ANNUAL
FINANCIAL REPORT
STI CLASSIC FUNDS
A Family of Mutual Funds
Classic Institutional Cash Management Money Market Fund
Classic Institutional U.S. Government Securities Money Market Fund
Classic Institutional U.S. Treasury Securities Money Market Fund
May 31, 1999
[STI Classic Funds LOGO]
<PAGE>
STATEMENT OF NET ASSETS
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STI CLASSIC FUNDS May 31, 1999
Classic Institutional Cash Management Money Market Fund
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
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Commercial Paper (32.2%)
Finance (23.1%)
Allstate
4.830%, 07/22/99 $10,000 $ 9,932
Associates Corporation NA
4.800%, 06/14/99 25,000 24,957
Bank of Montreal
4.810%, 07/19/99 25,000 24,840
BankAmerica
4.830%, 10/27/99 15,000 14,702
Den Norske Bank
4.860%, 08/10/99 15,000 14,858
4.950%, 11/16/99 35,000 34,191
Deutsche Bank Financial
4.800%, 06/28/99 50,000 49,820
Ford Motor Credit
4.800%, 06/01/99 2,000 2,000
4.730%, 08/31/99 20,000 19,761
General Electric Capital
4.800%, 06/10/99 1,750 1,748
4.800%, 06/11/99 2,055 2,052
4.820%, 07/16/99 6,500 6,461
4.830%, 07/30/99 835 828
4.730%, 08/19/99 30,000 29,689
General Motors Acceptance
4.670%, 10/20/99 45,000 44,177
Goldman Sachs Group
4.770%, 09/17/99 25,000 24,642
IBM Credit
4.820%, 06/03/99 1,580 1,580
John Hancock
4.810%, 07/15/99 770 765
JP Morgan
4.850%, 07/07/99 304 303
4.812%, 10/06/99 800 786
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Finance--continued
KFW International Finance
4.830%, 06/21/99 $ 700 $ 698
4.790%, 06/24/99 1,200 1,196
4.810%, 06/24/99 1,300 1,296
4.810%, 07/06/99 330 328
4.820%, 10/04/99 500 492
Merrill Lynch
4.820%, 06/17/99 30,000 29,936
Progress Capital
4.820%, 06/11/99 1,205 1,203
Sigma Finance
4.850%, 11/17/99 25,000 24,431
St Paul
4.800%, 06/17/99 20,000 19,957
UBS Finance
4.930%, 12/21/99 35,000 34,027
4.780%, 12/23/99 15,000 14,592
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436,248
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Industrial (8.9%)
AES Shady Point
4.790%, 06/01/99 18,000 18,000
American Home Product
4.790%, 06/02/99 900 900
AT&T
4.810%, 07/28/99 20,000 19,848
Allied Signal
4.820%, 06/16/99 2,200 2,196
Dupont (EI) de Nemours
4.830%, 06/07/99 400 400
Eastman Kodak
4.820%, 07/22/99 500 497
4.840%, 09/20/99 15,000 14,776
Edison International
4.820%, 08/02/99 25,000 24,792
4.850%, 08/16/99 10,000 9,898
1
<PAGE>
STATEMENT OF NET ASSETS
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STI CLASSIC FUNDS May 31, 1999
Classic Institutional Cash Management Money Market Fund--continued
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Face
Amount (000) Value (000)
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Industrial--continued
Fortune Brand
4.866%, 07/22/99 $ 948 $ 942
Gannett
4.820%, 06/14/99 500 499
General Electric
4.810%, 06/18/99 300 299
4.830%, 07/28/99 2,400 2,382
J.C. Penney
5.040%, 07/29/99 8,000 7,936
Motorola Credit
4.830%, 06/11/99 500 499
South Carolina Fuel
4.800%, 06/07/99 23,644 23,625
Walt Disney
4.460%, 07/13/99 40,000 39,792
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167,281
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Utilities (0.2%)
GTE
4.820%, 06/07/99 3,800 3,797
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Total Commercial Paper
(Cost $607,326) 607,326
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Corporate Obligations (35.7%)
Finance (33.8%)
American Express Centurion (B)
4.968%, 06/07/99 9,300 9,300
5.060%, 06/01/99 15,000 15,000
4.980%, 06/02/99 35,000 35,000
American Express Credit
8.500%, 06/15/99 400 401
American General Finance
6.875%, 07/01/99 100 100
American General Finance, MTN
6.370%, 10/29/99 5,000 5,026
Associates Corporation NA
7.250%, 09/01/99 2,500 2,513
6.000%, 03/15/00 150 151
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Face
Amount (000) Value (000)
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Finance--continued
Associates Corporation NA (B)
4.890%, 06/01/99 $20,000 $19,997
Associates Corporation NA , MTN
6.750%, 06/28/99 5,000 5,003
Associates Corporation NA,
Ser F, MTN
6.125%, 11/01/99 500 502
Bayerische Hypotheken Bank
6.125%, 12/30/99 227 228
Bayerische Hypotheken Bank, MTN
6.750%, 10/04/99 663 666
6.125%, 11/08/99 825 827
6.250%, 12/30/99 150 151
6.000%, 01/07/00 416 417
Bayerische Hypo-Vereinsbank, MTN
6.625%, 07/02/99 142 142
4.625%, 11/12/99 209 208
6.000%, 12/10/99 206 207
Bear Stearns
4.940%, 06/19/00 35,000 35,000
Bear Stearns, MTN
5.715%, 07/30/99 15,000 15,000
Bear Stearns, MTN (B)
5.029%, 06/18/99 15,000 15,000
Beneficial, MTN (B)
5.100%, 06/01/99 10,000 10,011
Beta Finance (B)
4.850%, 06/01/99 25,000 25,000
Beta Finance, MTN (B)
5.520%, 06/01/99 25,000 25,000
4.940%, 07/15/99 15,000 15,000
