Millrose Properties, Inc.

Previous 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.

Current wording

Calculated by multiplying Invested Capital balance at end of period by weighted average yield as of June 30, 2026, adjusted for the number of days in the second quarter 2026.

Previous 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.

Current wording

During the three months ended June 30, 2026, we funded $566 million for land acquisition and development and received $590 million in net takedown proceeds under the Master Program Agreement at a weighted average yield of 8.5%. We funded $555 million for land acquisition and development and received $438 million in net takedown proceeds for Other Agreements during this period at a weighted average yield of 10.6%. On a total portfolio basis, the weighted average yield was 9.2% as of June 30, 2026.

Previous 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.

Current wording

As of June 30, 2026, our homesite assets consisted of 877 properties (also known as communities) in 30 states across the United States, totaling approximately 143,771 homesites, with an approximate aggregate value of $9.6 billion of homesites under option contracts. Of the homesites owned as of June 30, 2026, we expect the total takedown prices of all homesites to be approximately $16.3 billion, and the total estimated development costs of homesites to be approximately $6.9 billion.

Previous wording

As of March 31, 2026, we had 143,347 homesites with 17 counterparties, which were included in 69 separate pools, in accordance with the applicable Multiparty Cross Agreements. As of March 31, 2026, 95% of our invested capital balance was pooled under pooling arrangements, of which 100% was pooled under the Master Program Agreement.

Current wording

As of June 30, 2026, we had 143,771 homesites with 19 counterparties, which were included in 73 separate pools, in accordance with the applicable Multiparty Cross Agreements. As of June 30, 2026, 95% of our invested capital balance was pooled under pooling arrangements, of which 100% was pooled under the Master Program Agreement.

Previous wording

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

Current wording

The following is a summary of the key components of our operations for the three and six months ended June 30, 2026:

Previous 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.

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 through the quarter ended June 30, 2026. 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 (benefit from) credit losses in accordance with ASC 326 Financial Instruments – Credit Losses.

Previous 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.

Current wording

For the three and six months ended June 30, 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 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.

Current wording

Other Income (Expense): 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 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.

Current wording

The following discussion describes the results of operations for the three and six months ended June 30, 2026 versus the three and six months ended June 30, 2025. The financial data for the six months ended June 30, 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

Our net income was $122.9 million for the three months ended March 31, 2026, compared to $39.8 million for the three months ended March 31, 2025. The increase in net income was primarily driven by higher revenues in the current-year period, reflecting (i) a full quarter of post Spin-Off operations compared to a partial post Spin-Off period in the prior-year period and (ii) continued growth in our business as a result of geographic expansion and counterparty diversification. Net income also benefited from lower operating expenses under our Management Fee structure versus the prior-year period which included the allocated costs of the Predecessor Millrose Business prior to the Spin-Off and the Management Fee for the period after the Spin-Off. These increases in net income were partially offset by higher net other expense and higher tax provision.

Current wording

Option fees revenues were $195.4 million for three months ended June 30, 2026, compared to $141.1 million for the three months ended June 30, 2025, reflecting continued growth in our business as a result of geographic expansion and counterparty diversification.

Previous 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.

Current wording

Stock-based compensation expense related to RSUs granted to the Board was $0.2 million for the three months ended June 30, 2026, compared to $0.2 million for the three months ended June 30, 2025.

Previous 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.

Current wording

The provision for income taxes for the three months ended June 30, 2026 was $2.5 million, compared to $4.8 million for the three months ended June 30, 2025. Income tax expense decreased compared to the prior-year period primarily due to changes in the allocation of taxable income among our TRSs resulting from updated market-based assumptions of certain intercompany financing arrangements. The tax provision for the three months ended June 30, 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 June 30, 2025. See Note 10. Income Taxes in the condensed consolidated financial statements for more information.

Previous wording

Option fees revenues were $185.3 million for three months ended March 31, 2026, compared to $80.1 million for the three months ended March 31, 2025. The increase in option fee revenues is due to a full quarter of operations compared to partial quarter operations post Spin-Off in the prior year period. In the prior-year period prior to the Spin-Off, the Predecessor Millrose Business did not generate option fee revenues because its inventories were not subject to purchase option contracts with homebuilders. The principal operating activities related to finished homesites were conducted by the Predecessor Millrose Business’s parent company, who sold those homesites to Lennar counterparties.

