-----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, G+v6rh6nbtjDsxQ+en5ai3e235P9nOjhakyh8+X6knrrIZNdPe+DMvVV+8BoDkeh 9+4QZU3RmkGB19GyfG9q6A== /in/edgar/work/20000808/0000935069-00-000399/0000935069-00-000399.txt : 20000921 0000935069-00-000399.hdr.sgml : 20000921 ACCESSION NUMBER: 0000935069-00-000399 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000530 FILED AS OF DATE: 20000808 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: 688458 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 0001.txt STI CLASSIC INSTITUTIONAL 5/31/00 ANNUAL .............................................................................. FINANCIAL REPORT .............................................................................. STI CLASSIC FUNDS .............................................................................. A Family of Mutual Funds .............................................................................. CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND CLASSIC INSTITUTIONAL U.S. GOVERNMENT SECURITIES MONEY MARKET FUND CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND May 31, 2000 (LOGO) [GRAPHIC OMITTED] Dear Valued STI Classic Trust Shareholder: The period corresponding to the STI Classic Funds' fiscal year ending May 31, 2000 is perhaps one of the most unusual in the history of modern financial markets. The U.S. economy continued on its growth path, extending the longest period of uninterrupted expansion. In fact, economic growth actually accelerated, prompting the Federal Reserve (the "Fed") to announce a series of rate increases. The capital markets responded by rewarding risk in equity securities and punishing it in fixed income markets. On the equity side, technology stocks were prominent, as evidenced by the 37.7% rise in the NASDAQ Composite Index and even greater 59.1% appreciation in the larger stocks of the NASDAQ 100 Index. Small cap stocks did well, predominantly because of technology and biotechnology stocks; the S&P 600 Small Cap Index rose 14.2%. Mid-cap stocks did even better, with the S&P 400 Mid-Cap Index up 21.5%, but again due to technology. Overall, many stocks did not do well as Fed tightening weighed heavily on performance. The broader S&P 500 Composite Index was up a more modest 10.5%, while the Dow Jones Industrial Average only achieved a 1.2% positive return. Within style categories, growth stocks enjoyed a record advantage over value stocks, a condition which began to reverse only in the last three months of the STI Classic Funds fiscal year. On the fixed income side, total returns in bonds were modest, as typified by the 1.9% gain in the Lehman U.S. Government/Corporate Bond Index for longer term taxable bonds, the 3.5% return in the Merrill Lynch 1-5 Year U.S. Corporate/Government Index, and very modest returns in short to intermediate-term municipal bonds. Within the bond arena, investment grade and high yield bonds were under pressure, while top quality Government bonds prospered. There was a disconnect between risk/reward as equity investors were very positive and bond investors were negative. As the new fiscal year begins for the STI Classic Fund family, we are encouraged by the broadening out of the equity market. Technology stocks have recently corrected significantly and small and mid-caps have done better. Importantly, value oriented stocks outperformed in March/April/May. Tight Fed policy and rising money market rates due to rapid economic growth are not good for stocks. Thus, recent signs of slower economic growth are welcome and stocks will do better once the Fed suspends its tight monetary stance. We also believe the very wide yield spreads available in non-Government fixed income securities will prove rewarding over the next 12-24 months. The STI Classic Funds have never been stronger in terms of product breadth and potential for long-term growth. We thank all Fund shareholders for their confidence in the STI Classic Family. We will work hard to deliver competitive results in the months and years ahead. Sincerely /s/signature omitted Douglas S. Phillips President and Chief Investment Officer Trusco Capital Management, Inc. 1 STATEMENT OF NET ASSETS - ------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND - ------------------------------------------------------------------------------- FACE AMOUNT (000)VALUE (000) - ------------------------------------------------------------------------------- COMMERCIAL PAPER (22.0%) FINANCE (2.2%) Sigma Finance 5.750%, 07/20/00 $25,000 $ 25,000 7.400%, 05/25/01 25,000 25,000 ---------- 50,000 ---------- INDUSTRIAL (2.8%) DaimlerChrysler 6.040%, 06/21/00 30,000 29,899 General Electric Capital 5.730%, 08/01/00 35,000 34,660 ---------- 64,559 ---------- INVESTMENT BANKERS/BROKER DEALERS (8.4%) Bear Stearns 6.100%, 06/01/00 40,000 40,000 Credit Suisse First Boston 5.750%, 07/14/00 25,000 25,000 6.200%, 07/25/00 30,000 29,721 Morgan Stanley Dean Witter (B) 6.880%, 06/01/00 50,000 50,000 6.880%, 06/01/00 50,000 50,000 ---------- 194,721 ---------- PERSONAL CREDIT INSTITUTIONS (8.6%) Ford Motor Credit 6.410%, 06/28/00 100,000 99,519 GMAC 6.070%, 06/28/00 30,000 29,863 6.150%, 07/12/00 70,000 69,510 ---------- 198,892 ---------- Total Commercial Paper (Cost $508,172) 508,172 ---------- CORPORATE