UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-9032
STI CLASSIC VARIABLE TRUST
(Exact name of registrant as specified in charter)
--------
2 Oliver Street
Boston, MA 02109
(Address of principal executive offices) (Zip code)
Trusco Capital Management, Inc.
50 Hurt Plaza; Suite 1400
Atlanta, Georgia 30303
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-428-6970
DATE OF FISCAL YEAR END: DECEMBER 31, 2003
DATE OF REPORTING PERIOD: JUNE 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
FINANCIAL REPORT
STI CLASSIC VARIABLE TRUST
JUNE 30, 2003
[LOGO OMITTED]
Dear Valued STI Classic Variable Trust Funds' Shareholder:
For investors, the six months ended June 30, 2003 saw marked improvement in
equity returns, and moderation of returns in bonds versus stocks. Specifically,
while stocks continued to labor under the weight of the late 1990's technology
stock bubble, various types of stocks had similar returns. The S&P 500 Index was
up 11.8%, with its Growth and Value components similar at 11.3% and 12.3%,
respectively. The Dow Jones Industrial Average was 9.0%. The S&P 400 Midcap
Index was 12.4%, while the S&P 600 Smallcap rose 12.9%. This convergence
followed two years in which value stocks had significantly outperformed growth,
and small/midcaps were similarly better than large caps. For bonds, the Lehman
Aggregrate Bond Index returned 3.9%, and similar returns were seen in the Lehman
Intermediate Government/Credit Index, which returned 4.3%. Returns in bonds were
driven by several factors, including: further reduction in short-term rates by
the Federal Reserve; continued minimal price inflation; major improvement in
corporate bond quality spreads vs. Treasuries; positive asset flows into bond
mutual funds; and some aspects of flight to quality in the Treasury bond market.
The current investment environment appears to be one of moderation. The late
1990's equity bubble which led to excesses and ultimately suboptimal capital
allocation on the part of both corporate managements and investors is long over.
The ensuing bear market which purged those excesses also now seems to be finally
over. The stock market has gained a better tone, after making three decisive
lows in the 775-800 range on the S&P 500 Index in July and October 2002, and
March 2003. Economic growth has been very slow to recover, since consumer
spending did not fall much in the recession and capital spending is still
limping along. However, ample monetary liquidity, the lowest interest rates in
over 40 years, some tax incentives and fiscal stimulus, the eventual benefits
from a lower dollar exchange rate and improving consumer/business confidence all
argue for continued positive economic growth and not another recession. Stock
prices ultimately track profits growth, and the trajectory of profits is now
positive. Investors in stocks can reasonably anticipate moderate gains but need
to be selective and price sensitive in security selection.
STI CLASSIC VARIABLE TRUST
PERFORMANCE, NET OF FEES, AS OF JUNE 30, 2003
THREE
MONTHS ONE YEAR
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST CAPITAL APPRECIATION FUND 8.80% (4.75)%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST GROWTH AND INCOME FUND 14.73% (4.56)%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST INTERNATIONAL EQUITY FUND 18.84% (9.13)%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST MID-CAP EQUITY FUND 14.45% (4.12)%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST SMALL CAP VALUE EQUITY FUND 17.05% 0.07%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST VALUE INCOME STOCK FUND 14.80% (7.19)%
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST INVESTMENT GRADE BOND FUND 2.73% 11.46%
- --------------------------------------------------------------------------------
Returns and principal values will fluctuate and shares at redemption may be
worth more or less than their original cost.
Past performance is not a guarantee of future returns.
A new stock market boom is unlikely, rather, a gradual recovery. The outlook for
bond investors in terms of absolute returns is a bit more challenging. Since
bond prices move inversely to interest rates, the current low level of yields by
1
definition reduces the opportunity for continued above average returns. Measured
since January 1981, the Lehman Long-Term Treasury Index returned 11.9%
annualized through June 30, 2003, while the S&P 500 Index total return was
12.7%. Such near convergence is rare in capital markets, and needs to be
understood in the context of 30-year Treasury bonds reaching yields of over 15%
in 1981, versus only a little over 4% today. Similarly, we do not expect
deflation, which would benefit Treasury bonds, but rather a gradual rise in
inflation as economic stimulus takes hold. For those reasons, we currently favor
stocks over bonds in terms of asset allocation, and within bonds, higher
yielding corporates over Treasuries. However, adherence to investment
disciplines and greater price sensitivity on stocks will be much more important
in the next several years, particularly if there is a meaningful rise in
interest rates.
Thank you for your confidence in Trusco Capital Management as Investment Adviser
to the STI Classic Variable Trust Funds.
Sincerely,
/s/ Douglas S. Phillips
-------------------------
Douglas S. Phillips, CFA
President and Chief Executive Officer
Trusco Capital Management
2
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003 (UNAUDITED)
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK (99.4%)
BASIC MATERIALS (0.9%)
Praxair 8,000 $ 481
-------
CAPITAL GOODS (6.0%)
3M 4,400 567
Danaher (B) 8,400 572
Deere 6,000 274
Eaton 6,000 472
Lockheed Martin 30,300 1,441
-------
3,326
-------
COMMUNICATION SERVICES (1.1%)
Fox Entertainment Group, Cl A* 20,500 590
-------
CONSUMER CYCLICALS (16.7%)
Autozone* 8,600 653
Bed Bath & Beyond* 22,630 878
Black & Decker 15,000 652
Brinker International* 17,900 645
Coach* 17,000 845
Colgate-Palmolive 10,400 603
Dollar General 22,500 411
Family Dollar Stores 13,200 504
Gap (B) 42,700 801
Gentex* 10,800 331
Harley-Davidson (B) 21,500 857
Liz Claiborne 15,800 557
Lowe's 33,800 1,452
-------
9,189
-------
CONSUMER STAPLES (4.0%)
Procter & Gamble 10,000 892
Starbucks* 10,200 250
Sysco 22,400 673
Whole Foods Market* (B) 7,500 356
-------
2,171
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
ENERGY (10.0%)
Anadarko Petroleum 11,400 $ 507
Apache 7,035 458
BJ Services* 20,000 747
BP ADR 19,500 819
Burlington Resources 7,500 406
Exxon Mobil 36,800 1,321
Noble* 14,000 480
Schlumberger 7,000 333
Valero Energy 12,100 440
-------
5,511
-------
FINANCE (19.6%)
Aflac 24,700 760
Allstate 26,100 931
AMBAC Financial Group 17,400 1,153
American Express 27,800 1,162
Bank of America 15,000 1,185
Countrywide Financial 20,500 1,426
Freddie Mac 28,000 1,422
Marsh & McLennan 8,300 424
Progressive 6,200 453
SLM 48,000 1,880
-------
10,796
-------
HEALTH CARE (20.9%)
Allergan 9,500 733
AmerisourceBergen 7,000 485
Amgen* 10,800 718
Bausch & Lomb 16,000 600
Becton Dickinson 6,900 268
Biomet 23,000 659
Forest Laboratories* (B) 22,800 1,248
Health Management
Associates, Cl A (B) 52,000 959
Johnson & Johnson 25,000 1,293
Pfizer 46,300 1,581
UnitedHealth Group 33,400 1,678
WellPoint Health Networks* 15,300 1,290
-------
11,512
-------
3
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
CAPITAL APPRECIATION FUND--CONCLUDED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
SERVICES (3.1%)
Apollo Group, Cl A* 28,000 $ 1,729
-------
TECHNOLOGY (17.1%)
Affiliated Computer
Services, Cl A* (B) 18,465 844
Amdocs* 18,500 444
BEA Systems* (B) 46,400 504
Cisco Systems* 53,033 885
EMC* 62,000 649
Hewlett-Packard 27,000 575
Intel 30,000 624
Mercury Interactive* (B) 12,800 494
Micron Technology* 40,000 465
Microsoft 63,200 1,619
Oracle* 97,500 1,172
STMicroelectronics 15,000 312
Sun Microsystems* 88,000 405
Xilinx* 17,400 440
-------
9,432
-------
Total Common Stock
(Cost $46,029) 54,737
-------
SHORT-TERM INVESTMENT (7.9%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 4,365,200 4,365
-------
Total Short-Term Investment
(Cost $4,365) 4,365
-------
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
REPURCHASE AGREEMENT (0.7%)
Morgan Stanley (C)
0.750%, dated 06/30/03, matures
07/01/03, repurchase price
$364,982 (collateralized by
U.S. Government obligations:
market value $372,285) $365 $ 365
-------
Total Repurchase Agreement
(Cost $365) 365
-------
Total Investments (108.0%)
(Cost $50,759) 59,467
-------
OTHER ASSETS AND LIABILITIES (-8.0%)
Payable Upon Return of Securities Loaned (4,365)
Investment Advisory Fees Payable (31)
Administration Fees Payable (5)
Custodian Fees Payable (15)
Other Assets and Liabilities, Net 21
-------
Total Other Assets and Liabilities (4,395)
-------
NET ASSETS:
Paid in Capital
(unlimited authorization -- no par value)
based on 3,976,368 outstanding shares
of beneficial interest 57,264
Accumulated net investment loss (47)
Accumulated net realized loss
on investments (10,853)
Net unrealized appreciation on investments 8,708
-------
Total Net Assets (100.0%) $55,072
=======
Net Asset Value, Offering and Redemption
Price Per Share $13.85
======
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $4,184,960.
