DISCONTINUED OPERATIONS

On September 18, 2017, we signed a definitive agreement to sell our subsidiary, United Life Insurance Company, to Kuvare for $280,000 in cash, subject to specified adjustments as set forth in the definitive agreement. As a result, our life insurance business (previously reported as a separate segment) has been considered held for sale and reported as discontinued operations and its financial position, results of operations and cash flows are separately reported for all periods presented, unless otherwise noted. The sale is expected to close in the first half of 2018, subject to customary conditions, including regulatory approval.

Subsequent to the close of the sale in the first half of 2018, UFG will provide services to Kuvare through a transition services agreement ("TSA"). The TSA will be put in place to ensure a seamless transfer of the business between UFG and Kuvare. The TSA includes, among other services, accounting management, human resources, legal and information technology services, from the closing date for up to 24 months.

The assets and liabilities associated with discontinued operations prior to the closing of the sale have been presented separately in our Consolidated Balance Sheets. The major assets and liability categories were as follows as of the dates indicated:



Discontinued Operations
Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2017		2016

Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $34 in 2017 and $49 in 2016)	$	34	$	48
Available-for-sale, at fair value (amortized cost $1,412,291 in 2017 and $1,429,270 in 2016)	1,430,025		1,444,840
Equity Securities available-for-sale, at fair value (cost $5,099 in 2017 and $8,510 in 2016)	23,653		24,046
Mortgage loans	3,435		3,706
Policy loans	5,815		5,366
Other long-term investments	16,437		15,870
	1,479,399		1,493,876
Cash and cash equivalents	15,851		21,659
Deferred policy acquisition costs	71,151		70,750
Other assets	19,733		19,333
Total assets held for sale	$	1,586,134	$	1,605,618
Liabilities
Future policy benefits and losses	$	1,320,401	$	1,350,503
Deferred income taxes	18,716		27,739
Accrued expenses and other liabilities	8,018		11,981
Total liabilities held for sale	$	1,347,135	$	1,390,223

Summary operating results of discontinued operations were as follows for the periods indicated:



Discontinued Operations
Statements of Income
	For the Years Ended December 31,
(In Thousands, Except Share Data)	2017		2016		2015

Revenues
Net premiums earned	$	61,368	$	87,270	$	79,195
Investment income, net of investment expenses	49,720		51,538		54,222
Net realized investment gains (losses)
Other-than-temporary impairment charges	—		—		(1,300		)
Net realized investment gains	4,008		1,156		3,022
Total net realized investment gains	4,008		1,156		1,722
Other income	617		621		508
Total revenues	$	115,713	$	140,585	$	135,647

Benefits, Losses and Expenses
Losses and loss settlement expenses	$	40,451	$	31,365	$	29,001
Increase in liability for future policy benefits	27,632		59,969		50,945
Amortization of deferred policy acquisition costs	5,181		8,121		6,634
Other underwriting expenses	13,281		19,881		19,306
Interest on policyholders’ accounts	18,525		20,079		23,680
Total benefits, losses and expenses	$	105,070	$	139,415	$	129,566

Income from discontinued operations before income taxes	$	10,643	$	1,170	$	6,081
Federal income tax expense	4,490		384		2,275
Net income from discontinued operations	$	6,153	$	786	$	3,806
Earnings per common share from discontinued operations:
Basic	$	0.24	$	0.03	$	0.15
Diluted	0.24		0.03		0.15

The Company's Consolidated Statement of Cash Flows presents operating, investing and financing cash flows of the discontinued operations separately. The Company's cash management and financial management of both continued and discontinued operations is consolidated as a centralized corporate function in our Finance Department.