Frontier Communications Corp. (FTR) CEO Dan McCarthy Presents at UBS 46th Annual Global Media and Communications Conference (Transcript)

Frontier Communications Corp. (FTR) UBS 46th Annual Global Media and Communications Conference December 4, 2018 11:00 AM ET

Executives

Dan McCarthy - President and CEO

Analysts

Batya Levi - UBS

Batya Levi

President and CEO of Frontier, Dan thanks so much for joining us.

Dan McCarthy

I am happy to be here. Thank you for having me.

Question-and-Answer Session

Q - Batya Levi

We’re starting the conference with the same question for everyone, as we wrap up the year, can you please talk about what your priorities are for next year? And how you think next year will be different than this one?

Dan McCarthy

Sure, so first off I think it’s a -- we’re pretty happy with where we’re from an asset perspective at this point. The key priorities that we’re focused on for next year are really around improving our revenue trends, executing on our transformation effort and really continuing to de-lever the balance sheet.

Batya Levi

Let's start with the transformation effort. When after the CTF deal, you gave us a synergy target which you delivered on, and now the new plan to generate about 500 million of incremental opportunity. Can you talk about, how that’s different than the original synergy target that we saw? And maybe provide a little bit more color on the scope of this initiative?

Dan McCarthy

So, first off, when we talked about synergies, historically, we’ve been focused to a great deal on the cost side of the equation. So, we’ve done I think a very good job of executing on that. As you pointed out, we expanded following the CTF close to higher level synergies. Now, this transformation is very different in many ways. It’s really focused on couple of different key themes, but it’s about really stabilizing the revenue trends in the business and then taking cost out by focusing on improving business performance and business processes.

The way to think about where Frontier is at this point as if you go back in time, as we -- several deals [indiscernible] last 10 years or so, we put together those entities and we’ve really taken out the cost that -- that were right there in front of us that were easy to go after. And where we are now is as we have focused on integrating further and deeper, we have identified pockets of inefficiency in the business.

Some of it is affecting our performance on the revenue side is for unit trends. Some of it is affecting our operating expense levels. Other ways are really affecting some of our CapEx levels, so when you look at that we’ve taken apart the entire organization, and identified those areas and we’re sequencing them in a way that helps us first stabilize revenue and then moves forward with driving improved EBITDA as we take the OpEx out of the business.

Batya Levi

Can you provide a little bit more color on that sequence? Has the plan been approved and set to go? When can we start to see the implementation of that?

Dan McCarthy

Yes, the plan actually, we launched the plan in late summer. So, we've been working on what we think are the higher opportunity revenue levers to pull. So the teams that are doing that, we’ve about 13 different teams cross functionally working on different specific opportunities. We have another probably 26 opportunities that are sequenced behind those. So as we go forward and start pulling the levers, really the initial view was, what can I do on the consumer and the commercial side that would change the current trends in the business; and at the same time where our some triple wins. So if you win after certain OpEx categories you improve the customer experience, you actually get hard savings and you go after a long-term target which is putting more of our customer service experience in our own hands versus where it’s outsourced to that.

Batya Levi

Is this also going to involve a new -- brand new marketing strategy and branding of the services and products?

Dan McCarthy

Yes, during 2018, we went forward and changed our agency, really changed our focus on how we want to market. So Hill Holiday is our new partner. We spent a lot of time researching where we could position ourselves. That was really being a guide on the digital Frontier. And as we went forward, we went through that rebranding through the summer and into the third quarter, and we’re just starting to see it ramp into normal production at this point.

Batya Levi

Maybe digging a little bit with broadband business and the subscriber trends that you’ve posted, on CTF broadband, we've seen some improvements, but it hasn’t quite grown yet. Can you talk a little bit about why that is?

