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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number______811-09032_______________________________
__________________________STI Classic Variable Trust____________________________
(Exact name of registrant as specified in charter)
___________101 Federal Street Boston, MA ______________________02110____________
(Address of principal executive offices) (Zip code)
________ BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio__43219___________
(Name and address of agent for service)
Registrant's telephone number, including area code:_____614-470-8000____________
Date of fiscal year end:________12/31/04__________________
Date of reporting period:________6/30/04________________
Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
FINANCIAL REPORT
STI Classic Variable Trust
JUNE 30, 2004
STI Classic Variable Trust
Dear Valued STI Classic Variable Trust Shareholder:
The markets have been relatively "quiet" so far in 2004. Quiet of course is a
relative term when discussing the economy and the financial markets. The stock
market, as measured by the S&P 500 gained 3.4% on a total return basis in the
six months ended June 30, 2004, while the bond markets, as measured by the
Lehman Aggregate Bond Index, added a modest 0.15%. The gain in the equity market
was somewhat modest by historical standards and certainly paled in comparison to
the 15.1% return in the previous six calendar months. While the major market
statistics might suggest a somewhat sleepy, even benign market environment, we
believe the first half was, in many ways, one of transition for the economy,
policy, and the markets. I would like to take a few minutes to share our
perspective on some of the key events and pressures at work during this time,
and highlight some of the key forces that we believe could influence the economy
and the markets during the rest of this year.
As long-term investors are keenly aware, the markets are forever worrying about
something. A key concern through most of the past two quarters was the nagging
fear that the recovery was not sustainable. This was somewhat ironic, since the
expansion was already over two years old by the start of the 2004. The lack of
job growth was the primary culprit fueling that apprehension. One important
consequence of that worry was reluctance on the part of the Federal Reserve to
begin reversing its accommodative policy and raise the overnight fed funds rate
from its 46-year low.
Fortunately however, job growth increased significantly during the second
quarter, and the Labor Department revised up its estimates from previous weaker
periods. While job growth is primarily a reflection of economic strength, and
therefore a lagging indicator, it is an important confirming signal of strength
and sustainability, particularly to Washington officials in an election year. It
was not long after job growth accelerated that the Federal Reserve announced its
intention to gradually raise interest rates, which began on June 30 with a
quarter-point increase; 2 1/2 years into the current expansion. So a key
development over the past quarter was a transition from a more defensive,
accommodative policy to a more traditional counter-cyclical interest rate
policy.
Inflation also returned to the lexicon of market observers this year. While it
is very true that commodity price increases, particularly oil, were already up
sharply, this inflation pressure was viewed by many as being narrow in scope.
However, more recently, the headline inflation reports moved higher along a
broader front. This transition from "isolated" inflation pressures to more
general price increase, confirmed the need for a policy shift, giving the
markets a new, but more traditional set of worries; higher inflation and
interest rates.
In this environment, stocks continued to inch higher amid the shift in economic
and policy pressures, but the leadership was narrower. The pro-cyclical stocks,
such as technology and consumer discretionary, faded to the background while
more traditional industrials, consumer staples, and energy stocks outperformed.
From a style perspective, however, the value style continued to outperform the
growth style, and large-cap stocks (S&P 500) trailed small-cap stocks. The
S&P/Barra Value Index rose 4.2% in the first half of the year, while the Growth
Index gained only 2.7%, and the Russell 2000 small-cap index rose 6.8%, twice
the gain of the S&P 500. International stocks performed in line with domestic
indexes.
In the fixed-income markets, the transition pressures had a more direct, and
negative impact but it was concentrated more in the second quarter. The
anticipation of a change to a more restrictive Fed policy pushed bond yields
higher
1
during the quarter. The yield on the 10-year Treasury note rose by over 35 basis
points (0.35%) since the end of 2003 to close at 4.62% on June 30, the highest
level in two years and sharply above the 3.1% panic low a year ago. The effect
of the yield increase had the greatest negative impact on Treasury and
investment grade corporate securities, while the high yield and mortgage-backed
markets improved on a net basis.
Looking ahead to the rest of 2004, our outlook is generally positive for the
economy and the stock market. The news in the second quarter confirmed that the
current expansion is on reasonably solid footing. Job growth has increased,
providing an important offset to reduced interest rate and tax stimulus, and
corporate profits continued to exceed expectations. However, we believe the
vigor of economic growth could slow from the strong pace of 2003, as the
economic "tailwinds" recede (mortgage refinancing and tax cuts) and "headwinds"
build (higher energy prices, rising interest rates, lower productivity.)
Inflation may trend higher, though we do not foresee a sharp acceleration from
the current historically low level. Margin pressure could slow the strong growth
in corporate profits closer to historical averages, but we believe top line
growth should be firm.
The Federal Reserve, as expected, has adopted a more restrictive policy, and we
look for additional quarter-point rate increases in the second half of the year
as monetary policy moves back from "accommodative" to "neutral." However, if the
pace of growth moderates, the Fed is likely to retain its measured approach to
raising rates.
We believe the remainder of the year could be generally positive for equities,
and we continue to recommend a moderate overweight position in stocks within
portfolio allocations consistent with long-term investment goals. However, we
recognize that equities are fairly valued by many historical measures, and that
sharp rallies from this point will be more problematic. In this environment, we
believe high quality companies with strong sales growth, good cash flow, and
firm margins should begin to distance themselves from the rest of the market. In
fixed-income portfolios, the Fed's shift to higher rates at the end of the
second quarter marked the end of the secular bull market in bonds that began
over twenty years ago and a possible transition to rising yields. However, we
look for the Fed to raise rates gradually in the months ahead, and so recommend
a generally neutral duration for portfolios, emphasizing sectors that could
improve current yield in this low rate environment.
I want to take this opportunity to thank you again for investing in the STI
Classic Variable Trust. We value our relationship with you, and will continue to
strive to provide the highest levels of service, support, and performance to
help you reach your investment goals.
Sincerely,
/s/ Douglas S. Philips
Douglas S. Phillips, CFA
Chief Investment Officer
2
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004 (Unaudited)
CAPITAL APPRECIATION FUND
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
COMMON STOCK (99.3%)
CAPITAL GOODS (14.0%)
3M Co. 8,800 $ 792
Agilent Technologies, Inc. * 21,000 615
Danaher Corp. 11,800 612
Deere & Co. 13,300 933
Dover Corp. 10,600 446
Emerson Electric Co. 15,100 960
General Dynamics Corp. 8,300 824
Illinois Tool Works, Inc. 2,500 240
L3 Communications, Inc. 10,300 688
Northrop Grumman Corp. 17,200 924
Parker Hannifin Corp. 16,900 1,004
--------
8,038
--------
COMMUNICATION SERVICES (4.2%)
Cox Communications, Inc., Class A * 20,100 559
Tellabs, Inc. * 85,800 750
Time Warner, Inc. * 63,400 1,114
--------
2,423
--------
CONSUMER CYCLICALS (15.5%)
Bed Bath & Beyond, Inc. * 22,630 870
Costco Wholesale Corp. 14,900 612
Home Depot, Inc. 23,800 838
Kohl's Corp. * 7,300 309
Lowe's Cos., Inc. 15,800 830
Marriott International, Inc., Class
A 11,600 579
Staples, Inc. 19,500 572
Target Corp. 21,900 930
Tiffany & Co. 13,800 509
TJX Cos., Inc. 20,600 497
Walgreen Co. 29,000 1,050
Walt Disney Co. 52,000 1,324
--------
8,920
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
CONSUMER STAPLES (7.9%)
Avon Products, Inc. 34,400 $ 1,588
Gillette Co. 20,500 869
Kimberly-Clark Corp. 12,800 843
Procter & Gamble Co. 14,000 762
Wal-Mart Stores, Inc. 9,500 501
--------
4,563
--------
ENERGY (3.9%)
Anadarko Petroleum Corp. 11,600 680
Exxon Mobil Corp. 35,400 1,572
--------
2,252
--------
FINANCE (19.5%)
AFLAC, Inc. 14,000 571
American Express Co. 28,600 1,469
American International Group, Inc. 17,700 1,262
Bank of New York Co., Inc. 17,300 510
Chubb Corp. 13,400 914
Citigroup, Inc. 27,000 1,256
Goldman Sachs Group, Inc. 10,000 942
MGIC Investment Corp. 9,500 721
Morgan Stanley 11,000 580
State Street Corp. 22,000 1,079
Wells Fargo & Co. 17,300 990
XL Capital Ltd., Class A 5,800 438
Zions Bancorp 9,300 571
--------
11,303
--------
HEALTH CARE (11.3%)
Biomet, Inc. 27,000 1,200
Boston Scientific Corp. * 27,900 1,194
Johnson & Johnson 18,600 1,036
Pfizer, Inc. 46,300 1,588
Quest Diagnostics, Inc. 5,700 484
St. Jude Medical, Inc. * 13,000 983
--------
6,485
--------
SERVICES (1.6%)
United Parcel Service, Inc., Class
B 12,000 902
--------
</Table>
3
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
CAPITAL APPRECIATION FUND--CONCLUDED
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
TECHNOLOGY (19.8%)
Amdocs Ltd. * 28,600 $ 670
American Power Conversion Corp. 21,300 419
Analog Devices, Inc. 10,500 494
Applied Materials, Inc. * 53,500 1,050
CDW Corp. 7,200 459
Cisco Systems, Inc. * 23,800 564
Dell, Inc. * 13,800 494
EMC Corp. * 64,800 739
Intel Corp. 31,700 875
KLA-Tencor Corp. * 12,300 607
Lexmark International, Inc., Class
A * 9,100 878
Microchip Technology, Inc. 15,200 479
Microsoft Corp. 63,200 1,806
Oracle Corp. * 52,000 620
PeopleSoft, Inc.* 30,000 555
VERITAS Software Corp.* 25,600 709
--------
11,418
--------
TRANSPORTATION (1.6%)
Southwest Airlines Co. 53,800 902
--------
Total Common Stock
(Cost $50,570) 57,206
--------
MONEY MARKET FUND (0.8%)
Federated Prime Value Money Market
Fund 477,848 478
--------
Total Money Market Fund
(Cost $478) 478
--------
Total Investments (100.1%)
(Cost $51,048) $ 57,684
========
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Value
- ----------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.1%)
Investment Advisory Fees Payable $ (41)
Administration Fees Payable (5)
Custodian Fees Payable (2)
Trustee Fees Payable (1)
Other Assets and Liabilities, Net (9)
--------
Total Other Assets and Liabilities (58)
--------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 3,623,719 outstanding shares of
beneficial interest) 51,782
Accumulated net investment loss (62)
Accumulated net realized loss on investments
(730)
Net unrealized appreciation on investments 6,636
--------
Total Net Assets (100.0%) $ 57,626
========
Net Asset Value, Offering and
Redemption Price Per Share -- Trust
Shares $15.90
========
</Table>
* Non-income producing security.
The accompanying notes are an integral part of the financial statements.
