Pershing Square

The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Such factors are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report and the section entitled “Risk Factors” in our IPO Prospectus, as updated by our periodic filings with the SEC, including Part II. Item 1A. Risk Factors in this Quarterly Report.

On April 28, 2026, we completed the statutory conversion of Pershing Square Holdco, L.P. (“PS Holdco”), a Delaware limited partnership, to a Nevada corporation named Pershing Square Inc. (the “Corporate Conversion”) in connection with the Combined Transaction. Unless context suggests otherwise, references in this report to “Pershing Square,” “the Company,” “we,” “us,” and “our” refer (i) prior to the completion of the Corporate Conversion, to PS Holdco and its consolidated subsidiaries and (ii) from and after the completion of the Corporate Conversion, to Pershing Square Inc. and its consolidated subsidiaries. Certain amounts, percentages and other figures included in this Quarterly Report have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report have been calculated, in some cases, not on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report may vary from those obtained by performing the same calculations using the figures on the face of our Consolidated Financial Statements included elsewhere in this Quarterly Report. Certain other amounts that appear in this Quarterly Report may not sum due to rounding.

Business Overview

We are a leading alternative asset manager with approximately $32.5 billion in total AUM and $22.3 billion in Fee-Paying AUM, of which 98% is permanent capital, as of June 30, 2026. We believe our business model is simple and highly scalable. We employ a disciplined, research-intensive approach to fundamental value investing to preserve and grow our permanent capital at high rates of return using a set of core investment principles and opportunistic asymmetric hedges. We complement our organic growth from time to time with transactions like the Howard Hughes Transaction (described below) and by selectively launching other investment funds and completing other corporate transactions that create permanent capital, in each case, that leverage our core competencies to create large ‘overnight’ (after the completion of a new offering or corporate transaction) increases in our capital base without the requirement for significant new investment in personnel, infrastructure, and operating costs. We believe that we have a distinctive business approach as compared to other alternative asset managers and are well positioned to continue to compound our permanent capital at high rates of return, while continuing to explore opportunities that leverage our core competencies.

We conduct our business and generate substantially all of our revenues primarily in the United States through one operating and reportable segment. Our single reportable segment reflects the allocation of our resources, operational decision-making and assessment of our financial performance by our chief operating decision makers using a consolidated, “one-firm approach,” with a single expense pool.

Trends Affecting Our Business

We benefit from AUM that principally consists of “permanent capital” defined as capital that is not subject to withdrawal or redemption at the option of the fund investor or stockholder. Our organic AUM growth relies primarily on compounding our permanent capital at high rates of return over the long-term. As a result, unlike alternative asset managers who rely in large part on frequent fundraising to replace capital from traditional fixed-term drawdown funds and/or open-ended funds, our results are less sensitive to the market for raising investment capital, and we do not require the headcount and other costs required of a large fundraising operation enabling us to achieve greater operating leverage. Our permanent capital also enables us to invest with a long-term ownership horizon because we are not beholden to short-term investor capital flows.

We generate substantially all of our revenue from management fees and performance fees. We retain all of the management fees earned from our funds and HHH. With respect to performance fees, we are entitled to “Preferred Performance Fees,” which are the performance fees earned on the first five percentage points of fund returns, net of management fees, above the applicable high-water mark from certain core funds and subject to certain other offsettable fees.

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Any realized performance fees in excess of the Preferred Performance Fees, which we refer to as the “Subordinated Performance Fees,” are paid to CompCo and used to compensate our investment professionals and certain other employees. To the extent realized performance fees are insufficient to pay some or all of the Preferred Performance Fee, the unpaid portion accrues to subsequent crystallization periods until paid in full. We believe this arrangement results in recurring revenue that is less volatile and more predictable than conventional performance fee arrangements, with the result that effectively all of our earnings are stable, recurring fee-related earnings. See “—Key Components of Our Results of Operations—Income—Performance Fees—Allocation of Performance Fee Revenue” for an illustration of our Preferred Performance Fee arrangement for the allocation of performance fee revenue, as well as the relevant high-water marks, over the six-year period ending December 31, 2025 and as of June 30, 2026.

