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Millrose Properties, Inc.

Millrose Properties, Inc.MRPEarnings & Financial Report

NYSE · Real Estate · Real Estate

Millrose Properties, Inc. is a U.S.-based real estate enterprise primarily focused on the acquisition, ownership, operation, and management of income-generating multi-family residential assets. Its core markets span the U.S. Mid-Atlantic and Southeast regions, and it also offers professional property management services to select third-party property owners.

What changed in Millrose Properties, Inc.'s 10-K — 2024 vs 2025

Top changes in Millrose Properties, Inc.'s 2025 10-K

913 paragraphs added · 1245 removed · 481 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

46 edited+107 added−260 removed8 unchanged
Invest in Future Property Assets that are free from liens and encumbrances or material transfer restrictions and without pending moratoriums on building or development on the property; provided, however, that the real estate assets may be subject to Community Development Districts (CDDs), Mello-Roos Community Facilities Districts (CFDs) (California), Municipal Utility Development Districts (MUDDs) (Texas), or other special-purpose districts or special taxing districts used to finance public improvements and infrastructure. 7.
Invest in property assets that are free from liens and encumbrances or material transfer restrictions and without pending moratoriums on building or development on the property; provided, however, that the real estate assets may be subject to Community Development Districts (CDDs), Mello-Roos Community Facilities Districts (CFDs) (California), Municipal Utility Development Districts (MUDDs) (Texas), or other special-purpose districts or special taxing districts used to finance public improvements and infrastructure. 7.
Ensure execution of construction agreement allocating responsibility to counterparty for completion of all sitework and guarantee of costs in excess of budget. 4. Ensure execution of an option agreement on or prior to closing with a defined Takedown Schedule. 5. Invest in Future Property Assets with a primary planned use as Homesites for single-family detached and/or attached homes. 6.
Ensure execution of construction agreement allocating responsibility to counterparty for completion of all sitework and guarantee of costs in excess of budget. 4. Ensure execution of an option agreement on or prior to closing with a defined takedown schedule. 5. Invest in property assets with a primary planned use as homesites for single-family detached and/or attached homes. 6.
Because we are a public company, we also must comply with the Exchange Act. Environmental Matters We have invested, and expect to continue to invest, in real property assets, which are subject to laws and regulations relating to the protection of the environment and human health and safety.
Because we are a public company, we also must comply with the Exchange Act. 22 Environmental Matters We have invested, and expect to continue to invest, in real property assets, which are subject to laws and regulations relating to the protection of the environment and human health and safety.
Invest in Future Property Assets for which there is a satisfactory environmental site assessment dated no earlier than 180 days prior to the date of acquisition of such property. 8. Invest in Future Property Assets that allow builder rights to such assets to be assignable. 9.
Invest in property assets for which there is a satisfactory environmental site assessment dated no earlier than 180 days prior to the date of acquisition of such property. 8. Invest in property assets that allow builder rights to such assets to be assignable. 9.
The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution. Seasonality For a discussion of the seasonality of our business, see “Part II, Item 7.
The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution. Seasonality For a discussion of the seasonality of our business, see “Part II, Item 7.
As competition intensifies, innovative approaches and strategic acquisitions become essential for companies to maintain their competitive edge in this dynamic market environment. Millrose intends to operate in the residential housing finance space, which is generally occupied by residential mortgage REITs and other finance companies deriving revenue from interest income on financing mortgage or other finance arrangements.
As competition intensifies, innovative approaches and strategic acquisitions become essential for companies to maintain their competitive edge in this dynamic market environment. Millrose operates in the residential housing finance space, which is generally occupied by residential mortgage REITs and other finance companies deriving revenue from interest income on financing mortgage or other finance arrangements.
Maintain geographic diversity so that no more than 40% of the total value of the Real Estate Portfolio are concentrated in a single state. 2. Limit Future Property Assets with discretionary entitlements that create unnecessary risk to the projected Takedown Schedules. 3.
Maintain geographic diversity so that no more than 40% of the total value of the Real Estate Portfolio is concentrated in a single state. 2. Limit property assets with discretionary entitlements that create unnecessary risk to the projected takedown schedules. 3.
Under CERCLA and comparable state statutes, persons deemed “responsible parties” are subject to strict liability that, in some circumstances, may be joint and several for the costs of removing or remediating previously disposed wastes (including wastes disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), for damages to natural resources and for the costs of certain health studies.
Under CERCLA and comparable state statutes, persons deemed “responsible parties” are subject to strict liability that, in some circumstances, may be joint and several for the costs of removing or remediating previously disposed wastes (including wastes disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), for damages to natural resources and for the costs of certain health studies.
Future laws, ordinances or regulations may impose material environmental liability. Additionally, our tenant companies’ operations, the existing condition of land when we buy it, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.
Future laws, ordinances or regulations may impose material environmental liability. Additionally, our counterparties' operations and development activities, the existing condition of land when we buy it, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.
Environmental laws and regulations, such as the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), as amended, and analogous state laws, generally impose liability, without regard to fault or legality of the original conduct, on classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment.
Environmental laws and regulations, such as the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), as amended, and analogous state laws, generally impose liability, without regard to fault or legality of the original conduct, on classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment.
Kennedy Lewis’ in-house Land Banking servicer includes professionals with prior experience working at home builders, including Lennar, Hovnanian Enterprises, Inc., Beazer Homes USA Inc., Toll Brothers, Inc., and Woodbridge Builders Corp., as well as Land Banking platforms at DW Partners, LP and Blackstone Credit, the credit investment arm of The Blackstone Group.
Kennedy Lewis’s in-house land banking servicer includes professionals with deep industry experience working at national homebuilders, including Lennar, Hovnanian Enterprises, Inc., Beazer Homes USA Inc., Toll Brothers, Inc., and Woodbridge Builders Corp., as well as land banking platforms at DW Partners, LP and Blackstone Credit, the credit investment arm of The Blackstone Group.
Subject to the terms of the Allocation Policy and the requirements for maintaining Millrose’s qualification as a REIT, the Manager may invest as it deems appropriate any proceeds of future offering by Millrose and cash from operations and capital transactions in excess of the amount required for the purchase of Future Property Assets pursuant to these Investment Guidelines may be invested as the Manager deems appropriate, subject to the requirements for maintaining Millrose’s qualification as a REIT.
Subject to the terms of the Allocation Policy and the requirements for maintaining Millrose’s qualification as a REIT, the Manager may invest as it deems appropriate any proceeds of future offerings by Millrose and cash from operations and capital transactions in excess of the amount required for the purchase of property assets.
On February 10, 2025, Millrose completed an acquisition of land consisting of approximately 24,000 Homesites through the acquisition of 100% of the outstanding stock of RCH Holdings, Inc., a newly formed parent holding company of Rausch, for approximately $876 million in cash, which is net of option deposits funded by Lennar and other holdbacks. See “Part 1, Item 2.
On February 10, 2025, we acquired 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, for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks.
However, we believe Millrose’s intended focus specifically on the residential marketplaces it in a less competitive niche of the market, competing with a select number of private investment funds and asset managers providing Land Banking to residential home builders.
However, we believe Millrose’s focus on the residential marketplace is in a less competitive niche, competing with a select number of private investment funds and asset managers providing land banking to residential homebuilders.
With the duration of assets potentially constraining a land bank’s capacity to fund its Land Banking portfolio effectively, the Recycled Capital HOPP’R adopts a proactive approach to portfolio construction, meticulously aligning cash inflows and outflows in an attempt to mitigate duration risk and support sustained financial stability.
The duration of assets potentially constrains a traditional land bank’s capacity to fund its land banking portfolio effectively. Our homesite option platform adopts a proactive approach to portfolio construction, aligning cash inflows and outflows in an attempt to mitigate duration risk and support sustained financial stability.
We believe the capabilities of KL, including its vertically integrated servicing and asset management support division, serve to mitigate risk and add value to Millrose’s investments.
Kennedy Lewis Partnership is a Competitive Advantage We believe the capabilities of Kennedy Lewis, including its vertically integrated servicing and asset management support division, serve to mitigate risk and add value to our investments.
This helps protect Millrose Holdings against Lennar decisions not to purchase particular properties that have declined in value by enabling Millrose Holdings to sell to third parties, free of Lennar’s Purchase Options, other properties in the pool that may have increased in value.
This helps protect Millrose against counterparty decisions not to purchase particular properties that have declined in value by enabling Millrose to sell to third parties, free of counterparty purchase options, other properties in the pool that may have increased in value. Pooling arrangements are structured primarily for diversity across geographies, communities, and home types.
Led by David Valiaveedan, former Vice President of Finance and Treasurer at Hovnanian Enterprises, Inc., a national home builder, this dedicated team provides various value-add asset management services, including: • Asset monitoring: monitor pace of Horizontal Development and community sales; provide ongoing market and project risk assessment, including home sale pricing and pace of sales; regular site visits. • Servicing: disbursements of capital for Horizontal Development, sales of Homesites to home builders and collection of monthly option payments. 43 Table of Contents • Due diligence and transaction support for Kennedy Lewis’ investment team: gather due diligence documents, coordinate closing documents, compile third-party research for analysis, and populate standard templates that drive financial models.
This dedicated team provides various value-add asset management services, including: • Asset monitoring: monitor pace of Land Development and community sales; provide ongoing market and project risk assessment, including home sale pricing and pace of sales; regular site visits. • Servicing: disbursements of capital for Land Development, sales of homesites to homebuilders and collection of monthly option payments. • Due diligence and transaction support: gather due diligence documents, coordinate closing documents, compile third-party research for analysis, and populate standard templates that drive financial models. 19 (1) Assets Under Management ( “AUM”) is based on most recent documented/approved calculations for clients of investment managers affiliated with Kennedy Lewis.
The Takedown Price associated with each property will be the sum of the acquisition price of the property that Millrose Holdings (or its subsidiaries) paid and the predetermined budget that Millrose Holdings would finance in connection with the Horizontal Development of the property.
The takedown price associated with each property is the sum of the acquisition price of the property that Millrose paid and the predetermined budget that Millrose has funded in connection with the development of the property.
Millrose Holdings intends to be treated as a TRS of Millrose. Accordingly, Millrose Holdings will be subject to full entity-level taxation in connection with its business operations. Similarly, we expect that any other TRSs that Millrose may form or acquire in the future will be taxable business entities.
Millrose and MPH Parent made a joint election to treat MPH Parent as a TRS of Millrose. Accordingly, MPH Parent will be subject to full entity-level taxation in connection with its business operations. Similarly, we expect that our other TRSs will be taxable business entities.
The Master Option Agreement, as supplemented by each Project Addendum with respect to the respective properties, sets forth the terms and provisions relating to Lennar’s Purchase Option, including terms relating to Lennar’s Option Deposits, Monthly Option Payments, Takedown Schedules and Takedown Prices associated with each property comprising the Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets, as applicable.
The option contracts, as supplemented by various exhibits or project addenda with respect to the respective properties, set forth the applicable terms and provisions relating to option deposits, monthly option payments, takedown schedules and takedown prices associated with each property.
These Monthly Option Payments are designed to provide Millrose with a recurring cash fixed income revenue base, supporting the goal of ensuring predictable cash distributions to stockholders.
Separately, Millrose receives monthly option payments designed to provide a recurring, cash-consistent income revenue base, supporting our goal of ensuring predictable cash distributions to stockholders. Homesite Development Pursuant to the option agreements, our counterparties are obligated to undertake Land Development on our homesite assets.
Our operations are conducted through Millrose Holdings, a Delaware limited liability company and our wholly-owned operating subsidiary, the Property LLCs and Other Subsidiaries.
Millrose Properties, Inc. is a holding company whose operations are conducted primarily through MPH Parent, a Delaware limited liability company and a wholly owned operating subsidiary of Millrose, and other subsidiaries, including Millrose Holdings, a Delaware limited liability company and a wholly owned operating subsidiary of MPH Parent.
Pursuant to the Multiparty Cross Agreements that form a part of the Master Program Agreement, if Lennar allows its option to expire, Lennar forfeits the Option Deposits for the entire pool with regard to one of the pooled properties, then Millrose Holdings has the right, but not the obligation, to terminate the option on the other pooled assets.
Under these agreements, if the counterparty allows its option to expire with regard to a pooled property, it forfeits the option deposits for the entire pool and Millrose has the right, but not the obligation, to terminate the option on the other pooled assets.
The trending shift of home builders towards a land light strategy and “just in time” operating model requires having access to a sophisticated perpetual financing partner to alleviate balance sheet demands and unlock enterprise value through more efficient capital investment. However, high barriers to entry exist due to the operational and administrative requirements of the land light strategy.
The trending shift of homebuilders towards an asset-light strategy and “just in time” operating model requires having access to a sophisticated perpetual financing partner to unlock enterprise value through more efficient capital investment.
As and when Homesites are purchased by Lennar (or transferred directly to home buyers, at Lennar’s request), Millrose Holdings will collect all pre-negotiated costs for land acquisition and Horizontal Development in the form of take-down payments as consideration for the purchase of finished Homesites.
As and when homesites are purchased, Millrose collects all pre-negotiated costs for land acquisition and development in the form of takedown payments as consideration for the purchase of finished homesites.
As a recycled capital vehicle designed to navigate various market environments, the HOPP’R is intended to be resilient and dependable, poised to redefine the dynamics of Land Banking as an asset class.
As a capital recycling platform, our homesite option strategy is designed to perform across market cycles and to be resilient and dependable, and we believe it is poised to redefine the dynamics of land banking as an asset class.
Item 1. Business General Millrose Properties, Inc. is a corporation incorporated under the laws of the State of Maryland on March 19, 2024 for the purpose of receiving the Business Assets from Lennar and becoming an independent publicly traded company. As of December 31, 2024, the Predecessor Millrose Business was wholly owned by Lennar.
Item 1. Business Overview of Our Company Millrose Properties, Inc. is a corporation incorporated under the laws of the State of Maryland on March 19, 2024 and later spun-off by Lennar.
Additionally, Millrose seeks to address the possibility of entitlement delays, stemming from government approvals, by structuring deals Millrose believes have minimal approval risk, bolstered by stringent underwriting criteria and comprehensive due diligence processes. Development cost risk poses another significant concern to land banks, with the specter of cost overruns threatening to disrupt budgeted expenses.
Additionally, Millrose seeks to address the possibility of entitlement delays, stemming from government approvals, by structuring deals Millrose believes have minimal approval risk, bolstered by stringent underwriting criteria and comprehensive due diligence processes. Investment Guidelines Our Manager acquires property under the following guidelines and conditions, which are set forth in the Management Agreement: 1.
In the event that one community underperforms or faces difficulties, Lennar would risk losing access to the other communities in the same pool if it tried to walk away from the underperforming community in that pool.
The pooling of communities is intended to allow us to use multiple properties as collateral for option agreements, thereby spreading the risk across various assets. In the event that one community underperforms or faces difficulties, counterparties would risk losing their option to purchase the other communities in the same pool if they tried to walk away from the underperforming community.
Horizontal Development includes installing all utilities and infrastructure required to build homes in a community, 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. The land is usually purchased before or when Horizontal Development can commence.
We provide capital for development activities on our owned homesites, including the installation of all necessary infrastructure required to build homes, including drainage, sewage, water lines, roads, sidewalks, utility lines, grading, landscaping and, in certain cases, the construction of rental units, recreational facilities, common area elements and other amenities. This Land Development activity is referred to as Horizontal Development.
Human Capital Management The KL Management Team The Manager is Kennedy Lewis Land and Residential Advisors LLC, an affiliate and wholly-owned subsidiary of Kennedy Lewis. Kennedy Lewis is an institutional alternative investment firm with assets under management in excess of $25 billion, including Millrose, as of March 25, 2025.
Our Manager We are externally managed by KL, an affiliate of Kennedy Lewis, an institutional alternative investment firm with assets under management in excess of $33.0 billion, including Millrose, as of December 31, 2025.
Certain Relationships and Related Transactions, and Director Independence—Transactions with our Manager.” Millrose’s Organizational Structure An illustrative summary organizational chart of Millrose’s corporate structure, including state of incorporation or formation, and each entity’s relationships with Lennar and our Manager is below: 44 Table of Contents Compliance with Governmental Laws and Regulations, including those relating to Environmental Matters Because we operate as a REIT and own real estate properties, we are required to comply with various governmental laws and regulations, including those relating to environmental matters.
Compliance with Governmental Laws and Regulations, including those relating to Environmental Matters Because we operate as a REIT and own real estate properties, we are required to comply with various governmental laws and regulations, including those relating to environmental matters.
Millrose intends to elect to be treated as a REIT for U.S. federal income tax purposes, beginning with its first taxable year for the year ending December 31, 2025.
Our operations are conducted in the United States. As of December 31, 2025, we had 142,139 homesites in 933 properties (also known as communities) across 30 states. We intend to elect to be treated as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2025.
On February 7, 2025, Millrose completed a Spin-Off of the Predecessor Millrose Business from Lennar and became an independent publicly traded company listed on the NYSE. The Spin-Off was effected by the distribution of approximately 80% of the outstanding shares of Millrose common stock to holders of Lennar common stock on the Distribution Date.
Spin-Off and Other Significant Business Transactions On February 7, 2025, we completed our Spin-Off from Lennar through a distribution of approximately 80% of our Common Stock to holders of Lennar common stock as of the close of business on January 21, 2025.
Neither Millrose nor any of its subsidiaries will be responsible for maintaining any insurance with respect to the Homesites or anything constructed on the Homesites, except for general liability insurance as described herein under “Part I, Item 2.
Neither Millrose nor any of its subsidiaries are responsible for maintaining any insurance with respect to the homesites or anything constructed on the homesites. Exercise of the Option to Purchase Finished Homesites Once the land is developed and homesites are finished, our counterparties exercise their options to purchase the homesites.
The Competitive Landscape The Land Banking market is characterized by a competitive landscape shaped by various entities ranging from real estate developers to alternative investment asset managers. Key players such as Kennedy Lewis, Angelo, Gordon & Co. L.P.
