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Oct 15, 2013 - TMT companies have raised US$77.0 billion, a 14% increase from the ... Apple tapped the bond market in Ap
DEALS INTELLIGENCE October 15, 2013

DEAL MAKING: TECHNOLOGY MEDIA TELECOMS HEADLINES INVESTMENT BANKING FEES – Fees for global investment banking services in the TMT sector, covering Technology, Media & Entertainment, and Telecommunications, total US$8.1 billion so far during 2013, marking a 22% increase over the same period last year and the strongest year-to-date period for fees in the region since 2007. Advisory fees from completed M&A transactions total US$2.2 billion, accounting for 27% of the 2013 TMT fee pool, down from 37% at this time last year. M&A was the only asset class to witness a decline in fees, down 13% year-on-year. Fees from debt capital markets underwriting drove activity in the sector, up 47% from this time last year to US$2.3 billion, the highest year-to-date total since our records began in 2000. Fees from syndicated lending increased 49% from last year to US$2.2 billion, while equity capital markets underwriting fees increased 28% to reach US$1.5 billion. Combined, deals in the TMT sector generated 14% of total global investment banking fees earned so far this year, up from 12% last year at this time. JP Morgan leads the investment banking fee ranking in the TMT sector so far during 2013, with US$813.5 million, or 10.1% of overall wallet-share. Bank of America Merrill Lynch earned second place with US$622.3 million, or a 7.7% cut. MERGERS & ACQUISITIONS – Announced M&A transactions in the TMT sector total US$502.0 billion so far during 2013, up 71% compared to the same period in 2012 (US$293.6 billion), and marking the highest year-to-date level in the sector since 2007. Verizon’s US$130.1 billion purchase of Vodafone’s 45% stake in the Verizon Wireless joint venture in September is the largest deal in the sector so far this year. The telecoms deal is the third largest M&A transaction of all time and it is estimated that 8 banks will share a combined total of US$178.6 million in M&A fees for their advisory work. The United States is the most active nation, with 63% of all TMT M&A involving a US-based target and 61% involving a US buyer. Germany and China are the next most popular targets, accounting for 7% and 6% of sector activity, respectively. TMT deals account for 28% of total worldwide announced M&A so far this year, up from 17% last year. Of the sixteen mega deals (US$10+ billion) so far this year, nine deals worth a combined US$271.9 billion were in the TMT sector. Goldman Sachs leads the TMT M&A financial advisor ranking so far during 2013 with US$294.7 billion from 55 deals. JP Morgan follows in second place with US$248.8 billion. EQUITY CAPITAL MARKETS - Equity and equity-linked issuance by companies in the TMT sector accounts for 14% of global equity capital markets activity so far this year. TMT companies have raised US$77.0 billion, a 14% increase from the same period in 2012 (US$67.3 billion) and the highest year-to-date total in the sector since 2007. Follow-on offerings account for 67% of activity, while IPOs and convertible offerings each account for 17%. With 106 deals worth a combined US$24.7 billion, the US is the most active nation for issuance in the TMT sector with 32% of the market. The next most active nation is the Netherlands, with 6 deals totalling US$7.9 billion and accounting for 10% of the sector. The US$4.0 billion follow-on from Dutch telecoms company Koninklijke KPN NV is the largest equity offering in the TMT sector so far this year. Goldman Sachs tops the year-to-date TMT ECM league table, with 10.7% of the market. JP Morgan follows in second place with a 10.4% share. DEBT CAPITAL MARKETS – Bond issuance in the TMT sector totals US$301.7 billion so far during 2013, 51% more than the same period last year (US$200.0 billion), and marking the highest year-to-date total in the sector of all time. Apple tapped the bond market in April with a US$17.0 billion bond that was the largest non-financial corporate bond offering of all time, until Verizon took the title in September with its US$48.9 billion bond. TMT DCM accounts for 7.3% of total global debt capital markets activity so far during 2013. Issuance from the United States totals US$169.2 billion and accounts for 56% of activity so far this year, while issuance from Japan accounts for 8.5%. Deutsche Bank tops the YTD 2013 global TMT sector debt ranking, with US$28.6 billion for a 9.5% share of the market. JP Morgan takes second place with US$25.9 billion.

