Bill Ackman on Debt Discipline

In November, the Investment Manager opportunistically deployed capital into Meta following a decline in the share price amid concerns around AI-related spending. Also in November, the Investment Manager announced that it had exited its investments in Chipotle and Nike, and in February 2026, it exited its investment in Hilton. Further information on the PSH portfolio can be found in the Investment Manager’s Report. CORPORATE ACTIONS The Board has undertaken a number of corporate actions over the past year. • PSH continues to believe that its ability to access low-cost, long-term, investment grade debt is a competitive advantage. We seek to maintain leverage generally between 15% and 20% of total assets, utilising investment- grade debt financing without mark-to-market or other margin-like covenants. PSH’s long-term debt management strategy is to manage leverage over time by growing NAV through strong performance and by laddering maturities through new debt issuances. In April, PSH completed a €650 million senior notes issuance due 2030, at a rate of 4.25%. In October, PSH completed a $500 million senior notes issuance due 2032, at a rate of 5.50%. PSH’s current debt profile is comprised of a structured set of maturities matching its long-term investment horizon, with a weighted average maturity of six years and a weighted average cost of capital of 3.6% as of December 31, 2025.

The Board believes that this amount of leverage is conservative, particularly given the quality, liquidity and mark- to-mark nature of PSH’s portfolio assets. • As discussed in my August letter, the Investment Manager made an investment of $900 million to acquire newly issued shares of HHH in May 2025. PSH did not purchase additional shares in this particular transaction. Following the acquisition, the Investment Manager and its affiliates, including PSH, collectively own 46.9% of HHH’s outstanding shares. The acquisition positions the Investment Manager to create significant shareholder value at HHH over time, benefiting PSH shareholders.

Pershing Square Holdings, Ltd. 8 companies, and are important marginal buyers and sellers of a security. These shorter-term investors – which include so-called market-neutral and quantitative funds – use large amounts of margin, derivative, and total return swap leverage in their strategies. As highly leveraged market participants, these investors’ tolerance for mark-to-market losses is small, which contributes to stock price volatility as they can become effectively forced sellers when companies disappoint, even in the short term. This phenomenon of massive short-term volatility in even the largest, most well-capitalized and most closely followed companies has only increased over the last two years. As a result, the stock market at times feels ‘broken;’ that is, stocks can trade in, what appears to us, a completely irrational fashion in the short term when a company fails to meet and/or exceed analysts’ or investors’ expectations. While short-term disappointments can be a harbinger of future underperformance, the degree of downward volatility in many cases appears irrational – well in excess of reasonably anticipated potential intrinsic value risk or impairment due to the potential disappointment. In many cases, the market has responded in a negative way to news that we viewed favorably, and with the passage of time, the initial negative market reaction has often proven to be an overreaction.

We believe that current market dynamics are due to the ever-growing percentage of capital controlled by highly-leveraged market participants who have extremely short-term objectives, and are incentivized or required to exit when certain stop loss triggers are hit due to margin and/or total-return swap leverage and/or risk limits, amplified by the reduction in float due to growing index ownership. The market increasingly appears like a casino where money is wagered over the course of a day, hours, minutes or even seconds. This mismatch between stocks, which represent perpetuity interests in businesses that are inherently long-term assets, and their temporary ‘owners,’ creates growing opportunities for the patient investor with stable capital. Because of our permanent capital structure, the increasingly volatile market dynamics will likely continue to offer us occasionally extraordinary opportunities to buy the highest quality durable growth companies in the world at bargain prices. Market Valuation Since the onset of COVID-19, equity markets have delivered strong returns. From 2020 through 2025, the S&P 500 has generated a 112% total return or 13% per annum.14 While the past five years have experienced enormous volatility due to significant geopolitical, pandemic, and inflation-related challenges, the overall result has been a strong, multi-year advance in the index. Stock market performance has been particularly robust over the last three years.

For instance, the rollout of Business AI on Meta’s messaging platforms could be a game-changer for businesses to pursue scalable, low-cost customer engagement and wearables like Meta Ray-Bans, which present new avenues to leverage AI interactively in the real world. We believe the substantial upside potential from AI, both within Meta’s compute-constrained core business and in its new initiatives, supports front-loading investments in infrastructure and talent. After Meta’s next year's planned spending ramp, we expect the company to resume its rapid long-term earnings growth algorithm. Notably, in its year-end earnings call at the end of January, management stated that the near-term acceleration in revenue growth would allow it to continue to grow operating income in 2026 despite significantly elevated levels of investment spending. In addition, the company noted that losses at the Reality Labs division will peak in 2026 and moderate in future years. Should Meta’s high levels of revenue growth slow down or the returns on its AI investments be lower than anticipated, we are confident the company will be able to retain the operational levers – reminiscent of the 2023 “Year of Efficiency” – to moderate expenses, maintain profit margins, and deliver continued strong earnings-per-share growth. Our investment in Meta highlights our approach of closely following a watchlist of high-quality businesses and waiting patiently for an attractive entry price.

