-----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, Rsd1s4RFdDsHes2hPOrx4VVW2mCJT/yl5s9rrZ4zlB/i+uQJ/8y0q1agMom4PA/s euQjGDoMHPDnlSFx2UKxsQ== 0000935069-03-001035.txt : 20030806 0000935069-03-001035.hdr.sgml : 20030806 20030806155330 ACCESSION NUMBER: 0000935069-03-001035 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030531 FILED AS OF DATE: 20030806 EFFECTIVENESS DATE: 20030806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 IRS NUMBER: 232678674 STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06557 FILM NUMBER: 03826291 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-CSR 1 sticlassicfixedincomecomb.txt STI CLASSIC FIXED INCOME COMBINED AR 5-03 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM N-CSR -------- CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES INVESTMENT COMPANY ACT FILE NUMBER 811-6557 STI CLASSIC FUNDS (Exact name of registrant as specified in charter) -------- 2 Oliver Street Boston, MA 02109 (Address of principal executive offices) (Zip code) Trusco Capital Management, Inc. 50 Hurt Plaza; Suite 1400 Atlanta, Georgia 30303 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-428-6970 DATE OF FISCAL YEAR END: MAY 31, 2003 DATE OF REPORTING PERIOD: MAY 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. [Graphic Omitted] ANNUAL - --------------------------------- FINANCIAL REPORT - --------------------------------- STI CLASSIC FIXED INCOME FUNDS - --------------------------------- A Family of Mutual Funds - --------------------------------- May 31, 2003 [STI CLASSIC FUNDS LOGO OMITTED] BACKED BY TRADITION. STRENGTHENED BY EXPERIENCE. SM Dear Valued STI Classic Funds' Shareholder: For investors, the year ending May 31, 2003 saw convergence in equity returns, and divergence in stocks versus bonds. Specifically, while stocks continued to labor under the weight of an extended post-bubble bear market, various types of stocks had remarkably similar returns. The S&P 500 was down -8.1%, with its Growth and Value components similar at -7.6% and -8.7%, respectively. The Dow Jones Industrial Average was -8.7%. The S&P 400 Midcap Index was -9.1%, while the S&P 600 Smallcap fell -10.9%. This convergence followed two years in which value stocks had significantly outperformed growth, and small/midcaps were similarly better than large caps. One area of difference was the relatively weaker performance of international stocks, with the MSCI EAFE index of major country stocks -12.3%. This result was driven by poor returns from Japan (-24.6%), while the balance of industrialized countries had returns only slightly worse than the U.S. The benefits of asset diversification were clearly evident over the past year, as bond returns were quite exceptional relative to stocks and compared to longer term history. For example, the Lehman U.S. Aggregate Bond Index returned 11.6%, and similar returns were seen in the Lehman U.S. Intermediate Government/Credit Index (+11.9%) and the Lehman U.S. Corporate High Yield Bond Index (+10.5%) indices. Strong returns in bonds were driven by several factors, including: further reduction in short-term rates by the Federal Reserve; continued minimal price inflation; in the second half of the year, major improvement in corporate bond quality spreads vs. Treasuries; positive asset flows into bond mutual funds; and some aspects of flight to quality and maturity hedging in the Treasury bond market. In terms of return, investors who stayed in money market short term instruments preserved capital with a positive return of about 1.1% per the iMoneyNet money market average, but this was meager relative to total returns available in longer maturities. The current investment environment appears to be one of moderation. The late 1990's equity bubble which led to excesses and ultimately suboptimal capital allocation on the part of both corporate managements and investors is long over. The ensuing bear market which purged those excesses also now seems to be finally over. The stock market has gained a better tone, after making three decisive lows in the 775-800 range on the S&P 500 Index in July and October 2002, and March 2003. Economic growth has been very slow to recover, since consumer spending did not fall much in the recession and capital spending is still limping along. However, ample monetary liquidity, the lowest interest rates in over 40 years, some tax incentives and fiscal stimulus, the eventual benefits from a lower dollar exchange rate and improving consumer/business confidence all argue for continued positive economic growth and not another recession. Stock prices ultimately track profits growth, and the trajectory of profits is now positive. Investors in stocks can reasonably anticipate moderate gains but need to be selective and price sensitive in security selection. A new stock market boom is unlikely, rather, we anticipate a gradual recovery. The outlook for bond investors in terms of absolute returns is a bit more challenging. Since bond prices move inversely to interest rates, the current low level of yields by definition reduces the opportunity for continued above average returns. Measured since January 1981, the Lehman Long-Term Treasury Index returned 12.0% annualized through May 31, 2003, while the S&P 500 total return was 12.6%. Such convergence is rare in capital markets, and needs to be understood in the context of 30-year Treasury bonds reaching yields of over 15% in 1981, versus only a little over 4% today. Similarly, we do not expect deflation, which would benefit Treasury bonds, but rather a gradual rise in inflation as economic stimulus takes hold. For those reasons, we currently favor stocks over bonds in terms of asset allocation, and within bonds, higher yielding corporates over Treasuries. The balance of this Annual Report includes performance data for the STI Classic Fixed Income Funds as well as each portfolio manager's discussion of the 12-month results. We believe you will find this communication helpful and thank you for your continued confidence in the STI Classic Fixed Income Funds. Sincerely, /s/ Douglas S. Phillips Douglas S. Phillips, CFA Chief Investment Officer 1 STI CLASSIC FLORIDA TAX-EXEMPT BOND FUND ---------------------------------------- The STI Classic Florida Tax-Exempt Bond Fund (the "Fund") seeks to provide high total return through (i) current income exempt from federal income taxes and (ii) capital appreciation, while preserving the principal amount invested by investing in investment grade tax-exempt obligations. In the municipal bond funds we try to limit risk as much as possible. We do not make major maturity shifts. We will bias the Fund based upon our near term fundamental and technical analysis, however, these will be moderate maturity shifts. Our style of investing enables us to enhance performance by utilizing various techniques. One such technique is to emphasize cheap sectors of the yield curve. Also, we take advantage of changes in yield spread. We buy specific bonds when spreads are trading historically wide and sell when spreads are trading historically narrow. Credit analysis is an important technique especially in today's market. We try to identify and invest in improving credit and avoid those credits that are deteriorating. The underlying concept to all these techniques is to enhance total return without adding risk. The Fund's Trust class return from June 2002 to May 2003 was 11.13% versus the Lipper Florida Municipal Debt Funds Objective return of 9.03% and the Lehman 10-year Municipal Bond Index return of 11.08%. Our commitment to the barbell maturity structure and positions of "kicker" bonds helped the fund outperform during this period. The credit outlook for the State of Florida, its counties, municipalities, and regional issuers remains stable despite fiscal pressures. For calendar year 2002, only one issuer, Reedy Credit Improvement District received a downgrading by Moody's (simultaneously with its parent company, The Walt Disney Company). Record supply, insatiable demand, underperforming equities, a moderate economic recovery, global political uncertainties and eventually war fueled strong performance in the municipal market. Short rates declined dramatically as investors sought safety, however as yields continued their trek toward record lows some individual investors resisted until a new tolerance could be developed. Crossover and arbitrage opportunities ultimately facilitated a steepening of the intermediate and long end of the curve. By the end of 2002 the 2 - 30 AAA municipal spread was 344 basis points. The front end of the curve saw dramatic steepening with the 2 - 10 spread at 220 basis points, the 10 - 20 year spread 106 basis points and the 20 - 30 year spread at 18 basis points. The first quarter of 2003 highlighted new areas of concern with President Bush's proposal to eliminate the tax on dividends, a country at war, signs of a slow economic recovery, and downgrades of tobacco companies and tobacco-backed issues. Absolute low level yields caused hesitation in the individual investor as evidenced by the front of the curve flattening, however, as municipals became cheap to other fixed income vehicles crossover and arbitrage buyers steepened the intermediate through the long end of the curve. At the end of May 2003, the spread between the 2 - 30 year AAA municipal bond was 321 basis points. The 2 - 10 spread was 203 basis points, the 10 - 20 year was 97 basis points compared to the 20 to 30 year spread at 27 basis points. Record supply continues to find placement with either non-traditional buyers or the individual investor. The perceived safety of municipal credits continues to lure the disenchanted equity and taxable investors. We continue to emphasis high quality, intermediate bonds and prefer cushions to non-callable in the intermediate range. The fund has maintained its barbell distribution and overall average high quality. /s/ Ronald H Schwartz Ronald H Schwartz, CFA, CFP Managing Director 2 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 11.13% 9.58% 6.32% 6.34% 77.64% ---------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Florida Lehman Florida Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Trust Shares Bond Index Objective 1/31/94 10,000 10,000 10,000 5/94 9,786 9,533 9,364 5/95 10,692 10,389 10,221 5/96 11,106 10,880 10,578 5/97 11,908 11,769 11,362 5/98 12,952 12,860 12,389 5/99 13,434 13,455 12,804 5/00 13,370 13,430 12,403 5/01 14,953 15,015 13,783 5/02 15,832 16,000 14,544 5/03 17,594 17,773 15,857 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 10.89% 9.32% 6.10% 6.12% 74.38% Without load ---------------------------------------------------- 6.70% 7.94% 5.29% 5.68% 67.83% With load ---------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Florida Lehman Florida Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Investor Shares Bond Index Objective 1/31/94 9,625 10,000 10,000 5/94 9,418 9,533 9,364 5/95 10,270 10,389 10,221 5/96 10,656 10,880 10,578 5/97 11,402 11,769 11,362 5/98 12,367 12,860 12,389 5/99 12,814 13,455 12,804 5/00 12,727 13,430 12,403 5/01 14,191 15,015 13,783 5/02 14,994 16,000 14,544 5/03 16,627 17,773 15,857 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 10.32% 8.77% 5.58% 5.71% 55.85% Without CDSC ---------------------------------------------------- 8.32% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Florida Lehman Florida Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Flex Shares Bond Index Objective 6/30/95 10,000 10,000 10,000 5/96 10,424 10,539 10,485 5/97 11,099 11,400 11,262 5/98 11,991 12,456 12,280 5/99 12,367 13,032 12,691 5/00 12,222 13,008 12,294 5/01 13,560 14,543 13,662 5/02 14,259 15,497 14,416 5/03 15,730 17,215 15,718 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 3 STI CLASSIC GEORGIA TAX-EXEMPT BOND FUND ---------------------------------------- The investment objective of the STI Classic Georgia Tax-Exempt Bond Fund (the "Fund") seeks to provide current income exempt from federal and state income taxes for Georgia residents without undue investment risk. Total return for the Fund includes current income as well as changes in the value of the Fund's assets. Returns for the Fund reflect our conservative strategy that tends to better protect our participants from undue principal risk when interest rates rise. Our investment philosophy in the municipal market is to provide our shareholders, as conservative investors, with high quality investments, income stability, and a favorable risk/return ratio. In keeping with our philosophy we look for value within the state of Georgia, utilizing internal as well as outside credit analysis to identify areas in the state that are possible quality upgrade candidates. We monitor shifts within the Georgia market which may create investment opportunities and subsequently allow the Fund to achieve gains, while at the same time maintaining a geographical diversity to minimize credit risk. Given our philosophy, and in light of the market's volatile nature in recent years, we are maintaining a relatively defensive position. The average maturity and duration may vary slightly in the future however, depending on our outlook for the market. The municipal market was very strong for the fiscal year 2003. Yields are at historic lows with prices rising in all maturity ranges. The greatest move occurred inside ten years with yields dropping 120 basis points in the 2-5 year range and 100 basis points in the ten-year maturity. Thirty-year yields declined only slightly less with an eighty basis point drop. During most of the period, municipals traded cheap to Treasuries creating crossover buyers, which helped maintain the strength of the municipal market. The Federal Reserve cut rates fifty basis points in November 2002 and switched to a neutral bias. It is widely believed that at the June FOMC meeting the Fed will cut rates again by 25 basis points depending on the economic data yet to come out. The total return for the Fund for the year ended May 31, 2003 was 9.64% (Trust Shares), 9.29% (Investor Shares) and 8.86% (Flex Shares) versus 11.08% for the Lehman 10-year Municipal Bond Index; the Lipper Georgia Municipal Debt Objective posted 9.46% for the same period. It is important to note that the Lehman Index does not reflect any fees whereas the Fund's return is net of fees, consequently, the Lehman 10-year Municipal Bond Index will often outperform the Fund. Bond yields inside the fifteen-year maturity slightly outperformed the longer end of the market. Due to the Fund's shorter average maturity and shorter duration, it performed well against other longer term Georgia mutual funds. Georgia's new issue supply has not kept up with the heavy volume issued nationally, but there has been a fairly steady supply of high quality paper coming to market. Refundings are heavier than normal due to the historically low interest rates. High demand for municipal bonds helped to keep municipal yields low. That demand is expected to continue. The recent tax legislation lowering the maximum tax brackets and cutting the tax on dividends has not appeared to negatively affect the demand for tax-free bonds. /s/ Gay B. Cash Gay B. Cash Vice President 4 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 9.64% 8.69% 5.62% 5.25% 61.55% ---------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Georgia Lehman Georgia Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Trust Shares Bond Index Objective 1/31/94 10,000 10,000 10,000 5/94 9,529 9,533 9,359 5/95 10,190 10,389 10,130 5/96 10,587 10,880 10,510 5/97 11,305 11,769 11,326 5/98 12,252 12,860 12,436 5/99 12,660 13,455 12,842 5/00 12,546 13,430 12,449 5/01 13,884 15,015 13,896 5/02 14,691 16,000 14,660 5/03 16,107 17,773 16,047 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 9.29% 8.46% 5.38% 5.05% 58.58% Without load ---------------------------------------------------- 5.21% 7.09% 4.58% 4.62% 52.63% With load ---------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Georgia Lehman Georgia Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Investor Shares Bond Index Objective 1/31/94 9,625 10,000 10,000 5/94 9,171 9,533 9,359 5/95 9,786 10,389 10,130 5/96 10,147 10,880 10,510 5/97 10,804 11,769 11,326 5/98 11,696 12,860 12,436 5/99 12,062 13,455 12,842 5/00 11,910 13,430 12,449 5/01 13,168 15,015 13,896 5/02 13,902 16,000 14,660 5/03 15,194 17,773 16,047 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 8.86% 7.93% 4.89% 5.06% 48.31% Without CDSC ---------------------------------------------------- 6.86% With CDSC ------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Georgia Lehman Georgia Tax-Exempt 10-Year Municipal Bond Fund, Municipal Debt Funds Flex Shares Bond Index Objective 6/30/95 10,000 10,000 10,000 5/96 10,370 10,539 10,486 5/97 10,998 11,400 11,299 5/98 11,850 12,456 12,407 5/99 12,161 13,032 12,812 5/00 11,968 13,008 12,420 5/01 13,155 14,543 13,863 5/02 13,822 15,497 14,626 5/03 15,047 17,215 16,009 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5 STI CLASSIC HIGH INCOME FUND ---------------------------- The STI Classic High Income Fund (the "Fund") seeks to achieve its investment objective by investing primarily in income producing debt instruments of U.S. and foreign issuers that are rated below investment grade. The Fund became an STIClassic Fund on March 28, 2000 as the successor to the ESC Strategic Income Fund, which merged into the STI Classic High Income Fund on that date. (Prior to September 30, 1998, this Fund primarily invested in a diversified portfolio of corporate, government and other debt instruments of U.S. issuers.) We are very pleased to be able to report to shareholders that for the fiscal year ended May 31, 2003, the total return for the Fund's Trust Share Class was 8.19%. This represents a very attractive return on an absolute basis as well as relative to its peers and other investment alternatives over the past year. The strong investment results for the past year were driven by a market rally that began in October of 2002, which offset a weak first half. The debt markets in the first half of the Fund's fiscal year were characterized by extraordinary volatility, extremely negative market sentiment brought on by revelations of corporate accounting fraud on an unprecedented scale, and high default rates. Adding to these woes were investor concerns about the economy, which was not rebounding as expected, and heightened geopolitical risks. By the fourth quarter of 2002 however, valuations had reached extremely attractive levels, the cycle of fear had bottomed, and signs of economic strength brought investors back into the market. Enhancing the appeal of non-investment grade bonds is the much higher income levels they provide in the current low interest rate environment. In making investment decisions for the Fund, we use a "bottom up" investment approach, identifying investment opportunities based on the underlying financial and business fundamentals of the specific issuer. Although the economic picture remains mixed, we believe the stimulative fiscal and monetary policies of the past year will result in higher economic growth in the second half of the year. The strength of the credit and equity markets in recent months reflects the market's anticipation of renewed growth as well as a lessening of the geopolitical concerns that weighed on the market in 2002. /s/ Agnes G. Pampush Agnes G. Pampush, CFA Managing Director /s/ Howard B. Udis Howard B. Udis, J.D. Vice President 6 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date ---------------------------------- 8.19% 7.18% 12.19% ---------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman High Income U.S. Corporate Fund, High Yield Trust Shares Bond Index 10/31/01 10,000 10,000 05/02 10,128 10,605 05/03 10,958 11,721 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ---------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ---------------------------------------------------- 7.52% 4.54% 1.33% 3.53% 36.97% Without CDSC ---------------------------------------------------- 5.55% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman High Income U.S. Corporate Fund, High Yield Flex Shares Bond Index 5/31/94 10,000 10,000 5/95 11,035 11,346 5/96 11,407 12,420 5/97 12,055 14,067 5/98 12,853 15,826 5/99 13,385 15,857 5/00 12,018 15,348 5/01 12,588 15,958 5/02 12,772 16,141 5/03 13,732 17,841 (1) Returns prior to March 28, 2000 represent the performance of the ESC Strategic Income Fund, Class D Shares. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 7 STI CLASSIC INVESTMENT GRADE BOND FUND -------------------------------------- The STI Classic Investment Grade Bond Fund (the "Fund") seeks to provide a high level of total return through current income and capital appreciation while preserving the principal amount invested, primarily through investment in investment grade fixed income securities. Total return includes not only current income but also the changes in value of the assets held by the Fund. For the year ended May 31, 2003, the Fund's Trust Shares had a total return of 11.61% versus an average return of 10.38% for the Lipper Intermediate Investment-Grade Debt Objective. For the same period the Lehman U.S. Government/Credit Index, which has no fees taken out, had a total return of 14.56%. During the period, the economy continued its very gradual growth trajectory even with very accommodative monetary and fiscal policy. Treasury interest rates declined to levels not seen in over forty years and the yield curve became remarkably steep as short rates declined more than longer-term rates. Intermediate maturities outperformed on a relative basis as the rate declines were greatest around the five-year maturity range. Corporate securities initially had a difficult time but starting in November had a strong six-month period of outperformance. Low interest rates caused dramatic increases in prepayments, which shortened the average duration of the mortgage sector to less than one year. The Fund's overweight in corporate securities enhanced the return. During the second half of the period, the Fund's short duration, a barbell portfolio structure, and mortgage securities reduced performance somewhat. Looking forward monetary and fiscal stimulus should gradually increase economic growth leading to rising interest rates and a flatter yield curve. Much of the spread tightening in corporate securities is behind us. Corporate securities should however continue to be attractive to enhance the yield and total return of the Fund in a low interest rate environment. The Fund continues to be managed with only moderate shifts in average maturity and duration. The total return is enhanced with yield curve analysis (monitoring and analyzing the risk/reward trade-offs of different maturity sectors), sector rotation, and other low risk strategies. By actively pursuing these strategies, the Fund strives to add to total return while reducing risk. /s/ L. Earl Denney L. Earl Denney, CFA Managing Director /s/ Charles B. Leonard Charles B. Leonard, CFA, FLMI Managing Director 8 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 11.61% 10.05% 6.42% 6.53% 6.76% 103.56% -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman Lipper Investment U.S. Intermediate Grade Government/ Investment Bond Fund, Credit Grade Debt Trust Shares Index Objective 5/31/93 10,000 10,000 10,000 5/94 10,117 10,101 10,074 5/95 11,168 11,274 11,122 5/96 11,617 11,736 11,565 5/97 12,429 12,663 12,478 5/98 13,786 14,117 13,752 5/99 14,372 14,690 14,210 5/00 14,119 14,968 14,370 5/01 16,033 16,894 16,118 5/02 16,863 18,218 17,203 5/03 18,821 20,871 18,988 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 11.16% 9.63% 6.01% 6.13% 6.40% 97.52% Without load -------------------------------------------------------------- 6.98% 8.25% 5.21% 5.72% 6.03% 90.11% With load -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman Lipper Investment U.S. Intermediate Grade Government/ Investment Bond Fund, Credit Grade Debt Investor Shares Index Objective 5/31/93 9,625 10,000 10,000 5/94 9,708 10,101 10,074 5/95 10,682 11,274 11,122 5/96 11,056 11,736 11,565 5/97 11,793 12,663 12,478 5/98 13,030 14,117 13,752 5/99 13,533 14,690 14,210 5/00 13,239 14,968 14,370 5/01 14,972 16,894 16,118 5/02 15,692 18,218 17,203 5/03 17,443 20,871 18,988 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) --------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date --------------------------------------------------- 10.61% 9.08% 5.49% 5.75% 56.27% Without CDSC --------------------------------------------------- 8.61% With CDSC --------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman Lipper Investment U.S. Intermediate Grade Government/ Investment Bond Fund, Credit Grade Debt Flex Shares Index Objective 6/30/95 10,000 10,000 10,000 5/96 10,232 10,327 10,336 5/97 10,862 11,143 11,152 5/98 11,948 12,422 12,290 5/99 12,348 12,927 12,700 5/00 12,023 13,171 12,843 5/01 13,531 14,866 14,405 5/02 14,108 16,032 15,374 5/03 15,605 18,366 16,970 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 9 STI CLASSIC INVESTMENT GRADE TAX-EXEMPT BOND FUND ------------------------------------------------- The STI Classic Investment Grade Tax-Exempt Bond Fund (the "Fund") seeks to provide high total return through (i) current income exempt from federal income taxes and (ii) capital appreciation, while preserving the principal amount invested by investing in investment grade tax-exempt obligations. In the municipal bond funds we try to limit risk as much as possible. We do not make major maturity shifts. We will bias the Fund based upon our near term fundamental and technical analysis, however, these will be moderate maturity shifts. Our style of investing enables us to enhance performance by utilizing various techniques. One such technique is to emphasize cheap sectors of the yield curve. Also, we take advantage of changes in yield spread. We buy specific bonds when spreads are trading historically wide and sell when spreads are trading historically narrow. Credit analysis is an important technique especially in today's market. We try to identify and invest in improving credit and avoid those credits that are deteriorating. The underlying strategy to all these techniques is to enhance total return without adding risk. The Fund's Trust Class return from June 2002 to May 2003 was 10.80% versus the Lipper Intermediate Municipal Debt Funds Objective return of 8.86% and the Lehman 5-year Municipal Bond Index return of 8.88%. Our commitment to the barbell maturity structure and positions of "kicker" bonds helped the fund outperform during this period. Record supply, insatiable demand, underperforming equities, a moderate economic recovery, global political uncertainties and eventually war fueled strong performance in the municipal market. Short rates declined dramatically as investors sought safety, however as yields continued their trek toward record lows some individual investors resisted until a new tolerance could be developed. Crossover and arbitrage opportunities ultimately facilitated a steepening of the intermediate and long end of the curve. By the end of 2002 the 2 - 30 AAA municipal spread was 344 basis points. The front end of the curve saw dramatic steepening with the 2 - 10 spread at 220 basis points, the 10 - 20 year spread 106 basis points and the 20 - 30 year spread at 18 basis points. The first quarter of 2003 highlighted new areas of concern with President Bush's proposal to eliminate the tax on dividends, a country at war, signs of a slow economic recovery, and downgrades of tobacco companies and tobacco-backed issues. Absolute low level yields caused hesitation in the individual investor as evidenced by the front of the curve flattening, however, as municipals became cheap to other fixed income vehicles crossover and arbitrage buyers steepened the intermediate through the long end of the curve. At the end of May 2003, the spread between the 2 - 30 year AAA municipal bond was 321 basis points. The 2 - 10 spread was 203 basis points, the 10 - 20 year was 97 basis points compared to the 20 to 30 year spread at 27 basis points. Record supply continues to find placement with either non-traditional buyers or the individual investor. The perceived safety of municipal credits continues to lure the disenchanted equity and taxable investors. We continue to emphasize high quality, intermediate bonds and prefer cushions to non-callable in the intermediate range. The fund has maintained its barbell distribution and overall average high quality. /s/ Ronald H Schwartz Ronald H Schwartz, CFA, CFP Managing Director 10 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) --------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date --------------------------------------------------- 10.80% 9.61% 6.93% 6.76% 87.52% --------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Investment Lehman Lipper Grade 5-Year Intermediate Tax-Exempt Municipal Municipal Bond Fund, Bond Debt Funds Trust Shares Index Objective 10/31/93 10,000 10,000 10,000 5/94 9,976 9,894 9,837 5/95 10,995 10,600 10,550 5/96 11,634 11,092 10,982 5/97 12,462 11,755 11,683 5/98 13,530 12,543 12,549 5/99 14,162 13,145 13,025 5/00 14,362 13,243 12,904 5/01 15,931 14,598 14,191 5/02 17,070 15,545 14,990 5/03 18,914 16,926 16,318 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) ------------------------------------------------------------ Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date ------------------------------------------------------------ 10.42% 9.19% 6.51% 6.79% 7.23% 115.18% Without load ------------------------------------------------------------ 6.29% 7.80% 5.71% 6.38% 6.86% 107.10% With load ------------------------------------------------------------ [Graphic Omitted Plot Points as follows:] STI Classic Investment Lehman Lipper Grade 5-Year Intermediate Tax-Exempt Municipal Municipal Bond Fund, Bond Debt Funds Investor Shares Index Objective 5/31/93 9,625 10,000 10,000 5/94 10,143 10,291 10,312 5/95 11,148 11,025 11,060 5/96 11,750 11,536 11,513 5/97 12,536 12,226 12,248 5/98 13,544 13,045 13,155 5/99 14,133 13,671 13,655 5/00 14,260 13,774 13,528 5/01 15,755 15,183 14,877 5/02 16,812 16,168 15,714 5/03 18,564 17,604 17,107 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 9.82% 8.65% 6.00% 6.07% 60.23% Without CDSC -------------------------------------------------- 7.82% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Investment Lehman Lipper Grade 5-Year Intermediate Tax-Exempt Municipal Municipal Bond Fund, Bond Debt Funds Flex Shares Index Objective 6/30/95 10,000 10,000 10,000 5/96 10,541 10,446 10,459 5/97 11,193 11,071 11,126 5/98 12,033 11,812 11,951 5/99 12,487 12,379 12,405 5/00 12,552 12,472 12,289 5/01 13,804 13,748 13,515 5/02 14,661 14,640 14,275 5/03 16,101 15,940 15,540 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 11 STI CLASSIC LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND --------------------------------------------------------- The STI Classic Limited-Term Federal Mortgage Securities Fund (the "Fund") seeks to provide a high level of current income consistent with the preservation of capital by investing primarily in obligations issued or guaranteed (as to timely payment of principal and interest) by the U.S. Government or its instrumentalities and agencies. Total return includes current income as well as capital appreciation or depreciation of the Fund's assets. For the year ended May 31, 2003, the Fund's Trust Shares had a total return of 6.99% compared to the Lipper Short-Intermediate U.S. Government Funds Objective return of 7.57%. The Merrill Lynch 1-5 Year AAA U.S. Treasuries/Agency Index had a total return for the same period of 7.34%. During this period, the economy continued to grow at a very moderate pace, despite the efforts of the Federal Reserve and the U.S. Government to stimulate economic growth. The Federal Reserve cut short-term interest rates an additional 0.50% in November, while interest rates across the entire Treasury yield curve dropped sharply. The yields on intermediate Treasury securities dropped the most during this period, falling over 2.00%. The sharp decline in interest rates pulled down mortgage rates, as well, spurring a historically strong mortgage refinancing wave. This caused the average duration of the mortgage index to shorten to less than one year. Despite this low rate/high prepayment environment, mortgages managed to outperform their duration adjusted Treasury counterparts. The higher yields of the MBS helped to offset the negative impact of higher prepayment speeds. However, the Fund had a slightly shorter average life/duration than the benchmark during this period, and that strategy had a modestly negative impact on the overall performance of the Fund. The Fund continues to invest in short and intermediate-term U.S. Government securities, with an emphasis on undervalued and higher yielding MBS such as GNMA. These mortgages provide a more stable income distribution due to monthly payment of principal and interest. /s/ L. Earl Denney L. Earl Denney, CFA Managing Director /s/ Michael Sebesta Michael Sebesta Managing Director 12 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 6.99% 8.17% 6.29% 6.38% 74.33% -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Limited-Term Merrill Lynch Merrill Lynch Federal 1-5 Year 1-5 Year Mortgage U.S. Treasuries/ U.S. Securities Fund, Agencies Treasuries Trust Shares Index Index 6/30/94 10,000 10,000 10,000 5/95 10,756 10,810 10,809 5/96 11,276 11,342 11,345 5/97 12,002 12,111 12,118 5/98 12,856 13,041 13,049 5/99 13,467 13,723 13,731 5/00 13,780 14,245 14,234 5/01 15,161 15,736 15,774 5/02 16,303 16,794 16,875 5/03 17,442 18,036 18,113 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 6.72% 7.90% 5.99% 6.22% 70.70% Without load -------------------------------------------------- 4.09% 6.98% 5.45% 5.91% 66.36% With load -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Limited-Term Merrill Lynch Merrill Lynch Federal 1-5 Year 1-5 Year Mortgage U.S. Treasuries/ U.S. Securities Fund, Agencies Treasuries Investor Shares Index Index 7/31/94 9,750 10,000 10,000 5/95 10,440 10,698 10,698 5/96 10,919 11,224 11,229 5/97 11,593 11,985 11,993 5/98 12,398 12,906 12,914 5/99 12,953 13,581 13,590 5/00 13,203 14,097 14,087 5/01 14,502 15,573 15,611 5/02 15,540 16,619 16,701 5/03 16,584 17,849 17,927 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 6.33% 7.55% 5.67% 5.60% 54.41% Without CDSC -------------------------------------------------- 4.33% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Limited-Term Merrill Lynch Merrill Lynch Federal 1-5 Year 1-5 Year Mortgage U.S. Treasuries/ U.S. Securities Fund, Agencies Treasuries Flex Shares Index Index 6/30/95 10,000 10,000 10,000 5/96 10,393 10,431 10,436 5/97 10,996 11,139 11,146 5/98 11,709 11,994 12,002 5/99 12,194 12,621 12,630 5/00 12,402 13,101 13,092 5/01 13,581 14,473 14,509 5/02 14,508 15,445 15,522 5/03 15,427 16,588 16,661 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 13 STI CLASSIC MARYLAND MUNICIPAL BOND FUND ----------------------------------------- The STI Classic Maryland Municipal Bond Fund (the "Fund") is managed as a long term maturity fund that primarily purchases investment grade bonds rated BBB or higher. From time to time a small allocation may be made to non-rated securities. The Fund buys securities issued by the State of Maryland and its political subdivisions and agencies, supplemented by bonds from Puerto Rico that are exempt from every state's income taxation. The Fund seeks to generate an attractive distribution to its shareholders while producing a competitive Total Rate of Return ("TRR"). The Fund holds bonds with maturity dates out to 30 years or longer, as well as adjustable rate tender bonds as money market equivalent securities. Although there are no average maturity or duration limitations on the portfolio, we generally follow the duration of the Lehman Municipal 10-year Index. This Index had a modified adjusted duration of 6.62 and weighted average maturity of 9.85 years on May 31, 2003. The Fund's duration was 6.50 years and the average nominal maturity was 10.63 years. The Lehman General Obligation Bond Index, with a similar duration as the 10-Year Index, is often consulted in selecting individual bonds as it uses a wider maturity dispersion. Compared to one year ago, the municipal yield curve is much steeper and yields are dramatically lower. As measured by the yield spread from 2 to 30 years, the slope was 330 basis points, compared to 280 BP one year ago. In terms of yield changes, rates declined 125 BP on 5-year high-grade bonds, 100 BP in 10 years, 85 BP in 20 years, and 80 BP in 30 years. Interest rates are at their lowest levels since the 1960s on tax-exempt securities and have dropped to 45-year lows across the U.S. Treasury curve. The TRR achieved by bond indices has been impressive with returns of 10% or higher on high quality municipal bonds of 7 years and longer over 12 months. The economic recovery that was expected at this time one year ago has not yet materialized. Non-farm payroll data has shown no growth and continuing unemployment claims have not dropped like analysts expected. Interest rates in the U.S. moved to historic lows with inflation a non issue at a time of excess production capacity world wide due to a continued "hang over" following the boom years in the late 1990s. Even a declining U.S. dollar and pending record budgetary deficit failed to pull rates back up. Similarly, the war in Iraq was a valid reason for caution by business leaders who, it was believed, were delaying hiring and investment decisions until the war was resolved. So far this is not in evidence but the U.S. consumer has stayed in the game aided by lower mortgage rates for refinancing or purchasing larger homes. With this backdrop, the Fund produced a competitive return for the year by holding a mix of the sectors of the municipal market with an emphasis on credit quality and call protection. Approximately 75% of assets were rated double A or higher. State and local GO tax supported bonds represented the largest category at 42% of assets, with health care and housing bonds the next largest categories at 17% and 15%. Bonds subject to the alternative minimum tax were 9% of total assets. For the 12 months, based on the Fund's Trust Shares class, the Fund's TRR was 9.85%. The Lehman 10-Year Municipal Bond Index had a TRR of 11.08% for the same period. The Lipper Maryland Municipal Debt Funds Objective median return was reported as 9.69%. Looking forward, the Adviser expects to continue to emphasize high quality bonds with larger than current market coupons and call protection. These securities should have defensive characteristics when rates eventually turn up with a recovering economy. A moderate allocation to lower investment grade issues for incremental yield will continue. Maryland is a "specialty state" in municipal market parlance. High wealth and combined state and local income tax levels contribute to heavy demand and lower than average yields. The state has very few counties and municipal units of government, presenting challenges to avoid credit and sector concentration risk. This situation is made more challenging with bond yields at near record lows. We will maintain duration plus or minus 5% of the benchmark under normal conditions and, in the near future, expect to be a bit shorter than the Index for defensive reasons following the rally in prices thus far during calendar year 2003. /s/ George E. Calvert Jr. George E. Calvert Jr. Vice President 14 TRUST SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 9.85% 9.05% 5.82% 5.46% 47.05% -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Maryland Lehman Lipper Municipal 10-Year MD Municipal Bond Fund, Municipal Debt Funds Trust Shares Bond Index Objective 3/31/96 10,000 10,000 10,000 5/96 9,846 9,949 9,958 5/97 10,500 10,767 10,648 5/98 11,443 11,734 11,549 5/99 11,923 12,300 11,952 5/00 11,710 12,239 11,639 5/01 13,068 13,670 12,871 5/02 13,826 14,550 13,560 5/03 15,187 16,004 14,787 FLEX SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 8.81% 8.05% 4.86% 5.28% 44.05% Without CDSC -------------------------------------------------- 6.81% With CDSC ----------- [Graphic Omitted Plot Points as follows:] STI Classic Maryland Lehman Lipper Municipal 10-Year MD Municipal Bond Fund Municipal Debt Funds Flex Shares Bond Index Objective 3/31/96 10,000 10,000 10,000 5/96 9,936 9,984 9,996 5/97 10,514 10,805 10,689 5/98 11,366 11,775 11,593 5/99 11,735 12,344 11,998 5/00 11,423 12,282 11,683 5/01 12,633 13,718 12,921 5/02 13,244 14,601 13,612 5/03 14,411 16,060 14,844 (1) Returns prior to May 24, 1999 represent the performance of the CrestFund Maryland Municipal Bond Fund. