Millrose Properties, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Note 1. Description of Business

Millrose Properties, Inc. (“Millrose” and, together with its subsidiaries, the “Company”) is a corporation incorporated under the laws of the State of Maryland on March 19, 2024 and later spun-off (the “Spin-Off”) by Lennar Corporation (“Lennar”) to create an independent, publicly traded company. The Spin-Off was completed on February 7, 2025, at which time Millrose’s Class A common stock was listed on the New York Stock Exchange under the symbol “MRP”.

Prior to the Spin-Off, the operations and financial information that represent the business assets that were spun off to Millrose were wholly owned by and under the common control of Lennar and are collectively referred to as the “Predecessor Millrose Business”. After the Spin-Off, Millrose is an independent company that is externally managed and advised by Kennedy Lewis Land and Residential Advisors LLC (“KL” or the “Manager”), pursuant to a management agreement between Millrose and KL entered into on February 7, 2025 (as amended from time to time, the “Management Agreement”).

The Company purchases and develops residential land and sells finished homesites to homebuilders by way of option contracts with predetermined costs and takedown schedules. The Company serves as a solution for homebuilders seeking to expand access to finished homesites while implementing an asset-light strategy. The Company’s option contracts provide for the payment of recurring cash option fees in exchange for granting counterparties the right to purchase land that Millrose owns during the development period at predetermined prices and takedown schedules. As Millrose sells fully developed homesites, capital is recycled into future land acquisitions for homebuilders, providing counterparties with durable access to community growth. To a lesser extent, the Company also provides development loans secured by property intended for residential use and owns a portfolio of single-family residential rental properties.

The Company has elected to be treated as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2025. Millrose is a holding company whose operations are conducted primarily through MPH Parent, LLC (“MPH Parent”), a Delaware limited liability company and a wholly owned operating subsidiary of Millrose, and other subsidiaries, including Millrose Properties Holdings, LLC (“Millrose Holdings”), a Delaware limited liability company and a wholly owned operating subsidiary of MPH Parent, and MRP Liberty, LLC (“MRP Liberty”), a Delaware limited liability company and a wholly owned operating subsidiary of Millrose through which the Company conducts its residential rental activities. Millrose and MPH Parent made a joint election to treat MPH Parent as a taxable REIT subsidiary (“TRS”) of Millrose. Accordingly, MPH Parent is subject to entity-level taxation in connection with its business operations. Similarly, the Company’s other TRSs are taxable business entities.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial statements. Accordingly, certain footnotes or other financial information normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Form 10-K for the year ended December 31, 2025.

The comparative information for the nine months ended September 30, 2025 includes results of the Predecessor Millrose Business prior to the Spin-Off completed on February 7, 2025. Amounts presented for the Predecessor Millrose Business have been derived from the accounting records of Lennar and prepared under the legal-entity carve-out method, as described in the Company’s Form 10-K for the year ended December 31, 2025. The condensed consolidated financial statements after the Spin-Off include the accounts of Millrose and its subsidiaries, including Millrose Holdings and other subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Subsequent to the issuance of the Company’s Form 10-Q for the third quarter 2025, the Company corrected its previously issued Statements of Cash Flows presentation for the Sale of homesites under option contracts and other related assets. As a result, the Company has revised the prior-year comparative information presented herein to capture the impact to the nine months ended September 30, 2025. The cash flows provided by operating activities have been increased and net cash provided by investing activities have been decreased by $2.3 billion, respectively. Management believes that the amounts are immaterial to its previously issued condensed consolidated financial statements.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The allowance for credit losses on development loan receivables and homesites under option contracts is a critical accounting estimate developed using a weighted average remaining maturity (“WARM”) methodology in accordance with ASC 326 Financial Instruments – Credit Losses. This methodology requires significant judgment in determining the annual charge-off rate, expected cash flows, and other qualitative adjustments. Additionally, determining whether option agreements should be accounted for under ASC 842 Leases requires the Company to apply significant judgment in evaluating the elements of control and economic benefits of the related assets.

The Company may acquire single-family residential properties which are accounted for as asset acquisitions. The allocation of the purchase price between land and building components is a critical accounting estimate developed through a purchase price allocation analysis that estimates the relative fair values of the acquired land and building assets. This estimate requires significant judgment in evaluating valuation assumptions and methodologies used to determine such relative fair values. The evaluation of single-family residential properties for impairment also requires judgment in assessing recoverability and, when necessary, estimating future cash flows and fair value.

The Company believes the estimates and assumptions underlying its condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2026. Actual results could differ from those estimates.

Segment Reporting

As of September 30, 2026, the Company operates as asingle operating and reportable segment in accordance with ASC 280, Segment Reporting. See Note 17. Segment Reporting for additional information.

Cash

The Company considers all investments with an original maturity of three months or less to be cash and cash equivalents. Cash is recorded at cost, which approximates its fair values due to the short maturity period. As of September 30, 2026, Cash was $64.5 millionand consisted of highly liquid deposit accounts. The Company heldno restricted cash or cash equivalents as of September 30, 2026.

Homesites Under Option Contracts

The Company enters into option agreements that grant homebuilders the right to direct the planning, use, and development of homesites subject to the option contracts. The Company evaluates its homesite option contracts at inception to determine if they contain a lease as defined under ASC 842. If the counterparty obtains substantially all of the economic benefits from use of the asset and has elements of control of the optioned assets, the Company accounts for homesites under option contracts in accordance with ASC 842. If the purchase options are reasonably certain of being exercised, the Company accounts for option fee contracts as sales-type leases under ASC 842.

Homesites under option contracts are 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. Option fee income is recognized over the term of the contract using an effective interest yield, which represents the effective interest component on the sales-type leases. Changes in monthly option fees due to reimbursable development costs, changes in takedown timing or volume, or other contractual adjustments are recognized prospectively through an updated effective interest yield over the term of the option contract. 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.

The Company evaluates the contractual right to receive future payments under option contracts for expected credit losses in accordance with ASC 326. The Company uses a WARM methodology, which applies an annual loss rate to the estimated remaining life of the related contract balance and is adjusted for expected cash flows and other qualitative factors which include the counterparties' payment performance, delinquencies or defaults since inception, historical charge off rates for residential housing, and cross-collateralization features across certain counterparty arrangements. The Company also considers the credit quality of its most significant counterparties.

See Note 4. Homesites Under Option Contracts for additional information.

The Company earns interest income on the outstanding loan balance of development loans secured by residential property. Development loan income is recorded in accordance with ASC 310 Receivables. The Company records the revenue on a monthly basis as the interest is earned. All interest earned is paid-in-kind (“PIK”).