Because the management fees we earn are a function of the Fee-Paying AUM of our funds and the market capitalization of HHH, and the Preferred Performance Fees we receive depend on appreciation in Net Asset Value above a fund’s high-water mark, our results are correlated with the performance of our funds and the market capitalization of HHH. Our results and the performance of our funds and the market capitalization of HHH, in turn, may be influenced by the following factors:

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Howard Hughes Transaction

On May 5, 2025, we completed the Howard Hughes Transaction. Upon completion of the transaction, we along with our core funds owned 46.9% of outstanding shares of HHH common stock, although we have agreed generally to limit our voting power to 40.0% and our beneficial ownership to 47.0% of which 15.1% is owned by the Company and 31.0% is owned by the core funds (other than PSUS) as of June 30, 2026. The compensation earned under the terms of the HHH Services Agreement is described below under “Management Fees – HHH Fees.” We intend to assist in transforming HHH, a long-term holding of our core funds, into a diversified holding company. On June 4, 2026, HHH completed the previously announced acquisition of Vantage Group Holdings, Ltd. (“Vantage” and such acquisition, the “Vantage Acquisition”), a privately held specialty insurance and reinsurance holding company, for approximately $2.1 billion in cash. In connection with the closing, PSCM became the investment manager for Vantage and its insurance company subsidiaries for no incremental fee pursuant to investment management agreements.

Combined Transaction

On April 30, 2026, we and PSUS closed the Combined IPO of our common stock and PSUS Shares. In connection with the closing of the Combined IPO, we and PSUS also closed the Combined Private Placement of shares of our common stock and PSUS Shares. Gross proceeds to PSUS from the Combined Transaction, before deducting sales loads, placement fees and other offering expenses, were $5.0 billion, comprised of $2.026 billion raised in the PSUS IPO and $2.974 billion raised in the PSUS Private Placement (which includes our $200 million common shares investment in the PSUS Private Placement as part of the Anchor Investment (described below)). We delivered to each initial investor in the PSUS IPO, for no additional consideration, 1 share of our common stock for every 5 PSUS Shares purchased in the PSUS IPO. Similarly, we delivered to each investor (but not to us in connection with our $200 million private placement investment) in the PSUS Private Placement, for no additional consideration, 1.5 shares of our common stock for every 5 PSUS Shares purchased in the PSUS Private Placement. Shares of our common stock and PSUS Shares began trading on the New York Stock Exchange under the trading symbols "PS" and "PSUS", respectively, on April 29, 2026.

In connection with the PSUS IPO and PSUS Private Placement, we invested (i) $250 million (including the initial $17.1 million invested prior to the Combined Transaction) comprising (a) $200 million of common shares in the PSUS Private Placement and (b) $50 million of preferred shares in another private placement completed in connection with and upon completion of the PSUS IPO and (ii) agreed to maintain $100 million and $50 million of our investment in PSUS common and preferred shares (or substantially equivalent economic position), respectively, for at least 25 years following the consummation of the Combined Transaction, subject to certain exceptions and unless prohibited by applicable law (the “Anchor Investment”). We financed this additional investment using borrowings under the Senior Credit Facilities described under " — Liquidity and Capital Resources."

For periods following the completion of the PSUS IPO, as investment manager, PSCM provides management services to PSUS and earns a quarterly management fee equal to 0.5% (2.0% on an annual basis) of the NAV of PSUS, payable in advance at the beginning of each quarter. A portion of these management fees from PSUS, or the “offsettable management fees,” will reduce the performance fees we receive from PSH. We are not entitled to any type of performance fee or incentive allocation from PSUS. We have not and do not expect to incur material incremental recurring general and administrative expense as a result of the PSUS IPO, although we incurred one-time transaction costs.

As a result of the Combined Transaction, we recognized a deferred asset (“Deferred Asset - PS Inc. IPO Shares”) for the fair value (the “Share Value”) of the shares of our common stock delivered, for no additional consideration, to each initial investor in the PSUS IPO and each investor in the PSUS Private Placement (each, a “private placement investor”).

Corporate Conversion

For periods prior to the Corporate Conversion, we were historically treated as a partnership for U.S. tax purposes and were not subject to U.S. federal income taxes, although we were subject to certain state and local taxes as discussed in Note 2, “Significant Accounting Policies—Income Taxes” of the Consolidated Financial Statements included elsewhere in this Quarterly Report. In connection with the Combined Transaction, we completed the Corporate Conversion effective April 28, 2026. For periods following the Corporate Conversion, we are taxed as a corporation for U.S. federal and state income tax purposes and subject to UBT income tax. We refer to this conversion throughout this Quarterly Report as the “Corporate Conversion.” See “Summary—Reorganization Transactions—Corporate Conversion” in our IPO Prospectus for more information on the Corporate Conversion.

