FORM 10-Q
(Mark One)
OR
Commission file number 1-8625
READING INTERNATIONAL, INC.
Registrant’s telephone number, including area code: (213) 235-2240
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 twelve 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.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 5, 2003, there were 20,484,805 shares of Class A Nonvoting Common Stock, $0.01 par value per share and 1,336,334 shares of Class B Voting Common Stock, $0.01 par value per share outstanding.
TABLE OF CONTENTS
READING INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
PART I – Financial Information
Item 1 – Financial Statements
Reading International, Inc. and SubsidiariesCondensed Consolidated Balance Sheets (Unaudited)(dollars in thousands)
See accompanying notes to consolidated financial statements.
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Reading International, Inc. and SubsidiariesCondensed Consolidated Balance Sheets (Unaudited)(dollars in thousands, except per share amounts)
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Reading International, Inc. and SubsidiariesCondensed Consolidated Statements of Operations (Unaudited)(dollars in thousands, except per share amounts)
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Reading International, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows (Unaudited)(dollars in thousands)
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Reading International, Inc. and SubsidiariesNotes to Condensed Consolidated Financial Statements (Unaudited)March 31, 2003
Note 1 – Report by Management
Reading International, Inc. and its wholly owned subsidiaries (the “Company”) prepared the accompanying condensed consolidated financial statements following the requirements of the Securities Exchange Commission for interim reporting. As a consequence, these statements do not include all of the information and footnotes required, to be in conformity with generally accepted accounting principles in the United States of America. The financial information provided herein, including the information under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” is written with the presumption that the users of the interim financial statements have read, or have access to, the most recent Annual Report on Form 10-K which contains the latest audited financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2002 and for the year then ended. Certain amounts in previously issued financial statements have been reclassified to conform to the 2003 financial statement presentation.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments of a recurring nature considered necessary for a fair presentation of its financial position as of March 31, 2003 and December 31, 2002, and the results of its operations and its cash flows for the three months ended March 31, 2003 and 2002. The results of operations for the three months ended March 31, 2003 are not necessarily indicative of the results of operations to be expected for the entire year.
Note 2 – Recent Accounting Pronouncements
In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). FIN 46 sets forth the criteria used in determining whether an investment in a variable interest entity (“VIE”) should be consolidated and is based on the general premise that companies that control another entity through interests other than voting interests should consolidate the controlled entity. FIN 46 would require the consolidation of specified VIE’s created before February 1, 2003 in the Company’s September 30, 2003 Form 10-Q. For specified VIE’s created after January 31, 2003, FIN 46 would require consolidation in the Company’s March 31, 2003 Form 10-Q. The Company has not completed its evaluation of the effect that the adoption of FIN 46 will have on its consolidated results of operations and financial position.
In December 2002, the FASB issued Statement No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure” (“FAS 148”). FAS 148 amends Statement No. 123, Stock-Based Compensation (“FAS 123”) to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, FAS 148 amends the requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. As permitted by FAS 123, the Company has elected to follow the intrinsic value method under Accounting Principle Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related interpretations in accounting for its employee
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stock option plans. Under APB 25, no compensation expense is recognized at the time of option grant when the exercise price of the Company’s employee stock options equals the fair market value of the underlying common stock on the date of grant. The disclosure provisions of FAS 148 are effective for periods ending after December 15, 2002. The effects on net loss and loss per common share as if the Company had applied the fair value method to measure stock-based compensation have been incorporated below:
In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 significantly changes the current practice in the accounting for, and disclosure of, guarantees. Guarantees and indemnification agreements meeting the characteristics described in FIN 45 are required to be initially recorded as a liability at fair value. FIN 45 also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the guarantor having to make payment under the guarantee is remote. The disclosure requirements within FIN 45 are effective for financial statements for annual or interim periods ending after December 15, 2002. The initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Company adopted the disclosure provisions of FIN 45 as of December 31, 2002. The adoption did not have a material impact on the Company’s consolidated results of operations and financial position.
