N-CSR 1 l10945anvcsr.txt STI CLASSIC FUNDS FORM N-CSR OMB APPROVAL OMB Number: 3235-0570 Expires: October 31, 2006 Estimated average burden hours per response.......19.3 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 811-06557 STI Classic Funds -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 101 Federal Street Boston, MA 02110 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio 43219 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 614-470-8000 Date of fiscal year end: 10/31/04 Date of reporting period: 10/31/04 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORTS TO STOCKHOLDERS. Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1). ANNUAL FINANCIAL REPORT STI CLASSIC FUNDS A FAMILY OF MUTUAL FUNDS Classic Institutional Core Bond Fund Classic Institutional Intermediate Bond Fund Seix Institutional High Yield Fund Classic Institutional Limited Duration Fund October 31, 2004 [STI CLASSIC FUNDS LOGO] TABLE OF CONTENTS: STI CLASSIC FUNDS ANNUAL FINANCIAL REPORT OCTOBER 31, 2004 Shareholder Letter .......................................................................... 1 PORTFOLIO COMPOSITION AND AVERAGE ANNUAL RETURNS Classic Institutional Core Bond Fund ........................................................ 3 Classic Institutional Intermediate Bond Fund ................................................ 5 Seix Institutional High Yield Fund .......................................................... 7 Classic Institutional Limited Duration Fund ................................................. 9 SCHEDULE OF PORTFOLIO INVESTMENTS Classic Institutional Core Bond Fund ........................................................ 11 Classic Institutional Intermediate Bond Fund ................................................ 19 Seix Institutional High Yield Fund .......................................................... 24 Classic Institutional Limited Duration Fund ................................................. 39 Notes to Schedule of Portfolio Investments .................................................. 41 Statements of Assets and Liabilities ........................................................ 42 Statements of Operations .................................................................... 43 Statements of Changes in Net Assets ......................................................... 44 Financial Highlights ........................................................................ 47 Notes to Financial Statements ............................................................... 49 Report of Independent Registered Public Accounting Firm ..................................... 60 Trustees and Officers of the STI Classic Funds .............................................. 61 Special Meeting of Shareholders ............................................................. 64 Expense Examples ............................................................................ 65
October 31, 2004 Dear STI Bond Fund Shareholder, The past year has been very busy for all of us associated with the STI Classic Funds fixed-income funds. Many of you already know that Trusco Capital Management and Seix Advisors joined forces in 2004 in an effort to focus even greater resources on fixed-income management. Seix Advisors has a strong reputation for its disciplined, bottom-up style of bond investing in both the investment grade and high yield(1) markets; an approach that fits well with the core Trusco philosophy. Seix's investment process and strong investment performance has helped it become one of the largest high yield managers in the country. On October 11, 2004, the STI Classic family turned a new page in its long history of excellent performance and client service by naming Seix Advisors as manager of our four flagship bond funds. We are all excited about the high level of expertise, experience, and professionalism that Seix Advisors brings to our STI Classic clients. We are pleased to offer our perspective on the year just ended, and our strategy going forward. The year ended October 31, 2004 was a generally favorable year for the bond markets, despite a relatively strong economy and above-average growth in corporate profits. Although volatility over the course of the twelve months was high, the Lehman Aggregate Bond Index(2) gained 5.53% on a total return basis for the year, with the strongest gains posted in the first and third quarters. Confidence in the sustainability of the current expansion faltered early in the year, as job growth failed to accelerate in a normal cyclical fashion. The positive effects of tax cuts and falling mortgage rates were waning, and the "hand-off" from a stimulus-led expansion to a self-sustaining phase of growth did not go smoothly. As a result, bond yields fell sharply in the first quarter. By March, the yield on the 10-year Treasury note fell as low as 3.68% and the 2-year yield declined to 1.10%. However, rising commodity prices, particularly oil, a weakening dollar, and a commitment by the Federal Reserve ("the Fed") to raise short-term rates beginning in June pushed yields higher. By mid-year, the yield on the 10-year Treasury jumped nearly 120 basis points (1.20%) from the low to 4.87% and the yield on the 2-year note rose over 180 basis points (1.80%) to 2.93%. Fears of excess growth and rampant inflation subsided in the third quarter despite a steady rise in short-term rates by the Fed, and longer-term yields eased. From a fixed-income management perspective, we focused on three key themes in the past year to add value to bond portfolios: improving credit quality from a strengthening economy, rising short-term rates and a flatter yield curve, and growing inflation concerns. To take advantage of the flatter yield curve, we moved to a more "barbell" maturity structure. We also maintained a moderate overweight in corporate bonds to take advantage of narrowing credit spreads and higher current income. Finally, we established a position in Treasury Inflation Indexed Securities ("TIPS") which we felt would be an area of growing demand from investors, and would offer additional performance in an accelerating inflation environment. (1) Although the fund's yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that the fund's share price will decline. (2) The Lehman Brothers Aggregate Bond Index is an unmanaged index of U.S. bonds, which includes reinvestment of any earnings, is widely used to measure the overall performance of the U.S. bond market. It is not possible to invest directly in any index. 1 We entered 2004 optimistic yet cautious. We thought bonds would do well but could be challenged to match the absolute performance of the past few years. To date, the market has exceeded our expectations for 2004. We believe annualized returns are well in excess of inflation targets. The fear of rising rates has done little to blunt the performance of bonds and has produced handsome advantages relative to equities. Looking ahead, we continue to see return potential in further flattening of the Treasury yield curve. Credit remains a beneficiary of strong demand and limited supply. Fundamentals are stronger as balance sheets have been fortified considerably, and companies are using cash prudently, benefiting bondholders. We continue to favor TIPS amid a Treasury market struggling under the weight of a record federal deficit. Seix Advisors is excited to be managing the STI Classic bond funds, and shares the commitment of Trusco to bring a disciplined, bottom-up management approach to our clients. We appreciate the confidence you have placed in us, and we are committed to providing the high level of performance and service you have come to expect from the STI Classic family of mutual funds. Sincerely, /s/ Christina Seix /s/ Douglas Phillips Christina Seix Douglas Phillips CEO & Chief Investment Officer Chairman Seix Advisors Trusco Capital Management 2 CLASSIC INSTITUTIONAL CORE BOND FUND INVESTMENT CONCERNS Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. The Classic Institutional Core Bond Fund ("the Fund") seeks to provide a high level of total return and to continually outperform the broad investment grade bond market. The Fund will invest predominantly in investment grade bonds with an emphasis on corporate and mortgage backed securities. For the year ended October 31, 2004, the Fund's Institutional Shares had a total return net of fees of 5.49% versus a return of 5.53% for its comparative benchmark, the Lehman Brothers Aggregate Bond Index, which has no fees deducted. The strategies implemented in the Fund outperformed the benchmark, but by an amount slightly less than the fees. Consequently, the Fund slightly underperformed its benchmark net of fees. The period began in the midst of a slow, but visible, economic expansion. Interest rates were artificially low led primarily by a moribund employment environment. As the economy gained steam in the fourth quarter and non-farm payroll releases relayed the first of twelve consecutive months of job increases, the Fed became pro-active and the yield curve flattened considerably. The Fed raised short term rates three times beginning on June 30 bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between two and thirty year Treasury securities fell precipitously from 3.42% to 2.28%. While short rates rose, intermediate and long term yields were relatively unchanged. Inflation was not a factor despite a nominal rise. This shift in the yield curve, along with the continuing strength of the credit markets, was critical to the Fund's investment strategy. The Fund's success was driven by three principal strategies: overweight in credit securities, yield curve flattening bias and the use of U.S. Treasury Inflation Indexed Securities ("TIPS"). The Fund's consistent overweight in credit, particularly BBB rated securities, during the past two years has been an essential component to performance enhancement. Emphasis on solid credit research and issuer diversification led to advantages relative to the benchmark. While we attempt to maintain a tight rein on duration relative to the index, we anticipated the flattening of the yield curve and tilted maturities accordingly. The concentration in mortgages is significant, albeit underweighted to the Aggregate, but has been a detractor to returns over the past year. TIPS are used opportunistically as their presence in the markets has grown. We believe the ongoing allocation to TIPS has, and may continue to be, an essential contributor to performance. We continue to manage the Fund with only moderate shifts in average maturity and duration. The total return is enhanced with yield curve analysis, sector rotation and other low risk strategies. By actively pursuing these strategies, the Fund strives to add total return while reducing risk.(1) (1) Portfolio composition is subject to change. Portfolio Composition as of October 31, 2004 (as a percentage of total investments) [PIE CHART] Corporate Bonds 28.2% U.S. Government Agencies 30.5% Foreign Government Bonds 0.6% U.S. Treasury Obligations 30.1% Cash Equivalents 5.9% Repurchase Agreements 4.3% Asset Backed Securities 0.4%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE 3 GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004 [GRAPH]
Classic Institutional Core Bond Fund (Institutional Shares) Lehman Brothers Aggregate Bond Index ----------------------------------------------------------- ------------------------------------ 12/30/97 10000 10000 12/97 10020 10000 10180 10155 10409 10346 10740 10810 12/98 10803 10842 10792 10822 10667 10779 10729 10878 12/99 10746 10884 10899 11046 11076 11232 11424 11555 12/00 11864 11983 12220 12390 12315 12473 12838 13047 12/01 12674 13059 12654 13030 13031 13492 13349 14103 12/02 13635 14341 13847 14556 14247 14951 14235 14948 12/03 14291 14958 14640 15329 14323 14943 14771 15346 10/31/04 14886 15607
CLASSIC INSTITUTIONAL CORE BOND FUND Assumes initial investment of $10,000 occurred on the Fund's inception date. The minimum investment for the Institutional Shares is $1 million. Based on the initial investment of $1 million, the ending value of the Institutional Shares would have been $1,488,643. THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE. The Lehman Brothers Aggregate Bond Index is an unmanaged index of U.S. bonds, which includes reinvestment of any earnings, is widely used to measure the overall performance of the U.S. bond market. It is not possible to invest directly in any index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%) ------------------------------------------------------ CLASSIC INSTITUTIONAL SINCE CORE BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR 5 YEAR INCEPTION --------------------- -------------- ------ ------ ------ --------- INSTITUTIONAL SHARES (12/30/97) 5.49 4.46 6.68 5.99 T SHARES (10/11/04) 5.47 4.45 6.68 5.99 L SHARES* (10/11/04) 3.45 4.44 6.67 5.99 A SHARES* (1/25/02) 1.26 2.86 5.69 5.28 LEHMAN BROTHERS AGGREGATE BOND INDEX (12/31/97) 5.53 5.44 7.58 6.73
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM. *CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75% AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE) OF 2.00% IN YEAR ONE ONLY. + The quoted returns reflect the performance from December 30, 1997 to October 11, 2004 of the Seix Core Bond Fund, an open-end investment company that was the predecessor fund to the Classic Institutional Core Bond Fund. Performance for the Institutional Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Core Bond Fund's Class I Shares prior to that date. Performance for the Class T and L Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Core Bond Fund's Class I Shares prior to that date. The historical performance has not been adjusted to reflect the Fund's T or L Share expenses. If it had been, the performance would have been lower. The Class A Shares began operating on October 11, 2004. Performance between December 30, 1997 to January 25, 2002 and January 25, 2002 to October 11, 2004 is that of the Class I Shares and Class P Shares, respectively, of the Seix Core Bond Fund, the Fund's predecessor. The performance of the predecessor fund's Class I Shares has not been adjusted to reflect the Fund's A Share expenses. If it had been, the performance would have been lower. 4 CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND INVESTMENT CONCERNS Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. The Classic Institutional Intermediate Bond Fund ("the Fund") seeks to provide a high level of total return and to continually outperform the broad intermediate investment grade bond market. The Fund will invest predominantly in intermediate, investment grade bonds with an emphasis on corporate and government securities. For the year ended October 31, 2004, the Fund's Institutional Shares had a total return net of fees of 4.73% versus a return of 4.33% for its comparative benchmark, the Lehman Intermediate Government/Credit Index, which has no fees deducted. The period began in the midst of a slow, but visible, economic expansion. Interest rates were artificially low led primarily by a moribund employment environment. As the economy gained steam in the fourth quarter and non-farm payroll releases relayed the first of twelve consecutive months of job increases, the Fed became pro-active and the yield curve flattened considerably. The Fed raised short term rates three times beginning on June 30, bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between two and ten year Treasury securities fell precipitously from 2.48% to 1.51%. While short rates rose, intermediate and long term yields were relatively unchanged. Inflation was not a factor despite a nominal rise. This shift in the yield curve, along with the continuing strength of the credit markets, was critical to the Fund's investment strategy. The Fund's success was driven by three principal strategies: overweight in credit securities, yield curve flattening bias and the use of U.S. Treasury TIPS. The Fund's consistent overweight in credit, particularly BBB rated securities, during the past two years has been a key component to performance enhancement. Emphasis on solid credit research and issuer diversification led to advantages relative to the benchmark. While we maintain a tight rein on duration relative to the index, we anticipated the flattening of the yield curve and tilted maturities accordingly. TIPS are used opportunistically as their presence in the markets has grown. We believe ongoing allocation to TIPS has, and may continue to be, an essential contributor to performance.(1) We continue to manage the Fund with only moderate shifts in average maturity and duration. The total return is enhanced with yield curve analysis, sector rotation and other low risk strategies. By actively pursuing these strategies, the Fund strives to add total return while reducing risk.(1) (1) Portfolio composition is subject to change. Portfolio Composition as of October 31, 2004 (as a percentage of total investments) [PIE CHART] Corporate Bonds 39.4% Foreign Government Bonds 0.9% U.S. Treasury Obligations 54% Repurchase Agreements 4% U.S. Government Agencies 0.6% Asset Backed Securities 1.1%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE 5 GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004 [GRAPH]
Classic Institutional Intermediate Bond Fund (Institutional Shares) Lehman Brothers Intermediate Government/Credit Index ------------------------------------------------------------------- ---------------------------------------------------- 06/30/99 10000 10000 10094 10092 12/99 10124 10097 10322 10248 10457 10421 10774 10720 12/00 11155 11117 11510 11494 11574 11571 12076 12104 12/01 11939 12115 11895 12088 12234 12517 12595 13083 12/02 12797 13305 12944 13504 13270 13871 13298 13868 12/03 13313 13877 13640 14221 13323 13863 13698 14237 10/31/04 13794 14332
