PERSHING SQUARE INC.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

We are a leading alternative asset manager with approximately $32.8 billion in total AUM and $23.0 billion in Fee-Paying AUM, of which 98% is permanent capital, as of September 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.

Previous wording

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.

Current wording

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 shareholder. 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.

Previous wording

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:

Current wording

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 NAV 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:

Previous wording

Commitment to Fund Investors. Our fund investors come first. While we believe that our commitment to our fund investors is in the long-term interest of our business and our common stockholders, in prioritizing our fund investors, we may take actions that could reduce our profits in the short term. For example, in February 2024, we amended the investment management agreement between PSH and PSCM to provide for a fee offset arrangement that reduces the performance fees we receive from PSH as a function of the fees we receive from other funds we manage, which, following the Combined Transaction, include “offsettable management fees” from PSUS. For more information, please see “—Key Components of our Results of Operations—Income—Performance Fees” below. Similarly, in connection with the Howard Hughes Transaction, we reduced the management fees paid to PSCM by PSH and the private funds. The reduction was calculated as the HHH Fees (as defined below) multiplied by the percentage of HHH’s shares outstanding held by each such fund attributable to fee-paying capital.

Current wording

Commitment to Fund Investors. Our fund investors come first. While we believe that our commitment to our fund investors is in the long-term interest of our business and our common shareholders, in prioritizing our fund investors, we may take actions that could reduce our profits in the short term. For example, in February 2024, we amended the investment management agreement between PSH and PSCM to provide for a fee offset arrangement that reduces the performance fees we receive from PSH as a function of the fees we receive from other funds we manage, which, following the Combined Transaction, include “offsettable management fees” from PSUS. For more information, please see “—Key Components of our Results of Operations—Income—Performance Fees” below. Similarly, in connection with the Howard Hughes Transaction, we reduced the management fees paid to PSCM by PSH and the private funds. The reduction was calculated as the HHH Fees (as defined below) multiplied by the percentage of HHH’s shares outstanding held by each such fund attributable to fee-paying capital.

Previous wording

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.

Current wording

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 September 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 Vantage Acquisition, 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.

Previous wording

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.

Current wording

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, one share of our common stock for every five 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 five 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.

Previous wording

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.

Current wording

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, PS Inc. is taxed as a corporation for U.S. federal, state and local income tax purposes, and PSCM, our operating partnership, is 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.

Previous wording

Compensation Costs Related to Combined Transaction. Under the terms of the Long Term Incentive Plan (the “LTIP”), the Combined Transaction constituted a “Terminal Value Event,” entitling certain partners to an increase in their permanent profits-interests (defined below in “Changes to Compensation Arrangements”). Additionally, certain partners who held PSH shares received additional permanent profits-interests in connection with the discontinuation of the affiliate fee rebate, as discussed above. The increase in permanent profits-interests in both cases was deemed a new grant under ASC 718 with immediate vesting. The grant date fair value of $61.0 million was recognized in profit-sharing partner compensation.

Current wording

Compensation Costs Related to Combined Transaction. Under the terms of the Long Term Incentive Plan (the “LTIP”), the Combined Transaction constituted a “Terminal Value Event,” entitling certain partners to an increase in their permanent profits-interests (defined below in “Changes to Compensation Arrangements”). Additionally, certain partners who held PSH shares received additional permanent profits-interests in connection with the discontinuation of the affiliate fee rebate, as discussed above. The increase in permanent profits-interests in both cases was deemed a new grant under ASC 718 with immediate vesting. The grant date fair value of $61.0 million was recognized in profit-sharing partner compensation in the second quarter of 2026.

Previous wording

Tax Treatment. As a limited partnership, PS Holdco was not subject to U.S. federal income taxes, although it was subject to certain state and local taxes including the UBT. Following the Corporate Conversion in connection with the Combined Transaction, PS Inc. is subject to U.S. federal and state income taxes applicable to corporations.