OBLIGATIONS (44.7%) BANKS (13.8%) AmSouth Bank (B) 6.850%, 06/01/00 50,000 49,986 - ------------------------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ BANKS--CONTINUED Branch Banking & Trust (B) 6.870%, 06/01/00 $40,000 $ 40,000 6.880%, 06/01/00 35,000 34,989 Canadian Imperial Bank 7.070%, 05/03/01 40,000 39,997 First Union (B) 6.870%, 06/01/00 50,000 50,000 6.910%, 06/01/00 25,000 25,000 Key Bank (B) 6.910%, 06/01/00 39,000 38,998 Wachovia Bank, MTN (B) 6.119%, 06/05/00 40,000 39,997 ---------- 318,967 ---------- ENTERTAINMENT (3.2%) Tampa Bay Devil Rays (A) (B) 6.710%, 06/01/00 50,745 50,745 Walt Disney (A) 4.200%, 03/15/01 25,000 24,525 ---------- 75,270 ---------- FINANCE (8.9%) Beneficial, MTN (B) 6.181%, 06/01/00 10,000 10,000 Beta Finance, MTN 5.520%, 06/12/00 25,000 25,000 Beta Finance, MTN (B) 6.805%, 06/07/00 30,000 30,000 7.010%, 08/16/00 30,000 30,000 Household Finance, MTN (B) 7.050%, 06/01/00 30,000 29,995 Sigma Finance (A) 6.570%, 01/10/01 20,000 20,000 Sigma Finance, MTN 6.800%, 03/30/01 30,000 30,000 UBS Finance 6.475%, 01/08/01 30,000 29,994 ---------- 204,989 ---------- 2 - ----------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ----------------------------------------------------------------------------- INDUSTRIAL (1.7%) Anheuser Busch (B) 6.440%, 06/16/00 $40,000 $ 39,999 ---------- INVESTMENT BANKERS/BROKER DEALERS (15.8%) Bear Stearns 6.500%, 07/05/00 25,000 25,008 Bear Stearns, MTN (B) 6.900%, 06/01/00 40,000 40,000 6.910%, 06/01/00 35,000 35,000 Credit Suisse First Boston, MTN (A) 5.590%, 06/08/00 10,000 10,000 Credit Suisse First Boston, MTN (A) (B) 6.900%, 06/01/00 35,000 35,000 Goldman Sachs, MTN, Ser B (B) 7.080%, 06/01/00 30,000 30,013 Goldman Sachs, MTN 6.100%, 09/25/00 30,000 30,000 6.500%, 12/22/00 20,000 20,000 JP Morgan, MTN (B) 6.281%, 06/03/00 40,000 40,000 Merrill Lynch, MTN 6.735%, 02/28/01 25,000 24,997 7.260%, 05/15/01 50,000 49,995 Merrill Lynch, MTN (B) 6.985%, 06/01/00 25,000 24,999 ---------- 365,012 ---------- LEASING COMPANY (1.3%) Xerox Credit, MTN 5.635%, 07/14/00 30,000 29,999 ---------- Total Corporate Obligations (Cost $1,034,236) 1,034,236 ---------- ------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT (8.4%) Albertson's (A) (B) 6.503%, 06/14/00 $40,000 $ 39,998 Canadian Imperial Bank 6.670%, 02/12/01 40,000 39,987 First USA Bank 6.040%, 08/04/00 40,000 40,000 Royal Bank of Canada 6.180%, 10/25/00 35,000 34,991 6.470%, 01/10/01 40,000 39,988 ---------- Total Certificates of Deposit (Cost $194,964) 194,964 ---------- TAXABLE MUNICIPAL BONDS (2.4%) California Housing Finance Agency, MBIA (B) 6.650%, 08/01/00 31,715 31,715 Mt. Vernon Multi-Family Housing Notes (B) 6.700%, 07/01/00 23,000 23,000 ---------- Total Taxable Municipal Bonds (Cost $54,715) 54,715 ---------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (5.2%) FHLB (B) 6.168%, 06/07/00 50,000 50,000 FHLMC, MTN 6.255%, 01/12/01 20,000 19,983 FNMA, MTN, Ser B 6.320%, 02/02/01 50,000 49,968 ---------- Total U.S. Agency Mortgage-Backed Obligations (Cost $119,951) 119,951 ---------- 3 STATEMENT OF NET ASSETS - ------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ BANK NOTES (3.5%) American Express Centurion (B) 6.910%, 06/01/00 $35,000 $ 35,000 Branch Banking and Trust (B) 7.010%, 06/05/00 20,000 20,000 FCC National Bank 6.065%, 08/14/00 25,000 24,998 ---------- Total Bank Notes (Cost $79,998) 79,998 ---------- REPURCHASE AGREEMENTS (10.2%) ABN-Amro 6.440%, dated 05/31/00, matures 06/01/00, repurchase price $63,011,270 (collateralized by various FHLMC obligations: total market value $64,260,000) (C) 63,000 63,000 Barclays 6.440%, dated 05/31/00, matures 06/01/00, repurchase price $62,705,360 (collateralized by a FNMA and SLMA obligations: total market value $63,948,043) (C) 62,694 62,694 Deutsche Bank 6.440%, dated 05/31/00, matures 06/01/00, repurchase price $42,016,473 (collateralized by a FNMA obligation: total market value $42,849,138) (C) 42,009 42,009 Merrill Lynch 6.440%, dated 05/31/00, matures 06/01/00, repurchase price $30,618,206 (collateralized by various FNMA obligations: total market value $31,227,271) (C) 30,613 30,613 - ------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--CONTINUED Warburg Dillon 6.440%, dated 05/31/00, matures 06/01/00, repurchase price $37,487,902 (collateralized by a U.S. Treasury Note: total market value 38,233,442) (C) $37,481 $ 37,481 ---------- Total Repurchase Agreements (Cost $235,797) 235,797 ---------- CASH EQUIVALENT (4.3%) Aim Liquid Assets Fund 100,000,000 100,000 ---------- Total Cash Equivalent (Cost $100,000) 100,000 ---------- Total Investments (100.7%) (Cost $2,327,833) 2,327,833 ---------- OTHER ASSETS AND LIABILITIES, NET (-0.7%) (16,148) ---------- NET ASSETS: Fund shares of Institutional Shares (unlimited authorization -- no par value based on 2,312,249,074 outstanding shares of beneficial interest 2,312,249 Distributions in excess of net investment income (565) Accumulated net realized gain on investments 1 ---------- Total Net Assets (100.0%) $2,311,685 ========== Net Asset Value, Offering Redemption Price Per Share -- Institutional Shares $ 1.00 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 9. 