INVESTMENT BANKING FEES Global TMT Investment Banking Fees by Product 20,000

40%

37.9%

18,000

35% 1,617

16,000

1,304

30%

14,000 Fees (US$ mil)

24.0%

25%

12,000 14.8%

10,000 990 1,440

8,000

6,000

16.1%

9,758 3,275

4,000 SCORECARD

943 716

3,727

14.2%

13.7%

1,285

1,416 703

1,072 811

741

2,146

1,060

838

1,978

2,564

1,929

1,853

2,010

2,304

1,954

1,730

2,006

2,000 4,599

15.1%

11.8%

2,141

20% 12.9% 10.6%

10.4%

984 714 798

746 1,341

1,167

12.6%

13.6% 11.6%

2,214

1,870

1,592

1,466

1,496

1,479

1,539

2,260

1,131

1,452

2,487

2,160

1,535 2,993

4,283

4,015

3,399

1,542

3,074

3,003

15%

1,487

0

10% 5% 0%

YTD 2000 YTD 2001 YTD 2002 YTD 2003 YTD 2004 YTD 2005 YTD 2006 YTD 2007 YTD 2008 YTD 2009 YTD 2010 YTD 2011 YTD 2012 YTD 2013

MA

EQUITY

BONDS

LOANS

Global Investment Banking Fees by Sector, YTD

Sector Financials Energy and Power Industrials Real Estate Materials Healthcare High Technology Consumer Staples Telecommunications Media and Entertainment Consumer Products and Services Government and Agencies Retail TMT Total Grand Total

Share of Wallet 31.8% 12.0% 9.5% 7.1% 6.2% 5.1% 5.0% 4.6% 4.4% 4.2% 3.9% 3.6% 2.6% 13.6% 100%

Sector as % of Global Fee Total

Global TMT Investment Banking Fees: Top Banks by Fees, YTD

Fees (US$ mil) 18,909 7,163 5,623 4,211 3,679 3,058 2,990 2,726 2,615 2,480 2,334 2,117 1,568 8,085 59,473

YTD Rank 1 2 3 4 5 6 7 8 9 10

% Chg YTD 2% -11% -1% 42% -13% -2% -3% 27% 49% 38% 23% -19% 2% 22% 4%

1

Bank JP Morgan Bank of America Merrill Lynch Goldman Sachs & Co Morgan Stanley Deutsche Bank Credit Suisse Citi Barclays RBC Capital Markets Wells Fargo & Co Total

Share of Wallet 10.1% 7.7% 7.6% 6.7% 5.8% 5.2% 4.4% 4.3% 2.3% 2.2% 100%

Fees (US$ mil) 813.5 622.3 616.5 538.7 472.3 417.6 358.8 344.6 186.1 181.0 8,085.1

DEALS INTELLIGENCE October 15, 2013

DEAL MAKING: TECHNOLOGY MEDIA TELECOMS MERGERS & ACQUISITIONS Worldwide Announced M&A: Most Targeted Sectors, YTD

Worldwide Announced TMT Target M&A: Advisor Ranking, YTD

Value Mkt. Number (US$ mil) Share (%) of Deals 255,511 14.3 490 240,155 13.4 2,097 222,699 12.5 2,082 162,541 9.1 2,951 157,892 8.8 3,837 151,262 8.5 1,665 128,943 7.2 3,432 117,514 6.6 1,975 113,091 6.3 2,822 110,395 6.2 1,766 75,145 4.2 1,316 52,091 2.9 2,672 501,969 28.1 5,897 1,787,370 100.0 27,132

Target Macro Sector Telecommunications Energy and Power Real Estate Financials Industrials Healthcare High Technology Media and Entertainment Materials Consumer Staples Retail Consumer Products and Services TMT Total Industry Total

% Chg YTD 215% -19% 48% -30% -9% 26% 3% 35% -40% -30% -1% -17% 71% 2%

YTD YTDLY Financial Advisor Rank Rank 1 1 Goldman Sachs & Co 2 2 JP Morgan 3 7 Bank of America Merrill Lynch 4 3 Morgan Stanley 5 10 Barclays 6 4 UBS 7 49 Guggenheim Securities LLC 8 Paul J Taubman 9 6 Deutsche Bank 10 8 Citi Industry Total

