Significant Accounting Policies

3 Months Ended

Mar. 31, 2026

Accounting Policies [Abstract]

Significant Accounting Policies

2.SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited consolidated financial statements (the “Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Consolidated Financial Statements. The Consolidated Financial Statements include the accounts of PS Holdco, its wholly owned subsidiaries, and entities in which PS Holdco or a consolidated subsidiary is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

These Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes included in our IPO Prospectus filed with the SEC on April 30, 2026 pursuant to Rule 424(b)(4) under the Securities Act relating to our Registration Statement on Form S-1 (File No. 333-294165).

All amounts are stated in U.S. dollars. The following is a summary of the significant accounting and reporting policies used in preparing the Partnership’s Consolidated Financial Statements.

Use of Estimates

The preparation of the Partnership’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the amounts of income and expenses during the reported period. While management believes that the estimates utilized in preparing the Consolidated Financial Statements are reasonable and prudent, actual results could differ from those estimates.

Consolidation

PS Holdco consolidates all subsidiaries in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). The assets, liabilities and results of operations of all subsidiaries are included in the Partnership’s Consolidated Financial Statements. The Partnership does not have any variable interests in variable interest entities (“VIEs”) that are not consolidated.

In accordance with ASC 810, PS Holdco consolidates all entities that it, or any of its subsidiaries, control either as the primary beneficiary of a VIE or through a majority voting interest. The Partnership identifies VIEs it must consolidate by evaluating (i) whether it holds a variable interest in an entity, (ii) whether the entity is a VIE, and (iii) whether the Partnership’s involvement would make it the primary beneficiary. Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities (“VOEs”). Under the VOE model, the Partnership consolidates those entities for which it holds a majority voting interest.

In evaluating whether the Partnership holds a variable interest in an entity, fees received from the entity (including management fees and performance fees) that are customary and commensurate with the level of services provided are not considered variable interests where the Partnership does not also hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity.

If there are entities where the Partnership holds a variable interest, the Partnership must then determine whether each entity qualifies as a VIE and, if so, whether the Partnership is the primary beneficiary. A VIE is a corporation, partnership, limited liability company, trust or other legal structure used to conduct activities or hold assets that has: (i) insufficient equity to carry out its principal activities without additional subordinated financial support, (ii) a group of equity owners that lack the power to direct its activities that significantly impact economic performance, or (iii) a group of equity owners that do not have the obligation to proportionally absorb losses or the right to proportionally receive returns generated by its operations.

In evaluating whether the Partnership is the primary beneficiary of a VIE, the Partnership evaluates its economic interests in the entity held either directly or indirectly. VIEs are consolidated when an entity, as the primary beneficiary, holds a controlling financial interest in the VIE. An enterprise is deemed to have a controlling financial interest in a VIE if (i) the enterprise has the power to direct the activities of a VIE that impacts the economic performance and (ii) the enterprise has the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE.

Consolidated Entities

As of March 31, 2026, the accounts of the Partnership includes PS Holdco and the following consolidated legal entities:

•Intermediate Holdings, as a 100% directly owned subsidiary

•PSCM, as a 100% indirectly owned subsidiary (through its ownership in Intermediate Holdings)

•Pershing Square GP, LLC (“PSGP”), the general partner of PSLP, as a VIE despite the Partnership not holding any direct equity interests

•West Side Services, LLC as a 100% owned subsidiary of PSCM related to certain of its office operations

•PSCM GP, as a 100% owned subsidiary of Intermediate Holdings

•Pershing Square USA, Ltd. (“PSUS”), as a 100% owned subsidiary of PSCM

PSGP

The Partnership concluded that PSGP should be consolidated because PSCM compensates its personnel using the performance allocations received by PSGP, and PSCM is exposed to variability in the expected losses or returns of PSGP and holds a variable interest in PSGP. PSCM, as investment manager of the Pershing Square Funds, has the power to direct the activities of PSGP that most significantly impact its economic performance (i.e., PSGP’s receipt of performance allocations from PSLP), and PSCM is the primary beneficiary of such economic performance as a result of using PSGP’s performance allocations to compensate PSCM’s personnel.