Current wording

Option fees revenues were $380.7 million for six months ended June 30, 2026, compared to $221.2 million for the six months ended June 30, 2025, reflecting (i) a full two quarters of post Spin-Off operations compared to a partial post Spin-Off period in the prior-year period, and (ii) continued growth in our business as a result of geographic expansion and counterparty diversification. In the prior-year period prior to the Spin-Off, the Predecessor Millrose Business did not generate option fee revenues because its inventories were not subject to purchase option contracts with homebuilders. The principal operating activities related to finished homesites were conducted by the Predecessor Millrose Business’s parent company, who sold those homesites to Lennar counterparties.

Previous wording

Development loan income for the three months ended March 31, 2026 was $9.6 million, compared to $2.6 million for the three months ended March 31, 2025. The increase in development loan income is due to (i) an increase in development loan agreements, and (ii) a full quarter of operations compared to partial quarter operations post Spin-Off in the prior year period. In the prior-year period prior to the Spin-Off, the Predecessor Millrose Business did not generate development loan income because it did not engage in principal operating activities related to development loans. The remaining increase in development loan income in the current-year period is due to higher development loan balances versus the prior-year period.

Current wording

Development loan income for the six months ended June 30, 2026 was $11.1 million, compared to $10.5 million for the six months ended June 30, 2025. The increase in development loan income is due to (i) an increase in development loan agreements, and (ii) a full quarter of operations compared to partial quarter operations post Spin-Off in the prior year period. In the prior-year period prior to the Spin-Off, the Predecessor Millrose Business did not generate development loan income because it did not engage in principal operating activities related to development loans. The remaining increase in development loan income in the current-year period is due to higher development loan balances versus the prior-year period.

Previous wording

Management Fee expense for the three months ended March 31, 2026 was $28.2 million, compared to $12.1 million for the three months ended March 31, 2025. Management Fee expense was higher due to (i) a full quarter of the Management Agreement being in effect in the current-year period compared to only the period following the Spin-Off in the prior-year period, and (ii) higher Tangible Assets as a result of higher homesites under option contracts in the current-year period versus the prior-year period.

Current wording

Management Fee expense for the six months ended June 30, 2026 was $58.1 million, compared to $34.1 million for the six months ended June 30, 2025. Management Fee expense was higher due to (i) a full quarter of the Management Agreement being in effect in the current-year period compared to only the period following the Spin-Off in the prior-year period, and (ii)

Previous 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.

Current wording

Sales, general and administrative expenses from pre-spin periods were $25.0 million for the six months ended June 30, 2025. For the six months ended June 30, 2025, the expenses were allocated by Lennar for the period from January 1, 2025 to the Spin-Off. There were no sales, general and administrative expenses recorded after the Spin-Off.

Previous 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.

Current wording

Other income (expense) was a net expense of $77.5 million for the six months ended June 30, 2026, compared to a net expense of $10.7 million for the six months ended June 30, 2025. Other income (expense) for the six months ended June 30, 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 of $79.2 million, and (ii) other expenses of $0.5 million, which was partially offset by interest income of $2.2 million earned on cash balances held in the Company’s operating bank accounts. Other income (expense) for the six months ended June 30, 2025 consisted of interest expense of $12.8 million for the Company’s debt obligations and, other expenses of $0.8 million, partially offset by interest income of $2.9 million related to cash balances.

Previous 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.

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 and six months ended June 30, 2026 and 2025 include non-cash components of compensation expense, 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, provision for (benefit from) credit loss expense, and non-recurring rating agency expenses related to the Spin-Off.

Previous 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.

Current wording

As of June 30, 2026, we had $34.2 million cash on hand and approximately $850 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 three months ended March 31, 2026 and 2025 were as follows:

Current wording

Our cash flows for the six months ended June 30, 2026 and 2025 were as follows:

Previous wording

Net cash from operating activities was $797.3 million for the three months ended March 31, 2026. Cash inflows included cash generated from takedowns of homesites under option contracts net of deposit credits, option fees from homesites under option contracts, interest paid-in-kind under our development loan agreements, and interest earned on cash held in our bank accounts for operating purposes. Cash outflows consisted of payments of the Management Fee, interest on debt obligations, and other operating expenses.

