ANNUAL
FINANCIAL REPORT
STI CLASSIC VARIABLE TRUST
DECEMBER 31, 1999
[STI CLASSIC VARIABLE TRUST LOGO OMITTED]
<PAGE>
Dear STI Classic Variable Trust Shareholders:
The following 1999 Annual Financial Report provides you a detailed summary of
each of the STI Classic Variable Trust funds. STI Classic Funds and the STI
Classic Variable Trust funds have presented investors the opportunity to invest
in a variety of investment options since 1992.
On December 30, 1999, the STI Classic Variable Trust enhanced its offering with
the introduction of the Quality Growth Stock Fund and the Growth and Income
Fund. The eight STI Classic Variable Trust funds now available have been
developed specifically to meet the changing needs of today's investor. Each of
these funds offers an investment discipline that identifies a specific mix of
risk and return. Together, the funds complement one another, providing
convenient access to different segments of the stock and bond markets. The
combination of these funds is intended to offer an ideal investment program for
almost any investor.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST (UNAUDITED)
NET OF FEES PERFORMANCE AS OF DECEMBER 31, 199
- ------------------------------------------------------------------------------------------------------------------------------------
THREE SINCE INCEPTION INCEPTION
MONTHS ONE YEAR TWO YEARS (ANNUALIZED) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STI CLASSIC VARIABLE TRUST
CAPITAL APPRECIATION FUND 8.83% 8.73% 18.42% 24.54% 10/2/95
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
GROWTH AND INCOME FUND N/A N/A N/A N/A 12/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
INTERNATIONAL EQUITY FUND 5.93% 8.81% 9.80% 12.10% 11/7/96
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
MID-CAP EQUITY FUND 19.78% 14.00% 10.53% 14.70% 10/2/95
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
QUALITY GROWTH STOCK FUND N/A N/A N/A N/A 12/30/99
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
SMALL CAP EQUITY FUND 0.96% (4.78%) (8.56%) (8.69%) 10/22/97
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
VALUE INCOME STOCK FUND (2.55%) (3.00%) 3.15% 13.62% 10/2/95
- ------------------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
INVESTMENT GRADE BOND FUND (0.63%) (1.67%) 3.71% 5.24% 10/2/95
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RETURNS.
</FN>
</TABLE>
The STI Classic Variable Trust is a well-established family of mutual funds,
nationally recognized for the diversity and quality of investment options that
they provide. The advisers to the STI Classic Variable Trust, STI Capital
Management and Trusco Capital Management, are committed to providing you quality
investment products which will aid you in achieving your investment objectives.
We hope you will find the information on the following pages useful. It is
intended to give you a better understanding of how our portfolio managers are
investing your money. Thank you for your interest and participation in the STI
Classic Variable Trust. We look forward to many successful years of investing in
the future.
Sincerely,
[Anthony R. Gray signature omitted] [Douglas S. Phillips signature omitted]
Anthony R. Gray Douglas S. Phillips, CFA
Chief Executive Officer and Chief
Investment Officer President, Chief Investment Officer
STI Capital Management, N.A. Trusco Capital Management, Inc.
<PAGE>
CAPITAL APPRECIATION FUND
-------------------------
The STI Classic Variable Trust Capital Appreciation Fund seeks to provide
capital appreciation by investing in a portfolio of common stocks, warrants, and
securities convertible into common stocks which in the Advisor's opinion are
undervalued in the marketplace at the time of purchase. Once again, the stock
market was completely dominated by technology and telecommunications. These
so-called "new economy" stocks dominated the major averages such as the NASDAQ
and the S&P 500 Index. Our holdings in ADC Telecom, Analog Devices, BMC
Software, Cisco Systems, EMC, Hewlett-Packard, Intel, Lucent Technologies,
Microsoft, Nortel Networks, Sun Microsystems and Texas Instruments benefited
accordingly. In many cases, these technology stocks are selling at high
price-earnings multiples, but investors seem willing to support these levels.
For the year ended December 31, 1999, the Capital Appreciation Fund had a total
return of 8.73% versus 21.04% for the S&P 500 Composite Index.
The fourth quarter was weak for non-technology issues. As of December 31, 1999,
about 72 percent of our portfolio holdings were outside of technology and
telecommunications, which is about in line with the S&P 500 Index.
Some "old economy" stocks were hurt despite not having fundamental problems. For
instance, Tyco International sold off sharply because an investment newsletter
questioned the company's proper use of Generally Accepted Accounting Principles,
charging that it produced misleading results in the way it recorded
acquisitions.
On the plus side, the portfolio was underweighted in financials and
pharmaceuticals. Financial stocks generally performed poorly because of rising
interest rates, and pharmaceuticals are still weak because of concerns over the
expansion of Medicare to cover prescription drugs.
Currently, we see value in financials, pharmaceuticals and other defensive
groups such as grocery chains and drug stores. For instance, Safeway Stores has
lost half its value in 1999, yet the company's earnings growth exceeds General
Electric, which sells at a 60% premium to the market.
Sixty percent of the New York Stock Exchange stocks were down in 1999, and we
anticipate a meaningful correction in the high flyer technology stocks in the
next six months. Although the gap between stocks that are doing well and those
that are not has not widened, history suggests that these gaps will eventually
close.
[Capital Growth graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Lipper Large-
STI Classic Variable S&P 500 Lipper Growth Cap Core Funds
Trust Capital Appr. Fund Composite Index Funds Objective Classification
10/31/95 10,000 10,000 10,000 10,000
12/95 10,632 10,640 10,550 10,388
12/96 13,157 13,081 12,722 12,444
12/97 17,964 17,444 16,227 15,634
12/98 23,168 22,433 20,386 19,326
12/99 25,191 27,153 24,932 24,990
One Annualized Annualized
Year 3 Year Inception
Return Return to Date
- --------------------------------------
8.73% 24.54% 24.18%
Past performance is no indication of future performance.
2
<PAGE>
INTERNATIONAL EQUITY FUND
-------------------------
The STI Classic Variable Trust International Equity Fund seeks to provide
long-term capital appreciation by investing primarily in a diversified portfolio
of equity securities of foreign issuers. Although the past year was strong for
growth and momentum investors around the world, 1999 was particularly difficult
for value investors, which is the discipline of the International Equity Fund.
For the year ended December 31, 1999, the International Equity Fund had a total
return of 8.81% versus 26.96% for the Morgan Stanley MSCI EAFE Index.
We believe now is the right time for investors to be looking for value
characteristics, considering sky high global valuations, rising interest rates
and the generally under-owned nature of these types of investments.
The telecom sector in Europe provides a good example of the overvalued nature of
the market. The sector trades at 75 times trailing earnings with average
earnings per share growth of 10-12% over the next five years. We see significant
downside risk for these stocks.
In contrast, the valuation criteria of the International Equity Fund consists of
a median earnings per share growth rate of 16% and a forecast price-to-earnings
multiple of 19. These valuations provide upside potential and offer the
defensive nature of real sustainable earnings, not the hope of multiple
expansion.
Examples of large holdings in the Fund include Diageo, a UK based global food
and spirits company; Altadis, a Franco-Spanish logistics and tobacco company;
Imperial Tobacco, a UK tobacco company; and Kirin Brewery, a Japanese consumer
products company. All of these stocks, in our opinion, have upside of 35-50% on
a stand alone basis.
While there are periods of time in the investment cycle which afford investors
the opportunity to take on additional valuation risk, we believe now is not that
time. In our opinion, valuations throughout the world are at all time highs,
interest rates are rising and forecasting risk continues to rise. We continue to
believe in the value approach to investing and believe that our portfolio will
be properly positioned to outperform the market when the value discipline comes
back into favor.
[Internationally Equity graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Morgan Stanley MSCI EAFE Index(1) STI Classic Variable Trust Inter. Equity Fund
1/30/96 10,000 10,000
12/96 10,200 9,871
12/97 11,918 10,047
12/98 13,205 12,056
12/99 14,368 15,306
One Annualized Annualized
Year 3 Year Inception
Return Return to Date
- ------------------------------------------
8.81% 12.10% 12.10%
Past performance is no indication of future performance.
1"MSCI EAFE Index" is a registered service mark of Morgan Stanley Capital
International which does not sponsor, and is in no way affiliated with, the
International Equity Fund.
3
<PAGE>
MID-CAP EQUITY FUND
-------------------
The STI Classic Variable Trust Mid-Cap Equity Fund seeks to provide capital
appreciation by investing primarily in a diversified portfolio of common stocks,
preferred stocks and securities convertible into common stock of small to
mid-size companies with above-average growth potential. Mid-cap stocks
outperformed large cap stocks during the fourth quarter. Meanwhile, the Mid-Cap
Equity Fund outperformed the S&P 400 Mid-Cap Index for the fourth quarter,
driven by overweights in technology and telecommunications. For the year ended
December 31, 1999, the Mid-Cap Equity Fund had a total return of 14.00% versus
14.72% for the S&P 400 Mid-Cap Index.
VoiceStream Wireless Corp., a major U.S. personal communications service
provider, more than doubled in price during the quarter as investors took note
of its strong subscriber growth. In technology, Citrix Systems, which helps
companies efficiently use advanced Microsoft Windows applications, nearly
doubled in price. We also had some good performance in biotechnology,
particularly from companies that are performing genetic research.
Some excellent performers actually existed outside of technology. Men's
Wearhouse, the national men's clothing retailer, continued to exceed Wall Street
expectations. Imax Corporation, the giant screen theater systems designer, was
another strong performer in the quarter. A number of energy and oil service
companies in the portfolio also generated strong results, driven by rising oil
prices.