4 - ------------------------------------------------------------------------------- CLASSIC INSTITUTIONAL U.S. GOVERNMENT SECURITIES MONEY MARKET FUND - ------------------------------------------------------------------------------- FACE AMOUNT (000 VALUE (000) - ------------------------------------------------------------------------------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (77.8%) FHLB 5.810%, 09/15/00 $20,000 $ 19,677 5.965%, 12/01/00 20,000 19,982 4.950%, 12/04/00 20,000 19,868 6.580%, 02/09/01 15,000 15,000 FHLB (B) 6.083%, 09/01/00 35,000 35,000 6.750%, 09/22/00 40,000 39,996 6.168%, 12/20/00 50,000 50,000 FHLMCDN 6.090%, 07/13/00 35,000 34,751 6.115%, 03/16/01 15,000 14,266 6.730%, 05/24/01 15,000 13,999 FNMA 7.000%, 05/17/01 15,000 15,004 FNMA, MTN 5.460%, 06/21/00 30,000 29,999 6.445%, 02/23/01 10,00 09,989 6.625%, 03/01/01 15,000 14,999 FNMA, MTN (B) 6.770%, 09/29/00 50,000 49,995 6.735%, 11/06/00 25,000 24,990 6.449%, 11/22/00 30,000 29,989 FNMADN 5.785%, 07/07/00 20,000 19,890 5.485%, 08/11/00 20,000 19,785 5.900%, 10/06/00 20,000 19,606 6.700%, 05/10/01 10,000 9,362 ------- Total U.S. Agency Mortgage-Backed Obligations (Cost $506,147) 506,147 -------- - ------------------------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS (21.8%) ABN-Amro 6.470%, dated 05/31/00, matures 06/01/00, repurchase price $106,987,008 (collateralized by various FNMA and FHLMC obligations: total market value $109,107,139) (C) $106,968 $106,968 Deutsche Bank 6.470%, dated 05/31/00, matures 06/01/00, repurchase price $12,019,620 (collateralized by a FNMA obligation: total market value $12,257,810) (C) 12,017 12,017 Greenwich Capital 6.470%, dated 05/31/00, matures 06/01/00, repurchase price $18,760,082 (collateralized by various GNMA obligations: total market value $19,132,971) (C) 18,757 18,757 JP Morgan 6.470%, dated 05/31/00, matures 06/01/00, repurchase price $4,232,698 (collateralized by a GNMA obligation: total market value $4,316,577) (C) 4,232 4,232 ------- Total Repurchase Agreements (Cost $141,974) 141,974 -------- Total Investments (99.6%) (Cost $648,121) 648,121 -------- OTHER ASSETS AND LIABILITIES, NET (0.4%) 2,505 -------- 5 STATEMENT OF NET ASSETS - ------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 CLASSIC INSTITUTIONAL U.S. GOVERNMENT SECURITIES MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- NET ASSETS: Fund shares of Institutional Shares (unlimited authorization -- no par value) based on 650,651,141 outstanding shares of beneficial interest $650,651 Accumulated net realized loss on investments (25) -------- Total Net Assets (100.0%) $650,626 ======== Net Asset Value, Offering and Redemption Price Per Share -- Institutional Shares $ 1.00 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 9. 6 - ------------------------------------------------------------------------------- CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND - ------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (19.8%) U.S. Treasury Bills 5.980%, 08/10/00 $ 75,000 $ 74,216 5.605%, 10/12/00 190,000 186,051 U.S. Treasury Note 5.000%, 02/28/0 30,000 29,704 --------- Total U.S. Treasury Obligations (Cost $289,971 289,971 --------- REPURCHASE AGREEMENTS (76.2%) ABN-Amro 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $340,530,770 (collateralized by various U.S. Treasury Notes and U.S. Treasury Bonds: total market value $347,289,622) (C) 340,471 340,471 Barclays 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,893,233 (collateralized by a U.S. Treasury Bond: total market value $66,180,031) (C) 64,882 64,882 Duetsche Bank 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,418,025 (collateralized by various U.S. Treasury Bonds: total market value $65,695,776) (C) 64,407 64,407 Greenwich Capital 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $340,553,316 (collateralized by various U.S. Treasury Notes and U.S. Treasury Bonds: total market value $347,305,585) (C) 340,494 340,494 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--CONTINUED JP Morgan 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $49,842,397 (collateralized by a U.S. Treasury Note: total market value $50,830,553) (C) $49,834 $ 49,834 Merrill Lynch 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,975,703 (collateralized by a U.S. Treasury Bond: total market value $66,263,648) (C) 64,964 64,964 Morgan Stanley Dean Witter 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,267,065 (collateralized by various U.S. Treasury Notes and U.S. Treasury Bonds: total market value $65,659,713) (C) 64,256 64,256 Salomon Smith Barney 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,772,503 (collateralized by various U.S. Treasury Bonds: total market value $66,064,316) (C) 64,761 64,761 Warburg Dillon 6.310%, dated 05/31/00, matures 06/01/00, repurchase price $64,487,731 (collateralized by a U.S. Treasury Note: total market value $65,768,430) (C) 64,476 64,476 --------- Total Repurchase Agreements (Cost $1,118,545) 1,118,545 --------- 7 STATEMENT OF NET ASSETS - --------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND--CONCLUDED - --------------------------------------------------------- SHARES VALUE (000) - --------------------------------------------------------- CASH EQUIVALENT (4.4%) AIM Institutional Treasury Fund 65,000,000 $ 65,000 ---------- Total Cash Equivalent (Cost $65,000) 65,000 ---------- Total Investments (100.4%) (Cost $1,473,516) 1,473,516 ---------- OTHER ASSETS AND LIABILITIES, NET (-0.4%) (5,250) ---------- NET ASSETS: Fund shares of Institutional Shares (unlimited authorization -- no par value) based on 329,699,333 outstanding shares of beneficial interest 329,699 Fund shares of Corporate Trust Shares (unlimited authorization -- no par value) based on 1,138,531,073 outstanding shares of beneficial interest 1,138,531 Undistributed net investment income 36 ---------- Total Net Assets (100.0%) $1,468,266 ========== Net Asset Value, Offering and Redemption Price Per Share -- Institutional Shares $ 1.00 ========== Net Asset Value, Offering and Redemption Price Per Share -- Corporate Trust Shares $ 1.00 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 9. 