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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-42476

Millrose Properties, Inc.

(Exact name of registrant as specified in its charter)


Maryland		99-2056892
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
600 Brickell Avenue, Suite 1400 Miami, Florida		33131
(Address of principal executive offices)		(Zip Code)

(212) 782-3841

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Ticker Symbol	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	MRP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of Class A common stock outstanding as of October 23, 2025: 154,183,686

The number of Class B common stock outstanding as of October 23, 2025: 11,819,811

TABLE OF CONTENTS


		Page
PART I FINANCIAL INFORMATION
GLOSSARY OF DEFINED TERMS		1
FORWARD-LOOKING STATEMENTS		3
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	5
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and September 30, 2024	6
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and September 30, 2024	7
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and September 30, 2024	8
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
	SIGNATURE	49

GLOSSARY OF DEFINED TERMS

In this Quarterly Report on Form 10-Q (this “Form 10-Q”), the following terms and abbreviations have the meanings listed below.

AFFO means the Adjusted Funds From Operations, which are calculated as the net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate depreciation, adjusted to eliminate the impact of non-recurring items that are not reflective of ongoing 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 TRSs) that will not be incurred following our election and qualification to be subject to tax as a REIT for U.S. federal income tax purposes.

Future Property Assets means any Homesites, prospective Homesites, properties or other related land assets that Millrose (through its TRSs, the Property LLCs and subsidiaries other than the TRSs and the Property LLCs (the “Other Subsidiaries”) may (i) acquire in the future pursuant to the Lennar Agreements or (ii) acquire in the future pursuant to any agreements that Millrose or its subsidiaries may negotiate and enter into with Lennar (outside of the Lennar Agreements), any Lennar Related Ventures or Other Customers, respectively, in the future.

GAAP means generally accepted accounting principles in the United States.

Homesite means land inventory that has all discretionary approvals and entitlements necessary to allow Horizontal Development and Vertical Development to begin soon after the acquisition of the land, including (i) subdivided and fully developed land inventory on which homes may be built and (ii) subdivided or non-subdivided land inventory undergoing necessary Horizontal Development and subdivision so that homes may be built on them.

HOPP’R means Lennar’s Homesite Option Purchase Platform, a comprehensive suite of systems and procedures that Lennar developed to operate and manage the acquisition, financing and development of land assets on a large scale, licensed to Millrose under the HOPP’R License Agreement, dated as of February 7, 2025, by and between Millrose and a wholly owned subsidiary of Lennar.

Horizontal Development means any work relating to the installation of utilities and infrastructure required to obtain a building permit for the construction of a residence, including drainage, sewage, water lines, roads, sidewalks, utility lines, grading and landscaping. Sometimes such infrastructure can also include the construction of recreational facilities, common area elements and other amenities. Horizontal Development is work that must be done prior to home construction, as it lays the groundwork for building homes.

Land Under Development means land for which all discretionary entitlements, including all permits and approvals, have been received, and surveys and planning have been completed, and Horizontal Development is already underway, which must be substantially completed before home construction can begin.

Lennar Agreements means the Master Program Agreement, Master Option Agreement, Master Construction Agreement, Multiparty Cross Agreements, Founder’s Rights Agreement, Registration Rights Agreement, each entered into on February 7, 2025 in connection with the Spin-Off and other agreements which Lennar or its subsidiaries and Millrose or Millrose Holdings may enter into from time to time in connection with Millrose’s (including Millrose Holdings) provision of the HOPP’R to Lennar and/or that govern Lennar’s ongoing relationship with Millrose.

Lennar Related Ventures means any residential home construction or real estate development companies in the United States (i) in which Lennar has any amount of ownership interests or (ii) with which Lennar has any contractual business relationship, in each case, that is referred by Lennar to Millrose as a HOPP’R customer.

Master Construction Agreement means the Master Construction Agreement, dated as of February 7, 2025, by and among Millrose, Millrose Holdings, U.S. Home LLC, Lennar Homes Holding, LLC and CalAtlantic Group, LLC, as described in “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Master Construction Agreement” in the Form 10-K, as amended from time to time and as supplemented by any terms and provisions contained in any Project Addenda.

Master Option Agreement means the Master Option Agreement, dated as of February 7, 2025, by and among Millrose, Millrose Holdings, U.S. Home LLC, Lennar Homes Holding, LLC and CalAtlantic Group, LLC, as described in “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Master Option Agreement” in the Form 10-K, as amended from time to time and as supplemented by any terms and provisions contained in any Project Addenda.

Master Program Agreement means the Master Program Agreement, dated as of February 7, 2025, by and between Millrose and U.S. Home LLC, Lennar Homes Holding, LLC and CalAtlantic Group, LLC, as described in “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Master Program Agreement” in the Form 10-K, as supplemented by any terms and provisions contained in any Project Addenda.

Other Agreements means any transaction agreements, other than the Master Program Agreement, including those entered into from time to time with Other Customers and other agreements which Other Customers and the Company may enter into from time to time in connection with the Company’s provision of the HOPP’R to Other Customers and/or that govern Other Customers’ ongoing relationship with Millrose, and any entered into with Lennar on terms different than those of the Master Program Agreement.

Other Customers means any residential home construction or real estate development companies in the United States, excluding Lennar and any Lennar Related Ventures, that enter into agreements or other arrangements with Millrose (through any Other Subsidiaries) to use the HOPP’R.

Predecessor Millrose Business means the business operations, including revenues and expenses, liquidity and capital resources, cash flows, balance sheet, statements of income and other information of Millrose prior to the Spin-Off, as derived from the financial statements of Lennar, since Millrose had no operations (or operating subsidiaries) of its own prior to the Spin-Off.

Project Addendum means any Project Addendum, pursuant to which Millrose (through Millrose Holdings or any of its subsidiaries) and Lennar may subject any Transferred Assets, Supplemental Transferred Assets or Future Property Assets to the terms and provisions of the Master Program Agreement, the Master Option Agreement and the Master Construction Agreement.

Property LLC includes all of our LLC subsidiaries that hold the property assets.

REIT means a real estate investment trust for the U.S. federal income tax purposes.

