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AT&T Said to Explore Vodafone Takeover as Soon as Next Year (2) 2013-10-31 20:36:49.984 GMT
(Updates share trading in fourth paragraph.)
By Matthew Campbell and Jeffrey McCracken Oct. 31 (Bloomberg) -- AT&T Inc. executives are laying the groundwork internally for a potential takeover of Vodafone Group Plc next year, mapping out a strategy for a complex deal with Europe’s largest mobile carrier, people familiar with the situation said. While the companies haven’t entered formal negotiations, the largest U.S. phone company is intensifying work on which Vodafone assets it would retain after a deal and who could buy others, the people said, declining to be identified discussing private deliberations. AT&T, which remains interested in U.K. carrier EE as an alternative target, is also formulating a strategy for Vodafone’s operations in Europe, where mobile broadband adoption has lagged the U.S., the people said. A merger, which would create the world’s largest telecommunications operator by sales, wouldn’t be AT&T’s first attempt at combining the companies. AT&T approached Verizon Communications Inc. this year about a transaction in which AT&T would buy Vodafone’s European operations, with Verizon taking over their wireless joint-venture and America Movil SAB taking much of the rest, two of the people said. Verizon rejected that approach as too complex and likely to slow its own $130 billion purchase of Vodafone’s 45 percent stake in Verizon Wireless, they said. Vodafone’s New York-traded shares rose as much as 4.4 percent to $37.90 and ended trading at $36.86. AT&T fell less than 1 percent to $36.20.
Globe-Spanning Company
Combined, Vodafone and AT&T would be a globe-spanning telecommunications player with a market capitalization exceeding $250 billion and large-scale operations in the U.S. and across Europe. With more than 500 million wireless subscribers worldwide, the company would be able to challenge Google Inc. and Apple Inc. when negotiating handset subsidies and wringing profit out of nascent technologies such as mobile advertising. Any transaction would have to wait for the conclusion of Vodafone’s sale of its Verizon Wireless stake, which the companies expect to close in early 2014. AT&T may ultimately decide not to proceed with a bid, the people said. Simon Gordon, a spokesman for Newbury, England-based Vodafone, declined to comment on the company’s interest in a sale to AT&T or anyone else. Brad Burns, a spokesman for Dallas- based AT&T, declined to comment on the company’s European plans.
Colao’s Plans
Bob Varettoni, a spokesman for New York-based Verizon, also declined to comment. A representative for America Movil didn’t immediately respond to a request for comment. Vodafone Chief Executive Officer Vittorio Colao is in principle open to a deal, depending on its terms, one of the people said. A former McKinsey & Co. consultant, Colao is nonetheless formulating a stand-alone strategy for Vodafone that could include major new deals in landline telecommunications, the person said. The company had almost 13 billion pounds ($21 billion) in cash and short-term investments at the end of March, a number that doesn’t include its windfall from the Verizon Wireless stake sale.
AT&T Priorities
Finding a new home for some of Vodafone’s diverse assets would be a priority for AT&T, which is less interested in Africa and India than in Europe’s developed markets, the people said. Vodafone said this week that it is seeking to take full control of its Indian unit, and has asked for permission from India’s government to do so. One potential strategy AT&T has examined would involve spinning off most of Vodafone’s emerging-market assets into a new entity that could be acquired by a single buyer, such as Carlos Slim’s America Movil or China Mobile Ltd., one of the people said. Such a plan was the basis for AT&T’s approach to Verizon earlier this year, two of the people said. AT&T owns a 9 percent stake in America Movil and has two seats on its board. Orange SA, the French company that operates in African countries including Kenya and Senegal, has expressed interest in buying some of Vodafone’s African operations, according to a person familiar with the matter. Through Vodacom Group Ltd., a Johannesburg-based subsidiary, Vodafone operates in South Africa and Mozambique, among other African countries. A representative for Orange declined to comment.
Stiff Competition
As an alternative to Vodafone, EE -- Orange’s joint venture with Deutsche Telekom AG in the U.K -- could be used as a platform for further acquisitions in Europe, the people said. However, that plan would be hampered by the lack of an obvious target in Germany, the region’s biggest economy, where Vodafone, Deutsche Telekom, Telefonica SA and Royal KPN NV are the four network operators, one of the people said. AT&T is looking to international expansion as it prepares for stiffer competition in its home country, the world’s largest market for mobile broadband. Now that it is taking full ownership of its wireless business, Verizon is pledging to step up investment in so-called fourth-generation networks that power devices like the iPhone. Meanwhile, Japanese billionaire Masayoshi Son’s SoftBank Corp. has entered the U.S. market by buying Sprint Corp., which he has said will become a stronger competitor to its larger rivals.