8 - ------------------------------------------------------------------------------- KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corporation FHLMCDN Federal Home Loan Mortgage Corporation Discount Note FNMA Federal National Mortgage Association FNMADN Federal National Mortgage Association Discount Note GNMA Government National Mortgage Association MBIA Security insured by the Municipal Bond Investors Assurance Corporation MTN Medium Term Note Ser Series SLMA Student Loan Marketing Association (A) Private Placement Security (B) Adjustable Rate Security. The rate reported on the Statement of Net Assets is the rate in effect on May 31,2000. The date shown is the next scheduled reset date. (C) Tri-Party Repurchase Agreement 9 This page intentionally left blank. STATEMENTS OF OPERATIONS (000) - --------------------------------------------------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 2000 CLASSIC CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. GOVERNMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY SECURITIES MONEY FUND MARKET FUND MARKET FUND -------------- ---------------------------------- 06/01/99- 06/01/99- 06/01/99- 05/31/00 05/31/00 05/31/00 ---------- --------- ---------- Income: Interest Income $124,453 $37,419 $74,129 -------- ------- ------- Expenses: Investment Advisory Fees ............................. 4,393 1,355 2,746 Less: Investment Advisory Fees Waived ................ (679) (181 (305) Administrator Fees ................................... 1,554 486 972 Less: Administrator Fees Waived ...................... (439) (121) (275) Transfer Agent Fees - Institutional Shares ........... 5 16 14 Transfer Agent Fees - Corporate Trust Shares ......... -- -- 15 Transfer Agent Out of Pocket Expenses ................ 156 40 1 Printing Fees ........................................ 153 43 39 Custody Fees ......................................... 102 10 7 Professional Fees .................................... 134 30 35 Trustee Fees ......................................... 21 6 5 Registration Fees .................................... 58 14 145 Shareholder Service Fee .............................. -- -- 2,182 Insurance and Other Fees ............................. 40 -- 3 --------- ------- ------- Total Expenses ....................................... 5,498 1,698 5,584 --------- ------- ------- Net Investment Income ................................ 118,955 35,721 68,545 --------- ------- ------- Net Realized Gain on Securities Sold ................. -- -- 3 --------- ------- ------- Increase in Net Assets Resulting from Operation ...... $118,955 $35,721 $68,548 ========= ======= ======= Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 11 STATEMENTS OF CHANGES IN NET ASSETS (000) - --------------------------------------------------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31, AND JANUARY 31, CLASSIC CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. GOVERNMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY SECURITIES MONEY FUND MARKET FUND MARKET FUND -------------------------------- ----------------------------- --------------------- 06/01/99- 02/01/99- 02/01/98- 06/01/99- 02/01/99- 02/01/98- 06/01/99- 06/01/98- 05/31/00 05/31/99 01/31/99 05/31/00 05/31/99 01/31/99 05/31/00 05/31/99 --------- --------- --------- -------- --------- --------- --------- -------- Operations: Net Investment Income $ 118,955 $ 15,177 $ 42,861 $ 35,721 $ 10,264 $ 34,235 $ 68,545 $ 10,844 Net Realized Gain on Investments -- 1 -- -- -- -- 3 25 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Increase in Net Assets from Operations 118,955 15,178 42,861 35,721 10,264 34,235 68,548 10,869 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Distributions to Shareholders: Net Investment Income: Institutional Shares (119,528) (15,172) (42,874) (35,721) (10,249) (34,250) (14,676) (10,842) Corporate Trust Shares -- -- -- -- -- -- (53,866) -- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Total Distributions (119,528) (15,172) (42,874) (35,721) (10,249) (34,250) (68,542) (10,842) ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Capital Transactions (1): Institutional Shares: Proceeds from Shares Issued 7,310,322 2,243,802 7,764,540 1,986,992 1,958,641 6,897,369 1,631,329 1,267,762 Shares Issued in Connection with Crestar Arbor Merger -- 1,072,229 -- -- -- -- -- -- Reinvestments of Cash Distributions 76,132 7,086 10,074 12,023 3,113 13,467 14,668 7,876 Cost of Shares Repurchased (6,962,679)(2,319,130)(7,630,948) (1,965,478)(2,032,711)(7,012,200)(1,599,793)(1,132,474) ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Increase (Decrease) in Net Assets from Institutional Share Transactions 423,775 1,003,987 143,666 33,537 (70,957) (101,364) 46,204 143,164 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Corporate Trust Shares: Proceeds from Shares Issued -- -- -- -- -- -- 3,577,647 -- Cost of Shares Repurchased -- -- -- -- -- (2,439,116) -- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Increase in Net Assets from Corporate Trust Share Transactions -- -- -- -- -- -- 1,138,531 -- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Increase (Decrease) in Net Assets from Share Transactions 423,775 1,003,987 143,666 33,537 (70,957) (101,364) 1,184,735 143,164 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Total Increase (Decrease) in Net Assets 423,202 1,003,993 143,653 33,537 (70,942) (101,379) 1,184,741 143,191 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- Net Assets: Beginning of Period 1,888,483 884,490 740,837 617,089 688,031 789,410 283,525 140,334 ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- End of Period $2,311,685 $1,888,483 $ 884,490 $ 650,626 $ 617,089 $ 688,031 $1,468,266 $ 283,525 ========== ========== ========== ========== ========== ========= ========== ==========
12 - ----------------------------------------------------------------------------------------------------------------------- CLASSIC CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. GOVERNMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY SECURITIES MONEY FUND MARKET FUND MARKET FUND ------------------------------- ------------------------------ --------------------- 06/01/99- 02/01/99- 02/01/98- 06/01/99- 02/01/99- 02/01/98- 06/01/99- 06/01/98- 05/31/00 05/31/99 01/31/99 05/31/00 05/31/99 01/31/99 05/31/00 05/31/99 ---------- --------- --------- --------- --------- --------- ---------- ---------- (1) Shares Issued and Redeemed: Institutional Shares: Shares Issued 7,310,322 2,243,802 7,764,540 1,986,991 1,958,641 6,897,369 1,631,329 1,267,762 Shares Issued in Connection with Crestar Arbor Merger -- 1,072,211 -- -- -- -- -- -- Shares Issued in Lieu of Cash Distributions 76,132 7,086 10,074 12,023 3,113 13,467 14,668 7,876 Shares Redeemed (6,962,679)(2,319,131)(7,630,948) (1,965,478)(2,032,711)(7,012,200)(1,599,793) (1,132,474) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Institutional Share Transactions 423,775 1,003,968 143,666 33,536 (70,957) (101,364) 46,204 143,164 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Corporate Trust Shares: Shares Issued -- -- -- -- -- -- 3,577,647 -- Shares Redeemed -- -- -- -- -- -- (2,439,116) -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Corporate Trust Share Transactions -- -- -- -- -- -- 1,138,531 -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Change in Capita Shares 423,775 1,003,968 143,666 33,536 (70,957) (101,364) 1,184,735 143,164 ========== ========== ========== ========== ========== ========== ========== ========== Amounts designated as "--" are either $0 or round to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13 FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31, (UNLESS OTHERWISE NOTED) FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD NET NET ASSET NET ASSET VALUE INVESTMENT DISTRIBUTIONS FROM VALUE END TOTAL BEGINNING OF PERIOD INCOME NET INVESTMENT INCOME OF PERIOD RETURN+ ---------------------- ----------- ---------------------- ----------- --------- CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND (A) Institutional Shares 2000 $1.00 $0.05 $(0.05) $1.00 5.56% 1999* 1.00 0.02 (0.02) 1.00 1.58 For the years ended January 31: 1999 1.00 0.05 (0.05) 1.00 5.46 1998 1.00 0.06 (0.06 1.00 5.66 1997 1.00 0.05 (0.05) 1.00 5.45 1996(B) 1.00 0.02 (0.02) 1.00 1.42 CLASSIC INSTITUTIONAL U.S. GOVERNMENT SECURITIES MONEY MARKET FUND (C) Institutional Shares 2000 $1.00 $0.05 $(0.05) $1.00 5.39% 1999 1.00 0.02 (0.02 1.00 1.56 For the years ended January 31: 1999 1.00 0.05 (0.05) 1.00 5.30 1998 1.00 0.05 (0.05) 1.00 5.52 1997 1.00 0.05 (0.05) 1.00 5.29 199 1.00 0.05 (0.06) 1.00 5.88 CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND Institutional Shares 2000 $1.00 $0.05 $(0.05) $1.00 5.25% 1999 1.00 0.05 (0.05) 1.00 4.97 1998 1.00 0.05 (0.05) 1.00 5.50 1997(D) 1.00 0.02 (0.02) 1.00 2.46 Corporate Trust Shares 2000 (E) $1.00 $0.05 $(0.05) $1.00 5.02% (A) On May 17, 1999, the Arbor Prime Obligations Fund exchanged all of its assets and certain liabilities for shares of the Classic Institutional Cash Management Money Market Fund. The Arbor Prime Obligations Fund is the accounting survivor in this transaction, and as a result, its basis of accounting for assets and liabilities and its operating results for the periods prior to May 17, 1999 have been carried forward in these financial highlights. (B) Commenced operations on October 25, 1995. All ratios for the period have been annualized. (C) On May 24, 1999, the Arbor U.S. Government Securities Money Fund exchanged all of its assets and certain liabilities for shares of the Classic Institutional U.S. Government Securities Money Market Fund. The Arbor U.S. Government Securities Money Fund is the accounting survivor in this transaction, and as a result, its basis of accounting for assets and liabilities and its operating results for the periods prior to May 24, 1999 have been carried forward in these financial highlights.
