UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

_____________________________________



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~December 31, 2019



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 033-80655

__________________________________________

MOHEGAN TRIBAL GAMING AUTHORITY

(Exact name of registrant as specified in its charter)

__________________________________________



Not Applicable		06-1436334
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

One Mohegan Sun Boulevard, Uncasville, CT		06382
(Address of principal executive offices)		(Zip Code)

(860) 862-8000

(Registrant’s telephone number, including area code)

___________________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x*



*	The registrant is a voluntary filer of reports required to be filed by certain companies under Sections 13 or 15(d) of the Securities Exchange Act of 1934 and has filed all reports that would have been required during the preceding 12 months had it been subject to such filing requirements.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

~~Securities registered pursuant to Section 12(b) of the Act:~~



~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each~~ ~~exchange on which registered~~
~~None~~	~~None~~	~~None~~

MOHEGAN TRIBAL GAMING AUTHORITY

INDEX TO FORM 10-Q



		Page Number
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of ~~March~~December 31, 2019 and September 30, ~~2018~~2019 (unaudited)	3

	Condensed Consolidated Statements of Income ~~(Loss)~~ and Comprehensive Income ~~(Loss)~~ for the Three Months ~~and Six Months~~ Ended ~~March~~December 31, 2019 and 2018 (unaudited)	4

	Condensed Consolidated Statements of Changes in Capital for the Three Months ~~and Six Months~~ Ended ~~March~~December 31, 2019 and 2018 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~March~~December 31, 2019 and 2018 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1618

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2124

Item 4.	Controls and Procedures	2124

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	2225

Item 1A.	Risk Factors	2225

Item 6.	Exhibits	2326

Signatures.	Mohegan Tribal Gaming Authority	2427

PART I. FINANCIAL INFORMATION


Item 1.	Financial Statements

MOHEGAN TRIBAL GAMING AUTHORITY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

March 31, 2019 September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents $ 91,396
$ 103,944
Restricted cash and cash equivalents 1,314
1,036
Accounts receivable, net of allowance for doubtful accounts of $11,477 and $12,265, respectively 43,711
44,532
Inventories 14,772
15,357
Notes receivable 7,689
109,859
Other current assets 27,156
22,129
Total current assets 186,038
296,857
Restricted cash and cash equivalents 200,105
129,646
Property and equipment, net 1,363,037
1,395,369
Goodwill 39,459
39,459
Other intangible assets, net 424,023
403,495
Notes receivable —
1,857
Other assets, net 43,881
45,436
Total assets $ 2,256,543
$ 2,312,119
LIABILITIES AND CAPITAL
Current liabilities:
Current portion of long-term debt $ 76,809
$ 73,232
Trade payables 16,367
14,704
Accrued payroll 45,849
54,380
Construction payables 12,808
10,747
Accrued interest payable 19,588
19,418
Other current liabilities 165,741
123,303
Total current liabilities 337,162
295,784
Long-term debt, net of current portion 1,711,341
1,740,923
Other long-term liabilities 19,313
4,618
Total liabilities 2,067,816
2,041,325
Commitments and Contingencies

Capital:
Retained earnings 174,053
250,707
Accumulated other comprehensive income 7,016
11,062
Total capital attributable to Mohegan Tribal Gaming Authority 181,069
261,769
Non-controlling interests 7,658
9,025
Total capital 188,727
270,794
Total liabilities and capital $ 2,256,543
$ 2,312,119

On October 1, 2018, the Company adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), on a modified retrospective basis. Please refer to Note 2 for further information.



	December 31, 2019		September 30, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	139,164	$	130,138
Restricted cash and cash equivalents	6,706		4,960
Accounts receivable, net of allowance for doubtful accounts of $12,007 and $11,715, respectively	55,388		52,764
Inventories	17,794		18,248
Due from Ontario Lottery and Gaming Corporation	11,905		10,946
Casino Operating and Services Agreement customer contract asset	471		3,004
Other current assets	57,319		47,276
Total current assets	288,747		267,336
Restricted cash and cash equivalents	136,014		145,631
Property and equipment, net	1,444,019		1,520,687
Right-of-use operating lease assets	361,036		—
Other intangible assets, net	456,672		455,265
Casino Operating and Services Agreement customer contract asset, net of current portion	95,208		50,192
Notes receivable	2,514		2,514
Other assets, net	71,314		69,971
Total assets	$	2,855,524	$	2,511,596
LIABILITIES AND CAPITAL
Current liabilities:
Current portion of long-term debt	$	74,266	$	76,909
Current portion of finance lease obligations	1,794		1,133
Current portion of right-of-use operating lease obligations	9,894		—
Trade payables	20,811		16,672
Accrued payroll	48,853		53,225
Construction payables	24,040		11,888
Accrued interest payable	10,070		19,804
Due to Ontario Lottery and Gaming Corporation	38,413		30,662
Other current liabilities	171,585		174,231
Total current liabilities	399,726		384,524
Long-term debt, net of current portion	1,885,752		1,832,248
Finance lease obligations, net of current portion	30,043		28,561
Right-of-use operating lease obligations, net of current portion	359,848		—
Build-to-suit liability	—		90,292
Other long-term liabilities	34,194		38,538
Total liabilities	2,709,563		2,374,163
Commitments and Contingencies
Capital:
Retained earnings	134,205		137,124
Accumulated other comprehensive income (loss)	4,253		(6,633		)
Total capital attributable to Mohegan Tribal Gaming Authority	138,458		130,491
Non-controlling interests	7,503		6,942
Total capital	145,961		137,433
Total liabilities and capital	$	2,855,524	$	2,511,596

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOHEGAN TRIBAL GAMING AUTHORITY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME ~~(LOSS)~~ AND COMPREHENSIVE INCOME ~~(LOSS)~~

(in thousands)

(unaudited)

For the For the For the For the
Three Months Ended Three Months Ended Six Months Ended Six Months Ended
March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
Revenues:
Gaming $ 211,819
$ 288,735
$ 433,754
$ 575,741
Food and beverage 33,508
21,170
68,314
42,990
Hotel 22,005
14,957
44,982
29,864
Retail, entertainment and other 40,365
29,849
80,147
62,737
Gross revenues 307,697
354,711
627,197
711,332
Less-Promotional allowances —
(22,694 ) —
(47,831 )
Net revenues 307,697
332,017
627,197
663,501
Operating costs and expenses:
Gaming, including related party transactions of $702, $1,137, $1,404 and $2,504, respectively 125,970
161,801
254,634
326,116
Food and beverage 26,084
10,180
52,531
20,369
Hotel, including related party transactions of $2,161, $2,161, $4,322 and $4,501, respectively 10,026
6,647
19,829
13,652
Retail, entertainment and other 19,507
9,589
40,269
21,206
Advertising, general and administrative, including related party transactions of $11,484, $10,807, $22,816 and $21,387, respectively 47,112
49,595
96,130
99,972
Corporate, including related party transactions of $1,437, $1,567, $2,834 and $3,272, respectively 12,464
14,090
24,889
26,243
Depreciation and amortization 42,782
19,828
69,872
40,035
Other, net 1,526
4,215
3,447
4,836
Total operating costs and expenses 285,471
275,945
561,601
552,429
Income from operations 22,226
56,072
65,596
111,072
Other income (expense):
Interest income 1,051
3,877
4,490
7,746
Interest expense (35,132 ) (30,806 ) (71,142 ) (59,142 )
Other, net (429 ) (724 ) (520 ) (2,567 )
Total other expense (34,510 ) (27,653 ) (67,172 ) (53,963 )
Net income (loss) (12,284 ) 28,419
(1,576 ) 57,109
(Income) loss attributable to non-controlling interests (74 ) 189
(160 ) 708
Net income (loss) attributable to Mohegan Tribal Gaming Authority (12,358 ) 28,608
(1,736 ) 57,817
Comprehensive income (loss):
Foreign currency translation adjustment (6,204 ) 1,460
(4,305 ) 16,207
Other 44
—
44
—
Other comprehensive income (loss) (6,160 ) 1,460
(4,261 ) 16,207
Other comprehensive (income) loss attributable to non-controlling interests 310
(708 ) 215
(9,026 )
Other comprehensive income (loss) attributable to Mohegan Tribal Gaming Authority (5,850 ) 752
(4,046 ) 7,181
Comprehensive income (loss) attributable to Mohegan Tribal Gaming Authority $ (18,208 ) $ 29,360
$ (5,782 ) $ 64,998



