Millrose Properties, Inc.: Form 10-Q for the period ended Sep 30, 2025

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with our accompanying unaudited condensed consolidated financial statements and the notes thereto included in “Part I, Item 1. Financial Statements” in this Form 10-Q and the audited combined financial statements of the Predecessor Millrose Business and the notes thereto included in the Form 10-K. Some of the information contained in this discussion and analysis constitutes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-Q, particularly under the section titled “Cautionary Statement Concerning Forward-Looking Statements.” The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements. See the sections titled “Part I, Item 1A. Risk Factors” in our Form 10-K and “Part II, Item 1A. Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” herein for a discussion of the risks, uncertainties, and assumptions associated with these statements.

As further described in Note 1. Description of Business to our unaudited condensed consolidated financial statements included in “Part I, Item 1. Financial Statements” of this Form 10-Q, we completed the Spin-Off from Lennar on February 7, 2025. The financial information presented herein (i) for the periods prior to the February 7, 2025 Spin-Off is that of the Predecessor Millrose Business and is derived from the consolidated financial statements and accounting records of Lennar, and (ii) for the periods after the February 7, 2025 Spin-Off is that of Millrose and its subsidiaries. Millrose was formed on March 19, 2024 and has operated as an independent company since the Spin-Off on February 7, 2025.

Our Business

Millrose is a corporation incorporated under the laws of the State of Maryland on March 19, 2024. The Company was formed in connection with the Spin-Off from Lennar to create an independent, publicly traded company that provides the HOPP’R to Lennar, Lennar Related Ventures and Other Customers. Millrose purchases and develops residential land and sells finished homesites back to homebuilders by way of option contracts with predetermined costs and takedown schedules. During the third quarter of 2025, we extended development to vertical construction on owned homesites with Taylor Morrison in support of the Taylor Morrison Yardly build-to-rent platform (as further described below). In certain instances, Millrose may continue to extend vertical construction on owned homesites, with any such funding similarly repaid via scheduled sales to homebuilders. Millrose intends its “first of its kind” public vehicle to be attractive to homebuilders seeking to implement an asset-light strategy. As fully developed homesites are taken down by the homebuilder, capital is recycled into future land acquisitions for homebuilders, providing each customer with uninterrupted access to capital. Through our subsidiaries, we hold finished homesites with homes under construction, finished homesites imminently ready for construction, Land Under Development, land ready for development and land not yet ready for development. We are externally managed and advised by Kennedy Lewis Land and Residential Advisors LLC (“KL” or the “Manager”), pursuant to the Management Agreement between Millrose and KL entered into February 7, 2025 (the “Management Agreement”).

The Spin-Off and Related Transactions

On February 7, 2025 (the “Distribution Date”), we completed our Spin-Off from Lennar through a distribution of approximately 80% of Millrose’s outstanding common stock to holders of Lennar common stock as of the close of business on January 21, 2025. In connection with the Spin-Off, we received a contribution from Lennar of approximately $5.5 billion in land assets, representing approximately 87,000 Homesites, and cash of approximately $1.0 billion, which included $585 million of cash deposit liabilities related to option contracts with Lennar.

On February 10, 2025, we completed the acquisition of land consisting of approximately 25,000 Homesites through the acquisition of 100% of the outstanding stock of RCH Holdings, Inc., a newly formed parent holding company of Rausch, for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks.

New Home Transaction

On May 12, 2025, the Company entered into a commitment with the New Home Company (“New Home”) for Millrose to provide land banking capital of up to $700 million to support New Home’s acquisition of Landsea Homes (“Landsea”). On June 25, 2025, New Home completed the acquisition of Landsea and the Company funded land banking capital of $494.5 million at closing for the acquisition of a portfolio of homesites on which the Company executed option agreements with New Home. As a result of the transaction, the Company acquired $522.8 million in land assets, consisting of 4,186 homesites, for $494.5 million in cash, which is net of deposits of $28.3 million related to the option contracts.

In connection with the New Home transaction, on June 24, 2025, the Company entered into a DDTL Credit Agreement (as defined below) that provided for a delayed draw term loan facility with commitments in the aggregate amount of $1.0 billion that was scheduled to mature June 23, 2026. Proceeds of the DDTL Credit Facility (as defined below) were used to fund the New Home acquisition of Landsea and any remaining proceeds were available for general corporate purposes (as further described below). On September 11, 2025, the DDTL Credit Agreement was terminated and all obligations thereunder were repaid in full. See Note 7. Debt Obligations in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further description.

Senior Notes

On August 7, 2025, the Company completed the offer and sale (the “August 2025 Offering”) of $1.25 billion aggregate principal amount of its 6.375% senior notes due 2030 (the “2030 Notes”). Net proceeds of the August 2025 Offering were used to repay principal amounts outstanding under the DDTL Credit Facility and Revolving Credit Facility (as defined below), and the remainder was used for general corporate purposes (as further described below).

On September 11, 2025, the Company completed the offer and sale (the “September 2025 Offering”) of $750 million aggregate principal amount of its 6.25% senior notes due 2032 (the “2032 Notes”). Net proceeds of the September 2025 Offering were used to repay the entire $500 million principal amount outstanding under the DDTL Credit Facility, and related expenses. The remainder was used for general corporate purposes (as further described below).

Invested Capital Activity as of September 30, 2025

Invested Capital is a non-GAAP financial measure that represents the balance on which monthly cash option fees are paid by counterparties. Invested Capital includes certain components of our unaudited condensed consolidated financial statements related to (i) homesite inventory, (ii) development loans receivable, and (ii) liabilities. Management uses Invested Capital as a measure of the capital deployed and believes that the figure is useful to investors because it serves as the basis for generating option fees and other related income. The most directly comparable GAAP financial measure is homesite inventory as presented in the Company’s condensed consolidated balance sheets. This non-GAAP measure is presented solely to permit investors to more fully understand how our management assesses underlying performance and is not, and should not be viewed as, a substitute for GAAP measures, and should be viewed in conjunction with our GAAP financial measures. The table below reconciles GAAP reported homesite inventory to Invested Capital as of September 30, 2025 and summarizes invested capital activity during the quarter:

(in thousands)

(1) Includes (a) Homesite inventory contributed by Lennar at Spin-Off and acquired from Rausch, less option earning deposits and other holdbacks, and (b) takedown and land acquisition and development funding activity during the first and second quarters of 2025.

(2) Reduction in investment balance during the third quarter of 2025 from homesite sales pursuant to option agreements associated with the applicable category shown; takedowns are net of deposit credits adjusted for non-option earning deposits.

(3) Includes land acquisitions during the third quarter 2025, net of option earning deposits.

(4) Based on average option rate and/or loan interest rate weighted by investment balance, assumes SOFR rate as of June 26, 2025.

(5) Calculated by taking Invested Capital balance at end of period multiplied by weighted average yield as of quarter end, adjusted for the number of days in the quarter.

During the three months ended September 30, 2025, we funded $858 million for land acquisition and development and received $797 million in net takedown proceeds under the Master Program Agreement at a weighted average yield of 8.5%. We funded $770 million for land acquisition and development and received $86 million in net takedown proceeds for Other Agreements during this period at a weighted average yield of 11.3%. On a total portfolio basis, the weighted average yield was 9.1% as of September 30, 2025.

Properties as of September 30, 2025

As of September 30, 2025, our Homesite assets consisted of 876 properties (also known as communities) in 30 states across the United States, totaling approximately 138,691 Homesites, with an approximate aggregate value of $8.4 billion of Homesite inventory. Of the Homesites owned as of September 30, 2025, we expect the total Takedown Prices of all Homesites to be approximately $15.3 billion, and the total estimated development costs of Homesites to be approximately $6.6 billion. The properties are geographically located in the United States.