Current wording

Tax Treatment. As a limited partnership, PS Holdco was not subject to U.S. federal income taxes, although it was subject to certain state and local taxes including UBT. Following the Corporate Conversion in connection with the Combined Transaction, PS Inc. is subject to U.S. federal, state and local income taxes applicable to corporations, and PSCM is subject to UBT.

Previous wording

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.

Current wording

In connection with the Combined Transaction, we delivered, for no additional consideration, one share of our common stock for every five PSUS Shares purchased in the PSUS IPO and 1.5 shares of our common stock for every five PSUS Shares purchased in the PSUS Private Placement. The delivery 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 held 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.

Previous wording

Management fee presented on an annual basis.

Current wording

Management fee presented on an annual basis. The HHH Base Management Fee is subject to an annual adjustment for inflation.

Previous wording

† 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.

Current wording

† 20% of PSUS’s management fees are “offsettable management fees” which reduce the PSH Performance Fee PSCM receives. The PSH 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.

Previous wording

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.

Current wording

As compensation for services to PSUS, PSCM receives a quarterly management fee equal to 0.5% (2.0% on an annual basis) of the NAV 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 NAV, 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.

Previous wording

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.

Current wording

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 September 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 September 30, 2026 was $65.4095.

Previous wording

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:

Current wording

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 nine months ended September 30, 2026 and 2025:

Previous wording

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.

Current wording

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 a 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.

Previous wording

PSCM receives a “Variable Performance Fee” from PSH in an amount equal to 16% of the NAV appreciation (before giving effect to accrued performance fees) attributable to the fee-paying shares of PSH above a high-water mark minus a fee reduction of (i) 20% of the performance fees earned by PSCM from non-PSH funds (currently only PSLP and PSINTL) and (ii) 20% of management fees earned from PSUS and any future non-PSH funds that invest in public securities and do not charge performance fees. We refer to this arrangement as the “fee offset arrangement” in this Quarterly Report. In the event the offsettable fees in respect of a previous calculation period exceed the 16% of the NAV appreciation described above, the excess amount is carried forward to the next calculation period. See Note 4, “Related Party Transactions—Performance Fees / Allocations” to our Consolidated Financial Statements included in this Quarterly Report for more information.

Current wording

PSCM receives the PSH Performance Fee in an amount equal to 16% of the NAV appreciation (before giving effect to accrued performance fees) attributable to the fee-paying shares of PSH above a high-water mark minus a fee reduction of (i) 20% of the performance fees earned by PSCM from non-PSH funds (currently only PSLP and PSINTL) and (ii) 20% of management fees earned from PSUS and any future non-PSH funds that invest in public securities and do not charge performance fees. We refer to this arrangement as the “fee offset arrangement” in this Quarterly Report. In the event the offsettable fees in respect of a previous calculation period exceed the 16% of the NAV appreciation described above, the excess amount is carried forward to the next calculation period. See Note 4, “Related Party Transactions—Performance Fees / Allocations” to our Consolidated Financial Statements included in this Quarterly Report for more information.

Previous wording

We consolidate the results of PSGP, which earns a performance allocation from PSLP. However, because we do not have any direct equity interests in PSGP, 100% of these performance allocations are reflected in non-controlling interest on our Consolidated Statements of Operations included in this Quarterly Report. See Note 2, “Significant Accounting Policies—Consolidation—PSGP” of the Consolidated Financial Statements included elsewhere in this Quarterly Report for a summary of the consolidated balances of PSGP. Additionally, refer to “—Net (Income) Loss Attributable to Non-Controlling Interest” for more information.

Current wording

We consolidate the results of PSGP, the general partner of PSLP, one of our managed funds. PSGP earns a performance allocation from PSLP which is recognized as performance fee revenue. However, because we do not have any direct equity interests in PSGP, PSCM and PS Inc. do not receive any proceeds from this performance allocation and all related revenue is reflected in non-controlling interest on our Consolidated Statements of Operations included in this Quarterly Report. See Note 2, “Significant Accounting Policies—Consolidation—PSGP” of the Consolidated Financial Statements included elsewhere in this Quarterly Report for a summary of the consolidated balances of PSGP. Additionally, refer to “—Net (Income) Loss Attributable to Non-Controlling Interest” for more information.

