ANNUAL
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FINANCIAL REPORT
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STI CLASSIC FUNDS
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A Family of Mutual Funds
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PRIME QUALITY MONEY MARKET FUND
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
May 31, 1998
[Logo Omitted}
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STI CLASSIC PRIME QUALITY MONEY MARKET FUND
-------------------------------------------
The investment objective of the STI Classic Prime Quality Money Market Fund (the
"Fund") is to provide as high a level of current income as is consistent with
the preservation of capital and liquidity by investing exclusively in high
quality money market instruments. The investment discipline which we use in
managing the Fund emphasizes adding incremental value through yield curve,
sector and credit analysis. Investments are made in those sectors, credits, and
segments of the yield curve within the universe of money market eligible
securities which offer the most attractive risk/reward trade-off and current
yield. The maturity structure and average maturity of the Fund are actively
managed to maximize the yield of the Fund over time based on the current market
rates and conditions and on our market outlook.
The Federal Reserve did not raise the Federal Funds Rate during the fiscal year
ending May 31, 1998. Yields for short-term money market securities and money
market funds have fluctuated within a narrow range as the market outlook for
further Fed Reserve action changed.
During most of this period, the Fund maintained an extended average maturity in
order to maximize the yield of the Fund.
STI CLASSIC U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
--------------------------------------------------------
The investment objective of the STI Classic U.S. Government Securities Money
Market Fund (the "Fund") is to provide as high a level of current income as is
consistent with the preservation of capital and liquidity by investing
exclusively in money market eligible securities. Eligible securities include
U.S. Treasury securities, U.S. Government Subsidiary Corporation securities that
are backed by the full faith and credit of the U.S. Government, and repurchase
agreements ("repos") collateralized by U.S. Treasury obligations and U.S.
Government Subsidiary Corporation securities. The investment discipline which is
used in managing the Fund emphasizes adding incremental value through yield
curve analysis. The maturity structure and average maturity of the Fund are
actively managed to maximize the yield of the Fund over time based on the
current market rates and conditions and our market outlook.
The Federal Reserve did not raise the Federal Funds Rate during the fiscal year
ending May 31, 1998. Yields for short-term money market securities and money
market funds have fluctuated within a narrow range as the markets outlook for
further Fed Reserve action changed.
During most of this period, the Fund maintained an extended average maturity in
order to maximize the yield of the Fund.
/S/ Signature Omitted
David S. Yealy
Vice President
1
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STI CLASSIC TAX-EXEMPT MONEY MARKET FUND
----------------------------------------
The STI Classic Tax-Exempt Money Market Fund (the "Fund") seeks to provide as
high a level of current interest income exempt from regular federal income tax
as is consistent with preserving capital and liquidity. The Fund invests in high
quality, U.S. dollar-denominated municipal securities of issuers located in all
fifty states, the District of Columbia, and Puerto Rico.
During most of this period, the Fund maintained a shorter average maturity.
However, we bought longer maturities when market conditions were advantageous in
order to maximize the yield of the Fund.
/S/ Signature Omitted
Mary F. Cernilli
Vice President
2
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STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
PRIME QUALITY MONEY MARKET FUND
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FACE AMOUNT
(000) VALUE (000)
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COMMERCIAL PAPER (23.2%)
FINANCE (6.1%)
Bank of New York
5.540%, 07/07/98 $20,645 $ 20,531
First Chicago
5.460%, 06/01/98 20,000 20,000
General Electric Capital
5.500%, 09/11/98 8,125 7,998
GMAC
5.500%, 06/12/98 20,000 19,966
KFW International
5.600%, 06/15/98 5,000 4,989
5.580%, 06/19/98 6,250 6,233
Prudential Funding
5.500%, 06/05/98 30,000 29,982
Transamerica
5.530%, 07/14/98 17,500 17,384
UBS Financial
5.700%, 06/01/98 12,495 12,495
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139,578
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INDUSTRIAL (15.1%)
Allied Signal
5.630%, 06/09/98 21,200 21,173
British Petroleum America
5.650%, 06/01/98 50,000 50,000
Dominion Semiconductor
5.560%, 07/20/98 35,000 34,735
5.570%, 07/23/98 19,000 18,847
5.580%, 07/23/98 20,000 19,839
Eaton
5.500%, 06/17/98 14,000 13,966
5.480%, 07/31/98 25,000 24,772
General Re
5.510%, 06/25/98 40,000 39,853
J.C. Penney
5.500%, 06/25/98 60,000 59,780
RTZ America
5.500%, 06/12/98 15,000 14,975
5.500%, 06/18/98 15,000 14,961
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FACE AMOUNT
(000) VALUE (000)
- -------------------------------------------------------------
COMMERCIAL PAPER--CONTINUED
U.S. Borax
5.500%, 06/12/98 $16,000 $ 15,973
5.500%, 06/16/98 10,000 9,977
5.500%, 06/22/98 5,000 4,984
5.500%, 07/06/98 2,500 2,487
----------
346,322
----------
UTILITIES (2.0%)
GTE Funding
5.680%, 06/01/98 29,220 29,220
5.550%, 06/18/98 16,000 15,958
----------
45,178
----------
Total Commercial Paper
(Cost $531,078) 531,078
----------
CORPORATE OBLIGATIONS (12.7%)
FINANCE (10.7%)
Associates Corporation
of North America (C)
5.730%, 01/04/99 20,000 19,994
5.640%, 04/23/99 20,000 19,984
Bankers Trust, New York (A) (C)
5.602%, 02/10/99 25,000 24,997
5.679%, 02/19/99 25,000 24,998
Caterpillar Financial Service, MTN
6.960%, 06/01/98 5,000 5,000
6.040%, 03/01/99 3,300 3,306
Caterpillar Financial
Service, MTN (C)
5.755%, 05/09/99 45,000 45,000
Ford Motor Credit, MTN (C)
5.660%, 11/09/98 13,800 13,787
General Electric Capital (C)
5.596%, 11/27/98 50,000 50,000
Household Finance
6.180%, 06/30/98 5,000 5,002
IBM Credit (C)
6.099%, 07/30/98 5,000 5,003
3
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
PRIME QUALITY MONEY MARKET FUND--CONTINUED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
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CORPORATE OBLIGATIONS--CONTINUED
International Lease Finance, MTN
8.250%, 10/19/98 $1,500 $ 1,513
6.570%, 11/16/98 5,000 5,018
John Deere Capital, MTN (C)
5.678%, 09/14/98 5,000 5,002
John Hancock Capital, MTN
6.260%, 08/13/98 2,000 2,001
Morgan Stanley Group, MTN
6.125%, 01/05/99 1,000 1,002
Morgan Stanley Group, MTN (C)
5.872%, 08/22/98 7,850 7,854
5.758%, 12/28/98 1,500 1,501
Paccar Financial, MTN
5.330%, 11/02/98 1,000 998
Toyota Motor Credit, MTN
6.375%, 08/05/98 3,759 3,760
----------
245,720
----------
INDUSTRIAL (0.5%)
Pet
5.750%, 07/01/98 1,800 1,800
Philip Morris
8.625%, 03/01/99 3,000 3,060
7.750%, 05/01/99 2,000 2,031
Texaco Capital, MTN
8.030%, 10/15/98 1,900 1,917
Walt Disney
15.000%, 12/14/98 2,000 2,095
----------
10,903
----------
UTILITIES (1.5%)
Bell Atlantic, MTN
5.300%, 09/01/98 3,200 3,195
Pacific Gas & Electric
5.375%, 08/01/98 5,290 5,285
Virginia Electric & Power
9.375%, 06/01/98 24,950 24,950
----------
33,430
----------
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FACE AMOUNT
(000) VALUE (000)
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Total Corporate Obligations
(Cost $290,053) $ 290,053
----------
BANK NOTES (16.1%)
American Express Centurion (C)
5.606%, 03/24/99 $45,000 45,000
Bank One, Dayton (C)
5.780%, 08/21/98 8,000 8,001
Comerica Bank (C)
5.695%, 10/21/98 50,000 49,992
CoreStates Bank (C)
5.602%, 07/30/98 10,000 10,000
Credit Suisse First Boston,
New York (C)
5.725%, 10/27/98 50,000 50,000
FCC National Bank (C)
5.703%, 04/09/99 50,000 49,983
First National Bank, Chicago (C)
5.722%, 04/19/99 62,000 61,973
PNC Bank N.A. (C)
5.660%, 07/01/98 20,000 19,998
Northern Trust (C)
5.715%, 04/09/99 70,000 69,977
Wachovia Bank N.A.