4
- --------------------------------------------------------------------------------
(Unaudited)
GROWTH AND INCOME FUND
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
COMMON STOCK (98.9%)
BASIC MATERIALS (3.3%)
E. I. du Pont de Nemours and Co. 3,000 $ 133
International Paper Co. 2,000 89
Praxair, Inc. 3,500 140
--------
362
--------
CAPITAL GOODS (11.5%)
Boeing Co. (The) 800 41
Cooper Industries, Ltd., Class A 2,500 149
Emerson Electric Co. 2,000 127
General Electric Co. 7,000 226
Honeywell International, Inc. 5,000 183
Illinois Tool Works, Inc. 1,200 115
Rockwell Automation, Inc. 5,000 188
Textron, Inc. 1,500 89
United Technologies Corp. 1,500 137
--------
1,255
--------
COMMUNICATION SERVICES (4.0%)
ALLTEL Corp. 1,500 76
Verizon Communications, Inc. 6,500 235
Vodafone Group PLC ADR 5,500 122
--------
433
--------
CONSUMER CYCLICALS (9.0%)
Gannett Co., Inc. 1,500 127
Johnson Controls, Inc. 1,200 64
Jones Apparel Group, Inc. 4,000 158
Kohl's Corp. * 4,000 170
Lowe's Cos., Inc. 1,000 53
May Department Stores Co. (The) 5,000 137
Target Corp. 3,000 127
Walt Disney Co. (The) 6,000 153
--------
989
--------
CONSUMER STAPLES (9.2%)
Archer Daniels Midland Co. 6,500 109
Clorox Co. (The) 3,000 160
Colgate-Palmolive Co. 1,500 88
Gillette Co. (The) 700 30
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
CONSUMER STAPLES -- CONTINUED
H.J. Heinz Co. 825 $ 32
Kimberly-Clark Corp. 2,000 132
PepsiCo, Inc. 1,000 54
Sara Lee Corp. 6,000 138
SYSCO Corp. 1,000 36
Wal-Mart Stores, Inc. 2,000 106
Wm. Wrigley Jr. Co. 2,000 126
--------
1,011
--------
ENERGY (9.5%)
Anadarko Petroleum Corp. 3,000 176
Burlington Resources, Inc. 3,000 109
ChevronTexaco Corp. 1,500 141
ConocoPhillips 1,700 130
Exxon Mobil Corp. 5,000 221
Kerr-Mcgee Corp. 3,000 161
Schlumberger, Ltd. 1,600 102
--------
1,040
--------
FINANCE (23.7%)
American International Group, Inc. 2,000 143
Bank of America Corp. 3,000 253
Berkshire Hathaway, Inc., Class B * 60 177
Cincinnati Financial Corp. 3,675 160
Citigroup, Inc. 5,000 233
Fannie Mae 1,500 107
Fifth Third Bancorp 2,000 108
Goldman Sachs Group, Inc. (The) 1,300 122
Jefferson-Pilot Corp. 1,500 76
MGIC Investment Corp. 1,500 114
Morgan Stanley 2,000 106
PNC Financial Services Group, Inc.
(The) 3,000 159
Principal Financial Group, Inc. 6,000 209
Prudential Financial, Inc. 5,000 232
U.S. Bancorp 9,000 248
Wells Fargo & Co. 2,500 143
--------
2,590
--------
</Table>
5
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
GROWTH AND INCOME FUND--CONCLUDED
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
HEALTH CARE (9.1%)
Abbott Laboratories 2,000 $ 82
Anthem, Inc. * 1,500 134
Bristol-Myers Squibb Co. 7,000 171
C.R. Bard, Inc. 1,000 57
Express Scripts, Inc. * 1,000 79
Hospira, Inc. * 200 6
Johnson & Johnson 2,500 139
Medtronic, Inc. 3,000 146
Merck & Co., Inc. 1,000 48
Pfizer, Inc. 4,000 137
--------
999
--------
SERVICES (1.3%)
Cendant Corp. 6,000 147
--------
TECHNOLOGY (11.4%)
Computer Sciences Corp. * 2,500 116
First Data Corp. 4,000 177
Hewlett-Packard Co. 5,000 106
Intel Corp. 2,500 69
International Business Machines
Corp. 1,000 88
Microsoft Corp. 5,000 143
Nokia Corp. ADR 12,000 174
Storage Technology Corp. * 5,500 160
SunGard Data Systems, Inc. * 5,000 130
Texas Instruments, Inc. 3,500 85
--------
1,248
--------
TRANSPORTATION (2.7%)
Norfolk Southern Corp. 5,000 133
Ryder System, Inc. 4,000 160
--------
293
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
UTILITIES (4.2%)
American Electric Power Co., Inc. 6,500 $ 208
Exelon Corp. 4,000 133
Questar Corp. 3,000 116
--------
457
--------
Total Common Stock
(Cost $9,418) 10,824
--------
MONEY MARKET FUND (1.1%)
Federated Prime Value Money Market
Fund 118,979 119
--------
Total Money Market Fund
(Cost $119) 119
--------
Total Investments (100.00%)
(Cost $9,537) $ 10,943
========
OTHER ASSETS AND LIABILITIES (0.0%)
Administration Fees Payable (5)
Investment Advisory Fees Payable (3)
Other Assets and Liabilities, Net 13
--------
Total Other Assets and Liabilities 5
--------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 1,037,696 outstanding shares of
beneficial interest) 10,163
Undistributed net investment income 4
Accumulated net realized loss on investments
(625)
Net unrealized appreciation on investments 1,406
--------
Total Net Assets (100.0%) $ 10,948
========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Shares $10.55
========
</Table>
* Non-income producing security.
ADR -- American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
6
- --------------------------------------------------------------------------------
(Unaudited)
INTERNATIONAL EQUITY FUND
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
FOREIGN COMMON STOCK (99.6%)
AUSTRALIA (5.1%)
Australia & New Zealand Banking
Group Ltd. 1,510 $ 19
BHP Billiton Ltd. 3,400 30
Bluescope Steel Ltd. 5,900 28
Boral Ltd. 6,760 30
Insurance Australia Group Ltd. 10,100 35
News Corp. Ltd. (The) 1,197 11
Orica Ltd. 2,439 26
Origin Energy Ltd. 5,560 22
Pacific Brands Ltd. * 11,000 20
Publishing and Broadcasting Ltd. 3,900 35
Qantas Airways Ltd. 13,167 32
West Australian Newspapers Holdings
Ltd. (B) 2,800 13
Westpac Banking Corp. 2,400 29
--------
330
--------
BELGIUM (1.0%)
Delhaize Group 700 35
Fortis (B) 1,337 30
--------
65
--------
DENMARK (1.0%)
Danske Bank Aktieselskab 1,500 36
TDC A/S 800 26
--------
62
--------
FINLAND (1.7%)
Fortum Corp. 2,300 29
Nokia Corp. 3,925 57
Tietoenator Corp. 780 24
--------
110
--------
FRANCE (9.7%)
Alcatel * 2,000 31
Aventis (B) 677 51
AXA 1,100 24
BNP Paribas (B) 1,128 69
Compagnie De Saint-Gobain (B) 600 30
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
FRANCE -- CONTINUED
France Telecom SA 1,600 $ 42
Lafarge SA 443 40
Metropole Television SA 100 3
Pernod-Ricard 175 22
PSA Peugeot Citroen SA 605 34
Schneider Electric SA 350 24
Societe Generale 690 59
Suez 1,338 28
Thomson SA 538 11
Total SA 515 97
Vinci 300 30
Vivendi Universal SA * 1,300 36
--------
631
--------
GERMANY (7.4%)
Allianz AG 433 46
BASF AG 852 46
Bayer AG 600 17
Bayerische Motoren Werke AG 353 16
DaimlerChrysler AG 500 23
Deutsche Bank AG 531 42
Deutsche Post AG 1,600 35
Deutsche Telecom AG * 2,282 40
Dr. Ing. h.c. F. Porsche AG 46 31
E. ON AG 400 29
Infineon Technologies AG * 600 8
METRO AG 500 24
SAP AG 227 38
Schering AG 267 16
Siemens AG 986 70
--------
481
--------
HONG KONG (1.7%)
Bank of East Asia, Ltd. 5,800 17
BOC Hong Kong Holdings Ltd. 8,000 14
Cheung Kong Holdings Ltd. 4,000 29
CLP Holdings Ltd. 2,200 12
Esprit Holdings Ltd. 4,300 19
</Table>
7
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
INTERNATIONAL EQUITY FUND--CONTINUED
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
HONG KONG -- CONTINUED
Hang Lung Properties Ltd. 4,000 $ 5
Hutchison Whampoa Ltd. 2,447 17
--------
113
--------
IRELAND (0.9%)
Anglo Irish Bank Corp. PLC 2,294 36
CRH PLC 302 6
CRH PLC 806 17
--------
59
--------
ITALY (2.9%)
Eni SpA 2,548 50
IntesaBci SpA 7,151 28
Mediaset SpA 3,950 45
Saipem SpA 853 8
Telecom Italia SpA (B) 11,544 36
UniCredito Italiano SpA 4,503 22
--------
189
--------
JAPAN (23.0%)
Advantest Corp. 200 13
Amada America, Inc. 2,000 13
Asahi Breweries, Ltd. 2,600 29
Asahi Glass Co., Ltd. 2,000 21
Bank Of Fukuoka, Ltd. (The) 4,000 24
Bridgestone Corp. 1,000 19
Canon, Inc. 700 37
Daiwa Securities Group, Inc. 4,000 29
East Japan Railway Co. 4 22
Eisai Co., Ltd. 900 26
Fujitsu Ltd. 6,000 42
Hachijuni Bank, Ltd. 1,000 7
Hitachi Chemical Co., Ltd. 400 7
Hitachi, Ltd. 7,000 48
Honda Motor Co., Ltd. 502 24
Komatsu Ltd. 3,000 18
Kyocera Corp. 500 42
Kyushu Electric Power Co., Inc. 1,500 28
Marubeni Corp. * 7,000 17
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
JAPAN -- CONTINUED
Matsushita Electric Industrial Co.,
Ltd. 1,000 $ 14
Matsushita Electric Works, Ltd. 3,000 27
Mitsubishi Corp. 2,000 19
Mitsubishi Estate Company, Ltd. 1,000 12
Mitsubishi Tokyo Financial Group,
Inc. 5 46
Mitsui & Co., Ltd. 2,000 15
Mitsui Fudosan Co., Ltd. 2,000 24
Mitsui O.S.K. Lines, Ltd. 6,000 32
Mitsui Sumitomo Insurance Co., Ltd. 2,000 19
Mizuho Financial Group, Inc. 6 27
Murata Manufacturing Co., Ltd. 200 11
Nippon Steel Corp. 8,000 17
Nippon Telegraph and Telephone
Corp. 12 64
Nissan Motor Co., Ltd. 1,700 19
Nitto Denko Corp. 500 26
Nomura Holdings, Inc. 1,000 15
Nomura Research Institute, Ltd. 200 21
NTT DoCoMo, Inc. 9 16
Onward Kashiyama Co., Ltd. 1,000 16
ORIX Corp. 200 23
Ricoh Co., Ltd. 1,400 30
Rohm Co., Ltd. 200 24
Sammy Corp. 400 19
Sankyo Co., Ltd. 1,400 30
Sankyo Co., Ltd. Gunma 600 24
Sharp Corp. 1,000 16
Showa Shell Sekiyu K.K. 1,500 13
Sompo Japan Insurance, Inc. 1,000 10
Sony Corp. 700 26
Sumitomo Corp. 2,000 15
Sumitomo Mitsui Financial Group,
Inc. 3 21
Sumitomo Rubber Industries, Ltd. 2,000 18
Sumitomo Chemical Company, Ltd. 4,000 19
Takeda Chemical Industries, Ltd. 600 26
</Table>
8
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
JAPAN -- CONTINUED
TDK Corp. 200 $ 15
Teijin Ltd. 4,000 15
Tokyo Electric Power Co., Inc.
