-----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, LNGNO4ytx2lH2zuX327hmE7nKC4X2fHlB5SNnlgzYbIBMtOIL0lI8h9NNmlFrr2q k8hy2Gx3gXmYY5N+Xz+IQQ== 0000935069-98-000125.txt : 19980803 0000935069-98-000125.hdr.sgml : 19980803 ACCESSION NUMBER: 0000935069-98-000125 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980730 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-06557 FILM NUMBER: 98674178 BUSINESS ADDRESS: STREET 1: 2 OLIVER STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6109896602 MAIL ADDRESS: STREET 1: 530 E SWEDESFORD ROAD CITY: WAYNE STATE: PA ZIP: 19087-1693 N-30D 1 STI CLASSIC MONEY MARKET FUND ANNUAL REPORT ANNUAL - -------------------------------------------------------------------------------- FINANCIAL REPORT - -------------------------------------------------------------------------------- STI CLASSIC FUNDS - -------------------------------------------------------------------------------- A Family of Mutual Funds - -------------------------------------------------------------------------------- PRIME QUALITY MONEY MARKET FUND U.S. GOVERNMENT SECURITIES MONEY MARKET FUND TAX-EXEMPT MONEY MARKET FUND May 31, 1998 [Logo Omitted} STI CLASSIC PRIME QUALITY MONEY MARKET FUND ------------------------------------------- The investment objective of the STI Classic Prime Quality Money Market Fund (the "Fund") is to provide as high a level of current income as is consistent with the preservation of capital and liquidity by investing exclusively in high quality money market instruments. The investment discipline which we use in managing the Fund emphasizes adding incremental value through yield curve, sector and credit analysis. Investments are made in those sectors, credits, and segments of the yield curve within the universe of money market eligible securities which offer the most attractive risk/reward trade-off and current yield. The maturity structure and average maturity of the Fund are actively managed to maximize the yield of the Fund over time based on the current market rates and conditions and on our market outlook. The Federal Reserve did not raise the Federal Funds Rate during the fiscal year ending May 31, 1998. Yields for short-term money market securities and money market funds have fluctuated within a narrow range as the market outlook for further Fed Reserve action changed. During most of this period, the Fund maintained an extended average maturity in order to maximize the yield of the Fund. STI CLASSIC U.S. GOVERNMENT SECURITIES MONEY MARKET FUND -------------------------------------------------------- The investment objective of the STI Classic U.S. Government Securities Money Market Fund (the "Fund") is to provide as high a level of current income as is consistent with the preservation of capital and liquidity by investing exclusively in money market eligible securities. Eligible securities include U.S. Treasury securities, U.S. Government Subsidiary Corporation securities that are backed by the full faith and credit of the U.S. Government, and repurchase agreements ("repos") collateralized by U.S. Treasury obligations and U.S. Government Subsidiary Corporation securities. The investment discipline which is used in managing the Fund emphasizes adding incremental value through yield curve analysis. The maturity structure and average maturity of the Fund are actively managed to maximize the yield of the Fund over time based on the current market rates and conditions and our market outlook. The Federal Reserve did not raise the Federal Funds Rate during the fiscal year ending May 31, 1998. Yields for short-term money market securities and money market funds have fluctuated within a narrow range as the markets outlook for further Fed Reserve action changed. During most of this period, the Fund maintained an extended average maturity in order to maximize the yield of the Fund. /S/ Signature Omitted David S. Yealy Vice President 1 STI CLASSIC TAX-EXEMPT MONEY MARKET FUND ---------------------------------------- The STI Classic Tax-Exempt Money Market Fund (the "Fund") seeks to provide as high a level of current interest income exempt from regular federal income tax as is consistent with preserving capital and liquidity. The Fund invests in high quality, U.S. dollar-denominated municipal securities of issuers located in all fifty states, the District of Columbia, and Puerto Rico. During most of this period, the Fund maintained a shorter average maturity. However, we bought longer maturities when market conditions were advantageous in order to maximize the yield of the Fund. /S/ Signature Omitted Mary F. Cernilli Vice President 2 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 PRIME QUALITY MONEY MARKET FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ COMMERCIAL PAPER (23.2%) FINANCE (6.1%) Bank of New York 5.540%, 07/07/98 $20,645 $ 20,531 First Chicago 5.460%, 06/01/98 20,000 20,000 General Electric Capital 5.500%, 09/11/98 8,125 7,998 GMAC 5.500%, 06/12/98 20,000 19,966 KFW International 5.600%, 06/15/98 5,000 4,989 5.580%, 06/19/98 6,250 6,233 Prudential Funding 5.500%, 06/05/98 30,000 29,982 Transamerica 5.530%, 07/14/98 17,500 17,384 UBS Financial 5.700%, 06/01/98 12,495 12,495 ---------- 139,578 ---------- INDUSTRIAL (15.1%) Allied Signal 5.630%, 06/09/98 21,200 21,173 British Petroleum America 5.650%, 06/01/98 50,000 50,000 Dominion Semiconductor 5.560%, 07/20/98 35,000 34,735 5.570%, 07/23/98 19,000 18,847 5.580%, 07/23/98 20,000 19,839 Eaton 5.500%, 06/17/98 14,000 13,966 5.480%, 07/31/98 25,000 24,772 General Re 5.510%, 06/25/98 40,000 39,853 J.C. Penney 5.500%, 06/25/98 60,000 59,780 RTZ America 5.500%, 06/12/98 15,000 14,975 5.500%, 06/18/98 15,000 14,961 - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- COMMERCIAL PAPER--CONTINUED U.S. Borax 5.500%, 06/12/98 $16,000 $ 15,973 5.500%, 06/16/98 10,000 9,977 5.500%, 06/22/98 5,000 4,984 5.500%, 07/06/98 2,500 2,487 ---------- 346,322 ---------- UTILITIES (2.0%) GTE Funding 5.680%, 06/01/98 29,220 29,220 5.550%, 06/18/98 16,000 15,958 ---------- 45,178 ---------- Total Commercial Paper (Cost $531,078) 531,078 ---------- CORPORATE OBLIGATIONS (12.7%) FINANCE (10.7%) Associates Corporation of North America (C) 5.730%, 01/04/99 20,000 19,994 5.640%, 04/23/99 20,000 19,984 Bankers Trust, New York (A) (C) 5.602%, 02/10/99 25,000 24,997 5.679%, 02/19/99 25,000 24,998 Caterpillar Financial Service, MTN 6.960%, 06/01/98 5,000 5,000 6.040%, 03/01/99 3,300 3,306 Caterpillar Financial Service, MTN (C) 5.755%, 05/09/99 45,000 45,000 Ford Motor Credit, MTN (C) 5.660%, 11/09/98 13,800 13,787 General Electric Capital (C) 5.596%, 11/27/98 50,000 50,000 Household Finance 6.180%, 06/30/98 5,000 5,002 IBM Credit (C) 6.099%, 07/30/98 5,000 5,003 3 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 PRIME QUALITY MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CORPORATE OBLIGATIONS--CONTINUED International Lease Finance, MTN 8.250%, 10/19/98 $1,500 $ 1,513 6.570%, 11/16/98 5,000 5,018 John Deere Capital, MTN (C) 5.678%, 09/14/98 5,000 5,002 John Hancock Capital, MTN 6.260%, 08/13/98 2,000 2,001 Morgan Stanley Group, MTN 6.125%, 01/05/99 1,000 1,002 Morgan Stanley Group, MTN (C) 5.872%, 08/22/98 7,850 