Branch Banking and Trust (B)
5.030%, 06/01/99 35,000 34,987
British Telecom Finance, MTN
8.750%, 08/11/99 100 101
Caterpillar Financial, MTN
5.750%, 01/31/00 122 122
2
<PAGE>
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Face
Amount (000) Value (000)
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Finance--continued
Caterpillar Financial Services,
MTN
6.800%, 07/01/99 $ 250 $ 250
Chrysler Financial
9.500%, 12/15/99 7,086 7,249
Chrysler Financial, MTN
6.375%, 01/28/00 3,750 3,780
Commerzbank, MTN
4.625%, 07/23/99 370 370
5.125%, 03/07/00 148 148
Credit Suisse First Boston (A) (B)
4.800%, 06/01/99 35,000 34,996
Credit Suisse First Boston (B)
4.860%, 06/01/99 15,000 15,000
Credit Suisse First Boston
International, MTN
5.400%, 03/20/00 20,000 20,000
Deutsche Bank, MTN
6.125%, 11/08/99 386 387
6.500%, 12/29/99 677 682
Dresdner Finance, MTN
5.500%, 12/21/99 475 475
Exxon Capital
6.500%, 07/15/99 100 100
First Union Bank (B)
4.810%, 06/01/99 25,000 25,000
5.040%, 06/01/99 25,000 24,995
5.020%, 08/19/99 20,000 20,000
Ford Holdings
9.250%, 03/01/00 3,940 4,054
Ford Motor Credit
8.875%, 06/15/99 1,000 1,001
6.375%, 09/15/99 850 853
Ford Motor Credit, MTN
6.125%, 12/03/99 870 873
8.625%, 01/24/00 344 351
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Finance--continued
General Electric Capital Canada
Financial, MTN
8.750%, 10/25/99 $ 365 $ 370
General Electric Capital, MTN
5.430%, 01/17/00 100 100
5.840%, 03/30/00 150 151
General Motors Acceptance
8.400%, 10/15/99 200 202
7.000%, 03/01/00 195 197
General Motors Acceptance, MTN
6.750%, 09/30/99 215 216
6.250%, 01/06/00 500 503
8.500%, 01/31/00 2,000 2,044
General Motors
Acceptance, MTN (B)
4.830%, 07/06/99 2,000 2,000
Goldman Sachs Group, MTN
5.280%, 02/24/00 10,000 10,000
Helaba Finance Bank, MTN
5.750%, 12/21/99 464 465
IBM Credit (B)
4.950%, 06/15/99 10,000 10,000
IBM Credit, MTN
6.750%, 08/09/99 215 216
Inter-America Development
Bank, MTN
6.250%, 12/31/99 145 146
International Bank Reconstruction
and Development, MTN
6.000%, 07/14/99 318 318
5.150%, 03/23/00 326 325
International Lease Finance
6.500%, 08/15/99 1,000 1,003
International Lease Finance, MTN
5.960%, 07/07/99 500 500
JP Morgan, MTN (B)
5.060%, 06/01/99 20,000 20,000
3
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
Classic Institutional Cash Management Money Market Fund--continued
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Finance--continued
Merrill Lynch (B)
5.090%, 06/01/99 $ 15,000 $ 15,000
Merrill Lynch, MTN
6.070%, 09/27/99 300 301
Morgan Guaranty Trust, MTN
6.625%, 07/16/99 377 378
Morgan Stanley Dean Witter
6.250%, 03/15/00 1,500 1,512
Morgan Stanley Dean Witter,
MTN (B)
5.108%, 08/23/99 10,000 10,008
National City
6.750%, 06/01/99 10,000 10,000
Nationsbank (B)
5.060%, 06/03/99 10,000 10,003
Norwest Financial, MTN
6.050%, 11/19/99 200 201
PNC Bank (B)
4.790%, 06/01/99 10,000 10,000
4.779%, 06/03/99 10,000 9,999
Rabobank, MTN
6.500%, 08/16/99 416 417
6.000%, 12/31/99 122 123
6.375%, 12/31/99 223 224
Sigma Finance (A)
5.305%, 03/13/00 15,000 15,000
Sigma Finance, MTN
5.350%, 05/22/00 25,000 25,000
Tampa Bay Devil Rays (B)
5.000%, 06/03/99 45,000 45,000
Texas State
5.850%, 12/01/99 1,250 1,254
Toronto Dominion Bank, MTN
6.500%, 03/27/00 509 513
Toyota Motor Credit, MTN
6.500%, 09/30/99 170 171
5.750%, 12/20/99 382 383
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Finance--continued
Wachovia
7.000%, 12/15/99 $ 2,443 $ 2,468
World Bank
8.375%, 10/01/99 200 202
--------
638,537
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Industrial (1.5%)
Anheuser Busch, MTN
7.850%, 12/01/99 1,300 1,318
AT&T
8.250%, 01/11/00 2,000 2,036
Dupont (EI) de Nemours, MTN
7.500%, 06/11/99 115 115
HJ Heinz
6.750%, 10/15/99 200 201
JC Penney
6.875%, 06/15/99 500 500
KFW International, MTN
7.000%, 06/15/99 100 100
Philip Morris
6.150%, 09/16/99 11,900 11,973
9.250%, 02/15/00 900 924
Unilever NV, MTN
8.000%, 12/08/99 110 111
Wal-Mart Stores
6.125%, 10/01/99 150 150
5.650%, 02/01/00 8,000 8,027
Walt Disney, MTN
6.250%, 06/21/99 2,734 2,736
--------
28,191
--------
Utilities (0.4%)
BellSouth
6.500%, 02/01/00 500 504
Chesapeake and Potomac Telephone
5.875%, 09/15/99 250 251
Duke Power, MTN
5.780%, 07/08/99 2,000 2,002
4
<PAGE>
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Utilities--continued
Michigan Bell Telephone
5.875%, 09/15/99 $ 100 $ 100
Province of Quebec
9.125%, 03/01/00 4,000 4,114
Southern California Edison
8.250%, 02/01/00 650 662
Virginia Electric & Power
8.875%, 06/01/99 450 450
--------
8,083
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Total Corporate Obligations
(Cost $674,811) 674,811
--------
Certificates of Deposit (7.4%)
Bayerische Hypo-New York
5.270%, 03/03/00 20,000 19,985
Bayerische Landesbank
4.830%, 06/21/99 30,000 30,000