Spin-Off means the partial, taxable spin-off of Millrose Properties, Inc., a previously wholly-owned subsidiary of Lennar, that was effected by distributing approximately 80% of the outstanding shares of Millrose common stock to holders of Lennar common stock on February 7, 2025.

Supplemental Transferred Assets means all the Homesites and prospective Homesites acquired by Millrose in connection with the Supplemental Transferred Assets Transaction, using approximately $859 million of the cash contributed by Lennar to Millrose in connection with the Spin-Off as consideration. The Supplemental Transferred Assets included all of the land assets of Rausch Coleman Companies, LLC (“Rausch”) (except for any Homesites with homes actively under construction).

Supplemental Transferred Assets Transaction means the transaction between Millrose and Rausch, pursuant to which Millrose acquired the Supplemental Transferred Assets (through an acquisition of 100% of the stock of RCH Holdings, Inc., a recently formed parent holding company of Rausch) following the Spin-Off.

Takedown Price means the total amount to be paid by Lennar to Millrose Holdings to exercise its purchase option with respect to the Transferred Assets, the Supplemental Transferred Assets or any Future Property Assets, which shall be negotiated between the parties with respect to each property and set forth in the applicable Project Addendum. Where applicable, “Takedown Price” may also mean this same concept, but as negotiated and used by or for (or in the context of agreements with) any Lennar Related Ventures or Other Customers.

Transferred Assets means the Homesite inventory transferred in the Spin-Off.

TRS means a taxable REIT subsidiary, which is a fully taxable corporation that has jointly elected with the parent REIT to be treated as a taxable REIT subsidiary, defined under section 856 of the Internal Revenue Code of 1986, as amended (the “Code”).

Vertical Development means any work relating to the construction of homes on owned homesites that extend above the ground level after Horizontal Development is sufficiently completed.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements including, in particular, statements about Millrose Properties, Inc.’s (“Millrose,” and, together with its subsidiaries (unless the context otherwise requires), the “Company,” “we,” “us” or “our”) plans, strategies and objectives, as well as statements about Millrose’s business (including MPH Parent LLC (“MPH Parent”) and Millrose Properties Holdings, LLC (“Millrose Holdings”) and any of the other Millrose subsidiaries), and Millrose’s future plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as “may,” “can,” “shall,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words or the negatives thereof intended to identify forward-looking statements. However, not all forward-looking statements contain these identify words. Specific forward-looking statements in this Form 10-Q include statements regarding:

•

Millrose’s plans and objectives for future operations, including plans and objectives relating to future growth of our business and the HOPP’R;

•

the availability of capital at any given time to finance the various endeavors, projects and acquisitions that are expected or planned for Millrose, as well as the availability of capital that needs to be reserved for specified uses (whether contractually or by law);

•

expectations about the quality and value of our Homesites and the existence of any liabilities attached to the Homesites, and the adequacy of the protection, including of Lennar Corporation’s (“Lennar”) indemnification of Millrose in connection with the Supplemental Transferred Assets Transaction;

•

expectations and assumptions around our ongoing relationship with Lennar, including expectations that Lennar will fully perform on all its obligations pursuant to the Lennar Agreements (and that there will be regular and timely exercises of its purchase options) and expectations that it will continue to provide us with ongoing transactions pursuant to the Master Program Agreement and refer Lennar Related Ventures who may be interested in the HOPP’R to us as potential new customers;

•

our expected business, operations and financial position;

•

the possibility of providing the HOPP’R to future new customers, including Lennar Related Ventures and Other Customers, and the nature of any such future arrangements;

•

the planned use, development and sales of the Transferred Assets and the Supplemental Transferred Assets;

•

any expected acquisitions, uses, development and sales of Future Property Assets;

•

expectations and assumptions around our relationship with our Manager, an affiliate and wholly-owned subsidiary of Kennedy Lewis Investment Management LLC;

•

our status as a REIT and MPH Parent’s, RCH Holdings, Inc.’s, and Millrose Holdings’ status as TRSs;

•

expectations around ownership limits of our Class A and Class B common stock (collectively, “common stock”); and

•

expectations and assumptions around our source of revenues, expected income, ability to secure financing or incur and repay indebtedness, and ability to comply with restrictions contained in our debt covenants.

Assumptions relating to these statements involve judgments with respect to, among other things, future macroeconomic, competitive and market conditions, future land values, future business decisions, future environmental conditions and relationships with our customers, all of which are difficult or impossible to accurately predict and many of which are beyond our control. All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. The forward-looking statements contained in this Form 10-Q reflect our views as of the date of this Form 10-Q about future events and are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate, and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate, and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved.

Investing in our common stock involves a high degree of risk. You should carefully review “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025 (the “Form 10-K”) and “Part II, Item 1A. Risk Factors” of this Form 10-Q for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

PRESENTATION OF FINANCIAL AND OPERATING DATA

Unless otherwise indicated, the financial information presented prior to the February 7, 2025 Spin-Off (as defined below) in this Form 10-Q is that of Lennar Corporation (“Lennar”, or the “Predecessor”).

Millrose Properties, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except share amounts)


	September 30,			December 31,
	2025			2024
Assets
Inventories
Homesite inventory	$	8,360,431		$	-
Land and land under development		-			2,978,807
Finished homesites		-			2,486,483
Total inventories		8,360,431			5,465,290
Development loan receivables, net		340,401			-
Cash		242,578			-
Option fee receivables		58,236			-
Other assets		22,091			-
Total assets		9,023,737			5,465,290
Liabilities and stockholders' equity
Accounts payable and accrued expenses		-			282,730
Builder deposits		874,257			-
Debt obligations, net		1,966,171			24,188
Development guarantee holdback liability		100,000			-
Deferred tax liabilities		71,833			-
Other liabilities		153,160			-
Total liabilities		3,165,421			306,918
Commitments and contingencies (See Note 8)
Stockholders' equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, 0 shares issued at September 30, 2025		-			-
Class A common stock, $0.01 par value, 275,000,000 shares authorized, 154,183,686 shares issued at September 30, 2025		1,542			-
Class B common stock, $0.01 par value, 175,000,000 shares authorized, 11,819,811 shares issued at September 30, 2025		118			-
Predecessor equity		-			5,158,372
Additional paid-in capital		5,872,876			-
Distribution in excess of net income		(16,220	)		-
Total stockholders' equity		5,858,316			5,158,372
Total liabilities and stockholders' equity	$	9,023,737		$	5,465,290

See Notes to the unaudited Condensed Consolidated Financial Statements.

