RELATED PARTY TRANSACTIONS

6 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS:

Distributions to the Tribe totaled $10.0 million and $20.0 million for each of the three months and six months ended March 31, 2015 and 2014, respectively.

The Tribe provides certain governmental and administrative services in connection with the operation of Mohegan Sun. The Authority incurred expenses for such services totaling $7.1 million and $7.3 million for the three months ended March 31, 2015 and 2014, respectively, and $14.2 million and $14.3 million for the six months ended March 31, 2015 and 2014, respectively.

The Authority purchases most of its utilities, including electricity, gas, water and waste water services, from an instrumentality of the Tribe, the Mohegan Tribal Utility Authority. The Authority incurred costs for such utilities totaling $5.1 million and $6.3 million for the three months ended March 31, 2015 and 2014, respectively, and $9.4 million and $10.8 million for the six months ended March 31, 2015 and 2014, respectively.

The Authority incurred interest expense associated with borrowings from the Mohegan Tribe totaling $523,000 and $569,000 for the three months ended March 31, 2015 and 2014, respectively, and $1.1 million and $1.2 million for the six months ended March 31, 2015 and 2014, respectively.

The Authority leases the land on which Mohegan Sun is located from the Tribe under a long-term lease agreement. On February 27, 2015, the Authority entered into a fourth amendment to the land lease pursuant to which it released from the land lease an approximately 1.2-acre site to be used by the Tribe to finance, develop and own, through MTFA, an approximately 400-room hotel and related improvements. In connection with this transaction, effective March 5, 2015, the Authority entered into a sublease agreement with MTFA to sublease the site and the completed hotel and related improvements for the purpose of operating the hotel on a triple net basis for a term of 28 years and 4 months, commencing upon the completion of the project. Rental payments under the sublease agreement also will commence upon the completion of the project. Completion and opening of the project is anticipated to occur in the fall of 2016. The Authority classified the sublease as an operating lease for financial reporting purposes in accordance with authoritative guidance issued by the FASB pertaining to the accounting for leases.

Minimum future rental expense that the Authority expects to incur under the sublease agreement is as follows (in thousands):

	Fiscal Years Ending September 30,
	2015		2016		2017		2018		2019		Thereafter		Total
Minimum future rental expense	$	—	$	—	$	6,327	$	6,908	$	7,011	$	224,682	$	244,928