SEGMENT INFORMATION

The Company’s segment disclosures present the measure used by the chief operating decision makers ("CODMs") for purposes of assessing each segment’s performance. The Company’s CODMs are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company’s reportable operating segments. NOI for our self-storage operations represents total property revenue less direct property operating expenses. NOI for our tenant reinsurance segment represents tenant reinsurance revenues less tenant reinsurance expense.

The Company’s segments were historically comprised of three reportable segments: (1) rental operations; (2) tenant reinsurance; and (3) property management, acquisition and development. Based on how the CODMs reviews performance and makes decisions, the Company realigned its segments into two reportable segments: (1) self-storage operations and (2) tenant reinsurance. The self-storage operations activities include rental operations of wholly-owned stores. The Company's consolidated revenues equal total segment revenues plus property management fees and other income. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company. Excluded from segment revenues and net operating income is property management fees and other income.

For all periods presented, substantially all of our real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment. The prior periods have been restated to conform to the current presentation. Financial information for the Company’s business segments is set forth below:



	Year Ended December 31,
	2017			2016			2015
Revenues:
Self-storage operations	$	967,229		$	864,742		$	676,138
Tenant reinsurance	98,401			87,291			71,971
Total segment revenues	$	1,065,630		$	952,033		$	748,109

Operating expenses:
Self-storage operations	$	271,974		$	250,005		$	203,965
Tenant reinsurance	19,173			15,555			13,033
Total segment operating expenses	$	291,147		$	265,560		$	216,998

Net operating income:
Self-storage operations	$	695,255		$	614,737		$	472,173
Tenant reinsurance	79,228			71,736			58,938
Total segment net operating income	$	774,483		$	686,473		$	531,111

Total segment net operating income	$	774,483		$	686,473		$	531,111
Other components of net income (loss):
Property management fees and other income	39,379			39,842			34,161
General and administrative expense	(78,961		)	(81,806		)	(67,758		)
Depreciation and amortization expense	(193,296		)	(182,560		)	(133,457		)
Acquisition and other related costs⁽¹⁾	—			(12,111		)	(69,401		)
Gain (loss) on real estate transactions, earnout from prior acquisition and sale of other assets	112,789			8,465			1,501
Interest expense	(153,511		)	(133,479		)	(95,682		)
Non-cash interest expense related to the amortization of discount on equity component of exchangeable senior notes	(5,103		)	(4,980		)	(3,310		)
Interest income	3,801			6,148			3,461
Interest income on note receivable from Preferred Operating Partnership unit holder	2,935			4,850			4,850
Equity in earnings of unconsolidated real estate ventures	15,331			12,895			12,351
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of partners' interests	—			69,199			2,857
Income tax expense	(3,625		)	(15,847		)	(11,148		)
Net income	$	514,222		$	397,089		$	209,536

(1) Beginning January 1, 2017, acquisition related costs have been capitalized due to the adoption of ASU 2017-01"Business Combinations (Topic 805): Clarifying the Definition of a Business."