Millrose Properties, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except share amounts)


	Three months ended						Nine months ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenues:
Option fee revenues	$	170,326		$	-		$	391,491		$	-
Development loan income		8,934			-			19,469			-
Total revenues		179,260			-			410,960			-
Operating expenses:
Management fee expense		25,895			-			59,959			-
Stock-based compensation expense		189			-			370			-
Provision for credit loss expense		340			-			340			-
Sales, general, and administrative expenses from pre-spin periods		-			63,670			24,960			180,418
Total operating expenses		26,424			63,670			85,629			180,418
Income (loss) from operations		152,836			(63,670	)		325,331			(180,418	)
Other income (expense):
Interest income		2,450			-			5,356			-
Interest expense		(43,748	)		-			(56,569	)		-
Other expenses		(616	)		-			(1,483	)		-
Total other income (expense)		(41,914	)		-			(52,696	)		-
Net income (loss) before income taxes		110,922			(63,670	)		272,635			(180,418	)
Income tax expense		5,862			-			15,009			-
Net income (loss)	$	105,060		$	(63,670	)	$	257,626		$	(180,418	)
Adjustment for expenses from pre-spin periods		-			-			24,960			-
Net income attributable to Millrose Properties, Inc. Common shareholders	$	105,060		$	(63,670	)	$	282,586		$	(180,418	)
Basic earnings per share of Class A and Class B Common Stock	$	0.63		$	-		$	1.70		$	-
Diluted earnings per share of Class A and Class B Common Stock	$	0.63		$	-		$	1.70		$	-
Basic weighted average common shares outstanding of Class A and Class B Common Stock (1)		166,003,497			-			166,003,497			-
Diluted weighted average common shares (2)		166,031,797			-			166,025,174			-

(1) Basic weighted average common shares for the three and nine months ended September 30, 2025 represent the common shares issued at the Spin-Off, which are the common shares outstanding as of September 30, 2025. No publicly-listed shares were outstanding as of September 30, 2024.

(2) Diluted weighted shares for the three and nine months ended September 30, 2025 include 28,300 restricted stock unit (“RSUs”) granted in the aggregate to each member of tbe Board under the 2024 Incentive Plan (as defined below) on April 3, 2025. The RSUs were unvested as of September 30, 2025.

See Notes to the unaudited Condensed Consolidated Financial Statements.

Millrose Properties, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(Dollars in thousands, except share amounts)



	Three Months Ended September 30, 2025
	Class A Common Stock				Class B Common Stock				Preferred Stock				Additional Paid			Distribution in Excess of			Pre-Spin Predecessors			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		In Capital			Net Income			Equity			Equity
Balance at June 30, 2025		154,183,686	$	1,542		11,819,811	$	118		-	$	-	$	5,872,687		$	(98	)	$	-		$	5,874,249
Net income		-		-		-		-		-		-		-			105,060			-			105,060
Common stock issued		-		-		-		-		-		-		-			-			-			-
Stock-based compensation		-		-		-		-		-		-		189			-			-			189
Dividends declared		-		-		-		-		-		-		-			(121,182	)		-			(121,182	)
Stockholders' Equity at September 30, 2025		154,183,686	$	1,542		11,819,811	$	118		-	$	-	$	5,872,876		$	(16,220	)	$	-		$	5,858,316


	Three Months Ended September 30, 2024
	Class A Common Stock				Class B Common Stock				Preferred Stock				Additional Paid			Distribution in Excess of			Pre-Spin Predecessors			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		In Capital			Net Income			Equity			Equity
Balance at June 30, 2024		-	$	-		-	$	-		-	$	-	$	-		$	-		$	3,769,154		$	3,769,154
Loss		-		-		-		-		-		-		-			-			(63,670	)		(63,670	)
Stock-based compensation		-		-		-		-		-		-		-			-			1,322			1,322
Contribution from Predecessor		-		-		-		-		-		-		-			-			335,954			335,954
Stockholders' Equity at September 30, 2024		-	$	-		-	$	-		-	$	-	$	-		$	-		$	4,042,760		$	4,042,760


	Nine Months Ended September 30, 2025
	Class A Common Stock				Class B Common Stock				Preferred Stock				Additional Paid			Distribution in Excess of			Pre-Spin Predecessors			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		In Capital			Net Income			Equity			Equity
Balance at December 31, 2024		-	$	-		-	$	-		-	$	-	$	-		$	-		$	5,158,372		$	5,158,372
Net income		-		-		-		-		-		-		-			282,586			(24,960	)		257,626
Adjustment for expenses from pre-spin periods		-		-		-		-		-		-		-			-			24,960			24,960
Common stock issued, Spin-Off		120,983,633		1,210		11,819,811		118		-		-		(1,328	)		-			-			-
Common stock retained by Lennar at Spin-Off		33,200,053		332		-		-		-		-		(332	)		-			-			-
Contribution from Lennar, Spin-Off		-		-		-		-		-		-		5,874,166			-			-			5,874,166
Reversal of Predecessor equity		-		-		-		-		-		-		-			-			(5,158,372	)		(5,158,372	)
Stock-based compensation		-		-		-		-		-		-		370			-			-			370
Dividends declared		-		-		-		-		-		-		-			(298,806	)		-			(298,806	)
Stockholders' Equity at September 30, 2025		154,183,686	$	1,542		11,819,811	$	118		-	$	-	$	5,872,876		$	(16,220	)	$	-		$	5,858,316


	Nine Months Ended September 30, 2024
	Class A Common Stock				Class B Common Stock				Preferred Stock				Additional Paid			Distribution in Excess of			Pre-Spin Predecessors			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		In Capital			Net Income			Equity			Equity
Balance at December 31, 2023		-	$	-		-	$	-		-	$	-	$	-		$	-		$	4,458,961		$	4,458,961
Loss		-		-		-		-		-		-		-			-			(180,418	)		(180,418	)
Stock based compensation		-		-		-		-		-		-		-			-			10,185			10,185
Contributions to Predecessor		-		-		-		-		-		-		-			-			(245,968	)		(245,968	)
Stockholders' Equity at September 30, 2024		-	$	-		-	$	-		-	$	-	$	-		$	-		$	4,042,760		$	4,042,760

See Notes to the unaudited Condensed Consolidated Financial Statements.