Worldwide Announced TMT Target M&A Volumes 9000

800

8000

Value (US$ bil)

142

6000 -

500

300

5000

225 50

400

87

150 51

75

4000 104

3000

$77,185 $27,541

2000

100

1000

$35,797

235 317 437 602 572 405 200 342 326 294 502 -

(US$ mil)

$27,940

150

200

$160,157

$173,349

7000

Number of Deals

700

600

Mkt. Share Number (%) of Deals 58.7 55 49.6 43 47.4 34 42.1 42 36.6 18 36.3 25 27.0 5 25.9 1 17.1 34 13.6 40 100.0 5,897

WW Announced TMT Target M&A: Mid Sector Breakdown, YTD

900

225

Value (US$ mil) 294,736 248,835 237,947 211,356 183,599 182,332 135,465 130,100 85,676 68,362 501,969

Wireless (31.9%)

Telecommunications Services (15.4%)

Software (7.1%)

Computers & Peripherals (5.6%)

Broadcasting (5.5%)

Other (34.5%)

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Year-to-date

Rest of Year

Number of Deals, YTD

WW Announced TMT Target M&A: Most Acquisitive Nations, YTD United States of America

WW Announced TMT Target M&A: Most Targeted Nations, YTD United States of America

$303,637

$315,376

United Kingdom

$29,081

Germany

France

$28,523

China

$27,450

China

$25,547

Netherlands

$24,549

Mexico

$23,255

Other

Portugal

(US$ mil)

Other

$91,926

$36,362

$15,048

(US$ mil) $83,184

Worldwide Announced TMT Target M&A Top Deals, YTD

Value Rank Date Status (US$ mil) 130,100 2-Sep-13 Pending

Target Verizon Wireless Inc

25,531

5-Feb-13 Completed Virgin Media Inc

22,659

9-Aug-13 Intended

Koninklijke KPN NV

19,331

28-Jul-13 Pending

Omnicom Group Inc

Target Nation United States

Target Sector

Acquiror

Target Advisors

Acquiror Advisors

Wireless

Verizon Communications Inc

Goldman Sachs & Co UBS Investment Bank

Liberty Global Inc

Goldman Sachs & Co JP Morgan Goldman Sachs & Co ABN AMRO Bank NV Moelis & Co Morgan Stanley JP Morgan

Barclays Bank of America Merrill Lynch Guggenheim Partners LLC JP Morgan Morgan Stanley Paul J Taubman LionTree Advisors LLC Credit Suisse Group Deutsche Bank

United Telecommunications States Services Netherlands Telecommunications Services United Advertising & States Marketing

2

America Movil SAB de CV Publicis Groupe SA

Rothschild Bank of America Merrill Lynch BNP Paribas SA Citi Deutsche Bank JP Morgan

DEALS INTELLIGENCE October 15, 2013

DEAL MAKING: TECHNOLOGY MEDIA TELECOMS EQUITY CAPITAL MARKETS Global ECM: Sector Breakdown, YTD

Global TMT Sector ECM: Bookrunner Ranking, YTD

Value Mkt. Number (US$ mil) Share (%) of Issues 118,308 21.3 356 81,751 14.7 364 71,199 12.8 326 64,555 11.6 364 41,377 7.5 348 35,619 6.4 401 30,314 5.5 328 28,669 5.2 135 25,520 4.6 169 23,386 4.2 115 21,459 3.9 105 12,282 2.2 51 77,046 13.9 514 554,441 100.0 3,063

Issuer / Borrower Macro Sector Financials Real Estate Energy and Power Industrials High Technology Materials Healthcare Consumer Staples Consumer Products and Services Media and Entertainment Retail Telecommunications TMT Total Industry Total