Previous wording

Refers to the amount distributed to us from PSCM with respect to the Preferred Performance Fee Carryforward from prior years, had this arrangement been in effect for the period presented, in an amount equal to the lesser of (i) the accrued Preferred Performance Fee Carryforward and (ii) the performance fees available for allocation to PS Inc. and CompCo, less the amounts distributed to us from PSCM with respect to the current year’s Preferred Performance Fee.

Current wording

Refers to the amount distributed to PS Inc. from PSCM with respect to the Preferred Performance Fee Carryforward from prior years, had this arrangement been in effect for the period presented, in an amount equal to the lesser of (i) the accrued Preferred Performance Fee Carryforward and (ii) the performance fees available for allocation to PS Inc. and CompCo, less the amounts distributed to us from PSCM with respect to the current year’s Preferred Performance Fee.

Previous wording

Refers to the amount distributed to CompCo from PSCM, had this arrangement been in effect for the period presented, in an amount equal to the difference, if any, between the performance fees available for allocation to the PS Inc. and CompCo and the Total Preferred Performance Fees paid to PS Inc.

Current wording

Refers to the amount distributed to CompCo from PSCM, had this arrangement been in effect for the period presented, in an amount equal to the difference, if any, between the performance fees available for allocation to PS Inc. and CompCo and the Total Preferred Performance Fees paid to PS Inc.

Previous wording

In connection with the Combined Transaction, the partners’ non-permanent profits-interests were converted to M Units, which generally vest over a period of 10 years and, upon vesting, may be redeemed for shares of PS Inc. common stock. See “—Employee Compensation and Benefits—Redeemable Interests in PSPG (“M Units”)” below for more information. Amortization expense associated with the vesting of such M Units, which is calculated based on the grant date fair value of the M Units, is recorded in employee compensation and benefits. The holders of the M Units are entitled to dividend equivalents on the underlying shares of PS Inc. common stock associated with M Units. All dividends will be recognized as a reduction of retained earnings when declared by the Board of Directors. The permanent profits-interests were converted to shares of PS Inc. common stock.

Current wording

In connection with the Combined Transaction, the partners’ non-permanent profits-interests were converted to M Units, which generally vest over a period of 10 years and, upon vesting, may be redeemed for shares of PS Inc. common stock. See “—Employee Compensation and Benefits—Redeemable Interests in PSPG (“M Units”)” below for more information. Amortization expense associated with the vesting of such M Units, which is calculated based on the grant date fair value of the M Units, is recorded in employee compensation and benefits. The holders of the M Units are entitled to dividend equivalents on the underlying shares of PS Inc. common stock associated with M Units. All dividends will be recognized as a reduction of equity when declared by the Board of Directors. The permanent profits-interests were converted to shares of PS Inc. common stock.

Previous wording

Employee compensation and benefits includes salaries, benefits, payroll taxes, discretionary cash bonuses, and for the periods following the Combined Transaction, also the cost of equity-based awards issued to our employees described below. We generally recognize employee compensation and benefit expenses over the related service period. On an annual basis, discretionary cash bonuses generally comprise a significant portion of total employee compensation and benefits as compared to salaries and other benefits. Discretionary cash bonuses are dependent upon a variety of factors, including the performance of our funds for the year.

Current wording

Employee compensation and benefits includes salaries, benefits, payroll taxes, discretionary cash bonuses, and for the periods following the Combined Transaction, also the cost of equity-based awards issued to our employees described below. We generally recognize employee compensation and benefit expenses over the related service period. Discretionary cash bonuses are dependent upon a variety of factors, including the performance of our funds for the year.

