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 determined that our strategic decision to exit our healthcare segment met the criteria for discontinued operations, and we consequently classified 27 property dispositions as discontinued operations during the fiscal year ended April 30, 2018. We classified no dispositions as discontinued operations during the transition period ended December 31, 2018 and 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. In fiscal year 2016, 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. 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 transition period ended December 31, 2018 and the fiscal years ended April 30, 2018, 2017, and 2016.



	(in thousands)
	Period Ended		Year Ended
	December 31, 2018		April 30, 2018			April 30, 2017			April 30, 2016
REVENUE
Real estate rentals	$	—	$	19,744		$	43,984		$	69,623
Tenant reimbursement	—		11,650			16,110			23,434
TRS senior housing revenue	—		—			3,218			3,955
TOTAL REVENUE	—		31,394			63,312			97,012
EXPENSES
Property operating expenses, excluding real estate taxes	—		6,350			9,051			17,470
Real estate taxes	—		5,191			6,848			11,611
Property management expense	—		206			574			1,957
Depreciation and amortization	—		8,445			10,772			24,725
Impairment of real estate investments	—		—			—			440
TRS senior housing expenses	—		—			3,113			3,366
TOTAL EXPENSES	—		20,192			30,358			59,569
Operating income (loss)	—		11,202			32,954			37,443
Interest expense⁽¹⁾	—		(4,172		)	(11,628		)	(25,757		)
Gain (loss) on extinguishment of debt⁽¹⁾	—		(6,508		)	(3,238		)	29,336
Interest income	—		661			2,179			2,179
Other income	—		73			340			437
Income (loss) from discontinued operations before gain on sale	—		1,256			20,607			43,638
Gain (loss) on sale of discontinued operations	570		163,567			56,146			23,782
INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	570	$	164,823		$	76,753		$	67,420
Segment Data
All other	$	570	$	164,823		$	76,753		$	67,420
Total	$	570	$	164,823		$	76,753		$	67,420

(1)

Interest expense includes $4.7 million for the fiscal year ended April 30, 2016, 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)
	Period Ended	Year Ended
	12/31/2018	April 30, 2018			April 30, 2017			April 30, 2016
Property Sale Data
Sales price	—	$	437,652		$	239,436		$	373,460
Net book value and sales costs	—	(274,085		)	(183,290		)	(349,678		)
Gain on sale of discontinued operations	—	$	163,567		$	56,146		$	23,782

As of December 31, 2018 and April 30, 2018, we had no assets or liabilities classified as held for sale. 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 Consolidated Balance Sheets at April 30, 2017:




	April 30, 2017
Carrying amounts of major classes of assets included as part of discontinued operations
Property owned and intangible assets, net of accumulated depreciation and amortization	$	255,466
Restricted cash	728
Other Assets	12,750
Total major classes of assets of the discontinued operations	268,944
Other assets included in the disposal group classified as held for sale	14,079
Total assets of the disposal group classified as held for sale on the balance sheet	$	283,023

Carrying amounts of major classes of liabilities included as part of discontinued operations
Accounts payable and accrued expenses	$	4,835
Mortgages payable	112,208
Other	7,977
Total major classes of liabilities of the discontinued operations	125,020
Other liabilities included in the disposal group classified as held for sale	5,884
Total liabilities of the disposal group classified as held for sale on the balance sheet	$	130,904