(C) TRI-PARTY REPURCHASE AGREEMENT
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
- --------------------------------------------------------------------------------
(UNAUDITED)
GROWTH AND INCOME FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK (91.2%)
BASIC MATERIALS (3.7%)
E.I. du Pont de Nemours 2,000 $ 83
International Flavors &
Fragrances 2,000 64
International Paper 2,000 72
------
219
------
CAPITAL GOODS (12.3%)
Boeing 2,500 86
Cooper Industries, Cl A 2,500 103
Emerson Electric 1,500 77
General Electric 4,500 129
Honeywell International 3,000 80
Illinois Tool Works 1,000 66
Precision Castparts 1,100 34
Rockwell Automation 4,000 95
United Technologies 800 57
------
727
------
COMMUNICATION SERVICES (3.9%)
Alltel 1,500 72
Verizon Communications 4,000 158
------
230
------
CONSUMER CYCLICALS (10.0%)
AOL Time Warner* 5,000 81
Brunswick 2,500 63
Gannett 500 38
Johnson Controls 600 51
Jones Apparel Group* 2,500 73
Lowe's 1,000 43
Newell Rubbermaid 3,500 98
Target 2,500 95
Walt Disney 2,500 49
------
591
------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
CONSUMER STAPLES (5.9%)
Gillette 2,000 $ 64
HJ Heinz 3,000 99
Kimberly-Clark 1,300 68
PepsiCo 1,000 44
Sara Lee 2,500 47
Sysco 1,000 30
------
352
------
ENERGY (8.8%)
Burlington Resources 1,500 81
ChevronTexaco 800 58
ConocoPhillips 1,870 102
Exxon Mobil 3,000 108
Royal Dutch Petroleum 1,200 56
Schlumberger 1,000 48
XTO Energy 3,500 70
------
523
------
FINANCE (21.5%)
American International Group 1,300 72
Bank of America 1,500 119
Bank One 2,300 85
Berkshire Hathaway, Cl B* 50 121
Citigroup 1,500 64
Countrywide Financial 900 63
Fannie Mae 500 34
Fifth Third Bancorp 1,000 57
Goldman Sachs Group 700 59
Jefferson-Pilot 2,000 83
MGIC Investment 1,500 70
PNC Financial Services Group 2,500 122
Prudential Financial 3,500 118
US Bancorp 5,000 122
Wells Fargo 1,600 81
------
1,270
------
5
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
GROWTH AND INCOME FUND--CONCLUDED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
HEALTH CARE (11.7%)
Abbott Laboratories 2,000 $ 87
Barr Laboratories* 1,200 79
Bristol-Myers Squibb 4,000 109
C.R. Bard 1,500 107
Express Scripts* (B) 1,000 68
Johnson & Johnson 900 47
Merck 400 24
Oxford Health Plans* (B) 2,000 84
Pfizer 2,500 85
------
690
------
TECHNOLOGY (9.1%)
Computer Sciences* 2,000 76
DST Systems* 1,000 38
Hewlett-Packard 4,000 85
Intel 3,500 73
International Business Machines 600 50
Lexmark International* 500 35
Microsoft 3,000 77
Motorola 3,500 33
Texas Instruments 4,000 70
------
537
------
TRANSPORTATION (1.3%)
Norfolk Southern 4,000 77
------
UTILITIES (3.0%)
American Electric Power 2,000 59
Duke Energy 1,500 30
Exelon 1,500 90
------
179
------
Total Common Stock
(Cost $5,265) 5,395
------
SHORT-TERM INVESTMENT (2.1%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 122,800 123
------
Total Short-Term Investment
(Cost $123) 123
------
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
REPURCHASE AGREEMENT (8.3%)
Morgan Stanley (C)
0.750%, dated 06/30/03, matures
07/01/03, repurchase price
$493,921 (collateralized by
U.S. Government obligations:
market value $503,814) $494 $ 494
------
Total Repurchase Agreement
(Cost $494) 494
------
Total Investments (101.6%)
(Cost $5,882) 6,012
------
OTHER ASSETS AND LIABILITIES (-1.6%)
Payable Upon Return of Securities Loaned (123)
Investment Advisory Fees Receivable 2
Administration Fees Payable (5)
Custodian Fees Payable (2)
Other Assets and Liabilities, Net 34
------
Total Other Assets and Liabilities (94)
------
NET ASSETS:
Paid in Capital
(unlimited authorization -- no par value)
based on 677,151 outstanding shares
of beneficial interest 6,684
Undistributed net investment income 1
Accumulated net realized loss
on investments (897)
Net unrealized appreciation on investments 130
------
Total Net Assets (100.0%) $5,918
======
Net Asset Value, Offering and Redemption
Price Per Share $8.74
=====
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $119,275.
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
- --------------------------------------------------------------------------------
(UNAUDITED)
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
FOREIGN COMMON STOCK (97.0%)
AUSTRALIA (4.9%)
Australia & New Zealand
Banking Group 2,506 $ 31
Australian Gas Light 3,200 24
Boral 10,100 34
Foodland Associated 2,081 27
News Corp 7,297 55
Orica 2,900 21
Origin Energy 7,600 21
QBE Insurance Group 4,700 29
Westpac Banking 4,574 50
-------
292
-------
BELGIUM (0.9%)
Fortis 2,937 51
-------
DENMARK (0.7%)
Danske Bank 2,200 43
-------
FINLAND (1.6%)
Nokia Oyj 4,625 76
Tietoenator Oyj 980 17
-------
93
-------
FRANCE (8.6%)
Alcatel* 2,600 23
Aventis 902 50
BNP Paribas 1,778 90
Dassault Systemes 268 9
France Telecom 1,500 37
Lafarge (B) 143 8
Pernod-Ricard 300 27
Peugeot 755 37
Societe Generale, Cl A 350 22
Suez (B) 1,738 28
Technip-Coflexip 100 9
Thomson Multimedia 738 11
Total 785 119
Vinci 200 13
Vivendi Universal* 1,200 22
-------
505
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
GERMANY (6.8%)
Allianz 248 $ 21
BASF 1,277 54
Bayer 400 9
Bayerische Motoren Werke 453 17
Buderus 416 14
Deutsche Bank 956 62
Deutsche Telekom* 4,082 62
E.ON 300 15
Muenchener
Rueckversicherungs 300 31
SAP 302 36
Schering 267 13
Siemens 1,156 57
Volkswagen 300 13
-------
404
-------
HONG KONG (1.5%)
Cheung Kong Holdings 2,000 12
CLP Holdings 3,000 13
Esprit Holdings 8,500 21
HongKong Electric Holdings 5,319 21
Hutchison Whampoa 3,447 21
-------
88
-------
IRELAND (1.0%)
Allied Irish Banks 1,500 23
Anglo Irish Bank 4,442 39
-------
62
-------
ITALY (4.3%)
Banca Intesa 11,619 37
ENI-Ente Nazionale
Idrocarburi (B) 4,548 69
Parmalat Finanziaria (B) 12,747 40
Saipem 3,753 28
Telecom Italia 4,467 40
TIM 4,400 22
UniCredito Italiano 4,103 20
-------
256
-------
7
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
INTERNATIONAL EQUITY FUND--CONTINUED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
JAPAN (19.5%)
Aiful 550 $ 23
Aisin Seiki 2,300 33
Asahi Glass 3,000 19
Bank of Fukuoka 2,000 8
Canon 1,700 78
Chugoku Electric Power 1,000 15
Credit Saison 1,100 18
Denso 800 13
East Japan Railway 4 18
Fast Retailing 200 6
Hitachi 5,000 21
Honda Motor 1,202 46
JFE Holdings* 1,200 18
Kao 1,000 19
Kirin Brewery 4,000 28
Komatsu 4,000 15
Konica 3,000 34
Kyocera 100 6
Millea Holdings 2 15
Mitsubishi Heavy Industries 11,100 29
Mitsubishi Tokyo
Financial Group 5 23
Mitsui 2,812 14
Mitsui Fudosan 5,000 32
Mitsui OSK Lines 13,000 39
Mitsui Sumitomo Insurance 2,000 9
Nippon Express 4,000 15
Nippon Steel 11,000 15
Nippon Telegraph & Telephone 8 31
Nissan Motor 3,000 29
Nitto Denko 700 23
Nomura Holdings 2,000 25
NTT DoCoMo 18 39
Oki Electric Industry* 7,000 20
Olympus Optical 1,000 21
Pioneer 1,800 40
Ricoh 3,400 56
Sharp 1,000 13
Shin-Etsu Chemical 600 20
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
JAPAN -- CONTINUED
Sony 500 $ 14
Sumitomo 2,000 9
Sumitomo Chemical 4,000 13
Sumitomo Mitsui
Financial Group 5 11
Taisho Pharmaceutical 1,000 14
Takeda Chemical Industries 600 22
Tokyo Electric Power 1,600 31
Toshiba 2,000 7
Toyota Motor 1,113 29
UFJ Holdings* 17 25
West Japan Railway 3 11
Yamaha 1,500 21
Yamanouchi Pharmaceutical 700 18
-------
1,151
-------
NETHERLANDS (5.2%)
ABN AMRO Holding 3,917 75
Akzo Nobel 443 12
IHC Caland 328 17
ING Groep 2,644 46
Koninklijke Philips Electronics 1,996 38
Royal Dutch Petroleum 1,190 55
Royal KPN* 4,500 32
Unilever 284 15
United Services Group 1,291 15
-------
305
-------
NEW ZEALAND (0.5%)
Fletcher Building 12,605 27
-------
NORWAY (0.4%)
Telenor ASA 5,200 22
-------
SINGAPORE (0.8%)
Cycle & Carriage 4,000 11
Fraser & Neave 6,000 29
Singapore Telecommunications 8,000 7
-------
47
-------
8
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
SPAIN (4.8%)
Acciona 200 $ 10
Altadis 1,010 26
Banco Santander Central
Hispano 4,990 44
Endesa (B) 2,900 49
Gamesa Tecnologica 400 9
Repsol 2,000 32
Sociedad General de Aguas
de Barcelona* 1,411 19
Telefonica 7,007 81
Union Fenosa 733 12
-------
282
-------
SWEDEN (2.3%)
Autoliv 1,491 40
Hennes & Mauritz, Cl B 500 11
Sandvik 1,333 35
Svenska Handelsbanken, Cl A 800 13
Swedish Match 1,920 15
Telefonaktiebolaget LM
Ericsson* 19,000 20
-------
134
-------
SWITZERLAND (7.8%)
Credit Suisse Group 1,243 33
Nestle 420 86
Novartis 3,683 146
Roche Holding 600 47
STMicroelectronics 995 21
UBS 1,368 76
Zurich Financial Services* 413 49
-------
458
-------
UNITED KINGDOM (25.4%)
AstraZeneca 1,257 51
Balfour Beatty 5,045 16
BHP Billiton 1,777 9
BP 24,709 171
British American Tobacco 3,305 38
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
UNITED KINGDOM -- CONTINUED
BT Group 12,642 $ 43
Burberry Group 6,600 27
Emap 2,500 35
Galen Holdings 2,700 23
GlaxoSmithKline 6,374 129
HBOS 7,109 92
HSBC Holdings 11,039 131
Kelda Group 2,900 21
Kidde 24,997 35
Legal & General Group 23,300 32
Marks & Spencer Group 5,445 28
Northern Rock 3,266 39
Rank Group 8,100 33
Rentokil Initial 12,445 39
Royal Bank of Scotland Group 4,002 112
Shell Transport & Trading 12,677 84
Shire Pharmaceuticals* 4,000 26
Tesco 8,869 32
Unilever 4,000 32
United Utilities 2,500 24
Vodafone Group 79,918 156
Wimpey George 8,496 41
-------
1,499
-------
Total Foreign Common Stock
(Cost $5,468) 5,719
-------
RIGHTS (0.0%)
FRANCE (0.0%)
Lafarge* 143 --
-------
Total Rights
(Cost $0) --
-------
EXCHANGE TRADED FUND (0.0%)
iShares MSCI EAFE Index 24 3
-------
Total Exchange Traded Fund
(Cost $2) 3
-------
9
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
INTERNATIONAL EQUITY FUND--CONCLUDED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
SHORT-TERM INVESTMENT (3.1%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 181,943 $ 182
-------
Total Short-Term Investment
(Cost $182) 182
-------
Total Investments (100.1%)
(Cost $5,652) 5,904
-------
OTHER ASSETS AND LIABILITIES (-0.1%)
Payable Upon Return of Securities Loaned (182)
Investment Advisory Fees Receivable 13
Administration Fees Payable (6)
Custodian Fees Payable (5)
Other Assets and Liabilities, Net 174
-------
Total Other Assets and Liabilities (6)
-------
NET ASSETS:
Paid in Capital
(unlimited authorization -- no par value)
based on 778,863 outstanding shares
of beneficial interest 9,432
Undistributed net investment income 111
Accumulated net realized loss
on investments (3,900)
Net unrealized appreciation
on investments 252
Net unrealized appreciation
on foreign currency and translation
of other assets and liabilities
in foreign currency investments 3
-------
Total Net Assets (100.0%) $ 5,898
=======
Net Asset Value, Offering and Redemption
Price Per Share $7.57
=====
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $149,532.
