UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09032
STI Classic Variable Trust
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(Exact name of registrant as specified in charter)
101 Federal Street Boston, Massachusetts 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
Date of fiscal year end: 12/31
Date of reporting period: 06/30/06
ITEM 1. REPORTS TO STOCKHOLDERS.
2006 SEMI-ANNUAL REPORT
STI CLASSIC VARIABLE TRUST
(STI CLASSIC VARIABLE TRUST LOGO)
June 30, 2006
TABLE OF CONTENTS
STI CLASSIC VARIABLE TRUST June 30, 2006
Letter to Shareholders..................................................... 1
Industry Allocation........................................................ 3
Schedules of Portfolio Investments......................................... 6
Statements of Assets and Liabilities....................................... 22
Statements of Operations................................................... 23
Statements of Changes in Net Assets........................................ 24
Financial Highlights....................................................... 27
Notes to Financial Statements.............................................. 30
Trustees and Officers of the STI Classic Variable Trust.................... 37
Additional Information..................................................... 39
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
The following information and opinions are for general information only. STI
Classic Variable Trust and Trusco Capital Management, Inc. 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.
LETTER TO SHAREHOLDERS
STI CLASSIC VARIABLE TRUST June 30, 2006
Dear STI Classic Variable Trust Shareholders,
We are halfway through 2006, and we would like to take this time to report on
our activities in the STI Classic Variable Trust and provide some of our
thoughts on the future course of the economy and the markets this year. Before
doing that, we wish 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 strive to earn your business every day.
The economy and markets entered a new phase in the first half of 2006 that is
likely to dominate for much of the year. We began with an economic
rebound/recovery following the hurricane related devastation that stifled fourth
quarter growth. Production, investment, and employment all improved, earnings
growth remained strong, and the equity markets moved higher. But, in the second
quarter, the burst from the economic rebound began to fade, inflation pressures
continued to build, a global chorus of anti-inflation rhetoric grew louder,
energy prices resumed their upward march, geopolitical tensions escalated, and
stock prices began to slide under the weight of slowing momentum and rising
restraint. We characterize the current economic expansion as being at an
inflection point between above-average growth and below-average growth, which we
believe will continue to cause investors to reassess earnings assumptions and
risks.
Like the economy, the equity markets advanced early in 2006 but retreated in the
second quarter as the pressures and risks mentioned earlier intensified. The S&P
500 generated a modest 2.7% on a total return basis for the entire six months
ending June 30, but that calendar assessment tends to hide early strength and
subsequent weakness of the index. The S&P 500 rose 6.9% through early May, but
then lost over 6% by mid-June as interest rate fears intensified and economic
momentum ebbed, particularly in the housing market. Sector performance during
the correction had a more defensive tone, with relative outperformance by
Utilities, Healthcare, and Consumer Staples stocks. Small Cap stocks, as
measured by the Russell 2000, outperformed the Large Cap S&P 500 in the first
half of the year on a point-to-point basis, but Small Caps experienced a more
severe correction during May and June, losing nearly 13%. International stocks,
as measured by the MSCI EAFE, also declined sharply in the correction but
generated a 10.2% return through the first half.
Bond yields trended higher in the first half of the year, with the yield on the
10-year Treasury note rising nearly three-quarter's of 1% to 5.14% by the end of
June. Not surprisingly, the Lehman U.S. Aggregate Index lost 0.7% in the first
half. The Treasury sector bore the brunt of the sell-off in the first quarter,
but performed relatively well as the economy showed evidence of slowing and
risks intensified. TIPS (Treasury Inflation Protection Securities) in particular
benefited from a shift to both quality and inflation protection. The High Yield
(noninvestment grade bonds) market generally fared well in the first half of
the year, reflecting the persistent growth in the economy and ample available
credit.
Our outlook is more cautious for the remainder of the year, as we thought it
would be going into 2006, but we are not necessarily pessimistic on the
prospects for the economy or the equity markets. We believe a period of
below-average economic growth is likely given the length of the current
expansion, the fading of previous stimulus, and the increasing restraint from
higher interest rates, a flat yield curve, and record oil prices. However, we
continue to think that the odds of an outright recession, while admittedly
higher, are still fairly low. Excesses, such as inflated inventories, are
largely absent, credit remains accessible based on current spreads, and the Fed
appears to be near the end of its current tightening phase. Core inflation is
likely to move moderately higher and be a source of near-term concern but we do
not look for a further significant rise.
1
In this projected environment, we believe corporate balance sheet quality and
earnings sustainability should be rewarded. This more discriminating climate
meshes very well with Trusco's quality oriented investing approaches for both
stocks and bonds, and we are confident that our fundamental, company-specific
research combined with our focus on quality can add value to our client
portfolios.
We would like to close this letter as we began it, with a note of thanks to you
our valued clients. Investing is our passion at Trusco Capital Management, and
we work diligently to provide superior portfolio management as well as the
highest level of client service.
Sincerely,
/s/ David H. Eidson /s/ Robert J. Rhodes
- ------------------------------------- ----------------------------------------
David H. Eidson, Robert J. Rhodes, CFA
Chairman and CEO Executive Vice President
2
INDUSTRY ALLOCATION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
CAPITAL APPRECIATION FUND
Information Technology 19.3%
Financials 17.1%
Consumer Discretionary 16.6%
Industrials 14.7%
Health Care 13.8%
Short-Term Investment 6.7%
Energy 6.3%
Consumer Staples 3.4%
Telecommunications Services 2.1%
INTERNATIONAL EQUITY FUND
Financials 28.8%
Industrials 11.1%
Consumer Discretionary 10.8%
Materials 9.3%
Energy 7.8%
Health Care 7.5%
Telecommunication Services 5.9%
Information Technology 5.5%
Consumer Staples 4.8%
Utilities 4.7%
Short-Term Investment 3.8%
INVESTMENT GRADE BOND FUND
U.S. Treasury Obligations 36.2%
Short-Term Investment 23.8%
Corporate Bonds 16.6%
U.S. Government Agencies 14.0%
Foreign Government Bonds 3.2%
Asset Backed Securities 2.9%
Collateralized Mortgage Obligations 2.8%
Money Market Funds 0.5%
LARGE CAP RELATIVE VALUE FUND
Financials 24.9%
Health Care 12.5%
Information Technology 11.3%
Consumer Staples 10.6%
Industrials 10.1%
Energy 9.3%
Consumer Discretionary 7.4%
Utilities 3.9%
Telecommunication Services 3.5%
Materials 3.4%
Money Market Funds 3.1%
The Industry Allocation percentages are as of June 30, 2006 and subject to
change.
3
INDUSTRY ALLOCATION (AS A PERCENTAGE OF TOTAL INVESTMENTS)
STI CLASSIC VARIABLE TRUST June 30,2006
(Unaudited)
LARGE CAP VALUE EQUITY FUND
Financials 26.1%
Industrials 16.3%
Energy 11.3%
Health Care 8.6%
Consumer Discretionary 7.4%
Consumer Staples 6.9%
Utilities 5.2%
Telecommunication Services 5.0%
Information Technology 4.2%
Materials 4.1%
Short-Term Investment 3.2%
Money Market Funds 1.7%
MID-CAP EQUITY FUND
Financials 18.7%
Consumer Discretionary 14.4%
Industrials 13.8%
Information Technology 11.7%
Energy 8.6%
Health Care 8.5%
Utilities 6.5%
Money Market Funds 5.3%
Consumer Staples 4.6%
Materials 3.6%
Short-Term Investment 3.5%
Telecommunication Services 0.8%
SMALL CAP VALUE EQUITY FUND
Industrials 28.9%
Consumer Discretionary 19.3%
Financials 14.2%
Materials 8.5%
Information Technology 7.2%
Energy 4.7%
Short-Term Investment 4.7%
Health Care 4.5%
Money Market Funds 3.1%
Consumer Staples 2.5%
Utilities 2.4%
The Industry Allocation percentages are as of June 30, 2006 and subject to
change.
4
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5
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
CAPITAL APPRECIATION FUND
Shares Value($)
--------- --------
COMMON STOCKS (99.6%)
CONSUMER DISCRETIONARY (17.7%)
Advance Auto Parts, Inc. 1,067 31
Bed Bath & Beyond, Inc. * 9,500 315
Dow Jones & Co., Inc. 9,600 336
Family Dollar Stores, Inc. 13,900 340
Home Depot, Inc. (The) 12,000 429
International Game Technology 14,200 539
Lowe's Cos., Inc. 15,000 910
Marriott International, Inc., Cl A 10,200 389
New York Times Co. (The), Cl A (b) 10,800 265
Newell Rubbermaid, Inc. 22,500 581
NIKE, Inc., Cl B 5,500 446
Time Warner, Inc. 21,600 374
TJX Cos., Inc. (The) 18,500 423
Univision Communications, Inc., Cl A * (b) 16,400 549
Walt Disney Co. (The) 12,300 369
Whirlpool Corp. 6,300 521
YUM! Brands, Inc. 12,900 648
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7,465
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CONSUMER STAPLES (3.6%)
Anheuser-Busch Cos., Inc. 9,300 424
Colgate-Palmolive Co. 7,400 444
Comcast Corp., Cl A * 9,000 295
Wal-Mart Stores, Inc. 7,500 361
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1,524
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ENERGY (6.7%)
Anadarko Petroleum Corp. 10,600 506
BJ Services Co. 9,800 365
Exxon Mobil Corp. 25,500 1,564
Noble Corp. 5,200 387
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2,822
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FINANCIALS (18.3%)
Ambac Financial Group, Inc. 5,500 446
American Express Co. 11,200 596
Capital One Financial Corp. (b) 5,300 453
Chubb Corp. (The) 21,700 1,083
Genworth Financial, Inc., Cl A 19,500 679
Goldman Sachs Group, Inc. (The) 5,100 767
JPMorgan Chase & Co. 16,000 672
Merrill Lynch & Co., Inc. 8,800 612
MGIC Investment Corp. 13,200 858
Morgan Stanley 9,600 607
SLM Corp. 11,000 582
Wells Fargo & Co. 5,000 335
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7,690
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HEALTH CARE (14.7%)
AmerisourceBergen Corp. 11,700 490
Baxter International, Inc. 29,500 1,085
Shares Value($)
--------- --------
HEALTH CARE-CONTINUED
Becton, Dickinson & Co. 14,200 869
Forest Laboratories, Inc. * 17,400 673
Health Management Associates, Inc., Cl A 24,800 489
Pfizer, Inc. 24,000 563
Quest Diagnostics, Inc. (b) 11,700 701
Schering-Plough Corp. 26,400 502
Universal Health Services, Inc., Cl B 11,200 563
Vertex Pharmaceuticals, Inc. * 6,900 253
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6,188
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INDUSTRIALS (15.7%)
Danaher Corp. 7,100 457
Emerson Electric Co. 8,100 679
General Electric Co. 22,600 745
Honeywell International, Inc. 18,100 729
Illinois Tool Works, Inc. 16,200 770
Raytheon Co. 24,800 1,105
Union Pacific Corp. 7,100 660
United Parcel Service, Inc., Cl B 9,100 749
Waste Management, Inc. 19,500 700
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6,594
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INFORMATION TECHNOLOGY (20.7%)
Analog Devices, Inc. 8,800 283
CheckFree Corp. * (b) 22,500 1,116
Cisco Systems, Inc. * 26,700 521
Comverse Technology, Inc. * 26,700 528
Global Payments, Inc. 9,400 456
International Business Machines Corp. 11,000 845
Intersil Corp., Cl A 15,800 367
LSI Logic Corp. * 28,000 251
Maxim Integrated Products, Inc. 24,200 777
Microsoft Corp. 37,200 867
Oracle Corp. * 29,700 430
Paychex, Inc. 16,600 647
QUALCOMM, Inc. 6,700 268
Symantec Corp. * 33,300 517
VeriSign, Inc. * 12,500 290
Xilinx, Inc. 23,500 532
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8,695
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TELECOMMUNICATION SERVICES (2.2%)
AT&T, Inc. (b) 25,100 700
Sprint Nextel Corp. 12,000 240
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940
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Total Common Stocks (Cost $38,481) 41,918
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SHORT-TERM INVESTMENT (7.1%)
CSFB Enhanced Liquidity Portfolio (c) 2,987,876 2,988
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Total Short-Term Investment (Cost $2,988) 2,988
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See Notes to Financial Statements.
6
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
CAPITAL APPRECIATION FUND-CONCLUDED
Shares Value($)
--------- --------
MONEY MARKET FUND (0.0%)
Federated Prime Value Obligations Fund, Cl I 1,072 1
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Total Money Market Fund (Cost $1) 1
-------
Total Investments (Cost $41,470) (a) - 106.7% 44,907
Liabilities in excess of other assets - (6.7)% (2,833)
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Net Assets - 100.0% $42,074
=======
Percentages indicated are based on net assets.
* Non-income producing security.
(a) Cost for federal income tax purposes is $41,483 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 5,162
Unrealized Depreciation (1,738)
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Unrealized Appreciation (Depreciation) $ 3,424
=======
(b) This security or a partial position of the security was on loan at June 30,
2006. The total value of securities on loan at June 30, 2006 in thousands
was $2,918.