% Chg YTD -17% 61% 10% 27% -4% 19% 46% 87% 121% 105% 12% -5% 14% 17%

YTD YTDLY Bookrunner Rank Rank 1 4 Goldman Sachs & Co 2 2 JP Morgan 3 1 Morgan Stanley 4 5 Deutsche Bank 5 3 Credit Suisse 6 9 UBS 7 8 Barclays 8 7 Bank of America Merrill Lynch 9 6 Citi 10 17 Nomura Industry Total

Global TMT Sector ECM Volumes

140

800

900 800

100

30

700 37

600

35

28 30 44

80

500

18

27

29

60

400

16

300

5

40

200

20

10

80

600 18

60

105

95

79

97

38

55

65

51

67

55 62

51

20

32

32

19

28

30

7

8

300 200 100

9

19

15

29

11

13

12

13

-

Rest of Year

400 16

46

8

YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD YTD 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Year-to-date

11

500

29

21 43

40

43

77

-

13

35

100 87

700

25

24

Proceeds (US$ bil)

100

120

Number of Issues, YTD

CVT

Global TMT Sector ECM: Regional Breakdown, YTD

FO

IPO

# Issues YTD

Global TMT Sector ECM: Top 5 Issuing Nations, YTD

$4,663 $1,526

$28,110

United States of America (32.0%)

(US$ mil)

$24,668

Netherlands (10.2%)

$26,988

$7,876

China (7.0%)

$5,416

$15,758

Japan (6.1%) Americas (36.5%)

Asia-Pacific (ex Central Asia) (20.5%)

Europe (35.0%)

Japan (6.1%)

United Kingdom (3.6%)

$4,663 $2,795

Other (41.1%)

Africa/Middle East/Central Asia (2.0%)

Global TMT Sector ECM: Top Deals, YTD

Proceeds Issue Date (US$ mil) 3,957 14-May-13

Issuer

Domicile

Issue Type

Currency

Bookrunners

Koninklijke KPN NV

Netherlands

Follow-On

EURO

1,707 29-Apr-13

RTL Group SA

Luxembourg

Follow-On

EURO

1,380 4-Sep-13

LinkedIn Corp

United States

Follow-On

U.S. Dollar

1,289 19-Mar-13

Ziggo NV

Netherlands

Follow-On

EURO

Deutsche Bank AG Goldman Sachs International JP Morgan ABN AMRO ING Rabobank International Deutsche Bank Morgan Stanley Bank of America Merrill Lynch Citi Credit Suisse Goldman Sachs International JP Morgan Morgan Stanley & Co Goldman Sachs & Co Bank of America Merrill Lynch Barclays PLC

1,282 22-Jul-13

Dentsu Inc

Japan

Follow-On

Japanese Yen

Nomura Securities

3

(US$ mil) $31,626

Number of Issues

900

Number of Issues

Proceeds (US$ bil)

Global TMT Sector ECM Volumes: YTD by Issue Type

160

120

Proceeds Mkt. Number (US$ mil) Share (%) of Issues 8,202 10.7 49 8,040 10.4 49 7,780 10.1 53 7,215 9.4 48 5,635 7.3 49 4,485 5.8 32 3,954 5.1 28 3,878 5.0 36 3,635 4.7 31 2,676 3.5 15 77,046 100.0 514

DEALS INTELLIGENCE October 15, 2013

DEAL MAKING: TECHNOLOGY MEDIA TELECOMS DEBT CAPITAL MARKETS Global DCM: Sector Breakdown, YTD

Global TMT Sector DCM: Bookrunner Ranking, YTD

Value Mkt. Share Number (US$ mil) (%) of Issues 1,870,139 45.1 4,907 961,324 23.2 2,081 336,397 8.1 679 207,673 5.0 621 160,360 3.9 117 127,172 3.1 346 88,333 2.1 205 80,054 1.9 121 78,766 1.9 372 62,872 1.5 91 61,311 1.5 108 55,183 1.3 123 54,439 1.3 188 301,725 7.3 346 4,144,022 100.0 9,959

