Millrose Properties, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 1. Description of Business

Millrose Properties, Inc. (“Millrose” or the “Company”) is a corporation incorporated under the laws of the State Maryland on March 19, 2024 in connection with a spin-off (the “Spin-Off) from Lennar to create an independent, publicly traded company. On February 7, 2025, the Spin-Off was completed through a distribution of 120,983,633 shares of Class A common stock of Millrose, par value $0.01 per share, and 11,819,811 shares of Class B common stock of Millrose, par value $0.01 per share, to Lennar’s common stockholders, together representing approximately 80% of Millrose’s outstanding common stock. Lennar retained 33,200,053 shares of Millrose’s Class A common stock, approximately 20% of Millrose’s outstanding shares of common stock. As a result of the Spin-Off, Millrose became an independent, publicly traded company listed on the New York Stock Exchange under the symbol “MRP”. In connection with the Spin-Off:

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Millrose received contributions from Lennar of $5.5 billion in land assets, representing approximately 87,000 homesites, and $1 billion in cash, which included $585 million of cash deposits related to option contracts;

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Millrose entered into a Revolving Credit Facility (as defined below) with a commitment amount of up to $1.335 billion that is scheduled to mature on February 7, 2028;

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Millrose entered into multiple agreements with Lennar; which include the Founder’s Right Agreement, Registration Rights Agreement, HOPP’R License Agreement, Master Program Agreement, Master Option Agreement, Master Construction Agreement, Multiparty Cross Agreement, Payment and Performance Guaranty, Recognition, Subordination and Non-Disturbance Agreement;

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Millrose entered into a management agreement (the “Management Agreement”) with Kennedy Lewis Land and Residential Advisors LLC (“KL” or the “Manager”) for KL to manage the day-to-day operations of Millrose, subject to the supervision of the Millrose board of directors (the “Board”).

Prior to the Spin-Off, the operations and financial information that represent the business assets that were spun off to Millrose were wholly owned by and under the common control of Lennar and are collectively referred to as the “Predecessor Millrose Business”. After the Spin-Off, Millrose is an independent company that is externally managed and advised by KL with personnel provided by the Manager and officers recommended by the Manager and appointed by the Board, and performing all business operations for Millrose and its subsidiaries.

Millrose is a holding company whose land banking operations are conducted through Millrose Properties Holdings, LLC (“Millrose Holdings”), a Delaware limited liability company and a wholly owned operating subsidiary of Millrose, and other subsidiaries. Millrose and its subsidiaries also may make non-land banking investments from time to time. Millrose purchases and develops residential land and sells finished homesites to homebuilders through option contracts with predetermined costs and takedown schedules. 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 its subsidiaries, the Company holds 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.

On February 10, 2025, the Company acquired $1.158 billion in land assets, 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 Coleman Companies, LLC (“Rausch”), for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, certain footnotes or other financial information normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the combined financial statements in the Company’s Form 10-K for the year ended December 31, 2024.

The unaudited condensed consolidated financial statements include the financial statements of the Predecessor Millrose Business prior to the Spin-Off, which are derived from the accounting records of Lennar. The Predecessor financial statements represent a combination of entities under common control that have been prepared under the legal entity method of carving out financial statements and have been prepared based on the assets transferred to Millrose in the Spin-Off. The Predecessor financial statements reflect the expenses directly attributable to the Predecessor Millrose Business, and, land inventory assets and liabilities included in the Spin-Off, at Lennar’s historical basis. The financial statements of the Predecessor Millrose Business may not be indicative of Millrose’s future performance as an independent, publicly traded company following the Spin-Off and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had Millrose operated as a separate, publicly traded company during the periods presented.

The basis of accounting of the Predecessor Millrose Business during the first quarter of 2024 is unchanged from that included in the notes to the combined financials statements in Form 10-K for the year ended December 31, 2024, which includes an allocation of all costs directly attributable to the Predecessor Millrose Business. The basis of accounting for the Predecessor Millrose Business during the first quarter of 2025 includes an allocation of the average daily expense in 2024, using this allocation method, to the period of January 1, 2025 through February 7, 2025. See “ Sales, General, and Administrative Expenses from Pre-Spin Period” in this Note 2 below for more information.

