Schedule II. Condensed Financial Statements of Parent Company

United Fire Group, Inc. (parent company only)

Condensed Balance Sheets



	December 31,
(In thousands, except share data)	2014		2013

Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $200 in 2014 and $200 in 2013)	$	200	$	200
Investment in subsidiary	814,569		778,843
Cash and cash equivalents	2,263		3,253
Federal income tax receivable	383		537
Accrued investment income	1		1
Total assets	$	817,416	$	782,834

Liabilities and stockholders' equity
Liabilities	$	1	$	1

Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 25,019,415 and 25,360,893 issued and outstanding in 2014 and 2013, respectively	$	25	$	25
Additional paid-in capital	202,676		211,574
Retained earnings	523,541		484,084
Accumulated other comprehensive income, net of tax	91,173		87,150
Total stockholders' equity	$	817,415	$	782,833

Total liabilities and stockholders' equity	$	817,416	$	782,834

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Form 10-K.

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Income and Comprehensive Income



	For the Years Ended December 31,
(In thousands)	2014			2013			2012⁽¹⁾

Revenues
Investment income	$	22		$	23		$	13
Total revenues	22			23			13

Expenses
Other operating expenses	$	297		$	172		$	158
Total expenses	297			172			158

Loss before income taxes and equity in net income of subsidiary	(275		)	(149		)	(145		)
Federal income tax benefit	(107		)	(49		)	(51		)
Net loss before equity in net income of subsidiary	$	(168	)	$	(100	)	$	(94	)
Equity in net income of subsidiary	59,305			76,240			40,306
Net income	$	59,137		$	76,140		$	40,212

Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary	$	55,888		$	(35,489	)	$	34,436
Change in liability for underfunded employee benefit plans of subsidiary	(47,685		)	24,066			(15,922		)
Other comprehensive income (loss), before tax and reclassification adjustments	$	8,203		$	(11,423	)	$	18,514
Income tax effect	(2,871		)	3,998			(6,477		)
Other comprehensive income (loss), after tax, before reclassification adjustments	$	5,332		$	(7,425	)	$	12,037
Reclassification adjustment for net realized gains of the subsidiary included in income	(5,085		)	(6,812		)	(4,102		)
Reclassification adjustment for employee benefit costs of the subsidiary included in expense	3,072			5,868			4,971
Total reclassification adjustments, before tax	$	(2,013	)	$	(944	)	$	869
Income tax effect	704			331			(304		)
Total reclassification adjustments, after tax	$	(1,309	)	$	(613	)	$	565

Comprehensive income	$	63,160		$	68,102		$	52,814

(1) The Condensed Statement of Income and Comprehensive Income includes the full year 2012 results. The results of January 2012 are immaterial to the full year 2012 results.

On February 1, 2012, we completed a holding company reorganization (the "Reorganization") of United Fire Group, Inc., United Fire & Casualty Company, and UFC MergeCo, Inc., an Iowa corporation formed for the purpose of facilitating the Reorganization. The Reorganization agreement was approved and adopted by United Fire & Casualty Company's shareholders at a special meeting held on January 24, 2012.

United Fire Group, Inc. and its subsidiaries file a consolidated federal income tax return. The federal income tax provision represents an allocation under it's tax allocation agreements.

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Form 10-K.

Schedule II. Condensed Financial Statements of Parent Company (continued)

United Fire Group, Inc. (parent company only)

Condensed Statements of Cash Flows



	For the Years Ended December 31,
(In thousands)	2014			2013			2012⁽¹⁾

Cash flows from operating activities
Net income	$	59,137		$	76,140		$	40,212
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(59,305		)	(76,240		)	(40,306		)
Dividends received from subsidiary	29,000			13,175			26,950
Other, net	700			1,261			26
Total adjustments	$	(29,605	)	$	(61,804	)	$	(13,330	)
Net cash provided by operating activities	$	29,532		$	14,336		$	26,882

Cash flows from investing activities
Purchase of held-to-maturity investments	$	—		$	—		$	(200	)
Net cash used in investing activities	$	—		$	—		$	(200	)

Cash flows from financing activities
Repurchase of common stock	$	(12,942	)	$	(1,644	)	$	(7,301	)
Issuance of common stock	2,260			3,393			1,106
Tax impact from issuance of common stock	(160		)	(488		)	(78		)
Payment of cash dividends	(19,680		)	(17,484		)	(15,269		)
Net cash used in financing activities	$	(30,522	)	$	(16,223	)	$	(21,542	)

Net change in cash and cash equivalents	$	(990	)	$	(1,887	)	$	5,140
Cash and cash equivalents at beginning of period	3,253			5,140			—
Cash and cash equivalents at end of year	$	2,263		$	3,253		$	5,140

(1) The Condensed Statement of Cash Flows includes the full year 2012 results. The results of January 2012 are immaterial to the full year 2012 results.

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Form 10-K.