Current wording

Net cash from operating activities was $1.683 billion for the six months ended June 30, 2026. Cash inflows included cash generated from takedowns of homesites under option contracts net of deposit credits, option fees from homesites under option contracts, interest paid-in-kind under our development loan agreements, and interest earned on cash held in our bank accounts for operating purposes. Cash outflows consisted of payments of the Management Fee, interest on debt obligations, and other operating expenses.

Previous wording

Net cash from operating activities was $713.7 million for the three months ended March 31, 2025. Cash inflows included cash generated from takedowns of homesites under option contracts net of deposit credits, option fees from homesites under option contracts, interest paid-in-kind under our development loan agreements, interest earned on cash held in our bank accounts for operating purposes. Cash flows from operating activities also included the Predecessor Millrose Business pre-Spin-Off net loss of $25.0 million. Cash outflows consisted of payments of the Management Fee and interest on debt obligations.

Current wording

Net cash from operating activities was $1.610 billion for the six months ended June 30, 2025. Cash inflows included cash generated from takedowns of homesites under option contracts net of deposit credits, option fees from homesites under option contracts, interest paid-in-kind under our development loan agreements, and interest earned on cash held in our bank accounts for operating purposes. Cash flows from operating activities also included the Predecessor Millrose Business pre-Spin-Off net loss of $25.0 million. Cash outflows consisted of payments of the Management Fee and interest on debt obligations.

Previous wording

The increase in cash from operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by (i) a full quarter of post Spin-Off operating activities in the current-year period versus only a partial post Spin-Off period in the prior-year period, and (ii) higher cash generated from option fees and takedowns as a result of growth in homesites under option contracts. These increases were partially offset by (i) higher interest payments on debt obligations, and (ii) higher Management Fee payments due to higher Tangible Assets resulting from an increase in homesites under option contracts.

Current wording

The increase in cash from operating activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily driven by (i) higher cash generated from option fees as a result of growth in homesites under option contracts, and (ii) higher interest paid-in kind under our development loan agreements. These increases were partially offset by (i) higher interest payments on debt obligations, and (ii) higher Management Fee payments due to higher Tangible Assets resulting from an increase in homesites under option contracts.

Previous wording

Net cash used in investing activities was $962 million for the three months ended March 31, 2026. Investing cash outflows consisted of cash used to acquire homesites for our homesite option platform net of option deposits, and loans made to counterparties under our development loan agreements. These investing cash outflows were partially offset by principal payments received from counterparties under our development loan agreements.

Current wording

Net cash used in investing activities was $1.797 billion for the six months ended June 30, 2026. Investing cash outflows consisted of cash used to acquire homesites for our homesite option platform net of option deposits, and loans made to counterparties under our development loan agreements. These investing cash outflows were partially offset by principal payments received from counterparties under our development loan agreements.

Previous wording

Net cash used in investing activities was $1.299 billion for the three months ended March 31, 2025. Investing cash outflows consisted of cash paid to acquire the Rausch homesites, cash used to acquire homesites for our homesite option platform net of option deposits, and loans made to counterparties under our development loan agreements. These investing cash outflows were partially offset by option deposit payments received related to the inventory contributed by Lennar at the Spin-Off and principal payments received from counterparties under our development loan agreements.

Current wording

Net cash used in investing activities was $2.813 billion for the six months ended June 30, 2025. Investing cash outflows consisted of cash paid to acquire the Rausch homesites, cash used to acquire homesites net of option deposits, and loans made to counterparties under our development loan agreements. These investing cash outflows were partially offset by option deposit payments received related to the inventory contributed by Lennar at the Spin-Off and principal payments received from counterparties under our development loan agreements.

Previous wording

The decrease in cash used in investing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by (i) the Rausch Transaction in the prior-year period, and (ii) a decrease in development loans made to counterparties. These decreases were partially offset by investments in homesites under option contracts reflecting our strategy to grow our homesite option platform resulting in the higher acquisitions of homesites under option contracts, and higher paydowns of development loans.