Millrose Properties, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)


	Nine months ended September 30,
		2025			2024
Cash flows from (used in) operating activities
Net income (loss)		$	257,626		$	(180,418	)
Adjustments to reconcile net income (loss) to net cash from operating activities
Provision for credit loss expense			340			-
Sales, general, and administrative expenses from pre-spin periods			24,960			-
Interest paid-in-kind			(11,889	)		-
Stock-based compensation expense			370			10,185
Amortization of discount			-			125
Amortization of debt issuance and financing costs			17,880			-
Changes in assets and liabilities
Land inventory			-			428,176
Option fee receivables			(58,236	)		-
Other assets			(8,522	)		-
Accounts payable and accrued expenses			-			2,147
Other liabilities			15,979			-
Deferred tax liabilities			15,009			-
Net cash flows from operating activities			253,517			260,215
Cash flows from (used in) investing activities
Option deposits from Lennar, Spin-Off			584,848			-
Purchase of Rausch land assets, net of builder deposits			(858,938	)		-
Investment in homesite inventory, net of builder deposits			(3,729,194	)		-
Sales of homesite inventory, net of builder deposit credits			2,224,076			-
Investment in development loans			(338,391	)		-
Paydowns of development loans			9,539			-
Net cash used in investing activities			(2,108,060	)		-
Cash flows from (used in) financing activities
Cash contribution from Lennar, Spin-Off			415,152			-
Principal payments on debt from pre-spin periods			-			(14,247	)
Net transfers to Predecessor			-			(245,968	)
Payments for Spin-Off deal costs			(77,948	)		-
Financing and issuance cost payments for debt obligations			(56,459	)		-
Proceeds from revolving credit facility and delayed draw term loan facility borrowings			2,575,000			-
Repayments of revolving credit facility and delayed draw term loan facility borrowings			(2,575,000	)		-
Proceeds from senior notes			2,000,000			-
Dividends paid to shareholders			(177,624	)		-
Payment of seller notes			(6,000	)		-
Net cash flows from (used in) financing activities			2,097,121			(260,215	)
Net increase in cash			242,578			-
Cash at beginning of period			-			-
Cash at end of period		$	242,578		$	-
Supplemental disclosures of non-cash investing and financing activities
Non-cash impacts of Millrose Spin-Off
Homesite inventory contributed by Lennar, net of option deposits		$	4,911,279		$	-
Decrease in deferred tax liabilities			59,836			-
Liabilities for transaction deal costs and seller notes			(96,948	)		-
Common stock issued, Spin-Off			(1,660	)		-
Non-cash increase in additional paid-in-capital, Spin-Off			(4,872,506	)		-
Reversal of Predecessor equity at Spin-Off			5,158,372			-
Non-cash impacts of Rausch land acquisition
Option deposits			(90,264	)		-
Development guarantee holdback liability			(100,000	)		-
Increase in deferred tax liabilities			(116,660	)		-
Builder deposits for investments in homesite inventory			(313,878	)		-
Builder deposit credits for sales of homesite inventory			114,733			-
Reduction of debt for inventories financed by sellers			-			(13,905	)
Dividends declared but not paid			121,183			-
Purchases of inventory financed by sellers			-			20,615
Supplemental disclosure of cash flow information
Cash paid for interest		$	22,960		$	-
Cash paid for income taxes			8,500			-

See Notes to the unaudited Condensed Consolidated Financial Statements.

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

•

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

•

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

•

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

•

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

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

Millrose is a holding company whose land banking operations are conducted through MPH Parent, LLC (“MPH Parent”), Millrose Properties Holdings, LLC (“Millrose Holdings”), each a Delaware limited liability company and a wholly owned operating subsidiary of Millrose, and other subsidiaries. The Company purchases and develops residential land and sells finished homesites to homebuilders through option contracts with predetermined costs and takedown schedules. As fully developed homesites are taken down by the homebuilder, capital is recycled into future land acquisitions for homebuilders, providing each customer with uninterrupted access to capital. Through its subsidiaries, the Company holds finished homesites with homes under construction, finished homesites imminently ready for construction, land under development, land ready for development and land not yet ready for development. Millrose and its subsidiaries also may make non-land banking investments from time to time.

On February 10, 2025, the Company acquired $1.158 billion in land assets, consisting of approximately 25,000 homesites through the acquisition of 100% of the outstanding stock of RCH Holdings, Inc., a newly formed parent holding company of Rausch Coleman Companies, LLC (“Rausch”), for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks.

On May 12, 2025, the Company entered into a commitment with New Home Company (“New Home”) for Millrose to provide land banking capital of up to $700 million to support New Home’s acquisition of Landsea Homes (“Landsea”). On June 25, 2025, New Home completed the acquisition of Landsea and the Company funded land banking capital of $494.5 million at closing for the acquisition of a portfolio of homesites on which the Company executed option agreements with New Home. As a result of the transaction, the Company acquired $522.8 million in land assets, consisting of 4,186 homesites, for $494.5 million in cash, which is net of deposits of $28.3 million related to the option contracts.

In connection with the New Home transaction, on June 24, 2025, Millrose entered into the DDTL Credit Agreement (as defined below) that provided for a delayed draw term loan facility with commitments in the aggregate amount of $1.0 billion that was scheduled to mature on June 23, 2026. Proceeds of the DDTL Credit Facility (as defined below) were used to fund the New Home acquisition of Landsea and any remaining proceeds were available for general corporate purposes. On September 11, 2025, the DDTL Credit Agreement was terminated and all obligations thereunder were repaid in full (as further described below in Note 7. Debt Obligations).