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND Assumes initial investment of $10,000 occurred on the Fund's inception date. The minimum investment for the Institutional Shares is $1 million. Based on the initial investment of $1 million, the ending value of the Institutional Shares would have been $1,379,410. THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE. The Fund is measured against the Lehman Brothers Intermediate Government/Credit Index an unmanaged index composed of all bonds that are investment grade rated Baa or higher by Moody's or BBB or higher by S&P, if unrated by Moody's. Issues must have at least one year to maturity. The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%) ----------------------------------------------- CLASSIC INSTITUTIONAL SINCE INTERMEDIATE BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR 5 YEAR INCEPTION ------------------------ -------------- ------ ------ ------ --------- INSTITUTIONAL SHARES (6/30/99) 4.73 4.11 6.40 6.21 T SHARES (10/11/04) 4.60 4.07 6.38 6.19 L SHARES* (10/11/04) 2.58 4.06 6.37 6.18 A SHARES* (10/11/04) 0.66 2.76 5.56 5.43 LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CREDIT INDEX (6/30/99) 4.33 5.22 7.22 6.98
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM. *CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75% AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE) OF 2.00% IN YEAR ONE ONLY. + The quoted returns reflect the performance from June 30, 1999 to October 11, 2004 of the Seix Intermediate Bond Fund, an open-end investment company that was the predecessor fund to the Classic Institutional Intermediate Bond Fund. Performance for the Institutional Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Intermediate Bond Fund's Class I Shares prior to that date. Performance for the Class T, L and A Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Intermediate Bond Fund's Class I Shares prior to that date. The historical performance has not been adjusted to reflect the Fund's T, L or A Share expenses. If it had been, the performance would have been lower. 6 SEIX INSTITUTIONAL HIGH YIELD FUND INVESTMENT CONCERNS Although the fund's yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that the fund's share price will decline. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. The SEIX Institutional High Yield Fund (the "Fund") invests in the higher quality segment of the high yield market. The Fund's portfolio emphasizes "BB" and "B" rated bonds and avoids lower quality securities rated "CCC" by Moody's or Standard & Poor's. In selecting investments for the Fund, we employ a research driven process designed to identify value areas within the high yield market. We seek companies that are increasing credit strength, operating in industries with strong fundamentals and also have stable or growing cash flows and capable management.(1, 2) We are pleased to report that the net of expenses return of the Fund's Institutional Shares was 9.97% for the 12 month period ending October 31, 2004. This compares to a 12.07% return for the Merrill Lynch High Yield Master Index, which has no fees deducted. The performance shortfall compared to the benchmark was due to the Fund's concentration in the higher quality sector of the high yield market at a time when lower quality "CCC" rated bonds were recovering from a very difficult 2002. Our view since October 31, 2003 has been that High Yield portfolios would outperform other fixed income sectors. The excess return was expected to result from higher income, some continued spread tightening versus Treasuries and, especially, credit quality improvement. Over the last twelve months, High Yield securities have out yielded Investment Grade bonds. Although not as dramatic as early 2003, some spread tightening between High Yield and Investment Grade corporates has occurred. We believe the largest source of excess return, however, was credit improvement as companies strengthened balance sheets. Over the last year, we favored the Media, Gaming and Healthcare industries. Media benefited from strong advertising spending during the lively election year. The cycle in Healthcare reimbursement turned in favor of providers and hospitals as well as other medical service companies enjoyed pricing power for the first time in a number of years. The large Gaming companies remain well managed and are benefiting from a rebound in domestic tourism.(1) We underweighted Auto Suppliers and Airlines because of their very difficult operating environments. Auto Suppliers are at the mercy of the "Big Three" car makers and have little pricing power. Airlines are saddled with high energy costs, costly labor contracts and high pension liabilities.(1) We believe that with a slow and steady improvement in the economy, high yield issuers should continue to experience improved free cash flow that can be used to pay down debt and reduce leverage. We anticipate that the Fund may benefit from these trends. (1) Portfolio composition is subject to change. (2) The Moody's or Standard and Poor's Fund Ratings represent an opinion only, not a recommendation to buy or sell. Portfolio Composition as of October 31, 2004 (as a percentage of total investments) [PIE CHART] Corporate Bonds 96.1% Repurchase Agreements 3.7% Preferred Stocks 0.2%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE 7 GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004 [GRAPH]
SEIX Institutional High Yield Bond (Institutional Shares) Merrill Lynch High Yield Master Index --------------------------------------------------------- ------------------------------------- 12/29/2000 10000 10000 Dec-00 10000 10000 10578 10578 10699 10338 10710 9858 1-Dec 11133 10448 11305 10629 11336 9887 11409 9595 2-Dec 11839 10250 12339 10982 12991 12083 13110 12399 3-Dec 13681 13135 13974 13421 13750 13314 14414 13930 10/31/2004 14654 14199
SEIX INSTITUTIONAL HIGH YIELD FUND Assumes initial investment of $10,000 occurred on the Fund's inception date. The minimum investment for the Institutional Shares is $1 million. Based on the initial investment of $1 million, the ending value of the Institutional Shares would have been $1,465,376. THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE. The Fund is measured against the Merrill Lynch High Yield Master Index which is an unmanaged index consisting of all domestic and Yankee high-yield bonds maturing over 1 year. The quality range is less than BBB-/Baa3 but not in default (DDD1 or less). The index does not reflect the deduction of expenses associated with a mutual fund, such as investment management and fund accounting fees. The Fund's performance reflects the deduction of fees for these services. Investors cannot invest directly in an index, although they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%) ------------------------------------ SEIX INSTITUTIONAL HIGH YIELD SINCE BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR INCEPTION ----------------------------- -------------- ------ ------ --------- INSTITUTIONAL SHARES (12/29/00) 9.97 9.99 10.47 T SHARES (10/11/04) 9.96 9.98 10.47 L SHARES* (10/11/04) 7.93 9.97 10.46 A SHARES* (12/21/01) 5.61 8.26 9.12 MERRILL LYNCH HIGH YIELD MASTER INDEX (12/31/00) 12.07 11.69 9.58
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM. *CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75% AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE) OF 2.00% IN YEAR ONE ONLY. + The quoted returns reflect the performance from December 29, 2000 to October 11, 2004 of the Seix High Yield Fund, an open-end investment company that was the predecessor fund to the Seix Institutional High Yield Fund. Performance for the Institutional Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix High Yield Fund's Class I Shares prior to that date. Performance for the Class T and L Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix High Yield Fund's Class I Shares prior to that date. The historical performance has not been adjusted to reflect the Fund's T or L Share expenses. If it had been, the performance would have been lower. The Class A Shares began operating on October 11, 2004. Performance between December 29, 2000 to December 21, 2001 and December 21, 2001 to October 11, 2004 is that of the Class I Shares and Class P Shares, respectively, of the Seix Core Bond Fund, the Fund's predecessor. The performance of the predecessor fund's Class I Shares has not been adjusted to reflect the Fund's A Share expenses. If it had been, the performance would have been lower. 8 CLASSIC INSTITUTIONAL LIMITED DURATION FUND INVESTMENT CONCERNS Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. The Classic Institutional Limited Duration Fund ("the Fund") seeks to provide a high level of current income while preserving principal and providing liquidity. The Fund will invest predominantly in short duration investment grade bonds with an emphasis on mortgage and asset backed securities. For the year ended October 31, 2004, the Fund's Institutional Shares had a total return net of fees of 1.09% versus a return of 1.16% for its comparative benchmark, the Merrill Lynch 3-Month Treasury Bill Index, which has no fees deducted. The strategies implemented in the Fund outperformed the benchmark, but by an amount slightly less than the fees. Consequently, the Fund slightly underperformed its benchmark net of fees. The period began in the midst of a slow, but visible, economic expansion. Interest rates were artificially low led primarily by a moribund employment environment. As the economy gained steam in the Fourth Quarter and non-farm payroll releases relayed the first of twelve consecutive months of job increases, the Fed became pro-active and the yield curve flattened considerably. The Fed raised short term rates three times beginning on June 30 bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between two and thirty year Treasury securities fell precipitously from 3.42% to 2.28%. While short rates rose, intermediate and long term yields were relatively unchanged. Inflation was not a factor despite a nominal rise. This shift in the yield curve, along with the continuing strength of the credit markets, was critical to the Fund's investment strategy. The Fund strives to match short term interest rates through its use of floating rate securities and short duration fixed rate bonds including Treasury and Government Agency securities. Floating rate asset backed and collateralized mortgage obligations are normally pegged to three month LIBOR (London Interbank Offered Rate)(1), a common short duration domestic interest rate indicator. The duration of the Fund is kept within a tight average life between 30 and 90 days. The quality of the securities in the Fund's underlying portfolio, on average, were rated AAA (by Standard & Poor's).(2, 3) (1) LIBOR (London Interbank Offered Rate) is the rate of interest at which banks borrow funds from other banks, in marketable size, in the London interbank market. (2) Portfolio composition is subject to change. (3) The Moody's or Standard and Poor's Fund Ratings represent an opinion only, not a recommendation to buy or sell. Portfolio Composition as of October 31, 2004 (as a percentage of total investments) [PIE CHART] U.S. Treasury Obligations 51.4% Cash Equivalents 42.7% Repurchase Agreements 5.9%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE 9 GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004 [GRAPH]
Classic Institutional Limited Duration Fund (Institutional Shares) Merrill Lynch High Yield Master Index ------------------------------------------------------------------ ------------------------------------- 10/25/02 10000 10000 12/02 10014 10028 10031 10058 10068 10092 10093 10117 12/03 10111 10143 10140 10167 10155 10191 10188 10229 10/31/04 10202 10242
CLASSIC INSTITUTIONAL LIMITED DURATION FUND Assumes initial investment of $10,000 occurred on the Fund's inception date. The minimum investment for the Institutional Shares is $1 million. Based on the initial investment of $1 million, the ending value of the Institutional Shares would have been $1,020,199. THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE. The Fund is measured against the Merrill Lynch 3-Month U.S. Treasury Index tracks the monthly price-only and total return performance of a three-month Treasury bill, based on monthly average auction rates.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%) ------------ CLASSIC INSTITUTIONAL SINCE LIMITED DURATION FUND + INCEPTION DATE 1 YEAR INCEPTION ----------------------- -------------- ------ --------- INSTITUTIONAL SHARES (10/25/02) 1.09 1.00 T SHARES (10/11/04) 1.09 1.00 L SHARES* (10/11/04) -0.93 0.99 MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX (10/31/02) 1.16 1.02
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM. *CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE) OF 2.00% IN YEAR ONE ONLY. + The quoted returns reflect the performance from October 25, 2002 to October 11, 2004 of the Seix Limited Duration Fund, and open-end Investment company that was the predecessor fund to the Classic Institutional Limited Duration Fund. Performance for the Institutional Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Limited Duration Fund's Class I Shares prior to that date. Performance for the Class T and L Shares, which commenced operations on October 11, 2004, is the historical performance of the Seix Limited Duration Fund's Class I shares prior to that date. The historical performance has not been adjusted to reflect the Fund's T or L Shares expenses. If it has been, the performance would have been lower. 10 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL CORE BOND FUND
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- ASSET BACKED SECURITIES (0.4%) HOME EQUITY ABS (0.4%) Aames Mortgage Trust, Ser 1999-1, Cl AF, 7.290%, 07/15/29 $ 50 $ 51 Aames Mortgage Trust, Ser 1999-2, Cl AF, 7.589%, 10/15/29 34 35 Cityscape Home Equity Loan Trust, Ser 1996-3, Cl A8, 7.650%, 09/25/25 53 53 Delta Funding Home Equity Loan Trust, Ser 1999-3, Cl A1F, 7.462%, 09/15/29 18 19 EQCC Home Equity Loan Trust, Ser 1999-3, Cl A7F, 7.448%, 08/25/30 16 16 New Century Home Equity Loan Trust, Ser 1999-NCB, Cl A4, 7.530%, 09/25/28 3 3 New Century Home Equity Loan Trust, Ser 1999-NCB, Cl A7, 7.540%, 06/25/29 21 21 Soundview Home Equity Loan Trust, Ser 2001-1, Cl A, 6.265%, 04/15/31 27 28 ------- Total Asset Backed Securities (Cost $230) 226 ------- CORPORATE BONDS (30.1%) AUTO MANUFACTURERS (2.4%) American Honda Finance Corp., 3.850%, 11/06/08 (c) 160 161 DaimlerChrysler NA Holdings Corp., 8.500%, 01/18/31 100 124
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->AUTO MANUFACTURERS--CONTINUED Ford Motor Co., 7.450%, 07/16/31 $ 620 $ 604 General Motors Corp., 8.375%, 07/15/33 375 390 Harley Davidson Funding, Inc., 3.625%, 12/15/08 90 90 ------- 1,369 ------- BANKS (4.0%) Bank of America Corp., 7.400%, 01/15/11 335 393 Bank One Corp., 7.625%, 08/01/05 105 109 BNP US Funding LLC, 7.738%, Callable 12/05/07 @ 100.00 (b) (c) (d) 170 191 Capital One Bank, 5.125%, 02/15/14 250 251 Citigroup, Inc., 5.125%, 05/05/14 125 129 Citigroup, Inc., 5.875%, 02/22/33 185 187 JP Morgan Chase & Co., 6.625%, 03/15/12 440 498 Royal Bank of Scotland Group PLC, 7.648%, Callable 09/30/31 @ 100 (b) (d) 135 163 Societe Generale Real Estate Co. LLC, 7.640%, Callable 09/30/07 @ 100.00 (c) (d) 100 111 Wachovia Corp., 7.550%, 08/18/05 135 140 Wells Fargo & Co., 4.800%, 07/29/05 55 56 ------- 2,228 -------
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-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- BEVERAGES (0.4%) Coca-Cola Co., 4.000%, 06/01/05 $ 110 $ 111 Miller Brewing Co., 4.250%, 08/15/08 (c) 135 138 ------- 249 ------- BROKERAGE (1.3%) Goldman Sachs Group, Inc. (The), 3.875%, 01/15/09 100 101 Goldman Sachs Group, Inc. (The), 4.750%, 07/15/13 80 79 Goldman Sachs Group, Inc. (The), 6.345%, 02/15/34 165 168 Merrill Lynch & Co., 3.700%, 04/21/08 60 60 Morgan Stanley, 5.300%, 03/01/13 315 328 ------- 736 ------- BUILDING MATERIALS (0.3%) American Standard, Inc., 7.625%, 02/15/10 145 166 ------- COMMERCIAL SERVICES (0.6%) ERAC USA Finance Co., 7.350%, 06/15/08 (c) 140 157 R.R. Donnelley & Sons Co., 3.750%, 04/01/09 175 174 ------- 331 ------- COMPUTERS (0.1%) NCR Corp., 7.125%, 06/15/09 70 78 ------- COSMETICS/PERSONAL CARE (0.1%) Gillette Co. (The), 3.750%, 12/01/04 (c) 80 80 -------
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (1.5%) CIT Group, Inc., 5.750%, 09/25/07 $ 65 $ 69 CIT Group, Inc., 5.500%, 11/30/07 115 122 CIT Group, Inc., 5.125%, 09/30/14 80 81 Household Finance Corp., 7.625%, 05/17/32 145 180 International Lease Finance Corp., 4.750%, 07/01/09 290 297 MBNA Corp., 7.500%, 03/15/12 100 117 ------- 866 ------- DIVERSIFIED MANUFACTURING (1.8%) General Electric Co., 5.000%, 02/01/13 630 653 Tyco International Group SA, 6.000%, 11/15/13 160 175 Tyco International Group SA, 6.875%, 01/15/29 145 165 ------- 993 ------- ELECTRIC (3.3%) Appalachian Power Co., Ser E, 4.800%, 06/15/05 70 71 Calenergy Co., Inc., 7.520%, 09/15/08 70 79 Carolina Power & Light Co., 6.500%, 07/15/12 80 89 Cincinnati Gas & Electric Co., 5.700%, 09/15/12 75 80 Comed Financing III, 6.350%, 03/15/33 95 96 Dominion Resources, Inc., Ser B, 7.625%, 07/15/05 130 135 Dominion Resources, Inc., Ser E, 6.750%, 12/15/32 90 98
