Danny Puff

NEW YORK (AP) -- Exxon has once again surpassed Apple as the world's most valuable company after the iPhone and iPad maker saw its stock price falter.

Apple Inc.'s stock has been on the decline since the company's quarterly earnings report Wednesday suggested that its fast growth phase, rare for a company of its size, may be coming to an end.

Apple's stock fell 2.6 percent to $438.76 in afternoon trading Friday for a market capitalization of $412 billion. That followed a 12 percent drop on Thursday, the biggest one-day percentage drop for the company since 2008.

Exxon Mobil Corp. gained 10 cents Friday to $91.45 for a market capitalization of $417 billion.

Apple first surpassed Exxon in the summer of 2011, displacing the oil company from a perch it had held since 2005. The two companies traded places through that fall, until Apple surpassed Exxon for good in early 2012 at least until Friday.

China's largest oil company, PetroChina, could lay claim to having hit a market capitalization even higher than either Exxon's or Apple's, but only based on prices on the Shanghai stock exchange, which is isolated from the rest of the financial world because of Chinese laws on foreign investment. PetroChina's shares also trade in Hong Kong and on the New York Stock Exchange. Based on prices there, its market capitalization never went as high as $500 billion.

Apple and Exxon are among only a half dozen U.S. companies to have ever reached $500 billion in market value. Apple and Microsoft Corp. are the only ones to have ever hit $600 billion.

Apple's stock price peaked in September at $705.07 on the day the iPhone 5 was released. Exxon, in the meantime, has been trading steady. Its business oil seems less prone to stock market ups and downs than the Cupertino, Calif.-based tech darling.

Exxon, which is based in Irving, Texas, set a record in 2008 for the highest quarterly earnings by any company. In the first nine months of 2012, Exxon earned nearly $35 billion, or 10 percent more than the same period in 2011, on revenue of $367 billion. Results for the fourth quarter are due Feb. 1.

Exxon, the biggest investor-owned energy company in the world, predicted in December that oil will continue to be the most important source of energy. That's because cars, trucks, airplanes, trains and ships will still depend heavily on oil-derived fuels such as gasoline and diesel.

This year, investors seem unforgiving with Apple, looking for perfection and punishing the stock for anything less. The company's stock price slipped below $500 for the first time last week, as investors saw signs that the iPhone 5 was falling behind competition from phones running Google's Android software, especially those from Samsung Electronics Co.

The latest quarterly report added to the concerns. Apple warned that its revenue growth, which had been running at a speed more reminiscent of promising startups than multi-national corporations, is slowing down considerably.

A big reason: It has been nearly three years since a new product has come from a company still seen as the embodiment of innovation. That last product, the iPad, came in 2010, when its CEO Steve Jobs was still alive. Some analysts question whether Apple can keep growing by just releasing new versions of its old products. The long-rumored Apple TV, is still just that, a rumor.

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(Reuters) - Never mind President Barack Obama's inauguration address or what Michelle Obama was wearing at the ball.

Was Beyonce lip-synching the U.S. national anthem on Monday, or wasn't she?

The Grammy-winning singer remained silent on Tuesday amid a media storm over whether she was lip-synching, singing over her own pre-recorded track, or performing live when she delivered a flawless version of "The Star-Spangled Banner" to hundreds of thousands of people in Washington and millions watching on television.

A spokeswoman for the U.S. Marine band first told U.S. news outlets on Tuesday that the "Single Ladies" star "decided to go with the pre-recorded music at the last minute" and that, to the spokeswoman's knowledge, she was not actually singing the anthem.

But the U.S. Marine band later backtracked, saying in a statement: "Regarding Ms. Knowles-Carter's vocal performance, no one in the Marine Band is in a position to assess whether it was live or pre-recorded."

The statement said the band and Beyonce, whose surname is Knowles-Carter, had no chance to rehearse together before Monday's inauguration "so it was determined that a live performance by the band was ill-advised for such a high-profile event.

"Each piece of music scheduled for performance in the Inauguration is pre-recorded for use in case of freezing temperatures, equipment failure, or extenuating circumstances," the Marine Band added.

Beyonce, 31, was giving her first major public performance since giving birth to a baby with husband, rapper Jay-Z, in January 2012. On Sunday, she posted on Instagram photo of herself in a recording studio holding the sheet music for "The Star-Spangled Banner."

