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 review performance and make decisions, the Company realigned its segments as of December 31, 2017 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 the Company's 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:



	Three Months Ended March 31,
	2018			2017
Revenues:
Self-Storage Operations	$	247,886		$	231,493
Tenant Reinsurance	27,034			22,855
Total segment revenues	274,920			254,348

Operating expenses:
Self-Storage Operations	$	72,753		$	66,645
Tenant Reinsurance	5,607			3,920
Total segment operating expenses	$	78,360		$	70,565

Net operating income:
Self-Storage Operations	175,133			164,848
Tenant Reinsurance	21,427			18,935
Total segment net operating income:	$	196,560		$	183,783

Other components of net income (loss):
Property management fees and other income	10,565			8,660
General and administrative expense	(21,464		)	(18,808		)
Depreciation and amortization expense	(51,749		)	(49,432		)
Interest expense	(40,966		)	(35,970		)
Non-cash interest expense related to the amortization of discount on equity component of exchangeable senior notes	(1,209		)	(1,269		)
Interest income	1,438			2,315
Equity in earnings of unconsolidated real estate ventures	3,597			3,579
Income tax expense	(1,342		)	(3,124		)
Net income	$	95,430		$	89,734