Millrose Properties, Inc.

Previous wording

Millrose is a corporation incorporated under the laws of the State of Maryland on March 19, 2024. Our 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. In certain instances, Millrose may extend development to 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”).

Current wording

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”).

Previous wording

In connection with the New Home transaction, on June 24, 2025, the Company entered into a DDTL Credit Agreement (as defined below) that provides for a delayed draw term loan facility with commitments in the aggregate amount of $1.0 billion that is scheduled to mature on June 23, 2026. Proceeds of the DDTL Credit Agreement were used to fund the New Home acquisition of Landsea and may be used for general corporate purposes (as further described below).

Current wording

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.

Previous wording

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 and other related assets 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 and other related assets 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 and other related assets to invested capital as of June 30, 2025 and summarizes invested capital activity during the quarter:

Current wording

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:

Previous wording

(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 quarter 2025.

Current wording

(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.

Previous wording

(2) Reduction in investment balance 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.

Current wording

(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.

Previous wording

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

Current wording

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

Previous wording

(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 2nd quarter.

Current wording

(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.

Previous wording

During the three months ended June 30, 2025, we funded $718 million for land acquisition and development and received $806 million in net takedown proceeds under the Master Program Agreement at a weighted average yield of 8.5%. We funded $813 million for land acquisition and development and received $28 million in net takedown proceeds for Other Agreements during this period at a weighted average yield of 11.4%. On a total portfolio basis, the weighted average yield was 8.9% as of June 30, 2025.

Current wording

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.

Previous wording

As of June 30, 2025, our Homesite assets consisted of 1,000 properties (also known as communities) in 29 states across the United States, totaling approximately 128,904 Homesites, with an approximate aggregate value of $7.6 billion of Homesite inventory. Of the Homesites owned as of June 30, 2025, we expect the total Takedown Prices of all Homesites to be approximately $13.1 billion, and the total estimated development costs of Homesites to be approximately $5.5 billion. The properties are geographically located in the United States.

Current wording

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.

Previous wording

As of June 30, 2025, our property assets are collectively located across 29 U.S. states. Approximately 48% of the property assets are concentrated in three states (California, Florida, Texas) in terms of number of Homesites and approximately 39% 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).

Current wording

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).

Previous wording

As of June 30, 2025, the below table shows the location, number of properties, number of underlying Homesites and expected total Takedown Prices of our properties across 29 U.S. states and as set forth in the relevant Project Addenda:

Current wording

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:

Previous wording

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

Current wording

(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.

Previous wording

As of June 30, 2025, the Homesites within the Master Program Agreement were included in 50 separate pools, in accordance with the applicable Multiparty Cross Agreements. The average number of properties per pool was 14.7 and the aggregate sum of all option deposits Lennar has made, or is obligated to make with respect to a new pool of Future Property Assets, shall not at any time exceed $50 million with respect to pools of the Transferred Assets and $25 million with respect to pools of Future Property Assets. Pools will be established with primary consideration given to diversity within pools across geographies, communities, and home types. Future Homesite option contracts outside of the Master Program Agreement with Lennar may or may not contain pooling arrangements.

Current wording

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%.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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.

Previous wording

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 also 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.

Current wording

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.

Previous wording

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 (as defined below) with commitments of $1.335 billion and our DDTL Credit Facility (as defined below) with commitments of $1.0 billion, and (ii) other expenses related to rating agency fees, legal fees, audit fees, and bank fees.

Current wording

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.

Previous wording

The following discussion describes the results of operations for the three and six months ended June 30, 2025 versus the three and six months ended June 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 June 30, 2025. We have a single operating and reportable segment in accordance with GAAP and our operations are conducted in the United States.

Current wording

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.

Previous wording

Our net income was $112.8 million for the three months ended June 30, 2025, compared to a net loss of $59.8 million for the three months ended June 30, 2024. The increase in net income for the three months ended June 30, 2025 compared to the three months ended June 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.

Current wording

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.

Previous wording

Option fees and other related income was $149.0 million for the three months ended June 30, 2025, compared to $0 for the three months ended June 30, 2024. For the three months ended June 30, 2024, the Predecessor Millrose Business did not have revenues, as all finished Homesites were transferred to the Predecessor Millrose Business’s parent company, who sold those homes to Lennar customers.

Current wording

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.

Previous wording

Management fee expense for the three months ended June 30, 2025 was $22.0 million, compared to $0 for the three months ended June 30, 2024. Management fee expense represents the costs for KL management services incurred from April 1, 2025 through June 30, 2025.

Current wording

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.

Previous wording

Stock-based compensation expense related to RSUs granted to the Board for the three months ended June 30, 2025 was $0.2 million. Sales, general, and administrative expenses for the Predecessor Millrose Business include $1.7 million for the three months ended June 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.

