Profit and Loss Financial Statement Narrative

For the Nine (9) Months Ended December 31, 2022 (FISCAL 2023)

Rochdale Village Inc. PROFIT & LOSS STATEMENT FY 2022 and FY 2023 vs. Budget

For tHe nine (9) MontHs ended deCeMBer 31, 2022, conTrollable income BeFore interest, depreCiation, aMortization, and inCoMe taxes deCreased $(2,138,000) to $4,143,000 as CoMpared to $6,281,000 in tHe Budget Below you will Find an explanation oF tHe aCCounts witH signiFiCant CHanges vs tHe Budget:

Controllable Income is defined as income less variable expenses that can be managed by the Company (“A measure of Operation efficiency of the Company). It is commonly known as EBITDA (Earnings before Interest, Taxes and Depreciation and Amortization).

Operating Revenue and Expense variances are explained below:

Revenue

Total revenue - For the Nine (9) Months Ended December 31, 2022, Total revenue was relatively inline with the Budget $62,600,000 as compared to $62,224,000 in the Budget. Even though Total revenue was in-line with the Budget, there were variances within the Total Revenue category that are explained below:

Apartment revenue - For the Nine (9) Months Ended December 31, 2022, Apartment revenue was relatively in-line with the Budget at $54,952,000 as compared to $54,684,000 in the Budget.

Other Rental Revenue - For the Nine (9) Months Ended December 31, 2022, Other Rental Revenue increased $185,000 to $1,463,000 as compared to $1,278,000 in the budget. This increase is principally due to the increase in monthly parking charges in August 2021 from $39.50 to $45.00 and no such increases were anticipated in the Budget.

Expenses

Total expenses - For the Nine (9) Months Ended December 31, 2022, total expenses increased $2,515,000 to $58,458,000 as compared to $55,942,000 in the Budget. This increase is explained in the following expense categories:

Administrative - For the Nine (9) Months Ended December 31, 2022, Administrative expenses increased $433,000 to $4,503,000 as compared to $4,071,000 in the Budget. This increase is principally due to

(1) Account 505.30 - the increase of $92,315 related to the calculation & payment to Management of the 6% Commercial Leasing fees for lease renewals and new leases, (2) an increase $181,000 in collection costs related to the courts opening up (3) an increase of $156,000 in administrative office expenses related to inflation impacting purchases of office expense and other related costs which was not Budgeted for.

Maintenance and operating costs - For the Nine (9) Months Ended

December 31, 2022, Maintenance and Operating costs increased $2,724,000 to $11,498,000 as compared to $8,774,000 in the Budget. This increase is due to the following expense categories:

Contracted Services – For the Nine (9) Months Ended December 31, 2022, these accounts increased approximately $2,531,000 to $6,875,000 as compared to $4,344,000 in the Budget. This increase is principally due to the increase in Apartment Repairs (account 620.50). This increase is related to: (1) the cost impact of supply shortages (2) an increase in requests for floor tile replacements in FY 2023 which is related to the impact of covid delaying work in the prior year (3) the impact on expenses due to the significant increase in Inflation.

Public Safety - For the Nine (9) Months Ended December 31, 2022, Public Safety costs decreased $(1,331,000) to $3,722,000 as compared to $5,054,000 in the Budget. This decrease is principally due to the Budget reflecting a full staff.

Power Plant – For the Nine (9) Months Ended December 31, 2022, Total Power Plant expenses in- creased $1,178,000 to $13,928,000 as compared to $12,749,000 in the Budget. There were both positive and (negative) fluctuations in the expense categories which are explained below:

1. FUEL & UTILITIES - (Fuel Oil, Fuel Gas & Heating and Cooking Gas) - For the Nine (9) Months Ended December 31, 2022, Fuel expenses increased $522,000 to $5,739,000 as compared to $5,217,000 in the Budget. The reason for this increase is due to the following:

Fuel – Oil - For the Nine (9) Months Ended December 31, 2022, Fuel increased approximately $186,000 to $222,000 as compared to $36,000 in the Budget. This increase is due to the additional fuel-oil costs related to the installation of a new aerator in FY 2023.

Fuel Heating and gas - For the Nine (9) Months Ended December 31, 2022, Fuel Heating and Gas increased approximately $198,000 to $5,217,000 as compared to $5,019,000 in the Budget. This increase is related to increased usage: offset, in-part, by lower costs related to National Grid and Engie (our Natural Gas supplier) as describe below:

1. Natural Gas Prices (Engie) – In September 2020, when the Natural Gas market was at a 25-year low, Management executed a 5.5 year forward contract at $0.392 per Therm (a measurement of natural gas purchases). This locked in the price of Gas prices for 5.5 years. This means that Rochdale Village Inc. is protected from Natural gas price fluctuations till March 2026.

(3) Seasonality in the Budget was based on prior % and the actual is trending in a slightly different volume.

2. Water & Sewer - For the Nine (9) Months Ended December 31, 2022, Water and Sewer expenses increased approximately $1,075,000 to $4,696,000 as compared to $3,621,000 in the Budget. This increase is due to the Budget projecting savings from the water conservation project being delayed due to COVID. Further analysis indicates that the savings is not as beneficial as anticipated in the Budget. In addition, more residents continue working from home which results in an increase in water usage.

Insurance Expense - For the Nine (9) Months Ended December 31,

2022, Insurance expenses increased $781,000 to $5,954,000 as compared to $5,172,000 in the Budget. The increase is due to the Rochdale insurance policies renewal. In the renewal, the most significant policy increase was the General Liability including umbrella. During discussions with our insurance broker, he explained that there have been significant industrywide increases in insurance costs related to COVID and our claims experience is negatively impacting our costs.

Employee Benefits - For the Nine (9) Months Ended December 31, 2022, Employee Benefits expense decreased $(1,067,000) to $6,252,000 as compared to $7,320,000 in the Budget. The decrease is related to (1) a decrease $480,000 in Local 32 BJ benefits due to the contract reducing the 32BJ benefits to offset the one-time $3,000 bonus payment to 32BJ employees (2) A decrease in SSOBA benefits due to the vacancies as compared to the Budget at Full Staff.

Reserve Funds (Wells Fargo and HCR) - The reserve and escrow balance were $30,466,000 as of December 31, 2022.