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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06557
STI Classic Funds
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
101 Federal Street Boston, MA 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio 43219
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 614-470-8000
Date of fiscal year end: 10/31/04
Date of reporting period: 10/31/04
Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Include a copy of the report transmitted to stockholders pursuant to Rule
30e-1 under the Act (17 CFR 270.30e-1).
ANNUAL
FINANCIAL REPORT
STI CLASSIC FUNDS
A FAMILY OF MUTUAL FUNDS
Classic Institutional Core Bond Fund
Classic Institutional Intermediate Bond Fund
Seix Institutional High Yield Fund
Classic Institutional Limited Duration Fund
October 31, 2004
[STI CLASSIC FUNDS LOGO]
TABLE OF CONTENTS:
STI CLASSIC FUNDS
ANNUAL FINANCIAL REPORT
OCTOBER 31, 2004
Shareholder Letter .......................................................................... 1
PORTFOLIO COMPOSITION AND AVERAGE ANNUAL RETURNS
Classic Institutional Core Bond Fund ........................................................ 3
Classic Institutional Intermediate Bond Fund ................................................ 5
Seix Institutional High Yield Fund .......................................................... 7
Classic Institutional Limited Duration Fund ................................................. 9
SCHEDULE OF PORTFOLIO INVESTMENTS
Classic Institutional Core Bond Fund ........................................................ 11
Classic Institutional Intermediate Bond Fund ................................................ 19
Seix Institutional High Yield Fund .......................................................... 24
Classic Institutional Limited Duration Fund ................................................. 39
Notes to Schedule of Portfolio Investments .................................................. 41
Statements of Assets and Liabilities ........................................................ 42
Statements of Operations .................................................................... 43
Statements of Changes in Net Assets ......................................................... 44
Financial Highlights ........................................................................ 47
Notes to Financial Statements ............................................................... 49
Report of Independent Registered Public Accounting Firm ..................................... 60
Trustees and Officers of the STI Classic Funds .............................................. 61
Special Meeting of Shareholders ............................................................. 64
Expense Examples ............................................................................ 65
October 31, 2004
Dear STI Bond Fund Shareholder,
The past year has been very busy for all of us associated with the STI Classic
Funds fixed-income funds. Many of you already know that Trusco Capital
Management and Seix Advisors joined forces in 2004 in an effort to focus even
greater resources on fixed-income management. Seix Advisors has a strong
reputation for its disciplined, bottom-up style of bond investing in both the
investment grade and high yield(1) markets; an approach that fits well with the
core Trusco philosophy. Seix's investment process and strong investment
performance has helped it become one of the largest high yield managers in the
country. On October 11, 2004, the STI Classic family turned a new page in its
long history of excellent performance and client service by naming Seix Advisors
as manager of our four flagship bond funds. We are all excited about the high
level of expertise, experience, and professionalism that Seix Advisors brings to
our STI Classic clients. We are pleased to offer our perspective on the year
just ended, and our strategy going forward.
The year ended October 31, 2004 was a generally favorable year for the bond
markets, despite a relatively strong economy and above-average growth in
corporate profits. Although volatility over the course of the twelve months was
high, the Lehman Aggregate Bond Index(2) gained 5.53% on a total return basis
for the year, with the strongest gains posted in the first and third quarters.
Confidence in the sustainability of the current expansion faltered early in the
year, as job growth failed to accelerate in a normal cyclical fashion. The
positive effects of tax cuts and falling mortgage rates were waning, and the
"hand-off" from a stimulus-led expansion to a self-sustaining phase of growth
did not go smoothly. As a result, bond yields fell sharply in the first
quarter. By March, the yield on the 10-year Treasury note fell as low as 3.68%
and the 2-year yield declined to 1.10%. However, rising commodity prices,
particularly oil, a weakening dollar, and a commitment by the Federal Reserve
("the Fed") to raise short-term rates beginning in June pushed yields higher. By
mid-year, the yield on the 10-year Treasury jumped nearly 120 basis points
(1.20%) from the low to 4.87% and the yield on the 2-year note rose over 180
basis points (1.80%) to 2.93%. Fears of excess growth and rampant inflation
subsided in the third quarter despite a steady rise in short-term rates by the
Fed, and longer-term yields eased.
From a fixed-income management perspective, we focused on three key themes in
the past year to add value to bond portfolios: improving credit quality from a
strengthening economy, rising short-term rates and a flatter yield curve, and
growing inflation concerns. To take advantage of the flatter yield curve, we
moved to a more "barbell" maturity structure. We also maintained a moderate
overweight in corporate bonds to take advantage of narrowing credit spreads and
higher current income. Finally, we established a position in Treasury Inflation
Indexed Securities ("TIPS") which we felt would be an area of growing demand
from investors, and would offer additional performance in an accelerating
inflation environment.
(1) Although the fund's yield may be higher than that of fixed income funds
that purchase higher-rated securities, the potentially higher yield is a
function of the greater risk that the fund's share price will decline.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged index of U.S.
bonds, which includes reinvestment of any earnings, is widely used to
measure the overall performance of the U.S. bond market. It is not possible
to invest directly in any index.
1
We entered 2004 optimistic yet cautious. We thought bonds would do well but
could be challenged to match the absolute performance of the past few years. To
date, the market has exceeded our expectations for 2004. We believe annualized
returns are well in excess of inflation targets. The fear of rising rates has
done little to blunt the performance of bonds and has produced handsome
advantages relative to equities.
Looking ahead, we continue to see return potential in further flattening of the
Treasury yield curve. Credit remains a beneficiary of strong demand and
limited supply. Fundamentals are stronger as balance sheets have been fortified
considerably, and companies are using cash prudently, benefiting bondholders.
We continue to favor TIPS amid a Treasury market struggling under the weight of
a record federal deficit.
Seix Advisors is excited to be managing the STI Classic bond funds, and shares
the commitment of Trusco to bring a disciplined, bottom-up management approach
to our clients. We appreciate the confidence you have placed in us, and we are
committed to providing the high level of performance and service you have come
to expect from the STI Classic family of mutual funds.
Sincerely,
/s/ Christina Seix /s/ Douglas Phillips
Christina Seix Douglas Phillips
CEO & Chief Investment Officer Chairman
Seix Advisors Trusco Capital Management
2
CLASSIC INSTITUTIONAL CORE BOND FUND
INVESTMENT CONCERNS
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
The Classic Institutional Core Bond Fund ("the Fund") seeks to provide a high
level of total return and to continually outperform the broad investment grade
bond market. The Fund will invest predominantly in investment grade bonds with
an emphasis on corporate and mortgage backed securities. For the year ended
October 31, 2004, the Fund's Institutional Shares had a total return net of fees
of 5.49% versus a return of 5.53% for its comparative benchmark, the Lehman
Brothers Aggregate Bond Index, which has no fees deducted.
The strategies implemented in the Fund outperformed the benchmark, but by an
amount slightly less than the fees. Consequently, the Fund slightly
underperformed its benchmark net of fees.
The period began in the midst of a slow, but visible, economic expansion.
Interest rates were artificially low led primarily by a moribund employment
environment. As the economy gained steam in the fourth quarter and non-farm
payroll releases relayed the first of twelve consecutive months of job
increases, the Fed became pro-active and the yield curve flattened
considerably. The Fed raised short term rates three times beginning on June 30
bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between
two and thirty year Treasury securities fell precipitously from 3.42% to 2.28%.
While short rates rose, intermediate and long term yields were relatively
unchanged. Inflation was not a factor despite a nominal rise. This shift in the
yield curve, along with the continuing strength of the credit markets, was
critical to the Fund's investment strategy.
The Fund's success was driven by three principal strategies: overweight in
credit securities, yield curve flattening bias and the use of U.S. Treasury
Inflation Indexed Securities ("TIPS"). The Fund's consistent overweight in
credit, particularly BBB rated securities, during the past two years has been an
essential component to performance enhancement. Emphasis on solid credit
research and issuer diversification led to advantages relative to the
benchmark. While we attempt to maintain a tight rein on duration relative to the
index, we anticipated the flattening of the yield curve and tilted maturities
accordingly. The concentration in mortgages is significant, albeit
underweighted to the Aggregate, but has been a detractor to returns over the
past year. TIPS are used opportunistically as their presence in the markets has
grown. We believe the ongoing allocation to TIPS has, and may continue to be, an
essential contributor to performance.
We continue to manage the Fund with only moderate shifts in average maturity and
duration. The total return is enhanced with yield curve analysis, sector
rotation and other low risk strategies. By actively pursuing these strategies,
the Fund strives to add total return while reducing risk.(1)
(1) Portfolio composition is subject to change.
Portfolio Composition as of October 31, 2004
(as a percentage of total investments)
[PIE CHART]
Corporate Bonds 28.2%
U.S. Government Agencies 30.5%
Foreign Government Bonds 0.6%
U.S. Treasury Obligations 30.1%
Cash Equivalents 5.9%
Repurchase Agreements 4.3%
Asset Backed Securities 0.4%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE
3
GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004
[GRAPH]
Classic Institutional Core Bond Fund (Institutional Shares) Lehman Brothers Aggregate Bond Index
----------------------------------------------------------- ------------------------------------
12/30/97 10000 10000
12/97 10020 10000
10180 10155
10409 10346
10740 10810
12/98 10803 10842
10792 10822
10667 10779
10729 10878
12/99 10746 10884
10899 11046
11076 11232
11424 11555
12/00 11864 11983
12220 12390
12315 12473
12838 13047
12/01 12674 13059
12654 13030
13031 13492
13349 14103
12/02 13635 14341
13847 14556
14247 14951
14235 14948
12/03 14291 14958
14640 15329
14323 14943
14771 15346
10/31/04 14886 15607
CLASSIC INSTITUTIONAL CORE BOND FUND
Assumes initial investment of $10,000 occurred on the Fund's inception date.
The minimum investment for the Institutional Shares is $1 million. Based on the
initial investment of $1 million, the ending value of the Institutional Shares
would have been $1,488,643.
THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE.
The Lehman Brothers Aggregate Bond Index is an unmanaged index of U.S. bonds,
which includes reinvestment of any earnings, is widely used to measure the
overall performance of the U.S. bond market. It is not possible to invest
directly in any index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%)
------------------------------------------------------
CLASSIC INSTITUTIONAL SINCE
CORE BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------- -------------- ------ ------ ------ ---------
INSTITUTIONAL SHARES (12/30/97) 5.49 4.46 6.68 5.99
T SHARES (10/11/04) 5.47 4.45 6.68 5.99
L SHARES* (10/11/04) 3.45 4.44 6.67 5.99
A SHARES* (1/25/02) 1.26 2.86 5.69 5.28
LEHMAN BROTHERS AGGREGATE
BOND INDEX (12/31/97) 5.53 5.44 7.58 6.73
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO
THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM.
*CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75%
AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE)
OF 2.00% IN YEAR ONE ONLY.
+ The quoted returns reflect the performance from December 30, 1997 to October
11, 2004 of the Seix Core Bond Fund, an open-end investment company that was
the predecessor fund to the Classic Institutional Core Bond Fund.
Performance for the Institutional Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Core Bond Fund's
Class I Shares prior to that date.
Performance for the Class T and L Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Core Bond Fund's
Class I Shares prior to that date. The historical performance has not been
adjusted to reflect the Fund's T or L Share expenses. If it had been, the
performance would have been lower.
The Class A Shares began operating on October 11, 2004. Performance between
December 30, 1997 to January 25, 2002 and January 25, 2002 to October 11,
2004 is that of the Class I Shares and Class P Shares, respectively, of the
Seix Core Bond Fund, the Fund's predecessor. The performance of the
predecessor fund's Class I Shares has not been adjusted to reflect the
Fund's A Share expenses. If it had been, the performance would have been
lower.
4
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
INVESTMENT CONCERNS
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
The Classic Institutional Intermediate Bond Fund ("the Fund") seeks to provide a
high level of total return and to continually outperform the broad intermediate
investment grade bond market. The Fund will invest predominantly in
intermediate, investment grade bonds with an emphasis on corporate and
government securities. For the year ended October 31, 2004, the Fund's
Institutional Shares had a total return net of fees of 4.73% versus a return of
4.33% for its comparative benchmark, the Lehman Intermediate Government/Credit
Index, which has no fees deducted.
The period began in the midst of a slow, but visible, economic expansion.
Interest rates were artificially low led primarily by a moribund employment
environment. As the economy gained steam in the fourth quarter and non-farm
payroll releases relayed the first of twelve consecutive months of job
increases, the Fed became pro-active and the yield curve flattened
considerably. The Fed raised short term rates three times beginning on June 30,
bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between
two and ten year Treasury securities fell precipitously from 2.48% to 1.51%.
While short rates rose, intermediate and long term yields were relatively
unchanged. Inflation was not a factor despite a nominal rise. This shift in the
yield curve, along with the continuing strength of the credit markets, was
critical to the Fund's investment strategy.
The Fund's success was driven by three principal strategies: overweight in
credit securities, yield curve flattening bias and the use of U.S. Treasury
TIPS. The Fund's consistent overweight in credit, particularly BBB rated
securities, during the past two years has been a key component to performance
enhancement. Emphasis on solid credit research and issuer diversification led
to advantages relative to the benchmark. While we maintain a tight rein on
duration relative to the index, we anticipated the flattening of the yield
curve and tilted maturities accordingly. TIPS are used opportunistically as
their presence in the markets has grown. We believe ongoing allocation to TIPS
has, and may continue to be, an essential contributor to performance.(1)
We continue to manage the Fund with only moderate shifts in average maturity and
duration. The total return is enhanced with yield curve analysis, sector
rotation and other low risk strategies. By actively pursuing these strategies,
the Fund strives to add total return while reducing risk.(1)
(1) Portfolio composition is subject to change.
Portfolio Composition as of October 31, 2004
(as a percentage of total investments)
[PIE CHART]
Corporate Bonds 39.4%
Foreign Government Bonds 0.9%
U.S. Treasury Obligations 54%
Repurchase Agreements 4%
U.S. Government Agencies 0.6%
Asset Backed Securities 1.1%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE
5
GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004
[GRAPH]
Classic Institutional Intermediate Bond Fund (Institutional Shares) Lehman Brothers Intermediate Government/Credit Index
------------------------------------------------------------------- ----------------------------------------------------
06/30/99 10000 10000
10094 10092
12/99 10124 10097
10322 10248
10457 10421
10774 10720
12/00 11155 11117
11510 11494
11574 11571
12076 12104
12/01 11939 12115
11895 12088
12234 12517
12595 13083
12/02 12797 13305
12944 13504
13270 13871
13298 13868
12/03 13313 13877
13640 14221
13323 13863
13698 14237
10/31/04 13794 14332
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
Assumes initial investment of $10,000 occurred on the Fund's inception date.
The minimum investment for the Institutional Shares is $1 million. Based on the
initial investment of $1 million, the ending value of the Institutional Shares
would have been $1,379,410.
THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE.
The Fund is measured against the Lehman Brothers Intermediate Government/Credit
Index an unmanaged index composed of all bonds that are investment grade rated
Baa or higher by Moody's or BBB or higher by S&P, if unrated by Moody's. Issues
must have at least one year to maturity. The index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these services. Investors cannot invest directly in an
index, although they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/04 (%)
-----------------------------------------------
CLASSIC INSTITUTIONAL SINCE
INTERMEDIATE BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR 5 YEAR INCEPTION
- ------------------------ -------------- ------ ------ ------ ---------
INSTITUTIONAL SHARES (6/30/99) 4.73 4.11 6.40 6.21
T SHARES (10/11/04) 4.60 4.07 6.38 6.19
L SHARES* (10/11/04) 2.58 4.06 6.37 6.18
A SHARES* (10/11/04) 0.66 2.76 5.56 5.43
LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CREDIT INDEX (6/30/99) 4.33 5.22 7.22 6.98
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO
THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM.
*CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75%
AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE)
OF 2.00% IN YEAR ONE ONLY.
+ The quoted returns reflect the performance from June 30, 1999 to October 11,
2004 of the Seix Intermediate Bond Fund, an open-end investment company that
was the predecessor fund to the Classic Institutional Intermediate Bond
Fund.
Performance for the Institutional Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Intermediate
Bond Fund's Class I Shares prior to that date.
Performance for the Class T, L and A Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Intermediate
Bond Fund's Class I Shares prior to that date. The historical performance
has not been adjusted to reflect the Fund's T, L or A Share expenses. If it
had been, the performance would have been lower.
6
SEIX INSTITUTIONAL HIGH YIELD FUND
INVESTMENT CONCERNS
Although the fund's yield may be higher than that of fixed income funds that
purchase higher-rated securities, the potentially higher yield is a function of
the greater risk that the fund's share price will decline.
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
The SEIX Institutional High Yield Fund (the "Fund") invests in the higher
quality segment of the high yield market. The Fund's portfolio emphasizes "BB"
and "B" rated bonds and avoids lower quality securities rated "CCC" by Moody's
or Standard & Poor's. In selecting investments for the Fund, we employ a
research driven process designed to identify value areas within the high yield
market. We seek companies that are increasing credit strength, operating in
industries with strong fundamentals and also have stable or growing cash flows
and capable management.(1, 2)
We are pleased to report that the net of expenses return of the Fund's
Institutional Shares was 9.97% for the 12 month period ending October 31, 2004.
This compares to a 12.07% return for the Merrill Lynch High Yield Master Index,
which has no fees deducted. The performance shortfall compared to the benchmark
was due to the Fund's concentration in the higher quality sector of the high
yield market at a time when lower quality "CCC" rated bonds were recovering from
a very difficult 2002.
Our view since October 31, 2003 has been that High Yield portfolios would
outperform other fixed income sectors. The excess return was expected to result
from higher income, some continued spread tightening versus Treasuries and,
especially, credit quality improvement. Over the last twelve months, High Yield
securities have out yielded Investment Grade bonds. Although not as dramatic as
early 2003, some spread tightening between High Yield and Investment Grade
corporates has occurred. We believe the largest source of excess return,
however, was credit improvement as companies strengthened balance sheets.
Over the last year, we favored the Media, Gaming and Healthcare industries.
Media benefited from strong advertising spending during the lively election
year. The cycle in Healthcare reimbursement turned in favor of providers and
hospitals as well as other medical service companies enjoyed pricing power for
the first time in a number of years. The large Gaming companies remain well
managed and are benefiting from a rebound in domestic tourism.(1)
We underweighted Auto Suppliers and Airlines because of their very difficult
operating environments. Auto Suppliers are at the mercy of the "Big Three" car
makers and have little pricing power. Airlines are saddled with high energy
costs, costly labor contracts and high pension liabilities.(1)
We believe that with a slow and steady improvement in the economy, high yield
issuers should continue to experience improved free cash flow that can be used
to pay down debt and reduce leverage. We anticipate that the Fund may benefit
from these trends.
(1) Portfolio composition is subject to change.
(2) The Moody's or Standard and Poor's Fund Ratings represent an opinion only,
not a recommendation to buy or sell.
Portfolio Composition as of October 31, 2004
(as a percentage of total investments)
[PIE CHART]
Corporate Bonds 96.1%
Repurchase Agreements 3.7%
Preferred Stocks 0.2%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE
7
GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004
[GRAPH]
SEIX Institutional High Yield Bond (Institutional Shares) Merrill Lynch High Yield Master Index
--------------------------------------------------------- -------------------------------------
12/29/2000 10000 10000
Dec-00 10000 10000
10578 10578
10699 10338
10710 9858
1-Dec 11133 10448
11305 10629
11336 9887
11409 9595
2-Dec 11839 10250
12339 10982
12991 12083
13110 12399
3-Dec 13681 13135
13974 13421
13750 13314
14414 13930
10/31/2004 14654 14199
SEIX INSTITUTIONAL HIGH YIELD FUND
Assumes initial investment of $10,000 occurred on the Fund's inception date.
The minimum investment for the Institutional Shares is $1 million. Based on the
initial investment of $1 million, the ending value of the Institutional Shares
would have been $1,465,376.
THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE.
The Fund is measured against the Merrill Lynch High Yield Master Index which is
an unmanaged index consisting of all domestic and Yankee high-yield bonds
maturing over 1 year. The quality range is less than BBB-/Baa3 but not in
default (DDD1 or less). The index does not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance reflects the deduction of fees for these services.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
AVERAGE ANNUAL TOTAL RETURNS
AS OF 10/31/04 (%)
------------------------------------
SEIX INSTITUTIONAL HIGH YIELD SINCE
BOND FUND + INCEPTION DATE 1 YEAR 3 YEAR INCEPTION
- ----------------------------- -------------- ------ ------ ---------
INSTITUTIONAL SHARES (12/29/00) 9.97 9.99 10.47
T SHARES (10/11/04) 9.96 9.98 10.47
L SHARES* (10/11/04) 7.93 9.97 10.46
A SHARES* (12/21/01) 5.61 8.26 9.12
MERRILL LYNCH HIGH YIELD MASTER INDEX (12/31/00) 12.07 11.69 9.58
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO
THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM.
*CLASS A SHARE PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE OF 3.75%
AND CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE)
OF 2.00% IN YEAR ONE ONLY.
+ The quoted returns reflect the performance from December 29, 2000 to October
11, 2004 of the Seix High Yield Fund, an open-end investment company that
was the predecessor fund to the Seix Institutional High Yield Fund.
Performance for the Institutional Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix High Yield
Fund's Class I Shares prior to that date.
Performance for the Class T and L Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix High Yield
Fund's Class I Shares prior to that date. The historical performance has not
been adjusted to reflect the Fund's T or L Share expenses. If it had been,
the performance would have been lower.
The Class A Shares began operating on October 11, 2004. Performance between
December 29, 2000 to December 21, 2001 and December 21, 2001 to October 11,
2004 is that of the Class I Shares and Class P Shares, respectively, of the
Seix Core Bond Fund, the Fund's predecessor. The performance of the
predecessor fund's Class I Shares has not been adjusted to reflect the
Fund's A Share expenses. If it had been, the performance would have been
lower.
8
CLASSIC INSTITUTIONAL LIMITED DURATION FUND
INVESTMENT CONCERNS
Bonds offer a relatively stable level of income, although bond prices will
fluctuate providing the potential for principal gain or loss. Intermediate-term,
higher-quality bonds generally offer less risk than longer-term bonds and a
lower rate of return.