As of September 30, 2025, our property assets are collectively located across 30 U.S. states. Approximately 50% of the property assets are concentrated in three states (California, Florida, Texas) in terms of number of Homesites and approximately 41% are located in two strong housing market states: Florida (where Lennar has historically had a large portion of its real estate activities and is continuing to grow its real estate activities) and Texas (where we believe the market has healthy underlying demographic and/or economic trends primarily driven by generally steadily growing population).

As of September 30, 2025, the below table shows the location, number of properties, number of underlying Homesites and expected total Takedown Prices of our properties across 30 U.S. states and as set forth in the relevant Project Addenda:

(1) Or prospective Homesites if fully entitled, as applicable.

(2) Excludes properties, Homesites, and Takedown Prices for investments associated with development loans.

(3) Totals may not foot due to rounding.

The below table is a summary of our pools of properties included in our property assets as of September 30, 2025:

(1) Number of Homesites excludes investments associated with development loans.

(2) Homesite inventory and development loans receivables, less deposits, deferred tax liability, interest receivable on development loans, and other holdbacks on post-spin acquired assets.

(3) Calculated as total amount of invested capital that is within a pool.

As of September 30, 2025, the Homesites within the Master Program Agreement were included in 61 separate pools, in accordance with the applicable Multiparty Cross Agreements. The portfolio pooled was 97%.

Components of Results of Operations

The following is a summary of the key components of our operations for the three and nine months ended September 30, 2025:

Revenues

Our primary source of revenue is option fee revenues for monthly option payments from Lennar and Other Customers in consideration for maintenance of a purchase option in respect to a property. We also derive development loan income from interest earned on the outstanding loan balance of development loans secured by residential property.

Costs

Operating Expenses: Our operating expenses after the Spin-Off include Management Fees paid to KL for management and advisory services. The Management Fee is calculated as 1.25% of Tangible Assets (as defined in the Management Agreement) (the “Management Fee”). All employees are employed by KL and their salaries are paid by KL; therefore, we do not record personnel-related expenses, including salaries, benefits, and share-based compensation for any employees. All cash compensation paid to our Board of Directors (the “Board”) and certain general and administrative expenses are covered by the Management Fee. The Management Fee does not cover offering expenses, costs incurred for services in connection with extraordinary litigation and mergers and acquisitions and other events outside of Millrose’s ordinary course of business, and, in some circumstances, costs associated with the ownership and maintenance of land. Any such expenses that are not covered by the Management Fee are paid for by Millrose and are recorded as general and administrative expenses or other expenses, as appropriate under GAAP. Certain of our option agreements provide (and new option agreements in the future may provide) for reimbursement by the counterparties of our transaction and/or asset management expenses, including third-party legal, diligence and servicing costs, and may include certain amounts paid by such counterparties directly to affiliates of the Manager in connection with related services provided to by such affiliates to the applicable counterparties. Our operating expenses include stock-based compensation for restricted stock units (“RSUs”) granted to each member of the Board during the second quarter 2025. The Company records the RSU award costs on a straight-line basis over the one-year vesting period as stock-based compensation in operating expenses. Our operating expenses also include provision for credit losses on its development loan receivables. While the Company has not experienced historical losses on its development loans and continues to assess the risk of loss to be remote, the Company records an estimate of potential future losses, in accordance with ASC 326, Financial Instruments - Credit Losses.

Operating expenses prior to the Spin-Off include salaries, general and administrative expenses. These expenses have been allocated from Lennar based on a reasonable proportional cost allocation method primarily based directly on headcount, usage, or other allocation methods depending on the nature of the services.

Other Income and Expenses: We record interest income from our cash as other income as it is not part of the primary activities of the business. Other expenses also include (i) interest expense related to our Revolving Credit Facility and our DDTL Credit Facility (collectively, the “Credit Agreements”), and our 2030 Notes and 2032 Notes (collectively, the “Senior Notes”), and (ii) other expenses related to rating agency fees, legal fees, audit fees, and bank fees.

Results of Operations

The following discussion describes the results of operations for the three and nine months ended September 30, 2025 versus the three and nine months ended September 30, 2024. The financial data includes the combined results of operations for the Predecessor Millrose Business prior to the Spin-Off and the Millrose business after the Spin-Off. The results of operations include activity related to the acquired Rausch land assets from the February 10, 2025 acquisition date through September 30, 2025. We have a single operating and reportable segment in accordance with GAAP and our operations are conducted in the United States.

(in thousands)

Three Months Ended September 30, 2025 Versus Three Months Ended September 30, 2024

Overview of Net Income (Loss)

Our net income was $105.1 million for the three months ended September 30, 2025, compared to a net loss of $63.7 million for the three months ended September 30, 2024. The increase in net income for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 is due to (i) revenues earned after the Spin-Off and (ii) lower actual operating expenses after the Spin-Off versus an allocation prior to the Spin-Off, partially offset by (a) higher net interest expense, (b) higher tax provision, and (c) higher other expenses.

Option Fee Revenues

Option fee revenues for the three months ended September 30, 2025 was $170.3 million, compared to $0 for the three months ended September 30, 2024. For the three months ended September 30, 2024, the Predecessor Millrose Business did not have option fee revenues, as all finished Homesites were transferred to the Predecessor Millrose Business’s parent company, who sold those homes to Lennar customers.

Development Loan Income

Development loan income for the three months ended September 30, 2025 was $8.9 million, compared to $0 for the three months ended September 30, 2024. For the three months ended September 30, 2024, the Predecessor Millrose Business did not have development loan income.

Management Fee Expense

Management fee expense for the three months ended September 30, 2025 was $25.9 million, compared to $0 for the three months ended September 30, 2024.

Stock-based Compensation Expense

Stock-based compensation expense related to RSUs granted to the Board for the three months ended September 30, 2025 was $0.2 million. Sales, general, and administrative expenses for the Predecessor Millrose Business include $1.3 million for the three months ended September 30, 2025. Stock-based compensation was allocated to the Predecessor Millrose Business on a specific identification basis or using a proportional cost allocation method, as applicable, as disclosed in the Form 10-K.

Provision for Credit Loss Expense

Provision for credit loss expense related to development loans was $0.3 million for the three months ended September 30, 2025. For the three months ended September 30, 2024, the Predecessor Millrose Business did not have a provision for credit loss expense.

Sales, General and Administrative Expenses from pre-Spin-Off Periods

Sales, general and administrative expenses from pre-Spin-Off periods were $63.7 million for the three months ended September 30, 2024. There were no sales, general and administrative expenses recorded during the third quarter of 2025.

Other Income and Expense

Other income and expense was a net expense of $41.9 million for the three months ended September 30, 2025, compared to $0 for the three months ended September 30, 2024. Other income and expense for the three months ended September 30, 2025 includes (i) interest expense for the Credit Agreements and Senior Notes of $43.7 million, and (ii) other expenses of $0.6 million, which was partially offset by interest income of $2.4 million related to cash balances.

Net Income (Loss) Before Income Tax Expense

Net income from operations before income tax was $110.9 million for the three months ended September 30, 2025, compared to a net operating loss of $63.7 million for the three months ended September 30, 2024. The increase in operating income is due to (i) revenues earned after the Spin-Off and (ii) lower operating expenses due to lower management service fees after the Spin-Off compared to sales, general, and administrative expenses allocated prior to the Spin-Off, partially offset by (a) higher net interest expense for the Credit Agreements and Senior Notes, (b) higher tax provision, and (c) higher other expenses.

Income Tax Expense

The provision for income taxes for the three months ended September 30, 2025 was $5.9 million, compared to $0 for the three months ended September 30, 2024. The third quarter 2025 tax provision resulted in an overall effective tax rate of 24.8%. There was no income tax expense for the Predecessor Millrose Business for the three months ended September 30, 2024 due to offsetting changes in the valuation allowance against its deferred taxes that reduced income tax and effective tax rate to zero. See Note 9. Income Taxes to the unaudited condensed consolidated financial statements for more information.