Competition The land banking market is characterized by a competitive landscape shaped by various entities ranging from real estate developers to alternative investment asset managers. Our major competitors are some of the more significant participants in the market, each offering unique structures tailored to meet the expanding needs of homebuilders and land developers.
Millrose Holdings funds the Horizontal Development of the land, up to the predetermined maximum budgets set forth in the respective Project Addenda, and Lennar uses such funds for completing the Horizontal Development. Lennar can complete home construction on the Homesites as well, at its option. • Purchase by Builder.
Millrose is solely responsible for funding Land Development up to the predetermined budgets for each property as set forth in the relevant option agreement. If our counterparty undertakes home construction on the homesites prior to exercising its option, the cost of all home construction is borne by the counterparty and not Millrose.
Pools will be established with primary consideration given to diversity within pools across geographies, communities and home types. • Purchase Option of Lennar with respect to the Transferred Assets, the Supplemental Transferred Assets and Future Property Assets Pursuant to the Lennar Agreements, Lennar has the right but not the obligation to purchase Homesites from the Transferred Assets and the Supplemental Transferred Assets and to purchase any Future Property Assets at predetermined respective Takedown Prices and on predetermined respective Takedown Schedules.
Purchase Option on Homesite Assets Pursuant to the option agreements, our counterparties have the right but not the obligation to purchase finished homesites at predetermined takedown prices and on predetermined takedown schedules.
Pursuant to the Lennar Agreements, Millrose, through Millrose Holdings and the Property LLCs, own the Transferred Assets and the Supplemental Transferred Assets, and will own any Future Property Assets, while Lennar performs its Work, and then (assuming Lennar’s exercise of its Purchase Options) the finished Homesites will be purchased by Lennar.
Millrose owns the land assets, while the counterparty performs its work, and then (assuming the counterparty’s exercise of its purchase options) the finished homesites are purchased by the counterparty. 13 Our counterparties oversee and execute Land Development and provide related completion and cost guarantees to Millrose.
Millrose Holdings also does not have the right to force Lennar to undertake or complete home construction on any Homesite. • For as long as Lennar maintains its Purchase Options with respect to any Homesites, it will be responsible for maintaining insurance coverage with respect to all Work and home construction on the Homesites. • Lennar exercises its Purchase Option to acquire finished Homesites at the prices and timing detailed in the Master Option Agreement and related Project Addenda. • At Lennar’s request, Millrose Holdings may deliver the Homesites to home buyers directly and will be indemnified by Lennar. • Failure to acquire Homesites as agreed results in (1) forfeiture of the Initial Deposit portion of the Option Deposit, (2) loss of the right to acquire future Homesites, (3) payment by Lennar of the Additional Deposit portion of the Option Deposit (unless already paid to Millrose Holdings in connection with Millrose Holdings’ call option exercise), (4) Lennar being required to complete Work on the Homesites even if not selling homes and (5) loss of the right to buy other Homesites in the pool. • Terminations of any Purchase Option with respect to any property may impact the entire pool in which the property sits if Millrose Holdings exercises its cross-termination rights, subject to the fee building exception. 36 Table of Contents The following diagram illustrates the life cycle of our finance model with respect to the Transferred Assets and the Supplemental Transferred Assets and to any Future Property Assets to be purchased by Millrose Holdings or a future Millrose subsidiary at Lennar’s request pursuant to the Master Program Agreement (except, with respect to the Transferred Assets, the initial land purchase descriptions do not apply as the Transferred Assets were transferred to Millrose Holdings and are held by the Property LLCs in connection with the Spin-Off): Illustrative Cash Flows • Option Deposit and Monthly Option Payments.
Counterparty is contractually obligated to complete development of land into finished homesites. ▪ At its election, a counterparty may commence or complete home construction on the homesites prior to purchase. ▪ Counterparty exercises its purchase option to acquire finished homesites at the prices and timing detailed in the applicable option contract. ▪ At counterparty’s request, Millrose may deliver the homesites to home buyers directly and will be indemnified by counterparty. ▪ Failure to acquire homesites as agreed results in (1) forfeiture of the option deposit, (2) loss of the right to acquire future homesites, (3) counterparty being required to complete the Land Development on the homesites even if not selling homes and (4) loss of the right to buy other homesites in the pool, where applicable. 14 Land Purchase Land Development Homesite Acquisition ▪ The majority of homesite assets are pooled pursuant to one or more option contracts.
In the event Lennar terminates, forfeits or otherwise fails to exercise its Purchase Options, then in addition to paying any portion of the Additional Deposit (that is still unpaid) as a termination fee, Lennar will be subject to the cross-termination provisions of the Multiparty Cross Agreements.
In the majority of our option agreements, if the counterparty terminates, forfeits or otherwise fails to exercise its purchase option, the counterparty is subject to payment of a termination fee and forfeiture of its option deposit, and Millrose may sell the homesites to a third-party buyer.
In connection with the Spin-Off, Millrose Holdings (directly or through one or more Property LLCs) executed various Project Addenda, pursuant to which the Transferred Assets are subject to the Master Program Agreement and Master Option Agreement.
The Master Program Agreement covers the assets transferred by Lennar to Millrose at the time of the Spin-Off as well as other future property assets to be acquired pursuant to the Master Option Agreement and related project addenda, Master Construction Agreement, and other related programmatic agreements with Lennar.
Assets under management is based on the most recent documented/approved calculations for clients of investment managers affiliated with Kennedy Lewis and the assets under management of private funds includes funded and unfunded commitments. It was founded in 2017 and is headquartered in New York City with additional offices in Miami, Florida and Geneva, Switzerland.
Kennedy Lewis was founded in 2017 and is headquartered in New York City, with additional offices in Miami, Florida and Geneva, Switzerland, as well as an asset servicing arm with offices in Scottsdale, Arizona and Philadelphia, Pennsylvania.
We provide, through our subsidiaries, an operational and capital solution for home builders and land development companies to finance the acquisition and development of land assets through our Homesite Option Purchase Platform (known as the HOPP’R).
Our Business We provide an operational and capital solution for homebuilders and Land Development companies to enable the acquisition and development of entitled finished homesites. We operate through a comprehensive and proprietary suite of systems and procedures to operate and manage the acquisition, funding and development of entitled homesites on a large scale.
The Transferred Assets and the Supplemental Transferred Assets are already subject to the Master Option Agreement. • The Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets will be pooled pursuant to one or more Multiparty Cross Agreements. • Lennar undertakes and completes all Work on each Homesite comprising the Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets pursuant to the Master Construction Agreement and related Project Addenda. • Millrose Holdings pays for the costs of the Horizontal Development as set forth in the Project Addenda. • Lennar is responsible for any cost overruns in excess of the maximum development cost agreed at closing.
The Manager conducts an independent diligence assessment for each transaction in accordance with the Investment Guidelines, including financial, market, entitlement, and environmental reviews. ▪ At each new property closing, Millrose grants a counterparty purchase option to acquire the finished homesites at set prices and schedules. ▪ Such purchase options require counterparties to pay the option deposit, representing the counterparty’s commitment to the project. ▪ Counterparty undertakes and completes Land Development on each homesite pursuant to the applicable option agreement. ▪ Millrose pays for the costs of the Land Development as set forth in the applicable agreements. ▪ Counterparty is responsible for any cost overruns in excess of the maximum development cost agreed at closing.
Removed
Properties” for more information on the Transferred Assets and Supplemental Transferred Assets acquired by Millrose in connection with the Spin-Off and the Supplemental Transferred Assets Transaction, and Note 8 to the Combined Audited Financial Statements of the Predecessor Millrose Business for more information related to the Spin-Off and the Supplemental Transferred Assets Transaction.
Added
The Spin-Off was completed on February 7, 2025, at which time we became an independent, publicly traded company and our Class A common stock was listed on the New York Stock Exchange under the symbol “MRP”. Millrose purchases and develops residential land and sells finished homesites to homebuilders by way of option contracts with predetermined costs and takedown schedules.
Removed
The HOPP’R is a comprehensive suite of systems and procedures developed to operate and manage the acquisition, financing and development of land assets on a large scale. Millrose is a holding company without any operations of its own.
Added
We serve as a solution for homebuilders seeking to expand access to finished homesites while implementing an asset-light strategy. Our option contracts provide for the payment of recurring cash option fees as compensation for the capital and operational solution delivered by the Millrose platform.
Removed
We are externally managed by our Manager with personnel provided by our Manager and officers recommended by our Manager and appointed by our Board serving as all officers and employees of, and performing all business operations for, Millrose, Millrose Holdings, the Property LLCs and any Other Subsidiaries.
Added
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, we also provide development loans secured by property intended for residential use.
Removed
For the year ended December 31, 2024, the Predecessor Millrose Business did not operate as a separate operating or reportable segment.
Added
We are externally managed and advised by our Manager, Kennedy Lewis Land and Residential Advisors LLC, pursuant to the Management Agreement between Millrose and KL entered into on February 7, 2025. Core to our value offering is our technology platform, a proprietary land banking data warehouse and enterprise resource planning (ERP) system developed and deployed by our Manager.
Removed
Starting in the year ended December 31, 2025, Millrose will operate as one operating and reportable segment, Homesite Revenue, with properties geographically located in the following regions across the United States as of March 25, 2025: East (Alabama, Delaware, Florida, New Jersey and Pennsylvania) Central (Georgia, Illinois, Indiana, Kansas, Maryland, Minnesota, Missouri, North Carolina, South Carolina, Tennessee, Virginia, West Virginia and Wisconsin) South (Arkansas, Oklahoma and Texas) West (Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington) Millrose intends to elect to be treated as a REIT for U.S. federal income tax purposes beginning with its taxable year ending December 31, 2025.
Added
Our technology uniquely empowers us to perform fast, accurate due diligence, process a high volume of transactions, and manage assets across diverse geographies. We have one reportable segment that derives revenue primarily from our portfolio of homesites under option contracts. To a lesser extent, we earn interest income on the outstanding loan balance of development loans secured by residential property.
Removed
Because all of the land acquisition and development activity in connection with providing the HOPP’R to our customers (including with respect to the Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets for Lennar and with respect to any potential Future Property Assets for any Lennar Related Ventures and Other Customers) will be conducted through one or more TRSs, we anticipate that all such activity will be subject to U.S. federal income tax at the entity level. 21 Table of Contents Overview of Millrose’s Business Objectives Millrose’s business is to provide financing of land acquisition and Horizontal Development through the HOPP’R to home builders and land developers, based on a unique recycled capital model intended to accelerate home builders’ land light strategies either through the Lennar Agreements or through other agreements with potential future Lennar Related Ventures and Other Customers that are negotiated on Millrose’s behalf by our Manager.
Added
In connection with the Spin-Off, we received a contribution from Lennar of approximately $5.5 billion in land assets, representing approximately 87,000 homesites, and cash of approximately $1.0 billion, which included $585 million of cash deposit liabilities related to option contracts with Lennar.
Removed
Following the Spin-Off, we have initially provided the Recycled Capital HOPP’R, principally to Lennar, which is designed to provide Lennar with reliable, consistent and uninterrupted access to capital, even during periods of market downturn or continued periods of depressed market conditions, subject to the assumptions and other risks described in this Form 10-K.
Added
In addition, Millrose entered into the Revolving Credit Agreement with a commitment amount of up to $1.335 billion (together with the Revolving Credit Agreement, the “Revolving Credit Facility”) that is scheduled to mature on February 7, 2028.
Removed
Millrose has engaged and continues to engage in discussions with other home builders who are interested in becoming new customers, but there is no guarantee that Millrose will continue to be successful in negotiating agreements with such customers and there is no guarantee that Millrose will be able to secure any business arrangements with any home builders outside of Lennar in any given timeframe.
Added
On May 12, 2025, we entered into a commitment with the 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”).
Removed
Our Recycled Capital HOPP’R is a result of the initial contributions of the Business Assets from Lennar, which allows us to use the proceeds from the payment of Option Deposits and the exercise of Purchase Options to finance the acquisition of Future Property Assets and the Horizontal Development of Future Property Assets without having to repay the value of the initial contribution.
Added
On June 25, 2025, New Home completed the acquisition of Landsea and we funded land banking capital of $494.5 million at closing, acquiring a portfolio of homesites, subject to option agreements with New Home.
Removed
This cycle is expected to repeat, allowing us a steady flow of capital, assuming Lennar’s continued and timely exercise of the Purchase Options on the timelines set forth in the applicable Project Addenda and continued payments of Option Deposits when Future Property Assets are acquired pursuant to the Lennar Agreements.
Added
As a result of the transaction, we 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. 11 In connection with the New Home transaction, on June 24, 2025, Millrose entered into the DDTL Credit Agreement that provided for a delayed draw term loan facility (the “DDTL Credit Facility”) with commitments in the aggregate amount of $1.0 billion that was scheduled to mature on June 23, 2026.
Removed
This self-financing reliable cycle is a unique feature of Millrose’s solution to traditional Land Banking, and is made possible by (i) the perpetual use of the HOPP’R to operate and manage the acquisition, financing and Horizontal Development of land assets on a large scale and (ii) Lennar’s initial contribution of the Business Assets in return for equity — allowing Millrose access to assets and cash to finance new land acquisitions without having to repay the initial contribution.
Added
Proceeds of the DDTL Credit Facility 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.
Removed
This Recycled Capital HOPP’R is intended to be accessible to all customers in the residential real estate industry, not just limited to Lennar, and the features unique to the Recycled Capital HOPP’R are designed to allow Millrose to continue financing new transactions with customers both in times of strong market conditions and times of market downturns, therefore supporting the reliable and consistent nature of the structure.
Added
During the third quarter of 2025, we strengthened our capital structure through two senior notes offerings: • On August 7, 2025, we issued $1.25 billion aggregate principal amount of 6.375% senior notes due 2030, using the net proceeds therefrom to repay $500 million principal amount outstanding under the DDTL Credit Facility and $450 million principal amount outstanding under the Revolving Credit Facility, and the remainder was used for general corporate purposes. • On September 11, 2025, we issued $750 million aggregate principal amount of 6.25% senior notes due 2032, using the net proceeds therefrom to repay the entire $500 million remaining principal amount outstanding under the DDTL Credit Facility, and related expenses.
Removed
The ability of Millrose to offer perpetual land acquisition and Horizontal Development financing solutions through the Recycled Capital HOPP’R distinguishes Millrose’s business from those that engage in traditional Land Banking, which is often required to distribute land sale proceeds to investors.
Added
The remainder was used for general corporate purposes.
Removed
Thus, while traditional Land Banking providers generally cannot engage in additional Land Banking without raising new investor funds, leaving them vulnerable to market dynamics and investor preferences, Millrose’s recycled capital structure should provide home builders with consistent access to capital, even during periods of market downturn or continued periods of depressed market conditions, subject to the assumptions and other risks described in this Form 10-K.
Added
On October 10, 2025, Lennar exercised its registration rights pursuant to the Registration Rights Agreement and commenced an offer to exchange the approximately 20% of the total outstanding shares of Class A Common Stock of Millrose that it owned as of September 30, 2025 for outstanding shares of Lennar Class A common stock (the “Exchange Offer”).
Removed
However, there is no guarantee that this financing model will be fully self-financing.
Added
On November 26, 2025, Lennar announced the results of the Exchange Offer through which Lennar accepted an aggregate of 8,049,594 shares of Lennar Class A common stock in exchange for 33,298,754 shares of Class A Common Stock of Millrose. The Exchange Offer was completed on November 28, 2025.
Removed
We entered into the Credit Agreement, which provides for a revolving credit facility with commitments in an aggregate amount of $1.335 billion, and may seek to pursue additional debt financing, all of which may be available to manage cash needs and reduce drag on returns, as well as for use to provide the HOPP’R to Other Customers.
Added
As a result, Lennar now owns a de minimis amount of Common Stock following the completion of the Exchange Offer. For additional discussion, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.
Removed
However, there is no guarantee that such sources of additional cash will be obtained or will be sufficient to cover all of our business growth initiatives. See “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources Following the Spin-Off” for more information.
Added
We have also extended development to vertical construction and may continue to extend capital for construction on owned homesites. Our homesite option platform accelerates homebuilders’ land-light strategies by providing unique access to uninterrupted capital through the continuous deployment and redeployment of takedown proceeds.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

341 edited+114 added−282 removed109 unchanged
Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations. Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and changes in trade policies.
Global economic and political instability, geopolitical conflicts, and changes in U.S. trade policies, including tariffs, could adversely affect our business, financial condition, or results of operations. Our business could be adversely affected by unstable economic and political conditions within the U.S. and foreign jurisdictions, geopolitical conflicts, and changes in U.S. trade policies, including tariffs.
In addition, so long as any shares of Class B common stock are outstanding, Millrose shall not, without the affirmative vote of at least two-thirds of the shares of Class B common stock outstanding, voting separately as a class, issue additional shares of Class B common stock (other than in connection with dividends or other distributions paid with shares of Class B common stock solely to holders of Class B common stock).
In addition, so long as any shares of Class B Common Stock are outstanding, Millrose shall not, without the affirmative vote of at least two-thirds of the shares of Class B Common Stock outstanding, voting separately as a class, issue additional shares of the Class B Common Stock (other than in connection with dividends or other distributions paid with shares of Class B Common Stock solely to holders of Class B Common Stock).
Our Class B common stock will convert automatically into Class A common stock, on a one-for-one basis, upon the approval of the conversion, in whole, but not in part, of all shares of Class B common stock, then outstanding by the holders of a majority of the outstanding shares of Class B common stock.
Our Class B Common Stock will convert automatically into Class A Common Stock, on a one-for-one basis, upon the approval of the conversion, in whole, but not in part, of all shares of our Class B Common Stock, then outstanding by the holders of a majority of the outstanding shares of our Class B Common Stock.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors.
Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make our Class A Common Stock less attractive to certain other investors.