CL -- CLASS
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
- --------------------------------------------------------------
- --------------------------------------------------------------
At June 30, 2003, sector diversification of the Fund was as follows:
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (000)
- ---------------------- ---------- -------
FOREIGN COMMON STOCK
Apparel & Textiles 0.5% $ 27
Automotive 4.3 255
Banking 18.8 1,108
Chemicals 2.2 132
Construction 4.1 242
Containers 0.7 39
Cosmetics & Toiletries 0.3 19
Electronics 4.4 262
Energy 0.2 9
Finance 4.5 267
Food, Beverage & Tobacco 7.4 435
Health Care 9.7 571
Metals 0.7 42
Multimedia 2.8 163
Office Equipment 2.3 134
Oil & Gas 10.2 602
Operations 3.4 200
Photography Equipment 0.9 55
Publishing 0.6 35
Real Estate 0.7 44
Retail 1.9 113
Services 0.3 15
Technology 1.0 61
Telephones & Telecommunications 12.4 733
Transportation 1.7 101
Wholesale 0.9 55
------- ------
TOTAL FOREIGN COMMON STOCK 97.0 5,719
RIGHTS -- --
EXCHANGE TRADED FUND -- 3
SHORT-TERM INVESTMENT 3.1 182
------- ------
TOTAL INVESTMENTS 100.1 5,904
OTHER ASSETS AND LIABILITIES, NET (0.1) (6)
------- ------
TOTAL NET ASSETS 100.0% $5,898
======= ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(UNAUDITED)
MID-CAP EQUITY FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK (99.1%)
BASIC MATERIALS (2.6%)
Lubrizol 4,000 $ 124
NVR* 300 123
Rohm & Haas 3,500 109
-------
356
-------
CAPITAL GOODS (9.7%)
Autoliv 4,400 119
Crane 5,900 133
Delphi 11,200 97
Eaton 1,500 118
Goodrich 6,700 141
Harsco 4,000 144
Hubbell, Cl B 3,600 119
Jabil Circuit* 5,900 130
KB Home 1,900 118
Textron (B) 3,500 137
Toro 2,200 87
-------
1,343
-------
COMMUNICATION SERVICES (2.6%)
Avaya* 9,100 59
CenturyTel 2,400 84
Harris 3,000 90
Nextel Communications, Cl A* 4,600 83
Qwest Communications
International* 8,500 40
-------
356
-------
COMPUTER SOFTWARE (1.5%)
Apple Computer* 1,600 31
Quest Software* 3,800 45
Siebel Systems* 7,100 68
Storage Technology* 2,500 64
-------
208
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
CONSUMER CYCLICALS (16.7%)
Albertson's 2,500 $ 48
Autonation* 8,000 126
Belo, Cl A 3,600 80
CBRL Group 700 27
Columbia Sportswear* 800 41
Eastman Kodak (B) 3,900 107
Family Dollar Stores 700 27
Federated Department Stores 5,800 214
Ferro 6,000 135
Hasbro 4,500 79
Mattel 4,100 77
Pitney Bowes 6,400 246
Polo Ralph Lauren 3,100 80
Potlatch 10,900 281
RadioShack 2,500 66
Reader's Digest Association 5,100 69
Rent-A-Center* 700 53
RR Donnelley & Sons 6,200 162
Toys "R" Us* 5,300 64
Visteon 10,900 75
Williams-Sonoma* 1,100 32
Xerox* (B) 7,000 74
Zale* 3,800 152
-------
2,315
-------
CONSUMER STAPLES (3.6%)
Archer-Daniels-Midland 3,700 48
Clorox 2,000 85
HJ Heinz 5,700 188
RJ Reynolds Tobacco
Holdings (B) 1,600 59
UST 3,200 112
-------
492
-------
11
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
MID-CAP EQUITY FUND--CONCLUDED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
ENERGY (6.8%)
Amerada Hess 3,800 $ 187
Ashland 6,200 190
Diamond Offshore Drilling 9,100 191
Helmerich & Payne 2,800 82
Marathon Oil 8,200 216
Tidewater (B) 2,800 82
-------
948
-------
FINANCE (21.0%)
AmSouth Bancorp 2,200 48
Annaly Mortgage Management
REIT 7,500 149
AON 1,700 41
Archstone-Smith Trust REIT 2,000 48
Bear Stearns 2,900 210
Charter One Financial 1,400 44
Colonial Properties Trust REIT 4,800 169
Comerica 5,000 233
Commerce Bancshares 2,900 113
Countrywide Financial 1,900 132
Duke Realty REIT 1,500 41
Equity Office Properties
Trust REIT 6,200 168
Equity Residential REIT 2,900 75
First Industrial Realty Trust REIT 7,100 224
Lincoln National 5,200 185
MGIC Investment 2,000 93
Northern Trust 3,700 155
PMI Group 3,400 91
St. Paul 3,800 139
State Street 3,400 134
UnionBanCal 1,900 79
Unitrin 3,800 103
UnumProvident 1,600 21
Webster Financial 5,700 216
-------
2,911
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
HEALTH CARE (9.0%)
American Healthways* 1,100 $ 40
Anthem* 900 69
Beckman Coulter 3,200 130
Bio-Rad Laboratories, Cl A* 1,500 83
Caremark Rx* 3,300 85
Esperion Therapeutics* 2,500 49
Express Scripts* 1,200 82
Gen-Probe* 700 29
Gilead Sciences* 900 50
Inamed* 2,200 118
McKesson 2,600 93
Millennium Pharmaceuticals* 4,600 72
Oxford Health Plans* (B) 1,600 67
Pacificare Health Systems* 800 39
Protein Design Labs* 4,700 66
Select Medical* 3,100 77
Watson Pharmaceuticals* 1,500 61
WellChoice* 1,500 44
-------
1,254
-------
SEMICONDUCTORS (3.9%)
Altera* 3,885 64
Arrow Electronics* 6,200 95
Emulex* 1,200 27
Intersil, Cl A* 6,100 162
LSI Logic* 8,100 57
Molex 3,300 89
Nvidia* 2,200 51
-------
545
-------
SERVICES (5.0%)
Convergys* 2,700 43
Deluxe 3,100 139
Getty Images* (B) 1,900 79
GTECH Holdings* (B) 1,700 64
H&R Block 3,200 138
Interpublic Group 9,600 128
ServiceMaster 9,900 106
-------
697
-------
12
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
TECHNOLOGY (7.7%)
Avnet* (B) 5,800 $ 74
Avocent* 2,300 69
BMC Software* 3,200 52
Computer Associates
International 3,400 76
Electronic Data Systems 5,800 124
Intuit* 3,500 156
Lexmark International* 700 50
Monsanto 4,100 89
Network Associates* 1,900 24
Novellus Systems* 4,200 154
Scientific-Atlanta 1,700 40
Symantec* 800 35
Veritas Software* 4,200 120
-------
1,063
-------
TRANSPORTATION (0.8%)
Burlington Northern Santa Fe 3,900 111
-------
UTILITIES (8.2%)
Black Hills 2,600 80
Citizens Communications* 7,700 99
Edison International* 4,800 79
Great Plains Energy 4,200 121
OGE Energy 13,100 280
Pinnacle West Capital 3,700 139
Public Service Enterprise Group 5,100 216
Williams 3,200 25
Xcel Energy 6,400 96
-------
1,135
-------
Total Common Stock
(Cost $12,483) 13,734
-------
PREFERRED STOCK (0.1%)
UnumProvident, CV to
1.8843 Shares 700 21
-------
Total Preferred Stock
(Cost $22) 21
-------
- --------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
WARRANTS (0.0%)
Per-Se Technologies, Expires 07/08/03* 34 $ --
-------
Total Warrants
(Cost $0) --
-------
SHORT-TERM INVESTMENT (4.7%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 651,300 651
-------
Total Short-Term Investment
(Cost $651) 651
-------
REPURCHASE AGREEMENT (1.8%)
Morgan Stanley (C)
0.750%, dated 06/30/03, matures
07/01/03, repurchase price
$242,595 (collateralized by
U.S. Government obligations:
market value $247,449) $243 243
-------
Total Repurchase Agreement
(Cost $243) 243
-------
Total Investments (105.7%)
(Cost $13,399) $14,649
=======
PERCENTAGES ARE BASED ON NET ASSETS OF $13,858,646.
