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)	2015		2014

Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2015 and $200 in 2014)	$	150	$	200
Investment in subsidiary	871,590		814,569
Cash and cash equivalents	6,565		2,263
Federal income tax receivable	591		383
Accrued investment income	1		1
Total assets	$	878,897	$	817,416

Liabilities and stockholders' equity
Liabilities	$	—	$	1

Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 25,151,428 and 25,019,415 issued and outstanding in 2015 and 2014, respectively	$	25	$	25
Additional paid-in capital	207,426		202,676
Retained earnings	591,009		523,541
Accumulated other comprehensive income, net of tax	80,437		91,173
Total stockholders' equity	$	878,897	$	817,415

Total liabilities and stockholders' equity	$	878,897	$	817,416

This condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes included in Part II, Item 8 of this Annual Report on 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)	2015			2014			2013

Revenues
Investment income	$	25		$	22		$	23
Total revenues	25			22			23

Expenses
Other operating expenses	$	116		$	297		$	172
Total expenses	116			297			172

Loss before income taxes and equity in net income of subsidiary	(91		)	(275		)	(149		)
Federal income tax benefit	(42		)	(107		)	(49		)
Net loss before equity in net income of subsidiary	$	(49	)	$	(168	)	$	(100	)
Equity in net income of subsidiary	89,175			59,305			76,240
Net income	$	89,126		$	59,137		$	76,140

Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary	$	(28,185	)	$	55,888		$	(35,489	)
Change in liability for underfunded employee benefit plans of subsidiary	8,714			(47,685		)	24,066
Other comprehensive income (loss), before tax and reclassification adjustments	$	(19,471	)	$	8,203		$	(11,423	)
Income tax effect	6,814			(2,871		)	3,998
Other comprehensive income (loss), after tax, before reclassification adjustments	$	(12,657	)	$	5,332		$	(7,425	)
Reclassification adjustment for net realized gains of the subsidiary included in income	(4,513		)	(5,085		)	(6,812		)
Reclassification adjustment for employee benefit costs of the subsidiary included in expense	7,468			3,072			5,868
Total reclassification adjustments, before tax	$	2,955		$	(2,013	)	$	(944	)
Income tax effect	(1,034		)	704			331
Total reclassification adjustments, after tax	$	1,921		$	(1,309	)	$	(613	)

Comprehensive income	$	78,390		$	63,160		$	68,102

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 Annual Report on 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)	2015			2014			2013

Cash flows from operating activities
Net income	$	89,126		$	59,137		$	76,140
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(89,175		)	(59,305		)	(76,240		)
Dividends received from subsidiary	22,500			29,000			13,175
Other, net	1,269			700			1,261
Total adjustments	$	(65,406	)	$	(29,605	)	$	(61,804	)
Net cash provided by operating activities	$	23,720		$	29,532		$	14,336

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

Cash flows from financing activities
Repurchase of common stock	$	(2,423	)	$	(12,942	)	$	(1,644	)
Issuance of common stock	5,496			2,260			3,393
Tax impact from issuance of common stock	(833		)	(160		)	(488		)
Payment of cash dividends	(21,658		)	(19,680		)	(17,484		)
Net cash used in financing activities	$	(19,418	)	$	(30,522	)	$	(16,223	)

Net change in cash and cash equivalents	$	4,302		$	(990	)	$	(1,887	)
Cash and cash equivalents at beginning of period	2,263			3,253			5,140
Cash and cash equivalents at end of year	$	6,565		$	2,263		$	3,253

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.