The Classic Institutional Limited Duration Fund ("the Fund") seeks to provide a
high level of current income while preserving principal and providing liquidity.
The Fund will invest predominantly in short duration investment grade bonds with
an emphasis on mortgage and asset backed securities. For the year ended October
31, 2004, the Fund's Institutional Shares had a total return net of fees of
1.09% versus a return of 1.16% for its comparative benchmark, the Merrill Lynch
3-Month Treasury Bill Index, which has no fees deducted.
The strategies implemented in the Fund outperformed the benchmark, but by an
amount slightly less than the fees. Consequently, the Fund slightly
underperformed its benchmark net of fees.
The period began in the midst of a slow, but visible, economic expansion.
Interest rates were artificially low led primarily by a moribund employment
environment. As the economy gained steam in the Fourth Quarter and non-farm
payroll releases relayed the first of twelve consecutive months of job
increases, the Fed became pro-active and the yield curve flattened
considerably. The Fed raised short term rates three times beginning on June 30
bringing the Fed Funds rate to a level of 1.75% from 1.00%. The spread between
two and thirty year Treasury securities fell precipitously from 3.42% to 2.28%.
While short rates rose, intermediate and long term yields were relatively
unchanged. Inflation was not a factor despite a nominal rise. This shift in the
yield curve, along with the continuing strength of the credit markets, was
critical to the Fund's investment strategy.
The Fund strives to match short term interest rates through its use of floating
rate securities and short duration fixed rate bonds including Treasury and
Government Agency securities. Floating rate asset backed and collateralized
mortgage obligations are normally pegged to three month LIBOR (London Interbank
Offered Rate)(1), a common short duration domestic interest rate indicator. The
duration of the Fund is kept within a tight average life between 30 and 90 days.
The quality of the securities in the Fund's underlying portfolio, on average,
were rated AAA (by Standard & Poor's).(2, 3)
(1) LIBOR (London Interbank Offered Rate) is the rate of interest at which banks
borrow funds from other banks, in marketable size, in the London interbank
market.
(2) Portfolio composition is subject to change.
(3) The Moody's or Standard and Poor's Fund Ratings represent an opinion only,
not a recommendation to buy or sell.
Portfolio Composition as of October 31, 2004
(as a percentage of total investments)
[PIE CHART]
U.S. Treasury Obligations 51.4%
Cash Equivalents 42.7%
Repurchase Agreements 5.9%
PORTFOLIO COMPOSITION IS SUBJECT TO CHANGE
9
GROWTH OF $10,000 INVESTMENT AS OF OCTOBER 31, 2004
[GRAPH]
Classic Institutional Limited Duration Fund (Institutional Shares) Merrill Lynch High Yield Master Index
------------------------------------------------------------------ -------------------------------------
10/25/02 10000 10000
12/02 10014 10028
10031 10058
10068 10092
10093 10117
12/03 10111 10143
10140 10167
10155 10191
10188 10229
10/31/04 10202 10242
CLASSIC INSTITUTIONAL LIMITED DURATION FUND
Assumes initial investment of $10,000 occurred on the Fund's inception date.
The minimum investment for the Institutional Shares is $1 million. Based on the
initial investment of $1 million, the ending value of the Institutional Shares
would have been $1,020,199.
THE PERFORMANCE QUOTED HEREIN REPRESENTS PAST PERFORMANCE.
The Fund is measured against the Merrill Lynch 3-Month U.S. Treasury Index
tracks the monthly price-only and total return performance of a three-month
Treasury bill, based on monthly average auction rates.
AVERAGE ANNUAL
TOTAL RETURNS AS OF
10/31/04 (%)
------------
CLASSIC INSTITUTIONAL SINCE
LIMITED DURATION FUND + INCEPTION DATE 1 YEAR INCEPTION
- ----------------------- -------------- ------ ---------
INSTITUTIONAL SHARES (10/25/02) 1.09 1.00
T SHARES (10/11/04) 1.09 1.00
L SHARES* (10/11/04) -0.93 0.99
MERRILL LYNCH 3-MONTH
U.S. TREASURY BILL INDEX (10/31/02) 1.16 1.02
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE AND CURRENT RETURNS MAY BE LOWER OR HIGHER. TOTAL
RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AND DO NOT REFLECT TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. THE INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. FOR PERFORMANCE DATA CURRENT TO
THE MOST RECENT MONTH END, VISIT OUR WEBSITE AT WWW.STICLASSICFUNDS.COM.
*CLASS L SHARES REFLECT THE MAXIMUM CDSC (CONTINGENT DEFERRED SALES CHARGE) OF
2.00% IN YEAR ONE ONLY.
+ The quoted returns reflect the performance from October 25, 2002 to October
11, 2004 of the Seix Limited Duration Fund, and open-end Investment company
that was the predecessor fund to the Classic Institutional Limited Duration
Fund.
Performance for the Institutional Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Limited Duration
Fund's Class I Shares prior to that date.
Performance for the Class T and L Shares, which commenced operations on
October 11, 2004, is the historical performance of the Seix Limited Duration
Fund's Class I shares prior to that date. The historical performance has not
been adjusted to reflect the Fund's T or L Shares expenses. If it has been,
the performance would have been lower.
10
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL CORE BOND FUND
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
ASSET BACKED SECURITIES (0.4%)
HOME EQUITY ABS (0.4%)
Aames Mortgage Trust, Ser
1999-1, Cl AF, 7.290%,
07/15/29 $ 50 $ 51
Aames Mortgage Trust, Ser
1999-2, Cl AF, 7.589%,
10/15/29 34 35
Cityscape Home Equity Loan
Trust, Ser 1996-3, Cl A8,
7.650%, 09/25/25 53 53
Delta Funding Home Equity Loan
Trust, Ser 1999-3, Cl A1F,
7.462%, 09/15/29 18 19
EQCC Home Equity Loan Trust, Ser
1999-3, Cl A7F, 7.448%,
08/25/30 16 16
New Century Home Equity Loan
Trust, Ser 1999-NCB, Cl A4,
7.530%, 09/25/28 3 3
New Century Home Equity Loan
Trust, Ser 1999-NCB, Cl A7,
7.540%, 06/25/29 21 21
Soundview Home Equity Loan
Trust, Ser 2001-1, Cl A,
6.265%, 04/15/31 27 28
-------
Total Asset Backed Securities
(Cost $230) 226
-------
CORPORATE BONDS (30.1%)
AUTO MANUFACTURERS (2.4%)
American Honda Finance Corp.,
3.850%, 11/06/08 (c) 160 161
DaimlerChrysler NA Holdings
Corp., 8.500%, 01/18/31 100 124
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->AUTO MANUFACTURERS--CONTINUED
Ford Motor Co., 7.450%, 07/16/31 $ 620 $ 604
General Motors Corp., 8.375%,
07/15/33 375 390
Harley Davidson Funding, Inc.,
3.625%, 12/15/08 90 90
-------
1,369
-------
BANKS (4.0%)
Bank of America Corp., 7.400%,
01/15/11 335 393
Bank One Corp., 7.625%, 08/01/05 105 109
BNP US Funding LLC, 7.738%,
Callable 12/05/07
@ 100.00 (b) (c) (d) 170 191
Capital One Bank, 5.125%,
02/15/14 250 251
Citigroup, Inc., 5.125%,
05/05/14 125 129
Citigroup, Inc., 5.875%,
02/22/33 185 187
JP Morgan Chase & Co., 6.625%,
03/15/12 440 498
Royal Bank of Scotland Group
PLC, 7.648%, Callable 09/30/31
@ 100 (b) (d) 135 163
Societe Generale Real Estate Co.
LLC, 7.640%, Callable 09/30/07
@ 100.00 (c) (d) 100 111
Wachovia Corp., 7.550%, 08/18/05 135 140
Wells Fargo & Co., 4.800%,
07/29/05 55 56
-------
2,228
-------
</Table>
11
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
BEVERAGES (0.4%)
Coca-Cola Co., 4.000%, 06/01/05 $ 110 $ 111
Miller Brewing Co., 4.250%,
08/15/08 (c) 135 138
-------
249
-------
BROKERAGE (1.3%)
Goldman Sachs Group, Inc. (The),
3.875%, 01/15/09 100 101
Goldman Sachs Group, Inc. (The),
4.750%, 07/15/13 80 79
Goldman Sachs Group, Inc. (The),
6.345%, 02/15/34 165 168
Merrill Lynch & Co., 3.700%,
04/21/08 60 60
Morgan Stanley, 5.300%, 03/01/13 315 328
-------
736
-------
BUILDING MATERIALS (0.3%)
American Standard, Inc., 7.625%,
02/15/10 145 166
-------
COMMERCIAL SERVICES (0.6%)
ERAC USA Finance Co., 7.350%,
06/15/08 (c) 140 157
R.R. Donnelley & Sons Co.,
3.750%, 04/01/09 175 174
-------
331
-------
COMPUTERS (0.1%)
NCR Corp., 7.125%, 06/15/09 70 78
-------
COSMETICS/PERSONAL CARE (0.1%)
Gillette Co. (The), 3.750%,
12/01/04 (c) 80 80
-------
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (1.5%)
CIT Group, Inc., 5.750%,
09/25/07 $ 65 $ 69
CIT Group, Inc., 5.500%,
11/30/07 115 122
CIT Group, Inc., 5.125%,
09/30/14 80 81
Household Finance Corp., 7.625%,
05/17/32 145 180
International Lease Finance
Corp., 4.750%, 07/01/09 290 297
MBNA Corp., 7.500%, 03/15/12 100 117
-------
866
-------
DIVERSIFIED MANUFACTURING (1.8%)
General Electric Co., 5.000%,
02/01/13 630 653
Tyco International Group SA,
6.000%, 11/15/13 160 175
Tyco International Group SA,
6.875%, 01/15/29 145 165
-------
993
-------
ELECTRIC (3.3%)
Appalachian Power Co., Ser E,
4.800%, 06/15/05 70 71
Calenergy Co., Inc., 7.520%,
09/15/08 70 79
Carolina Power & Light Co.,
6.500%, 07/15/12 80 89
Cincinnati Gas & Electric Co.,
5.700%, 09/15/12 75 80
Comed Financing III, 6.350%,
03/15/33 95 96
Dominion Resources, Inc., Ser B,
7.625%, 07/15/05 130 135
Dominion Resources, Inc., Ser E,
6.750%, 12/15/32 90 98
</Table>
12
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL CORE BOND FUND -- CONTINUED
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->ELECTRIC--CONTINUED
Entergy Gulf States, Inc.,
5.200%, 12/03/07, Callable
12/01/04 @ 100.00 $ 120 $ 120
Entergy Gulf States, Inc.,
4.875%, 11/01/11, Callable
11/01/06 @ 100.00 135 135
Exelon Generation Co. LLC,
6.950%, 06/15/11 35 40
Florida Power & Light Co.,
6.875%, 12/01/05 35 37
Northern States Power Co.,
2.875%, 08/01/06 60 60
Oncor Electric Delivery Co.,
7.000%, 05/01/32 80 93
Pacific Gas & Electric Co.,
6.050%, 03/01/34 275 283
Public Service Co. of Colorado,
Ser 14, 4.375%, 10/01/08 135 138
Westar Energy, Inc., 7.875%,
05/01/07 140 155
Westar Energy, Inc., 6.000%,
07/01/14 130 141
-------
1,850
-------
ENVIRONMENT CONTROL (0.3%)
Waste Management, Inc., 6.500%,
11/15/08 165 182
-------
FOREST PRODUCTS & PAPER (0.4%)
Weyerhaeuser Co., 6.750%,
03/15/12 110 124
Weyerhaeuser Co., 7.375%,
03/15/32 65 76
-------
200
-------
GAS (0.2%)
Sempra Energy, 4.750%, 05/15/09 105 108
-------
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
HEALTHCARE -- PRODUCTS (0.2%)
Johnson & Johnson, 8.720%,
11/01/24, Callable 11/01/04 @
104.36 $ 110 $ 115
-------
HEALTHCARE -- SERVICES (0.6%)
Anthem Insurance Cos., Inc.,
9.000%, 04/01/27 (c) 130 178
WellPoint Health Networks, Inc.,
6.375%, 06/15/06 135 142
-------
320
-------
HOME BUILDERS (0.4%)
Lennar Corp., 5.950%, 03/01/13 90 96
Pulte Homes, Inc., 4.875%,
07/15/09 140 143
-------
239
-------
HOUSEHOLD PRODUCTS/WARES (0.2%)
Dial Corp. (The), 7.000%,
08/15/06 120 128
-------
INSURANCE (1.0%)
Berkshire Hathaway Financial
Corp., 3.375%, 10/15/08 175 175
MetLife, Inc., 5.250%, 12/01/06 75 78
Monumental Global Funding,
5.200%, 01/30/07 (c) 105 110
Prudential Financial, Inc.,
3.750%, 05/01/08 75 75
Prudential Financial, Inc.,
5.100%, 09/20/14 130 130
-------
568
-------
INVESTMENT COMPANIES (0.3%)
Credit Suisse First Boston USA,
Inc., 6.500%, 01/15/12 140 157
-------
LEISURE TIME (0.1%)
GTECH Holdings Corp., 4.750%,
10/15/10 80 81
-------
</Table>
13
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
LODGING (0.1%)
Marriott International, Inc.,
Ser C, 7.875%, 09/15/09 $ 35 $ 41
-------
MACHINERY (0.1%)
John Deere Capital Corp.,
3.900%, 01/15/08 75 76
-------
MEDIA (2.5%)
British Sky Broadcasting Group
PLC, 6.875%, 02/23/09 205 227
Comcast Cable Communications,
Inc., 7.125%, 06/15/13 335 384
Cox Communications, Inc.,
4.625%, 06/01/13 160 153
News America Holdings, Inc.,
9.250%, 02/01/13 140 181
Time Warner, Inc., 6.750%,
04/15/11 100 113
Time Warner, Inc., 7.625%,
04/15/31 150 178
Univision Communications, Inc.,
7.850%, 07/15/11 125 148
-------
1,384
-------
MINING (1.1%)
Barrick Gold Finance, Inc.,
7.500%, 05/01/07 70 77
Codelco, Inc., 5.500%,
10/15/13 (c) 205 215
Inco, Ltd., 7.750%, 05/15/12 280 333
-------
625
-------
OIL & GAS (1.9%)
BP Capital Markets PLC, 4.000%,
04/29/05 175 176
Devon Financing Corp. ULC,
7.875%, 09/30/31 205 259
Enterprise Products Partners LP,
Ser B, 6.875%, 03/01/33 130 136
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->OIL & GAS--CONTINUED
Motiva Enterprises LLC, 5.200%,
09/15/12 (c) $ 110 $ 115
Pennzoil Co., 10.250%, 11/01/05 25 27
Phillips Petroleum Co., 6.375%,
03/30/09 45 50
Phillips Petroleum Co., 8.750%,
05/25/10 80 99
XTO Energy, Inc., 6.250%,
04/15/13 185 204
-------
1,066
-------
PACKAGING & CONTAINERS (0.2%)
Packaging Corp. of America,
5.750%, 08/01/13 125 129
-------
PIPELINES (1.2%)
Centerpoint Energy Resources
Co., Ser B, 7.875%, 04/01/13 205 245
K N Capital Trust III, 7.630%,
04/15/28 175 194
KN Energy, Inc., 7.250%,
03/01/28 65 73
Panhandle Eastern Pipeline,
2.750%, 03/15/07 70 69
Panhandle Eastern Pipeline, Ser
B, 4.800%, 08/15/08 105 109
-------
690
-------
PROPERTY AND CASUALTY INSURANCE (0.4%)
Fund American Cos., Inc.,
5.875%, 05/15/13 225 229
-------
REAL ESTATE (0.2%)
Simon Property Group LP, (REIT),
6.375%, 11/15/07 80 86
-------
SAVINGS & LOANS (0.3%)
Golden West Financial Corp.,
4.125%, 08/15/07 155 159
-------
</Table>
14
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL CORE BOND FUND -- CONTINUED
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
SOVEREIGN (0.3%)
China Development Bank, 4.750%,
10/08/14 $ 180 $ 178
-------
TELECOMMUNICATIONS (1.8%)
Deutsche Telekom International
Finance, 9.250%, 06/01/32 90 129
SBC Communications, Inc.,
5.625%, 06/15/16 30 31
SBC Communications, Inc.,
6.450%, 06/15/34 155 163
Sprint Capital Corp., 8.750%,
03/15/32 280 367
TELUS Corp., 8.000%, 06/01/11 155 183
Verizon Global Funding Corp.,
7.750%, 12/01/30 115 141
-------
1,014
-------
TRANSPORTATION (0.5%)
FedEx Corp., 3.500%, 04/01/09 260 257
-------
Total Corporate Bonds
(Cost $16,542) 16,978
-------
FOREIGN GOVERNMENT BOND (0.6%)
MEXICO (0.6%)
Mexican United States, 8.300%,
08/15/31 295 341
-------
Total Foreign Government Bond
(Cost $325) 341
-------
U.S. GOVERNMENT AGENCIES (32.5%)
FANNIE MAE (24.0%)
5.500%, 03/01/16 244 253
6.000%, 08/01/16 101 106
6.000%, 03/01/18 77 81
4.500%, 10/01/18 405 407
6.000%, 12/01/18 86 90
5.000%, 08/01/19 283 289
5.000%, 09/01/19 174 178
5.000%, 10/01/19 186 190
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->FANNIE MAE--CONTINUED
5.000%, 10/01/19 $ 297 $ 303
5.000%, 11/18/19 1,683 1,718
5.500%, 11/18/19 902 935
6.500%, 09/01/24 34 36
6.500%, 12/01/27 10 10
6.500%, 05/01/28 3 3
6.500%, 11/01/28 17 18
6.500%, 02/01/29 51 54
6.500%, 05/01/29 68 71
6.500%, 02/01/30 9 9
6.000%, 04/01/31 43 44
7.000%, 04/01/31 114 122
7.000%, 06/01/31 12 12
7.000%, 11/01/31 50 53
6.500%, 06/01/32 133 140
6.500%, 10/01/32 27 28
6.500%, 11/01/32 30 32
6.500%, 11/01/32 19 20
5.500%, 02/01/33 552 563
6.500%, 02/01/33 47 49
5.500%, 03/01/33 143 146
5.000%, 04/01/33 43 43
5.500%, 04/01/33 188 191
5.500%, 04/01/33 273 278
5.500%, 04/01/33 185 189
7.000%, 04/01/33 135 143
5.500%, 05/01/33 183 187
6.500%, 05/01/33 99 104
7.000%, 05/01/33 31 33
5.500%, 06/01/33 93 95
7.000%, 06/01/33 47 50
5.500%, 07/01/33 64 65
5.000%, 08/01/33 744 744
5.500%, 08/01/33 246 251
7.000%, 08/01/33 45 48
5.500%, 10/01/33 48 49
5.500%, 10/01/33 159 162
</Table>
15
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->FANNIE MAE--CONTINUED
6.500%, 10/01/33 $ 41 $ 43
6.500%, 10/01/33 136 144
6.500%, 10/01/33 190 200
6.500%, 10/01/33 121 127
6.500%, 10/01/33 143 150
6.500%, 10/01/33 5 6
7.000%, 10/01/33 34 36
7.000%, 10/01/33 37 40
5.500%, 11/01/33 185 189
5.500%, 11/01/33 796 813
5.500%, 11/01/33 133 136
6.000%, 11/01/33 271 282
6.000%, 11/01/33 136 141
6.000%, 11/01/33 83 86
6.500%, 11/01/33 153 161
6.500%, 11/01/33 51 53
7.000%, 11/01/33 25 26
6.000%, 12/01/33 95 99
6.000%, 12/01/33 113 117
7.000%, 12/01/33 274 291
6.000%, 03/01/34 135 140
6.000%, 04/01/34 164 170
6.000%, 04/01/34 137 142
6.000%, 04/01/34 131 136
6.000%, 05/01/34 120 125
6.000%, 05/01/34 128 133
6.500%, 05/01/34 395 416
6.500%, 06/01/34 23 24
5.500%, 11/15/34 532 542
-------
13,560
-------
FREDDIE MAC (6.5%)
4.500%, 11/20/19 44 44
8.500%, 03/01/20 2 2
6.500%, 10/01/29 60 63
5.000%, 02/01/33 745 746
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->FREDDIE MAC--CONTINUED
5.500%, 05/01/33 $ 23 $ 24
5.000%, 06/01/33 147 147
5.500%, 06/01/33 179 182
5.000%, 07/01/33 265 265
5.500%, 10/01/33 136 139
6.000%, 10/01/33 49 51
6.000%, 12/01/33 201 209
5.000%, 01/01/34 256 255
6.000%, 01/01/34 74 77
6.000%, 01/01/34 128 132
6.500%, 03/01/34 84 88
6.000%, 06/01/34 273 283
6.000%, 07/01/34 181 188
6.500%, 08/01/34 182 191
5.500%, 11/15/34 591 602
-------
3,688
-------
GINNIE MAE (2.0%)
7.500%, 04/15/29 3 4
7.500%, 01/15/31 6 6
7.500%, 04/15/31 6 6
7.500%, 05/15/31 5 5
7.500%, 05/15/31 19 21
7.000%, 07/15/31 158 169
7.500%, 09/15/31 21 23
7.500%, 10/15/31 36 39
7.500%, 11/15/31 4 5
6.500%, 04/15/32 45 48
6.500%, 07/15/32 38 40
7.500%, 07/15/32 59 63
6.500%, 08/15/32 87 92
6.500%, 11/15/32 43 45
6.500%, 01/15/33 69 73
6.000%, 03/15/33 39 40
6.000%, 04/15/33 131 137
</Table>
16
CLASSIC INSTITUTIONAL CORE BOND FUND -- CONCLUDED
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->GINNIE MAE--CONTINUED
5.000%, 07/15/33 $ 160 $ 161
5.000%, 08/15/33 156 157
-------
1,134
-------
Total U.S. Government Agencies
(Cost $18,166) 18,382
-------
U.S. TREASURY OBLIGATIONS (32.1%)
U.S. TREASURY BONDS (6.5%)
3.875%, 04/15/29 1,100 1,686
5.375%, 02/15/31 1,805 1,960
-------
3,646
-------
U.S. TREASURY INFLATION PROTECTED NOTES (6.3%)
1.875%, 07/15/13 3,370 3,579
-------
U.S. TREASURY NOTES (19.3%)
2.000%, 11/30/04 4,005 4,005
1.625%, 01/31/05 4,400 4,397
1.500%, 02/28/05 930 928
1.625%, 04/30/05 1,395 1,392
4.250%, 08/15/14 170 173
-------
10,895
-------
Total U.S. Treasury Obligations
(Cost $17,970) 18,120
-------
CASH EQUIVALENTS (6.3%)
CREDIT CARD ABS (1.8%)
American Express Credit Account
Master Trust, Ser 2000-2, Cl
A, 2.035%, 09/17/07 (b) 195 195
BA Master Credit Card Trust, Ser
2001-A, Cl A, 1.990%,
06/15/08 (b) 380 381
Bank One Issuance Trust, Ser
2003, Cl A2, 1.920%,
10/15/08 (b) 276 276
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->CREDIT CARD ABS--CONTINUED
Citibank Credit Card Issuance
Trust, Ser 2002-A5, Cl A5,
1.920%, 09/17/07 (b) $ 143 $ 143
-------
995
-------
FANNIE MAE (0.6%)
Ser 2002-T10, C1 A1, 2.053%,
06/25/32 (b) 57 57
Ser 2002-T13, C1 A1, 2.033%,
08/25/32 (b) 109 109
Ser 2003-T4, C1 A1, 2.043%,
09/26/33 (b) 145 145
-------
311
-------
FREDDIE MAC (0.1%)
Ser T-049, C1 AV, 2.083%,
12/25/32 (b) 66 66
-------
HOME EQUITY ABS (0.6%)
Mellon Bank Home Equity Loan
Trust, Ser 2001-1, Cl A,
2.150%, 03/20/27 (b) 132 132
MSDWCC Home Equity Line of
Credit Trust, Ser 2003-1, Cl
A, 2.203%, 11/25/15 (b) 164 164
Residential Funding Mortgage
Securities I, Ser 2003-HS1, Cl
A2, 2.223%, 12/25/32 (b) 53 53
-------
349
-------
OTHER ABS (3.2%)
Amortizing Residential
Collateral Trust, Ser
2002-BC1F, Cl A, 2.213%,
01/25/32 (b) 196 195
Amortizing Residential
Collateral Trust, Ser
2002-BC3M, Cl A, 2.203%,
06/25/32 (b) 141 141
</Table>
17
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->OTHER ABS--CONTINUED
Countrywide Home Equity Loan
Trust, Ser 2002 B, Cl A1,
2.120%, 04/15/28 (b) $ 326 $ 326
Countrywide Home Equity Loan
Trust, Ser 2002 D, Cl A1,
2.110%, 08/15/28 (b) 355 353
Fleet Home Equity Loan Trust,
Ser 2003-1, Cl A, 2.160%,
01/20/33 (b) 123 123
Greenpoint Home Equity Loan
Trust, Ser 2001-1, Cl A2,
2.330%, 04/15/27 (b) 56 56
Greenpoint Home Equity Loan
Trust, Ser 2003-1, Cl A,
2.140%, 04/15/29 (b) 130 130
Merrill Lynch Home Equity Loan,
Ser 1997-1, Cl A, 2.113%,
09/25/27 (b) 74 74
Residential Asset Mortgage
Products, Inc., Ser 2003- RS2,
Cl A2, 2.273%, 03/25/33 (b) 1 1
Wachovia Asset Securitization,
Inc., Ser 2002-HE2, Cl A,
2.363%, 12/25/32 (b) 356 357
Wachovia Asset Securitization,
Inc., Ser 2003-HE1, Cl A1,
2.223%, 03/25/33 (b) 81 81
-------
1,837
-------
Total Cash Equivalents (Cost
$3,560) 3,558
-------
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
REPURCHASE AGREEMENT (4.7%)
Lehman Brothers, 1.745%, dated
10/29/04, to be repurchased on
11/01/04, repurchase price
$2,625,560 (collateralized by
U.S. Government Agencies;
total market value $2,679,677) $2,625 $ 2,625
-------
Total Repurchase Agreement (Cost
$2,625) 2,625
-------
Total Investments (Cost $59,418)
(a) -- 106.7% 60,230
Liabilities in excess of other
assets -- (6.7)% (3,792)
-------
Net Assets -- 100.0% $56,438
=======
</Table>
See notes to schedules of portfolio investments and notes to financial
statements.