For the three and nine months ended September 30, 2026, Development loan income was $1.5 million and $12.6 million, respectively.

Development Loan Receivables, net

Development loan receivables, net are accounted for in accordance with ASC 310, Receivables. These amounts include principal amounts due on development loans and the related interest receivable. Development loans are recorded at their amortized cost basis, representing the principal portion and capitalized PIK interest, net of principal payments and the allowance for credit losses.

The Company records an allowance for credit losses in accordance with ASC 326. The Company uses a WARM methodology which applies an annual charge-off rate to the estimated remaining life of development loans, adjusted for expected cash flows. The historical baseline is further adjusted for qualitative factors, including counterparties' consistent payment performance and broader market conditions affecting residential development activity. The Company includes accrued PIK interest in the amortized cost basis of the development loans for purposes of calculating the allowance for credit losses. As of September 30, 2026, the Company recorded an allowance for credit losses of $0.1 million in the condensed consolidated balance sheets as an estimate of potential future losses.

Preferred Instruments, Net

As of September 30, 2026, Preferred instruments, net consisted of the Company's purchase of a preferred instrument issued by Dream Finders Homes, Inc. (“Dream Finders”), as described in Note 6. Preferred Instruments, net. The instrument is accounted for as an equity security in accordance with ASC 321, Investments – Equity Securities. As the preferred instrument does not have a readily determinable fair value, the Company elected the measurement alternative under ASC 321 and measures the investment at cost, less impairment, if any, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer.

The preferred instrument is a perpetual security with no stated maturity date or mandatory redemption feature. Pursuant to the terms and conditions of the certificate of designations, Dream Finders may redeem the preferred instrument beginning on the third anniversary of issuance at specified redemption prices. The Company may also convert the preferred instrument into shares of Dream Finders common stock beginning on the sixth anniversary of issuance, subject to the terms of the certificate of designations. The preferred instrument also includes certain holder redemption and conversion rights upon the occurrence of specified events as defined in the certificate of designations.

Original issue discounts associated with preferred instruments are recorded as a reduction to the carrying value of the instrument and are accreted into Income from preferred instruments in the Company’s condensed consolidated statements of operations over the estimated life of the instrument which is the earliest redemption date to Dream Finders. Commitment fees received in connection with future funding obligations are initially recorded as deferred liabilities within Other liabilities in the Company’s condensed consolidated balance sheets and are recognized into Income from preferred instruments in the Company’s condensed consolidated statements of operations over the life of the instrument which is the earliest redemption date to Dream Finders.

Single-Family Residential Properties, net

Single-family residential properties, net consist of residential properties acquired by the Company for lease as rental properties, including properties that are substantially complete and properties undergoing activities necessary to prepare the properties for rental operations. Single-family residential properties, net are carried at cost, less accumulated depreciation.

The Company accounts for acquisitions of Single-family residential properties, net as asset acquisitions in accordance with ASC 805, Business Combinations. The properties are recorded at their purchase price, including acquisition costs and other directly attributable costs. The purchase price, including capitalized acquisition costs, is allocated to land and buildings based on their relative fair values at the acquisition date. Relative fair values are determined through a purchase price allocation analysis utilizing management's assumptions and, when applicable, third-party valuation specialists.

The Company capitalizes costs directly attributable to the acquisition of residential properties. The Company also capitalizes costs incurred to prepare acquired properties for rental, as well as interest and certain carrying costs incurred during the period prior to the property being substantially complete. When the properties are substantially complete, capitalization of such costs ceases and the costs of operations, including repairs and maintenance, are expensed as incurred. Expenditures that improve or extend the useful life of a property are capitalized.

Single-family residential properties that are not substantially complete are not depreciated. Depreciation commences when properties are substantially complete. Depreciation of single-family residential properties in operation is recognized on a straight-line basis over the estimated useful lives of the related assets. Land is not depreciated.

The Company reviews single-family residential properties for impairment in accordance with ASC 360, Property, Plant and Equipment, whenever events or changes in circumstances indicate that the carrying amount of a property may not be recoverable. If indicators of impairment exist, the Company compares the estimated undiscounted future cash flows expected to be generated by the property to the carrying amount of the property. If the carrying amount of a property is not recoverable, the Company recognizes an impairment charge to the extent the carrying amount exceeds the property’s estimated fair value.

See Note 7. Single-Family Residential Properties, net for additional information.

Builder Deposits

Builder deposits are option deposit payments received from counterparties under the Company’s option contracts. The Company records a liability for these deposits at the time of the counterparties’ deposit payments. When the counterparties exercise their purchase option and acquire the finished homesite, the builder deposits are applied to the total takedown price owed by the counterparty. The liability is reduced as takedown payments are made and when the corresponding homesites under option contracts are derecognized from the condensed consolidated balance sheets. If counterparties do not exercise their purchase options, the deposit is forfeited as per the terms of the option contracts and recorded as income by the Company. For the three and nine months ended September 30, 2026, there were no option agreements that were terminated, forfeited, or expired without exercise. Accordingly, no income related to forfeited deposits was recognized by the Company during such periods.

The following roll forward summarizes the change in builder deposits for the nine months ended September 30, 2026:

Debt Issuance and Financing Costs

The Company records debt issuance and financing costs in accordance with ASC 835 Interest.

Issuance costs for the DDTL Credit Facility (as defined below), Senior Notes (as defined below), and SFR Secured Credit Facility (as defined below) are recorded as a direct deduction of the carrying value of the debt liability and are classified in the related liability account on the Company’s condensed consolidated balance sheets. These costs are amortized to interest expense on a straight-line basis over the contractual life of the debt as it approximates the effective interest method. As of September 30, 2026, issuance costs recorded as a direct deduction of debt, net of accumulated amortization, were $40.0 million, of which $11.1 million related to the DDTL Credit Facility, $2.6 million related to the SFR Secured Credit Facility, and $26.3 million related to the Senior Notes.

Financing costs for the Revolving Credit Facility (as defined below) are classified as Other assets in the Company’s condensed consolidated balance sheets as the costs represent a future economic benefit which provides the Company access to capital over the contractual term. These costs are amortized to interest expense on a straight-line basis over the term of the Revolving Credit Facility as it approximates the effective interest method. As of September 30, 2026, financing costs recorded as Other assets, net of accumulated amortization, were $5.5 million.

For additional information, see Note 11. Debt.

