DISCONTINUED OPERATIONS

6 Months Ended

Oct. 31, 2016

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

NOTE 7 • DISCONTINUED OPERATIONS

We report in discontinued operations the results of operations and any gain or loss on sale of a property or group of properties that has either been disposed of or is classified as held for sale and for which the disposition represents a strategic shift that has or will have a major effect on our operations and financial results. During fiscal year 2016, we determined that our strategic plan to exit the office and retail segments met the criteria for discontinued operations. Accordingly, 48 office properties, 17 retail properties and 1 healthcare property were classified as held for sale and subsequently sold during fiscal year 2016. Additionally, we determined that our strategic decision to exit senior housing, which was a subset of our healthcare segment, met the criteria for discontinued operations and we consequently classified 34 senior housing properties as held for sale and discontinued operations at April 30, 2016. Eight of those senior housing properties were sold during the second quarter of fiscal year 2017 and the remaining 26 senior housing properties continued to be classified as held for sale and discontinued operations at October 31, 2016.

The following information shows the effect on net income and the gains or losses from the sales of properties classified as discontinued operations for the three and six months ended October 31, 2016 and 2015:

	(in thousands)
	Three Months Ended				Six Months Ended
	October 31,				October 31,
	2016		2015		2016		2015
REVENUE
Real estate rentals	$	4,992	$	9,703	$	10,002	$	28,143
Tenant reimbursement		112		1,486		226		7,751
TRS senior housing revenue		916		965		1,789		2,003
TOTAL REVENUE		6,020		12,154		12,017		37,897
EXPENSES
Property operating expenses, excluding real estate taxes		—		2,668		—		8,768
Real estate taxes		(112)		1,269		—		4,789
Depreciation and amortization		—		2,498		16		9,587
Impairment of real estate investments		—		—		—		440
TRS senior housing expenses		769		812		1,553		1,581
TOTAL EXPENSES		657		7,247		1,569		25,165
Operating income		5,363		4,907		10,448		12,732
Interest expense(1)		(1,395)		(5,021)		(2,769)		(12,168)
Gain/Loss on extinguishment of debt(1)		(72)		(7,120)		(72)		(7,120)
Other income		—		203		—		273
Income from discontinued operations before gain on sale		3,896		(7,031)		7,607		(6,283)
Gain on sale of discontinued operations		6,503		23,910		6,503		23,910
INCOME FROM DISCONTINUED OPERATIONS	$	10,399	$	16,879	$	14,110	$	17,627

(1) Interest expense for the three and six months ended October 31, 2015 includes $1.6 million and $3.1 million, respectively of default interest related to a $122.6 million non-recourse loan by one of our subsidiaries. In the third quarter of fiscal year 2016, ownership of the nine properties serving as collateral on the loan was transferred to the mortgage lender and the debt obligation and accrued interest was removed from our balance sheet.

The following information reconciles the carrying amounts of major classes of assets and liabilities of the discontinued operations to assets and liabilities held for sale that are presented separately on the Condensed Consolidated Balance Sheets:

	(in thousands)
	October 31, 2016		April 30, 2016
Carrying amounts of major classes of assets included as part of discontinued operations
Property owned and intangible assets, net of accumulated depreciation and amortization	$	157,050	$	189,900
Receivable arising from straight-lining of rents		8,800		9,805
Accounts receivable		912		1,707
Prepaid and other assets		34		43
Tax, insurance and other escrow		781		670
Property and equipment		471		479
Goodwill		18		18
Total major classes of assets of the discontinued operations		168,066		202,622
Other assets included in the disposal group classified as held for sale		23,167		17,915
Total assets of the disposal group classified as held for sale on the balance sheet	$	191,233	$	220,537
Carrying amounts of major classes of liabilities included as part of discontinued operations
Accounts payable and accrued expenses	$	352	$	810
Mortgages payable		53,829		67,940
Other		7,900		7,900
Total major classes of liabilities of the discontinued operations		62,081		76,650
Other liabilities included in the disposal group classified as held for sale		7,245		838
Total liabilities of the disposal group classified as held for sale on the balance sheet	$	69,326	$	77,488