The unaudited condensed consolidated financial statements after the Spin-Off include the accounts of the Company and its subsidiaries, including Millrose Holdings and other subsidiaries. The basis of presentation of significant accounting policies documented below includes that of Millrose after the Spin-Off as of March 31, 2025.

All intercompany balances and transactions have been eliminated in consolidation.

Segment and Geographic Information

Prior to the Spin-Off, the Predecessor Millrose Business didnot operate as a separate reportable segment. Subsequent to the Spin-Off, the Company operates and derives revenue from its portfolio of homesite inventory through option contracts. As of March 31, 2025, the Company’s operations are conducted in the United States with properties geographically located across 29 states. The Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (the “CODM”) and evaluates performance and resource allocation on a portfolio basis. Additionally, the Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has asingle operating and reportable segment (the “Reporting Segment”) for disclosure purposes in accordance with GAAP.

Net income attributable to Millrose, as presented on the Company’s unaudited condensed consolidated statements of operations, is a metric utilized by the CODM to assess the Reporting Segment’s performance and allocate resources. Total assets, as presented on the Company’s unaudited condensed consolidated balance sheets, is used to measure the Reporting Segment’s assets.

The Company will continue to monitor operations on an ongoing basis for any changes that may impact segment reporting as required under ASC 280, Segment Reporting.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash

The Company considers all investments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents are recorded at cost, which approximates their fair values due to the short maturity period. As of March 31, 2025, cash was $89.5 million and consisted of highly liquid deposit accounts and the Company heldno cash equivalents. The Predecessor Millrose Business heldno cash and cash equivalents at December 31, 2024.

Option Fee Receivables

Option fee receivables are stated at their net realizable value. The Company assesses for potential credit losses based on historical experience, creditworthiness of customers, and current economic conditions relevant to the Company. Option fee receivables were $47.2 million as of March 31, 2025 as compared to $0 as of December 31, 2024.

Optionfee receivables consist of amounts due from customers to maintain their purchase options on properties. Option fees are billed monthly and are due in the following month. As of the date of issuance of this Form 10-Q, all option fee receivablesas of March 31, 2025 have been collected. Based on the short duration of receivables and collection of the full balance, the Company didnot record a credit allowance as of March 31, 2025.

Inventories

Inventories consist of homesite inventory and other related assets which include the Company’s development loans secured by property intended for single-family residential use and the related interest receivable which is paid-in-kind. Total inventories were $7.0 billion as of March 31, 2025, as compared to $5.5 billion as of December 31, 2024.

The Company accounts for homesite inventory in accordance with ASC 360, Property, Plant, and Equipment. Homesite inventory is classified as land under development, or homesites finished. 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. Finished homesites are classified as inventories until they are sold to customers through option contracts with predetermined costs and takedown schedules. At the time of sale, the book value of the homesite is removed from the balance sheet.

The Company classifies development loan receivables as inventories, 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 inventory. Development loans are recorded at the cost to acquire the principal portion less principal payments. Such loans are used for residential homesite property development, in line with the Company’s operating model. The interest earned is similar in economic substance to monthly option payments on inventory owned by the Company.

The Company reviews development loans for impairment in accordance with ASC 326, Financial Instruments - Credit Losses. The Company has determined that any expected credit losses would be immaterial to the Company and did not record a credit allowance as of March 31, 2025.

The following roll forward summarizes the change in inventories from the Spin-Off through March 31, 2025:

(1) Includes land contributed of $5.556 billion, less deferred tax asset adjustment of $59.8 million. Excludes option deposits of $584.8 million which

are recorded as builder deposit liabilities in the unaudited condensed consolidated financial statements and when netted with homesite inventory

contributed by Lennar is $4.911 billion of net non-cash contributions from Lennar.

(2) Includes land acquired of $1.049 billion plus deferred tax liability adjustment of $116.7 million, less earnest deposits of $7.6 million.

(3) Includes land additions of $326.9 million, development costs of $445.6 million, and investment in development loans of $250.2 million.

(4) Includes homesite inventory takedowns of $679.7 million and development loan paydowns of $1.1 million.

(5) Interest receivable for development loan that is paid-in-kind.

