January 1, 2016 through June 20, 2016, respectively, compared to $252,462 for the year ended December 31, 2015. Other revenue for the Successor and Predecessor periods in
2016 includes revenue recognized by Newsday through July 7, 2016, affiliation fees paid by cable operators for carriage of our News 12 Networks and other revenue sources.
On July 7, 2016, the Company sold a 75% interest in Newsday and as a result no longer consolidates its operating results. As of July 7, 2016, the Company’s 25% interest in the
operating results of Newsday is recorded on the equity basis.
Programming and Other Direct Costs
Programming and other direct costs include cable programming costs, which are costs paid to programmers (net of amortization of any incentives received from
programmers for carriage) for cable content (including costs of VOD and pay-per-view) and are generally paid on a per-customer basis.
These costs typically rise due to increases in contractual rates and new channel launches and are also impacted by changes in the number of customers receiving certain
programming services. These costs also include interconnection, call completion, circuit and transport fees paid to other telecommunication companies for the transport and
termination of voice and data services, which typically vary based on rate changes and the level of usage by our customers. These costs also include franchise fees which are
payable to the state governments and local municipalities where we operate and are primarily based on a percentage of certain categories of revenue derived from the provision
of pay television service over our cable systems, which vary by state and municipality. These costs change in relation to changes in such categories of revenues or rate changes.
These costs also included content, production and distribution costs of the Newsday business.
Programming and other direct costs amounted to $1,164,925 and $1,088,555 for the period June 21, 2016 through December 31, 2016 and January 1, 2016 through June
20, 2016, respectively, compared to $2,269,290 for the year ended December 31, 2015. Programming and other direct costs for the Successor and Predecessor periods in 2016
were impacted by an increase in programming costs due primarily to contractual rate increases, partially offset by lower video customers. These costs were also impacted by the
lower costs related to Newsday (due to the sale of our 75% interest in Newsday in July 2016), lower call completion and transport costs primarily due to lower level of activity,
lower cost of sales related to wireless handset inventory and higher franchise and other fees due primarily to increases in rates in certain areas, partially offset by lower pay
television customers.
Programming costs aggregated $978,120 and $883,792 for the period June 21, 2016 through December 31, 2016 and January 1, 2016 through June 20, 2016, respectively,
compared to $1,796,021 for the year ended December 31, 2015. Our programming costs increased 4% for the 2016 periods due primarily to an increase in contractual
programming rates and a pay-per-view boxing event in 2015, partially offset by a decrease in telephony customers.
Other Operating Expenses
Other operating expenses include staff costs and employee benefits including salaries of company employees and related taxes, benefits and other employee-related
expenses. Other operating expenses also include network management and field service costs, which represent costs associated with the maintenance of our broadband network,
including costs of certain customer connections and other costs associated with providing and maintaining services to our customers which are impacted by general cost
increases for contractors, insurance and other various expenses.
Customer installation and repair and maintenance costs may fluctuate as a result of changes in the level of activities and the utilization of contractors as compared to
employees. Also, customer installation costs fluctuate as the portion of our expenses that we are able to capitalize changes. Network repair and maintenance and utility costs
also fluctuate as capitalizable network upgrade and enhancement activity changes.
Other operating expenses also include costs related to the operation and maintenance of our call center facilities that handle customer inquiries and billing and collection
activities and sales and marketing costs, which include advertising production and placement costs associated with acquiring and retaining customers. These costs vary period to
period and certain costs, such as sales and marketing, may increase with intense competition. Additionally, other operating expenses include various other administrative costs,
including legal fees, and product development costs.
Other operating expenses amounted to $1,028,447 and $1,136,970 for the period June 21, 2016 through December 31, 2016 and January 1, 2016 through June 20, 2016,
respectively, compared to $2,546,319 for the year ended December 31, 2015. Other operating expenses for the Successor and Predecessor periods in 2016 were impacted by a
decrease in employee-related costs related to the elimination of certain positions, lower benefits and an increase in capitalizable activity, partially offset by merit increases.
These costs were also impacted by the lower costs related to Newsday (due to the sale of our 75% interest in Newsday in July 2016), a decrease in share based compensation, a
decrease in long-term incentive plan awards, lower legal costs, lower sales and marketing costs, lower repair and maintenance expenses, lower contractor costs, a settlement of a
class action legal matter in 2015, partially offset by an increase in the management fee to Altice N.V.
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