Bill Ackman on Volatility vs Risk

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.

Taken together, these and other factors reinforced an environment in which market volatility is increasingly influenced by policy expectations and geopolitical developments, creating a more challenging investing landscape. The Board remains focused on long-term value creation for PSH shareholders and believes that the Investment Manager’s disciplined, fundamentals-driven approach continues to serve investors well. Periods of market dislocation during the year allowed the Investment Manager to deploy capital at attractive valuations, consistent with its patient and opportunistic investment philosophy. During the year, PSH and the Investment Manager undertook a number of strategic initiatives designed to strengthen PSH’s balance sheet, enhance shareholder returns, and position the Company for long-term value creation, including debt issuances, increased shareholder distributions, share repurchases, and a significant investment in Howard Hughes Holdings, Inc. (NYSE:HHH). The Board believes the Investment Manager’s strategic initiatives and performance continue to demonstrate the strength of its long-term orientation in an increasingly complex global environment. These actions, including subsequent developments at HHH and related commitments by PSH, are discussed in greater detail in the sections that follow. INVESTMENT PERFORMANCE During the year ended December 31, 2025, PSH’s NAV per share, including dividends, increased by 20.9% net of fees, ending the year at $85.32.

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.

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. 28 Risk Description Mitigating Factors Market Risk Adverse changes affecting the global financial markets and global economy may have a material negative impact on the performance of the Company’s investments or may cause the prices of financial and derivative instruments in which the Company invests to be highly volatile. The Board and the Investment Manager have identified changes in U.S. trade and immigration policy as emerging risks to the stability of global financial markets. The Investment Manager monitors emerging risks to global markets as part of its portfolio management process and seeks to build a portfolio that has limited exposure to changing market conditions. While the Company is not committed to maintaining market hedges at any time, the Investment Manager may seek to opportunistically invest in hedges to protect the Company’s portfolio against specific macroeconomic risks and capitalize on market volatility. In order to mitigate market-related downside risk, the Company may acquire put options, short market indices or baskets of securities and/or purchase index or single-name credit default swaps, interest rate or currency hedges, or engage in other hedging strategies. Information Security An information security breach results in the disclosure of the Company’s sensitive information and/or access to core systems being disrupted or denied.

Pershing Square Holdings, Ltd. 33 Report of the Directors We present the Annual Report and Financial Statements of the Company for the year ended December 31, 2025. PRINCIPAL ACTIVITY The Company was incorporated in Guernsey, Channel Islands on February 2, 2012. It became a registered open-ended investment scheme under Guernsey law on June 27, 2012, and commenced operations on December 31, 2012. On October 1, 2014, the Guernsey Financial Services Commission (“GFSC”) approved the conversion of the Company into a registered closed- ended investment scheme. Please refer to Note 11 for further information on the various classes of shares (any reference to “Note” herein shall refer to the Notes to the Financial Statements). INVESTMENT POLICY The Company’s investment objective is to preserve capital and seek maximum, long-term capital appreciation commensurate with reasonable risk. For these purposes, risk is defined as the probability of permanent loss of capital, rather than price volatility. In its value approach to investing, the Company seeks to invest in long (and occasionally short) investment opportunities that the Investment Manager believes exhibit significant valuation discrepancies between current trading prices and intrinsic business (or net asset) value, often with a catalyst for value recognition. The Investment Manager may also seek short sale investments that offer absolute return opportunities.

Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Fair Value of Financial Instruments When the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined by the Investment Manager using prices obtained from counterparties or independent third-party pricing services/valuation agents. The independent third-party pricing services/valuation agents utilize proprietary models to determine fair value. The valuation agents’ modeling may consider, but is not limited to, the following inputs: amount and timing of cash flows, probability assessments, volatility of the underlying securities’ stock price, comparable transaction data, dividend yields and/or interest rates.

There were no transfers into or out of Level 3 fair value measurements since the last financial statement reporting date. Level 3 Reconciliation Level 3 investments are fair valued using valuation methodologies determined by the Investment Manager. In applying its valuation methods, the Investment Manager utilizes information including, but not limited to the following: amount and timing of cash flows, probability assessments, volatility of the underlying securities’ stock price, comparable transaction data, dividend yields and/or interest rates. The Investment Manager engaged an independent third-party valuation firm to conduct valuations of the SPARC Committed FPA and of the SPARC Sponsor Shares and the SPARC Sponsor Warrants held by SPARC Sponsor (each as disclosed in Note 16). The independent third-party valuation firm provided the Investment Manager with a written report documenting their recommended valuations as of the determination date. The following table summarizes the change in the carrying amounts associated with Level 3 investments for the years ended 2025 and 2024.