Our Charter provides for an Excepted Holder Limit for the Miller Family to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, up to 12.8% in the aggregate, in value or in number of shares, whichever is more restrictive, of the outstanding shares of our common stock or the outstanding shares of all classes or series of our stock.
Our Charter provides an excepted holder limit for the Miller Family to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, up to 12.8% in the aggregate, in value or in number of shares, whichever is more restrictive, of the outstanding shares of our Common Stock or the outstanding shares of all classes or series of our stock.
Our Charter provides that our Board may revoke or otherwise terminate our REIT election if it determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT, without stockholder approval.
Our Charter provides that our Board may revoke or otherwise terminate our REIT election if our Board determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT, without stockholder approval.
The duties of directors of Maryland corporations do not require them to (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholder rights plan, (c) make a determination under the Maryland Business Combination Act, or (d) act or fail to act solely because of the effect the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition.
The duties of directors of Maryland corporations do not require them to (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholder rights plan, (c) make a determination not to apply the Maryland Business Combination Act, or (d) act or fail to act solely because of the effect the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition.
To qualify for this deduction, the U.S. stockholder receiving such dividends must hold the dividend-paying REIT stock for at least 46 days taking into account certain special holding period rules) of the 91-day period beginning 45 days before the stock becomes ex-dividend and cannot be under an obligation to make related payments with respect to a position in substantially similar or related property.
To qualify for this deduction, the U.S. stockholder receiving such dividends must hold the dividend-paying REIT stock for at least 46 days (taking into account certain special holding period rules) of the 91-day period beginning 45 days before the stock becomes ex-dividend and cannot be under an 55 obligation to make related payments with respect to a position in substantially similar or related property.
Our Bylaws designate any state court of competent jurisdiction within the State of Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other agents.
Our Bylaws designate any state court of competent jurisdiction within the State of Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other agents.
As a public company, we are subject to the reporting requirements of applicable laws and regulations, including the Exchange Act, Sarbanes-Oxley Act and Dodd-Frank Act, and the rules and regulations of the NYSE, which impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
As a public company, we are subject to the reporting requirements of applicable laws and regulations, including the Exchange Act, Sarbanes-Oxley Act and Dodd-Frank Act, and the rules and regulations of the NYSE, which impose various requirements on listed companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
As a result, the holders of our Class B common stock may have the ability to control the outcome of certain matters requiring stockholder approval for the foreseeable future, including the election of directors, even if their stock holdings represent less than a majority of the outstanding shares of our common stock.
As a result, the holders of the Class B Common Stock may have the ability to control the outcome of certain matters requiring stockholder approval for the foreseeable future, including the election of directors, even if their stock holdings represent less than a majority of the outstanding shares of Common Stock.
This influence may adversely affect the market price of our Class A common stock and in turn the value of our Class B common stock. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.
This influence may adversely affect the market price of Class A Common Stock and the value of the Class B Common Stock. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our Common Stock that you may feel are in your best interest as one of our stockholders.
The sales of significant amounts of our Class A common stock, or the perception in the market that this may occur, may result in the lowering of the market price of our Class A common stock, and in turn the value of our Class B common stock, which may have a material adverse effect on our business, financial condition and results of operations.
The sales of significant amounts of our Class A Common Stock, or the perception in the market that this may occur, may result in the lowering of the market price of our Class A Common Stock, and value of our Class B Common Stock, which may have a material adverse effect on our business, financial condition and results of operations.
Therefore, we may fail to qualify as a REIT if the dividends from all of our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year.
We may fail to qualify as a REIT if the dividends from all of our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year.
In addition, while we do not currently expect to issue any additional shares of Class B common stock, and any such issuance requires the approval of the holders of the Class B common stock, any future issuances of Class B common stock would be dilutive to both holders of our Class A common stock and Class B common stock.
In addition, while we do not currently expect to issue any additional shares of our Class B Common Stock, and any such issuance requires the approval of the holders of our Class B Common Stock, any future issuances of our Class B Common Stock would be dilutive to both holders of our Class A Common Stock and our Class B 48 Common Stock.
For many reasons, including the risks identified in this Form 10-K, the market price of our Class A common stock may volatile. These factors may result in short or long-term negative pressure on the value of our common stock.
For many reasons, including the risks identified in this Form 10-K, the market price of our Class A Common Stock may be volatile. These factors may result in short or long-term negative pressure on the value of our Common Stock.
Under Maryland law, a Maryland corporation generally may not make a distribution (including a dividend or redemption) if, after giving effect to the distribution, the corporation would not be able to pay its debts as the debts become due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the dividend, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution.
Under Maryland law, a Maryland corporation generally may not make a distribution (including a dividend or redemption) if, after giving effect to the distribution, the corporation would not be able to pay its debts as the debts become due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the dividend, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution.
Moreover, under the MGCL, the act of a director of a Maryland corporation relating to or affecting an acquisition or potential acquisition of control is not subject to any higher duty or greater scrutiny than is applied to any other act of a director.
Moreover, under the MGCL, the act of a director of a Maryland corporation 51 relating to or affecting an acquisition or potential acquisition of control is not subject to any higher duty or greater scrutiny than is applied to any other act of a director.
In addition to any applicable anti-takeover defense measure provisions afforded under Maryland law, our Charter and Bylaws include certain provisions that may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination or an acquisition of Millrose, including provisions that: • authorize our dual-class capital structure, which provides our holders of Class B common stock with the ability to significantly influence the outcome of certain matters requiring stockholder approval, even if they own less than a majority of our outstanding shares of common stock; • for so long as there are any shares of Class B common stock outstanding, require a supermajority vote of the holders of our common stock, voting together without regard to class, to amend our Charter; 81 Table of Contents • provide that vacancies on the Board be filled only by a majority of the directors then serving, even though less than a quorum and whether or not resulting from an increase in the size of the Board, and not by stockholders; • permit the removal of a director or the entire Board only by the affirmative vote of two-thirds of the holders of the votes entitled to be cast in the election of directors; • prohibit cumulative voting; • permit amendments to the Charter, without stockholder approval, to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series we have authority to issue; • permit issuances of authorized but unissued common stock without stockholder approval (other than, except for distributions of Class B common stock to holders of Class B common stock, additional issuances of Class B common stock); • authorize undesignated, or “blank check,” preferred stock, which may contain voting, liquidation, dividend and other rights senior to our common stock and shares of which may be issued without the approval of the holders of our common stock; • establish advance notice procedures for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting or special meeting of stockholders; and • specify that only our Board, the chair of our Board, our chief executive officer or president or, upon the written request of stockholders entitled to cast not less than a majority of the votes entitled to be cast, our secretary can call special meetings of our stockholders.
In addition to any applicable anti-takeover defense measure provisions afforded under Maryland law, our Charter and Bylaws include certain provisions that may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination or an acquisition of Millrose, including provisions that: • authorize our dual-class capital structure, which provides our holders of our Class B Common Stock with the ability to significantly influence the outcome of certain matters requiring stockholder approval, even if they own less than a majority of our outstanding shares of Common Stock; • for so long as there are any shares of our Class B Common Stock outstanding, require a supermajority vote of the holders of our Common Stock, voting together without regard to class, to amend our Charter; • provide that vacancies on the Board be filled only by a majority of the directors then serving, even though less than a quorum and whether or not resulting from an increase in the size of the Board, and not by stockholders; • permit the removal of a director or the entire Board only by the affirmative vote of two-thirds of the holders of the votes entitled to be cast in the election of directors; • prohibit cumulative voting; • permit amendments to the Charter, without stockholder approval, to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series we have authority to issue; • permit issuances of authorized but unissued Common Stock without stockholder approval (other than, except for distributions of our Class B Common Stock to holders of our Class B Common Stock, additional issuances of our Class B Common Stock); • authorize undesignated, or “blank check,” preferred stock, which may contain voting, liquidation, dividend and other rights senior to our Common Stock and shares of which may be issued without the approval of the holders of our Common Stock; • establish advance notice procedures for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting or special meeting of stockholders; and • specify that only our Board, the chair of our Board, our chief executive officer or president or, upon the written request of stockholders entitled to cast not less than a majority of the votes entitled to be cast, our secretary can call special meetings of our stockholders.
Although S&P Dow Jones, a provider of widely followed stock indices, reversed its prior decision to exclude companies with multiple share classes, such as ours, in certain of their indices, and we have been included in the S&P SmallCap 600, there is no guarantee that our Class A common stock will be included in any additional Standard and Poor’s index, despite their eligibility.
Although S&P Dow Jones, a provider of widely followed stock indices, reversed its prior decision to exclude companies with multiple share classes, such as ours, in certain of their indices, and we have been included in the S&P SmallCap 600, there is no guarantee that our Class A Common Stock will be included in any additional Standard and Poor’s index, despite their eligibility.
Additionally, any merger, consolidation, sale of all or substantially all of our assets or other business combination involving Millrose that is submitted for approval of the Millrose’s stockholders must be approved by both (i) a majority of the voting power of the votes entitled to be cast by all stockholders of Class A common stock and Class B common stock, voting together without regard to class, and (ii) a majority of the total outstanding votes entitled to be cast by all stockholders of Class B common stock, voting as a separate class.
Additionally, any merger, consolidation, sale of all or substantially all of our assets or other business combination involving Millrose that is submitted for approval of the Millrose’s stockholders must be approved by both (i) a majority of the voting power of the votes entitled to be cast by all stockholders of Class A Common Stock and Class B Common Stock, voting together without regard to class, and (ii) a majority of the total outstanding votes entitled to be cast by all stockholders of Class B Common Stock, voting as a separate class.
Any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business.
Any failure to maintain that adequacy, or consequent inability to produce accurate 57 financial statements on a timely basis, could increase our operating costs and harm our business.
For example, if Millrose fails to satisfy the 75% gross income test, and yet has maintained its qualification as a REIT because certain other requirements have been met, we may be subject to a 100% tax on the net income attributable to the product of (i) the amount of gross income by which it fails the 75% gross income test and (ii) a fraction intended to reflect Millrose’s profitability.
For example, if Millrose fails to satisfy the 75% gross income test, and yet has maintained its qualification as a REIT because certain other requirements have been met, we may be subject to a 100% tax on the net income attributable to the product of (i) the amount of gross income by which it fails the 75% gross income test and (ii) a fraction intended to reflect Millrose’s profitability.
These tax liabilities, if material, would diminish the amount of income earned through a TRS that would be distributable to Millrose and ultimately to our stockholders.
These tax 54 liabilities, if material, would diminish the amount of income earned through a TRS that would be distributable to Millrose and ultimately to our stockholders.
Our Bylaws currently provide that unless we consent in writing to the selection of an alternative forum, only a state court of competent jurisdiction within the State of Maryland, or, if such state courts do not have jurisdiction, the United States District Court located within the State of Maryland, will be the sole and exclusive forum for: (1) any Internal Corporate Claim, as such term is defined in the MGCL, or any successor provision thereof, and any action or proceeding asserting any Internal Corporate Claim, including without limitation: (i) any derivative action or proceeding brought on behalf of Millrose, other than any action arising under federal securities laws, (ii) any claim, or action or proceeding asserting a claim, based on an alleged breach of any duty owed by any director or officer or other employee of Millrose to Millrose or to the stockholders of Millrose, or (iii) any claim, or any action or proceeding, asserting a claim, against Millrose or any director or officer or other employee of Millrose arising under or pursuant to any provision of the MGCL or our Charter or our Bylaws, or (2) any action or proceeding asserting a claim against Millrose or any director or officer or other employee of 83 Table of Contents Millrose that is governed by the internal affairs doctrine of Maryland law.
Our Bylaws currently provide that unless we consent in writing to the selection of an alternative forum, only a state court of competent jurisdiction within the State of Maryland, or, if such state courts do not have jurisdiction, the United States District Court located within the State of Maryland, will be the sole and exclusive forum for: (1) any Internal Corporate Claim, as such term is defined in the MGCL, or any successor provision thereof, and any 52 action or proceeding asserting any Internal Corporate Claim, including without limitation: (i) any derivative action or proceeding brought on behalf of Millrose, other than any action arising under federal securities laws, (ii) any claim, or action or proceeding asserting a claim, based on an alleged breach of any duty owed by any director or officer or other employee of Millrose to Millrose or to the stockholders of Millrose, or (iii) any claim, or any action or proceeding, asserting a claim, against Millrose or any director or officer or other employee of Millrose arising under or pursuant to any provision of the MGCL or our Charter or our Bylaws, or (2) any action or proceeding asserting a claim against Millrose or any director or officer or other employee of Millrose that is governed by the internal affairs doctrine of Maryland law.
If that occurs, Millrose will no longer be authorized to issue Class B common stock. Individual shares of Class B common stock cannot be converted into Class A common stock.
If that occurs, Millrose will no longer be authorized to issue our Class B Common Stock. Individual shares of our Class B Common Stock cannot be converted into our Class A Common Stock.
Dividends will be authorized by our Board and declared by us based upon a number of factors, including actual results of operations, restrictions under Maryland law or applicable debt covenants, our financial condition, our taxable income, the annual distribution requirements under the REIT provisions of the Code, our operating expenses and other factors our Board deems relevant.
Dividends will be authorized by our Board and declared by us based upon a number of factors, including actual results of operations, restrictions under Maryland law or applicable debt covenants, our financial condition, our taxable income, the annual distribution requirements under the REIT Requirements, our operating expenses and other factors our Board deems relevant.
These fair market values will depend, at least in part, on the values of our TRSs’ land assets, some of which will not be susceptible to a precise determination given their undeveloped nature, and for which we will not obtain independent appraisals.
These fair market values depend, at least in part, on the values of our TRSs’ land assets, some of which will not be susceptible to a precise determination given their undeveloped nature, and for which we will not obtain independent appraisals.
Accordingly, in the event that actions taken by any of our directors or officers are immune or exculpated from, or indemnified against, liability but which impede our performance, our stockholders’ ability to recover damages from that director or officer will be limited.
Accordingly, in the event that actions taken by any of our directors or officers are immune or exculpated from, or indemnified against, liability but which impede our performance, our stockholders’ ability to recover damages from that director or officer will be limited.
Our Manager is responsible for ensuring our internal controls and procedures are compliant with applicable laws and regulations, including the Exchange Act, Sarbanes-Oxley Act and Dodd-Frank Act, which requires annual management assessment of the effectiveness of our internal control over financial reporting.
Our Manager is responsible for ensuring our internal controls and procedures are compliant with applicable laws and regulations, including the Exchange Act, Sarbanes-Oxley Act and Dodd-Frank Act, which require annual management assessment of the effectiveness of our internal control over financial reporting.
Some investors may use ESG factors to guide their investment strategies and, in some cases, may choose not to invest in us, or otherwise do business with us, if they believe our or our customers’ policies relating to corporate responsibility are inadequate.
Some investors may use ESG factors to guide their investment strategies and, in some cases, may choose not to invest in us, or otherwise do business with us, if they believe our or our counterparties’ policies relating to corporate responsibility are inadequate.
Pursuant to our Charter, we have two classes of common stock: Class A common stock and Class B common stock. Our Class A common stock is listed on NYSE and publicly traded under the symbol “MRP”. We have no intention of listing our Class B common stock at this or any other time.
Pursuant to our Charter, we have two classes of Common Stock: Class A Common Stock and Class B Common Stock. The Class A Common Stock is listed on NYSE and publicly traded under the symbol “MRP”. We have no intention of listing the Class B Common Stock at this or any other time.
An interested stockholder is generally a person owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of the Maryland corporation, unless the stock had been obtained in a transaction approved by its board of directors.
An interested stockholder is generally a person, or an affiliate or associate of the Maryland corporation, owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of the Maryland corporation, unless the stock had been obtained in a transaction approved by its board of directors.
In addition, a 100% excise tax will be imposed on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. As a REIT, no more than 25% of our gross income with respect to any year may, in general, be from sources other than certain real estate-related assets.
In addition, a 100% excise tax will be imposed on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. As a REIT, no more than 25% of our gross income with respect to any year may, in general, be from sources other than certain real estate-related assets.
Those fees include advisory and administrative fees and obligations to reimburse KL in limited circumstances as described in the Management Agreement for certain expenses they incur in connection with providing services to us (not including fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside Millrose’s ordinary course of business, including, in certain circumstances, costs associated with the ownership and maintenance of land).
Those fees include advisory and administrative fees and obligations to reimburse KL in limited circumstances as described in the Management Agreement for certain expenses they incur in connection with providing services to us (not including fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside Millrose’s ordinary course of business, including, in certain circumstances, costs associated with the ownership and maintenance of land).
It is possible that our dual-class structure, combined with the concentrated influence of our Class B common stock holders, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.
It is possible that our dual-class structure, combined with the concentrated influence of our Class B Common Stockholders, will result in a lower or more volatile market price of our Class A Common Stock or in adverse publicity or other adverse consequences.
Maryland law may limit the ability of a third party to acquire control of us. The MGCL provides protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the directors in unsolicited takeover situations.
Maryland law may limit the ability of a third party to acquire control of us. The MGCL provides protection for Maryland corporations against unsolicited takeovers by addressing, among other things, the duties of the directors in unsolicited takeover situations.
Although we believe that we will qualify as a REIT beginning with our first taxable year ending December 31, 2025, we cannot assure you that we will remain qualified as a REIT for U.S. federal income tax purposes.
Although we believe that we will qualify as a REIT beginning with our first taxable year ended December 31, 2025, we cannot assure you that we will remain qualified as a REIT for U.S. federal income tax purposes.
Dividends payable by a REIT, however, generally are not eligible for this reduced rate, except to the extent that the REIT’s dividends are attributable to qualified dividends received by the REIT and such REIT designates that portion of its dividends as qualified dividends.
Dividends payable by a REIT, however, generally are not eligible for this reduced rate, except to the extent that the REIT’s dividends are attributable to qualified dividends received by the REIT and such REIT designates that portion of its dividends as qualified dividends.
For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our dual-class capital structure makes us ineligible for inclusion in any of these indices.