12 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL CORE BOND FUND -- CONTINUED
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->ELECTRIC--CONTINUED Entergy Gulf States, Inc., 5.200%, 12/03/07, Callable 12/01/04 @ 100.00 $ 120 $ 120 Entergy Gulf States, Inc., 4.875%, 11/01/11, Callable 11/01/06 @ 100.00 135 135 Exelon Generation Co. LLC, 6.950%, 06/15/11 35 40 Florida Power & Light Co., 6.875%, 12/01/05 35 37 Northern States Power Co., 2.875%, 08/01/06 60 60 Oncor Electric Delivery Co., 7.000%, 05/01/32 80 93 Pacific Gas & Electric Co., 6.050%, 03/01/34 275 283 Public Service Co. of Colorado, Ser 14, 4.375%, 10/01/08 135 138 Westar Energy, Inc., 7.875%, 05/01/07 140 155 Westar Energy, Inc., 6.000%, 07/01/14 130 141 ------- 1,850 ------- ENVIRONMENT CONTROL (0.3%) Waste Management, Inc., 6.500%, 11/15/08 165 182 ------- FOREST PRODUCTS & PAPER (0.4%) Weyerhaeuser Co., 6.750%, 03/15/12 110 124 Weyerhaeuser Co., 7.375%, 03/15/32 65 76 ------- 200 ------- GAS (0.2%) Sempra Energy, 4.750%, 05/15/09 105 108 -------
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- HEALTHCARE -- PRODUCTS (0.2%) Johnson & Johnson, 8.720%, 11/01/24, Callable 11/01/04 @ 104.36 $ 110 $ 115 ------- HEALTHCARE -- SERVICES (0.6%) Anthem Insurance Cos., Inc., 9.000%, 04/01/27 (c) 130 178 WellPoint Health Networks, Inc., 6.375%, 06/15/06 135 142 ------- 320 ------- HOME BUILDERS (0.4%) Lennar Corp., 5.950%, 03/01/13 90 96 Pulte Homes, Inc., 4.875%, 07/15/09 140 143 ------- 239 ------- HOUSEHOLD PRODUCTS/WARES (0.2%) Dial Corp. (The), 7.000%, 08/15/06 120 128 ------- INSURANCE (1.0%) Berkshire Hathaway Financial Corp., 3.375%, 10/15/08 175 175 MetLife, Inc., 5.250%, 12/01/06 75 78 Monumental Global Funding, 5.200%, 01/30/07 (c) 105 110 Prudential Financial, Inc., 3.750%, 05/01/08 75 75 Prudential Financial, Inc., 5.100%, 09/20/14 130 130 ------- 568 ------- INVESTMENT COMPANIES (0.3%) Credit Suisse First Boston USA, Inc., 6.500%, 01/15/12 140 157 ------- LEISURE TIME (0.1%) GTECH Holdings Corp., 4.750%, 10/15/10 80 81 -------
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-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- LODGING (0.1%) Marriott International, Inc., Ser C, 7.875%, 09/15/09 $ 35 $ 41 ------- MACHINERY (0.1%) John Deere Capital Corp., 3.900%, 01/15/08 75 76 ------- MEDIA (2.5%) British Sky Broadcasting Group PLC, 6.875%, 02/23/09 205 227 Comcast Cable Communications, Inc., 7.125%, 06/15/13 335 384 Cox Communications, Inc., 4.625%, 06/01/13 160 153 News America Holdings, Inc., 9.250%, 02/01/13 140 181 Time Warner, Inc., 6.750%, 04/15/11 100 113 Time Warner, Inc., 7.625%, 04/15/31 150 178 Univision Communications, Inc., 7.850%, 07/15/11 125 148 ------- 1,384 ------- MINING (1.1%) Barrick Gold Finance, Inc., 7.500%, 05/01/07 70 77 Codelco, Inc., 5.500%, 10/15/13 (c) 205 215 Inco, Ltd., 7.750%, 05/15/12 280 333 ------- 625 ------- OIL & GAS (1.9%) BP Capital Markets PLC, 4.000%, 04/29/05 175 176 Devon Financing Corp. ULC, 7.875%, 09/30/31 205 259 Enterprise Products Partners LP, Ser B, 6.875%, 03/01/33 130 136
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->OIL & GAS--CONTINUED Motiva Enterprises LLC, 5.200%, 09/15/12 (c) $ 110 $ 115 Pennzoil Co., 10.250%, 11/01/05 25 27 Phillips Petroleum Co., 6.375%, 03/30/09 45 50 Phillips Petroleum Co., 8.750%, 05/25/10 80 99 XTO Energy, Inc., 6.250%, 04/15/13 185 204 ------- 1,066 ------- PACKAGING & CONTAINERS (0.2%) Packaging Corp. of America, 5.750%, 08/01/13 125 129 ------- PIPELINES (1.2%) Centerpoint Energy Resources Co., Ser B, 7.875%, 04/01/13 205 245 K N Capital Trust III, 7.630%, 04/15/28 175 194 KN Energy, Inc., 7.250%, 03/01/28 65 73 Panhandle Eastern Pipeline, 2.750%, 03/15/07 70 69 Panhandle Eastern Pipeline, Ser B, 4.800%, 08/15/08 105 109 ------- 690 ------- PROPERTY AND CASUALTY INSURANCE (0.4%) Fund American Cos., Inc., 5.875%, 05/15/13 225 229 ------- REAL ESTATE (0.2%) Simon Property Group LP, (REIT), 6.375%, 11/15/07 80 86 ------- SAVINGS & LOANS (0.3%) Golden West Financial Corp., 4.125%, 08/15/07 155 159 -------
14 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL CORE BOND FUND -- CONTINUED
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- SOVEREIGN (0.3%) China Development Bank, 4.750%, 10/08/14 $ 180 $ 178 ------- TELECOMMUNICATIONS (1.8%) Deutsche Telekom International Finance, 9.250%, 06/01/32 90 129 SBC Communications, Inc., 5.625%, 06/15/16 30 31 SBC Communications, Inc., 6.450%, 06/15/34 155 163 Sprint Capital Corp., 8.750%, 03/15/32 280 367 TELUS Corp., 8.000%, 06/01/11 155 183 Verizon Global Funding Corp., 7.750%, 12/01/30 115 141 ------- 1,014 ------- TRANSPORTATION (0.5%) FedEx Corp., 3.500%, 04/01/09 260 257 ------- Total Corporate Bonds (Cost $16,542) 16,978 ------- FOREIGN GOVERNMENT BOND (0.6%) MEXICO (0.6%) Mexican United States, 8.300%, 08/15/31 295 341 ------- Total Foreign Government Bond (Cost $325) 341 ------- U.S. GOVERNMENT AGENCIES (32.5%) FANNIE MAE (24.0%) 5.500%, 03/01/16 244 253 6.000%, 08/01/16 101 106 6.000%, 03/01/18 77 81 4.500%, 10/01/18 405 407 6.000%, 12/01/18 86 90 5.000%, 08/01/19 283 289 5.000%, 09/01/19 174 178 5.000%, 10/01/19 186 190
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->FANNIE MAE--CONTINUED 5.000%, 10/01/19 $ 297 $ 303 5.000%, 11/18/19 1,683 1,718 5.500%, 11/18/19 902 935 6.500%, 09/01/24 34 36 6.500%, 12/01/27 10 10 6.500%, 05/01/28 3 3 6.500%, 11/01/28 17 18 6.500%, 02/01/29 51 54 6.500%, 05/01/29 68 71 6.500%, 02/01/30 9 9 6.000%, 04/01/31 43 44 7.000%, 04/01/31 114 122 7.000%, 06/01/31 12 12 7.000%, 11/01/31 50 53 6.500%, 06/01/32 133 140 6.500%, 10/01/32 27 28 6.500%, 11/01/32 30 32 6.500%, 11/01/32 19 20 5.500%, 02/01/33 552 563 6.500%, 02/01/33 47 49 5.500%, 03/01/33 143 146 5.000%, 04/01/33 43 43 5.500%, 04/01/33 188 191 5.500%, 04/01/33 273 278 5.500%, 04/01/33 185 189 7.000%, 04/01/33 135 143 5.500%, 05/01/33 183 187 6.500%, 05/01/33 99 104 7.000%, 05/01/33 31 33 5.500%, 06/01/33 93 95 7.000%, 06/01/33 47 50 5.500%, 07/01/33 64 65 5.000%, 08/01/33 744 744 5.500%, 08/01/33 246 251 7.000%, 08/01/33 45 48 5.500%, 10/01/33 48 49 5.500%, 10/01/33 159 162
15
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->FANNIE MAE--CONTINUED 6.500%, 10/01/33 $ 41 $ 43 6.500%, 10/01/33 136 144 6.500%, 10/01/33 190 200 6.500%, 10/01/33 121 127 6.500%, 10/01/33 143 150 6.500%, 10/01/33 5 6 7.000%, 10/01/33 34 36 7.000%, 10/01/33 37 40 5.500%, 11/01/33 185 189 5.500%, 11/01/33 796 813 5.500%, 11/01/33 133 136 6.000%, 11/01/33 271 282 6.000%, 11/01/33 136 141 6.000%, 11/01/33 83 86 6.500%, 11/01/33 153 161 6.500%, 11/01/33 51 53 7.000%, 11/01/33 25 26 6.000%, 12/01/33 95 99 6.000%, 12/01/33 113 117 7.000%, 12/01/33 274 291 6.000%, 03/01/34 135 140 6.000%, 04/01/34 164 170 6.000%, 04/01/34 137 142 6.000%, 04/01/34 131 136 6.000%, 05/01/34 120 125 6.000%, 05/01/34 128 133 6.500%, 05/01/34 395 416 6.500%, 06/01/34 23 24 5.500%, 11/15/34 532 542 ------- 13,560 ------- FREDDIE MAC (6.5%) 4.500%, 11/20/19 44 44 8.500%, 03/01/20 2 2 6.500%, 10/01/29 60 63 5.000%, 02/01/33 745 746
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->FREDDIE MAC--CONTINUED 5.500%, 05/01/33 $ 23 $ 24 5.000%, 06/01/33 147 147 5.500%, 06/01/33 179 182 5.000%, 07/01/33 265 265 5.500%, 10/01/33 136 139 6.000%, 10/01/33 49 51 6.000%, 12/01/33 201 209 5.000%, 01/01/34 256 255 6.000%, 01/01/34 74 77 6.000%, 01/01/34 128 132 6.500%, 03/01/34 84 88 6.000%, 06/01/34 273 283 6.000%, 07/01/34 181 188 6.500%, 08/01/34 182 191 5.500%, 11/15/34 591 602 ------- 3,688 ------- GINNIE MAE (2.0%) 7.500%, 04/15/29 3 4 7.500%, 01/15/31 6 6 7.500%, 04/15/31 6 6 7.500%, 05/15/31 5 5 7.500%, 05/15/31 19 21 7.000%, 07/15/31 158 169 7.500%, 09/15/31 21 23 7.500%, 10/15/31 36 39 7.500%, 11/15/31 4 5 6.500%, 04/15/32 45 48 6.500%, 07/15/32 38 40 7.500%, 07/15/32 59 63 6.500%, 08/15/32 87 92 6.500%, 11/15/32 43 45 6.500%, 01/15/33 69 73 6.000%, 03/15/33 39 40 6.000%, 04/15/33 131 137
16 CLASSIC INSTITUTIONAL CORE BOND FUND -- CONCLUDED
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->GINNIE MAE--CONTINUED 5.000%, 07/15/33 $ 160 $ 161 5.000%, 08/15/33 156 157 ------- 1,134 ------- Total U.S. Government Agencies (Cost $18,166) 18,382 ------- U.S. TREASURY OBLIGATIONS (32.1%) U.S. TREASURY BONDS (6.5%) 3.875%, 04/15/29 1,100 1,686 5.375%, 02/15/31 1,805 1,960 ------- 3,646 ------- U.S. TREASURY INFLATION PROTECTED NOTES (6.3%) 1.875%, 07/15/13 3,370 3,579 ------- U.S. TREASURY NOTES (19.3%) 2.000%, 11/30/04 4,005 4,005 1.625%, 01/31/05 4,400 4,397 1.500%, 02/28/05 930 928 1.625%, 04/30/05 1,395 1,392 4.250%, 08/15/14 170 173 ------- 10,895 ------- Total U.S. Treasury Obligations (Cost $17,970) 18,120 ------- CASH EQUIVALENTS (6.3%) CREDIT CARD ABS (1.8%) American Express Credit Account Master Trust, Ser 2000-2, Cl A, 2.035%, 09/17/07 (b) 195 195 BA Master Credit Card Trust, Ser 2001-A, Cl A, 1.990%, 06/15/08 (b) 380 381 Bank One Issuance Trust, Ser 2003, Cl A2, 1.920%, 10/15/08 (b) 276 276
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->CREDIT CARD ABS--CONTINUED Citibank Credit Card Issuance Trust, Ser 2002-A5, Cl A5, 1.920%, 09/17/07 (b) $ 143 $ 143 ------- 995 ------- FANNIE MAE (0.6%) Ser 2002-T10, C1 A1, 2.053%, 06/25/32 (b) 57 57 Ser 2002-T13, C1 A1, 2.033%, 08/25/32 (b) 109 109 Ser 2003-T4, C1 A1, 2.043%, 09/26/33 (b) 145 145 ------- 311 ------- FREDDIE MAC (0.1%) Ser T-049, C1 AV, 2.083%, 12/25/32 (b) 66 66 ------- HOME EQUITY ABS (0.6%) Mellon Bank Home Equity Loan Trust, Ser 2001-1, Cl A, 2.150%, 03/20/27 (b) 132 132 MSDWCC Home Equity Line of Credit Trust, Ser 2003-1, Cl A, 2.203%, 11/25/15 (b) 164 164 Residential Funding Mortgage Securities I, Ser 2003-HS1, Cl A2, 2.223%, 12/25/32 (b) 53 53 ------- 349 ------- OTHER ABS (3.2%) Amortizing Residential Collateral Trust, Ser 2002-BC1F, Cl A, 2.213%, 01/25/32 (b) 196 195 Amortizing Residential Collateral Trust, Ser 2002-BC3M, Cl A, 2.203%, 06/25/32 (b) 141 141
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-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->OTHER ABS--CONTINUED Countrywide Home Equity Loan Trust, Ser 2002 B, Cl A1, 2.120%, 04/15/28 (b) $ 326 $ 326 Countrywide Home Equity Loan Trust, Ser 2002 D, Cl A1, 2.110%, 08/15/28 (b) 355 353 Fleet Home Equity Loan Trust, Ser 2003-1, Cl A, 2.160%, 01/20/33 (b) 123 123 Greenpoint Home Equity Loan Trust, Ser 2001-1, Cl A2, 2.330%, 04/15/27 (b) 56 56 Greenpoint Home Equity Loan Trust, Ser 2003-1, Cl A, 2.140%, 04/15/29 (b) 130 130 Merrill Lynch Home Equity Loan, Ser 1997-1, Cl A, 2.113%, 09/25/27 (b) 74 74 Residential Asset Mortgage Products, Inc., Ser 2003- RS2, Cl A2, 2.273%, 03/25/33 (b) 1 1 Wachovia Asset Securitization, Inc., Ser 2002-HE2, Cl A, 2.363%, 12/25/32 (b) 356 357 Wachovia Asset Securitization, Inc., Ser 2003-HE1, Cl A1, 2.223%, 03/25/33 (b) 81 81 ------- 1,837 ------- Total Cash Equivalents (Cost $3,560) 3,558 -------
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- REPURCHASE AGREEMENT (4.7%) Lehman Brothers, 1.745%, dated 10/29/04, to be repurchased on 11/01/04, repurchase price $2,625,560 (collateralized by U.S. Government Agencies; total market value $2,679,677) $2,625 $ 2,625 ------- Total Repurchase Agreement (Cost $2,625) 2,625 ------- Total Investments (Cost $59,418) (a) -- 106.7% 60,230 Liabilities in excess of other assets -- (6.7)% (3,792) ------- Net Assets -- 100.0% $56,438 =======
See notes to schedules of portfolio investments and notes to financial statements. 18 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- ASSET BACKED SECURITIES (1.1%) HOME EQUITY ABS (1.1%) Aames Mortgage Trust, Ser 1999-1, Cl AF, 7.290%, 07/15/29 $ 47 $ 48 Aames Mortgage Trust, Ser 1999-2, Cl AF, 7.589%, 10/15/29 60 62 Cityscape Home Equity Loan Trust, Ser 1996-3, Cl 8, 7.650%, 09/25/25 27 27 Contimortgage Home Equity Loan Trust, Ser 1996-2, Cl A8, 7.900%, 07/15/27 130 129 Delta Funding Home Equity Loan Trust, Ser 1999-3, Cl A1F, 7.462%, 09/15/29 17 18 EQCC Home Equity Loan Trust, Ser 1999-3, Cl A7F, 7.448%, 08/25/30 17 17 New Century Home Equity Loan Trust, Ser 1999-NCB, Cl A4, 7.530%, 09/25/28 4 4 New Century Home Equity Loan Trust, Ser 1999-NCB, Cl A7, 7.540%, 06/25/29 15 16 Soundview Home Equity Loan Trust, Ser 2001-1, Cl A, 6.265%, 04/15/31 65 66 ------- Total Asset Backed Securities (Cost $392) 387 -------
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- CORPORATE BONDS (40.0%) AUTO MANUFACTURERS (0.9%) American Honda Finance Corp., 3.850%, 11/06/08 (c) $ 110 $ 111 DaimlerChrysler NA Holdings Corp., 7.300%, 01/15/12 110 126 Harley Davidson Funding, Inc., 3.625%, 12/15/08 85 85 ------- 322 ------- BANKS (6.7%) Bank of America Corp., 7.400%, 01/15/11 305 357 Bank One Corp., 7.625%, 08/01/05 110 114 BNP US Funding LLC, 7.738%, Callable 12/05/07 @ 100.00 (b) (c) (d) 240 269 Capital One Bank, 5.125%, 02/15/14 130 131 Citigroup, Inc., 5.125%, 05/05/14 310 321 JP Morgan Chase & Co., 6.625%, 03/15/12 400 452 RBS Capital Trust I, 4.709%, Callable 07/01/13 @ 100 (b) (d) 285 279 Societe Generale Real Estate Co. LLC, 7.640%, Callable 09/30/07 @ 100.00 (c) (d) 90 100 Wachovia Corp., 7.550%, 08/18/05 115 120 Wells Fargo & Co., 5.125%, 02/15/07 255 266 ------- 2,409 ------- BEVERAGES (0.4%) Coca-Cola Co., 4.000%, 06/01/05 125 126 ------- BROKERAGE (3.1)% Goldman Sachs Group, Inc. (The), 3.875%, 01/15/09 125 126
19
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->BROKERAGE--CONTINUED Goldman Sachs Group, Inc. (The), 4.750%, 07/15/13 $ 330 $ 327 Merrill Lynch & Co., 3.700%, 04/21/08 55 55 Morgan Stanley, 5.800%, 04/01/07 420 446 Morgan Stanley, 5.300%, 03/01/13 160 166 ------- 1,120 ------- BUILDING MATERIALS (0.4%) American Standard, Inc., 7.625%, 02/15/10 135 155 ------- COMMERCIAL SERVICES (0.6%) ERAC USA Finance Co., 7.350%, 06/15/08 (c) 75 84 R.R. Donnelley & Sons Co., 3.750%, 04/01/09 135 135 ------- 219 ------- COMPUTERS (0.2%) NCR Corp., 7.125%, 06/15/09 70 78 ------- COSMETICS/PERSONAL CARE (0.1)% Gillette Co. (The), 3.750%, 12/01/04 (c) 40 40 ------- DIVERSIFIED FINANCIAL SERVICES (8.5)% CIT Group, Inc., 5.750%, 09/25/07 60 64 CIT Group, Inc., 5.500%, 11/30/07 105 111 CIT Group, Inc., 5.125%, 09/30/14 70 70 Ford Motor Credit Co., 7.000%, 10/01/13 540 570 General Electric Capital Corp., 4.250%, 01/15/08 660 680
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->DIVERSIFIED FINANCIAL SERVICES--CONTINUED General Motors Acceptance Corp., 6.875%, 09/15/11 $ 480 $ 500 Household Finance Corp., 4.125%, 12/15/08 510 518 International Lease Finance Corp., 4.750%, 07/01/09 265 272 MBNA Corp., 7.500%, 03/15/12 120 140 Sallie Mae, Inc., 5.625%, 04/10/07 70 74 ------- 2,999 ------- DIVERSIFIED MANUFACTURING (1.6%) General Electric Co., 5.000%, 02/01/13 160 166 Tyco International Group SA, 6.000%, 11/15/13 360 393 ------- 559 ------- ELECTRIC (2.3%) Calenergy Co., Inc., 7.520%, 09/15/08 100 113 Entergy Gulf States, Inc., 5.200%, 12/03/07, Callable 12/01/04 @ 100.00 140 140 Entergy Gulf States, Inc., 4.875%, 11/01/11, Callable 11/01/06 @ 100.00 65 65 Exelon Generation Co. LLC, 6.950%, 06/15/11 60 68 Florida Power & Light Co., 6.875%, 12/01/05 55 58 Northern States Power Co., 2.875%, 08/01/06 70 70 Oncor Electric Delivery Co., 6.375%, 05/01/12 80 89
20 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND -- CONTINUED
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->ELECTRIC--CONTINUED Pacific Gas & Electric Co., 4.800%, 03/01/14 $ 190 $ 190 Westar Energy, Inc., 6.000%, 07/01/14 40 43 ------- 836 ------- FOREST PRODUCTS & PAPER (0.3%) Weyerhaeuser Co., 6.750%, 03/15/12 85 96 ------- HEALTHCARE -- PRODUCTS (0.6%) Johnson & Johnson, 8.720%, 11/01/24, Callable 11/01/04 @ 104.36 195 204 ------- HEALTHCARE -- SERVICES (0.2%) WellPoint Health Networks, Inc., 6.375%, 06/15/06 55 58 ------- HOME BUILDERS (0.5%) Lennar Corp., 5.950%, 03/01/13 40 42 Pulte Homes, Inc., 4.875%, 07/15/09 130 133 ------- 175 ------- INSURANCE (1.8%) Berkshire Hathaway Financial Corp., 3.375%, 10/15/08 235 235 MetLife, Inc., 5.250%, 12/01/06 55 57 Monumental Global Funding, 5.200%, 01/30/07 (c) 165 173 Prudential Financial, Inc., 3.750%, 05/01/08 75 75 Prudential Financial, Inc., 5.100%, 09/20/14 115 115 ------- 655 ------- INVESTMENT COMPANIES (0.4%) Credit Suisse First Boston USA, Inc., 6.500%, 01/15/12 135 151 -------
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- MACHINERY (0.2%) John Deere Capital Corp., 3.900%, 01/15/08 $ 85 $ 86 ------- MEDIA (2.2%) British Sky Broadcasting Group PLC, 6.875%, 02/23/09 120 133 Comcast Cable Communications, Inc., 7.125%, 06/15/13 190 218 News America Holdings, Inc., 9.250%, 02/01/13 135 175 Time Warner, Inc., 6.750%, 04/15/11 110 124 Univision Communications, Inc., 7.850%, 07/15/11 130 154 ------- 804 ------- MINING (1.3%) Barrick Gold Finance, Inc., 7.500%, 05/01/07 75 82 Codelco, Inc., 5.500%, 10/15/13 (c) 145 152 Inco, Ltd., 7.750%, 05/15/12 190 226 ------- 460 ------- OIL & GAS (2.4%) BP Capital Markets PLC, 4.000%, 04/29/05 160 161 Devon Financing Corp., ULC, 6.875%, 09/30/11 145 166 Enterprise Products Operations, Inc., 5.600%, 10/15/14 (c) 205 209 Motiva Enterprises LLC, 5.200%, 09/15/12 (c) 115 120 Phillips Petroleum Co., 6.375%, 03/30/09 55 61 Phillips Petroleum Co., 8.750%, 05/25/10 105 130 ------- 847 -------
21
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- PACKAGING & CONTAINERS (0.3%) Packaging Corp. of America, 5.750%, 08/01/13 $ 115 $ 119 ------- PIPELINES (1.4%) Centerpoint Energy Resources Co., Ser B, 7.875%, 04/01/13 190 227 Kinder Morgan, Inc., 6.500%, 09/01/12 105 116 Panhandle Eastern Pipeline, 2.750%, 03/15/07 55 54 Panhandle Eastern Pipeline, Ser B, 4.800%, 08/15/08 115 119 ------- 516 ------- PROPERTY AND CASUALTY INSURANCE (0.3%) Fund American Cos., Inc., 5.875%, 05/15/13 100 102 ------- SAVINGS & LOANS (0.3%) Golden West Financial Corp., 4.125%, 08/15/07 115 118 ------- TELECOMMUNICATIONS (3.0%) Deutsche Telekom International Finance, Corp., 8.500%, 06/15/10 (e) 90 108 SBC Communications, Inc., 5.625%, 06/15/16 220 228 Sprint Capital Corp., 8.375%, 03/15/12 255 312