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Factors Affecting Comparability

Our results of operations in periods following the Combined Transaction may not be comparable to our historical results of operations, principally for the following reasons:

In connection with the completion of the Combined Transaction on April 30, 2026, we recognized a $610.2 million deferred asset for the relative fair value of the shares of PS Inc. common stock delivered, for no additional consideration, to each investor in the PSUS IPO and each private placement investor. The Deferred Asset - PS Inc. IPO Shares is amortized as contra-revenue in management fees on a straight-line basis over a period of 10 years beginning April 30, 2026.

Accordingly, although our management fees have increased following the HHH Transaction and the Combined Transaction, they are subject to a non-cash contra-revenue adjustment for the amortization of the Deferred HHH Premium and the Deferred Asset - PS Inc. IPO Shares.

Additionally, there is an arrangement for the allocation of performance fees between PS Inc. and CompCo, which compensates our senior professionals. Prior to the Combined Transaction, we recorded the Subordinated Performance Fee paid to CompCo in profit-sharing partner compensation. Subsequent to the Combined Transaction,

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we will recognize the Subordinated Performance Fee in employee compensation and benefits. See “—Allocation of Performance Fee Revenue” below for more information.

Changes in Equity Ownership following the Combined Transaction

In connection with the Combined Transaction, we delivered, for no additional consideration, 1 share of our common stock for every 5 PSUS Shares purchased in the PSUS IPO and 1.5 shares of our common stock for every 5 PSUS Shares purchased in the PSUS Private Placement. The issuance of 24,747,254 shares of our common stock to the investors in the Combined Transaction was accompanied by a contribution (the “IPO Contribution”) to PS Inc. of an equal number of shares of our common stock by our founder and partners (our “pre-IPO management owners”). Accordingly, although the Combined Transaction resulted in a decrease in the ownership of PS Inc. common stock by our pre-IPO management owners, on the one hand, and an increase in the ownership by the investors in the Combined Transaction, on the other hand, it did not result in any change in the total number of our shares of common stock outstanding. There was no change in the 10% ownership of PS Inc. common stock by the Strategic Investors, pursuant to the terms of the Strategic Investment.

The following table presents the equity holdings of the relevant ownership groups immediately before and after the Combined Transaction, inclusive of the conversions described in “—Factors Affecting Comparability—Changes to Compensation Arrangements.”

Key Components of Our Results of Operations

Income

We generate substantially all of our revenue from management fees and performance fees under the terms of the investment management agreements with the funds we manage. We also earn revenue from management fees under the terms of the HHH Services Agreement.

The simplified diagram below depicts the management fees and performance fees we earn from our core funds and HHH as of June 30, 2026. The diagram below is presented for illustrative purposes only to facilitate an understanding of our revenue streams following the completion of the Corporate Conversion and Combined Transaction.

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* Management fee presented on an annual basis.

† 20% of PSUS’s management fees are “offsettable management fees” which reduce the Variable Performance Fee PSCM receives from PSH. PSH’s Variable Performance Fee is also reduced by 20% of the performance fees earned by PSCM from non-PSH funds. See “—Performance Fees” below for more information.

Management Fees – Core Funds

Management fees consist of fees earned by PSCM for providing management and administrative services to our funds. PSCM acts as an investment manager providing management and administrative services to PSUS, PSH, and our private funds in accordance with each of their investment management agreements.

As compensation for services to PSUS, PSCM receives a quarterly management fee equal to 0.5% (2.0% on an annual basis) of the Net Asset Value of PSUS, and as compensation for services to PSH and our private funds, PSCM receives a quarterly management fee equal to 0.375% (1.5% on an annual basis) of the Net Asset Value, before any accrued performance fees or allocation, (i) with respect to PSH, of its fee-paying shares, (ii) with respect to PSLP, of the capital accounts relating to each of its fee-paying limited partners, and (iii) with respect to PSINTL, of each series of its fee-paying shares. In connection with the Howard Hughes Transaction, we reduced the management fees paid to PSCM by PSH and the private funds by an amount, which was calculated as the HHH Fees multiplied by the percentage of HHH’s shares held by each such fund attributable to its fee-paying capital. Management fees from our funds are recognized over the period during which the related services are performed. See “Business—Advisory Fees and Compensation” in the IPO Prospectus for more information.