	For the			For the
	Three Months Ended			Three Months Ended
	December 31, 2019			December 31, 2018
Revenues:
Gaming	$	264,269		$	221,935
Food and beverage	50,532			34,806
Hotel	27,589			22,977
Retail, entertainment and other	56,662			39,782
Net revenues	399,052			319,500
Operating costs and expenses:
Gaming, including related party transactions of $755 and $702, respectively	157,188			128,664
Food and beverage	41,693			26,447
Hotel, including related party transactions of $2,161 and $2,161, respectively	11,842			9,803
Retail, entertainment and other	24,986			20,762
Advertising, general and administrative, including related party transactions of $9,566 and $11,332, respectively	74,214			49,018
Corporate, including related party transactions of $2,253 and $1,397, respectively	14,090			12,425
Depreciation and amortization	28,544			27,090
Other, net	3,070			1,921
Total operating costs and expenses	355,627			276,130
Income from operations	43,425			43,370
Other income (expense):
Interest income	751			3,439
Interest expense	(35,356		)	(36,010		)
Other, net	(592		)	(30		)
Total other expense	(35,197		)	(32,601		)
Income before income tax	8,228			10,769
Income tax benefit (provision)	1,196			(61		)
Net income	9,424			10,708
Income attributable to non-controlling interests	(30		)	(86		)
Net income attributable to Mohegan Tribal Gaming Authority	9,394			10,622
Comprehensive income:
Foreign currency translation adjustment	11,417			1,899
Other comprehensive income	11,417			1,899
Other comprehensive income attributable to non-controlling interests	(531		)	(95		)
Other comprehensive income attributable to Mohegan Tribal Gaming Authority	10,886			1,804
Comprehensive income attributable to Mohegan Tribal Gaming Authority	$	20,280		$	12,426

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOHEGAN TRIBAL GAMING AUTHORITY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(in thousands)

(unaudited)

Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Capital Attributable to Mohegan Tribal Gaming Authority
Non-controlling
Interests
Total Capital
Balance, December 31, 2018 $ 203,255
$ 12,866
$ 216,121
$ 13,780
$ 229,901
Net income (loss) (12,358 ) —
(12,358 ) 74
(12,284 )
Foreign currency translation adjustment —
(5,894 ) (5,894 ) (310 ) (6,204 )
Distributions to Mohegan Tribe (12,000 ) —
(12,000 ) —
(12,000 )
Distributions to Mohegan Tribe related to the Cowlitz Project

(730 ) —
(730 ) —
(730 )
Redemption of Mohegan Tribe membership interest in the Cowlitz Project (4,114 ) —
(4,114 ) (5,886 ) (10,000 )
Other —
44
44
—
44
Balance, March 31, 2019 $ 174,053
$ 7,016
$ 181,069
$ 7,658
$ 188,727

Balance, September 30, 2018 $ 250,707
$ 11,062
$ 261,769
$ 9,025
$ 270,794
Cumulative-effect adjustment for the adoption of ASC 606 "Revenue from Contracts with Customers" (41,575 ) —
(41,575 ) —
(41,575 )
Net income (loss) (1,736 ) —
(1,736 ) 160
(1,576 )
Foreign currency translation adjustment —
(4,090 ) (4,090 ) (215 ) (4,305 )
Distributions to Mohegan Tribe (24,000 ) —
(24,000 ) —
(24,000 )
Distributions to Mohegan Tribe related to the Cowlitz Project

(730 ) —
(730 ) —
(730 )
Redemption of Mohegan Tribe membership interest in the Cowlitz Project (4,114 ) —
(4,114 ) (5,886 ) (10,000 )
Redemption of membership interest related to the New England Black Wolves franchise (4,499 ) —
(4,499 ) 4,574
75
Other —
44
44
—
44
Balance, March 31, 2019 $ 174,053
$ 7,016
$ 181,069
$ 7,658
$ 188,727

Balance, December 31, 2017 $ 213,464
$ 7,554
$ 221,018
$ 119,198
$ 340,216
Net income (loss) 28,608
—
28,608
(189 ) 28,419
Foreign currency translation adjustment —
752
752
708
1,460
Share redemption related to Project Inspire —
—
—
(6,147 ) (6,147 )
Distributions to Mohegan Tribe (12,000 ) —
(12,000 ) —
(12,000 )
Distributions to Mohegan Tribe related to the Cowlitz Project

(150 ) —
(150 ) —
(150 )
Balance, March 31, 2018 $ 229,922
$ 8,306
$ 238,228
$ 113,570
$ 351,798

Balance, September 30, 2017 $ 196,645
$ 1,125
$ 197,770
$ 111,399
$ 309,169
Net income (loss) 57,817
—
57,817
(708 ) 57,109
Foreign currency translation adjustment —
7,181
7,181
9,026
16,207
Share redemption related to Project Inspire —
—
—
(6,147 ) (6,147 )
Distributions to Mohegan Tribe (24,000 ) —
(24,000 ) —
(24,000 )
Distributions to Mohegan Tribe related to the Cowlitz Project

(540 ) —
(540 ) —
(540 )
Balance, March 31, 2018 $ 229,922
$ 8,306
$ 238,228
$ 113,570
$ 351,798



	Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Capital Attributable to Mohegan Tribal Gaming Authority			Non-controlling Interests		Total Capital
Balance, September 30, 2019	$	137,124		$	(6,633	)	$	130,491		$	6,942	$	137,433
Net income	9,394			—			9,394			30		9,424
Foreign currency translation adjustment	—			10,886			10,886			531		11,417
Distributions to Mohegan Tribe	(12,000		)	—			(12,000		)	—		(12,000		)
Distributions to Salishan Company, LLC related to the Cowlitz Project	(313		)	—			(313		)	—		(313		)
Balance, December 31, 2019	$	134,205		$	4,253		$	138,458		$	7,503	$	145,961

Balance, September 30, 2018	$	250,707		$	11,062		$	261,769		$	9,025	$	270,794
Cumulative-effect adjustment for the adoption of ASC 606 "Revenue from Contracts with Customers"	(41,575		)	—			(41,575		)	—		(41,575		)
Net income	10,622			—			10,622			86		10,708
Foreign currency translation adjustment	—			1,804			1,804			95		1,899
Distributions to Mohegan Tribe	(12,000		)	—			(12,000		)	—		(12,000		)
Redemption of membership interest related to the New England Black Wolves franchise	(4,499		)	—			(4,499		)	4,574		75
Balance, December 31, 2018	$	203,255		$	12,866		$	216,121		$	13,780	$	229,901

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOHEGAN TRIBAL GAMING AUTHORITY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

~~(unaudited)~~

For the Six Months Ended For the Six Months Ended
March 31, 2019 March 31, 2018
Cash flows provided by operating activities:
Net income (loss) $ (1,576 ) $ 57,109
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization 69,872
40,035
Accretion of discounts 523
1,798
Amortization of discounts and debt issuance costs 9,663
6,227
Provision for losses on receivables 490
1,774
Other, net (357 ) 940
Changes in operating assets and liabilities:
Accounts receivable 304
7,871
Accrued interest on notes receivable related to the Cowlitz Project 72,001
(6,173 )
Inventories 585
(10 )
Other assets (4,921 ) (7,166 )
Trade payables 1,663
(4,269 )
Accrued interest payable 170
3
Other liabilities (4,309 ) 5,645
Net cash flows provided by operating activities 144,108
103,784
Cash flows used in investing activities:
Purchases of property and equipment (36,364 ) (83,667 )
Proceeds from notes receivable related to the Cowlitz Project 32,026
—
Other, net (1,205 ) (3,806 )
Net cash flows used in investing activities (5,543 ) (87,473 )
Cash flows used in financing activities:
Senior secured credit facility borrowings - revolving and line of credit 641,230
651,569
Senior secured credit facility repayments - revolving and line of credit (652,230 ) (590,005 )
Senior secured credit facility repayments - term loans A and B

(37,715 ) (67,206 )
Other borrowings 11,335
9,200
Other repayments (2,784 ) (138 )
Distributions to Mohegan Tribe (24,000 ) (24,000 )
Distributions to Mohegan Tribe related to the Cowlitz Project

(730 ) (540 )
Redemption of Mohegan Tribe membership interest in the Cowlitz Project (10,000 ) —
Other, net (1,776 ) (19 )
Net cash flows used in financing activities (76,670 ) (21,139 )
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 61,895
(4,828 )
Effect of exchange rate on cash, cash equivalents, restricted cash and restricted cash equivalents (3,706 ) 11,611
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 234,626
239,056
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 292,815
$ 245,839
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the condensed consolidated balance sheets:
Cash and cash equivalents $ 91,396
$ 101,060
Restricted cash and cash equivalents, current

1,314
1,339
Restricted cash and cash equivalents, non-current

200,105
143,440
Cash, cash equivalents, restricted cash and restricted cash equivalents $ 292,815
$ 245,839
Supplemental disclosures:
Cash paid for interest $ 61,310
$ 53,119
Non-cash transactions:
Construction payables $ 12,808
$ 13,364
Senior secured credit facility reductions $ 13,295
$ —
Payment by third-party for iGame license $ 8,000
$ —
Conversion of Redemption Liability to Redemption Note Payable $ —
$ 74,084
Share redemption related to Project Inspire $ —
$ 6,335