Her representatives did not return calls for comment on Tuesday. Kelly Clarkson and James Taylor, who also performed at the inauguration ceremony, both sang live, their publicists said.

Whatever Beyonce's choices on Monday, she was not the first artist cause a stir on such occasions.

Classical musicians Yo-Yo Ma, Itzhak Perlman and two others played along to a pre-recorded tape at Obama's 2009 inauguration because the cold and wind on the Washington Mall raised the potential of broken strings and sharp notes.

Madonna lip-synched her way through her 2012 Super Bowl half-time performance last year, as did the late Whitney Houston in her 1991 Super Bowl rendition of the national anthem. Singing to pre-recorded tracks has become widespread in the pop music industry

The lip-synching question made headlines around the world and "Beyonce" was among the top Facebook conversations on Monday, according to the social networking site.

Fans were divided. "I enjoyed the performance and do not care whether it was lip-synched or not - it was a beautiful rendition, with some originality, of a song we have all heard so many times," wrote LeeAnne24 on the Washington Post comment board.

Twitter user hiphopdancerJen was disappointed. "There's honestly no reason for Beyonce to lip-sync... Especially the national anthem. I may despise most of her music, but she has a voice."

Beyonce is due to take the spotlight again next month - this time at the February 3 Super Bowl half-time show.

(Reporting By Jill Serjeant in Los Angeles and Anna Yukhananov in Washington; Editing by David Brunnstrom)

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SAN FRANCISCO (Reuters) - Apple Inc stepped up audits of working conditions at major suppliers last year, discovering multiple cases of underage workers, discrimination and wage problems.

The iPhone and iPad maker, which relies heavily on Asian-based partners like Taiwan's Foxconn Technology Group to assemble the vast majority of its iPhones and iPads, said on Thursday it conducted 393 audits, up 72 percent from 2011, reviewing sites where over 1.5 million workers make its gadgets.

Apple in recent years has faced accusations of building its profits on the backs of poorly treated and severely underpaid workers in China.

That criticism came to the fore around 2010, after reports of suicides at Foxconn drew attention to the long hours that migrant laborers frequently endure, often for a pittance in wages and in severely cramped living conditions.

Foxconn is the trading name of Hon Hai Precision Industry and employs 1.2 million workers across China.

Under Chief Executive Tim Cook, who took over from Steve Jobs in 2011, Apple has taken new steps to improve its record and boost transparency, including the extensive audits of its sprawling supply chain. Last year, it agreed to separate audits by the independent Fair Labor Association.

In an interview on Thursday, Apple senior vice president of operations Jeff Williams said the company has increased its efforts to solve two of the most challenging issues - ensuring there are no under aged workers in its supply chain and limiting working hours to 60 hours a week.

While child labor reflected a small percentage of the workforce, Apple is now investigating its smaller suppliers - which typically supply parts to larger suppliers and hence face less oversight on such issues - to bring them into compliance, sometimes even firing them.

"We go deep in the supply chain to find it," Williams said. "And when we do find it, we ensure that the underage workers are taken care of, the suppliers are dealt with."

In one case, Apple said it terminated its relationship with a component maker Guangdong Real Faith Pingzhou Electronics Co Ltd after discovering 74 cases of underage workers.

Officials at Pingzhou Electronics could not be reached despite three telephone calls from Reuters.

Apple also discovered an employment agency that was forging documents to allow children to illegally work at the supplier.

Apple reported both the supplier and the employment agency to local authorities, the company said in its latest annual report on the conditions in its supply chain.

Apple has audited both small and ancillary suppliers, as well as large ones such as Korea's Samsung Electronics Co, for working conditions. It found 95 percent of sites audited complied with avoiding underage labor.

Child labor is an issue that is part of the larger supply industry as the component maker that Apple found violated child labor laws supplied parts to more than a hundred different companies, including automotive companies, Williams said, vowing to eradicate under aged labor from the industry.

"I don't know how long it will take to get there but that's our goal," said Williams, who has spent a significant amount of his 14 years at Apple in Asia managing the supply chain.

FOCUS ON STUDENT INTERNS

For 2013, Williams said a key focus for Apple will be student interns and ensuring that suppliers do not abuse the internship system, especially in China where many colleges require students to complete internships as part of their curriculum.

Some companies in China are solving labor shortages by employing students. Last September, city officials of the northeastern Chinese coastal city of Yantai ordered vocational high schools to send students to a large plant run by Foxconn - a key contract manufacture for Apple and other large electronics companies like Hewlett Packard - to overcome a shortage of workers.