5.810%, 10/08/98 1,000 1,000
5.600%, 03/08/99 3,500 3,498
----------
Total Bank Notes
(Cost $369,422) 369,422
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (4.6%)
Federal Farm Credit (C)
5.443%, 03/02/99 40,000 39,985
Federal Home Loan Bank
5.745%, 11/12/98 10,000 10,000
FNMA (C) (F)
0.000%, 02/18/99 6,020 5,785
SLMA, Callable 07/06/98 @ 100 (C)
5.365%, 02/08/99 5,000 4,995
SLMA (C)
5.595%, 04/01/99 45,000 44,986
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4
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FACE AMOUNT
(000) VALUE (000)
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Total U.S. Government Agency Obligations
(Cost $105,751) $ 105,751
----------
CERTIFICATES OF DEPOSIT (25.2%)
Bank America
5.625%, 06/18/98 $60,000 60,001
Bank America, Canada
5.570%, 07/28/98 10,000 10,000
Bankers Trust
5.610%, 06/22/98 20,000 20,000
Barclays Bank
5.800%, 04/29/99 50,000 49,974
Bayerische Landesbank (C)
5.666%, 04/21/99 62,000 61,972
Commerzbank (C)
5.720%, 04/14/99 25,000 24,990
5.725%, 04/14/99 40,000 39,986
Credit Suisse First Boston,
New York (C)
5.795%, 04/14/99 25,000 25,000
Deutsche Bank (C)
5.715%, 04/14/99 50,000 49,979
Deutsche Bank AG, New York
5.640%, 03/23/99 18,000 17,986
National Westminster Bank,
New York
5.820%, 05/06/99 59,000 58,969
Rabobank
5.750%, 04/27/99 50,000 49,978
Societe Generale, New York
5.580%, 02/10/99 25,000 24,997
5.800%, 04/01/99 35,000 34,990
Swiss Bank, New York
5.650%, 03/24/99 20,000 19,986
5.810%, 04/29/99 30,000 29,984
----------
Total Certificates of Deposit
(Cost $578,792) 578,792
----------
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FACE AMOUNT
(000) VALUE (000)
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ASSET-BACKED SECURITIES (6.0%)
Americredit Auto Receivable Trust,
Ser 1997-D, Cl A1
5.800%, 11/05/98 $ 7,718 $ 7,718
Americredit Auto Receivable Trust,
Ser 1998-B, Cl A1
5.629%, 06/12/99 29,500 29,500
Arcadia Auto Receivable Trust,
Ser 1997-D, Cl A1
5.888%, 01/15/99 2,834 2,834
Arcadia Auto Receivable Trust,
Ser 1998-A, Cl A1
5.628%, 03/15/99 19,643 19,643
Chase Manhattan Auto Owner
Trust, Ser 1999-B, Cl A1
5.578%, 05/10/99 23,131 23,131
Key Auto Finance Trust,
Ser 1997-2, Cl A1
5.835%, 01/05/99 12,644 12,644
TMS Auto Grantor Trust,
Ser 1997-4, Cl A1
5.909%, 01/08/99 7,308 7,310
WFS Financial Owner Trust,
Ser 1997-C, Cl A1
5.710%, 09/20/98 4,264 4,264
WFS Financial Owner Trust,
Ser 1997-D, Cl A1
5.910%, 12/20/98 30,793 30,793
----------
Total Asset-Backed Securities
(Cost $137,837) 137,837
----------
REPURCHASE AGREEMENTS (12.1%)
Barclays
5.58%, dated 05/29/98, matures
06/01/98, repurchase price $108,814,139
(collateralized by FHLMC and FNMA
obligations: total market
value $110,938,837) (E) 108,764 108,764
5
<PAGE>
STATEMENT OF NET ASSETS/SCHEDULE OF INVESTMENTS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
PRIME QUALITY MONEY MARKET FUND--CONCLUDED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
REPURCHASE AGREEMENTS--CONTINUED
Deutsche Bank
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$50,707,894 (collateralized by
FNMA obligations: total
market value $51,698,292) (E) $50,684 $ 50,684
Greenwich
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$10,313,338 (collateralized by
FHLMC and FNMA
obligations: total market
value $10,514,868) (E) 10,309 10,309
Salomon Brothers
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$89,995,939 (collateralized by
FHLMC and FNMA
obligations: total market
value $91,754,760) (E) 89,954 89,954
Union Bank of Switzerland
5.58%, dated 05/29/98, matures
06/01/98, repurchase price
$17,609,554 (collateralized by
FNMA obligation: market value
$17,956,938) (E) 17,601 17,601
----------
Total Repurchase Agreements
(Cost $277,312) 277,312
----------
Total Investments (99.9%)
(Cost $2,290,245) 2,290,245
----------
OTHER ASSETS AND LIABILITIES, NET (0.1%) 1,805
----------
- ------------------------------------------------------------
VALUE (000)
- ------------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no par
value) based on 1,880,536,125
outstanding shares of beneficial interest $1,880,536
Fund shares of the Investor Class
(unlimited authorization -- no par
value) based on 411,869,991
outstanding shares of beneficial interest 411,870
Overdistribution of net investment income (27)
Accumulated net realized loss
on investments (329)
----------
Total Net Assets 100.0% $2,292,050
==========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $1.00
==========
Net Asset Value, Offering Price and
Redemption Price Per Share --
Investor Shares $1.00
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19.
6
<PAGE>
================================================================================
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
- -------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (14.2%)
U.S. Treasury Notes
5.500%, 02/28/99 $15,000 $ 14,996
6.375%, 05/15/99 40,000 40,258
----------
Total U.S. Treasury Obligations
(Cost $55,254) 55,254
----------
REPURCHASE AGREEMENTS (85.8%)
Barclays
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$20,823,948 (collateralized by
U.S. Treasury Note: market
value $21,231,348) (E) 20,814 20,814
Deutsche Bank
5.52%, dated 5/29/98, matures
06/01/98, repurchase price
$20,200,660 (collateralized by
U.S. Treasury Note and U.S.
Treasury Bond: total market
value $20,596,215) (E) 20,191 20,191
Greenwich
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$20,582,977 (collateralized by
U.S. Government STRIPS: market
value 20,985,820) (E) 20,574 20,574
Merrill Lynch
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$104,953,255 (collateralized by
various GNMA obligations:
total market value
$107,007,565) (E) 104,905 104,905
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
Morgan Stanley
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$105,346,846 (collateralized by
various GNMA obligations:
total market value
$107,908,600) (E) $105,298 $105,298
Salomon Brothers
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$20,534,527 (collateralized by
U.S. Government STRIPS: market
value $20,976,498) (E) 20,525 20,525
Swiss Bank
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$20,290,758 (collateralized by
U.S. Treasury Note and U.S.
Treasury Bond: total market
value $20,697,104) (E) 20,282 20,282
Union Bank of Switzerland
5.52%, dated 05/29/98, matures
06/01/98, repurchase price
$20,541,270 (collateralized by
U.S. Treasury Bills: total market
value $20,943,876) (E) 20,532 20,532
----------
Total Repurchase Agreements
(Cost $333,121) 333,121
----------
Total Investments (89.0% of Net Assets)
(Cost $388,375) 388,375
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19.