	For the			For the
	Three Months Ended			Three Months Ended
	December 31, 2019			December 31, 2018
Cash flows provided by (used in) operating activities:
Net income	$	9,424		$	10,708
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:
Depreciation and amortization	28,544			27,090
Non-cash operating lease expense	3,273			—
Accretion of discounts	317			194
Amortization of discounts and debt issuance costs	4,550			4,845
Provision for losses on receivables	321			369
Deferred income tax provision	(1,316		)	—
Other, net	244			(247		)
Changes in operating assets and liabilities, net of effect of the MGE Niagara Resorts acquisition:
Accounts receivable	(2,657		)	(5,594		)
Accrued interest on notes receivable related to the Cowlitz Project	—			72,166
Inventories	510			476
Due from Ontario Lottery and Gaming Corporation	(761		)	—
Casino Operating and Services Agreement customer contract asset	(40,976		)	—
Other assets	(9,033		)	(2,189		)
Trade payables	4,058			(655		)
Accrued interest	(9,743		)	(10,025		)
Due to Ontario Lottery and Gaming Corporation	8,591			—
Operating lease liabilities	(2,057		)	—
Other liabilities	(4,247		)	(16,087		)
Net cash flows provided by (used in) operating activities	(10,958		)	81,051
Cash flows provided by (used in) investing activities:
Purchases of property and equipment	(22,218		)	(14,064		)
Acquisition of the MGE Niagara Resorts, net of cash acquired	(1,666		)	—
Proceeds from notes receivable related to the Cowlitz Project	—			32,026
Other, net	(1,390		)	(1,364		)
Net cash flows provided by (used in) investing activities	(25,274		)	16,598
Cash flows provided by (used in) financing activities:
Senior secured credit facility borrowings - revolving and line of credit	326,222			360,712
Senior secured credit facility repayments - revolving and line of credit	(291,147		)	(350,712		)
Senior secured credit facility repayments - term loans A and B	(13,295		)	(18,858		)
MGE Niagara Resorts credit facility borrowings - revolving and line of credit	41,864			—
MGE Niagara Resorts credit facility repayments - line of credit	(11,596		)	—
MGE Niagara Resorts credit facility repayments - term loan	(960		)	—
Other borrowings	—			11,335
Other repayments	(6,458		)	(1,450		)
Payments on finance lease obligations	(404		)	—
Distributions to Mohegan Tribe	(12,000		)	(12,000		)
Distributions to Salishan Company, LLC related to the Cowlitz Project	(313		)	—
Other, net	(1,527		)	(6,776		)
Net cash flows provided by (used in) financing activities	30,386			(17,749		)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	(5,846		)	79,900
Effect of exchange rate on cash, cash equivalents, restricted cash and restricted cash equivalents	7,001			641
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period	280,729			234,626
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	281,884		$	315,167
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the condensed consolidated balance sheets:
Cash and cash equivalents	$	139,164		$	101,584
Restricted cash and cash equivalents, current	6,706			414
Restricted cash and cash equivalents, non-current	136,014			213,169
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	281,884		$	315,167
Supplemental disclosures:
Cash paid for interest	$	40,388		$	41,190
Non-cash transactions:
Right-of-use operating lease assets	$	359,909		$	—
Right-of-use operating lease obligations	$	360,054		$	—
Construction payables	$	24,040		$	9,732
Senior secured credit facility reductions	$	13,295		$	28,858

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION:

Organization

The Mohegan Tribe of Indians of Connecticut (the “Mohegan Tribe”) established the Mohegan Tribal Gaming Authority in July 1995 with the exclusive authority to conduct and regulate gaming activities for the Mohegan Tribe on tribal lands and the non-exclusive authority to conduct such activities elsewhere. ~~In June 2017,~~The Mohegan Tribe is a sovereign Indian nation with independent legal jurisdiction over its people and land. Like other sovereign governments, the Mohegan Tribe and its entities, including the Mohegan Tribal Gaming Authority, ~~announced~~are generally not subject to federal, state or local income taxes. However, MGE Niagara Entertainment Inc. (“MGE Niagara”), a ~~corporate effort~~wholly-owned subsidiary, is subject to ~~align its brand image with its expanding business,~~tax in Ontario, Canada, and ~~accordingly rebranded, and is now doing business as~~certain non-tribal entities are subject to state or local income taxes in the United States. The Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming & Entertainment (the “Company”) is primarily engaged in the ownership, operation and development of integrated entertainment facilities both domestically and internationally, including Mohegan Sun, a gaming and entertainment complex located on an approximately 196-acre site in Uncasville, Connecticut, and Mohegan Sun Pocono, a gaming and entertainment facility located on an approximately 400-acre site in Plains Township, Pennsylvania.

In September 2018, MGE Niagara was selected by the Ontario Lottery and Gaming Corporation (the “OLG”) to be the service provider for the Niagara Fallsview Casino Resort, Casino Niagara and the future 5,000-seat Niagara Falls Entertainment Centre, all in Niagara Falls, Canada (collectively, the “MGE Niagara Resorts”). On June 11, 2019 (the “Closing Date”), MGE Niagara completed the acquisition of the MGE Niagara Resorts (the “Acquisition”) and assumed the day-to-day operations of the properties under the terms of a 21-year Casino Operating and Services Agreement (the “COSA”) with the OLG.

The Company also (i) owns 100% of Salishan-Mohegan, LLC (“Salishan-Mohegan”), which developed and currently manages ilani Casino Resort in Clark County, Washington, a gaming and entertainment facility owned by the federally-recognized Cowlitz Indian Tribe and the Cowlitz Tribal Gaming Authority, (ii) holds the development rights to any future development at ilani Casino Resort through Salishan-Mohegan Development Company, LLC, a majority-owned subsidiary of Salishan-Mohegan, (iii) manages Resorts Casino Hotel in Atlantic City, New Jersey, and owns 10% of the casino’s holding company and its subsidiaries, including those conducting or licensing online gaming and retail sports wagering in New Jersey, (iv) manages Paragon Casino Resort in Marksville, Louisiana and (v) owns 100% of Inspire Integrated Resort Co., Ltd. and MGA Korea, LLC, which were formed to develop and construct an integrated resort and casino project to be located adjacent to the Incheon International Airport in South Korea.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In accordance with Rule 10-01, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by US GAAP. All adjustments, including normal recurring accruals and adjustments, necessary for a fair statement of the Company's operating results for the interim period, have been included.

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, ~~2018.~~2019. The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. ~~Certain immaterial line items~~

Revenue Disaggregation

The Company is primarily engaged in the ~~accompanying condensed consolidated financial statements~~ownership, operation and development of integrated entertainment facilities both domestically and internationally. The Company’s current wholly-owned operations are focused within Connecticut and Pennsylvania. The Company also currently manages other gaming facilities elsewhere within the United States and Canada. The Company generates revenues by providing the following types of goods and services: gaming, food and beverage, hotel, retail, entertainment and other and management and development.

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

Revenue disaggregation by geographic location and revenue type for the three months ended December 31, 2019 was as follows (in thousands):



	Connecticut		Pennsylvania		Canada
	(Mohegan Sun)		(Mohegan Sun Pocono)		(MGE Niagara Resorts)		Other
Gaming	$	160,259	$	51,978	$	52,032	$	—
Food and beverage	28,533		6,082		15,953		(36		)
Hotel	22,048		1,980		3,563		(2		)
Retail, entertainment and other	32,495		1,914		13,426		146
Management and development	—		—		—		9,012
Net revenues	$	243,335	$	61,954	$	84,974	$	9,120

Revenue disaggregation by geographic location and ~~six~~revenue type for the three months ended ~~March~~December 31, 2018~~have been combined or reclassified to conform to fiscal 2019 presentation.~~ was as follows (in thousands):

~~In its first quarter~~



	Connecticut		Pennsylvania		Canada
	(Mohegan Sun)		(Mohegan Sun Pocono)		(MGE Niagara Resorts)		Other
Gaming	$	170,482	$	51,453	$	—	$	—
Food and beverage	29,135		5,713		—		(42		)
Hotel	21,220		1,758		—		(1		)
Retail, entertainment and other	31,842		1,867		—		421
Management and development	—		—		—		5,712
Net revenues	$	252,679	$	60,791	$	—	$	6,090

Contract and Contract-related Assets

As of ~~fiscal 2019, the Company made an out-of-period correction, which decreased property and equipment, net as of March~~December 31, 2019 and increased depreciation and amortization expense by $6.3 million for the six months ended March 31, 2019. This adjustment resulted from the assignment, in a prior year, of an incorrect useful life to depreciate a long lived asset related to tenant allowances.

~~In its second quarter of fiscal~~September 30, 2019, ~~the Company committed to a plan to repurpose the recently closed Casino of the Wind section of Mohegan Sun. In connection with this decision, the Company determined that certain~~contract assets related to the ~~Casino~~COSA totaled $95.7 million and $53.2 million, respectively.

Contract and Contract-related Liabilities

A difference may exist between the timing of cash receipts from patrons and the ~~Wind had no alternative future use. Accordingly, depreciation~~recognition of revenues, resulting in a contract or contract-related liability. In general, the Company has three types of such liabilities: (1) outstanding gaming chips and slot tickets liability, which represents amounts owed in exchange for outstanding gaming chips and slot tickets held by patrons; (2) loyalty points deferred revenue liability and (3) patron advances and other liability, which primarily represents funds deposited in advance by patrons for gaming and advance payments by patrons for goods and services such as advance ticket sales, deposits on rooms and convention space and gift card purchases. These liabilities are generally expected to be recognized as revenues within one year and are recorded within other current liabilities.