Development Guarantee Holdback Liability

The Company recorded a holdback liability related to a site improvement guarantee (the “Site Improvement Guarantee Amount”) owed to Rausch Coleman Companies, LLC (“Rausch”) pursuant to terms of the transaction documents for the acquisition of the Rausch land assets by the Company (the “Transaction Documents”). The Site Improvement Guarantee Amount is due withinten business days of the date that is the later of (i) two years following February 10, 2025, and (ii) the date on which development of 50%of certain assets subject to the Transaction Documents (the “Guaranteed Assets”) has been completed. The amount to be paid to Rausch pursuant to the Transaction Documents is the Site Improvement Guarantee

Amount, less the aggregate amount by which actual development costs exceed the budgeted development costs for the Guaranteed Assets or such lesser amounts as may be designated in writing by Rausch. As of September 30, 2026 and December 31, 2025, the holdback liability was $100 million.

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

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

The Management Fee for the three months ended September 30, 2026 and 2025 was $30.3 million and $25.9 million, respectively. The Management Fee for the nine months ended September 30, 2026 and 2025 was $88.3 million and $60.0 million, respectively.

Property Operating and Maintenance Expenses

Certain operating and maintenance costs incurred in connection with the Company's single-family residential properties are capitalized as a component of Single-family residential properties, net until the related properties are available for lease. Thereafter, such costs are generally recognized as incurred and will be recorded as Property Operating and Maintenance Expenses in the Company’s condensed consolidated statements of operations.

See Note 7. Single-Family Residential Properties, net for additional information.

Stock-Based Compensation

On December 17, 2024, the Company’s sole stockholder at the time and its Board adopted the Millrose Properties, Inc. 2024 Omnibus Incentive Plan (the “2024 Incentive Plan”). The 2024 Incentive Plan authorizes the award of stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, and other stock-based awards to the Company’s employees, officers, directors, consultants and advisors. As of September 30, 2026, there were 44,320 underlying shares of Class A common stock associated with outstanding RSU awards under the 2024 Incentive Plan. As of September 30, 2026,11,531,269 shares of Class A common stock were available for issuance under the 2024 Incentive Plan.

In accordance with ASC 718 Compensation- Stock Compensation, the Company accounts for stock-based compensation based on the grant date fair value and amortizes the costs on a straight-line basis over the vesting terms as stock-based compensation expense and as additional paid-in capital. See Note 15. Stock-Based Compensation Expense for additional information.

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

Sales, general, and administrative expenses from pre-spin period are costs directly attributable to the Predecessor Millrose Business prior to the Spin-Off, and include pre-Spin-Off operating and employee compensation costs for dedicated regional and divisional land teams tasked with acquiring and developing the homesites Lennar transferred to Millrose in the Spin-Off. For the nine months ended September 30, 2025, these expenses included an allocation for the period from January 1, 2025 through February 7, 2025 calculated as (i) the average daily expense allocated and recorded for the twelve months ended December 31, 2024, applied to (ii) days in the first quarter 2025 prior to the Spin-Off. Sales, general, and administrative expenses from pre-spin period were $25.0 million for the period of January 1, 2025 through February 7, 2025.

Income Taxes

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

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

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

Millrose has elected for its wholly owned subsidiaries MPH Parent and Millrose Holdings as well as its indirectly wholly owned subsidiary RCH Holdings, Inc. to be treated as TRSs and may form or acquire other direct or indirect wholly owned subsidiaries that may also elect to be taxed as TRSs in the future. TRSs are subject to taxation at regular corporate income tax rates.

See Note 13. Income Taxes for additional information.

Other income (expense) consists of interest income earned on cash balances, income related to preferred instruments, interest expense on the Company's debt obligations, and other expense items.

Other income (expense) for the three months ended September 30, 2026 and 2025 was $45.6 million net expense and $41.9 million net expense, respectively. Other income (expense) for the three months ended September 30, 2026 consisted of interest expense of $47.1 million related to the Company’s debt obligations and other expenses of $0.5 million, partially offset by income from preferred instruments of $1.0 million and interest income of $1.0 million related to cash balances. Income from preferred instruments consisted of dividend income of $0.9 million, original issue discount accretion of $0.04 million and commitment fee amortization of $0.02 million. Other income (expense) for the three months ended September 30, 2025 consisted of interest expenseof $43.7 million for the Company’s debt obligations and, other expenses of $0.6 million, partially offset by interest income of $2.4 million related to cash balances.

Other income (expense) for the nine months ended September 30, 2026 and 2025 was $123.0 million net expense and $52.7 million net expense, respectively. Other income (expense) for the nine months ended September 30, 2026 consisted of interest expense of $126.3 million related to the Company’s debt obligations and other expenses of $1.0 million, partially offset by income from preferred instruments of $1.0 million and interest income of $3.3 million related to cash balances. Income from preferred instruments consisted of dividend income of $0.9 million, original issue discount accretion of $0.04 million and commitment fee amortization of $0.02 million. Other income (expense) for the nine months ended September 30, 2025 consisted of interest expenseof $56.6 million for the Company’s debt obligations, and other expenses of $1.5 million, partially offset by interest income of $5.4 million related to cash balances.

Fair Value Measurements

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

•

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

•

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

•

Level 3: Fair value using significant other unobservable inputs.

As of September 30, 2026, the Company did not measure any assets or liabilities at fair value on a recurring or nonrecurring basis.

Other liabilities approximate their fair value due to their short-term nature. The Revolving Credit Facility, DDTL Credit Facility, and SFR Secured Credit Facility bear interest at variable rates that reset periodically; and therefore, approximate fair value.

The estimated fair value of the Company's Senior Notes are classified within Level 1 of the fair value hierarchy because it is based on quoted market prices for identical securities in active markets. The carrying value and estimated fair value of the Senior Notes as of September 30, 2026 were as follows:

Recent Accounting Standards

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”), which requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company has elected not to early adopt and is currently evaluating the potential impact of ASU 2024-03 on its financial statements and disclosures.

In November 2025, the FASB issued ASU 2025‑08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans (“ASU 2025‑08”), which amends accounting for certain acquired loans. ASU 2025‑08 expands the “gross‑up” method under ASC 326, previously limited to purchased credit-deteriorated (“PCD”) assets, to include certain purchased seasoned loans, eliminating Day 1 credit loss expense and aligning the treatment with that of PCD assets. The update is effective for interim and annual reporting periods beginning after December 15, 2026, with prospective application; early adoption is permitted. The Company is currently evaluating the potential impact of ASU 2025‑08 on its financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). The amendments clarify scope and presentation guidance in Topic 270, consolidate interim disclosures, and introduce a requirement to disclose events since the end of the most recent annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company does not expect adoption to have a material impact on its financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025‑12”), which provides technical corrections, clarifications, and minor improvements to the FASB Accounting Standards Codification without introducing major changes to accounting practice. Among other items, ASU 2025-12 clarifies that lease receivables from sales-type leases are excluded from the enhanced disclosures required by ASU 2022-02-Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2025-12 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company does not expect adoption to have a material impact on its financial statements and disclosures.