7
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
MUNICIPAL BONDS (99.7%)
ALABAMA (1.7%)
McIntosh, Industrial Development
Board, Pollution Control, Ciba-
Geigy Project, Ser A, RB,
VRDN (B) (C) (D)
3.900%, 06/03/98 $3,500 $ 3,500
McIntosh, Industrial Development
Board, Solid Waste Disposal,
Ciba-Geigy Project, RB, VRDN (B)
3.800%, 06/03/98 5,400 5,400
Special Care Facilities, Montgomery
Hospital, RB, VRDN (FGIC) (C) (D)
3.900%, 06/03/98 1,200 1,200
----------
10,100
----------
ARIZONA (0.3%)
Phoenix, Series 95-2, GO, VRDN (C)
3.950%, 06/01/98 1,400 1,400
----------
ARKANSAS (0.2%)
State, Development Financial Authority,
Potlatch Projects, Ser A, RB, VRDN, AMT (B)
(C) (D)
3.900%, 06/03/98 1,000 1,000
----------
CALIFORNIA (1.3%)
Contra Costa County, Multi-Family
Mortgage, Delta Square Project,
Ser A, RB, VRDN (B) (C) (D)
3.700%, 06/03/98 4,200 4,200
Higher Education Loan Authority,
Student Loan Revenue, RB,
VRDN (B) (C) (D)
4.000%, 07/01/98 2,000 2,000
Higher Education Loan Authority,
Student Loan Revenue, Ser E-5,
RB, VRDN, AMT (B) (C) (D)
3.950%, 06/01/98 1,200 1,200
----------
7,400
----------
- -------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -------------------------------------------------------------
COLORADO (0.9%)
North Glen, Industrial Development,
Castle Garden Retirement Center,
VRDN (B) (C) (D)
3.700%, 06/04/98 $1,200 $ 1,200
State, Ser A, RB, TRAN
4.500%, 06/26/98 4,000 4,002
----------
5,202
----------
DELAWARE (2.4%)
State, Economic Development
Authority, Industrial Development,
Delaware Clean Power Project,
Ser A, RB, VRDN, AMT (B) (C) (D)
3.850%, 06/03/98 5,000 5,000
State, Economic Development
Authority, Solid Waste-Sewer
Facilities, Ciba Geigy Project,
Ser A, VRDN (B) (C)
3.950%, 06/01/98 7,100 7,100
State, Educational Development
Authority, VRDN (B) (C) (D)
4.075%, 06/04/98 1,875 1,875
----------
13,975
----------
DISTRICT OF COLUMBIA (1.6%)
District of Columbia,
Ser B, TRAN (B)
4.500%, 09/30/98 7,000 7,014
District of Columbia,
Ser C, TRAN (B)
5.000%, 09/30/98 2,200 2,208
----------
9,222
----------
FLORIDA (2.4%)
Citrus Park, Community
Development, RB,
VRDN (B) (C) (D)
3.900%, 06/03/98 1,500 1,500
8
<PAGE>
================================================================================
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
FLORIDA--CONTINUED
City of Jacksonville, Florida
Pollution Control, Ser 1992, TECP
3.750%, 08/12/98 $ 2,700 $ 2,700
Dade County, Water & Sewer System, Ser 1994,
RB, VRDN (FGIC) (C) (D)
3.900%, 06/03/98 10,000 10,000
----------
14,200
----------
GEORGIA (6.0%)
Cobb-Marietta, Coliseum &
Exhibit Hall Authority,
VRDN (MBIA) (C) (D)
4.020%, 06/04/98 3,145 3,145
Fulton County, Industrial
Development Authority,
American Red Cross Project,
RB, VRDN (B) (C) (D)
3.850%, 06/04/98 1,300 1,300
Gordon County, Development
Authority, Sara Lee Corporation,
VRDN (C) (D)
3.850%, 06/04/98 1,400 1,400
Henry County, Water &
Sewer Authority, VRDN
(AMBAC) (C) (D)
4.020%, 06/04/98 3,710 3,710
Lafayette, Industrial Development
Authority, Blue-Bird Project,
Ser 1991, VRDN (B) (C) (D)
3.850%, 06/04/98 1,000 1,000
Marietta, Housing Finance
Authority, Franklin Walk
Apartments Project, VRDN (B) (C)
3.825%, 06/04/98 1,600 1,600
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
GEORGIA--CONTINUED
Monroe County, Industrial
Development Authority,
Forsyth Inns Project,
VRDN (B) (C) (D)
3.900%, 06/03/98 $2,525 $ 2,525
Municipal Electric Authority,
TECP (B)
3.750%, 07/09/98 4,500 4,500
Municipal Electric Authority,
VRDN (MBIA) (C)
4.020%, 06/04/98 4,675 4,675
State, GO
6.750%, 09/01/98 2,000 2,016
State, Municipal Electric Authority,
RB, VRDN (B) (C) (D)
3.850%, 06/03/98 4,000 4,000
State, Municipal Electric Authority,
RB, VRDN (FGIC) (C) (D)
4.020%, 06/04/98 3,000 3,000
Summerville, Development
Authority, Ser 1997, RB,
VRDN, AMT (B) (C)
4.000%, 07/02/98 2,000 2,000
----------
34,871
----------
HAWAII (0.7%)
State, GO, VRDN (MBIA) (C)
4.020%, 06/03/98 4,260 4,260
----------
IDAHO (0.5%)
Nez Pierce County, Pollution
Control, Potlatch Project,
RB, VRDN (B) (C) (D)
3.800%, 06/03/98 2,000 2,000
3.800%, 06/04/98 1,000 1,000
----------
3,000
----------
9
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND--CONTINUED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
ILLINOIS (11.1%)
Bloomington, Airport Authority,
GO, VRDN (B) (C) (D)
3.850%, 06/03/98 $ 1,400 $ 1,400
Chicago, O'Hare International
Airport (AMBAC) (D)
3.800%, 06/01/98 8,890 8,890
Hoffman Estates, Economic
Development Project (AMBAC)
4.500%, 11/15/98 2,145 2,150
Oak Forest, Mode-Homewood
Pool, RB, VRDN (B) (C) (D)
3.800%, 06/03/98 10,000 10,000
Savanna, Industrial Development
Authority, Metform Project, Ser A,
RB, VRDN (B) (C) (D)
3.950%, 06/03/98 500 500
Savanna, Industrial Development
Authority, Metform Project,
Ser B, RB, VRDN (B) (C) (D)
3.950%, 06/03/98 1,400 1,400
State, Development Financial
Authority, Chicago Symphony,
RB, VRDN (B) (C) (D)
3.800%, 06/03/98 5,000 5,000
State, Development Financial
Authority, Museum Contemporary
Art Project, RB, VRDN (C) (D)
3.800%, 06/03/98 4,800 4,800
State, Development Financial
Authority, Pollution Control,
Illinois Power, Ser A, RB,
VRDN (B) (C)
3.900%, 06/03/98 5,000 5,000
State, Development Financial Authority, Derby
Project, RB, VRDN, AMT (B) (C) (D)
3.950%, 06/03/98 1,000 1,000
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
ILLINOIS--CONTINUED
State, Educational Facilities Authority,
Chicago Childrens Museum,
RB, VRDN (B) (C) (D)
3.800%, 06/03/98 $1,600 $ 1,600
State, Educational Facilities Authority,
Museum of Science and Industry,
RB, VRDN (B) (C)
3.800%, 06/04/98 5,800 5,800
State, Health Facilities Authority,
RB, VRDN (C)
4.020%, 06/04/98 3,000 3,000
State, Health Facilities Authority,
Advocate Health Care, Ser B,
RB, VRDN (C) (D)
4.050%, 06/03/98 2,900 2,900
State, Health Facilities Authority,
Health Care Project-A,RB,
VRDN (B) (C) (D)
3.850%, 08/17/98 3,800 3,800
State, Health Facilities Authority,
Streeterville Corporation,
RB, VRDN (B) (C) (D)
3.800%, 06/03/98 2,000 2,000
State, Health Facilities Authority,
Streeterville Corporation,
Ser A, RB, VRDN (B) (C)
3.800%, 06/03/98 1,500 1,500
State, Health Facilities Authority,
University of Chicago Hospital
Project, Ser C, RB,
VRDN (MBIA) (C) (D)
3.850%, 06/03/98 4,000 4,000
----------
64,740
----------
10
<PAGE>
================================================================================
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
INDIANA (3.9%)
Allen County, Industrial Economic
Development Authority, Mattel
Power Wheels Project, RB,
VRDN, AMT (C) (D)
4.150%, 06/03/98 $1,500 $ 1,500
Fort Wayne, Economic Development
Authority, ND Tech Project,
RB, VRDN, AMT (A) (B) (C) (D)
3.950%, 06/03/98 1,000 1,000
Indianapolis, Industrial Economic
Development Authority, Allied
Signal, RB, VRDN (A) (C) (D)
3.950%, 06/03/98 3,500 3,500
Indianapolis, Multi-Family Housing,
RB, VRDN, AMT (B) (C) (D)
4.050%, 06/03/98 6,200 6,200
Michigan City, Industrial Economic
Development, Performance
Packaging, RB, VRDN,
AMT (A) (B) (C) (D)
3.950%, 06/03/98 900 900
Princeton, Pollution Control,
PSI Energy Project, RB,
VRDN (B) (C)
3.900%, 06/01/98 2,800 2,800
Rockport County, Pollution
Control, Aep Generating
Company Project, Ser B, RB,
VRDN (AMBAC) (C) (D)
4.000%, 06/01/98 700 700
State, Development Financial
Authority, Culver Educational
Facilities, RB, VRDN (B) (C)
3.800%, 06/03/98 2,000 2,000
State, Development Financial
Authority, Dekko International