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $630,136.
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
CV -- CONVERTIBLE SECURITY
REIT -- REAL ESTATE INVESTMENT TRUST
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
SMALL CAP VALUE EQUITY FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK (99.5%)
BASIC MATERIALS (10.5%)
Boise Cascade 9,600 $ 229
Carpenter Technology 4,900 76
Cia Siderurgica Nacional ADR 1,800 45
Lesco* 8,300 74
Lubrizol 6,000 186
Olin 8,400 144
Sappi ADR 8,900 110
Sociedad Quimica y Minera de Chile
ADR 4,500 126
Southern Peru Copper 6,900 106
Texas Industries 9,100 217
United States Steel 11,600 190
Valspar 3,600 152
Wellman 3,800 42
-------
1,697
-------
CAPITAL GOODS (14.9%)
BHA Group Holdings 1,900 38
Briggs & Stratton 2,400 121
Cummins 5,600 201
Empresa Brasileira de Aeronautica
ADR 23,413 447
Goodrich 5,500 115
Lennox International 8,014 103
LSI Industries 11,150 124
Makita ADR* 20,000 158
Oshkosh Truck 1,600 95
Quixote 9,800 250
Robbins & Myers 7,400 137
Roper Industries 2,300 85
Snap-On 4,000 116
Stewart & Stevenson Services 8,500 134
Tecumseh Products, Cl A 1,900 73
Tenaris ADR* 2,652 68
Thomas Industries 2,800 76
York International 2,000 47
-------
2,388
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMUNICATION SERVICES (3.4%)
Harris 18,477 $ 555
-------
CONSUMER CYCLICALS (21.4%)
Bassett Furniture Industries 6,400 85
Benetton Group ADR 7,000 147
Blyth 5,700 155
CBRL Group 7,000 272
Circuit City Stores 39,400 347
Edelbrock 330 3
Ethan Allen Interiors 6,700 236
Fairmont Hotels & Resorts (B) 6,900 161
Harman International Industries (B) 2,736 217
Intrawest 10,300 136
John H. Harland 6,800 178
John Wiley & Sons, Cl A 6,300 165
Libbey 4,400 100
Media General 3,400 194
Movado Group 4,200 91
Natuzzi ADR 8,400 67
Nautilus Group (B) 17,100 212
Phillips-Van Heusen 10,100 138
Pier 1 Imports 8,400 171
Sturm Ruger 5,500 55
Winnebago Industries (B) 6,700 254
Wolverine World Wide 2,900 56
-------
3,440
-------
CONSUMER STAPLES (8.0%)
Adolph Coors, Cl B 4,400 216
Church & Dwight 10,000 327
Dial 8,200 160
Ingles Markets, Cl A 7,400 75
Interstate Bakeries 4,600 58
JM Smucker 6,975 278
Sensient Technologies 7,920 182
-------
1,296
-------
ENERGY (3.5%)
Arch Coal 5,900 136
ENSCO International 3,700 99
Noble Energy 2,200 83
Peabody Energy 7,200 242
-------
560
-------
14
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
FINANCE (15.6%)
American Financial Group 4,600 $ 105
Banner 3,500 72
Chicago Mercantile Exchange (B) 2,200 153
City National 2,700 120
Colonial BancGroup 11,500 159
FNB 4,509 136
Glacier Bancorp 4,591 113
HCC Insurance Holdings (B) 7,800 231
Horizon Financial 7,256 114
Hub International Limited 7,600 130
Klamath First Bancorp 6,100 103
Pacific Northwest Bancorp 3,000 104
PXRE Group 5,300 105
Scottish Annuity & Life
Holdings 5,900 119
Seacoast Banking of Florida 6,100 104
Stancorp Financial Group 2,100 110
Student Loan 1,100 139
Washington Federal 5,061 117
West Coast Bancorp 7,076 129
Wilmington Trust 4,800 141
-------
2,504
-------
HEALTH CARE (2.5%)
Alpharma, Cl A 9,354 202
Cambrex 8,900 205
-------
407
-------
SERVICES (6.2%)
ABM Industries 9,600 148
Brink's 25,400 370
Hollinger International 11,300 122
Reynolds & Reynolds 7,800 223
Roto-Rooter 2,600 99
Standard Register 2,000 33
-------
995
-------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
TECHNOLOGY (6.3%)
Autodesk 14,200 $ 230
C&D Technologies 6,300 90
Fair Isaac (B) 3,600 185
Helix Technology 7,200 95
Keithley Instruments 7,700 111
Premier Farnell ADR 23,700 163
Symbol Technologies 10,800 141
-------
1,015
-------
TRANSPORTATION (4.9%)
Canadian Pacific Railway (B) 2,900 66
CHC Helicopter, Cl A 10,900 210
CP Ships (B) 20,300 340
KLM Royal Dutch Air 13,800 117
USF 2,200 59
-------
792
-------
UTILITIES (2.3%)
Allete 9,246 244
Puget Energy 5,100 122
-------
366
-------
Total Common Stock
(Cost $13,667) 16,015
-------
SHORT-TERM INVESTMENT (10.1%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 1,623,500 1,624
-------
Total Short-Term Investment
(Cost $1,624) 1,624
-------
15
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
SMALL CAP VALUE EQUITY FUND--CONCLUDED
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
REPURCHASE AGREEMENT (0.5%)
Morgan Stanley (C)
0.750%, dated 06/30/03, matures
07/01/03, repurchase price
$77,045 (collateralized by
U.S. Government obligations:
market value $78,587) $77 $ 77
-------
Total Repurchase Agreement
(Cost $77) 77
-------
Total Investments (110.1%)
(Cost $15,368) 17,716
-------
OTHER ASSETS AND LIABILITIES (-10.1%)
Payable Upon Return of Securities Loaned (1,624)
Investment Advisory Fees Payable (5)
Administration Fees Payable (5)
Custodian Fees Payable (4)
Other Assets and Liabilities, Net 18
-------
Total Other Assets and Liabilities (1,620)
-------
- --------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------
NET ASSETS:
Paid in Capital
(unlimited authorization -- no par value)
based on 1,366,425 outstanding shares
of beneficial interest $14,676
Undistributed net investment income 7
Accumulated net realized loss
on investments (935)
Net unrealized appreciation
on investments 2,348
-------
Total Net Assets (100.0%) $16,096
=======
Net Asset Value, Offering and Redemption
Price Per Share $11.78
======
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $1,579,074.