Note 3. Business Transactions

Credit Agreement

On March 25, 2026, the Company amended and restated its credit facility with JPMorgan Chase Bank, N.A. serving as administrative agent for the lenders party thereto. The Credit Agreement (as defined below) includes a new $500 million delayed draw term loan and a $1.335 billion revolving credit facility, on an unsecured basis, replacing the previously secured revolving credit facility. Upon the Effective Date (as defined below), the liens securing the loans under the Company’s prior secured revolving credit facility were released. See Note 11. Debt for further description of the Credit Agreement.

On August 5, 2026, the Company entered into Amendment No. 1 to the Credit Agreement. The Credit Agreement was amended pursuant to Amendment No.1 to, among other things, reduce the rate at which the loans bear interest by 0.25% per annum. See Note 11. Debt for further description of Amendment No. 1 to the Credit Agreement.

Funding for Dream Finders’ Acquisition of Beazer Homes

During the third quarter of 2026, the Company provided acquisition funding of $170.6 million tosupport Dream Finders’ acquisition of Beazer Homes USA, Inc. (“Beazer Homes”). The funding was provided through the purchase of a preferred instrument issued by Dream Finders.

See Note 6. Preferred Instruments, net and Note 18. Subsequent Events for additional information.

Residential Rental Properties

During the third quarter of 2026, the Company acquired 1,233 single-family residential rental properties from Lennar for approximately $333 million, inclusive of acquisition costs and capitalized property costs, which was financed with borrowings of approximately $213 million under the SFR Secured Credit Facility and cash on hand. The Company has engaged a third-party service provider to support property management, real estate development, and asset management activities for these properties.

See Note 7. Single-Family Residential Properties, net for further description.

On September 30, 2026, certain subsidiaries of the Company entered into a credit agreement (the “SFR Secured Credit Facility”) with Goldman Sachs Bank USA, as administrative agent and initial lender. The SFR Secured Credit Facility provides for a revolving credit facility with commitments in an aggregate amount of up to $235.0 million. Lenders may agree to (a) increase the aggregate commitments up to $1.0 billion, or (b) make advances in excess of the committed amount but not to exceed a total outstanding balance of $1.0 billion. As of September 30, 2026, the Company had $213.1 million of outstanding borrowings under the SFR Secured Credit Facility.

See Note 11. Debt for additional information.

On September 22, 2026, the Company announced a private offering (the “October 2026 Offering”) of $1.0 billion aggregate principal amount of senior notes in two separate tranches, one consisting of $500.0 million aggregate principal amount of 6.500% senior notes due 2029 (the “2029 Notes”) and the other consisting of $500.0 million aggregate principal amount of 6.750% senior notes due 2031 (the “2031 Notes” and, together with the 2029 Notes, the “2026 Senior Notes”), which closed on October 6, 2026. The Company received the net proceeds from the October 2026 Offering upon the closing of the offering on October 6, 2026.

See Note 18. Subsequent Events for additional information.

Note 4. Homesites Under Option Contracts

The Company's option contracts with its counterparties are accounted for under ASC 842 because the Company transfers elements of control of the homesites to the counterparties during the option contract period. Revenues earned from homesites under option contracts are recorded as Option fee revenues in the Company's condensed consolidated statements of operations.

The option agreements grant 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. The Company has therefore determined that these arrangements are accounted for under ASC 842. Because the Company considers the counterparties’ purchase options to be reasonably certain of exercise, the option contracts are accounted for as sales‑type leases under ASC 842.

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.

The Company did not recognize selling profit or loss upon commencement of its option contracts because the carrying amount of the underlying homesites approximated consideration allocated to those assets in accordance with ASC 842. For the three months ended September 30, 2026 and 2025, the Company recognized total Option fee revenues related to these option contracts of $209.5 million and $170.3 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recognized total Option fee revenues related to these option contracts of $590.2 million and $391.5 million, respectively. The total amount recognized as option fee revenues represents the effective interest component associated with its net investment in sales-type leases. The aggregate homesites under option contract was $9.9 billion as of September 30, 2026 as compared to $8.9 billion as of December 31, 2025.

Because the Company's option contracts are accounted for as sales-type leases, the resulting asset, representing the Company's right to receive future takedown payments and option fees, is considered a contractual right to receive cash. Therefore, the Company evaluates expected credit losses for homesites subject to option contracts in accordance with ASC 326. Expected credit losses are estimated using a WARM methodology, which applies an annual loss rate to the estimated remaining life of the related contract balance and is adjusted for expected cash flows and relevant qualitative factors. Qualitative considerations include the counterparties' consistent payment performance, the absence of delinquencies or defaults since inception, non-refundable option deposits and contractual termination fees, and cross-collateralization features across certain counterparty arrangements. The Company also considers the credit quality of its most significant counterparties. After considering these factors, the Company determined that the risk of loss was immaterial as of September 30, 2026.

The change in Homesites under option contracts from December 31, 2025 through September 30, 2026 is as follows:

(1)

Investments include land acquisitions of $1.4 billion and development costs of $1.9 billion during the nine months ended September 30, 2026.

Counterparties pay monthly option fees, which may vary over time due to additional capital invested in development, reimbursable costs, takedown timing and volume, or other contractual adjustments. These changes are recognized prospectively through an updated effective interest yield. The Company recognizes option fee revenues from these arrangements using an effective interest yield over the term of the option contract, which represents the effective interest component on sales-type leases.

Note 5. Development Loan Receivables, net

Development loan receivables as of September 30, 2026 and December 31, 2025 were as follows:

The following table summarizes the activity in the Company's Development loan receivables, net and the associated allowance for credit losses, which represents the Company's valuation account for these financial assets, for the nine months ended September 30, 2026:

(1)

Includes payoff of $284.2 million on April 1, 2026 related to a development loan with an unaffiliated third party.

(2)

Includes $0.9 million reduction to the Company’s allowance for credit losses related to the payoff of a development loan with an unaffiliated third party.

Note 6. Preferred Instruments, net

On September 14, 2026, the Company entered into an agreement with Dream Finders to purchase a preferred instrument in two closings in connection with Dream Finders' acquisition of Beazer Homes. At the initial closing on September 14, 2026, the Company purchased a preferred instrument for $170.6 million, net of a $4.4 million original issue discount. The preferred instrument provides for cumulative dividends at a rate of 12.0% per annum, payable quarterly in arrears.