80

300

70

30

40 30

20

20

Global TMT Sector DCM: Regional Breakdown, YTD

14.6

17.5

17.0

29.9

37.2

43.5

38.5

20.6

28.0

35.1

25.9

27.8

22.3

17.4

23.8

18.4

82.0 Sep13

Aug13

Jul13

Jun13

May13

Apr13

Mar13

Feb13

Jan13

Dec12

Nov12

Oct12

Sep12

Aug12

Jul12

Jun12

Number of Issues, YTD

10.5

-

May12

0

10 24.1

10

Apr12

Rest of Year

40

50

50

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Year-to-date

60

34.7

302

200

198

179

204

125

132

153

-

50

Jan12

33

31 27

150 100

104

82

101

50

40

100

Proceeds (US$ bil)

40

50

63 53

250 200

150 30

Proceeds (US$ bil)

200

60

Proceeds (US$ bil) Number of Issues

Number of Issues

350 Number of Issues

90

300 82

400

250

Proceeds Mkt. Number (US$ mil) Share (%) of Issues 28,637 9.5 87 25,879 8.6 94 21,207 7.0 81 19,970 6.6 56 19,631 6.5 62 19,351 6.4 62 17,321 5.7 68 16,112 5.3 57 14,514 4.8 45 10,160 3.4 23 301,725 100.0 346

Global TMT Sector DCM Volumes: Monthly

350

Mar12

Global TMT Sector DCM Volumes: Annually

13.9

Financials Government and Agencies Energy and Power Industrials Telecommunications Materials Consumer Staples High Technology Real Estate Healthcare Media and Entertainment Retail Consumer Products and Services TMT Total Industry Total

YTD YTDLY Bookrunner Rank Rank 1 1 Deutsche Bank 2 2 JP Morgan 3 3 Bank of America Merrill Lynch 4 8 Goldman Sachs & Co 5 4 Morgan Stanley 6 5 Barclays 7 6 Citi 8 7 Credit Suisse 9 10 RBS 10 14 RBC Capital Markets Industry Total

Feb12

Issuer / Borrower Macro Sector

% Chg YTD -9% 0% -5% 11% 82% -18% -7% 88% 27% -6% -11% 21% -10% 51% -2%

-

Global TMT Sector DCM: Top 5 Issuing Nations, YTD (US$ mil)

$25,541

United States of America (56.1%)

$19,679

Japan (8.5%)

$169,173 $25,541

$68,035 United Kingdom (5.1%)

$188,471

Americas (62.5%)

Europe (22.6%)

Asia-Pacific (ex Central Asia) (6.5%)

Japan (8.5%)

$15,320

Canada (3.6%)

$10,702

Netherlands (3.4%)

$10,291

Other (23.3%)

(US$ mil) $70,699

Global TMT Sector DCM: Top Deals, YTD

Proceeds Issue Date Issuer (US$ mil) 48,932 11-Sep-13 Verizon Communications Inc

16,958 6,500

5,967 5,493

30-Apr-13 Apple Inc 4-Sep-13 Sprint Corp

11-Feb-13 Vodafone Group PLC 3-Jun-13 EMC Corp

Domicile

Description

Currency

Bookrunners

United States 6.550% Sr Unsecurd Nts due '43

U.S. Dollar Barclays PLC, Bank of America Merrill Lynch, JP Morgan, Morgan Stanley & Co, Citi, Credit Suisse, Mizuho Securities Co Ltd, Mitsubishi UFJ Securities Co, Royal Bank of Canada, RBS, Wells Fargo Bank NA

United States 2.400% Global Notes due '23

U.S. Dollar Goldman Sachs & Co Deutsche Bank Securities Corp U.S. Dollar JP Morgan, Deutsche Bank Securities Corp, Bank of America Merrill Lynch, Citi, Credit Agricole CIB, Credit Suisse, Goldman Sachs & Co, RBC Capital Markets, Scotia Capital (USA) Inc., Wells Fargo Bank NA, Williams Capital Group LP

Japan

7.875% Senior Notes due '23

United 2.950% Sr Unsecurd Nts due '23 Kingdom United States 1.875% Global Notes due '18

4

U.S. Dollar Barclays, HSBC Bank USA, JP Morgan, Morgan Stanley & Co, Mitsubishi UFJ Securities USA U.S. Dollar Citi, JP Morgan, Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Corp, Goldman Sachs & Co, Morgan Stanley & Co, RBS, UBS Investment Bank, Wells Fargo Bank NA

