-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nwm2SxdVS1L+a0ZJbPEJO38A3lhp9m8ljexsi3V2XPSV+cwQIkoxEjUGpoBbHqKs 89xu82P3+0lnUVSZP3dvWw== 0001047469-97-000875.txt : 19971016 0001047469-97-000875.hdr.sgml : 19971016 ACCESSION NUMBER: 0001047469-97-000875 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 60 FILED AS OF DATE: 19971015 EFFECTIVENESS DATE: 19971015 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 033-45671 FILM NUMBER: 97696090 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-06557 FILM NUMBER: 97696091 BUSINESS ADDRESS: STREET 1: 2 OLIVER STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6109896602 MAIL ADDRESS: STREET 1: 530 E SWEDESFORD ROAD CITY: WAYNE STATE: PA ZIP: 19087-1693 485BPOS 1 485BPOS AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1997 FILE NO. 33-45671 FILE NO. 811-6557 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / / POST-EFFECTIVE AMENDMENT NO. 22 /X/ AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / / AMENDMENT NO. 24 /X/ STI CLASSIC FUNDS (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) 2 OLIVER STREET BOSTON, MASSACHUSETTS 02109 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE) REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE (800) 342-5734 DAVID G. LEE C/O SEI INVESTMENTS COMPANY ONE FREEDOM VALLEY ROAD OAKS, PENNSYLVANIA 19456 (NAME AND ADDRESS OF AGENT FOR SERVICE) Copies to: RICHARD W. GRANT, ESQ. JOHN H. GRADY, JR., ESQ. MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP 2000 ONE LOGAN SQUARE 1800 M STREET, N.W. PHILADELPHIA, PA 19103 WASHINGTON, D.C. 20036 It is proposed that this filing will become effective (check appropriate box) X Immediately upon filing pursuant to paragraph (b), or - ----- On [DATE] pursuant to paragraph (b), or - ----- 60 days after filing pursuant to paragraph (a) or - ----- 75 days after filing pursuant to paragraph (a) or - ----- On [DATE] pursuant to paragraph (a) of Rule 485. - ----- STI CLASSIC FUNDS CROSS REFERENCE SHEET POST-EFFECTIVE AMENDMENT #22 N-1A ITEM NO. LOCATION - ------------- -------- PART A - ALL FUNDS Item 1. Cover Page Cover Page Item 2. Synopsis Expense Summary Item 3. Condensed Financial Information * Item 4. General Description of Funds and Investment Objectives; Registrant Investment Policies and Strategies; General Investment Policies and Strategies; Investment Risks; Investment Limitations; Appendix Item 5. Management of the Fund Board of Trustees; Investment Advisor; Distribution; Administration Item 5a. * Item 6. Capital Stock and Other Voting Rights; Shareholder Securities Inquiries; Dividends and Distributions; Tax Information Item 7. Purchase of Securities Being Cover Page; Purchase of Fund Offered Shares; Redemption of Fund Shares Item 8. Redemption or Repurchase Purchase of Fund Shares; Redemption of Fund Shares; Distribution Item 9. Pending Legal Proceedings * PART B - ALL FUNDS Item 10. Cover Page Cover Page Item 11. Table of Contents Table of Contents Item 12. General Information and History The Trust Item 13. Investment Objectives and Description of Permitted Policies Investments; Investment Limitations Item 14. Management of the Registrant Trustees and Officers of the Trust; The Administrator Item 15. Control Persons and Principal Trustees and Officers of the Trust Holders of Securities Item 16. Investment Advisory and Other Investment Advisor; The Services Administrator; The Distributor; Legal Counsel (Prospectus); Independent Auditors (Prospectus); Experts Item 17. Brokerage Allocation Fund Transactions Item 18. Capital Stock and Other Description of Shares Securities Item 19. Purchase, Redemption, and Purchase and Redemption of Pricing of Securities Being Shares; Offered Determination of Net Asset Value Item 20. Tax Status Taxes Item 21. Underwriters The Distributor Item 22. Calculation of Yield Quotations Computation of Yield; Calculation of Total Return Item 23. Financial Statements Financial Information PART C Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C of this Registration Statement. * Not applicable The Prospectuses for the: Trust Shares of the Investment Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund, U.S. Government Securities Fund, Limited-Term Federal Mortgage Securities Fund, Short-Term Bond Fund, Short-Term U.S. Treasury Securities Fund, Florida Tax-Exempt Bond Fund, Georgia Tax-Exempt Bond Fund, Tennessee Tax-Exempt Bond Fund, Prime Quality Money Market Fund, U.S. Government Securities Money Market Fund, Tax-Exempt Money Market Fund, Capital Growth Fund, Value Income Stock Fund, Small Cap Equity Fund, Mid-Cap Equity Fund, Balanced Fund, Sunbelt Equity Fund, International Equity Index Fund, International Equity Fund, and Emerging Markets Equity Fund; Investor Shares and Flex Shares of the Investment Grade Bond Fund, Investment Grade Tax-Exempt Bond Fund, U.S. Government Securities Fund, Limited-Term Federal Mortgage Securities Fund, Short-Term Bond Fund, Short-Term U.S. Treasury Securities Fund, Florida Tax-Exempt Bond Fund, Georgia Tax-Exempt Bond Fund, Tennessee Tax-Exempt Bond Fund, Capital Growth Fund, Value Income Stock Fund, Small Cap Equity Fund, Mid-Cap Equity Fund, Balanced Fund, Sunbelt Equity Fund, International Equity Index Fund, and International Equity Fund; Investor Shares of the Prime Quality Money Market Fund, U.S. Government Securities Money Market Fund, Tax-Exempt Money Market Fund; and Trust Shares of the Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund included as part of Post-Effective Amendment No. 21 to the Registrant's Registration Statement on Form N-1A (File No. 33-45671) filed with the Securities and Exchange Commission on September 30, 1997, are hereby incorporated by reference as if set forth in full herein. STI CLASSIC FUNDS INVESTMENT ADVISORS: STI CAPITAL MANAGEMENT, N.A. TRUSCO CAPITAL MANAGEMENT, INC. SUNTRUST BANK, CHATTANOOGA, N.A. SUNTRUST BANK, ATLANTA This Statement of Additional Information is not a prospectus. It is intended to provide additional information regarding the activities and operations of the Trust and should be read in conjunction with the Trust's prospectuses dated October 1, 1997. Prospectuses may be obtained through the Distributor, SEI Investments Distribution Co., One Freedom Valley Road, Oaks, Pennsylvania 19456. TABLE OF CONTENTS PAGE THE TRUST.................................................................B- DESCRIPTION OF PERMITTED INVESTMENTS......................................B- INVESTMENT LIMITATIONS....................................................B- INVESTMENT ADVISORS.......................................................B- THE ADMINISTRATOR.........................................................B- THE DISTRIBUTOR...........................................................B- TRUSTEES AND OFFICERS OF THE TRUST........................................B- PERFORMANCE INFORMATION...................................................B- COMPUTATION OF YIELD......................................................B- CALCULATION OF TOTAL RETURN...............................................B- PURCHASE AND REDEMPTION OF SHARES.........................................B- DETERMINATION OF NET ASSET VALUE..........................................B- TAXES.....................................................................B- FUND TRANSACTIONS.........................................................B- TRADING PRACTICES AND BROKERAGE...........................................B- DESCRIPTION OF SHARES.....................................................B- SHAREHOLDER LIABILITY.....................................................B- LIMITATION OF TRUSTEES' LIABILITY.........................................B- 5% AND 25% SHAREHOLDERS...................................................B- EXPERTS...................................................................B- FINANCIAL STATEMENTS......................................................B- October 1, 1997 THE TRUST STI Classic Funds (the "Trust") is a diversified, open-end management investment company established under Massachusetts law as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Declaration of Trust permits the Trust to offer separate series ("Funds") of units of beneficial interest ("shares") and different classes of shares of each Fund. Shareholders at present may purchase shares of the Trust's money market funds through two separate classes (Trust Shares and Investor Shares) and shares of the Trust's other funds through three separate classes (Trust Shares, Investor Shares and Flex Shares), which provide for variations in sales charges, distribution costs, transfer agent fees, voting rights and dividends. Except for these differences, each Trust Share, Investor Share and Flex Share, if any, of each Fund represents an equal proportionate interest in that portfolio. See "Description of Shares." This Statement of Additional Information relates to the: - Trust Shares and Investor Shares of the Trust's Prime Quality Money Market Fund, U.S. Government Securities Money Market Fund and Tax-Exempt Money Market Fund (the "Money Market Funds"): - Trust Shares, Investor Shares and Flex Shares of the Trust's Investment Grade Bond Fund, Short-Term U.S. Treasury Securities Fund, Short-Term Bond Fund, U.S. Government Securities Fund and Limited-Term Federal Mortgage Securities Fund (the "Bond Funds"); Investment Grade Tax-Exempt Bond Fund, Florida Tax-Exempt Bond Fund, Georgia Tax-Exempt Bond Fund and Tennessee Tax-Exempt Bond Fund (the "Tax-Exempt Bond Funds"); Capital Growth Fund, Value Income Stock Fund, Mid-Cap Equity Fund, Sunbelt Equity Fund, International Equity Index Fund, International Equity Fund, (the "Equity Funds"); and the Balanced Fund: - Trust Shares and Flex Shares of the Small Cap Equity Fund (an "Equity Fund"); and - Trust Shares of the Emerging Markets Fund (an "Equity Fund"). These various series are collectively referred to herein as the "Funds." The Trust pays its expenses, including fees of its service providers, audit and legal expenses, expenses of preparing prospectuses, proxy solicitation material and reports to Shareholders, costs of custodial services, and registering the shares under federal and state securities laws, pricing, insurance expenses, litigation, and other extraordinary expenses, brokerage costs, interest charges, taxes, and organization expenses. DESCRIPTION OF PERMITTED INVESTMENTS CUSTODIAL RECEIPTS The custodian arranges for the issuance of the certificates or receipts evidencing ownership and maintains the register. Receipts include "Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"), and "Certificates of Accrual on Treasury Securities" ("CATS"). TRs, TIGRs and CATS are sold as zero coupon securities. STRIPS Separately Traded Interest and Principal Securities ("STRIPS") are component parts of U.S. Treasury Securities traded through the Federal Book-Entry System. An Advisor will only purchase STRIPS that it determines are liquid B-2 or, if illiquid, do not violate the affected Fund's investment policy concerning investments in illiquid securities. Consistent with Rule 2a-7 under the Investment Company Act of 1940, as amended, (the "1940 Act"), the Money Market Funds' Advisor will only purchase STRIPS for Money Market Funds that have a remaining maturity of 397 days or less; therefore, the Money Market Funds currently may only purchase interest component parts of U.S. Treasury Securities. While there is no limitation on the percentage of a Fund's assets that may be comprised of STRIPS, the Money Market Funds' Advisor will monitor the level of such holdings to avoid the risk of impairing shareholders' redemption rights and of deviations in the value of shares of the Money Market Funds. VARIABLE RATE MASTER DEMAND NOTES The Tax-Exempt Money Market Fund, Balanced Fund, Tax-Exempt Bond Funds and Value Income Stock Fund may invest in variable rate master demand notes which may or may not be backed by bank letters of credit. These notes permit the investment of fluctuating amounts at varying market rates of interest pursuant to direct arrangements between a Fund, as lender, and a borrower. Such notes provide that the interest rate on the amount outstanding varies on a daily, weekly or monthly basis depending upon a stated short-term interest rate index. Both the lender and the borrower have the right to reduce the amount of outstanding indebtedness at any time. There is no secondary market for the notes and it is not generally contemplated that such instruments will be traded. The quality of the note or the underlying credit must, in the opinion of the appropriate Advisor, be equivalent to the ratings applicable to permitted investments for the particular Fund. The appropriate Advisor will monitor on an ongoing basis the earning power, cash flow and liquidity ratios of the issuers of such instruments and will similarly monitor the ability of an issuer of a demand instrument to pay principal and interest on demand. U.S. GOVERNMENT AGENCY SECURITIES Certain investments of each of the Funds except the Short-Term U.S. Treasury Securities Fund may include U.S. Government Agency Securities. Agencies of the United States Government which issue obligations consist of, among others, the Export Import Bank of the United States, Farmers Home Administration, Federal Farm Credit Bank, Federal Housing Administration, Government National Mortgage Association ("GNMA"), Maritime Administration, Small Business Administration and The Tennessee Valley Authority. Obligations of instrumentalities of the United States Government include securities issued by, among others, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"), Federal Intermediate Credit Banks, Federal Land Banks, Fannie Mae and the United States Postal Service as well as government trust certificates. Some of these securities are supported by the full faith and credit of the United States Treasury (E.G., GNMA securities), others are supported by the right of the issuer to borrow from the Treasury and still others are supported only by the credit of the instrumentality (E.G., Fannie Mae securities). Guarantees of principal by agencies or instrumentalities of the U.S. Government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing the value of the obligation prior to maturity. MORTGAGE-BACKED SECURITIES MORTGAGE-BACKED SECURITIES--GOVERNMENT PASSTHROUGH SECURITIES The primary issuers or guarantors of these mortgage-backed securities are the Government National Mortgage Association ("GNMA"), Fannie Mae, and the Federal Home Loan Mortgage Corporation ("FHLMC"). Fannie Mae and FHLMC obligations are not backed by the full faith and credit of the U.S. Government as GNMA certificates are, but Fannie Mae and FHLMC securities are supported by the instrumentalities' right to borrow from the U.S. Treasury. GNMA, Fannie Mae, and FHLMC each guarantees timely distributions of interest to certificate holders. GNMA and Fannie Mae also guarantee timely distributions of scheduled principal. In the past, FHLMC has only guaranteed the B-3 ultimate collection of principal of the underlying mortgage loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCS) which also guarantee timely payment of monthly principal reductions. Each of the Funds except the Short-Term U.S. Treasury Securities Fund, Sunbelt Equity Fund, Mid-Cap Equity Fund and International Equity Index Fund may invest in mortgage-backed securities issued or guaranteed by U.S. Government agencies or instrumentalities such as GNMA, Fannie Mae and FHLMC. Obligations of GNMA are backed by the full faith and credit of the United States Government. Obligations of Fannie Mae and FHLMC are not backed by the full faith and credit of the United States Government but are considered to be of high quality since they are considered to be instrumentalities of the United States. The market value and interest yield of these mortgage-backed securities can vary due to market interest rate fluctuations and early prepayments of underlying mortgages. These securities represent ownership in a pool of federally insured mortgage loans with a maximum maturity of 30 years. However, due to scheduled and unscheduled principal payments on the underlying loans, these securities have a shorter average maturity and, therefore, less principal volatility than a comparable 30-year bond. Since prepayment rates vary widely, it is not possible to accurately predict the average maturity of a particular mortgage-backed security. The scheduled monthly interest and principal payments relating to mortgages in the pool will be "passed through" to investors. Government mortgage-backed securities differ from conventional bonds in that principal is paid back to the certificate holders over the life of the loan rather than at maturity. As a result, there will be monthly scheduled payments of principal and interest. In addition, there may be unscheduled principal payments representing prepayments on the underlying mortgages. Although these securities may offer yields higher than those available from other types of U.S. Government securities, mortgage-backed securities may be less effective than other types of securities as a means of "locking in" attractive long-term rates because of the prepayment feature. For instance, when interest rates decline, the value of these securities likely will not rise asmuch as comparable debt securities due to the prepayment feature. In addition, these prepayments can cause the price of a mortgage-backed security originally purchased at a premium to decline in price to its par value, which may result in a loss. The Bond Funds, Prime Quality Money Market Fund and the Balanced Fund may also invest in privately issued mortgage-backed securities. Two principal types of mortgage-backed securities are collateralized mortgage obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"), which are rated in one of the two highest categories by Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"). CMOs are securities collateralized by mortgages, mortgage pass-throughs, mortgage pay-through bonds (bonds representing an interest in a pool of mortgages where the cash flow generated from the mortgage collateral pool is dedicated to bond repayment), and mortgage-backed bonds (general obligations of the issuers payable out of the issuers' general funds and additionally secured by a first lien on a pool of single family detached properties). Many CMOs are issued with a number of classes or series which have different expected maturities. Investors purchasing such CMOs are credited with their portion of the scheduled payments of interest and principal on the underlying mortgages plus all unscheduled prepayments of principal based on a predetermined priority schedule. Accordingly, the CMOs in the longer maturity series are less likely than other mortgage pass-throughs to be prepaid prior to their stated maturity. Although some of the mortgages underlying CMOs may be supported by various types of insurance, and some CMOs may be backed by GNMA certificates or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies or instrumentalities, the CMOs themselves are not generally guaranteed. MORTGAGE-BACKED SECURITIES--REMICS REMICs, which were authorized under the Tax Reform Act of 1986, are private entities formed for the purpose of holding a fixed pool of mortgages secured by an interest in real property. REMICs are similar to CMOs in that they issue multiple classes of securities. B-4 Investors may purchase beneficial interests in REMICs, which are known as "regular" interests, or "residual" interests. Guaranteed REMIC pass-through certificates ("REMIC Certificates") issued by Fannie Mae or FHLMC represent beneficial ownership interests in a REMIC trust consisting principally of mortgage loans or Fannie Mae, FHLMC or GNMA-guaranteed mortgage pass-through certificates. For FHLMC REMIC Certificates, FHLMC guarantees the timely payment of interest. DETERMINING MATURITIES OF MORTGAGE-BACKED SECURITIES Due to prepayments of the underlying mortgage instruments, mortgage-backed securities do not have a known actual maturity. In the absence of a known maturity, market participants generally refer to an estimated average life. The Advisors believe that the estimated average life is the most appropriate measure of the maturity of a mortgage-backed security. Accordingly, in order to determine whether such security is a permissible investment for a Fund, it will be deemed to have a remaining maturity equal to its average life as estimated by that Fund's Advisor. An average life estimate is a function of an assumption regarding anticipated prepayment patterns. The assumption is based upon current interest rates, current conditions in the relevant housing markets and other factors. The assumption is necessarily subjective, and thus different market participants could produce somewhat different average life estimates with regard to the same security. There can be no assurance that the average life as estimated by an Advisor will be the actual average life. STRIPPED MORTGAGE-BACKED SECURITIES The Limited-Term Federal Mortgage Securities Fund may also invest in stripped mortgage-backed securities, which are securities that are created when a U.S. Government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The holder of the "principal-only" security (PO) receives the principal payments made by the underlying mortgage-backed security, while the holder of the "interest-only" security (IO) receives interest payments from the same underlying security. The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect. DOLLAR ROLLS Dollar rolls may be renewed prior to cash settlement and initially may involve only a firm commitment agreement by the Fund to buy a security. If the broker-dealer to whom the Fund sells the security becomes insolvent, the Fund's right to repurchase the security may be restricted. Other risks involved in entering into dollar rolls include the risk that the value of the security may change adversely over the term of the dollar roll and that the security the Fund is required to repurchase may be worth less than the security that the Fund originally held. To avoid any leveraging concerns, the Fund will place U.S. Government or other liquid, high grade assets in a segregated account in an amount sufficient to cover its repurchase obligation. GICS A GIC is a general obligation of the issuing insurance company and not a separate account. The purchase price paid for a GIC becomes part of the general assets of the issuer, and the contract is paid at maturity from the general assets of the issuer. B-5 Generally, GICs are not assignable or transferable without the permission of the issuing insurance company. For this reason, an active secondary market in GICs does not currently exist and GICs are considered to be illiquid investments. LOAN PARTICIPATIONS In the event of bankruptcy or insolvency of the corporate borrower, a loan participation may be subject to certain defenses that can be asserted by the borrower as a result of improper conduct by the intermediary bank. In addition, in the event the underlying corporate borrower fails to pay principal and interest when due, the Fund may be subject to delays, expenses, and risks that are greater than those that would have been involved if the Fund had purchased a direct obligation of the borrower. Under the terms of a Loan Participation, the Fund may be regarded as a creditor of the intermediary bank (rather than of the underlying corporate borrower), so that the Fund may also be subject to the risk that the intermediary bank may become insolvent. The secondary market for loan participations is limited and any such participation purchased by the Fund may be regarded as illiquid. ASSET-BACKED SECURITIES In addition to mortgage-backed securities, the Bond Funds, Prime Quality Money Market Fund, Limited-Term Federal Mortgage Securities Fund and Balanced Fund may invest in other asset-backed securities rated in one of the two highest rating categories by S&P or Moody's, including company receivables, truck and auto loans, leases and credit card receivables. The Bond Funds may invest in other asset-backed securities that may be created in the future if the Advisor determines they are suitable. These issues may be traded over-the-counter and typically have a short-intermediate maturity structure depending on the paydown characteristics of the underlying financial assets which are passed through to the security holder. Asset-backed securities are not issued or guaranteed by the U.S. Government, its agencies or instrumentalities; however, the payment of principal and interest on such obligations may be guaranteed up to certain amounts and, for a certain period, by a letter of credit issued by a financial institution (such as a bank or insurance company) unaffiliated with the issuers of such securities. The purchase of asset-backed securities raises risk considerations peculiar to the financing of the instruments underlying such securities. For example, there is a risk that another party could acquire an interest in the obligations superior to that of the holders of the asset-backed securities. There also is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on those securities. Asset-backed securities entail prepayment risk, which may vary depending on the type of asset, but is generally less than the prepayment risk associated with mortgage-backed securities. In addition, credit card receivables are unsecured obligations of the card holder. The market for asset-backed securities is at a relatively early stage of development. Accordingly, there may be a limited secondary market for such securities. REPURCHASE AGREEMENTS Each of the Funds, except the Short-Term U.S. Treasury Securities Fund, may enter into repurchase agreements. Repurchase agreements are agreements by which a person (E.G., a Fund) obtains a security and simultaneously commits to return the security to the seller (a primary securities dealer as recognized by the Federal Reserve Bank of New York or a national member bank as defined in Section 3(d)(1) of the Federal Deposit Insurance Act, as amended) B-6 at an agreed upon price (including principal and interest) on an agreed upon date within a number of days (usually not more than seven) from the date of purchase. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or maturity of the underlying security. A repurchase agreement involves the obligation of the seller to pay the agreed upon price, which obligation is, in effect, secured by the value of the underlying security. Repurchase agreements are considered to be loans by a Fund for purposes of its investment limitations. The repurchase agreements entered into by a Fund will provide that the underlying security at all times shall have a value at least equal to 102% of the resale price stated in the agreement (the Advisors monitor compliance with this requirement). Under all repurchase agreements entered into by a Fund, the appropriate Custodian or its agent must take possession of the underlying collateral. However, if the seller defaults, a Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less than the resale price provided in the agreement including interest. In addition, even though the Bankruptcy Code provides protection for most repurchase agreements, if the seller should be involved in bankruptcy or insolvency proceedings, a Fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if the Fund is treated as an unsecured creditor and required to return the underlying security to the seller's estate. MUNICIPAL SECURITIES MUNICIPAL SECURITIES include both municipal notes and municipal bonds. Municipal notes include general obligation notes, tax anticipation notes, revenue anticipation notes, bond anticipation notes, certificates of indebtedness, demand notes and participation interests in municipal notes. Municipal bonds include general obligation bonds, revenue or special obligation bonds, private activity and industrial development bonds and participation interests in municipal bonds. MUNICIPAL NOTES in which the Short-Term Bond Fund, Tax-Exempt Money Market Fund and Tax-Exempt Bond Funds may invest, consist of general obligation notes, tax anticipation notes (notes sold to finance working capital needs of the issuer in anticipation of receiving taxes on a future date), revenue anticipation notes (notes sold to provide needed cash prior to receipt of expected non-tax revenues from a specific source), bond anticipation notes, certificates of indebtedness, demand notes and construction loan notes. A Fund's investments in any of the notes described above will be limited to those obligations (i) where both principal and interest are backed by the full faith and credit of the United States, (ii) which are rated MIG-2 or V-MIG-2 at the time of investment by Moody's, (iii) which are rated SP-2 at the time of investment by S&P, or (iv) which, if not rated by S&P or Moody's, are in the Advisor's judgement, of at least comparable quality to MIG-2, VMIG-2 or SP-2. MUNICIPAL BONDS must be rated at least BBB or better by S&P or at least Baa or better by Moody's at the time of purchase for the Tax-Exempt Bond Funds or in one of the two highest short-term rating categories by S&P or Moody's for the Tax-Exempt Money Market Fund or, if not rated by S&P or Moody's, must be deemed by the Advisor to have essentially the same characteristics and quality as bonds having the above ratings. A Fund may purchase industrial development and pollution control bonds if the interest paid is exempt from Federal income tax. These bonds are issued by or on behalf of public authorities to raise money to finance various privately-operated facilities for business and manufacturing, housing, sports and pollution control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility's user to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment. OTHER TYPES OF TAX-EXEMPT INSTRUMENTS which are permissible investments for the Short-Term Bond Fund, Tax-Exempt Money Market Fund and Tax-Exempt Bond Funds include floating rate notes. Investments in such B-7 floating rate instruments will normally involve industrial development or revenue bonds which provide that the rate of interest is set as a specific percentage of a designated base rate (such as the prime rate) at a major commercial bank, and that the Fund can demand payment of the obligation at all times or at stipulated dates on short notice (not to exceed 30 days) at par plus accrued interest. Such obligations are frequently secured by letters of credit or other credit support arrangements provided by banks. The quality of the underlying credit or of the bank, as the case may be, must, in the Advisor's opinion be equivalent to the long-term bond or commercial paper ratings stated above. The Advisor will monitor the earning power, cash flow and liquidity ratios of the issuers of such instruments and the ability of an issuer of a demand instrument to pay principal and interest on demand. The Funds may also purchase participation interests in municipal securities (such as industrial development bonds and municipal lease/purchase agreements). A participation interest gives a Fund an undivided interest in the underlying municipal security. If it is unrated, the participation interest will be backed by an irrevocable letter of credit or guarantee of a credit-worthy financial institution or the payment obligations otherwise will be collateralized by U.S. Government Securities. Participation interests may have fixed, variable or floating rates of interest and may include a demand feature. A participation interest without a demand feature or with a demand feature exceeding seven days may be deemed to be an illiquid security subject to the Funds' investment limitations restricting their purchases of illiquid securities. A Fund may purchase other types of tax-exempt instruments as long as they are of a quality equivalent to the bond or commercial paper ratings stated above. Opinions relating to the validity of municipal securities and to the exemption of interest thereon from federal income tax are rendered by bond counsel to the respective issuers at the time of issuance. Neither the Funds nor an Advisor will review the proceedings relating to the issuance of municipal securities or the basis for such opinions. STANDBY COMMITMENTS AND PUTS The Prime Quality Money Market Fund, Tax-Exempt Money Market Fund, Balanced Fund, Tax-Exempt Bond Funds and the Bond Funds may purchase securities at a price which would result in a yield to maturity lower than that generally offered by the seller at the time of purchase when they can simultaneously acquire the right to sell the securities back to the seller, the issuer or a third party (the "writer") at an agreed-upon price at any time during a stated period or on a certain date. Such a right is generally denoted as a "standby commitment" or a "put." The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity to permit the Funds to meet redemptions and remain as fully invested as possible in municipal securities. The Funds reserve the right to engage in put transactions. The right to put the securities depends on the writer's ability to pay for the securities at the time the put is exercised. A Fund would limit its put transactions to institutions which the Advisor believes present minimal credit risks, and the Advisor would use its best efforts to initially determine and continue to monitor the financial strength of the sellers of the options by evaluating their financial statements and such other information as is available in the marketplace. It may, however be difficult to monitor the financial strength of the writers because adequate current financial information may not be available. In the event that any writer is unable to honor a put for financial reasons, a Fund would be a general creditor (I.E., on a parity with all other unsecured creditors) of the writer. Furthermore, particular provisions of the contract between the Fund and the writer may excuse the writer from repurchasing the securities; for example, a change in the published rating of the underlying securities or any similar event that has an adverse effect on the issuer's credit or a provision in the contract that the put will not be exercised except in certain special cases, for example, to maintain portfolio liquidity. The Fund could, however, at any time sell the underlying portfolio security in the open market or wait until the portfolio security matures, at which time it should realize the full par value of the security. The securities purchased subject to a put may be sold to third persons at any time, even though the put is outstanding, but the put itself, unless it is an integral part of the security as originally issued, may not be marketable or otherwise assignable. Therefore, the put would have value only to the Fund. Sale of the securities to third parties or lapse of B-8 time with the put unexercised may terminate the right to put the securities. Prior to the expiration of any put option, the Fund could seek to negotiate terms for the extension of such an option. If such a renewal cannot be negotiated on terms satisfactory to the Fund, the Fund could, of course, sell the portfolio security. The maturity of the underlying security will generally be different from that of the put. There will be no limit to the percentage of portfolio securities that the Fund may purchase subject to a standby commitment or put, but the amount paid directly or indirectly for all standby commitments or puts which are not integral parts of the security as originally issued held in the Fund will not exceed 2 of 1% of the value of the total assets of such Fund calculated immediately after any such put is acquired. FOREIGN SECURITIES The Prime Quality Money Market Fund, Investment Grade Bond Fund, Short-Term Bond Fund, Balanced Fund and each of the Equity Funds, except the Sunbelt Equity Fund, may invest in U.S. dollar denominated obligations or securities of foreign issuers. The International Equity Index and International Equity Funds will invest primarily in certain obligations or securities of foreign issuers. Possible investments include equity securities of foreign entities, obligations of foreign branches of U.S. banks and of foreign banks, including, without limitation, European Certificates of Deposit, European Time Deposits, European Bankers' Acceptances, Canadian Time Deposits and Yankee Certificates of Deposit, and investments in Canadian Commercial Paper and foreign securities. Permissible investments may consist of obligations of foreign branches of U.S. banks and of foreign banks, including European Certificates of Deposit, European Time Deposits, Canadian Time Deposits and Yankee Certificates of Deposits, Canadian Commercial Paper, and Europaper. In addition, each of the above-mentioned Funds, except for the Short-Term Bond Fund, may invest in American Depositary Receipts. These instruments may subject the Funds to investment risks that differ in some respects from those related to investments in obligations of U.S. domestic issuers. Such risks include future adverse political and economic developments, the possible imposition of withholding taxes on interest or other income, possible seizure, nationalization, or expropriation of foreign deposits, the possible establishment of exchange controls or taxation at the source, greater fluctuations in value due to changes in exchange rates, or the adoption of other foreign governmental restrictions which might adversely affect the payment of principal and interest on such obligations. Such investments may also entail higher custodial fees and sales commissions than domestic investments. Foreign issuers of securities or obligations are often subject to accounting treatment and engage in business practices different from those respecting domestic issuers of similar securities or obligations. Foreign branches of U.S. banks and foreign banks may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks. By investing in foreign securities, the International Equity Index, International Equity, and Emerging Markets Equity Funds attempt to take advantage of differences between both economic trends and the performance of securities markets in the various countries, regions and geographic areas as prescribed by each Fund's investment objective and policies. During certain periods the investment return on securities in some or all countries may exceed the return on similar investments in the United States, while at other times the investment return may be less than that on similar U.S. securities. Shares of the International Equity Index, International Equity, and Emerging Markets Equity Funds, when included in appropriate amounts in a portfolio otherwise consisting of domestic securities, may provide a source of increased diversification. The International Equity Index, International Equity, and Emerging Markets Equity Funds seek increased diversification by combining securities from various countries and geographic areas that offer different investment opportunities and are affected by different economic trends. The international investments of the International Equity Index, International Equity, and Emerging Markets Equity Funds may reduce the effect that events in any one country or geographic area will have on its investment holdings. Of course, negative movement by a Fund's investments in one foreign market represented in its portfolio may offset potential gains from the Fund's investments in another country's markets. B-9 The Emerging Markets Equity Fund considers countries having developing markets to be all countries that are considered to be developing or emerging countries by the World Bank or the International Finance Corporation, as well as countries classified by the United Nations or otherwise regarded by the international financial community as developing. Currently, the countries excluded from this category are Ireland, Spain, New Zealand, Australia, the United Kingdom, Italy, the Netherlands, Belgium, Austria, France, Canada, Germany, Denmark, the United States, Sweden, Finland, Norway, Japan and Switzerland. ADRS Holders of unsponsored depositary receipts generally bear all the costs of the unsponsored facility. The depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through, to the holders of the receipts, voting rights with respect to the deposited securities. SUPRANATIONAL AGENCY OBLIGATIONS The Prime Quality Money Market Fund, U.S. Government Securities Fund, Investment Grade Bond Fund, Balanced Fund and Short-Term Bond Fund may purchase obligations of supranational agencies. Currently these Funds intend to invest only in obligations issued or guaranteed by the Asian Development Bank, Inter-American Development Bank, International Bank for Reconstruction and Development (World Bank), African Development Bank, European Coal and Steel Community, European Economic Community, European Investment Bank and the Nordic Investment Bank. WHEN-ISSUED SECURITIES AND MUNICIPAL FORWARDS The Tax-Exempt Money Market Fund, Balanced Fund, Bond Funds, Tax-Exempt Bond Funds, Value Income Stock Fund, U.S. Government Securities Fund, and the Limited-Term Federal Mortgage Securities Fund may purchase when-issued securities, in which case delivery and payment normally take place within 45 days (90 days with respect to the Limited-Term Federal Mortgage Security Fund) after the date of commitment to purchase. In addition, the Tax-Exempt Bond Funds may purchase municipal forwards for which delivery of the underlying municipal security normally occurs after 45 days but before one year after the commitment date. The Funds will only make commitments to purchase when-issued securities and municipal forwards with the intention of actually acquiring the securities, but may sell them before the settlement date. When-issued securities are subject to market fluctuation, and accrue no interest to the purchaser during this pre-settlement period. The payment obligation and the interest rate that will be received on the securities are each fixed at the time the purchaser enters into the commitment. Purchasing municipal forwards and when-issued securities entails leveraging and can involve a risk that the yields available in the market when the delivery takes place may actually be higher than those obtained in the transaction itself. In that case, there could be an unrealized loss at the time of delivery. Segregated accounts will be established with the appropriate Custodian, and a Fund will maintain high quality, liquid assets in an amount at least equal in value to its commitments to purchase when-issued securities and municipal forwards. If the value of these assets declines, the Fund will place additional liquid assets in the account on a daily basis so that the value of the assets in the account is equal to the amount of such commitments. B-10 RESTRICTED SECURITIES Restricted Securities are securities that may not be sold to the public without registration under the Securities Act of 1933 (the "1933 Act") absent an exemption from registration. Permitted investments for the Balanced Fund, Bond Funds, Tax-Exempt Bond Funds and Equity Funds include restricted securities, and each such Fund may invest up to 15% of its net assets in illiquid securities, subject to each Fund's investment limitations on the purchase of illiquid securities. Restricted Securities, including securities eligible for re-sale under 1933 Act Rule 144A, that are determined to be liquid are not subject to this limitation. This determination is to be made by a Fund's Advisor pursuant to guidelines adopted by the Board of Trustees. Under these guidelines, the particular Advisor will consider the frequency of trades and quotes for the security, the number of dealers in, and potential purchasers for, the securities, dealer undertakings to make a market in the security, and the nature of the security and of the marketplace trades. In purchasing such Restricted Securities, each Advisor intends to purchase securities that are exempt from registration under Rule 144A under the 1933 Act. SECURITIES LENDING Each Fund may lend securities pursuant to agreements which require that the loans be continuously secured by collateral at all times equal to 100% of the market value of the loaned securities which consists of: cash, securities of the U.S. Government or its agencies, or any combination of cash and such securities. Such loans will not be made if, as a result, the aggregate amount of all outstanding securities loans for a Fund exceed one-third of the value of the Fund's total assets taken at fair market value. A Fund will continue to receive interest on the securities lent while simultaneously earning interest on the investment of the cash collateral in U.S. Government securities. However, a Fund will normally pay lending fees to such broker-dealers and related expenses from the interest earned on invested collateral. There may be risks of delay in receiving additional collateral or risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans are made only to borrowers deemed by the appropriate Advisor to be of good standing and when, in the judgment of that Advisor, the consideration which can be earned currently from such securities loans justifies the attendant risk. Any loan may be terminated by either party upon reasonable notice to the other party. The Funds may use the Distributor or a broker-dealer affiliate of an Advisor as a broker in these transactions. FUTURES CONTRACTS AND OPTIONS ON FUTURES The Balanced Fund, Bond Funds, Tax-Exempt Bond Funds, International Equity Index Fund, International Equity Fund, Value Income Stock Fund, and Emerging Markets Equity Fund may invest in futures contracts and options on futures. Although futures contracts by their terms call for actual delivery or acceptance of the underlying securities, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. Closing out an open futures position is done by taking an opposite position ("buying" a contract which has previously been "sold" or "selling" a contract which has previously been "purchased") in an identical contract to terminate the position. Brokerage commissions are incurred when a futures contract is bought or sold. Futures traders are required to make a good faith margin deposit in cash or government securities with or for the account of a broker or custodian to initiate and maintain open secondary market will exist for any particular futures contract at any specific time. Thus, it may not be possible to close a futures position. In the event of adverse price movements, a Fund would continue to be required to make daily cash payments to maintain its required margin. In such situations, if a Fund has insufficient cash, it may have to sell portfolio securities to meet daily margin requirements at a time when it may be disadvantageous to do so. In addition, the Funds may be required to make delivery of the instruments underlying the futures contracts they hold. The inability to close options and futures positions also could have an adverse impact on the ability to effectively hedge the underlying securities. B-11 The Funds will minimize the risk that they will be unable to close out a futures contract by entering into futures contracts that are traded on national futures exchanges and for which there appears to be a liquid secondary market. The risk of loss in trading futures contracts can be substantial, due both to the low margin deposits required and the extremely high degree of leverage involved in futures pricing. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss (or gain) to a Fund. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the contract. However, because the Funds will be engaged in futures transactions only for hedging purposes, the Advisors do not believe that the Funds will generally be subject to the risks of loss frequently associated with futures transactions. The Funds presumably would have sustained comparable losses if, instead of the futures contract, they had invested in the underlying financial instrument and sold it after the decline. The risk of loss from the purchase of options is less as compared with the purchase or sale of futures contracts because the maximum amount at risk is the premium paid for the option. Utilization of futures transactions by the Funds does involve the risk of imperfect or no correlation where the securities underlying futures contracts have different maturities than the fund securities being hedged. It is also possible that the Funds could both lose money on futures contracts and experience a decline in value of its fund securities. There is also the risk of loss by the Funds of margin deposits in the event of the bankruptcy of a broker with whom the Funds have an open position in a futures contract or related option. Most futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of future positions and subjecting some futures traders to substantial losses. OPTIONS The Balanced Fund, Bond Funds, Tax-Exempt Bond Funds, International Equity Index Fund, International Equity Fund, Value Income Stock Fund, Small Cap Equity Fund, and Emerging Markets Equity Fund may write call options on a covered basis only, and will not engage in option writing strategies for speculative purposes. A call option gives the purchaser of such option the right to buy, and the writer, in this case the Fund, the obligation to sell the underlying security at the exercise price during the option period. The advantage to the Funds of writing covered calls is that the Funds receive a premium which is additional income. However, if the security rises in value, the Funds may not fully participate in the market appreciation. During the option period, a covered call option writer may be assigned an exercise notice by the broker-dealer through whom such call option was sold requiring the writer to deliver the underlying security against payment of the exercise price. This obligation is terminated upon the expiration of the option period or at such earlier time in which the writer effects a closing purchase transaction. A closing purchase transaction is one in which the Fund, when obligated as a writer of an option, terminates its obligation by purchasing an option of the same series as the option previously written. B-12 A closing purchase transaction cannot be effected with respect to an option once the option writer has received an exercise notice for such option. Closing purchase transactions will ordinarily be effected to realize a profit on an outstanding call option, to prevent an underlying security from being called, to permit the sale of the underlying security or to enable a Fund to write another call option on the underlying security with either a different exercise price or expiration date or both. A Fund may realize a net gain or loss from a closing purchase transaction depending upon whether the net amount of the original premium received on the call option is more or less than the cost of effecting the closing purchase transaction. Any loss incurred in a closing purchase transaction may be partially or entirely offset by the premium received from a sale of a different call option on the same underlying security. Such a loss may also be wholly or partially offset by unrealized appreciation in the market value of the underlying security. If a call option expires unexercised, a Fund will realize a short-term capital gain in the amount of the premium on the option, less the commission paid. Such a gain, however, may be offset by depreciation in the market value of the underlying security during the option period. If a call option is exercised, a Fund will realize a gain or loss from the sale of the underlying security equal to the difference between the cost of the underlying security, and the proceeds of the sale of the security plus the amount of the premium on the option, less the commission paid. The market value of a call option generally reflects the market price of an underlying security. Other principal factors affecting market value include supply and demand, interest rates, the price volatility of the underlying security and the time remaining until the expiration date. The Funds will write call options only on a covered basis, which means that a Fund will own the underlying security subject to a call option at all times during the option period. Unless a closing purchase transaction is effected, a Fund would be required to continue to hold a security which it might otherwise wish to sell, or deliver a security it would want to hold. Options written by the Funds will normally have expiration dates between one and nine months from the date written. The exercise price of a call option may be below, equal to or above the current market value of the underlying security at the time the option is written. SWAPS/FLOORS/COLLARS In a typical interest rate swap, one party agrees to make regular payments equal to a floating interest rate times a "notional principal amount." This is done in return for payments equal to a fixed rate times the same amount, for a specific period of time. If a swap agreement provides for payment in different currencies, the parties might agree to exchange the notional principal amount as well. Swaps may also depend on other prices or rates, such as the value of an index or mortgage prepayment rates. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances. This is usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specific interest rate exceeds an agreed-upon level. Meanwhile, the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements are subject to risks related to the counterparty's ability to perform, and may decline in value if the counterparty's creditworthiness deteriorates. The Fund may also suffer losses if it is unable to terminate outstanding swap agreements or reduce its exposure through offsetting transactions. Any obligation the Fund may have under these types of arrangements will be covered by setting aside liquid high-grade securities in a segregated account. The Fund will enter into swaps only with counterparties believed to be creditworthy. B-13 INVESTMENT COMPANY SHARES Investment companies typically incur fees that are separate from those fees incurred directly by the Fund. A Fund's purchase of such investment company securities results in the layering of expenses, such that Shareholders would indirectly bear a proportionate share of the operating expenses of such investment companies, including advisory fees. VARIABLE AND FLOATING RATE SECURITIES The interest rates on these securities may be reset daily, weekly, quarterly, or some other reset period, and may have a set floor or ceiling on interest rate changes. There is a risk that the current interest rate on such obligations may not accurately reflect existing market interest rates. A demand instrument with a demand notice exceeding seven days may be considered illiquid if there is no secondary market for such security. OTHER INVESTMENTS The Trust is not prohibited from investing in obligations of banks which are clients of SEI Investments Company ("SEI Investments"), the parent company of the Administrator and the Distributor. However, the purchase of shares of the Funds by such banks or by their customers will not be a consideration in determining which bank obligations the Funds will purchase. The Funds will not purchase obligations issued by the Advisors. Investors will receive written notification at least thirty days prior to any change in a Fund's investment objective. INVESTMENT LIMITATIONS The following are fundamental policies of each Fund and cannot be changed with respect to a Fund without the consent of the holders of a majority of that Fund's outstanding shares. A Fund may not: 1. Acquire more than 10% of the voting securities of any one issuer. 2. Invest in companies for the purpose of exercising control. 3. Borrow money except for temporary or emergency purposes and then only in an amount not exceeding one-third of the value of total assets. Any borrowing will be done from a bank and, to the extent that such borrowing exceeds 5% of the value of the Fund's assets, asset coverage of at least 300% is required. In the event that such asset coverage shall at any time fall below 300%, the Fund shall, within three days thereafter or such longer period as the Securities and Exchange Commission may prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the asset coverage of such borrowings shall be at least 300%. This borrowing provision is included solely to facilitate the orderly sale of portfolio securities to accommodate heavy redemption requests if they should occur and is not for investment purposes. All borrowings in excess of 5% of the value of a Fund's total assets will be repaid before making additional investments and any interest paid on such borrowings will reduce income. 4. Make loans, except that (a) a Fund may purchase or hold debt instruments in accordance with its investment objective and policies; (b) a Fund may enter into repurchase agreements, and (c) the Bond Funds, Balanced Fund, U.S. Government Securities Fund, Limited-Term Federal Mortgage Securities Fund, International Equity Index Fund, International Equity Fund, Value Income Stock Fund, Small Cap Equity Fund and B-14 Emerging Markets Equity Fund may engage in securities lending as described in the Prospectuses and in this Statement of Additional Information. 5. Pledge, mortgage or hypothecate assets except to secure temporary borrowings permitted by (3) above in aggregate amounts not to exceed 10% of the Fund's total assets, taken at current value at the time of the incurrence of such loan, except as permitted with respect to securities lending. 6. Purchase or sell real estate, real estate limited partnership interests, commodities or commodities contracts (except for financial futures contracts) and interests in a pool of securities that are secured by interests in real estate (except that each Bond Fund may purchase mortgage-backed and other mortgage-related securities, including collateralized mortgage obligations and REMICs). However, subject to their permitted investment spectrum, any Fund may invest in companies which invest in real estate, commodities or commodities contracts. 7. Make short sales of securities, maintain a short position or purchase securities on margin, except that the Trust may obtain short-term credits as necessary for the clearance of security transactions. 8. Act as an underwriter of securities of other issuers except as it may be deemed an underwriter in selling a security. 9. Purchase securities of other investment companies except for money market funds and CMOs and REMICs deemed to be investment companies and then only as permitted by the Investment Company Act of 1940 (the "1940 Act") and the rules and regulations thereunder, except that the Mid-Cap Equity, Sunbelt Equity, Balanced, Georgia Tax-Exempt Bond, Florida Tax-Exempt Bond, Tennessee Tax-Exempt Bond, U.S. Government Securities, Limited-Term Federal Mortgage Securities, International Equity Index, International Equity, Small Cap Equity and Emerging Market Equity Funds' purchases of investment company shares are not limited to money market funds. Under these rules and regulations, a Fund is prohibited from acquiring the securities of other investment companies if, as a result of such acquisition, the Fund owns more than 3% of the total voting stock of the company; securities issued by any one investment company represent more than 5% of the total assets of a Fund; or securities (other than treasury stock) issued by all investment companies represent more than 10% of the total assets of the Fund. 10. Issue senior securities (as defined in the 1940 Act) except in connection with permitted borrowings as described above or as permitted by rule, regulation or order of the SEC. NON-FUNDAMENTAL POLICIES No Fund may purchase or hold illiquid securities (I.E., securities that cannot be disposed of for their approximate carrying value in seven days or less (which term includes repurchase agreements and time deposits maturing in more than seven days) if, in the aggregate, more than 15% of its net assets (10% for the Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds) would be invested in illiquid securities. With the exception of the limitations on liquidity standards, the foregoing percentages will apply at the time of the purchase of a security and shall not be considered violated unless an excess occurs or exists immediately after and as a result of a purchase of such security. INVESTMENT ADVISORS B-15 The Trust and STI Capital Management, N.A., Trusco Capital Management, Inc., SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga, N.A. (the "Advisors") have entered into advisory agreements with the Trust (the "Advisory Agreements"). The Advisory Agreements provide that each Advisor shall not be protected against any liability to the Trust or its Shareholders by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder. Each Advisory Agreement provides that if, for any fiscal year, the ratio of expenses of any Fund (including amounts payable to an Advisor but excluding interest, taxes, brokerage, litigation, and other extraordinary expenses) exceeds limitations established by certain states, the Advisor and/or the Administrator will bear the amount of such excess. The Advisor will not be required to bear expenses of the Trust to an extent which would result in a Fund's inability to qualify as a regulated investment company under provisions of the Internal Revenue Code. The continuance of each Advisory Agreement, after the first two years, must be specifically approved at least annually (i) by the vote of the Trustees, and (ii) by the vote of a majority of the Trustees who are not parties to each Agreement or "interested persons" of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. Each Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Trustees of the Trust or, with respect to the Funds, by a majority of the outstanding shares of the Funds, on not less than 30 days' nor more than 60 days' written notice to the Advisor, or by the Advisor on 90 days' written notice to the Trust. For the fiscal years ended May 31, 1997, 1996, and 1995, the Funds paid the following advisory fees:
FEES PAID FEES WAIVED OR REIMBURSED ----------------------------------------- -------------------------------------- FUND 1997 1996 1995 1997 1996 1995 ---- ----------- ----------- ----------- ---------- ---------- ---------- Prime Quality Money Market $ 7,586,108 $ 5,346,850 $ 4,052,982 $2,181,008 $1,602,546 $1,215,895 Fund U.S. Government Securities $ 1,935,898 $ 2,068,133 $ 1,729,860 $ 518,656 $ 577,384 $ 507,624 Money Market Fund Tax-Exempt Money Market Fund $ 1,687,976 $ 1,422,777 $ 910,742 $ 673,486 $ 685,205 $ 583,588 Investment Grade Bond Fund $ 4,147,888 $ 3,868,222 $ 3,274,146 $ 644,859 $ 709,139 $ 636,033 Investment Grade Tax-Exempt $ 1,081,635 $ 917,948 $ 627,607 $ 190,250 $ 202,552 $ 138,553 Bond Fund Short-Term Bond Fund $ 485,613 $ 361,936 $ 212,070 $ 138,732 $ 149,827 $ 118,030 Florida Tax-Exempt Bond Fund1 $ 220,701 $ 107,618 $ 10,562 $ 72,605 $ 72,476 $ 45,986 Georgia Tax-Exempt Bond Fund2 $ 181,715 $ 83,243 $ 35,579 $ 63,837 $ 63,991 $ 50,699 Tennessee Tax-Exempt Bond Fund3 $ 0 $ 0 $ 0 $ 35,475 $ 46,809 $ 14,014 U.S. Government Securities $ 91,748 $ 16,097 $ 0 $ 58,637 $ 53,312 $ 7,817 Fund4 Short-Term U.S. Treasury $ 83,694 $ 36,729 $ 26,399 $ 72,064 $ 72,116 $ 64,786 Securities Fund
B-16
FEES PAID FEES WAIVED OR REIMBURSED ----------------------------------------- -------------------------------------- FUND 1997 1996 1995 1997 1996 1995 ---- ----------- ----------- ----------- ---------- ---------- ---------- Limited-Term Federal Mortgage $ 540,017 $ 224,595 $ 78,778 $ 150,604 $ 119,538 $ 74,494 Securities Fund Capital Growth Fund $12,775,800 $12,099,047 $11,023,563 $1,227,247 $1,408,275 $1,393,475 Sunbelt Equity Fund $ 4,399,351 $ 3,424,453 $ 2,353,943 $ 442,535 $ 465,317 $ 407,677 Value Income Stock Fund $12,025,425 $ 9,447,738 $ 6,976,518 $ 392 $ 318,958 $ 28,394 Mid-Cap Equity Fund $ 3,008,690 $ 2,057,932 $ 940,045 $ 318,871 $ 318,958 $ 195,873 Balanced Fund $ 1,025,089 $ 823,692 $ 823,692 $ 151,557 $ 166,361 $ 149,133 Small Cap Equity Fund $ 273,710 * * $ 48,251 * * Emerging Markets Equity Fund $ 84,210 * * $ 52,769 * * International Equity Fund $ 4,336,172 $ 746,780 * $ 157,567 $ 151,947 * International Equity Index Fund $ 578,197 $ 740,676 $ 340,065 $ 80,147 $ 144,349 $ 135,043
