Howard Hughes Holdings Inc.

The preparation of financial statements in accordance with GAAP requires management to make informed judgments, assumptions, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Other than as set forth below, there are no material changes to the critical accounting policies and estimates previously disclosed in our 2025 Annual Report.

Following the acquisition of Vantage, the Company recognized reserves for claims and claim expenses, goodwill, and other intangible assets. The preliminary purchase price allocation and the ongoing determination of the reserves for claims and claim expenses require complex or significant judgments and include estimates about matters which are inherently uncertain. These estimates are critical to the understanding of our financial condition and operating results, and as such, accounting for business combinations and reserves for claims and claim expenses represent new critical accounting estimates. A discussion of our significant accounting policies impacted by the Vantage Acquisition, including further discussion of the accounting policies described below, can be found in Note 1 -Presentation of Financial Statements and Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements under Item 1 of this Quarterly Report.

Accounting for Business Combinations

Methodology The Vantage Acquisition was accounted for as a business combination under ASC 805, which requires the assets acquired and liabilities assumed to be recorded at their estimated acquisition-date fair values. The preliminary purchase price allocation includes the recognition of identifiable intangible assets and any excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired as goodwill, if applicable. The Company will finalize the purchase price allocation during the measurement period as additional information becomes available, including final appraisals of certain acquired assets and assumed liabilities and final underlying tax bases. The Company engaged independent valuation specialists to assist management in determining the fair values of certain acquired assets and assumed liabilities. The most significant areas of judgment in the preliminary fair value assessment relate to broker relationships, trade name, internally developed technology, value of business acquired (VOBA), insurance licenses, and reserves for claims and claim expenses, net of reinsurance recoverable on unpaid losses. The resulting fair values and useful lives assigned to acquisition-related intangible assets will affect the amount and timing of future amortization expense.

Judgments and Uncertainties Determining the fair value of the acquired assets and assumed liabilities required significant judgment and estimates and was based on information available as of the acquisition date. The valuation of broker relationships was based on the multi-period excess earnings method and incorporated significant assumptions including projected net premiums written, retention rates, normalized growth assumptions, contributory asset charges, discount rates, long-term tax rates, and investment yields. The trade name was valued using the relief-from-royalty method, which required assumptions regarding royalty rates, projected net premiums written, growth assumptions, and discount rates. Internally developed technology was valued using the replacement cost method and incorporated estimates of labor costs, development timing, developer’s profit, entrepreneurial incentive, and obsolescence. VOBA was valued using a discounted cash flow model applied to the run-off of unearned premium reserves, net of reinsurance, and incorporated assumptions for loss and expense ratios, payment patterns, capital requirements, risk margin, and discount rates. Reserves for claims and claim expenses, net of reinsurance recoverable on unpaid losses, were measured using a discounted cash flow model applied to the actuarial run-off of recorded reserves and incorporated assumptions related to the time value of money, risk margin, actuarial payment patterns, capital requirements, cost of capital, and reserve payout assumptions. Changes in these assumptions or the receipt of additional information during the measurement period could result in material revisions to the preliminary purchase price allocation, including the amounts assigned to identifiable intangible assets, insurance-related liabilities, and goodwill.

Reserves for Claims and Claim Expenses

Nature of the Estimate As a result of our June 4, 2026 acquisition of Vantage, reserves for claims and claim expenses have become a critical accounting estimate in our consolidated financial statements. These reserves represent management’s estimate of the unpaid portion of the ultimate liability for claims and claim adjustment expenses for insured and reinsured events that have occurred on or before the balance sheet date. They comprise (i) case reserves for claims that have been reported to us and (ii) reserves for losses incurred but not reported (IBNR), which also reflect expected development on reported claims. The reserves were initially recorded at fair value as of the acquisition date in accordance with the acquisition method of accounting and are subsequently estimated using the actuarial methods and assumptions described below. We consider this the most significant accounting judgment associated with the acquired insurance and reinsurance operations because the ultimate cost of claims is not known at the reporting date, the estimate requires significant judgment, and a change in the estimate could have a material effect on our financial condition and results of operations.

Methodology In establishing these reserves, management considers claim-specific information, historical loss experience, actuarial analyses, and other relevant information, including expected loss ratios, reported and paid loss development patterns, claim frequency and severity trends, underwriting and pricing information, business mix, policy terms and conditions, cedent and broker information, industry data, and current economic, legal, regulatory, inflationary, and catastrophe-related conditions. The relative importance of these factors varies by line of business and by the maturity of the underlying loss experience. Where company-specific history is limited, management supplements internal data with industry data, which was a primary source of loss development patterns for many lines given the relatively short loss history of the acquired operations.

Management employs multiple actuarial methods to estimate ultimate losses, including the paid and reported (incurred) loss development (chain ladder) methods, the paid and reported Bornhuetter-Ferguson methods, frequency and severity methods, and the expected loss ratio method. The relative weight assigned to each method is a matter of actuarial judgment that depends on the characteristics of each line of business, the maturity of the cohort year being estimated, and the availability of credible historical data. In addition to quantitative actuarial indications, reserve estimates incorporate qualitative adjustments for factors that may not be fully captured by historical experience, such as judicial and litigation trends, legislative and regulatory activity, underwriting and business-mix changes, and, for reinsurance business, changes in cedents’ reserving and reporting practices.

Judgments and Uncertainties Estimating claims and claim expense reserves requires significant judgment because the ultimate cost of claims is not known at the reporting date and may vary materially from recorded amounts. The most significant judgments include the selection of expected loss ratios, loss development patterns, claim severity assumptions, and reporting patterns, particularly for lines of business with longer reporting or settlement patterns, reinsurance exposures, or limited company-specific historical experience. This uncertainty is affected by numerous factors, including claim emergence and reporting patterns, the length of time required to resolve claims, severity trends, catastrophe activity, inflation and social inflation, litigation trends, legislative and regulatory developments, and changes in business mix. Because these estimates are inherently uncertain, actual losses may differ materially from recorded reserves.

Because the acquisition closed on June 4, 2026, our results for the quarter ended June 30, 2026, include only approximately one month of post-acquisition activity for Vantage. Accordingly, while the reserve balance at June 30, 2026, reflects management’s best estimate based on information available at that date, early post-acquisition claims activity may be less predictive of future development, and reserve estimates may be adjusted in future periods as additional post-acquisition experience becomes available.

At June 30, 2026, our reserves for claims and claim expenses related to Vantage were approximately $2.1 billion on a gross basis and $1.6 billion net of reinsurance recoverable on unpaid losses. The gross reserves represented approximately 19% of our total consolidated liabilities and 53% of our total consolidated stockholders’ equity at that date. For the period from June 4, 2026 through June 30, 2026, changes in estimates of prior-period claims and claim expense reserves were not material.

Given the interrelationship of assumptions across lines of business, the limited period of post-acquisition activity, and the judgment involved in estimating reserves, management has not identified a single-assumption sensitivity that would be representative of the potential variability in the loss reserve estimate as of June 30, 2026. If a quantitative sensitivity to a reasonably likely change in a significant assumption becomes material and reasonably available, we will disclose the estimated effect of that change. While we believe that recorded loss reserves at June 30, 2026, are adequate, new information, events, or circumstances may result in ultimate losses that are materially greater or less than our recorded reserves, particularly with respect to catastrophe or large-event losses and longer-tail lines of business.

For additional information, refer to Note 9 -Reserves for Claims and Claim Expenses in the Notes to Condensed Consolidated Financial Statements under Item 1 of this Quarterly Report.