7,854 5.758%, 12/28/98 1,500 1,501 Paccar Financial, MTN 5.330%, 11/02/98 1,000 998 Toyota Motor Credit, MTN 6.375%, 08/05/98 3,759 3,760 ---------- 245,720 ---------- INDUSTRIAL (0.5%) Pet 5.750%, 07/01/98 1,800 1,800 Philip Morris 8.625%, 03/01/99 3,000 3,060 7.750%, 05/01/99 2,000 2,031 Texaco Capital, MTN 8.030%, 10/15/98 1,900 1,917 Walt Disney 15.000%, 12/14/98 2,000 2,095 ---------- 10,903 ---------- UTILITIES (1.5%) Bell Atlantic, MTN 5.300%, 09/01/98 3,200 3,195 Pacific Gas & Electric 5.375%, 08/01/98 5,290 5,285 Virginia Electric & Power 9.375%, 06/01/98 24,950 24,950 ---------- 33,430 ---------- - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- Total Corporate Obligations (Cost $290,053) $ 290,053 ---------- BANK NOTES (16.1%) American Express Centurion (C) 5.606%, 03/24/99 $45,000 45,000 Bank One, Dayton (C) 5.780%, 08/21/98 8,000 8,001 Comerica Bank (C) 5.695%, 10/21/98 50,000 49,992 CoreStates Bank (C) 5.602%, 07/30/98 10,000 10,000 Credit Suisse First Boston, New York (C) 5.725%, 10/27/98 50,000 50,000 FCC National Bank (C) 5.703%, 04/09/99 50,000 49,983 First National Bank, Chicago (C) 5.722%, 04/19/99 62,000 61,973 PNC Bank N.A. (C) 5.660%, 07/01/98 20,000 19,998 Northern Trust (C) 5.715%, 04/09/99 70,000 69,977 Wachovia Bank N.A. 5.810%, 10/08/98 1,000 1,000 5.600%, 03/08/99 3,500 3,498 ---------- Total Bank Notes (Cost $369,422) 369,422 ---------- U.S. GOVERNMENT AGENCY OBLIGATIONS (4.6%) Federal Farm Credit (C) 5.443%, 03/02/99 40,000 39,985 Federal Home Loan Bank 5.745%, 11/12/98 10,000 10,000 FNMA (C) (F) 0.000%, 02/18/99 6,020 5,785 SLMA, Callable 07/06/98 @ 100 (C) 5.365%, 02/08/99 5,000 4,995 SLMA (C) 5.595%, 04/01/99 45,000 44,986 ---------- 4 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ Total U.S. Government Agency Obligations (Cost $105,751) $ 105,751 ---------- CERTIFICATES OF DEPOSIT (25.2%) Bank America 5.625%, 06/18/98 $60,000 60,001 Bank America, Canada 5.570%, 07/28/98 10,000 10,000 Bankers Trust 5.610%, 06/22/98 20,000 20,000 Barclays Bank 5.800%, 04/29/99 50,000 49,974 Bayerische Landesbank (C) 5.666%, 04/21/99 62,000 61,972 Commerzbank (C) 5.720%, 04/14/99 25,000 24,990 5.725%, 04/14/99 40,000 39,986 Credit Suisse First Boston, New York (C) 5.795%, 04/14/99 25,000 25,000 Deutsche Bank (C) 5.715%, 04/14/99 50,000 49,979 Deutsche Bank AG, New York 5.640%, 03/23/99 18,000 17,986 National Westminster Bank, New York 5.820%, 05/06/99 59,000 58,969 Rabobank 5.750%, 04/27/99 50,000 49,978 Societe Generale, New York 5.580%, 02/10/99 25,000 24,997 5.800%, 04/01/99 35,000 34,990 Swiss Bank, New York 5.650%, 03/24/99 20,000 19,986 5.810%, 04/29/99 30,000 29,984 ---------- Total Certificates of Deposit (Cost $578,792) 578,792 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ASSET-BACKED SECURITIES (6.0%) Americredit Auto Receivable Trust, Ser 1997-D, Cl A1 5.800%, 11/05/98 $ 7,718 $ 7,718 Americredit Auto Receivable Trust, Ser 1998-B, Cl A1 5.629%, 06/12/99 29,500 29,500 Arcadia Auto Receivable Trust, Ser 1997-D, Cl A1 5.888%, 01/15/99 2,834 2,834 Arcadia Auto Receivable Trust, Ser 1998-A, Cl A1 5.628%, 03/15/99 19,643 19,643 Chase Manhattan Auto Owner Trust, Ser 1999-B, Cl A1 5.578%, 05/10/99 23,131 23,131 Key Auto Finance Trust, Ser 1997-2, Cl A1 5.835%, 01/05/99 12,644 12,644 TMS Auto Grantor Trust, Ser 1997-4, Cl A1 5.909%, 01/08/99 7,308 7,310 WFS Financial Owner Trust, Ser 1997-C, Cl A1 5.710%, 09/20/98 4,264 4,264 WFS Financial Owner Trust, Ser 1997-D, Cl A1 5.910%, 12/20/98 30,793 30,793 ---------- Total Asset-Backed Securities (Cost $137,837) 137,837 ---------- REPURCHASE AGREEMENTS (12.1%) Barclays 5.58%, dated 05/29/98, matures 06/01/98, repurchase price $108,814,139 (collateralized by FHLMC and FNMA obligations: total market value $110,938,837) (E) 108,764 108,764 5 STATEMENT OF NET ASSETS/SCHEDULE OF INVESTMENTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 PRIME QUALITY MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ REPURCHASE AGREEMENTS--CONTINUED Deutsche Bank 5.58%, dated 05/29/98, matures 06/01/98, repurchase price $50,707,894 (collateralized by FNMA obligations: total market value $51,698,292) (E) $50,684 $ 50,684 Greenwich 5.58%, dated 05/29/98, matures 06/01/98, repurchase price $10,313,338 (collateralized by FHLMC and FNMA obligations: total market value $10,514,868) (E) 10,309 10,309 Salomon Brothers 5.58%, dated 05/29/98, matures 06/01/98, repurchase price $89,995,939 (collateralized by FHLMC and FNMA obligations: total market value $91,754,760) (E) 89,954 89,954 Union Bank of Switzerland 5.58%, dated 05/29/98, matures 06/01/98, repurchase price $17,609,554 (collateralized by FNMA obligation: market value $17,956,938) (E) 17,601 17,601 ---------- Total Repurchase Agreements (Cost $277,312) 277,312 ---------- Total Investments (99.9%) (Cost $2,290,245) 2,290,245 ---------- OTHER ASSETS AND LIABILITIES, NET (0.1%) 1,805 ---------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Class (unlimited authorization -- no par value) based on 1,880,536,125 outstanding shares of beneficial interest $1,880,536 Fund shares of the Investor Class (unlimited authorization -- no par value) based on 411,869,991 outstanding shares of beneficial interest 411,870 Overdistribution of net investment income (27) Accumulated net realized loss on investments (329) ---------- Total Net Assets 100.0% $2,292,050 ========== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $1.00 ========== Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $1.00 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19. 6 ================================================================================ U.S. GOVERNMENT SECURITIES MONEY MARKET FUND - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (14.2%) U.S. Treasury Notes 5.500%, 02/28/99 $15,000 $ 14,996 6.375%, 05/15/99 40,000 40,258 ---------- Total U.S. Treasury Obligations (Cost $55,254) 55,254 ---------- REPURCHASE AGREEMENTS (85.8%) Barclays 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $20,823,948 (collateralized by U.S. Treasury Note: market value $21,231,348) (E) 20,814 20,814 Deutsche Bank 5.52%, dated 5/29/98, matures 06/01/98, repurchase price $20,200,660 (collateralized by U.S. Treasury Note and U.S. Treasury Bond: total market value $20,596,215) (E) 20,191 20,191 Greenwich 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $20,582,977 (collateralized by U.S. Government STRIPS: market value 20,985,820) (E) 20,574 20,574 Merrill Lynch 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $104,953,255 (collateralized by various GNMA obligations: total market value $107,007,565) (E) 104,905 104,905 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ Morgan Stanley 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $105,346,846 (collateralized by various GNMA obligations: total market value $107,908,600) (E) $105,298 $105,298 Salomon Brothers 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $20,534,527 (collateralized by U.S. Government STRIPS: market value $20,976,498) (E) 20,525 20,525 Swiss Bank 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $20,290,758 (collateralized by U.S. Treasury Note and U.S. Treasury Bond: total market value $20,697,104) (E) 20,282 20,282 Union Bank of Switzerland 5.52%, dated 05/29/98, matures 06/01/98, repurchase price $20,541,270 (collateralized by U.S. Treasury Bills: total market value $20,943,876) (E) 20,532 20,532 ---------- Total Repurchase Agreements (Cost $333,121) 333,121 ---------- Total Investments (89.0% of Net Assets) (Cost $388,375) 388,375 ---------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19. 