(C) TRI-PARTY REPURCHASE AGREEMENT
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
- --------------------------------------------------------------------------------
(UNAUDITED)
VALUE INCOME STOCK FUND
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK (95.1%)
BASIC MATERIALS (9.4%)
Alcoa 22,200 $ 566
Bowater (B) 4,900 183
Eastman Chemical 7,180 227
International Paper 18,700 668
Nucor 10,100 493
PPG Industries 9,000 457
Praxair 9,100 547
Rohm & Haas 15,100 469
Vulcan Materials 9,000 334
--------
3,944
--------
CAPITAL GOODS (13.9%)
Boeing 6,900 237
Dover 25,100 752
Eaton 5,200 409
Emerson Electric 12,200 624
General Electric 15,200 436
Honeywell International 22,000 591
Ingersoll-Rand, Cl A 4,500 213
Lockheed Martin 9,500 452
Pall 13,200 297
Parker Hannifin 12,200 512
Rockwell Collins 19,500 480
Teleflex 7,500 319
W.W. Grainger 11,300 528
--------
5,850
--------
COMMUNICATION SERVICES (5.9%)
Alltel 11,400 550
BellSouth 16,900 450
CenturyTel 13,000 453
SBC Communications 18,400 470
Verizon Communications 14,190 560
--------
2,483
--------
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
CONSUMER CYCLICALS (11.8%)
Carnival 6,700 $ 218
Gannett 9,700 745
Genuine Parts 12,200 391
Limited Brands 35,200 546
Masco 17,900 427
May Department Stores 19,200 427
McGraw-Hill 9,100 564
Newell Rubbermaid 16,200 454
Stanley Works 10,300 284
VF 13,100 445
Walt Disney 22,300 440
--------
4,941
--------
CONSUMER STAPLES (6.5%)
Clorox 4,700 200
HJ Heinz 15,400 508
Kimberly-Clark 15,300 798
Kraft Foods, Cl A 7,000 228
PepsiCo 12,100 538
Supervalu 21,200 452
--------
2,724
--------
ENERGY (11.0%)
BP ADR 19,700 828
ConocoPhillips 14,366 787
Diamond Offshore Drilling (B) 24,100 506
Exxon Mobil 21,700 779
GlobalSantaFe 18,500 432
Schlumberger 11,500 547
Tidewater (B) 14,800 435
Valero Energy 8,600 312
--------
4,626
--------
17
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
VALUE INCOME STOCK FUND--CONCLUDED
- --------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------
FINANCE (24.4%)
Allstate 18,000 $ 642
AMBAC Financial Group 3,300 219
American Express 10,100 422
American International Group 12,605 696
Bank of America 7,800 616
Bank of New York 17,000 489
Citigroup 20,000 856
Comerica 5,000 233
FleetBoston Financial 8,329 247
Hartford Financial Services
Group 9,600 483
Jefferson-Pilot 10,400 431
Keycorp 18,400 465
Lincoln National 6,600 235
Merrill Lynch 14,000 654
Morgan Stanley 5,900 252
Nationwide Financial Services,
Cl A 14,300 465
PNC Financial Services Group 10,700 522
Prudential Financial 19,000 639
Travelers Property Casualty,
Cl A (B) 30,200 480
US Bancorp 23,100 566
Wells Fargo 12,600 635
--------
10,247
--------
HEALTH CARE (4.7%)
Abbott Laboratories 10,300 451
Becton Dickinson 10,800 420
Johnson & Johnson 12,500 646
Wyeth 9,600 437
--------
1,954
--------
- --------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
TECHNOLOGY (5.4%)
Harris 14,200 $ 427
Hewlett-Packard 21,100 449
Koninklijke Philips Electronics (B) 23,800 455
Motorola 44,800 423
Pitney Bowes 13,700 526
--------
2,280
--------
TRANSPORTATION (1.0%)
Norfolk Southern 20,600 395
--------
UTILITIES (1.1%)
FPL Group 3,400 227
Progress Energy 5,300 233
--------
460
--------
Total Common Stock
(Cost $37,810) 39,904
--------
SHORT-TERM INVESTMENT (4.4%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 1,833,300 1,833
--------
Total Short-Term Investment
(Cost $1,833) 1,833
--------
REPURCHASE AGREEMENT (4.6%)
Morgan Stanley (C)
1.130%, dated 06/30/03, matures
07/01/03, repurchase price
$1,941,925 (collateralized by
U.S. Government obligations:
total market value $1,980,702) $1,942 1,942
--------
Total Repurchase Agreement
(Cost $1,942) 1,942
--------
Total Investments (104.1%)
(Cost $41,585) 43,679
--------
18
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-4.1%)
Payable Upon Return of Securities Loaned $ (1,833)
Investment Advisory Fees Payable (18)
Administration Fees Payable (5)
Custodian Fees Payable (11)
Other Assets and Liabilities, Net 142
--------
Total Other Assets and Liabilities (1,725)
--------
NET ASSETS:
Paid in Capital
(unlimited authorization -- no par value)
based on 3,824,005 outstanding shares
of beneficial interest 58,470
Undistributed net investment income 12
Accumulated net realized loss
on investments (18,622)
Net unrealized appreciation
on investments 2,094
--------
Total Net Assets (100.0%) $ 41,954
========
Net Asset Value, Offering and Redemption
Price Per Share $10.97
======
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $1,794,232.
(C) TRI-PARTY REPURCHASE AGREEMENT
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
INVESTMENT GRADE BOND FUND
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (25.3%)
U.S. Treasury Bonds
7.500%, 11/15/16 $ 425 $ 577
6.250%, 08/15/23 1,235 1,513
6.250%, 05/15/30 425 529
5.375%, 02/15/31 975 1,098
U.S. Treasury Notes
5.875%, 11/15/05 1,280 1,412
4.375%, 08/15/12 455 488
2.000%, 11/30/04 300 304
-------
Total U.S. Treasury Obligations
(Cost $5,586) 5,921
-------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (19.9%)
FHLMC
6.500%, 02/01/17 151 159
FNMA
7.000%, 05/01/32 484 510
6.500%, 07/01/32 219 228
6.500%, 12/01/32 413 431
6.000%, 09/01/17 411 429
5.000%, 06/01/33 799 813
4.500%, 06/01/18 548 560
GNMA
8.500%, 04/15/31 283 305
8.000%, 08/15/31 399 430
8.000%, 09/15/31 350 378
7.000%, 04/15/32 198 209
7.000%, 07/15/32 195 206
-------
Total U.S. Government Mortgage-
Backed Obligations
(Cost $4,590) 4,658
-------
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CORPORATE OBLIGATIONS (49.3%)
AEROSPACE & DEFENSE (1.4%)
General Dynamics
4.250%, 05/15/13 $ 100 $ 100
2.125%, 05/15/06 110 112
Northrop Grumman
7.125%, 02/15/11 100 120
-------
332
-------
BANKING (4.2%)
Bank One
5.500%, 03/26/07 125 138
Nationsbank
6.500%, 03/15/06 275 307
Wachovia
6.800%, 06/01/05 175 191
Wells Fargo (B)
3.500%, 04/04/08 335 346
-------
982
-------
FINANCE (12.0%)
Boeing Capital (B)
5.650%, 05/15/06 225 243
CIT Group
4.125%, 02/21/06 275 285
General Electric Capital
3.500%, 05/01/08 375 384
General Motors Acceptance
6.875%, 08/28/12 150 150
Golden West Financial
4.125%, 08/15/07 100 105
Household Finance
5.750%, 01/30/07 225 248
International Lease Finance,
Ser M, MTN
5.950%, 06/06/05 325 346
KFW International Finance,
Ser DTC
2.500%, 10/17/05 200 204
20
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
FINANCE -- CONTINUED
National Rural Utilities
3.000%, 02/15/06 $ 275 $ 283
Textron Financial, Ser E, MTN
2.750%, 06/01/06 100 100
Verizon Global Funding
7.750%, 12/01/30 200 253
Washington Mutual Financial
8.250%, 06/15/05 175 195
-------
2,796
-------
FOOD, BEVERAGE & TOBACCO (2.8%)
Coca-Cola Enterprises
8.500%, 02/01/22 250 339
Conagra Foods
7.500%, 09/15/05 100 112
Diageo Capital
3.500%, 11/19/07 100 103
3.375%, 03/20/08 100 102
-------
656
-------
FOREIGN GOVERNMENTS (3.2%)
Province of Ontario
6.000%, 02/21/06 225 249
2.350%, 06/30/06 125 126
Province of Quebec, Ser NN
7.125%, 02/09/24 200 251
United Mexican States
4.625%, 10/08/08 125 128
-------
754
-------
INDUSTRIAL (9.3%)
Alcoa
4.250%, 08/15/07 225 238
Anadarko Petroleum
3.250%, 05/01/08 165 165
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
INDUSTRIAL -- CONTINUED
Cardinal Health
4.450%, 06/30/05 $ 50 $ 53
CBS
7.875%, 09/01/23 100 127
Comcast Cablevision, MTN
8.375%, 05/01/07 100 118
Computer Sciences
7.500%, 08/08/05 275 306
Conoco
6.950%, 04/15/29 225 271
DaimlerChrysler, Ser D, MTN
3.400%, 12/15/04 225 227
Ford Motor
6.625%, 10/01/28 125 104
Kerr-McGee
5.875%, 09/15/06 50 55
5.375%, 04/15/05 50 53
Masco (B)
5.875%, 07/15/12 100 111
Petro Mexicanos
9.250%, 03/30/18 100 120
Viacom
5.625%, 05/01/07 100 111
Weyerhaeuser
7.950%, 03/15/25 100 117
-------
2,176
-------
INSURANCE (2.2%)
Allstate
7.875%, 05/01/05 250 278
Metlife
5.375%, 12/15/12 125 135
3.911%, 05/15/05 100 104
-------
517
-------
21
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
INVESTMENT GRADE BOND FUND--CONCLUDED
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
INVESTMENT BANKERS/BROKER DEALERS (6.7%)
Bear Stearns
3.000%, 03/30/06 $ 250 $ 256
Goldman Sachs Group
4.125%, 01/15/08 225 236
Lehman Brothers Holdings
4.000%, 01/22/08 225 235
Merrill Lynch, Ser B, MTN
2.940%, 01/30/06 325 331
Morgan Stanley
5.300%, 03/01/13 225 239
Salomon Smith Barney Holdings
6.500%, 02/15/08 225 259
-------
1,556
-------
REAL ESTATE INVESTMENT TRUSTS (1.1%)
EOP Operating LP
8.375%, 03/15/06 100 115
Simon Property Group LP
6.375%, 11/15/07 125 140
-------
255
-------
RETAIL (0.9%)
Kroger
7.800%, 08/15/07 90 104
Nordstrom
8.950%, 10/15/05 100 114
-------
218
-------
TELEPHONES & TELECOMMUNICATIONS (1.3%)
Ameritech Capital Funding
6.450%, 01/15/18 225 262
British Telecom
7.875%, 12/15/05 45 51
-------
313
-------
TRANSPORTATION (1.0%)
Norfolk Southern
7.800%, 05/15/27 100 125
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
TRANSPORTATION -- CONTINUED
Union Pacific
5.750%, 10/15/07 $ 100 $ 111
-------
236
-------
UTILITIES (3.2%)
Alabama Power, Ser Q
5.500%, 10/15/17 100 109
Alabama Power, Ser X
3.125%, 05/01/08 75 76
Carolina Power & Light
6.500%, 07/15/12 100 116
Consolidated Edison
4.875%, 02/01/13 125 132
Deutsche Telekom
8.250%, 06/15/05 110 122
Dominion Resources, Ser B
7.625%, 07/15/05 100 111
Pacificorp
6.900%, 11/15/11 75 89
-------
755
-------
Total Corporate Obligations
(Cost $10,966) 11,546
-------
MUNICIPAL OBLIGATION (0.5%)
Illinois State
4.950%, 06/01/23 130 130
-------
Total Municipal Obligation
(Cost $130) 130
-------
ASSET-BACKED OBLIGATIONS (3.5%)
Capital Auto Receivables Asset
Trust, Ser 2002-4, Cl A4
2.640%, 03/17/08 200 204
GE Capital, Ser 2002-1A, Cl A3
6.269%, 12/10/35 300 348
Harley-Davidson Motorcycle Trust,
Ser 2002-2, Cl A2
3.090%, 06/15/10 125 128
22
- --------------------------------------------------------------------------------
(UNAUDITED)
- --------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
ASSET-BACKED OBLIGATIONS -- CONTINUED
JPMorgan Chase Commercial
Mortgage Securities, Ser 2002-
C3, Cl A2
4.994%, 07/12/35 $ 125 $ 133
-------
Total Asset-Backed Obligations
(Cost $752) 813
-------
SHORT-TERM INVESTMENT (2.5%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 594,460 594
-------
Total Short-Term Investment
(Cost $594) 594
-------
REPURCHASE AGREEMENT (0.5%)
Morgan Stanley (C)
0.750%, dated 06/30/03, matures
07/01/03, repurchase price
$109,866 (collateralized by
U.S. Government obligations:
market value $112,146) $110 110
-------
Total Repurchase Agreement
(Cost $110) 110
-------
Total Investments (101.5%)
(Cost $22,728) 23,772
-------
OTHER ASSETS AND LIABILITIES (-1.5%)
Payable Upon Return of Securities Loaned (594)
Investment Advisory Fees Payable (1)
Administration Fees Payable (5)
Custodian Fees Payable (6)
Other Assets and Liabilities, Net 257
-------
Total Other Assets and Liabilities (349)
-------
- --------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------
NET ASSETS:
Paid in Capital
(unlimited authorization-- no par value)
based on 2,223,030 outstanding shares
of beneficial interest $22,965
Accumulated net realized loss
on investments (586)
Net unrealized appreciation
on investments 1,044
-------
Total Net Assets (100.0%) $23,423
=======
Net Asset Value, Offering and Redemption
Price Per Share $10.54
======
(A) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES
LENDING (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS).