Another focus areas has been "bonded labor", where agencies who help immigrant workers find jobs take a substantial portion of the worker's pay.

Apple said in the report that it asked suppliers to reimburse $6.4 million in excess foreign contract worker fees in 2012, according to the report.

The company said it achieved 92 percent compliance with a maximum 60-hour work week in its supply chain. Where violations were discovered, Apple took action, it said in its report.

Apple also found and stopped discriminatory practices against women workers in 34 supplier facilities that required pregnancy testing and 25 facilities that tested employees for certain medical conditions, the report said.

(Additional reporting by Shanghai newsroom; Editing by Richard Pullin)

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DAVOS, Switzerland - Activists with a big fake polar bear have occupied a Shell service station in the Swiss resort of Davos to protest Royal Dutch Shell PLC's oil drilling in the Arctic.

About 25 activists from around Europe chained gas pumps together Friday at the station near where the World Economic Forum was being held and hung a banner on the roof reading "Arctic Oil - Too Risky."

Greenpeace helped stage the protest, raising concerns about dangers to the environment from Shell's drilling in Alaska and urging forum organizers to reconsider Shell's participation. A Shell drill barge ran aground on a remote Alaska island on New Year's Eve.

Shell officials, among the 2,500 corporate and political leaders in Davos this week, did not immediately respond to phone calls about the protest.

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AMSTERDAM (AP) Japan's benchmark stock index hit a 32-month high Friday as the yen continued to retreat against the dollar and investors cheered the new government's plans to boost the economy. Other stock markets edged up, notably in Germany where a survey showed growing business confidence.

Evan Lucas, analyst at IG Markets in Melbourne, said he expected to see further surges in Japan's Nikkei 225 index after a Japanese government official indicated that the yen would fall further, helping the company's big exporters. The Nikkei surged 2.9 percent to 10,926.67, its highest close since April 30, 2010.

In Germany, the Ifo index of business sentiment rose to its highest level since last June, with order backlogs growing.

The report "nicely illustrates the green shoots in the German economy," said ING senior economist Carsten Brzeski in Brussels.

"Even if the current harsh winter weather might delay the blossoming somewhat, growth should return, leaving the contraction of the fourth quarter quickly behind."

Germany's DAX rose 1 percent to 7,827.69 points, by far the strongest performer in Europe. France's CAC-40 was up 0.6 percent to 3,773.63.

But Britain's FTSE 100 edged up only 0.1 percent, to 6,273.21, after official figures showed the U.K. economy contracted 0.3 percent in the fourth quarter. If it shrinks for another quarter, it would be back in a technical recession, defined as two consecutive quarters of contraction.

The fourth quarter drop was worse than expected and shows the economy is struggling to make any lasting recovery.

Meanwhile, Wall Street appeared headed for gains, with Dow Jones industrial futures 0.2 percent higher at 13,806 and S&P 500 futures gaining 0.2 percent to 1,494.20.

Looking ahead investors will keep an eye out for new data showing how much of the the European Central Bank's emergency loans to banks are being repaid early. The figure will provide a gauge of the health of banks in Europe if many of them repay a lot of those loans early, markets will take that as a sign that they are now healthy enough to rely less on the ECB.

Earlier in Asia, South Korea's Kospi fell amid fears that the country's exporters could be slammed by Japan's dropping yen. The benchmark fell 1 percent to 1,943.97.

Hong Kong's Hang Seng lost 0.1 percent to 23,580.43 while Australia's S&P/ASX 200 rose 0.5 percent to 4,835.20.

In mainland China, the Shanghai Composite Index fell 0.5 percent to 2,291.30 and the smaller Shenzhen Composite Index lost 0.2 percent at 909.52.

Benchmark oil for March delivery was up 39 cents to $96.34 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro fell to $1.34233 from $1.3371 late Thursday in New York. The dollar rose to 90.77 yen from 89.96 yen.

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Pamela Sampson contributed to this story from Bangkok.

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LOS ANGELES (Reuters) - Beyonce's lips remained sealed on Wednesday over her headline-making rendition of the U.S. national anthem at President Barack Obama's inauguration, leaving others to do the talking over whether she lip-synched to a pre-recorded track.

Celebrity magazine Us Weekly quoted a source saying the Grammy-winning artist was disappointed by the controversy she stirred by singing "The Star-Spangled Banner" at Monday's solemn ceremony using a backing track - and drew a comparison to late Italian opera singer Luciano Pavarotti.