(c) This security was purchased with cash collateral held from securi-ties
lending.
Cl - Class
See Notes to Financial Statements.
7
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INTERNATIONAL EQUITY FUND
Shares Value($)
--------- --------
FOREIGN COMMON STOCKS (93.9%)
AUSTRALIA (4.0%)
Alumina Ltd. 800 4
Australia & New Zealand Banking Group Ltd. 1,989 38
Babcock & Brown Ltd. 300 5
BHP Billiton Ltd. 200 4
CSR Ltd. 3,500 9
Downer EDI Ltd. 3,551 20
Leighton Holdings Ltd. 1,656 21
OneSteel Ltd. 1,500 5
Promina Group Ltd. 5,902 25
QBE Insurance Group Ltd. 300 5
Rinker Group Ltd. 300 4
Rio Tinto Group Ltd. (d) 555 32
St. George Bank Ltd. 521 11
Westpac Banking Corp. 1,604 28
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211
-------
BELGIUM (0.5%)
Fortis 716 24
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DENMARK (0.5%)
Danske Bank A/S 682 26
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FINLAND (1.5%)
Fortum Corp. 1,040 27
Nokia Corp., Cl A 2,605 53
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80
-------
FRANCE (10.8%)
Air France-KLM 500 12
Atos Origin SA * 237 16
AXA 1,421 47
BNP Paribas 732 69
Bouygues SA 168 9
Compagnie de Saint-Gobain 322 23
Credit Agricole SA 689 26
France Telecom SA 1,315 28
Lafarge SA 311 39
PSA Peugeot Citroen SA 201 13
Sanofi-Aventis 412 40
Schneider Electric SA 250 26
Societe Generale 320 47
SUEZ SA 1,003 42
Total SA 724 47
VINCI SA 356 37
Vivendi Universal SA 1,235 43
-------
564
-------
Shares Value($)
--------- --------
GERMANY (7.2%)
Adidas-Salomon AG 544 26
Allianz AG 278 43
BASF AG 505 41
Bayer AG 214 10
Continental AG 310 32
Deutsche Bank AG 247 28
Deutsche Telekom AG 1,800 29
E.ON AG 432 49
MAN AG 462 33
PUMA Rudolf Dassler Sport AG 76 30
SAP AG 102 22
ThyssenKrupp AG 1,000 34
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377
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HONG KONG (1.6%)
BOC Hong Kong Holdings Ltd. 6,500 13
China Mobile Ltd. 3,500 20
CLP Holdings Ltd. 2,000 12
CNOOC Ltd. 18,800 15
Guoco Group Ltd. 2,000 23
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83
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IRELAND (1.0%)
Anglo Irish Bank Corp. PLC 1,395 22
CRH PLC 985 32
-------
54
-------
ITALY (1.9%)
Banca Intesa SpA 5,533 32
Benetton Group SpA 883 13
Eni SpA (d) 1,904 57
-------
102
-------
JAPAN (23.8%)
Aisin Seiki Co. Ltd. 400 12
Brother Industries Ltd. 1,000 10
Canon, Inc. 900 44
Central Japan Railway Co. 3 30
Daicel Chemical Industries Ltd. 3,400 28
Daiichi Sankyo Co. Ltd. 400 11
Daiwa Securities Group, Inc. 3,000 36
DENSO Corp. 500 16
East Japan Railway Co. 1 7
Fujitsu Ltd. 1,000 8
Honda Motor Co. Ltd. 1,604 51
Ibiden Co. Ltd. 400 19
ITOCHU Corp. 2,000 18
Japan Tobacco, Inc. 6 22
KDDI Corp. 4 25
Keisei Electric Railway Co. Ltd. 1,000 6
Kitz Corp. 3,000 23
See Notes to Financial Statements.
8
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INTERNATIONAL EQUITY FUND--CONTINUED
Shares Value($)
--------- --------
JAPAN-CONTINUED
Komatsu Ltd. 2,000 40
Kubota Corp. 3,000 28
Makita Corp. 700 22
Matsushita Electric Industrial Co. Ltd. 1,000 21
Mitsubishi Tokyo Financial Group, Inc. 2 28
Mitsui Fudosan Co. Ltd. 1,000 22
Mitsui Trust Holdings, Inc. 1,000 12
Mizuho Financial Group, Inc. 8 67
NGK Spark Plug Co. Ltd. 1,000 20
Nihon Parkerizing Co. Ltd. 1,000 16
Nikko Cordial Corp. 1,100 14
Nintendo Co. Ltd. 100 17
Nippon Telegraph & Telephone Corp. 7 34
NSK Ltd. 3,000 25
Okinawa Electric Power Co., Inc. (The) 500 30
ORIX Corp. 130 32
Ricoh Co. Ltd. 1,000 20
Sankyo Co. Ltd. 400 25
Sega Sammy Holdings, Inc. 700 26
Shin-Etsu Chemical Co. Ltd. 400 22
Sumitomo Chemical Co. Ltd. 1,000 8
Sumitomo Corp. 3,000 40
Sumitomo Electric Industries Ltd. 600 9
Sumitomo Metal Industries Ltd. 8,000 33
Sumitomo Mitsui Financial Group, Inc. 6 62
Takeda Pharmaceutical Co. Ltd. 800 50
Tokyo Electron Ltd. 151 11
Tokyo Ohka Kogyo Co. Ltd. 700 18
Tokyo Steel Manufacturing Co. Ltd. 700 15
Toyota Motor Corp. 1,713 89
Yamaha Motor Co. Ltd. 600 16
Yamatake Corp. 300 7
-------
1,245
-------
NETHERLANDS (3.3%)
ABN AMRO Holding NV 1,664 46
Akzo Nobel NV 484 26
ASML Holding NV * 500 10
Heineken NV 524 22
ING Groep NV 1,362 53
Royal KPN NV 1,568 18
-------
175
-------
NEW ZEALAND (0.5%)
Fletcher Building Ltd. 4,651 26
-------
NORWAY (2.0%)
DNB NOR ASA (d) 1,200 15
Norsk Hydro ASA 1,175 31
Shares Value($)
--------- --------
NORWAY-CONTINUED
Orkla ASA 790 37
Telenor ASA 1,850 22
-------
105
-------
PORTUGAL (0.3%)
Energias de Portugal SA 3,468 14
-------
SINGAPORE (0.6%)
United Overseas Bank Ltd. 3,000 30
-------
SPAIN (2.2%)
Banco Santander Central Hispano SA 3,208 47
Endesa SA 276 10
Repsol YPF SA 1,177 34
Telefonica SA 1,345 22
-------
113
-------
SWEDEN (3.0%)
Alfa Laval AB 600 18
Autoliv, Inc. 261 15
Nordea Bank AB 1,010 12
Sandvik AB 1,915 22
Svenska Handelsbanken AB, Cl A 680 18
Swedish Match AB 2,140 35
Telefonaktiebolaget LM Ericsson 11,220 36
-------
156
-------
SWITZERLAND (6.0%)
Credit Suisse Group 940 53
Nestle SA 215 68
Novartis AG 1,304 70
Roche Holding Ltd. 270 45
UBS AG 350 38
Zurich Financial Services 178 39
-------
313
-------
UNITED KINGDOM (23.2%)
Anglo American PLC 981 40
AstraZeneca PLC 1,282 77
Aviva PLC 2,584 37
AWG PLC 1,097 24
Barclays PLC 4,404 50
Barratt Developments PLC 900 16
BHP Billiton PLC 2,418 47
Bodycote International PLC 5,900 28
BP PLC 7,700 90
Bradford & Bingley PLC 2,003 17
British Airways PLC * 4,796 30
British American Tobacco PLC 1,786 45
BT Group PLC 9,384 42
CRH PLC (b) 8 0
See Notes to Financial Statements.
9
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INTERNATIONAL EQUITY FUND--CONCLUDED
Shares Value($)
--------- --------
UNITED KINGDOM-CONTINUED
First Choice Holidays PLC 3,003 13
GlaxoSmithKline PLC 2,604 73
HBOS PLC 2,396 42
HSBC Holdings PLC 6,324 112
National Grid PLC 3,200 35
Royal & Sun Alliance Insurance Group PLC 10,643 26
Royal Bank of Scotland Group PLC (The) 1,954 64
Royal Dutch Shell PLC, Cl A 2,595 87
Royal Dutch Shell PLC, Cl B 1,498 52
Scottish & Newcastle PLC 1,746 16
Taylor Woodrow PLC 2,100 13
Tomkins PLC 5,503 29
Vodafone Group PLC 27,383 58
WH Smith PLC 2,649 24
WPP Group PLC 2,468 30
-------
1,217
-------
Total Foreign Common Stocks (Cost $3,443) 4,915
-------
FOREIGN PREFERRED STOCKS (0.7%)
GERMANY (0.7%)
Fresenius AG, 1.510% 127 21
ProSiebenSat.1 Media AG, 0.840% 694 17
-------
Total Foreign Preferred Stocks (Cost $39) 38
-------
RIGHTS (0.0%)
FRANCE (0.0%)
AXA, expiring 07/03/06 1,421 1
-------
Total Rights (Cost $0) 1
-------
SHORT-TERM INVESTMENTS (3.7%)
Brown Brothers Harriman & Co., Cayman
Islands Cash Sweep 119,579 120
CSFB Enhanced Liquidity Portfolio (c) 75,102 75
-------
Total Short-Term Investments (Cost $195) 195
-------
Shares Value($)
--------- --------
Total Investments (Cost $3,677) (a) - 98.3% 5,149
Other assets in excess of liabilities - 1.7% 87
-------
Net Assets - 100.0% $ 5,236
=======
- ----------
Percentages indicated are based on net assets.
* Non-income producing security.
(a) Cost for federal income tax purposes is $3,804 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $1,394
Unrealized Depreciation (49)
------
Unrealized Appreciation (Depreciation) $1,345
======
(b) Market value is less than one thousand dollars.
(c) This security was purchased with cash collateral held from securities
lending.
(d) This security or a partial position of the security was on loan at June 30,
2006. The total value of securities on loan at June 30, 2006 in thousands
was $73.
Cl - Class
PLC - Public Limited Company
See Notes to Financial Statements.
10
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INVESTMENT GRADE BOND FUND
Shares or
Principal
Amount($) Value($)
--------- -------
ASSET BACKED SECURITIES (3.7%)
AUTOMOBILE ABS (3.7%)
Americredit Automobile Receivables
Trust, Ser 2002-D, Cl A4,
3.400%, 04/13/09 136 135
Daimler Chrysler Auto Trust, Ser
2005-A, Cl A4, 3.740%, 02/08/10 65 63
Honda Auto Receivables Owner Trust,
Ser 2006-1, Cl A3, 5.070%, 02/18/10 35 35
Onyx Acceptance Auto Trust, Ser
2003-D, Cl A4, 3.200%, 03/15/10 214 211
-------
Total Asset Backed Securities (Cost $446) 444
-------
COLLATERALIZED MORTGAGE OBLIGATIONS (3.6%)
Banc of America Commercial Mortgage,
Inc., Ser 2004-4, Cl A3,
4.128%, 07/10/42 55 53
Citigroup/Deutsche Bank Commercial
Mortgage Trust, Ser 2005-CD1, Cl A4,
5.226%, 07/15/44 (e) 75 72
Citigroup/Deutsche Bank Commercial
Mortgage Trust, Ser 2006-CD2, Cl A4,
5.362%, 01/15/46 (e) 40 39
GE Capital Commercial Mortgage
Corp., Ser 2006-C1, Cl A4,
5.340%, 03/10/44 (e) 60 58
GMAC Commercial Mortgage
Securities, Inc., Ser 2003-C2, Cl A1,
4.576%, 05/10/40 77 74
GS Mortgage Securities Corp. II, Ser
2006-GG6, Cl A2, 5.506%, 04/10/38 (e) 75 73
Wachovia Bank Commercial Mortgage
Trust, Ser 2006-C23, Cl A4,
5.418%, 01/15/45 (e) 70 68
-------
Total Collateralized Mortgage
Obligations (Cost $449) 437
-------
CORPORATE BONDS (21.2%)
AEROSPACE/DEFENSE (0.5%)
United Technologies Corp.,
4.875%, 05/01/15 65 61
-------
AIRLINES (0.3%)
Southwest Airlines Co., 5.125%, 03/01/17 35 32
-------
BANKS (0.7%)
Bank of America Corp., 7.400%, 01/15/11 80 85
-------
BREWERIES (0.8%)
Sabmiller PLC, 6.200%, 07/01/11 (d) 90 90
-------
Shares or
Principal
Amount($) Value($)
--------- -------
COMMERCIAL SERVICES (0.2%)
ERAC USA Finance Co.,
5.600%, 05/01/15 (d) 30 29
-------
COSMETICS/PERSONAL CARE (0.8%)
Avon Products, Inc., 5.125%, 01/15/11 95 92
-------
DIVERSIFED FINANCIAL SERVICES (6.0%)
CIT Group, Inc., 5.125%, 09/30/14 65 61
Citigroup, Inc., 5.125%, 05/05/14 20 19
Citigroup, Inc., 5.850%, 12/11/34 35 33
Fund American Cos., Inc.,
5.875%, 05/15/13 85 81
General Motors Acceptance Corp.,
8.000%, 11/01/31 (b) 100 95
Goldman Sachs Group, Inc. (The),
4.750%, 07/15/13 90 83
HSBC Holdings PLC, 7.625%, 05/17/32 35 40
International Lease Finance Corp.,
Ser Q, 5.250%, 01/10/13 35 34
John Deere Capital Corp.,
3.900%, 01/15/08 15 15
JPMorgan Chase & Co., 6.625%, 03/15/12 100 103
Lazard Group LLC, 7.125%, 05/15/15 80 81
Morgan Stanley, 5.300%, 03/01/13 75 73
-------
718
-------
ELECTRIC (1.5%)
Exelon Corp., 4.900%, 06/15/15 65 59
Midamerican Energy Holdings Co.,
6.125%, 04/01/36 (d) 60 56
Pacific Gas & Electric Co.,
6.050%, 03/01/34 65 62
-------
177
-------
ENTERTAINMENT (0.2%)
GTECH Holdings Corp.,
4.750%, 10/15/10 30 29
-------
INSURANCE (0.1%)
Metlife, Inc., 5.700%, 06/15/35 15 13
-------
INVESTMENT COMPANIES (0.3%)
Credit Suisse First Boston USA, Inc.,
6.500%, 01/15/12 30 31
-------
MEDIA (0.8%)
Cox Communications, Inc.,
4.625%, 06/01/13 35 31
News America Holdings, Inc.,
6.200%, 12/15/34 35 32
See Notes to Financial Statements.