Dan McCarthy

Yes, I think that’s a valid observation. I think year-over-year, we’re essentially stable, right now, on the FiOS side of the CTF broadband equation, where we’ve also made some headway on the copper side, but stability isn’t really where we want to be on that. So for us we’re looking at additional channels that we can bring on even though we think we got gross activation levels comparable to where Verizon was before that. And for us it’s about customer experience, it’s about focusing on, managing the base better and taking churn lower and doing that we think we can accelerate the net additions on the CTF side.

Batya Levi

And you do provide information in terms of CTF churn versus legacy churn, it’s a fiber product, it’s a good service. Why do you think the churn is so higher than the legacy business?

Dan McCarthy

So that number actually has both copper and fiber in it. And when you look at fiber is actually lower than that, but it’s not lower enough yet. I think for us we inherited a number of customers who were on in many cases deeply discounted triple play bundles. And as we’ve gone through we have a very focused effort on restoring profitability, around some of those bundles and that has caused a little bit higher churn, people have gone, taken the broadband product. But I think we’re getting through that now and I think when you look at where we are I think we’re in a much better place and you'll see us start to bring the churn lower.

Batya Levi

And on growth outside, are you seeing any change in the competitive environment?

Dan McCarthy

Not really, I think our main competitor is Charter and some of CTF markets. And when you look at those, their approach towards going to market from a price point perspective has been pretty static. They’re moving around a small amount that might be different sweeteners, but I think, again we’ve done pretty well in those markets stable versus the losses we had the previous year. Now, it's really around identifying micro causes of churn. And then focusing and that's what some of our teams are focused on right now how to take that churn lower, so you drive the net up to levels that were at or above were Verizon was.

Batya Levi

Looks like they’re marketing more to 200 meg speed and potentially talk about the capability of a gig like feed. How does your offer compare to them?

Dan McCarthy

So, today we’re at 200, 200 symmetrical offer in those markets. We have the ability to actually take the speeds up significantly higher. One of the things that we've been testing in certain markets is going past the 1 gig to a 10 gig offer. The traditional customer probably isn’t that interested in 10 gig offer, but it really future proofs the network. And working with some of our partners, we’ve actually lowered the optical network equipment, the NID at the House to a significantly lower price point. So in future proofing the network, we also enabled distinct capabilities.

During the year, I think one of the things that we internalized more and more customers buying up in speed. And as they did, we’ve been investing in this way some of our CapEx. This last quarter, we’ve been investing around those speed sales and probably manifest itself is really around either some older equipment they got changed out, that was perfectly suitable for what they were taking at the time to next generation equipment and also investments in the links in the transport system in the network. Our view is that we will have the entire network in 2019 fully capable ubiquitously at 1 gig. So, whatever the competitive environment looks like, we’ll be well positioned.

Batya Levi

And in terms of the, I guess the perception -- the customer perception, there were some disruption after the merger. Do you think that customers understand that you do have as good of a product, if not better versus cable? Or do you think that there needs to be more work to be done there?

Dan McCarthy

Well, I think, I certainly think that there were customers that had either a poor experience calling in for customer care, but when you look at the latest data whether you look at the FCC, you see that the product is performing quite well in those markets. Our net promoter score has continued to increase as we’ve moved further and further away from the cut over issues that we experienced.

So I think the network is providing a very good experience. I think we have to do a better job of managing the customer lifecycle. So from promotional pricing that might have been very deeply discounted at one point, to a more reasonable price point that keeps us profitable and grows our margin around the video business, but balances the competitive forces that are placed in the market. So, I think the experience is good. I think it will get better as we do even better job at things, self care and tech support. That's again another battle and another initiative that's being fought right now.

Batya Levi

In terms of the legacy broadband, in the second quarter, you had a little bit of a boost from the commercial account, holdco accounts. And but even if we adjust for that seasonal impact, there was still a bit of pressure on the DSL performance. What’s driving that?