The following table summarizes these ~~assets was accelerated, which decreased property and equipment, net as~~liabilities (in thousands):



	December 31, 2019		September 30, 2019
Outstanding gaming chips and slot tickets liability	$	11,350	$	7,968
Loyalty points deferred revenue liability	39,374		40,968
Patron advances and other liability	20,698		22,312
Total	$	71,422	$	71,248

As of ~~March~~December 31, 2019 and ~~increased depreciation and amortization expense by $21.6 million for the three months and six months ended March 31, 2019.~~

~~iGame License~~

~~On January 25,~~September 30, 2019, customer contract liabilities related to Mohegan Sun ~~Pocono entered into a~~Pocono's revenue sharing agreement with Unibet Interactive Inc. ~~(“Unibet”), pursuant to which Mohegan Sun Pocono~~ ~~will allow Unibet the use of its interactive gaming (“iGame”) license to operate a branded retail sportsbook at Mohegan Sun Pocono~~totaled $17.7 million and ~~an online gaming service in exchange for a portion of the related revenues earned by Unibet.In connection with this agreement, Unibet~~ ~~paid the required $8.0~~$18.0 million, ~~iGame license fee to the Pennsylvania Gaming Control Board on behalf of Mohegan Sun Pocono. The Company~~respectively, and are primarily recorded ~~the $8.0 million iGame license fee, which is reimbursable to Unibet under certain conditions, as an indefinite useful life intangible asset with a corresponding~~within other long-term ~~contract liability. The intangible asset will be~~ ~~assessed at least annually for impairment.~~liabilities.

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

Fair Value of Financial Instruments

The Company applies the following fair value hierarchy, which prioritizes the inputs utilized to measure fair value into three levels:

Level 1 - Quoted prices for identical assets or liabilities in active markets;

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets or valuations based on models where the significant inputs are observable or can be corroborated by observable market data; and

~~MOHEGAN TRIBAL GAMING AUTHORITY~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(unaudited)~~

Level 3 - Valuations based on models where the significant inputs are unobservable. The unobservable inputs reflect the Company's estimates or assumptions that market participants would utilize in pricing such assets or liabilities.

The Company's assessment of the significance of a particular input requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy.

The carrying amount of cash and cash equivalents, restricted cash and cash equivalents, receivables and trade payables ~~and certain promissory notes, including a redemption note payable,~~ approximates fair value. The estimated fair values of the Company's long-term debt were as follows (in thousands):

March 31, 2019
Carrying Value Fair Value
Senior Secured Credit Facility - Revolving $ 55,000
$ 52,525
Senior Secured Credit Facility - Term Loan A $ 284,901
$ 281,243
Senior Secured Credit Facility - Term Loan B $ 807,883
$ 781,194
2016 7 7/8% Senior Unsecured Notes $ 489,686
$ 495,000



	December 31, 2019
	Carrying Value		Fair Value
Senior secured credit facility - revolving (1)	$	137,000	$	134,089
Senior secured credit facility - term loan A (1)	253,272		252,122
Senior secured credit facility - term loan B (1)	804,174		789,393
2016 7 7/8% senior unsecured notes (1)	490,821		512,500
Line of credit (1)	75		74
MGE Niagara Resorts credit facility - revolving (1)	30,728		30,728
MGE Niagara Resorts credit facility - term loan (1)	73,936		74,900
MGE Niagara Resorts convertible debenture (2)	30,728		30,728
Mohegan Expo credit facility (3)	28,831		29,657
Guaranteed credit facility (3)	31,264		32,375
Redemption note payable (3)	78,035		78,035
Other (3)	1,154		1,154
Long-term debt	$	1,960,018	$	1,965,755

~~The estimated fair values of the Company's long-term debt were based on Level 2 inputs (quoted market prices or prices of similar instruments) on or about~~ ~~March 31, 2019~~. ________


(1)	Estimated fair values were based on Level 2 inputs (quoted market prices or prices of similar instruments) as of December 31, 2019.


(2)	Estimated fair value was based on Level 3 inputs (changes in market conditions) from date of issuance (June 11, 2019) to December 31, 2019.


(3)	Estimated fair values were based on Level 3 inputs (present value of future payments discounted to carrying value) as of December 31, 2019.

NOTE 2—NEW ACCOUNTING STANDARDS:

The following accounting ~~standards were~~standard was adopted during the three months ~~and six months~~ ended ~~March~~December 31, 2019:

ASU ~~2014-09~~2016-02

In ~~May 2014,~~February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.

Effective October 1, 2018, the Company adopted ASC 606, on a modified retrospective basis, for all contracts at the date of initial adoption. The Company recognized the cumulative-effect of initially adopting ASC 606 as a decrease to retained earnings and a corresponding increase to other current liabilities. Comparative information for the three months and six months ended March 31, 2018 has not been restated and continues to be reported under accounting standards in effect for those periods. The adoption of ASC 606 did not have a material effect on the Company’s net loss for the three months and six months ended March 31, 2019.

~~The cumulative-effect of initially adopting ASC 606 was as follows (in thousands):~~

September 30, 2018 ASC 606 Adjustment October 1, 2018
Other current liabilities $ 123,303
$ 41,575
$ 164,878
Retained earnings $ 250,707
$ (41,575 ) $ 209,132

~~The impact of adopting ASC 606 on the accompanying condensed consolidated balance sheet as of March 31, 2019 was as follows (in thousands):~~

Balance under ASC 606 Balance without ASC 606 Impact of Change
March 31, 2019 March 31, 2019 Higher/ (Lower)
Other current liabilities $ 165,741
$ 126,285
$ 39,456
Retained earnings $ 174,053
$ 213,509
$ (39,456 )

~~MOHEGAN TRIBAL GAMING AUTHORITY~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(unaudited)~~

~~The impact of adopting ASC 606 on the accompanying condensed consolidated statement of loss for the three months ended March 31, 2019 was as follows (in thousands):~~

Promotional Promotional Gross vs. Net Impact of
Balance Loyalty Allowances Allowances Cash Presentation Balance Change
under Points (Discretionary) (Non-Discretionary) Giveaways and Other without Higher/
ASC 606 (1) (2) (2) (3) (4) ASC 606 (Lower)
Revenues:
Gaming $ 211,819
$ 296
$ (38,947 ) $ (15,330 ) $ (1,580 ) $ 5,525
$ 261,855
$ (50,036 )
Food and beverage 33,508
—
10,897
—
—
825
21,786
11,722
Hotel 22,005
—
6,076
—
—
168
15,761
6,244
Retail, entertainment and other 40,365
—
6,825
1,284
—
(1,624 ) 33,880
6,485
Gross revenues 307,697
296
(15,149 ) (14,046 ) (1,580 ) 4,894
333,282
(25,585 )
Less-Promotional allowances —
—
16,357
6,179
—
811
(23,347 ) 23,347
Net revenues 307,697
296
1,208
(7,867 ) (1,580 ) 5,705
309,935
(2,238 )
Operating costs and expenses:
Gaming 125,970
(516 ) (1,720 ) (26,652 ) (1,580 ) 5,837
150,601
(24,631 )
Food and beverage 26,084
—
2,928
7,564
—
825
14,767
11,317
Hotel 10,026
—
—
2,391
—
168
7,467
2,559
Retail, entertainment and other 19,507
—
—
8,830
—
(1,266 ) 11,943
7,564
Advertising, general and administrative 47,112
—
—
—
—
141
46,971
141
Corporate 12,464
—
—
—
—
—
12,464
—
Depreciation and amortization 42,782
—
—
—
—
—
42,782
—
Other, net 1,526
—
—
—
—
—
1,526
—
Total operating costs and expenses 285,471
(516 ) 1,208
(7,867 ) (1,580 ) 5,705
288,521
(3,050 )
Income from operations $ 22,226
$ 812
$ —
$ —
$ —
$ —
$ 21,414
$ 812

~~MOHEGAN TRIBAL GAMING AUTHORITY~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(unaudited)~~

~~The impact of adopting ASC 606 on the accompanying condensed consolidated statement of loss for the six months ended March 31, 2019 was as follows (in thousands):~~