14 - ------------------------------------------------------------------------------------------------ RATIO OF RATIO OF NET INVESTMENT RATIO OF EXPENSES TO INCOME TO NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS AVERAGE NET ASSETS END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS (EXCLUDING WAIVERS PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) AND REIMBURSEMENTS) ------------ ------------------ ------------------ ------------------- ------------------- $2,311,685 0.25% 5.42% 0.30% 5.37% 1,888,483 0.25 4.79 0.35 4.69 884,490 0.23 5.31 0.35 5.19 740,837 0.20 5.52 0.36 5.36 477,435 0.20 5.33 0.38 5.15 382,632 0.20 5.61 0.40 5.41 $ 650,626 0.25% 5.27% 0.29% 5.23% 617,089 0.25 4.73 0.36 4.62 688,031 0.23 5.18 0.36 5.05 789,410 0.20 5.39 0.37 5.22 586,731 0.20 5.17 0.37 5.00 514,870 0.20 5.72 0.37 5.55 $ 329,725 0.25% 5.17% 0.31% 5.11% 283,525 0.20 4.83 0.47 4.56 140,334 0.18 5.34 0.38 5.14 20,238 0.09 5.27 0.51 4.85 $1,138,541 0.45% 4.93% 0.49% 4.89% (D) Commenced operations on December 12, 1996. All ratios for the period have been annualized. (E) Commenced operations on June 3, 1999. All ratios for the period have been annualized. + Returns are for the period indicated and have not been annualized. * For the period February 1, 1999 to May 31, 1999. All ratios for the period have been annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15 NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with thirty-five funds as of May 31, 2000: the Balanced Fund, the Capital Appreciation Fund (formerly the Capital Growth Fund), the Core Equity Fund, the E-Commerce Opportunity Fund, the Growth and Income Fund, the International Equity Fund, the International Equity Index Fund, the Life Vision Aggressive Growth Fund (formerly Life Vision Maximum Growth Portfolio), the Life Vision Growth and Income Fund (formerly Life Vision Growth and Income Portfolio), the Life Vision Moderate Growth Fund (formerly Life Vision Balanced Portfolio), the Mid-Cap Equity Fund, the Small Cap Growth Stock Fund, the Small Cap Value Equity Fund (formerly Small Cap Equity Fund), the Tax Sensitive Growth Stock Fund, the Value Income Stock Fund, (collectively the "Equity Funds"), the Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the High Income Fund, the Investment Grade Bond Fund, the Investment Grade Tax-Exempt Bond Fund, the Limited-Term Federal Mortgage Securities Fund, the Maryland Municipal Bond Fund, the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, and the U.S. Government Securities Fund, the Virginia Intermediate Municipal Bond Fund, the Virginia Municipal Bond Fund, (collectively the "Fixed Income Funds"), the Prime Quality Money Market Fund, the Tax-Exempt Money Market Fund, the Tax-Free Money Market Fund, the U.S. Government Securities Money Market Fund, the U.S. Treasury Money Market Fund (collectively the "Retail Money Market Funds"), the Classic Institutional Cash Management Money Market Fund, the Classic Institutional U.S. Government Securities Money Market Fund and the Classic Institutional U.S. Treasury Securities Money Market Fund, (collectively the "Institutional Money Market Funds" or the "Funds"). The assets of each Fund are segregated, and a shareholder's interest is limited to the fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. The financial statements presented herein are those of the Institutional Money Market Funds. The financial statements of the Equity Funds, the Fixed Income Funds and the Retail Money Market Funds are not presented herein, but are presented separately. Effective May 1999, the Board of Trustees of the STI Classic Funds and Board of Trustees of the Arbor Funds approved an Agreement and Plan of Reorganization (the "Reorganization Agreement") providing for the transfer of all assets and certain stated liabilities of the Arbor Funds in exchange for the issuance of shares in the Funds in a tax-free reorganization (see Note 8). 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust: BASIS OF PRESENTATION OF STATEMENTS -- As more fully described in Note 8 the STI Classic Funds acquired certain Arbor Funds in a tax-free business combination. While each Fund now exists as a STI Classic Fund, both the surviving funds for accounting purposes are Arbor Funds. In accordance with generally accepted accounting principles, the financial statements presented herein represent those of accounting survivors. Accordingly, the Statements of Changes in Net Assets and Financial Highlights presented for the periods prior to and ending on May 31, 1999 reflect activity beginning on the first day of the accounting survivor's fiscal year. 16 - ------------------------------------------------------------------------------- SECURITY VALUATION -- Investment securities held by the Funds are stated at amortized cost, which approximates market value. 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 date the security is purchased or sold (trade date). Interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized ratably to maturity and are included in interest income. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective 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 into 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 each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income of each of the Funds are declared on each business day and paid to shareholders on a monthly basis. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. RECLASSIFICATION OF COMPONENTS OF NET ASSETS -- The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from generally accepted accounting principles. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Accordingly, the Institutional Cash Management Money Market Fund and the Institutional U.S. Treasury Securities Money Market Fund have reclassified $9,970 and $26,668, respectively, from Undistributed Net Investment Income to Accumulated Net Realized Gain. These reclassifications are attributable to the classification of short-term capital gains and ordinary income treatment for tax purposes. These reclassifications have no effect on net assets or net asset value per share. 17 NOTES TO FINANCIAL STATEMENTS (continued) - ------------------------------------------------------------------------------ STI CLASSIC FUNDS MAY 31, 2000 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. Transactions with Affiliates: Certain officers of the Trust are also officers of SEI Investments Mutual Funds Services ("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. The Trust and the Distributor are parties to a Distribution Agreement dated November 21, 1995. The Distributor does not receive any fees for its distribution services provided under this agreement. The Fund has entered into an agreement with the Distributor to manage the investments of repurchase agreements for the Funds. For its services the Distributor received $1,846,277 for the year ended May 31, 2000. 4. Administration, Shareholder, and Transfer Agency Servicing Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, as amended November 19, 1997 and March 1, 1999, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Trust) of: .12% up to $1 billion, .09% on the next $4 billion, .07% on the next $3 billion, .065% on the next $2 billion and .06% for over $10 billion. Prior to May 1999, administrative and accounting services were provided to the Arbor U.S. Government Securities Money Fund and Arbor Prime Obligations Fund by SEI Investments Mutual Funds Services who was entitled to receive a fee at an annual rate of .08% of the average daily net assets of these funds. A portion of these fees were voluntarily waived. The Institutional U.S. Treasury Money Market Fund has adopted a Shareholder Services Plan (the "Plan") for the Corporate Trust Shares. The Fund pays the Distributor a monthly shareholder services fee at an annual rate of 0.20% of the average daily net assets of the Fund's Corporate Trust Shares, which may be used by the Distributor to provide compensation to service providers that have agreed to provide shareholder support services for their customers who own Corporate Trust Shares of the Fund. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. 5. Investment Advisory and Custodian Agreements: The Trust and Trusco Capital Management, Inc. (the "Investment Adviser") have entered into an advisory agreement dated July 15, 1993. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets: 18 - ------------------------------------------------------------------------------- MAXIMUM INSTITUTIONAL CORPORATE ANNUAL SHARE TRUST SHARE ADVISORY MAXIMUM MAXIMUM FEE EXPENSE EXPENSE --------- ------------ ------------ Classic Institutional Cash Management Money Market Fund .20% .25% -- Classic Institutional U.S. Government Securities Money Market Fund .20% .25% -- Classic Institutional U.S. Treasury Money Market Fund .20% .25% .45% The Investment Adviser and the Administrator have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. Prior to May 1999, Crestar Asset Management Company ("CAMCO") provided Investment Advisory services to certain Arbor Funds. CAMCO was paid for advisory services to each Fund at an annual rate of .10% and .11% of the average daily net assets for Arbor U.S. Government Securities Money and Arbor Prime Obligations Funds, respectively. SunTrust Bank, Atlanta, acts as custodian for the Funds. Fees of the Custodian are paid on the basis of the net assets of the Funds. 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. 6. Concentration of Credit Risk: The Classic Institutional Cash Management Money Market Fund invests in high quality money market instruments issued by corporations and the U.S. Government and rated by one or more nationally recognized statistical rating organizations, or, if not rated, are determined by the Adviser to be of comparable quality. The Classic Institutional U.S. Government Securities Money Market Fund invests in U.S. Treasury obligations, U.S. Government subsidiary corporation securities which are backed by the full faith and credit of the U.S. government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities and U.S. Government subsidiary corporation securities. The Classic Institutional U.S. Treasury Securities Money Market Fund invests in U.S. Treasury Obligations, which are backed by the full faith and credit of the U.S. Government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities. 