Branch Banking and Trust (B)
5.060%, 06/01/99 20,000 19,996
Canadian Imperial Bank
5.120%, 02/23/00 15,000 14,995
Commerzbank
5.160%, 02/25/00 13,000 12,995
Nationsbank
4.880%, 10/18/99 30,000 30,000
Toronto Dominion Bank
5.270%, 03/03/00 12,500 12,490
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Total Certificates of Deposit
(Cost $140,461) 140,461
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Asset-Backed Securities (2.3%)
American Express Master Trust,
Ser 1992-2 CI A
6.600%, 05/15/00 500 501
Americredit Auto Receivables Trust,
Ser 1998-B Cl A1
5.199%, 11/12/99 2,561 2,561
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Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Asset-Backed Securities--continued
Americredit Auto
Receivables Trust,
Ser 1999-A Cl A1
4.980%, 03/12/00 $ 3,518 $ 3,519
Americredit Auto
Receivables Trust,
Ser 1999-B Cl A1
4.917%, 06/12/00 7,000 7,000
Arcadia Auto Receivables Trust,
Ser 1999-A Cl A1
4.960%, 03/15/00 3,588 3,589
Case Equipment Loan Trust,
Ser 1998-C Cl A1
5.420%, 12/15/99 967 967
Honda Auto Receivables Owner
Trust, Ser 1999-1 Cl A1
4.974%, 02/15/00 3,547 3,547
Household Auto Revolving
Trust, Ser 1998-1 Cl A1
5.330%, 12/17/99 2,634 2,634
Key Auto Finance Trust,
Ser 1999-1 Cl A1
4.960%, 04/15/00 3,344 3,345
Mitsubishi Motor Credit of
America Auto Trust,
Ser 1999-1 Cl A1
5.066%, 01/15/00 3,016 3,016
Onyx Acceptance Auto Trust,
Ser 1999-B Cl A1
4.930%, 05/15/00 9,000 9,000
Union Acceptance,
Ser 1999-A Cl A1
4.980%, 03/08/00 2,999 3,000
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Total Asset-Backed Securities
(Cost $42,679) 42,679
--------
5
<PAGE>
STATEMENT OF NET ASSETS
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STI CLASSIC FUNDS May 31, 1999
Classic Institutional Cash Management Money Market Fund--concluded
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Taxable Municipal Bond (1.1%)
Missouri State, Higher
Education Loan Authority,
Student Loan Revenue,
Ser F, Cl A1
4.940%, 06/02/99 $ 20,150 $ 20,150
----------
Total Taxable Municipal Bond
(Cost $20,150) 20,150
----------
Bank Note (0.3%)
American Express Centurion (B)
4.841%, 08/09/99 5,000 5,000
----------
Total Bank Note
(Cost $5,000) 5,000
----------
U.S. Government Agency Obligations (2.3%)
FHLB
5.945%, 07/30/99 200 200
FHLMC
4.935%, 06/04/99 10,000 9,996
FNMA
4.680%, 06/10/99 20,000 19,977
8.700%, 06/10/99 370 370
8.450%, 07/12/99 370 371
SLMA (B)
5.271%, 06/01/99 750 750
4.920%, 08/02/99 12,000 11,994
SLMA, MTN
5.630%, 06/02/99 290 290
----------
Total U.S. Government Agency Obligations
(Cost $43,948) 43,948
----------
Repurchase Agreements (26.6%)
Barclays
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $25,016,418 (collateralized
by FHLB and FNMA obligations:
total market value
$25,503,132) (C) 25,003 25,003
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Repurchase Agreements--continued
Deutsche Bank
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $166,685,056 (collateralized
by FHLMC obligation:
total market value
$169,927,563) (C) $ 166,596 $ 166,596
Greenwich
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $81,567,767 (collateralized
by various GNMA and FHLMC
obligations: total market value
$83,155,519) (C) 81,524 81,524
Merrill Lynch
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $125,275,405 (collateralized
by FHLB, FHLMC, and FNMA
obligations: total market value
$127,715,110) (C) 125,208 125,208
Morgan Stanley
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $20,010,733 (collateralized
by various FNMA obligations:
total market value $20,421,366) (C) 20,000 20,000
Salomon Brothers
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $84,894,852 (collateralized
by various FHLMC and FNMA
obligations: total market value
$86,683,968) (C) 84,849 84,849
----------
Total Repurchase Agreements
(Cost $503,180) 503,180
----------
Total Investments (107.9%)
(Cost $2,037,555) $2,037,555
----------
6
<PAGE>
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Value (000)
- --------------------------------------------------------------------------------
Other Assets and Liabilities (-7.9%)
Securities Purchased Payable $ (154,997)
Other Assets and Liabilities, Net 5,925
-----------
Total Other Assets and Liabilities (149,072)
-----------
Net Assets:
Fund shares of the Institutional Class
(unlimited authorization -- no par value)
based on 1,888,474,236 outstanding shares
of beneficial interest $ 1,888,474
Overdistributed net investment
income (2)
Accumulated net realized gain
on investments 11
-----------
Total Net Assets 100.0% $ 1,888,483
===========
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Shares $ 1.00
===========
The accompanying notes are an integral part of the financial statements.
