Millrose Properties, Inc. Earnings Per Share Disclosure
Note 13. Earnings Per Share
The Company calculates earnings per share in accordance with ASC 260 Earnings Per Share. The Company has elected to use the number of shares outstanding as of the day of the Spin-Off, as the denominator number of shares for the period prior to the Spin-Off; an acceptable approach under ASC 260 that spun-off entities may use when the spin-off occurs within the financial reporting period. Basic earnings per share is computed by dividing net earnings attributable to common stockholders by the weighted number of commons shares outstanding for the period. The outstanding shares at Spin-Off were unchanged as of December 31, 2025. Diluted earnings per share reflects the potential dilution that could occur if the RSUs granted to each member of the Board vested and resulted in the issuance of common stock. For the year ended December 31, 2025, basic and diluted earnings per share is calculated by dividing net income attributed to common stockholders after the Spin-Off by the basic and diluted weighted shares outstanding for the period. The diluted earnings per share for the RSUs is calculated using the two grant dates of April 3, 2025 and December 10, 2025. The pre-spin net loss of $25.0 million for the period from January 1, 2025 through February 7, 2025 is added back to net income for purposes of earnings per share. For the years ended December 31, 2024 and 2023, Lennar was the sole stockholder.
Basic and diluted earnings per share were calculated as follows:
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Years ended December 31, |
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2025 |
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2024 |
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2023 |
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Numerator: |
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Net Income (loss) |
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$ |
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379,864 |
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$ |
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— |
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$ |
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— |
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Adjustment for expenses from pre-spin periods |
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24,960 |
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— |
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— |
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Numerator for basic and diluted earnings per share |
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$ |
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404,824 |
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$ |
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— |
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$ |
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— |
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Denominator: |
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Weighted average common shares outstanding - basic (1) |
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166,003,497 |
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— |
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— |
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Basic earnings per share |
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$ |
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2.44 |
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$ |
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— |
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$ |
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— |
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Weighted average common shares outstanding - diluted (2) |
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166,026,608 |
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— |
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— |
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Diluted earnings per share |
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$ |
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2.44 |
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$ |
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— |
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$ |
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— |
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About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.