7 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MUNICIPAL BONDS (99.7%) ALABAMA (1.7%) McIntosh, Industrial Development Board, Pollution Control, Ciba- Geigy Project, Ser A, RB, VRDN (B) (C) (D) 3.900%, 06/03/98 $3,500 $ 3,500 McIntosh, Industrial Development Board, Solid Waste Disposal, Ciba-Geigy Project, RB, VRDN (B) 3.800%, 06/03/98 5,400 5,400 Special Care Facilities, Montgomery Hospital, RB, VRDN (FGIC) (C) (D) 3.900%, 06/03/98 1,200 1,200 ---------- 10,100 ---------- ARIZONA (0.3%) Phoenix, Series 95-2, GO, VRDN (C) 3.950%, 06/01/98 1,400 1,400 ---------- ARKANSAS (0.2%) State, Development Financial Authority, Potlatch Projects, Ser A, RB, VRDN, AMT (B) (C) (D) 3.900%, 06/03/98 1,000 1,000 ---------- CALIFORNIA (1.3%) Contra Costa County, Multi-Family Mortgage, Delta Square Project, Ser A, RB, VRDN (B) (C) (D) 3.700%, 06/03/98 4,200 4,200 Higher Education Loan Authority, Student Loan Revenue, RB, VRDN (B) (C) (D) 4.000%, 07/01/98 2,000 2,000 Higher Education Loan Authority, Student Loan Revenue, Ser E-5, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/01/98 1,200 1,200 ---------- 7,400 ---------- - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- COLORADO (0.9%) North Glen, Industrial Development, Castle Garden Retirement Center, VRDN (B) (C) (D) 3.700%, 06/04/98 $1,200 $ 1,200 State, Ser A, RB, TRAN 4.500%, 06/26/98 4,000 4,002 ---------- 5,202 ---------- DELAWARE (2.4%) State, Economic Development Authority, Industrial Development, Delaware Clean Power Project, Ser A, RB, VRDN, AMT (B) (C) (D) 3.850%, 06/03/98 5,000 5,000 State, Economic Development Authority, Solid Waste-Sewer Facilities, Ciba Geigy Project, Ser A, VRDN (B) (C) 3.950%, 06/01/98 7,100 7,100 State, Educational Development Authority, VRDN (B) (C) (D) 4.075%, 06/04/98 1,875 1,875 ---------- 13,975 ---------- DISTRICT OF COLUMBIA (1.6%) District of Columbia, Ser B, TRAN (B) 4.500%, 09/30/98 7,000 7,014 District of Columbia, Ser C, TRAN (B) 5.000%, 09/30/98 2,200 2,208 ---------- 9,222 ---------- FLORIDA (2.4%) Citrus Park, Community Development, RB, VRDN (B) (C) (D) 3.900%, 06/03/98 1,500 1,500 8 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ FLORIDA--CONTINUED City of Jacksonville, Florida Pollution Control, Ser 1992, TECP 3.750%, 08/12/98 $ 2,700 $ 2,700 Dade County, Water & Sewer System, Ser 1994, RB, VRDN (FGIC) (C) (D) 3.900%, 06/03/98 10,000 10,000 ---------- 14,200 ---------- GEORGIA (6.0%) Cobb-Marietta, Coliseum & Exhibit Hall Authority, VRDN (MBIA) (C) (D) 4.020%, 06/04/98 3,145 3,145 Fulton County, Industrial Development Authority, American Red Cross Project, RB, VRDN (B) (C) (D) 3.850%, 06/04/98 1,300 1,300 Gordon County, Development Authority, Sara Lee Corporation, VRDN (C) (D) 3.850%, 06/04/98 1,400 1,400 Henry County, Water & Sewer Authority, VRDN (AMBAC) (C) (D) 4.020%, 06/04/98 3,710 3,710 Lafayette, Industrial Development Authority, Blue-Bird Project, Ser 1991, VRDN (B) (C) (D) 3.850%, 06/04/98 1,000 1,000 Marietta, Housing Finance Authority, Franklin Walk Apartments Project, VRDN (B) (C) 3.825%, 06/04/98 1,600 1,600 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ GEORGIA--CONTINUED Monroe County, Industrial Development Authority, Forsyth Inns Project, VRDN (B) (C) (D) 3.900%, 06/03/98 $2,525 $ 2,525 Municipal Electric Authority, TECP (B) 3.750%, 07/09/98 4,500 4,500 Municipal Electric Authority, VRDN (MBIA) (C) 4.020%, 06/04/98 4,675 4,675 State, GO 6.750%, 09/01/98 2,000 2,016 State, Municipal Electric Authority, RB, VRDN (B) (C) (D) 3.850%, 06/03/98 4,000 4,000 State, Municipal Electric Authority, RB, VRDN (FGIC) (C) (D) 4.020%, 06/04/98 3,000 3,000 Summerville, Development Authority, Ser 1997, RB, VRDN, AMT (B) (C) 4.000%, 07/02/98 2,000 2,000 ---------- 34,871 ---------- HAWAII (0.7%) State, GO, VRDN (MBIA) (C) 4.020%, 06/03/98 4,260 4,260 ---------- IDAHO (0.5%) Nez Pierce County, Pollution Control, Potlatch Project, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 2,000 2,000 3.800%, 06/04/98 1,000 1,000 ---------- 3,000 ---------- 9 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ILLINOIS (11.1%) Bloomington, Airport Authority, GO, VRDN (B) (C) (D) 3.850%, 06/03/98 $ 1,400 $ 1,400 Chicago, O'Hare International Airport (AMBAC) (D) 3.800%, 06/01/98 8,890 8,890 Hoffman Estates, Economic Development Project (AMBAC) 4.500%, 11/15/98 2,145 2,150 Oak Forest, Mode-Homewood Pool, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 10,000 10,000 Savanna, Industrial Development Authority, Metform Project, Ser A, RB, VRDN (B) (C) (D) 3.950%, 06/03/98 500 500 Savanna, Industrial Development Authority, Metform Project, Ser B, RB, VRDN (B) (C) (D) 3.950%, 06/03/98 1,400 1,400 State, Development Financial Authority, Chicago Symphony, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 5,000 5,000 State, Development Financial Authority, Museum Contemporary Art Project, RB, VRDN (C) (D) 3.800%, 06/03/98 4,800 4,800 State, Development Financial Authority, Pollution Control, Illinois Power, Ser A, RB, VRDN (B) (C) 3.900%, 06/03/98 5,000 5,000 State, Development Financial Authority, Derby Project, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/03/98 1,000 1,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ ILLINOIS--CONTINUED State, Educational Facilities Authority, Chicago Childrens Museum, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 $1,600 $ 1,600 State, Educational Facilities Authority, Museum of Science and Industry, RB, VRDN (B) (C) 3.800%, 06/04/98 5,800 5,800 State, Health Facilities Authority, RB, VRDN (C) 4.020%, 06/04/98 3,000 3,000 State, Health Facilities Authority, Advocate Health Care, Ser B, RB, VRDN (C) (D) 4.050%, 06/03/98 2,900 2,900 State, Health Facilities Authority, Health Care Project-A,RB, VRDN (B) (C) (D) 3.850%, 08/17/98 3,800 3,800 State, Health Facilities Authority, Streeterville Corporation, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 2,000 2,000 State, Health Facilities Authority, Streeterville Corporation, Ser A, RB, VRDN (B) (C) 3.800%, 06/03/98 1,500 1,500 State, Health Facilities Authority, University of Chicago Hospital Project, Ser C, RB, VRDN (MBIA) (C) (D) 3.850%, 06/03/98 4,000 4,000 ---------- 64,740 ---------- 10 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ INDIANA (3.9%) Allen County, Industrial Economic Development Authority, Mattel Power Wheels Project, RB, VRDN, AMT (C) (D) 4.150%, 06/03/98 $1,500 $ 1,500 Fort Wayne, Economic Development Authority, ND Tech Project, RB, VRDN, AMT (A) (B) (C) (D) 3.950%, 06/03/98 1,000 1,000 Indianapolis, Industrial Economic Development Authority, Allied Signal, RB, VRDN (A) (C) (D) 3.950%, 06/03/98 3,500 3,500 Indianapolis, Multi-Family Housing, RB, VRDN, AMT (B) (C) (D) 4.050%, 06/03/98 6,200 6,200 Michigan City, Industrial Economic Development, Performance Packaging, RB, VRDN, AMT (A) (B) (C) (D) 