For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our dual-class capital structure makes us ineligible for inclusion in any of these indices.
If we and our customers fail to comply with ESG related regulations and to satisfy the expectations of investors and our customers’ stakeholders, or our or our customers’ announced goals and other initiatives are not executed as planned, our reputation could be adversely affected, and our business, financial condition or results of operations, and our ability to grow our business, may be negatively impacted.
If we and our counterparties fail to comply with ESG related regulations and to satisfy the expectations of investors and our counterparties’ stakeholders, or our counterparties’ announced goals and other initiatives are not executed as planned, our reputation could be adversely affected, and our business, financial condition or results of operations, and our ability to grow our business, may be negatively impacted.
A person holding less than 9% of our total outstanding capital stock or common stock may become subject to our Charter restrictions if repurchases by us cause such person’s holdings to exceed 9% of our total outstanding capital stock or common stock.
A person holding less than 9% of our total outstanding capital stock or Common Stock may become subject to our Charter restrictions if repurchases by us cause such person’s holdings to exceed 9% of our total outstanding capital stock or Common Stock.
If we cannot maintain effective procedures or 89 Table of Contents internal control over financial reporting, or our independent registered public accounting firm cannot provide an unqualified attestation report on the effectiveness of our internal control over financial reporting, investor confidence and, in turn, the market price of our Class A common stock and in turn the value of our Class B common stock could decline.
If we cannot maintain effective procedures or internal control over financial reporting, or our independent registered public accounting firm cannot provide an unqualified attestation report on the effectiveness of our internal control over financial reporting, investor confidence and, in turn, the market price of our Class A Common Stock and in turn the value of our Class B Common Stock could decline.
Maryland law provides that directors have no liability in their capacity as directors if they perform their duties in good faith, in a manner they reasonably believe to be in Millrose’s best interest and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Maryland law provides that directors have no liability in their capacity as directors if they perform their duties in good faith, in a manner they reasonably believe to be in the corporation’s best interest and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering resulting tax consequences, which may adverse.
However, our Board may not grant an exemption from these restrictions to any proposed transferee whose ownership of our outstanding stock would result in our being “closely held” within the meaning of Section 856(h) of the Code or otherwise would result in our failing to qualify as a REIT, and any waivers granted will be subject to certain initial and ongoing conditions designed to protect our status as a REIT.
However, our Board may not grant an exemption from these restrictions to any proposed transferee whose ownership of our outstanding stock would result in our being “closely held” within the meaning of Section 856(h) of the Code or otherwise would result in our failing to qualify as a REIT, and any waivers granted will be subject to certain initial and ongoing conditions designed to protect our status as a REIT.
Additionally, we may in the future significantly increase the size and/or change the mix of our Real Estate Portfolio or acquire or otherwise enter into new lines of business. We may be unable to successfully and efficiently integrate newly-acquired assets or businesses into our existing operations or otherwise effectively manage our Real Estate Portfolio or our growth effectively.
We may in the future significantly increase the size or change the mix of our Real Estate Portfolio or enter into new lines of business. We may be unable to successfully and efficiently integrate newly acquired assets or businesses into our existing operations or effectively manage our Real Estate Portfolio and growth.
On the other hand, none of these provisions can guarantee that we will not have a change in control at some point in the future and, as discussed above, we could experience significant adverse effects to our business, financial condition and results of operations, as well as our ability to maintain operations if we do experience a change in control event and Lennar exercises its “poison pill” right.
On the other hand, none of these provisions can guarantee that we will not have a change in control at some point in the future and, as discussed above, we could experience significant adverse effects to our business, financial condition and results of operations, as well as our ability to maintain operations if we do experience a change in control event and Lennar exercises its “poison pill” right.
RISK FACTORS Risks Related to Our Business Model and Investment in a Newly Formed Entity We are a newly formed company with limited operating history, and you have a limited basis on which to evaluate our ability to achieve our business objectives or to even perform as a standalone and separate business.
RISK FACTORS Risks Related to Our Business Model and Investment in a Recently Formed Entity We are a recently formed company with limited operating history, and you have a limited basis on which to evaluate our ability to achieve our business objectives or to perform as a standalone and separate business.
The Miller Family has the ability to influence our affairs and may have the ability to exercise control over them, including the election and removal of directors and other matters submitted to our stockholders for approval, amendments to our Charter and our Bylaws, and significant transactions, if they are presented to our stockholders for approval.
Therefore, the Miller Family has the ability to influence Millrose’s affairs and may have the ability to exercise control over them, including the election and removal of directors and other matters submitted to Millrose’s stockholders for approval, amendments to Millrose’s Charter and Bylaws, and significant transactions, if they are presented to Millrose’s stockholders for approval.
Changing general economic and financial market conditions could significantly reduce the value of land and other real estate assets, loans and other investments and reduce the amounts earned on those investments.
Changing economic and financial market conditions could significantly reduce the value of land and other real estate assets, loans, and related investments, and reduce the amounts earned on those investments.
We may face reputational damage in the event that our or our customers’ corporate responsibility procedures or standards do not meet the goals or the standards set by various constituencies.
We may face reputational damage in the event that our or our counterparties’ corporate responsibility procedures or standards do not meet the goals or the standards set by various constituencies.
Such restrictions under Maryland law are in addition to any restrictions and limitations relating to compliance with our REIT status or Millrose Holdings’ compliance with its own status requirements.
Such restrictions under Maryland law are in addition to any restrictions and limitations relating to compliance with our REIT status or Millrose Holdings’ compliance with its own status requirements.
For example, if we are not fully compliant with applicable reporting and disclosure requirements, we may face investigations and enforcement action from the SEC; if we are not compliant with applicable stock exchange listing requirements, we may we face delisting from the NYSE; and if our governance practices are found or perceived to be inconsistent with those of traditional Land Banking entities or other public companies, we could face scrutiny, backlash and suits from our stockholders.
For example, if we are not fully compliant with applicable reporting and disclosure requirements, we may face investigations and enforcement action from the SEC; if we are not compliant with applicable stock exchange listing requirements, we may we face delisting from the NYSE; and if our governance practices are found or perceived to be inconsistent with those of other public companies, we could face scrutiny, backlash and suits from our stockholders.
This concentration of ownership will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to you or that may not be aligned with your interests.
This concentration of voting power will limit the ability of other stockholders to influence corporate matters and may cause us to make strategic decisions that could involve risks to you or that may not be aligned with your interests.
Alternatively, we may make taxable in-kind distributions of our own stock, which may result in our stockholders paying income taxes with respect to such distributions in excess of any cash they receive or cause us to be required to withhold taxes with respect to such distributions in excess of any cash our stockholders receive.
Alternatively, we may make taxable in-kind distributions of our own stock, which may result in our stockholders being required to pay income taxes with respect to such distributions in excess of any cash they receive or cause us to be required to withhold taxes with respect to such distributions in excess of any cash our stockholders receive.
As a result, holders of our Class B common stock (which is currently held almost entirely by the Miller Family, as discussed below) have the ability to prevent the Company from taking actions that may be viewed negatively by the Miller Family but might otherwise be viewed by other stakeholders as in the interests of the Company and our stockholders.
As a result, holders of Class B Common Stock (which is currently held almost entirely by the Miller Family, as discussed below) have the ability to prevent Millrose from taking actions that may be viewed negatively by the Miller Family but might otherwise be viewed by other stakeholders as in the interests of Millrose and its stockholders.
Whether an active public 90 Table of Contents trading market for shares of our Class A common stock will develop will depend on a number of factors, including the extent of institutional investor interest in us, the reputation of REITs generally and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate-based companies), our actual and projected financial results, our distribution policy and general stock and market conditions.
Whether an active public trading market for shares of our Class A Common Stock will continue will depend on a number of factors, including the extent of institutional investor interest in us, the reputation of REITs generally and the attractiveness of their equity securities in comparison to other equity securities (including securities issued by other real estate-based companies), our actual and projected financial results, our distribution policy and general stock and market conditions.
The MGCL also provides that, unless exempted, certain Maryland corporations may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock 82 Table of Contents and other specified transactions with an “interested stockholder” or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met.
The MGCL also provides that, unless exempted, certain Maryland corporations may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock and other specified transactions with an “interested stockholder” or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met.
Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts, or estates is generally subject to tax at reduced rates.
Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts, or estates is generally subject to tax at reduced rates.
Accordingly, there can be no assurance that the IRS will not contend that our TRS ownership interests cause a violation of the REIT asset tests. We may acquire Future Property Assets, and entities holding such Future Property Assets that involve risks that could adversely affect our business and financial condition.
Accordingly, there can be no assurance that the IRS will not contend that our TRS ownership interests cause a violation of the REIT asset tests. 39 We may acquire land assets and entities holding such land assets that involve risks that could adversely affect our business and financial condition.
Our Board has provided a waiver of this stock ownership restriction to certain stockholders in connection with the Distribution and to Lennar in connection with the shares of common stock, held in the form of Class A common stock, retained by 87 Table of Contents Lennar after the Distribution.
Our Board has provided a waiver of this stock ownership restriction to certain stockholders in connection with the Distribution and to Lennar in connection with the shares of Common Stock, held in the form of our Class A Common Stock, retained by Lennar after the Distribution.
Such factors could negatively impact our business partners, employees, and customers or otherwise adversely affect our financial condition and results of operations. Risks Related to Our Governance Structure Our dual-class capital structure may adversely affect the market price of our Class A common stock and in turn the value of our Class B common stock.
Such factors could negatively impact our business partners, employees, and counterparties or otherwise materially adversely affect our business, financial condition and results of operations. 47 Risks Related to Our Governance Structure Our dual-class capital structure may adversely affect the market price of our Class A Common Stock and in turn the value of our Class B Common Stock.
Additionally, so long as there are any shares of Class B common stock outstanding, and notwithstanding any future issuances of Class A common stock, holders of 78 Table of Contents Class A common stock will not be entitled to cast more than 65% of the votes entitled to be cast by the holders of common stock and any other classes or series of stock entitled to vote with the common stock.
Additionally, so long as there are any shares of our Class B Common Stock outstanding, and notwithstanding any future issuances of our Class A Common Stock, holders of our Class A Common Stock will not be entitled to cast more than 65% of the votes entitled to be cast by the holders of Common Stock and any other classes or series of stock entitled to vote with the Common Stock.
Holders of Class B common stock may be entitled to cast more than 35%, and holders of Class A common stock may be entitled to cast less than 65%, of the votes entitled to be cast by the holders of common stock and any other classes or series of stock entitled to vote with the common stock, if the number of outstanding shares of Class B common stock multiplied by 10 (the “Class B Initial Vote”) is greater than 35% of the number of outstanding shares of Class A common stock plus the Class B Initial Vote.
Holders of our Class B Common Stock may be entitled to cast more than 35%, and holders of our Class A Common Stock may only be entitled to cast less than 65%, of the votes entitled to be cast by the holders of Common Stock and any other classes or series of stock entitled to vote with the Common Stock, if the number of outstanding shares of our Class B Common Stock multiplied by 10 (the “Class B Initial Vote”) is greater than 35% of the number of outstanding shares of our Class A Common Stock plus the Class B Initial Vote.
Additionally, Kennedy Lewis manages other entities that do Land Banking that could compete with us for opportunities and resources. In particular, our Chief Executive Officer and President is a Managing Partner of Kennedy Lewis and a member of the investment committee of funds advised by Kennedy Lewis.
Additionally, Kennedy Lewis manages other entities engaged in land banking that could compete with us for opportunities and resources. Our Chief Executive Officer (“CEO”) and President is a Managing Partner of Kennedy Lewis and a member of the investment committee for funds advised by Kennedy Lewis.
In the future, we may make business decisions that result in us making investments in Future Property Assets that are different from, and possibly riskier than, the Transferred Assets and the Supplemental Transferred Assets described in this Form 10-K. In connection with such changes in our targeted land assets and strategies, our Board may change our policies over time.
In the future, we may make business decisions that result in us making investments in land assets that are different from, and possibly riskier than, those described in this Form 10-K. In connection with such changes in our targeted land assets and strategies, our Board may also change our policies over time.
For example, some of the land assets we own are in zones that are at risk for natural disasters and could be severely damaged or destroyed by such disasters, including unexpected phenomena (for example, earthquakes and landslides) and physical climate risks that could materialize as either singular extreme weather events (for example, hurricanes, tornadoes, floods, storms and wildfires) or through long-term impacts of climatic conditions (for example, precipitation frequency, weather instability and rise of sea levels).
For example, some of the land assets we own are in zones at risk for natural disasters and could be severely damaged or destroyed by such events, including unexpected phenomena (such as earthquakes and landslides) and physical climate risks that could materialize as either singular extreme weather events (such as hurricanes, tornadoes, floods, storms, and wildfires) or through long-term climatic changes (such as increased precipitation, weather instability, and rising sea levels).
Such construction and the subsequent resale to the third parties would require additional time and cost to Millrose, including hiring personnel and providing the capital to build the homes, that will be borne by us. The price for which we can sell homes to third parties may be significantly less than the amounts of our investments.
Construction and the subsequent resale to third parties requires additional time and cost to Millrose, including hiring personnel and providing the capital to build the homes, which would be borne by us. The price for which we can sell homes to third parties may be significantly less than the amounts of our investments.
Any adverse changes in the financial condition of KL or its affiliates, or our relationship with KL, could hinder its ability to successfully manage our operations and our portfolio of investments, which would adversely affect us and our stockholders. There are significant potential conflicts of interest that could affect our business returns.
Any adverse changes in the financial condition of KL or its affiliates, or any adverse change in our relationship with KL, could hinder KL’s ability to effectively manage our operations and investments, which would adversely affect us and our stockholders. There are significant potential conflicts of interest with KL that could affect our business returns.
The Management Agreement requires the Manager to ensure that we have internal controls over financial reporting that meet the requirements of federal securities laws. Such internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.
The Management Agreement requires the Manager to ensure that we have internal controls over financial reporting that meet the requirements of federal securities laws. Such internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
If our investors perceive that our internal controls are inadequate or that we are unable to produce accurate and reliable financial statements on a timely basis, we may see negative impacts on the trading price of our Class A common stock and in turn on the value of our Class B common stock, on our ability to raise additional capital, and on our ability to effectively market and sell our service to new and existing customers.
If our investors perceive that our internal controls are inadequate or that we are unable to produce accurate and reliable financial statements on a timely basis, we may see negative impacts on the trading price of our Class A Common Stock and on our ability to raise additional capital, and on our ability to effectively market and sell our service to new and existing counterparties.
The remainder of our investment in securities (other than government securities, securities of Millrose Holdings and any other TRSs, and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investment in securities (other than government securities, securities of MPH Parent and any other TRSs, and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
In addition, the criteria by which companies’ corporate responsibility practices are assessed are evolving, which could result in greater expectations of us and our customers and cause us and our customers to undertake costly initiatives to satisfy such new criteria.
In addition, the criteria by which companies’ corporate responsibility practices are assessed are evolving, which could result in greater expectations of us and our counterparties and cause us and our counterparties to undertake costly initiatives to satisfy such new criteria.
Lennar’s selection of KL as the Manager was solely based on their prior working relationship with them and their reliance on KL’s expertise in offering Land Banking. Lennar did not engage in a competitive selection process to evaluate KL against other potential manager candidates, including managers with relevant experience in managing public companies.
Lennar’s selection of KL as the Manager was solely based on their prior working relationship with Kennedy Lewis and their reliance on Kennedy Lewis’ expertise in offering land banking. Lennar did not engage in a competitive selection process to evaluate KL against other potential manager candidates, including potential managers with relevant experience in managing public companies.
Alternatively, if we or our customers, including Lennar, elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party provider, some investors may conclude that our or our customers’ policies with respect to corporate responsibility are inadequate.
Alternatively, if we or our counterparties elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party provider, some investors may conclude that our or our counterparties’ policies with respect to corporate responsibility are inadequate.
However, the holders of a majority of the outstanding Class B common stock can cause the entire class to be converted into Class A common stock. If that occurs, Millrose will no longer be authorized to issue Class B common stock.
Individual shares of Class B Common Stock cannot be converted into Class A Common Stock; however, holders of a majority of the outstanding Class B Common Stock can cause the entire class to be converted into Class A Common Stock, and if that occurs, Millrose will no longer be authorized to issue Class B Common Stock.
Under currently applicable tax law, for taxable years beginning before January 1, 2026, distributions from REITs that are treated as dividends but are not designated as qualified dividends or capital gain dividends are taxed as ordinary income after the deduction under section 199A of the Code for 20% of the amount of the dividend in the case of certain U.S. non-corporate stockholders.
Under currently applicable tax law, distributions from REITs that are treated as dividends but are not designated as qualified dividends or capital gain dividends are taxed as ordinary income after the deduction under section 199A of the Code for 20% of the amount of the dividend in the case of certain U.S. non-corporate stockholders.
Past performance by the management team who are employees of Kennedy Lewis and their respective affiliates may not be indicative of future performance of an investment in us. KL acts as the Manager and is responsible for employing all our management, employees and other personnel, and running all our business operations.
Past performance by the management team, who are employees of Kennedy Lewis and their respective affiliates, may not be indicative of our future performance. KL acts as our Manager and is responsible for employing all management, employees, and other personnel, and for overseeing all business operations.
There has been increased scrutiny, including from global regulators, regarding the use of “big data,” diligence of data sets and oversight of data vendors. Our ability to use data to gain insights into and manage our business may be limited in the future by regulatory scrutiny and legal developments.
There have been increased requirements, including from global regulators, regarding the use of “big data,” diligence of data sets and oversight of data vendors. Our ability to use data to gain insights into and manage our business may be limited in the future by regulatory scrutiny and legal developments.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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These systems may fail to operate properly or become disabled as a result of events wholly or partially beyond our control, including disruptions of electrical or communications services, natural disasters, political instability, terrorist attacks, sabotage, computer viruses, deliberate attempts to disrupt our computer systems through “hacking,” “phishing,” or other forms of both deliberate or unintentional cyber-attack, or our inability to occupy our office location.
