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

For tHe ten (10) MontHs ended January 31, 2023, ControllaBle inCoMe BeFore interest, depreCiation, aMortization, and inCoMe taxes deCreased $(2,744,000) to $4,147,000 as CoMpared to $6,892,000 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 Ten (10) Months Ended January 31, 2023, Total revenue was relatively in-line with the Budget $69,698,000 as compared to $69,138,000 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 Ten (10) Months Ended January 31, 2023, Apartment revenue increase $402,000 to $61,162,000 as compared to $60,760,000 in the Budget. The increase of $402,000 was principally related to an increase in surcharge rent.

Other Rental Revenue - For the Ten (10) Months Ended January 31, 2023, Other Rental Revenue increased

$211,000 to $1,631,000 as compared to $1,420,000 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 Ten (10) Months Ended January 31, 2023, total expenses increased $3,304,000 to $65,550,000 as compared to $62,246,000 in the Budget. This increase is explained in the following expense categories:

Administrative - For the Ten (10) Months Ended January 31, 2023, Administrative expenses increased $570,000 to $5,074,000 as compared to $4,504,000 in the Budget. This increase is principally due to (1) Account 505.30 Commercial Leasing Fee – an increase of $92,315 related to 6% fee for each lease renewal or new lease which is paid to management (2) an increase of $191,000 in collection costs related to the courts opening up (3) an increase of $189,000 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 Ten (10) Months Ended January 31, 2023, Maintenance and Operating costs increased $3,212,000 to $12,926,000 as compared to $9,714,000 in the Budget. This increase is due to the following expense categories:

Contracted Services – For the Ten (10) Months Ended January 31, 2023, these accounts increased approximately $2,866,000 to $7,694,000 as compared to $4,828,000 in the Budget. This increase is principally due to the increase in Apartment Repairs. 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 Ten (10) Months Ended January 31, 2023, Public Safety costs decreased $(1,311,000) to $4,255,000 as compared to $5,567,000 in the Budget. This decrease is principally due to the Budget reflecting a full staff. The Budget is summarized below:

1. Supervisors a. Lieutenants – The Budget reflected 3 Lieutenants at full staff and we have 2 actuals with 1 vacant position. b. Sergeants – The Budget reflected 7 Sergeants at full staff and we have 6 actual with 1 vacant positions.

2. Guard Salaries – The Budget reflected 100 Guards at full staff and we have 65 actual Guards with 35 vacant positions.

Power Plant – For the Ten (10) Months Ended January 31, 2023, Total Power Plant expenses increased $1,223,000 to $15,417,000 as compared to $14,194,000 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 & Fuel – Oil) - For the Ten (10) Months Ended January 31, 2023, Fuel increased approximately $182,000 to $222,000 as compared to $40,000 in the Budget. This increase is due to the additional fuel-oil costs related to the installation of a new aerator in FY 2023 which required running the oil fueled generators.

2. Fuel, Heating and Gas - For the Ten (10) Months Ended January 31, 2023, Fuel expenses increased $184,000 to $5,826,000 as compared to $5,642,000 in the Budget. The reason for 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) National Grid - The favorable impact of the Change in our Service Rate Classification from a SC4A - High Load Factor Service ($0.2640 per Therm) to a SC21 – Baseload Distributed Generation Sales Service classification ($0.0327 per Therm) from

National Grid that management was able to obtain through a 3rd party Energy broker. This rate classification change has reduced our National Grid bills from over $300,000 a Month to approximately $120,000 a Month. If usage remained constant, the savings would be over $2,000,000 a year!! The savings would be offset by any increase in usage.

(2) 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 Ten (10) Months Ended January 31, 2023, Water and Sewer expenses increased approximately $1,170,000 to $5,193,000 as compared to $4,023,000 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 are 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 Ten (10) Months Ended January 31, 2023, Insurance expenses increased $961,000 to $6,708,000 as compared to $5,746,000 in the Budget. The increase is due to the 2021 and 2022 insurance policies renewals. 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 on our costs.

Employee Benefits - For the Ten (10) Months Ended January 31, 2023, Employee Benefits expense decreased $(1,083,000) to $7,050,000 as compared to $8,133,000 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 impact of the onetime $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.

1. Reserve Funds (Wells Fargo and HCR) - The reserve and escrow balanceS were $30,358,000 as of January 31, 2022.