3.950%, 06/03/98 900 900 Princeton, Pollution Control, PSI Energy Project, RB, VRDN (B) (C) 3.900%, 06/01/98 2,800 2,800 Rockport County, Pollution Control, Aep Generating Company Project, Ser B, RB, VRDN (AMBAC) (C) (D) 4.000%, 06/01/98 700 700 State, Development Financial Authority, Culver Educational Facilities, RB, VRDN (B) (C) 3.800%, 06/03/98 2,000 2,000 State, Development Financial Authority, Dekko International Project, RB, VRDN (B) (C) (D) 4.000%, 06/04/98 610 610 - ------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------- INDIANA--CONTINUED State, Development Financial Authority, Educational Facility, Indiana Historical Society, RB, VRDN (B) (C) 3.800%, 06/03/98 $1,200 $ 1,200 State, Health Facility Financing Authority, Clarian Health Partners, Ser B, RB, VRDN (C) (D) 4.000%, 06/03/98 2,000 2,000 ---------- 22,410 ---------- IOWA (0.4%) West Des Moines, Commercial Development, Greyhound Lines Project, VRDN (B) (C) (D) 3.850%, 06/03/98 2,500 2,500 ---------- KENTUCKY (1.7%) Jefferson County, Industrial Building, Fisher-Klosterman Project, RB, VRDN, AMT (B) (C) (D) 4.000%, 06/04/98 2,335 2,335 Pendleton County, RB, VRDN (B) (C) (D) 3.950%, 07/01/98 3,400 3,400 State, Asset/Liability Common General Fund, Ser A, RB, TRAN 4.500%, 06/25/98 2,500 2,501 State, Economic Development, Hospital Facilities, RB, VRDN (B) (C) (D) 3.850%, 06/04/98 1,400 1,400 ---------- 9,636 ---------- LOUISIANA (2.2%) Plaqeumines, Port Facilities, International Marine Terminal Project, RB, VRDN (B) (C) (D) 3.750%, 09/15/98 1,000 1,000 11 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ LOUISIANA--CONTINUED Saint James Parish, Pollution Control Revenue, TECP 3.900%, 06/16/98 $5,000 $ 5,000 State, Offshore Terminal Authority, Deepwater Port, First Stage A-Loop Project, Ser A, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 2,000 2,000 State, Port Authority, Occidental Petroleum Project, VRDN (B) (C) (D) 3.850%, 06/03/98 4,500 4,500 ---------- 12,500 ---------- MARYLAND (2.4%) Baltimore County, Allied Signal Project, VRDN (B) (C) (D) 3.900%, 06/03/98 1,000 1,000 Baltimore County, Gas & Electric, TECP 3.300%, 06/04/98 4,000 4,000 3.800%, 06/04/98 100 100 State, Health & Higher Education Authority, Pooled Loan Program, Ser B, VRDN (B) (C) (D) 3.700%, 06/03/98 5,000 5,000 University of Maryland, Revolving Equipment Loan Program, Ser B, RB, VRDN (B) (C) 3.750%, 06/03/98 4,100 4,100 ---------- 14,200 ---------- MICHIGAN (4.2%) Delta County, Environmental Improvement Revenue, Escanaba Paper Project, RB, VRDN, AMT (B) (C) 4.000%, 06/01/98 2,500 2,500 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MICHIGAN--CONTINUED Oakland County, Economic Development Authority, Moody Family Ltd. Project, RB, VRDN, AMT (A) (B) (C) 3.900%, 06/03/98 $1,000 $ 1,000 State, Ser 1985, TECP 3.750%, 08/11/98 7,100 7,100 State, Housing Development Authority, RB, VRDN, AMT (B) (C) (D) 3.900%, 06/03/98 1,000 1,000 State, Housing Development Authority, Harbortown, RB, VRDN (B) (C) (D) 3.825%, 06/04/98 3,000 3,000 State, Industrial Development Authority, RB, VRDN (A) (B) (C) (D) 3.600%, 06/02/98 3,000 3,000 State, Municipal Bond Authority, Ser B 4.500%, 07/02/98 4,000 4,002 State, Strategic Fund Pollution Control, Dow Chemical, TECP 3.850%, 06/03/98 3,000 3,000 ---------- 24,602 ---------- MISSOURI (1.5%) Carthage, Industrial Development Authority, Schrieber Project, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/03/98 3,100 3,100 Saint Charles County, Industrial Development Authority, Casalon Apartment Project, Ser 95, RB, VRDN (B) (C) (D) 3.850%, 06/04/98 3,100 3,100 12 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ MISSOURI--CONTINUED State, Custody Receipt, Third Street Building Project, Ser A, VRDN (C) (D) 3.900%, 06/03/98 $ 2,000 $ 2,000 State, Environmental Improvement & Energy Resource Authority, Utilicorp United Project, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/03/98 700 700 ---------- 8,900 ---------- NEBRASKA (0.3%) Investment Finance Authority, Single Family Mortgage, Ser B, RB, VRDN (FGIC) (C) (D) 3.700%, 07/15/98 2,000 2,000 ---------- NEVADA (2.1%) Clark County, Airport Improvement Authority, Ser A-1, RB, VRDN (B) (C) (D) 3.900%, 06/03/98 4,200 4,200 Clark County, School District, VRDN (C) 3.920%, 06/04/98 8,000 8,000 ---------- 12,200 ---------- NEW HAMPSHIRE (1.0%) State, Housing Finance Authority, Multi-Family Housing, Fairways Project, RB, VRDN, AMT (B) (C) (D) 4.000%, 06/03/98 5,000 5,000 State, Pollution Control Authority, RB, VRDN (B) (C) (D) 3.900%, 06/03/98 800 800 ---------- 5,800 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ NEW JERSEY (1.7%) State, TECP 3.900%, 06/15/98 $10,000 $ 10,000 ---------- NEW MEXICO (2.0%) Educational Assistance Foundation, Student Loan Program, RB, VRDN (AMBAC) (C) 4.040%, 06/04/98 $2,720 2,720 State, TRAN 4.500%, 06/30/98 3,000 3,002 State, Ser A, TRAN 4.500%, 06/30/98 3,000 3,002 State, Financial Authority, Ser B, RB 3.400%, 01/01/99 2,840 2,840 ---------- 11,564 ---------- NEW YORK (6.2%) Long Island, Power Authority, Ser 3, TECP (B) 3.750%, 08/19/98 2,000 2,000 Long Island, Power Authority, Ser 4, TECP (B) 3.750%, 08/19/98 3,000 3,000 Nassau County, Ser B, TRAN 4.250%, 08/31/98 5,000 5,007 Nassau County, Ser C, TRAN 4.250%, 12/22/98 4,500 4,513 New York, Ser A, TRAN 4.500%, 06/30/98 4,000 4,003 Southeast Industrial Development, Unilock Project, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/03/98 6,200 6,200 State, Urban Development Corporation, Senior Lien, VRDN (C) 3.922%, 06/04/98 11,600 11,600 ---------- 36,323 ---------- 13 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ NORTH CAROLINA (1.5%) Mecklenburg County, Industrial Facilities & Pollution Control, Sterigenics International Project, RB, VRDN, AMT (A) (B) (C) (D) 3.950%, 06/03/98 $2,000 $ 2,000 State, Eastern Municipal Power Authority, TECP (B) 3.850%, 06/11/98 3,950 3,950 State, Educational Facilities, Guilford College, VRDN (B) (C) (D) 3.900%, 06/03/98 2,200 2,200 State, Housing Finance Agency, Ser F, RB, VRDN (B) (C) (D) 3.450%, 09/01/98 485 485 ---------- 8,635 ---------- NORTH DAKOTA (0.3%) Mercer County, Solid Waste Disposal Authority, United Power Project, RB, VRDN (B) (C) (D) 3.800%, 06/01/98 2,000 2,000 ---------- OHIO (6.8%) Cincinnati, Student Loan Funding, Ser A-1, VRDN 3.950%, 06/03/98 5,000 5,000 Lorraine County, Catholic Healthcare Partners, TECP 3.400%, 06/10/98 10,000 10,000 State, Air Quality Development Authority, JMG Limited Partnership, Ser A, RB, VRDN, AMT (B) (C) (D) 4.000%, 06/03/98 3,000 3,000 State, Higher Education Authority, Lake Erie Project, VRDN (B) (C) (D) 3.900%, 06/04/98 4,945 4,945 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ OHIO--CONTINUED State, Pollution Control Authority, Duquesne Project, RB, VRDN, AMT (B) (C) (D) 4.000%, 06/03/98 $ 3,000 $ 3,000 State, Solid Waste Disposal, USG Corporation Project, RB, VRDN (B) (C) (D) 3.700%, 06/03/98 13,700 13,700 ---------- 39,645 ---------- OKLAHOMA (0.3%) State, Water Resources, Broad Street Program, RB, VRDN (B) (C) (D) 3.550%, 09/01/98 1,400 1,400 ---------- OREGON (1.0%) Metropolitan Service District, Convention Center, Ser A, GO 5.500%, 07/01/98 1,000 1,001 Port of Saint Helens, Pollution