UNH 11-K 6.18.2013


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________ 
Form 11-K
__________________________________________________________ 
x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012
or
o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission file number: 1-10864

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

UnitedHealth Group 401(k) Savings Plan

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
__________________________________________________________ 
UnitedHealth Group Incorporated


UnitedHealth Group Center
9900 Bren Road East
Minnetonka, Minnesota
 

 __________________________________________________________ 







 
 
 
 
 
























 
UnitedHealth Group 401(k) Savings Plan
Employer ID No: 41-1321939
Plan Number: 001
Financial Statements as of and for the Years Ended December 31, 2012 and 2011, Supplemental Schedule as of December 31, 2012, and Report of Independent Registered Public Accounting Firm






 
UNITEDHEALTH GROUP 401(k) SAVINGS PLAN
 
 
 
TABLE OF CONTENTS
 
Page
 
 
 
 

NOTE:
All other schedules required by Section 2520.103‑10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants of
UnitedHealth Group 401(k) Savings Plan
Minneapolis, Minnesota


We have audited the accompanying statements of net assets available for benefits of UnitedHealth Group 401(k) Savings Plan (the "Plan") as of December 31, 2012 and 2011, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan's management. This schedule has been subjected to the auditing procedures applied in our audit of the basic 2012 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
June 18, 2013

1





UNITEDHEALTH GROUP 401(k) SAVINGS PLAN
 
 
 
 
 
 
 
 
 
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
 
 
 
 
AS OF DECEMBER 31, 2012 AND 2011
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
2011
ASSETS:
 
 
 
 
Investments - at fair value:
 
 
 
 
Participant - directed investments
 
$
4,797,068,721

 
$
3,816,666,674

 
 
 
 
 
Receivables - notes receivable from participants
 
155,284,353

 
130,058,521

 
 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
 
4,952,353,074

 
3,946,725,195

 
 
 
 
 
ADJUSTMENTS FROM FAIR VALUE TO CONTRACT VALUE FOR FULLY BENEFIT RESPONSIVE INVESTMENT CONTRACTS
 
(9,167,703
)
 
(10,430,086
)
 
 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS
 
$
4,943,185,371

 
$
3,936,295,109


See Notes to the Financial Statements.

2





UNITEDHEALTH GROUP 401(k) SAVINGS PLAN
 
 
 
 
 
 
 
 
 
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
 
 
 
 
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
 
 
 
 
 
 
 
2012
 
2011
ADDITIONS:
 
 
 
 
Contributions:
 
 
 
 
Employee
 
$
430,005,657

 
$
370,008,553

Employer
 
204,067,675

 
183,319,132

Rollover
 
67,836,814

 
35,803,862

 
 
 
 
 
Total contributions
 
701,910,146

 
589,131,547

 
 
 
 
 
Dividends and interest
 
31,708,691

 
33,596,553

Net appreciation/(depreciation) in fair value of investments
 
466,599,046

 
(81,456,516
)
Interest income on notes receivable from participants
 
6,091,900

 
5,370,905

 
 
 
 
 
Total additions
 
1,206,309,783

 
546,642,489

 
 
 
 
 
DEDUCTIONS:
 
 
 
 
Benefits paid to participants
 
(305,938,317
)
 
(253,454,081
)
Administrative expenses
 
(5,470,908
)
 
(5,130,638
)
 
 
 
 
 
Total deductions
 
(311,409,225
)
 
(258,584,719
)
 
 
 
 
 
INCREASE IN NET ASSETS BEFORE PLAN TRANSFERS
 
894,900,558

 
288,057,770

 
 
 
 
 
NET TRANSFERS INTO THE PLAN (Note 9)
 
111,989,704

 
49,250,286

 
 
 
 
 
INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
 
1,006,890,262

 
337,308,056

 
 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS:
 
 
 
 
  Beginning of year
 
3,936,295,109

 
3,598,987,053

 
 
 
 
 
  End of year
 
$
4,943,185,371

 
$
3,936,295,109


See Notes to the Financial Statements.

3





UNITEDHEALTH GROUP 401(k) SAVINGS PLAN
 
 
 
NOTES TO FINANCIAL STATEMENTS
 
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


1.
DESCRIPTION OF THE PLAN

The following description of the UnitedHealth Group 401(k) Savings Plan (the “Plan”) is provided for informational purposes only. Participants should refer to the Plan document for more complete information. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
General - The Plan was first established on July 1, 1985, as a defined contribution (profit sharing) plan under Section 401(a) of the Internal Revenue Code (the “Code”). The Plan also contains a cash or deferred arrangement as described in Section 401(k) of the Code. UnitedHealth Group Incorporated (the “Company”) is the Plan's sponsor and administrator. Fidelity Management Trust Company (“Fidelity”) performs recordkeeping and trustee functions relating to the Plan.
Eligibility and Vesting - In general, eligible employees may make pretax and/or Roth elective deferral contributions to the Plan upon employment with a participating employer and are automatically enrolled in the Plan as soon as administratively feasible after their hire date, unless they decline to participate within a prescribed time limit. Participants become eligible for employer safe harbor matching contributions once they are credited with one year of service. Employees whose employment is governed by the terms of a collective bargaining agreement, employees of United Healthcare Plans of Puerto Rico, Inc., persons who the Company classified as leased employees, and certain other classifications of employees are not eligible to participate in the Plan, with the exception of Local 1199C that collectively bargained to be eligible for the Plan in 2006.
Participant contributions and earnings thereon are 100% vested at all times. Participants become 100% vested in employer safe harbor matching contributions, employer matching contributions, and the earnings thereon upon being credited with two years of service. Employer safe harbor matching contributions, employer matching contributions, and the earnings thereon also become fully vested upon the earliest occurrence of any of the following events, while a participant is employed by the Company or certain of its affiliates: (a) death, (b) attainment of age 65, (c) disability (as defined by the Plan), (d) partial or complete termination of or complete discontinuance of contributions to the Plan, or (e) an acceleration date (as defined by the Plan).
Contributions - Eligible employees direct the Company to make pre-tax and/or Roth contributions to the Plan on their behalf through payroll deductions. Eligible employees are automatically enrolled in the Plan as soon as administratively feasible after their hire date at an employee pre-tax contribution rate of 3% of their eligible pay, unless they decline to participate within a prescribed time limit or they elect a different pre-tax contribution rate. Participants who miss the deadline to decline participation will have 90 days from the first biweekly pay date in which employee pre-tax contributions are deducted from their eligible pay to cancel their future contributions and request a withdrawal of any employee pre-tax contributions, including any associated earnings and losses, made to their account since that first biweekly pay date. Different enrollment rules apply to eligible employees who are acquired employees.
In general, the Plan provides for automatic employee pre-tax contribution rate increases until the participant's pre-tax contribution rate reaches 6%. Participants are notified of the automatic rate increases in advance and have the opportunity to decline the automatic increase.

