UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09032
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STI Classic Variable Trust
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(Exact name of registrant as specified in charter)
101 Federal Street Boston, MA 02110
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(Address of principal executive offices) (Zip code)
BISYS Fund Services, 3435 Stelzer Road Columbus, Ohio 43219
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(Name and address of agent for service)
Registrant's telephone number, including area code: 614-470-8000
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Date of fiscal year end: 12/31
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Date of reporting period: 12/31/05
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ITEM 1. REPORTS TO STOCKHOLDERS.
2005 ANNUAL REPORT
STI CLASSIC VARIABLE TRUST
December 31, 2005
STI CLASSIC
VARIABLE TRUST
TABLE OF CONTENTS
STI CLASSIC VARIABLE TRUST December 31, 2005
Letter to Shareholders ................................... 1
MANAGEMENT DISCUSSION AND ANALYSIS
Capital Appreciation Fund ................................ 3
International Equity Fund ................................ 5
Investment Grade Bond Fund ............................... 7
Large Cap Relative Value Fund ............................ 9
Large Cap Value Equity Fund .............................. 11
Mid-Cap Equity Fund ...................................... 13
Small Cap Value Equity Fund .............................. 15
Schedules of Portfolio Investments ....................... 17
Statements of Assets and Liabilities ..................... 32
Statements of Operations ................................. 33
Statements of Changes in Net Assets ...................... 34
Financial Highlights ..................................... 37
Notes to Financial Statements ............................ 39
Report of Independent Registered Public Accounting Firm... 47
Trustees and Officers of the STI Classic Variable Trust... 48
Additional Information ................................... 50
LETTER TO SHAREHOLDERS
STI CLASSIC VARIABLE TRUST December 31, 2005
Dear STI Classic Variable Trust Shareholders,
The post-hurricane recovery, moderating oil prices, and encouraging comments
from the Federal Reserve Board (the "Fed") helped both stocks and bonds improve
in the fourth quarter, though full-year performance was generally below the
historic averages. We will highlight some key developments in the economy and
the financial markets in the coming paragraphs, but would first like to thank
you for your confidence and support in choosing the STI Classic Variable Trust
to help grow your investments. We greatly value the opportunity to serve you,
and we strive to earn your business every day.
The economic backdrop was one of improvement and respite from the "headwinds"
that restrained growth in 2005. First, the economy ended the fourth quarter on
solid footing following a brief hurricane induced stumble. Job growth returned
and manufacturing accelerated, setting the stage for firm expansion at the
beginning of 2006. A second positive development was moderation in energy prices
which spiked in September. This lowered home heating and driving costs and
boosted consumer confidence during the holiday shopping season. The third factor
was a shift in the Fed's policy rhetoric. After raising the overnight fed funds
rate in thirteen consecutive meetings to 4.25%, the Fed stopped viewing policy
as "accommodative," raising hopes that the long string of rate hikes would end
soon.
Equities moved broadly higher during the quarter, led again by mid-cap stocks
and internationals. The combination of a growing preference for higher quality
companies and an extended period of outperformance by small-caps exerted a
significant influence on the market in the fourth quarter. The S&P 500 rose 2.1%
on a total return basis and 4.9% for all of 2005. This performance was positive
and better than that in the bond market, but it was less than half the historic
average. Mid-caps as measured by the Russell Midcap(R) Index, gained 2.3% in the
final quarter and 12.7% for the year, while the Russell 2000 Small Cap(R) index
trailed with a 1.1% rise and 4.6% in 2005. International stocks enjoyed the
strongest gains with 4.1% in the fourth quarter and 14.0% for the year. An
eclectic mix of Industrials, Financials, and Materials stocks led the market,
while high-flying Energy and Utility stocks retreated from the year's highs.
In the fixed-income markets, the yield on the 10-year Treasury note was
relatively unchanged in the final three months and closed the year at 4.39%.
However, the additional rate hikes from the Federal Reserve continued to lift
short-term yields causing the yield curve to flatten, and by December 31, the
yield on the 2-year Treasury was slightly above 5- and 10-year yields:
technically a yield curve "inversion." Still the Lehman Aggregate Bond index
added 0.6% in the fourth quarter and 2.4% in 2005. The quality theme in the
equity markets was also evident in the bond markets. Treasuries outperformed
Corporate bonds, and credit quality spreads increased slightly.
The outlook for the New Year is generally favorable and equity valuations are
reasonable, but the markets will have their share of challenges, known and yet
to be known. Consumers should enjoy reasonable job growth over the near term
which could provide income for spending. However, the extra stimulus from such
things as tax cuts, home refinancing, and easy access to home equity will be
either reduced or eliminated, so that consumer momentum could begin to slow.
Corporate profits finished the year with another double-digit increase, but the
pace of corporate investment could also slow if earnings growth decelerates as
expected and cost pressures
1
continue to increase. We expect the Federal Reserve to take a "pause" in its
long string of interest rate increases over the course of 2006, but final policy
decisions will depend heavily on the evolution of the inflation mosaic. Core
inflation remained moderate for most of 2005, but the relative steadiness of
inflation was the result of rising costs in some segments being offset by
deflation in other areas. We believe that dynamic will continue in 2006 and that
core inflation be remain reasonably contained. Overall, we believe stocks can
move higher in this environment, and that any rise in bond yields should be
moderate.
We close this letter with thanks to you, our valued clients, and also to Doug
Phillips, CFA, the founding president of Trusco Capital Management. Under Doug's
outstanding leadership, the STI Classic Variable Trust thrived even in
challenging markets to become one of the leading fund families in the nation.
But perhaps we are most grateful to Doug Phillips for his strong sense of
discipline, integrity, and commitment to the highest levels of client service.
He will be missed, but his legacy will endure.
Sincerely,
/s/ David H. Eidson
- ---------------------------------
David H. Eidson, Chairman and CEO
/s/ Robert J. Rhodes
- ----------------------------------------------
Robert J. Rhodes, CFA, Executive Vice President
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The foregoing information and opinions are for general information only. STI
Classic Variable Trust and Trusco Capital Management do not assume liability for
any loss which may result from the reliance by any person upon such information
or opinions. Such information and opinions are subject to change without notice,
are for general information only and are not intended as an offer or
solicitation with respect to the purchase or sale of any security, or as
offering individual or personalized investment advice.
THIS MATERIAL IS AUTHORIZED FOR DISTRIBUTION ONLY WHEN PRECEDED OR ACCOMPANIED
BY A CURRENT PROSPECTUS. AN INVESTOR SHOULD CONSIDER THE FUND'S INVESTMENT
OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING OR
SENDING MONEY. THIS AND OTHER IMPORTANT INFORMATION ABOUT THE STI CLASSIC
VARIABLE TRUST CAN BE FOUND IN THE FUND'S PROSPECTUS. TO OBTAIN MORE
INFORMATION, CALL 1-888-STI-FUND. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING.
STI Classic Variable Trust is distributed by BISYS Fund Services Limited
Partnership, which is not affiliated with Trusco Capital Management, Inc.
2
CAPITAL APPRECIATION FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
MANAGEMENT DISCUSSION & ANALYSIS
Q: HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: Fund performance in 2005 was very disappointing. Total return was -0.90%,
compared to +4.91% for the S&P 500 Index. One bright spot was a strong
recovery in the fourth quarter, where the Fund gained +3.53% while the S&P
500 was up only +2.08%. Many of the strategies we put in place finally
paid off, but too late to benefit the full year. In particular, the impact
of two major hurricanes in the third quarter was detrimental to many
quality growth stocks held by the Fund, while energy and utility stocks
continued to soar.*
Q: WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The major factors in 2005 performance were as follows. Stock selection in
the Healthcare sector was ineffective. We emphasized medical device stocks
because they had strong growth, but the stocks failed to perform well.
Stock selection also lagged in Information Technology, although the Fund's
overweight helped somewhat. Additionally, underweighting the portfolio in
the Energy and Utilities sectors was detrimental, as those sectors were by
far the highest performers in the S&P 500. We offset the negatives
somewhat with the good stock selection in Consumer Discretionary and
Industrial sectors.*
Q: HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: As 2006 begins, several important aspects of the U.S. equity market
dominate our attention. First, after three years of market recovery,
investors appear to be under pricing risk. With the Fed tightening, very
high energy prices, and consumers stretched in terms of debt levels, the
lower quality, more leveraged stocks look expensive while higher quality
stocks look very reasonable. For example, per data received from Merrill
Lynch--a well-known broker-dealer--stocks rated B-minus sell at an average
of 23 times the 2006 estimated earnings, while stocks in the A+ to A-
category range from 16-19 times. This gap of over 30% in valuations
provides strong incentive to go with higher quality.
Second, we believe earnings growth should slow in 2006, from mid-teens to
single-digit year/year rates. This is because most of the cyclical
expansion in profit margins has already been seen, and comparisons are
finally becoming fairly difficult. In this environment, we believe
companies with visible top and bottom line growth should do better.
Third, at the sector level, we are wary of energy stocks until they have a
significant price correction. Energy valuations based on price/book(1) and
dividends are quite high, as is the price of oil relative to its
reasonable trend. This makes the reward versus risk less appealing for
energy stocks, unlike 1999 through 2000 when they were cheap and oil was
low.
Lastly, at this stage of the economic cycle, consumer related spending
will persist, but with more modest progress. Corporations, with healthy
cash, slower debt levels, and strong cash flow, are in a better position
to spend on acquisitions, capital investment, and returning capital to
shareholders.
Pulling all of these trends together, the Fund is thus tilted toward
higher quality stocks which we believe to have sustainable growth in the
year ahead. Also, the Fund is currently underweight in lower growth
cyclicals such as, Energy and Utilities, and overweight in Industrial and
Technology related industries which benefit from capital spending.*
3 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
CAPITAL APPRECIATION FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
CAPITAL APPRECIATION FUND
<Table>
<Caption>
Capital App S&P 500 Lipper Large-Cap Core
12/31/95 10000 10000 10000
10621 10537 10594
11135 11009 10997
11622 11349 11344
12/96 12375 12295 12134
12758 12625 12272
15081 14827 14217
16177 15937 15408
12/97 16897 16395 15646
19315 18680 17601
20171 19300 17970
17769 17385 15932
12/98 21793 21084 19254
22185 22134 19969
24085 23691 21366
21772 22215 19974
12/99 23694 25518 22937
24643 26103 23814
25124 25409 23224
25291 25163 23292
12/00 24422 23196 21727
22475 20447 19145
24000 21643 20166
20459 18468 17138
12/01 23117 20441 19011
22958 20497 18978
20181 17753 16533
17391 14687 13867
12/02 18057 15925 14807
17669 15423 14293
19223 17796 16310
19473 18267 16691
12/03 21388 20490 18578
21846 20837 18814
22069 21195 19004
21139 20799 18521
12/04 22833 22718 20148
21990 22230 19737
21800 22535 19977
21856 23347 20709
12/31/05 22628 23833 21180
</Table>
This chart assumes an initial hypothetical investment of $10,000 made on
12/31/95. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the S&P 500 Index an unmanaged index that consists
of 500 selected common stocks, most of which are listed on the New York Stock
Exchange, and is a measure of the U.S. stock market as a whole. The performance
of the index does not reflect the deduction of expenses associated with a mutual
fund, such as investment adviser and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
The Lipper Mutual Funds Average is an equally weighted average of the mutual
funds within their respective investment objectives, adjusted for the
reinvestment of capital gains distributions and income dividends.
AVERAGE ANNUAL TOTAL RETURNS(2) (As of December 31, 2005)
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- -------- ----------- ---------- ---------
-0.90% 7.81% -1.51% 8.51%
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 THE 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.
(1) The ratio of price-to-book value gives an investor an idea about the
relationship between the stock's price and the company's underlying value. Other
things being equal, people who invest for value prefer companies with a low
ration of price-to-book value.
(2) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
Information Technology............... 23.2%
Industrials.......................... 17.7%
Financials........................... 14.0%
Consumer Discretionary............... 13.3%
Short-Term Investment................ 11.6%
Health Care.......................... 10.3%
Consumer Staples..................... 4.1%
Energy............................... 3.4%
Materials............................ 1.0%
Telecommunications Services.......... 1.0%
Money Market Funds................... 0.4%
4
INTERNATIONAL EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
International investing involves increased risk and volatility.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
MANAGEMENT DISCUSSION & ANALYSIS
Q: HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: Over the course of 2005, international equities outperformed domestic
equities. The Fund's return of 12.96% was modestly behind the benchmark.
The Fund's benchmark, the MSCI EAFE, returned 13.54% for the year. The
regions that contributed the most to the Fund's performance were Japan and
continental Europe while the sectors that contributed the most to the
Fund's performance were Industrials and Financials.*
Q: WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund outperformed the benchmark in 4 out of 5 regions. The Fund
underperformed in Australia and a majority of the under performance was
from 2 stocks: Bluescope Steel (-15.8%) and Pacific Brands (-17.5%).
However, the Fund did well in Japan with the best performing stocks for
the year: Sumitomo Metal (+193%), Yamada Denki (+193%), and Ibiden
(+178%). Stock selection was particularly strong in Japanese Industrials
and Materials as well as European Utilities.*
Q: HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: We believe quality stock selection will continue to be the best source of
out performance for the Fund. We believe each stock in the Fund is one of
the best investment opportunities in its sector and that the stocks in the
Fund possess a superior combination of growth and valuation
characteristics versus the benchmark. While we do not make extreme sector
or region allocations relative to the benchmark, we believe areas for the
best return potential for the year will be Information Technology,
Healthcare, Energy and from a regional standpoint Japan.*
5 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
INTERNATIONAL EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Int Equity
<Table>
<Caption>
Int Equity MSCI EAFE
11/7/96 10000 10000
12/96 10170 9871
10680 9717
11911 10978
12633 10900
12/97 11882 10047
13604 11525
13714 11647
11289 9992
12/98 13166 12056
13156 12224
13509 12534
13523 13084
12/99 14325 15307
14099 15291
14819 14685
13661 13500
12/00 13834 13138
12178 11337
12325 11219
10959 9648
12/01 11427 10321
11560 10421
11200 10154
8860 8150
12/02 9303 8676
8564 7963
10177 9498
10837 10269
12/03 12775 12023
13262 12545
13208 12572
13330 12537
12/04 15246 14458
15136 14434
14901 14288
16529 15771
12/31/05 17221 16415
</Table>
This chart assumes an initial hypothetical investment of $10,000 made on
11/7/96. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the Morgan Stanley Europe, Australiasia and Far
East (MSCI EAFE) Index which is an unmanaged market capitalization-weighted
equity index comprising 20 of the 48 countries in the MSCI universe and
representing the developed world outside of North America. Each MSCI country
index is created separately, then aggregated, without change, into regional MSCI
indices. EAFE performance data is calculated in U.S. dollars and in local
currency. The performance of the index does not reflect the deduction of
expenses associated with a mutual fund, such as investment adviser and fund
accounting fees. The Fund's performance reflects the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS(1) (As of December 31, 2005)
ANNUALIZED
INCEPTION TO
ONE YEAR THREE YEARS FIVE YEARS DATE (11/7/96)
- -------- ----------- ---------- --------------
12.96% 22.78% 4.48% 6.12%
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 THE 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.
(1) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
[PIE CHART]
<Table>
Financials 29.6%
Industrials 12.1%
Consumer Discretionary 10.5%
Energy 9.2%
Materials 8.1%
Health Care 7.8%
Telecommunication Services 6.6%
Consumer Staples 5.7%
Information Technology 5.1%
Utilities 4.0%
Short-Term Investment 1.3%
</Table>
6
INVESTMENT GRADE BOND FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Mutual fund investing involves risk, including possible loss of principal. 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 Fund is subject to the risk that principal value reacts in opposition to the
movement of interests rates and that a rising interest rate environment
increases the risk of loss of principal.
MANAGEMENT DISCUSSION & ANALYSIS
Q. HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: For the year ended December 31, 2005, the Fund had a total return of
2.18%, slightly lagging the 2.37% return for the Fund's benchmark index,
Lehman Brothers U.S. Government/Credit Index. The Fund's results in 2005
reflected our overall defensive view of valuation levels for the
non-Treasury sectors of the investment grade fixed income markets. With
incremental yield spreads approaching historically tight levels, we chose
to overweight Treasuries, both to protect the portfolio from the negative
effects of widening spreads and to give us the ability to reinvest in
corporates at more attractive levels. In fact, increasing risk added
little reward for managers in 2005, as the margin between top quartile and
median results was the tightest in five years. Accordingly, the Fund's
returns were consistent with our strategy and close to the benchmark.*
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The most important factors affecting performance was our overweight of
Treasuries which caused the Fund to modestly under-yield the benchmark.
The corresponding underweight in corporate bonds protected the Fund from
modest spread widening. The net result of these two aspects substantially
offset each other, generating index-like returns.*
Q. HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: Our strategy for 2006 will show little change until technical aspects of
the market catch up with fundamentals. Seeing some equilibrium between
supply and demand is the highest priority. Current corporate spreads do
not accurately discount creditworthiness. We are not overly concerned with
the well-being of the companies we invest in but are reluctant to accept
less of a premium for what we deem to be riskier assets. When spreads
correct to better reflect the trade-off between risk and value, we are
prepared to increase credit exposure.*
7 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
INVESTMENT GRADE BOND FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Investment Grade Bond Fund
Lipper Intermediate Investment
Investment Grade Bond Fund Lehman Brothers U.S. Government/Credit Index -Grade Debt ~Funds Average
12/31/95 10000 10000 10000
9798 9766 9807
9830 9812 9841
9963 9985 10028
12/96 10229 10290 10332
10146 10202 10277
10499 10573 10637
10825 10943 10983
12/97 11133 11294 11249
11328 11466 11426
11614 11765 11670
12231 12348 12071
12/98 12178 12364 12095
12101 12217 12033
11953 12083 11890
12050 12148 11947
12/99 11974 12099 11931
12237 12424 12149
12021 12604 12283
12326 12966 12619
12/00 12731 13533 13091
13394 13965 13494
13427 14007 13537
14031 14674 14109
12/01 13901 14683 14078
13756 14614 14047
13979 15162 14427
14684 16027 14970
12/02 14931 16304 15228
15168 16572 15461
15581 17156 15885
15494 17069 15860
12/03 15455 17065 15929
15943 17590 16321
15385 17033 15921
15907 17639 16396
12/04 16098 17780 16562
16016 17661 16469
16521 18269 16904
16335 18093 16804
12/31/05 16449 18202 16873
This chart assumes an initial hypothetical investment of $10,000 made on
12/31/95. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the Lehman Brothers U.S. 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. Total return comprises price
appreciation/depreciation and income as a percentage of the original investment.