Deferred Financing Costs

Debt financing costs associated with the Revolving Credit Facility were paid on the date of the Spin-Off and are deferred and amortized to interest expense over the term of the financing. As of March 31, 2025, total deferred financing costs were $9.4 million, net of $0.2 million of amortization recorded to interest expense. Deferred financing costs are classified as other assets in the Company’s unaudited condensed consolidated balance sheets. See Note 5. Other Assets.

Builder Deposits

Builder deposits are option deposit payments received from customers under the Company’s option contracts. Builder deposits are contract liabilities for obligations to sell finished homesites to customers when the customers exercise their purchase options. Builder deposits are recorded as a liability at the time of customer payment. When the customers exercise their purchase option and acquire the finished homesite, the builder deposits are applied to the total takedown price owed by the customer. The liability is eliminated as takedown payments are made and recorded, along with the cash payment, as a reduction to the carrying amount of the inventory sold on the Company’s balance sheet. If customers do not exercise their purchase options, the deposit is forfeited as per the terms of the option contracts and recorded as income by the Company. The following is a roll forward of the builder deposit liability for the three months ended March 31, 2025, which reflects activity after the Spin-Off. There wereno builder deposits for the Predecessor Millrose Business prior to the Spin-Off.

Development Guarantee Holdback Liability

As of March 31, 2025, the Company recorded a holdback liability of $100 million related to a site improvement guarantee (the “Site Improvement Guarantee Amount”) owed to Rausch pursuant to terms of the transaction documents for the acquisition of the Rausch land assets by the Company (the “Transaction Documents”). The Site Improvement Guarantee Amount is due withinten business days of the date that is the later of (i) two years following February 10, 2025, and (ii) the date on which development of 50% of certain assets subject to the Transaction Documents (the “Guaranteed Assets”) has been completed. The amount to be paid to Rausch pursuant to the Transaction Documents is the Site Improvement Guarantee Amount, less the aggregate amount by which actual development costs exceed the budgeted development costs for the Guaranteed Assets or such lesser amounts as may be designated in writing by Rausch.

Revenue Recognition

The Company’s primary source of revenue is monthly option payments from Lennar and other customers in consideration for maintenance of a purchase option with respect to a property. The Company enters into option contracts that grant its customers the exclusive option to purchase finished homesites using predetermined costs and takedown schedules. In consideration for the grant of the purchase option, the Company receives payments which include monthly option payments to maintain the exclusive purchase option of a property.

Monthly option payments are recorded as option fee revenue over time on a monthly basis, for the period the performance obligation to provide the exclusive purchase option is satisfied. Monthly option payments are calculated by applying a fixed contractual rate per terms of the option contract to (i) total value of the property or acquisition cost of the property (ii) the amount of reimbursements made by the Company to customers for the cost of horizontal development of the property, less (x) the takedown prices paid by customers to the Company and (y) any other payments or reimbursements paid by customers to the Company (which for the Transferred Assets from Lennar excludes deposits). At the end of each month, the Company calculates and invoices the monthly option fee to its customers for the cash consideration it expects to receive per terms of the option contract. The monthly option fee is recorded as option fee revenue in the period earned with an associated option fee receivable recorded in the accompanying balance sheets until payments are received. Monthly option payments are due within the following calendar month and reflect the amounts billed.

The Company also derives other related income from interest on the outstanding loan balance of development loans secured by residential property. The Company records the revenue on a monthly basis as the interest is earned. All interest earned is paid-in-kind.

For the three months ended March 31, 2025 and March 31, 2024, option fee revenues and other related income were $82.7 million and $0, respectively. Option fee revenues and other related income were comprised of $80.1 million option fee revenues and $2.6 million other related income for development loans. For the three months ended March 31, 2025, revenue earned from Lennar was in excess of 99% of total option fee revenue which is calculated per the terms of the Master Option Agreement.

Management Fee Expense

Pursuant to the Management Agreement, the Company pays KL a management fee in an amount equal to 1.25% per annum (0.3125% per quarter) of Tangible Assets, as defined in the Management Agreement (the “Management Fee”). The Management Fee is due and payable quarterly in advance as of the first day of each quarter and is reviewed by the Board.