Areas of weakness included financial services, which is typical in a rising
interest rate environment. In addition, certain regional banks reported
disappointing earnings, lending credence to the notion that credit quality is
beginning to deteriorate. The pharmaceutical industry had a tough year in 1999,
and may remain weak during the election cycle in 2000.
Looking forward, we expect to see continued strong fundamentals in technology
and communications in 2000. Energy service companies should see a strong rebound
in revenues and earnings. Mid-cap stocks offer an exciting opportunity to
participate in these and other areas as we move into the new century.
[Mid-Cap graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
S&P 400 Mid-Cap Index STI Classic Variable Trust Mid-Cap Equity Fund
10/31/95 10,000 10,000
12/95 10,226 10,408
12/96 11,868 12,408
12/97 14,506 16,408
12/98 15,545 19,545
12/99 17,721 22,422
One Annualized Annualized
Year 3 Year Inception
Return Return to Date
- -----------------------------------------
14.00% 14.30% 14.70%
Past performance is no indication of future performance.
4
<PAGE>
SMALL CAP EQUITY FUND
---------------------
The STI Classic Variable Trust Small Cap Equity Fund seeks to provide capital
appreciation with a secondary goal of achieving current income. Small cap
equities with value characteristics experienced another year where they were out
of favor. Eight of the eleven industry groups comprising the Frank Russell 2000
Value Index had negative returns in 1999. The only sectors that had positive
performance for the year were technology, energy and healthcare. For the year
ended December 31, 1999, the Small Cap Equity Fund had a total return of -4.78%
versus -1.49% for the Frank Russell 2000 Value Index.*
Many of the securities in the portfolio were impacted by the dramatic rise in
interest rates and energy prices during the year. The tight labor market was
also a dominant factor in the performance of many of the securities.
On a positive note, six of the Fund's holdings received buyout offers during the
year. These buyouts were at substantial premiums and brought to light the
dramatic valuation disparity between small cap equities and large cap equities.
We would expect more merger and acquisition activity if the dramatic valuation
discounts that the Fund's holdings have relative to our estimated private market
valuations continue.
As a pure value manager, we cannot discuss the year without mentioning the
unusual valuations that many sectors of the market reached during the year. Many
securities in the technology, internet and telecom sectors reached valuations
that, in our opinion, make no economic sense. We are not invested in these
securities, since we regard them as too speculative for the style of management
we utilize in managing a small cap value portfolio.
Looking at the year 2000, we are cautiously monitoring the interest rate
environment, commodity prices and the labor markets. We are comfortable with the
valuation levels of the securities we hold, especially relative to large cap and
growth stock valuations. The earnings and cash flow forecasts for the companies
we own should exhibit strong gains this year.
Overall, we would expect 2000 to be another volatile year, with extreme
valuations at both ends brought more in line with normal valuations. This will
mean many of the high-flying sectors may see their share prices decline
drastically and many of the laggards, including most of the small cap value
universe, may see their share prices appreciate.
[Small Cap Equity graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Var. Frank Russell Frank Russell
Trust Small Cap Eqty 2000 Index* 2000 Value Index
10/31/97 10,000 10,000 10,000
12/97 10,214 10,109 10,452
12/98 8,970 9,851 9,778
12/99 8,541 11,945 9,632
One Annualized
Year Inception
Return to Date
- -------------------------
- -4.78% -8.69%
Past performance is no indication of future performance.
*Going forward, the STI Classic Variable Trust Small Cap Equity Fund will
no longer track performance against the Frank Russell 2000 Index. In the
Investment Advisor's opinion, the Frank Russell 2000 Value Index is a more
appropriate benchmark due to the investment strategy of the fund.
5
<PAGE>
VALUE INCOME STOCK FUND
-----------------------
The STI Classic Variable Trust Value Income Stock Fund seeks to provide current
income with a secondary goal of achieving capital appreciation by investing
primarily in equity securities. As a strict deep value investor, the fourth
quarter was a difficult one for the portfolio. The median stock in the universe
from which we select declined 2% for the quarter. However, we were still able to
find attractive value. For the year ended December 31, 1999, the Value Income
Stock Fund had a total return of -3.00% versus 12.72% for the S&P 500/BARRA
Value Index.
The telephone stocks in the portfolio performed well, particularly those with a
significant wireless component. For example, AT&T was a strong performer on news
that the company would create a separate "tracking stock" to chart the fortunes
of its wireless operations. We were initially attracted to AT&T because we
believe that the sum of the parts is greater than the current stock price. Their
decision to form a "tracking stock" to chart the fortunes of their wireless
operation provides investors with a separate market valuation in a high growth
area.
Some positive developments took place in the paper industry, with Boise Cascade
and Consolidated Paper performing well. Growth in manufacturing capacity is
slowing, suggesting that pricing should be favorable this year. Kimberly Clark,
primarily a tissue company that has paper operations, performed well during the
fourth quarter after meeting Wall Street expectations.
Insurance industry stocks benefited from legislation eliminating the
Glass-Steagal Act, a 60-year old law that prevented banks from buying brokerage
and insurance companies.
We continue to focus on stocks with inspired value characteristics that have
catalysts that are likely to unlock that intrinsic value. When investors become
concerned about risk and valuation, then this portfolio will likely be
handsomely rewarded.
[Value Income graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Lipper
Variable Trust S&P 500/BARA Income Funds Lipper Equity Income
Value Income Fund Value Index Classification Funds Objective
10/31/95 10,000 10,000 10,000 10,000
12/95 10,828 10,816 10,709 10,690
12/96 12,846 13,194 12,729 12,728
12/97 16,292 17,149 16,194 16,199
12/98 17,871 19,667 17,953 18,138
12/99 17,334 22,169 18,552 18,965
One Annualized Annualized
Year 3 Year Inception
Return Return to Date
- -------------------------------------------
- -.300% 10.51% 13.62%
Past performance is no indication of future performance.
6
<PAGE>
INVESTMENT GRADE BOND FUND
--------------------------
The STI Classic Variable Trust Investment Grade Bond Fund seeks to provide a
high level of total return through current income and capital appreciation,
while preserving the principal amount invested. Total return includes not only
current income, but also changes in value of assets held by the Fund. For the
year ended December 31, 1999 the Fund had a total return of -1.67% versus an
average return of -1.31% for the Lipper Intermediate Investment Grade Debt
Objective. For the same period, the Lehman Government/Corporate Bond Index
(which has no fees taken out) had a return of -2.15%.
Interest rates bottomed in October 1998 in the wake of market disruptions that
began in Asia, continued in Russia and finally moved into the Americas. As 1999
began, strong economic growth and a tightening labor market raised concerns of
increased inflationary pressures. In response the Federal Reserve tightened
three times and interest rates rose for all of 1999. Thirty-year Treasury yields
that started the year at 5.12% closed out the year at 6.49%.
Both mortgages and corporate securities began the year priced attractively
versus Treasury securities, and as a result outperformed the Treasury sector. We
maintained our overweight in corporates throughout the year, but exited our
mortgage positions as they became more expensive versus corporates and
Treasuries. Our holding of both mortgages and corporates enhanced the total
return of the Fund for the year.
The Fund started the year structured defensively from an average maturity
(duration) perspective, and this added substantially to the total return of the
portfolio. As the year progressed and interest rates increased, we shifted the
Fund to a more neutral position. The Fund continues to be managed with only
moderate shifts in the average maturity (duration). The total return is enhanced
through yield curve analysis (monitoring and analyzing the risk/reward trade off
of different maturity sectors), sector rotation, credit analysis and other low
risk strategies. By actively pursuing these strategies, the Fund strives to add
to total return while reducing risk.
[Investment Grade Bond graph omitted]
plot points follows:
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Lehman Lipper Intermediate
Variable Trust Government/Corporate Investment-Grade
Investment Grade Bond Fund Bond Index Debt Objective
10/31/95 10,000 10,000 10,000
12/95 10,295 10,314 10,275
12/96 10,531 10,615 10,595
12/97 11,462 11,649 11,517
12/98 12,537 12,753 12,371
12/99 12,328 12,479 12,209
One Annualized Annualized
Year 3 Year Inception
Return Return to Date
- -------------------------------------------
- -1.67% 5.39% 5.24%
Past performance is no indication of future performance.