11
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INVESTMENT GRADE BOND FUND-CONTINUED
Shares or
Principal
Amount($) Value($)
--------- -------
MEDIA-CONTINUED
Time Warner, Inc., 7.625%, 04/15/31 35 38
-------
101
-------
MINING (0.7%)
Alcan, Inc., 5.750%, 06/01/35 30 27
Inco Ltd., 7.750%, 05/15/12 55 59
-------
86
-------
MISCELLANEOUS MANUFACTURER (1.3%)
General Electric Co., 5.000%, 02/01/13 165 158
-------
OIL & GAS (1.0%)
Devon Financing Corp. ULC,
7.875%, 09/30/31 70 80
Enterprise Products Operating LP,
Ser B, 5.750%, 03/01/35 40 34
-------
114
-------
PHARMACEUTICALS (0.2%)
Teva Pharmaceutical Finance LLC,
6.150%, 02/01/36 30 27
-------
PIPELINES (0.9%)
Centerpoint Energy Resources Corp., Ser
B, 7.875%, 04/01/13 50 55
Kinder Morgan, Inc., 6.400%, 01/05/36 65 53
-------
108
-------
REITS (0.1%)
Simon Property Group LP,
6.375%, 11/15/07 15 15
-------
RETAIL (1.3%)
Federated Department Stores, Inc.,
6.900%, 04/01/29 15 15
Woolworths Ltd, 5.550%, 11/15/15 (d) 145 139
-------
154
-------
TELECOMMUNICATIONS (3.5%)
AT&T, Inc., 6.450%, 06/15/34 35 33
BellSouth Corp., 6.550%, 06/15/34 25 24
Cisco Systems, Inc., 5.500%, 02/22/16 85 82
Comcast Corp., 6.450%, 03/15/37 75 70
Deutsche Telekom International Finance,
5.750%, 03/23/16 75 71
Verizon Communications, Inc.,
5.850%, 09/15/35 35 30
Vodafone Group PLC, 5.500%, 06/15/11 110 106
-------
416
-------
Total Corporate Bonds (Cost $2,645) 2,536
-------
Shares or
Principal
Amount($) Value($)
--------- -------
FOREIGN GOVERNMENT BONDS (4.1%)
GERMANY (EUR) (1.1%)
Bundesschatzanweisungen,
2.500%, 09/22/06 105 134
-------
JAPAN (YEN) (2.6%)
Japan Government, Ser 224,
0.200%, 09/20/06 35,100 307
-------
SWITZERLAND (CHF) (0.4%)
Swiss Government, 4.500%, 06/10/07 55 46
-------
Total Foreign Government Bonds (Cost $493) 487
-------
U.S. GOVERNMENT AGENCY SECURITIES (17.9%)
FANNIE MAE (6.5%)
4.500%, 10/15/08 (b) 800 784
-------
FREDDIE MAC (11.4%)
3.625%, 02/15/08 1,400 1,360
-------
Total U.S. Government Agency
Securities (Cost $2,173) 2,144
-------
U.S. TREASURY OBLIGATIONS (46.2%)
U.S. TREASURY BONDS (6.9%)
5.375%, 02/15/31 60 61
4.500%, 02/15/36 (b) 855 767
-------
828
-------
U.S. TREASURY NOTES (39.3%)
5.625%, 05/15/08 190 191
4.875%, 05/31/08 (b) 215 214
4.875%, 05/15/09 (b) 835 829
4.250%, 10/15/10 760 736
4.250%, 01/15/11 530 512
4.875%, 05/31/11 (b) 850 842
4.250%, 08/15/13 (b) 560 531
4.000%, 02/15/15 675 622
5.125%, 05/15/16 (b) 225 225
-------
4,702
-------
Total U.S. Treasury Obligations (Cost $5,660) 5,530
-------
SHORT-TERM INVESTMENT (30.4%)
CSFB Enhanced Liquidity Portfolio (c) 3,648,136 3,648
-------
Total Short-Term Investment (Cost $3,648) 3,648
-------
See Notes to Financial Statements.
12
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
INVESTMENT GRADE BOND FUND--CONCLUDED
Shares or
Principal
Amount($) Value($)
--------- -------
MONEY MARKET FUND (0.7%)
Federated Prime Value
Obligations Fund, Cl I 84,676 85
-------
Total Money Market Fund (Cost $85) 85
-------
Total Investments (Cost $15,599) (a) - 127.8% 15,311
Liabilities in excess of other assets-(27.8)% (3,327)
-------
Net Assets - 100.0% $11,984
=======
Percentages indicated are based on net assets.
(a) Cost for federal income tax purposes is $15,629 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $ 3
Unrealized Depreciation (321)
-----
Unrealized Appreciation (Depreciation) $(318)
=====
(b) This security or a partial position of the security was on loan at June 30,
2006. The total value of securities on loan at June 30, 2006 in thousands
was $3,555.
(c) This security was purchased with cash collateral held from securities
lending.
(d) Rule 144A, Section 4(2) or other security which is restricted as to resale
to institutional investors. The Fund's advisor has deemed this security to
be liquid based upon procedures approved by the Board of Trustees.
(e) Variable rate security. Rate presented represents rate in effect at June
30, 2006. Maturity date represents actual maturity date.
CHF - Principal Amount in Swiss Franc
Cl - Class
EUR - Principal Amount in Euro
LLC - Limited Liability Company
LP - Limited Partnership
PLC - Public Limited Company
REIT - Real Estate Investment Trust
Ser - Series
YEN - Principal Amount in Japanese Yen
See Notes to Financial Statements.
13
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
LARGE CAP RELATIVE VALUE FUND
Shares Value($)
--------- --------
COMMON STOCKS (96.8%)
CONSUMER DISCRETIONARY (7.4%)
Abercrombie & Fitch Co., Cl A 1,700 94
Advance Auto Parts, Inc. 4,000 116
CBS Corp., Cl B 5,500 149
Lowe's Cos., Inc. 2,000 121
NIKE, Inc., Cl B 1,425 115
Target Corp. 1,000 49
Time Warner, Inc. 6,000 104
Walt Disney Co. (The) 4,000 120
-------
868
-------
CONSUMER STAPLES (10.6%)
Anheuser-Busch Cos., Inc. 3,000 137
Archer Daniels Midland Co. 3,000 124
ConAgra Foods, Inc. 5,000 111
Diageo PLC ADR 2,000 135
General Mills, Inc. 3,000 154
PepsiCo, Inc. 2,000 120
Procter & Gamble Co. (The) 2,300 128
Unilever PLC ADR 5,200 117
Wal-Mart Stores, Inc. 3,100 149
Wm. Wrigley Jr. Co. 1,450 66
-------
1,241
-------
ENERGY (9.3%)
Baker Hughes, Inc. 2,000 164
Cameron International Corp. * 1,725 82
Chevron Corp. 3,000 186
ConocoPhillips 3,000 197
Exxon Mobil Corp. 3,000 184
Royal Dutch Shell PLC ADR, Cl A 2,300 154
Transocean, Inc. * 1,500 120
-------
1,087
-------
FINANCIALS (24.8%)
American International Group, Inc. 2,500 148
Ameriprise Financial, Inc. 3,900 174
Bank of America Corp. 3,500 168
Berkshire Hathaway, Inc., Cl B * 62 189
Cincinnati Financial Corp. 4,200 197
CIT Group, Inc. 3,000 157
Citigroup, Inc. 5,300 256
Fifth Third Bancorp 3,000 111
Genworth Financial, Inc., Cl A 5,000 174
Goldman Sachs Group, Inc. (The) 750 113
Morgan Stanley 2,500 158
New York Community Bancorp, Inc. 10,000 165
Principal Financial Group, Inc. 3,500 195
State Street Corp. 2,000 116
U.S. Bancorp 4,400 136
Shares Value($)
--------- --------
FINANCIALS-CONTINUED
UBS AG 1,200 132
Wachovia Corp. 2,675 145
Wells Fargo & Co. 2,175 146
-------
2,880
-------
HEALTH CARE (12.5%)
Abbott Laboratories 3,000 131
Amgen, Inc. * 2,000 130
Becton, Dickinson & Co. 2,100 128
Boston Scientific Corp. * 10,000 168
Bristol-Myers Squibb Co. 4,500 116
Eli Lilly & Co. 3,150 174
Johnson & Johnson 3,000 180
Medtronic, Inc. 2,000 94
Pfizer, Inc. 9,700 229
WellPoint, Inc. * 1,400 102
-------
1,452
-------
INDUSTRIALS (10.1%)
3M Co. 2,000 162
Cendant Corp. 4,564 74
Dover Corp. 3,500 173
Emerson Electric Co. 1,500 126
General Electric Co. 5,500 181
Goodrich Corp. 4,500 181
Ingersoll-Rand Co. Ltd., Cl A 4,000 171
R.R. Donnelley & Sons Co. 3,500 112
-------
1,180
-------
INFORMATION TECHNOLOGY (11.3%)
Accenture Ltd., Cl A 6,000 170
Applied Materials, Inc. 10,000 163
Cisco Systems, Inc. * 5,000 98
First Data Corp. 4,000 180
Intel Corp. 9,000 171
International Business Machines Corp. 1,400 108
Microsoft Corp. 6,000 140
Nokia Corp. ADR 9,000 181
Texas Instruments, Inc. 3,600 109
-------
1,320
-------
MATERIALS (3.4%)
E.I. du Pont de Nemours & Co. 3,000 125
Praxair, Inc. 2,700 145
Sonoco Products Co. 4,000 127
-------
397
-------
TELECOMMUNICATION SERVICES (3.5%)
ALLTEL Corp. 1,800 115
BellSouth Corp. 3,500 127
Vodafone Group PLC ADR 8,000 170
-------
412
-------
See Notes to Financial Statements.
14
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
LARGE CAP RELATIVE VALUE FUND--CONCLUDED
Shares Value($)
--------- --------
UTILITIES (3.9%)
Edison International 4,000 156
Entergy Corp. 1,500 106
Exelon Corp. 2,000 114
SCANA Corp. 2,000 77
-------
453
-------
Total Common Stocks (Cost $9,867) 11,290
-------
MONEY MARKET FUND (3.1%)
Federated Prime Value Obligations Fund, Cl I 367,483 367
-------
Total Money Market Fund (Cost $367) 367
-------
Total Investments (Cost $10,234) (a) - 99.9% 11,657
Other assets in excess of liabilities - 0.1% 6
-------
Net Assets - 100.0% $11,663
=======
Percentages indicated are based on net assets.
* Non-income producing security.
(a) Cost for federal income tax purposes is $10,267 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $1,728
Unrealized Depreciation (338)
------
Unrealized Appreciation (Depreciation) $1,390
======
ADR - American Depository Receipt
Cl - Class
PLC - Public Limited Company
See Notes to Financial Statements.