Dan McCarthy

Yes, from my perspective, I think our heavy focus has principally been around where we’ve had the fiber and really changing the trends because we think most opportunities exist there to take us from where we are from the penetration perspective to a significantly higher level. So we focused a lot of resources around that. I think when you look at the copper side it is not so much that our churn is increasing on any of copper products. It's more about the fact that we haven’t been able to crackdown on which channels and how to market some of the non-ubiquitous capabilities of the copper side. So speed just in the DSL world is very loop-length dependent. And when you look at where we’re today, we just have to do a better job ourselves and how we offer the right products to customers in the right channels, and that’s something we’re working on. It’s not going to improve overnight, but I think you'll see steady improvements as we get into ’19.

Batya Levi

And you mentioned that the new branding and marketing is launched. Is it across all your footprint including the legacy as well, so are we seeing full marketing in that region now?

Dan McCarthy

We are and it’s very heavily digital-focused. So, you'll see more video advertising, commercials and obviously our top tier markets, but it is launched everywhere. And we've retired Frank the Buffalo and all of divestitures of the old marketing plan as we're focused on this.

Batya Levi

So going forward, is the main focus still turning broadband subscriber to growth? And how would you balance it with profitability?

Dan McCarthy

Yes, it absolutely that is focused, I would say that in commercial growth, but on the broadband side, the big opportunities are in the FiOS markets, all the FiOS markets that we operate also in the CAF II markets that we've turned up and doing a better job on offering a product selectively for higher speeds and certain markets as a value play in other places.

Batya Levi

Can you talk a little bit about more about the CAF opportunity in terms of -- maybe remind us in terms of how many homes you have passed? And what the penetration level is?

Dan McCarthy

So, the total opportunity there is about 760,000 homes. We're building out to 60% of those homes by the end of the year. And as we go through that we were seeing mid 38% penetration, I think it should be higher than 50% to 60% because of the lack of competition those areas. It's still big opportunity for us. It's really that sequencing as something turns up positioning the product for the customer and that customer may be in some kind of contract with a satellite provider because there's very limited competition there. So, we just have to make sure we capture that and then we offer at the right point and customers have been very excited about it. I think we can do even better though going forward.

Batya Levi

Maybe shifting to the video product, can you talk about how important it is to the bundle? Do you need to be in video?

Dan McCarthy

Yes. So I do think we need to be in video. We have gone through a quite a bit of research with our customers in these markets where we offer the video product. And time and again what we come back is the importance for people have bought that as a complete bundle that if we had sunsetted a video product that would be potentially a large churn stimulus. So where we think really it is very important, we think we need to offer the product different ways and different channels. We do think there's things that we can do to work on our cost structure as far as content as far as how we offer through different channel partners but a different focus on bundled strategy on a more profitable. And also I think you'll see us really continue to be in linear where we don't have linear, dish is still a viable option and we offer that especially across the measure.

Batya Levi

How do you think about this streaming alternative? Would you shift the linear strategies to that?

Dan McCarthy

Well, I think it's such a quick pace and how things are evolving. I think different products and offers are coming, whether you're looking AT&T product and you look at a YouTube product, I think for us, we've always thought that for our linear base, that could be a complimentary way of offering it. So we were one of the first to embed Netflix, for instance, in our guide. The customers can just click to it, and if they're logged in, they go right into the Netflix experience.

I think that, I think that'll still be very important. Should we have more of those options? Yes, I think so. I also think though, that having an over the top partnership that we can use outside of linear or if somebody wants to a standalone broadband product offer that as a complimentary solution is very important. I think that where we are right now is we're exploring that with a number of different partners and we hope to actually resolve that and bring something to market in '19.

Batya Levi

And maybe one more related to the broadband type, can you talk about how you think about 5G -- fixed 5G impact on your business?

Dan McCarthy

Yes. So, we have not seen a big impact even in places where Verizon has started a pilot, what I think about 5G is the density that’s required from a micro tower perspective, it kind of pushes you to some of the more dense urban markets to really make it work. So in those markets where we’ve the high sense, we also have the best network. So, we don't see it as a huge competitive threat there right now, but I think it will be a while before it makes to that really rural areas, and in the meantime we’re looking at other ways to participate in the ecosystem in different ways.