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->TELECOMMUNICATIONS--CONTINUED TELUS Corp., 8.000%, 06/01/11 $ 130 $ 154 Verizon Global Funding Corp., 7.250%, 12/01/10 245 286 ------- 1,088 ------- Total Corporate Bonds (Cost $13,888) 14,342 ------- FOREIGN GOVERNMENT BOND (0.9%) MEXICO (0.9%) United Mexican States, 6.375%, 01/16/13 305 324 ------- Total Foreign Government Bond (Cost $307) 324 ------- U.S. GOVERNMENT AGENCIES (0.6%) FANNIE MAE (0.4%) 6.000%, 07/01/09 145 149 ------- FREDDIE MAC (0.2%) 6.500%, 08/01/08 69 71 ------- Total U.S. Government Agencies (Cost $218) 220 ------- U.S. TREASURY OBLIGATIONS (54.8%) U.S. TREASURY INFLATION PROTECTED NOTES (11.4%) 3.875%, 02/15/13 4,080 4,081 ------- U.S. TREASURY NOTES (43.4%) 2.000%, 11/30/04 2,675 2,675 1.625%, 01/31/05 5,200 5,196 1.500%, 02/28/05 1,685 1,682 1.625%, 04/30/05 1,360 1,357 4.375%, 08/15/12 50 52
22 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND -- CONCLUDED
-------------------------------------------------------- Principal Amount Value -------------------------------------------------------- <->U.S. TREASURY NOTES--CONTINUED 1.875%, 07/15/13 $3,355 $ 3,563 4.250%, 08/15/14 1,030 1,048 ------- 15,573 ------- Total U.S. Treasury Obligations (Cost $19,491) 19,654 ------- REPURCHASE AGREEMENT (4.1%) Lehman Brothers, 1.745%, dated 10/29/04, to be repurchased on 11/01/04, repurchase price $1,474,470 (collateralized by U.S. Government Agencies; total market value $1,506,059) 1,474 1,474 ------- Total Repurchase Agreement (Cost $1,474) 1,474 ------- Total Investments (Cost $35,770) (a) -- 101.5% 36,401 Liabilities in excess of other assets -- (1.5)% (550) ------- Net Assets -- 100.0% $35,851 =======
See notes to schedules of portfolio investments and notes to financial statements. 23 SEIX INSTITUTIONAL HIGH YIELD FUND
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ CORPORATE BONDS (95.8%) AEROSPACE/DEFENSE (0.5%) L-3 Communications Corp., 7.625%, 06/15/12, Callable 06/15/07 @ 103.81 $ 6,333 $ 6,998 L-3 Communications Corp., Ser B, 8.000%, 08/01/08, Callable 12/13/04 @ 102.67 1,176 1,211 ---------- 8,209 ---------- AGRICULTURE (0.6%) Gold Kist, Inc., 10.250%, 03/15/14, Callable 03/15/09 @ 105.12 (c) 3,557 3,922 Seminis, Inc., 10.250%, 10/01/13, Callable 10/01/08 @ 105.13 5,315 5,952 ---------- 9,874 ---------- APPAREL (0.1%) William Carter Co. (The), Ser B, 10.875%, 08/15/11, Callable 08/15/06 @ 105.44 1,049 1,175 ---------- AUTO MANUFACTURERS (0.1%) Navistar International Corp., 7.500%, 06/15/11, Callable 06/15/08 @ 103.75 1,256 1,356 ---------- BEVERAGES (0.4%) Constellation Brands, Inc., 8.625%, 08/01/06 4,315 4,676 Constellation Brands, Inc., Ser B, 8.125%, 01/15/12, Callable 01/15/07 @ 104.06 1,356 1,485 ---------- 6,161 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ BIOTECHNOLOGY (0.0%) Bio-Rad Laboratories, Inc., 7.500%, 08/15/13, Callable 08/15/08 @ 103.75 $ 500 $ 541 ---------- BUILDING MATERIALS (1.1%) Ainsworth Lumber, 5.669%, 10/01/10, Callable 10/01/06 @ 102.00 (b) (c) 1,835 1,853 Ainsworth Lumber, 7.250%, 10/01/12, Callable 10/01/08 @ 103.63 (c) 3,650 3,696 American Standard, Inc., 7.375%, 02/01/08 2,675 2,956 Building Materials Corp., 7.750%, 08/01/14, Callable 08/01/09 @ 103.88 (c) 2,090 2,074 Ply Gem Industries, Inc., 9.000%, 02/15/12, Callable 02/15/08 @ 104.50 (c) 1,340 1,337 THL Buildco, Inc., 8.500%, 09/01/14, Callable 09/01/09 @ 104.25 (c) 4,295 4,553 US Concrete, Inc., 8.375%, 04/01/14, Callable 04/01/09 @ 104.88 2,810 3,003 ---------- 19,472 ---------- CHEMICALS (2.4%) Acetex Corp., 10.875%, 08/01/09, Callable 08/01/05 @ 105.44 1,991 2,190 Airgas, Inc., 6.250%, 07/15/14, Callable 07/15/09 @ 103.13 1,380 1,394 ARCO Chemical Co., 10.250%, 11/01/10 4,425 4,956
24 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->CHEMICALS--CONTINUED FMC Corp., 10.250%, 11/01/09, Callable 11/01/06 @ 105.13 $ 8,872 $ 10,291 FMC Corp., Ser A, 7.000%, 05/15/08 997 1,047 Huntsman LLC, 11.625%, 10/15/10, Callable 10/15/07 @ 105.81 5,036 5,936 Lyondell Chemical Co., 11.125%, 07/15/12, Callable 07/15/07 @105.56 4,156 4,899 MacDermid, Inc., 9.125%, 07/15/11, Callable 07/15/06 @ 104.56 3,785 4,230 Nalco Co., 7.750%, 11/15/11, Callable 11/15/07 @ 103.88 5,470 5,921 ---------- 40,864 ---------- COAL (0.8%) Foundation PA Coal Co., 7.250%, 08/01/14, Callable 08/01/09 @ 103.63 (c) 913 976 Luscar Coal Ltd, 9.750%, 10/15/11, Callable 10/15/06 @ 104.88 3,662 4,175 Massey Energy Co., 6.625%, 11/15/10, Callable 11/15/07 @ 103.31 2,835 2,955 Peabody Energy Corp., 5.875%, 04/15/16, Callable 04/15/09 @ 102.94 1,775 1,811 Peabody Energy Corp., Ser B, 6.875%, 03/15/13, Callable 03/15/08 @ 103.44 3,389 3,719 ---------- 13,636 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ COMMERCIAL SERVICES (3.4%) Alderwoods Group, Inc., 7.750%, 09/15/12, Callable 09/15/08 @ 103.38 (c) $ 2,295 $ 2,479 Corrections Corp. of America, 9.875%, 05/01/09, Callable 05/01/06 @ 104.94 5,121 5,761 Corrections Corp. of America, 7.500%, 05/01/11, Callable 05/01/07 @ 103.75 7,735 8,363 Geo Group, Inc., 8.250%, 07/15/13, Callable 07/15/08 @ 104.13 3,495 3,670 Rent-A-Center, Ser B, 7.500%, 05/01/10, Callable 05/01/06 @ 103.75 6,482 6,717 Service Corp. International, 7.200%, 06/01/06 3,872 4,046 Service Corp. International, 6.875%, 10/01/07 3,040 3,215 Service Corp. International, 6.500%, 03/15/08 680 714 Service Corp. International, 7.700%, 04/15/09 11,213 12,306 Service Corp. International, 7.875%, 02/01/13 63 69 Stewart Enterprises, 10.750%, 07/01/08, Callable 07/01/05 @ 105.38 10,494 11,543 ---------- 58,883 ----------
25
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ COMPUTERS (1.1%) Seagate Technology HDD Holdings, 8.000%, 05/15/09, Callable 05/15/06 @ 104.00 $ 3,639 $ 3,935 Unisys Corp., 8.125%, 06/01/06 3,917 4,162 Unisys Corp., 6.875%, 03/15/10 9,218 9,863 ---------- 17,960 ---------- COSMETICS/PERSONAL CARE (0.2%) Elizabeth Arden, Inc., 7.750%, 01/15/14, Callable 01/15/09 @ 103.88 3,440 3,668 ---------- DIVERSIFIED FINANCIAL SERVICES (0.8%) Borden U.S. Financial/Nova Scotia, 9.000%, 07/15/14, Callable 07/15/09 @ 104.50 (c) 3,480 3,806 Consolidated Communication Holdings, 9.750%, 04/01/12, Callable 04/01/08 @ 104.88 (c) 2,015 2,086 Jostens IH Corp., 7.625%, 10/01/12, Callable 10/01/08 @ 103.81 (c) 4,260 4,409 UGS Corp., 10.000%, 06/01/12, Callable 06/01/08 @ 105.00 (c) 3,708 4,153 ---------- 14,454 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ DIVERSIFIED OPERATIONS (0.2%) Leucadia National Corp., 7.000%, 08/15/13 $ 2,450 $ 2,499 Leucadia National Corp., 8.650%, 01/15/27, Callable 01/15/07 @ 104.28 1,450 1,494 ---------- 3,993 ---------- ELECTRIC (10.2%) AES Corp. (The), 9.375%, 09/15/10 700 819 AES Corp. (The), 8.750%, 05/15/13, Callable 05/15/08 @ 104.38 (c) 17,847 20,613 Aquila, Inc., 7.950%, 02/01/11 960 1,080 Aquila, Inc., 11.875%, 07/01/12 2,860 3,918 BRL Universal Equipment LP, 8.875%, 02/15/08, Callable 02/15/05 @ 104.44 8,264 8,719 Edison Mission Energy, 10.000%, 08/15/08 490 572 Edison Mission Energy, 9.875%, 04/15/11 12,225 14,456 FirstEnergy Corp, Ser B, 6.450%, 11/15/11 15,945 17,471 FPL Energy Wind Funding, 6.876%, 06/27/17 (c) 3,453 3,565 General Cable Corp., 9.500%, 11/15/10, Callable 11/15/07 @ 104.75 6,448 7,286 Homer City Funding LLC, 8.137%, 10/01/19 2,671 2,991 Homer City Funding LLC, 8.734%, 10/01/26 3,621 4,074
26 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->ELECTRIC--CONTINUED Kansas Gas & Electric Co., 8.290%, 03/29/16, Callable 12/17/04 @ 103.32 $ 1,100 $ 1,136 Legrand Holding S.A., 8.500%, 02/15/25 535 614 Legrand Holding SA, 10.500%, 02/15/13, Callable 02/15/08 @ 105.25 3,485 4,077 Midwest Generation LLC, 8.750%, 05/01/34, Callable 05/01/09 @ 104.38 601 681 Midwest Generation LLC, Ser A, 8.300%, 07/02/09 2,475 2,667 Midwest Generation LLC, Ser B, 8.560%, 01/02/16 10,800 11,880 MSW Energy Holdings/ Finance, 8.500%, 09/01/10, Callable 09/01/07 @ 104.25 4,290 4,698 MSW Energy Holdings/ Finance, Ser B, 7.375%, 09/01/10, Callable 09/01/07 @ 103.69 6,326 6,642 NRG Energy, Inc., 8.000%, 12/15/13, Callable 12/15/08 @ 104.00 (c) 10,208 11,242 PSEG Energy Holdings, 7.750%, 04/16/07 6,498 6,953 PSEG Energy Holdings, 8.625%, 02/15/08 18,685 20,646 PSEG Energy Holdings, 10.000%, 10/01/09 4,646 5,598
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->ELECTRIC--CONTINUED Sithe/Independence Funding Corp., Ser A, 8.500%, 06/30/07 $ 2,052 $ 2,180 Sithe/Independence Funding Corp., Ser A, 9.000%, 12/30/13 6,600 7,514 ---------- 172,092 ---------- ELECTRONICS (1.0%) Celestica, Inc., 7.875%, 07/01/11, Callable 07/01/08 @ 103.94 1,903 2,036 Sanmina-SCI Corp., 3.000%, 03/15/07, Callable 12/10/04 @ 101.29 1,235 1,193 Sanmina-SCI Corp., 10.375%, 01/15/10, Callable 01/15/07 @ 105.19 11,866 13,913 ---------- 17,142 ---------- ENERGY -- ALTERNATIVE SERVICES (0.7%) AES Ironwood LLC, 8.857%, 11/30/25 963 1,069 AES Red Oak LLC, Ser A, 8.540%, 11/30/19 1,612 1,781 AES Red Oak LLC, Ser B, 9.200%, 11/30/29 2,200 2,497 Salton Sea Funding Corp., Ser C, 7.840%, 05/30/10 4,953 5,370 Salton Sea Funding Corp., Ser F, 7.475%, 11/30/18 1,259 1,366 ---------- 12,083 ---------- ENTERTAINMENT (3.0%) Alliance Atlantis Communications, 13.000%, 12/15/09, Callable 12/15/04 @ 106.50 7,668 8,243
27
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->ENTERTAINMENT--CONTINUED Argosy Gaming Co., 9.000%, 09/01/11, Callable 09/01/06 @ 104.50 $ 8,116 $ 9,150 Argosy Gaming Co., 7.000%, 01/15/14, Callable 01/15/09 @ 103.5 6,175 6,576 Capitol Records, Inc., 8.375%, 05/15/09 (c) 5,623 6,270 Choctaw Resort Development Entertainment, 9.250%, 04/01/09, Callable 04/01/05 @ 104.63 5,425 5,818 Choctaw Resort Development Entertainment, 7.250%, 11/15/19, Callable 11/15/11 @ 103.63 (c) 1,315 1,343 Intrawest Corp., 7.500%, 10/15/13, Callable 10/15/08 @ 103.75 (c) 1,835 1,963 Isle of Capri Casinos, Inc., 9.000%, 03/15/12, Callable 03/15/07 @ 104.50 2,705 3,030 Penn National Gaming, Inc., 8.875%, 03/15/10, Callable 03/15/06 @ 104.44 2,025 2,233 Penn National Gaming, Inc., Ser B, 11.125%, 03/01/08, Callable 03/01/05 @ 105.56 3,195 3,455 Warner Music Group, 7.375%, 04/15/14, Callable 04/15/09 @ 103.69 (c) 2,942 3,023 ---------- 51,104 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ ENVIRONMENT CONTROL (0.9%) Allied Waste North America, Inc., Ser B, 8.500%, 12/01/08 $ 10,882 $ 11,426 Allied Waste North America, Inc., Ser B, 9.250%, 09/01/12, Callable 09/01/07 @ 104.63 600 648 Casella Waste Systems, 9.750%, 02/01/13, Callable 02/01/08 @ 104.88 2,675 2,943 ---------- 15,017 ---------- FOOD (2.1%) B&G Foods Holding Corp., 8.000%, 10/01/11, Callable 10/01/08 @ 104.00 1,730 1,825 Dean Foods Co., 8.150%, 08/01/07 13,292 14,422 Del Monte Corp., 8.625%, 12/15/12, Callable 12/15/07 @ 104.31 1,097 1,237 Smithfield Foods, Inc., Ser B, 8.000%, 10/15/09 3,957 4,392 Smithfield Foods, Inc., Ser B, 7.750%, 05/15/13 5,015 5,542 Stater Brothers Holdings, Inc., 5.380%, 06/15/10 (b) 2,159 2,191 Stater Brothers Holdings, Inc., 8.125%, 06/15/12, Callable 06/15/08 @ 104.06 1,742 1,847
28 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->FOOD--CONTINUED Swift & Co., 12.500%, 01/01/10, Callable 10/01/06 @ 106.25 $ 955 $ 1,062 United Agricultural Products, 8.250%, 12/15/11, Callable 12/15/07 @ 104.13 (c) 3,435 3,710 ---------- 36,228 ---------- FOREST PRODUCTS & PAPER (3.9%) Appleton Papers, Inc., 8.125%, 06/15/11, Callable 06/15/08 @ 104.06 2,601 2,738 Appleton Papers, Inc., Ser B, 9.750%, 06/15/14, Callable 06/15/09 @ 104.88 1,509 1,577 Boise Cascade LLC, 5.005%, 10/15/12, Callable 12/09/04 @ 103.00 (b) (c) 8,132 8,315 Boise Cascade LLC, 7.125%, 10/15/14, Callable 10/15/09 @ 103.56 (c) 2,600 2,714 Cascades, Inc., 7.250%, 02/15/13, Callable 02/15/08 @ 103.63 9,801 10,584 Georgia Pacific Corp., 7.375%, 07/15/08 8,222 9,044 Georgia Pacific Corp., 8.875%, 02/01/10 7,457 8,781 Georgia Pacific Corp., 8.125%, 05/15/11 6,677 7,795 Georgia Pacific Corp., 9.500%, 12/01/11 2,150 2,677
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->FOREST PRODUCTS & PAPER--CONTINUED Georgia Pacific Corp., 8.875%, 05/15/31 $ 7,814 $ 9,631 Millar Western Forest Products Ltd., 7.750%, 11/15/13, Callable 11/15/08 @ 103.88 3,225 3,443 ---------- 67,299 ---------- HEALTHCARE -- PRODUCTS (1.0%) Dade Behring, Inc., 11.910%, 10/03/10, Callable 10/03/05 @ 105.95 5,527 6,259 Kinetic Concepts, Inc., 7.375%, 05/15/13, Callable 05/15/08 @ 103.69 2,241 2,353 Sybron Dental Specialties, Inc., 8.125%, 06/15/12, Callable 06/15/07 @ 104.06 2,542 2,771 Universal Hospital Services, Inc., 10.125%, 11/01/11, Callable 11/01/07 @ 105.06 5,245 5,350 ---------- 16,733 ---------- HEALTHCARE -- SERVICES (3.7%) Coventry Health Care, Inc., 8.125%, 02/15/12, Callable 02/15/07 @ 104.06 5,418 5,851 HCA, Inc., 8.750%, 09/01/10 6,578 7,585 HCA, Inc., 7.875%, 02/01/11 1,862 2,061 HCA, Inc., 6.950%, 05/01/12 6,870 7,244 HCA, Inc., 6.300%, 10/01/12 2,468 2,498 HCA, Inc., 7.500%, 11/06/33 1,525 1,527 HCA, Inc., 7.500%, 11/15/95 6,951 6,484 Iasis Healthcare Corp., 8.750%, 06/15/14, Callable 06/15/09 @ 104.38 (c) 4,533 4,873
29
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->HEALTHCARE -- SERVICES--CONTINUED Mariner Health Care, Inc., 8.250%, 12/15/13, Callable 12/15/08 @ 104.12 (c) $ 2,860 $ 3,246 Pacificare Health Systems, 10.750%, 06/01/09, Callable 06/01/06 @ 105.38 4,687 5,402 Select Medical Corp., 9.500%, 06/15/09, Callable 06/15/05 @ 104.75 683 739 Select Medical Corp., 7.500%, 08/01/13, Callable 08/01/08 @ 103.75 1,042 1,196 Triad Hospitals, Inc., 7.000%, 05/15/12, Callable 05/15/08 @ 103.50 13,195 14,119 Triad Hospitals, Inc., 7.000%, 11/15/13, Callable 11/15/08 @ 103.50 2 2 ---------- 62,827 ---------- HOME BUILDERS (0.7%) K Hovnanian Enterprises, Inc., 8.000%, 04/01/12, Callable 04/01/07 @ 104.00 1,825 2,026 K Hovnanian Enterprises, Inc., 6.375%, 12/15/14 1,000 1,013 Meritage Homes Corp., 9.750%, 06/01/11, Callable 06/01/06 @ 104.88 3,255 3,628 Ryland Group, Inc., 9.750%, 09/01/10, Callable 09/01/05 @ 104.88 2,653 2,912 Standard Pacific Corp., 6.500%, 10/01/08 1,588 1,663 Standard Pacific Corp., 6.875%, 05/15/11 1,340 1,414 ---------- 12,656 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ HOUSEHOLD PRODUCTS/WARES (0.1%) Scotts Co., 6.625%, 11/15/13, Callable 11/15/08 @ 103.31 $ 1,737 $ 1,833 ---------- INSURANCE (1.1%) AFC Capital Trust I, Ser B, 8.207%, 02/03/27 3,797 3,915 Allmerica Financial Corp., 7.625%, 10/15/25 1,525 1,560 Crum & Forster Holdings Corp., 10.375%, 06/15/13, Callable 06/15/08 @ 105.19 524 561 Fairfax Financial Holdings Ltd., 7.750%, 04/26/12 550 535 Fairfax Financial Holdings Ltd., 7.375%, 04/15/18 5,061 4,465 Fairfax Financial Holdings Ltd., 7.750%, 07/15/37 4,350 3,654 Markel Capital Trust I, Ser B, 8.710%, 01/01/46, Callable 01/01/07 @ 104.36 4,000 4,217 ---------- 18,907 ---------- LEISURE TIME (0.1%) K2, Inc., 7.375%, 07/01/14, Callable 07/01/09 @ 103.69 (c) 2,090 2,278 ---------- LODGING (6.2%) Ameristar Casinos, Inc., 10.750%, 02/15/09, Callable 02/15/06 @ 105.38 5,731 6,533 Boyd Gaming Corp., 7.750%, 12/15/12, Callable 12/15/07 @ 103.88 2,050 2,260 Boyd Gaming Corp., 6.750%, 04/15/14, Callable 04/15/09 @ 103.38 4,860 5,097 Caesars Entertainment, 7.500%, 09/01/09 5,887 6,652
30 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->LODGING--CONTINUED Chumash Casino & Resort Enterprise, 9.000%, 07/15/10, Callable 07/15/06 @ 104.50 (c) $ 3,058 $ 3,417 Hilton Hotels Corp, 8.250%, 02/15/11 5,079 6,055 Kerzner International Ltd, 8.875%, 08/15/11, Callable 08/15/06 @ 104.44 1,546 1,704 Mandalay Resort Group, 9.500%, 08/01/08 4,018 4,626 Mandalay Resort Group, Ser B, 10.250%, 08/01/07 20,936 23,867 MGM Mirage, Inc., 9.750%, 06/01/07 6,920 7,785 MGM Mirage, Inc., 6.000%, 10/01/09 1,625 1,682 MGM Mirage, Inc., 8.500%, 09/15/10 18,079 20,791 Station Casinos, Inc., 6.000%, 04/01/12, Callable 04/01/08 @ 102.25 4,990 5,215 Station Casinos, Inc., 6.500%, 02/01/14, Callable 02/01/09 @ 102.44 5,624 5,933 Venetian Casino Resort LLC, 11.000%, 06/15/10, Callable 06/15/06 @ 105.50 3,775 4,337 ---------- 105,954 ---------- MACHINERY -- DIVERSIFIED (0.3%) Dresser-Rand Group, Inc., 7.375%, 11/01/14, Callable 11/01/09 @ 103.69 (c) 1,800 1,886 NMGH Holding Co., 10.000%, 05/15/09, Callable 05/15/06 @ 105.00 2,630 2,909 ---------- 4,795 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ MEDIA (14.0%) CanWest Media, Inc., Ser B, 7.625%, 04/15/13, Callable 04/15/08 @ 103.81 $ 8,367 $ 9,099 CORUS Entertainment, Inc., 8.750%, 03/01/12, Callable 03/01/07 @ 104.38 3,286 3,664 CSC Holdings, Inc., 7.250%, 07/15/08 5,045 5,354 CSC Holdings, Inc., 10.500%, 05/15/16, Callable 05/15/06 @ 105.25 5,370 6,135 Dex Media East Finance, 9.875%, 11/15/09, Callable 11/15/06 @ 104.94 9,233 10,618 Dex Media West Finance, Ser B, 8.500%, 08/15/10, Callable 08/15/07 @ 104.25 2,505 2,856 Dex Media West Finance, Ser B, 9.875%, 08/15/13, Callable 08/15/08 @ 104.94 10,417 12,318 Dex Media, Inc., 9.000%, 11/15/13, Callable 11/15/08 @ 104.50 (e) 2,870 2,181 Dex Media, Inc., 9.000%, 11/15/13, Callable 11/15/08 @ 104.50 (e) 1,145 870
31