Nine Months Ended September 30, 2025 Versus Nine Months Ended September 30, 2024

Overview of Net Income (Loss)

Our net income was $257.6 million for the nine months ended September 30, 2025, compared to a net loss of $180.4 million for the nine months ended September 30, 2024. Our net income for the nine months ended September 30, 2025 includes post Spin-Off income of $282.6 million, partially offset by pre-spin net loss of $25.0 million related to sales, general, and administrative expenses attributable to the Predecessor Millrose Business. The increase in net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is due to (i) revenues earned after the Spin-Off and (ii) lower actual operating expenses after the Spin-Off versus an allocation prior to the Spin-Off, partially offset by (a) higher net interest expense, and (b) higher tax provision, and (c) higher other expenses.

Option Fee Revenues

Option fee revenues for the nine months ended September 30, 2025 was $391.5 million, compared to $0 for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, the Predecessor Millrose Business did not have option fee revenues, as all finished Homesites were transferred to the Predecessor Millrose Business’s parent company, who sold those homes to Lennar customers.

Development Loan Income

Development loan income for the nine months ended September 30, 2025 was $19.5 million, compared to $0 for the nine months ended September 30, 2024. For the nine months ended September 30, 2024, the Predecessor Millrose Business did not have development loan income.

Management Fee Expense

Management fee expense for the nine months ended September 30, 2025 was $60.0 million, compared to $0 for the nine months ended September 30, 2024. Management fee expense represents the costs for KL management services after the Spin-Off and incurred through September 30, 2025.

Stock-based Compensation Expense

Stock-based compensation expense related to RSUs granted to the Board for the nine months ended September 30, 2025 was $0.4 million. Sales, general, and administrative expenses for the Predecessor Millrose Business include $10.2 million of stock-based compensation expenses for the nine months ended September 30, 2025. Stock-based compensation was allocated to the Predecessor Millrose Business on a specific identification basis or using a proportional cost allocation method, as applicable, as disclosed in the Form 10-K.

Provision for Credit Loss Expense

Provision for credit loss expense related to development loans was $0.3 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2024, the Predecessor Millrose Business did not have a provision for credit loss expense.

Sales, General and Administrative Expenses from Pre-Spin Periods

Sales, general and administrative expenses from Pre-Spin periods were $25.0 million for the nine months ended September 30, 2025, compared to $180.4 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, the expenses were allocated by Lennar for the periods January 1, 2025 to the Spin-Off, which is the driver for the decrease as compared the nine months ended September 30 2024 which included sales, general, and administrative expenses for the first three quarters of 2024. There were no sales, general and administrative expenses recorded after the Spin-Off.

Other Income and Expense

Other income and expense was a net expense of $52.7 million for the nine months ended September 30, 2025, compared to $0 for the nine months ended September 30, 2024. Other income and expense for the three months ended September 30, 2025 includes (i) interest expense for the Credit Agreements and Senior Notes of $56.6 million, and (ii) other expenses of $1.5 million, which was partially offset by interest income of $5.4 million related to cash balances.

Net Income (Loss) Before Income Tax Expense

Net income from operations before income tax was $272.6 million for the nine months ended September 30, 2025, compared to a net operating loss of $180.4 million for the nine months ended September 30, 2024. Our net income from operations before taxes includes post Spin-Off net income before taxes of $297.6 million, partially offset by pre-spin net loss of $25.0 million related to sales, general, and administrative expenses attributable to the Predecessor Millrose Business. The increase in operating income is due to (i) revenues earned after the Spin-Off and (ii) lower operating expenses which are due to lower management service fees after the Spin-Off compared to sales, general, and administrative expenses allocated prior to the Spin-Off, partially offset by (a) higher net interest expense for the Credit Agreements and Senior Notes, (b) higher tax provision, and (c) higher other expenses.

Income Tax Expense

The provision for income taxes for the nine months ended September 30, 2025 was $15.0 million, compared to $0 for the nine months ended September 30, 2024. The tax provision for the nine months ended September 30, 2025 resulted in an overall effective tax rate of 24.8%. There was no income tax expense for the Predecessor Millrose Business for the nine months ended September 30, 2024 due to offsetting changes in the valuation allowance against its deferred taxes that reduced income tax and effective tax rate to zero. See Note 9. Income Taxes to the unaudited condensed consolidated financial statements for more information.

Adjusted Funds from Operations

Our reported results are presented in accordance with GAAP. We also disclose Adjusted Funds from Operations (“AFFO”), which is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that AFFO is useful to investors because it is a widely accepted industry measure used by analysts and investors to compare the operating performance of REITs.

We calculate AFFO by starting with Millrose’s definition of funds from operations (“FFO”), which is the net income (computed in accordance with GAAP), excluding gains (or losses) from the sales of property, plus real estate depreciation. During this period, there are no applicable adjustments to net income of the Company to calculate FFO. We then calculate AFFO by adjusting net income to eliminate the impact of non-recurring items that are not reflective of operations and certain non-cash items that reduce or increase net income (loss) in accordance with GAAP, and also adjusted for income tax expense

(other than income tax expenses of our TRS) that will not be incurred following our election and qualifications to be subject to tax as a REIT for U.S. federal income tax purposes. As shown in the table below, certain non-recurring and non-cash transactions added back for this fiscal quarter include non-cash components of compensation expense, amortization of financing and issuance costs for our Credit Agreements and senior notes, provision for credit loss expense, and non-recurring agency expenses related to the Spin-Off.

Other REITS may not define AFFO in the same manner as we do and therefore our calculation of AFFO may not be comparable to such other REITs. You should also not consider AFFO to be an alternative to net income or as a reliable measure of our operating performance.

The table below is a reconciliation of GAAP net income to AFFO and GAAP earnings per share to AFFO earnings per share for the three months ended September 30, 2025.

(in thousands)

33

(1) Reflected in interest expense in the unaudited condensed consolidated statements of operations. See Note 7. Debt Obligations in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q. Includes $11.9 million accelerated amortization for the DDTL Credit Agreement termination.

(2) Reflected in other expenses in the unaudited condensed consolidated statements of operations. See Note 2. Basis of Presentation and Significant Accounting Policies, Other Income (Expenses) in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

(3) RSUs granted to each member of the Board under 2024 Incentive Plan. See Note 11. Stock-Based Compensation in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

(4) Provision for credit losses for development loan receivables. See Note 2. Basis of Presentation and Significant Accounting Policies, Development Loan Receivables in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Liquidity and Capital Resources

As of September 30, 2025, we had $242.6 million cash on hand and approximately $1.335 billion capacity under our Revolving Credit Facility. Our primary sources of liquidity are cash flows from operations and debt financing under our Revolving Credit Facility of $1.335 billion and our Senior Notes of $1.966 billion, net of issuance costs. We believe that our existing cash on hand, cash generated from operations and available capacity under the Revolving Credit Facility will be sufficient to meet our liquidity needs in the short and long term. Our ability to satisfy our liquidity requirements depends on our future operating performance, which is affected by prevailing economic conditions, market conditions in the real estate industry and other factors, many of which are beyond our control.

Cash Flows

Our cash flows for the nine months ended September 30, 2025 and 2024 are presented below. The financial data includes the results of cash flows for the Predecessor Millrose Business prior to the Spin-Off, which is derived from the financial statements of Lennar; and the Millrose business after the Spin-Off, which is derived from the accounting records of Millrose.