For descriptions of abbreviations, please see page 11.
7
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
Classic Institutional U.S. Government Securities Money Market Fund
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. Agency Mortgage Backed Obligations (75.2%)
FHLB
5.630%, 06/15/99 $ 20,000 $ 20,000
5.980%, 06/15/99 10,000 9,981
4.966%, 02/25/00 30,000 29,982
5.160%, 03/08/00 30,000 29,989
5.125%, 05/19/00 20,000 19,985
FHLB (B)
5.026%, 06/02/99 35,000 35,000
5.170%, 06/02/00 30,000 30,000
FHLMCDN
4.935%, 06/04/99 35,000 34,986
4.842%, 08/13/99 25,000 24,762
FMCDN
4.868%, 09/10/99 30,000 29,604
FNMA
5.540%, 07/16/99 20,000 19,998
FNMA (B)
4.774%, 08/05/99 25,000 24,992
FNMA, MTN
4.970%, 04/12/00 20,000 19,991
5.120%, 05/26/00 10,000 9,987
FNMA, MTN (B)
4.991%, 06/01/99 25,500 25,496
FNMADN
4.680%, 06/10/99 15,000 14,982
4.920%, 06/11/99 10,000 9,987
4.920%, 07/02/99 10,000 9,959
4.760%, 07/20/99 30,000 29,807
4.867%, 10/15/99 15,000 14,734
SLMA (B)
4.841%, 06/01/99 20,000 19,999
---------
Total U.S. Agency Mortgage Backed Obligations
(Cost $464,221) 464,221
---------
Repurchase Agreements (24.6%)
ABN-AMRO
4.83%, dated 05/28/99, matures
06/01/99, repurchase price
$50,493,447 (collateralized by
various GNMA obligations: total
market value $51,475,692) (C) 50,466 50,466
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Repurchase Agreements--continued
Deutsche Bank
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $13,349,714 (collateralized
by FHLMC obligation: total
market value $13,609,303) (C) $ 13,343 $ 13,343
Greenwich
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $73,986,034 (collateralized by
various FNMA obligations: total
market value $75,425,724) (C) 73,946 73,946
J.P. Morgan
4.83%, dated 05/28/99,
matures 06/01/99, repurchase
price $14,106,190 (collateralized by
various GNMA obligations: total
market value $14,380,596) (C) 14,099 14,099
---------
Total Repurchase Agreements
(Cost $151,854) 151,854
---------
Total Investments (99.8% )
(Cost $616,075) 616,075
---------
Other Assets and Liabilities, Net (0.2%) 1,014
---------
Net Assets:
Fund Shares of the Institutional Class
(unlimited authorization -- no par
value) based on 617,114,635 outstanding
shares of beneficial interest 617,114
Accumulated net realized loss
on investments (25)
---------
Total Net Assets 100.0% $ 617,089
=========
Net Asset Value, Offering and
Redemption Price Per Share --
Institutional Shares $ 1.00
=========
The accompanying notes are an integral part of the financial statements.
For descriptions of abbreviations, please see page 11.
