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November 2, 2001 Headlines--- Special: Making yearend tax decisions and Equipment Leasing UAEL By-Laws Hypocrisy?????? United Association of Equipment Leasing Budget/Financial Statement Huntington Forms Equipment Finance Division Leasing Group/ Neff Rental Financing Solutions Nationwide Locations Central Leasing Hybrid ABS, Loan Assigned Preliminary Ratings Sunrise International Leasing Reports Strong Third-Quarter Results Worldwide semiconductor sales fall 44.6 percent in September ---but signs of improvement Monday---Exclusive Equipment Leasing Association 40th Annual Conference by Susan Carol, TechnologyWriters.com ### denotes press release Making yearend tax decisions and Equipment Leasing By Joyce M. Rosenberg, Associated Press NEW YORK (AP) The computer you use in your business is getting older and slower, and with prices so low, maybe the time is right to buy a new one and get a tax deduction for 2001. ( see Mike Graneri on Section 179: http://www.leasingnews.org/articles.doc/newsletter7.htm Or ... Maybe you believe the economy is bound to pick up next year, and so will your profits. In that case, perhaps you should limp along with your old machine and buy a new PC in 2002, when you might you'll need all the deductions you can get. Accountants say that's the kind of decision-making business owners need to start doing now, while there's still plenty of time left in the current year. ''Plan and don't wait until April to pull out all your tax stuff,'' said Richard Cox, a certified public accountant in Greenville, S.C. In doing yearend tax planning, company owners are often faced with questions about timing whether to possibly defer income until the new year or move up expenses and tax deductions into the current year. Making those decisions for 2001 might seem more complicated than usual for some businesses because of the still-fragile economy and the continuing uncertainty about terrorism. There's also the tax cut passed earlier this year and, President Bush's economic stimulus plan, still being debated in Congress, to be figured into the mix. Under the tax cut, individual rates will fall next year. Company owners should note that they have to file their business tax returns as part of their individual returns (for example, by attaching Schedule C to their 1040 forms) to take advantage of the lower rates. Cox's advice to business owners is to take advantage of the tax law's benefits. ''Just because the tax rates are higher this year than next year, deferring income and accelerating expenses would be the logical approach,'' he said. One way to defer income is to not send out invoices until January. However, a business has to use a cash accounting method to defer income in this way; under cash accounting, income is reported in the year it is received. Under the accrual accounting method, income is reported in the year it is earned. What if a company has had a slow 2001 but expects business to pick up considerably next year? Wouldn't it make more sense to put off expenses, such as buying a new computer, until 2002? Many accountants would say no. ''You get a greater deduction and a greater write-off'' by buying the computer now, Cox said. Barbara Weltman, an attorney in Millwood, N.Y., and author of ''J.K. Lasser's Tax Deductions for Your Small Business,'' noted that Bush's plan, if it becomes law, would give small business owners another reason to buy equipment now. Under the plan, smaller companies would be allowed to immediately deduct more of the costs of buying new equipment, rather than having to depreciate it over a number of years. Weltman, who also advocates putting off income until 2002 and moving up expenses to 2001, said the changes in the tax law have other potential benefits for small businesses. ''If they're doing well. they should look at the new rules for retirement plans that go into effect for 2002,'' she said. For example, employees who contribute to 401(k) plans will be able to set aside up to $11,000 of their pretax earnings, up from $10,500 in 2001. Business owners who have been considering starting retirement plans for themselves and their employees should start working on setting up a plan now so employees can start contributing at the start of the year, Weltman said. People who advise business owners often warn that tax decisions should never be made solely with the intent of lowering a tax bill. Unless a decision, for example, to buy a computer or create a retirement plan, is part of a sound overall business strategy, it could end up costing a company more than it saves. Accountants also suggest business owners look over all aspects of their companies and see what changes they should make not necessarily to save on taxes, but to make their operation more cost-efficient. As an example, Weltman advises companies to take a look at inventories, which for many businesses have been bloated lately due to slow sales. She suggests either marking the price down to move it off the shelves, or if possible to donate it to charity, which would generate a tax deduction for the current year. ______________________________________________________ ___________________________________________________ UAEL By-Laws Hypocrisy?????? Hi Kit, I read in your recent newsletters some suggested changes to the UAEL by-laws. I did not join UAEL this year, for the first time since 1980, for a few reasons I will not go into at this time, however, I did want to comment on 2 points recently discussed. 