Current wording

The lower cash used in investing activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily driven by the Rausch Transaction in the prior-year period, lower development loans funded to counterparties, lower investments in homesites under option contracts, and higher principal payments received from counterparties under our development loan agreements, including the $284 million payoff of a development loan on April 1, 2026. These decreases were partially offset by option deposit payments received related to inventory contributed by Lennar in connection with the Spin-Off during the prior-year period.

Previous wording

Net cash from financing activities was $178.9 million for the three months ended March 31, 2026. Financing cash inflows consisted of proceeds received under the Revolving Credit Facility (including proceeds under the Company’s prior revolving credit facility before March 25, 2026). These financing cash inflows were partially offset by financing costs related to our DDTL Credit Facility, principal repayments of the Revolving Credit Facility, and dividends paid to our stockholders.

Current wording

Net cash from financing activities was $112.7 million for the six months ended June 30, 2026. Financing cash inflows consisted of proceeds received under the Revolving Credit Facility (including proceeds under the Company’s prior revolving credit facility before March 25, 2026). These financing cash inflows were partially offset by financing costs related to our DDTL Credit Facility, principal repayments of the Revolving Credit Facility, dividends paid to our stockholders, and dividend equivalent rights paid to our stockholders.

Previous wording

Net cash from financing activities was $674.4 million for the three months ended March 31, 2025. Financing cash inflows consisted of cash contributed by Lennar at the Spin-Off and proceeds received from our debt obligations related to the Revolving Credit Facility. These financing cash inflows were partially offset by deal costs related to the Spin-Off, financing costs related to the Revolving Credit Facility, principal repayments of the Revolving Credit Facility, dividends paid to our stockholders, and payments on a seller note related to a community acquired from Lennar.

Current wording

Net cash from financing activities was $1.269 billion for the six months ended June 30, 2025. Financing cash inflows consisted of cash contributed by Lennar at the Spin-Off and proceeds received from our debt obligations related to the Revolving Credit Facility. These financing cash inflows were partially offset by deal costs related to the Spin-Off, financing costs related to the Company’s debt obligations, principal repayments of the Company’s debt obligations, dividends paid to our stockholders, and payments on a seller note related to a community acquired from Lennar.

Previous wording

The decrease in net cash from financing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by (i) lower proceeds from the Revolving Credit Facility as compared to the prior-year period (ii) dividends paid to stockholders, (iii) higher debt financing and issuance costs, and (iv) the prior-period cash contribution from Lennar. These cash flow decreases were partially offset by lower repayments of the Revolving Credit Facility as compared to the prior-year period.

Current wording

The decrease in net cash from financing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by (i) lower proceeds from the Company’s debt borrowings as compared to the prior-year period, (ii) higher dividends paid to stockholders, and (iii) the prior-year period cash contribution from Lennar. These cash flow decreases were partially offset primarily by (i) lower repayments of the Company’s debt obligations as compared to the prior-year period, (ii) prior-year period deal costs related to the Spin-Off, and (iii) prior-year period payment of the seller note.

Previous wording

On January 15, 2026, the Company paid a dividend of $0.75 to holders of our Class A common stock and our Class B common stock as of the close of business on January 5, 2026, as declared by the Board on December 22, 2025. On March 23, 2026, the Company declared a dividend of $0.76 to Class A common stockholders and Class B common stockholders of record as of the close of business April 3, 2026. This dividend was paid on April 15, 2026.

Current wording

On January 15, 2026, the Company paid a dividend of $0.75 to holders of our Class A common stock and our Class B common stock as of the close of business on January 5, 2026, as declared by the Board on December 22, 2025. On April 15, 2026, the Company paid a dividend of $0.76 to holders of our Class A common stock and our Class B common stock as of the close of business on April 3, 2026, as declared by the Board on March 23, 2026. On June 23, 2026, the Company declared a dividend of $0.77 to Class A common stockholders and Class B common stockholders of record as of the close of business July 6, 2026. This dividend was paid on July 15, 2026.