(The) 1,400 32
Tokyo Gas Co., Ltd. 5,000 18
Toppan Printing Co., Ltd. 1,000 11
Toray Industries, Inc. 5,000 24
Toyota Motor Corp. 2,713 111
West Japan Railway Co. 4 16
Yamada Denki Co. 400 15
Yamaha Motor Co., Ltd. 1,000 16
Yamato Transport Co., Ltd. 1,000 16
--------
1,509
--------
NETHERLANDS (4.5%)
ABN AMRO Holding NV 2,298 50
Akzo Nobel NV 943 35
ING Groep NV 1,913 45
Royal Dutch Petroleum Co. 840 43
Royal KPN NV 4,200 32
Royal Philips Electronics NV 2,596 70
Unilever NV 234 16
United Services Group NV 251 4
--------
295
--------
NEW ZEALAND (0.6%)
Fletcher Building Ltd. 12,731 37
--------
NORWAY (0.6%)
Tandberg ASA 600 6
Telenor ASA 4,500 32
--------
38
--------
SINGAPORE (1.0%)
DBS Group Holdings Ltd. 3,000 25
Fraser and Neave Ltd. 1,500 12
Neptune Orient Lines Ltd. 10,000 14
Singapore Telecommunications Ltd. 9,000 12
--------
63
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
SPAIN (4.4%)
Acciona, SA 100 $ 6
Altadis, SA 410 13
Endesa, SA 2,000 39
Gamesa Corporacion Tecnologica SA 900 13
Gestevision Telecinco SA * 165 2
Repsol YPF, SA 2,700 59
Santander Central Hispano SA 4,890 51
Sociedad General de Aguas de
Barcelona, SA, Class A 1,125 19
Telefonica, SA 4,857 72
Union Fenosa, SA 533 11
--------
285
--------
SWEDEN (3.6%)
AB Electrolux, Class B 1,000 19
Ainax AB 45 1
Autoliv, Inc. 591 25
Nordea Bank AB 7,700 55
Sandvik AB 633 22
Svenska Handelsbanken AB, Class A 1,400 28
Telefonaaktiebolaget LM Ericsson,
Class B * 19,800 59
Volvo AB, Class B 700 24
--------
233
--------
SWITZERLAND (6.8%)
Credit Suisse Group * 1,693 60
Nestle SA 280 75
Novartis AG 2,733 120
Roche Group 415 41
STMicroelectronics NV 595 13
UBS AG 1,118 79
Zurich Financial Services 333 53
--------
441
--------
UNITED KINGDOM (23.7%)
"Shell" Transport and Trading Co.,
PLC (The) 9,377 69
Alliance UniChem PLC 3,100 37
</Table>
9
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
INTERNATIONAL EQUITY FUND--CONCLUDED
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
UNITED KINGDOM -- CONTINUED
Aviva PLC 4,700 $ 48
Balfour Beatty PLC 7,129 34
Barclays PLC 7,500 64
BP PLC 18,915 168
British American Tobacco PLC 2,405 37
BT Group PLC 8,630 31
Burberry Ltd. 3,900 29
Centrica PLC 5,400 22
Dixons Group PLC 10,600 32
Galen Holdings PLC 1,400 18
George Wimpey PLC 7,351 49
GlaxoSmithKline PLC 5,964 122
HBOS PLC 6,600 82
HMV Group PLC 5,500 24
HSBC Holdings PLC 6,622 98
Kesa Electricals PLC 5,200 27
Legal & General Group PLC 17,000 29
mmO2 PLC * 16,900 28
Next PLC 1,600 41
Northern Rock PLC 2,900 38
Pennon Group PLC 1,700 24
Pilkington PLC 16,600 29
Royal Bank of Scotland Group PLC
(The) 2,248 65
SABMiller PLC 2,900 38
Sage Group PLC (The) 9,000 30
Tesco PLC 10,567 51
Vodafone Group PLC 49,218 108
Whitbread PLC 2,316 35
William Hill Organization Ltd. 4,522 45
--------
1,552
--------
Total Foreign Common Stock
(Cost $5,269) 6,493
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
SHORT-TERM INVESTMENT (3.3%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 213,256 $ 213
--------
Total Short-Term Investment
(Cost $213) 213
--------
Total Investments (102.9%)
(Cost $5,482) $ 6,706
========
OTHER ASSETS AND LIABILITIES (-2.9%)
Payable upon Return of Securities Loaned (213)
Receivable from Investment Adviser 4
Administration Fees Payable (6)
Other Assets and Liabilities, Net 28
--------
Total Other Assets and Liabilities (187)
--------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 668,744 outstanding shares of
beneficial interest) 8,418
Undistributed net investment income 140
Accumulated net realized loss on investments
(3,265)
Net unrealized appreciation on investments
and foreign currency transactions 1,226
--------
Total Net Assets (100.0%) $ 6,519
========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Shares $9.75
========
</Table>
* Non-income producing security.
(A) This security was purchased with cash collateral held from securities
lending (see Note 7 in Notes to Financial Statements).
(B) This security or a partial position of the security was on loan at June 30,
2004 (see Note 7 in Notes to Financial Statements). The total value of
securities on loan at June 30, 2004 was $199,237.
10
- --------------------------------------------------------------------------------
(Unaudited)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
At June 30, 2004, sector diversification of the Fund was as follows (unaudited):
<Table>
<Caption>
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (000)
- ---------------------- ---------- ------
FOREIGN COMMON STOCK
Banks 14.1% $ 918
Gas/Natural Gas 8.9 577
Drugs 6.9 451
Communication Services 6.5 424
Electric Products 5.0 323
Automotive 4.5 292
Insurance 4.4 287
Telephones & Telecommunications 3.8 249
Retail 3.8 245
Food, Beverage & Tobacco 3.7 241
Commercial Banks 3.0 197
Chemicals 2.4 157
Building & Construction 2.2 144
Financial Services 2.1 136
Concrete & Mineral Products 2.1 136
Electric Services 1.9 122
Miscellaneous Manufacturing 1.7 113
Printing & Publishing 1.6 105
Apparel/Textiles 1.6 104
Railroads 1.5 101
Services 1.5 100
Telephone 1.3 88
Entertainment 1.3 81
Glass Products 1.2 81
Real Estate 1.1 71
</Table>
<Table>
<Caption>
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (000)
- ---------------------- ---------- ------
FOREIGN COMMON STOCK -- CONTINUED
Diversified Manufacturing 1.1% $ 71
Energy 1.1 70
Computer Software 1.0 68
Machinery 1.0 68
Photographic Equipment & Supplies 1.0 67
Semiconductors 1.0 63
Water Treatment & Supply 0.8 52
Broadcasting 0.8 50
Steel & Steel Works 0.7 45
Rubber & Plastic 0.6 37
Air Transportation 0.5 32
Lumber & Wood Products 0.4 27
Medical & Medical Products 0.4 26
Information Technology 0.4 24
Engines & Turbines 0.3 19
Marine Transportation 0.2 14
Aircrafts & Parts 0.2 13
Employment Agencies 0.1 4
---- ------
TOTAL FOREIGN COMMON STOCK 99.6 6,493
---- ------
TOTAL INVESTMENTS 99.6 6,493
TOTAL OTHER ASSETS AND LIABILITIES 0.4 26
---- ------
TOTAL NET ASSETS 100% $6,519
==== ======
</Table>
The accompanying notes are an integral part of the financial statements.
11
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
MID-CAP EQUITY FUND
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
COMMON STOCK (98.1%)
BASIC MATERIALS (4.5%)
Ball Corp. 4,700 $ 339
Lennar Corp., Class A 3,000 134
Lubrizol Corp. (The) 3,820 140
NVR, Inc. * 240 116
--------
729
--------
CAPITAL GOODS (10.0%)
Acuity Brands, Inc. 3,220 87
American Axle & Manufacturing
Holdings, Inc. 4,400 160
Eaton Corp. 2,820 183
Freeport-McMoRan Copper & Gold,
Inc., Class B 1,590 53
M.D.C. Holdings, Inc. 2,000 127
Pitney Bowes, Inc. 6,080 269
Rockwell Collins, Inc. 7,590 253
Ryland Group, Inc. (The) 3,700 288
Textron, Inc. 3,380 201
--------
1,621
--------
COMMUNICATION SERVICES (1.1%)
Avaya, Inc. * 8,920 140
Western Wireless Corp., Class A * 1,300 38
--------
178
--------
COMPUTER SOFTWARE (1.2%)
Siebel Systems, Inc. * 6,930 74
VERITAS Software Corp. * 4,130 114
--------
188
--------
CONSUMER CYCLICALS (13.5%)
7-Eleven, Inc. * 6,000 107
Abercrombie & Fitch Co., Class A 5,500 213
Bed Bath & Beyond, Inc. * 3,030 117
Big 5 Sporting Goods Corp. * 3,400 89
Choice Hotels International, Inc. 4,800 241
Coach, Inc. * 2,000 90
Knight-Ridder, Inc. 1,800 130
Limited Brands, Inc. 2,530 47
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
CONSUMER CYCLICALS -- CONTINUED
Marvel Enterprises, Inc. * 1,525 $ 30
May Department Stores Co. (The) 7,600 209
McGraw-Hill Cos., Inc. (The) 2,300 176
New York Times Co. (The), Class A 2,060 92
RadioShack Corp. 2,410 69
Scholastic Corp. * 3,500 105
Sears, Roebuck and Co. 1,700 64
Staples, Inc. 3,700 108
TJX Cos., Inc. (The) 4,910 119
Xerox Corp. * 12,760 185
--------
2,191
--------
CONSUMER STAPLES (4.4%)
Archer Daniels Midland Co. 2,090 35
Dollar General Corp. 5,500 108
R.J. Reynolds Tobacco Holdings,
Inc. 4,450 300
YUM! Brands, Inc. 7,200 268
--------
711
--------
EDUCATIONAL SERVICES (0.3%)
Universal Technical Institute,
Inc. * 1,150 46
--------
ENERGY (5.3%)
Amerada Hess Corp. 3,560 282
Arch Coal, Inc. 1,700 62
Ashland, Inc. 4,400 232
Marathon Oil Corp. 7,660 290
--------
866
--------
FINANCE (23.4%)
Annaly Mortgage Management, Inc.
REIT (B) 7,020 119
Arch Capital Group Ltd. * 800 32
Bear Stearns Cos., Inc. (The) 560 47
Brandywine Realty Trust REIT 2,600 71
CIGNA Corp. 4,590 316
Comerica, Inc. 4,730 260
E*TRADE Financial Corp. * 6,790 76
Equity Office Properties Trust REIT 5,780 157
</Table>
12
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
FINANCE -- CONTINUED
First Citizens BancShares, Inc.,
Class A 1,400 $ 171
Hospitality Properties Trust REIT 6,200 262
Jefferies Group, Inc. 2,800 87
Legg Mason, Inc. 712 65
Lexington Corporate Properties
Trust REIT 5,150 103
Lincoln National Corp. 4,960 234
M&T Bank Corp. 910 79
MBIA, Inc. 1,100 63
PartnerRe Ltd. 2,800 159
PMI Group, Inc. (The) 3,270 142
Principal Financial Group, Inc. 3,490 121
Radian Group, Inc. 3,900 187
Senior Housing Properties Trust
REIT 4,151 70
Sovereign Bancorp, Inc. 3,730 82
St. Paul Travelers Cos., Inc. (The) 4,270 173
Student Loan Corp. (The) 2,200 300
Union Planters Corp. 2,600 78
UnionBanCal Corp. 1,800 102
Webster Financial Corp. 5,340 251
--------
3,807
--------
HEALTH CARE (7.6%)
AmerisourceBergen Corp. 1,670 100
Anthem, Inc. * 3,500 313
Coventry Health Care, Inc. * 1,830 89
Humana, Inc. * 5,080 86
ImClone Systems, Inc. * 1,700 146
Kinetic Concepts, Inc. * 900 45
Laboratory Corp. of America
Holdings * 2,680 106
Medco Health Solutions, Inc. * 2,820 106
Onyx Pharmaceuticals, Inc. * 1,104 47
PacifiCare Health Systems, Inc. * 1,520 59
Sepracor, Inc. * 2,500 132
--------
1,229
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
SEMICONDUCTORS (4.2%)
Advanced Micro Devices, Inc. * 2,900 $ 46
Altera Corp. * 3,815 85
Arrow Electronics, Inc. * 5,880 157
LSI Logic Corp. * 7,720 59
Molex, Inc. (B) 3,110 100
National Semiconductor Corp. * 4,700 103
Sanmina-SCI Corp. * 13,730 125
--------
675
--------
SERVICES (2.0%)
Deluxe Corp. 2,930 127
H&R Block, Inc. 3,020 145
Iron Mountain, Inc. * 1,000 48
--------
320
--------
TECHNOLOGY (11.1%)
Apple Computer, Inc. * 1,530 50
Avnet, Inc. * 5,500 125
BMC Software, Inc. * 3,140 58
Computer Associates International,
Inc. 3,260 91
Corning, Inc. * 10,700 140
Electronic Arts, Inc. * 5,200 284
Electronic Data Systems Corp. 2,750 53
International Game Technology 2,500 97
Intuit, Inc. * 3,320 128
Monsanto Co. 7,820 300
MTC Technologies, Inc. * 1,540 40
Network Associates, Inc. * 1,830 33
Novellus Systems, Inc. * 4,150 130
Storage Technology Corp. * 2,510 73
SunGard Data Systems, Inc. * 2,100 55
Symantec Corp. * 3,160 138
--------
1,795
--------
TRANSPORTATION (2.1%)
Ryder System, Inc. 3,600 144
Southwest Airlines Co. 12,120 204
--------
348
--------
</Table>
13
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
MID-CAP EQUITY FUND--CONCLUDED
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ----------------------------------------------------------
UTILITIES (7.4%)
Citizens Communications Co. * 6,810 $ 82
Edison International 4,530 116
Equitable Resources, Inc. 6,600 342
Northeast Utilities 12,400 241
UGI Corp. 10,100 324
Xcel Energy, Inc. 6,020 101
--------
1,206
--------
Total Common Stock
(Cost $13,722) 15,910
--------
SHORT-TERM INVESTMENT (0.9%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 151,250 151
--------
Total Short-Term Investment
(Cost $151) 151
--------
MONEY MARKET FUNDS (0.6%)
Federated Prime Money Market
Obligations 32,823 33
Federated Prime Value Money Market
Fund 63,080 63
--------
Total Money Market Funds
(Cost $96) 96
--------
Total Investments (99.6%)
(Cost $13,969) $ 16,157
========
OTHER ASSETS AND LIABILITIES (0.4%)
Payable upon Return of Securities Loaned (151)
Investment Advisory Fees Payable (8)
Administration Fees Payable (5)
Custodian Fees Payable (1)
Other Assets and Liabilities, Net 229
--------
Total Other Assets and Liabilities 64
--------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------
(Amounts in thousands, except shares) Value
- ----------------------------------------------------------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 1,535,888 outstanding shares of
beneficial interest) $ 17,080
Accumulated net investment loss (4)
Accumulated net realized loss on investments
(3,043)
Net unrealized appreciation on investments 2,188
--------
Total Net Assets (100.0%) $ 16,221
========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Shares $10.56
========
</Table>
* Non-income producing security
REIT -- Real Estate Investment Trust
(A) This security was purchased with cash collateral held from securities
lending (see Note 7 in Notes to Financial Statements).