Except for certain reimbursable expenses, all expenses incurred by Millrose and its subsidiaries in the ordinary course of business are covered under the Management Fee, including the costs of all administrative and operating functions and systems, office space and office equipment, public company expenses, expenses incurred in maintaining the Company’s REIT status, compensation and fees paid to officers, employees, directors, vendors, consultants, advisors, and other outside professionals. All employees are employed by KL (or an affiliate of KL), and their salaries are paid by KL (or an affiliate of KL); therefore the Company does not record personnel-related expenses, including salaries, benefits, and share-based compensation for any employees. All cash compensation and fees paid to the Board are also paid by KL and covered by the Management Fee. The Management Fee does not cover certain offering expenses, rating agency fees, fees incurred for services in connection with extraordinary litigation and mergers and acquisitions and other events outside the Company’s ordinary course of business, and, in certain circumstances, costs associated with the ownership and maintenance of land.

The Management Fee for the three months ended March 31, 2025 was $12.1 million, which covers services for the period from the Spin-Off date of February 7, 2025 through March 31, 2025, and was pro-rated based on the number of days during the quarter that the Management Agreement was in effect.

Sales, General, and Administrative Expenses from Pre-Spin Period

Sales, general, and administrative expenses from pre-spin period are costs directly attributable to the Predecessor Millrose Business prior to the Spin-Off, and include pre-Spin-Off operating and employee compensation costs for dedicated regional and divisional land teams tasked with acquiring and developing the homesites Lennar transferred to Millrose in the Spin-Off. For the three months ended March 31, 2024, these expenses were allocated to the Predecessor Millrose Business on a specific identification basis or, when specific identification was not practicable, a proportional cost allocation method primarily based on headcount, usage, or other allocation methods depending on the nature of the services. For the three months ended March 31, 2025, these expenses included an allocation for the period from January 1, 2025 through February 7, 2025 calculated as (i) the average daily expense allocated and recorded for the twelve months ended December 31, 2024, applied to (ii) days in the first quarter 2025 prior to the Spin-Off. The Company believes the allocation is representative in all material respects to the costs that are directly attributable to the Predecessor Millrose Business for the period from January 1, 2025 through February 7, 2025. Sales, general, and administrative expenses from pre-spin period were $25.0 million for the period of January 1, 2025 through February 7, 2025, and $56.9 million for the three months ended March 31, 2024.

Predecessor Millrose Business Income Taxes

The basis of accounting for income taxes for the Predecessor Millrose Business for the three months ended March 31, 2025 is unchanged from that disclosed in the notes to the combined financials statements included in Millrose’s Form 10-K for the year ended December 31, 2024. See Note 9. Income Taxes for additional information.

Income Taxes

The Company records income taxes using the asset and liability method set under ASC 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, as well as net operating loss and tax credit carryforwards as applicable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the year in which the temporary differences are expected to be recovered or paid. The effect of the change in tax rates is recognized in earnings in the period when the changes are enacted. Interest related to unrecognized tax benefits is recognized in the financial statements as a component of income tax expense.

Deferred tax assets are recognized to the extent that it is more likely than not that they will be realized. The Company reviews the potential realization of deferred tax assets and establishes a valuation allowance to reduce the deferred tax assets if it is determined more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company considers all available positive and negative evidence, including recent financial performance, actual earnings (losses), future reversals of existing temporary differences, projected future taxable income, and tax planning strategies.

Millrose intends to elect to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ending December 31, 2025. So long as the Millrose qualifies as a REIT, it generally will not be subject to U.S. federal income tax on its net income that it distributes to its stockholders. To maintain its qualification as a REIT, Millrose will be required under the Code to distribute at least 90% of its REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to its stockholders and meet certain other requirements. If the Company fails to maintain its qualification as a REIT in any taxable year, it will then be subject to federal income taxes on its taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants Millrose relief under certain statutory provisions. Such an event could have a material adverse effect on its net income and net cash available for distribution to its members.

Millrose intends to elect for its wholly owned subsidiary Millrose Holdings and its indirectly wholly owned subsidiary RCH Holdings, Inc. to be taxable as taxable REIT subsidiaries (“TRSs”) and may form or acquire other direct or indirect wholly owned subsidiaries that will also elect to be taxed as TRSs in the future. TRSs are subject to taxation at regular corporate income tax rates.

See Note 9. Income Taxes for additional information.

Other Income (Expense)

The Company records revenue and expenses that are not directly related to the core operations of the Company as other income and expense. Other income (expense) for the three months ended March 31, 2025 included interest expense of $2.5 million for the Revolving Credit Facility and interest income of $1.1 million related to cash balances.