7
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST December 31, 1999
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (91.3%)
BASIC MATERIALS (1.5%)
Air Products & Chemicals 25,200 $ 846
Ecolab 25,400 994
Monsanto 6,300 224
-------
2,064
-------
CAPITAL GOODS (10.1%)
General Electric 35,100 5,432
W.W. Grainger 8,500 406
Minnesota Mining & Manufacturing 10,900 1,067
Republic Services, Cl A* 21,900 315
Textron 22,900 1,756
Tyco International 83,180 3,234
United Technologies 19,400 1,261
Waste Management Inc 1,569 27
-------
13,498
-------
COMMUNICATION SERVICES (2.5%)
Centurytel 19,600 929
Charter Communications 12,100 265
GTE 8,100 572
MCI WorldCom* 18,468 980
Sprint 9,300 626
-------
3,372
-------
CONSUMER CYCLICALS (17.8%)
Abercrombie & Fitch, Cl A* 7,400 197
Bed Bath & Beyond* 14,700 511
Brinker International* 31,900 766
Carnival 23,600 1,128
Cendant* 54,860 1,457
Costco Wholesale* 20,400 1,861
CVS 41,100 1,641
Family Dollar Stores 13,900 227
Harley-Davidson 4,600 295
Hasbro 38,100 726
Interpublic Group 7,200 415
Kroger* 77,700 1,467
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Lear* 19,300 $ 618
Linens 'N Things* 17,800 527
Lowe's 39,600 2,366
Masco 59,250 1,503
Maytag 9,200 442
Mediaone Group* 12,900 991
New York Times, Cl A 8,900 437
Office Depot* 78,500 859
Royal Caribbean Cruises 17,600 868
Saks* 33,500 521
SPX* 7,500 606
Tandy 48,400 2,381
Time Warner 6,900 500
United Rentals* 29,700 509
-------
23,819
-------
CONSUMER STAPLES (8.3%)
Anheuser Busch 6,300 447
Coca-Cola Enterprises 35,400 712
ConAgra 43,801 988
Dial 18,400 447
Flowers Industries 15,000 239
Kimberly Clark 9,100 594
McDonald's 19,200 774
Nabisco Group Holdings 39,100 415
Nike, Cl B 2,000 99
Pepsi Bottling Group 29,600 490
PepsiCo 27,500 969
Philip Morris 1,400 32
Ralston Purina 34,300 956
Safeway* 21,900 779
Sara Lee 20,400 450
Seagram 12,300 553
Unilever NV 4,500 245
US Foodservice* 52,400 878
Viacom, Cl B* 18,400 1,112
-------
11,179
-------
8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (4.9%)
Anadarko Petroleum 8,700 $ 297
Burlington Resources 24,300 803
Conoco, Cl B 46,000 1,144
Consolidated Natural Gas 13,800 896
EOG Resourses 18,100 318
Exxon Mobil 6,852 552
Halliburton 3,900 157
Niagara Mohawk Holdings* 7,100 99
Texaco 29,500 1,602
Unocal 20,500 688
-------
6,556
-------
FINANCIALS (9.0%)
Ace Ltd 38,800 647
American International Group 14,953 1,617
AmSouth Bancorp 16,801 324
Associates First Capital 12,600 346
Atlantic Richfield 12,600 1,090
Bank of America 8,442 424
Bank United, Cl A 9,600 262
BB&T 4,100 112
Comerica 5,200 243
Conseco 26,300 470
First Security 4,500 115
Firstar 7,300 154
Fleet Boston Financial 21,581 751
Freddie Mac 18,500 871
Mellon Financial 24,600 838
PNC Bank 9,000 400
Radian Group 7,800 372
Torchmark 8,100 235
U.S. Bancorp 46,200 1,100
Unumprovident 27,600 885
Washington Mutual 30,368 790
-------
12,046
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
HEALTH CARE (10.4%)
Abbott Laboratories 9,500 $ 345
American Home Products 44,000 1,735
Baxter International 48,600 3,053
Becton Dickinson 4,100 110
Bristol-Myers Squibb 12,800 822
Cardinal Health 43,734 2,094
Eli Lilly 13,800 918
Health Management
Associates, Cl A* 7,700 103
Healthsouth* 35,902 193
Medtronic 6,300 230
Merck 18,400 1,234
Schering Plough 13,700 578
Tenet Healthcare* 23,300 548
Warner Lambert 19,900 1,631
Watson Pharmaceuticals* 8,600 308
-------
13,902
-------
TECHNOLOGY (26.7%)
ADC Telecommunications* 30,200 2,191
Analog Devices* 8,200 763
BMC Software* 9,000 719
Ceridian* 47,300 1,020
Cisco Systems* 35,100 3,760
Computer Sciences* 8,100 766
Comverse Technology* 4,100 593
Dell Computer* 1,300 66
EMC* 18,300 1,999
General Instrument* 4,900 416
Hewlett Packard 9,800 1,117
Honeywell International 44,212 2,551
IBM 38,900 4,201
Intel 22,900 1,885
Lucent Technologies 35,141 2,629
Microsoft* 48,950 5,715
Nortel Networks 5,400 545
Sun Microsystems* 35,200 2,726
Texas Instruments 21,800 2,112
-------
35,774
-------
9
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST December 31, 1999
CAPITAL APPRECIATION FUND -- CONCLUDED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
TRANSPORTATION (0.1%)
Delta Air Lines 1,400 $ 70
Southwest Airlines 6,000 97
--------
167
--------
Total Common Stocks
(Cost $97,619) 122,377
--------
PREFERRED STOCKS (1.9%)
COMMUNICATION SERVICES (0.3%)
Cox Communications,
CV to 0.8621 shares* 4,500 438
--------
CONSUMER STAPLES (0.7%)
Suiza Capital Trust II,
CV to 0.6390 share,
Callable 04/02/01 @ 51.719 25,000 856
--------
ENERGY (0.9%)
Apache,
CV to 0.8197 shares 20,000 710
CMS Energy,
CV to 0.783 shares 15,600 528
--------
1,238
--------
Total Preferred Stocks
(Cost $2,625) 2,532
--------
CONVERTIBLE BONDS (1.3%)
Echostar Communications,
CV to 11.0035 shares,
4.875%,01/01/07 $ 500 613
Potomac Electric Power,
CV to 29.5 shares,
5.000%,09/01/02 1,000 973
Tower Automotive,
CV to 38.6399 shares,
5.000%, 08/01/04 300 249
--------
Total Convertible Bonds
(Cost $1,715) 1,835
--------
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (6.2%)
Morgan Stanley
2.95%, dated 12/31/99,
matures 01/03/00,
repurchase price $8,315,946
(collateralized by U.S. Agency
Obligations: market value
$8,483,409) $8,316 $ 8,316
--------
Total Repurchase Agreement
(Cost $8,316) 8,316
--------
Total Investments (100.7%)
(Cost $110,275) 135,060
--------
OTHER ASSETS AND LIABILITIES, NET (-0.7%) (988)
--------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 6,613,954 outstanding
shares of beneficial interest 106,118
Accumulated net realized gain on
investments 3,139
Net unrealized appreciation on
investments 24,785
Undistributed net investment income 30
--------
Total Net Assets (100.0%) $134,072
========
Net Asset Value, Offering and
Redemption Price Per Share $20.27
========
* NON-INCOME PRODUCING SECURITY
CL -- CLASS
CV -- CONVERTIBLE SECURITY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<PAGE>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOREIGN COMMON STOCKS (77.9%)
AUSTRALIA (1.9%)
Broken Hill Proprietary 216 $ 3
Leighton Holdings 39,600 153
National Australia Bank 12,665 194
-------
350
-------
AUSTRIA (0.9%)
Erste Bank 1,800 80
Mayr-Melnhof Karton 2,000 92
-------
172
-------
BELGIUM (0.0%)
Dexia Belgium-VVPR Strips* 1 --
-------
DENMARK (1.2%)
Danisco 5,700 222
-------
FRANCE (8.0%)
Coflexip Stena Offshore 2,275 165
ISIS 500 30
Lafarge 3,450 402
Lagardere S.C.A. 200 11
Rhone-Poulenc 600 35
Suez Lyonnaise des Eaux 1,660 266
Technip 2,840 291
Total Fina, Cl B 1,900 253
-------
1,453
-------
GERMANY (3.6%)
Henkel 3,680 243
Metallgesellschaft 20,250 406
-------
649
-------
GREECE (0.9%)
Hellenic Telecom Organization 6,882 164
-------
IRELAND (2.7%)
Bank of Ireland 61,389 488
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ISRAEL (2.2%)
ECI Telecommunications 12,970 $ 410
-------
ITALY (3.9%)
ENI 95,100 523
Parmalat Finanziaria 18,700 24
Saipem 44,100 159
-------
706
-------
JAPAN (14.7%)
Aucnet 1,210 73
East Japan Railway 82 442
Fuji Electric 64,000 336
Fuji Heavy Industries 39,900 273
KAO 7,300 208
Kirin Brewery 18,000 189
Matsushita Electric Industrial 14,000 388
NEC 7,000 167
Obayashi 45,000 213
Olympus Optical 11,000 156
Sumitomo Heavy Industries 38,000 104
Toshiba 18,000 137
-------
2,686
-------
NETHERLANDS (3.6%)
IHC Caland 5,005 183
KPN 46 5
Nutreco Holdings 9,800 302
Unique International 8,523 176
-------
666
-------
NEW ZEALAND (1.1%)
Fernz 30,700 70
Fletcher Challenge Building 83,145 123
-------
193
-------
NORWAY (4.4%)
Kvaerner 6,100 129
11
Amounts designated as "--" are either $0 or have been rounded to $0.