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 15 STI CLASSIC SHORT-TERM BOND FUND -------------------------------- The STI Classic Short-Term Bond Fund (the "Fund") seeks to provide high current income while preserving capital primarily through investment in short to intermediate-term investment grade fixed income securities. The Fund is suitable for investors seeking higher yields than other short-term investments with less share-price volatility than longer-term bond funds. With money market yields declining to decades low levels, the Fund has been an ideal low risk bond fund alternative for money market investors. Over the past year, the dividend yield has been consistently higher than that of money market funds while the NAV has fluctuated $0.26 from high to low averaging $10.00 a share. The current NAV as of May 31, 2003 is $10.04 a share for the Trust Share class. The average maturity of the Fund is 1.74 years with an average quality rating of AA. Trust shares of the Fund were up 3.70% for the year ended May 31, 2003. The three-year Treasury note fell in yield over 200 basis points ("bp") to 1.56%. Primary factors driving yields lower was a drop in economic activity due to the war with Iraq, lack of business spending, a weak labor market, a tepid consumer, waning consumer confidence, high debt levels, and concerns about deflation. Monetary policy has been accommodative, as the Federal funds rate ended the fiscal year at 1.25%. In comparison to 2001 when the Federal Reserve aggressively eased monetary policy by 475bp, the Fed lowered rates only once in 2002 by 50bp. The prospect of the Fed buying longer dated U.S. Treasury securities has also helped drive intermediate and long-term yields lower. Improvement in corporate bonds added to overall performance in the second half of the fiscal year as credit spreads narrowed after peaking in late October of 2002. The first half was difficult as corporate fraud and greed caused corporate bonds to under-perform Treasuries. In general, the Fund has maintained a higher corporate allocation throughout the year. /s/ Robert W. Corner /s/ H. Rick Nelson Robert W. Corner H. Rick Nelson Managing Director Managing Director 16 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 3.70% 6.00% 4.98% 5.25% 5.23% 68.31% -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Salomon Short-Term 1-3 Year Bond Fund, Treasury/Government/ Trust Shares Credit Index 5/31/93 10,000 10,000 5/94 10,202 10,220 5/95 10,977 10,978 5/96 11,466 11,569 5/97 12,188 12,336 5/98 13,079 13,203 5/99 13,610 13,914 5/00 14,001 14,485 5/01 15,419 15,999 5/02 16,081 17,034 5/03 16,676 18,140 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 3.47% 5.81% 4.79% 5.05% 4.98% 64.17% Without load -------------------------------------------------------------- 1.45% 5.09% 4.36% 4.84% 4.77% 60.81% With load -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Salomon Short-Term 1-3 Year Bond Fund, Treasury/Government/ Investor Shares Credit Index 5/31/93 9,800 10,000 5/94 9,978 10,220 5/95 10,721 10,978 5/96 11,174 11,569 5/97 11,841 12,336 5/98 12,693 13,203 5/99 13,185 13,914 5/00 13,537 14,485 5/01 14,877 15,999 5/02 15,501 17,034 5/03 16,039 18,140 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 3.11% 5.45% 4.42% 4.79% 45.07% Without CDSC -------------------------------------------------- 1.11% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Salomon Short-Term 1-3 year Bond Fund, Treasury/Government/ Flex Shares Credit Index 6/30/95 10,000 10,000 5/96 10,359 10,481 5/97 10,941 11,176 5/98 11,689 11,962 5/99 12,098 12,606 5/00 12,378 13,124 5/01 13,566 14,495 5/02 14,075 15,433 5/03 14,513 16,435 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 17 STI CLASSIC SHORT-TERM U.S. TREASURY SECURITIES FUND ---------------------------------------------------- The investment objective of the STI Classic Short-Term U.S. Treasury Securities Fund (the "Fund") is to provide high current income while preserving capital through investment exclusively in short-term U.S. Treasury securities. The goal of the Fund is to capture the yield advantage, which normally exists between money market instruments and short-term bonds. The price volatility of short-term bonds is very modest and over time has consistently been offset by the incremental yield of these instruments relative to money market securities. The Fund is managed from a total return perspective, that is, day to day decisions are made with a view toward maximizing income and price appreciation. The investment discipline applied in managing the Fund emphasizes adding value through yield curve analysis. Investments are made in those segments of the yield curve within the applicable universe, which offer the most attractive risk/reward characteristics. The Fund met both its objective and goal during the year ending May 31, 2003 with a total return of 4.31% for the Fund's Trust shares. Short-term interest rates declined during the 2nd half of 2002 in response to the 0.50% easing of the Federal funds rate and the discount rate by the Federal Reserve Board during November and the declining prospects for a normal economic recovery leading up to the Iraq war. Short-term interest rates rose in March as the war in Iraq went better than expected and the outlook for a post war recovery was renewed. The post war economic recovery has been extremely weak and disappointing which has led to another period of lower interest rates as we close out the Fund's fiscal year in May. The value of the short-term Treasuries held by the Fund increased as a result of the overall decline in interest rates. This increase in values led to the Fund's significant out-performance of both treasury money market funds, as represented by the iMoneyNet, Inc. 100% U.S. Treasury average one year return of 0.79% and the Salomon 6-Month Treasury Bill Index, which had a one year return of 1.60%. The Salomon 1-3 Year Treasury Index, which does not include fees or expenses and has a longer average maturity than the Fund, had a total return of 5.40% for the one-year period. /s/ David S. Yealy David S. Yealy Managing Director 18 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 4.31% 5.66% 5.06% 5.03% 4.97% 64.16% -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Short-Term Salomon Salomon U.S Treasury 1-3 Year 6-Month Securities Fund, Treasury Treasury Bill Trust Shares Index Index 5/31/93 10,000 10,000 10,000 5/94 10,218 10,207 10,336 5/95 10,842 10,952 10,895 5/96 11,355 11,482 11,493 5/97 12,009 12,289 12,112 5/98 12,766 13,147 12,769 5/99 13,352 13,847 13,403 5/00 13,852 14,417 14,105 5/01 14,963 15,830 14,958 5/02 15,665 16,797 15,413 5/03 16,340 17,704 15,660 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 4.13% 5.47% 4.90% 4.86% 4.80% 61.40% Without load -------------------------------------------------------------- 3.12% 5.11% 4.69% 4.76% 4.70% 59.81% With load -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Short-Term Salomon Salomon U.S Treasury 1-3 Year 6-Month Securities Fund, Treasury Treasury Bill Investor Shares Index Index 5/31/93 9,900 10,000 10,000 5/94 10,100 10,207 10,336 5/95 10,709 10,952 10,895 5/96 11,193 11,482 11,493 5/97 11,819 12,289 12,112 5/98 12,533 13,147 12,769 5/99 13,102 13,847 13,403 5/00 13,571 14,417 14,105 5/01 14,639 15,830 14,958 5/02 15,289 16,797 15,413 5/03 15,920 17,704 15,660 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 3.88% 5.27% 4.69% 4.79% 44.99% Without CDSC -------------------------------------------------- 1.88% With CDSC --------- [Graphic Omitted Plot Points as follows:] STI Classic Short-Term Salomon Salomon U.S Treasury 1-3 Year 6-Month Securities Fund, Treasury Treasury Bill Flex Shares Index Index 6/30/95 10,000 10,000 10,000 5/96 10,357 10,428 10,500 5/97 10,894 11,161 11,065 5/98 11,537 11,940 11,666 5/99 12,036 12,576 12,244 5/00 12,438 13,094 12,886 5/01 13,392 14,377 13,666 5/02 13,966 15,255 14,081 5/03 14,508 16,079 14,306 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 19 STI CLASSIC STRATEGIC INCOME FUND --------------------------------- The investment objective of the STI Classic Strategic Income Fund (the "Fund") is to provide current income, with a secondary goal of preserving capital. For the year ended May 31, 2003 the Fund provided a relatively high level of current income while maintaining a relatively stable Net Asset Value. The Fund's Trust class shares NAV began at $9.80 and ended the fiscal year at $9.99. Over the course of the year, the Fund distributed 6.2% income for the Trust class shares and 5.7% for the Flex class shares, while generating 8.73% and 8.16% in total return respectively. The bond market over the past year has seen unprecedented market events and an extraordinary level of volatility. We ended the fiscal year at record low levels of interest rates for Treasury notes, mortgages, and money market funds. The low rate environment has left fixed income investors looking for higher levels of income as shorter-term investments are coming due, and forcing reinvestment at lower and lower rates. This has been the case through much of the past year while risk was seemingly omnipresent. Bond investors know well the negative consequences of a rising rate environment on long term bonds, and have been reminded of credit risk through much of the past year through significant credit downgrades and record sized corporate bankruptcies. Since the significant event risk experienced through much of last year -- where both high grade and high yield (below investment grade) corporate bonds under performed dramatically, the market has largely reversed course and has become orderly. "Event risk" has faded from the headlines and corporate profitability has improved. Additionally, while economic conditions have improved, it has been far from robust. Inflation has continued to wane both domestically and abroad, and with monetary policy still leaning easier, the risk of a rise in rates has moved much further out on the horizon. All things considered, investment capital has increasingly been reinvested in longer-term bond funds, including and in particular, the lower rated corporate bond market, with confidence. Additionally, the international fixed income market has attracted capital as many countries offer higher yields than the U.S. All of this has contributed to driving all interest rates lower, benefiting the overall investment performance of the Fund. As the uncertainty over the timing and strength of an economic rebound continues, investors continue to search for increasing their level of income without taking on significant additional risk. The Fund has been, and will continue to attempt to balance the two major types of risk in the bond market - --- interest rate risk and credit risk -- within the portfolio through diversification across U.S. Government, International Government, and High Yield bonds. Over the past year, when the economy was declining and corporate credit quality deteriorated, high yield corporate bonds performed badly. However, that environment led to continued lowering of interest rates by the Federal Reserve, and a flight to quality into Government bonds -- both U.S. and International, which performed well. The Fund's holdings in each of these sectors largely offset each other, providing some stability relative to each sector individually. However, the impact of the significant deterioration in the high yield market in the middle of the year outweighed the strength of the Government sector in the fund, and the NAV drifted lower. Some of the impact was due to the larger down move in High Yield, and some was due to the fact that we have consistently overweighted an allocation to the high yield sector throughout the year. We continue to feel there is excellent relative value in the High Yield sector of the bond market and continue to carry the overweight. Since the flight to quality has continued to reverse, and confidence has returned to the corporate bond market, our overweight has allowed the Fund's NAV to drift higher, more than making up for the decline early in the year. As risk premiums have fallen, the strategic relative value assessment has come to fruition. Also, positioning the Fund to take advantage of falling interest rates internationally has benefited the Fund as economies in Europe have slowed and monetary policy has eased. Maintaining sufficient interest rate exposure has allowed the Fund to participate in the continued fall in yields, and provide balance against the high yield corporate bond exposure. Finally, our allocation to lower coupon mortgages has provided incremental income while minimizing prepayments. Going forward, we will continue to attempt to maintain a well-balanced, diversified portfolio of U.S. Government, International Government, and High Yield Corporate bonds to provide income and stability. /s/ Agnes G. Pampush /s/ Neil J. Powers Agnes G. Pampush, CFA Neil J. Powers, CFA Managing Director Managing Director 20 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) --------------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date --------------------------------------- 8.73% 6.26% 9.54% --------------------------------------- [Graphic Omitted Plot Points as follows:] 34/33/33 Hybrid of Merrill AAA U.S. Treasury/ STI Agency Master, Classic Merrill High Merrill Strategic Yield Master II, Merrill AAA Global Income & Merrill Global U.S. Treasury/ Merrill Government Fund, Government Agency High Yield Bond II Trust Bond II Master Master II ex U.S. Shares ex U.S. Indicies Index Index Index 11/30/01 10,000 10,000 10,000 10,000 10,000 5/02 10,075 10,112 10,146 10,174 10,005 5/03 10,954 11,258 11,476 11,159 11,042 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) --------------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date --------------------------------------- 8.16% 5.76% 8.76% Without CDSC --------------------------------------- 6.16% With CDSC ------ [Graphic Omitted Plot Points as follows:] 34/33/33 Hybrid of Merrill AAA U.S. Treasury/ STI Agency Master, Classic Merrill High Merrill Strategic Yield Master II, Merrill AAA Global Income & Merrill Global U.S. Treasury/ Merrill Government Fund, Government Agency High Yield Bond II Flex Bond II Master Master II ex U.S. Shares ex U.S. Indicies Index Index Indicies 11/30/01 10,000 10,000 10,000 10,000 10,000 5/02 10,056 10,112 10,146 10,174 10,005 5/03 10,876 11,258 11,476 11,159 11,042 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 21 STI CLASSIC U.S. GOVERNMENT SECURITIES FUND ------------------------------------------- The STI Classic U.S. Government Securities Fund (the "Fund") seeks to provide a high level of current income consistent with the preservation of capital by investing primarily in obligations issued or guaranteed (as to timely payment of principal and interest) by the U.S. Government or its instrumentalities and agencies. Total return includes current income as well as capital appreciation or depreciation of the Fund's assets. For the year ended May 31, 2003, the Fund's Trust shares had a total return of 9.25% compared to the Lehman Intermediate U.S. Government Bond Index return of 10.16%. The Merrill Lynch Government/Mortgage Custom Index, which is a customized synthetic index and has no fees, had a total return for the same period of 10.27%. During this period, the economy continued to grow at a very moderate pace, despite the efforts of the Federal Reserve and the U.S. Government to stimulate economic growth. The Federal Reserve cut short-term interest rates an additional 0.50% in November, while interest rates across the entire Treasury yield curve dropped sharply. The yields on intermediate Treasury securities dropped the most during this period, falling over 2.00%. The sharp decline in interest rates pulled down mortgage rates, as well, spurring a historically strong mortgage-refinancing wave. This caused the average duration of the mortgage index to shorten to less than one year. Despite this low rate/high prepayment environment, mortgages managed to outperform their duration adjusted Treasury counterparts. The higher yields of the MBS helped to offset the negative impact of higher prepayment speeds. However, the Fund had a slightly shorter average life/duration than the benchmark during this period, and that strategy had a modestly negative impact on the overall performance of the Fund. The Fund continues to invest in U.S. Government securities, with an emphasis on higher yielding mortgage-backed securities such as GNMA. These mortgages provide a more stable income distribution due to monthly payment of principal and interest. /s/ Michael Sebesta Michael Sebesta Managing Director 22 TRUST SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 9.25% 9.51% 6.76% 7.18% 84.41% -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Merrill Lynch Lehman U.S. Government Government/ Intermediate Securities Mortgage U.S. Government Fund, Custom Bond Trust Shares Index* Index 8/31/94 10,000 10,000 10,000 5/95 10,832 10,925 10,734 5/96 11,132 11,404 11,221 5/97 11,972 12,331 12,018 5/98 13,260 13,653 13,050 5/99 13,777 14,284 13,699 5/00 14,002 14,685 14,112 5/01 15,599 16,504 15,777 5/02 16,831 17,847 16,978 5/03 18,388 19,680 18,703 INVESTOR SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 8.79% 9.06% 6.33% 6.68% 78.77% Without load -------------------------------------------------- 4.69% 7.70% 5.52% 6.23% 72.06% With load -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Merrill Lynch Lehman U.S. Government Government/ Intermediate Securities Mortgage U.S. Government Fund, Custom Bond Investor Shares Index* Index 6/30/94 9,625 10,000 10,000 5/95 10,571 11,139 10,906 5/96 10,832 11,628 11,401 5/97 11,613 12,573 12,211 5/98 12,801 13,921 13,259 5/99 13,257 14,564 13,919 5/00 13,415 14,974 14,338 5/01 14,883 16,827 16,030 5/02 15,995 18,197 17,250 5/03 17,401 20,066 19,002 FLEX SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 8.14% 8.54% 5.81% 5.84% 57.31% Without CDSC -------------------------------------------------- 6.14% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Merrill Lynch Lehman U.S. Government Government/ Intermediate Securities Mortgage U.S. Government Fund, Custom Bond Flex Shares Index* Index 6/30/95 10,000 10,000 10,000 5/96 10,143 10,365 10,387 5/97 10,809 11,207 11,125 5/98 11,866 12,409 12,080 5/99 12,221 12,982 12,681 5/00 12,306 13,347 13,063 5/01 13,592 14,999 14,605 5/02 14,552 16,220 15,716 5/03 15,737 17,886 17,313 Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. *The Merrill Lynch Government/Mortgage Index is a synthetic index created by combining, at their respective market weights: (i) the Merrill Lynch Government Master Index, which is a widely-recognized index comprised of U.S. Treasury securities and U.S. Government agency securities with a maturity of at least one year; and (ii) the Merrill Lynch Mortgage Master Index, which is a widely-recognized market value-weighted index comprised of mortgage-backed securities including 15 and 30 year single family mortgages in addition to aggregate pooled mortgages. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 23 STI CLASSIC VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND ----------------------------------------------------- The STI Classic Virginia Intermediate Municipal Bond Fund (the "Fund") is an intermediate maturity fund that holds, primarily, investment grade bonds, supplemented by a small allocation to non rated bonds that the Advisor believes to be comparable in credit quality to lower investment grade. The Fund purchases securities issued by the Commonwealth of Virginia, its authorities, political subdivisions and agencies, occasionally supplemented with bonds issued by Puerto Rico. The Fund seeks to generate a competitive total return and income distribution with a more stable net asset value than long-term funds. We expect to maintain an average maturity between 5 and 10 years with no limitation on the maturity of a single holding. Currently, the Fund's longest bonds mature in 22 years. Nearly 75% of assets mature between 4 and 17 years. Duration is expected to stay in a range of 5 to 5.5. Modified adjusted duration is now 5.34. The Fund monitors the Lehman 5-Year Index with duration of 4.01. Compared to one year ago, the municipal yield curve is steeper and yields are dramatically lower. As measured by the yield pick up from 2 to 30 years, the slope of the curve was 330 basis points, compared to 280 BP one year ago. In terms of absolute change, rates declined 125 BP on 5-year high-grade bonds, 100 BP in 10 years, 85 BP in 20 years, and 80 BP in 30 years. Rates are at their lowest level since the 1960s on municipal securities and have dropped, precipitously, to 45-year lows across the U.S. Treasury curve. As a result, the total rate of return ("TRR") calculated by bond indices has been impressive with returns of 10% or higher on municipal bonds of 7 years and longer over 12 months. The economic recovery that was expected at this time one year ago is not in evidence. Non-farm payroll data has shown little or no growth and continuing unemployment claims have not fallen like analysts hoped. Interest rates in the U.S. moved to historic lows while inflation was a non-issue at a time of excess production capacity worldwide following the boom years in the late 1990s. Even a declining U.S. dollar and pending record budgetary deficit failed to pull rates back up. Similarly, the war in IRAQ was a valid reason for caution by business leaders who, it was believed, were delaying hiring and investment decisions until the war was resolved. So far this has not occurred but the U.S. consumer has stayed in the game aided by lower mortgage rates for refinancing or purchasing new homes. For the 12 months ended May 31, 2003, the Fund produced a competitive return though it could have been higher with a more "bulleted" portfolio inside 15 years. Our emphasis on credit quality resulted in a minor allocation to bonds rated below single-A. Just over 85% of total assets were rated double-A or higher. The largest sectors represented are state and local general obligations at 28%, health care at 15% and housing at 12% of total assets. Bonds subject to the alternative minimum tax are at 8.7% and this allocation will decline. For the 12 months ended May 31, 2003, the Fund's TRR was 8.43% for the Trust Shares class. The Lehman 5-Year General Obligation Bond Index had a return of 8.72% for the same period. The Lipper Other States Intermediate Municipal Debt Objective median return was reported as 8.42% for the same period. Following a dramatic move to lower rates in 2003, bond market participants wonder where rates can go from here. Cross currents include the demand for higher yields from holders of sizable money fund balances, budgetary deficits that need to be financed and competition from equity markets. Unlike the Federal government, most states are required by their Constitutions to balance spending with declining tax and other revenues. Tax hikes have been enacted in some states but not in Virginia, thus far. There also have been no credit downgrades of governmental bonds in our region. Inflation remains low and some economists have expressed concerns about possible deflation. As we await the ability of the U.S. economy to recover following aggressive assistance from monetary and fiscal policy, we intend to favor higher coupon bonds for their defensive characteristics when rates eventually turn higher. Duration will likely come down to the lower end of a 5 to 5.5 historical range. /s/ George E. Calvert Jr. George E. Calvert Jr. Vice President 24 TRUST SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 8.43% 8.09% 5.22% 5.07% 5.22% 69.66% -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Virginia Lehman Other States Intermediate 5-Year Intermediate Municipal Municipal Municipal Bond Fund, Bond Debt Funds Trust Shares Index Objectives 5/31/93 10,000 10,000 10,000 5/94 9,998 10,310 10,241 5/95 10,785 11,019 10,952 5/96 11,178 11,542 11,351 5/97 11,845 12,243 12,034 5/98 12,719 13,096 12,878 5/99 13,160 13,737 13,320 5/00 12,988 13,828 13,160 5/01 14,337 15,236 14,441 5/02 15,129 16,200 15,200 5/03 16,404 17,613 16,480 INVESTOR SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------- 8.38% 8.01% 5.19% 5.06% 4.99% 63.34% Without load -------------------------------------------------------------- 4.33% 6.66% 4.40% 4.65% 4.59% 57.20% With load -------------------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lipper Virginia Lehman Other States Intermediate 5-Year Intermediate Municipal Municipal Municipal Bond Fund, Bond Debt Funds Investor Shares Index Objectives 1/31/93 9,625 10,000 10,000 5/94 9,623 10,310 10,241 5/95 10,369 11,019 10,952 5/96 10,746 11,542 11,351 5/97 11,386 12,243 12,034 5/98 12,236 13,096 12,878 5/99 12,664 13,737 13,320 5/00 12,507 13,828 13,160 5/01 13,787 15,236 14,441 5/02 14,541 16,200 15,200 5/03 15,760 17,613 16,480 (1) Returns prior to May 24, 1999 represent the performance of the CrestFund Virginia Intermediate Municipal Bond Fund. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 25 STI CLASSIC VIRGINIA MUNICIPAL BOND FUND ---------------------------------------- The STI Classic Virginia Municipal Bond Fund (the "Fund") is a long term bond fund that holds, primarily, investment grade bonds supplemented by a small allocation to non rated bonds that the Advisor believes are comparable in quality to lower investment grade bonds. The Fund purchases securities issued by the Commonwealth of Virginia, its political subdivisions, authorities and agencies, supplemented, occasionally, with bonds issued by Puerto Rico. The Fund seeks to generate an attractive distribution to shareholders while producing a competitive total rate of return ("TRR") with bonds maturing out to 30 years or longer as well as variable rate tender bonds as money market securities. Although there are no average maturity or duration limitations on the portfolio, we intend to follow the duration of the Lehman 10-Year Municipal Bond Index with its modified adjusted duration of 6.62 years and average maturity of 9.85 years at May 31. The Fund's duration was shorter at 6.25 at May 31. We also monitor the Lehman GO Index with its wider maturity dispersion but similar duration as the 10-Year Index. Compared to one year ago, the municipal yield curve is steeper and yields are dramatically lower. As measured by the yield pick up from 2 to 30 years, the slope of the curve was 330 basis points (BP), compared to 280 BP one year ago. In terms of yield changes, rates declined 125 BP on 5-year high-grade bonds, 100 BP in 10 years, 85 BP in 20 years, and 80 BP in 30 years. Interest rates are at their lowest levels since the 1960s on municipal securities and have dropped precipitously to 45-year lows across the U.S. Treasury curve. As a result, the TRR calculated by bond indices has been impressive with returns of 10% or higher on municipal bonds of 7 years and longer over 12 months. The economic recovery that was expected at this time a year ago has not materialized. Non-farm payroll data has shown no growth and continuing unemployment claims have not dropped like analysts expected. Interest rates in the U.S. moved to historic lows with inflation a non issue at a time of excess production capacity world wide due to a continued "hang over" following the boom years in the late 1990s. Even a declining U.S. currency and pending record budgetary deficits failed to pull rates back up. Similarly, the war in Iraq was a valid reason for caution by business leaders who, it was believed, were delaying hiring and investment decisions until the war was resolved. So far this is not in evidence but the U.S. consumer has stayed in the game aided by lower mortgage rates for refinancing or purchasing new homes. With this backdrop the Fund produced a competitive TRR over twelve months holding all sectors of the market and emphasizing quality, diversification and call protection. Approximately 70% of total assets were rated double-A or higher. There is little or no sector concentration with GO bonds the largest at 19% followed by water & sewer revenue bonds at 15% and healthcare at 14%. The Fund holds 10% of assets in non-rated, governmental purpose and private activity bonds for yield enhancement. Bonds subject to the alternative minimum tax comprise only 3.3% of assets. For the twelve months ended May 31, 2003, the Fund's TRR was 9.86% for the Trust Shares class. The Lehman 10-Year Municipal Bond Index had a return of 11.08% for the same period. The Lipper Virginia Municipal Debt Funds Objective median return was reported as 9.22%. With tax-exempt rates at extreme lows, bond market observers wonder where rates can go from here with Federal budgetary deficits looming and most of the 50 states experiencing dire revenue shortfalls. Unlike the Federal government, states are required by their constitutions to balance spending with declining tax and other revenues. Tax hikes have been enacted in some states but not in Virginia, thus far. There have been no credit downgrades of governmental bonds in our region. Inflation remains very low and some economists have expressed concerns about possible deflation while the Federal Reserve does everything in its power to bring rates even lower. As we await the future of the US economy to evolve following aggressive assistance from monetary and fiscal policy, we intend to keep duration just below our benchmark and to favor higher coupon bonds for their defensive characteristics when rates eventually turn higher. /s/ George E. Calvert Jr. George E. Calvert Jr. Vice President 26 TRUST SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 9.86% 9.06% 5.44% 5.94% 60.10% -------------------------------------------------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman Lipper Virginia 10-Year Virginia Municipal Municipal Municipal Bond Fund, Bond Debt Funds Trust Shares Index Objectives 4/30/95 10,000 10,000 10,000 5/95 10,333 10,317 10,319 5/96 10,568 10,805 10,696 5/97 11,302 11,688 11,499 5/98 12,356 12,771 12,572 5/99 12,820 13,361 13,016 5/00 12,412 13,337 12,660 5/01 13,841 14,911 14,045 5/02 14,657 15,889 14,776 5/03 16,103 17,650 16,138 FLEX SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2003) -------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------- 8.89% 8.11% 4.50% 4.96% 48.22% Without CDSC -------------------------------------------------- 6.89% With CDSC -------- [Graphic Omitted Plot Points as follows:] STI Classic Lehman Lipper Virginia 10-Year Virginia Municipal Municipal Municipal Bond Fund, Bond Debt Funds Flex Shares Index Objectives 4/30/95 10,000 10,000 10,000 5/95 10,336 10,317 10,319 5/96 10,480 10,805 10,696 5/97 11,121 11,688 11,499 5/98 12,051 12,771 12,572 5/99 12,400 13,361 13,016 5/00 11,888 13,337 12,660 5/01 13,146 14,911 14,045 5/02 13,794 15,889 14,776 5/03 15,020 17,650 16,138 (1) Returns prior to May 24, 1999 represent the performance of the CrestFund Virginia Municipal Bond Fund. Past performance is no indication of future performance. The Funds' comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 27 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 FLORIDA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (93.6%) FLORIDA (86.0%) Alachua County, Health Facility Authority, Shands Teaching Hospital Project, Ser B, RB, MBIA 1.180%, 12/01/26 $3,000 $ 3,000 Brevard County, Health Facilities Authority, Holmes Regional Medical Center Project, RB, MBIA Callable 10/01/03 @ 102 5.700%, 10/01/08 3,000 3,105 Brevard County, Sales Tax Authority, RB, MBIA Prerefunded @ 101 (F) 5.700%, 12/01/04 100 108 Brevard County, School Board, COP, AMBAC Callable 07/01/12 @ 100 5.500%, 07/01/17 1,360 1,574 5.500%, 07/01/18 3,015 3,468 Brevard County, Utility Authority, RB, FGIC Callable 03/01/12 @ 100 5.250%, 03/01/13 1,000 1,159 5.250%, 03/01/14 1,000 1,155 Broward County, Port Facilities Authority, Ser C, RB, AMT, MBIA 5.375%, 09/01/08 3,360 3,815 Dade County, Aviation Authority, Ser A, RB, AMBAC Callable 10/01/05 @ 102 6.000%, 10/01/09 500 564 Dade County, Aviation Authority, Ser B, RB, MBIA Prerefunded @ 102 (F) 6.600%, 06/30/03 825 845 Dade County, Seaport Project, GO, MBIA 6.500%, 10/01/09 1,000 1,234 Dade County, Ser CC, GO, AMBAC 7.125%, 10/01/15 1,000 1,353 Dade County, Water & Sewer System Authority, RB, FGIC Callable 10/01/03 @ 102 5.000%, 10/01/07 2,000 2,066 Daytona Beach, Utility Systems Authority, Ser D, RB, FSA Callable 11/15/12 @ 100 5.250%, 11/15/15 1,000 1,155 Daytona Beach, Water & Sewer Authority, Ser 1978, RB, ETM Callable 11/15/03 @ 101 6.750%, 11/15/07 770 879 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Deerfield Beach, Water & Sewer Authority, RB, FGIC 6.125%, 10/01/06 $ 250 $ 273 Escambia County, Sales Tax Authority, RB, AMBAC Callable 10/01/12 @ 101 5.250%, 10/01/15 2,165 2,512 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser B, GO Callable 06/01/11 @ 101 5.500%, 06/01/15 3,000 3,493 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser B, GO, FGIC Callable 06/01/12 @ 101 5.375%, 06/01/18 2,130 2,438 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser C, GO Callable 06/01/05 @ 101 5.400%, 06/01/10 2,745 2,992 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser D, GO Callable 06/01/12 @ 100 5.375%, 06/01/15 1,535 1,781 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser D, GO Callable 06/01/10 @ 101 5.625%, 06/01/15 1,235 1,436 Florida State, Board of Education, Capital Outlay, Public Education