4




The Plan allows participants to contribute up to 50% of their eligible pay, subject, however, to the Code Section 402(g) limit on participant contributions (which is $17,000 for 2012). Within certain limitations, the Company will make a safe harbor matching contribution to the Plan on a participant's behalf on a dollar-for-dollar basis up to the first 3% of the participant's eligible pay, and an additional 50 cents for each dollar the participant contributes to the Plan up to the next 3% of the participant's eligible pay each pay period. The maximum matching contribution a participant may receive under this formula is 4.5% of the participant's eligible pay each pay period. Participants must make pre-tax contributions and/or Roth contributions to receive the employer safe harbor matching contribution. Participants become eligible for safe harbor matching contributions once they are credited with one year of service. Additional discretionary contributions may also be made by the Company; however, no discretionary contributions were made in 2012 and 2011.
Participants who reach age 50 during a calendar year or who are over age 50 are allowed to make “catch‑up contributions” to the Plan as permitted under Code Section 414(v). The Code limited participant catch-up contributions to $5,500 in 2012. A participant's combined employee pre-tax/Roth contributions and catch-up contributions cannot exceed 80% of the participant's eligible pay.
The Plan accepts rollover contributions of certain distributions from certain qualified plans. Rollover contributions are assets formerly held in an employee benefit plan of a prior employer, qualified under Section 401(a) of the Code, which a participant elects to be transferred into the Plan and were transferred into the Plan during the current year.
Participant Accounts - Individual accounts are maintained for each Plan participant. Each participant's account is credited with the participant's contributions and an allocation of (a) the Company's contributions and (b) plan earnings (losses). Allocations are based on participant contributions, earnings (losses) on the participant's account, or the participant's account balance, as described in the Plan. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.
Investment Options - Subject to the investment rules or limitations applicable to the Plan, eligible participants may direct the trustee to invest their contributions and the Company's contributions in any one or a combination of several funds.
The Plan has various investment options to which participants can elect to allocate their contributions, including a self‑managed brokerage account option.
Dividend Payout - Effective March 1, 2012, the Plan was amended to include the UnitedHealth Group Stock Fund (the “Stock Fund”) Dividend Payout Feature. This feature allows participants invested in the Stock Fund to elect whether dividends payable on Company stock held in the Stock Fund are distributed to participants in cash or reinvested in Company stock within the Stock Fund. The total dividends on the Company stock in the Stock Fund were $1,911,055 for the year ended December 31, 2012. The amount participants elected to be distributed in cash was insignificant.
Distributions - A participant's vested account generally becomes distributable upon the earliest occurrence of any of the following events (an “Event of Maturity”): (a) death, (b) voluntary or involuntary separation from service, or (c) disability (as defined by the Plan).
Distributions occur on a daily basis upon the submission of an application for distribution from the participant. If no such application is submitted, distribution is made in a cash lump‑sum payment no later than the following dates: (a) April 1 following the first calendar year in which the participant has both attained age 70‑1/2 and terminated employment (for distribution to a participant), and

5




(b) December 31 of the calendar year in which the first anniversary of the participant's death occurs (for distribution to a beneficiary). However, following an Event of Maturity, a participant's account, if valued at less than $1,000, is distributed under the involuntary cash-out rules in cash as a direct distribution to the participant or as a rollover into an Individual Retirement Account or another employer‑sponsored plan (whichever the participant elects).
Notes Receivable from Participants - While employed with the Company, a participant may obtain a loan in an amount that does not exceed (when added to the outstanding balance of any other loan from the Plan) the lesser of one‑half of the participant's vested account balance, as defined, or $50,000 less their highest outstanding loan balance during the 12-month period that ends on the day before the new loan is issued. Other limitations may apply if the participant has a loan from a plan of an acquired company. The minimum loan amount that a participant can borrow is $1,000. The loan bears interest at the prime rate of interest, plus 1% (at the time the participant takes the loan and will remain in effect for the duration of the loan) and is payable over a period not to exceed five years; except that a loan that is used by the participant to acquire a principal residence may, if the loan originated prior to April 1, 2001, be repaid over a period not to exceed 30 years, and if the loan originated on or after April 1, 2001, it may be repaid over a period not to exceed 10 years. As of December 31, 2012 and 2011, the interest rate on loans outstanding varied from 3.25% to 10.50%.
Unallocated Accounts - The Plan has certain unallocated amounts that relate to items such as settlements, lost distributees, lost participants, uncashed checks, and participant forfeitures. The nonvested portion of a participant's account is forfeited as of the earlier of the distribution of the participant's vested account or the occurrence of a five‑year period of break in service. Forfeitures may be used to make restorations for rehired participants (if rehired by the Company or certain of its affiliates within five years of an initial Event of Maturity), to restore forfeited account balances, to reduce Company contributions, to pay Plan expenses, or to correct errors, omissions, and exclusions. Total unallocated amounts used to reduce Company contributions for the years ended December 31, 2012 and 2011 were approximately $5,100,000 and $450,000, respectively. As of December 31, 2012 and 2011, the unallocated accounts ending balances were $1,899,357 and $6,268,671, respectively.
Plan Amendment or Termination - Although it has not expressed any intention to do so, the Company has the right to discontinue contributions or to amend or terminate the Plan at any time. In the event of the Plan's termination, participants' accounts would become 100% vested and the Company could direct either the current distribution of the assets or the continuation of the trust, in which case distribution of the benefits would occur in accordance with the terms of the Plan.

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting - The Plan's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Use of Estimates - The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties - The Plan provides for investment in a variety of investment funds. Investments, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investments, it is reasonably possible that changes in the values of the investments will occur in the near term and that such changes could





6




materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits.
Investments - During the years ended December 31, 2012 and 2011, the Plan's investments (including investments bought, sold, and held during the year) appreciated/(depreciated) in value by $466,599,046 and $(81,456,516), respectively, as follows:
 
 
2012
 
2011
 
 
 
 
 
Common collective trust
 
$
236,230,152

 
$
(48,310,910
)
Synthetic guaranteed investment contract
 
9,715,592

 
9,075,599

 
 
 
 
 
 
 
 
 
 
Net appreciation/(depreciation) in fair value of investments at estimated fair value
 
245,945,744

 
(39,235,311
)
 
 
 
 
 
Common stock
 
33,725,812

 
26,323,580

Mutual funds
 
164,391,358

 
(68,997,277
)
Fixed-income securities
 
22,536,132

 
452,492

 
 
 
 
 
Net appreciation/(depreciation) in fair value of investments as determined by
quoted market prices
 
220,653,302

 
(42,221,205
)
 
 
 
 
 
Net appreciation/(depreciation)
 
$
466,599,046

 
$
(81,456,516
)

The fair market values of individual investments that represent 5% or more of the Plan's net assets as of December 31, 2012 and 2011, were as follows:
 
 
2012
 
2011
 
 
 
 
 
Vanguard Institutional Index Fund
 
$
487,726,786

 
$
390,968,520

American Europacific Growth Fund
 
351,944,827

 
291,554,263

Wellington Mid-Cap Opportunities Fund
 
313,088,740

 
263,045,918

Wells Fargo DJ Target 2030 N
 
278,194,288

 
202,695,379

Wells Fargo DJ Target 2035 N
 
276,095,951

 
196,951,638

Wells Fargo DJ Target 2025 N
 
262,185,385

 
                *
 
 
 
 
 
* Investment represents less than 5% of the Plan's net assets in the year indicated.

Investment Valuation and Income Recognition - The Plan's investments are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Shares of mutual funds are valued at quoted market prices, which represent the net asset value ("NAV") of shares held by the Plan at year-end. Common stock is valued at quoted market prices. Cash and cash equivalents are highly liquid investments that have an original maturity of three months or less. The fair value of cash and cash equivalents approximates their carrying value because of the short maturity of the instruments. The estimated fair values of debt securities are based on quoted market prices and/or other market data for the same or comparable instruments and transactions in establishing the prices. The units of the common/collective investment trust funds and pooled separate account are stated at fair value as determined by issuer of the common/collective investment trust funds based on the fair market value of the underlying investments.

7




The fair value of the Synthetic Guaranteed Investment Contracts (“Synthetic GIC”) is determined based on the components of the Synthetic GIC. The Synthetic GIC is comprised of two main components; underlying investments in fixed income securities and wrapper contracts issued by banks and insurance companies in which the issuer guarantees a specified interest rate. The fair value of the wrapper contracts is calculated by discounting the related cash flows based on current yields of similar instruments with comparable durations. The underlying investments are valued at fair market value using quoted market prices or other market data.

