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)	2016		2015

Assets
Fixed maturities, held-to-maturity, at amortized cost (fair value $150 in 2016 and $150 in 2015)	$	150	$	150
Investment in subsidiary	925,887		871,590
Cash and cash equivalents	14,325		6,565
Federal income tax receivable	1,521		591
Accrued investment income	1		1
Total assets	$	941,884	$	878,897

Liabilities and stockholders' equity
Liabilities	$	—	$	—

Stockholders' equity
Common stock, $0.001 par value, authorized 75,000,000 shares; 25,429,769 and 25,151,428 issued and outstanding in 2016 and 2015, respectively	$	25	$	25
Additional paid-in capital	216,482		207,426
Retained earnings	616,322		591,009
Accumulated other comprehensive income, net of tax	109,055		80,437
Total stockholders' equity	$	941,884	$	878,897

Total liabilities and stockholders' equity	$	941,884	$	878,897

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)	2016			2015			2014

Revenues
Investment income	$	66		$	25		$	22
Total revenues	66			25			22

Expenses
Other operating expenses	$	73		$	116		$	297
Total expenses	73			116			297

Loss before income taxes and equity in net income of subsidiary	(7		)	(91		)	(275		)
Federal income tax benefit	(3		)	(42		)	(107		)
Net loss before equity in net income of subsidiary	$	(4	)	$	(49	)	$	(168	)
Equity in net income of subsidiary	49,908			89,175			59,305
Net income	$	49,904		$	89,126		$	59,137

Other comprehensive income (loss)
Change in unrealized appreciation on investments held by subsidiary	$	13,017		$	(28,185	)	$	55,888
Change in liability for underfunded employee benefit plans of subsidiary	30,045			8,714			(47,685		)
Other comprehensive income (loss), before tax and reclassification adjustments	$	43,062		$	(19,471	)	$	8,203
Income tax effect	(15,072		)	6,814			(2,871		)
Other comprehensive income (loss), after tax, before reclassification adjustments	$	27,990		$	(12,657	)	$	5,332
Reclassification adjustment for net realized gains of the subsidiary included in income	(4,520		)	(4,513		)	(5,085		)
Reclassification adjustment for employee benefit costs of the subsidiary included in expense	5,486			7,468			3,072
Total reclassification adjustments, before tax	$	966		$	2,955		$	(2,013	)
Income tax effect	(338		)	(1,034		)	704
Total reclassification adjustments, after tax	$	628		$	1,921		$	(1,309	)

Comprehensive income	$	78,522		$	78,390		$	63,160

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)	2016			2015			2014

Cash flows from operating activities
Net income	$	49,904		$	89,126		$	59,137
Adjustments to reconcile net income to net cash provided by operating activities
Equity in net income of subsidiary	(49,908		)	(89,175		)	(59,305		)
Dividends received from subsidiary	24,000			22,500			29,000
Other, net	2,995			1,269			700
Total adjustments	$	(22,913	)	$	(65,406	)	$	(29,605	)
Net cash provided by operating activities	$	26,991		$	23,720		$	29,532

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	$	(3,746	)	$	(2,423	)	$	(12,942	)
Issuance of common stock	9,922			5,496			2,260
Tax impact from issuance of common stock	(816		)	(833		)	(160		)
Payment of cash dividends	(24,591		)	(21,658		)	(19,680		)
Net cash used in financing activities	$	(19,231	)	$	(19,418	)	$	(30,522	)

Net change in cash and cash equivalents	$	7,760		$	4,302		$	(990	)
Cash and cash equivalents at beginning of period	6,565			2,263			3,253
Cash and cash equivalents at end of year	$	14,325		$	6,565		$	2,263

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.