Indices are rebalanced monthly by market capitalization. The performance of the
index does not reflect the deduction of expenses associated with a mutual fund,
such as investment adviser and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in its underlying
securities.
The Lipper Mutual Funds Average is an equally weighted average of the mutual
funds within their respective investment objectives, adjusted for the
reinvestment of capital gains distributions and income dividends.
AVERAGE ANNUAL TOTAL RETURNS(1) (As of December 31, 2005)
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- -------- ----------- ---------- ---------
2.18% 3.28% 5.26% 5.10%
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 THE 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.
(1) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
[PIE CHART]
U.S. Treasury Obligations 38.5%
Short-Term Investment 28.3%
U.S. Government Agencies 13.2%
Corporate Bonds 12.6%
Asset Backed Securities 6.4%
Money Market Funds 0.6%
Collateralized Mortgage Obligations 0.4%
8
LARGE CAP RELATIVE VALUE FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
MANAGEMENT DISCUSSION & ANALYSIS
Q: HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: For the year ended December 31, 2005, the Fund had a total return of
9.03%. This compares to the S&P 500/BARRA Value Index return of 6.33%,
4.91% for the S&P 500 Index and 7.05% for the Russell 1000(R) Value Index
for the same period. (The S&P 500/BARRA Value Index became the S&P
500/Citi Value Index in December 2005. Because of changes in the S&P style
indices, the Fund will be giving greater emphasis to the Russell 1000(R)
Value Index in the future.) The Fund's holdings of Energy and Financial
stocks were beneficial to performance, as well as an overweighting in
Technology stocks. The Fund was underweighted in Consumer Discretionary
names, which was a positive, but the stocks that the Fund did own in that
sector performed very well. The market has favored small- and mid-cap
stocks for some time, but in the large-cap category, value stocks have
offered better performance.
Q: WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund benefited from good stock selection, good sector weightings, and
from an overall tilt in the stock market towards value-oriented stocks. In
particular, technology, energy and utility stocks offered the best
performance in the index, and the Fund benefited from its holdings in each
of these sectors. Higher oil and gas prices drove energy share
performance, and a general recovery in industry conditions helped utility
and technology shares. Some utility companies also benefited from having
energy exposure in their portfolio of businesses. The Fund was also
underweighted in consumer discretionary stocks, but had very good
performance in the consumer discretionary stocks that it owned.*
Individual stocks that helped the Fund's performance included Advance Auto
Parts, Burlington Resources, Genworth, Express Scripts, Agilent
Technologies, and Baker Hughes. Stocks that hindered the Fund's
performance included Vodafone, Sara Lee, Boston Scientific, Abbott
Laboratories, and Wal-Mart.*
Q: HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: We will continue to emphasize better quality companies, as well as those
with sustainability of earnings, reasonable valuations, and balance sheet
flexibility. We will search out company-specific catalysts and reduce our
emphasis on macroeconomic catalysts, reducing the pro-cyclical bias in the
portfolio. Large-cap companies are generally undervalued in comparison to
mid- and small-cap ones, so that will also be our focus, as well. A
probable slowdown in real estate activity leads us to de-emphasize
companies that depend on consumer spending. The Fund should remain
fully-invested.*
9 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
LARGE CAP RELATIVE VALUE FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Large Cap Relative Value Fund
Large Cap Relative Value Fund Russell 1000(R)Value Index S&P 500/BARRA Value Index S&P 500 Index
12/31/99 10000 10000 10000 10000
10724 10048 10023 10229
10682 9577 9593 9957
11152 10330 10438 9861
12/00 10932 10701 10608 9090
10157 10075 9916 8013
10720 10567 10353 8481
9490 9409 8675 7237
12/01 10323 10103 9366 8010
10483 10517 9490 8032
9360 9621 8480 6957
7616 7815 6745 5756
12/02 8197 8535 7413 6241
7786 8120 7005 6044
8933 9522 8324 6974
9093 9719 8536 7159
12/03 10369 11098 9770 8030
10668 11434 10096 8166
10861 11535 10177 8306
10778 11713 10283 8151
12/04 11852 12929 11304 8903
12039 12940 11029 8712
12181 13157 11314 8831
12598 13668 11704 9149
12/31/05 12921 13840 12020 9340
This chart assumes an initial hypothetical investment of $10,000 made on
12/31/99. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the S&P 500/BARRA Value Index, the S&P 500 Index
and the Russell 1000(R) Value Index. The S&P 500 Index consists of index of 500
selected common stocks, most of which are listed on the New York Stock Exchange,
and is a measure of the U.S. Stock market as a whole. The S&P 500/BARRA Value
Index consists of approximately half of the S&P 500 Index on a market
capitalization basis. The Russell 1000(R) Value Index is comprised of the 1000
securities found in the Russell universe with a less-than-average growth
orientation. Companies in the Russell index generally have low price-to-book and
price-to-earning ratios, higher dividend yields, and lower forecasted growth
values. The indices are unmanaged and do not reflect the deduction of expenses
associated with a mutual fund, such as investment adviser and fund accounting
fees. The Fund's performance reflects the deduction of fees for those
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS(1) (As of December 31, 2005)
ANNUALIZED
INCEPTION TO DATE
ONE YEAR THREE YEARS FIVE YEARS (12/31/99)
- -------- ----------- ---------- -----------------
9.03% 16.38% 3.40% 4.36%
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 THE 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.
(1) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
Financials 22.6%
Information Technology 13.0%
Health Care 10.8%
Industrials 9.5%
Energy 9.4%
Consumer Staples 9.1%
Consumer Discretionary 8.2%
Short-Term Investment 6.5%
Utilities 3.7%
Telecommunication Services 3.6%
Materials 2.9%
Money Market Funds 0.7%
10
LARGE CAP VALUE EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
MANAGEMENT DISCUSSION & ANALYSIS
Q: HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund returned 3.75% for the year versus 7.05% and 6.33% for the
benchmarks, the Russell 1000(R) Value Index and the S&P 500/ BARRA Value
Index. (The S&P 500/BARRA Value Index became the S&P 500/Citi Value Index
in December 2005. Because of changes in the S&P style indices, the Fund
will be giving greater emphasis to the Russell 1000(R) Value Index in the
future.) The primary reason for underperformance was due to the Fund's
underweighting in Energy and Utilities which were the two best performing
sectors for the year. The year started with oil at $43 per barrel and fed
funds rate at 2.25%. The year finished with oil at $58 per barrel and fed
funds at 4.25%. Gross Domestic Product(1) and profits were strong
throughout the year as well, but counter intuitively bond yields did not
move higher, they actually remained very flat. Against this backdrop the
Fund was underweight in the Energy sector where we felt normalized oil did
not support valuations and underweight in the Utilities sector where we
were concerned about the prospects of higher bond yields and the attendant
valuation problems they usually cause.*
Q: WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund did in fact benefit from some solid stock picks within the Energy
and Utilities sectors as well as other sectors, some of these select
stocks were Bear Stearns, Rockwell Automation, May Dept Stores and Wyeth
to name a few. Additionally the Fund's performance was hurt by such stocks
as Mattel, Leggett & Platt and Kimberly-Clark which suffered heavily from
raw material margin pressure caused by higher energy prices. Also, the
Fund is still experiencing a negative quality bias that started in 2003 as
lower quality stocks continue to outperform their higher quality
counterparts. The Fund has roughly two-thirds of its positions in B+ or
higher rated companies.*
Despite what we believe will likely be a double digit increase in
operating profits for the year the market was only able to squeeze out a
single digit return. The main culprit for the implied multiple erosion is
obviously the restrictive Fed policy. There are however emerging signs
such as the cooling housing market that could suggest the economy may
indeed be slowing which may allow the Fed to stop raising rates possibly
within the first quarter. At this stage it seems the market direction is
inextricably tied to the Fed.
Q: HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: The Fund is underweight in Consumer Discretionary because we are concerned
about potentially significant forces conspiring against the consumer over
the next several months namely, more restrictive mortgage lending and high
gasoline and heating oil. The Fund has established a position in Federated
Dept. Stores where there are ample other positive catalysts, as previously
noted, to pique our interest. The Fund is overweight in Consumer Staples
with positions like Colgate and PepsiCo that exhibit not only strong
financial characteristics but solid fundamentals as well. The Fund is
underweight in Energy but we are reassessing our normalized oil price
forecast in light of ongoing market dynamics and are prepared to add
positions on a significant pullback. Currently the Fund owns integrated
oil companies with significant refining assets such as Marathon Oil. We
feel that the refining space has more upside given the very tight capacity
outlook for the industry. The Fund is overweight in Materials but has been
trimming back some positions as they rally off their third quarter lows.
We prefer stocks such as DuPont that have huge free cash flows, some
pricing power and tremendous balance sheet flexibility to raise dividends
and buyback stock. The Fund is underweight in Financials were we have sold
most of the insurance stocks due to price appreciation but hold
significant positions in large banks like Bank of America that sport hefty
dividends and trade at roughly ten times next years earnings. The Fund is
overweight in Industrials while maintaining an equal weight in Technology.
Industrials we prefer exhibit strong balance sheets and good operating
leverage like Honeywell. The Fund is slightly overweight Healthcare. The
pharmaceutical companies were attractive from a valuation standpoint for
quite some time but we are now more constructive and are adding more
exposure to the sector. The Fund is equal weight in Telecommunications and
underweight in Utilities but will look for utility stock opportunities on
price pullbacks. Given our ongoing reassessment of normalized oil and gas
we would like to be more involved with companies that have good exposure
to cheap sources of merchant generation if valuations make sense. We
believe profit growth will continue to slow but stay positive. In this low
growth environment higher quality companies with well defined dividend
policies should do well since dividend yield will become a more important
source of total return. Also the valuation case for high quality stocks is
quite compelling and has historically performed well when the profit cycle
is decelerating like that of today's market. These are the very stocks
that are well represented in the Fund.*
11 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
LARGE CAP VALUE EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Large Cap Value Equity Fund
Large Cap Value Equity Fund Lipper Equity Income Funds Average S&P 500/BARRA Value Index Russell 1000(R)Value Index
12/31/95 10000 10000 10000 10000
10498 10393 10639 10566
10869 10693 10857 10748
11210 10925 11144 11061
12/96 11864 11716 12199 12164
12219 11905 12414 12476
13739 13349 14211 14315
14969 14323 15513 15741
12/97 15046 14846 15857 16444
16811 16258 17689 18361
16182 16113 17781 18443
14599 14815 15485 16307
12/98 16504 16709 18184 19014
16290 16585 18702 19286
18648 18178 20722 21461
16428 16718 18810 19359
12/99 16009 17407 20498 20411
15388 17475 20546 20508
14975 17246 19663 19547
15947 18517 21396 21085
12/00 17679 19185 21745 21843
16876 18190 20325 20564
17865 18858 21221 21568
16100 17171 17782 19206
12/01 17479 18245 19199 20622
18230 18846 19453 21466
16639 17138 17382 19637
13111 14271 13826 15951
12/02 14510 15370 15195 17421
13452 14608 14358 16573
15443 16906 17063 19436
15864 17221 17497 19838
12/03 17865 19428 20026 22652
18417 19864 20696 23339
18846 20054 20860 23544
18960 20133 21077 23907
12/04 20597 21970 23171 26389
20608 21935 22608 26412
20455 22206 23192 26854
20850 23018 23990 27897
12/31/05 21369 23301 24638 28250
This chart assumes an initial hypothetical investment of $10,000 made on
12/31/95. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the S&P 500/BARRA Value Index and the Russell
1000(R) Value Index. The S&P 500/BARRA Value Index is a market
capitalization-weighted index of the stocks in the Standard & Poor's 500 Index
having the lowest price to book ratios. The BARRA Value index consists of
approximately half of the S&P 500 Index on a market capitalization basis. The
Russell 1000(R) Value is comprised of the 1000 securities found in the Russell
universe with a less-than-average growth orientation. Companies in this index
generally have low price-to-book and price-to-earning ratios, higher dividend
yields, and lower forecasted growth values. The indices are unmanaged and do not
reflect the deduction of expenses associated with a mutual fund, such as
investment adviser and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
The Lipper Mutual Funds Average is an equally weighted average of the mutual
funds within their respective investment objectives, adjusted for the
reinvestment of capital gains distributions and income dividends.
AVERAGE ANNUAL TOTAL RETURNS (2) (As of December 31, 2005)
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- -------- ----------- ---------- ---------
3.75% 13.77% 3.86% 7.89%
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 THE 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.
(1) The Gross Domestic Product is the monetary value of all the finished goods
and services produced within a country's borders in a specific time period. It
includes all of private and public consumption, government outlays, investments
and exports less imports that occur within a defined territory.
(2) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
Financials 24.0%
Industrials 15.8%
Energy 8.7%
Health Care 8.5%
Materials 8.3%
Consumer Staples 7.4%
Consumer Discretionary 7.1%
Short-Term Investment 6.0%
Utilities 5.0%
Telecommunication Services 4.7%
Information Technology 4.4%
Money Market Funds 0.1%
</Table>
12
MID-CAP EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Mid capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
MANAGEMENT DISCUSSION & ANALYSIS
Q: HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: Over the course of 2005, mid cap stocks were the best performing major
equity asset class. The Fund's benchmark, the Russell Midcap(R) Index
returned 12.65% for the year. The Fund returned 14.32%, outpacing the
benchmark by 167 basis points (1.67%). The majority of the Fund's out
performance was due to stock selection; many of the stocks the owned by
the Fund outperformed the stocks in our benchmark's portfolio. The sectors
in the Fund's portfolio which benefited the most from stock selection were
Energy, Financials, and Healthcare.*
Q: WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund's outperformance was driven almost entirely by stock selection.
The Fund's returns in seven out of its ten sectors were superior to the
returns of the benchmark. The sectors with the most dramatic differences
were Energy, Healthcare, and Materials.*
Q: HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: We believe superior stock selection shall provide the Fund with the best
source for continued outperformance. We believe each stock in the Fund is
one of the best investment opportunities in its sector and that the stocks
in the Fund possess a superior combination of growth and valuation
characteristics versus the benchmark. While we do not make extreme sector
allocations relative to the benchmark, we believe the sectors that offer
the best return potential for the year are Information Technology,
Healthcare, and Energy.*
13 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
MID-CAP EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Mid-Cap Equity Fund
Mid-Cap Equity Fund Russell Midcap(R)Index
12/31/95 10000 10000
10430 10602
10630 10901
10958 11242
12/96 11605 11900
11260 11802
12554 13403
14378 15183
12/97 14185 15352
15505 17010
15190 16754
12219 14270
12/98 15201 16901
14696 16822
16143 18648
14467 17046
12/99 17328 19983
19278 21998
19096 21005
19387 22436
12/00 16820 21631
14721 19361
17389 21207
13944 17419
12/01 17278 20415
16171 21282
14162 19250
12222 15855
12/02 12362 17111
11863 16706
13578 19757
14157 21028
12/03 16036 23965
16607 25198
16606 25563
16605 25348
12/04 18733 28810
18973 28737
19924 29938
21102 31711
12/31/05 21416 32455
This chart assumes an initial hypothetical investment of $10,000 made on
12/31/95. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the Russell Midcap(R) Index a capitalization
weighted index that tracks the performance of the smallest 800 securities as
ranked by total market capitalization, in the medium-sized securities universe.
The performance of the index does not reflect the deduction of expenses
associated with a mutual fund, such as investment adviser and fund accounting
fees. The Fund's performance reflects the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities.
AVERAGE ANNUAL TOTAL RETURNS (1) (As of December 31, 2005)
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- -------- ----------- ---------- ---------
14.32% 20.10% 4.95% 7.91%
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 THE 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.
(1) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
[PIE CHART]
<Table>
Financials 20.2%
Information Technology 15.0%
Consumer Discretionary 14.9%
Health Care 11.6%
Industrials 10.1%
Energy 8.0%
Short-Term Investment 5.7%
Utilities 5.4%
Consumer Staples 4.2%
Materials 4.1%
REITS 0.5%
Money Market Funds 0.3%
</Table>
14
SMALL CAP VALUE EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
INVESTMENT CONCERNS
Small capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure.
Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes.
Value-based investments are subject to the risk that the broad market may not
recognize their intrinsic value.
MANAGEMENT DISCUSSION & ANALYSIS
Q. HOW DID THE FUND PERFORM AGAINST ITS BENCHMARK FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The Fund continued its outperformance versus the Russell 2000(R) Value
Index by returning 11.90% compared to 4.71% return for the the index for
the 12 month period ending December 31, 2005. The Fund also managed to
outpace the 6.14% return for the Lipper Small Cap Value Average over the
same time period.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE FOR THE PERIOD ENDED
DECEMBER 31, 2005?
A: The outperformance of the Fund was due to superior stock selection in the
Industrials, Information Technology, Materials and Consumer Discretionary
sectors. In the Industrials sector, the Fund's investment in GOL Linhas
Aereas (GOL), a low cost, low fares airline operating in Brazil and LSI
Industries (LYTS), a provider of image solutions, coupled with an
overweight weighting aided in besting the Index. Within the Information
Technology sector, Harris Corp. (HRS), an international communication
company equipment company, and Fair Isaac (FIC), a company that provides
services to companies in automate and improving decision making
contributed to the excess return versus the Index. In review of the
Materials sector, the Fund benefited from the investment in Airgas Inc.
(ARG), a distributor of industrial, medical and specialty gases and
Allegheny Technologies (ATI), a provider of specialized industrial
products. In the Consumer Discretionary sector, the Fund profited from the
investment in Makita Corp. (MKTAY), a manufacturer and retailer of power
tools for the professional user worldwide and United Auto Group (UAG), a
large automotive retailer. The Fund also received positive benefit for its
underweight of Financials and overweight of the Materials sector.*
Q. HOW DO YOU PLAN TO POSITION THE FUND, BASED ON MARKET CONDITIONS?
A: The Fund continues to utilize its bottom-up approach to stock selection.