The Company is responsible for the determination of fair value. Accordingly, it performs periodic analysis on the prices received from the pricing services used to determine whether the prices are reasonable estimates of fair value. As a result of these reviews, the Company has not historically adjusted the prices obtained from the pricing services. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 962, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (FSP), the statements of net assets available for benefits present an investment contract at fair value, as well as an additional line item showing an adjustment of the fully benefit-responsive contract from fair value to contract value. The statements of changes in net assets available for benefits are presented on a contract-value basis and are not affected by the FSP.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Unrealized gains and losses are recorded in the period in which they occur. The trustee holds all assets.

Administrative Expenses - Administrative expenses of the Plan are paid by both the Plan and the Company. Recordkeeping fees are paid by the participants quarterly based on the number of participants. The Company pays fees related to trust and investment services, conversion planning and merger fees, Form 5500 preparation, discrimination testing, qualified domestic relations order services, employee education, statement mailings, postage, enrollment kits, annual financial statement audit, and address searches.
Payment of Benefits - Benefit payments to participants are recorded upon distribution.
New Accounting Standards
ASU No. 2010-06, Fair Value Measurements and Disclosures - In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Fair Value Measurements and Disclosures, which amends ASC 820, Fair Value Measurements and Disclosures, adding a new disclosure requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis. This requirement is effective for fiscal years beginning after December 15, 2010. The adoption in 2011 did not materially affect the Plan's financial statements.
ASU No. 2011-04 - In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, which amends ASC 820. ASU No. 2011-04 also requires the categorization by level for items that are only required to be disclosed at fair value and information about transfers between Level 1 and Level 2. In addition, the ASU provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The ASU requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The new guidance is effective for reporting periods beginning after December 15, 2011. The adoption in 2012 did not materially affect the Plan's financial statements.

8






3.
FAIR VALUE MEASUREMENTS

ASC 820 established a single authoritative definition of fair value, set a framework for measuring fair value, and required additional disclosures about fair value measurements. In accordance with ASC 820, the Plan classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

9




The following tables set forth by level within the fair value hierarchy a summary of the Plan's assets measured at fair value on a recurring basis at December 31, 2012 and 2011.
In accordance with ASC 820, the tables below include the major categorization for debt and equity securities as of December 31, 2012 and 2011, on the basis of the nature and risk of the investments.
 
 
Fair Value Measurements at December 31, 2012
 
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
23,475,179

 
$

 
$

 
$
23,475,179

 
 
 
 
 
 
 
 
 
Fixed-income securities:
 
 
 
 
 
 
 
 
  U.S. government and agencies
 
57,836,790

 
94,205,377

 

 
152,042,167

  Corporate
 

 
143,991,389

 

 
143,991,389

  Other
 

 
19,965,305

 

 
19,965,305

 
 
 
 
 
 
 
 
 
           Total fixed-income securities
 
57,836,790

 
258,162,071

 

 
315,998,861

 
 
 
 
 
 
 
 
 
Mutual funds:
 
 
 
 
 
 
 
 
  Large-cap funds
 
491,397,435

 

 

 
491,397,435

  Mid-cap funds
 
223,563,240

 

 

 
223,563,240

  Small-cap funds
 
211,970,085

 

 

 
211,970,085

  Other fixed income
 
5,600,775

 

 

 
5,600,775

  Balanced funds
 
473,686

 

 

 
473,686

  International large-cap funds
 
402,667,408

 

 

 
402,667,408

  Short-term funds
 
1,688,155

 

 

 
1,688,155

  Equity funds
 
1,572,324

 

 

 
1,572,324

 
 
 
 
 
 
 
 
 
           Total mutual funds
 
1,338,933,108

 

 

 
1,338,933,108

 
 
 
 
 
 
 
 
 
Common Stock:
 
 
 
 
 
 
 
 
  UnitedHealth Group
 
126,381,749

 

 

 
126,381,749

  Other
 
206,077,265

 

 

 
206,077,265

 
 
 
 
 
 
 
 
 
           Total common stock
 
332,459,014

 

 

 
332,459,014

 
 
 
 
 
 
 
 
 
Preferred stock
 
149,039

 

 

 
149,039

 
 
 
 
 
 
 
 
 
Common/collective trust
 

 
2,374,445,762

 

 
2,374,445,762

 
 
 
 
 
 
 
 
 
Pooled separate account
 

 
134,111,602

 

 
134,111,602

 
 
 
 
 
 
 
 
 
Synthetic GIC
 
4,050,224

 
273,445,932

 

 
277,496,156

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
1,756,903,354

 
$
3,040,165,367

 
$

 
$
4,797,068,721


10




 
 
Fair Value Measurements at December 31, 2011
 
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
24,913,797

 
$

 
$

 
$
24,913,797

 
 
 
 
 
 
 
 
 
Fixed-income securities:
 
 
 
 
 
 
 
 
  U.S. government and agencies
 
21,136,568

 
112,151,567

 

 
133,288,135

  Corporate
 

 
112,080,548

 

 
112,080,548

  Other
 

 
16,484,197

 

 
16,484,197

 
 
 
 
 
 
 
 
 
           Total fixed-income securities
 
21,136,568

 
240,716,312

 

 
261,852,880

 
 
 
 
 
 
 
 
 
Mutual funds:
 
 
 
 
 
 
 
 
  Large-cap funds
 
393,725,276

 

 

 
393,725,276

  Mid-cap funds
 
183,335,968

 

 

 
183,335,968

  Small-cap funds
 
175,099,827

 

 

 
175,099,827

  Other fixed income
 
3,405,189

 

 

 
3,405,189

  Balanced funds
 
445,708

 

 

 
445,708

  International large-cap funds
 
303,571,283

 

 

 
303,571,283

  Short-term funds
 
5,586,799

 

 

 
5,586,799

  Equity funds
 
1,270,662

 

 

 
1,270,662

 
 
 
 
 
 
 
 
 
           Total mutual funds
 
1,066,440,712

 

 

 
1,066,440,712

 
 
 
 
 
 
 
 
 
Common Stock:
 
 
 
 
 
 
 
 
  UnitedHealth Group
 
126,077,465

 

 

 
126,077,465

  Other
 
170,950,804

 

 

 
170,950,804

 
 
 
 
 
 
 
 
 
           Total common stock
 
297,028,269

 

 

 
297,028,269

 
 
 
 
 
 
 
 
 
Preferred stock
 
64,613

 

 

 
64,613

 
 
 
 
 
 
 
 
 
Common/collective trust
 

 
1,803,903,399

 

 
1,803,903,399

 
 
 
 
 
 
 
 
 
Synthetic GIC
 
(1,990,086
)
 
362,559,133

 
1,893,957

 
362,463,004

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Total
 
$
1,407,593,873

 
$
2,407,178,844

 
$
1,893,957

 
$
3,816,666,674


11




For the years ended December 31, 2012 and 2011, there were no significant transfers in or out of Levels 1, 2, or 3. Except for the common/collective trusts and Synthetic GIC (see Note 6) the Plan's investments do not have redemption or other restrictions.
A summary of changes in the fair value of the Plan's Level 3 assets for the years ended December 31, 2012 and 2011, is set forth in the following table:
 
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
 
 
Asset-backed Securities
 
Wrapper Contracts
 
Total
 
 
 
 
 
 
 
Beginning balance --- January 1, 2012
 
$

 
$
1,893,957

 
$
1,893,957

Transfers into Level 3
 

 