8
<PAGE>
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Classic Institutional U.S. Treasury Securities Money Market Fund
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. Treasury Obligations (23.4%)
U.S. Treasury Bill
4.700%, 09/16/99 $ 45,000 $ 44,391
U.S. Treasury Note
5.500%, 02/29/00 22,000 22,103
--------
Total U.S. Treasury Obligations
(Cost $66,494) 66,494
--------
Repurchase Agreements (76.8%)
ABN-AMRO
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $12,506,611 (collateralized by
U.S. Treasury Note: total market
value $12,750,347) (C) 12,500 12,500
Barclays
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $11,683,126 (collateralized by
U.S. Treasury Note: total market
value $11,911,303) (C) 11,677 11,677
Credit Suisse First Boston
4.73%, dated 05/28/99,
matures 06/01/99, repurchase
price $11,005,781 (collateralized by
U.S. Treasury Bill: total market
value $11,786,000) (C) 11,000 11,000
Duetsche Bank
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $63,908,474 (collateralized by
various U.S. Treasury Notes and
U.S. Treasury Bonds: total market
value $65,152,408) (C) 63,875 63,875
- --------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- --------------------------------------------------------------------------------
Repurchase Agreements--continued
Greenwich
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $11,871,391 (collateralized by
U.S. Treasury Bond: total market
value $12,105,827) (C) $ 11,865 $ 11,865
J.P. Morgan
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $12,006,347 (collateralized by
U.S. Treasury Note: total market
value $12,240,216) (C) 12,000 12,000
Merrill Lynch
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $10,912,810 (collateralized by
U.S. Treasury STRIPS: total market
value $11,125,364) (C) 10,907 10,907
Morgan Stanley
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $11,977,273 (collateralized by
U.S. Treasury Bond: total market
value $12,280,432) (C) 11,971 11,971
SBC Warburg
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $60,074,906 (collateralized by
U.S. Treasury Bond: total market
value $61,245,063) (C) 60,043 60,043
Salomon Brothers
4.76%, dated 05/28/99,
matures 06/01/99, repurchase
price $11,831,033 (collateralized by
U.S. Treasury Bond: total market
value $12,069,022) (C) 11,825 11,825
--------
Total Repurchase Agreements
(Cost $217,663) 217,663
--------
9
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
Classic Institutional U.S. Treasury Securities Money Market Fund--concluded
- --------------------------------------------------------------------------------
Value (000)
- --------------------------------------------------------------------------------
Total Investments (100.2%)
(Cost $284,157) $ 284,157
---------
Other Assets and Liabilities, Net (-0.2%) (632)
---------
Net Assets:
Fund shares of the Institutional Class
(unlimited authorization -- no par value)
based on 283,494,939 outstanding shares
of beneficial interest 283,495
Undistributed net investment income 4
Accumulated net realized gain
on investments 26
---------
Total Net Assets 100.0% $ 283,525
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Shares $ 1.00
=========
The accompanying notes are an integral part of the financial statements.
For descriptions of abbreviations, please see page 11.
10
<PAGE>
- --------------------------------------------------------------------------------
Key to Abbreviations used in the
Statement of Net Assets/Schedule of Investments
Cl Class
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FHLMCDN Federal Home Loan Mortgage Corporation Discount Note
FMCDN Federal Mortgage Corporation Discount Note
FNMA Federal National Mortgage Association
FNMADN Federal National Mortgage Association
Discount Note
MTN Medium Term Note
NA North America
Ser Series
SLMA Student Loan Marketing Association
STRIPS Separately Traded Registered Interest and
Principal Security
(A) Private Placement Security
(B) Adjustable Rate Security. The rate reported on
the Statement of Net Assets is the rate in effect on
May 31, 1999. The date shown is the next scheduled reset date.
(C) Tri-Party Repurchase Agreement
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS (000)
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS For The Periods Ended May 31, and January 31, 1999
<TABLE>
<CAPTION>
Classic Classic Classic
Institutional Institutional Institutional
Cash Management U.S. Government U.S. Treasury
Money Market Securities Money Securities Money
Fund Market Fund Market Fund
----------------------- ------------------------ -----------
02/01/99- 02/01/98- 02/01/99- 02/01/98- 06/01/98-
05/31/99 01/31/99 05/31/99 01/31/99 05/31/99
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Income:
Interest Income $ 15,955 $ 44,755 $ 10,807 $ 35,773 $ 11,296
-------- -------- -------- -------- --------
Expenses:
Investment Advisory Fees ....................... 635 646 432 1,323 449
Investment Advisory Fees Waived/Reimbursed...... (238) (268) (166) (629) (449)
Contribution From Advisor ...................... -- -- -- -- (112)
Administrator Fees ............................. 246 1,616 168 529 175
Administrator Fees Waived ...................... (96) (689) (69) (220) (45)
Transfer Agent Fees ............................ 75 240 62 198 134
Printing Fees .................................. 10 27 12 32 66
Custody Fees ................................... 43 290 81 265 54
Professional Fees .............................. 19 22 15 27 52
Trustee Fees ................................... -- 1 2 1 11
Registration Fees .............................. 79 1 1 1 74
Insurance and Other Fees ....................... 5 5 4 7 43
Amortization of Deferred Organizational Costs .. -- 3 1 4 --
-------- -------- -------- -------- --------
Total Expenses ................................. 778 1,894 543 1,538 452
-------- -------- -------- -------- --------
Net Investment Income .......................... 15,177 42,861 10,264 34,235 10,844
-------- -------- -------- -------- --------
Net Realized Gain on Securities Sold ........... 1 -- -- -- 25
-------- -------- -------- -------- --------
Increase in Net Assets Resulting from
Operations ................................... $ 15,178 $ 42,861 $ 10,264 $ 34,235 $ 10,869
======== ======== ======== ======== ========
</TABLE>
Amounts designated as "--" are either $0 or round to $0.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS For The Periods Ended May 31, and January 31,
<TABLE>
<CAPTION>
Classic Classic
Institutional Institutional
Cash Management U.S. Government
Money Market Securities Money
Fund Market Fund
--------------------------------------- ---------------------------------------