Control, Portland General Electric, Ser A, RB, VRDN (B) (C) (D) 3.900%, 06/01/98 2,400 2,400 State, Housing and Community Service Department, Single Family Mortgage Program, Ser C, RB (D) 3.750%, 05/13/99 2,500 2,500 ---------- 5,901 ---------- PENNSYLVANIA (3.6%) Beaver County, Industrial Development Authority, Duquesne Light Company Project, Ser B, RB, VRDN (C) (D) 3.850%, 06/03/98 1,000 1,000 14 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ PENNSYLVANIA--CONTINUED Lackawanna County, VRDN (AMBAC) (C) 4.020%, 06/04/98 $ 3,585 $ 3,585 Philadelphia, Ser A, TRAN 4.500%, 06/30/98 10,000 10,004 State, Ser A, VRDN (C) (D) 3.920%, 06/04/98 6,500 6,500 ---------- 21,089 ---------- SOUTH CAROLINA (0.9%) York County, Pollution Control, Ser N-3, RB, VRDN (C) (D) 3.500%, 09/15/98 5,000 4,999 ---------- TENNESSEE (1.9%) Covington, Industrial Development Board, Charms Project, RB, VRDN, AMT (B) (C) (D) 3.950%, 06/03/98 3,000 3,000 Hamilton County, Industrial Development Board, Lease Rent, RB (FGIC) 5.100%, 09/01/98 500 501 Hamilton County, Industrial Development Board, Tennessee Aquarium Project, RB, VRDN (B) (C) (D) 3.900%, 06/04/98 3,000 3,000 Memphis-Shelby County, Industrial Development Board, Ponderosa Fibres American Project, RB, VRDN, AMT (A) (B) (C) (D) 4.000%, 06/04/98 1,400 1,400 Nashville & Davidson County, Industrial Development Authority, Multi-Family Mortgage, Chimneytop II Project, RB, VRDN (B) (C) (D) 3.850%, 06/03/98 1,325 1,325 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TENNESSEE--CONTINUED Nashville & Davidson County, Vanderbilt University, RB, VRDN (C) (D) 3.650%, 07/15/98 $ 2,000 $ 2,000 ---------- 11,226 ---------- TEXAS (14.1%) Brazos River Authority, AMT, TECP 3.850%, 06/03/98 3,950 3,950 Brazas River Authority, AMT, TECP (B) 3.650%, 06/05/98 6,000 6,000 Brazas River Authority, Pollution Control, AMT, TECP (B) 3.650%, 09/04/98 5,170 5,170 Brazos River Authority, Pollution Control, Ser 1988, AMT, TECP (B) 3.400%, 06/25/98 2,700 2,700 Brazos River Authority, Pollution Control, Utilities Electric, Ser C, RB, VRDN, AMT (AMBAC) (C) (D) 4.150%, 06/01/98 2,000 2,000 Brownsville, Utility Systems, Ser A, TECP 3.500%, 06/11/98 4,000 4,000 Georgetown, Higher Education Financing Authority, Southwestern University Project, Ser 1984, RB, VRDN (B) (C) (D) 3.900%, 06/03/98 2,000 2,000 Gulf Coast, Industrial Development Authority, Amoco Oil Project, RB, VRDN (C) (D) 3.800%, 06/01/98 1,000 1,000 Gulf Coast, Waste Disposal, Texwater Pollution Control, Amoco Oil - Amoco Chems, RB, VRDN (C) (D) 3.750%, 07/15/98 5,000 5,001 15 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND--CONTINUED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ TEXAS--CONTINUED Harris County, Health Facilities Authority, Memorial Hospital Project, Ser B, RB, VRDN (C) (D) 3.900%, 06/03/98 $ 1,500 $ 1,500 Harris County, Housing Finance Corporation, Ser 1985, RB, VRDN (C) (D) 4.075%, 06/04/98 700 700 Harris County, Industrial Development Authority, Lubrizol Project, RB, VRDN (C) (D) 3.850%, 06/03/98 1,600 1,600 Lone Star, Airport Improvement Authority, RB, VRDN (B) (C) (D) 4.000%, 06/01/98 1,700 1,700 Sabine, River Authority, Pollution Control, RB, VRDN (MBIA) (C) (D) 3.700%, 06/03/98 8,000 8,000 San Antonio, Gas Ser A, TECP 3.750%, 07/09/98 5,000 5,000 State, RB, VRDN (C) (D) 3.825%, 06/04/98 4,935 4,935 State, Ser A, TRAN 4.750%, 08/31/98 10,000 10,022 State, Higher Education Authority, RB, VRDN (MBIA) (C) (D) 4.000%, 06/03/98 5,000 5,000 State, Public Finance Authority, TECP 3.450%, 08/03/98 10,000 10,000 State, Veterans Housing Assistance, Ser A-1, GO, AMT 3.800%, 06/03/98 2,000 2,000 ---------- 82,278 ---------- - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ UTAH (3.0%) Carbon County, Pollution Control Authority, Pacificorp Project, RB, VRDN (AMBAC) (C) (D) 4.000%, 06/01/98 $ 1,600 $ 1,600 Intermountain Power Agency, TECP (AMBAC) 3.800%, 06/04/98 5,000 5,000 Intermountain Power Agency, Power Supply, Ser B, TECP 3.650%, 06/09/98 5,000 5,000 Intermountain Power Agency, Power Supply, Ser E, RB, VRDN (B) (C) (D) 3.450%, 09/15/98 1,000 1,000 Intermountain Power Agency, Power Supply, Ser F, RB, VRDN (B) (C) (D) 3.800%, 06/15/98 4,000 4,000 State, Water Finance Agency, Pooled Loan, Ser A, RB (MBIA) 4.050%, 10/01/98 500 500 ---------- 17,100 ---------- VIRGINIA (3.0%) Alexandria, Redevelopment & Housing Authority, Multi-Family First Mortgage, Goodwin Project, Ser B, RB, VRDN (A) (B) (C) (D) 4.000%, 06/01/98 2,000 2,000 Chesterfield County, Industrial Development Authority, Allied Signal Project, RB, VRDN (C) 3.950%, 06/03/98 3,000 3,000 Commonwealth, Ser 1994, VRDN (C) (D) 4.020%, 06/04/98 4,000 4,000 16 ================================================================================ - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ VIRGINIA--CONTINUED Front Royal & Warren County, Industrial Development Authority, Pen Tab Industries Project, RB, VRDN, AMT (A) (B) (C) (D) 3.900%, 06/04/98 $2,800 $ 2,800 State, Housing Development Authority, Ser C, RB, VRDN (B) (C) 3.800%, 06/10/98 5,800 5,800 ---------- 17,600 ---------- WASHINGTON (1.9%) Pierce County, Washington Economic Development, Weyerhaeuser Real Estate Project, RB, VRDN (B) (C) (D) 3.850%, 06/03/98 3,000 3,000 Port of Seattle, VRDN (C) (D) 3.900%, 06/03/98 1,400 1,400 State, Public Power Supply System, Nuclear Project #1, Ser 1A-3, RB, VRDN (B) (C) (D) 3.750%, 06/03/98 3,400 3,400 State, Student Loan Finance Association, VRDN, AMT (B) (C) (D) 3.750%, 06/04/98 3,000 3,000 ---------- 10,800 ---------- WEST VIRGINIA (0.7%) Marshall County, Pollution Control Authority, Allied Signal Project, RB, VRDN (A) (C) (D) 3.950%, 06/03/98 2,000 2,000 - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ WEST VIRGINIA--CONTINUED Marshall County, Pollution Control Authority, PPG Industries Project, RB, VRDN (C) (D) 4.000%, 06/04/98 $2,000 $ 2,000 ---------- 4,000 ---------- WISCONSIN (0.9%) Carlton, Pollution Control, Power and Light Company, Project B, RB, VRDN (C) (D) 4.000%, 06/01/98 1,200 1,200 Janesville, School District, TRAN 4.100%, 09/21/98 2,250 2,251 Wisconsin, Health Facilities, Saint Lukes Medical Center, RB, VRDN (B) (C) (D) 3.800%, 06/03/98 1,900 1,900 ---------- 5,351 ---------- WYOMING (1.1%) Sweetwater, VRDN (C) 3.600%, 06/03/98 4,600 4,600 Uinta County, Pollution Control, Amoco Company, RB, VRDN (C) (D) 3.850%, 12/01/98 2,000 2,000 ---------- 6,600 ---------- Total Municipal Bonds (Cost $578,629) 580,629 ---------- 17 STATEMENT OF NET ASSETS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 TAX-EXEMPT MONEY MARKET FUND--CONCLUDED - ------------------------------------------------------------ FACE AMOUNT (000) VALUE (000) - ------------------------------------------------------------ CASH EQUIVALENTS (0.1%) AIM Management Institutional Tax-Free Portfolio (C) $453 $ 454 SEI Tax-Exempt Trust Institutional Tax-Free Portfolio (C) 123 124 -------- Total Cash Equivalents (Cost $578) 578 -------- Total Investments (99.8%) (Cost $581,207) 581,207 -------- OTHER ASSETS AND LIABILITIES, NET (0.2%) 1,354 -------- - ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Class (unlimited authorization -- no par value) based on 448,021,834 outstanding shares of beneficial interest $448,022 Fund shares of the Investor Class (unlimited authorization -- no par value) based on 134,543,601 outstanding shares of beneficial interest 134,544 Overdistributed net investment income (1) Accumulated net realized loss on investments (4) -------- Total Net Assets (100.0%) $582,561 ======== Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $1.00 ======== Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $1.00 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19. 