Having recently trimmed and sold other holdings, we held sufficient cash to move quickly and invest in a business we have long admired that has experienced a significant decline in its share price in recent months due to near-term concerns, which we do not believe will impact the longer-term Meta story. Current Equity Positions: Alphabet (“Google”) Alphabet, the parent company of Google, delivered strong business performance in 2025, highlighting its unique ability to leverage core strengths in data, distribution, infrastructure, and research expertise to successfully capitalize on its vast AI potential. AI is having a profoundly transformative impact on the company’s core advertising platform. Google’s unrivaled digital “real estate” and consumer mindshare allow for the deployment of AI products at a massive scale. In Search, this is most evident in the global roll-out of AI Overviews. Now reaching more than two billion users in more than 200 countries, AI Overviews is the world’s most widely used AI product by a significant margin. Notably, its introduction has accelerated query growth in Search, with the most pronounced effects seen among younger demographics. Similarly, in YouTube, Google’s focus on multi-modal AI, specifically image and video generation, has driven material improvements to recommendation algorithms and creator tools.

While Alphabet’s share price appreciated meaningfully in 2025 to reflect its strong product and business momentum, we believe it continues to trade at an attractive valuation for a business of its quality, leadership position in AI and ability to grow earnings per share at a high-teens rate over the medium term. Amazon.com, Inc. (“Amazon”) Amidst tariff-related market volatility in April 2025, we were able to initiate a position in Amazon at a highly compelling valuation. Amazon operates two of the world’s great, category-defining franchises between its Amazon Web Services (AWS) cloud business and its e-commerce retail operations. Both businesses are underpinned by decades-long secular growth trends, occupy dominant market positions, and leverage their immense scale to continually enhance their customer value proposition. AWS is the leader in the highly concentrated cloud hyperscaler market, benefiting from the long-term migration of IT workloads to the cloud. Amazon.com is also the world’s largest e-commerce retailer, enabled by a one-of-a-kind logistics network that fulfills over $700 billion in gross merchandise value annually. Despite these compelling attributes, concerns around AWS’s growth trajectory, compounded by broader tariff-related market volatility, presented a compelling entry point in April 2025 and we were able to initiate our position at a valuation of only 25 times forward earnings, which was near the lowest valuation multiple in the company’s history.

Pershing Square Holdings, Ltd. 17 Beyond the core rental business, we believe Hertz has the potential to meaningfully grow through high-margin ancillary services. The company is currently building out the infrastructure to sell more used cars directly through its retail channels. The company has partnerships with Amazon and Cox, and a “rent-to-buy” program which is now live in over 100 cities. We believe this retail strategy can evolve into a meaningful profit center, leading to structurally lower depreciation costs and providing a platform to sell additional Finance and Insurance (F&I) products. In addition, we believe Hertz is uniquely positioned to be a critical partner for mobility companies rolling out autonomous vehicle fleets. The company’s expertise in vehicle maintenance and the scale of its parking and service facilities make it an ideal partner to manage these complex fleets. Both of these initiatives have the potential to further leverage Hertz’s fixed-cost base and diversify its revenue streams. The company is also now in a much stronger liquidity position. In September, we helped facilitate a convertible bond issuance by increasing our economic exposure to the company through the purchase of swaps on its shares. Simultaneously with the issuance, the company entered into a capped-call transaction, which ensures the convertible bonds are not dilutive unless the stock nearly triples from current prices.

Uber’s share price appreciation from our average cost at announcement through year end reflected the company’s substantial operating profit growth, but was somewhat offset by a modest decrease in the valuation multiple due to lingering investor concerns regarding the impact on Uber’s long-term growth from future competition by perceived AV competitors, such as Tesla and Waymo. Uber delivered exceptional financial performance in 2025, including new all-time highs on multiple key operating metrics. Constant-currency bookings grew 20%, driven by a 16% increase in monthly active users and deepening engagement per user, driving a 20% increase in annual trips of 13.6 billion on Uber’s network. Robust top-line growth combined with strong cost control and operating leverage generated operating profit growth of ~50%. Operating results accelerated throughout the year and the outlook for 2026 remains strong, with operating profit growth that we estimate could again exceed 30%. In 2025, AV technology made great strides with increasing evidence that it is approaching super-human safety standards across multiple vendors. Beyond Waymo and Tesla, a host of small companies are making significant advancements as artificial intelligence and end-to-end neural networks provide new opportunities for AV technology. We believe it is likely that AV technology will ultimately be broad-based and spread among a much larger number of companies than many industry observers previously expected.

