RELATED PARTY TRANSACTIONS:

Distributions

Distributions to the Tribe totaled $15.0 million and $13.3 million for the three months ended June 30, 2017 and 2016, respectively, and $39.0 million and $34.5 million for the nine months ended June 30, 2017 and 2016, respectively.

Services

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 and comprehensive income as follows (in millions):



	For the Three Months Ended				For the Nine Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Gaming	$	1.1	$	0.9	$	3.3	$	2.9
Advertising, general and administrative	5.3		4.7		16.0		14.6
Corporate	1.5		1.4		4.6		4.3
Total	$	7.9	$	7.0	$	23.9	$	21.8

MGE purchases most of its utilities, including electricity, gas, water and waste water services, from an instrumentality of the Tribe, the Mohegan Tribal Utility Authority. MGE incurred costs for such utilities totaling $3.8 million and $4.2 million for the three months ended June 30, 2017 and 2016, respectively, and $12.7 million and $12.0 million for the nine months ended June 30, 2017 and 2016, respectively.

Interest Expense on Promissory Notes

MGE incurred interest expense associated with borrowings from the Tribe totaling $364,000 for the three months ended June 30, 2016 and $32,000 and $1.5 million for the nine months ended June 30, 2017 and 2016, respectively. MGE did not incur any interest expense associated with borrowings from the Tribe for the three months ended June 30, 2017.

Leases

MGE leases the land on which Mohegan Sun is located from the Tribe under a long-term lease agreement. In July 2008, MGE 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 MGE to make monthly payments equaling $75,000 until maturity on June 30, 2018. MGE 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, MGE entered into a sublease agreement with the Mohegan Tribal Finance Authority, a subsidiary of the Tribe, 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. MGE 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. MGE 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. MGE incurred lease expenses associated with these subleases totaling $2.4 million and $6.4 million for the three months and nine months ended June 30, 2017, respectively. These expenses were recorded within hotel operating costs and expenses in the accompanying condensed consolidated statements of income and comprehensive income.

Due from Mohegan Tribe

As of June 30, 2017 and September 30, 2016, due from Mohegan Tribe consisted primarily of a long-term loan receivable due from the Tribe. MGE, together with the Tribe, offer a benefit plan for certain eligible employees (the “Mohegan Benefit Plan”). The Mohegan Benefit Plan is sponsored by the Tribe for the benefit of participants who authorize the purchase of life insurance policies as a means of providing certain life insurance benefits to the participants and their spouses as joint insured. The life insurance policies are established on the life of each participant, and each premium contribution provided by MGE to the Tribe on behalf of the participant is treated as a loan from MGE to the Tribe and, in turn, as a loan from the Tribe to the participant, for legal, tax and financial reporting purposes. The loans from MGE to the Tribe are recorded as a long-term loan receivable. This loan receivable is required to be repaid by the Tribe. Accordingly, the Tribe retains an interest in each participant’s death benefit from the life insurance policies that will provide MGE with full repayment of the accumulated loan receivable at the death of the applicable participants insured under the life insurance policies.

Due to Mohegan Tribe

As of June 30, 2017, due to Mohegan Tribe consisted primarily of outstanding lease payments related to the aforementioned Earth Hotel Tower and connector. As of September 30, 2016, due to Mohegan Tribe consisted primarily of outstanding payments related to governmental and administrative services.

Other

As of June 30, 2017 and September 30, 2016, funds loaned, including accrued interest, to Salishan Company, LLC and its owner in connection with the Cowlitz Project totaled $4.6 million and $2.8 million, respectively.