Promotional Promotional Gross vs. Net Impact of
Balance Loyalty Allowances Allowances Cash Presentation Balance Change
under Points (Discretionary) (Non-Discretionary) Giveaways and Other without Higher/
ASC 606 (1) (2) (2) (3) (4) ASC 606 (Lower)
Revenues:
Gaming $ 433,754
$ 1,515
$ (69,683 ) $ (33,177 ) $ (4,259 ) $ 11,175
$ 528,183
$ (94,429 )
Food and beverage 68,314
—
20,998
—
—
1,974
45,342
22,972
Hotel 44,982
—
12,074
—
—
332
32,576
12,406
Retail, entertainment and other 80,147
—
6,977
2,889
—
(3,586 ) 73,867
6,280
Gross revenues 627,197
1,515
(29,634 ) (30,288 ) (4,259 ) 9,895
679,968
(52,771 )
Less-Promotional allowances —
—
32,007
12,560
—
1,517
(46,084 ) 46,084
Net revenues 627,197
1,515
2,373
(17,728 ) (4,259 ) 11,412
633,884
(6,687 )
Operating costs and expenses:
Gaming 254,634
(611 ) (3,431 ) (56,281 ) (4,259 ) 11,589
307,627
(52,993 )
Food and beverage 52,531
—
5,804
14,919
—
1,974
29,834
22,697
Hotel 19,829
—
—
4,982
—
332
14,515
5,314
Retail, entertainment and other 40,269
—
—
18,652
—
(2,733 ) 24,350
15,919
Advertising, general and administrative 96,130
—
—
—
—
250
95,880
250
Corporate 24,889
—
—
—
—
—
24,889
—
Depreciation and amortization 69,872
—
—
—
—
—
69,872
—
Other, net 3,447
—
—
—
—
—
3,447
—
Total operating costs and expenses 561,601
(611 ) 2,373
(17,728 ) (4,259 ) 11,412
570,414
(8,813 )
Income from operations $ 65,596
$ 2,126
$ —
$ —
$ —
$ —
$ 63,470
$ 2,126

~~The items most significantly impacted by the adoption of ASC 606 were as follows:~~

(1) ASC 606 modified the accounting related to loyalty points. The Company’s loyalty reward programs allow patrons to utilize their reward membership cards to earn loyalty points that are redeemable for complimentary items such as food and beverage, lodging and retail products. Under ASC 606, the Company is required to utilize a deferred revenue model to reduce gaming revenues by the estimated fair value of loyalty points earned by patrons and recognize the related revenues when such loyalty points are redeemed. The deferred revenue liability is based on the estimated stand-alone selling price (“SSP”) of loyalty points earned after factoring in the likelihood of redemption. Prior to the adoption of ASC 606, the liability for unredeemed loyalty points was estimated based on expected redemption rates and estimated costs of the goods and services to be provided.

(2) ASC 606 modified the accounting related to promotional allowances. The Company no longer recognizes revenues for complimentary items provided to patrons or for goods and services provided to patrons in connection with loyalty point redemptions as gross revenues with a corresponding offset to promotional allowances to arrive at net revenues. The majority of such amounts previously included within promotional allowances now offset gaming revenues based on an allocation of revenues to performance obligations utilizing SSP. These changes resulted in the elimination of promotional allowances and the reclassification of revenues between the various revenue line items.

~~MOHEGAN TRIBAL GAMING AUTHORITY~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(unaudited)~~

(3) ASC 606 modified the accounting related to cash giveaways. The Company now records cash giveaways as a reduction to gaming revenues. Prior to the adoption of ASC 606, the Company recorded cash giveaways as expenses. This change resulted in decreases in both gaming revenues and expenses.

(4) ASC 606 modified gross versus net presentation related to certain fees. The Company now records mandatory service charges on food and beverage items and wide area progressive operator fees on a gross basis, with amounts received from patrons recorded as revenues and the corresponding amounts paid recorded as expenses. This change resulted in increases in both revenues and expenses.

The Company’s revenues from contracts with customers consist of gaming, food and beverage, hotel, retail, entertainment and convention related transactions, as well as management and development services related to management and development contracts with third-party facilities.

The transaction price in a gaming contract is the difference between gaming wins and losses, not the total amount wagered. The transaction price in a racing contract, inclusive of live racing at the Company’s facilities, as well as import and export arrangements, is the commission received from the pari-mutuel pool less contractual fees and obligations, which primarily consist of purse funding requirements, simulcasting fees, tote fees and certain pari-mutuel taxes that are directly related to racing operations. The transaction prices in food and beverage, hotel, retail, entertainment and convention contracts are the net amounts collected for such goods and services. Sales and other taxes collected on behalf of governmental authorities are accounted for on a net basis and are not included in revenues or expenses. The transaction prices in management and development service contracts are the amounts collected for services rendered in accordance with contractual terms, inclusive of reimbursable costs and expenses.

Gaming transactions involve two performance obligations for patrons participating in the Company’s loyalty reward programs and a single performance obligation for patrons that do not participate. The Company applies a practical expedient by accounting for gaming contracts on a portfolio basis, as such contracts share similar characteristics. The Company does not expect the effects on its condensed consolidated financial statements under this approach to differ materially versus under an individual contract basis. Revenues allocated to gaming performance obligations are recognized when gaming occurs as such activities are settled immediately. Revenues allocated to the loyalty points deferred revenue liability are recognized when loyalty points are redeemed. The deferred revenue liability is based on the estimated SSP of the loyalty points earned after factoring in the likelihood of redemption.

Food and beverage, hotel, retail, entertainment and convention transactions have been determined to be separate, stand-alone performance obligations and revenues for such contracts are recognized when the related goods and services are transferred to patrons. Revenues from contracts which include a combination of these transactions are allocated on a pro rata basis based on the goods' and services' SSP.

~~Management and development services have been determined to be separate, stand-alone performance obligations and revenues for such contracts are recognized when the related services are performed.~~

~~Revenue Disaggregation~~

The Company is a geographically diversified, multi-jurisdictional owner, operator and manager of gaming facilities. The Company’s current operations are focused within Connecticut and Pennsylvania. The Company also currently manages other gaming facilities elsewhere within the United States. The Company generates revenues by providing the following types of goods and services: gaming, food and beverage, hotel, retail, entertainment and other and management and development.

~~Revenue disaggregation by geographic location and revenue type for the three months ended March 31, 2019 was as follows (in thousands):~~

Connecticut Pennsylvania Other
(Mohegan Sun) (Mohegan Sun Pocono) (Corporate and Other)
Gaming $ 159,831
$ 51,988
$ —
Food and beverage 28,080
5,479
(51 )
Hotel 19,989
2,017
(1 )
Retail, entertainment and other 30,491
1,757
338
Management and development —
—
7,839
Net revenues $ 238,391
$ 61,241
$ 8,125

~~MOHEGAN TRIBAL GAMING AUTHORITY~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(unaudited)~~

~~Revenue disaggregation by geographic location and revenue type for the six months ended March 31, 2019 was as follows (in thousands):~~

Connecticut Pennsylvania Other
(Mohegan Sun) (Mohegan Sun Pocono) (Corporate and Other)
Gaming $ 330,313
$ 103,441
$ —
Food and beverage 57,215
11,192
(93 )
Hotel 41,209
3,775
(2 )
Retail, entertainment and other 62,333
3,624
759
Management and development —
—
13,551
Net revenues $ 491,070
$ 122,032
$ 14,215

~~Contract and Contract-Related Liabilities~~

There may exist a difference between the timing of cash receipts from patrons and the recognition of revenues, resulting in a contract or contract-related liability. In general, the Company has three types of such liabilities: (1) outstanding gaming chips and slot tickets liability, which represents amounts owed in exchange for outstanding gaming chips and slot tickets held by patrons, (2) loyalty points deferred revenue liability, as discussed above, and (3) patron advances and other liability, which primarily represents funds deposited in advance by patrons for gaming and advance payments by patrons for goods and services such as advance ticket sales, deposits on rooms and convention space and gift card purchases. These liabilities are generally expected to be recognized as revenues within one year and are recorded within other current liabilities.

~~The following table summarizes these liabilities (in thousands):~~

March 31, 2019 October 1, 2018 Increase/ (Decrease)
Outstanding gaming chips and slot tickets liability $ 6,751
$ 3,298
$ 3,453
Loyalty points deferred revenue liability $ 40,533
$ 42,314
$ (1,781 )
Patron advances and other liability $ 25,747
$ 17,530
$ 8,217

~~As of March 31, 2019, an $8.0 million contract liability related to Mohegan Sun Pocono's recent revenue sharing agreement with Unibet is recorded within other long-term liabilities (refer to Note 1).~~

~~ASU 2016-18~~

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the total change during the period in cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in its first quarter of fiscal 2019 on a retrospective basis. Transfers between cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents are no longer included within investing activities and, as such, the details of such transfers are not reported as cash flow activities in the statement of cash flows. This resulted in a $16.7 million change to net cash flows used in investing activities for the six months ended March 31, 2018.

~~The following accounting standards will be adopted in future reporting periods:~~

~~ASU 2016-02~~

~~In February 2016, the FASB issued ASU~~ 2016-02, “Leases (Topic 842)” (“ASU ~~2016‑02”~~2016-02”), which ~~will require,~~requires, among other things, lessees to recognize a right-of-use (“ROU”) asset and a lease liability for leases with terms in excess of 12 months and the disclosure of ~~key~~ information about leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” and ASU No. 2018-10, “Codification Improvements to Topic 842, Leases”, which ~~clarified~~clarify various aspects of ASU 2016-02.