Project, RB, VRDN (B) (C) (D)
4.000%, 06/04/98 610 610
- -------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- -------------------------------------------------------------
INDIANA--CONTINUED
State, Development Financial
Authority, Educational Facility,
Indiana Historical Society, RB,
VRDN (B) (C)
3.800%, 06/03/98 $1,200 $ 1,200
State, Health Facility Financing
Authority, Clarian Health Partners,
Ser B, RB, VRDN (C) (D)
4.000%, 06/03/98 2,000 2,000
----------
22,410
----------
IOWA (0.4%)
West Des Moines, Commercial
Development, Greyhound Lines
Project, VRDN (B) (C) (D)
3.850%, 06/03/98 2,500 2,500
----------
KENTUCKY (1.7%)
Jefferson County, Industrial Building,
Fisher-Klosterman Project, RB,
VRDN, AMT (B) (C) (D)
4.000%, 06/04/98 2,335 2,335
Pendleton County, RB,
VRDN (B) (C) (D)
3.950%, 07/01/98 3,400 3,400
State, Asset/Liability Common
General Fund, Ser A, RB, TRAN
4.500%, 06/25/98 2,500 2,501
State, Economic Development,
Hospital Facilities, RB,
VRDN (B) (C) (D)
3.850%, 06/04/98 1,400 1,400
----------
9,636
----------
LOUISIANA (2.2%)
Plaqeumines, Port Facilities,
International Marine Terminal
Project, RB, VRDN (B) (C) (D)
3.750%, 09/15/98 1,000 1,000
11
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND--CONTINUED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
LOUISIANA--CONTINUED
Saint James Parish, Pollution
Control Revenue, TECP
3.900%, 06/16/98 $5,000 $ 5,000
State, Offshore Terminal Authority,
Deepwater Port, First Stage
A-Loop Project, Ser A, RB,
VRDN (B) (C) (D)
3.800%, 06/03/98 2,000 2,000
State, Port Authority, Occidental
Petroleum Project,
VRDN (B) (C) (D)
3.850%, 06/03/98 4,500 4,500
----------
12,500
----------
MARYLAND (2.4%)
Baltimore County, Allied Signal
Project, VRDN (B) (C) (D)
3.900%, 06/03/98 1,000 1,000
Baltimore County, Gas
& Electric, TECP
3.300%, 06/04/98 4,000 4,000
3.800%, 06/04/98 100 100
State, Health & Higher Education
Authority, Pooled Loan Program,
Ser B, VRDN (B) (C) (D)
3.700%, 06/03/98 5,000 5,000
University of Maryland, Revolving
Equipment Loan Program,
Ser B, RB, VRDN (B) (C)
3.750%, 06/03/98 4,100 4,100
----------
14,200
----------
MICHIGAN (4.2%)
Delta County, Environmental
Improvement Revenue, Escanaba
Paper Project, RB, VRDN,
AMT (B) (C)
4.000%, 06/01/98 2,500 2,500
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
MICHIGAN--CONTINUED
Oakland County, Economic
Development Authority, Moody
Family Ltd. Project, RB, VRDN,
AMT (A) (B) (C)
3.900%, 06/03/98 $1,000 $ 1,000
State, Ser 1985, TECP
3.750%, 08/11/98 7,100 7,100
State, Housing Development
Authority, RB, VRDN,
AMT (B) (C) (D)
3.900%, 06/03/98 1,000 1,000
State, Housing Development
Authority, Harbortown, RB,
VRDN (B) (C) (D)
3.825%, 06/04/98 3,000 3,000
State, Industrial Development
Authority, RB,
VRDN (A) (B) (C) (D)
3.600%, 06/02/98 3,000 3,000
State, Municipal Bond
Authority, Ser B
4.500%, 07/02/98 4,000 4,002
State, Strategic Fund Pollution
Control, Dow Chemical, TECP
3.850%, 06/03/98 3,000 3,000
----------
24,602
----------
MISSOURI (1.5%)
Carthage, Industrial Development
Authority, Schrieber Project, RB,
VRDN, AMT (B) (C) (D)
3.950%, 06/03/98 3,100 3,100
Saint Charles County, Industrial
Development Authority, Casalon
Apartment Project, Ser 95, RB,
VRDN (B) (C) (D)
3.850%, 06/04/98 3,100 3,100
12
<PAGE>
================================================================================
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
MISSOURI--CONTINUED
State, Custody Receipt, Third Street
Building Project, Ser A,
VRDN (C) (D)
3.900%, 06/03/98 $ 2,000 $ 2,000
State, Environmental Improvement
& Energy Resource Authority,
Utilicorp United Project, RB,
VRDN, AMT (B) (C) (D)
3.950%, 06/03/98 700 700
----------
8,900
----------
NEBRASKA (0.3%)
Investment Finance Authority,
Single Family Mortgage, Ser B,
RB, VRDN (FGIC) (C) (D)
3.700%, 07/15/98 2,000 2,000
----------
NEVADA (2.1%)
Clark County, Airport Improvement
Authority, Ser A-1, RB,
VRDN (B) (C) (D)
3.900%, 06/03/98 4,200 4,200
Clark County, School District,
VRDN (C)
3.920%, 06/04/98 8,000 8,000
----------
12,200
----------
NEW HAMPSHIRE (1.0%)
State, Housing Finance Authority,
Multi-Family Housing, Fairways
Project, RB, VRDN, AMT (B) (C) (D)
4.000%, 06/03/98 5,000 5,000
State, Pollution Control Authority,
RB, VRDN (B) (C) (D)
3.900%, 06/03/98 800 800
----------
5,800
----------
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
NEW JERSEY (1.7%)
State, TECP
3.900%, 06/15/98 $10,000 $ 10,000
----------
NEW MEXICO (2.0%)
Educational Assistance Foundation,
Student Loan Program, RB,
VRDN (AMBAC) (C)
4.040%, 06/04/98 $2,720 2,720
State, TRAN
4.500%, 06/30/98 3,000 3,002
State, Ser A, TRAN
4.500%, 06/30/98 3,000 3,002
State, Financial Authority,
Ser B, RB
3.400%, 01/01/99 2,840 2,840
----------
11,564
----------
NEW YORK (6.2%)
Long Island, Power Authority,
Ser 3, TECP (B)
3.750%, 08/19/98 2,000 2,000
Long Island, Power Authority,
Ser 4, TECP (B)
3.750%, 08/19/98 3,000 3,000
Nassau County, Ser B, TRAN
4.250%, 08/31/98 5,000 5,007
Nassau County, Ser C, TRAN
4.250%, 12/22/98 4,500 4,513
New York, Ser A, TRAN
4.500%, 06/30/98 4,000 4,003
Southeast Industrial Development,
Unilock Project, RB, VRDN,
AMT (B) (C) (D)
3.950%, 06/03/98 6,200 6,200
State, Urban Development
Corporation, Senior Lien,
VRDN (C)
3.922%, 06/04/98 11,600 11,600
----------
36,323
----------
13
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND--CONTINUED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
NORTH CAROLINA (1.5%)
Mecklenburg County, Industrial
Facilities & Pollution Control,
Sterigenics International Project,
RB, VRDN, AMT (A) (B) (C) (D)
3.950%, 06/03/98 $2,000 $ 2,000
State, Eastern Municipal Power
Authority, TECP (B)
3.850%, 06/11/98 3,950 3,950
State, Educational Facilities,
Guilford College,
VRDN (B) (C) (D)
3.900%, 06/03/98 2,200 2,200
State, Housing Finance Agency,
Ser F, RB, VRDN (B) (C) (D)
3.450%, 09/01/98 485 485
----------
8,635
----------
NORTH DAKOTA (0.3%)
Mercer County, Solid Waste Disposal
Authority, United Power Project,
RB, VRDN (B) (C) (D)
3.800%, 06/01/98 2,000 2,000
----------
OHIO (6.8%)
Cincinnati, Student Loan Funding,
Ser A-1, VRDN
3.950%, 06/03/98 5,000 5,000
Lorraine County, Catholic
Healthcare Partners, TECP
3.400%, 06/10/98 10,000 10,000
State, Air Quality Development
Authority, JMG Limited
Partnership, Ser A, RB, VRDN,
AMT (B) (C) (D)
4.000%, 06/03/98 3,000 3,000
State, Higher Education Authority,
Lake Erie Project,
VRDN (B) (C) (D)
3.900%, 06/04/98 4,945 4,945
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
OHIO--CONTINUED
State, Pollution Control Authority,
Duquesne Project, RB, VRDN,
AMT (B) (C) (D)
4.000%, 06/03/98 $ 3,000 $ 3,000
State, Solid Waste Disposal, USG
Corporation Project, RB,
VRDN (B) (C) (D)
3.700%, 06/03/98 13,700 13,700
----------
39,645
----------
OKLAHOMA (0.3%)
State, Water Resources, Broad
Street Program, RB,
VRDN (B) (C) (D)
3.550%, 09/01/98 1,400 1,400
----------
OREGON (1.0%)
Metropolitan Service District,
Convention Center, Ser A, GO
5.500%, 07/01/98 1,000 1,001
Port of Saint Helens, Pollution
Control, Portland General
Electric, Ser A, RB,
VRDN (B) (C) (D)
3.900%, 06/01/98 2,400 2,400
State, Housing and Community
Service Department, Single
Family Mortgage Program,
Ser C, RB (D)
3.750%, 05/13/99 2,500 2,500
----------
5,901
----------
PENNSYLVANIA (3.6%)
Beaver County, Industrial
Development Authority,
Duquesne Light Company
Project, Ser B, RB, VRDN (C) (D)
3.850%, 06/03/98 1,000 1,000
14
<PAGE>
================================================================================