(in thousands)

Cash Flows from Operating Activities

For the nine months ended September 30, 2025, net cash from operating activities was $253.5 million. Our cash sources were $371.2 million consisting of option fee income of $333.1 million, development loan interest paid-in-kind of $7.6 million, interest income of $5.4 million, other deposits of $0.1 million, and pre-spin adjustments of $25.0 million. Our cash used was $117.7 million and consisted of our Management Fee payment to KL of $60.0 million, interest payments on our Revolving Credit Facility and DDTL Credit Facility of $22.9 million, tax payments of $8.5 million, agency fee payments of $1.1 million, legal fee payments of $0.2 million, and Predecessor Millrose Business pre-spin-off net loss of $25.0 million.

For the nine months ended September 30, 2024, net cash from operating activities was $260.2 million, primarily consisting of inventory takedowns of $428.2 million, cash from operating activities of $2.2 million, and stock-based compensation of $10.2 million, which was partially offset by net operating loss of $180.4 million. All cash from the operating activities for the nine months ended September 30, 2024 was allocated to the Predecessor Millrose Business by Lennar and not generated by the Predecessor Millrose Business itself.

Cash Flows from Investing Activities

For the nine months ended September 30, 2025, net cash used in investing activities was $2.108 billion. Our cash used was $4.926 billion, consisting of payments to acquire Rausch land assets of $858.9 million, investments in Homesite inventory of $3.729 billion, and investments in development loans of $338.4 million. Our cash sources were $2.818 billion, consisting of option deposit payments from Lennar at Spin-Off of $584.8 million, takedowns of Homesite inventories of $2.224 billion, and paydowns of development loans of $9.5 million.

Cash Flows from Financing Activities

For the nine months ended September 30, 2025, net cash from financing activities was $2.097 billion. Our cash sources were $4.990 billion, consisting of cash contributed by Lennar at Spin-Off of $415.2 million, Revolving Credit Facility and DDTL Credit Facility proceeds of $2.575 billion, and Senior Notes proceeds of $2.0 billion. Our cash used was $2.893 billion, consisting of Spin-Off costs of $77.9 million, financing and issuance cost payments for our debt obligations of $56.5 million, repayment of our Revolving Credit Facility and DDTL Credit Facility of $2.575 billion, dividends paid to shareholders of $177.6 million, and payment on seller notes of $6.0 million.

For the nine months ended September 30, 2024, net cash used in financing activities was $260.2 million, consisting of principal payment on debt of $14.2 million and transfers to Lennar of $246.0 million. All cash from the financing activities for the nine months ended September 30, 2024 was allocated to the Predecessor Millrose Business by Lennar and not generated by the Predecessor Millrose Business itself.

Other Cash Flows Considerations

During the second quarter of 2025, Lennar updated its methodology for purchases from land bankers in order to reduce the time between Homesite purchase and homebuyer delivery. In connection with this update, Lennar and Millrose agreed to amend certain Homesite takedown schedules included in property-specific addendums to the Master Option Agreement. We expect these amendments will result in an average three-month increase in the option term as compared to the original takedown schedules, with no impact on monthly option payment terms or any other terms of the Master Option Agreement. These amendments did not have a material impact on results of operations in the third quarter 2025 and Management does not expect these amendments to have a material impact in future periods.

Revolving Credit Facility

On the Distribution Date, we entered into a credit agreement (the “Revolving Credit Agreement”) with a consortium of lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent for the lenders (the “Revolver Agent”). The Revolving Credit Agreement provides for a revolving credit facility (the “Revolving Credit Facility”) with commitments in an aggregate amount of $1.335 billion. There were no outstanding borrowings under the Revolving Credit Facility as of September 30, 2025. Availability under the Revolving Credit Agreement is subject to a borrowing base updated quarterly (or, at our option, monthly), which is calculated by reference to the value of certain real property assets, with advance rates that vary by asset category, and unrestricted cash and cash equivalents, with adjustments as specified in the Revolving Credit Agreement. The Revolving Credit Facility may be used by us to borrow loans or obtain standby letters of credit.

Loans under the Revolving Credit Agreement bear interest at the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement) plus an applicable margin at the per annum rate of (i) 2.00%, if the Leverage Ratio (as defined in the Revolving Credit Agreement) is less than or equal to 0.30 to 1.00, (ii) 2.25% if Leverage Ratio is greater than 0.30 to 1.00 and less than or equal to 0.40 to 1.00, and (iii) 2.50% if the Leverage Ratio is greater than 0.40 to 1.00. At our option, loans may instead bear interest at the Alternate Base Rate (as defined in the Revolving Credit Agreement) plus an applicable margin at the per annum rate of 1.00%, 1.25% or 1.50%, depending upon the Leverage Ratio.

Obligations under the Revolving Credit Agreement are secured by pledges by us of (i) the Promissory Notes (as defined below) and (ii) the equity interests of Millrose Holdings. In addition, the Revolving Credit Agreement requires us to pledge (i) certain future promissory notes similar to the Promissory Notes that Millrose may enter into with other subsidiaries and (ii) the equity interests of other subsidiaries whose equity interests are not pledged for the benefit of the Promissory Notes or any other similar promissory note or notes. Pursuant to an intercreditor agreement (the “ICA”), dated as of June 24, 2025, by and among the DDTL Administrative Agent (as defined below) and the Revolver Agent, the DDTL Administrative Agent and the Revolver Agent agreed that certain liens on Shared Collateral (as defined in the ICA) securing the DDTL Credit Agreement (as defined below) and the Revolving Credit Agreement were of equal priority, and certain distributions made in respect of Shared Collateral were shared on a ratable basis. The ICA was terminated in connection with the prepayment of all outstanding obligations under the DDTL Credit Agreement.

On August 1, 2025, Millrose Properties SPE LLC, a subsidiary of the Company (“Millrose Properties SPE”), was joined as a guarantor to the Revolving Credit Agreement. As of September 30, 2025, there were no other guarantors under the Revolving Credit Agreement. The Company may elect to join certain of our subsidiaries to the Revolving Credit Agreement as guarantors from time to time, and in certain circumstances, the Revolving Credit Agreement requires the Company to cause certain other subsidiaries that are not Taxable REIT Subsidiaries (as defined in the Revolving Credit Agreement) to become guarantors.

The Revolving Credit Agreement includes affirmative and negative covenants applicable to us and our subsidiaries, including limitations regarding liens, investments, asset sales, transactions with affiliates, restrictive agreements, mergers and other fundamental changes, permitted lines of business, financial contracts, and designation of unrestricted subsidiaries. The Revolving Credit Agreement contains financial covenants, tested quarterly, consisting of a maximum Leverage Ratio, a minimum interest coverage ratio, and a minimum tangible net worth. The Revolving Credit Agreement also requires us to be in compliance with all REIT requirements. As of September 30, 2025, we were in compliance with all covenants under the Revolving Credit Agreement.

The Revolving Credit Agreement contains events of default, including if KL shall cease to be our manager and a replacement manager reasonably acceptable to the required lenders is not appointed within 90 days.

The Revolving Credit Agreement is scheduled to mature on February 7, 2028 (the “ Revolving Maturity Date”). Principal amounts and other obligations outstanding under the Revolving Credit Facility are due in full on the Revolving Maturity Date.

Interest on each drawdown is due quarterly for loans bearing interest at the Alternate Base Rate and on the last day of the applicable interest payment date for loans bearing interest at the Adjusted Term SOFR Rate.

See Note 7. Debt Obligations to our unaudited condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q for further description.

