CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Notes to Consolidated Financial Statements, Continued Note 13: Related Party Transactions Note 14: Quarterly Financial Information (Unaudited) Table of Contents The Company has various routine related party transactions in conjunction with our holding company structure, such as a management service agreement related to costs incurred, a tax sharing agreement between entities, and inter-company dividends and capital contributions. A reinsurance assumption and novation transaction were completed effective July 1, 2018 between CICA and CICA Ltd. to transfer the international policies from CICA to CICA Ltd., the newly formed Bermuda entity. As part of this transaction, the Company agreed to infuse capital into CICA as required by the Colorado Department of Insurance to keep CICA's risk-based capital above 350% in any future calendar year-end periods. There were no other changes related to these relationships during the year ended December 31, 2018. Insurance Investors Inc. was dissolved into its parent company, CICA, as of December 31, 2018. In 2018, CICA contributed $450,000 in capital to CNLIC and SPLIC contributed $450,000 in capital to MGLIC. In 2017, Citizens made a $5.0 million capital contribution to CICA. In the third quarter of 2017, Citizens contributed $250,000 to capitalize CICA Ltd., and SPLIC contributed $250,000 in capital to MGLIC and SPLIC declared a dividend payable to CICA of $395,000 which was paid in 2018. The following table contains selected unaudited financial data for each quarter. $^{(a)}$ On July 1, 2018, the Company novated all of the international policies issued by CICA to CICA Ltd., a newly established Bermuda entity that began operations in July 2018. While this novation transaction has been eliminated in consolidation of affiliated entities, there are tax effects reflected in the consolidated financial statements as a result of the transaction being executed between our subsidiaries that reside in different tax jurisdictions. CICA Ltd. is considered a controlled foreign corporation for federal tax purposes. As a result, the insurance activity of CICA Ltd. is subject to Subpart F of the IRC and is included in Citizens’s taxable income which generated $18.4 million of federal income tax expense in 2018. In addition, as of July 1, 2018, we implemented a new actuarial valuation software solution that provides enhanced modeling capabilities for ordinary whole life and endowment policies of CICA and CICA Ltd., which are included in the Life Insurance segment. The impact of this system conversion resulted in changes in estimates due to refinements based upon our accounting analysis of the circumstances and reflected as a decrease in reserves of $10.2 million and a decrease in DAC of $4.3 million, before tax. Subsequent to the issuance of the Company's interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2018, the Company's management determined the federal income tax expense and the deferred federal income tax liability were overstated by $7.6 million. The Company has restated the Third Quarter amounts presented above to correct the error that is related to accounting for the income tax effects of the novation transaction that was executed on July 1, 2018. As of September 30, 2018, certain temporary differences that existed between U.S. GAAP and tax-basis balances attributable to the Bermuda tax jurisdiction were improperly reported as deferred tax assets and liabilities using the 21% U.S. tax rate as opposed to the 0% Bermuda tax rate. 114 Fourth Quarter Third Quarter  (a) (As Restated) Second Quarter First Quarter (In thousands, except per share amounts) 2018 Revenues $ 65,570 61,161 59,842 57,433 Benefits and expenses 67,598 55,599 63,953 54,854 Federal income tax expense (benefit) (596 ) 12,671 (1,553 ) 2,542 Net income (loss) (1,432) (7,109) (2,558) 37 Net income (loss) available to common shareholders (1,432 ) (7,109 ) (2,558 ) 37 Basic & Diluted earnings (losses) per share of Class A common stock (0.03) (0.14) (0.05) — Basic & Diluted earnings (losses) per share of Class B common stock (0.01 ) (0.07 ) (0.03 ) —