18
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
ASSET BACKED SECURITIES (1.1%)
HOME EQUITY ABS (1.1%)
Aames Mortgage Trust, Ser
1999-1, Cl AF, 7.290%,
07/15/29 $ 47 $ 48
Aames Mortgage Trust, Ser
1999-2, Cl AF, 7.589%,
10/15/29 60 62
Cityscape Home Equity Loan
Trust, Ser 1996-3, Cl 8,
7.650%, 09/25/25 27 27
Contimortgage Home Equity Loan
Trust, Ser 1996-2, Cl A8,
7.900%, 07/15/27 130 129
Delta Funding Home Equity Loan
Trust, Ser 1999-3, Cl A1F,
7.462%, 09/15/29 17 18
EQCC Home Equity Loan Trust, Ser
1999-3, Cl A7F, 7.448%,
08/25/30 17 17
New Century Home Equity Loan
Trust, Ser 1999-NCB, Cl A4,
7.530%, 09/25/28 4 4
New Century Home Equity Loan
Trust, Ser 1999-NCB, Cl A7,
7.540%, 06/25/29 15 16
Soundview Home Equity Loan
Trust, Ser 2001-1, Cl A,
6.265%, 04/15/31 65 66
-------
Total Asset Backed Securities
(Cost $392) 387
-------
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
CORPORATE BONDS (40.0%)
AUTO MANUFACTURERS (0.9%)
American Honda Finance Corp.,
3.850%, 11/06/08 (c) $ 110 $ 111
DaimlerChrysler NA Holdings
Corp., 7.300%, 01/15/12 110 126
Harley Davidson Funding, Inc.,
3.625%, 12/15/08 85 85
-------
322
-------
BANKS (6.7%)
Bank of America Corp., 7.400%,
01/15/11 305 357
Bank One Corp., 7.625%, 08/01/05 110 114
BNP US Funding LLC, 7.738%,
Callable 12/05/07 @ 100.00 (b)
(c) (d) 240 269
Capital One Bank, 5.125%,
02/15/14 130 131
Citigroup, Inc., 5.125%,
05/05/14 310 321
JP Morgan Chase & Co., 6.625%,
03/15/12 400 452
RBS Capital Trust I, 4.709%,
Callable 07/01/13 @ 100 (b)
(d) 285 279
Societe Generale Real Estate Co.
LLC, 7.640%, Callable 09/30/07
@ 100.00 (c) (d) 90 100
Wachovia Corp., 7.550%, 08/18/05 115 120
Wells Fargo & Co., 5.125%,
02/15/07 255 266
-------
2,409
-------
BEVERAGES (0.4%)
Coca-Cola Co., 4.000%, 06/01/05 125 126
-------
BROKERAGE (3.1)%
Goldman Sachs Group, Inc. (The),
3.875%, 01/15/09 125 126
</Table>
19
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->BROKERAGE--CONTINUED
Goldman Sachs Group, Inc. (The),
4.750%, 07/15/13 $ 330 $ 327
Merrill Lynch & Co., 3.700%,
04/21/08 55 55
Morgan Stanley, 5.800%, 04/01/07 420 446
Morgan Stanley, 5.300%, 03/01/13 160 166
-------
1,120
-------
BUILDING MATERIALS (0.4%)
American Standard, Inc., 7.625%,
02/15/10 135 155
-------
COMMERCIAL SERVICES (0.6%)
ERAC USA Finance Co., 7.350%,
06/15/08 (c) 75 84
R.R. Donnelley & Sons Co.,
3.750%, 04/01/09 135 135
-------
219
-------
COMPUTERS (0.2%)
NCR Corp., 7.125%, 06/15/09 70 78
-------
COSMETICS/PERSONAL CARE (0.1)%
Gillette Co. (The), 3.750%,
12/01/04 (c) 40 40
-------
DIVERSIFIED FINANCIAL SERVICES (8.5)%
CIT Group, Inc., 5.750%,
09/25/07 60 64
CIT Group, Inc., 5.500%,
11/30/07 105 111
CIT Group, Inc., 5.125%,
09/30/14 70 70
Ford Motor Credit Co., 7.000%,
10/01/13 540 570
General Electric Capital Corp.,
4.250%, 01/15/08 660 680
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->DIVERSIFIED FINANCIAL
SERVICES--CONTINUED
General Motors Acceptance Corp.,
6.875%, 09/15/11 $ 480 $ 500
Household Finance Corp., 4.125%,
12/15/08 510 518
International Lease Finance
Corp., 4.750%, 07/01/09 265 272
MBNA Corp., 7.500%, 03/15/12 120 140
Sallie Mae, Inc., 5.625%,
04/10/07 70 74
-------
2,999
-------
DIVERSIFIED MANUFACTURING (1.6%)
General Electric Co., 5.000%,
02/01/13 160 166
Tyco International Group SA,
6.000%, 11/15/13 360 393
-------
559
-------
ELECTRIC (2.3%)
Calenergy Co., Inc., 7.520%,
09/15/08 100 113
Entergy Gulf States, Inc.,
5.200%, 12/03/07, Callable
12/01/04 @ 100.00 140 140
Entergy Gulf States, Inc.,
4.875%, 11/01/11, Callable
11/01/06 @ 100.00 65 65
Exelon Generation Co. LLC,
6.950%, 06/15/11 60 68
Florida Power & Light Co.,
6.875%, 12/01/05 55 58
Northern States Power Co.,
2.875%, 08/01/06 70 70
Oncor Electric Delivery Co.,
6.375%, 05/01/12 80 89
</Table>
20
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND -- CONTINUED
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->ELECTRIC--CONTINUED
Pacific Gas & Electric Co.,
4.800%, 03/01/14 $ 190 $ 190
Westar Energy, Inc., 6.000%,
07/01/14 40 43
-------
836
-------
FOREST PRODUCTS & PAPER (0.3%)
Weyerhaeuser Co., 6.750%,
03/15/12 85 96
-------
HEALTHCARE -- PRODUCTS (0.6%)
Johnson & Johnson, 8.720%,
11/01/24, Callable 11/01/04 @
104.36 195 204
-------
HEALTHCARE -- SERVICES (0.2%)
WellPoint Health Networks, Inc.,
6.375%, 06/15/06 55 58
-------
HOME BUILDERS (0.5%)
Lennar Corp., 5.950%, 03/01/13 40 42
Pulte Homes, Inc., 4.875%,
07/15/09 130 133
-------
175
-------
INSURANCE (1.8%)
Berkshire Hathaway Financial
Corp., 3.375%, 10/15/08 235 235
MetLife, Inc., 5.250%, 12/01/06 55 57
Monumental Global Funding,
5.200%, 01/30/07 (c) 165 173
Prudential Financial, Inc.,
3.750%, 05/01/08 75 75
Prudential Financial, Inc.,
5.100%, 09/20/14 115 115
-------
655
-------
INVESTMENT COMPANIES (0.4%)
Credit Suisse First Boston USA,
Inc., 6.500%, 01/15/12 135 151
-------
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
MACHINERY (0.2%)
John Deere Capital Corp.,
3.900%, 01/15/08 $ 85 $ 86
-------
MEDIA (2.2%)
British Sky Broadcasting Group
PLC, 6.875%, 02/23/09 120 133
Comcast Cable Communications,
Inc., 7.125%, 06/15/13 190 218
News America Holdings, Inc.,
9.250%, 02/01/13 135 175
Time Warner, Inc., 6.750%,
04/15/11 110 124
Univision Communications, Inc.,
7.850%, 07/15/11 130 154
-------
804
-------
MINING (1.3%)
Barrick Gold Finance, Inc.,
7.500%, 05/01/07 75 82
Codelco, Inc., 5.500%,
10/15/13 (c) 145 152
Inco, Ltd., 7.750%, 05/15/12 190 226
-------
460
-------
OIL & GAS (2.4%)
BP Capital Markets PLC, 4.000%,
04/29/05 160 161
Devon Financing Corp., ULC,
6.875%, 09/30/11 145 166
Enterprise Products Operations,
Inc., 5.600%, 10/15/14 (c) 205 209
Motiva Enterprises LLC, 5.200%,
09/15/12 (c) 115 120
Phillips Petroleum Co., 6.375%,
03/30/09 55 61
Phillips Petroleum Co., 8.750%,
05/25/10 105 130
-------
847
-------
</Table>
21
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
PACKAGING & CONTAINERS (0.3%)
Packaging Corp. of America,
5.750%, 08/01/13 $ 115 $ 119
-------
PIPELINES (1.4%)
Centerpoint Energy Resources
Co., Ser B, 7.875%, 04/01/13 190 227
Kinder Morgan, Inc., 6.500%,
09/01/12 105 116
Panhandle Eastern Pipeline,
2.750%, 03/15/07 55 54
Panhandle Eastern Pipeline, Ser
B, 4.800%, 08/15/08 115 119
-------
516
-------
PROPERTY AND CASUALTY INSURANCE (0.3%)
Fund American Cos., Inc.,
5.875%, 05/15/13 100 102
-------
SAVINGS & LOANS (0.3%)
Golden West Financial Corp.,
4.125%, 08/15/07 115 118
-------
TELECOMMUNICATIONS (3.0%)
Deutsche Telekom International
Finance, Corp., 8.500%,
06/15/10 (e) 90 108
SBC Communications, Inc.,
5.625%, 06/15/16 220 228
Sprint Capital Corp., 8.375%,
03/15/12 255 312
</Table>
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->TELECOMMUNICATIONS--CONTINUED
TELUS Corp., 8.000%, 06/01/11 $ 130 $ 154
Verizon Global Funding Corp.,
7.250%, 12/01/10 245 286
-------
1,088
-------
Total Corporate Bonds (Cost
$13,888) 14,342
-------
FOREIGN GOVERNMENT BOND (0.9%)
MEXICO (0.9%)
United Mexican States, 6.375%,
01/16/13 305 324
-------
Total Foreign Government Bond
(Cost $307) 324
-------
U.S. GOVERNMENT AGENCIES (0.6%)
FANNIE MAE (0.4%)
6.000%, 07/01/09 145 149
-------
FREDDIE MAC (0.2%)
6.500%, 08/01/08 69 71
-------
Total U.S. Government Agencies
(Cost $218) 220
-------
U.S. TREASURY OBLIGATIONS (54.8%)
U.S. TREASURY INFLATION PROTECTED NOTES (11.4%)
3.875%, 02/15/13 4,080 4,081
-------
U.S. TREASURY NOTES (43.4%)
2.000%, 11/30/04 2,675 2,675
1.625%, 01/31/05 5,200 5,196
1.500%, 02/28/05 1,685 1,682
1.625%, 04/30/05 1,360 1,357
4.375%, 08/15/12 50 52
</Table>
22
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND -- CONCLUDED
<Table>
<Caption>
- --------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------
<->U.S. TREASURY NOTES--CONTINUED
1.875%, 07/15/13 $3,355 $ 3,563
4.250%, 08/15/14 1,030 1,048
-------
15,573
-------
Total U.S. Treasury Obligations
(Cost $19,491) 19,654
-------
REPURCHASE AGREEMENT (4.1%)
Lehman Brothers, 1.745%, dated
10/29/04, to be repurchased on
11/01/04, repurchase price
$1,474,470 (collateralized by
U.S. Government Agencies;
total market value $1,506,059) 1,474 1,474
-------
Total Repurchase Agreement (Cost
$1,474) 1,474
-------
Total Investments (Cost $35,770)
(a) -- 101.5% 36,401
Liabilities in excess of other
assets -- (1.5)% (550)
-------
Net Assets -- 100.0% $35,851
=======
</Table>
See notes to schedules of portfolio investments and notes to financial
statements.
23
SEIX INSTITUTIONAL HIGH YIELD FUND
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
CORPORATE BONDS (95.8%)
AEROSPACE/DEFENSE (0.5%)
L-3 Communications Corp.,
7.625%, 06/15/12,
Callable 06/15/07 @
103.81 $ 6,333 $ 6,998
L-3 Communications Corp.,
Ser B, 8.000%, 08/01/08,
Callable 12/13/04 @
102.67 1,176 1,211
----------
8,209
----------
AGRICULTURE (0.6%)
Gold Kist, Inc., 10.250%,
03/15/14, Callable
03/15/09 @ 105.12 (c) 3,557 3,922
Seminis, Inc., 10.250%,
10/01/13, Callable
10/01/08 @ 105.13 5,315 5,952
----------
9,874
----------
APPAREL (0.1%)
William Carter Co. (The),
Ser B, 10.875%, 08/15/11,
Callable 08/15/06 @
105.44 1,049 1,175
----------
AUTO MANUFACTURERS (0.1%)
Navistar International
Corp., 7.500%, 06/15/11,
Callable 06/15/08 @
103.75 1,256 1,356
----------
BEVERAGES (0.4%)
Constellation Brands, Inc.,
8.625%, 08/01/06 4,315 4,676
Constellation Brands, Inc.,
Ser B, 8.125%, 01/15/12,
Callable 01/15/07 @
104.06 1,356 1,485
----------
6,161
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
BIOTECHNOLOGY (0.0%)
Bio-Rad Laboratories, Inc.,
7.500%, 08/15/13,
Callable 08/15/08 @
103.75 $ 500 $ 541
----------
BUILDING MATERIALS (1.1%)
Ainsworth Lumber, 5.669%,
10/01/10, Callable
10/01/06 @ 102.00 (b) (c) 1,835 1,853
Ainsworth Lumber, 7.250%,
10/01/12, Callable
10/01/08 @ 103.63 (c) 3,650 3,696
American Standard, Inc.,
7.375%, 02/01/08 2,675 2,956
Building Materials Corp.,
7.750%, 08/01/14,
Callable 08/01/09 @
103.88 (c) 2,090 2,074
Ply Gem Industries, Inc.,
9.000%, 02/15/12,
Callable 02/15/08 @
104.50 (c) 1,340 1,337
THL Buildco, Inc., 8.500%,
09/01/14, Callable
09/01/09 @ 104.25 (c) 4,295 4,553
US Concrete, Inc., 8.375%,
04/01/14, Callable
04/01/09 @ 104.88 2,810 3,003
----------
19,472
----------
CHEMICALS (2.4%)
Acetex Corp., 10.875%,
08/01/09, Callable
08/01/05 @ 105.44 1,991 2,190
Airgas, Inc., 6.250%,
07/15/14, Callable
07/15/09 @ 103.13 1,380 1,394
ARCO Chemical Co., 10.250%,
11/01/10 4,425 4,956
</Table>
24
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->CHEMICALS--CONTINUED
FMC Corp., 10.250%,
11/01/09, Callable
11/01/06 @ 105.13 $ 8,872 $ 10,291
FMC Corp., Ser A, 7.000%,
05/15/08 997 1,047
Huntsman LLC, 11.625%,
10/15/10, Callable
10/15/07 @ 105.81 5,036 5,936
Lyondell Chemical Co.,
11.125%, 07/15/12,
Callable 07/15/07 @105.56 4,156 4,899
MacDermid, Inc., 9.125%,
07/15/11, Callable
07/15/06 @ 104.56 3,785 4,230
Nalco Co., 7.750%,
11/15/11, Callable
11/15/07 @ 103.88 5,470 5,921
----------
40,864
----------
COAL (0.8%)
Foundation PA Coal Co.,
7.250%, 08/01/14,
Callable 08/01/09 @
103.63 (c) 913 976
Luscar Coal Ltd, 9.750%,
10/15/11, Callable
10/15/06 @ 104.88 3,662 4,175
Massey Energy Co., 6.625%,
11/15/10, Callable
11/15/07 @ 103.31 2,835 2,955
Peabody Energy Corp.,
5.875%, 04/15/16,
Callable 04/15/09 @
102.94 1,775 1,811
Peabody Energy Corp., Ser
B, 6.875%, 03/15/13,
Callable 03/15/08 @
103.44 3,389 3,719
----------
13,636
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
COMMERCIAL SERVICES (3.4%)
Alderwoods Group, Inc.,
7.750%, 09/15/12,
Callable 09/15/08 @
103.38 (c) $ 2,295 $ 2,479
Corrections Corp. of
America, 9.875%,
05/01/09, Callable
05/01/06 @ 104.94 5,121 5,761
Corrections Corp. of
America, 7.500%,
05/01/11, Callable
05/01/07 @ 103.75 7,735 8,363
Geo Group, Inc., 8.250%,
07/15/13, Callable
07/15/08 @ 104.13 3,495 3,670
Rent-A-Center, Ser B,
7.500%, 05/01/10,
Callable 05/01/06 @
103.75 6,482 6,717
Service Corp.
International, 7.200%,
06/01/06 3,872 4,046
Service Corp.
International, 6.875%,
10/01/07 3,040 3,215
Service Corp.
International, 6.500%,
03/15/08 680 714
Service Corp.
International, 7.700%,
04/15/09 11,213 12,306
Service Corp.