So that might be fiber to those micro sites, it might be a way of enabling forward edge computing, using some of the structures that we have in our network today, and the interesting thing when you think about how telecom network was constructed historically, it puts very strong sheltered HVAC controlled very robust power in an area that if somebody's looking to do forward computing to enable different applications whether it’s 5G or even they want to put it further out using fiber, we’re uniquely positioned to offer that in most of our footprint. So we’re trying to explore and see if there's a way to monetize those assets in that way and participate in 5G ecosystem in a different way.

Batya Levi

And maybe generally talking about your ability to improve ARPC, residential ARPC, I mean price increases, subscriber growth. Can we expect that to continue?

Dan McCarthy

So for us ARPC is obviously the outcome. There’s a number of initiatives that are underplay, some of them are definitely around acquisitions as you pointed out. So, it’s usually about what’s acquiring at what customers are leading at, but then there’s a host of other points and levers along the way. That’s been where I think our greatest success has been. We’ve brought on customers at kind of the traditional acquisition kind of strategy. The ones that are leaving are wide -- there is a wide disparity and where they are why they’ve lost and where they’ve gone.

But when you look at how we manage the base and how we do it effectively, we’ve been ruthlessly trying to improve how -- and simplify how we manage that process. And as we’ve done it, we’ve been more successful in moving customers in the lifecycle through the first year into second year into third year and really retaining them for a longer period of time. That's been probably the biggest lever and that's really what's helping us to drive ARPC, and I think we’re getting better at it every single month. So, it’s hard to make a prediction will happen on the ARPC. But I think, you'll see us continually move the ball and on all of those levers and hopefully the output is the ARPC slightly increasing.

Batya Levi

And do you also see some sort of a better pricing environment coming from the competitors also as they’re focused more on profitability and maybe more benign competition?

Dan McCarthy

Yes, I think benign competition would be too strong, but I do think that it's rational. I think that competitors are feeling the same whether you’re 22 million or 50 million video subs or you’re a 1 million like the rest. I think the content providers are really pushing the envelope. So, I think people are looking for different ways to offset that margin erosion and we’re no different than that. So I think that's similar and people are attacking in different ways. But I don't see it being irrational from a competitive perspective, intense still no doubt but not irrational.

Batya Levi

Maybe shifting to the commercial business, can you -- it looks like to be trends across the board having a little bit soft for every carrier. Can you talk about what you think is driving that? And what you’re seeing in terms of customer demand?

Dan McCarthy

Yes, for us -- I can't speak for all the carriers, but I think if you broke it down into the various segments, for us, we've seen relatively good performance in the wholesale segment. We do expect longer term to have some kind of pressure that may arrive around pricing on the wireless business. But by and large that segment this year is performed very well for us I think where we haven't necessarily performed as well and is really around the very small and the medium space.

Medium space probably a little bit better than the small space that's been our Achilles' heel for a couple years; and as we went into, beginning to really operate and CTF what we're overcoming and what we're trying to figure out and what the segments and the channel and the offers that kind of change the paradigm a little bit is the fact that Verizon really had stopped going after those. So really the market had been become conditioned to limited opportunities.

So, as we go in where we have overcome some of that momentum or lack thereof, that's there. On the medium side, it's just a longer sale cycle. We see those customers really looking at technology solutions as a way of transforming their business. So it's not as quick pace as it might have been just quick additions of capacity it's people assessing whether or not they want to go to a different technology in the cloud and how they're going to do that, how they manage their network. So it's more complicated sale. So slows it down a little bit. But I think in general, the commercial opportunities still very large for us. How we unlock the lower end of the opportunity is probably the thing that's been most frustrating.

Batya Levi

I think you had mentioned that you're going to look at each cohort and develop products and services that appeal to them. Can you provide an update on where we are on that process?