The following tables summarize the consolidated balances of PSGP:

Summarized Financial Information - Pershing Square GP, LLC	March 31, 2026		December 31, 2025
Statements of Financial Condition
Assets
Investment in Pershing Square, L.P., at fair value	$	54,669,802	$	79,288,239
Due from affiliates		5,660,559		11,800,000
Total assets	$	60,330,361	$	91,088,239
Liabilities and Equity
Accrued compensation and benefits	$	8,579,256	$	16,593,355
Performance fee distributions payable		5,660,559		11,800,000
Total liabilities		14,239,815		28,393,355
Non-controlling interest		46,090,546		62,694,884
Total liabilities and equity	$	60,330,361	$	91,088,239

	Three months ended March 31,
Statements of Operations	2026			2025
Unrealized gain (loss) on investment in Pershing   Square, L.P. held at fair value	$	(10,943,780	)	$	93,128
Performance allocation from Pershing Square, L.P.(1)		-			157
Profit-sharing partner compensation		-			(53	)
Net income (loss) attributable to non-controlling interest	$	(10,943,780	)	$	93,232
(1) Included in performance fees on PS Holdco's Consolidated Statements of Operations

PSUS

PSUS is a Delaware statutory trust formed on November 28, 2023 that is registered with the SEC under the Investment Company Act of 1940, as amended, as a closed-end, non-diversified management investment company. PSCM has purchased PSUS Shares for the purpose of providing operating capital. As of March 31, 2026, PSCM was the sole equity holder of PSUS Shares, and PSUS is therefore consolidated by the Partnership. Refer to Note 4 for details on the share purchases, and Note 11 for details of the Combined IPO.

Pershing Square Funds

The Partnership has evaluated the Pershing Square Funds, their respective general partners and any affiliated entities, as applicable, for consolidation with the Partnership in accordance with ASC 810. As the Partnership does not hold economic interests in the Pershing Square Funds that would absorb more than an insignificant amount of their expected losses or returns, the Partnership does not hold a variable interest in any of the Pershing Square Funds. The Partnership also does not hold a majority of the voting interests in the Pershing Square Funds. As a result, the Pershing Square Funds are not required to be consolidated with the Partnership under ASC 810.

SPARC Sponsor

PSCM is the non-member manager of Pershing Square SPARC Sponsor, LLC (“SPARC Sponsor”), a Delaware limited liability company. The Pershing Square Funds are the non-managing members of SPARC Sponsor. SPARC Sponsor is the sponsor entity of Pershing Square SPARC Holdings, Ltd. (“SPARC”), a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other business combination transaction with one or more businesses. SPARC is actively looking for target companies for its business combination. SPARC Sponsor is not required to be consolidated with the Partnership under ASC 810.

Non-controlling Interests

A portion of the equity and income or loss from entities that are consolidated but not wholly owned by the Partnership is allocated to other owners. The portion allocated to other owners is included within non-controlling interest in the Consolidated Financial Statements. The Partnership does not hold any direct equity interests in PSGP. As a result, all net income related to PSGP is allocated to non-controlling interest, and the capital balance of PSGP represents the direct equity interests of other owners in PSGP.

Non-controlling interest is presented as a separate component of partners’ capital in the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Partners’ Capital to clearly distinguish the controlling interests in the Partnership (general partner and limited partner interests) from the non-controlling interests in PSGP, as applicable. Net income in the Consolidated Statements of Operations includes the net income attributable to the holders of non-controlling interests in PSGP. Income and losses are allocated to the non-controlling interest in proportion to their relative ownership interests.

Revenue Recognition

PSCM receives management fees and performance fees from certain Pershing Square Funds in exchange for investment management services. These revenues are derived from PSCM’s IMA with each fund. PSCM also receives fees from HHH in exchange for investment, advisory and other services, pursuant to the HHH Services Agreement.

The Partnership recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when the Partnership transfers promised goods or services to customers in an amount that reflects the consideration to which the Partnership expects to be entitled in exchange for those goods or services. See Note 4 for further disclosure regarding revenue recognition.