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
PENNSYLVANIA--CONTINUED
Lackawanna County,
VRDN (AMBAC) (C)
4.020%, 06/04/98 $ 3,585 $ 3,585
Philadelphia, Ser A, TRAN
4.500%, 06/30/98 10,000 10,004
State, Ser A, VRDN (C) (D)
3.920%, 06/04/98 6,500 6,500
----------
21,089
----------
SOUTH CAROLINA (0.9%)
York County, Pollution Control,
Ser N-3, RB, VRDN (C) (D)
3.500%, 09/15/98 5,000 4,999
----------
TENNESSEE (1.9%)
Covington, Industrial Development
Board, Charms Project, RB, VRDN,
AMT (B) (C) (D)
3.950%, 06/03/98 3,000 3,000
Hamilton County, Industrial
Development Board, Lease
Rent, RB (FGIC)
5.100%, 09/01/98 500 501
Hamilton County, Industrial
Development Board, Tennessee
Aquarium Project, RB,
VRDN (B) (C) (D)
3.900%, 06/04/98 3,000 3,000
Memphis-Shelby County, Industrial
Development Board, Ponderosa
Fibres American Project, RB,
VRDN, AMT (A) (B) (C) (D)
4.000%, 06/04/98 1,400 1,400
Nashville & Davidson County,
Industrial Development Authority,
Multi-Family Mortgage,
Chimneytop II Project, RB,
VRDN (B) (C) (D)
3.850%, 06/03/98 1,325 1,325
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
TENNESSEE--CONTINUED
Nashville & Davidson County,
Vanderbilt University, RB,
VRDN (C) (D)
3.650%, 07/15/98 $ 2,000 $ 2,000
----------
11,226
----------
TEXAS (14.1%)
Brazos River Authority, AMT, TECP
3.850%, 06/03/98 3,950 3,950
Brazas River Authority, AMT, TECP (B)
3.650%, 06/05/98 6,000 6,000
Brazas River Authority, Pollution
Control, AMT, TECP (B)
3.650%, 09/04/98 5,170 5,170
Brazos River Authority, Pollution
Control, Ser 1988, AMT, TECP (B)
3.400%, 06/25/98 2,700 2,700
Brazos River Authority, Pollution
Control, Utilities Electric, Ser C,
RB, VRDN, AMT (AMBAC) (C) (D)
4.150%, 06/01/98 2,000 2,000
Brownsville, Utility Systems,
Ser A, TECP
3.500%, 06/11/98 4,000 4,000
Georgetown, Higher Education
Financing Authority, Southwestern
University Project, Ser 1984, RB,
VRDN (B) (C) (D)
3.900%, 06/03/98 2,000 2,000
Gulf Coast, Industrial Development
Authority, Amoco Oil Project, RB,
VRDN (C) (D)
3.800%, 06/01/98 1,000 1,000
Gulf Coast, Waste Disposal,
Texwater Pollution Control,
Amoco Oil - Amoco Chems,
RB, VRDN (C) (D)
3.750%, 07/15/98 5,000 5,001
15
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND--CONTINUED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
TEXAS--CONTINUED
Harris County, Health Facilities
Authority, Memorial Hospital
Project, Ser B, RB, VRDN (C) (D)
3.900%, 06/03/98 $ 1,500 $ 1,500
Harris County, Housing Finance
Corporation, Ser 1985, RB,
VRDN (C) (D)
4.075%, 06/04/98 700 700
Harris County, Industrial
Development Authority, Lubrizol
Project, RB, VRDN (C) (D)
3.850%, 06/03/98 1,600 1,600
Lone Star, Airport Improvement
Authority, RB, VRDN (B) (C) (D)
4.000%, 06/01/98 1,700 1,700
Sabine, River Authority, Pollution
Control, RB, VRDN
(MBIA) (C) (D)
3.700%, 06/03/98 8,000 8,000
San Antonio, Gas Ser A, TECP
3.750%, 07/09/98 5,000 5,000
State, RB, VRDN (C) (D)
3.825%, 06/04/98 4,935 4,935
State, Ser A, TRAN
4.750%, 08/31/98 10,000 10,022
State, Higher Education Authority,
RB, VRDN (MBIA) (C) (D)
4.000%, 06/03/98 5,000 5,000
State, Public Finance
Authority, TECP
3.450%, 08/03/98 10,000 10,000
State, Veterans Housing Assistance,
Ser A-1, GO, AMT
3.800%, 06/03/98 2,000 2,000
----------
82,278
----------
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
UTAH (3.0%)
Carbon County, Pollution Control
Authority, Pacificorp Project, RB,
VRDN (AMBAC) (C) (D)
4.000%, 06/01/98 $ 1,600 $ 1,600
Intermountain Power Agency,
TECP (AMBAC)
3.800%, 06/04/98 5,000 5,000
Intermountain Power Agency,
Power Supply, Ser B, TECP
3.650%, 06/09/98 5,000 5,000
Intermountain Power Agency,
Power Supply, Ser E, RB,
VRDN (B) (C) (D)
3.450%, 09/15/98 1,000 1,000
Intermountain Power Agency,
Power Supply, Ser F, RB,
VRDN (B) (C) (D)
3.800%, 06/15/98 4,000 4,000
State, Water Finance Agency,
Pooled Loan, Ser A, RB (MBIA)
4.050%, 10/01/98 500 500
----------
17,100
----------
VIRGINIA (3.0%)
Alexandria, Redevelopment &
Housing Authority, Multi-Family
First Mortgage, Goodwin Project,
Ser B, RB, VRDN (A) (B) (C) (D)
4.000%, 06/01/98 2,000 2,000
Chesterfield County, Industrial
Development Authority, Allied
Signal Project, RB, VRDN (C)
3.950%, 06/03/98 3,000 3,000
Commonwealth, Ser 1994,
VRDN (C) (D)
4.020%, 06/04/98 4,000 4,000
16
<PAGE>
================================================================================
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
VIRGINIA--CONTINUED
Front Royal & Warren County,
Industrial Development Authority,
Pen Tab Industries Project, RB,
VRDN, AMT (A) (B) (C) (D)
3.900%, 06/04/98 $2,800 $ 2,800
State, Housing Development
Authority, Ser C, RB, VRDN (B) (C)
3.800%, 06/10/98 5,800 5,800
----------
17,600
----------
WASHINGTON (1.9%)
Pierce County, Washington
Economic Development,
Weyerhaeuser Real Estate
Project, RB, VRDN (B) (C) (D)
3.850%, 06/03/98 3,000 3,000
Port of Seattle, VRDN (C) (D)
3.900%, 06/03/98 1,400 1,400
State, Public Power Supply System,
Nuclear Project #1, Ser 1A-3,
RB, VRDN (B) (C) (D)
3.750%, 06/03/98 3,400 3,400
State, Student Loan Finance
Association, VRDN,
AMT (B) (C) (D)
3.750%, 06/04/98 3,000 3,000
----------
10,800
----------
WEST VIRGINIA (0.7%)
Marshall County, Pollution Control
Authority, Allied Signal Project,
RB, VRDN (A) (C) (D)
3.950%, 06/03/98 2,000 2,000
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
WEST VIRGINIA--CONTINUED
Marshall County, Pollution
Control Authority, PPG
Industries Project, RB,
VRDN (C) (D)
4.000%, 06/04/98 $2,000 $ 2,000
----------
4,000
----------
WISCONSIN (0.9%)
Carlton, Pollution Control, Power
and Light Company, Project B,
RB, VRDN (C) (D)
4.000%, 06/01/98 1,200 1,200
Janesville, School District, TRAN
4.100%, 09/21/98 2,250 2,251
Wisconsin, Health Facilities,
Saint Lukes Medical Center,
RB, VRDN (B) (C) (D)
3.800%, 06/03/98 1,900 1,900
----------
5,351
----------
WYOMING (1.1%)
Sweetwater, VRDN (C)
3.600%, 06/03/98 4,600 4,600
Uinta County, Pollution Control,
Amoco Company, RB,
VRDN (C) (D)
3.850%, 12/01/98 2,000 2,000
----------
6,600
----------
Total Municipal Bonds
(Cost $578,629) 580,629
----------
17
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
TAX-EXEMPT MONEY MARKET FUND--CONCLUDED
- ------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- ------------------------------------------------------------
CASH EQUIVALENTS (0.1%)
AIM Management Institutional
Tax-Free Portfolio (C) $453 $ 454
SEI Tax-Exempt Trust Institutional
Tax-Free Portfolio (C) 123 124
--------
Total Cash Equivalents
(Cost $578) 578
--------
Total Investments (99.8%)
(Cost $581,207) 581,207
--------
OTHER ASSETS AND LIABILITIES, NET (0.2%) 1,354
--------
- ------------------------------------------------------------
VALUE (000)
- ------------------------------------------------------------
NET ASSETS:
Fund shares of the Trust Class
(unlimited authorization -- no
par value) based on 448,021,834
outstanding shares of beneficial interest $448,022
Fund shares of the Investor Class
(unlimited authorization -- no
par value) based on 134,543,601
outstanding shares of beneficial interest 134,544
Overdistributed net investment income (1)
Accumulated net realized loss
on investments (4)
--------
Total Net Assets (100.0%) $582,561
========
Net Asset Value, Offering and Redemption
Price Per Share -- Trust Shares $1.00
========
Net Asset Value, Offering Price and
Redemption Price Per Share --
Investor Shares $1.00
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS, PLEASE SEE PAGE 19.