In October 2002, the FASB issued Statement of Financial Accounting Standards No. 147, “Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9” (“SFAS 147”). The provisions of SFAS 147 that relate to the application of the purchase method of accounting apply to all acquisitions of financial institutions, except transactions between two or more mutual enterprises. The provisions that require that an unidentifiable excess in a business combination be treated as goodwill rather than as a separate unidentifiable intangible asset apply to all acquisitions of financial institutions. The provisions of SFAS 147 became effective October 1, 2002. Adoption of SFAS 147 did not have a material impact on the Company’s consolidated results of operations and financial position.
In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”). SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. SFAS 146 requires that the initial measurement of a liability be at fair value. SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002 with early adoption
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encouraged. The adoption of SFAS 146 effective January 1, 2003 did not have a material impact on the Company’s consolidated results of operations and financial position.
In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145 “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Correction” (“SFAS 145”). The most significant provisions of this statement relate to the rescission of Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt” and to the amendment of existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under this new statement, any gain or loss on extinguishment of debt that was classified as an extraordinary item in prior presented periods that does not meet certain defined criteria must be reclassified. The adoption of SFAS 145 effective January 1, 2003 did not have a material impact on the Company’s consolidated results of operations and financial position.
Note 3 - Foreign Currency
The Company does not use derivative financial instruments to hedge foreign currency exposure. The carrying value of the Company’s Australian and New Zealand assets will fluctuate due to changes in the exchange rates between the U.S. dollar and Australian dollar and the U.S. dollar and New Zealand dollar.
Note 4 - Earnings per Share
Basic earnings per share is calculated by dividing net earnings applicable to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net earnings applicable to common stockholders by the weighted average common shares outstanding plus the dilutive effect of stock options.
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For the three months ended March 31, 2003 and 2002, the Company recorded a net loss and therefore, the effect of these stock options would have been anti-dilutive. Accordingly, the diluted earnings per share for the three months ended March 31, 2003 and 2002 were calculated using the weighted average number of shares outstanding during the respective periods.
Note 5 - Rental Property and Property and Equipment
The table below sets forth the Company’s investment in rental property and property and equipment as of the dates indicated (dollars in thousands).
The Company had $151,900 in capitalized interest during the three months ended March 31, 2002. There was no interest capitalized during the three months ended March 31, 2003.
Note 6 - Goodwill and Intangible Assets
Goodwill of $5,036,000, net of accumulated amortization of $357,000, consists of the following (dollars in thousands):
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The Company has stopped amortizing its goodwill as of January 1, 2002.
Intangible assets subject to amortization of $14,076,000, net of accumulated amortization of $2,331,000, consist of the following (dollars in thousands):
The Company amortizes its beneficial lease over 20 years and its option fees and acquisition costs over 10 years. For the three months ended March 31, 2002, the amortization expense totaled $344,000. The Company’s intangible assets are all subject to amortization.
Note 7 – Income Tax
The income tax benefit for the three months ended March 31, 2003 amounted to a net $171,000, representing a federal tax refund of $365,000 and a foreign withholding tax provision of $194,000 related to accrued interest from loans to foreign subsidiaries.
Note 8 – Minority Interest
The minority interest is comprised of the following:
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The components of minority interest are as follows (dollars in thousands):
Note 9 – Business Segments
The Company is primarily engaged in two segments: (1) cinema and live theater ownership and operation and (2) development, ownership and operation of real estate assets. As a result, the Company has two reportable segments: (1)cinema/live theater and (2) rental/real estate. The cinema/live theater results shown below include revenue and operating expense directly linked to the Company’s cinema and theater assets. The rental/real estate results include rental income from properties owned by the Company offset by operating expense, including mortgage payments and interest. Corporate results include interest income earned with respect to the Company’s cash balances, and other income (expense). The table below sets forth certain information concerning the Company’s cinema/live theater and rental/real estate operations for the three months ended March 31, 2003 and 2002 (dollars in thousands).