* Not in operation during the period. (1) STI Capital Management, advisor to the Florida Tax Exempt Bond Fund reimbursed expenses of $7,846 for the fiscal year ended May 31, 1994 (2) SunTrust Bank, Atlanta, advisor to the Georgia Tax-Exempt Bond Fund reimbursed expenses of $4,536 for the fiscal year ended May 31, 1994 (3) SunTrust Bank, Chattanooga, advisor to the Tennessee Tax-Exempt Bond Fund, reimbursed expenses of $10,011 for the fiscal year ended May 31, 1994, $19,803 for the fiscal year ended May 31, 1995 $17,277 for the fiscal year ended May 31, 1996 and $9,933 for the fiscal year ended May 31, 1997 (4) Trusco Capital Management, Inc., advisor to the U.S. Government Securities Fund, reimbursed expenses of $27,216. BANKING LAWS Current interpretations of federal banking laws and regulations: - - prohibit SunTrust and the Advisors from sponsoring, organizing, controlling, or distributing the Funds= shares; - - but, do not prohibit SunTrust or the Advisors generally from acting as an investment advisor, transfer agent, or custodian to the Funds or from purchasing Fund shares as agent for and upon the order of a customer. The Advisors believe that they may perform advisory and related services for STI Classic Funds without violating applicable banking laws or regulations. However, the legal requirements and interpretations about the permissible activities of banks and their affiliates may change in the future. These changes could prevent the Advisors from continuing to perform services for STI Classic Funds. If this happens, the Board of Trustees would consider selecting other qualified firms. Shareholders would approve any new investment advisory agreements would be subject to Shareholder approval. If current restrictions on bank activities with mutual funds were relaxed, the Advisors, or their affiliates, would consider performing additional services for STI Classic Funds. We cannot predict whether these changes will be enacted. We also cannot predict the terms that the Advisors, or their affiliates, might offer to provide additional services. B-17 THE ADMINISTRATOR The Trust and SEI Fund Resources (the "Administrator") are parties to an Administrative Agreement. The Administration Agreement provides that the Administrator shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which the Administration Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Administrator in the performance of its duties or from reckless disregard by it of its duties and obligations thereunder. The Administration Agreement shall remain in effect for a period of five years after the date of the Agreement and shall continue in effect for successive periods of two years subject to review at least annually by the Trustees of the Trust unless terminated by either party on not less than ninety days= written notice to the other party. The Administrator, a Delaware business trust, has its principal business offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("ASEI Investments"), is the owner of all beneficial interest in the Administrator. SEI Investments and its subsidiaries and affiliates, including the Administrator, are leading providers of funds evaluation services, trust accounting systems, and brokerage and information services to financial institutions, institutional investors, and money managers. The Administrator and its affiliates also serve as administrator to the following other mutual funds: The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CoreFunds, Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First American Funds, Inc., First American Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Marquis Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG Funds, Inc., The PBHG Insurance Series Fund, Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt Funds-Registered Trademark-, Santa Barbara Group of Mutual Funds, Inc., SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Variable Trust, and TIP Funds. For the fiscal years ended May 31, 1997, 1996, and 1995, the Funds paid the following administration fees:
FEES PAID FEES WAIVED ----------------------------------------- -------------------------------------- FUND 1997 1996 1995 1997 1996 1995 ---- ----------- ----------- ----------- ---------- ---------- ---------- Prime Quality Money Market Fund $ 661,962 $315,880 $155,054 $347,518 $449,492 $465,158 U.S. Government Securities $ 212,454 $219,380 $129,165 $ 41,257 $ 72,463 $134,192 Money Market Fund Tax-Exempt Money Market Fund $ 288,647 $274,701 $128,912 $ 0 $ 0 $ 79,032 Investment Grade Bond Fund $ 435,278 $443,569 $404,413 $ 0 $ 0 $ 0 Investment Grade Tax-Exempt $ 115,500 $108,204 $ 77,499 $ 0 $ 0 $ 1,745 Bond Fund Florida Tax-Exempt Bond Fund $ 30,279 $ 19,989 $ 6,645 $ 0 $ 0 $ 0 Georgia Tax-Exempt Bond Fund $ 25,353 $ 16,304 $ 10,140 $ 0 $ 0 $ 0 Tennessee Tax-Exempt Bond Fund $ 3,669 $ 3,148 $ 1,648 $ 0 $ 0 $ 0 Short-Term Bond Fund $ 64,664 $ 56,317 $ 38,813 $ 0 $ 0 $ 0
B-18
FEES PAID FEES WAIVED ----------------------------------------- -------------------------------------- FUND 1997 1996 1995 1997 1996 1995 ---- ----------- ----------- ----------- ---------- ---------- ---------- U.S. Government Securities Fund $ 13,641 $ 7,311 $ 807 $ 0 $ 0 $ 0 Short-Term U.S. Treasury $ 16,075 $ 12,012 $ 10,761 $ 0 $ 0 $ 0 Securities Fund Limited-Term Federal Mortgage $ 71,264 $ 37,854 $ 17,962 $ 0 $ 0 $ 0 Securities Fund Capital Growth Fund $ 817,905 $842,411 $826,735 $ 0 $ 0 $ 0 Sunbelt Equity Fund $ 283,101 $842,411 $183,657 $ 0 $ 0 $ 0 Value Income Stock Fund $1,009,167 $845,706 $669,692 $ 0 $ 0 $ 0 Mid-Cap Equity Fund $ 194,430 $147,613 $ 75,507 $ 0 $ 0 $ 0 Balanced Fund $ 83,063 $ 74,634 $ 64,645 $ 0 $ 0 $ 0 Small Cap Equity Fund $ 18,406 * * $ 0 * * Emerging Markets Equity Fund * * * * International Equity Fund $ 50,404 * $ 0 * International Equity Index Fund $ 70,690 $ 40,223 $ 0 $ 0
* Not in operation during the period. THE DISTRIBUTOR SEI Investments Distribution Co. (formerly SEI Financial Services Company) (the "Distributor"), a wholly-owned subsidiary of SEI, and the Trust have entered into a distribution agreement (the "Distribution Agreement") dated May 29, 1992. The Distributor will receive no compensation for distribution of Trust Shares. In addition, the Investor Shares of the Funds have a distribution plan ("Investor Plan"), and the Flex Shares of the Funds have a distribution and service plan ("Flex Plan"). The Distribution Agreement is renewable annually and may be terminated by the Distributor, the Qualified Trustees, or by a majority vote of the outstanding securities of the Trust upon not more than 60 days' written notice by either party. For the fiscal years ended May 31, 1997, 1996, and 1995, the aggregate sales charges payable to the Distributor with respect to the Investor Shares of the Funds were as follows: B-19
AGGREGATE SALES CHARGE PAYABLE TO AMOUNT RETAINED BY FUND DISTRIBUTOR DISTRIBUTOR --------------------------------- --------------------------------- 1997 1996 1995 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------- Investment Grade Bond Fund $ 50,016 $ 61,948 $ 143 $ 0 Georgia Tax-Exempt Bond Fund $ 1,208 $ 1,495 $ 6 $ 762 Florida Tax-Exempt Bond Fund $ 1,386 $ 8,271 $ 14 $ 0 Tennessee Tax-Exempt Bond Fund $ 515 $ 0 $ 0 $ 0 Short-Term Bond Fund $ 1,204 $ 0 $ 0 $ 0 Investment Grade Tax-Exempt Bond Fund $ 12,005 $ 13,613 $ 30 $ 2,133 U.S. Government Securities Fund $ 7,279 $ 4,006 $ 0 $ 0 Short-Term U.S. Treasury Securities Fund $ 2,641 $ 4,241 $ 9 $ 0 Limited-Term Federal Mortgage Securities Fund $ 4,067 $ 1,541 $ 50 $ 100 Capital Growth Fund $258,267 $373,314 $ 243 $ 2,078 Sunbelt Equity Fund $ 46,854 $135,566 $ 61 $ 1,981 Value Income Stock Fund $306,061 $406,633 $ 3,104 $ 3,774 International Equity Fund $ 29,032 * $ 85 * International Equity Index Fund $ 19,058 $ 59,784 $ 50 $ 1,620 Mid-Cap Equity Fund $ 91,344 $ 63,337 $ 197 $ 858 Balanced Fund $ 16,540 $ 37,732 $ 22 $ 0
*Not in operation during the period. For the fiscal years ended May 31, 1997, 1996, and 1995, the aggregate sales charges payable to the Distributor with respect to the Flex Shares of the Funds were as follows: B-20
AGGREGATE SALES CHARGE AMOUNT RETAINED FUND PAYABLE TO DISTRIBUTOR BY DISTRIBUTOR ----------------------------------- ----------------------------------- 1997 1996 1995 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------- Investment Grade Bond Fund $ 4,329 $ 0 Georgia Tax-Exempt Bond Fund $ 2,896 $ 0 Florida Tax-Exempt Bond Fund $ 153 $ 0 Tennessee Tax-Exempt Bond Fund $ 1,008 $ 0 Short-Term Bond Fund $ 344 $ 0 Investment Grade Tax-Exempt Bond Fund $ 2,782 $ 0 U.S. Government Securities Fund $ 1,067 $ 0 Short-Term U.S. Treasury Securities Fund $ 3,687 $ 0 Limited-Term Federal Mortgage Securities Fund $ 1,442 $ 0 Capital Growth Fund $ 6,283 $ 0 Sunbelt Equity Fund $ 324 $ 0 Value Income Stock Fund $ 10,574 $ 0 International Equity Fund $ 60 $ 0 International Equity Index Fund $ 392 $ 0 Mid-Cap Equity Fund $ 5,222 $ 0 Balanced Fund $ 713 $ 0
*Not in operation during the period. INVESTOR SHARES AND FLEX SHARES DISTRIBUTION PLANS The Distribution Agreement and the Investor Plan adopted by the Trust provide that Investor Shares of the Fund will pay the Distributor fees of up to the following respective levels: .20% of the average daily net assets of the Prime Quality Money Market Fund; .17% of the average daily net assets of the U.S. Government Securities Money Market Fund; .15% of the average daily net assets of the Tax-Exempt Money Market Fund; .18% of the average daily net assets of the Short-Term U.S. Treasury Securities Fund; .23% of the average daily net assets of the Short-Term Bond Fund; .43% of the average daily net assets of the Investment Grade Bond Fund; .43% of the average daily net assets of the Investment Grade Tax-Exempt Bond Fund; .68% of the average daily net assets of the Capital Growth Fund; .33% of the average daily net assets of the Value Income Stock Fund; .43% of the average daily net assets of the Mid-Cap Equity Fund; .43% of the average daily net assets of the Sunbelt Equity Fund; .28% of the average daily net assets of the Balanced Fund; .18% of the average daily net assets of the Florida Tax-Exempt Bond Fund; .18% of the average daily net assets of the Georgia Tax-Exempt Bond Fund; .18% of the average daily net assets of the Tennessee B-21 Tax-Exempt Bond Fund; .38% of the average daily net assets of the U.S. Government Securities Fund; .38% of the average daily net assets of the International Equity Index Fund; .33% of the average daily net assets of the International Equity Fund; and .23% of the average daily net assets of the Limited-Term Federal Mortgage Securities Fund. The Distribution Agreement and the Flex Plan adopted by the Trust provide that each Flex Shares Fund will pay the Distributor a fee of up to .75% of the average daily net assets of that Fund. The Distributor can use these fees to compensate broker-dealers and service providers, including SunTrust and its affiliates, which provide administrative and/or distribution services to Investor Shares or Flex Shares Shareholders or their customers who beneficially own Investor Shares or Flex Shares. In addition, Flex Shares are subject to a service fee of up to .25% of the average daily net assets of the Flex Shares of each Fund. This service fee will be used for services provided and expenses incurred in maintaining shareholder accounts, responding to shareholder inquiries and providing information on their investments. Services for which broker-dealers and service providers may be compensated include establishing and maintaining customer accounts and records; aggregating and processing purchase and redemption requests from customers; placing net purchase and redemption orders with the Distributor; automatically investing customer account cash balances; providing periodic statements to customers; arranging for wires; answering customer inquiries concerning their investments; assisting customers in changing dividend options, account designations, and addresses; performing sub-accounting functions; processing dividend payments from the Trust on behalf of customers; and forwarding Shareholder communications from the Trust (such as proxies, Shareholder reports, and dividend distribution and tax notices) to these customers with respect to investments in the Trust. Certain state securities laws may require those financial institutions providing such distribution services to register as dealers pursuant to state law. Although banking laws and regulations prohibit banks from distributing shares of open-end investment companies such as the Trust, according to an opinion issued to the staff of the SEC by the Office of the Comptroller of the Currency, financial institutions are not prohibited from acting in other capacities for investment companies, such as providing shareholder services. Should future legislative, judicial or administrative action prohibit or restrict the activities of financial institutions in connection with providing shareholder services, the Trust may be required to alter materially or discontinue its arrangements with such financial institutions. The Trust has adopted the Investor Plan and the Flex Plan in each case in accordance with the provisions of Rule 12b-1 under the 1940 Act, which Rule regulates circumstances under which an investment company may directly or indirectly bear expenses relating to the distribution of its shares. Continuance of the Investor Plan and the Flex Plan must be approved annually by a majority of the Trustees of the Trust and by a majority of the Qualified Trustees. The Investor Plan and the Flex Plan require that quarterly written reports of amounts spent under the Investor Plan and the Flex Plan, respectively, and the purposes of such expenditures be furnished to and reviewed by the Trustees. The Investor Plan and the Flex Plan may not be amended to increase materially the amount which may be spent thereunder without approval by a majority of the outstanding shares of the affected class of shares of the Trust. All material amendments of the Plans will require approval by a majority of the Trustees of the Trust and of the Qualified Trustees. There is no sales charge on purchases of Flex Shares, but Flex Shares are subject to a contingent deferred sales charge if they are redeemed within one year of purchase. Pursuant to the Distribution Agreement and the Flex Plan, Flex Shares are subject to an ongoing distribution and service fee calculated on each of the Bond Funds', State Tax-Exempt Bond Funds', Equity Funds' and Balanced Fund's aggregate average daily net assets attributable to its Flex Shares. For the fiscal years ended May 31, 1997, 1996, and 1995, the Funds paid the following amounts pursuant to the Investor Plan: B-22 DISTRIBUTION FEES AMOUNT PAID --------------------------------- FUND 1997 1996 1995 --- ---------- -------- -------- Prime Quality Money Market Fund $ 342,798 $273,316 $179,128 U.S. Government Securities Money Market Fund $ 66,016 $ 44,107 $ 16,661 Tax-Exempt Money Market Fund $ 89,912 $ 80,845 $ 44,182 Investment Grade Bond Fund $ 94,495 $ 78,963 $ 54,455 Investment Grade Tax-Exempt Bond Fund $ 100,819 $113,467 $107,645 Short-Term Bond Fund $ 0 $ 5,067 $ 2,141 Florida Tax-Exempt Bond Fund $ 0 $ 6,021 $ 1,471 Georgia Tax-Exempt Bond Fund $ 0 $ 5,001 $ 1,548 Tennessee Tax-Exempt Bond Fund $ 2,177 $ 1,266 $ 1,347 U.S. Government Securities Fund $ 1,150 $ 4,218 $ 386 Short-Term U.S. Treasury Securities Fund $ 0 $ 8,499 $ 5,291 Limited-Term Federal Mortgage Securities Fund $ 0 $ 2,360 $ 241 Capital Growth Fund $1,109,436 $912,685 $806,373 Sunbelt Equity Fund $ 80,282 $ 99,366 $ 49,826 Value Income Stock Fund $ 437,882 $304,282 $217,152 Mid-Cap Equity Fund $ 56,187 $ 51,485 $ 8,123 Balanced Fund $ 2,390 $ 10,808 $ 3,233 Small Cap Equity Fund $ 0 * * Emerging Markets Equity Fund * * * International Equity Fund $ 10,778 $ 0 International Equity Index Fund $ 8,005 $ 369 $ 1,649 *Not in operation during the period. For the fiscal years ended May 31, 1997 and 1996, the Funds paid the following amounts pursuant to the Flex Plan: B-23 DISTRIBUTION FEES AMOUNT PAID --------------------- FUND 1997 1996 ---- -------- ------- Investment Grade Bond Fund $ 29,558 $ 9,277 Investment Grade Tax-Exempt Bond Fund $ 36,489 $21,786 Short-Term Bond Fund $ 0 $ 0 Florida Tax-Exempt Bond Fund $ 5,962 $ 2,675 Georgia Tax-Exempt Bond Fund $ 20,094 $ 7,409 Tennessee Tax-Exempt Bond Fund $ 14,991 $ 7,238 U.S. Government Securities Fund $ 15,260 $ 4,460 Short-Term U.S. Treasury Securities Fund $ 510 $ 321 Limited-Term Federal Mortgage Securities Fund $ 0 $ 169 Capital Growth Fund $201,520 $37,344 Sunbelt Equity Fund $ 27,568 $ 1,560 Value Income Stock Fund $433,655 $99,703 Mid-Cap Equity Fund $ 53,907 $10,115 Balanced Fund $ 28,723 $ 6,985 Small Cap Equity Fund N/A * Emerging Markets Equity Fund N/A N/A International Equity Fund $ 18,519 $ 0 International Equity Index Fund $ 0 $ 580 *Not in operation during the period. TRUSTEES AND OFFICERS OF THE TRUST The Trustees and Executive Officers of the Trust, their respective dates of birth, and their principal occupations for the last five years are set forth below. Each may have held other positions with the named companies during that period. The business address of each Trustee and each Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain officers of the Trust also serve as officers of some or all of the following: The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK Funds, Bishop Street Funds, Boston 1784 Funds7, CoreFunds, Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First American Funds, Inc., First American Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Marquis Funds7, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, Profit Funds Investment Trust, Rembrandt Funds7, Santa Barbara Group of Mutual Funds, Inc., SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Variable Trust and TIP Funds, each of which is an open-end management investment company managed by SEI Fund Resources or its affiliates and, except for Profit Funds Investment Trust, Rembrandt Fund-REGISTRATION TRADEMARK-, and Santa Barbara Group of Mutual Funds, Inc., are distributed by SEI Investments Distribution Co. DANIEL S. GOODRUM (7/11/26) - Trustee - Chairman & CEO, SunBank/South Florida, N.A., 1985-1991; Chairman Audit Committee and Director, Holy Cross Hospital; Executive Committee Member and Director, Honda Classic Foundation; Director, Broward Community College Foundation. WILTON LOONEY (4/18/19) - Trustee - President of Genuine Parts Company, 1961-1964; Chairman of the Board, 1964-1990; Honorary Chairman of the Board, 1990 to present. Director, Rollins, Inc.; Director, RPC Energy Services, Inc. CHAMPNEY A. MCNAIR (10/30/24) - Trustee - Director and Chairman of Investment Committee and member of Executive Committee, Cotton States Life and Health Insurance Company; Director and Chairman of Investment Committee and member of Executive Committee, Cotton States Mutual Insurance Company; Chairman, Trust Company of Georgia Advisory Council. F. WENDELL GOOCH (12/3/32) - Trustee - Retired. President, Orange County Publishing Co., Inc., 1981-1997, publisher of the Paoli News and the Paoli Republican and Editor of the Paoli Republican, 1981-1997, President, H & W Distribution, Inc., 1984-1997. Current Trustee on the Board of Trustees for the SEI Family of Funds and The Capitol Mutual Funds. Executive Vice President, Trust Department, Harris Trust and Savings Bank and Chairman of the Board of Directors of The Harris Trust Company of Arizona before January 1981. T. GORDY GERMANY (11/28/25) -Trustee - Retired President, Chairman, and CEO of Crawford & Company; held these positions, 1973-1987. Member of the Board of Directors, 1970-1990, joined company in 1948; spent entire career at Crawford, currently serves on Boards of Norrell Corporation and Mercy Health Services, the latter being the holding company of St. Joseph's Hospitals. DR. BERNARD F. SLIGER (9/30/24) - Trustee - Currently on sabbatical leave from Florida State University (1991-92); now serves as visiting professor at the University of New Orleans. President of Florida State University, 1976-91; previous four years EVP and Chief Academic Officer. During educational career, taught at Florida State, Michigan State, Louisiana State and Southern University. Spent 19 years as faculty member and administrator at Louisiana State University and served as Head of Economics Department, member and Chairman of the Graduate Council, Dean of Academic Affairs and Vice Chancellor. Member of Board of Directors of Federal Reserve Bank of Atlanta, 1983-1988. JESSE HALL (9/26/29) - Trustee* - Executive Vice President, SunTrust Banks, Inc., 1985-1994; Director of Crawford & Company since 1979; Member, Atlanta Estate Planning Council, 1988-1993. DAVID G. LEE (4/16/52) - President, Chief Executive Officer - Senior Vice President of the Administrator and Distributor since 1993. Vice President of the Administrator and Distributor (1991-1993). President, GW Sierra Trust Funds before 1991. CAROL ROONEY (5/8/64) - Controller, Chief Financial Officer - A Director of SEI Fund Resources since 1992. RICHARD W. GRANT (10/25/45) - Secretary - 2000 One Logan Square, Philadelphia, Pennsylvania 19103. Partner, Morgan, Lewis & Bockius LLP (law firm). Counsel to the Trust, Administrator and Distributor. B-25 SANDRA K. ORLOW (10/18/53) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of the Administrator and Distributor since 1983. KEVIN P. ROBINS (4/15/61) - Vice President, Assistant Secretary - Senior Vice President & General Counsel of SEI Investments, the Administrator and the Distributor since 1994. Vice President of SEI, the Administrator and the Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm) prior to 1992. KATHRYN L. STANTON (11/19/58) - Vice President, Assistant Secretary - Vice President, Assistant Secretary of SEI Investments, the Administrator and Distributor since 1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-1994. TODD CIPPERMAN (2/14/66) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of the Administrator and the Distributor since 1995. Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston & Strawn (law firm), 1991-1994. BARBARA NUGENT (6/18/56) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of SEI Investments, the Distributor and Administrator, Associate, Drinker Biddle & Reath (law firm), 1994-1996. Assistant Vice President/Administration, Delaware Service Company, Inc., 1981-1994. MARC H. CAHN (6/19/57) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of SEI Investments, the Distributor and Administrator, Associate General Counsel, Barclays Bank PLC., 1995-1996. Counsel for First Fidelity Bancorporation prior to 1995. JOHN H. GRADY, JR. (6/1/61) - Assistant Secretary - 1800 M Street, N.W. Washington, DC 20036. Partner, Morgan, Lewis & Bockius LLP (law firm) since 1995. Associate, Morgan, Lewis & Bockius LLP, 1993-1995. Associate, Ropes & Gray (law firm), 1988-1993. - ----------------- * Jesse S. Hall may be deemed to be an "interested person" of the Trust as defined in the Investment Company Act of 1940. The Trustees and officers of the Trust own, in the aggregate, less than 1% of the outstanding shares of the Trust. For the fiscal year end May 31, 1997, the Trust paid the following amounts to Trustees and Officers of the Trust:
AGGREGATE COMPENSATION PENSION OR TOTAL COMPENSATION FROM RETIREMENT ESTIMATED FROM REGISTRANT AND REGISTRANT FOR BENEFITS ACCRUED ANNUAL FUND COMPLEX PAID TO FISCAL YEAR AS PART OF FUND BENEFITS UPON DIRECTORS FOR FISCAL YEAR NAME OF PERSON, POSITION ENDED 1997 EXPENSES RETIREMENT ENDED 1997 - ------------------------ -------------- ---------------- ------------- ------------------------- Daniel S. Goodrum, Trustee $15,625 N/A N/A $15,625 for service on two boards Wilton Looney, Trustee $16,750 N/A N/A $16,750 for service on two boards Champney A. McNair, Trustee $15,625 N/A N/A $15,625 for service on two boards
B-26
AGGREGATE COMPENSATION PENSION OR TOTAL COMPENSATION FROM RETIREMENT ESTIMATED FROM REGISTRANT AND REGISTRANT FOR BENEFITS ACCRUED ANNUAL FUND COMPLEX PAID TO FISCAL YEAR AS PART OF FUND BENEFITS UPON DIRECTORS FOR FISCAL YEAR NAME OF PERSON, POSITION ENDED 1997 EXPENSES RETIREMENT ENDED 1997 - ------------------------ -------------- ---------------- ------------- ------------------------- F. Wendell Gooch, Trustee $15,625 N/A N/A $15,625 for service on two boards T. Gordy Germany, Trustee $15,625 N/A N/A $15,625 for service on two boards Dr. Bernard F. Sliger, Trustee $15,625 N/A N/A $15,625 for service on two boards Jesse S. Hall, Trustee $15,625 N/A N/A $15,625 for service on two boards
PERFORMANCE INFORMATION From time to time a Fund may advertise its performance. Performance figures are based on historical earnings and are not intended to indicate future performance. CLASSES OF SHARES AND PERFORMANCE The performance of the Trust's Investor Shares and Flex Shares will normally be lower than for Trust Shares because Investor Shares and Flex Shares are subject to distribution, service, and certain transfer agent fees not charged to Trust Shares. Because of their differing distribution expense arrangements, the performance of Flex Shares in comparison to Investor Shares will vary depending upon the investor's investment time horizon. PERFORMANCE COMPARISONS Each Fund may periodically compare its performance to other mutual funds tracked by mutual fund rating services, to broad groups of comparable mutual funds, or to unmanaged indices. These comparisons may assume reinvestment of dividends but generally do not reflect deductions for administrative and management costs. COMPUTATION OF YIELD The current yield of the Money Market Funds will be calculated daily based upon the seven days ending on the date of calculation ("base period"). The yield is computed by determining the net change (exclusive of capital changes) in the value of a hypothetical pre-existing shareholder account having a balance of one share at the beginning of the period, subtracting a hypothetical charge reflecting deductions from shareholder accounts, and dividing such net change by the value of the account at the beginning of the same period to obtain the base period return and multiplying the result by (365/7). Realized and unrealized gains and losses are not included in the calculation of the yield. The effective compound yield of the Funds is determined by computing the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one share at the beginning of the period, subtracting a hypothetical charge reflecting deductions from shareholder accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and then compounding B-27 the base period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: Effective Yield = [Base Period Return + 1]. The current and the effective yields reflect the reinvestment of net income earned daily on portfolio assets. For the 7-day period ended May 31, 1997 the Money Market Funds' current effective and tax-equivalent yields were as follows:
7-DAY 7-DAY 7-DAY TAX-EQUIVALENT TAX-EQUIVALENT FUND CLASS 7-DAY YIELD EFFECTIVE YIELD YIELD EFFECTIVE YIELD ---- -------- ----------- --------------- -------------- --------------- Prime Quality Money Investor 4.91% 5.03% N/A N/A Market Fund Trust 5.08% 5.20% N/A N/A U.S. Government Investor 4.77% 4.86% N/A N/A Securities Money Trust 4.91% 5.00% N/A N/A Market Fund Tax-Exempt Money Investor 3.23% 3.28% 5.35% 5.43% Market Fund Trust 3.35% 3.40% 5.55% 5.63%
The yields of these Funds fluctuate, and the annualization of a week's dividend is not a representation by the Trust as to what an investment in the Fund will actually yield in the future. Actual yields will depend on such variables as asset quality, average asset maturity, the type of instruments a Fund invests in, changes in interest rates on money market instruments, changes in the expenses of the Fund and other factors. Yields are one basis upon which investors may compare the Funds with other money market funds; however, yields of other money market funds and other investment vehicles may not be comparable because of the factors set forth above and differences in the methods used in valuing portfolio instruments. The Tax-Exempt Money Market and Tax-Exempt Bond Fund's "tax equivalent yield" is calculated by determining the rate of return that would have to be achieved on a fully taxable investment to produce the after-tax equivalent of the Fund's yield, assuming certain tax brackets for a Shareholder. Tax-exempt yield is calculated according to the same formula except that a = interest exempt from federal income tax earned during the period. This tax-exempt yield is then translated into tax-equivalent yield according to the following formula: TAX-EQUIVALENT YIELD = ( E ) + t _________ 1-P E = tax-exempt yield p = stated income tax rate t = taxable yield Tax equivalent yields assume the payment of federal income taxes at a rate of 39.6% and, for the Georgia Tax-Exempt Bond Fund, Georgia income taxes at a rate of 6.0% and, for the Tennessee Tax-Exempt Bond Fund, Tennessee income taxes at a rate of 6.0%. B-28 For the 30-day period ended May 31, 1997, the tax-equivalent yields for the Trust Shares were as follows: for the Investment Grade Tax-Exempt Bond Fund - -6.62%, Georgia Tax-Exempt Bond Fund - 8.14%, Florida Tax-Exempt Bond Fund - -8.00%, and Tennessee Tax-Exempt Bond Fund - 8.24%. For the 30-day period ended May 31, 1997, the tax-equivalent yields for the Investor Shares of the Tax-Exempt Funds were as follows: for the Investment Grade Tax-Exempt Bond Fund - 5.75%, Georgia Tax-Exempt Bond Fund -7.50%, Florida Tax-Exempt Bond Fund - 7.32% and Tennessee Tax-Exempt Bond Fund - 7.54%. For the 30-day period ended May 31, 1997, the tax-equivalent yields for the Flex Shares of the Tax-Exempt Funds were as follows: for the Investment Grade Tax-Exempt Bond Fund - 5.15%, Georgia Tax-Exempt Bond Fund - 6.91%, Florida Tax-Exempt Bond Fund - 6.73% and Tennessee Tax-Exempt Bond Fund - 6.91%. The Bond, Short-Term U.S. Treasury, Tax-Exempt Bond and Equity Funds may advertise a 30-day yield. In particular, yield will be calculated according to the following formula: 6 Yield = (2 (a-b/cd + 1) - 1) where a = dividends and interest earned during the period; b = expenses accrued for the period (net of reimbursement); c = the current daily number of shares outstanding during the period that were entitled to receive dividends; and d = the maximum offering price per share on the last day of the period. For the 30-day period ended May 31, 1997, yields on the Funds other than the Money Market Funds were as follows: FUND CLASS YIELD - --------------------------------------------------------------------- Investment Grade Bond Trust Class 6.31% Fund Investor Class 5.68% Flex Shares 5.42% Investment Grade Tax- Trust Class 4.00% Exempt Bond Fund Investor Class 3.47% Flex Shares 3.11% Short-Term Bond Fund Trust Class 5.97% Investor Class 5.65% Flex Shares 5.42% B-29 FUND CLASS YIELD - --------------------------------------------------------------------- Florida Tax-Exempt Bond Trust Class 4.35% Fund Investor Class 3.98% Flex Shares 3.66% Georgia Tax-Exempt Bond Trust Class 4.43% Fund Investor Class 4.08% Flex Shares 3.76% Tennessee Tax-Exempt Trust Class 4.48% Bond Fund Investor Class 4.10% Flex Shares 3.76% Short-Term U.S. Treasury Trust Class 5.64% Securities Fund Investor Class 5.43% Flex Shares 5.20% U.S. Government Trust Class 6.21% Securities Fund Investor Class 5.56% Flex Shares 5.28% Limited-Term Federal Trust Class 5.91% Mortgage Securities Fund Investor Class 5.50% Flex Shares 5.29% Capital Growth Fund Trust Class .70% Investor Class .08% Flex Shares 0% Sunbelt Equity Fund Trust Class 0% Investor Class 0% Flex Shares 0% Value Income Stock Fund Trust Class 2.24% Investor Class 1.82% Flex Shares 1.22% Mid-Cap Equity Fund Trust Class 0% Investor Class 0% Flex Shares 0% B-30 FUND CLASS YIELD - --------------------------------------------------------------------- Balanced Fund Trust Class 2.98% Investor Class 2.59% Flex Shares 1.95% Small Cap Equity Fund Trust Class 1.31% Investor Class N/A Flex Class N/A Emerging Markets Equity Trust Class Fund International Equity Trust Class Fund Investor Class Flex Shares International Equity Trust Class Index Fund Investor Class Flex Shares *Not in operation during the period. CALCULATION OF TOTAL RETURN From time to time, the Bond, Short-Term U.S. Treasury, Tax-Exempt Bond, Balanced and Equity Funds may advertise total return. In particular, total return will be calculated according to the following formula: P (1 + T)n = ERV, where P = a hypothetical initial payment of $1,000; T = average annual total return; n = number of years; and ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of the designated time period as of the end of such period. From time to time, the Trust may include the names of clients of the Advisors in advertisements and/or sales literature for the Trust. The SEI Funds Evaluation database tracks the total return of numerous tax-exempt pension accounts. The range of returns in these accounts determines the percentile rankings. SunTrust Bank's investment advisory affiliates, STI Capital Management, N.A. and Trusco Capital Management, have been in the top 1% of the SEI Funds Evaluation database for equity managers over the past ten years. SEI Investment's database includes research data on over 1,000 investment managers responsible for over $450 billion in assets. Based on the foregoing, the average annual total returns for the Funds from inception through May 31, 1997 and for the one year period ended May 31, 1997 were as follows: B-31 AVERAGE ANNUAL TOTAL RETURN --------------------------- FUND CLASS ONE YEAR SINCE INCEPTION - ----------------------------------------------------------------------------- Prime Quality Money Trust(1) 5.01% 4.17% Market Fund Investor(1) 4.84% 4.00% U.S. Government Trust(1) 4.83% 4.04% Securities Money Market Fund Investor(1) 4.69% 3.90% Tax-Exempt Money Trust(1) 3.09% 2.74% Market Fund Investor(1) 2.97% 2.62% Investment Grade Bond Trust(3) 6.99% 6.26% Fund Investor--With 2.68% 5.18% Sales Load(2) Investor--Without 6.66% 5.99% Sales Load(2) Flex--With Sales 4.16% 4.33% Load(25) Flex--Without 6.16% 4.33% Sales Load(25) Investment Grade Tax- Trust(5) 7.13% 6.04% Exempt Bond Fund Investor--With 2.72% 6.98% Sales Load(4) Investor--Without 6.69% 7.80% Sales Load(4) Flex--With Sales 4.19% 5.55% Load(26) Flex--Without 6.19% 5.55% Sales Load(26) Short-Term Bond Fund Trust(7) 6.30% 5.04% Investor--With 3.87% 4.18% Sales Load(8) Investor--Without 5.97% 4.69% Sales Load(8) Flex--With Sales 3.62% 4.70% Load(28) Flex-Without Sales 5.62% 4.70% Load(28) Florida Tax-Exempt Trust(10) 7.22% 5.66% Bond Fund Investor--With 3.01% 4.27% Sales Load(9) Investor--Without 7.00% 5.46% Sales Load(9) Flex--With Sales 4.48% 4.86% Load(26) Flex--Without 6.48% 4.86% Sales Load(26) B-32 AVERAGE ANNUAL TOTAL RETURN --------------------------- FUND CLASS ONE YEAR SINCE INCEPTION - ----------------------------------------------------------------------------- Georgia Tax-Exempt Trust(9) 6.79% 3.81% Bond Fund Investor--With 2.51% 2.46% Sales Load(11) Investor--Without 6.47% 3.63% Sales Load(11) Flex--With Sales 4.06% 4.15% Load(31) Flex--Without 6.06% 4.15% Sales Load(31) Tennessee Tax-Exempt Trust(12) 7.16% 3.47% Bond Fund Investor--With 2.89% 2.23% Sales Load(11) Investor--Without 6.93% 3.40% Sales Load(11) Flex--With Sales 4.42% 4.19% Load(29) Flex--Without 6.42% 4.19% Sales Load(29) Short-Term U.S. Trust(7) 5.76% 4.56% Treasury Securities Fund Investor--With 4.53% 4.15% Sales Load(6) Investor--Without 5.59% 4.40% Sales Load(6) Flex--With Sales 3.19% 4.48% Load(27) Flex--Without 5.19% 4.48% Sales Load(27) U.S. Government Trust(21) 7.54% 6.67% Securities Fund Investor--With 3.14% 4.74% Sales Load(20) Investor--Without 7.21% 6.09% Sales Load(20) Flex-With Sales 4.57% 3.98% Load(25) Flex--Without 6.57% 3.98% Sales Load(25) Limited-Term Federal Trust(23) 6.43% 6.29% Mortgage Fund Investor--With 3.47% 5.40% Sales Load(22) Investor--Without 6.17% 6.35% Sales Load(22) Flex--With Sales 3.80% 4.95% Load(25) Flex--Without 5.80% 4.95% Sales Load(25) B-33 AVERAGE ANNUAL TOTAL RETURN --------------------------- FUND CLASS ONE YEAR SINCE INCEPTION - ----------------------------------------------------------------------------- Capital Growth Fund Trust(13) 24.66% 15.98% Investor--With 19.10% 14.98% Sales Load(4) Investor--Without 23.74% 15.86% Sales Load(4) Flex--With Sales 21.24% 25.34% Load(26) Flex--Without 23.24% 25.34% Sales Load(26) Sunbelt Equity Fund Trust(19) 1.48% 11.83% Investor--With (2.71)% 10.08% Sales Load(18) Investor--Without 1.05% 11.32% Sales Load(18) Flex--With Sales (1.40)% 18.46% Load(29) Flex--Without 0.46% 18.46% Sales Load(29) Value Income Stock Trust(15) 22.18% 18.87% Fund Investor--With 17.14% 18.14% Sales Load(14) Investor--Without 21.69% 19.20% Sales Load(14) Flex--With Sales 18.91% 23.68% Load(26) Flex--Without 20.91% 23.68% Sales Load(26) Mid-Cap Equity Fund Trust(17) 14.23% 15.01% Investor--With 9.46% 13.11% Sales Load(16) Investor--Without 13.76% 14.42% Sales Load(16) Flex--With Sales 11.06% 17.91% Load(29) Flex--Without 13.06% 17.91% Sales Load(29) Balanced Fund Trust(19) 16.66% 11.77% Investor--With 11.92% 10.07% Sales Load(18) Investor--Without 16.27% 11.32% Sales Load(18) Flex--With Sales 13.40% 15.51% Load(30) Flex--Without 15.40% 15.51% Sales Load(30) B-34 AVERAGE ANNUAL TOTAL RETURN --------------------------- FUND CLASS ONE YEAR SINCE INCEPTION - ----------------------------------------------------------------------------- Small Cap Equity Fund Trust * 10.97% Flex--With Sales * * Load Flex--Without * * Sales Load Emerging Markets Trust(35) * 7.90% Equity Fund International Equity Trust(33) 23.29% 25.50% Fund Investor--With 18.28% 19.68% Sales Load(32) Investor--Without 22.85% 22.99% Sales Load(32) Flex--With Sales 19.98% 22.30% Load(32) Flex--Without 21.98% 22.30% Sales Load(32) International Equity Trust(24) 7.48% 6.48% Index Fund Investor--With 3.14% 4.71% Sales Load(24) Investor--Without 7.12% 6.06% Sales Load(24) Flex--With Sales 4.41% 7.34% Load(34) Flex--Without 6.41% 7.34% Sales Load(34) (1) Commenced operations 6/8/92 (2) Commenced operations 6/11/92 (3) Commenced operations 7/16/92 (4) Commenced operations 6/9/92 (5) Commenced operations 10/21/93 (6) Commenced operations 3/18/93 (7) Commenced operations 3/15/93 (8) Commenced operations 3/22/93 (9) Commenced operations 1/18/94 (10) Commenced operations 1/25/94 (11) Commenced operations 1/19/94 (12) Commenced operations 1/27/94 (13) Commenced operations 7/1/92 (14) Commenced operations 2/17/93 (15) Commenced operations 2/12/93 (16) Commenced operations 2/1/94 (17) Commenced operations 2/2/94 (18) Commenced operations 1/4/94 (19) Commenced operations 1/3/94 (20) Commenced operations 6/9/94 (21) Commenced operations 7/31/94 (22) Commenced operations 7/17/94 (23) Commenced operations 6/7/94 (24) Commenced operations 6/6/94 (25) Commenced operations 6/2/95 (26) Commenced operations 6/2/95 (27) Commenced operations 6/23/95 (28) Commenced operations 6/21/95 (29) Commenced operations 6/6/95 (30) Commenced operations 6/15/95 (31) Commenced operations 6/7/95 (31) Commenced operations 6/7/95 (32) Commenced operations 1/2/96 (33) Commenced operations 12/1/95 (34) Commenced operations 6/8/95 (35) Commenced operations 1/31/97 *Not in operation during period. Flex Shares of the Trust commenced operations after May 31, 1995. PURCHASE AND REDEMPTION OF SHARES Purchases and redemptions of shares of the Funds may be made on any day the New York Stock Exchange ("NYSE") is open for business. Currently, the NYSE is closed on the days the following holidays are observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is currently the Trust's policy to pay for all redemptions in cash. The Trust retains the right, however, to alter this policy to provide for redemptions in whole or in part by a distribution in-kind of readily marketable securities held by B-35 the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale of any such securities so received in payment of redemptions. A Shareholder will at all times be entitled to aggregate cash redemptions from all Funds of the Trust during any 90-day period of up to the lesser of $250,000 or 1% of the Trust's net assets. The Trust reserves the right to suspend the right of redemption and/or to postpone the date of payment upon redemption for any period on which trading on the NYSE is restricted, or during the existence of an emergency (as determined by the Securities and Exchange Commission by rule or regulation) as a result of disposal or valuation of a Fund's securities is not reasonably practicable, or for such other periods as the Securities and Exchange Commission has by order permitted. The Trust also reserves the right to suspend sales of shares of a Fund for any period during which the NYSE, an Advisor, the Administrator and/or, the Custodian are not open for business. DETERMINATION OF NET ASSET VALUE The net asset value per share of the Money Market Funds is calculated daily by the Administrator by adding the value of securities and other assets, subtracting liabilities and dividing by the number of outstanding shares. Securities will be valued by the amortized cost method which involves valuing a security at its cost on the date of purchase and thereafter (absent unusual circumstances) assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuations in general market rates of interest on the value of the instrument. While this method provides certainty in valuation, it may result in periods during which a security's value, as determined by this method, is higher or lower than the price a Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield of a Fund may tend to be higher than a like computation made by a company with identical investments utilizing a method of valuation based upon market prices and estimates of market prices for all of its portfolio securities. Thus, if the use of amortized cost by a Fund resulted in a lower aggregate portfolio value on a particular day, a prospective investor in a Fund would be able to obtain a somewhat higher yield than would result from investment in a company utilizing solely market values, and existing investors in a Fund would experience a lower yield. The converse would apply in a period of rising interest rates. A Fund's use of amortized cost and the maintenance of a Fund's net asset value at $1.00 are permitted by regulations promulgated by Rule 2a-7 under the 1940 Act, provided that certain conditions are met. The regulations also require the Trustees to establish procedures which are reasonably designed to stabilize the net asset value per share at $1.00 for the Funds. Such procedures include the determination of the extent of deviation, if any, of the Funds current net asset value per share calculated using available market quotations from the Funds amortized cost price per share at such intervals as the Trustees deem appropriate and reasonable in light of market conditions and periodic reviews of the amount of the deviation and the methods used to calculate such deviation. In the event that such deviation exceeds 1/2 of 1%, the Trustees are required to consider promptly what action, if any, should be initiated, and, if the Trustees believe that the extent of any deviation may result in material dilution or other unfair results to Shareholders, the Trustees are required to take such corrective action as they deem appropriate to eliminate or reduce such dilution or unfair results to the extent reasonably practicable. Such actions may include the sale of portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; or establishing a net asset value per share by using available market quotations. In addition, if the Funds incur a significant loss or liability, the Trustees have the authority to reduce pro rata the number of shares of the Funds in each Shareholder's account and to offset each Shareholder's pro rata portion of such loss or liability from the Shareholder's accrued but unpaid dividends or from future dividends while each other Fund must annually distribute at least 90% of its investment company taxable income. The securities of the Bond, Short-Term U.S. Treasury Securities and Equity Funds are valued by the Administrator pursuant to valuations provided by an independent pricing service. The pricing service relies primarily on prices of actual market transactions as well as trader quotations. However, the service may also use a matrix system to B-36 determine valuations of fixed income securities, which system considers such factors as security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations. The procedures of the pricing service and its valuations are reviewed by the officers of the Trust under the general supervision of the Trustees. Although the methodology and procedures are identical, the net asset value per share of Trust Shares, Flex Shares and Investor Shares of the Bond, Short-Term U.S. Treasury Securities and Equity Funds may differ because of variations in the distribution and service fees and transfer agent fees charged to Investor Shares. TAXES The following is a summary of certain Federal income tax considerations generally affecting the Funds and their shareholders that are not described in the Funds' prospectus. No attempt is made to present a detailed explanation of the Federal tax treatment of the funds or their Shareholders, and the discussion here and in the Funds' prospectus is not intended as a substitute for careful tax planning. This discussion of Federal income tax consequences is based on the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations issued thereunder, in effect on the date of this Statement of Additional Information. New legislation, as well as administrative changes or court decisions, may change the conclusions expressed herein, and may have a retroactive effect with respect to the transactions contemplated herein. FEDERAL INCOME TAX In order to qualify for treatment as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended ("Code"), each Fund must distribute annually to its Shareholders at least the sum of 90% of its net interest income excludable from gross income plus 90% of its investment company taxable income (generally, net investment income plus net short-term capital gain) ("Distribution Requirement") and also must meet several additional requirements. Among these requirements are the following: (i) at least 90% of a Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stock or securities, or certain other income; (ii) a Fund must derive less than 30% of its gross income each taxable year from the sale or other disposition of stocks or securities held for less than three months; (iii) at the close of each quarter of a Fund's taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, U.S. Government securities, securities of other RIC's and other securities, with such other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of a Fund's assets and that does not represent more than 10% of the outstanding voting securities of such issuer; and (iv) at the close of each quarter of a Fund's taxable year, not more than 25% of the value of its assets may be invested in securities (other than U.S. Government securities or the securities of other RIC's) of any one issuer, or of two or more issuers engaged in same or similar businesses if the Fund owns at least 20% of the voting power of such issuers. Requirement (ii) no longer applies for tax years beginning after August 5, 1997. Notwithstanding the Distribution Requirement described above, which only requires a Fund to distribute at least 90% of its annual investment company taxable income and does not require any minimum distribution of net capital gains (the excess of net long-term capital gains over net short-term capital loss), a Fund will be subject to a nondeductible 4% excise tax to the extent it fails to distribute by the end of any calendar year 98% of its ordinary income for that year and 98% of its capital gain net income for the one-year period ending on October 31 of that calendar year, plus certain other amounts. Each Fund intends to make sufficient distributions prior to the end of each calendar year to avoid liability for the federal excise tax applicable to regulated investment companies. B-37 If, at the close of each quarter of its taxable year, at least 50% of the value of a Fund's total assets consists of obligations the interest on which is excludable from gross income, a Fund may pay "exempt-interest dividends," as defined in Section 852(b)(5) of the Code, to its shareholders. As noted in the Prospectus, the Tax-Exempt Money Market Fund, the Investment Grade Tax-Exempt Bond Fund, and the State Tax-Exempt Bond Funds intend to pay exempt-interest dividends. Exempt-interest dividends are excludable from a Shareholder's gross income for regular Federal income tax purposes, but may nevertheless be subject to the alternative minimum tax (the "Alternative Minimum Tax") imposed by Section 55 of the Code or the environmental tax (the "Environmental Tax") imposed by Section 59A of the Code. The Alternative Minimum Tax is imposed at the rate of 26% (with a maximum rate of 28%) in the case of non-corporate taxpayers and at the rate of 20% in the case of corporate taxpayers, to the extent it exceeds the taxpayer's regular tax liability. The Environmental Tax is imposed at the rate of 0.12% and applies only to corporate taxpayers. The Alternative Minimum Tax and the Environmental Tax may be imposed in two circumstances. First, exempt-interest dividends derived from certain "private activity bonds" issued after August 7, 1986, will generally be an item of tax preference and therefore potentially subject to the Alternative Minimum Tax for both corporate and non-corporate taxpayers and the Environmental Tax for corporate taxpayers only. Second, in the case of exempt-interest dividends received by corporate Shareholders, all exempt-interest dividends, regardless of when the bonds from which they are derived were issued or whether they are derived from private activity bonds, will be included in the corporation's "adjusted current earnings," as defined in Section 56(g) of the Code, in calculating the corporation's alternative minimum taxable income for purposes of determining the Alternative Minimum Tax and the Environmental Tax. For tax years beginning after December 31, 1997, the Alternative Minimum Tax is repealed for certain corporations. Distributions of exempt-interest dividends may result in additional Federal income tax consequences to shareholders in Tax-Exempt Funds. For example, interest on indebtedness incurred by Shareholders to purchase or carry shares of a Tax-Exempt Fund will not be deductible for Federal income tax purposes to the extent that the Fund distributes exempt interest dividends during the taxable year. The deduction otherwise allowable to property and casualty insurance companies for "losses incurred" will be reduced by an amount equal to a portion of exempt-interest dividends received or accrued during any taxable year. Certain foreign corporations engaged in a trade or business in the United States will be subject to a "branch profits tax" on their "dividend equivalent amount" for the taxable year, which will include exempt-interest dividends. Certain Subchapter S corporations may also be subject to taxes on their "passive investment income," which could include exempt-interest dividends. Up to 85% of the Social Security benefits or railroad retirement benefits received by an individual during any taxable year will be included in the gross income of such individual if the individual's "modified adjusted gross income" (which includes exempt-interest dividends) plus one-half of the Social Security benefits or railroad retirement benefits received by such individual during that taxable year exceeds the base amount described in Section 86 of the Code. A Tax-Exempt Fund may not be an appropriate investment for persons (including corporations and other business entities) who are "substantial users" (or persons related to such users) of facilities financed by industrial development or private activity bonds. A "substantial user" is defined generally to include certain persons who regularly use in a trade or business a facility financed from the proceeds of industrial development bonds or private activity bonds. Such entities or persons should consult their tax advisors before purchasing shares of a Tax-Exempt Fund. Issuers of bonds purchased by a Tax-Exempt Fund (or the beneficiary of such bonds) may have made certain representations or covenants in connection with the issuance of such bonds to satisfy certain requirements of the Code that must be satisfied subsequent to the issuance of such bonds. Investors should be aware that exempt-interest dividends derived from such bonds may become subject to Federal income taxation retroactively to the date of issuance of the bonds to which such dividends are attributable thereof if such representations are determined to have been inaccurate or if the issuer of such bonds (or the beneficiary of such bonds) fails to comply with such covenants. B-38 Any gain or loss recognized on a sale or redemption of shares of a Fund by a Shareholder who is not a dealer in securities will generally be treated as long-term capital gain or loss if the shares have been held for more than eighteen months, mid-term if the shares have been held for over one year but not for over eighteen months, and short-term if for a year or less.* Long-term capital gains are currently taxed at a maximum rate or 20%; mid-term capital gains are currently taxed at a maximum rate of 28%; and short-term gains are currently taxed at ordinary income tax rates.] If shares held for six months or less are sold or redeemed for a loss, two special rules apply: First, if shares on which a net capital gain distribution has been received are subsequently sold or redeemed, and such shares have been held for six months or less, any loss recognized will be treated as long-term capital loss to the extent of the long-term capital gain distributions. Second, any loss recognized by a Shareholder upon the sale or redemption of shares of a Tax-Exempt Fund held for six months or less will be disallowed to the extent of any exempt-interest dividends received by the Shareholder with respect to such shares. The Funds will make annual reports to Shareholders of the Federal income tax status of all distributions. FOREIGN TAXES Dividends and interests received by a Fund may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield on the Fund's stock or securities. Tax conventions between certain countries and the United States may reduce or eliminate these taxes. Foreign countries generally do not impose taxes on capital gains with respect to investments by foreign investors. If any of the International Equity Index, International Equity, and Emerging Markets Equity Funds meets the Distribution Requirement, and if more than 50% of the value of such Fund's total assets at the close of its taxable year consists of stock or securities of foreign corporations, such Fund will be eligible to, and will, file an election with the Internal Revenue Service that will enable Shareholders, in effect, to receive the benefit of the foreign tax credit with respect to any foreign and U.S. possessions income taxes paid by the Fund. Pursuant to the election, each Fund will treat those taxes as dividends paid to its Shareholders. Each Shareholder will be required to include a proportionate share of those taxes in gross income as income received from a foreign source and must treat the amount so included as if the Shareholder had paid the foreign tax directly. The Shareholder may then either deduct the taxes deemed paid by him or her in computing his or her taxable income or, alternatively, use the foregoing information in calculating the foreign tax credit against the Shareholders' Federal income tax. In no event shall a Shareholder be allowed a foreign tax credit with respect to shares in a Fund if such shares are held by the Shareholder for 15 days or less during the 30-day period beginning on the date which is 15 days before the date on which such shares become ex-dividend with respect to such dividend. If any of the three above-mentioned Funds make the election, such Fund will report annually to its Shareholders the respective amounts per share of the Fund's income from sources within, and taxes paid to, foreign countries and U.S. possessions. The International Equity Index, International Equity, and Emerging Markets Equity Funds' transactions in foreign currencies and forward foreign currency contracts will be subject to special provisions of the Code that, among other things, may affect the character of gains and losses realized by Funds (I.E., may effect whether gains or losses are ordinary or capital), accelerate recognition of income to the fund and defer Fund losses. These rules could therefore affect the character, amount and timing of distributions to Shareholders. These provisions also may require the Funds to mark-to-market certain types of the positions in its portfolio (I.E., treat them as if they were closed out) which may cause the Funds to recognize income without receiving cash with which to make distributions in amounts necessary to satisfy the 90% and 98% distribution requirements for avoiding income and excise taxes. Each Fund will monitor its transactions, will make the appropriate tax elections, and will make the appropriate entries in the books and records when it acquires any foreign currency or forward foreign currency contract in order to mitigate the effect of these rules and prevent disqualification of the Fund as a RIC and minimize the imposition of income and excise taxes. B-39 FUND TRANSACTIONS The Trust has no obligation to deal with any dealer or group of dealers in the execution of transactions in portfolio securities. Subject to policies established by the Trustees, an Advisor is responsible for placing the orders to execute transactions for a Fund. In placing orders, it is the policy of the Trust to seek to obtain the best net results taking into account such factors as price (including the applicable dealer spread), the size, type and difficulty of the transaction involved, the firm's general execution and operational facilities, and the firm's risk in positioning the securities involved. While an Advisor generally seeks reasonably competitive spreads or commissions, the Trust will not necessarily be paying the lowest spread or commission available. The money market securities in which the Funds invest are traded primarily in the over-the-counter market. Bonds and debentures are usually traded over-the-counter, but may be traded on an exchange. Where possible, an Advisor will deal directly with the dealers who make a market in the securities involved except in those circumstances where better prices and execution are available elsewhere. Such dealers usually are acting as principal for their own account. On occasion, securities may be purchased directly from the issuer. Money market securities are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes. The cost of executing portfolio securities transactions of the Trust will primarily consist of dealer spreads and underwriting commissions. TRADING PRACTICES AND BROKERAGE The Trust selects brokers or dealers to execute transactions for the purchase or sale of portfolio securities on the basis of its judgment of their professional capability to provide the service. The primary consideration is to have brokers or dealers provide transactions at best price and execution for the Trust. Best price and execution includes many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order and other factors affecting the overall benefit obtained by the account on the transaction. The Trust's determination of what are reasonably competitive rates is based upon the professional knowledge of its trading department as to rates paid and charged for similar transactions throughout the securities industry. In some instances, the Trust pays a minimal share transaction cost when the transaction presents no difficulty. Some trades are made on a net basis where the Trust either buys securities directly from the dealer or sells them to the dealer. In these instances, there is no direct commission charged but there is a spread (the difference between the buy and sell price) which is the equivalent of a commission. The Trust may allocate out of all commission business generated by all of the funds and accounts under management by an Advisor, brokerage business to brokers or dealers who provide brokerage and research services. These research services include advice, either directly or through publications or writings, as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; furnishing of analyses and reports concerning issuers, securities or industries; providing information on economic factors and trends, assisting in determining portfolio strategy, providing computer software used in security analyses, and providing portfolio performance evaluation and technical market analyses. Such services are used by an Advisor in connection with its investment decision-making process with respect to one or more funds and accounts managed by it, and may not be used exclusively with respect to the fund or account generating the brokerage. As provided in the Securities Exchange Act of 1934 (the "1934 Act") higher commissions may be paid to broker-dealers who provide brokerage and research services than to broker-dealers who do not provide such services if such higher commissions are deemed reasonable in relation to the value of the brokerage and research services provided. Although transactions are directed to broker-dealers who provide such brokerage and research services, the Trust believes that the commissions paid to such broker-dealers are not, in general, higher than commissions that would be paid to broker-dealers not providing such services and that such commissions are reasonable in relation to the value of B-40 the brokerage and research services provided. In addition, portfolio transactions which generate commissions or their equivalent are directed to broker-dealers who provide daily portfolio pricing services to the Trust. Subject to best price and execution, commissions used for pricing may or may not be generated by the funds receiving the pricing service. An Advisor may place a combined order for two or more accounts or funds engaged in the purchase or sale of the same security if, in its judgment, joint execution is in the best interest of each participant and will result in best price and execution. Transactions involving commingled orders are allocated in a manner deemed equitable to each account or fund. It is believed that the ability of the accounts to participate in volume transactions will generally be beneficial to the accounts and funds. Although it is recognized that, in some cases, the joint execution of orders could adversely affect the price or volume of the security that a particular account or Fund may obtain, it is the opinion of each Advisor and the Trust's Board of Trustees that the advantages of combined orders outweigh the possible disadvantages of separate transactions. Consistent with the Conduct Rules of the National Association of Securities Dealers, Inc., and subject to seeking best price and execution, the Funds, at the request of the Distributor, give consideration to sales of shares of the Trust as a factor in the selection of brokers and dealers to execute Trust portfolio transactions. It is expected that the Trust may execute brokerage or other agency transactions through the Distributor or an affiliate of an Advisor, both of which are registered broker-dealers, for a commission in conformity with the 1940 Act, the 1934 Act and rules promulgated by the SEC. Under these provisions, the Distributor or an affiliate of an Advisor is permitted to receive and retain compensation for effecting portfolio transactions for the Trust on an exchange if a written contract is in effect between the Distributor and the Trust expressly permitting the Distributor or an affiliate of an Advisor to receive and retain such compensation. These rules further require that commissions paid to the Distributor by the Trust for exchange transactions not exceed "usual and customary" brokerage commissions. The rules define "usual and customary" commissions to include amounts which are "reasonable and fair compared to the commission, fee or other renumeration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time." In addition, the Trust may direct commission business to one or more designated broker-dealers in connection with such broker/dealer's provision of services to the Trust or payment of certain Trust expenses (e.g., custody, pricing and professional fees). The Trustees, including those who are not "interested persons" of the Trust, have adopted procedures for evaluating the reasonableness of commissions paid to the Distributor, and will review these procedures periodically. For the fiscal year ended May 31, 1997, the Funds paid the following brokerage commissions with respect to portfolio transactions: B-41