Delayed Draw Term Loan Facility

On June 24, 2025, the Company entered into a credit agreement (the “DDTL Credit Agreement”) with the lenders party thereto and Goldman Sachs Bank USA as administrative agent for the lenders (in such capacity, the “DDTL Administrative Agent”). The DDTL Credit Agreement provided for a delayed draw term loan facility (the “DDTL Credit Facility”) with commitments in an aggregate amount of $1.0 billion. Proceeds of the Acquisition Tranche Loans (as defined in the DDTL Credit Agreement) were used to finance the previously announced acquisition of a portfolio of homesites on which the Company executed option agreements with New Home to support New Home’s acquisition of Landsea, which closed on June 25, 2025 (as further defined in the DDTL Credit Agreement, the “Specified Acquisition”), and the proceeds of any General Tranche Loans (as defined in the DDTL Credit Agreement) were used for general corporate purposes (including, without limitation, to pay outstanding obligations under the Revolving Credit Facility). On September 11, 2025, the receipt by the Company of the net cash proceeds from the September 2025 Offering triggered a mandatory prepayment under the DDTL Credit Agreement. The Company used a portion of such net cash proceeds to repay in full all outstanding obligations under the DDTL Credit Agreement. In connection therewith, on September 11, 2025, the Company terminated the DDTL Credit Agreement and the other loan documents, and all of the security interests in the assets of the Company securing the obligations thereunder were released.

Loans under the DDTL Credit Agreement bore interest at the Adjusted Term SOFR Rate (as defined in the DDTL Credit Agreement, the “DDTL Adjusted Term SOFR Rate”) plus an applicable margin at the per annum rate of: (i) from (and including) the initial draw date through (and including) 89 days after the initial draw date (a) 2.00% if the Leverage Ratio (as defined in the DDTL Credit Agreement, the “DDTL Leverage Ratio”) was less than or equal to 0.30 to 1.00, (b) 2.25% if the DDTL Leverage Ratio was greater than 0.30 to 1.00 and less than or equal to 0.40 to 1.00, and (c) 2.50% if the DDTL Leverage Ratio was greater than 0.40 to 1.00; (ii) from (and including) 90 days after the initial draw date through (and including) 179 days after the initial draw date (a) 2.25% if the DDTL Leverage Ratio was less than or equal to 0.30 to 1.00, (b) 2.50% if the DDTL Leverage Ratio was greater than 0.30 to 1.00 and less than or equal to 0.40 to 1.00, and (c) 2.75% if the DDTL Leverage Ratio was greater than 0.40 to 1.00; (iii) from (and including) 180 days after the initial draw date through (and including) 269 days after the initial draw date (a) 2.50% if the DDTL Leverage Ratio was less than or equal to 0.30 to 1.00, (b) 2.75% if the DDTL Leverage Ratio was greater than 0.30 to 1.00 and less than or equal to 0.40 to 1.00, and (c) 3.00% if the DDTL Leverage Ratio was greater than 0.40 to 1.00; and (iv) from (and including) 270 days after the initial draw date and thereafter (a) 2.75% if the DDTL Leverage Ratio was less than or equal to 0.30 to 1.00, (b) 3.00% if the DDTL Leverage Ratio was greater than 0.30 to 1.00 and less than or equal to 0.40 to 1.00, and (c) 3.25% if the DDTL Leverage Ratio was greater than 0.40 to 1.00. At the Company’s option, loans may have instead born interest at the Alternate Base Rate (as defined in the DDTL Credit Agreement, the “DDTL Alternate Base Rate”) plus an applicable margin at the per annum rate of 1.00% lower than the applicable margin for DDTL Adjusted Term SOFR Rate loans set forth above, in each case based upon the DDTL Leverage Ratio and the time after initial draw.

Obligations under the DDTL Credit Agreement were secured by pledges by the Company of (i) the Promissory Notes, and (ii) the equity interests of Millrose Holdings. In addition, the DDTL Credit Agreement required the Company to pledge (i) certain future promissory notes similar to the Promissory Notes that Millrose may enter into with other subsidiaries and (ii) the equity interests of any other subsidiaries whose equity interests are not pledged for the benefit of the Promissory Notes or any other similar promissory note or notes. Pursuant to the ICA, the DDTL Administrative Agent and the Revolver Agent agreed that certain liens on Shared Collateral (as defined in the ICA) securing the DDTL Credit Agreement and the Revolving Credit Agreement were of equal priority, and certain distributions made in respect of Shared Collateral were shared on a ratable basis. The ICA was terminated in connection with the prepayment of all outstanding obligations under the DDTL Credit Agreement.

The DDTL Credit Agreement included mandatory prepayments applicable to the Company and its subsidiaries in the event net cash proceeds are received from certain debt issuances, certain issuances of capital stock, and certain non-ordinary course dispositions of assets.

The DDTL Credit Agreement included affirmative and negative covenants applicable to the Company and its subsidiaries, including limitations regarding liens, investments, asset sales, transactions with affiliates, restrictive agreements, mergers and other fundamental changes, permitted lines of business, financial contracts, and designation of unrestricted subsidiaries. The DDTL Credit Agreement contained financial covenants, tested quarterly, consisting of a maximum DDTL Leverage Ratio, a minimum interest coverage ratio, and a minimum tangible net worth. The DDTL Credit Agreement also required the Company to maintain its status as a REIT.

The DDTL Credit Agreement contained events of default, including if KL ceased to be the Company’s manager and a replacement manager reasonably acceptable to the Required Lenders (as defined in the DDTL Credit Agreement) was not appointed within 90 days.

The DDTL Credit Agreement maturity date was June 23, 2026 (the “DDTL Maturity Date”). Principal amounts and other obligations outstanding under the DDTL Credit Agreement were due in full on the DDTL Maturity Date. Interest on each drawdown was due quarterly for loans bearing interest at the Alternate Base Rate and on the last day of the applicable interest payment date for loans bearing interest at the Adjusted Term SOFR Rate.

On August 1, 2025, the Company entered into a first amendment (the “First Amendment to DDTL”) to the DDTL Credit Agreement to, among other things, allow the Company to partially exempt in certain circumstances one incurrence of debt or issuance of equity securities (the “Designated Issuance”) from the DDTL Credit Agreement provision that otherwise required a mandatory prepayment of the loans borrowed under the DDTL Credit Agreement (the “DDTL Loans”) using 100% of the net cash proceeds from each incurrence of debt or issuance of equity securities (subject to certain limited exceptions specified in the DDTL Credit Agreement). In the case of the Designated Issuance, the Company was instead required to prepay the

DDTL Loans in an amount equal to the lesser of (x) 100% of such net cash proceeds and (y) an amount sufficient such that no more than $500.0 million in aggregate principal amount of DDTL Loans remain outstanding immediately after such prepayment. The First Amendment to DDTL also amended the DDTL Credit Agreement to add a funding fee in an amount equal to 0.250% of the aggregate principal amount of the DDTL Loans outstanding on the date that is 270 days after the initial draw date under the DDTL Credit Agreement, which initial draw date was June 24, 2025.

On August 1, 2025, Millrose Properties SPE was joined as a guarantor to the DDTL Credit Agreement.

On August 7, 2025, the Company completed the August 2025 Offering which in accordance with the First Amendment to DDTL triggered a mandatory prepayment of $500 million of principal amount owed under the DDTL Credit Agreement. On September 11, 2025, the Company completed the September 2025 Offering (as described below) which in accordance with the First Amendment to DDTL triggered a mandatory prepayment of $500 million of the remaining principal amount owed under the DDTL Credit Agreement. As a result of the September 2025 Offering, the full outstanding principal amount of the loans outstanding under the DDTL Credit Agreement and all other outstanding obligations thereunder were repaid September 11, 2025. In connection therewith, the Company terminated the DDTL Credit Facility, along with all of the security interests in the assets of the Company securing the obligations. The Company derecognized the remaining debt obligation and recorded the remaining unamortized issuance costs of $11.9 million as interest expense for the three months ended September 30, 2025.

See Note 7. Debt Obligations to our unaudited condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q for further description.

August 2025 Offering of Senior Notes

On August 7, 2025, the Company completed the offer and sale of its $1.25 billion aggregate principal amount of its 6.375% Senior Notes due 2030. The 2030 Notes were issued at par value. The Company received net proceeds of approximately $1.23 billion, after deducting the initial purchasers’ discounts and commissions and offering expenses. Proceeds of the August 2025 Offering were used (i) to repay $500 million principal amount of outstanding borrowings under the DDTL Credit Agreement, (ii) to repay $450 million principal amount of outstanding borrowings under the Revolving Credit Agreement, and (iii) for general corporate purposes.