Dan McCarthy

Sure. One of the other things that clearly broadband is foundational for virtually every small customer, but then after that it really does move in different directions based on what their business process needs are. And that could be everything from disaster recovery to a different way of managing information for customers and data analytics. So, we have about 4 different products that we're looking to move into the market. First one is in test as soon as we're ready to go more commercial we'll talk a little bit more broadly about that probably in the Q4 call.

But each one of them is designed to address the specific area and really designed to go with a different channel strategy. And as we go forward with that, I think it's going to be very interesting to see if the way we had done things before really starts to evolve and change from a trend perspective. I'm very bullish about it, because I think that those, the analytics that will help hide it and really developing it is far better than what we've done in the past.

Batya Levi

Okay. And you have cable competition for a while now, are you seeing any change in their intensity? And is this just cable or are you seeing other entrants in the commercial space?

Dan McCarthy

I think clearly there's still some see lack of there, so whether that's wind stream or some others we still see them as a significant competitor and in Florida and in Connecticut for instance. But it principally is cable. It's really them coming in with, actually a rich price offer. So it's not, they're not people discounting, it's just that they've been in the market as the person who will taking share for so long, it's just, it's about reversing their momentum.

Batya Levi

Okay. And on the wholesale you mentioned that it's been pretty stable. The wireless backhaul had pressure in the past. Are we mostly through that now?

Dan McCarthy

Wireless backhaul, I think you’re capturing it correctly, I’d say we’re mostly through the transition from TDM to Ethernet and that really of course slowed down by one or two carriers that either might been a deal or might have evolved their architecture design over time. So that's kind of slowed that a little bit, but we’re essentially through it. Now where you are is really people looking for price concessions and you might see that somebody leveraging something that's happening in the relationship to try to attain that. We work with people all the time on renewals. We haven't seen a manifest itself yet, but that could be a place where pressure does come.

And I’d say, the pressure that we do see is, if you break up the whole subcarrier into the wireless switch, it's a smaller component of our business now. The rest of the TDM world is not really driven by an AT&T or Verizon saying, I want to move this customer to that. It is really driven by customers and their evolution of their technology overtime, and that's really why there's been a prolonged tail on that while people haven’t necessarily moved directly to Ethernet. So, we’ve designed our approach to people options. I think you'll see that as a constant change where people moved from TDM to Ethernet and then start a buy up on capacity. It’s just a little bit different than where we are, so that's really what's going on the carriers side right now.

Batya Levi

And within that technological change, I guess a new debate is the shift to a tier 1 from MPLS. How do you see yourself positioned? Do you think -- do you expect more maybe deflationary pricing in passing the overall segment?

Dan McCarthy

Yes. So, interesting for Frontier, I think we because of the structure of the deals that we did with Verizon and AT&T, most of the large commercial customers stayed with those entities and then we either are the provider for underlying physical assets to serve someone, but MPLS and all the stack around it are something that we didn't acquire. So we really don't have that as a potential weakness in the revenue base. For us SD-WAN is just upside, it's about taking business away from someone else, providing a robust web of managing customers, and we get to skip that whole risk that everyone else is dealing with on how do I manage the base as they go from MPLS to SD-WAN. So for us, it’s a pure upside opportunity.

Batya Levi

Maybe just looking at more near term 4Q outlook you had provided that you expect profitable EBITDA to be roughly flat. Can you talk about if we should think about any seasonal impact to that outlook or anything maybe from the California fire in fact that could deter it?

Dan McCarthy

I think in Q4, we’ve been pleased with how Q4 is progressing. We felt very confident on the call guiding to that level of EBITDA. The California fire did impact us in select areas in Southern California. It was a minimal impact from a customer perspective and it’s really more fire damage around poles in certain canyons. So, we’re working on that right now, but we don't see that as having a big impact on Q4. If anything it’ll be slight amount of CapEx that we need. Once people decide to rebuild and it’s been a little while, so we won’t be a rush to get anything built because 1,000s have gone in many case.