15
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
LARGE CAP VALUE EQUITY FUND
Shares Value($)
--------- --------
COMMON STOCKS (98.9%)
CONSUMER DISCRETIONARY (7.7%)
Advance Auto Parts, Inc. 6,550 189
Borders Group, Inc. 9,594 177
Federated Department Stores, Inc. 20,776 760
Foot Locker, Inc. 13,350 327
New York Times Co. (The), Cl A (b) 12,450 306
Pulte Homes, Inc. 9,850 284
ServiceMaster Co. (The) (b) 18,200 188
Target Corp. 6,100 298
Time Warner, Inc. 17,350 300
-------
2,829
-------
CONSUMER STAPLES (7.2%)
Alberto-Culver Co. 7,607 371
Colgate-Palmolive Co. 12,400 742
PepsiCo, Inc. 10,250 615
Procter & Gamble Co. (The) 11,200 623
Sysco Corp. (b) 9,750 298
-------
2,649
-------
ENERGY (11.8%)
Arch Coal, Inc. 8,750 371
Chevron Corp. 12,600 782
ConocoPhillips 12,000 786
Exxon Mobil Corp. 16,900 1,037
Marathon Oil Corp. 9,400 783
Questar Corp. 4,350 350
Tidewater, Inc. 4,350 214
-------
4,323
-------
FINANCIALS (27.0%)
AMB Property Corp. REIT 4,000 202
American International Group, Inc. 9,100 537
Astoria Financial Corp. 9,600 292
Bank of America Corp. 17,650 850
Bank of New York Co., Inc. (The) 18,450 594
Bear Stearns & Co., Inc. 5,300 742
CIT Group, Inc. 5,800 303
Citigroup, Inc. 16,541 799
Colonial BancGroup, Inc. (The) 11,650 299
Compass Bancshares, Inc. 3,360 187
Genworth Financial, Inc., Cl A 9,100 317
JPMorgan Chase & Co. 10,245 430
Lincoln National Corp. 7,750 437
Merrill Lynch & Co., Inc. 5,250 365
Morgan Stanley 5,950 376
Northern Trust Corp. 5,900 326
ProLogis REIT 4,000 209
Torchmark Corp. 4,994 303
U.S. Bancorp 13,250 409
UCBH Holdings, Inc. 11,650 193
Shares Value($)
--------- --------
FINANCIALS-CONTINUED
Wachovia Corp. 14,300 774
Washington Mutual, Inc. 7,400 337
Willis Group Holdings Ltd. 5,666 182
XL Capital Ltd., Cl A 5,950 365
-------
9,828
-------
HEALTH CARE (8.9%)
Becton, Dickinson & Co. 4,947 302
Cooper Cos., Inc. (The) 6,250 277
Health Management Associates, Inc., Cl A 15,600 307
Johnson & Johnson 6,100 366
PerkinElmer, Inc. 9,446 197
Pfizer, Inc. 32,100 754
Universal Health Services, Inc., Cl B 6,100 307
Wyeth 16,800 746
-------
3,256
-------
INDUSTRIALS (17.0%)
American Power Conversion Corp. 13,100 255
Cooper Industries Ltd., Cl A 3,800 353
Emerson Electric Co. 3,827 321
Empresa Brasileira de Aeronautica SA ADR 5,835 213
Forward Air Corp. 5,500 224
General Electric Co. 23,800 784
Honeywell International, Inc. 6,350 256
Illinois Tool Works, Inc. 14,950 710
ITT Industries, Inc. 13,650 676
Pall Corp. 6,334 177
Pentair, Inc. 7,750 265
R.R. Donnelley & Sons Co. 8,200 262
Rockwell Automation, Inc. 5,400 389
Simpson Manufacturing Co., Inc. 5,650 204
Union Pacific Corp. 3,150 293
United Parcel Service, Inc., Cl B 4,600 379
UTI Worldwide, Inc. 7,350 185
Walter Industries, Inc. 3,950 228
-------
6,174
-------
INFORMATION TECHNOLOGY (4.4%)
Analog Devices, Inc. 7,850 252
Automatic Data Processing, Inc. 7,200 327
Diebold, Inc. 6,595 268
First Data Corp. 7,100 320
Harris Corp. 6,347 263
Jack Henry & Associates, Inc. 9,615 189
-------
1,619
-------
MATERIALS (4.3%)
Alcoa, Inc. 6,150 199
Dow Chemical Co. (The) 4,800 187
E.I. du Pont de Nemours & Co. 7,600 316
See Notes to Financial Statements.
16
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
LARGE CAP VALUE EQUITY FUND--CONCLUDED
Shares Value($)
--------- --------
MATERIALS-CONTINUED
International Flavors & Fragrances, Inc. 9,093 320
Praxair, Inc. 10,500 568
-------
1,590
-------
TELECOMMUNICATION SERVICES (5.2%)
ALLTEL Corp. 9,168 585
AT&T, Inc. 13,400 374
Sprint Nextel Corp. 18,450 369
Verizon Communications, Inc. (b) 17,540 587
-------
1,915
-------
UTILITIES (5.4%)
Dominion Resources, Inc. 6,189 463
Duke Energy Corp. 13,824 406
Entergy Corp. 6,600 467
PPL Corp. 19,541 631
-------
1,967
-------
Total Common Stocks (Cost $32,689) 36,150
-------
SHORT-TERM INVESTMENT (3.3%)
CSFB Enhanced Liquidity Portfolio (c) 1,221,606 1,222
-------
Total Short-Term Investment (Cost $1,222) 1,222
-------
MONEY MARKET FUND (1.8%)
Federated Prime Value Obligations Fund, Cl I 651,432 651
-------
Total Money Market Fund (Cost $651) 651
-------
Total Investments (Cost $34,562) (a) - 104.0% 38,023
Liabilities in excess of other assets - (4.0)% (1,465)
-------
Net Assets - 100.0% $36,558
=======
Percentages indicated are based on net assets.
(a) Cost for federal income tax purposes is $34,592 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $4,189
Unrealized Depreciation (758)
------
Unrealized Appreciation (Depreciation) $3,431
======
(b) This security or a partial position of the security was on loan at June
30,2006. The total value of securities on loan at June 30,2006 in thousands
was $1,201.
(c) This security was purchased with cash collateral held from securities
lending.
ADR - American Depository Receipt
Cl - Class
REIT - Real Estate Investment Trust
See Notes to Financial Statements.
17
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
MID-CAP EQUITY FUND
Shares Value($)
--------- --------
COMMON STOCKS (97.3%)
CONSUMER DISCRETIONARY (15.4%)
Abercrombie & Fitch Co., Cl A 1,771 98
American Eagle Outfitters, Inc. 4,109 140
Black & Decker Corp. (The) 1,633 138
Brinker International, Inc. 2,653 96
CBS Corp., Cl B 2,600 70
Darden Restaurants, Inc. 3,344 132
Dillard's, Inc., Cl A 4,486 143
Federated Department Stores, Inc. 1,874 69
Hilton Hotels Corp. 5,813 164
J.C. Penney Co., Inc. (b) 2,851 193
Johnson Controls, Inc. 1,504 124
Liz Claiborne, Inc. 3,770 140
Men's Wearhouse, Inc. (The) 3,706 112
Nordstrom, Inc. 4,918 180
Omnicom Group, Inc. 753 67
Penn National Gaming, Inc. * 1,758 68
Polo Ralph Lauren Corp. 2,728 150
Whirlpool Corp. 1,097 91
-------
2,175
-------
CONSUMER STAPLES (4.9%)
Archer Daniels Midland Co. 1,726 71
General Mills, Inc. 1,310 68
Kroger Co. (The) 3,152 69
Loews Corp. - Carolina Group 2,222 114
Pepsi Bottling Group, Inc. (The) 4,866 156
Reynolds American, Inc. (b) 1,546 179
Ruddick Corp. 1,402 34
-------
691
-------
ENERGY (9.2%)
Cameron International Corp. * 3,402 163
Hess Corp. 3,903 206
Marathon Oil Corp. 2,594 216
Murphy Oil Corp. 2,238 125
Noble Energy, Inc. 2,983 140
Pride International, Inc. * 3,778 118
Tesoro Corp. 2,125 158
Valero Energy Corp. 2,711 180
-------
1,306
-------
FINANCIALS (20.0%)
A.G. Edwards, Inc. 1,711 95
Ambac Financial Group, Inc. 1,338 109
American Financial Group, Inc. (b) 2,413 104
Arch Capital Group Ltd. * 1,801 107
Archstone-Smith Trust REIT 1,165 59
Assurant, Inc. 1,859 90
Bear Stearns & Co., Inc. 1,156 161
Camden Property Trust REIT 1,635 120
Shares Value($)
--------- --------
FINANCIALS-CONTINUED
Chubb Corp. (The) 1,106 55
CIT Group, Inc. 3,086 161
Comerica, Inc. 1,024 53
Downey Financial Corp. 1,410 96
Genworth Financial, Inc., Cl A 3,177 111
Host Hotels & Resorts, Inc. REIT 4,291 94
IndyMac Bancorp, Inc. 2,423 111
iStar Financial, Inc. REIT 2,397 90
KeyCorp 5,677 202
MGIC Investment Corp. 1,842 120
New Century Financial Corp. REIT 2,759 127
PMI Group, Inc. (The) 2,458 110
PNC Financial Services Group, Inc. 1,183 83
ProLogis REIT 2,655 139
Radian Group, Inc. 1,861 115
Raymond James Financial, Inc. 3,668 111
Simon Property Group, Inc. REIT 958 79
SL Green Realty Corp. REIT 1,057 116
-------
2,818
-------
HEALTH CARE (9.1%)
Applera Corp.- Applied Biosystems Group 3,455 112
Becton, Dickinson & Co. 2,350 144
Biogen Idec, Inc. * 2,691 125
ImClone Systems, Inc. * (b) 2,335 90
King Pharmaceuticals, Inc. * 4,965 84
Laboratory Corp. of America Holdings * 2,374 148
Millipore Corp. * 1,251 79
Mylan Laboratories, Inc. 5,041 101
Quest Diagnostics, Inc. 1,920 115
Thermo Electron Corp. * 3,584 130
Universal Health Services, Inc., Cl B 3,045 152
-------
1,280
-------
INDUSTRIALS (14.7%)
Alaska Air Group, Inc. * 1,377 54
Arrow Electronics, Inc. * 4,053 131
Crane Co. 2,216 92
CSX Corp. 3,007 212
Cummins, Inc. 1,015 124
Deere & Co. 833 70
Eaton Corp. 1,825 138
Goodrich Corp. 2,250 91
Granite Construction, Inc. 2,825 128
Harsco Corp. 1,363 106
Ingersoll-Rand Co. Ltd., Cl A 2,650 113
L-3 Communications Holdings, Inc. 1,642 124
Mettler Toledo International, Inc. * 1,919 116
Norfolk Southern Corp. 2,526 134
Reliance Steel & Aluminum Co. 712 59
See Notes to Financial Statements.
18
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
MID-CAP EQUITY FUND--CONCLUDED
Shares Value($)
--------- --------
INDUSTRIALS-CONTINUED
Rockwell Automation, Inc. 1,447 104
Ryder System, Inc. 1,906 111
Sotheby's Holdings, Inc., Cl A * 2,796 73
Thomas & Betts Corp. * 1,961 101
-------
2,081
-------
INFORMATION TECHNOLOGY (12.5%)
Accenture Ltd., Cl A 2,471 70
Advanced Micro Devices, Inc. * 2,681 65
Alliance Data Systems Corp. * (b) 2,799 165
Cadence Design Systems, Inc. * 7,041 121
Citrix Systems, Inc. * 3,450 138
Corning, Inc. * 1,636 40
Freescale Semiconductor, Inc., Cl B * 5,866 172
Global Payments, Inc. 3,095 150
Harris Corp. 3,217 134
Intuit, Inc. * 1,812 109
Lam Research Corp. * 3,482 162
National Semiconductor Corp. 3,797 91
NCR Corp. * 3,900 143
Tellabs, Inc. * 5,991 80
Western Digital Corp. * 6,224 123
-------
1,763
-------
MATERIALS (3.8%)
Albemarle Corp. 2,319 112
FMC Corp. 1,241 80
Louisiana-Pacific Corp. 2,737 60
Nucor Corp. 150 8
Rohm & Haas Co. 1,502 75
Steel Dynamics, Inc. 1,083 71
Temple-Inland, Inc. 1,797 77
United States Steel Corp. 734 51
-------
534
-------
TELECOMMUNICATION SERVICES (0.8%)
Qwest Communications International, Inc. * 14,399 116
-------
UTILITIES (6.9%)
AES Corp. (The) * 4,677 86
Alliant Energy Corp. 4,802 166
American Electric Power Co., Inc. 4,690 161
Edison International 3,269 127
Shares Value($)
--------- --------
UTILITIES-CONTINUED
FirstEnergy Corp. 2,130 115
MDU Resources Group, Inc. 2,371 87
Mirant Corp. * 2,728 73
PG&E Corp. 4,077 160
-------
975
-------
Total Common Stocks (Cost $12,015) 13,739
-------
SHORT-TERM INVESTMENT (3.7%)
CSFB Enhanced Liquidity Portfolio (c) 530,300 530
-------
Total Short-Term Investment (Cost $530) 530
-------
MONEY MARKET FUND (5.6%)
Federated Government Obligations Fund 181,019 181
Federated Prime Value Obligations Fund, Cl I 616,324 616
-------
Total Money Market Fund (Cost $797) 797
-------
Total Investments (Cost $13,342) (a) - 106.6% 15,066
Liabilities in excess of other assets - (6.6)% (932)
-------
Net Assets - 100.0% $14,134
=======
- ----------
Percentages indicated are based on net assets.