On October 20, 2026, upon the completion of Dream Finders' acquisition of Beazer Homes, the Company completed the second closing and purchased an additional preferred instrument for $316.9 million, net of original issue discount. See Note 18. Subsequent Events for additional information.

For the three and nine months ended September 30, 2026, the Company recognized approximately $0.045 million of original issue discount accretion related to the preferred instrument, which was recorded within Income from preferred instruments in the condensed consolidated statements of operations.

Preferred instruments, net as of September 30, 2026 and December 31, 2025 were as follows:

(1)

Preferred instruments consist of a preferred instrument issued by Dream Finders.

(2)

Original issue discount, net of accretion includes cumulative accretion of $0.045 million.

The following table summarizes activity in the Company's Preferred instruments, net for the nine months ended September 30, 2026:

As of September 30, 2026, the Company had not identified any impairment indicators or observable price changes requiring an adjustment to the carrying value of the preferred instrument.

Note 7. Single-Family Residential Properties, net

During the third quarter of 2026, the Company acquired 1,233 single-family residential properties from Lennar. Single-family residential properties, net as of September 30, 2026 and December 31, 2025 were as follows:

The following table summarizes activity in the Company's Single-family residential properties, net for the nine months ended September 30, 2026:

(1)

Includes acquisition related costs and costs incurred to prepare residential properties for rental operations, as well as capitalized interest and certain carrying costs incurred during the lease-up and stabilization period.

As of September 30, 2026, the Company's single-family residential properties were not yet substantially complete. Accordingly, no depreciation expense was recognized during the three and nine months ended September 30, 2026.

Note 8. Related Party Transactions

The Company is externally managed and advised by KL pursuant to the Management Agreement. KL is considered a related party due to its contractual management relationship with the Company. During the three months and nine months ended September 30, 2026, the Company paid approximately $33.3 million and $91.3 million to KL, respectively. The Management Fee paid to KL for the three months ended September 30, 2026 and 2025 was $30.3 million and $25.9 million, respectively. The Management Fee paid to KL for the nine months ended September 30, 2026 and 2025 was $88.3 million and $60.0 million, respectively.

As disclosed in the Company’s Form 10-K for the year ended December 31, 2025, Lennar ceased being a related party as it no longer held an ownership interest or other rights that provide significant influence over the Company's management or operating policies following the completion of its exchange offer on November 28, 2025.

Note 9. Other Assets

Other assets as of September 30, 2026 and December 31, 2025 were as follows:

(1)

Includes deferred financing costs related to the Revolving Credit Facility as of September 30, 2026 and December 31, 2025.

(2)

Includes net earnest deposits of $4.1 million, single-family residential property deposits of $10.8 million, and due diligence costs related to the Rausch land acquisition of$1.8 million as of September 30, 2026 and December 31, 2025.

(3)

Primarily includes prepaid taxes of $8.5 million as of each of September 30, 2026 and December 31, 2025, $1.0 million dividends receivable related to the preferred instrument issued by Dream Finders as of September 30, 2026, and $0.8 million issuance costs related to the 2026 Senior Notes that were issued on October 6, 2026.

Note 10. Other Liabilities

Other liabilities as of September 30, 2026 and December 31, 2025 were as follows:

(1)

Dividend payable as of September 30, 2026 relates to the dividend declared by the Company on September 23, 2026 and paid on October 15, 2026. Dividend payable as of December 31, 2025 relates to the dividend declared by the Company on December 22, 2025 and paid on January 15, 2026. See Note 14. Stockholders' Equity.

(2)

Seller note payable as of September 30, 2026 and December 31, 2025 relates to a lender specific to a community acquired from Lennar.

(3)

Includes accrued interest payable related to the Revolving Credit Facility of $6.8 million, Senior Notes of $12.4 million, and DDTL Credit Facility of $2.7 million as of September 30, 2026, and accrued interest payable for Revolving Credit Facility of $1.2 million and Senior Notes of $46.4 million as of December 31, 2025.

(4)

As of September 30, 2026, includes accrued debt issuance costs of $0.1 million, single-family residential property costs of $5.5 million, other deposits of $0.2 million, accrued dividend equivalent rights for holders of unvested RSUs granted under the 2024 Incentive Plan of $0.1 million, accrued development loan origination fees of $0.1 million, and other payables of $0.2 million. As of December 31, 2025, primarily includes accrued debt issuance costs of $0.2 million, other deposits of $0.1 million, and accrued dividend equivalent rights for holders of unvested RSUs granted under the 2024 Incentive Plan of $0.1 million.

(5)

Deferred financing commitment fee represents the unamortized portion of fees recognized in connection with financing support for Dream Finders' acquisition of Beazer Homes. The deferred financing commitment fee is recognized into preferred instrument income and other over the contractual term of the related preferred instrument.

Note 11. Debt

Debt Obligations

The Company’s outstanding debt obligations as of September 30, 2026 consisted of its Senior Notes, borrowings under the Revolving Credit Facility and DDTL Credit Facility, and purchase money mortgages. Debt obligations as of September 30, 2026 and December 31, 2025 were as follows:

(1)

Debt issuance costs for the Senior Notes and DDTL Credit Facility, net of accumulated amortization.

Revolving Credit Facility and Delayed Draw Term Loan Facility

On March 25, 2026 (the “Effective Date”), the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent for the lenders, which amended and restated the Company’s prior secured revolving credit facility entered into on February 7, 2025. The Credit Agreement provides for (i) a four-year revolving credit facility (the “Revolving Credit Facility”) with commitments in an aggregate amount of $1.335 billion, (ii) a delayed draw term loan facility (the “DDTL Credit Facility”) in an aggregate amount of $500 million that may be utilized during the first year following the Effective Date, and (iii) an uncommitted accordion feature that allows the Company to seek additional loan commitments under the Credit Agreement in the future, subject to an aggregate maximum commitment amount of $2.5 billion. Borrowings under the Credit Agreement are subject to compliance with a borrowing base, which is a function of the values from time to time of the properties of the Company and its subsidiaries. The revolving loans and any delayed draw term loans borrowed under the Credit Agreement will mature on March 25, 2030. The Credit Agreement is unsecured. Upon the Effective Date, the liens securing the loans under the Company’s prior secured revolving credit facility were released.

Prior to Amendment No. 1 (as defined below), loans under the Credit Agreement bore 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.