The long-term interests of the Investment Manager are aligned with the Company’s shareholders as a result of the substantial investment made by the Investment Manager’s personnel in the Company. Portfolio Concentration The Investment Manager may invest a significant proportion of the Company’s capital in a limited number of investments, including asymmetric hedges, subject to the Company’s Investment Policy. Because the Company’s portfolio is highly concentrated, it is sensitive to general market fluctuations and its investment results may be volatile. A concentrated portfolio also exacerbates the risk that a loss in any one position could have a material adverse impact on the Company’s assets. The Investment Manager performs extensive research prior to making new investments, along with ongoing monitoring of positions held in the Company’s portfolio. The Investment Manager is mindful of sector and industry exposures and other correlations between businesses in which the Company invests. The Investment Manager will reduce position sizes accordingly in investments with greater leverage, business complexity or other factors that create a risk of substantial permanent impairment of value. The Board reviews portfolio concentrations and receives a detailed overview of the portfolio positions no less than quarterly, and more frequently as necessary.

However, the Investment Manager may abstain from effecting a cross transaction or only effect a partial cross transaction if it determines, in its sole discretion, that a cross transaction, or a portion thereof, is not in the best interests of a fund (for example, because a security or financial instrument is held by such fund in the appropriate ratio relative to its adjusted net asset value, or because a security or financial instrument should be divested, in whole or in part, by the other funds) or as a result of tax, regulatory, risk or other considerations. The Company may hold its assets in cash, cash equivalents and/or U.S. Treasurys pending the identification of new investment opportunities by the Investment Manager. There is no limit on the amount of the Company’s assets that may be held in cash or cash equivalent investments at any time. The Board has adopted a policy pursuant to which the borrowing ratio of the Company, defined for this purpose as the ratio of the aggregate principal amount of all borrowed money (including margin loans) to total assets (pursuant to the latest annual or semi-annual Financial Statements of the Company), shall in no event exceed 50% at the time of incurrence of any borrowing or its drawdown (e.g. a borrowing under a line of credit).

The Board may amend the Company’s borrowing policy from time to time, although the Board may not increase or decrease the Company’s maximum borrowing ratio without the prior consent of the Investment Manager. This borrowing policy does not apply to and does not limit the leverage inherent in the use of derivative instruments. The Company may use derivatives, including equity options, in order to obtain security-specific, non-recourse leverage in an effort to reduce the capital commitment to a specific investment, while potentially enhancing the returns on the capital invested in that investment. The Company may also use derivatives, such as equity and credit derivatives and put options, to achieve a synthetic short position in a company without exposing the Company to some of the typical risks of short selling, which include the possibility of unlimited losses and the risks associated with maintaining a stock borrow. The Company generally does not use total return swaps to obtain leverage, but rather to manage regulatory, tax, legal or other issues. Material changes to the Company’s Investment Policy require approval by a special resolution of the holders of Public Shares. RESULTS AND NAV The Company had a gain attributable to all shareholders for the year ended December 31, 2025 of $2.53 billion (December 31, 2024: gain of $1.17 billion). The net assets attributable to all shareholders at December 31, 2025 were $15.05 billion (December 31, 2024: $13.01 billion).

If approved by shareholders, the Board may decide to utilize the share buyback authority to make further acquisitions of Public Shares in the market if it and the Investment Manager determine it is likely to be an effective use of capital and in the best long-term interests of shareholders after taking into consideration the discount at which shares would be repurchased, unencumbered cash, investment opportunities, current portfolio holdings, leverage and other factors. The Board continues to be satisfied that the interests of PSH shareholders and the Investment Manager are closely aligned. Affiliates and affiliated entities of the Investment Manager beneficially owned 28% of the Company at December 31, 2025 (December 31, 2024: 27%). The Board believes the investment in the Company by the Investment Manager’s team has created a strong incentive for the Investment Manager to generate positive investment performance, which the Board believes will increase the Company’s share price and reduce the discount to NAV over the long term. BONDS On July 25, 2019, the Company closed on a fully committed private placement of $400 million Senior Notes at par with a coupon rate of 4.95%, maturing on July 15, 2039 (the “2039 $400m Bonds”). On August 26, 2020, the Company closed on a fully committed private placement of $200 million Senior Notes at par with a coupon rate of 3.00%, maturing on July 15, 2032 (the “2032 $200m Bonds”).