Fair Value Measurements

Certain assets and liabilities are required to be reported at fair value under GAAP. The framework for determining fair value provided by GAAP prioritizes the inputs used in measuring fair value as follows:

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Level 1: Fair value determined based on quoted prices in active markets for identical assets or liabilities.

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Level 2: Fair value determined using significant other observable inputs.

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Level 3: Fair value using significant other unobservable inputs.

As of March 31, 2025 and December 31, 2024, there were no assets or liabilities measured at fair value on a recurring basis. Cash, option fee receivables, and other current liabilities approximate their fair values due to their short-term nature. The Revolving Credit Facility has a recorded value that approximates fair market value, as it bears interest at a rate that approximates fair market value. The Company’s inventory is stated at cost and is monitored for indicators of impairment. If any such indicators are identified, the inventory is written down to fair value. At March 31, 2025 and December 31, 2024, no indicators of impairment were noted.

Recent Accounting Standards

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the CODM and included within the segment measure of profit or loss, an amount and description of composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The Company adopted ASU 2023-07 effective for the Company’s fiscal year ending December 31, 2024, and interim reporting periods starting in the quarter ended March 31, 2025. See ‘Segment and Geographic Information” in Note 2. Basis of Presentation and Significant Accounting Policies for more information on the Company’s accounting policies for operating and reporting segments.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”), which requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. ASU 2024-03 will be effective for the Company’s fiscal year ending December 31, 2027. Early adoption is permitted. The Company has elected not to early adopt and is currently evaluating the potential impact of ASU 2024-03 on its financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”) Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating the potential impact of ASU 2023-09 on its financial statements and disclosures.

Note 3. Business Transactions

Spin-Off from Lennar

On February 7, 2025, the Company completed the Spin-Off from Lennar through a distribution of approximately 80% of Millrose’s common stock to Lennar stockholders. Lennar retained the remaining 20% of total outstanding shares of Millrose’s common stock. 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. The Company concluded that the transferred assets and activities collectively constitute a business under ASC 805, as they include (i) substantive inputs (homesite inventory and cash), (ii) processes (Lennar services as defined under the Master Program Agreement), and (iii) the capability to produce outputs (option fee income). The Company 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. The strategic rationale for the Spin-Off is documented in Note 1. Description of Business.

The following are the Spin-Off related transactions, and accounting adjustments that the Company made in its unaudited condensed consolidated financial statements after the Spin-Off:

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The Spin-Off was completed through a distribution of 120,983,633 shares of Class A common stock of Millrose, par value $0.01 per share, and 11,819,811 shares of Class B common stock of Millrose, par value $0.01 per share, to Lennar common stockholders. The par value of $1.3 million for this common stock issued was recorded as stockholders’ equity in the Company’s unaudited condensed consolidated balance sheets;

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Lennar retained 33,200,053 shares of Class A common stock of Millrose, par value $0.01 per share. The par value of $0.3 million for these shares issued was recorded as stockholders’ equity in the Company’s unaudited condensed consolidated balance sheets;

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Millrose received contributions from Lennar of $5.5 billion in land assets, representing approximately 87,000 homesites, and $1.0 billion in cash, which included $584.8 million of cash deposits related to option contracts. The Company recorded (i) the cash and land contributions as cash and homesite inventory, respectively, and (ii) the cash deposits for option contracts as builder deposit liabilities, in its unaudited condensed consolidated balance sheets;

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The Company recorded liabilities for (i) seller notes of $19.0 million, and (ii) prepaid due diligence costs of $77.9 million acquired as part of the Spin-Off, in its unaudited condensed consolidated balance sheets; and

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The Company recorded a deferred tax asset of $59.8 million in its unaudited condensed consolidated balance sheets.

The total Spin-Off related stockholders equity for contributions from Lennar was approximately $5.9 billion, which the Company recorded as additional paid-in capital in its unaudited condensed consolidated balance sheets. The Predecessor Millrose Business equity at the Spin-Off date was $5.2 billion, which was reversed from the Company’s unaudited condensed consolidated balance sheets as of the Spin-Off date.

In connection with the Spin-Off, the Company incurred approximately $77.9 million of Spin-Off related costs, primarily consisting of accounting, legal, banking, and advisory fees. These costs were recorded as incurred as a reduction of equity in the unaudited condensed consolidated financial statements.