(B) This security or a partial position of the security was on loan at June 30,
2004 (see Note 7 in Notes to Financial Statements). The total value of
securities on loan at June 30, 2004 was $147,408.
The accompanying notes are an integral part of the financial statements.
14
- --------------------------------------------------------------------------------
(Unaudited)
SMALL CAP VALUE EQUITY FUND
<Table>
<Caption>
- ------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------
COMMON STOCK (94.0%)
BASIC MATERIALS (5.1%)
Agnico-Eagle Mines Ltd. 15,100 $ 199
Airgas, Inc. 15,400 368
Companhia Siderurgica Nacional ADR 7,200 88
Sappi Ltd. ADR 13,200 203
Sociedad Quimica
y Minera de Chile SA ADR 2,200 90
United States Steel Corp. 5,500 193
--------
1,141
--------
CAPITAL GOODS (17.3%)
Baldor Electric Co. 9,100 212
BorgWarner, Inc. 7,600 333
Briggs & Stratton Corp. (B) 2,900 256
Cummins, Inc. 6,200 387
Embraer-Empresa Brasileira de
Aeronautica SA ADR (B) 12,413 354
Harsco Corp. 4,700 221
Lennox International, Inc. 8,014 145
LSI Industries, Inc. 14,962 172
Makita Corp. ADR 19,800 303
Oshkosh Truck Corp. 3,900 224
Quixote Corp. 10,400 209
Snap-On, Inc. 8,100 272
Tecumseh Products Co., Class A 2,400 99
Tenaris SA ADR 2,952 97
Valmont Industries, Inc. 10,100 231
Valspar Corp. (The) 6,500 328
--------
3,843
--------
CONSUMER CYCLICALS (16.1%)
Bassett Furniture Industries, Inc. 6,400 139
Benetton Group SpA ADR 12,200 279
Blyth, Inc. 4,700 162
CBRL Group, Inc. 10,300 318
Fairmont Hotels & Resorts, Inc. 8,500 229
Grupo Elektra, SA de CV ADR 7,400 175
Intrawest Corp. 14,200 226
</Table>
<Table>
<Caption>
- ------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------
CONSUMER CYCLICALS -- CONTINUED
John H. Harland Co. 7,000 $ 205
John Wiley & Sons, Inc., Class A 6,300 202
Lithia Motors, Inc., Class A 8,900 221
Media General, Inc., Class A 3,200 206
Movado Group, Inc. 11,000 190
Natuzzi SpA ADR 8,400 90
Nautilus Group, Inc. (The) (B) 12,500 244
Pier 1 Imports, Inc. 13,300 235
Sturm, Ruger & Co., Inc. 5,500 67
United Auto Group, Inc. 8,700 267
Winnebago Industries, Inc. 4,600 171
--------
3,626
--------
CONSUMER STAPLES (3.8%)
Adolph Coors Co., Class B 3,000 217
Church & Dwight Co., Inc. 7,500 344
J.M. Smucker Co. (The) 6,175 283
--------
844
--------
ENERGY (3.0%)
Arch Coal, Inc. 7,000 256
Peabody Energy Corp. 7,200 403
--------
659
--------
FINANCE (16.7%)
American Financial Group, Inc. 6,200 190
Banner Corp. 3,500 102
City National Corp. 3,500 230
Colonial BancGroup, Inc. (The) 11,800 214
F.N.B. Corp. (B) 4,509 92
FactSet Research Systems, Inc. (B) 7,700 364
First National Bancshares, Inc. (B) 7,219 137
Glacier Bancorp, Inc. 5,738 162
HCC Insurance Holdings, Inc. 8,100 271
Horizon Financial Corp. 7,256 144
Hub International Ltd. 19,400 369
Jefferies Group, Inc. 7,400 229
PXRE Group Ltd. 5,300 134
Scottish Re Group Ltd. (B) 5,400 126
</Table>
15
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
SMALL CAP VALUE EQUITY FUND--CONCLUDED
<Table>
<Caption>
- ------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------
FINANCE -- CONTINUED
Seacoast Banking Corp. of Florida 6,710 $ 140
StanCorp Financial Group, Inc. 5,600 374
Washington Federal, Inc. (B) 5,787 139
West Coast Bancorp (B) 7,076 152
Wilmington Trust Corp. 4,800 179
--------
3,748
--------
HEALTH CARE (8.7%)
Cambrex Corp. 12,200 308
Cooper Cos., Inc. (The) 12,100 765
Invacare Corp. 4,700 210
Mentor Corp. 12,100 415
Perrigo Co. 13,200 250
--------
1,948
--------
SERVICES (6.9%)
ABM Industries, Inc. 10,300 201
Brink's Co. (The) 18,300 626
Chemed Corp. 4,200 204
Reynolds and Reynolds Co. (The),
Class A 22,300 516
--------
1,547
--------
TECHNOLOGY (11.9%)
AutoDesk, Inc. 22,400 959
Fair Issac Corp. 5,600 187
Harris Corp. 12,777 648
Helix Technology Corp. 9,100 194
Keithley Instruments, Inc. 7,700 171
Nam Tai Electronics, Inc. 12,800 275
Premier Farnell PLC ADR 23,500 215
--------
2,649
--------
</Table>
<Table>
<Caption>
- ------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------
TRANSPORTATION (3.1%)
CHC Helicopter Corp., Class A 11,700 $ 344
CP Ships Ltd. (B) 19,200 342
--------
686
--------
UTILITIES (1.4%)
ALLETE, Inc. 9,246 308
--------
Total Common Stock
(Cost $15,048) 20,999
--------
SHORT-TERM INVESTMENT (4.7%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 1,046,112 1,046
--------
Total Short-Term Investment
(Cost $1,046) 1,046
--------
MONEY MARKET FUNDS (6.1%)
Federated Prime Money Market
Obligations 293,710 294
Federated Prime Value Money Market
Fund 1,062,810 1,063
--------
Total Money Market Funds
(Cost $1,357) 1,357
--------
Total Investments (104.8%)
(Cost $17,451) $ 23,402
========
OTHER ASSETS AND LIABILITIES (-4.8%)
Payable upon Return of Securities Loaned (1,046)
Investment Advisory Fees Payable (13)
Administration Fees Payable (5)
Custodian Fees Payable (1)
--------
Total Other Assets and Liabilities (1,065)
--------
</Table>
16
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
<Caption>
- ------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 1,382,405 outstanding shares of
beneficial interest) $ 14,907
Undistributed net investment income 6
Accumulated net realized gain on investments
1,473
Net unrealized appreciation on investments 5,951
--------
Total Net Assets (100.0%) $ 22,337
========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Shares $16.16
========
</Table>
ADR -- American Depositary Receipt
(A) This security was purchased with cash collateral held from securities
lending (see Note 7 in Notes to Financial Statements).
(B) This security or a partial position of the security was on loan at June 30,
2004 (see Note 7 in Notes to Financial Statements). The total value of
securities on loan at June 30, 2004 was $1,029,218.
The accompanying notes are an integral part of the financial statements.
17
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
VALUE INCOME STOCK FUND
<Table>
<Caption>
- -------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- -------------------------------------------------------------
COMMON STOCK (96.8%)
BASIC MATERIALS (10.3%)
Air Products and Chemicals, Inc. 13,100 $ 687
Alcoa, Inc. 21,250 702
Boise Cascade Corp. 6,250 235
Dow Chemical Co. (The) 13,850 564
E. I. du Pont de Nemours and Co. 15,800 702
International Paper Co. 18,250 816
PPG Industries, Inc. 7,400 462
Rohm and Haas Co. 10,900 453
---------
4,621
---------
CAPITAL GOODS (14.0%)
American Power Conversion Corp. 18,350 361
Cintas Corp. 11,100 529
Emerson Electric Co. 10,800 686
General Electric Co. 27,800 901
Honeywell International, Inc. 18,000 659
Lockheed Martin Corp. 15,000 781
Pall Corp. 13,634 357
Parker Hannifin Corp. 8,000 476
Pitney Bowes, Inc. 9,750 431
Rockwell Automation, Inc. 9,691 364
Rockwell Collins, Inc. 10,400 347
Teleflex, Inc. 7,200 361
---------
6,253
---------
COMMUNICATION SERVICES (5.4%)
ALLTEL Corp. 9,000 456
CenturyTel, Inc. 11,150 335
SBC Communications, Inc. 31,600 766
Verizon Communications, Inc. 23,490 850
---------
2,407
---------
CONSUMER CYCLICALS (9.8%)
Gannett Co., Inc. 6,900 585
Leggett & Platt, Inc. 12,850 343
Masco Corp. 14,650 457
Mattel, Inc. 24,950 455
</Table>
<Table>
<Caption>
- -------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- -------------------------------------------------------------
CONSUMER CYCLICALS -- CONTINUED
May Department Stores Co. (The) 15,600 $ 429
McGraw-Hill Cos., Inc. (The) 6,100 467
Outback Steakhouse, Inc. 7,750 321
Pier 1 Imports, Inc. 17,400 308
Viacom, Inc., Class B 17,300 618
Walt Disney Co. (The) 15,700 400
---------
4,383
---------
CONSUMER STAPLES (8.6%)
Clorox Co. (The) 8,400 452
Colgate-Palmolive Co. 11,450 668
Dollar General Corp. 24,100 471
General Mills, Inc. 10,450 497
H.J. Heinz Co. 11,700 459
Kimberly-Clark Corp. 6,650 438
PepsiCo, Inc. 8,700 469
Wal-Mart Stores, Inc. 7,800 412
---------
3,866
---------
ENERGY (8.1%)
Baker Hughes, Inc. 12,850 484
BP PLC ADR 12,100 648
Exxon Mobil Corp. 20,700 920
GlobalSantaFe Corp. 17,150 454
Royal Dutch Petroleum Co. ADR 13,100 677
Unocal Corp. 11,900 452
---------
3,635
---------
FINANCE (25.0%)
A. G. Edwards, Inc. 12,200 415
Alliance Capital Management Holding
LP 4,328 147
Allstate Corp. (The) 10,400 484
American Express Co. 6,550 337
American International Group, Inc. 4,505 321
Astoria Financial Corp. 6,050 221
Bank of America Corp. 10,300 872
Bank of New York Co., Inc. (The) 15,000 442
</Table>
18
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
<Caption>
- -------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- -------------------------------------------------------------
FINANCE -- CONTINUED
Citigroup, Inc. 17,700 $ 823
Comerica, Inc. 6,120 336
FirstMerit Corp. 8,894 235
Goldman Sachs Group, Inc. (The) 4,950 466
Huntington Bancshares, Inc. 14,850 340
KeyCorp 11,200 335
Lehman Brothers Holdings, Inc. 9,500 715
Marsh & McLennan Cos., Inc. 9,900 449
Mellon Financial Corp. 22,000 645
Merrill Lynch & Co., Inc. 10,600 572
MetLife, Inc. 9,250 332
National City Corp. 9,550 334
Nationwide Financial Services,
Inc., Class A 9,192 346
Provident Financial Services, Inc. 12,900 226
Regions Financial Corp. 9,097 332
Safeco Corp. 10,000 440
South Financial Group, Inc. (The) 8,051 228
Wachovia Corp. 17,300 770
---------
11,163
---------
HEALTH CARE (6.7%)
Abbott Laboratories 15,700 640
Health Management Associates, Inc.,
Class A 15,450 346
Johnson & Johnson 11,800 657
Pfizer, Inc. 21,750 747
Wyeth 16,800 607
---------
2,997
---------
SEMICONDUCTORS (0.8%)
Intersil Corp., Class A 16,700 362
---------
TECHNOLOGY (5.6%)
Automatic Data Processing, Inc. 7,850 329
Diebold, Inc. 6,700 354
</Table>
<Table>
<Caption>
- -------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- -------------------------------------------------------------
TECHNOLOGY -- CONTINUED
Harris Corp. 6,900 $ 350
Hewlett-Packard Co. 20,700 437