Project, Ser D, GO Callable 06/01/10 @ 101 5.500%, 06/01/14 790 915 Florida State, Board of Education, Capital Outlay, Ser B, GO Callable 06/01/08 @ 101 5.250%, 06/01/11 1,000 1,129 Florida State, Board of Education, Capital Outlay, Ser C, GO, ETM Callable 06/01/03 @ 100 7.100%, 06/01/07 190 199 Florida State, Board of Education, Lottery Revenue, Ser A, RB, FGIC Callable 07/01/10 @ 101 6.000%, 07/01/12 1,295 1,548 Florida State, Board of Education, Lottery Revenue, Ser A, RB, FGIC Callable 07/01/12 @ 101 5.375%, 07/01/15 3,500 4,092 28 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Florida State, Board of Education, Lottery Revenue, Ser B, RB, FGIC Callable 07/01/10 @ 101 5.500%, 07/01/12 $4,050 $ 4,702 Florida State, Board of Education, Public Education Project, Ser H, GO, FSA 5.250%, 06/01/11 2,150 2,507 Florida State, Boynton Beach, Utility System Authority, RB, FGIC 5.500%, 11/01/16 2,810 3,408 5.375%, 11/01/14 2,535 3,043 Florida State, Division of Bond Finance, Department of General Services, Department of Environmental Protection & Preservation, Ser 2000-A, RB, FGIC Callable 07/01/09 @ 101 5.375%, 07/01/11 2,130 2,443 Florida State, Finance Department of General Services, Department of Environmental Protection & Preservation, Ser 2000-A, RB, MBIA 6.000%, 07/01/06 1,000 1,137 Florida State, Housing Financing Authority, Homeowner Mortgage Project, Ser 7, RB, AMT, FSA Callable 07/01/09 @ 100 5.200%, 07/01/31 775 805 Florida State, Jea-Johns River Power, Issue 2 - 17th Ser, RB 5.250%, 10/01/10 2,000 2,334 Florida State, Municipal Loan Council, Ser A, RB, MBIA 5.000%, 05/01/12 2,165 2,482 Greater Orlando, Aviation Authority, Airport Facilities, RB, AMT, FGIC 5.500%, 10/01/17 1,810 2,124 5.250%, 10/01/13 725 838 Greater Orlando, Aviation Authority, Airport Facilities, Ser A, RB, AMT, AMBAC Callable 10/01/03 @ 102 5.400%, 10/01/06 1,340 1,382 Hillsborough County, Aviation Authority, Tampa International Airport Project, Ser A, RB, MBIA Callable 10/01/13 @ 100 5.500%, 10/01/15 3,000 3,413 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Hillsborough County, Industrial Development Authority, University Community Hospital Project, RB, MBIA 6.500%, 08/15/19 $ 145 $ 189 Jacksonville, Electric Authority, Electrical Systems Project, Ser 3-A, RB Callable 10/01/07 @ 101 5.250%, 10/01/13 1,000 1,125 Jacksonville, Sales Tax Revenue, RB, AMBAC Callable 10/01/11 @ 100 5.500%, 10/01/13 1,435 1,678 5.500%, 10/01/14 1,200 1,399 5.500%, 10/01/15 1,550 1,796 Jupiter, Community Center Project, GO 5.500%, 07/01/21 1,235 1,474 Lakeland, Electric & Water Authority, First Lien, Ser C, RB, FSA 6.050%, 10/01/07 1,000 1,171 Lakeland, Utility Tax Authority, Ser A, RB, FGIC Prerefunded @ 102 (F) 5.700%, 10/01/04 100 108 Lee County, Industrial Development Authority, Bonita Springs Utilities Project, RB, AMT, MBIA Callable 11/01/06 @ 101 5.750%, 11/01/10 1,480 1,679 Lee County, Transportation Facility, Ser A, RB, AMBAC Callable 10/01/11 @ 100 5.500%, 10/01/13 2,000 2,339 Leon County, Southgate Educational Facilities Authority, COP, ETM 9.000%, 09/01/14 2,480 3,757 Miami, Parking Facilities Authority, RB, MBIA 5.250%, 10/01/15 1,000 1,186 Miami-Dade County, Aviation Authority, Miami International Airport Project, Ser C, RB, MBIA 5.000%, 10/01/09 1,000 1,146 Orange County, Health Facilities Authority, Ser A, RB, ETM, MBIA 6.250%, 10/01/07 1,120 1,322 Orange County, Health Facilities Authority, Ser C, RB, ETM, MBIA 6.250%, 10/01/16 4,855 6,268 29 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 FLORIDA TAX-EXEMPT BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Orange County, School Board Certificate Partnership, Ser A, COP, MBIA Callable 08/01/12 @ 100 5.500%, 08/01/18 $2,335 $ 2,689 Orlando, Utilities Commission Water & Sewer Authority, Sub-Ser D, RB, ETM 6.750%, 10/01/17 5,385 7,047 Osceola County, Tourist Development Tax Authority, Ser A, RB, FGIC Callable 10/01/12 @ 100 5.500%, 10/01/15 1,000 1,179 Palm Beach County, Criminal Justice Facility, RB 5.000%, 06/01/15 1,865 2,159 Palm Beach County, Land Acquisition Program Authority, Ser A, GO Callable 06/01/11 @ 100 5.500%, 06/01/16 1,200 1,379 5.375%, 06/01/14 1,050 1,207 Palm Beach County, School Board Authority, Ser C, COP, FSA Callable 08/01/12 @ 100 5.500%, 08/01/14 2,735 3,236 5.500%, 08/01/19 5,305 6,068 Palm Beach County, School District, GO, MBIA 5.000%, 08/01/07 3,600 4,051 Palm Beach County, Solid Waste Authority, Ser A, RB, AMBAC 6.000%, 10/01/10 6,000 7,268 Palm Beach County, Solid Waste Authority, Ser A, RB, ETM, AMBAC 6.000%, 10/01/09 300 364 Pensacola, Airport Authority, Ser A, RB, AMT, MBIA 6.250%, 10/01/09 505 598 Pensacola, Airport Authority, Ser A, RB, AMT, MBIA Callable 10/01/08 @ 102 6.000%, 10/01/12 1,075 1,241 Plant City, Utility Systems Authority, RB, MBIA 6.000%, 10/01/15 400 497 Polk County, Utility Systems Authority, RB, ETM, FGIC 6.000%, 10/01/08 2,250 2,564 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Polk County, Utility Systems Authority, RB, FGIC Callable 10/01/13 @ 100 5.250%, 10/01/20 $2,940 $ 3,301 Polk County, Utility Systems Authority, RB, FGIC Callable 10/01/13 @ 100 5.250%, 10/01/19 3,270 3,699 Tampa, Allegany Health Systems Authority, St Mary's Hospital, RB, ETM, MBIA Callable 12/01/03 @ 102 5.000%, 12/01/12 7,280 7,496 Tampa, Guaranteed Entitlement, RB, AMBAC 6.000%, 10/01/07 2,190 2,561 6.000%, 10/01/08 1,500 1,785 6.000%, 10/01/18 500 616 Tampa, Ser A, RB, AMBAC Callable 10/01/11 @ 101 5.375%, 10/01/14 1,640 1,914 -------- 168,462 -------- PUERTO RICO (7.6%) Puerto Rico Commonwealth, Government Development Authority, RB, MBIA (C) Callable 07/01/03 @ 100 1.050%, 12/01/15 3,000 3,000 Puerto Rico Commonwealth, Highway & Transportation Authority, Ser G, RB, FGIC Callable 07/01/13 @ 100 5.250%, 07/01/19 2,000 2,270 Puerto Rico Commonwealth, Highway & Transportation Authority, Ser H, RB, AMBAC Callable 07/01/10 @ 100 5.000%, 07/01/35 1,000 1,130 Puerto Rico Commonwealth, Municipal Finance Agency, Ser A, RB, FSA Callable 08/01/12 @ 100 5.250%, 08/01/14 4,330 5,048 5.250%, 08/01/16 1,020 1,170 Puerto Rico Commonwealth, Public Improvements Project, Ser A, GO, FGIC 5.500%, 07/01/11 1,000 1,192 30 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- Puerto Rico Commonwealth, Public Improvements Project, Ser A, GO, MBIA 5.500%, 07/01/18 $1,000 $ 1,212 -------- 15,022 -------- Total Municipal Bonds (Cost $169,649) 183,484 -------- CASH EQUIVALENTS (5.4%) Federated Tax Free Reserve Fund 5,134,206 5,134 SEI Institutional Tax Free Fund 5,422,461 5,422 -------- Total Cash Equivalents (Cost $10,556) 10,556 -------- REPURCHASE AGREEMENT (0.1%) Morgan Stanley 1.00%, dated 05/30/03, matures 06/02/03 repurchase price $138,572 (collateralized by U.S. Treasury Notes: total market value $141,343) (G) $ 139 139 -------- Total Repurchase Agreement (Cost $139) 139 -------- Total Investments (99.1%) (Cost $180,344) 194,179 -------- OTHER ASSETS AND LIABILITIES (0.9%) Investment Advisory Fees Payable (100) Administration Fees Payable (11) Distribution Fees Payable (23) Custodian Fees Payable (1) Other Assets and Liabilities, Net 1,811 -------- Total Other Assets and Liabilities 1,676 -------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 12,615,560 outstanding shares of beneficial interest $134,404 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 700,710 outstanding shares of beneficial interest 7,587 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 3,436,112 outstanding shares of beneficial interest 37,952 Undistributed net investment income 12 Accumulated net realized gain on investments2,065 Net unrealized appreciation on investments 13,835 -------- Total Net Assets (100.0%) $195,855 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($147,423,386 / 12,615,560 shares) $ 11.69 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($8,191,083 / 700,710 shares) $ 11.69 ======== Maximum Offering Price Per Share-- Investor Shares ($11.69 / 96.25%) $ 12.15 ======== Net Asset Value and Offering Price Per Share-- Flex Shares (1) ($40,240,626 / 3,436,112 shares) $ 11.71 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 31 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 GEORGIA TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (92.6%) GEORGIA (92.6%) Atlanta & Fulton County, Recreational Authority, Park Improvement, RB, AMBAC Callable 12/01/10 @ 101 5.500%, 12/01/13 $1,005 $ 1,178 5.250%, 12/01/16 1,050 1,184 Atlanta, Airport Facilities Authority, RB, AMBAC 6.500%, 01/01/06 1,000 1,126 Atlanta, Water & Sewer Authority, RB, ETM 6.000%, 01/01/11 1,000 1,215 Augusta, Water & Sewer Authority, RB, FSA Callable 10/01/12 @ 100 5.250%, 10/01/14 1,640 1,903 Bibb County, GO 7.000%, 01/01/04 985 1,019 Brunswick, Water & Sewer Authority, Refunding & Improvement Project, RB, MBIA 6.100%, 10/01/14 1,000 1,257 Cherokee County, School Systems, GO Callable 08/01/11 @ 101 5.250%, 08/01/15 1,000 1,142 Cherokee County, School Systems, GO, MBIA 5.000%, 08/01/11 1,000 1,148 Clarke County, Hospital Authority, Athens Regional Medical Control Project, RB, MBIA 5.375%, 01/01/07 1,425 1,598 Clarke County, Hospital Authority, Athens Regional Medical Control Project, RB, MBIA Callable 01/01/12 @ 101 5.375%, 01/01/16 585 659 5.375%, 01/01/17 870 975 Clayton County, Development Authority, Tuff Archives Project, Ser A, RB, MBIA Callable 07/01/12 @ 100 5.250%, 07/01/15 790 903 5.250%, 07/01/16 875 993 Clayton County, Water & Sewer Authority, RB, AMBAC Callable 05/01/06 @ 102 5.350%, 05/01/09 800 900 Clayton County, Water & Sewer Authority, Refunding & Improvement Project, RB 5.250%, 05/01/13 1,000 1,176 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Cobb County & Marietta, Water Authority, RB Callable 11/01/12 @ 102 5.500%, 11/01/13 $1,560 $ 1,883 Cobb County, Water & Sewer Authority, RB Callable 07/01/04 @ 102 5.125%, 07/01/06 1,000 1,061 Cobb-Marietta County, Coliseum & Expo Project, RB, MBIA 5.500%, 10/01/12 940 1,110 Coweta County, Development Authority, Newnan Water, Sewer & Light Community Project, RB, AMBAC Callable 01/01/10 @ 101 5.250%, 01/01/14 1,700 1,927 Coweta County, Water & Sewer Authority, RB Callable 06/01/11 @ 102 5.250%, 06/01/14 395 457 5.000%, 06/01/12 1,470 1,692 Dalton, Utilities Authority, RB, MBIA 6.000%, 01/01/08 3,240 3,782 DeKalb County, Development Authority, Emory University Project, Ser A, RB 5.375%, 11/01/05 1,650 1,811 DeKalb County, Development Authority, Emory University Project, Ser A, RB Callable 11/01/05 @ 101 5.200%, 11/01/08 500 550 DeKalb County, School District, Ser A, GO, ETM 6.250%, 07/01/11 1,500 1,866 DeKalb County, Special Recreation Tax District, GO 5.000%, 12/01/12 2,000 2,324 5.000%, 12/01/13 750 878 DeKalb County, Water & Sewer Authority, RB Callable 10/01/10 @ 101 5.250%, 10/01/12 1,000 1,149 Douglasville-Douglas County, Water & Sewer Authority, RB, AMBAC 5.625%, 06/01/15 1,390 1,685 Downtown Smyrna, Development Authority, RB, AMBAC 5.250%, 02/01/14 1,050 1,233 32 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Fayette County, Public Facility Authority, Criminal Justice Center Project, RB Callable 06/01/11 @ 101 5.000%, 06/01/15 $ 940 $ 1,050 Fayette County, Public Facility Authority, Criminal Justice Center Project, RB Prerefunded @ 101 (F) 6.250%, 06/01/10 700 867 Forsyth County, School District, GO 6.500%, 07/01/06 1,000 1,150 Forsyth County, School District, GO Callable 02/01/10 @ 102 6.000%, 02/01/15 1,000 1,191 5.750%, 02/01/11 3,000 3,558 Forsyth County, School District, GO, MBIA Prerefunded @ 102 (F) 5.350%, 07/01/05 780 863 Fulton County, School District, GO 6.375%, 05/01/17 500 651 5.250%, 01/01/12 1,000 1,164 Fulton County, Water & Sewer Authority, RB, ETM, FGIC 6.375%, 01/01/14 1,000 1,252 Gainesville, Water & Sewer Authority, RB, FSA Callable 11/15/11 @ 100 5.250%, 11/15/16 1,555 1,752 Georgia State, Housing & Financial Authority, Single-Family Mortgage, Sub-Ser B-1, RB Callable 06/01/05 @ 102 5.550%, 12/01/07 550 590 Georgia State, Housing & Financial Authority, Single-Family Mortgage, Sub-Ser B-1, RB, FHA Callable 06/01/06 @ 102 5.600%, 12/01/11 450 482 5.550%, 12/01/10 325 350 Georgia State, Municipal Electric Authority, RB, ETM Callable 07/07/03 @ 100 8.000%, 01/01/15 1,900 2,699 Georgia State, Municipal Electric Authority, Ser B, RB, ETM, MBIA 5.700%, 01/01/19 1,000 1,212 Georgia State, Private Colleges & Universities Authority, Emory University Project, Ser A, RB 5.250%, 09/01/09 1,500 1,743 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Georgia State, Private Colleges & Universities Facilities Authority, Mercer University Project, RB, ETM, MBIA 6.400%, 11/01/11 $1,675 $ 2,118 Georgia State, Ser C, GO 6.250%, 08/01/13 1,650 2,102 Georgia State, Ser D, GO Callable 11/01/11 @ 100 5.000%, 11/01/15 1,000 1,120 Griffin Combined Public Utility Authority, RB, AMBAC Callable 01/01/2013 @ 102 5.000%, 01/01/15 1,140 1,302 Gwinnett County, Recreational Authority, RB 5.800%, 02/01/06 660 736 Gwinnett County, School District, Ser B, GO 6.400%, 02/01/06 500 565 6.400%, 02/01/07 1,500 1,744 Hall County, School District, Ser B, GO 6.300%, 12/01/05 675 758 Henry County, Hospital Authority, Henry Medical Center Project, RB, AMBAC Callable 07/01/07 @ 102 5.500%, 07/01/08 545 625 Henry County, Hospital Authority, Henry Medical Center Project, RB, AMBAC Prerefunded @ 102 (F) 5.500%, 07/01/07 1,640 1,906 Henry County, School District, GO Callable 08/01/11 @ 100 5.125%, 08/01/13 1,500 1,713 Henry County, School District, Ser A, GO 6.450%, 08/01/11 500 612 Henry County, Water & Sewer Authority, RB, AMBAC 6.150%, 02/01/20 2,465 3,140 Henry County, Water & Sewer Authority, RB, FGIC 6.000%, 02/01/18 1,055 1,329 5.625%, 02/01/16 940 1,141 Henry County, Water & Sewer Authority, Ser A, RB, MBIA 5.375%, 02/01/13 500 592 33 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 GEORGIA TAX-EXEMPT BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Houston County, School District, Intergovernmental Contract, COP, MBIA Prerefunded @ 102 (F) 6.000%, 03/01/04 $2,000 $ 2,114 Medical Center Hospital Authority, Columbus Regional Health Care System, RB, MBIA Prerefunded @ 102 (F) 6.000%, 08/01/05 1,340 1,504 Meriwether County, School District, GO, FSA 7.000%, 02/01/06 740 847 Metropolitan Atlanta, Rapid Transportation Authority, Ser A, RB, MBIA 6.250%, 07/01/07 500 585 Metropolitan Atlanta, Rapid Transportation Authority, Ser E, RB, ETM Callable 07/07/03 @ 100 7.000%, 07/01/11 1,165 1,485 Metropolitan Atlanta, Rapid Transportation Authority, Ser N, RB 6.000%, 07/01/07 1,000 1,153 Metropolitan Atlanta, Rapid Transportation Authority, Ser P, RB, AMBAC 6.250%, 07/01/08 1,000 1,194 Milledgeville, Water & Sewer Authority, RB, FSA 6.000%, 12/01/16 1,000 1,259 Murray County, School District, Sales Tax Project, GO 5.000%, 10/01/05 875 950 Newton County, Hospital Authority, Newton Health Systems Project, RB, AMBAC Callable 02/01/10 @ 101 5.750%, 02/01/11 780 906 5.750%, 02/01/12 825 948 Newton County, School District, GO Callable 02/01/13 @ 101 5.000%, 02/01/14 2,660 3,062 Paulding County, School District, GO, MBIA 6.000%, 02/01/10 1,000 1,197 - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- Paulding County, School District, Ser A, GO 6.625%, 02/01/07 $ 1,000 $ 1,168 6.625%, 02/01/08 525 628 Rome, Water & Sewer Authority, RB, AMBAC 5.250%, 01/01/09 775 889 Savannah, Water & Sewer Authority, RB, ETM Callable 12/01/03 @ 100 6.450%, 12/01/04 1,000 1,080 Valdosta & Lowndes County, Hospital Authority, South Georgia Medical Center Project, RB, AMBAC Callable 10/01/12 @ 101 5.500%, 10/01/14 940 1,091 5.500%, 10/01/15 965 1,115 Vidalia, Water & Sewer Authority, RB, ETM Callable 01/01/04 @ 101 6.000%, 07/01/07 605 704 Walker, Dade & Catoosa Counties, Hutcheson Medical Project, Ser A, RB, FSA Callable 10/01/07 @ 102 5.500%, 10/01/08 1,370 1,563 -------- Total Municipal Bonds (Cost $98,791) 109,303 -------- CASH EQUIVALENTS (6.2%) Federated Tax Free Reserve Fund 5,182,046 5,182 SEI Institutional Tax Free Fund 2,168,134 2,168 -------- Total Cash Equivalents (Cost $7,350) 7,350 -------- Total Investments (98.8%) (Cost $106,141) 116,653 -------- OTHER ASSETS AND LIABILITIES (1.2%) Investment Advisory Fees Payable (60) Administration Fees Payable (7) Distribution Fees Payable (8) Custodian Fees Payable (1) Other Assets and Liabilities, Net 1,510 -------- Total Other Assets and Liabilities 1,434 -------- 34 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 9,081,385 outstanding shares of beneficial interest $ 90,296 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 241,326 outstanding shares of beneficial interest 2,345 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 1,522,628 outstanding shares of beneficial interest 15,531 Undistributed net investment income 3 Accumulated net realized loss on investments (600) Net unrealized appreciation on investments 10,512 -------- Total Net Assets (100.0%) $118,087 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($98,865,666 / 9,081,385 shares) $10.89 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($2,630,450 / 241,326 shares) $10.90 ======== Maximum Offering Price Per Share -- Investor Shares ($10.90 / 96.25%) $11.32 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($16,590,510 / 1,522,628 shares) $10.90 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 35 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 HIGH INCOME FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CORPORATE OBLIGATIONS (91.9%) AEROSPACE & DEFENSE (1.9%) K & F Industries, Ser B Callable 12/15/06 @ 104.813 9.625%, 12/15/10 $ 500 $ 536 L-3 Communications (B) Callable 07/15/08 @ 103.063 6.125%, 07/15/13 1,000 995 Sequa 9.000%, 08/01/09 1,500 1,575 Titan (B) Callable 05/15/07 @ 104 8.000%, 05/15/11 100 103 -------- 3,209 -------- AUTOPARTS (3.6%) Cummins (B) 9.500%, 12/01/10 500 539 Dana (K) 6.500%, 03/15/08 1,000 970 Dana Credit (B) 8.375%, 08/15/07 500 499 HLI Operating (B) Callable 06/15/07 @ 105.25 10.500%, 06/15/10 250 256 Metaldyne Callable 06/15/07 @ 105.5 11.000%, 06/15/12 2,000 1,540 Stoneridge Callable 05/01/07 @ 105.75 11.500%, 05/01/12 100 109 TRW Automotive (B) 9.375%, 02/15/13 500 521 TRW Automotive (B) Callable 02/15/08 @ 105.5 11.000%, 02/15/13 1,500 1,564 -------- 5,998 -------- BROADCASTING (3.8%) Albritton Communications Callable 12/15/07 @ 103.88 7.750%, 12/15/12 1,000 1,027 Corus Entertainment Callable 03/01/07 @ 104.375 8.750%, 03/01/12 900 954 Grupo Televisa 8.500%, 03/11/32 750 806 Liberty Media 5.700%, 05/15/13 1,000 1,045 LIN Television (B) Callable 05/15/08 @ 103.25 6.500%, 05/15/13 100 100 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Paxson Communications (A) (K) Callable 01/15/06 @ 106.12 7.513%, 01/15/09 $1,500 $ 1,223 Paxson Communications Callable 07/15/05 @ 105.375 10.750%, 07/15/08 500 535 Spanish Broadcasting Callable 11/01/04 @ 104.813 9.625%, 11/01/09 500 523 -------- 6,213 -------- BUILDING & CONSTRUCTION (4.0%) K. Hovnanian Enterprises (K) Callable 04/01/07 @ 104.438 8.875%, 04/01/12 1,000 1,060 K. Hovnanian Enterprises (B) Callable 05/15/08 @ 103.875 7.750%, 05/15/13 250 254 KB Home Callable 02/01/07 @ 103.875 7.750%, 02/01/10 750 791 Standard Pacific 9.250%, 04/15/12 1,500 1,613 WCI Communities (K) Callable 02/15/06 @ 105.313 10.625%, 02/15/11 1,000 1,080 WCI Communities Callable 05/01/07 @ 104.56 9.125%, 05/01/12 750 777 William Lyon Homes 10.750%, 04/01/13 1,000 1,035 -------- 6,610 -------- CABLE (5.2%) Adelphia Communications (J) 10.875%, 10/01/10 250 139 Adelphia Communications, Ser B (J) 10.500%, 07/15/04 500 275 Charter Communications Holdings 10.750%, 10/01/09 1,500 1,095 Comcast 10.625%, 07/15/12 340 448 Direct TV Holdings (B) Callable 03/15/08 @ 104.188 8.375%, 03/15/13 500 554 Echostar DBS Callable 10/01/04 @ 105.188 10.375%, 10/01/07 1,000 1,104 Echostar DBS Callable 02/01/04 @ 104.69 9.375%, 02/01/09 525 562 36 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Echostar DBS Callable 01/15/06 @ 104.563 9.125%, 01/15/09 $ 500 $ 555 Insight Midwest LP (K) Callable 10/01/04 @ 104.875 9.750%, 10/01/09 2,000 2,090 Mediacom LLC (K) Callable 01/15/06 @ 104.75 9.500%, 01/15/13 1,250 1,312 Mediacom LLC, Ser B (K) Callable 04/15/04 @ 104.25 8.500%, 04/15/08 400 403 -------- 8,537 -------- CHEMICALS (3.9%) Compass Minerals Group Callable 08/15/06 @ 105 10.000%, 08/15/11 750 829 Equistar Chemical (B) Callable 05/01/07 @ 105.313 10.625%, 05/01/11 2,500 2,537 HMP Equity Holdings (B) (D) 13.880%, 05/15/08 2,250 1,069 IMC Global (B) 11.250%, 06/01/11 500 555 IMC Global, Ser B Callable 06/01/06 @ 105.63 11.250%, 06/01/11 750 832 Millennium America (B) 9.250%, 06/15/08 250 270 OM Group Callable 12/15/06 @ 104.625 9.250%, 12/15/11 500 435 -------- 6,527 -------- CONSUMER PRODUCTS (3.0%) American Achievement, Ser B Callable 01/01/05 @ 105.813 11.625%, 01/01/07 750 811 Chattem, Ser B Callable 04/01/04 @ 102.958 8.875%, 04/01/08 1,000 1,030 Hasbro 6.600%, 07/15/28 1,500 1,463 Jafra Cosmetics International (B) Callable 05/15/07 @ 105.38 10.750%, 05/15/11 500 510 Levi Strauss (K) Callable 01/15/05 @ 105.813 11.625%, 01/15/08 1,000 855 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Phillips Van Heusen (B) Callable 05/01/08 @ 104.063 8.125%, 05/01/13 $ 250 $ 256 -------- 4,925 -------- ENERGY (6.1%) Compton Petroleum Callable 05/15/06 @ 104.95 9.900%, 05/15/09 500 540 Denbury Resources (B) Callable 04/01/08 @ 103.75 7.500%, 04/01/13 500 512 Frontier Escrow (B) Callable 02/01/07 @ 104.625 8.000%, 04/15/13 500 514 Key Energy Services 6.375%, 05/01/13 250 253 Magnum Hunter Callable 06/01/03 @ 105 10.000%, 06/01/07 197 203 Peabody Energy Callable 03/15/08 @ 103.44 6.875%, 03/15/13 750 784 Pemex Project Funding Master Trust (K) 7.375%, 12/15/14 2,000 2,210 Premcor Refining Group (B) Callable 02/01/07 @ 104.625 9.250%, 02/01/10 1,000 1,100 Stone Energy Callable 12/15/06 @ 104.125 8.250%, 12/15/11 1,000 1,050 Swift Energy (K) Callable 05/01/07 @ 104.688 9.375%, 05/01/12 750 791 Tesoro Petroleum (K) Callable 04/01/07 @ 104.813 9.625%, 04/01/12 500 450 Tesoro Petroleum (B) Callable 04/15/06 @ 104 8.000%, 04/15/08 100 100 Tesoro Petroleum, Ser B (K) Callable 11/01/05 @ 104.81 9.625%, 11/01/08 500 458 Westport Resources 8.250%, 11/01/11 500 543 XTO Energy (B) 6.250%, 04/15/13 500 521 -------- 10,029 -------- 37 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 HIGH INCOME FUND--CONTINUED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- ENTERTAINMENT (5.6%) Argosy Gaming Company Callable 06/01/04 @ 105.38 10.750%, 06/01/09 $ 500 $ 546 Boyd Gaming (B) Callable 12/15/07 @ 103.875 7.750%, 12/15/12 500 514 Cinemark (B) Callable 02/01/08 @ 104.50 9.000%, 02/01/13 250 269 Kerzner International Callable 08/15/06 @ 104.438 8.875%, 08/15/11 2,000 2,135 MGM Mirage 9.750%, 06/01/07 500 550 Pinnacle Entertainment, Ser B Callable 08/01/03 @ 104.75 9.500%, 08/01/07 100 96 Resort International Hotel & Casino Callable 03/15/07 @ 106 11.500%, 03/15/09 500 454 Royal Caribbean Cruises 8.750%, 02/02/11 500 502 8.000%, 05/15/10 250 250 Six Flags (B) 9.750%, 04/15/13 1,000 1,002 Six Flags (K) Callable 02/01/06 @ 104.44 8.875%, 02/01/10 1,000 954 Venetian Casino Callable 06/15/06 @ 105.50 11.000%, 06/15/10 1,500 1,641 Vivendi Universal (B) Callable 04/15/07 @ 104.625 9.250%, 04/15/10 250 284 -------- 9,197 -------- FINANCIAL SERVICES (0.2%) Capital One Financial 7.250%, 05/01/06 375 402 -------- FOOD, BEVERAGE & TOBACCO (3.5%) B&G Foods, Ser D Callable 08/01/03 @ 103.208 9.625%, 08/01/07 125 128 Burns Philp Capital Property (B) Callable 07/15/07 @ 104.875 9.750%, 07/15/12 2,000 1,930 Del Monte, Ser B Callable 05/15/06 @ 104.63 9.250%, 05/15/11 500 537 Dole Foods (B) Callable 03/15/07 @ 104.438 8.875%, 03/15/11 125 132 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Land O Lakes, Ser B Callable 11/15/06 @ 104.38 8.750%, 11/15/11 $2,000 $ 1,500 RJ Reynolds Tobacco Holdings, Ser B 7.750%, 05/15/06 1,000 1,026 Swift (B) Callable 10/01/06 @ 105.063 10.125%, 10/01/09 500 493 -------- 5,746 -------- HOTELS & LODGING (0.9%) Host Marriott, Ser B Callable 08/01/03 @ 103.99 7.875%, 08/01/08 1,000 997 John Q Hammons Hotels, Ser B (K) Callable 05/15/07 @ 104.438 8.875%, 05/15/12 500 513 -------- 1,510 -------- INDUSTRIAL (7.0%) AMI Semiconductor (B) Callable 02/01/08 @ 105.375 10.750%, 02/01/13 1,000 1,097 Berry Plastics Callable 07/15/07 @ 105.375 10.750%, 07/15/12 250 272 Bway (B) Callable 10/15/06 @ 105 10.000%, 10/15/10 100 103 Case 7.250%, 08/01/05 1,000 993 Case, Ser B (K) 6.250%, 12/01/03 535 535 Constar Callable 12/01/07 @ 105.50 11.000%, 12/01/12 500 530 Federal-Mogul (J) 7.375%, 01/15/06 175 29 Foamex LP Callable 04/01/06 @ 105.375 10.750%, 04/01/09 500 400 NMGH Holding Callable 05/15/06 @ 105 10.000%, 05/15/09 1,500 1,613 Owens-Brockway (B) Callable 05/15/08 @ 104.125 8.250%, 05/15/13 250 253 Pliant (B) Callable 06/01/07 @ 105.56 11.125%, 09/01/09 500 515 Polaroid (J) 11.500%, 02/15/06 100 7 38 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Polaroid, Ser A, MTN (I) 6.750%, 01/15/02 $ 100 $ -- Shaw Group (B) Callable 03/15/07 @ 105.375 10.750%, 03/15/10 1,000 990 Trimas Callable 06/15/07 @ 104.938 9.875%, 06/15/12 1,500 1,515 UCAR Finance Callable 02/15/07 @ 105.125 10.250%, 02/15/12 250 240 United States Steel Callable 05/15/07 @ 104.88 9.750%, 05/15/10 1,000 990 Xerox 5.500%, 11/15/03 1,050 1,047 Xerox, Ser E, MTN 5.250%, 12/15/03 500 498 -------- 11,627 -------- MEDICAL & MEDICAL PRODUCTS (6.4%) Ameripath (B) Callable 04/01/08 @ 105.25 10.500%, 04/01/13 2,000 2,080 Fisher Scientific International Callable 05/01/07 @ 104.06 8.125%, 05/01/12 500 536 Healthsouth (J) (K) 8.375%, 10/01/11 1,500 1,020 Medex (B) Callable 05/15/08 @ 104.438 8.875%, 05/15/13 400 410 Pacificare Health Systems (K) Callable 06/01/06 @ 105.375 10.750%, 06/01/09 1,500 1,642 PerkinElmer (B) Callable 01/15/08 @ 104.438 8.875%, 01/15/13 500 540 Rotech Healthcare 9.500%, 04/01/12 2,000 1,980 United Surgical Partners (K) Callable 12/15/06 @ 105 10.000%, 12/15/11 1,710 1,847 US Oncology Callable 02/01/07 @ 104.813 9.625%, 02/01/12 500 539 -------- 10,594 -------- PRINTING & PUBLISHING (2.5%) Dex Media East LLC Callable 11/15/06 @ 104.94 9.875%, 11/15/09 250 282 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Dex Media East LLC Callable 11/15/07 @ 106.063 12.125%, 11/15/12 $ 250 $ 293 Houghton Mifflin (B) Callable 02/01/08 @ 102.063 8.250%, 02/01/11 250 260 Houghton Mifflin (B) Callable 02/01/08 @ 104.938 9.875%, 02/01/13 250 268 Primedia 7.625%, 04/01/08 500 494 Primedia (B) Callable 05/15/08 @ 104 8.000%, 05/15/13 1,000 1,005 RH Donnelley (B) Callable 12/15/06 @ 104.438 8.875%, 12/15/10 250 273 RH Donnelley (B) Callable 12/15/07 @ 105.438 10.875%, 12/15/12 250 283 Von Hoffman Press 10.250%, 03/15/09 990 1,020 -------- 4,178 -------- REAL ESTATE INVESTMENT TRUSTS (3.5%) Crescent Real Estate Callable 04/15/06 @ 104.625 9.250%, 04/15/09 1,000 1,073 Forest City Enterprises Callable 06/01/08 @ 103.813 7.625%, 06/01/15 250 257 La Quinta Properties (B) Callable 03/15/07 @ 104.438 8.875%, 03/15/11 1,000 1,045 MeriStar Hospitality 9.000%, 01/15/08 500 472 MeriStar Hospitality Operating Partnership LP Callable 12/15/05 @ 105.25 10.500%, 06/15/09 1,750 1,702 Senior Housing Properties Trust Callable 04/15/08 @ 103.938 7.875%, 04/15/15 500 507 Thornburg Mortgage (B) Callable 05/15/08 @ 104 8.000%, 05/15/13 500 498 Ventas Realty LP 9.000%, 05/01/12 250 271 -------- 5,825 -------- 39 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 HIGH INCOME FUND--CONTINUED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- RETAIL (6.2%) AmeriGas Partners LP, Ser B Callable 05/20/06 @ 104.438 8.875%, 05/20/11 $ 500 $ 537 Asbury Automotive Group Callable 06/15/07 @ 104.5 9.000%, 06/15/12 1,000 940 Cole National Group Callable 05/15/07 @ 104.438 8.875%, 05/15/12 250 236 Great Atlantic & Pacific Tea Callable 12/15/06 @ 104.563 9.125%, 12/15/11 1,750 1,557 Hollywood Entertainment Callable 03/15/07 @ 104.813 9.625%, 03/15/11 1,000 1,065 Ingles Markets Callable 12/01/06 @ 104.438 8.875%, 12/01/11 1,000 1,010 Office Depot 10.000%, 07/15/08 500 585 Rent-A-Center (B) Callable 05/01/06 @ 103.75 7.500%, 05/01/10 200 205 Rite Aid (B) Callable 05/01/07 @ 104.063 8.125%, 05/01/10 500 510 Roundy's, Ser B (B) Callable 06/15/07 @ 104.438 8.875%, 06/15/12 1,500 1,564 Star Gas Partners LP (B) Callable 02/15/08 @ 105.125 10.250%, 02/15/13 2,000 2,050 -------- 10,259 -------- SERVICES (6.2%) Allied Waste (B) 9.250%, 09/01/12 500 536 Allied Waste Callable 04/15/08 @ 103.94 7.875%, 04/15/13 500 505 Avnet 9.750%, 02/15/08 1,000 1,145 CBRE Escrow (B) Callable 05/15/07 @ 104.88 9.750%, 05/15/10 250 260 Coinmach Callable 02/01/06 @ 104.5 9.000%, 02/01/10 500 537 Corrections Callable 05/01/07 @ 103.75 7.500%, 05/01/11 250 256 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- IESI Callable 06/15/07 @ 105.125 10.250%, 06/15/12 $ 500 $ 522 Interline Brands (B) Callable 05/15/07 @ 105.75 11.500%, 05/15/11 1,000 1,025 IPC Acquisition Callable 12/15/05 @ 105.750 11.500%, 12/15/09 400 416 Muzak LLC (B) Callable 02/15/06 @ 105 10.000%, 02/15/09 500 513 National Waterworks Callable 12/01/07 @ 105.25 10.500%, 12/01/12 250 279 Sanmina-SCI (B) Callable 01/15/07 @ 105.188 10.375%, 01/15/10 500 555 Service International (K) 7.700%, 04/15/09 500 505 6.875%, 10/01/07 500 498 Thomas & Betts Callable 06/01/08 @ 103.62 7.250%, 06/01/13 250 251 Transmontaigne (B) Callable 06/01/07 @ 104.563 9.125%, 06/01/10 500 513 United Rentals, Ser B (K) Callable 06/01/03 @ 104.75 9.500%, 06/01/08 2,000 1,890 -------- 10,206 -------- TELEPHONE & TELECOMMUNICATIONS (10.6%) Crown Castle International (K) Callable 08/01/05 @ 105.375 10.750%, 08/01/11 2,000 2,100 Fairpoint Communications (B) Callable 03/01/07 @ 105.94 11.875%, 03/01/10 250 286 Horizon PCS Callable 12/15/06 @ 106.87 13.750%, 06/15/11 400 45 Intermedia Communication, Ser B (J) 11.250%, 07/15/07 1,500 1,099 Nextel Communications (A) Callable 09/15/03 @ 102.663 10.650%, 09/15/07 3,000 3,112 PanAmSat (K) Callable 02/01/07 @ 104.25 8.500%, 02/01/12 2,500 2,675 Rogers Cantel 8.300%, 10/01/07 750 765 40 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Rogers Cantel Callable 06/01/03 @ 104.69 9.375%, 06/01/08 $1,000 $ 1,045 Rural Cellular, Ser B Callable 05/15/04 @ 103.208 9.625%, 05/15/08 631 508 Sprint Capital 6.125%, 11/15/08 1,500 1,585 Triton PCS (A) (K) 9.443%, 05/01/08 2,000 2,120 TSI Telecommunications Services, Ser B Callable 02/01/06 @ 106.375 12.750%, 02/01/09 1,000 940 Voicestream Wireless (A) Callable 11/15/04 @ 105.94 9.189%, 11/15/09 1,325 1,285 -------- 17,565 -------- TRANSPORTATION (2.5%) Continental Airlines (K) 8.000%, 12/15/05 150 118 General Maritime (B) Callable 03/15/08 @ 105 10.000%, 03/15/13 1,000 1,067 Greyhound Lines, Ser B 11.500%, 04/15/07 2,440 1,867 Laidlaw International (B) 10.750%, 06/15/11 500 510 Overseas Shipholding Group (B) Callable 03/15/08 @ 104.12 8.250%, 03/15/13 500 513 -------- 4,075 -------- UTILITIES (5.3%) AES (B) Callable 05/15/08 @ 104.375 8.750%, 05/15/13 250 254 Calpine 8.500%, 02/15/11 (K) 300 204 7.875%, 04/01/08 75 52 7.625%, 04/15/06 (K) 435 322 El Paso Energy Partners (B) Callable 12/01/07 @ 105.313 10.625%, 12/01/12 500 575 El Paso Energy Partners, Ser B (K) Callable 12/01/06 @ 104.25 8.500%, 06/01/11 1,000 1,065 Kansas Gas & Electric 6.500%, 08/01/05 250 262 Mission Energy Holdings 13.500%, 07/15/08 1,950 1,287 - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- PSEG Energy Holdings (B) 7.750%, 04/16/07 $ 500 $ 531 Semco Energy (B) 7.125%, 05/15/08 250 258 Westar Energy 9.750%, 05/01/07 750 823 Williams 9.250%, 03/15/04 3,000 3,060 -------- 8,693 -------- Total Corporate Obligations (Cost $150,484) 151,925 -------- FOREIGN GOVERNMENT DEBT SECURITIES (1.9%) BRAZIL (1.9%) Republic of Brazil 10.000%, 01/16/07 3,000 3,060 -------- Total Foreign Government Debt Securities (Cost $2,979) 3,060 -------- FOREIGN COMMON STOCK (0.1%) TELEPHONE & TELECOMMUNICATIONS (0.1%) AT&T Canada, Cl A 96 3 AT&T Canada, Cl B 5,159 149 -------- 152 -------- Total Foreign Common Stock (Cost $688) 152 -------- SHORT-TERM INVESTMENT (14.5%) Boston Global Investment Trust -- Enhanced Portfolio (L) 23,965,904 23,966 -------- Total Short-Term Investment (Cost $23,966) 23,966 -------- CASH EQUIVALENT (4.1%) SEI Daily Income Trust Prime Obligation Fund 6,874,711 6,875 -------- Total Cash Equivalent (Cost $6,875) 6,875 -------- REPURCHASE AGREEMENT (0.2%) Morgan Stanley 1.05%, dated 05/30/03, matures 06/02/03, repurchase price $315,413 (collateralized by a U.S. Treasury Note: total market value $321,695) (G) 315 315 -------- Total Repurchase Agreement (Cost $315) 315 -------- Total Investments (112.7%) (Cost $185,307) 186,293 -------- 41 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 HIGH INCOME FUND--CONCLUDED - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (-12.7%) Investment Advisory Fees Payable $ (88) Administration Fees Payable (9) Distribution Fees Payable (31) Custodian Fees Payable (2) Payable upon Return of Securities Loaned (23,966) Other Assets and Liabilities, Net 3,073 -------- Total Other Assets and Liabilities (21,023) -------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 14,093,578 outstanding shares of beneficial interest 99,074 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 8,999,093 outstanding shares of beneficial interest 67,540 Undistributed net investment income 1 Accumulated net realized loss on investments (2,331) Net unrealized appreciation on investments 986 -------- Total Net Assets (100.0%) $165,270 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($100,851,791 / 14,093,578 shares) $7.16 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($64,418,194 / 8,999,093 shares) $7.16 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 42 - -------------------------------------------------------------------------------- INVESTMENT GRADE BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (16.5%) U.S. Treasury Bonds 7.500%, 11/15/16 $14,875 $ 20,532 6.250%, 08/15/23 to 05/15/30 53,525 67,829 5.375%, 02/15/31 (K) 27,000 31,371 U.S. Treasury Note 5.875%, 11/15/05 (K) 25,000 27,665 -------- Total U.S. Treasury Obligations (Cost $131,202) 147,397 -------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (22.6%) FHLMC 6.500%, 02/01/17 7,066 7,391 FNMA 7.000%, 05/01/32 18,128 19,097 6.500%, 07/01/32 to 12/01/32 22,725 23,685 6.000%, 09/01/17 17,497 18,230 5.000%, 06/01/29 35,447 36,366 4.500%, 06/18/18 23,646 24,237 GNMA 8.500%, 04/15/31 13,691 14,798 8.000%, 08/15/31 to 09/15/31 36,548 39,513 7.000%, 04/15/32 to 07/15/32 17,557 18,501 -------- Total U.S. Agency Mortgage-Backed Obligations (Cost $198,522) 201,818 -------- CORPORATE OBLIGATIONS (48.5%) AEROSPACE & DEFENSE (1.5%) General Dynamics 4.250%, 05/15/13 3,980 4,061 2.125%, 05/15/06 4,625 4,650 Northrop Grumman 7.125%, 02/15/11 3,900 4,725 -------- 13,436 -------- BANKING (5.4%) Bank of America 6.500%, 03/15/06 10,700 11,944 Bank One 5.500%, 03/26/07 5,200 5,781 KFW International Finance, Ser DTC 2.500%, 10/17/05 8,000 8,166 Wachovia 6.800%, 06/01/05 8,000 8,780 Wells Fargo (K) 3.500%, 04/04/08 13,100 13,526 -------- 48,197 -------- FINANCE (10.7%) Boeing Capital (K) 5.650%, 05/15/06 8,550 9,244 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CIT Group 4.125%, 02/21/06 $11,375 $ 11,792 General Electric Capital 3.500%, 05/01/08 14,000 14,383 General Motors Acceptance 6.875%, 08/28/12 5,550 5,748 Golden West Financial 4.125%, 08/15/07 5,000 5,317 Household Finance (K) 7.625%, 05/17/32 3,725 4,806 5.750%, 01/30/07 8,500 9,420 International Lease Finance, Ser M, MTN 5.950%, 06/06/05 12,600 13,425 National Rural Utilities 3.000%, 02/15/06 12,505 12,866 Washington Mutual Financial 8.250%, 06/15/05 7,650 8,568 -------- 95,569 -------- FOOD, BEVERAGE & TOBACCO (3.6%) Coca-Cola Enterprises 8.500%, 02/01/22 10,000 13,900 Conagra Foods 7.500%, 09/15/05 4,045 4,516 Diageo Capital 3.500%, 11/19/07 4,825 4,996 3.375%, 03/20/08 4,475 4,602 Kroger 5.500%, 02/01/13 4,375 4,665 -------- 32,679 -------- INDUSTRIAL (9.1%) Alcoa (K) 4.250%, 08/15/07 9,000 9,583 Anadarko Petroleum 3.250%, 05/01/08 6,375 6,385 Cardinal Health 4.450%, 06/30/05 2,000 2,109 CBS 7.875%, 09/01/23 3,900 5,002 Computer Sciences 7.500%, 08/08/05 8,950 9,971 Conoco 6.950%, 04/15/29 9,000 11,104 DaimlerChrysler, Ser D, MTN 3.400%, 12/15/04 8,775 8,924 Ford Motor 6.625%, 10/01/28 4,300 3,650 Kerr-McGee 5.875%, 09/15/06 2,775 3,033 5.375%, 04/15/05 1,530 1,613 43 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 INVESTMENT GRADE BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Masco (K) 5.875%, 07/15/12 $ 4,200 $ 4,691 Petroleos Mexicanos 9.250%, 03/30/18 4,300 5,203 Viacom (K) 5.625%, 05/01/07 4,500 5,028 Weyerhaeuser 7.950%, 03/15/25 3,850 4,778 -------- 81,074 -------- INSURANCE (2.6%) Allstate 7.875%, 05/01/05 12,000 13,350 MetLife 5.375%, 12/15/12 4,650 5,081 3.911%, 05/15/05 4,375 4,543 -------- 22,974 -------- INVESTMENT BANKERS/BROKER DEALERS (7.3%) Bear Stearns 3.000%, 03/30/06 9,100 9,363 Citigroup Global Markets Holdings 6.500%, 02/15/08 12,175 14,108 Goldman Sachs Group 4.125%, 01/15/08 9,000 9,446 Lehman Brothers Holdings 4.000%, 01/22/08 9,000 9,429 Merrill Lynch, Ser B, MTN 2.940%, 01/30/06 13,200 13,462 Morgan Stanley 5.300%, 03/01/13 8,900 9,495 -------- 65,303 -------- REAL ESTATE INVESTMENT TRUSTS (1.1%) EOP Operating LP 8.375%, 03/15/06 4,150 4,780 Simon Property