TOTAL BROKERAGE COMMISSIONS % OF TOTAL % OF TOTAL PAID TO BROKERAGE BROKERED SFS IN TOTAL $ TOTAL $ COMMISSIONS TRANSACTIONS CONNECTION TOTAL $ AMOUNT TOTAL $ AMOUNT OF PAID TO EFFECTED WITH AMOUNT OF BROKERED AMOUNT OF BROKERAGE AFFILIATED THROUGH REPURCHASE OF BROKERED TRANSACTIONS BROKERAGE COMMISSIONS BROKERS AFFILIATED AGREEMENT TRANSACTIONS THROUGH COMMISSIONS PAID TO IN BROKERS TRANSACTIONS FOR FYE AFFILIATES FOR PAID IN AFFILIATES IN FYE FYE FOR FYE PORTFOLIO 5/31/97 FYE 5/31/97 FYE 5/31/97 FYE 5/31/97 5/31/97 5/31/97 5/31/97 - ------------------------------------------------------------------------------------------------------------------------------- Prime Quality $33,193,764,625 $9,634,801,779 $ 122,053 $ 122,053 100% 29% $122,053 Money Market Fund U.S. $ 7,444,430,857 $3,325,557,692 $ 141,850 $ 141,850 100% 45% $141,850 Government Securities Money Market Fund Tax-Exempt $ 2,204,750,530 -- $ 0 $ 0 0% 0% -- Money Market Fund Investment $ 8,374,366,900 $2,344,004,813 $ 17,502 $ 17,502 100% 28% $ 17,502 Grade Bond Fund Investment $ 3,131,088,439 $ 563,350,800 $ 3,552 $ 3,552 100% 18% $ 3,552 Grade Tax- Exempt Bond Fund Capital $ 2,855,601,252 $1,175,677,501 $ 3,228,364 $ 3,228,364 1% 41% $ 39,856 Growth Fund Value Income $ 2,597,768,470 $1,261,283,784 $ 4,600,079 $ 4,600,079 1% 49% $ 47,933 Stock Fund Short-Term $ 79,710,242 -- $ 0 $ 0 0% 0% -- Bond Fund Short-Term $ 318,014,674 -- $ 0 $ 0 0% 0% -- U.S. Treasury Securities Fund Sunbelt $ 1,315,787,519 $ 508,559,524 $ 903,669 $ 903,669 .49% 39% $ 4,453 Equity Fund Balanced Fund $ 926,906,986 $ 313,685,467 $ 195,918 $ 195,918 3% 34% $ 5,475 Mid-Cap $ 984,028,459 $ 401,976,085 $ 1,090,599 $ 1,090,599 1% 41% $ 12,836 Equity Fund Florida Tax- $ 284,768,149 $ 35,224,997 $ 169 $ 169 100% 12% $ 169 Exempt Bond Fund
B-42
TOTAL BROKERAGE COMMISSIONS % OF TOTAL % OF TOTAL PAID TO BROKERAGE BROKERED SFS IN TOTAL $ TOTAL $ COMMISSIONS TRANSACTIONS CONNECTION TOTAL $ AMOUNT TOTAL $ AMOUNT OF PAID TO EFFECTED WITH AMOUNT OF BROKERED AMOUNT OF BROKERAGE AFFILIATED THROUGH REPURCHASE OF BROKERED TRANSACTIONS BROKERAGE COMMISSIONS BROKERS AFFILIATED AGREEMENT TRANSACTIONS THROUGH COMMISSIONS PAID TO IN BROKERS TRANSACTIONS FOR FYE AFFILIATES FOR PAID IN AFFILIATES IN FYE FYE FOR FYE PORTFOLIO 5/31/97 FYE 5/31/97 FYE 5/31/97 FYE 5/31/97 5/31/97 5/31/97 5/31/97 - ------------------------------------------------------------------------------------------------------------------------------- Georgia Tax- $ 101,269,058 $ 18,350,406 $ 201 $ 201 100% 18% $ 201 Exempt Bond Fund Tennessee $ 9,344,425 $ 1,881,035 $ 36 $ 36 100% 20% $ 36 Tax-Exempt Bond Fund U.S. $ 60,753,621 $ 60,753,621 $ 0 $ 0 0% 0% -- Government Securities Fund Limited-Term $ 798,951,267 $ 798,951,267 $ 2,053 $ 2,053 100% 28% $ 2,053 Federal Mortgage Securities Fund Small Cap $ 227,315,887 $ 227,315,887 $ 229,856 $ 229,856 .38% 35% $ 867 Equity Fund Emerging $ 26,947,913 $ 0 $ 144,635 $ 0 0% 0% -- Markets Equity Fund International $ 44,036,638 $ 0 $ 94,672 $ 0 0% 0% -- Equity Index Fund International $ 999,491,675 $ 0 $ 2,875,911 $ 0 0% 0% -- Equity Fund
For the fiscal years ended May 31, 1996 and 1995, the Funds paid the following brokerage commissions with respect to portfolio transactions:
TOTAL $ AMOUNT OF BROKERAGE TOTAL $ AMOUNT OF BROKERED COMMISSIONS PAID COMMISSIONS PAID TO AFFILIATES --------------------------- ------------------------------ FUND 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------------------------------------- Prime Quality Money Market Fund $ 0 $ 108,992
B-43
TOTAL $ AMOUNT OF BROKERAGE TOTAL $ AMOUNT OF BROKERED COMMISSIONS PAID COMMISSIONS PAID TO AFFILIATES --------------------------- ------------------------------ FUND 1996 1995 1996 1995 - ----------------------------------------------------------------------------------------------------------------------- U.S. Government Securities Money Market Fund $ 0 $ 173,038 Tax-Exempt Money Market Fund $ 0 $ 0 Investment Grade Bond Fund $ 0 $ 18,536 Investment Grade Tax-Exempt Bond Fund $ 0 $ 3,392 Short-Term Bond Fund $ 0 $ 0 Florida Tax-Exempt Bond Fund $ 0 $ 200 Georgia Tax-Exempt Bond Fund $ 0 $ 135 Tennessee Tax-Exempt Bond Fund $ 0 $ 69 U.S. Government Securities Fund $ 0 $ 0 Limited-Term Federal Mortgage Securities Fund $ 0 $ 73 Capital Growth Fund $3,399,393 $2,641,999 $ 34,827 $46,411 Sunbelt Equity Fund $ 904,698 $ 654,499 $ 5,202 $ 4,802 Value Income Stock Fund $4,325,977 $3,542,773 $ 37,379 $17,510 Mid-Cap Equity Fund $ 528,220 $ 191,298 $ 18,224 $11,418 Balanced Fund $ 169,222 $ 140,109 $ 4,280 $ 4,063 Small Cap Equity Fund * * * * Emerging Markets Equity Fund * * * * International Equity Index Fund $1,532,834 $ 176,784 $ 71 $ 0 International Equity Fund $ 129,411 * $ 0 *
*Not in operation during the period. For the fiscal years ended May 31, 1997 and 1996, the portfolio turnover rate for each of the non-money market Funds was as follows:
TURNOVER RATE ---------------------- FUND 1997 1996 - ------------------------------------------------------------------ Investment Grade Bond Fund 298% 184% Investment Grade Tax-Exempt Bond Fund 489% 514%
B-44
TURNOVER RATE ---------------------- FUND 1997 1996 - ------------------------------------------------------------------ Short-Term U.S. Treasury Securities Fund 93% 94% Short-Term Bond Fund 118% 163% U.S. Government Securities Fund 21% 83% Limited-Term Federal Mortgage Securities 133% 83% Fund Florida Tax-Exempt Bond Fund 135% 63% Georgia Tax-Exempt Bond Fund 15% 60% Tennessee Tax-Exempt Bond Fund 16% 41% Capital Growth Fund 141% 156% Value Income Stock Fund 105% 134% Mid-Cap Equity Fund 152% 116% Balanced Fund 197% 155% Sunbelt Equity Fund 72% 106% Emerging Markets Equity 24% * International Equity Fund 139% 113% International Equity Index Fund 2% 30%
*Not in operation during the period. DESCRIPTION OF SHARES The Declaration of Trust authorizes the issuance of an unlimited number of shares and classes of shares of the Funds each of which represents an equal proportionate interest in that Fund with each other share. Shares are entitled upon liquidation to a PRO RATA share in the net assets of the Funds. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees of the Trust may create additional series of shares or classes of series. All consideration received by the Trust for shares of any additional series and all assets in which such consideration is invested would belong to that series and would be subject to the liabilities related thereto. Share certificates representing shares will not be issued. SHAREHOLDER LIABILITY The Trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust could, under certain circumstances, be held personally liable as partners for the obligations of the trust. Even if, however, the Trust were held to be a partnership, the possibility of the Shareholders' incurring financial loss for that reason appears remote because the Trust's Declaration of Trust contains an express disclaimer of Shareholder liability for obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by or on behalf of the Trust or the Trustees, and B-45 because the Declaration of Trust provides for indemnification out of the Trust property for any Shareholder held personally liable for the obligations of the Trust. LIMITATION OF TRUSTEES' LIABILITY The Declaration of Trust provides that a Trustee shall be liable only for his own willful defaults and, if reasonable care has been exercised in the selection of officers, agents, employees or investment advisors, shall not be liable for any neglect or wrongdoing of any such person. The Declaration of Trust also provides that the Trust will indemnify its Trustees and officers against liabilities and expenses incurred in connection with actual or threatened litigation in which they may be involved because of their offices with the Trust unless it is determined in the manner provided in the Declaration of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the Trust. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his willful misfeasance, bad faith, gross negligence or reckless disregard of his duties. 5% AND 25% SHAREHOLDERS As of September 2, 1997, the following persons were the only persons who were record owners (or to the knowledge of the Trust, beneficial owners) of 5% and 25% or more of the shares of the Funds. Persons who owned of record or beneficially more than 25% of a Fund's outstanding shares may be deemed to control the Fund within the meaning of the Act. The Trust believes that most of the shares of the Trust Class of the Funds were held for the record owner's fiduciary, agency or custodial customers. TRUST SHARES
FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Prime Quality Money Market Fund SunTrust Bank, Atlanta 1,501,684,056.9000 95.94% P.O. Box 105504 Atlanta, GA 30348 US Government Securities Money SunTrust Bank, Atlanta 330,351,631.2500 97.98% Market Fund P.O. Box 105504 Atlanta, GA 30348 Tax Exempt Money Market Fund SunTrust Bank, Atlanta 403,515,749.3900 100.00% P.O. Box 105504 Atlanta, GA 30348 Investment Grade Bond Fund Trustman 50,816,431.0230 76.11% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Investment Grade Tax Exempt Bond Trustman 7,062,669.8730 55.42% Fund Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 3,255,166.6420 25.55% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 B-46 FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Capital Growth Fund Trustman 59,831,226.6850 75.79% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Value Income Stock Fund Trustman 76,452,547.3750 69.72% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Short-Term U.S. Treasury Securities Trustman 1,192,275.2610 55.44% Fund Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Short-Term Bond Fund Trustman 5,818,699.3640 57.44% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 3,747,105.6450 36.99% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Sunbelt Equity Fund Trustman 19,850,769.7470 73.41% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Mid-Cap Equity Fund Trustman 13,599,373.2790 59.37% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 7,723,553.0810 33.72% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Balanced Fund Trustman 11,817,880.0600 96.56% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Florida Tax-Exempt Bond Fund Trustman 4,399,572.5730 67.99% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Georgia Tax-Exempt Bond Fund Trustman 2,097,210.1470 46.40% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 1,789,602.1880 39.59% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 B-47 FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Tennessee Tax-Exempt Bond Fund Trustman 107,883.8000 53.83% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 57,878.6610 28.88% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 International Equity Index Fund Trustman 3,735,378.7720 84.59% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 International Equity Fund Trustman 23,156,973.4110 61.10% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 12,280,833.8800 32.40% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 U.S. Government Securities Fund Trustman 967,116.5540 40.72% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 834,048.3510 35.12% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Limited Term Federal Mortgage Trustman 8,717,381.5800 67.34% Securities Fund Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 3,555,214.8200 27.46% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Emerging Markets Equity Fund Trustman 3,412,803.7780 74.46% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Small Cap Equity Fund Trustman 13,615,497.0400 63.94% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870 Trustman 6,720,125.4650 31.56% Mail Center 3144 P.O. Box 105870 Atlanta, GA 30348-5870
B-48 INVESTOR SHARES
FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Prime Quality Money Market Fund BHC Securities Inc 255,429,882.7100 79.02% Attn: Cash Sweeps Dept. 2005 Market Street One Commerce Square, 11th Floor Philadelphia, PA 19103-7042 STCM 19,725,000.0000 6.10% Omnibus Account Attn: Melinda Felice P.O. Box 4418, Ctr. 3910 Atlanta, GA 30302-4418 U.S. Government Securities Money BHC Securities Inc 32,197,846.6100 53.36% Market Fund Attn: Cash Sweeps Dept. 2005 Market Street One Commerce Square, 11th Floor Philadelphia, PA 19103-7042 Akerman, Senterfitt & Eidson 4,896,620.4900 8.11% Attorney Account P.O. Box 231 Orlando, FL 32802-0231 Tax Exempt Money Market Fund BHC Securities Inc 89,444,549.9300 69.41% Attn: Cash Sweeps Dept. 2005 Market Street One Commerce Square, 11th Floor Philadelphia, PA 19103-7042 STCM 15,400,000.0000 11.95% Omnibus Account P.O. Box 4418, Ctr.3910 Atlanta, GA 30302-4418 Investment Grade Bond Fund BHC Securities Inc. 1,474,597.4460 46.96% Trade House Account Attn: Mutual Funds One Commerce Square, 2005 Market Street Philadelphia, PA 19103-7042 Investment Grade Tax-Exempt Bond BHC Securities Inc. 623,246.3210 23.95% Fund Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 B-49 FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Capital Growth Fund BHC Securities Inc. 4,778,120.0840 33.41% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Value Income Stock Fund BHC Securities Inc. 5,882,796.8910 47.61% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Short-Term U.S. Treasury BHC Securities Inc. 139,953.9270 38.27% Securities Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Clarence A. Rittenhouse 61,601.4910 16.84% Margaret S. Rittenhouse JT WROS 700 Golden Beach Blvd #126 Venice, FL 34285-3311 Georgia Academy for Children 53,632.6810 14.66% and Youth Prof 100 Peachtree Street, Suite 500 Atlanta, GA 30303-1908 International Investment 47,744.7470 13.05% Conference Inc. Attn: Sandy Lawrence 6310 Sunset Drive Miami, FL 33143-4823 Short-Term Bond Fund BHC Securities Inc. 143,685.2460 67.67% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Bartow Memorial Hospital 12,193.5780 5.74% Foundation Inc. 1239 East Main Street Bartow, FL 33830-5005 Betty H. Anderson 10,671.5260 5.03% 207 Suburban Drive Brunswick, GA 31520-2920 Sunbelt Equity Fund BHC Securities Inc. 1,003,585.5730 49.39% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 B-50 FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- Mid-Cap Equity Fund BHC Securities Inc. 887,258.4840 57.94% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Anthony R. Gray 75,450.4840 57.94% 460 Virginia Drive Winter Park, FL 32789-5805 Balanced Fund BHC Securities Inc. 20,751.8530 47.40% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Florida Tax-Exempt Bond Fund BHC Securities Inc. 111,335.3360 35.79% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Mildred Meinhart Rast 30,176.0880 9.70% 1303 South 8th Street Leesburg, FL 34748-6822 Georgia Tax-Exempt Bond Fund BHC Securities Inc. 191,213.4220 53.07% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Patrick J. Doran & 29,577.3030 8.21% Norma R. Doran JTTEN 2024 Fisher Trail NE Atlanta, GA 30345-3429 Tennessee Tax-Exempt Bond Fund BHC Securities, Inc. 75,554.0850 58.10% Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Grace M. Bryan 18,894.1970 14.53% P.O. Box 176 St. Joseph, TN 38481-0176 Ralph Laine 13,213.5310 10.16% 2823 Lumar Lane Nashville, TN 37214-1834 B-51 FUND NAME AND ADDRESS NUMBER OF SHARES % OF FUND ---- ---------------- ---------------- --------- International Equity Index Fund BHC Securities Inc. 315,159.4950 64.54% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Community First National Bank 27,151.2400 5.56% RPO Tyler 401(k) RSP Attn: Kathy Lindstrom Main At Broadway Fargo, ND 58103-1906 International Equity Fund BHC Securities Inc. 674,984.7650 70.82% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 U.S. Government Securities Fund BHC Securities, Inc. 206,382.1450 91.35% Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Limited-Term Federal Mortgage BHC Securities Inc. 200,361.6770 84.30% Securities Fund Trade House Account Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042
FLEX SHARES
FUND NAME AND ADDRESS NUMBER OF SHARES % OF SHARES ---- ---------------- ---------------- ----------- Short-Term Bond Fund BHC Securities Inc. 26,775.8010 20.24% FAO21549889 Attn: Mutual FundsDept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 16,110.4250 12.18% FAO 21180400 Attn: Mutual FundsDept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 8,109.6240 6.13% FAO 21107805 Attn: Mutual FundsDept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 B-52 FUND NAME AND ADDRESS NUMBER OF SHARES % OF SHARES ---- ---------------- ---------------- ----------- Florida Tax-Exempt Bond Fund BHC Securities, Inc. 48,493.6580 10.75% FAO 20951046 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 H. Lorene Kleinlein TTEE 28,183.2200 6.25% H. Lorene Kleinlein Trust 9519 Sun Point Drive Boynton Beach, FL 33437-3343 BHC Securities Inc. 27,413.4470 6.08% FAO 21471055 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 25,661.0310 5.69% FAO 21738535 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 Tennessee Tax-Exempt Bond Fund BHC Securities Inc. 41,152.2630 12.24% FAO 21627721 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 32,630.8020 9.70% FAO 21610240 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 32,154.3410 9.56% FAO 20931807 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 International Equity Index Fund BHC Securities Inc. 7,594.1720 8.74% FAO 21547376 Attn: Mutual Funds Dept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 B-53 FUND NAME AND ADDRESS NUMBER OF SHARES % OF SHARES ---- ---------------- ---------------- ----------- BHC Securities, Inc. 5,208.0800 5.99% FAO 21549889 Attn: Mutual Funds Dept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities, Inc. 4,814.00 5.54% FAO 21119083 Attn: Mutual Funds Dept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 U.S. Government Securities Fund BHC Securities, Inc. 26,852.5970 9.62% FAO 21180443 Attn: Mutual Funds Dept. One Commerce Square 2005 Market Street, Suite1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 16,088.2850 5.76% FAO 21180400 Attn: Mutual FundsDept. One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 BHC Securities Inc. 16,026.7870 5.74% FAO 21531479 Attn: Mutual Funds One Commerce Square 2005 Market Street, Suite 1200 Philadelphia, PA 19103-7042 Ralph L. Struever 14,519.5660 5.20% 5350 Woodland Lakes Drive Palm Beach Gardens, FL 33418 Limited-Term Federal Mortgage BHC Securities Inc. 10,648.2850 6.93% Security Fund FAO 21838525 Attn: Mutual Funds One Commerce Square 2005 Market Street Philadelphia, PA 19103-7042 Viola T. High 10,398.8620 6.77% Richard T. High TEN ENT 528 Hearthstone Circle Brentwood, TN 37027-4323
B-54 EXPERTS The financial statements as of May 31, 1997 have been audited by Arthur Andersen LLP, Independent Public Accountants, as indicated in their report dated July 11, 1997 with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said report. B-55 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Value Income Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced, Emerging Markets Equity, International Equity Index, International Equity, Sunbelt Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond, Tennessee Tax-Exempt Bond, Georgia Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S. Treasury Securities, Limited-Term Federal Mortgage Securities, U.S. Government Securities, Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds of STI Classic Funds (the "Trust") as of May 31, 1997, and the related statements of operations, changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 1997, by correspondence with the custodian and the application of alternative auditing procedures with respect to unsettled securities transactions. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Value Income Stock, Mid-Cap Equity, Small Cap Equity, Capital Growth, Balanced, Emerging Markets Equity, International Equity Index, International Equity, Sunbelt Equity, Investment Grade Tax-Exempt Bond, Florida Tax-Exempt Bond, Tennessee Tax-Exempt Bond, Georgia Tax-Exempt Bond, Investment Grade Bond, Short-Term Bond, Short-Term U.S. Treasury Securities, Limited-Term Federal Mortgage Securities, U.S. Government Securities, Prime Quality Money Market, U.S. Government Securities Money Market, and Tax-Exempt Money Market Funds of STI Classic Funds as of May 31, 1997, the results of their operations, changes in their net assets, and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, PA July 11, 1997 41 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 VALUE INCOME STOCK FUND
- -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- COMMON STOCKS (92.6%) BASIC MATERIALS (14.8%) Consolidated Papers 233,700 $ 12,737 Cyprus AMAX Minerals 707,200 17,238 Eastman Chemical 119,700 7,122 Ethyl 1,428,100 13,388 Georgia Pacific 246,700 21,771 Hercules 617,800 28,959 Imperial Chemical Industries 315,900 17,217 International Flavors & Fragrances 592,100 26,274 International Paper 531,300 25,502 Nalco Chemical 394,600 14,650 Olin 464,700 19,053 Reynolds Metals 247,100 16,772 Union Camp 338,100 17,750 Witco Chemical 467,200 17,286 ---------- Total Basic Materials 255,719 ---------- CAPITAL GOODS (12.8%) AMP 1,034,400 42,540 Cooper Industries 329,100 16,784 Federal Signal 198,300 5,057 Foster Wheeler 544,000 21,080 General Signal 563,300 23,729 National Service Industries 278,100 12,202 Pall 556,500 13,147 Tenneco 770,100 34,462 Thomas & Betts 362,200 18,427 Trinity Industries 319,800 9,594 Waste Management 769,100 24,419 ---------- Total Capital Goods 221,441 ---------- COMMUNICATIONS SERVICES (7.7%) Alltel 538,700 17,710 BellSouth 460,200 20,882 Frontier 984,100 18,083 GTE 899,600 39,695 - -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- Southern New England Telecommunications 577,200 $ 22,511 Sprint 269,400 13,167 ---------- Total Communication Services 132,048 ---------- CONSUMER CYCLICALS (15.9%) American Greetings, Cl A 514,900 17,635 Dana 617,300 22,300 Echlin 597,300 19,935 Ford Motor 455,500 17,081 H & R Block 497,800 16,427 ITT Industries 1,291,700 31,970 J.C. Penney 767,200 39,511 Masco 428,800 16,670 May Department Stores 532,100 25,075 Maytag 683,900 18,294 McGraw-Hill 307,300 16,786 Mercantile Stores 287,700 15,464 Reader's Digest, Cl A 200,800 4,970 Shaw Industries 1,033,200 12,915 ---------- Total Consumer Cyclicals 275,033 ---------- CONSUMER STAPLES (9.3%) Cadbury Schweppes ADR 461,800 16,740 CPC International 271,900 23,383 Deluxe 261,600 8,502 Food Lion, Cl A 1,101,900 7,369 Kelly Services, Cl A 334,900 9,838 McCormick 617,100 16,122 R.R. Donnelley & Sons 660,200 24,510 Rubbermaid 896,400 24,987 UST 620,200 17,676 Whitman 495,500 11,954 ---------- Total Consumer Staples 161,081 ---------- ENERGY (9.2%) Amoco 291,400 26,044 Chevron 358,900 25,123 Dresser Industries 753,100 25,794 Kerr-McGee 352,700 22,837
42 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- ENERGY--CONTINUED Mobil 179,400 $ 25,094 Phillips Petroleum 612,900 26,048 Sun 278,200 8,311 ---------- Total Energy 159,251 ---------- FINANCIALS (8.2%) American Financial Group 435,700 16,557 American General 397,500 17,589 AmSouth Bancorp 233,850 9,149 Central Fidelity Banks 292,000 8,541 Crestar Financial 259,600 9,865 First American Bank 127,400 8,775 First American of Tennessee 281,600 10,278 Hibernia, Cl A 651,800 8,636 Magna Group 273,000 8,804 Merchantile Bancorp 150,700 8,891 Signet Banking 260,900 8,577 Summit Bancorp 183,854 9,078 TIG Holdings 624,000 16,848 ---------- Total Financials 141,588 ---------- HEALTH CARE (6.2%) American Home Products 345,600 26,352 Baxter International 490,800 25,890 C.R. Bard 525,400 16,813 Pharmacia Upjohn ADR 1,118,900 38,742 ---------- Total Health Care 107,797 ---------- TECHNOLOGY (1.5%) Eastman Kodak 307,900 25,517 ---------- TRANSPORTATION (2.2%) KLM Royal Dutch Air* 664,000 19,505 Illinois Central 493,400 17,824 ---------- Total Transportation 37,329 ---------- UTILITIES (4.8%) Central & South West 697,200 14,815 - -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- Duke Power 201,300 $ 9,058 Pacificorp 873,000 17,351 Questar 445,900 17,502 Southern 1,124,800 23,902 ---------- Total Utilities 82,628 ---------- Total Common Stocks (Cost $1,445,015) 1,599,432 ---------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS (6.8%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $70,160,347 (collateralized by FHLMC obligation, par value $69,192,840, 6.63%, 05/15/08: FNMA obligation, par value $54,184,000, 8.50%, 04/01/17: total market value $71,530,412) $ 70,128 70,128 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $46,073,839 (collateralized by various FHLMC obligations, total par value $68,587,421, 6.00%-9.50%, 11/01/01-05/01/27: various FNMA obligations total par value $71,651,398, 5.50%-9.00%, 06/01/01-05/01/27: total market value $44,159,361) 43,054 43,054
43 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--CONTINUED Swiss Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $4,954,044 (collateralized by FNMA obligation, par value $6,319,000, 6.071%, matures 04/01/34: market value $5,075,690) $ 4,952 $ 4,952 ---------- Total Repurchase Agreements (Cost $118,134) 118,134 ---------- Total Investments (99.4%) (Cost $1,563,149) 1,717,566 ---------- OTHER ASSETS AND LIABILITIES, NET (0.6%) 9,961 ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 108,557,380 outstanding shares of beneficial interest 1,171,719 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 12,133,042 outstanding shares of beneficial interest 134,021 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 5,399,733 outstanding shares of beneficial interest 68,125 - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- Undistributed net investment income $ 6,428 Accumulated net realized gain on investments 192,817 Unrealized appreciation on investments 154,417 ---------- Total Net Assets (100.0%) $1,727,527 ---------- ---------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.71 ---------- ---------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.68 ---------- ---------- Maximum Offering Price Per Share -- Investor Class ($13.68 DIVIDED BY 96.25%) $ 14.21 ---------- ---------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 13.61 ---------- ----------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 44 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 MID-CAP EQUITY FUND
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- COMMON STOCKS (92.6%) BASIC MATERIALS (5.0%) IMC Fertilizer Group 168,800 $ 6,604 James River 94,300 3,312 Potash of Saskatchewan 71,800 5,897 ----------- Total Basic Materials 15,813 ----------- CAPITAL GOODS (15.1%) Agco 111,400 3,551 Fisher Scientific International 86,500 3,136 Foster Wheeler 79,400 3,077 Hubbell, Cl B 84,540 3,847 Molten Metal Technology* 203,300 1,449 Philip Services* 405,600 5,932 Solectron* 119,100 7,444 Sundstrand 90,200 4,487 United Waste Systems* 136,200 5,227 U.S. Filter* 156,900 4,942 York International 100,850 4,891 ----------- Total Capital Goods 47,983 ----------- COMMUNICATIONS SERVICES (1.1%) Nextel Communications, Cl A* 243,500 3,592 ----------- CONSUMER CYCLICALS (15.5%) Bed Bath and Beyond* 116,000 3,292 Dollar General 183,200 6,160 Harley-Davidson 158,900 7,111 International Speedway* 123,500 2,439 Men's Wearhouse* 123,600 4,125 Nine West Group* 113,000 4,350 Saks Holdings* 224,300 5,579 Stanley Works 87,700 3,596 Staples* 336,700 7,407 West Marine* 203,800 5,350 ----------- Total Consumer Cyclicals 49,409 ----------- CONSUMER STAPLES (12.0%) Boston Chicken* 313,700 5,647 Cracker Barrel Old Country Stores 182,700 5,298 Dial 186,500 3,124 Hannaford Brothers 137,600 4,799 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- JP Foodservice* 152,000 $ 4,408 McKesson 75,300 5,657 Nabisco Holdings, Cl A 130,200 5,159 Papa John's International* 122,400 3,902 ----------- Total Consumer Staples 37,994 ----------- ENERGY (6.3%) Anadarko Petroleum 105,400 6,640 Kerr-McGee 47,400 3,069 Tosco 91,600 2,988 Western Atlas* 106,300 7,215 ----------- Total Energy 19,912 ----------- FINANCIALS (9.9%) Crestar Financial 139,000 5,282 First Security 162,075 3,971 Hartford Life, Cl A* 62,400 2,090 North Fork Bancorporation 88,000 1,848 Regions Financial 57,500 3,436 SouthTrust 77,100 2,997 Summit Bancorp 111,000 5,481 Union Planters 66,700 3,152 PMI Group 56,600 3,106 ----------- Total Financials 31,363 ----------- HEALTH CARE (9.9%) Allergan 112,200 3,324 Biogen* 187,300 6,216 DePuy* 136,500 3,310 Medpartners* 179,700 3,414 Pacificare Health Systems, Cl B* 91,400 7,243 Teva Pharmaceuticals ADR 65,600 3,936 Watson Pharmaceuticals* 105,100 4,112 ----------- Total Health Care 31,555 ----------- TECHNOLOGY (15.0%) ADC Telecommunications* 177,500 6,079 Adobe Systems 110,300 4,922 Analog Devices* 240,133 6,424 Atmel* 151,900 4,367 Ceridian* 141,000 5,182 Flextronics International* 207,000 4,890 Micron Electronics* 193,600 2,940
45
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- TECHNOLOGY--CONTINUED Network General* 226,600 $ 4,164 Teradyne* 214,400 8,790 ----------- Total Technology 47,758 ----------- TRANSPORTATION (1.4%) ASA Holdings 172,300 4,501 ----------- UTILITIES (1.4%) Wisconsin Energy 185,200 4,468 ----------- Total Common Stocks (Cost $268,513) 294,348 ----------- -------------------------------------------------------------------------------- FACE AMOUNT (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS (6.8%) Deutsche Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $12,270,617 (collateralized by FNMA obligation, par value $13,389,534, 0.000%, 01/01/26: market value $12,510,245) $ 12,265 12,265 Merrill Lynch 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $9,389,853 (collateralized by FNMA obligation, par value $465,000, 0.000%, 11/25/22; and various GNMA obligations, total par value $10,608,368, 6.000%-8.500%, 05/20/06-05/15/26: total market value $9,577,430) 9,386 9,386 ----------- Total Repurchase Agreements (Cost $21,651) 21,651 ----------- Total Investments (99.4%) (Cost $290,164) 315,999 ----------- OTHER ASSETS AND LIABILITIES, NET (0.6%) 1,736 ----------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 21,752,271 outstanding shares of beneficial interest $ 239,440 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 1,537,279 outstanding shares of beneficial interest 17,180 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 776,273 outstanding shares of beneficial interest 9,538 Accumulated net investment loss (10) Accumulated net realized gain on investments 25,752 Net unrealized appreciation on investments 25,835 ----------- Total Net Assets (100.0%) $ 317,735 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.21 ----------- ----------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.17 ----------- ----------- Maximum Offering Price Per Share -- Investor Shares ($13.17 DIVIDED BY 96.25%) $ 13.68 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 13.04 ----------- -----------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 46 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 SMALL CAP EQUITY FUND
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- COMMON STOCKS (95.2%) BASIC MATERIALS (3.1%) Columbus Mckinnon 63,700 $ 1,147 Commonwealth Industries 94,700 1,788 Lilly Industries Incorporated, Cl A 9,000 189 Schnitzer Steel Industries, Cl A 38,800 970 ----------- Total Basic Materials 4,094 ----------- CAPITAL GOODS (11.7%) A.M. Castle 87,600 1,905 Applied Industrial Technology 45,500 1,598 Barnes Group 13,300 357 Fisher Scientific International 69,000 2,501 Regal Beloit 115,700 3,081 Valmont Industries 24,100 1,012 Thomas Industries 34,000 956 Zurn Industries 145,900 3,866 ----------- Total Capital Goods 15,276 ----------- CONSUMER CYCLICALS (27.4%) Ameron 6,600 366 Angelica 104,900 1,888 Brown Group 107,000 1,926 Bush Industries 116,300 2,617 Cross A.T., Cl A 54,800 610 Guilford Mills 132,250 2,595 Hardinge 38,000 988 Harman International 84,800 3,540 K2 55,500 1,603 Libbey 74,800 2,497 LSI Industries 72,300 1,103 Movado Group 86,625 1,917 Optical Coating Laboratories 43,900 466 Rock Tenn, Cl A 63,000 953 Sotheby's Holdings, Cl A 124,000 1,922 Springs Industries, Cl A 75,200 3,807 Talbots 143,700 3,772 WD-40 32,700 1,856 Wellman 73,100 1,307 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- Winnebago Industries 20,400 $ 140 ----------- Total Consumer Cyclicals 35,873 ----------- CONSUMER STAPLES (15.4%) ABM Industries 99,700 1,932 Banta 87,000 2,414 Bowne & Company 106,000 3,167 Earthgrains 34,200 1,949 Ingles Markets, Cl A 136,000 1,964 John H. Harland 163,300 3,736 Kelly Services, Cl A 61,000 1,792 Rykoff-Sexton 52,100 996 Smucker (J.M.), Cl B 115,100 2,144 TCA Cable Television 3,000 101 ----------- Total Consumer Staples 20,195 ----------- ENERGY (5.6%) Giant Industries 44,700 648 Monterey Resources 118,500 1,866 Pittston Minerals Group 73,400 1,009 Quaker State 255,400 3,863 ----------- Total Energy 7,386 ----------- FINANCIALS (10.1%) Banco Latinamericano de Exportaciones 46,600 2,196 Bank United, Cl A 28,700 997 GCR Holdings 7,800 209 Interwest Bancorp 26,700 935 IPC Holdings 79,300 2,022 Klamath First Bancorp 61,500 1,138 Lawyers Title 43,800 788 National Bancorp of Alaska 14,400 1,130 Seacoast Banking of Florida 49,000 1,286 West Coast Bancorp 40,625 1,016 Willis Corroon Public Limited 132,900 1,495 ----------- Total Financials 13,212 ----------- HEALTH CARE (8.9%) Bindley Western Industries 75,600 1,663
47 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- HEALTH CARE--CONTINUED Chemed 26,300 $ 960 Invacare 117,000 2,516 Morrison Health Care 103,100 1,675 Vital Signs 101,000 2,007 West Company 96,100 2,835 ----------- Total Health Care 11,656 ----------- TECHNOLOGY (3.0%) Methode Electronics, Cl A 231,200 3,902 ----------- TRANSPORTATION (4.3%) Arnold Industries 107,300 1,797 Knightsbridge Tankers Limited* 50,000 1,231 Sea Containers 127,200 2,544 ----------- Total Transportation 5,572 ----------- UTILITIES (5.7%) Eastern Enterprises 12,800 442 Enron Global Power & Pipelines 12,800 422 Minnesota Power & Light 65,300 1,894 Northwest Natural Gas 39,050 952 TNP Enterprises 56,000 1,232 United Water Resources 74,100 1,334 Wicor 33,900 1,246 ----------- Total Utilities 7,522 ----------- Total Common Stocks (Cost $117,054) 124,688 ----------- PREFERRED STOCKS (1.9%) PRECIOUS METALS (1.9%) Coeur D'Alene Mines 151,100 2,512 ----------- Total Preferred Stocks (Cost $2,502) 2,512 ----------- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (3.7%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $4,900,504 (collateralized by FHLMC obligation, total par value $5,062,244, 6.092%, 10/01/32, market value: $4,996,199) $ 4,898 $ 4,898 ----------- Total Repurchase Agreements (Cost $4,898) 4,898 ----------- Total Investments (100.8%) (Cost $124,454) 132,098 ----------- OTHER ASSETS AND LIABILITIES, NET (-0.8%) (1,049) ----------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 11,836,719 outstanding shares of beneficial interest 121,332 Undistributed net investment income 316 Accumulated net realized gain on investments 1,757 Net unrealized appreciation on investments 7,644 ----------- Total Net Assets (100.0%) $ 131,049 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.07 ----------- -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 48 - -------------------------------------------------------------------------- CAPITAL GROWTH FUND
- -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- COMMON STOCK (88.6%) BASIC MATERIALS (4.7%) Aluminum Company of America 117,500 $ 8,651 Air Products & Chemicals 27,100 2,107 Fort Howard* 179,000 8,223 Hercules 228,800 10,725 Monsanto 265,100 11,664 Morton International 198,000 6,386 Potash of Saskatchewan 54,100 4,443 Praxair 123,900 6,520 W.R. Grace 67,500 3,527 ---------- Total Basic Materials 62,246 ---------- CAPITAL GOODS (13.9%) Allied Signal 361,100 27,714 Avery Dennison 62,300 2,344 Deere 163,000 8,333 Emerson Electric 285,000 15,390 Fluor 57,500 3,040 General Electric 688,700 41,580 General Signal 311,700 13,130 Keystone International 54,400 1,775 Lockheed Martin 96,000 8,988 McDonnell Douglas 58,200 3,747 Molten Metal Technology* 243,500 1,735 Pall 140,000 3,308 Rockwell International 171,400 11,055 Thomas & Betts 34,064 1,733 Tyco International 359,100 22,803 United Technologies 164,400 13,214 United Waste Systems* 8,700 334 USA Waste Services* 112,900 4,093 Waste Management 21,000 667 Wheelabrator Technologies 135,900 1,750 ---------- Total Capital Goods 186,733 ---------- COMMUNICATION SERVICES (1.6%) Airtouch Communications* 12,700 354 - -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- BellSouth 71,700 $ 3,253 Ericsson Telephone ADR* 263,800 9,398 GTE 196,000 8,649 ---------- Total Communication Services 21,654 ---------- CONSUMER CYCLICALS (8.4%) American Stores 157,900 7,184 Borders Group* 6,700 146 Carnival 282,300 10,727 Costco* 211,100 7,125 CUC International* 291,700 6,709 Federated Department Stores* 309,400 11,448 Ford Motor 82,100 3,079 Fruit of the Loom* 90,400 3,153 Gannett 44,500 4,116 Hollinger International 64,200 714 Home Depot 244,432 15,399 Intimate Brands 190,900 4,081 ITT* 33,400 1,991 Lear* 332,100 12,703 Marriott 27,100 1,565 Mattel 348,500 10,411 McGraw-Hill 35,900 1,961 Office Depot* 407,400 7,028 TJX 9,800 470 Tribune 46,900 2,028 ---------- Total Consumer Cyclicals 112,038 ---------- CONSUMER STAPLES (11.7%) American Standard* 27,700 1,388 Avon Products 276,600 17,633 Colgate-Palmolive 24,400 1,513 CPC International 37,800 3,251 CVS 360,600 17,264 Dial 28,300 474 Gillette 171,817 15,270 Kimberly Clark 101,400 5,083 JP Foodservice* 132,900 3,854 Nabisco Holdings, Cl A 30,700 1,216
49 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- CONSUMER STAPLES--CONTINUED PepsiCo 12,400 $ 456 Philip Morris 574,650 25,285 Ralston Purina Group 61,500 5,243 RJR Nabisco 105,600 3,419 Safeway* 259,300 11,669 Sara Lee 138,700 5,669 Sysco 335,700 11,708 Tele-Communications, Cl A* 375,800 5,684 Time Warner 57,500 2,674 Unilever ADR 12,400 2,403 Viacom, Cl B* 321,021 9,530 Walt Disney 55,366 4,533 Wendy's International 53,200 1,244 William Wrigley Jr. 11,300 670 ---------- Total Consumer Staples 157,133 ---------- ENERGY (5.7%) Amoco 66,500 5,943 British Petroleum ADR 53,500 7,751 Dresser Industries 186,200 6,377 Halliburton 142,100 10,995 Kerr-McGee 49,200 3,186 Mobil 138,200 19,331 Royal Dutch Petroleum, ADR 26,800 5,233 Schlumberger 40,700 4,848 Tosco 88,100 2,874 Union Pacific Resources Group 330,358 9,539 ---------- Total Energy 76,077 ---------- FINANCIALS (12.9%) American International Group 76,350 10,336 BankAmerica 126,300 14,761 Bank of New York 82,600 3,521 Capital One Financial 36,400 1,169 Chase Manhattan Bank 314,200 29,692 Citicorp 10,100 1,155 Conseco 19,100 764 Cullen/Frost Bankers 23,900 941 - -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- Dean Witter Discover 50,800 $ 2,096 FHLMC 221,100 7,296 FNMA 206,100 8,991 First Union 59,300 5,092 First USA 267,800 13,256 GCR Holdings 60,000 1,605 General Re 53,500 9,376 Great Western Financial 191,900 9,307 Hartford Financial Services Group 266,800 20,810 Nationsbank 45,040 2,643 Norwest 24,400 1,305 PMI Group 104,100 5,713 Sphere Drake Holdings 214,900 1,907 Summit Bancorp 43,900 2,168 Travelers 160,296 8,796 Washington National 354,600 9,929 Wells Fargo 2,500 659 ---------- Total Financials 173,288 ---------- HEALTH CARE (13.6%) Alza, Cl A* 7,900 233 American Home Products 427,000 32,559 Amgen* 71,200 4,762 Baxter International 173,100 9,131 Becton Dickinson 19,300 951 Boston Scientific* 83,111 4,436 Bristol-Myers Squibb 276,800 20,310 Columbia/HCA Healthcare 493,196 18,063 Eli Lilly 107,400 9,988 Healthsouth* 467,000 10,683 Horizon/CMS Healthcare* 50,000 913 Johnson & Johnson 386,888 23,165 Medpartners* 413,600 7,858 Medtronic 22,400 1,658 Merck 196,082 17,623 Pacificare Health Systems, Cl B* 39,200 3,107 Schering Plough 89,400 8,113 Tenet Healthcare* 222,800 6,127
50 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- HEALTH CARE--CONTINUED Warner Lambert 30,900 $ 3,113 ---------- Total Health Care 182,793 ---------- TECHNOLOGY (12.7%) Atmel* 50,900 1,463 Automatic Data Processing 44,500 2,186 Cadence Design Systems* 28,000 931 Ceridian* 119,000 4,373 Cisco Systems* 243,600 16,504 Compaq Computer* 13,800 1,494 Eastman Kodak 137,200 11,370 First Data 390,100 15,604 Hewlett Packard 112,600 5,799 IBM 115,600 9,999 Intel 154,900 23,467 Lucent Technologies 136,131 8,661 Microsoft* 185,100 22,952 Motorola 163,300 10,839 Oracle* 165,450 7,714 Scientific-Atlanta 644,900 11,689 Xerox 231,600 15,691 ---------- Total Technology 170,736 ---------- TRANSPORTATION (1.0%) Burlington Northern Santa Fe 102,800 8,532 Delta Air Lines 21,000 1,969 Union Pacific 39,500 2,676 ---------- Total Transportation 13,177 ---------- UTILITIES (0.4%) Consolidated Natural Gas 23,700 1,259 Enron 64,000 2,608 Sonat 27,100 1,558 ---------- Total Utilities 5,425 ---------- Total Common Stocks (Cost $982,524) 1,161,300 ---------- - -------------------------------------------------------------------------------- VALUE SHARES (000) - -------------------------------------------------------------------------------- PREFERRED STOCKS (1.7%) BASIC MATERIALS (0.2%) International Paper, CV to .9259 Shares 45,000 $ 2,278 ---------- FINANCIALS (0.2%) National Bank of Australia, CV to .3273 Shares* 74,600 2,014 ---------- TECHNOLOGY (1.2%) Microsoft, CV to 1 share 186,700 16,080 ---------- TRANSPORTATION (0.2%) Continental Air Finance Trust, CV to 2.0678 Shares* 28,500 2,230 ---------- Total Preferred Stocks (Cost $20,294) 22,602 ---------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) - -------------------------------------------------------------------------------- CONVERTIBLE BONDS (5.0%) Alza, CV to 12.987 Shares (A) 0.000%, 07/14/14 $ 11,500 5,103 Automatic Commercial Exchange Security, CV to 0.8333 Shares 6.500%, 05/15/00 123 2,958 Continental Airlines, CV to 16.559 Shares 6.750%, 04/15/06 3,600 4,707 Cuc International, CV to 32.6531 3.000%, 02/15/02 7,000 6,913 Home Depot, CV to 14.4665 Shares 3.250%, 10/01/01 9,000 9,630 Mariott LYON, (A) (B) 0.000%, 03/25/11 5,000 2,906 Molten Metal Technology, CV to 25.8065 Shares (B) 5.750%, 05/01/06 5,500 2,365 Roche, CV to 3.5626 Shares (A) 0.000%, 05/06/12 19,000 7,648
CAPITAL GROWTH FUND CONVERTIBLE BONDS--CONTINUED Times Mirror, CV to 5.8280 Shares (A) (B) 0.000%, 04/15/17 $ 10,000 $ 3,925 U.S. Filter, CV to 25.3164 Shares, Callable 12/15/99 @ 101.8 4.500%, 12/15/01 5,200 5,298
51 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- USA Waste Services, CV to 35.3243 Shares 5.000%, 03/01/06 2,350 3,243 USA Waste Services, CV to 22.9594 Shares, Callable 02/01/2000 @101.6 4.000%, 02/01/02 3,000 3,116 WMX Technologies, CV to 26.078 Shares 2.000%, 01/24/05 9,500 8,752 ---------- Total Convertible Bonds (Cost $66,837) 66,564 ---------- REPURCHASE AGREEMENTS (8.2%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $76,351,152 (collateralized by various FHLMC obligations, total par value $41,261,658, 6.092%-6.230%, 12/15/23-10/01/32; and various FNMA obligations, total par value $40,818,728, 0.000%, 01/01/26-04/25/27: total market value $77,842,108) 76,316 76,316 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $33,282,808 (collateralized by various FHLMC obligations, total par value $25,236,419, 5.500%-9.000%, 01/01/00-06/01/26; and various FNMA obligations, total par value $37,520,630, 5.500%-9.500%, 04/01/01-04/01/27: total market value $34,062,576) $ 33,267 $ 33,267 ---------- Total Repurchase Agreements (Cost $109,583) 109,583 ---------- - -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- Total Investments (101.5%) (Cost $1,179,238) 1,360,049 ---------- OTHER ASSETS AND LIABILITIES, NET (-1.5%) (19,508) ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 71,924,416 outstanding shares of beneficial interest 807,086 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 14,515,982 outstanding shares of beneficial interest 167,543 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 2,456,856 outstanding shares of beneficial interest 34,522 Undistributed net investment income 3,569 - -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS:--CONTINUED Accumulated net realized gain on investments $ 147,010 Net unrealized appreciation on investments 180,811 ---------- Total Net Assets (100.0%) $1,340,541 ---------- ---------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 15.09 ---------- ---------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 15.06 ---------- ----------
52 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- VALUE (000) - -------------------------------------------------------------------------------- Maximum Offering Price Per Share -- Investor Class ($15.06 DIVIDED BY 96.25%) $ 15.65 ---------- ---------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 14.96 ---------- ----------
- -------------------------------------------------------------------------- BALANCED FUND
- ------------------------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------------------------ COMMON STOCK (51.7%) BASIC MATERIALS (2.7%) Air Products & Chemicals 1,900 $ 148 Aluminum Company of America 7,800 574 Fort Howard* 12,000 551 Hercules 15,500 727 Monsanto 19,400 854 Morton International 13,900 448 Potash of Saskatchewan 3,600 296 Praxair 8,300 437 W.R. Grace 7,300 381 ------- Total Basic Materials 4,416 ------- CAPITAL GOODS (8.6%) Allied Signal 27,800 2,134 Avery Dennison 8,200 309 Deere 11,600 593 Emerson Electric 20,500 1,107 Fisher Scientific International 5,000 181 Fluor 4,000 211 General Electric 50,100 3,025 General Signal 20,600 868 Keystone International 11,800 385 Lockheed Martin 7,000 655 McDonnell Douglas 6,600 425 Molten Metal Technology* 19,100 136 Pall 9,500 224 Rockwell International 12,500 806 Thomas & Betts 2,300 117 Tyco International 26,100 1,657 United Technologies 11,900 956 United Waste Systems* 400 15 USA Waste Services* 7,100 257 Waste Management 1,500 48 ------- Total Capital Goods 14,109 ------- COMMUNICATION SERVICES (1.2%) Airtouch Communications* 8,600 240 BellSouth 8,100 368 Ericsson Telephone ADR* 19,200 684 - ------------------------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------------------------ GTE 15,900 $ 702 ------- Total Communication Services 1,994 ------- CONSUMER CYCLICALS (4.7%) American Standard* 2,000 100 Carnival 20,600 783 Costco* 14,200 479 CUC International* 21,200 488 Federated Department Stores* 21,000 777 Ford Motor 5,600 210 Fruit of the Loom* 8,600 300 Gannett 3,000 277 Home Depot 19,200 1,210 Intimate Brands 12,900 276 ITT* 2,400 143 Lear* 22,700 868 Marriott 1,700 98 Mattel 21,950 656 McGraw-Hill 2,900 158 Office Depot* 25,800 445 Tribune 10,000 432 ------- Total Consumer Cyclicals 7,700 ------- CONSUMER STAPLES (7.2%) American Stores 10,700 487 Avon Products 19,800 1,262 Colgate-Palmolive 1,600 99 CPC International 2,600 224 CVS 25,700 1,230 Dial 1,900 32 Gillette 12,548 1,115 JP Foodservice* 11,900 345 Kimberly Clark 9,000 451 Nabisco Holdings, Cl A 1,200 48 PepsiCo 900 33 Philip Morris 41,800 1,839 Ralston Purina Group 4,500 384 RJR Nabisco 7,800 253 Safeway* 21,200 954 Sara Lee 9,400 384
54 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------------------------ CONSUMER STAPLES--CONTINUED Sysco 24,500 $ 854 Tele-Communications, Cl A* 27,100 410 Time Warner 4,200 195 Unilever ADR 900 174 Viacom, Cl B* 20,944 622 Walt Disney 3,395 278 Wendy's International 6,900 161 ------- Total Consumer Staples 11,834 ------- ENERGY (3.4%) Amoco 4,800 429 British Petroleum ADR 3,900 565 Dresser Industries 13,300 456 Halliburton 11,300 874 Kerr-McGee 7,100 460 Mobil 8,900 1,245 Royal Dutch Petroleum ADR 1,900 371 Schlumberger 2,800 334 Tosco 5,900 192 Union Pacific Resources Group 21,922 633 ------- Total Energy 5,559 ------- FINANCIALS (7.8%) American International Group 5,200 704 Bank of New York 5,600 239 BankAmerica 9,100 1,064 BB&T 8,600 344 Capital One Financial 2,600 84 Chase Manhattan Bank 23,400 2,211 Citicorp 700 80 Conseco 1,400 56 Cullen/Frost Bankers 1,900 75 Dean Witter Discover 3,700 153 FHLMC 16,200 535 FNMA 13,400 585 First Union 4,300 369 First USA 18,700 926 GCR Holdings 7,000 187 General Re 3,600 631 - ------------------------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------------------------ Great Western Financial 13,900 $ 674 Hartford Financial Services Group 19,500 1,521 Norwest 5,500 294 PMI Group 7,600 417 Sphere Drake Holdings 21,000 186 Summit Bancorp 3,000 148 Travelers 11,133 611 U.S. Bancorp 700 43 Washington National 19,500 546 ------- Total Financials 12,683 ------- HEALTH CARE (7.9%) American Home Products 28,400 2,165 Amgen* 6,500 435 Baxter International 12,600 665 Becton Dickinson 1,300 64 Boston Scientific* 5,910 315 Bristol-Myers Squibb 20,300 1,490 Columbia/HCA Healthcare 33,310 1,220 Healthsouth* 32,868 752 Johnson & Johnson 28,100 1,682 Eli Lilly 7,800 725 Medpartners* 27,600 524 Medtronic 1,600 118 Merck 14,200 1,276 Pacificare Health Systems, Cl B* 3,400 269 Schering Plough 6,600 599 Tenet Healthcare* 15,000 412 Warner Lambert 2,300 232 ------- Total Health Care 12,943 ------- TECHNOLOGY (7.4%) Atmel* 3,600 103 Automatic Data Processing 2,270 112 Cadence Design Systems* 9,000 299 Ceridian* 6,300 232 Cisco Systems* 16,400 1,111 Compaq Computer* 600 65 Eastman Kodak 10,000 829 First Data 28,000 1,120
55 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------ SHARES VALUE (000) - ------------------------------------------------------------------------------ TECHNOLOGY--CONTINUED Hewlett Packard 7,900 $ 407 IBM 7,800 675 Intel 11,500 1,742 Lucent Technologies 9,214 586 Microsoft* 12,200 1,513 Motorola 11,000 730 Oracle* 10,900 508 Scientific-Atlanta 42,300 767 Xerox 18,200 1,233 ------- Total Technology 12,032 ------- TRANSPORTATION (0.6%) Burlington Northern Santa Fe 7,400 614 Delta Air Lines 1,400 131 Union Pacific 2,800 190 ------- Total Transportation 935 ------- UTILITIES (0.2%) Consolidated Natural Gas 1,500 80 Enron 4,200 171 Sonat 1,800 103 ------- Total Utilities 354 ------- Total Common Stocks (Cost $72,954) 84,559 ------- PREFERRED STOCKS (1.1%) AIR TRANSPORTATION (0.2%) Continental Airline Financial (B) 5,000 391 ------- BANKS (0.2%) National Bank of Australia, CV to 0.3273 shares* 10,000 270 ------- TECHNOLOGY (0.7%) Microsoft, CV to 1 share 12,500 1,077 ------- Total Preferred Stocks (Cost $1,573) 1,738 -------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- CORPORATE OBLIGATIONS (23.1%) American General Finance 6.875%, 07/01/99 $ 1,000 $ 1,007 Aristar 6.750%, 05/15/99 1,500 1,507 Associates of North America, MTN 6.650%, 08/30/99 750 752 AT&T Capital, MTN 6.920%, 04/29/99 2,250 2,261 Bear Stearns 7.000%, 03/01/07 1,900 1,853 Ford Capital 9.500%, 06/01/10 1,350 1,558 General Electric Capital 6.660%, 05/01/18 1,000 1,003 General Motors Acceptance 7.125%, 05/01/01 1,900 1,914 6.750%, 11/04/04 1,500 1,459 Homeside Lending, MTN 6.875%, 05/15/00 2,000 1,998 Household Finance, MTN 7.150%, 06/15/00 1,000 1,010 International Lease Finance 6.700%, 04/30/99 1,900 1,910 Lockheed Martin 6.550%, 05/15/99 1,000 1,001 Marriott International, (A) (B) 0.000%, 03/25/11 1,000 581 Mascotech, Callable 12/22/96 @ 103 4.500%, 12/15/03 500 445 Merrill Lynch, MTN 6.640%, 04/09/99 1,500 1,506 Morgan Stanley Group 6.875%, 03/01/07 1,000 974 Philip Morris 7.250%, 09/15/01 2,100 2,108 6.800%, 12/01/03 500 488 7.500%, 04/01/04 1,000 1,005
56 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- CORPORATE OBLIGATIONS--CONTINUED RHG Finance 8.875%, 10/01/05 $ 1,500 $ 1,622 Salomon 6.500%, 03/01/00 2,500 2,478 6.750%, 02/15/03 1,150 1,118 Service International 7.375%, 04/15/04 1,750 1,772 SunAmerica 6.200%, 10/31/99 2,000 1,985 US West Capital Funding 7.300%, 01/15/07 2,500 2,484 -------- Total Corporate Obligations (Cost $37,869) 37,799 -------- CONVERTIBLE BONDS (2.5%) Alza, CV to 26.1840 Shares, Callable 05/01/00 @ 100 5.000%, 05/01/06 500 501 Automatic Commercial Exchange Security, CV to 0.8333 shares 6.500%, 05/15/00 9 215 Roche, CV to 3.5626 Shares (A) 0.000%, 05/06/12 1,000 403 Staples, CV to 30.303 Shares (B) 4.500%, 10/01/00 500 585 Time Warner Finance, CV to 7.7589 Shares (A) 0.000%, 06/22/13 900 411 U.S. Filter, CV to 25.3164 shares, Callable 12/15/99 @ 101.8 4.500%, 12/15/01 500 509 USA Waste Services, CV to 35.3243 Shares 5.000%, 03/01/06 355 490 WMX Technologies, CV to 26.078 shares 2.000%, 01/24/05 1,000 921 -------- - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- Total Convertible Bonds (Cost $3,864) $ 4,035 -------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (1.2%) FHLMC 8.000%, 06/01/02 $ 574 589 7.500%, 09/01/03 1,308 1,326 -------- Total U.S. Agency Mortgage-Backed Obligations (Cost $1,916) 1,915 -------- U.S. TREASURY OBLIGATIONS (10.6%) U.S. Treasury Bonds 7.500%, 11/15/16 3,000 3,163 8.125%, 08/15/19 7,800 8,775 6.625%, 02/15/27 3,450 3,324 U.S. Treasury Notes 6.750%, 04/30/00 2,000 2,020 -------- Total U.S. Treasury Obligations (Cost $17,245) 17,282 -------- REPURCHASE AGREEMENT (8.9%) Merrill Lynch 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $14,570,241 (collateralized by various GNMA obligations, total par value $26,629,425, 7.000%-13.250%, 04/20/00-11/20/22: total market value $14,856,427) 14,563 14,563 -------- Total Repurchase Agreement (Cost $14,563) 14,563 -------- Total Investments (99.1%) (Cost $149,984) 161,891 -------- OTHER ASSETS AND LIABILITIES, NET (0.9%) 1,546 --------
57 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 BALANCED FUND
- ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,674,232 outstanding shares of beneficial interest $131,876 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 501,289 outstanding shares of beneficial interest 5,143 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 509,658 outstanding shares of beneficial interest 5,720 Undistributed net investment income 781 Accumulated net realized gain on investments 8,010 Net unrealized appreciation on investments 11,907 -------- Total Net Assets (100.0%) $163,437 -------- -------- - ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.94 -------- -------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.99 -------- -------- Maximum Offering Price Per Share -- Investor Class ($11.99 DIVIDED BY 96.25%) $ 12.46 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1)(2) $ 11.90 -------- --------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. (2) REPRESENTS NAV ON LAST BUSINESS DAY -- MAY 30, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 58 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 EMERGING MARKETS EQUITY FUND
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS (84.7%) ARGENTINA (6.9%) Banco Frances del Rio de la Plata ADR* 16,000 $ 526 Capex, Cl A 33,700 324 Massalin Particulares, Cl B 38,800 231 Metrogas ADR 32,204 314 Quilmes Industrial 37,000 430 Transportadora de Gas del Sur ADR 33,000 417 YPF ADR, Cl D 16,000 480 ----------- Total Argentina 2,722 ----------- BRAZIL (4.3%) Makro Atacadista GDR 27,500 344 Souza Cruz 50,000 467 Telebras ADR 3,230 444 Votorantim Celelose Papel Receibos* 1,476,876 40 Unibanco 12,000 414 ----------- Total Brazil 1,709 ----------- CHILE (1.1%) Administradora de Fondos de Pensiones Provida ADR 21,500 441 ----------- COLOMBIA (1.6%) Banco de Colombia GDS 24,700 152 Banco Ganadero ADR 15,600 476 ----------- Total Colombia 628 ----------- CZECH REPUBLIC (0.5%) Komercni Banka GDR 8,400 204 ----------- ECUADOR (0.4%) La Cemento Nacional GDR 800 158 ----------- GREECE (5.3%) Greek Telecom 7,800 194 Hellas Can Packaging 25,500 467 Papastratos Cigarettes 15,400 316 Teletypos 130,000 533 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- Titan Cement Company 5,700 $ 568 ----------- Total Greece 2,078 ----------- HONG KONG (9.2%) China Hong Kong Photo 1,086,000 315 Esprit Asia Holdings 616,000 354 First Pacific 142,000 181 National Mutual Asia 358,000 390 Peregrine Investment Holdings 137,000 244 Peregrine Investment Warrants* 6,600 2 Road King Infrastructure* 400,000 390 Seoul Horizon Trust 17,000 212 Shenzhen Express* 700,000 235 Sinocan 920,000 365 South China Morning Post Holdings 460,000 442 Wing Hang Bank 108,000 514 ----------- Total Hong Kong 3,644 ----------- HUNGARY (1.4%) Egis* 6,000 353 Gedeon Richter GDR 2,500 207 ----------- Total Hungary 560 ----------- INDIA (4.5%) Hindalco GDR 6,700 221 India Cements GDR 54,000 124 Indian Aluminum GDR 15,800 58 Indian Aluminum GDS 15,300 57 Tata Electric GDR 210 71 Videsh Sanchar Nigam GDR 60,000 1,236 ----------- Total India 1,767 ----------- INDONESIA (8.8%) Budi Acid Jaya, F 185,000 228 Citra Marga Nusaphala 472,000 471 Dankos Laboratories, F 665,000 561 Indonesian Satellite ADR 13,500 403 Matahari Putra Prima 251,000 447 Modern Photo Film, F 150,000 546
59 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- INDONESIA--CONTINUED Tambang Timah, F 281,000 $ 451 Tempo Scan Pacific 164,000 351 ----------- Total Indonesia 3,458 ----------- ISRAEL (5.8%) Blue Square Stores* 57,300 587 ECI Telecommunications 22,000 509 Koor Industries ADR 20,300 355 Nice Systems ADR* 18,000 549 Orbotech* 10,000 279 ----------- Total Israel 2,279 ----------- MALAYSIA (3.4%) Aluminium of Malaysia 231,000 325 Edaran Otomobil 28,000 244 Petronas Dagangan 170,000 403 Southern Bank Warrants* 15,000 10 UMW Holdings 72,000 370 ----------- Total Malaysia 1,352 ----------- MEXICO (8.3%) Femsa, Cl B 106,000 562 Grupo Carso 66,000 375 Grupo Continental 167,750 418 Grupo Elektra GDR 21,100 401 Herdez, Cl B 1,035,000 458 Kimberly Clark, Cl A 95,500 331 Nacional de Drogas, Cl L 139,000 459 Telefonos de Mexico ADR 6,500 288 ----------- Total Mexico 3,292 ----------- PANAMA (1.1%) Banco Latinamericano de Exportaciones 9,000 424 ----------- PERU (2.1%) Cerveceria Backus & Johnston 356,240 320 CPT Telefoncia del Peru 15,000 381 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- Telefonica del Peru, Cl B 50,500 $ 125 ----------- Total Peru 826 ----------- PHILIPPINES (3.6%) Bacnotan Consolidated 135,600 250 Benpres GDR* 65,800 467 First Philippine Holdings 174,375 288 Philippine Long Distance 14,000 414 ----------- Total Philippines 1,419 ----------- PORTUGAL (2.5%) Banco Totta & Acores 21,700 309 Cimentos de Portugal 15,020 330 Portugal Telecom 600 23 Portugal Telecom ADR 8,200 316 ----------- Total Portugal 978 ----------- SINGAPORE (2.0%) Amtek Engineering 180,000 311 Elec & Eltek International 84,000 496 ----------- Total Singapore 807 ----------- SOUTH AFRICA (8.6%) Amalgated Banks of South Africa 39,642 245 Anglo American Coal 3,260 216 Barlow 37,700 399 De Beers Consolidated Mines ADR 5,500 194 Gencor 44,000 193 Kersaf Investments 48,600 381 Liberty Life Association of Africa 14,000 392 Rembrandt Group 30,400 306 Richemont 26,500 360 Sasol 26,200 321 Suncrush 181,000 387 ----------- Total South Africa 3,394 ----------- SOUTH KOREA (1.5%) Pohang Iron & Steel ADR 21,000 609 -----------
60 - --------------------------------------------------------------------------
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- THAILAND (1.7%) K.R. Precision, F 46,500 $ 324 Nation Publishing 120,000 344 ----------- Total Thailand 668 ----------- TURKEY (0.1%) Dogan Holding* 2,800,000 60 ----------- Total Foreign Common Stocks (Cost $31,409) 33,477 ----------- FOREIGN PREFERRED STOCKS (6.2%) BRAZIL (6.2%) Banco Bradesco 42,150,000 336 Banco Itau SA 800,000 411 Brahma 440,000 319 Cemig 2,800,000 128 Centrais Eletricas de Santa Catarina, Cl B 103,000 124 Globex Utilidades 15,500 235 Lojas Renner 7,800,000 452 Multibras Eletrodomes* 228,400 233 Votorantim Celulose Papel* 7,500,000 203 ----------- Total Foreign Preferred Stocks (Cost $2,386) 2,441 -----------
-------------------------------------------------------------------------------- FACE AMOUNT (G) (000) -------------------------------------------------------------------------------- FOREIGN CONVERTIBLE BOND (0.4%) TURKEY (0.4%) Medya Holdings Int'l 10.000%, 06/28/01 $ 200 160 ----------- Total Foreign Convertible Bond (Cost $175) 160 ----------- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- TIME DEPOSIT (7.6%) Cayman Island 5.250%, 06/02/97 $ 3,000 $ 3,000 ----------- Total Time Deposit (Cost $3,000) 3,000 ----------- Total Investments (98.9%) (Cost $36,970) 39,078 ----------- OTHER ASSETS AND LIABILITIES, NET (1.1%) 417 ----------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 3,660,064 outstanding shares of beneficial interest 37,181 Undistributed net investment income 144 Accumulated net realized gain on investments and foreign currency transactions 62 Net unrealized appreciation on investments 2,108 ----------- Total Net Assets (100.0%) $ 39,495 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.79 ----------- -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 61 - -------------------------------------------------------------------------- INTERNATIONAL EQUITY INDEX FUND
- ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ U.S. AND FOREIGN COMMON STOCKS (95.4%) AUSTRALIA (2.7%) Amcor 13,361 $ 88 Broken Hill Proprietary 20,656 297 Coles Myer 30,235 141 CRA 5,542 91 CSR 27,994 103 Lend Lease 4,481 89 Mount Isa Mines Holdings 42,910 64 National Australia Bank 13,886 199 Newscorp 33,881 150 Pacific Dunlop 28,455 79 Western Mining 20,202 131 Westpac Banking 36,880 200 ------- Total Australia 1,632 ------- AUSTRIA (1.6%) Bank of Austria 3,058 197 Creditanstalt Bankverein 3,535 209 Ea-Generali 343 85 Oest El Wirtsch, Cl A 2,245 161 OMV 1,715 218 Wienerberger Baustoff 401 82 ------- Total Austria 952 ------- BELGIUM (2.1%) Bekaert 30 18 Delhaize Freres 1,000 50 Electrabel 1,000 224 Fortis 1,000 194 Generale Banque 470 186 Groupe Bruxelles Lambert 700 112 Kredietbank 290 119 Petrofina 500 176 Royale Belge 175 50 Solvay, Cl A 125 75 Union Minere* 680 55 ------- Total Belgium 1,259 ------- - ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ DENMARK (1.6%) Carlsberg, Cl B 1,427 $ 84 D/S 1912, Cl B 6 209 D/S Svendborg, Cl B 4 200 Danisco 2,210 131 Novo Nordisk, Cl B 1,670 179 Sophus Berendsen, Cl B 251 38 Tele Danmark, Cl B 2,208 109 ------- Total Denmark 950 ------- FINLAND (0.8%) Merita* 25,000 85 Nokia, Cl K 2,300 150 Outokumpu Oy Akt, Cl A 3,100 61 Rauma 303 7 UPM-Kymmene 8,500 195 ------- Total Finland 498 ------- FRANCE (11.4%) Accor 847 117 Air Liquide 1,886 289 Alcatel Alsthom 2,238 242 Axa 4,748 284 Banque National Paris, Cl A 3,350 137 Bouygues 950 82 Carrefour 603 396 Cie Bancaire 710 78 Cie de Saint Gobain 2,265 312 Cie Financiara Paribas 958 62 Cie Generale des Eaux 2,045 251 Cie Generale des Eaux Warrants* 2,045 1 Compagnie de Suez 2,963 151 Elf Aquitaine 4,282 428 Elf Sanofi 2,573 223 Eridania Beghin-Say 1,209 169 Groupe Danone 1,764 265 Havas 1,300 87 L'Oreal 1,084 393 Lafarge Coppee 2,218 142
62 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ FRANCE--CONTINUED Legrand 950 $ 153 Louis Vuitton-Moet Hennessy 1,881 455 Lyonnaise des Eaux Dumez 1,650 162 Michelin, Cl B 2,844 155 Pernod-Ricard 2,179 104 Peugeot 1,790 177 Pinault-Printemps Redoute 400 168 Promodes 478 162 Rhone-Poulenc, Cl A 8,500 275 Schneider 3,877 186 Societe Generale 2,280 253 Total Compaigne, Cl B 4,470 408 Unibail 400 39 ------- Total France 6,806 ------- GERMANY (19.2%) Aachener & Munchener Bete 166 154 Allianz 5,080 1,085 BASF 15,100 561 Bayer 21,960 857 Bayerische Hypotheken und Wechselbank 9,900 316 Bayerische Vereinsbank 2,360 98 Biersdorf 3,340 179 Colonia Konzern 310 31 Daimler-Benz 13,630 1,053 Degussa 2,490 121 Deutsche Bank 14,620 811 Dresdner Bank Frankfurt 10,600 372 Heidelberger Zement 2,490 235 Hochtief 260 11 Karstadt 625 219 Linde 391 271 Lufthansa 14,580 232 Man Muenchen 31 9 Mannesmann 853 349 Metro AG 3,063 333 Munchener Ruckvers 256 656 - ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ Preussag 11 $ 3 RWE 6,340 273 SAP 1,900 339 Schering 1,810 182 Siemens 14,340 811 Thyssen 1,301 294 Veba 12,660 720 Viag 683 310 Volkswagen 961 624 ------- Total Germany 11,509 ------- HONG KONG (1.9%) Cathay Pacific Airways 9,000 14 Cheung Kong Holdings 13,000 133 China Light & Power 15,000 75 Hang Seng Bank 10,200 122 Hong Kong Telecommunications 50,000 111 HSBC Holdings 13,068 396 Hutchison Whampoa 14,800 123 Sun Hung Kai Properties 6,600 81 Swire Pacific, Cl A 9,000 75 ------- Total Hong Kong 1,130 ------- ITALY (9.0%) Assicurazioni Generali 42,670 731 Banca Commerciale Italiana 33,500 66 Benetton Group 9,448 132 Credito Italiano 23,000 34 Edison 42,500 201 ENI 76,000 379 Fiat 139,000 456 Fiat Non-Convertible 42,000 74 Istituto Bancario san Paolo di Torino 42,091 265 Istituto Nazionale 323,919 447 Italgas 5,000 15 Mediobanca 30,950 176 Montedison* 134,680 82 Olivetti* 142,500 41
