Foxwoods' fiscal year earnings 8 percent below projections

This article has been edited to correct the number of employees at Foxwoods.

Mashantucket - Foxwoods Resort Casino's financial performance in the last fiscal year fell short of management's projections, according to the casino's annual report, the first ever made public.

Foxwoods and MGM Grand at Foxwoods, which together comprise the Mashantucket Pequot Gaming Enterprise, reported net revenues of $1.04 billion in the fiscal year that ended Sept. 30, 2013, nearly 6 percent less than the $1.11 billion management projected in an August 2012 bondholders' presentation.

The annual report also indicates that in fiscal 2013, the enterprise's EBITDA - earnings before interest, taxes, depreciation and amortization - totaled $204.8 million, more than 8 percent less than the $223 million management had projected. EBITDA is considered the leading indicator of financial performance in the gaming industry.

Foxwoods' EBITDA in fiscal 2013 was down 7.9 percent over fiscal 2012's $222.5 million, according to the annual report.

Scott Butera, Foxwoods' president and chief executive officer, attributed the year-over-year decline to bad weather in early 2013 and disruptions associated with the implementation of a new marketing campaign, ongoing hotel renovations and a makeover of the casino's dining and retail outlets.

"We've got a lot going on in terms of redevelopment," he said.

Aside from what it revealed, the public release of Foxwoods' annual report was notable in itself.

Posted on the website of the Electronic Municipal Markets Access system, or EMMA, the more than 60-page report, dated Dec. 27, contains data from the 2013, 2012 and 2011 fiscal years. It includes much of what such reports typically include, including financial statements, balance sheets and management's analysis of the enterprise's financial condition.

Foxwoods began posting financial information on the EMMA site in 2012 in connection with the Mashantucket Pequot Tribe's restructuring of more than $2.2 billion in debt. Previously, such information had only been available to investors and securities analysts. The restructuring, which reduced the tribe's debt to $1.7 billion, was completed this past summer.

"As part of the restructuring, we wanted to be more transparent," Butera said. "It's a good step to take. It's meant to mirror what an SEC filer would do."

Foxwoods does not report its finances to the U.S. Securities and Exchange Commission. Until now, the only financial information it regularly made public were monthly reports of its slot-machine revenues. The casino pays a portion of its slots revenue to the state.

The annual report discusses the forces that have caused gaming revenues to decline throughout the Northeast and beyond, namely the weak economic recovery and growing competition, and the steps Foxwoods has taken to combat the trends.

Last March, Foxwoods implemented a "staff reorganization plan" that resulted in a reduction of about 300 employees, about 80 percent of whom voluntarily accepted severance packages. The move reduced payroll costs by $31.8 million, or 8.4 percent, over the previous year, the report says, and left a workforce of about 7,600 workers.

Other operating expenses were trimmed by $23.2 million on a year-over-year basis. The savings were achieved by cutting marketing and promotional expenses, including advertising, headliner fees and casino bus runs, and discontinuing an employee shuttle service, among other things.


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