<PAGE>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
INTERNATIONAL EQUITY FUND -- CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
NORWAY (CONTINUED)
Petroleum Geo Services ADR* 16,100 $ 286
Petroleum Geo Services* 21,500 384
-------
799
-------
PANAMA (0.4%)
Banco Latinamericano
de Exportaciones 3,600 85
-------
PHILIPPINES (0.5%)
Ayala 302,000 88
-------
SINGAPORE (1.9%)
Asia Pulp & Paper ADR* 21,900 172
Overseas - Chinese Banking 18,000 166
-------
338
-------
SOUTH AFRICA (0.8%)
Gold Fields ADR 6,800 31
Gold Fields 13,600 65
Harmony Gold ADR 4,600 29
Harmony Gold 4,000 26
-------
151
-------
SOUTH KOREA (0.7%)
Hite Brewery Limited 3,100 106
Pohang Iron & Steel ADR 800 28
-------
134
-------
SPAIN (2.6%)
Tabacalera, Cl A 33,300 476
-------
UNITED KINGDOM (21.9%)
Allied Zurich 33,050 390
Bass 20,460 255
Billiton 28,700 170
Diageo 64,066 516
Glaxo Wellcome 6,139 174
Granada Group 22,574 229
Hanson 21,800 183
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
Imperial Tobacco Group 36,100 $ 298
Invensys 62,000 338
Reckitt & Colman 22,200 208
Rolls-Royce 85,300 295
Royal & Sun Alliance Insurance 47,200 360
SmithKline Beecham 18,919 242
South African Breweries 28,665 290
Stagecoach Holdings 21,000 49
-------
3,997
-------
Total Foreign Common Stocks
(Cost $13,981) 14,227
-------
Total Investments (77.9%)
(Cost $13,981) $14,227
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
MID-CAP EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (85.1%)
BASIC MATERIALS (3.2%)
Stillwater Mining* 31,300 $ 998
-------
CAPITAL GOODS (2.0%)
Herman Miller 10,200 235
L-3 Communications* 9,400 391
-------
626
-------
COMMUNICATION SERVICES (2.3%)
Western Wireless, Cl A* 10,600 708
Winstar Communications* 58 4
-------
712
-------
CONSUMER CYCLICALS (12.2%)
Abercrombie & Fitch, Cl A* 9,600 256
Answerthink Consulting Group* 10,100 346
Antec* 7,600 277
BJ's Wholesale Club* 11,700 427
Harley-Davidson 5,600 359
Men's Wearhouse* 47,950 1,409
Outback Steakhouse* 10,000 259
Pixar* 7,100 251
Staff Leasing* 17,600 167
-------
3,751
-------
CONSUMER STAPLES (11.7%)
Dial 22,900 557
Flowers Industries 3,500 56
Hertz, Cl A 9,300 466
Imax* 33,500 917
Nordstrom 6,600 173
U.S. Foodservice* 84,400 1,414
-------
3,583
-------
ENERGY (12.9%)
Apache 7,800 288
BJ Services* 4,200 176
Barrett Resources* 16,200 477
Burlington Resources 8,200 271
Cooper Cameron* 4,500 220
Ensco International 14,700 336
Global Industries* 11,300 97
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (CONTINUED)
Global Marine* 12,100 $ 201
Nabors Industries* 10,700 331
Potomac Electric Power 15,100 346
Precision Drilling* 26,500 681
Smith International* 5,200 258
Weatherford International* 7,000 280
-------
3,962
-------
FINANCIALS (9.5%)
Bank United, Cl A 8,000 218
Colonial Bancgroup 38,700 402
Dime Bancorp 14,800 224
First Virginia Banks 7,600 327
Hibernia, Cl A 24,200 257
North Fork Bancorporation 22,200 388
Peoples Heritage Financial Group 19,400 292
Reliastar Financial 11,600 455
Trustmark 16,600 359
-------
2,922
-------
HEALTH CARE (5.7%)
Forest Laboratories* 7,100 436
Jones Pharmaceuticals 15,250 662
Renal Care* 23,400 547
VISX* 2,100 109
-------
1,754
-------
TECHNOLOGY (24.0%)
Concurrent Computer* 11,400 213
Cypress Semiconductor* 15,800 512
Flextronics International* 25,400 1,168
J.D. Edwards & Company* 14,300 427
Iona Technologies* 100 5
Legato Systems* 5,400 372
Luminant Worldwide Corp* 2,000 91
Nova* 19,187 606
Parametric Technology* 12,100 327
RF Micro Devices* 4,600 315
Sanmina* 3,700 370
Sawtek* 14,600 972
Scientific-Atlanta 7,800 434
Symbol Technologies 12,600 801
13
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
MID-CAP EQUITY FUND -- CONCLUDED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
TECHNOLOGY (CONTINUED)
Vitesse Semiconductor* 3,900 $ 205
Westinghouse Air Brake 9,900 176
Zoran* 6,700 374
-------
7,368
-------
TRANSPORTATION (1.6%)
CNF Transportation 14,300 493
-------
Total Common Stocks
(Cost $22,327) 26,169
-------
PREFERRED STOCKS (5.0%)
Adelphia Communications,
CV to 2.4555 shares* 5,100 959
Globalstar Telecommunication,
CV to 1.9263 shares 6,000 438
Winstar Communications Inc,
CV to 16.1391 shares* 100 135
-------
Total Preferred Stocks
(Cost $1,399) 1,532
-------
CONVERTIBLE BONDS (4.9%)
Affymetrix,
CV to 8.1301 shares,
Callable 10/07/02 @ 102.50
5.000%, 10/01/06 $ 150 223
Chiron Convertible,
CV to 34.59 shares,
Callable 08/16/99 @ 95.08
1.900%, 11/17/00 325 475
Human Genome,
CV to 6.9808 shares,
Callable 12/20/02 @ 102.50
5.000%, 12/15/06 125 150
Sanmina,
CV to 11.278 shares,
Callable 05/06/02 @ 101.70
4.250%, 05/01/04 150 198
Sepracor,
CV to 21.111 shares,
Callable 02/18/01 @ 103.57
6.250%, 02/15/05 215 464
-------
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS (CONTINUED)
Total Convertible Bonds
(Cost $1,090) $ 1,510
-------
REPURCHASE AGREEMENT (3.7%)
Morgan Stanley
2.45%, dated 12/31/99,
matures 01/03/00, repurchase
price $1,146,308 (collateralized
by a U.S. Treasury Note:
market value $1,179,488) $1,146 1,146
-------
Total Repurchase Agreement
(Cost $1,146) 1,146
-------
Total Investments (98.7%)
(Cost $25,962) 30,357
-------
OTHER ASSETS AND LIABILITIES, NET (1.3%) 387
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 2,022,497 outstanding
shares of beneficial interest 23,469
Accumulated net realized gain on
investments 2,875
Net unrealized appreciation on
investments 4,395
Undistributed net investment income 5
-------
Total Net Assets (100.0%) $30,744
=======
Net Asset Value, Offering and
Redemption Price Per Share $ 15.20
=======
* NON-INCOME PRODUCING SECURITY
CL -- CLASS
CV -- CONVERTIBLE SECURITY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
<PAGE>
- --------------------------------------------------------------------------------
SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (96.6%)
BASIC MATERIALS (11.2%)
Carpenter Technology 9,400 $ 258
Lilly Industries Incorporated, Cl A 26,200 352
Quixote 10,100 154
Texas Industries 9,200 392
Wausau-Mosinee Paper 7,100 83
-------
1,239
-------
CAPITAL GOODS (10.7%)
American Woodmark 5,500 133
BHA Group Holdings 6,100 48
Fedders 2,100 12
Fedders Cl A 8,000 41
Gerber Scientific 9,600 211
Kaman 10,200 131
Lindberg 8,700 67
LSI Industries 8,500 184
Milacron 1,100 17
Precision Castparts 7,900 207
Smith (A.O.) 5,900 129
-------
1,180
-------
CONSUMER CYCLICALS (21.5%)
Bush Industries 11,300 194
CBRL Group 16,100 156
Chemed 4,000 114
Federal Signal 8,400 135
Grey Advertising 200 80
Harman International 12,400 696
Interface 74,300 427
Midas 5,000 109
Pep Boys 15,100 138
Phillips Van Heusen 14,000 116
Service Experts* 14,200 83
Stride Rite 20,100 131
-------
2,379
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER STAPLES (22.0%)
Bowne & Company 11,000 $ 149
Ingles Markets, Cl A 9,600 107
Pittston Brink's Group 28,000 616
Polaroid 28,200 531
Smucker (J.M.), Cl B 8,200 133
Standard Register 6,400 124
Universal Foods 23,100 471
Wolverine World Wide 22,300 244
York Group 14,100 61
-------
2,436
-------
ENERGY (2.9%)
Fletcher Challenge Energy ADR 5,200 134
Pennzoil-Quaker State 18,000 183
-------
317
-------
FINANCIALS (10.9%)
Administradora de Fondos de
Pensiones Provida ADR 4,100 88
Banco Latinamericano de
Exportaciones, Cl E 3,300 78
Downey Financial 6,000 121
Klamath First Bancorp 7,000 83
Mutual Risk Management 8,400 141
PXRE Group 7,400 96
Scottish Annuity & Life 12,700 104
Seacoast Banking of Florida 3,200 92
Student Loan 4,300 214
West Coast Bancorp 6,160 83
Westerfed Financial 6,500 99
-------
1,199
-------
HEALTH CARE (6.4%)
Block Drug, Cl A 1,107 34
Interim Services* 23,950 593
Vital Signs 3,400 78
-------
705
-------
15
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