Group 6.375%, 11/15/07 4,500 5,074 -------- 9,854 -------- RETAIL (0.5%) Nordstrom 8.950%, 10/15/05 3,850 4,401 -------- TELEPHONE & TELECOMMUNICATIONS (2.8%) Ameritech Capital Funding 6.450%, 01/15/18 8,000 9,466 AT&T Broadband 9.455%, 11/15/22 4,300 5,916 Verizon Global Funding 7.750%, 12/01/30 7,500 9,545 -------- 24,927 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- TRANSPORTATION (1.0%) Norfolk Southern 7.800%, 05/15/27 $ 3,725 $ 4,800 Union Pacific 5.750%, 10/15/07 4,100 4,585 -------- 9,385 -------- UTILITIES (2.9%) Alabama Power, Ser Q 5.500%, 10/15/17 3,850 4,319 Alabama Power, Ser X 3.125%, 05/01/08 3,195 3,253 Carolina Power & Light 6.500%, 07/15/12 4,000 4,707 Consolidated Edison 4.875%, 02/01/13 5,000 5,339 Dominion Resources, Ser B 7.625%, 07/15/05 4,100 4,563 Pacificorp 6.900%, 11/15/11 3,000 3,594 -------- 25,775 -------- Total Corporate Obligations (Cost $405,681) 433,574 -------- ASSET-BACKED OBLIGATIONS (6.2%) Bank One Issuance Trust, Ser 2002-A4, Cl A4 2.940%, 06/16/08 12,950 13,321 Capital Auto Receivables Asset Trust, Ser 2002-4, Cl A4 2.640%, 03/17/08 8,000 8,170 GE Capital, Ser 2002-1A, Cl A3 6.269%, 12/10/35 14,200 16,595 Harley-Davidson Motorcycle Trust, Ser 2002-2, Cl A2 3.090%, 06/15/10 6,000 6,186 JP Morgan Chase Commercial Mortgage Securities, Ser 2002-C3, Cl A2 4.994%, 07/12/35 10,500 11,289 -------- Total Asset-Backed Obligations (Cost $51,762) 55,561 -------- FOREIGN GOVERNMENT DEBT SECURITIES (3.2%) CANADA (2.6%) Province of Ontario 6.000%, 02/21/06 8,195 9,092 2.350%, 06/30/06 4,600 4,662 Quebec Province, Ser NN 7.125%, 02/09/24 7,600 9,776 -------- 23,530 -------- 44 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MEXICO (0.6%) United Mexican States 4.625%, 10/08/08 $ 4,725 $ 4,862 -------- Total Foreign Government Debt Securities (Cost $27,210) 28,392 -------- SHORT-TERM INVESTMENT (7.9%) Boston Global Investment Trust -- Enhanced Portfolio (L) 70,907,730 70,908 -------- Total Short-Term Investment (Cost $70,908) 70,908 -------- REPURCHASE AGREEMENT (6.4%) UBS Paine Webber 1.200%, dated 05/30/03, matures 06/02/03, repurchase price $57,208,700 (collateralized by U.S. Treasury STRIPS: total market value $58,348,839) (G) $57,203 57,203 -------- Total Repurchase Agreement (Cost $57,203) 57,203 -------- Total Investments (111.3%) (Cost $942,488) 994,853 -------- OTHER ASSETS AND LIABILITIES (-11.3%) Investment Advisory Fees Payable (547) Administration Fees Payable (52) Distribution Fees Payable (31) Transfer Agency Shareholder Servicing Fees Payable (2) Custodian Fees Payable (11) Payable upon Return of Securities Loaned (70,908) Payable for Investment Securities Purchased (60,630) Other Assets and Liabilities, Net 31,354 -------- Total Other Assets and Liabilities (100,827) -------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 75,052,849 outstanding shares of beneficial interest $801,270 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 3,187,289 outstanding shares of beneficial interest 34,351 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 3,452,297 outstanding shares of beneficial interest 36,707 Undistributed net investment income 5 Accumulated net realized loss on investments (30,672) Net unrealized appreciation on investments 52,365 -------- Total Net Assets (100.0%) $894,026 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($821,341,979 / 75,052,849 shares) $10.94 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($34,874,069 / 3,187,289 shares) $10.94 ======== Maximum Offering Price Per Share -- Investor Shares ($10.94 / 96.25%) $11.37 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($37,810,379 / 3,452,297 shares) $10.95 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 45 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 INVESTMENT GRADE TAX-EXEMPT BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (95.8%) ALABAMA (14.9%) Alabama State, Public School & College Authority, Capital Improvement Project, Ser C, RB Callable 07/01/09 @ 101 5.750%, 07/01/17 $3,950 $ 4,611 Alabama State, Water Pollution Control Authority, Revolving Fund Loan Project, RB, AMBAC Callable 08/15/09 @ 100 5.750%, 08/15/12 5,205 6,048 Auburn University, Ser A, RB, MBIA Callable 06/01/11 @ 100 6.000%, 06/01/16 4,060 4,882 Huntsville, Ser A, GO Callable 05/01/12 @ 102 5.750%, 05/01/19 2,800 3,280 5.625%, 05/01/16 2,375 2,804 Jefferson County, Sewer Authority, RB, FSA Callable 02/01/10 @ 100 5.250%, 02/01/11 2,500 2,847 5.250%, 02/01/12 5,000 5,662 5.250%, 02/01/16 5,000 5,606 -------- 35,740 -------- ARIZONA (8.0%) Arizona State, School Facilities, State School Improvements Project, RB 5.000%, 07/01/11 5,000 5,767 Arizona State, University & College Improvements Project, RB, FGIC Callable 07/01/12 @ 100 5.500%, 07/01/15 1,665 1,951 Arizona State, Water Infrastructure Financial Authority, Ser A, RB Callable 10/01/09 @ 101 5.625%, 10/01/12 3,280 3,825 Phoenix, GO 4.000%, 07/01/11 4,945 5,342 Pima County, University School District, GO, FSA 5.000%, 07/01/11 2,000 2,295 -------- 19,180 -------- CALIFORNIA (1.1%) Orange County, Loma Ridge/Data Center Project, COP, AMBAC Prerefunded @ 100 (F) 6.000%, 06/01/19 2,075 2,582 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- COLORADO (12.2%) Colorado State, Health Facilities Authority, North Colorado Medical Center Project, RB, MBIA (C) Callable 07/01/03 @ 100 1.160%, 05/15/20 $2,700 $ 2,700 Colorado State, Public Highway Authority, Ser C, RB, MBIA Callable 09/01/07 @ 101 5.000%, 09/01/11 4,250 4,730 Larimer County, School District No. R 1, FGIC, GO Callable 12/15/10 @ 100 6.000%, 12/15/15 3,000 3,590 6.000%, 12/15/16 3,000 3,579 6.000%, 12/15/17 4,000 4,772 Regional Transition District, State Sales Tax, Ser B, RB, AMBAC Callable 11/01/12 @ 100 5.500%, 11/01/17 2,655 3,073 Westminster, Sales & Use Tax, Ser A, RB Callable 12/01/07 @ 102 5.600%, 12/01/16 5,940 6,845 -------- 29,289 -------- FLORIDA (6.0%) Dade County, Water & Sewer System Authority, RB, FGIC Callable 10/01/03 @ 102 5.000%, 10/01/07 3,000 3,099 Florida State, Board Capital Outlay, Public Education Project, Ser C, GO Callable 06/01/05 @ 101 5.300%, 06/01/09 7,395 8,043 Palm Beach County, State School Board, Ser C, COP, FSA Callable 08/01/12 @ 100 5.500%, 08/01/15 2,825 3,318 -------- 14,460 -------- GEORGIA (2.3%) Metropolitan Atlanta, Rapid Transit Authority, State Sales Tax Project, Ser A, RB, MBIA Callable 07/01/06 @ 102 5.400%, 07/01/12 5,000 5,599 -------- ILLINOIS (2.6%) Chicago, School Finance Authority, Ser A, GO, FGIC Callable 07/07/03 @ 101.5 6.250%, 06/01/09 6,000 6,115 -------- 46 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- IOWA (1.0%) Des Moines, Public Parking System, Ser A, RB, FGIC Callable 06/01/10 @ 100 6.375%, 06/01/18 $2,005 $ 2,414 -------- KANSAS (3.3%) Wyandotte County, School District No. 500, GO, FSA Callable 09/01/12 @ 100 5.500%, 09/01/17 2,000 2,312 5.500%, 09/01/19 5,000 5,716 -------- 8,028 -------- MARYLAND (1.9%) Carroll County, County Commissioners Office, Consolidated Public Improvements Project, GO 5.000%, 11/01/09 2,000 2,283 Howard County, Consolidated Public Improvements Project, Ser A, GO 5.000%, 08/15/10 2,000 2,312 -------- 4,595 -------- MASSACHUSETTS (4.2%) Massachusetts State, Water Pollution Abatement, Treatment Pool Project, Ser 6, RB Callable 08/01/10 @ 101 5.625%, 08/01/16 2,500 2,910 5.625%, 08/01/17 6,250 7,259 -------- 10,169 -------- MICHIGAN (4.1%) Michigan State, Municipal Authority, RB Callable 10/01/07 @ 101 5.200%, 10/01/13 2,000 2,246 Michigan State, Ser D, RB, FSA (C) Callable 07/02/03 @ 100 1.100%, 09/15/09 7,500 7,500 -------- 9,746 -------- MISSISSIPPI (1.1%) Jackson, Public School District, Ser B, GO, AMBAC Callable 10/01/10 @ 100 5.750%, 10/01/15 2,275 2,666 -------- MISSOURI (4.3%) Missouri State, Highways & Transportation Commission, Ser A, RB Callable 02/01/11 @ 100 5.625%, 02/01/18 8,885 10,250 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- NEVADA (0.8%) Henderson, Building Authority, Ser B, GO, AMBAC Callable 07/07/03 @ 100 4.750%, 06/01/06 $2,000 $ 2,006 -------- NEW YORK (0.5%) Buffalo, School District, Ser D, GO, FGIC Callable 12/15/11 @ 100 5.500%, 12/15/14 1,075 1,252 -------- OHIO (5.7%) Cleveland, Income Tax Revenue Authority, RB, AMBAC (C) Callable 06/04/03 @ 100 1.160%, 05/15/24 2,900 2,900 Ohio State, Building Authority, Workers Comp Facilities Project, Ser A, RB, FGIC 5.000%, 04/01/11 6,135 7,011 Ohio State, Water Development Authority, Fresh Water Improvements Project, RB Callable 06/01/12 @ 100 5.375%, 12/01/17 1,900 2,171 Ohio State, Water Development Authority, Fresh Water Project, RB, AMBAC, ETM Callable 06/01/05 @ 102 5.700%, 06/01/08 1,520 1,675 -------- 13,757 -------- OKLAHOMA (3.3%) Oklahoma State, Ser A, GO, FGIC 5.000%, 07/15/11 3,000 3,469 Oklahoma State, Ser A, GO, FGIC Callable 07/15/13 @ 101 5.000%, 07/15/18 4,000 4,500 -------- 7,969 -------- OREGON (4.6%) Oregon State, Department of Administrative Services, Lottery Authority, Ser A, RB, FSA Callable 10/01/13 @ 100 5.000%, 04/01/17 2,000 2,226 Oregon State, Department of Transportation, Highway Usertax Authority, Ser A, RB Callable 11/15/12 @ 100 5.500%, 11/15/17 7,500 8,692 -------- 10,918 -------- 47 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 INVESTMENT GRADE TAX-EXEMPT BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- SOUTH CAROLINA (1.4%) South Carolina State, Clemson University, RB, AMBAC Callable 05/01/09 @ 101 6.250%, 05/01/15 $2,725 $ 3,241 -------- TEXAS (0.7%) Irving, Waterworks & Sewer Authority, RB Callable 06/15/09 @ 100.5 5.950%, 06/15/19 1,460 1,695 -------- VIRGINIA (2.1%) Virginia State, Peninsula Port Authority, Dominion Term Project, Ser C, RB (LOC: Citibank N.A.) 1.270%, 07/01/16 5,000 5,000 -------- WASHINGTON (2.1%) Washington State, Ser VR 96A, GO (C) Callable 07/02/03 @ 100 1.110%, 06/01/20 5,000 5,000 -------- PUERTO RICO (7.6%) Puerto Rico Commonwealth, Government Development Authority, RB, MBIA (C) Callable 07/01/03 @ 100 1.050%, 12/01/15 7,000 7,000 Puerto Rico Commonwealth, Highway & Transportation Authority, Ser AA, RB, FSA Mandatory Put 07/01/10 @ 100 5.000%, 07/01/26 5,750 6,497 Puerto Rico Commonwealth, Municipal Finance Agency, Ser A, RB, FSA Callable 08/01/12 @ 100 5.250%, 08/01/14 4,000 4,663 -------- 18,160 -------- Total Municipal Bonds (Cost $219,357) 229,831 -------- CASH EQUIVALENTS (9.9%) Federated Tax Free Reserve Fund 12,060,579 12,061 SEI Institutional Tax Free Fund 11,723,574 11,724 -------- Total Cash Equivalents (Cost $23,785) 23,785 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.6%) UBS Paine Webber 1.200%, dated 05/30/03, matures 06/02/03, repurchase price $1,538,162 (collateralized by U.S. Treasury obligations: total market value $1,570,722) (G) $1,538 $ 1,538 -------- Total Repurchase Agreement (Cost $1,538) 1,538 -------- Total Investments (106.3%) (Cost $244,680) 255,154 -------- OTHER ASSETS AND LIABILITIES (-6.3%) Investment Advisory Fees Payable (143) Administration Fees Payable (14) Distribution Fees Payable (28) Transfer Agency Shareholder Servicing Fees Payable (1) Custodian Fees Payable (2) Payable for Investment Securities Purchased (18,930) Other Assets and Liabilities, Net 3,889 -------- TOTAL OTHER ASSETS AND LIABILITIES (15,229) -------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 15,437,788 outstanding shares of beneficial interest 174,420 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 1,809,148 outstanding shares of beneficial interest 19,128 Paid in Capital-- Flex Shares (unlimited authorization -- no par value) based on 2,721,311 outstanding shares of beneficial interest 31,256 Undistributed net investment income 2 Accumulated net realized gain on investments 4,645 Net unrealized appreciation on investments 10,474 -------- Total Net Assets (100.0%) $239,925 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($185,484,923 / 15,437,788 shares) $12.01 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($21,755,855 / 1,809,148 shares) $12.03 ======== Maximum Offering Price Per Share -- Investor Shares ($12.03 / 96.25%) $12.50 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($32,683,917 / 2,721,311 shares) $12.01 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 48 - -------------------------------------------------------------------------------- LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (11.1%) U.S. Treasury Notes 5.875%, 11/15/05 (K) $ 5,000 $ 5,533 4.375%, 05/15/07 to 08/15/12 (K) 15,000 16,323 4.000%, 11/15/12 (K) 32,000 33,776 -------- Total U.S. Treasury Obligations (Cost $52,851) 55,632 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (23.5%) FHLB 5.125%, 03/06/06 30,000 32,754 FHLMC 4.500%, 01/15/13 (K) 20,000 21,337 FNMA 6.625%, 10/15/07 15,000 17,682 5.500%, 02/15/06 25,000 27,514 5.250%, 08/01/12 1,970 2,168 4.375%, 03/15/13 (K) 15,000 15,821 -------- Total U.S. Government Agency Obligations (Cost $113,305) 117,276 -------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (54.2%) FHLMC 6.875%, 09/15/10 25,000 30,990 6.500%, 02/01/17 8,480 8,869 4.500%, 06/01/18 25,000 25,633 FNMA 8.500%, 04/01/17 137 150 7.000%, 11/01/16 to 05/01/32 35,620 37,570 6.500%, 06/01/13 to 12/01/32 26,436 27,601 6.000%, 09/01/13 to 09/01/32 80,540 83,822 5.000%, 06/01/33 9,985 10,244 GNMA 9.000%, 11/15/17 217 241 8.500%, 04/15/31 1,650 1,783 8.000%, 06/15/30 to 09/15/31 18,728 20,248 7.000%, 07/15/31 to 09/15/31 7,179 7,566 6.500%, 11/15/31 9,114 9,556 6.000%, 12/15/31 6,804 7,129 -------- Total U.S. Agency Mortgage-Backed Obligations (Cost $265,631) 271,402 -------- CASH EQUIVALENT (0.0%) SEI Liquid Asset Trust Prime Obligation Fund 3,950 4 -------- Total Cash Equivalent (Cost $4) 4 -------- SHORT-TERM INVESTMENT (15.4%) Boston Global Investment Trust -- Enhanced Portfolio (L) 76,913,250 76,913 -------- Total Short-Term Investment (Cost $76,913) 76,913 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (17.8%) Morgan Stanley 1.290%, dated 05/30/03, matures 06/02/03, repurchase price $89,273,121 (collateralized by FNMA & FHLMC obligations: total market valuE $91,053,170) (G) $89,264 $ 89,264 -------- Total Repurchase Agreement (Cost $89,264) 89,264 -------- Total Investments (122.0%) (Cost $597,968) 610,491 -------- OTHER ASSETS AND LIABILITIES (-22.0%) Investment Advisory Fees Payable (244) Administration Fees Payable (28) Distribution Fees Payable (74) Transfer Agency Shareholder Servicing Fees Payable (1) Custodian Fees Payable (5) Payable upon Return of Securities Loaned (76,913) Payable for Investment Securities Purchased (35,856) Other Assets and Liabilities, Net 3,227 -------- Total Other Assets and Liabilities (109,894) -------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 30,298,463 outstanding shares of beneficial interest 312,256 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 1,293,139 outstanding shares of beneficial interest 13,510 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 15,695,021 outstanding shares of beneficial interest 163,981 Undistributed net investment income 1 Accumulated net realized loss on investments (1,674) Net unrealized appreciation on investments 12,523 -------- Total Net Assets (100.0%) $500,597 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($320,717,508 / 30,298,463 shares) $10.59 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($13,668,113 / 1,293,139 shares) $10.57 ======== Maximum Offering Price Per Share -- Investor Shares ($10.57 / 97.50%) $10.84 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($166,211,068 / 15,695,021 shares) $10.59 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 49 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 MARYLAND MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (97.5%) MARYLAND (89.4%) Annapolis, Public Improvements, GO 5.000%, 04/01/08 $1,395 $ 1,581 Anne Arundel County, GO 6.000%, 02/01/07 1,000 1,150 Baltimore County, Pension Funding, GO 4.500%, 06/01/09 1,000 1,124 Baltimore, GO, MBIA 7.000%, 10/15/10 1,365 1,754 Baltimore, Pollution Control, General Motors Project, RB 5.350%, 04/01/08 1,160 1,327 Baltimore, Ser A, RB, FGIC 5.900%, 07/01/10 1,000 1,200 5.900%, 07/01/13 900 1,115 Calvert County, GO 5.000%, 07/15/08 1,000 1,141 Frederick County, GO Callable 07/01/09 @ 101 5.250%, 07/01/11 1,000 1,148 Howard County, Ser A, GO Callable 02/15/12 @ 100 5.250%, 08/15/13 1,180 1,375 Howard County, Ser A, GO Callable 02/15/12 @ 100 5.250%, 08/15/14 1,000 1,159 Maryland State, Community Development Administration, RB, FHA 4.100%, 07/01/08 285 304 Maryland State, Community Development Administration, Ser C, RB, FHA Callable 03/01/10 @ 100 5.650%, 09/01/12 475 529 Maryland State, Community Development Administration, Ser E, RB, FHA Callable 09/01/09 @ 100 5.700%, 09/01/17 900 976 Maryland State, Community Development Administration, Ser F, RB, AMT Callable 09/01/09 @ 100 5.900%, 09/01/19 1,000 1,084 Maryland State, Community Development Administration, Single Family Program, Second Ser, RB 4.700%, 04/01/11 1,000 1,079 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Maryland State, Community Development Administration, Single-Family Housing, First Ser, RB, FHA Callable 04/01/07 @ 101.5 5.600%, 04/01/18 $ 305 $ 325 Maryland State, Department of Transportation County Authority, RB 5.500%, 02/01/13 975 1,172 Maryland State, Economic Development Corporation, Department of Transportation Headquarters Project, RB Callable 06/01/12 @ 100.5 5.375%, 06/01/19 1,000 1,128 Maryland State, Economic Development Corporation, Frostburg State University Project, Ser A, RB Callable 10/01/12 @ 101 5.500%, 10/01/15 250 264 Maryland State, Economic Development Corporation, Student Housing, University of Maryland, Ser A, RB Callable 10/01/13 @ 100 5.625%, 10/01/23 500 522 Maryland State, Economic Development Corporation, University Village at Sheppard Pratt Project, RB, ACA Callable 07/01/11 @ 101 5.875%, 07/01/21 250 275 Maryland State, First Ser, GO Callable 03/01/08 @ 101 5.000%, 03/01/10 1,000 1,133 4.750%, 03/01/09 500 560 Maryland State, Health & Higher Educational Facilities Authority, Board of Child Care Project, RB 4.500%, 07/01/09 725 799 Maryland State, Health & Higher Educational Facilities Authority, Board of Child Care Project, RB Callable 07/01/12 @ 100 5.500%, 07/01/13 1,000 1,160 Maryland State, Health & Higher Educational Facilities Authority, Carroll County General Hospital, RB (H) 4.400%, 07/01/09 910 972 50 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Maryland State, Health & Higher Educational Facilities Authority, Carroll County General Hospital, RB Callable 07/01/12 @ 100 6.000%, 07/01/18 $1,035 $ 1,159 6.000%, 07/01/21 250 275 Maryland State, Health & Higher Educational Facilities Authority, Catholic Health Initiatives, Ser A, RB Callable 06/01/10 @ 101 6.000%, 12/01/24 250 283 Maryland State, Health & Higher Educational Facilities Authority, Hebrew Home of Greater Washington, RB Callable 01/01/12 @ 100 5.700%, 01/01/21 480 513 5.700%, 01/01/22 510 543 Maryland State, Health & Higher Educational Facilities Authority, Johns Hopkins Hospital Project, RB 5.000%, 05/15/09 700 787 Maryland State, Health & Higher Educational Facilities Authority, Mercy Medical Center Project, RB Callable 07/01/11 @ 100 5.625%, 07/01/31 1,000 1,035 Maryland State, Health & Higher Educational Facilities Authority, North Arundel Hospital Project, RB Callable 07/01/10 @ 101 6.500%, 07/01/26 400 441 Maryland State, Health & Higher Educational Facilities Authority, Sheppard Pratt, Ser A, RB 5.000%, 07/01/07 300 331 Maryland State, Health & Higher Educational Facilities Authority, Union Hospital of Cecil County Project, RB Callable 07/01/12 @ 100 5.750%, 07/01/20 500 552 Maryland State, Health & Higher Educational Facilities Authority, University of Maryland Medical Project, RB 6.000%, 07/01/05 100 109 5.000%, 07/01/09 1,020 1,141 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Maryland State, Health & Higher Educational Facilities Authority, University of Maryland Medical Project, RB Callable 07/01/11 @ 100 5.750%, 07/01/21 $1,725 $ 1,886 Maryland State, Individual Development Financing Authority, Baltimore Aquarium Project, Ser B, RB Callable 11/01/12 @ 100 5.500%, 11/01/17 500 567 Maryland State, Second Ser, GO Callable 07/15/09 @ 101 5.250%, 07/15/12 1,000 1,149 Maryland State, Ser 2, GO 5.500%, 07/15/13 1,150 1,395 Maryland State, Ser A, GO 5.500%, 08/01/14 1,000 1,217 Maryland State, Stadium Authority, Sports Facility Project, RB, AMBAC Callable 03/01/06 @ 101 5.800%, 03/01/26 250 277 Maryland State, Third Ser, GO 5.000%, 10/15/06 750 839 Maryland State, Transportation Authority, Baltimore/Washington International Airport, Ser B, RB, AMBAC Callable 03/01/12 @ 101 5.375%, 03/01/15 1,000 1,119 Maryland State, Transportation Authority, RB, ETM Callable 07/07/03 @ 100 6.800%, 07/01/16 120 150 Montgomery County, Housing Opportunity, Aston Woods Apartments Project, Ser A, RB Callable 05/15/08 @ 102 4.900%, 05/15/31 600 649 Montgomery County, Housing Opportunity, Housing Development Project, RB Callable 07/01/10 @ 100 6.000%, 07/01/20 990 1,087 Montgomery County, Housing Opportunity, Single-Family Mortgage, Ser A, RB Callable 01/01/11 @ 100 4.450%, 07/01/17 425 454 51 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 MARYLAND MUNICIPAL BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Montgomery County, Ser A, GO 5.800%, 07/01/07 $ 500 $ 579 5.700%, 07/01/05 675 739 Montgomery County, Solid Waste Systems Authority, Disposal Project, Ser A, RB, AMBAC 5.000%, 06/01/09 625 710 Montgomery County, Trinity Healthcare Group, RB Callable 12/01/11 @ 100 5.500%, 12/01/16 1,000 1,129 Northeast Maryland, Waste Disposal Authority, Resources Recreation Project, Ser A, RB 6.000%, 07/01/06 1,000 1,104 Queen Annes County, GO, FGIC 5.125%, 11/15/06 350 393 St. Mary's County, GO 5.500%, 07/01/11 1,165 1,390 Talbot County, GO Callable 03/15/12 @ 101 5.375%, 03/15/17 1,455 1,671 University of Maryland, Ser A, RB 5.000%, 04/01/05 400 428 Washington, GO Callable 06/01/04 @ 102 4.625%, 06/01/06 750 789 Westminster, Educational Facilities Authority, McDaniel College, RB 4.000%, 04/01/09 435 453 ------- 53,699 ------- PUERTO RICO (8.1%) Puerto Rico Commonwealth, GO, MBIA 5.650%, 07/01/15 1,500 1,834 Puerto Rico Commonwealth, Housing Bank & Finance Agency, Affordable Housing Mortgage Portfolio, Ser I, RB, AMT, GNMA Callable 04/01/05 @ 102 6.250%, 04/01/29 625 653 Puerto Rico Commonwealth, Ser A, GO, MBIA Callable 08/01/11 @ 100 5.500%, 08/01/20 500 574 Puerto Rico Commonwealth, Ser A, GO 5.500%, 07/01/17 500 602 - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- Puerto Rico Commonwealth, Ser A, GO, FGIC 5.500%, 07/01/15 $ 500 $ 604 Puerto Rico Commonwealth, Ser C, GO, MBIA Mandatory Put 07/01/08 @ 100 5.000%, 07/01/28 500 567 ------- 4,834 ------- Total Municipal Bonds (Cost $54,592) 58,533 ------- CASH EQUIVALENT (1.2%) Federated Tax-Free Obligation Fund 743,910 744 ------- Total Cash Equivalent (Cost $744) 744 ------- Total Investments (98.7%) (Cost $55,336) 59,277 ------- OTHER ASSETS AND LIABILITIES (1.3%) Investment Advisory Fees Payable (29) Administration Fees Payable (4) Distribution Fees Payable (23) Other Assets and Liabilities, Net 836 ------- Total Other Assets and Liabilities 780 ------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 2,787,930 outstanding shares of beneficial interest 27,634 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 2,695,894 outstanding shares of beneficial interest 27,761 Distribution in excess of net investment income (20) Accumulated net realized gain on investments 741 Net unrealized appreciation on investments 3,941 ------- Total Net Assets (100.0%) $60,057 ======= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($30,501,537 / 2,787,930 shares) $10.94 ======= Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($29,555,579 / 2,695,894 shares) $10.96 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 52 - -------------------------------------------------------------------------------- SHORT-TERM BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (8.0%) U.S. Treasury Notes 5.875%, 11/15/04 (K) $ 5,000 $ 5,336 5.750%, 11/15/05 3,250 3,587 5.250%, 05/15/04 5,000 5,194 3.000%, 02/29/04 10,000 10,139 2.250%, 07/31/04 3,000 3,038 -------- Total U.S. Treasury Obligations (Cost $26,943) 27,294 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (22.3%) FHLB 3.875%, 12/15/04 5,000 5,194 FHLB, Ser 273 5.625%, 05/14/04 5,000 5,209 FHLMC 5.000%, 05/15/11 4,635 4,768 4.250%, 06/15/05 6,750 7,128 3.875%, 06/27/05 5,000 5,009 3.000%, 07/15/04 6,750 6,886 FHLMC, Ser 2558, Cl BA 2.250%, 07/06/05 3,500 3,522 FHLMC, Ser 322 (K) 3.250%, 08/15/05 7,500 7,784 FNMA 4.500%, 10/17/06 5,000 5,056 4.000%, 11/25/16 4,250 4,329 3.500%, 09/15/04 8,500 8,748 1.875%, 12/15/04 7,000 7,064 FNMA, Ser 9, Cl UA 5.500%, 07/15/06 4,750 5,279 -------- Total U.S. Government Agency Obligations (Cost $75,243) 75,976 -------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (1.2%) FHLMC 6.000%, 07/01/06 1,734 1,798 FNMA 7.000%, 01/01/27 393 415 FNMA, REMIC, Ser 2002-27, Cl QA 5.250%, 04/25/10 1,324 1,324 GNMA 8.000%, 11/15/09 413 446 -------- Total U.S. Agency Mortgage-Backed Obligations (Cost $3,855) 3,983 -------- CORPORATE OBLIGATIONS (53.3%) AEROSPACE & DEFENSE (1.7%) Boeing Capital (K) 5.650%, 05/15/06 3,300 3,568 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- General Dynamics 2.125%, 05/15/06 $ 1,740 $ 1,749 Raytheon 5.700%, 11/01/03 500 506 -------- 5,823 -------- AIR TRANSPORTATION (0.6%) FedEx 6.625%, 02/12/04 2,150 2,224 -------- AUTOMOTIVE (0.7%) DaimlerChrysler (K) 7.750%, 06/15/05 2,250 2,481 -------- BANKING (3.7%) Bank of America 6.500%, 03/15/06 1,180 1,317 KFW International Finance, Ser DTC 4.750%, 01/24/07 3,000 3,271 Wachovia 6.800%, 06/01/05 3,500 3,841 Wells Fargo 6.625%, 07/15/04 4,025 4,257 -------- 12,686 -------- CABLE (0.5%) TCI Communications 8.650%, 09/15/04 1,460 1,569 -------- FINANCE (13.8%) Bank of America 6.625%, 06/15/04 4,925 5,202 Bank One, Ser A, MTN 5.625%, 02/17/04 4,000 4,122 CIT Group 4.125%, 02/21/06 3,555 3,685 Citigroup 5.700%, 02/06/04 4,000 4,119 EOP Operating LP 8.375%, 03/15/06 1,505 1,733 First American Bank 7.750%, 07/15/04 5,000 5,314 Ford Motor Credit 7.500%, 03/15/05 1,675 1,770 6.875%, 02/01/06 1,700 1,788 General Electric Capital, Ser A, MTN 2.850%, 01/30/06 4,850 4,963 General Motors Acceptance (K) 6.750%, 01/15/06 825 881 53 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 SHORT-TERM BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- General Motors Acceptance, MTN 6.380%, 01/30/04 $ 1,675 $ 1,723 Household Finance 6.000%, 05/01/04 5,000 5,213 International Lease Finance (K) 5.750%, 10/15/06 1,974 2,139 National Rural Utilities 3.000%, 02/15/06 4,160 4,280 -------- 46,932 -------- FOOD, BEVERAGE & TOBACCO (0.6%) Conagra Foods 7.500%, 09/15/05 1,690 1,887 -------- INDUSTRIAL (9.2%) Alcoa 4.250%, 08/15/07 2,150 2,289 Anadarko Petroleum 3.250%, 05/01/08 1,835 1,838 Coca Cola Enterprises 6.625%, 08/01/04 4,000 4,233 Computer Associates International, Ser B 6.375%, 04/15/05 1,550 1,635 Diageo Capital PLC 3.375%, 03/20/08 1,000 1,028 IBM 6.000%, 11/30/04 3,500 3,716 Ingersoll-Rand 5.800%, 06/01/04 1,900 1,983 Kellogg 6.625%, 01/29/04 3,000 3,093 Kerr-McGee 5.375%, 04/15/05 1,775 1,871 Kroger 7.375%, 03/01/05 1,575 1,703 Masco (K) 6.750%, 03/15/06 1,600 1,786 Phillips Petroleum 8.500%, 05/25/05 3,500 3,958 Weyerhaeuser 6.125%, 03/15/07 2,000 2,217 -------- 31,350 -------- INSURANCE (2.4%) Allstate 7.875%, 05/01/05 4,300 4,784 MetLife 3.911%, 05/15/05 2,250 2,336 Safeco 4.200%, 02/01/08 1,110 1,153 -------- 8,273 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- INVESTMENT BANKERS/BROKER DEALERS (8.6%) Bear Stearns 3.000%, 03/30/06 $ 3,650 $ 3,755 Credit Suisse First Boston (K) 5.875%, 08/01/06 3,250 3,590 Goldman Sachs Group 7.625%, 08/17/05 3,500 3,959 Lehman Brothers Holdings 7.750%, 01/15/05 4,000 4,390 Merrill Lynch, Ser B, MTN 2.940%, 01/30/06 4,635 4,727 Morgan Stanley Dean Witter 7.750%, 06/15/05 3,875 4,333 Paine Webber Group 6.375%, 05/15/04 4,300 4,506 -------- 29,260 -------- MEDICAL PRODUCTS (1.5%) Cardinal Health 6.500%, 02/15/04 5,000 5,181 -------- RETAIL (0.5%) Nordstrom 8.950%, 10/15/05 1,600 1,829 -------- SERVICES (1.7%) Electronic Data Systems (K) 6.850%, 10/15/04 1,500 1,560 Viacom 7.750%, 06/01/05 2,500 2,794 7.150%, 05/20/05 1,350 1,487 -------- 5,841 -------- TELEPHONE & TELECOMMUNICATIONS (3.7%) AT&T Wireless 7.500%, 05/01/07 2,000 2,296 British Telecom PLC 7.875%, 12/15/05 4,000 4,550 Verizon Wireless (K) 5.375%, 12/15/06 2,000 2,189 Vodafone Group PLC (B) 7.625%, 02/15/05 3,125 3,434 -------- 12,469 -------- TRANSPORTATION (1.5%) Union Pacific 5.840%, 05/25/04 5,000 5,188 -------- UTILITIES (2.6%) Alabama Power, Ser X 3.125%, 05/01/08 815 830 Dominion Resources, Ser B 7.625%, 07/15/05 1,500 1,669 Scottish Power PLC, Ser H, MTN 6.750%, 07/15/04 2,500 2,635 54 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- Southern New England Telephone, Ser C, MTN 6.125%, 12/15/03 $ 3,500 $ 3,592 -------- 8,726 -------- Total Corporate Obligations (Cost $175,491) 181,719 -------- ASSET-BACKED OBLIGATIONS (7.0%) Bank One Issuance Trust, Ser 2002-A4, Cl A4 2.940%, 06/16/08 4,500 4,629 Capital Auto Receivables Asset Trust, Ser 2002-3, Cl A3 3.580%, 10/16/06 4,500 4,688 Capital Auto Receivables Asset Trust, Ser 2002-4, Cl A4 2.640%, 03/17/08 2,000 2,042 Conseco Finance Home Equity Trust, Ser 2001-C, Cl A3 5.390%, 11/15/25 2,649 2,678 CoreStates Home Equity Trust, Ser 1994-1, Cl A 6.650%, 05/15/09 30 30 Equivantage Home Equity Loan Trust, Ser 1996-1, Cl A 7.300%, 10/25/25 169 169 Ford Credit Auto Owner Trust, Ser 2002-A, Cl A3A 3.620%, 01/15/06 3,000 3,043 Honda Auto Receivables Owner Trust, Ser 2002-1, Cl A3 3.500%, 10/17/05 5,000 5,064 Honda Auto Receivables Owner Trust, Ser 2002-3, Cl A4 3.610%, 12/18/07 1,500 1,565 -------- Total Asset-Backed Obligations (Cost $23,345) 23,908 -------- FOREIGN GOVERNMENT DEBT SECURITIES (2.0%) Province of Ontario 7.000%, 08/04/05 4,000 4,460 Quebec Province 5.500%, 04/11/06 2,000 2,187 -------- Total Foreign Government Debt Securities (Cost $6,141) 6,647 -------- SHORT-TERM INVESTMENT (6.8%) Boston Global Investment Trust -- Enhanced Portfolio (L) 23,290,065 23,290 -------- Total Short-Term Investment (Cost $23,290) 23,290 -------- - -------------------------------------------------------------------------------- SHARES VALUE (000) - -------------------------------------------------------------------------------- CASH EQUIVALENTS (5.4%) Federated Prime Obligation Money Market Fund 16,345,486 $ 16,345 SEI Daily Income Trust Prime Obligation Fund 2,163,917 2,164 -------- Total Cash Equivalents (Cost $18,509) 18,509 -------- Total Investments (106.0%) (Cost $352,817) 361,326 -------- OTHER ASSETS AND LIABILITIES (-6.0%) Investment Advisory Fees Payable (172) Administration Fees Payable (20) Distribution Fees Payable (11) Transfer Agency Shareholder Servicing Fees Payable (2) Custodian Fees Payable (4) Payable upon Return of Securities Loaned (23,290) Other Assets and Liabilities, Net 3,174 -------- Total Other Assets and Liabilities (20,325) -------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 30,144,405 outstanding shares of beneficial interest 305,542 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 564,733 outstanding shares of beneficial interest 5,720 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 3,240,245 outstanding shares of beneficial interest 32,647 Undistributed net investment income 3 Accumulated net realized loss on investments (11,420) Net unrealized appreciation on investments 8,509 -------- Total Net Assets (100.0%) $341,001 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($302,707,947 / 30,144,405 shares) $10.04 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($5,685,200 / 564,733 shares) $10.07 ======== Maximum Offering Price Per Share -- Investor Shares ($10.07 / 98.00%) $10.28 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($32,607,850 / 3,240,245 shares) $10.06 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 55 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 SHORT-TERM U.S. TREASURY SECURITIES FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000)/ SHARES VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (97.5%) U.S. Treasury Bills (D) 1.028%, 08/14/03 $ 5,000 $ 4,989 1.015%, 11/06/03 25,000 24,882 U.S. Treasury Notes 3.000%, 11/30/03 6,500 6,561 3.000%, 01/31/04 37,000 37,458 3.000%, 02/29/04 16,500 16,729 3.625%, 03/31/04 10,500 10,719 3.375%, 04/30/04 7,500 7,653 3.250%, 05/31/04 9,000 9,188 6.000%, 08/15/04 4,000 4,231 5.875%, 11/15/04 10,000 10,671 2.000%, 11/30/04 10,000 10,118 7.500%, 02/15/05 5,000 5,528 6.500%, 08/15/05 25,000 27,795 5.875%, 11/15/05 13,000 14,386 5.750%, 11/15/05 15,000 16,556 5.625%, 02/15/06 10,000 11,097 2.000%, 05/15/06 17,000 17,213 U.S. Treasury STRIPS (D) 3.662%, 11/15/04 23,000 22,607 -------- Total U.S. Treasury Obligations (Cost $254,807) 258,381 -------- CASH EQUIVALENT (1.8%) Federated U.S. Treasury Cash Reserves Fund 4,785,322 4,785 -------- Total Cash Equivalent (Cost $4,785) 4,785 -------- Total Investments (99.3%) (Cost $259,592) 263,166 -------- OTHER ASSETS AND LIABILITIES (0.7%) Investment Advisory Fees Payable (134) Administration Fees Payable (16) Distribution Fees Payable (40) Transfer Agency Shareholder Servicing Fees Payable (1) Custodian Fees Payable (2) Other Assets and Liabilities, Net 1,959 -------- Total Other Assets and Liabilities 1,766 -------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 11,740,657 outstanding shares of beneficial interest $117,675 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 1,503,136 outstanding shares of beneficial interest 15,440 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 12,358,304 outstanding shares of beneficial interest 126,040 Accumulated net realized gain on investments 2,203 Net unrealized appreciation on investments 3,574 -------- Total Net Assets (100.0%) $264,932 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($121,617,490 / 11,740,657 shares) $10.36 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($15,558,350 / 1,503,136 shares) $10.35 ======== Maximum Offering Price Per Share -- Investor Shares ($10.35 / 99.00%) $10.45 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($127,756,477 / 12,358,304 shares) $10.34 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 56 - -------------------------------------------------------------------------------- STRATEGIC INCOME FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (9.4%) U.S. Treasury Notes 5.375%, 02/15/31 $ 4,000 $ 4,647 5.250%, 11/15/28 to 02/15/29 10,000 11,195 4.000%, 11/15/12 2,000 2,111 -------- Total U.S. Treasury Obligations (Cost $17,556) 17,953 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (2.2%) FHLMC 4.500%, 01/15/13 2,000 2,134 FNMA 4.375%, 03/15/13 2,000 2,109 -------- Total U.S. Government Agency Obligations (Cost $3,997) 4,243 -------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (23.2%) FHLMC REMIC, Ser 1623, Cl PG 3.000%, 07/15/21 885 890 FHLMC REMIC, Ser 2568, Cl KA 4.250%, 12/15/21 1,482 1,518 FNMA 7.000%, 11/01/31 to 01/01/32 1,585 1,670 6.500%, 04/01/31 to 05/01/32 5,838 6,085 6.000%, 09/01/32 to 03/01/33 5,771 5,997 5.936%, 11/01/11 984 1,133 5.500%, 05/01/17 to 12/01/32 10,539 10,946 5.000%, 06/01/29 4,993 5,122 4.500%, 06/18/18 4,978 5,103 3.252%, 06/01/33 3,434 3,539 FNMA REMIC, Ser 2002-22, Cl PE 6.500%, 11/25/30 1,000 1,051 GNMA 6.000%, 12/15/31 1,415 1,482 -------- Total U.S. Government Mortgage-Backed Obligations (Cost $43,666) 44,536 -------- CORPORATE OBLIGATIONS (46.7%) AEROSPACE & DEFENSE (1.1%) L-3 Communications (B) Callable 07/15/08 @ 103.063 6.125%, 07/15/13 1,000 995 Sequa 9.000%, 08/01/09 1,000 1,050 -------- 2,045 -------- AUTOPARTS (1.7%) Cummins (B) 9.500%, 12/01/10 500 539 Dana 6.500%, 03/15/08 1,000 970 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Metaldyne Callable 06/15/07 @ 105.5 11.000%, 06/15/12 $ 1,000 $ 770 TRW Automotive (B) 9.375%, 02/15/13 1,000 1,042 -------- 3,321 -------- BROADCASTING (2.5%) Albritton Communications Callable 12/15/07 @ 103.88 7.750%, 12/15/12 1,000 1,027 Corus Entertainment Callable 03/01/07 @ 104.375 8.750%, 03/01/12 500 530 Entravision Communications Callable 03/15/06 @ 104.063 8.125%, 03/15/09 500 518 Grupo Televisa 8.500%, 03/11/32 750 806 Paxson Communications (A) Callable 01/15/06 @ 106.12 7.513%, 01/15/09 1,000 815 Spanish Broadcasting Callable 11/01/04 @ 104.813 9.625%, 11/01/09 1,000 1,045 -------- 4,741 -------- BUILDING & CONSTRUCTION (2.2%) K. Hovnanian Enterprises (K) Callable 04/01/07 @ 104.438 8.875%, 04/01/12 1,000 1,060 Standard Pacific 9.250%, 04/15/12 1,000 1,075 WCI Communities Callable 02/15/06 @ 105.313 10.625%, 02/15/11 500 540 WCI Communities Callable 05/01/07 @ 104.56 9.125%, 05/01/12 500 518 William Lyon Homes 10.750%, 04/01/13 1,000 1,035 -------- 4,228 -------- CABLE (3.1%) Adelphia Communications (J) 10.875%, 10/01/10 750 416 British Sky Broadcasting 7.300%, 10/15/06 500 551 Charter Communications Holdings 10.750%, 10/01/09 750 548 Continental Cablevision 8.300%, 05/15/06 1,000 1,144 Echostar DBS Callable 01/15/06 @ 104.563 9.125%, 01/15/09 500 555 57 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 STRATEGIC