1) The change requiring Brokers to reveal to the Lender on a transaction any derogatory information discovered on a transaction after it has been funded. I would assume that most Brokers would do this anyway without making it mandatory. It helps strengthen the relationship. However, I can see that reporting negative information back to the Lender after the fact may become less and less desirable for most Brokers. Most Broker Agreements have evolved in to more and more onerous Agreements recently with the Lender holding the Broker responsible for all kinds of things, most of which the Broker has no control over. As an example, most Lenders now hold the Broker responsible for ANY fraud in a transaction (I hope everyone is reading those Agreements before you sign them). This is a standard, by the way, that they do not hold their own internal salespeople to. If the Lenders are going to continue adding more and more language that is turning non-recourse Agreements into recourse Agreements it is going to be increasingly more difficult to convince the Brokers that the "we are partners in this together" mentality is alive and well in the Lenders mind. I could expand on this a lot more but I'm sure you get my point. 2) $250.00 per complaint for non-members. I was encouraged to hear Joanie Dalton (Executive Director UAEL) say that she gets a dozen calls per week about complaints from non-members, however, I am very discouraged to hear that we are now going to discourage these calls by charging them $250.00 to cover expenses. I can not think of a better person to get a complaint from than a Lessee that has had a first hand experience with a member that was distasteful or unethical. Getting a complaint from a member about another member is very hard to due since the information is more than likely second hand information and is open to a lawsuit if he makes the complaint with that kind of evidence. The non-member complaint is as a result of a first hand experience. I would think that is the best kind of input UAEL could get and should be doing everything they can to encourage that kind of complaint. Additionally, I see also that there is a proposed change that after 5 complaints the situation get reviewed by the Standards Committee. What is the time frame for the 5 complaints. You can print this message and you can print my name! Thank you W. Russell Runnalls, CLP Markay Financial Corporation (818)998-6125 (818)998-6127 (fax) www.markay.com ~~ I too don't know why any UAEL member would have a problem with the verbiage in the clause "after the funding of the transaction". This new verbiage would not only add "meat" for a funding source, but also for brokers and lessors who have a residual to protect. It's only my opinion........ Ginny Young GinnyYoung@bravacapital.com Brava Capital Orange, CA ~~ I’ll begin by letting you know that I've always enjoyed your informative newsletter. I'll also shoot straight and let you know that I'm not a member of the UAEL and therefore am not that concerned with any proposed by-law changes. Specifically, I am writing to you to express my extreme displeasure with your decision to not print any comment on the UAEL by-law issue from those who elected to keep their "name withheld". You state, "in this case, if they don't want to be named, we won't print what their objections might be. If they don't have the guts to stand behind their objections, they can talk to the wind.". This is complete hypocrisy, you and the esteemed members of the advisory board have stated on numerous occasions that THE POLICY of Leasing News is to print "name withheld" comments. I believe that the only stipulation was that the comments had to be confirmed for accuracy. While I have stated recently, (my e-mail on 9/20 included "Anyone who doesn't want to sign their name for fear of repercussions, lawsuits, loss of job or business, or trouble/hassle of any kind should remember the brave individuals who pledged their lives and their sacred honor by signing the Declaration."), that people should have the guts to stand up behind their words, I, and obviously many other subscribers, have been willing to play by the rules/policies of Leasing News and adhere to them, even if we didn't agree with them. Now this HYPOCRISY, what if someone has a comment or an issue with your beloved UAEL or anything they might be considering you won't print it unless they include their name. I guess you have a different "editorial policy" when you choose, or in this case when it involves an association with which you are involved. But it's ok to print comments regarding individuals, brokers, lessors, or funding sources - you seem to have been having an especially good time with AMEX lately -from "name withheld" sources. Give me a break! I know I'm not part of the "old boys network" which is soooo important, and many people might disagree with me, but this issue of the Leasing News is the definition of spineless, two sets of rules BS. Be a man, (figure of speech), and get a clue, you either print "name withheld" comments or you don't, the deciding factor is not whether you feel like it, whether they're friends of yours, whether you do business with them, or whether your involved in their association. It's simple - you do or you don't ! By the way, feel