As some of America's singing stars offered sympathy and understanding, an inaugural official, who declined to be identified, told CNN that Beyonce "did not sing live."

"Because she didn't have time to rehearse with the U.S. Marine Band, she decided to use her recording with the Marine Band," the official told CNN on Wednesday.

The U.S. Marine band said in a statement on Tuesday that no one in the band "is in a position to assess whether it was live or pre-recorded."

Us Weekly meanwhile quoted a different, also unidentified source, as saying "She did sing, but used a track."

"She didn't think there was anything wrong with it," the source told the celebrity magazine's website on Wednesday.

"Pavarotti has done it! It was freezing out, and if she messed up just one note, that would have been the story ... Everybody uses these tracks, and the music director advised it," the Us Weekly source added.

Pavarotti lip-synched his last performance, at the 2006 Winter Olympics in Turin, because of the bitter weather and his failing health, according to orchestra conductor Leone Magiera in a 2008 book. The Italian tenor died in 2007 of pancreatic cancer at age 71.

Beyonce's publicist has declined to comment on the furor, but Aretha Franklin and Jennifer Lopez chimed in with their support.

"When I heard the news ... that she was pre-recorded I really laughed," Franklin, 70, who sang live at Obama's first inauguration in 2009, told ABC News.

"I thought it was funny because the weather down there was about 46 or 44 degrees and for most singers that is just not good singing weather ... she did a beautiful job with the pre-record ... next time I'll probably do the same."

Lopez told Jon Stewart on "The Daily Show" on Tuesday that many performers resort to using pre-recorded tracks.

"You know, sometimes it happens," Lopez said. "When you're in certain stadiums and in certain venues, they do pre-record things because you're going to have that terrible slapback."

Beyonce, 31, was giving her first major public performance since giving birth to a baby in January 2012. On Sunday, she had posted on Instagram photo of herself in a recording studio holding the sheet music for "The Star-Spangled Banner."

She is due to take the spotlight again next month by performing, live, at the February 3 Super Bowl halftime show.

(Reporting by Jill Serjeant; Editing by Lisa Shumaker)

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WASHINGTON (AP) Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act "Obamacare" to its detractors allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to work in jobs that don't come with health insurance and would therefore depend on the new federal health care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.

Insurers won't be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats but they can charge more if a person smokes.

Starting next Jan. 1, the federal health care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.

"We don't want to create barriers for people to get health care coverage," said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers' ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.

"We want people who are smoking to get smoking cessation treatment," added Pan, a pediatrician who represents the Sacramento area.

Obama administration officials declined to be interviewed for this article, but a former consumer protection regulator for the government is raising questions.

"If you are an insurer and there is a group of smokers you don't want in your pool, the ones you really don't want are the ones who have been smoking for 20 or 30 years," said Karen Pollitz, an expert on individual health insurance markets with the nonpartisan Kaiser Family Foundation. "You would have the flexibility to discourage them."

Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.

First, the law allows insurers to charge older adults up to three times as much as their youngest customers.

Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.

And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.

Here's how the math would work:

Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama's law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.

But the smoking penalty could add $5,086 to the cost. And since federal tax credits can't be used to offset the penalty, the smoker's total cost for health insurance would be $8,411, or 24 percent of income. That's considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.

"The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance," said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.

In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually charge the full 50 percent? After all, workplace anti-smoking programs that use penalties usually charge far less, maybe $75 or $100 a month.

Robert Laszewski, a consultant who previously worked in the insurance industry, says there's a good reason to charge the maximum.

"If you don't charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers," said Laszewski. "They are going to have to play defense."

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Online:

Kaiser Health Reform Subsidy Calculator http://healthreform.kff.org/subsidycalculator.aspx

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LOS ANGELES (AP) Another universe of sci-fi fans has been put in the hands of J.J. Abrams.

According to multiple trade reports, Abrams, 46, is set to direct the next installment of "Star Wars," which Disney has said will be "Episode 7" and due out in 2015. Disney bought "Star Wars" maker Lucasfilm last month for $4.06 billion.

The Emmy-award-winning director of the TV show "Lost" also captained the reboot of "Star Trek" for rival studio Paramount Pictures, with the next installment in that series, "Star Trek: Into Darkness," set to hit theaters May 17.