Microsoft Corp. 17,100 488
Nokia Corp. ADR 23,700 345
Royal Philips Electronics NV ADR 7,700 209
---------
2,512
---------
TRANSPORTATION (0.8%)
Norfolk Southern Corp. 13,200 350
---------
UTILITIES (1.7%)
FPL Group, Inc. 6,800 435
Progress Energy, Inc. 7,650 337
---------
772
---------
Total Common Stock
(Cost $38,113) 43,321
---------
MONEY MARKET FUND (2.9%)
Federated Prime Value Money Market
Fund 1,318,592 1,319
---------
Total Money Market Fund
(Cost $1,319) 1,319
---------
Total Investments (99.7%)
(Cost $39,432) $ 44,640
=========
OTHER ASSETS AND LIABILITIES (0.3%)
Investment Advisory Fees Payable (24)
Administration Fees Payable (5)
Custodian Fees Payable (2)
Trustee Fees Payable (1)
Other Assets and Liabilities, Net 175
---------
Total Other Assets and Liabilities 143
---------
</Table>
19
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
VALUE INCOME STOCK FUND--CONCLUDED
<Table>
<Caption>
- -------------------------------------------------------------
(Amounts in thousands, except shares) Value
- -------------------------------------------------------------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 3,389,952 outstanding shares of
beneficial interest) $ 53,134
Undistributed net investment income 9
Accumulated net realized loss on investments (13,568)
Net unrealized appreciation on investments 5,208
---------
Total Net Assets (100.0%) $ 44,783
=========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Shares $13.21
=========
</Table>
ADR -- American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
20
- --------------------------------------------------------------------------------
(Unaudited)
INVESTMENT GRADE BOND FUND
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
CORPORATE OBLIGATIONS (54.0%)
AUTOMOTIVE (1.6%)
DaimlerChrysler AG,
4.750%, 01/15/08 95 $ 96
Ford Motor Co.,
7.450%, 07/16/31 100 95
General Motors Corp.,
8.375%, 07/15/33 100 106
--------
297
--------
BANKS (5.8%)
Bank One Corp.,
5.500%, 03/26/07 90 95
Bank of America,
6.500%, 03/15/06 275 290
NB Capital Corp.,
8.250%, 04/15/27 200 222
Wells Fargo & Co.,
3.500%, 04/04/08 285 281
Wells Fargo & Co. Capital I,
7.960%, 12/15/26 150 167
--------
1,055
--------
BROADCASTING (2.7%)
British Sky Broadcasting Group PLC,
8.200%, 07/15/09 80 92
Comcast Corp.,
6.500%, 01/15/15 85 88
Cox Communications, Inc.,
7.125%, 10/01/12 90 99
Liberty Media Corp.,
3.500%, 09/25/06 115 114
Univision Communications, Inc.,
3.500%, 10/15/07 105 104
--------
497
--------
</Table>
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
FINANCE (13.9%)
Boeing Capital Corp.,
6.500%, 02/15/12 170 $ 183
CIT Group, Inc.,
4.125%, 02/21/06 275 280
CitiCorp Capital I,
7.933%, 02/15/27 175 191
General Electric Capital Corp.,
3.500%, 05/01/08 375 370
Golden West Financial Corp.,
4.125%, 08/15/07 100 101
Household Financial Corp.,
5.750%, 01/30/07 185 194
International Lease Finance Corp.,
3.750%, 08/01/07 295 294
MBNA America Bank,
5.375%, 01/15/08 85 89
National Rural Utilities
Cooperative Finance Corp.,
3.000%, 02/15/06 275 275
Prudential Financial, Inc.,
4.750%, 04/01/14 195 182
Textron Financial Corp., Series E,
MTN,
2.750%, 06/01/06 80 79
Washington Mutual Financial,
8.250%, 06/15/05 180 189
Washington Mutual Financial,
4.625%, 04/01/14 95 87
--------
2,514
--------
FOOD, BEVERAGE & TOBACCO (2.2%)
Albertson's, Inc.,
7.500%, 02/15/11 80 90
Kraft Foods, Inc.,
5.250%, 10/01/13 110 107
</Table>
21
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
INVESTMENT GRADE BOND FUND--CONTINUED
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- CONTINUED
Kroger Co., (The),
7.800%, 08/15/07 90 $ 100
Safeway, Inc.,
6.150%, 03/01/06 105 110
--------
407
--------
INDUSTRIAL (9.7%)
Alcan, Inc.,
6.125%, 12/15/33 200 194
Anadarko Petroleum Corp.,
3.250%, 05/01/08 115 112
AOL Time Warner, Inc.,
6.750%, 04/15/11 85 92
Computer Sciences Corp.,
7.500%, 08/08/05 185 194
Conoco, Inc.,
6.950%, 04/15/29 200 219
Devon Financing Corp.,
6.875%, 09/30/11 80 87
First Data Corp.,
3.375%, 08/01/08 130 127
International Paper Co.,
6.750%, 09/01/11 95 103
Kerr-McGee Corp.,
5.875%, 09/15/06 90 94
Masco Corp.,
5.875%, 07/15/12 100 104
Petroleos Mexicanos,
9.250%, 03/30/18 100 111
Westinghouse Electric Co. LLC,
7.875%, 09/01/23 100 116
Weyerhaeuser Co.,
7.950%, 03/15/25 100 112
Wyeth,
6.500%, 02/01/34 95 90
--------
1,755
--------
</Table>
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
INSURANCE (1.3%)
Fund American,
5.875%, 05/15/13 95 $ 95
Metlife, Inc.,
3.911%, 05/15/05 35 35
Safeco Corp.,
6.875%, 07/15/07 90 98
--------
228
--------
INVESTMENT BANKERS/BROKER DEALERS (7.7%)
Bear, Stearns & Co. Inc.,
4.000%, 01/31/08 280 279
Citigroup Global Markets,
6.500%, 02/15/08 200 217
Goldman Sachs Capital I,
6.345%, 02/15/34 280 263
JP Morgan Chase & Co.,
5.250%, 05/30/07 180 188
Merrill Lynch & Co., Inc., Series
B, MTN,
3.375%, 09/14/07 285 282
Morgan Stanley,
3.625%, 04/01/08 185 182
--------
1,411
--------
REAL ESTATE (1.1%)
EOP Operating LP,
8.375%, 03/15/06 90 98
Simon Property Group LP,
6.375%, 11/15/07 90 96
--------
194
--------
RETAIL (0.6%)
May Department Stores Co., (The),
7.450%, 09/15/11 90 101
--------
</Table>
22
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS (3.8%)
British Telecom PLC,
7.875%, 12/15/05 45 $ 48
Deutsche Telekom AG,
8.750%, 06/15/30 80 97
Sprint Capital Corp.,
7.625%, 01/30/11 90 99
U.S. Cellular Corp.,
6.700%, 12/15/33 95 90
Verizon Global Funding,
7.250%, 12/01/10 245 275
Verizon Global Funding,
7.750%, 12/01/30 80 90
--------
699
--------
TRANSPORTATION (1.1%)
Norfolk Southern Corp.,
7.800%, 05/15/27 100 116
Union Pacific Corp.,
5.750%, 10/15/07 85 89
--------
205
--------
UTILITIES (2.5%)
Alabama Power Co., Series X,
3.125%, 05/01/08 75 73
Carolina Power & Light Co.,
6.500%, 07/15/12 100 107
Pacific Gas & Electric Co.,
6.050%, 03/01/34 100 94
PacifiCorp,
6.900%, 11/15/11 75 84
Southern California Edison Co.,
8.000%, 02/15/07 90 99
--------
457
--------
Total Corporate Obligations
(Cost $9,930) 9,820
--------
</Table>
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (11.0%)
U.S. Treasury Bonds
6.250%, 08/15/23 620 $ 687
5.375%, 02/15/31 (B) 1,040 1,048
U.S. Treasury Note
4.375%, 08/15/12 260 259
--------
Total U.S. Treasury Obligations
(Cost $2,025) 1,994
--------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (15.9%)
FHLMC
5.250%, 01/15/06 215 223
3.875%, 01/12/09 200 197
5.875%, 03/21/11 365 384
5.200%, 03/05/19 210 197
FNMA
6.000%, 09/01/17 176 183
4.500%, 06/01/18 402 394
6.500%, 07/01/32 90 94
6.500%, 12/01/32 181 189
5.000%, 06/01/33 609 589
GNMA
8.500%, 04/15/31 114 125
8.000%, 08/15/31 154 169
8.000%, 09/15/31 143 157
--------
Total U.S. Government Mortgage-Backed Obligations
(Cost $2,927) 2,901
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.6%)
FHLB
2.625%, 05/15/07 385 376
SLMA
3.625%, 03/17/08 285 281
--------
Total U.S. Government Agency Obligations
(Cost $663) 657
--------
</Table>
23
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
INVESTMENT GRADE BOND FUND--CONCLUDED
<Table>
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Principal Amount Value
- ------------------------------------------------------------------
ASSET-BACKED OBLIGATIONS (6.8%)
Capital Auto Receivables Asset
Trust, Series 2002-4, Class A4,
2.640%, 03/17/08 200 $ 199
Citibank Credit Card Issuance
Trust, Series 2004-A1, Class A1,
2.550%, 01/20/09 405 397
GE Capital Commercial Mortgage
Corp., Series 2002-1A, Class A3,
6.269%, 12/10/35 235 252
Harley-Davidson Motorcycle Trust,
Series 2002-2, Class A2,
3.090%, 06/15/10 110 111
JPMorgan Chase Commercial Mortgage
Securities, Series 2004-CB8,
Class A4,
4.404%, 01/12/39 295 274
--------
Total Asset-Backed Obligations
(Cost $1,247) 1,233
--------
FOREIGN GOVERNMENT DEBT SECURITIES (2.0%)
CANADA (1.5%)
Province of Quebec, Series NN,
7.125%, 02/09/24 240 276
--------
MEXICO (0.5%)
United Mexican States,
4.625%, 10/08/08 95 94
--------
Total Foreign Government Debt Securities
(Cost $381) 370
--------
<Caption>
- ------------------------------------------------------------------
(Amounts in thousands, except shares) Shares Value
- ------------------------------------------------------------------
SHORT-TERM INVESTMENT (5.7%)
Boston Global Investment
Trust -- Enhanced Portfolio (A) 1,035,000 $ 1,035
--------
Total Short-Term Investment
(Cost $1,035) 1,035
--------
MONEY MARKET FUNDS (5.4%)
Federated Prime Money Market
Obligations 136,597 137
Federated Prime Value Money Market
Fund 854,556 854
--------
Total Money Market Funds
(Cost $991) 991
--------
Total Investments (104.4%)
(Cost $19,199) $ 19,001
--------
OTHER ASSETS AND LIABILITIES (-4.4%)
Payable upon Return of Securities Loaned (1,035)
Administration Fees Payable (5)
Investment Advisory Fees Payable (4)
Custodian Fees Payable (1)
Other Assets and Liabilities, Net 254
--------
Total Other Assets and Liabilities (791)
--------
</Table>
24
- --------------------------------------------------------------------------------
(Unaudited)
<Table>
- --------------------------------------------------------------
(Amounts in thousands, except
shares) Value
- --------------------------------------------------------------
NET ASSETS:
Paid in Capital -- Trust Shares
(unlimited authorization -- no par value)
based on 1,814,398 outstanding shares of
beneficial interest) $ 18,784
Accumulated net investment loss (11)
Accumulated net realized loss on investments (365)
Net unrealized depreciation on investments (198)
--------
Total Net Assets (100.0%) $ 18,210
========
Net Asset Value, Offering and Redemption Price Per
Share -- Trust Shares $10.04
========
</Table>
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
SLMA -- Student Loan Marketing Association
(A) This security was purchased with cash collateral held from securities
lending (see Note 7 in Notes to Financial Statements).
