Our GAAP loss ratio for the three months ended June 30, 2019 increased to 62.3% from 58.3% for the comparable 2018 period. Our GAAP loss ratio for the six months ended June 30, 2019 decreased to 63.5% from 65.0% for the comparable 2018 period. Our GAAP loss ratio excluding loss adjustment expenses for the three months ended June 30, 2019 was 53.4% compared to 51.1% for the comparable 2018 period. Our GAAP loss ratio excluding loss adjustment expenses for the six months ended June 30, 2019 was 54.9% compared to 57.2% for the comparable 2018 period. Total prior year favorable development included in the pre-tax results for the three months ended June 30, 2019 was $10,357 compared to $12,149 for the comparable 2018 period. Total prior year favorable development included in the pre-tax results for the six months ended June 30, 2019 was $22,337 compared to $26,300 for the comparable 2018 period.
Underwriting, Operating and Related Expenses.
Underwriting, operating and related expenses for the three months ended June 30, 2019 decreased by $665, or 1.1%, to $60,908 from $61,573 for the comparable 2018 period. Underwriting, operating and related expenses for the six months ended June 30, 2019 decreased by $1,087, or 0.9%, to $121,342 from $122,429 for the comparable 2018 period. Our GAAP expense ratio for the three months ended June 30, 2019 decreased to 31.0% from 31.7% for the comparable 2018 period. Our GAAP expense ratio for the six months ended June 30, 2019 decreased to 31.0% from 31.7% for the comparable 2018 period.
Interest Expense.
Interest expense was $23 for the three months ended June 30, 2019 and 2018. Interest expense was $45 for the six months ended June 30, 2019 and 2018. The credit facility commitment fee included in interest expense was $37 for the six months ended June 30, 2019 and 2018
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Income Tax Expense.
Our effective tax rate was 20.6% and 19.1% for the three months ended June 30, 2019 and 2018, respectively. Our effective tax rate was 18.7% and 18.9% for the six months ended June 30, 2019 and 2018, respectively. The effective tax rates for the quarter and year ended June 30, 2019 were lower than the statutory rate primarily due to the effects of tax-exempt investment income and the impact of stock-based compensation. The effective tax rates for the quarter and year ended June 30, 2018 were lower than the statutory rate primarily due to the effects of tax-exempt investment income.
Net Income.
Net income for the three months ended June 30, 2019 was $25,934 compared to net income of $26,816 for the comparable 2018 period. Net income for the six months ended June 30, 2019 was $55,880 compared to net income of $35,941 for the comparable 2018 period.
Non-GAAP Operating Income
. Non-GAAP operating income as defined above was $22,629 for the three months ended June 30, 2019 compared to $27,702 for the comparable 2018 period. Non-GAAP operating income was $43,556 for the six months ended June 30, 2019 compared to $38,546 for the comparable 2018 period.
Liquidity and Capital Resources
As a holding company, Safety’s assets consist primarily of the stock of our direct and indirect subsidiaries. Our principal source of funds to meet our obligations and pay dividends to shareholders, therefore, is dividends and other permitted payments from our subsidiaries, principally Safety Insurance. Safety is the borrower under our credit facility.
Safety Insurance’s sources of funds primarily include premiums received, investment income, and proceeds from sales and redemptions of investments. Safety Insurance’s principal uses of cash are the payment of claims, operating expenses and taxes, the purchase of investments, and the payment of dividends to Safety.
Net cash provided by operating activities was $13,417 and $24,232 during the six months ended 2019 and 2018, respectively. Our operations typically generate positive cash flows from operations as most premiums are received in advance of the time when claim and benefit payments are required. Positive operating cash flows are expected to continue in the future to meet our liquidity requirements.