Europe Positioning
The acceleration of work at AT&T on European expansion comes after the company concluded there are cost and strategic advantages to global scale as technological change becomes more rapid, the people familiar with its strategy said. Attempts to create global telecommunications companies have a checkered history that includes the 2002 bankruptcy of Global Crossing and Concert, a failed venture between the original AT&T Corp. and BT Group Plc. A merger or takeover of Vodafone could attract political opposition in the U.K., where it has one of the most visible consumer brands. Operating from a quiet village west of London, it’s one of Britain’s most successful non-financial companies, with a market capitalization greater than BP Plc or GlaxoSmithKline Plc. However, U.K. takeover laws don’t provide a clear mechanism for the government to block a foreign deal, and previous opposition to Kraft Foods Inc.’s 2010 takeover of chocolate- maker Cadbury Ltd. didn’t go beyond strongly-worded speeches and newspaper editorials. Vodafone has its own reasons to seek a new strategy through a tie-up. Growth in Europe has stagnated as the penetration of smartphones plateaus and regulators impose caps on fees from wireless roaming. Recently, CEO Colao has pushed into fixed-line communications with a more than $10 billion deal for Kabel Deutschland Holding AG, the largest German cable operator, that will allow Vodafone to bundle mobile and home broadband packages in its largest market.
For Related News and Information: AT&T Biggest Telecom Loser on Expansion Bets: Corporate Finance NSN MTZZTO6JTSEB <GO> Verizon-Vodafone Talked Merger Before Agreeing to Stake Sale NSN MSJJOU6JIJUS <GO> Vodafone deal news: VOD LN <Equity> TCNI MNA <GO> AT&T deal news: T US <Equity> TCNI MNA <GO> Top Stories:TOP<GO> Mergers and acquisitions news: NI MNA <GO>
--With assistance from Amy Thomson in London, Scott Moritz in New York, Marie Mawad in Paris and Patricia Laya in Mexico City. Editors: Mohammed Hadi, Crayton Harrison
To contact the reporters on this story: Matthew Campbell in London at +44-20-3525-8684 or mcampbell39@bloomberg.net; Jeffrey McCracken in New York at +1-212-617-8517 or jmccracken3@bloomberg.net
To contact the editor responsible for this story: Katherine Snyder at +1-212-617-5212 or ksnyder@bloomberg.net
Closing Market Summary: Stocks End October on Lower Note
The S&P 500 ended with a modest loss of 0.4%, trimming its October gain to 4.5%. Small caps displayed notable weakness during morning trade, but the Russell 2000 ended not far behind the S&P with a loss of 0.5%.
Equity indices spent most of the session near their respective flat lines even after more than 250 companies reported their quarterly results between yesterday's close and today's opening bell. Trading volume was subdued until the last 30 minutes of action when a surge in trading activity sent equity indices to lows while pushing the final NYSE volume tally over 900 million shares. The benchmark index displayed early weakness as the broader market followed in the footsteps of the financial sector (-1.1%), which slipped out of the gate and spent the entire session in the red. Financials finished at the bottom of the leaderboard while also ending the month behind the remaining nine sectors with an October gain of 3.2%. Following the early dip, the S&P returned to its flat line, where it hovered until selling accelerated during the final hour. Only the consumer discretionary space posted a gain (+0.2%) with media names providing support after Time Warner Cable (TWC 120.15, +3.27) reported better-than-expected results. Homebuilders did not take part in the rally as the iShares Dow Jones US Home Construction ETF (ITB 22.52, -0.46) lost 2.0%.
Elsewhere, the energy sector outperformed (-0.2%), receiving support from Exxon Mobil (XOM 89.62, +0.81) after the Dow component reported results ahead of analyst expectations. Another Dow member, Chevron (CVX 119.96, -0.34), also announced above-consensus earnings, but ended lower by 0.3%.