(B) THIS SECURITY OR A PARTIAL POSITION OF THE SECURITY WAS ON LOAN AT JUNE 30,
2003 (SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2003 WAS $576,746.
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LP -- LIMITED PARTNERSHIP
MTN -- MEDIUM TERM NOTE
SER -- SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
23
STATEMENT OF ASSETS & LIABILITIES (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003 (UNAUDITED)
MID-CAP
EQUITY
FUND
--------
ASSETS:
Investments at Market Value (Cost $13,399) ........................ $14,649
Receivable for Investment Securities Sold ......................... 2,901
Receivable for Capital Shares Sold ................................ 6
Accrued Income .................................................... 28
-------
Total Assets ...................................................... 17,584
-------
LIABILITIES:
Payable Upon Return of Securities Loaned .......................... 651
Payable for Investment Securities Purchased ....................... 3,047
Payable for Capital Shares Redeemed ............................... 7
Investment Advisory Fees Payable .................................. 4
Administration Fees Payable ....................................... 5
Custodian Fees Payable ............................................ 4
Accrued Expenses .................................................. 7
-------
Total Liabilities ................................................. 3,725
-------
Total Net Assets .................................................. $13,859
=======
NET ASSETS:
Paid in Capital (unlimited authorization -- no par value)
based on 1,591,839 outstanding shares of beneficial interest .... 17,628
Undistributed net investment income ............................... 31
Accumulated net realized loss on investments ...................... (5,050)
Net unrealized appreciation on investments ........................ 1,250
-------
Total Net Assets .................................................. $13,859
=======
Net Asset Value, Offering and Redemption Price Per Share ............. $8.71
=====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24
STATEMENTS OF OPERATIONS (000)
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2003 (UNAUDITED)
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 ....................... $ 256 $ 48 $ 107 $ 99 $ 153 $ 519 $ --
Interest Income ....................... 4 1 -- 3 1 10 524
Net Income from Securities Lending .... 5 -- 4 4 1 1 2
Less: Foreign Taxes Withheld .......... (4) -- (14) -- (5) (3) --
------- ----- ----- ------ ------ ------- ----
Total Investment Income ............... 261 49 97 106 150 527 526
------- ----- ----- ------ ------ ------- ----
Expenses:
Investment Advisory Fees .............. 308 21 35 75 85 161 86
Administration Fees ................... 31 31 37 31 31 31 31
Custodian Fees ........................ 19 2 37 5 5 12 8
Professional Fees ..................... 20 2 2 5 6 15 10
Transfer Agent Fees and Out-of-Pocket
Expenses ............................ 14 1 1 3 4 10 6
Printing Fees ......................... 11 1 1 3 3 8 5
Trustee Fees .......................... 3 -- -- -- 1 2 1
Other Fees ............................ 2 1 4 1 -- 2 1
------- ----- ----- ------ ------ ------- ----
Total Expenses ........................ 408 59 117 123 135 241 148
Less: Investment Advisory Fees Waived . (100) (21) (35) (48) (47) (51) (61)
Reimbursements from Adviser...... -- (9) (38) -- -- -- --
------- ----- ----- ------ ------ ------- ----
Net Expenses .......................... 308 29 44 75 88 190 87
------- ----- ----- ------ ------ ------- ----
Net Investment Income (Loss) .......... (47) 20 53 31 62 337 439
------- ----- ----- ------ ------ ------- ----
Net Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency:
Net Realized Gain (Loss) on
Securities Sold .................. (2,130) (139) (429) 398 161 (2,871) 481
Net Realized Gain on Foreign
Currency Transactions ............ -- -- 12 -- -- -- --
Net Change in Unrealized Depreciation
on Foreign Currency and Translation
of Other Assets and Liabilities in
Foreign Currency ................. -- -- (3) -- -- -- --
Net Change in Unrealized Appreciation
on Investments ................... 5,417 579 848 781 1,219 4,957 71
------- ----- ----- ------ ------ ------- ----
Total Net Realized and Unrealized
Gain on Investments and
Foreign Currency .................... 3,287 440 428 1,179 1,380 2,086 552
------- ----- ----- ------ ------ ------- ----
Net Increase in Net Assets
from Operations ..................... $ 3,240 $ 460 $ 481 $1,210 $1,442 $ 2,423 $991
======= ===== ===== ====== ====== ======= ====
Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
25
STATEMENTS OF CHANGES IN NET ASSETS (000)
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2003 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2002
CAPITAL APPRECIATION GROWTH AND
FUND INCOME FUND
--------------------- ---------------------
01/01/03- 01/01/02- 01/01/03- 01/01/02-
06/30/03 12/31/02 06/30/03 12/31/02
--------- --------- --------- ---------
Operations:
Net Investment Income (Loss) ........................................ $ (47) $ (287) $ 20 $ 30
Net Realized Gain (Loss) on Securities
Sold and Foreign Currency Transactions ............................ (2,130) (7,835) (139) (595)
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 ..................................... 5,417 (10,067) 579 (468)
------- -------- ------ -------
Net Increase (Decrease) in Net Assets
from Operations ................................................... 3,240 (18,189) 460 (1,033)
------- -------- ------ -------
Dividends and Distributions to Shareholders:
Net Investment Income ............................................... -- -- (19) (30)
Return of Capital ................................................... -- -- -- --
Net Realized Gains .................................................. -- (2,818) -- --
------- -------- ------ -------
Total Dividends and Distributions ................................... -- (2,818) (19) (30)
------- -------- ------ -------
Capital Transactions:
Proceeds from Shares Issued ......................................... 2,410 923 1,469 1,720
Value of Shares Issued in Connection with Merger (See Note 7) ....... -- 1,599 -- --
Reinvestment of Cash Distributions .................................. -- 2,818 19 30
Cost of Shares Redeemed ............................................. (7,296) (14,114) (365) (611)
------- -------- ------ -------
Increase (Decrease) in Net Assets from
Capital Transactions .............................................. (4,886) (8,774) 1,123 1,139
------- -------- ------ -------
Total Increase (Decrease) in Net Assets ............................. (1,646) (29,781) 1,564 76
------- -------- ------ -------
Net Assets:
Beginning of Period ................................................. 56,718 86,499 4,354 4,278
------- -------- ------ -------
End of Period ....................................................... $55,072 $ 56,718 $5,918 $ 4,354
======= ======== ====== =======
Shares Issued and Redeemed:
Shares Issued ....................................................... 181 54 180 191
Shares Issued in Connection with Merger (See Note 7) ................ -- 118 -- --
Shares Issued in Lieu of Cash Distributions ......................... -- 211 2 4
Shares Redeemed ..................................................... (565) (971) (46) (73)
------- -------- ------ -------
Net Share Transactions .............................................. (384) (588) 136 122
======= ======== ====== =======
Amounts designated as "--" are either $0 or have been rounded to $0.