Quantitative Information of Significant Unobservable Inputs – Level 3 The quantitative information about the significant unobservable inputs used in the fair value measurement by the Company for Level 3 investments as of December 31, 2025 and December 31, 2024 are listed below. SPARC Sponsor Description December 31, 2025 December 31, 2024 Volatility 25.0% 25.0% Probability of Not Completing a Deal 30.0% 30.0% Expected Time to Complete a Deal 3.9 Years 4.4 Years Probability of Warrant Renegotiation 30.0% 30.0% Estimated Target Equity Value $4.5 billion $4.5 billion The SPARC Sponsor Warrants held through the Company’s investment in SPARC Sponsor are valued using a Black-Scholes option pricing model, with the following significant unobservable inputs: (i) Volatility, (ii) Probability of Not Completing a Deal, (iii) Expected Time to Complete a Deal, (iv) Probability of Warrant Renegotiation and (v) Estimated Target Equity Value. The Volatility reflects the anticipated implied volatility of the potential target company from SPARC’s business combination over the SPARC Sponsor Warrants’ 10-year term based on comparable measures derived from past and existing investments. The Probability of Not Completing a Deal reflects a discount relating to SPARC’s deadline to complete its business combination prior to the expiration of its term.

This analysis will likely remain unchanged until SPARC’s subscription warrants are quoted on the OTCQX marketplace of the OTC Markets Group Inc., which will not occur until after a business combination is announced. Sensitivity Analysis to Significant Changes in Unobservable Inputs with Level 3 Hierarchy The sensitivity analysis calculates the effect of a reasonably possible change of each significant unobservable input and its effect on the fair value with all other variables held constant as of December 31, 2025 and December 31, 2024. As of December 31, 2025 Inputs Sensitivity Used (+) Effect on Fair Value Sensitivity Used (-) Effect on Fair Value SPARC Sponsor Warrants Volatility 25.0% 5% $ 4,140,188 5% $ (4,153,556) Probability of Not Completing a Deal 30.0% 5% $ (2,592,277) 5% $ 2,592,277 Expected Time to Complete a Deal 3.9 Years 1 Year $ (1,293,334) 1 Year $ 1,341,128 Probability of Warrant Renegotiation 30.0% 5% $ (2,592,277) 5% $ 2,592,277 Estimated Target Equity Value $4.5 billion 5% $ 1,814,594 5% $ (1,814,594) SPARC Sponsor Shares Probability of Not Completing a Deal 30.0% 5% $ (184,637) 5% $ 184,637 As of December 31, 2024 Inputs Sensitivity Used (+) Effect on Fair Value Sensitivity Used (-) Effect on Fair Value SPARC Sponsor Warrants Volatility 25.0% 5% $ 3,892,649 5% $ (3,894,781) Probability of Not Completing a Deal 30.0% 5% $ (2,496,802) 5% $ 2,496,802 Expected Time to Complete a Deal 4.

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 index is not subject to any of the fees or expenses to which the Pershing Square funds are subject. The Pershing Square funds are not restricted to investing in those securities which comprise this index, their performance may or may not correlate to this index and the portfolio of the funds should not be considered a proxy for this index. The volatility of an index may materially differ from the volatility of the Pershing Square funds’ portfolios. The S&P 500 is comprised of a representative sample of 500 U.S. large-cap companies. The index is an unmanaged, float-weighted index with each stock's weight in the index in proportion to its float, as determined by Standard & Poors. The S&P 500 index is proprietary to and is calculated, distributed and marketed by S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC), its affiliates and/or its licensors and has been licensed for use. S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC. © 2026 S&P Dow Jones Indices LLC, its affiliates and/or its licensors. All rights reserved. iii. The Company’s share price performance is calculated based on the Company’s Public Shares traded on the LSE in USD and includes dividend reinvestment. Over the same period, the share price performance, including dividend reinvestment, of Public Shares listed on the LSE in Sterling increased by 26.1% iv. Discount to NAV is calculated based on the Company’s Public Shares listed on the LSE in USD.