On August 7, 2025, the Company completed the offer and sale (the “August 2025 Offering”) of $1.25 billion aggregate principal amount of its 6.375% senior notes due 2030 (the “2030 Notes”). See Note 7. Debt Obligations for further description of the August 2025 Offering.

On September 11, 2025, the Company completed the offer and sale (the “September 2025 Offering”) of $750 million aggregate principal amount of its 6.250% senior notes due 2032 (the “2032 Notes”). See Note 7. Debt Obligations for further description of the September 2025 Offering.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

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

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

The basis of accounting of the Predecessor Millrose Business for the three and nine months ended September 30, 2024 is unchanged from that included in the notes to the combined financials statements in Form 10-K for the year ended December 31, 2024, which includes an allocation of all costs directly attributable to the Predecessor Millrose Business. The basis of accounting for the Predecessor Millrose Business for the nine months ended September 30, 2025 includes an allocation of the average daily expense in 2024, using this allocation method, to the period of January 1, 2025 through February 7, 2025. See “ Sales, General, and Administrative Expenses from Pre-Spin Period” in this Note 2 below for more information.

The unaudited condensed consolidated financial statements after the Spin-Off include the accounts of the Company and its subsidiaries, including Millrose Holdings and other subsidiaries. The basis of presentation of significant accounting policies documented below includes that of Millrose after the Spin-Off as of September 30, 2025.

All intercompany balances and transactions have been eliminated in consolidation.

Segment and Geographic Information

Prior to the Spin-Off, the Predecessor Millrose Business did not operate as a separate reportable segment. Subsequent to the Spin-Off, the Company operates and derives revenue primarily from its portfolio of homesite inventory through option contracts. The Company also earns interest income on the outstanding loan balance of development loans secured by residential property intended for single-family residential use. As of September 30, 2025, the Company’s operations are conducted in the United States with properties geographically located across 30 states. The Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (the “CODM”) and evaluates performance and resource allocation on a portfolio basis. Additionally, the Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has a single operating and reportable segment (the “Reporting Segment”) for disclosure purposes in accordance with GAAP.

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

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

Use of Estimates and Assumptions

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

Cash

The Company considers all investments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents are recorded at cost, which approximates their fair values due to the short maturity period. As of September 30, 2025, cash was $242.6 million and consisted of highly liquid deposit accounts and the Company held no cash equivalents. The Predecessor Millrose Business held no cash and cash equivalents at December 31, 2024.

Option Fee Receivables

Option fee receivables are stated at their net realizable value. The Company assesses for potential credit losses based on historical experience, creditworthiness of customers, and current economic conditions relevant to the Company. Option fee receivables were $58.2 million as of September 30, 2025 as compared to $0 as of December 31, 2024.

Option fee receivables consist of amounts due from customers to maintain their purchase options on properties. Option fees are billed monthly and are due in the following month. As of the date of issuance of this Form 10-Q, all option fee receivables as of September 30, 2025 have been collected. Based on the short duration of receivables and collection of the full balance, the Company did not record a credit allowance as of September 30, 2025.

Inventories

Inventories consist of homesite inventory. Total inventories were $8.4 billion as of September 30, 2025, as compared to $5.5 billion as of December 31, 2024.

The Company accounts for inventories in accordance with ASC 360, Property, Plant, and Equipment. The Company’s inventory is stated at cost and is monitored for indicators of impairment. The Company reviews for indicators of impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indicators are identified, the inventory is written down to fair value. The cost of inventory includes land acquisition costs, land development costs, and other costs directly attributable to homesite development. When inventory is sold to customers through option contracts with predetermined costs and takedown schedules, the book value of the inventory is removed from the balance sheet.

The following roll forward summarizes the change in inventories from the Spin-Off through September 30, 2025:


		Nine months ended,
(in thousands)		September 30 2025
Inventories
Beginning balance as of February 7, 2025 Spin-Off date	$		-
Homesite inventory contributed by Lennar in Spin-Off (1)			5,496,126
Land acquired from Rausch (2)			1,158,303
Investments in homesite inventory (3)			4,044,811
Homesite inventory takedowns			(2,338,809	)
Total inventories as of September 30, 2025	$		8,360,431

(1) Includes land contributed of $5.556 billion, less deferred tax asset adjustment of $59.8 million.

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

(3) Includes land acquired of $2.871 billion and development costs of $1.174 billion. Land additions include $522.8 million of land assets acquired

in the New Home transaction.

Development Loan Receivables

Development loan receivables as of September 30, 2025 and December 31, 2024 were as follows:


	September 30,			December 31,
(in thousands)	2025			2024
Development loan principal receivables	$	334,508		$	-
Interest receivable paid-in-kind for development loans		6,233			-
Allowance for credit losses		(340	)		-
Total development loan receivables	$	340,401		$	-

Development loan receivables include principal amounts due on development loans secured by property intended for single-family residential use and the related interest receivable, which is paid-in-kind. The Company accounts for development loan receivables in accordance with ASC 310, Receivables. Development loans are used for residential homesite property development and are recorded at the cost to acquire the principal portion less principal payments.

The Company records the allowance for credit losses in accordance with ASC 326, Financial Instruments - Credit Losses (“CECL”) using a loss-rate method under the CECL model, which considers historical experience, present economic conditions, and other factors considered relevant by the Company. The Company recorded a provision for credit loss expense of $0.3 million during the third quarter of 2025 in the condensed consolidated statements of operations as an estimate of potential future losses.

The following roll forward summarizes the change in development loan receivables from the Spin-Off through September 30, 2025:


		Nine months ended,
(in thousands)		September 30 2025
Development loan receivables, net
Beginning balance as of February 7, 2025 Spin-Off date	$		-
Investments in development loans			338,391
Paydowns of development loans			(9,539	)
Interest receivable paid-in-kind			11,889
Allowance for credit losses			(340	)
Total development loan receivables, net as of September 30, 2025	$		340,401

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 and 2030 Notes and 2032 Notes (collectively, the “Senior Notes”) are recorded as direct deduction of the carrying value of the debt liability and are classified as debt obligations in the Company’s unaudited condensed consolidated balance sheets. The costs are amortized to interest expense over the life of the debt. As of September 30, 2025, issuance costs for the Senior Notes recorded as a direct deduction of debt, net of accumulated amortization recorded to interest expense, were $33.8 million. During the third quarter of 2025, as a result of the August 2025 Offering and the September 2025 Offering (as described below), and in accordance with the First Amendment to DDTL (as described below), the Company fully repaid the remaining outstanding principal balance and interest on the DDTL Credit Facility. As a result, during the third quarter of 2025, the Company derecognized and recorded the remaining unamortized issuance costs of $11.9 million to interest expense in the Company’s condensed consolidated statements of operations.