02/01/99- 02/01/98- 02/01/97- 02/01/99- 02/01/98- 02/01/97-
05/31/99 01/31/99 01/31/98 05/31/99 01/31/99 01/31/98
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net Investment Income ...... $ 15,177 $ 42,861 $ 31,705 $ 10,264 $ 34,235 $ 37,262
Net Realized Gain (Loss)
on Investments ......... 1 -- (3) -- -- 3
----------- ----------- ----------- ----------- ----------- -----------
Increase in Net Assets
Resulting from
Operations ............. 15,178 42,861 31,702 10,264 34,235 37,265
----------- ----------- ----------- ----------- ----------- -----------
Distributions to Shareholders:
Net Investment Income .... (15,172) (42,874) (31,704) (10,249) (34,250) (37,262)
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions ...... (15,172) (42,874) (31,704) (10,249) (34,250) (37,262)
----------- ----------- ----------- ----------- ----------- -----------
Share Transactions:
Proceeds from
Shares Issued .......... 2,243,802 7,764,540 6,369,124 1,958,641 6,897,369 7,090,197
Shares Issued
in Connection with
Crestar Arbor Merger.. 1,072,229 -- -- -- -- --
Reinvestments of
Cash Distributions ..... 7,086 10,074 5,066 3,113 13,467 9,939
Cost of Shares Redeemed .. (2,319,130) (7,630,948) (6,110,786) (2,032,711) (7,012,200) (6,897,460)
----------- ----------- ----------- ----------- ----------- -----------
Increase (Decrease) in
Net Assets from
Share Transactions .... 1,003,987 143,666 263,404 (70,957) (101,364) 202,676
----------- ----------- ----------- ----------- ----------- -----------
Total Increase
(Decrease)
in Net Assets .......... 1,003,993 143,653 263,402 (70,942) (101,379) 202,679
----------- ----------- ----------- ----------- ----------- -----------
Net Assets:
Beginning of Period ...... 884,490 740,837 477,435 688,031 789,410 586,731
----------- ----------- ----------- ----------- ----------- -----------
End of Period .............. $ 1,888,483 $ 884,490 $ 740,837 $ 617,089 $ 688,031 $ 789,410
=========== =========== =========== =========== =========== ===========
Shares Issued and Redeemed:
Shares Issued ............ 2,243,802 7,764,540 6,369,124 1,958,641 6,897,369 7,090,197
Shares Issued in
Connection with
Crestar Arbor Merger ... 1,072,211 -- -- -- -- --
Shares Issued in Lieu
of Cash Distributions .. 7,086 10,074 5,066 3,113 13,467 9,939
Shares Redeemed .......... (2,319,131) (7,630,948) (6,110,786) (2,032,711) (7,012,200) (6,897,460)
----------- ----------- ----------- ----------- ----------- -----------
Net Share Transactions ....... 1,003,968 143,666 263,404 (70,957) (101,364) 202,676
=========== =========== =========== =========== =========== ===========
<CAPTION>
Classic
Institutional
U.S. Treasury
Securities Money
Market Fund
------------------------
06/01/98- 06/01/97-
05/31/99 05/31/98
----------- ---------
<S> <C> <C>
Operations:
Net Investment Income ...... $ 10,844 $ 5,596
Net Realized Gain (Loss)
on Investments ......... 25 4
----------- ---------
Increase in Net Assets
Resulting from
Operations ............. 10,869 5,600
----------- ---------
Distributions to Shareholders:
Net Investment Income .... (10,842) (5,596)
----------- ---------
Total Distributions ...... (10,842) (5,596)
----------- ---------
Share Transactions:
Proceeds from
Shares Issued .......... 1,267,762 991,131
Shares Issued
in Connection with
Crestar Arbor Merger.. -- --
Reinvestments of
Cash Distributions ..... 7,876 4,231
Cost of Shares Redeemed .. (1,132,474) (875,270)
----------- ---------
Increase (Decrease) in
Net Assets from
Share Transactions .... 143,164 120,092
----------- ---------
Total Increase
(Decrease)
in Net Assets .......... 143,191 120,096
----------- ---------
Net Assets:
Beginning of Period ...... 140,334 20,238
----------- ---------
End of Period .............. $ 283,525 $ 140,334
=========== =========
Shares Issued and Redeemed:
Shares Issued ............ 1,267,762 991,131
Shares Issued in
Connection with
Crestar Arbor Merger ... -- --
Shares Issued in Lieu
of Cash Distributions .. 7,876 4,231
Shares Redeemed .......... (1,132,474) (875,270)
----------- ---------
Net Share Transactions ....... 143,164 120,092
=========== =========
</TABLE>
Amounts designated as "--" are either $0 or round to $0.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS For the Periods Ended May 31, and January 31, For a Share
Outstanding Throughout the Period
<TABLE>
<CAPTION>
Net Net Asset
Net Asset Value Investment Distributions from Value End Total
Beginning of Period Income Net Investment Income of Period Return+
------------------- ---------- ---------------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Classic Institutional Cash Management Money Market Fund (A)
Institutional Shares
1999* $1.00 0.02 (0.02) $1.00 1.58%
For the years ended January 31:
1999 1.00 0.05 (0.05) 1.00 5.46
1998 1.00 0.06 (0.06) 1.00 5.66
1997 1.00 0.05 (0.05) 1.00 5.45
1996(B) 1.00 0.02 (0.02) 1.00 1.42
Classic Institutional U.S. Government Securities Money Market Fund (C)
Institutional Shares
1999* $1.00 0.02 (0.02) $1.00 1.56%
For the years ended January 31:
1999 1.00 0.05 (0.05) 1.00 5.30
1998 1.00 0.05 (0.05) 1.00 5.52
1997 1.00 0.05 (0.05) 1.00 5.29
1996 1.00 0.06 (0.06) 1.00 5.88
1995(D) 1.00 0.03 (0.03) 1.00 4.98
Classic Institutional U.S. Treasury Securities Money Market Fund
Institutional Shares
1999 $1.00 0.05 (0.05) $1.00 4.97%
1998 1.00 0.05 (0.05) 1.00 5.50
1997(E) 1.00 0.02 (0.02) 1.00 2.46
<CAPTION>
Ratio of
Ratio of Net Investment
Ratio of Expenses to Income to
Net Assets Ratio of Net Investment Average Net Assets Average Net Assets
End of Expenses to Income to (Excluding Waivers (Excluding Waivers
Period (000) Average Net Assets Average Net Assets and Reimbursements) and Reimbursements)
- ------------ ------------------ ------------------ ------------------ ------------------
<C> <C> <C> <C> <C>
$1,888,483 0.25% 4.79% 0.35% 4.69%
884,490 0.23 5.31 0.35 5.19
740,837 0.20 5.52 0.36 5.36
477,435 0.20 5.33 0.38 5.15
382,632 0.20 5.61 0.40 5.41
$ 617,089 0.25% 4.73% 0.36% 4.62%
688,031 0.23 5.18 0.36 5.05
789,410 0.20 5.39 0.37 5.22
586,731 0.20 5.17 0.37 5.00
514,870 0.20 5.72 0.37 5.55
579,422 0.20 4.98 0.38 4.80
$ 283,525 0.20% 4.83% 0.47% 4.56%
140,334 0.18 5.34 0.38 5.14
20,238 0.09 5.27 0.51 4.85
</TABLE>
(A) On May 17, 1999, the Arbor Prime Obligations Fund exchanged all of its
assets and certain liabilities for shares of the Classic Institutional Cash
Management Money Market Fund. The Arbor Prime Obligations Fund is the
accounting survivor in this transaction, and as a result, its basis of
accounting for assets and liabilities and its operating results for the
periods prior to May 17, 1999 have been carried forward in these financial
highlights.