This approach seeks dividend paying stocks that are trading at the lower
end of historical trading ranges, display characteristics of financial
strength and possess an identifiable catalyst that will assist in
realizing true value. The Fund does not make active sector allocations but
allows the process to define sector weights. The Fund will rely on the
process for direction when making alterations to sector positions. The
Fund continues to be cautious on valuations in the small cap value equity
arena. Large inflows of capital by non-traditional small cap value
investors are skewing valuations to the upside for most securities in the
universe. This phenomenon has in turn caused lower quality names to
increase in price, therefore making stock selection critical for
outperformance. These non-traditional investors may also place undue
downside pressure on valuations when they decide to exit the small cap
realm. The Fund also recognizes the impact of higher interest rates on
security valuation. In our opnion, if the shift to a higher interest rate
environment continues, revaluation of equities should occur. The Fund
remains very cognizant of the effects of high commodity prices on company
feedstock and input costs. These effects could have negative impact on
operating margins, which could cause revaluation of securities. Those
equities with the highest valuations should see the most erosion in terms
of price.
15 PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
SMALL CAP VALUE EQUITY FUND
STI CLASSIC VARIABLE TRUST December 31, 2005
GROWTH OF $10,000 INVESTMENT (As of December 31, 2005)
Small Cap Value Equity Fund
Small Cap Value Equity Fund Russell 2000(R)Value Index
10/21/97 10000 10000
12/97 9795 10452
10683 11325
9791 10916
7738 8965
12/98 8602 9778
7447 8830
8888 10292
8113 9487
12/99 8191 9632
7826 10001
8232 10196
8758 10944
12/00 9531 11831
10059 11946
11071 13336
10081 11558
12/01 11578 13490
12774 14782
12571 14469
11004 11389
12/02 11440 11949
10748 11342
12580 13919
13606 14995
12/03 15837 17449
16740 18656
17324 18814
17332 18842
12/04 19667 21330
19299 20482
19523 21521
21291 22187
12/31/05 22008 22335
This chart assumes an initial hypothetical investment of $10,000 made on
10/21/97. Total return is based on net change in N.A.V. (net asset value)
assuming reinvestment of distributions. Returns shown on this page include
reinvestment of all dividends and other distributions.
The Fund is measured against the Russell 2000(R) Value Index, an unmanaged index
which is is comprised of the securities in the Russell 2000(R) Index with a
less-than-average growth orientation. Companies in the Russell index generally
have low price-to-book and price-to-earnings ratios. The performance of the
index does not reflect the deduction of expenses associated with a mutual fund,
such as investment adviser and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in its underlying
securities.
AVERAGE ANNUAL TOTAL RETURNS (1) (As of December 31, 2005)
ANNUALIZED
INCEPTION TO DATE
ONE YEAR THREE YEARS FIVE YEARS (10/21/97)
- -------- ----------- ---------- -----------------
11.90% 24.37% 18.22% 10.10%
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 THE 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.
(1) Earnings from a variable annuity investment compound tax-free until
withdrawal, so no adjustments were made for income taxes.
During the period shown, the Investment Adviser waived and/or voluntarily
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
*Portfolio composition is subject to change.
PORTFOLIO INVESTMENTS (as a percentage of total investments)*
[PIE CHART]
<Table>
Industrials 26.2%
Consumer Discretionary 16.9%
Financials 16.3%
Materials 10.8%
Information Technology 9.6%
Short-Term Investment 6.7%
Health Care 4.2%
Consumer Staples 3.5%
Energy 3.1%
Money Market Funds 1.5%
Utilities 1.2%
</Table>
16
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
CAPITAL APPRECIATION FUND
Shares or
Principal
Amount($) Value($)
--------- --------
COMMON STOCKS (99.6%)
CONSUMER DISCRETIONARY (15.1%)
Advance Auto Parts, Inc. * 11,000 478
Bed Bath & Beyond, Inc. * 16,100 582
Harley-Davidson, Inc. (b) 15,900 819
Home Depot, Inc. (The) 16,600 672
Kohl's Corp. * 6,800 330
Lowe's Cos., Inc. 11,000 733
Marriott International, Inc., Cl A 5,300 355
NIKE, Inc., Cl B (b) 5,500 477
Omnicom Group, Inc. 10,000 851
Time Warner, Inc 47,600 830
Univision Communications, Inc., Cl A * 15,500 456
Walt Disney Co. (The) 17,800 427
-------
7,010
-------
CONSUMER STAPLES (4.6%)
Colgate-Palmolive Co. 7,400 406
Estee Lauder Cos., Inc. (The), Cl A 10,800 362
Wal-Mart Stores, Inc. 18,800 880
Walgreen Co. 10,400 460
-------
2,108
-------
ENERGY (3.8%)
Anadarko Petroleum Corp. 5,300 502
Exxon Mobil Corp. 22,600 1,270
-------
1,772
-------
FINANCIALS (15.8%)
American Express Co. 20,500 1,055
Chubb Corp. (The) 13,400 1,309
Goldman Sachs Group, Inc. (The) 4,300 549
JPMorgan Chase & Co. 27,600 1,095
MGIC Investment Corp. 16,000 1,053
SLM Corp. (b) 12,700 700
Washington Mutual, Inc. 17,300 753
Wells Fargo & Co. 12,500 785
-------
7,299
-------
HEALTH CARE (11.7%)
Amgen, Inc. * 9,300 733
Baxter International, Inc. 33,400 1,258
Becton, Dickinson & Co. 16,200 973
Health Management
Associates, Inc., Cl A 24,800 545
Johnson & Johnson 7,900 475
Quest Diagnostics, Inc. (b) 9,400 484
Schering-Plough Corp. 32,700 682
Tenet Healthcare Corp. * 37,900 290
-------
5,440
-------
INDUSTRIALS (20.0%)
3M Co. 6,000 465
Cintas Corp. 8,800 362
Danaher Corp. 14,400 803
Emerson Electric Co. 10,900 814
Fastenal Co. (b) 18,000 705
General Electric Co. 33,400 1,172
Honeywell International, Inc. 28,100 1,047
Illinois Tool Works, Inc. 5,600 493
Lockheed Martin Corp. 7,800 496
Raytheon Co. 27,700 1,112
Southwest Airlines Co. 28,800 473
Union Pacific Corp. 7,700 620
United Parcel Service, Inc., Cl B 9,100 684
-------
9,246
-------
INFORMATION TECHNOLOGY (26.4%)
Affiliated Computer
Services, Inc., Cl A * (b) 10,800 639
Amdocs Ltd. * 14,800 407
Automatic Data Processing, Inc. 20,500 941
CDW Corp. 5,800 334
CheckFree Corp. * (b) 29,700 1,362
Cisco Systems, Inc. * 24,800 425
Electronic Data Systems Corp. 16,000 385
EMC Corp. * 30,000 409
First Data Corp. 10,500 452
LSI Logic Corp. * 45,600 365
Maxim Integrated Products, Inc. 19,500 707
Microsoft Corp. 55,200 1,442
NCR Corp. * 12,000 407
Nokia Corp. ADR (b) 59,000 1,079
Oracle Corp. * 62,000 757
Paychex, Inc. 26,800 1,021
Texas Instruments, Inc. 13,300 427
VeriSign, Inc. * 30,500 669
-------
12,228
-------
MATERIALS (1.1%)
Rohm & Haas Co. 10,700 518
-------
TELECOMMUNICATION SERVICES (1.1%)
AT&T, Inc. 20,300 497
-------
Total Common Stocks (Cost $41,822) 46,118
-------
SHORT-TERM INVESTMENT (13.2%)
CSFB Enhanced Liquidity
Portfolio (c) 6,101,901 6,102
-------
Total Short-Term Investment
(Cost $6,102) 6,102
-------
17 See Notes to Financial Statements
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
CAPITAL APPRECIATION FUND-CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
MONEY MARKET FUNDS (0.4%)
Federated Prime Value
Obligations Fund, Cl I 186,099 186
-------
Total Money Market Funds
(Cost $186) 186
-------
Total Investments
(Cost $48,110) (a)--113.2% 52,406
-------
Liabilities in excess of
other assets--(13.2)% (6,099)
-------
Net Assets--100.0% $46,307
=======
*Non-income producing security.
(a) Cost for federal income tax purposes is $48,124 (amount in
thousands).Unrealized appreciation/ (depreciation) on a tax basis is as
follows (amounts in thousands):
Unrealized Appreciation $ 5,512
Unrealized Depreciation (1,230)
-------
Unrealized Appreciation (Depreciation) $ 4,282
=======
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $5,899.
(c) This security was purchased with cash collateral held from securities
lending.
ADR - American Depository Receipt.
Cl - Class.
See Notes to Financial Statements. 18
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
INTERNATIONAL EQUITY FUND
Shares or
Principal
Amount($) Value($)
--------- --------
FOREIGN COMMON STOCKS (96.6%)
AUSTRALIA (3.8%)
Australia & New Zealand
Banking Group Ltd. 1,801 31
BlueScope Steel Ltd. 3,340 17
Downer EDI Ltd. 2,400 13
Investa Property Group 7,325 11
Promina Group Ltd. 6,481 23
Qantas Airways Ltd. 6,435 19
Rio Tinto Group Ltd. 614 31
St. George Bank Ltd. 1,315 29
Westpac Banking Corp. 1,818 30
---
204
---
BELGIUM (0.5%)
Fortis 200 6
Fortis SA 611 20
---
26
---
DENMARK (0.8%)
Danske Bank A/S 882 32
TDC A/S 225 13
---
45
---
FINLAND (1.7%)
Fortum Corp. 1,240 23
Nokia Corp., Cl A 2,955 54
Tietoenator Oyj 360 13
---
90
---
FRANCE (10.3%)
Atos Origin SA * 269 18
AXA 1,610 52
BNP Paribas 755 60
Bouygues SA 304 15
Compagnie de Saint-Gobain 365 22
France Telecom SA 1,490 37
Lafarge SA 352 32
Pernod Ricard 108 19
PSA Peugeot Citroen SA 228 13
Sanofi-Aventis 407 36
Schneider Electric SA 283 25
Societe Generale 363 45
SUEZ SA 1,136 35
TOTAL SA 228 57
VINCI SA 403 35
Vivendi Universal SA 1,513 47
---
548
---
GERMANY (7.3%)
Adidas-Salomon AG 154 29
Allianz AG 315 48
BASF AG 572 44
Bayer AG 242 10
Continental AG 351 31
DaimlerChrysler AG 300 15
Deutsche Bank AG 280 27
GERMANY-CONTINUED
Deutsche Post AG 444 11
Deutsche Telekom AG 1,473 25
E.ON AG 489 50
MAN AG 524 28
METRO AG 179 9
SAP AG 116 21
Schering AG 440 29
Siemens AG 115 10
---
387
---
HONG KONG (2.2%)
Cheung Kong (Holdings) Ltd. 2,700 27
China Mobile Ltd. 4,000 19
China Resources Power
Holdings Co. Ltd. 12,000 7
CNOOC Ltd. 21,800 15
Hutchison Whampoa Ltd. 3,107 29
Prosperity REIT * (b) 84 0
Wing Hang Bank Ltd. 3,000 22
---
119
---
IRELAND (0.6%)
CRH PLC 1,106 33
---
ITALY (2.0%)
Banca Intesa SpA 6,269 33
Eni SpA 1,818 50
Mediaset SpA 522 6
UniCredito Italiano SpA 2,135 15
---
104
---
JAPAN (25.7%)
AEON Co. Ltd. 800 20
Aisin Seiki Co. Ltd. 400 15
Amano Corp. 600 11
Astellas Pharma, Inc. 500 20
Canon, Inc. 500 29
Central Japan Railway Co. 2 19
Daicel Chemical Industries Ltd. 5,000 36
Daiichi Sankyo Co. Ltd. * 400 8
Daiwa Securities Group, Inc. 3,000 34
East Japan Railway Co. 3 21
Electric Power Development
Co. Ltd. 600 21
FANCL Corp. 300 16
FANUC Ltd. 200 17
Fujikura Ltd. 3,000 24
Fujitsu Ltd. 3,000 23
Hitachi Chemical Co. Ltd. 500 13
Honda Motor Co. Ltd. 402 23
Ibiden Co. Ltd. 200 11
ITOCHU Corp. 1,000 8
Japan Tobacco, Inc. 1 15
KDDI Corp. 3 17
Keisei Electric Railway Co. Ltd. 1,000 7
See Notes to Financial Statements.
19
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
INTERNATIONAL EQUITY FUND-CONTINUED
Shares or
Principal
Amount($) Value($)
---------- --------
JAPAN-CONTINUED
Komatsu Ltd. 2,000 33
Kubota Corp. 3,000 25
Makita Corp. 400 10
Matsushita Electric Industrial
Co. Ltd. 2,000 39
Mazda Motor Corp. 4,000 18
Mitsubishi Corp. 1,600 35
Mitsubishi Electric Corp. 4,000 28
Mitsubishi Tokyo Financial
Group, Inc. 4 54
Mitsui Fudosan Co. Ltd. 1,000 20
Mitsui O.S.K. Lines Ltd. 3,000 26
Mitsui Sumitomo Insurance Co. Ltd. 2,000 24
Mitsui Trust Holdings, Inc. 2,000 24
Mizuho Financial Group, Inc. 7 56
Morinaga & Co. Ltd. 4,000 12
Namco Bandai Holdings, Inc.* 600 9
Nidec Corp. 100 9
Nikko Cordial Corp. 1,100 17
Nippon Steel Corp. 4,000 14
Nippon Telegraph &
Telephone Corp. 5 23
NSK Ltd. 3,000 21
Okinawa Electric Power
Co., Inc. (The) 300 17
ORIX Corp. 100 25
Ricoh Co. Ltd. 1,000 18
Ryohin Keikaku Co. Ltd. 200 17
Sankyo Co. Ltd. 300 17
Sanyo Shinpan Finance Co. Ltd. 260 19
Sega Sammy Holdings, Inc. 600 20
Shin-Etsu Chemical Co. Ltd. 400 21
Sompo Japan Insurance, Inc. 1,000 14
Sumitomo Corp. 2,000 26
Sumitomo Electric Industries Ltd. 700 11
Sumitomo Metal Industries Ltd. 6,000 23
Sumitomo Mitsui Financial
Group, Inc. 3 32
Takeda Pharmaceutical Co. Ltd. 700 38
Tokyo Ohka Kogyo Co. Ltd. 600 17
Toyoda Machine Works Ltd. (c) 1,000 14
Toyota Motor Corp. 1,613 84
Trans Cosmos, Inc. 100 8
Tsubakimoto Chain Co. 1,000 7
Yamada Denki Co. Ltd. 100 13
Yamaha Motor Co. Ltd. 400 10
Yamatake Corp. 300 7
-----
1,363
-----
NETHERLANDS (3.8%)
ABN AMRO Holding NV 1,659 43
Akzo Nobel NV 548 25
NETHERLANDS-CONTINUED
ING Groep NV 1,543 54
Royal KPN NV 3,177 32
Royal Philips Electronics NV 1,574 49
-----
203
-----
NEW ZEALAND (0.7%)
Fletcher Building Ltd. 4,927 26
Warehouse Group Ltd. (The) 4,300 10
-----
36
-----
NORWAY (1.9%)
DNB NOR ASA 700 7
Norsk Hydro ASA 130 13
Orkla ASA 890 38
Statoil ASA 1,020 23
Telenor ASA 2,050 20
-----
101
-----
PORTUGAL (0.3%)
Energias de Portugal SA 5,629 17
-----
SINGAPORE (1.0%)
Jurong Technologies Industrial
Corp. Ltd. 11,000 12
SembCorp Industries Ltd. 9,000 15
United Overseas Bank Ltd. 3,000 26
-----
53
-----
SPAIN (2.5%)
Banco Santander Central
Hispano SA 3,635 48
Endesa SA 313 8
Repsol YPF SA 1,334 39
Telefonica SA 1,864 28
Union Fenosa SA 297 11
-----
134
-----
SWEDEN (2.5%)
Autoliv, Inc. 261 12
Nordea Bank AB 2,310 24
Sandvik AB 383 18
Svenska Handelsbanken AB, Cl A 780 19
Telefonaktiebolaget LM Ericsson 12,220 42
Volvo AB, Cl B 350 17
-----
132
-----
SWITZERLAND (6.3%)
Credit Suisse Group 1,065 54
Nestle SA 244 73
Novartis AG 1,478 78
Roche Holding Ltd. 306 46
UBS AG 453 43
Zurich Financial Services 202 43
-----
337
-----
UNITED KINGDOM (22.7%)
Alliance UniChem PLC 1,516 21
Anglo American PLC 1,088 37
See Notes to Financial Statements.
20
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
INTERNATIONAL EQUITY FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
UNITED KINGDOM-CONTINUED
Anglo Irish Bank Corp. PLC 1,570 24
AstraZeneca PLC 1,453 71
Aviva PLC 2,867 35
AWG PLC 1,243 23
Balfour Beatty PLC 3,381 21
BHP Billiton PLC 2,740 45
BP PLC 11,340 120
Bradford & Bingley PLC 2,924 21
British Airways PLC * 5,434 31
British American Tobacco PLC 1,977 44
British Energy Group PLC * 3,600 32
BT Group PLC 5,397 21
CRH PLC (b) 9 0
First Choice Holidays PLC 8,044 35
George Wimpey PLC 2,169 18
GlaxoSmithKline PLC 2,422 61
HBOS PLC 3,456 59
HSBC Holdings PLC 6,314 101
Old Mutual PLC 6,134 17
Pilkington PLC 2,723 7
Royal & Sun Alliance Insurance
Group PLC 8,200 18
Royal Bank of Scotland
Group PLC (The) 2,655 80
Royal Dutch Shell PLC, Cl A 2,919 89
Royal Dutch Shell PLC, Cl B 802 26
SABMiller PLC 897 16
Tesco PLC 5,491 31
Vodafone Group PLC 41,973 91
WH Smith PLC 1,600 12
-------
1,207
-------
Total Foreign Common Stocks
(Cost $3,642) 5,139
-------
SHORT-TERM INVESTMENTS (1.3%)
Brown Brothers Harriman & Co.,
Cayman Islands Cash Sweep 66,938 67
-------
Total Short-Term Investments (Cost $67) 67
-------
Total Investments (Cost $3,709) (a)--97.9% 5,206
-------
Other assets in excess of liabilities--2.1% 114
-------
Net Assets--100.0% $ 5,320
=======
*Non-income producing security.