18
<PAGE>
================================================================================
KEY TO ABBREVIATIONS USED IN
THE STATEMENT OF NET ASSETS
AMBAC Security insured by the American Municipal
Bond Assurance Company
AMT Alternative Minimum Tax
Cl Class
FGIC Security insured by the Financial Guaranty
Insurance Corporation
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
GO General Obligation
MBIA Security insured by the Municipal Bond
Investors Assurance
MTN Medium Term Note
RB Revenue Bond
Ser Series
SLMA Student Loan Marketing Association
STRIPS Separately Traded Registered Interest and
Principal Security
TECP Tax Exempt Commercial Paper
TRAN Tax & Revenue Anticipation Note
VRDN Variable Rate Demand Note
(A) Private Placement Security
(B) Securities are held in connection with a letter
of credit issued by a major bank.
(C) Variable rate security. The rate reported on the
Statement of Net Assets is the rate in effect on May 31, 1998.
(D) Put and demand features exist requiring the
issuer to repurchase the instrument prior to maturity.
(E) Tri-Party Repurchase Agreement
(F) Zero Coupon Bond
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (000)
================================================================================
STI CLASSIC FUNDS FOR THE PERIOD ENDED MAY 31, 1998
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES
MONEY MARKET
FUND
---------------
<S> <C>
Assets:
Investments at market value (Cost $388,375) ....................................................... $388,375
Accrued income .................................................................................... 2,030
Receivables for investment securities sold ........................................................ 49,510
Receivables for capital shares sold ............................................................... 2
Other assets ...................................................................................... 67
--------
Total Assets ...................................................................................... 439,984
--------
Liabilities:
Accrued expenses .................................................................................. (378)
Distribution payable .............................................................................. (1,799)
Other liabilities ................................................................................. (1,564)
--------
Total Liabilities ................................................................................. (3,741)
--------
Net Assets:
Fund Shares of the Trust Shares (unlimited authorization -- no par value)
based on 377,407,674 outstanding shares of beneficial interest .................................. 377,408
Fund Shares of the Investor Shares (unlimited authorization -- no par value)
based on 58,751,567 outstanding shares of beneficial interest ................................... 58,751
Accumulated net realized gain on investments ...................................................... 84
--------
Total Net Assets .................................................................................. $436,243
========
Net Asset Value, Offering Price and Redemption Price Per Share -- Trust Shares ..................... $ 1.00
========
Net Asset Value, Offering Price and Redemption Price Per Share -- Investor Shares .................. $ 1.00
========
</TABLE>
20
<PAGE>
[This Page Left Intentionally Blank]
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
STI CLASSIC FUNDS FOR THE YEAR ENDED MAY 31, 1998
<TABLE>
<CAPTION>
TAX-EXEMPT
PRIME QUALITY U.S. GOVERNMENT MONEY
MONEY MARKET SECURITIES MONEY MARKET
FUND MARKET FUND FUND
--------- --------- ---------
06/01/97- 06/01/97- 06/01/97-
05/31/98 05/31/98 05/31/98
--------- --------- ---------
<S> <C> <C> <C>
Interest Income .................................................. $106,833 $21,869 $20,595
-------- ------- -------
Expenses:
Investment Advisory Fees ...................................... 12,211 2,564 3,101
Less: Investment Advisory Fees Waived ......................... (2,699) (580) (881)
Administrator Fees ............................................ 1,356 283 408
Less: Administrator Fees Waived ............................... (571) (47) (10)
Transfer Agent Fees -- Trust Shares ........................... 16 19 19
Transfer Agent Fees -- Investor Shares ........................ 28 5 19
Transfer Agent Out of Pocket Fees ............................. 209 47 63
Printing Expenses ............................................. 143 44 47
Custody Fees .................................................. 72 22 24
Professional Fees ............................................. 104 26 31
Trustee Fees .................................................. 29 10 9
Registration Fees ............................................. 322 51 66
Distribution Fees -- Investor Shares .......................... 716 97 190
Less: Distribution Fees Waived -- Investor Shares ............. (251) (27) (64)
Insurance and Other Fees ...................................... 16 13 5
-------- ------- -------
Total Expenses ................................................ 11,701 2,527 3,027
-------- ------- -------
Net Investment Income ......................................... 95,132 19,342 17,568
-------- ------- -------
Net Realized Gain on Securities Sold ............................. 50 146 --
-------- ------- -------
Net Increase in Net Assets from Operations ....................... $ 95,182 $19,488 $17,568
======== ======= =======
<FN>
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
22
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
================================================================================
STI CLASSIC FUNDS FOR THE YEARS ENDED MAY 31, 1998
<TABLE>
<CAPTION>
PRIME QUALITY U.S. GOVERNMENT SECURITIES TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
--------------------- -------------------------- ---------------------
06/01/97- 06/01/96- 06/01/97- 06/01/96- 06/01/97- 06/01/96-
05/31/98 05/31/97 05/31/98 05/31/97 05/31/98 05/31/97
---------- --------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income .............................. $ 95,132 $ 73,281 $ 19,342 $ 17,800 $ 17,568 $ 12,958
Net Realized Gain (Loss) on Investments ............ 50 (121) 146 (51) -- 10
---------- ---------- -------- --------- ---------- ---------
Increase in Net Assets from Operations ......... 95,182 73,160 19,488 17,749 17,568 12,968
---------- ---------- -------- --------- ---------- ---------
Distributions to Shareholders:
Net Investment Income:
Trust Shares ..................................... (77,500) (60,224) (16,621) (14,924) (13,717) (10,054)
Investor Shares .................................. (17,632) (13,057) (2,723) (2,876) (3,852) (2,904)
Capital Gains:
Trust Shares ..................................... -- -- -- -- -- --
Investor Shares .................................. -- -- -- -- -- --
---------- ---------- -------- --------- ---------- ---------
Total Distributions ............................ (95,132) (73,281) (19,344) (17,800) (17,569) (12,958)
---------- ---------- -------- --------- ---------- ---------
Capital Transactions (1):
Trust Shares:
Proceeds from Shares Issued ...................... 3,915,486 2,786,281 776,773 705,839 1,039,352 980,872
Reinvestment of Cash Distributions ............... 3,699 2,069 380 274 -- --
Cost of Shares Redeemed .......................... (3,125,552) (2,752,496) (744,136) (687,215) (924,334) (921,487)
---------- ---------- -------- --------- ---------- ---------
Increase in Net Assets From Trust
Share Transactions .............................. 793,633 35,854 33,017 18,898 115,018 59,385
---------- ---------- -------- --------- ---------- ---------
Investor Shares:
Proceeds from Shares Issued ...................... 806,517 928,946 178,312 182,325 346,323 305,724
Reinvestment of Cash Distributions ............... 15,979 10,375 2,600 2,379 3,314 2,569
Cost of Shares Redeemed .......................... (694,228) (871,451) (185,358) (180,124) (317,112) (301,505)
---------- ---------- -------- --------- ---------- ---------
Increase (Decrease) in Net Assets From Investor
Share Transactions .............................. 128,268 67,870 (4,446) 4,580 32,525 6,788
---------- ---------- -------- --------- ---------- ---------
Increase in Net Assets From Share Transactions ... 921,901 103,724 28,571 23,478 147,543 66,173
---------- ---------- -------- --------- ---------- ---------
Total Increase in Net Assets ................... 921,951 103,603 28,715 23,427 147,542 66,183
---------- ---------- -------- --------- ---------- ---------
Net Assets:
Beginning of Period ................................ 1,370,099 1,266,496 407,528 384,101 435,019 368,836
---------- ---------- -------- --------- ---------- ---------
End of Period ...................................... $2,292,050 $1,370,099 $436,243 $ 407,528 $ 582,561 $ 435,019
========== ========== ======== ========= ========== =========
(1) Shares Issued and Redeemed:
Trust Shares:
Shares Issued .................................... 3,915,486 2,786,281 776,773 705,839 1,039,352 980,872
Shares Issued in Lieu of Cash Distributions ...... 3,699 2,069 380 274 -- --
Shares Redeemed .................................. (3,125,552) (2,752,496) (744,136) (687,215) (924,334) (921,487)
---------- ---------- -------- --------- ---------- ---------
Net Trust Share Transactions ................... 793,633 35,854 33,017 18,898 115,018 59,385
---------- ---------- -------- --------- ---------- ---------
Investor Shares:
Shares Issued .................................... 806,517 928,946 178,312 182,325 346,323 305,724
Shares Issued in Lieu of Cash Distributions ...... 15,979 10,375 2,600 2,379 3,314 2,569
Shares Redeemed .................................. (694,228) (871,451) (185,358) (180,124) (317,112) (301,505)
---------- ---------- -------- --------- ---------- ---------
Net Investor Share Transactions ................ 128,268 67,870 (4,446) 4,580 32,525 6,788
---------- ---------- -------- --------- ---------- ---------
<FN>
Amounts designated as "--" are either $0 or round to $0.
