Profit and Loss Financial Statement Narrative

For the Eight (8) Months Ended November 30, 2022(FISCAL 2023) for The eighT (8) monThS ended noVemBer 30, 2022, conTrollaBle income Before inTereST, dePreciaTion, amorTizaTion, and income TaxeS decreaSed $(1,366,000)

To $4,701,000 aS comPared To $6,067,000 in The BudgeT Below you will find an exPlanaTion of The accounTS wiTh SignificanT changeS VS. The BudgeT:

Controllable Income is defined as income fewer 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 Eight (8) Months Ended November 30, 2022, Total revenue was relatively inline with the Budget $55,803,000 as compared to $55,309,000 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 Eight (8) Months Ended November 30, 2022, Apartment revenue was relatively in-line with the Budget at $48,900,000 as compared to $48,608,000 in the Budget.

Commercial rental revenue –For the Eight (8) Months Ended November 30, 2022, Commercial rental revenue decreased slightly to $3,627,000 as compared to $3,704,000 in the budget.

Other Rental Revenue - For the Eight (8) Months Ended Novem- ber 30, 2022, Other Rental Revenue increased $161,000 to $1,297,000 as compared to $1,136,000 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.

Community Center revenue - For the Eight (8) Months Ended November 30, 2022, Community Center revenue decreased $(49,000) to $304,000 as compared to $353,000 in the Budget. This decrease is principally in lower than anticipated income in the room rental, after school camp and new gym membership applications. It should be noted that the Community Center has begun opening up operations and we anticipate that the Community center revenue will continue to increase over the remainder of FY 2023.

Other Income - For the Eight (8) Months Ended November 30, 2022, Other income increased $100,000 to $1,312,000 as compared to $1,212,000 in the Budget. This increase is principally due to insurance proceeds received in November 2022.

Expenses

Total expenses - For the Eight (8) Months Ended November 30, 2022, total expenses increased $1,860,000 to $51,101,000 as compared to $49,241,000 in the Budget. This increase is explained in the following expense categories:

Administrative - For the Eight (8) Months Ended November 30, 2022, Administrative expenses increased $392,000 to $3,984,000 as compared to $3,592,000 in the Budget. This increase is principally due to (1) the calculation & payment of the 6% Commercial Leasing fees for lease renewals and new leases,

(2) an increase in collection costs related to the courts opening up (3) an increase in administrative office expenses related to inflation impacting purchases of office expense and other related costs which was not Budgeted for.

Janitorial & Grounds costsFor the Eight (8) Months Ended November 30, 2022, Janitorial and Grounds expenses increased $235,000 to $5,252,000 as compared to $5,017,000 in the Budget. This increase is due to the following:

Janitorial Expenses – For the Eight (8) Months Ended November 30, 2022, Janitorial Expenses increased $127,000 to $3,396,000 as compared to $3,269,000 in the Budget. This slight increase is due to approximately $119,000 of expenses related to COVID.

Compactor expense – For the Eight (8) Months Ended November 30, 2022, Compactor and Compactor & Garbage expenses increased $86,000 to $366,000 as compared to $280,000 in the Budget. This increase is due to the new equipment (auger) savings projected in the Budget were not as significant as was anticipated.

For the Eight (8) Months Ended November 30, 2022, Snow expense increased $63,000 to $63,000 as compared to $0.0 in the Budget. The $63,000 is related to the purchase of salt in preparation for the winter months of FY 2023.

For the Eight (8) Months Ended November 30, 2022, landscape expense seasonal decreased $(96,000) to $0.0 as compared to $96,000 in the Budget. There was no expense for this account because the Maintenance Department has been unable to hire any seasonal Grounds men.

Maintenance and operating costs - For the Eight (8) Months Ended November 30, 2022, Maintenance and Operating costs increased $2,546,000 to $10,305,000 as compared to $7,759,000 in the Budget. This increase is due to the following:

Maintenance salaries – For the Eight (8) Months Ended November 30, 2022, Maintenance salaries decreased approximately $(92,000) to $2,604,000 as compared to $2,697,000 in the Budget. This decrease is principally due to the Budget reflecting a full staff and we were not at Full staff in May.

Repair Material & Supplies - For the Eight (8) Months Ended November 30, 2022, these accounts increased $242,000 to $1,284,000 as compared to $1,042,000 in the Budget. NOTE: In addition, the Budget is spread out evenly over the 12-month period and actual expenses vary based upon cooperators needs.

Contracted Services – For the Eight (8) Months Ended November 30, 2022, these accounts increased approximately $2,410,000 to $6,270,000 as compared to $3,860,000 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 a shortage of supplies (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 of the significant increase in Inflation.