18 ================================================================================ KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS AMBAC Security insured by the American Municipal Bond Assurance Company AMT Alternative Minimum Tax Cl Class FGIC Security insured by the Financial Guaranty Insurance Corporation FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association GNMA Government National Mortgage Association GO General Obligation MBIA Security insured by the Municipal Bond Investors Assurance MTN Medium Term Note RB Revenue Bond Ser Series SLMA Student Loan Marketing Association STRIPS Separately Traded Registered Interest and Principal Security TECP Tax Exempt Commercial Paper TRAN Tax & Revenue Anticipation Note VRDN Variable Rate Demand Note (A) Private Placement Security (B) Securities are held in connection with a letter of credit issued by a major bank. (C) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1998. (D) Put and demand features exist requiring the issuer to repurchase the instrument prior to maturity. (E) Tri-Party Repurchase Agreement (F) Zero Coupon Bond THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 19 STATEMENT OF ASSETS AND LIABILITIES (000) ================================================================================ STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1998
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND --------------- Assets: Investments at market value (Cost $388,375) ....................................................... $388,375 Accrued income .................................................................................... 2,030 Receivables for investment securities sold ........................................................ 49,510 Receivables for capital shares sold ............................................................... 2 Other assets ...................................................................................... 67 -------- Total Assets ...................................................................................... 439,984 -------- Liabilities: Accrued expenses .................................................................................. (378) Distribution payable .............................................................................. (1,799) Other liabilities ................................................................................. (1,564) -------- Total Liabilities ................................................................................. (3,741) -------- Net Assets: Fund Shares of the Trust Shares (unlimited authorization -- no par value) based on 377,407,674 outstanding shares of beneficial interest .................................. 377,408 Fund Shares of the Investor Shares (unlimited authorization -- no par value) based on 58,751,567 outstanding shares of beneficial interest ................................... 58,751 Accumulated net realized gain on investments ...................................................... 84 -------- Total Net Assets .................................................................................. $436,243 ======== Net Asset Value, Offering Price and Redemption Price Per Share -- Trust Shares ..................... $ 1.00 ======== Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares .................. $ 1.00 ========
20 [This Page Left Intentionally Blank] STATEMENT OF OPERATIONS (000) ================================================================================ STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1998
TAX-EXEMPT PRIME QUALITY U.S. GOVERNMENT MONEY MONEY MARKET SECURITIES MONEY MARKET FUND MARKET FUND FUND --------- --------- --------- 06/01/97- 06/01/97- 06/01/97- 05/31/98 05/31/98 05/31/98 --------- --------- --------- Interest Income .................................................. $106,833 $21,869 $20,595 -------- ------- ------- Expenses: Investment Advisory Fees ...................................... 12,211 2,564 3,101 Less: Investment Advisory Fees Waived ......................... (2,699) (580) (881) Administrator Fees ............................................ 1,356 283 408 Less: Administrator Fees Waived ............................... (571) (47) (10) Transfer Agent Fees -- Trust Shares ........................... 16 19 19 Transfer Agent Fees -- Investor Shares ........................ 28 5 19 Transfer Agent Out of Pocket Fees ............................. 209 47 63 Printing Expenses ............................................. 143 44 47 Custody Fees .................................................. 72 22 24 Professional Fees ............................................. 104 26 31 Trustee Fees .................................................. 29 10 9 Registration Fees ............................................. 322 51 66 Distribution Fees -- Investor Shares .......................... 716 97 190 Less: Distribution Fees Waived -- Investor Shares ............. (251) (27) (64) Insurance and Other Fees ...................................... 16 13 5 -------- ------- ------- Total Expenses ................................................ 11,701 2,527 3,027 -------- ------- ------- Net Investment Income ......................................... 95,132 19,342 17,568 -------- ------- ------- Net Realized Gain on Securities Sold ............................. 50 146 -- -------- ------- ------- Net Increase in Net Assets from Operations ....................... $ 95,182 $19,488 $17,568 ======== ======= ======= Amounts designated as "--" are either $0 or round to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 22 STATEMENT OF CHANGES IN NET ASSETS (000) ================================================================================ STI CLASSIC FUNDS FOR THE YEARS ENDED MAY 31, 1998