63 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ ITALY--CONTINUED Parmalat Finanziaria 102,800 $ 147 Pirelli 120,000 261 RAS 10,135 77 Sirti 19,500 112 Telecom Italia 265,000 730 Telecom Italia di Risp 63,000 138 Telecom Italia Mobile 195,802 575 Telecom Italia Mobile di Risp 154,164 269 ------- Total Italy 5,408 ------- JAPAN (23.5%) Ajinomoto 15,000 151 Asahi Bank 20,000 131 Asahi Chemical Industries 15,000 83 Asahi Glass 12,000 116 Bank of Tokyo-Mitsubushi 24,000 416 Bank of Yokohama 11,000 55 Bridgestone 9,000 203 Chiba Bank 12,000 62 Chiyoda 5,000 24 Citizen Watch 11,000 83 Cosmo Oil 12,000 55 Dai Nippon Printing 12,000 240 Daiei* 11,000 72 Daiwa Kosho Lease 5,000 38 Daiwa Securities 18,000 132 Ebara 8,000 116 Fanuc 900 32 Fuji Bank 24,000 309 Fuji Photo Film 5,000 194 Fujitsu 18,000 220 Furukawa Electric 15,000 89 Hankyu 2,000 10 Hitachi 32,000 341 Honda Motor 5,000 147 Industrial Bank of Japan 20,000 241 Ito Ham Foods 1,000 6 Ito Yokado 4,000 228 - ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ Itochu 31,000 $ 158 Japan Air Lines* 16,000 68 Japan Energy 11,000 28 Joyo Bank 14,300 70 Jusco 3,000 101 Kansai Electric Power 9,800 184 Kao 7,000 95 Kawasaki Steel 19,000 56 Kinki Nippon Railway 26,000 156 Kirin Brewery 15,000 148 Komatsu 13,000 98 Kubota 23,000 106 Kyocera 3,000 216 Marui 4,000 75 Matsushita Electric 18,000 339 Mitsubishi 21,000 247 Mitsubishi Chemical 16,000 49 Mitsubishi Electric 23,000 130 Mitsubishi Estate 5,000 68 Mitsubishi Heavy Industries 43,000 310 Mitsubishi Materials 35,000 136 Mitsubishi Trust & Banking 13,000 186 Mitsui 17,000 150 Mitsui Trust & Banking 13,000 98 Mitsukoshi 7,000 49 Murata Manufacturing 1,000 40 NEC 15,000 209 New Oji Paper 9,000 52 Nichido Fire & Marine Insurance 15,000 91 Nippon Express 5,000 39 Nippon Oil 16,000 81 Nippon Paper Industries* 1,000 5 Nippon Sharyo 5,000 32 Nippon Steel 39,000 114 Nippon Yusen 27,000 111 Nippondenso 7,000 175 Nissan Motor 32,000 212 NKK 24,000 47 Nomura Securities 19,000 225
64 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ JAPAN--CONTINUED Obayashi 13,000 $ 80 Odakyu Electric Railway 24,000 133 Olympus Optical 8,000 68 Osaka Gas 44,000 116 Sakura Bank 25,000 150 Sankyo 7,000 222 Sanyo Electric 4,000 17 Sega Enterprises 1,600 54 Sekisui Chemical 7,000 73 Sekisui House 7,000 69 Sharp 10,000 129 Shimizu 3,000 18 Shin-Etsu Chemical 7,000 176 Shizuoka Bank 9,000 87 Skylark 3,000 50 Sony 3,500 295 Sumitomo Bank 28,000 387 Sumitomo Chemical 20,000 83 Sumitomo Metal 26,000 66 Taisei 35,000 150 Takeda Chemical 15,000 380 Tobu Railway 15,000 67 Tohoku Electric Power 5,300 91 Tokai Bank 20,000 165 Tokio Marine & Fire Insurance 34,000 400 Tokyo Electric Power 15,900 303 Tokyo Gas 26,000 66 Tokyu 10,000 57 Toppan Printing 11,000 151 Toray 24,000 163 Tostem 3,000 80 Toto 7,700 87 Toyo Seikan Kaisha 3,300 63 Toyoda Automatic Loom 4,000 87 Toyota Motor 31,000 889 Yamaichi Securities 15,000 43 Yamanouchi Pharmaceutical 1,000 25 - ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ Yasuda Trust & Banking 5,000 $ 15 ------- Total Japan 14,103 ------- NETHERLANDS (3.1%) ABN-Amro Holdings 10,668 197 Akzo Nobel 470 63 ING Groep 5,816 257 Koninklijke 3,789 132 Koninklijke Nederlanden Papierfabriek 960 20 Philips Electronics 2,550 139 Royal Dutch Petroleum 3,580 691 Unilever 1,065 205 Wolters Kluwer 1,479 178 ------- Total Netherlands 1,882 ------- NORWAY (1.2%) Bergesen, Cl A 4,150 96 Hafslund Nycomed, Cl B 5,900 33 Kvaerner 2,000 115 Norsk Hydro 7,825 391 Nycomed Asa, Cl B 2,300 31 Uni Storebrand* 9,987 66 ------- Total Norway 732 -------
INTERNATIONAL EQUITY INDEX FUND SPAIN (4.7%) Argentaria Bancaria de Espana 2,916 145 Autopistas CESA 6,347 78 Banco Bilbao Vizcaya 4,571 324 Banco Central Hispano 4,255 137 Banco de Santander 3,510 299 Dragados Construccion 2,565 50 Empresa Nacional de Electricidad 5,473 418 Fomento de Construcciones Contratas 598 67 Gas Natural 828 158 Iberdola 16,206 199 Mapfre 1,018 55 Repsol 6,279 263 Telefonica de Espana 19,933 575
65 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ SPAIN--CONTINUED Union Electrica Fenosa 7,629 $ 68 ------- Total Spain 2,836 ------- SWEDEN (2.0%) Asea, Cl A 12,000 162 Astra, Cl A 14,666 237 Diligentia* 1,350 15 Electrolux, Cl B 1,100 66 Ericsson, Cl B 8,100 284 Granges* 550 7 Skandinaviska Enskilda Banken 7,700 79 Skanska Rights* 1,800 -- Skanska, Cl B 1,800 72 Stora Kopparbergs Bergslags, Cl A 5,000 74 Svenska Cellulosa, Cl B 4,000 84 Swedish Match 4,500 15 Volvo, Cl B 3,950 109 ------- Total Sweden 1,204 ------- SWITZERLAND (2.3%) Nestle 222 276 Novartis 244 331 Roche Holdings, Bearer 7 92 Roche Holdings, Genusshein 34 302 Schweizerische Bankgesellschaft 170 186 Swiss Bank* 875 210 ------- Total Switzerland 1,397 ------- UNITED KINGDOM (8.2%) Abbey National 8,291 119 Barclays Bank 14,416 280 Bass 9,466 123 BAT Industries 22,460 201 BG 20,778 69 Blue Circle Industries 12,797 88 British Petroleum 41,753 495 British Telecommunications 20,475 148 BTR 43,929 143 Cable & Wireless 22,390 183 - ------------------------------------------------------------------------------ VALUE SHARES (000) - ------------------------------------------------------------------------------ Centrica* 20,778 $ 22 Energy Group* 9,677 87 General Electric 21,236 121 Glaxo Wellcome 19,999 399 Grand Metropolitan 23,365 217 Great Universal Stores 7,352 78 Guinness 18,085 168 Hanson 12,096 62 HSBC Holdings 7,895 245 Imperial Chemical 11,454 152 Marks & Spencer 40,514 337 National Power 9,177 83 Reuters 13,125 147 RMC Group 2,799 42 RTZ 13,785 236 Sainsbury, J. 11,344 65 Smithkline Beecham 20,334 350 Unilever 6,230 167 Vodafone Group 22,646 100 ------- Total United Kingdom 4,927 ------- UNITED STATES (0.1%) Millennium Chemicals* 1,382 27 ------- Total U.S. and Foreign Common Stocks (Cost $48,937) 57,252 ------- FOREIGN PREFERRED STOCKS (1.3%) FINLAND (0.3%) Nokia, Cl A 2,400 157 ------- GERMANY (0.9%) RWE 3,730 131 SAP 1,380 251 Volkswagen 297 146 ------- Total Germany 528 ------- ITALY (0.1%) Fiat 42,800 72 ------- Total Foreign Preferred Stocks (Cost $571) 757 -------
66 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ Total Investments (96.7%) (Cost $49,508) $58,009 ------- OTHER ASSETS AND LIABILITIES, NET (3.3%) 1,999 ------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,717,839 outstanding shares of beneficial interest 43,186 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 496,770 outstanding shares of beneficial interest 4,962 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 80,102 outstanding shares of beneficial interest 829 Undistributed net investment income 220 Accumulated net realized gain on investments and foreign currency transactions 2,335 - ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ Net unrealized appreciation on investments $ 8,501 Net unrealized depreciation on foreign currency and translation of other assets and liabilities in foreign currency (25) ------- Total Net Assets (100.0%) $60,008 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.34 ------- ------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.26 ------- ------- Maximum Offering Price Per Share -- Investor Shares ($11.26 DIVIDED BY 96.25%) $ 11.70 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 11.24 ------- -------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 67 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 INTERNATIONAL EQUITY FUND
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS (97.3%) ARGENTINA (0.9%) YPF ADR, Cl D 160,000 $ 4,800 ----------- AUSTRALIA (2.0%) Australia & New Zealand Bank Group 350,000 2,396 Faulding (F.H.) &Co. 405,124 2,412 QBE Insurance 922,000 5,486 ----------- Total Australia 10,294 ----------- BRAZIL (2.8%) Souza Cruz 838,000 7,827 Telecom Brasileiras ADR 47,800 6,567 ----------- Total Brazil 14,394 ----------- CANADA (3.3%) Bank of Montreal 71,991 2,744 Bombardier, Cl B 201,000 4,220 CAE 436,729 3,431 Royal Bank of Canada 57,000 2,468 Suncor 158,000 3,918 ----------- Total Canada 16,781 ----------- DENMARK (0.9%) Sophus Berendsen, Cl B 29,550 4,471 ----------- FINLAND (4.3%) Cultor, Ser 2 82,400 4,129 Finnlines 100,000 2,777 Metra, Cl B 195,000 5,529 Nokia ADR, Cl A 41,000 2,706 Rauma 72,200 1,683 UPM - Kymmene 208,000 4,774 ----------- Total Finland 21,598 ----------- FRANCE (9.7%) Accor 34,000 4,708 Christian Dior 30,850 4,832 Cie Generale d'Industrie et de Participations 23,000 6,524 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- Credit Local de France 55,000 $ 5,131 Lafarge Coppee 38,000 2,427 Lagardere Groupe 158,000 4,643 SGS-Thomson Microelectronics ADR* 66,000 5,511 Technip 153,113 15,714 ----------- Total France 49,490 ----------- GERMANY (3.3%) Siemens 48,000 2,713 Veba 79,600 4,525 Volkswagen 14,300 9,288 ----------- Total Germany 16,526 ----------- GREECE (2.0%) Greek Telecom 411,840 10,253 ----------- HONG KONG (1.2%) HSBC Holdings 192,645 5,843 ----------- HUNGARY (0.6%) Gedeon Richter 32,000 2,656 Gedeon Richter GDR 3,000 249 ----------- Total Hungary 2,905 ----------- INDONESIA (0.5%) Modern Photo Film, F 736,500 2,681 ----------- ISRAEL (2.1%) ECI Telecommunications 319,000 7,377 Technomatrix Technologies 105,500 3,244 ----------- Total Israel 10,621 ----------- ITALY (3.1%) Banca Popolare di Milano 500,000 2,686 ENI 933,000 4,655 Istituto Bancario san Paolo di Torino 450,002 2,831 Saipem 1,057,000 5,376 ----------- Total Italy 15,548 -----------
68 - --------------------------------------------------------------------------
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- JAPAN (8.8%) Canon 215,000 $ 5,448 FCC 97,000 2,516 Fuji Photo Film 139,000 5,385 Honda Motor 282,000 8,285 Sony 99,400 8,377 TDK 69,000 5,299 Terumo 546,000 9,615 ----------- Total Japan 44,925 ----------- MALAYSIA (0.9%) UMW Holdings 844,000 4,334 ----------- MEXICO (2.5%) Fomento Econo Mexicana, Cl B 1,676,000 8,906 Panamerican Beverage, Cl A 130,200 3,776 ----------- Total Mexico 12,682 ----------- NETHERLANDS (5.5%) Akzo Nobel 53,000 7,051 Hollandsche Beton Groep 28,658 6,590 ING Groep 327,938 14,486 ----------- Total Netherlands 28,127 ----------- NEW ZEALAND (1.0%) Fletcher Challenge Building Division 1,831,500 5,114 ----------- PANAMA (1.4%) Banco Latinamericano de Exportaciones 150,400 7,088 ----------- PERU (1.1%) CPT Telefoncia del Peru 109,000 2,766 Credicorp 124,449 2,816 ----------- Total Peru 5,582 ----------- PHILIPPINES (1.1%) Benpres GDR* 775,961 5,509 ----------- PORTUGAL (1.5%) Banco Espirito Santo 120,400 2,493 -------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- Portugal Telecom ADR 134,300 $ 5,171 ----------- Total Portugal 7,664 ----------- SINGAPORE (0.7%) Elec & Eltek International 599,000 3,534 ----------- SOUTH AFRICA (5.0%) Barlow 442,000 4,676 De Beers Consolidated Mines ADR 70,200 2,475 First National Bank 373,000 2,911 Gencor 1,048,000 4,599 Liberty Life Association of Africa 50,000 1,399 Rembrandt Group 446,000 4,494 Sasol 385,000 4,720 ----------- Total South Africa 25,274 ----------- SOUTH KOREA (3.4%) Pohang Iron & Steel 107,531 9,209 Samsung Electronics 29,590 2,897 Samsung Electronics Rights* 490 11 Sindo Ricoh 91,400 5,282 ----------- Total South Korea 17,399 ----------- SPAIN (3.4%) Corporacion Financiera Alba 49,000 5,391 Telefonica de Espana 414,000 11,946 ----------- Total Spain 17,337 ----------- SWEDEN (3.1%) Castellum AB* 130,000 906 Ericsson, Cl B 168,100 5,899 Skandia Forsakrings 250,000 8,822 ----------- Total Sweden 15,627 ----------- SWITZERLAND (6.7%) Asea Brown Boveri 4,215 5,785 Nestle 9,000 11,194 Novartis, Registered 12,640 17,151 ----------- Total Switzerland 34,130 -----------
69
-------------------------------------------------------------------------------- VALUE SHARES (000) -------------------------------------------------------------------------------- UNITED KINGDOM (14.5%) Avis Europe* 2,500,000 $ 5,356 Bank of Ireland 769,715 8,327 Bass 400,000 5,187 BOC Group 163,000 2,735 Granada Group 315,000 4,464 Halma 1,196,000 3,442 London Forfaiting 1,763,200 11,577 Morgan Crucible 717,432 5,344 Powerscreen 513,100 5,232 Railtrack Group* 462,000 4,835 Reckit & Colman 554,000 7,791 Smithkline Beecham 306,484 5,270 Vodafone Group 980,000 4,343 ----------- Total United Kingdom 73,903 ----------- Total Foreign Common Stocks (Cost $429,604) 494,434 ----------- -------------------------------------------------------------------------------- FACE AMOUNT (000) -------------------------------------------------------------------------------- TIME DEPOSIT (2.8%) Cayman Island 5.250%, 06/02/97 $ 14,500 14,500 ----------- Total Time Deposit (Cost $14,500) 14,500 ----------- Total Investments (100.1%) (Cost $444,104) 508,934 ----------- OTHER ASSETS AND LIABILITIES, NET (-0.1%) (560) ----------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 35,898,515 outstanding shares of beneficial interest 399,733 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 786,012 outstanding shares of beneficial interest 9,162 -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 621,903 outstanding shares of beneficial interest $ 7,607 Undistributed net investment income 834 Accumulated net realized gain on investments and foreign currency transactions 26,202 Net unrealized appreciation on investments 64,830 Net unrealized appreciation on foreign currency and translation of other assets and liabilities in foreign currency 6 ----------- Total Net Assets (100.0%) $ 508,374 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.63 ----------- ----------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.58 ----------- ----------- Maximum Offering Price Per Share -- Investor Shares ($13.58 DIVIDED BY 96.25%) $ 14.11 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 13.47 ----------- -----------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 70 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 SUNBELT EQUITY FUND
- ------------------------------------------------------------------------------- VALUE SHARES (000) - ------------------------------------------------------------------------------- COMMON STOCKS (94.3%) BASIC MATERIALS (1.2%) Blount International 100,649 $ 4,152 Citation* 65,268 971 -------- Total Basic Materials 5,123 -------- CAPITAL GOODS (9.2%) Agco 145,197 4,628 American Buildings* 156,275 4,415 American Homestar* 156,914 3,138 Browning Ferris Industries 60,659 1,987 Greenfield Industries 143,198 3,723 Intermet 301,822 4,226 Maverick Tube* 126,699 3,833 Palm Harbor Homes* 126,814 3,583 Roper Industries 41,105 2,019 Tracor* 79,461 2,016 Watsco 164,769 4,778 -------- Total Capital Goods 38,346 -------- COMMUNICATION SERVICES (2.3%) Premiere Technologies* 162,964 4,380 U.S. Long Distance* 335,286 5,197 -------- Total Communication Services 9,577 -------- CONSUMER CYCLICALS (19.1%) Barnett* 251,979 5,607 Books-A-Million* 364,468 1,868 Central Parking 86,890 2,715 Claire's Stores 190,753 3,672 Dollar General 236,344 7,947 Family Dollar Stores 159,553 4,108 Heilig-Meyers 413,167 6,817 Home Depot 64,703 4,076 Miller Industries* 524,807 8,594 O'Charleys* 109,669 1,563 Pier 1 Imports 79,777 1,785 Play By Play Toys & Novelties* 90,204 1,409 Promus Hotel* 199,826 7,219 Rare Hospitality International* 221,310 3,486 - ------------------------------------------------------------------------------- VALUE SHARES (000) - ------------------------------------------------------------------------------- Richfood Holdings 275,860 $ 6,379 Stein Mart* 198,738 6,012 Tractor Supply* 169,673 3,478 Suburban Lodges of America* 119,666 2,513 -------- Total Consumer Cyclicals 79,248 -------- CONSUMER STAPLES (1.9%) Flowers Industries 179,497 3,164 Tyson Foods 224,809 4,609 -------- Total Consumer Staples 7,773 -------- ENERGY (21.7%) Anadarko Petroleum 74,294 4,681 BJ Services* 86,013 4,752 Baker Hughes 110,638 4,149 Cairn Energy USA* 70,547 833 Diamond Offshore Drilling* 122,095 8,684 Ensco International* 109,330 5,453 Global Industries* 264,743 5,824 Global Marine* 289,298 6,509 Nuevo Energy* 218,321 9,524 Oceaneering International* 104,407 1,775 Offshore Logistics* 167,668 3,039 Pride Petroleum Service* 365,188 8,125 Production Operators 80,518 5,385 St Mary Land & Exploration 79,777 2,533 Stone Energy* 288,296 8,072 Tidewater 126,926 5,347 Transocean Offshore 45,716 3,154 World Fuel Services 104,839 2,110 -------- Total Energy 89,949 -------- FINANCIALS (6.9%) AmSouth Bancorp 60,660 2,373 BB&T 21,029 841 CCB Financial 52,650 3,699 Central Fidelity Banks 28,307 828 Cullen/Frost Bankers 22,646 892 Equity Inns REIT 222,416 2,919 Fairfield Communities* 131,638 4,393
71 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------- VALUE SHARES (000) - ------------------------------------------------------------------------------- FINANCIALS--CONTINUED First Enterprise Financial Group* 161,692 $ 950 First Virginia Banks 16,176 906 Regions Financial 13,749 822 Texas Regional Bancshares, Cl A 44,300 1,384 Triad Guaranty* 122,286 4,249 Union Planters 62,171 2,938 Winston Hotels REIT 117,435 1,541 -------- Total Financials 28,735 -------- HEALTH CARE (9.7%) Beverly Enterprises* 487,197 6,882 Compdent* 186,165 3,374 Gulf South Medical Supply* 271,411 5,360 Healthsouth* 151,776 3,472 Owens & Minor Holding 197,426 2,493 Phycor* 255,733 7,320 Quorum Health Group* 241,231 8,534 Serologicals* 139,340 2,665 -------- Total Health Care 40,100 -------- SERVICE INDUSTRIES (5.5%) Billing Information Concepts* 40,440 1,173 Education Medical* 159,694 1,437 Norrell 240,634 7,760 Nova* 198,384 3,596 PMT Services* 343,137 5,490 Staffmark* 183,054 3,432 -------- Total Service Industries 22,888 -------- TECHNOLOGY (12.5%) Acxiom* 165,803 2,819 BDM International* 191,467 4,978 Benchmark Electronics* 136,047 4,779 Cybex Computer Products* 79,847 1,452 Harbinger* 155,395 4,817 Input/Output* 250,551 4,447 - ------------------------------------------------------------------------------- VALUE SHARES (000) - ------------------------------------------------------------------------------- National Data 133,001 $ 5,835 Nichols Research* 252,683 4,927 SCB Computer Technology* 342,063 7,867 SCI Systems* 5,905 384 Sterling Commerce* 240,417 7,994 Wandel & Goltermann Technologies* 135,258 1,691 -------- Total Technology 51,990 -------- TRANSPORTATION (4.3%) American Freightways* 388,181 5,338 Hunt J B Transportation Services 538,819 8,217 MTL* 85,327 1,963 USA Truck* 228,340 2,169 -------- Total Transportation 17,687 -------- Total Common Stocks (Cost $310,998) 391,416 -------- - ------------------------------------------------------------------------------- FACE AMOUNT (000) - ------------------------------------------------------------------------------- CONVERTIBLE BONDS (3.4%) Career Horizons, CV to 88.1340 Shares 7.000%, 11/01/02 $ 2,507 5,534 Pride Petroleum Services, CV to 81.6327 Shares 6.250%, 02/15/06 792 1,465 SCI Finance LLC, CV to 1.6617 Shares 37 4,247 Sci Systems, CV to 20.5128 Shares 5.000%, 05/01/06 2,059 3,009 -------- Total Convertible Bonds (Cost $13,110) 14,255 --------
72 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.8%) Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $3,328,353 (collateralized by U.S. Treasury Note, par value $3,373,000, 5.125%, 12/31/98: total market value $3,393,654) $ 3,327 $ 3,327 -------- Total Repurchase Agreement (Cost $3,327) 3,327 -------- Total Investments (98.5%) (Cost $327,435) 408,998 -------- OTHER ASSETS AND LIABILITIES, NET (1.5%) 6,157 -------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 28,714,327 outstanding shares of beneficial interest 292,778 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 2,151,656 outstanding shares of beneficial interest 21,236 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 437,822 outstanding shares of beneficial interest 5,505 - ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- Undistributed net investment income $ 39 Accumulated net realized gain on investments 14,034 Net unrealized appreciation on investments 81,563 -------- Total Net Assets (100.0%) $415,155 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 13.28 -------- -------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 13.06 -------- -------- Maximum Offering Price Per Share -- Investor Class ($13.06 DIVIDED BY 96.25%) $ 13.57 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1)(2) $ 13.00 -------- --------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. (2) REPRESENTS NAV ON LAST BUSINESS DAY -- MAY 30, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 73 - -------------------------------------------------------------------------- INVESTMENT GRADE TAX-EXEMPT BOND FUND
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- MUNICIPAL BONDS (102.3%) ARIZONA (1.7%) Northern Arizona University Revenue, RB, Callable 06/01/02 @ 101 (FGIC) 6.300%, 06/01/05 $ 2,770 $ 2,948 ------------ CALIFORNIA (4.2%) Los Angeles, California Participation Note, COP, Pre-Refunded 06/01/99 @ 102 (F) 7.000%, 06/01/09 3,765 4,039 Northern California, Power Agency, RB (AMBAC) 5.850%, 07/01/10 1,295 1,384 State University, California Public Works, RB, Pre-Refunded 10/01/02 @ 102 (F) 6.700%, 10/01/17 1,800 2,012 ------------ Total California 7,435 ------------ FLORIDA (12.2%) Hillsborough County, Capital Improvement Program, Ser B, RB, Callable 07/01/06 @ 102 (MBIA) 5.125%, 07/01/22 3,300 3,073 Okeechobee Correctional Facility, COP (AMBAC) 5.800%, 03/01/03 1,000 1,044 Orange County, Health Facilities Authority, RB (MBIA) 6.250%, 10/01/13 1,000 1,093 Reedy Creek, Improvement District Utility, Ser 1991-1, RB, Pre-Refunded 10/01/01 @ 101 (MBIA) (F) 6.500%, 10/01/16 2,000 2,169 - ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- State Board of Education, Capital Outlay, Ser C, GO, Pre-Refunded 06/01/02 @ 101 (F) 6.625%, 06/01/22 $ 1,950 $ 2,139 State Department of Natural Resources, Environmental Preservation 2000 Project, Ser A, RB, Callable 07/01/01 @ 102 (AMBAC) 6.750%, 07/01/13 2,000 2,164 Tampa, Allegany Health, RB, Pre-Refunded 12/01/99 @ 102 (FGIC) (F) 7.375%, 12/01/23 3,500 3,814 Tampa, Capital Improvement Program, Ser B, RB, Callable 10/01/98 @ 100 (E) 8.375%, 10/01/18 1,000 1,051 Volusia County, Health Facility Authority, Aces Pooled Hospital Program, RB, VRDN, (FGIC) (C) (D) 3.900%, 11/01/15 2,700 2,700 Volusia County, Master Lease Program, COP, Pre-Refunded 08/01/01 @ 102 (FSA) (F) 6.625%, 08/01/06 2,000 2,190 ------------ Total Florida 21,437 ------------ GEORGIA (5.7%) Cobb County, School District, GO 6.000%, 02/01/01 5,900 6,194 Murray County, School District, GO 4.800%, 04/01/00 1,150 1,160 4.875%, 10/01/00 1,200 1,214
74 - --------------------------------------------------------------------------
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- GEORGIA--CONTINUED State, GO 7.250%, 07/01/99 $ 1,305 $ 1,381 ------------ Total Georgia 9,949 ------------ HAWAII (3.1%) State, GO 5.750%, 01/01/07 5,150 5,421 ------------ ILLINOIS (3.6%) Chicago, Board of Education, GO (AMBAC) 6.750%, 12/01/09 1,000 1,132 Chicago, State Board of Education, GO (MBIA) 6.250%, 12/01/09 2,745 3,021 State Health Facilities Authority, Trinity Medical Center Project, RB, Callable 07/01/02 @ 102 (FSA) 7.000%, 07/01/12 2,000 2,189 ------------ Total Illinois 6,342 ------------ INDIANA (3.6%) Beech Grove, School Building, RB (MBIA) 6.250%, 07/05/16 2,265 2,464 Health Facilities Financing Authority, Community Hospitals of Indiana, RB, Pre-Refunded 07/01/01 @ 102 (MBIA) (F) 7.000%, 07/01/21 3,500 3,869 ------------ Total Indiana 6,333 ------------ MARYLAND (5.1%) Baltimore, Metropolitan District, GO, Callable 07/01/02 @ 102 5.900%, 07/01/04 1,000 1,067 - ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- Montgomery County Public Improvement, Ser A, GO 5.200%, 10/01/00 $ 5,725 $ 5,866 Montgomery County, Ser A, GO 5.100%, 04/01/99 2,000 2,032 ------------ Total Maryland 8,965 ------------ MASSACHUSETTS (4.8%) Boston, City Hospital Project, RB, Callable 08/15/00 @ 102 (FHA) 7.650%, 02/15/10 1,275 1,410 Commonwealth of Massachusetts, GO, VRDN (C) (D) 4.000%, 12/01/97 7,010 7,010 ------------ Total Massachusetts 8,420 ------------ NEBRASKA (1.2%) Omaha, Public Power & Electric Authority, Ser A, RB, Pre-Refunded 02/01/02 @ 101.50 (F) 6.500%, 02/01/17 2,000 2,180 ------------ NEW JERSEY (21.1%) Economic Development Authority, Water Facilities, Ser PJ-B, RB, VRDN (AMBAC) (C) (D) 3.750%, 11/01/25 7,000 7,000 State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/01 @ 100 (FSA) 4.900%, 09/01/01 3,750 3,793 State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/03 @ 100 (FSA) 5.400%, 09/01/02 7,000 7,218 5.500%, 09/01/03 13,000 13,478
75 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- NEW JERSEY--CONTINUED State, Transportation Anticipation Note, Ser A, RB, Callable 03/01/00 @ 100 (FSA) 4.800%, 09/01/00 $ 5,500 $ 5,546 ------------ Total New Jersey 37,035 ------------ NEW YORK (20.2%) New York, Ser B, GO 5.600%, 08/15/06 1,500 1,513 New York, Ser J, GO (MBIA) 6.000%, 02/15/05 3,000 3,194 State, Pre-Refunded 03/01/00 @ 102 (AMBAC) (F) 7.100%, 03/01/20 1,650 1,794 State Dorm Authority, RB, Callable 07/01/14 @ 100 (FSA) 5.750%, 07/01/18 1,800 1,860 State Dorm Authority, State University Educational Facilities, RB (FGIC) 5.875%, 05/15/11 2,000 2,115 State Dorm Authority, State University Educational Facilities, Ser A, RB, Pre-Refunded 05/15/00 @ 102 (F) 7.700%, 05/15/12 5,000 5,539 State Local Assistance Corporation, Ser A, RB, Pre-Refunded 04/01/01 @ 102 (F) 7.000%, 04/01/16 5,000 5,524 State Urban Development RB, Callable 01/01/03 @ 102 (AMBAC) 5.625%, 01/01/07 2,300 2,391 - ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- State Urban Development, RB, Pre-Refunded 01/01/01 @ 102 (F) 7.875%, 01/01/10 $ 3,000 $ 3,383 State Urban Development, Ser A, RB (MBIA) 6.250%, 04/01/06 2,000 2,186 Triborough, New York, State Bridge & Tunnel Authority, Ser S, RB, Pre-Refunded 01/01/01 @ 101.5 (F) 7.000%, 01/01/11 2,000 2,191 Triborough, New York, State Bridge & Tunnel Authority, Ser X, RB, Callable 01/01/02 @ 101.50 6.250%, 01/01/04 3,550 3,802 ------------ Total New York 35,492 ------------ NORTH CAROLINA (0.8%) Johnston County, COP (MBIA) 4.150%, 09/01/98 1,380 1,382 ------------ PENNSYLVANIA (0.6%) Philadelphia, Water & Waste, RB (MBIA) 6.250%, 08/01/12 1,050 1,150 ------------ TENNESSEE (3.7%) Shelby County, GO, Pre-Refunded 12/01/00 @ 102 (F) 6.250%, 12/01/09 2,000 2,149 State, GO 5.000%, 05/01/99 4,220 4,284 ------------ Total Tennessee 6,433 ------------ TEXAS (5.3%) El Paso, GO, Callable 08/15/07 @ 100 (FGIC) 5.000%, 08/15/11 1,000 964 5.000%, 08/15/12 1,000 958
76 - --------------------------------------------------------------------------
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -----------------------------------------------------------------------------
INVESTMENT GRADE TAX-EXEMPT BOND FUND TEXAS--CONTINUED Harris County, Health Facility Development, Ser A, RB 6.000%, 06/01/12 $ 3,990 $ 4,234 Texas Water Development Board State Revolving Fund - Senior Lien, RB, Callable 07/15/02 @ 102 6.000%, 07/15/03 2,000 2,133 University of Texas, RB 6.300%, 08/15/99 1,000 1,041 ------------ Total Texas 9,330 ------------ UTAH (1.0%) Intermountain Power Agency, Ser E, RB (FSA) 6.250%, 07/01/09 1,545 1,699 ------------ VIRGINIA (2.9%) Fairfax County, Ser C, GO, Callable 05/01/03 @ 102 5.250%, 05/01/07 5,000 5,107 ------------ WASHINGTON (0.6%) Grant County, Washington School District, GO (FGIC) 6.000%, 12/01/08 1,000 1,073 ------------
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- WISCONSIN (0.9%) Milwaukee County, Ser A, GO (MBIA) 5.250%, 10/01/03 $ 1,550 $ 1,593 ------------ Total Municipal Bonds (Cost $178,251) 179,724 ------------ CASH EQUIVALENTS (9.9%) AIM Management Institutional Tax-Free Portfolio (C) 8,685 8,685 SEI Tax Exempt Trust Institutional Tax Free Portfolio (C) 8,753 8,753 ------------ Total Cash Equivalents (Cost $17,438) 17,438 ------------ Total Investments (112.2%) (Cost $195,689) 197,162 ------------ OTHER ASSETS AND LIABILITIES (-12.2%) Investment securities purchased payable (24,673) Other assets and liabilities, net 3,193 ------------ Total Other Assets and Liabilities (21,480) ------------
77 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ----------------------------------------------------------------------------- VALUE (000) - ----------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,396,746 outstanding shares of beneficial interest $ 137,067 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 2,834,763 outstanding shares of beneficial interest 30,459 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 416,782 outstanding shares of beneficial interest 4,716 Accumulated net realized gain on investments 1,967 Net unrealized appreciation on investments 1,473 ------------ Total Net Assets (100.0%) $ 175,682 ------------ ------------ - ----------------------------------------------------------------------------- VALUE (000) - ----------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.22 ------------ ------------ Net Asset Value and Redemption Price Per Share -- Investor Shares $ 11.24 ------------ ------------ Maximum Offering Price Per Share -- Investor Class ($11.24 DIVIDED BY 96.25%) $ 11.68 ------------ ------------ Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 11.23 ------------ ------------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 78 - -------------------------------------------------------------------------- FLORIDA TAX-EXEMPT BOND FUND
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ MUNICIPAL BONDS (89.0%) FLORIDA (78.7%) Alachua County, State Health Facilities Authority, Ser B, RB, VRDN (MBIA) (C) (D) 3.900%, 12/01/26 $2,300 $ 2,300 Brevard County, School Board, Ser A, COP (AMBAC) 5.400%, 07/01/12 1,500 1,510 Brevard County, State Health Facilities Authority, Holmes Medical Center Project, RB, Callable 10/01/03 @ 102 (MBIA) 5.700%, 10/01/08 3,000 3,103 Brevard County, State Health Facilities Authority, Wuesthoff Memorial Hospital Project, RB (MBIA) 6.250%, 04/01/06 930 1,018 Broward County, School District GO, Pre-Refunded 02/15/99 @ 102 (F) 7.125%, 02/15/08 400 426 Dade County, Aviation Revenue, Ser A, RB, Callable 10/01/05 @ 102 (AMBAC) 6.000%, 10/01/09 500 534 Dade County, School Board, COP (AMBAC) 5.750%, 08/01/03 600 631 Dade County, School District, GO Pre-Refunded 07/01/99 @ 102 (F) 7.200%, 07/01/02 2,000 2,151 7.375%, 07/01/08 250 270 Dade County, Seaport, RB (MBIA) 6.200%, 10/01/08 750 826 6.200%, 10/01/10 1,000 1,094 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ Dade County, State Educational Facilities Authority, University of Miami, Ser A, RB (MBIA) 6.000%, 04/01/08 $ 755 $ 814 Dade County, Water & Sewer System, RB (FGIC) 6.250%, 10/01/09 750 827 5.250%, 10/01/21 825 790 Deerfield Beach, Water & Sewer Revenue, RB (FGIC) 6.125%, 10/01/06 250 273 Gainsville, Utilities Systems, Ser A, RB 5.750%, 10/01/04 1,300 1,379 5.750%, 10/01/09 500 529 Gulf Breeze, Local Government Lien, Ser B, RB, Mandatory Tender 12/01/08 (FGIC) 5.650%, 12/01/15 460 472 Gulf Breeze, Local Government Lien, Ser B, RB, Mandatory Tender 12/01/09 (FGIC) 5.750%, 12/01/15 410 421 Hillsborough County, Capital Improvement Program Ser B, RB Callable 07/01/06 @ 102 (MBIA) 5.125%, 07/01/22 3,000 2,794 Hillsborough County, Capital Improvement Revenue, RB (FGIC) 5.900%, 08/01/04 300 320 Hillsborough County, School Board Revenue, COP, Callable 07/01/06 @ 100 (MBIA) 5.875%, 07/01/08 1,000 1,060 Hillsborough County, University Community Hospital, RB (MBIA) 6.500%, 08/15/19 145 163
79 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ FLORIDA--CONTINUED Indian Trace Community, Water Management Split Benefit, Ser A-1, RB, Callable 05/01/05 @ 102 (MBIA) 5.500%, 05/01/07 $ 455 $ 474 Jacksonville Excise Taxes, Ser B, RB, AMT, Callable 10/01/01 @ 101 (FGIC) 4.900%, 10/01/02 590 595 Jacksonville, Florida Excise Tax, Ser B, RB, AMT, Callable 10/01/03 @ 100 (FGIC) 5.200%, 10/01/04 1,500 1,527 Lakeland, Electric & Water Revenue, RB (FGIC) 6.500%, 10/01/05 1,000 1,113 Lakeland, Electric & Water Revenue, RB 6.650%, 10/01/98 100 103 Manatee County, Community Redevelopment Administration, Center Project, RB, Callable 04/01/00 @ 102.00 (MBIA) 7.000%, 04/01/08 1,000 1,076 North Broward, Hospital District Revenue, RB (MBIA) 5.950%, 01/01/01 1,000 1,044 Orange County, Health Facilities Authority, RB (MBIA) 6.250%, 10/01/13 1,000 1,093 Orange County, Public Facilities Revenue, Ser A, RB, Callable 10/01/04 @ 102 (AMBAC) 5.650%, 10/01/07 200 210 Orlando, Community Water & Electric Revenue, RB (ETM) 9.625%, 10/01/03 450 569 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ Orlando, Community Water & Electric Revenue, Ser D, RB 6.750%, 10/01/17 $ 500 $ 582 Palm Beach, Health Facilities Revenue, JFK Medical Center Project, RB, Pre-Refunded 12/01/03 @ 102 (FSA) (F) 5.750%, 12/01/14 165 177 Pinellas County, Morton Plant Health Systems Project, RB, Callable 11/15/03 @ 102 (MBIA) 5.500%, 11/15/08 1,500 1,541 Plant City, Utility System Revenue, RB, Callable 10/01/04 @ 101 (MBIA) 6.000%, 10/01/15 400 426 Reedy Creek, Utility Revenue, Ser 1991-1, RB, Pre-Refunded 10/01/01 @ 101 (MBIA) (F) 6.250%, 10/01/11 240 258 South Broward, Hospital District, RB, Callable 05/01/03 @ 102 (AMBAC) 7.500%, 05/01/08 1,920 2,195 State Board General Financial Services, Department of Environmental Preservation, RB (AMBAC) 5.125%, 07/01/07 1,500 1,518 State Board of Education, Capital Outlay, RB 6.600%, 06/01/98 125 128 State Board of Education Capital Outlay, GO, Pre-Refunded 06/01/00 @ 102 (F) 7.250%, 06/01/23 2,695 2,953
80 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ FLORIDA--CONTINUED State Board of Education, Capital Outlay, Ser B, GO, Callable 06/01/02 @ 101 5.900%, 06/01/12 $ 450 $ 463 State Board of Education, Capital Outlay, Ser B, RB, Callable 06/01/02 @ 101 6.000%, 06/01/15 170 175 State Board of Education, Ser C, GO, Pre-Refunded 06/01/97 @ 102 (ETM) (F) 7.100%, 06/01/07 190 194 State Board of Finance Department, General Services Revenue, Environmental Preservation 2000, Ser A, RB (AMBAC) 5.300%, 07/01/04 460 474 State Department of Natural Resources, Preservation 2000 Project, Ser A, RB, Callable 07/01/01 @ 102 (AMBAC) 6.750%, 07/01/06 80 87 State Keys, Aqueduct Authority Revenue, RB, Pre-Refunded 09/01/01 @ 101 (AMBAC) (F) 6.750%, 09/01/21 170 186 State Pollution Control, Ser N, GO, Callable 07/01/96 @ 102 8.000%, 07/01/97 420 422 Tallahassee Construction Utility System, RB, Pre-Refunded 10/01/99 @ 102 (F) 6.900%, 10/01/14 240 258 Tampa, RB, Callable 10/1/01 @ 102 (AMBAC) 7.050%, 10/01/07 1,000 1,105 ------- Total Florida 44,651 ------- - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ PUERTO RICO (10.3%) Commonwealth, Highway & Transportation Authority, Ser Z, RB (MBIA) 6.250%, 07/01/14 $2,000 $ 2,193 Commonwealth, GO, (MBIA) 5.650%, 07/01/15 1,000 1,026 Electric Power Authority, Ser S, RB 5.500%, 07/01/00 200 205 Electric Power Authority, RB, (MBIA) 6.125%, 07/01/09 1,000 1,094 Public Buildings Authority, Guaranteed Government Facilities, Ser A, RB (AMBAC) 6.250%, 07/01/14 750 822 Public Buildings Authority Revenue, Public Education & Health Facilities, RB 5.300%, 07/01/03 475 483 ------- Total Puerto Rico 5,823 ------- Total Municipal Bonds (Cost $49,674) 50,474 ------- CASH EQUIVALENTS (9.8%) AIM Management Institutional Tax-Free Portfolio 2,782 2,782 SEI Tax Exempt Trust Institutional Tax Free Portfolio 2,767 2,767 ------- Total Cash Equivalents (Cost $5,549) 5,549 ------- Total Investments (98.8%) (Cost $55,223) 56,023 ------- OTHER ASSETS AND LIABILITIES, NET (1.2%) 690 -------
81 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 FLORIDA TAX-EXEMPT BOND FUND
- ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,910,796 outstanding shares of beneficial interest $50,028 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 313,587 outstanding shares of beneficial interest 3,103 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 291,278 outstanding shares of beneficial interest 2,992 Accumulated net realized loss on investments (210) - ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ Net unrealized appreciation on investments $ 800 ------- Total Net Assets (100.0%) $56,713 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.28 ------- ------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.29 ------- ------- Maximum Offering Price Per Share -- Investor Class ($10.29 DIVIDED BY 96.25%) $ 10.69 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.30 ------- -------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 82 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 TENNESSEE TAX-EXEMPT BOND FUND
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- MUNICIPAL BONDS (89.1%) PUERTO RICO (11.9%) Commonwealth, GO, Callable 07/01/05 @ 100 (MBIA) 5.500%, 07/01/13 $175 $ 176 Commonwealth, Highway & Transportation Authority, Ser Z, RB (MBIA) 6.250%, 07/01/15 500 549 ------ Total Puerto Rico 725 ------ TENNESSEE (77.2%) Chattanooga, GO, Callable 08/01/02 @ 102 5.900%, 08/01/05 50 53 Chattanooga, Health Facilities Board, Memorial Hospital Project, Ser A, RB (MBIA) 6.300%, 09/01/05 20 22 Chattanooga-Hamilton County, Erlanger Medical Center Project, RB (FSA) 5.600%, 10/01/08 50 52 Hamilton County, GO, Callable 07/01/04 @ 102 5.500%, 07/01/08 100 103 Harpeth Valley, Utility District Revenue, RB, Callable 09/01/03 @ 102 5.625%, 09/01/07 100 104 Jackson, Water & Sewer Utilities Revenue, RB, Callable 07/01/06 @ 100 (AMBAC) 5.250%, 07/01/11 200 198 Johnson City, Water & Sewer Regulation System, GO, Callable 05/01/06 @ 100 (AMBAC) 5.800%, 05/01/09 100 104 Kingsport, GO 5.500%, 09/01/02 50 52 - ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- Knox County, First Utility District Sewer Revenue, RB, Callable 12/01/97 @ 100 (ETM) 7.250%, 12/01/05 $ 55 $ 64 Knox County, Health Facilities Board, Mercy Health Systems, Ser B, RB, Callable 09/01/05 @ 100 (AMBAC) 5.875%, 09/01/15 50 51 Knoxville, Natural Gas Revenue, Ser E, RB, Callable 03/01/03 @ 100 5.900%, 03/01/10 100 103 Madison County, Ser A, GO, Callable 08/01/01 @ 102 6.000%, 08/01/05 40 42 Madison County, Water Revenue, RB, Callable 02/01/08 @ 100 (MBIA) 5.500%, 02/01/09 250 255 Memphis-Shelby County, Airport Authority, Ser B, RB, AMT (MBIA) 6.500%, 02/15/09 85 94 Memphis-Shelby County, Airport Authority, RB, Callable 09/01/05 @ 100 (MBIA) 5.550%, 09/01/08 50 52 Metro Government, Nashville & Davidson County, Convention Center Project, GO (ETM) 6.250%, 03/01/10 200 219 Metro Government, Nashville & Davidson County, Correctional Facility Improvements, RB, Callable 09/01/01 @ 102 7.000%, 09/01/11 100 109 Metro Government, Nashville & Davidson County, Electric System Revenue, RB (ETM) 6.000%, 07/01/04 100 107 Metro Government, Nashville & Davidson County, Electric System Revenue, RB 5.625%, 05/15/14 200 203
83 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- TENNESSEE--CONTINUED Metro Government, Nashville & Davidson County, Vanderbilt University Hospital, RB, Callable 07/01/06 @ 100 (ETM) 6.100%, 07/01/10 $100 $ 106 Metro Government, Nashville & Davidson County, Vanderbilt University, Ser A, RB 5.500%, 01/01/06 125 130 Metro Government, Nashville & Davidson County, Water & Sewer Revenue, RB (ETM) 6.500%, 12/01/14 225 251 Metro Government, Nashville & Davidson County, Water & Sewer, RB, Callable 01/01/04 @ 100 (AMBAC) 5.900%, 01/01/07 100 105 Nashville & Davidson County, State Sports Authority Stadium Project, RB, Callable 07/01/06 @ 101 (AMBAC) 5.750%, 07/01/15 100 102 Shelby County, School Boards, GO, Callable 03/01/02 @ 101 5.800%, 03/01/10 300 309 Shelby County, Ser A, GO 5.500%, 03/01/10 300 307 Shelby County, Ser B, GO 5.100%, 03/01/00 750 763 State GO, Ser A, Callable 03/01/07 @ 100 5.500%, 03/01/09 50 52 State GO, Ser C 5.000%, 03/01/04 100 102 State Housing Development Agency, Ser A, RB (AMBAC) 6.550%, 01/01/08 50 52 - ----------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ----------------------------------------------------------------------------- State Local Development Authority, State Loan Program, Ser A, RB, Callable 03/01/04 @ 100 7.000%, 03/01/12 $ 50 $ 54 State Metropolitan Nashville Airport, Ser B, RB, Pre-Refunded 07/01/01 @ 102 (FGIC)(F) 7.750%, 07/01/06 100 113 State School Board Authority, Higher Education Facilities, Ser A, RB, Callable 05/01/02 @ 101.50 5.800%, 05/01/04 150 158 Sullivan County, Health Facilities Board, Holston Valley Health, RB, Callable 02/15/03 @ 102 (MBIA) 5.750%, 02/15/13 50 51 Williamson County, Rural School, GO, Callable 09/01/06 @ 100 5.400%, 09/01/07 50 52 ------ Total Tennessee 4,694 ------ Total Municipal Bonds (Cost $5,299) 5,419 ------ CASH EQUIVALENTS (9.8%) Aim Management Institutional Tax Free Portfolio 292 292 SEI Tax-Exempt Trust Institutional Tax-Free Portfolio 302 302 ------ Total Cash Equivalents (Cost $594) 594 ------ Total Investments (98.9%) (Cost $5,893) 6,013 ------ OTHER ASSETS AND LIABILITIES, NET (1.1%) 67 ------
84 - --------------------------------------------------------------------------
------------------------------------------------------------ VALUE (000) - ----------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 204,829 outstanding shares of beneficial interest $1,913 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 166,059 outstanding shares of beneficial interest 1,570 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 259,932 outstanding shares of beneficial interest 2,489 Accumulated net realized loss on investments (12) Net unrealized appreciation on investments 120 ------ Total Net Assets (100.0%) $6,080 ------ ------ ------------------------------------------------------------ VALUE (000) - ----------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.63 ------ ------ Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.65 ------ ------ Maximum Offering Price Per Share -- Investor Class ($9.65 DIVIDED BY 96.25%) $10.03 ------ ------ Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.64 ------ ------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 85 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 GEORGIA TAX-EXEMPT BOND FUND
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ MUNICIPAL BONDS (89.6%) GEORGIA (89.6%) Albany-Dougherty County, State Hospital Authority, Ser B, Anticipation Certificate, Pre-Refunded 09/01/00 @ 102 (AMBAC)(F) 7.500%, 09/01/20 $ 255 $ 282 Athens, Water & Sewer Revenue, RB (ETM)(F) 5.700%, 07/01/00 165 171 Atlanta Airport Facility, RB 6.000%, 01/01/03 500 531 6.000%, 01/01/04 500 534 Augusta, Water & Sewer, RB, Callable 05/01/02 @ 102 6.200%, 05/01/03 130 141 Bibb County, GO 7.000%, 01/01/04 985 1,103 Bulloch County School District, GO 5.250%, 02/01/17 1,000 968 Clayton County, Water & Sewer Authority, RB (AMBAC) 5.350%, 05/01/09 1,500 1,519 Cobb County & Marietta, Coliseum & Exhibit Hall Authority, RB (MBIA) 5.500%, 10/01/12 940 956 Cobb County & Marietta, Water Authority, RB 5.100%, 11/01/04 1,000 1,019 Cobb County, GO 5.000%, 02/01/03 1,025 1,040 Cobb County, Water & Sewer Authority, Callable 07/01/04 @ 102 5.125%, 07/01/05 345 352 Columbus Water & Sewer, RB (FGIC) 5.625%, 05/01/13 1,055 1,070 Dalton-Whitfield County, Hospital Authority, RB, Pre-Refunded 07/01/00 @ 102 (F) 7.000%, 07/01/03 355 386 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ DeKalb County, Development Authority, Emory University Project, RB (F) 5.375%, 11/01/05 $1,650 $ 1,710 DeKalb County, Development Authority, Emory University Project, Ser A, RB 5.200%, 11/01/08 500 506 DeKalb County, School District, Ser A, GO 6.250%, 07/01/11 1,500 1,649 DeKalb County, Water & Sewer Authority, RB, Callable 10/01/03 @ 102 5.125%, 10/01/14 1,455 1,398 Douglas County, School District, GO (MBIA) 5.650%, 01/01/09 805 832 Douglasville -- Douglas County, Water and Sewer Authority, RB (AMBAC) 5.625%, 06/01/15 350 357 East Point Building Authority, RB (AMBAC) 4.800%, 02/01/07 535 525 Fayette County, School District, GO 6.250%, 03/01/07 450 494 Fayette County, Water Authority, RB (MBIA) (ETM) 8.550%, 10/01/01 300 346 Forsyth County, School District, GO (MBIA) 5.350%, 07/01/10 680 685 Forsyth County, GO 6.500%, 07/01/06 1,000 1,113 Fulton County, Hospital Authority, Northside Hospital Project, Ser B, RB, Pre-Refunded 10/01/02 @ 102 (MBIA)(F) 6.600%, 10/01/11 2,000 2,214
86 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ GEORGIA--CONTINUED Gwinnett County Recreation Authority, RB 5.800%, 02/01/06 $ 785 $ 835 5.875%, 02/01/07 1,390 1,489 Gwinnett County, School District, GO 6.400%, 02/01/06 500 553 Gwinnett County, School District, Ser B, GO 6.400%, 02/01/07 1,000 1,113 Hall County, GO 6.300%, 12/01/05 675 739 Hartwell, Combined Utility Revenue, RB, Callable 01/01/06 @ 102 (FSA) 5.500%, 01/01/16 1,000 991 Henry County, GO 6.300%, 08/01/08 300 331 Henry County, School District, School Improvements, RB 6.450%, 08/01/11 500 555 Henry County, School District, Ser A, GO 6.150%, 08/01/06 150 163 Henry County, School District, Ser B, GO (MBIA) 5.500%, 08/01/01 350 363 Housing Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB 5.550%, 12/01/07 550 561 Medical Center Hospital Authority, Columbus Regional Healthcare System, RB (MBIA) 6.000%, 08/01/06 1,000 1,070 Meriwether County, School District, GO (FSA) 7.000%, 02/01/06 740 847 5.500%, 02/01/16 1,000 990 Milledgeville, Water & Sewer, RB (FSA) 6.000%, 12/01/16 1,000 1,069 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ Paulding County, School District, Ser A, GO 6.625%, 02/01/07 $1,000 $ 1,123 6.625%, 02/01/08 500 563 Private Colleges & Universities Facilities Authority, Emory University Project, Ser C, RB, Callable 10/01/02 @ 102 5.900%, 10/01/04 305 325 Private Colleges & Universities Facilities Authority, Spelman College Project, RB (FGIC) 6.000%, 06/01/09 475 502 Richmond County Georgia Water & Sewer, Ser A, RB (FGIC) 5.125%, 10/01/17 1,000 951 Rockdale County, School District, RB, Pre-Refunded 01/01/99 @ 102 (F) 6.400%, 01/01/05 150 157 Savannah, Water & Sewer Revenue, RB (ETM)(F) 6.450%, 12/01/04 1,000 1,104 State GO, Ser B, Pre-Refunded 07/01/99 @ 102 (F) 6.800%, 07/01/06 460 491 State GO, Ser C 6.500%, 04/01/08 1,000 1,127 State Housing & Financial Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB (FHA) 5.550%, 12/01/10 325 325 State Housing & Financial Authority, Single Family Mortgage, Ser B, Sub-ser B-1, RB (FHA) 5.600%, 12/01/11 450 450 State Municipal Electric Authority, RB (ETM)(F) 8.000%, 01/01/15 465 587 Vidalia, Water & Sewer Revenue, RB (ETM)(F) 6.000%, 07/01/07 605 654
87 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ GEORGIA--CONTINUED Walker County School District, GO 5.000%, 02/01/03 $1,000 $ 1,010 ------- Total Georgia 42,939 ------- Total Municipal Bonds (Cost $42,637) 42,939 ------- REPURCHASE AGREEMENT (2.6%) Lehman Brothers 5.02%, dated 05/30/97, matures 06/02/97, repurchase price $1,233,287 (collateralized by U.S. Treasury Note, par value $1,247,488, 5.625%, 08/31/97: total market value $1,265,810) 1,233 1,233 ------- Total Repurchase Agreement (Cost $1,233) 1,233 ------- CASH EQUIVALENTS (8.4%) AIM Management Institutional Tax-Free Portfolio (C) 2,025 2,025 SEI Tax Exempt Trust Institutional Tax Free Portfolio (C) 2,007 2,007 ------- Total Cash Equivalents (Cost $4,032) 4,032 ------- Total Investments (100.6%) (Cost $47,902) 48,204 ------- OTHER ASSETS AND LIABILITIES, NET (-0.6%) (299) ------- ------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 4,084,294 outstanding shares of beneficial interest $39,434 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 360,308 outstanding shares of beneficial interest 3,511 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 479,124 outstanding shares of beneficial interest 4,651 Accumulated net realized gain on investments 7 Net unrealized appreciation on investments 302 ------- Total Net Assets (100.0%) $47,905 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.73 ------- ------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.74 ------- ------- Maximum Offering Price Per Share -- Investor Class ($9.74 DIVIDED BY 96.25%) $ 10.12 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.73 ------- -------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 88 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 INVESTMENT GRADE BOND FUND
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (21.2%) U.S. Treasury Bonds 7.500%, 11/15/16 $36,100 $ 38,056 8.125%, 08/15/19 81,000 91,127 6.625%, 02/15/27 10,000 9,635 U.S. Treasury Note 6.750%, 04/30/00 4,000 4,039 ----------- Total U.S. Treasury Obligations (Cost $141,586) 142,857 ----------- CORPORATE OBLIGATIONS (69.9%) FINANCE (51.7%) American General Finance 6.875%, 07/01/99 13,000 13,097 Aristar 6.750%, 05/15/99 23,000 23,115 Associates of North America, MTN 6.650%, 08/30/99 9,500 9,524 Bear Stearns 7.000%, 03/01/07 23,000 22,425 General Motors Acceptance, MTN 6.750%, 11/04/04 21,000 20,422 General Motors Acceptance 7.125%, 05/01/01 23,500 23,676 Homeside Lending, MTN 6.875%, 05/15/00 21,600 21,573 Household Finance, MTN 7.150%, 06/15/00 13,000 13,130 International Lease Finance 6.700%, 04/30/99 23,500 23,618 Merrill Lynch, MTN 6.640%, 04/09/99 19,000 19,071 Morgan Stanley Group 6.875%, 03/01/07 17,000 16,554 RHG Finance 8.875%,10/01/05 17,100 18,489 Salomon 6.500%, 03/01/00 28,000 27,755 6.750%, 02/15/03 23,000 22,368 -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- Service International 7.375%, 04/15/04 $20,500 $ 20,756 Sunamerica 6.200%, 10/31/99 25,000 24,813 US West Capital Funding 7.300%, 01/15/07 27,500 27,328 ----------- Total Finance 347,714 ----------- INDUSTRIAL (11.3%) Ford Capital 9.500%, 06/01/10 15,000 17,306 Lockheed Martin 6.550%, 05/15/99 16,000 16,020 Philip Morris 7.250%, 09/15/01 24,500 24,592 6.800%, 12/01/03 4,000 3,900 7.500%, 04/01/04 14,500 14,573 ----------- Total Industrial 76,391 ----------- UTILITIES (6.9%) AT&T Capital, MTN 6.920%, 04/29/99 25,000 25,125 General Electric Capital (C) 6.660%, 05/01/18 21,000 21,052 ----------- Total Utilities 46,177 ----------- Total Corporate Obligations (Cost $471,229) 470,282 ----------- U.S. GOVERNMENT AGENCY OBLIGATIONS (4.2%) FHLMC 8.000%, 06/01/02 8,047 8,244 7.500%, 09/01/03 19,625 19,896 ----------- Total U.S. Government Agency Obligations (Cost $28,159) 28,140 -----------
89 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.4%) Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $2,739,802 (collateralized by U.S. Treasury Note, par value $2,777,000, 5.125%, 12/31/98: market value $2,794,004) $ 2,739 $ 2,739 ----------- Total Repurchase Agreement (Cost $2,739) 2,739 ----------- Total Investments (95.7%) (Cost $643,713) 644,018 ----------- OTHER ASSETS AND LIABILITIES, NET (4.3%) 28,556 ----------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 62,361,667 outstanding shares of beneficial interest 644,729 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 3,264,729 outstanding shares of beneficial interest 34,279 -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 566,749 outstanding shares of beneficial interest $ 5,854 Accumulated net realized loss on investments (12,593) Net unrealized appreciation on investments 305 ----------- Total Net Assets (100.0%) $ 672,574 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.16 ----------- ----------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.16 ----------- ----------- Maximum Offering Price Per Share -- Investor Class ($10.16 DIVIDED BY 96.25%) $ 10.56 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.17 ----------- -----------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 90 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 SHORT-TERM BOND FUND
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (36.0%) U.S. Treasury Bond 6.125%, 05/15/98 $ 2,000 $ 2,005 U.S. Treasury Notes 5.875%, 08/15/98 1,750 1,747 4.750%, 09/30/98 1,500 1,476 4.750%, 10/31/98 9,000 8,843 5.500%, 02/28/99 8,750 8,659 5.875%, 11/15/99 3,000 2,971 7.500%, 11/15/01 3,750 3,892 U.S. Treasury STRIPS 0.000%, 08/15/03 5,750 3,851 ----------- Total U.S. Treasury Obligations (Cost $33,597) 33,444 ----------- CORPORATE OBLIGATIONS (43.1%) FINANCE (22.7%) American General 6.250%, 03/15/03 1,100 1,060 Associates of North America, MTN 5.980%, 12/19/00 1,250 1,220 7.080%, 04/15/03 1,500 1,502 Bankers Trust New York 6.625%, 07/30/99 2,250 2,250 Chrysler Financial 6.440%, 06/23/99 1,000 1,000 Dean Witter Discover, MTN 6.000%, 02/08/01 1,000 966 First Chicago NBD 6.500%, 11/01/01 2,250 2,214 FNMA, MTN 5.760%, 02/26/01 2,100 2,034 Ford Motor Credit 6.250%, 11/08/00 1,500 1,476 General Motors Acceptance 7.125%, 05/01/01 1,750 1,763 Household Finance 9.625%, 07/15/00 1,250 1,349 -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- International Lease Finance, MTN 6.050%, 02/01/00 $ 2,250 $ 2,216 Norwest Financial 7.200%, 04/01/04 2,000 2,020 ----------- Total Finance 21,070 ----------- INDUSTRIAL (13.7%) Dayton Hudson 6.800%, 10/01/01 2,250 2,230 Federal Express 6.250%, 04/15/98 750 752 Philip Morris (D) 9.000%, 05/15/98 1,500 1,540 Philip Morris 7.500%, 01/15/02 1,250 1,264 RJR Nabisco 8.300%, 04/15/99 1,000 1,031 Sears Roebuck Acceptance, MTN 6.820%, 10/17/02 500 496 6.540%, 02/20/03 1,200 1,170 Sherwin-Williams 6.250%, 02/01/00 1,000 991 Tenneco 10.075%, 02/01/01 3,000 3,296 ----------- Total Industrial 12,770 ----------- UTILITIES (6.7%) General Electric Capital, Callable & Putable 4/14/98 @ 100 (C)(D) 6.650%, 04/14/08 2,000 2,006 Indiana & Michigan Power, MTN 6.400%, 03/01/00 2,250 2,230 NYNEX Credit, MTN 6.900%, 06/15/99 2,000 2,015 ----------- Total Utilities 6,251 ----------- Total Corporate Obligations (Cost $40,297) 40,091 -----------
91 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (4.9%) FHLMC 6.500%, 04/01/98 $ 892 $ 884 8.000%, 01/01/00 894 910 5.375%, 04/13/00 1,000 989 FNMA 8.500%, 11/01/01 1,758 1,801 ----------- Total U.S. Agency Mortgage-Backed Obligations (Cost $4,534) 4,584 ----------- ASSET-BACKED SECURITIES (9.4%) Chase Manhattan Auto Grantor Trust, Ser 1996-B, Cl A 6.610%, 09/15/02 1,947 1,955 Metris Master Trust, Ser 1997-1, Cl A 6.870%, 11/20/05 2,750 2,767 Olympic Automobile Receivables Trust, Ser 1996-D, Cl A3 5.950%, 06/15/01 2,500 2,477 Union Pacific Equipment Trust, Ser 96-A 7.060%, 05/15/03 1,500 1,506 ----------- Total Asset-Backed Securities (Cost $8,697) 8,705 ----------- CASH EQUIVALENTS (2.8%) SEI Daily Income Trust Prime Obligation Portfolio 2,583 2,583 ----------- Total Cash Equivalents (Cost $2,583) 2,583 ----------- Total Investments (96.2%) (Cost $89,708) 89,407 ----------- Other Assets and Liabilities, Net (3.8%) 3,549 ----------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 9,063,741 outstanding shares of beneficial interest $ 90,146 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 220,117 outstanding shares of beneficial interest 2,202 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 108,300 outstanding shares of beneficial interest 1,087 Undistributed net investment income 141 Accumulated net realized loss on investments (319) Net unrealized depreciation on investments (301) ----------- Total Net Assets (100.0%) $ 92,956 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.90 ----------- ----------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.91 ----------- ----------- Maximum Offering Price Per Share -- Investor Class ($9.91 DIVIDED BY 98.00%) $ 10.11 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.91 ----------- -----------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 92 SHORT-TERM U.S. TREASURY SECURITIES FUND
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (97.3%) U.S. Treasury Bonds 6.125%, 05/15/98 $2,250 $ 2,255 6.000%, 08/15/99 2,500 2,487 U.S. Treasury Notes 5.125%, 06/30/98 2,250 2,233 5.875%, 08/15/98 3,400 3,394 5.500%, 11/15/98 1,600 1,588 8.875%, 02/15/99 4,200 4,382 6.375%, 05/15/99 1,900 1,905 6.875%, 07/31/99 4,250 4,303 5.875%, 11/15/99 2,000 1,980 5.875%, 02/15/00 1,000 988 6.875%, 03/31/00 750 760 ------- Total U.S. Treasury Obligations (Cost $26,305) 26,275 ------- CASH EQUIVALENT (1.6%) SEI Daily Income Trust Treasury II Portfolio 437 437 ------- Total Cash Equivalent (Cost $437) 437 ------- Total Investments (98.9%) (Cost $26,742) 26,712 ------- OTHER ASSETS AND LIABILITIES, NET (1.1%) 288 ------- - ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 2,225,584 outstanding shares of beneficial interest $22,198 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 396,977 outstanding shares of beneficial interest 3,986 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 110,713 outstanding shares of beneficial interest 1,103 Accumulated net realized loss on investments (257) Net unrealized depreciation on investments (30) ------- Total Net Assets (100.0%) $27,000 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 9.88 ------- ------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 9.88 ------- ------- Maximum Offering Price Per Share -- Investor Class ($9.88 DIVIDED BY 99.00%) $ 9.98 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 9.85 ------- -------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 93 - -------------------------------------------------------------------------- LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (33.7%) U.S. Treasury Notes 8.875%, 02/15/99 $10,300 $ 10,747 9.125%, 05/15/99 11,200 11,789 8.000%, 08/15/99 6,000 6,210 7.500%, 10/31/99 8,800 9,030 8.500%, 11/15/00 5,000 5,317 -------- Total U.S. Treasury Obligations (Cost $43,159) 43,093 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (64.0%) FHLMC 6.000%, 07/01/00 4,568 4,415 8.000%, 06/01/02 1,149 1,178 7.000%, 10/01/02 4,532 4,543 8.000%, 12/01/02 2,855 2,886 7.000%, 03/01/04 14,946 14,947 FHLMC REMIC, Ser 1910-Ac 6.500%, 10/15/15 10,000 9,946 FHLMC REMIC, Ser 1637-E 5.750%, 02/15/19 2,699 2,645 FHLMC REMIC, Ser 1614-H 6.000%, 06/15/20 4,550 4,411 FNMA 7.500%, 07/01/03 8,811 8,924 7.000%, 03/01/04 14,834 14,830 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- 8.500%, 04/01/17 $ 1,106 $ 1,157 FNMA REMIC, Ser G96-1PC 7.000%, 08/17/12 4,921 4,954 FNMA REMIC, Ser 1992-134G 6.000%, 11/25/18 5,586 5,460 GNMA 9.000%, 11/15/17 1,412 1,513 -------- Total U.S. Government Agency Obligations (Cost $81,888) 81,809 -------- REPURCHASE AGREEMENT (1.9%) J.P. Morgan 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $2,376,897 (collateralized by various FNMA obligations, total par value $3,182,000, 7.500%-8.115%, 05/25/23-05/01/27; total market value $2,425,338) 2,376 2,376 -------- Total Repurchase Agreement (Cost $2,376) 2,376 -------- Total Investments (99.6%) (Cost $127,423) 127,278 -------- OTHER ASSETS AND LIABILITIES, NET (0.4%) 460 --------
94 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 12,371,227 outstanding shares of beneficial interest $124,063 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 242,520 outstanding shares of beneficial interest 2,441 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 140,719 outstanding shares of beneficial interest 1,424 Distributions in excess of net investment income (2) Accumulated net realized loss on investments (43) Net unrealized depreciation on investments (145) -------- Total Net Assets (100.0%) $127,738 -------- -------- - ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.02 -------- -------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.00 -------- -------- Maximum Offering Price Per Share -- Investor Class ($10.00 DIVIDED BY 97.50%) $ 10.26 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.02 -------- --------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 95 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 U.S. GOVERNMENT SECURITIES FUND
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ U.S. TREASURY OBLIGATIONS (28.0%) U.S. Treasury Bonds 7.250%, 05/15/16 $1,000 $ 1,029 6.875%, 08/15/25 1,000 988 6.750%, 08/15/26 550 535 6.500%, 11/15/26 565 533 U.S. Treasury Notes 7.750%, 11/30/99 200 207 8.500%, 11/15/00 1,000 1,063 8.000%, 05/15/01 200 210 7.500%, 11/15/01 200 208 7.500%, 05/15/02 750 781 7.875%, 11/15/04 275 295 7.500%, 02/15/05 500 525 6.500%, 10/15/06 50 49 7.625%, 02/15/25 400 431 ------- Total U.S. Treasury Obligations (Cost $6,994) 6,854 ------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (66.1%) FHLMC 6.000%, 02/01/01 112 108 7.000%, 01/01/09 127 126 7.000%, 04/01/09 611 608 7.000%, 08/01/10 888 883 7.000%, 05/01/12 990 984 FNMA 7.500%, 06/01/11 947 958 7.000%, 09/17/11 1,430 1,421 7.000%, 10/25/16 951 926 7.500%, 04/01/27 987 983 FNMA REMIC, Ser 1997-6, Cl H 7.000%, 08/18/08 1,058 1,037 FNMA REMIC, Ser G93-40, Cl VC 6.500%, 08/25/10 261 248 FNMA REMIC, Ser 1997-34, Cl VC 7.500%, 05/01/12 1,000 1,009 FNMA REMIC, Ser 1996-9, Cl H 6.500%, 11/25/13 1,337 1,265 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ FNMA REMIC, Ser 993-156, Cl B 6.500%, 04/25/18 $ 100 $ 95 FNMA REMIC, Ser 1990-143, Cl J 8.750%, 12/25/20 140 146 GNMA 7.500%, 10/20/09 72 73 8.250%, 01/15/12 99 102 10.000%, 06/15/19 4 5 7.000%, 11/15/22 466 453 8.000%, 02/15/23 37 38 8.500%, 03/15/23 81 84 7.500%, 04/15/23 132 132 7.500%, 09/15/23 875 872 7.000%, 01/15/24 161 157 7.500%, 04/15/24 861 857 7.000%, 06/15/24 902 877 8.000%, 08/15/24 83 85 8.000%, 09/15/24 27 28 8.000%, 10/15/24 35 36 8.000%, 11/15/24 37 39 8.500%, 12/15/24 73 77 8.500%, 02/15/25 36 37 7.000%, 12/15/25 489 476 GNMA REMIC, Ser 1995-6A, Cl E 7.500%, 05/20/23 1,000 990 ------- Total U.S. Agency Mortgage-Backed Obligations (Cost $16,289) 16,215 ------- CASH EQUIVALENTS (5.8%) SEI Daily Income Trust Government II Portfolio (C) 229 229 SEI Daily Income Trust Treasury II Portfolio (C) 1,188 1,188 ------- Total Cash Equivalents (Cost $1,417) 1,417 ------- Total Investments (99.9%) (Cost $24,700) 24,486 -------
96 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ OTHER ASSETS AND LIABILITIES, NET (0.1%) $ 29 ------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 1,943,402 outstanding shares of beneficial interest 19,658 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 223,920 outstanding shares of beneficial interest 2,266 Fund shares of the Flex Shares (unlimited authorization -- no par value) based on 279,601 outstanding shares of beneficial interest 2,866 Accumulated net realized loss on investments (61) Net unrealized depreciation on investments (214) ------- Total Net Assets (100.0%) $24,515 ------- ------- - ------------------------------------------------------------------------------ VALUE (000) - ------------------------------------------------------------------------------ Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.02 ------- ------- Net Asset Value and Redemption Price Per Share -- Investor Shares $ 10.02 ------- ------- Maximum Offering Price Per Share -- Investor Class ($10.02 DIVIDED BY 96.25%) $ 10.41 ------- ------- Net Asset Value, Offering and Redemption Price Per Share -- Flex Shares (1) $ 10.02 ------- -------
(1) THE FLEX SHARES HAVE A CONTINGENT SALES CHARGE. FOR A DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 97 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 PRIME QUALITY MONEY MARKET FUND
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER (45.9%) ABN-Amro Finance 5.350%, 06/05/97 $ 1,500 $ 1,499 Banc One Funding 5.600%, 08/04/97 10,211 10,109 Bank of Montreal 5.520%, 07/01/97 20,000 19,908 Bankers Trust 5.500%, 11/17/97 1,000 974 BAT Capital 5.530%, 06/24/97 5,000 4,982 5.700%, 07/14/97 10,450 10,379 5.580%, 07/15/97 20,127 19,990 Cargill Financial 5.550%, 06/16/97 20,000 19,954 Caterpillar Financial Services 5.600%, 09/11/97 16,000 15,746 Central Illinois Public Services 5.500%, 06/05/97 5,700 5,697 Commerzbank 5.350%, 06/10/97 9,135 9,123 Deutsche Bank Finance 5.350%, 06/06/97 30,000 29,978 Dominion Semiconductor 5.650%, 06/04/97 18,497 18,488 5.550%, 06/23/97 5,000 4,983 5.550%, 06/24/97 15,000 14,947 Dresser Industries 5.550%, 06/30/97 20,500 20,408 Ford Motor Credit 5.650%, 07/03/97 1,800 1,791 Ford Motor Credit Puerto Rico 5.620%, 07/08/97 2,000 1,988 General Electric Capital 5.520%, 06/24/97 10,000 9,965 5.380%, 07/09/97 15,000 14,915 Golden Peanut 5.400%, 07/15/97 3,750 3,725 GTE Funding 5.510%, 06/09/97 16,000 15,980 Hertz 5.620%, 07/25/97 25,000 24,789 - -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- International Business Machines Credit 5.550%, 06/19/97 $35,000 $ 34,908 J.C. Penny Funding 5.350%, 06/09/97 21,000 20,975 Mobil Australia Finance 5.580%, 06/30/97 1,500 1,493 National Australia Funding 5.550%, 06/02/97 35,000 34,995 5.430%, 08/13/97 4,500 4,450 National City Credit 5.650%, 07/28/97 8,000 7,928 5.665%, 08/21/97 15,000 14,809 New England Power 5.520%, 06/06/97 3,500 3,497 Paccar Financial 5.350%, 06/04/97 1,500 1,499 Pactel Capital Resources 5.510%, 06/23/97 26,000 25,912 Panasonic 5.350%, 06/09/97 13,000 12,985 RTZ America 5.550%, 06/25/97 10,000 9,963 5.650%, 11/17/97 12,475 12,144 Sherwin Williams 5.620%, 07/21/97 4,000 3,969 5.640%, 08/04/97 8,325 8,242 5.640%, 08/05/97 4,800 4,751 5.640%, 08/11/97 7,500 7,417 5.680%, 08/22/97 3,000 2,961 Society Generale North America 5.500%, 09/10/97 5,000 4,923 Sony Capital 5.500%, 06/05/97 6,690 6,686 Southern New England Telcommunications 5.580%, 06/11/97 2,000 1,997 Transamerica Finance 5.520%, 06/04/97 9,700 9,696 5.540%, 06/19/97 4,955 4,941