The 2030 Notes were issued and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The 2030 Notes have not been registered under the Securities Act, or any state securities laws, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The 2030 Notes were issued pursuant to an indenture, dated as of August 7, 2025 (the “2030 Notes Indenture”), among the Company, the subsidiary guarantors from time to time party thereto and Citibank, N.A., as trustee. The 2030 Notes are fully and unconditionally guaranteed on a senior unsecured basis by Millrose Properties SPE LLC.

The 2030 Notes and the guarantee are the Company’s and the guarantor’s general senior unsecured obligations and are (i) pari passu in right of payment with all of the Company’s and the guarantor’s existing and future senior indebtedness, including the indebtedness under the Revolving Credit Agreement and the 2032 Notes, (ii) senior in right of payment to any future subordinated indebtedness of the Company and the guarantor, (iii) effectively subordinated to all of the Company’s and the guarantor’s existing and future secured indebtedness, including the indebtedness under the Revolving Credit Agreement, to the extent of the value of the assets securing such indebtedness, and (iv) structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries that do not guarantee the 2030 Notes.

The 2030 Notes will mature on August 1, 2030. Pursuant to the 2030 Notes Indenture, interest on the 2030 Notes accrues at a rate of 6.375% per annum and is payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2026.

The Company has the option to redeem some or all of the 2030 Notes on or after August 1, 2027 at the redemption prices specified in the 2030 Notes Indenture. Prior to August 1, 2027, the Company may redeem some or all of the 2030 Notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest on the 2030 Notes being redeemed plus a “make-whole” premium. In addition, prior to August 1, 2027, the Company may redeem up to 40% of the 2030 Notes with cash in an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 106.375% of the principal amount being redeemed plus accrued and unpaid interest on the 2030 Notes being redeemed.

The 2030 Notes Indenture includes certain restrictive covenants that limits the Company’s and its restricted subsidiaries’ ability to, among other things: (i) create certain liens, (ii) engage in certain sale and leaseback transactions, and (iii) effect certain mergers or consolidations, or sell all or substantially all of its assets. These covenants are subject to a number of important qualifications and exceptions as set forth in the 2030 Notes Indenture. Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the 2030 Notes Indenture), the Company must offer to repurchase all of the 2030 Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The 2030 Notes Indenture also provides for customary events of default. As of September 30, 2025, the Company was in compliance with all covenants under the 2030 Notes Indenture and there were no events of default.

See Note 7. Debt Obligations to our unaudited condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q for further description.

September 2025 Offering of Senior Notes

On September 11, 2025, the Company completed the offer and sale of $750 million aggregate principal amount of its 6.250% senior notes due 2032. The 2032 Notes were issued at par value. The Company received net proceeds of approximately $737.5 million, after deducting initial purchaser discounts and commissions and offering expenses. Net proceeds of the September 2025 Offering were used to repay the entire $500 million principal amount of outstanding borrowings under the DDTL Credit Facility, and related expenses, and for general corporate purposes.

The 2032 Notes and the related guarantee were issued and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain non-U.S. persons in transactions outside the U.S. in reliance on Regulation S under the Securities Act. The 2032 Notes and the related guarantee have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdiction, and the 2032 Notes may not be offered or sold in the United States without registration or applicable exemption from the registration requirements of the Securities Act and applicable state securities or blue sky laws and foreign securities laws. The 2032 Notes were issued pursuant to an indenture, dated as of September 11, 2025 (the “2032 Notes Indenture” and, together with the 2030 Notes Indenture, the “Indentures”), among the Company, the subsidiary guarantors from time to time party thereto and Citibank, N.A., as trustee. The 2032 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by the Company’s existing and future restricted subsidiaries that guarantee, or become a borrower or an obligor under, the Revolving Credit Agreement, the 2030 Notes, or certain other indebtedness. As of September 30, 2025, the 2032 Notes are fully and unconditionally guaranteed by Millrose Properties SPE.

The 2032 Notes and the guarantee are the Company’s and the guarantor’s general senior unsecured obligations and are (i) pari passu in right of payment with all of the Company’s and the guarantor’s existing and future senior indebtedness, including the indebtedness under the Revolving Credit Agreement and the 2030 Notes, (ii) senior in right of payment to any future subordinated indebtedness of the Company and the guarantors, (iii) effectively subordinated to all of the Company’s and the guarantor’s existing and future secured indebtedness, including the indebtedness under the Revolving Credit Agreement, to the extent of the value of the assets securing such indebtedness, and (iv) structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries that do not guarantee the 2032 Notes.

The 2032 Notes will mature on September 15, 2032. Pursuant to the 2032 Notes Indenture, interest on the 2032 Notes accrues at a rate of 6.250% per annum and is paid payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2026.

The Company has the option to redeem some or all of the 2032 Notes on or after September 15, 2028 at the redemption prices specified in the 2032 Notes Indenture. Prior to September 15, 2028, the Company may redeem some or all of the 2032 Notes at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest on the notes being redeemed plus a “make-whole” premium. In addition, prior to September 15, 2028, the Company may redeem up to 40% of the 2032 Notes with cash not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 106.250% of the being redeemed plus accrued and unpaid interest on the 2032 Notes being redeemed.

The 2032 Notes Indenture includes certain restrictive covenants that limits the Company’s and its restricted subsidiaries’ ability to, among other things: (i) create certain liens (ii) engage in certain sale and leaseback transactions, and (iii) effect certain mergers or consolidations, or sell all or substantially all of its assets. These covenants are subject to important qualifications and exceptions as set forth in the 2032 Notes Indenture. Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the 2032 Notes Indenture), the Company must offer to repurchase all of the 2032 Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The 2032 Notes Indenture also provides for customary events of default. As of September 30, 2025, the Company was in compliance with all covenants under the 2032 Notes Indenture and there were no events of default.

See Note 7. Debt Obligations to our unaudited condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q for further description.

Predecessor Millrose Business Debt

The Predecessor Millrose Business’s debt as of September 30, 2024 consisted of promissory notes for the acquisition of land and community development district bonds. There was no outstanding Predecessor Millrose Business debt recorded on the Company’s unaudited condensed consolidated financial statements as of September 30, 2025.

Debt to Equity Ratio Limit Right

In addition to the Credit Agreements, Millrose may seek to pursue other debt and expects to have access to a certain amount of debt and equity capital at least a portion of which is intended to be available for use in financing transactions with new customers. However, there is no guarantee that such sources of additional capital will be obtained on acceptable terms or at all or will be sufficient to cover all of Millrose’s business growth initiatives. As such, Millrose may also seek additional third-party financing to satisfy any additional capital needs or raise capital through equity and debt issuances into the market. Additionally, any third-party financing arrangements Millrose enters into may not cause its debt to equity ratio to exceed 1:1 (the “Debt to Equity Ratio Limit”), unless Millrose obtains the prior approval of Lennar.

Secured Financing Collateral Consent Right

In addition to the Credit Agreements, from time to time, Millrose may enter into various “secured financing arrangements,” which may include but are not limited to secured or collateralized loans, or any other transactions where assets may be pledged or used as collateral to secure the financing instrument, whether or not the security interest is perfected. In such cases, Millrose may use the land assets it holds through its subsidiaries in its real estate portfolio or the proceeds from customers’ exercises of purchase options relating to the land assets in Millrose’s real estate portfolio as collateral to secure the financing. While Millrose may, at its discretion, enter into any secured financing arrangements it so chooses (subject to the Debt to Equity Ratio Limit), Millrose is prohibited from granting or selling any security interest whereby the assets pledged pursuant to such security interest include Transferred Assets, Supplemental Transferred Assets or Future Property Assets held pursuant to the Lennar Agreements and Future Property Assets of Other Customers (i.e., mixing the assets into one collateral pool) without Lennar’s prior written consent.

