DISCONTINUED OPERATIONS

9 Months Ended

Jan. 31, 2017

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. Thirteen of those senior housing properties were sold during the second and third quarters of fiscal year 2017 and the remaining 21 senior housing properties continued to be classified as held for sale and discontinued operations at January 31, 2017.

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 nine months ended January 31, 2017 and 2016:

	(in thousands)
	Three Months Ended				Nine Months Ended
	January 31,				January 31,
	2017		2016		2017		2016
REVENUE
Real estate rentals	$	5,323	$	9,968	$	15,325	$	38,111
Tenant reimbursement		—		819		226		8,570
TRS senior housing revenue		813		1,003		2,602		3,006
TOTAL REVENUE		6,136		11,790		18,153		49,687
EXPENSES
Property operating expenses, excluding real estate taxes		—		1,555		—		10,323
Real estate taxes		—		876		—		5,665
Depreciation and amortization		—		2,331		16		11,918
Impairment of real estate investments		—		—		—		440
TRS senior housing expenses		840		912		2,393		2,493
TOTAL EXPENSES		840		5,674		2,409		30,839
Operating income		5,296		6,116		15,744		18,848
Interest expense(1)		(1,200)		(4,825)		(3,969)		(16,993)
Gain/loss on extinguishment of debt(1)		—		36,456		(72)		29,336
Other income		—		154		—		427
Income from discontinued operations before gain on sale		4,096		37,901		11,703		31,618
Gain on sale of discontinued operations		19,535		331		26,038		24,241
INCOME FROM DISCONTINUED OPERATIONS	$	23,631	$	38,232	$	37,741	$	55,859

(1) Interest expense for the three and nine months ended January 31, 2016 includes $1.6 million and $4.7 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)
	January 31, 2017		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	$	111,335	$	189,900
Receivable arising from straight-lining of rents		5,278		9,805
Accounts receivable		476		1,707
Prepaid and other assets		68		43
Tax, insurance and other escrow		711		670
Property and equipment		475		479
Goodwill		18		18
Total major classes of assets of the discontinued operations		118,361		202,622
Other assets included in the disposal group classified as held for sale		21,865		17,915
Total assets of the disposal group classified as held for sale on the balance sheet	$	140,226	$	220,537
Carrying amounts of major classes of liabilities included as part of discontinued operations
Accounts payable and accrued expenses	$	356	$	810
Mortgages payable		39,839		67,940
Other		7,900		7,900
Total major classes of liabilities of the discontinued operations		48,095		76,650
Other liabilities included in the disposal group classified as held for sale		6,196		838
Total liabilities of the disposal group classified as held for sale on the balance sheet	$	54,291	$	77,488