98 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER--CONTINUED U.S. Borax 5.400%, 06/09/97 $ 3,700 $ 3,696 5.370%, 06/20/97 40,000 39,887 5.650%, 07/16/97 6,000 5,958 5.670%, 07/28/97 5,000 4,955 Virginia Electric & Power 5.650%, 07/16/97 8,000 7,943 Waste Management Technologies 5.580%, 06/24/97 25,000 24,911 5.650%, 06/27/97 5,000 4,980 5.720%, 08/12/97 14,700 14,532 ---------- Total Commercial Paper (Cost $628,321) 628,321 ---------- CORPORATE OBLIGATIONS (15.5%) FINANCE (10.0%) American General Finance 7.700%, 11/15/97 5,000 5,034 8.250%, 01/15/98 1,250 1,269 American General, MTN 9.750%, 10/15/97 2,650 2,690 9.950%, 10/29/97 2,100 2,136 Associates of North America 5.875%, 08/15/97 750 750 6.625%, 11/15/97 16,755 16,811 8.125%, 01/15/98 1,000 1,014 Bank America, MTN 6.875%, 11/20/97 2,000 2,009 BAT Capital, MTN 6.470%, 09/15/97 10,000 10,022 Beneficial 9.125%, 02/15/98 1,875 1,914 Caterpillar Finance (C) 5.619%, 07/28/97 1,000 1,000 Corestates Capital (C) 5.610%, 09/02/97 30,000 30,000 Dean Witter Discover 6.000%, 03/01/98 19,865 19,873 First Chicago, MTN 11.150%, 10/31/97 5,000 5,102 Ford Motor Credit, MTN 6.450%, 02/05/98 5,000 5,018 - -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- Household Finance, MTN (C) 5.460%, 08/04/97 $ 5,000 $ 5,000 International Lease Finance, MTN 7.500%, 01/15/98 3,000 3,030 5.750%, 02/02/98 5,000 4,997 5.740%, 02/03/98 5,000 4,997 International Lease Finance 5.840%, 06/09/97 5,000 5,000 5.625%, 03/01/98 4,800 4,791 NationsBank 6.625%, 01/15/98 1,000 1,004 Texaco Capital 8.650%, 01/30/98 2,000 2,035 Toyota Motor Credit, MTN 7.750%, 12/19/97 1,500 1,514 ---------- Total Finance 137,010 ---------- INDUSTRIAL (2.8%) Ford Capital 9.750%, 06/05/97 2,150 2,151 9.375%, 01/01/98 6,351 6,476 Philip Morris 8.750%, 06/15/97 2,000 2,002 9.250%, 12/01/97 15,180 15,414 6.375%, 01/15/98 1,000 1,003 Rockwell International 7.625%, 02/17/98 1,000 1,010 Smithkline Beecham, MTN 6.200%, 01/20/98 5,250 5,261 Walt Disney 8.000%, 12/19/97 3,595 3,634 Waste Management Technologies 8.125%, 02/01/98 2,000 2,029 ---------- Total Industrial 38,980 ---------- UTILITIES (2.7%) Hydro-Quebec, MTN 7.120%, 12/19/97 2,500 2,517 Northern State Power 5.875%, 10/01/97 12,000 12,004 Pacific Gas & Electric, MTN 6.900%, 06/23/97 4,500 4,503 Pacific 5.880%, 10/15/97 5,000 4,997
99 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- UTILITIES--CONTINUED Pacificorp, MTN 8.850%, 06/20/97 $10,000 $ 10,014 Southern California Edison 5.875%, 02/01/98 2,500 2,499 ---------- Total Utilities 36,534 ---------- Total Corporate Obligations (Cost $212,524) 212,524 ---------- BANK NOTES (7.6%) Boatmans National Bank (C) 5.690%, 06/17/97 25,000 25,000 FCC National Bank (C) 5.640%, 05/08/98 15,000 14,993 FCC National Bank 5.880%, 11/05/97 25,000 25,003 Fifth Third Bank 5.430%, 06/12/97 10,000 10,000 Morgan Guaranty Trust 5.950%, 06/06/97 19,300 19,301 PNC Bank (C) 5.628%, 06/06/97 10,000 10,000 ---------- Total Bank Notes (Cost $104,297) 104,297 ---------- U.S. GOVERNMENT AGENCY OBLIGATIONS (6.6%) FNMA (C) 5.350%, 09/29/97 25,000 24,996 FNMA, MTN (C) 5.360%, 11/14/97 40,000 39,991 FNMA, MTN Ser B (C) 5.250%, 09/03/97 20,000 19,997 SLMA Callable 08/18/97 @100 5.370%, 02/08/99 5,000 4,987 ---------- Total U.S. Government Agency Obligations (Cost $89,971) 89,971 ---------- ASSET-BACKED SECURITIES (5.7%) Americredit Auto Receivables Trust, Ser 1997-A, Cl A1 5.515%, 04/06/98 20,452 20,453 - -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- Americredit Auto Receivables Trust, Ser 1996-D, Cl A1 5.425%, 12/12/97 $11,936 $ 11,939 Americredit Auto Receivables Trust, Ser 1997-B, Cl A 5.790%, 06/12/98 30,000 30,000 Chase Manhattan Auto Owner Trust, Ser 1997-A, Cl A1 5.545%, 04/10/98 6,789 6,789 Ford Credit Auto Owner Trust, Ser 1996-B, Cl A1 5.514%, 10/15/97 1,351 1,352 Navistar Financial Owner Trust, Ser 1996-B, Cl A1 5.490%, 11/20/97 910 911 Olympic Automobile Recievable Trust, Ser 1996-D 5.430%, 12/15/97 121 122 WFS Financial Owner Trust, Ser 1996-D, Cl A1 5.500%, 01/16/98 6,287 6,287 ---------- Total Asset-Backed Securities (Cost $77,853) 77,853 ---------- CERTIFICATES OF DEPOSIT (13.1%) Bank of America, Toronto 5.730%, 07/31/97 38,000 38,000 Bankers Trust New York (C) 5.630%, 10/16/97 25,000 24,995 Bankers Trust, Toronto 5.690%, 08/21/97 21,000 21,000 CIBC 5.970%, 03/19/98 5,000 4,999 Societe Generale 5.690%, 08/22/97 40,000 40,000 Swiss Bank 5.530%, 06/30/97 30,000 30,000 Swiss Bank (C) 6.149%, 06/19/97 10,000 10,000 Swiss Bank 5.490%, 07/09/97 10,000 10,000 ---------- Total Certificates Of Deposit (Cost $178,994) 178,994 ----------
100 - --------------------------------------------------------------------------
- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS (1.5%) U.S. Treasury Notes 7.250%, 02/15/98 $20,000 $ 20,200 ---------- Total U.S. Treasury Obligations (Cost $20,200) 20,200 ---------- REPURCHASE AGREEMENTS (6.6%) Deutsche Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $10,007,654 (collateralized by FHMLC obligation, par value $10,337,964, 6.092%, 10/01/32: market value $10,203,089) 10,003 10,003 Salomon Brothers 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $10,007,654 (collateralized by various FHLMC obligations, total par value $17,813,437, 5.500%-9.000, 08/01/00-06/01/26; and various FNMA obligations, total par value $18,383,048, 6.000%-9.000%, 12/01/01-05/01/27: total market value $10,246,600) 10,003 10,003 Swiss Bank 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $13,337,430 (collateralized by FNMA obligation, par value $17,012,000, 6.071%, 04/01/34: market value $13,664,762) 13,331 13,331 - -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - -------------------------------------------------------------------------------- Union Bank of Switzerland 5.55%, dated 05/30/97, matures 06/02/97, repurchase price $59,196,682 (collateralized by various FHLMC obligations, total par value $61,959,824, 0.000%-8.500%, 12/01/07-12/01/26; and FNMA obligation, par value $3,000,000, 6.400% 02/25/03: total market value $60,374,115) $59,169 $ 59,169 ---------- Total Repurchase Agreements (Cost $92,506) 92,506 ---------- Total Investments (102.5%) (Cost $1,404,666) 1,404,666 ---------- OTHER ASSETS AND LIABILITIES, NET (-2.5%) (34,567) ---------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 1,086,903,240 outstanding shares of beneficial interest 1,086,903 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 283,601,522 outstanding shares of beneficial interest 283,602 Accumulated net realized loss on investments (406) ---------- Total Net Assets (100.0%) $1,370,099 ---------- ---------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 ---------- ---------- Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 ---------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 101 - -------------------------------------------------------------------------- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS (25.9%) U.S. Treasury Notes 5.750%, 10/31/97 $30,000 $ 30,025 7.375%, 11/15/97 55,000 55,405 5.000%, 01/31/98 10,000 9,950 7.250%, 02/15/98 10,000 10,100 -------- Total U.S. Government Agency Obligations (Cost $105,480) 105,480 -------- REPURCHASE AGREEMENTS (73.2%) Barclays 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,009,183 (collateralized by FHLMC obligation, par value $8,960,000, 5.890%, 03/26/98; FNMA obligation, par value $4,315,000, 6.200%, 06/06/00; SLMA obligation, par value $7,000,000, 5.880%, 02/06/01: total market value $20,401,553) 20,000 20,000 Deutsche Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,040,319 (collateralized by various U.S. Treasury obligations, total par value $19,827,000, 5.750%-8.125%, 12/31/98- 05/15/21: total market value $20,432,188) 20,031 20,031 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- Merrill Lynch 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $98,954,749 (collateralized by various GNMA obligations, total par value $328,491,658, 7.000%-11.000%, 02/15/02-11/15/23: total market value $100,889,610) $98,909 $ 98,909 Morgan Stanley 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $99,259,385 (collateralized by various GNMA obligations, total par value $709,897,000, 0.698%-8.000%, 01/01/00-06/15/26: total market value $104,959,999) 99,214 99,214 Salomon Brothers 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,093,747 (collateralized by various U.S. Government Notes, total par value $20,034,000, 6.875%-8.875%, 10/15/97-03/31/00: total market value $20,489,252) 20,085 20,085 Swiss Bank 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,012,200 (collateralized by various U.S. Treasury obligations, total par value $19,625,000, 5.875%-7.250%, 06/30/00-08/15/22: total market value $20,426,087) 20,003 20,003
102 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--CONTINUED Union Bank of Switzerland 5.51%, dated 05/30/97, matures 06/02/97, repurchase price $20,015,030 (collateralized by various FHLMC obligations, total par value $20,185,000, 5.980%-7.554%, 02/26/04-07/31/06: total market value $20,410,150) $20,006 $ 20,006 -------- Total Repurchase Agreements (Cost $298,248) 298,248 -------- Total Investments (99.1%) (Cost $403,728) 403,728 -------- OTHER ASSETS AND LIABILITIES, NET (0.9%) 3,800 -------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 344,391,123 outstanding shares of beneficial interest 344,391 - ------------------------------------------------------------------------------- VALUE (000) - ------------------------------------------------------------------------------- Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 63,197,343 outstanding shares of beneficial interest $ 63,197 Accumulated net realized loss on investments (60) -------- Total Net Assets (100.0%) $407,528 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 -------- -------- Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 -------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 103 - -------------------------------------------------------------------------- TAX-EXEMPT MONEY MARKET FUND
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- MUNICIPAL BONDS (98.5%) ALABAMA (1.1%) McIntosh, Industrial Development Board, Ciba-Geigy Project, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 $ 3,500 $ 3,500 Special Care Facilities, Montgomery Hospital Revenue, RB, VRDN (FGIC) (C)(D) 3.900%, 06/04/97 1,400 1,400 -------- Total Alabama 4,900 -------- ALASKA (0.2%) Anchorage, GO, Ser A, (MBIA) 5.000%, 02/01/98 1,045 1,054 -------- ARIZONA (1.7%) Maricopa County, Pollution Control Authority, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 4,000 4,000 Pima County, Industrial Development Authority, Tuscon Electric Project, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 2,600 2,600 Scottsdale, GO 7.500%, 07/01/97 840 842 -------- Total Arizona 7,442 -------- ARKANSAS (0.2%) State, Industrial Development Financial Authority, Ser A, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/04/97 1,000 1,000 -------- - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- CALIFORNIA (1.7%) Contra Costa County, Multi-Family Mortgage, Delta Square Project, Ser A, RB, VRDN (C)(D)(E) 3.850%, 06/05/97 $ 4,200 $ 4,200 Higher Education Loan Authority, Ser A, VRDN, callable 06/01/98 @ 100 (C)(D)(E) 3.950%, 06/01/01 1,900 1,900 State, Higher Education Loan Authority, Student Loan, Ser 95E-5, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 1,200 1,200 -------- Total California 7,300 -------- COLORADO (1.9%) North Glen, Castle Garden Retirement Center, VRDN (C)(D)(E) 3.850%, 06/05/97 1,200 1,200 State, TRAN, Ser A, RB 4.500%, 06/27/97 7,000 7,003 -------- Total Colorado 8,203 -------- DELAWARE (0.4%) State Educational Development Authority, VRDN (C)(D)(E) 4.225%, 06/05/97 1,875 1,875 -------- FLORIDA (10.3%) Citrus Park, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 1,500 1,500 Dade County, Water & Sewer System, Ser 94, RB, VRDN (FGIC) (C)(E) 3.850%, 06/04/97 8,000 8,000
104 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- FLORIDA--CONTINUED Jacksonville, TECP 3.400%, 06/09/97 $ 1,000 $ 1,000 3.500%, 06/26/97 10,000 10,000 Jacksonville, Pollution Control Revenue, TECP 3.500%, 06/12/97 5,000 5,000 Local Government, TECP 3.450%, 06/16/97 4,000 4,000 3.550%, 06/19/97 5,500 5,500 Pinellas County, TECP 3.750%, 07/01/97 3,600 3,600 State Board of Education, Capital Outlay, GO 6.500%, 06/01/97 4,575 4,575 Sunshine State Government, Finance Commission Revenue, TECP 3.500%, 06/12/97 1,400 1,400 -------- Total Florida 44,575 -------- GEORGIA (5.0%) Barrow County School District, Ser 97, GO 4.000%, 02/01/98 1,000 1,000 Burke County, Development Authority Pollution Control, RB (AMBAC) 3.600%, 12/01/97 1,500 1,500 Burke County, Oglethorpe Power, Ser A, VRDN (FGIC)(C)(D) 3.850%, 06/04/97 4,400 4,400 Fulton County, Development Authority, American Red Cross Project, RB, VRDN (C)(D)(E) 3.950%, 06/05/97 1,500 1,500 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- GEORGIA--CONTINUED Gordon County, Development Authority, Sara Lee Project, RB, VRDN (C)(D) 3.950%, 06/05/97 $ 1,400 $ 1,400 Lafayette, Industrial Development Authority, Blue-Bird Project, Ser 1991, VRDN (C)(D)(E) 3.950%, 06/05/97 1,000 1,000 Marietta Housing Finance Authority, Franklin Walk Apartments Project, VRDN (C) 3.975%, 06/05/97 1,600 1,600 Monroe County, Industrial Development Authority, Forsyth Inns Project, RB, VRDN (C)(D)(E) 3.950%, 06/04/97 2,525 2,525 Municipal Electric Authority, VRDN (FGIC) (C)(D) 4.100%, 06/05/97 3,000 3,000 Private College Facilities Authority, Emory University, RB, VRDN Optional Put 12/01/97 @ 100, (C)(D)(E) 3.700%, 12/01/04 3,465 3,465 -------- Total Georgia 21,390 -------- IDAHO (1.6%) Nez Pierce County, Pollution Control Board, Potlatch Corp. Project, RB, VRDN (C)(D)(E) 3.900%, 06/05/97 3,000 3,000 Idaho State, TAN, GO 4.500%, 06/30/97 4,000 4,002 -------- Total Idaho 7,002 --------
105 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- ILLINOIS (4.7%) Bloomington, Airport Authority, VRDN (C)(D)(E) 3.950%, 06/04/97 $ 1,500 $ 1,500 Chicago, Tender Notes, GO (E) 3.650%, 02/05/98 2,000 2,000 DuPage County, First Preservation District, GO, Pre-Refunded 11/01/97 @ 102 (F) 8.100%, 11/01/06 1,200 1,245 Educational Facilities, Chicago Children's Museum, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 1,600 1,600 Health Facilities Authority, Advocate Healthcare Network, Ser B, RB, VRDN (C)(D) 3.950%, 06/04/97 3,000 3,000 Illinois Health Facility Authority, RB, VRDN (C)(D) 4.000%, 06/05/97 3,000 3,000 Savanna, Industrial Development Authority, Metform Project, Ser B, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 1,400 1,400 Savanna, Industrial Development Authority, Ser A, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 500 500 State, Health Facilities Authority, Streeterville Project, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 2,000 2,000 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- State, Health Facilities Authority, University of Chicago Hospital Project, Ser C, VRDN (MBIA) (C)(D) 3.850%, 06/04/97 $ 4,000 $ 4,000 -------- Total Illinois 20,245 -------- INDIANA (5.6%) Allen County, Industrial Economic Development, Mattel Power Wheels Project, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 1,500 1,500 Fort Wayne, Industrial Economic Development Authority, ND Tech Project, RB, VRDN, AMT (C)(D)(E) 4.050%, 06/04/97 1,000 1,000 Hammond Industrial Local Public, Adv. Fdg Project, Ser A-2, GO 4.200%, 01/08/98 6,000 6,017 Health Facility Authority, Clarian Health Partners, Ser B, RB, VRDN, (C)(D)(E) 3.900%, 06/04/97 2,000 2,000 Indianapolis, Industrial Economic Development Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 3,500 3,500 Indianapolis, Industrial Multi-Family Housing Authority, Crossing Partners Project, RB, VRDN, AMT (C)(D)(E) 4.150%, 06/04/97 8,700 8,700
106 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- INDIANA--CONTINUED Rockport County, Pollution Control Authority, Aep Generating Project, Ser B, RB, VRDN (AMBAC) (C)(D) 4.150%, 06/02/97 $ 1,600 $ 1,600 -------- Total Indiana 24,317 -------- IOWA (0.6%) West Des Moines, Commercial Development Authority, Greyhound Lines Project, VRDN (C)(D)(E) 3.800%, 06/04/97 2,500 2,500 -------- KENTUCKY (0.9%) Jefferson County, Industrial Building Fisher-Klosterman Project, RB, VRDN (C)(D)(E) 4.050%, 06/05/97 2,500 2,500 State, Economic Development Financial Authority Hospital Facilities-Baptist Healthcare, RB, VRDN (C)(D)(E) 3.850%, 06/05/97 1,400 1,400 -------- Total Kentucky 3,900 -------- LOUISIANA (2.4%) Lake Charles, Harbor & Terminal District Authority, Reynolds Metals Project, VRDN (C)(D)(E) 3.900%, 06/04/97 3,000 3,000 Plaqeumines, Port Facilities, International Marine Terminal Project, Ser B, RB, Optional Put 03/15/98 @ 100 (D)(E) 3.750%, 03/15/06 1,000 1,000 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- Louisiana Port Authority, Occidental Petroleum Project, RB, VRDN (C)(D)(E) 3.800%, 06/04/97 $ 4,500 $ 4,500 State, Offshore Terminal Authority Deepwater Port, Loop Inc - First Stage Project, Ser A, RB, VRDN, (C)(E) 3.850%, 06/04/97 2,000 2,000 -------- Total Louisiana 10,500 -------- MAINE (1.0%) State, TAN, GO 4.500%, 06/27/97 4,500 4,502 -------- MARYLAND (2.7%) Baltimore County, Allied Signal Project, RB, VRDN (C)(D)(E) 4.000%, 06/04/97 1,000 1,000 Baltimore, Industrial Development Authority, Days Inn of America Project, RB Callable 12/01/97 @ 100 (F) 12.625%, 12/01/04 2,000 2,087 Montgomery County, Housing Opportunities Multi-Family Commission, Ser A, RB 3.700%, 11/13/97 3,650 3,650 State, Health & Higher Education Authority, Pooled Loan Program, Ser B, VRDN (C)(D)(E) 3.850%, 06/04/97 5,000 5,000 -------- Total Maryland 11,737 --------
107 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- MICHIGAN (3.4%) Michigan City, Industrial Economic Development, Performance Packaging, RB, VRDN (C)(D)(E) 4.150%, 06/04/97 $ 1,000 $ 1,000 Midland County, Economic Development, Dow Chemical Project, Ser B, RB, VRDN, (C)(D) 4.000%, 06/02/97 5,575 5,575 Oakland County, Economic Development, VRDN (C)(D)(E) 4.100%, 06/04/97 1,000 1,000 State, Housing Development Authority, WoodLand Meadows, RB, VRDN, AMT (C)(D)(E)(F) 4.050%, 06/04/97 1,000 1,000 State, Housing Development Authority, Harbortown, VRDN (C)(D)(E) 3.975%, 06/05/97 3,000 3,000 State, Strategic Industrial Development Authority, Norcor Manufacturing Project, RB, VRDN (C)(D)(E) 4.000%, 06/03/97 3,000 3,000 -------- Total Michigan 14,575 -------- MISSISSIPPI (0.8%) Jackson County, Chevron USA Project, Ser 93, RB, VRDN (C)(D) 4.050%, 06/02/97 3,500 3,500 -------- - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- MISSOURI (0.7%) Environmental Improvement and Energy Resource, Utilicorp United Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 $ 700 $ 700 State, Industrial Development Authority, Bachman Machine Project, Ser A, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 90 90 State, Industrial Development Authority, Plastic Enterprises Project, Ser A, RB, VRDN, AMT (C)(D)(E)(F) 4.200%, 06/04/97 385 385 State, Industrial Development Authority, Precision Stainless Project, Ser I, RB, VRDN, AMT (C)(D)(E) 4.200%, 06/04/97 70 70 State, Custody Receipt, Third Street Building Project, Ser A, GO, VRDN (C)(D)(E) 4.200%, 06/04/97 2,000 2,000 -------- Total Missouri 3,245 -------- NEVADA (6.3%) Clark County, Airport Improvement Authority, Ser A, VRDN, (MBIA) (C)(D) 3.850%, 06/04/97 10,000 10,000 Clark County, Airport Improvement, Sub Lien, Ser A-1, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 4,300 4,300
108 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- NEVADA--CONTINUED Clark County, Nevada Power Project, Ser A, VRDN, AMT (C)(D)(E) 4.150%, 06/04/97 $ 5,000 $ 5,000 Clark County, School District, VRDN (C)(D)(E) 3.960%, 06/05/97 8,000 8,000 -------- Total Nevada 27,300 -------- NEW HAMPSHIRE (5.5%) State, Business Finance Authority, TECP 3.650%, 07/29/97 7,000 7,000 State, Business Finance Authority, Pollution Control, Ser D, VRDN, AMT (C) 4.000%, 06/04/97 6,000 6,000 State, Business Finance Authority, TECP (E) 3.400%, 06/11/97 5,000 5,000 State, Housing Finance Authority, Multi-Family, Fairways Project, Ser 1, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/04/97 5,000 5,000 State, Pollution Control Authority, CT Power and Light, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 800 800 -------- Total New Hampshire 23,800 -------- NEW MEXICO (2.2%) Hurley, New Mexico, Pollution Control Authority, RB, VRDN (C)(D)(E) 4.150%, 06/02/97 2,200 2,200 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- NEW MEXICO--CONTINUED State, Educational Assistance Foundation, Student Loan Program, VRDN (AMBAC) (C)(D) 4.100%, 06/05/97 $ 3,490 $ 3,490 State, Mortgage Financial Authority, Ser B-CR-123, Optional Put 07/01/97 @ 100 3.400%, 07/01/17 3,995 3,995 -------- Total New Mexico 9,685 -------- NEW YORK (1.8%) Urban Development Corporation, Senior Lien, VRDN (C)(D) 3.960%, 06/05/97 7,600 7,600 -------- NORTH CAROLINA (2.1%) Educational Facilities, Guilford College, VRDN (C)(D)(E) 4.000%, 06/04/97 2,300 2,300 Mecklenburg County, Industrial Facilities & Pollution Control, Sterigenics International Project, RB, VRDN, AMT (C)(D)(E) 4.250%, 06/04/97 2,000 2,000 State Municipal Power Authority, Finance Authority, TECP (E) 3.400%, 06/10/97 5,000 5,000 -------- Total North Carolina 9,300 -------- NORTH DAKOTA (0.4%) Mercer County, Solid Waste Disposal Authority, United Power Project, RB, VRDN, AMT (C)(D)(E) 3.550%, 06/02/97 1,900 1,900 -------- OHIO (5.1%) Columbus, Sewer Revenue (C)(D) 3.800%, 06/05/97 9,600 9,600
109 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- OHIO--CONTINUED State, Air Quality Development Authority, JMG Limited Partnership, Ser A, RB, VRDN, AMT (C)(D)(E) 3.900%, 06/04/97 $ 3,000 $ 3,000 State, Higher Education Authority, Lake Erie Project, RB, VRDN (C)(D)(E) 3.950%, 06/05/97 5,100 5,100 State, Pollution Control Authority, Duquesne Project, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 3,000 3,000 Trumbull County, St. Joseph Riverside Hospital Project, RB, Pre-Refunded 11/01/97 @ 102 (F) 7.750%, 11/01/13 1,500 1,555 -------- Total Ohio 22,255 -------- PENNSYLVANIA (3.8%) Beaver County, Industrial Development Authority, Duquesne Light Company Project, Ser B, VRDN (C)(D)(E) 3.800%, 06/04/97 1,000 1,000 Philadelphia School District, TRAN 4.500%, 06/30/97 5,000 5,002 Philadelphia, TRAN 4.500%, 06/30/97 4,000 4,002 State, Ser A, VRDN Pre-Refunded 11/01/99 @ 101.5, (C)(F) 3.960%, 06/05/97 6,500 6,500 -------- Total Pennsylvania 16,504 -------- - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- RHODE ISLAND (0.9%) State, TAN 4.500%, 06/30/97 $ 4,000 $ 4,002 -------- SOUTH CAROLINA (1.2%) York County, Pollution Control Revenue, Ser N-4, VRDN, Optional Put on 9/15/97 @ 100 (C)(D)(E) 3.550%, 09/15/14 5,000 5,000 -------- TENNESSEE (2.5%) Covington, Industrial Development Board, Charms Project, RB, VRDN, AMT (C)(D)(E) 4.050%, 06/04/97 3,000 3,000 Hamilton County, Industrial Development Board, Tennessee Aquarium Project, VRDN (C)(D)(E) 3.950%, 06/05/97 3,000 3,000 Memphis-Shelby County, Industrial Development Board, Ponderosa Fibres American Project, RB, VRDN, AMT (C)(D)(E) 4.100%, 06/05/97 1,600 1,600 Nashville & Davidson County, Industrial Development Authority, Multi-Family Mortgage, Chimneytop II Project, RB, VRDN (C)(D)(E) 3.950%, 06/02/97 1,325 1,325 Nashville & Davidson County, Vanderbilt University, Ser 85A, VRDN, Optional Put 1/15/98, (C)(D)(E) 3.650%, 01/15/15 2,000 2,002 -------- Total Tennessee 10,927 --------
110 - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- TEXAS (9.2%) Brazos River, TECP (E) 3.450%, 06/09/97 $ 2,700 $ 2,700 Brownsville, Utility System, TECP 3.450%, 06/12/97 4,000 4,000 Georgetown, Higher Education Financing Authority, Southwestern University Project, Ser 84, RB, VRDN (C)(D)(E) 3.950%, 06/04/97 2,000 2,000 Harris County, Health Facilities Authority, Memorial Hospital Project, Ser B, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 1,500 1,500 Harris County, Housing Finance Corporation, Ser 1985, VRDN (C)(D)(E) 4.225%, 06/05/97 900 900 Harris County, Industrial Development Authority, Lubrizol Project, RB, VRDN (C)(D) 3.850%, 06/04/97 1,600 1,600 Harris County, Toll Roads, Ser H, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 5,500 5,500 Lone Star, Airport Improvement, Ser A2, RB, VRDN (C)(D) 4.000%, 06/02/97 1,700 1,700 South Higher Education Authority, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/04/97 5,000 5,000 State, Public Finance Authority, TECP 3.650%, 08/11/97 5,000 5,000 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- State, TAN 4.750%, 08/29/97 $ 10,000 $ 10,019 -------- Total Texas 39,919 -------- UTAH (1.5%) Carbon County, Pollution Control Authority, Pacificorp Project, RB, VRDN (AMBAC) (C)(D) 4.150%, 06/02/97 1,600 1,600 Intermountain Power Agency, Ser E, RB, Optional Put 09/15/97 @ 100 (E) 3.500%, 07/01/14 1,000 1,000 Intermountain Power Agency, Optional Put 06/16/97 @ 100, RB, VRDN (C)(D)(E) 3.930%, 06/17/97 4,000 4,000 -------- Total Utah 6,600 -------- VERMONT (0.2%) State, Ser B, GO, 4.600%, 08/01/97 1,000 1,001 -------- TAX-EXEMPT MONEY MARKET FUND VIRGINIA (3.6%) Bedford County, Industrial Development Authority, VRDN (C)(D)(E) 4.000%, 06/05/97 2,500 2,500 Chesterfield County, Industrial Development Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 3,000 3,000 Commonwealth, Ser 1994, VRDN (C)(D) 4.060%, 06/05/97 4,000 4,000
111 STATEMENT OF NET ASSETS------ ----------------------------------------------- ---------------------STI CLASSIC FUNDS MAY 31, 1997
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- VIRGINIA--CONTINUED Front Royal & Warren County, Industrial Development Authority, Pen Tab Industries Project, RB, VRDN, AMT (C)(D)(E) 4.000%, 06/05/97 $ 3,000 $ 3,000 Peninsula Port Authority, Dominion Term Project, Ser 1987C, VRDN (C)(D)(E) 3.950%, 06/02/97 3,300 3,300 -------- Total Virginia 15,800 -------- WASHINGTON (2.6%) Pierce County, Washington Economic Development, Weyerhaeuser Real Estate Project, RB, VRDN (C)(D) 3.850%, 06/04/97 3,000 3,000 Port of Seattle, VRDN (C)(D)(E) 3.900%, 06/04/97 1,600 1,600 State Public Power Supply System, Nuclear Project #1, 1993-1A3, RB, VRDN (C)(D)(E) 3.850%, 06/04/97 3,500 3,500 State Student Loan Finance Association, Ser B, RB, VRDN, AMT (C)(D)(E) 3.950%, 06/05/97 3,000 3,000 -------- Total Washington 11,100 -------- WEST VIRGINIA (0.9%) Marshall County, Pollution Control Authority, Allied Signal Project, RB, VRDN (C)(D)(E) 4.050%, 06/04/97 2,000 2,000 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- Marshall County, PPG Industries Project, RB, VRDN (C)(D)(E) 4.100%, 06/05/97 $ 2,000 $ 2,000 -------- Total West Virginia 4,000 -------- WISCONSIN (0.7%) Milwaukee, Ser BY, GO 7.250%, 06/15/97 1,000 1,001 Milwaukee, School Order Notes, Ser B 4.250%, 08/21/97 1,000 1,002 Racine, Wisconsin Promissory Notes, Ser 96 B, GO 3.700%, 12/15/97 1,165 1,165 -------- Total Wisconsin 3,168 -------- WYOMING (1.1%) Sweetwater, Ser A, RB, VRDN (C)(D)(E) 3.900%, 06/04/97 4,600 4,600 -------- Total Municipal Bonds (Cost $428,223) 428,223 -------- CASH EQUIVALENT (1.3%) AIM Management Institutional Tax-Free Portfolio 5,853 5,853 -------- Total Cash Equivalent (Cost $5,853) 5,853 -------- Total Investments (99.8%) (Cost $434,076) 434,076 -------- OTHER ASSETS AND LIABILITIES (0.2%) Total Other Assets and Liabilities, Net 943 --------
112 - -------------------------------------------------- ------------------------
- ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 333,003,932 outstanding shares of beneficial interest $333,004 Fund shares of the Investor Shares (unlimited authorization -- no par value) based on 102,018,739 outstanding shares of beneficial interest 102,019 - ------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------- Accumulated net realized loss on investments $ (4) -------- Total Net Assets (100.0%) $435,019 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 1.00 -------- -------- Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares $ 1.00 -------- --------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 110. 113 STATEMENT OF NET ASSETS - ------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS ADR American Depository Receipt AMBAC Security insured by the American Municipal Bond Assurance Company AMT Alternative Minimum Tax ARM Adjustable Rate Mortgage Cl Class COP Certificate of Participation CV Convertible Security ETM Escrowed to Maturity F Foreign Registry Shares FGIC Security insured by the Financial Guaranty Insurance Corporation FHA Federal Housing Authority FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association FSA Security insured by Financial Security Assurance GDR Global Depository Receipt GDS Global Depository Shares GNMA Government National Mortgage Association GO General Obligation LYON Liquid Yield Option Note MBIA Security insured by the Municipal Bond Investors Assurance MTN Medium Term Note RB Revenue Bond REIT Real Estate Investment Trust REMIC Real Estate Mortgage Investment Conduit Ser Series SLMA Student Loan Marketing Association STRIPS Separately Traded Registered Interest and Principal Security TAN Tax Anticipation Note TECP Tax Exempt Commercial Paper TRAN Tax & Revenue Anticipation Note VRDN Variable Rate Demand Note * Non-income producing securities (A) Zero Coupon Bond (B) Private Placement Security (C) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1997. (D) Put and demand features exist requiring the issuer to repurchase the instrument prior to maturity. (E) Securities are held in connection with a letter of credit issued by a major bank. (F) Collateralized by U.S. Government Securities (G) In local currency
114 (This page has been left blank intentionally.) 115 STATEMENT OF OPERATIONS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
MID-CAP SMALL CAP CAPITAL VALUE INCOME EQUITY EQUITY GROWTH STOCK FUND FUND FUND FUND ------------ --------- ---------- --------- 06/01/96- 06/01/96- 01/31/97*- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 (000) (000) (000) (000) ------------ --------- ---------- --------- Income: Interest Income... $ 5,035 $ 1,386 $ 92 $ 6,139 Dividend Income... 44,675 2,627 765 18,021 Less: Foreign Taxes Withheld........ -- -- -- -- ------------ --------- ---------- --------- Total Investment Income....... 49,710 4,013 857 24,160 ------------ --------- ---------- --------- Expenses: Investment Advisory Fees... 12,026 3,328 322 14,003 Less: Investment Advisory Fees Waived.......... -- (318) (48) (1,226) Less: Contribution from Advisor.... -- -- -- -- Administrator Fees............ 1,009 194 18 818 Transfer Agent Fees -- Trust Shares.......... 16 15 6 16 Transfer Agent Fees -- Investor Shares.......... 103 31 -- 166 Transfer Agent Fees -- Flex Shares.......... 53 24 -- 37 Transfer Agent Out of Pocket Fees............ 114 22 1 98 Printing Expenses........ 102 20 2 85 Custody Fees...... 73 14 1 62 Professional Fees............ 77 15 2 63 Trustee Fees...... 22 4 -- 19 Registration Fees............ 138 27 22 58 Distribution Fees -- Investor Shares.......... 470 82 -- 1,345 Less: Distribution Fees Waived -- Investor Shares.......... (32) (26) -- (236) Distribution Fees -- Flex Shares.......... 444 74 -- 213 Less: Distribution Fees Waived -- Flex Shares..... (11) (20) -- (12) Insurance and Other Fees...... 46 14 -- 40 Amortization of Deferred Organization Costs........... 11 -- 10 8 ------------ --------- ---------- --------- Total Expenses..... 14,661 3,500 336 15,557 ------------ --------- ---------- --------- Net Investment Income (Loss)...... 35,049 513 521 8,603 ------------ --------- ---------- --------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold............ 243,189 33,978 1,757 221,554 Net Realized Loss on Foreign Currency Transactions.... -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency........ -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments..... 33,953 4,912 7,644 43,851 ------------ --------- ---------- --------- Total Net Realized and Unrealized Gain on Investments... 277,142 38,890 9,401 265,405 ------------ --------- ---------- --------- Net Increase in Net Assets from Operations........ $312,191 $ 39,403 $9,922 $ 274,008 ------------ --------- ---------- --------- ------------ --------- ---------- ---------
* Commencement of Operations Amounts designated as "--" are either $0 or round to $0. 116 - --------------------------------------------------------------------------------
EMERGING INTERNATIONAL INVESTMENT GRADE FLORIDA TENNESSEE BALANCED MARKETS EQUITY INDEX INTERNATIONAL SUNBELT TAX-EXEMPT BOND TAX-EXEMPT TAX-EXEMPT FUND EQUITY FUND FUND EQUITY FUND EQUITY FUND FUND BOND FUND BOND FUND -------- ----------- ------------- ------------- ----------- ---------------- ---------- ---------- 06/01/96- 01/31/97*- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 (000) (000) (000) (000) (000) (000) (000) (000) -------- ----------- ------ ------------- ----------- ------- ---------- ----- Income: Interest Income... $ 3,654 $ 49 $ 13 $ 922 $ 18 $ 8,107 $2,318 $282 Dividend Income... 1,113 272 1,382 6,838 2,081 -- -- -- Less: Foreign Taxes Withheld........ -- (14) (108) (645) -- -- -- -- -------- ----------- ------ ------------- ----------- ------- ---------- ----- Total Investment Income....... 4,767 307 1,287 7,115 2,099 8,107 2,318 282 -------- ----------- ------ ------------- ----------- ------- ---------- ----- Expenses: Investment Advisory Fees... 1,177 137 658 4,494 4,842 1,272 293 35 Less: Investment Advisory Fees Waived.......... (151) (53) (80) (157) (442) (189) (73) (35) Less: Contribution from Advisor.... -- -- -- -- -- -- -- (10) Administrator Fees............ 83 7 48 240 283 115 31 4 Transfer Agent Fees -- Trust Shares.......... 16 5 18 12 16 16 16 16 Transfer Agent Fees -- Investor Shares.......... 17 -- 21 14 44 34 13 12 Transfer Agent Fees -- Flex Shares.......... 17 -- 15 17 20 15 14 13 Transfer Agent Out of Pocket Fees............ 9 1 9 22 33 15 3 -- Printing Expenses........ 8 6 7 21 30 13 3 -- Custody Fees...... 6 34 70 484 21 9 2 1 Professional Fees............ 6 1 6 15 22 9 2 -- Trustee Fees...... 2 -- 2 5 7 3 1 -- Registration Fees............ 21 11 5 111 31 12 6 1 Distribution Fees -- Investor Shares.......... 15 -- 22 21 119 148 6 3 Less: Distribution Fees Waived -- Investor Shares.......... (13) -- (14) (10) (39) (47) (6) -- Distribution Fees -- Flex Shares.......... 43 -- 10 33 45 51 27 23 Less: Distribution Fees Waived -- Flex Shares..... (14) -- (10) (15) (18) (15) (21) (8) Insurance and Other Fees...... 4 4 15 18 13 7 2 -- Amortization of Deferred Organization Costs........... -- 10 3 2 -- 8 -- -- -------- ----------- ------ ------------- ----------- ------- ---------- ----- Total Expenses..... 1,246 163 805 5,327 5,027 1,476 319 55 -------- ----------- ------ ------------- ----------- ------- ---------- ----- Net Investment Income (Loss)...... 3,521 144 482 1,788 (2,928) 6,631 1,999 227 -------- ----------- ------ ------------- ----------- ------- ---------- ----- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold............ 11,411 80 4,148 31,885 24,062 2,924 (209) (11) Net Realized Loss on Foreign Currency Transactions.... -- (18) (50) (949) -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency........ -- -- (21) 16 -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments..... 5,223 2,108 (466) 51,213 (18,818) 2,169 1,157 153 -------- ----------- ------ ------------- ----------- ------- ---------- ----- Total Net Realized and Unrealized Gain on Investments... 16,634 2,170 3,611 82,165 5,244 5,093 948 142 -------- ----------- ------ ------------- ----------- ------- ---------- ----- Net Increase in Net Assets from Operations........ $ 20,155 $2,314 $4,093 $83,953 $ 2,316 $11,724 $2,947 $369 -------- ----------- ------ ------------- ----------- ------- ---------- ----- -------- ----------- ------ ------------- ----------- ------- ---------- -----
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 117 STATEMENT OF OPERATIONS (concluded) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
GEORGIA INVESTMENT TAX-EXEMPT GRADE BOND SHORT-TERM BOND FUND FUND BOND FUND ---------- ---------- ---------- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 (000) (000) (000) ---------- ---------- ---------- Interest Income............... $1,875 $43,028 $5,793 ---------- ---------- ---------- Expenses: Investment Advisory Fees.... 246 4,793 624 Less: Investment Advisory Fees Waived............... (64) (645) (138) Administrator Fees.......... 25 435 65 Less: Administrator Fees Waived.................... -- -- -- Transfer Agent Fees -- Trust Shares.................... 16 16 16 Transfer Agent Fees -- Investor Shares........... 13 46 13 Transfer Agent Fees -- Flex Shares.................... 14 19 13 Transfer Agent Out of Pocket Fees...................... 3 54 8 Printing Expenses........... 2 49 7 Custody Fees................ 2 34 5 Professional Fees........... 2 34 5 Trustee Fees................ 1 11 2 Registration Fees........... 5 64 13 Distribution Fees -- Investor Shares........... 6 153 5 Less: Distribution Fees Waived -- Investor Shares.................... (6) (59) (5) Distribution Fees -- Flex Shares.................... 46 54 10 Less: Distribution Fees Waived -- Flex Shares..... (26) (24) (10) Insurance and Other Fees.... 1 22 3 Amortization of Deferred Organization Costs........ -- 8 5 ---------- ---------- ---------- Total Expenses.......... 286 5,064 641 ---------- ---------- ---------- Net Investment Income................ 1,589 37,964 5,152 ---------- ---------- ---------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold........... 7 (5,113) (321) Net Change in Unrealized Appreciation on Investments............... 882 10,558 1,027 ---------- ---------- ---------- Total Net Realized and Unrealized Gain (Loss) on Investments........ 889 5,445 706 ---------- ---------- ---------- Net Increase in Net Assets from Operations............. $2,478 $43,409 $5,858 ---------- ---------- ---------- ---------- ---------- ----------
Amounts designated as "--" are either $0 or round to $0. 118 - --------------------------------------------------------------------------------
SHORT-TERM PRIME TAX-EXEMPT U.S. TREASURY LIMITED-TERM QUALITY U.S. GOVERNMENT MONEY SECURITIES FEDERAL MORTGAGE U.S. GOVERNMENT MONEY MARKET SECURITIES MONEY MARKET FUND SECURITIES FUND SECURITIES FUND FUND MARKET FUND FUND ------------- ---------------- --------------- ------------ ---------------- ---------- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 06/01/96- 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 05/31/97 (000) (000) (000) (000) (000) (000) ------ ------ ------ ------------ ------- ---------- Interest Income............... $1,410 $6,871 $1,411 $82,489 $20,206 $15,230 ------ ------ ------ ------------ ------- ---------- Expenses: Investment Advisory Fees.... 156 691 150 9,767 2,455 2,361 Less: Investment Advisory Fees Waived............... (73) (151) (59) (2,181) (519) (674) Administrator Fees.......... 16 71 14 1,009 254 289 Less: Administrator Fees Waived.................... -- -- -- (348) (41) -- Transfer Agent Fees -- Trust Shares.................... 16 16 16 16 16 16 Transfer Agent Fees -- Investor Shares........... 14 13 13 35 23 18 Transfer Agent Fees -- Flex Shares.................... 14 14 15 -- -- -- Transfer Agent Out of Pocket Fees...................... 2 6 1 107 34 36 Printing Expenses........... 2 6 1 95 26 29 Custody Fees................ 1 4 1 69 21 22 Professional Fees........... 1 5 1 80 21 23 Trustee Fees................ -- 1 -- 21 7 7 Registration Fees........... 17 30 19 162 27 38 Distribution Fees -- Investor Shares........... 7 6 10 551 106 149 Less: Distribution Fees Waived -- Investor Shares.................... (7) (6) (9) (208) (40) (59) Distribution Fees -- Flex Shares.................... 21 16 30 -- -- -- Less: Distribution Fees Waived -- Flex Shares..... (20) (16) (15) -- -- -- Insurance and Other Fees.... 1 3 1 25 8 9 Amortization of Deferred Organization Costs........ 4 2 2 8 8 8 ------ ------ ------ ------------ ------- ---------- Total Expenses.......... 172 711 191 9,208 2,406 2,272 ------ ------ ------ ------------ ------- ---------- Net Investment Income................ 1,238 6,160 1,220 73,281 17,800 12,958 ------ ------ ------ ------------ ------- ---------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold........... (25) 1 (17) (121) (51) 10 Net Change in Unrealized Appreciation on Investments............... 88 303 214 -- -- -- ------ ------ ------ ------------ ------- ---------- Total Net Realized and Unrealized Gain (Loss) on Investments........ 62 304 197 (121) (51) 10 ------ ------ ------ ------------ ------- ---------- Net Increase in Net Assets from Operations............. $1,301 $6,464 $1,417 $73,160 $17,749 $12,968 ------ ------ ------ ------------ ------- ---------- ------ ------ ------ ------------ ------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 119 STATEMENT OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
SMALL CAP VALUE INCOME STOCK FUND MID-CAP EQUITY FUND EQUITY FUND -------------------------- -------------------------- ------------ 06/01/96- 06/01/95- 06/01/96- 06/01/95- 01/31/97*- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 (000) (000) (000) (000) (000) ------------ ------------ ------------ ------------ ------------ Operations: Net Investment Income (Loss)..................... $ 35,049 $ 33,101 $ 513 $ 1,365 $ 521 Net Realized Gain on Investments................ 243,189 196,134 33,978 29,513 1,757 Net Realized Loss on Foreign Currency Transactions...... -- -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency................... -- -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments............. 33,953 60,796 4,912 12,518 7,644 ------------ ------------ ------------ ------------ ------------ Increase in Net Assets from Operations......... 312,191 290,031 39,403 43,396 9,922 ------------ ------------ ------------ ------------ ------------ Distributions to Shareholders: Net Investment Income: Trust Shares............... (30,805) (29,124) (962) (1,285) (205) Investor Shares............ (2,820) (2,618) (17) (30) -- Flex Shares................ (606) (206) -- (1) -- Capital Gains: Trust Shares............... (166,191) (92,363) (24,244) (13,072) -- Investor Shares............ (18,030) (9,853) (1,770) (922) -- Flex Shares................ (5,570) (1,106) (676) (167) -- ------------ ------------ ------------ ------------ ------------ Total Distributions..... (224,022) (135,270) (27,669) (15,477) (205) ------------ ------------ ------------ ------------ ------------ Capital Transactions (1): Trust Shares: Proceeds from Shares Issued................... 380,339 371,542 113,386 133,402 126,046 Reinvestment of Cash Distributions............ 179,808 111,671 22,790 13,361 137 Cost of Shares Repurchased.............. (392,524) (369,739) (113,291) (44,487) (4,851) ------------ ------------ ------------ ------------ ------------ Increase (Decrease) in Net Assets From Trust Share Transactions............... 167,623 113,474 22,885 102,276 121,332 ------------ ------------ ------------ ------------ ------------ Investor Shares: Proceeds from Shares Issued................... 31,242 31,177 5,664 10,027 -- Reinvestment of Cash Distributions............ 20,626 12,291 1,783 948 -- Cost of Shares Repurchased.............. (24,774) (19,420) (5,934) (2,010) -- ------------ ------------ ------------ ------------ ------------ Increase (Decrease) in Net Assets From Investor Share Transactions............... 27,094 24,048 1,513 8,965 -- ------------ ------------ ------------ ------------ ------------ Flex Shares: Proceeds from Shares Issued................... 43,363 24,893 5,680 5,125 -- Reinvestment of Cash Distributions............ 6,080 1,301 666 163 -- Cost of Shares Repurchased.............. (6,096) (1,416) (1,648) (450) -- ------------ ------------ ------------ ------------ ------------ Increase (Decrease) in Net Assets From Flex Share Transactions............... 43,347 24,778 4,698 4,838 -- ------------ ------------ ------------ ------------ ------------ Increase (Decrease) in Net Assets From Share Transactions............. 238,064 162,300 29,096 116,079 121,332 ------------ ------------ ------------ ------------ ------------ Total Increase (Decrease) in Net Assets.................. 326,233 317,061 40,830 143,998 131,049 ------------ ------------ ------------ ------------ ------------ Net Assets: Beginning of Period.......... 1,401,294 1,084,233 276,905 132,907 -- ------------ ------------ ------------ ------------ ------------ End of Period................ $1,727,527 $1,401,294 $317,735 $276,905 $131,049 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ (1) Shares Issued and Redeemed: Trust Shares: Shares Issued.............. 29,343 29,898 9,011 10,952 12,290 Shares Issued in Lieu of Cash Distributions....... 14,654 9,282 1,853 1,144 13 Shares Redeemed............ (30,076) (30,154) (9,008) (3,620) (466) ------------ ------------ ------------ ------------ ------------ Net Trust Share Transactions............ 13,921 9,026 1,856 8,476 11,837 ------------ ------------ ------------ ------------ ------------ Investor Shares: Shares Issued.............. 2,411 2,522 455 824 -- Shares Issued in Lieu of Cash Distributions....... 1,683 1,023 145 82 -- Shares Redeemed............ (1,906) (1,569) (472) (165) -- ------------ ------------ ------------ ------------ ------------ Net Investor Share Transactions............ 2,188 1,976 128 741 -- ------------ ------------ ------------ ------------ ------------ Flex Shares: Shares Issued.............. 3,360 2,014 459 419 -- Shares Issued in Lieu of Cash Distributions....... 500 108 55 14 -- Shares Redeemed............ (470) (113) (134) (37) -- ------------ ------------ ------------ ------------ ------------ Net Flex Share Transactions............ 3,390 2,009 380 396 -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
*Commencement of operations. Amounts designated as "--" are either $0 or round to $0. 120 - --------------------------------------------------------------------------------
INTERNATIONAL EMERGING EQUITY CAPITAL GROWTH FUND BALANCED FUND MARKETS EQUITY FUND INDEX FUND ----------------------- ------------------------ ------------------- -------------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 01/31/97*- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/97 05/31/96 (000) (000) (000) (000) (000) (000) (000) ---------- ------------ ------------- --------- ---------- ------------ ------------ Operations: Net Investment Income (Loss)..................... $ 8,603 $ 9,278 $ 3,521 $ 3,088 $ 144 $ 482 $ 800 Net Realized Gain on Investments................ 221,554 224,050 11,411 11,091 80 4,148 1,134 Net Realized Loss on Foreign Currency Transactions...... -- -- -- -- (18) (50) -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency................... -- -- -- -- -- (21) (7) Net Change in Unrealized Appreciation (Depreciation) on Investments............. 43,851 63,301 5,223 1,891 2,108 (466) 6,362 ---------- ------------ ------------- --------- ---------- ------------ ------------ Increase in Net Assets from Operations......... 274,008 296,629 20,155 16,070 2,314 4,093 8,289 ---------- ------------ ------------- --------- ---------- ------------ ------------ Distributions to Shareholders: Net Investment Income: Trust Shares............... (7,993) (9,644) (3,051) (2,933) -- (614) (1,048) Investor Shares............ (338) (570) (139) (115) -- (35) (59) Flex Shares................ -- (5) (77) (31) -- -- (7) Capital Gains: Trust Shares............... (180,731) (41,659) (9,775) (904) -- (1,696) (743) Investor Shares............ (35,976) (7,343) (505) (44) -- (154) (43) Flex Shares................ (3,858) (227) (388) (18) -- (27) (6) ---------- ------------ ------------- --------- ---------- ------------ ------------ Total Distributions..... (228,896) (59,448) (13,935) (4,045) -- (2,526) (1,906) ---------- ------------ ------------- --------- ---------- ------------ ------------ Capital Transactions (1): Trust Shares: Proceeds from Shares Issued................... 295,281 187,108 75,303 54,735 42,043 21,944 62,965 Reinvestment of Cash Distributions............ 178,092 48,431 12,606 3,784 -- 1,958 1,417 Cost of Shares Repurchased.............. (406,707) (439,271) (54,011) (47,301) (4,862) (62,693) (68,891) ---------- ------------ ------------- --------- ---------- ------------ ------------ Increase (Decrease) in Net Assets From Trust Share Transactions............... 66,666 (203,732) 33,898 11,218 37,181 (38,791) (4,509) ---------- ------------ ------------- --------- ---------- ------------ ------------ Investor Shares: Proceeds from Shares Issued................... 22,778 21,971 1,430 1,315 -- 2,579 3,017 Reinvestment of Cash Distributions............ 36,046 7,818 633 155 -- 189 101 Cost of Shares Repurchased.............. (38,034) (34,867) (1,149) (844) -- (2,981) (1,782) ---------- ------------ ------------- --------- ---------- ------------ ------------ Increase (Decrease) in Net Assets From Investor Share Transactions............... 20,790 (5,078) 914 626 -- (213) 1,336 ---------- ------------ ------------- --------- ---------- ------------ ------------ Flex Shares: Proceeds from Shares Issued................... 23,389 10,505 3,065 3,359 -- 334 992 Reinvestment of Cash Distributions............ 3,813 230 462 49 -- 27 13 Cost of Shares Repurchased.............. (2,774) (641) (787) (428) -- (410) (127) ---------- ------------ ------------- --------- ---------- ------------ ------------ Increase (Decrease) in Net Assets From Flex Share Transactions............... 24,428 10,094 2,740 2,980 -- (49) 878 ---------- ------------ ------------- --------- ---------- ------------ ------------ Increase (Decrease) in Net Assets From Share Transactions............. 111,884 (198,716) 37,552 14,824 37,181 (39,053) (2,295) ---------- ------------ ------------- --------- ---------- ------------ ------------ Total Increase (Decrease) in Net Assets.................. 156,996 38,465 43,772 26,849 39,495 (37,486) 4,088 ---------- ------------ ------------- --------- ---------- ------------ ------------ Net Assets: Beginning of Period.......... 1,183,545 1,145,080 119,665 92,816 -- 97,494 93,406 ---------- ------------ ------------- --------- ---------- ------------ ------------ End of Period................ $1,340,541 $1,183,545 $163,437 $119,665 $ 39,495 $ 60,008 $97,494 ---------- ------------ ------------- --------- ---------- ------------ ------------ ---------- ------------ ------------- --------- ---------- ------------ ------------ (1) Shares Issued and Redeemed: Trust Shares: Shares Issued.............. 20,391 13,624 6,572 4,974 4,128 2,030 5,971 Shares Issued in Lieu of Cash Distributions....... 13,369 3,617 1,122 346 -- 184 134 Shares Redeemed............ (27,687) (32,204) (4,686) (4,335) (468) (5,800) (6,536) ---------- ------------ ------------- --------- ---------- ------------ ------------ Net Trust Share Transactions............ 6,073 (14,963) 3,008 985 3,660 (3,586) (431) ---------- ------------ ------------- --------- ---------- ------------ ------------ Investor Shares: Shares Issued.............. 1,573 1,605 122 119 -- 241 286 Shares Issued in Lieu of Cash Distributions....... 2,717 585 56 14 -- 18 10 Shares Redeemed............ (2,607) (2,576) (99) (76) -- (277) (170) ---------- ------------ ------------- --------- ---------- ------------ ------------ Net Investor Share Transactions............ 1,683 (386) 79 57 -- (18) 126 ---------- ------------ ------------- --------- ---------- ------------ ------------ Flex Shares: Shares Issued.............. 1,620 768 265 305 -- 31 95 Shares Issued in Lieu of Cash Distributions....... 289 17 41 5 -- 3 1 Shares Redeemed............ (191) (46) (68) (38) -- (38) (12) ---------- ------------ ------------- --------- ---------- ------------ ------------ Net Flex Share Transactions............ 1,718 739 238 272 -- (4) 84 ---------- ------------ ------------- --------- ---------- ------------ ------------ ---------- ------------ ------------- --------- ---------- ------------ ------------ INTERNATIONAL EQUITY FUND SUNBELT EQUITY FUND ---------------------- ---------------------- 06/01/96- 12/01/95*- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 (000) (000) (000) (000) --------- ------------ --------- ------------ Operations: Net Investment Income (Loss)..................... $ 1,788 $ 986 $ (2,928) $ (1,275) Net Realized Gain on Investments................ 31,885 4,059 24,062 39,898 Net Realized Loss on Foreign Currency Transactions...... (949) (265) -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency................... 16 (10) -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments............. 51,213 13,617 (18,818) 84,777 --------- ------------ --------- ------------ Increase in Net Assets from Operations......... 83,953 18,387 2,316 123,400 --------- ------------ --------- ------------ Distributions to Shareholders: Net Investment Income: Trust Shares............... (638) -- -- -- Investor Shares............ -- -- -- -- Flex Shares................ -- -- -- -- Capital Gains: Trust Shares............... (9,573) -- (29,932) (5,188) Investor Shares............ (182) -- (2,119) (426) Flex Shares................ (75) -- (360) (20) --------- ------------ --------- ------------ Total Distributions..... (10,468) -- (32,411) (5,634) --------- ------------ --------- ------------ Capital Transactions (1): Trust Shares: Proceeds from Shares Issued................... 382,588 212,805 208,763 132,237 Reinvestment of Cash Distributions............ 9,386 -- 27,551 4,956 Cost of Shares Repurchased.............. (187,406) (17,640) (239,412) (92,700) --------- ------------ --------- ------------ Increase (Decrease) in Net Assets From Trust Share Transactions............... 204,568 195,165 (3,098) 44,493 --------- ------------ --------- ------------ Investor Shares: Proceeds from Shares Issued................... 7,794 3,467 6,043 5,187 Reinvestment of Cash Distributions............ 181 -- 2,111 426 Cost of Shares Repurchased.............. (2,060) (220) (7,103) (7,209) --------- ------------ --------- ------------ Increase (Decrease) in Net Assets From Investor Share Transactions............... 5,915 3,247 1,051 (1,596) --------- ------------ --------- ------------ Flex Shares: Proceeds from Shares Issued................... 7,049 911 3,978 2,489 Reinvestment of Cash Distributions............ 74 -- 354 20 Cost of Shares Repurchased.............. (424) (3) (1,172) (123) --------- ------------ --------- ------------ Increase (Decrease) in Net Assets From Flex Share Transactions............... 6,699 908 3,160 2,386 --------- ------------ --------- ------------ Increase (Decrease) in Net Assets From Share Transactions............. 217,182 199,320 1,113 45,283 --------- ------------ --------- ------------ Total Increase (Decrease) in Net Assets.................. 290,667 217,707 (28,982) 163,049 --------- ------------ --------- ------------ Net Assets: Beginning of Period.......... 217,707 -- 444,137 281,088 --------- ------------ --------- ------------ End of Period................ $ 508,374 $217,707 $ 415,155 $444,137 --------- ------------ --------- ------------ --------- ------------ --------- ------------ (1) Shares Issued and Redeemed: Trust Shares: Shares Issued.............. 31,059 20,338 16,289 10,848 Shares Issued in Lieu of Cash Distributions....... 785 -- 2,176 437 Shares Redeemed............ (14,649) (1,635) (18,979) (7,882) --------- ------------ --------- ------------ Net Trust Share Transactions............ 17,195 18,703 (514) 3,403 --------- ------------ --------- ------------ Investor Shares: Shares Issued.............. 634 324 473 428 Shares Issued in Lieu of Cash Distributions....... 15 -- 169 38 Shares Redeemed............ (166) (21) (569) (614) --------- ------------ --------- ------------ Net Investor Share Transactions............ 483 303 73 (148) --------- ------------ --------- ------------ Flex Shares: Shares Issued.............. 566 84 310 202 Shares Issued in Lieu of Cash Distributions....... 6 -- 29 2 Shares Redeemed............ (34) -- (95) (10) --------- ------------ --------- ------------ Net Flex Share Transactions............ 538 84 244 194 --------- ------------ --------- ------------ --------- ------------ --------- ------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 121 STATEMENT OF CHANGES IN NET ASSETS (continued) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
INVESTMENT GRADE TAX- FLORIDA TAX-EXEMPT TENNESSEE TAX-EXEMPT EXEMPT BOND FUND BOND FUND BOND FUND ------------------------ --------------------- --------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 (000) (000) (000) (000) (000) (000) --------- ------------ --------- --------- --------- --------- Operations: Net Investment Income................ $ 6,631 $ 5,851 $ 1,999 $ 1,235 $ 227 $ 185 Net Realized Gain (Loss) on Investments........................ 2,924 5,634 (209) 220 (11) 13 Net Change in Unrealized Appreciation (Depreciation) on Investments...... 2,169 (3,672) 1,157 (723) 153 (96) --------- ------------ --------- --------- --------- --------- Increase in Net Assets from Operations...................... 11,724 7,813 2,947 732 369 102 --------- ------------ --------- --------- --------- --------- Distributions to Shareholders: Net Investment Income: Trust Shares....................... (5,248) (4,292) (1,748) (996) (74) (80) Investor Shares.................... (1,226) (1,492) (154) (171) (65) (54) Flex Shares........................ (159) (120) (101) (65) (88) (51) Capital Gains: Trust Shares....................... (2,384) (3,335) (126) (111) -- -- Investor Shares.................... (623) (1,295) (11) (21) -- -- Flex Shares........................ (92) (137) (9) (10) -- -- --------- ------------ --------- --------- --------- --------- Total Distributions............. (9,732) (10,671) (2,149) (1,374) (227) (185) --------- ------------ --------- --------- --------- --------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued........ 45,948 87,347 27,976 30,124 1,241 414 Reinvestment of Cash Distributions.................... 3,196 4,062 314 228 33 36 Cost of Shares Repurchased......... (36,027) (42,946) (9,265) (9,139) (1,174) (264) --------- ------------ --------- --------- --------- --------- Increase (Decrease) in Net Assets From Trust Share Transactions...... 13,117 48,463 19,025 21,213 100 186 --------- ------------ --------- --------- --------- --------- Investor Shares: Proceeds from Shares Issued........ 2,163 4,535 923 1,865 450 668 Reinvestment of Cash Distributions.................... 1,619 2,347 128 127 51 35 Cost of Shares Repurchased......... (9,763) (10,550) (1,919) (1,235) (459) (333) --------- ------------ --------- --------- --------- --------- Increase (Decrease) in Net Assets From Investor Share Transactions... (5,981) (3,668) (868) 757 42 370 --------- ------------ --------- --------- --------- --------- Flex Shares: Proceeds from Shares Issued........ 1,973 6,823 1,182 2,844 836 2,235 Reinvestment of Cash Distributions.................... 222 222 80 50 53 36 Cost of Shares Repurchased......... (3,111) (1,413) (1,011) (153) (456) (215) --------- ------------ --------- --------- --------- --------- Increase (Decrease) in Net Assets From Flex Share Transactions....... (916) 5,632 251 2,741 433 2,056 --------- ------------ --------- --------- --------- --------- Increase (Decrease) in Net Assets From Share Transactions.......... 6,220 50,427 18,408 24,711 575 2,612 --------- ------------ --------- --------- --------- --------- Total Increase (Decrease) in Net Assets.......................... 8,212 47,569 19,206 24,069 717 2,529 --------- ------------ --------- --------- --------- --------- Net Assets: Beginning of Period.................. 167,470 119,901 37,507 13,438 5,363 2,834 --------- ------------ --------- --------- --------- --------- End of Period........................ $175,682 $167,470 $56,713 $37,507 $6,080 $5,363 --------- ------------ --------- --------- --------- --------- --------- ------------ --------- --------- --------- --------- (1) Shares Issued and Redeemed: Trust Shares: Shares Issued...................... 4,112 7,736 2,728 2,945 130 43 Shares Issued in Lieu of Cash Distributions.................... 286 362 31 22 3 4 Shares Redeemed.................... (3,216) (3,816) (907) (902) (122) (28) --------- ------------ --------- --------- --------- --------- Net Trust Share Transactions.... 1,182 4,282 1,852 2,065 11 19 --------- ------------ --------- --------- --------- --------- Investor Shares: Shares Issued...................... 193 401 89 182 47 70 Shares Issued in Lieu of Cash Distributions.................... 144 208 13 12 5 4 Shares Redeemed.................... (869) (934) (188) (120) (48) (35) --------- ------------ --------- --------- --------- --------- Net Investor Share Transactions.................... (532) (325) (86) 74 4 39 --------- ------------ --------- --------- --------- --------- Flex Shares: Shares Issued...................... 176 603 115 277 88 233 Shares Issued in Lieu of Cash Distributions.................... 20 20 8 5 6 4 Shares Redeemed.................... (277) (125) (99) (15) (48) (23) --------- ------------ --------- --------- --------- --------- Net Flex Share Transactions..... (81) 498 24 267 46 214 --------- ------------ --------- --------- --------- --------- --------- ------------ --------- --------- --------- ---------
Amounts designated as "--" are either $0 or round to $0. 122 - --------------------------------------------------------------------------------