These systems may fail to operate properly or become disabled as a result of events wholly or partially beyond our control, including disruptions of electrical or 61 communications services, natural disasters, political instability, terrorist attacks, sabotage, computer viruses, deliberate attempts to disrupt our computer systems through “hacking,” “phishing,” or other forms of both deliberate or unintentional cyber-attack, or our inability to occupy our office location.
With oversight from our Board, the Manager and our executive officers have implemented an enterprise-wide information security program designed to identify, protect against, detect, assess, respond to, and manage reasonably foreseeable cybersecurity risks and threats to our systems, some of which are supported by third parties. These processes are integrated into our overall risk management systems.
With oversight from our Board, our Manager and executive officers are responsible for establishing and monitoring the effectiveness of our controls for cybersecurity risk and have implemented an enterprise-wide information security program designed to identify, protect against, detect, assess, respond to, and manage reasonably foreseeable cybersecurity risks and threats to our systems.
See “Part I, Item 1A. Risk Factors” for more information on risks from cybersecurity threats that are reasonably likely to materially affect our business strategy, results of operations and financial condition.
See “Part I, Item 1A. Risk Factors” for more information on risks from cybersecurity threats that are reasonably likely to materially affect our business strategy, results of operations and financial condition. Governance The Audit Committee of the Board (the “Audit Committee”) oversees Millrose’s cybersecurity risk as part of our overall risk management policies.
To protect our systems from cybersecurity threats, the Manager uses various security tools that help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner. These include, but are not limited to, internal reporting and monitoring and detection tools.
In addition, Kennedy Lewis has implemented mandatory cybersecurity training for all employees and phishing tests designed to raise awareness and educate personnel on cybersecurity risks. To protect our systems from cybersecurity threats, our Manager uses various security tools that help prevent, identify, escalate, investigate, resolve and recover from identified vulnerabilities and security incidents in a timely manner.
Item 1C. Cybersecurity Risks Management and Strategy As an externally managed company, our day-to-day operations are managed by our Manager and our executive officers under the oversight of our Board. As such, we rely on our Manager’s cybersecurity program, as discussed herein, for assessing, identifying, and managing material risks to our business from cybersecurity threats.
Item 1C. C ybersecurity Risks Management and Strategy We rely on our Manager’s cybersecurity program, to identify, assess, and manage material risks to our business from cybersecurity threats.
Removed
Our risk management processes extend into the oversight and identification of threats associated with our use of third-party service providers, including through due diligence of such providers’ cybersecurity practices, contractual obligations to operate their IT systems in accordance with cybersecurity standards and ongoing monitoring.
Added
Our Manager’s cybersecurity risk management processes are integrated into our broader risk management processes and are evaluated in conjunction with other operational and business risks. The program, which is supported in part by third-party consultants and service providers, includes cybersecurity risk assessments, an incident response plan, business continuity planning, as well as ongoing vulnerability scanning and periodic penetration testing.
Removed
The Manager and our executive officers are responsible for establishing and monitoring the integrity and effectiveness of our controls and other procedures, which are designed to ensure that all information required to be disclosed is recorded, processed, summarized and reported accurately and on a timely basis, and all such information is accumulated and communicated to management and the Audit Committee, as appropriate, to allow for timely decisions regarding such disclosures.
Added
These include, but are not limited to, software for employee access monitoring and reporting, threat detection, and mobile device controls. Cybersecurity threats may also arise from internal sources, including employee misconduct, misuse of authorized access, human error, or failures to follow established security policies and procedures.
Removed
The controls and procedures subject to the Board’s oversight include processes related to managing material risks from cybersecurity threats.
Added
Our Manager’s cybersecurity program is designed to mitigate such internal risks through access controls, monitoring and logging, segregation of duties, mandatory cybersecurity training, and policies governing acceptable use and data protection. Our risk management processes include oversight and identification of cybersecurity threats related to third-party service providers.
Removed
Governance The Audit Committee oversees Millrose’s risk management policies, including the management of risks arising from cybersecurity threats and the steps that management has taken to protect against threats to Millrose’s information systems and security.
Added
Service provider due diligence may include, as appropriate depending on the nature of the service and the provider’s access to our data, periodic reviews of the provider’s business continuity planning, data protection, and cybersecurity practices, as well as contractual commitments to maintain IT systems in accordance with cybersecurity standards.
Removed
Our Chief Technology Officer, works to conceive, implement and monitor the program designed to protect information systems from cybersecurity threats and to promptly respond to any security incidents.
Added
The Board, including the Audit Committee, receives updates on a quarterly basis from our Manager and executive officers on our cybersecurity program, including measures taken to address cybersecurity risks and significant cybersecurity incidents.
Removed
Our Chief Technology Officer will promptly notify the General Counsel and other executive officers of any cybersecurity events, with material cybersecurity events promptly communicated to the Audit Committee and publicly disclosed as deemed necessary. 95 Table of Contents
Added
Our Chief Technology Officer (“CTO”) leads the cybersecurity program, and is responsible for developing, implementing, and monitoring our cybersecurity infrastructure and managing our response to threats or security incidents, in coordination with our Manager’s IT and Compliance team. Our General Counsel provides oversight on legal and regulatory aspects of cybersecurity risk management.
Added
We engage a third party to assist with cybersecurity risk assessment, policies and documentation, training and tabletop exercises, and vulnerability scanning and penetration testing. Our CTO has served in this role since February 2025 and has more than ten years of technology and cybersecurity experience.
Added
He is concurrently a Managing Director at Kennedy Lewis where he has been responsible for managing the firm’s technology and analytical capabilities since 2022. 62

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our corporate headquarters are located in Miami, Florida at 600 Brickell Avenue, Suite 1400 Miami, Florida 33131.
Item 2. Pro perties Our corporate headquarters are located at 600 Brickell Avenue, Suite 1400, Miami, Florida 33131. We hold homesite properties in connection with our land banking operations throughout the United States, the locations of which are summarized under “Part I. Item 1. Business—Our Objectives and Strategies —Portfolio Overview”.
Removed
Overview of Operating Assets The below description of properties includes (A) the Transferred Assets, which were transferred by Lennar to us in connection with the Spin-Off, (B) the Supplemental Transferred Asset, which were acquired by Millrose in connection with the Supplemental Transferred Assets Transaction following the Spin-Off and (C) any Future Property Assets that Millrose (through Millrose Holdings, the Property LLCs and any Other Subsidiaries) may (i) acquire in the future pursuant to the Master Program Agreement with Lennar or (ii) acquire in the future pursuant to any HOPP’R agreements that Millrose may enter into with Lennar (other than the Lennar Agreements), Lennar Related Ventures or any Other Customers, which may adhere only to some or none of the Operating Principles (see “Part I, Item 1.
Added
These properties are owned and sold to homebuilders upon exercise of their purchase options under option contracts. We generally do not enter into occupancy arrangements with builders or allow tenants on our homesite properties.
Removed
Business—Land Banking Reimagined—Future HOPP’R Arrangements with Lennar and Lennar Related Ventures” for more information).
Added
Counterparties are required to maintain adequate builder risk insurance and commercial general liability insurance before commencing Land Development or improvements, and land assets acquired under option agreements must be insured by counterparties consistent with industry standards.
Removed
The Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets that Millrose (through any of its subsidiaries) acquires are referred to herein and throughout this Form 10-K as the “Real Estate Portfolio.” As a result of the Spin-Off and the Supplemental Transferred Assets Transaction, the Real Estate Portfolio consists primarily of the Transferred Assets and the Supplemental Transferred Assets.
Added
Title and interest in property assets are evaluated on a case-by-case basis as they are acquired, and we obtain certain representations and warranties regarding title and interest from sellers at acquisition. Millrose generally does not obtain appraisals, valuations or fairness opinions for land assets before acquiring them.
Removed
We expect that the Real Estate Portfolio will grow as Millrose (through Millrose Holdings or any of its Property LLCs) acquires Future Property Assets pursuant to the Master Program Agreement with Lennar or pursuant to any agreements that Millrose (through its subsidiaries) may enter into with Lennar, Lennar Related Ventures or Other Customers in the future.
Added
Millrose did not obtain appraisals, valuations or fairness opinions for the land assets acquired in the Spin-Off from Lennar and in the Rausch Transaction. Properties in our Real Estate Portfolio are subject to state and local taxes, which are typically borne by homebuilders while their purchase options remain outstanding.
Removed
Description of the Transferred Assets and the Supplemental Transferred Assets In connection with the Spin-Off, Lennar contributed a significant portion of its land inventory for the current and future construction of homes to Millrose, which excluded certain Homesites that were already in development and ready to be sold in the short-term, or that Lennar controls through options or agreements, including agreements with strategic land banks and joint ventures, or are otherwise reserved for future use, common areas or homeowner’s association dedication and that were not transferred to Millrose from Lennar’s other subsidiaries.
Added
For additional discussion of our Real Estate Portfolio, its utilization in our business and risks associated with holding such properties, see “Part I. Item 1. Business—Our Objectives and Strategies —Portfolio Overview,” “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part I. Item 1A.
Removed
Additionally, Lennar contributed to Millrose the Cash Contribution as part of the Business Assets. Millrose used approximately $876 million of the Cash Contribution for the purpose of entering into the Supplemental Transferred Assets Transaction.
Added
Risk Factors—Risks Related to Our Business Model and Investment in a Recently Formed Entity” in this Form 10-K.
Removed
The Transferred Assets and the Supplemental Transferred Assets are held by Millrose Holdings through the Property LLCs (each property held by the respective Property LLC formed in the state in which such property is located). As of December 31, 2024, the Transferred Assets and the Supplemental Transferred Assets are located in 29 states.
Removed
We have also formed one additional Property LLC in New York which did not hold any properties as of December 31, 2024. We may form additional subsidiaries (including Property LLCs) in other U.S. states to the extent necessary in the future.
Removed
Purpose of the Transferred Assets and the Supplemental Transferred Assets Millrose’s Property Use Objective with respect to the Transferred Assets and the Supplemental Transferred Assets are limited to (i) holding the Homesites until Lennar exercises its Purchase Options to purchase them in accordance with the terms of the Master Option Agreement, (ii) funding the Horizontal Development that Lennar will contractually be obligated to install with respect to any Homesites, up to a certain pre-agreed budget, in 96 Table of Contents accordance with the terms of the Master Construction Agreement that forms a part of the Master Program Agreement, and (iii) to the extent applicable and requested by Lennar, facilitating any Lennar sales of completed homes by delivering the home and Homesite directly to home buyers to which Lennar has sold the homes.
Removed
For the avoidance of doubt, Millrose Holdings’ Property Use Objective with respect to the Transferred Assets and the Supplemental Transferred Assets does not include (i) performing or funding any home construction on any properties, (ii) performing (directly or through contracted third parties) any Horizontal Development on any properties other than through Lennar, or (iii) entering into any leases or other use/occupancy-related arrangements with respect to any properties.
Removed
However, Lennar may decide not to exercise or forfeit its Purchase Options with respect to any Homesites as further described under “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Master Option Agreement” in which case these restrictions would not apply to properties that are no longer subject to Lennar Purchase Options.
Removed
In connection with the Recycled Capital HOPP’R we provide to Lennar, Millrose Holdings will hold all of the Transferred Assets and the Supplemental Transferred Assets through 31 Property LLCs (with one Property LLC not currently holding any assets) and 18 LLC subsidiaries of Millrose RCH Landco Ltd. We have no Transferred Assets or Supplemental Transferred Assets located in New York.
Removed
We may acquire any Future Property Assets as introduced by Lennar that will also be held through the Property LLCs or Other Subsidiaries, with the objective of selling them back to Lennar once Lennar has completed all Horizontal Development on the properties, in each case pursuant to the terms of the Lennar Agreements.
Removed
The general terms of the relationship between Millrose (through Millrose Holdings) and Lennar are set forth in the Master Program Agreement, including the terms on which Future Property Assets will be acquired by Millrose Holdings (or any Property LLCs) pursuant to the Lennar Agreements.
Removed
However, we may, at our Manager’s discretion, but will not be obligated to, acquire Future Property Assets that do not fully comply with the terms of the Lennar Agreements, and may adhere only to some or none of the Operating Principles. We will have no obligation to acquire any Future Property Asset that does not satisfy the Manager Diligence Obligations.
Removed
Concurrently with the execution of the Master Program Agreement, separate Project Addenda were executed with respect to the Transferred Assets. Promptly following the closing of the Supplemental Transferred Assets Transaction, one or more Project Addenda were executed with respect to each of the Homesites and prospective Homesites included in Supplemental Transferred Assets.
Removed
A separate Project Addendum will be executed with respect to any Future Property Assets, pursuant to which such Future Property Assets will become subject to the Master Program Agreement, the Master Option Agreement, and the Master Construction Agreement.
Removed
The Master Option Agreement provides Lennar with the exclusive option to purchase properties included in the Transferred Assets, the Supplemental Transferred Assets and any Future Property Assets in accordance with an agreed upon schedule of Homesite purchases and pricing set forth in the supplemental Project Addenda.
Removed
Lennar may acquire the Homesites in accordance with the relevant schedule contained in the applicable Project Addenda, which specifies the minimum order and time at which Homesites may be acquired by Lennar.
Removed
If Lennar’s Purchase Options are terminated or if Lennar decides not to exercise its options in accordance with the terms of the Master Program Agreement and Master Option Agreement, Millrose Holdings may sell the properties that were subject to such forfeited or terminated options to third-party buyers.
Removed
Regardless of who the ultimate buyer is, Millrose’s Property Use Objective will not change.
Removed
The Master Construction Agreement provides Lennar with the obligation to complete all Work on each Homesite comprising the Transferred Assets and the Supplemental Transferred Assets (and any Future Property Assets acquired pursuant to the terms of the Lennar Agreements) while such properties are owned by Millrose Holdings (through its Property LLCs), even if Lennar no longer has options to acquire them, in each case on the timelines and budgets (with respect to the Horizontal Development only) set forth in the Project Addenda for such properties.
Removed
Pursuant to the Master Construction Agreement, Lennar has the right (but not the obligation) to complete home construction on properties while such properties are owned by Millrose Holdings (through its Property LLCs). Millrose Holdings does not conduct any Horizontal Development or home construction activities itself.
Removed
Millrose Holdings is required to fund all Horizontal Development up to a certain pre-agreed budget amount as agreed with Lennar pursuant to the Master Construction Agreement, as supplemented by 97 Table of Contents relevant Project Addenda, and Lennar is required to fund any Horizontal Development costs in excess of that.
Removed
Millrose Holdings will not bear or fund any home construction costs. Subject to minimal exceptions, properties are separately subject to a Multiparty Cross Agreement, pursuant to which the properties are pooled for purposes of restricting Lennar’s ability to select certain properties it would want to purchase and let its Purchase Options terminate with regard to other properties in that pool.
Removed
A summary of the key terms and provisions of the Lennar Agreements can be found under “Part III, Item 13.
Removed
Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar.” Geography, Value and Types of Transferred Assets and the Supplemental Transferred Assets We believe the Transferred Assets, the Supplemental Transferred Assets and Millrose’s Real Estate Portfolio is located across a geographically and economically diverse set of solid markets with a concentration in certain key locations, as indicated in the map below.
Removed
The geographic mix of properties included in the Transferred Assets and the Supplemental Transferred Assets is intended to be similar to Lennar’s current geographic spread. We expect to prioritize target markets based on the following three main criteria based on Millrose’s expectations for such markets: I.
Removed
Market is “core,” with solid market penetration, extensive history of homebuilding in the market, and experienced in-market developers. II. Market has good presence from other home builders or land developers with similar product, providing downside protection in the unlikely event of option termination. III. Market exhibits healthy underlying demographic and/or economic trends.
Removed
As of the December 31, 2024, the Transferred Assets and Supplemental Transferred Assets consisted of 860 properties (also known as communities) in 29 states across the United States, totaling approximately 112,855 Homesites, with an approximate aggregate value of $6.6 billion.
Removed
On average, each property will be developed into approximately 131 Homesites but this will vary depending on the size of each property and expected size of each Homesite.
Removed
As of December 31, 2024, the properties were geographically located in the following regions of the United States: (1) East (comprising Alabama, Delaware, Florida, New Jersey and Pennsylvania) (2) Central (comprising, Georgia, Illinois, Indiana, Kansas, Maryland, Minnesota, Missouri, North Carolina, South Carolina, Tennessee, Virginia, West Virginia and Wisconsin) (3) South (comprising Arkansas, Oklahoma and Texas) (4) West (comprising Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington) We believe each of these four regions to be good locations with positive demographics and growth potential.
Removed
As of December 31, 2024, Homesites in these geographical markets are expected to be located approximately 20% in the East Region, 25% in the Central Region, 37% in the South Region and 18% in the West Region, respectively, of the aggregate number of the Homesites and prospective Homesites to be developed on the properties included in the Transferred Assets and the Supplemental Transferred Assets.
Removed
The below is a diagram of the percentage of the Homesites and prospective Homesites included in the Transferred Assets and the Supplemental Transferred Assets per region, as of December 31, 2024. 98 Table of Contents As of December 31, 2024, the Transferred Assets and the Supplemental Transferred Assets collectively are located across 29 U.S. states.
Removed
Approximately 46% of the Transferred Assets and the Supplemental Transferred Assets are concentrated in three states (California, Florida and Texas) in terms of number of Homesites, with a substantial portion (approximately 37%) of the Transferred Assets and the Supplemental Transferred Assets located in two strong housing market states: Florida (where Lennar has historically had a large portion of its real estate activities and is continuing to grow its real estate activities) and Texas (where we believe the market has healthy underlying demographic and/or economic trends primarily driven by generally steadily growing population).