Batya Levi

And maybe just going back to the transformational program and how we should think about trends into ’19. Do you think that we’ve seen the worst in terms of the revenue decline as you start to implement the program? Can we start to see the revenues going the right direction?

Dan McCarthy

Yes, that is, that's what's the whole plan is about. So I do think that the worst of the rendered client is in the past I think that we're working on improving the trends further from where we are right now. And that the efforts around that will, we'll be able to track and see changes on the revenue line items. And then, as we do that, the idea is to drive accelerated cost reduction and really achieve that $500 million EBITDA impact.

Batya Levi

Okay. And any expenses that we should think about as you implement that program for potentially some other things in the base already, but going forward into '19?

Dan McCarthy

There certainly will be some as we identify different opportunities will try to include that in the plan and guide that as we give guidance in February, but right now it's really about finding ways to improve business processes in a way that we really haven't done before. And as we've gone through it and really taken a very, almost I would say historic operating company approach of really driving ruthless standardization and then as we do that taking out any cost of deviate from that is really starting to pay dividends.

We're starting to see it already and some of our field costs and how we're working on that, it's freeing up capacity to improve customer intervals and delivering services. And now it's about really focusing on the turn side and a better selling cadence and efficiency on the sales side in our call center. So you put all of those things together, it really does arrive at hopefully a nice change and trends as we get into 2019.

Batya Levi

Okay. And will that show up both, at the same time both in the residential and commercial business?

Dan McCarthy

So we've had of those teams we've absolutely had teams that are working on everything from re-segmenting and going after the commercial base, but the lion's of share of the teams have been working on the consumer side. So that should be the place where we see some opportunity rather out of the gate to make changes in the trends. And that's, the teams are evolving that will spin up, spin down, move on to different opportunities that have been assessed and quantified.

And as we do that, we build more competency and we see the acceleration of the pace of change. And that's the thing that we're balancing, how much change introduce and really go after these things. And we're all about getting it done as quickly as possible, but also not overloading any specific group that is charged with a specific part of the customer, so that's where assurance process or the acquisition process.

Batya Levi

Okay. And that's done on a holistic basis. We should not think about that. You will focus more on CTF versus legacy. Is that correct?

Dan McCarthy

That is correct. I think that has been teams that have very and a large focus on CTF because we see the biggest opportunity on taking the churn down there, but there's other teams that are working on early churn characteristics on the copper side and really how do I better sell both copper and fiber across the channels because for us, we still get a significant amount of our sales are through partnerships. So, getting everybody in the ecosystem a lift through some of these initiatives really has a compounding effect for us.

Batya Levi

And we're exiting the year with stable EBITDA. With all these initiatives, can we expect that to continue into '19?

Dan McCarthy

Well, we're still developing our plan right now. We'll be presenting it to our board over the next couple weeks, but that's really the goal. So, it's about stability and then driving it higher with the cost reductions are associated with better business performance around some of what we see as significant opportunities. It's not those kind of opportunities where you just walk in and take it out of the business, it’s about really reengineering business processes. And as you do that, I think you become much healthier for the long-term, but it's a little bit slower process than what we’ve done historically with some of the synergy programs.

Batya Levi

And maybe if we tie in the CapEx into that, this year you’re coming in a little bit higher than the guide, if you can talk a little bit about that? And how we should think about capital intensity going forward?

Dan McCarthy

So I think you should, first of all even though we’ll give further guidance as we get into February, you should think CapEx should be lower next year than it is this year, so no doubt about that. I think that when you look at some of things that drove at this year, first off we had one of the worst hurricanes in our Texas market the year before, and we went through it and we assessed the damage, and there was some that actually didn't get assessed correctly in the end of that year flowed into this year. So that was probably key driver of some of the pressure.

