Millrose Properties, Inc.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

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, (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:

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 condensed consolidated financial statements related to (i) homesites under option contracts, (ii) development loans receivable, and (iii) liabilities. The most directly comparable GAAP financial measure is homesites under option contracts as presented in the Company’s condensed consolidated balance sheets. 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. This non-GAAP measure is presented solely to permit investors to 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.

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 and second quarters of 2025.

Current wording

Includes (a) homesite under option contracts contributed by Lennar at Spin-Off and acquired from Rausch, less option earning deposits and other holdbacks, and (b) takedown, land acquisition and development funding activity through December 31, 2025.

Previous 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.

Current wording

Reduction in investment balance for the three months ended March 31, 2026 from (a) homesite takedowns pursuant to option agreements, net of deposit credits adjusted for non-option earning deposits, and (b) repayment of development loans.

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 quarter.

Current wording

Calculated by multiplying Invested Capital balance at end of period by weighted average yield as of March 31, 2026, adjusted for the number of days in the first quarter 2026.

Previous 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.

Current wording

During the three months ended March 31, 2026, we funded $524.3 million for land acquisition and development and received $652.9 million in net takedown proceeds under the Master Program Agreement at a weighted average yield of 8.5%. We funded $464.6 million for land acquisition and development and received $99.4 million in net takedown proceeds for Other Agreements during this period at a weighted average yield of 10.7%. On a total portfolio basis, the weighted average yield was 9.2% as of March 31, 2026.

Previous 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.

Current wording

As of March 31, 2026, our homesite assets consisted of 904 properties (also known as communities) in 30 states across the United States, totaling approximately 143,347 homesites, with an approximate aggregate value of $9.2 billion of homesites under option contracts. Of the homesites owned as of March 31, 2026, we expect the total takedown prices of all homesites to be approximately $16.2 billion, and the total estimated development costs of homesites to be approximately $7.2 billion.

Previous 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).

Current wording

As of March 31, 2026, our property assets are collectively located across 30 U.S. states. Approximately 51% of the property assets are concentrated in three states (California, Florida, Texas) and approximately 42% are located in two strong housing market states: Florida 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 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:

Current wording

The below table shows the location, number of properties, number of underlying homesites and expected total takedown prices of our properties as of March 31, 2026:

Previous wording

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

Current wording

The below table is a summary of our pools of properties included in our property assets as of March 31, 2026 (dollar amounts are presented in billions):

Previous 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.

Current wording

Homesites under option contracts and gross development loans receivables, less deposits, deferred tax liability, interest receivable on development loans, homesites under option contracts acquired through purchase money mortgages, and other holdbacks on post-spin acquired assets.

Previous wording

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

Current wording

The following is a summary of the key components of our operations for the three months ended March 31, 2026:

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 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.

Current wording

Operating Expenses: Our operating expenses after the Spin-Off include Management Fees (as defined below) 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 personnel are employed by the Manager or an affiliate of the Manager, and their salaries are paid by the Manager or its affiliate, as applicable; 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 fiscal year ended December 31, 2025. The Company records the RSU award costs on a straight-line basis over the RSU vesting period as stock-based compensation in operating expenses. The Company also records a provision for credit losses in accordance with ASC 326 Financial Instruments – Credit Losses.

Previous wording

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

Current wording

For the three months ended March 31, 2025, our operating expenses included an allocation of salaries, general, and administrative expenses for the Predecessor Millrose Business prior to the Spin-Off for the period of January 1, 2025 through February 7, 2025. These expenses have been allocated from Lennar based on a reasonable proportional cost allocation method primarily based directly on headcount, usage, or other allocation methods depending on the nature of the services. The allocation was 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. Sales, general, and administrative expenses from pre-spin period were $25.0 million for the period of January 1, 2025 through February 7, 2025.

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 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.

Current wording

Other Income and Expenses: We record interest income earned on our cash balances held with financial institutions 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 debt obligations, and (ii) other expenses which may include rating agency fees, legal fees, audit fees, and bank fees.

Previous 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.

Current wording

The following discussion describes the results of operations for the three months ended March 31, 2026 versus the three months ended March 31, 2025. The financial data for the three months ended March 31, 2025 includes the combined results of operations for the Predecessor Millrose Business prior to the Spin-Off. We have a single operating and reportable segment in accordance with GAAP and our operations are conducted in the United States.

Previous 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.

Current wording

Stock-based compensation expense related to RSUs granted to the Board was $0.7 million for the three months ended March 31, 2026. For the three months ended March 31, 2025, there was no stock-based compensation for RSUs, and there was no stock-based compensation expenses allocated to the Predecessor Millrose Business prior to the Spin-Off.

Previous 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.

Current wording

Sales, general and administrative expenses from pre-Spin-Off periods were $25.0 million for the three months ended March 31, 2025. There were no sales, general and administrative expenses recorded during the first quarter of 2026.

Previous 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.

Current wording

Other income (expense) was a net expense of $38.2 million for the three months ended March 31, 2026, compared to a net expense of $1.4 million for the three months ended March 31, 2025. Other income and expense for the three months ended March 31, 2026 includes (i) interest expense for the Credit Agreement (including interest incurred under the Company’s prior revolving credit facility before March 25, 2026) and Senior Notes (as defined below) of $39.2 million, and (ii) other expenses of $0.1 million, which was partially offset by interest income of $1.1 million earned on cash balances held in the Company’s operating bank accounts. Other income (expense) for the three months ended March 31, 2025 consisted of interest expense of $2.5 million for the Revolving Credit Facility, partially offset by interest income of $1.1 million related to cash balances.

Previous 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.