Removed
As of December 31, 2024, the below table shows the location, number of properties, number of underlying Homesites and expected total Takedown Prices of the properties which are included in the Transferred Assets and the Supplemental Transferred Assets across 29 U.S. states and as set forth in the relevant Project Addenda: State Location* Number of Properties Number of Underlying Homesites** Total Takedown Prices Alabama 49 5,298 $ 355,245,861 Arizona 27 3,354 347,163,536 Arkansas 51 4,739 314,709,294 California 47 9,713 1,939,975,149 Colorado 18 2,909 415,071,144 Delaware 9 1,052 172,903,322 Florida 135 15,893 1,318,316,234 Georgia 19 2,723 287,353,894 Idaho 10 284 44,426,358 Illinois 11 467 41,820,987 Indiana 18 1,252 104,631,440 Kansas 7 857 83,532,437 Maryland 9 4,602 540,528,610 Minnesota 41 1,679 167,348,066 Missouri 4 363 29,171,301 Nevada 19 672 121,384,725 New Jersey 4 534 91,251,369 North Carolina 36 2,414 294,080,516 Oklahoma 56 10,427 684,535,684 Oregon 17 757 91,464,671 99 Table of Contents State Location* Number of Properties Number of Underlying Homesites** Total Takedown Prices Pennsylvania 1 24 2,232,699 South Carolina 40 9,112 898,604,670 Tennessee 14 1,403 163,614,646 Texas 180 26,478 1,715,586,457 Utah 5 1,575 180,447,725 Virginia 10 2,185 247,636,641 Washington 13 1,158 194,241,571 Wisconsin 2 12 1,411,698 West Virginia 8 919 65,357,291 Total*** 860 112,855 $ 10,914,047,999 * We have also formed one Property LLC in New York which does not hold any of the Transferred Assets or the Supplemental Transferred Assets.
Removed
We expect that this Property LLC may hold Future Property Assets. ** Or prospective Homesites if fully entitled, as applicable. *** Totals may not foot due to rounding. We expect that total Takedown Prices of all Homesite which are included in the Transferred Assets and the Supplemental Transferred Assets is approximately $11 billion.
Removed
The option exercise price on each Homesite represents the purchase price at which Lennar may purchase such Homesite from us by paying Millrose the purchase price for each such Homesite as set forth in the relevant Project Addenda and pursuant to the terms of the Master Option Agreement.
Removed
The total Takedown Prices are calculated based on the value of the Transferred Assets at the time of the Distribution by Lennar (which may be different than the value as of December 31, 2024 reflected in this Form 10-K) and based on the value of the Supplemental Transferred Assets at the time of the closing of the Supplemental Transferred Assets Transaction by Lennar.
Removed
See “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Master Option Agreement” for more information on the option exercise price and the Master Option Agreement.
Removed
The Real Estate Portfolio contains a broad range of properties and land that can be used for constructing homes appropriate for first-time, move-up, active adult, luxury and multi-generational homebuyers in a variety of locations ranging from urban communities to suburban golf course communities.
Removed
The Homesites in our Real Estate Portfolio are in communities that we believe have stable demographics and have historically exhibited favorable home buying trends, such as strong population and income growth. All of the properties included in the Transferred Assets and the Supplemental Transferred Assets are covered by what the Manager believes to be adequate insurance.
Removed
Development of the Transferred Assets and the Supplemental Transferred Assets Pursuant to the Master Construction Agreement, Lennar has the obligation to perform Work in order to have all Horizontal Development on the Homesites completed.
Removed
Lennar is generally responsible for the completion of, and has control over, the construction means and methods and will be solely responsible for any acts or omissions of its or its subcontractors’ employees performing the Work.
Removed
Millrose Holdings finances all costs actually incurred by Lennar in the performance of the Work relating only to Horizontal Development, up to the agreed-upon budget for each Homesite set forth in the applicable Project Addendum.
Removed
Lennar is responsible for costs and expenses in excess of the pre-agreed budget required to complete the Work relating to Horizontal Development and, subsequently, for all costs required for home construction by Lennar.
Removed
In addition, subject to reimbursement from Millrose Holdings in accordance with the Lennar Agreements, Lennar is responsible for providing and paying for all labor, materials and construction equipment necessary to facilitate its services and engaging any third-party professional engineers necessary to complete the Work, as well as all applicable fees, 100 Table of Contents taxes and permits pertaining to the Work.
Removed
If Lennar breaches the terms of the Master Construction Agreement, Millrose Holdings may order Lennar to stop the Work or make good on such deficiencies. A summary of the key terms and provisions of the Lennar Agreements can be found under “Part III, Item 13.
Removed
Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar.” The estimated development costs relating to the Horizontal Development of each property into Homesites differ depending on the status and level of development of such property.
Removed
As of December 31, 2024, we expect that total estimated development costs of Homesites which are included in the Transferred Assets and the Supplemental Transferred Assets are approximately $4 billion.
Removed
Estimated development costs are calculated based on all the anticipated costs of completing the Work and represent the total amount allocated to each component of the Work, in accordance with the terms of the Master Construction Agreement.
Removed
Such estimates are subject to changes, increases and decreases depending on various factors, including macroeconomics conditions and costs of development materials but are subject to the limitations on the total amount allocated to each component of the Work, as set forth in the Master Construction Agreement. See “Part III, Item 13.
Removed
Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar” for more information. Millrose Holdings (through the Property LLCs) expects to pay the predetermined budgeted Horizontal Development costs pursuant to the terms of the Master Construction Agreement. A summary of the key terms and provisions of the Lennar Agreements can be found under “Part III, Item 13.
Removed
Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar.” As described elsewhere in this Form 10-K, (i) neither Millrose nor Millrose Holdings can guarantee that Lennar will exercise its Purchase Options with respect to the Transferred Assets and the Supplemental Transferred Assets or continue to pay its Monthly Option Payments but (ii) we expect that substantially all, if not all, of the Homesites and prospective Homesites included in the Transferred Assets and the Supplemental Transferred Assets will be purchased by Lennar pursuant to its option under the terms of the Master Option Agreement.
Removed
In the event the payments received from Lennar are not sufficient to cover any development costs required by the Master Construction Agreement, Millrose Holdings may be required to find alternative sources of capital, including through loans, credit facilities, or by issuing its securities in the capital markets.
Removed
We have a revolving credit facility under the Credit Agreement and may seek to pursue additional debt financing. However, there is no guarantee that such sources of additional cash will be obtained or will be sufficient and we may need to seek additional financing to pay all Horizontal Development costs for Lennar’s projects.
Removed
However, pursuant to the Lennar Agreements, Millrose may not enter into any third-party financing arrangements if such financing arrangement would cause the collective debt to equity ratio of Millrose and its affiliates to exceed 1:1, unless it obtains the prior approval of Lennar.
Removed
Further, Millrose is restricted from obtaining any secured financing arrangements without Lennar’s consent, if it decides to contribute both properties covered by the Lennar Agreements and properties of Other Customers into the same collateral pool.
Removed
In terms of future capital commitments on the Transferred Assets and the Supplemental Transferred Assets, since Millrose and Millrose Holdings have already acquired such Transferred Assets and Supplemental Transferred Assets, we are expecting future capital commitments on such properties to be limited to any development costs to be paid out in connection with, and in accordance with the terms of, the Lennar Agreements.
Removed
As a result, we expect that Millrose’s and Millrose Holdings’ total capital commitment on the Transferred Assets and the Supplemental Transferred Assets will be limited to the estimated development costs for each of the Homesites and prospective Homesite included in the Transferred Assets and the Supplemental Transferred Assets, considering the level of development and scope of approvals of each of the properties included in the Transferred Assets and the Supplemental Transferred Assets.
Removed
As of December 31, 2024, the median estimated capital commitment and the average estimated capital commitment for each property included in the Transferred Assets and the Supplemental Transferred Assets was $219,044 and $6.3 million, respectively.
Removed
The lower median estimated capital commitment is due to the 101 Table of Contents proportion of Transferred Assets and Supplemental Transferred Assets that are finished Homesites that do not require additional capital commitments.
Removed
In addition, considering the level of development of each property included in the Transferred Assets and the Supplemental Transferred Assets, we are expecting to sell Homesites back to Lennar over time as they are being developed (or directly to the ultimate homeowner, as instructed by Lennar).
Removed
The Transferred Assets and the Supplemental Transferred Assets are expected to have a short cash conversion cycle. This contrasts with more traditional arrangements which are longer dated and push out cash conversion.
Removed
Millrose has a revolving credit facility under the Credit Agreement and may seek to pursue additional debt financing, which Millrose expects to use to manage cash needs and reduce drag on returns, as well as for use to provide the HOPP’R to Other Customers.
Removed
The expected takedowns on the Transferred Assets and the Supplemental Transferred Assets are based on Lennar’s management current expectations and are subject to changes depending on various factors, including macroeconomic conditions and, in particular, real estate market conditions. We rely on the Manager to monitor these takedowns of the Transferred Assets and the Supplemental Transferred Assets.
Removed
We cannot predict or estimate the actual timing of or any delays in Lennar’s eventual takedowns of these properties, or if Lennar decides not to exercise its option to purchase any such property.
Removed
Pooling of the Transferred Assets and the Supplemental Transferred Assets With minimal exceptions, we intend that all properties included in the Real Estate Portfolio will be pooled with other properties pursuant to the Multiparty Cross Agreements, as further described under “Part III, Item 13.
Removed
Certain Relationships and Related Transactions, and Director Independence—Transactions with Lennar—Multiparty Cross Agreement.” All Transferred Assets and Supplemental Transferred Assets are pooled in accordance with the applicable Multiparty Cross Agreements.
Removed
This pooling mechanism is intended to protect Millrose against any “cherry-picking” by Lennar of more marketable properties while leaving Millrose with unexercised options over properties that have depreciated in value or are otherwise no longer as marketable.
Removed
When properties are pooled together, if Lennar were to decline to exercise the purchase option for any property, Lennar would lose the option to purchase the other Pool Properties in the same pool under the applicable Multiparty Cross Agreement.
Removed
The pooling of properties comprising the Transferred Assets and the Supplemental Transferred Assets is intended to allow Millrose to use multiple properties as collateral, thereby spreading the risk across various assets.
Removed
In the event that one property underperforms or faces difficulties, Lennar would risk losing access to the other, potentially better-performing, properties in the same pool, to the extent it decides to walk away from a discrete property in that pool.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings Millrose is not currently a party to any legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not applicable. 108 Table of Contents Part II
Item 3. L egal Proceedings Millrose is not currently a party to any legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations. Item 4. Min e Safety Disclosures Not applicable. 63 Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 108 Part II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 109 Item 6. [Reserved] 110 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 111 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 121 Item 8.
Item 4. Mine Safety Disclosures 63 Part II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 64 Item 6. [Reserved] 66 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 67 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 89 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay regular corporate income tax rates to the extent that it annually distributes less than 100% of its taxable income.
U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay regular corporate income tax rates on any undistributed taxable income to the extent that it annually distributes less than 100% of its taxable income.
We will furnish annually to each of our stockholders a statement setting forth the dividends paid during the preceding year and their characterization as ordinary income, return of capital, qualified dividend income or capital gain Our dividend policy will enable us to review from time to time alternative funding sources to pay our required distributions.
We will furnish annually to each of our stockholders a statement setting forth the dividends paid during the preceding year and their characterization as ordinary income, return of capital, qualified dividend income or capital gain. 64 Our dividend policy enables us to review from time to time alternative funding sources to pay our required distributions.
All dividends will be made by us at the discretion of our Board and will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on dividends), applicable law and other factors as our Board deems relevant.
All dividends will be made by us at the discretion of our Board and will depend on the financial position, results of operations, cash flows, capital requirements, debt covenants (which are expected to include limits on dividends), applicable law and other factors as our Board deems relevant.
Our computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and, therefore, may not be comparable to such other REITs.
Millrose’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and, therefore, may not be comparable to such other REITs.
See “Risk Factors—Risks Related to Legal, Regulatory, Tax and Accounting Compliance.” For purposes of satisfying the minimum distribution requirement to qualify for and maintain REIT status, our taxable income will be calculated without reference to our cash flow.
See “Risk Factors—Risks Related to Legal, Regulatory, Tax and Accounting Compliance.” For purposes of satisfying the minimum distribution requirement to qualify for and maintain REIT status, our taxable income will be calculated without reference to our cash flow.
A “when-issued” trading market for our Class A common stock existed between February 5, 2025 and February 7, 2025. We do not intend to list shares of our Class B common stock on the NYSE or any other exchange or quotation system, and it is unlikely that there will be a public trading market for our Class B common stock.
A “when-issued” trading market for our Class A Common Stock existed between February 5, 2025 and February 7, 2025. We do not intend to list shares of our Class B Common Stock on the NYSE or any other exchange or quotation system, and it is unlikely that there will be a public trading market for our Class B Common Stock.
We intend to pay dividends and anticipate that our dividends will generally be taxable as ordinary income to our stockholders, not as income from qualified dividends (which are taxed at a reduced rate), although a portion 109 Table of Contents of the dividends may be designated by us as qualified dividend income or capital gain or may constitute a return of capital.
We intend to continue to pay dividends and anticipate that our dividends will generally be taxable as ordinary income to our stockholders, not as income from qualified dividends (which are taxed at a reduced rate), although a portion of the dividends may be designated by us as qualified dividend income or capital gain or may constitute a return of capital.
Dividends We intend to elect to be classified and to qualify as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2025. We intend to make distributions to our stockholders based on our adjusted funds from operations.
Dividends We intend to elect to be classified and to qualify as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2025. We intend to continue to make distributions to our stockholders based on our adjusted funds from operations (“AFFO”).
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock has been listed on the New York Stock Exchange under the symbol “MRP” since February 5, 2025. Prior to that date, there was no public trading market for our common stock.
Item 5. Market Fo r Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock has been listed on the New York Stock Exchange under the symbol “MRP” since February 5, 2025. Prior to that date, there was no public trading market for our Common Stock.
For purposes of determining our cash distributions, our AFFO will be calculated by starting with the definition of the NAREIT of funds from operations, which is the net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate depreciation.
For purposes of determining our cash contributions, the AFFO will be calculated starting with funds from operations (“FFO”), which is the net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate depreciation.
Authorized Capital Stock Under our Charter, the Company has authorized 275,000,000 shares of Class A common stock, par value $0.01 per share, 175,000,000 shares of Class B common stock, par value $0.01 per share, and 50,000,0000 shares of preferred stock, par value $0.01 per share. Holders As of March 25, 2025, we had 166,003,497 shares of common stock outstanding.
Authorized Capital Stock Under our Charter, the Company has authorized 275,000,000 shares of Class A Common Stock, par value $0.01 per share, 175,000,000 shares of Class B Common Stock, par value $0.01 per share, and 50,000,000 shares of preferred stock, par value $0.01 per share. Holders As of February 23, 2026, we had 166,003,497 shares of Common Stock outstanding.
To the extent those funding sources are insufficient to meet our cash needs, or the cost of such financing exceeds the cash flow generated by the Transferred Assets and the Supplemental Transferred Assets for any period, cash available for distribution could be reduced.
To the extent those funding sources are insufficient to meet our cash needs, or the cost of such financing exceeds the cash flow generated by the Real Estate Portfolio for any period, cash available for distribution could be reduced.
Also, to the extent our Board believes we should pay at least most of the dividends in cash, we may consider various funding sources to cover any cash shortfall, including borrowing under debt facilities, selling certain of the Transferred Assets and the Supplemental Transferred Assets (if Lennar will waive its Purchase Options) or using a portion of the net proceeds we receive in future offerings.
Also, if the Board believes we should pay at least most of the dividends in cash, we may consider various funding sources to cover any cash shortfall, including borrowing under debt facilities, selling certain of the Real Estate Portfolio (if builders will waive their purchase options) or using a portion of the net proceeds we receive in future offerings.
The NAREIT definition will then be 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 it is also adjusted for any income tax expense (other than income tax expenses of our TRS) recorded for our fiscal year 2024 that will not be incurred following our election and qualification to be treated as a REIT for U.S. federal income tax purposes, resulting in AFFO for us.
FFO will then be 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 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.
Initially, cash available for distribution to our stockholders is derived solely from distributions from Millrose Holdings and interest from the Promissory Note.
Cash available for distribution to our stockholders is derived solely from distributions from MPH Parent and interest from the Promissory Notes.
As of March 25, 2025, there were (i) 2,227 record holders of our Class A common stock and (ii) 28 record holders of our Class B common stock. There were no shares of preferred stock outstanding.
As of February 23, 2026, there were (i) 2,019 record holders of our Class A Common Stock and (ii) 24 record holders of our Class B Common Stock. There were no shares of preferred stock outstanding.
The closing price for our Class A common stock on March 25, 2025 was $26.12 per share.
The closing price for our Class A Common Stock on February 23, 2026 was $30.59 per share.
We cannot guarantee, and there can be no assurance, that we will declare or pay any cash dividends or distributions.
Up to 80% of these dividends may be paid in the form of a stock dividend, rather than cash. We cannot guarantee, and there can be no assurance, that we will declare or pay any cash dividends or distributions.
Stock Repurchases There were no share repurchases of our common stock made during the quarter ended December 31, 2024. Securities Authorized for Issuance Under Equity Compensation Plans On December 17, 2024, our sole stockholder at the time and board of directors adopted the 2024 Incentive Plan.
There were no dividends declared by the Predecessor Millrose Business for the year ended December 31, 2024. Stock Repurchases There were no share repurchases of our Common Stock made during the year ended December 31, 2025.
Removed
On March 17, 2025, our Board declared a dividend of $0.38 to be paid to holders of Class A common stock and Class B common stock as of the close of business on April 4, 2025, and will be paid on April 15, 2025.
Added
The following are the Company's dividends as declared by the Board for the years ended December 31, 2025 and 2024, and through the date of this Form 10-K: Payment Date Record Date Dividend per Share April 15, 2025 April 4, 2025 $ 0.38 July 15, 2025 July 3, 2025 $ 0.69 October 15, 2025 October 3, 2025 $ 0.73 January 15, 2026 January 5, 2026 $ 0.75 For federal income tax purposes, the Company’s 2025 dividend distributions (excluding the dividend paid on January 15, 2026, which is treated as a 2026 dividend for tax purposes) were characterized entirely as ordinary taxable dividends per share, with no portion treated as capital gain dividends or return of capital.