SMALL CAP EQUITY FUND -- CONCLUDED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SERVICE INDUSTRIES (1.0%)
ABM Industries 5,400 $ 110
-------
TECHNOLOGY (1.6%)
Innovex 10,000 94
Pioneer-Standard Electronics 5,500 79
-------
173
-------
TRANSPORTATION (5.2%)
Hunt J B Transportation Services 6,900 96
Knightsbridge Tankers Limited 6,300 85
Sea Containers 14,800 394
-------
575
-------
UTILITIES (3.2%)
Midcoast Energy Resources 5,700 95
Nui 7,000 185
UGI 3,800 78
-------
358
-------
Total Common Stocks
(Cost $11,986) 10,671
-------
REPURCHASE AGREEMENT (2.9%)
Morgan Stanley
5.25%, dated 12/31/99,
matures 01/03/00,
repurchase price $320,990
(collateralized by an U.S. Treasury
Note: market value $330,546) $321 321
-------
Total Repurchase Agreement
(Cost $321) 321
-------
Total Investments (99.5%)
(Cost $12,307) 10,992
-------
OTHER ASSETS AND LIABILITIES, NET (0.5%) 55
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 1,386,363
outstanding shares of beneficial interest $14,071
Accumulated net realized loss on
investments (1,726)
Net unrealized depreciation on
investments (1,315)
Undistributed net investment income 17
-------
Total Net Assets (100.0%) $11,047
=======
Net Asset Value, Offering and Redemption
Price Per Share $7.97
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
<PAGE>
- --------------------------------------------------------------------------------
VALUE INCOME STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (91.6%)
BASIC MATERIALS (5.5%)
Allegheny Technologies 38,700 $ 868
B.F. Goodrich 42,100 1,158
Boise Cascade 30,800 1,247
Consolidated Papers 14,800 471
Hercules 39,300 1,095
Rohm & Haas 19,300 785
-------
5,624
-------
CAPITAL GOODS (15.6%)
Cooper Industries 38,200 1,545
Crown Cork & Seal 27,500 615
Emerson Electric 30,300 1,738
General Dynamics 21,300 1,124
Harris 29,100 777
Hubbell, Cl B 38,900 1,060
Minnesota Mining & Manufacturing 13,500 1,321
National Service Industries 40,500 1,195
Northrop Grumman 21,000 1,135
Pactiv* 44,300 471
Pall 38,700 834
Perkinelmer 30,600 1,276
Sonoco Products 52,800 1,201
Thomas & Betts 25,800 822
W.W. Grainger 15,800 755
-------
15,869
-------
COMMUNICATION SERVICES (8.1%)
Alltel 10,900 901
AT&T 39,500 2,005
GTE 40,300 2,844
SBC Communications 40,100 1,955
Sprint 8,300 559
-------
8,264
-------
CONSUMER CYCLICALS (9.5%)
Albertson's 45,700 1,474
American Greetings, Cl A 36,300 858
Dana 36,000 1,078
Genuine Parts 42,700 1,059
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
H&R Block 18,600 $ 814
J.C. Penney 25,400 506
Masco 78,400 1,989
Ryder 42,000 1,026
Stanley Works 29,800 898
-------
9,702
-------
CONSUMER STAPLES (15.1%)
Bestfoods 49,100 2,581
ConAgra 107,300 2,421
Dean Foods 15,900 632
Flowers Industries 41,900 668
Fort James Corp. 27,300 747
Fortune Brands 37,000 1,223
H.J. Heinz 28,600 1,139
International Flavors & Fragrances 49,100 1,854
Kimberly Clark 36,300 2,369
Newell Rubbermaid 36,200 1,050
Wallace Computer Services 40,700 677
-------
15,361
-------
ENERGY (6.5%)
Conoco, Cl B 91,372 2,273
Exxon Mobil 12,100 975
Montana Power 10,900 393
Texaco 36,500 1,982
Unocal 28,200 946
-------
6,569
-------
FINANCIALS (19.0%)
Allstate 73,500 1,764
American Financial Group 27,800 733
American General 15,800 1,199
AmSouth Bancorp 61,404 1,186
Bank of America 45,900 2,304
Bank One 16,300 523
Fleet Boston Financial 46,729 1,627
Hibernia, Cl A 59,000 627
KeyCorp 27,800 615
Paine Webber Group 36,700 1,424
17
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
VALUE INCOME STOCK FUND -- CONCLUDED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIALS (CONTINUED)
PNC Bank 34,400 $ 1,531
Reliastar Financial 22,600 886
Summit Bancorp 38,900 1,191
Torchmark 36,400 1,058
U.S. Bancorp 22,800 543
Union Planters 22,036 869
Unumprovident 39,500 1,266
-------
19,346
-------
HEALTH CARE (7.2%)
American Home Products 35,400 1,396
Bausch & Lomb 13,700 938
Baxter International 54,600 3,430
Pharmacia Upjohn ADR 35,700 1,606
-------
7,370
-------
TECHNOLOGY (2.2%)
IBM 20,200 2,182
-------
UTILITIES (2.9%)
GPU 25,300 757
Questar 58,700 880
Scana 48,300 1,298
-------
2,935
-------
Total Common Stocks
(Cost $100,532) 93,222
-------
REPURCHASE AGREEMENT (8.3%)
Morgan Stanley
2.95%, dated 12/31/99, matures
01/03/00, repurchase price
$8,404,169 (collateralized by
U.S. Agency Obligations:
market value $8,597,949) $ 8,404 8,404
-------
Total Repurchase Agreement
(Cost $8,404) $ 8,404
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
Total Investments (99.9%)
(Cost $108,936) $101,626
--------
OTHER ASSETS AND LIABILITIES, NET (0.1%) 115
--------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 7,690,109
outstanding shares of beneficial interest 104,685
Accumulated net realized gain on
investments 4,164
Net unrealized appreciation on
investments (7,310)
Undistributed net investment income 202
--------
Total Net Assets (100.0%) $101,741
========
Net Asset Value, Offering and Redemption
Price Per Share $13.23
========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
18
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT GRADE BOND FUND
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (24.0%)
U.S. Treasury Bonds
7.500%, 11/15/16 $1,200 $ 1,284
8.750%, 08/15/20 500 606
U.S. Treasury Notes
6.000%, 08/15/09 3,225 3,124
6.125%, 08/15/29 220 210
-------
Total U.S. Treasury Obligations
(Cost $5,362) 5,224
-------
CORPORATE OBLIGATIONS (65.3%)
FINANCE (48.1%)
Aon
6.900%, 07/01/04 650 638
Aristar Inc
7.250%, 06/15/06 500 487
Associates
6.250%, 11/01/08 450 416
Bank of America
6.625%, 06/15/04 400 390
Cit Group Holdings
6.500%, 06/14/02 350 345
Conseco
6.400%, 06/15/01 450 442
8.500%, 10/15/02 425 431
6.800%, 06/15/05 350 325
Countrywide Home Loan
6.850%, 06/15/04 300 294
Countrywide Home Loan, MTN
6.510%, 02/11/05 300 285
Donaldson Lufkin Jenrette, MTN
6.150%, 05/04/04 200 189
Finova Capital
7.250%, 07/12/06 500 491
Finova Capital, MTN
7.300%, 09/22/03 550 545
Ford Motor Credit
6.125%, 04/28/03 750 726
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCE (CONTINUED)
General Electric Capital, Ser A, MTN
6.267%, 07/23/03 $ 750 $ 730
6.810%, 11/03/03 300 297
Great Western Financial
8.600%, 02/01/02 140 143
Heller Financial, Ser I, MTN
6.500%, 07/22/02 500 491
Household Finance
7.200%, 07/15/06 450 440
Paine Webber Group, Ser C, MTN
6.020%, 04/22/02 500 484
Provident
7.000%, 07/15/18 550 478
Salomon
7.300%, 05/15/02 100 100
Salomon Smith Barney
6.250%, 01/15/05 250 236
Reliastar Financial
8.000%, 10/30/06 250 252
6.500%, 11/15/08 350 320
Wachovia
5.625%, 12/15/08 250 220
Washington Mutual
7.500%, 08/15/06 250 247
-------
10,442
-------
INDUSTRIAL (13.6%)
AT&T
6.500%, 03/15/29 425 363
Cooper Tire & Rubber
7.750%, 12/15/09 400 390
Dow Chemical
7.375%, 11/01/29 175 168
Dillards
6.430%, 08/01/04 450 423
Marriot International
7.875%, 09/15/09 250 246
Philip Morris
7.500%, 04/01/04 150 147
19
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
INVESTMENT GRADE BOND FUND -- CONCLUDED
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
INDUSTRIAL (CONTINUED)
Procter & Gamble
6.875%, 09/15/09 $ 200 $ 196
Sprint Capital
6.900%, 05/01/19 400 364
Times Mirror
7.450%, 10/15/09 175 173
Wal-Mart Stores
6.875%, 08/10/09 500 487
-------
2,957
-------
UTILITIES (3.6%)
Florida Power & Light
5.875%, 04/01/09 550 493
Trans-Canada Pipelines
7.150%, 06/15/06 300 291
-------
784
-------
Total Corporate Obligations
(Cost $14,639) 14,183
-------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS (8.5%)
FHLMC
5.750%, 03/15/09 875 799
FNMA
6.250%, 05/15/29 1,175 1,049
-------
Total U.S. Agency Mortgage-Backed
Obligations (Cost $1,875) 1,848
-------
REPURCHASE AGREEMENT (0.6%)
Morgan Stanley
5.25%, dated 12/31/99,
matures 01/03/00,
repurchase price $130,801
(collateralized by an U.S.
