually to shareholders. Any net realized capital gains are distributed to shareholders at least annually. Expenses related to a specific Fund are charged to that Fund. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. USE OF ESTIMATES -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. 3. Administration and Distribution Agreements The Trust and SEI Fund Resources (the "Administrator") are parties to an administration agreement (the "Administration Agreement") dated August 18, 1995. Under the terms of the Administration Agreement the Administrator is entitled to a fee, subject to a minimum, (expressed as a percentage of the combined average daily net assets of the Trust and the STI Classic Funds) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion, and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated August 18, 1995 under which Federated Services Company provides transfer agency services to the Trust. The Trust and SEI Investments Distribution Co. ("the Distributor") are parties to a Distribution Agreement dated August 18, 1995. The Distributor receives no fees for its services under this agreement. 21 NOTES TO FINANCIAL STATEMENTS (Concluded) ================================================================================ STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1997 4. Investment Advisory Agreement Investment advisory services are provided to the Trust by STI Capital Management, N.A. ("STI Capital"). Under the terms of the investment advisory agreements, STI Capital is entitled to receive a fee from the Fund, computed daily and paid monthly, at an annual rate of .74%, 1.15%, .80%, 1.15% and 1.25% of the average daily net assets of the Investment Grade Bond Fund, Capital Growth Fund, Value Income Stock Fund, Mid-Cap Equity Fund and International Equity Fund, respectively. STI Capital has voluntarily agreed to waive all or a portion of its fees (and to reimburse Funds' expenses) in order to limit operating expenses. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta acts as Custodian for all the Funds except the International Equity Fund which has a custodian agreement with the Bank of New York. Fees of the Custodian are paid on the basis of net assets. The Custodian plays no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 5. Organizational Costs and Transactions with Affiliates Organizational costs have been capitalized by the Trust and are being amortized on a straight line basis over a maximum of sixty months. In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof by the Trust will be reduced by the unamortized organizational cost in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 6. Investment Transactions The cost of security purchases and the proceeds from security sales, excluding short-term investments, for the period ended June 30, 1997 were as follows: U.S. GOVT. U.S. GOVT. PURCHASES SALES PURCHASES SALES (000) (000) (000) (000) --------- -------- --------- --------- Value Income Stock Fund ...... $31,595 $18,897 $ -- $ -- Mid-Cap Equity Fund .......... 13,677 11,176 -- -- Capital Growth Fund .......... 41,830 30,049 -- -- Investment Grade Bond Fund ................. 5,445 3,923 7,570 8,984 International Equity Fund .... 7,256 1,498 -- -- At June 30, 1997, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes was not materially different from amounts reported for financial reporting purposes. The aggregate gross unrealized appreciation and depreciation for securities held by the Investment Grade Bond and Equity Funds at June 30, 1997 was as follows: APPRECIATED DEPRECIATED NET UNREALIZED SECURITIES SECURITIES APPRECIATION (000) (000) (000) ----------- ----------- -------------- Value Income Stock Fund ...... $5,343 $(607) $4,736 Mid-Cap Equity Fund .......... 2,133 (692) 1,441 Capital Growth Fund .......... 5,725 (596) 5,129 Investment Grade Bond Fund ... 74 (18) 56 International Equity Fund .... 845 (64) 781 At December 31, 1996 the following Fund had a capital loss carryforward: AMOUNT EXPIRES ------ ------- Investment Grade Bond Fund $2,212 2004 22 ================================================================================ UNAUDITED 7. Concentration of Credit Risk: The Investment Grade Bond Fund invests primarily in investment grade obligations rated at least BBB or better by S & P or Baa or better by Moody's. Changes by recognized rating agencies in the ratings of any fixed income security or in the ability of an issuer to make payments of interest and principal may affect the value of these investments. 23 Investment Advisor: STI Capital Management, N.A. STI Classic Variable Trust Funds are not deposits, are not insured or guaranteed by the FDIC or any other government agency, and are not endorsed by and do not constitute obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment in the Funds involves risk, including the possible loss of principal. There is no guarantee that any STI Classic Variable Trust Fund will achieve its investment objective. The STI Classic Variable Trust Funds are advised by an affiliate of SunTrust Banks, Inc. Distributor: SEI Investments Distribution Co. This information must be preceded or accompanied by a current prospectus for each Fund described. -----END PRIVACY-ENHANCED MESSAGE-----