(a) Cost for federal income tax purposes is $3,836 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 1,377
Unrealized Depreciation (7)
-------
Unrealized Appreciation (Depreciation) $ 1,370
=======
(b) Market value is less than one thousand dollars.
(c) Fair Valued at December 31, 2005 according to procedures approved by the
Board of Trustees.
C1 - Class.
REIT - Real Estate Investment Trust.
The investment concentrations for the International Equity Fund as a percentage
of net assets, by industry, as of December 31, 2005, were as follows
(unaudited):
Consumer Discretionary 10.3%
Consumer Staples 5.6
Energy 9.0
Financials 29.0
Health Care 7.6
Industrials 11.8
Information Technology 5.0
Materials 7.9
Short-Term Investments 1.3
Telecommunication Services 6.5
Utilities 3.9
See Notes to Financial Statements.
21
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
INVESTMENT GRADE BOND FUND
Shares or
Principal
Amount($) Value($)
--------- --------
ASSET BACKED SECURITIES (8.9%)
AUTOMOBILE ABS (5.2%)
Americredit Automobile Receivables
Trust, Ser 2002-D, Cl A4,
3.400%, 04/13/09 200 198
Daimler Chrysler Auto Trust, Ser 2004-B,
Cl A3, 3.180%, 09/08/08 250 248
Onyx Acceptance Auto Trust, Ser 2003-D,
Cl A4, 3.200%, 03/15/10 250 246
-----
692
-----
CREDIT CARD ABS (3.7%)
American Express Credit Account
Master Trust, Ser 2002-3, Cl A, 5.530%,
10/15/08 250 250
Fleet Credit Card Master Trust II, Ser
2003, Cl A, 2.400%, 07/15/08 250 250
-----
500
-----
Total Asset Backed Securities (Cost $1,195) 1,192
-----
COLLATERALIZED MORTGAGE OBLIGATIONS (0.6%)
Citigroup/Deutsche Bank Commercial
Mortgage Trust, Ser 2005-CD1, Cl A4,
5.225%, 07/15/44 (e) 75 76
-----
Total Collateralized Mortgage
Obligations (Cost $76) 76
-----
CORPORATE BONDS (17.4%)
AEROSPACE/DEFENSE (0.5%)
United Technologies Corp.,
4.875%, 05/01/15 65 64
-----
AIRLINES (0.2%)
Southwest Airlines Co.,
5.125%, 03/01/17 35 33
-----
BANKS (0.7%)
Bank of America Corp.,
7.400%, 01/15/11 80 88
-----
COMMERCIAL SERVICES (0.2%)
ERAC USA Finance Co.,
5.600%, 05/01/15 (d) 30 30
-----
DIVERSIFIED FINANCIAL SERVICES (5.6%)
CIT Group, Inc., 5.125%, 09/30/14 65 64
Citigroup, Inc., 5.125%, 05/05/14 20 20
Citigroup, Inc., 5.850%, 12/11/34 35 36
Fund American Cos., Inc.,
5.875%, 05/15/13 85 86
Goldman Sachs Group, Inc. (The),
4.750%, 07/15/13 90 87
HSBC Holdings PLC,
7.625%, 05/17/32 35 44
DIVERSIFIED FINANCIAL SERVICES-CONTINUED
John Deere Capital Corp.,
3.900%, 01/15/08 15 15
JPMorgan Chase & Co.,
6.625%, 03/15/12 100 108
Lazard Group LLC,
7.125%, 05/15/15 165 173
Morgan Stanley, 5.300%, 03/01/13 115 115
-----
748
-----
ELECTRIC (1.2%)
Exelon Corp., 5.625%, 06/15/35 100 95
Pacific Gas & Electric Co.,
6.050%, 03/01/34 65 67
-----
162
-----
ENTERTAINMENT (0.2%)
GTECH Holdings Corp.,
4.750%, 10/15/10 30 27
-----
FOOD (1.1%)
Woolworths Ltd.,
5.550%, 11/15/15 (d) 145 147
-----
INSURANCE (0.1%)
Metlife, Inc., 5.700%, 06/15/35 15 15
-----
INVESTMENT COMPANIES (0.2%)
Credit Suisse First Boston USA, Inc.,
6.500%, 01/15/12 30 32
-----
MEDIA (1.0%)
Cox Communications, Inc.,
4.625%, 06/01/13 35 33
News America Holdings, Inc.,
9.250%, 02/01/13 30 36
News America Holdings, Inc.,
6.200%, 12/15/34 20 20
Time Warner, Inc., 7.625%, 04/15/31 35 39
-----
128
-----
MINING (0.6%)
Alcan, Inc., 5.750%, 06/01/35 30 29
Codelco, Inc., 5.500%, 10/15/13 (d) 45 46
-----
75
-----
MISCELLANEOUS MANUFACTURER (1.2%)
General Electric Co.,
5.000%, 02/01/13 165 165
-----
OIL & GAS (1.0%)
Devon Financing Corp. ULC,
7.875%, 09/30/31 45 58
Enterprise Products Operating LP, Ser B,
6.875%, 03/01/33 30 32
See Notes to Financial Statements.
22
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
INVESTMENT GRADE BOND FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
OIL & GAS-CONTINUED
Motiva Enterprises LLC,
5.200%, 09/15/12 (d) 15 15
Valero Energy Corp.,
7.500%, 04/15/32 30 36
--------
141
--------
PIPELINES (1.0%)
Centerpoint Energy Resources Corp.,
Ser B, 7.875%, 04/01/13 50 57
K N Capital Trust III,
7.630%, 04/15/28 55 61
Kinder Morgan, Inc.,
7.250%, 03/01/28 15 17
--------
135
--------
REITS (0.1%)
Simon Property Group LP,
6.375%, 11/15/07 15 15
--------
RETAIL (0.1%)
Federated Department Stores, Inc.,
6.900%, 04/01/29 15 16
--------
TELECOMMUNICATIONS (2.2%)
Bellsouth Corp., 6.550%, 06/15/34 55 59
SBC Communications, Inc.,
6.450%, 06/15/34 80 83
Telecom Italia Capital SA,
5.250%, 10/01/15 80 78
Verizon Global Funding Corp.,
7.750%, 12/01/30 60 71
--------
291
--------
TRANSPORTATION (0.2%)
BNSF Funding Trust 1, 6.613%, 12/15/55,
Callable 01/15/26 @ 100 25 26
--------
Total Corporate Bonds (Cost $2,328) 2,338
--------
U.S. GOVERNMENT AGENCIES (18.3%)
FANNIE MAE (5.9%)
4.500%, 10/15/08 800 796
--------
FREDDIE MAC (12.4%)
3.625%, 02/15/08 1,700 1,662
--------
Total U.S. Government Agencies
(Cost $2,459) 2,458
--------
U.S. TREASURY OBLIGATIONS (53.4%)
U.S. TREASURY BONDS (10.3%)
6.250%, 08/15/23 (b) 605 722
6.125%, 11/15/27 240 290
5.375%, 02/15/31 (b) 335 376
--------
1,388
--------
U.S. TREASURY INFLATION PROTECTED NOTES/BONDS (5.3%)
1.625%, 01/15/15 710 714
--------
U.S. TREASURY NOTES (37.8%)
1.875%, 01/31/06 145 145
4.250%, 11/30/07 (b) 1,090 1,087
4.375%, 11/15/08 55 55
3.125%, 04/15/09 (b) 125 120
6.000%, 08/15/09 (b) 835 880
4.250%, 10/15/10 (b) 830 826
4.500%, 11/15/10 (b) 815 819
4.250%, 08/15/13 (b) 870 862
4.500%, 11/15/15 (b) 280 282
--------
5,076
--------
Total U.S. Treasury Obligations
(Cost $7,172) 7,178
--------
SHORT-TERM INVESTMENTS (39.2%)
CSFB Enhanced
Liquidity Portfolio (c) 5,269,823 5,270
--------
Total Short-Term Investments (Cost $5,270) 5,270
--------
MONEY MARKET FUNDS (0.8%)
Federated Prime Value Money
Market Fund 104,082 104
--------
Total Money Market Funds (Cost $104) 104
--------
Total Investments
(Cost $18,604) (a)--138.6% 18,616
--------
Liabilities in excess of other
assets--(38.6)% (5,186)
--------
Net Assets--100.0% $ 13,430
========
(a) Cost for federal income tax purposes is $18,622 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 74
Unrealized Depreciation (80)
-----
Unrealized Appreciation (Depreciation) $ (6)
=====
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $5,096.
(c) This security was purchased with cash collateral held from securities
lending.
(d) Rule 144A, Section 4(2) or other security which is restricted as to resale
to institutional investors. The Fund's advisor has deemed this security to
be liquid based upon procedures approved by the Board of Trustees.
(e) Variable rate security. Rate presented represents rate in effect at
December 31, 2005. Maturity date represents actual maturity date.
C1 - Class.
LLC - Limited Liability Company.
LP - Limited Partnership.
REIT - Real Estate Investment Trust.
Ser - Series.
See Notes to Financial Statements.
23
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
LARGE CAP RELATIVE VALUE FUND
Shares or
Principal
Amount($) Value($)
--------- --------
COMMON STOCKS (99.6%)
CONSUMER DISCRETIONARY (8.7%)
Advance Auto Parts, Inc. * 5,000 217
Gannett Co., Inc. 1,000 61
Kohl's Corp. * 1,000 49
Lowe's Cos., Inc. 2,500 167
Meredith Corp. 2,000 105
Target Corp. 1,500 82
Viacom, Inc., Cl B (b) 7,000 227
Walt Disney Co. (The) 6,000 144
-----
1,052
-----
CONSUMER STAPLES (9.8%)
Anheuser-Busch Cos., Inc. 1,400 60
Archer Daniels Midland Co. 5,000 123
Diageo PLC ADR 3,500 205
Estee Lauder Cos., Inc. (The), Cl A 3,000 100
PepsiCo, Inc. 2,000 118
Procter & Gamble Co. (The) 1,200 69
SYSCO Corp. 2,700 84
Unilever PLC ADR 5,000 202
Wal-Mart Stores, Inc. 3,100 145
Wm. Wrigley Jr. Co. 1,300 86
-----
1,192
-----
ENERGY (10.1%)
Anadarko Petroleum Corp. 1,000 95
Baker Hughes, Inc. 3,500 212
Burlington Resources, Inc. 2,000 172
Chevron Corp. 3,000 170
ConocoPhillips 2,400 140
Exxon Mobil Corp. 3,000 169
Royal Dutch Shell PLC ADR, Cl A 3,000 184
Transocean, Inc. * 1,300 91
-----
1,233
-----
FINANCIALS (24.2%)
American International
Group, Inc. 3,000 205
Ameriprise Financial Inc 4,000 164
Bank of America Corp. 3,800 175
Berkshire Hathaway, Inc., Cl B * 75 221
Cincinnati Financial Corp. 4,200 188
CIT Group, Inc. 4,100 212
Citigroup, Inc. 5,300 258
Fifth Third Bancorp 3,000 113
Genworth Financial, Inc., Cl A (b) 6,000 207
Goldman Sachs Group, Inc. (The) 750 96
Morgan Stanley 3,000 170
New York Community
Bancorp, Inc. (b) 12,000 198
Principal Financial Group, Inc. 3,500 166
State Street Corp. 2,000 111
FINANCIALS-CONTINUED
U.S. Bancorp 4,400 132
Wachovia Corp. 4,000 211
Wells Fargo & Co. 1,825 115
-----
2,942
-----
HEALTH CARE (11.6%)
Abbott Laboratories 4,000 158
Amgen, Inc. * 1,675 132
Boston Scientific Corp. * 10,000 245
Bristol-Myers Squibb Co. 9,000 207
Eli Lilly & Co. 3,500 198
Johnson & Johnson 2,700 162
Pfizer, Inc. 10,000 233
WellPoint, Inc. * 1,000 80
-----
1,415
-----
INDUSTRIALS (10.2%)
3M Co. 2,000 155
Cendant Corp. 7,000 121
Dover Corp. 3,000 121
Emerson Electric Co. 1,500 112
General Electric Co. 4,000 140
Goodrich Corp. 5,000 207
Honeywell International, Inc. 2,500 93
Norfolk Southern Corp. 2,500 112
Rockwell Automation, Inc. 1,000 59
Textron, Inc. 1,500 115
-----
1,235
-----
INFORMATION TECHNOLOGY (14.0%)
Accenture Ltd., Cl A (b) 7,000 202
Agilent Technologies, Inc. * 4,500 150
Applied Materials, Inc. 12,000 215
Cisco Systems, Inc. * 8,000 137
First Data Corp. 4,850 209
Intel Corp. 6,000 150
International Business Machines Corp. 1,800 148
Microsoft Corp. 7,500 196
Nokia Corp. ADR 13,000 237
Texas Instruments, Inc. 1,900 61
-----
1,705
-----
MATERIALS (3.1%)
E.I. du Pont de Nemours & Co. 2,500 106
Praxair, Inc. 2,700 143
Sigma-Aldrich Corp. 2,000 127
-----
376
-----
TELECOMMUNICATION SERVICES (3.9%)
ALLTEL Corp. 1,800 114
BellSouth Corp. 2,200 60
Verizon Communications, Inc. 5,000 150
Vodafone Group PLC ADR 7,000 150
-----
474
-----
See Notes to Financial Statements.
24
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
LARGE CAP RELATIVE VALUE FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
UTILITIES (4.0%)
American Electric Power Co., Inc. 3,000 111
Edison International 4,000 176
Exelon Corp. 2,000 106
SCANA Corp. 2,500 98
--------
491
--------
Total Common Stocks (Cost $10,391) 12,114
--------
SHORT-TERM INVESTMENT (7.0%)
CSFB Enhanced Liquidity
Portfolio (c) 846,170 846
--------
Total Short-Term Investment (Cost $846) 846
--------
MONEY MARKET FUNDS (0.7%)
Federated Prime Value
Obligations Fund, Cl I 83,065 83
--------
Total Money Market Funds (Cost $83) 83
--------
Total Investments (Cost $11,320)
(a)--107.3% 13,043
--------
Liabilities in excess of other
assets--(7.3)% (891)
--------
Net Assets--100.0% $ 12,152
========
- ---------------
*Non-income producing security.
(a) Cost for federal income tax purposes is $11,342 (amount in thousands)
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 2,023
Unrealized Depreciation (322)
-------
Unrealized Appreciation (Depreciation) $ 1,701
=======
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $824.
(c) This security was purchased with cash collateral held from securities
lending.
ADR - American Depository Receipt.
C1 - Class.
See Notes to Financial Statements.
25
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
LARGE CAP VALUE EQUITY FUND
Shares or
Principal
Amount($) Value($)
--------- --------
COMMON STOCKS (99.6%)
CONSUMER DISCRETIONARY (7.5%)
Dow Jones & Co., Inc. (b) 16,800 596
Federated Department Stores, Inc. 11,988 796
Leggett & Platt, Inc. 24,491 562
OfficeMax, Inc. 7,736 196
Stanley Works (The) 8,734 420
Time Warner, Inc. 16,000 279
-----
2,849
-----
CONSUMER STAPLES (7.9%)
Colgate-Palmolive Co. 15,000 822
Estee Lauder Cos., Inc.
(The), Cl A (b) 8,250 276
H.J. Heinz Co. 13,050 440
J.M. Smucker Co. (The) 6,788 299
Kimberly-Clark Corp. 9,900 591
PepsiCo, Inc. 9,700 573
-----
3,001
-----
ENERGY (9.2%)
Amerada Hess Corp. 3,000 380
Chevron Corp. 13,350 758
ConocoPhillips 13,300 774
Exxon Mobil Corp. 13,650 767
Marathon Oil Corp. 13,450 820
-----
3,499
-----
FINANCIALS (25.4%)
A.G. Edwards, Inc. 7,250 340
Aspen Insurance Holdings Ltd. 4,100 97
Astoria Financial Corp. 13,650 401
Bank of America Corp. 17,750 820
Bank of New York Co., Inc. (The) 19,400 618
Bear Stearns & Co., Inc. 5,850 676
Citigroup, Inc. 8,441 410
Colonial BancGroup, Inc. (The) 12,850 306
Comerica, Inc. 5,234 297
Compass Bancshares, Inc. 6,610 319
Endurance Specialty Holdings Ltd. 2,900 104
JPMorgan Chase & Co. 15,395 611
KeyCorp. 12,000 395
Lincoln National Corp. 7,700 408
Merrill Lynch & Co., Inc. 5,200 352
Morgan Stanley 5,850 332
Northern Trust Corp. 6,750 350
Provident Financial Services, Inc. 19,100 354
Regions Financial Corp. 9,203 314
South Financial Group, Inc. (The) 7,207 198
Torchmark Corp. 7,294 406
Wachovia Corp. (b) 12,000 634
Washington Mutual, Inc. 15,250 663
XL Capital Ltd., Cl A (b) 4,350 293
-----
9,698
-----
HEALTH CARE (9.0%)
Abbott Laboratories 19,600 773
Becton, Dickinson & Co. 6,947 417
Cooper Cos., Inc. (The) 6,150 315
PerkinElmer, Inc. 14,696 346
Pfizer, Inc. 35,450 828
Wyeth 16,050 739
-----
3,418
-----
INDUSTRIALS (16.8%)
Emerson Electric Co. 5,477 409
General Electric Co. 20,800 729
Honeywell International, Inc. 20,800 774
Hubbell, Inc., Cl B 4,333 196
Illinois Tool Works, Inc. 7,200 634
ITT Industries, Inc. 3,900 401
MSC Industrial Direct Co., Inc., Cl A 7,550 304
Pall Corp. 13,784 370
Parker Hannifin Corp. 4,550 300
Pentair, Inc. 6,650 230
Pitney Bowes, Inc. 7,133 301
Rockwell Automation, Inc. 8,750 518
Ryder System, Inc. 5,850 240
United Parcel Service, Inc., Cl B 8,700 654
Waste Management, Inc. 11,350 344
-----
6,404
-----
INFORMATION TECHNOLOGY (4.7%)
Automatic Data Processing, Inc. 11,900 545
First Data Corp. 7,050 303
Harris Corp. 7,247 312
Jack Henry & Associates, Inc. 15,866 303
Tektronix, Inc. 11,400 322
-----
1,785
-----
MATERIALS (8.8%)
Alcoa, Inc. 14,350 424
Ashland, Inc. 3,934 228
Bemis Co., Inc. (b) 10,550 294
Cytec Industries, Inc. 4,950 236
E.I. du Pont de Nemours & Co. 13,450 572
Engelhard Corp. 10,954 330
International Paper Co. 11,850 398
MeadWestvaco Corp. 10,450 293
Sigma-Aldrich Corp. 4,406 279
Valspar Corp. (The) 11,400 281
-----
3,335
-----
TELECOMMUNICATION SERVICES (5.0%)
AT&T, Inc. (b) 15,700 384
BellSouth Corp. 27,900 756
Verizon Communications, Inc. 25,390 765
-----
1,905
-----
See Notes to Financial Statements.