Management Fees - Pershing Square Funds

PSCM acts as investment manager providing management and administrative services to the Pershing Square Funds in accordance with each of their IMAs. As compensation for such services, PSCM receives a quarterly management fee of 0.375%, equal to 1.50% annually, of the net asset value (before any accrued performance fees or allocations) of the Pershing Square Funds. Subsequent to May 5, 2025 in connection with the HHH Transaction, PSCM reduces management fees by an amount equal to the fees earned from HHH multiplied by the percentage of HHH’s shares outstanding held by the relevant Pershing Square Fund attributable to fee-paying capital. Management fees are recognized in the period during which the related services are performed.

Management fees are generally calculated and paid to PSCM 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 the Private Funds received during the quarter. Accordingly, changes in PSCM’s management fee revenue from quarter to quarter are driven by changes in fee-paying assets under management and the relative magnitude and timing of contributions and withdrawals.

Management Fees - HHH Fees

Pursuant to the HHH Services Agreement, PSCM receives from HHH: (i) a quarterly base fee of $3.75 million (the “Base Management Fee”), which is adjusted annually for inflation and (ii) a quarterly variable fee equal to 0.375% of the increase in HHH’s equity market capitalization above a reference market capitalization (the “Variable Management Fee”, and collectively the “HHH Fees”). The reference market cap is determined by multiplying the post-transaction share count by a reference market price, which is adjusted annually for inflation, subject to equitable adjustment for stock splits, reclassification or similar capital changes.

The Base Management Fee is paid to PSCM quarterly in advance while the Variable Management Fee is calculated at the end of each quarter. However, both the Base Management Fee and Variable Management Fee are recognized in the period during which the related services are performed.

Consistent with ASC 606, the Partnership considers the HHH Services Agreement and the Share Purchase Agreement, dated May 5, 2025, by and between HHH and PS Holdco (the “HHH Share Purchase Agreement”, and together, the “HHH Agreements”) to be one contract as they were executed at the same time with a single commercial objective. As a result, the $900,000,000 purchase price was recognized as two separate amounts following the execution of the HHH Agreements: (i) a $607,230,000 investment in HHH, which was calculated as 9,000,000 shares multiplied by HHH’s publicly traded price of $67.47 as of the close of business on May 2, 2025, the most recent observable price at the time (refer to “Fair Value of Financial Instruments” for details on the classification and fair value election for this investment), and (ii) a $292,770,000 deferred asset for the premium paid above HHH’s publicly traded share price (the “HHH Premium”), which is deemed to represent the amount paid to obtain the HHH Services Agreement.

The HHH Premium is amortized on a straight-line basis as contra-revenue in management fees over a period of 20 years starting on May 5, 2025. The Partnership assessed the HHH Premium for impairment and determined that it was fully recoverable over the amortization period of 20 years; therefore, no impairment was recognized.

Performance Fees / Allocation

PSCM earns performance fees from PSINTL and PSH as their investment manager, and PSGP receives a performance allocation from PSLP as its general partner. Performance fees and the performance allocation are based on the net income of each Pershing Square Fund above a prior high-water mark.

The performance fees/allocation, if earned, are payable upon the occurrence of crystallization events, which include, but are not limited to, December 31 of each year, withdrawals from the Private Funds and PSH’s payment of a dividend. Performance fees are recognized in the period in which the crystallization event occurs as the fees relate to services performed that period.

Any crystallized performance fees for PSINTL and PSH earned during the year and outstanding at year-end are reported within performance fees receivable.

Cash and Cash Equivalents

The Partnership considers all highly liquid financial instruments with a maturity of three months or less at the time of purchase to be cash equivalents. As of March 31, 2026, cash and cash equivalents was comprised of $310,697 (December 31, 2025: $1,339,595) of cash held at a U.S. bank and $46,534,442 (December 31, 2025: $54,058,172) of cash equivalents held in two money market funds invested in U.S. Treasury obligations (JPMorgan 100% U.S. Treasury Securities Money Market Fund and UBS Select 100% US Treasury Preferred Fund Class T). Money market funds are carried at net asset value, which approximates fair value, and would be considered Level I if they were included in the fair value hierarchy. The interest earned on cash invested in money market funds is recorded in interest income.