On August 5, 2026, the Company entered into Amendment No. 1 to the Credit Agreement (“Amendment No. 1”). Amendment No. 1 amended the Credit Agreement to, among other things, reduce each of the applicable margins used to determine the interest rate on loans thereunder by 0.25% per annum. Accordingly, effective August 5, 2026, the applicable margin for loans bearing interest at the Adjusted Term SOFR Rate is (i)1.75% if the Leverage Ratio is less than or equal to 0.30 to 1.00, (ii)2.00% 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)2.25% if the Leverage Ratio is greater than 0.40 to 1.00. Loans bearing interest at the Alternate Base Rate remain subject to margins that are 1.00% lower than the applicable margins for Adjusted Term SOFR Rate loans.

As of the Effective Date, the Company’s obligations under the Credit Agreement are guaranteed by Millrose Properties SPE LLC (“SPE LLC”) and MPSAB, LLC (“MPSAB”), each a directly or indirectly wholly-owned subsidiary of the Company. In certain circumstances, the Credit Agreement requires the Company to cause certain future subsidiaries of the Company that are not Taxable REIT Subsidiaries or SPEs (each as defined in the Credit Agreement) to become guarantors.

The Credit Agreement includes affirmative and negative covenants (as further described in the Credit Agreement) and 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. The Company was in compliance with all applicable covenants and there were no events of default under the Credit Agreement as of September 30, 2026.

The loans under the Credit Agreement may be accelerated if an event of default occurs. Events of default include (i) customary events of default and (ii) KL ceasing to be the Company’s manager and the Company failing to appoint a replacement manager reasonably acceptable to the required lenders within 90 days.

For the three and nine months ended September 30, 2026, amounts presented for the Revolving Credit Facility reflect borrowings, interest expense, and interest payments under both the Company’s prior secured revolving credit facility from January 1, 2026 through March 24, 2026 and the Revolving Credit Facility from March 25, 2026 through September 30, 2026. As of September 30, 2026, the Company had $635 million of outstanding borrowings under the Revolving Credit Facility. Interest expense under the Revolving Credit Facility for the three months ended September 30, 2026 was $10.7 million, including $9.8 million of interest and $0.9 million of amortized deferred financing fees. Interest expense under the Revolving Credit Facility for the nine months ended September 30, 2026 was $23.2 million, including $20.6 million of interest and $2.6 million of amortized deferred financing fees. Interest payments under the Revolving Credit Facility for the three and nine months ended September 30, 2026 were $10.4 million and $15.0 million, respectively. The outstanding interest payable as of September 30, 2026 was $6.8 million and is included in other liabilities in the Company’s condensed consolidated balance sheets.

As of September 30, 2026, the Company had $496.9 million of outstanding borrowings under the DDTL Credit Facility. Interest expense under the DDTL Credit Facility for the three months ended September 30, 2026 was $3.2 million, including $2.9 million of interest and $0.3 million of amortized deferred financing fees. Interest expense under the DDTL Credit Facility for the nine months ended September 30, 2026 was $3.6 million, including $3.3 million of interest and $0.3 million of amortized deferred financing fees. The outstanding interest payable as of September 30, 2026 was $2.7 million and is included in other liabilities in the Company’s condensed consolidated balance sheets.

Senior Notes

The following senior notes, issued by the Company during the year ended December 31, 2025, were outstanding as of September 30, 2026 (together, the “Senior Notes”):

•

$1.25 billion of 6.375% senior notes due 2030 (the “2030 Notes”), and

•

$750 million of 6.250% senior notes due 2032 (the “2032 Notes”).

The Senior Notes are senior unsecured obligations of the Company and are fully and unconditionally guaranteed by SPE LLC and MPSAB. The Senior Notes bear interest at fixed annual rates of 6.375% and 6.250%, respectively, payable semi-annually in arrears. Interest on the 2030 Notes is payable on February 15 and August 15 of each year, beginning on February 15, 2026. Interest on the 2032 Notes is payable on March 15 and September 15 of each year, beginning on March 15, 2026.

The Senior Notes contain customary restrictive covenants, optional redemption provisions, change-of-control repurchase rights, and customary events of default. The Senior Notes rank (i) pari passu with all existing and future senior unsecured indebtedness, (ii) senior to any future subordinated indebtedness, (iii) effectively subordinated to existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, and (iv) structurally subordinated to all existing and future indebtedness of subsidiaries that do not guarantee the Senior Notes.

There were no modifications to the Senior Notes during the three and nine months ended September 30, 2026. The Company was in compliance with all applicable covenants and there were no events of default under the indentures governing the Senior Notes.

As of September 30, 2026, the combined carrying amount of the Senior Notes, net of unamortized issuance costs of $26.3 million, was$1.974 billion. Interest expense related to the Senior Notes for the three months ended September 30, 2026 was $33.2 million, including $31.6 million of interest and $1.6 million of amortized issuance costs. Interest expense related to the Senior Notes for the nine months ended September 30, 2026 was $99.5 million, including $94.9 million of interest and $4.6 million of amortized issuance costs. Interest payments related to the Senior Notes for the three months ended September 30, 2026 were $63.3 million. Interest payments related to the Senior Notes for the nine months ended September 30, 2026 were $128.9 million. The outstanding interest payable as of September 30, 2026 was $12.4 million and is included in other liabilities in the Company’s condensed consolidated balance sheets.

Purchase Money Mortgages

During 2025, the Company acquiredtwo land parcels totaling $33 million which were financed through property-level, purchase-money arrangements which are fully indemnified by a counterparty. Both obligations are non-recourse to the Company and are secured solely by the respective underlying properties. The counterparty is responsible for all debt service related to the interest on the purchase money mortgages until their respective maturity dates, at which time the Company intends to enter into an option agreement on these properties with the counterparty.

Principal payments of $4 million are due during the fourth quarter of 2026, and $29 million are due in 2027. The land acquired under the purchase money mortgages is recorded within homesites under option contracts in the Company's condensed consolidated balance sheets. As of September 30, 2026, the outstanding balance under the purchase money mortgages was $33 million.

SFR Secured Credit Facility as of September 30, 2026 and December 31, 2025 was as follows:

On September 30, 2026, certain subsidiaries of the Company entered into a credit agreement (the "SFR Secured Credit Facility") with Goldman Sachs Bank USA, as administrative agent and initial lender. The SFR Secured Credit Facility provides for a limited recourse revolving credit facility with commitments in an aggregate amount of up to $235.0 million. Lenders may agree to (a) increase the aggregate commitments up to $1.0 billion, or (b) make advances in excess of the committed amount but not to exceed a total outstanding balance of $1.0 billion. Borrowings under the SFR Secured Credit Facility are subject to compliance with a borrowing base. The SFR Secured Credit Facility matures on September 29, 2028, subject to a one-year extension option. The SFR Secured Credit Facility is secured by, among other things, a pledge of equity in the subsidiary borrowers, cash derived from eligible financed properties and, upon certain events, mortgages on the financed properties themselves. The SFR Secured Credit Facility also benefits from a limited guaranty provided by the Company.