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Note 10 - Comprehensive Income
Generally accepted accounting principles require the Company to classify unrealized gains and/or losses on available-for-sale (“AFS”) securities and the effect of the foreign currency translation adjustments as comprehensive income. The following table sets forth the Company’s comprehensive income for the periods indicated (dollars in thousands):
Note 11 – Other Expense (Income)
Other expense (income) is comprised of the following (dollars in thousands):
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Note 12 – Subsequent Event
Settlement of Village Law Suit
On December 16, 2001, Reading entered into Principles of Settlement with respect to the settlement of two lawsuits between Reading, as plaintiff, and Village Cinemas Australia Pty, Ltd., Birch Carroll & Coyle Ltd., AMP Life Limited, as defendants, and between Reading, as plaintiff, and Roadshow Film Distributors Pty Ltd, as defendant. Village and Birch Carroll & Coyle, when considered on a consolidated basis with its affiliate Greater Union, are two of the three largest exhibition companies in Australia. AMP is an insurance company and, through its affiliates, a major commercial landlord in Australia. Roadshow is a major film exhibitor in Australia. The settlements resolve a variety of claims on the part of Reading asserting various violation of Australian trade antitrust and trade practice laws and, in the case of its claim against AMP, alleged breach of an agreement to lease a multiplex cinema complex to Reading.
The Principles of Settlement provides that:
The parties are currently negotiating definitive settlement documentation implementing the agreements set forth in the Principles of Settlement. The transaction is anticipated to close in the second quarter of 2003.
Sale of Certain Coal Interests and Settlement of Associated Litigation
Included among Reading’s historic properties is an interest in certain proven anthracite coal deposits located in Pennsylvania. In April, the Company entered into a settlement agreement pursuant to which it has agreed to sell its rights in those coal deposits in exchange for $525,000 plus a royalty interest in any coal extracted from the site. It is anticipated that this transaction will close in the second quarter of 2003. The scope and extent of the Company’s interest is disputed by the local municipality, and the purchaser has agreed to assume the defense of those claims. In the event that it should be
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determined that the municipality and not the Company is the owner of these coal deposits, then the Company’s obligation is limited to the return of the $525,000 together with interest fixed as LIBOR at the date of closing of the Settlement Agreement.
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Reading International is in the business of owning and operating cinemas and live theaters and developing, owning and operating real estate assets. Our business consists primarily of:
We manage our worldwide cinema business under various different brands:
Our business plan is to continue to identify, develop and acquire cinema and live theater properties, focusing on those opportunities where we can acquire either the fee interest underlying such operating assets, or long term leases, which provide flexibility with respect to the usage of such leasehold estates. In the near term, we are focusing principally on the operation of our existing cinema and live theater assets, and on the development of five parcels of undeveloped real estate in Melbourne and Sydney in Australia and in Wellington in New Zealand. We anticipate that over the remainder of the year, we will add a 6-screen cinema in Christchurch, New Zealand (owned in an unincorporated joint venture with our partner as a part of our Berkeley Cinemas chain in New Zealand) and close on the acquisition of a one-third undivided interest in an existing 16-screen cinema in suburban Brisbane, Australia. We have also been retained to manage a new art cinema (which will be operated under our Angelika name) in Plano, Texas.
We plan to dispose of our interests in Puerto Rico and our interests in assets not core to our cinema, live theater and real estate businesses. To this end, we achieved the following since the end of 2002:
1. Reduction of General and Administrative Expense
As part of our ongoing drive to reduce general and administrative expense and notwithstanding our commitment to sell our Puerto Rico circuit, we consolidated our Puerto Rican administrative support functions into our corporate office in Los Angeles, California. This consolidation will allow us to reduce our annual general and administrative expense by approximately $170,000.
2. Disposition of Non-core Assets
In April 2003, we entered into an agreement to sell for $525,000 plus an ongoing royalty right, our interest in certain anthracite coal deposits in Pennsylvania.
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Results of Operations
At March 31, 2003, we operated thirty-four cinemas with 222 screens and four live theatres comprising seven stages. Along with the three ETRC’s that we developed in Australia and New Zealand, we have fee interests in five developed commercial properties in the United States, and hold for development an additional five parcels (aggregating approximately 60 acres) in urbanized areas of Australia and New Zealand.
The tables below summarize the results of operations for each of our principal business segments for the three months ended March 31, 2003 (“2003 Quarter”) and for the three months ended March 31, 2002 (“2002 Quarter”) (dollars in thousands). Operating expense includes costs associated with the day-to-day management of the theaters and rental properties.