26
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
LARGE CAP VALUE EQUITY FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
UTILITIES (5.3%)
Cinergy Corp. 10,050 427
Constellation Energy Group, Inc. 5,750 331
Dominion Resources, Inc. 5,339 412
Entergy Corp. 6,300 432
PPL Corp. 13,591 400
--------
2,002
--------
Total Common Stocks
(Cost $34,639) 37,896
--------
SHORT-TERM INVESTMENT (6.4%)
CSFB Enhanced Liquidity
Portfolio (c) 2,424,514 2,425
--------
Total Short-Term Investment
(Cost $2,425) 2,425
--------
MONEY MARKET FUNDS (0.1%)
Federated Prime Value Obligations
Fund, Cl I 37,336 37
--------
Total Money Market Funds (Cost $37) 37
--------
Total Investments
(Cost $37,100) (a)--106.1% 40,358
--------
Liabilities in excess of other assets--(6.1)% (2,330)
--------
Net Assets--100.0% $ 38,028
========
(a) Cost for federal income tax purposes is $37,121 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 3,857
Unrealized Depreciation (620)
--------
Unrealized Appreciation (Depreciation) $ 3,237
========
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $2,346.
(c) This security was purchased with cash collateral held from securities
lending.
C1 - Class.
See Notes to Financial Statements.
27
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
MID-CAP EQUITY FUND
Shares or
Principal
Amount($) Value($)
--------- --------
COMMON STOCKS (98.3%)
CONSUMER DISCRETIONARY (15.5%)
Abercrombie & Fitch Co., Cl A 2,133 139
American Eagle Outfitters, Inc. 3,019 69
Black & Decker Corp. (The) 1,728 150
Claire's Stores, Inc. 2,829 83
Darden Restaurants, Inc. 3,431 133
Dex Media, Inc. 2,574 70
Federated Department
Stores, Inc. 1,447 96
Hilton Hotels Corp. 6,691 160
J.C. Penney Co., Inc. 2,267 126
Johnson Controls, Inc. 1,092 80
KB Home 897 65
Lennar Corp., Cl A 2,467 151
Liz Claiborne, Inc. 2,036 73
McGraw-Hill Cos., Inc. (The) 4,697 242
Meritage Homes Corp. * 1,292 81
Nordstrom, Inc. 3,911 146
Pacific Sunwear of
California, Inc. * 2,722 68
Polo Ralph Lauren Corp. 2,005 113
Scholastic Corp. * 2,340 67
Sherwin-Williams Co. (The) 2,328 106
Starwood Hotels & Resorts
Worldwide, Inc. 932 60
Tiffany & Co. 1,557 60
-----
2,338
-----
CONSUMER STAPLES (4.4%)
Archer Daniels Midland Co. 3,399 84
Pepsi Bottling Group, Inc. (The) 4,408 126
Pilgrim's Pride Corp. 5,165 171
Reynolds American, Inc. 1,152 110
Smithfield Foods, Inc. * 5,511 169
-----
660
-----
ENERGY (8.4%)
Amerada Hess Corp. 1,135 144
Cooper Cameron Corp.* 2,861 118
Devon Energy Corp. 2,499 157
Marathon Oil Corp. 2,292 140
Murphy Oil Corp. 2,342 126
Noble Energy, Inc. 3,374 136
Pride International, Inc.* 2,846 88
Tesoro Corp.* 2,125 131
Valero Energy Corp. 2,703 139
Weatherford International Ltd.* 2,235 81
-----
1,260
-----
FINANCIALS (21.1%)
American Capital Strategies Ltd. 3,368 122
Arch Capital Group Ltd.* 1,672 92
Bear Stearns & Co., Inc. 2,088 241
Brandywine Realty Trust 2,805 78
CBL & Associates Properties, Inc. 2,532 100
FINANCIALS-CONTINUED
CIT Group, Inc. 3,727 193
Comerica, Inc. 1,785 101
Conseco, Inc.* 2,418 56
E*TRADE Financial Corp.* 4,937 103
Fiserv, Inc.* 1,176 51
General Growth Properties, Inc. 3,180 149
Genworth Financial, Inc., Cl A 1,988 69
IndyMac Bancorp, Inc. 2,723 106
KeyCorp. 4,170 137
Lexington Corp. Properties Trust 5,692 121
Lincoln National Corp. 3,361 178
MBIA, Inc. 1,923 116
MGIC Investment Corp. 1,662 109
New Century Financial Corp. 2,037 73
North Fork Bancorporation, Inc. 2,629 72
Old Republic International Corp. 2,732 72
PMI Group, Inc. (The) 2,562 105
Radian Group, Inc. 1,550 91
Sovereign Bancorp, Inc. 3,209 69
St. Paul Travelers Cos., Inc. (The) 3,151 141
Student Loan Corp. (The) 180 38
TD Banknorth, Inc. 2,600 76
UnumProvident Corp. 2,906 66
Ventas, Inc. 4,733 152
Zions Bancorp 1,271 96
-----
3,173
-----
HEALTH CARE (12.1%)
Allergan, Inc. 1,382 149
Becton, Dickinson & Co. 1,725 104
Biogen Idec, Inc.* 1,977 90
CIGNA Corp. 1,292 144
Coventry Health Care, Inc.* 3,305 189
Dade Behring Holdings, Inc. 2,180 89
Edwards Lifesciences Corp.* 1,999 83
Express Scripts, Inc.* 1,424 119
Genzyme Corp.* 2,168 153
Hospira, Inc.* 3,163 135
Humana, Inc.* (b) 1,299 71
Laboratory Corp. of America
Holdings* (b) 2,570 138
McKesson Corp. 1,910 99
Protein Design Labs, Inc.* 3,505 100
UnitedHealth Group, Inc. 1,274 79
Watson Pharmaceuticals, Inc.* 2,587 84
-----
1,826
-----
INDUSTRIALS (10.6%)
American Standard Cos., Inc. 1,948 78
Arrow Electronics, Inc.* 3,817 122
CSX Corp. 2,077 105
Cummins, Inc. 1,258 113
Eaton Corp. 2,110 142
Goodrich Corp. 2,023 83
Granite Construction, Inc. 1,760 63
See Notes to Financial Statements. 28
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
MID-CAP EQUITY FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
INDUSTRIALS-CONTINUED
Harsco Corp. 1,421 96
Herman Miller, Inc. 2,052 58
Hughes Supply, Inc. 3,404 122
PACCAR, Inc. 2,077 144
R.R. Donnelley & Sons Co. 2,744 94
Ryder System, Inc. 2,279 93
Southwest Airlines Co. 7,416 122
Timken Co. (The) (b) 5,145 165
--------
1,600
--------
INFORMATION TECHNOLOGY (15.7%)
Accenture Ltd., Cl A 3,441 99
ADTRAN, Inc. 2,642 79
Alliance Data Systems Corp.* 2,617 93
Amphenol Corp., Cl A 2,940 130
Autodesk, Inc. 2,064 89
Broadcom Corp., Cl A* 1,960 92
Check Point Software
Technologies Ltd.* 4,103 82
Citrix Systems, Inc.* (b) 4,001 115
Compuware Corp.* 7,360 66
Corning, Inc.* 3,565 70
Fair Isaac Corp. 2,192 97
Freescale Semiconductor, Inc., Cl B * 3,962 100
Global Payments, Inc. (b) 3,216 150
Harris Corp. 2,279 98
Lam Research Corp.* (b) 3,053 109
Linear Technology Corp. 2,342 84
McAfee, Inc.* 4,529 123
MEMC Electronic
Materials, Inc.* 3,313 73
National Semiconductor Corp. 5,109 133
NCR Corp.* 3,576 121
NVIDIA Corp.* 2,564 94
QLogic Corp.* 2,019 66
SanDisk Corp.* 1,058 66
Western Digital Corp.* 7,364 137
--------
2,366
--------
MATERIALS (4.3%)
FMC Corp.* 2,063 110
Louisiana-Pacific Corp. 4,267 117
Lubrizol Corp. (The) 3,072 133
Lyondell Chemical Co. 5,188 124
Phelps Dodge Corp. 1,124 162
--------
646
--------
REITS (0.5%)
Simon Property Group, Inc. 888 68
--------
UTILITIES (5.7%)
Allegheny Energy, Inc.* 1,170 37
Alliant Energy Corp 4,199 118
American Electric
Power Co., Inc. 5,568 206
CenterPoint Energy, Inc. (b) 7,740 99
Edison International 3,962 173
FirstEnergy Corp. 1,564 77
Sempra Energy (b) 3,302 148
--------
858
--------
Total Common Stocks (Cost $12,859) 14,795
--------
SHORT-TERM INVESTMENT (6.0%)
CSFB Enhanced Liquidity
Portfolio (c) 897,706 898
--------
Total Short-Term Investment
(Cost $898) 898
--------
MONEY MARKET FUNDS (0.3%)
Federated Prime Value
Obligations Fund, Cl I 39,001 39
--------
Total Money Market Funds (Cost $39) 39
--------
Total Investments
(Cost $13,796) (a)--104.6% 15,732
--------
Liabilities in excess of other assets--(4.6)% (696)
--------
Net Assets--100.0% $ 15,036
========
*Non-income producing security.
(a) Cost for federal income tax purposes is $13,811 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 2,145
Unrealized Depreciation (224)
----------
Unrealized Appreciation (Depreciation) $ 1,921
==========
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $868.
(c) This security was purchased with cash collateral held from securities
lending.
C1 - Class.
REIT - Real Estate Investment Trust.
29 See Notes to Financial Statements.
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
SMALL CAP VALUE EQUITY FUND
Shares or
Principal
Amount($) Value($)
--------- --------
COMMON STOCKS (98.4%)
CONSUMER DISCRETIONARY (18.0%)
ADESA, Inc. 7,646 187
ArvinMeritor, Inc. 9,000 130
Bassett Furniture Industries, Inc. 5,100 94
Benetton Group SpA ADR 5,400 124
BorgWarner, Inc. (b) 2,500 152
Brown Shoe Co., Inc. 3,500 149
CBRL Group, Inc. 3,600 127
CKE Restaurants, Inc. 33,700 454
Dow Jones & Co., Inc. (b) 5,100 181
Intrawest Corp. 11,000 318
Lithia Motors, Inc. (b) 11,400 358
Makita Corp. ADR 11,352 274
Meredith Corp. 4,100 215
Movado Group, Inc. 16,000 293
Natuzzi SpA ADR 10,000 70
Stanley Furniture Co., Inc. 1,900 44
United Auto Group, Inc. 7,200 275
Winnebago Industries, Inc. (b) 6,100 203
-----
3,648
-----
CONSUMER STAPLES (3.8%)
Church & Dwight Co., Inc. 9,550 315
Corn Products International, Inc. 9,400 225
J.M. Smucker Co. (The) 5,275 233
-----
773
-----
ENERGY (3.3%)
CHC Helicopter Corp. 19,900 466
Tidewater, Inc. (b) 4,400 196
-----
662
-----
FINANCIALS (17.5%)
American Financial Group, Inc. 4,400 169
BankAtlantic Bancorp, Inc. 11,600 162
Banner Corp. 2,500 78
City National Corp. 2,100 152
Cohen & Steers, Inc. 11,300 211
Colonial BancGroup, Inc. (The) 6,100 145
Federal Agricultural
Mortgage Corp., Cl C 1,911 57
Glacier Bancorp, Inc. 6,022 181
HCC Insurance Holdings, Inc. 9,800 291
Horizon Financial Corp. 6,056 132
Hub International Ltd. 15,400 398
International Bancshares Corp. 3,300 97
Investors Financial
Services Corp. (b) 6,000 221
Jefferies Group, Inc. 3,400 153
National Interstate Corp. 3,105 59
PXRE Group Ltd. 4,000 52
Scottish Re Group Ltd. 4,200 103
Seacoast Banking Corp.
of Florida 5,510 126
South Financial Group, Inc. (The) (b) 7,200 198
FINANCIALS-CONTINUED
StanCorp Financial Group, Inc. 5,000 250
Washington Federal, Inc. 6,565 151
West Coast Bancorp 5,876 155
-----
3,541
-----
HEALTH CARE (4.5%)
Cooper Cos., Inc. (The) 8,600 441
Invacare Corp. 1,100 35
PerkinElmer, Inc. 9,300 219
Perrigo Co. 15,000 224
-----
919
-----
INDUSTRIALS (28.1%)
ABM Industries, Inc. 5,200 102
Apogee Enterprises, Inc. 4,500 73
Baldor Electric Co. 7,900 203
Briggs & Stratton Corp. 6,800 264
Brink's Co. (The) 7,000 335
Cummins, Inc. 2,100 188
ElkCorp 4,197 141
Engineered Support
Systems, Inc. 2,650 110
Forward Air Corp. 5,902 216
Freightcar America, Inc. 3,800 183
GOL Linhas Aereas
Inteligentes SA ADR (b) 8,656 244
Graco, Inc. 18,200 665
Granite Construction, Inc. 7,600 273
Greenbrier Cos., Inc. (b) 4,600 131
Heartland Express, Inc. 10,600 215
Lan Airlines SA ADR 3,900 146
Lennox International, Inc. 10,114 285
LSI Industries, Inc. 13,962 219
Mine Safety Appliances Co. 5,100 185
MSC Industrial Direct
Co., Inc., Cl A 5,800 233
Oshkosh Truck Corp. (b) 3,300 147
Portec Rail Products, Inc. 3,886 51
Quixote Corp. 10,800 214
Ryder System, Inc. 5,300 217
Supreme Industries, Inc., Cl A 2,400 19
Valmont Industries, Inc. 7,500 251
Wabtec Corp. 14,100 379
-----
5,689
-----
INFORMATION TECHNOLOGY (10.3%)
Factset Research Systems, Inc. 7,800 321
Fair Isaac Corp. 8,700 384
Harris Corp. 8,854 381
Jack Henry & Associates, Inc. 14,600 279
Keithley Instruments, Inc. 6,500 91
Lowrance Electronics, Inc. (b) 4,965 130
Nam Tai Electronics, Inc. 11,000 248
Reynolds & Reynolds Co. (The), Cl A 9,101 255
-----
2,089
-----
See Notes to Financial Statements 30
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands, except
shares)
SMALL CAP VALUE EQUITY FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- --------
MATERIALS (11.6%)
Agnico-Eagle Mines Ltd. 12,700 251
Airgas, Inc. 19,000 625
Allegheny Technologies, Inc. 4,700 170
Cambrex Corp. 9,800 184
Foundation Coal Holdings, Inc. 6,400 243
RPM International, Inc. 12,100 210
Sappi Ltd. ADR 20,500 232
Scotts Miracle-Gro Co. (The), Cl A 4,600 208
Valspar Corp. (The) 9,400 232
--------
2,355
--------
UTILITIES (1.3%)
Companhia de Saneamento
Basico ADR 15,500 261
--------
Total Common Stocks (Cost $14,319) 19,937
--------
SHORT-TERM INVESTMENT (7.2%)
CSFB Enhanced Liquidity
Portfolio (c) 1,458,125 1,458
--------
Total Short-Term Investment
(Cost $1,458) 1,458
--------
MONEY MARKET FUNDS (1.6%)
Federated Prime Value
Obligations Fund, Cl I 327,113 327
--------
Total Money Market Funds (Cost $327) 327
--------
Total Investments (Cost $16,104)
(a)--107.2% 21,721
--------
Liabilities in excess of other
assets--(7.2)% (1,452)
--------
Net Assets--100.0% $ 20,270
========
(a) Cost for federal income tax purposes is $16,234 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 5,736
Unrealized Depreciation (248)
---------
Unrealized Appreciation (Depreciation) $ 5,488
=========
(b) This security or a partial position of the security was on loan at
December 31, 2005. The total value of securities on loan at December 31,
2005 in thousands was $1,401.
(c) This security was purchased with cash collateral held from securities
lending.
ADR - American Depository Receipt.
C1 - Class.