FREE to print my name John Gable Choice Capital LLC choicecapitalllc@aol.com ( Okay, as a chairman of a major leasing company told me on the telephone, “Okay, Kit, you have smoked me out….” I want to be objective. I thought I was being impartial by saying if you want to speak your opinion on this subject, sign your name, as you have. As a matter of policy, I don’t always print things unless people sign their name, unless it is a lead or an “inside story.” I have written about this policy in the past. It is perhaps the most controversial subject from readers. One camp says yes, and the other says, no. It is in the editor's judgment whether something is printed with the name with held. So if I have to prove our objectivity, I would like to err on John Gable’s side. I would rather take the other criticism than to say we are not accurate, fair, and objective. So if you have a comment about the UAEL by-laws, you do not have to sign your name. I will print your opinion. editor ) From Today’s E-Mail: Although it seems proper that any broker or "lessor" (sometimes the difference is hard to tell...), would notify a lender if they found any information regarding a lessee after the fact, I think the main contention is the lender's side once again putting more obligation on the broker side. The perfect example of this is wording in just about all broker agreements that has the broker warrant and represent the enforceability of the lender's contract as well as the right of the lessee and guarantors to sign the contract. The lender provides the only contract that can be utilized in the transaction and approves the signatories and guarantors after credit review. Obviously if the broker knows of information that is different they would say so, but hitherto unknown facts determined after a deal funds is unfair.
Anonymous ( I had over a dozen the other day, and must have deleted them, as I cannot find them now. Normally I keep everything, and can’t explain why I didn’t keep the previous e-mails. Some days are quite busy for me. I make mistakes. Honestly, sometimes it is amazing to me that I have been able to get Leasing News out, typo’s and all. It does get overwhelming for me, sorry. I most have deleted them. So if I have to prove our objectivity, I would like to err on John Gable’s side. So if you have a comment about the UAEL by-laws, you do not have to sign your name. I will print your opinion. editor ) United Association of Equipment Leasing Budget/Financial Statement After reading the numbers published about UAEL’s yearly audit, you don’t need to be Jack Walsh to see what’s in store for the association. Trade associations, and UAEL is no exception, have as an inherent basis two principles: 1) Meeting member needs, and 2) Providing a products or services superior to that offered by the competition. If you’re not doing that, your competition is. The association has been much too myopic and ethnocentric in its approach. It has been myopic in focusing on the surface aspects of its member's behavior and must look deeper into the psyches of it members. They have been ethnocentric in the sense that its promotional programs are axiomatically successful programs. If they can survive they must give more weight to the two basic principles. Perhaps it’s time for UAEL members to ask The Five Most Important Questions You Will Ever Ask about Your Association. James Prunty <James@Prunty.Com ( In California, and some other states, non-profit statements are public knowledge. In California, all personal property licenses annual financial statements they fill out are public knowledge, and often D&B picks them up. In Nevada, the corporations financial statements are public knowledge. I don’t know about Viriginia or other states for leasing association. I will be asking other association for their financial statements and perhaps they will provide them. Most share their financial statements with their members, too. editor ) ### ####################################### ############### Huntington Forms Equipment Finance Division
COLUMBUS, Ohio / -- Huntington Bancshares Incorporated (Nasdaq: HBAN) announced the formation of a new commercial line of business, Huntington Bank Equipment Finance. Led by Robert E. Allanson, president, the business is focused on delivering tailored financing solutions for business capital equipment needs. The veteran team located in Cincinnati, Cleveland and Columbus is knowledgeable about tax and non-tax lease structuring and credit evaluation. The team offers financing solutions for assets that include construction, manufacturing, metal working, printing and technology equipment as well as railcars, marine transportation and corporate aircraft. Additionally, Huntington Bank Equipment Finance provides corporate banking services and credit facilities to independent leasing companies. "The Huntington Bank Equipment Finance division complements the financial services we already have in place for commercial customers," said Thomas E. Hoaglin, Huntington chairman, president and chief executive officer. "As Huntington enters this new business, we look to this team to make decisions in a way that promptly and efficiently responds to our clients' needs. Rob and his team have an excellent track record of performance in the communities we serve and we're very excited about the possibilities in this area." Allanson most recently served as