* Non-income producing security.
(a) Cost for federal income tax purposes is $13,386 (amount in thousands).
Unrealized appreciation/ (depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $1,892
Unrealized Depreciation (212)
------
Unrealized Appreciation (Depreciation) $1,680
======
(b) This security or a partial position of the security was on loan at June 30,
2006. The total value of securities on loan at June 30, 2006 in thousands
was $516.
(c) This security was purchased with cash collateral held from securities
lending.
Cl - Class
REIT - Real Estate Investment Trust
See Notes to Financial Statements.
19
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
SMALL CAP VALUE EQUITY FUND
Shares Value($)
--------- --------
COMMON STOCKS (96.7%)
CONSUMER DISCRETIONARY (20.3%)
ADESA, Inc. 7,146 159
Applebee's International, Inc. 12,400 238
Bassett Furniture Industries, Inc. 5,300 98
bebe stores, Inc. 16,600 256
Benetton Group SpA ADR 5,700 171
Borders Group, Inc. 9,500 175
BorgWarner, Inc. 2,500 163
CKE Restaurants, Inc. (b) 15,200 252
Cobra Electronics Corp. 8,000 75
Courier Corp. 3,100 124
Group 1 Automotive, Inc. 3,700 208
Harte-Hanks, Inc. 6,300 162
International Speedway Corp., Cl A 4,700 218
K-Swiss, Inc., Cl A 8,099 216
Lithia Motors, Inc. 7,300 221
Makita Corp. ADR 7,052 220
Media General, Inc., Cl A 2,900 121
Meredith Corp. 3,200 159
Movado Group, Inc. 15,000 345
Pool Corp. 6,400 280
Stanley Furniture Co., Inc. 2,000 48
Technical Olympic USA, Inc. 10,700 154
Tuesday Morning Corp. (b) 1,400 18
United Auto Group, Inc. (b) 7,600 162
Winnebago Industries, Inc. (b) 6,400 199
World Wrestling Entertainment, Inc. 9,800 166
-------
4,608
-------
CONSUMER STAPLES (2.6%)
Church & Dwight Co., Inc. 9,750 355
J.M. Smucker Co. (The) 5,475 245
-------
600
-------
ENERGY (4.9%)
CARBO Ceramics, Inc. 5,300 260
CHC Helicopter Corp., Cl A 19,500 471
Maritrans, Inc. 4,100 102
Tidewater, Inc. 3,100 153
Ultrapar Participacoes SA ADR 7,700 121
-------
1,107
-------
FINANCIALS (14.9%)
Bank of Hawaii Corp. 3,300 164
BankAtlantic Bancorp, Inc. 9,000 134
Banner Corp. 2,700 104
Capital Corp. of the West 1,700 54
City National Corp. 2,200 143
Cohen & Steers, Inc. 9,800 231
Desert Community Bank 2,400 44
Shares Value($)
--------- --------
FINANCIALS-CONTINUED
Federal Agricultural Mortgage Corp., Cl C 2,011 56
First Republic Bank 7,800 357
Glacier Bancorp, Inc. 6,122 179
HCC Insurance Holdings, Inc. 5,400 159
Horizon Financial Corp. 6,656 183
Hub International Ltd. 16,100 423
International Bancshares Corp. 3,500 96
National Interstate Corp. 3,511 95
Seacoast Banking Corp. of Florida 5,810 155
StanCorp Financial Group, Inc. 5,800 295
UCBH Holdings, Inc. 9,800 162
Washington Federal, Inc. 6,865 159
West Coast Bancorp 6,176 182
-------
3,375
-------
HEALTH CARE (4.7%)
Cooper Cos., Inc. (The) 9,900 437
PerkinElmer, Inc. 7,300 153
Perrigo Co. 15,700 253
Steris Corp. 10,000 229
-------
1,072
-------
INDUSTRIALS (30.4%)
ABM Industries, Inc. 5,400 92
American Ecology Corp. 9,100 241
Apogee Enterprises, Inc. 4,700 69
Briggs & Stratton Corp. 3,700 115
Brink's Co. (The) 3,200 181
Deluxe Corp. 8,000 140
Donaldson Co., Inc. 7,200 244
DRS Technologies, Inc. 1,096 53
ElkCorp 3,697 103
Florida East Coast Industries, Inc. 3,000 157
Forward Air Corp. 8,702 354
Freightcar America, Inc. 1,900 105
Gol Linhas Aereas Inteligentes SA ADR (b) 5,956 211
Graco, Inc. 12,100 557
Granite Construction, Inc. 7,500 340
Grupo Aeroportuario del Pacifico SA de CV ADR 15,400 491
Heartland Express, Inc. 14,766 264
Lan Airlines SA ADR 4,100 133
Lennox International, Inc. 9,014 239
LSI Industries, Inc. 14,562 247
McGrath Rentcorp 8,300 231
Mine Safety Appliances Co. 5,300 213
MSC Industrial Direct Co., Inc., Cl A 3,300 157
Multi-Color Corp. 3,900 117
See Notes to Financial Statements.
20
SCHEDULES OF PORTFOLIO INVESTMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands, except Shares)
(Unaudited)
SMALL CAP VALUE EQUITY FUND--CONCLUDED
Shares Value($)
--------- --------
INDUSTRIALS-CONTINUED
Oshkosh Truck Corp. 2,800 133
Portec Rail Products, Inc. 4,086 57
Quixote Corp. 11,200 202
Ryder System, Inc. 3,200 187
Simpson Manufacturing Co., Inc. 4,400 159
Supreme Industries, Inc., Cl A 2,600 19
UTI Worldwide, Inc. 2,000 50
Valmont Industries, Inc. 3,300 153
Wabtec Corp. 14,700 551
Walter Industries, Inc. (b) 5,700 329
-------
6,894
-------
INFORMATION TECHNOLOGY (7.5%)
Diebold, Inc. 5,500 223
Factset Research Systems, Inc. 6,600 312
Harris Corp. 4,954 206
Jack Henry & Associates, Inc. 15,600 307
Keithley Instruments, Inc. 6,800 87
Nam Tai Electronics, Inc. 7,600 170
Reynolds & Reynolds Co. (The), Cl A 7,201 221
Woodhead Industries, Inc. 8,800 168
-------
1,694
-------
MATERIALS (8.9%)
Aber Diamond Corp. 3,700 115
Agnico-Eagle Mines Ltd. 5,800 192
Airgas, Inc. 14,500 541
Foundation Coal Holdings, Inc. 6,700 314
RPM International, Inc. 15,300 275
Scotts Miracle-Gro Co. (The), Cl A 3,200 135
Sensient Technologies Corp. 8,400 176
Valspar Corp. (The) 9,800 259
-------
2,007
-------
UTILITIES (2.5%)
Companhia de Saneamento Basico ADR 13,400 316
PNM Resources, Inc. 9,900 247
-------
563
-------
Total Common Stocks (Cost $16,945) 21,920
-------
Shares Value($)
--------- --------
SHORT-TERM INVESTMENT (4.9%)
CSFB Enhanced Liquidity Portfolio (c) 1,100,479 1,100
-------
Total Short-Term Investment (Cost $1,100) 1,100
-------
MONEY MARKET FUND (3.2%)
Federated Prime Value Obligations Fund, Cl I 718,398 718
-------
Total Money Market Fund (Cost $718) 718
-------
Total Investments (Cost $18,763) (a) - 104.8% 23,738
Liabilities in excess of other assets - (4.8)% (1,080)
-------
Net Assets - 100.0% $22,658
=======
- ----------
Percentages indicated are based on net assets.
* Non-income producing security.
(a) Cost for federal income tax purposes is $18,893 (amount in thousands).
Unrealized appreciation/(depreciation) on a tax basis is as follows
(amounts in thousands):
Unrealized Appreciation $5,560
Unrealized Depreciation (715)
------
Unrealized Appreciation (Depreciation) $4,845
======
(b) This security or a partial position of the security was on loan at June 30,
2006. The total value of securities on loan at June 30, 2006 in thousands
was $1,085.
(c) This security was purchased with cash collateral held from securities
lending.
ADR - American Depository Receipt
Cl - Class
See Notes to Financial Statements.
21
STATEMENTS OF ASSETS AND LIABILITIES
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands)
(Unaudited)
Large Large Small
Cap Cap Cap
Capital Investment Relative Value Mid-Cap Value
Appreciation International Grade Bond Value Equity Equity Equity
Fund Equity Fund Fund Fund Fund Fund Fund
------------ ------------- ---------- -------- ------- ------- -------
ASSETS:
Investments, at Cost ......................... $41,470 $ 3,677 $15,599 $10,234 $34,562 $13,342 $18,763
======= ======= ======= ======= ======= ======= =======
Investments, at Value * ...................... $44,907 $ 5,149 $15,313 $11,657 $38,023 $15,066 $23,738
Foreign Currency, at Value (Cost $193) ....... -- 198 -- -- -- -- --
Interest and Dividends Receivable ............ 27 8 139 17 43 19 50
Receivable for Capital Shares Issued ......... 4 3 61 9 9 1 8
Receivable for Investment Securities Sold .... 330 25 526 205 370 375 11
Receivable from Investment Adviser ........... -- 8 -- -- -- -- --
Reclaims Receivable .......................... -- 8 -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total Assets ................................. 45,268 5,399 16,039 11,888 38,445 15,461 23,807
------- ------- ------- ------- ------- ------- -------
LIABILITIES:
Payable to Custodian ......................... 95 -- -- -- -- -- --
Income Distributions Payable ................. -- -- 44 -- -- -- --
Payable for Investment Securities Purchased .. -- 31 340 198 586 762 --
Payable for Capital Shares Redeemed .......... 37 5 1 5 18 1 4
Payable upon Return of Securities Loaned ..... 2,988 75 3,648 -- 1,222 530 1,100
Investment Advisory Fees Payable ............. 32 -- 3 7 21 9 17
Administration Fees Payable .................. 1 -- -- -- 1 -- --
Custodian Fees Payable ....................... 2 36 3 1 4 6 5
Accrued Expenses ............................. 39 16 16 14 35 19 24
------- ------- ------- ------- ------- ------- -------
Total Liabilities ............................ 3,194 163 4,055 225 1,887 1,327 1,150
------- ------- ------- ------- ------- ------- -------
Total Net Assets ............................. $42,074 $ 5,236 $11,984 $11,663 $36,558 $14,134 $22,657
======= ======= ======= ======= ======= ======= =======
NET ASSETS:
Capital ...................................... $35,105 $ 5,331 $12,601 $ 8,723 $37,779 $10,688 $10,074
Accumulated Net Investment Income ............ 3 37 3 5 12 2 12
Accumulated Net Realized Gains
(Losses) on Investments and Foreign
Currency Transactions ..................... 3,529 (1,608) (334) 1,512 (4,694) 1,720 7,596
Net Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions ............. 3,437 1,476 (286) 1,423 3,461 1,724 4,975
------- ------- ------- ------- ------- ------- -------
Total Net Assets ............................. $42,074 $ 5,236 $11,984 $11,663 $36,558 $14,134 $22,657
======= ======= ======= ======= ======= ======= =======
Shares Outstanding ........................... 2,580 390 1,209 917 2,329 1,013 1,129
Net Asset Value, Offering, and Redemption
Price Per Share ........................... $ 16.31 $ 13.43 $ 9.91 $ 12.72 $ 15.70 $ 13.95 $ 20.07
* The Capital Appreciation Fund, International Equity Fund, Investment Grade
Bond Fund, Large Cap Value Equity Fund, Mid-Cap Equity Fund and Small Cap
Value Fund include securities on loan of $2,918, $73, $3,555, $1,201, $516
and $1,085, respectively.
Amounts designated as "--" are $0 or have been rounded to $0.
See Notes to Financial Statements.
22
STATEMENTS OF OPERATIONS
STI CLASSIC VARIABLE TRUST June 30, 2006 (Amounts in thousands)
(Unaudited)
Large Large Small
Cap Cap Cap
Capital Investment Relative Value Mid-Cap Value
Appreciation International Grade Bond Value Equity Equity Equity
Fund Equity Fund Fund Fund Fund Fund Fund
------------ ------------- ---------- -------- ------- ------- -------
Investment Income:
Dividend Income .............................. $ 290 $ 94 $ 9 $ 126 $ 452 $ 114 $ 186
Interest Income .............................. -- 3 288 -- -- -- --
Securities Lending Income .................... 6 2 9 1 3 1 3
Less: Foreign Taxes Withheld ................. -- (10) -- -- -- -- --
------ ---- ----- ----- ------ ----- ------
Total Investment Income ...................... 296 89 306 127 455 115 189
------ ---- ----- ----- ------ ----- ------
Expenses:
Investment Advisory Fees ..................... 219 30 32 50 153 75 128
Administration and Fund
Accounting Fees ........................... 6 1 2 2 5 2 3
Custodian Fees ............................... 2 68 2 2 4 6 5
Professional Fees ............................ 21 3 6 6 18 7 9
Printing Fees ................................ 16 6 8 7 15 9 10
Other Expenses ............................... 2 16 2 1 1 1 1
------ ---- ----- ----- ------ ----- ------
Total Expenses ............................... 266 124 52 68 196 100 156
Less: Investment Advisory Fees Waived
or Fees Reimbursed ........................ (13) (90) (11) (8) (15) (14) (24)
------ ---- ----- ----- ------ ----- ------
Net Expenses ................................. 253 34 41 60 181 86 132
------ ---- ----- ----- ------ ----- ------
Net Investment Income ........................ 43 55 265 67 274 29 57
------ ---- ----- ----- ------ ----- ------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions:
Net Realized Gain (Loss) on Investments
Sold and Foreign Currency Transactions .... 1,121 479 (24) 657 2,560 715 2,675
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions ............. (859) (21) (298) (300) 203 (212) (642)
------ ---- ----- ----- ------ ----- ------
Total Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions ..................... 262 458 (322) 357 2,763 503 2,033
------ ---- ----- ----- ------ ----- ------
Net Change in Net Assets
from Operations ........................... $ 305 $513 $ (57) $ 424 $3,037 $ 532 $2,090
====== ==== ===== ===== ====== ===== ======
Amounts designated as "--" are $0 or have been rounded to $0.