 

Transfers out of Level 3
 

 
(137,916
)
 
(137,916
)
 
 
 
 
 
 
 
Total losses included in changes in net assets
 

 
(1,756,041
)
 
(1,756,041
)
Purchases, issuances, sales and settlements:
 
 
 
 
 
 
Purchases
 

 

 

Issuances
 

 

 

Sales
 

 

 

Settlements
 

 

 

 
 
 
 
 
 
 
Ending balance -- December 31, 2012
 
$

 
$

 
$

 
 
 
 
 
 
 
The amount of total losses for the period included in changes in net assets attributable to the change in unrealized gains or losses related to assets still held at the reporting date
 
$

 
$
(1,756,041
)
 
$
(1,756,041
)

 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance --- January 1, 2011
 
$
183,241

 
$
1,803,068

 
$
1,986,309

Transfers into Level 3
 

 

 

Transfers out of Level 3
 

 

 

 
 
 
 
 
 
 
Total gains included in changes in net assets
 

 
90,889

 
90,889

Purchases, issuances, sales and settlements:
 
 
 
 
 
 
Purchases
 

 

 

Issuances
 

 

 

Sales
 
(183,241
)
 

 
(183,241
)
Settlements
 

 

 

 
 
 
 
 
 
 
Ending balance -- December 31, 2011
 
$

 
$
1,893,957

 
$
1,893,957

 
 
 
 
 
 
 
The amount of total gains for the period included in changes in net assets attributable to the change in unrealized gains or losses related to assets still held at the reporting date
 
$

 
$
90,889

 
$
90,889



12






4.
FEDERAL INCOME TAX STATUS

The Internal Revenue Service ("IRS") has determined and informed the Company by a letter dated October 14, 2003, that the Plan is designed in accordance with applicable Code qualification requirements. The Plan has been amended since receiving the determination letter; however, the Company believes that the Plan is currently designed and operating in compliance with the applicable qualification requirements of the Code and the Plan is tax exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements.
Additionally, the Plan was amended and restated in its entirety effective January 1, 2010, to comply with the requirements of the Economic Growth Tax Relief Reconciliation Act. The Plan was submitted to the IRS for a favorable determination letter in January 2010 via the Voluntary Correction Program under the Employee Plans Compliance Resolution System.  The Plan sponsor believes the Plan has maintained its tax-exempt status.
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2012, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2009.

5.
RECONCILIATION TO THE FORM 5500

As of December 31, 2012 and 2011, the Plan had $834,486 and $568,113, respectively, of deemed distributions of notes receivable from participants. This amount is recorded as a distribution in the Plan's Form 5500; however, in accordance with GAAP, it is not reflected in the statements of net assets available for benefits.
A reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2012 and 2011, is as follows:
 
 
2012
 
2011
 
 
 
 
 
Net assets available for benefits per the financial statements
 
$
4,943,185,371

 
$
3,936,295,109

Deemed distributions of participants' loans
 
(834,486
)
 
(568,113
)
Fair market value adjustment of investment contracts
 
9,167,703

 
10,430,086

 
 
 
 
 
Net assets available for benefits per the Form 5500
 
$
4,951,518,588

 
$
3,946,157,082



13




A reconciliation of the increase in net assets per the financial statements to the net income per the Form 5500 for the years ended December 31, 2012 and 2011, is as follows:
 
 
2012
 
2011
 
 
 
 
 
Increase in net assets per the financial statements
 
$
1,006,890,262

 
$
337,308,056

Deemed distributions activity
 
(266,373
)
 
(445,104
)
Fair market value adjustment of investment contracts
 
(1,262,383
)
 
5,346,912

 
 
 
 
 
Net income per the Form 5500
 
$
1,005,361,506

 
$
342,209,864



6.
NET ASSET VALUE PER SHARE

A summary of the Plan's investments with a reported NAV as of December 31, 2012 and 2011, is set forth as follows:
Investment
 
Fair Value (1)
 
Unfunded Commitment
 
Redemption Frequency
 
Other Redemption Restrictions (2)
 
Redemption Notice Period
 
 
 
 
 
 

 

 

December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common/collective trust (3)
 
$
2,266,765,357

 
$

 
Immediate
 
Various
 
Various
Stable value collective trust(4)
 
107,680,405

 

 
Immediate
 
Various
 
Various
 
 
 
 
 
 
 
 
 
 
 
Total common/collective trust
 
$
2,374,445,762

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment
 
Fair Value (1)
 
Unfunded Commitment
 
Redemption Frequency
 
Other Redemption Restrictions (2)
 
Redemption Notice Period
 
 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common/collective trust (3)
 
$
1,698,954,739

 
$

 
Immediate
 
Various
 
Various
Stable value collective trust(4)
 
104,948,660

 

 
Immediate
 
Various
 
Various
 
 
 
 
 
 
 
 
 
 
 
Total common/collective trust
 
$
1,803,903,399

 
$

 
 
 
 
 
 

(1)
The fair values of the investments are based on the fair values of the underlying investments in the funds.

(2)
Certain events may cause funds held in the common/collective trust and stable value collective trust to be deferred, including, but not limited to, the following:

(i)
Closing or disruption of the financial markets or exchanges in which a transaction is unable to be settled prudently.

(ii)
An emergency situation in which the disposition of assets would be seriously prejudicial to Plan participants.

14





(iii)
Breakdown in the means of communication normally employed to determine fair market value of an investment.

(iv)
Investments cannot be effected at normal rates of exchange.

None of these events occurred in 2011 or 2012.

(3)
The funds in the common/collective trusts employ a variety of investment strategies, including, but not limited to, long-term capital growth.

(4)
The stable value collective trust calculates its NAV based on the contract value of the fund and on the fair value based on the underlying assets in the fund. All transactions with the stable value are at the NAV at contract value. The NAV at contract value at December 31, 2012 and 2011 is $86.10 and $84.54, respectively, and the fair value NAV at December 31, 2012 and 2011 is $87.62 and $85.86, respectively.
Certain events may allow the issuer to terminate a fully benefit‑responsive investment contract and settle at an amount different from contract value. Such events are not expected, but may include the termination of the Plan or the trust holding the replacement of the trustee of the fund without the consent of the issuer of the wrapper agreements, a breach of the contract terms by a counterparty, or a legal or regulatory event as an adverse ruling by a regulatory agency.
Certain events may limit the ability of the fund to transact at contract value with the contract issuers for participant's benefit payments or investment transfers. Such events include, but are not limited to, plant closings, divestitures, partial Plan termination, bankruptcy, layoff, or early retirement incentive program, and disqualification of trust from being a “qualified trust.” However, the Plan sponsor does not believe that any events that may limit the ability of the Plan to transact at contract value are likely.


7.
EXEMPT PARTY-IN-INTEREST TRANSACTIONS

Plan investments managed by the trustees qualify as exempt party‑in‑interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund. The investment of the Plan in the Company's common stock is considered a party‑in‑interest transaction. At December 31, 2012, the Plan held 2,330,047 shares of common stock of the Company with a cost basis of $73,909,091. At December 31, 2011, the Plan held 2,487,920 shares of common stock of the Company with a cost basis of $78,916,822.