International, 7.875%,
02/01/13 63 69
Stewart Enterprises,
10.750%, 07/01/08,
Callable 07/01/05 @
105.38 10,494 11,543
----------
58,883
----------
</Table>
25
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
COMPUTERS (1.1%)
Seagate Technology HDD
Holdings, 8.000%,
05/15/09, Callable
05/15/06 @ 104.00 $ 3,639 $ 3,935
Unisys Corp., 8.125%,
06/01/06 3,917 4,162
Unisys Corp., 6.875%,
03/15/10 9,218 9,863
----------
17,960
----------
COSMETICS/PERSONAL CARE (0.2%)
Elizabeth Arden, Inc.,
7.750%, 01/15/14,
Callable 01/15/09 @
103.88 3,440 3,668
----------
DIVERSIFIED FINANCIAL SERVICES (0.8%)
Borden U.S. Financial/Nova
Scotia, 9.000%, 07/15/14,
Callable 07/15/09 @
104.50 (c) 3,480 3,806
Consolidated Communication
Holdings, 9.750%,
04/01/12, Callable
04/01/08 @ 104.88 (c) 2,015 2,086
Jostens IH Corp., 7.625%,
10/01/12, Callable
10/01/08 @ 103.81 (c) 4,260 4,409
UGS Corp., 10.000%,
06/01/12, Callable
06/01/08 @ 105.00 (c) 3,708 4,153
----------
14,454
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
DIVERSIFIED OPERATIONS (0.2%)
Leucadia National Corp.,
7.000%, 08/15/13 $ 2,450 $ 2,499
Leucadia National Corp.,
8.650%, 01/15/27,
Callable 01/15/07 @
104.28 1,450 1,494
----------
3,993
----------
ELECTRIC (10.2%)
AES Corp. (The), 9.375%,
09/15/10 700 819
AES Corp. (The), 8.750%,
05/15/13, Callable
05/15/08 @ 104.38 (c) 17,847 20,613
Aquila, Inc., 7.950%,
02/01/11 960 1,080
Aquila, Inc., 11.875%,
07/01/12 2,860 3,918
BRL Universal Equipment LP,
8.875%, 02/15/08,
Callable 02/15/05 @
104.44 8,264 8,719
Edison Mission Energy,
10.000%, 08/15/08 490 572
Edison Mission Energy,
9.875%, 04/15/11 12,225 14,456
FirstEnergy Corp, Ser B,
6.450%, 11/15/11 15,945 17,471
FPL Energy Wind Funding,
6.876%, 06/27/17 (c) 3,453 3,565
General Cable Corp.,
9.500%, 11/15/10,
Callable 11/15/07 @
104.75 6,448 7,286
Homer City Funding LLC,
8.137%, 10/01/19 2,671 2,991
Homer City Funding LLC,
8.734%, 10/01/26 3,621 4,074
</Table>
26
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->ELECTRIC--CONTINUED
Kansas Gas & Electric Co.,
8.290%, 03/29/16,
Callable 12/17/04 @
103.32 $ 1,100 $ 1,136
Legrand Holding S.A.,
8.500%, 02/15/25 535 614
Legrand Holding SA,
10.500%, 02/15/13,
Callable 02/15/08 @
105.25 3,485 4,077
Midwest Generation LLC,
8.750%, 05/01/34,
Callable 05/01/09 @
104.38 601 681
Midwest Generation LLC, Ser
A, 8.300%, 07/02/09 2,475 2,667
Midwest Generation LLC, Ser
B, 8.560%, 01/02/16 10,800 11,880
MSW Energy Holdings/
Finance, 8.500%,
09/01/10, Callable
09/01/07 @ 104.25 4,290 4,698
MSW Energy Holdings/
Finance, Ser B, 7.375%,
09/01/10, Callable
09/01/07 @ 103.69 6,326 6,642
NRG Energy, Inc., 8.000%,
12/15/13, Callable
12/15/08 @ 104.00 (c) 10,208 11,242
PSEG Energy Holdings,
7.750%, 04/16/07 6,498 6,953
PSEG Energy Holdings,
8.625%, 02/15/08 18,685 20,646
PSEG Energy Holdings,
10.000%, 10/01/09 4,646 5,598
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->ELECTRIC--CONTINUED
Sithe/Independence Funding
Corp., Ser A, 8.500%,
06/30/07 $ 2,052 $ 2,180
Sithe/Independence Funding
Corp., Ser A, 9.000%,
12/30/13 6,600 7,514
----------
172,092
----------
ELECTRONICS (1.0%)
Celestica, Inc., 7.875%,
07/01/11, Callable
07/01/08 @ 103.94 1,903 2,036
Sanmina-SCI Corp., 3.000%,
03/15/07, Callable
12/10/04 @ 101.29 1,235 1,193
Sanmina-SCI Corp., 10.375%,
01/15/10, Callable
01/15/07 @ 105.19 11,866 13,913
----------
17,142
----------
ENERGY -- ALTERNATIVE SERVICES (0.7%)
AES Ironwood LLC, 8.857%,
11/30/25 963 1,069
AES Red Oak LLC, Ser A,
8.540%, 11/30/19 1,612 1,781
AES Red Oak LLC, Ser B,
9.200%, 11/30/29 2,200 2,497
Salton Sea Funding Corp.,
Ser C, 7.840%, 05/30/10 4,953 5,370
Salton Sea Funding Corp.,
Ser F, 7.475%, 11/30/18 1,259 1,366
----------
12,083
----------
ENTERTAINMENT (3.0%)
Alliance Atlantis
Communications, 13.000%,
12/15/09, Callable
12/15/04 @ 106.50 7,668 8,243
</Table>
27
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->ENTERTAINMENT--CONTINUED
Argosy Gaming Co., 9.000%,
09/01/11, Callable
09/01/06 @ 104.50 $ 8,116 $ 9,150
Argosy Gaming Co., 7.000%,
01/15/14, Callable
01/15/09 @ 103.5 6,175 6,576
Capitol Records, Inc.,
8.375%, 05/15/09 (c) 5,623 6,270
Choctaw Resort Development
Entertainment, 9.250%,
04/01/09, Callable
04/01/05 @ 104.63 5,425 5,818
Choctaw Resort Development
Entertainment, 7.250%,
11/15/19, Callable
11/15/11 @ 103.63 (c) 1,315 1,343
Intrawest Corp., 7.500%,
10/15/13, Callable
10/15/08 @ 103.75 (c) 1,835 1,963
Isle of Capri Casinos,
Inc., 9.000%, 03/15/12,
Callable 03/15/07 @
104.50 2,705 3,030
Penn National Gaming, Inc.,
8.875%, 03/15/10,
Callable 03/15/06 @
104.44 2,025 2,233
Penn National Gaming, Inc.,
Ser B, 11.125%, 03/01/08,
Callable 03/01/05 @
105.56 3,195 3,455
Warner Music Group, 7.375%,
04/15/14, Callable
04/15/09 @ 103.69 (c) 2,942 3,023
----------
51,104
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
ENVIRONMENT CONTROL (0.9%)
Allied Waste North America,
Inc., Ser B, 8.500%,
12/01/08 $ 10,882 $ 11,426
Allied Waste North America,
Inc., Ser B, 9.250%,
09/01/12, Callable
09/01/07 @ 104.63 600 648
Casella Waste Systems,
9.750%, 02/01/13,
Callable 02/01/08 @
104.88 2,675 2,943
----------
15,017
----------
FOOD (2.1%)
B&G Foods Holding Corp.,
8.000%, 10/01/11,
Callable 10/01/08 @
104.00 1,730 1,825
Dean Foods Co., 8.150%,
08/01/07 13,292 14,422
Del Monte Corp., 8.625%,
12/15/12, Callable
12/15/07 @ 104.31 1,097 1,237
Smithfield Foods, Inc., Ser
B, 8.000%, 10/15/09 3,957 4,392
Smithfield Foods, Inc., Ser
B, 7.750%, 05/15/13 5,015 5,542
Stater Brothers Holdings,
Inc., 5.380%,
06/15/10 (b) 2,159 2,191
Stater Brothers Holdings,
Inc., 8.125%, 06/15/12,
Callable 06/15/08 @
104.06 1,742 1,847
</Table>
28
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->FOOD--CONTINUED
Swift & Co., 12.500%,
01/01/10, Callable
10/01/06 @ 106.25 $ 955 $ 1,062
United Agricultural
Products, 8.250%,
12/15/11, Callable
12/15/07 @ 104.13 (c) 3,435 3,710
----------
36,228
----------
FOREST PRODUCTS & PAPER (3.9%)
Appleton Papers, Inc.,
8.125%, 06/15/11,
Callable 06/15/08 @
104.06 2,601 2,738
Appleton Papers, Inc., Ser
B, 9.750%, 06/15/14,
Callable 06/15/09 @
104.88 1,509 1,577
Boise Cascade LLC, 5.005%,
10/15/12, Callable
12/09/04 @ 103.00 (b) (c) 8,132 8,315
Boise Cascade LLC, 7.125%,
10/15/14, Callable
10/15/09 @ 103.56 (c) 2,600 2,714
Cascades, Inc., 7.250%,
02/15/13, Callable
02/15/08 @ 103.63 9,801 10,584
Georgia Pacific Corp.,
7.375%, 07/15/08 8,222 9,044
Georgia Pacific Corp.,
8.875%, 02/01/10 7,457 8,781
Georgia Pacific Corp.,
8.125%, 05/15/11 6,677 7,795
Georgia Pacific Corp.,
9.500%, 12/01/11 2,150 2,677
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->FOREST PRODUCTS &
PAPER--CONTINUED
Georgia Pacific Corp.,
8.875%, 05/15/31 $ 7,814 $ 9,631
Millar Western Forest
Products Ltd., 7.750%,
11/15/13, Callable
11/15/08 @ 103.88 3,225 3,443
----------
67,299
----------
HEALTHCARE -- PRODUCTS (1.0%)
Dade Behring, Inc.,
11.910%, 10/03/10,
Callable 10/03/05 @
105.95 5,527 6,259
Kinetic Concepts, Inc.,
7.375%, 05/15/13,
Callable 05/15/08 @
103.69 2,241 2,353
Sybron Dental Specialties,
Inc., 8.125%, 06/15/12,
Callable 06/15/07 @
104.06 2,542 2,771
Universal Hospital
Services, Inc., 10.125%,
11/01/11, Callable
11/01/07 @ 105.06 5,245 5,350
----------
16,733
----------
HEALTHCARE -- SERVICES (3.7%)
Coventry Health Care, Inc.,
8.125%, 02/15/12,
Callable 02/15/07 @
104.06 5,418 5,851
HCA, Inc., 8.750%, 09/01/10 6,578 7,585
HCA, Inc., 7.875%, 02/01/11 1,862 2,061
HCA, Inc., 6.950%, 05/01/12 6,870 7,244
HCA, Inc., 6.300%, 10/01/12 2,468 2,498
HCA, Inc., 7.500%, 11/06/33 1,525 1,527
HCA, Inc., 7.500%, 11/15/95 6,951 6,484
Iasis Healthcare Corp.,
8.750%, 06/15/14,
Callable 06/15/09 @
104.38 (c) 4,533 4,873
</Table>
29
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->HEALTHCARE -- SERVICES--CONTINUED
Mariner Health Care, Inc.,
8.250%, 12/15/13,
Callable 12/15/08 @
104.12 (c) $ 2,860 $ 3,246
Pacificare Health Systems,
10.750%, 06/01/09,
Callable 06/01/06 @
105.38 4,687 5,402
Select Medical Corp.,
9.500%, 06/15/09,
Callable 06/15/05 @
104.75 683 739
Select Medical Corp.,
7.500%, 08/01/13,
Callable 08/01/08 @
103.75 1,042 1,196
Triad Hospitals, Inc.,
7.000%, 05/15/12,
Callable 05/15/08 @
103.50 13,195 14,119
Triad Hospitals, Inc.,
7.000%, 11/15/13,
Callable 11/15/08 @
103.50 2 2
----------
62,827
----------
HOME BUILDERS (0.7%)
K Hovnanian Enterprises,
Inc., 8.000%, 04/01/12,
Callable 04/01/07 @
104.00 1,825 2,026
K Hovnanian Enterprises,
Inc., 6.375%, 12/15/14 1,000 1,013
Meritage Homes Corp.,
9.750%, 06/01/11,
Callable 06/01/06 @
104.88 3,255 3,628
Ryland Group, Inc., 9.750%,
09/01/10, Callable
09/01/05 @ 104.88 2,653 2,912
Standard Pacific Corp.,
6.500%, 10/01/08 1,588 1,663
Standard Pacific Corp.,
6.875%, 05/15/11 1,340 1,414
----------
12,656
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
HOUSEHOLD PRODUCTS/WARES (0.1%)
Scotts Co., 6.625%,
11/15/13, Callable
11/15/08 @ 103.31 $ 1,737 $ 1,833
----------
INSURANCE (1.1%)
AFC Capital Trust I, Ser B,
8.207%, 02/03/27 3,797 3,915
Allmerica Financial Corp.,
7.625%, 10/15/25 1,525 1,560
Crum & Forster Holdings
Corp., 10.375%, 06/15/13,
Callable 06/15/08 @
105.19 524 561
Fairfax Financial Holdings
Ltd., 7.750%, 04/26/12 550 535
Fairfax Financial Holdings
Ltd., 7.375%, 04/15/18 5,061 4,465
Fairfax Financial Holdings
Ltd., 7.750%, 07/15/37 4,350 3,654
Markel Capital Trust I, Ser
B, 8.710%, 01/01/46,
Callable 01/01/07 @
104.36 4,000 4,217
----------
18,907
----------
LEISURE TIME (0.1%)
K2, Inc., 7.375%, 07/01/14,
Callable 07/01/09 @
103.69 (c) 2,090 2,278
----------
LODGING (6.2%)
Ameristar Casinos, Inc.,
10.750%, 02/15/09,
Callable 02/15/06 @
105.38 5,731 6,533
Boyd Gaming Corp., 7.750%,
12/15/12, Callable
12/15/07 @ 103.88 2,050 2,260
Boyd Gaming Corp., 6.750%,
04/15/14, Callable
04/15/09 @ 103.38 4,860 5,097
Caesars Entertainment,
7.500%, 09/01/09 5,887 6,652
</Table>
30
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->LODGING--CONTINUED
Chumash Casino & Resort
Enterprise, 9.000%,
07/15/10, Callable
07/15/06 @ 104.50 (c) $ 3,058 $ 3,417
Hilton Hotels Corp, 8.250%,
02/15/11 5,079 6,055
Kerzner International Ltd,
8.875%, 08/15/11,
Callable 08/15/06 @
104.44 1,546 1,704
Mandalay Resort Group,
9.500%, 08/01/08 4,018 4,626
Mandalay Resort Group, Ser
B, 10.250%, 08/01/07 20,936 23,867
MGM Mirage, Inc., 9.750%,
06/01/07 6,920 7,785
MGM Mirage, Inc., 6.000%,
10/01/09 1,625 1,682
MGM Mirage, Inc., 8.500%,
09/15/10 18,079 20,791
Station Casinos, Inc.,
6.000%, 04/01/12,
Callable 04/01/08 @
102.25 4,990 5,215
Station Casinos, Inc.,
6.500%, 02/01/14,
Callable 02/01/09 @
102.44 5,624 5,933
Venetian Casino Resort LLC,
11.000%, 06/15/10,
Callable 06/15/06 @
105.50 3,775 4,337
----------
105,954
----------
MACHINERY -- DIVERSIFIED (0.3%)
Dresser-Rand Group, Inc.,
7.375%, 11/01/14,
Callable 11/01/09 @
103.69 (c) 1,800 1,886
NMGH Holding Co., 10.000%,
05/15/09, Callable
05/15/06 @ 105.00 2,630 2,909
----------
4,795
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
MEDIA (14.0%)
CanWest Media, Inc., Ser B,
7.625%, 04/15/13,
Callable 04/15/08 @
103.81 $ 8,367 $ 9,099
CORUS Entertainment, Inc.,
8.750%, 03/01/12,
Callable 03/01/07 @
104.38 3,286 3,664
CSC Holdings, Inc., 7.250%,
07/15/08 5,045 5,354
CSC Holdings, Inc.,
10.500%, 05/15/16,
Callable 05/15/06 @
105.25 5,370 6,135
Dex Media East Finance,
9.875%, 11/15/09,
Callable 11/15/06 @
104.94 9,233 10,618
Dex Media West Finance, Ser
B, 8.500%, 08/15/10,
Callable 08/15/07 @
104.25 2,505 2,856
Dex Media West Finance, Ser
B, 9.875%, 08/15/13,
Callable 08/15/08 @
104.94 10,417 12,318
Dex Media, Inc., 9.000%,
11/15/13, Callable
11/15/08 @ 104.50 (e) 2,870 2,181
Dex Media, Inc., 9.000%,
11/15/13, Callable
11/15/08 @ 104.50 (e) 1,145 870
</Table>
31
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->MEDIA--CONTINUED
Directv Holdings, 8.375%,
03/15/13, Callable
03/15/08 @ 104.19 $ 30,442 $ 34,705
EchoStar DBS Corp., 5.256%,
10/01/08, Callable Call
10/01/05 @ 102.00 (b) 4,830 5,023
EchoStar DBS Corp., 5.750%,
10/01/08 10,971 11,218
EchoStar DBS Corp., 9.125%,
01/15/09, Callable
01/15/06 @ 104.56 10,489 11,695
EchoStar DBS Corp., 6.375%,
10/01/11 8,215 8,513
EchoStar DBS Corp., 6.625%,
10/01/14 (c) 6,545 6,692
Emmis Operating Co.,
6.875%, 05/15/12,
Callable 05/15/08 @
103.44 4,141 4,348
Entravision Communications
Corp., 8.125%, 03/15/09,
Callable 03/15/06 @
104.06 1,464 1,570
Gray Television, Inc.,
9.250%, 12/15/11,
Callable 12/15/06 @
104.62 3,435 3,869
Hollinger Participation
Trust, 12.125%,
11/15/10 (c) 8,374 10,216
Kabel Deutschland GMBH,
10.625%, 07/01/14,
Callable 07/01/09 @
105.31 (c) 8,400 9,408
MediaNews Group, Inc.,
6.875%, 10/01/13,
Callable 10/01/08 @
103.44 3,336 3,461
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->MEDIA--CONTINUED
Morris Publishing Group,
7.000%, 08/01/13,
Callable 08/01/08 @
103.50 $ 4,200 $ 4,284
Quebecor Media, Inc.,
11.125%, 07/15/11,
Callable 07/15/06 @
105.56 885 1,024
Radio One, Inc., Ser B,
8.875%, 07/01/11,
Callable 07/01/06 @
104.44 7,725 8,536
Readers Digest Association,
Inc., 6.500%, 03/01/11,
Callable 03/01/08 @
103.25 6,136 6,366
RH Donnelley Finance Corp.,
8.875%, 12/15/10,
Callable 12/15/06 @
104.44 1,350 1,532
RH Donnelley Finance Corp.,
10.875%, 12/15/12,
Callable 12/15/07 @
105.44 3,475 4,248
RH Donnelley Finance Corp.,
10.875%, 12/15/12,
Callable 12/15/07 @
105.44 15,156 18,529
Rogers Cablesystem Ltd.,
11.000%, 12/01/15,
Callable 12/01/05 @
105.50 670 757
Shaw Communications, Inc.,
8.250%, 04/11/10 11,206 12,859
Shaw Communications, Inc.,
7.250%, 04/06/11 210 231
Shaw Communications, Inc.,
7.200%, 12/15/11 2,865 3,152
Sinclair Broadcast Group,
Inc., 8.750%, 12/15/11,
Callable 12/15/06 @
104.38 7,843 8,549
</Table>
32
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->MEDIA--CONTINUED
Susquehanna Media Co.,
7.375%, 04/15/13,
Callable 04/15/08 @
103.69 $ 2,355 $ 2,490
Videotron Ltee, 6.875%,
01/15/14, Callable
01/15/09 @ 103.44 880 924
----------
237,294
----------
MINING (0.1%)
Century Aluminum Co.,
7.500%, 08/15/14,
Callable 08/15/09 @
103.75 (c) 1,690 1,791
----------
MISCELLANEOUS MANUFACTURER (0.3%)
Koppers, Inc., 9.875%,
10/15/13, Callable
10/15/08 @ 104.94 1,881 2,126
SPX Corp., 6.250%, 06/15/11 2,065 2,106
SPX Corp., 7.500%,
01/01/13, Callable
01/01/08 @ 103.75 496 531
----------
4,763
----------
OFFICE / BUSINESS EQUIPMENT (1.1%)
Xerox Capital Trust I,
9.750%, 01/15/09 10,449 12,251
Xerox Capital Trust I,
8.000%, 02/01/27,
Callable 02/01/07 @
102.45 6,920 6,920
----------
19,171
----------
OIL & GAS (8.1%)
AmeriGas Partners/Eagle
Finance, Ser B, 8.875%,
05/20/11, Callable
05/20/06 @ 104.44 4,782 5,236
AmeriGas Partners/Eagle
Finance, Ser D, 10.000%,
04/15/06 1,030 1,118
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->OIL & GAS--CONTINUED
Chesapeake Energy Corp.,
8.375%, 11/01/08,
Callable 11/01/05 @
104.19 $ 2,363 $ 2,576
Chesapeake Energy Corp.,
9.000%, 08/15/12,
Callable 08/15/07 @
104.50 5,428 6,256
Chesapeake Energy Corp.,
7.500%, 09/15/13,
Callable 09/15/08 @
103.75 12,757 14,223
Chesapeake Energy Corp.,
7.500%, 06/15/14,
Callable 06/15/09 @
103.75 139 155
Chesapeake Energy Corp.,
7.750%, 01/15/15,
Callable 01/15/08 @
103.88 3,840 4,262
Chesapeake Energy Corp.,
6.875%, 01/15/16,
Callable 01/15/09 @
103.44 3,638 3,893
Citgo Petroleum Corp,
6.000%, 10/15/11,
Callable 10/15/08 @
103.00 (c) 3,240 3,297
CITGO Petroleum Corp.,
7.875%, 05/15/06 615 653
Encore Acquisition Co.,
8.375%, 06/15/12,
Callable 06/15/07 @
104.19 1,837 2,039
Encore Acquisition Co.,
6.250%, 04/15/14,
Callable 04/15/09 @
103.13 1,360 1,394
Enterprise Products
Operations, Inc., 5.600%,
10/15/14 (c) 15,705 16,003
Evergreen Resources, Inc.,
5.875%, 03/15/12,
Callable 03/15/08 @
102.94 2,750 2,833
</Table>
33
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->OIL & GAS--CONTINUED
EXCO Resources, Inc.,
7.250%, 01/15/11,
Callable 01/15/07 @
105.44 $ 7,213 $ 7,808
FerrellGas Partners, LP,
8.750%, 06/15/12,
Callable 06/15/07 @
104.38 6,054 6,584
FerrellGas Partners, LP,
6.750%, 05/01/14,
Callable 05/01/09 @
103.38 2,681 2,775
Forest Oil Corp., 8.000%,
06/15/08 7,334 8,141
Forest Oil Corp., 8.000%,
12/15/11 4,648 5,299
Frontier Oil Corp., 6.625%,
10/01/11, Callable
10/01/07 @ 103.31 (c) 1,020 1,056
Premcor Refining Group,
Inc., 9.250%, 02/01/10,
Callable 02/01/07 @
104.63 6,667 7,584
Premcor Refining Group,
Inc., 6.750%, 02/01/11 5,592 6,053
Premcor Refining Group,
Inc., 6.125%, 05/01/11 2,576 2,718
Premcor Refining Group,
Inc., 7.750%, 02/01/12,
Callable 02/01/08 @103.88 5,250 5,814
Premcor Refining Group,
Inc., 9.500%, 02/01/13,
Callable 02/01/08 @
104.75 1,123 1,325
Swift Energy Co., 7.625%,
07/15/11, Callable
07/15/08 @ 103.81 3,415 3,705
Swift Energy Co., 9.375%,
05/01/12, Callable
05/01/07 @ 104.69 2,686 3,035
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->OIL & GAS--CONTINUED
Western Oil Sands, Inc.,
8.375%, 05/01/12 $ 8,119 $ 9,468
XTO Energy, Inc., 5.000%,
01/01/49 (c) 3,325 3,336
----------
138,639
----------
OTHER ABS (0.1%)
Canada, Inc., 8.000%,
09/15/12, Callable
09/15/11 @ 100 (c) 2,220 2,325
----------
PACKAGING & CONTAINERS (4.5%)
Ball Corp., 7.750%,
08/01/06 250 268
Ball Corp., 6.875%,
12/15/12, Callable
12/15/07 @ 103.44 5,515 6,011
Berry Plastics, 10.750%,
07/15/12, Callable
07/15/07 @ 105.38 2,125 2,444
CROWN EURO Holdings SA,
9.500%, 03/01/11,
Callable 03/01/07 @
104.75 7,620 8,687
CROWN EURO Holdings SA,
10.875%, 03/01/13,
Callable 03/01/08 @
105.44 5,986 7,108
Graphic Packaging
International, 9.500%,
08/15/13, Callable
08/15/08 @ 104.75 3,430 3,953
Jefferson Smurfit Corp.,
8.250%, 10/01/12,
Callable 10/01/07 @
104.12 5,760 6,394
Jefferson Smurfit Corp.,
7.500%, 06/01/13,
Callable 06/01/08 @
103.75 8,345 9,096
Owens-Brockway Glass
Container, 8.875%,
02/15/09, Callable
02/15/06 @ 104.44 5,655 6,206
</Table>
34
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONTINUED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->PACKAGING &
CONTAINERS--CONTINUED
Owens-Brockway Glass
Container, 7.750%,
05/15/11, Callable
05/15/07 @ 103.88 $ 1,905 $ 2,072
Owens-Brockway Glass
Container, 8.750%,
11/15/12, Callable
11/15/07 @ 104.38 8,880 10,012
Plastipak Holdings, Inc.,
10.750%, 09/01/11,
Callable 09/01/06 @
105.38 1,440 1,613
Silgan Holdings, Inc.,
6.750%, 11/15/13,
Callable 11/15/08 @
103.38 4,637 4,776
Stone Container Corp.,
9.250%, 02/01/08 2,740 3,083
Stone Container Corp.,
9.750%, 02/01/11,
Callable 02/01/06 @
104.88 1,800 2,007
Stone Container Corp.,
8.375%, 07/01/12,
Callable 07/01/07 @
104.19 2,309 2,551
----------
76,281
----------
PIPELINES (2.9%)
Dynegy Holdings, Inc.,
10.125%, 07/15/13,
Callable 07/15/08 @
105.06 (c) 9,190 10,706
MarkWest Energy Partners,
6.875%, 11/01/14 (c) 2,005 2,045
Transcontinental Gas Pipe
Line Corp., Ser B,
8.875%, 07/15/12 1,015 1,254
TransMontaigne, Inc.,
9.125%, 06/01/10,
Callable 06/01/07 @
104.56 1,698 1,889
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->PIPELINES--CONTINUED
Williams Cos., Inc.,
7.125%, 09/01/11 $ 18,100 $ 20,272
Williams Cos., Inc.,
8.125%, 03/15/12 (b) 8,130 9,553
Williams Cos., Inc.,
8.750%, 03/15/32 2,595 2,945
----------
48,664
----------
REAL ESTATE (1.2%)
CB Richard Ellis Services,
9.750%, 05/15/10,
Callable 05/15/07 @
104.88 2,451 2,794
CB Richard Ellis Services,
11.250%, 06/15/11,
Callable 06/15/06 @
105.63 2,755 3,223
LNR Property Corp., 7.625%,
07/15/13, Callable
07/15/08 @ 103.81 6,460 7,203
LNR Property Corp., Ser A,
7.250%, 10/15/13,
Callable 10/15/08 @
103.63 7,340 8,074
----------
21,294
----------
REITS (2.5%)
Health Care, Inc., (REIT),
6.000%, 11/15/13 4,765 4,929
Host Marriott LP (REIT),
7.125%, 11/01/13,
Callable 11/01/08 @
103.56 3,455 3,731
Host Marriott LP (REIT),
Ser G, 9.250%, 10/01/07 2,398 2,698
Host Marriott LP (REIT),
Ser I, 9.500%, 01/15/07 2,825 3,136
iStar Financial, Inc.