7. Investment Transactions: Subsequent to October 31, 1999, the Funds recognized net capital losses for tax purposes that have been deferred to 2000 and can be used to offset future capital gains at May 31, 2000. The Funds also had capital loss carryforwards at May 31, 2000 as follows: CAPITAL LOSS POST 10/31 CARRYOVER EXPIRES EXPIRES DEFERRED 5/31/00 2003 2004 LOSS FUND (000) 000) (000) (000) - ------ ---------- ------- ------- ---------- Classic Institutional U.S. Government Securities Money Market Fund $25 $11 $14 $-- Classic Institutional U.S. Treasury Securities Money Market Fund -- -- -- 3 For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any net realized capital gains. 19 NOTES TO FINANCIAL STATEMENTS (concluded) - ------------------------------------------------------------------------------ STI CLASSIC FUNDS MAY 31, 2000 8. Arbor Funds Merger: The Board of Trustees and shareholders of certain of the Arbor Funds approved a reorganization of certain of the Arbor Funds into the STI Classic Funds which took place during May 1999. The following table summarizes certain relevant information of the funds prior to and immediately after the business combinations in May 1999 and is unaudited: SHARES OUTSTANDING SHARES ISSUED NET ASSETS NAV ON MERGER IN BUSINESS AFTER PER ARBOR FUND DATE STI CLASSIC FUND COMBINATION COMBINATION SHARE -------------------------- -------------- ----------------------------------- -------------- ------------ --------- U.S. Government Securities 684,672,707 Classic Institutional U.S. Government 684,672,707 684,647,218 $1.00 Money Fund (1) Securities Money Market Fund Prime Obligations Fund (1) 711,747,295 Classic Institutional Cash Management 711,747,295 1,783,974,148 1.00 Money Market Fund (1) Represents the accounting survivor in this business combination. 9. Subsequent Event: Effective June 30, 2000, SunTrustBanks, Inc. reorganized all of the investment management functions of its three institutional money management units, including SunTrust Bank, into Trusco Capital Management, Inc. 20 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS - ------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 2000 To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Classic Institutional Cash Management Money Market, Classic Institutional U.S. Government Securities Money Market, and Classic Institutional U.S. Treasury Securities Money Market Funds of STI Classic Funds (the "Trust") as of May 31, 2000, and the related statements of operations, changes in net assets, and financial highlights for the periods presented, excluding the periods indicated below. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The statements of changes for the year ended January 31, 1999 and financial highlights for the periods presented prior to May 31, 1999, for the Classic Institutional Cash Management Money Market and Classic Institutional U.S. Government Securities Money Market Funds, were audited by other auditors whose report, dated March 15, 1999, expressed an unqualified opinion on this information. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whe-ther the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of May 31, 2000, by correspondence with the custodian and the application of alternative auditing procedures with respect to unsettled securities transactions. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights audited by us present fairly, in all material respects, the financial position of the Classic Institutional Cash Management Money Market, Classic Institutional U.S. Government Securities Money Market, and Classic Institutional U.S. Treasury Securities Money Market Funds, of STI Classic Funds as of May 31, 2000, the results of their operations, changes in their net assets, and financial highlights for each of the periods described in the first paragraph above, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Philadelphia, Pennsylvania July 18, 2000 21 NOTICE TO SHAREHOLDERS - ------------------------------------------------------------------------------ STI CLASSIC FUNDS MAY 31, 2000UNAUDITED For shareholders that do not have a May 31, 2000 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 2000, please consult your tax adviser as to the pertinence of this notice. For the fiscal year ended May 31, 2000, each portfolio is designating the following items with regard to distributions paid during the year. LONG TERM (20% RATE) ORDINARY CAPITAL GAIN INCOME TAX-EXEMPT TOTAL QUALIFYING FUND DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1) - -------------------------------------- --------------- -------------- ---------- -------------- -------------- Classic Institutional Cash Management Money Market Fund --% 100.00% --% 100.00% --% Classic Institutional U.S. Treasury Securities Money Market Fund --% 100.00% --% 100.00% --% Classic Institutional U.S. Government Money Market Fund --% 100.00% --% 100.00% --% (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of "OrdinaryIncome Distributions".
22 NOTES NOTES NOTES INVESTMENT ADVISER Trusco Capital Management, Inc. STI Classic 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 Fund will achieve its investment objective. The STI Classic Funds are advised by affiliates 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-----