Bill Ackman on Inflation

Pershing Square Holdings, Ltd. 3 Chairman’s Statement INTRODUCTION I am pleased to report that 2025 was another year of impressive performance for PSH on an absolute and relative basis. Through the end of the year, PSH’s Net Asset Value (“NAV”) per share, including dividends, increased 20.9%, compared with a 17.9% return for the S&P 500 over the same period.i,ii In addition to another year of strong performance, the Investment Manager made significant progress on a number of strategic initiatives that position PSH for continued success in the years ahead. The Board was particularly pleased with PSH’s performance given the complex macroeconomic and geopolitical landscape that characterised the year. While inflation in the United States continued its gradual moderation, uncertainty surrounding the trajectory, timing, and ultimate destination of interest rates persisted, causing periods of volatility as markets repeatedly recalibrated their outlook. While U.S. economic growth exceeded expectations, uncertainty also persisted over the duration of restrictive financial conditions. Trade and tariff policy became a less acute source of market volatility as the year progressed, providing greater clarity for businesses and investors. Geopolitical risks remained elevated amid ongoing conflicts in Eastern Europe and the Middle East, and new questions emerged around strategic competition between the major economic blocs.

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.

Pershing Square Holdings, Ltd. 11 Big Beautiful Bill which will lead to large tax refunds early this year and provide massive incentives for investment, (3) the President and this administration’s highly pro-business posture which drives business confidence and includes a Federal Trade Commission which for the first time in four years is supportive of mergers and acquisitions, unleashing a large number of strategic and other transactions, (4) a massive deregulation initiative led by Secretary of the Treasury Scott Bessent, (5) reduced and stable inflation data that will allow the Federal Reserve to lower rates, (6) the extraordinary scale of data center and energy investments due to AI, (7) the productivity benefits of AI, (8) the wealth effects from stock market and private company valuation gains, (9) the potential for a peace dividend in the Middle East, South America, and potentially Europe as it appears the Russia/Ukraine war is closer to resolution, and (10) the accelerated pace of innovation, software development, and discovery due to AI. All of the above are occurring in a year with mid-term elections that typically swing against the incumbent administration. As such, the Trump Administration is extremely motivated to deliver on promises made and will likely take additional actions that will drive the economy.

Pershing Square Holdings, Ltd. 105 William Ackman was appointed the executive chairman of HHH’s board of directors. Ryan Israel, Pershing Square’s Chief Investment Officer, was named HHH’s Chief Investment Officer, a newly created role, and also joined the HHH board. Ben Hakim, Pershing Square’s President, continued in his role as a non-executive director. Jean-Baptiste Wautier was appointed to the HHH board as a new independent director. Pershing Square has the right to nominate a number of directors equal to 25% of the total number of HHH board members as long as it holds at least 17.5% of the fully diluted HHH shares; if Pershing Square holds less than 17.5% but at least 10% of the fully diluted HHH shares it has the right to nominate at least 10% of the total number of HHH board members; and if Pershing Square holds less than 10% of the fully diluted HHH shares it will no longer have the right to nominate directors. HHH entered into a Services Agreement with the Investment Manager in connection with the transaction pursuant to which the Investment Manager will provide investment, advisory, and other ancillary services including corporate development, transaction execution and capital markets services. The Investment Manager will also assist HHH in identifying and hedging macro-related risks. HHH will pay the Investment Manager a quarterly base fee of $3.75 million (adjusted annually for inflation), plus a quarterly variable fee equal to 0.

375% of the increase in the quarter-end stock price of the common stock of HHH over a reference price of $66.1453, multiplied by a reference share count of 59,393,938 shares (based on the shares outstanding post-transaction). The reference price is adjusted annually for inflation and may also be equitably adjusted for any dividend, stock split, spin-off transaction or other capital reorganization of HHH with similar effect. The reference share count is only subject to adjustment in the event of stock splits, reverse stock splits or other capital reorganization, reclassification or adjustment with similar effect and will not be adjusted for future HHH share issuances for raising capital, acquisitions or employee compensation. HHH will not provide any additional fees, cash compensation, or equity incentives to Pershing Square or its personnel. Pursuant to an amendment to the Company’s IMA dated August 5, 2025, the management fees payable by the Company to the Investment Manager will be reduced by the HHH Reduction Amount as described in Note 15. HHH Preferred Stock Commitment On December 18, 2025, the Company announced that it had entered into an equity commitment letter to subscribe for up to $1.0 billion of non-voting exchangeable perpetual preferred stock to be issued by HHH (the “HHH Preferred”). The investment is being made in connection with HHH’s agreement to acquire Vantage Group Holdings, Ltd.