Financing costs for the Revolving Credit Facility are classified as other assets in the Company’s unaudited condensed consolidated balance sheets as the costs represent a future economic benefit which provides the Company access to capital over the contractual term. As of September 30, 2025, financing costs recorded as other assets, net of accumulated amortization recorded to interest expense, were $7.7 million for the Revolving Credit Facility.

See Note 7. Debt Obligations.

Builder Deposits

Builder deposits are option deposit payments received from customers under the Company’s option contracts. Builder deposits are contract liabilities for obligations to sell finished homesites to customers when the customers exercise their purchase options. Builder deposits are recorded as a liability at the time of customer payment. When the customers exercise their purchase option and acquire the finished homesite, the builder deposits are applied to the total takedown price owed by the customer. The liability is eliminated as takedown payments are made and recorded, along with the cash payment, as a reduction to the carrying amount of the inventory sold on the Company’s balance sheet. If customers do not exercise their purchase options, the deposit is forfeited as per the terms of the option contracts and recorded as income by the Company. The following is a roll forward of the builder deposit liability for the nine months ended September 30, 2025, which reflects activity after the Spin-Off. There were no builder deposits for the Predecessor Millrose Business prior to the Spin-Off.


	Nine months ended,
(in thousands)	September 30, 2025
Builder deposits
Beginning balance as of February 7, 2025 Spin-Off date	$	-
Builder deposits, Spin-Off		584,848
Builder deposits, Rausch land acquisition		90,264
Builder deposits, additions		313,878
Homesite takedowns, options exercised		(114,733	)
Total builder deposits as of September 30, 2025	$	874,257

Development Guarantee Holdback Liability

As of September 30, 2025, the Company recorded a holdback liability of $100 million related to a site improvement guarantee (the “Site Improvement Guarantee Amount”) owed to Rausch pursuant to terms of the transaction documents for the acquisition of the Rausch land assets by the Company (the “Transaction Documents”). The Site Improvement Guarantee Amount is due within ten business days of the date that is the later of (i) two years following February 10, 2025, and (ii) the date on which development of 50% of certain assets subject to the Transaction Documents (the “Guaranteed Assets”) has been completed. The amount to be paid to Rausch pursuant to the Transaction Documents is the Site Improvement Guarantee Amount, less the aggregate amount by which actual development costs exceed the budgeted development costs for the Guaranteed Assets or such lesser amounts as may be designated in writing by Rausch.

Revenue Recognition

Option fee revenues

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

The Company recognizes option fee revenues in accordance with ASC 606, Revenue from Contracts with Customers, using the five-step model:

Identify the contract with a customer.

Identify the performance obligations in the contract.

Determine the transaction price.

Allocate the transaction price to the performance obligations.

Recognize revenue when the performance obligation is satisfied.

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

For the three months ended September 30, 2025 and September 30, 2024, option fee revenues were $170.3 million and $0, respectively. For the nine months ended September 30, 2025 and September 30, 2024, option fee revenues were $391.5 million and $0, respectively. For the three and nine months ended September 30, 2025, option fee revenue earned from Lennar was 84% and 91% of total option fee revenue, respectively, which is calculated per the terms of the Master Option Agreement.

Development loan income

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.

For the three months ended September 30, 2025 and September 30, 2024, development loan income was $8.9 million and $0, respectively. For the nine months ended September 30, 2025 and September 30, 2024, development loan income was $19.5 million and $0, respectively.

Management Fee Expense

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

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

The Management Fee for the three months ended September 30, 2025 was $25.9 million. The Management Fee for the nine months ended September 30, 2025 was $60.0 million, which covers the period from the Spin-Off date of February 7, 2025 through September 30, 2025 based on the number of days that the Management Agreement was in effect.

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. The Company accounts for RSU awards based on the grant date fair

value and records the costs on a straight-line basis over the vesting terms as stock-based compensation expense in operating expenses and as an increase to additional paid in capital. See Note 11. Stock-Based Compensation 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 three and nine months ended September 30, 2024, these expenses were allocated to the Predecessor Millrose Business on a specific identification basis or, when specific identification was not practicable, a proportional cost allocation method primarily based on headcount, usage, or other allocation methods depending on the nature of the services. For the 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. The Company believes the allocation is representative in all material respects to the costs that are directly attributable to the Predecessor Millrose Business for the period from January 1, 2025 through February 7, 2025. Sales, general, and administrative expenses from pre-spin period were $25.0 million for the period of January 1, 2025 through February 7, 2025. Sales, general, and administrative expenses for the three and nine months ended September 30, 2024 were $63.7 million and $180.4 million, respectively.

Predecessor Millrose Business Income Taxes

The basis of accounting for income taxes for the Predecessor Millrose Business for the three and nine months ended September 30, 2025 is unchanged from that disclosed in the notes to the combined financials statements included in Millrose’s Form 10-K for the year ended December 31, 2024. See Note 9. Income Taxes for additional information.

Income Taxes

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

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

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

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

See Note 9. Income Taxes for additional information.

Other Income (Expense)

The Company records revenue and expenses that are not directly related to the core operations of the Company as other income and expense. Other income (expense) for the three months ended September 30, 2025 was $41.9 million expense and included interest expense of $43.7 million for the Revolving Credit Facility, DDTL Credit Agreement, and Senior Notes, other expenses of $0.6 million, offset by interest income of $2.4 million related to cash balances. Other income (expense) for the nine months ended September 30, 2025 was a $52.7 million expense and included interest expense of $56.6 million for the

Revolving Credit Facility, DDTL Credit Agreement, and Senior Notes; other expenses of $1.5 million, offset by interest income of $5.4 million related to cash balances. Interest expense for the three and nine months ended September 30, 2025 included $11.9 million of accelerated issuance cost amortization for the DDTL Credit Agreement as a result of the mandatory prepayment and paydown of the full outstanding principal amount of the loans outstanding under the DDTL Credit Agreement and all other outstanding obligations thereunder with the net proceeds from the September 2025 Offering on the date of such offering. See Note 7. Debt Obligations for further description of the September 2025 Offering.