Acquisition of Rausch Land Assets

On February 10, 2025, the Company completed the acquisition of land from Rausch consisting of approximately 25,000 homesites for approximately $859 million in cash, net of option deposits funded by Lennar and other holdbacks. The Company funded the transactions using cash on hand. The acquired homesite assets were approximately $1.0 billion. 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. Millrose did not incur transaction costs for the Rausch acquisition.

The purchase consideration for the asset acquisition was $1.158 billion, consisting of $858.9 million in cash, net of $90.3 million in option deposits, $100.0 million of development guarantee holdbacks, $116.7 million of deferred tax liabilities, and $7.6 million of earnest deposits. The total acquisition cost was allocated to the acquired land assets and was recorded at its purchase price of $1.158 billion.

The acquired land assets were recorded at the acquisition cost as homesite inventory in the Company’s unaudited condensed consolidated balance sheets. The Company recorded in its unaudited condensed consolidated balance sheets (i) the option deposits as builder deposit liabilities (ii) the development guarantee holdbacks as a holdback liability (iii) the deferred taxes as deferred tax liabilities, and (iv) earnest deposits as other assets.

Note 4. Related Party Transactions

Prior to the Spin-Off, the Company was a wholly owned subsidiary of Lennar. Following the Spin-Off, the Company is an independent company of which 20% of its shares are owned by Lennar as of March 31, 2025. The primary transactions between the Company and Lennar consist of payments for (i) monthly option payments from Lennar in consideration for its purchase options on properties, (ii) option deposits paid by Lennar for the exclusive purchase option of a property, and (iii) cash payments from Lennar when homesite purchase options are exercised.

As of March 31, 2025, the Company recorded the following related to Lennar in the unaudited condensed consolidated financial statements:

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Option fee receivables of $47.2 million and other receivables of $0.4 million due from Lennar;

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Homesite inventory of $5.7 billion; and

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Option deposit liabilities of $559.2 million.

For the three months ended March 31, 2025, the Company derived 97% of its total operating revenues from Lennar. Given the concentration of revenue from Lennar, any significant adverse in Lennar’s financial condition could impact the Company’s operations and financial position. The Company believes it is not exposed to significant credit risk for Lennar as of the date of these unaudited consolidated condensed financial statements.

Following the Spin-Off, the Company is externally managed and advised by KL. The Company pays a Management Fee each quarter as described in Note 2. Basis of Presentation and Significant Accounting Policies, Management Fee. For the three months ended March 31, 2025, the management fee paid to KL was $12.1 million. There wereno amounts payable to or amounts receivable from KL as of March 31, 2025.

Note 5. Other Assets

Other assets as of March 31, 2025 and December 31, 2024 were as follows:

(1) Includes earnest deposits for Rausch land acquisition of $5.8 million, due diligence costs for Rausch land acquisition of $1.8 million, and other

earnest deposit reductions of $0.7 million.

(2) Deferred financing costs for Revolving Credit Facility.

(3) Other receivables from Lennar.

Note 6. Other Liabilities

Other liabilities as of March 31, 2025 and December 31, 2024 were as follows:

(1) Payable for dividend declared by the Company on March 17, 2025, and paid on April 15, 2025. See Note 10.

(2) Loan payable to lender specific to a community acquired from Lennar.

(3) Deal costs payable related to Spin-Off.

(4) Accrued interest payable for Revolving Credit Facility.

(5) Federal income tax payable $3.6 million and state income tax payable $0.7 million.

Note 7. Debt Obligations

Revolving Credit Facility

On February 7, 2025, the Company entered into a credit agreement with a consortium of lenders with JPMorgan Chase Bank, N.A., as administrative agent for the lenders (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility (the “Revolving Credit Facility”) with commitments in an aggregate amount of $1.335 billion. Availability under the Credit Agreement is subject to a borrowing base updated quarterly (or, at the Company’s 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 Credit Agreement. The Revolving Credit Facility may be used by the Company to borrow loans or obtain standby letters of credit.