Treasury Note: market value
$134,694) 131 131
-------
Total Repurchase Agreement
(Cost $131) 131
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
Total Investments (98.4%)
(Cost $22,007) $21,386
-------
OTHER ASSETS AND LIABILITIES, NET (1.6%) 347
-------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 2,232,687
outstanding shares of beneficial interest 22,767
Accumulated net realized loss on
investments (413)
Net unrealized depreciation on
investments (621)
-------
Total Net Assets (100.0%) $21,733
=======
Net Asset Value, Offering and Redemption
Price Per Share $9.73
=======
FHLMC -- FEDERAL HOME LOAN MORTGAGE COMPANY
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
20
<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK
21
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
<TABLE>
<CAPTION>
---------- ------------- ------------
GROWTH INTERNATIONAL QUALITY
AND INCOME EQUITY GROWTH STOCK
FUND (1) FUND FUND (1)
---------- ------------- ------------
Assets:
<S> <C> <C> <C>
Investments at Market Value (Cost $--, $13,981 and $--respectively) ............ $ -- $14,227 $ --
Cash ........................................................................... 10 781 10
Foreign Currency (Cost $--, $3,243 and $-- respectively) ....................... -- 3,237 --
Receivable for Investment Securities Sold ...................................... -- 488 --
Receivable for Portfolio Shares Purchased ...................................... -- 19 --
Other Assets ................................................................... -- 58 --
------ ------- -----
Total Assets ................................................................... 10 18,810 10
------ ------- -----
Liabilities:
Payable for Investment Securities Purchased .................................... -- 429 --
Payable for Portfolio Shares Redeemed .......................................... -- 78 --
Accrued Expenses ............................................................... -- 31 --
Other Liabilities .............................................................. -- 4 --
------ ------- -----
Total Liabilities .............................................................. -- 542 --
------ ------- -----
Net Assets:
Portfolio Shares (unlimited authorization -- no par value) based on 1,010,
1,311,236, 1,010, respectively, outstanding shares of
beneficial interest .......................................................... 10 15,183 10
Undistributed net investment income ............................................ -- 149 --
Accumulated net realized gain on investments ................................... -- 2,847 --
Accumulated net realized loss on foreign currency transactions ................. -- (148) --
Net unrealized depreciation on forward foreign currency contracts, foreign
currency, and translation of other assets
and liabilities in foreign currency .......................................... -- (9) --
Net unrealized appreciation on investments ..................................... -- 246 --
------ ------- ------
Total Net Assets .................................................................. $10 $18,268 $10
====== ======= ======
Net Asset Value, Offering and Redemption Price Per Share .......................... $10.00 $13.93 $10.00
====== ======= ======
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations December 30, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
22
<PAGE>
STATEMENTS OF OPERATIONS (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
QUALITY VALUE
CAPITAL GROWTH INTERNATIONAL MID-CAP GROWTH SMALL CAP INCOME INVESTMENT
APPRECIATION AND INCOME EQUITY EQUITY STOCK EQUITY STOCK GRADE
FUND FUND (1) FUND FUND FUND (1) FUND FUND BOND FUND
------------ ---------- ------------ -------- -------- -------- -------- ----------
Investment Income:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income $ 465 $ -- $ 36 $ 72 $ -- $ 12 $ 547 $ 1,360
Dividend Income 1,188 -- 366 202 -- 271 2,548 --
Less: Foreign Taxes Withheld -- -- (27) -- -- (1) -- --
------- ---- ------ ----- ---- ------ ------ -------
Total Investment Income 1,653 -- 375 274 -- 282 3,095 1,360
------- ---- ------ ----- ---- ------ ------ -------
Expenses:
Investment Advisory Fees 1,408 -- 232 331 -- 134 853 159
Less: Investment Advisory
Fees Waived (252) -- (73) (100) -- (73) (8) (94)
Administrator Fees 62 -- 75 62 -- 62 62 62
Custody Fees 48 -- 30 7 -- 3 30 8
Transfer Agent Fees 34 -- 4 8 -- 3 25 4
Professional Fees 60 -- 6 11 -- 5 26 10
Trustee Fees 5 -- 1 1 -- -- 3 1
Registration Fees 6 -- -- -- -- -- 4 1
Printing Expenses 26 -- 3 5 -- 2 8 5
Pricing Fees 3 -- 15 1 -- -- 2 1
Insurance and Other Fees 4 -- -- 1 -- 1 4 1
Amortization of Deferred
Organization Costs 4 -- 3 4 -- 2 4 4
------- ---- ----- ----- ---- ------ ------- -------
Total Expenses 1,408 -- 296 331 -- 139 1,013 162
------- ---- ----- ----- ---- ------ ------- -------
Net Investment Income (Loss) 245 -- 79 (57) -- 143 2,082 1,198
------- ---- ----- ----- ---- ------ ------- -------
Net Realized Gain (Loss) on
Securities Sold 4,287 -- 2,891 2,943 -- (1,194) 4,217 (403)
Net Realized Loss on Foreign
Currency Transactions -- -- (121) -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments 5,562 -- (1,281) 789 -- 349 (9,964) (1,128)
Net Change in Unrealized Depreciation
on Forward Currency Contracts,
Foreign Currency, and Translation
of Other Assets and Liabilities
in Foreign Currency -- -- (11) -- -- -- -- --
------- ---- ------ ------- ---- ------ ------- -------
Net Realized and Unrealized
Gain (Loss) on Investments
and Foreign Currency 9,849 -- 1,478 3,732 -- (845) (5,747) (1,531)
------- ---- ------ -------- ---- ------ ------- -------
Increase (Decrease) in Net Assets
from Operations $10,094 $ -- $1,557) $3,675 $ -- $ (702) $(3,665) $ (333)
======= ==== ====== ======== ==== ====== ======= =======
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on December 30, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
23
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
<TABLE>
<CAPTION>
CAPITAL APPRECIATION GROWTH AND INTERNATIONAL
FUND INCOME FUND EQUITY FUND
-------------------- ----------- ---------------------
01/01/99- 01/01/98- 12/30/99 (1)- 01/01/99- 01/01/98-
12/31/99 12/31/98 12/31/99 12/31/99 12/31/98
-------- -------- ------------ -------- ----------
Investment Activities:
<S> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ 245 $ 356 $ -- $ 79 $ 108
Net Realized Gain (Loss) on Investments and
Foreign Currency Transactions 4,287 7,815 -- 2,770 255
Net Change in Unrealized Appreciation (Depreciation)
on Investments 5,562 12,917 -- (1,281) 1,029
Net Change in Unrealized Appreciation (Depreciation)
on Forward Foreign Currency Contracts, Foreign
Currency, and Translation of Other Assets and
Liabilities in Foreign Currency -- -- -- (11) 2
-------- -------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting from
Operations 10,094 21,088 -- 1,557 1,394
-------- -------- -------- -------- --------
Distributions to Shareholders:
Net Investment Income (275) (356) -- (93) (21)
Capital Gains (8,721) (8,084) -- (271) (113)
-------- -------- -------- -------- --------
Total Distributions (8,996) (8,440) -- (364) (134)
-------- -------- -------- -------- --------
Capital Transactions:
Proceeds from Shares Issued 24,657 26,149 10 2,079 5,290
Reinvestment of Cash Distributions 8,996 8,440 -- 364 134
Cost of Shares Repurchased (6,239) (3,554) -- (4,294) (1,605)
-------- -------- -------- -------- --------
Increase (Decrease) in Net Assets from
Capital Transactions 27,414 31,035 10 (1,851) 3,819
-------- -------- -------- -------- --------
Total Increase (Decrease) in Net Assets 28,512 43,683 10 (658) 5,079
-------- -------- -------- -------- --------
Net Assets:
Beginning of Period 105,560 61,877 -- 18,926 13,847
-------- -------- -------- -------- --------
End of Period $134,072 $105,560 $ 10 $18,268 $18,926
======== ======== ======== ======== ========
Shares Issued and Redeemed:
Shares Issued 1,202 1,374 1 156 406
Shares Issued in Lieu of Cash Distributions 460 510 -- 27 11
Shares Redeemed (314) (200) -- (322) (134)
-------- -------- -------- -------- --------
Net Share Transactions 1,348 1,684 1 (139) 283
======== ======== ======== ======== ========
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on December 30, 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24
<PAGE>
<TABLE>
<CAPTION>
MID-CAP QUALITY GROWTH SMALL CAP VALUE INCOME INVESTMENT GRADE
EQUITY FUND STOCK FUND EQUITY FUND STOCK FUND BOND FUND
-------------------- ---------------- -------------------- -------------------- -------------------------
01/01/99- 01/01/98- 12/30/99 (1)- 01/01/99- 01/01/98- 01/01/99- 01/01/98- 01/01/99- 01/01/98-
12/31/99 12/31/98 12/31/99 12/31/99 12/31/98 12/31/99 12/31/98 12/31/99 12/31/98
-------- --------- ------------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ (57) $ (80) $ -- $ 143 $ 143 $ 2,082 $ 1,696 $ 1,198 $ 752
2,943 485 -- (1,194) (532) 4,217 8,551 (403) 268
789 1,389 -- 349 (1,561) (9,964) (2,853) (1,128) 251
-- -- -- -- -- -- -- -- --
------- ------- ------ ------- ------- -------- ------- ------- -------
3,675 1,794 -- (702) (1,950) (3,665) 7,394 (333) 1,271
------- ------- ------ ------- ------- -------- ------- ------- -------
-- -- -- (146) (143) (2,105) (1,696) (1,196) (754)
(475) (2,305) -- -- -- (8,555) (6,777) (262) --
------- ------- ------ ------- ------- -------- ------- ------- -------
(475) (2,305) -- (146) (143) (10,660) (8,473) (1,458) (754)
------- ------- ------ ------- ------- -------- ------- ------- -------
