Anterix : ID Transcript

Corrected Transcript

16-Jun-2021

Anterix, Inc. (ATEX)

Investor Day

	Total Pages: 29
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Anterix, Inc. (ATEX)	Corrected Transcript
Investor Day	16-Jun-2021

CORPORATE PARTICIPANTS

Natasha Vecchiarelli	Ryan Gerbrandt
Director-Investor Relations & Corporate Communications, Anterix, Inc.	Chief Operating Officer, Anterix, Inc.
Robert Schwartz	Timothy Gray
Chief Executive Officer, President & Director, Anterix, Inc.	Chief Financial Officer, Anterix, Inc.

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OTHER PARTICIPANTS

James Ratcliffe	Mike Crawford
Analyst, Evercore Group LLC	Analyst, B. Riley Securities, Inc.
Alexis R. Roper	Walter Piecyk
Analyst, Morgan Stanley & Co. LLC	General Partner, LightShed Ventures
Philip A. Cusick	George Frederick Sutton
Analyst, JPMorgan Securities LLC	Analyst, Craig-Hallum Capital Group LLC

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MANAGEMENT DISCUSSION SECTION

Natasha Vecchiarelli

Director-Investor Relations & Corporate Communications, Anterix, Inc.

Good morning, everyone, and welcome to the Anterix 2021 Investor Day. I'm Natasha Vecchiarelli, Director of Investor Relations and Corporate Communications. And on behalf of the entire team here at Anterix, thank you for joining us.

Presenting to you today from the Anterix team are Rob Schwartz, our President and CEO; Ryan Gerbrandt, our COO; and Tim Gray, our CFO. Before we begin, please note our Safe Harbor statement. During today's presentations, we may make forward-looking statements either in our prepared remarks or in the associated question-and-answer session. These statements are based on current expectations or beliefs and are subject to certain risks and uncertainties that may cause actual results to differ materially. Risk factors that may impact our performance are identified in our most recent SEC filings.

Next, a few housekeeping items. Following our prepared remarks, we will have an operator-ledquestion-and- answer session, which can only be accessed using the call-in information shown on your webcast viewer's screen. In addition, at the conclusion of today's event, a video and transcript of our presentation will be posted to our Investor Relations website.

Now, let's turn to the exciting part. We have a great morning lined up for you. We'll start with a short video highlighting Anterix's recent achievements before turning it over to our CEO, Rob Schwartz.

Thank you, and let's begin.

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Anterix, Inc. (ATEX)	Corrected Transcript
Investor Day	16-Jun-2021

[Video Presentation] (00:01:49-00:03:43)

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Robert Schwartz

Chief Executive Officer, President & Director, Anterix, Inc.

Good morning, everyone, and welcome to the Anterix 2021 Investor Day. It's been over two years since our last Investor Day. And as this is my first as CEO, I'm really excited to have this opportunity to share our vision of the future of Anterix. This is a vision that has been refined and improved over these past two years with our deep industry collaboration and experiences, our breakthrough successes and the resulting increasing market momentum and tailwinds, all fostering our mission to drive what has become a private broadband movement in the utility and critical infrastructure industries.

This is a vision that underpins our investment thesis. I'm very proud of our team having navigated the complexity of an FCC process, transforming our nationwide spectrum into a highly valuable unique asset. We've identified a high margin opportunity to monetize that asset. We have fostered and facilitated considerable demand for this asset. We have assembled a team of seasoned wireless, utility and infrastructure experts, all executing on a plan that has already removed numerous initial business risks, and a plan that can translate into what we believe can be significant near-term cash flow.

We'll also use this opportunity to further detail Anterix's progress to date with our target customers and the overall market and as a result, our strengthening position for execution in this next chapter of our growth. And ultimately, we'll talk about the resulting positive improvements to our business model and investment thesis as measured by accelerating cash flows, risk reduction of execution, opportunities for capital return, and options for future value expansion.

I'm proud to say that two years later, our focus on our mission not only remains the same, but with our breakthrough achievements since then, we believe we now have the significant momentum and tailwinds necessary to achieve this mission. And while our mission remains the same, from an investment perspective much has changed within the last two years. With our team's execution and achievements, we have removed significant risks, while simultaneously expanding on opportunity. Specifically, we have eliminated the question of whether we can convert our spectrum from narrowband to broadband. We also no longer have the question of whether there is a demand in the utility sector. We also demonstrated that we can monetize our spectrum asset at fair market value. And we're on a clear path to be fully funded.

We've demonstrated that we could educate and ultimately unify the utility sector in line with our vision. And then we've also brought together the technology sector to join in this movement and to centrally position Anterix for incremental value-creating opportunities. And ultimately, the utility and policy environment has changed significantly to our benefit.

So with that, let me elaborate on our vision, which guides me and my team on our journey. Leveraging the valuable nationwide low-band spectrum asset on our balance sheet, Anterix intends to become the de facto private wireless broadband solution provider to the utility and critical infrastructure sectors. This relationship starts with the long-term leasing of our spectrum to individual customers at fair market value, enabling each of these entities to build, own and operate the private broadband communications networks that are essential to supporting the rapidly changing industry monetization requirements that I'll expand upon shortly.

And as each of these utilities builds its individual private LTE network across their broadband service territories, we then see an organic opportunity to bring together these individual deployments into a nationwide federation of

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Anterix, Inc. (ATEX)	Corrected Transcript
Investor Day	16-Jun-2021

networks. We call this the network of networks. And with it, utilities will capture the nationwide scale and scope to support current and increasing requirements and drive collective innovation.