8.
WRAPPER CONTRACTS

The Plan provides a self-managed stable value investment option fund (the “Stable Value Fund”) to participants that includes Synthetic GICs, which simulate the performance of a GIC through an issuer's guarantee of a specific interest rate and a portfolio of financial instruments that are owned by the Plan. The Plan has entered into wrapper contracts with Bank of America, Monumental Life Insurance Company, NATIXIS, Pacific Life Insurance Company, and Metropolitan Life Insurance Company. In 2012, the Plan terminated the wrapper contracts with Rabobank, J.P. Morgan, and State Street. Contributions are maintained in a pooled account and are credited with earnings based on the contract crediting rates. The crediting interest rate is based on an agreed‑upon formula with the issuers of the contracts. It is generally reset quarterly according to each wrapper contract and is tied to the performance and duration of the wrapper contracts. Most agreements use a formula that is based on the characteristics of the underlying investments. Generally, the wrapper contracts amortize the gains and losses of the bond portfolios over the duration of the portfolios through the crediting rate of the wrapper contracts.
Plan management believes no reserves are necessary against contract value for credit risk of the contract issuer or otherwise as of December 31, 2012 and 2011. Both the average yield of the contracts and the average yield credited to the participants during 2012 and 2011 were 1.95% and 2.08%, respectively. The crediting interest rate for the contracts at December 31, 2012 and 2011 was 1.94% and 2.11%, respectively.

15




The Stable Value Fund is charged for Plan withdrawals and administrative expenses. The wrapper contracts are included in the financial statements at fair value and then adjusted to contract value. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value (which represents contributions made under the contracts, plus earnings, less withdrawals and administrative expenses) because they are fully benefit responsive.
The contract value and fair value of the contracts as of December 31, 2012, were as follows:
2012
 
Investments at Fair Value
 
Wrapper Contracts at Fair Value
 
Total Investments at Fair Value
 
Investments at Contract Value
 
 
 
 
 
 
 
 
 
Synthetic GICs:
 
 
 
 
 
 
 
 
  Bank of America
 
$
50,954,841

 
$
36,964

 
$
50,991,805

 
$
49,889,440

  NATIXIS
 
48,267,371

 
35,001

 
48,302,372

 
47,239,559

  Monumental Life Insurance Company
 
128,358,751

 
29,870

 
128,388,621

 
125,980,499

  Pacific Life Insurance Company
 
49,777,277

 
36,081

 
49,813,358

 
48,696,836

  Metropolitan Life Insurance Company
 
134,111,602

 

 
134,111,602

 
132,068,296

 
 
 
 
 
 
 
 
 
Total
 
$
411,469,842

 
$
137,916

 
$
411,607,758

 
$
403,874,630

The contract value and fair value of the contracts as of December 31, 2011, were as follows:
2011
 
Investments at Fair Value
 
Wrapper Contracts at Fair Value
 
Total Investments at Fair Value
 
Investments at Contract Value
 
 
 
 
 
 
 
 
 
Synthetic GICs:
 
 
 
 
 
 
 
 
J.P. Morgan
 
$
57,091,311

 
$
412,155

 
$
57,503,466

 
$
55,998,979

  Bank of America
 
49,777,930

 
287,346

 
50,065,276

 
48,801,789

  NATIXIS
 
47,152,533

 
271,795

 
47,424,328

 
46,160,591

  Monumental Life Insurance Company
 
64,920,990

 
374,968

 
65,295,958

 
63,683,037

  Pacific Life Insurance Company
 
48,627,564

 
168,160

 
48,795,724

 
47,599,613

Rabobank
 
45,400,297

 
104,930

 
45,505,227

 
44,552,340

State Street
 
47,598,422

 
274,603

 
47,873,025

 
46,637,411

 
 
 
 
 
 
 
 
 
Total
 
$
360,569,047

 
$
1,893,957

 
$
362,463,004

 
$
353,433,760


16





9.
PLAN TRANSFERS

During 2012 the Sierra Health Automatic Retirement Plan and the Picis, Inc. 401(k) Profit Sharing Plan & Trust merged into the Plan and their investment balances of $111,528,952 and $24,789,037, respectively, were transferred to the Plan. Also during 2012 an investment balance of $24,707,617 was transferred out of the Plan into the newly formed Optum Clinical Services, Inc. 401(k) Savings Plan.
During 2011 the Golden Rule Salary Savings Plan and the Unison Administrative Services, LLC 401(k) Plan merged into the Plan and their investment balances of $37,800,572 and $11,449,714, respectively, were transferred to the Plan.

10.
SUBSEQUENT EVENTS

For the year ended December 31, 2012, subsequent events were evaluated through June 18, 2013, the date the financial statements were available to be issued.
There are no events subsequent to December 31, 2012, that require adjustment or disclosure.
******

17





















SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT
TO THE REQUIREMENTS OF FORM 5500

18





UNITEDHEALTH GROUP 401(k) SAVINGS PLAN
 
 
(EIN 41-1321939, Plan #001)
 
 
 
 
 
FORM 5500, SCHEDULE H, Part IV, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2012
 
 
 
 
 
Current Value
COMMON/COLLECTIVE TRUST FUNDS:
 
 
Wellington Mid-Cap Opportunities Fund
 
$
313,088,740

Wells Fargo DJ Target 2030 N
 
278,194,288

Wells Fargo DJ Target 2035 N
 
276,095,951

Wells Fargo DJ Target 2025 N
 
262,185,385

EB Diversified Stock Fund
 
224,749,732

Wells Fargo DJ Target 2040 N
 
216,028,496

Wells Fargo DJ Target 2020 N
 
214,080,386

Wells Fargo DJ Target 2045 N
 
144,864,261

Wells Fargo DJ Target 2015 N
 
124,633,517

RiverSource Trust Income Fund I *
 
107,680,406

Wells Fargo DJ Target 2050 N
 
66,559,945

Wells Fargo DJ Target 2010 N
 
40,696,135

Fidelity STIF*
 
36,694,951

SSgA Bond Index Non-Lending Series Fund
 
33,083,165

Northern Trust Treasury Inflation
 
17,030,657

Wells Fargo DJ Target Today N
 
10,931,761

SSgA Global Equity Ex-US Index Fund
 
7,847,986

 
 
 
           Total common/collective trust funds
 
2,374,445,762

 
 
 
MUTUAL FUNDS:
 
 
Vanguard Institutional Index Fund
 
487,726,786

American Europacific Growth Fund
 
351,944,827

Vanguard Mid-Cap Index Fund Plus
 
222,696,359

Vanguard Small-Cap Index Fund Plus
 
210,901,895

Aberdeen Emerging Markets Instl Fund
 
24,944,544

PIMCO All Asset Fund Instl Class
 
22,619,247

Vanguard Prime Money Market Institutional
 
1,223,209

 
 
 
           Total mutual funds
 
1,322,056,867

 
 
 
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
 
MetLife Separate Account #675 - Columbia Management
 
134,111,602

FHLG 15YR 3.50% 10/25 #E02735
 
9,903,046

FFCB VFAC 7/14/14
 
9,431,102

USTN .75% 10/31/17
 
9,027,531

USTN .625% 9/30/17
 
8,237,099

SSBK GOVT STIF FUND
 
7,648,679

USTN .5% 7/31/17
 
7,459,968

USTN .375% 3/15/15
 
5,509,894

FNR 2012-31 AD 1.75% 10/22
 
5,050,264

FNMA 15YR 4.50% 8/18 #254833
 
4,404,373

 
 
 
 
 
 (Continued)

19




 
 