Management fees earned from our funds are generally calculated and paid to us quarterly in advance, based on the amount of fee-paying assets under management at the beginning of the quarter. Management fees are prorated for capital contributions in our private funds received during the quarter. Accordingly, changes in our management fee revenue from quarter to quarter are driven by changes in the quarterly balances of fee-paying assets under management and the relative magnitude and timing of contributions and withdrawals in our private funds in a given quarter.

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Management Fees – HHH Fees

Management fees also consist of the quarterly HHH Fees earned by PSCM for providing investment advisory and other services to HHH. Pursuant to the HHH Services Agreement, we support HHH’s new diversified holding company strategy by providing services to HHH, such as (i) investment advisory services, (ii) making recommendations with respect to hedging, balance sheet optimization and capital allocation, (iii) executing transactions, (iv) assisting HHH with business and corporate development functions, (v) making voting recommendations for HHH’s investments, (vi) assisting with and advising on fundraising, (vii) monitoring operations of HHH and its investments, subject to the day-to-day authority and responsibility of HHH’s management, (viii) providing recommendations for persons to serve as designees or deputies of HHH’s Chief Investment Officer, (ix) engaging and supervising HHH’s third-party service providers, (x) making dividend payment recommendations, and (xi) providing other services as may be agreed upon.

As compensation for providing services to HHH, we agreed to a (i) a quarterly base fee (the “HHH Base Management Fee”) of $3,750,000 ($15,000,000 on an annual basis) and (ii) a quarterly variable fee (the “HHH Variable Management Fee” and together with the HHH Base Management Fee, the “HHH Fees”) equal to 0.375% of the excess value of the quarter-end per share stock price of HHH common stock over an initial reference share price of $66.1453, multiplied by a reference share count of 59,393,938 shares. The HHH Base Management Fee and reference share price are subject to annual adjustment for inflation, based on the Core PCE Price Index, and the reference share price and reference share count are subject to adjustment for stock splits, reclassifications or similar capital changes.

The HHH Base Management Fee is calculated and paid to us quarterly in advance at the beginning of each quarter. For the 2026 calendar year, the HHH Base Management Fee increased to $3,786,000 per quarter due to the inflation adjustment. The HHH Variable Management Fee is calculated and paid to us quarterly no later than fifteen days following the end of each quarter, based on the volume-weighted average trading price of HHH common stock for the fifteen trading days ending on the last trading day of such quarter. Accordingly, changes in our revenue from the HHH Variable Management Fee will be driven by changes in the stock price of HHH common stock from quarter to quarter. As of June 30, 2026, the reference share price was $67.6695 and the volume-weighted average trading price of HHH common stock for the fifteen trading days ending on June 30, 2026 was $67.9560.

Management Fees – Contra-Revenue

We recognized a $292.8 million deferred asset for the premium paid above HHH’s publicly traded share price, which is deemed for accounting purposes to represent the amount paid to obtain the HHH Services Agreement when we completed the Howard Hughes Transaction. The Deferred HHH Premium is amortized as contra-revenue in management fees on a straight-line basis over a period of 20 years beginning May 5, 2025.

In addition, we recognized a $610.2 million deferred asset for the relative fair value of the shares of PS Inc. common stock delivered, for no additional consideration, to each investor in connection with the Combined Transaction. The Share Value is amortized as contra-revenue in management fees on a straight-line basis over a period of 10 years beginning April 30, 2026.

The following table presents a summary of the expected amortization of the Deferred HHH Premium and Deferred Asset - PS Inc. IPO Shares, to be amortized as contra-revenue, for each of the periods presented below:

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The amortization of the Deferred HHH Premium and the Deferred Asset - PS Inc. IPO Shares are non-cash charges and do not affect our cash flows from operations. The following table presents a summary of all sources of management fees for the three and six months ended June 30, 2026 and 2025:

Performance Fees

Performance fees consist of fees and allocations earned by PSCM, as investment manager, from certain of our funds generally based on the NAV appreciation of such funds above a high-water mark. We recognize performance fees from PSH on a “net” basis giving effect to the “fee offset arrangement” as described below.

Performance fees or allocation, if earned, are payable upon the occurrence of crystallization events, which include, but are not limited to, December 31 of each year, withdrawals or capital redemptions from our private funds and PSH’s payment of dividend. Any crystallized or accrued performance fees for PSINTL and PSH earned during the year and outstanding at year-end are reported within performance fees receivable. We are not entitled to any type of performance fee or incentive allocation from PSUS.