Second thing and we thought we could manage that quite frankly, so two other things really came along. One was we expected insurance settlements on some of our damaged plant to come in, in '18 that’s going to flow up to ’19, and that’s just a normal way of forecasting. We would expect that to come in, it didn't. And then the third thing was really a mix of sales so, so it’s hard to predict which customer is going to -- want to go for 400 megs and do they have GPON versus a BPON.

So when somebody wanted to go from 25 to 400, we wound up changing our EPON equipment on house and going through that, and we’re very happy that the customer did I think churn will be much lower. They’re very happy with the product, service, but as we went deeper in the year that accelerated that we wound up with some mix change on where the seed sales were. The combination of all those things came to head, and that’s what it drove it higher, but as we go into this year unless there’s something that come out that that’s unexpected from California fire, we’re thinking we’re absolutely lower next year than this year.

Batya Levi

And then maybe just looking out, to support the revenue stability and potentially growth in commercial would you expect the CapEx levels to remain at these levels and maybe intensity to remain in the teens -- low to mid teens?

Dan McCarthy

I think you should think about it at this level and us really focusing on trying to -- not the level of this year; next year. So lower than this year, but is there ways that we can focus on what is the key levers in CapEx. So for us, we have a very ubiquitous fire -- fiber market architecture, CapEx around whether it’s set top boxes or it could be around PON equipment or it could be around any number of things that as we involve the technology, we actually get significant benefits and then we move that through, gives us a lot of levers to actually redirect capital into other areas or take capital lower in the long run. So around lower than this year but -- and we will be guiding that as we go forward, but certainly at least 50 million to 100 million lower next year.

Batya Levi

And maybe shifting to the balance sheet, top focus is to lower leverage. Can you talk a little bit about the path to get there?

Dan McCarthy

Yes, so that’s absolutely correct, that is our goal. We think we have very manageable maturities all the way to 2022. I think everyone probably agrees on that. And for us, it's really about paying down those towers and we’re doing that. We just did and we’ll continue to do that over the coming months and really driving our way to higher EBITDA level. And the entire organization is focused around that right now and getting ourselves to deliver on that $500 million incremental EBITDA. And as we do that, that'll position us in a better place to deal with 2022.

Batya Levi

And as you deal with that upcoming maturity, do you spend to talk to revolver?

Dan McCarthy

Well, we disclose we did in the end of at this last earnings call. We were paying that back very rapidly right now. And we'll probably do the same as we come into the first quarter until the first quarter when the tariffs and will pay that back right away. That's really the focus. It's not really to keep the revolver of your own. It's growing to just deal with assured liquidity between two towns.

Batya Levi

Okay. And you are actually didn't know that your own towers, so with 95 towers sold for $80 million, either as you look at your asset portfolio. Do you still see that you have potentially non-core assets that could de-lever you quicker, that it could be sold?

Dan McCarthy

Yes. So, we actually have looked at towers over the years as something that we can monetize, when we acquired CTF we got some more and some of these were even a little bit more valuable. So we went through that process came up with I think a pretty strong deal. And that's really where we are looking at everything, everything from real estate to different things that may not be for that would be a quick way to generate more liquidity and help with you leveraging. So more to come on that I think it's sometimes it requires a willing counterparty. But you know, I think we're doing a very strong combing of the asset base we're look for those things.

Batya Levi

Okay. I think we talked about this before in terms of if you had some interest to sell the CTF for the CTF properties. How would you approach something like that as it is a growing part of the business, but it could drive higher multiple than what you are trading at right now? So how would you balance it?

Dan McCarthy

Yes, I think, CTF markets are kind of the future for us. And where we think they are part of our future. Now, it's not that we, there was a very large multiple to where we are right now, we'd always look at something for shareholders, but that's not our focus. CTF is about operations that improving it. Having said that, there were other opportunities where we could do something in part and we would always look at that. And could that be something that we'd entertained, absolutely, if it was, if it was something was in the best interest of all stakeholders.

Batya Levi

Okay, sounds good. I think we're going to end it there. Thanks so much.

Dan McCarthy

Okay, very good.