Pershing Square Holdings, Ltd. 97 Interest Expense Year Ended 2025 Year Ended 2024 Bonds coupon expense $ 98,809,410 $ 72,106,453 Bilateral collateral balances 9,286,805 2,197,258 Amortization of Bonds issue costs incurred as finance costs 3,969,451 2,632,775 Amortization of Bonds original issue discount incurred as finance costs 489,954 348,715 Debit balance at prime brokers 257,883 7,402 $ 112,813,503 $ 77,292,603 13. FINANCIAL RISK AND MANAGEMENT OBJECTIVES AND POLICIES Risk Mitigation The Investment Manager defines investment risk as the probability of a permanent loss of capital rather than price volatility. The Investment Manager does not use formulaic approaches to risk management. Instead, risk management is integrated into the portfolio management process. The primary risk management tool is extensive research completed by the Investment Manager prior to an initial investment. Factors considered by the Investment Manager in assessing long investment opportunities include, but are not limited to: • The volatility/predictability of the business; • Its correlation with macroeconomic factors; • The company’s financial leverage; • The defensibility of the company’s market position; and • Its discount to intrinsic value The Investment Manager seeks to invest the substantial majority of the Company’s capital in high-quality, low-leverage, North American, large-cap companies.

The Investment Manager does not have a formulaic approach in evaluating correlations between investments, but is mindful of sector and industry exposures and other fundamental correlations between the businesses in which the Company invests. Accordingly, the primary risks in the Company’s portfolio are company-specific risks which are managed through investment selection and due diligence. The public nature of the investments in the portfolio and portfolio concentration allows the Investment Manager to monitor and evaluate every investment on a daily basis. The Investment Manager seeks to limit the Company’s exposure to risks that may be associated with the use of financial leverage and it believes that an important distinguishing factor about the Company’s portfolio is that it does not generally use margin leverage. At times, the Investment Manager has made investments that, due to the circumstances of the investment (e.g., the highly leveraged nature of the businesses or assets, the relative illiquidity of the investment, and/or the structure of the Company’s investment), have a materially greater likelihood of a potential permanent loss of capital for the Company. In light of this greater risk, the Investment Manager generally requires the potential for a materially greater reward if successful, and sizes the investments appropriately.

S. Treasury Bills with daily liquidity as disclosed in Note 10. The Company’s prime brokers are required to provide custody services for the Company’s securities. The prime brokers are not permitted under U.S. law to lend out (or “re-hypothecate”) the Company’s securities if these securities are fully paid for unless the Company enters into a securities lending agreement. If the Company uses margin leverage, the prime brokers may lend out the Company’s securities to fund the prime brokers’ business, but are restricted under U.S. law; that is, the prime brokers may only lend out an amount of the Company’s securities that is less than or equal to 140% of the debit balance that the prime broker extends to the Company as credit. The Company monitors its accounts to avoid running a debit balance. Additionally, the Company has processes in place that allow it to quickly move securities from its prime brokers into a regulated bank entity which is not legally permitted to re-hypothecate client securities.

Pershing Square Holdings, Ltd. 117 Certain Regulatory Disclosures 1. None of the Company’s assets are subject to special arrangements arising from an illiquid nature. 2. There have been no material changes to the Company’s risk profile and risk management system as disclosed in the Prospectus of the Company dated October 2, 2014. 3. a) There have been no changes to the maximum amount of leverage which the Investment Manager may employ on behalf of the Company since the Company’s inception. The terms of the Company’s Bonds restrict the Company from incurring indebtedness beyond a total debt-to-capital ratio of 33.3%. If a key man event occurs, the terms of the Bonds reduce the Company’s permitted total debt-to-capital ratio to 25%. Articles 7 and 8 of the Level 2 Regulations of the Alternative Investment Fund Managers Directive (the “Directive”) set forth the methodology of calculating the leverage of the Company in accordance with the gross method and the commitment method. Leverage is expressed as the exposure of the Company. Exposures are calculated using the sum of the absolute values of all positions valued in accordance with Article 19 of the Directive and all delegated acts adopted pursuant to Article 19. For derivatives, exposures are calculated using the conversion methodology set forth in Annex II to the Level 2 Regulations. For all other securities, exposures are calculated using market values.

The gross method excludes cash and cash equivalents held in the Company’s base currency as per Article 7. The commitment method includes cash and cash equivalents and employs netting and hedging arrangements as per Article 8. As of December 31, 2025, the total amount of leverage employed by the Company as per the gross method and the commitment method was $18,368,455,402 and $19,473,092,488, respectively. The Company generally does not expect to use margin financing. In the past, securities purchased by the Company pursuant to prime brokerage services agreements typically, but not always, have been fully paid for. Although it is anticipated that securities purchased in the future typically will be fully paid for, this may not be the case in all circumstances. In addition, the Company, from time to time, enters into total return swaps, options, forward contracts and other derivatives, some of which have inherent recourse leverage. The Company generally uses such derivatives to take advantage of investment opportunities or manage regulatory, tax, legal or other issues and not in order to obtain leverage. However, depending on the investment strategies employed by the Company and specific market opportunities, the Company may use such derivatives for leverage. (b) There have been no material changes to the right of the re-use of collateral or any guarantee granted under any leveraging arrangement.