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, 2025 and December 31, 2024, there were no assets or liabilities measured at fair value on a recurring basis. Cash, option fee receivables, and other current liabilities approximate their fair values due to their short-term nature. The Senior Notes have a recorded value that approximates fair market value, as it bears interest at a rate that approximates fair market value. The Company’s inventories and development loan receivables are stated at cost and are monitored for indicators of impairment. If any such indicators are identified, the inventories and development loan receivables are written down to fair value. As of September 30, 2025 and December 31, 2024, no indicators of impairment were noted.

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 will be effective for the Company’s fiscal year ending December 31, 2027. Early adoption is permitted. The Company has elected not to early adopt and is currently evaluating the potential impact of ASU 2024-03 on its financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”) Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024. The Company does not expect it to have a material effect on its financial statements and disclosures.

Note 3. Business Transactions

Spin-Off from Lennar

On February 7, 2025, the Company completed the Spin-Off from Lennar through a distribution of approximately 80% of Millrose’s common stock to Lennar stockholders. Lennar retained the remaining 20% of total outstanding shares of Millrose’s common stock. The Company assessed the Spin-Off as a nonreciprocal transfer of assets from Lennar to its stockholders and accounted for it under ASC 845, Nonmonetary Transactions. The Company further assessed the assets transferred from Lennar as meeting the definition of a business under ASC 805, Business Combinations. The Company concluded that the transferred assets and activities collectively constitute a business under ASC 805, as they include (i) substantive inputs (homesite inventory and cash), (ii) processes (Lennar services as defined under the Master Program Agreement), and (iii) the capability to produce outputs (option fee income). The Company recorded the assets acquired and liabilities assumed based on the carrying value of these items as they were reflected on Lennar’s books and records as of the closing of the transaction. The strategic rationale for the Spin-Off is documented in Note 1. Description of Business.

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

•

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

•

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

•

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

•

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

•

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

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

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

Acquisition of Rausch Land Assets

On February 10, 2025, the Company completed the acquisition of land from Rausch consisting of approximately 25,000 homesites for approximately $859 million in cash, net of option deposits funded by Lennar and other holdbacks. The Company funded the transactions using cash on hand. The Company assessed the acquired land assets as not meeting the definition of a business under ASC 805, Business Combinations and accounted for the transaction as an asset acquisition. Under ASC 805, Business Combinations, the cost of acquisition is allocated to the assets acquired on a relative fair value basis and no goodwill is recognized. Millrose did not incur transaction costs for the Rausch acquisition.

Land assets acquired were $1.158 billion, consisting of $858.9 million in cash, net of $90.3 million in option deposits, $100.0 million of development guarantee holdbacks, $116.7 million of deferred tax liabilities, and $7.6 million of earnest deposits.

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

New Home Company Transaction

On May 12, 2025, the Company entered into a commitment with New Home for Millrose to provide land banking capital of up to $700 million to support New Home’s acquisition of Landsea. On June 25, 2025, New Home completed the acquisition of Landsea and the Company funded land banking capital of $494.5 million at closing for the acquisition of a portfolio of homesites on which the Company executed option agreements with New Home. As a result of the transaction, the Company acquired $522.8 million in land assets, consisting of 4,186 homesites, for $494.5 million in cash, which is net of deposits of $28.3 million related to the option contracts. The Company assessed the acquired land assets as not meeting the definition of a business under ASC 805, Business Combinations and accounted for the transaction as an asset acquisition. Under ASC 805, Business Combinations, the cost of acquisition is allocated to the assets acquired on a relative fair value basis and no goodwill is recognized.

Note 4. Related Party Transactions

Prior to the Spin-Off, the Company was a wholly owned subsidiary of Lennar. Following the Spin-Off, Millrose is an independent company of which 20% of its shares are owned by Lennar as of September 30, 2025. The primary transactions between the Company and Lennar consist of payments for (i) monthly option payments from Lennar in consideration for its purchase options on properties, (ii) option deposits paid by Lennar for the exclusive purchase option of a property, and (iii) cash payments from Lennar when homesite purchase options are exercised.

As of September 30, 2025, the Company recorded the following related to Lennar in the unaudited condensed consolidated financial statements:

•

Homesite inventory of $7.1 billion;

•

Development loan receivables of $302.7 million, and;

•

Option deposit liabilities of $697 million.

For the three and nine months ended September 30, 2025, the Company derived 85% and 92% of its total operating revenues, respectively, from Lennar. Given the concentration of revenue from Lennar, any significant adverse in Lennar’s financial condition could impact the Company’s operations and financial position. The Company believes it is not exposed to significant credit risk for Lennar as of the date of these unaudited consolidated condensed financial statements.

Following the Spin-Off, the Company is externally managed and advised by KL. The Company pays a Management Fee each quarter as described in Note 2. Basis of Presentation and Significant Accounting Policies, Management Fee. For the three and nine months ended September 30, 2025, the management fee paid to KL was $25.9 million and $60 million, respectively. There were no amounts payable to or amounts receivable from KL as of September 30, 2025.

Note 5. Other Assets

Other assets as of September 30, 2025 and December 31, 2024 were as follows:


	September 30,		December 31,
(in thousands)	2025		2024
Deferred financing costs (1)	$	7,748	$	-
Earnest deposits and prepaid due diligence costs (2)		5,828		-
Other assets (3)		8,515		-
Total other assets	$	22,091	$	-

(1) Deferred financing costs for Revolving Credit Facility.

(2) Includes net earnest deposits of $4.0 million and due diligence costs for Rausch land acquisition of $1.8 million.

(3) Primarily includes prepaid taxes of $8.5 million.