26
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL MID-CAP
EQUITY FUND EQUITY FUND
--------------------- ---------------------
01/01/03- 01/01/02- 01/01/03- 01/01/02-
06/30/03 12/31/02 06/30/03 12/31/02
--------- --------- --------- ---------
Operations:
Net Investment Income (Loss) ........................................ $ 53 $ 22 $ 31 $ (56)
Net Realized Gain (Loss) on Securities
Sold and Foreign Currency Transactions ............................ (417) (1,407) 398 (4,490)
Net Change in Unrealized Appreciation (Depreciation) on
Foreign Currency and Translation of
Other Assets and Liabilities in
Foreign Currency .................................................. (3) 6 -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments ..................................... 848 (50) 781 (1,668)
------ -------- ------- -------
Net Increase (Decrease) in Net Assets
from Operations ................................................... 481 (1,429) 1,210 (6,214)
------ -------- ------- -------
Dividends and Distributions to Shareholders:
Net Investment Income ............................................... -- -- -- --
Return of Capital ................................................... -- -- -- --
Net Realized Gains .................................................. -- (43) -- (9)
------ -------- ------- -------
Total Dividends and Distributions ................................... -- (43) -- (9)
------ -------- ------- -------
Capital Transactions:
Proceeds from Shares Issued ......................................... 121 16,938 560 1,378
Value of Shares Issued in Connection with Merger (See Note 7) ....... -- -- -- --
Reinvestment of Cash Distributions .................................. -- 43 -- 9
Cost of Shares Redeemed ............................................. (934) (18,823) (1,873) (3,140)
------ -------- ------- -------
Increase (Decrease) in Net Assets from
Capital Transactions .............................................. (813) (1,842) (1,313) (1,753)
------ -------- ------- -------
Total Increase (Decrease) in Net Assets ............................. (332) (3,314) (103) (7,976)
------ -------- ------- -------
Net Assets:
Beginning of Period ................................................. 6,230 9,544 13,962 21,938
------ -------- ------- -------
End of Period ....................................................... $5,898 $ 6,230 $13,859 $13,962
====== ======== ======= =======
Shares Issued and Redeemed:
Shares Issued ....................................................... 17 2,189 67 150
Shares Issued in Connection with Merger (See Note 7) ................ -- -- -- --
Shares Issued in Lieu of Cash Distributions ......................... -- 6 -- 1
Shares Redeemed ..................................................... (139) (2,410) (236) (368)
------ -------- ------- -------
Net Share Transactions .............................................. (122) (215) (169) (217)
====== ======== ======= =======
SMALL CAP VALUE VALUE INCOME INVESTMENT GRADE
EQUITY FUND STOCK FUND BOND FUND
-------------------- -------------------- --------------------
01/01/03- 01/01/02- 01/01/03- 01/01/02- 01/01/03- 01/01/02-
06/30/03 12/31/02 06/30/03 12/31/02 06/30/03 12/31/02
--------- --------- --------- --------- --------- ---------
Operations:
Net Investment Income (Loss) .................................. $ 62 $ 85 $ 337 $ 727 $ 439 $ 892
Net Realized Gain (Loss) on Securities
Sold and Foreign Currency Transactions ...................... 161 441 (2,871) (3,671) 481 73
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 ............................... 1,219 (885) 4,957 (7,319) 71 537
------- ------- ------- -------- ------- -------
Net Increase (Decrease) in Net Assets
from Operations ............................................. 1,442 (359) 2,423 (10,263) 991 1,502
------- ------- ------- -------- ------- -------
Dividends and Distributions to Shareholders:
Net Investment Income ......................................... (55) (86) (325) (727) (440) (982)
Return of Capital ............................................. -- -- -- (4) -- --
Net Realized Gains ............................................ -- -- -- -- -- --
------- ------- ------- -------- ------- -------
Total Dividends and Distributions ............................. (55) (86) (325) (731) (440) (982)
------- ------- ------- -------- ------- -------
Capital Transactions:
Proceeds from Shares Issued ................................... 352 3,285 1,273 3,262 2,047 5,970
Value of Shares Issued in Connection with Merger (See Note 7) . -- -- -- -- -- --
Reinvestment of Cash Distributions ............................ 55 85 325 731 440 982
Cost of Shares Redeemed ....................................... (984) (1,414) (5,641) (12,202) (2,741) (3,905)
------- ------- ------- -------- ------- -------
Increase (Decrease) in Net Assets from
Capital Transactions ........................................ (577) 1,956 (4,043) (8,209) (254) 3,047
------- ------- ------- -------- ------- -------
Total Increase (Decrease) in Net Assets ....................... 810 1,511 (1,945) (19,203) 297 3,567
------- ------- ------- -------- ------- -------
Net Assets:
Beginning of Period ........................................... 15,286 13,775 43,899 63,102 23,126 19,559
------- ------- ------- -------- ------- -------
End of Period ................................................. $16,096 $15,286 $41,954 $ 43,899 $23,423 $23,126
======= ======= ======= ======== ======= =======
Shares Issued and Redeemed:
Shares Issued ................................................. 32 286 123 277 198 595
Shares Issued in Connection with Merger (See Note 7) .......... -- -- -- -- -- --
Shares Issued in Lieu of Cash Distributions ................... 5 8 31 65 42 98
Shares Redeemed ............................................... (93) (131) (555) (1,085) (264) (392)
------- ------- ------- -------- ------- -------
Net Share Transactions ........................................ (56) 163 (401) (743) (24) 301
======= ======= ======= ======== ======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
27
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2003 (UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD
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
2003* $13.01 $(0.02) $ 0.86 $ 0.84 $ --
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)
1998 17.27 0.07 4.54 4.61 (0.08)
GROWTH AND INCOME FUND
2003* $ 8.05 $ 0.03 $ 0.69 $ 0.72 $(0.03)
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
2003* $ 6.92 $ 0.08 $ 0.57 $ 0.65 $ --
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)
1998 11.87 0.10 1.17 1.27 (0.01)
MID-CAP EQUITY FUND
2003* $ 7.93 $ -- $ 0.78 $ 0.78 $ --
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 --
1998 13.97 -- 0.70 0.70 --
SMALL CAP VALUE EQUITY FUND
2003* $10.75 $ 0.05 $ 1.02 $ 1.07 $(0.04)
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)
1998 9.77 0.12 (1.30) (1.18) (0.11)
VALUE INCOME STOCK FUND
2003* $10.39 $ 0.09 $ 0.57 $ 0.66 $(0.08)
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)
1998 15.21 0.27 1.02 1.29 (0.28)
INVESTMENT GRADE BOND FUND
2003* $10.29 $ 0.19 $ 0.25 $ 0.44 $(0.19)
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)
1998 10.19 0.54 0.39 0.93 (0.54)
+ Returns are for the period indicated and have not been annualized.
* For the six month period ended June 30, 2003. All ratios for the period have
been annualized.
** Total return would have been (18.70)% without the payment by affiliate.
*** 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.
TOTAL NET ASSETS, NET ASSETS, RATIO OF
DISTRIBUTIONS FROM DIVIDENDS AND VALUE, END TOTAL END OF NET EXPENSES TO
REALIZED CAPITAL GAINS DISTRIBUTIONS OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS
---------------------- ------------- ----------- ------- ------------ ------------------
CAPITAL APPRECIATION FUND
2003* $ -- $ -- $13.85 6.46% $ 55,072 1.15%
2002 (0.66) (0.66) 13.01 (21.89) 56,718 1.15
2001 (1.22) (1.22) 17.48 (5.34) 86,499 1.15
2000 (0.90) (0.93) 20.02 3.07 101,964 1.15
1999 (1.42) (1.46) 20.27 8.73 134,072 1.15
1998 (1.76) (1.84) 20.04 28.97 105,560 1.15
GROWTH AND INCOME FUND
2003* $ -- $(0.03) $ 8.74 8.97% $ 5,918 1.20%
2002 -- (0.06) 8.05 (20.59) 4,354 1.20
2001 -- (0.04) 10.21 (5.57) 4,278 1.20
2000 -- (0.07) 10.86 9.32 1,784 1.20
1999 (1) -- -- 10.00 -- 10 1.20
INTERNATIONAL EQUITY FUND
2003* $ -- $ -- $ 7.57 9.39% $ 5,898 1.60%
2002 (0.04) (0.04) 6.92 (18.58)** 6,230 1.60
2001 (0.01) (0.01) 8.55 (17.40) 9,544 1.60
2000 (3.07) (3.07) 10.36 (3.43) 11,972 1.60
1999 (0.19) (0.26) 13.93 8.81 18,268 1.60
1998 (0.08) (0.09) 13.05 10.80 18,926 1.60
MID-CAP EQUITY FUND
2003* $ -- $ -- $ 8.71 9.84% $ 13,859 1.15%
2002 (0.01) (0.01) 7.93 (28.45) 13,962 1.15
2001 (2.02) (2.02) 11.09 2.72 21,938 1.15
2000 (1.73) (1.73) 13.30 (2.93) 23,714 1.15
1999 (0.23) (0.23) 15.20 14.00 30,744 1.15
1998 (1.11) (1.11) 13.56 7.16 31,075 1.15
SMALL CAP VALUE EQUITY FUND
2003* $ -- $(0.04) $11.78 9.97% $ 16,096 1.20%
2002 -- (0.06) 10.75 (1.20) 15,286 1.20
2001 -- (0.12) 10.94 21.48 13,775 1.20
2000 -- (0.14) 9.12 16.37 10,513 1.20
1999 -- (0.10) 7.97 (4.78) 11,047 1.20
1998 -- (0.11) 8.48 (12.18) 13,145 1.20
VALUE INCOME STOCK FUND
2003* $ -- $(0.08) $10.97 6.43% $ 41,954 0.95%
2002 -- (0.16) 10.39 (16.98) 43,899 0.95
2001 -- (0.20) 12.70 (1.14) 63,102 0.95
2000 (1.15) (1.41) 13.06 10.43 67,594 0.95
1999 (1.22) (1.51) 13.23 (3.00) 101,741 0.95
1998 (1.14) (1.42) 15.08 9.69 98,759 0.95
INVESTMENT GRADE BOND FUND
2003* $ -- $(0.19) $10.54 4.36% $ 23,423 0.75%
2002 -- (0.48) 10.29 7.40 23,126 0.75
2001 -- (0.52) 10.05 9.20 19,559 0.75
2000 -- (0.62) 9.69 6.32 16,890 0.75
1999 (0.12) (0.68) 9.73 (1.67) 21,733 0.75
1998 -- (0.54) 10.58 9.38 19,236 0.75
RATIO OF
RATIO OF NET INVESTMENT
RATIO OF EXPENSES TO INCOME (LOSS) TO
NET INVESTMENT AVERAGE NET ASSETS AVERAGE NET ASSETS PORTFOLIO
INCOME (LOSS) TO (EXCLUDING WAIVERS (EXCLUDING WAIVERS TURNOVER
AVERAGE NET ASSETS AND REIMBURSEMENTS) AND REIMBURSEMENTS) RATE
------------------ ------------------- ------------------- ---------
CAPITAL APPRECIATION FUND
2003* (0.18)% 1.52% (0.55)% 35%
2002 (0.41) 1.46 (0.72) 67
2001 (0.30) 1.44 (0.59) 88
2000 0.17 1.38 (0.06) 105
1999 0.20 1.36 (0.01) 168
1998 0.43 1.41 0.17 219
GROWTH AND INCOME FUND
2003* 0.86% 2.48% (0.42)% 11%
2002 0.68 2.56 (0.68) 51
2001 0.47 3.22 (1.55) 27
2000 0.69 8.04 (6.15) 34
1999 (1) -- 1.20 -- --
INTERNATIONAL EQUITY FUND
2003* 1.89% 4.19% (0.70)% 41%
2002 0.27 2.59 (0.72) 115
2001 0.25 2.32 (0.47) 92
2000 0.64 2.08 0.16 126
1999 0.42 1.99 0.03 207
1998 0.63 2.07 0.16 129
MID-CAP EQUITY FUND
2003* 0.47% 1.88% (0.26)% 142%
2002 (0.32) 1.72 (0.89) 90
2001 0.04 1.66 (0.47) 93
2000 (0.18) 1.56 (0.59) 106
1999 (0.20) 1.50 (0.55) 122
1998 (0.29) 1.53 (0.67) 92
SMALL CAP VALUE EQUITY FUND
2003* 0.84% 1.84% 0.20% 18%
2002 0.55 1.79 (0.04) 17
2001 1.05 1.91 0.34 55
2000 1.69 1.96 0.93 72
1999 1.23 1.83 0.60 63
1998 1.23 1.89 0.54 49
VALUE INCOME STOCK FUND
2003* 1.67% 1.20% 1.42% 27%
2002 1.37 1.13 1.19 50
2001 1.20 1.12 1.03 73
2000 2.01 1.06 1.90 72
1999 1.95 0.96 1.94 80
1998 1.90 1.11 1.74 76
INVESTMENT GRADE BOND FUND
2003* 3.77% 1.27% 3.25% 68%
2002 4.33 1.28 3.80 144
2001 5.15 1.32 4.58 139
2000 6.54 1.26 6.03 123
1999 5.56 1.19 5.12 243
1998 5.19 1.34 4.60 183
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
28&29
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
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.