(B) Commenced operations on October 25, 1995. All ratios for the period have
been annualized.
(C) On May 24, 1999, the Arbor U.S. Government Securities Money Fund exchanged
all of its assets and certain liabilities for shares of the Classic
Institutional U.S. Government Securities Money Market Fund. The Arbor U.S.
Government Securities Money Fund is the accounting survivor in this
transaction, and as a result, its basis of accounting for assets and
liabilities and its operating results for the periods prior to May 24, 1999
have been carried forward in these financial highlights.
(D) Commenced operations on August 1, 1994. All ratios for the period have been
annualized. (E) Commenced operations on December 12, 1996. All ratios for
the period have been annualized.
+ Returns are for the period indicated and have not been annualized.
* For the period February 1, 1999 to May 31, 1999. All ratios for the period
have been annualized.
The accompanying notes are an integral part of the financial statements.
14 & 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
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 thirty-four portfolios as of May 31, 1999:
the Balanced Fund, the Capital Appreciation Fund (formerly the Capital Growth
Fund), the Emerging Markets Equity Fund, the Growth and Income Fund, the
International Equity Fund, the International Equity Index Fund, the Life Vision
Balanced Portfolio, the Life Vision Growth and Income Portfolio, the Life Vision
Maximum Growth Portfolio, the Mid-Cap Equity Fund, the Small Cap Equity Fund,
the Small Cap Growth Stock Fund, the Sunbelt Equity Fund, the Tax Sensitive
Growth Stock Fund, the Value Income Stock Fund, (collectively the "Equity
Funds"), the Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund,
Investment Grade Bond Fund, the Investment Grade Tax-Exempt Bond Fund, the
Limited-Term Federal Mortgage Securities Fund, the Maryland Municipal Bond Fund,
the Short-Term Bond Fund, the Short-Term U.S. Treasury Securities Fund, and the
U.S. Government Securities Fund, the Virginia Intermediate Municipal Bond Fund,
the Virginia Municipal Bond Fund, (collectively the "Fixed Income Funds"), the
Prime Quality Money Market Fund, the Tax-Exempt Money Market Fund, the Tax-Free
Money Market Fund, the U.S. Government Securities, the U.S. Treasury Money
Market Fund (collectively the "Retail Money Market Funds"), the Classic
Institutional Cash Management Money Market Fund, the Classic Institutional U.S.
Government Securities Money Market Fund and the Classic Institutional U.S.
Treasury Securities Money Market Fund, (collectively the "Institutional Money
Market Funds" or the "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 presented herein are those of
the Institutional Money Market Funds. The financial statements of the Equity
Funds, the Fixed Income Funds and the Retail Money Market Funds are not
presented herein, but are presented separately.
On February 17, 1999 and February 22, 1999, respectively, the Board of Trustees
of the STI Classic Funds and Board of Trustees of the Arbor Funds approved an
Agreement and Plan of Reorganization (the "Reorganization Agreement") providing
for the transfer of all assets and liabilities of certain of the Arbor Funds in
exchange for the issuance of shares in the Funds in a tax-free reorganization
(see Note 7).
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust:
Basis of Presentation of Statements -- As more fully described in Note 7,
the STI Classic Funds acquired certain Arbor Funds in a tax-free business
combination. While each Fund now exists as a STI Classic Fund, one of the
surviving funds for accounting purposes is an Arbor Fund. In accordance
with generally accepted accounting principles, the financial statements
presented herein represent those of accounting survivors. Accordingly, the
Statements of Operations, Statements of Changes in Net Assets and Financial
Highlights presented reflect periods beginning on the first day of the
accounting survivor's fiscal year.
Security Valuation -- Investment securities held by the Funds are stated at
amortized cost, which approximates market value.
16
<PAGE>
- --------------------------------------------------------------------------------
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.