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->MEDIA--CONTINUED Directv Holdings, 8.375%, 03/15/13, Callable 03/15/08 @ 104.19 $ 30,442 $ 34,705 EchoStar DBS Corp., 5.256%, 10/01/08, Callable Call 10/01/05 @ 102.00 (b) 4,830 5,023 EchoStar DBS Corp., 5.750%, 10/01/08 10,971 11,218 EchoStar DBS Corp., 9.125%, 01/15/09, Callable 01/15/06 @ 104.56 10,489 11,695 EchoStar DBS Corp., 6.375%, 10/01/11 8,215 8,513 EchoStar DBS Corp., 6.625%, 10/01/14 (c) 6,545 6,692 Emmis Operating Co., 6.875%, 05/15/12, Callable 05/15/08 @ 103.44 4,141 4,348 Entravision Communications Corp., 8.125%, 03/15/09, Callable 03/15/06 @ 104.06 1,464 1,570 Gray Television, Inc., 9.250%, 12/15/11, Callable 12/15/06 @ 104.62 3,435 3,869 Hollinger Participation Trust, 12.125%, 11/15/10 (c) 8,374 10,216 Kabel Deutschland GMBH, 10.625%, 07/01/14, Callable 07/01/09 @ 105.31 (c) 8,400 9,408 MediaNews Group, Inc., 6.875%, 10/01/13, Callable 10/01/08 @ 103.44 3,336 3,461
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->MEDIA--CONTINUED Morris Publishing Group, 7.000%, 08/01/13, Callable 08/01/08 @ 103.50 $ 4,200 $ 4,284 Quebecor Media, Inc., 11.125%, 07/15/11, Callable 07/15/06 @ 105.56 885 1,024 Radio One, Inc., Ser B, 8.875%, 07/01/11, Callable 07/01/06 @ 104.44 7,725 8,536 Readers Digest Association, Inc., 6.500%, 03/01/11, Callable 03/01/08 @ 103.25 6,136 6,366 RH Donnelley Finance Corp., 8.875%, 12/15/10, Callable 12/15/06 @ 104.44 1,350 1,532 RH Donnelley Finance Corp., 10.875%, 12/15/12, Callable 12/15/07 @ 105.44 3,475 4,248 RH Donnelley Finance Corp., 10.875%, 12/15/12, Callable 12/15/07 @ 105.44 15,156 18,529 Rogers Cablesystem Ltd., 11.000%, 12/01/15, Callable 12/01/05 @ 105.50 670 757 Shaw Communications, Inc., 8.250%, 04/11/10 11,206 12,859 Shaw Communications, Inc., 7.250%, 04/06/11 210 231 Shaw Communications, Inc., 7.200%, 12/15/11 2,865 3,152 Sinclair Broadcast Group, Inc., 8.750%, 12/15/11, Callable 12/15/06 @ 104.38 7,843 8,549
32 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->MEDIA--CONTINUED Susquehanna Media Co., 7.375%, 04/15/13, Callable 04/15/08 @ 103.69 $ 2,355 $ 2,490 Videotron Ltee, 6.875%, 01/15/14, Callable 01/15/09 @ 103.44 880 924 ---------- 237,294 ---------- MINING (0.1%) Century Aluminum Co., 7.500%, 08/15/14, Callable 08/15/09 @ 103.75 (c) 1,690 1,791 ---------- MISCELLANEOUS MANUFACTURER (0.3%) Koppers, Inc., 9.875%, 10/15/13, Callable 10/15/08 @ 104.94 1,881 2,126 SPX Corp., 6.250%, 06/15/11 2,065 2,106 SPX Corp., 7.500%, 01/01/13, Callable 01/01/08 @ 103.75 496 531 ---------- 4,763 ---------- OFFICE / BUSINESS EQUIPMENT (1.1%) Xerox Capital Trust I, 9.750%, 01/15/09 10,449 12,251 Xerox Capital Trust I, 8.000%, 02/01/27, Callable 02/01/07 @ 102.45 6,920 6,920 ---------- 19,171 ---------- OIL & GAS (8.1%) AmeriGas Partners/Eagle Finance, Ser B, 8.875%, 05/20/11, Callable 05/20/06 @ 104.44 4,782 5,236 AmeriGas Partners/Eagle Finance, Ser D, 10.000%, 04/15/06 1,030 1,118
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->OIL & GAS--CONTINUED Chesapeake Energy Corp., 8.375%, 11/01/08, Callable 11/01/05 @ 104.19 $ 2,363 $ 2,576 Chesapeake Energy Corp., 9.000%, 08/15/12, Callable 08/15/07 @ 104.50 5,428 6,256 Chesapeake Energy Corp., 7.500%, 09/15/13, Callable 09/15/08 @ 103.75 12,757 14,223 Chesapeake Energy Corp., 7.500%, 06/15/14, Callable 06/15/09 @ 103.75 139 155 Chesapeake Energy Corp., 7.750%, 01/15/15, Callable 01/15/08 @ 103.88 3,840 4,262 Chesapeake Energy Corp., 6.875%, 01/15/16, Callable 01/15/09 @ 103.44 3,638 3,893 Citgo Petroleum Corp, 6.000%, 10/15/11, Callable 10/15/08 @ 103.00 (c) 3,240 3,297 CITGO Petroleum Corp., 7.875%, 05/15/06 615 653 Encore Acquisition Co., 8.375%, 06/15/12, Callable 06/15/07 @ 104.19 1,837 2,039 Encore Acquisition Co., 6.250%, 04/15/14, Callable 04/15/09 @ 103.13 1,360 1,394 Enterprise Products Operations, Inc., 5.600%, 10/15/14 (c) 15,705 16,003 Evergreen Resources, Inc., 5.875%, 03/15/12, Callable 03/15/08 @ 102.94 2,750 2,833
33
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->OIL & GAS--CONTINUED EXCO Resources, Inc., 7.250%, 01/15/11, Callable 01/15/07 @ 105.44 $ 7,213 $ 7,808 FerrellGas Partners, LP, 8.750%, 06/15/12, Callable 06/15/07 @ 104.38 6,054 6,584 FerrellGas Partners, LP, 6.750%, 05/01/14, Callable 05/01/09 @ 103.38 2,681 2,775 Forest Oil Corp., 8.000%, 06/15/08 7,334 8,141 Forest Oil Corp., 8.000%, 12/15/11 4,648 5,299 Frontier Oil Corp., 6.625%, 10/01/11, Callable 10/01/07 @ 103.31 (c) 1,020 1,056 Premcor Refining Group, Inc., 9.250%, 02/01/10, Callable 02/01/07 @ 104.63 6,667 7,584 Premcor Refining Group, Inc., 6.750%, 02/01/11 5,592 6,053 Premcor Refining Group, Inc., 6.125%, 05/01/11 2,576 2,718 Premcor Refining Group, Inc., 7.750%, 02/01/12, Callable 02/01/08 @103.88 5,250 5,814 Premcor Refining Group, Inc., 9.500%, 02/01/13, Callable 02/01/08 @ 104.75 1,123 1,325 Swift Energy Co., 7.625%, 07/15/11, Callable 07/15/08 @ 103.81 3,415 3,705 Swift Energy Co., 9.375%, 05/01/12, Callable 05/01/07 @ 104.69 2,686 3,035
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->OIL & GAS--CONTINUED Western Oil Sands, Inc., 8.375%, 05/01/12 $ 8,119 $ 9,468 XTO Energy, Inc., 5.000%, 01/01/49 (c) 3,325 3,336 ---------- 138,639 ---------- OTHER ABS (0.1%) Canada, Inc., 8.000%, 09/15/12, Callable 09/15/11 @ 100 (c) 2,220 2,325 ---------- PACKAGING & CONTAINERS (4.5%) Ball Corp., 7.750%, 08/01/06 250 268 Ball Corp., 6.875%, 12/15/12, Callable 12/15/07 @ 103.44 5,515 6,011 Berry Plastics, 10.750%, 07/15/12, Callable 07/15/07 @ 105.38 2,125 2,444 CROWN EURO Holdings SA, 9.500%, 03/01/11, Callable 03/01/07 @ 104.75 7,620 8,687 CROWN EURO Holdings SA, 10.875%, 03/01/13, Callable 03/01/08 @ 105.44 5,986 7,108 Graphic Packaging International, 9.500%, 08/15/13, Callable 08/15/08 @ 104.75 3,430 3,953 Jefferson Smurfit Corp., 8.250%, 10/01/12, Callable 10/01/07 @ 104.12 5,760 6,394 Jefferson Smurfit Corp., 7.500%, 06/01/13, Callable 06/01/08 @ 103.75 8,345 9,096 Owens-Brockway Glass Container, 8.875%, 02/15/09, Callable 02/15/06 @ 104.44 5,655 6,206
34 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->PACKAGING & CONTAINERS--CONTINUED Owens-Brockway Glass Container, 7.750%, 05/15/11, Callable 05/15/07 @ 103.88 $ 1,905 $ 2,072 Owens-Brockway Glass Container, 8.750%, 11/15/12, Callable 11/15/07 @ 104.38 8,880 10,012 Plastipak Holdings, Inc., 10.750%, 09/01/11, Callable 09/01/06 @ 105.38 1,440 1,613 Silgan Holdings, Inc., 6.750%, 11/15/13, Callable 11/15/08 @ 103.38 4,637 4,776 Stone Container Corp., 9.250%, 02/01/08 2,740 3,083 Stone Container Corp., 9.750%, 02/01/11, Callable 02/01/06 @ 104.88 1,800 2,007 Stone Container Corp., 8.375%, 07/01/12, Callable 07/01/07 @ 104.19 2,309 2,551 ---------- 76,281 ---------- PIPELINES (2.9%) Dynegy Holdings, Inc., 10.125%, 07/15/13, Callable 07/15/08 @ 105.06 (c) 9,190 10,706 MarkWest Energy Partners, 6.875%, 11/01/14 (c) 2,005 2,045 Transcontinental Gas Pipe Line Corp., Ser B, 8.875%, 07/15/12 1,015 1,254 TransMontaigne, Inc., 9.125%, 06/01/10, Callable 06/01/07 @ 104.56 1,698 1,889
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->PIPELINES--CONTINUED Williams Cos., Inc., 7.125%, 09/01/11 $ 18,100 $ 20,272 Williams Cos., Inc., 8.125%, 03/15/12 (b) 8,130 9,553 Williams Cos., Inc., 8.750%, 03/15/32 2,595 2,945 ---------- 48,664 ---------- REAL ESTATE (1.2%) CB Richard Ellis Services, 9.750%, 05/15/10, Callable 05/15/07 @ 104.88 2,451 2,794 CB Richard Ellis Services, 11.250%, 06/15/11, Callable 06/15/06 @ 105.63 2,755 3,223 LNR Property Corp., 7.625%, 07/15/13, Callable 07/15/08 @ 103.81 6,460 7,203 LNR Property Corp., Ser A, 7.250%, 10/15/13, Callable 10/15/08 @ 103.63 7,340 8,074 ---------- 21,294 ---------- REITS (2.5%) Health Care, Inc., (REIT), 6.000%, 11/15/13 4,765 4,929 Host Marriott LP (REIT), 7.125%, 11/01/13, Callable 11/01/08 @ 103.56 3,455 3,731 Host Marriott LP (REIT), Ser G, 9.250%, 10/01/07 2,398 2,698 Host Marriott LP (REIT), Ser I, 9.500%, 01/15/07 2,825 3,136 iStar Financial, Inc. (REIT), 7.000%, 03/15/08 5,870 6,409 iStar Financial, Inc. (REIT), 8.750%, 08/15/08 5,647 6,552
35
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->REITS--CONTINUED iStar Financial, Inc. (REIT), 6.000%, 12/15/10 $ 3,645 $ 3,867 Omega Healthcare Investors, Inc. (REIT), 7.000%, 04/01/14, Callable 04/01/09 @ 103.50 (c) 2,015 2,065 Omega Healthcare Investors, Inc. (REIT), 7.000%, 04/01/14 3,700 3,783 Ventas Realty LP (REIT), 8.750%, 05/01/09 2,530 2,859 Ventas Realty LP (REIT), 6.625%, 10/15/14, Callable 10/15/09 @ 103.31 (c) 2,910 2,968 ---------- 42,997 ---------- RETAIL (2.6%) AutoNation, Inc., 9.000%, 08/01/08 4,331 4,981 Couche-Tard US/Finance, 7.500%, 12/15/13, Callable 12/15/08 @ 103.75 1,815 1,956 Gap, Inc., 8.800%, 12/15/08 (b) 6,350 7,746 Group 1 Automotive, Inc., 8.250%, 08/15/39, Callable 08/15/08 @ 104.13 1,980 2,094 Jean Coutu Group PJC, Inc., 7.625%, 08/01/12, Callable 08/01/08 @ 103.81 (c) 3,734 3,949 Office Depot, Inc., 10.000%, 07/15/08 3,246 3,814 Pantry, Inc., 7.750%, 02/15/14, Callable 02/15/09 @ 103.88 3,553 3,713 PETCO Animal Supplies, Inc., 10.750%, 11/01/11, Callable 11/01/06 @ 105.38 1,105 1,287
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->RETAIL--CONTINUED Rite Aid Corp., 8.125%, 05/01/10, Callable 05/01/07 @ 104.06 $ 4,215 $ 4,500 Rite Aid Corp., 9.500%, 02/15/11, Callable 02/15/07 @ 104.38 3,797 4,205 Sonic Automotive, Inc., Ser B, 8.625%, 08/15/13, Callable 08/15/08 @ 104.31 3,904 4,128 United Auto Group, Inc., 9.625%, 03/15/12, Callable 03/15/07 @ 104.81 1,678 1,867 ---------- 44,240 ---------- SEMICONDUCTORS (1.1%) Advanced Micro Devices, 7.750%, 11/01/12, Callable 11/01/08 @ 103.88 (c) 4,275 4,286 Fairchild Semiconductor Corp., 5.000%, 11/01/08, Callable 11/30/04 @ 102.25 3,161 3,161 Fairchild Semiconductor Corp., 10.500%, 02/01/09, Callable 02/01/05 @ 105.25 4,855 5,194 Freescale Semiconductor, 4.820%, 07/15/09, Callable 07/15/06 @ 102.00 (b) 2,988 3,093 Freescale Semiconductor, 6.875%, 07/15/11, Callable 07/15/08 @ 103.44 1,330 1,410 Freescale Semiconductor, 7.125%, 07/15/14, Callable 07/15/09 @ 103.56 1,064 1,128 ---------- 18,272 ----------
36 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) SEIX INSTITUTIONAL HIGH YIELD FUND -- CONCLUDED
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ SERVICES (0.7%) Hanover Compressor Co., 8.625%, 12/15/10, Callable 12/15/07 @ 104.31 $ 1,785 $ 1,964 Hanover Compressor Co., 9.000%, 06/01/14, Callable 06/01/09 @ 104.50 2,020 2,252 Hanover Equipment Trust 01, Ser A, 8.500%, 09/01/08, Callable 09/01/05 @ 104.25 3,440 3,723 Hanover Equipment Trust 01, Ser B, 8.750%, 09/01/11, Callable 09/01/06 @ 104.38 3,291 3,637 Universal Compression, Inc., 7.250%, 05/15/10, Callable 05/15/07 @ 103.62 430 460 ---------- 12,036 ---------- TELECOMMUNICATIONS (9.2%) AT&T Corp., 7.300%, 11/15/11 16,880 19,349 AT&T Corp., 8.000%, 11/15/31 3,215 3,721 Avaya, Inc., 11.125%, 04/01/09, Callable 04/01/06 @ 105.56 3,786 4,354 Citizens Communications Co., 7.625%, 08/15/08 5,000 5,400 Citizens Communications Co., 9.250%, 05/15/11 4,500 5,175 Citizens Communications Co., 9.000%, 08/15/31 3,110 3,320 Corning, Inc., 5.900%, 03/15/14 3,818 3,796 Corning, Inc., 6.200%, 03/15/16 3,760 3,766
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->TELECOMMUNICATIONS--CONTINUED GCI, Inc., 7.250%, 02/15/14, Callable 02/15/09 @ 103.63 $ 6,642 $ 6,576 Inmarsat Finance PLC, 7.625%, 06/30/12, Callable 03/01/08 @ 103.81 (c) 8,498 8,583 Nextel Communications, 9.375%, 11/15/09, Callable 11/15/04 @ 104.69 2,192 2,299 Nextel Communications, 9.500%, 02/01/11, Callable 02/01/06 @ 104.75 4,768 5,406 Nextel Communications, 6.875%, 10/31/13, Callable 10/31/08 @ 103.44 10,260 11,132 Nextel Communications, 5.950%, 03/15/14, Callable 03/15/09 @ 102.98 10,370 10,603 Nextel Communications, 7.375%, 08/01/15, Callable 08/01/08 @ 103.69 10,296 11,429 NTL Cable PLC, 8.750%, 04/15/14, Callable 04/15/09 @ 104.38 (c) 6,564 7,237 PanAmSat Corp., 9.000%, 08/15/14, Callable 08/15/09 @ 104.50 (c) 12,335 13,075 Qwest Communications, 7.875%, 09/01/11 (c) 10,190 10,852 Qwest Communications, 7.500%, 06/15/23, Callable 12/17/04 @ 103.02 3,885 3,652 Qwest Communications, 7.200%, 11/10/26, Callable 11/10/05 @ 103.04 1,246 1,109
37
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ <->TELECOMMUNICA- TIONS--CONTINUED Roger Wireless Communications, Inc., 6.375%, 03/01/14 $ 14,105 $ 13,470 Rogers Cantel, Inc., 9.750%, 06/01/16 2,350 2,703 Rogers Wireless, Inc., 9.625%, 05/01/11 368 418 ---------- 157,425 ---------- TRANSPORTATION (0.4%) CHC Helicopter Corp., 7.375%, 05/01/14, Callable 05/01/09 @ 103.69 3,182 3,389 Petroleum Helicoptors, Ser B, 9.375%, 05/01/09, Callable 05/01/06 @ 104.69 2,990 3,233 ---------- 6,622 ---------- VENTURE CAPITAL (0.3%) Arch Western Finance, 6.750%, 07/01/13, Callable 07/01/08 @ 103.38 (c) 5,540 5,886 ---------- Total Corporate Bonds (Cost $1,580,000) 1,634,894 ----------
------------------------------------------------------ Shares or Principal Amount Value ------------------------------------------------------ PREFERRED STOCKS (0.2%) MEDIA (0.0%) Shaw Communications, Inc., 8.500% 27,840 $ 706 ---------- REITS (0.2%) Health Care, Inc. (REIT), Ser F, 7.625% 23,650 594 iStar Financial, Inc. (REIT), Ser I, 7.500% 110,400 2,796 ---------- 3,390 ---------- Total Preferred Stocks (Cost $3,955) 4,096 ---------- REPURCHASE AGREEMENT (3.7%) Lehman Brothers, 1.745%, dated 10/29/04, to be repurchased on 11/01/04, repurchase price $62,575,089 (collateralized by U.S. Government Agencies; total market value $63,818,951) $ 62,566 62,566 ---------- Total Repurchase Agreement (Cost $62,566) 62,566 ---------- Total Investments (Cost $1,646,521) (a) -- 99.7% 1,701,556 Other assets in excess of liabilities -- 0.3% 5,528 ---------- Net Assets -- 100.0% $1,707,084 ==========
See notes to schedules of portfolio investments and notes to financial statements. 38 SCHEDULE OF PORTFOLIO INVESTMENTS STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares) CLASSIC INSTITUTIONAL LIMITED DURATION FUND
------------------------------------------------------- Principal Amount Value ------------------------------------------------------- U.S. TREASURY OBLIGATIONS (50.8%) U.S. TREASURY NOTES (50.8%) 11.625%, 11/15/04 $18,000 $ 18,065 2.000%, 11/30/04 19,500 19,502 1.750%, 12/31/04 18,000 17,994 7.500%, 02/15/05 10,000 10,157 -------- Total U.S. Treasury Obligations (Cost $65,736) 65,718 -------- CASH EQUIVALENTS (42.2%) CREDIT CARD ABS (11.3%) American Express Credit Account Master Trust, Ser 2000-2, Cl A, 2.035%, 09/17/07 (b) 2,503 2,504 American Express Credit Account Master Trust, Ser 2002-2, CL A, 1.919%, 05/15/06, (b) 1,177 1,177 BA Master Credit Card Trust, Ser 2001-A, Cl A, 1.990%, 06/15/08 (b) 4,520 4,527 Citibank Credit Card Issuance Trust, Ser 2002-A5, Cl A5, 1.920%, 09/17/07 (b) 6,380 6,380 -------- 14,588 -------- FANNIE MAE (6.8%) Ser 2002-T10, C1 A1, 2.053%, 06/25/32 (b) 2,463 2,456 Ser 2002-T13, C1 A1, 2.033%, 08/25/32 (b) 2,738 2,738 Ser 2003-T4, C1 A1, 2.043%, 09/26/33 (b) 3,614 3,615 -------- 8,809 -------- FREDDIE MAC (2.2%) Ser T-049, C1 AV, 2.083%, 12/25/32 (b) 2,886 2,887 --------
------------------------------------------------------- Principal Amount Value ------------------------------------------------------- HOME EQUITY ABS (6.5%) Mellon Bank Home Equity Loan Trust, Ser 2001-1, Cl A, 2.150%, 03/20/27 (b) $ 3,329 $ 3,323 Residential Asset Securities Corp., Ser 2003-KS4, Cl A2B, 2.223%, 06/25/03 (b) 3,103 3,107 Residential Funding Mortgage Securities I, Ser 2003-HS1, Cl A2, 2.223%, 12/25/32 (b) 2,015 2,016 -------- 8,446 -------- OTHER ABS (15.4%) Amortizing Residential Collateral Trust, Ser 2002- BC1F, Cl A, 2.213%, 01/25/32 (b) 2,861 2,858 Amortizing Residential Collateral Trust, Ser 2002- BC3M, Cl A, 2.203%, 06/25/32 (b) 1,830 1,832 Countrywide Home Equity Loan Trust, Ser 2002 B, Cl A1, 2.120%, 04/15/28 (b) 3,344 3,342 Countrywide Home Equity Loan Trust, Ser 2002 D, Cl A1, 2.110%, 08/15/28 (b) 2,584 2,575 Fleet Home Equity Loan Trust, Ser 2003-1, Cl A, 2.160%, 01/20/33 (b) 3,663 3,662 Greenpoint Home Equity Loan Trust, Ser 2001-1, Cl A2, 2.330%, 04/15/27 (b) 476 476 Greenpoint Home Equity Loan Trust, Ser 2003-1, Cl A, 2.140%, 04/15/29 (b) 1,580 1,581
39
------------------------------------------------------- Principal Amount Value ------------------------------------------------------- <->OTHER ABS--CONTINUED Merrill Lynch Home Equity Loan, Ser 1997-1, Cl A, 2.113%, 09/25/27 (b) $ 326 $ 325 Wachovia Asset Securitization, Inc., Ser 2003-HE1, Cl A1, 2.223%, 03/25/33 (b) 3,187 3,185 -------- 19,836 -------- Total Cash Equivalents (Cost $54,584) 54,566 --------
------------------------------------------------------- Principal Amount Value ------------------------------------------------------- REPURCHASE AGREEMENT (5.9%) Lehman Brothers, 1.745%, dated 10/29/04, to be repurchased on 11/01/04, repurchase price $7,587,707 (collateralized by U.S. Government Agencies; total market value $7,741,850) $ 7,587 $ 7,587 -------- Total Repurchase Agreement (Cost $7,587) 7,587 -------- Total Investments (Cost $127,907) (a) -- 98.9% 127,871 Other assets in excess of liabilities -- 1.1% 1,390 -------- Net Assets -- 100.0% $129,261 ========
See notes to schedules of portfolio investments and notes to financial statements. 40 STI CLASSIC FUNDS NOTES TO SCHEDULES OF PORTFOLIO INVESTMENTS OCTOBER 31, 2004 ABS Asset Backed Security Cl Class REIT Real Estate Investment Trust Ser Series (a) See notes to financial statements for unrealized appreciation/(depreciation) of securities on a tax basis. (b) Variable rate security. Rate presented represents rate in effect at October 31, 2004. Maturity date represents actual maturity date. (c) Rule 144A, Section 4(2) or other security which is restricted as to resale to institutional investors. The Fund's advisor has deemed this security to be liquid based upon procedures approved by the Board of Trustees. (d) Perpetual Maturity (e) Step Bond. Rate presented represents rate in effect at October 31, 2004. Maturity date represents actual maturity date.