31 See Notes to Financial Statements.
STATEMENTS OF ASSETS AND LIABILITIES
STI CLASSIC VARIABLE TRUST December 31, 2005 (Amounts in thousands)
Capital Investment Large Cap Large Cap Mid-Cap Small Cap
Appreciation International Grade Relative Value Equity Value
Fund Equity Fund Bond Fund Value Fund Equity Fund Fund Equity Fund
------------ -------------- ----------- ---------- ----------- -------- -----------
Assets:
Investments, at Cost....................... $ 48,110 $ 3,709 $ 18,604 $ 11,320 $ 37,100 $ 13,796 $ 16,104
============ ============= ========== ========== =========== ======== ==========
Investments, at Value...................... $ 52,406 $ 5,206 $ 18,616 $ 13,043 $ 40,358 $ 15,732 $ 21,721
Foreign currency, at value (cost $90)...... - 90 - - - - -
Accrued Income............................. 69 12 150 17 50 27 49
Receivable for Investment Securities Sold.. - 8 - 86 96 333 -
Receivable from Investment Adviser......... - 39 - - - - -
------------ ------------- ---------- ---------- ----------- -------- ----------
Total Assets............................... 52,475 5,355 18,766 13,146 40,504 16,092 21,770
------------ ------------- ---------- ---------- ----------- -------- ----------
Liabilities:
Income Distributions payable............... - - 48 - - - -
Payable for Investment Securities
Purchased ............................. - 6 - 130 - 134 -
Payable Upon Return of Securities Loaned... 6,102 - 5,270 846 2,425 898 1,458
Investment Advisory Fees Payable........... 37 - 6 9 26 9 22
Administration Fees Payable................ 1 - - - 1 - 1
Custodian Fees Payable..................... 2 22 2 1 3 4 3
Accrued Expenses........................... 26 7 10 8 21 11 16
------------ ------------- ---------- ---------- ----------- -------- ----------
Total Liabilities.......................... 6,168 35 5,336 994 2,476 1,056 1,500
------------ ------------- ---------- ---------- ----------- -------- ----------
Total Net Assets........................... $ 46,307 $ 5,320 $ 13,430 $ 12,152 $ 38,028 $ 15,036 $ 20,270
============ ============= ========== ========== =========== ======== ==========
Net Assets:
Capital.................................... $ 39,597 $ 5,928 $ 13,727 $ 9,570 $ 42,024 $ 12,087 $ 9,718
Accumulated Net Investment Income (Loss) 6 (18) 1 4 - 8 14
Accumulated Net Realized Gains (Losses) on
Investment Transactions and Foreign
Currency Transactions.................. 2,408 (2,087) (310) 855 (7,254) 1,005 4,921
Net Unrealized Appreciation (Depreciation)
on Investments and Foreign
Currency Transactions.................. 4,296 1,497 12 1,723 3,258 1,936 5,617
------------ ------------- ---------- ---------- ----------- -------- ----------
Total Net Assets........................... $ 46,307 $ 5,320 $ 13,430 $ 12,152 $ 38,028 $ 15,036 $ 20,270
============ ============= ========== ========== =========== ======== ==========
Shares Outstanding......................... 2,850 436 1,321 983 2,601 1,113 1,111
Net Asset Value, Offering, and Redemption
Price Per Share........................ $ 16.25 $ 12.19 $ 10.16 $ 12.37 $ 14.62 $ 13.51 $ 18.24
Amounts designated as "--" are $0 or have been rounded to $0.
See Notes to Financial Statements. 32
STATEMENTS OF OPERATIONS
STI CLASSIC VARIABLE TRUST For the Year Ended December 31, 2005 (Amounts in
thousands)
Capital Investment Large Cap Large Cap Small Cap
Appreciation International Grade Relative Value Mid-Cap Value Equity
Fund Equity Fund Bond Fund Value Fund Equity Fund Equity Fund Fund
------------ -------------- ----------- ---------- ----------- ----------- ------------
Investment Income:
Dividend Income.......................... $ 623 $ 161 $ 4 $ 235 $ 1,047 $ 236 $ 445
Interest Income.......................... - 2 644 - - - -
Income from Securities Lending........... 6 - 24 1 3 11 4
Less: Foreign Taxes Withheld............. - (9) - - - - -
------------ -------------- ----------- ---------- ----------- ----------- ----------
Total Investment Income.................. 629 154 672 236 1,050 247 449
------------ -------------- ----------- ---------- ----------- ----------- ----------
Expenses:
Investment Advisory Fees................. 535 68 99 102 334 168 309
Administration and Fund
Accounting Fees....................... 13 1 4 3 11 4 7
Custodian Fees........................... 5 158 6 4 9 13 9
Professional Fees........................ 29 3 9 8 24 9 19
Transfer Agent Fees...................... (10) (1) (3) (2) (9) (3) (5)
Printing Fees............................ 30 11 15 12 25 15 17
Trustee Fees............................. 1 - - - 1 - 1
Other Expenses........................... 2 37 5 2 4 3 3
------------ -------------- ----------- ---------- ----------- ----------- ----------
Total Expenses 605 277 135 129 399 209 360
Less: Investment Advisory Fees Waived
or Fees Reimbursed.................... (44) (195) (28) (6) (10) (32) (37)
------------ -------------- ----------- ---------- ----------- ----------- ----------
Net Expenses............................. 561 82 107 123 389 177 323
------------ -------------- ----------- ---------- ----------- ----------- ----------
Net Investment Income (Loss)............. 68 72 565 113 661 70 126
------------ -------------- ----------- ---------- ----------- ----------- ----------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency
Transactions:
Net Realized Gain (Loss) on Investments
Sold and Foreign Currency Transactions: 2,488 835 6 1,129 4,556 3,519 4,925
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions......... (3,188) (257) (233) (214) (3,746) (1,540) (1,854)
------------ -------------- ----------- ---------- ----------- ----------- ----------
Total Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions................. (700) 578 (227) 915 810 1,979 3,071
------------ -------------- ----------- ---------- ----------- ----------- ----------
Net Change in Net Assets from Operations $ (632) $ 650 $ 338 $ 1,028 $ 1,471 $ 2,049 $ 3,197
============ ============= =========== ========== =========== =========== ==========
Amounts designated as "--" are $0 or have been rounded to $0.
33 See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
STI CLASSIC VARIABLE TRUST For the Years Ended December 31, (Amounts in
thousands)
Capital Appreciation International Investment Grade
Fund Equity Fund Bond Fund
------------------- ----------------- -----------------
2005 2004 2005 2004 2005 2004
-------- --------- -------- -------- -------- --------
Operations:
Net Investment Income (Loss)........................................ $ 68 $ 108 $ 72 $ 49 $ 565 $ 648
Net Realized Gain (Loss) on Investments Sold and Foreign Currency
Transactions..................................................... 2,488 6,819 835 776 6 236
Net Change in Unrealized Appreciation (Depreciation) on Investments
and Foreign Currency Transactions............................... (3,188) (3,419) (257) 287 (233) (156)
-------- --------- -------- -------- -------- --------
Change in Net Assets from Operations................................ (632) 3,508 650 1,112 338 728
-------- --------- -------- -------- -------- --------
Dividends and Distributions to Shareholders:
Net Investment Income............................................... (68) (102) (133) (105) (592) (629)
-------- --------- -------- -------- -------- --------
Capital Transactions:
Proceeds from Shares Issued......................................... 6,219 5,856 330 347 933 1,401
Dividends Reinvested................................................ 68 102 133 105 596 640
Cost of Shares Redeemed............................................. (14,142) (13,869) (1,903) (2,136) (4,892) (5,409)
-------- --------- -------- -------- -------- --------
Change in Net Assets from Capital Transactions...................... (7,855) (7,911) (1,440) (1,684) (3,363) (3,368)
-------- --------- -------- -------- -------- --------
Change in Net Assets................................................ (8,555) (4,505) (923) (677) (3,617) (3,269)
-------- --------- -------- -------- -------- --------
Net Assets:
Beginning of Period................................................. 54,862 59,367 6,243 6,920 17,047 20,316
-------- --------- -------- -------- -------- --------
End of Period....................................................... $ 46,307 $ 54,862 $ 5,320 $ 6,243 $ 13,430 $ 17,047
======== ========= ======== ======== ======== ========
Accumulated Net Investment Income (Loss), End of Period................. $ 6 $ 6 $ (18)$ 53 $ 1 $ 23
======== ========= ======== ======== ======== ========
Share Transactions:
Issued.............................................................. 391 376 30 37 91 137
Reinvested.......................................................... 4 6 12 11 58 62
Redeemed............................................................ (887) (893) (170) (218) (477) (527)
-------- --------- -------- -------- -------- --------
Change in Share Transactions........................................ (492) (511) (128) (170) (328) (328)
======== ========= ======== ======== ======== ========
See Notes to Financial Statements. 34
STATEMENTS OF CHANGES IN NET ASSETS
STI CLASSIC VARIABLE TRUST For the Years Ended December 31, (Amounts in
thousands)
Large Cap Relative Large Cap Value Mid-Cap Small Cap Value
Value Fund Equity Fund Equity Fund Equity Fund
------------------ ------------------ ------------------- ------------------
2005 2004 2005 2004 2005 2004 2005 2004
-------- -------- -------- -------- --------- -------- -------- --------
Operations:
Net Investment Income (Loss)................... $ 113 $ 91 $ 661 $ 639 $ 70 $ 113 $ 126 $ 73
Net Realized Gain (Loss) on Investments Sold... 1,129 606 4,556 5,423 3,519 1,584 4,925 3,468
Net Change in Unrealized Appreciation
(Depreciation) on Investments............... (214) 705 (3,746) 279 (1,540) 733 (1,854) 1,457
-------- -------- -------- -------- --------- -------- -------- --------
Change in Net Assets from Operations........... 1,028 1,402 1,471 6,341 2,049 2,430 3,197 4,998
-------- -------- -------- -------- --------- -------- -------- --------
Dividends and Distributions to Shareholders:
Net Investment Income.......................... (110) (90) (662) (646) (68) (107) (125) (60)
Net Realized Gains............................. - - - - - - (3,009) -
-------- -------- -------- -------- --------- -------- -------- --------
Total Dividends and Distributions.............. (110) (90) (662) (646) (68) (107) (3,134) (60)
-------- -------- -------- -------- --------- -------- -------- --------
Capital Transactions:
Proceeds from Shares Issued.................... 1,769 2,801 2,872 7,126 1,034 1,914 5,765 3,370
Dividends Reinvested........................... 110 90 662 646 68 107 3,134 60
Cost of Shares Redeemed........................ (2,089) (1,957) (13,328) (11,938) (4,429) (4,144) (14,652) (2,789)
-------- -------- -------- -------- --------- -------- -------- --------
Change in Net Assets from Capital Transactions. (210) 934 (9,794) (4,166) (3,327) (2,123) (5,753) 641
-------- -------- -------- -------- --------- -------- -------- --------
Change in Net Assets........................... 708 2,246 (8,985) 1,529 (1,346) 200 (5,690) 5,579
-------- -------- -------- -------- --------- -------- -------- --------
Net Assets:
Beginning of Period............................ 11,444 9,198 47,013 45,484 16,382 16,182 25,960 20,381
-------- -------- -------- -------- --------- -------- -------- --------
End of Period.................................. $ 12,152 $ 11,444 $ 38,028 $ 47,013 $ 15,036 $ 16,382 $ 20,270 $ 25,960
======== ======== ======== ======== ========= ======== ======== ========
Accumulated Net Investment Income (Loss),
End of Period................................... $ 4 $ 1 $ - $ - $ 8 $ 6 $ 14 $ 13
======== ======== ======== ======== ========= ======== ======== ========
Share Transactions:
Issued......................................... 151 269 201 533 82 182 321 210
Reinvested..................................... 9 8 46 48 5 10 179 4
Redeemed....................................... (177) (188) (930) (908) (354) (393) (805) (175)
-------- -------- -------- -------- --------- -------- -------- --------
Change in Share Transactions................... (17) 89 (683) (327) (267) (201) (305) 39
-------- -------- -------- -------- --------- -------- -------- --------
Amounts designated as "--" are either $0 or have been rounded to $0.
35 See Notes to Financial Statements.
This page is intentionally left blank.
36
FINANCIAL HIGHLIGHTS
STI CLASSIC VARIABLE TRUST For a Share Outstanding Throughout Each Year
Net Net Realized and Dividends
Investment Unrealized Gains from Net
Net Asset Value, Income (Losses) on Total From Investment
Beginning of Year (Loss) Investments Operations Income
----------------- ----------- ---------------- ---------- ------------
CAPITAL APPRECIATION FUND
Year ended December 31, 2005 $ 16.42 $ 0.02 $ (0.17) $ (0.15) $ (0.02)
Year ended December 31, 2004 15.41 0.03 1.01 1.04 (0.03)
Year ended December 31, 2003 13.01 (0.03)(a) 2.43 2.40 -
Year ended December 31, 2002 17.48 (0.07) (3.74) (3.81) -
Year ended December 31, 2001 20.02 (0.05) (1.27) (1.32) -
INTERNATIONAL EQUITY FUND
Year ended December 31, 2005 11.06 0.15 (a) 1.27 1.42 (0.29)
Year ended December 31, 2004 9.43 0.11 1.69 1.80 (0.17)
Year ended December 31, 2003 6.92 0.07 (a) 2.50 2.57 (0.06)
Year ended December 31, 2002 8.55 0.02 (1.61) (1.59) -
Year ended December 31, 2001 10.36 - (1.80) (1.80) -
INVESTMENT GRADE BOND FUND
Year ended December 31, 2005 10.34 0.39 (0.17) 0.22 (0.40)
Year ended December 31, 2004 (b) 10.27 0.36 0.06 0.42 (0.35)
Year ended December 31, 2003 10.29 0.34 (a) 0.02 0.36 (0.38)
Year ended December 31, 2002 10.05 0.44 0.28 0.72 (0.48)
Year ended December 31, 2001 9.69 0.52 0.36 0.88 (0.52)
LARGE CAP RELATIVE VALUE FUND
Year ended December 31, 2005 11.45 0.11 0.92 1.03 (0.11)
Year ended December 31, 2004 10.10 0.09 (a) 1.35 1.44 (0.09)
Year ended December 31, 2003 8.05 0.08 (a) 2.04 2.12 (0.07)
Year ended December 31, 2002 10.21 0.06 (2.16) (2.10) (0.06)
Year ended December 31, 2001 10.86 0.04 (0.65) (0.61) (0.04)
LARGE CAP VALUE EQUITY FUND
Year ended December 31, 2005 14.32 0.23 0.30 0.53 (0.23)
Year ended December 31, 2004 12.60 0.19 1.72 1.91 (0.19)
Year ended December 31, 2003 10.39 0.17 (a) 2.21 2.38 (0.17)
Year ended December 31, 2002 12.70 0.16 (2.31) (2.15) (0.16)**
Year ended December 31, 2001 13.06 0.16 (0.32) (0.16) (0.20)
MID-CAP EQUITY FUND
Year ended December 31, 2005 11.87 0.07 1.63 1.70 (0.06)
Year ended December 31, 2004 10.23 0.08 1.63 1.71 (0.07)
Year ended December 31, 2003 7.93 0.05 (a) 2.30 2.35 (0.05)
Year ended December 31, 2002 11.09 (0.04) (3.11) (3.15) -
Year ended December 31, 2001 13.30 - (0.19) (0.19) -
SMALL CAP VALUE EQUITY FUND
Year ended December 31, 2005 18.33 0.08 2.00 2.08 (0.08)
Year ended December 31, 2004 14.80 0.05 (a) 3.52 3.57 (0.04)
Year ended December 31, 2003 10.75 0.07 (a) 4.05 4.12 (0.07)
Year ended December 31, 2002 10.94 0.06 (0.19) (0.13) (0.06)
Year ended December 31, 2001 9.12 0.12 1.82 1.94 (0.12)
Total
Distributions Dividends Net Asset
from Realized and Distri- Value, End
Capital Gains butions of Year
------------- ----------- ----------
CAPITAL APPRECIATION FUND
Year ended December 31, 2005 $ - $ (0.02) $ 16.25
Year ended December 31, 2004 - (0.03) 16.42
Year ended December 31, 2003 - - 15.41
Year ended December 31, 2002 (0.66) (0.66) 13.01
Year ended December 31, 2001 (1.22) (1.22) 17.48
INTERNATIONAL EQUITY FUND
Year ended December 31, 2005 - (0.29) 12.19
Year ended December 31, 2004 - (0.17) 11.06
Year ended December 31, 2003 - (0.06) 9.43
Year ended December 31, 2002 (0.04) (0.04) 6.92
Year ended December 31, 2001 (0.01) (0.01) 8.55
INVESTMENT GRADE BOND FUND
Year ended December 31, 2005 - (0.40) 10.16
Year ended December 31, 2004 (b) - (0.35) 10.34
Year ended December 31, 2003 - (0.38) 10.27
Year ended December 31, 2002 - (0.48) 10.29
Year ended December 31, 2001 - (0.52) 10.05
LARGE CAP RELATIVE VALUE FUND
Year ended December 31, 2005 - (0.11) 12.37
Year ended December 31, 2004 - (0.09) 11.45
Year ended December 31, 2003 - (0.07) 10.10
Year ended December 31, 2002 - (0.06) 8.05
Year ended December 31, 2001 - (0.04) 10.21
LARGE CAP VALUE EQUITY FUND
Year ended December 31, 2005 - (0.23) 14.62
Year ended December 31, 2004 - (0.19) 14.32
Year ended December 31, 2003 - (0.17) 12.60
Year ended December 31, 2002 - (0.160** 10.39
Year ended December 31, 2001 - (0.20) 12.70
MID-CAP EQUITY FUND
Year ended December 31, 2005 - (0.06) 13.51
Year ended December 31, 2004 - (0.07) 11.87
Year ended December 31, 2003 - (0.05) 10.23
Year ended December 31, 2002 (0.01) (0.01) 7.93
Year ended December 31, 2001 (2.02) (2.02) 11.09
SMALL CAP VALUE EQUITY FUND
Year ended December 31, 2005 (2.09) (2.17) 18.24
Year ended December 31, 2004 - (0.04) 18.33
Year ended December 31, 2003 - (0.07) 14.80
Year ended December 31, 2002 - (0.06) 10.75
Year ended December 31, 2001 - (0.12) 10.94
* Total return would have been (18.70)% without the payment by affiliate.
During the fiscal year ended December 31, 2002, the International Equity
Fund was reimbursed by the Adviser for losses incurred of $5,807 due to
the sale of shares in several registered investment companies which were
inadvertently purchased in excess of the amount permitted under applicable
Securities and Exchange Commission rules.
** Includes Return of Capital of $0.0049 per share.
(a) Per share data was calculated using the average shares method.
(b) Effective January 1, 2004, the Investment Grade Bond Fund adopted a change
in the amortization and accretion methodology on fixed income securities.
The cumulative effect of this change in methodology on December 31, 2004
was to increase net investment income to average net assets from 3.40% to
3.52%; to increase net investment income per share from $0.35 to $0.36;
and, to decrease net realized and unrealized gains (losses) per share from
$0.07 to $0.06. Per share ratios and supplemental data for prior periods
have not been restated to reflect this change.