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 Institutional U.S. Treasury Securities Money Market
Fund has reclassified $2,000 from Undistributed Net Investment Income to
Accumulated Net Realized Gain. This reclassification is attributable to the
classification of short-term capital gains and ordinary income treatment
for tax purposes. This reclassification has no effect on net assets or net
asset value per share.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
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. Organization Costs and Transactions with Affiliates:
In April 1998, the AICPA issued Statement of Position (SOP) No. 98-5, "Reporting
on the Costs of Start-Up Activities." This SOP provides guidance on the
financial reporting of start-up costs and organization costs and requires costs
of start-up activities and organization costs to be expensed as incurred.
Investment companies that began operations prior to June 30, 1998 can adopt the
SOP prospectively. Therefore, previously capitalized organization costs will
continue to be amortized over a period of sixty months. Any future start-up or
organization costs will be expensed as incurred.
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
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.
Prior to May 24, 1999, and May 17, 1999, administrative and accounting services
were provided to the Arbor U.S. Government Securities Money Fund and Prime
Obligations Fund, respectively, by SEI Investments Mutual Funds Services who was
entitled to receive a fee at an annual rate of .08% of the average daily net
assets of these funds. A portion of these fees were voluntarily waived.
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, Inc. (the "Investment Advisor")
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 Institutional
Annual Share
Advisory Maximum
Fee Expense
------------ ------------
Classic Institutional
Cash Management
Money Market Fund .20% .25%
Classic Institutional
U.S. Government Securities
Money Market Fund .20% .25%
Classic Institutional
U.S. Treasury
Money Market Fund .20% .25%
18
<PAGE>
- --------------------------------------------------------------------------------
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.
Prior to May 24, 1999, and May 17, 1999, Crestar Asset Management Company
("CAMCO") provided Investment Advisory services to certain Arbor Funds. CAMCO
was paid for advisory services to each Fund at an annual rate of .10% and .11%
of the average daily net assets for U.S. Government Securities Money and Prime
Obligations Funds, respectively.
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. Concentration of Credit Risk:
The Classic Institutional Cash Management Money Market Fund invests in high
quality money market instruments issued by corporations and the U.S. Government
and rated by one or more nationally recognized statistical rating organizations,
or, if not rated determined by the Advisor to be of comparable quality. The
Classic Institutional U.S. Government Securities Fund invests 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 Classic Institutional U.S.
Treasury Securities Money Market Fund invests in U.S. Treasury Obligations,
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.
7. Arbor Funds Merger:
The Board of Directors and shareholders of certain of the Arbor Funds approved a
reorganization of certain of the Arbor Funds into the STI Classic Funds which
took place at the close of business on May 17, 1999 for the Prime Obligations
Fund and May 24, 1999 for the U.S. Government Securities Money Fund.
The following table summarizes certain relevant information of the Funds prior
to and immediately after the business combinations on May 17, 1999 and May 24,
1999 and is unaudited:
<TABLE>
<CAPTION>
Shares
Outstanding Shares Issued Net Assets NAV
On Merger in Business after Per
Arbor Fund Date STI Classic Fund Combination Combination Share
- -------------------------- ----------- ---------------- ------------- -------------- -----
<S> <C> <C> <C> <C> <C>
U.S. Government Securities 684,672,707 Classic Institutional U.S. Government 684,672,707 684,647,218 $1.00
Money Fund (1) Securities Money Market Fund
Prime Obligation Fund (1) 711,747,295 Classic Institutional Cash Management 711,747,295 1,783,974,148 1.00
Money Market Fund
</TABLE>
(1) Represents the accounting survivor in this business combination.
19
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999
To the Shareholders and Board of Trustees of
STI Classic Funds:
We have audited the accompanying statements of net assets of the Classic
Institutional Cash Management Money Market, Classic Institutional U.S.
Government Securities Money Market, and Classic Institutional U.S. Treasury
Securities Money Market Funds of STI Classic Funds (the "Trust") as of May 31,
1999, 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. The statements of operations for the
year ended January 31, 1999, statements of changes for the years ended January
31, 1999 and January 31, 1998, and financial highlights for the periods
presented prior to May 31, 1999, for the Classic Institutional Cash Management
Money Market and Classic Institutional U.S. Government Securities Money Market
Funds were audited by other auditors whose report dated March 15, 1999,
expressed an unqualified opinion on this information.
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 and financial highlights. Our procedures included confirmation of
securities owned as of May 31, 1999, by correspondence with the custodian and
the application of alternative auditing procedures with respect to unsettled
securities transactions. 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
Classic Institutional Cash Management Money Market, Classic Institutional U.S.
Government Securities Money Market, and Classic Institutional U.S. Treasury
Securities Money Market Funds, of STI Classic Funds as of May 31, 1999, the
results of their operations, changes in their net assets, and financial
highlights for each of the periods described in the first paragraph above, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
July 23, 1999
20
<PAGE>
NOTICE TO SHAREHOLDERS
- --------------------------------------------------------------------------------
STI CLASSIC FUNDS May 31, 1999 (unaudited)
For shareholders that do not have a May 31, 1999 tax year end, this notice is
for informational purposes only. For shareholders with a May 31, 1999 tax year
end, please consult your tax advisor as to the pertinence of this notice. For
the fiscal year ended May 31, 1999, 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>
Classic Institutional Cash Management
Money Market Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
Classic Institutional U.S. Government
Securities Money Market Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
Classic Institutional U.S. Treasury
Securities Money Market Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00%
</TABLE>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and is reflected as a percentage of
"OrdinaryIncome Distribution".
21
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
INVESTMENT ADVISOR
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.