41 STATEMENTS OF ASSETS AND LIABILITIES (000) STI CLASSIC FUNDS October 31, 2004
Classic Classic Classic Seix Institutional Institutional Institutional Institutional Limited Core Bond Intermediate High Yield Duration Fund Bond Fund Fund Fund ------------- ------------- ------------- ------------- Assets: Investments, at Value (Cost $56,793, $34,296, $1,583,955 and $120,320, respectively).............................. $57,605 $34,927 $1,638,990 $120,284 Repurchase Agreements, at Cost............................. 2,625 1,474 62,566 7,587 ------- ------- ---------- -------- Total Investments (Cost $59,418, $35,770, $1,646,521, and $127,907, respectively).................................. 60,230 36,401 1,701,556 127,871 Cash....................................................... -- 43 4,410 -- Receivable for Investment Securities Sold.................. 4,133 3,611 18,389 18,191 Accrued Income............................................. 436 324 33,276 1,449 Receivable from Adviser.................................... -- 3 -- -- Receivable for Capital Shares Sold......................... -- -- 172 -- ------- ------- ---------- -------- Total Assets............................................... 64,799 40,382 1,757,803 147,511 ------- ------- ---------- -------- Liabilities: Income Distributions Payable............................... 112 63 5,708 110 Payable for Investment Securities Purchased................ 8,193 4,428 44,329 18,105 Payable for Capital Shares Redeemed........................ -- -- 37 -- Investment Advisory Fees Payable........................... 9 -- 440 3 Administration Fees Payable................................ 1 1 26 2 Distribution Fees Payable.................................. -- -- 2 -- Custody Fees Payable....................................... 6 2 33 4 Accrued Expenses........................................... 40 37 144 26 ------- ------- ---------- -------- Total Liabilities.......................................... 8,361 4,531 50,719 18,250 ------- ------- ---------- -------- Total Net Assets........................................... $56,438 $35,851 $1,707,084 $129,261 ======= ======= ========== ======== Net Assets: Capital.................................................... $55,189 $34,841 $1,632,742 $129,286 Accumulated Net Investment Income (Loss)................... (56) 18 33 11 Accumulated Net Realized Gains on Investment Transactions............................................. 493 361 19,274 -- Net Unrealized Appreciation (Depreciation) on Investments.............................................. 812 631 55,035 (36) ------- ------- ---------- -------- Total Net Assets........................................... $56,438 $35,851 $1,707,084 $129,261 ======= ======= ========== ======== NET ASSETS: Institutional Shares....................................... $56,019 $35,848 $1,689,327 $129,259 T Shares................................................... $ 1 $ 1 $ 1,781 $ 1 L Shares................................................... $ 1 $ 1 $ 1 $ 1 A Shares................................................... $ 417 $ 1 $ 15,975 N/A SHARES OUTSTANDING: Institutional Shares....................................... 5,442 3,458 147,896 12,950 T Shares................................................... -- -- 156 -- L Shares................................................... -- -- -- -- A Shares................................................... 39 -- 1,429 N/A NET ASSET VALUE AND REDEMPTION PRICE PER SHARE: Institutional Shares....................................... $ 10.30 $ 10.37 $ 11.42 $ 9.98 T Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98 L Shares*.................................................. $ 10.30 $ 10.36 $ 11.42 $ 9.98 A Shares................................................... $ 10.60 $ 10.36 $ 11.18 N/A OFFERING PRICE PER SHARE (100%/(100%-maximum sales charge) of net asset value adjusted to the nearest cent): Institutional Shares....................................... $ 10.30 $ 10.37 $ 11.42 $ 9.98 T Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98 L Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98 A Shares................................................... $ 11.01 $ 10.76 $ 11.62 N/A Maximum Sales Charge -- A Shares........................... 3.75% 3.75% 3.75%
Amounts designated as "--" are $0 or have been rounded to $0. * Redemption price per share varies by length of time shares are held. See notes to financial statements. 42 STATEMENTS OF OPERATIONS (000) STI CLASSIC FUNDS For the Year Ended October 31, 2004
Classic Classic Classic Seix Institutional Institutional Institutional Institutional Limited Core Bond Intermediate High Yield Duration Fund Bond Fund Fund Fund ------------- ------------- ------------- ------------- Investment Income: Dividend Income............................................ $ 3 $ 1 $ 733 $ 3 Interest Income............................................ 1,891 1,176 97,585 1,973 Other Income............................................... -- -- 1,729 -- Less: Foreign Taxes Withheld............................... -- -- (2) -- ------ ------ -------- ------ Total Investment Income.................................... 1,894 1,177 100,045 1,976 ------ ------ -------- ------ Expenses: Investment Advisory Fees................................... 136 79 7,119 159 Administration Fees........................................ 39 24 1,032 109 Shareholder Service Fees -- T Shares....................... -- -- -- -- Distribution and Service Fees -- L Shares.................. -- -- -- -- Distribution Fees -- A Shares.............................. 1 -- 40 -- Custodian Fees............................................. 84 33 495 61 Professional Fees.......................................... 36 36 122 59 Insurance Fees............................................. 1 1 26 3 Registration Fees.......................................... 20 13 99 6 Transfer Agent Fees........................................ 2 -- 63 3 Printing Fees.............................................. 1 -- 21 2 Trustee Fees............................................... 2 1 49 6 Other Expenses............................................. 2 1 17 2 ------ ------ -------- ------ Total Expenses............................................. 324 188 9,083 410 Less: Investment Advisory Fees Waived...................... (78) (47) (1,232) (87) Less: Distribution Fees Waived -- L Shares................. -- -- -- -- ------ ------ -------- ------ Net Expenses............................................... 246 141 7,851 323 ------ ------ -------- ------ Net Investment Income...................................... 1,648 1,036 92,194 1,653 ------ ------ -------- ------ Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Investments Sold............... 587 607 19,041 (6) Net Change in Unrealized Appreciation (Depreciation) on Investments.............................................. 302 (71) 25,392 (31) ------ ------ -------- ------ Total Net Realized and Unrealized Gain (Loss) on Investments.............................................. 889 536 44,433 (37) ------ ------ -------- ------ Net Increase in Net Assets from Operations.................. $2,537 $1,572 $136,627 $1,616 ====== ====== ======== ======
Amounts designated as "--" are $0 or have been rounded to $0. See notes to financial statements. 43 STATEMENTS OF CHANGES IN NET ASSETS (000) STI CLASSIC FUNDS For the Year Ended October 31, 2004 and the Year Ended October 31, 2003
Classic Institutional Classic Institutional Core Bond Fund Intermediate Bond Fund ----------------------- ----------------------- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 10/31/04 10/31/03 10/31/04 10/31/03 --------- --------- --------- --------- Operations: Net Investment Income...................................... $ 1,648 $ 1,556 $ 1,036 $ 1,006 Net Realized Gain (Loss) on Investments Sold............... 587 2,997 607 637 Net Change in Unrealized Appreciation (Depreciation) on Investments.............................................. 302 (152) (71) (140) -------- -------- ------- -------- Increase in Net Assets from Operations..................... 2,537 4,401 1,572 1,503 -------- -------- ------- -------- Dividends and Distributions to Shareholders: Net Investment Income: Institutional Shares..................................... (1,696) (1,666) (1,036) (1,126) T Shares................................................. -- -- -- -- L Shares................................................. -- -- -- -- A Shares................................................. (6) (5) -- -- Realized Capital Gains: Institutional Shares..................................... (758) -- -- -- T Shares................................................. -- -- -- -- L Shares................................................. -- -- -- -- A Shares................................................. (6) -- -- -- -------- -------- ------- -------- Total Dividends and Distributions........................ (2,466) (1,671) (1,036) (1,126) -------- -------- ------- -------- Capital Transactions: Proceeds from Shares Issued................................ 40,317 1,286 7,195 561 Reinvestment of Cash Distributions......................... 2,082 1,629 973 1,126 Cost of Shares Redeemed.................................... (19,997) (52,573) (1,542) (13,659) -------- -------- ------- -------- Increase (Decrease) in Net Assets from Capital Transactions............................................. 22,402 (49,658) 6,626 (11,972) -------- -------- ------- -------- Total Increase (Decrease) in Net Assets.................... 22,473 (46,928) 7,162 (11,595) -------- -------- ------- -------- Net Assets: Beginning of Period........................................ 33,965 80,893 28,689 40,284 -------- -------- ------- -------- End of Period.............................................. $ 56,438 $ 33,965 $35,851 $ 28,689 ======== ======== ======= ======== Undistributed net investment income (loss), end of period... $ (56) $ (2) $ 18 $ -- ======== ======== ======= ========
Amounts designated as "-" are either $0 or have been rounded to $0. See notes to financial statements. 44 STATEMENTS OF CHANGES IN NET ASSETS (000) STI CLASSIC FUNDS For the Year Ended October 31, 2004 and the Year Ended October 31, 2003
Seix Institutional Classic Institutional High Yield Fund Limited Duration Fund ------------------------ ---------------------- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 10/31/04 10/31/03 10/31/04 10/31/03 ---------- ---------- --------- --------- Operations: Net Investment Income...................................... $ 92,194 $ 34,679 $ 1,653 $ 1,020 Net Realized Gain (Loss) on Investments Sold............... 19,041 4,310 (6) (38) Net Change in Unrealized Appreciation (Depreciation) on Investments.............................................. 25,392 29,589 (31) (2) ---------- ---------- --------- --------- Increase in Net Assets from Operations..................... 136,627 68,578 1,616 980 ---------- ---------- --------- --------- Dividends and Distributions to Shareholders: Net Investment Income: Institutional Shares..................................... (90,978) (33,988) (1,654) (965) T Shares................................................. (5) -- -- -- L Shares................................................. -- -- -- -- A Shares................................................. (836) (759) -- -- Realized Capital Gains: Institutional Shares..................................... (2,278) -- -- -- T Shares................................................. -- -- -- -- L Shares................................................. -- -- -- -- A Shares................................................. (31) -- -- -- ---------- ---------- --------- --------- Total Dividends and Distributions........................ (94,128) (34,747) (1,654) (965) ---------- ---------- --------- --------- Capital Transactions: Proceeds from Shares Issued................................ 873,357 1,037,967 158,000 261,425 Reinvestment of Cash Distributions......................... 74,837 28,618 1,533 965 Cost of Shares Redeemed.................................... (356,594) (119,325) (176,747) (128,190) ---------- ---------- --------- --------- Increase (Decrease) in Net Assets from Capital Transactions............................................. 591,600 947,260 (17,214) 134,200 ---------- ---------- --------- --------- Total Increase (Decrease) in Net Assets.................... 634,099 981,091 (17,252) 134,215 ---------- ---------- --------- --------- Net Assets: Beginning of Period........................................ 1,072,985 91,894 146,513 12,298 ---------- ---------- --------- --------- End of Period.............................................. $1,707,084 $1,072,985 $ 129,261 $ 146,513 ========== ========== ========= ========= Undistributed net investment income (loss), end of period... $ 33 $ (35) $ 11 $ 27 ========== ========== ========= =========
Amounts designated as "--" are either $0 or have been rounded to $0. See notes to financial statements. 45 (This page intentionally left blank) 46 FINANCIAL HIGHLIGHTS STI CLASSIC FUNDS For the Years Ended October 31, (unless otherwise indicated) For a Share Outstanding Throughout Each Year or Period
Net Asset Net Realized Dividends Value, Net and Unrealized from Beginning Investment Gains (Losses) Total from Net Investment of Period Income on Investments Operations Income ------------ ---------- ---------------- ---------- -------------- CLASSIC INSTITUTIONAL CORE BOND FUND Institutional Shares 2004* $10.31 $0.31 $ 0.23 $0.54 $(0.32) 2003 10.00 0.30 0.35 0.65 (0.34) 2002 10.34 0.42 (0.29) 0.13 (0.42) 2001 9.66 0.59 0.70 1.29 (0.61) 2000 9.67 0.63 (0.02) 0.61 (0.62) T Shares 2004*(1) $10.25 $0.01 $ 0.06 $0.07 $(0.02) L Shares 2004*(1) $10.25 $0.01 $ 0.06 $0.07 $(0.02) A Shares 2004* $10.49 $0.18 $ 0.35 $0.53 $(0.19) 2003 10.08 0.29 0.34 0.63 (0.22) 2002 (2) 10.00 0.27 0.09 0.36 (0.28) CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND Institutional Shares 2004* $10.23 $0.34 $ 0.14 $0.48 $(0.34) 2003 10.12 0.37 0.15 0.52 (0.41) 2002 10.63 0.47 (0.23) 0.24 (0.50) 2001 9.96 0.57 0.68 1.25 (0.58) 2000 9.92 0.64 0.04 0.68 (0.64) T Shares 2004*(1) $10.32 $0.02 $ 0.04 $0.06 $(0.02) L Shares 2004*(1) $10.32 $0.01 $ 0.04 $0.05 $(0.01) A Shares 2004*(1) $10.32 $0.02 $ 0.04 $0.06 $(0.02) SEIX INSTITUTIONAL HIGH YIELD FUND Institutional Shares 2004* $11.09 $0.72 $ 0.35 $1.07 $(0.72) 2003 10.17 0.68 0.92 1.60 (0.68) 2002 10.40 0.63 (0.20) 0.43 (0.63) 2001 (3) 10.00 0.64 0.36 1.00 (0.60) T Shares 2004*(1) $11.32 $0.04 $ 0.10 $0.14 $(0.04) L Shares 2004*(1) $11.32 $0.04 $ 0.10 $0.14 $(0.04) A Shares 2004* $10.75 $0.56 $ 0.45 $1.01 $(0.56) 2003 9.78 0.68 0.82 1.50 (0.53) 2002 (4) 10.00 0.54 (0.22) 0.32 (0.51) CLASSIC INSTITUTIONAL LIMITED DURATION FUND Institutional Shares 2004* $ 9.98 $0.11 $ -- $0.11 $(0.11) 2003 10.00 0.11 (0.02) 0.09 (0.11) 2002 (5) 10.00 0.00(6) -- 0.00(6) 0.00(6) T Shares 2004*(1) $ 9.98 $0.01 $ -- $0.01 $(0.01) L Shares 2004*(1) $ 9.98 $0.01 $ -- $0.01 $(0.01) Distributions from Total Realized Dividends and Capital Gains Distributions ------------- ------------- CLASSIC INSTITUTIONAL Institutional Shares $(0.23) $(0.55) -- (0.34) (0.05) (0.47) -- (0.61) -- (0.62) T Shares $ -- $(0.02) L Shares $ -- $(0.02) A Shares $(0.23) $(0.42) -- (0.22) -- (0.28) CLASSIC INSTITUTIONAL Institutional Shares $ -- $(0.34) -- (0.41) (0.25) (0.75) -- (0.58) -- (0.64) T Shares $ -- $(0.02) L Shares $ -- $(0.01) A Shares $ -- $(0.02) SEIX INSTITUTIONAL HI Institutional Shares $(0.02) $(0.74) -- (0.68) (0.03) (0.66) -- (0.60) T Shares $ -- $(0.04) L Shares $ -- $(0.04) A Shares $(0.02) $(0.58) -- (0.53) (0.03) (0.54) CLASSIC INSTITUTIONAL Institutional Shares $ -- $(0.11) -- (0.11) -- 0.00(6) T Shares $ -- $(0.01) L Shares $ -- $(0.01)
+ 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. * Effective November 1, 2003, the Funds adopted a change in the amortization and accretion methodology on fixed income securities. (See Note 3.) The cumulative effect of this change in methodology on October 31, 2004 was immaterial to all Funds except for the Seix Institutional High Yield Fund, which was to increase net investment income to average net assets from 6.42%, 5.56%, 5.45% and 6.17% to 6.48%, 6.62%, 6.29% and 6.22% for Institutional Shares, T Shares, L Shares and A Shares, respectively; to increase net investment income per share from $0.71, $0.03, $0.03 and $0.55 to $0.72, $0.04, $0.04 and $0.56 for Institutional Shares, T Shares, L Shares and A Shares, respectively; and, to decrease net realized and unrealized gains (losses) per share from $0.36, $0.11, $0.11 and $0.46 to $0.35, $0.10, $0.10 and $0.45 for Institutional Shares, T Shares, L Shares and A Shares, respectively. The per share ratios for T Shares and L Shares have been annualized. Per share ratios and supplemental data for prior periods have not been restated to reflect this change. (1) T Shares, L Shares and A Shares commenced operations on October 11, 2004. All ratios for the period have been annualized. (2) A Shares commenced operations on January 25, 2002. All ratios for the period have been annualized. 47
Ratio of Ratio of Expenses to Net Assets Net Assets, Ratio of Net Net Investment Average Net Assets Portfolio Value, End Total End of Expenses to Income to (Excluding Waivers Turnover of Period Return+ Period (000) Average Net Assets Average Net Assets and Reimbursements) Rate ---------- ------- ------------ ------------------ ------------------ -------------------- --------- $10.30 5.49% $ 56,019 0.45% 3.03% 0.59% 330% 10.31 6.58 33,662 0.45 3.10 0.51 463 10.00 1.38 80,727 0.45 4.08 0.70 502 10.34 13.82 52,034 0.45 5.85 0.70 492 9.66 6.63 58,099 0.45 6.57 0.63 522 $10.30 0.67% $ 1 0.56% 3.06% 0.71% 330% $10.30 0.65% $ 1 1.10% 2.71% 1.41% 330% $10.60 5.22% $ 417 0.70% 2.80% 0.83% 330% 10.49 6.24 303 0.68 2.66 0.68 463 10.08 3.69 166 0.80 3.30 1.11 502 $10.37 4.73% $ 35,848 0.45% 3.25% 0.59% 130% 10.23 5.16 28,689 0.45 3.42 0.56 277 10.12 2.47 40,284 0.45 4.63 0.73 237 10.63 12.87 26,192 0.45 5.50 0.76 431 9.96 7.08 11,207 0.45 6.44 0.88 342 $10.36 0.53% $ 1 0.71% 2.63% 0.71% 130% $10.36 0.51% $ 1 1.00% 2.22% 1.41% 130% $10.36 0.53% $ 1 0.71% 2.58% 0.71% 130% $11.42 9.97% $1,689,327 0.55% 6.48% 0.64% 73% 11.09 16.10 1,057,993 0.55 6.67 0.67 108 10.17 4.21 82,017 0.55 6.80 1.07 97 10.40 10.14 4,641 0.55 7.33 3.98 466 $11.42 1.22% $ 1,781 0.68% 6.62% 0.72% 73% $11.42 1.20% $ 1 1.18% 6.29% 1.41% 73% $11.18 9.73% $ 15,975 0.80% 6.22% 0.88% 73% 10.75 15.72 14,992 0.90 6.45 0.93 108 9.78 3.29 9,877 0.89 6.53 1.20 97 $ 9.98 1.09% $ 129,259 0.20% 1.04% 0.26% 101% 9.98 0.92 146,513 0.20 1.10 0.26 244 10.00 0.00(7) 12,298 0.00(7) 0.00(7) 0.00(7) 0(7) $ 9.98 0.08% $ 1 0.37% 1.46% 0.37% 101% $ 9.98 0.06% $ 1 0.71% 1.12% 0.71% 101%
(3) Institutional Shares commenced operations on December 29, 2000. All ratios for the period have been annualized. (4) A Shares commenced operations on December 21, 2001. All ratios for the period have been annualized. (5) Institutional Shares commenced operations on October 25, 2002. All ratios for the period have been annualized. (6) Net investment income and distributions from net investment income were less than $0.01 per share. (7) Amounts are not meaningful due to the short period of operations. See notes to financial statements 48 NOTES TO FINANCIAL STATEMENTS STI CLASSIC FUNDS October 31, 2004 1. Organization The STI Classic Funds (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992 and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company offering 49 funds as of October 31, 2004. The accompanying financial statements and financial highlights are those of the STI Classic Institutional Core Bond Fund (the "Core Bond Fund"), the STI Classic Institutional Intermediate Bond Fund (the "Intermediate Bond Fund"), the Seix Institutional High Yield Fund (the "High Yield Fund"), and the STI Classic Institutional Limited Duration Fund (the "Limited Duration Fund")(each a "Fund", collectively, the "Funds"). The Funds are authorized to issue an unlimited number of beneficial interest with no par value. Each Fund offers four classes of shares: Institutional Shares, Class A Shares, Class L Shares, and Class T Shares except for the Limited Duration Fund, which does not offer Class A Shares. The financial statements of the remaining funds are presented separately. Under the Trust's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Trust enters into contracts with their vendors and others that provide for general indemnifications. The Trust's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. However, based on experience, the Trust expects the risk of loss to be remote. 2. Reorganization The Trust entered into an agreement and plan of reorganization with the Seix Funds, Inc. (the "Seix Funds") pursuant to which all of the assets, subject to stated liabilities, of each portfolio of the Seix Funds were transferred to a corresponding series of the Trust in exchange for a corresponding Class of shares of that series. The reorganization, which qualified as a tax-free exchange for Federal income tax purposes, was completed on October 11, 2004, following approval by shareholders of the Seix Funds at a special shareholder meeting on September 23, 2004. The following is a summary of shares outstanding, net assets and net asset value per share issued immediately before and after the reorganization:
After Reorganization Before Reorganization -------------- ---------------------------- STI Classic STI Classic Institutional Seix Core Institutional Core Bond Bond Fund Core Bond Fund Fund(c) ----------- -------------- -------------- Shares................. 5,493,647 -- 5,493,647 Net Assets............. $56,294,611 $ -- $56,294,611 Net Asset Value: Institutional Shares... -- $ 10.25 I Shares(a)............ $ 10.25 -- A Shares............... -- $ 10.54 P Shares(b)............ $ 10.54 --
--------------- (a) Institutional Shares were issued in exchange for I Shares in conjunction with the reorganization. (b) A Shares were issued in exchange for P Shares in conjunction with the reorganization. (c) The STI Classic Institutional Core Bond Fund retained the financial history of the Seix Core Bond Fund. 49
After Before Reorganization Reorganization --------------------------------- -------------- STI Classic STI Classic Institutional Institutional Seix Intermediate Intermediate Intermediate Bond Fund Bond Fund Bond Fund(b) ----------------- ------------- -------------- Shares................ 3,422,155 -- 3,422,155 Net Assets............ $35,313,376 $ -- $35,313,376 Net Asset Value: Institutional Shares............... -- $ 10.32 I Shares(a)........... $ 10.32 --
--------------- (a) Institutional Shares were issued in exchange for I Shares in conjunction with the reorganization. (b) The STI Classic Institutional Intermediate Bond Fund retained the financial history of the Seix Intermediate Bond Fund.