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 -- Equity securities listed on a securities exchange,
market or automated quotation system for which quotations are readily
available (except for equity securities traded on NASDAQ), including equity
securities traded over the counter, are valued at the last quoted sale
price on the primary exchange or market (foreign or domestic) on which they
are traded on valuation date (or at approximately 4:00 pm ET if an equity
security's primary exchange is normally open at that time), or, if there is
no such reported sale on the valuation date, at the most recent quoted bid
price. For securities traded on NASDAQ, the NASDAQ Official Closing Price
will be used. If available, debt securities are priced based upon
valuations provided by independent, third-party pricing agents. Such values
generally reflect the last reported sale price if the security is actively
traded. The third-party pricing agents may also value debt securities at an
evaluated bid price by employing methodologies that utilize actual market
transactions, broker-supplied valuations, or other methodologies designed
to identify the market value for such securities. Debt obligations with
remaining maturities of sixty days or less may be valued at their amortized
cost, which approximates market value. Securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith by, or in accordance with, procedures adopted by
the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the 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
30
- --------------------------------------------------------------------------------
(UNAUDITED)
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.
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:
o market value of investment securities, assets and liabilities at the
current rate of exchange; and
o 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 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 recorded on the ex-dividend date. Distributions from net
investment income for the Investment Grade Bond Fund are declared daily and
paid monthly to shareholders. Distributions 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. Distributions 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.
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) 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 on the next $3 billion, 0.065% on the next $2 billion
and 0.06% for over $10 billion.
31
NOTES TO FINANCIAL STATEMENTS--CONTINUED
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003
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. Prior to January 29, 2003, Bank of New York served as
custodian for the International Equity Fund. 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
Administrator and/or the Distributor. Such officers are paid no fees by the
Trust for serving as officers of the Trust.
The Trust has entered into an agreement with the Distributor to act as an
agent in placing repurchase agreements for the Trust.
For the six-month period ended June 30, 2003 the following Funds paid the
Distributor through a reduction in the yield earned by the Funds on those
repurchase agreements:
FEES
------
Capital Appreciation Fund ................... $201
Growth and Income Fund ...................... 45
Mid-Cap Equity Fund ......................... 106
Small Cap Value Equity Fund ................. 59
Value Income Stock Fund ..................... 459
Investment Grade Bond Fund .................. 353
4. Investment Transactions:
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the six-month period ended June 30, 2003, were as
follows:
U.S. GOVT. U.S. GOVT.
PURCHASES SALES PURCHASES SALES
(000) (000) (000) (000)
--------- ------- --------- ----------
Capital Appreciation Fund ..... $18,722 $23,787 $ -- $ --
Growth and Income Fund ........ 1,218 513 -- --
International Equity Fund ..... 2,240 2,937 -- --
Mid-Cap Equity Fund ........... 18,239 19,188 -- --
Small Cap Value Equity Fund ... 2,682 3,002 -- --
Value Income Stock Fund ....... 10,583 14,904 -- --
Investment Grade
Bond Fund ................... 7,016 8,100 9,664 7,190
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 issuer existing or operating in such countries.
Such taxes are generally based on income earned. The Funds accrue such taxes
when the related income is earned.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax regulations
which may differ from accounting principles generally accepted in the United
States of America. As a result, net investment income (loss) and net realized
gain (loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. These book/tax differences
may be temporary or permanent. To the extent these differences are permanent in
nature, they are charged or credited to paid-in-capital, undistributed net
investment income (loss),
32
- --------------------------------------------------------------------------------
(UNAUDITED)
or accumulated net realized gain (loss), as appropriate, in the period that the
differences arise.
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any net realized capital gains. The breakdown, as of
December 31, 2002, was as follows (000):
EXPIRES EXPIRES EXPIRES EXPIRES
2010 2009 2008 2007
------- ------- ------- -------
Capital Appreciation Fund ...... $5,695 $ 223 $ 334 $ 12
Growth and Income Fund ......... 483 128 3 --
International Equity Fund ...... 1,471 1,208 315 --
Mid-Cap Equity Fund ............ 4,568 837 -- --
Small Cap Value Equity Fund .... -- 55 -- 1,030
Value Income Stock Fund ........ 3,046 -- 11,645 --
Investment Grade Bond Fund ..... 189 119 451 296
Amounts designated as "-" are either $0 or have been rounded to $0.
Included in the Capital Appreciation Fund is $569,441 of capital loss
carryforwards acquired in a previous merger. The utilization of this capital
loss carryover may be limited pursuant to Internal Revenue Code Section 382.
At June 30, 2003, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes are different from
amounts reported for financial reporting purposes due to wash sales which cannot
be used for Federal income tax purposes in the current year and have been
deferred for use in future years. The aggregate gross unrealized appreciation
and depreciation for securities held by the Funds at June 30, 2003, were as
follows:
AGGREGATE AGGREGATE
GROSS GROSS NET
FEDERAL TAX UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000) (000)
----------- ------------ ------------ ------------
Capital Appreciation
Fund ................. $50,759 $10,896 $(2,188) $8,708
Growth and Income
Fund ................. 5,888 459 (335) 124
International Equity
Fund ................. 5,652 608 (356) 252
Mid-Cap Equity Fund ..... 13,455 1,295 (101) 1,194
AGGREGATE AGGREGATE
GROSS GROSS NET
FEDERAL TAX UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000) (000)
----------- ------------ ------------ ------------
Small Cap Value
Equity Fund .......... 15,368 3,217 (869) 2,348
Value Income Stock
Fund ................. 41,659 4,199 (2,179) 2,020
Investment Grade
Bond Fund ............ 22,728 1,080 (36) 1,044
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.
7. Fund Reorganization:
On September 6, 2002, the assets of the STI Classic Variable Trust Quality
Growth Stock Fund (the "Quality Growth Stock Fund") were reorganized into the
Capital Appreciation Fund. Under the Agreement and Plan of Reorganization,
251,754 shares of the Quality Growth Stock Fund were exchanged for 118,418
shares of the Capital Appreciation Fund in a tax-free exchange.
The value of the Quality Growth Stock Fund on September 6, 2002 was $1,599,174,
which included $138,316 in unrealized losses and $621,130 in accumulated net
realized losses. The value of the Capital Appreciation Fund before the merger
was $60,173,046.
33
NOTES TO FINANCIAL STATEMENTS--CONCLUDED
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST JUNE 30, 2003 (UNAUDITED)
Upon the business combination of such funds on September 6, 2002, the value of
the Capital Appreciation Fund combined with the Quality Growth Stock Fund was
$61,772,220.
8. Securities Lending:
Each Fund may lend portfolio securities to brokers, dealers and other financial
organizations that meet capital and other credit requirements or other criteria
established by the Trust's Board of Trustees. These loans may not exceed 331/3%
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.
34
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.
ITEM 2. CODE OF ETHICS.
Not applicable - only effective for annual reports for periods ending on or
after July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable - only effective for annual reports for periods ending on or
after July 15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable - only effective for annual reports for periods ending on or
after December 15, 2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. (RESERVED)
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. (RESERVED)
ITEM 9. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 10. EXHIBITS.
(a)(1) Not applicable.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
================================================================================
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) STI Classic Variable Trust
By (Signature and Title)* /s/ James R. Foggo
-------------------------
James R. Foggo, President
Date 08/22/03
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ James R. Foggo
-------------------------
James R. Foggo, President
Date 08/22/03
By (Signature and Title)* /s/ Jennifer E. Spratley
------------------------
Jennifer E. Spratley, Chief Financial Officer
Date 08/22/03
* Print the name and title of each signing officer under his or her signature.