GEORGIA SHORT-TERM U.S. TAX-EXEMPT INVESTMENT GRADE TREASURY SECURITIES BOND FUND BOND FUND SHORT-TERM BOND FUND FUND -------------------- -------------------- -------------------- -------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 (000) (000) (000) (000) (000) (000) (000) (000) --------- --------- --------- --------- --------- --------- --------- --------- Operations: Net Investment Income................ $ 1,589 $ 971 $ 37,964 $ 35,694 $ 5,152 $ 4,224 $ 1,238 $ 915 Net Realized Gain (Loss) on Investments........................ 7 330 (5,113) 19,716 (321) 1,358 (25) 95 Net Change in Unrealized Appreciation (Depreciation) on Investments...... 882 (789) 10,558 (32,383) 1,027 (2,395) 88 (294) --------- --------- --------- --------- --------- --------- --------- --------- Increase in Net Assets from Operations...................... 2,478 512 43,409 23,027 5,858 3,187 1,301 716 --------- --------- --------- --------- --------- --------- --------- --------- Distributions to Shareholders: Net Investment Income: Trust Shares....................... (1,285) (747) (35,713) (33,703) (4,983) (4,065) (934) (551) Investor Shares.................... (139) (139) (1,950) (1,908) (120) (133) (205) (308) Flex Shares........................ (165) (88) (270) (114) (51) (26) (99) (56) Capital Gains: Trust Shares....................... (153) (26) -- -- (311) (124) -- -- Investor Shares.................... (17) (6) -- -- (7) (4) -- -- Flex Shares........................ (26) (4) -- -- (4) (1) -- -- --------- --------- --------- --------- --------- --------- --------- --------- Total Distributions............. (1,785) (1,010) (37,933) (35,725) (5,476) (4,353) (1,238) (915) --------- --------- --------- --------- --------- --------- --------- --------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued........ 29,571 17,893 218,768 203,235 43,385 60,843 17,856 5,744 Reinvestment of Cash Distributions.................... 761 215 27,532 26,403 3,426 2,588 465 334 Cost of Shares Repurchased......... (14,098) (7,944) (217,253) (161,583) (48,636) (32,113) (6,510) (5,409) --------- --------- --------- --------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From Trust Share Transactions...... 16,234 10,164 29,047 68,055 (1,825) 31,318 11,811 669 --------- --------- --------- --------- --------- --------- --------- --------- Investor Shares: Proceeds from Shares Issued........ 573 661 5,838 8,832 602 642 745 966 Reinvestment of Cash Distributions.................... 137 109 1,770 1,510 111 90 204 278 Cost of Shares Repurchased......... (677) (596) (10,944) (7,248) (1,240) (606) (1,238) (4,147) --------- --------- --------- --------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From Investor Share Transactions... 33 174 (3,336) 3,094 (527) 126 (289) (2,903) --------- --------- --------- --------- --------- --------- --------- --------- Flex Shares: Proceeds from Shares Issued........ 1,697 4,355 3,077 5,179 523 1,014 825 2,603 Reinvestment of Cash Distributions.................... 172 75 237 88 50 22 85 39 Cost of Shares Repurchased......... (1,499) (150) (2,217) (508) (469) (53) (2,259) (188) --------- --------- --------- --------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From Flex Share Transactions....... 370 4,280 1,097 4,759 104 983 (1,349) 2,454 --------- --------- --------- --------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From Share Transactions.......... 16,637 14,618 26,808 75,908 (2,248) 32,427 10,173 220 --------- --------- --------- --------- --------- --------- --------- --------- Total Increase (Decrease) in Net Assets.......................... 17,330 14,120 32,284 63,210 (1,866) 31,261 10,236 21 --------- --------- --------- --------- --------- --------- --------- --------- Net Assets: Beginning of Period.................. 30,575 16,455 640,290 577,080 94,822 63,561 16,764 16,743 --------- --------- --------- --------- --------- --------- --------- --------- End of Period........................ $47,905 $30,575 $672,574 $640,290 $92,956 $94,822 $27,000 $16,764 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- (1) Shares Issued and Redeemed: Trust Shares: Shares Issued...................... 3,062 1,832 21,475 19,682 4,380 6,066 1,806 579 Shares Issued in Lieu of Cash Distributions.................... 78 22 2,709 2,550 345 258 47 34 Shares Redeemed.................... (1,457) (823) (21,378) (15,629) (4,902) (3,190) (659) (547) --------- --------- --------- --------- --------- --------- --------- --------- Net Trust Share Transactions.... 1,683 1,031 2,806 6,603 (177) 3,134 1,194 66 --------- --------- --------- --------- --------- --------- --------- --------- Investor Shares: Shares Issued...................... 59 68 575 856 61 64 75 97 Shares Issued in Lieu of Cash Distributions.................... 14 11 174 146 11 9 21 28 Shares Redeemed.................... (70) (61) (1,076) (701) (125) (60) (125) (418) --------- --------- --------- --------- --------- --------- --------- --------- Net Investor Share Transactions.................... 3 18 (327) 301 (53) 13 (29) (293) --------- --------- --------- --------- --------- --------- --------- --------- Flex Shares: Shares Issued...................... 175 448 303 499 52 101 84 262 Shares Issued in Lieu of Cash Distributions.................... 18 8 23 8 5 2 9 4 Shares Redeemed.................... (154) (15) (218) (49) (47) (5) (228) (19) --------- --------- --------- --------- --------- --------- --------- --------- Net Flex Share Transactions..... 39 441 108 458 10 98 (135) 247 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- MORTGAGE SECURITIES U.S. GOVERNMENT FUND SECURITIES FUND -------------------- -------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 (000) (000) (000) (000) --------- --------- --------- --------- Operations: Net Investment Income................ $ 6,160 $ 3,181 $ 1,220 $ 602 Net Realized Gain (Loss) on Investments........................ 1 389 (17) (24) Net Change in Unrealized Appreciation (Depreciation) on Investments...... 303 (1,359) 214 (557) --------- --------- --------- --------- Increase in Net Assets from Operations...................... 6,464 2,211 1,417 21 --------- --------- --------- --------- Distributions to Shareholders: Net Investment Income: Trust Shares....................... (5,933) (3,012) (916) (453) Investor Shares.................... (146) (68) (147) (68) Flex Shares........................ (81) (37) (157) (81) Capital Gains: Trust Shares....................... (159) -- -- (18) Investor Shares.................... (4) -- -- (3) Flex Shares........................ (3) -- -- (5) --------- --------- --------- --------- Total Distributions............. (6,326) (3,117) (1,220) (628) --------- --------- --------- --------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued........ 75,207 46,841 19,904 9,824 Reinvestment of Cash Distributions.................... 4,139 1,846 297 144 Cost of Shares Repurchased......... (28,939) (16,287) (11,131) (2,556) --------- --------- --------- --------- Increase (Decrease) in Net Assets From Trust Share Transactions...... 50,407 32,400 9,070 7,412 --------- --------- --------- --------- Investor Shares: Proceeds from Shares Issued........ 1,381 2,404 1,272 2,290 Reinvestment of Cash Distributions.................... 141 51 140 50 Cost of Shares Repurchased......... (1,615) (533) (1,599) (456) --------- --------- --------- --------- Increase (Decrease) in Net Assets From Investor Share Transactions... (93) 1,922 (187) 1,884 --------- --------- --------- --------- Flex Shares: Proceeds from Shares Issued........ 500 1,538 764 3,019 Reinvestment of Cash Distributions.................... 72 27 130 59 Cost of Shares Repurchased......... (517) (196) (958) (148) --------- --------- --------- --------- Increase (Decrease) in Net Assets From Flex Share Transactions....... 55 1,369 (64) 2,930 --------- --------- --------- --------- Increase (Decrease) in Net Assets From Share Transactions.......... 50,369 35,691 8,819 12,226 --------- --------- --------- --------- Total Increase (Decrease) in Net Assets.......................... 50,507 34,785 9,016 11,619 --------- --------- --------- --------- Net Assets: Beginning of Period.................. 77,231 42,446 15,499 3,880 --------- --------- --------- --------- End of Period........................ $127,738 $77,231 $24,515 $15,499 --------- --------- --------- --------- --------- --------- --------- --------- (1) Shares Issued and Redeemed: Trust Shares: Shares Issued...................... 7,497 4,639 1,986 952 Shares Issued in Lieu of Cash Distributions.................... 413 182 30 14 Shares Redeemed.................... (2,886) (1,610) (1,110) (249) --------- --------- --------- --------- Net Trust Share Transactions.... 5,024 3,211 906 717 --------- --------- --------- --------- Investor Shares: Shares Issued...................... 138 238 127 225 Shares Issued in Lieu of Cash Distributions.................... 14 5 14 5 Shares Redeemed.................... (161) (53) (159) (45) --------- --------- --------- --------- Net Investor Share Transactions.................... (9) 190 (18) 185 --------- --------- --------- --------- Flex Shares: Shares Issued...................... 50 152 77 294 Shares Issued in Lieu of Cash Distributions.................... 7 2 13 6 Shares Redeemed.................... (51) (19) (95) (15) --------- --------- --------- --------- Net Flex Share Transactions..... 6 135 (5) 285 --------- --------- --------- --------- --------- --------- --------- ---------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 123 STATEMENT OF CHANGES IN NET ASSETS (concluded) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1997
U.S. GOVERNMENT PRIME QUALITY MONEY SECURITIES MONEY MARKET TAX-EXEMPT MONEY MARKET FUND FUND MARKET FUND ------------------------ ----------------------- --------------------- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 06/01/96- 06/01/95- 05/31/97 05/31/96 05/31/97 05/31/96 05/31/97 05/31/96 (000) (000) (000) (000) (000) (000) ---------- ------------ --------- ----------- --------- --------- Operations: Net Investment Income................. $ 73,281 $ 54,132 $ 17,800 $ 20,311 $ 12,958 $ 12,217 Net Realized Gain (Loss) on Investments......................... (121) (82) (51) 90 10 9 ---------- ------------ --------- ----------- --------- --------- Increase in Net Assets from Operations....................... 73,160 54,050 17,749 20,401 12,968 12,226 ---------- ------------ --------- ----------- --------- --------- Distributions to Shareholders: Net Investment Income: Trust Shares........................ (60,224) (44,689) (14,924) (17,516) (10,054) (9,342) Investor Shares..................... (13,057) (9,442) (2,876) (2,795) (2,904) (2,872) Capital Gains: Trust Shares........................ -- -- -- -- -- -- Investor Shares..................... -- -- -- -- -- -- ---------- ------------ --------- ----------- --------- --------- Total Distributions............... (73,281) (54,131) (17,800) (20,311) (12,958) (12,214) ---------- ------------ --------- ----------- --------- --------- Capital Transactions (1): Trust Shares: Proceeds from Shares Issued......... 2,786,281 2,131,623 705,839 1,156,411 980,872 719,678 Reinvestment of Cash Distributions...................... 2,069 1,223 274 60 -- 3 Cost of Shares Redeemed............. (2,752,496) (1,881,171) (687,215) (1,265,169) (921,487) (661,491) ---------- ------------ --------- ----------- --------- --------- Increase (Decrease) in Net Assets From Trust Share Transactions............ 35,854 251,675 18,898 (108,698) 59,385 58,190 ---------- ------------ --------- ----------- --------- --------- Investor Shares: Proceeds from Shares Issued......... 928,946 1,012,310 182,325 231,451 305,724 322,435 Reinvestment of Cash Distributions...................... 10,375 8,255 2,379 2,414 2,569 2,480 Cost of Shares Redeemed............. (871,451) (962,468) (180,124) (221,906) (301,505) (317,341) ---------- ------------ --------- ----------- --------- --------- Increase in Net Assets From Investor Share Transactions.................. 67,870 58,097 4,580 11,959 6,788 7,574 ---------- ------------ --------- ----------- --------- --------- Increase in Net Assets From Share Transactions....................... 103,724 309,772 23,478 (96,739) 66,173 65,764 ---------- ------------ --------- ----------- --------- --------- Total Increase (Decrease) in Net Assets........................... 103,603 309,691 23,427 (96,649) 66,183 65,776 ---------- ------------ --------- ----------- --------- --------- Net Assets: Beginning of Period................... 1,266,496 956,805 384,101 480,750 368,836 303,060 ---------- ------------ --------- ----------- --------- --------- End of Period......................... $1,370,099 $1,266,496 $407,528 $ 384,101 $435,019 $368,836 ---------- ------------ --------- ----------- --------- --------- ---------- ------------ --------- ----------- --------- --------- (1) Shares Issued and Redeemed: Trust Shares: Shares Issued....................... 2,786,281 2,131,623 705,839 1,156,411 980,872 719,678 Shares Issued in Lieu of Cash Distributions...................... 2,069 1,223 274 60 -- 3 Shares Redeemed..................... (2,752,496) (1,881,171) (687,215) (1,265,169) (921,487) (661,491) ---------- ------------ --------- ----------- --------- --------- Net Trust Share Transactions...... 35,854 251,675 18,898 (108,698) 59,385 58,190 ---------- ------------ --------- ----------- --------- --------- Investor Shares: Shares Issued....................... 928,946 1,012,310 182,325 231,451 305,724 322,435 Shares Issued in Lieu of Cash Distributions...................... 10,375 8,255 2,379 2,414 2,569 2,480 Shares Redeemed..................... (871,451) (962,468) (180,124) (221,906) (301,505) (317,341) ---------- ------------ --------- ----------- --------- --------- Net Investor Share Transactions... 67,870 58,097 4,580 11,959 6,788 7,574 ---------- ------------ --------- ----------- --------- --------- ---------- ------------ --------- ----------- --------- ---------
Amounts designated as "--" are either $0 or round to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 124 (This page has been left blank intentionally.) 125 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET NET REALIZED AND DISTRIBUTIONS INVESTMENT UNREALIZED GAINS FROM NET ASSET VALUE INCOME (LOSSES) DISTRIBUTIONS FROM REALIZED CAPITAL BEGINNING OF PERIOD (LOSS) ON INVESTMENTS NET INVESTMENT INCOME GAINS ------------------- ---------- ---------------- ---------------------- ---------------- VALUE INCOME STOCK FUND Trust Shares 1997 $13.15 $ 0.30 $ 2.32 $(0.30) $(1.76) 1996 11.59 0.35 2.71 (0.34) (1.16) 1995 10.54 0.32 1.56 (0.32) (0.51) 1994 10.23 0.29 0.70 (0.32) (0.36) 1993(1) 10.00 0.11 0.16 (0.04) -- Investor Shares 1997 $13.13 $ 0.25 $ 2.32 $(0.26) $(1.76) 1996 11.58 0.30 2.71 (0.30) (1.16) 1995 10.52 0.28 1.56 (0.27) (0.51) 1994 10.23 0.26 0.67 (0.27) (0.37) 1993(2) 9.73 0.09 0.44 (0.03) -- Flex Shares 1997 $13.08 $ 0.18 $ 2.29 $(0.18) $(1.76) 1996(3) 11.59 0.26 2.65 (0.26) (1.16) MID-CAP EQUITY FUND (B) Trust Shares 1997 $12.76 $ 0.03 $ 1.69 $(0.05) $(1.22) 1996 11.00 0.08 2.63 (0.08) (0.87) 1995 9.85 0.08 1.15 (0.08) -- 1994(4) 10.00 0.02 (0.16) (0.01) -- Investor Shares 1997 $12.74 $(0.03) $ 1.69 $(0.01) $(1.22) 1996 10.99 0.03 2.62 (0.03) (0.87) 1995 9.84 0.03 1.15 (0.03) -- 1994(5) 10.00 0.01 (0.17) -- -- Flex Shares 1997 $12.69 $(0.07) $ 1.64 $ -- $(1.22) 1996(6) 11.13 -- 2.45 (0.02) (0.87) SMALL CAP EQUITY FUND Trust Shares 1997(7) $10.00 $ 0.05 $ 1.04 $(0.02) $ -- CAPITAL GROWTH FUND Trust Shares 1997 $14.90 $ 0.12 $ 3.13 $(0.12) $(2.94) 1996 12.18 0.12 3.32 (0.13) (0.59) 1995 11.99 0.16 0.57 (0.14) (0.40) 1994 11.95 0.16 0.31 (0.17) (0.26) 1993(8) 10.36 0.12 1.57 (0.10) -- Investor Shares 1997 $14.89 $ 0.03 $ 3.10 $(0.02) $(2.94) 1996 12.17 0.03 3.32 (0.04) (0.59) 1995 11.98 0.09 0.57 (0.07) (0.40) 1994 11.93 0.09 0.31 (0.09) (0.26) 1993(9) 10.00 0.06 1.93 (0.06) -- Flex Shares 1997 $14.84 $(0.01) $ 3.07 $ -- $(2.94) 1996(3) 12.20 0.02 3.26 (0.05) (0.59)
* Annualized. ** Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate is only required for fiscal years beginning after September 1, 1995. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on February 12, 1993. (2) Commenced operations on February 17, 1993. (3) Commenced operations on June 1, 1995. (4) Commenced operations on February 2, 1994. (5) Commenced operations on February 1, 1994. (6) Commenced operations on June 5, 1995. (7) Commenced operations on January 31, 1997 (8) Commenced operations on July 1, 1992. (9) Commenced operations on June 9, 1992. (A) Total return figures do not reflect applicable sales loads. (B) During the fiscal year ended May 31, 1996, the Aggressive Growth Fund changed its name to the Mid-Cap Equity Fund. 126 - --------------------------------------------------------------------------------
RATIO OF NET INVESTMENT RATIO OF INCOME (LOSS) RATIO OF EXPENSES TO TO NET AVERAGE NET AVERAGE NET INVESTMENT ASSETS ASSETS RATIO OF INCOME (EXCLUDING (EXCLUDING NET ASSET TOTAL NET ASSETS EXPENSES TO (LOSS) TO WAIVERS WAIVERS PORTFOLIO VALUE END RETURN END OF AVERAGE NET AVERAGE NET AND AND TURNOVER OF PERIOD (A) PERIOD (000) ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS) RATE --------- --------- ------------ ----------- ----------- --------------- --------------- -------- VALUE INCOME STOCK FUND Trust Shares $13.71 22.18% $1,488,062 0.91% 2.40% 0.91% 2.40% 105.03% 13.15 27.91% 1,244,399 0.92% 2.86% 0.92% 2.86% 133.99% 11.59 19.06% 991,977 0.95% 3.16% 0.95% 3.16% 125.71% 10.54 9.95% 573,082 0.88% 3.21% 0.97% 3.12% 149.28% 10.23 9.05%* 137,761 0.80%* 4.32%* 0.96%* 4.16%* 34.71% Investor Shares $13.68 21.69% $ 165,999 1.30% 2.01% 1.31% 2.00% 105.03% 13.13 27.39% 130,597 1.30% 2.47% 1.37% 2.40% 133.99% 11.58 18.71% 92,256 1.30% 2.80% 1.41% 2.69% 125.71% 10.52 9.27% 60,589 1.25% 2.80% 1.44% 2.61% 149.28% 10.23 19.42%* 24,779 1.15%* 4.51%* 1.63%* 4.04%* 34.71% Flex Shares $13.61 20.91% $ 73,466 2.00% 1.33% 2.03% 1.30% 105.03% 13.08 26.52%* 26,298 2.00%* 1.72%* 2.15%* 1.57%* 133.99% MID-CAP EQUITY FUND (B) Trust Shares $13.21 14.23% $ 287,370 1.15% 0.23% 1.26% 0.12% 151.68% 12.76 25.54% 253,905 1.15% 0.70% 1.29% 0.56% 115.62% 11.00 12.56% 125,562 1.15% 0.88% 1.32% 0.71% 65.63% 9.85 (1.39%)+ 57,036 1.15%* 1.20%* 1.68%* 0.67%* 7.99% Investor Shares $13.17 13.76% $ 20,245 1.60% (0.21%) 1.85% (0.46%) 151.68% 12.74 24.93% 17,971 1.60% 0.25% 1.96% (0.11%) 115.62% 10.99 11.96% 7,345 1.60% 0.43% 2.27% (0.24%) 65.63% 9.84 (1.60%)+ 3,004 1.60%* 0.74%* 4.60%* (2.26%)* 7.99% Flex Shares $13.04 13.06% $ 10,120 2.20% (0.85%) 2.58% (1.23%) 151.68% 12.69 23.00%* 5,029 2.20%* (0.37%)* 3.04%* (1.21%)* 115.62% SMALL CAP EQUITY FUND Trust Shares $11.07 10.97%+ $ 131,049 1.20%* 1.86%* 1.37%* 1.69%* 27.46% CAPITAL GROWTH FUND Trust Shares $15.09 24.66% $1,085,128 1.15% 0.83% 1.25% 0.73% 141.32% 14.90 28.97% 981,498 1.15% 0.90% 1.27% 0.78% 156.46% 12.18 6.63% 984,205 1.15% 1.38% 1.28% 1.25% 127.79% 11.99 3.87% 891,870 1.15% 1.25% 1.29% 1.11% 123.87% 11.95 17.90%* 507,692 1.15%* 1.43%* 1.28%* 1.30%* 95.02% Investor Shares $15.06 23.74% $ 218,660 1.80% 0.19% 2.02% (0.03%) 141.32% 14.89 28.18% 191,078 1.80% 0.24% 2.08% (0.04%) 156.46% 12.17 5.93% 160,875 1.80% 0.73% 2.10% 0.43% 127.79% 11.98 3.26% 170,795 1.80% 0.64% 2.11% 0.33% 123.87% 11.93 20.49%* 131,858 1.80%* 0.81%* 2.06%* 0.55%* 95.02% Flex Shares $14.96 23.24% $ 36,753 2.27% (0.29%) 2.43% (0.45%) 141.32% 14.84 27.48%* 10,969 2.27%* (0.29%)* 2.68%* (0.70%)* 156.46% AVERAGE COMMISSION RATE** ---------- VALUE INCOME STOCK FUND Trust Shares $0.0609 n/a n/a n/a n/a Investor Shares $0.0609 n/a n/a n/a n/a Flex Shares $0.0609 n/a MID-CAP EQUITY FUND (B) Trust Shares $0.0587 n/a n/a n/a Investor Shares $0.0587 n/a n/a n/a Flex Shares $0.0587 n/a SMALL CAP EQUITY FUND Trust Shares $0.0523 CAPITAL GROWTH FUND Trust Shares $0.0620 n/a n/a n/a n/a Investor Shares $0.0620 n/a n/a n/a n/a Flex Shares $0.0620 n/a
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 127 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET NET REALIZED AND DISTRIBUTIONS INVESTMENT UNREALIZED GAINS FROM NET ASSET VALUE INCOME (LOSSES) DISTRIBUTIONS FROM REALIZED BEGINNING OF PERIOD (LOSS) ON INVESTMENTS NET INVESTMENT INCOME CAPITAL GAINS ------------------- ---------- ---------------- ---------------------- ------------- BALANCED FUND Trust Shares 1997 $11.55 $ 0.33 $ 1.47 $(0.32) $(1.09) 1996 10.26 0.33 1.41 (0.34) (0.11) 1995 9.76 0.33 0.49 (0.32) -- 1994(1) 10.00 0.11 (0.29) (0.06) -- Investor Shares 1997 $11.60 $ 0.29 $ 1.48 $(0.29) $(1.09) 1996 10.30 0.30 1.41 (0.30) (0.11) 1995 9.79 0.28 0.51 (0.28) -- 1994(2) 10.00 0.03 (0.24) -- -- Flex Shares 1997 $11.53 $ 0.22 $ 1.45 $(0.21) $(1.09) 1996(3) 10.36 0.24 1.29 (0.25) (0.11) EMERGING MARKETS EQUITY FUND Trust Shares 1997(4) $10.00 $ 0.04 $ 0.75 $ -- $ -- INTERNATIONAL EQUITY INDEX FUND Trust Shares 1997 $10.96 $ 0.10 $ 0.69 $(0.11) $(0.30) 1996 10.24 0.10 0.84 (0.13) (0.09) 1995(5) 10.00 0.08 0.19 (0.02) (0.01) Investor Shares 1997 $10.88 $ 0.03 $ 0.72 $(0.07) $(0.30) 1996 10.20 0.05 0.85 (0.13) (0.09) 1995(5) 10.00 0.05 0.17 (0.01) (0.01) Flex Shares 1997 $10.87 $(0.05) $ 0.72 $ -- $(0.30) 1996(6) 10.24 -- 0.82 (0.10) (0.09) INTERNATIONAL EQUITY FUND Trust Shares 1997 $11.40 $ 0.03 $ 2.57 $(0.02) $(0.35) 1996(7) 10.00 0.05 1.35 -- -- Investor Shares 1997 $11.38 $(0.01) $ 2.56 $ -- $(0.35) 1996(8) 10.44 0.04 0.90 -- -- Flex Shares 1997 $11.37 $(0.04) $ 2.49 $ -- $(0.35) 1996(8) 10.44 0.02 0.91 -- -- SUNBELT EQUITY FUND Trust Shares 1997 $14.11 $(0.09) $ 0.25 $ -- $(0.99) 1996 10.03 (0.04) 4.32 -- (0.20) 1995 9.70 (0.01) 0.38 -- (0.04) 1994(1) 10.00 -- (0.30) -- -- Investor Shares 1997 $13.95 $(0.14) $ 0.24 $ -- $(0.99) 1996 9.96 (0.11) 4.30 -- (0.20) 1995 9.69 (0.05) 0.36 -- (0.04) 1994(2) 10.00 (0.02) (0.29) -- -- Flex Shares 1997 $13.97 $(0.14) $ 0.16 $ -- $(0.99) 1996(9) 10.20 (0.07) 4.04 -- (0.20)
* Annualized. ** Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate is only required for fiscal years beginning after September 1, 1995. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on January 3, 1994. (2) Commenced operations on January 4, 1994. (3) Commenced operations on June 14, 1995. (4) Commenced operations on January 31, 1997. (5) Commenced operations on June 6, 1994. (6) Commenced operations on June 8, 1995. (7) Commenced operations on December 1, 1995. (8) Commenced operations on January 2, 1996. (9) Commenced operations on June 5, 1995. (A) Total return figures do not reflect applicable sales loads. 128 - --------------------------------------------------------------------------------
RATIO OF NET INVESTMENT RATIO OF INCOME (LOSS) RATIO OF EXPENSES TO TO NET AVERAGE NET AVERAGE NET INVESTMENT ASSETS ASSETS RATIO OF INCOME (EXCLUDING (EXCLUDING NET ASSET NET ASSETS EXPENSES TO (LOSS) TO WAIVERS WAIVERS VALUE END TOTAL END OF AVERAGE NET AVERAGE NET AND AND OF PERIOD RETURN (A) PERIOD (000) ASSETS ASSETS REIMBURSEMENTS) REIMBURSEMENTS) --------- ---------- ------------ ----------- ------------ --------------- --------------- BALANCED FUND Trust Shares $11.94 16.66% $151,358 0.95% 2.89% 1.08% 2.76% 11.55 17.26% 111,638 0.95% 3.00% 1.09% 2.86% 10.26 8.72% 89,051 0.95% 3.44% 1.11% 3.28% 9.76 (1.78%)+ 90,579 0.95%* 2.76%* 1.25%* 2.46%* Investor Shares $11.99 16.27% $ 6,012 1.25% 2.58% 1.64% 2.19% 11.60 16.88% 4,896 1.25% 2.70% 1.89% 2.06% 10.30 8.29% 3,765 1.25% 3.17% 1.80% 2.62% 9.79 (2.10%)+ 2,311 1.25%* 2.46%* 4.91%* (1.20%)* Flex Shares $11.90 15.40% $ 6,067 2.01% 1.84% 2.45% 1.40% 11.53 15.58%* 3,131 2.00%* 1.85%* 2.97%* 0.88%* EMERGING MARKETS EQUITY FUND Trust Shares $10.79 7.90%+ $ 39,495 1.55%* 1.37%* 2.04%* 0.88%* INTERNATIONAL EQUITY INDEX FUND Trust Shares $11.34 7.48% $ 53,516 1.05% 0.71% 1.15% 0.61% 10.96 9.29% 90,980 1.05% 0.84% 1.19% 0.70% 10.24 2.69%+ 89,446 1.05%* 1.13%* 1.31%* 0.87%* Investor Shares $11.26 7.12% $ 5,592 1.45% 0.28% 1.88% (0.15%) 10.88 8.90% 5,597 1.45% 0.48% 2.06% (0.13%) 10.20 2.18%+ 3,960 1.45%* 0.67%* 2.44%* (0.32%)* Flex Shares $11.24 6.41% $ 900 2.10% (0.39%) 3.69% (1.98%) 10.87 8.32%+ 917 2.10%* (0.24%)* 4.14%* (2.28%)* INTERNATIONAL EQUITY FUND Trust Shares $13.63 23.29% $489,325 1.46% 0.51% 1.51% 0.46% 11.40 14.00%+ 213,306 1.46%* 1.36%* 1.65%* 1.17%* Investor Shares $13.58 22.85% $ 10,674 1.81% 0.18% 2.05% (0.06%) 11.38 9.00%+ 3,448 1.81%* 1.73%* 3.14%* 0.40%* Flex Shares $13.47 21.98% $ 8,375 2.51% (0.27%) 3.03% (0.79%) 11.37 8.91%+ 953 2.51%* 1.08%* 5.86%* (2.27%)* SUNBELT EQUITY FUND Trust Shares $13.28 1.48% $381,371 1.15% (0.65%) 1.26% (0.76%) 14.11 43.19% 412,430 1.15% (0.34%) 1.28% (0.47%) 10.03 3.81% 258,908 1.15% (0.12%) 1.30% (0.27%) 9.70 (2.99%)+ 128,280 1.15%* (0.19%)* 1.58%* (0.62%)* Investor Shares $13.06 1.05% $ 28,095 1.60% (1.10%) 1.84% (1.34%) 13.95 42.58% 29,002 1.60% (0.79%) 1.93% (1.12%) 9.96 3.20% 22,180 1.60% (0.57%) 1.98% (0.95%) 9.69 (3.10%)+ 16,077 1.60%* (0.63%)* 2.04%* (1.07%)* Flex Shares $13.00 0.46% $ 5,689 2.20% (1.72%) 2.69% (2.21%) 13.97 39.86%* 2,705 2.20%* (1.43%)* 3.62%* (2.85%)* PORTFOLIO AVERAGE TURNOVER COMMISSION RATE RATE** --------- ---------- BALANCED FUND Trust Shares 196.73% $0.0608 154.63% n/a 156.61% n/a 105.65% n/a Investor Shares 196.73% $0.0608 154.63% n/a 156.61% n/a 105.65% n/a Flex Shares 196.73% $0.0608 154.63% n/a EMERGING MARKETS EQUITY FUND Trust Shares 23.88% $0.0019 INTERNATIONAL EQUITY INDEX FUND Trust Shares 1.82% $0.0244 30.46% n/a 10.37% n/a Investor Shares 1.82% $0.0244 30.46% n/a 10.37% n/a Flex Shares 1.82% $0.0244 30.46% n/a INTERNATIONAL EQUITY FUND Trust Shares 139.37% $0.0313 113.34% n/a Investor Shares 139.37% $0.0313 113.34% n/a Flex Shares 139.37% $0.0313 113.34% n/a SUNBELT EQUITY FUND Trust Shares 72.17% $0.0674 106.27% n/a 80.03% n/a 21.42% n/a Investor Shares 72.17% $0.0674 106.27% n/a 80.03% n/a 21.42% n/a Flex Shares 72.17% $0.0674 106.27% n/a
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 129 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET ASSET NET REALIZED AND DISTRIBUTIONS VALUE NET UNREALIZED GAINS FROM BEGINNING OF INVESTMENT (LOSSES) DISTRIBUTIONS FROM REALIZED PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME CAPITAL GAINS ------------ ---------- ---------------- ---------------------- ------------- INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares 1997 $11.10 $ 0.44 $ 0.33 $(0.44) $(0.21) 1996 11.28 0.45 0.19 (0.45) (0.37) 1995 10.68 0.46 0.60 (0.46) -- 1994(1) 11.37 0.22 (0.34) (0.22) (0.35) Investor Shares 1997 $11.12 $ 0.40 $ 0.33 $(0.40) $(0.21) 1996 11.30 0.41 0.19 (0.41) (0.37) 1995 10.69 0.42 0.61 (0.42) -- 1994 10.79 0.33 0.25 (0.33) (0.35) 1993(2) 10.00 0.35 0.82 (0.35) (0.03) Flex Shares 1997 $11.11 $ 0.35 $ 0.33 $(0.35) $(0.21) 1996(3) 11.30 0.37 0.18 (0.37) (0.37) FLORIDA TAX-EXEMPT BOND FUND Trust Shares 1997 $10.06 $ 0.46 $ 0.25 $(0.46) $(0.03) 1996 10.18 0.46 (0.07) (0.46) (0.05) 1995 9.75 0.44 0.43 (0.44) -- 1994(4) 10.00 0.13 (0.25) (0.13) -- Investor Shares 1997 $10.07 $ 0.44 $ 0.25 $(0.44) $(0.03) 1996 10.18 0.44 (0.06) (0.44) (0.05) 1995 9.75 0.42 0.43 (0.42) -- 1994(5) 10.00 0.13 (0.25) (0.13) -- Flex Shares 1997 $10.08 $ 0.39 $ 0.25 $(0.39) $(0.03) 1996(3) 10.19 0.39 (0.06) (0.39) (0.05) TENNESSEE TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.40 $ 0.43 $ 0.23 $(0.43) $ -- 1996 9.50 0.43 (0.11) (0.42) -- 1995 9.22 0.44 0.28 (0.44) -- 1994(6) 10.00 0.12 (0.77) (0.13) -- Investor Shares 1997 $ 9.42 $ 0.41 $ 0.23 $(0.41) $ -- 1996 9.53 0.41 (0.10) (0.42) -- 1995 9.23 0.44 0.29 (0.43) -- 1994(7) 10.00 0.13 (0.77) (0.13) -- Flex Shares 1997 $ 9.41 $ 0.37 $ 0.23 $(0.37) $ -- 1996(8) 9.59 0.37 (0.18) (0.37) -- GEORGIA TAX-EXEMPT BOND FUND Trust Shares 1997 $ 9.56 $ 0.42 $ 0.22 $(0.42) $(0.05) 1996 9.63 0.43 (0.05) (0.43) (0.02) 1995 9.42 0.42 0.21 (0.42) -- 1994(5) 10.00 0.14 (0.58) (0.14) -- Investor Shares 1997 $ 9.58 $ 0.40 $ 0.21 $(0.40) $(0.05) 1996 9.65 0.41 (0.05) (0.41) (0.02) 1995 9.44 0.40 0.21 (0.40) -- 1994(7) 10.00 0.13 (0.56) (0.13) -- Flex Shares 1997 $ 9.56 $ 0.35 $ 0.22 $(0.35) $(0.05) 1996(9) 9.72 0.36 (0.14) (0.36) (0.02)
* Annualized. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on October 21, 1993. (2) Commenced operations on June 9, 1992. (3) Commenced operations on June 1, 1995. (4) Commenced operations on January 25, 1994. (5) Commenced operations on January 18, 1994. (6) Commenced operations on January 27, 1994. (7) Commenced operations on January 19, 1994. (8) Commenced operations on June 5, 1995. (9) Commenced operations on June 6, 1995. (A) Total return figures do not reflect applicable sales loads. 130 - --------------------------------------------------------------------------------
RATIO OF EXPENSES TO RATIO OF AVERAGE NET NET ASSETS RATIO OF INVESTMENT (EXCLUDING NET ASSET NET ASSETS EXPENSES TO INCOME TO WAIVERS VALUE END TOTAL END OF AVERAGE NET AVERAGE NET AND OF PERIOD RETURN (A) PERIOD (000) ASSETS ASSETS REIMBURSEMENTS) --------- ---------- ------------ ----------- ----------- --------------- INVESTMENT GRADE TAX-EXEMPT BOND FUND Trust Shares $11.22 7.13% $139,144 0.75% 3.96% 0.86% 11.10 5.82% 124,507 0.75% 4.01% 0.89% 11.28 10.21% 78,208 0.75% 4.34% 0.91% 10.68 (1.10%)+ 44,595 0.75%* 3.46%* 0.95%* Investor Shares $11.24 6.69% $ 31,857 1.15% 3.56% 1.38% 11.12 5.40% 37,427 1.15% 3.61% 1.42% 11.30 9.91% 41,693 1.15% 3.88% 1.43% 10.69 5.37% 46,182 1.14% 2.96% 1.51% 10.79 11.88%* 15,844 1.12%* 3.61%* 1.83%* Flex Shares $11.23 6.19% $ 4,681 1.63% 3.08% 2.15% 11.11 4.91%* 5,536 1.63%* 3.12%* 2.25%* FLORIDA TAX-EXEMPT BOND FUND Trust Shares $10.28 7.22% $ 50,487 0.65% 4.48% 0.80% 10.06 3.87% 30,790 0.65% 4.49% 0.88% 10.18 9.26% 10,118 0.65% 4.63% 1.13% 9.75 (1.19%)+ 3,192 0.65%* 3.86%* 1.12%* Investor Shares $10.29 7.00% $ 3,226 0.85% 4.28% 1.31% 10.07 3.76% 4,025 0.85% 4.28% 1.36% 10.18 9.04% 3,320 0.85% 4.36% 1.50% 9.75 (1.22%)+ 2,280 0.85%* 3.67%* 3.20%* Flex Shares $10.30 6.48% $ 3,000 1.35% 3.78% 2.28% 10.08 3.27%* 2,692 1.35%* 3.79%* 2.54%* TENNESSEE TAX-EXEMPT BOND FUND Trust Shares $ 9.63 7.16% $ 1,973 0.65% 4.51% 1.72% 9.40 3.43% 1,823 0.65% 4.49% 1.68% 9.50 8.17% 1,664 0.65% 4.90% 2.65% 9.22 (6.52%)+ 594 0.65%* 4.24%* 1.43%* Investor Shares $ 9.65 6.93% $ 1,602 0.85% 4.31% 1.76% 9.42 3.28% 1,523 0.85% 4.29% 2.08% 9.53 8.24% 1,170 0.85% 4.70% 2.10% 9.23 (6.39%)+ 1,127 0.85%* 3.74%* 6.60%* Flex Shares $ 9.64 6.42% $ 2,505 1.35% 3.81% 2.34% 9.41 1.98%* 2,017 1.34%* 3.80%* 2.74%* GEORGIA TAX-EXEMPT BOND FUND Trust Shares $ 9.73 6.79% $ 39,732 0.65% 4.31% 0.81% 9.56 3.89% 22,950 0.65% 4.36% 0.89% 9.63 6.94% 13,187 0.65% 4.56% 0.98% 9.42 (4.43%)+ 4,338 0.65%* 4.12%* 1.06%* Investor Shares $ 9.74 6.47% $ 3,511 0.85% 4.10% 1.33% 9.58 3.69% 3,418 0.85% 4.17% 1.41% 9.65 6.70% 3,268 0.85% 4.31% 1.43% 9.44 (4.29%)+ 3,300 0.85%* 3.93%* 2.36%* Flex Shares $ 9.73 6.06% $ 4,662 1.35% 3.60% 2.07% 9.56 2.25%* 4,207 1.35%* 3.66%* 2.35%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (EXCLUDING WAIVERS PORTFOLIO AND TURNOVER REIMBURSEMENTS) RATE --------------- -------- INVESTMENT GRADE TAX-EXEMPT BOND Trust Shares 3.85% 489.02% 3.87% 513.90% 4.18% 591.91% 3.26%* 432.46% Investor Shares 3.33% 489.02% 3.34% 513.90% 3.60% 591.91% 2.59% 432.46% 2.90%* 344.87% Flex Shares 2.56% 489.02% 2.50%* 513.90% FLORIDA TAX-EXEMPT BOND FUND Trust Shares 4.33% 134.62% 4.26% 62.68% 4.15% 105.01% 3.39%* 53.24% Investor Shares 3.82% 134.62% 3.77% 62.68% 3.71% 105.01% 1.32%* 53.24% Flex Shares 2.85% 134.62% 2.60%* 62.68% TENNESSEE TAX-EXEMPT BOND FUND Trust Shares 3.44% 16.09% 3.46% 41.00% 2.90% 27.73% 3.46%* 13.05% Investor Shares 3.40% 16.09% 3.06% 41.00% 3.45% 27.73% (2.01%)* 13.05% Flex Shares 2.82% 16.09% 2.40%* 41.00% GEORGIA TAX-EXEMPT BOND FUND Trust Shares 4.15% 14.81% 4.12% 60.02% 4.23% 24.50% 3.71%* 25.90% Investor Shares 3.62% 14.81% 3.61% 60.02% 3.73% 24.50% 2.42%* 25.90% Flex Shares 2.88% 14.81% 2.66%* 60.02%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 131 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND UNREALIZED DISTRIBUTIONS NET ASSET GAINS FROM DISTRIBUTIONS VALUE NET (LOSSES) NET FROM BEGINNING INVESTMENT ON INVESTMENT REALIZED OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS --------- ---------- ------------ ------------- ------------- INVESTMENT GRADE BOND FUND Trust Shares 1997 $10.07 $ 0.60 $ 0.09 $(0.60) $ -- 1996 10.26 0.60 (0.19) (0.60) -- 1995 9.89 0.61 0.37 (0.61) -- 1994 10.45 0.50 (0.36) (0.50) (0.20) 1993(1) 10.09 0.45 0.36 (0.45) -- Investor Shares 1997 $10.06 $ 0.56 $ 0.10 $(0.56) $ -- 1996 10.26 0.56 (0.20) (0.56) -- 1995 9.89 0.57 0.38 (0.58) -- 1994 10.44 0.46 (0.35) (0.46) (0.20) 1993(2) 10.00 0.44 0.44 (0.44) -- Flex Shares 1997 $10.07 $ 0.51 $ 0.10 $(0.51) $ -- 1996(3) 10.33 0.52 (0.26) (0.52) -- SHORT-TERM BOND FUND Trust Shares 1997 $ 9.86 $ 0.53 $ 0.07 $(0.53) $(0.03) 1996 9.98 0.54 (0.10) (0.54) (0.02) 1995 9.79 0.53 0.19 (0.53) -- 1994 10.01 0.42 (0.21) (0.42) (0.01) 1993(4) 10.00 0.08 0.01 (0.08) -- Investor Shares 1997 $ 9.88 $ 0.51 $ 0.06 $(0.51) $(0.03) 1996 10.01 0.52 (0.10) (0.53) (0.02) 1995 9.81 0.51 0.19 (0.50) -- 1994 10.03 0.40 (0.21) (0.40) (0.01) 1993(5) 10.06 0.06 (0.03) (0.06) -- Flex Shares 1997 $ 9.88 $ 0.48 $ 0.06 $(0.48) $(0.03) 1996(6) 10.02 0.47 (0.12) (0.47) (0.02) SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 1997 $ 9.84 $ 0.51 $ 0.04 $(0.51) $ -- 1996 9.93 0.55 (0.09) (0.55) -- 1995 9.82 0.47 0.11 (0.47) -- 1994 9.98 0.33 (0.11) (0.33) (0.05) 1993(4) 10.00 0.07 (0.02) (0.07) -- Investor Shares 1997 $ 9.84 $ 0.50 $ 0.04 $(0.50) $ -- 1996 9.94 0.54 (0.10) (0.54) -- 1995 9.83 0.46 0.11 (0.46) -- 1994 9.99 0.32 (0.12) (0.31) (0.05) 1993(7) 10.01 0.06 (0.02) (0.06) -- Flex Shares 1997 $ 9.82 $ 0.47 $ 0.03 $(0.47) $ -- 1996(8) 9.96 0.48 (0.14) (0.48) -- LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 1997 $ 9.99 $ 0.58 $ 0.04 $(0.58) $(0.01) 1996 10.11 0.62 (0.14) (0.60) -- 1995(9) 10.00 0.58 0.13 (0.60) -- Investor Shares 1997 $ 9.97 $ 0.56 $ 0.04 $(0.56) $(0.01) 1996 10.11 0.60 (0.14) (0.60) -- 1995(10) 9.98 0.58 0.13 (0.58) -- Flex Shares 1997 $ 9.99 $ 0.52 $ 0.04 $(0.52) $(0.01) 1996(3) 10.14 0.55 (0.15) (0.55) --
* Annualized. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on July 16, 1992. (2) Commenced operations on June 11, 1992. (3) Commenced operations on June 7, 1995. (4) Commenced operations on March 15, 1993. (5) Commenced operations on March 22, 1993. (6) Commenced operations on June 20, 1995. (7) Commenced operations on March 18, 1993. (8) Commenced operations on June 22, 1995. (9) Commenced operations on June 7, 1994. (10) Commenced operations on July 17, 1994. 132 - --------------------------------------------------------------------------------
RATIO OF EXPENSES TO RATIO OF AVERAGE NET NET ASSETS RATIO OF INVESTMENT (EXCLUDING NET ASSET NET ASSETS EXPENSES TO INCOME TO WAIVERS VALUE END TOTAL END OF AVERAGE NET AVERAGE NET AND OF PERIOD RETURN (A) PERIOD (000) ASSETS ASSETS REIMBURSEMENTS) --------- ---------- ------------ ----------- ------------ --------------- INVESTMENT GRADE BOND FUND Trust Shares $10.16 6.99% $633,646 0.75% 5.89% 0.85% 10.07 4.02% 599,514 0.75% 5.81% 0.87% 10.26 10.39% 543,308 0.75% 6.22% 0.88% 9.89 1.17% 460,538 0.75% 4.77% 0.88% 10.45 9.34%* 336,132 0.74%* 5.14%* 0.87%* Investor Shares $10.16 6.66% $ 33,165 1.15% 5.48% 1.41% 10.06 3.50% 36,155 1.15% 5.40% 1.44% 10.26 10.04% 33,772 1.15% 5.79% 1.49% 9.89 0.86% 35,775 1.14% 4.39% 1.41% 10.44 9.21%* 24,375 1.14%* 4.75%* 1.46%* Flex Shares $10.17 6.16% $ 5,763 1.64% 5.00% 2.20% 10.07 2.50%* 4,621 1.64%* 4.84%* 2.49%* SHORT-TERM BOND FUND Trust Shares $ 9.90 6.30% $ 89,701 0.65% 5.37% 0.78% 9.86 4.45% 91,156 0.65% 5.39% 0.81% 9.98 7.60% 60,952 0.65% 5.49% 0.85% 9.79 2.02% 34,772 0.65% 4.15% 0.85% 10.01 4.45%* 25,334 0.64%* 3.88%* 1.11%* Investor Shares $ 9.91 5.97% $ 2,182 0.85% 5.16% 1.58% 9.88 4.23% 2,700 0.85% 5.20% 1.72% 10.01 7.44% 2,609 0.85% 5.24% 1.56% 9.81 1.81% 2,381 0.85% 3.94% 2.52% 10.03 1.65%* 716 0.85%* 3.85%* 7.22%* Flex Shares $ 9.91 5.62% $ 1,073 1.20% 4.82% 3.02% 9.88 3.73%* 966 1.20%* 4.77%* 4.06%* SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares $ 9.88 5.76% $ 21,988 0.65% 5.23% 0.92% 9.84 4.73% 10,149 0.65% 5.56% 1.00% 9.93 6.11% 9,599 0.65% 4.91% 1.08% 9.82 2.17% 12,723 0.65% 3.23% 0.81% 9.98 2.22%* 30,336 0.63%* 3.34%* 1.04%* Investor Shares $ 9.88 5.59% $ 3,921 0.80% 5.05% 1.35% 9.84 4.52% 4,192 0.80% 5.43% 1.32% 9.94 6.03% 7,144 0.80% 4.74% 1.33% 9.83 2.01% 4,841 0.78% 3.11% 1.41% 9.99 1.84%* 2,423 0.80%* 3.16%* 3.42%* Flex Shares $ 9.85 5.19% $ 1,091 1.05% 4.75% 2.51% 9.82 3.72%* 2,423 1.05%* 5.03%* 2.97%* LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares $10.02 6.43% $123,903 0.65% 5.81% 0.78% 9.99 4.84% 73,370 0.65% 6.04% 0.84% 10.11 7.50%+ 41,823 0.65%* 6.43%* 0.93%* Investor Shares $10.00 6.17% $ 2,426 0.90% 5.55% 1.48% 9.97 4.59% 2,512 0.90% 5.75% 2.25% 10.11 7.45%+ 623 0.90%* 6.27%* 7.74%* Flex Shares $10.02 5.80% $ 1,409 1.25% 5.20% 2.66% 9.99 4.10%* 1,349 1.25%* 5.38%* 3.59%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (EXCLUDING WAIVERS PORTFOLIO AND TURNOVER REIMBURSEMENTS) RATE --------------- --------- INVESTMENT GRADE BOND FUND Trust Shares 5.79% 297.82% 5.69% 184.33% 6.09% 237.66% 4.64% 259.19% 5.01%* 299.32% Investor Shares 5.22% 297.82% 5.11% 184.33% 5.45% 237.66% 4.12% 259.19% 4.43%* 299.32% Flex Shares 4.44% 297.82% 3.99%* 184.33% SHORT-TERM BOND FUND Trust Shares 5.24% 117.83% 5.23% 162.62% 5.29% 200.49% 3.95% 74.85% 3.41%* 63.89% Investor Shares 4.43% 117.83% 4.33% 162.62% 4.53% 200.49% 2.27% 74.85% (2.52%)* 63.89% Flex Shares 3.00% 117.83% 1.91%* 162.62% SHORT-TERM U.S. TREASURY SECURITIES FUND Trust Shares 4.96% 92.89% 5.21% 94.00% 4.48% 87.98% 3.07% 116.57% 2.93%* 36.44% Investor Shares 4.50% 92.89% 4.91% 94.00% 4.21% 87.98% 2.48% 116.57% 0.54%* 36.44% Flex Shares 3.29% 92.89% 3.11%* 94.00% LIMITED-TERM FEDERAL MORTGAGE SECURITIES FUND Trust Shares 5.68% 133.45% 5.85% 83.01% 6.15%* 67.63% Investor Shares 4.97% 133.45% 4.40% 83.01% (0.57%)* 67.63% Flex Shares 3.79% 133.45% 3.04%* 83.01%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 133 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET ASSET NET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS VALUE NET UNREALIZED GAINS FROM FROM BEGINNING OF INVESTMENT (LOSSES) NET INVESTMENT REALIZED PERIOD INCOME ON INVESTMENTS INCOME CAPITAL GAINS ------------ ---------- ---------------- -------------- ------------- U.S. GOVERNMENT SECURITIES FUND Trust Shares 1997 $ 9.91 $ 0.62 $ 0.11 $(0.62) $ -- 1996 10.27 0.62 (0.33) (0.62) (0.03) 1995(1) 9.98 0.53 0.29 (0.53) -- Investor Shares 1997 $ 9.90 $ 0.58 $ 0.12 $(0.58) $ -- 1996 10.26 0.59 (0.33) (0.59) (0.03) 1995(2) 10.00 0.56 0.26 (0.56) -- Flex Shares 1997 $ 9.91 $ 0.53 $ 0.11 $(0.53) $ -- 1996(3) 10.31 0.52 (0.37) (0.52) (0.03) PRIME QUALITY MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- Investor Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.05 -- (0.05) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- Investor Shares 1997 $ 1.00 $ 0.05 $ -- $(0.05) $ -- 1996 1.00 0.05 -- (0.05) -- 1995 1.00 0.04 -- (0.04) -- 1994 1.00 0.03 -- (0.03) -- 1993(4) 1.00 0.03 -- (0.03) -- TAX-EXEMPT MONEY MARKET FUND Trust Shares 1997 $ 1.00 $ 0.03 $ -- $(0.03) $ -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- 1993(4) 1.00 0.02 -- (0.02) -- Investor Shares 1997 $ 1.00 $ 0.03 $ -- $(0.03) $ -- 1996 1.00 0.03 -- (0.03) -- 1995 1.00 0.03 -- (0.03) -- 1994 1.00 0.02 -- (0.02) -- 1993(4) 1.00 0.02 -- (0.02) --
* Annualized. + Returns are for the period indicated and have not been annualized. (A) Total return figures do not reflect applicable sales loads. (1) Commenced operations on July 31, 1994. (2) Commenced operations on June 9, 1994. (3) Commenced operations on June 7, 1995. (4) Commenced operations on June 8, 1992. 134 - --------------------------------------------------------------------------------
RATIO OF EXPENSES TO RATIO OF AVERAGE NET RATIO OF NET ASSETS EXPENSES INVESTMENT (EXCLUDING NET ASSET NET ASSETS TO INCOME TO WAIVERS VALUE END TOTAL END OF AVERAGE AVERAGE AND OF PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS REIMBURSEMENTS) --------- ---------- ------------ ---------- ---------- --------------- U.S. GOVERNMENT SECURITIES FUND Trust Shares $10.02 7.54% $ 19,471 0.75% 6.19% 1.02% 9.91 2.77% 10,277 0.75% 6.05% 1.25% 10.27 8.64%+ 3,291 0.75%* 6.67%* 3.33%* Investor Shares $10.02 7.21% $ 2,243 1.15% 5.76% 1.79% 9.90 2.47% 2,396 1.15% 5.68% 2.50% 10.26 8.61%+ 589 1.15%* 6.08%* 6.84%* Flex Shares $10.02 6.57% $ 2,801 1.66% 5.26% 2.42% 9.91 1.42%* 2,826 1.66%* 5.18%* 2.86%* PRIME QUALITY MONEY MARKET FUND Trust Shares $ 1.00 5.01% $1,086,555 0.58% 4.90% 0.76% 1.00 5.25% 1,050,800 0.58% 5.11% 0.78% 1.00 4.79% 799,189 0.58% 4.77% 0.79% 1.00 2.88% 583,399 0.58% 2.86% 0.79% 1.00 2.92%* 410,991 0.58%* 2.85%* 0.78%* Investor Shares $ 1.00 4.84% $ 283,544 0.75% 4.74% 0.97% 1.00 5.08% 215,696 0.75% 4.94% 1.00% 1.00 4.62% 157,616 0.75% 4.55% 1.01% 1.00 2.71% 129,415 0.75% 2.67% 0.99% 1.00 2.75%* 61,578 0.75%* 2.68%* 1.02%* U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares $ 1.00 4.83% $ 344,350 0.61% 4.73% 0.76% 1.00 5.14% 325,493 0.61% 5.02% 0.78% 1.00 4.67% 434,111 0.61% 4.64% 0.80% 1.00 2.77% 309,228 0.61% 2.69% 0.77% 1.00 2.79%* 453,567 0.61%* 2.71%* 0.78%* Investor Shares $ 1.00 4.69% $ 63,178 0.75% 4.59% 0.96% 1.00 4.99% 58,608 0.75% 4.88% 0.99% 1.00 4.51% 46,639 0.75% 4.51% 1.02% 1.00 2.63% 32,395 0.75% 2.54% 0.97% 1.00 2.65%* 16,688 0.75%* 2.57%* 1.11%* TAX-EXEMPT MONEY MARKET FUND Trust Shares $ 1.00 3.09% $ 333,006 0.50% 3.04% 0.66% 1.00 3.28% 273,613 0.50% 3.23% 0.68% 1.00 3.10% 215,413 0.45% 3.12% 0.70% 1.00 2.08% 143,982 0.42% 2.05% 0.71% 1.00 2.12%* 78,416 0.41%* 2.07%* 0.70%* Investor Shares $ 1.00 2.97% $ 102,013 0.62% 2.92% 0.83% 1.00 3.16% 95,223 0.62% 3.10% 0.85% 1.00 3.00% 87,647 0.55% 3.00% 0.87% 1.00 1.96% 61,675 0.54% 1.93% 0.88% 1.00 2.00%* 35,209 0.53%* 1.95%* 0.95%* RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (EXCLUDING WAIVERS PORTFOLIO AND TURNOVER REIMBURSEMENTS) RATE --------------- -------- U.S. GOVERNMENT SECURITIES FUND Trust Shares 5.92% 21.15% 5.55% 83.38% 4.09%* 30.39% Investor Shares 5.12% 21.15% 4.33% 83.38% 0.39%* 30.39% Flex Shares 4.50% 21.15% 3.98%* 83.38% PRIME QUALITY MONEY MARKET FUND Trust Shares 4.72% -- 4.91% -- 4.56% -- 2.65% -- 2.65%* -- Investor Shares 4.52% -- 4.69% -- 4.29% -- 2.43% -- 2.41%* -- U.S. GOVERNMENT SECURITIES MONEY MARKET FUND Trust Shares 4.58% -- 4.85% -- 4.45% -- 2.53% -- 2.54%* -- Investor Shares 4.38% -- 4.64% -- 4.24% -- 2.32% -- 2.21%* -- TAX-EXEMPT MONEY MARKET FUND Trust Shares 2.88% -- 3.05% -- 2.87% -- 1.76% -- 1.78%* -- Investor Shares 2.71% -- 2.87% -- 2.68% -- 1.59% -- 1.53%* --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 135 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts Business Trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-three portfolios: the Value Income Stock Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International Equity Index Fund, the International Equity Fund, the Sunbelt Equity Fund, the Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the Tennessee Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term Federal Mortgage Securities Fund, and the U.S. Government Securities Fund, (collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Securities Money Market Fund, (collectively the "Money Market Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust. SECURITY VALUATION--Investment securities held by the Money Market Funds are stated at amortized cost, which approximates market value. Investment securities held by the Non-Dollar Funds that are listed on a securities exchange for which market quotations are available are valued at the last quoted sales price each business day. If there is no such reported sale, these securities and unlisted securities for which market quotations are readily available are valued at the most recently quoted bid price. Foreign securities in the Emerging Markets Equity Fund, the International Equity Fund and the International Equity Index Fund are valued based upon quotations from the primary market in which they are traded. Debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. FEDERAL INCOME TAXES--It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Money Market Funds are accreted and amortized ratably to maturity and are included in interest income. Purchase discounts and premiums on securities held by the Non-Dollar Funds are accreted and amortized to maturity using the scientific interest method, which approximates the effective interest method. REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE--The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. The maximum offering price per share for Investor shares of the Investment Grade Bond, the Investment Grade Tax-Exempt Bond, the Capital Growth, the Value Income Stock, the Sunbelt 136 - -------------------------------------------------------------------------------- Equity, the Mid-Cap Equity, the Balanced, the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the Tennessee Tax-Exempt Bond, the U.S. Government Securities, the International Equity, and the International Equity Index Funds is equal to the net asset value per share plus a sales load of 3.75%. The maximum offering price per share for Investor shares of the Short-Term U.S. Treasury Securities Fund is equal to the net asset value per share plus a sales load of 1.00%. The maximum offering price per share for Investor shares of the Short-Term Bond Fund is equal to the net asset value per share plus a sales load of 2.00%. The maximum offering price per share for Investor shares of the Limited-Term Federal Mortgage Securities Fund is equal to the net asset value per share plus a sales load of 2.50% Flex Shares of the Funds may be purchased at their net asset value. Shares redeemed within the first year after purchase will be subject to a contingent deferred sales charge ("CDSC") equal to 2.00% of the net asset value of the shares at the time of redemption. The CDSC will not apply to shares redeemed after such time. FOREIGN CURRENCY TRANSLATION--The books and records of the Emerging Markets Equity, the International Equity and the International Equity Index Funds are maintained in U.S. dollars on the following basis: (I) market value of investment securities, assets and liabilities at the current rate of exchange; and (II) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The Emerging Markets Equity, the International Equity and the International Equity Index Funds do not isolate that portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The Emerging Markets Equity, the International Equity and the International Equity Index Funds report certain foreign currency related transactions as components of realized and unrealized gains and losses for financial reporting purposes, whereas such components are treated as ordinary income for Federal income tax purposes. OTHER--Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income of each of the Money Market Funds and the Investment Grade Bond, the Investment Grade Tax-Exempt Bond, the Short-Term U.S. Treasury Securities, the Short-Term Bond, the Florida Tax-Exempt Bond, the Georgia Tax-Exempt Bond, the Tennessee Tax-Exempt Bond, the U.S. Government Securities and the Limited-Term Federal Mortgage Securities Funds are declared each business day and paid to shareholders on a monthly basis. Distributions from net investment income are declared and paid each calendar quarter by the Capital Growth, the Value Income Stock, the Sunbelt Equity, the Mid-Cap Equity, the Small Cap Equity and the Balanced Funds. Distributions from net investment income are declared and paid annually by the Emerging Markets Equity, the International Equity and the International Equity Index Funds. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. RECLASSIFICATION OF COMPONENTS OF NET ASSETS--The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from generally accepted accounting principles. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Accordingly, the following permanent differences, primarily attributable to a net operating loss in the Sunbelt Equity Fund and the 137 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 classification of short-term capital gains and ordinary income for tax purposes related to the other funds, have been reclassified to/from the following accounts:
UNDISTRIBUTED ACCUMULATED NET INVESTMENT PAID-IN-CAPITAL REALIZED GAIN INCOME (000) (000) (000) --------------- ------------- -------------- Mid-Cap Equity Fund..................... $-- $(207) $ 207 International Equity Index Fund......... -- (204) 204 International Equity Fund............... -- 83 (83) Sunbelt Equity Fund..................... (2,967) -- 2,967 Short-Term Bond Fund.................... -- (54) 54
These reclassifications have no effect on net assets or net asset values per share. USE OF ESTIMATES--The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. 3. Organization Costs and Transactions with Affiliates: The Trust incurred organization costs of approximately $808,836 including approximately $395,594 relating to state registration fees. These costs have been deferred in the accounts of the Funds and are being amortized on a straight line basis over a period of sixty months commencing with operations with the exception of state registration fees, which are being amortized over a period of twelve months. The costs include legal fees of approximately $60,383 for organizational work performed by a law firm of which two officers of the Trust are partners. On March 18, 1992, the Trust sold initial shares of beneficial interest to SEI Fund Resources (the "Administrator"). In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. Administration, Transfer Agency Servicing and Distribution Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Annuity Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. The Trust and the Distributor are parties to a Distribution Agreement dated May 29, 1995 regarding the Flex Shares and a Distribution Agreement dated November 21, 1995 with respect to the Trust and Investor shares. The Distributor will receive no fees for its distribution services under this agreement for the Trust Shares of any Fund. With respect to the Investor Shares and Flex Shares, the Distributor receives amounts, pursuant to a Distribution Plan and (in the case of Flex Shares) a Distribution and Service Plan, as outlined in the table in footnote 5 under the column titled "Distribution Fee". 5. Investment Advisory and Custodian Agreements: The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."), Trusco Capital Management ("Trusco"), the SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga have entered into advisory agreements dated May 29, 1992, June 15, 1993, December 20, 1993 and December 20, 1993 respectively. 138 - -------------------------------------------------------------------------------- Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets:
MAXIMUM INVESTOR MAXIMUM MAXIMUM TRUST SHARE INVESTOR FLEX SHARE FLEX ANNUAL SHARE DISTRI- SHARE DISTRI- SHARE ADVISORY MAXIMUM BUTION MAXIMUM BUTION AND MAXIMUM FEE EXPENSE FEE EXPENSE SERVICE FEE EXPENSE -------- ------- -------- -------- ----------- ------- TRUSCO: International Equity Index Fund*.................. .90% 1.05% .38% 1.45% 1.00% 2.10% Sunbelt Equity Fund............................... 1.15% 1.15% .43% 1.60% 1.00% 2.20% Short-Term Bond Fund.............................. .65% .65% .23% .85% 1.00% 1.20% Short-Term U.S. Treasury Securities Fund.......... .65% .65% .18% .80% 1.00% 1.05% U.S. Government Securities Fund................... .74% .75% .38% 1.15% 1.00% 1.66% Prime Quality Money Market Fund................... .65% .58% .20% .75% -- -- U.S. Government Securities Money Market Fund...... .65% .61% .17% .75% -- -- Tax-Exempt Money Market Fund...................... .55% .60% .15% .72% -- -- STI CAPITAL MANAGEMENT, N.A.: Value Income Stock Fund........................... .80% .95% .33% 1.30% 1.00% 2.00% Mid-Cap Equity Fund............................... 1.15% 1.15% .43% 1.60% 1.00% 2.20% Capital Growth Fund............................... 1.15% 1.15% .68% 1.80% 1.00% 2.27% Balanced Fund..................................... .95% .95% .28% 1.25% 1.00% 2.01% Small Cap Equity Fund............................. 1.15% 1.20% -- -- -- -- Investment Grade Tax-Exempt Bond Fund............. .74% .75% .43% 1.15% 1.00% 1.63% Florida Tax-Exempt Bond Fund...................... .65% .65% .18% .85% 1.00% 1.35% Investment Grade Bond Fund........................ .74% .75% .43% 1.15% 1.00% 1.64% Limited-Term Federal Mortgage Securities Fund..... .65% .65% .23% .90% 1.00% 1.25% International Equity Fund......................... 1.25% 1.46% .33% 1.81% 1.00% 2.51% Emerging Markets Equity Fund...................... 1.30% 1.55% -- -- -- -- MAXIMUM INVESTOR MAXIMUM MAXIMUM TRUST SHARE INVESTOR FLEX SHARE FLEX ANNUAL SHARE DISTRI- SHARE DISTRI- SHARE ADVISORY MAXIMUM BUTION MAXIMUM BUTION AND MAXIMUM FEE EXPENSE FEE EXPENSE SERVICE FEE EXPENSE -------- ------- -------- -------- ----------- ------- SUNTRUST BANK, ATLANTA: Georgia Tax-Exempt Bond Fund...................... .65% .65% .18% .85% 1.00% 1.35% SUNTRUST BANK, CHATTANOOGA: Tennessee Tax-Exempt Bond Fund.................... .65% .65% .18% .85% 1.00% 1.35%
- -------------------- * Trusco and SunBank serve as joint advisors to the International Equity Index Fund. The Investment Advisors, the Administrator and the Distributor have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for all the Funds except the Emerging Markets Equity, the International Equity and the International Equity Index Funds who utilize the Bank of New York as custodian. Fees of the Custodians are paid on the basis of the net assets of the Funds. The Custodians play no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 139 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 6. Investment Transactions: The cost of purchases and the proceeds from sales of securities, excluding short-term investments and U.S. Government Securities, for the period ended May 31, 1997, were as follows:
PURCHASES SALES (000) (000) ---------- ---------- Value Income Stock Fund................................. $1,510,065 $1,479,214 Mid-Cap Equity Fund..................................... 418,847 401,422 Small Cap Equity Fund................................... 138,246 20,448 Capital Growth Fund..................................... 1,613,504 1,785,362 Balanced Fund........................................... 162,679 134,261 Emerging Markets Equity Fund............................ 39,912 6,023 International Equity Index Fund......................... 1,316 43,227 International Equity Fund............................... 683,881 480,728 Sunbelt Equity Fund..................................... 297,705 337,710 Investment Grade Tax-Exempt Bond Fund................... 737,733 729,258 Florida Tax-Exempt Bond Fund............................ 69,939 56,743 Tennessee Tax-Exempt Bond Fund.......................... 858 814 Georgia Tax-Exempt Bond Fund............................ 18,954 5,152 Investment Grade Bond Fund.............................. 833,857 550,764 Short-Term Bond Fund.................................... 57,688 42,957 Short-Term U.S. Treasury Securities Fund................ -- -- Limited-Term Federal Mortgage Securities Fund........... -- -- U.S. Government Securities Fund......................... -- --
The cost of purchases and proceeds from sales of U.S. Government Securities were:
PURCHASES SALES (000) (000) ---------- ---------- Value Income Stock Fund.............................. $ -- $ -- Mid-Cap Equity Fund.................................. -- -- Small Cap Equity Fund................................ -- -- Capital Growth Fund.................................. -- -- Balanced Fund........................................ 79,476 93,071 Emerging Markets Equity Fund......................... -- -- International Equity Index Fund...................... -- -- International Equity Fund............................ -- -- Sunbelt Equity Fund.................................. -- -- Investment Grade Tax-Exempt Bond Fund................ -- -- Florida Tax-Exempt Bond Fund......................... -- -- Tennessee Tax-Exempt Bond Fund....................... -- -- Georgia Tax-Exempt Bond Fund......................... -- -- Investment Grade Bond Fund........................... $1,016,624 $1,283,246 Short-Term Bond Fund................................. 49,756 70,593 Short-Term U.S. Treasury Securities Fund............. 32,074 21,455 Limited-Term Federal Mortgage Securities Fund........ 187,177 136,508 U.S. Government Securities Fund...................... 12,660 4,083
At May 31, 1997, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes were not materially different from amounts reported for financial reporting purposes. The aggregate gross unrealized appreciation and depreciation for securities held by the Funds at May 31, 1997, were as follows:
VALUE INCOME MID-CAP SMALL-CAP STOCK EQUITY EQUITY FUND FUND FUND (000) (000) (000) --------- ----------- ----------- Aggregate gross unrealized appreciation............ $ 181,099 $ 36,213 $ 8,808 Aggregate gross unrealized depreciation............ (26,682) (10,378) (1,164) --------- ----------- ----------- Net unrealized appreciation........................ $ 154,417 $ 25,835 $ 7,644 --------- ----------- ----------- --------- ----------- -----------
EMERGING CAPITAL MARKETS GROWTH BALANCED EQUITY FUND FUND FUND (000) (000) (000) --------- ----------- ----------- Aggregate gross unrealized appreciation............ $ 201,727 $ 13,349 $ 3,401 Aggregate gross unrealized depreciation............ (20,916) (1,442) (1,293) --------- ----------- ----------- Net unrealized appreciation........................ $ 180,811 $ 11,907 $ 2,108 --------- ----------- ----------- --------- ----------- -----------
INTERNATIONAL EQUITY INTERNATIONAL SUNBELT INDEX EQUITY EQUITY FUND FUND FUND (000) (000) (000) ------------- ------------- --------- Aggregate gross unrealized appreciation...... $ 12,670 $ 69,379 $ 94,010 Aggregate gross unrealized depreciation...... (4,169) (4,549) (12,447) ------------- ------------- --------- Net unrealized appreciation.................. $ 8,501 $ 64,830 $ 81,563 ------------- ------------- --------- ------------- ------------- ---------
INVESTMENT GRADE FLORIDA TENNESSEE TAX-EXEMPT TAX-EXEMPT BOND TAX-EXEMPT BOND BOND FUND FUND FUND (000) (000) (000) ------------- --------------- --------------- Aggregate gross unrealized appreciation..... $ 1,557 $ 843 $ 132 Aggregate gross unrealized depreciation..... (84) (43) (12) ------ ----- ----- Net unrealized appreciation................. $ 1,473 $ 800 $ 120 ------ ----- ----- ------ ----- -----
140 - --------------------------------------------------------------------------------
GEORGIA INVESTMENT SHORT- TAX-EXEMPT GRADE BOND TERM BOND FUND FUND FUND (000) (000) (000) ------------- ----------- ------------- Aggregate gross unrealized appreciation....... $ 425 $ 3,182 $ 172 Aggregate gross unrealized depreciation....... (123) (2,877) (473) ----- ----------- ----- Net unrealized appreciation/(depreciation).... $ 302 $ 305 $ (301) ----- ----------- ----- ----- ----------- -----
SHORT- LIMITED- TERM TERM U.S. FEDERAL U.S. TREASURY MORTGAGE GOVERNMENT SECURITIES SECURITIES SECURITIES FUND FUND FUND (000) (000) (000) ------------- ----------- ------------- Aggregate gross unrealized appreciation......... $ 23 $ 268 $ 85 Aggregate gross unrealized depreciation......... (53) (413) (299) --- ----- ----- Net unrealized appreciation/(depreciation)...... $ (30) $ (145) $ (214) --- ----- ----- --- ----- -----
Subsequent to October 31, 1996, the Funds recognized net capital losses for tax purposes that have been deferred to 1997 and can be used to offset future capital gains at May 31, 1997. The Funds also had capital loss carryforwards at May 31, 1997 as follows:
CAPITAL LOSS POST CARRYOVER EXPIRES EXPIRES EXPIRES EXPIRES 10/31 5/31/97 2002 2003 2004 2005 DEFERRAL FUND (000) (000) (000) (000) (000) (000) - ------------------------------ ------------ ------- ------- ------- ------- -------- Florida Tax-Exempt Bond Fund......................... $ 127 $-- $ -- $-- $ 127 $ 83 Tennessee Tax Exempt Bond Fund.................... 12 -- -- -- 12 -- Investment Grade Bond Fund.................... 10,613 -- 6,388 -- 4,225 -- Short-Term Bond Fund.......... 137 -- -- -- 137 120 Short-Term U.S. Treasury Securities Fund.............. 232 -- 203 29 -- 26 Limited-Term Federal Mortgage Securities Fund.............. -- -- -- -- -- 28 U.S. Government Securities Fund......................... 31 -- -- -- 31 20 Prime Quality Money Market Fund......................... 379 3 173 -- 203 -- U.S. Government Securities Money Market Fund............ 62 -- 11 -- 51 -- Tax-Exempt Money Market Fund......................... 4 -- -- 4 -- --