Before Reorganization After Reorganization ----------------------------------- -------------------- Seix High Seix Institutional Seix Institutional Yield Fund High Yield Fund High Yield Fund(c) -------------- ------------------ -------------------- Shares............... 142,460,313 -- 142,460,313 Net Assets........... $1,612,034,091 $ -- $1,612,034,091 Net Asset Value: Institutional Shares.............. -- $ 11.32 I Shares(a).......... $ 11.32 -- A Shares............. -- $ 11.08 P Shares(b).......... $ 11.08 --
--------------- (a) Institutional Shares were issued in exchange for I Shares in conjunction with the reorganization. (b) A Shares were issued in exchange for P Shares in conjunction with the reorganization. (c) The Seix Institutional High Yield Fund retained the financial history of the Seix High Yield Fund.
After Before Reorganization Reorganization -------------------------------- ---------------- STI Classic STI Classic Institutional Institutional Seix Limited Limited Duration Limited Duration Duration Fund Fund Fund(b) ------------- ---------------- ---------------- Shares............... 13,000,589 -- 13,000,589 Net Assets........... $129,705,443 $ -- $129,705,443 Net Asset Value: Institutional Shares.............. -- $ 9.98 I Shares(a).......... $ 9.98 --
--------------- (a) Institutional Shares were issued in exchange for I Shares in conjunction with the reorganization. (b) The STI Classic Institutional Limited Duration Fund retained the financial history of the Seix Limited Duration Fund. 3. Significant Accounting Policies The following is a summary of significant accounting policies followed by the Funds in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. The actual results could differ from these estimates. Security Valuation -- All investments are valued daily at their market price, which results in unrealized gains or losses. Debt and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service. Securities traded on an exchange are valued at the latest sales 50 NOTES TO FINANCIAL STATEMENTS (continued) STI CLASSIC FUNDS October 31, 2004 price on that exchange. Securities for which over-the counter market quotations are available are valued at the latest bid price. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker. Short-term securities purchased with sixty days or less remaining to maturity are valued at amortized cost, which approximates market value. Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Funds' Board of Trustees. The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Funds' Board of Trustees. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been delisted from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. Securities Purchased on a When-Issued Basis -- Delivery and payment for securities that have been purchases 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. 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. A Fund records when-issued securities on trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. 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 TBA purchase commitments are valued at the current market value according to the procedures described under "Security Valuation." Mortgage Dollar Rolls -- The Funds, except the Intermediate Bond Fund, 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, 51 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 October 31, 2004, only the Core Bond Fund had open mortgage dollar rolls. Compensating Balances -- If a Fund has a cash overdraft in excess of $100,000 it is required to leave 110% in compensating balance with SunTrust Bank (the "Custodian"), a wholly-owned subsidiary of SunTrust Banks, Inc., on the following day. If a Fund has a positive cash balance in excess of $100,000 it is allowed to overdraw 90% of the balance with the Custodian on the following business day. Repurchase Agreements -- The Funds may purchase instruments from financial institutions, such as banks and broker-dealers, subject to the seller's agreement to repurchase them at an agreed upon time and price ("repurchase agreement"). A third party custodian bank takes possession of the underlying securities ("collateral") of a repurchase agreement, 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. Securities Transactions and Investment Income -- Securities transactions are accounted for no later than one business day after trade date. However, for financial reporting purposes, securities transactions are reported on trade date. Interest income is recognized on an accrual basis. Cost 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 or amortization of purchase discounts or premiums during the respective holding period. Dividend income is recorded on the ex-dividend date. Effective November 1, 2003, the Funds changed their amortization and accretion methodology on premiums and discounts on fixed income securities in order to conform more closely to Internal Revenue Code requirements. The cumulative effect of this accounting change had no impact on total net assets of each Fund, but resulted in the following reclasses (000):
Change in Change in Unrealized Interest Appreciation/ Income (Depreciation) --------- -------------------- Core Bond Fund $ (2) $ 2 Intermediate Bond Fund (1) 1 High Yield Fund 815 (815) Limited Duration Fund 1 (1)
The statement of changes in net assets and financial highlights for prior periods have not been restated to reflect this change in accounting methodology Allocations -- Expenses directly attributable to a Fund are charged to the Fund, while expenses which are attributable to more than one Fund are allocated among the respective Funds based upon relative net assets or another reasonable basis. 52 NOTES TO FINANCIAL STATEMENTS (continued) STI CLASSIC FUNDS October 31, 2004 The investment income and expenses of a Fund (other than class specific expenses charged to a class) and realized and unrealized gains and losses on investments of a Fund are allocated to each class of shares based upon relative net assets on the date income is earned, expenses are accrued, or realized and unrealized gains and losses are incurred. Dividends and Distributions to Shareholders -- Dividends from the Funds' net investment income, if any, are declared daily and paid monthly. Distributions from net short-term capital gains and net long-term capital gains, if any, are declared and paid at least annually. However, to the extent that a net realized capital gains can be offset by capital loss carryovers, such gains will not be distributed. Dividends and distributions are recorded by the Funds on the ex-dividend date. Income dividends and capital gain distributions are determined in accordance with federal income tax regulations and may differ from accounting principles generally accepted in the United States of America. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (i.e. paydown gain/(loss)), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require a reclassification. Federal Income Taxes -- Each of the Funds intends to qualify each year as a regulated investment company (a "RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended. A RIC generally is not subject to federal income tax on income and gains distributed in a timely manner to its shareholders. The Funds intend to make timely distributions in order to avoid tax liability. Therefore, no federal income tax provision is necessary. 4. Fees and Transactions with Affiliates The Funds have entered into an Investment Advisory Agreement with Trusco Capital Management, Inc. (the "Adviser"). Under this agreement, the Adviser is entitled to receive a fee from the Funds that is calculated daily and paid monthly based on a percentage of the average net assets of each Fund as follows:
Maximum Annual Net Advisory Fees Fee Paid -------- ------- Core Bond Fund..................... 0.25% 0.11% Intermediate Bond Fund............. 0.25 0.10 High Yield Fund.................... 0.50 0.41 Limited Duration Fund.............. 0.10 0.05
The Adviser has voluntarily agreed to waive all or a portion of its fees (and to reimburse Fund expenses). Fee waivers and expense reimbursements are voluntary and may be terminated at any time. BISYS Fund Services Limited Partnership ("BISYS"), and BISYS Fund Services Ohio, Inc. ("BISYS Ohio") are subsidiaries of The BISYS Group, Inc. Effective October 11, 2004, BISYS Ohio began serving as the administrator for the Funds pursuant to a Master Services Agreement (the "Services Agreement"). Under the Services Agreement, BISYS Ohio is entitled to receive an asset-based fee for administration, fund accounting and transfer agency services (expressed as a percentage of the combined average daily net assets of the Trust and the STI Classic Variable Trust) of 2.75 basis points (0.0275%) on the first $25 billion, 2.25 basis points (0.0225%) on the next $5 billion, and 1.75 basis points (0.0175%) for 53 over $30 billion, plus an additional class fee of $2,500 per class per annum, applicable to each additional class of shares over 145 classes of shares. Effective October 11, 2004, BISYS began serving as the Funds' principal underwriter and distributor (the "Distributor"). The Funds have adopted a Distribution and Shareholder Services Plan and a Distribution Plan (the "Plans") with which the Distributor receives compensation with respect to Class L Shares and Class A Shares, respectively. These Plans are in accordance with Rule 12b-1 under the 1940 Act. Under the Plans, the Funds will pay fees of 0.25% of the average daily net assets of Class A Shares, and a rate of 0.75% of the average daily net assets of Class L Shares, except the class L Shares of the Limited Duration Fund. In addition, Class L Shares are subject to a service fee of 0.25% of the average daily net assets of the Class L Shares. The Funds have also adopted shareholder service plans with respect to Institutional Shares and Class T Shares of the Funds (collectively, the "Service Plan"). Under the Service Plan, the Funds will pay SunTrust Bank a fee of up to 0.25% or 0.40% of the average daily net assets attributable to the Institutional Shares or Class T Shares, respectively. For the year ended October 31, 2004, the Institutional Shares did not charge any shareholder servicing fees. Annualized fees received by the Distributor and SunTrust Bank are outlined below for each share class:
Maximum T Share Shareholder Fees Servicing Fee Paid ------------- ----------- Core Bond Fund................. 0.40% 0.25% Intermediate Bond Fund......... 0.40 0.20 High Yield Fund................ 0.40 0.15 Limited Duration Fund.......... 0.40 0.10
Maximum L Share Distribution Net and Service Fees Fee Paid ------------ ------------ Core Bond Fund............. 1.00% 0.63% Intermediate Bond Fund..... 1.00 0.61 High Yield Fund............ 1.00 0.65 Limited Duration Fund...... 0.25 0.25
Maximum A Share Net Distribution Fees Fee Paid ------------ ------------ Core Bond Fund.......... 0.25% 0.25% Intermediate Bond Fund.. 0.25 0.25 High Yield Fund......... 0.25 0.25
The Distributor has voluntarily agreed to waive all or a portion of its fees (and to reimburse Fund expenses). Fee waivers and expense reimbursements are voluntary and may be terminated at any time. Effective October 11, 2004, SunTrust Bank began acting as custodian for the Funds. SunTrust Bank is paid on the basis of net assets and transaction costs 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. No fees were paid to SunTrust Bank for the year ended October 31, 2004. Prior to October 11, 2004, Investors Bank & Trust Company served as the predecessor funds' administrator, custodian and transfer agent. Quasar Distributors, LLC served as the predecessor funds' distributor. All distribution fees for Class A Shares prior to October 11, 2004 were paid to Quasar Distributors, LLC. Certain Officers and Trustees of the Trust are affiliated with the Adviser or BISYS Ohio. Such affiliated Officers and Trustees receive no compensation from the Trust for serving in their respective 54 NOTES TO FINANCIAL STATEMENTS (continued) STI CLASSIC FUNDS October 31, 2004 roles. The Funds paid no compensation to the current non-interested Trustees of the Trust for the year ended October 31, 2004; however, the Funds did pay compensation to each of the non-interested Directors of the Seix Funds, Inc. of $18,750 ($56,250 total), in meeting and retainer fees. Effective October 11, 2004, the Funds entered into an agreement with SunTrust Robinson Humphrey, a division of SunTrust Capital Markets, Inc. which is a direct non-bank subsidiary of SunTrust Banks, Inc., to act as an agent in placing repurchase agreements for the Funds. For the year ended October 31, 2004, the Funds paid SunTrust Robinson Humphrey through a reduction in the yield earned by the Funds on those repurchase agreements the following fees (000):
Fund Fees ---- ----- Core Bond Fund................................ $ -- Intermediate Bond Fund........................ -- High Yield Fund............................... 1 Limited Duration Fund......................... --
5. Investment Transactions The cost of security purchases and the proceeds from the sale of securities (excluding securities maturing less than one year from acquisition) during the year ended October 31, 2004 were as follows (000):
Purchases Sales ---------------------------------- ---------------------------------- Portfolio U.S. Government Other Securities U.S. Government Other Securities --------- --------------- ---------------- --------------- ---------------- Core Bond Fund................................. $150,900 $ 18,186 $147,519 $ 12,496 Intermediate Bond Fund......................... 24,428 10,595 23,404 7,895 High Yield Fund................................ -- 1,570,611 -- 999,108 Limited Duration Fund.......................... 27,132 60,709 89,207 91,206
6. Portfolio Investment Risks Funds that invest in high yield instruments are subject to certain additional credit and market risks. The yields of high yield debt obligations reflect, among other things, perceived credit risk. High yield securities involve greater risk of default or downgrade and are more volatile than investment grade securities. 55 7. Capital Shares Transactions Transactions in capital shares for the Funds were as follows:
Classic Classic Seix Classic Institutional Institutional Institutional Institutional Core Bond Intermediate High Yield Limited Duration Fund Fund Fund Fund --------------------- --------------------- ---------------------- --------------------- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 --------- --------- --------- --------- --------- ---------- --------- --------- Capital Transactions Institutional Shares Proceeds from shares issued.... $ 40,140 $ 1,085 $ 7,192 $ 561 $ 868,270 $1,018,097 $ 157,998 $ 261,425 Reinvestment of Cash Distributions................ 2,082 1,629 973 1,126 74,278 28,000 1,533 965 Cost of shares redeemed........ (19,932) (52,503) (1,542) (13,659) (353,054) (102,501) (176,747) (128,190) -------- -------- ------- -------- --------- ---------- --------- --------- Increase (Decrease) in Net Assets From Institutional Shares Transactions................... $ 22,290 $(49,789) $ 6,623 $(11,972) $ 589,494 $ 943,596 $ (17,216) $ 134,200 -------- -------- ------- -------- --------- ---------- --------- --------- T Shares Proceeds from shares issued.... $ 1 $ 1 $ 1,798 $ 1 Reinvestment of Cash Distributions................ -- -- -- -- Cost of shares redeemed........ -- -- (31) -- -------- -------- ------- -------- --------- ---------- --------- --------- Increase in Net Assets From T Shares Transactions............ $ 1 N/A $ 1 N/A $ 1,767 N/A $ 1 N/A -------- -------- ------- -------- --------- ---------- --------- --------- L Shares Proceeds from shares issued.... $ 1 $ 1 $ 1 $ 1 Reinvestment of Cash Distributions................ -- -- -- -- Cost of shares redeemed........ -- -- -- -- -------- -------- ------- -------- --------- ---------- --------- --------- Increase in Net Assets From L Shares Transactions............ $ 1 N/A $ 1 N/A $ 1 N/A $ 1 N/A -------- -------- ------- -------- --------- ---------- --------- --------- A Shares Proceeds from shares issued.... $ 175 $ 201 $ 1 $ 3,288 $ 19,870 Reinvestment of Cash Distributions................ -- -- -- 559 618 Cost of shares redeemed........ (65) (70) -- (3,509) (16,824) -------- -------- ------- -------- --------- ---------- --------- --------- Increase in Net Assets From A Shares Transactions............ $ 110 $ 131 $ 1 N/A $ 338 $ 3,664 N/A N/A -------- -------- ------- -------- --------- ---------- --------- --------- Total Net Increase (Decrease) from Capital Transactions...... 22,402 (49,658) 6,626 (11,972) 591,600 947,260 (17,214) 134,200 ======== ======== ======= ======== ========= ========== ========= =========
Amounts designated as "-- " are $0 or have been rounded to $0. 56 NOTES TO FINANCIAL STATEMENTS (continued) STI CLASSIC FUNDS October 31, 2004 7. Capital Shares Transactions (continued):
Classic Classic Seix Classic Institutional Institutional Institutional Institutional Core Bond Intermediate High Yield Limited Duration Fund Fund Fund Fund --------------------- --------------------- --------------------- --------------------- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 --------- --------- --------- --------- --------- --------- --------- --------- Share Transactions: Institutional Shares Issued.......................... 3,935 106 710 55 77,562 94,090 15,801 26,179 Reinvested...................... 205 159 95 110 6,653 2,577 166 97 Redeemed........................ (1,963) (5,072) (151) (1,343) (31,699) (9,352) (17,691) (12,832) ------- -------- ------ -------- -------- -------- -------- -------- Increase (Decrease) From Institutional Shares Transactions.................... 2,177 (4,807) 654 (1,178) 52,516 87,315 (1,724) 13,444 ------- -------- ------ -------- -------- -------- -------- -------- T Shares Issued.......................... -- -- 159 -- Reinvested...................... -- -- -- -- Redeemed........................ -- -- (3) -- ------- -------- ------ -------- -------- -------- -------- -------- Increase From T Shares Transactions.................... -- N/A -- N/A 156 N/A -- N/A ------- -------- ------ -------- -------- -------- -------- -------- L Shares Issued.......................... -- -- -- -- Reinvested...................... -- -- -- -- Redeemed........................ -- -- -- -- ------- -------- ------ -------- -------- -------- -------- -------- Increase From L Shares Transactions.................... -- N/A -- N/A -- N/A -- N/A ------- -------- ------ -------- -------- -------- -------- -------- A Shares Issued.......................... 17 19 -- 303 1,950 Reinvested...................... -- -- -- 51 60 Redeemed........................ (7) (7) -- (319) (1,625) ------- -------- ------ -------- -------- -------- -------- -------- Increase From A Shares Transactions.................... 10 12 -- N/A 35 385 N/A N/A ------- -------- ------ -------- -------- -------- -------- -------- Total Net Increase (Decrease) from Share Transactions.............. 2,187 (4,795) 654 (1,178) 52,707 87,700 (1,724) 13,444 ======= ======== ====== ======== ======== ======== ======== ========
Amounts designated as "-- " are $0 or have been rounded to $0. 57 8. Federal Income Tax Information The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2004 was as follows (000):
Distributions Paid From ------------------------------ Net Investment Net Long Term Total Taxable Total Distributions Fund Income Capital Gains Distributions Paid* ---- -------------- ------------- ------------- ------------------- Core Bond Fund............................................ $ 2,217 $141 $ 2,358 $ 2,358 Intermediate Bond Fund.................................... 973 -- 973 973 High Yield Fund........................................... 89,336 164 89,500 89,500 Limited Duration Fund..................................... 1,544 -- 1,544 1,544
--------------- * Total distributions paid differ from the Statement of Changes in Net Assets because for tax purposes dividends are recognized when actually paid. As of October 31, 2004 the components of accumulated earnings (deficit) on a tax basis were as follows (000):
Undistributed Undistributed Unrealized Total Ordinary Long Term Accumulated Distributions Appreciation Accumulated Fund Income Capital Gains Earnings Payable (Depreciation)* Earnings (Deficit) ---- ------------- ------------- ----------- ------------- --------------- ------------------ Core Bond Fund............... $ 353 $ 267 $ 620 $ (112) $ 741 $ 1,249 Intermediate Bond Fund....... 115 328 443 (63) 630 1,010 High Yield Fund.............. 17,246 7,880 25,126 (5,708) 54,924 74,342 Limited Duration Fund........ 120 3 123 (110) (38) (25)
* The differences between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to: the tax deferral of losses on wash sales. 58 NOTES TO FINANCIAL STATEMENTS (continued) STI CLASSIC FUNDS October 31, 2004 At October 31, 2004, the cost of securities for federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows (000):
Tax Tax Net Unrealized Unrealized Unrealized Appreciation/ Fund Tax Cost Appreciation (Depreciation) (Depreciation) ---- ---------- ------------ -------------- -------------- Core Bond Fund.............................................. $ 59,489 $ 843 $ (102) $ 741 Intermediate Bond Fund...................................... 35,772 671 (41) 630 High Yield Fund............................................. 1,646,632 58,182 (3,258) 54,924 Limited Duration Fund....................................... 127,910 14 (52) (38)