Among other earnings of note, Facebook (FB 50.20, +1.20) posted a gain of 2.4% after enduring some after-hours drama yesterday. The social media stock jumped as high as 14.0% in reaction to its solid quarter, but relinquished the gain after company management said during the conference call that a decline in daily traffic among younger users has been observed. Treasuries ended modestly lower with the 10-yr yield up one basis point at 2.55%. In overseas news of note, eurozone unemployment (12.2% actual versus 12.0% expected) and CPI (0.7% actual versus 1.1% consensus) came in well-below estimates, which stoked expectations for additional liquidity provisions from the European Central Bank. On that note, governing council member Ewald Nowotny said the ECB will ensure a smooth transition once long-term refinancing operations come to an end. The euro was under pressure throughout the session, falling over 150 pips against the dollar to 1.3584.
Investors received just two economic data points today. Weekly initial claims decreased to 340,000 from 350,000 (consensus 335,000). This initial claims report represented the first clean reading for the labor market since August as issues with California's numbers have now been ironed out.Unfortunately, the report reflected a modest increase in layoff levels over the past couple of months. An initial claims reading of 340,000 is enough to keep the unemployment rate steady but not enough to drive steady payroll gains above 200,000. The continuing claims level increased to 2.881 million from a downwardly revised 2.859 million (from 2.874 million). The consensus pegged the continuing claims level at 2.850 million. Separately, the October Chicago PMI registered its largest one-month spike in more than 30 years, jumping to 65.9 from 55.7 (Briefing.com consensus 55.0). We are skeptical that the sharp increase is legitimately showing vast improvement in the manufacturing sector. Most of the Federal Reserve regional manufacturing surveys were either flat or softened slightly from lost demand due to the government shutdown. In contrast, the manufacturers in the Chicago region recorded their strongest activity since March 2011.
Tomorrow, the October ISM Index will be released at 10:00 ET.
o Nasdaq +29.8% YTD o Russell 2000 +29.5% YTD o S&P 500 +23.2% YTD o DJIA +18.6% YTD
NQ Mobile: Shares spike to HoD as Longbow Research files 13G disclosing an 8.04% stake
* TCI’s Hohn Says EADS Stock Has 50% Likely Upside in 18 Months {NSN MVJIXD6KLVRI <go>}
* TCI’s Chris Hohn Says He’s Long Aurizon {NSN MVJIDF6KLVRT <go>}
* Naya Management’s Siddiqui Says he is Long Ferragamo {NSN MVJHU06KLVVC <go>}
* Egerton Capital’s Armitage Says Buy Nordea {NSN MVJHMG6KLVRV <go>}
* Naya Management’s Siddiqui Says He Is Short Essilor {NSN MVJGJ76KLVSB <go>}
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BFW 10/31 15:04 Naya Management’s Siddiqui Says He Is Short Essilor
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MORE: Naya Management’s Siddiqui Says He Is Short Essilor 2013-10-31 15:59:41.991 GMT
By Fabio Benedetti-Valentini Oct. 31 (Bloomberg) -- Naya’s Masroor Siddiqui cites slow organic growth, pricing pressure. * Sees ‘not much in the way of organic growth’ and a ‘long term degradation of this company’s business’ * Speaking at Sohn London Investment Conference * An Essilor official didn’t immediately return a call seeking comment
Story Link:NSN MVJGJ76KLVSB<GO>
For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>
--Editor: Frank Connelly
To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at +33-1-5365-5095 or fabiobv@bloomberg.net
To contact the editors responsible for this story: Frank Connelly at +33-1-5365-5063 or fconnelly@bloomberg.net; Edward Evans at +44-20-3525-3190 or eevans3@bloomberg.net
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TCI’s Hohn Says EADS Stock Has 50% Likely Upside in 18 Months 2013-10-31 15:56:01.249 GMT
By Chris Larson Oct. 31 (Bloomberg) -- TCI’s Chris Hohn says EADS has an “exceptional franchise.” * Sees Airbus profit margin doubling 2012-2015 * Says co.’s prices are increasing as costs remain flat * Hohn says EADS has “massive” order backlog * Stock can ‘‘easily’’ achieve Boeing’s 15x multiple, he says * Says TCI bought EADS shares late 2012 * Hohn Speaking at Sohn London Investment Conference
Link to Company News:{BA US <Equity> CN <GO>} Link to Company News:{EAD FP <Equity> CN <GO>}
For Related News and Information: First Word scrolling panel: {FIRST<GO>} First Word newswire: {NH BFW<GO>}
To contact the reporter on this story: Chris Larson in London at +44-20-3525-8840 or clarson22@bloomberg.net
To contact the editor responsible for this story: Edward Evans at +44-20-3525-3190 or eevans3@bloomberg.net
L’Oreal buyback of stake held by Nestle could take several years
A buyback by L’Oreal [OR FP] of the shares held by Nestle [NESN VX] could be stretched out over more than four years if the French personal care group buys the entire stake and wants to avoid launching a public tender offer open to all of its shareholders, according to several legal and banking sources.
