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Leases (Tables)

6 Months Ended

Mar. 31, 2020

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

	March 31, 2020
Weighted average remaining lease terms (years):
Operating leases		23
Finance leases		18
Weighted average discount rates:
Operating leases (1)		8.07	%
Finance leases		5.02	%

(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			For the
	Three Months Ended			Six Months Ended
	March 31, 2020			March 31, 2020
Operating lease expense	$	9,375		$	18,976
Short-term lease expense		7,594			17,550
Variable lease expense		3,198			6,807
Finance lease expense:
Amortization of ROU assets		606			1,213
Interest on lease liabilities		391			788
Less: sublease income (1)		(7,121	)		(16,725	)
Total	$	14,043		$	28,609

(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
	Six Months Ended
Cash paid for amounts included in the measurement of lease liabilities:	March 31, 2020
Payments on operating lease obligations	$	16,434
Payments for interest on finance lease obligations		787
Payments on finance lease obligations		828
Total	$	18,049

Schedule of Maturities of ROU Lease Obligations

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

Fiscal years:	Operating Leases			Finance Leases
2020 (1)	$	15,340		$	1,694
2021		29,064			2,977
2022		29,651			2,973
2023		29,158			2,787
2024		29,226			2,421
Thereafter		693,813			30,730
Total future lease payments		826,252			43,582
Less: amounts representing interest		(481,702	)		(14,644	)
Plus: residual values		—			327
Present value of future lease payments		344,550			29,265
Less: current portion of lease obligations		(8,206	)		(1,752	)
Lease obligations, net of current portion	$	336,344		$	27,513

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

Schedule of Lease Income

Lease income consists of the following (in thousands):

	For the Three Months Ended March 31, 2020				For the Six Months Ended March 31, 2020
	Hotel		Retail, Entertainment and Other		Hotel		Retail, Entertainment and Other
Fixed rent	$	11,355	$	1,856	$	27,098	$	4,665
Variable rent		—		1,477		—		3,131
Total	$	11,355	$	3,333	$	27,098	$	7,796

Schedule of Future Fixed Rental Income

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

Fiscal years:	Operating Leases Fixed Rental Income
2020 (1)	$	3,158
2021		7,318
2022		4,881
2023		4,309
2024		3,830
Thereafter		9,138
Total	$	32,634

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

Schedule of Leased to Third Parties under Operating Leases within Property and Equipment, Net

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):

	March 31, 2020
Property and equipment, at cost	$	486,430
Less: accumulated depreciation		(190,047	)
Property and equipment, net	$	296,383

Schedule of Minimum Future Capital Lease Payments under Prior Accounting Standards

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

Fiscal years:	Capital Leases
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 Minimum Future Rental Income Expected to Earn under Non-Cancelable Leases under Prior Accounting Standards

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

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

Schedule of Minimum Future Rental Payments Expected to Incur under Non-Cancelable Leases and Subleases under Prior Accounting Standards

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

	Operating Leases
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