Previous wording

As described in Note 6, “Equity-Based Compensation” to our Consolidated Financial Statements included in this Quarterly Report, in connection with the Combined Transaction, we established the Pershing Square Inc. 2026 Equity Incentive Plan under which 20,000,000 shares of common stock were reserved in order to compensate and incentivize our employees and non-employee service providers. On April 28, 2026, PS Inc. granted 2,816,800 RSUs (“IPO RSU Awards”) under the Equity Incentive Plan, which are accounted for under ASC 718. Each RSU entitles the holder to receive one share of PS Inc. common stock upon vesting, net of shares withheld for tax withholding purposes in the case of employees, subject to the holder’s continued service through the applicable vesting date. The standard vesting schedule for the RSUs provides for vesting at December 31 of each year, with vesting of (i) 6.25% at each December 31 in years 1 to 4; (ii) 8.33% in years 5 to 7, and (iii) 16.67% in years 8 to 10. Additionally on April 20, 2026, in connection with our engagement of Marc Grandisson as our strategic adviser, effective March 5, 2027, PS Inc. agreed to grant to him 400,000 RSUs (“Strategic Advisor Award”) which will vest over an approximately three year period, beginning on April 1, 2027 and ending on February 1, 2030.

Current wording

As described in Note 6, “Equity-Based Compensation” to our Consolidated Financial Statements included in this Quarterly Report, in connection with the Combined Transaction, we established the Pershing Square Inc. 2026 Equity Incentive Plan under which 20,000,000 shares of common stock were reserved in order to compensate and incentivize our employees and non-employee service providers. On April 28, 2026, PS Inc. granted 2,816,800 RSUs (“IPO RSU Awards”) under the Equity Incentive Plan, which are accounted for under ASC 718. Each RSU entitles the holder to receive one share of PS Inc. common stock upon vesting, net of shares withheld for tax withholding purposes in the case of employees, subject to the holder’s continued service through the applicable vesting date. The standard vesting schedule for the RSUs provides for vesting at December 31 of each year, with vesting of (i) 6.25% at each December 31 in years 1 to 4; (ii) 8.33% in years 5 to 7, and (iii) 16.67% in years 8 to 10. Additionally on April 20, 2026, in connection with our engagement of Marc Grandisson as our strategic adviser, effective March 5, 2027, PS Inc. agreed to grant to him 400,000 RSUs (“Strategic Advisor Award”). We will recognize the cost of the Strategic Advisor Award on a straight-line basis over the period in which Mr. Grandisson is providing services, which begins on March 5, 2027.

Previous wording

As of June 30, 2026, the unrecognized compensation expense related to the M Units and RSU Awards is expected to be recognized over the weighted average remaining service period of 9.23 years and 8.15 years, respectively.

Current wording

As of September 30, 2026, the unrecognized compensation expense related to the M Units and RSU Awards is expected to be recognized over the weighted average remaining service period of 8.98 years and 7.97 years, respectively.

Previous wording

Other income (expense) primarily consists of a gain on the deconsolidation of PSUS resulting from the Combined Transaction, income from our office space sublease and license and reimbursement of office services.

Current wording

Other income (expense) primarily consists of income from our office space sublease and license and reimbursement of office services, and for the nine months ended September 30, 2026, a $16.0 million gain on the April 30, 2026 deconsolidation of PSUS resulting from the Combined Transaction.

Previous wording

Unrealized gain (loss) on investment in PSLP held at fair value consists of the gain or loss related to PSGP’s investment in PSLP. PSGP’s investment in PSLP is held at fair value, which is determined using the Net Asset Value of PSLP in accordance with the ASC 820, Fair Value Measurement,“practical expedient,” as defined by GAAP. Although we consolidate the results of PSGP, the general partner of PSLP which earns a performance allocation from PSLP, we do not hold any direct equity interests in PSGP. As a result, all income or loss related to PSGP is allocated to non-controlling interest. See Note 2, “Significant Accounting Policies—Consolidation—PSGP” of the Consolidated Financial Statements included elsewhere in this Quarterly Report for a summary of the consolidated balances of PSGP.