During the year ended October 31, 2004, the Intermediate Bond Fund, and Limited Duration Fund utilized capital loss carryforwards of $190,245 and $999, respectively. As of October 31, 2004, the Funds did not have any net capital loss carryforwards remaining to offset future gains. 59 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- STI CLASSIC FUNDS October 31, 2004 To the Board of Trustees and Shareholders of STI Classic Funds: In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, 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 Classic Institutional Core Bond Fund (formerly Seix Core Bond Fund), Classic Institutional Intermediate Bond Fund (formerly Seix Intermediate Bond Fund), SEIX Institutional High Yield Fund (formerly Seix High Yield Fund) and Classic Institutional Limited Duration Fund (formerly Seix Limited Duration Fund) (four of the funds constituting STI Classic Funds, hereafter referred to as the "Funds") at October 31, 2004, and the results of each of their operations, the changes in each of their net assets and the financial highlights for the year (or period) ended October 31, 2004, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards 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 October 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The statements of changes in net assets for the year ended October 31, 2003 and the financial highlights for each of the four years (or periods) ended October 31, 2003 of the predecessor funds were audited by other independent accountants whose report dated December 19, 2003 expressed an unqualified opinion on those financial statements. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania December 22, 2004 60 TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (UNAUDITED) -------------------------------------------------------------------------------- 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 Member." --------------------------------------------------------------------------------
TERM OF PRINCIPAL NUMBER OF OTHER POSITION(S) OFFICE AND OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE OVERSEEN FOR HELD BY BOARD DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS THE TRUST MEMBER ----------------------------------------------------------------------------------------------------------------------------- INTERESTED BOARD MEMBERS* Richard W. Courts, II Trustee November, 2001 Chairman of the Board, 49 Director, Cousins 3435 Stelzer Road Atlantic Investment Properties, Inc.; Director, Columbus, OH 43219 Company, 1970 to present. Genuine Parts, Co.; 01/18/36 Director, Piedmont Hospital; Director, SunTrust Bank, Atlanta; Chairman, Courts Foundation; Chairman, J. Bulow Campbell Foundation. Current Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- Clarence H. Ridley Trustee November, 2001 Chairman of the Board; 49 Director, Crawford & Co.; 3435 Stelzer Road Haverty Furniture Director, Pike's Family Columbus, OH 43219 Companies, 2001 to Nurseries, Inc.; Trustee, 06/03/42 present; Partner, King St. Joseph's Health System, and Spaulding LLP (law Inc.; Director, High Museum firm), 1971 to 2000. of Atlanta. Current Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- INDEPENDENT BOARD MEMBERS Thomas Gallagher Trustee May, 2000 President, Genuine Parts 49 Director, Shepherd Center; 3435 Stelzer Road Company Wholesale Director, NAPA; Director, Columbus, OH 43219 Distribution, 1970 to Genuine Parts Co.; Director, 11/25/47 present. Stone Mountain Industrial Park; Trustee, The Lovett School; Director, Oxford Industries. Current Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- F. Wendell Gooch Trustee May, 1992 Retired. 49 Current Trustee of STI 3435 Stelzer Road Classic Variable Trust, The Columbus, OH 43219 Capitol Mutual Funds and SEI 12/03/32 Family of Funds. ----------------------------------------------------------------------------------------------------------------------------- James O. Robbins Trustee May, 2000 President and Chief 49 Director, National Cable and 3435 Stelzer Road Executive Officer, Cox Telecommunications Columbus, OH 43219 Communications, Inc., Association; Director, 07/04/42 1985 to present. Discovery Channel; Director, Cable Labs; Director, C-SPAN; Trustee, St. Paul's Schools; Director, Cox Communications. Current Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- Jonathan T. Walton Trustee February, 1998 Retired. 49 Current Trustee of STI 3435 Stelzer Road Classic Variable Trust and Columbus, OH 43219 W.K. Kellogg Trust. 03/28/30 -----------------------------------------------------------------------------------------------------------------------------
61 -------------------------------------------------------------------------------- Trustees who are deemed to be "interested persons" of the Trust are referred to as "Interested Board Member." Messrs. Courts and Ridley are Trustees who may be deemed to be "interested persons" of the Trust. --------------------------------------------------------------------------------
TERM OF PRINCIPAL NUMBER OF OTHER POSITION(S) OFFICE AND OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE OVERSEEN FOR HELD BY BOARD DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS THE TRUST MEMBER ----------------------------------------------------------------------------------------------------------------------------- Sidney E. Harris Trustee November, 2004 Dean of Robinson College 49 Director, ServiceMaster; 3435 Stelzer Road of Business, Georgia Director, Total System Columbus, OH 43219 State University. Services, Inc. Current 07/21/49 Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- Warren Y. Jobe Trustee November, 2004 Retired. 49 Director, WellPoint Health 3435 Stelzer Road Networks; Director, Columbus, OH 43219 UniSource Energy Corp.; 11/12/40 Director, Tucson Electric Power. Current Trustee of STI Classic Variable Trust. ----------------------------------------------------------------------------------------------------------------------------- Charles D. Winslow Trustee November, 2004 Retired. 49 Current Trustee of STI 3435 Stelzer Road Classic Variable Trust. Columbus, OH 43219 07/13/35 -----------------------------------------------------------------------------------------------------------------------------
* Mr. Courts may be deemed an interested Trustee because of his directorships with affiliates of the Adviser. Mr. Ridley may be deemed an interested Trustee because of a material business relationship with the parent of the Adviser. 62 TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (UNAUDITED) --------------------------------------------------------------------------------
TERM OF PRINCIPAL POSITION(S) OFFICE AND OCCUPATION(S) NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS --------------------------------------------------------------------------------------------------------------------------- OFFICERS R. Jeffrey Young President Since 2004 Senior Vice President, Relationship Management, 3435 Stelzer Road BISYS Fund Services since April 2002. Vice Columbus, OH 43219 President, Client Services, BISYS Fund Services from 08/22/64 May 1997 to April 2002. --------------------------------------------------------------------------------------------------------------------------- Bryan C. Haft Treasurer and CFO Since 2004 Vice President, Financial Administration, BISYS Fund 3435 Stelzer Road Services since July 2000. Director, Administration Columbus, OH 43219 Services, BISYS Fund Services from May 1998 to July 01/23/65 2000. --------------------------------------------------------------------------------------------------------------------------- Deborah A. Lamb Executive Vice President, Since 2003 Chief Compliance Officer and Managing Director of 3435 Stelzer Road Assistant Secretary and CCO Trusco Capital Management, Inc. since March 2003 and Columbus, OH 43219 President of Investment Industry Consultants, LLC 10/02/52 since June 2000. Director of Compliance at INVESCO, Inc. from March 1995 to June 2000. --------------------------------------------------------------------------------------------------------------------------- Alaina V. Metz Assistant Secretary Since 2004 Vice President, Blue Sky Compliance, BISYS Fund 3435 Stelzer Road Services since January 2002. Chief Administrative Columbus, OH 43219 Officer, Blue Sky Compliance, BISYS Fund Services 04/07/67 from June 1995 to January 2002. --------------------------------------------------------------------------------------------------------------------------- Julie M. Powers Assistant Secretary Since 2004 Senior Paralegal, Legal Services, BISYS Fund 3435 Stelzer Road Services since June 2000. Paralegal of Phillips, Columbus, OH 43219 Lytle, Hitchcock, Blaine & Huber LLP from March 1998 10/08/69 to June 2000. ---------------------------------------------------------------------------------------------------------------------------
63 SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED) -------------------------------------------------------------------------------- A Special Meeting of the Shareholders of the Seix Funds, Inc. was held on September 23, 2004. At the meeting, shareholders voted on and approved the following proposals: Proposal 1: Approval of the Agreement and Plan of Reorganization, which provides for: (1) the transfer of all of the assets and liabilities of each portfolio of the Seix Funds, Inc. in exchange for shares of the corresponding series of the Trust; (2) the distribution of the Trust's shares so received to shareholders of the corresponding Seix Fund; and (3) the termination under state law of the Seix Funds. Proposal 2: Approval of a new investment advisory agreement between Trusco Capital Management, Inc. and the Seix Funds on behalf of each Seix Fund. The results of this meeting are presented below:
Proposal 1: For Against Abstain Total ----------- ---------- ------- --------- ---------- Seix Core Bond Fund......................................... 4,060,433 -- 117 4,060,550 Seix Intermediate Bond Fund................................. 2,910,988 -- -- 2,910,988 Seix High Yield Fund........................................ 82,585,863 44,534 1,225,616 83,856,013 Seix Limited Duration Fund.................................. 11,824,034 -- -- 11,824,034
Proposal 2: For Against Abstain Total ----------- ---------- ------- --------- ---------- Seix Core Bond Fund......................................... 4,060,433 -- 117 4,060,550 Seix Intermediate Bond Fund................................. 2,910,988 -- -- 2,910,988 Seix High Yield Fund........................................ 82,630,397 -- 1,225,616 83,856,013 Seix Limited Duration Fund.................................. 11,824,034 -- -- 11,824,034
Proxy Voting (unaudited) Information regarding the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and how the Funds voted proxies relating to portfolio securities during the year ended October 31, 2004 is available (1) without charge, upon request, by calling 1-800-428-6970, and (2) on the Securities and Exchange Commission's website at www.sec.gov. Other Information (unaudited) Schedules of Portfolio Investments for periods ending July 31, 2004 and January 31, 2005 are available, without charge, on the Securities and Exchange Commission's website at www.sec.gov. 64 EXPENSE EXAMPLES (UNAUDITED) -------------------------------------------------------------------------------- As a shareholder of the STI Classic Funds, you incur two types of costs: (1) transactions costs, including sales charges (loads) (A Shares only) on purchases, reinvested dividends, or other distributions; redemption fees (contingent deferred sales charges on L Shares only); and exchange fees; (2) ongoing costs, including management fees, distribution (and/or service) 12b-1 fees (L and A Shares only) and other Fund expenses. This example is intended to help you understand you ongoing costs (in dollars) of investing in the STI Classic Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2004 through October 31, 2004. Actual Expenses The table below provides information about the actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Beginning Ending Expense Paid Expense Ratio Account Value Account Value During Period* During Period** Fund 05/01/04 10/31/04 05/01/04-10/31/04 05/01/04-10/31/04 ---- ----------------- -------------- ----------------- ----------------- Core Bond Fund............ Institutional $1,000.00 $1,041.50 $2.32 0.45% Core Bond Fund............ T Shares (a) 1,000.00 1,006.70 0.32 0.56% Core Bond Fund............ L Shares (a) 1,000.00 1,006.50 0.63 1.10% Core Bond Fund............ A Shares 1,000.00 1,039.90 3.60 0.70% Intermediate Bond Fund.... Institutional 1,000.00 1,035.20 2.31 0.45% Intermediate Bond Fund.... T Shares (a) 1,000.00 1,005.30 0.41 0.71% Intermediate Bond Fund.... L Shares (a) 1,000.00 1,005.10 0.58 1.00% Intermediate Bond Fund.... A Shares (a) 1,000.00 1,005.30 0.41 0.71% High Yield Fund........... Institutional 1,000.00 1,058.50 2.85 0.55% High Yield Fund........... T Shares (a) 1,000.00 1,012.20 0.39 0.68% High Yield Fund........... L Shares (a) 1,000.00 1,012.00 0.68 1.18% High Yield Fund........... A Shares 1,000.00 1,058.60 4.15 0.80% Limited Duration Fund..... Institutional 1,000.00 1,005.40 1.01 0.20% Limited Duration Fund..... T Shares (a) 1,000.00 1,000.80 0.21 0.37% Limited Duration Fund..... L Shares (a) 1,000.00 1,000.60 0.41 0.71%
* Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. ** Annualized. (a) Class commenced operations on October 11, 2004. 65 -------------------------------------------------------------------------------- Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on each STI Classic Funds' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Ending Expense Paid Expense Ratio Account Value Account Value During Period* During Period** Fund 05/01/04 10/31/04 05/01/04-10/31/04 05/01/04-10/31/04 ---- ------------- ------------- ------------------ ------------------ Core Bond Fund............... Institutional $1,000.00 $1,022.94 $2.29 0.45% Core Bond Fund............... T Shares (a) 1,000.00 1,022.38 0.33 0.56% Core Bond Fund............... L Shares (a) 1,000.00 1,019.66 0.64 1.10% Core Bond Fund............... A Shares 1,000.00 1,021.68 3.57 0.70% Intermediate Bond Fund....... Institutional 1,000.00 1,022.94 2.29 0.45% Intermediate Bond Fund....... T Shares (a) 1,000.00 1,021.63 0.41 0.71% Intermediate Bond Fund....... L Shares (a) 1,000.00 1,020.16 0.58 1.00% Intermediate Bond Fund....... A Shares (a) 1,000.00 1,021.63 0.41 0.71% High Yield Fund.............. Institutional 1,000.00 1,022.43 2.80 0.55% High Yield Fund.............. T Shares (a) 1,000.00 1,021.78 0.40 0.68% High Yield Fund.............. L Shares (a) 1,000.00 1,019.26 0.69 1.18% High Yield Fund.............. A Shares 1,000.00 1,021.17 4.08 0.80% Limited Duration Fund........ Institutional 1,000.00 1,024.20 1.02 0.20% Limited Duration Fund........ T Shares (a) 1,000.00 1,023.34 0.22 0.37% Limited Duration Fund........ L Shares (a) 1,000.00 1,021.63 0.41 0.71%
--------------- * Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. ** Annualized. (a) Class commenced operations on October 11, 2004. 66 [This page intentionally left blank] 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 Trusco Capital Management, Inc., an affiliate of SunTrust Banks, Inc. DISTRIBUTOR: BISYS Fund Services LP This information must be preceded or accompanied by a current prospectus for each Fund described. STIARCF 12/04 ITEM 2. CODE OF ETHICS. Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so. THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS PERFORMING SIMILAR FUNCTIONS. THIS CODE OF ETHICS IS INCLUDED AS EXHIBIT 11 (a)(1). The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 11(a)(1), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item. If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver. DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (b) OF THIS ITEM 2. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a) (1) Disclose that the registrant's board of directors has determined that the registrant either: (i) Has at least one audit committee financial expert serving on its audit committee; or (ii) Does not have an audit committee financial expert serving on its audit committee. (2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is "independent." In order to be considered "independent" for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or (ii) Be an "interested person" of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)). (3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert. 3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT COMMITTEE. 3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS WARREN Y. JOBE, WHO IS "INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Information presented in Item 4 represents amounts paid by the registrant, including amounts paid for the services to the Funds included in the accompanying report (see Item 1). (a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. Audit Fees: the aggregate fees billed for each of the last two fiscal years for professional services rendered by PricewaterhouseCoopers LLP for the audit of the Funds' annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows: 2003 $448,509 2004 $663,000 (b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. Audit-Related Fees: the aggregate fees billed for each of the last two fiscal years for assurance and related services by PricewaterhouseCoopers LLP that are reasonably related to the performance of the audit of the Funds' financial statements and are not reported under Item 1 were as follows: 2003 $61,500(1) 2004 $72,000(1) Notes: (1) Services related to securities count examinations under Rule 17f-2 of the Investment Company Act. (c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. Tax Fees: the aggregate fees billed for each of the last two fiscal years for professional services rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice, and tax planning were as follows: 2003 $0 2004 $0 (d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. All Other Fees: the aggregate fees billed for each of the last two fiscal years for products and services provided by PricewaterhouseCoopers LLP to the Funds, other than the services reported in Items 1 through 3. 2003 $0 2004 $0 (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. THE TRUST'S AUDIT COMMITTEE CHARTER PROVIDES THAT THE PRINCIPAL RESPONSIBILITIES OF THE COMMITTEE SHALL INCLUDE APPROVING AUDIT AND NON-AUDIT SERVICES AN INDEPENDENT ACCOUNTING FIRM PROVIDES TO THE TRUST (AND CERTAIN TRUST SERVICE PROVIDERS) AS REQUIRED BY AND IN ACCORDANCE WITH APPLICABLE LAW. THE COMMITTEE IS AUTHORIZED TO DEVELOP POLICIES AND PROCEDURES, IN ACCORDANCE WITH APPLICABLE LAW, THAT PROVIDE FOR THE ADVANCE PRE-APPROVAL OF SOME OR ALL AUDIT AND NON-AUDIT SERVICES. THE COMMITTEE IS FURTHER AUTHORIZED TO DELEGATE ITS RESPONSIBILITY TO PRE-APPROVE AUDIT AND NON-AUDIT SERVICES TO ONE OR MORE MEMBERS OF THE COMMITTEE, IN ACCORDANCE WITH APPLICABLE LAW. (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. 2003 0% 2004 0% (f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. 2003/2004: The percentage of hours expended on PricewaterhouseCoopers LLP engagement to audit the Funds' financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. The aggregate non-audit fees billed by the registrant's PricewaterhouseCoopers LLP for services rendered to the Funds, and rendered to the Funds investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Funds for each of the last two fiscal years of the registrant were as follows: 2003 $1,498,453 2004 $2,291,907 Non-audit services relate principally to certain technical accounting advice on financial products of the Bank; Sarbanes-Oxley 404 implementation and testing; and, tax compliance services to other entities controlled by SunTrust Banks, Inc. (h) Disclose whether the registrant's audit committee of the board of directors has considered whether the provision of nonaudit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. THE AUDIT COMMITTEE HAS CONSIDERED THAT THE PROVISION OF NON-AUDIT SERVICES THAT WERE RENDERED TO THE REGISTRANT'S INVESTMENT ADVISER (NOT INCLUDING ANY SUBADVISER WHOSE ROLE IS PRIMARILY PORTFOLIO MANAGEMENT AND IS SUBCONTRACTED WITH OR OVERSEEN BY ANOTHER INVESTMENT ADVISER), AND ANY ENTITY CONTROLLING, CONTROLLED BY, OR UNDER COMMON CONTROL WITH THE INVESTMENT ADVISER THAT PROVIDES ONGOING SERVICES TO THE REGISTRANT THAT WERE NOT PRE-APPROVED PURSUANT TO PARAGRAPH (c)(7)(ii) OF RULE 2-01 OF REGULATION S-X IS COMPATIBLE WITH MAINTAINING THE PRINCIPAL ACCOUNTANT'S INDEPENDENCE. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. (a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. (b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the listing standards for all audit committees. NOT APPLICABLE. ITEM 6. SCHEDULE OF INVESTMENTS. File Schedule I - Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in Section 210.12-12 of Regulation S-X, unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form. NOT APPLICABLE. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. NOT APPLICABLE. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. If the registrant is a closed-end management investment company, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant's equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781). NOT APPLICABLE. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. THE TRUST, EFFECTIVE SEPTEMBER 28, 2004, ADOPTED PROCEDURES BY WHICH SHAREHOLDERS MAY RECOMMEND NOMINEES TO THE REGISTRANT'S BOARD OF DIRECTORS. ITEM 10. CONTROLS AND PROCEDURES. (a) Disclose the conclusions of the registrant's principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED AND ARE OPERATING EFFECTIVELY TO ENSURE THAT INFORMATION REQUIRED TO BE DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS (i) ACCUMULATED AND COMMUNICATED TO THE INVESTMENT COMPANY'S MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE; AND (ii) RECORDED, PROCESSED, SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND EXCHANGE COMMISSION'S RULES AND FORMS. (b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING THAT OCCURRED DURING THE SECOND FISCAL QUARTER OF THE PERIOD COVERED BY THIS REPORT THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING. ITEM 11. EXHIBITS. (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. THE CODE OF ETHICS THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS ATTACHED HERETO. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO RULE 30a-2(a) ARE ATTACHED HERETO. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. NOT APPLICABLE. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by rule 30a-2(b) under the Act as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant incorporates it by reference. CERTIFICATIONS PURSUANT TO RULE 30a-2(b) ARE FURNISHED HEREWITH. 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/ Bryan Haft, Treasurer -------------------------------------------- Bryan Haft, Treasurer Date January 6, 2005 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/ R. Jeffrey Young, President -------------------------------------------- R. Jeffrey Young, President Date January 6, 2005 By (Signature and Title)* /s/ Bryan Haft, Treasurer -------------------------------------------- Bryan Haft, Treasurer Date January 6, 2005 * Print the name and title of each signing officer under his or her signature.