Dividends

On April 15, 2025, the Company paid a dividend of $0.38 to holders of its Class A common stock and Class B common stock as of the close of business on April 4, 2025, as declared by the Board on March 17, 2025. On July 15, 2025, the Company paid a dividend of $0.69 to holders of its Class A common stock and Class B common stock as of the close of business on July 3, 2025, as declared by the Board on June 16, 2025. On September 22, 2025 the Company declared a dividend of $0.73 to Class A common stockholders and Class B common stockholders of record as of the close of business October 3, 2025. This dividend was paid on October 15, 2025. We intend to make regular dividend payments of at least 90% of our REIT taxable income to holders of our common stock out of assets legally available for this purpose. While we do not plan to do so, under currently applicable Internal Revenue Services guidance, approximately 80% of these dividends may be paid in the form of stock dividends, rather than in cash. Dividends will be authorized by our Board and declared by us based on a number of factors including actual results of operations, dividend restrictions under Maryland law or applicable debt covenants, our liquidity and financial condition, our taxable income, the annual distribution requirements under the REIT provisions of the Code, our operating expenses and any other factors our Board deems relevant. Subject to certain exceptions, distributions received from us will not be qualified dividends and will therefore be taxed at ordinary income rates to the extent of our current or accumulated earnings and profits.

Effects of Inflation and Seasonality

See discussion in the section “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K.

Promissory Notes

MPH Parent and other TRSs have issued to Millrose promissory notes (the “Promissory Notes”) that are secured by a pledge of all equity interests in the Property LLCs and unrecorded mortgages on certain of our real property assets. In the event that MPH Parent or another TRS of Millrose acquires additional land assets, the Promissory Notes may be further amended to reflect such acquisitions. Alternatively, MPH Parent or another TRS may issue one or more additional promissory notes that are similar to the Promissory Notes.

Mortgages

In connection with the Promissory Notes, each of the Property LLCs delivered fully executed mortgages (the “Mortgages”) with respect to the Homesites that they own in favor of Millrose to secure the Promissory Notes. The Mortgages were not recorded initially, but each Property LLC is required to comply with Millrose’s request to amend the Mortgages so that they may be recorded if Millrose so requests.

The Homesites covered by the Mortgages will automatically be released from the applicable Mortgage upon (a) payment in full of the applicable Promissory Note or (b) the occurrence of a closing of such Homesite in accordance with the Master Option Agreement. Additionally, any new real property that the Property LLCs acquire while any portion of the Promissory Notes remains unpaid or unsatisfied shall automatically be subject to the lien of the Mortgages or of similar mortgages or deeds of trust.

Pledge and Security Agreements

In connection with the Promissory Notes, MPH Parent and certain other TRSs entered into Pledge and Security Agreements with Millrose (the “Pledge and Security Agreements”), pursuant to which such TRSs pledged a first priority perfected, continuing security interest in and lien on 100% of its membership interests in each Property LLC and in all proceeds thereof (for purposes of this section only, the “Pledged Collateral”) as collateral for Note Borrower’s performance of its obligations under the Promissory Notes and Mortgage. Except during the continuance of a Note Event of Default, Note Borrower will have the right to receive all distributions, interest and proceeds in respect of the Pledged Collateral.

In the event that a TRS of Millrose acquires additional land assets, the Pledge and Security Agreements may be further amended to reflect such acquisitions. Alternatively, MPH Parent or another Millrose TRS may enter into one or more additional pledge and security agreements that are similar to the Pledge and Security Agreements.

REIT Tax Election and Income Taxes

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code and expect to qualify as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our “REIT taxable income,” as defined by the Code, to our stockholders. Taxable income from certain non-REIT qualifying activities is derived through our TRSs and is subject to applicable U.S. federal, state, and local income and franchise taxes. During the three and nine months ended September 30, 2025, we recorded consolidated income tax expense of $5.9 million and $15.0 million, respectively, which was attributable to our TRSs. We had no significant taxes associated with our TRS for the years ended December 31, 2024 or nine months ended September 30, 2024.

We believe we qualify for taxation as a REIT under the Code, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to stockholders. As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. In addition, our TRSs are fully subject to applicable U.S., federal, state, and local income and franchise taxes.

If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates, and dividends paid to our stockholders would not be deductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our net income and net cash available for distribution to stockholders. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.

We evaluate the tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” (greater than 50 percent probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the applicable statute of limitations, for all major jurisdictions, which include federal and certain states. We have no examinations in progress and none are expected at this time. We evaluate our tax positions using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, we determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement. We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2024 or September 30, 2025. Our TRSs are subject to U.S. federal income tax as well as income tax of various state and local jurisdictions. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our combined statements of operations and comprehensive income (loss).

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with GAAP which requires management to make estimates and assumptions that affect our reported amounts of assets and liabilities, including our contingent liabilities, as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Our actual results may differ from these estimates. Our critical accounting policies are those that require significant judgments, assumptions and estimates by management about matters that are inherently uncertain and because they are important for understanding and evaluating our financial results. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our financial statements.

Our accounting policies have been established to conform with GAAP. The preparation of the financial statements in accordance with GAAP requires management to use judgments in the application of such policies. These judgments will affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Listed below are the significant accounting policies and estimates that we believe are critical and require the use of significant judgment in their application. Our accounting policies are more fully described in Note 2. Basis of Presentation and Significant Accounting Policies of the notes to the condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q.

Revenue Recognition

The Company recognizes revenue on monthly option payments from customers in accordance with ASC 606, Revenue from Contracts with Customers, using the five-step model:

1. Identify the contract with a customer.

2. Identify the performance obligations in the contract.

3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations.

5. Recognize revenue when the performance obligation is satisfied.

Revenues from option contracts with our customers are recorded on a monthly basis, over time, for the period that the performance obligation to provide the exclusive purchase option is satisfied. Option fees are billed by the Company monthly and are due from customers in the following month. Cash payments received for option deposits are recorded as a liability and are applied to the total takedown price paid by the customer. If customers do not exercise their purchase options, the deposits are forfeited and the Company records the deposits as income. Payments received when customers exercise their purchase options and acquire Homesites from the Company are recorded as a reduction of the Homesite inventory carrying value on the balance sheet as of the date of the sale.

The Company also derives income from interest earned on the outstanding loan balance of development loans secured by residential property. The Company recognizes development loan income in accorance with ASC 310, Receivables. The Company records the revenue on a monthly basis as the interest is earned. All interest earned is paid-in-kind.

Inventory

The Company accounts for Homesite inventory in accordance with ASC 360, Property, Plant, and Equipment. The Company’s Homesite inventory is stated at cost and is monitored for indicators of impairment. The Company reviews for indicators of impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indicators are identified, the inventory is written down to fair value. The cost of inventory includes land acquisition costs, land development costs, and other costs directly attributable to Homesite development. When inventory is sold to customers through option contracts with predetermined costs and takedown schedules, the book value of the inventory is removed from the balance sheet.

The Company classifies the outstanding loan balance of development loans as development loan receivables, in accordance with ASC 310, Receivables. The associated interest earned on development loans is structured as paid-in-kind interest and is also recorded as development loan receivables. The development costs are recorded at the cost to acquire the principal portion less principal payments. The Company reviews its development loan receivables for impairment in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”).

Accounting for Spin-Off from Lennar

The Company assessed the Spin-Off as a nonreciprocal transfer of assets from Lennar to its stockholders and accounted for it under ASC 845 Nonmonetary Transactions. The Company further assessed the assets transferred from Lennar as meeting the definition of a business under ASC 805 Business Combinations and recorded the assets acquired and liabilities assumed based on the carrying value of these items as they were reflected on Lennar’s books and records as of the closing of the transaction.