The shareholder pact between the French cosmetics company’s two main shareholders, the Bettancourt family and Swiss food and consumer group Nestle expires in April 2014, opening up the opportunity for one of the parties to buy the other out.
L’Oreal has publicly stated that it has the financial means to buy the 29.3% stake held by Nestle, which has a current market value of EUR 22.22bn.
But French law prevents L’Oreal from buying back the full stake in one go, legal sources said. According to the “Code de Commerce”, companies can buy back a maximum of 10% of their own shares in private placements. They are permitted to exceed this amount if they launch a public buyback offer, open to all shareholders.
To avoid triggering a public offer, L’Oreal can use the mandate granted to it by its shareholders to buy back 10% of its share capital through market or off-market transactions. This authorisation is routinely granted at the annual shareholders meeting, said one lawyer.
But it may be possible to call more than one ordinary general meeting in the year, allowing the company to launch more than one 10% buyback in the period, speculated a legal source familiar with the situation.
But attempts to accelerate the buyback would still be hindered by legal limitations on the cancellation of shares. The “Code de Commerce” prevents companies holding more than 10% of its share capital at any one time. At the same time, companies are only permitted to cancel up to 10% of their shares every 24 months, sources said.
When French advertising company Publicis [PUB FP] bought the some 15% stake held by its Japanese peer Dentsu [4324 JP], three transactions were launched between May 2010 and February 2013 to buy Dentsu’s stake.
Publicis explained in its release in February 2012, that of the 18m shares it had purchased up to that date, the group cancelled 10.76m, given a previous cancellation of shares in May 2010. “Thus a total of 10% of the Group’s shares (the maximum permitted by law) has been cancelled over the past 24 months,” the statement said.
This means it would take L’Oreal over four years to buy back and cancel the entire stake.
The legal source familiar said there was possibly a way around this law, but would not be specific, other than to say the deal could be structured so that it would not be a buyback as such.
This source said it was also possible that L’Oreal could decide to launch a public buyback with a discount that would make it appealing to Nestle and not other shareholders. The large stake held by the Swiss food group means that most disposal routes would be impacted by some form of discount.
But this would be a gamble, as several shareholders could still opt into the offer, the source pointed out.
Analysts have previously predicted that L’Oreal is unlikely to buy back the stake in one go. Nestle may also be open to a gradual sell down of its stake in the absence of any transformational acquisition targets. The Swiss company is cash rich, reporting cash and cash equivalents of CHF 3.8bn and CHF 2.5bn in short term investments in its first half results for 2013.
Nestle has publicly stated it is keeping all options open in relation to the stake, including maintaining the status quo.
Nestle and L’Oreal declined to comment.
L’Oreal shares on Thursday morning were trading at EUR 125.01, giving it a market capitalisation of EUR 75.84bn.
Federal aviation regulators on Thursday unveiled steps to lift restrictions on fliers' electronic devices, concluding that tablets, e-readers and other gadgets generally can be used during all phases of flight by the end of this year. The Federal Aviation Administration's decision, embracing recent recommendations by a high-level agency advisory group, effectively ends years of safety debates over the use of the devices. The FAA said it is providing airlines with guidelines to carry out the new policy. The agency said it expects many carriers to be able to allow their fliers to use devices gate to gate by yearend. Specific implementation plans and timetables will vary among airlines, the FAA said. The new rules require passengers to hold electronic items or put them in the seatback pocket during takeoffs and landings. Wi-Fi and Bluetooth connections will be allowed below 10,000 feet, but the agency said cell phones must be switched to airplane mode for the entirety of flights, as inflight cellular signals remain banned by the Federal Communication Commission.