As defined by Metcalfe's law, the value of a network grows exponentially with the number of users on that network. With our launch of the Utility Broadband Alliance, our Anterix Active Ecosystem Program and the many public forums where utilities are speaking out about the benefits of collective action at 900 megahertz, we are already seeing this growing industry desire to capture the scale network benefits with their trusted peers. This virtuous cycle can not only improve utilities collective cybersecurity, resiliency and decarbonization efforts, but will also continue to enhance the appeal of our Anterix offering and is already resulting in an increase in the 900 megahertz spectrum leasing interest in our pipeline.

This collective innovation supports the deployment of technology to [ph] sense and de-power - down power lines (00:08:57) to prevent wildfire and reduce the risks of electrocution. It enables two-way communication with the rapidly growing sources of renewable energy and battery storage, to minimize carbon production and reach more aggressive emission reduction goals. Further, this collective innovation enhances cybersecurity by separating the private network from the public Internet and enables additional customized layers of cybersecurity protection.

And while our primary goal will always be to maximize Anterix shareholder value, it's meaningful to me and my team that our vision addresses an urgent national need to foster and protect our nation's electric grid and support the robust introduction of renewable energy sources. Reaching aggressive carbon reduction goals over the coming years will require broad scale deployment of intermittent sources of power, including residential and industrial scale solar, wind and battery storage, as well as the electrification of numerous sectors including transportation.

Having resilient and secure communications networks to manage all of these new distributed energy resources will be critical to achieving carbon-neutral goals that address the climate crisis. And unlike some companies that need to shoehorn ESG requirements into their strategies, we are passionate about our vision including at its core the use of our spectrum to provide the connectivity that vitally supports the decarbonization and electrification requirements of our nation. And it's not just our mission, it's the absolute driving rationale for our product. Simply put, wireless broadband is essential to address the environmental reckoning that all utilities are facing. And this highlights an important sense of purpose to our Anterix vision.

As stakeholders, we should all feel great about this, not only because of the enhanced value proposition it provides for customers as well as the opportunity it presents for Anterix, but because of the vital role we serve in this vital mission. So in order to fully appreciate our Anterix vision, I'd like to break it down to three fundamental elements of our opportunity including the supply side, the demand side, and then the resulting business opportunity at the intersection for Anterix.

First on the supply side is our nationwide 900 megahertz spectrum asset. As most of you are aware, after nearly six-year pursuit of our petition at the FCC, just 13 months ago we received a historic rulemaking, setting up a clear process to allow Anterix to convert our nationwide spectrum holdings into broadband licenses. The purpose of our FCC journey and accordingly the need for broadband can be traced to the digitization of the electric grid, as the new use cases require a more robust communications platform. And this was even further confirmed by the FCC stating that we think the 900 megahertz band can be a source of innovation for electric utilities.

Licensed spectrum is the foundational element to build private and secure wireless networks. Our 900 megahertz spectrum is low-band, which is known as beachfront property in the wireless industry, because of its significant performance advantages and its scarcity. It's all been assigned by the FCC and it can't be reproduced.

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Anterix, Inc. (ATEX)	Corrected Transcript
Investor Day	16-Jun-2021

Low-band means under 1 gigahertz, which based on the laws of physics can travel greater distances and better penetrate obstacles like walls than spectrum at higher bands. This translates into a fraction of the number of cell sites to cover comparable areas that would be required by higher bands of spectrum. The result is a substantial capital and operating cost advantage inherent in low-band spectrum like ours, and often as much as 50% savings for the total cost of ownership to our utility customers to build their private broadband networks. With this spectrum offering, combined with our experienced team and the ecosystem we've created, we're able to supply a solution tailored specifically to utility needs.

So now having defined the supply side, our unique spectrum asset, this leads us to the second element, the demand side of the equation. While we were pursuing this FCC ruling that allows us to convert our spectrum to broadband that can be used by practically any sector, we concluded several years ago that the highest and best use of the spectrum, the bull's-eye of our target is to enable electric utilities and other critical infrastructure providers to finance, build and operate private broadband networks.

Given the importance of what utilities do, they have always relied upon private networks to support these critical needs. The utility industry is a regulatory protected sector of valuable and mission-critical companies that provide the electricity that serves as the lifeblood of our nation's economy. The US electric sector generates over $400 billion in annual revenues and is projected to invest $140 billion in annual capital expenditures, and strongly demonstrate its resiliency through this COVID pandemic and resulting recession.

This is a sector going through immense change, fueled by unstoppable macro forces of decarbonization requirements, renewable energy generation and industrial electrification, while simultaneously facing growing cyber threats and frequent natural disasters. And reinforcing the need to address this change is a growing drumbeat of supporting statements, legislation and requirements from both the administration and the regulators of this industry. These include acknowledgments in multiple pieces of legislation that support a reliable, resilient and secure private communications solution.

Foundational to this utility grid modernization is communications, driven by the need for connectivity to provide situational awareness and allow for the command and control of millions of distributed assets across a growing utility footprint. This connectivity then enables data-driven intelligence that supports lifesaving and transformational new use cases. It is this need from utilities for private broadband connectivity that's propelling the demand side for Anterix's spectrum offering and is reflected in our growing list of [ph] pilots (00:15:34) and industry activity.

And to give you a better sense of these transformational changes that drive this demand, I'd like to share with you a short video of a discussion between our Executive Chairman, Morgan O'Brien and Colette Honorable, a leading voice of the industry as a Former Commissioner of the Federal Energy Regulatory Commission, a Former Chair of the Arkansas Public Service Commission and on the board of one of the nation's leading utilities.

[Video Presentation] (00:16:07-00:21:16)

So with this understanding of how the Anterix supply of unique nationwide spectrum meets this growing industry demand for mission-critical private broadband networks, let me now explain the Anterix business opportunity at this key intersection and some positive refinements to our business model.

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