See Notes to Financial Statements.
23
STATEMENTS OF CHANGES IN NET ASSETS
STI CLASSIC VARIABLE TRUST For the Periods Indicated (Amounts in thousands)
Capital Appreciation International Investment Grade
Fund Equity Fund Bond Fund
----------------------- ----------------------- -----------------------
01/01/06- 01/01/05- 01/01/06- 01/01/05- 01/01/06- 01/01/05-
06/30/06 12/31/05 06/30/06 12/31/05 06/30/06 12/31/05
----------- --------- ----------- --------- ----------- ---------
(Unaudited) (Unaudited) (Unaudited)
Operations:
Net Investment Income.......................... $ 43 $ 68 $ 55 $ 72 $ 265 $ 565
Net Realized Gain (Loss) on Investments Sold
and Foreign Currency Transactions........... 1,121 2,488 479 835 (24) 6
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions....................... (859) (3,188) (21) (257) (298) (233)
------- -------- ------ ------- ------- -------
Change in Net Assets from Operations........... 305 (632) 513 650 (57) 338
------- -------- ------ ------- ------- -------
Dividends and Distributions to Shareholders:
Net Investment Income.......................... (46) (68) -- (133) (263) (592)
------- -------- ------ ------- ------- -------
Capital Transactions:
Proceeds from Shares Issued.................... 1,800 6,219 299 330 320 933
Dividends Reinvested........................... 46 68 -- 133 311 596
Cost of Shares Redeemed........................ (6,338) (14,142) (896) (1,903) (1,757) (4,892)
------- -------- ------ ------- ------- -------
Change in Net Assets from Capital
Transactions................................ (4,492) (7,855) (597) (1,440) (1,126) (3,363)
------- -------- ------ ------- ------- -------
Change in Net Assets........................... (4,233) (8,555) (84) (923) (1,446) (3,617)
------- -------- ------ ------- ------- -------
Net Assets:
Beginning of Period............................ 46,307 54,862 5,320 6,243 13,430 17,047
------- -------- ------ ------- ------- -------
End of Period.................................. $42,074 $ 46,307 $5,236 $ 5,320 $11,984 $13,430
======= ======== ====== ======= ======= =======
Accumulated Net Investment Income (Loss), End of
Period......................................... $ 3 $ 6 $ 37 $ (18) $ 3 $ 1
======= ======== ====== ======= ======= =======
Share Transactions:
Issued......................................... 108 391 23 30 32 91
Reinvested..................................... 3 4 -- 12 31 58
Redeemed....................................... (381) (887) (69) (170) (175) (477)
------- -------- ------ ------- ------- -------
Change in Share Transactions................... (270) (492) (46) (128) (112) (328)
======= ======== ====== ======= ======= =======
Amounts designated as "--" are either $0 or have been rounded to $0.
See Notes to Financial Statements.
24
STATEMENTS OF CHANGES IN NET ASSETS
STI CLASSIC VARIABLE TRUST For the Periods Indicated(Amounts in thousands)
Large Cap Relative Large Cap Value Mid-Cap Small Cap Value
Value Fund Equity Fund Equity Fund Equity Fund
---------------------- ---------------------- ---------------------- ---------------------
01/01/06- 01/01/05- 01/01/06- 01/01/05- 01/01/06- 01/01/05- 01/01/06- 01/01/05-
06/30/06 12/31/05 06/30/06 12/31/05 06/30/06 12/31/05 06/30/06 12/31/05
----------- --------- ----------- --------- ----------- --------- ----------- ---------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operations:
Net Investment Income .......... $ 67 $ 113 $ 274 $ 661 $ 29 $ 70 $ 57 $ 126
Net Realized Gain on Investments
Sold and Foreign Currency
Transactions ................ 657 1,129 2,560 4,556 715 3,519 2,675 4,925
Net Change in Unrealized
Appreciation (Depreciation)
on Investments and Foreign
Currency Transactions ....... (300) (214) 203 (3,746) (212) (1,540) (642) (1,854)
------- ------- ------- -------- ------- ------- ------- --------
Change in Net Assets from
Operations .................. 424 1,028 3,037 1,471 532 2,049 2,090 3,197
------- ------- ------- -------- ------- ------- ------- --------
Dividends and Distributions to
Shareholders:
Net Investment Income .......... (66) (110) (262) (662) (35) (68) (59) (125)
Net Realized Gains ............. -- -- -- -- -- -- -- (3,009)
------- ------- ------- -------- ------- ------- ------- --------
Total Dividends and
Distributions .................. (66) (110) (262) (662) (35) (68) (59) (3,134)
------- ------- ------- -------- ------- ------- ------- --------
Capital Transactions:
Proceeds from Shares Issued .... 714 1,769 1,394 2,872 455 1,034 2,508 5,765
Dividends Reinvested ........... 66 110 262 662 35 68 59 3,134
Cost of Shares Redeemed ........ (1,627) (2,089) (5,901) (13,328) (1,889) (4,429) (2,211) (14,652)
------- ------- ------- -------- ------- ------- ------- --------
Change in Net Assets from
Capital Transactions ........ (847) (210) (4,245) (9,794) (1,399) (3,327) 356 (5,753)
------- ------- ------- -------- ------- ------- ------- --------
Change in Net Assets ........... (489) 708 (1,470) (8,985) (902) (1,346) 2,387 (5,690)
------- ------- ------- -------- ------- ------- ------- --------
Net Assets:
Beginning of Period ............ 12,152 11,444 38,028 47,013 15,036 16,382 20,270 25,960
------- ------- ------- -------- ------- ------- ------- --------
End of Period .................. $11,663 $12,152 $36,558 $ 38,028 $14,134 $15,036 $22,657 $ 20,270
======= ======= ======= ======== ======= ======= ======= ========
Accumulated Net Investment
Income, End of Period ....... $ 5 $ 4 $ 12 $ -- $ 2 $ 8 $ 12 $ 14
======= ======= ======= ======== ======= ======= ======= ========
Share Transactions:
Issued ......................... 56 151 89 201 32 82 125 321
Reinvested ..................... 5 9 17 46 3 5 3 179
Redeemed ....................... (127) (177) (378) (930) (135) (354) (110) (805)
------- ------- ------- -------- ------- ------- ------- --------
Change in Share Transactions ... (66) (17) (272) (683) (100) (267) 18 (305)
======= ======= ======= ======== ======= ======= ======= ========
Amounts designated as "--" are either $0 or have been rounded to $0.
See Notes to Financial Statements.
25
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26
FINANCIAL HIGHLIGHTS
STI CLASSIC VARIABLE TRUST Selected Data For a Share of Beneficial Interest
Outstanding Throughout the Periods Indicated
Net
Realized
and Net
Unrealized Asset
Net Asset Net Gains Dividends Total Value,
Value, Investment (Losses) from Net Distributions Dividends End
Beginning Income on Total From Investment from Realized and Distri- of
of Period (Loss) Investments Operations Income Capital Gains butions Period
--------- ---------- ----------- ---------- ---------- ------------- ----------- ------
CAPITAL APPRECIATION FUND
Period Ended June 30, 2006* $16.25 $ 0.02 $ 0.06 $ 0.08 $(0.02) $ -- $(0.02) $16.31
Year ended December 31, 2005 16.42 0.02 (0.17) (0.15) (0.02) -- (0.02) 16.25
Year ended December 31, 2004 15.41 0.03 1.01 1.04 (0.03) -- (0.03) 16.42
Year ended December 31, 2003 13.01 (0.03)(a) 2.43(a) 2.40 -- -- -- 15.41
Year ended December 31, 2002 17.48 (0.07) (3.74) (3.81) -- (0.66) (0.66) 13.01
Year ended December 31, 2001 20.02 (0.05) (1.27) (1.32) -- (1.22) (1.22) 17.48
INTERNATIONAL EQUITY FUND
Period Ended June 30, 2006* 12.19 0.13 1.09 1.22 -- -- -- 13.41
Year ended December 31, 2005 11.06 0.15(a) 1.27(a) 1.42 (0.29) -- (0.29) 12.19
Year ended December 31, 2004 9.43 0.11 1.69 1.80 (0.17) -- (0.17) 11.06
Year ended December 31, 2003 6.92 0.07(a) 2.50(a) 2.57 (0.06) -- (0.06) 9.43
Year ended December 31, 2002 8.55 0.02 (1.61) (1.59) -- (0.04) (0.04) 6.92
Year ended December 31, 2001 10.36 -- (1.80) (1.80) -- (0.01) (0.01) 8.55
INVESTMENT GRADE BOND FUND
Period Ended June 30, 2006* 10.16 0.21 (0.25) (0.04) (0.21) -- (0.21) 9.91
Year ended December 31, 2005 10.34 0.39 (0.17) 0.22 (0.40) -- (0.40) 10.16
Year ended December 31, 2004(b) 10.27 0.36 0.06 0.42 (0.35) -- (0.35) 10.34
Year ended December 31, 2003 10.29 0.34(a) 0.02(a) 0.36 (0.38) -- (0.38) 10.27
Year ended December 31, 2002 10.05 0.44 0.28 0.72 (0.48) -- (0.48) 10.29
Year ended December 31, 2001 9.69 0.52 0.36 0.88 (0.52) -- (0.52) 10.05
LARGE CAP RELATIVE VALUE FUND
Period Ended June 30, 2006* 12.37 0.07 0.34 0.41 (0.07) -- (0.07) 12.71
Year ended December 31, 2005 11.45 0.11 0.92 1.03 (0.11) -- (0.11) 12.37
Year ended December 31, 2004 10.10 0.09(a) 1.35(a) 1.44 (0.09) -- (0.09) 11.45
Year ended December 31, 2003 8.05 0.08(a) 2.04(a) 2.12 (0.07) -- (0.07) 10.10
Year ended December 31, 2002 10.21 0.06 (2.16) (2.10) (0.06) -- (0.06) 8.05
Year ended December 31, 2001 10.86 0.04 (0.65) (0.61) (0.04) -- (0.04) 10.21
LARGE CAP VALUE EQUITY FUND
Period Ended June 30, 2006* 14.62 0.12 1.07 1.19 (0.11) -- (0.11) 15.70
Year ended December 31, 2005 14.32 0.23 0.30 0.53 (0.23) -- (0.23) 14.62
Year ended December 31, 2004 12.60 0.19 1.72 1.91 (0.19) -- (0.19) 14.32
Year ended December 31, 2003 10.39 0.17(a) 2.21(a) 2.38 (0.17) -- (0.17) 12.60
Year ended December 31, 2002 12.70 0.16 (2.31) (2.15) (0.16)*** -- (0.16)*** 10.39
Year ended December 31, 2001 13.06 0.16 (0.32) (0.16) (0.20) -- (0.20) 12.70
MID-CAP EQUITY FUND
Period Ended June 30, 2006* 13.51 0.02 0.45 0.47 (0.03) -- (0.03) 13.95
Year ended December 31, 2005 11.87 0.07 1.63 1.70 (0.06) -- (0.06) 13.51
Year ended December 31, 2004 10.23 0.08 1.63 1.71 (0.07) -- (0.07) 11.87
Year ended December 31, 2003 7.93 0.05(a) 2.30(a) 2.35 (0.05) -- (0.05) 10.23
Year ended December 31, 2002 11.09 (0.04) (3.11) (3.15) -- (0.01) (0.01) 7.93
Year ended December 31, 2001 13.30 -- (0.19) (0.19) -- (2.02) (2.02) 11.09
SMALL CAP VALUE EQUITY FUND
Period Ended June 30, 2006* 18.24 0.05 1.82 1.87 (0.05) -- (0.05) 20.06
Year ended December 31, 2005 18.33 0.08 2.00 2.08 (0.08) (2.09) (2.17) 18.24
Year ended December 31, 2004 14.80 0.05(a) 3.52(a) 3.57 (0.04) -- (0.04) 18.33
Year ended December 31, 2003 10.75 0.07(a) 4.05(a) 4.12 (0.07) -- (0.07) 14.80
Year ended December 31, 2002 10.94 0.06 (0.19) (0.13) (0.06) -- (0.06) 10.75
Year ended December 31, 2001 9.12 0.12 1.82 1.94 (0.12) -- (0.12) 10.94
+ Not annualized for periods less than one year.