</FN>
</TABLE>
23
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
STI CLASSIC FUNDS FOR THE PERIODS ENDED MAY 31.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
<TABLE>
<CAPTION>
NET NET REALIZED
NET ASSET VALUE INVESTMENT GAINS (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ---------- -------------- --------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
PRIME QUALITY MONEY MARKET FUND
Trust Shares
1998 $1.00 $ 0.05 $ -- $(0.05) $ --
1997 1.00 0.05 -- (0.05) --
1996 1.00 0.05 -- (0.05) --
1995 1.00 0.05 -- (0.05) --
1994 1.00 0.03 -- (0.03) --
Investor Shares
1998 $1.00 $ 0.05 $ -- $(0.05) $ --
1997 1.00 0.05 -- (0.05) --
1996 1.00 0.05 -- (0.05) --
1995 1.00 0.05 -- (0.05) --
1994 1.00 0.03 -- (0.03) --
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
Trust Shares
1998 $1.00 $ 0.05 $ -- $(0.05) $ --
1997 1.00 0.05 -- (0.05) --
1996 1.00 0.05 -- (0.05) --
1995 1.00 0.05 -- (0.05) --
1994 1.00 0.03 -- (0.03) --
Investor Shares
1998 $1.00 $ 0.05 $ -- $(0.05) $ --
1997 1.00 0.05 -- (0.05) --
1996 1.00 0.05 -- (0.05) --
1995 1.00 0.04 -- (0.04) --
1994 1.00 0.03 -- (0.03) --
TAX-EXEMPT MONEY MARKET FUND
Trust Shares
1998 $1.00 $ 0.03 $ -- $(0.03) $ --
1997 1.00 0.03 -- (0.03) --
1996 1.00 0.03 -- (0.03) --
1995 1.00 0.03 -- (0.03) --
1994 1.00 0.02 -- (0.02) --
Investor Shares
1998 $1.00 $ 0.03 $ -- $(0.03) $ --
1997 1.00 0.03 -- (0.03) --
1996 1.00 0.03 -- (0.03) --
1995 1.00 0.03 -- (0.03) --
1994 1.00 0.02 -- (0.02) --
<PAGE>
RATIO OF
RATIO OF EXPENSES TO
NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS
VALUE END TOTAL END OF EXPENSES TO INCOME TO (EXCLUDING WAIVERS
OF PERIOD RETURN PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS)
--------- ------ ------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PRIME QUALITY MONEY MARKET FUND
Trust Shares
1998 $1.00 5.22% $1,880,229 0.59% 5.10% 0.77%
1997 1.00 5.01% 1,086,555 0.58% 4.90% 0.76%
1996 1.00 5.25% 1,050,800 0.58% 5.11% 0.78%
1995 1.00 4.79% 799,189 0.58% 4.77% 0.79%
1994 1.00 2.88% 583,399 0.58% 2.86% 0.79%
Investor Shares
1998 $1.00 5.04% $ 411,821 0.76% 4.93% 0.98%
1997 1.00 4.84% 283,544 0.75% 4.74% 0.97%
1996 1.00 5.08% 215,696 0.75% 4.94% 1.00%
1995 1.00 4.62% 157,616 0.75% 4.55% 1.01%
1994 1.00 2.71% 129,415 0.75% 2.67% 0.99%
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
Trust Shares
1998 $1.00 5.04% $ 377,490 0.62% 4.92% 0.78%
1997 1.00 4.83% 344,350 0.61% 4.73% 0.76%
1996 1.00 5.14% 325,493 0.61% 5.02% 0.78%
1995 1.00 4.67% 434,111 0.61% 4.64% 0.80%
1994 1.00 2.77% 309,228 0.61% 2.69% 0.77%
Investor Shares
1998 $1.00 4.90% $ 58,753 0.76% 4.79% 0.96%
1997 1.00 4.69% 63,178 0.75% 4.59% 0.96%
1996 1.00 4.99% 58,608 0.75% 4.88% 0.99%
1995 1.00 4.51% 46,639 0.75% 4.51% 1.02%
1994 1.00 2.63% 32,395 0.75% 2.54% 0.97%
TAX-EXEMPT MONEY MARKET FUND
Trust Shares
1998 $1.00 3.21% $ 448,023 0.51% 3.14% 0.67%
1997 1.00 3.09% 333,006 0.50% 3.04% 0.66%
1996 1.00 3.28% 273,613 0.50% 3.23% 0.68%
1995 1.00 3.10% 215,413 0.45% 3.12% 0.70%
1994 1.00 2.08% 143,982 0.42% 2.05% 0.71%
Investor Shares
1998 $1.00 3.09% $ 134,538 0.62% 3.04% 0.83%
1997 1.00 2.97% 102,013 0.62% 2.92% 0.83%
1996 1.00 3.16% 95,223 0.62% 3.10% 0.85%
1995 1.00 3.00% 87,647 0.55% 3.00% 0.87%
1994 1.00 1.96% 61,675 0.54% 1.93% 0.88%
RATIO OF
NET INVESTMENT
INCOME TO
AVERAGE NET ASSETS
(EXCLUDING WAIVERS
AND REIMBURSEMENTS)
------------------
<S> <C> <C>
PRIME QUALITY MONEY MARKET FUND
Trust Shares
1998 4.92%
1997 4.72%
1996 4.91%
1995 4.56%
1994 2.65%
Investor Shares
1998 4.71%
1997 4.52%
1996 4.69%
1995 4.29%
1994 2.43%
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
Trust Shares
1998 4.76%
1997 4.58%
1996 4.85%
1995 4.45%
1994 2.53%
Investor Shares
1998 4.59%
1997 4.38%
1996 4.64%
1995 4.24%
1994 2.32%
TAX-EXEMPT MONEY MARKET FUND
Trust Shares
1998 2.98%
1997 2.88%
1996 3.05%
1995 2.87%
1994 1.76%
Investor Shares
1998 2.83%
1997 2.71%
1996 2.87%
1995 2.68%
1994 1.59%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24 & 25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
1. Organization:
The STI Classic Funds (the "Trust") was organized as a Massachusetts
Business Trust under a Declaration of Trust dated January 15, 1992. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with twenty-two portfolios: the Value Income Stock
Fund, the Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth
Fund, the Balanced Fund, the Emerging Markets Equity Fund, the International
Equity Index Fund, the International Equity Fund the Sunbelt Equity Fund, the
Investment Grade Tax-Exempt Bond Fund, the Florida Tax-Exempt Bond Fund, the
Georgia Tax-Exempt Bond Fund, the Investment Grade Bond Fund, the Short-Term
Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Limited-Term
Federal Mortgage Securities Fund, and the U.S. Government Securities Fund,
(collectively the "Non-Dollar Funds"), the Prime Quality Money Market Fund, the
U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund,
the Classic Institutional Cash Management Money Market Fund and the Classic
Institutional U.S. Treasury Securities Money Market Fund, (collectively the
"Money Market Funds"). The assets of each portfolio are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. Each
Fund's prospectus provides a description of the Fund's investment objectives,
policies and strategies. The financial statements of the Prime Quality Money
Market Fund, the U.S. Government Securities Money Market Fund, and the
Tax-Exempt Money Market Fund (collectively the "Funds") are included herein. The
financial statements of the remaining Funds are presented separately.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by
the Trust:
SECURITY VALUATION -- Investment securities held by the Funds are stated at
amortized cost, which approximates market value.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a
regulated investment company for Federal income tax purposes and distribute
all of its taxable income and net capital gains. Accordingly, no provisions
for Federal income taxes are required.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on an accrual basis. Costs 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 and amortization of purchase discounts and premiums during the
respective holding period. Purchase discounts and premiums on securities
held by the Funds are accreted and amortized ratably to maturity and are
included in interest income.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral, including accrued interest thereon, is sufficient
in the event of default of the counterparty. If the counterparty defaults
and the value of the collateral declines or if the counterparty enters into
an insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
26
<PAGE>
================================================================================
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated each business day, by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding.