 Current Value
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
 
FHLG 15YR 3% 01/28#TBA
 
$
3,589,931

USTN TII 1.875% 7/15/15
 
3,003,972

USTN .375% 11/15/15
 
3,002,174

FNMA 15YR 4.50% 6/18 #254759
 
2,929,543

USTN 0.0% XX/XX/XX
 
2,762,469

GNR 2012-53 A 2.1412% 4/40
 
2,759,958

GNR 2012-89 A 1.537% 1/36
 
2,721,906

DIAGEO CPTL PLC 1.5% 5/11/17
 
2,605,736

FNMA 15YR 5.50% 12/17 #555165
 
2,580,998

GNR 2011-49 A 2.45% 7/38
 
2,487,277

AT&T INC 2.5% 8/15/15
 
2,424,727

VERIZON COMMUNICATIN 3% 4/1/16
 
2,385,291

FNR 2011-15 HT 5.5 3/26
 
2,188,258

GNR 2010-102 AE 0 11/39
 
2,095,338

GNR 2011-161 A 1.738% 1/34
 
2,070,708

JPMORGAN CHASE & CO 3.45% 3/16
 
2,066,016

LBUBS 2004-C1 A4 4.568% 1/31
 
2,043,896

CSFB 05-C1 A4 CSTR 2/38
 
2,038,151

LBUBS 2004-C6 A6 CSTR 8/29
 
2,037,690

WBCMT 2006-C29 A4 5.308 11/48
 
2,019,768

CSFB 2004-C1 A4 4.75% 1/37
 
1,976,184

GNR 2010-13 A 2.461% 8/22
 
1,933,369

TORONTO DOMINI 2.375% 10/19/16
 
1,899,502

RABOBANK NEDRLD MTN 2.125 10/15
 
1,881,471

GNR 2009-99 A 3.42% 11/35
 
1,879,236

PEPSICO INC .7% 8/13/15
 
1,867,219

GNR 2010-18 A 3.1% 12/50
 
1,846,242

ONTARIO PROV GLB 4.75 1/19/16
 
1,829,405

BANK NY MELLON 3ML+23 10/23/15
 
1,800,855

FHLG 15YR 3.00% 1/27 #J17742
 
1,794,461

MLMT 2003-KEY1 A4 5.236 11/35
 
1,788,206

GNR 2009-114 A 3.1% 12/38
 
1,770,899

FHLG 15YR 4.00% 8/25 #J12840
 
1,718,095

FNMA 15YR 5.50% 10/21 #AL0408
 
1,707,729

FHMS K008 A1 2.746% 12/19
 
1,701,662

FNMA 15YR 3.50% 9/25 #AE2572
 
1,681,476

CATERPILR FIN MTN 1.1% 5/29/15
 
1,655,102

BERKSHIRE HATH FIN 1.6 5/15/17
 
1,643,777

FNMAMTN VFAC FDL+32 1/20/16
 
1,626,837

FNR 2009-37 KA 4% 3/24
 
1,622,134

BANK AMER GMTN 7.375 5/15/14
 
1,611,099

GNR 2012-55 AB 1.75% 08/33
 
1,593,257

FNMA 15YR 5.50% 12/18 #735575
 
1,579,902

WELLS FARGO & CO 2.1% 5/08/17
 
1,554,930

BACM 04-3 A5 CSTR 6/39
 
1,534,213

WBCMT 05-C18 A4 CSTR 4/42
 
1,513,547

CF 2012-1A A 1ML+75 11/23
 
1,504,393

FNMA 7-YR 5.25% 5/16 #745727
 
1,477,251

 
 
 
 
 
 (Continued)


20




 
 
 Current Value
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
 
GECAPMTN FRN 3ML+87 5/09/16
 
$
1,474,422

MORGAN STANLEY 5.375 10/15/15
 
1,471,914

CAROLINA PWR &L 5.3% 1/15/19
 
1,428,550

ASTRAZENECA 1.95% 9/18/19
 
1,425,459

AMOT 2011-3 A1 1ML+63 5/16
 
1,405,977

BP CAPITAL MARKET 3.2% 3/11/16
 
1,399,113

IBM CORP 1.95% 7/22/16
 
1,388,067

CNH 2010-A A4 2.49% 1/16
 
1,380,970

CONOCOPHILLIPS 5.75% 2/01/19
 
1,378,270

US BANCORP 2.45% 7/27/15
 
1,377,551

PPHEA 2011-2 A1 3ML+50 7/21
 
1,364,528

UNITEDHEALTH GRP 6 2/15/18*
 
1,363,353

CIBC 1.45% 9/13/13
 
1,361,074

GNR 2012-79 A 1.8% 4/39
 
1,355,872

SANOFI-AVENTIS FRN 3ML+31
 
1,355,116

COMM 05-LP5 A4 CSTR 5/43
 
1,350,950

ROCHE HLDGS INC 5% 3/01/14144A
 
1,349,910

SOUTHERN CALIF 5.5% 3/15/14
 
1,349,497

ANHEUSER BUSCH 5.375% 11/14
 
1,349,128

GNR 2011-143 A 3% 7/43
 
1,337,913

SOCALED CAL FRN 3ML+45 9/15/14
 
1,307,730

GNR 2010-16 AB 2.676% 5/33
 
1,300,911

WALT DISNEY COMPANY .45% 12/15
 
1,269,104

GNR 2012-86 AB 1.54585% 4/40
 
1,266,939

GSINC 5.125% 1/15/15 GLOBAL
 
1,262,532

MHESA 2006-1 A 3ML+10 3/20/24
 
1,248,010

CITIGROUP MTN 5.5% 10/15/14
 
1,247,120

AMOT 2012-3 A1 1ML+70 6/17
 
1,238,559

SLMA 2010-1 A 1ML+40 3/25
 
1,201,081

AMERICAN EXPS 3ML+45 11/13/15
 
1,199,523

CD 2005-CD1 A4 CSTR 7/44
 
1,192,234

LLOYDS TSB GLOBAL 4.875% 1/16
 
1,180,785

FNMA 15YR 5.50% 1/18 #681771
 
1,167,078

ING BANK 3ML+164 9/25/15
 
1,163,169

GNR 2011-143 AB 3.9739% 3/33
 
1,153,637

FNMA 15YR 6.00% 4/23 #974740
 
1,132,274

GNR 2009-80 A 3.51% 5/41
 
1,127,519

PNC FUNDING CORP 2.7% 9/19/16
 
1,117,076

HSBC BNK PLC MTN 3.5%6/15 144A
 
1,113,963

UNITED TEC 3ML+50 6/01/15
 
1,111,606

SMAT 2012-2USA A3B 0 10/16
 
1,108,696

JOHN DEERE CAPL 3ML+22 3/03/14
 
1,102,007

FORDF 2010-5 A1 1.5% 9/15
 
1,078,116

LBUBS 2005-C1 A4 4.74% 2/30
 
1,071,596

GEN ELEC CAP CP 3ML+20 5/11/16
 
1,038,573

EFSV3 2012-1 A1 1ML+60 10/21
 
1,031,849

BB&T CORPORATION 1.6% 8/15/17
 
1,017,744

GALC 2009-1 A4 3.19% 12/13
 
1,016,537

FHLG 15YR 3.5% 07/26#J16061
 
1,010,605

 
 
 
 
 
 (Continued)


21




 
 
 Current Value
 
 
 