(REIT), 7.000%, 03/15/08 5,870 6,409
iStar Financial, Inc.
(REIT), 8.750%, 08/15/08 5,647 6,552
</Table>
35
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->REITS--CONTINUED
iStar Financial, Inc.
(REIT), 6.000%, 12/15/10 $ 3,645 $ 3,867
Omega Healthcare Investors,
Inc. (REIT), 7.000%,
04/01/14, Callable
04/01/09 @ 103.50 (c) 2,015 2,065
Omega Healthcare Investors,
Inc. (REIT), 7.000%,
04/01/14 3,700 3,783
Ventas Realty LP (REIT),
8.750%, 05/01/09 2,530 2,859
Ventas Realty LP (REIT),
6.625%, 10/15/14,
Callable 10/15/09 @
103.31 (c) 2,910 2,968
----------
42,997
----------
RETAIL (2.6%)
AutoNation, Inc., 9.000%,
08/01/08 4,331 4,981
Couche-Tard US/Finance,
7.500%, 12/15/13,
Callable 12/15/08 @
103.75 1,815 1,956
Gap, Inc., 8.800%,
12/15/08 (b) 6,350 7,746
Group 1 Automotive, Inc.,
8.250%, 08/15/39,
Callable 08/15/08 @
104.13 1,980 2,094
Jean Coutu Group PJC, Inc.,
7.625%, 08/01/12,
Callable 08/01/08 @
103.81 (c) 3,734 3,949
Office Depot, Inc.,
10.000%, 07/15/08 3,246 3,814
Pantry, Inc., 7.750%,
02/15/14, Callable
02/15/09 @ 103.88 3,553 3,713
PETCO Animal Supplies,
Inc., 10.750%, 11/01/11,
Callable 11/01/06 @
105.38 1,105 1,287
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->RETAIL--CONTINUED
Rite Aid Corp., 8.125%,
05/01/10, Callable
05/01/07 @ 104.06 $ 4,215 $ 4,500
Rite Aid Corp., 9.500%,
02/15/11, Callable
02/15/07 @ 104.38 3,797 4,205
Sonic Automotive, Inc., Ser
B, 8.625%, 08/15/13,
Callable 08/15/08 @
104.31 3,904 4,128
United Auto Group, Inc.,
9.625%, 03/15/12,
Callable 03/15/07 @
104.81 1,678 1,867
----------
44,240
----------
SEMICONDUCTORS (1.1%)
Advanced Micro Devices,
7.750%, 11/01/12,
Callable 11/01/08 @
103.88 (c) 4,275 4,286
Fairchild Semiconductor
Corp., 5.000%, 11/01/08,
Callable 11/30/04 @
102.25 3,161 3,161
Fairchild Semiconductor
Corp., 10.500%, 02/01/09,
Callable 02/01/05 @
105.25 4,855 5,194
Freescale Semiconductor,
4.820%, 07/15/09,
Callable 07/15/06 @
102.00 (b) 2,988 3,093
Freescale Semiconductor,
6.875%, 07/15/11,
Callable 07/15/08 @
103.44 1,330 1,410
Freescale Semiconductor,
7.125%, 07/15/14,
Callable 07/15/09 @
103.56 1,064 1,128
----------
18,272
----------
</Table>
36
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
SEIX INSTITUTIONAL HIGH YIELD FUND -- CONCLUDED
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
SERVICES (0.7%)
Hanover Compressor Co.,
8.625%, 12/15/10,
Callable 12/15/07 @
104.31 $ 1,785 $ 1,964
Hanover Compressor Co.,
9.000%, 06/01/14,
Callable 06/01/09 @
104.50 2,020 2,252
Hanover Equipment Trust 01,
Ser A, 8.500%, 09/01/08,
Callable 09/01/05 @
104.25 3,440 3,723
Hanover Equipment Trust 01,
Ser B, 8.750%, 09/01/11,
Callable 09/01/06 @
104.38 3,291 3,637
Universal Compression,
Inc., 7.250%, 05/15/10,
Callable 05/15/07 @
103.62 430 460
----------
12,036
----------
TELECOMMUNICATIONS (9.2%)
AT&T Corp., 7.300%,
11/15/11 16,880 19,349
AT&T Corp., 8.000%,
11/15/31 3,215 3,721
Avaya, Inc., 11.125%,
04/01/09, Callable
04/01/06 @ 105.56 3,786 4,354
Citizens Communications
Co., 7.625%, 08/15/08 5,000 5,400
Citizens Communications
Co., 9.250%, 05/15/11 4,500 5,175
Citizens Communications
Co., 9.000%, 08/15/31 3,110 3,320
Corning, Inc., 5.900%,
03/15/14 3,818 3,796
Corning, Inc., 6.200%,
03/15/16 3,760 3,766
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->TELECOMMUNICATIONS--CONTINUED
GCI, Inc., 7.250%,
02/15/14, Callable
02/15/09 @ 103.63 $ 6,642 $ 6,576
Inmarsat Finance PLC,
7.625%, 06/30/12,
Callable 03/01/08 @
103.81 (c) 8,498 8,583
Nextel Communications,
9.375%, 11/15/09,
Callable 11/15/04 @
104.69 2,192 2,299
Nextel Communications,
9.500%, 02/01/11,
Callable 02/01/06 @
104.75 4,768 5,406
Nextel Communications,
6.875%, 10/31/13,
Callable 10/31/08 @
103.44 10,260 11,132
Nextel Communications,
5.950%, 03/15/14,
Callable 03/15/09 @
102.98 10,370 10,603
Nextel Communications,
7.375%, 08/01/15,
Callable 08/01/08 @
103.69 10,296 11,429
NTL Cable PLC, 8.750%,
04/15/14, Callable
04/15/09 @ 104.38 (c) 6,564 7,237
PanAmSat Corp., 9.000%,
08/15/14, Callable
08/15/09 @ 104.50 (c) 12,335 13,075
Qwest Communications,
7.875%, 09/01/11 (c) 10,190 10,852
Qwest Communications,
7.500%, 06/15/23,
Callable 12/17/04 @
103.02 3,885 3,652
Qwest Communications,
7.200%, 11/10/26,
Callable 11/10/05 @
103.04 1,246 1,109
</Table>
37
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
<->TELECOMMUNICA-
TIONS--CONTINUED
Roger Wireless
Communications, Inc.,
6.375%, 03/01/14 $ 14,105 $ 13,470
Rogers Cantel, Inc.,
9.750%, 06/01/16 2,350 2,703
Rogers Wireless, Inc.,
9.625%, 05/01/11 368 418
----------
157,425
----------
TRANSPORTATION (0.4%)
CHC Helicopter Corp.,
7.375%, 05/01/14,
Callable 05/01/09 @
103.69 3,182 3,389
Petroleum Helicoptors, Ser
B, 9.375%, 05/01/09,
Callable 05/01/06 @
104.69 2,990 3,233
----------
6,622
----------
VENTURE CAPITAL (0.3%)
Arch Western Finance,
6.750%, 07/01/13,
Callable 07/01/08 @
103.38 (c) 5,540 5,886
----------
Total Corporate Bonds (Cost
$1,580,000) 1,634,894
----------
</Table>
<Table>
<Caption>
- ------------------------------------------------------
Shares or
Principal
Amount Value
- ------------------------------------------------------
PREFERRED STOCKS (0.2%)
MEDIA (0.0%)
Shaw Communications, Inc.,
8.500% 27,840 $ 706
----------
REITS (0.2%)
Health Care, Inc. (REIT),
Ser F, 7.625% 23,650 594
iStar Financial, Inc.
(REIT), Ser I, 7.500% 110,400 2,796
----------
3,390
----------
Total Preferred Stocks (Cost
$3,955) 4,096
----------
REPURCHASE AGREEMENT (3.7%)
Lehman Brothers, 1.745%,
dated 10/29/04, to be
repurchased on 11/01/04,
repurchase price
$62,575,089
(collateralized by U.S.
Government Agencies;
total market value
$63,818,951) $ 62,566 62,566
----------
Total Repurchase Agreement
(Cost $62,566) 62,566
----------
Total Investments (Cost
$1,646,521) (a) -- 99.7% 1,701,556
Other assets in excess of
liabilities -- 0.3% 5,528
----------
Net Assets -- 100.0% $1,707,084
==========
</Table>
See notes to schedules of portfolio investments and notes to financial
statements.
38
SCHEDULE OF PORTFOLIO INVESTMENTS
STI CLASSIC FUNDS October 31, 2004 (Amounts in thousands, except shares)
CLASSIC INSTITUTIONAL LIMITED DURATION FUND
<Table>
<Caption>
- -------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------
U.S. TREASURY OBLIGATIONS (50.8%)
U.S. TREASURY NOTES (50.8%)
11.625%, 11/15/04 $18,000 $ 18,065
2.000%, 11/30/04 19,500 19,502
1.750%, 12/31/04 18,000 17,994
7.500%, 02/15/05 10,000 10,157
--------
Total U.S. Treasury Obligations
(Cost $65,736) 65,718
--------
CASH EQUIVALENTS (42.2%)
CREDIT CARD ABS (11.3%)
American Express Credit
Account Master Trust, Ser
2000-2, Cl A, 2.035%,
09/17/07 (b) 2,503 2,504
American Express Credit
Account Master Trust, Ser
2002-2, CL A, 1.919%,
05/15/06, (b) 1,177 1,177
BA Master Credit Card Trust,
Ser 2001-A, Cl A, 1.990%,
06/15/08 (b) 4,520 4,527
Citibank Credit Card Issuance
Trust, Ser 2002-A5, Cl A5,
1.920%, 09/17/07 (b) 6,380 6,380
--------
14,588
--------
FANNIE MAE (6.8%)
Ser 2002-T10, C1 A1, 2.053%,
06/25/32 (b) 2,463 2,456
Ser 2002-T13, C1 A1, 2.033%,
08/25/32 (b) 2,738 2,738
Ser 2003-T4, C1 A1, 2.043%,
09/26/33 (b) 3,614 3,615
--------
8,809
--------
FREDDIE MAC (2.2%)
Ser T-049, C1 AV, 2.083%,
12/25/32 (b) 2,886 2,887
--------
</Table>
<Table>
<Caption>
- -------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------
HOME EQUITY ABS (6.5%)
Mellon Bank Home Equity Loan
Trust, Ser 2001-1, Cl A,
2.150%, 03/20/27 (b) $ 3,329 $ 3,323
Residential Asset Securities
Corp., Ser 2003-KS4, Cl A2B,
2.223%, 06/25/03 (b) 3,103 3,107
Residential Funding Mortgage
Securities I, Ser 2003-HS1,
Cl A2, 2.223%, 12/25/32 (b) 2,015 2,016
--------
8,446
--------
OTHER ABS (15.4%)
Amortizing Residential
Collateral Trust, Ser 2002-
BC1F, Cl A, 2.213%,
01/25/32 (b) 2,861 2,858
Amortizing Residential
Collateral Trust, Ser 2002-
BC3M, Cl A, 2.203%,
06/25/32 (b) 1,830 1,832
Countrywide Home Equity Loan
Trust, Ser 2002 B, Cl A1,
2.120%, 04/15/28 (b) 3,344 3,342
Countrywide Home Equity Loan
Trust, Ser 2002 D, Cl A1,
2.110%, 08/15/28 (b) 2,584 2,575
Fleet Home Equity Loan Trust,
Ser 2003-1, Cl A, 2.160%,
01/20/33 (b) 3,663 3,662
Greenpoint Home Equity Loan
Trust, Ser 2001-1, Cl A2,
2.330%, 04/15/27 (b) 476 476
Greenpoint Home Equity Loan
Trust, Ser 2003-1, Cl A,
2.140%, 04/15/29 (b) 1,580 1,581
</Table>
39
<Table>
<Caption>
- -------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------
<->OTHER ABS--CONTINUED
Merrill Lynch Home Equity
Loan, Ser 1997-1, Cl A,
2.113%, 09/25/27 (b) $ 326 $ 325
Wachovia Asset Securitization,
Inc., Ser 2003-HE1, Cl A1,
2.223%, 03/25/33 (b) 3,187 3,185
--------
19,836
--------
Total Cash Equivalents (Cost
$54,584) 54,566
--------
</Table>
<Table>
<Caption>
- -------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------
REPURCHASE AGREEMENT (5.9%)
Lehman Brothers, 1.745%, dated
10/29/04, to be repurchased
on 11/01/04, repurchase
price $7,587,707
(collateralized by U.S.
Government Agencies; total
market value $7,741,850) $ 7,587 $ 7,587
--------
Total Repurchase Agreement (Cost
$7,587) 7,587
--------
Total Investments (Cost
$127,907) (a) -- 98.9% 127,871
Other assets in excess of
liabilities -- 1.1% 1,390
--------
Net Assets -- 100.0% $129,261
========
</Table>
See notes to schedules of portfolio investments and notes to financial
statements.
40
STI CLASSIC FUNDS
NOTES TO SCHEDULES OF PORTFOLIO INVESTMENTS
OCTOBER 31, 2004
<Table>
ABS Asset Backed Security
Cl Class
REIT Real Estate Investment Trust
Ser Series
(a) See notes to financial statements for unrealized
appreciation/(depreciation) of securities on a tax basis.
(b) Variable rate security. Rate presented represents rate in
effect at October 31, 2004. Maturity date represents
actual maturity date.
(c) Rule 144A, Section 4(2) or other security which is
restricted as to resale to institutional investors. The
Fund's advisor has deemed this security to be liquid
based upon procedures approved by the Board of Trustees.
(d) Perpetual Maturity
(e) Step Bond. Rate presented represents rate in effect at
October 31, 2004. Maturity date represents actual
maturity date.
</Table>
41
STATEMENTS OF ASSETS AND LIABILITIES (000)
STI CLASSIC FUNDS October 31, 2004
<Table>
<Caption>
Classic
Classic Classic Seix Institutional
Institutional Institutional Institutional Limited
Core Bond Intermediate High Yield Duration
Fund Bond Fund Fund Fund
------------- ------------- ------------- -------------
Assets:
Investments, at Value (Cost $56,793, $34,296, $1,583,955
and $120,320, respectively).............................. $57,605 $34,927 $1,638,990 $120,284
Repurchase Agreements, at Cost............................. 2,625 1,474 62,566 7,587
------- ------- ---------- --------
Total Investments (Cost $59,418, $35,770, $1,646,521, and
$127,907, respectively).................................. 60,230 36,401 1,701,556 127,871
Cash....................................................... -- 43 4,410 --
Receivable for Investment Securities Sold.................. 4,133 3,611 18,389 18,191
Accrued Income............................................. 436 324 33,276 1,449
Receivable from Adviser.................................... -- 3 -- --
Receivable for Capital Shares Sold......................... -- -- 172 --
------- ------- ---------- --------
Total Assets............................................... 64,799 40,382 1,757,803 147,511
------- ------- ---------- --------
Liabilities:
Income Distributions Payable............................... 112 63 5,708 110
Payable for Investment Securities Purchased................ 8,193 4,428 44,329 18,105
Payable for Capital Shares Redeemed........................ -- -- 37 --
Investment Advisory Fees Payable........................... 9 -- 440 3
Administration Fees Payable................................ 1 1 26 2
Distribution Fees Payable.................................. -- -- 2 --
Custody Fees Payable....................................... 6 2 33 4
Accrued Expenses........................................... 40 37 144 26
------- ------- ---------- --------
Total Liabilities.......................................... 8,361 4,531 50,719 18,250
------- ------- ---------- --------
Total Net Assets........................................... $56,438 $35,851 $1,707,084 $129,261
======= ======= ========== ========
Net Assets:
Capital.................................................... $55,189 $34,841 $1,632,742 $129,286
Accumulated Net Investment Income (Loss)................... (56) 18 33 11
Accumulated Net Realized Gains on Investment
Transactions............................................. 493 361 19,274 --
Net Unrealized Appreciation (Depreciation) on
Investments.............................................. 812 631 55,035 (36)
------- ------- ---------- --------
Total Net Assets........................................... $56,438 $35,851 $1,707,084 $129,261
======= ======= ========== ========
NET ASSETS:
Institutional Shares....................................... $56,019 $35,848 $1,689,327 $129,259
T Shares................................................... $ 1 $ 1 $ 1,781 $ 1
L Shares................................................... $ 1 $ 1 $ 1 $ 1
A Shares................................................... $ 417 $ 1 $ 15,975 N/A
SHARES OUTSTANDING:
Institutional Shares....................................... 5,442 3,458 147,896 12,950
T Shares................................................... -- -- 156 --
L Shares................................................... -- -- -- --
A Shares................................................... 39 -- 1,429 N/A
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE:
Institutional Shares....................................... $ 10.30 $ 10.37 $ 11.42 $ 9.98
T Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98
L Shares*.................................................. $ 10.30 $ 10.36 $ 11.42 $ 9.98
A Shares................................................... $ 10.60 $ 10.36 $ 11.18 N/A
OFFERING PRICE PER SHARE (100%/(100%-maximum sales charge)
of net asset value adjusted to the nearest cent):
Institutional Shares....................................... $ 10.30 $ 10.37 $ 11.42 $ 9.98
T Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98
L Shares................................................... $ 10.30 $ 10.36 $ 11.42 $ 9.98
A Shares................................................... $ 11.01 $ 10.76 $ 11.62 N/A
Maximum Sales Charge -- A Shares........................... 3.75% 3.75% 3.75%
</Table>
Amounts designated as "--" are $0 or have been rounded to $0.