Effective October 1, 2019, the ~~new standard. ASU 2016‑02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.~~Company adopted ASU 2016-02 ~~provides various optional~~under a modified retrospective transition approach. Accordingly, comparative information as of September 30, 2019 and for the three months ended December 31, 2018 has not been restated and continues to be reported under accounting standards in effect for those periods. The Company elected the package of practical expedients included in ~~transition,~~ASU 2016-02, which allowed it to: (i) not reassess whether any expired or existing contracts contain leases, (ii) not reassess the lease classification for any expired or existing leases and (iii) not reassess the initial direct costs for existing leases. The Company also made an accounting policy election to not recognize leases with an initial term of 12 months or less on its balance sheet. In addition, the Company elected to not separate lease and non-lease components for all significant classes of underlying assets for which the Company ~~continues to evaluate. In July 2018,~~is the ~~FASB issued ASU 2018-11, “Leases - Targeted Improvements,” as an update to ASU 2016-02. This update added an optional transition method of adoption~~lessee. For instances in which allows for the recognition of the cumulative-effect of initially adopting ASU 2016-02 as an adjustment to retained earnings in the period of adoption without recasting prior periods' financial statements. The Company will adopt ASU 2016-02 in its first quarter of fiscal 2020, on a modified retrospective basis, and will recognize the cumulative-effect of its initial adoption as an adjustment to retained earnings as of October 1, 2019. While the Company ~~continues to evaluate~~is the ~~impact ASU 2016-02 will have on its financial statements~~lessor, and the class of underlying asset represents retail space, the Company accounts for both the lease and non-lease components as a single lease

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

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)”.

As of October 1, 2019, the adoption of ASU 2016-02 resulted in the recognition of ROU operating lease assets of $359.2 million and related ~~disclosures,~~ROU operating lease liabilities of $366.8 million, as well as the ~~actual impact~~derecognition of ~~this new standard will be dependent upon~~a previously recognized build-to-suit asset and related liability of $90.3 million. The difference between the ~~Company’s~~ROU operating lease ~~portfolio at~~assets and liabilities reflects the ~~time~~reclassification of ~~adoption.~~historical prepaid and deferred rent balances. The adoption of ASU 2016-02 ~~is expected to have a material~~did not impact onthe Company's retained earnings or the Company’s compliance with its financial ~~statements, as the Company has significant operating lease commitments that are off-balance sheet~~covenants under its current debt agreements.

The following accounting ~~standards.~~standards will be adopted in a future reporting period:

ASU 2018-13

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which adds, amends and removes certain disclosure requirements related to fair value measurements. ASU 2018-13 requires enhanced disclosures on valuation techniques and inputs that a reporting entity uses to determine its measures of fair value, including judgments and assumptions that the entity makes and the uncertainties in the fair value measurements as of the reporting date. ASU 2018-13 is effective for annual reporting periods beginning after December 15, 2019. Certain amended or eliminated disclosure requirements may be adopted earlier, while certain additional disclosure requirements can be adopted on its effective date. In addition, certain changes required by this new standard require retrospective adoption, while other changes must be adopted prospectively. The Company is currently evaluating the impact ASU 2018-13 will have on its financial ~~statements.~~statement disclosures.

ASU 2019-12

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies various aspects related to the accounting for income taxes. This new standard removes certain exceptions to the general principles in ASU 2019-12 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact ASU 2019-12 will have on its financial statements, but does not expect its adoption to have a material impact.

NOTE 3—~~COWLITZ PROJECT:~~LEASES:

~~On December 4, 2018,~~The Company determines if a contract is, or contains, a lease at its inception or at the time of any modification. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset requires that the lessee has both: (i) the right to obtain substantially all of the economic benefits from the use of the asset and (ii) the right to direct the use of the asset.

ROU operating and finance lease assets and liabilities are recognized on the respective lease commencement date based on the present value of future lease payments over the expected lease term. An expected lease term includes any option to extend or terminate the lease if it is reasonably certain that the Company ~~received $106.6 million from~~will exercise such option. The Company utilizes the ~~Cowlitz Tribal Gaming Authority. This amount represented~~incremental borrowing rate (“IBR”) applicable to the ~~full repayment~~lease as determined at the lease commencement date to calculate the present value of future lease payments. The applicable IBR is determined based on the treasury group to which the leasing entity belongs and that group’s estimated interest rate for collateralized borrowings over a similar term as the future lease payments. Upon adoption of ASU 2016-02, the Company utilized IBRs as of October 1, 2019 to determine the present value of the ~~then-outstanding notes~~remaining lease payments for operating leases that commenced prior to that date. Operating lease expense for fixed lease payments is recognized on a straight-line basis over the expected lease term. ROU finance lease assets are recorded within property and ~~accrued interest, through~~equipment, net and are amortized on a straight-line basis over the ~~repayment date, due~~related lease term. As of December 31, 2019, ROU finance lease assets totaled $31.4 million.

Lessee

The Company leases real estate and equipment under various operating and finance lease agreements. Lease terms range from approximately one month to ~~Salishan-Mohegan, LLC~~50 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 ~~connection with~~ the ~~development~~calculation of ~~ilani Casino Resort, totaling $32.0 million~~ROU assets and ~~$74.6 million, respectively.~~liabilities.

~~On January 1, 2019, the Mohegan Tribe surrendered its interest~~The Company’s lease arrangements contain both lease and non-lease components. For instances in ~~Salishan-Mohegan, LLC and a related entity for total consideration of $10 million,~~ which the Company ~~believes represented its fair value. Effective January 1, 2019,~~is a lessee, the Company ~~receives 100%~~accounts 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

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

recorded on the ~~management fees~~Company’s balance sheet and the related lease expenses are recognized on a straight-line basis over the expected lease term.

Information related to ~~the Cowlitz Project,~~weighted average lease terms and discount rates is as ~~well as the Mohegan Tribe's share of development fees.~~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):

~~NOTE 4—NIAGARA:~~

~~In September 2018, MGE Niagara Entertainment Inc. (“MGE Niagara”), a subsidiary currently wholly-owned by the Company, was selected by the Ontario Lottery and Gaming Corporation (the “OLG”)~~



	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 the service provider for Fallsview Casino Resort, Casino Niagara and the future 5,000-seat Niagara Falls Entertainment Centre, all in Niagara Falls, Canada (the “Niagara Gaming Bundle”) and entered into a Transition and Asset Purchase Agreement with the OLG to acquire certain assets associated with the Niagara Gaming Bundle, with an anticipated closing date of June 11, 2019 (the “Closing Date”), subject to customary closing conditions. The aggregate purchase price for these assets, exclusive of working capital and taxes, will approximate 89 million Canadian dollars (approximately 67 million United States dollars) and is expected to be funded with proceeds from certain project financing, a portion of which may be convertible into a minority equity interest of MGE Niagara subsequent to the Closing Date. Also on the Closing Date, MGE Niagara will, among other things, enter into a Casino Operating and Services Agreement (“COSA”), pursuant to which MGE Niagara will assume the day-to-day operations of the Niagara Gaming Bundle from the Closing Date through March 31, 2040, and a lease for the Fallsview Casino Resort property for the term of the COSA.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

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

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.

In connection with the acquisition of the MGE Niagara Resorts, the Company committed to enter into a lease agreement with a third-party to lease the Niagara Falls Entertainment Centre following the completion of its construction. Prior to the adoption of ASU 2016-02, the Company was deemed, for accounting purposes only, to be the owner of this construction project, despite not being the legal owner. Accordingly, the Company capitalized $90.3 million as of September 30, 2019 for amounts paid as a build-to-suit asset within property and equipment, net and recorded a corresponding build-to-suit liability. In connection with the adoption of ASU 2016-02, the Company derecognized the build-to-suit asset and liability in their entirety.

Lessor

The Company leases space at its facilities to third parties. Lease terms for these non-cancelable operating leases range from approximately one month to 17 years. Rental income under these lease agreements are 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 the Company is the lessor, and the class of underlying asset represents retail space, the Company accounts 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)”.

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

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

~~NOTE 5—LONG-TERM DEBT:~~

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

March 31,
2019 September 30,
2018
Senior Secured Credit Facility - Revolving $ 55,000
$ 66,000
Senior Secured Credit Facility - Term Loan A, net of discount and debt issuance costs of $5,414 and $6,661, respectively 284,901
311,466
Senior Secured Credit Facility - Term Loan B, net of discount and debt issuance costs of $18,777 and $20,571, respectively 807,883
810,430
2016 7 7/8% Senior Unsecured Notes, net of discount and debt issuance costs of $10,314 and $11,033, respectively 489,686
488,967
Mohegan Expo Credit Facility, net of debt issuance costs of $1,121 and $1,319, respectively
30,409
31,980
Guaranteed Credit Facility, net of debt issuance costs of $1,351 and $1,262, respectively 32,992
22,403
Redemption Note Payable, net of discount of $28,832 and $33,635, respectively 85,968
81,165
Other 1,311
1,744
Long-term debt 1,788,150
1,814,155
Less: current portion of long-term debt (76,809 ) (73,232 )
Long-term debt, net of current portion $ 1,711,341
$ 1,740,923



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

~~Senior Secured Credit Facilities - Non-cash Transactions~~_________


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

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):

On March 31, 2019, the bank that administers the Company's debt service payments for its Senior Secured Credit Facilities made certain required and optional principal payments on behalf of the Company totaling $13.3 million~~, but did not accordingly debit the Company's bank account for these payments~~. As of March 31, 2019, the Company reflected these non-cash transactions as reductions to current portion of long-term debt and corresponding increases to other current liabilities. In the following month, the bank withdrew the payments from the Company's bank account, resulting in reductions to the Company's cash and cash equivalents and other current liabilities.