37 See Notes to Financial Statements.
Net Assets, Ratio of Ratio of Net Invest- Ratio of Expenses to Average Net Portfolio
Total End of Net Expenses to ment Income (Loss) to Assets (Excluding Waivers, Reim- Turnover
Return Year (000) Average Net Assets Average Net Assets bursements and Expense Offset) Rate
- --------- ----------- ------------------ --------------------- -------------------------------- --------
(0.90)% $46,307 1.13% 0.14% 1.22% 80%
6.75 54,862 1.15 0.19 1.43 79
18.45 59,367 1.15 (0.21) 1.50 91
(21.89) 56,718 1.15 (0.41) 1.46 67
(5.34) 86,499 1.15 (0.30) 1.44 88
12.96 5,320 1.47 1.30 4.97 57
19.35 6,243 1.60 0.74 3.89 65
37.31 6,920 1.60 0.99 3.91 75
(18.58)* 6,230 1.60 0.27 2.59 115
(17.40) 9,544 1.60 0.25 2.32 92
2.18 13,430 0.70 3.70 0.88 223
4.16 17,047 0.75 3.52 1.19 197
3.51 20,316 0.75 3.66 1.25 147
7.40 23,126 0.75 4.33 1.28 144
9.20 19,559 0.75 5.15 1.32 139
9.03 12,152 1.06 0.97 1.11 47
14.30 11,444 1.18 0.87 1.53 44
26.49 9,198 1.20 0.92 2.20 22
(20.59) 4,354 1.20 6.80 2.56 51
(5.57) 4,278 1.20 0.47 3.22 27
3.75 38,028 0.93 1.58 0.95 100
15.29 47,013 0.95 1.43 1.11 85
23.12 45,484 0.95 1.52 1.19 54
(16.98) 43,899 0.95 1.37 1.13 50
(1.14) 63,102 0.95 1.20 1.12 73
14.32 15,036 1.15 0.50 1.36 115
16.82 16,382 1.15 0.71 1.65 79
29.72 16,182 1.15 0.60 1.84 182
(28.45) 13,962 1.15 (0.32) 1.72 90
2.72 21,938 1.15 0.04 1.66 93
11.90 20,270 1.20 0.47 1.34 57
24.19 25,960 1.20 0.33 1.57 52
38.44 20,381 1.20 0.56 1.79 27
(1.20) 15,286 1.20 0.55 1.79 17
21.48 13,775 1.20 1.05 1.91 55
38
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
STI CLASSIC VARIABLE TRUST December 31, 2005
1. ORGANIZATION
The STI Classic Variable Trust (the "Trust") was organized as a
Massachusetts business trust under a Declaration of Trust dated April 18,
1995. The Trust is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company offering seven funds
as of December 31, 2005. The financial statements presented herein are
those of the Capital Appreciation Fund, the International Equity Fund, the
Investment Grade Bond Fund, the Large Cap Relative Value Fund (formerly,
Growth and Income Fund), the Large Cap Value Equity Fund (formerly, Value
Income Stock Fund), the Mid-Cap Equity Fund, and the Small Cap Value
Equity Fund (each a "Fund" and collectively the "Funds"). The Trust is
authorized to issue an unlimited number of shares without par value.
Shareholders have no preemptive rights. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which
shares are held. Sales of shares of the Funds may only be made to separate
accounts of various life insurance companies and certain qualified benefit
plans. The Funds' prospectus provides a description of each Fund's
investment objectives, policies and strategies.
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 its 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
that risk of loss to be remote.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. These policies
are in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). The preparation of the financial
statements in accordance with GAAP requires management to make estimates
and assumptions that affect the reported amount 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 -- Securities listed on a securities exchange,
market or automated quotation system for which quotations are
readily available (except for securities traded on NASDAQ),
including securities traded over the counter, are valued at the last
quoted sale price on the primary exchange or market (foreign or
domestic) on which they are traded on valuation date (or at
approximately 4:00 p.m. Eastern Time if a security's primary
exchange is normally open at that time), or, if there is no such
reported sale on the valuation date, at the most recent quoted bid
price. For securities traded on NASDAQ, the NASDAQ Official Closing
Price will be used. If available, debt securities are priced based
upon valuations provided by independent, third-party pricing agents.
Such values generally reflect the last reported sale price if the
security is actively traded. The third-party pricing agents may also
value debt securities at an evaluated bid price by employing
methodologies that utilize actual market transactions,
broker-supplied valuations, or other methodologies designed to
identify the market value for such securities. Debt obligations with
remaining maturities of sixty days or less may be valued at their
amortized cost, which approximates market value. The prices for
foreign securities are reported in local currency and converted to
U.S. dollars at the exchange rate of such currencies against the
U.S. dollar, as of the close of regular trading on the New York
Stock Exchange (usually 4:00 p.m. Eastern Time), as provided by an
independent pricing service approved by the Funds' Board of Trustees
(the "Board"). If a security price cannot be obtained from an
independent, third-party pricing agent, the Funds' accounting agent
shall seek to obtain a bid price from at least one independent
broker.
Securities for which market prices are not "readily available" are
valued in accordance with Fair Value Procedures established by the
Board. The Funds' Fair Value Procedures are performed and monitored
by a Fair Value Committee (the "Committee") designated by the Board.
Some of the more common reasons that may necessitate that a security
be valued using Fair Value Procedures include, but are not limited
to: the security's trading has been halted or suspended; the
security has been de-listed from a national exchange; the security's
primary trading market is temporarily closed at
39
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
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 determines the value after taking into
consideration relevant information reasonably available to the
Committee.
For securities that principally trade on a foreign market or
exchange, a significant gap in time can exist between the time of a
particular security's last trade and the time at which a Fund
calculates its net asset value. The closing prices of such
securities may no longer reflect their market value at the time the
Fund calculates net asset value if an event that could materially
affect the value of those securities (a "Significant Event") has
occurred between the time of the security's last close and the time
that the Fund calculates net asset value. A Significant Event may
relate to a single issuer or to an entire market sector. If the
adviser of a Fund becomes aware of a Significant Event that has
occurred with respect to a security or group of securities after the
closing of the exchange or market on which the security or
securities principally trade, but before the time at which the Fund
calculates net asset value, it shall immediately notify the Funds'
accounting agent and may preauthorize the Funds' accounting agent to
utilize a pricing service authorized by the Board (a "Fair Value
Pricing Service") that has been designed to determine a fair value.
On a day when a Fair Value Pricing Service is so utilized pursuant
to a preauthorization, the Committee need not meet. If the adviser
does not preauthorize the Funds' accounting agent to utilize a Fair
Value Pricing Service, the adviser will request that a Committee
meeting be called. In addition, the Funds' accounting agent monitors
price movements among certain selected indices, securities and/or
baskets of securities that may be an indicator that the closing
prices received earlier from foreign exchanges or markets may not
reflect market value at the time the Fund calculates net asset
value. If price movements in a monitored index exceed levels
established by the Funds ("Trigger Points"), the Funds may use a
systematic valuation model provided by an independent third party to
fair value their international equity securities.
Security Transactions and Investment Income -- Security 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.
Forward Foreign Currency Contracts -- The International Equity Fund
may enter into forward foreign currency contracts as hedges against
either specific transactions, fund positions or anticipated fund
positions. All commitments are "marked-to-market" daily at the
applicable foreign exchange rate, and any resulting unrealized gains
or losses are recorded currently. The Fund realizes gains and losses
at the time forward contracts are extinguished. Unrealized gains or
losses on outstanding positions in forward foreign currency
contracts held at the close of the year are recognized as ordinary
income or loss for Federal income tax purposes. As of December 31,
2005, there were no open forward foreign currency contracts.
Foreign Currency Translation -- The books and records of the
International Equity Fund are maintained in U.S. dollars on the
following basis: (i) market value of investment securities, other
assets and liabilities at the current rate of exchange; and (ii)
purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Equity Fund does not isolate the portion of
operations resulting from changes in foreign exchange rates on
investments from fluctuations arising from changes in market prices
of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments and foreign
currencies.
Expenses -- Expenses that are directly related to a specific Fund
are charged to that Fund. Other operating expenses of the Trust are
pro-rated to the Funds on the basis of relative net assets or
another appropriate basis.
Dividends and Distributions to Shareholders -- Dividends and
distributions to shareholders are recorded on the ex-dividend date.
Dividends from net investment income, if any, are declared and paid
each calendar quarter for all Funds except for the International
Equity Fund, which distributes income annually, and the Investment
Grade Bond
40
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
Fund, which distributes daily and pays monthly. Any net realized
capital gains on sales of securities are distributed to shareholders
at least annually. However, to the extent that net realized capital
gains can be offset by capital loss carryovers, such gains will not
be distributed.
The amounts of dividends from net investment income and of
distributions from net realized gains are determined in accordance
with federal income tax regulations, which may differ from GAAP.
These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent
in nature (i.e. foreign currency transactions), such amounts are
reclassified within the composition of net assets based on their
federal tax-basis treatment; temporary differences do not require
reclassification.
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, 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
SunTrust Bank on the following business day. This does not apply to
the International Equity Fund.
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory Agreement -- The Trust and Trusco Capital Management,
Inc. (the "Investment Adviser"), a wholly owned subsidiary of SunTrust
Banks, Inc., have entered into advisory agreements.
Under revised terms of the agreements dated August 1, 2005, the Funds are
charged the following annual fees which are computed daily and paid
monthly based upon average daily net assets. Net fees paid for the period
August 1, 2005 through December 31, 2005 were as follows:
Maximum Annual Net Annual
Advisory Fee Fees Paid
-------------- ----------
Capital Appreciation Fund ................ 0.97% 0.96%
International Equity Fund ................ 1.15 -
Investment Grade Bond Fund ............... 0.50 0.40
Large Cap Relative Value Fund ............ 0.85 0.74
Large Cap Value Equity Fund .............. 0.80 0.78
Mid-Cap Equity Fund ...................... 1.00 0.85
Small Cap Value Equity Fund .............. 1.15 0.99
Breakpoints are used in computing the advisory fee. The full fee is
charged on average daily net assets of each Fund up to $500 million, a
discount of 5% on the next $500 million and a discount of 10% over $1
billion.
Prior to August 1, 2005, the Funds charged the following annual fees which
were computed daily and paid monthly based upon average daily net assets.
Net fees paid for the period January 1, 2005 through July 31, 2005 were as
follows:
Maximum Annual Net Annual
Advisory Fee Fees Paid
-------------- ----------
Capital Appreciation Fund ................ 1.15% 1.01%
International Equity Fund ................ 1.25 -
Investment Grade Bond Fund ............... 0.74 0.50
Large Cap Relative Value Fund ............ 0.90 0.90
Large Cap Value Equity Fund .............. 0.80 0.78
Mid-Cap Equity Fund ...................... 1.15 0.90
Small Cap Value Equity Fund .............. 1.15 1.03
41
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
The Investment Adviser has contractually agreed, until August 1, 2007, to
waive fees, and/or reimburse each Fund to the extent necessary to maintain
each Fund's Total Operating Expenses as noted below:
Total Operating
Expense
---------------
Capital Appreciation Fund ................ 1.12%
International Equity Fund ................ 1.30
Investment Grade Bond Fund ............... 0.65
Large Cap Relative Value Fund ............ 1.00
Large Cap Value Equity Fund .............. 0.95
Mid-Cap Equity Fund ...................... 1.15
Small Cap Value Equity Fund .............. 1.20
Administration, Fund Accounting and Transfer Agency Agreement -- The Trust
and BISYS Fund Services Ohio, Inc. (the "Administrator") are parties to a
Master Services Agreement, under which the Administrator provides
administrative, fund accounting, and transfer agent services for an annual
fee (expressed as a percentage of the combined average daily net assets of
the Trust and STI Classic Funds) of: 0.0275% up to $25 billion, 0.0225% on
the next $5 billion and 0.0175% for over $30 billion plus an additional
class fee of $2,593 per class annum, applicable to each additional class
of shares over 145 classes of shares.
Per the Master Services Agreement, the Administrator has agreed to pay a
total of $325,000 per annum towards the insurance premiums payable
annually by the Trust and the STI Classic Funds. $300,000 will be paid
towards the premium for the Directors and Officers Liability/Errors and
Omissions Insurance Policy, and $25,000 will be paid towards the premium
for the Fidelity Bond Policy.
Distribution Services Agreement -- The Trust and BISYS Fund Services
Limited Partnership (the "Distributor") are parties to a Distribution
Services Agreement. The Distributor will receive no fees for its
distribution services under this agreement.
Custodian Agreements -- SunTrust Bank acts as Custodian for all the Funds
except the International Equity Fund, which has appointed Brown Brothers
Harriman & Co. as Custodian. Custodians are paid on the basis of the net
assets and transaction costs of the Funds. The Custodians play no role in
determining the investment policies of the Trust or which securities are
to be purchased or sold in the Funds.
Other -- Certain officers of the Trust are also officers of the Adviser,
Administrator, and/or the Distributor. Such officers receive no fees from
the Trust for serving as officers of the Trust. Each of the nine trustees
are compensated $64,000 annually ($576,000 total) and the Chairman of the
Board receives $80,000 annually in regular meeting and retainer fees, plus
the reimbursement for certain expenses incurred. For attendance at a
special meeting, the Chairman receives $3,750 and each trustee receives
$3,000. Several trustees are also members of the Audit Committee and/ or
the Governance and Nominating Committee. Each trustee that is a member of
one of these committees receives a fee of $2,500 per meeting attended and
the Chairman of each committee receives $4,500. Trusco Capital Management,
Inc. provides an employee to serve as Chief Compliance Officer for the
Trust and provide certain related services, and receives an annual fee for
this service of $120,000. In addition, the Administrator provides an
employee and staff to assist the Chief Compliance Officer for the Trust,
including providing certain related services, and will receive a fee for
these services of $150,000. The fees above are allocated across the assets
of the Trust and the STI Classic Funds. For the year ended December 31,
2005, the total related amounts paid by the Trust were $4,795.
The Trust has entered into an agreement with SunTrust Robinson Humphrey, a
division of SunTrust Capital Markets, Inc. which is a direct non-bank
subsidiary of SunTrust Banks, Inc., to act as an agent in placing
repurchase agreements for the Trust. For the year ended December 31, 2005,
the Investment Grade Bond Fund paid SunTrust Robinson Humphrey fees
totalling $82, through a reduction in the yield earned by the Fund on
those repurchase agreements.
42
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
4. INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales and maturities of
securities, excluding short-term investments and U.S. Government
securities, for the year ended December 31, 2005, were as follows (in
thousands):
Sales and
Purchases Maturities
--------- ----------
Capital Appreciation Fund ................ $39,181 $46,279
International Equity Fund ................ 3,022 4,601
Investment Grade Bond Fund ............... 32,030 35,067
Large Cap Relative Value Fund ............ 5,403 5,613
Large Cap Value Equity Fund .............. 40,858 49,344
Mid-Cap Equity Fund ...................... 17,366 20,823
Small Cap Value Equity Fund .............. 14,470 22,189
The cost of purchases and proceeds from sales and maturities of long-term
U.S. Government securities for the Investment Grade Bond Fund during the
year ended December 31, 2005, in thousands, was $27,937 and $30,267,
respectively.
5. FEDERAL TAX POLICIES AND INFORMATION
It is the policy of each Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies as defined in applicable sections of the Internal
Revenue Code, and to make distributions from net investment income and
from net realized gains sufficient to relieve it from all, or
substantially all, federal income taxes. Withholding taxes on foreign
dividends have been paid or provided for in accordance with applicable
country's tax rules and rates.
At December 31, 2005, the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes were
different from amounts reported for financial reporting purposes generally
due to wash sales which cannot be used for Federal income tax purposes in
the current year and have been deferred for use in future years. The
Federal tax cost and aggregate gross unrealized appreciation and
depreciation for securities held by the Funds at December 31, 2005, are
presented on each Fund's Schedule of Portfolio Investments.
The tax character of distributions paid to shareholders during the fiscal
year ended December 31, 2005 was as follows (in thousands):
Distributions paid from
----------------------------------------
Net Total
Investment Net Long Term Distributions
Income Capital Gains Paid*
---------- ------------- -------------
Capital Appreciation Fund ................ $ 68 $ - $ 68
International Equity Fund ................ 133 - 133
Investment Grade Bond Fund ............... 592 - 592
Large Cap Relative Value Fund ............ 110 - 110
Large Cap Value Equity Fund .............. 662 - 662
Mid-Cap Equity Fund ...................... 68 - 68
Small Cap Value Equity Fund .............. 591 2,543 3,134
43
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
The tax character of distributions paid to shareholders during the fiscal
year ended December 31, 2004 was as follows (in thousands):
Distribution Paid from
-----------------------------
Net Investment Net Long Term Total Distributions
Income Capital Gains Paid*
-------------- ------------- -------------------
Capital Appreciation Fund ................ $102 - $102
International Equity Fund ................ 105 - 105
Investment Grade Bond Fund ............... 640 - 640
Large Cap Relative Value Fund ............ 90 - 90
Large Cap Value Equity Fund .............. 646 - 646
Mid-Cap Equity Fund ...................... 107 - 107
Small Cap Value Equity Fund .............. 60 - 60
*Total distributions paid may differ from the Statement of Changes in Net Assets
because for tax purposes dividends are recognized when paid.
As of December 31, 2005 the components of accumulated earnings (deficit)
on a tax basis were as follows (in thousands):
Accumulated Total
Undistributed Undistributed Capital and Unrealized Accumulated
Ordinary Long Term Accumulated Distributions Other Appreciation Earnings
Income Capital Gains Earnings Payable Losses** (Depreciation)*** (Deficit)
------------- ------------- ----------- ------------- ----------- ----------------- ----------
Capital Appreciation Fund $531 $1,897 $2,428 $ - $ - $4,282 $ 6,710
International Equity Fund 3 - 3 - (1,981) 1,370 (608)
Investment Grade Bond Fund - - - - (291) (6) (297)
Large Cap Relative Value Fund 3 878 881 - - 1,701 2,582
Large Cap Value Equity Fund - - - - (7,234) 3,237 (3,997)
Mid-Cap Equity Fund 15 1,013 1,028 - - 1,921 2,949
Small Cap Value Equity Fund 686 4,378 5,064 - - 5,488 10,552
** As of the latest tax year end of December 31, 2005, the following Funds
had net capital loss carryovers to offset future net capital gains, if
any, to the extent provided by the Treasury regulations (in thousands). To
the extent that these carryovers are used to offset future gains, it is
probable that the gains so offset will not be distributed to shareholders.