* Redemption price per share varies by length of time shares are held.
See notes to financial statements.
42
STATEMENTS OF OPERATIONS (000)
STI CLASSIC FUNDS For the Year Ended October 31, 2004
<Table>
<Caption>
Classic
Classic Classic Seix Institutional
Institutional Institutional Institutional Limited
Core Bond Intermediate High Yield Duration
Fund Bond Fund Fund Fund
------------- ------------- ------------- -------------
Investment Income:
Dividend Income............................................ $ 3 $ 1 $ 733 $ 3
Interest Income............................................ 1,891 1,176 97,585 1,973
Other Income............................................... -- -- 1,729 --
Less: Foreign Taxes Withheld............................... -- -- (2) --
------ ------ -------- ------
Total Investment Income.................................... 1,894 1,177 100,045 1,976
------ ------ -------- ------
Expenses:
Investment Advisory Fees................................... 136 79 7,119 159
Administration Fees........................................ 39 24 1,032 109
Shareholder Service Fees -- T Shares....................... -- -- -- --
Distribution and Service Fees -- L Shares.................. -- -- -- --
Distribution Fees -- A Shares.............................. 1 -- 40 --
Custodian Fees............................................. 84 33 495 61
Professional Fees.......................................... 36 36 122 59
Insurance Fees............................................. 1 1 26 3
Registration Fees.......................................... 20 13 99 6
Transfer Agent Fees........................................ 2 -- 63 3
Printing Fees.............................................. 1 -- 21 2
Trustee Fees............................................... 2 1 49 6
Other Expenses............................................. 2 1 17 2
------ ------ -------- ------
Total Expenses............................................. 324 188 9,083 410
Less: Investment Advisory Fees Waived...................... (78) (47) (1,232) (87)
Less: Distribution Fees Waived -- L Shares................. -- -- -- --
------ ------ -------- ------
Net Expenses............................................... 246 141 7,851 323
------ ------ -------- ------
Net Investment Income...................................... 1,648 1,036 92,194 1,653
------ ------ -------- ------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Investments Sold............... 587 607 19,041 (6)
Net Change in Unrealized Appreciation (Depreciation) on
Investments.............................................. 302 (71) 25,392 (31)
------ ------ -------- ------
Total Net Realized and Unrealized Gain (Loss) on
Investments.............................................. 889 536 44,433 (37)
------ ------ -------- ------
Net Increase in Net Assets from Operations.................. $2,537 $1,572 $136,627 $1,616
====== ====== ======== ======
</Table>
Amounts designated as "--" are $0 or have been rounded to $0.
See notes to financial statements.
43
STATEMENTS OF CHANGES IN NET ASSETS (000)
STI CLASSIC FUNDS For the Year Ended October 31, 2004
and the Year Ended October 31, 2003
<Table>
<Caption>
Classic Institutional Classic Institutional
Core Bond Fund Intermediate Bond Fund
----------------------- -----------------------
11/01/03- 11/01/02- 11/01/03- 11/01/02-
10/31/04 10/31/03 10/31/04 10/31/03
--------- --------- --------- ---------
Operations:
Net Investment Income...................................... $ 1,648 $ 1,556 $ 1,036 $ 1,006
Net Realized Gain (Loss) on Investments Sold............... 587 2,997 607 637
Net Change in Unrealized Appreciation (Depreciation) on
Investments.............................................. 302 (152) (71) (140)
-------- -------- ------- --------
Increase in Net Assets from Operations..................... 2,537 4,401 1,572 1,503
-------- -------- ------- --------
Dividends and Distributions to Shareholders:
Net Investment Income:
Institutional Shares..................................... (1,696) (1,666) (1,036) (1,126)
T Shares................................................. -- -- -- --
L Shares................................................. -- -- -- --
A Shares................................................. (6) (5) -- --
Realized Capital Gains:
Institutional Shares..................................... (758) -- -- --
T Shares................................................. -- -- -- --
L Shares................................................. -- -- -- --
A Shares................................................. (6) -- -- --
-------- -------- ------- --------
Total Dividends and Distributions........................ (2,466) (1,671) (1,036) (1,126)
-------- -------- ------- --------
Capital Transactions:
Proceeds from Shares Issued................................ 40,317 1,286 7,195 561
Reinvestment of Cash Distributions......................... 2,082 1,629 973 1,126
Cost of Shares Redeemed.................................... (19,997) (52,573) (1,542) (13,659)
-------- -------- ------- --------
Increase (Decrease) in Net Assets from Capital
Transactions............................................. 22,402 (49,658) 6,626 (11,972)
-------- -------- ------- --------
Total Increase (Decrease) in Net Assets.................... 22,473 (46,928) 7,162 (11,595)
-------- -------- ------- --------
Net Assets:
Beginning of Period........................................ 33,965 80,893 28,689 40,284
-------- -------- ------- --------
End of Period.............................................. $ 56,438 $ 33,965 $35,851 $ 28,689
======== ======== ======= ========
Undistributed net investment income (loss), end of period... $ (56) $ (2) $ 18 $ --
======== ======== ======= ========
</Table>
Amounts designated as "-" are either $0 or have been rounded to $0.
See notes to financial statements.
44
STATEMENTS OF CHANGES IN NET ASSETS (000)
STI CLASSIC FUNDS For the Year Ended October 31, 2004
and the Year Ended October 31, 2003
<Table>
<Caption>
Seix Institutional Classic Institutional
High Yield Fund Limited Duration Fund
------------------------ ----------------------
11/01/03- 11/01/02- 11/01/03- 11/01/02-
10/31/04 10/31/03 10/31/04 10/31/03
---------- ---------- --------- ---------
Operations:
Net Investment Income...................................... $ 92,194 $ 34,679 $ 1,653 $ 1,020
Net Realized Gain (Loss) on Investments Sold............... 19,041 4,310 (6) (38)
Net Change in Unrealized Appreciation (Depreciation) on
Investments.............................................. 25,392 29,589 (31) (2)
---------- ---------- --------- ---------
Increase in Net Assets from Operations..................... 136,627 68,578 1,616 980
---------- ---------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
Institutional Shares..................................... (90,978) (33,988) (1,654) (965)
T Shares................................................. (5) -- -- --
L Shares................................................. -- -- -- --
A Shares................................................. (836) (759) -- --
Realized Capital Gains:
Institutional Shares..................................... (2,278) -- -- --
T Shares................................................. -- -- -- --
L Shares................................................. -- -- -- --
A Shares................................................. (31) -- -- --
---------- ---------- --------- ---------
Total Dividends and Distributions........................ (94,128) (34,747) (1,654) (965)
---------- ---------- --------- ---------
Capital Transactions:
Proceeds from Shares Issued................................ 873,357 1,037,967 158,000 261,425
Reinvestment of Cash Distributions......................... 74,837 28,618 1,533 965
Cost of Shares Redeemed.................................... (356,594) (119,325) (176,747) (128,190)
---------- ---------- --------- ---------
Increase (Decrease) in Net Assets from Capital
Transactions............................................. 591,600 947,260 (17,214) 134,200
---------- ---------- --------- ---------
Total Increase (Decrease) in Net Assets.................... 634,099 981,091 (17,252) 134,215
---------- ---------- --------- ---------
Net Assets:
Beginning of Period........................................ 1,072,985 91,894 146,513 12,298
---------- ---------- --------- ---------
End of Period.............................................. $1,707,084 $1,072,985 $ 129,261 $ 146,513
========== ========== ========= =========
Undistributed net investment income (loss), end of period... $ 33 $ (35) $ 11 $ 27
========== ========== ========= =========
</Table>
Amounts designated as "--" are either $0 or have been rounded to $0.
See notes to financial statements.
45
(This page intentionally left blank)
46
FINANCIAL HIGHLIGHTS
STI CLASSIC FUNDS For the Years Ended October 31, (unless otherwise indicated)
For a Share Outstanding Throughout Each Year or Period
<Table>
<Caption>
Net Asset Net Realized Dividends
Value, Net and Unrealized from
Beginning Investment Gains (Losses) Total from Net Investment
of Period Income on Investments Operations Income
------------ ---------- ---------------- ---------- --------------
CLASSIC INSTITUTIONAL CORE BOND FUND
Institutional Shares
2004* $10.31 $0.31 $ 0.23 $0.54 $(0.32)
2003 10.00 0.30 0.35 0.65 (0.34)
2002 10.34 0.42 (0.29) 0.13 (0.42)
2001 9.66 0.59 0.70 1.29 (0.61)
2000 9.67 0.63 (0.02) 0.61 (0.62)
T Shares
2004*(1) $10.25 $0.01 $ 0.06 $0.07 $(0.02)
L Shares
2004*(1) $10.25 $0.01 $ 0.06 $0.07 $(0.02)
A Shares
2004* $10.49 $0.18 $ 0.35 $0.53 $(0.19)
2003 10.08 0.29 0.34 0.63 (0.22)
2002 (2) 10.00 0.27 0.09 0.36 (0.28)
CLASSIC INSTITUTIONAL INTERMEDIATE BOND FUND
Institutional Shares
2004* $10.23 $0.34 $ 0.14 $0.48 $(0.34)
2003 10.12 0.37 0.15 0.52 (0.41)
2002 10.63 0.47 (0.23) 0.24 (0.50)
2001 9.96 0.57 0.68 1.25 (0.58)
2000 9.92 0.64 0.04 0.68 (0.64)
T Shares
2004*(1) $10.32 $0.02 $ 0.04 $0.06 $(0.02)
L Shares
2004*(1) $10.32 $0.01 $ 0.04 $0.05 $(0.01)
A Shares
2004*(1) $10.32 $0.02 $ 0.04 $0.06 $(0.02)
SEIX INSTITUTIONAL HIGH YIELD FUND
Institutional Shares
2004* $11.09 $0.72 $ 0.35 $1.07 $(0.72)
2003 10.17 0.68 0.92 1.60 (0.68)
2002 10.40 0.63 (0.20) 0.43 (0.63)
2001 (3) 10.00 0.64 0.36 1.00 (0.60)
T Shares
2004*(1) $11.32 $0.04 $ 0.10 $0.14 $(0.04)
L Shares
2004*(1) $11.32 $0.04 $ 0.10 $0.14 $(0.04)
A Shares
2004* $10.75 $0.56 $ 0.45 $1.01 $(0.56)
2003 9.78 0.68 0.82 1.50 (0.53)
2002 (4) 10.00 0.54 (0.22) 0.32 (0.51)
CLASSIC INSTITUTIONAL LIMITED DURATION FUND
Institutional Shares
2004* $ 9.98 $0.11 $ -- $0.11 $(0.11)
2003 10.00 0.11 (0.02) 0.09 (0.11)
2002 (5) 10.00 0.00(6) -- 0.00(6) 0.00(6)
T Shares
2004*(1) $ 9.98 $0.01 $ -- $0.01 $(0.01)
L Shares
2004*(1) $ 9.98 $0.01 $ -- $0.01 $(0.01)
<Caption>
Distributions
from Total
Realized Dividends and
Capital Gains Distributions
------------- -------------
CLASSIC INSTITUTIONAL
Institutional Shares
$(0.23) $(0.55)
-- (0.34)
(0.05) (0.47)
-- (0.61)
-- (0.62)
T Shares
$ -- $(0.02)
L Shares
$ -- $(0.02)
A Shares
$(0.23) $(0.42)
-- (0.22)
-- (0.28)
CLASSIC INSTITUTIONAL
Institutional Shares
$ -- $(0.34)
-- (0.41)
(0.25) (0.75)
-- (0.58)
-- (0.64)
T Shares
$ -- $(0.02)
L Shares
$ -- $(0.01)
A Shares
$ -- $(0.02)
SEIX INSTITUTIONAL HI
Institutional Shares
$(0.02) $(0.74)
-- (0.68)
(0.03) (0.66)
-- (0.60)
T Shares
$ -- $(0.04)
L Shares
$ -- $(0.04)
A Shares
$(0.02) $(0.58)
-- (0.53)
(0.03) (0.54)
CLASSIC INSTITUTIONAL
Institutional Shares
$ -- $(0.11)
-- (0.11)
-- 0.00(6)
T Shares
$ -- $(0.01)
L Shares
$ -- $(0.01)
</Table>
+ Returns are for the period indicated and have not been annualized. Total
return figures do not reflect applicable sales loads. Returns shown do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
* Effective November 1, 2003, the Funds adopted a change in the amortization
and accretion methodology on fixed income securities. (See Note 3.) The
cumulative effect of this change in methodology on October 31, 2004 was
immaterial to all Funds except for the Seix Institutional High Yield Fund,
which was to increase net investment income to average net assets from 6.42%,
5.56%, 5.45% and 6.17% to 6.48%, 6.62%, 6.29% and 6.22% for Institutional
Shares, T Shares, L Shares and A Shares, respectively; to increase net
investment income per share from $0.71, $0.03, $0.03 and $0.55 to $0.72,
$0.04, $0.04 and $0.56 for Institutional Shares, T Shares, L Shares and A
Shares, respectively; and, to decrease net realized and unrealized gains
(losses) per share from $0.36, $0.11, $0.11 and $0.46 to $0.35, $0.10, $0.10
and $0.45 for Institutional Shares, T Shares, L Shares and A Shares,
respectively. The per share ratios for T Shares and L Shares have been
annualized. Per share ratios and supplemental data for prior periods have not
been restated to reflect this change.
(1) T Shares, L Shares and A Shares commenced operations on October 11, 2004.
All ratios for the period have been annualized.
(2) A Shares commenced operations on January 25, 2002. All ratios for the period
have been annualized.
47
<Table>
<Caption>
Ratio of Ratio of Expenses to
Net Assets Net Assets, Ratio of Net Net Investment Average Net Assets Portfolio
Value, End Total End of Expenses to Income to (Excluding Waivers Turnover
of Period Return+ Period (000) Average Net Assets Average Net Assets and Reimbursements) Rate
- ---------- ------- ------------ ------------------ ------------------ -------------------- ---------
$10.30 5.49% $ 56,019 0.45% 3.03% 0.59% 330%
10.31 6.58 33,662 0.45 3.10 0.51 463
10.00 1.38 80,727 0.45 4.08 0.70 502
10.34 13.82 52,034 0.45 5.85 0.70 492
9.66 6.63 58,099 0.45 6.57 0.63 522
$10.30 0.67% $ 1 0.56% 3.06% 0.71% 330%
$10.30 0.65% $ 1 1.10% 2.71% 1.41% 330%
$10.60 5.22% $ 417 0.70% 2.80% 0.83% 330%
10.49 6.24 303 0.68 2.66 0.68 463
10.08 3.69 166 0.80 3.30 1.11 502
$10.37 4.73% $ 35,848 0.45% 3.25% 0.59% 130%
10.23 5.16 28,689 0.45 3.42 0.56 277
10.12 2.47 40,284 0.45 4.63 0.73 237
10.63 12.87 26,192 0.45 5.50 0.76 431
9.96 7.08 11,207 0.45 6.44 0.88 342
$10.36 0.53% $ 1 0.71% 2.63% 0.71% 130%
$10.36 0.51% $ 1 1.00% 2.22% 1.41% 130%
$10.36 0.53% $ 1 0.71% 2.58% 0.71% 130%
$11.42 9.97% $1,689,327 0.55% 6.48% 0.64% 73%
11.09 16.10 1,057,993 0.55 6.67 0.67 108
10.17 4.21 82,017 0.55 6.80 1.07 97
10.40 10.14 4,641 0.55 7.33 3.98 466
$11.42 1.22% $ 1,781 0.68% 6.62% 0.72% 73%
$11.42 1.20% $ 1 1.18% 6.29% 1.41% 73%
$11.18 9.73% $ 15,975 0.80% 6.22% 0.88% 73%
10.75 15.72 14,992 0.90 6.45 0.93 108
9.78 3.29 9,877 0.89 6.53 1.20 97
$ 9.98 1.09% $ 129,259 0.20% 1.04% 0.26% 101%
9.98 0.92 146,513 0.20 1.10 0.26 244
10.00 0.00(7) 12,298 0.00(7) 0.00(7) 0.00(7) 0(7)
$ 9.98 0.08% $ 1 0.37% 1.46% 0.37% 101%
$ 9.98 0.06% $ 1 0.71% 1.12% 0.71% 101%
</Table>
(3) Institutional Shares commenced operations on December 29, 2000. All ratios
for the period have been annualized.
(4) A Shares commenced operations on December 21, 2001. All ratios for the
period have been annualized.
(5) Institutional Shares commenced operations on October 25, 2002. All ratios
for the period have been annualized.
(6) Net investment income and distributions from net investment income were less
than $0.01 per share.
(7) Amounts are not meaningful due to the short period of operations.
See notes to financial statements
48
NOTES TO FINANCIAL STATEMENTS
STI CLASSIC FUNDS October 31, 2004
1. Organization
The STI Classic Funds (the "Trust") was organized as a Massachusetts business
trust under a Declaration of Trust dated January 15, 1992 and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company offering 49 funds as of October 31, 2004.
The accompanying financial statements and financial highlights are those of the
STI Classic Institutional Core Bond Fund (the "Core Bond Fund"), the STI Classic
Institutional Intermediate Bond Fund (the "Intermediate Bond Fund"), the Seix
Institutional High Yield Fund (the "High Yield Fund"), and the STI Classic
Institutional Limited Duration Fund (the "Limited Duration Fund")(each a "Fund",
collectively, the "Funds"). The Funds are authorized to issue an unlimited
number of beneficial interest with no par value. Each Fund offers four classes
of shares: Institutional Shares, Class A Shares, Class L Shares, and Class T
Shares except for the Limited Duration Fund, which does not offer Class A
Shares. The financial statements of the remaining funds are presented
separately.
Under the Trust's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts with their vendors and others that provide for general
indemnifications. The Trust's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Trust.
However, based on experience, the Trust expects the risk of loss to be remote.
2. Reorganization
The Trust entered into an agreement and plan of reorganization with the Seix
Funds, Inc. (the "Seix Funds") pursuant to which all of the assets, subject to
stated liabilities, of each portfolio of the Seix Funds were transferred to a
corresponding series of the Trust in exchange for a corresponding Class of
shares of that series. The reorganization, which qualified as a tax-free
exchange for Federal income tax purposes, was completed on October 11, 2004,
following approval by shareholders of the Seix Funds at a special shareholder
meeting on September 23, 2004. The following is a summary of shares outstanding,
net assets and net asset value per share issued immediately before and after the
reorganization:
<Table>
<Caption>
After
Reorganization
Before Reorganization --------------
---------------------------- STI Classic
STI Classic Institutional
Seix Core Institutional Core Bond
Bond Fund Core Bond Fund Fund(c)
----------- -------------- --------------
Shares................. 5,493,647 -- 5,493,647
Net Assets............. $56,294,611 $ -- $56,294,611
Net Asset Value:
Institutional Shares... -- $ 10.25
I Shares(a)............ $ 10.25 --
A Shares............... -- $ 10.54
P Shares(b)............ $ 10.54 --
</Table>
- ---------------
(a) Institutional Shares were issued in exchange for I Shares in conjunction
with the reorganization.
(b) A Shares were issued in exchange for P Shares in conjunction with the
reorganization.
(c) The STI Classic Institutional Core Bond Fund retained the financial history
of the Seix Core Bond Fund.
49
<Table>
<Caption>
After
Before Reorganization Reorganization
--------------------------------- --------------
STI Classic STI Classic
Institutional Institutional
Seix Intermediate Intermediate Intermediate
Bond Fund Bond Fund Bond Fund(b)
----------------- ------------- --------------
Shares................ 3,422,155 -- 3,422,155
Net Assets............ $35,313,376 $ -- $35,313,376
Net Asset Value:
Institutional
Shares............... -- $ 10.32
I Shares(a)........... $ 10.32 --
</Table>
- ---------------
(a) Institutional Shares were issued in exchange for I Shares in conjunction
with the reorganization.
(b) The STI Classic Institutional Intermediate Bond Fund retained the financial
history of the Seix Intermediate Bond Fund.
<Table>
<Caption>
Before Reorganization After Reorganization
----------------------------------- --------------------
Seix High Seix Institutional Seix Institutional
Yield Fund High Yield Fund High Yield Fund(c)
-------------- ------------------ --------------------
Shares............... 142,460,313 -- 142,460,313
Net Assets........... $1,612,034,091 $ -- $1,612,034,091
Net Asset Value:
Institutional
Shares.............. -- $ 11.32
I Shares(a).......... $ 11.32 --
A Shares............. -- $ 11.08
P Shares(b).......... $ 11.08 --
</Table>
- ---------------
(a) Institutional Shares were issued in exchange for I Shares in conjunction
with the reorganization.
(b) A Shares were issued in exchange for P Shares in conjunction with the
reorganization.
(c) The Seix Institutional High Yield Fund retained the financial history of the
Seix High Yield Fund.
<Table>
<Caption>
After
Before Reorganization Reorganization
-------------------------------- ----------------
STI Classic STI Classic
Institutional Institutional
Seix Limited Limited Duration Limited Duration
Duration Fund Fund Fund(b)
------------- ---------------- ----------------
Shares............... 13,000,589 -- 13,000,589
Net Assets........... $129,705,443 $ -- $129,705,443
Net Asset Value:
Institutional
Shares.............. -- $ 9.98
I Shares(a).......... $ 9.98 --
</Table>
- ---------------
(a) Institutional Shares were issued in exchange for I Shares in conjunction
with the reorganization.