Public Safety - For the Eight (8) Months Ended November 30, 2022, Public Safety costs decreased $(1,223,000) to $3,208,000 as compared to $4,431,000 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 actual with 1 vacant position. b. Sergeants – The Budget reflected 7 Sergeants at full staff and we have 5 actual with 2 vacant positions.

2. Guard Salaries – The Budgeted reflected 100 Guards at full staff and we have 68 actual Guards with 32 vacant positions.

Power Plant – For the Eight (8) Months Ended November 30, 2022, Total Power Plant expenses increased $655,000 to $11,967,000 as compared to $11,311,000 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 Eight (8) Months Ended November 30, 2022, Fuel expenses increased $213,000 to $4,875,000 as compared to $4,662,000 in the Budget. The reason for this increase is due to the following:

Fuel – Oil - For the Eight (8) Months Ended November 30, 2022, Fuel increased approximately $190,000 to $222,000 as compared to $32,000 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 Eight (8) Months Ended November 30, 2022, Fuel Heating and Gas decreased approximately $(86,000) to $4,399,000 as compared to $4,486,000 in the Budget. This decrease is due to 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 SC4AHigh 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. Annualized, this equates to a savings of 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 Eight (8) Months Ended November 30, 2022, Water and Sewer expenses increased approximately $821,000 to $4,040,000 as compared to $3,218,000 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.

3. Salaries & Other Power Plant Expenses - For the Eight (8) Months Ended November 30, 2022, Other – Salaries & other expenses decreased $(379,000) to $3,051,000 as compared to $3,430,000 in the Budget. This decrease is principally related to the (1) The Budget reflects a full staff (2) Approximately $(233,000) less overtime.

Insurance Expense - For the Eight (8) Months Ended November 30, 2022, Insurance expenses increased $557,000 to $5,154,000 as compared to $4,597,000 in the Budget. The increase is due to the Rochdale insurance policies renewal in November 2021. 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.

Real Estate Taxes (Shelter Rent)

- For the Eight (8) Months Ended November 30, 2022, Real estate tax (Shelter rent) expenses decreased $(201,000) to $2,998,000 as compared to $3,200,000 in the Budget. This decrease is related to the impact of the Article 78 settlement related to allocation of 16.5% of corporate expenses to be included as a deduction in the calculation.

Employee Benefits - For the Eight (8) Months Ended November 30, 2022, Employee Benefits expense decreased $(1,061,000) to $5,444,000 as compared to $6,506,000 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.

Looking forward

1. Paperless Solution – This project is currently being evaluated. We are considering investing in certain software products that will allow Rochdale Village Inc. to work with our vendors to have invoices electronically transmitted to Rochdale and uploaded to our software. This project was delayed due to COVID-19. We anticipate that this project will be brought to the Board in FY 2023

2. Computer Software solution – This project is currently being evaluated. We are also investigating certain software products to replace our current software. This will upgrade our current computer system to a windows-based system. We anticipate that this project will be brought to the Board in FY 2023.

3. Overall, Rochdale Village Inc.’s Controllable Income results For the Eight (8) Months Ended November 30, 2022, are trending below the FY 2023 Budget.

OTHER SIGNIFICANT INFOMATION

Bad Debt Expense (NON-CASH EXPENDITURE)

- For the Eight

(8) Months Ended November 30, 2022, Bad debt expense (a non-cash expense) increased $264,000 to $600,000 as compared to $336,000 in the Budget. This increase is due to an increase in the estimate of uncollectible Tenant and Commercial receivables due to the impact COVID on cooperators. The courts were closed for legal proceedings. In early 2022, the courts have opened and should have a favorable impact on collections from delinquent cooperators.

NOTE: It should be noted that this increase is NOT a write-off of receivables. The bad debt expense is an addition to the allowance for bad debt and the Company will continue to pursue collection of these receivables.

All Other Expenses were relatively in-line with the Budget.

1. PPP (Payroll Protection Program) – In April 2020, we received a $6,029,300 PPP loan that was to be used to keep all employees employed. As required by the regulations, the funds were used to pay employees’ payroll, benefits and utility expenses. This loan was recorded in a separate cash account and set up as a liability until the loan is forgiven. All required documents were submitted to Citibank for forgiveness and Citibank approved $6,005,000 of the loan for forgiveness. Subsequently, Citibank submitted the Loan Forgiveness application to the SBA for approval. The SBA has asked Citibank for additional financial information which was provided. We are still waiting to hear back from the SBA. In addition, in August 2022, there was additional information sent to the SBA and we anticipate a favorable response from the SBA. The SBA has denied the forgiveness of the PPP Loan and we are in the appeal process with the SBA & OHA.

2. Reserve Funds (Wells Fargo and HCR) - The reserve and escrow balance were $35,447,613 as of November 30, 2022.