~~Guaranteed Credit Facility - Second Advance~~



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

On October 30, 2018, the Company entered into a follow-on loan agreement with certain third-party lenders providing for an $11.3 million term loan under the Indian Loan Guaranty, Insurance and Interest Subsidy Program (the “BIA Loan Guaranty Program”). This term loan, combined with an initial term loan issued under the BIA Loan Guaranty Program in late September 2018, completes the allocation to the Company of $35.0 million in guaranteed term loans under the BIA Loan Guaranty Program. Like the initial facility, this term loan is secured by a 90% loan guarantee by the Department of the Interior, Assistant Secretary—Indian Affairs, Division of Capital Investment, and is otherwise identical to the initial facility, including use of proceeds, maturity, amortization, interest rate and covenant requirements.

~~Debt Covenant Compliance~~

As of ~~March 31,~~September 30, 2019, information pertaining to the ~~Company~~Company’s leases, as accounted for under prior accounting standards, was ~~in compliance with all financial covenants.~~as follows:

Capital Leases

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

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

Operating Leases

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

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

NOTE 4—MGE NIAGARA RESORTS:

In September 2018, MGE Niagara was selected by the OLG to be the service provider for the MGE Niagara Resorts. Following its selection, MGE Niagara entered into a Transition and Asset Purchase Agreement with the OLG and the Ontario Gaming Assets Corporation. Pursuant to the terms of this agreement, MGE Niagara agreed to acquire certain assets associated with the MGE Niagara Resorts and to perform certain transition activities in order to facilitate the transition of the operational responsibilities from the previous operator to MGE Niagara.

On the Closing Date, MGE Niagara completed the Acquisition, assumed the day-to-day operations of the properties under the terms of the COSA and engaged in a series of transactions related thereto, including: (i) a lease agreement with the OLG to lease the Fallsview Casino Resort and related administrative office space, (ii) a lease agreement with a third-party investor to lease Casino Niagara and related license agreements to operate an adjacent parking lot and the right for patrons to use an adjacent parking garage and (iii) committed to enter into a lease agreement with a third-party to lease the Niagara Falls Entertainment Centre following the completion of its construction, both of which are expected to occur in 2020.

As of the Closing Date, the purchase price of the Acquisition was approximately 96 million Canadian dollars (approximately $72 million), net of cash acquired of approximately 57 million Canadian dollars (approximately $43 million). During the three months ended December 31, 2019, the Company recorded adjustments to the purchase price of the Acquisition totaling 2.2 million Canadian dollars ($1.7 million), net of cash acquired of approximately 518,000 Canadian dollars (approximately $390,000). While no additional material adjustments are expected, the purchase price allocation is not final.

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

The below unaudited pro forma financial information was prepared as if the Acquisition, the financing to fund the Acquisition and the lease transactions had occurred on October 1, 2018. Unaudited pro forma financial information does not necessarily represent results that may occur in the future. The following unaudited pro forma financial information includes historical financial results of the MGE Niagara Resorts prior to the Acquisition, adjusted to include the Company's share of revenues earned under the COSA which are recorded on a net basis, along with other adjustments directly attributable to the Acquisition, including interest expense and depreciation (in thousands, unaudited):



	For the
	Three Months Ended
	December 31, 2018
Net revenues	$	405,802
Net income attributable to Mohegan Tribal Gaming Authority	$	8,554

NOTE 5—LONG-TERM DEBT:

Long-term debt consisted of the following (in thousands):



	December 31, 2019			September 30, 2019
Senior Secured Credit Facility - Revolving	$	137,000		$	102,000
Senior Secured Credit Facility - Term Loan A, net of discount and debt issuance costs of $3,668 and $4,236, respectively	253,272			263,829
Senior Secured Credit Facility - Term Loan B, net of discount and debt issuance costs of $15,975 and $16,925, respectively	804,174			805,394
2016 7 7/8% Senior Unsecured Notes, net of discount and debt issuance costs of $9,179 and $9,565, respectively	490,821			490,435
Line of Credit	75			—
MGE Niagara Resorts Credit Facility - Revolving	30,728			—
MGE Niagara Resorts Credit Facility - Term Loan, net of debt issuance costs of $963 and $1,002, respectively	73,936			73,564
MGE Niagara Resorts Convertible Debenture	30,728			30,204
Mohegan Expo Credit Facility, net of debt issuance costs of $827 and $925, respectively	28,831			29,357
Guaranteed Credit Facility, net of debt issuance costs of $1,111 and $1,191, respectively	31,264			31,840
Redemption Note Payable, net of discount of $22,072 and $23,905, respectively	78,035			81,329
Other	1,154			1,205
Long-term debt	1,960,018			1,909,157
Less: current portion of long-term debt	(74,266		)	(76,909		)
Long-term debt, net of current portion	$	1,885,752		$	1,832,248

Senior Secured Credit Facilities - Non-cash Transactions

On December 31, 2019 and 2018, the bank that administers the Company's debt service payments for its Senior Secured Credit Facilities made required principal payments on behalf of the Company totaling $13.3 million and $28.9 million, respectively, but did not accordingly debit the Company's bank account for these payments. As of December 31, 2019 and 2018, the Company reflected these non-cash transactions as reductions to current portion of long-term debt and corresponding increases to other current liabilities. On the respective following banking days, the bank withdrew the payments from the Company's bank account, resulting in reductions to the Company's cash and cash equivalents and other current liabilities.

Debt Covenant Compliance

As of December 31, 2019, the Company and MGE Niagara were in compliance with all financial covenants.

MOHEGAN TRIBAL GAMING AUTHORITY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(unaudited)

NOTE 6—SEGMENT REPORTING:

The ~~following table summarizes~~Company, either directly or through subsidiaries, operates Mohegan Sun, along with its other Connecticut operations (the “Connecticut Facilities”), Mohegan Sun Pocono, along with its other Pennsylvania operations (the “Pennsylvania Facilities”) and the MGE Niagara Resorts. The Company assumed the day-to-day operations of the MGE Niagara Resorts on June 11, 2019. Certain other properties that are managed or under development by the Company, which were previously included within the Company's corporate functions, are now identified as the management, development and other reportable segment.

The Company's chief operating decision maker currently reviews and assesses the performance and operating results and determines the proper allocation of resources to the Connecticut Facilities, the Pennsylvania Facilities, the MGE Niagara Resorts and the properties managed or under development on a separate basis. Accordingly, the Company now has four separate reportable segments: (i) Mohegan Sun, which includes the operations of the Connecticut Facilities, (ii) Mohegan Sun Pocono, which includes the operations of the Pennsylvania Facilities, (iii) the MGE Niagara Resorts and (iv) management, development and other. The Company's corporate functions, along with any inter-segment activities are disclosed separately in the following segment ~~basis (in thousands):~~disclosures to reconcile to consolidated results. The following management, development and other and corporate segment disclosures for the three months ended December 31, 2018 have been restated to conform to fiscal 2020 presentation.


	For the Three Months Ended						For the Six Months Ended						For the Three Months Ended
	March 31, 2019			March 31, 2018			March 31, 2019			March 31, 2018
(in thousands)													December 31, 2019			December 31, 2018
Net revenues:
Mohegan Sun	$	238,391		$	260,354		$	491,070		$	523,291		$	243,335		$	252,679
Mohegan Sun Pocono	61,241			67,130			122,032			131,934			61,954			60,791
Corporate and other	8,125			4,593			14,215			8,396
Inter-segment revenues	(60		)	(60		)	(120		)	(120		)
MGE Niagara Resorts													84,974			—
Management, development and other													9,012			5,712
Corporate													108			378
Inter-segment													(331		)	(60		)
Total	$	307,697		$	332,017		$	627,197		$	663,501		$	399,052		$	319,500

Income (loss) from operations:
Mohegan Sun	$	19,913		$	57,779		$	63,976		$	114,172		$	45,065		$	44,063
Mohegan Sun Pocono	8,214			8,872			15,406			16,547			7,794			7,192
Corporate and other	(5,901		)	(10,579		)	(13,786		)	(19,647		)
MGE Niagara Resorts													(1,333		)	—
Management, development and other													(918		)	(413		)
Corporate													(7,164		)	(7,472		)
Inter-segment													(19		)	—
Total	$	22,226		$	56,072		$	65,596		$	111,072		$	43,425		$	43,370

							For the Six Months Ended						For the Three Months Ended
							March 31, 2019			March 31, 2018
(in thousands)													December 31, 2019			December 31, 2018
Capital expenditures incurred:
Mohegan Sun							$	17,101		$	56,482		$	4,631		$	5,123
Mohegan Sun Pocono							1,631			3,786			999			377
Corporate and other							19,693			12,267
MGE Niagara Resorts													7,851			—
Management, development and other													22,868			7,542
Corporate													8			7
Total							$	38,425		72,535			$	36,357		$	13,049

							March 31, 2019			September 30, 2018
(in thousands)													December 31, 2019			September 30, 2019
Total assets:
Mohegan Sun							$	1,319,822		$	1,364,169		$	1,355,934		$	1,282,384
Mohegan Sun Pocono							580,982			581,079			545,220			548,424
Corporate and other							355,739			366,871
MGE Niagara Resorts													575,771			342,821
Management, development and other													358,366			313,458
Corporate													915,650			912,712
Inter-segment													(895,417		)	(888,203		)
Total							$	2,256,543		$	2,312,119		$	2,855,524		$	2,511,596



Exhibit No.		Description
31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith).