INCOME FUND--CONTINUED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Echostar DBS Callable 10/01/04 @ 105.188 10.375%, 10/01/07 $ 600 $ 662 Insight Midwest LP Callable 10/01/04 @ 104.875 9.750%, 10/01/09 1,000 1,045 Mediacom LLC (K) Callable 01/15/06 @ 104.75 9.500%, 01/15/13 750 788 Mediacom LLC, Ser B (K) Callable 04/15/03 @ 104.25 8.500%, 04/15/08 250 252 -------- 5,961 -------- CHEMICALS (2.0%) Compass Minerals Group Callable 08/15/06 @ 105 10.000%, 08/15/11 500 552 Equistar Chemical (B) Callable 05/01/07 @ 105.313 10.625%, 05/01/11 1,000 1,015 HMP Equity Holdings (A) (B) 15.592%, 05/15/08 1,000 475 IMC Global (B) 11.250%, 06/01/11 500 555 IMC Global, Ser B Callable 06/01/06 @ 105.63 11.250%, 06/01/11 500 555 Methanex 8.750%, 08/15/12 250 278 OM Group Callable 12/15/06 @ 104.625 9.250%, 12/15/11 500 435 -------- 3,865 -------- CONSUMER PRODUCTS (1.8%) American Achievement, Ser B Callable 01/01/05 @ 105.813 11.625%, 01/01/07 750 811 Chattem, Ser B Callable 04/01/04 @ 102.958 8.875%, 04/01/08 1,000 1,030 Hasbro 6.600%, 07/15/28 750 731 Levi Strauss (K) Callable 01/15/05 @ 105.813 11.625%, 01/15/08 1,000 855 -------- 3,427 -------- ENERGY (3.1%) Chesapeake Energy 9.000%, 08/15/12 1,000 1,095 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Denbury Resources (B) Callable 04/01/08 @ 103.75 7.500%, 04/01/13 $ 500 $ 512 Magnum Hunter Callable 06/01/03 @ 105 10.000%, 06/01/07 500 515 Peabody Energy Callable 03/15/08 @ 103.44 6.875%, 03/15/13 1,000 1,045 Pemex Project Funding Master Trust 7.875%, 02/01/09 500 574 7.375%, 12/15/14 500 552 Plains All American Pipeline LP 7.750%, 10/15/12 250 272 Stone Energy Callable 12/15/06 @ 104.125 8.250%, 12/15/11 200 210 Swift Energy Callable 05/01/07 @ 104.688 9.375%, 05/01/12 500 528 Tesoro Petroleum, Ser B (K) Callable 11/01/05 @ 104.81 9.625%, 11/01/08 500 458 Westport Resources (B) 8.250%, 11/01/11 250 271 -------- 6,032 -------- ENTERTAINMENT (3.2%) Boyd Gaming (B) Callable 12/15/07 @ 103.875 7.750%, 12/15/12 500 514 Kerzner International Callable 08/15/06 @ 104.438 8.875%, 08/15/11 1,000 1,067 Mandalay Resort Group 10.250%, 08/01/07 1,000 1,100 Resort International Hotel & Casino Callable 03/15/07 @ 106 11.500%, 03/15/09 500 454 Royal Caribbean Cruises (K) 8.750%, 02/02/11 1,000 1,005 Six Flags (K) Callable 02/01/06 @ 104.44 8.875%, 02/01/10 1,000 954 Venetian Casino Callable 06/15/06 @ 105.5 11.000%, 06/15/10 1,000 1,094 -------- 6,188 -------- FINANCE (0.3%) Capital One 8.750%, 02/01/07 500 560 -------- 58 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO (1.8%) B&G Foods, Ser D Callable 08/01/03 @ 103.208 9.625%, 08/01/07 $ 625 $ 640 Burns Philp Capital Property (B) Callable 07/15/07 @ 104.875 9.750%, 07/15/12 1,000 965 Land O Lakes, Ser B Callable 11/15/06 @ 104.38 8.750%, 11/15/11 1,000 750 RJ Reynolds Tobacco Holdings, Ser B 7.750%, 05/15/06 1,000 1,026 -------- 3,381 -------- HOTELS & LODGING (0.5%) Host Marriott, Ser B Callable 08/01/03 @ 103.99 7.875%, 08/01/08 1,000 998 -------- INDUSTRIAL (3.0%) AK Steel Callable 06/15/07 @ 103.875 7.750%, 06/15/12 1,000 795 Case 7.250%, 08/01/05 1,000 992 Constar Callable 12/01/07 @ 105.5 11.000%, 12/01/12 500 530 Foamex LP Callable 04/01/06 @ 105.375 10.750%, 04/01/09 500 400 NMGH Holding Callable 05/15/06 @ 105 10.000%, 05/15/09 500 537 Sanmina-SCI (B) Callable 01/15/07 @ 105.188 10.375%, 01/15/10 500 555 SPX Callable 01/01/08 @ 103.75 7.500%, 01/01/13 500 526 Trimas (B) Callable 06/15/07 @ 104.938 9.875%, 06/15/12 250 253 Trimas Callable 06/15/07 @ 104.938 9.875%, 06/15/12 750 758 United States Steel Callable 05/15/07 @ 104.88 9.750%, 05/15/10 500 495 -------- 5,841 -------- MEDICAL & MEDICAL PRODUCTS (3.4%) Ameripath (B) Callable 04/01/08 @ 105.25 10.500%, 04/01/13 1,000 1,040 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Amerisourcebergen 7.250%, 11/15/12 $ 500 $ 539 Apogent Technologies (B) Callable 05/15/08 @ 103.25 6.500%, 05/15/13 500 510 Fisher Scientific (B) 8.125%, 05/01/12 500 536 Healthsouth (J) (K) Callable 10/01/04 @ 105.375 10.750%, 10/01/08 750 277 Pacificare Health Systems Callable 06/01/06 @ 105.375 10.750%, 06/01/09 1,000 1,095 Rotech Healthcare 9.500%, 04/01/12 1,000 990 United Surgical Partners Callable 12/15/06 @ 105 10.000%, 12/15/11 1,000 1,080 US Oncology Callable 02/01/07 @ 104.813 9.625%, 02/01/12 500 539 -------- 6,606 -------- PRINTING & PUBLISHING (1.4%) Dex Media East LLC Callable 11/15/07 @ 106.063 12.125%, 11/15/12 1,000 1,170 Primedia (B) Callable 05/15/08 @ 104 8.000%, 05/15/13 1,000 1,005 Von Hoffman Press 10.250%, 03/15/09 500 515 -------- 2,690 -------- REAL ESTATE INVESTMENT TRUSTS (2.2%) Crescent Real Estate Callable 04/15/06 @ 104.625 9.250%, 04/15/09 750 805 IStar Financial 7.000%, 03/15/08 750 790 MeriStar Hospitality Operating Partnership LP Callable 12/15/05 @ 105.25 10.500%, 06/15/09 1,000 972 Senior Housing Properties Trust Callable 04/15/08 @ 103.938 7.875%, 04/15/15 500 508 Ventas Realty LP 9.000%, 05/01/12 1,000 1,085 -------- 4,160 -------- RETAIL (3.2%) Asbury Automotive Group Callable 06/15/07 @ 104.5 9.000%, 06/15/12 1,000 940 59 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 STRATEGIC INCOME FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Great Atlantic & Pacific Tea Callable 12/15/06 @ 104.563 9.125%, 12/15/11 $ 1,000 $ 890 Hollywood Entertainment Callable 03/15/07 @ 104.813 9.625%, 03/15/11 1,000 1,065 Ingles Markets Callable 12/01/06 @ 104.438 8.875%, 12/01/11 500 505 JC Penney 8.000%, 03/01/10 1,000 1,022 Office Depot 10.000%, 07/15/08 500 585 Roundy's, Ser B (B) Callable 06/15/07 @ 104.438 8.875%, 06/15/12 1,000 1,043 -------- 6,050 -------- SERVICE INDUSTRIES (3.5%) Allied Waste (B) 9.250%, 09/01/12 500 536 Coinmach Callable 02/01/06 @ 104.5 9.000%, 02/01/10 500 537 IESI Callable 06/15/07 @ 105.125 10.250%, 06/15/12 500 522 IPC Acquisition Callable 12/15/05 @ 105.75 11.500%, 12/15/09 200 208 Iron Mountain Callable 01/15/08 @ 103.88 7.750%, 01/15/15 500 533 Service International 7.700%, 04/15/09 500 505 6.875%, 10/01/07 500 498 Shaw Group (B) Callable 03/15/07 @ 105.375 10.750%, 03/15/10 1,000 990 Transmontaigne (B) Callable 06/01/07 @ 104.563 9.125%, 06/01/10 500 513 United Rentals, Ser B (K) Callable 06/01/03 @ 104.75 9.500%, 06/01/08 1,000 945 Xerox 5.500%, 11/15/03 1,000 998 -------- 6,785 -------- TELEPHONE & TELECOMMUNICATIONS (4.1%) Crown Castle International (K) Callable 08/01/05 @ 105.375 10.750%, 08/01/11 1,000 1,050 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Intermedia Communications, Ser B (J) 11.250%, 07/15/07 $ 750 $ 549 Nextel Communications (A) Callable 09/15/03 @ 102.663 9.556%, 09/15/07 1,000 1,038 PanAmSat Callable 02/01/07 @ 104.25 8.500%, 02/01/12 1,000 1,070 Rogers Cantel Callable 06/01/03 @ 104.69 9.375%, 06/01/08 1,000 1,045 Sprint Capital 6.125%, 11/15/08 500 528 Triton PCS (A) (K) 9.443%, 05/01/08 1,000 1,060 TSI Telecommunications Services, Ser B Callable 02/01/06 @ 106.375 12.750%, 02/01/09 500 470 Voicestream Wireless (A) Callable 11/15/04 @ 105.94 9.189%, 11/15/09 1,000 970 -------- 7,780 -------- TRANSPORTATION (0.4%) Laidlaw, Ser B 11.500%, 04/15/07 1,000 765 -------- UTILITIES (2.2%) Calpine (K) 8.500%, 02/15/11 500 340 El Paso Energy Partners, Ser B Callable 12/01/06 @ 104.25 8.500%, 06/01/11 1,000 1,065 Mission Energy Holdings 13.500%, 07/15/08 1,000 660 PSEG Energy Holdings (B) 7.750%, 04/16/07 500 531 Western Resources 7.125%, 08/01/09 600 609 Williams 9.250%, 03/15/04 1,000 1,020 -------- 4,225 -------- Total Corporate Obligations (Cost $88,845) 89,649 -------- ASSET-BACKED OBLIGATION (0.8%) Saxon Asset Securities Trust, Ser 2003-1, Cl AF3 2.920%, 06/25/33 1,550 1,572 -------- Total Asset-Backed Obligation (Cost $1,550) 1,572 -------- 60 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) (E) VALUE (000) - -------------------------------------------------------------------------------- FOREIGN GOVERNMENT DEBT SECURITIES (16.5%) AUSTRALIA (1.9%) Australian Government (AUD) 6.750%, 11/15/06 2,500 $ 1,747 6.500%, 05/15/13 2,500 1,833 -------- 3,580 -------- BELGIUM (0.6%) Belgium Kingdom (EUR) 4.250%, 09/28/13 1,000 1,217 -------- BRAZIL (1.1%) Federal Republic of Brazil 11.000%, 01/11/12 $ 2,000 2,023 -------- CANADA (2.0%) Canadian Government (CAD) 5.750%, 09/01/06 2,500 1,943 5.250%, 06/01/12 2,500 1,934 -------- 3,877 -------- FRANCE (1.2%) Government of France (EUR) 6.500%, 10/25/06 1,700 2,251 -------- GERMANY (1.8%) Deutschland Republic (EUR) 6.000%, 01/05/06 2,700 3,464 -------- ITALY (1.7%) Buoni Poliennali del Tesoro (EUR) 5.250%, 08/01/17 2,500 3,273 -------- SPAIN (1.9%) Government of Spain (EUR) 6.000%, 01/31/08 2,800 3,728 -------- SWEDEN (2.0%) Swedish Government (SEK) 6.750%, 05/05/14 24,000 3,731 -------- UNITED KINGDOM (2.3%) United Kingdom (GBP) 7.500%, 12/07/06 1,000 1,847 5.000%, 03/07/12 1,500 2,624 -------- 4,471 -------- Total Foreign Government Debt Securities (Cost $26,157) 31,615 -------- CASH EQUIVALENT (9.9%) Wells Fargo Time Deposit 0.520%, 06/02/03 $18,970,496 18,970 -------- Total Cash Equivalent (Cost $18,970) 18,970 -------- - -------------------------------------------------------------------------------- SHARES VALUE (000) - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT (4.5%) Boston Global Investment Trust -- Enhanced Portfolio (L) 8,605,010 $ 8,605 -------- Total Short-Term Investment (Cost $8,605) 8,605 -------- Total Investments (113.2%) (Cost $209,346) 217,143 -------- OTHER ASSETS AND LIABILITIES (-13.2%) Investment Advisory Fees Payable (115) Administration Fees Payable (10) Distribution Fees Payable (51) Custodian Fees Payable (4) Payable upon Return of Securities Loaned (8,605) Payable for Investment Securities Purchased (20,644) Other Assets and Liabilities, Net 4,157 -------- Total Other Assets and Liabilities (25,272) -------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 6,197,309 outstanding shares of beneficial interest 60,655 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 13,004,334 outstanding shares of beneficial interest 126,968 Distribution in excess of net investment income (3,788) Accumulated net realized gain on investments 281 Net unrealized appreciation on investments 7,797 Net unrealized depreciation on forward foreign currency contracts, foreign currencies and translation of other assets and liabilities denominated in foreign currencies (42) -------- Total Net Assets (100.0%) $191,871 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($61,905,598 / 6,197,309 shares) $9.99 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($129,965,307 / 13,004,334 shares) $9.99 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 61 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 U.S. GOVERNMENT SECURITIES FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (22.3%) U.S. Treasury Notes 5.375%, 02/15/31 $10,000 $ 11,619 4.625%, 05/15/06 (K) 10,000 10,878 4.375%, 08/15/12 (K) 10,000 10,871 4.000%, 11/15/12 (K) 16,000 16,888 3.375%, 01/15/07 5,794 6,359 3.000%, 11/15/07 to 07/15/12 (K) 11,063 11,700 -------- Total U.S. Treasury Obligations (Cost $65,882) 68,315 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (11.0%) FHLB 2.500%, 03/15/06 2,000 2,043 FHLB, Ser 422 1.875%, 06/15/06 2,000 2,004 FHLMC 6.750%, 03/15/31 8,000 10,355 4.500%, 01/15/13 (K) 6,600 7,041 FNMA 6.625%, 11/15/10 10,000 12,234 -------- Total U.S. Government Agency Obligations (Cost $30,683) 33,677 -------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (61.2%) FHLMC 7.000%, 06/01/17 1,127 1,190 6.500%, 03/01/12 to 09/01/16 4,061 4,250 5.500%, 04/01/17 6,921 7,167 5.253%, 04/01/33 5,000 5,180 5.000%, 05/01/33 4,995 5,134 4.500%, 06/01/18 10,000 10,253 1.650%, 08/27/05 4,145 4,151 FHLMC REMIC, Ser 1623, Cl PG 3.000%, 07/15/21 3,983 4,004 FNMA 7.000%, 12/01/31 to 06/01/32 9,713 10,233 6.500%, 06/01/13 to 07/01/32 14,917 15,552 6.290%, 08/01/18 1,315 1,374 6.000%, 11/01/07 to 05/01/33 59,538 61,905 5.936%, 11/01/11 3,938 4,532 5.500%, 09/01/17 to 04/01/18 10,531 10,939 5.000%, 06/01/33 4,993 5,122 FNMA REMIC, Ser 143, Cl J 8.750%, 12/25/20 14 16 FNMA REMIC, Ser 2002-22, Cl PE 6.500%, 11/25/30 6,000 6,304 FNMA, Ser 2002-M2, Cl C 4.717%, 08/25/12 5,000 5,358 - -------------------------------------------------------------------------------- FACE AMOUNT (000)/ SHARES VALUE (000) - -------------------------------------------------------------------------------- GNMA 7.500%, 10/20/09 $ 9 $ 9 6.500%, 10/15/23 to 11/15/31 5,691 5,968 6.250%, 10/15/28 784 820 6.000%, 07/15/13 to 03/15/33 11,463 12,017 GNMA TBA (H) 5.500%, 06/19/33 3,000 3,132 GNMA, Ser 2002-9, Cl B 5.881%, 03/16/24 3,000 3,414 -------- Total U.S. Government Mortgage-Backed Obligations (Cost $183,215) 188,024 -------- SHORT-TERM INVESTMENT (17.2%) Boston Global Investment Trust -- Enhanced Portfolio (L) 52,919,500 52,920 -------- Total Short-Term Investment (Cost $52,920) 52,920 -------- CASH EQUIVALENT (5.7%) Federated Prime Money Market Obligations Fund 12,933,618 12,934 SEI Daily Income Trust Government II Fund 4,727,737 4,728 -------- Total Cash Equivalent (Cost $17,662) 17,662 -------- REPURCHASE AGREEMENT (4.0%) ABN Amro, 1.200%, dated 05/30/03, matures 06/02/03, repurchase price $12,442,092 (collateralized by U.S. Treasury Obligations: total market value $12,689,666) $12,441 12,441 -------- Total Repurchase Agreement (Cost $12,441) 12,441 -------- Total Investments (121.4%) (Cost $362,803) 373,039 -------- OTHER ASSETS AND LIABILITIES (-21.4%) Investment Advisory Fees Payable (182) Administration Fees Payable (18) Distribution Fees Payable (28) Transfer Agency Shareholder Servicing Fees Payable (1) Custodian Fees Payable (3) Payable Upon Return of Securities Loaned (52,920) Payable for Investment Securities Purchased (18,459) Other Assets and Liabilities, Net 5,913 -------- Total Other Assets and Liabilities (65,698) -------- 62 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 23,658,481 outstanding shares of beneficial interest $248,745 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 853,891 outstanding shares of beneficial interest 8,946 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 3,605,326 outstanding shares of beneficial interest 38,394 Undistributed net investment income 3 Accumulated net realized gain on investments 1,017 Net unrealized appreciation on investments 10,236 -------- Total Net Assets (100.0%) $307,341 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($258,585,041 / 23,658,481 shares) $10.93 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($9,333,424 / 853,891 shares) $10.93 ======== Maximum Offering Price Per Share -- Investor Shares ($10.93 / 96.25%) $11.36 ======== Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($39,422,618 / 3,605,326 shares) $10.93 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 63 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (98.4%) VIRGINIA (96.8%) Albemarle County, Industrial Development Authority, Residential Care Facilities, Ser A, RB Callable 01/01/05 @ 101 5.000%, 01/01/07 $1,500 $ 1,539 Alexandria, Industrial Development Authority, Association for Supervision & Curriculum Project, RB (LOC: First Union National Bank) Callable 07/01/03 @ 100 (C) 1.200%, 07/01/23 1,540 1,540 Arlington County, Industrial Development Authority, Alexandria/Arlington Project, Ser A, RB, FSA 5.250%, 01/01/05 4,000 4,256 Arlington County, Industrial Development Authority, Alexandria/Arlington Waste Project, Ser B, RB, AMT, FSA Callable 07/01/08 @ 101 5.375%, 01/01/11 2,785 3,063 Arlington County, Industrial Development Authority, Arlington Health Systems, RB 5.500%, 07/01/06 2,000 2,218 5.500%, 07/01/11 2,000 2,298 Arlington County, Industrial Development Authority, Arlington Health Systems, RB Callable 07/01/11 @ 101 5.500%, 07/01/17 2,225 2,450 Bristol, GO, FSA Callable 11/01/12 @ 102 5.500%, 11/01/16 1,190 1,403 Bristol, Public Improvement Project, GO, FSA Callable 11/01/12 @ 102 5.250%, 11/01/14 1,250 1,471 Bristol, Utility Systems, RB, FSA Callable 07/15/11 @ 102 5.750%, 07/15/14 1,055 1,259 Chesapeake Bay, Bridge & Tunnel Commission, General Resolution, RB, MBIA 5.500%, 07/01/25 2,100 2,484 Chesapeake, GO 5.500%, 12/01/10 2,500 2,979 5.400%, 12/01/08 2,500 2,922 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- City of Richmond, GO, FGIC 5.500%, 07/15/10 $1,000 $ 1,179 Danville, GO, FSA 5.000%, 08/01/12 1,000 1,153 Danville-Pittsylvania, Regional Advanced Institute, RB (LOC: Branch Banking & Trust) (C) Callable 06/04/03 @ 100 1.200%, 08/01/12 1,575 1,575 Fairfax County, Industrial Development Authority, Fairfax Hospital Project, Ser B, RB (C) 1.130%, 10/01/25 2,300 2,300 Fairfax County, Industrial Development Authority, Inova Health System Project, RB Callable 08/15/06 @ 102 5.300%, 08/15/07 1,500 1,669 Fairfax County, Industrial Development Authority, Inova Health System Project, RB, AMBAC 5.000%, 08/15/13 1,000 1,144 Fairfax County, Industrial Development Authority, Inova Health System Project, Ser A, RB Callable 02/15/08 @ 101 5.000%, 08/15/10 2,890 3,144 Fairfax County, Water Authority, RB Callable 04/01/07 @ 102 6.000%, 04/01/22 5,560 6,397 Fairfax County, Water Authority, RB Callable 04/01/10 @ 101 6.000%, 04/01/14 1,125 1,342 Fairfax County, Water Authority, RB Callable 04/01/12 @ 100 5.500%, 04/01/14 2,000 2,361 Greater Richmond, Convention Center Authority, Convention Center Expansion Project, RB 5.500%, 06/15/10 700 804 5.250%, 06/15/05 460 495 5.000%, 06/15/03 1,000 1,002 Greater Richmond, Convention Center Authority, Convention Center Expansion Project, RB Callable 06/15/10 @ 101 6.000%, 06/15/11 1,170 1,374 6.000%, 06/15/13 3,185 3,684 Hampton, GO Callable 01/15/08 @ 102 5.000%, 01/15/10 1,200 1,340 64 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Hampton, Museum Project, RB Callable 01/01/04 @ 102 5.250%, 01/01/09 $1,760 $ 1,821 Hampton, Ser A, GO Callable 07/15/12 @ 101 5.500%, 07/15/18 1,275 1,475 Hanover County, Industrial Development Authority, Memorial Regional Medical Center Project, RB, MBIA 6.375%, 08/15/18 6,000 7,648 Harrisonburg, Industrial Development Authority, Rockingham Memorial Hospital Project, RB, MBIA Callable 07/07/03 @ 102 5.750%, 12/01/13 3,000 3,070 Henrico County, Economic Development Authority, United Methodist Homes Project, Ser A, RB 5.000%, 06/01/10 1,000 1,010 4.250%, 06/01/07 475 476 3.750%, 06/01/06 255 256 Henrico County, Economic Development Authority, United Methodist Homes Project, Ser A, RB Callable 06/01/12 @ 100 6.500%, 06/01/22 1,000 1,004 Henrico County, GO 5.000%, 01/15/08 2,220 2,514 Henrico County, Industrial Development Authority, Governmental Projects, RB Callable 06/01/06 @ 102 5.150%, 06/01/07 2,500 2,787 Henrico County, Industrial Development Authority, Solid Waste Facility, Browning Ferris Project, RB, AMT 5.300%, 12/01/11 1,000 962 Henry County, Industrial Development Authority, Memorial Hospital Martinsville & Henry, RB Prerefunded @ 101 (F) 6.000%, 01/01/07 2,250 2,597 Henry County, Public Service Authority, RB, FSA 5.000%, 11/15/08 1,990 2,276 Isle of Wight County, GO, MBIA 5.000%, 02/01/12 1,000 1,157 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- James City County, Industrial Development Authority, Residential Care Facility, Ser B, RB Callable 09/01/04 @ 101 5.375%, 03/01/26 $1,900 $ 1,939 James City County, Industrial Development Authority, Residential Care Facility, RB Callable 07/07/03 @ 101 6.625%, 03/01/19 1,750 1,770 6.625%, 03/01/23 1,000 1,011 Lynchburg, Industrial Development Authority, Health Care Facility, RB 5.000%, 01/01/08 1,180 1,299 Lynchburg, Industrial Development Authority, Residential Care Facility, The Summit Project, Ser A, RB Callable 01/01/05 @ 101 4.750%, 01/01/06 1,750 1,773 Lynchburg, Industrial Development Authority, Recreational Facilities Revenue, RB (LOC: Wachovia Bank N.A.) (C) Callable 06/04/03 @ 100 1.200%, 05/01/23 2,000 2,000 Lynchburg, Ser B, GO 5.000%, 02/01/10 1,940 2,219 Montgomery County, Industrial Development Authority, RB, AMBAC Callable 01/15/12 @ 101 5.500%, 01/15/18 1,865 2,138 Newport News, GO 5.250%, 03/01/08 1,500 1,710 Newport News, Industrial Development Authority, Advanced Shipbuilding Carrier Project, RB 5.500%, 09/01/09 2,500 2,943 Newport News, Ser B, GO 5.250%, 07/01/15 3,000 3,550 Norfolk, GO Callable 06/01/04 @ 101 5.250%, 06/01/08 5,000 5,248 Norfolk, Industrial Development Authority, Children's Hospital Project, RB, AMBAC 6.900%, 06/01/06 1,000 1,153 65 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND--CONTINUED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Norfolk, Redeveloping & Housing Authority, Educational Facility -- Tidewater Community College, RB 5.000%, 11/01/13 $1,135 $ 1,310 Pittsylvania County, Ser A, GO 4.000%, 06/01/03 1,375 1,375 Portsmouth, GO Prerefunded @ 102 (F) 5.450%, 08/01/03 150 154 Richmond, GO, FSA 5.250%, 01/15/09 1,470 1,696 Richmond, GO, FSA Callable 01/15/11 @ 101 5.500%, 01/15/12 2,000 2,357 5.500%, 01/15/18 2,755 3,140 Richmond, Industrial Development Authority, Atmore Corporation Project, RB, AMBAC 4.750%, 07/15/08 860 967 Richmond, Ser B, GO, FSA 5.000%, 07/15/11 2,500 2,871 Roanoke, Industrial Development Authority, Carilion Health System Project, Ser A, RB, MBIA 5.250%, 07/01/11 1,000 1,153 Roanoke, Industrial Development Authority, Carilion Health System Project, Ser A, RB, MBIA Callable 07/01/12 @ 100 5.750%, 07/01/13 2,000 2,378 5.750%, 07/01/14 2,000 2,370 5.500%, 07/01/18 2,000 2,266 Roanoke, Ser B, GO, AMT, FGIC 5.000%, 10/01/11 1,000 1,127 Southwest Virginia, Regional Jail Authority, RB, MBIA 4.500%, 09/01/12 1,275 1,409 4.500%, 09/01/13 1,235 1,363 Southwest Virginia, Regional Jail Authority, RB, MBIA Callable 09/01/13 @ 100 5.125%, 09/01/14 1,145 1,316 5.125%, 09/01/15 1,465 1,666 Suffolk, GO Callable 08/01/03 @ 102 5.600%, 08/01/06 2,000 2,055 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Virginia Beach, Development Authority, Public Facility Town Center Project Phase I, Ser A, RB Callable 08/01/12 @ 100 5.375%, 08/01/16 $1,650 $ 1,887 Virginia Beach, Development Authority, Sentara Life Care Project, RB Callable 11/01/03 @ 100 7.750%, 11/01/21 1,000 1,015 Virginia Beach, GO 5.450%, 07/15/11 1,000 1,180 5.250%, 03/01/07 2,500 2,814 5.250%, 03/01/08 1,695 1,937 Virginia Commonwealth, Transportation Board, Federal Highway Reimbursement Project, RB 5.500%, 10/01/04 2,500 2,647 5.500%, 10/01/05 2,500 2,746 5.500%, 10/01/06 2,000 2,259 Virginia Commonwealth, Transportation Board, Northern Transportation District Project, Ser A, RB Callable 05/01/11 @ 100 5.375%, 05/15/13 2,045 2,360 Virginia Polytechnic, Institute and State University Revenue, Ser A, RB 5.750%, 06/01/06 750 843 Virginia State, Biotechnology Research Park Authority, Consolidated Laboratories Project, RB Callable 09/01/11 @ 100 5.125%, 09/01/16 1,100 1,231 Virginia State, College Building Authority, Public Higher Education Financing Program, Ser A, RB 5.000%, 09/01/11 1,510 1,737 Virginia State, College Building Authority, Public Higher Education, Ser A, RB 5.500%, 09/01/06 1,135 1,279 5.500%, 09/01/09 1,415 1,666 Virginia State, College Building Authority, Washington & Lee University, RB 5.375%, 01/01/21 2,945 3,473 66 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Virginia State, Education Loan Authority, Guaranteed Student Loan Program, Ser B, RB, AMT 5.550%, 09/01/10 $1,800 $ 1,989 Virginia State, Housing Development Authority, Commonwealth Mortgage Project, Ser I, Sub Ser I-1, RB, AMT 3.750%, 07/01/05 1,000 1,043 Virginia State, Housing Development Authority, Multi- Family Housing, Ser E, RB Callable 01/01/08 @ 102 5.350%, 11/01/11 1,250 1,360 Virginia State, Housing Development Authority, Multi- Family Housing, Ser I, RB, AMT Callable 01/01/09 @ 101 4.875%, 11/01/12 1,950 2,073 Virginia State, Housing Development Authority, Rental Housing, Ser H, RB, AMT Callable 11/01/09 @ 100 5.625%, 11/01/18 3,500 3,733 Virginia State, Housing Development Authority, Ser C, Sub-Ser C-1, RB Callable 01/01/08 @ 102 5.100%, 07/01/14 1,500 1,597 Virginia State, Housing Development Authority, Sub-Ser J-1, RB, MBIA Callable 07/01/11 @ 100 4.875%, 07/01/13 2,500 2,708 Virginia State, Peninsula Ports Authority, Ser A, RB Callable 12/01/13 @ 100 7.375%, 12/01/23 1,500 1,565 Virginia State, Polytechnic Institute & State University, Ser A, RB Callable 06/01/06 @ 102 5.350%, 06/01/09 2,000 2,254 Virginia State, Public Building Authority, Ser A, RB Callable 08/01/07 @ 101 6.000%, 08/01/08 1,000 1,160 - -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) - -------------------------------------------------------------------------------- Virginia State, Public School Authority, School Financing Project, Ser A, RB 5.250%, 08/01/07 $2,000 $ 2,270 Virginia State, Resources Authority, RB 5.000%, 04/01/11 1,265 1,448 5.000%, 04/01/12 1,225 1,407 Virginia State, Resources Authority, Ser D, RB Callable 05/01/10 @ 101 5.000%, 05/01/13 1,485 1,662 Virginia State, Ser B, GO Callable 08/01/10 @ 101 5.000%, 08/01/13 2,910 3,266 York County, GO 5.000%, 07/15/09 1,545 1,769 -------- 210,002 -------- PUERTO RICO (1.6%) Puerto Rico Commonwealth, Public Improvement Project, Ser C, GO, MBIA Mandatory Put 07/01/08 @ 100 5.000%, 07/01/28 3,000 3,401 -------- Total Municipal Bonds (Cost $200,596) 213,403 -------- CASH EQUIVALENT (0.4%) Federated Tax-Free Obligation Fund 880,397 880 -------- Total Cash Equivalent (Cost $880) 880 -------- Total Investments (98.8%) (Cost $201,476) 214,283 -------- OTHER ASSETS AND LIABILITIES (1.2%) Investment Advisory Fees Payable (119) Administration Fees Payable (13) Custodian Fees Payable (2) Other Assets and Liabilities, Net 2,767 -------- Total Other Assets and Liabilities 2,633 -------- 67 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 19,334,190 outstanding shares of beneficial interest $192,670 Paid in Capital -- Investor Shares (unlimited authorization -- no par value) based on 981,831 outstanding shares of beneficial interest 10,174 Undistributed net investment income 13 Accumulated net realized gain on investments 1,252 Net unrealized appreciation on investments 12,807 -------- Total Net Assets (100.0%) $216,916 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($206,431,589 / 19,334,190 shares) $10.68 ======== Net Asset Value and Redemption Price Per Share -- Investor Shares ($10,484,608 / 981,831 shares) $10.68 ======== Maximum Offering Price Per Share -- Investor Shares ($10.68 / 96.25%) $11.10 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 68 - -------------------------------------------------------------------------------- VIRGINIA MUNICIPAL BOND FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS (97.8%) VIRGINIA (96.1%) Albemarle County, Industrial Development Authority, Zion Place Project, Ser A, RB Callable 06/01/12 @ 101 6.000%, 06/01/22 $ 830 $ 837 Alexandria, Redevelopment & Housing Authority, Goodwin House Project, Ser B, RB (LOC: First Union National Bank) (C) 1.250%, 10/01/06 1,000 1,000 Amherst County, Service Authority, RB Callable 12/15/10 @ 102 6.000%, 12/15/20 500 537 6.000%, 12/15/30 1,750 1,858 Arlington County, Industrial Development Authority, Hospital Facilities, RB Callable 07/01/11 @ 101 5.500%, 07/01/13 1,250 1,421 Brunswick County, Industrial Development Authority, RB, MBIA Callable 07/01/06 @ 102 5.700%, 07/01/10 1,000 1,142 Chesapeake Toll Revenue, Ser A, RB Callable 07/15/09 @ 101 5.625%, 07/15/32 250 260 Chesterfield County, GO Callable 01/15/10 @ 100 5.750%, 01/15/15 1,315 1,532 Chesterfield County, GO Callable 01/15/11 @ 100 5.000%, 01/15/12 1,105 1,260 Fairfax County, Industrial Development Authority, Inova Health System Project, RB Callable 06/04/03 @ 100 1.130%, 01/01/30 1,000 1,000 Fairfax County, Sewer Revenue, RB, MBIA Callable 07/15/06 @ 102 5.800%, 07/15/22 1,000 1,127 Fredericksburg, Industrial Development Authority, Medicorp Health System Project, RB 5.000%, 08/15/09 1,000 1,115 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Greater Richmond, Convention Center Authority, Convention Center Expansion Project, RB 5.500%, 06/15/08 $ 550 $ 614 5.250%, 06/15/05 500 538 Greater Richmond, Convention Center Authority, Convention Center Expansion Project, RB Callable 06/15/10 @ 101 6.125%, 06/15/25 1,200 1,359 5.900%, 06/15/16 850 964 Hampton, Golf Course Project, RB 6.000%, 12/01/12 1,171 1,278 Hampton, Museum Project, RB Callable 01/01/04 @ 102 5.250%, 01/01/09 440 455 Hanover County, Industrial Development Authority, Bon Secours Health System Project, RB, MBIA 6.000%, 08/15/09 1,000 1,193 Hanover County, Industrial Development Authority, Memorial Regional Medical Center Project, RB, MBIA 6.375%, 08/15/18 1,000 1,275 Henrico County, Economic Development Authority, Beth Sholom Assisted Living, Ser A, RB, GNMA Callable 07/20/09 @ 102 5.900%, 07/20/29 500 564 5.850%, 07/20/19 400 446 Henrico County, Economic Development Authority, United Methodist Homes Project, Ser A, RB Callable 06/01/12 @ 100 6.500%, 06/01/22 1,000 1,004 Henry County, Public Service Authority, RB, FSA 5.250%, 11/15/13 1,500 1,771 King George County, Industrial Development Authority, RB 5.000%, 12/15/12 560 627 69 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 VIRGINIA MUNICIPAL BOND FUND--CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Lynchburg, Industrial Development Authority, Centra Health Project, RB Callable 01/01/08 @ 101 5.250%, 01/01/11 $1,430 $ 1,550 Metropolitan Washington, Airports Authority, Ser A, RB, MBIA, AMT Callable 10/01/11 @ 101 5.500%, 10/01/27 1,000 1,064 Newport News, Redevelopment & Housing Authority, Ser A, RB, GNMA Callable 08/20/07 @ 102 5.850%, 12/20/30 500 531 Pittsylvania County, Ser B, GO, MBIA Callable 03/01/11 @ 102 5.625%, 03/01/15 1,000 1,181 Richmond, GO, FSA Callable 01/15/11 @ 101 5.500%, 01/15/15 1,290 1,495 5.500%, 01/15/18 1,000 1,140 Richmond, Industrial Development Authority, University Real Estate Foundation Project, RB Callable 01/01/11 @ 102 5.550%, 01/01/31 720 758 5.450%, 01/01/21 1,000 1,074 Richmond, Public Utility, Ser A, RB, FGIC Callable 01/15/08 @ 101 5.250%, 01/15/12 1,000 1,125 Riverside, Regional Jail Authority, RB, MBIA Prerefunded @ 102 (F) 5.875%, 07/01/05 910 1,016 Roanoke, Industrial Development Authority, Carilion Health System Project, Ser A, RB, MBIA Callable 07/01/12 @ 100 5.500%, 07/01/21 1,000 1,112 Roanoke, Industrial Development Authority, Carilion Health System Project, Ser C, RB (C) Callable 07/01/03 @ 100 1.250%, 07/01/27 1,000 1,000 Spotsylvania County, GO, FSA 5.000%, 07/15/14 1,000 1,161 Upper Occoquan, Sewage Authority, Ser B, RB, MBIA 6.000%, 07/01/06 700 795 - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Virginia Commonwealth, Transportation Board, Federal Highway Reimbursement Project, RB 5.500%, 10/01/05 $1,000 $ 1,098 4.700%, 10/01/07 1,000 1,116 Virginia Commonwealth, Transportation Board, Highway Improvements Project, Ser B, RB 5.000%, 05/15/08 1,230 1,394 Virginia Commonwealth, Transportation Board, Ser A, RB Callable 05/01/11 @ 100 5.375%, 05/15/12 1,500 1,743 Virginia State, College Building Authority, 21st Century College & Equipment Programs, Ser A, RB Callable 02/01/12 @ 100 5.500%, 02/01/13 1,000 1,177 Virginia State, College Building Authority, Public Higher Education, Ser A, RB 5.500%, 09/01/07 1,285 1,474 5.500%, 09/01/09 1,000 1,177 Virginia State, College Building Authority, Public Higher Education, Ser A, RB Callable 09/01/10 @ 100 5.500%, 09/01/15 500 579 Virginia State, College Building Authority, Washington & Lee University Project, RB, MBIA 5.250%, 01/01/31 1,100 1,278 Virginia State, Housing Development Authority, Sub-Ser I-1, RB 3.750%, 01/01/05 1,000 1,034 Virginia State, Peninsula Ports Authority, Ser A, RB Callable 12/01/13 @ 100 7.375%, 12/01/23 500 522 Virginia State, Public Building Authority, Ser A, RB Callable 08/01/10 @ 100 5.750%, 08/01/16 1,950 2,287 Virginia State, Public School Authority, School Equipment Financing, RB 5.250%, 04/01/05 1,000 1,074 Virginia State, Public School Authority, School Financing, Ser A, RB 5.500%, 08/01/08 1,000 1,163 70 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FACE AMOUNT (000)/ SHARES VALUE (000) - -------------------------------------------------------------------------------- Virginia State, Public School Authority, Ser B, RB Callable 08/01/10 @ 101 5.000%, 08/01/14 $1,000 $ 1,123 Virginia State, Resources Authority, RB 4.500%, 05/01/08 405 449 Virginia State, Resources Authority, RB, MBIA Callable 05/01/11 @ 101 5.800%, 05/01/30 1,500 1,693 Virginia State, Resources Authority, Water and Sewer Systems, Tuckahoe Creek Service District Project, RB 4.625%, 11/01/10 510 574 Virginia State, Virginia Beach Development Authority, General Hospital Project, RB, AMBAC 6.000%, 02/15/09 500 590 Williamsburg, Industrial Development Authority, Williamsburg Community Hospital, RB Callable 10/01/03 @ 102 5.750%, 10/01/22 750 768 ------- 62,492 ------- PUERTO RICO (1.7%) Puerto Rico Commonwealth, Ser C, GO, MBIA Mandatory Put 07/01/08 @ 100 5.000%, 07/01/28 1,000 1,134 ------- Total Municipal Bonds (Cost $58,580) 63,626 ------- CASH EQUIVALENT (2.0%) Federated Tax-Free Obligation Fund 1,285,270 1,285 ------- Total Cash Equivalent (Cost $1,285) 1,285 ------- Total Investments (99.8%) (Cost $59,865) 64,911 ------- OTHER ASSETS AND LIABILITIES (0.2%) Investment Advisory Fees Payable (36) Administration Fees Payable (4) Distribution Fees Payable (12) Other Assets and Liabilities, Net 199 ------- Total Other Assets and Liabilities 147 ------- - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- Trust Shares (unlimited authorization -- no par value) based on 4,344,336 outstanding shares of beneficial interest $43,165 Paid in Capital -- Flex Shares (unlimited authorization -- no par value) based on 1,524,131 outstanding shares of beneficial interest 16,177 Undistributed net investment income 4 Accumulated net realized gain on investments 666 Net unrealized appreciation on investments 5,046 ------- Total Net Assets (100.0%) $65,058 ======= Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares ($48,101,863 / 4,344,336 shares) $11.07 ======= Net Asset Value and Offering Price Per Share -- Flex Shares (1) ($16,956,263 / 1,524,131 shares) $11.13 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 72. 71 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 KEY TO ABBREVIATIONS AND FOOTNOTES USED IN THE STATEMENTS OF NET ASSETS ACA American Capital Access AMBAC Security insured by the American Municipal Bond Assurance Corporation AMT Alternative Minimum Tax Cl Class COP Certificate of Participation ETM Escrowed to Maturity FGIC Security insured by the Financial Guaranty Insurance Company FHA Federal Housing Authority FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association FSA Security insured by Financial Security Assurance GNMA Government National Mortgage Association GO General Obligation LLC Limited Liability Company LOC Letter of Credit LP Limited Partnership MBIA Security insured by the Municipal Bond Insurance Association MTN Medium Term Note PLC Public Limited Company RB Revenue Bond REMIC Real Estate Mortgage Investment Conduit Ser Series STRIPS Separately Traded Registered Interest and Principal Security TBA To Be Announced (A) Step Bond -- The rate shown is the effective yield at time of purchase. (B) Securities sold within terms of a private placement memorandum, exempt from registration under section 144a of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors". (C) Variable rate security -- The rate shown is the rate in effect on May 31, 2003. (D) Zero Coupon Security -- The rate shown is the effective yield at the time of purchase. (E) Face amounts of foreign debt securities are shown in local currency unless otherwise indicated. (F) Prerefunded Security -- The maturity date shown is the prerefunded date. (G) Tri-Party Repurchase Agreement (H) Security purchased on a when-issued basis. (I) Security in default on interest and principal payments. Collectability of interest and principal may be in doubt due to the fact that the company is either in or contemplating bankruptcy. (J) Security in default on interest payments. Collectability of interest may be in doubt due to the fact that the company is either in or contemplating bankruptcy. (K) This security or a partial position of this security is on loan at May 31, 2003 (see note 8 in the Notes to the Financial Statements). The total value of securities on loan as of May 31, 2003 was $22,859,603, $68,708,669, $74,755,416, $22,563,841, $8,191,215 and $51,515,252 for the High Income, Investment Grade Bond, Limited-Term Federal Mortgage Securities, Short-Term Bond, Strategic Income and U.S. Government Securities Funds, respectively. (L) This security was purchased with cash collateral held from securities lending. The total value of such securities as of May 31, 2003 was $23,965,904, $70,907,730, $76,913,250, $23,290,065, $8,605,010 and $52,919,500 for the High Income, Investment Grade Bond, Limited-Term Federal Mortgage Securities, Short-Term Bond, Strategic Income and U.S. Government Securities Funds, respectively. (1) Flex Shares have a contingent deferred sales charge. For a description of a possible sales charge, see note 2 in the Notes to the Financial Statements. CURRENCY LEGEND (AUD) Australian Dollar (CAD) Canadian Dollar (EUR) Euro Dollar (GBP) British Pound (SEK) Swedish Krona 72 This page is intentionally left blank.