For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any net realized capital gains. 7. Concentration of Credit Risk: The Prime Quality Money Market Fund invests primarily in high quality money market instruments rated in the highest short-term rating category by Standard & Poor's Ratings Group ("S&P") or Moody's Investors Services, Inc. ("Moody's") or, if not rated, are determined by the Advisor to be of comparable quality. The U.S. Government Securities Money Market Fund invests exclusively in U.S. Treasury obligations, U.S. Government subsidiary corporation securities which are backed by the full faith and credit of the U.S. Government and repurchase agreements with approved dealers collateralized by U.S. Treasury securities and U.S. Government subsidiary corporation securities. The Tax-Exempt Money Market Fund invests in high quality, U.S. dollar denominated municipal securities rated in one of the two highest short-term rating categories or, if not rated, are determined by the Advisor to be of comparable quality. The Investment Grade Bond Fund, the Short-Term Bond Fund and the Balanced Fund invest primarily in investment grade obligations rated at least BBB or better by S&P or Baa or better by Moody's or, if not rated, are determined by the Advisor to be of comparable quality. The Investment Grade Tax-Exempt Fund invests primarily in investment grade municipal securities. Municipal securities must be rated BBB or better by S&P or Baa or better by Moody's in the case of bonds; SP-1, SP-2 or MIG-1, MIG-2 in the case of notes; A-1, A-2 or P-1, P-2 in the case of commercial paper; and VMIG-1, VMIG-2 in the case of variable rate demand obligations. The Short-Term U.S. Treasury Securities Fund invests exclusively in obligations issued by the U.S. Treasury with a maximum remaining maturity of 3 years or less. The Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, and the Tennessee Tax-Exempt Bond Fund invest primarily in municipal bonds concentrated in each of their respective states. Municipal securities must be rated BBB or better by S&P or Baa or better by Moody's in the case of bonds; A-1, A-2 or P-1, P-2 in the case of tax-exempt commercial paper; and VMIG-1, VMIG-2 in 141 NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 the case of variable rate demand obligations. The U.S. Government Securities Fund invests primarily in obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities, including mortgage backed securities. The Limited-Term Federal Mortgage Securities Fund invests in mortgage related securities issued or guaranteed by U.S. Government agencies. Up to 35% of the U.S. Government Securities Fund and the Limited-Term Federal Mortgage Securities Fund may be invested in corporate, or government bonds that carry a rating of BBB or better by S&P or Baa or better by Moody's. The ability of the issuers of the securities held by the Funds to meet their obligations may be affected by economic developments in a specific industry, state or region, or by changing business conditions. 8. Consent of Sole Shareholder: On December 30, 1996, the sole shareholder of the Emerging Markets Equity Fund and Small Cap Equity Fund (the "Funds") approved the following: SEI Fund Resources as administrator of the Funds, STI Capital Management, N.A. as investment advisor to the assets of the Funds, SEI Investments Distribution Co. as distributor of the shares of the Funds, the Distribution and Service Plan for Flex Shares, the Distribution Plan for Investor Shares, and Arthur Andersen LLP as independent public accountants of the Funds. 142 STI CLASSIC FUNDS INVESTMENT ADVISOR: TRUSCO CAPITAL MANAGEMENT, INC. This Statement of Additional Information is not a prospectus. It is intended to provide additional information regarding the activities and operations of the Trust and should be read in conjunction with the Trust's Classic Institutional Cash Management and Classic Institutional U.S. Treasury Securities Money Market Fund prospectus dated October 1, 1997. The prospectus may be obtained through the Distributor, SEI Investments Distribution Co., Oaks, Pennsylvania 19456. TABLE OF CONTENTS PAGE THE TRUST...............................................................B- DESCRIPTION OF PERMITTED INVESTMENTS....................................B- INVESTMENT LIMITATIONS..................................................B- INVESTMENT ADVISOR......................................................B- THE ADMINISTRATOR.......................................................B- THE DISTRIBUTOR.........................................................B- TRUSTEES AND OFFICERS OF THE TRUST......................................B- COMPUTATION OF YIELD....................................................B- ADVERTISING.............................................................B- PURCHASE AND REDEMPTION OF SHARES.......................................B- DETERMINATION OF NET ASSET VALUE........................................B- TAXES...................................................................B- FUND TRANSACTIONS.......................................................B- DESCRIPTION OF SHARES...................................................B- SHAREHOLDER LIABILITY...................................................B- LIMITATION OF TRUSTEES' LIABILITY.......................................B- 5% AND 25% SHAREHOLDERS.................................................B- EXPERTS.................................................................B- FINANCIAL STATEMENTS....................................................F- October 1, 1997 THE TRUST STI Classic Funds (the "Trust") is a diversified, open-end management investment company established under Massachusetts law as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Declaration of Trust permits the Trust to offer separate series ("Funds") of units of beneficial interest ("shares") and different classes of shares of each Fund. This Statement of Additional Information relates to the Trust's Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund (collectively, the "Funds"), each of which currently offers one class of shares. DESCRIPTION OF PERMITTED INVESTMENTS FOREIGN SECURITIES The Institutional Cash Management Money Market Fund may invest in U.S. dollar denominated obligations or securities of foreign issuers. Possible investments include equity securities of foreign entities, obligations of foreign branches of U.S. banks and of foreign banks, including, without limitation, European Certificates of Deposit, European Time Deposits, European Bankers' Acceptances, Canadian Time Deposits and Yankee Certificates of Deposit, and investments in Canadian Commercial Paper, Europaper and foreign securities. These instruments may subject the Fund to investment risks that differ in some respects from those related to investments in obligations of U.S. domestic issuers. Such risks include future adverse political and economic developments, the possible imposition of withholding taxes on interest or other income, possible seizure, nationalization, or expropriation of foreign deposits, the possible establishment of exchange controls or taxation at the source, greater fluctuations in value due to changes in exchange rates, or the adoption of other foreign governmental restrictions which might adversely affect the payment of principal and interest on such obligations. Such investments may also entail higher custodial fees and sales commissions than domestic investments. Foreign issuers of securities or obligations are often subject to accounting treatment and engage in business practices different from those respecting domestic issuers of similar securities or obligations. Foreign branches of U.S. banks and foreign banks may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks. INVESTMENT COMPANY SHARES Investment companies typically incur fees that are separate from those fees incurred directly by the Funds. A Fund's purchase of such investment company securities results in the layering of expenses, such that Shareholders would indirectly bear a proportionate share of the operating expenses of such investment companies, including advisory fees. B-2 MUNICIPAL SECURITIES The Funds may invest in municipal securities. The two principal classifications of municipal securities are "general obligation" and "revenue" issues. General obligation issues are issues involving the credit of an issuer possessing taxing power and are payable from the issuer's general unrestricted revenues, although the characteristics and method of enforcement of general obligation issues may vary according to the law applicable to the particular issue. Revenue issues are payable only from the revenues derived from a particular facility or class of facilities or other specific revenue source. A Fund may also invest in "moral obligation" issues, which are normally issued by special purpose authorities. Moral obligation issues are not backed by the full faith and credit of the state and are generally backed by the agreement of the issuing authority to request appropriations from the state legislative body. Municipal securities include debt obligations issued by governmental entities to obtain funds for various public purposes, such as the construction of a wide range of public facilities, the refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans to other public institutions and facilities. Certain private activity bonds that are issued by or on behalf of public authorities to finance various privately-owned or operated facilities are included within the term "Municipal Securities." Private activity bonds are industrial development bonds are generally revenue bonds, the credit and quality of which are directly related to the credit of the private user of the facilities. Municipal securities may also include general obligation notes, tax anticipation notes, bond anticipation notes, revenue anticipation notes, project notes, certificates of indebtedness, demand notes, tax-exempt commercial paper, construction loan notes and other forms of short-term, tax-exempt loans. Such instruments are issued with a short-term maturity in anticipation of the receipt of fax funds, the proceeds of bond placements or other revenues. Project notes are issued by a state or local housing agency and are sold by the Department of Housing and Urban Development. While the issuing agency has the primary obligation with respect to its project notes, they are also secured by the full faith and credit of the United States through agreements with the issuing authority which provide that, if required, the federal government will end the issuer an amount equal to the principal of and interest on the project notes. The quality of municipal securities, both within a particular classification and between classifications, will vary, and the yields on municipal securities depend upon a variety of factors, including general money market conditions, the financial condition of the issuer (or other entity whose financial resources are supporting the securities), general conditions of the municipal bond market, the size of a particular offering, the maturity of the obligation and the rating(s) of the issue. In this regard, it should be emphasized that the ratings of any NRSRO are general and are not absolute standards of quality. Municipal securities with the same maturity, interest rate and rating(s) may have different yields, while municipal securities of the same maturity and interest rate with different rating(s) may have the same yield. An issuer's obligations under its municipal securities are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any, which may be enacted by Congress or state legislatures extending the time for B-3 payment of principal or interest, or both, or imposing other constraints upon the enforcement of such obligations or upon the ability of municipalities to levy taxes. The power or ability of an issuer to meet its obligations for the payment of interest on and principal of its municipal securities may be materially adversely affected by litigation or other conditions. MUNICIPAL NOTE RATINGS: Moody's highest rating for state and municipal and other short-term notes is MIG-1 and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of the best quality. They have strong protection from established cash flows of funds for their servicing or from established and broad-based access to the market for refinancing or both. Short-term municipal securities rated MIG-2 and VMIG-2 are of high quality. Margins of protection are ample although not so large as in the preceding group. An S&P note rating reflects the liquidity concerns and market access risks unique to notes. Notes due in 3 years or less will likely receive a long-term debt rating. The following criteria will be used in making that assessment. - Amortization schedule (the larger the final maturity relative to other maturities the more likely it will be treated as a note). - Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note). Note rate symbols are as follows: SP-1. Very strong or strong capacity to pay principal and interest. Those issues determined to possess overwhelming safety characteristics will be given a plus (+) designation. SP-2. Satisfactory capacity to pay principal and interest. SUPRANATIONAL AGENCY OBLIGATIONS The Institutional Cash Management Money Market Fund may purchase obligations of supranational agencies. Currently the Fund intends to invest only in obligations issued or guaranteed by the Asian Development Bank, Inter-American Development Bank, International Bank for Reconstruction and Development (World Bank), African Development Bank, European Coal and Steel Community, European Economic Community, European Investment Bank and the Nordic Investment Bank. OTHER INVESTMENTS The Trust is not prohibited from investing in obligations of banks which are clients of SEI Investments Company ("SEI Investments"), the parent company of the Administrator and the Distributor. The purchase of shares of the Trust by such banks or by their customers will not be a consideration in B-4 determining which bank obligations the Trust will purchase. However, the Trust will not purchase obligations issued by the Advisor. REPURCHASE AGREEMENTS Each Fund may enter into repurchase agreements. Repurchase agreements are agreements by which a person (E.G., a Fund) obtains a security and simultaneously commits to return the security to the seller (a primary securities dealer as recognized by the Federal Reserve Bank of New York or a national member bank as defined in Section 3(d)(1) of the Federal Deposit Insurance Act, as amended) at an agreed-upon price (including principal and interest) on an agreed-upon date within a number of days (usually not more than seven) from the date of purchase. The resale price reflects the purchase price plus an agreed upon market rate of interest which is unrelated to the coupon rate or maturity of the underlying security. A repurchase agreement involves the obligation of the seller to pay the agreed upon price, which obligation is, in effect, secured by the value of the underlying security. Repurchase agreements are considered to be loans by a Fund for purposes of its investment limitations. The repurchase agreements entered into by a Fund will provide that the underlying security at all times shall have a value at least equal to 102% of the resale price stated in the agreement (the Advisor monitors compliance with this requirement). Under all repurchase agreements entered into by a Fund, the Custodian or its agent must take possession of the underlying collateral. However, if the seller defaults, a Fund could realize a loss on the sale of the underlying security to the extent that the proceeds of the sale including accrued interest are less than the resale price provided in the agreement including interest. In addition, even though the Bankruptcy Code provides protection for most repurchase agreements, if the seller should be involved in bankruptcy or insolvency proceedings, a Fund may incur delay and costs in selling the underlying security or may suffer a loss of principal and interest if a Fund is treated as an unsecured creditor and required to return the underlying security to the seller's estate. RESTRICTED SECURITIES Restricted securities are securities that may not be sold to the public without registration under the Securities Act of 1933 (the "1933 Act") absent an exemption from registration. PERMITTED INVESTMENTS FOR THE FUNDS INCLUDE RESTRICTED SECURITIES, AND EACH FUND MAY INVEST UP TO 10% OF ITS NET ASSETS IN illiquid securities, subject to each Fund's investment limitations on the purchase of illiquid securities. Restricted securities, including securities eligible for re-sale under 1933 Act Rule 144A, that are determined to be liquid are not subject to this limitation. This determination is to be made by the Fund's Advisor pursuant to guidelines adopted by the Board of Trustees. Under these guidelines, the Advisor will consider the frequency of trades and quotes for the security, the number of dealers in, and potential purchasers for, the securities, dealer undertakings to make a market in the security, and the nature of the security and of the marketplace trades. In purchasing such Restricted Securities, the Advisor intends to purchase securities that are exempt from registration under Rule 144A under the 1933 Act. B-5 SECURITIES LENDING The Funds may lend securities pursuant to agreements which require that the loans be continuously secured by collateral at all times equal to 100% of the market value of the loaned securities which consists of cash, securities of the U.S. Government or its agencies, or any combination of cash and such securities. Such loans will not be made if, as a result, the aggregate amount of all outstanding securities loans for a Fund exceed one-third of the value of the Fund's total assets taken at fair market value. A Fund will continue to receive interest on the securities lent while simultaneously earning interest on the investment of the cash collateral in U.S. Government securities. However, a Fund will normally pay lending fees to such broker-dealers and related expenses from the interest earned on invested collateral. There may be risks of delay in receiving additional collateral or risks of delay in recovery of the securities or even loss of rights in the collateral should the borrower of the securities fail financially. However, loans are made only to borrowers deemed by the Advisor to be of good standing and when, in the judgment of the Advisor, the consideration which can be earned currently from such securities loans justifies the attendant risk. Any loan may be terminated by either party upon reasonable notice to the other party. The Funds may use the Distributor or a broker-dealer affiliate of the Advisor as a broker in these transactions. STANDBY COMMITMENTS AND PUTS The Institutional Cash Management Money Market Fund may purchase securities at a price which would result in a yield-to-maturity lower than that generally offered by the seller at the time of purchase when it can simultaneously acquire the right to sell the securities back to the seller, the issuer, or a third party (the "writer") at an agreed-upon price at any time during a stated period or on a certain date. Such a right is generally denoted as a "standby commitment" or a "put." The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity to permit the Fund to meet redemptions and remain as fully invested as possible in municipal securities. The Fund reserves the right to engage in put transactions. The right to put the securities depends on the writer's ability to pay for the securities at the time the put is exercised. The Institutional Cash Management Money Market Fund would limit its put transactions to institutions which the Advisor believes present minimal credit risks, and the Advisor would use its best efforts to initially determine and continue to monitor the financial strength of the sellers of the options by evaluating their financial statements and such other information as is available in the marketplace. It may, however be difficult to monitor the financial strength of the writers because adequate current financial information may not be available. In the event that any writer is unable to honor a put for financial reasons, the Fund would be a general creditor (I.E., on a parity with all other unsecured creditors) of the writer. Furthermore, particular provisions of the contract between the Fund and the writer may excuse the writer from repurchasing the securities; for example, a change in the published rating of the underlying securities or any similar event that has an adverse effect on the issuer's credit or a provision in the contract that the put will not be exercised except in certain special cases, for example, to maintain portfolio liquidity. The Fund could, however, at any time sell the underlying portfolio security in the open market or wait until the portfolio security matures, at which time it should realize the full par value of the security. B-6 The securities purchased subject to a put may be sold to third persons at any time, even though the put is outstanding, but the put itself, unless it is an integral part of the security as originally issued, may not be marketable or otherwise assignable. Therefore, the put would have value only to the Fund. Sale of the securities to third parties or lapse of time with the put unexercised may terminate the right to put the securities. Prior to the expiration of any put option, the Fund could seek to negotiate terms for the extension of such an option. If such a renewal cannot be negotiated on terms satisfactory to the Fund, the Fund could, of course, sell the portfolio security. The maturity of the underlying security will generally be different from that of the put. There will be no limit to the percentage of portfolio securities that the Fund may purchase subject to a standby commitment or put, but the amount paid directly or indirectly for all standby commitments or puts which are not integral parts of the security as originally issued held in the Fund will not exceed 1/2 of 1% of the value of its total assets of such Fund calculated immediately after any such put is acquired. STRIPS Each Fund may invest in Separately Traded Interest and Principal Securities ("STRIPS"), which are component parts of U.S. Treasury Securities traded through the Federal Book-Entry System. The Advisor will only purchase STRIPS that it determines are liquid or, if illiquid, do not violate each Fund's investment policy concerning investments in illiquid securities. Consistent with Rule 2a-7 under the Investment Company Act of 1940, as amended, (the "1940 Act"), the Advisor will only purchase STRIPS for the Funds that have a remaining maturity of 397 days or less; therefore, the Funds currently may only purchase interest component parts of U.S. Treasury Securities. While there is no limitation on the percentage of a Fund's assets that may be comprised of STRIPS, the Advisor will monitor the level of such holdings to avoid the risk of impairing Shareholders' redemption rights and of deviations in the value of shares of the Funds. U.S. GOVERNMENT AGENCY SECURITIES Certain investments of the Institutional Cash Management Money Market Fund may include U.S. Government Agency Securities. Agencies of the United States Government which issue obligations consist of, among others, the Export Import Bank of the United States, Farmers Home Administration, Federal Farm Credit Bank, Federal Housing Administration, Government National Mortgage Association ("GNMA"), Maritime Administration, Small Business Administration, and The Tennessee Valley Authority. Obligations of instrumentalities of the United States Government include securities issued by, among others, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land Banks, Fannie Mae, and the United States Postal Service as well as government trust certificates. Some of these securities are supported by the full faith and credit of the United States Treasury (E.G., GNMA securities), others are supported by the right of the issuer to borrow from the Treasury and still others are supported only by the credit of the instrumentality (E.G., Fannie Mae securities). Guarantees of principal by agencies or instrumentalities of the U.S. Government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing the value of the obligation prior to maturity. B-7 VARIABLE RATE MASTER DEMAND NOTES The Institutional Cash Management Money Market Fund may invest in variable rate master demand notes which may or may not be backed by bank letters of credit. These notes permit the investment of fluctuating amounts at varying market rates of interest pursuant to direct arrangements between the Fund, as lender, and the borrower. Such notes provide that the interest rate on the amount outstanding varies on a daily, weekly or monthly basis depending upon a stated short-term interest rate index. Both the lender and the borrower have the right to reduce the amount of outstanding indebtedness at any time. There is no secondary market for the notes and it is not generally contemplated that such instruments will be traded. The quality of the note or the underlying credit must, in the opinion of the Advisor, be equivalent to the ratings applicable to permitted investments for the Fund. The Advisor will monitor on an ongoing basis the earning power, cash flow and liquidity ratios of the issuers of such instruments and will similarly monitor the ability of an issuer of a demand instrument to pay principal and interest on demand. INVESTMENT LIMITATIONS The following are fundamental policies of each Fund and cannot be changed with respect to a Fund without the consent of the holders of a majority of a Fund's outstanding shares. The term "a majority of the outstanding shares" of a Fund means the vote of the lesser of (i) 67% or more of the shares of such Fund present at a meeting, if the holders of more than 50% of the outstanding shares of such Fund are present or represented by proxy or (ii) more than 50% of the outstanding shares of such Fund. A Fund may not: 1. Acquire more than 10% of the voting securities of any one issuer. 2. Invest in companies for the purpose of exercising control. 3. Borrow money except for temporary or emergency purposes and then only in an amount not exceeding one-third of the value of total assets. Any borrowing will be done from a bank and, to the extent that such borrowing exceeds 5% of the value of the Fund's assets, asset coverage of at least 300% is required. In the event that such asset coverage shall at any time fall below 300%, the Fund shall, within three days thereafter or such longer period as the Securities and Exchange Commission may prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the asset coverage of such borrowings shall be at least 300%. This borrowing provision is included solely to facilitate the orderly sale of portfolio securities to accommodate heavy redemption requests if they should occur and is not for investment purposes. All borrowings in excess of 5% of the value of a Fund's total assets will be repaid before making additional investments and any interest paid on such borrowings will reduce income. B-8 4. Make loans, except that (a) a Fund may purchase or hold debt instruments in accordance with its investment objective and policies; (b) a Fund may enter into repurchase agreements, and (c) a Fund may engage in securities lending as described in the Prospectus and in this Statement of Additional Information. 5. Pledge, mortgage or hypothecate assets except to secure temporary borrowings permitted by (3) above in aggregate amounts not to exceed 10% of the Fund's total assets, taken at current value at the time of the incurrence of such loan, except as permitted with respect to securities lending. 6. Purchase or sell real estate, real estate limited partnership interests, commodities or commodities contracts and interests in a pool of securities that are secured by interests in real estate. However, subject to their permitted investment spectrum, any Fund may invest in companies which invest in real estate commodities or commodities contracts. 7. Make short sales of securities, maintain a short position or purchase securities on margin, except that the Trust may obtain short-term credits as necessary for the clearance of security transactions. 8. Act as an underwriter of securities of other issuers except as it may be deemed an underwriter in selling a security. 9. Purchase securities of other investment companies except for money market funds and CMOs and REMICs deemed to be investment companies and then only as permitted by the 1940 Act and the rules and regulations thereunder. Under these rules and regulations, a Fund is prohibited from acquiring the securities of other investment companies if, as a result of such acquisition, the Fund owns more than 3% of the total voting stock of the company; securities issued by any one investment company represent more than 5% of the total assets of a Fund; or securities (other than treasury stock) issued by all investment companies represent more than 10% of the total assets of the Fund. 10. Issue senior securities (as defined in the 1940 Act) except in connection with permitted borrowings as described above or as permitted by rule, regulation or order of the SEC. NON-FUNDAMENTAL POLICIES No Fund may purchase or hold illiquid securities, I.E., securities that cannot be disposed of for their approximate carrying value in seven days or less (which term includes repurchase agreements and time deposits maturing in more than seven days) if, in the aggregate, more than 10% of its net assets would be invested in illiquid securities. The foregoing percentages, except with respect to holding illiquid securities, will apply at the time of the purchase of a security and shall not be considered violated unless an excess occurs or exists immediately after and as a result of a purchase of such security. B-9 INVESTMENT ADVISOR The Trust and Trusco Capital Management, Inc. (the "Advisor") have entered into an advisory agreement (the "Advisory Agreement"). The Advisory Agreement provides that the Advisor shall not be protected against any liability to the Trust or its Shareholders by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder. The Advisory Agreement provides that if, for any fiscal year, the ratio of expenses of a Fund (including amounts payable to the Advisor but excluding interest, taxes, brokerage, litigation, and other extraordinary expenses) exceeds limitations established by certain states, the Advisor and/or the Administrator will bear the amount of such excess. The Advisor will not be required to bear expenses of the Trust to an extent which would result in a Fund's inability to qualify as a regulated investment company under provisions of the Internal Revenue Code. The continuance of the Advisory Agreement, after the first two years, must be specifically approved at least annually (i) by the vote of the Trustees, and (ii) by the vote of a majority of the Trustees who are not parties to each Agreement or "interested persons" of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Trustees of the Trust or, with respect to the Funds, by a majority of the outstanding shares of the Funds, on not less than 30 days' nor more than 60 days' written notice to the Advisor, or by the Advisor on 90 days' written notice to the Trust. For the fiscal year ended May 31, 1997, the Funds paid the following advisory fees: Fees Paid Fees Waived Fund 1997 1997 - ---- --------- ----------- Classic Institutional Cash Management Money $0 $100,270 Market Fund Classic Institutional U.S. Treasury Securities $0 $ 18,255 Money Market Fund THE ADMINISTRATOR The Trust and SEI Fund Resources (the "Administrator"), are parties to an Administration Agreement (the "Administration Agreement") dated May 29, 1992. The Administration Agreement provides that the Administrator shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to which the Administration Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Administrator in the performance of its duties or from reckless disregard by it of its duties and obligations thereunder. B-10 The Administrator, a Delaware business trust, has its principal business offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the owner of all beneficial interest in the Administrator. SEI and its subsidiaries and affiliates, including the Administrator, are leading providers of funds evaluation services, trust accounting systems, and brokerage and information services to financial institutions, institutional investors and money managers. The Administrator and its affiliates also serve as administrator to the following other mutual funds: The Achievement Funds Trust; The Advisors' Inner Circle Fund; The Arbor Fund; ARK Funds; Bishop Street Funds; CoreFunds, Inc.; CrestFunds, Inc.; CUFUND; FMB Funds, Inc.; First American Funds, Inc.; First American Investment Funds, Inc.; Inventor Funds, Inc; Marquis Funds-Registered Trademark-; Monitor Funds; Morgan Grenfell Investment Trust; The PBHG Funds, Inc.; The PBHG Insurance Series Fund, Inc.; The Pillar Funds; Rembrandt Funds-Registered Trademark-; 1784 Funds-Registered Trademark-; SEI Asset Allocation Trust; SEI Daily Income Trust; SEI Index Funds; SEI Institutional Investments Trust; SEI Institutional Managed Trust; SEI International Trust; SEI Liquid Asset Trust; SEI Tax Exempt Trust; Stepstone Funds; and Turner Funds. For the fiscal year ended May 31, 1997, the Funds paid the following administration fees: Fees Paid Fees Waived Fund 1997 1997 - ---- --------- ----------- Classic Institutional Cash Management Money $32,389 $0 Market Fund Classic Institutional U.S. Treasury Securities $ 6,047 $0 Money Market Fund THE DISTRIBUTOR SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary of SEI Investments, and the Trust have entered into a distribution agreement (the "Distribution Agreement") dated May 29, 1992. The Distributor will receive no compensation for distribution of Shares. The Distribution Agreement is renewable annually and may be terminated by the Distributor, the Qualified Trustees (as defined in the Distribution Agreement), or by a majority vote of the outstanding securities of the Trust upon not more than 60 days' written notice by either party. TRUSTEES AND OFFICERS OF THE TRUST The management and affairs of the Trust are supervised by the Trustees under the laws governing business trusts in the Commonwealth of Massachusetts. The Trustees and executive officers of the Trust, their respective dates of birth and principal occupations for the last five years are set forth below. The principal business address for each officer listed below is Oaks, Pennsylvania 19456. B-11 DANIEL S. GOODRUM (7/11/26) - Trustee - Chairman & CEO, SunBank/South Florida, N.A., 1985-1991; Chairman Audit Committee and Director, Holy Cross Hospital; Executive Committee Member and Director, Honda Classic Foundation; Director, Broward Community College Foundation. WILTON LOONEY (4/18/19) - Trustee - President of Genuine Parts Company, 1961-1964; Chairman of the Board, 1964-1990; Honorary Chairman of the Board, 1990 to present. Director, Rollins, Inc.; Director, RPC Energy Services, Inc. CHAMPNEY A. MCNAIR (10/30/24) - Trustee - Director and Chairman of Investment Committee and member of Executive Committee, Cotton States Life and Health Insurance Company; Director and Chairman of Investment Committee and member of Executive Committee, Cotton States Mutual Insurance Company; Chairman, Trust Company of Georgia Advisory Council. F. WENDELL GOOCH (12/3/32) - Trustee - Retired. President, Orange County Publishing Co., Inc., 1981 - 1997, Publisher of the Paoli News and the Paoli Republican and Editor of the Paoli Republican, 1981 - 1997, President, H & W Distribution, Inc., 1984 - 1997. Current Trustee on the Board of Trustees for the SEI Family of Funds and The Capitol Mutual Funds. Executive Vice President, Trust Department, Harris Trust and Savings Bank and Chairman of the Board of Directors of The Harris Trust Company of Arizona before January 1981. T. GORDY GERMANY (11/28/25) -Trustee - Retired President, Chairman, and CEO of Crawford & Company; held these positions, 1973-1987. Member of the Board of Directors, 1970-1990, joined company in 1948; spent entire career at Crawford, currently serves on Boards of Norrell Corporation and Mercy Health Services, the latter being the holding company of St. Joseph's Hospitals. DR. BERNARD F. SLIGER (9/30/24) - Trustee - Currently on sabbatical leave from Florida State University (1991-92); now serves as visiting professor at the University of New Orleans. President of Florida State University, 1976-91; previous four years EVP and Chief Academic Officer. During educational career, taught at Florida State, Michigan State, Louisiana State and Southern University. Spent 19 years as faculty member and administrator at Louisiana State University and served as Head of Economics Department, member and Chairman of the Graduate Council, Dean of Academic Affairs and Vice Chancellor. Member of Board of Directors of Federal Reserve Bank of Atlanta, 1983-1988. JESSE HALL (9/26/29) - Trustee* - Executive Vice President, SunTrust Banks, Inc., 1985-1994; Director of Crawford & Company since 1979; Member, Atlanta Estate Planning Council, 1988-1993. DAVID G. LEE (4/16/52) - President, Chief Executive Officer - Senior Vice President of the Administrator and Distributor since 1993. Vice President of the Administrator and Distributor (1991-1993). President, GW Sierra Trust Funds before 1991. CAROL ROONEY (5/8/64) - Controller, Chief Financial Officer - A Director of SEI Fund Resources since 1992. B-12 RICHARD W. GRANT (10/25/45) - Secretary - 2000 One Logan Square, Philadelphia, Pennsylvania 19103. Partner, Morgan, Lewis & Bockius LLP (law firm). Counsel to the Trust, Administrator and Distributor. SANDRA K. ORLOW (10/18/53) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of the Administrator and Distributor since 1983. KEVIN P. ROBINS (4/15/61) - Vice President, Assistant Secretary - Senior Vice President & General Counsel of SEI Investments, the Administrator and the Distributor since 1994. Vice President of SEI, the Administrator and the Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm) prior to 1992. KATHRYN L. STANTON (11/19/58) - Vice President, Assistant Secretary - Vice President, Assistant Secretary of SEI Investments, the Administrator and Distributor since 1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-1994. TODD CIPPERMAN (2/14/66) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of the Administrator and the Distributor since 1995. Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston & Strawn (law firm), 1991-1994. BARBARA NUGENT (6/18/56) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of SEI Investments, the Distributor and Administrator, Associate, Drinker Biddle & Reath (law firm), 1994-1996. Assistant Vice President/Administration, Delaware Service Company, Inc., 1981-1994. MARC H. CAHN (6/19/57) - Vice President, Assistant Secretary - Vice President and Assistant Secretary of SEI Investments, the Distributor and Administrator, Associate General Counsel, Barclays Bank PLC., 1995-1996. Counsel for First Fidelity Bancorporation prior to 1995. JOHN H. GRADY, JR. (6/1/61) - Assistant Secretary - 1800 M Street, N.W., Washington, DC 20036. Partner, Morgan, Lewis & Bockius LLP (law firm) since 1995. Associate, Morgan, Lewis & Bockius LLP, 1993-1995. Associate, Ropes & Gray (law firm), 1988-1993. - ---------------- * Jesse S. Hall may be deemed to be an "interested person" of the Trust as defined in the Investment Company Act of 1940. The Trustees and officers of the Trust own, in the aggregate, less than 1% of the outstanding shares of the Trust. For the fiscal year end May 31, 1997, the Trust paid the following amounts to Trustees and Officers of the Trust: B-13
- --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- Aggregate Pension or Total Compensation from Compensation Retirement Registrant and Fund From Registrant Benefits Accrued Estimated Annual Complex Paid to Name of Person, for Fiscal Year as Part of Fund Benefits Upon Directors for Fiscal Year Position Ended 1997 Expenses Retirement Ended 1997 - --------------------------------------------------------------------------------------------------------- Daniel S. Goodrum, $15,625 N/A N/A $15,625 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- Wilton Looney, $16,750 N/A N/A $16,750 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- Champney A. McNair, $15,625 N/A N/A $15,625 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- F. Wendell Gooch, $15,625 N/A N/A $15,625 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- T. Gordy Germany, $15,625 N/A N/A $15,625 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- Dr. Bernard F. Sliger, $15,625 N/A N/A $15,625 for service on Trustee two boards - --------------------------------------------------------------------------------------------------------- Jesse S. Hall, Trustee $15,625 N/A N/A $15,625 for service on two boards - --------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------
PERFORMANCE INFORMATION From time to time a Fund may advertise its performance. Performance figures are based on historical earnings and are not intended to indicate future performance. PERFORMANCE COMPARISONS Each Fund may periodically compare its performance to other mutual funds tracked by mutual fund rating services, to broad groups of comparable mutual funds, or to unmanaged indices. These comparisons may assume reinvestment of dividends but generally do not reflect deductions for administrative and management costs. COMPUTATION OF YIELD The current yield of the Funds will be calculated daily based upon the seven days ending on the date of calculation ("base period"). The yield is computed by determining the net change (exclusive of capital changes) in the value of a hypothetical pre-existing shareholder account having a balance of one share at the beginning of the period, subtracting a hypothetical charge reflecting deductions from shareholder accounts, and dividing such net change by the value of the account at the beginning of the same period to obtain the base period return and multiplying the result by (365/7). Realized and unrealized gains and losses are not included in the calculation of the yield. The effective compound B-14 yield of the Funds is determined by computing the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one share at the beginning of the period, subtracting a hypothetical charge reflecting deductions from shareholder accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and then compounding the base period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: Effective Yield = [Base Period Return + 1) 365/7] - 1. The current and the effective yields reflect the reinvestment of net income earned daily on portfolio assets. - ------------------------------------------------------------------------------- Fund 7-Day Yield 7-Day Effective Yield - ------------------------------------------------------------------------------- Classic Institutional Cash 5.59% 5.73% Management Money Market Fund - ------------------------------------------------------------------------------- Classic Institutional U.S. 5.36% 5.49% Treasury Securities Fund - ------------------------------------------------------------------------------- The yield of these Funds fluctuates, and the annualization of a week's dividend is not a representation by the Trust as to what an investment in the Fund will actually yield in the future. Actual yields will depend on such variables as asset quality, average asset maturity, the type of instruments the Fund invests in, changes in interest rates on money market instruments, changes in the expenses of the Fund and other factors. Yields are one basis upon which investors may compare the Funds with other money market funds; however, yields of other money market funds and other investment vehicles may not be comparable because of the factors set forth above and differences in the methods used in valuing portfolio instruments. CALCULATION OF TOTAL RETURN From time to time, the Trust may include the names of clients of the Advisor in advertisements and/or sales literature for the Trust. The SEI Funds Evaluation database tracks the total return of numerous tax-exempt pension accounts. The range of returns in these accounts determines the percentile rankings. SunTrust Bank's investment advisory affiliate, Trusco Capital Management, has been in the top 1% of the SEI Funds Evaluation database for equity managers over the past ten years. SEI Investment's database includes research data on over 1,000 investment managers responsible for over $450 billion in assets. Based on the foregoing, the average annual total returns for the Funds from inception through May 31, 1997 were as follows: B-15
- ----------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- FUND AVERAGE ANNUAL TOTAL RETURN --------------------------- SINCE INCEPTION - ----------------------------------------------------------------------------------- Classic Institutional Cash Management Money Market 5.47% Fund* - ----------------------------------------------------------------------------------- Classic Institutional U.S. Treasury Securities Money 5.36% Market Fund* - ----------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------
* Commenced operations December 12, 1996 ADVERTISING From time to time, the Trust may include the names of clients of the Advisor in advertisements and/or sales literature for the Trust. PURCHASE AND REDEMPTION OF SHARES Purchases and redemptions of shares of the Funds may be made on any day the New York Stock Exchange ("NYSE") is open for business. Currently, the NYSE is closed on the days following holidays are observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is currently the Trust's policy to pay for all redemptions in cash. The Trust retains the right, however, to alter this policy to provide for redemptions in whole or in part by a distribution in-kind of readily marketable securities held by the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale of any such securities so received in payment of redemptions. A Shareholder will at all times be entitled to aggregate cash redemptions from all Funds of the Trust during any 90-day period of up to the lesser of $250,000 or 1% of the Trust's net assets. The Trust reserves the right to suspend the right of redemption and/or to postpone the date of payment upon redemption for any period on which trading on the NYSE is restricted, or during the existence of an emergency (as determined by the Securities and Exchange Commission by rule or regulation) as a result of disposal or valuation of a Fund's securities is not reasonably practicable, or for such other periods as the Securities and Exchange Commission has by order permitted. The Trust also reserves the right to suspend sales of shares of a Fund for any period during which the NYSE, an Advisor, the Administrator and/or the Custodian are not open for business. Investors will receive written notification at least thirty days prior to any change in a Fund's investment objective. Certain state securities laws may require those financial institutions providing certain distribution services to the Trust to register as dealers pursuant to state law. B-16 DETERMINATION OF NET ASSET VALUE The net asset value per share of the Funds is calculated daily by the Administrator by adding the value of securities and other assets, subtracting liabilities and dividing by the number of outstanding shares. Securities will be valued by the amortized cost method which involves valuing a security at its cost on the date of purchase and thereafter (absent unusual circumstances) assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuations in general market rates of interest on the value of the instrument. While this method provides certainty in valuation, it may result in periods during which a security's value, as determined by this method, is higher or lower than the price a Fund would receive if it sold the instrument. During periods of declining interest rates, the daily yield of a Fund may tend to be higher than a like computation made by a company with identical investments utilizing a method of valuation based upon market prices and estimates of market prices for all of its portfolio securities. Thus, if the use of amortized cost by a Fund resulted in a lower aggregate portfolio value on a particular day, a prospective investor in a Fund would be able to obtain a somewhat higher yield than would result from investment in a company utilizing solely market values, and existing investors in a Fund would experience a lower yield. The converse would apply in a period of rising interest rates. A Fund's use of amortized cost and the maintenance of a Fund's net asset value at $1.00 are permitted by regulations promulgated by Rule 2a-7 under the 1940 Act, provided that certain conditions are met. The regulations also require the Trustees to establish procedures which are reasonably designed to stabilize the net asset value per share at $1.00 for the Funds. Such procedures include the determination of the extent of deviation, if any, of the Funds current net asset value per share calculated using available market quotations from the Funds amortized cost price per share at such intervals as the Trustees deem appropriate and reasonable in light of market conditions and periodic reviews of the amount of the deviation and the methods used to calculate such deviation. In the event that such deviation exceeds 1/2 of 1%, the Trustees are required to consider promptly what action, if any, should be initiated, and, if the Trustees believe that the extent of any deviation may result in material dilution or other unfair results to Shareholders, the Trustees are required to take such corrective action as they deem appropriate to eliminate or reduce such dilution or unfair results to the extent reasonably practicable. Such actions may include the sale of portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; or establishing a net asset value per share by using available market quotations. In addition, if the Funds incur a significant loss or liability, the Trustees have the authority to reduce pro rata the number of shares of the Funds in each Shareholder's account and to offset each Shareholder's pro rata portion of such loss or liability from the Shareholder's accrued but unpaid dividends or from future dividends while each other Fund must annually distribute at least 90% of its investment company taxable income. TAXES The following is a summary of certain Federal income tax considerations generally affecting the Funds and their shareholders that are not described in the Funds' prospectus. No attempt is made to B-17 present a detailed explanation of the Federal tax treatment of the Funds or their Shareholders, and the discussion here and in the Funds' prospectus is not intended as a substitute for careful tax planning. This discussion of Federal income tax consequences is based on the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations issued thereunder, in effect on the date of this Statement of Additional Information. New legislation, as well as administrative changes or court decisions, may change the conclusions expressed herein, and may have a retroactive effect with respect to the transactions contemplated herein. FEDERAL INCOME TAX In order to qualify for treatment as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended ("Code"), each Fund must distribute annually to its Shareholders at least the sum of 90% of its net interest income excludable from gross income plus 90% of its investment company taxable income (generally, net investment income plus net short-term capital gain) ("Distribution Requirement") and also must meet several additional requirements. Among these requirements are the following: (i) at least 90% of a Fund's gross income each taxable year must be derived from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stock or securities, or certain other income; (ii) a Fund must derive less than 30% of its gross income each taxable year from the sale or other disposition of stocks or securities held for less than three months; (iii) at the close of each quarter of a Fund's taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, U.S. Government securities, securities of other RIC's and other securities, with such other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of the value of a Fund's assets and that does not represent more than 10% of the outstanding voting securities of such issuer; and (iv) at the close of each quarter of a Fund's taxable year, not more than 25% of the value of its assets may be invested in securities (other than U.S. Government securities or the securities of other RIC's) of any one issuer, or of two or more issuers engaged in same or similar businesses if the Fund owns at least 20% of the voting power of such issuers. Requirement (ii) no longer applies for tax years beginning after August 5, 1997. Notwithstanding the Distribution Requirement described above, which only requires a Fund to distribute at least 90% of its annual investment company taxable income and does not require any minimum distribution of net capital gains (the excess of net long-term capital gains over net short-term capital loss), a Fund will be subject to a nondeductible 4% excise tax to the extent it fails to distribute by the end of any calendar year 98% of its ordinary income for that year and 98% of its capital gain net income for the one-year period ending on October 31 of that calendar year, plus certain other amounts. Each Fund intends to make sufficient distributions prior to the end of each calendar year to avoid liability for the federal excise tax applicable to regulated investment companies. B-18 If, at the close of each quarter of its taxable year, at least 50% of the value of a Fund's total assets consists of obligations the interest on which is excludable from gross income, a Fund may pay "exempt-interest dividends," as defined in Section 852(b)(5) of the Code, to its Shareholders. Any gain or loss recognized on a sale or redemption of Shares of a Fund by a Shareholder who is not a dealer in securities will generally be treated as a long-term capital gain or loss if the shares have been held for more than eighteen months, mid-term if the shares have been held for over one year but not for over eighteen months, and short-term if for a year or less. If shares held for six months or less are sold or redeemed for a loss, two special rules apply: First, if shares on which a net capital gain distribution has been received are subsequently sold or redeemed, and such shares have been held for six months or less, any loss recognized will be treated as long-term capital loss to the extent of the long-term capital gain distributions. Second, any loss recognized by a Shareholder upon the sale or redemption of shares of a tax-exempt fund held for six months or less will be disallowed to the extent of any exempt-interest dividends received by the Shareholder with respect to such shares. The Funds will make annual reports to Shareholders of the Federal income tax status of all distributions. FUND TRANSACTIONS The Trust has no obligation to deal with any dealer or group of dealers in the execution of transactions in portfolio securities. Subject to policies established by the Trustees, the Advisor is responsible for placing the orders to execute transactions for a Fund. In placing orders, it is the policy of the Trust to seek to obtain the best net results taking into account such factors as price (including the applicable dealer spread), the size, type and difficulty of the transaction involved, the firm's general execution and operational facilities, and the firm's risk in positioning the securities involved. While the Advisor generally seeks reasonably competitive spreads or commissions, the Trust will not necessarily be paying the lowest spread or commission available. The money market securities in which the Funds invest are traded primarily in the over-the-counter market. Bonds and debentures are usually traded over-the-counter, but may be traded on an exchange. Where possible, the Advisor will deal directly with the dealers who make a market in the securities involved except in those circumstances where better prices and execution are available elsewhere. Such dealers usually are acting as principal for their own account. On occasion, securities may be purchased directly from the issuer. Money market securities are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes. The cost of executing portfolio securities transactions of the Trust will primarily consist of dealer spreads and underwriting commissions. TRADING PRACTICES AND BROKERAGE The Trust selects brokers or dealers to execute transactions for the purchase or sale of portfolio securities on the basis of its judgment of their professional capability to provide the service. The primary B-19 consideration is to have brokers or dealers provide transactions at best price and execution for the Trust. Best price and execution includes many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order and other factors affecting the overall benefit obtained by the account on the transaction. The Trust's determination of what are reasonably competitive rates is based upon the professional knowledge of its trading department as to rates paid and charged for similar transactions throughout the securities industry. In some instances, the Trust pays a minimal share transaction cost when the transaction presents no difficulty. Some trades are made on a net basis where the Trust either buys securities directly from the dealer or sells them to the dealer. In these instances, there is no direct commission charged but there is a spread (the difference between the buy and sell price) which is the equivalent of a commission. The Trust may allocate out of all commission business generated by all of the funds and accounts under management by an Advisor, brokerage business to brokers or dealers who provide brokerage and research services. These research services include advice, either directly or through publications or writings, as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; furnishing of analyses and reports concerning issuers, securities or industries; providing information on economic factors and trends, assisting in determining portfolio strategy, providing computer software used in security analyses, and providing portfolio performance evaluation and technical market analyses. Such services are used by an Advisor in connection with its investment decision-making process with respect to one or more funds and accounts managed by it, and may not be used exclusively with respect to the fund or account generating the brokerage. As provided in the Securities Exchange Act of 1934 (the "1934 Act") higher commissions may be paid to broker-dealers who provide brokerage and research services than to broker-dealers who do not provide such services if such higher commissions are deemed reasonable in relation to the value of the brokerage and research services provided. Although transactions are directed to broker-dealers who provide such brokerage and research services, the Trust believes that the commissions paid to such broker-dealers are not, in general, higher than commissions that would be paid to broker-dealers not providing such services and that such commissions are reasonable in relation to the value of the brokerage and research services provided. In addition, portfolio transactions which generate commissions or their equivalent are directed to broker-dealers who provide daily portfolio pricing services to the Trust. Subject to best price and execution, commissions used for pricing may or may not be generated by the funds receiving the pricing service. An Advisor may place a combined order for two or more accounts or funds engaged in the purchase or sale of the same security if, in its judgment, joint execution is in the best interest of each participant and will result in best price and execution. Transactions involving commingled orders are allocated in a manner deemed equitable to each account or fund. It is believed that the ability of the accounts to participate in volume transactions will generally be beneficial to the accounts and funds. Although it is recognized that, in some cases, the joint execution of orders could adversely affect the price or volume of the security that a particular account or Fund may obtain, it is the opinion of each Advisor and the B-20 Trust's Board of Trustees that the advantages of combined orders outweigh the possible disadvantages of separate transactions. Consistent with the Conduct Rules of the National Association of Securities Dealers, Inc., and subject to seeking best price and execution, the Funds, at the request of the Distributor, give consideration to sales of shares of the Trust as a factor in the selection of brokers and dealers to execute Trust portfolio transactions. It is expected that the Trust may execute brokerage or other agency transactions through the Distributor or an affiliate of an Advisor, both of which are registered broker-dealers, for a commission in conformity with the 1940 Act, the 1934 Act and rules promulgated by the SEC. Under these provisions, the Distributor or an affiliate of an Advisor is permitted to receive and retain compensation for effecting portfolio transactions for the Trust on an exchange if a written contract is in effect between the Distributor and the Trust expressly permitting the Distributor or an affiliate of an Advisor to receive and retain such compensation. These rules further require that commissions paid to the Distributor by the Trust for exchange transactions not exceed "usual and customary" brokerage commissions. The rules define "usual and customary" commissions to include amounts which are "reasonable and fair compared to the commission, fee or other renumeration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time." In addition, the Trust may direct commission business to one or more designated broker-dealers in connection with such broker/dealer's provision of services to the Trust or payment of certain Trust expenses (e.g., custody, pricing and professional fees). The Trustees, including those who are not "interested persons" of the Trust, have adopted procedures for evaluating the reasonableness of commissions paid to the Distributor, and will review these procedures periodically. For the fiscal year ended May 31, 1997, the Funds paid the following brokerage commissions with respect to portfolio transactions:
- -------------------------------------------------------------------------------------------------------------------------------- Portfolio Total $ Total $ Total $ Total $ % of Total % of Total Total Amount of Amount of Amount of Amount of Brokerage Brokered Brokerage Brokered Brokered Brokerage Brokerage Commissions Transactions Commissions Transactions Transactions Commissions Commissions Paid to Effected Paid to SFS in for FYE Through Paid in FYE Paid to Affiliated Through Connection 5/31/97 Affiliates for 5/31/97 Affiliates in Brokers in Affiliated with FYE 5/31/97 FYE 5/31/97 FYE 5/31/97 Brokers in Repurchase FYE 5/31/97 Agreement Transactions for FYE 5/31/97 - -------------------------------------------------------------------------------------------------------------------------------- Classic Institutional $3,981,691,204 $1,109,513,576 $ 13,324 $ 13,324 100% 28% $13,324 Cash Management Money Market Fund - --------------------------------------------------------------------------------------------------------------------------------
B-21
- -------------------------------------------------------------------------------------------------------------------------------- Portfolio Total $ Total $ Total $ Total $ % of Total % of Total Total Amount of Amount of Amount of Amount of Brokerage Brokered Brokerage Brokered Brokered Brokerage Brokerage Commissions Transactions Commissions Transactions Transactions Commissions Commissions Paid to Effected Paid to SFS in for FYE Through Paid in FYE Paid to Affiliated Through Connection 5/31/97 Affiliates for 5/31/97 Affiliates in Brokers in Affiliated with FYE 5/31/97 FYE 5/31/97 FYE 5/31/97 Brokers in Repurchase FYE 5/31/97 Agreement Transactions for FYE 5/31/97 - -------------------------------------------------------------------------------------------------------------------------------- Classic Institutional $ 701,083,896 $ 339,610,033 $ 4,235 $ 4,235 100% 48% $ 4,235 U.S. Treasury Securities Money Market Fund - --------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES The Declaration of Trust authorizes the issuance of an unlimited number of shares and classes of shares of the Funds each of which represents an equal proportionate interest in that Fund with each other share. Shares are entitled upon liquidation to a PRO RATA share in the net assets of the Funds. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees of the Trust may create additional series of shares or classes of series. All consideration received by the Trust for shares of any additional series and all assets in which such consideration is invested would belong to that series and would be subject to the liabilities related thereto. Share certificates representing shares will not be issued. SHAREHOLDER LIABILITY The Trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust could, under certain circumstances, be held personally liable as partners for the obligations of the trust. Even if, however, the Trust were held to be a partnership, the possibility of the Shareholders' incurring financial loss for that reason appears remote because the Trust's Declaration of Trust contains an express disclaimer of Shareholder liability for obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by or on behalf of the Trust or the Trustees, and because the Declaration of Trust provides for indemnification out of the Trust property for any Shareholder held personally liable for the obligations of the Trust. LIMITATION OF TRUSTEES' LIABILITY The Declaration of Trust provides that a Trustee shall be liable only for his own willful defaults and, if reasonable care has been exercised in the selection of officers, agents, employees or investment advisors, shall not be liable for any neglect or wrongdoing of any such person. The Declaration of Trust also provides that the Trust will indemnify its Trustees and officers against liabilities and expenses incurred in B-22 connection with actual or threatened litigation in which they may be involved because of their offices with the Trust unless it is determined in the manner provided in the Declaration of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the Trust. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his willful misfeasance, bad faith, gross negligence or reckless disregard of his duties. 5% AND 25% SHAREHOLDERS As of September 29, 1997, the following persons were the only persons who were record owners (or to the knowledge of the Trust, beneficial owners) of 5% and 25% or more of the shares of the Funds. Persons who owned of record or beneficially more than 25% of a Fund's outstanding shares may be deemed to control the Fund within the meaning of the Act. The Trust believes that most of the shares of the Trust Class of the Funds were held for the record owner's fiduciary, agency or custodial customers. SunTrust Capital Markets ACH 192,561,104.3300 99.48% Attn: Anita Woods Center 3910 303 Peachtree Street, 24th Floor Atlanta, GA 30308-3201 SunTrust Capital Markets ACH 101,508,926.6000 99.02% Attn: Anita Woods Center 3910 303 Peachtree Street, 24th Floor Atlanta, GA 30308-3201 EXPERTS The financial statements as of May 31, 1997 have been audited by Arthur Andersen LLP, Independent Public Accountants, as indicated in their report dated July 11, 1997 with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said report. B-23 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees of STI Classic Funds: We have audited the accompanying statements of net assets of the Classic Institutional Cash Management Money Market Fund and the statements of assets and liabilities, including the schedule of investments of the Classic Institutional U.S. Treasury Securities Money Market Fund of STI Classic Funds (the "Trust") as of May 31, 1997, and the related statements of operations, changes in net assets, and financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 1997, by correspondence with the custodian and the application of alternative auditing procedures with respect to unsettled securities transactions. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund of STI Classic Funds as of May 31, 1997, the results of their operations, changes in their net assets, and financial highlights for the periods presented, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Philadelphia, PA July 11, 1997 146 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- COMMERCIAL PAPER (70.0%) A1 Credit 5.640%, 06/02/97 $13,000 $ 12,998 American Express 5.500%, 08/28/97 500 493 Banc One Funding 5.620%, 07/21/97 4,000 3,969 5.680%, 08/14/97 3,811 3,767 Bank of America Toronto, Yankee 5.730%, 07/31/97 5,500 5,500 Bank of Montreal 5.520%, 07/01/97 10,000 9,954 Bank of New York 5.500%, 06/02/97 3,350 3,350 Bankers Trust 5.500%, 11/17/97 200 195 BAT Capital 5.530%, 06/24/97 10,000 9,965 Bell Atlantic Network Funding 5.600%, 06/12/97 1,000 998 Campbell Soup 5.550%, 07/07/97 2,550 2,536 Cargill Global Funding 5.550%, 06/16/97 5,000 4,988 5.820%, 11/25/97 500 486 Caterpillar Financial Services 5.600%, 09/11/97 4,915 4,837 Dean Witter Discover 5.640%, 08/01/97 6,000 5,943 Dominion Semiconductor 5.650%, 06/03/97 5,000 4,998 5.570%, 06/11/97 5,000 4,992 Dresser Industries 5.550%, 06/30/97 10,000 9,955 Ford Motor Credit 5.520%, 06/24/97 835 832 5.600%, 06/27/97 1,000 996 5.640%, 07/21/97 5,000 4,961 Gannett 5.520%, 06/17/97 4,775 4,763 General Electric Capital 5.400%, 06/02/97 500 500 -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- 5.700%, 06/30/97 $ 1,000 $ 995 5.630%, 09/25/97 1,000 982 Golden Peanut 5.400%, 07/15/97 250 248 GTE Funding 5.510%, 06/05/97 3,500 3,498 5.510%, 06/06/97 5,350 5,346 5.530%, 06/17/97 3,000 2,993 Hertz 5.620%, 07/25/97 8,500 8,428 IBM Credit 5.550%, 06/09/97 7,717 7,708 5.550%, 06/19/97 5,000 4,987 John Hancock Capital 5.600%, 06/26/97 9,375 9,339 Marsh & Mclennan 5.700%, 09/05/97 2,393 2,357 Metlife Funding 5.530%, 07/11/97 2,203 2,189 Monongahela Power 5.700%, 06/02/97 6,320 6,319 National Australia Funding 5.550%, 06/02/97 12,000 11,998 5.430%, 08/13/97 250 247 National City Credit 5.650%, 07/28/97 2,000 1,982 5.665%, 08/21/97 5,000 4,936 New England Power 5.550%, 06/04/97 2,300 2,299 5.520%, 06/06/97 5,550 5,546 5.540%, 06/12/97 2,123 2,119 Pactel Capital Resources 5.510%, 06/23/97 7,000 6,976 Philip Morris 5.700%, 06/02/97 8,000 7,999 5.550%, 06/06/97 1,505 1,504 5.550%, 06/09/97 1,275 1,273 5.550%, 06/18/97 1,240 1,237 Potomac Electric Power 5.600%, 06/06/97 9,360 9,353 Progress Capital 5.520%, 06/09/97 8,798 8,787
147 STATEMENT OF NET ASSETS - -------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- COMMERCIAL PAPER--CONTINUED 5.550%, 06/20/97 $ 1,271 $ 1,267 Royal Bank Canada 5.580%, 07/15/97 3,010 2,989 RTZ America 5.370%, 06/16/97 250 249 5.550%, 06/25/97 250 249 5.570%, 07/08/97 800 795 Sherwin Williams 5.550%, 06/18/97 5,000 4,987 Societe Generale North America 5.500%, 09/10/97 200 197 Sony Capital 5.650%, 06/02/97 4,400 4,399 South Carolina Fuel 5.510%, 06/20/97 4,435 4,422 Southern New England Telcommunications 5.580%, 06/11/97 1,157 1,155 Transamerica Finance 5.650%, 06/02/97 7,500 7,499 5.520%, 06/12/97 5,000 4,992 5.530%, 06/13/97 700 699 U.S. Borax 5.370%, 06/16/97 250 249 5.600%, 07/01/97 2,000 1,991 5.650%, 07/16/97 1,600 1,589 Union Bank Of Switzerland Finance 5.750%, 06/02/97 1,000 1,000 Virgina Electric & Power 5.650%, 07/16/97 2,000 1,986 Waste Management Technologies 5.580%, 06/24/97 3,000 2,989 5.650%, 06/27/97 2,770 2,759 Xerox Credit 5.520%, 06/12/97 1,985 1,982 5.510%, 06/24/97 5,100 5,082 ----------- Total Commercial Paper (Cost $277,147) 277,147 ----------- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- MUNICIPAL BONDS (0.3%) Compton Community, Redevelopment Agency, Series 1995B, RB (FSA) 6.150%, 08/01/97 $ 1,000 $ 1,000 ----------- Total Municipal Bonds (Cost $1,000) 1,000 ----------- CORPORATE OBLIGATIONS (5.2%) Associates Corporation of North America 6.750%, 06/13/97 3,000 3,001 8.625%, 06/15/97 500 500 Beneficial MTN 6.850%, 11/19/97 1,500 1,506 6.860%, 11/19/97 2,200 2,209 BP America 8.875%, 12/01/97 200 203 Dow Capital 5.750%, 09/15/97 500 500 FCC National Bank (A) 5.640%, 05/08/98 3,000 2,999 Federal National Mortgage Association MTN 6.520%, 09/08/97 500 501 6.520%, 09/15/97 900 901 First Chicago MTN 11.150%, 10/31/97 1,700 1,735 Household Finance 7.750%, 06/15/97 2,250 2,251 6.250%, 10/15/97 1,000 1,001 Morgan Guaranty Trust 5.950%, 06/06/97 200 200 Teco Energy MTN 9.250%, 06/16/97 3,000 3,004 ----------- Total Corporate Obligations (Cost $20,511) 20,511 ----------- CERTIFICATES OF DEPOSIT (4.8%) Bankers Trust Toronto 5.690%, 08/21/97 4,000 4,000 Societe Generale Yankee 5.690%, 08/22/97 5,000 5,000
148 - --------------------------------------------------------------------------