(B) This security or a partial position of the security was on loan at June 30,
2004 (see Note 7 in Notes to Financial Statements). The total value of
securities on loan at June 30, 2004 was $1,008,555.
The accompanying notes are an integral part of the financial statements.
25
STATEMENTS OF OPERATIONS (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST For the Six Month Period Ended June 30, 2004
(Unaudited)
<Table>
<Caption>
Small Cap Value
Capital Growth International Mid-Cap Value Income Investment
Appreciation and Income Equity Equity Equity Stock Grade
Fund Fund Fund Fund Fund Fund Bond Fund
------------ ---------- ------------- ------- --------- ------- ----------
Investment Income:
Dividend Income................ $ 273 $ 95 $ 112 $ 138 $ 174 $ 504 $ 2
Interest Income................ -- -- -- -- -- -- 405
Income from Securities
Lending...................... 2 -- 1 1 3 1 2
Less: Foreign Taxes Withheld... -- -- (14) -- (5) (4) --
------- ---- ----- ------ ------ ------- -----
Total Investment Income........ 275 95 99 139 172 501 409
------- ---- ----- ------ ------ ------- -----
Expenses:
Investment Advisory Fees....... 337 46 42 93 121 181 71
Administration Fees............ 31 31 37 31 31 31 31
Custodian Fees................. 13 2 41 4 5 10 4
Professional Fees.............. 26 5 2 7 9 20 8
Transfer Agent Fees and
Out-of-Pocket Expenses....... 13 2 1 4 5 10 4
Printing Fees.................. 8 1 1 2 3 6 2
Trustee Fees................... 4 1 1 1 1 3 1
Other Fees..................... 3 1 6 1 1 3 2
------- ---- ----- ------ ------ ------- -----
Total Expenses................. 435 89 131 143 176 264 123
Less: Investment Advisory Fees
Waived................... (98) (28) (42) (50) (50) (49) (51)
Reimbursement by
Investment Adviser....... -- -- (35) -- -- -- --
------- ---- ----- ------ ------ ------- -----
Net Expenses................... 337 61 54 93 126 215 72
------- ---- ----- ------ ------ ------- -----
Net Investment Income (Loss)... (62) 34 45 46 46 286 337
------- ---- ----- ------ ------ ------- -----
Net Realized and Unrealized Gain
(Loss) on Investments and
Foreign Currency:
Net Realized Gain on
Securities Sold............ 6,169 255 427 1,055 1,936 3,665 179
Net Realized Gain on Foreign
Currency Transactions...... -- -- 2 -- -- -- --
Net Change in Unrealized
Depreciation on Foreign
Currency and Translation of
Other Assets and
Liabilities in Foreign
Currency................... -- -- (1) -- -- -- --
Net Change in Unrealized
Appreciation (Depreciation)
on Investments............. (4,267) 174 (240) (555) (63) (1,517) (599)
------- ---- ----- ------ ------ ------- -----
Total Net Realized and
Unrealized Gain (Loss) on
Investments and Foreign
Currency..................... 1,902 429 188 500 1,873 2,148 (420)
------- ---- ----- ------ ------ ------- -----
Net Increase (Decrease) in Net
Assets from Operations....... $ 1,840 $463 $ 233 $ 546 $1,919 $ 2,434 $ (83)
======= ==== ===== ====== ====== ======= =====
</Table>
Amounts designated as "--" are $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
26
(This page intentionally left blank)
27
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST For the Six Month Period Ended June 30, 2004
(Unaudited)
and the Year Ended December 31, 2003
<Table>
<Caption>
Capital Growth and
Appreciation Fund Income Fund
------------------------ ------------------------
01/01/04- 01/01/03- 01/01/04- 01/01/03-
06/30/04 12/31/03 06/30/04 12/31/03
--------- --------- --------- ---------
Operations:
Net Investment Income (Loss)........................... $ (62) $ (114) $ 34 $ 55
Net Realized Gain (Loss) on Securities Sold and Foreign
Currency Transactions................................ 6,169 1,824 255 (122)
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.......................................... (4,267) 7,612 174 1,681
------- -------- ------- ------
Net Increase (Decrease) in Net Assets from
Operations........................................... 1,840 9,322 463 1,614
------- -------- ------- ------
Dividends to Shareholders:
Net Investment Income.................................. -- -- (30) (55)
------- -------- ------- ------
Capital Transactions:
Proceeds from Shares Issued............................ 2,599 6,106 1,978 3,881
Reinvestment of Cash Distributions..................... -- -- 30 55
Cost of Shares Redeemed................................ (6,180) (12,779) (691) (651)
------- -------- ------- ------
Increase (Decrease) in Net Assets from Capital
Transactions......................................... (3,581) (6,673) 1,317 3,285
------- -------- ------- ------
Total Increase (Decrease) in Net Assets................ (1,741) 2,649 1,750 4,844
------- -------- ------- ------
Net Assets:
Beginning of Period.................................... 59,367 56,718 9,198 4,354
------- -------- ------- ------
End of Period.......................................... $57,626 $ 59,367 $10,948 $9,198
======= ======== ======= ======
Accumulated Net Investment Income/(Loss)................. $ (62) $ -- $ 4 $ --
======= ======== ======= ======
Shares Issued and Redeemed:
Shares Issued.......................................... 166 436 191 441
Shares Issued in Lieu of Cash Distributions............ -- -- 3 6
Shares Redeemed........................................ (395) (943) (67) (77)
------- -------- ------- ------
Total Increase (Decrease) in Net Share Transactions.... (229) (507) 127 370
======= ======== ======= ======
</Table>
Amounts designated as "--" are $0 or have been rounded to $0.
28
- --------------------------------------------------------------------------------
<Table>
<Caption>
International Mid-Cap Small Cap Value Income Investment Grade
Equity Fund Equity Fund Value Equity Fund Stock Fund Bond Fund
--------------------- --------------------- --------------------- --------------------- ---------------------
01/01/04- 01/01/03- 01/01/04- 01/01/03- 01/01/04- 01/01/03- 01/01/04- 01/01/03- 01/01/04- 01/01/03-
06/30/04 12/31/03 06/30/04 12/31/03 06/30/04 12/31/03 06/30/04 12/31/03 06/30/04 12/31/03
--------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
$ 45 $ 57 $ 46 $ 84 $ 46 $ 92 $ 286 $ 637 $ 337 $ 730
429 (184) 1,055 1,350 1,936 633 3,665 (1,482) 179 614
(1) (3) -- -- -- -- -- -- -- --
(240) 2,060 (555) 2,274 (63) 4,885 (1,517) 9,588 (599) (572)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
233 1,930 546 3,708 1,919 5,610 2,434 8,743 (83) 772
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
-- (47) (50) (86) (40) (93) (277) (637) (349) (821)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
262 202 1,237 1,755 1,418 1,064 2,389 2,923 958 2,662
-- 47 50 86 40 93 277 637 412 821
(896) (1,442) (1,744) (3,243) (1,381) (1,579) (5,524) (10,081) (3,044) (6,244)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
(634) (1,193) (457) (1,402) 77 (422) (2,858) (6,521) (1,674) (2,761)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
(401) 690 39 2,220 1,956 5,095 (701) 1,585 (2,106) (2,810)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
6,920 6,230 16,182 13,962 20,381 15,286 45,484 43,899 20,316 23,126
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
$6,519 $ 6,920 $16,221 $16,182 $22,337 $20,381 $44,783 $ 45,484 $18,210 $20,316
====== ======= ======= ======= ======= ======= ======= ======== ======= =======
$ 140 $ 95 $ (4) $ -- $ 6 $ -- $ 9 $ -- $ (11) $ 1
====== ======= ======= ======= ======= ======= ======= ======== ======= =======
28 28 118 194 91 85 184 266 94 258
-- 6 5 9 3 8 22 57 40 80
(93) (201) (168) (383) (89) (137) (427) (937) (297) (608)
------ ------- ------- ------- ------- ------- ------- -------- ------- -------
(65) (167) (45) (180) 5 (44) (221) (614) (163) (270)
====== ======= ======= ======= ======= ======= ======= ======== ======= =======
</Table>
The accompanying notes are an integral part of the financial statements.
29
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST For the Six Month Period Ended June 30, 2004
(Unaudited) and the Periods Ended December 31,
For a Share Outstanding Throughout Each Year or Period
<Table>
<Caption>
Net Net Realized and
Net Asset Value, Investment Unrealized Gains (Losses) Total from Dividends from
Beginning of Period Income (Loss) on Investments Operations Net Investment Income
------------------- ------------- ------------------------- ---------- ---------------------
CAPITAL APPRECIATION FUND
2004* $15.41 $(0.02) $ 0.51 $ 0.49 $ --
2003 13.01 (0.03) 2.43 2.40 --
2002 17.48 (0.07) (3.74) (3.81) --
2001 20.02 (0.05) (1.27) (1.32) --
2000 20.27 0.03 0.65 0.68 (0.03)
1999 20.04 0.04 1.65 1.69 (0.04)
GROWTH AND INCOME FUND
2004* $10.10 $ 0.03 $ 0.45 $ 0.48 $(0.03)
2003 8.05 0.08 2.04 2.12 (0.07)
2002 10.21 0.06 (2.16) (2.10) (0.06)
2001 10.86 0.04 (0.65) (0.61) (0.04)
2000 10.00 0.07 0.86 0.93 (0.07)
1999(1) 10.00 -- -- -- --
INTERNATIONAL EQUITY FUND
2004* $ 9.43 $ 0.08 $ 0.24 $ 0.32 $ --
2003 6.92 0.07 2.50 2.57 (0.06)
2002 8.55 0.02 (1.61) (1.59) --
2001 10.36 -- (1.80) (1.80) --
2000 13.93 0.08 (0.58) (0.50) --
1999 13.05 0.03 1.11 1.14 (0.07)
MID-CAP EQUITY FUND
2004* $10.23 $ 0.03 $ 0.33 $ 0.36 $(0.03)
2003 7.93 0.05 2.30 2.35 (0.05)
2002 11.09 (0.04) (3.11) (3.15) --
2001 13.30 -- (0.19) (0.19) --
2000 15.20 (0.04) (0.13) (0.17) --
1999 13.56 (0.03) 1.90 1.87 --
SMALL CAP VALUE EQUITY FUND
2004* $14.80 $ 0.03 $ 1.36 $ 1.39 $(0.03)
2003 10.75 0.07 4.05 4.12 (0.07)
2002 10.94 0.06 (0.19) (0.13) (0.06)
2001 9.12 0.12 1.82 1.94 (0.12)
2000 7.97 0.14 1.15 1.29 (0.14)
1999 8.48 0.10 (0.51) (0.41) (0.10)
VALUE INCOME STOCK FUND
2004* $12.60 $ 0.08 $ 0.61 $ 0.69 $(0.08)
2003 10.39 0.17 2.21 2.38 (0.17)
2002 12.70 0.16 (2.31) (2.15) (0.16)***
2001 13.06 0.16 (0.32) (0.16) (0.20)
2000 13.23 0.26 0.98 1.24 (0.26)
1999 15.08 0.29 (0.63) (0.34) (0.29)
INVESTMENT GRADE BOND FUND
2004* $10.27 $ 0.18 $(0.22) $(0.04) $(0.19)
2003 10.29 0.34 0.02 0.36 (0.38)
2002 10.05 0.44 0.28 0.72 (0.48)
2001 9.69 0.52 0.36 0.88 (0.52)
2000 9.73 0.62 (0.04) 0.58 (0.62)
1999 10.58 0.56 (0.73) (0.17) (0.56)
<Caption>
Total
Distributions from Dividends and
Realized Capital Gains Distributions
---------------------- -------------
CAPITAL APPRECIATION FUND
2004* $ -- $ --
2003 -- --
2002 (0.66) (0.66)
2001 (1.22) (1.22)
2000 (0.90) (0.93)
1999 (1.42) (1.46)
GROWTH AND INCOME FUND
2004* $ -- $(0.03)
2003 -- (0.07)
2002 -- (0.06)
2001 -- (0.04)
2000 -- (0.07)
1999(1) -- --
INTERNATIONAL EQUITY FUND
2004* $ -- $ --
2003 -- (0.06)
2002 (0.04) (0.04)
2001 (0.01) (0.01)
2000 (3.07) (3.07)
1999 (0.19) (0.26)
MID-CAP EQUITY FUND
2004* $ -- $(0.03)
2003 -- (0.05)
2002 (0.01) (0.01)
2001 (2.02) (2.02)
2000 (1.73) (1.73)
1999 (0.23) (0.23)
SMALL CAP VALUE EQUITY FUND
2004* $ -- $(0.03)
2003 -- (0.07)
2002 -- (0.06)
2001 -- 0.12
2000 -- (0.14)
1999 -- (0.10)
VALUE INCOME STOCK FUND
2004* $ -- $(0.08)
2003 -- (0.17)
2002 -- (0.16)
2001 -- (0.20)
2000 (1.15) (1.41)
1999 (1.22) (1.51)
INVESTMENT GRADE BOND FUND
2004* $ -- $(0.19)
2003 -- (0.38)
2002 -- (0.48)
2001 -- (0.52)
2000 -- (0.62)
1999 (0.12) (0.68)
</Table>
+ Returns are for the period indicated and have not been annualized.