STATEMENTS OF OPERATIONS (000) - ------------------------------------------------------------------------------------------------------------------------------------ STI CLASSIC FIXED INCOME FUNDS FOR THE YEAR ENDED MAY 31, 2003 INVESTMENT FLORIDA GEORGIA HIGH INVESTMENT GRADE TAX-EXEMPT TAX-EXEMPT INCOME GRADE BOND TAX-EXEMPT BOND FUND BOND FUND FUND FUND BOND FUND ---------- ---------- ------- ---------- ---------- Income: Interest Income $ 7,167 $ 4,823 $ 9,003 $43,331 $ 7,273 Net Income from Securities Lending -- -- 28 242 -- Less: Foreign Taxes Withheld -- -- (3) -- -- ------- ------- ------- ------- ------- Total Income 7,167 4,823 9,028 43,573 7,273 ------- ------- ------- ------- ------- Expenses: Investment Advisory Fees 1,097 736 739 6,818 1,591 Administration Fees 117 78 64 635 148 Distribution Fees -- Investor Shares 11 5 -- 116 88 Distribution Fees -- Flex Shares 329 148 446 365 283 Transfer Agency Shareholder Servicing Fees 5 3 3 25 6 Custody Fees 4 3 4 29 5 Transfer Agency Fees -- Trust Shares 16 16 16 19 16 Transfer Agency Fees -- Investor Shares 13 13 -- 33 20 Transfer Agency Fees -- Flex Shares 20 15 48 52 23 Transfer Agency Out of Pocket Expenses 5 3 2 27 6 Printing Fees 5 3 4 23 7 Professional Fees 5 4 4 28 7 Registration Fees 4 4 2 30 7 Trustee Fees 2 1 1 9 2 Other Expenses 4 2 4 10 3 ------- ------- ------- ------- ------- Total Expenses 1,637 1,034 1,337 8,219 2,212 ------- ------- ------- ------- ------- Less: Investment Advisory Fees Waived (76) (51) (139) (193) (69) Distribution Fees Waived/Expenses Reimbursed -- Investor Shares (10) (12) -- (38) (20) Distribution Fees Waived -- Flex Shares (109) (56) (200) (87) (51) ------- ------- ------- ------- ------- Net Expenses 1,442 915 998 7,901 2,072 ------- ------- ------- ------- ------- Net Investment Income 5,725 3,908 8,030 35,672 5,201 ------- ------- ------- ------- ------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions: Net Realized Gain (Loss) on Securities Sold 2,798 551 (988) 23,215 9,776 Net Realized Loss on Forward Foreign Currencies and Foreign Currency Translations -- -- -- -- -- Net Change in Unrealized Appreciation on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in Foreign Currencies -- -- -- -- -- Net Change in Unrealized Appreciation on Investments 9,086 5,855 3,006 40,999 6,674 ------- ------- ------- ------- ------- Total Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions 11,884 6,406 2,018 64,214 16,450 ------- ------- ------- ------- ------- Net Increase in Net Assets from Operations $17,609 $10,314 $10,048 $99,886 $21,651 ======= ======= ======= ======= ======= Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 74
- ------------------------------------------------------------------------------------------------------------------------------------ LIMITED- TERM FEDERAL SHORT-TERM MORTGAGE MARYLAND U.S. TREASURY STRATEGIC SECURITIES MUNICIPAL SHORT-TERM SECURITIES INCOME FUND BOND FUND BOND FUND FUND FUND ---------- --------- --------- ------------- --------- Income: Interest Income $10,603 $2,621 $13,570 $6,448 $ 8,373 Net Income from Securities Lending 115 -- 174 -- 2 Less: Foreign Taxes Withheld -- -- -- -- (8) ------- ------ ------- ------ ------- Total Income 10,718 2,621 13,744 6,448 8,367 ------- ------ ------- ------ ------- Expenses: Investment Advisory Fees 2,031 409 2,213 1,534 989 Administration Fees 215 43 235 163 80 Distribution Fees -- Investor Shares 16 -- 11 19 -- Distribution Fees-- Flex Shares 868 268 305 1,075 638 Transfer Agency Shareholder Servicing Fees 8 2 9 6 3 Custody Fees 12 1 11 6 36 Transfer Agency Fees -- Trust Shares 16 16 17 16 16 Transfer Agency Fees -- Investor Shares 16 -- 15 17 -- Transfer Agency Fees -- Flex Shares 53 20 33 59 43 Transfer Agency Out of Pocket Expenses 10 1 10 7 4 Printing Fees 13 2 9 8 5 Professional Fees 14 2 11 8 5 Registration Fees 5 2 11 8 4 Trustee Fees 3 1 3 2 1 Other Expenses 12 1 9 2 4 ------- ------ ------- ------ ------- Total Expenses 3,292 768 2,902 2,930 1,828 ------- ------ ------- ------ ------- Less: Investment Advisory Fees Waived (156) (50) (162) (142) (116) Distribution Fees Waived/Expenses Reimbursed -- Investor Shares (13) -- (15) (16) -- Distribution Fees Waived -- Flex Shares (381) (25) (164) (670) (325) ------- ------ ------- ------ ------- Net Expenses 2,742 693 2,561 2,102 1,387 ------- ------ ------- ------ ------- Net Investment Income 7,976 1,928 11,183 4,346 6,980 ------- ------ ------- ------ ------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions: Net Realized Gain (Loss) on Securities Sold 2,377 832 (6,286) 2,689 866 Net Realized Loss on Forward Foreign Currencies and Foreign Currency Translations -- -- -- -- (4,173) Net Change in Unrealized Appreciation on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in Foreign Currencies -- -- -- -- 486 Net Change in Unrealized Appreciation on Investments 9,868 2,803 7,359 1,929 7,654 ------- ------ ------- ------ ------- Total Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions 12,245 3,635 1,073 4,618 4,833 ------- ------ ------- ------ ------- Net Increase in Net Assets from Operations $20,221 $5,563 $12,256 $8,964 $11,813 ======= ====== ======= ====== =======
- ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA U.S. INTERMEDIATE VIRGINIA GOVERNMENT MUNICIPAL MUNICIPAL SECURITIES FUND BOND FUND BOND FUND --------------- --------- --------- Income: Interest Income $12,496 $ 8,826 $3,034 Net Income from Securities Lending 67 -- -- Less: Foreign Taxes Withheld -- -- -- ------- ------- ------ Total Income 12,563 8,826 3,034 ------- ------- ------ Expenses: Investment Advisory Fees 1,931 1,368 445 Administration Fees 180 145 47 Distribution Fees -- Investor Shares 27 12 -- Distribution Fees-- Flex Shares 370 -- 150 Transfer Agency Shareholder Servicing Fees 7 2 2 Custody Fees 9 5 2 Transfer Agency Fees -- Trust Shares 17 16 16 Transfer Agency Fees -- Investor Shares 17 14 -- Transfer Agency Fees -- Flex Shares 39 -- 17 Transfer Agency Out of Pocket Expenses 8 10 2 Printing Fees 9 6 2 Professional Fees 9 7 2 Registration Fees 8 7 2 Trustee Fees 3 2 1 Other Expenses 3 1 -- ------- ------ ------ Total Expenses 2,637 1,595 688 ------- ------ ------ Less: Investment Advisory Fees Waived (85) -- -- Distribution Fees Waived/Expenses Reimbursed -- Investor Shares (14) (22) -- Distribution Fees Waived -- Flex Shares (64) -- (22) ------- ------ ------ Net Expenses 2,474 1,573 666 ------- ------ ------ Net Investment Income 10,089 7,253 2,368 ------- ------ ------ Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions: Net Realized Gain (Loss) on Securities Sold 3,921 2,169 896 Net Realized Loss on Forward Foreign Currencies and Foreign Currency Translations -- -- -- Net Change in Unrealized Appreciation on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in -- -- -- Net Change in Unrealized Appreciation on Investments 8,184 7,601 2,913 ------- ------ ------ Total Net Realized and Unrealized Gain on Investments and Foreign Currency Transactions 12,105 9,770 3,809 ------- ------- ------ Net Increase in Net Assets from Operations $22,194 $17,023 $6,177 ======= ======= ====== Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 75
STATEMENTS OF CHANGES IN NET ASSETS (000) - ------------------------------------------------------------------------------------------------------------------------------------ STI CLASSIC FIXED INCOME FUNDS FOR THE PERIODS ENDED MAY 31 FLORIDA TAX-EXEMPT GEORGIA TAX-EXEMPT BOND FUND BOND FUND HIGH INCOME FUND* ---------------------- --------------------- ---------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 05/31/03 05/31/02 ---------------------- --------------------- ---------------------- Operations: Net Investment Income $ 5,725 $ 4,830 $ 3,908 $ 4,060 $ 8,030 $ 2,785 Net Realized Gain (Loss) on Securities Sold 2,798 1,091 551 324 (988) (552) Net Change in Unrealized Appreciation (Depreciation) on Investments 9,086 1,774 5,855 1,585 3,006 (1,804) -------- -------- -------- -------- -------- ------- Increase in Net Assets from Operations 17,609 7,695 10,314 5,969 10,048 429 -------- -------- -------- -------- -------- ------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (4,598) (4,210) (3,399) (3,472) (4,271) (467) Investor Shares (203) (100) (87) (106) -- -- Flex Shares (920) (519) (421) (482) (3,759) (2,318) Realized Capital Gains: Trust Shares (625) (673) -- -- -- -- Investor Shares (26) (17) -- -- -- -- Flex Shares (154) (107) -- -- -- -- -------- -------- -------- -------- -------- ------- Total Dividends and Distributions (6,526) (5,626) (3,907) (4,060) (8,030) (2,785) -------- -------- -------- -------- -------- ------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 40,464 31,013 23,167 22,751 78,322 29,701 Reinvestment of Cash Distributions 934 994 576 726 2,263 138 Cost of Shares Redeemed (23,528) (20,777) (21,636) (19,584) (10,708) (642) -------- -------- -------- -------- -------- ------- Increase (Decrease) in Net Assets From Trust Share Transactions 17,870 11,230 2,107 3,893 69,877 29,197 -------- -------- -------- -------- -------- ------- Investor Shares: Proceeds from Shares Issued 9,924 225 435 273 -- -- Reinvestment of Cash Distributions 149 82 45 60 -- -- Cost of Shares Redeemed (5,146) (158) (842) (442) -- -- -------- -------- -------- -------- -------- ------- Increase (Decrease) in Net Assets From Investor Share Transactions 4,927 149 (362) (109) -- -- -------- -------- -------- -------- -------- ------- Flex Shares: Proceeds from Shares Issued 25,216 11,313 5,069 4,793 32,945 34,517 Reinvestment of Cash Distributions 854 472 359 394 2,357 1,447 Cost of Shares Redeemed (9,812) (2,936) (3,962) (5,271) (17,558) (7,049) -------- -------- -------- -------- -------- ------- Increase (Decrease) in Net Assets From Flex Share Transactions 16,258 8,849 1,466 (84) 17,744 28,915 -------- -------- -------- -------- -------- ------- Increase (Decrease) in Net Assets From Share Transactions 39,055 20,228 3,211 3,700 87,621 58,112 -------- -------- -------- -------- -------- ------- Total Increase (Decrease) in Net Assets 50,138 22,297 9,618 5,609 89,639 55,756 -------- -------- -------- -------- -------- ------- Net Assets: Beginning of Period 145,717 123,420 108,469 102,860 75,631 19,875 -------- -------- -------- -------- -------- ------- End of Period $195,855 $145,717 $118,087 $108,469 $165,270 $75,631 ======== ======== ======== ======== ======== =======
* Trust Shares were offered beginning on October 3, 2001. (1) See Note 7 in Notes to Financial Statements for additional information. Amounts designated as "--" are either $0 or have been rounded to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 76
- ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT GRADE INVESTMENT GRADE TAX- BOND FUND EXEMPT BOND FUND ----------------------- ---------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 ----------------------- ---------------------- Operations: Net Investment Income $ 35,672 $ 44,545 $ 5,201 $ 5,034 Net Realized Gain (Loss) on Securities Sold 23,215 1,297 9,776 5,568 Net Change in Unrealized Appreciation (Depreciation) on Investments 40,999 564 6,674 1,705 --------- --------- -------- -------- Increase in Net Assets from Operations 99,886 46,406 21,651 12,307 --------- --------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (37,781) (43,708) (4,282) (4,081) Investor Shares (1,060) (995) (441) (492) Flex Shares (1,273) (1,340) (476) (461) Realized Capital Gains: Trust Shares -- -- (6,535) (3,160) Investor Shares -- -- (802) (448) Flex Shares -- -- (1,092) (545) --------- --------- -------- -------- Total Dividends and Distributions (40,114) (46,043) (13,628) (9,187) --------- --------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 190,331 224,284 65,057 54,898 Reinvestment of Cash Distributions 15,210 17,242 3,476 2,870 Cost of Shares Redeemed (326,113) (215,665) (38,360) (45,160) --------- --------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions (120,572) 25,861 30,173 12,608 --------- --------- -------- -------- Investor Shares: Proceeds from Shares Issued 23,705 47,871 4,022 3,445 Reinvestment of Cash Distributions 968 866 1,017 765 Cost of Shares Redeemed (12,533) (49,146) (4,495) (2,704) --------- --------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions 12,140 (409) 544 1,506 --------- --------- -------- -------- Flex Shares: Proceeds from Shares Issued 21,399 19,999 13,844 9,733 Reinvestment of Cash Distributions 1,095 1,170 1,334 876 Cost of Shares Redeemed (23,304) (10,596) (8,216) (6,370) --------- --------- -------- -------- Increase (Decrease) in Net Assets From Flex Share Transactions (810) 10,573 6,962 4,239 --------- --------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions (109,242) 36,025 37,679 18,353 --------- --------- -------- -------- Total Increase (Decrease) in Net Assets (49,470) 36,388 45,702 21,473 --------- --------- -------- -------- Net Assets: Beginning of Period 943,496 907,108 194,223 172,750 --------- --------- -------- -------- End of Period $ 894,026 $ 943,496 $239,925 $194,223 ========= ========= ======== ========
- ------------------------------------------------------------------------------------------------------------------------------------ LIMITED-TERM FEDERAL MARYLAND MUNICIPAL MORTGAGE SECURITIES FUND BOND FUND ------------------------ ---------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 ------------------------ ---------------------- Operations: Net Investment Income $ 7,976 $ 4,910 $ 1,928 $ 1,629 Net Realized Gain (Loss) on Securities Sold 2,377 3,042 832 426 Net Change in Unrealized Appreciation (Depreciation) on Investments 9,868 1,531 2,803 439 --------- -------- -------- ------- Increase in Net Assets from Operations 20,221 9,483 5,563 2,494 --------- -------- -------- ------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (8,520) (5,246) (1,251) (1,105) Investor Shares (245) (47) -- -- Flex Shares (2,670) (253) (674) (522) Realized Capital Gains: Trust Shares (267) (192) (41) -- Investor Shares (9) (2) -- -- Flex Shares (111) (9) (30) -- --------- -------- -------- ------- Total Dividends and Distributions (11,822) (5,749) (1,996) (1,627) --------- -------- -------- ------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 226,297 94,324 19,146 12,044 Reinvestment of Cash Distributions 3,910 2,831 301 206 Cost of Shares Redeemed (80,208) (43,762) (24,605) (5,662) --------- -------- -------- ------- Increase (Decrease) in Net Assets From Trust Share Transactions 149,999 53,393 (5,158) 6,588 --------- -------- -------- ------- Investor Shares: Proceeds from Shares Issued 18,913 1,158 -- -- Reinvestment of Cash Distributions 228 40 -- -- Cost of Shares Redeemed (7,223) (500) -- -- --------- -------- -------- ------- Increase (Decrease) in Net Assets From Investor Share Transactions 11,918 698 -- -- --------- -------- -------- ------- Flex Shares: Proceeds from Shares Issued 160,430 13,389 9,395 13,615 Reinvestment of Cash Distributions 2,359 222 596 368 Cost of Shares Redeemed (14,640) (1,279) (5,226) (3,171) --------- -------- -------- ------- Increase (Decrease) in Net Assets From Flex Share Transactions 148,149 12,332 4,765 10,812 --------- -------- -------- ------- Increase (Decrease) in Net Assets From Share Transactions 310,066 66,423 (393) 17,400 --------- -------- -------- ------- Total Increase (Decrease) in Net Assets 318,465 70,157 3,174 18,267 --------- -------- -------- ------- Net Assets: Beginning of Period 182,132 111,975 56,883 38,616 --------- -------- -------- ------- End of Period $ 500,597 $182,132 $ 60,057 $56,883 ========= ======== ======== =======
* Trust Shares were offered beginning on October 3, 2001. (1) See Note 7 in Notes to Financial Statements for additional information. Amounts designated as "--" are either $0 or have been rounded to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 77
STATEMENTS OF CHANGES IN NET ASSETS (000) STI CLASSIC FIXED INCOME FUNDS FOR THE PERIODS ENDED MAY 31 SHORT-TERM SHORT-TERM U.S. TREASURY BOND FUND SECURITIES FUND ---------------------------- --------------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 ---------------------------- --------------------------- Operations: Net Investment Income $ 11,183 $ 12,919 $ 4,346 $ 5,017 Net Realized Gain (Loss) on Securities Sold (6,286) (458) 2,689 1,115 Net Realized Loss on Foreign Currency Transactions and Forward Foreign Currency Contracts -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in Foreign Currencies -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments 7,359 (1,893) 1,929 79 --------- -------- -------- -------- Increase in Net Assets from Operations 12,256 10,568 8,964 6,211 --------- -------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (10,196) (12,038) (2,438) (3,562) Investor Shares (148) (210) (191) (91) Flex Shares (836) (657) (1,717) (1,364) Realized Capital Gains: Trust Shares -- -- (688) (278) Investor Shares -- -- (62) (7) Flex Shares -- -- (649) (119) --------- -------- -------- -------- Total Dividends and Distributions (11,180) (12,905) (5,745) (5,421) --------- -------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 117,712 184,897 42,670 47,056 Reinvestment of Cash Distributions 2,890 3,951 653 709 Cost of Shares Repurchased (124,705) (96,279) (30,621) (29,504) --------- -------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions (4,103) 92,569 12,702 18,261 --------- -------- -------- -------- Investor Shares: Proceeds from Shares Issued 7,799 6,458 19,530 10,025 Reinvestment of Cash Distributions 108 197 217 89 Cost of Shares Repurchased (7,986) (5,040) (9,039) (7,571) --------- -------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions (79) 1,615 10,708 2,543 --------- -------- -------- -------- Flex Shares: Proceeds from Shares Issued 18,740 20,914 95,244 69,886 Reinvestment of Cash Distributions 600 495 2,065 1,294 Cost of Shares Repurchased (13,276) (5,529) (41,630) (28,588) --------- -------- -------- -------- Increase in Net Assets From Flex Share Transactions 6,064 15,880 55,679 42,592 --------- -------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions 1,882 110,064 79,089 63,396 --------- -------- -------- -------- Total Increase (Decrease) in Net Assets 2,958 107,727 82,308 64,186 --------- -------- -------- -------- Net Assets: Beginning of Period 338,043 230,316 182,624 118,438 --------- -------- -------- -------- End of Period $ 341,001 $338,043 $264,932 $182,624 ========= ======== ======== ======== *Commenced operations on November 30, 2001. (1) See Note 7 in Notes to Financial Statements for additional information.
Amounts designated as "--" are either $0 or have been rounded to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 78
- ----------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT STRATEGIC INCOME FUND SECURITIES FUND ----------------------------- -------------------------- 06/01/02- 11/30/01*- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 ----------------------------- -------------------------- Operations: Net Investment Income $ 6,980 $ 1,326 $ 10,089 $ 9,915 Net Realized Gain (Loss) on Securities Sold 866 (97) 3,921 2,303 Net Realized Loss on Foreign Currency Transactions and Forward Foreign Currency Contracts (4,173) (10) -- -- Net Change in Unrealized Appreciation (Depreciation) on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in Foreign Currencies 486 (528) -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments 7,654 143 8,184 2,251 -------- ------- -------- -------- Increase in Net Assets from Operations 11,813 834 22,194 14,469 -------- ------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (3,391) (744) (9,284) (8,292) Investor Shares -- -- (271) (354) Flex Shares (3,676) (588) (1,246) (1,318) Realized Capital Gains: Trust Shares -- -- (548) (2,756) Investor Shares -- -- (13) (121) Flex Shares -- -- (91) (604) -------- ------- -------- -------- Total Dividends and Distributions (7,067) (1,332) (11,453) (13,445) -------- ------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 33,833 46,245 135,338 73,470 Reinvestment of Cash Distributions 607 146 3,379 4,296 Cost of Shares Repurchased (17,743) (2,433) (57,596) (58,868) -------- ------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions 16,697 43,958 81,121 18,898 -------- ------- -------- -------- Investor Shares: Proceeds from Shares Issued -- -- 16,742 2,911 Reinvestment of Cash Distributions -- -- 257 460 Cost of Shares Repurchased -- -- (16,515) (1,564) -------- ------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions -- -- 484 1,807 -------- ------- -------- -------- Flex Shares: Proceeds from Shares Issued 103,253 41,311 19,543 24,017 Reinvestment of Cash Distributions 2,635 442 1,155 1,689 Cost of Shares Repurchased (18,667) (2,006) (14,717) (15,321) -------- ------- -------- -------- Increase in Net Assets From Flex Share Transactions 87,221 39,747 5,981 10,385 -------- ------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions 103,918 83,705 87,586 31,090 -------- ------- -------- -------- Total Increase (Decrease) in Net Assets 108,664 83,207 98,327 32,114 -------- ------- -------- -------- Net Assets: Beginning of Period 83,207 -- 209,014 176,900 -------- ------- -------- -------- End of Period $191,871 $83,207 $307,341 $209,014 ======== ======= ======== ========
VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND VIRGINIA MUNICIPAL BOND FUND ----------------------------- ---------------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 ----------------------------- ---------------------------- Operations: Net Investment Income $ 7,253 $ 7,696 $ 2,368 $ 2,581 Net Realized Gain (Loss) on Securities Sold 2,169 2,170 896 624 Net Realized Loss on Foreign Currency Transactions and Forward Foreign Currency Contracts -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Forward Foreign Currency Contracts, Foreign Currencies and Translation of Other Assets and Liabilities Denominated in Foreign Currencies -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments 7,601 941 2,913 608 -------- -------- -------- -------- Increase in Net Assets from Operations 17,023 10,807 6,177 3,813 -------- -------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: Trust Shares (6,987) (7,547) (1,962) (2,247) Investor Shares (272) (245) -- -- Flex Shares -- -- (408) (339) Realized Capital Gains: Trust Shares (1,900) -- (136) -- Investor Shares (69) -- -- -- Flex Shares -- -- (40) -- -------- -------- -------- -------- Total Dividends and Distributions (9,228) (7,792) (2,546) (2,586) -------- -------- -------- -------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued 28,200 16,933 8,431 9,887 Reinvestment of Cash Distributions 1,656 108 185 145 Cost of Shares Repurchased (22,296) (23,387) (19,915) (11,071) -------- -------- -------- -------- Increase (Decrease) in Net Assets From Trust Share Transactions 7,560 (6,346) (11,299) (1,039) -------- -------- -------- -------- Investor Shares: Proceeds from Shares Issued 4,074 2,349 -- -- Reinvestment of Cash Distributions 249 183 -- -- Cost of Shares Repurchased (1,425) (1,584) -- -- -------- -------- -------- -------- Increase (Decrease) in Net Assets From Investor Share Transactions 2,898 948 -- -- -------- -------- -------- -------- Flex Shares: Proceeds from Shares Issued -- -- 6,447 7,568 Reinvestment of Cash Distributions -- -- 312 230 Cost of Shares Repurchased -- -- (4,047) (2,528) -------- -------- -------- -------- Increase in Net Assets From Flex Share Transactions -- -- 2,712 5,270 -------- -------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions 10,458 (5,398) (8,587) 4,231 -------- -------- -------- -------- Total Increase (Decrease) in Net Assets 18,253 (2,383) (4,956) 5,458 -------- -------- -------- -------- Net Assets: Beginning of Period 198,663 201,046 70,014 64,556 -------- -------- -------- -------- End of Period $216,916 $198,663 $ 65,058 $ 70,014 ======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 79
FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ STI CLASSIC FIXED INCOME FUNDS FOR THE YEARS ENDED MAY 31, (UNLESS OTHERWISE INDICATED) FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS NET ASSET NET REALIZED AND DIVIDENDS VALUE, NET UNREALIZED GAINS TOTAL FROM NET BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME --------- ---------- ---------------- ---------- ---------- FLORIDA TAX-EXEMPT BOND FUND Trust Shares 2003 $10.95 $0.40 $ 0.79 $ 1.19 $(0.40) 2002 10.79 0.40 0.22 0.62 (0.40) 2001 10.06 0.44 0.73 1.17 (0.44) 2000 10.59 0.44 (0.49) (0.05) (0.44) 1999 10.72 0.42 (0.02) 0.40 (0.42) Investor Shares 2003 $10.95 $0.38 $ 0.79 $ 1.17 $(0.38) 2002 10.79 0.38 0.22 0.60 (0.38) 2001 10.07 0.42 0.72 1.14 (0.42) 2000 10.60 0.42 (0.49) (0.07) (0.42) 1999 10.72 0.40 (0.01) 0.39 (0.40) Flex Shares 2003 $10.97 $0.32 $ 0.79 $ 1.11 $(0.32) 2002 10.81 0.32 0.22 0.54 (0.32) 2001 10.09 0.37 0.72 1.09 (0.37) 2000 10.62 0.36 (0.49) (0.13) (0.36) 1999 10.74 0.35 (0.01) 0.34 (0.35) GEORGIA TAX-EXEMPT BOND FUND Trust Shares 2003 $10.29 $0.38 $ 0.60 $ 0.98 $(0.38) 2002 10.10 0.39 0.19 0.58 (0.39) 2001 9.50 0.40 0.60 1.00 (0.40) 2000 10.03 0.40 (0.49) (0.09) (0.40) 1999 10.11 0.39 (0.06) 0.33 (0.39) Investor Shares 2003 $10.31 $0.35 $ 0.59 $ 0.94 $(0.35) 2002 10.12 0.37 0.19 0.56 (0.37) 2001 9.51 0.38 0.61 0.99 (0.38) 2000 10.05 0.38 (0.50) (0.12) (0.38) 1999 10.13 0.37 (0.06) 0.31 (0.37) Flex Shares 2003 $10.30 $0.30 $ 0.60 $ 0.90 $(0.30) 2002 10.11 0.32 0.19 0.51 (0.32) 2001 9.51 0.33 0.60 0.93 (0.33) 2000 10.04 0.33 (0.49) (0.16) (0.33) 1999 10.12 0.32 (0.06) 0.26 (0.32) HIGH INCOME FUND (A) Trust Shares 2003 $ 7.25 $0.61 $(0.09) $ 0.52 $(0.61) 2002(1) 7.37 0.39 (0.12) 0.27 (0.39) Flex Shares 2003 $ 7.25 $0.57 $(0.09) $ 0.48 $(0.57) 2002 7.69 0.55 (0.44) 0.11 (0.55) 2001 7.88 0.55 (0.19) 0.36 (0.55) 2000(2) 7.98 0.09 (0.10) (0.01) (0.09) For the years ended March 31: 2000 9.77 0.87 (1.85) (0.98) (0.81) 1999 9.99 0.51 0.04 0.55 (0.57)
TOTAL DISTRIBUTIONS DIVIDENDS NET ASSET FROM REALIZED TAX RETURN AND VALUE, END CAPITAL GAINS OF CAPITAL DISTRIBUTIONS OF PERIOD ------------- ---------- -------------- ---------- FLORIDA TAX-EXEMPT BOND FUND Trust Shares 2003 $(0.05) -- $(0.45) $11.69 2002 (0.06) -- (0.46) 10.95 2001 -- -- (0.44) 10.79 2000 (0.04) -- (0.48) 10.06 1999 (0.11) -- (0.53) 10.59 Investor Shares 2003 $(0.05) -- $(0.43) $11.69 2002 (0.06) -- (0.44) 10.95 2001 -- -- (0.42) 10.79 2000 (0.04) -- (0.46) 10.07 1999 (0.11) -- (0.51) 10.60 Flex Shares 2003 $(0.05) -- $(0.37) $11.71 2002 (0.06) -- (0.38) 10.97 2001 -- -- (0.37) 10.81 2000 (0.04) -- (0.40) 10.09 1999 (0.11) -- (0.46) 10.62 GEORGIA TAX-EXEMPT BOND FUND Trust Shares 2003 -- -- $(0.38) $10.89 2002 -- -- (0.39) 10.29 2001 -- -- (0.40) 10.10 2000 $(0.04) -- (0.44) 9.50 1999 (0.02) -- (0.41) 10.03 Investor Shares 2003 -- -- $(0.35) $10.90 2002 -- -- (0.37) 10.31 2001 -- -- (0.38) 10.12 2000 $(0.04) -- (0.42) 9.51 1999 (0.02) -- (0.39) 10.05 Flex Shares 2003 -- -- $(0.30) $10.90 2002 -- -- (0.32) 10.30 2001 -- -- (0.33) 10.11 2000 $(0.04) -- (0.37) 9.51 1999 (0.02) -- (0.34) 10.04 HIGH INCOME FUND (A) Trust Shares 2003 -- -- $(0.61) $ 7.16 2002(1) -- -- (0.39) 7.25 Flex Shares 2003 -- -- $(0.57) $ 7.16 2002 -- -- (0.55) 7.25 2001 -- -- (0.55) 7.69 2000(2) -- -- (0.09) 7.88 For the years ended March 31: 2000 -- -- (0.81) 7.98 1999 $(0.15) $(0.05) (0.77) 9.77 + Returns are for the period indicated and have not been annualized. Total return figures do not reflect applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. (1) Trust shares were offered on October 3, 2001. All ratios for the period have been annualized. (2) For the two month period ended May 31, 2000. All ratios for the period have been annualized. (A) On March 28, 2000, the ESC Strategic Income Fund exchanged all of its assets and liabilities for shares of the High Income Fund. The ESC Strategic Income 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 March 28, 2000 have been carried forward in these financial highlights. Subsequent to the merger, the High Income Fund changed its fiscal year end to May 31. Amounts designated as "--" are either $0 or have been rounded to $0.
