

	Year ended December 31, 2018
(in thousands, except per share data)	First quarter		Second quarter		Third quarter		Fourth quarter			Year
Operating revenue ⁽¹⁾	$	572,160	$	621,458	$	612,126	$	576,468		$	2,382,212
Operating expenses ⁽¹⁾	494,593		526,135		515,431		501,710			2,037,869
Investment income	6,163		6,207		8,431		4,995			25,796
Interest expense and other (income), net ⁽²⁾	509		544		655		(2,889		)	(1,181		)
Income before income taxes	83,221		100,986		104,471		82,642			371,320
Net income	$	65,758	$	79,706	$	80,446	$	62,314		$	288,224

Earnings per share ⁽³⁾
Net income per share
Class A common stock – basic	$	1.41	$	1.71	$	1.73	$	1.34		$	6.19
Class A common stock – diluted	$	1.26	$	1.52	$	1.54	$	1.19		$	5.51
Class B common stock – basic and diluted	$	212	$	257	$	259	$	201		$	928

(1)

In accordance with ASC 606, "Revenue from Contracts with Customers", effective January 1, 2018, we allocate our management fee between the two performance obligations we have in the subscriber's agreement, policy issuance and renewal services and administrative services. We also present expenses we incur and the related reimbursements we receive for administrative services gross in our Statement of Operations. See Note 2, "Significant Accounting Policies".


(2)	The decrease in interest expense and other (income), net in the fourth quarter is driven by the $3.4 million gain recognized on the sale of the field offices we owned to Exchange. See Note 7, "Fixed Assets".


(3)	The cumulative sum of quarterly basic and diluted net income per share amounts may not equal total basic and diluted net income per share for the year due to differences in weighted average shares and equivalent shares outstanding for each of the periods presented.



	Year ended December 31, 2017
(in thousands, except per share data)	First quarter		Second quarter		Third quarter		Fourth quarter		Year
Operating revenue	$	399,316	$	448,564	$	442,492	$	401,402	$	1,691,774
Operating expenses ⁽¹⁾	332,376		365,116		361,253		342,777		1,401,522
Investment income ⁽¹⁾	6,589		6,451		8,418		7,134		28,592
Interest expense and other, net ⁽¹⁾	575		664		792		1,118		3,149
Income before income taxes	72,954		89,235		88,865		64,641		315,695
Net income	$	47,876	$	58,527	$	58,543	$	32,053	$	196,999

Earnings per share ⁽²⁾
Net income per share
Class A common stock – basic	$	1.03	$	1.26	$	1.26	$	0.69	$	4.23
Class A common stock – diluted ⁽³⁾	$	0.91	$	1.12	$	1.12	$	0.61	$	3.76
Class B common stock – basic	$	154	$	189	$	189	$	103	$	635
Class B common stock – diluted	$	154	$	188	$	189	$	103	$	634


(1)	Amounts presented have been reclassified from previously reported amounts as a result of the adoption of ASU 2017-07, "Compensation-Retirement Benefits". See Note 2, "Significant Accounting Policies".


(2)	The cumulative sum of quarterly basic and diluted net income per share amounts may not equal total basic and diluted net income per share for the year due to differences in weighted average shares and equivalent shares outstanding for each of the periods presented.


(3)	Class A diluted earnings per share was reduced by $0.19 for the fourth quarter and total year as a result of increased income tax expense from enactment of the TCJA of $10.1 million. See Note 4, "Earnings Per Share" and Note 11, "Income Taxes".