Loans under the Credit Agreement bear interest at the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus an applicable margin at the per annum rate of (i)2.00%, if the Leverage Ratio (as defined in the 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 the Company’s option, loans may instead bear interest at the Alternate Base Rate (as defined in the 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 Credit Agreement are secured by pledges by Millrose of (i) the promissory note of approximately $4.8 billion issued by Millrose Holdings to Millrose (the “Promissory Note”) as part of the recapitalization of Millrose Holdings prior to the Spin-Off, and (ii) the equity interests of Millrose Holdings. In addition, the Credit Agreement requires the Company to pledge (i) certain future promissory notes similar to the Promissory Note that Millrose may enter into with future subsidiaries and (ii) the equity interests of any future subsidiaries whose equity interests are not pledged for the benefit of the Promissory Note or any other similar promissory note or notes.

As of March 31, 2025, there were no guarantors under the Credit Agreement. The Company may elect to join certain of our subsidiaries to the Credit Agreement as guarantors from time to time, and in certain circumstances, the Credit Agreement requires the Company to cause certain future subsidiaries of its future that are not Taxable REIT Subsidiaries (as defined in the Credit Agreement) to become guarantors.

The Credit Agreement includes affirmative and negative covenants applicable to the Company and its subsidiaries, including limitations regarding indebtedness, liens, dividends and other restricted payments, 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 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 Credit Agreement also requires the Company to maintain all REIT requirements. As of March 31, 2025, the Company was in compliance with all covenants under the Credit Agreement.

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

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

The outstanding principal balance at March 31, 2025 was $350.0 million which the Company classified as debt obligations in its unaudited condensed consolidated balance sheets. Interest expense for the three months ended March 31, 2025 was $2.5 million, which included $2.4 million of interest and $0.1 million of amortized deferred financing fees. Interest payments for the three months ended March 31, 2025 were $0.6 million, the outstanding interest payable at March 31, 2025 was $1.8 million and is classified in other liabilities in the Company’s unaudited condensed consolidated balance sheets.

Predecessor Millrose Business Debt

The Predecessor Millrose Business’s debt as of March 31, 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 March 31, 2025.

Note 8. Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Legal costs incurred in connection with loss contingencies, if any, are expensed as incurred. There is no material litigation nor, to management’s knowledge, any material litigation currently threatened against the Company. As of March 31, 2025, the Company had $5.3 billion of future land development commitments associated with its option contracts.

Note 9. Income Taxes

The provision for income taxes was $4.4 million for the three months ended March 31, 2025 as compared to $0 for the three months ended March 31, 2024:

The effective tax rate for the three months ended March 31, 2025 was 24.8%, as compared to an effective tax rate ofzero for the three months ended March 31, 2024. A reconciliation of the statutory rate and effective tax rates was as follows:

Deferred income taxes represent the net tax effects of temporary differences between the financial statement carrying amounts and the corresponding tax basis of certain assets and liabilities related to the initial land basis spun off from Lennar and the acquisition of Rausch land assets. These differences result in the recognition of a deferred tax liability.

The Company’s deferred tax liabilities as of March 31, 2025 and December 31, 2024 were as follows:

Millrose for the three months ended March 31, 2025

For the three months ended March 31, 2025, the effective tax rate included the income tax expense the Company incurred on the option fee income less any related expenses. The change in the effective tax rate as compared to the three months ended March 31, 2024 was primarily due to a valuation allowance in the first quarter of 2024 for the cumulative loss position of the carve-out Predecessor Millrose Business.

Predecessor Millrose Business for the three months ended March 31, 2024

The Predecessor Millrose Business didnot have income taxes during the three months ended March 31, 2024 due to offsetting changes in valuation allowance against its deferred taxes that reduced income taxes and effective tax rate tozero.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of March 31, 2024 the Predecessor Millrose Business had federal and state income tax net operating loss carryforwards related to operations that may be carried forward from 10 to 20 years, or indefinitely, depending on the tax jurisdiction.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances was assessed by the Predecessor Millrose Business based on the consideration of all available positive and negative evidence using a “more- likely-than-not” standard with respect to whether deferred tax assets will be realized. This assessment considered, among other matters, the nature, frequency and severity of current and cumulative losses, actual earnings, forecasts of future profitability, the duration of statutory carryforward periods, the Predecessor Millrose Business’s experience with loss carryforwards not expiring unused and tax planning alternatives. Based on this assessment, the Predecessor Millrose Business determined that it will not be able to realize its net operating loss carryforwards and recorded a valuation allowance against its deferred tax asset, which also reduced income taxes and effective tax rate tozero.