(b) The STI Classic Institutional Limited Duration Fund retained the financial
history of the Seix Limited Duration Fund.
3. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Funds in the preparation of its financial statements. These policies are in
conformity with accounting principles generally accepted in the United States of
America. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the reporting
period. The actual results could differ from these estimates.
Security Valuation -- All investments are valued daily at their market
price, which results in unrealized gains or losses. Debt and other fixed
income securities (other than short-term obligations) are valued at the
last quoted bid price and/or by using a combination of daily quotes and
matrix evaluations provided by an independent pricing service. Securities
traded on an exchange are valued at the latest sales
50
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC FUNDS October 31, 2004
price on that exchange. Securities for which over-the counter market
quotations are available are valued at the latest bid price. If a security
price cannot be obtained from an independent, third-party pricing agent,
the Funds seek to obtain a bid price from at least one independent broker.
Short-term securities purchased with sixty days or less remaining to
maturity are valued at amortized cost, which approximates market value.
Securities for which market prices are not "readily available" are valued
in accordance with Fair Value Procedures established by the Funds' Board of
Trustees. The Funds' Fair Value Procedures are implemented through a Fair
Value Committee (the "Committee") designated by the Funds' Board of
Trustees. Some of the more common reasons that may necessitate that a
security be valued using Fair Value Procedures include: the security's
trading has been halted or suspended; the security has been delisted from a
national exchange; the security's primary trading market is temporarily
closed at a time when under normal conditions it would be open; or the
security's primary pricing source is not able or willing to provide a
price. When a security is valued in accordance with the Fair Value
Procedures, the Committee will determine the value after taking into
consideration relevant information reasonably available to the Committee.
Securities Purchased on a When-Issued Basis -- Delivery and payment for
securities that have been purchases by a Fund on a forward commitment or
when-issued basis can take place up to a month or more after the
transaction date. During this period, such securities are subject to market
fluctuations. The purchase of securities on a when-issued or forward
commitment basis may increase the volatility of a Fund's net asset value if
the Fund makes such investments while remaining substantially fully
invested. A Fund records when-issued securities on trade date and maintains
security positions such that sufficient liquid assets will be available to
make payment for the securities purchased.
TBA Purchase Commitments -- The Funds may enter into "TBA" (To Be
Announced) purchase commitments to purchase securities for a fixed price at
a future date beyond customary settlement time. TBA purchase commitments
may be considered securities in themselves, and involve a risk of loss if
the value of the security to be purchased declines prior to settlement
date. Unsettled TBA purchase commitments are valued at the current market
value according to the procedures described under "Security Valuation."
Mortgage Dollar Rolls -- The Funds, except the Intermediate Bond Fund, may
enter into mortgage dollar rolls (principally using TBA's) in which a Fund
sells mortgage securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar securities at
an agreed-upon price on a fixed date. The Funds account for such dollar
rolls under the purchases and sales method and receive compensation as
consideration for entering into the commitment to repurchase. The Funds
must maintain liquid securities having a value not less than the repurchase
price (including accrued interest) for such dollar rolls. The market value
of the securities that the Funds are required to purchase may decline below
the agreed upon repurchase price of those securities.
The counterparty receives all principal and interest payments, including
pre-payments,
51
made in respect of a security subject to such a contract while it is with
the holder. Mortgage dollar rolls may be renewed with a new purchase and
repurchase price and a cash settlement made on settlement date without
physical delivery of the securities subject to the contract. The Funds
engage in dollar rolls for the purpose of enhancing its yield, principally
by earning a negotiated fee. As of October 31, 2004, only the Core Bond
Fund had open mortgage dollar rolls.
Compensating Balances -- If a Fund has a cash overdraft in excess of
$100,000 it is required to leave 110% in compensating balance with SunTrust
Bank (the "Custodian"), a wholly-owned subsidiary of SunTrust Banks, Inc.,
on the following day. If a Fund has a positive cash balance in excess of
$100,000 it is allowed to overdraw 90% of the balance with the Custodian on
the following business day.
Repurchase Agreements -- The Funds may purchase instruments from financial
institutions, such as banks and broker-dealers, subject to the seller's
agreement to repurchase them at an agreed upon time and price ("repurchase
agreement"). A third party custodian bank takes possession of the
underlying securities ("collateral") of a repurchase agreement, the value
of which exceeds the principal amount of the repurchase transaction,
including accrued interest. In the event of default on the obligation to
repurchase, each Fund has the right to liquidate the collateral and apply
the proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the counterparty to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
Securities Transactions and Investment Income -- Securities transactions
are accounted for no later than one business day after trade date. However,
for financial reporting purposes, securities transactions are reported on
trade date. Interest income is recognized on an accrual basis. Cost used in
determining net realized gains and losses on the sales of investment
securities are those of the specific securities sold, adjusted for the
accretion or amortization of purchase discounts or premiums during the
respective holding period. Dividend income is recorded on the ex-dividend
date.
Effective November 1, 2003, the Funds changed their amortization and
accretion methodology on premiums and discounts on fixed income securities
in order to conform more closely to Internal Revenue Code requirements. The
cumulative effect of this accounting change had no impact on total net
assets of each Fund, but resulted in the following reclasses (000):
<Table>
<Caption>
Change in Change in Unrealized
Interest Appreciation/
Income (Depreciation)
--------- --------------------
Core Bond Fund $ (2) $ 2
Intermediate Bond Fund (1) 1
High Yield Fund 815 (815)
Limited Duration Fund 1 (1)
</Table>
The statement of changes in net assets and financial highlights for prior
periods have not been restated to reflect this change in accounting
methodology
Allocations -- Expenses directly attributable to a Fund are charged to the
Fund, while expenses which are attributable to more than one Fund are
allocated among the respective Funds based upon relative net assets or
another reasonable basis.
52
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC FUNDS October 31, 2004
The investment income and expenses of a Fund (other than class specific
expenses charged to a class) and realized and unrealized gains and losses
on investments of a Fund are allocated to each class of shares based upon
relative net assets on the date income is earned, expenses are accrued, or
realized and unrealized gains and losses are incurred.
Dividends and Distributions to Shareholders -- Dividends from the Funds'
net investment income, if any, are declared daily and paid monthly.
Distributions from net short-term capital gains and net long-term capital
gains, if any, are declared and paid at least annually. However, to the
extent that a net realized capital gains can be offset by capital loss
carryovers, such gains will not be distributed. Dividends and distributions
are recorded by the Funds on the ex-dividend date.
Income dividends and capital gain distributions are determined in
accordance with federal income tax regulations and may differ from
accounting principles generally accepted in the United States of America.
These "book/tax" differences are either considered temporary or permanent
in nature. To the extent these differences are permanent in nature (i.e.
paydown gain/(loss)), such amounts are reclassified within the composition
of net assets based on their federal tax-basis treatment; temporary
differences do not require a reclassification.
Federal Income Taxes -- Each of the Funds intends to qualify each year as a
regulated investment company (a "RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended. A RIC generally is not subject to federal
income tax on income and gains distributed in a timely manner to its
shareholders. The Funds intend to make timely distributions in order to
avoid tax liability. Therefore, no federal income tax provision is
necessary.
4. Fees and Transactions with Affiliates
The Funds have entered into an Investment Advisory Agreement with Trusco Capital
Management, Inc. (the "Adviser"). Under this agreement, the Adviser is entitled
to receive a fee from the Funds that is calculated daily and paid monthly based
on a percentage of the average net assets of each Fund as follows:
<Table>
<Caption>
Maximum
Annual Net
Advisory Fees
Fee Paid
-------- -------
Core Bond Fund..................... 0.25% 0.11%
Intermediate Bond Fund............. 0.25 0.10
High Yield Fund.................... 0.50 0.41
Limited Duration Fund.............. 0.10 0.05
</Table>
The Adviser has voluntarily agreed to waive all or a portion of its fees (and to
reimburse Fund expenses). Fee waivers and expense reimbursements are voluntary
and may be terminated at any time.
BISYS Fund Services Limited Partnership ("BISYS"), and BISYS Fund Services Ohio,
Inc. ("BISYS Ohio") are subsidiaries of The BISYS Group, Inc. Effective October
11, 2004, BISYS Ohio began serving as the administrator for the Funds pursuant
to a Master Services Agreement (the "Services Agreement"). Under the Services
Agreement, BISYS Ohio is entitled to receive an asset-based fee for
administration, fund accounting and transfer agency services (expressed as a
percentage of the combined average daily net assets of the Trust and the STI
Classic Variable Trust) of 2.75 basis points (0.0275%) on the first $25 billion,
2.25 basis points (0.0225%) on the next $5 billion, and 1.75 basis points
(0.0175%) for
53
over $30 billion, plus an additional class fee of $2,500 per class per annum,
applicable to each additional class of shares over 145 classes of shares.
Effective October 11, 2004, BISYS began serving as the Funds' principal
underwriter and distributor (the "Distributor"). The Funds have adopted a
Distribution and Shareholder Services Plan and a Distribution Plan (the "Plans")
with which the Distributor receives compensation with respect to Class L Shares
and Class A Shares, respectively. These Plans are in accordance with Rule 12b-1
under the 1940 Act. Under the Plans, the Funds will pay fees of 0.25% of the
average daily net assets of Class A Shares, and a rate of 0.75% of the average
daily net assets of Class L Shares, except the class L Shares of the Limited
Duration Fund. In addition, Class L Shares are subject to a service fee of 0.25%
of the average daily net assets of the Class L Shares. The Funds have also
adopted shareholder service plans with respect to Institutional Shares and Class
T Shares of the Funds (collectively, the "Service Plan"). Under the Service
Plan, the Funds will pay SunTrust Bank a fee of up to 0.25% or 0.40% of the
average daily net assets attributable to the Institutional Shares or Class T
Shares, respectively. For the year ended October 31, 2004, the Institutional
Shares did not charge any shareholder servicing fees. Annualized fees received
by the Distributor and SunTrust Bank are outlined below for each share class:
<Table>
<Caption>
Maximum
T Share
Shareholder Fees
Servicing Fee Paid
------------- -----------
Core Bond Fund................. 0.40% 0.25%
Intermediate Bond Fund......... 0.40 0.20
High Yield Fund................ 0.40 0.15
Limited Duration Fund.......... 0.40 0.10
</Table>
<Table>
<Caption>
Maximum
L Share
Distribution Net
and Service Fees
Fee Paid
------------ ------------
Core Bond Fund............. 1.00% 0.63%
Intermediate Bond Fund..... 1.00 0.61
High Yield Fund............ 1.00 0.65
Limited Duration Fund...... 0.25 0.25
</Table>
<Table>
<Caption>
Maximum
A Share Net
Distribution Fees
Fee Paid
------------ ------------
Core Bond Fund.......... 0.25% 0.25%
Intermediate Bond Fund.. 0.25 0.25
High Yield Fund......... 0.25 0.25
</Table>
The Distributor has voluntarily agreed to waive all or a portion of its fees
(and to reimburse Fund expenses). Fee waivers and expense reimbursements are
voluntary and may be terminated at any time.
Effective October 11, 2004, SunTrust Bank began acting as custodian for the
Funds. SunTrust Bank is paid on the basis of net assets and transaction costs of
the Funds. The custodian plays no role in determining the investment policies of
the Trust or which securities are to be purchased or sold in the Funds. No fees
were paid to SunTrust Bank for the year ended October 31, 2004.
Prior to October 11, 2004, Investors Bank & Trust Company served as the
predecessor funds' administrator, custodian and transfer agent. Quasar
Distributors, LLC served as the predecessor funds' distributor. All distribution
fees for Class A Shares prior to October 11, 2004 were paid to Quasar
Distributors, LLC.
Certain Officers and Trustees of the Trust are affiliated with the Adviser or
BISYS Ohio. Such affiliated Officers and Trustees receive no compensation from
the Trust for serving in their respective
54
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC FUNDS October 31, 2004
roles. The Funds paid no compensation to the current non-interested Trustees of
the Trust for the year ended October 31, 2004; however, the Funds did pay
compensation to each of the non-interested Directors of the Seix Funds, Inc. of
$18,750 ($56,250 total), in meeting and retainer fees.
Effective October 11, 2004, the Funds entered into an agreement with SunTrust
Robinson Humphrey, a division of SunTrust Capital Markets, Inc. which is a
direct non-bank subsidiary of SunTrust Banks, Inc., to act as an agent in
placing repurchase agreements for the Funds. For the year ended October 31,
2004, the Funds paid SunTrust Robinson Humphrey through a reduction in the yield
earned by the Funds on those repurchase agreements the following fees (000):
<Table>
<Caption>
Fund Fees
---- -----
Core Bond Fund................................ $ --
Intermediate Bond Fund........................ --
High Yield Fund............................... 1
Limited Duration Fund......................... --
</Table>
5. Investment Transactions
The cost of security purchases and the proceeds from the sale of securities
(excluding securities maturing less than one year from acquisition) during the
year ended October 31, 2004 were as follows (000):
<Table>
<Caption>
Purchases Sales
---------------------------------- ----------------------------------
Portfolio U.S. Government Other Securities U.S. Government Other Securities
- --------- --------------- ---------------- --------------- ----------------
Core Bond Fund................................. $150,900 $ 18,186 $147,519 $ 12,496
Intermediate Bond Fund......................... 24,428 10,595 23,404 7,895
High Yield Fund................................ -- 1,570,611 -- 999,108
Limited Duration Fund.......................... 27,132 60,709 89,207 91,206
</Table>
6. Portfolio Investment Risks
Funds that invest in high yield instruments are subject to certain additional
credit and market risks. The yields of high yield debt obligations reflect,
among other things, perceived credit risk. High yield securities involve greater
risk of default or downgrade and are more volatile than investment grade
securities.
55
7. Capital Shares Transactions
Transactions in capital shares for the Funds were as follows:
<Table>
<Caption>
Classic Classic Seix Classic
Institutional Institutional Institutional Institutional
Core Bond Intermediate High Yield Limited Duration
Fund Fund Fund Fund
--------------------- --------------------- ---------------------- ---------------------
11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02-
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
--------- --------- --------- --------- --------- ---------- --------- ---------
Capital Transactions
Institutional Shares
Proceeds from shares issued.... $ 40,140 $ 1,085 $ 7,192 $ 561 $ 868,270 $1,018,097 $ 157,998 $ 261,425
Reinvestment of Cash
Distributions................ 2,082 1,629 973 1,126 74,278 28,000 1,533 965
Cost of shares redeemed........ (19,932) (52,503) (1,542) (13,659) (353,054) (102,501) (176,747) (128,190)
-------- -------- ------- -------- --------- ---------- --------- ---------
Increase (Decrease) in Net Assets
From Institutional Shares
Transactions................... $ 22,290 $(49,789) $ 6,623 $(11,972) $ 589,494 $ 943,596 $ (17,216) $ 134,200
-------- -------- ------- -------- --------- ---------- --------- ---------
T Shares
Proceeds from shares issued.... $ 1 $ 1 $ 1,798 $ 1
Reinvestment of Cash
Distributions................ -- -- -- --
Cost of shares redeemed........ -- -- (31) --
-------- -------- ------- -------- --------- ---------- --------- ---------
Increase in Net Assets From T
Shares Transactions............ $ 1 N/A $ 1 N/A $ 1,767 N/A $ 1 N/A
-------- -------- ------- -------- --------- ---------- --------- ---------
L Shares
Proceeds from shares issued.... $ 1 $ 1 $ 1 $ 1
Reinvestment of Cash
Distributions................ -- -- -- --
Cost of shares redeemed........ -- -- -- --
-------- -------- ------- -------- --------- ---------- --------- ---------
Increase in Net Assets From L
Shares Transactions............ $ 1 N/A $ 1 N/A $ 1 N/A $ 1 N/A
-------- -------- ------- -------- --------- ---------- --------- ---------
A Shares
Proceeds from shares issued.... $ 175 $ 201 $ 1 $ 3,288 $ 19,870
Reinvestment of Cash
Distributions................ -- -- -- 559 618
Cost of shares redeemed........ (65) (70) -- (3,509) (16,824)
-------- -------- ------- -------- --------- ---------- --------- ---------
Increase in Net Assets From A
Shares Transactions............ $ 110 $ 131 $ 1 N/A $ 338 $ 3,664 N/A N/A
-------- -------- ------- -------- --------- ---------- --------- ---------
Total Net Increase (Decrease)
from Capital Transactions...... 22,402 (49,658) 6,626 (11,972) 591,600 947,260 (17,214) 134,200
======== ======== ======= ======== ========= ========== ========= =========
</Table>
Amounts designated as "-- " are $0 or have been rounded to $0.
56
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC FUNDS October 31, 2004
7. Capital Shares Transactions (continued):
<Table>
<Caption>
Classic Classic Seix Classic
Institutional Institutional Institutional Institutional
Core Bond Intermediate High Yield Limited Duration
Fund Fund Fund Fund
--------------------- --------------------- --------------------- ---------------------
11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02- 11/01/03- 11/01/02-
10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03
--------- --------- --------- --------- --------- --------- --------- ---------
Share Transactions:
Institutional Shares
Issued.......................... 3,935 106 710 55 77,562 94,090 15,801 26,179
Reinvested...................... 205 159 95 110 6,653 2,577 166 97
Redeemed........................ (1,963) (5,072) (151) (1,343) (31,699) (9,352) (17,691) (12,832)
------- -------- ------ -------- -------- -------- -------- --------
Increase (Decrease) From
Institutional Shares
Transactions.................... 2,177 (4,807) 654 (1,178) 52,516 87,315 (1,724) 13,444
------- -------- ------ -------- -------- -------- -------- --------
T Shares
Issued.......................... -- -- 159 --
Reinvested...................... -- -- -- --
Redeemed........................ -- -- (3) --
------- -------- ------ -------- -------- -------- -------- --------
Increase From T Shares
Transactions.................... -- N/A -- N/A 156 N/A -- N/A
------- -------- ------ -------- -------- -------- -------- --------
L Shares
Issued.......................... -- -- -- --
Reinvested...................... -- -- -- --
Redeemed........................ -- -- -- --
------- -------- ------ -------- -------- -------- -------- --------
Increase From L Shares
Transactions.................... -- N/A -- N/A -- N/A -- N/A
------- -------- ------ -------- -------- -------- -------- --------
A Shares
Issued.......................... 17 19 -- 303 1,950
Reinvested...................... -- -- -- 51 60
Redeemed........................ (7) (7) -- (319) (1,625)
------- -------- ------ -------- -------- -------- -------- --------
Increase From A Shares
Transactions.................... 10 12 -- N/A 35 385 N/A N/A
------- -------- ------ -------- -------- -------- -------- --------
Total Net Increase (Decrease) from
Share Transactions.............. 2,187 (4,795) 654 (1,178) 52,707 87,700 (1,724) 13,444
======= ======== ====== ======== ======== ======== ======== ========
</Table>
Amounts designated as "-- " are $0 or have been rounded to $0.
57
8. Federal Income Tax Information
The tax character of distributions paid to shareholders during the fiscal year
ended October 31, 2004 was as follows (000):
<Table>
<Caption>
Distributions Paid From
------------------------------
Net Investment Net Long Term Total Taxable Total Distributions
Fund Income Capital Gains Distributions Paid*
- ---- -------------- ------------- ------------- -------------------
Core Bond Fund............................................ $ 2,217 $141 $ 2,358 $ 2,358
Intermediate Bond Fund.................................... 973 -- 973 973
High Yield Fund........................................... 89,336 164 89,500 89,500
Limited Duration Fund..................................... 1,544 -- 1,544 1,544
</Table>
- ---------------
* Total distributions paid differ from the Statement of Changes in Net Assets
because for tax purposes dividends are recognized when actually paid.
As of October 31, 2004 the components of accumulated earnings (deficit) on a tax
basis were as follows (000):
<Table>
<Caption>
Undistributed Undistributed Unrealized Total
Ordinary Long Term Accumulated Distributions Appreciation Accumulated
Fund Income Capital Gains Earnings Payable (Depreciation)* Earnings (Deficit)
- ---- ------------- ------------- ----------- ------------- --------------- ------------------
Core Bond Fund............... $ 353 $ 267 $ 620 $ (112) $ 741 $ 1,249
Intermediate Bond Fund....... 115 328 443 (63) 630 1,010
High Yield Fund.............. 17,246 7,880 25,126 (5,708) 54,924 74,342
Limited Duration Fund........ 120 3 123 (110) (38) (25)
</Table>
* The differences between book-basis and tax-basis unrealized appreciation
(depreciation) is attributable primarily to: the tax deferral of losses on
wash sales.
58
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC FUNDS October 31, 2004
At October 31, 2004, the cost of securities for federal income tax purposes, the
aggregate gross unrealized gain for all securities for which there was an excess
of value over tax cost and the aggregate gross unrealized loss for all
securities for which there was an excess of tax cost over value were as follows
(000):
<Table>
<Caption>
Tax Tax Net Unrealized
Unrealized Unrealized Appreciation/
Fund Tax Cost Appreciation (Depreciation) (Depreciation)
- ---- ---------- ------------ -------------- --------------
Core Bond Fund.............................................. $ 59,489 $ 843 $ (102) $ 741
Intermediate Bond Fund...................................... 35,772 671 (41) 630
High Yield Fund............................................. 1,646,632 58,182 (3,258) 54,924
Limited Duration Fund....................................... 127,910 14 (52) (38)
</Table>
During the year ended October 31, 2004, the Intermediate Bond Fund, and Limited
Duration Fund utilized capital loss carryforwards of $190,245 and $999,
respectively. As of October 31, 2004, the Funds did not have any net capital
loss carryforwards remaining to offset future gains.