1,583 7,168 10 1,442 8,463 12,332 23,136 7,882 9,749
475 2,305 -- 146 143 10,660 8,473 1,458 755
(5,589) (1,800) -- (2,838) (931) (5,685) (4,518) (5,052) (1,687)
------- ------- ------ ------- ------- -------- ------- ------- -------
(3,531) 7,673 10 (1,250) 7,675 17,307 27,091 4,288 8,817
------- ------- ------ ------- ------- -------- ------- ------- -------
(331) 7,162 10 (2,098) 5,582 2,982 26,012 2,497 9,334
------- ------- ------ ------- ------- -------- ------- ------- -------
31,075 23,913 -- 13,145 7,563 98,759 72,747 19,236 9,902
------- ------- ------ ------- ------- -------- ------- ------- -------
$30,744 $31,075 $ 10 $11,047 $13,145 $101,741 $98,759 $21,733 $19,236
======= ======= ====== ======= ======= ======== ======= ======= =======
117 509 1 180 868 800 1,451 772 936
35 216 -- 19 16 734 622 146 72
(420) (145) -- (363) (107) (392) (307) (504) (161)
------- ------- ------ ------- ------- -------- ------- ------- ------
(268) 580 1 (164) 777 1,142 1,766 414 847
======= ======= ====== ======= ======= ======== ======= ======= ======
</TABLE>
25
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST FOR THE PERIODS ENDED THROUGH DECEMBER 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET NET REALIZED AND DISTRIBUTIONS
NET ASSET VALUE INVESTMENT UNREALIZED GAINS (LOSSES) DISTRIBUTIONS FROM FROM REALIZED
BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME CAPITAL GAINS
------------------- ------------- ------------------------ --------------------- --------------
<S> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND (A)
1999 $20.04 $ 0.04 $ 1.65 $(0.04) $(1.42)
1998 17.27 0.07 4.54 (0.08) (1.76)
1997 13.06 0.10 4.63 (0.10) (0.42)
1996 10.66 0.12 2.40 (0.12) --
1995 (1) 10.00 0.04 0.66 (0.04) --
GROWTH AND INCOME FUND
1999 (2) $10.00 $ -- $ -- $ -- $ --
INTERNATIONAL EQUITY FUND
1999 $13.05 $ 0.03 $ 1.11 $(0.07) $(0.19)
1998 11.87 0.10 1.17 (0.01) (0.08)
1997 10.16 0.03 1.68 -- --
1996 (3) 10.00 0.01 0.16 (0.01) --
MID-CAP EQUITY FUND (B)
1999 $13.56 $(0.03) $ 1.90 $ -- $(0.23)
1998 13.97 -- 0.70 -- (1.11)
1997 11.86 (0.01) 2.64 (0.01) (0.51)
1996 10.27 0.06 1.59 (0.06) --
1995 (1) 10.00 0.05 0.27 (0.05) --
QUALITY GROWTH STOCK FUND
1999 (2) $10.00 $ -- $ -- $ -- $ --
SMALL CAP EQUITY FUND
1999 $ 8.48 $ 0.10 $(0.51) $(0.10) $ --
1998 9.77 0.12 (1.30) (0.11) --
1997 (4) 10.00 0.03 (0.23) (0.03) --
VALUE INCOME STOCK FUND
1999 $15.08 $ 0.29 $(0.63) $(0.29) $(1.22)
1998 15.21 0.27 1.02 (0.28) (1.14)
1997 12.41 0.28 3.02 (0.28) (0.22)
1996 10.67 0.23 1.74 (0.23) --
1995 (1) 10.00 0.06 0.67 (0.06) --
INVESTMENT GRADE BOND FUND
1999 $10.58 $ 0.56 $(0.73) $(0.56) $(0.12)
1998 10.19 0.54 0.39 (0.54) --
1997 9.92 0.58 0.27 (0.58) --
1996 10.25 0.54 (0.33) (0.54) --
1995 (1) 10.00 0.13 0.25 (0.13) --
<FN>
(A) During the fiscal year ended December 31, 1999, the Capital Growth Fund
changed its name to the Capital Appreciation Fund.
(B) During the fiscal year ended December 31, 1996, the Aggressive Growth Fund
changed its name to the Mid-Cap Equity Fund.
(1) Commenced operations on October 2, 1995. All ratios for the period have
been annualized.
(2) Commenced operations on December 30, 1999. All ratios for the period have
been annualized.
(3) Commenced operations on November 7, 1996. All ratios for the period have
been annualized.
(4) Commenced operations on October 22, 1997. All ratios for the period have
been annualized.
+ Returns are for the period indicated and have not been annualized.
</FN>
26
THE ACCOMPANYING NOTES ARE NOT AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<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 (LOSS) TO (EXCLUDING WAIVERS
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS)
---------- -------- ----------- ------------------ ------------------ ------------------
<C> <C> <C> <C> <C> <C>
$20.27 8.73% $134,072 1.15% 0.20% 1.36%
20.04 28.97 105,560 1.15 0.43 1.41
17.27 36.54 61,877 1.15 0.70 1.60
13.06 23.75 25,189 1.15 1.15 2.43
10.66 6.96 3,778 1.15 1.69 6.18
$10.00 -- $ 10 1.20% -- 1.20%
$13.93 8.81% $ 18,268 1.60% 0.42% 1.99%
13.05 10.80 18,926 1.60 0.63 2.07
11.87 16.84 13,847 1.60 0.41 2.93
10.16 1.70 995 1.60 1.83 31.39
$15.20 14.00% $ 30,744 1.15% (0.20)% 1.50%
13.56 7.16 31,075 1.15 (0.29) 1.53
13.97 22.23 23,913 1.15 (0.07) 1.77
11.86 16.05 14,294 1.15 0.58 2.79
10.27 3.19 3,409 1.15 2.22 6.34
$10.00 -- $ 10 1.30% -- 1.30%
$ 7.97 (4.78)% $ 11,047 1.20% 1.23% 1.83%
8.48 (12.18) 13,145 1.20 1.23 1.89
9.77 (2.05) 7,563 1.20 1.62 2.66
$13.23 (3.00)% $101,741 0.95% 1.95% 0.96%
15.08 9.69 98,759 0.95 1.90 1.11
15.21 26.82 72,747 0.95 2.09 1.23
12.41 18.64 31,216 0.95 2.45 1.95
10.67 7.31 4,015 0.95 2.98 5.72
$ 9.73 (1.67)% $ 21,733 0.75% 5.56% 1.19%
10.58 9.38 19,236 0.75 5.19 1.34
10.19 8.84 9,902 0.75 5.81 1.58
9.92 2.29 8,039 0.75 5.54 2.78
10.25 3.68 3,115 0.75 5.04 6.05
RATIO OF
NET INVESTMENT
INCOME (LOSS) TO
AVERAGE NET ASSETS PORTFOLIO
EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) RATE
------------------ ----------
<C> <C>
(0.01)% 168.04%
0.17 219.17
0.25 195.86
(0.13) 148.48
(3.34) 8.05
-- --
0.03% 207.32%
0.16 128.93
(0.92) 99.14
(27.96) --
(0.55)% 122.22%
(0.67) 92.27
(0.69) 138.98
(1.06) 139.60
(2.97) 13.29
-- --
0.60% 63.13%
0.54 49.10
0.16 4.11
1.94% 80.30%
1.74 76.36
1.81 104.84
1.45 79.80
(1.79) 7.17
5.12% 243.18%
4.60 183.13
4.98 219.22
3.51 303.30
(0.26) 108.55
</TABLE>
27
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
1. Organization
The STI Classic Variable Trust (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated April 18, 1995. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with eight funds: the Capital Appreciation Fund,
(formerly Capital Growth Fund), the Growth and Income Fund, the International
Equity Fund, the Mid-Cap Equity Fund, the Quality Growth Stock Fund, the Small
Cap Equity Fund, the Value Income Stock Fund (collectively "the Equity Funds")
and the Investment Grade Bond Fund. The Growth and Income Fund and Quality
Growth Stock Fund commenced operations on December 30, 1999. The assets of each
Fund are segregated, and a shareholder's interest is limited to the Fund in
which shares are held. The Fund's prospectus provides a description of each
Fund's investment objective, policies and strategies.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust. These policies are in conformity with generally accepted accounting
principles.
SECURITY VALUATION -- Investments in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market
system) are valued at the last quoted sales price, if readily available for
such equity securities, on each business day. If there is no such reported
sale, these securities, and unlisted securities for which market quotations
are readily available, are valued at the most recently quoted bid price.
Foreign securities in the International Equity Fund are valued based upon
quotations from the primary market in which they are traded.
Debt obligations exceeding sixty days to maturity for which market
quotations are readily available are valued at the most recently quoted bid
price. Debt obligations with sixty days or less until maturity may be
valued either at the most recently quoted bid price or at their amortized
cost.
Securities for which market quotations are not readily available are valued
at fair value as determined in good faith by, or in accordance with
procedures approved by, the Board of Trustees.
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 trade date of the security purchase or sale. Dividend
income is recognized on ex-dividend date, and interest income is recognized
on an accrual basis and includes, where applicable, the pro rata
amortization of premium or accretion of discount. The cost used in
determining net realized capital gains and losses on the sale of securities
are those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts and premiums during the applicable
holding period. Purchase discounts and premiums on securities are accreted
and amortized to maturity using the scientific interest method, which
approximates the effective interest method.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the repurchase 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 an
insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
28
<PAGE>
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated on each business day. It is computed by dividing the assets of
each Fund, less its liabilities, by the number of outstanding shares. The
offering price per share for the shares of the Investment Grade Bond and
Equity Funds is the net asset value per share.
FOREIGN CURRENCY TRANSACTIONS -- With respect to the International
Equity Fund, the books and records are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis:
[Bullet] market value of investment securities, assets and liabilities at
the current rate of exchange; and
[Bullet] purchases and sales of investment securities, income, and expenses
at the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Equity Fund does not isolate the portion of gains and
losses on investments in equity securities that is due to changes in the
foreign exchange rates from that which is due to change in market prices of
equity securities.
The International Equity Fund reports certain foreign currency-related
transactions as components of realized gains for financial reporting
purposes, whereas such components are treated as ordinary income for
Federal income tax purposes.
OTHER -- Distributions from net investment income for the Investment Grade
Bond Fund are declared daily and paid monthly to shareholders.
