LEASES (Tables)

3 Months Ended

Dec. 31, 2019

Minimum future rental payments that the Company expected to incur under non-cancelable leases and subleases was as follows (in thousands):



Fiscal years:	Minimum Future Rental Payments		Minimum Future Sublease Income			Total
2020	$	32,504	$	(1,709	)	$	30,795
2021	30,376		(1,428		)	28,948
2022	30,651		(1,114		)	29,537
2023	30,473		(987		)	29,486
2024	30,602		(1,025		)	29,577
Thereafter	715,910		(843		)	715,067
Total	$	870,516	$	(7,106	)	$	863,410

Information related to weighted average lease terms and discount rates is as follows:



	December 31, 2019
Weighted average remaining lease terms (years):
Operating leases	23
Finance leases	18
Weighted average discount rates:
Operating leases (1)	7.98	%
Finance leases	5.01	%

_________


(1)	The weighted average discount rates for existing operating leases were established upon the adoption of ASU 2016-02 on October 1, 2019.

The components of lease expense are as follows (in thousands):



	For the
	Three Months Ended
	December 31, 2019
Operating lease expense	$	9,601
Short-term lease expense	9,956
Variable lease expense	3,609
Finance lease expense:
Amortization of ROU assets	607
Interest on lease liabilities	397
Less: sublease income (1)	(9,604		)
Total	$	14,566

_________


(1)	Represents income earned by the Company from the rental of hotel, convention or retail space at the MGE Niagara Resorts and the Earth Hotel Tower at Mohegan Sun, both of which are leased properties.

Supplemental cash flow information related to lease liabilities is as follows (in thousands):



	For the
	Three Months Ended
	December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Payments on operating lease obligations	$	8,385
Payments for interest on finance lease obligations	397
Payments on finance lease obligations	404
Total	$	9,186

Operating lease liability

Maturities of ROU operating lease obligations are as follows (in thousands):



	Operating Leases			Finance Leases
Fiscal years:
2020 (1)	$	24,415		$	2,502
2021	30,922			3,131
2022	31,282			3,130
2023	31,047			2,934
2024	31,115			2,568
Thereafter	734,067			33,442
Total future lease payments	882,848			47,707
Less: amounts representing interest	(513,106		)	(16,197		)
Plus: residual values	—			327
Present value of future lease payments	369,742			31,837
Less: current portion of lease obligations	(9,894		)	(1,794		)
Lease obligations, net of current portion	$	359,848		$	30,043

_________


(1)	Represents payment obligations from January 1, 2020 to September 30, 2020.

Finance lease liability

Maturities of ROU operating lease obligations are as follows (in thousands):



	Operating Leases			Finance Leases
Fiscal years:
2020 (1)	$	24,415		$	2,502
2021	30,922			3,131
2022	31,282			3,130
2023	31,047			2,934
2024	31,115			2,568
Thereafter	734,067			33,442
Total future lease payments	882,848			47,707
Less: amounts representing interest	(513,106		)	(16,197		)
Plus: residual values	—			327
Present value of future lease payments	369,742			31,837
Less: current portion of lease obligations	(9,894		)	(1,794		)
Lease obligations, net of current portion	$	359,848		$	30,043

_________


(1)	Represents payment obligations from January 1, 2020 to September 30, 2020.

Schedule of rent expense

Lease income consists of the following (in thousands):



	For the Three Months Ended December 31, 2019
	Hotel		Retail, Entertainment and Other
Fixed rent	$	15,743	$	3,075
Variable rent	—		1,388
Total	$	15,743	$	4,463

Schedule of lease payments to be received

Future fixed rental income that the Company expects to earn under non-cancelable operating leases, exclusive of amounts under contingent escalated rent clauses, are as follows (in thousands):



Fiscal years:
2020 (1)	$	7,120
2021	8,211
2022	5,375
2023	4,748
2024	4,180
Thereafter	9,440
Total	$	39,074

_________


(1)	Represents future fixed rental income from January 1, 2020 to September 30, 2020.

Schedule of property and equipment

The portions of Mohegan Sun, including the Sky Hotel Tower and the Earth Expo & Convention Center, and Mohegan Sun Pocono that are leased to third parties under operating leases are recorded within property and equipment, net as follows (in thousands):



	December 31, 2019
Property and equipment, at cost	$	492,612
Less: accumulated depreciation	(197,212		)
Property and equipment, net	$	295,400

Schedule of future minimum capital lease payments

Minimum future capital lease payments were as follows (in thousands):



Fiscal years:
2020	$	2,571
2021	2,598
2022	2,598
2023	2,548
2024	2,251
Thereafter	32,832
Total minimum future capital lease payments	45,398
Less: amounts representing interest	(16,031		)
Plus: residual values	327
Present value of capital lease obligations	29,694
Less: current portion of capital lease obligations	(1,133		)
Capital lease obligations, net of current portion	$	28,561

Schedule of future minimum rental payments

Minimum future rental income that the Company expected to earn under non-cancelable leases was as follows (in thousands):



Fiscal years:
2020	$	4,808
2021	4,038
2022	2,485
2023	2,092
2024	2,011
Thereafter	5,734
Total	$	21,168

Schedule of future rental payments

Minimum future rental payments that the Company expected to incur under non-cancelable leases and subleases was as follows (in thousands):



Fiscal years:	Minimum Future Rental Payments		Minimum Future Sublease Income			Total
2020	$	32,504	$	(1,709	)	$	30,795
2021	30,376		(1,428		)	28,948
2022	30,651		(1,114		)	29,537
2023	30,473		(987		)	29,486
2024	30,602		(1,025		)	29,577
Thereafter	715,910		(843		)	715,067
Total	$	870,516	$	(7,106	)	$	863,410