Borrowings under the SFR Secured Credit Facility bear interest at a rate equal to one-month Term SOFR (as defined in the SFR Secured Credit Facility) plus an applicable margin of 1.20% per annum, subject to a 0.50% floor and adjustments upon certain events. The SFR Secured Credit Facility contains customary affirmative and negative covenants and customary events of default. The Company was in compliance with all applicable covenants and there were no events of default under the SFR Secured Credit Facility as of September 30, 2026.

As of September 30, 2026, the Company had $213.1 million of outstanding borrowings under the SFR Secured Credit Facility. There wasno interest expense or interest payments related to the SFR Secured Credit Facility for the three and nine months ended September 30, 2026. Debt issuance costs of $2.6 million associated with the SFR Secured Credit Facility were recorded as a direct deduction to Single-family residential secured credit facility, net in the Company's condensed consolidated balance sheets as of September 30, 2026.

Note 12. Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Legal costs incurred in connection with loss contingencies, if any, are expensed as incurred. There is no material litigation nor, to management’s knowledge, any material litigation currently threatened against the Company as of September 30, 2026.

As of September 30, 2026, the Company had total future land development commitments of $6.7 billion, of which approximately 73% relate to option contracts with Lennar.

As of September 30, 2026, the Company had a remaining commitment to purchase up to an additional $350.0 million of the Dream Finders’ preferred instrument, subject to the satisfaction of certain closing conditions, including the completion of Dream Finders' acquisition of Beazer Homes. On October 20, 2026, upon completion of Dream Finders' acquisition of Beazer Homes, the Company purchased an additional $316.9 million preferred instrument issued by Dream Finders and satisfied its remaining commitment.

As of September 30, 2026, the Company had entered into agreements with Lennar to acquire 620 additional single-family residential properties for approximately $150.3 million, with an expected net investment of approximately $50.0 million after anticipated asset-level limited recourse financing. In the event that the Company elects not to acquire some or all of the properties, the Company may incur certain payment obligations in connection there-with, including potential loss of deposits.

Note 13. Income Taxes

The provision for income taxes was as follows for the three and nine months ended September 30, 2026 and 2025:

Taxable income generated from certain activities that do not qualify under REIT provisions is earned through the Company's TRSs and is subject to U.S. federal, state, and local income and franchise taxation. The following table reconciles the TRS U.S. federal statutory income tax rate to the TRS effective income tax rate for the three and nine months ended September 30, 2026 and September 30, 2025:

(1)

State taxes in California, Florida and New York made up the majority (greater than 50 percent) of the tax effect in this category.

Deferred income taxes represent the net tax effects of temporary differences between the financial statement carrying amounts of certain assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to net deferred tax liabilities were as follows:

As of September 30, 2026, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately$141.1 million that may be carried forward indefinitely and do not expire.

A reduction of the carrying amounts of deferred tax assets by a valuation allowance is required if, based on available evidence, it is more likely than not that such assets will not be realized. The Company evaluated its deferred tax assets as of September 30, 2026 and concluded that it is more likely than not that the deferred tax assets will be realized. This assessment considered all available positive and negative evidence, including recent financial performance, actual earnings, future reversals of existing temporary differences, projected future taxable income, and tax planning strategies. As such, a valuation allowance was not recorded against the deferred tax assets, including the NOL, as of September 30, 2026. The Company hadno gross unrecognized tax benefits as of September 30, 2026.

There wereno income taxes paid by the Company during the three and nine months ended September 30, 2026.

Note 14. Stockholders’ Equity

Authorized Capital Stock

As of September 30, 2026, Millrose had, under its Charter, authorized capital stock of (i)450,000,000 shares of common stock, par value $0.01 per share, consisting of 275,000,000 shares of Class A common stock and 175,000,000 shares of Class B common stock, and (ii)50,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

As of September 30, 2026, Millrose had 166,047,927 shares of common stock outstanding. The Company’s common stock consists of shares of Class A and Class B common stock, each with a par value of $0.01 per share. On April 3, 2026,44,430 shares of Class A common stock were issued to non-employee directors in connection with the vesting of RSUs under the 2024 Incentive Plan. There wereno other issuances, conversions, forfeitures, or repurchases of common stock during the three and nine months ended September 30, 2026.

Preferred Stock

As of September 30, 2026, there wereno shares of preferred stock outstanding.

Dividends

On January 15, 2026, the Company paid a dividend of $0.75 to holders of its Class A common stock and Class B common stock of record 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 its Class A common stock and Class B common stock of record as of the close of business on April 3, 2026, as declared by the Board on March 23, 2026.

On July 15, 2026, the Company paid a dividend of $0.77 to holders of its Class A common stock and Class B common stock of record as of the close of business on July 6, 2026, as declared by the Board on June 23, 2026.

On September 23, 2026 the Company declared a dividend of $0.79 to holders of its Class A common stock and Class B common stock of record as of the close of business October 5, 2026. This dividend was paid on October 15, 2026. For the dividend paid October 15, 2026, the Company recorded a dividend payable of $131.2 million in other liabilities in the Company’s condensed consolidated balance sheets as of September 30, 2026.

Securities Authorized for Issuance Under Equity Compensation Plans

As of September 30, 2026,88,750 RSUs had been granted pursuant to the 2024 Incentive Plan, of which 44,430 had vested as of September 30, 2026. See Note 15. Stock-Based Compensation Expense for additional information.

Additional Paid In Capital

As of September 30, 2026, the Company had additional paid-in capital of approximately $5.9 billion, which largely reflects the cash and land contributed by Lennar at the Spin-Off. Changes in additional paid-in capital during the three and nine months ended September 30, 2026 primarily related to stock-based compensation expense and dividend equivalent rights on RSUs issued under the 2024 Incentive Plan. Changes during the nine months ended September 30, 2026 also included a reduction related to the issuance of shares upon the vesting of RSUs, which were reclassified to Class A common stock within stockholders' equity.