Note 6. Other Liabilities

Other liabilities as of September 30, 2025 and December 31, 2024 were as follows:


	September 30,		December 31,
(in thousands)	2025		2024
Dividend payable (1)	$	121,183	$	-
Seller notes payable (2)		13,000		-
Accrued interest payable (3)		15,730		-
Other accrued liabilities (4)		3,247		-
Total other liabilities	$	153,160	$	-

(1) Payable for dividend declared by the Company on September 22, 2025, and paid on October 15, 2025. See Note 10.

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

(3) Accrued interest payable for Revolving Credit Facility of $0.9 million and Senior Notes of $14.8 million.

(4) Includes accrued issuance costs for Senior Notes of $3.0 million and other deposits of $0.2 million.

Note 7. Debt Obligations

Debt obligations as of September 30, 2025 and December 31, 2024 were as follows:


	September 30,			December 31,
(in thousands)	2025			2024
6.375% senior notes due 2030	$	1,250,000		$	-
6.250% senior notes due 2032		750,000			-
Total debt obligations		2,000,000			-
Debt issuance costs (1)		(33,829	)		-
Total debt obligations, net	$	1,966,171		$	-

(1) Unamortized debt issuance costs.

Revolving Credit Facility

On February 7, 2025, the Company entered into a credit agreement (the “Revolving Credit Agreement”) with a consortium of lenders party thereto JPMorgan Chase Bank, N.A., as administrative agent for the lenders (the “Revolver Agent”). The Revolving Credit Agreement provides for a revolving credit facility (the “Revolving Credit Facility”) with commitments in an aggregate amount of $1.335 billion. There were no outstanding borrowings under the Revolving Credit Facility as of September 30, 2025. Availability under the Revolving Credit Agreement is subject to a borrowing base updated

quarterly (or, at the Company’s option, monthly), which is calculated by reference to the value of certain real property assets, with advance rates that vary by asset category, and unrestricted cash and cash equivalents, with adjustments as specified in the Revolving Credit Agreement. The Revolving Credit Facility may be used by the Company to borrow loans or obtain standby letters of credit.

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

Obligations under the Revolving Credit Agreement are secured by pledges by Millrose of (i) the promissory notes MPH Parent and certain of its subsidiaries to Millrose (the “Promissory Notes”), and (ii) the equity interests of Millrose Holdings. In addition, the Revolving Credit Agreement requires the Company to pledge (i) certain future promissory notes similar to the Promissory Notes that Millrose may enter into with other subsidiaries and (ii) the equity interests of any other subsidiaries whose equity interests are not pledged for the benefit of the Promissory Notes or any other similar promissory note or notes. Pursuant to an intercreditor agreement (the “ICA”), dated as of June 24, 2025, by and among the DDTL Administrative Agent (as defined below) and the Revolver Agent, the DDTL Administrative Agent and the Revolver Agent agreed that certain liens on Shared Collateral (as defined in the ICA) securing the DDTL Credit Agreement (as defined below) and the Revolving Credit Agreement were of equal priority, and certain distributions made in respect of Shared Collateral were shared on a ratable basis. The ICA was terminated in connection with the prepayment of all outstanding obligations under the DDTL Credit Agreement.

On August 1, 2025, Millrose Properties SPE LLC, a subsidiary of the Company (“Millrose Properties SPE”), was joined as a guarantor to the Revolving Credit Agreement. As of September 30, 2025, there were no other guarantors under the Revolving Credit Agreement. The Company may elect to join certain of our subsidiaries to the Revolving Credit Agreement as guarantors from time to time and, in certain circumstances, the Revolving Credit Agreement requires the Company to cause certain other subsidiaries that are not Taxable REIT Subsidiaries (as defined in the Revolving Credit Agreement) to become guarantors.

The Revolving Credit Agreement includes affirmative and negative covenants applicable to the Company and its subsidiaries, including limitations regarding liens, investments, asset sales, transactions with affiliates, restrictive agreements, mergers and other fundamental changes, permitted lines of business, financial contracts, and designation of unrestricted subsidiaries. The Revolving Credit Agreement contains financial covenants, tested quarterly, consisting of a maximum Leverage Ratio, a minimum interest coverage ratio, and a minimum tangible net worth. The Revolving Credit Agreement also requires the Company to maintain its status as a REIT. As of September 30, 2025, the Company was in compliance with all covenants under the Revolving Credit Agreement.

The Revolving Credit Agreement contains events of default, including if KL shall cease to be the Company’s manager and a replacement manager reasonably acceptable to the Required Lenders (as defined in the Revolving Credit Agreement) is not appointed within 90 days.

The Revolving Credit Agreement is scheduled to mature on February 7, 2028 (the “ Revolving Maturity Date”). Principal amounts and other obligations outstanding under the Revolving Credit Facility are due in full on the Revolving Maturity Date. Interest on each drawdown is due quarterly for loans bearing interest at the Alternate Base Rate and on the last day of the applicable interest payment date for loans bearing interest at the Adjusted Term SOFR Rate.

There was no outstanding principal balance under the Revolving Credit Facility at September 30, 2025. Interest expense for the three months ended September 30, 2025 was $3.8 million, which included $3.0 million of interest and $0.8 million of amortized deferred financing fees. Interest expense for the nine months ended September 30, 2025 was $15.3 million, which included $13.2 million of interest and $2.1 million of amortized deferred financing fees. Interest payments for the three and nine months ended September 30, 2025 were $3.5 million and $12.2 million, respectively. The outstanding interest payable at September 30, 2025 was $0.9 million and is classified in other liabilities in the Company’s unaudited condensed consolidated balance sheets.

Delayed Draw Term Loan Facility

On June 24, 2025, the Company entered into a credit agreement (as amended, the “DDTL Credit Agreement”) with the lenders party thereto and Goldman Sachs Bank USA as administrative agent for the lenders (in such capacity, the “DDTL Administrative Agent”). The DDTL Credit Agreement provided for a delayed draw term loan facility (the “DDTL Credit Facility”) with commitments in an aggregate amount of $1.0 billion. Proceeds of the Acquisition Tranche Loans (as defined in the DDTL Credit Agreement) were used to finance the previously announced a

Millrose Properties, Inc. 10-Q