Cinema / Live Theater
The 2003 and 2002 Quarter net income for the cinema and live theater segment are not entirely comparable due to the fact that:
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The significant segment fluctuations were the following:
Our live theaters’ rental weeks were ahead of the 2002 Quarter – 70 theater weeks rented in the 2003 Quarter compared to 65 theater weeks rented in the 2002 Quarter. The theaters are currently running the following shows:
Rental / Real Estate
For the 2003 Quarter, our rental generating real estate holdings consisted of:
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The Wellington ETRC opened in March 2002 and as a result, only ten days of operation of this center was included in the 2002 Quarter results. The rental space in the Wellington Center is now approximately 90% leased (75% excluding the cinema space which is occupied by our own cinema). The ancillary retail space at our Perth and Auburn ETRC’s is now approximately 72% leased. We own certain tracts of land which are currently being evaluated for future development or sale, namely:
The $46,000 decrease in the 2003 Quarter real estate net income is primarily due to the increased depreciation expense attributable to the Courtenay Central ETRC, which opened in March 2002.
Corporate
The revenue for the 2002 Quarter is entirely comprised of fees earned for our agricultural activities which we disposed of in July 2002.
Expense includes general and administrative expense that is not directly attributable to other operating segments.
Corporate other expense is comprised of:
The $1,169,000 increase in other expense is primarily due to:
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Business Plan, Capital Resources and Liquidity
Business Plan
Our business plan is to continue to identify, develop and acquire cinema and live theater properties, focusing on those opportunities where we can acquire either the fee interest underlying such operating assets, or long term leases, which provide flexibility with respect to the usage of such leasehold estates. We intend to focus on acquisitions and development activities in Australia and New Zealand as we believe that there are currently better opportunities in these markets than domestically. We intend to dispose of our interest in Puerto Rico and have already disposed of all of our agricultural interests and assets. From time to time we may dispose of, or put to alternative use, our interest in various operating assets, in order to realize the real estate values of such assets.
Liquidity and Capital Resources
Our ability to generate sufficient cash flows from operating activities in order to meet our obligations and commitments drives our liquidity position. This is further affected by our ability to obtain adequate, reasonable financing and/or to convert non-performing or non-strategic assets into cash.
Currently, our liquidity needs arise mainly from:
Operating Activities
Cash used in operations was $1,058,000 in the 2003 Quarter compared with $379,000 in the 2002 Quarter. The change of $679,000 is primarily due to a pay down of our film rent payable.
Investing Activities
Cash used in investing activities during the 2003 Quarter was $64,000 compared to $5,436,000 during the 2002 Quarter. The change of $5,372,000 is primarily due to $4,342,000 decrease in capital purchases in the 2003 Quarter reflecting the completion of the Wellington ETRC and the absence of borrowing to finance other construction activities. Also, the 2002 Quarter included $714,000 in recovery of debt previously written off from the agricultural partnerships which will be non-recurring in nature, since we have discontinued our agricultural operations and disposed of our agricultural assets.
Financing Activities
Cash used in financing activities was $716,000 in the 2003 Quarter compared to $1,820,000 of cash provided by financing activities in the 2002 Quarter. The decrease of $2,536,000 is primarily due to a $1,928,000 decrease in new bank borrowings in New Zealand due to the completion of the Wellington ETRC and the absence of any construction activities during the 2003 Quarter requiring financing from sources other than cash on hand. Also, there was a global $608,000 increase in repayment of debt and minority distributions during the 2003 Quarter.
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Summary
Our cash position at March 31, 2003 was $18,520,000. Our working capital, contrary to the industry norm, is positive at $483,000 which is up from $124,000 at March 31, 2002. Since the 2002 Quarter, we put into place several measures that are expected to have a positive effect on our overall liquidity, namely:
Potential uses for funds during 2003 that would reduce our liquidity, other than those relating to working capital needs and debt service requirements include:
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Based upon the current levels of the consolidated operations, anticipated cost savings and future growth, we believe our cash flow from operations, together with both the existing and anticipated lines-of-credit and other sources of liquidity (including future potential asset sales) will be adequate to meet our anticipated requirements for interest payments and other debt service obligations, working capital, capital expenditures and other operating needs. There can be no assurance, however, that the business will continue to generate cash flow at or above current levels or that estimated cost savings or growth can be achieved. Future operating performance and our ability to service or refinance existing indebtedness, will be subject to future economic conditions and to financial and other factors, such as access to first-run films, many of which are beyond our control. If our cash flow from operations and/or proceeds from anticipated borrowings should prove to be insufficient to meet our funding needs, our current intention is either:
At the present time, included among the assets that are securing our AUS$30,000,000 loan facility are the Company’s 50-acre Burwood property, which the Company believes to have a present value of approximately AUS$27,000,000, and the Company’s 3-acre Newmarket property, which the Company believes to have a present value of approximately AUS$5,500,000. In light of Australian operating losses incurred by the Company as its has broken into the Australian market, these assets could be liquidated without the payment of any income taxes.