Previous wording

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code and expect to qualify as a REIT when we file a REIT tax election with our federal income tax return for the taxable year ended December 31, 2025. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our “REIT taxable income,” as defined by the Code, to our stockholders. Taxable income from certain non-REIT qualifying activities is derived through our TRSs and is subject to applicable U.S. federal, state, and local income and franchise taxes. For the three months ended March 31, 2026 and 2025, we recorded consolidated income tax expense of $5.0 million and $4.4 million, respectively, which was attributable to our TRSs.

Current wording

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code and expect to qualify as a REIT when we file a REIT tax election with our federal income tax return for the taxable year ended December 31, 2025. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our “REIT taxable income,” as defined by the Code, to our stockholders. Taxable income from certain non-REIT qualifying activities is derived through our TRSs and is subject to applicable U.S. federal, state, and local income and franchise taxes. During the three and six months ended June 30, 2026, we recorded consolidated income tax expense of $2.5 million and

Previous wording

We evaluate our homesite option contracts at inception to determine if they contain a lease as defined under ASC 842. Determining whether these option agreements should be accounted for under ASC 842 required management to apply significant judgment, including assumptions about whether the homebuilders (i) obtain substantially all of the economic benefits from use of the asset and (ii) have elements of control of the optioned assets. Changes in these assumptions could significantly affect the timing of revenue recognition in the Company’s consolidated financial statements. The Company's option contracts with its counterparties grant the counterparties the exclusive right to acquire homesites owned by the Company at predetermined prices and takedown schedules. Although the Company retains legal title to the land during the option agreement term, the counterparties obtain substantive rights to direct the planning, use, and development of the homesites.

Current wording

We evaluate our homesite option contracts at inception to determine if they contain a lease as defined under ASC 842. Determining whether these option agreements should be accounted for under ASC 842 required management to apply significant judgment, including assumptions about whether the homebuilders (i) obtain substantially all of the economic benefits from use of the asset and (ii) have elements of control of the optioned assets. Changes in these assumptions could significantly affect the timing of revenue recognition in the Company’s condensed consolidated financial statements. The Company's option contracts with its counterparties grant the counterparties the exclusive right to acquire homesites owned by the Company at predetermined prices and takedown schedules. Although the Company retains legal title to the land during the option agreement term, the counterparties obtain substantive rights to direct the planning, use, and development of the homesites.

Previous wording

Homesites under option contracts consist of land and related development costs associated with homesites subject to option contracts. The carrying value of homesites under option contracts is recorded based on the Company's capital funded under the option contracts, which includes the land acquisition costs, qualifying development costs and other directly attributable costs incurred on the underlying land. When a counterparty completes a takedown and homesites are transferred in accordance with the option contract, the Company derecognizes the related carrying amount from the balance sheet.

Current wording

Homesites under option contracts consist of land and related development costs associated with homesites subject to option contracts. The carrying value of homesites under option contracts is recorded based on the Company's capital funded under the option contracts, which includes the land acquisition costs, qualifying development costs and other directly attributable costs incurred on the underlying land. When a counterparty completes a takedown and homesites are transferred in accordance with the option contract, the Company derecognizes the related carrying amount from the condensed consolidated balance sheets.

Previous wording

The allowance for credit losses is a critical accounting estimate because it requires significant judgment in determining the annual charge-off rate, expected cash flows, and the qualitative adjustments applied to reflect current conditions and forward-looking information. These judgments are informed by ongoing monitoring of borrower and project performance and broader market conditions affecting residential development activity. Changes in borrower performance, collateral values, expected cash flows, portfolio composition, or macroeconomic conditions could result in changes to the allowance for credit losses and the provision for credit losses in future periods.

Current wording

The allowance for credit losses is a critical accounting estimate because it requires significant judgment in determining the annual charge-off rate, expected cash flows, and the qualitative adjustments applied to reflect current conditions and forward-looking information. These judgments are informed by ongoing monitoring of borrower and project performance and broader market conditions affecting residential development activity. Changes in borrower performance, collateral values, expected cash flows, portfolio composition, or macroeconomic conditions could result in changes to the allowance for credit losses and the provision for (benefit from) credit losses in future periods.