Current wording

Unrealized gain (loss) on investment in PSLP held at fair value consists of the gain or loss related to PSGP’s investment in PSLP. PSGP’s investment in PSLP is held at fair value, which is determined using the NAV of PSLP in accordance with the ASC 820 “practical expedient,” as defined by GAAP. Although we consolidate the results of PSGP, the general partner of PSLP which earns a performance allocation from PSLP, we do not hold any direct equity interests in PSGP. As a result, all income or loss related to PSGP is allocated to non-controlling interest. See Note 2, “Significant Accounting Policies—Consolidation—PSGP” of the Consolidated Financial Statements included elsewhere in this Quarterly Report for a summary of the consolidated balances of PSGP.

Previous wording

Our calculations of total assets under management, fee-paying assets under management and permanent capital AUM may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers. In addition, our calculation of total assets under management includes the fair value of invested capital in our funds from our personnel regardless of whether such invested capital is subject to fees. Our definitions of total assets under management and fee-paying assets under management are not based on any definition of total assets under management and fee-paying assets under management that is set forth in the agreements governing the investment funds we manage.

Current wording

Our calculations of total AUM, fee-paying AUM and permanent capital AUM may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers. In addition, our calculation of total AUM includes the fair value of invested capital in our funds from our personnel regardless of whether such invested capital is subject to fees. Our definitions of total AUM and fee-paying AUM are not based on any definition of total AUM and fee-paying AUM that is set forth in the agreements governing the investment funds we manage.

Previous wording

Total assets under management reflects (i) with respect to our core funds, the net assets as calculated in accordance with GAAP or IFRS, as applicable, while adding back accrued performance fees and the principal value of PSH’s outstanding bonds (approximately $3.7 billion and $3.6 billion as of December 31, 2025 and June 30, 2026, respectively), and including both the preferred and common shares for PSUS, and (ii) with respect to HHH, the market capitalization of HHH plus its net mortgages, notes, and loans payable as disclosed in its most recent periodic report filed with the SEC.

Current wording

Total AUM reflects (i) with respect to our core funds, the net assets as calculated in accordance with GAAP or IFRS, as applicable, while adding back accrued performance fees and the principal value of PSH’s outstanding bonds (approximately $3.7 billion and $3.6 billion as of December 31, 2025 and September 30, 2026, respectively), and including both the preferred and common shares for PSUS, and (ii) with respect to HHH, the market capitalization of HHH plus its net mortgages, notes, and loans payable as disclosed in its most recent periodic report filed with the SEC.

Previous wording

Changes in debt are included in Inflows and Outflows. For the three and six months ended June 30, 2026, outflows include $354 million of investor withdrawals and redemptions from PSLP and PSINTL in order to participate in the PSUS IPO and PSUS Private Placement.

Current wording

Private Funds refer to PSLP and PSINTL. For the nine months ended September 30, 2026, outflows include $354 million of investor withdrawals and redemptions from PSLP and PSINTL in order to participate in the PSUS IPO and PSUS Private Placement.

Previous wording

Fee-Paying AUM refers to (i) with respect to our core funds, the AUM we manage and earn a performance fee and/or management fee from, excluding the PSUS preferred shares, and (ii) with respect to HHH, the market capitalization of HHH. We believe this measure is useful to stockholders as it provides insight into the capital base upon which we earn our fees.

Current wording

Fee-Paying AUM refers to (i) with respect to our core funds, the AUM we manage and earn a performance fee and/or management fee from, excluding the PSUS preferred shares, and (ii) with respect to HHH, the market capitalization of HHH. We believe this measure is useful to shareholders as it provides insight into the capital base upon which we earn our fees.

Previous wording

Changes in debt are included in Inflows and Outflows. For the three and six months ended June 30, 2026, outflows include $273 million of investor withdrawals and redemptions from PSLP and PSINTL in order to participate in the PSUS IPO and PSUS Private Placement.