OTHER -- Expenses that are directly related to a specific Fund are charged
to that Fund. Class specific expenses are borne by that class. Other
operating expenses of the Trust are pro-rated to the Funds on the basis of
relative net assets. Fund expenses are pro-rated to the respective classes
on the basis of relative net assets.
Distributions from net investment income of each of the Funds are declared on
each business day and paid to shareholders on a monthly basis. Any net realized
capital gains on sales of securities are distributed to shareholders at least
annually.
RECLASSIFICATION OF COMPONENTS OF NET ASSETS -- The timing and
characterization of certain income and capital gains distributions are
determined annually in accordance with federal tax regulations which may
differ from generally accepted accounting principles. As a result, net
investment income (loss) and net realized gain (loss) on investment
transactions for a reporting period may differ significantly from
distributions during such period. These book/tax differences may be
temporary or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in-capital or accumulated
net realized gain, as appropriate, in the period that the differences
arise. Accordingly, the following permanent difference, primarily
attributable to the classification of short-term capital gains and ordinary
income for tax purposes related to the other funds, has been reclassified
to/from the following accounts:
UNDISTRIBUTED
ACCUMULATED NET INVESTMENT
REALIZED GAIN INCOME
(000) (000)
-------------- --------------
Prime Quality Money
Market Fund $27 $(27)
These reclassifications have no effect on net assets or net asset values
per share.
USE OF ESTIMATES -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and reported amounts
of revenues and expenses during the reporting period. Actual amounts could
differ from these estimates.
3. Transactions with Affiliates:
Certain officers of the Trust are also officers of the Administrator and/or SEI
Investments Distribution Co. (the "Distributor"). Such officers are paid no fees
by the Trust for serving as officers of the Trust.
4. Administration and Transfer Agency Servicing Agreements:
The Trust and the Administrator are parties to an Administration Agreement dated
May 29, 1995, as amended November 19, 1997, under which the Administrator
provides administrative services for an annual fee (expressed as a percentage of
the combined average daily net assets of the Trust and STI Classic Variable
Annuity Trust) of: .12% up to $1 billion, .09% on the next $4 billion, .07% on
the next $3 billion, .065% on the next $2 billion and .06% for over $10 billion.
27
<PAGE>
The Trust and Federated Services Company are parties to a Transfer Agency
servicing agreement dated May 14, 1994 under which Federated Services Company
provides transfer agency services to the Trust.
5. Investment Advisory and Custodian Agreements:
The Trust and Trusco Capital Management have entered into an advisory agreement
dated July 15, 1993.
Under terms of the respective agreements, the Funds are charged the following
annual fees based upon average daily net assets:
MAXIMUM
MAXIMUM TRUST INVESTOR INVESTOR
ANNUAL SHARE SHARE SHARE
ADVISORY MAXIMUM DISTRIBUTION MAXIMUM
FEE EXPENSE FEE EXPENSE
-------- ------- ------------ --------
Prime Quality Money
Market Fund .65% .60% .20% .77%
U.S. Government
Securities Money
Market Fund .65% .63% .17% .77%
U.S. Tax-Exempt Money
Market Fund .55% .62% .15% .74%
The Investment Advisor and the Administrator have voluntarily agreed to waive
all or a portion of their fees (and to reimburse Funds' expenses) in order to
limit operating expenses to an amount as outlined in the table above. Fee
waivers and expense reimbursements are voluntary and may be terminated at any
time.
SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for the
Funds. Fees of the Custodian are paid on the basis of the net assets of the
Funds. The Custodian plays no role in determining the investment policies of the
Trust or which securities are to be purchased or sold in the Funds.
6. Investment Transactions:
The Funds had capital loss carryforwards at May 31, 1998 as follows:
CAPITAL LOSS
CARRYOVER EXPIRES EXPIRES EXPIRES
5/31/98 2003 2004 2005
FUND (000) (000) (000) (000)
- ---- --------- ------- ------- -------
Prime Quality
Money Market
Fund $329 $125 $-- $204
Tax-Exempt
Money Market
Fund 4 -- 4 --
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any net realized capital gains.
7. Concentration of Credit Risk:
The Prime Quality Money Market Fund invests primarily in high quality money
market instruments rated in the highest short-term rating category by Standard &
Poor's Ratings Group ("S&P") or Moody's Investors Services, Inc. (Moody's) or,
if not rated, are determined by the Advisor to be of comparable quality. The
U.S. Government Securities Money Market Fund invests exclusively in U.S.
Treasury obligations, U.S. Government subsidiary corporation securities which
are backed by the full faith and credit of the U.S. Government and repurchase
agreements with approved dealers collateralized by U.S. Treasury securities and
U.S. Government subsidiary corporation securities. The Tax-Exempt Money Market
Fund invests in high quality, U.S. dollar denominated municipal securities rated
in one of the two highest short-term rating categories or, if not rated, are
determined by the Advisor to be of comparable quality.
28
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998
To the Shareholders and Board of Trustees of
STI Classic Funds:
We have audited the accompanying statements of net assets of the Prime Quality
Money Market and Tax-Exempt Money Market Funds, and the statement of assets and
liabilities, including the schedule of investments, of the U.S. Government
Securities Money Market Fund of STI Classic Funds (the "Trust") as of May 31,
1998, and the related statements of operations, changes in net assets, and
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1998, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Prime Quality Money Market, U.S. Government Securities Money Market, and
Tax-Exempt Money Market Funds of STI Classic Funds as of May 31, 1998, the
results of their operations, changes in their net assets, and financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, PA
July 24, 1998
29
<PAGE>
NOTICE TO SHAREHOLDERS
================================================================================
STI CLASSIC FUNDS MAY 31, 1998 UNAUDITED
For shareholders that do not have a May 31, 1998 tax year end, this notice is
for informational purposes only. For shareholders with a May 31, 1998 tax year
end, please consult your tax advisor as to the pertinence of this notice. For
the fiscal year ended May 31, 1998, each portfolio is designating the following
items with regard to distributions paid during the year:
<TABLE>
<CAPTION>
LONG TERM MID TERM
(20% RATE) (28% RATE) ORDINARY
CAPITAL GAINS CAPITAL GAINS INCOME TAX-EXEMPT TOTAL QUALIFYING
FUND DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1)
------------------------ ------------- ------------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tax-Exempt Money Market 0.00% 0.00% 0.00% 100.00% 100.00% 0.00%
Prime Quality Money Market 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
U.S. Government Securities 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
<FN>
- ------------------------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and is reflected as a percentage of "Ordinary
Income Distribution".
</FN>
</TABLE>
30
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
INVESTMENT ADVISORS
Trusco Capital Management, Inc.
STI Classic Funds are not deposits, are not
insured or guaranteed by the FDIC or any other
government agency, and are not endorsed by and do
not constitute obligations of SunTrust Banks, Inc.
or any other of its affiliates. Investment in the
Funds involves risk, including the possible loss
of principal. There is no guarantee that any STI
Classic Fund will achieve its investment
objective. The STI Classic Funds are advised by
affiliates of SunTrust Banks, Inc.
DISTRIBUTOR
SEI Investments Distribution Co.
This information must be preceded or accompanied
by a current prospectus for each Fund described.