As of March 31, 2024, the Predecessor Millrose Business hadno gross unrecognized tax benefits.

Note 10. Stockholders’ Equity

Authorized Capital Stock

As of March 31, 2025, the Company had, under its Charter, authorized capital stock of (i)450,000,000 shares of common stock, par value $0.01 per share, consisting of 275,000,000 shares of Class A common stock and 175,000,000 shares of Class B common stock, and (ii)50,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

For the three months ended March 31, 2025, the following transactions related to our common stock occurred in connection with the Spin-Off:

•

120,983,633 shares of Millrose Class A common stock were distributed to holders of Lennar common stock as of the close of business January 21, 2025;

•

11,819,811 shares of Millrose Class B common stock were distributed to holders of Lennar common stock as of the close of business January 21, 2025;

•

Lennar retained 33,200,053 shares of Millrose’s Class A common stock, representing approximately 20% of Millrose’s outstanding common stock.

As of March 31, 2025, the Company had outstanding an aggregate of 166,003,497 shares of common stock on a fully diluted basis.

Preferred Stock

As of March 31, 2025 there wereno shares of preferred stock outstanding.

Dividends

On March 17, 2025, the Company declared a dividend of $0.38 to Class A common stockholders and Class B common stockholders of record as of the close of business April 4, 2025. The dividend was paid on April 15, 2025. The Company recorded a dividend payable of $63.1 million in other liabilities in the Company’s condensed consolidated balance sheets as of March 31, 2025.

Securities Authorized for Issuance Under Equity Compensation Plans

On December 17, 2024, the Company’s sole stockholder at the time and its Board adopted the Millrose Properties, Inc. 2024 Omnibus Incentive Plan (the “2024 Incentive Plan”). As of March 31, 2025, no securities had been issued or granted pursuant to the 2024 Incentive Plan.

Stock Repurchases

There were no stock repurchases of the Company’s common stock during the quarter ended March 31, 2025.

Additional Paid In Capital

As of March 31, 2025, the Company’s additional paid in capital was approximately $5.9 billion, which primarily relates to the cash and land contributed by Lennar at the Spin-Off.

Predecessor Equity

The Company’s equity for the three months ended March 31, 2025 includes the reversal of the Predecessor Millrose Business equity, which was $5.2 billion at the date of Spin-Off.

Note 11. Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share. The Company has elected to use the number of shares outstanding as of the day of the Spin-Off, as the denominator number of shares for the period prior to the Spin-Off; an acceptable approach under ASC 260 that spun-off entities may use when the spin-off occurs within the financial reporting period. The outstanding shares at Spin-Off were unchanged as of March 31, 2025. For the three months ended March 31, 2025, basic and diluted earnings per share is calculated by dividing net income attributed to common stockholders after the Spin-Off by the basic and diluted weighted shares outstanding for the period. The pre-spin net loss of $25.0 million for the period from January 1, 2025 through February 7, 2025 is added back to net income for purposes of earnings per share. For the three months ended March 31, 2024, Lennar was the sole shareholder.

Basic and diluted earnings per share was calculated as follows:

(1) Basic and diluted weighted average common shares for the three months ended March 31, 2025 represent the common shares issued at the Spin-Off, which are the common shares outstanding as of March 31, 2025. No publicly-listed shares were outstanding as of March 31, 2024.

As of March 31, 2025 and March 31, 2024, there areno dilutive securities outstanding.

Note 12. Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q and determined that there have been no events that have occurred that require adjustment or disclosure in the financial statements except for the following:

On May 12 th, 2025, the Company entered into a commitment with New Home Company (“New Home”) under which Millrose will provide land banking capital of up to $700 million to support New Home’s acquisition of Landsea Homes (“Landsea”). The Company’s commitment to fund will occur simultaneously with the closing of New Home’s acquisition of Landsea which is expected to close in the third quarter of 2025, and includes initial funding of up to $600 million at closing for the acquisition of a portfolio of homesites on which the Company will execute option agreements with New Home.

On May 13, 2025, Millrose entered into a $1 billion delayed draw term loan commitment from Goldman Sachs Bank USA and JPMorgan Chase Bank, N.A.