PRIME QUALITY U.S. GOVERNMENT SECURITIES TAX-EXEMPT MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND --------------------- -------------------------- --------------------- 06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96- 05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97 ---------- --------- ------------ ------------ --------- --------- Operations: Net Investment Income .............................. $ 95,132 $ 73,281 $ 19,342 $ 17,800 $ 17,568 $ 12,958 Net Realized Gain (Loss) on Investments ............ 50 (121) 146 (51) -- 10 ---------- ---------- -------- --------- ---------- --------- Increase in Net Assets from Operations ......... 95,182 73,160 19,488 17,749 17,568 12,968 ---------- ---------- -------- --------- ---------- --------- Distributions to Shareholders: Net Investment Income: Trust Shares ..................................... (77,500) (60,224) (16,621) (14,924) (13,717) (10,054) Investor Shares .................................. (17,632) (13,057) (2,723) (2,876) (3,852) (2,904) Capital Gains: Trust Shares ..................................... -- -- -- -- -- -- Investor Shares .................................. -- -- -- -- -- -- ---------- ---------- -------- --------- ---------- --------- Total Distributions ............................ (95,132) (73,281) (19,344) (17,800) (17,569) (12,958) ---------- ---------- -------- --------- ---------- --------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued ...................... 3,915,486 2,786,281 776,773 705,839 1,039,352 980,872 Reinvestment of Cash Distributions ............... 3,699 2,069 380 274 -- -- Cost of Shares Redeemed .......................... (3,125,552) (2,752,496) (744,136) (687,215) (924,334) (921,487) ---------- ---------- -------- --------- ---------- --------- Increase in Net Assets From Trust Share Transactions .............................. 793,633 35,854 33,017 18,898 115,018 59,385 ---------- ---------- -------- --------- ---------- --------- Investor Shares: Proceeds from Shares Issued ...................... 806,517 928,946 178,312 182,325 346,323 305,724 Reinvestment of Cash Distributions ............... 15,979 10,375 2,600 2,379 3,314 2,569 Cost of Shares Redeemed .......................... (694,228) (871,451) (185,358) (180,124) (317,112) (301,505) ---------- ---------- -------- --------- ---------- --------- Increase (Decrease) in Net Assets From Investor Share Transactions .............................. 128,268 67,870 (4,446) 4,580 32,525 6,788 ---------- ---------- -------- --------- ---------- --------- Increase in Net Assets From Share Transactions ... 921,901 103,724 28,571 23,478 147,543 66,173 ---------- ---------- -------- --------- ---------- --------- Total Increase in Net Assets ................... 921,951 103,603 28,715 23,427 147,542 66,183 ---------- ---------- -------- --------- ---------- --------- Net Assets: Beginning of Period ................................ 1,370,099 1,266,496 407,528 384,101 435,019 368,836 ---------- ---------- -------- --------- ---------- --------- End of Period ...................................... $2,292,050 $1,370,099 $436,243 $ 407,528 $ 582,561 $ 435,019 ========== ========== ======== ========= ========== ========= (1) Shares Issued and Redeemed: Trust Shares: Shares Issued .................................... 3,915,486 2,786,281 776,773 705,839 1,039,352 980,872 Shares Issued in Lieu of Cash Distributions ...... 3,699 2,069 380 274 -- -- Shares Redeemed .................................. (3,125,552) (2,752,496) (744,136) (687,215) (924,334) (921,487) ---------- ---------- -------- --------- ---------- --------- Net Trust Share Transactions ................... 793,633 35,854 33,017 18,898 115,018 59,385 ---------- ---------- -------- --------- ---------- --------- Investor Shares: Shares Issued .................................... 806,517 928,946 178,312 182,325 346,323 305,724 Shares Issued in Lieu of Cash Distributions ...... 15,979 10,375 2,600 2,379 3,314 2,569 Shares Redeemed .................................. (694,228) (871,451) (185,358) (180,124) (317,112) (301,505) ---------- ---------- -------- --------- ---------- --------- Net Investor Share Transactions ................ 128,268 67,870 (4,446) 4,580 32,525 6,788 ---------- ---------- -------- --------- ---------- --------- Amounts designated as "--" are either $0 or round to $0.
23 FINANCIAL HIGHLIGHTS ================================================================================ STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31. FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET NET REALIZED NET ASSET VALUE INVESTMENT GAINS (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS ------------------- ---------- -------------- --------------------- ---------------------- PRIME QUALITY MONEY MARKET FUND Trust Shares 1998 $1.00 $ 0.05 $ -- $(0.05) $ -- 1997 1.00 0.05 -- (0.05) -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- Investor Shares 1998 $1.00 $ 0.05 $ -- $(0.05) $ -- 1997 1.00 0.05 -- (0.05) -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1998 $1.00 $ 0.05 $ -- $(0.05) $ -- 1997 1.00 0.05 -- (0.05) -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- Investor Shares 1998 $1.00 $ 0.05 $ -- $(0.05) $ -- 1997 1.00 0.05 -- (0.05) -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.04 -- (0.04) -- 1994 1.00 0.03 -- (0.03) -- TAX-EXEMPT MONEY MARKET FUND Trust Shares 1998 $1.00 $ 0.03 $ -- $(0.03) $ -- 1997 1.00 0.03 -- (0.03) -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- Investor Shares 1998 $1.00 $ 0.03 $ -- $(0.03) $ -- 1997 1.00 0.03 -- (0.03) -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- RATIO OF RATIO OF EXPENSES TO NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS OF PERIOD RETURN PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) --------- ------ ------------ ------------------ ------------------ ------------------ PRIME QUALITY MONEY MARKET FUND Trust Shares 1998 $1.00 5.22% $1,880,229 0.59% 5.10% 0.77% 1997 1.00 5.01% 1,086,555 0.58% 4.90% 0.76% 1996 1.00 5.25% 1,050,800 0.58% 5.11% 0.78% 1995 1.00 4.79% 799,189 0.58% 4.77% 0.79% 1994 1.00 2.88% 583,399 0.58% 2.86% 0.79% Investor Shares 1998 $1.00 5.04% $ 411,821 0.76% 4.93% 0.98% 1997 1.00 4.84% 283,544 0.75% 4.74% 0.97% 1996 1.00 5.08% 215,696 0.75% 4.94% 1.00% 1995 1.00 4.62% 157,616 0.75% 4.55% 1.01% 1994 1.00 2.71% 129,415 0.75% 2.67% 0.99% U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1998 $1.00 5.04% $ 377,490 0.62% 4.92% 0.78% 1997 1.00 4.83% 344,350 0.61% 4.73% 0.76% 1996 1.00 5.14% 325,493 0.61% 5.02% 0.78% 1995 1.00 4.67% 434,111 0.61% 4.64% 0.80% 1994 1.00 2.77% 309,228 0.61% 2.69% 0.77% Investor Shares 1998 $1.00 4.90% $ 58,753 0.76% 4.79% 0.96% 1997 1.00 4.69% 63,178 0.75% 4.59% 0.96% 1996 1.00 4.99% 58,608 0.75% 4.88% 0.99% 1995 1.00 4.51% 46,639 0.75% 4.51% 1.02% 1994 1.00 2.63% 32,395 0.75% 2.54% 0.97% TAX-EXEMPT MONEY MARKET FUND Trust Shares 1998 $1.00 3.21% $ 448,023 0.51% 3.14% 0.67% 1997 1.00 3.09% 333,006 0.50% 3.04% 0.66% 1996 1.00 3.28% 273,613 0.50% 3.23% 0.68% 1995 1.00 3.10% 215,413 0.45% 3.12% 0.70% 1994 1.00 2.08% 143,982 0.42% 2.05% 0.71% Investor Shares 1998 $1.00 3.09% $ 134,538 0.62% 3.04% 0.83% 1997 1.00 2.97% 102,013 0.62% 2.92% 0.83% 1996 1.00 3.16% 95,223 0.62% 3.10% 0.85% 1995 1.00 3.00% 87,647 0.55% 3.00% 0.87% 1994 1.00 1.96% 61,675 0.54% 1.93% 0.88% RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS (EXCLUDING WAIVERS AND REIMBURSEMENTS) ------------------ PRIME QUALITY MONEY MARKET FUND Trust Shares 1998 4.92% 1997 4.72% 1996 4.91% 1995 4.56% 1994 2.65% Investor Shares 1998 4.71% 1997 4.52% 1996 4.69% 1995 4.29% 1994 2.43% U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1998 4.76% 1997 4.58% 1996 4.85% 1995 4.45% 1994 2.53% Investor Shares 1998 4.59% 1997 4.38% 1996 4.64% 1995 4.24% 1994 2.32% TAX-EXEMPT MONEY MARKET FUND Trust Shares 1998 2.98% 1997 2.88% 1996 3.05% 1995 2.87% 1994 1.76% Investor Shares 1998 2.83% 1997 2.71% 1996 2.87% 1995 2.68% 1994 1.59%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 24 & 25 NOTES TO FINANCIAL STATEMENTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts Business Trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-two portfolios: the Value Income Stock Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International Equity Index Fund, the International Equity Fund the Sunbelt Equity Fund, the Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term Federal Mortgage Securities Fund, and the U.S. Government Securities Fund, (collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Securities Money Market Fund, (collectively the "Money Market Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. The financial statements of the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, and the Tax-Exempt Money Market Fund (collectively the "Funds") are included herein. The financial statements of the remaining Funds are presented separately. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust: SECURITY VALUATION -- Investment securities held by the Funds are stated at amortized cost, which approximates market value. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized ratably to maturity and are included in interest income. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. 26 ================================================================================ NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income of each of the Funds are declared on each business day and paid to shareholders on a monthly basis. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. RECLASSIFICATION OF COMPONENTS OF NET ASSETS -- The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from generally accepted accounting principles. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Accordingly, the following permanent difference, primarily attributable to the classification of short-term capital gains and ordinary income for tax purposes related to the other funds, has been reclassified to/from the following accounts: UNDISTRIBUTED ACCUMULATED NET INVESTMENT REALIZED GAIN INCOME (000) (000) -------------- -------------- Prime Quality Money Market Fund $27 $(27) These reclassifications have no effect on net assets or net asset values per share. USE OF ESTIMATES -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. 3. Transactions with Affiliates: Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. Administration and Transfer Agency Servicing Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, as amended November 19, 1997, 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 Annuity Trust) of: .12% up to $1 billion, .09% on the next $4 billion, .07% on the next $3 billion, .065% on the next $2 billion and .06% for over $10 billion. 27 The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. 5. Investment Advisory and Custodian Agreements: The Trust and Trusco Capital Management have entered into an advisory agreement dated July 15, 1993. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets: MAXIMUM MAXIMUM TRUST INVESTOR INVESTOR ANNUAL SHARE SHARE SHARE ADVISORY MAXIMUM DISTRIBUTION MAXIMUM FEE EXPENSE FEE EXPENSE -------- ------- ------------ -------- Prime Quality Money Market Fund .65% .60% .20% .77% U.S. Government Securities Money Market Fund .65% .63% .17% .77% U.S. Tax-Exempt Money Market Fund .55% .62% .15% .74% The Investment Advisor and the Administrator have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for the Funds. Fees of the Custodian are paid on the basis of the net assets of the Funds. The Custodian plays no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 6. Investment Transactions: The Funds had capital loss carryforwards at May 31, 1998 as follows: CAPITAL LOSS CARRYOVER EXPIRES EXPIRES EXPIRES 5/31/98 2003 2004 2005 FUND (000) (000) (000) (000) - ---- --------- ------- ------- ------- Prime Quality Money Market Fund $329 $125 $-- $204 Tax-Exempt Money Market Fund 4 -- 4 -- For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any net realized capital gains. 7. Concentration of Credit Risk: The Prime Quality Money Market Fund invests primarily in high quality money market instruments rated in the highest short-term rating category by Standard & Poor's Ratings Group ("S&P") or Moody's Investors Services, Inc. (Moody's) or, if not rated, are determined by the Advisor to be of comparable quality. The U.S. Government Securities Money Market Fund invests exclusively in U.S. Treasury obligations, U.S. Government subsidiary corporation securities which are backed by the full faith and credit of the U.S. Government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities and U.S. Government subsidiary corporation securities. The Tax-Exempt Money Market Fund invests in high quality, U.S. dollar denominated municipal securities rated in one of the two highest short-term rating categories or, if not rated, are determined by the Advisor to be of comparable quality. 28 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Prime Quality Money Market and Tax-Exempt Money Market Funds, and the statement of assets and liabilities, including the schedule of investments, of the U.S. Government Securities Money Market Fund of STI Classic Funds (the "Trust") as of May 31, 1998, and the related statements of operations, changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 1998, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds of STI Classic Funds as of May 31, 1998, the results of their operations, changes in their net assets, and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, PA July 24, 1998 29 NOTICE TO SHAREHOLDERS ================================================================================ STI CLASSIC FUNDS MAY 31, 1998 UNAUDITED For shareholders that do not have a May 31, 1998 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 1998 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended May 31, 1998, each portfolio is designating the following items with regard to distributions paid during the year:
LONG TERM MID TERM (20% RATE) (28% RATE) ORDINARY CAPITAL GAINS CAPITAL GAINS INCOME TAX-EXEMPT TOTAL QUALIFYING FUND DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1) ------------------------ ------------- ------------- ------------- ---------- ------------- ------------- Tax-Exempt Money Market 0.00% 0.00% 0.00% 100.00% 100.00% 0.00% Prime Quality Money Market 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% U.S. Government Securities 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% - ------------------------ (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of "Ordinary Income Distribution".
30 NOTES NOTES INVESTMENT ADVISORS Trusco Capital Management, Inc. STI Classic Funds are not deposits, are not insured or guaranteed by the FDIC or any other government agency, and are not endorsed by and do not constitute obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment in the Funds involves risk, including the possible loss of principal. There is no guarantee that any STI Classic Fund will achieve its investment objective. The STI Classic Funds are advised by affiliates of SunTrust Banks, Inc. DISTRIBUTOR SEI Investments Distribution Co. This information must be preceded or accompanied by a current prospectus for each Fund described. -----END PRIVACY-ENHANCED MESSAGE-----