Foxwoods Resort Casino's current financial straits "raise substantial doubt" about its future operations, auditors wrote in the casino's annual report for the 2014 fiscal year, which ended Sept. 30.

During the year, Foxwoods, owned by the Mashantucket Pequot Tribe, defaulted on the terms of a $1.7 billion debt-restructuring and subsequently struck a "forbearance agreement" with its senior lenders that expires June 30, 2015.

If the agreement is not extended beyond its current expiration date and the lenders "were to exercise certain default-related remedies, those circumstances would negatively impact the operations of the Enterprise," Deloitte & Touche LLP, the firm that audited Foxwoods' financial statements, wrote in a letter to the Mashantucket Pequot Tribal Council, which oversees casino management.

"These matters raise substantial doubt about the Enterprise's ability to continue as a going concern," the auditors wrote.

Annual reports posted online in recent days show revenues at both of Connecticut's Indian casinos - Foxwoods and Mohegan Sun - continued to decline sharply in the last fiscal year.

Foxwoods, which posted its report on the website of the Electronic Municipal Markets Access system, reported that its net revenue for the year totaled $960.1 million, a 7.7 percent drop over the previous year's $1.04 billion.

Mohegan Sun's net revenue fell to $995.1 million in fiscal 2014, down 4.5 percent over fiscal 2013's $1.04 billion. Net revenue for the Uncasville casino's parent, the Mohegan Tribal Gaming Authority, which also operates Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa., fell 3.5 percent to $1.29 billion.

The Mohegan authority filed its results with the U.S. Securities and Exchange Commission.

Both Foxwoods and Mohegan Sun, whose revenues have been declining for years, attributed their most recent losses to the region's weak economic recovery and competition from other gaming facilities in the Northeast.

By a measure the gaming industry considers an especially relevant indicator of financial performance - EBITDA, an acronym that generally stands for earnings before interest, taxes, depreciation and amortization - the numbers reported by the casinos were more dismal.

Foxwoods and Mohegan Sun exclude different non-recurring expenses from their respective EBITDA calculations, making it difficult to compare them. But year-over-year comparisons of each casino's EBITDA totals are useful.

Foxwoods reported EBITDA for fiscal 2014 of $147.4 million, which was down 28 percent over the previous year's $204.8 million. The decline would have been steeper if not for a 2.7 percent reduction in operating expenses, a savings of $22.7 million, the Foxwoods report says.

Mohegan Sun's EBITDA fell 10.6 percent to $251.1 million in fiscal 2014. Overall, the Mohegan gaming authority's EBITDA declined 15 percent over the same period.

"Last year was challenging," Mitchell Etess, the Mohegan authority's chief executive officer, said Wednesday. "We were 'blessed' with incredibly bad weather, and we had low table-games hold (the amount of wagers the casino keeps). On a corporate level, there were a lot of costs associated with Massachusetts."

The authority unsuccessfully sought a casino license for the Greater Boston area, proposing a $1.1 billion project for Revere. Wynn Resorts, which proposed an Everett casino, won the license.

"Overall, we think things are heading in the right direction," Etess said. "The last quarter last year and the quarter we're in have been good."

Attempts to obtain comment from a Foxwoods official were not immediately successful.

In Foxwoods' report, the authors wrote:

"The Enterprise continues to invest in its business and to reduce operating costs to potentially improve its financial performance. Absent either an extension of the Forbearance Agreement or a refinancing or restructuring of the Tribe's debt obligations, present cash flows of the Enterprise, while positive, plus available cash balances are not sufficient to liquidate all of the Tribe's debt if called by the lenders."

Foxwoods' 2013 restructuring resolved issues related to the Mashantuckets' 2009 default on $2.3 billion in debt.

b.hallenbeck@theday.com

Twitter: @bjhallenbeck