++ Annualized for periods less than one year.
* Unaudited
** 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 Investment 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 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.
See Notes to Financial Statements.
27
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+ Period (000) Average Net Assets++ Average Net Assets++ bursements and Expense Offset)++ Rate+
- -------- ------------ -------------------- --------------------- -------------------------------- ---------
0.47% $42,074 1.12% 0.19% 1.18% 44%
(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
10.01 5,236 1.30 2.12 4.74 29
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
(0.42) 11,984 0.65 4.17 0.82 98
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
3.33 11,663 1.00 1.14 1.13 23
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
8.13 36,558 0.95 1.43 1.03 48
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
3.51 14,134 1.15 0.39 1.33 83
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
10.27 22,657 1.20 0.50 1.41 40
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
See Notes to Financial Statements.
28
This page is intentionally left blank.
29
NOTES TO FINANCIAL STATEMENTS
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
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 June 30, 2006. 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, the Large
Cap Value Equity 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,
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. 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'
administrator 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 Pricing and Valuation Procedures established by the
Board. The Funds' Pricing and Valuation Procedures are performed and
monitored by a Valuation Committee (the "Committee") designated by the
Board. Some of the more common reasons that may necessitate a security be
valued using Pricing and Valuation 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 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 Pricing and Valuation Procedures, the Committee determines the value
after taking into consideration relevant information reasonably available
to the Committee.
30
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular
security's last trade and the time at which a Fund calculates its net asset
value. The closing prices of such securities may no longer reflect their
market value at the time the Fund calculates net asset value if an event
that could materially affect the value of those securities (a "Significant
Event") has occurred between the time of the security's last close and the
time that the Fund calculates net asset value. A Significant Event may
relate to a single issuer or to an entire market sector. If the adviser 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 -- During the period, security
transactions are accounted for no later than one business day following the
trade date. For financial reporting purposes, however, security
transactions are accounted for on trade date on the last business day of
the reporting period. Interest income is recognized on an accrual basis and
includes amortization or accretion of a premium or discount. 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.
Foreign Currency Translation -- The books and records of the Funds 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 Funds do 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.
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 June 30, 2006, the International Equity Fund did not have open foreign
currency contracts.
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, letters of credit or U.S.
government securities. 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
31
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
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.
A fee will be obtained from the borrower if letters of credit or U.S.
government securities are used as collateral. 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 June 30, 2006, the
Portfolio was invested in repurchase agreements, asset backed securities
and corporate bonds (with interest rates ranging from 5.01% to 5.56% and
maturity dates ranging from 07/03/06 to 02/25/21).
The Funds paid fees for security lending for the period ended June 30,
2006, which have been netted against the Securities Lending Income on the
Statements of Operations. These fees are presented below:
Fees ($)
--------
Capital Appreciation Fund...... 959
International Equity Fund...... 360
Investment Grade Bond Fund..... 1,632
Large Cap Relative Value Fund.. 147
Large Cap Value Equity Fund.... 556
Mid-Cap Equity Fund............ 262
Small Cap Value Equity Fund.... 546
Compensating Balances -- If a Fund has a cash overdraft in excess of
$100,000 it is required to deposit an amount equal to 110% of the overdraft
in a compensating balance with its custodian, SunTrust Bank, a whollyowned
subsidiary of SunTrust Banks, Inc., on the following business day. If a
Fund has a positive cash balance in excess of $100,000 it is allowed to
overdraw an amount equal to 90% of the balance from SunTrust Bank on the
following business day. All such deposits to, and overdrafts from, the
compensating balance account are non-interest bearing and are for a
duration of one business day. This does not apply to the International
Equity Fund.
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 exdividend 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 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.
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 the terms of the agreements, the Funds are charged the following
annual fees which are computed daily and paid monthly based upon average
daily net assets. 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% applies on the next $500 million, a discount of
10% applies on amounts over $1 billion. Fee rates for the period January 1,
2006 through June 30, 2006 were as follows:
32
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
Maximum Annual Net Annual
Advisory Fee (%) Fees Paid (%)
---------------- -------------
Capital Appreciation Fund ...... 0.97 0.91
International Equity Fund ...... 1.15 --
Investment Grade Bond Fund ..... 0.50 0.33
Large Cap Relative Value Fund .. 0.85 0.72
Large Cap Value Equity Fund .... 0.80 0.72
Mid-Cap Equity Fund ............ 1.00 0.82
Small Cap Value Equity Fund .... 1.15 0.94
The Investment Adviser has contractually agreed, until August 1, 2007, to
waive fees, and/or reimburse each Fund to the extent necessary to maintain
each Fund's Total Operating Expense as noted below:
Total Operating
Expense (%)
---------------
Capital Appreciation Fund ...... 1.12
International Equity Fund ...... 1.30
Investment Grade Bond Fund ..... 0.65
Large Cap Relative Value Fund .. 1.00
Large Cap Value Equity Fund .... 0.95
Mid-Cap Equity Fund ............ 1.15
Small Cap Value Equity Fund .... 1.20
Also, effective August 1, 2005, the Investment Adviser may retain the
difference between the Total Operating Expense and the actual total expense
ratio to recapture any of its prior waivers or reimbursements, until August
1, 2009. Such repayments shall be made monthly, but only to the extent that
such repayments would not cause the annualized total expense ratio to
exceed the Total Operating Expense in place at that time. As of June 30,
2006, the fee repayments that may potentially be made to the Investment
Adviser are as follows (in thousands):
Amount ($)
----------
Capital Appreciation Fund ...... 16
International Equity Fund ...... 186
Investment Grade Bond Fund ..... 17
Large Cap Relative Value Fund .. 13
Large Cap Value Equity Fund .... 19
Mid-Cap Equity Fund ............ 23
Small Cap Value Equity Fund .... 43
Administration, Fund Accounting and Transfer Agency Agreement -- The Trust
and STI Classic Funds are parties to a Master Services Agreement with BISYS
Fund Services Ohio, Inc. (the "Administrator"), under which the
Administrator provides administrative, fund accounting transfer agent and
shareholder 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
annually, applicable to each additional class of shares over 145 classes of
shares.
The Master Services Agreement provides for the Administrator to pay certain
insurance premiums for the Trust and STI Classic Funds, including $300,000
toward the premium for Directors and Officers Liability/ Errors and
Omissions insurance coverage, and $25,000 toward the premium for Fidelity
Bond coverage. The Administrator has agreed, under the terms of the Master
Services Agreement, to pay certain legal expenses for the benefit of the
Trust and the STI Classic Funds relating to administrative service matters.
The Master Services Agreement further provides for the Administrator to
waive a portion of its fees for the benefit of shareholders. Such payments
and fee waivers are expected to total approximately $400,000 to $650,000
annually, and will not be recouped by the Administrator in subsequent
years.
33
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
Distribution Agreement -- The Trust and BISYS Fund Services Limited
Partnership (the "Distributor") are parties to a Distribution Services
Agreement. The Distributor receives no fees for its distribution services
under this agreement.
Custodian Agreements -- SunTrust Bank acts as Custodian for the Funds
except for the International Equity Fund, which has appointed Brown
Brothers Harriman & Co. as Custodian. The Funds pay custody fees on the
basis of net assets and transaction costs.
Other -- Certain officers of the Trust are also officers of the Investment
Adviser, the Administrator, and / or the Distributor. Such officers receive
no fees from the Trust for serving as officers of the Trust. Each of the
trustees receives an annual retainer fee and an additional fee for each
meeting attended. Trustees receive an additional fee for attendance at
committee meetings. The current fees are as follows:
Chairman ($) Trustee ($)
------------ -----------
Annual Retainer ........ 50,000 40,000
Regular Meeting Fee .... 7,500 6,000
Special Meeting Fee .... 3,750 3,000
Committee Meeting Fee .. 4,500 2,500
Trustees are also reimbursed for certain expenses incurred. The Investment
Adviser provides services to the Trust and the STI Classic Funds to ensure
compliance with applicable laws and regulations. The Investment Adviser has
designated a dedicated compliance staff and an employee to serve as Chief
Compliance Officer. The Investment Adviser received fees totaling $30,000
for these services for the period January 1, 2006 to March 31, 2006. The
Investment Adviser has expanded the scope of its compliance services to the
Trust and the STI Classic Funds and, effective April 1, 2006, receives fees
totaling $475,000 annually. In addition, the Administrator provides an
employee and staff to assist the Chief Compliance Officer for the Trust,
including providing certain related services, and receives an annual fee of
$150,000 for providing these services. The fees above are allocated across
the assets of the Trust and the STI Classic Funds. For the period ended
June 30, 2006, the total amount paid by the Trust related to trustees and
compliance services was $1,286.
The Trust has entered into an agreement with SunTrust Robinson Humphrey, a
division of SunTrust Capital Markets, Inc., which is a direct non-bank
subsidiary of SunTrust Banks, Inc., to act as an agent in placing
repurchase agreements for the Trust. During the period ended June 30, 2006,
the Funds did not engage in any repurchase agreements through SunTrust
Robinson Humphrey and, as a result, no fees were incurred.
4. RISKS
The International Equity Fund invests in securities of foreign issuers in
various countries. Investments in securities of foreign issuers carry
certain risks not ordinarily associated with investments in securities of
U.S. issuers. These risks include future political and economic
developments, and the possible imposition of exchange controls or other
foreign governmental laws and restrictions. In addition, with respect to
certain countries, there is a possibility of expropriation of assets,
confiscatory taxation, political or social instability or diplomatic
developments, which could adversely affect investments in those countries.
Emerging market countries are countries that the World Bank or the United
Nations considers to be emerging or developing. Emerging markets may be
more likely to experience political turmoil or rapid changes in market or
economic conditions than more developed countries. In addition, the
financial stability of issuers (including governments) in emerging market
countries may be more precarious than in other countries. As a result,
there will tend to be an increased risk of price volatility associated with
the Fund's investments in emerging market countries, which may be magnified
by currency fluctuations relative to the U.S. dollar.
The Investment Grade Bond Fund invests primarily in fixed income securities
rated investment grade by at least one national securities rating agency or
unrated securities that the Adviser believes are of comparable quality.
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.
34
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
5. INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales and maturities of
securities, excluding short-term investments and government securities, for
the period ended June 30, 2006, were as follows (in thousands):
Sales and
Purchases ($) Maturities ($)
------------- --------------
Capital Appreciation Fund ...... 19,503 23,954
International Equity Fund ...... 1,456 2,086
Investment Grade Bond Fund ..... 2,098 2,215
Large Cap Relative Value Fund .. 2,703 3,883
Large Cap Value Equity Fund .... 18,210 22,757
Mid-Cap Equity Fund ............ 12,123 13,682
Small Cap Value Equity Fund .... 8,759 8,820
The cost of purchases and proceeds from sales and maturities of long-term
government securities for the Investment Grade Bond Fund during the period
ended June 30, 2006, in thousands, were $9,873 and $11,441, respectively.
6. 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 each applicable country's tax rules and
rates.
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.
At June 30, 2006, 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
losses on 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 June 30, 2006 are
presented on each Fund's Schedule of Portfolio Investments.
The tax character of current year distributions paid and the tax basis of
the current components of accumulated earnings (deficit) will be determined
at the end of the current tax year ending December 31, 2006.
The tax character of distributions paid to shareholders during the fiscal
year ended December 31, 2005 was as follows (in thousands):
Distributions Paid From
--------------------------------- Total
Net 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
* Total distributions paid may differ from the Statements of Changes in Net
Assets because for tax purposes, dividends are recognized when paid.
35
NOTES TO FINANCIAL STATEMENTS (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
The tax character of distributions paid to shareholders during the fiscal
year ended December 31, 2004 was as follows (in thousands):
Distributions Paid From
--------------------------------- Total
Net Investment Net Long Term 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 Statements of Changes in Net
Assets because for tax purposes, dividends are recognized when paid.
Amounts designated as "-" are either $0 or have been rounded to $0.
As of December 31, 2005 the components of accumulated earnings (deficit) on
a tax basis were as follows (in thousands):
Undistributed Unrealized Total Accumulated
Undistributed Long Term Accumulated Capital Appreciation Earnings
Ordinary Capital Accumulated Distributions and Other (Depreciation) (Deficit)
Income($) Gains($) Earnings($) Payable($) Losses($)** ($)*** ($)
------------- ------------- ----------- ------------- ----------- -------------- -----------
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 of the first business day
of the Funds' next taxable year. The Investment Grade Bond Fund has
incurred and will elect to defer $73,000 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, the realization for tax purposes of unrealized
gains/losses on investments in passive foreign investment companies, and
the return of capital adjustments from real estate investment trusts.
Amounts designated as "-" are either $0 or have been rounded to $0.