* For the six months ended June 30, 2004. All ratios for the period have been
annualized.
**Total return would have been (18.70)% without the payment by affiliate.
During the fiscal year ended December 31, 2002, the International Equity Fund
was reimbursed by the Adviser for losses incurred of $5,807 due to the sale
of shares in several registered investment companies which were inadvertently
purchased in excess of the amount permitted under applicable Securities and
Exchange Commission rules.
***
Includes Return of Capital of $0.0049 per share.
(1)
Commenced operations on December 30, 1999. All ratios for the period have
been annualized.
Amounts designated as "-- " are either $0 or have been rounded to $0.
30
- --------------------------------------------------------------------------------
<Table>
<Caption>
Net Assets, Ratio of Ratio of Net
Value, Net Assets, Net Expenses to Investment Income (Loss)
End of Period Total Return+ End of Period (000) Average Net Assets to Average Net Assets
------------- ------------- ------------------- ------------------ ------------------------
$15.90 3.18% $ 57,626 1.15% (0.21)%
15.41 18.45 59,367 1.15 (0.21)
13.01 (21.89) 56,718 1.15 (0.41)
17.48 (5.34) 86,499 1.15 (0.30)
20.02 3.07 101,964 1.15 0.17
20.27 8.73 134,072 1.15 0.20
$10.55 4.75% $ 10,948 1.20% 0.68%
10.10 26.49 9,198 1.20 0.92
8.05 (20.59) 4,354 1.20 0.68
10.21 (5.57) 4,278 1.20 0.47
10.86 9.32 1,784 1.20 0.69
10.00 -- 10 1.20 --
$ 9.75 3.39% $ 6,519 1.60% 1.37%
9.43 37.31 6,920 1.60 0.99
6.92 (18.58)** 6,230 1.60 0.27
8.55 (17.40) 9,544 1.60 0.25
10.36 (3.43) 11,972 1.60 0.64
13.93 8.81 18,268 1.60 0.42
$10.56 3.55% $ 16,221 1.15% 0.56%
10.23 29.72 16,182 1.15 0.60
7.93 (28.45) 13,962 1.15 (0.32)
11.09 2.72 21,938 1.15 0.04
13.30 (2.93) 23,714 1.15 (0.18)
15.20 14.00 30,744 1.15 (0.20)
$16.16 9.39% $ 22,337 1.20% 0.43%
14.80 38.44 20,381 1.20 0.56
10.75 (1.20) 15,286 1.20 0.55
10.94 21.48 13,775 1.20 1.05
9.12 16.37 10,513 1.20 1.69
7.97 (4.78) 11,047 1.20 1.23
$13.21 5.49% $ 44,783 0.95% 1.26%
12.60 23.12 45,484 0.95 1.52
10.39 (16.98) 43,899 0.95 1.37
12.70 (1.14) 63,102 0.95 1.20
13.06 10.43 67,594 0.95 2.01
13.23 (3.00) 101,741 0.95 1.95
$10.04 (0.45)% $ 18,210 0.75% 3.53%
10.27 3.51 20,316 0.75 3.66
10.29 7.40 23,126 0.75 4.33
10.05 9.20 19,559 0.75 5.15
9.69 6.32 16,890 0.75 6.54
9.73 (1.67) 21,733 0.75 5.56
<Caption>
Ratio of Expenses
to Average Net Assets Portfolio
(Excluding Waivers and Reimbursements) Turnover Rate
-------------------------------------- -------------
1.49% 41%
1.50 91
1.46 67
1.44 88
1.38 105
1.36 168
1.75% 17%
2.20 22
2.56 51
3.22 27
8.04 34
1.20 --
3.91% 37%
3.91 75
2.59 115
2.32 92
2.08 126
1.99 207
1.76% 51%
1.84 182
1.72 90
1.66 93
1.56 106
1.50 122
1.68% 32%
1.79 27
1.79 17
1.91 55
1.96 72
1.83 63
1.17% 48%
1.19 54
1.13 50
1.12 73
1.06 72
0.96 80
1.29% 37%
1.25 147
1.28 144
1.32 139
1.26 123
1.19 243
</Table>
The accompanying notes are an integral part of the financial statements.
31
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
1. Organization:
The STI Classic Variable Trust (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated April 18, 1995. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with seven funds (each referred to as a "Fund" or
collectively as the "Funds"): the Capital Appreciation Fund, the Growth and
Income Fund, the International Equity Fund, the Mid-Cap Equity Fund, the Small
Cap Value Equity Fund, the Value Income Stock Fund (collectively the "Equity
Funds") and the Investment Grade Bond Fund. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which shares
are held. Sales of shares of the Funds may only be made to separate accounts of
various life insurance companies and certain qualified benefit plans. The Funds'
prospectus provides a description of each Fund's investment objective, policies
and strategies. Effective April 30, 2004, the Small Cap Value Equity Fund was
closed to new investors.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust. These policies are in conformity with accounting principles generally
accepted in the United States of America.
Use of Estimates -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that
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.
Security Valuation -- Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available
(except for securities traded on NASDAQ) are valued at the last quoted sale
price on the primary exchange or market (foreign or domestic) on which they
are traded, or, if there is no such reported sale, at the most recent quoted
bid price. For securities traded on NASDAQ, the NASDAQ Official Closing
Price will be used. If available, debt securities are priced based upon
valuations provided by independent, third-party pricing agents. Such values
generally reflect the last reported sales price if the security is actively
traded. The third-party pricing agents may also value debt securities at an
evaluated bid price by employing methodologies that utilize actual market
transactions, broker-supplied valuations, or other methodologies designed to
identify the market value for such securities. Debt obligations with
remaining maturities of sixty days or less may be valued at their amortized
cost, which approximates market value. The prices for foreign securities are
reported in local currency and converted to U.S. dollars using currency
exchange rates. Prices for most securities held in the Funds are provided
daily by recognized independent pricing agents. If a security price cannot
be obtained from an independent, third-party pricing agent, the Funds seek
to obtain a bid price from at least one independent broker.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees. The Funds' Fair Value Procedures are implemented through a Fair
Value Committee (the "Committee") designated by the Funds' Board of
Trustees. Some of the more common reasons that may necessitate that a
security be valued using Fair Value Procedures include: the security's
trading has been halted or suspended; the security has been delisted from a
national exchange; the security's primary trading market is temporarily
closed at a time when under normal conditions it would be open; or the
security's primary pricing source is not able or willing to provide a price.
When a security is valued in accordance with the Fair Value Procedures, the
Committee will determine the value after taking into consideration relevant
information reasonably available to the Committee.
32
- --------------------------------------------------------------------------------
(Unaudited)
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular
security's last trade and the time at which a Fund calculates its net asset
value. The closing prices of such securities may no longer reflect their
market value at the time the Fund calculates net asset value if an event
that could materially affect the value of those securities (a "Significant
Event") has occurred between the time of the security's last close and the
time that the Fund calculates net asset value. A Significant Event may
relate to a single issuer or to an entire market sector. If the adviser or
sub-adviser of a Fund becomes aware of a Significant Event that has occurred
with respect to a security or group of securities after the closing of the
exchange or market on which the security or securities principally trade,
but before the time at which the Fund calculates net asset value, it may
request that a Fair Value Committee Meeting be called. In addition, the
Funds' administrator monitors price movements among certain selected
indices, securities and/or baskets of securities that may be an indicator
that the closing prices received earlier from foreign exchanges or markets
may not reflect market value at the time the Fund calculates net asset
value. If price movements in a monitored index or security exceed levels
established by the administrator, the administrator notifies the adviser or
sub-adviser for any Fund holding the relevant securities that such limits
have been exceeded. In such event, the adviser or sub-adviser makes the
determination whether a fair value committee meeting should be called based
on the information provided.
Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date of the security purchase or sale. Dividend
income is recognized on ex-dividend date, and interest income is recognized
on an accrual basis and includes, where applicable, the amortization of
premium or accretion of discount. The cost used in determining net realized
capital gains and losses on the sale of securities is that of the specific
securities sold, adjusted for the accretion and amortization of purchase
discounts and premiums during the applicable holding period.
Repurchase Agreements -- In connection with transactions involving
repurchase agreements, a third party custodian bank takes possession of the
underlying securities ("collateral"), the value of which exceeds the
principal amount of the repurchase transaction, including accrued interest.
In the event of default on the obligation to repurchase, each Fund has the
right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the counterparty to
the agreement, realization and/or retention of the collateral or proceeds
may be subject to legal proceedings. At period end, there were no open
repurchase agreements.
Foreign Currency Transactions -- With respect to the International Equity
Fund, the books and records are maintained in U.S. dollars. Foreign currency
amounts are translated into U.S. dollars on the following basis:
- market value of investment securities, assets and liabilities at the
current rate of exchange; and
- purchases and sales of investment securities, income, and expenses at the
relevant rates of exchange prevailing on the respective dates of such
transactions.
The International Equity Fund does not isolate the 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 change in market prices of
equity securities.
The International Equity Fund reports certain foreign currency-related
transactions as components of realized gains and losses for financial
reporting purposes, whereas such components are treated as ordinary income
for Federal income tax purposes.
Dividends and Distributions to Shareholders -- Distributions to
shareholders, which are determined in accordance with Federal tax
regulations are
33
NOTES TO FINANCIAL STATEMENTS--CONTINUED
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004
recorded on the ex-dividend date. Dividends from net investment income for
the Investment Grade Bond Fund are declared daily and paid monthly to
shareholders. Dividends from net investment income for the Capital
Appreciation Fund, the Growth and Income Fund, the Mid-Cap Equity Fund, the
Small Cap Value Equity Fund and the Value Income Stock Fund are declared and
paid quarterly to shareholders. Dividends from net investment income for the
International Equity Fund are declared and paid annually to shareholders.
Any net realized capital gains are distributed to shareholders at least
annually.
Expenses -- Expenses related to a specific Fund are charged to that Fund.
Other operating expenses of the Trust are pro-rated to the Funds on the
basis of relative net assets.
Compensating Balances -- If a Fund has a cash over-draft in excess of
$100,000 it is required to leave 110% in compensating balance with SunTrust
Bank (the "Custodian"), a wholly owned subsidiary of SunTrust Banks, Inc.,
on the following day. If a Fund has a positive cash balance in excess of
$100,000 it is allowed to overdraw 90% of the balance with the Custodian on
the following business day.