The Afghan Money Pit: How Millions of Dollars Were Wasted Link : {http://thebea.st/Hubqax}
Hundreds of millions in U.S. aid money provided to supply Afghan security forces has been lost—and now oversight is about to get even worse.
The war in Afghanistan is transitioning to its endgame. But the drawdown hasn’t stopped the billions in U.S. aid flowing into the country, and after 12 years of spending on this scale, we’re still losing money—hundreds of millions unaccounted for—almost as fast as we can write the next check. The spotty oversight of U.S. aid to Afghan forces is now set to get even worse as the main auditing group is in the country is about to have its presence dramatically reduced. The majority of the Department of Defense money spent in Afghanistan that doesn’t pay for U.S troops goes into projects for infrastructure and funding the Afghan security forces. The U.S. legacy in Afghanistan will be defined in large part by the success of those institutions, the Afghan army most of all, where we have focused our funding and resources. A series of recent reports detailing the loss of hundreds of millions of dollars spent on the U.S. cornerstone efforts—some of it gone to waste, corruption, and misallocation, the rest simply missing and unaccounted for—offer a troubling picture of the return on U.S. investments and underscore how deeply the key Afghan institutions still rely on U.S. funding for daily operations. The Special Inspector General for Afghanistan Reconstruction (SIGAR), an independent agency created by Congress to monitor U.S. spending in Afghanistan, has detailed the money wasted in the Afghan supply process in a series of audits focused on procurement of fuel and vehicle parts for Afghan security forces. As of March 2013, the U.S. has spent (PDF) about $54 billion funding security forces in Afghanistan and $92 billion on reconstruction, agriculture, and other development projects, according to a SIGAR report. Two October reports (PDF) on funding and supply of the Afghan National Security Forces highlight the severity of the oversight problems in transactions in Afghanistan. In Afghan bases funded by the Combined Security Transition Command-Afghanistan (CSTC-A), SIGAR counted about $370 million in unaccounted spare vehicle parts for the Afghan army and found that fuel purchases and budget needs had been overestimated by nearly a third. Since 2010, America’s mission in Afghanistan had moved away from unilateral military operations. The first shift was to training and developing Afghan forces. Now, in the war’s final stage, the focus is on supporting those forces as the Afghans take the lead in security operations and building up the civic and economic institutions that were neglected when the country was too violent for them to take root. The DOD’s own funding request (PDF) for 2014) lays out the realignment of U.S. priorities in Afghanistan: “The campaign in Afghanistan has shifted, with the Afghan National Security Forces (ANSF) taking over the primary responsibility for fighting insurgents and International Security Assistance Forces (ISAF) moving into a supporting role. Although the ANSF is already leading over 80% of operations they remain dependent on ISAF for many support functions.” “The U.S. government is giving hundreds of millions of dollars to the Afghan government without even knowing if they’re in the right ballpark of what they actually need.” “The strength and success of the [Afghan National Security Forces] is critical to the overall success of the reconstruction effort, so they want to make sure they have the supplies they need,” said Elizabeth Field, the assistant inspector general for audits and inspections for SIGAR who played a key role in both the fuel purchases audit as well as the spare parts audit. The problem of money disappearing into Afghan projects without anyone being held accountable for the loss is not new, but the widespread acknowledgement of past losses has not prevented the same funding processes from being repeated throughout the course of the war. According to Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments, the problem is ingrained in the U.S. approach to funding in Afghanistan. “A lot of the money is spent with little regard for the effectiveness of it,” Harrison said. “We don’t actually try to do small-scale experiments to figure out what type of programs are effective at achieving our objectives before rolling out large programs.” In one case (PDF), the U.S. purchased $138 million worth of spare parts for the ANA despite not being able to account for $200 million worth of parts that had already been purchased. According to Field, the SIGAR auditor, the disappearing funds stem from U.S. forces’ heavy reliance on Afghan record-keeping without measures to ensure that the money appropriated is being spent as originally intended. For instance, according to Field’s audit, U.S. forces requested $134.6 million in funds to provide fuel for the Afghan National Police during the 2013 fiscal year despite having little reliable information from the Afghan forces on how the money would be spent or distributed. To make these requests, CSTC-A relied on past ANP fuel orders as well