president of the capital equipment group of US Bancorp's Equipment Finance division. He began his banking career in 1980 with Star Bank in Cincinnati and has held various leadership positions in the equipment finance area during his 21-year tenure. Allanson earned a bachelor's degree from Miami University and a master's degree from the University of Pittsburgh. The Huntington Bank Equipment Finance can be reached by calling Kim Trombetta in Cincinnati at 513-762-5194; Rob Allanson in Columbus at 614-480-4558; Mike DiCecco in Cleveland at 216-515-6920; or, Jeff Elliott for Indirect Funding Group inquiries at 216-515-6763. The Huntington National Bank is the principal subsidiary of Huntington Bancshares Incorporated, a $28 billion regional bank holding company headquartered in Columbus, Ohio. Through its affiliated companies, Huntington has more than 135 years of serving the financial needs of its customers. Huntington provides innovative products and services through more than 500 offices in Florida, Indiana, Kentucky, Maryland, Michigan, New Jersey, Ohio, and West Virginia. International banking services are made available through the headquarters office in Columbus and additional offices located in the Cayman Islands and Hong Kong. Huntington also offers products and services online at www.huntington.com , through its technologically advanced, 24-hour telephone bank, and through its network of more than 1,400 ATMs. #### ###################### ############################# Leasing Group Inc. Chosen By Neff Rental Inc. To Arrange Strategic Financing Solutions For Their Nationwide Locations
AUSTIN, Texas--Leasing Group Inc. ("LGI"), the industry's leading provider of innovative vendor-based financial solutions and outsourced financial transaction services, announced today the signing of a Program Services Agreement with Neff Rental Inc. (NYSE:NFF), one of the largest equipment rental companies in the country. Under the agreement, LGI will provide outsourced program management, administration and marketing services in addition to arranging competitive financing solutions for Neff Rental's clients throughout the United States. The program enhances Neff Rental's position in the marketplace by enabling the company to seamlessly offer its customers a host of financial solutions from a variety of financial institutions. This flexibility, combined with the electronic efficiencies of LGI's Web-based platform, generates faster turnaround on funding decisions, higher close rates and increased satisfaction from customers who are looking to finance industrial equipment purchases. Steve Michaels, Neff Rental's Vice President, Fleet Management, announced the program by saying, "I am very excited about the new relationship we have established with Leasing Group Inc. We have been working with LGI in our Austin, Texas, location over the past several months and we have been extremely pleased with the relationship and the corresponding results. LGI's ability to proactively address our needs on a nationwide basis is a big plus for Neff Rental. Their people, systems and outsourcing capabilities will enable us to capture additional business across all of our 75 branches." As a part of the agreement, LGI has established a dedicated team of finance professionals within its Austin, Texas, call center to assist Neff's branch managers and sales representatives with their customers' financing decisions. LGI's team will act as Neff's business process outsourcing partner by receiving the customer's credit application, documenting and presenting the equipment order to the financing community, processing the transaction and communicating current status directly to the Neff Rental's sales team and to the customer. "Neff Rental has established a superior reputation for service and support within the equipment rental industry," said Clark Covert, Chairman & CEO of Leasing Group. "For the past thirteen years, LGI has done the same thing within the financial services industry. Our team's dedication, combined with our unique, multi-tiered business approach enables Neff Rental to offer their customers "best-in-class" financial solutions while lowering their internal costs and gaining control of their financing transactions through our Web Financial Portal(tm). Our business model provides benefits to both Neff and their customers. We are very excited to be supporting Neff Rental's efforts on a nationwide basis." About Neff Neff Rental represents the standard for equipment rental. Recognized as one of the largest companies of its kind in the country, Neff Rental offers the finest quality and widest selection of industrial equipment available for rent or purchase. Neff Rental is a wholly owned subsidiary of Neff Corporation (NYSE:NFF). Headquartered in Miami, Fla., Neff has over seventy-five locations nationwide to provide sales, service and support programs on its entire fleet of reliable, new and used equipment. Servicing customers' heavy-equipment needs, Neff features a full line of aerial equipment, compressors, backhoes, earthmovers, forklifts, generators, tractors, trucks and other equipment from leading manufacturers like Case, Genie, Gradall, JCB, John Deere, Kobelco, MultiQuip and Volvo. Emphasizing its commitment to outstanding service and support, each Neff branch office features knowledgeable professionals, full in-house delivery and maintenance capabilities, 24-hour