36
TRUSTEES AND OFFICERS OF THE STI CLASSIC VARIABLE TRUST
STI CLASSIC VARIABLE TRUST June 30, 2006
(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*:
Richard W. Courts, II Trustee Indefinite; since Chairman, Atlantic 61 Cousins Properties,
3435 Stelzer Road November 2001 Investment Company Inc.; Genuine Parts
Columbus, OH 43219 Company; Piedmont
DOB 01/18/36 Medical Center;
SunTrust Bank
Clarence H. Ridley Trustee Indefinite; since Chairman, Haverty 61 Crawford & Co.
3435 Stelzer Road November 2001 Furniture Companies;
Columbus, OH 43219 Partner, King and
DOB 06/03/42 Spaulding LLP (law
firm) (1977 to 2000)
INDEPENDENT TRUSTEES:
Thomas Gallagher Trustee Indefinite; since May President, CEO, Genuine 61 Genuine Parts
3435 Stelzer Road 2000 Parts Company Company; Oxford
Columbus, OH 43219 Industries, Inc.
DOB 11/25/47
F. Wendell Gooch Trustee Indefinite; since May Retired 61 SEI Family of Funds
3435 Stelzer Road 1992
Columbus, OH 43219
DOB 12/03/32
Sidney E. Harris Trustee Indefinite; since Professor (since 61 ServiceMaster
3435 Stelzer Road November 2004 2004) and Dean Company; Total System
Columbus, OH 43219 (1997-2004), J. Mack Services, Inc.;
DOB 07/21/49 Robinson College of Transamerica
Business, Georgia Investors, Inc.
State University
Warren Y. Jobe Trustee Indefinite; since Retired. EVP, Georgia 61 WellPoint, Inc.;
3435 Stelzer Road November 2004 Power Company and SVP, UniSource Energy Corp.;
Columbus, OH 43219 Southern Company HomeBanc Corp.
DOB 11/12/40 (1998-2001)
Connie D. McDaniel Trustee Indefinite; since May Vice President and 61 None
3435 Stelzer Road 2005 Controller, The
Columbus, OH 43219 Coca-Cola Company
DOB 04/10/58
James O. Robbins Trustee Indefinite; since May Retired. President, 61 Cox Communications;
3435 Stelzer Road 2000 CEO, Cox Humana, Inc.
Columbus, OH 43219 Communications, Inc.
DOB 07/04/42 (1985-2005)
Charles D. Winslow Trustee Indefinite; since Retired. Formerly 61 None
3435 Stelzer Road November 2004 Partner, Accenture
Columbus, OH 43219 (consulting)
DOB 07/13/35
* Mr. Courts may be deemed an Interested Trustee because of his directorships
with affiliates of the Investment Adviser. Mr. Ridley may be deemed an
Interested Trustee because of a material business relationship with the
parent of the Investment Adviser.
37
TRUSTEES AND OFFICERS OF THE STI CLASSIC VARIABLE TRUST (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
POSITION(S) TERM OF
HELD OFFICE AND
NAME, ADDRESS, WITH THE LENGTH OF TIME PRINCIPAL OCCUPATION(S)
DATE OF BIRTH GROUP SERVED DURING THE PAST 5 YEARS
- ------------------- -------------- --------------- -------------------------------------------------------
OFFICERS:
R. Jeffrey Young President One-year; Senior Vice President, Relationship Management, BISYS
3435 Stelzer Road since July Fund Services (since 2002); Vice President, Client
Columbus, OH 43219 2004 Services, BISYS Fund Services; (1997-2002)
DOB 08/22/64
Deborah A. Lamb Executive Vice One-year; since Chief Complaince Officer and Managing Director, Trusco
50 Hurt Plaza President, September 2004; Capital Management, Inc. (since 2003); President,
Atlanta, Assistant since November Investment Industry Consultants, LLC (2000-2003)
GA 30303 Secretary; 2003; since
DOB 10/02/52 Chief August 2004
Compliance (respectively)
Officer
Joel B. Engle Treasurer, One-year; Director, Fund Administration, BISYS Fund Services
3435 Stelzer Road Chief since May (since 2006); Small business owner/operator (retail)
Columbus, OH 43219 Financial 2006 (2003-2006); Vice President, Fund Administration, BISYS
DOB 10/31/65 Officer Fund Services (1998-2003)
Cynthia J. Surprise Secretary and One-year; since Senior Counsel, Legal Services, BISYS Fund Services
3435 Stelzer Road Chief Legal February 2005 (since 2004); Director and Counsel, Investors Bank &
Columbus, OH 43219 Officer Trust Company (1999-2004)
DOB 07/08/46
Alaina V. Metz Assistant One-year; Vice President, Blue Sky Compliance, BISYS Fund
3435 Stelzer Road Secretary Since July Services (since 2002); Chief Administrative Officer,
Columbus, OH 43219 2004 Blue Sky Compliance, BISYS Fund Services (1995-2002)
DOB 04/07/67
Jennifer English Assistant One-year; Since Assistant Counsel, Legal Services, BISYS Fund Services
3435 Stelzer Road Secretary November 2005 (since 2005); Assistant Counsel, PFPC, Inc.
Columbus, OH 43219 (2002-2005); Associate Legal Product Manager, Fidelity
DOB 03/05/72 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.
38
ADDITIONAL INFORMATION
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
ANNUAL APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The continuance of the Trust's investment advisory agreements with Trusco
Capital Management, Inc. (the "Adviser") must be specifically approved at least
annually by (i) the vote of the Trustees or by a vote of the shareholders of the
Funds and (ii) the vote of a majority of the Trustees who are not parties to the
agreements or "interested persons" of any party thereto (the "Independent
Trustees"), as defined in the Investment Company Act of 1940, cast in person at
a meeting called for the purpose of voting on such approval. Each year, the
Board of Trustees calls and holds a meeting to decide whether to renew the
Trust's agreements for the upcoming year. In preparation for the meeting, the
Board requests and reviews a wide variety of information from the Adviser. The
Trustees use this information, as well as other information that the Adviser and
other service providers may submit to the Board, to help them decide whether to
renew the agreements for another year.
In considering the renewal of the agreements this year, the Board requested and
received material from the Adviser in preparation for a special meeting of the
Board held on April 24, 2006, and requested and reviewed additional material
from the Adviser in preparation for its quarterly meeting held on May 9, 2006,
at which it specifically considered the renewal of the agreements. Such material
included, among other things, information about: (a) the quality of the
Adviser's investment management and other services; (b) the Adviser's investment
management personnel; (c) the Adviser's operations and financial condition; (d)
the Adviser's brokerage practices (including any soft dollar arrangements) and
investment strategies; (e) the level of the advisory fees that the Adviser
charges the Funds compared with the fees it charges to comparable mutual funds
or accounts; (f) the Funds' overall fees and operating expenses compared with
similar mutual funds; (g) the level of the Adviser's profitability from its
Fund-related operations; (h) the Adviser's compliance systems; (i) the Adviser's
policies and procedures for personal securities transactions; (j) the Adviser's
reputation, expertise and resources in domestic financial markets; and (k) the
Funds' performance compared with similar mutual funds. The Board also received a
memorandum from Fund counsel regarding the responsibilities of Trustees in
connection with their consideration of advisory agreements.
At both meetings, representatives from the Adviser presented additional oral and
written information to the Board to help the Board evaluate the Adviser's fees
and other aspects of the agreements. The Board also considered information
presented by the Adviser and other service providers at meetings throughout the
year. The Trustees discussed the written materials, oral presentations, and any
other information that the Board received, and considered the approval of the
agreements in light of this information.
Based on the Board's deliberations and evaluation of the information it
received, the Board, including the Independent Trustees, approved the agreements
and the selection of the Adviser and determined that the compensation under the
agreements is fair and reasonable in light of the services to be performed. The
Board considered the following specific factors, none of which was controlling,
and made the following conclusions:
NATURE, EXTENT, AND QUALITY OF SERVICES
The Board received and considered information regarding the nature, extent, and
quality of services to be provided to the Funds by the Adviser. In this regard,
the Trustees evaluated, among other things, the Adviser's personnel, experience,
track record, and compliance program. The Board considered the background and
experience of the Adviser's senior management and the expertise of, and amount
of attention expected to be given to the Funds by, its portfolio management
teams. The Board reviewed the qualifications, backgrounds, and responsibilities
of the portfolio managers responsible for the day-to-day management of the
Funds. The Board also reviewed information pertaining to the Adviser's
organizational structure, senior management, investment operations, and other
relevant information. The Board concluded that, within the context of its full
deliberations, the nature, extent, and quality of the services to be provided to
the Funds by the Adviser supported the approval of the agreements.
39
ADDITIONAL INFORMATION (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(Unaudited)
PERFORMANCE
The Board considered the investment performance of each Fund, including any
periods of outperformance and underperformance, both on an absolute basis and a
comparative basis to indices and other funds within the same investment
categories. Specifically, the Board considered each Fund's performance relative
to its peer group and appropriate benchmarks in light of total return, yield,
and market trends. As part of this review, the Board considered the composition
of the peer group and selection criteria, as well as market risk and shareholder
risk expectations. The Board considered the Adviser's explanations regarding
specific performance issues. The Board concluded that, within the context of its
full deliberations, the performance of the Funds and the Adviser supported the
approval of the agreements.
FUND EXPENSES
With respect to advisory fees, the Board considered the rate of compensation
under the agreements and each Fund's net operating expense ratio in comparison
to those of comparable mutual funds. The Trustees also considered information
about average expense ratios of comparable mutual funds in each Fund's peer
group. Finally, the Trustees considered the effect of the Adviser's waiver and
reimbursement of fees and expenses, where applicable, to prevent total expenses
from exceeding a specified amount and that due to these waivers and
reimbursements net operating expenses have been maintained at competitive
levels. The Board concluded that, within the context of its full deliberations,
the expenses of the Funds are reasonable and supported the approval of the
agreements.
PROFITABILITY
The Board reviewed information about the profitability of the Funds to the
Adviser and considered whether the level of profitability was reasonable and
justified in light of the quality of the services rendered to the Funds and in
comparison to other advisory firms. The Board concluded that, within the context
of its full deliberations, the profitability of the Adviser is within the range
the Board considered reasonable.
ECONOMIES OF SCALE
The Board considered the existence of economies of scale and whether they were
passed along to the Funds' shareholders through a graduated advisory fee
schedule or other means, including any fee and expense waivers and
reimbursements by the Adviser. The Board concluded that, within the context of
its full deliberations, the Funds obtain reasonable benefit from economies of
scale.
40
ADDITIONAL INFORMATION (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(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 January 1, 2006 through June 30,
2006.
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.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
01/01/06 06/30/06 01/01/06 - 06/30/06 01/01/06 - 06/30/06
------------- ------------- ------------------- -------------------
Capital Appreciation Fund....... $1,000.00 $1,004.70 $5.57 1.12%
International Equity Fund....... 1,000.00 1,100.10 6.77 1.30
Investment Grade Bond Fund...... 1,000.00 995.80 3.22 0.65
Large Cap Relative Value Fund... 1,000.00 1,033.30 5.04 1.00
Large Cap Value Equity Fund..... 1,000.00 1,081.30 4.90 0.95
Mid-Cap Equity Fund............. 1,000.00 1,035.10 5.80 1.15
Small Cap Value Equity Fund..... 1,000.00 1,102.70 6.26 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.
41
ADDITIONAL INFORMATION (continued)
STI CLASSIC VARIABLE TRUST June 30, 2006
(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.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
01/01/06 06/30/06 01/01/06 - 06/30/06 01/01/06 - 06/30/06
------------- ------------- ------------------- -------------------
Capital Appreciation Fund....... $1,000.00 $1,019.24 $5.61 1.12%
International Equity Fund....... 1,000.00 1,018.35 6.51 1.30
Investment Grade Bond Fund...... 1,000.00 1,021.57 3.26 0.65
Large Cap Relative Value Fund... 1,000.00 1,019.84 5.01 1.00
Large Cap Value Equity Fund..... 1,000.00 1,020.08 4.76 0.95
Mid-Cap Equity Fund............. 1,000.00 1,019.09 5.76 1.15
Small Cap Value Equity Fund..... 1,000.00 1,018.84 6.01 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.
42
This page is intentionally left blank.
43
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-SAR-VT-0606
8/06
ITEM 2. CODE OF ETHICS.
Not applicable -- only for annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable -- only for annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable -- only for annual reports.
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)
NOT APPLICABLE - ONLY EFFECTIVE FOR ANNUAL REPORTS.
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/ Joel B. Engle
-------------------------------------------------------
Joel B. Engle, Treasurer,
STI Classic Variable Trust Funds
Date August 30, 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/ Joel B. Engle
-------------------------------------------------------
Joel B. Engle, Treasurer,
STI Classic Variable Trust Funds
Date August 30, 2006 _____________________________________________
By (Signature and Title)* /s/ R. Jeffrey Young
-------------------------------------------------------
R. Jeffrey Young, President,
STI Classic Variable Trust Funds
Date August 30, 2006 _____________________________________________
* Print the name and title of each signing officer under his or her signature.