RELATED PARTY TRANSACTIONS

6 Months Ended

Mar. 31, 2017

RELATED PARTY TRANSACTIONS:

Distributions to the Tribe totaled $12.0 million and $10.6 million for the three months ended March 31, 2017 and 2016, respectively, and $24.0 million and $21.2 million for the six months ended March 31, 2017 and 2016, respectively.

The Tribe provides certain governmental and administrative services in connection with the operation of Mohegan Sun. Expenses incurred for such services were recorded within operating costs and expenses in the accompanying condensed consolidated statements of income (loss) and comprehensive income (loss) as follows (in millions):



	For the Three Months Ended				For the Six Months Ended
	March 31, 2017		March 31, 2016		March 31, 2017		March 31, 2016
Gaming	$	1.1	$	1.0	$	2.2	$	2.0
Advertising, general and administrative	5.4		4.9		10.7		9.9
Corporate	1.5		1.4		3.1		2.9
Total	$	8.0	$	7.3	$	16.0	$	14.8

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 $4.7 million and $4.0 million for the three months ended March 31, 2017 and 2016, respectively, and $8.9 million and $7.8 million for the six months ended March 31, 2017 and 2016, respectively.

The Authority incurred interest expense associated with borrowings from the Mohegan Tribe totaling $574,000 for the three months ended March 31, 2016 and $32,000 and $1.2 million for the six months ended March 31, 2017 and 2016, respectively. The Authority did not incur any interest expense associated with borrowings from the Mohegan Tribe for the three months ended March 31, 2017.

The Authority leases the land on which Mohegan Sun is located from the Tribe under a long-term lease agreement. In July 2008, the Authority entered into an additional land lease agreement with the Tribe relating to property located adjacent to the Tribe's reservation that is utilized by Mohegan Sun for employee parking. This agreement required the Authority to make monthly payments equaling $75,000 until maturity on June 30, 2018. The Authority classified this lease as a capital lease for financial reporting purposes due to the existence of a bargain purchase option at the expiration of the lease. This land lease was paid off and terminated on October 14, 2016 and the property was merged into the land under the long-term lease agreement.

In March 2015, the Authority entered into a sublease agreement with the Mohegan Tribal Finance Authority to sublease the Earth Hotel Tower and related improvements for the purpose of operating the hotel on a triple net basis for a term of 28 years and 4 months. The Authority also entered into a similar sublease agreement with the Tribe to sublease a related connector which connects the Earth Hotel Tower to the Sky Hotel lobby. Rental payments under these subleases commenced with the opening of the Earth Hotel Tower, which occurred in November 2016. The Authority classified these subleases as operating leases for financial reporting purposes in accordance with authoritative guidance issued by the FASB pertaining to the accounting for leases. The Authority incurred lease expenses associated with these subleases totaling $2.3 million and $4.0 million for the three months and six months ended March 31, 2017, respectively. These expenses were recorded within hotel operating costs and expenses in the accompanying condensed consolidated statements of income (loss) and comprehensive income (loss).

As of March 31, 2017 and September 30, 2016, funds loaned, including accrued interest, to Salishan Company, LLC and its owner in connection with the Cowlitz Project totaled $4.0 million and $2.8 million, respectively.