Leases

12 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

Lessee

We lease real estate and equipment under various operating and finance lease agreements. The leases have remaining terms ranging from approximately one month to 49 years and do not contain any material residual value guarantees or restrictive covenants. Rental payments under these lease agreements are fixed and/or variable based on periodic adjustments for inflation, performance, usage or appraised land values. Variable components of lease payments are not included in the calculation of right-of-use assets and liabilities.

Our lease arrangements contain both lease and non-lease components. For instances in which we are a lessee, we account for both lease and non-lease components as a single lease component for substantially all classes of underlying assets (primarily real estate and equipment). Leases with an expected or initial term of 12 months or less are not recorded on our Balance Sheets.

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

	September 30, 2022
Weighted average remaining lease terms (years):
Operating leases	21
Finance leases	18
Weighted average discount rates:
Operating leases	7.84	%
Finance leases	6.88	%

The components of lease expense are as follows:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Operating lease expense	$	44,065	$	45,458	$	38,414
Short-term lease expense	43,642		33,438		27,121
Variable lease expense	18,133		17,427		12,922
Finance lease expense:
Amortization of right-of-use assets	6,494		4,459		2,401
Interest on lease liabilities	8,740		5,059		1,547
Sublease income (1)	(38,298)		(23,147)		(20,791)
Total	$	82,776	$	82,694	$	61,614

_________

(1)Represents income earned from the rental of hotel, convention or retail space at the 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:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Payments on operating lease obligations	$	38,842	$	20,747	$	22,844
Payments for interest on finance lease obligations	4,714		345		889
Payments on finance lease obligations	5,553		1,145		1,298
Total	$	49,109	$	22,237	$	25,031

Maturities of lease obligations are as follows:

(in thousands)	Operating Leases		Finance Leases
Fiscal years:
2023	$	36,788	$	12,790
2024	38,133		12,354
2025	37,555		11,849
2026	37,827		11,658
2027	38,087		11,240
Thereafter	707,304		148,971
Total future lease payments	895,694		208,862
Amounts representing interest	(533,082)		(96,744)
Residual values	—		350
Present value of future lease payments	362,612		112,468
Current portion of lease obligations	(5,473)		(4,491)
Lease obligations, net of current portion	$	357,139	$	107,977

Lessor

We lease space at our facilities to third parties. Remaining lease terms for these non-cancelable operating leases range from approximately one month to 10 years. Rental income under these lease agreements is fixed and/or variable based on percentage of tenant sales or periodic adjustments for inflation. Rental income is recorded within hotel and retail, entertainment and other revenues. For instances in which we are the lessor, and the class of underlying asset represents retail space, we account for both the lease and non-lease components, such as common area maintenance and tenant services, as a single lease component. In all other instances, non-lease components are accounted for separately in accordance with applicable guidance, most commonly ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. 

Rental income consists of the following:

	For the Fiscal Years Ended
	September 30, 2022				September 30, 2021				September 30, 2020
(in thousands)	Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other
Fixed rent	$	66,375	$	6,799	$	53,904	$	5,226	$	42,473	$	7,160
Variable rent	—		10,885		—		5,314		—		4,176
Total	$	66,375	$	17,684	$	53,904	$	10,540	$	42,473	$	11,336

Fixed rental income that we expect to earn under non-cancelable operating leases, exclusive of amounts under contingent rent escalation clauses, is as follows:

(in thousands)	Fixed Rental Income
Fiscal years:
2023	$	6,781
2024	5,978
2025	4,990
2026	4,612
2027	3,220
Thereafter	8,984
Total	$	34,565

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

(in thousands)	September 30, 2022		September 30, 2021
Property and equipment, at cost	$	487,180	$	491,673
Accumulated depreciation	(233,344)		(218,873)
Property and equipment, net	$	253,836	$	272,800

Leases

Leases

Lessee

We lease real estate and equipment under various operating and finance lease agreements. The leases have remaining terms ranging from approximately one month to 49 years and do not contain any material residual value guarantees or restrictive covenants. Rental payments under these lease agreements are fixed and/or variable based on periodic adjustments for inflation, performance, usage or appraised land values. Variable components of lease payments are not included in the calculation of right-of-use assets and liabilities.

Our lease arrangements contain both lease and non-lease components. For instances in which we are a lessee, we account for both lease and non-lease components as a single lease component for substantially all classes of underlying assets (primarily real estate and equipment). Leases with an expected or initial term of 12 months or less are not recorded on our Balance Sheets.

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

	September 30, 2022
Weighted average remaining lease terms (years):
Operating leases	21
Finance leases	18
Weighted average discount rates:
Operating leases	7.84	%
Finance leases	6.88	%

The components of lease expense are as follows:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Operating lease expense	$	44,065	$	45,458	$	38,414
Short-term lease expense	43,642		33,438		27,121
Variable lease expense	18,133		17,427		12,922
Finance lease expense:
Amortization of right-of-use assets	6,494		4,459		2,401
Interest on lease liabilities	8,740		5,059		1,547
Sublease income (1)	(38,298)		(23,147)		(20,791)
Total	$	82,776	$	82,694	$	61,614

_________

(1)Represents income earned from the rental of hotel, convention or retail space at the 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:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Payments on operating lease obligations	$	38,842	$	20,747	$	22,844
Payments for interest on finance lease obligations	4,714		345		889
Payments on finance lease obligations	5,553		1,145		1,298
Total	$	49,109	$	22,237	$	25,031

Maturities of lease obligations are as follows:

(in thousands)	Operating Leases		Finance Leases
Fiscal years:
2023	$	36,788	$	12,790
2024	38,133		12,354
2025	37,555		11,849
2026	37,827		11,658
2027	38,087		11,240
Thereafter	707,304		148,971
Total future lease payments	895,694		208,862
Amounts representing interest	(533,082)		(96,744)
Residual values	—		350
Present value of future lease payments	362,612		112,468
Current portion of lease obligations	(5,473)		(4,491)
Lease obligations, net of current portion	$	357,139	$	107,977

Lessor

We lease space at our facilities to third parties. Remaining lease terms for these non-cancelable operating leases range from approximately one month to 10 years. Rental income under these lease agreements is fixed and/or variable based on percentage of tenant sales or periodic adjustments for inflation. Rental income is recorded within hotel and retail, entertainment and other revenues. For instances in which we are the lessor, and the class of underlying asset represents retail space, we account for both the lease and non-lease components, such as common area maintenance and tenant services, as a single lease component. In all other instances, non-lease components are accounted for separately in accordance with applicable guidance, most commonly ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. 

Rental income consists of the following:

	For the Fiscal Years Ended
	September 30, 2022				September 30, 2021				September 30, 2020
(in thousands)	Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other
Fixed rent	$	66,375	$	6,799	$	53,904	$	5,226	$	42,473	$	7,160
Variable rent	—		10,885		—		5,314		—		4,176
Total	$	66,375	$	17,684	$	53,904	$	10,540	$	42,473	$	11,336

Fixed rental income that we expect to earn under non-cancelable operating leases, exclusive of amounts under contingent rent escalation clauses, is as follows:

(in thousands)	Fixed Rental Income
Fiscal years:
2023	$	6,781
2024	5,978
2025	4,990
2026	4,612
2027	3,220
Thereafter	8,984
Total	$	34,565

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

(in thousands)	September 30, 2022		September 30, 2021
Property and equipment, at cost	$	487,180	$	491,673
Accumulated depreciation	(233,344)		(218,873)
Property and equipment, net	$	253,836	$	272,800

Leases

Leases

Lessee

We lease real estate and equipment under various operating and finance lease agreements. The leases have remaining terms ranging from approximately one month to 49 years and do not contain any material residual value guarantees or restrictive covenants. Rental payments under these lease agreements are fixed and/or variable based on periodic adjustments for inflation, performance, usage or appraised land values. Variable components of lease payments are not included in the calculation of right-of-use assets and liabilities.

Our lease arrangements contain both lease and non-lease components. For instances in which we are a lessee, we account for both lease and non-lease components as a single lease component for substantially all classes of underlying assets (primarily real estate and equipment). Leases with an expected or initial term of 12 months or less are not recorded on our Balance Sheets.

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

	September 30, 2022
Weighted average remaining lease terms (years):
Operating leases	21
Finance leases	18
Weighted average discount rates:
Operating leases	7.84	%
Finance leases	6.88	%

The components of lease expense are as follows:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Operating lease expense	$	44,065	$	45,458	$	38,414
Short-term lease expense	43,642		33,438		27,121
Variable lease expense	18,133		17,427		12,922
Finance lease expense:
Amortization of right-of-use assets	6,494		4,459		2,401
Interest on lease liabilities	8,740		5,059		1,547
Sublease income (1)	(38,298)		(23,147)		(20,791)
Total	$	82,776	$	82,694	$	61,614

_________

(1)Represents income earned from the rental of hotel, convention or retail space at the 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:

	For the Fiscal Years Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Payments on operating lease obligations	$	38,842	$	20,747	$	22,844
Payments for interest on finance lease obligations	4,714		345		889
Payments on finance lease obligations	5,553		1,145		1,298
Total	$	49,109	$	22,237	$	25,031

Maturities of lease obligations are as follows:

(in thousands)	Operating Leases		Finance Leases
Fiscal years:
2023	$	36,788	$	12,790
2024	38,133		12,354
2025	37,555		11,849
2026	37,827		11,658
2027	38,087		11,240
Thereafter	707,304		148,971
Total future lease payments	895,694		208,862
Amounts representing interest	(533,082)		(96,744)
Residual values	—		350
Present value of future lease payments	362,612		112,468
Current portion of lease obligations	(5,473)		(4,491)
Lease obligations, net of current portion	$	357,139	$	107,977

Lessor

We lease space at our facilities to third parties. Remaining lease terms for these non-cancelable operating leases range from approximately one month to 10 years. Rental income under these lease agreements is fixed and/or variable based on percentage of tenant sales or periodic adjustments for inflation. Rental income is recorded within hotel and retail, entertainment and other revenues. For instances in which we are the lessor, and the class of underlying asset represents retail space, we account for both the lease and non-lease components, such as common area maintenance and tenant services, as a single lease component. In all other instances, non-lease components are accounted for separately in accordance with applicable guidance, most commonly ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. 

Rental income consists of the following:

	For the Fiscal Years Ended
	September 30, 2022				September 30, 2021				September 30, 2020
(in thousands)	Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other
Fixed rent	$	66,375	$	6,799	$	53,904	$	5,226	$	42,473	$	7,160
Variable rent	—		10,885		—		5,314		—		4,176
Total	$	66,375	$	17,684	$	53,904	$	10,540	$	42,473	$	11,336

Fixed rental income that we expect to earn under non-cancelable operating leases, exclusive of amounts under contingent rent escalation clauses, is as follows:

(in thousands)	Fixed Rental Income
Fiscal years:
2023	$	6,781
2024	5,978
2025	4,990
2026	4,612
2027	3,220
Thereafter	8,984
Total	$	34,565

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

(in thousands)	September 30, 2022		September 30, 2021
Property and equipment, at cost	$	487,180	$	491,673
Accumulated depreciation	(233,344)		(218,873)
Property and equipment, net	$	253,836	$	272,800