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
 
EFCT 2004-1 A2 1ML+16 12/22
 
$
1,005,035

FNMA 7-YR 5.52% 7/16 #462237
 
989,751

GCCFC 2007-GG9 A2 5.381 3/39
 
984,680

MET LIFE GLBL 3.125% 1/16 144A
 
983,398

BANK MONTREAL FRN 9/11/15
 
969,463

JPMCC 03-LN1 A2 CSTR 10/37
 
968,319

BACM 2005-4 ASB 4.867 7/45
 
966,541

NSLC 04-2A A4 @LIBUS3+14 8/19
 
954,349

GNR 2011-110 A 2.2366% 3/33
 
949,782

GNR 2007-77 C CSTR 2/36
 
947,759

TRANSCANADA PIPE 3.4% 6/1/15
 
931,608

ACE INA HOLDING 2.6% 11/23/15
 
915,638

FNR 2010-87 GA 4% 2/24
 
909,346

AMCAR 2012-3 A2 0.71% 12/15
 
902,001

GNR 2011-142 A 2.337% 10/40
 
892,687

SIMON PROPERTY 5.875% 3/01/17
 
872,335

FNMA 15YR 4.50% 9/24 #AC0543
 
858,508

MBMOT 2012-BA A 1ML+27 11/14
 
840,357

MMAF 2012-AA A2 0.84% 1/15
 
826,413

FNMA 15YR 4.50% 10/24 #AC4799
 
816,345

GNR 2010-52 AB 2.94% 8/27
 
813,870

FNMA 15YR 5.50% 5/19 #AD0631
 
812,184

FNMA 15YR 4.50% 4/18 #699278
 
800,938

FNMA 15YR 5.50% 5/23 #AL1555
 
791,512

SOUTHERN CALF ED 5% 1/15/16
 
783,679

FHLG 15YR 3.00% 8/27 #G14530
 
779,346

PPHEA 2011-1 A1 3ML+50 10/18
 
754,323

GNR 2009-86 A 3.54% 9/35
 
752,471

HALST 2012-A A2 0.68% 1/15
 
751,539

FHLG 15YR 3.5% 01/26#J13972
 
751,088

ISLLC 2005-1 A2 3ML+10 3/22
 
719,442

FNMA 15YR 5.00% 7/20 #833731
 
701,455

SMAT 2012-4US A3B 1ML+55 3/17
 
695,473

FORDF 2012-4 A1 0.74% 9/16
 
690,474

EFF 2012-2 A2 0.72% 9/13
 
690,003

ALLYL 2012-SN1 A2 0.51% 12/14
 
685,275

NEF 2005-1 A1 3ML+10 10/26
 
681,390

FNMA 15YR 5.50% 2/23 #965748
 
681,320

FNMA 15YR 3.50% 10/25 #AE6134
 
664,234

SLMA 2006-6 A2 3ML+8 10/22
 
654,109

FHLM ARM 4.73% 7/35 #1G0847
 
648,923

FHLG 15YR 3.5% 08/26#J16317
 
613,320

FHR 3812 BE 2.75% 9/15/18
 
605,104

CITEL 2005-1 A2 3ML+9 3/22
 
592,408

FNR 2011-16 GJ 3.5% 3/26
 
588,485

FNMA 15YR 5.50% 8/23 #933985
 
586,952

GNR 2010-49 A 2.87% 3/51
 
571,097

 
 
 
 
 
 (Continued)


22




 
 
 Current Value
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
 
FNMA 15YR 5.00% 11/19 #785738
 
$
564,929

FHLG 15YR 3.5% 12/25#J13807
 
557,897

BACM 2006-2 AAB CSTR 5/45
 
555,113

FNMA 15YR 4.50% 1/23 #969478
 
541,388

FHLG 15YR 3.5% 12/25#G18369
 
538,471

FHLG 15YR 4.00% 7/26 #G14336
 
535,710

GECMC 04-C3 A4 CSTR 7/39
 
533,088

FHLM ARM 5.90% 8/36 #1G2450
 
532,687

AMOT 2011-4 A1 1ML+80 9/16
 
529,288

FNMA 15YR 4.50% 6/24 #AA9369
 
516,031

GNR 2010-16 A 3.214% 1/40
 
507,192

GNR 2012-19 A 1.829% 3/39
 
504,211

FHLG 15YR 3.5% 07/26#G14197
 
504,104

GNR 2010-102 AC 2.264% 11/39
 
500,085

UTAH STUD 3ML+ 05/01/23
 
484,495

FNMA 15YR 5.50% 8/23 #988961
 
474,925

FNMA 15YR 5.50% 1/25 #890449
 
461,617

FNMA 10YR 3.50% 9/20 #MA0521
 
457,694

GEDFT 2012-4 A 1ML+44 10/17
 
450,266

FHLG 15YR 3.5% 07/26#E02930
 
435,445

FHLM ARM 6.15% 1/37 #1G2598
 
429,260

FNMA 6.00% 4/33 #555528
 
424,294

FHLG 15YR 3.50% 7/26 #J15991
 
415,881

FNMA 15YR 5.00% 11/18 #751718
 
366,716

FNMA ARM 6ML+83.6 6/37 #888989
 
366,248

FNMA 15YR 5.00% 12/18 #753940
 
354,404

FHLG 15YR 6.00% 8/17 #E91004
 
267,056

FNR 2004-60 PA 5.5% 4/34
 
254,431

MSC 2006-HQ9 AAB 5.685 7/44
 
248,368

FNMA 6.50% 3/33 #685433
 
229,606

PACIFI CORP 5.45% 9/15/13
 
220,442

FHLM ARM 5.67% 9/37 #1J0614
 
217,704

FHLM ARM 6.01% 10/37 #1G2264
 
206,053

FNMA 15YR 5.50% 3/18 #681400
 
188,574

FNMA 15YR 5.00% 6/18 #709901
 
187,915

FNMA 15YR 5.00% 11/18 #740843
 
184,956

FNMA 15YR 4.50% 1/25 #AD2617
 
177,375

FNMA ARM 5.92% 7/36 #887648
 
176,894

FNMA 15YR 3.50% 8/26 #AL1581
 
167,006

FNMA 15YR 3.50% 11/20 #AB1827
 
161,473

FNMA ARM 12ML+152 2/36 #866097
 
142,102

FNMA 15YR 5.00% 6/18 #724867
 
140,344

FNMA ARM 5.067% 11/34 #799769
 
131,815

FNMA 6.50% 8/32 #655679
 
130,009

FNMA ARM 12ML+160 12/35#844705
 
127,963

FHR 3296 NA 5% 2/21
 
123,114

FNMA 7.00% 8/27 #251348
 
116,006

FHLG 15YR 5.00% 6/18 #E97248
 
108,992

FNMA 10YR 5.50% 3/17 #256646
 
92,485

FHLG 15YR 5.00% 11/17 #E92454
 
91,665

 
 
 
 
 
 (Continued)

23




 
 