as internal assumptions about Afghan forces’ fuel consumption. Though CSTC-A had purchased fuel for the ANP for six years, it could not provide information on the number of ANP vehicles and generators in use or the rate of consumption, according to SIGAR. Similarly, in the case of vehicle parts CSTC-A, relied on the ANP to keep an accurate record of spending and equipment on the bases under its supply program, while keeping no separate records. “CSTC-A is essentially guessing at how much money they need to be obligating to buy vehicle spare parts of the ANSF,” Field said. “I really think that’s the most stunning and disappointing findings in both the fuel report and the spare parts report. The U.S. government is giving hundreds of millions of dollars to the Afghan government without even knowing if they’re in the right ballpark of what they actually need.” CSTC-A has approved $243 million in direct funding for Afghan forces for the current 2014 fiscal year, even though officials believed that such contributions would be at “high risk” for abuse. Direct funds are given straight to the Afghan government to be spent through its budget and can be very difficult to keep track of. “We have a lot of concerns about how on budget and direct assistance is going to be monitored,” Field said. The U.S. cannot count on the help of local oversight bodies in Afghanistan, either. “There are some oversight bodies in Afghanistan. They’re in their infancy, I would say,” Field said. “We have…found concerns about the capabilities and integrity of those agencies,” she said. Corruption remains a pervasive problem in the Afghanistan security forces and among the politicians who control the Afghan military’s budget. “Individuals are pocketing the money to sell fuel bought by the U.S. government that should be going to the Afghan National Police but are instead being used to line their pockets,” Field said. In spite of these issues, the U.S. plans to contribute $1.4 billion in fuel to the ANP from now until the end of the 2018 fiscal year. The U.S. drawdown is already leaving at least $7 billion of equipment and waste behind for Afghan residents as scrapped and too expensive to transport back home. These reports are only the latest in a series of SIGAR reports that have sparked action in Congress. Rep. Jason Chaffetz (R-UT), who leads the House Subcommittee on National Security Oversight, is one of the members of Congress pushing for accountability in funding Afghan forces. “This is yet another report in a series about the massive fraud and abuse in Afghanistan,” Chaffetz said. “This has been highlighted by Congress as well as the SIGAR multiple times, and yet there doesn’t seem to be the imperative in the Obama administration to fix it.” Chaffetz introduced the Accountability of Taxpayer Funding for Afghanistan Fuels Act of 2013 in September 2012, calling for more transparency in U.S. funds to Afghan police. The legislation gained momentum in Congress when it was first introduced, but the act had to be reintroduced when Congress reconvened in 2013 and now is awaiting review in committee. CSTC-A has acknowledged its weaknesses in response to SIGAR recommendations and is making efforts to amend the oversights. A CSTC-A spokeswoman, Capt. Isabelle Bresse, said the organization “is in the process of refining and strengthening the controls contained in Ministry of Interior fuel policy. Some of the focus areas include an overhaul of the national distribution plan creation process, as well as implementation of tighter controls over the monthly maximum amount each unit is authorized to order.” In an October 15 press release, officials announced that new data mining and organizational structures are being put into place at Afghan bases to ensure proper inventory of spare parts. “It’s important that the Afghan forces have systems and procedures in place to demonstrate that funds are spent on critical spare parts needed to win the fight,” Maj. Gen. Dean Milner, deputy commanding general of the NATO Training Mission-Afghanistan, said in a press release. “It’s equally vital that practices are in place to ensure the Afghan forces can effectively order, inventory and forecast future needs regarding spare parts for their vehicles,” Milner said. As part of its response to SIGAR’s recommendations for oversight in fuel purchases, CSTC-A also has agreed to review all fuel requirements for the 2015 fiscal year. In an October 10 letter to Secretary of State John Kerry, SIGAR inspector general John Sopko said auditors’ access to U.S. construction projects, some totaling more than $72 million, is dwindling to an all-time low for SIGAR investigators. “It is clear that everyone working in Afghanistan, including SIGAR, will struggle to continue providing the direct U.S. civilian oversight that is needed in Afghanistan,” Sopko wrote in his letter, projecting that oversight will fall to 21 percent of Afghanistan territory post-2014. Of the chances that U.S. would be able to stem the continuing loss of aid in the war’s final year, Todd Harrison, the defense budget expert, said: “We’re on our way out of Afghanistan now, so it’s too late to fundamentally reform the way we do things there.”