Distributions from net investment income for the Capital Appreciation Fund,
the Growth and Income Fund, the Mid-Cap Equity Fund, the Quality Growth
Stock Fund, the Small Cap Equity Fund and the Value Income Stock Fund are
declared and paid quarterly to shareholders. Distributions from net
investment income for the International Equity Fund are declared and paid
annually to shareholders. Any net realized capital gains are distributed to
shareholders at least annually.
In accordance with the Statement of Position 93-2, the International Equity
Fund and Mid-Cap Equity Fund reclassed $44,686 and $56,636, respectively,
from Accumulated Net Realized Gain on Investments to Undistributed Net
Investment Income in the Statement of Assets and Liabilities and the
Statement of Net Assets, respectively. This reclassification, which has no
impact on the net asset value of the Funds, is primarily attributable to
net operating losses and differences in the computation of distributable
income under Federal income tax rules versus generally accepted accounting
principles.
Expenses related to a specific Fund are charged to that Fund. Other
operating expenses of the Trust are pro-rated to the Funds on the basis of
relative net assets.
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. Administration and Distribution Agreements
The Trust and SEI Investments Mutual Funds Services (the "Administrator") are
parties to an administration agreement (the "Administration Agreement") dated
August 18, 1995 as amended November 19, 1997 and March 1, 1999. Under the terms
of the Administration Agreement the Administrator is entitled to a fee, subject
to a minimum, (expressed as a percentage of the combined average daily net
assets of the Trust and the STI
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Concluded)
- --------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST DECEMBER 31, 1999
Classic Funds) 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.
The Trust and Federated Services Company are parties to a Transfer Agency
servicing agreement dated August 2, 1995 under which Federated Services Company
provides transfer agency services to the Trust.
The Trust and SEI Investments Distribution Co. ("the Distributor") are parties
to a Distribution Agreement dated August 18, 1995. The Distributor receives
no fees for its services under this agreement.
4. Investment Advisory Agreement
Investment advisory services are provided to the Trust by STI Capital
Management, N.A. ("STI Capital"), and Trusco Capital Management, Inc.
("Trusco"). Under the terms of the investment advisory agreements, STI Capital
is entitled to receive a fee from the Fund, computed daily and paid monthly, at
an annual rate of .74%, 1.15%, .80%, 1.15%, 1.15% and 1.25% of the average
daily net assets of the Investment Grade Bond Fund, Capital Appreciation Fund,
Value Income Stock Fund, Mid-Cap Equity Fund, Small Cap Equity Fund and
International Equity Fund, respectively. Trusco is entitled to receive a fee
from the Fund, computed daily and paid monthly, at an annual rate of .90% and
1.00% of the average daily net assets of the Growth and Income Fund and Quality
Growth Stock Fund, respectively. STI Capital and Trusco have voluntarily agreed
to waive all or a portion of their fees (and to reimburse Funds' expenses) in
order to limit operating expenses. Fee waivers and expense reimbursements are
voluntary and may be terminated at any time.
SunTrust Bank, Atlanta acts as Custodian for all the Funds except the
International Equity Fund which has a custodian agreement with the Bank of New
York. Fees of the Custodian are paid on the basis of net assets. 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.
5. Organizational 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 costs will continue to be
amortized over a period of sixty months. Any future start-up organization costs
will be expensed as incurred. The Trust incurred organizational costs of
approximately $55,566 which include legal fees of approximately $44,153 for
organization work performed by a law firm of which two officers of the Trust are
partners. In the event any of the initial shares of the Trust are redeemed by
any holder thereof during the period that the Trust is amortizing its
organizational costs, the redemption proceeds payable to the holder thereof by
the Trust will be reduced by the unamortized organizational cost in the same
ratio as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption.
Certain officers of the Trust are also officers of the Administrator and/or the
Distributor. Such officers are paid no fees by the Trust for serving as officers
of the Trust.
The Fund has entered into an agreement with SEI Investments to manage the
investments of repurchase agreements for the Funds. For its services the
Liquidity Desk received $11,769.62 for the year ended December 31, 1999.
6. Investment Transactions
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the year ended December 31, 1999 were as follows:
30
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVT. U.S. GOVT.
PURCHASES SALES PURCHASES SALES
(000) (000) (000) (000)
-------- ------- ---------- ---------
Capital Appreciation Fund $208,117 $189,716 $ -- $ --
Growth and Income Fund .. -- -- -- --
International Equity Fund 35,196 40,328 -- --
Mid-Cap Equity Fund ..... 33,545 36,588 -- --
Quality Growth Stock Fund -- -- -- --
Small Cap Equity Fund ... 7,209 8,537 -- --
Value Income Stock Fund . 87,033 76,282 -- --
Investment Grade
Bond Fund ............ 19,581 12,033 34,560 36,506
At December 31, 1999, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the
Investment Grade Bond and Equity Funds at December 31, 1999 was as follows:
NET UNREALIZED
APPRECIATED DEPRECIATED APPRECIATION/
SECURITIES SECURITIES (DEPRECIATION)
(000) (000) (000)
-------- ---------- ----------
Capital Appreciation Fund $31,474 $ (6,689) $24,785
Growth and Income Fund .. -- -- --
International Equity Fund 893 (647) 246
Mid-Cap Equity Fund ..... 5,949 (1,554) 4,395
Quality Growth Stock Fund -- -- --
Small Cap Equity Fund ... 616 (1,932) (1,316)
Value Income Stock Fund . 5,874 (13,184) (7,310)
Investment Grade Bond Fund 9 (630) (621)
The Funds had capital loss carryforwards at December 31, 1999 as follows:
CAPITAL
CARRYOVER EXPIRES EXPIRES
12/31/99 2006 2007
(000) (000) (000)
-------- ---------- ----------
Small Cap Equity Fund ... 1,721 517 1,204
Investment Grade Bond Fund 383 -- 383
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.
The Capital Appreciation Fund and the Value Income Fund had cumulative wash
sales at December 31, 1999 amounting to $1,333,000 and $371,000, respectively.
These wash sale losses cannot be used for Federal income tax purposes in the
current year and have been deferred for use in future years.
7. Concentration of Credit Risk
The Investment Grade Bond Fund invests primarily in investment grade obligations
rated at least BBB or better by S & P or Baa or better by Moody's. Changes by
recognized rating agencies in the ratings of any fixed income security or in the
ability of an issuer to make payments of interest and principal may affect the
value of these investments.
8. Consents of Sole Shareholder
On December 29, 1999, the sole shareholder of the Growth and Income Fund (the
"Fund") approved the following appointments: SEI Investments Mutual Funds
Services to serve as administrator of the Fund, Trusco Capital Management, Inc.
to serve as investment advisor to the assets of the Fund and SEI Investments
Distribution Co. to serve as distributor of the shares of the Fund.
On December 29, 1999, the sole shareholder of the Quality Growth Stock Fund (the
"Fund") approved the following appointments: SEI Investments Mutual Funds
Services to serve as administrator of the Fund, Trusco Capital Management, Inc.
to serve as investment advisor to the assets of the Fund and SEI Investments
Distribution Co. to serve as distributor of the shares of the Fund.
31
<PAGE>
NOTICE TO SHAREHOLDERS Unaudited
OF
STI CLASSIC VARIABLE TRUST
For shareholders that do not have a December 31, 1999 tax year end, this notice
is for informational purposes only. For shareholders with a December 31, 1999
tax year end, please consult your tax advisor as to the pertinence of this
notice. For the fiscal year ended December 31, 1999, each portfolio is
designating the following items with regard to distributions paid during the
year:
<TABLE>
<CAPTION>
LONG TERM
(20% RATE) ORDINARY
CAPITAL GAIN INCOME TAX-EXEMPT TOTAL QUALIFYING
FUND DISTRIBUTION DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1)
- -------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund 21.82% 78.18% 0.00% 100.00% 0.78%
Growth and Income Fund 0.00% 0.00% 0.00% 0.00% 0.00%
International Equity Fund 74.34% 25.66% 0.00% 100.00% 0.00%
Mid-Cap Equity Fund 100.00% 0.00% 0.00% 100.00% 0.00%
Quality Growth Stock Fund 0.00% 0.00% 0.00% 0.00% 0.00%
Small Cap Equity Fund 0.00% 100.00% 0.00% 100.00% 92.91%
Value Income Stock Fund 28.54% 71.46% 0.00% 100.00% 53.80%
Investment Grade Bond Fund 2.01% 97.99% 0.00% 100.00% 0.00%
</TABLE>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends deduction.
32
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
STI Classic Variable Trust:
We have audited the accompanying statements of net assets of the Capital
Appreciation, Mid-Cap Equity, Small Cap Equity, Value Income, and Investment
Grade Bond Funds, and the statement of assets and liabilities of the Growth and
Income, International Equity, and Quality Growth Stock Funds, including the
schedule of investments of the International Equity Fund, of STI Classic
Variable Trust (the "Trust") as of December 31, 1999, and the related statements
of operations, the statements of changes in net assets, and the 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 and financial highlights. Our procedures included confirmation of
securities owned as of December 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
Capital Appreciation, Growth and Income, International Equity, Mid-Cap Equity,
Quality Growth Stock, Small Cap Equity, Value Income Stock, and Investment Grade
Bond Funds of STI Classic Variable Trust as of December 31, 1999, the results of
their operations for the periods presented, the changes in their net assets, and
the financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
February 11, 2000
33
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
Investment Advisors:
STI Capital Management, N.A.
Trusco Capital Management, Inc.
STI Classic Variable Trust 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 Variable Trust fund
will achieve its investment objective. The STI Classic Variable Trust 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.