 Current Value
SYNTHETIC INVESTMENT CONTRACTS - Underlying investments
 
FNMA ARM 12ML+186 6/36 #872753
 
$
87,919

FNMA 15YR 4.50% 4/23 #962845
 
87,216

FNMA ARM 5.069% 10/34 #801344
 
85,156

FNMA 15YR 4.50% 3/23 #962078
 
82,406

FHLG 15YR 6.50% 7/17 #E90585
 
77,647

FHLG 15YR 3.00% 5/27 #J19197
 
76,095

FNMA 15YR 5.50% 5/18 #703937
 
62,794

FNMA ARM 12ML+145 1/36 #849082
 
62,233

FNMA ARM 4.901% 6/33 #705304
 
58,948

FNMA 15YR 5.50% 9/21 #256397
 
49,069

FNMA 15YR 5.50% 10/20 #889213
 
47,660

FHLM ARM 5.026% 5/33 #780514
 
47,164

FNMA 15YR 5.50% 9/17 #662079
 
37,315

FNMA 15YR 5.50% 6/20 #745192
 
36,919

FNMA 15YR 5.50% 9/17 #663346
 
36,299

FNMA 15YR 6.00% 3/17 #633966
 
35,971

FNMA 15YR 6.00% 4/16 #568049
 
32,764

FNMA 7.00% 6/28 #251946
 
29,179

FNMA 15YR 7.00% 4/17 #254291
 
28,557

FNMA 15YR 5.50% 4/18 #695838
 
26,711

FHLG 15YR 3.5% 10/25#J13300
 
23,934

FNMA 15YR 4.50% 4/26 #AL1364
 
23,176

FNMA 15YR 5.50% 7/24 #AL1187
 
22,654

FNMA 10YR 3.50% 1/21 #MA0629
 
22,307

FNMA 15YR 4.50% 3/21 #869800
 
22,305

FNMA 15YR 4.50% 12/17 #668363
 
16,905

FNMA 15YR 4.50% 4/24 #AA5025
 
14,376

FNMA ARM 5.80% 1/36 #849170
 
13,407

FHLG 15YR 3.5% 07/26#E02935
 
13,076

FNMA 15YR 4.50% 7/23 #986197
 
11,906

FNMA 15YR 5.50% 9/17 #256889
 
11,472

FNMA 15YR 7.00% 9/14 #518159
 
9,898

FNMA 15YR 5.50% 11/16 #256533
 
8,959

FNMA 15YR 5.50% 11/17 #674152
 
8,339

FNMA 15YR 4.50% 5/24 #995699
 
7,526

FNMA 15YR 5.50% 4/22 #937040
 
6,527

FNMA 15YR 5.50% 3/22 #817870
 
6,287

FNMA 15YR 5.50% 11/18 #735454
 
6,100

FNMA 15YR 5.50% 6/16 #581455
 
4,782

FNMA 15YR 5.50% 1/17 #625931
 
4,705

FNMA 15YR 5.50% 11/18 #743794
 
4,675

FNMA 15YR 5.50% 1/20 #810266
 
4,426

Riversource Money Market Fund 1 (net of pending cash)*
 
(3,598,463
)
 
 
 
Total underlying investments in synthetic contracts
 
411,469,842

 
 
 
 
 
 (Continued)


24




 
 
 
 
 Current Value
 
 
 
 
 
WRAPPERS AT FAIR VALUE:
 
Rate
 
 
Bank of America
 
2.020%
 
$
36,964

NATIXIS
 
2.475%
 
35,001

Monumental Life Insurance Company
 
1.870%
 
29,870

Pacific Insurance Company
 
2.067%
 
36,081

 
 
 
 
 
           Total wrappers at fair value
 
 
 
137,916

 
 
 
 
 
COMMON STOCK:
 
 
 
 
UnitedHealth Group*
 
 
 
126,381,749

Ashland Inc
 
 
 
4,453,910

Advance Auto Parts Inc
 
 
 
3,674,657

World Fuel Services Corp
 
 
 
3,081,163

Dxp Enterprises Inc
 
 
 
3,013,879

Wesco International Inc
 
 
 
2,881,958

Mednax Inc
 
 
 
2,647,221

Cinemark Holdings Inc
 
 
 
2,644,504

Regal-Beloit Corp
 
 
 
2,614,437

Denbury Resources Inc
 
 
 
2,611,116

Hospira Inc
 
 
 
2,512,290

Jarden Corp
 
 
 
2,506,933

Rock Tenn Company Cl A
 
 
 
2,470,619

Walter Invt Mgt
 
 
 
2,470,208

Onyx Pharmaceuticals Inc
 
 
 
2,302,910

Tupperware Brands Corp
 
 
 
2,182,605

Ascena Retail Group Inc
 
 
 
2,149,647

Universal Health Svcs Inc Cl B
 
 
 
2,144,323

Medivation Inc
 
 
 
2,058,678

Dfc Global Corp
 
 
 
2,052,666

Berry Petroleum Co Cl A
 
 
 
2,052,254

Jones Lang Lasalle Inc
 
 
 
2,049,983

Multi Color Co.
 
 
 
2,034,640

Rowan Companies Plc
 
 
 
1,974,075

Carlisle Cos Inc
 
 
 
1,912,638

Nasdaq Omx Group
 
 
 
1,908,763

Valeant Pharmaceuticals (Usa)
 
 
 
1,828,962

Nxp Semiconductors Nv
 
 
 
1,814,256

Parametric Technology Corp
 
 
 
1,749,477

Interactive Brokers Group Inc
 
 
 
1,587,701

Mentor Graphics Corp
 
 
 
1,560,223

Hub Group Inc Cl A
 
 
 
1,541,568

American Campus Cmnty Inc Reit
 
 
 
1,515,371

Ezcorp Inc Cl A Non Vtg
 
 
 
1,514,325

Tcf Financial Corporation
 
 
 
1,482,665

Hanger Inc
 
 
 
1,455,826

Reinsurance Group Of America
 
 
 
1,451,998

Colfax Corp
 
 
 
1,400,952

Clicksoftware Technologies Ltd
 
 
 
1,353,169

Maximus Inc
 
 
 
1,344,057

 
 
 
 
 
 
 
 
 
 (Continued)



25




 
 
 Current Value
COMMON STOCK
 
 
Global Payments Inc
 
$
1,320,042

Whiting Petroleum Corp
 
1,318,882

Monolithic Power Sys Inc
 
1,318,530

Huntington Bancshares Inc
 
1,303,113

American Eqy Invt Life Hld Co
 
1,301,952

World Acceptance Corp
 
1,259,318

Tenneco Inc
 
1,254,831

Express Inc
 
1,249,905

Encore Cap Group Inc
 
1,236,742

Fleetcor Technologies Inc
 
1,226,439

Signet Jewelers Ltd (US)
 
1,217,520

Blount Intl Inc
 
1,206,908

Trimas Corp
 
1,185,224

Dennys Corp
 
1,169,048

Web.Com Group Inc
 
1,159,136

GNC Holdings Inc
 
1,151,821

Cubesmart
 
1,144,036

Biomarin Pharmaceutical Inc
 
1,133,735

Exlservice Holdings Inc
 
1,127,310

Raymond James Financial Inc.
 
1,122,764

Jazz Pharma Plc
 
1,117,200

NCR Corp
 
1,115,769

Aspen Technologies
 
1,113,892

Progress Software Corp
 
1,106,803

Fxcm Inc Class A
 
1,094,609

Charles River Labs Intl Inc
 
1,094,124

Gildan Activewear Inc (US)
 
1,093,742

Innospec Inc
 
1,091,953

Albemarle Corp
 
1,077,161

Synta Pharmaceuticals Corp
 
1,073,200

Steven Madden Ltd
 
1,071,967

M/A-COM Tech Soln Hldgs Inc
 
1,068,109

Nationstar Mortgage Hldgs Inc
 
1,052,391

Ocwen Financial Corp
 
1,051,882

Genesee & Wyoming Inc Cl A
 
1,040,774

Hms Holdings Corp
 
1,030,061

Fiesta Restaurant Group Inc
 
1,022,610

SBA Communications Corp Cl A
 
1,021,978

Ryman Hospitality Pptys Inc
 
1,016,306

Tempur Pedic Intl Inc
 
992,880

Cytec Industries Inc
 
963,620

Jack In The Box Inc
 
945,230

Rockwood Holdings Inc
 
924,902

Uns Energy Corp
 
912,878

Spectrum Pharmaceutical Inc
 
893,298

Belden Inc
 
891,702

Synopsys Inc
 
880,376

Equity Lifestyle Pptys Inc
 
875,443

Redwood Trust Inc Reit
 
871,186

Forest City Enterprises Cl A
 
845,776

 
 
 
 
 
 (Continued)


26




 
 
 Current Value
COMMON STOCK
 
 
Sovran Self Storage Reit
 
$
833,382

Portfolio Recovery Assoc Inc
 
824,959

Emcor Group Inc
 
822,334

Hibbett Sports Inc