Note 15. Stock-Based Compensation Expense

The Company grants RSUs to its non-employee directors under the 2024 Incentive Plan. RSUs granted on April 3, 2025 vest on the earlier of (x) the first anniversary of the grant date and (y) the date of Millrose’s annual stockholder meeting that next follows the grant date, subject to the applicable Board member's continuous service on the Board. RSUs granted on December 10, 2025 vest on the earlier of (x) April 3, 2026 and (y) the date of Millrose’s first annual stockholder meeting that next follows the grant date, and the remaining half of which vest on the earlier of (x) April 3, 2027 and (y) the date of Millrose’s second annual stockholder meeting following the grant date, in each case, subject to the applicable member of the Board's continuous service on the Board.

On May 13, 2026, the Compensation Committee of the Board granted an annual equity retainer of 5,639 RSUs to each member of the Board under the 2024 Incentive Plan which will be settled in shares of the Company’s Class A common stock, subject to the vesting criteria described below. Each RSU award had a grant date fair value of $150,392. Millrose granted 28,195 RSUs in the aggregate, which vest on the earlier of (x) the first anniversary of the grant date and (y) the date of Millrose’s next annual stockholder meeting.

The Company recognizes Stock-based compensation expense on a straight-line basis over the vesting period. Stock-based compensation expense for the three months ended September 30, 2026 and 2025 was $0.3 million and $0.2 million, respectively. Stock-based compensation expense for the nine months ended September 30, 2026 and 2025 was $1.2 million and $0.4 million, respectively.

The following table summarizes the Company’s nonvested shares activity for the nine months ended September 30, 2026:

The fair value of nonvested shares is determined based on the trading price of the Company’s Class A common stock on the grant date. The weighted-average grant date fair value presented in the table above is calculated by weighting the grant date fair value of each award by the number of shares underlying such awards.

On April 3, 2026,44,430 RSUs granted on April 3, 2025 and December 10, 2025 vested pursuant to the vesting terms outlined above. As of September 30, 2026, unrecognized compensation expense related to unvested RSUs was approximately $0.7 million and is expected to be recognized over a weighted-average period of approximately 0.2 years.

The RSUs granted under the 2024 Incentive Plan include dividend equivalent rights (“DERs”), which entitle the holder to receive, upon vesting of the related RSUs, cash payments equal to dividends declared on the Company’s Class A common stock during the period between the grant date and the vesting date of the RSUs. The Company accrues the associated DER amountsas dividends are declared, with corresponding amounts recorded as additional paid‑in capital. As of September 30, 2026, the Company accrued approximately $0.1 million related to these DERs.

Note 16. Earnings Per Share

The Company calculates earnings per share (“EPS”) in accordance with ASC 260 Earnings Per Share. Basic EPS is calculated by dividing net income attributable to common stockholders by the weighted number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if unvested RSUs were to vest and be settled in common stock, calculated using the treasury stock method.

For periods prior to the Spin-Off on February 7, 2025, the Company elected to use the number of shares of common stock issued at the Spin-Off date as the denominator for both basic and diluted EPS, which is an acceptable method under ASC 260 for entities that complete a spin-off within the financial reporting period. For the nine months ended September 30, 2025, the pre-spin net loss of $25.0 million for the period from January 1, 2025 through February 7, 2025 is added back to net income for purposes of earnings per share.

The following table presents the computation of basic and diluted EPS for the three and nine months ended September 30, 2026 and 2025:

(1)

Basic weighted average common shares outstanding for the three and nine months ended September 30, 2026 represent the common shares issued at the Spin-Off and the common shares issued in connection with the vesting of RSUs under the 2024 Incentive Plan.

(2)

Diluted weighted shares outstanding for the three and nine months ended September 30, 2026 include the incremental dilutive effect of unvested RSUs, calculated using the treasury stock method in accordance with ASC 260. Unvested RSUs outstanding resulted in an aggregate increase of 16,611 shares and 21,932 shares for the three and nine months ended September 30, 2026, respectively.

Note 17. Segment Reporting

Prior to the Spin-Off, the Predecessor Millrose Business didnot operate as a separate reportable segment. Following the Spin-Off, the Company derives revenue primarily from its portfolio of homesites under option contracts.

The Company identifies its operating segments based on the business activities for which discrete financial information is available and regularly reviewed by the Company's Chief Operating Decision Maker (the "CODM") for purposes of evaluating performance and allocating resources.

As of September 30, 2026, the Company's operations were conducted entirely in the United States with properties geographically located across 30 states. The Chief Executive Officer serves as the Company's CODM and evaluates performance and resource allocation on a portfolio basis. Additionally, the Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has asingle operating and reportable segment (the "Reporting Segment") for disclosure purposes in accordance with GAAP.

The CODM evaluates the performance of the Reporting Segment by analyzing the Company's condensed consolidated financial statements. Net income attributable to Millrose, as presented on the Company’s condensed consolidated statements of operations, is the primary metric utilized by the CODM to assess the Reporting Segment’s performance and to allocate resources. The CODM is regularly provided with only the consolidated expenses as noted on the face of the consolidated statementsof operations. Total assets, as presented on the Company’s condensed consolidated balance sheets, is used to measure the Reporting Segment’s assets.

The accounting policies of the Reporting Segment are the same as those described in Note 2. Basis of Presentation and Significant Accounting Policies.

Major Customer Concentration

The Company monitors major counterparties to assess potential risks to its financial position. For the three months ended September 30, 2026, Lennar represented $144.9 million, or 69% of total Company revenues. For the nine months ended September 30, 2026, Lennar represented $426.7 million, or 71% of total Company revenues.

Note 18. Subsequent Events

The Company has evaluated subsequent events through the issuance of these financial statements and determined that there have been no events that require adjustment or disclosure in the condensed consolidated financial statements except for the following.

On October 6, 2026, the Company completed its previously announced private offering of the 2026 Senior Notes. Net proceeds from the offering, together with borrowings under the DDTL Credit Facility, were used for general corporate purposes, including the acquisition of homesites associated with Dream Finders' acquisition of Beazer Homes and the repayment of borrowings outstanding under the Revolving Credit Facility.

Completion of Dream Finders Commitment

On October 20, 2026, Dream Finders completed its previously announced acquisition of Beazer Homes. As a result of the transaction, the Company completed the second purchase of an additional $316.9 million preferred instrument issued by Dream Finders, net of original issue discount, and funded approximately $580 million for the acquisition of homesites subject to option agreements with Dream Finders. Including the $170.6 million preferred instrument purchased during the third quarter of 2026, the Company's aggregate funding provided to Dream Finders was approximately $1.068 billion.

Share Repurchase Program

On October 26, the Board approved a share repurchase program whereby, from time to time, the Company may repurchase up to $250 million of the Company’s Class A common stock.