Removed
As of December 31, 2024, none of our securities had been issued or granted pursuant to the 2024 Incentive Plan. Stock Performance Graph As of December 31, 2024, we did not have any securities outstanding. Recent Sales of Unregistered Securities None.
Added
Stock Performance Graph The following graph compares the cumulative total return on Millrose Class A Common Stock with the cumulative total return of the S&P 500 Index and the FTSE Nareit All Equity REITs Index for the period from February 7, 2025, the first day Millrose Class A Common Stock began trading on the New York Stock Exchange, through December 31, 2025.
Added
The graph and table assume that $100 was invested in each of Millrose Class A Common Stock, the S&P 500 Index, and the FTSE Nareit All Equity REITs Index on February 7, 2025, and that all dividends were reinvested. The total return values do not include dividends declared, but not paid, during the period.
Added
Cumulative returns shown in the graph are based on historical data and do not necessarily indicate future performance. 65 Millrose S&P Total FTSE Nareit All Properties, Inc Return Index Equity REITs Index February 7, 2025 100.00 100.00 100.00 December 31, 2025 118.44 114.95 96.64 This performance graph shall not be deemed “filed” for purposes of the Section 18 of the Exchange Act, except as expressly set forth by specific reference in such filing.
Added
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item is incorporated herein by reference to our definitive Proxy Statement to be filed with the SEC in connection with the Annual Meeting of Stockholders to be held in 2026 (the “Proxy Statement”). Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Dividends will be authorized by our Board and declared by us based on a number of factors including actual results of operations, dividend restrictions under Maryland law or applicable debt covenants, our liquidity and financial condition, our taxable income, the annual distribution requirements under the REIT provisions of the Code, our operating expenses and any other factors our Board deems relevant.
Dividends will be authorized by our Board and declared by us based on a number of factors including actual results of operations, dividend restrictions under Maryland law or applicable debt covenants, our liquidity and financial condition, our taxable income, the annual distribution requirements under the REIT Requirements, our operating expenses and any other factors our Board deems relevant.
Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement. We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2024.
Second, we determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement. We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2024 or December 31, 2025.
We have no examinations in progress and none are expected at this time. We recognize our tax positions and evaluate them using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
We have no examinations in progress and none are expected at this time. We evaluate our tax positions using a two-step process. First, we determine whether a tax position is more likely than not to be sustained 86 upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.
We and our subsidiaries are subject to U.S. federal income tax as well as income tax of various state and local jurisdictions. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our combined statements of operations and comprehensive income (loss).
Our TRSs are subject to U.S. federal income tax as well as income tax of various state and local jurisdictions. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our combined statements of operations and comprehensive income (loss).
Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-K, particularly under the section titled “Cautionary Statement Concerning Forward-Looking Statements.” The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements.
Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-K, particularly under the section titled “Cautionary Statement Concerning Forward-Looking Statements.” The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements.
The Homesites covered by the Mortgages will automatically be released from the applicable Mortgage upon (a) payment in full of the Promissory Note or (b) the occurrence of a closing of such Homesite in accordance with the Master Option Agreement.
The homesites covered by the Mortgages will automatically be released from the applicable Mortgage upon (a) payment in full of the applicable Promissory Note or (b) the occurrence of a closing of such homesite in accordance with the Master Option Agreement or Other Agreements.
To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our “REIT taxable income,” as defined by the Code, to our stockholders.
To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our “REIT taxable income,” as defined by the Code, to our stockholders.
Additionally, any new real property that the Property LLCs acquire while any portion of the Promissory Note remains unpaid or unsatisfied shall automatically be subject to the lien of the Mortgages or of similar mortgages or deeds of trust.
Additionally, any new real property that the Property LLCs acquire while any portion of the Promissory Notes remains unpaid or unsatisfied shall automatically be subject to the lien of the Mortgages or of similar mortgages or deeds of trust.
Loans under the Credit Agreement bear interest at the Adjusted Term SOFR Rate (as defined in the Credit Agreement) plus an applicable margin at the per annum rate of (i) 2.00%, if the Leverage Ratio (as defined in the 115 Table of Contents 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.
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.
Availability under the Credit Agreement is subject to a borrowing base updated quarterly (or, at the Borrower’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 Credit Agreement.
Availability under the Revolving Credit Agreement is subject to a borrowing base updated quarterly (or, at our 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.
All cash from financing activities for both the fiscal years ended December 31, 2024 and 2023 was allocated to the Predecessor Millrose Business by Lennar and was not generated by the Predecessor Millrose Business itself.
All cash from financing activities for both the fiscal years ended December 31, 2024 and 2023 was allocated to the Predecessor Millrose Business by Lennar and was not generated by the Predecessor Millrose Business itself. See Note 8.
The revolving credit facility may be used by the Borrower to borrow loans or obtain standby letters of credit.
The Revolving Credit Facility may be used by us to borrow loans or obtain standby letters of credit.
At the Borrower’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%, 1.25% or 1.50%, depending upon the Leverage Ratio.
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.
In such cases, Millrose may use the land assets it holds through its subsidiaries in its Real Estate Portfolio or the proceeds from customers’ exercises of purchase options relating to the land assets in Millrose’s Real Estate Portfolio as collateral to secure the financing.
In such cases, Millrose may use the land assets it holds through its subsidiaries in its Real Estate Portfolio or the proceeds from counterparties’ exercises of purchase options relating to the land assets in Millrose’s Real Estate Portfolio as collateral to secure the financing.
Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our 118 Table of Contents management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states.
Tax positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the applicable statute of limitations, for all major jurisdictions, which include federal and certain states.
Debt to Equity Ratio Limit Right In addition to the Credit Agreement, Millrose may seek to pursue other debt and expects to have access to a certain amount of debt and equity capital at least a portion of which is intended to be available for use in 117 Table of Contents financing transactions with new customers.
Debt to Equity Ratio Limit Right In addition to the Credit Agreements, Millrose may seek to pursue other debt and expects to have access to a certain amount of debt and equity capital at least a portion of which is intended to be available for use in financing transactions with new counterparties.
On March 17, 2025, our Board declared a dividend of $0.38 to be paid to holders of Class A common stock and Class B common stock as of the close of business on April 4, 2025, and will be paid on April 15, 2025.
Dividends On April 15, 2025, the Company paid a dividend of $0.38 to holders of our Class A Common Stock and our Class B Common Stock as of the close of business on April 4, 2025, as declared by the Board on March 17, 2025.
Salaries, general and administrative expenses amounted to $246.2 million for the year ended December 31, 2024, as compared to $209.8 million for the same prior year period. These allocated expense amounts for both fiscal years include expenses from operating and employee compensation costs for dedicated regional and divisional land teams tasked with acquiring and developing the land inventories.
Salaries, general and administrative expenses were $246.2 million for the year ended December 31, 2024, as compared to $209.8 million for the year ended December 31, 2023. These allocated expense amounts for both fiscal years included expenses from operating and employee compensation costs for dedicated regional and divisional land teams tasked with acquiring and developing the land inventories.
The Mortgages were not recorded initially, but each Initial Property LLC and Supplemental Property LLC is required to comply with Millrose’s request to amend the Mortgages so that they may be recorded if Millrose so requests.
The Mortgages were not recorded initially, but each Property LLC is required to comply with Millrose’s request to amend the Mortgages so that they may be recorded if Millrose so requests.
The Credit Agreement contains events of default, including if KL shall cease to be the Borrower’s manager and a replacement manager reasonably acceptable to the required lenders is not appointed within 90 days. The Credit Agreement is scheduled to mature on February 7, 2028.
The Revolving Credit Agreement contains events of default, including if KL shall cease to be our manager and a replacement manager reasonably acceptable to the required lenders is not appointed within 90 days. The Revolving Credit Agreement is scheduled to mature on February 7, 2028 (the “Revolving Maturity Date”).
We evaluate the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” (greater than 50 percent probability) of being sustained by the applicable tax authority.
We evaluate the tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” (greater than 50 percent probability) of being sustained by the applicable tax authority.
While Millrose may, at its discretion, enter into any secured financing arrangements it so chooses (subject to the Debt to Equity Ratio Limit), Millrose is prohibited from granting or selling any security interest whereby the assets pledged pursuant to such security interest include both Transferred Assets, Supplemental Transferred Assets or Future Property Assets held pursuant to the Lennar Agreements and Future Property Assets of Other Customers (i.e., mixing the assets into one collateral pool) without Lennar’s prior written consent.
While Millrose may, at its discretion, enter into any secured financing arrangements it so chooses (subject to the Debt to Equity Ratio Limit), Millrose is prohibited from granting or selling any security interest whereby the assets pledged pursuant to such security interest include assets acquired from Lennar pursuant to the terms of the Lennar Agreements and Lennar and homesites of Other Counterparties (i.e., mixing the assets into one collateral pool) without Lennar’s prior written consent.
The Credit Agreement includes affirmative and negative covenants applicable to the Borrower and its subsidiaries, including limitations regarding indebtedness, liens, dividends and other restricted payments, 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 includes affirmative and negative covenants applicable to us and our 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 Credit Agreement contains financial covenants, tested quarterly, consisting of a maximum Leverage Ratio, a minimum interest coverage ratio, and a minimum tangible net worth. The Credit Agreement also requires the Borrower to maintain its status as a REIT.
The DDTL Credit Agreement contained financial covenants, tested quarterly, consisting of a maximum DDTL Leverage Ratio, a minimum interest coverage ratio, and a minimum tangible net worth. The DDTL Credit Agreement also required the Company to maintain its status as a REIT.
Salaries, General and Administrative Expenses While the Predecessor Millrose Business had no gross profit during the fiscal year ended December 31, 2024 and 2023, salaries, general and administrative expenses have been allocated to it from Lennar based on a specific identification basis or, when specific identification is not practicable, a reasonable proportional cost allocation method primarily based directly on headcount, usage, or other allocation methods depending on the nature of the services.
Sales, general, and administrative expenses from pre-spin periods While the Predecessor Millrose Business had no revenues during the fiscal years ended December 31, 2024 and 2023, salaries, general and administrative expenses were allocated to it from Lennar based on a specific identification basis or, when specific identification was not practicable, a reasonable proportional cost allocation method primarily based directly on headcount, usage, or other allocation methods depending on the nature of the services.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the accompanying audited combined financial statements of the Predecessor Millrose Business and the notes thereto included elsewhere in this Form 10-K.
Item 7. M anagement’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the accompanying consolidated financial statements and the notes thereto included elsewhere in this Form 10-K.
However, under currently applicable IRS guidance, approximately 80% of these dividends may be paid in the form of stock dividends, rather than in cash.
While we do not plan to do so, under currently applicable IRS guidance, approximately 80% of these dividends may be paid in the form of stock dividends, rather than in cash.
Provision for Income Taxes For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business recorded no tax provision.
Provision for Income Taxes For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business recorded no tax provision. See Note 10. Income Taxes in the consolidated financial statements for more information.
In the event that Millrose Holdings or another TRS of Millrose acquires additional land assets, the Promissory Note may be further amended to reflect such acquisitions. Alternatively, Millrose Holdings or another Millrose TRS may issue one or more additional promissory notes that are similar to the Promissory Note.
In the event that MPH Parent or another TRS of Millrose acquires additional land assets, the Promissory Notes may be further amended to reflect such acquisitions.
To support its accelerated growth, Millrose is actively seeking to secure additional financing. We believe that our existing cash on hand, cash generated from operations and available capacity under the Credit Agreement will be sufficient to meet our liquidity needs in the short and long-term.
We believe that our existing cash on hand, cash generated from operations and available capacity under the Revolving Credit Facility will be sufficient to meet our liquidity needs in the short and long term.
Our ability to satisfy our liquidity requirements depends on our future operating performance, which is affected by prevailing economic conditions, market conditions in the real estate industry and other factors, many of which are beyond our control. Debt Credit Agreement On the Distribution Date, Millrose Properties, Inc.
Our ability to satisfy our liquidity requirements depends on our future operating performance, which is affected by prevailing economic conditions, market conditions in the real estate industry and other factors, many of which are beyond our control. At December 31, 2024, the Predecessor Millrose Business had no cash on hand.
Inflation The real estate market has not been affected significantly by inflation in the past several years due to increases in rents nationwide. Inflation may affect the overall cost of debt, as the implied cost of capital increases. The Federal Reserve, in response to or in anticipation of continued inflation concerns, could continue to raise interest rates.
Effects of Inflation and Seasonality Inflation The real estate market has not been affected significantly by inflation in the past several years due to increases in rents nationwide. Inflation may affect the overall cost of debt, as the implied cost of capital increases.
Cash Flows from Financing Activities For the year ended December 31, 2024, cash provided by financing activities was $917.2 million, primarily consisting of transfers from Lennar of $930.7 million and debt repayments of $13.5 million.
Financing activities of the Predecessor Millrose Business for the year ended December 31, 2024 included only net transfers from Lennar and limited debt activity. Net cash from financing activities for the year ended December 31, 2024 was $917.2 million and primarily consisted of transfers from Lennar of $930.7 million, partially offset by debt repayments of $13.5 million.
Secured Financing Collateral Consent Right In addition to the Credit Agreement, from time to time, Millrose may enter into various “secured financing arrangements,” which may include but are not limited to secured or collateralized loans, or any other transactions where assets may be pledged or used as collateral to secure the financing instrument, whether or not the security interest is perfected.
Additionally, any third-party financing arrangements Millrose enters into may not cause its debt to equity ratio to exceed the Debt to Equity Ratio Limit of 1:1 unless Millrose obtains the prior approval of Lennar. 84 Secured Financing Collateral Consent Right In addition to the Credit Agreements, from time to time, Millrose may enter into various “secured financing arrangements,” which may include but are not limited to secured or collateralized loans, or any other transactions where assets may be pledged or used as collateral to secure the financing instrument, whether or not the security interest is perfected.
The only fees not covered by the Management Fee are fees incurred for services in connection with extraordinary litigation and mergers and acquisitions and other events outside Millrose’s ordinary course of business, including, in certain circumstances, costs associated with the ownership and maintenance of land.
The Management Fee does not cover offering expenses, costs incurred for services in connection with extraordinary litigation and mergers and acquisitions and other events outside of Millrose’s ordinary course of business, and, in some circumstances, costs associated with the ownership and maintenance of land.
REIT Tax Election and Income Taxes We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code and expect to qualify as a REIT.
REIT Tax Election and Income Taxes We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code and expect to qualify as a REIT when we file a REIT tax election with our federal income tax return for the taxable year ended December 31, 2025.
Pledge and Security Agreement In connection with the Promissory Note, Millrose Holdings entered into a Pledge and Security Agreement with Millrose on February 6, 2025, pursuant to which Millrose Holdings pledged a first priority perfected, continuing security interest in and lien on 100% of its membership interests in each Initial Property LLC and in all proceeds thereof (for purposes of this section only, the “Pledged Collateral”) as collateral for Note Borrower’s performance of its obligations under the Promissory Note and Mortgage.
Pledge and Security Agreements In connection with the Promissory Notes, MPH Parent and certain other TRSs entered into the Pledge and Security Agreements with Millrose, pursuant to which such TRSs pledged a first priority perfected, continuing security interest in and lien on 100% of its membership interests in each Property LLC and in all proceeds thereof (the “Pledged Collateral”) as collateral for note borrower’s performance of its obligations under the Promissory Notes and Mortgages.
Dividends We did not declare or pay any cash dividends on our common stock in the year ended December 31, 2024. We intend to make regular dividend payments of at least 90% of our REIT taxable income to holders of our common stock out of assets legally available for this purpose.
We intend to make regular dividend payments of at least 90% of our REIT taxable income to holders of our Common Stock out of assets legally available for this purpose.
The loss the Predecessor Millrose Business recognized in each of these two fiscal years was solely due to the salaries, general and administrative expenses allocated to it by Lennar.
Net Loss For the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business had a net loss of $246.2 million and $209.8 million, respectively. The net loss the Predecessor Millrose Business recognized in each of these two fiscal years was mainly due to the salaries, general and administrative expenses allocated to it by Lennar.
Except during the continuance of a Note Event of Default, Note Borrower will have the right to receive all distributions, interest and proceeds in respect of the Pledged Collateral.
Except during the continuance of a Note event of default, note borrower will have the right to receive all distributions, interest and proceeds in respect of the Pledged Collateral. In the event that a TRS of Millrose acquires additional land assets, the Pledge and Security Agreements may be further amended to reflect such acquisitions.
In the event that Millrose Holdings or another TRS of Millrose acquires additional land assets, the Pledge and Security Agreement may be further amended to reflect such acquisitions. Alternatively, Millrose Holdings or another Millrose TRS may enter into one or more additional pledge and security agreements that are similar to the Pledge and Security Agreement.
Alternatively, MPH Parent or another TRS of Millrose may enter into one or more additional pledge and security agreements that are similar to the Pledge and Security Agreements.
Liquidity and Capital Resources Prior to the Spin-Off Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to fund investments and operations, make distributions to our stockholders and other general business needs. At December 31, 2024, the Predecessor Millrose Business had no cash on hand.
Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to fund investments and operations, make distributions to our stockholders and meet other general business needs. As of December 31, 2025, we had $35.0 million cash on hand and approximately $1.225 billion capacity under our Revolving Credit Facility.
Obligations under the Credit Agreement are secured by pledges by the Borrower of (i) the Promissory Note and (ii) the equity interests of Millrose Holdings.
Obligations under the Revolving Credit Agreement are secured by pledges by the Company of (i) the Promissory Notes and (ii) the equity interests of MPH Parent and certain other subsidiaries.
In addition, the Credit Agreement requires the Borrower to pledge (i) certain future promissory notes similar to the Promissory Note that Millrose may enter into with future subsidiaries and (ii) the equity interests of any future subsidiaries whose equity interests are not pledged for the benefit of the Promissory Note or any other similar promissory note or notes.