Current wording

Private Funds refer to PSLP and PSINTL. For the nine months ended September 30, 2026, outflows include $273 million of investor withdrawals and redemptions from PSLP and PSINTL in order to participate in the PSUS IPO and PSUS Private Placement.

Previous wording

Permanent capital AUM refers to the portion of Fee-Paying AUM that is not subject to withdrawal or redemption at the option of the fund investor or stockholder. We believe this measure is useful to stockholders as our permanent capital base allows us to take a long-term view and be opportunistic during periods of market volatility, enables superior, long-term investment and produces a financial profile characterized by steady, predictable and recurring management fees. Permanent capital is also a differentiating talent attraction and retention tool, allowing us to hire and retain the top analysts for our own investment team, high-quality employees throughout our company, and experienced senior executives for certain of our portfolio companies.

Current wording

Permanent capital AUM refers to the portion of Fee-Paying AUM that is not subject to withdrawal or redemption at the option of the fund investor or shareholder. We believe this measure is useful to shareholders as our permanent capital base allows us to take a long-term view and be opportunistic during periods of market volatility, enables superior, long-term investment and produces a financial profile characterized by steady, predictable and recurring management fees. Permanent capital is also a differentiating talent attraction and retention tool, allowing us to hire and retain the top analysts for our own investment team, high-quality employees throughout our company, and experienced senior executives for certain of our portfolio companies.

Previous wording

The tables below provide performance information for our core funds on an aggregate basis and HHH to facilitate an understanding of our results of operations for the periods presented. The tables below reflect the top 5 contributors and bottom 5 detractors to the change in market value of our total AUM, on an aggregate basis, individually presenting only those positions which represented greater than 3% of our total AUM at the beginning of the respective period. The information reflected in the tables below is not necessarily indicative of the future performance of any particular fund, HHH or our core funds and HHH in the aggregate. An investment in us is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. Our funds’ investments may be made under different economic conditions and may include different underlying investments in the future. See “Risk Factors—Risks Related to Our Business and Industry—The historical returns attributable to our funds and HHH, including those presented in this prospectus, should not be considered as indicative of the future results of our funds or HHH or of our future results or of any returns expected on an investment in our common stock”in the IPO Prospectus.

Current wording

The tables below provide performance information for our core funds on an aggregate basis and HHH to facilitate an understanding of our results of operations for the periods presented. The tables below reflect the top 5 contributors and bottom 5 detractors to the change in market value of our total FPAUM, on an aggregate basis, individually presenting only those positions which represented greater than 3% of our total AUM during the respective periods. The information reflected in the tables below is not necessarily indicative of the future performance of any particular fund, HHH or our core funds and HHH in the aggregate. An investment in us is not an investment in any of our funds. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. Our funds’ investments may be made under different economic conditions and may include different underlying investments in the future. See “Risk Factors—Risks Related to Our Business and Industry—The historical returns attributable to our funds and HHH, including those presented in this prospectus, should not be considered as indicative of the future results of our funds or HHH or of our future results or of any returns expected on an investment in our common stock”in the IPO Prospectus.

Previous wording

Each figure in the tables (other than HHH Change in Market Capitalization) is calculated by dividing the aggregate investment gain or loss attributable to that portfolio company across all of our funds by our total AUM at the beginning of the respective period (“BoP AUM”). Management, performance, and other fees are calculated on the same basis. HHH Change in Market Capitalization is calculated by dividing the change in HHH's market capitalization by our BoP AUM of the respective period.

Current wording

Each figure in the tables (other than HHH Change in Market Capitalization) is calculated by dividing the aggregate investment gain or loss attributable to that portfolio company’s FPAUM across all of our funds by our total FPAUM at the beginning of the respective period (“BoP FPAUM”). Management fees and other fees are calculated on the same basis. HHH Change in Market Capitalization is calculated by dividing the change in HHH's market capitalization by our BoP FPAUM of the respective period.