DEALS INTELLIGENCE October 15, 2013

DEAL MAKING: TECHNOLOGY MEDIA TELECOMS CONTACTS Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets, powered by the world’s most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. For more information, go to www.thomsonreuters.com Thomson Reuters Deals Intelligence, a part of Thomson Reuters Banking & Research division, brings up to the minute market intelligence to our clients and the financial media through a variety of research reports including Daily Deals Insight, weekly Investment Banking Scorecard, and our industry-leading quarterly reviews highlighting trends in M&A and Capital Markets. For more information, go to: http://dmi.thomsonreuters.com

@dealintel Contact Information: Americas: Matthew Toole I (646)-223-7212 I [email protected] EMEA: Lucille Quilter I +44 (0) 207-542-4372 I [email protected] Asia: Elaine Tan l +632 858 4387 l [email protected] GLOSSARY * TMT - Includes High Technology, Media & Entertainment, and Telecoms. * YTD - Year-to-date. January 1st to October 10th, 2013. * YTDLY - Year-to-date last year. January 1st to October 10th, 2012. * FEES- fees are calculated using Freeman & Co. proprietary algorithm where spreads or fees are not disclosed. Deal fees are on a gross basis before all expenses. Each underwriter or advisor is allocated its share of deal fees using Freeman & Co. allocation methodology, based on the number of underwriters or advisors on the deal and their role. No fees are allocated to syndicated members. Industry totals include fees on deals with undisclosed advisors. * M&A- The Thomson Reuters Mergers & Acquisitions database tracks changes in economic ownership at ultimate parent level in going business concerns. All deals involving a purchase of at least a 5% stake, or 3% with a value of at least US$1 million are tracked, subject to criteria. League tables include rank eligible mergers, acquisitions, repurchases, spin-offs, self-tenders, minority stake purchases and debt restructurings. League tables, commentary, and charts citing announced activity are based on Rank Date and include intended, pending, partially complete, completed, pending regulatory, and unconditional transactions. Rank Date is defined as the earliest public announcement of when a value can be applied to a transaction. * ECM- The Thomson Reuters Equity Capital Markets database covers domestic and international placements of equity offerings in addition to domestic and international equity-related transactions. This includes IPOs, follow-on offerings, accelerated bookbuilds and block trades (with certain restrictions) and convertible bonds. Convertible Bonds with a minimum life of less than 360 days are excluded. Minimum life defined as the difference between the settlement date and the earliest maturity date or first call/put option. * DCM- The Thomson Reuters Debt Capital Markets database covers underwritten debt with an issue size of over US$1 million, that matures in at least 360 days from settlement. It includes all internationally offered underwritten debt transactions in all currencies, Domestic issuance, Preferred Securities, High Yield and Emerging Market transactions that are offered in US and Globally, Asset Backed Securities, Mortgage Backed Securities, Collateralized Debt Obligations (CDOs), MTN takedowns and Certificate of Deposits, except in UK. Primary offerings only. All league tables are based on deal proceeds (total issue amount multiplied by the issue price) unless otherwise stated. Full credit is given to the bookrunner, equal if joint books. In cases of underwriter consolidation, credit is given to the surviving/parent firm. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement.

While Thomson Reuters has used reasonable endeavors to ensure that the information provided in this document is accurate and up to date as at the time of issue, neither Thomson Reuters nor its third party content providers shall be liable for any errors, inaccuracies or delays in the information, nor for any actions taken in reliance thereon, nor does it endorse any views or opinions of any third party content provider. Thomson Reuters disclaims all warranties, express or implied, as to the accuracy or completeness of any of the content provided, or as to the fitness of the content for any purpose to the extent permitted by law. The content herein is not appropriate for the purposes of making a decision to carry out a transaction or trade and does not provide any form of advice (investment, tax, legal) amounting to investment advice, nor make any recommendations or solicitations regarding particular financial instruments, investments or products, including the buying or selling of securities. Thomson Reuters has not undertaken any liability or obligation relating to the purchase or sale of securities for or by any person in connection with this document.

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