In addition, the Revolving Credit Agreement requires the Company to pledge (i) certain future intercompany promissory notes and (ii) the equity interests of certain subsidiaries whose equity interests are not pledged to secure intercompany promissory notes.
The Predecessor Millrose Business’s debt at December 31, 2024 and December 31, 2023 was $24.2 million and $32.6 million, respectively. The Predecessor Millrose Business’s debt consisted of promissory notes for the acquisition of land and community development district bonds, with the interest rate of 0.0% and various maturity dates through 2028.
The Predecessor Millrose Business’s debt consisted of promissory notes for the 77 acquisition of land and community development district bonds, with the interest rate of 0.0% and various maturity dates through 2028. The Predecessor Millrose Business had no third-party financing instruments such as credit facilities, term loans and commercial paper programs at December 31, 2024 or December 31, 2023.
The Credit Agreement provides for a revolving credit facility with commitments in an aggregate amount of $1.335 billion, of which $450 million has been borrowed as of March 25, 2025.
The Revolving Credit Agreement provides for commitments in an aggregate amount of $1.335 billion. Outstanding borrowings under the Revolving Credit Facility were $110 million as of December 31, 2025.
Any such expenses that are not covered by the Management Fee are paid for by Millrose and recorded as general and administrative expenses or other expenses, as appropriate. See “Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Transactions with our Manager—Management Agreement” for more information.
Any such expenses that are not covered by the Management Fee are paid for by Millrose and are recorded as general and administrative expenses or other expenses, as appropriate under GAAP.
For the year ended December 31, 2023, cash provided by financing activities was $865.1 million, primarily consisting of transfers from Lennar of $883.8 million and debt repayments of $18.7 million.
The increase in net cash provided by financing activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to higher net transfers from Lennar and lower debt repayments.
Taxable income from certain non-REIT qualifying activities is derived through a TRS and is subject to applicable U.S. federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the years ended December 31, 2024 or 2023.
Taxable income from certain non-REIT qualifying activities is derived through our TRSs and is subject to applicable U.S. federal, state, and local income and franchise taxes. For the year ended December 31, 2025, we recorded consolidated income tax expense of $20.5 million, which was attributable to our TRSs.
Mortgages In connection with the Promissory Note, on February 6, 2025, each of the Initial Property LLCs delivered fully executed mortgages with respect to the Homesites that they own in favor of Millrose to secure the Promissory Note.
Alternatively, MPH Parent or another TRS of Millrose may issue one or more additional promissory notes that are similar to the Promissory Notes. 85 Mortgages In connection with the Promissory Notes, each of the Property LLCs delivered fully executed mortgages (the “Mortgages”) with respect to the homesites that they own in favor of Millrose to secure the Promissory Notes.
However, there is no guarantee that such sources of additional capital will be obtained on acceptable terms or at all or will be sufficient to cover all of Millrose’s business growth initiatives. As such, Millrose may also seek additional third-party financing to satisfy any additional capital needs or raise capital through equity and debt issuances into the market.
Millrose may also seek additional third-party financing to satisfy any additional capital needs or raise capital through equity and debt issuances into the market.
We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT.
We had no significant taxes associated with our TRS for the years ended December 31, 2025, 2024, or 2023. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT.
As of the date of this Form 10-K, there are no guarantors under the Credit Agreement. In certain circumstances, the Credit Agreement requires the Borrower to cause certain future subsidiaries of the Borrower that are not Taxable REIT Subsidiaries (as defined in the Credit Agreement) to become guarantors.
We may elect to join certain of our subsidiaries to the Revolving Credit Agreement as guarantors from time to time, and in certain circumstances, the 79 Revolving Credit Agreement requires us to cause certain of our other subsidiaries that are not Taxable REIT Subsidiaries (as defined in the Revolving Credit Agreement) to become guarantors.
Cost of Sales For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business had no cost of sales. Gross Profit For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business had no gross profit.
Year Ended December 31, 2024 Versus Year Ended December 31, 2023 Revenues For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business had no revenues because the Predecessor Millrose Business was not subject to purchase option contracts with homebuilders or development loans.
For the fiscal year ended December 31, 2023, cash used in operating activities was $865.1 million, primarily consisting of loss of $209.8 million, stock-based compensation of $10.1 million, an increase in inventory of $641.9 million and a decrease in accounts payable and accrued expenses of $23.6 million. 113 Table of Contents All cash used in operating activities for both the fiscal years ended December 31, 2024 and 2023 was allocated to the Predecessor Millrose Business by Lennar and was not generated by the Predecessor Millrose Business itself.
All cash used in operating activities for both the fiscal years ended December 31, 2024 and 2023 was allocated to the Predecessor Millrose Business by Lennar and was not generated by the Predecessor Millrose Business itself. Cash Flows from Investing Activities Net cash used in investing activities was $5.722 billion for the year ended December 31, 2025.
General and Administrative Expenses Following the Spin-Off, Millrose’s general and administrative expenses are largely comprised of the Management Fee paid to KL pursuant to the Management Agreement. Millrose’s general and administrative expenses do not include personnel-related expense, including salaries, benefits and share-based compensation for any employees, as Millrose and its subsidiaries do not employ any personnel.
All personnel are employed by the Manager or an affiliate of the Manager, and their salaries are paid by the Manager or affiliate, as relevant; therefore, we do not record personnel-related expenses, including salaries, benefits, and share-based compensation for any employees. All cash compensation paid to our Board and certain general and administrative expenses are covered by the Management Fee.
The periods covered in this discussion include the years ended December 31, 2024 and 2023. Millrose was not formed until March 19, 2024 and has operated as an independent company only since the Spin-Off on February 7, 2025. Millrose is a holding company with no operations of its own and operates through its subsidiaries, including Millrose Holdings.
Millrose was formed on March 19, 2024 and has operated as an independent company since the Spin-Off on February 7, 2025. Our Business Millrose is a corporation incorporated under the laws of the State of Maryland on March 19, 2024.
See the sections titled “Part I, Item 1A. Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the risks, uncertainties, and assumptions associated with these statements. Business Overview and Background Millrose is a corporation incorporated under the laws of the State of Maryland on March 19, 2024.
See the sections titled “Part I, Item 1A. Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the risks, uncertainties, and assumptions associated with these statements. As further described in Note 1. Description of Business to our consolidated financial statements included in “Part II, Item 8.
These judgments will affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements.
Critical Accounting Estimates The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amount of revenues and expenses during the reporting period.
Millrose did not have any business operations through its subsidiaries until the completion of the Spin-Off and therefore did not require cash for any operations prior to the Spin-Off. No change in the cash balance is reported during the periods presented as all cash is considered to have been provided and/or returned to Lennar within each period.
Millrose did not have any business operations through its subsidiaries until the completion of the Spin-Off and therefore did not require cash for any operations prior to the Spin-Off. The Predecessor Millrose Business’s debt at December 31, 2024 and December 31, 2023 was $24.2 million and $32.6 million, respectively.
(for purposes of this section only, the “Borrower”) entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as a lender and as administrative agent for the lenders (the “Credit Agreement”).
Debt Obligations to our consolidated financial statements included in “Part II, Item 8 Financial Statements and Supplementary Data” of this Form 10-K for further description. Revolving Credit Facility On the Distribution Date, the Company entered into the Revolving Credit Agreement with a consortium of lenders party thereto and JPMorgan Chase Bank, N.A., as the Revolver Agent.
Cash Flow Summary for the Years Ended December 31, 2024 and 2023 The Predecessor Millrose Business’s cash flows from operating and financing activities for the years ended December 31, 2024 and 2023, as reflected in the Combined Financial Statements, are summarized as follows: Years Ended December 31, (In thousands) 2024 2023 Cash from (used in): Operating activities $ (917,194 ) $ (865,120 ) Financing activities . 917,194 865,120 Cash, end of period $ — $ — Cash Flows from Operating Activities For the fiscal year ended December 31, 2024, cash used in operating activities was $917.2 million, primarily consisting of loss of $246.2 million, stock-based compensation of $14.9 million, an increase in inventory of $716.1 million, which was partially offset by an increase in accounts payable, and accrued expenses of $30.2 million.
Net cash provided by operating activities for the year ended December 31, 2024 primarily consisted of the Predecessor Millrose Business pre-Spin-Off net loss, and allocations for increases in stock-based compensation and inventory, partially offset by increases in account payable and accrued expenses.
The accompanying audited combined financial statements included in Part II, Item 8 of this Form 10-K relate to the Predecessor Millrose Business and were derived from the combined financial statements and accounting records of Lennar.
Debt Obligations to our consolidated financial statements included in “Part II, Item 8 Financial Statements and Supplementary Data” of this Form 10-K for further description.
We intend to mitigate these risks through long-term fixed interest rate loans and interest rate derivatives. Seasonality The residential housing market goes through cyclical periods of market upturns and downturns, frequently corresponding to changes in interest rates and other related conditions.
The Board of Governors of the Federal Reserve System, in response to or in anticipation of continued inflation concerns, could continue to raise interest rates. We intend to mitigate these risks through long-term fixed interest rate loans and interest rate derivatives. Seasonality The Company's results of operations are not subject to material seasonal fluctuations.
Removed
Our Company was formed in connection with the Spin-Off from Lennar to create an independent, publicly-traded company that provides the HOPP’R to Lennar, Lennar Related Ventures and Other Customers. Through various subsidiaries, we hold finished homesites with homes under construction, finished homesites imminently ready for construction, land under development, land ready for development and land not yet ready for development.
Added
Financial Statements and Supplementary Data” of this Form 10-K, we completed the Spin-Off from Lennar on February 7, 2025.
Removed
We are externally managed and advised by KL, pursuant to the Management Agreement between Millrose and KL. We intend to elect to be classified and to qualify as a REIT for U.S. federal income tax purposes, effective the taxable year ending December 31, 2025.
Added
The financial information presented herein (i) for the periods prior to the February 7, 2025 Spin-Off is that of the Predecessor Millrose Business and is derived from the consolidated financial statements and accounting records of Lennar, and (ii) for the periods after the February 7, 2025 Spin-Off is that of Millrose and its subsidiaries.
Removed
Millrose Holdings, our wholly-owned subsidiary, through its various subsidiaries, will hold all of the land inventories and manage the HOPP’R. Millrose intends to elect for Millrose Holdings to be taxable as a TRS and may elect to form other wholly-owned subsidiaries that will also elect to be taxed as taxable REIT subsidiaries in the future.
Added
Millrose became an independent, publicly traded company on February 7, 2025 following the Spin-Off from Lennar and its Class A Common Stock is listed on the NYSE under the symbol “MRP”. We purchase and develop residential land and sell finished homesites to homebuilders by way of option contracts with predetermined costs and takedown schedules.
Removed
Taxable REIT subsidiaries are subject to taxation at regular corporate income tax rates. Millrose Prior to the Spin-Off The following discussion describes the results of operations, liquidity and capital resources, cash flows and off-balance sheet arrangements of the Predecessor Millrose Business prior to the Spin-Off, which information is derived from the financial results of Lennar.
Added
We serve as a solution for homebuilders seeking to expand access to finished homesites while implementing an asset-light strategy. As fully developed homesites are sold by Millrose, capital is recycled into future land acquisitions for homebuilders, providing counterparties with durable access to community growth.
Removed
These audited financial statements reflect the combined historical results of operations, financial position and cash flows of the Predecessor Millrose Business as they were historically managed by Lennar in conformity with GAAP.
Added
Our option contracts provide for the payment of recurring option fees paid by our counterparties through the term of the applicable contract. To a lesser extent, we also provide development loans secured by property intended for single-family use to certain third-party counterparties. We are externally managed and advised by KL pursuant to the Management Agreement.
Removed
Therefore, the historical combined financial information may not be indicative of Millrose’s future performance and does not necessarily reflect what Millrose’s combined results of operations, financial condition and cash flows would have been had Millrose operated as a separate, publicly traded company during the periods presented, particularly because of changes that Millrose expects to experience in the future as a result of its separation from Lennar, including changes in the financing, cash management, operations and cost structure of Millrose.
Added
The Spin-Off and Related Transactions On the Distribution Date, we completed our Spin-Off from Lennar through a distribution of approximately 80% of Millrose’s outstanding Common Stock to holders of Lennar Common Stock as of the close of business on January 21, 2025.
Removed
The audited financial statements include certain assets and liabilities that were historically held at the Lennar parent level, but are specifically identifiable or otherwise allocable to the Predecessor Millrose Business.
Added
In connection with the Spin-Off, we received a contribution from Lennar of approximately $5.5 billion in land assets, representing approximately 87,000 homesites, and cash of approximately $1.0 billion, which included $585 million of cash deposit liabilities related to option contracts with Lennar.
Removed
For further discussion, see Note 2 to the Combined Audited Financial Statements of the Predecessor Millrose Business. 111 Table of Contents Results of Operations for the Years Ended December 31, 2024 and 2023 Years Ended December 31, (In thousands) 2024 2023 Change % Change Revenues $ — $ — $ — — % Cost of sales — — — — Gross profit — — — — Salaries, general & administrative expenses (246,221 ) (209,792 ) (36,429 ) (17 ) Loss before income taxes (246,221 ) (209,792 ) (36,429 ) (17 ) Provision for income taxes — — — — Loss $ (246,221 ) $ (209,792 ) $ (36,429 ) (17 )% Revenues For each of the fiscal years ended December 31, 2024 and 2023, the Predecessor Millrose Business had no revenues, as all finished Homesites were transferred to the Predecessor Millrose Business’s parent company, who sold those homes to Lennar customers.
Added
On February 10, 2025, we completed the acquisition of land consisting of approximately 25,000 homesites through the acquisition of 100% of the outstanding stock of RCH Holdings, Inc., a recently formed parent holding company of Rausch, for approximately $859 million in cash, which is net of option deposits funded by Lennar and other holdbacks.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future.
Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. Restrictions upon the availability of real estate financing or high interest rates for real estate loans could also adversely affect our ability to dispose of real estate in the future.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to a number of market risks in the ordinary course of business. Market risk includes risks that arise from changes in interest rates and other market changes that affect market sensitive investments.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to a number of market risks in the ordinary course of business. Market risk includes risks that arise from changes in interest rates and other market changes that affect our debt obligations and market sensitive investments.
We are exposed to interest rate changes primarily as a result of (i) their effect on the market for new homes, and therefore on the likelihood that Purchase Options will be exercised, (ii) our Credit Agreement, and (iii) if we need to obtain other long-term debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations.
Interest Rate Risk Interest rate changes may affect (i) the market for new homes, and therefore the likelihood that purchase options will be exercised, (ii) our debt obligations under the Revolving Credit Facility and Senior Notes, and (iii) our ability to obtain other long-term debt used to maintain liquidity, fund capital expenditures and expand our investment portfolio and operations.
Removed
Interest Rate Risk In pursuing our business and investment objectives, one of the primary risks in which we are exposed is interest rate risk.
Added
Borrowings under our Revolving Credit Facility bear interest at the “Adjusted Term SOFR Rate” (as defined in the Revolving Credit Agreement), plus an applicable per annum spread rate of 2.00%-2.50% based on the Leverage Ratio (as defined in the Revolving Credit Agreement). All outstanding principal is due and payable upon termination of the Revolving Credit Facility.
Removed
We expect to be subject to market risk exposure related to changes in interest rates on our indebtedness under our Credit Agreement and changes in the fair value of our fixed rate debt.
Added
Variable changes in interest rates related to the Adjusted Term SOFR Rate are generally not expected to affect the fair value of outstanding borrowings on our Revolving Credit Facility but do affect our earnings and cash flows. As of December 31, 2025, we had $110 million outstanding borrowings under the Revolving Credit Facility.
Removed
Outstanding borrowings under the Credit Agreement bear interest at a per annum rate set forth in a pricing schedule based on the current level of the Company’s leverage ratio. At December 31, 2024, there were no borrowings outstanding under the Credit Agreement, as the Credit Agreement was entered into on February 7, 2025.
Added
Assuming no change in the amount outstanding as of December 31, 2025, a one percent (1%) increase or decrease in interest rates would result in a corresponding increase or decrease in annual interest expense of approximately $1.1 million. Fixed rate debt related to our 2030 Notes and 2032 Notes bear interest of 6.375% and 6.250%, respectively.
Removed
However, we will be exposed to market risk related to interest rates in the future.
Added
Changes in market interest rates generally affect the fair value of these instruments, but not our earnings or cash flows. Outstanding debt for Senior Notes, net of issuance costs, was approximately $1.969 billion as of December 31, 2025, and their carrying value approximates their fair value.
Removed
We believe significant interest rate changes would not have a material near-term impact on our future earnings or cash flows. 121 Table of Contents We do not currently engage in hedging, but if we acquire derivatives to hedge our exposure, we will also be exposed to market risk.
Added
Hedging Activities We do not currently engage in hedging activities and do not hold any derivative instruments or other financial contracts for hedging purposes. If we were to enter into hedging arrangements in the future, those instruments could expose us to market risk, including the potential effects of changes in interest rates.
Removed
Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.
Added
Limitations of Market Risk The sensitivity analysis above is based on variable-rate borrowings outstanding as of December 31, 2025 and assumes no changes in debt balances, no hedging activities, and a parallel change in interest rates.
Removed
With regard to variable rate financing, the Manager will assess our interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities.
Added
Actual impacts may differ due to changes in borrowings and repayments during the period, future financings, the timing of cash flows, changes in reference rates and spreads (including SOFR), and actions we may take to manage our exposure.
Removed
The Manager will maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions.
Added
Comparative market risk information for 2024 is not presented because the predecessor period did not have material market risk exposures and the information is not comparable. 89
Removed
While our hedging strategy will be designed to minimize the impact on our net income and funds from operations from changes in interest rates, they may reduce the overall returns on our investments. Our Board has not yet established policies and procedures regarding our use of derivative financial instruments for hedging or other purposes. 122 Table of Contents