Forward-Looking Statements
This quarterly report contains forward-looking statements regarding, among other items:
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These forward-looking statements are based on our expectations and are subject to a number of risks and uncertainties, some of which are beyond our control. These risks and uncertainties include, but are not limited to:
Although we believe we have the exhibition and real estate resources to achieve our objectives, actual results could differ materially from those anticipated by these forward-looking statements. There can be no assurance that events anticipated by these forward-looking statements will in fact transpire as expected.
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Item 3 – Quantitative and Qualitative Disclosure about Market Risk
The Securities and Exchange Commission requires that registrants include information about potential effects of changes in currency exchange and interest rates in their filings. Several alternatives, all with some limitations, have been offered. The following discussion is based on a sensitivity analysis, which models the effects of fluctuations in currency exchange rates and interest rates. This analysis is constrained by several factors, including the following:
Although the results of such an analysis may be useful as a benchmark, they should not be viewed as forecasts.
At March 31, 2003, approximately 44% and 17% of our assets were invested in assets denominated in Australian dollars (Reading Australia) and New Zealand dollars (Reading New Zealand), respectively, including $14,928,000 in cash and cash equivalents that were denominated in Australian and New Zealand dollars. At December 31, 2002, approximately 43% and 16% of our assets were invested in assets denominated in Australian dollars (Reading Australia) and New Zealand dollars (Reading New Zealand), respectively, including $15,175,000 in cash and cash equivalents.
Our policy in Australia and New Zealand is to match revenue and expenses, whenever possible, in local currencies. As a result, a majority of our expenses in Australia and New Zealand have been procured in local currencies. Due to the developing nature of our operations in Australia and New Zealand, our revenue is not yet significantly greater than our operating expense. The resulting natural operating hedge has led to a neglible foreign currency effect on our earnings.
Our policy is to borrow in local currencies to finance the development and construction of our ETRC’s in Australia and New Zealand whenever possible. As a result, the borrowings in local currencies have provided somewhat of a natural hedge against the foreign currency exchange exposure. Even so, approximately 72% and 36% of our Australian and New Zealand assets, respectively, remain subject to such exposure unless we elect to hedge our foreign currency exchange between the U.S. and Australian and New Zealand dollars. At the present time, we have no plan to hedge such exposure.
Commencing in 2002, we also began recognizing unrealized foreign currency translation gains or losses which could materially affect our financial position. For the three months ended March 31, 2003 and for the year ended December 31, 2002, we have recorded an unrealized foreign currency translation gain of approximately $5,185,000 and $7,787,000, respectively.
Historically, we maintained most of our cash and cash equivalent balances in short-term money market instruments with original maturities of six months or less. Some of our money market investments may decline in value if interest rates increase. Due to the short-term nature of such investments, a change of 1% in short-term interest rates would not have a material effect on our financial condition.
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Item 3A – Quantitative and Qualitative Disclosure about Interest Risk
The majority of our Australian and New Zealand bank loans have variable rates and a change of approximately 1% in short-term interest rate would have resulted in approximately $355,000 increase or decrease in our 2003 interest expense.
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Item 4 – Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.
There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.
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PART II – Other Information
Item 1 - Legal Proceedings
Item 2 - Change in Securities
Item 3 - Defaults upon Senior Securities
Item 4 - Submission of Matters to a Vote of Securities Holders
Item 5 - Other Information
Item 6 - Exhibits and Reports on Form 8-K
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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CERTIFICATIONS
PURSUANT TO SECTION 307 OF THE SARBANES-OXLEY ACT OF 2002
I, James J. Cotter, certify that:
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I, Andrzej Matyczynski, certify that:
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PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Reading International, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, James J. Cotter and Andrzej Matyczynski, the Chief Executive Officer and the Chief Financial Officer, respectively, of the Company, each certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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