Accounting for Acquisition of Rausch Land Assets

The Company assessed the acquired land assets as not meeting the definition of a business under ASC 805 Business Combinations and accounted for the transaction as an asset acquisition. Under ASC 805 Business Combinations, the cost of acquisition is allocated to the assets acquired on a relative fair value basis and no goodwill is recognized.

New Home Company Transaction

The Company assessed the acquired land assets as not meeting the definition of a business under ASC 805 Business Combinations and accounted for the transaction as an asset acquisition. Under ASC 805 Business Combinations, the cost of acquisition is allocated to the assets acquired on a relative fair value basis and no goodwill is recognized.

Recent Accounting Standards

For discussion of recently issued accounting standards, see Note 2. Basis of Presentation and Significant Accounting Policies to our unaudited condensed consolidated financial statements included in “Part I, Item 1 Financial Statements” of this Form 10-Q.

We are exposed to market risk related to changes in interest rates and other market changes that affect our debt obligations and market sensitive investments. Interest rate changes may affect (i) the market for new homes, and therefore the likelihood that purchase options will be exercised, (ii) debt obligations for our Revolving Credit Facility, and (iii) the ability to obtain other long-term debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. In the future, we may use derivative instruments to hedge exposures to changes in interest rates on land secured by our assets on the value of the land we own. On September 11, 2025, the Company used a portion of the net cash proceeds from the September 2025 Offering to repay in full the DDTL Credit Facility. In connection therewith, the Company terminated the DDTL Credit Agreement, along with all of the security interests in the assets of the Company securing the obligations. There have otherwise been no material changes from the market risk disclosure set forth in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in the Form 10-K.

As of September 30, 2025, we had no outstanding borrowings under the Revolving Credit Facility.

As of September 30, 2025, we had $2.0 billion aggregate principal amount of Senior Notes outstanding.

Borrowings under our Revolving Credit Facility bear interest at the “Adjusted Term SOFR Rate”, plus an applicable per annum spread rate of 2.00%-2.50% based on the Leverage Ratio. All outstanding principal is due and payable upon termination of the Revolving Credit Facility. Variable changes in interest rates related to the Adjusted Term SOFR Rate are generally not expected to affect the fair value of outstanding borrowings on our Revolving Credit Facility but do affect our earnings and cash flows. There were no outstanding borrowings on our Revolving Credit Facility as of September 30, 2025.

Fixed rate debt related to our 2030 Notes and 2032 Notes bear interest of 6.375% and 6.250%, respectively. Changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows. Outstanding debt for Senior Notes, net of issuance costs, was approximately $1.966 billion as of September 30, 2025.

For additional information regarding our market risk, refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Form 10-K.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of the end of the period covered by this Form 10-Q as required by paragraph (b) of Rule 13a-15 or 15d-15 of the Exchange Act. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2025 and provided reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Our Chief Executive Officer and Chief Financial Officer evaluated for changes in internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that occurred for the quarter ended September 30, 2025. As disclosed in our Form 10-Q for the quarter ended March 31, 2025, prior to the Spin-Off, the Predecessor Millrose Business relied on processes and internal controls over financial reporting performed by Lennar. After the Spin-Off, Millrose became an independent company and responsibility for these processes and controls were transferred to KL, the Manager for Millrose. These changes are not expected to materially affect or have an adverse impact on our ability to maintain adequate internal controls over financial reporting. Following the Spin-Off, new corporate and governance functions will continue to be implemented in order to meet the regulatory requirements of a stand-alone company.

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risks contained in “Part I, Item 1A. Risk Factors” of our Form 10-K and in other documents we file with the SEC, in evaluating Millrose and its business. Other than the risk factors set forth below, there have been no material changes in risk factors from those reported in our Form 10-K. The risks described in the Form 10-K and below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or future results.

We have a substantial amount of indebtedness. Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, reduce our funds available for discretionary purposes, and increase the risk that we might default on our indebtedness.

As of September 30, 2025, we had approximately $2.0 billion of outstanding indebtedness, consisting of $2.0 billion of Senior Notes. We had no outstanding borrowings and $1.3 billion of availability under our Revolving Credit Facility.

Our substantial indebtedness could have important consequences for us. For example, it could:

• adversely affect our ability to raise additional capital for working capital, capital expenditures, operations, debt service requirements, strategic initiatives or other purposes;
• limit our ability to react to changes in the economy or our industry, and restrict us from engaging in development activities or exploiting business opportunities;
• limit our flexibility in planning for, or reacting to, changes in our operations or business;
• limit, along with the financial and other restrictive covenants in our debt agreements, among other things, our ability to borrow additional funds;
• require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for discretionary purposes, including the payment of dividends and investing in business opportunities;
• make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants, could result in an event of default under the Indentures and the Revolving Credit Agreement;
• make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; or
• make us more vulnerable to downturns in our business or the economy.

In addition, the Revolving Credit Facility and the Indentures contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.

We may not be able to generate sufficient cash to service all of our indebtedness.

Our ability to pay principal and interest on our debt obligations will depend upon, among other things:

• our future financial and operating performance, which will be affected by prevailing economic, industry and competitive conditions and financial, business, legislative, regulatory and other factors, many of which are beyond our control;
• our future ability to borrow under the Revolving Credit Facility, the availability of which depends on, among other things, our complying with the covenants in the Revolving Credit Facility; and
• our future ability to raise funds by issuances of debt or equity securities or sales of assets.

We cannot assure you that our business will generate cash flow from operations, that we will be able to draw under the Revolving Credit Facility, or that we will be able to issue debt or equity securities or sell assets in amounts sufficient to fund our liquidity needs, including the payment of principal and interest on our indebtedness.

Despite our current indebtedness levels, we may still be able to incur substantially more debt, including secured indebtedness, and other obligations.

We may incur substantial additional indebtedness, including secured indebtedness, in the future, as well as other obligations. Although covenants under the Indentures and the Revolving Credit Facility limit our ability to incur certain types of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. If new debt is added to our existing debt levels, the related risks that we face would increase and may make it more difficult to satisfy our existing financial obligations. In addition, the Indentures and the Revolving Credit Facility do not limit us from incurring obligations that do not constitute indebtedness as defined therein.

Our debt agreements contain restrictions that will limit our flexibility in operating our business.

The Revolving Credit Facility and the Indentures contain, and any other existing or future indebtedness of ours would likely contain, a number of covenants that will impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things:

• incur certain types of additional indebtedness, including guarantees of indebtedness;
• create certain liens;
• engage in certain sale and leaseback agreements;
• effect certain mergers or consolidations, or sell all or substantially all of our assets; and
• alter the businesses we conduct;

As a result of these covenants, we may be limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs.

A breach of any of these covenants could result in a default under all or certain of our debt instruments. In the event of any such event of default, the lenders thereunder could elect to:

• terminate any future lending commitments;
• declare all amounts outstanding, together with accrued and unpaid interest, to be immediately due and payable; and
• require us to apply all of our available cash to repay these amounts.

Our indebtedness subjects us to interest rate risk.

Borrowings under the Revolving Credit Facility are at variable rates of interest, and therefore expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

The indebtedness under the Indentures is at fixed rates of interest and is subject to call protection, which means that in certain circumstances we would have to pay a premium if we redeemed the indebtedness before its maturity. If interest rates drop, our debt service obligations on the fixed rate indebtedness would stay the same, and our cost of capital would be greater than if we had borrowed at a variable rate of interest. Or if interest rates drop and we elect to refinance our fixed rate indebtedness with variable rate indebtedness, we might have to pay the call protection premium, which in some circumstances could be significant. In either case, our cost of capital might be greater than that of our competitors, which could place us at a competitive disadvantage