-------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT--CONTINUED Swiss Bank, Yankee 5.530%, 06/30/97 $10,000 $ 10,000 ----------- Total Certificates Of Deposit (Cost $19,000) 19,000 ----------- ASSET-BACKED SECURITIES (1.0%) Americredit Auto Receivables Trust, 1997-B, Cl A 5.790%, 06/12/98 4,000 4,000 ----------- Total Asset-Backed Securities (Cost $4,000) 4,000 ----------- REPURCHASE AGREEMENTS (21.3%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $76,220,749 (collateralized by various FHLMC obligations, total par value $94,382,160, 0.000%-6.630%, 05/15/08-09/01/26; FNMA obligation, par value $21,264,738, 0.000%, 01/01/26: total market value $77,708,900) 76,185 76,185 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $8,072,554 (collateralized by various FHLMC obligations, total par value $9,465,582, 6.014%-8.500%, 07/01/02-11/01/26; various FNMA obligations, total par value $20,886,794, 5.500%-9.000%, 04/01/98-05/01/26: total market value $8,294,005) 8,069 8,069 ----------- -------------------------------------------------------------------------------- FACE AMOUNT VALUE (000) (000) -------------------------------------------------------------------------------- Total Repurchase Agreements (Cost $84,254) $ 84,254 ----------- Total Investments (102.6%) (Cost $405,912) 405,912 ----------- OTHER ASSETS AND LIABILITIES, NET (-2.6%) (10,239) ----------- NET ASSETS: Fund shares of the Institutional Shares (unlimited authorization -- no par value) based on 395,673,180 outstanding shares of beneficial interest 395,673 ----------- Total Net Assets (100.0%) $ 395,673 ----------- ----------- Net Asset Value, Offering and Redemption Price Per Share -- Institutional Shares $ 1.00 ----------- -----------
CL -- CLASS FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- SECURITY INSURED BY FINANCIAL SECURITY ASSURANCE MTN -- MEDIUM TERM NOTE RB -- REVENUE BOND (A) -- VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON MAY 31, 1997. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 149 - -------------------------------------------------------------------------- CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND
- ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ TREASURY NOTE (4.9%) U.S. Treasury Note 5.750%, 10/31/97 $1,000 $ 1,000 Total Treasury Note (Cost $1,000) 1,000 ------- REPURCHASE AGREEMENTS (71.1%) Deutsche Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,031,851 (collateralized by U.S. Treasury Bill, par value $948,000, 0.000%, 07/31/97; U.S. Treasury Note, par value $111,000, 5.125%, 12/31/98: total maket value $1,052,006) 1,031 1,031 Merrill Lynch 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,995 (collateralized by U.S. Government STRIPS, total par value $1,995,661, 0.000%, 05/15/02-11/15/14: total market value $1,021,320) 1,001 1,001 Barclays 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,677,964 (collateralized by U.S. Treasury Bill, par value $4,955,000, 0.000%, 02/05/98: market value $4,770,173) 4,676 4,676 Morgan Stanley 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value $990,000, 7.25%, 05/15/04: market value $1,021,442) 1,000 1,000 - ------------------------------------------------------------------------------ FACE AMOUNT VALUE (000) (000) - ------------------------------------------------------------------------------ Salomon Brothers 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by various U.S. Treasury Notes, total par value $1,005,000, 6.125%-8.875%, 11/15/97-07/31/00: total market value $1,022,745) $1,000 $ 1,000 Swiss Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,678,206 (collateralized by U.S. Treasury Bond, par value $4,565,000, 7.250%, 08/15/22; U.S. Treasury Note, par value $25,000, 5.875%, 06/30/00: total market value $4,777,310) 4,676 4,676 Union Bank of Switzerland 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value 1,030,000, 5.875%, 11/15/99: market value $1,021,198) 1,000 1,000 ------- Total Repurchase Agreements (Cost $14,384) 14,384 ------- Total Investments (76.0% of Net Assets) (Cost $15,384) $15,384 ------- -------
STRIPS -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITY THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 151 STATEMENT OF ASSETS AND LIABILITIES (000) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND --------------------- Assets: Investments at market value (Cost $15,384).......................... $15,384 Receivables for investment securities sold.......................... 4,951 Other assets........................................................ 120 ------- Total Assets........................................................ 20,455 ------- Liabilities: Accrued expenses.................................................... 26 Distribution payable................................................ 101 Other liabilities................................................... 90 ------- Total Liabilities................................................... 217 ------- Net Assets: Fund Shares of the Institutional Shares (unlimited authorization -- no par value) based on 20,238,609 outstanding shares of beneficial interest..... 20,239 Accumulated net realized loss on investments........................ (1) ------- Total Net Assets.................................................... $20,238 ------- ------- Net Asset Value, Offering Price and Redemption Price Per Share -- Institutional Shares................................................. $ 1.00 ------- -------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 152 STATEMENT OF OPERATIONS (000) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY FUND MARKET FUND --------------- ---------------- 12/12/96*- 12/12/96*- 05/31/97 05/31/97 --------------- ---------------- Income: Interest Income..................................................... $2,784 $491 Expenses: Investment Advisory Fees............................................ 100 18 Investment Advisory Fees Waived..................................... (100) (18) Contribution from Advisor........................................... (131) (20) Administrator Fees.................................................. 33 6 Registration Fees................................................... 108 3 Transfer Agent Fees................................................. 8 8 Printing Fees....................................................... 3 3 Amortization of Deferred Organizational Costs....................... 8 8 ------ --- Total Expenses.................................................... 29 8 ------ --- Net Investment Income................................................. 2,755 483 ------ --- Net Realized Loss on Securities Sold.................................. -- (1) ------ --- Increase in Net Assets Resulting from Operations...................... $2,755 $482 ------ --- ------ ---
* Commencement of Operations Amounts designated as "--" are either $0 or round to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 153 STATEMENT OF CHANGES IN NET ASSETS (000) - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1997
CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. TREASURY MONEY MARKET SECURITIES MONEY FUND MARKET FUND --------------- ---------------- 12/12/96*- 12/12/96*- 05/31/97 05/31/97 --------------- ---------------- Operations: Net Investment Income............................................... $ 2,755 $ 483 Net Realized Loss on Securities Sold................................ -- (1) --------------- ---------------- Increase in Net Assets Resulting from Operations.................. 2,755 482 --------------- ---------------- Distributions to Shareholders: Net Investment Income............................................... (2,755) (483) Capital Gains....................................................... -- -- --------------- ---------------- Total Distributions................................................. (2,755) (483) --------------- ---------------- Capital Share Transactions (1): Proceeds from Shares Issued......................................... 578,520 143,133 Reinvestments of Cash Distributions................................. -- -- Cost of Shares Redeemed............................................. (182,847) (122,894) --------------- ---------------- Increase in Net Assets from Share Transactions.................... 395,673 20,239 --------------- ---------------- Total Increase in Net Assets.................................... 395,673 20,238 --------------- ---------------- Net Assets: Beginning of Period................................................. -- -- --------------- ---------------- End of Period....................................................... $ 395,673 $ 20,238 --------------- ---------------- --------------- ---------------- (1) Shares Issued and Redeemed: Shares Issued..................................................... 578,520 143,133 Shares Issued in Lieu of Cash Distributions....................... -- -- Shares Redeemed................................................... (182,847) (122,894) --------------- ---------------- Net Share Transactions.......................................... 395,673 20,239 --------------- ---------------- --------------- ----------------
* Commencement of Operations. Amounts designated as "--" are either $0 or round to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 154 (This page has been left blank intentionally.) 155 FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS FOR THE PERIOD FROM INCEPTION THROUGH MAY 31, 1997 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
NET REALIZED AND NET UNREALIZED GAINS NET ASSET VALUE INVESTMENT OR (LOSSES) DISTRIBUTIONS FROM BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME ------------------- ------------- ----------------- --------------------- CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND Institutional Shares 1997* $ 1.00 $ 0.02 $ -- $ (0.02) CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND Institutional Shares 1997* $ 1.00 $ 0.02 $ -- $ (0.02) DISTRIBUTIONS FROM REALIZED CAPITAL GAINS ----------------------- CLASSIC INSTITUTION Institutional Shares $ -- CLASSIC INSTITUTION Institutional Shares $ --
* Commenced operations on December 12, 1996. Total return is for the period indicated and has not been annualized. All ratios for the period have been annualized. 156 - --------------------------------------------------------------------------------
RATIO OF RATIO OF NET INVESTMENT NET ASSETS RATIO OF EXPENSES TO INCOME TO NET ASSET END OF RATIO OF NET INVESTMENT AVERAGE NET ASSETS AVERAGE NET ASSETS VALUE END TOTAL PERIOD EXPENSES TO INCOME TO (EXCLUDING WAIVERS (EXCLUDING WAIVERS OF PERIOD RETURN (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) AND REIMBURSEMENTS) - ----------- ----------- ----------- ------------------- ------------------- --------------------- --------------------- $ 1.00 2.51% $ 395,673 0.06% 5.49% 0.52% 5.03% $ 1.00 2.46% $ 20,238 0.09% 5.27% 0.51% 4.85%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 157 STI CLASSIC FUNDS PART C: OTHER INFORMATION POST-EFFECTIVE AMENDMENT NO. 22 Item 24. Financial Statements and Exhibits: Financial Statements (a) Part A - Financial Highlights Part B - Audited Financial Statements as of May 31, 1997: Statement of Net Assets Statement of Operations Statement of Changes in Net Assets Financial Highlights Notes to Financial Statements Report of Independent Public Accountants (b) Additional Exhibits (1) Declaration of Trust--as originally filed with Registrant's Registration Statement on Form N-1A filed February 12, 1992 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (2) By-Laws--as originally filed with Registrant's Pre-Effective Amendment No. 1 filed April 23, 1992 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (3) Not applicable. (4) Not applicable. (5)(c) Revised Investment Advisory Agreement with Trusco Capital Management--as originally filed with Registrant's Post-Effective Amendment No. 5 filed August 2, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (5)(d) Investment Advisory Agreement with American National Bank and Trust Company--as originally filed with Registrant's Post-Effective Amendment No. 6 filed October 22, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (5)(e) Investment Advisory Agreement with Trust Company Bank--as originally filed with Registrant's Post-Effective Amendment No. 6 filed October 22, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (6) Distribution Agreement incorporated by reference to Post-Effective Amendment No. 16 filed September 10, 1996. (7 ) Not applicable. (8)(a) Custodian Agreement with Trust Company Bank dated February 1, 1994--as originally filed with Registrant's Post-Effective Amendment No. 13 filed September 28, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (8)(b) Custodian Agreement with the Bank of California incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. C-1 (8)(c) Transfer Agent Agreement with Federated Services Company dated May 14, 1994--as originally filed with Post-Effective Amendment No. 9 filed September 22, 1994 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (8)(d) Fourth Amendment to Custodian Agreement by and Between Sti Trust & Investment Operations, Inc. And the Bank of New York, Dated May 6, 1997, incorporated herein by reference to Post-Effective Amendment No. 21 filed September 30, 1997. (9)(a) Administration Agreement with SEI Financial Management Corporation dated May 29, 1995 as originally filed with Post-Effective Amendment No. 12 filed August 17, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (9)(b) Consent to Assignment and Assumption of the Administration Agreement Between Sti Classic Funds and Sei Financial Mangement Corporation incorporated by reference to Post-Effective Amendment No. 21 filed September 30, 1997. (10) Opinion and Consent of Counsel (Incorporated by reference to Pre-Effective Amendment No. 2 filed May 22, 1992). (11) Consent of Independent Public Accountants.* (12) Not applicable. (13) Not applicable. (14) Not applicable. (15) Distribution Plan - Investor Class incorporated by reference to Post-Effective Amendment No. 16 filed September 10, 1996. (15)(a) Distribution and Service Agreement relating to Flex Shares dated May 29, 1995--as originally filed with Post-Effective Amendment No. 12 filed August 17, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. (16) Performance Quotation Computation (Incorporated by reference to Post-Effective Amendment No. 9 filed September 22, 1994). (17) Not applicable. (18) Rule 18f-3 Plan incorporated by reference to Post-Effective Amendment No. 16 filed September 10, 1996. (24) Powers of Attorney, incorporated herein by reference to Post-Effective Amendment No. 21 filed September 30, 1997. (27) Financial Data Schedules. *Filed Herewith. Item 25. Persons Controlled by or under Common Control with Registrant: See the Prospectuses and Statement of Additional Information regarding the Trust's control relationships. The Administrator is a subsidiary of SEI Investments which also controls the distributor of the Registrant, SEI Investments Distribution Co., and other corporations engaged in providing various financial and record keeping services, primarily to bank trust departments, pension plan sponsors, and investment managers. Item 26. Number of Holders of Securities: As of September 3, 1997: C-2
NUMBER OF TITLE OF CLASS RECORD HOLDERS Units of beneficial interest, without par value Balanced Fund Trust Shares.......................................................... 8 Investor Shares....................................................... 332 Flex Shares........................................................... 474 Capital Growth Fund Trust Shares.......................................................... 10 Investor Shares.......................................................9,510 Flex Shares...........................................................3,768 Classic Institutional Cash Management Money Market Fund................... 8 Classic Institutional U.S. Treasury Securities Money Market Fund.......... 7 Emerging Markets Equity Fund.............................................. 7 Florida Tax-Exempt Bond Fund Trust Shares.......................................................... 6 Investor Shares....................................................... 81 Flex Shares........................................................... 107 Georgia Tax-Exempt Bond Fund Trust Shares.......................................................... 6 Investor Shares....................................................... 65 Flex Shares........................................................... 119 International Equity Index Fund Trust Shares.......................................................... 5 Investor Shares....................................................... 553 Flex Shares........................................................... 156 International Equity Fund Trust Shares.......................................................... 7 Investor Shares....................................................... 514 Flex Shares...........................................................1,523 Investment Grade Bond Fund Trust Shares.......................................................... 6 Investor Shares.......................................................1,597 Flex Shares........................................................... 517 Investment Grade Tax-Exempt Bond Fund Trust Shares.......................................................... 5 Investor Shares....................................................... 878 Flex Shares........................................................... 196 Limited-Term Federal Mortgage Securities Fund Trust Shares.......................................................... 6 Investor Shares....................................................... 49 C-3 Flex Shares........................................................... 101 Mid-Cap Equity Fund Trust Shares.......................................................... 6 Investor Shares.......................................................1,156 Flex Shares...........................................................1,027 Prime Quality Money Market Fund Trust Shares.......................................................... 32 Investor Shares.......................................................1,316 Short-Term Bond Fund Trust Shares.......................................................... 7 Investor Shares....................................................... 89 Flex Shares........................................................... 65 Short-Term U.S. Treasury Securities Fund Trust Shares.......................................................... 7 Investor Shares....................................................... 93 Flex Shares........................................................... 86 Small Cap Equity Fund Trust Shares.......................................................... 7 Flex Shares........................................................... 733 Sunbelt Equity Fund Trust Shares.......................................................... 7 Investor Shares.......................................................2,028 Flex Shares........................................................... 615 Tax-Exempt Money Market Fund Trust Shares.......................................................... 5 Investor Shares....................................................... 270 Tennessee Tax-Exempt Bond Fund Trust Shares.......................................................... 6 Investor Shares....................................................... 30 Flex Shares........................................................... 55 U.S. Government Securities Fund Trust Shares.......................................................... 6 Investor Shares....................................................... 38 Flex Shares........................................................... 146 U.S. Government Securities Money Market Fund Trust Shares.......................................................... 5 Investor Shares....................................................... 579 Value Income Stock Fund Trust Shares.......................................................... 10 Investor Shares.......................................................5,909 Flex Shares...........................................................5,975
Item 27. Indemnification: C-4 Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to the Registration Statement is incorporated by reference. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, directors, officers and controlling persons of the Registrant by the Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by trustees, directors, officers or controlling persons of the Registrant in connection with the successful defense of any act, suit or proceeding) is asserted by such trustees, directors, officers or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues. Item 28. Business and Other Connections of Investment Advisors: Other business, profession, vocation, or employment of a substantial nature in which each director or principal officer of each Advisor is or has been, at any time during the last two fiscal years, engaged for his own account or in the capacity of director, officer, employee, partner or trustee are as follows: NAME OF CONNECTION WITH NAME OTHER COMPANY OTHER COMPANY ---- ------------- --------------- STI CAPITAL MANAGEMENT, N.A. E. Jenner Wood III -- -- Director Hunting F. Deutsch -- -- Director Anthony R. Gray -- -- Chairman & Chief Investment Officer James R. Wood -- -- President Daniel Jaworski -- -- Senior Vice President Elliott A. Perny -- -- Executive Vice President & Chief Portfolio Manager C-5 NAME OF CONNECTION WITH NAME OTHER COMPANY OTHER COMPANY ---- ------------- --------------- Stuart F. Van Arsdale -- -- Senior Vice President Jonathan D. Rich -- -- Director Robert Buhrmann -- -- Senior Vice President Larry M. Cole -- -- Senior Vice President L. Earl Denney -- -- Executive Vice President Thomas A. Edgar -- -- Senior Vice President Daniel G. Shannon -- -- Senior Vice President Ronald Schwartz -- -- Senior Vice President Ryan R. Burrow Catalina Lighting Director/25% owner Senior Vice President Mills A. Riddick -- -- Senior Vice President Christopher A. Jones -- -- Senior Vice President David E. West -- -- Vice President The list required by this Item 28 of officers and directors of Trusco Capital Management, Inc., together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to C-6 Schedules A and D of Form ADV, filed by Trusco Capital Management, Inc. pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-23163). C-6
SUNTRUST BANK CHATTANOOGA, N.A. Paul K. Brock, Jr. Brock Candy Company Vice President - Special Director Projects J. Harold Chandler Provident Life & Accident President & CEO Director Insurance Co. William H. Chapin See Rock City, Inc. President Director John W. Clay, Jr. Third National Corporation Chairman & Director CEO Andrew G. Cope The Johnston Company Managing Partner Director Robert P. Corker, Jr. -- -- Director John B. Crimmins, Jr. -- -- Director J.H. Davenport, III Howard Holdings, Inc. President Director Edwin B. Duckett, Jr. -- -- Director R. Alton Duke, Jr. -- -- Director Daniel K. Frierson Dixie Yarns, Inc. Chairman & CEO Director Zan Guerry Chattem, Inc. Chairman & CEO Director James L.E. Hill The Tennessee Aquarium President Director C-7 Summerfield K. Johnston, Jr. Coca Cola Enterprises, Inc. Vice Chairman & CEO Director Robert C. Jones Southern Products Chairman Director Company, Inc. James D. Kennedy, Jr. Cherokee Warehouses, Inc. Chairman Director T. A. Lupton, Jr. Stone Fort Land Company President Director Hugh O. Maclellen, Jr. Provident Life & Accident Chairman - Executive Director Insurance Co. Committee Jack C. McKee McKee Baking Company Executive Vice Director President Charles G. Mills Olan Mills Incorporated Chairman - Executive Director Committee J. Woodley Murphy E.I. DuPont de Nemours Plant Manager Director & Co. L. Harlen Painter Bell & Associates Attorney-at-Law Director Scott L. Probasco, Jr. American National Bank & Chairman - Executive Director Trust Co. Committee Robert J. Sudderth, Jr. American National Bank & Chairman & CEO Director Trust Co. Winston W. Walker -- -- Director SUNTRUST BANK, ATLANTA Gaylord O. Coan Gold Kist, Inc. President & CEO Director Hindsight Corp. Director A.D. Correll Georgia-Pacific Corporation President & CEO Director C-8 R.W. Courts, II Atlantic Realty Company President Director Ronald S. Crowding -- -- A.W. Dahlberg The Southern Company President Director William W. Gaston Gaston & Gaston General Partner Director Gaston Development Co., Inc. President Charles B. Ginden -- -- Director Roberto C. Goizueta The Coca-Cola Company Chairman of the Board Director Edward P. Gould Trust Company of Georgia Chairman of the Board Director T. Marshall Hahn, Jr. Georgia-Pacific Honorary Chairman Director Corporation Jesse Hill, Jr. Atlanta Life Insurance President Director Company L. Phillip Humann SunTrust Banks, Inc. President & Treasurer Director Services Resources Corporation William B. Johnson The Ritz Carlton Hotel Chairman of the Board Director Company Hicks J. Lanier Oxford Industries, Inc. Chairman of the Board Director & President Pinehill Development Co. 30% owner Joseph L. Lanier, Jr. Dan River, Inc. Chairman of the Board Director Braelan Group Chairman Robert R. Long Trust Company Bank President Director C-9 Arthur L. Montgomery -- -- Director H.G. Patillo Patillo Construction Chairman of the Board Director Company Larry L. Prince Genuine Parts Company Chairman of the Board Director R. Randall Rollins Rollins, Inc. Chairman of the Board Director Lor, Inc. Director Maran, Inc. Director Gutterworld, Inc. Director Dabora, Inc. Director & Secretary Simpson, Nance & Graham Director Auto Parts Wholesale, Inc. Director Global Expanded Metal, Inc. Director Rollins Holding Co. Director Rol, Ltd. Partner Rollins Investment Fund Partner Energy Partners Partner Petro Partnership Partner The Piedmont Investment Group Director WRG, Ltd. Partner Rollins, Inc. Chairman RPC Energy Services, Inc. Chairman The Mul Company Partner Bugvac, Inc. Director Omnitron Int'l, Inc. Director MRG, Ltd. Partner Robert W. Scherer -- -- Director Charles R. Shufeldt -- -- Executive Vice President Donald Wayne Thurmond -- -- Senior Vice President James B. Williams SunTrust Banks, Inc. Chairman of the Board Director C-10 Gerald T. Adams -- -- Senior Vice President James R. Albach -- -- Group Vice President Virginia D. Anderson -- -- Assistant Vice President Christina Bird -- -- First Vice President Edward Burgess -- -- Vice President Gay Cash -- -- Vice President Krista Lee Cosgrove -- -- Trust Officer Mark Elam -- -- Vice President Joseph B. Foley, Jr. -- -- First Vice President Thomas R. Frisbie -- -- Group Vice President Molly Guenther -- -- Assistant Vice President Benjamin S. Harris -- -- Vice President Jethro H. Irby, III -- -- First Vice President V. Jere Koser -- -- Group Vice President C-11 Richard A. Makepeace -- -- Assistant Vice President Sally S. McKinley -- -- Assistant Vice President James B. Murphy, III -- -- Vice President James E. Russell -- -- Vice President Mark Stancil -- -- Assistant Vice President David E. Thompson -- -- Vice President Charles C. Watson -- -- Group Vice President
Item 29. Principal Underwriters: (a) Furnish the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the securities of the Registrant also acts as a principal underwriter, distributor or investment adviser. Registrant's distributor, SEI Investments Distribution Co. ("SEI Investments"), acts as distributor for: SEI Daily Income Trust July 15, 1982 SEI Liquid Asset Trust November 29, 1982 SEI Tax Exempt Trust December 3, 1982 SEI Index Funds July 10, 1985 SEI Institutional Managed Trust January 22, 1987 SEI International Trust August 30, 1988 The Advisors' Inner Circle Fund November 14, 1991 The Pillar Funds February 28, 1992 CUFUND May 1, 1992 CoreFunds, Inc. October 30, 1992 First American Funds, Inc. November 1, 1992 First American Investment Funds, Inc. November 1, 1992 The Arbor Fund January 28, 1993 C-12 Boston 1784 Funds-Registered Trademark- June 1, 1993 The PBHG Funds, Inc. July 16, 1993 Marquis Funds-Registered Trademark- August 17, 1993 Morgan Grenfell Investment Trust January 3, 1994 The Achievement Funds Trust December 27, 1994 Bishop Street Funds January 27, 1995 CrestFunds, Inc. March 1, 1995 STI Classic Variable Trust August 18, 1995 ARK Funds November 1, 1995 Monitor Funds January 11, 1996 FMB Funds, Inc. March 1, 1996 SEI Asset Allocation Trust April 1, 1996 TIP Funds April 28, 1996 SEI Institutional Investments Trust June 14, 1996 First American Strategy Funds, Inc. October 1, 1996 HighMark Funds Feburary 15, 1997 Armada Funds March 8, 1997 PBHG Insurance Series Fund, Inc. April 1, 1997 Expedition Funds June 9, 1997 SEI Investments provides numerous financial services to investment managers, pension plan sponsors, and bank trust departments. These services include portfolio evaluation, performance measurement and consulting services ("Funds Evaluation") and automated execution, clearing and settlement of securities transactions ("MarketLink"). (b) Furnish the Information required by the following table with respect to each director, officer or partner of each principal underwriter named in the answer to Item 21 of Part B. Unless otherwise noted, the business address of each director or officer is Oaks, Pennsylvania 19456.
Position and Office Positions and Offices Name with Underwriter with Registrant - ---- ------------------- --------------------- Alfred P. West, Jr. Director, Chairman & Chief Executive Officer -- Henry H. Greer Director, President & Chief Operating Officer -- Carmen V. Romeo Director, Executive Vice President & President-Investment Advisory Group -- Gilbert L. Beebower Executive Vice President -- Richard B. Lieb Executive Vice President, President-Investment Services Division -- Dennis J. McGonigle Executive Vice President -- Leo J. Dolan, Jr. Senior Vice President -- Carl A. Guarino Senior Vice President -- Larry Hutchison Senior Vice President -- David G. Lee Senior Vice President -- Jack May Senior Vice President -- A. Keith McDowell Senior Vice President -- Hartland J. McKeown Senior Vice President -- C-13 Position and Office Positions and Offices Name with Underwriter with Registrant - ---- ------------------- --------------------- Barbara J. Moore Senior Vice President -- Kevin P. Robins Senior Vice President, General Counsel & Vice President & Assistant Secretary Secretary Robert Wagner Senior Vice President -- Patrick K. Walsh Senior Vice President -- Robert Aller Vice President -- Marc H. Cahn Vice President & Assistant Secretary Vice President & Assistant Secretary Gordon W. Carpenter Vice President -- Todd Cipperman Vice President & Assistant Secretary Vice President & Assistant Secretary Robert Crudup Vice President & Managing Director -- Barbara Doyne Vice President -- Jeff Drennen Vice President -- Vic Galef Vice President & Managing Director -- Kathy Heilig Vice President & Treasurer -- Michael Kantor Vice President -- Samuel King Vice President -- Kim Kirk Vice President & Managing Director -- John Krzeminski Vice President & Managing Director -- Carolyn McLaurin Vice President & Managing Director -- W. Kelso Morrill Vice President -- Joanne Nelson Vice President -- Barbara A. Nugent Vice President & Assistant Secretary Vice President & Assistant Secretary Sandra K. Orlow Vice President & Assistant Secretary Vice President & Assistant Secretary Cynthia M. Parrish Vice President & Assistant Secretary -- Donald Pepin Vice President & Managing Director -- Kim Rainey Vice President -- Mark Samuels Vice President & Managing Director -- Steve Smith Vice President -- Daniel Spaventa Vice President -- Kathryn L. Stanton Vice President & Assistant Secretary Vice President & Assistant Secretary Wayne M. Withrow Vice President & Managing Director -- James Dougherty Director of Brokerage Services --
Item 30. Location of Accounts and Records: Books or other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, and the rules promulgated thereunder, are maintained as follows: (a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6); (8); (12); and 31a-1(d), the required books and records are maintained at the offices of Registrant's Custodians: Trust Company Bank Park Place P.O. Box 105504 Atlanta, Georgia 30348 C-14 Bank of New York One Wall Street New York, New York (International Equity Index Fund, International Equity Fund, Emerging Markets Equity Fund) (b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and records are maintained at the offices of Registrant's Administrator: SEI Fund Resources One Freedom Valley Road Oaks, Pennsylvania 19456 (c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the required books and records are maintained at the principal offices of the Registrant's Advisors: STI Capital Management, N.A. P.O. Box 3808 Orlando, Florida 32802 Trusco Capital Management 50 Hurt Plaza, Suite 1400 Atlanta, Georgia 30303 SunTrust Bank, Chattanooga 736 Market Street Chattanooga, Tennessee 37402 SunTrust Bank, Atlanta 25 Park Place Atlanta, Georgia 30303 Item 31. Management Services: None. Item 32. Undertakings: Registrant hereby undertakes that whenever Shareholders meeting the requirements of Section 16(c) of the Investment Company Act of 1940 inform the Board of Trustees of their desire to communicate with Shareholders of the Trust, the Trustees will inform such Shareholders as to the approximate number of Shareholders of record and the approximate costs of mailing or afford said Shareholders access to a list of Shareholders. Registrant undertakes to call a meeting of Shareholders for the purpose of voting upon the question of removal of a Trustee(s) when requested in writing to do so by the holders of at least 10% of C-15 Registrant's outstanding shares and in connection with such meetings to comply with the provisions of Section 16(c) of the Investment Company Act of 1940 relating to Shareholder communications. Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to Shareholders, upon request and without a charge. Registrant hereby undertakes to file a post-effective amendment, including financial statements which need not be audited, within 4-6 months from the later of the commencement of operations of the Contrarian Equity Fund and Tax Free Income Fund of the Registrant or the effective date of Post-Effective Amendment No. 19 to the Registrant's 1933 Act Registration Statement. C-16 NOTICE A copy of the Agreement and Declaration of Trust for STI Classic Funds is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this Registration Statement has been executed on behalf of the Trust by an officer of the Trust as an officer and by its Trustees as trustees and not individually and the obligations of or arising out of this Registration Statement are not binding upon any of the Trustees, officers, or Shareholders individually but are binding only upon the assets and property of the Trust. C-17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 (the "Securities Act") and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for effectiveness of under the Securities Act and has duly caused this Post-Effective Amendment No. 22 to Registration Statement No. 33-45671 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 15 day of October, 1997. By: /s/ DAVID G. LEE ------------------------------------- David G. Lee, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacity on the dates indicated.
* Trustee October 15, 1997 - ----------------------------------- F. Wendell Gooch * Trustee October 15, 1997 - ----------------------------------- Daniel S. Goodrum * Trustee October 15, 1997 - ----------------------------------- Jesse S. Hall * Trustee October 15, 1997 - ----------------------------------- Wilton Looney * Trustee October 15, 1997 - ----------------------------------- Champney A. McNair * Trustee October 15, 1997 - ----------------------------------- T. Gordy Germany * Trustee October 15, 1997 - ----------------------------------- Bernard F. Sliger /s/ CAROL ROONEY Controller, Treasurer & October 15, 1997 - ----------------------------------- Chief Financial Officer Carol Rooney * President & Chief October 15, 1997 - ----------------------------------- Executive Officer David G. Lee * By: /s/ DAVID G. LEE ----------------------------------- David G. Lee, As Power of Attorney
EXHIBIT INDEX NUMBER EXHIBIT EX-99.B1 Declaration of Trust as originally filed with Registrant's Registration Statement on Form N-1A filed February 12, 1992 and incorporated by reference to Post-Effective Amendment No. 15 EX-99.B2 By-Laws as originally filed with Registrant's Pre-Effective Amendment No. 1 filed April 23, 1992 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B3 Not applicable. EX-99.B4 Not applicable. EX-99.B5C Revised Investment Advisory Agreement with Trusco Capital Management as filed with Registrant's Post-Effective Amendment No. 5 filed August 2, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B5D Investment Advisory Agreement with American National Bank and Trust Company as filed with Registrant's Post-Effective Amendment No. 6 filed October 22, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B5E Investment Advisory Agreement with Trust Company Bank as originally filed with Registrant's Post-Effective Amendment No. 6 filed October 22, 1993 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B6 Distribution Agreement incorporated by reference to Post-Effective Amendment No. 16 filed October 10, 1996. EX-99.B7 Not applicable. EX-99.B8A Custodian Agreement with Trust Company Bank dated February 1, 1994 as originally filed with Registrant's Post-Effective Amendment No. 13 filed October 28, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B8B Custodian Agreement with Bank of California incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B8D Fourth Amendment to Custodian Agreement by and between STI Trust & Investment Operations, Inc. And The Bank of New York, dated May 6, 1997, incorporated by reference to Post-effective Amendment No. 21 filed September 30, 1997. EX-99.B8C Transfer Agent Agreement with Federated Services Company dated May 14, 1994 as originally filed with Post-Effective Amendment No. 9 filed October 22, 1994 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B9A Administration Agreement with SEI Financial Management Corporation dated May 29, 1995 as originally filed with Post-Effective Amendment No. 12 filed August 17, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B9B Consent to Assignment and Assumption of the Administration Agreement between STI Classic Funds and SEI Financial Management Corporation, incorporated by reference to Post-effective Amendment No. 21 filed September 30, 1997. EX-99.B10 Opinion and Consent of Counsel (incorporated by reference to Pre-Effective Amendment No. 2 filed May 22, 1992) EX-99.B11 Consent of Independent Public Accountants* EX-99.B12 Not applicable. EX-99.B13 Not applicable. EX-99.B14 Not applicable. EX-99.B15 Distribution Plan--Investor Class incorporated by reference to Post-Effective Amendment No. 16 filed October 10, 1996. EX-99.B15A Distribution and Service Agreement relating to Flex Shares dated May 29, 1995 as originally filed with Post-Effective Amendment No. 12 filed August 17, 1995 and incorporated by reference to Post-Effective Amendment No. 15 filed July 31, 1996. EX-99.B16 Performance Quotation Computation (incorporated by reference to Post-Effective Amendment No. 9 filed September 22, 1994). EX-99.B18 Rule 18f-3 Plan incorporated by reference to Post-Effective Amendment No. 16 filed September 10, 1996. EX-99.B24 Powers of attorney, incorporated by reference to Post-Effective Amendment No. 21 filed September 30, 1997. EX-27.1A Financial Data Schedule-Prime Quality Money Market Fund--Trust Shares* EX-27.1B Financial Data Schedule-Prime Quality Money Market Fund--Investor Shares* EX-27.2A Financial Data Schedule-U.S. Government Securities Money Market Fund--Trust Shares* EX-27.2B Financial Data Schedule-U.S. Government Securities Money Market Fund--Investor Shares* EX-27.3A Financial Data Schedule-Tax-Exempt Money Market Fund--Trust Shares* EX-27.3B Financial Data Schedule-Tax-Exempt Money Market Fund--Investor Shares* EX-27.4A Financial Data Schedule-Investment Grade Bond Fund--Trust Shares* EX-27.4B Financial Data Schedule-Investment Grade Bond Fund--Investor Shares* EX-27.4C Financial Data Schedule-Investment Grade Bond Fund--Flex Shares* EX-27.5A Financial Data Schedule-Investment Grade Tax-Exempt Bond Fund--Trust Shares* EX-27.5B Financial Data Schedule-Investment Grade Tax-Exempt Bond Fund--Investor Shares* EX-27.5C Financial Data Schedule-Investment Grade Tax-Exempt Bond Fund--Flex Shares* EX-27.6A Financial Data Schedule-Capital Growth Fund--Trust Shares* EX-27.6B Financial Data Schedule-Capital Growth Fund--Investor Shares* EX-27.6C Financial Data Schedule-Capital Growth Fund--Flex Shares* EX-27.7A Financial Data Schedule-Value Income Stock Fund--Trust Shares* C-21 EX-27.7B Financial Data Schedule-Value Income Stock Fund--Investor Shares* EX-27.7C Financial Data Schedule-Value Income Stock Fund--Flex Shares* EX-27.8A Financial Data Schedule-Short-Term Treasury Securities Fund--Trust Shares* EX-27.8B Financial Data Schedule-Short-Term Treasury Securities Fund--Investor Shares* EX-27.8C Financial Data Schedule-Short-Term Treasury Securities Fund--Flex Shares* EX-27.9A Financial Data Schedule-Short-Term Bond Fund--Trust Shares* EX-27.9B Financial Data Schedule-Short-Term Bond Fund--Investor Shares* EX-27.9C Financial Data Schedule-Short-Term Bond Fund--Flex Shares* EX-27.10A Financial Data Schedule-Sunbelt Equity Fund--Trust Shares* EX-27.10B Financial Data Schedule-Sunbelt Equity Fund--Investor Shares* EX-27.10C Financial Data Schedule-Sunbelt Equity Fund--Flex Shares* EX-27.11A Financial Data Schedule-Mid-Cap Equity Fund--Trust Shares* EX-27.11B Financial Data Schedule-Mid-Cap Equity Fund--Investor Shares* EX-27.11C Financial Data Schedule-Mid-Cap Equity Fund--Flex Shares* EX-27.12A Financial Data Schedule-Balanced Fund--Trust Shares* EX-27.12B Financial Data Schedule-Balanced Fund--Investor Shares* EX-27.12C Financial Data Schedule-Balanced Fund--Flex Shares* EX-27.14A Financial Data Schedule-Florida Tax-Exempt Bond Fund--Trust Shares* EX-27.14B Financial Data Schedule-Florida Tax-Exempt Bond Fund--Investor Shares* EX-27.14C Financial Data Schedule-Florida Tax-Exempt Bond Fund--Flex Shares* EX-27.15A Financial Data Schedule-Georgia Tax-Exempt Bond Fund--Trust Shares* EX-27.15B Financial Data Schedule-Georgia Tax-Exempt Bond Fund--Investor Shares* EX-27.15C Financial Data Schedule-Georgia Tax-Exempt Bond Fund--Flex Shares* EX-27.16A Financial Data Schedule-Tennessee Tax-Exempt Bond Fund--Trust Shares* EX-27.16B Financial Data Schedule-Tennessee Tax-Exempt Bond Fund--Investor Shares* EX-27.16C Financial Data Schedule-Tennessee Tax-Exempt Bond Fund--Flex Shares* EX-27.17A Financial Data Schedule-U.S. Government Securities Fund--Trust Shares* EX-27.17B Financial Data Schedule-U.S. Government Securities Fund--Investor Shares* EX-27.17C Financial Data Schedule-U.S. Government Securities Fund--Flex Shares* EX-27.18A Financial Data Schedule-Limited-Term Federal Mortgage Securities Fund--Trust Shares* C-22 EX-27.18B Financial Data Schedule-Limited-Term Federal Mortgage Securities Fund--Investor Shares* EX-27.18C Financial Data Schedule-Limited-Term Federal Mortgage Securities Fund--Flex Shares* EX-27.19A Financial Data Schedule-International Equity Index Fund--Trust Shares* EX-27.19B Financial Data Schedule-International Equity Index Fund--Investor Shares* EX-27.19C Financial Data Schedule-International Equity Index Fund--Flex Shares* EX-27.20A Financial Data Schedule-International Equity Fund--Trust Shares* EX-27.20B Financial Data Schedule-International Equity Fund--Investor Shares* EX-27.20C Financial Data Schedule-International Equity Fund--Flex Shares* EX-27.21 Financial Data Schedule-Classic Institutional Cash Management Money Market Fund* EX-27.22 Financial Data Schedule-Classic Institutional U.S. Treasury Money Market Fund* EX-27.23 Financial Data Schedule-Small Cap Equity Fund* EX-27.24 Financial Data Schedule-Emerging Markets Equity Fund* *FILED HEREWITH. C-23 EX-27.1A 2 EX-27.1A
6 0000883939 STI CLASSIC 011 PRIME QUALITY MONEY MARKET 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1404666 1404666 8195 304 0 1413165 34908 0 8158 43066 0 1086903 1086903 1051049 0 0 (406) 0 0 1370099 0 82489 0 (9208) 73281 (121) 0 73160 0 (60224) 0 0 2786281 (2752496) 2069 103603 0 (285) 0 0 9767 0 11945 1504033 1.00 .05 0 (.05) 0 0 1.00 .58 0 0
EX-27.1B 3 EX-27.1B
6 0000883939 STI CLASSIC 012 PRIME QUALITY MONEY MARKET 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1404666 1404666 8195 304 0 1413165 34908 0 8158 43066 0 283602 283602 215732 0 0 (406) 0 0 1370099 0 82489 0 (9208) 73281 (121) 0 73160 0 (13057) 0 0 928946 (871451) 10375 103603 0 (285) 0 0 9767 0 11945 1504033 1.00 .05 0 (.05) 0 0 1.00 .75 0 0
EX-27.2A 4 EX-27.2A
6 0000883939 STI CLASSIC 021 U.S. GOVERNMENT SECURITIES MONEY MARKET FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 403728 403728 7059 81 0 410868 0 0 3340 3340 0 344391 344391 325494 0 0 (60) 0 0 407528 0 20206 0 (2406) 17800 (51) 0 17749 0 (14924) 0 0 705839 (687215) 274 23427 0 (9) 0 0 2455 0 3006 377964 1.00 .05 0 (.05) 0 0 1.00 .61 0 0
EX-27.2B 5 EX-27.2B
6 0000883939 STI CLASSIC 022 U.S. GOVERNMENT SECURITIES MONEY MARKET FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 403728 403728 7059 81 0 410868 0 0 3340 3340 0 63197 63197 58617 0 0 (60) 0 0 407528 0 20206 0 (2406) 17800 (51) 0 17749 0 (2876) 0 0 182325 (180124) 2379 23427 0 (9) 0 0 2455 0 3006 377964 1.00 .05 0 (.05) 0 0 1.00 .75 0 0
EX-27.3A 6 EX-27.3A
6 0000883939 STI CLASSIC 031 TAX-EXEMPT MONEY MARKET 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 434076 434076 4698 223 0 438997 2430 0 1548 3978 0 333004 333004 273619 0 0 (4) 0 0 435019 0 15230 0 (2272) 12958 10 0 12968 0 (10054) 0 0 980872 (921487) 0 66183 0 (14) 0 0 2361 0 3005 429731 1.00 .03 0 (.03) 0 0 1.00 .50 0 0
EX-27.3B 7 EX-27.3B
6 0000883939 STI CLASSIC 032 TAX-EXEMPT MONEY MARKET 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 434076 434076 4698 223 0 438997 2430 0 1548 3978 0 102019 102019 95231 0 0 (4) 0 0 435019 0 15230 0 (2272) 12958 10 0 12968 0 (2904) 0 0 305724 (301505) 2569 66183 0 (14) 0 0 2361 0 3005 429731 1.00 .03 0 (.03) 0 0 1.00 .62 0 0
EX-27.4A 8 EXHIBIT 27.4A
6 0000883939 STI CLASSIC 041 INVESTMENT GRADE BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 643713 644018 32711 92 0 676821 0 0 4247 4247 0 644906 62362 59556 0 0 (12593) 0 305 672574 0 43028 0 (5064) 37964 (5113) 10558 43409 0 (35713) 0 0 21475 (21378) 2709 32284 157 (7856) 0 0 4793 0 5792 648267 10.07 .60 .09 (.60) 0 0 10.16 .75 0 0
EX-27.4B 9 EXHIBIT 27.4B
6 0000883939 STI CLASSIC 042 INVESTMENT GRADE BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 643713 644018 32711 92 0 676821 0 0 4247 4247 0 34279 3265 3592 0 0 (12593) 0 305 672574 0 43028 0 (5064) 37964 (5113) 10558 43409 0 (1950) 0 0 575 (1076) 174 32284 157 (7856) 0 0 4793 0 5792 648267 10.06 .56 .10 (.56) 0 0 10.16 1.15 0 0
EX-27.4C 10 EXHIBIT 27.4C
6 0000883939 STI CLASSIC 043 INVESTMENT GRADE BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 643713 644018 32711 92 0 676821 0 0 4247 4247 0 5854 567 458 0 0 (12593) 0 305 672574 0 43028 0 (5064) 37964 (5113) 10558 43409 0 (270) 0 0 303 (218) 23 32284 157 (7856) 0 0 4793 0 5792 648267 10.07 .51 .10 (.51) 0 0 10.17 1.64 0 0
EX-27.5A 11 EXHIBIT 27.5A
6 0000883939 STI CLASSIC 051 INVESTMENT GRADE TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 195689 197162 4076 29 0 201267 24673 0 912 25585 0 137067 12397 11215 0 0 1967 0 1473 175682 0 8107 0 1476 6631 2924 2169 11724 0 (5248) (2384) 0 4112 (3216) 286 8212 2 2142 0 0 1272 0 1727 172035 11.10 .44 .33 (.44) (.21) 0 11.22 .75 0 0
EX-27.5B 12 EXHIBIT 27.5B
6 0000883939 STI CLASSIC 052 INVESTMENT GRADE TAX EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 195689 197162 4076 29 0 201267 24673 0 912 25585 0 30459 2835 3367 0 0 1967 0 1473 175682 0 8107 0 1476 6631 2924 2169 11724 0 (1226) (623) 0 193 (869) 144 8212 2 2142 0 0 1272 0 1727 172035 11.12 .40 .33 (.40) (.21) 0 11.24 1.15 0 0
EX-27.5C 13 EXHIBIT 27.5C
6 0000883939 STI CLASSIC 053 INVESTMENT GRADE TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 195689 197162 4076 29 0 201267 24673 0 912 25585 0 4716 417 498 0 0 1967 0 1473 175682 0 8107 0 1476 6631 2924 2169 11724 0 (159) (92) 0 176 (277) 20 8212 2 2142 0 0 1272 0 1727 172035 11.11 .35 .33 (.35) (.21) 0 11.23 1.63 0 0
EX-27.6A 14 EXHIBIT 27.6A
6 0000883939 STI CLASSIC 061 CAPITAL GROWTH FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1179238 1360049 20466 200 0 1380715 37007 0 3167 40174 0 807086 71924 65851 3569 0 147010 0 180811 1340541 18021 6139 0 (15557) 8603 221554 43851 274008 0 (7993) (180731) 0 20391 (27687) 13369 156996 3296 146022 0 0 14003 0 17031 1218801 14.90 .12 3.13 (.12) (2.94) 0 15.09 1.15 0 0
EX-27.6B 15 EXHIBIT 27.6B
6 0000883939 STI CLASSIC 062 CAPITAL GROWTH FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1179238 1360049 20466 200 0 1380715 37007 0 3167 40174 0 167543 14516 12833 3569 0 147010 0 180811 1340541 18021 6139 0 (15557) 8603 221554 43851 274008 0 (338) (35976) 0 1573 (2607) 2717 156996 3296 146022 0 0 14003 0 17031 1218801 14.89 .03 3.10 (.02) (2.94) 0 15.06 1.80 0 0
EX-27.6C 16 EXHIBIT 27.6C
6 0000883939 STI CLASSIC 063 CAPITAL GROWTH FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1179238 1360049 20466 200 0 1380715 37007 0 3167 40174 0 34522 2457 739 3569 0 147010 0 180811 1340541 18021 6139 0 (15557) 8603 221554 43851 274008 0 0 (3858) 0 1620 (191) 289 156996 3296 146022 0 0 14003 0 17031 1218801 14.84 (.01) 3.07 0 (2.94) 0 14.96 2.27 0 0
EX-27.7A 17 EXHIBIT 27.7A
6 0000883939 STI CLASSIC 071 VALUE INCOME STOCK FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1563149 1717566 50875 68 0 1768509 37465 0 3517 40982 0 1171719 108557 94636 6428 0 192817 0 154417 1727527 44675 5035 0 (14661) 35049 243189 33953 312191 0 (30805) (166191) 0 29343 (30076) 14654 326233 5610 139419 0 0 12026 0 14704 1504296 13.15 .30 2.32 (.30) (1.76) 0 13.71 .91 0 0
EX-27.7B 18 EXHIBIT 27.7B
6 0000883939 STI CLASSIC 072 VALUE INCOME STOCK FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1563149 1717566 50875 68 0 1768509 37465 0 3517 40982 0 134021 12133 9945 6428 0 192817 0 154417 1727527 44675 5035 0 (14661) 35049 243189 33953 312191 0 (2820) (18030) 0 2411 (1906) 1683 326233 5610 139419 0 0 12026 0 14704 1504296 13.13 .25 2.32 (.26) (1.76) 0 13.68 1.30 0 0
EX-27.7C 19 EXHIBIT 27.7C
6 0000883939 STI CLASSIC 073 VALUE INCOME STOCK FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 1563149 1717566 50875 68 0 1768509 37465 0 3517 40982 0 68125 5400 2010 6428 0 192817 0 154417 1727527 44675 5035 0 (14661) 35049 243189 33953 312191 0 (606) (5570) 0 3360 (470) 500 326233 5610 139419 0 0 12026 0 14704 1504296 13.08 .18 2.29 (.18) (1.76) 0 13.61 2.00 0 0
EX-27.8A 20 EXHIBIT 27.8A
6 0000883939 STI CLASSIC 081 SHORT-TERM TREASURY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 26742 26712 433 11 0 27156 0 0 156 156 0 22198 2226 1032 0 0 (257) 0 (30) 27000 0 1410 0 (172) 1238 (25) 88 1301 0 (934) 0 0 1806 (659) 47 10236 52 (337) 0 0 156 0 272 23985 9.84 .51 .04 (.51) 0 0 9.88 .65 0 0
EX-27.8B 21 EXHIBIT 27.8B
6 0000883939 STI CLASSIC 082 SHORT-TERM U.S. TREASURY SECURITIES FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 26742 26712 433 11 0 27156 0 0 156 156 0 3986 397 426 0 0 (257) 0 (30) 27000 0 1410 0 (172) 1238 (25) 88 1301 0 (205) 0 0 75 (125) 21 10236 52 (337) 0 0 156 0 272 23985 9.84 .50 .04 (.50) 0 0 9.88 .80 0 0
EX-27.8C 22 EXHIBIT 27.8C
6 0000883939 STI CLASSIC 083 SHORT-TERM TREASURY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 26742 26712 433 11 0 27156 0 0 156 156 0 1103 111 246 0 0 (257) 0 (30) 27000 0 1410 0 (172) 1238 (25) 88 1301 0 (99) 0 0 84 (228) 9 10236 52 (337) 0 0 156 0 272 23985 9.82 .47 .03 (.47) 0 0 9.85 1.05 0 0
EX-27.9A 23 EXHIBIT 27.9A
6 0000883939 STI CLASSIC 091 SHORT-TERM BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 89708 89407 4039 20 0 93466 0 0 510 510 0 90146 9064 9241 141 0 (319) 0 (301) 92956 0 5793 0 (641) 5152 (321) 1027 5858 0 (4983) (311) 0 4380 (4902) 345 (1866) 90 377 0 0 624 0 794 96145 9.86 .53 .07 (.53) (.03) 0 9.90 .65 0 0
EX-27.9B 24 EXHIBIT 27.9B
6 0000883939 STI CLASSIC 092 SHORT-TERM BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 89708 89407 4039 20 0 93466 0 0 510 510 0 2202 220 273 141 0 (319) 0 (301) 92956 0 5793 0 (641) 5152 (321) 1027 5858 0 (120) (7) 0 61 (125) 11 (1866) 90 377 0 0 624 0 794 96145 9.88 .51 .06 (.51) (.03) 0 9.91 .85 0 0
EX-27.9C 25 EXHIBIT 27.9C
6 0000883939 STI CLASSIC 093 SHORT-TERM BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 89708 89407 4039 20 0 93466 0 0 510 510 0 1087 108 98 141 0 (319) 0 (301) 92956 0 5793 0 (641) 5152 (321) 1027 5858 0 (51) (4) 0 52 (47) 5 (1866) 90 377 0 0 624 0 794 96145 9.88 .48 .06 (.48) (.03) 0 9.91 1.20 0 0
EX-27.10A 26 EXHIBIT 27.10A
6 0000883939 STI CLASSIC 101 SUNBELT EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 327435 408998 8041 462 0 417501 1282 0 1064 2346 0 292778 28714 29228 39 0 14034 0 81563 415155 2081 18 0 (5027) (2928) 24062 (18818) 2316 0 0 (29932) 0 16289 (18979) 2176 (28983) 0 22383 0 0 4842 0 5526 421442 14.11 (.09) .25 0 (.99) 0 13.28 1.15 0 0
EX-27.10B 27 EXHIBIT 27.10B
6 0000883939 STI CLASSIC 102 SUNBELT EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 327435 408998 8041 462 0 417501 1282 0 1064 2346 0 21236 2152 2079 39 0 14034 0 81563 415155 2081 18 0 (5027) (2928) 24062 (18818) 2316 0 0 (2119) 0 473 (569) 169 (28983) 0 22383 0 0 4842 0 5526 421442 13.95 (.14) .24 0 (.99) 0 13.06 1.60 0 0
EX-27.10C 28 EXHIBIT 27.10C
6 0000883939 STI CLASSIC 103 SUNBELT EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 327435 408998 8041 462 0 417501 1282 0 1064 2346 0 5505 438 194 39 0 14034 0 81563 415155 2081 18 0 (5027) (2928) 24062 (18818) 2316 0 0 (360) 0 310 (95) 29 (28983) 0 22383 0 0 4842 0 5526 421442 13.97 (.14) .16 0 (.99) 0 13.00 2.20 0 0
EX-27.11A 29 EXHIBIT 27.11A
6 0000883939 STI CLASSIC 111 MID CAP EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 290164 315999 4065 27 0 320091 1632 0 724 2356 0 239440 21752 19896 0 (10) 25752 0 25835 317735 2627 1386 0 (3500) 513 33978 4912 39403 0 (962) (24244) 0 9011 (9008) 1853 40830 249 18671 0 0 3328 0 3864 289627 12.76 .03 1.69 (.05) (1.22) 0 13.21 1.15 0 0
EX-27.11B 30 EXHIBIT 27.11B
6 0000883939 STI CLASSIC 112 MID CAP EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 290164 315999 4065 27 0 320091 1632 0 724 2356 0 17180 1537 1410 0 (10) 25752 0 25835 317735 2627 1386 0 (3500) 513 33978 4912 39403 0 (17) (1770) 0 455 (472) 145 40830 249 18671 0 0 3328 0 3864 289627 12.74 (.03) 1.69 (.01) (1.22) 0 13.17 1.60 0 0
EX-27.11C 31 EXHIBIT 27.11C
6 0000883939 STI CLASSIC 113 MID CAP EQUITY FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 290164 315999 4065 27 0 320091 1632 0 724 2356 0 9538 776 396 0 (10) 25752 0 25835 317735 2627 1386 0 (3500) 513 33978 4912 39403 0 0 (676) 0 459 (134) 55 40830 249 18671 0 0 3328 0 3864 289627 12.69 (.07) 1.64 0 (1.22) 0 13.04 2.20 0 0
EX-27.12A 32 EXHIBIT 27.12A
6 0000883939 STI CLASSIC 121 BALANCED FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 149984 161891 4316 18 0 166225 2455 0 333 2788 0 131876 12674 9666 781 0 8010 0 11907 163437 1113 3654 0 (1246) 3521 11411 5223 20155 0 (3051) (9775) 0 6572 (4686) 1122 43772 527 7267 0 0 1177 0 1424 123961 11.55 .33 1.47 (.32) (1.09) 0 11.94 .95 0 0
EX-27.12B 33 EXHIBIT 27.12B
6 0000883939 STI CLASSIC 122 BALANCED FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 149984 161891 4316 18 0 166225 2455 0 333 2788 0 5143 501 422 781 0 8010 0 11907 163437 1113 3654 0 (1246) 3521 11411 5223 20155 0 (139) (505) 0 122 (99) 56 43772 527 7267 0 0 1177 0 1424 123961 11.60 .29 1.48 (.29) (1.09) 0 11.99 1.25 0 0
EX-27.12C 34 EXHIBIT 27.12C
6 0000883939 STI CLASSIC 123 BALANCED FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 149984 161891 4316 18 0 166225 2455 0 333 2788 0 5720 510 272 781 0 8010 0 11907 163437 1113 3654 0 (1246) 3521 11411 5223 20155 0 (77) (388) 0 265 (68) 41 43772 527 7267 0 0 1177 0 1424 123961 11.53 .22 1.45 (.21) (1.09) 0 11.90 2.01 0 0
EX-27.14A 35 EXHIBIT 27.14A
6 0000883939 STI CLASSIC 131 FLORIDA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 55223 56023 925 11 0 56959 0 0 246 246 0 50028 4911 3059 0 0 (210) 0 800 56713 0 2318 0 (319) 1999 (209) 1157 2947 0 (1748) (126) 0 2728 (907) 31 19206 4 145 0 0 293 0 419 45164 10.06 .46 .25 (.46) (.03) 0 10.28 .65 0 0
EX-27.14B 36 EXHIBIT 27.14B
6 0000883939 STI CLASSIC 132 FLORIDA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 55223 56023 925 11 0 56959 0 0 246 246 0 3103 314 400 0 0 (210) 0 800 56713 0 2318 0 (319) 1999 (209) 1157 2947 0 (154) (11) 0 89 (188) 13 19206 4 145 0 0 293 0 419 45164 10.07 .44 .25 (.44) (.03) 0 10.29 .85 0 0
EX-27.14C 37 EXHIBIT 27.14C
6 0000883939 STI CLASSIC 133 FLORIDA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 55223 56023 925 11 0 56959 0 0 246 246 0 2992 291 267 0 0 (210) 0 800 56713 0 2318 0 (319) 1999 (209) 1157 2947 0 (101) (9) 0 115 (99) 8 19206 4 145 0 0 293 0 419 45164 10.08 .39 .25 (.39) (.03) 0 10.30 1.35 0 0
EX-27.15A 38 EXHIBIT 27.15A
6 0000883939 STI CLASSIC 141 GEORGIA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 47902 48204 912 11 0 49127 1010 0 212 1222 0 39434 4084 2401 0 0 7 0 302 47905 0 1875 0 (286) 1589 7 882 2478 0 (1285) (153) 0 3062 (1457) 78 17330 0 196 0 0 246 0 382 37812 9.56 .42 .22 (.42) (.05) 0 9.73 .65 0 0
EX-27.15B 39 EXHIBIT 27.15B
6 0000883939 STI CLASSIC 142 GEORGIA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 47902 48204 912 11 0 49127 1010 0 212 1222 0 3511 360 357 0 0 7 0 302 47905 0 1875 0 (286) 1589 7 882 2478 0 (139) (17) 0 59 (70) 14 17330 0 196 0 0 246 0 382 37812 9.58 .40 .21 (.40) (.05) 0 9.74 .85 0 0
EX-27.15C 40 EXHIBIT 27.15C
6 0000883939 STI CLASSIC 143 GEORGIA TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 47902 48204 912 11 0 49127 1010 0 212 1222 0 4651 479 440 0 0 7 0 302 47905 0 1875 0 (286) 1589 7 882 2478 0 (165) (26) 0 175 (154) 18 17330 0 196 0 0 246 0 382 37812 9.56 .35 .22 (.35) (.05) 0 9.73 1.35 0 0
EX-27.16A 41 EXHIBIT 27.16A
6 0000883939 STI CLASSIC 151 TENNESSEE TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 5893 6013 96 6 0 6115 0 0 35 35 0 1913 205 194 0 0 (12) 0 120 6080 0 282 0 (55) 227 (11) 153 369 0 (74) 0 0 130 (122) 3 717 0 (1) 0 0 35 0 108 5463 9.40 .43 .23 (.43) 0 0 9.63 .65 0 0
EX-27.16B 42 EXHIBIT 27.16B
6 0000883939 STI CLASSIC 152 TENNESSEE TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 5893 6013 96 6 0 6115 0 0 35 35 0 1570 166 162 0 0 (12) 0 120 6080 0 282 0 (55) 227 (11) 153 369 0 (65) 0 0 47 (48) 5 717 0 (1) 0 0 35 0 108 5463 9.42 .41 .23 (.41) 0 0 9.65 .85 0 0
EX-27.16C 43 EXHIBIT 27.16C
6 0000883939 STI CLASSIC 153 TENNESSEE TAX-EXEMPT BOND FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 5893 6013 96 6 0 6115 0 0 35 35 0 2489 260 214 0 0 (12) 0 120 6080 0 282 0 (55) 227 (11) 153 369 0 (88) 0 0 88 (48) 6 717 0 (1) 0 0 35 0 108 5463 9.41 .37 .23 (.37) 0 0 9.64 1.35 0 0
EX-27.17A 44 EXHIBIT 27.17A
6 0000883939 STI CLASSIC 161 U.S. GOVERNMENT SECURITIES FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 24700 24486 222 20 0 24728 0 0 213 213 0 19658 1943 1037 0 0 (61) 0 (214) 24515 0 1411 0 (191) 1220 (17) 214 1417 0 (916) 0 0 1986 (1110) 30 9016 0 (44) 0 0 150 0 274 20342 9.91 .62 .11 (.62) 0 0 10.02 .75 0 0
EX-27.17B 45 EXHIBIT 27.17B
6 0000883939 STI CLASSIC 162 U.S. GOVERNMENT SECURITIES FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 24700 24486 222 20 0 24728 0 0 213 213 0 2266 224 242 0 0 (61) 0 (214) 24515 0 1411 0 (191) 1220 (17) 214 1417 0 (147) 0 0 127 (159) 14 9016 0 (44) 0 0 150 0 274 20342 9.90 .58 .12 (.58) 0 0 10.02 1.15 0 0
EX-27.17C 46 EXHIBIT 27.17C
6 0000883939 STI CLASSIC 163 U.S. GOVERNMENT SECURITIES FUND 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 24700 24486 222 20 0 24728 0 0 213 213 0 2866 280 285 0 0 (61) 0 (214) 24515 0 1411 0 (191) 1220 (17) 214 1417 0 (157) 0 0 77 (95) 13 9016 0 (44) 0 0 150 0 274 20342 9.91 .53 .11 (.53) 0 0 10.02 1.66 0 0
EX-27.18A 47 EXHIBIT 27.18A
6 0000883939 STI CLASSIC 171 LIMITED TERM FEDERAL MORTGAGE SECURITIES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 127423 127278 1220 25 0 128523 0 0 785 785 0 124063 12371 7347 0 (2) (43) 0 (145) 127738 0 6871 0 (711) 6160 1 303 6464 0 (5933) (159) 0 7497 (2886) 413 50507 0 122 (2) 0 691 0 884 106328 9.99 .58 .04 (.58) (.01) 0 10.02 .65 0 0
EX-27.18B 48 EXHIBIT 27.18B
6 0000883939 STI CLASSIC 172 LIMITED TERM FEDERAL MORTGAGE SECURITIES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 127423 127278 1220 25 0 128523 0 0 785 785 0 2441 243 252 0 (2) (43) 0 (145) 127738 0 6871 0 (711) 6160 1 303 6464 0 (146) (4) 0 138 (161) 14 50507 0 122 (2) 0 691 0 884 106328 9.97 .56 .04 (.56) (.01) 0 10.00 .90 0 0
EX-27.18C 49 EXHIBIT 27.18C
6 0000883939 STI CLASSIC 173 LIMITED TERM FEDERAL MORTGAGE SECURITIES 1,000 YEAR MAY-31-1997 JUN-01-1997 MAY-31-1997 127423 127278 1220 25 0 128523 0 0 785 785 0 1424 141 135 0 (2) (43) 0 (145) 127738 0 6871 0 (711) 6160 1 303 6464 0 (81) (3) 0 50 (51) 7 50507 0 122 (2) 0 691 0 884 106238 9.99 .52 .04 (.52) (.01) 0 10.02 1.25 0 0
EX-27.19A 50 EXHIBIT 27.19A
6 0000883939 STI CLASSIC FUNDS 180 INTERNATIONAL EQUITY INDEX FUND - TRUST SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 49508 58009 413 1710 0 60132 0 0 124 124 0 48977 4718 8304 220 0 2335 0 8476 60008 1274 13 0 (805) 482 4098 (487) 4093 0 (614) (1696) 0 2030 (5800) 184 (37486) 232 269 0 0 658 0 909 73087 10.96 .10 .69 (.11) (.30) 0 11.34 1.05 0 0
EX-27.19B 51 EXHIBIT 27.19B
6 0000883939 STI CLASSIC FUNDS 181 INTERNATIONAL EQUITY INDEX FUND - INVESTOR SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 49508 58009 413 1710 0 60132 0 0 124 124 0 48977 497 515 220 0 2335 0 8476 60008 1274 13 0 (805) 482 4098 (487) 4093 0 (35) (154) 0 241 (277) 18 (37486) 232 269 0 0 658 0 909 73087 10.88 .03 .72 (.07) (.30) 0 11.26 1.45 0 0
EX-27.19C 52 EXHIBIT 27.19C
6 0000883939 STI CLASSIC FUNDS 182 INTERNATIONAL EQUITY INDEX - FLEX SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 49508 58009 413 1710 0 60132 0 0 124 124 0 48977 80 84 220 0 2335 0 8476 60008 1274 13 0 (805) 482 4098 (487) 4093 0 0 (27) 0 31 (38) 3 (37486) 232 269 0 0 658 0 909 73087 10.87 (.05) .72 0 (.30) 0 11.24 2.10 0 0
EX-27.20A 53 EXHIBIT 27.20A
6 0000883939 STI CLASSIC FUNDS 190 INTERNATIONAL EQUITY FUND - TRUST SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 444104 508934 12424 1039 0 522397 12868 0 1155 14023 0 416502 35899 18703 834 0 26202 0 64836 508374 6193 922 0 (5327) 1788 30936 51229 83953 0 (638) (9573) 0 31059 (14649) 785 290667 986 3794 0 0 4494 0 5509 359631 11.40 .03 2.57 (.02) (.35) 0 13.63 1.46 0 0
EX-27.20B 54 EXHIBIT 27.20B
6 0000883939 STI CLASSIC FUNDS 191 INTERNATIONAL EQUITY FUND - INVESTOR SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 444104 508934 12424 1039 0 522397 12868 0 1155 14023 0 416502 786 303 834 0 26202 0 64836 508374 6193 922 0 (5327) 1788 30936 51229 83953 0 0 (182) 0 634 (166) 15 290667 986 3794 0 0 4494 0 5509 359631 11.38 (.01) 2.56 0 (.35) 0 13.58 1.81 0 0
EX-27.20C 55 EXHIBIT 27.20C
6 0000883939 STI CLASSIC FUNDS 192 INTERNATIONAL EQUITY FUND - FLEX SHARES 1,000 YEAR MAY-31-1997 JUN-01-1996 MAY-31-1997 444104 508934 12424 1039 0 522397 12868 0 1155 14023 0 416502 622 84 834 0 26202 0 64836 508374 6193 922 0 (5327) 1788 30936 51229 83953 0 0 (75) 0 566 (34) 6 290667 986 3794 0 0 4494 0 5509 359631 11.37 (.04) 2.49 0 (.35) 0 13.47 2.51 0 0
EX-27.21 56 EXHIBIT 27.21
6 0000883939 STI CLASSIC 200 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET 1,000 5-MOS MAY-31-1997 DEC-12-1996 MAY-31-1997 405912 405912 0 558 0 406470 0 0 10797 10797 0 395673 395673 0 0 0 0 0 0 395673 0 2784 0 (29) 2755 0 0 2755 0 (2755) 0 0 578520 (182847) 0 395673 0 0 0 0 100 0 260 107075 1.00 .02 0 (.02) 0 0 1.00 .06 0 0
EX-27.22 57 EXHIBIT 27.22
6 0000883939 STI CLASSIC 210 CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET 1,000 5-MOS MAY-31-1997 DEC-12-1996 MAY-31-1997 15384 15384 4951 120 0 20455 0 0 217 217 0 20239 20239 0 0 0 (1) 0 0 20238 0 491 0 (8) 483 (1) 0 482 0 (483) 0 0 143133 (122894) 0 20238 0 0 0 0 18 0 46 19544 1.00 .02 0 (.02) 0 0 1.00 .09 0 0
EX-27.23 58 EXHIBIT 27.23
6 0000883939 STI CLASSIC 220 SMALL CAP EQUITY FUND 1,000 5-MOS MAY-31-1997 JAN-31-1997 MAY-31-1997 124454 132098 3620 9 0 135727 0 0 4678 4678 0 121332 11837 0 316 0 1757 0 7644 131049 92 765 0 (336) 521 1749 7652 9922 0 (205) 0 0 12290 (466) 13 131049 0 0 0 0 322 0 384 84453 10.00 .05 1.04 (.02) 0 0 11.07 1.20 0 0
EX-27.24 59 EXHIBIT 27.24
6 0000883939 STI CLASSIC 230 EMERGING MARKETS EQUITY FUND 1,000 4-MOS MAY-31-1997 JAN-31-1997 MAY-31-1997 36970 39078 805 512 0 40395 780 0 120 900 0 37181 3660 0 144 0 62 0 2108 39495 258 49 0 163 144 62 2108 2314 0 0 0 0 4128 (468) 0 39495 0 0 0 0 137 0 216 32048 10.00 .04 .75 0 0 0 10.79 1.55 0 0
EX-99.B11 60 EX-99.B11 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use in this Registration Statement of our report dated July 11, 1997, on the May 31, 1997 financial statements of STI Classic Funds, included in Post-Effective Amendment No. 22 to the Registration Statement on Form N1-A, and to all references to our Firm included in or made part of this Registration Statement File No. 33-45671. /s/ Arthur Andersen LLP Philadelphia, PA October 15, 1997 -----END PRIVACY-ENHANCED MESSAGE-----