Current wording

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.

Previous wording

Sales, general and administrative expenses from Pre-Spin periods were $59.8 million for the three months ended June 30, 2024. There were no sales, general and administrative expenses recorded during the second quarter of 2025.

Current wording

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.

Previous wording

Other income and expense was a net expense of $9.3 million for the three months ended June 30, 2025, compared to $0 for the three months ended June 30, 2024. Other income and expense for the three months ended June 30, 2025 includes (i) interest expense for the Revolving Credit Facility and DDTL Credit Facility of $10.3 million, and (ii) other expenses of $0.8 million, which was partially offset by interest income of $1.8 million related to cash balances.

Current wording

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.

Previous wording

Net income from operations before income tax was $117.5 million for the three months ended June 30, 2025, compared to a net operating loss of $59.8 million for the three months ended June 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 as a result of the Revolving Credit Facility and the DDTL Credit Facility (b) higher tax provision, and (c) higher other expenses.

Current wording

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.

Previous wording

The provision for income taxes for the three months ended June 30, 2025 was $4.8 million, compared to $0 for the three months ended June 30, 2024. The second 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 June 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.

Current wording

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.

Previous wording

Our net income was $152.5 million for the six months ended June 30, 2025, compared to a net loss of $116.7 million for the six months ended June 30, 2024. Our net income for the six months ended June 30, 2025 includes post Spin-Off income of $177.5 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 six months ended June 30, 2025 compared to the six months ended June 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.

Current wording

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.

Previous wording

Option fees and other related income was $231.7 million for the six months ended June 30, 2025, compared to $0 for the six months ended June 30, 2024. For the six months ended June 30, 2025 prior to the Spin-Off and for the six months ended June 30, 2024, the Predecessor Millrose Business did not have revenues, as all finished Homesites were transferred to the Predecessor Millrose Business’s parent company, who sold those homes to Lennar customers.

Current wording

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.

Previous wording

Management fee expense for the six months ended June 30, 2025 was $34.1 million, compared to $0 for the six months ended June 30, 2024. Management fee expense represents the costs for KL management services after the Spin-Off and incurred through June 30, 2025.

Current wording

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.

Previous wording

Stock-based compensation expense related to RSUs granted to the Board for the six months ended June 30, 2025 was $0.2 million. Sales, general, and administrative expenses for the Predecessor Millrose Business include $8.9 million of stock-based compensation expenses for six months ended June 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.

Current wording

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.

Previous wording

Sales, general and administrative expenses from Pre-Spin periods were $25.0 million for the six months ended June 30, 2025, compared to $116.7 million for the six months ended June 30, 2024. For the six months ended June 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 six months ended June 30 2024 which included sales, general, and administrative expenses for the full first and second quarters of 2024. There were no sales, general and administrative expenses recorded after the Spin-Off.

Current wording

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.

Previous wording

Other income and expense was a net expense of $10.7 million for the six months ended June 30, 2025, compared to $0 for the six months ended June 30, 2024. Other income and expense for the three months ended June 30, 2025 includes (i) interest expense for the Revolving Credit Facility and DDTL Credit Facility of $12.8 million, and (ii) other expenses of $0.8 million, which was partially offset by interest income of $2.9 million related to cash balances.

Current wording

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.

Previous wording

Net income from operations before income tax was $161.7 million for the six months ended June 30, 2025, compared to a net operating loss of $116.7 million for the six months ended June 30, 2024. Our net income from operations before taxes includes post Spin-Off net income before taxes of $186.7 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 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 as a result of the Revolving Credit Facility and the DDTL Credit Facility, (b) higher tax provision, and (c) higher other expenses.

Current wording

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.

Previous wording

The provision for income taxes for the six months ended June 30, 2025 was $9.1 million, compared to $0 for the six months ended June 30, 2024. The tax provision for the six months ended June 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 six months ended June 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.

Current wording

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.

Previous wording

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 costs for our Credit Agreements, and non-recurring agency expenses related to the Spin-Off.

Current wording

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

Previous wording

(1) Reflected in Interest expense in the condensed consolidated statements of operations. See Note 7.Debt Obligations.

Current wording

(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.

Previous wording

(2) Reflected in Other expenses in the condensed consolidated statements of operations. See Note 2.Basis of Presentation and Significant Accounting Policies, Other income (expenses).

Current wording

(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.

Previous wording

(3) RSUs granted to each member of the Board under 2024 Incentive Plan. See Note 11.Stock-Based Compensation.

Current wording

(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.

Previous wording

As of June 30, 2025, we had $66.6 million cash on hand and approximately $1.310 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 DDTL Credit Facility of $1.0 billion. 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.

Current wording

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.

Previous wording

Our cash flows for the six months ended June 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.

Current wording

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.