80
- ------------------------------------------------------------------------------------------------------------------------------------ RATIO OF NET ASSETS, RATIO OF NET NET INVESTMENT TOTAL END OF EXPENSES TO INCOME TO RETURN + PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS -------- ------------ ------------------ ------------------ FLORIDA TAX-EXEMPT BOND FUND Trust Shares 2003 11.13% $147,423 0.71% 3.54% 2002 5.88 120,885 0.71 3.65 2001 11.84 107,867 0.71 4.19 2000 (0.48) 93,040 0.67 4.25 1999 3.72 118,609 0.67 3.90 Investor Shares 2003 10.89% $ 8,191 0.92% 3.29% 2002 5.66 2,935 0.92 3.44 2001 11.50 2,747 0.91 4.00 2000 (0.68) 2,875 0.87 4.05 1999 3.62 3,799 0.87 3.71 Flex Shares 2003 10.32% $ 40,241 1.42% 2.81% 2002 5.15 21,897 1.42 2.93 2001 10.95 12,806 1.41 3.49 2000 (1.17) 9,791 1.37 3.54 1999 3.13 14,762 1.37 3.21 GEORGIA TAX-EXEMPT BOND FUND Trust Shares 2003 9.64% $ 98,866 0.71% 3.55% 2002 5.81 91,356 0.71 3.79 2001 10.67 85,880 0.71 4.03 2000 (0.90) 81,160 0.67 4.13 1999 3.33 87,452 0.67 3.87 Investor Shares 2003 9.29% $ 2,630 0.92% 3.34% 2002 5.58 2,844 0.92 3.58 2001 10.56 2,901 0.91 3.83 2000 (1.26) 2,458 0.87 3.93 1999 3.13 3,676 0.87 3.67 Flex Shares 2003 8.86% $ 16,591 1.42% 2.84% 2002 5.07 14,269 1.42 3.08 2001 9.92 14,079 1.41 3.33 2000 (1.59) 8,827 1.37 3.43 1999 2.63 13,358 1.37 3.19 HIGH INCOME FUND (A) Trust Shares 2003 8.19% $100,852 0.78% 8.95% 2002(1) 3.70 28,767 0.82 8.27 Flex Shares 2003 7.52% $ 64,418 1.40% 8.43% 2002 1.46 46,864 1.40 7.35 2001 4.74 19,875 1.40 6.88 2000(2) (0.13) 3,075 1.40 6.57 For the years ended March 31: 2000 (10.84) 2,032 1.73 8.94 1999 5.64 7,230 1.91 5.09
RATIO OF RATIO OF NET INVESTMENT EXPENSES TO INCOME TO AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE ------------------- ------------------- --------- FLORIDA TAX-EXEMPT BOND FUND Trust Shares 2003 0.75% 3.50% 62% 2002 0.76 3.60 91 2001 0.76 4.14 59 2000 0.78 4.14 88 1999 0.77 3.80 72 Investor Shares 2003 1.13% 3.08% 62% 2002 1.37 2.99 91 2001 1.38 3.53 59 2000 1.36 3.56 88 1999 1.31 3.27 72 Flex Shares 2003 1.80% 2.43% 62% 2002 1.84 2.51 91 2001 1.89 3.01 59 2000 1.89 3.02 88 1999 1.88 2.70 72 GEORGIA TAX-EXEMPT BOND FUND Trust Shares 2003 0.76% 3.50% 17% 2002 0.76 3.74 23 2001 0.77 3.97 21 2000 0.77 4.03 19 1999 0.78 3.76 12 Investor Shares 2003 1.41% 2.85% 17% 2002 1.36 3.14 23 2001 1.42 3.32 21 2000 1.40 3.40 19 1999 1.25 3.29 12 Flex Shares 2003 1.84% 2.42% 17% 2002 1.84 2.66 23 2001 1.89 2.85 21 2000 1.95 2.85 19 1999 1.89 2.67 12 HIGH INCOME FUND (A) Trust Shares 2003 0.93% 8.80% 20% 2002(1) 0.97 8.12 59 Flex Shares 2003 2.00% 7.83% 20% 2002 2.02 6.73 59 2001 2.13 6.15 10 2000(2) 2.83 5.14 -- For the years ended March 31: 2000 2.95 7.72 24 1999 2.22 4.78 95
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 81 FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS FOR THE YEARS ENDED MAY 31, (UNLESS OTHERWISE INDICATED) FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS NET ASSET BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND VALUE, END OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD ---------- ---------- ---------------- ---------- ---------- ------------- ------------- ---------- INVESTMENT GRADE BOND FUND Trust Shares 2003 $10.24 $0.40 $0.76 $ 1.16 $(0.46) -- $(0.46) $10.94 2002 10.23 0.51 0.01 0.52 (0.51) -- (0.51) 10.24 2001 9.58 0.61 0.65 1.26 (0.61) -- (0.61) 10.23 2000 10.36 0.61 (0.78) (0.17) (0.61) -- (0.61) 9.58 1999 10.65 0.56 (0.11) 0.45 (0.56) $(0.18) (0.74) 10.36 Investor Shares 2003 $10.24 $0.38 $0.74 $ 1.12 $(0.42) -- $(0.42) $10.94 2002 10.23 0.48 0.01 0.49 (0.48) -- (0.48) 10.24 2001 9.58 0.57 0.65 1.22 (0.57) -- (0.57) 10.23 2000 10.36 0.57 (0.78) (0.21) (0.57) -- (0.57) 9.58 1999 10.65 0.52 (0.11) 0.41 (0.52) $(0.18) (0.70) 10.36 Flex Shares 2003 $10.25 $0.31 $0.76 $ 1.07 $(0.37) -- $(0.37) $10.95 2002 10.24 0.42 0.01 0.43 (0.42) -- (0.42) 10.25 2001 9.59 0.53 0.65 1.18 (0.53) -- (0.53) 10.24 2000 10.37 0.52 (0.78) (0.26) (0.52) -- (0.52) 9.59 1999 10.66 0.47 (0.11) 0.36 (0.47) $(0.18) (0.65) 10.37 INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 2003 $11.57 $0.30 $0.90 $ 1.20 $(0.30) $(0.46) $(0.76) $12.01 2002 11.38 0.34 0.46 0.80 (0.34) (0.27) (0.61) 11.57 2001 10.67 0.44 0.71 1.15 (0.44) -- (0.44) 11.38 2000 11.10 0.43 (0.29) 0.14 (0.43) (0.14) (0.57) 10.67 1999 11.40 0.43 0.10 0.53 (0.43) (0.40) (0.83) 11.10 Investor Shares 2003 $11.58 $0.25 $0.91 $ 1.16 $(0.25) $(0.46) $(0.71) $12.03 2002 11.39 0.29 0.46 0.75 (0.29) (0.27) (0.56) 11.58 2001 10.68 0.40 0.71 1.11 (0.40) -- (0.40) 11.39 2000 11.12 0.39 (0.30) 0.09 (0.39) (0.14) (0.53) 10.68 1999 11.41 0.38 0.11 0.49 (0.38) (0.40) (0.78) 11.12 Flex Shares 2003 $11.57 $0.20 $0.90 $ 1.10 $(0.20) $(0.46) $(0.66) $12.01 2002 11.38 0.24 0.46 0.70 (0.24) (0.27) (0.51) 11.57 2001 10.67 0.34 0.71 1.05 (0.34) -- (0.34) 11.38 2000 11.10 0.34 (0.29) 0.05 (0.34) (0.14) (0.48) 10.67 1999 11.40 0.33 0.10 0.43 (0.33) (0.40) (0.73) 11.10 LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 2003* $10.31 $0.29 $0.42 $ 0.71 $(0.42) $(0.01) $(0.43) $10.59 2002 10.01 0.43 0.32 0.75 (0.43) (0.02) (0.45) 10.31 2001 9.62 0.55 0.39 0.94 (0.55) -- (0.55) 10.01 2000 9.94 0.55 (0.32) 0.23 (0.55) -- (0.55) 9.62 1999 10.12 0.54 (0.06) 0.48 (0.54) (0.12) (0.66) 9.94 Investor Shares 2003* $10.29 $0.24 $0.44 $ 0.68 $(0.39) $(0.01) $(0.40) $10.57 2002 10.00 0.40 0.31 0.71 (0.40) (0.02) (0.42) 10.29 2001 9.60 0.53 0.40 0.93 (0.53) -- (0.53) 10.00 2000 9.93 0.52 (0.33) 0.19 (0.52) -- (0.52) 9.60 1999 10.11 0.51 (0.06) 0.45 (0.51) (0.12) (0.63) 9.93 Flex Shares 2003* $10.31 $0.21 $0.43 $ 0.64 $(0.35) $(0.01) $(0.36) $10.59 2002 10.02 0.37 0.31 0.68 (0.37) (0.02) (0.39) 10.31 2001 9.62 0.50 0.40 0.90 (0.50) -- (0.50) 10.02 2000 9.94 0.49 (0.32) 0.17 (0.49) -- (0.49) 9.62 1999 10.12 0.48 (0.06) 0.42 (0.48) (0.12) (0.60) 9.94 * Per share calculations were performed using average shares method. + Returns are for the period indicated and have not been annualized. Total return figures do not reflect applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Amounts designated as "--" are either $0 or have been rounded to $0. 82
- ------------------------------------------------------------------------------------------------------------------------------------ RATIO OF NET ASSETS, RATIO OF NET NET INVESTMENT TOTAL END OF EXPENSES TO INCOME TO RETURN + PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS --------- -------------- ------------------ ------------------ INVESTMENT GRADE BOND FUND Trust Shares 2003 11.61% $ 821,342 0.81% 3.92% 2002 5.18 886,471 0.81 4.81 2001 13.55 860,073 0.81 6.17 2000 (1.76) 998,596 0.77 6.05 1999 4.25 1,149,068 0.77 5.25 Investor Shares 2003 11.16% $ 34,874 1.22% 3.45% 2002 4.81 20,825 1.22 4.40 2001 13.09 21,244 1.21 5.77 2000 (2.17) 22,553 1.17 5.60 1999 3.86 34,913 1.17 4.87 Flex Shares 2003 10.61% $ 37,810 1.71% 3.01% 2002 4.27 36,200 1.71 3.90 2001 12.54 25,791 1.70 5.24 2000 (2.63) 20,056 1.66 5.14 1999 3.35 26,020 1.66 4.40 INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 2003 10.80% $ 185,485 0.81% 2.57% 2002 7.15 149,200 0.81 2.93 2001 10.93 134,139 0.81 3.93 2000 1.41 117,384 0.77 3.98 1999 4.67 154,123 0.77 3.75 Investor Shares 2003 10.42% $ 21,756 1.22% 2.16% 2002 6.71 20,436 1.22 2.51 2001 10.48 18,601 1.21 3.54 2000 0.90 19,443 1.17 3.59 1999 4.35 25,195 1.17 3.36 Flex Shares 2003 9.82% $ 32,684 1.70% 1.68% 2002 6.21 24,587 1.70 2.03 2001 9.97 20,010 1.69 3.04 2000 0.52 14,678 1.65 3.11 1999 3.78 16,518 1.65 2.86 LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 2003 6.99% $ 320,718 0.70% 2.79% 2002 7.53 164,624 0.70 3.72 2001 10.02 107,674 0.70 5.62 2000 2.33 125,355 0.67 5.60 1999 4.75 135,256 0.67 5.28 Investor Shares 2003 6.72% $ 13,668 0.96% 2.33% 2002 7.16 1,578 0.96 3.50 2001 9.84 849 0.95 5.39 2000 1.93 1,194 0.92 5.31 1999 4.47 2,214 0.92 5.03 Flex Shares 2003 6.33% $ 166,211 1.31% 1.97% 2002 6.83 15,930 1.31 2.88 2001 9.50 3,452 1.30 4.99 2000 1.71 1,706 1.27 4.97 1999 4.14 2,119 1.27 4.69
- ------------------------------------------------------------------------------------------------------------------------------------ RATIO OF RATIO OF NET INVESTMENT EXPENSES TO INCOME TO AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE ------------------- ------------------- --------- INVESTMENT GRADE BOND FUND Trust Shares 2003 0.83% 3.90% 137% 2002 0.83 4.79 123 2001 0.84 6.14 131 2000 0.84 5.98 202 1999 0.85 5.17 221 Investor Shares 2003 1.38% 3.29% 137% 2002 1.40 4.22 123 2001 1.42 5.56 131 2000 1.37 5.40 202 1999 1.36 4.68 221 Flex Shares 2003 1.97% 2.75% 137% 2002 1.96 3.65 123 2001 1.99 4.95 131 2000 1.99 4.81 202 1999 2.00 4.06 221 INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 2003 0.84% 2.54% 329% 2002 0.84 2.90 311 2001 0.85 3.89 285 2000 0.83 3.92 226 1999 0.87 3.65 224 Investor Shares 2003 1.36% 2.02% 329% 2002 1.36 2.37 311 2001 1.37 3.38 285 2000 1.33 3.43 226 1999 1.32 3.21 224 Flex Shares 2003 1.91% 1.47% 329% 2002 1.92 1.81 311 2001 1.96 2.77 285 2000 1.95 2.81 226 1999 2.03 2.48 224 LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 2003 0.75% 2.74% 117% 2002 0.75 3.67 410 2001 0.76 5.56 532 2000 0.79 5.48 384 1999 0.77 5.18 379 Investor Shares 2003 1.20% 2.09% 117% 2002 2.06 2.40 410 2001 2.28 4.06 532 2000 1.09 5.14 384 1999 1.52 4.43 379 Flex Shares 2003 1.80% 1.48% 117% 2002 1.98 2.21 410 2001 2.60 3.69 532 2000 2.38 3.86 384 1999 2.42 3.54 379
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 83
FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ STI CLASSIC FIXED INCOME FUNDS FOR THE YEARS ENDED MAY 31, (UNLESS OTHERWISE INDICATED) FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS NET ASSET BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND VALUE, END OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD --------- ---------- ---------------- ---------- ---------- ------------- ------------- ---------- MARYLAND MUNICIPAL BOND FUND (A) Trust Shares 2003 $10.32 $0.37 $0.63 $ 1.00 $(0.37) $(0.01) $(0.38) $10.94 2002 10.12 0.38 0.20 0.58 (0.38) -- (0.38) 10.32 2001 9.46 0.42 0.66 1.08 (0.42) -- (0.42) 10.12 2000 10.06 0.42 (0.60) (0.18) (0.42) -- (0.42) 9.46 1999 (1) 10.22 0.20 (0.15) 0.05 (0.20) (0.01) (0.21) 10.06 For the year ended November 30: 1998 9.95 0.42 0.27 0.69 (0.42) -- (0.42) 10.22 Flex Shares 2003 $10.34 $0.27 $0.63 $ 0.90 $(0.27) $(0.01) $(0.28) $10.96 2002 10.14 0.29 0.20 0.49 (0.29) -- (0.29) 10.34 2001 9.48 0.33 0.66 0.99 (0.33) -- (0.33) 10.14 2000 10.08 0.33 (0.60) (0.27) (0.33) -- (0.33) 9.48 1999 (1) 10.24 0.15 (0.15) -- (0.15) (0.01) (0.16) 10.08 For the year ended November 30: 1998 9.96 0.33 0.28 0.61 (0.33) -- (0.33) 10.24 SHORT-TERM BOND FUND Trust Shares 2003 $10.01 $0.33 $ 0.03 $ 0.36 $(0.33) -- $(0.33) $10.04 2002 10.04 0.46 (0.03) 0.43 (0.46) -- (0.46) 10.01 2001 9.65 0.56 0.39 0.95 (0.56) -- (0.56) 10.04 2000 9.91 0.53 (0.25) 0.28 (0.53) $(0.01) (0.54) 9.65 1999 10.05 0.51 (0.10) 0.41 (0.52) (0.03) (0.55) 9.91 Investor Shares 2003 $10.04 $0.31 $ 0.03 $ 0.34 $(0.31) -- $(0.31) $10.07 2002 10.06 0.44 (0.02) 0.42 (0.44) -- (0.44) 10.04 2001 9.67 0.54 0.39 0.93 (0.54) -- (0.54) 10.06 2000 9.93 0.51 (0.25) 0.26 (0.51) $(0.01) (0.52) 9.67 1999 10.07 0.49 (0.10) 0.39 (0.50) (0.03) (0.53) 9.93 Flex Shares 2003 $10.03 $0.28 $ 0.03 $ 0.31 $(0.28) -- $(0.28) $10.06 2002 10.06 0.40 (0.03) 0.37 (0.40) -- (0.40) 10.03 2001 9.67 0.52 0.39 0.91 (0.52) -- (0.52) 10.06 2000 9.93 0.48 (0.25) 0.23 (0.48) $(0.01) (0.49) 9.67 1999 10.07 0.47 (0.11) 0.36 (0.47) (0.03) (0.50) 9.93 SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 2003 $10.20 $0.22 $ 0.22 $ 0.44 $(0.22) $(0.06) $(0.28) $10.36 2002 10.13 0.37 0.10 0.47 (0.37) (0.03) (0.40) 10.20 2001 9.85 0.49 0.28 0.77 (0.49) -- (0.49) 10.13 2000 9.95 0.46 (0.10) 0.36 (0.46) -- (0.46) 9.85 1999 9.97 0.47 (0.02) 0.45 (0.47) -- (0.47) 9.95 Investor Shares 2003 $10.19 $0.20 $ 0.22 $ 0.42 $(0.20) $(0.06) $(0.26) $10.35 2002 10.13 0.35 0.09 0.44 (0.35) (0.03) (0.38) 10.19 2001 9.85 0.48 0.28 0.76 (0.48) -- (0.48) 10.13 2000 9.95 0.45 (0.10) 0.35 (0.45) -- (0.45) 9.85 1999 9.96 0.46 (0.01) 0.45 (0.46) -- (0.46) 9.95 Flex Shares 2003 $10.18 $0.17 $ 0.22 $ 0.39 $(0.17) $(0.06) $(0.23) $10.34 2002 10.11 0.33 0.10 0.43 (0.33) (0.03) (0.36) 10.18 2001 9.83 0.46 0.28 0.74 (0.46) -- (0.46) 10.11 2000 9.93 0.42 (0.10) 0.32 (0.42) -- (0.42) 9.83 1999 9.94 0.44 (0.02) 0.42 (0.43) -- (0.43) 9.93 (A) On May 24, 1999, the CrestFund Maryland Municipal Bond Fund exchanged all of its assets and certain liabilities for shares of the Maryland Municipal Bond Fund. The CrestFund Maryland Municipal Bond 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. + Returns are for the period indicated and have not been annualized. Total return figures do not reflect applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. (1) For the six month period ended May 31, 1999. All ratios for the period have been annualized.
84 - --------------------------------------------------------------------------------
RATIO OF NET ASSETS, RATIO OF NET NET INVESTMENT TOTAL END OF EXPENSES TO INCOME TO RETURN (+) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------------ ------------------ ------------------ MARYLAND MUNICIPAL BOND FUND (A) Trust Shares 2003 9.85% $ 30,501 0.70% 3.47% 2002 5.80 33,668 0.71 3.69 2001 11.59 26,526 0.72 4.16 2000 (1.78) 26,176 0.68 4.24 1999 (1) 0.48 29,658 0.70 3.83 For the year ended November 30: 1998 7.03 19,115 0.62 4.11 Flex Shares 2003 8.81% $ 29,556 1.64% 2.52% 2002 4.84 23,215 1.64 2.75 2001 10.59 12,090 1.63 3.24 2000 (2.66) 6,212 1.59 3.34 1999 (1) 0.05 7,723 1.59 2.94 For the year ended November 30: 1998 6.17 3,246 1.57 3.16 SHORT-TERM BOND FUND Trust Shares 2003 3.70% $302,708 0.70% 3.34% 2002 4.29 305,884 0.70 4.48 2001 10.13 215,458 0.70 5.71 2000 2.87 180,402 0.67 5.40 1999 4.06 209,904 0.67 5.12 Investor Shares 2003 3.47% $ 5,685 0.91% 3.09% 2002 4.19 5,767 0.91 4.28 2001 9.90 4,176 0.90 5.47 2000 2.67 1,446 0.87 5.20 1999 3.88 1,825 0.87 4.92 Flex Shares 2003 3.11% $ 32,608 1.26% 2.74% 2002 3.75 26,392 1.26 3.89 2001 9.60 10,682 1.25 5.09 2000 2.31 2,065 1.22 4.85 1999 3.50 2,341 1.22 4.55 SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 2003 4.31% $121,617 0.69% 2.07% 2002 4.69 107,169 0.70 3.57 2001 8.02 88,398 0.71 4.95 2000 3.75 72,570 0.67 4.70 1999 4.59 56,027 0.67 4.69 Investor Shares 2003 4.13% $ 15,558 0.86% 1.76% 2002 4.44 4,735 0.86 3.36 2001 7.87 2,179 0.85 4.81 2000 3.58 2,066 0.82 4.50 1999 4.54 2,799 0.82 4.54 Flex Shares 2003 3.88% $127,757 1.11% 1.59% 2002 4.29 70,720 1.11 3.09 2001 7.67 27,861 1.10 4.45 2000 3.34 5,391 1.07 4.26 1999 4.32 4,931 1.07 4.22
RATIO OF RATIO OF NET INVESTMENT EXPENSES TO INCOME TO AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE ------------------- ------------------- --------- MARYLAND MUNICIPAL BOND FUND (A) Trust Shares 2003 0.78% 3.39% 31% 2002 0.79 3.61 45 2001 0.82 4.06 42 2000 0.80 4.12 14 1999 (1) 1.37 3.16 19 For the year ended November 30: 1998 1.15 3.58 12 Flex Shares 2003 1.81% 2.35% 31% 2002 1.83 2.56 45 2001 1.97 2.90 42 2000 1.95 2.98 14 1999 (1) 1.98 2.55 19 For the year ended November 30: 1998 1.96 2.77 12 SHORT-TERM BOND FUND Trust Shares 2003 0.75% 3.29% 89% 2002 0.75 4.43 142 2001 0.76 5.65 87 2000 0.76 5.31 70 1999 0.77 5.02 108 Investor Shares 2003 1.28% 2.72% 89% 2002 1.26 3.93 142 2001 1.71 4.66 87 2000 1.75 4.32 70 1999 1.59 4.20 108 Flex Shares 2003 1.85% 2.15% 89% 2002 1.87 3.28 142 2001 2.17 4.17 87 2000 2.41 3.66 70 1999 2.33 3.44 108 SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 2003 0.75% 2.01% 140% 2002 0.76 3.51 117 2001 0.78 4.88 87 2000 0.79 4.58 50 1999 0.78 4.58 57 Investor Shares 2003 1.07% 1.55% 140% 2002 1.41 2.81 117 2001 1.56 4.10 87 2000 1.44 3.88 50 1999 1.34 4.02 57 Flex Shares 2003 1.79% 0.91% 140% 2002 1.81 2.39 117 2001 1.96 3.59 87 2000 2.04 3.29 50 1999 2.25 3.04 57 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 85
FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ STI CLASSIC FIXED INCOME FUNDS FOR THE YEARS ENDED MAY 31, (UNLESS OTHERWISE INDICATED) FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS NET ASSET BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND VALUE, END OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS OF PERIOD --------- ---------- ---------------- ---------- ---------- ------------- ------------- ---------- STRATEGIC INCOME FUND Trust Shares 2003 $ 9.80 $0.61 $ 0.20 $ 0.81 $(0.62) -- $(0.62) $ 9.99 2002 (2) 10.00 0.27 (0.20) 0.07 (0.27) -- (0.27) 9.80 Flex Shares 2003 $ 9.80 $0.57 $ 0.19 $ 0.76 $(0.57) -- $(0.57) $ 9.99 2002 (2) 10.00 0.25 (0.20) 0.05 (0.25) -- (0.25) 9.80 U.S. GOVERNMENT SECURITIES FUND Trust Shares 2003 $10.47 $0.44 $ 0.51 $ 0.95 $(0.46) $(0.03) $(0.49) $10.93 2002 10.38 0.54 0.26 0.80 (0.54) (0.17) (0.71) 10.47 2001 9.86 0.58 0.52 1.10 (0.58) -- (0.58) 10.38 2000 10.28 0.58 (0.42) 0.16 (0.58) -- (0.58) 9.86 1999 10.46 0.59 (0.18) 0.41 (0.59) -- (0.59) 10.28 Investor Shares 2003 $10.47 $0.40 $ 0.51 $ 0.91 $(0.42) $(0.03) $(0.45) $10.93 2002 10.38 0.50 0.26 0.76 (0.50) (0.17) (0.67) 10.47 2001 9.86 0.54 0.52 1.06 (0.54) -- (0.54) 10.38 2000 10.28 0.54 (0.42) 0.12 (0.54) -- (0.54) 9.86 1999 10.45 0.54 (0.17) 0.37 (0.54) -- (0.54) 10.28 Flex Shares 2003 $10.48 $0.34 $ 0.50 $ 0.84 $(0.36) $(0.03) $(0.39) $10.93 2002 10.38 0.45 0.27 0.72 (0.45) (0.17) (0.62) 10.48 2001 9.86 0.49 0.52 1.01 (0.49) -- (0.49) 10.38 2000 10.28 0.49 (0.42) 0.07 (0.49) -- (0.49) 9.86 1999 10.46 0.49 (0.18) 0.31 (0.49) -- (0.49) 10.28 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (A) Trust Shares 2003 $10.29 $0.36 $ 0.49 $ 0.85 $(0.36) $(0.10) $(0.46) $10.68 2002 10.14 0.40 0.15 0.55 (0.40) -- (0.40) 10.29 2001 9.58 0.42 0.56 0.98 (0.42) -- (0.42) 10.14 2000 10.20 0.43 (0.57) (0.14) (0.43) (0.05) (0.48) 9.58 1999(1) 10.44 0.21 (0.17) 0.04 (0.21) (0.07) (0.28) 10.20 For the year ended November 30: 1998 10.31 0.45 0.17 0.62 (0.45) (0.04) (0.49) 10.44 Investor Shares 2003 $10.29 $0.36 $ 0.49 $ 0.85 $(0.36) $(0.10) $(0.46) $10.68 2002 10.14 0.39 0.16 0.55 (0.40) -- (0.40) 10.29 2001 9.59 0.42 0.55 0.97 (0.42) -- (0.42) 10.14 2000 10.20 0.42 (0.56) (0.14) (0.42) (0.05) (0.47) 9.59 1999(1) 10.45 0.22 (0.18) 0.04 (0.22) (0.07) (0.29) 10.20 For the year ended November 30: 1998 10.31 0.46 0.17 0.63 (0.45) (0.04) (0.49) 10.45 VIRGINIA MUNICIPAL BOND FUND (A) Trust Shares 2003 $10.48 $0.39 $ 0.62 $ 1.01 $(0.39) $(0.03) $(0.42) $11.07 2002 10.29 0.41 0.19 0.60 (0.41) -- (0.41) 10.48 2001 9.64 0.45 0.65 1.10 (0.45) -- (0.45) 10.29 2000 10.43 0.45 (0.78) (0.33) (0.45) (0.01) (0.46) 9.64 1999(1) 10.68 0.22 (0.19) 0.03 (0.22) (0.06) (0.28) 10.43 For the year ended November 30: 1998 10.44 0.47 0.27 0.74 (0.47) (0.03) (0.50) 10.68 Flex Shares 2003 $10.53 $0.29 $ 0.63 $ 0.92 $(0.29) $(0.03) $(0.32) $11.13 2002 10.34 0.31 0.19 0.50 (0.31) -- (0.31) 10.53 2001 9.68 0.35 0.66 1.01 (0.35) -- (0.35) 10.34 2000 10.48 0.36 (0.79) (0.43) (0.36) (0.01) (0.37) 9.68 1999(1) 10.73 0.17 (0.18) (0.01) (0.18) (0.06) (0.24) 10.48 For the year ended November 30: 1998 10.48 0.37 0.28 0.65 (0.37) (0.03) (0.40) 10.73 + Returns are for the period indicated and have not been annualized. Total return figures do not reflect applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. (1) For the six month period ended May 31, 1999. All ratios for the period have been annualized. (2) Commenced operations on November 30, 2001. All ratios for the period have been annualized. (A) On May 24, 1999, the CrestFund Virginia Intermediate Municipal Bond and the CrestFund Virginia Municipal Bond Funds exchanged all of their assets and certain liabilities for shares of the Virginia Intermediate Municipal Bond and the Virginia Municipal Bond Funds, respectively. The CrestFund Virginia Intermediate Municipal Bond and the CrestFund Virginia Municipal Bond Funds are the accounting survivors in this transaction, and as a result, their basis of accounting for assets and liabilities and their operating results for the periods prior to May 24, 1999 have been carried forward in these financial highlights. Amounts designated as "--" are either $0 or have been rounded to $0.