59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS October 31, 2004
To the Board of Trustees and Shareholders of
STI Classic Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Classic Institutional Core Bond
Fund (formerly Seix Core Bond Fund), Classic Institutional Intermediate Bond
Fund (formerly Seix Intermediate Bond Fund), SEIX Institutional High Yield Fund
(formerly Seix High Yield Fund) and Classic Institutional Limited Duration Fund
(formerly Seix Limited Duration Fund) (four of the funds constituting STI
Classic Funds, hereafter referred to as the "Funds") at October 31, 2004, and
the results of each of their operations, the changes in each of their net assets
and the financial highlights for the year (or period) ended October 31, 2004, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Funds' management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The statements of changes in net assets for the year ended October
31, 2003 and the financial highlights for each of the four years (or periods)
ended October 31, 2003 of the predecessor funds were audited by other
independent accountants whose report dated December 19, 2003 expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 22, 2004
60
TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (UNAUDITED)
- --------------------------------------------------------------------------------
Information pertaining to the trustees of the Trust is set forth below. Trustees
who are not deemed to be "interested persons" of the Trust as defined in the
1940 Act are referred to as "Independent Board Member."
- --------------------------------------------------------------------------------
<Table>
<Caption>
TERM OF PRINCIPAL NUMBER OF OTHER
POSITION(S) OFFICE AND OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE OVERSEEN FOR HELD BY BOARD
DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS THE TRUST MEMBER
- -----------------------------------------------------------------------------------------------------------------------------
INTERESTED
BOARD MEMBERS*
Richard W. Courts, II Trustee November, 2001 Chairman of the Board, 49 Director, Cousins
3435 Stelzer Road Atlantic Investment Properties, Inc.; Director,
Columbus, OH 43219 Company, 1970 to present. Genuine Parts, Co.;
01/18/36 Director, Piedmont Hospital;
Director, SunTrust Bank,
Atlanta; Chairman, Courts
Foundation; Chairman, J.
Bulow Campbell Foundation.
Current Trustee of STI
Classic Variable Trust.
- -----------------------------------------------------------------------------------------------------------------------------
Clarence H. Ridley Trustee November, 2001 Chairman of the Board; 49 Director, Crawford & Co.;
3435 Stelzer Road Haverty Furniture Director, Pike's Family
Columbus, OH 43219 Companies, 2001 to Nurseries, Inc.; Trustee,
06/03/42 present; Partner, King St. Joseph's Health System,
and Spaulding LLP (law Inc.; Director, High Museum
firm), 1971 to 2000. of Atlanta. Current Trustee
of STI Classic Variable
Trust.
- -----------------------------------------------------------------------------------------------------------------------------
INDEPENDENT
BOARD MEMBERS
Thomas Gallagher Trustee May, 2000 President, Genuine Parts 49 Director, Shepherd Center;
3435 Stelzer Road Company Wholesale Director, NAPA; Director,
Columbus, OH 43219 Distribution, 1970 to Genuine Parts Co.; Director,
11/25/47 present. Stone Mountain Industrial
Park; Trustee, The Lovett
School; Director, Oxford
Industries. Current Trustee
of STI Classic Variable
Trust.
- -----------------------------------------------------------------------------------------------------------------------------
F. Wendell Gooch Trustee May, 1992 Retired. 49 Current Trustee of STI
3435 Stelzer Road Classic Variable Trust, The
Columbus, OH 43219 Capitol Mutual Funds and SEI
12/03/32 Family of Funds.
- -----------------------------------------------------------------------------------------------------------------------------
James O. Robbins Trustee May, 2000 President and Chief 49 Director, National Cable and
3435 Stelzer Road Executive Officer, Cox Telecommunications
Columbus, OH 43219 Communications, Inc., Association; Director,
07/04/42 1985 to present. Discovery Channel; Director,
Cable Labs; Director,
C-SPAN; Trustee, St. Paul's
Schools; Director, Cox
Communications. Current
Trustee of STI Classic
Variable Trust.
- -----------------------------------------------------------------------------------------------------------------------------
Jonathan T. Walton Trustee February, 1998 Retired. 49 Current Trustee of STI
3435 Stelzer Road Classic Variable Trust and
Columbus, OH 43219 W.K. Kellogg Trust.
03/28/30
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
61
- --------------------------------------------------------------------------------
Trustees who are deemed to be "interested persons" of the Trust are referred to
as "Interested Board Member." Messrs. Courts and Ridley are Trustees who may be
deemed to be "interested persons" of the Trust.
- --------------------------------------------------------------------------------
<Table>
<Caption>
TERM OF PRINCIPAL NUMBER OF OTHER
POSITION(S) OFFICE AND OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE OVERSEEN FOR HELD BY BOARD
DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS THE TRUST MEMBER
- -----------------------------------------------------------------------------------------------------------------------------
Sidney E. Harris Trustee November, 2004 Dean of Robinson College 49 Director, ServiceMaster;
3435 Stelzer Road of Business, Georgia Director, Total System
Columbus, OH 43219 State University. Services, Inc. Current
07/21/49 Trustee of STI Classic
Variable Trust.
- -----------------------------------------------------------------------------------------------------------------------------
Warren Y. Jobe Trustee November, 2004 Retired. 49 Director, WellPoint Health
3435 Stelzer Road Networks; Director,
Columbus, OH 43219 UniSource Energy Corp.;
11/12/40 Director, Tucson Electric
Power. Current Trustee of
STI Classic Variable Trust.
- -----------------------------------------------------------------------------------------------------------------------------
Charles D. Winslow Trustee November, 2004 Retired. 49 Current Trustee of STI
3435 Stelzer Road Classic Variable Trust.
Columbus, OH 43219
07/13/35
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
* Mr. Courts may be deemed an interested Trustee because of his directorships
with affiliates of the Adviser. Mr. Ridley may be deemed an interested Trustee
because of a material business relationship with the parent of the Adviser.
62
TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (UNAUDITED)
- --------------------------------------------------------------------------------
<Table>
<Caption>
TERM OF PRINCIPAL
POSITION(S) OFFICE AND OCCUPATION(S)
NAME, ADDRESS, AND HELD WITH LENGTH OF DURING THE
DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS
- ---------------------------------------------------------------------------------------------------------------------------
OFFICERS
R. Jeffrey Young President Since 2004 Senior Vice President, Relationship Management,
3435 Stelzer Road BISYS Fund Services since April 2002. Vice
Columbus, OH 43219 President, Client Services, BISYS Fund Services from
08/22/64 May 1997 to April 2002.
- ---------------------------------------------------------------------------------------------------------------------------
Bryan C. Haft Treasurer and CFO Since 2004 Vice President, Financial Administration, BISYS Fund
3435 Stelzer Road Services since July 2000. Director, Administration
Columbus, OH 43219 Services, BISYS Fund Services from May 1998 to July
01/23/65 2000.
- ---------------------------------------------------------------------------------------------------------------------------
Deborah A. Lamb Executive Vice President, Since 2003 Chief Compliance Officer and Managing Director of
3435 Stelzer Road Assistant Secretary and CCO Trusco Capital Management, Inc. since March 2003 and
Columbus, OH 43219 President of Investment Industry Consultants, LLC
10/02/52 since June 2000. Director of Compliance at INVESCO,
Inc. from March 1995 to June 2000.
- ---------------------------------------------------------------------------------------------------------------------------
Alaina V. Metz Assistant Secretary Since 2004 Vice President, Blue Sky Compliance, BISYS Fund
3435 Stelzer Road Services since January 2002. Chief Administrative
Columbus, OH 43219 Officer, Blue Sky Compliance, BISYS Fund Services
04/07/67 from June 1995 to January 2002.
- ---------------------------------------------------------------------------------------------------------------------------
Julie M. Powers Assistant Secretary Since 2004 Senior Paralegal, Legal Services, BISYS Fund
3435 Stelzer Road Services since June 2000. Paralegal of Phillips,
Columbus, OH 43219 Lytle, Hitchcock, Blaine & Huber LLP from March 1998
10/08/69 to June 2000.
- ---------------------------------------------------------------------------------------------------------------------------
</Table>
63
SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------
A Special Meeting of the Shareholders of the Seix Funds, Inc. was held on
September 23, 2004. At the meeting, shareholders voted on and approved the
following proposals:
Proposal 1: Approval of the Agreement and Plan of Reorganization, which
provides for: (1) the transfer of all of the assets and liabilities of each
portfolio of the Seix Funds, Inc. in exchange for shares of the corresponding
series of the Trust; (2) the distribution of the Trust's shares so received to
shareholders of the corresponding Seix Fund; and (3) the termination under state
law of the Seix Funds.
Proposal 2: Approval of a new investment advisory agreement between Trusco
Capital Management, Inc. and the Seix Funds on behalf of each Seix Fund.
The results of this meeting are presented below:
<Table>
<Caption>
Proposal 1: For Against Abstain Total
- ----------- ---------- ------- --------- ----------
Seix Core Bond Fund......................................... 4,060,433 -- 117 4,060,550
Seix Intermediate Bond Fund................................. 2,910,988 -- -- 2,910,988
Seix High Yield Fund........................................ 82,585,863 44,534 1,225,616 83,856,013
Seix Limited Duration Fund.................................. 11,824,034 -- -- 11,824,034
</Table>
<Table>
<Caption>
Proposal 2: For Against Abstain Total
- ----------- ---------- ------- --------- ----------
Seix Core Bond Fund......................................... 4,060,433 -- 117 4,060,550
Seix Intermediate Bond Fund................................. 2,910,988 -- -- 2,910,988
Seix High Yield Fund........................................ 82,630,397 -- 1,225,616 83,856,013
Seix Limited Duration Fund.................................. 11,824,034 -- -- 11,824,034
</Table>
Proxy Voting (unaudited)
Information regarding the policies and procedures that the Funds use to
determine how to vote proxies relating to portfolio securities and how the Funds
voted proxies relating to portfolio securities during the year ended October 31,
2004 is available (1) without charge, upon request, by calling 1-800-428-6970,
and (2) on the Securities and Exchange Commission's website at www.sec.gov.
Other Information (unaudited)
Schedules of Portfolio Investments for periods ending July 31, 2004 and January
31, 2005 are available, without charge, on the Securities and Exchange
Commission's website at www.sec.gov.
64
EXPENSE EXAMPLES (UNAUDITED)
- --------------------------------------------------------------------------------
As a shareholder of the STI Classic Funds, you incur two types of costs: (1)
transactions costs, including sales charges (loads) (A Shares only) on
purchases, reinvested dividends, or other distributions; redemption fees
(contingent deferred sales charges on L Shares only); and exchange fees; (2)
ongoing costs, including management fees, distribution (and/or service) 12b-1
fees (L and A Shares only) and other Fund expenses. This example is intended to
help you understand you ongoing costs (in dollars) of investing in the STI
Classic Funds and to compare these costs with the ongoing costs of investing in
other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from May 1, 2004 through October 31, 2004.
Actual Expenses
The table below provides information about the actual account values and actual
expenses. You may use the information below, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the table under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
<Table>
<Caption>
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
Fund 05/01/04 10/31/04 05/01/04-10/31/04 05/01/04-10/31/04
- ---- ----------------- -------------- ----------------- -----------------
Core Bond Fund............ Institutional $1,000.00 $1,041.50 $2.32 0.45%
Core Bond Fund............ T Shares (a) 1,000.00 1,006.70 0.32 0.56%
Core Bond Fund............ L Shares (a) 1,000.00 1,006.50 0.63 1.10%
Core Bond Fund............ A Shares 1,000.00 1,039.90 3.60 0.70%
Intermediate Bond Fund.... Institutional 1,000.00 1,035.20 2.31 0.45%
Intermediate Bond Fund.... T Shares (a) 1,000.00 1,005.30 0.41 0.71%
Intermediate Bond Fund.... L Shares (a) 1,000.00 1,005.10 0.58 1.00%
Intermediate Bond Fund.... A Shares (a) 1,000.00 1,005.30 0.41 0.71%
High Yield Fund........... Institutional 1,000.00 1,058.50 2.85 0.55%
High Yield Fund........... T Shares (a) 1,000.00 1,012.20 0.39 0.68%
High Yield Fund........... L Shares (a) 1,000.00 1,012.00 0.68 1.18%
High Yield Fund........... A Shares 1,000.00 1,058.60 4.15 0.80%
Limited Duration Fund..... Institutional 1,000.00 1,005.40 1.01 0.20%
Limited Duration Fund..... T Shares (a) 1,000.00 1,000.80 0.21 0.37%
Limited Duration Fund..... L Shares (a) 1,000.00 1,000.60 0.41 0.71%
</Table>
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
** Annualized.
(a) Class commenced operations on October 11, 2004.
65
- --------------------------------------------------------------------------------
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on each STI Classic Funds' actual expense ratio and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
<Table>
<Caption>
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
Fund 05/01/04 10/31/04 05/01/04-10/31/04 05/01/04-10/31/04
- ---- ------------- ------------- ------------------ ------------------
Core Bond Fund............... Institutional $1,000.00 $1,022.94 $2.29 0.45%
Core Bond Fund............... T Shares (a) 1,000.00 1,022.38 0.33 0.56%
Core Bond Fund............... L Shares (a) 1,000.00 1,019.66 0.64 1.10%
Core Bond Fund............... A Shares 1,000.00 1,021.68 3.57 0.70%
Intermediate Bond Fund....... Institutional 1,000.00 1,022.94 2.29 0.45%
Intermediate Bond Fund....... T Shares (a) 1,000.00 1,021.63 0.41 0.71%
Intermediate Bond Fund....... L Shares (a) 1,000.00 1,020.16 0.58 1.00%
Intermediate Bond Fund....... A Shares (a) 1,000.00 1,021.63 0.41 0.71%
High Yield Fund.............. Institutional 1,000.00 1,022.43 2.80 0.55%
High Yield Fund.............. T Shares (a) 1,000.00 1,021.78 0.40 0.68%
High Yield Fund.............. L Shares (a) 1,000.00 1,019.26 0.69 1.18%
High Yield Fund.............. A Shares 1,000.00 1,021.17 4.08 0.80%
Limited Duration Fund........ Institutional 1,000.00 1,024.20 1.02 0.20%
Limited Duration Fund........ T Shares (a) 1,000.00 1,023.34 0.22 0.37%
Limited Duration Fund........ L Shares (a) 1,000.00 1,021.63 0.41 0.71%
</Table>
- ---------------
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
** Annualized.
(a) Class commenced operations on October 11, 2004.
66
[This page intentionally left blank]
INVESTMENT ADVISER:
Trusco Capital Management, Inc.
STI Classic Funds are not deposits, are not insured or guaranteed by the FDIC or
any other government agency, and are not endorsed by and do not constitute
obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment
in the Funds involves risk, including the possible loss of principal. There is
no guarantee that any STI Classic Fund will achieve its investment objective.
The STI Classic Funds are advised by Trusco Capital Management, Inc., an
affiliate of SunTrust Banks, Inc.
DISTRIBUTOR:
BISYS Fund Services LP
This information must be preceded or accompanied by a current prospectus for
each Fund described.
STIARCF 12/04
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO THE
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER,
PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS PERFORMING SIMILAR
FUNCTIONS. THIS CODE OF ETHICS IS INCLUDED AS EXHIBIT 11 (a)(1).
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics
that applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 11(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S
CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY
WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE
OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (b) OF THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has
determined that the registrant either:
(i) Has at least one audit committee financial expert
serving on its audit committee; or
(ii) Does not have an audit committee financial expert
serving on its audit committee.
(2) If the registrant provides the disclosure required by
paragraph (a)(1)(i) of this Item, it must disclose the name of
the audit committee financial expert and whether that person
is "independent." In order to be considered "independent" for
purposes of this Item, a member of an audit committee may not,
other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board
committee:
(i) Accept directly or indirectly any consulting,
advisory, or other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company
as defined in Section 2(a)(19) of the Act (15 U.S.C.
80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by
paragraph (a)(1)(ii) of this Item, it must explain why it does
not have an audit committee financial expert.
3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT
HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT
COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS WARREN Y. JOBE, WHO IS
"INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Information presented in Item 4 represents amounts paid by the registrant,
including amounts paid for the services to the Funds included in the
accompanying report (see Item 1).
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
Audit Fees: the aggregate fees billed for each of the last two fiscal
years for professional services rendered by PricewaterhouseCoopers LLP for
the audit of the Funds' annual financial statements or services that are
normally provided by the accountant in connection with statutory and
regulatory filings or engagements for those fiscal years were as follows:
2003 $448,509
2004 $663,000
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit-Related Fees: the aggregate fees billed for each of the last two
fiscal years for assurance and related services by PricewaterhouseCoopers
LLP that are reasonably related to the performance of the audit of the
Funds' financial statements and are not reported under Item 1 were as
follows:
2003 $61,500(1)
2004 $72,000(1)
Notes:
(1) Services related to securities count examinations under Rule 17f-2 of
the Investment Company Act.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
Tax Fees: the aggregate fees billed for each of the last two fiscal years
for professional services rendered by PricewaterhouseCoopers LLP for tax
compliance, tax advice, and tax planning were as follows:
2003 $0
2004 $0
(d) Disclose, under the caption All Other Fees, the aggregate fees billed
in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
All Other Fees: the aggregate fees billed for each of the last two fiscal
years for products and services provided by PricewaterhouseCoopers LLP to
the Funds, other than the services reported in Items 1 through 3.
2003 $0
2004 $0
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
THE TRUST'S AUDIT COMMITTEE CHARTER PROVIDES THAT THE PRINCIPAL
RESPONSIBILITIES OF THE COMMITTEE SHALL INCLUDE APPROVING AUDIT AND
NON-AUDIT SERVICES AN INDEPENDENT ACCOUNTING FIRM PROVIDES TO THE TRUST
(AND CERTAIN TRUST SERVICE PROVIDERS) AS REQUIRED BY AND IN ACCORDANCE
WITH APPLICABLE LAW. THE COMMITTEE IS AUTHORIZED TO DEVELOP POLICIES AND
PROCEDURES, IN ACCORDANCE WITH APPLICABLE LAW, THAT PROVIDE FOR THE
ADVANCE PRE-APPROVAL OF SOME OR ALL AUDIT AND NON-AUDIT SERVICES. THE
COMMITTEE IS FURTHER AUTHORIZED TO DELEGATE ITS RESPONSIBILITY TO
PRE-APPROVE AUDIT AND NON-AUDIT SERVICES TO ONE OR MORE MEMBERS OF THE
COMMITTEE, IN ACCORDANCE WITH APPLICABLE LAW.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
2003 0%
2004 0%
(f) If greater than 50 percent, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountant's full-time, permanent
employees.
2003/2004: The percentage of hours expended on PricewaterhouseCoopers LLP
engagement to audit the Funds' financial statements for the most recent
fiscal year that were attributed to work performed by persons other than
the principal accountant's full-time, permanent employees was 0%.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
The aggregate non-audit fees billed by the registrant's
PricewaterhouseCoopers LLP for services rendered to the Funds, and
rendered to the Funds investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling,
controlled by, or under common control with the adviser that provides
ongoing services to the Funds for each of the last two fiscal years of the
registrant were as follows:
2003 $1,498,453
2004 $2,291,907
Non-audit services relate principally to certain technical accounting
advice on financial products of the Bank; Sarbanes-Oxley 404
implementation and testing; and, tax compliance services to other entities
controlled by SunTrust Banks, Inc.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
THE AUDIT COMMITTEE HAS CONSIDERED THAT THE PROVISION OF NON-AUDIT
SERVICES THAT WERE RENDERED TO THE REGISTRANT'S INVESTMENT ADVISER (NOT
INCLUDING ANY SUBADVISER WHOSE ROLE IS PRIMARILY PORTFOLIO MANAGEMENT AND
IS SUBCONTRACTED WITH OR OVERSEEN BY ANOTHER INVESTMENT ADVISER), AND ANY
ENTITY CONTROLLING, CONTROLLED BY, OR UNDER COMMON CONTROL WITH THE
INVESTMENT ADVISER THAT PROVIDES ONGOING SERVICES TO THE REGISTRANT THAT
WERE NOT PRE-APPROVED PURSUANT TO PARAGRAPH (c)(7)(ii) OF RULE 2-01 OF
REGULATION S-X IS COMPATIBLE WITH MAINTAINING THE PRINCIPAL ACCOUNTANT'S
INDEPENDENCE.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act (17CFR 240.10A-3), state whether or not the
registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a
committee, however designated, identify each committee member. If
the entire board of directors is acting as the registrant's audit
committee as specified in Section 3(a)(58)(B) of the Exchange Act
(15 U.S.C. 78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption
from the listing standards for all audit committees.
NOT APPLICABLE.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in Section 210.12-12 of Regulation
S-X, unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report
on this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment
adviser, or any other third party, that the company uses, or that are used on
the company's behalf, to determine how to vote proxies relating to portfolio
securities.
NOT APPLICABLE.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
NOT APPLICABLE.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
THE TRUST, EFFECTIVE SEPTEMBER 28, 2004, ADOPTED PROCEDURES BY WHICH
SHAREHOLDERS MAY RECOMMEND NOMINEES TO THE REGISTRANT'S BOARD OF DIRECTORS.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financial officers, or persons performing similar functions, regarding
the effectiveness of the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date
within 90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS
REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED
AND ARE OPERATING EFFECTIVELY TO ENSURE THAT INFORMATION REQUIRED TO BE
DISCLOSED BY THE REGISTRANT ON FORM N-CSR IS (i) ACCUMULATED AND COMMUNICATED TO
THE INVESTMENT COMPANY'S MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW
TIMELY DECISIONS REGARDING REQUIRED DISCLOSURE; AND (ii) RECORDED, PROCESSED,
SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND
EXCHANGE COMMISSION'S RULES AND FORMS.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING THAT OCCURRED DURING THE SECOND FISCAL QUARTER OF THE PERIOD COVERED
BY THIS REPORT THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO
MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.
ITEM 11. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number
the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit. THE CODE OF ETHICS
THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS ATTACHED HERETO.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO RULE 30a-2(a) ARE
ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. NOT APPLICABLE.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. CERTIFICATIONS PURSUANT TO RULE 30a-2(b) ARE FURNISHED HEREWITH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) STI Classic Funds
By (Signature and Title)* /s/ Bryan Haft, Treasurer
--------------------------------------------
Bryan Haft, Treasurer
Date January 6, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ R. Jeffrey Young, President
--------------------------------------------
R. Jeffrey Young, President
Date January 6, 2005
By (Signature and Title)* /s/ Bryan Haft, Treasurer
--------------------------------------------
Bryan Haft, Treasurer
Date January 6, 2005
* Print the name and title of each signing officer under his or her signature.