Anterix(ATEX) - 2023 Q4 - Annual Report

Spectrum Holdings and Licensing - Anterix holds approximately 50% of the 900 MHz band spectrum in the United States, with nationwide coverage including Hawaii, Alaska, and Puerto Rico [14]. - As of March 31, 2023, Anterix was granted broadband licenses for 105 counties, up from 21 counties in 2022 [16]. - The company has negotiated and contracted approximately two-thirds of the transactions required to clear the licensed broadband segment channels [21]. - Anterix's strategy includes converting narrowband spectrum to broadband licenses and offering long-term leasing of broadband spectrum [17]. - The company aims to support digital transformations and infrastructure modernization for critical infrastructure industries [17]. - The company is actively working with federal and state agencies to promote the benefits of private broadband LTE networks for utilities [26]. - The company is focusing on expanding its customer base beyond electric utilities to include ports, railroads, water, oil and gas facilities, and mining operations [29]. - The company is facilitating the adoption of 900 MHz Band 8 radio access network equipment and end-user devices in the U.S. to support PLTE networks [28]. - The company has invested in business development and marketing teams to enhance customer relationships and grow its pipeline [34]. Agreements and Financials - The Ameren Agreements cover a service area of approximately 7.5 million people with a total scheduled prepayment of $47.7 million over 30 years [35]. - The Evergy Agreement, covering a population of approximately 3.9 million people, has a total prepayment of$30.2 million for a 20-year term [38]. - The Xcel Energy Agreement provides dedicated long-term usage of the 900 MHz Broadband Spectrum for a term of 20 years across eight states [40]. - The Xcel Energy Agreement includes total prepayments of $80.0 million, with$8.0 million received in December 2022, and remaining prepayments due by mid-2028 [41]. - The SDG&E Agreement involves a total payment of $50.0 million, with an initial payment of$20.0 million received in February 2021 and the remaining $30.0 million due through fiscal year 2024 [43]. - The LCRA Agreement has total payments of$30.0 million, due through fiscal year 2026, as the relevant cleared 900 MHz Broadband Spectrum is delivered [45]. - Revenue recognition for the Xcel Energy Agreement will occur over approximately 20 years as performance obligations are met, starting in Q2 FY24 [42]. - The company delivered 1.4 x 1.4 cleared 900 MHz Broadband Spectrum to SDG&E in September 2022, resulting in a milestone payment of $0.2 million [43]. Regulatory and Compliance - The FCC approved a Report and Order on May 13, 2020, to modernize the 900 MHz band, creating a 6 MHz broadband segment [51]. - The company entered into an agreement with the Association of American Railroads to cancel licenses in the 900 MHz band, enabling the AAR to relocate operations [57]. - The company is collaborating with incumbents to clear the 900 MHz Broadband Spectrum allocation in Xcel Energy service territories [41]. - The company satisfies the 50$0.93 per MHz of population covered (POP) from the FCC's 600 MHz auction [63]. - The company began acquiring additional channels in the 900 MHz band in 2015 in anticipation of regulatory changes [68]. - The company has been retuning channels with Covered Incumbents since 2015 to facilitate compliance with the 90% Broadband Segment Test [69]. Employee and Organizational Culture - As of March 31, 2023, the company had 82 full-time employees and engages consultants and contract workers as needed [78]. - The company conducted an Employee Engagement survey in 2021 with 80% participation, indicating a highly engaged workforce [80]. - As of March 31, 2023, 33% of the Board members and 28% of the workforce identify as diverse, with 31% of new hires being females and the overall workforce being 35% female [81]. - The company has implemented a hybrid work model requiring employees to work from the office three days a week, three weeks a month, balancing team development and personal benefits [82]. - The company is committed to fostering an inclusive culture through initiatives like Anterix GROW, which was launched in February 2023 [81]. - Employee sentiment is gauged through surveys, and the company is dedicated to addressing areas needing improvement [82]. - The company has established partnerships with organizations like INROADS and Talent Hue to enhance diverse talent recruitment [81]. - The company provides training and development opportunities, including leadership coaching and mentoring, to support employee growth [82]. Financial Risks and Economic Factors - The primary exposure to market risk is interest income sensitivity, with a 10% change in market interest rates not expected to materially impact financial condition or results of operations [162]. - Inflationary factors have led to increased operating expenses, and continued high inflation could adversely affect the company's business and financial condition [164]. - The company is not currently exposed to market risk from changes in foreign currency as all transactions are denominated in U.S. dollars [163]. - The company continues to monitor market risk exposure, including impacts from health pandemics and macroeconomic volatility [165].