on-call service, factory trained mechanics and completely outfitted maintenance trucks to quickly resolve customer issues. For more information about Neff Rental visit www.neffrental.com. About LGI Leasing Group Inc. (LGI), www.leasinggroup.com is the industry's leading provider of innovative vendor-based financial solutions and outsourced financial transaction services. Serving both the equipment vendor and the funding source community, LGI provides a faster, more efficient way for equipment vendors to offer world-class financial solutions to their clients. Through a variety of national account programs and Internet based solutions, LGI provides the funding source community with aggregated volumes, lower origination costs, and lower marketing and account management costs. Capitalizing on LGI's multi-tiered business methodologies, advanced Web-based technologies, proven business process outsourcing capabilities and established relationships with multiple funding sources, equipment vendors can seamlessly offer a host of financial solutions specifically designed to meet the funding requirements of each of their individual business units. Bridging the gap between the vendors' needs and the funding source's abilities, LGI's unique approach enables vendors to increase market share and enhance customer relationships by offering "best-in-class" financial solutions without incurring the time, costs, systems, connectivity and management issues commonly associated with offering multiple financial products. LGI's involvement provides sustained, focused execution, increased sales and higher profits for its vendor partners. In addition, LGI's model provides vendors with insulation from economic costs due to volatile industry conditions while enhancing their control over the financial services they offer and the performance of their funding source partners. Through its proprietary Web Financial Portal(tm), LGI enables funding sources to lower their overall acquisition costs by streamlining and electronically facilitating the application, documentation, communication and customer support processes associated with funding business transactions from different equipment manufacturers. These operational efficiencies, coupled with the increased volumes and new customers generated by LGI's National Account Programs, provide funding sources with a strategic, programmatic and economical way to expand their funded portfolio. Combining these capabilities with LGI's ongoing commitment to provide quality account management, vendor training and service and support programs LGI can significantly reduce our funding partners' origination, marketing and account management expenditures. Based in Austin, Texas, and founded in 1988, LGI has a thirteen-year history of vendor-driven industry leadership. The firm pioneered many of today's common industry practices including authorized transactions via faxed signatures, electronic transfer of funds using EDI standards, non-recourse, small ticket leasing programs; and leases that do not require the use of delivery and acceptance documents. Currently backed by Conning Capital Partners and Stephens Inc., LGI has funded over $1 Billion in financial transactions since its inception and its innovative and technological leadership continues today with the expansion of its Web Financial Portal(tm). For more information about LGI, visit www.leasinggroup.com or call 800/608-5201. CONTACT: Leasing Group Inc., Austin Darcy Shorman, 512/344-1203 darcy-shorman@leasinggroup.com #### ######################### ################### Central Leasing Hybrid ABS, Loan Assigned Preliminary Ratings
TOKYO, / -- Standard & Poor's yesterday assigned preliminary triple-'A' ratings to Central Leasing Asset-Backed Hybrid Type Trust Certificates and Limited Recourse Loan Series 1 JPY20 billion class A1-A13 certificates and limited recourse loan (see table below). The transaction will be backed by a pool of lease receivables originated by Central Leasing Co. Ltd. The preliminary ratings are based on information as of Nov. 1, 2001. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. Standard & Poor's ratings address the full and timely payment of interest and the ultimate full repayment of principal by the expected final maturity date of October 2006. The aggregate JPY20 billion trust certificates and limited recourse loan are expected to be backed by a pool of about JPY28.9 billion of lease receivables originated by Central Leasing. At the moment of entrustment of the receivables, both class A and B senior certificates will be issued. The class B certificates will be fully redeemed in advance of closing using funds provided by the limited recourse loan. Of the JPY28.9 billion receivables, approximately JPY2.2 billion are scheduled to be collected after the expected final maturity date of the trust certificates, and thus may not be collected in time to cover principal and interest payments on the certificates and the loan. The lease receivables are entrusted to Nochu Trust & Banking Co. Ltd. The preliminary ratings are based on: -- Overcollateralization of approximately JPY6.7 billion of eligible receivables that can be collected before the expected final maturity date to cover defaults and prepayments; -- An adequate reserve, initially funded to cover three months' of interest payments and transaction costs; -- Rigorous early amortization events