Current wording

The provision for income taxes for the three months ended March 31, 2026 was $5.0 million, compared to $4.4 million for the three months ended March 31, 2025. The increase is due to higher net income as compared to the prior year period. The tax provision for the three months ended March 31, 2026, as determined and calculated from the activities in our TRSs, resulted in an overall effective tax rate of 24.9%, compared to 24.8% for the three months ended March 31, 2025. See Note 10. Income Taxes in the 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

Current wording

We calculate AFFO by starting with Nareit’s definition of funds from operations (“FFO”), which is the net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate depreciation, as applicable. During this period, there were 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 tables below, certain non-recurring and non-cash transactions added back for the three months ended March 31, 2026 and 2025 include non-cash components of compensation expense and amortization of financing and issuance costs for our Credit Agreement (including issuance costs incurred under the Company’s prior revolving credit facility before March 25, 2026) and Senior Notes.

Previous wording

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

Current wording

The table below is a reconciliation of GAAP net income to AFFO and GAAP earnings per share to AFFO earnings per share for the three months ended March 31, 2026 and 2025:

Previous 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.

Current wording

Reflected in interest expense in the consolidated statements of operations. See Note 8. Debt Obligations in the 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 in the unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

Current wording

RSUs granted to each member of the Board under the Millrose Properties, Inc. 2024 Omnibus Incentive Plan. See Note 12. Stock-Based Compensation Expense in the condensed consolidated financial statements included elsewhere in this Form 10-Q.

Previous 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.

Current wording

As of March 31, 2026, we had $49.3 million cash on hand and approximately $910 million capacity under our Revolving Credit Facility and $500 million capacity under our DDTL Credit Facility. Our primary sources of liquidity are cash flows from operations and debt financing under our Revolving Credit Facility of $1.335 billion, our DDTL Credit Facility of $500 million, and our Senior Notes of $2.0 billion. We believe that our existing cash on hand, cash generated from operations and available capacity under the Revolving Credit Facility and DDTL Credit Facility will be sufficient to meet our liquidity needs in the short and long term. In the future, we may seek to further raise capital or engage in other forms of borrowings in order to fund future investments or to refinance existing indebtedness. 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 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.

Current wording

Our cash flows for the three months ended March 31, 2026 and 2025 were as follows:

Previous wording

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

Current wording

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 the 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% lower than the applicable margin for Adjusted Term SOFR Rate loans set forth above, in each case, based upon the Leverage Ratio.

Previous wording

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

Current wording

The Credit Agreement includes affirmative and negative covenants applicable to the Company and its subsidiaries, including, without limitation, covenants regarding indebtedness, liens, dividends and other restricted payments, investments, asset sales, transactions with affiliates, negative pledges, 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 its status as a REIT.

Previous wording

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

Current wording

On August 7, 2025, the Company issued $1.25 billion aggregate principal amount of its 6.375% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes were issued at par value. The Company received net proceeds of approximately $1.23 billion, after deducting the initial purchasers’ discounts and commissions and offering expenses.

Previous wording

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

Current wording

The 2030 Notes were issued pursuant to the 2030 Notes Indenture, among the Company, the subsidiary guarantors from time to time party thereto and Citibank, N.A., as trustee. The 2030 Notes are fully and unconditionally guaranteed on a senior unsecured basis by SPE LLC and MPSAB.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The 2030 Notes mature on August 1, 2030, and interest is payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2026.

Previous wording

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

Current wording

The 2030 Notes Indenture includes certain restrictive covenants that limit the Company’s and certain of its subsidiaries’ ability to, among other things: (i) create certain liens, (ii) engage in certain sale and leaseback transactions, and (iii) effect certain mergers or consolidations, or sell all or substantially all of its assets. These covenants are subject to a number of important qualifications and exceptions as set forth in the 2030 Notes Indenture. Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the 2030 Notes Indenture), the Company must offer to repurchase all of the 2030 Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The 2030 Notes Indenture also provides for customary events of default.

Previous wording

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

Current wording

On September 11, 2025, the Company issued $750 million aggregate principal amount of its 6.250% Senior Notes due 2032 (the “2032 Notes”, together with the 2030 Notes, the “Senior Notes”). The 2032 Notes were issued at par value. The Company received net proceeds of approximately $737.5 million, after deducting the initial purchasers’ discounts and commissions and offering expenses.

Previous wording

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

Current wording

The 2032 Notes mature on September 15, 2032, and interest is payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2026.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

The 2032 Notes Indenture includes certain restrictive covenants that limit the Company’s and certain of its subsidiaries’ ability to, among other things: (i) create certain liens (ii) engage in certain sale and leaseback transactions, and (iii) effect certain mergers or consolidations, or sell all or substantially all of its assets. These covenants are subject to a number of important qualifications and exceptions as set forth in the 2032 Notes Indenture. Additionally, upon the occurrence of a Change of Control Triggering Event (as defined in the 2032 Notes Indenture), the Company must offer to repurchase all of the 2032 Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The 2032 Notes Indenture also provides for customary events of default.

Previous wording

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

Current wording

In addition to the Credit Agreement and Senior Notes, Millrose may seek to pursue other debt and expects to have access to a certain amount of debt and equity capital at least a portion of which is intended to be available for use in financing transactions with new counterparties. Millrose may also seek additional third-party financing to satisfy any additional capital needs or raise capital through equity and debt issuances into the market. Additionally, any third-party financing arrangements Millrose enters into may not cause its debt to equity ratio to exceed 1:1 (the “Debt to Equity Ratio Limit”) unless Millrose obtains the prior approval of Lennar.

Previous wording

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

Current wording

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