Previous wording

Total management fees increased $15.0 million, or 28%, on a gross basis, and $3.4 million, or 7%, net of the contra revenue related to the amortization of the Deferred HHH Premium and the Deferred PS Inc. IPO Share, from the three months ended June 30, 2025 to the three months ended June 30, 2026, driven by an increase of $16.5 million in management fees related to PSUS and an increase of $1.0 million in fees earned pursuant to the HHH Services Agreement, offset by a reduction in management fees of $1.1 million from PSLP, $1.0 million from PSH, and $0.5 million from PSINTL.

Current wording

Total management fees increased $9.7 million, or 15%, on a gross basis, and decreased $5.7 million, or 9%, net of the contra revenue related to the amortization of the Deferred HHH Premium and the Deferred Asset - PS Inc. IPO Shares, from the three months ended September 30, 2025 to the three months ended September 30, 2026, driven by an increase of $23.0 million in management fees related to PSUS, offset by a reduction in management fees of $7.8 million, $1.5 million, and $0.6 million from PSH, PSLP, and PSINTL, respectively, and a reduction of $3.4 million in the HHH Variable Management Fee earned pursuant to the HHH Services Agreement.

Previous wording

Total performance fees decreased $2.4 million from the three months ended June 30, 2025 to the three months ended June 30, 2026, due to a decrease of $1.0 million, $0.9 million, and $0.5 million of performance fees earned from PSINTL, PSLP, and PSH, respectively.

Current wording

Total performance fees decreased $3.9 million from the three months ended September 30, 2025 to the three months ended September 30, 2026, due to a decrease of $1.5 million, $1.2 million, and $1.1 million of performance fees earned from PSINTL, PSLP, and PSH, respectively.

Previous wording

General and administrative expense increased $4.6 million, or 62%, from the three months ended June 30, 2025 to the three months ended June 30, 2026, primarily driven by an increase of $3.5 million in deal expenses related to the Combined Transaction, an increase of $0.4 million related to the amortization of RSUs granted to our non-employee service providers, and an increase of $0.3 million related to directors and officers insurance, partially offset by a decrease of $0.6 million in office rent due to the termination of a portion of our office lease on January 30, 2026.

Current wording

General and administrative expense decreased $5.2 million, or 48%, from the three months ended September 30, 2025 to the three months ended September 30, 2026, primarily driven by a decrease of $5.1 million of deal expenses related to the Combined Transaction, $0.5 million in other legal expenses related to PSUS, and $0.8 million in office rent due to the termination of a portion of our office lease effective March 1, 2026, partially offset by an increase of $0.6 million related to the amortization of RSUs granted to non-employees and $0.3 million related to our New York Stock Exchange listing fees.

Previous wording

Other income was $1.3 million for the three months ended June 30, 2025 compared to other income of $16.2 million for the three months ended June 30, 2026. The change in other income was primarily driven by a $16.0 million gain recognized upon the derecognition of PSUS, partially offset by the termination of the license agreement with TABLE on December 31, 2025, and the termination of the sublease with NEOX on January 30, 2026, resulting in a decrease of $1.2 million in rental income from NEOX and TABLE between the two periods.

Current wording

Other income was $1.3 million for the three months ended September 30, 2025 compared to other income of $0.3 million for the three months ended September 30, 2026. The change in other income was primarily driven by the termination of the license agreement with TABLE on December 31, 2025, and the termination of the sublease with NEOX effective March 1, 2026, resulting in a decrease of $1.2 million in rental income from NEOX and TABLE between the two periods.

Previous wording

The unrealized gain on HHH shares held at fair value increased $73.8 million from the three months ended June 30, 2025 to the three months ended June 30, 2026, as a result of the larger increase in the share price of HHH’s publicly traded common stock during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

The unrealized gain on HHH shares held at fair value was $132.0 million for the three months ended September 30, 2025 compared to an unrealized gain of $19.2 million for the three months ended September 30, 2026. The change was driven by a larger increase in the share price of HHH’s publicly traded common stock during the three months ended September 30, 2025 compared to the three months ended September 30, 2026.