that will convert principal redemption to a pass-through structure under certain adverse circumstances; and -- Strong servicing abilities, including the existence of Sumisho Lease Co. Ltd. as a backup servicer. -- Confirmation following a strict legal assessment that the entrusted assets backing the class A certificates and limited recourse loan are legally segregated from the trust bank's assets. An English-language presale report for this transaction will soon be available on RatingsDirect, Standard & Poor's premier Web-based credit analysis system, at http://www.ratingsdirect.com. The presale report will also be available on Standard & Poor's Web site at http://www.standardandpoors.com. Under Presale Reports, select Structured Finance, then Asset-Backed Securities. A Japanese-language report will be available on Standard & Poor's Japanese Web site at http://www.standardandpoors.co.jp. #### ############################################ ################## Sunrise International Leasing Corp. Reports Strong Third-Quarter Results
GOLDEN VALLEY, Minn/ -- Sunrise International Leasing Corporation (SILC), a wholly owned subsidiary of privately held King Capital Corp., announced financial results for the third quarter and nine months ended September 30, 2001. For the third quarter, revenue increased 9 percent to $45.0 million, compared to $41.2 million for the prior-year period. The company reported net income of $3.0 million, up from $2.8 million for the comparable 2000 period. For the nine months ended September 30, 2001, revenue increased 33 percent to $148.3 million, from $111.4 million for the year-ago period. Net income rose 57 percent to $9.6 million, from $6.1 million for the prior-year nine months. In addition to the recent interest rate decreases that have had a favorable effect on profitability, SILC has seen a decline in customer defaults and it expects that trend to continue for the foreseeable future. The company is confident that its reserves are adequate to cover anticipated future defaults and attributes much of this improvement to its sophisticated online lease and asset management system. The system allows management to make virtually instantaneous decisions regarding defaulting or defaulted leases and the recovery and remarketing of equipment. Current Events With excess borrowing capacity the company continues to pursue discussions with new vendor partners. It is also exploring the feasibility of offering its lease marketing and lease administration services to captive vendor finance companies or other leasing companies that wish to outsource these functions. SILC is acknowledged to have one of the most efficient and sophisticated lease and asset management systems in the industry. Peter J. King, chief executive officer, stated, "SILC's recent experience of being a major leasing partner of Cisco, Sun and GE Capital simultaneously demonstrates its capabilities to function as a successful third-party lessor to major vendors or to act as an outsource partner to them." Outlook Consistent with previous guidance, SILC expects to report record revenues and net income for the year ended December 31, 2001, of $190 million and $11.0 million, after estimated taxes, respectively. About Sunrise International Leasing Corp. SILC was a public entity until it was merged with a division of The King Management Corporation in June of 2000. The merged entities adopted the Sunrise International Leasing Corporation name. All results for the prior periods are pro-forma and assume that the merger was completed at the beginning of calendar 2000. About King Capital Corporation King Capital Corporation, established in 1975 and based in Golden Valley, Minn., offers a wide range of leasing options to manufacturers, distributors and resellers through its primary subsidiary, SILC as well as high-availability software through H.A. Technical Solutions, LLC. ##### ############################## ##################### Worldwide semiconductor sales fall 44.6 percent in September By Associated Press, SAN JOSE, Calif. (AP) Worldwide sales of semiconductors fell 44.6 percent to $10.2 billion in September compared with a year ago, though some signs of improvement exist, an industry trade group said Thursday. September's sales also were 2.5 percent below August's level of $10.5 billion slightly better than the 3.5 percent decline from July to August, according to the Semiconductor Industry Association. ''A broad cross-selection of products grew on a unit basis during the September quarter,'' said George Scalise, the association's president. ''We expect this trend to continue in the December quarter.'' He said the industry's recovery will be driven by demand for personal computers and wireless applications as well as digital audio players and other consumer products. Compared with September 2000, all areas of the world showed declines in September. The Americas recorded the greatest drop, 58.6 percent. In Europe, sales were off 41.7 percent. Asia-Pacific fell 30.9 percent, and Japan was down 42.7 percent. The Semiconductor Industry Association has represented U.S. chip manufacturers since 1977. Its members account for more than 90 percent of U.S. chip production. On the Net: Semiconductor Industry Association: http://www.semichips.org ___________________________________________________________________ |
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