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith).

32.1		Section 1350 Certification of Chief Executive Officer (furnished herewith).

32.2		Section 1350 Certification of Chief Financial Officer (furnished herewith).

101.INS		XBRL Instance Document (filed herewith).

101.SCH		XBRL Taxonomy Extension Schema (filed herewith).

101.CAL		XBRL Taxonomy Calculation Linkbase (filed herewith).

101.DEF		XBRL Taxonomy Extension Definition Linkbase (filed herewith).

101.LAB		XBRL Taxonomy Extension Label Linkbase (filed herewith).

101.PRE		XBRL Taxonomy Extension Presentation Linkbase (filed herewith).



		MOHEGAN TRIBAL GAMING AUTHORITY

Date:	~~May 9, 2019~~February 12, 2020	By:	/S/ RALPH JAMES GESSNER JR.
			Ralph James Gessner Jr. ~~Interim~~ Chairman and Member, Management Board

Date:	~~May 9, 2019~~February 12, 2020	By:	/S/ MARIO C. KONTOMERKOS
			Mario C. Kontomerkos Chief Executive Officer, Mohegan Tribal Gaming Authority (Principal Executive Officer)

Date:	~~May 9, 2019~~February 12, 2020	By:	/S/ DREW M. KELLEY
			Drew M. Kelley Chief Financial Officer, Mohegan Tribal Gaming Authority (Principal Financial and Accounting Officer)



	September 30, 2018		ASC 606 Adjustment			October 1, 2018
Other current liabilities	$	123,303	$	41,575		$	164,878
Retained earnings	$	250,707	$	(41,575	)	$	209,132



	Balance under ASC 606		Balance without ASC 606		Impact of Change
	March 31, 2019		March 31, 2019		Higher/ (Lower)
Other current liabilities	$	165,741	$	126,285	$	39,456
Retained earnings	$	174,053	$	213,509	$	(39,456	)





						Promotional			Promotional						Gross vs. Net						Impact of
	Balance		Loyalty			Allowances			Allowances			Cash			Presentation			Balance			Change
	under		Points			(Discretionary)			(Non-Discretionary)			Giveaways			and Other			without			Higher/
	ASC 606		(1)			(2)			(2)			(3)			(4)			ASC 606			(Lower)
Revenues:
Gaming	$	211,819	$	296		$	(38,947	)	$	(15,330	)	$	(1,580	)	$	5,525		$	261,855		$	(50,036	)
Food and beverage	33,508		—			10,897			—			—			825			21,786			11,722
Hotel	22,005		—			6,076			—			—			168			15,761			6,244
Retail, entertainment and other	40,365		—			6,825			1,284			—			(1,624		)	33,880			6,485
Gross revenues	307,697		296			(15,149		)	(14,046		)	(1,580		)	4,894			333,282			(25,585		)
Less-Promotional allowances	—		—			16,357			6,179			—			811			(23,347		)	23,347
Net revenues	307,697		296			1,208			(7,867		)	(1,580		)	5,705			309,935			(2,238		)
Operating costs and expenses:
Gaming	125,970		(516		)	(1,720		)	(26,652		)	(1,580		)	5,837			150,601			(24,631		)
Food and beverage	26,084		—			2,928			7,564			—			825			14,767			11,317
Hotel	10,026		—			—			2,391			—			168			7,467			2,559
Retail, entertainment and other	19,507		—			—			8,830			—			(1,266		)	11,943			7,564
Advertising, general and administrative	47,112		—			—			—			—			141			46,971			141
Corporate	12,464		—			—			—			—			—			12,464			—
Depreciation and amortization	42,782		—			—			—			—			—			42,782			—
Other, net	1,526		—			—			—			—			—			1,526			—
Total operating costs and expenses	285,471		(516		)	1,208			(7,867		)	(1,580		)	5,705			288,521			(3,050		)
Income from operations	$	22,226	$	812		$	—		$	—		$	—		$	—		$	21,414		$	812



	March 31, 2019		October 1, 2018		Increase/ (Decrease)
Outstanding gaming chips and slot tickets liability	$	6,751	$	3,298	$	3,453
Loyalty points deferred revenue liability	$	40,533	$	42,314	$	(1,781	)
Patron advances and other liability	$	25,747	$	17,530	$	8,217



	March 31, 2019			September 30, 2018
Senior Secured Credit Facility - Revolving	$	55,000		$	66,000
Senior Secured Credit Facility - Term Loan A, net of discount and debt issuance costs of $5,414 and $6,661, respectively	284,901			311,466
Senior Secured Credit Facility - Term Loan B, net of discount and debt issuance costs of $18,777 and $20,571, respectively	807,883			810,430
2016 7 7/8% Senior Unsecured Notes, net of discount and debt issuance costs of $10,314 and $11,033, respectively	489,686			488,967
Mohegan Expo Credit Facility, net of debt issuance costs of $1,121 and $1,319, respectively	30,409			31,980
Guaranteed Credit Facility, net of debt issuance costs of $1,351 and $1,262, respectively	32,992			22,403
Redemption Note Payable, net of discount of $28,832 and $33,635, respectively	85,968			81,165
Other	1,311			1,744
Long-term debt	1,788,150			1,814,155
Less: current portion of long-term debt	(76,809		)	(73,232		)
Long-term debt, net of current portion	$	1,711,341		$	1,740,923


	For the Three Months Ended March 31,											For the Six Months Ended March 31,											For the Three Months Ended December 31,
	2019			2018			Variance			Percentage Variance		2019			2018			Variance			Percentage Variance
(in thousands)																							2019			2018			Variance			Percentage Variance
Net revenues:
Mohegan Sun	$	238,391		$	260,354		$	(21,963	)	(8.4	)%	$	491,070		$	523,291		$	(32,221	)	(6.2	)%	$	243,335		$	252,679		$	(9,344	)	(3.7	)%
Mohegan Sun Pocono	61,241			67,130			(5,889		)	(8.8	)%	122,032			131,934			(9,902		)	(7.5	)%	61,954			60,791			1,163			1.9	%
Corporate and other	8,125			4,593			3,532			76.9	%	14,215			8,396			5,819			69.3	%
Inter-segment revenues	(60		)	(60		)	—			—		(120		)	(120		)	—			—
MGE Niagara Resorts (1)																							84,974			—			84,974			100.0	%
Management, development and other																							9,012			5,712			3,300			57.8	%
Corporate																							108			378			(270		)	(71.4	)%
Inter-segment																							(331		)	(60		)	(271		)	(451.7	)
Total	$	307,697		$	332,017		$	(24,320	)	(7.3	)%	$	627,197		$	663,501		$	(36,304	)	(5.5	)%	$	399,052		$	319,500		$	79,552		24.9	%
Income (loss) from operations:
Mohegan Sun	$	19,913		$	57,779		$	(37,866	)	(65.5	)%	$	63,976		$	114,172		$	(50,196	)	(44.0	)%	$	45,065		$	44,063		$	1,002		2.3	%
Mohegan Sun Pocono	8,214			8,872			(658		)	(7.4	)%	15,406			16,547			(1,141		)	(6.9	)%	7,794			7,192			602			8.4	%
Corporate and other	(5,901		)	(10,579		)	4,678			44.2	%	(13,786		)	(19,647		)	5,861			29.8	%
MGE Niagara Resorts (1)																							(1,333		)	—			(1,333		)	(100.0	)%
Management, development and other																							(918		)	(413		)	(505		)	(122.3	)%
Corporate																							(7,164		)	(7,472		)	308			4.1	%
Inter-segment																							(19		)	—			(19		)	(100.0	)%
Total	$	22,226		$	56,072		$	(33,846	)	(60.4	)%	$	65,596		$	111,072		$	(45,476	)	(40.9	)%	$	43,425		$	43,370		$	55		0.1	%
Net income (loss) attributable to Mohegan Tribal Gaming Authority	$	(12,358	)	$	28,608		$	(40,966	)	N.M.		$	(1,736	)	$	57,817		$	(59,553	)	N.M.
Net income attributable to Mohegan Tribal Gaming Authority																							$	9,394		$	10,622		$	(1,228	)	(11.6	)%


(1)	We assumed the day-to-day operations of the MGE Niagara Resorts on June 11, 2019.