DISCONTINUED OPERATIONS

9 Months Ended

Jan. 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 the first quarter of 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 discontinued operations at July 31, 2015.  We sold these properties during the second and third quarters of fiscal year 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 nine months ended January 31, 2016 and 2015:

	(in thousands)
	Three Months Ended January 31						Nine Months Ended January 31
	2016			2015			2016			2015
REVENUE
Real estate rentals	$	3,576		$	13,687		$	21,966		$	40,780
Tenant reimbursement		718			6,290			8,268			18,309
TOTAL REVENUE		4,294			19,977			30,234			59,089
EXPENSES
Depreciation/amortization related to real estate investments		0			4,207			4,239			12,146
Utilities		416			1,803			3,016			5,608
Maintenance		588			2,766			4,784			8,310
Real estate taxes		756			3,532			5,341			10,531
Insurance		58			264			462			815
Property management expenses		468			921			1,941			2,761
Other property expenses		0			30			0			30
Amortization related to non-real estate investments		105			706			1,002			1,981
Impairment of real estate investments		0			0			440			1,442
TOTAL EXPENSES		2,391			14,229			21,225			43,624
Operating income		1,903			5,748			9,009			15,465
Interest expense(1)		(3,436	)		(4,586	)		(12,832	)		(14,148	)
Gain on extinguishment of debt(1)		36,456			0			29,336			0
Other income		154			0			427			5
Income from discontinued operations before gain on sale		35,077			1,162			25,940			1,322
Gain on sale of discontinued operations		331			0			24,241			0
INCOME FROM DISCONTINUED OPERATIONS(2)	$	35,408		$	1,162		$	50,181		$	1,322

(1) Interest expense includes $1.6 million and $4.7 million for the three and nine months ended January 31, 2016, respectively, of default interest related to a$122.6 million non-recourse loan by one of our subsidiaries.  Gain on extinguishment of debt in the three and nine months ended January 31, 2016, respectively, includes $36.5 million of gain on extinguishment of debt recognized in connection with our transfer of ownership to the mortgage lender of the nine properties serving as collateral for the $122.6 million non-recourse loan and the removal of the debt obligation and accrued interest from our balance sheet.

(2) Discontinued operations for the nine months ended January 31, 2016 and 2015 includes a noncontrolling interest for our Mendota joint venture entity.  Income from discontinued operations attributable to us was $51.4 million and $1.7 million for the nine months ended January 31, 2016 and 2015, respectively.

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, 2016		April 30, 2015
Carrying amounts of major classes of assets included as part of discontinued operations
Property owned and intangible assets, net of accumulated depreciation and amortization	$	0	$	417,045
Receivable arising from straight-lining of rents		0		10,078
Accounts receivable		0		566
Prepaid and other assets		0		699
Tax, insurance and other escrow		0		1,176
Goodwill		0		193
Deferred charges and leasing costs		0		9,606
Total major classes of assets of the discontinued operations		0		439,363
Other assets included in the disposal group classified as held for sale		22,064		23,740
Total assets of the disposal group classified as held for sale on the balance sheet	$	22,064	$	463,103
Carrying amounts of major classes of liabilities included as part of discontinued operations
Accounts payable and accrued expenses	$	0	$	13,952
Mortgages payable		0		295,677
Other		0		4
Total major classes of liabilities of the discontinued operations		0		309,633
Other liabilities included in the disposal group classified as held for sale		11,449		11,760
Total liabilities of the disposal group classified as held for sale on the balance sheet	$	11,449	$	321,393