Expires
-----------------------------
2008 2009 2010 2011
------ ---- ------ ------
International Equity Fund $ - $14 $1,470 $ 497
Investment Grade Bond Fund - 29 189 -
Large Cap Value Equity Fund 1,755 - 3,047 2,432
During the year ended December 31, 2005, the Capital Appreciation
Fund, International Equity Fund, Investment Grade Bond Fund, Large
Cap Relative Value Fund, Large Cap Value Equity Fund and Mid-Cap
Equity Fund utilized $66, $830, $66, $250, $4,554 and $2,515 in
capital loss carryforwards, respectively, in thousands.
Net capital losses incurred after October 31, and within the taxable
year are deemed to arise on the first business day of the Funds'
next taxable year. The Investment Grade Bond Fund has incurred and
will elect to defer $73, in thousands, in capital losses.
*** The differences between book-basis and tax-basis unrealized appreciation
(depreciation) is attributable primarily to: tax deferral of losses on
wash sales, the difference between book and tax amortization methods for
premium and market discount, and the return of capital adjustments from
real estate investment trusts.
Amounts designated as " -- " are either $0 or have been rounded to
$0.
44
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
6. RISKS
The International Equity Fund invests in securities of foreign issuers in
various countries. These investments may involve certain considerations
and risks not typically associated with investments in the United States
as a result of, among other factors, the possibility of future political
and economic developments and the level of governmental supervision and
regulation of securities markets in the respective countries.
The Investment Grade Bond Fund invests primarily in investment grade
obligations rated at least BBB or better by S&P or Baa or better by
Moody's. Changes by recognized rating agencies in the ratings of any fixed
income security or in the ability of an issuer to make payments of
interest and principal may affect the value of these investments.
7. SECURITIES LENDING
Each Fund may lend portfolio securities to brokers, dealers and other
financial organizations that meet capital and other credit requirements or
other criteria established by the Trust's Board. These loans may not
exceed either (i) 50% of the sum of the market value of all securities of
the Fund and the market value of the loan collateral or (ii) 33.33% of the
total market value of all securities of the Fund. No Fund will lend
portfolio securities to its investment adviser or its affiliates unless it
has applied for and received specific authority to do so from the
Securities and Exchange Commission. Loans of portfolio securities will be
fully collateralized by cash. The value of the collateral, is at least
100% of the market value of the securities loaned, or in the case of the
Investment Grade Bond Fund, the initial value of the collateral is at
least 102% of the market value of the securities loaned and 100%
thereafter. However, due to market fluctuations during the day, the value
of securities loaned on a particular day may, during the course of the
day, exceed the value of collateral. On each business day, the amount of
collateral is adjusted based on the prior day's market fluctuations and
the current day's lending activity. Income from lending activity is
determined by the amount of interest earned on collateral, less any
amounts payable to the borrowers of the securities and the lending agent.
Lending securities involves certain risks, including the risk that the
Fund may be delayed or prevented from recovering the collateral if the
borrower fails to return the securities.
Cash collateral received in connection with securities lending is invested
in the CSFB Enhanced Liquidity Portfolio (the "Portfolio"). This
investment consists of money market instruments including money market
mutual funds registered under the Investment Company Act of 1940,
commercial paper, repurchase agreements, U.S. Treasury Bills and U.S.
agency obligations. At December 31, 2005, the Portfolio was invested in
money market mutual funds, certificates of deposit, commercial paper,
repurchase agreements, U.S. agency obligations and corporate bonds (with
interest rates ranging from 4.12% to 4.65% and maturity dates ranging from
01/03/06 to 11/25/15).
The Funds paid fees for security lending for the year ended December 31,
2005, which have been netted against the Security Lending Income on the
Statements of Operations. These fees are presented below:
Fees
------
Capital Appreciation Fund .................... $1,136
International Equity Fund .................... 56
Investment Grade Bond Fund ................... 4,112
Large Cap Relative Value Fund ................ 202
Large Cap Value Equity Fund .................. 603
Mid-Cap Equity Fund .......................... 1,953
Small Cap Value Equity Fund .................. 692
45
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
8. OTHER FEDERAL TAX INFORMATION (UNAUDITED)
For corporate shareholders, the following percentage of the total ordinary
income distributions paid during the fiscal year ended December 31, 2005
qualify for the corporate dividends received deductions for the following
Funds:
Dividend Received
Deduction
-----------------
Capital Appreciation Fund .................... 100%
Large Cap Relative Value Fund ................ 100%
Large Cap Value Equity Fund .................. 100%
Mid-Cap Equity Fund .......................... 100%
Small Cap Value Equity Fund .................. 59%
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
STI CLASSIC VARIABLE TRUST December 31, 2005
To the Shareholders and Board of Trustees of
STI Classic Variable Trust
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of portfolio 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 Capital Appreciation Fund, International Equity Fund,
Investment Grade Bond Fund, Large Cap Relative Value Fund (formerly,
Growth and Income Fund), Large Cap Value Equity Fund (formerly, Value
Income Stock Fund), Mid-Cap Equity Fund, and Small Cap Value Equity Fund
(constituting STI Classic Variable Trust, hereafter referred to as the
"Trust") at December 31, 2005, the results of each of their operations for
the year then ended, the changes in each of their net assets for each of
the two years in the period then ended and the financial highlights for
each of the four years in the period then ended, 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 Trust's
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 December 31, 2005
by correspondence with the custodians, provide a reasonable basis for our
opinion. The financial highlights for the year ended December 31, 2001
were audited by other independent accountants who have ceased operations.
Those independent accountants expressed an unqualified opinion on those
financial statements in their report dated February 7, 2002.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 17, 2006
47
TRUSTEES AND OFFICERS OF THE STI CLASSIC VARIABLE TRUST
STI CLASSIC VARIABLE TRUST December 31, 2005
(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 Trustees." Trustees who are deemed to
be "interested persons" of the Trust are referred to as "Interested Trustees."
Messrs. Courts and Ridley are trustees who may be deemed to be "interested
persons" of the Trust.
NUMBER OF
TERM OF PRINCIPAL PORTFOLIOS IN THE
POSITION(s) OFFICE AND OCCUPATION(s) STI FUND COMPLEX OTHER
NAME, ADDRESS, HELD WITH LENGTH OF DURING THE OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH THE GROUP TIME SERVED PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
- -------------------- ------------ ------------- ----------------------------- ----------------- ---------------------------------
INTERESTED TRUSTEES*:
Cousins Properties, Inc.;
Genuine Parts Company;
Richard W. Courts, II Indefinite; Piedmont Medical Center;
3435 Stelzer Road since SunTrust Bank; Courts
Columbus, OH 43219 November Chairman, Atlantic Foundation; J. Bulow Campbell
DOB 01/18/36 Trustee 2001 Investment Company 59 Foundation
Clarence H. Ridley Indefinite; Chairman, Haverty Furniture
3435 Stelzer Road since Companies; Partner, King
Columbus, OH 43219 November and Spaulding LLP (law firm)
DOB 06/03/42 Trustee 2001 (1977 to 2000) 59 Crawford & Co.
INDEPENDENT TRUSTEES:
Thomas Gallagher NAPA; Genuine Parts
3435 Stelzer Road Indefinite; Company; Stone Mountain
Columbus, OH 43219 since May President, CEO, Genuine Parts Industrial Park; The Lovett
DOB 11/25/47 Trustee 2000 Company 59 School; Oxford Industries, Inc.
F. Wendell Gooch
3435 Stelzer Road Indefinite;
Columbus, OH 43219 since May
DOB 12/03/32 Trustee 1992 Retired SEI Family of Funds
59
Professor (since 2004) and
Sidney E. Harris Indefinite; Dean (1997-2004), ServiceMaster Company;
3435 Stelzer Road since J. Mack Robinson College Total System Services, Inc.;
Columbus, OH 43219 November of Business, Georgia State Transamerica Investors, Inc.
DOB 07/21/49 Trustee 2004 University 59 (13 Mutual Funds)
Warren Y. Jobe Indefinite; Retired. EVP, Georgia Power
3435 Stelzer Road since Company and
Columbus, OH 43219 November SVP, Southern Company WellPoint, Inc.; UniSource
DOB 11/12/40 Trustee 2004 (1998-2001) 59 Energy Corp.; HomeBanc Corp.
Connie D. McDaniel
3435 Stelzer Road Indefinite;
Columbus, OH 43219 since May Vice President and Controller,
DOB 04/10/58 Trustee 2005 The Coca-Cola Company None
59
Cox Communications; Cox
Enterprises; National Cable
and Telecommunications
James O. Robbins Association; Discovery Channel;
3435 Stelzer Road Indefinite; Retired. President, CEO, Cable Labs; C-SPAN; Humana,
Columbus, OH 43219 since Cox Communications, Inc. 59 Inc.; Bessemer Securities Corp.;
DOB 07/04/42 Trustee May 2000 (1985-2005) St. Paul's School
Charles D. Winslow Indefinite;
3435 Stelzer Road since
Columbus, OH 43219 November Retired. Formerly Partner,
DOB 07/13/35 Trustee 2004 Accenture (consulting) 59 None
- ----------
* 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.
48
TRUSTEES AND OFFICERS OF THE STI CLASSIC VARIABLE TRUST (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
(Unaudited)
POSITION(s) TERM OF
NAME, ADDRESS, HELD WITH OFFICE AND LENGTH PRINCIPAL OCCUPATION(s)
DATE OF BIRTH THE GROUP OF TIME SERVED DURING THE PAST 5 YEARS
- -------------------- ------------------ --------------------- ----------------------------------------------------------
OFFICERS:
R. Jeffrey Young
3435 Stelzer Road Senior Vice President, Relationship Management, BISYS
Columbus, OH 43219 One-year; Fund Services (since 2002); Vice President, Client
DOB 08/22/64 President since July 2004 Services, BISYS Fund Services; (1997-2002)
Executive One-year; Chief Complaince Officer and Executive Vice President,
Deborah A. Lamb Vice President, since September 2004; STI Classic Funds and Variable Trust (2004-present);
50 Hurt Plaza Assistant since November 2003; Managing Director, Trusco Capital Management, Inc. (since
Atlanta, GA 30303 Secretary; Chief since August 2004 2003); President, Investment Industry Consultants, LLC
DOB 10/02/52 Compliance Officer (respectively) (since 2000); Director of Compliance, INVESCO, Inc.
(1995-2000)
David L. Hughes
3435 Stelzer Road Treasurer, Chief Vice President, Fund Administration, BISYS Fund Services
Columbus, OH 43219 Financial One-year; (since 2005); Assistant Vice President, Evergreen
DOB 01/25/63 Officer since May 2005 Investments (2000-2004); Fund Accounting Manager,
Fidelity Investments (1998-2000)
Cynthia J. Surprise
3435 Stelzer Road Senior Counsel, Legal Services, BISYS Fund Services
Columbus, OH 43219 Secretary and One-year; (since 2004); Director and Counsel, Investors Bank &
DOB 07/08/46 Chief Legal Officer since February 2005 Trust Company (1999-2004)
Alaina V. Metz
3435 Stelzer Road Vice President, Blue Sky Compliance, BISYS Fund Services
Columbus, OH 43219 Assistant One-year; (since 2002); Chief Administrative Officer, Blue Sky
DOB 04/07/67 Secretary Since July 2004 Compliance, BISYS Fund Services (1995-2002)
Jennifer English
3435 Stelzer Road Assistant Counsel, Legal Services, BISYS Fund Services
Columbus, OH 43219 Assistant One-year; (since 2005); Assistant Counsel, PFPC, Inc. (2002-2005);
DOB 03/05/72 Secretary Since November 2005 Associate Legal Product Manager, Fidelity Investments
(2001)
The Trust's Statement of Additional Information includes additional information
about the Trust's trustees and officers. To request your free copy of the
Statement of Additional Information, call toll free 1-888-STI-FUND.
49
ADDITIONAL INFORMATION
STI CLASSIC VARIABLE TRUST December 31, 2005
(Unaudited)
EXPENSE EXAMPLES
As a Fund shareholder, you incur two types of costs: (1) transaction
costs, and (2) ongoing costs, including management fees and other fund
expenses. These examples are intended to help you understand your ongoing
costs (in dollars) of investing in a Fund and to compare these costs with
the ongoing costs of investing in other mutual funds. Please note that
separate account and contract expenses, fees and charges are not
reflected.
These examples are based on an investment of $1,000 invested at the
beginning of the period and held for the entire period from July 1, 2005
through December 31, 2005.
Actual Expenses
The table below provides information about 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.
Expense Ratio
Beginning Ending Account Expense Paid During During Period**
Account Value Value Period* 07/01/05
07/01/05 12/31/05 07/01/05 - 12/31/05 12/31/05
------------- -------------- ------------------- ---------------
Capital Appreciation Fund .................... $1,000.00 $1,037.90 $5.70 1.11%
International Equity Fund .................... 1,000.00 1,155.70 7.34 1.35
Investment Grade Bond Fund ................... 1,000.00 995.70 3.27 0.65
Large Cap Relative Value Fund ................ 1,000.00 1,060.80 5.04 0.97
Large Cap Value Equity Fund .................. 1,000.00 1,044.70 4.79 0.93
Mid-Cap Equity Fund .......................... 1,000.00 1,074.90 6.01 1.15
Small Cap Value Equity Fund .................. 1,000.00 1,127.30 6.43 1.20
* 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.
50
ADDITIONAL INFORMATION (continued)
STI CLASSIC VARIABLE TRUST December 31, 2005
(Unaudited)
Hypothetical Example
The table below provides information about hypothetical account values and
hypothetical expenses based on a Fund's 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.
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.
Expense Paid
Beginning Ending Account During Period* Expense Ratio
Account Value Value 07/01/05 - During Period**
07/01/05 12/31/05 12/31/05 07/01/05 - 12/31/05
------------- -------------- -------------- -------------------
Capital Appreciation Fund .................... $1,000.00 $1,019.61 $5.65 1.11%
International Equity Fund .................... 1,000.00 1,018.40 6.87 1.35
Investment Grade Bond Fund ................... 1,000.00 1,021.93 3.31 0.65
Large Cap Relative Value Fund ................ 1,000.00 1,020.32 4.94 0.97
Large Cap Value Equity Fund .................. 1,000.00 1,020.52 4.74 0.93
Mid-Cap Equity Fund .......................... 1,000.00 1,019.41 5.85 1.15
Small Cap Value Equity Fund .................. 1,000.00 1,019.16 6.11 1.20
* 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.
PROXY VOTING
Information regarding the policies and procedures that the Funds use to
determine how to vote proxies relating to portfolio securities is
available without charge, upon request, by calling 1-888-STI-FUND. The
information also is included in the Funds' Statement of Additional
Information, which is available on the Funds' website at
www.sticlassicfunds.com and on the Securities and Exchange Commission's
website at www.sec.gov.
Information relating to how each Fund voted proxies relating to portfolio
securities held during the most recent twelve months ended June 30 is
available on the Funds' website at www.sticlassicfunds.com and on the
Securities and Exchange Commission's website at www.sec.gov.
PORTFOLIO HOLDINGS INFORMATION
The Funds file a complete list of their portfolio holdings with the
Securities and Exchange Commission for the first and third quarters of
each fiscal year on Form N-Q. Forms N-Q are available free of charge on
the Securities and Exchange Commission's website at www.sec.gov. You may
also review or, for a fee, copy those documents by visiting the Securities
and Exchange Commission's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained
by calling the Securities and Exchange Commission at 1-800-SEC-0330.
51
INVESTMENT ADVISER:
Trusco Capital Management, Inc.
This information must be preceded or accompanied
by a current prospectus for each Fund described. An
investor should consider the Fund's investment
objectives, risks, charges and expenses carefully
before investing or sending money. This and other
important information about STI Classic Variable Trust
can be found in the Fund's prospectus. For additional
information please call 1-888-STI-FUND, or visit
www.sticlassicfunds.com. Please read the prospectus
carefully before investing.
DISTRIBUTOR:
BISYS Fund Services Limited Partnership
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
[STI CLASSIC VARIABLE TRUST LOGO]
STI-AR-VT-1205
2/06
ITEM 2. CODE OF ETHICS.
(a) 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 an Exhibit.
(b) 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.
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.
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 Trust'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 were as follows:
CURRENT YEAR PREVIOUS YEAR
------------ -------------
(a) Audit Fees $100,200 $94,500
(b) Audit-Related Fees $ 11,100 (1) $10,500 (1)
(1) Services related to security count examinations under Rule 17f-2
of the Investment Company Act.
(c) Tax Fees $0 $0
(d) All Other Fees $0 $0
e(1) Except as permitted by Rule 2-01(c)(7)(i)(C) 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.
e(2) None of the services summarized in (b)-(d), above, were approved by the
Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.
(f) Not applicable.
(g)
CURRENT YEAR PREVIOUS YEAR
------------ -------------
$3,790,463 (1) $3,208,119 (1)
(1) Non-audit services relate principally to certain technical
accounting advice on financial products of the Bank; Sarbanes-Oxley 404
implementation; review of certain registration statements and
regulatory filings; issuance of comfort letters; and, tax compliance
services to other entities controlled by SunTrust Banks, Inc.
(h) In regards to Item 4 (g), The audit committee has considered that the
provision of non-audit services that were 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 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.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a)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 recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b)There were no changes 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 have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) THE CODE OF ETHICS THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY
ITEM 2 IS ATTACHED HERETO.
(a)(2) CERTIFICATIONS PURSUANT TO RULE 30A-2(A) ARE ATTACHED HERETO.
(a)(3) NOT APPLICABLE.
(b) CERTIFICATIONS PURSUANT TO RULE 30A-2(B) ARE FURNISHED HEREWITH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) STI Classic Variable Trust
------------------------------------------------------------------
By (Signature and Title)* /s/ David Hughes
-----------------------------------------------------
Date March 7, 2006
------------------
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
Date March 7, 2006
---------------------
By (Signature and Title)* /s/ David Hughes Treasurer
----------------------------------------------------
David Hughes
Date March 7, 2006
------------------
* Print the name and title of each signing officer under his or her signature.