Citing unnamed sources, the news was reported earlier by Hollywood trade outlets The Wrap, Deadline, The Hollywood Reporter and Daily Variety.

Messages left by The Associated Press for Abrams' representatives as well as Disney and Lucasfilm were not immediately returned.

Soon after the news broke Thursday afternoon, websites were flush with chatter. On Twitter, "J.J. Abrams," ''Star Wars" and "(hash)Star Trek" were all trending topics.

Roberto Orci, a producer and writer who has worked with Abrams on "Star Trek," ''Star Trek: Into Darkness," and "Mission: Impossible III," appeared to confirm the reports on Twitter. In response to a question about Abrams' involvement, Orci tweeted back "True!" He also responded to a Spanish-speaking questioner, "Creo que si!" ("I think so.")

Despite denying his interest in directing the next "Star Wars" following The Walt Disney Co.'s October announcement, many people pegged Abrams as the most obvious choice.

Abrams spoke about the plot of the original "Star Wars" in the lecture series "TED Talks" in March 2007, and reportedly became enamored of "Lost" co-creator Damon Lindelof partly because Lindelof was wearing a "Star Wars" T-shirt when they first met.

In 2009, Abrams told the Los Angeles Times: "As a kid, 'Star Wars' was much more my thing than 'Star Trek' was."

Abrams also worked with Lucasfilm's Industrial Light and Magic special effects division for "Mission: Impossible III."

He is the second big name associated with the new "Star Wars" films to be launched under the Disney umbrella. Late last year, Lucasfilm confirmed that Michael Arndt, who wrote "Little Miss Sunshine" and "Toy Story 3" would pen the screenplay for "Episode 7."

Adam Frazier, a staff writer for the entertainment website GeeksofDoom.com, said Abrams should be able to make the next "Star Wars" original but at the same time appease longtime fans.

"He took the 'Star Trek' franchise, which was just drowning in misery, and he was able to bring that back to life," Frazier said. "If there's anyone that can do it with 'Star Wars' I think it's him."

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WASHINGTON (Reuters) - There was a buzz at the White House on Thursday when President Barack Obama announced the nomination of two top financial regulatory officials.

A large fly interrupted the president as he presented his picks to head the Securities and Exchange Commission and a watchdog for financial consumer products.

Under bright television lights, the fly darted around the president's head as he spoke in the White House's ornate State Dining Room, alighting briefly on the middle of his forehead.

"We need cops on the beat to enforce the law," the president said, speaking about SEC nominee Mary Jo White and Richard Cordray, who he renominated to continue as head of the Consumer Financial Protection Bureau.

Obama broke off to swat at the intruder, which flew away.

"This guy is bothering me here," Obama said, glaring at his staff.

The insect was luckier than a fly that harassed Obama in 2009 while taping a television interview.

"Get out of here," he said, before smacking and killing the fly. "I got the sucker," he said at the time. An animal rights group protested.

(Reporting by Mark Felsenthal, Editing by Alistair Bell and David Brunnstrom)

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NEW YORK (Reuters) - An Australian teenager's picture of a Subway "Footlong" sandwich next to a tape measure has gone viral and inspired three lawsuits in the United States.

The lawsuits, one filed in the U.S. District Court for the Northern District of Illinois, a second in New Jersey Superior Court, Burlington County, and the third in the Court of Common Pleas in Philadelphia, each claims restaurant franchise sells sandwiches that are an inch short of a foot.

Given the millions of subs sold each year in the United States, damages could be more than $5 million, said Thomas Zimmerman, an attorney for the plaintiffs in the Chicago case.

"This is no different than buying a dozen eggs and getting 11," Zimmerman said. "You're buying a dozen inches and only getting 11."

The lawsuits, which are seeking class-action status, are also suing for compensatory damages and injunctive relief for deceptive advertising against Subway sandwich shops and Subway's parent company, Doctor's Associates Inc.

"We have redoubled our efforts to ensure consistency and correct length in every sandwich we serve," Subway spokeswoman Alison Goldberg said in a statement. "Our commitment remains steadfast to ensure that every Subway Footlong sandwich is 12 inches at each location worldwide."

Subway Australia, responding to the photo posted on Subway's Facebook fanpage, had said that said the Footlong was a registered trademark that was "not intended to be a measurement of length."

Legal experts said Subway may argue that the average length of the Footlong is 12 inches and that only some fall short.

(Reporting by Caitlin Tremblay; Editing by Leslie Gevirtz)

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