3. Agreements and Other Transactions with Affiliates:
Investment Advisory Agreement -- Investment advisory services are provided
to the Trust by Trusco Capital Management, Inc. ("Trusco"). Under the terms
of the Investment Advisory Agreement, Trusco is entitled to receive a fee
from the Funds, computed daily and paid monthly, at an annual rate of 1.15%,
0.90%, 1.25%, 1.15%, 1.15%, 0.80% and 0.74% of the average daily net assets
of the Capital Appreciation Fund, Growth and Income Fund, International
Equity Fund, Mid-Cap Equity Fund, Small Cap Value Equity Fund, Value Income
Stock Fund, and Investment Grade Bond Fund, respectively. Trusco has agreed
to waive all or a portion of its fees (and to reimburse Funds' expenses) in
order to limit operating expenses. Fee waivers and expense reimbursements
are voluntary (except for the Growth and Income Fund, for which the expense
limit is contractual) and may be terminated at any time.
Administration Agreement -- The Trust and SEI Investments Global Funds
Services (the "Administrator") are parties to an Administration Agreement
(the "Administration Agreement") dated August 18, 1995, as amended November
19, 1997 and March 1, 1999. Under the terms of the Administration Agreement,
the Administrator is entitled to an annual fee, subject to a minimum of
$62,500 for domestic funds and $75,000 for international funds (expressed as
a percentage of the combined average daily net assets of the Trust and STI
Classic Funds) of: 0.12% up to $1 billion, 0.09% on the next $4 billion,
0.07% on the next $3 billion, 0.065% on the next $2 billion and 0.06% for
over $10 billion.
Distribution Agreement -- The Trust and SEI Investments Distribution Co.
(the "Distributor") are parties to a Distribution Agreement dated August 18,
1995. The Distributor receives no fees for its services under this
agreement.
Transfer Agency Agreement -- The Trust and Federated Services Company are
parties to a Transfer Agency servicing agreement dated August 2, 1995, under
which Federated Services Company provides transfer agency services to the
Trust.
Custodian Agreements -- SunTrust Bank, acts as custodian for all the Funds
except the International Equity Fund which utilizes Brown Brothers Harriman
& Co. as custodian. Custodians are paid on the basis of the net assets and
transaction costs 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.
Other -- Certain officers of the Trust are also officers of the Adviser, the
Administrator and/or the Distributor. Such officers are paid no fees by the
Trust for serving as officers of the Trust.
34
- --------------------------------------------------------------------------------
(Unaudited)
The Trust had entered into an agreement with the Distributor to act as an
agent in placing repurchase agreements for the Trust. As of October 24,
2003, this agreement was discontinued.
The Trust has entered into an agreement with SunTrust Robinson Humphrey, a
division of SunTrust Capital Markets, Inc. which is a direct non-bank
subsidiary of SunTrust Banks, Inc. to act as an agent in placing repurchase
agreements for the Trust. During the period, and at June 30, 2004, the Funds
did not hold repurchase agreements through SunTrust Robinson Humphrey.
4. Investment Transactions:
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the period ended June 30, 2004, were as follows:
<Table>
<Caption>
U.S. Govt. U.S. Govt.
Purchases Sales Purchases Sales
(000) (000) (000) (000)
--------- ------- ---------- ----------
Capital Appreciation
Fund..................... $23,692 $26,446 $ -- $ --
Growth and Income Fund..... 3,197 1,698 -- --
International Equity
Fund..................... 2,392 2,840 -- --
Mid-Cap Equity Fund........ 8,249 8,613 -- --
Small Cap Value Equity
Fund..................... 6,640 7,511 -- --
Value Income Stock Fund.... 21,018 22,781 -- --
Investment Grade Bond
Fund..................... 3,000 3,336 3,993 6,150
</Table>
5. Federal Tax Policies and Information:
It is each Fund's intention to continue to qualify as a regulated investment
company for Federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provisions for Federal income taxes are
required.
The Funds may be subject to taxes imposed by countries in which they invest with
respect to their investments in issuers existing or operating in such countries.
Such taxes are generally based on income earned. The Funds accrue such taxes
when the related income is earned.
Tax cost of securities differs from cost for financial reporting purposes by the
amount of losses recognized for financial reporting purposes in excess of
federal income tax purposes. As of June 30, 2004, the tax cost of securities and
the breakdown of unrealized appreciation (depreciation) for each Fund was as
follows:
<Table>
<Caption>
Aggregate Aggregate Net
Gross Gross Unrealized
Federal Tax Unrealized Unrealized Appreciation/
Cost Appreciation Depreciation Depreciation
(000) (000) (000) (000)
----------- ------------ ------------ -------------
Capital Appreciation
Fund.................. $51,057 $7,807 $1,180 $6,627
Growth and Income Fund.. 9,543 1,590 190 1,400
International Equity
Fund.................. 5,482 1,327 103 1,224
Mid-Cap Equity Fund..... 13,969 2,429 241 2,188
Small Cap Value Equity
Fund.................. 17,453 6,406 457 5,949
Value Income Stock
Fund.................. 39,467 5,707 534 5,173
Investment Grade Bond
Fund.................. 19,199 138 336 (198)
</Table>
6. Concentrations/Risks:
The Investment Grade Bond Fund invests primarily in investment grade obligations
rated at least BBB or better by S&P or Baa or better by Moody's. Changes by
recognized rating agencies in the ratings of any fixed income security or in the
ability of an issuer to make payments of interest and principal may affect the
value of these investments.
The International Equity Fund invests in securities of foreign issuers in
various countries. These investments may involve certain considerations and
risks not typically associated with investments in the United States as a result
of, among other factors, the possibility of future political and economic
developments and the level of governmental supervision and regulation of
securities markets in the respective countries.
In the normal course of business, the Funds enter into contracts that provide
general indemnifications. The Funds' maximum exposure under these arrangements
is dependent on future claims that may be made against the Funds and, therefore,
cannot be estimated; however,
35
NOTES TO FINANCIAL STATEMENTS--CONCLUDED
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST June 30, 2004 (Unaudited)
based on experience, the risk of loss from such claims is considered remote.
The Funds are intended to be funding vehicles for variable annuity contracts and
variable life insurance policies offered by life insurance companies. At June
30, 2004, outstanding shares of the Funds were held by separate accounts of
participating insurance companies as follows:
<Table>
<Caption>
% of Number of
Ownership Accounts
--------- ---------
Capital Appreciation Fund.............. 92% 2
Growth and Income Fund................. 95% 4
International Equity Fund.............. 93% 1
Mid-Cap Equity Fund.................... 94% 2
Small Cap Value Equity Fund............ 93% 3
Value Income Stock Fund................ 96% 3
Investment Grade Bond Fund............. 88% 1
</Table>
7. Securities Lending:
Each Fund may lend portfolio securities to brokers, dealers and other financial
organizations that meet capital and other credit requirements or other criteria
established by the Trust's Board of Trustees. These loans may not exceed 33 1/3%
of the total asset value of the Fund (including the loan collateral). No Fund
will lend portfolio securities to its investment adviser or its affiliates
unless it has applied for and received specific authority to do so from the SEC.
Loans of portfolio securities will be fully collateralized by cash. The value of
the collateral is at least equal to the market value of the securities loaned.
However, due to market fluctuations, the value of securities loaned on a
particular day may, during the course of the day, exceed the value of
collateral. On each business day, the amount of collateral is adjusted based on
the prior day's market fluctuations and the current day's lending activity.
Income from lending activity is determined by the amount of interest earned on
collateral, less any amounts payable to the borrowers of the securities and the
lending agent. Lending securities involves certain risks, including the risk
that the Fund may be delayed or prevented from recovering the collateral if the
borrower fails to return the securities.
Cash collateral received in connection with securities lending is invested in
the Boston Global Investment Trust-Enhanced Portfolio. This Portfolio consists
of money market instruments including money market mutual funds registered under
the Investment Company Act of 1940, commercial paper, repurchase agreements,
U.S. Treasury Bills and U.S. agency obligations.
8. Subsequent Event:
Effective July 26, 2004, BISYS Fund Services Ohio, Inc. ("BISYS") became the new
Administrator, Distributor, Fund Accounting Agent and Transfer Agent to the
Funds.
36
NOTES
- --------------------------------------------------------------------------------
NOTES
- --------------------------------------------------------------------------------
NOTES
- --------------------------------------------------------------------------------
Investment Adviser:
Trusco Capital Management, Inc.
STI Classic Variable Trust Funds are not deposits, are not insured or guaranteed
by the FDIC or any other government agency, and are not endorsed by and do not
constitute obligations of SunTrust Banks, Inc. or any other of its affiliates.
Investment in the Funds involves risk, including the possible loss of principal.
There is no guarantee that any STI Classic Variable Trust Fund will achieve its
investment objective. The STI Classic Variable Trust Funds are advised by Trusco
Capital Management, Inc., an affiliate of SunTrust Banks, Inc.
Distributor:
SEI Investments Distribution Co.
This information must be preceded or
accompanied by a current prospectus for
each fund described.
STISRCVT 08/04
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics
that applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 11(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S
CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY
WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE
OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (B) OF THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has determined
that the registrant either:
(i) Has at least one audit committee financial expert serving on its
audit committee; or
(ii) Does not have an audit committee financial expert serving on
its audit committee.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the
audit committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined
in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph
(a)(1)(ii) of this Item, it must explain why it does not have an audit
committee financial expert.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees billed
in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountant's full-time, permanent
employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
NOT APPLICABLE - ONLY FOR ANNUAL REPORTS.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act (17CFR 240.10A-3), state whether or not the
registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a
committee, however designated, identify each committee member. If
the entire board of directors is acting as the registrant's audit
committee as specified in Section 3(a)(58)(B) of the Exchange Act
(15 U.S.C. 78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption
from the listing standards for all audit committees.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in Section 210.12-12 of Regulation
S-X, unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report
on this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
NOT APPLICABLE.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
NOT APPLICABLE.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
NOT APPLICABLE.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financial officers, or persons performing similar functions, regarding
the effectiveness of the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date
within 90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
The registrant's principal executive officer and principal financial officer
have obtained and reviewed representations from SEI Investments Global Funds
Services ("SEI") with respect to their role as administrator to the registrant,
including controls and procedures in place, as of June 30, 2004. SEI served in
this role through July 23, 2004; after this date, BISYS Fund Services Ohio, Inc.
("BISYS") assumed the role of administrator. SEI provided the underlying data
from their accounting system to BISYS to prepare this report on Form N-CSR for
the registrant, except that SEI did not provide the narrative portion of the
shareholders' letter. SEI performed an evaluation of the disclosure controls and
procedures of SEI Investments Accounting & Valuation Processing from the date of
their last similar examination on June 3, 2004 through August 16, 2004 and has
provided its conclusions thereon to the registrant's principal executive officer
and principal financial officer. BISYS compiled this Form N-CSR, including the
financial statements included as Item 1 of this report. SEI reviewed and
commented upon the financial statements included in Item 1 of this report. In
addition, the registrant's principal executive officer and principal financial
officer have obtained and reviewed certain documents and representations from
certain of the registrant's other service providers, including BISYS, regarding
their respective roles to the registrant as of June 30, 2004. The registrant's
principal executive officer and principal financial officer each assumed their
respective role on July 24, 2004.
Based upon the procedures outlined above, the registrant's principal executive
officer and principal financial officer have concluded, based on their
evaluation of the registrant's disclosure controls and procedures as conducted
within 90 days of the filing date of this report, that these disclosure controls
and procedures are adequately designed and are operating effectively.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control
over financial reporting.
There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number
the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit. NOT APPLICABLE -
ONLY EFFECTIVE FOR ANNUAL REPORTS.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO RULE 30A-2(A) ARE
ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. NOT APPLICABLE.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. CERTIFICATIONS PURSUANT TO RULE 30A-2(B) ARE FURNISHED HEREWITH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) STI Classic Variable Trust
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By (Signature and Title)* /s/ Bryan Haft
-------------------------------------------------------
Bryan Haft, Treasurer
Date__________Sept. 9, 2004__________________________
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ R. Jeffrey Young
-------------------------------------------------------
R. Jeffrey Young, President
Date______September 9, 2004______________________________
By (Signature and Title)* /s/ Bryan Haft
-------------------------------------------------------
Bryan Haft, Treasurer
Date________September 9, 2004____________________________
* Print the name and title of each signing officer under his or her signature.