DISCONTINUED OPERATIONS

12 Months Ended

Apr. 30, 2017

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

NOTE 12 • DISCONTINUED OPERATIONS

We report in discontinued operations the results of operations and the related gains or losses on the sales of properties that have either been disposed of or classified as held for sale and meet the classification of a discontinued operation as described in ASC 205 - Presentation of Financial Statements and ASC 360 - Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under this standard, a disposal (or classification as held for sale) of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.

We classified no dispositions as discontinued operations during the fiscal year ended April 30, 2017. During the fiscal year ended April 30, 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 discontinued operations and subsequently sold during the fiscal year ended April 30, 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 classified 34 senior housing properties as held for sale and discontinued operations at April 30, 2016. Thirty-two of these senior housing properties were subsequently sold during the fiscal year ended April 30, 2017. We classified no dispositions as discontinued operations during the fiscal year ended April 30, 2015. The following information shows the effect on net income and the gains or losses from the sale of properties classified as discontinued operations for the fiscal years ended April 30, 2017, 2016 and 2015.

	(in thousands)
	Year Ended April 30,
	2017		2016		2015
REVENUE
Real estate rentals	$	16,405	$	43,544	$	75,883
Tenant reimbursement		226		8,684		24,466
TRS senior housing revenue		3,218		3,955		3,520
TOTAL REVENUE		19,849		56,183		103,869
EXPENSES
Property operating expenses, excluding real estate taxes		75		10,252		23,517
Real estate taxes		—		5,777		14,343
Depreciation and amortization		16		14,166		27,823
Impairment of real estate investments		—		440		1,442
TRS senior housing expenses		3,113		3,366		2,997
Other expenses		—		—		1
TOTAL EXPENSES		3,204		34,001		70,123
Operating income		16,645		22,182		33,746
Interest expense(1)		(4,815)		(18,406)		(24,573)
Gain/loss on extinguishment of debt(1)		(1,790)		29,336		—
Interest income		2,176		2,176		2,176
Other income		313		427		5
Income from discontinued operations before gain on sale		12,529		35,715		11,354
Gain on sale of discontinued operations		56,146		23,782		—
INCOME FROM DISCONTINUED OPERATIONS	$	68,675	$	59,497	$	11,354
Segment Data
Healthcare	$	68,362	$	8,101	$	9,008
All other		313		51,396		2,346
Total	$	68,675	$	59,497	$	11,354

(1) Interest expense includes $4.7 million and approximately $528,000 for fiscal years ended April 30, 2016 and 2015, respectively, of default interest related to a$122.6 million non-recourse loan. Gain on extinguishment of debt in the fiscal year ended April 30, 2016 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.

	(in thousands)
	2017		2016		2015
Property Sale Data
Sales price		239,436	$	373,460	$	—
Net book value and sales costs		(183,290)		(349,678)		—
Gain on sale of discontinued operations		56,146	$	23,782	$	—

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)
	April 30, 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	$	21,332	$	189,900
Receivable arising from straight-lining of rents		2,283		9,805
Accounts receivable		—		1,707
Prepaid and other assets		—		43
Tax, insurance and other escrow		—		670
Property and equipment		—		479
Goodwill		14		18
Total major classes of assets of the discontinued operations		23,629		202,622
Other assets included in the disposal group classified as held for sale		14,079		17,915
Total assets of the disposal group classified as held for sale on the balance sheet	$	37,708	$	220,537
Carrying amounts of major classes of liabilities included as part of discontinued operations
Accounts payable and accrued expenses	$	52	$	810
Mortgages payable		16,226		67,940
Other		7,900		7,900
Total major classes of liabilities of the discontinued operations		24,178		76,650
Other liabilities included in the disposal group classified as held for sale		5,884		838
Total liabilities of the disposal group classified as held for sale on the balance sheet	$	30,062	$	77,488