86 - --------------------------------------------------------------------------------
RATIO OF NET ASSETS, RATIO OF NET NET INVESTMENT TOTAL END OF EXPENSES TO INCOME TO RETURN (+) PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------------ ------------------ ------------------ STRATEGIC INCOME FUND Trust Shares 2003 8.73% $ 61,906 0.91% 6.39% 2002 (2) 0.74 43,717 0.94 6.07 Flex Shares 2003 8.16% $129,965 1.43% 5.67% 2002 (2) 0.55 39,490 1.53 5.49 U.S. GOVERNMENT SECURITIES FUND Trust Shares 2003 9.25% $258,585 0.81% 4.00% 2002 7.90 168,609 0.82 5.09 2001 11.41 148,666 0.81 5.66 2000 1.63 85,420 0.77 5.77 1999 3.90 102,167 0.77 5.58 Investor Shares 2003 8.79% $ 9,333 1.22% 3.59% 2002 7.47 8,483 1.22 4.70 2001 10.95 6,617 1.21 5.21 2000 1.19 1,407 1.17 5.34 1999 3.56 2,534 1.17 5.17 Flex Shares 2003 8.14% $ 39,423 1.73% 3.10% 2002 7.06 31,922 1.73 4.17 2001 10.45 21,617 1.72 4.71 2000 0.70 7,750 1.68 4.85 1999 2.99 11,520 1.68 4.66 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (A) Trust Shares 2003 8.43% $206,432 0.75% 3.45% 2002 5.52 191,406 0.75 3.86 2001 10.39 194,849 0.73 4.23 2000 (1.31) 202,209 0.76 4.35 1999(1) 0.42 240,083 0.84 4.12 For the year ended November 30: 1998 6.10 243,606 0.79 4.33 Investor Shares 2003 8.38% $ 10,484 0.79% 3.40% 2002 5.47 7,257 0.79 3.82 2001 10.23 6,197 0.76 4.20 2000 (1.24) 6,808 0.79 4.33 1999(1) 0.35 7,706 0.79 4.17 For the year ended November 30: 1998 6.19 7,899 0.79 4.33 VIRGINIA MUNICIPAL BOND FUND (A) Trust Shares 2003 9.86% $ 48,102 0.77% 3.67% 2002 5.90 56,586 0.77 3.90 2001 11.51 56,573 0.77 4.40 2000 (3.18) 48,980 0.74 4.53 1999(1) 0.27 31,939 0.76 4.20 For the year ended November 30: 1998 7.19 29,252 0.69 4.41 Flex Shares 2003 8.89% $ 16,956 1.70% 2.71% 2002 4.93 13,428 1.70 2.97 2001 10.58 7,983 1.69 3.47 2000 (4.13) 5,367 1.65 3.61 1999(1) (0.16) 6,939 1.65 3.32 For the year ended November 30: 1998 6.24 3,697 1.64 3.46
RATIO OF RATIO OF NET INVESTMENT EXPENSES TO INCOME TO AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE ------------------- ------------------- --------- STRATEGIC INCOME FUND Trust Shares 2003 1.01% 6.29% 52% 2002 (2) 1.04 5.97 43 Flex Shares 2003 2.04% 5.06% 52% 2002 (2) 2.07 4.95 43 U.S. GOVERNMENT SECURITIES FUND Trust Shares 2003 0.84% 3.97% 150% 2002 0.85 5.06 262 2001 0.85 5.62 207 2000 0.84 5.70 29 1999 0.88 5.47 19 Investor Shares 2003 1.45% 3.36% 150% 2002 1.40 4.52 262 2001 1.83 4.59 207 2000 2.14 4.37 29 1999 1.60 4.74 19 Flex Shares 2003 1.93% 2.90% 150% 2002 1.93 3.97 262 2001 2.04 4.39 207 2000 2.28 4.25 29 1999 2.08 4.26 19 VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND (A) Trust Shares 2003 0.75% 3.45% 30% 2002 0.75 3.86 33 2001 0.75 4.21 32 2000 0.76 4.35 18 1999(1) 1.18 3.78 19 For the year ended November 30: 1998 0.97 4.15 24 Investor Shares 2003 1.07% 3.12% 30% 2002 1.11 3.50 33 2001 1.11 3.85 32 2000 0.94 4.18 18 1999(1) 0.93 4.03 19 For the year ended November 30: 1998 0.94 4.18 24 VIRGINIA MUNICIPAL BOND FUND (A) Trust Shares 2003 0.77% 3.67% 18% 2002 0.77 3.90 38 2001 0.78 4.39 60 2000 0.79 4.48 19 1999(1) 1.30 3.66 7 For the year ended November 30: 1998 1.10 4.00 28 Flex Shares 2003 1.85% 2.56% 18% 2002 1.88 2.79 38 2001 2.00 3.16 60 2000 2.08 3.18 19 1999(1) 1.91 3.06 7 For the year ended November 30: 1998 1.92 3.18 28 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 87 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 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 offering 41 funds as of May 31, 2003. The financial statements presented herein are those of the Florida Tax-Exempt Bond Fund, Georgia Tax-Exempt Bond Fund, High Income Fund, Investment Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund, Limited-Term Federal Mortgage Securities Fund, Maryland Municipal Bond Fund, Short-Term Bond Fund, Short-Term U.S. Treasury Securities Fund, Strategic Income Fund, U.S. Government Securities Fund, Virginia Intermediate Municipal Bond Fund and Virginia Municipal Bond Fund (each a "Fund" and collectively the "Funds"). The financial statements of the remaining funds are presented separately. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectus provides a description of the Funds' investment objectives, policies and strategies. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust: USE OF ESTIMATES -- The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect 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. SECURITY VALUATION -- Equity securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for equity securities traded on NASDAQ), including equity securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00 pm ET if an equity security's primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. Securities for which current market quotations are not readily available, of which there are none at May 31, 2003, are valued at their fair value as determined in good faith by, or in accordance with, procedures adopted by the Board of Trustees. 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 to maturity using the effective interest method. REPURCHASE AGREEMENTS -- In connection with transactions involving repurchase agreements, a third party custodian bank takes possession of the underlying securities ("collateral"), the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. In the event of default on the obligation to repurchase, each Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. 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. The maximum offering price per share for Investor shares of the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the Investment Grade Bond, the 88 - -------------------------------------------------------------------------------- Investment Grade Tax-Exempt Bond, the U.S. Government Securities, and the Virginia Intermediate Municipal Bond Funds is equal to the net asset value per shares plus a sales load of 3.75%. The maximum offering price per share for Investor shares of the Short-Term U.S. Treasury Securities Fund is equal to the net asset value per share plus a sales load of 1.00%. The maximum offering price per share for Investor shares of the Short-Term Bond Fund is equal to the net asset value per share plus a sales load of 2.00%. The maximum offering price per share for Investor shares of the Limited-Term Federal Mortgage Securities Fund is equal to the net asset value per share plus a sales load of 2.50%. Flex Shares of the Funds may be purchased at their net asset value. Shares redeemed within the first year after purchase will be subject to a contingent deferred sales charge ("CDSC") equal to 2.00% for either the net asset value of the shares at the time of purchase or the net asset value of the shares next calculated after the Fund receives the sale request, whichever is less. The CDSC will not apply to shares redeemed after such time. The Funds may charge a redemption fee up to 2% of redemption proceeds, which will automatically be paid to the Fund. SECURITIES PURCHASED ON A WHEN-ISSUED BASIS -- Delivery and payment for securities that have been purchased by a Fund on a forward commitment or when-issued basis can take place up to a month or more after the transaction date. During this period, such securities are subject to market fluctuations and the portfolio maintains, in a segregated account with its custodian, assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued or forward commitment basis may increase the volatility of a Fund's net asset value if the Fund makes such investments while remaining substantially fully invested. FOREIGN CURRENCY TRANSLATION -- The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following bases: (i) market value of investment securities, other assets and liabilities at the current rate of exchange; and (ii) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The Funds isolate the effect of fluctuations in foreign currency rates when determining the gain or loss upon sale or maturity of foreign currency denominated debt obligations for Federal income tax purposes. The Funds report gains and losses on foreign currency-related transactions as realized and unrealized gains and losses for financial reporting purposes, whereas such gains and losses are treated as ordinary income or loss for Federal income tax purposes. FORWARD FOREIGN CURRENCY CONTRACTS -- The Strategic Income Fund may enter into forward foreign currency contracts as hedges against either specific transactions, fund positions or anticipated fund positions. All commitments are "marked-to-market" daily at the applicable foreign exchange rate, and any resulting unrealized gains or losses are recorded currently. The Fund realizes gains and losses at the time forward contracts are extinguished. Unrealized gains or losses on outstanding positions in forward foreign currency contracts held at the close of the year are recognized as ordinary income or loss for Federal income tax purposes. The following forward foreign currency contracts were outstanding on May 31, 2003: IN UNREALIZED CONTRACTS EXCHANGE APPRECIATION TO DELIVER FOR (DEPRECIATION) MATURITY DATES (000) (000) (000) -------------- ---------- -------- -------------- FOREIGN CURRENCY SALES 08/20/03 AUD 2,000 $1,293 $ 7 08/20/03 AUD 2,000 1,293 18 08/20/03 CAD 2,000 1,450 13 08/20/03 CAD 2,000 1,450 12 06/23/03 EUR 8,500 9,990 (58) 06/23/03 GBP 2,700 4,418 (16) 06/23/03 SEK 29,000 3,731 (42) ---- $(66) ==== CURRENCY LEGEND AUD-- Australian Dollar CAD-- Canadian Dollar EUR-- Euro Dollar GBP-- British Pound SEK-- Swedish Krona TBA PURCHASE COMMITMENTS -- The Funds may enter into "TBA" (To Be Announced) purchase commitments to purchase securities for a fixed price at a future date beyond customary settlement time. TBA purchase commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to settlement date. Unsettled TBApurchase commitments are valued at the current market value of the underlying securities, generally according to the procedures described under "Security Valuation." 89 NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 MORTGAGE DOLLAR ROLLS -- The Funds may enter into mortgage dollar rolls (principally using TBA's) in which a Fund sells mortgage securities for delivery in the current month and simultaneously contracts to repurchase substantially similar securities at an agreed-upon price on a fixed date. The Funds account for such dollar rolls under the purchases and sales method and receive compensation as consideration for entering into the commitment to repurchase. The Funds must maintain liquid securities having a value not less than the repurchase price (including accrued interest) for such dollar rolls. The market value of the securities that the Funds are required to purchase may decline below the agreed upon repurchase price of those securities. The counterparty receives all principal and interest payments, including pre-payments, made in respect of a security subject to such a contract while it is with the holder. Mortgage dollar rolls may be renewed with a new purchase and repurchase price and a cash settlement made on settlement date without physical delivery of the securities subject to the contract. The Funds engage in dollar rolls for the purpose of enhancing its yield, principally by earning a negotiated fee. As of May 31, 2003, only the U.S. Government Securities Fund invested in mortgage dollar rolls. EXPENSES -- 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. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to shareholders, which are determined in accordance with Federal tax regulations, are recorded on the ex-dividend date. Dividends from net investment income for each of the Funds are declared daily and paid monthly. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. 3. Agreements and Other Transactions with Affiliates: INVESTMENT ADVISORY AGREEMENT -- The Trust and Trusco Capital Management, Inc. (the "Investment Adviser"), a wholly-owned subsidiary of SunTrust Banks, Inc., have entered into advisory agreements dated May 29, 1992, June 15, 1993, December 20, 1993, April 8, 2002, and last amended as of March 10, 2003. Under terms of the amended agreement, the Funds are charged the following annual fees based upon average daily net assets: MAXIMUM ANNUAL ADVISORY FEE -------- Florida Tax-Exempt Bond Fund 0.65% Georgia Tax-Exempt Bond Fund 0.65% High Income Fund 0.80% Investment Grade Bond Fund 0.74% Investment Grade Tax-Exempt Bond Fund 0.74% Limited-Term Federal Mortgage Securities Fund 0.65% Maryland Municipal Bond Fund 0.65% Short-Term Bond Fund 0.65% Short-Term U.S. Treasury Securities Fund 0.65% Strategic Income Fund 0.85% U.S. Government Securities Fund 0.74% Virginia Intermediate Municipal Bond Fund 0.65% Virginia Municipal Bond Fund 0.65% The Investment Adviser has voluntarily agreed to waive all or a portion of its fees (and to reimburse Fund expenses) in order to limit operating expenses. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. ADMINISTRATION AGREEMENT -- The Trust and SEI Investments Global Funds Services (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: 0.12% up to $1 billion, 0.09% on the next $4 billion, 0.07% on the next $3 billion, 0.065% on the next $2 billion and 0.06% for over $10 billion. DISTRIBUTION AGREEMENT -- The Trust and SEI Investments Distribution Co. (the "Distributor") are parties to a Distribution Agreement dated November 21, 1995. The Distributor will receive no fees for its distribution services under the agreement for the Trust Shares of any Fund. With respect to the Investor Shares and Flex 90 - -------------------------------------------------------------------------------- Shares, the Distributor receives amounts, pursuant to a Distribution Plan and (in the case of Flex Shares) a Distribution and Service Plan, as outlined in the table below. MAXIMUM FLEX SHARE MAXIMUM DISTRI- INVESTOR BUTION SHARE AND DISTRI- SERVICE BUTION FEE FEE ---------- ---------- Florida Tax-Exempt Bond Fund 0.18% 1.00% Georgia Tax-Exempt Bond Fund 0.18% 1.00% High Income Fund -- 1.00% Investment Grade Bond Fund 0.43% 1.00% Investment Grade Tax-Exempt Bond Fund 0.43% 1.00% Limited-Term Federal Mortgage Securities Fund 0.23% 1.00% Maryland Municipal Bond Fund -- 1.00% Short-Term Bond Fund 0.23% 1.00% Short-Term U.S. Treasury Securities Fund 0.18% 1.00% Strategic Income Fund -- 1.00% U.S. Government Securities Fund 0.38% 1.00% Virginia Intermediate Municipal Bond Fund 0.15% -- Virginia Municipal Bond Fund -- 1.00% The Distributor has voluntarily agreed to waive all or a portion of its fees (and to reimburse Fund expenses) in order to limit operating expenses. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. TRANSFER AGENCY AGREEMENTS -- 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 as amended April 16, 2003. The Trust and SunTrust Securities Inc. ("STS"), a wholly- owned subsidiary of SunTrust Banks, Inc., are parties to an agreement under which STS provides shareholder support and other account-related services. CUSTODIAN AGREEMENTS -- SunTrust Bank acts as custodian for all of the Funds except the Strategic Income Fund, which utilizes Brown Brothers Harriman & Co. as custodian. Prior to January 29, 2003, Bank of New York served as custodian for Strategic Income Fund. Fees of the custodians are paid on the basis of net assets and transaction costs of the Funds. The custodians play no role in determining the investment policies of the Funds or which securities are to be purchased or sold in the Funds. OTHER -- Certain officers of the Trust are also officers of the Administrator and/or the Distributor. Such officers are paid no fees by the Trust for serving as officers of the Trust. The Trust has entered into an agreement with the Distributor to act as an agent in placing repurchase agreements for the Trust. For the year ended May 31, 2003, the following Funds paid the Distributor through a reduction in the yield earned by the Funds on those repurchase agreements: FEES ------- Florida Tax-Exempt Bond Fund $ 188 Georgia Tax-Exempt Bond Fund 44 High Income Fund 535 Investment Grade Bond Fund 19,387 Investment Grade Tax-Exempt Bond Fund 4,267 Limited-Term Federal Mortgage Securities Fund 14,392 U.S. Government Securities Fund 1,634 4. Investment Transactions: The cost of purchases and the proceeds from sales of securities, excluding short-term investments and U.S. Government securities, for the year ended May 31, 2003, were as follows: PURCHASES SALES (000) (000) ------------- -------- Florida Tax-Exempt Bond Fund $118,707 $ 99,027 Georgia Tax-Exempt Bond Fund 19,970 17,907 High Income Fund 92,628 17,203 Investment Grade Bond Fund 617,496 639,048 Investment Grade Tax-Exempt Bond Fund 611,076 596,744 Maryland Municipal Bond Fund 20,599 17,906 Short-Term Bond Fund 138,244 140,416 Strategic Income Fund 73,432 9,576 U.S. Government Securities Fund 1,997 -- Virginia Intermediate Municipal Bond Fund 76,152 58,561 Virginia Municipal Bond Fund 11,664 19,132 The cost of purchases and proceeds from sales of U.S. Government securities were: PURCHASES SALES (000) (000) ------------- -------- Investment Grade Bond Fund $589,007 $663,393 Limited-Term Federal Mortgage Securities Fund 607,639 338,904 Short-Term Bond Fund 161,946 132,641 Short-Term U.S. Treasury Securities Fund 360,323 303,360 Strategic Income Fund 84,200 49,920 U.S. Government Securities Fund 445,627 372,560 5. Federal Tax Policies and Information: It is each Fund's intention to continue 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. The Funds may be subject to taxes imposed by countries in which they invest with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned. The Funds accrue such taxes when the related income is earned. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations, which may differ from accounting principles generally accepted in the United States of America. 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 91 NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to paid-in-capital, undistributed net investment income (loss), or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Accordingly, the following permanent differences, primarily attributable to the classification of short-term capital gains and ordinary income tax purposes, differing treatments for foreign currency transactions and realized gains (losses) on paydowns, have been reclassified to/from the following accounts: UNDISTRIBUTED NET ACCUMULATED INVESTMENT REALIZED INCOME/(LOSS) GAIN/(LOSS) (000) (000) -------------- ----------- Investment Grade Bond Fund $4,447 $(4,447) Limited-Term Federal Mortgage Securities Fund 3,461 (3,461) Strategic Income Fund (3,693) 3,693 U.S. Government Securities Fund 717 (717) These reclassifications have no effect on net assets or net asset value per share. The tax character of dividends and distributions paid during the years ended May 31, 2003 and May 31, 2002 were as follows (000):
ORDINARY TAX-EXEMPT LONG-TERM INCOME INCOME CAPITAL GAINS TOTALS 2003 2002 2003 2002 2003 2002 2003 2002 ------ ------ ------ ------ ------ ------ ------ ------ Florida Tax-Exempt Bond Fund $ 733 $ 389 $5,721 $4,786 $ 72 $ 451 $ 6,526 $ 5,626 Georgia Tax-Exempt Bond Fund -- -- 3,907 4,060 -- -- 3,907 4,060 High Income Fund 8,030 2,785 -- -- -- -- 8,030 2,785 Investment Grade Bond Fund 40,114 46,043 -- -- -- -- 40,114 46,043 Investment Grade Tax-Exempt Bond Fund 6,573 3,454 5,199 5,025 1,856 708 13,628 9,187 Limited-Term Federal Mortgage Securities Fund 11,822 5,547 -- -- -- 202 11,822 5,749 Maryland Municipal Bond Fund 40 2 1,925 1,625 31 -- 1,996 1,627 Short-Term Bond Fund 11,180 12,905 -- -- -- -- 11,180 12,905 Short-Term U.S. Treasury Securities Fund 5,476 5,411 -- -- 269 10 5,745 5,421 Strategic Income Fund 7,067 1,332 -- -- -- -- 7,067 1,332 U.S. Government Securities Fund 11,422 12,670 -- -- 31 775 11,453 13,445 Virginia Intermediate Municipal Bond Fund 59 17 7,247 7,775 1,922 -- 9,228 7,792 Virginia Municipal Bond Fund 3 1 2,367 2,585 176 -- 2,546 2,586
As of May 31, 2003, the components of Distributable Earnings/(Accumulated Losses) on a tax basis were as follows (000):
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL ORDINARY TAX-EXEMPT LONG-TERM LOSS INCOME INCOME CAPITAL GAIN CARRYFORWARDS ------------- ------------- ------------- ------------- Florida Tax-Exempt Bond Fund $ 946 $ 2 $1,119 $ -- Georgia Tax-Exempt Bond Fund -- 1 -- (600) High Income Fund 15 -- -- (1,097) Investment Grade Bond Fund 5 -- -- (30,672) Investment Grade Tax-Exempt Bond Fund 3,212 2 1,433 -- Limited-Term Federal Mortgage Securities Fund 1 -- -- -- Maryland Municipal Bond Fund -- -- 719 -- Short-Term Bond Fund 3 -- -- (11,420) Short-Term U.S. Treasury Securities Fund 771 -- 1,475 -- Strategic Income Fund (119) -- -- -- U.S. Government Securities Fund 441 -- 597 -- Virginia Intermediate Municipal Bond Fund -- 1 1,253 -- Virginia Municipal Bond Fund -- -- 665 --
POST- POST-OCTOBER OTHER OCTOBER CURRENCY UNREALIZED TEMPORARY LOSSES LOSSES APPRECIATION DIFFERENCES ------- ------------ ------------ ------------ Florida Tax-Exempt Bond Fund $ -- $ -- $13,846 $ (1) Georgia Tax-Exempt Bond Fund -- -- 10,514 -- High Income Fund (1,234) -- 986 (14) Investment Grade Bond Fund -- -- 52,365 -- Investment Grade Tax-Exempt Bond Fund -- -- 10,474 -- Limited-Term Federal Mortgage Securities Fund (1,674) -- 12,523 -- Maryland Municipal Bond Fund -- -- 3,943 -- Short-Term Bond Fund -- -- 8,509 -- Short-Term U.S. Treasury Securities Fund -- -- 3,531 -- Strategic Income Fund (394) (3,066) 7,755 72 U.S. Government Securities Fund -- -- 10,218 -- Virginia Intermediate Municipal Bond Fund -- -- 12,818 -- Virginia Municipal Bond Fund -- -- 5,051 --
Post-October loss represents losses realized on investments from November 1, 2002, through May 31, 2003 that, in accordance with Federal income tax regulations, the Fund may elect to defer and treat as having arisen in the following fiscal year. 92 - -------------------------------------------------------------------------------- For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized capital gains. The breakdown is as follows (000): EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES 2006 2007 2008 2009 2010 2011 ------- ------- ------- ------- ------- ------- Georgia Tax-Exempt Bond Fund $ -- $-- $ -- $ 600 $-- $ -- High Income Fund -- 17 707 21 -- 352 Investment Grade Bond Fund -- -- -- 30,672 -- -- Short-Term Bond Fund 271 -- 946 987 -- 9,217 During the year ended May 31, 2003, the Georgia Tax-Exempt Bond Fund, Investment Grade Bond Fund, Maryland Municipal Bond Fund and Virginia Municipal Bond Fund utilized capital loss carryforwards of $501,339, $10,302,501, $19,958 and $53,908, respectively. At May 31, 2003, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes are different from amounts reported for financial reporting purposes generally due to wash sales which cannot be used for Federal income tax purposes in the current year and have been deferred for use in future years. The aggregate gross unrealized appreciation and depreciation for securities held by the Funds at May 31, 2003, were as follows: AGGREGATE AGGREGATE FEDERAL GROSS GROSS NET TAX UNREALIZED UNREALIZED UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION (000) (000) (000) (000) -------- ------------ ------------ ------------ Florida Tax-Exempt Bond Fund $180,333 $13,846 $-- $13,846 Georgia Tax-Exempt Bond Fund 106,139 10,514 -- 10,514 High Income Fund 185,307 6,833 (5,847) 986 Investment Grade Bond Fund 942,488 52,398 (33) 52,365 Investment Grade Tax-Exempt Bond Fund 244,680 10,474 -- 10,474 Limited-Term Federal Mortgage Securities Fund 597,968 12,523 -- 12,523 Maryland Municipal Bond Fund 55,334 3,948 (5) 3,943 Short-Term Bond Fund 352,817 8,536 (27) 8,509 Short-Term U.S. Treasury Securities Fund 259,635 3,582 (51) 3,531 Strategic Income Fund 209,346 11,145 (3,348) 7,797 U.S. Government Securities Fund 362,821 10,258 (40) 10,218 Virginia Intermediate Municipal Bond Fund 201,465 12,842 (24) 12,818 Virginia Municipal Bond Fund 59,860 5,061 (10) 5,051 6. Concentrations/Risks: The prices of the Funds' fixed income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers, including governments. Generally, the Funds' fixed income securities will decrease in value if interest rates rise and vice versa, and the volatility of lower-rated securities is even greater than that of higher-rated securities. Also, longer-term securities are generally more volatile, so the average maturity or duration of these securities affects risk. The High Income and Strategic Income Funds invest in high yield corporate, government, and other debt instruments of U.S. and non-U.S. issuers. High yield securities involve greater risk of default or downgrade and are more volatile than investment grade securities. The High Income and Strategic Income Funds' investment in foreign countries poses additional risks since political and economic events unique to a country or region will affect those markets and their issuers. In addition, investments in foreign countries are generally denominated in a foreign currency. As a result, changes in the value of those currencies compared to the U.S. dollar may affect the value of a Fund's investment. The Florida Tax-Exempt Bond, Georgia Tax-Exempt Bond, Maryland Municipal Bond, Virginia Intermediate Municipal Bond, and Virginia Municipal Bond Funds' concentrations of investments in securities of issuers located in a specific region subjects each Fund to the economic and government policies of that region. The Investment Grade Bond, Limited-Term Federal Mortgage Securities, Short-Term Bond, and U.S. Government Securities Funds invest in securities whose value is derived from an underlying pool of mortgages or consumer loans. Prepayment of these loans shortens the stated maturity of these respective obligations and may result in a loss of premium, if any has been paid. Estimates of such prepayments are used to calculate expected maturity dates and a fund's average duration. Certain securities are backed by letters of credit from various financial institutions and financial guaranty assurance agencies. These letters of credit enhance the credit quality of the individual securities; however, if any of the financial institutions or financial guaranty assurance agencies' credit quality should deteriorate, it could cause the individual security's credit quality to change. Additionally, if any of the Funds concentrate their letters of credit in any one financial institution, the risk of credit quality deterioration increases. 93 NOTES TO FINANCIAL STATEMENTS (continued) - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 7. Capital Share Transactions: Capital Share Transactions for the Funds were as follows (000):
FLORIDA TAX-EXEMPT GEORGIA TAX-EXEMPT BOND FUND BOND FUND HIGH INCOME FUND (1) --------------------- ------------------------ ---------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 05/31/03 05/31/02 --------- --------- --------- --------- --------- --------- Trust Shares: Shares Issued 3,571 2,853 2,200 2,225 11,360 4,037 Shares Issued in Lieu of Cash Distributions 83 92 54 71 336 19 Shares Redeemed (2,081) (1,904) (2,049) (1,922) (1,571) (87) -------- ------- ------- ------- -------- ------- Net Trust Share Transactions 1,573 1,041 205 374 10,125 3,969 -------- ------- ------- ------- -------- ------- Investor Shares: Shares Issued 875 20 42 26 -- -- Shares Issued in Lieu of Cash Distributions 13 7 4 6 -- -- Shares Redeemed (455) (14) (80) (43) -- -- -------- ------- ------- ------- -------- ------- Net Investor Share Transactions 433 13 (34) (11) -- -- -------- ------- ------- ------- -------- ------- Flex Shares: Shares Issued 2,231 1,036 478 470 4,824 4,635 Shares Issued in Lieu of Cash Distributions 75 43 34 38 353 195 Shares Redeemed (866) (268) (375) (515) (2,641) (951) -------- ------- ------- ------- -------- ------- Net Flex Share Transactions 1,440 811 137 (7) 2,536 3,879 -------- ------- ------- ------- -------- ------- Net Change in Capital Shares 3,446 1,865 308 356 12,661 7,848 ======== ======= ======= ======= ======== ======= SHORT-TERM SHORT-TERM U.S. TREASURY STRATEGIC BOND FUND SECURITIES FUND INCOME FUND --------------------- ------------------------ ---------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 06/01/02- 11/30/01*- 05/31/03 05/31/02 05/31/03 05/31/02 05/31/03 05/31/02 --------- --------- --------- --------- --------- ---------- Trust Shares: Shares Issued 11,842 18,276 4,134 4,611 3,513 4,694 Shares Issued in Lieu of Cash Distributions 291 391 63 69 63 15 Shares Redeemed (12,539) (9,574) (2,965) (2,898) (1,840) (247) -------- ------- ------- ------- -------- ------- Net Trust Share Transactions (406) 9,093 1,232 1,782 1,736 4,462 -------- ------- ------- ------- -------- ------- Investor Shares: Shares Issued 780 633 1,894 982 -- -- Shares Issued in Lieu of Cash Distributions 11 20 21 9 -- -- Shares Redeemed (801) (493) (876) (742) -- -- -------- ------- ------- ------- -------- ------- Net Investor Share Transactions (10) 160 1,039 249 -- -- -------- ------- ------- ------- -------- ------- Flex Shares: Shares Issued 1,882 2,069 9,251 6,874 10,641 4,189 Shares Issued in Lieu of Cash Distributions 60 49 200 127 273 45 Shares Redeemed (1,333) (549) (4,041) (2,808) (1,940) (204) -------- ------- ------- ------- -------- ------- Net Flex Share Transactions 609 1,569 5,410 4,193 8,974 4,030 -------- ------- ------- ------- -------- ------- Net Change in Capital Shares 193 10,822 7,681 6,224 10,710 8,492 ======== ======= ======= ======= ======== =======
INVESTMENT GRADE INVESTMENT GRADE TAX- BOND FUND EXEMPT BOND FUND ----------------------- ------------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 --------- --------- --------- --------- Trust Shares: Shares Issued 18,197 21,691 5,507 4,771 Shares Issued in Lieu of Cash Distributions 1,450 1,662 300 252 Shares Redeemed (31,144) (20,837) (3,260) (3,920) -------- -------- -------- -------- Net Trust Share Transactions (11,497) 2,516 2,547 1,103 -------- -------- -------- -------- Investor Shares: Shares Issued 2,253 4,568 341 299 Shares Issued in Lieu of Cash Distributions 92 84 87 67 Shares Redeemed (1,192) (4,694) (383) (235) -------- -------- -------- -------- Net Investor Share Transactions 1,153 (42) 45 131 -------- -------- -------- -------- Flex Shares: Shares Issued 2,045 1,926 1,177 844 Shares Issued in Lieu of Cash Distributions 104 113 115 77 Shares Redeemed (2,229) (1,025) (696) (555) -------- -------- -------- -------- Net Flex Share Transactions (80) 1,014 596 366 -------- -------- -------- -------- Net Change in Capital Shares (10,424) 3,488 3,188 1,600 ======== ======== ======== ======== U.S. GOVERNMENT SECURITIES FUND VIRGINIA INTERMEDIATE MUNICIPAL BOND FUND -------------------------- ----------------------------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 --------- ----------- --------- --------- Trust Shares: Shares Issued 12,606 6,994 2,707 1,652 Shares Issued in Lieu of Cash Distributions 314 409 159 11 Shares Redeemed (5,359) (5,627) (2,131) (2,287) -------- --------- ------- ------- Net Trust Share Transactions 7,561 1,776 735 (624) -------- --------- ------- ------- Investor Shares: Shares Issued 1,551 275 389 231 Shares Issued in Lieu of Cash Distributions 24 44 24 18 Shares Redeemed (1,531) (147) (136) (155) -------- --------- ------- ------- Net Investor Share Transactions 44 172 277 94 -------- --------- ------- ------- Flex Shares: Shares Issued 1,819 2,268 -- -- Shares Issued in Lieu of Cash Distributions 107 161 -- -- Shares Redeemed (1,367) (1,465) -- -- -------- --------- ------- ------- Net Flex Share Transactions 559 964 -- -- -------- --------- ------- ------- Net Change in Capital Shares 8,164 2,912 1,012 (530) ======== ========= ======= =======
LIMITED-TERM FEDERAL MARYLAND MUNICIPAL MORTGAGE SECURITIES FUND BOND FUND ------------------------ ----------------------- 06/01/02- 06/01/01- 06/01/02- 06/01/01- 05/31/03 05/31/02 05/31/03 05/31/02 --------- --------- --------- --------- Trust Shares: Shares Issued 21,614 9,229 1,826 1,175 Shares Issued in Lieu of Cash Distributions 373 277 28 20 Shares Redeemed (7,664) (4,285) (2,329) (554) -------- -------- -------- -------- Net Trust Share Transactions 14,323 5,221 (475) 641 -------- -------- -------- -------- Investor Shares: Shares Issued 1,808 113 -- -- Shares Issued in Lieu of Cash Distributions 22 4 -- -- Shares Redeemed (690) (49) -- -- -------- -------- -------- -------- Net Investor Share Transactions 1,140 68 -- -- -------- -------- -------- -------- Flex Shares: Shares Issued 15,321 1,304 886 1,325 Shares Issued in Lieu of Cash Distributions 225 22 56 36 Shares Redeemed (1,396) (125) (491) (308) -------- -------- -------- -------- Net Flex Share Transactions 14,150 1,201 451 1,053 -------- -------- -------- -------- Net Change in Capital Shares 29,613 6,490 (24) 1,694 ======== ======== ======== ======== VIRGINIA MUNICIPAL BOND FUND --------------------------------- 06/01/02- 06/01/01- 05/31/03 05/31/02 --------- ---------- Trust Shares: Shares Issued 785 948 Shares Issued in Lieu of Cash Distributions 17 14 Shares Redeemed (1,857) (1,061) ------- --------- Net Trust Share Transactions (1,055) (99) ------- --------- Investor Shares: Shares Issued -- -- Shares Issued in Lieu of Cash Distributions -- -- Shares Redeemed -- -- ------- --------- Net Investor Share Transactions -- -- ------- --------- Flex Shares: Shares Issued 593 722 Shares Issued in Lieu of Cash Distributions 29 22 Shares Redeemed (373) (241) ------- --------- Net Flex Share Transactions 249 503 ------- --------- Net Change in Capital Shares (806) 404 ======= =========
* COMMENCED OPERATIONS ON NOVEMBER 30, 2001 (1) TRUST SHARES WERE OFFERED BEGINNING ON OCTOBER 3, 2001. 94&95 NOTES TO FINANCIAL STATEMENTS (concluded) - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 8. Securities Lending: Each Fund may lend portfolio securities to brokers, dealers and other financial organizations that meet capital and other credit requirements or other criteria established by the Trust's Board of Trustees. These loans may not exceed 33 1/3% of the total asset value of the Fund (including the loan collateral). No Fund will lend portfolio securities to its investment adviser, sub-adviser or their affiliates unless it has applied for and received specific authority to do so from the Securities and Exchange Commission. Loans of portfolio securities will be fully collateralized by cash. The value of the collateral is at least equal to the market value of the securities loaned. However, due to market fluctuations during the day, the value of securities loaned on a particular day may, during the course of the day, exceed the value of collateral. On each business day, the amount of collateral is adjusted based on the prior day's market fluctuations and the current day's lending activity. Income from lending activity is determined by the amount of interest earned on collateral, less any amounts payable to the borrowers of the securities and the lending agent. Lending securities involves certain risks, including the risk that the Fund may be delayed or prevented from recovering the collateral if the borrower fails to return the securities. Cash collateral received in connection with securities lending is invested in the Boston Global Investment Trust-Enhanced Portfolio. This investment consists of money market instruments including money market mutual funds registered under the Investment Company Act of 1940, commercial paper, repurchase agreements, U.S. Treasury Bills and U.S. agency obligations. 96 REPORT OF INDEPENDENT AUDITORS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 To the Board of Trustees and Shareholders of STI Classic Funds: In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Florida Tax-Exempt Bond Fund, Georgia Tax-Exempt Bond Fund, High Income Fund, Investment Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund, Limited-Term Federal Mortgage Securities Fund, Maryland Municipal Bond Fund, Short-Term Bond Fund, Short-Term U.S. Treasury Securities Fund, Strategic Income Fund, U.S. Government Securities Fund, Virginia Intermediate Municipal Bond Fund and Virginia Municipal Bond Fund (thirteen of the funds constituting STI Classic Funds, hereafter referred to as the "Funds") at May 31, 2003, the results of each of their operations for the year then ended, the changes in each of their net assets and the financial highlights for each of the two years (or periods) then ended and the financial highlights of High Income Fund for each of the two years ended March 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2003 for Strategic Income Fund by correspondence with the custodian and a broker, and physical inspection of securities at May 31, 2003 for all other funds, provide a reasonable basis for our opinion. The financial highlights for each of the three years (or periods) ended May 31, 2001 were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated July 18, 2001. The financial highlights of Maryland Municipal Bond Fund, Virginia Intermediate Municipal Bond Fund and Virginia Municipal Bond Fund for the year ended November 30, 1998 were audited by other independent accountants whose report dated January 15, 1999 expressed an unqualified opinion on those financial statements. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania July 24, 2003 97 TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS - -------------------------------------------------------------------------------- Information pertaining to the trustees of the Trust is set forth below. Trustees who are not deemed to be "interested persons" of the Trust as defined in the 1940 Act are referred to as "Independent Board Members." Trustees who are deemed to be "interested persons" of the Trust are referred to as "Interested Board Members." Messrs. Courts and Ridley are Trustees who may be deemed to be "interested" persons of the Trust.
- ------------------------------------------------------------------------------------------------------------------------------------ Term of Number of Portfolios Other Position(s) Office and in STI Classic Directorship Name, Address, Held with Length of Principal Occupation(s) Complex Overseen by Held by Age 1 the Trust Time Served 2 During Past 5 Years Board Member 3 Board Member 4 - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED BOARD MEMBERS 5 - ------------- RICHARD W. Trustee November, Chairman of the Board, Atlantic Investment 48 Current Trustee of COURTS, II 2001 Company, 1970 to the present. STI Classic Funds. 67 - ------------------------------------------------------------------------------------------------------------------------------------ CLARENCE H. RIDLEY 60 Trustee November, Chairman of the Board; Haverty Furniture 48 Current Trustee of 2001 Companies, 2001 to the present; Partner, King STI Classic Funds. and Spaulding LLP (law firm), 1971 to 2000. - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT BOARD MEMBERS - ------------- THOMAS Trustee May, 2000 President, Genuine Parts Company 48 Director, National GALLAGHER Wholesale Distribution, 1970 to the present. Service Industries; 55 Director, Oxford Industries. Current Trustee of STI Classic Funds. - ------------------------------------------------------------------------------------------------------------------------------------ F. WENDELL Trustee May, 1995 Retired. 48 Current Trustee on GOOCH the Board of 70 Trustees for the SEI Family of Funds, The Capitol Mutual Funds and STI Classic Funds. - ------------------------------------------------------------------------------------------------------------------------------------ JAMES O. Trustee May, 2000 President and Chief Executive Officer, Cox 48 Director, NCR; ROBBINS Communications, Inc., 1983 to the present. Director, Cox 60 Communications. Current Trustee of STI Classic Funds. - ------------------------------------------------------------------------------------------------------------------------------------ JONATHAN T. Trustee February, Retired. 48 Trustee, W.K. WALTON 1998 Kellogg Trust. 73 Current Trustee of STI Classic Funds. - ------------------------------------------------------------------------------------------------------------------------------------
1 Each trustee may be contacted by writing to c/o STI Classic Trust, SEI Investments Company, Oaks, PA 19456. 2 Each trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust. The president, treasurer and secretary shall hold office for a one year term and until their respective successors are chosen and qualified, or in each case until he or she sooner dies, resigns is removed, or becomes disqualified in accordance with the Trust's by-laws. 3 The "STI Classic Complex" consists of all registered investment companies for which Trusco Capital Management, Inc. serves as investment adviser. As of May 31, 2003, the STI Classic Complex consisted of 48 Funds. 4 Directorships of companies required to report to the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e., "public companies") or other investment companies registered under the 1940 Act. 5 Mr. Courts is deemed an interested trustee because of his directorships with affiliates of the Adviser. Mr. Ridley is deemed an interested trustee because of his material business relationships with the parent to the Adviser. 98 - -------------------------------------------------------------------------------- (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ Term of Number of Portfolios Other Position(s) Office and in STI Classic Directorship Name, Address, Held with Length of Principal Occupation(s) Complex Overseen by Held by Age the Trust Time Served During Past 5 Years Board Member Board Member - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS - -------- JAMES R. FOGGO President November, Vice President and Assistant Secretary of SEI N/A N/A One Freedom 2000 Investments since 1998. Associate, Paul Weiss, Valley Drive Rifkind, Wharton & Garrison, 1998;Associate, Oaks, PA 19456 Baker & McKenzie 1995-1998. 38 - ------------------------------------------------------------------------------------------------------------------------------------ TIMOTHY D. BARTO Vice November, Employed by SEI Investments since October 1999. N/A N/A One Freedom President 2001 Vice President and Assistant Secretary of the Valley Drive and Adviser, Administrator and Distributor since Oaks, PA 19456 Secretary December 1999. Associate at Dechert, Price 35 & Rhoads (1997-1999). - ------------------------------------------------------------------------------------------------------------------------------------ TODD B. CIPPERMAN Vice May, 2000 Senior Vice President and General Counsel of N/A N/A One Freedom President SEI Investments; Senior Vice President, General Valley Drive and Counsel and Secretary of the Adviser, the Oaks, PA 19456 Assistant Administrator and the Distributor since 2000. 37 Secretary Vice President and Assistant Secretary of SEI Investments, the Adviser, the Administrator and the Distributor, 1995-2000. - ------------------------------------------------------------------------------------------------------------------------------------ LYDIA A. GAVALIS Vice May, 1998 Vice President and Assistant Secretary of SEI N/A N/A One Freedom President Investments, the Adviser, the Administrator and Valley Drive and the Distributor since 1998. Assistant General Oaks, PA 19456 Assistant Counsel and Director of Arbitration, Philadelphia 38 Secretary Stock Exchange (1989-1998). - ------------------------------------------------------------------------------------------------------------------------------------ CHRISTINE M. Vice May, 2000 Employed by SEI Investments since November 1, N/A N/A MCCULLOUGH President 1999. Vice President and Assistant Secretary of the One Freedom and Adviser, the Administrator and the Distributor Valley Drive Assistant since December 1999. Associate at White and Oaks, PA 19456 Secretary Williams LLP, 1991-1999. 42 - ------------------------------------------------------------------------------------------------------------------------------------ SHERRY KAJDAN Vice February, Vice President and Assistant Secretary of SEI N/A N/A VETTERLEIN President 2000 Investments since January 2001. Shareholder/ One Freedom and Partner, Buchanan Ingersoll Professional Valley Drive Assistant Corporation (law firm) (1992-2000). Oaks, PA 19456 Secretary 40 - ------------------------------------------------------------------------------------------------------------------------------------
99 TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (CONCLUDED) - -------------------------------------------------------------------------------- (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ Term of Number of Portfolios Other Position(s) Office and in STI Classic Directorship Name, Address, Held with Length of Principal Occupation(s) Complex Overseen by Held by Age the Trust Time Served During Past 5 Years Board Member Board Member - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS (CONTINUED) - -------- WILLIAM E. Vice November, Vice President and Assistant Secretary of the N/A N/A ZITELLI, JR. President 2000 Administrator and Distributor since August 2000. One Freedom and Vice President, Merrill Lynch & Co. Asset Valley Drive Assistant Management Group (1998 - 2000). Associate at Oaks, PA 19456 Secretary Pepper Hamilton LLP (1997 - 1998). 34 - ------------------------------------------------------------------------------------------------------------------------------------ JENNIFER SPRATLEY Treasurer May, 2000 Funds Accounting Director, SEI Investments, 1999 - N/A N/A 530 East and present; Audit Manager, Ernst & Young LLP Swedesford Road CFO (1991-1999). Wayne, PA 19087 34 - ------------------------------------------------------------------------------------------------------------------------------------
100 NOTICE TO SHAREHOLDERS - -------------------------------------------------------------------------------- STI CLASSIC FIXED INCOME FUNDS MAY 31, 2003 (UNAUDITED) For shareholders that do not have a May 31, 2003 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 2003, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended May 31, 2003, each portfolio is designating the following items with regard to distributions paid during the year.
DIVIDENDS QUALIFYING LONG TERM QUALIFYING DIVIDEND (20% RATE) ORDINARY FOR CORPORATE INCOME CAPITAL GAIN INCOME TAX-EXEMPT TOTAL DIVIDENDS REC. (15% TAX RATE FUND DISTRIBUTION DISTRIBUTIONS INTEREST DISTRIBUTIONS DEDUCTION (1) FOR QDI) (2) - --------------------------------------------- ------------ ------------- ---------- ------------- --------------- ------------- Florida Tax-Exempt Bond Fund 1.12% 11.33% 87.55% 100.00% 0.00% 0.00% Georgia Tax-Exempt Bond Fund 0.00% 0.01% 99.99% 100.00% 0.00% 0.00% High Income Fund 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Investment Grade Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Investment Grade Tax-Exempt Bond Fund 13.70% 48.53% 37.77% 100.00% 0.00% 0.00% Limited-Term Federal Mortgage Securities Fund 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Maryland Municipal Bond Fund 1.55% 1.99% 96.46% 100.00% 0.00% 0.00% Short-Term Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Short-Term U.S. Treasury Securities Fund 4.63% 95.37% 0.00% 100.00% 0.00% 0.00% Strategic Income Fund 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% U.S. Government Securities Fund 0.28% 99.72% 0.00% 100.00% 0.00% 0.00% Virginia Intermediate Municipal Bond Fund 20.79% 0.62% 78.59% 100.00% 0.00% 0.00% Virginia Municipal Bond Fund 6.81% 0.12% 93.07% 100.00% 0.00% 0.00%
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE DIVIDENDS RECEIVED DEDUCTION AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY INCOME DISTRIBUTIONS." (2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING DIVIDEND INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003 AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY INCOME DISTRIBUTIONS." IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED FUNDS TO DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY THE LAW. 101 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 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. [STI Classic Logo Omitted] BACKED BY TRADITION. STRENGTHENED BY EXPERIENCE.SM STI-AR-002-0300 ITEM 2. CODE OF ETHICS. Not applicable -- only effective for annual reports for periods ending on or after July 15, 2003. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable -- only effective for annual reports for periods ending on or after July 15, 2003. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable -- only effective for annual reports for periods ending on or after December 15, 2003. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. (RESERVED) ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. (RESERVED) ITEM 9. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEMS 10. EXHIBITS. (a)(1) Not applicable. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit. - -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) STI Classic Funds By (Signature and Title)* /s/ James R. Foggo ------------------ James R. Foggo, President Date 07/25/03 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ James R. Foggo ------------------ James R. Foggo, President Date 07/25/03 By (Signature and Title)* /s/ Jennifer E. Spratley ------------------------ Jennifer E. Spratley, CFO Date 07/25/03 * Print the name and title of each signing officer under his or her signature. EX-99.302CERT 3 certification302_jf.txt STI CLASSIC FIXED INCOME 302 CERTIFICATION JF CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, James R. Foggo, certify that: 1. I have reviewed this report on Form N-CSR of STI Classic Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 25, 2003 /s/ James R. Foggo - ------------------ James R. Foggo President EX-99.302CERT 4 certification302_js.txt STI CLASSIC FIXED INCOME 302 CERTIFICATION JS CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Jennifer E. Spratley, certify that: 1. I have reviewed this report on Form N-CSR of STI Classic Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 25, 2003 /s/ Jennifer Spratley - --------------------- Jennifer E. Spratley CFO EX-99.906CERT 5 certification906_jf.txt STI CLASSIC FIXED INCOME 906 CERTIFICATION JF CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the President of STI Classic Funds (the "Funds"), with respect to the Form N-CSR for the period ended May 31, 2003 as filed with the Securities and Exchange Commission, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certifies that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Funds. Dated: July 25, 2003 /s/ James R. Foggo ------------------ James R. Foggo A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to STI Classic Funds and will be retained by STI Classic Funds and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.906CERT 6 certification906_js.txt STI CLASSIC FIXED INCOME 906 CERTIFICATION JS CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the Chief Financial Officer of STI Classic Funds (the "Funds"), with respect to the Form N-CSR for the period ended May 31, 2003 as filed with the Securities and Exchange Commission, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certifies that, to the best of my knowledge: 1. such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Funds. Dated: July 25, 2003 /s/ Jennifer E. Spratley ------------------------ Jennifer E. Spratley A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to STI Classic Funds and will be retained by STI Classic Funds and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----