Restricted Cash

The Partnership has provided various security deposits held by service providers in the normal course of business. Such security deposits are generally restricted until the termination of each service provider’s contract period.

Due from Affiliates

The Pershing Square Funds, partners, employees and other affiliates reimburse the Partnership from time to time for expenses the Partnership pays on their behalf. Reimbursements owed to the Partnership are reflected in due from affiliates. See Note 4 for further disclosure of transactions with related parties.

As of March 31, 2026, due from affiliates was primarily comprised of (i) PSGP’s capital withdrawal from PSLP of $5,660,559 that was not received as of the balance sheet date and (ii) a credit of $1,639,441 related to PTET (defined in Note 2 “Income Taxes”).

As of December 31, 2025, due from affiliates was primarily comprised of (i) PSGP’s capital withdrawal from PSLP of $11,800,000 that was not received as of the balance sheet date and (ii) the Variable Management Fee of $3,345,230 receivable from HHH.

As of March 31, 2026 and December 31, 2025, no allowance related to due from affiliates was deemed necessary.

Fair Value of Financial Instruments

The Partnership’s assets and liabilities that qualify as financial instruments under GAAP are generally recorded at fair value or at an amount where the carrying value approximates fair value due to the instrument’s short-term nature.

Investment in HHH

The Partnership’s investment in HHH is classified as an equity method investment as the Partnership is deemed to exert significant influence over HHH, given (i) the Partnership’s ability to vote based on its direct ownership and the Pershing Square Funds’ ownership of HHH and (ii) PSCM’s right to designate directors on the Board of Directors of HHH. The Partnership has elected the fair value option for this investment with changes in fair value recognized through profit and loss. The Partnership’s investment in HHH is a Level I investment in the fair value hierarchy as its shares are publicly traded and quoted prices are readily available.

As of March 31, 2026, the Partnership’s investment in HHH was valued at $569,340,000 (December 31, 2025: $717,930,000), which represented an ownership percentage of approximately 15.1% (December 31, 2025: 15.2%). For the three months ended March 31, 2026, the Partnership recorded an unrealized loss of $148,590,000 from its investment in HHH.

The summarized financial information of the Partnership’s equity method investment in HHH is as follows:

Summarized Financial Information - HHH	March 31, 2026		December 31, 2025
Statement of Financial Condition
Assets
Net investment in real estate	$	7,505,786,000	$	7,367,055,000
All other assets		3,742,329,000		3,272,406,000
Total assets	$	11,248,115,000	$	10,639,461,000
Liabilities and Equity
Mortgages, notes, and loans payable, net	$	5,791,296,000	$	5,109,828,000
All other liabilities		1,606,910,000		1,687,387,000
Total liabilities		7,398,206,000		6,797,215,000
Total equity		3,849,909,000		3,842,246,000
Total liabilities and equity	$	11,248,115,000	$	10,639,461,000

	Three months ended March 31,
	2026
Statement of Operations
Total revenues	$	235,917,000
Total expenses		(185,368,000	)
Total other income (loss)		127,000
Operating income (loss)		50,676,000
Net income (loss)		8,065,000
Net income (loss) attributable to common stockholders	$	8,226,000

Investment in PSLP

PSGP’s investment in PSLP is considered an equity method investment as PSCM is deemed to exert significant influence over PSLP as the fund’s investment manager. The Partnership has elected the fair value option for this investment. Fair value for PSGP’s investment in PSLP is determined using the net asset value of PSLP in accordance with the “practical expedient” as defined by GAAP.

As of March 31, 2026, PSGP had an investment of $54,669,802 (December 31, 2025: $79,288,239) in PSLP, which represented an ownership percentage of approximately 4.3% (December 31, 2025: 5.2%). For the three months ended March 31, 2026, PSGP recorded a loss of $10,943,780 (2025: gain of $93,128) from its investment in PSLP.

Partners in PSGP can withdraw all of their partnership interest each calendar quarter upon 45 days prior written notice, but are subject to (i) PSCM’s contractual or regulatory restrictions on trading, or “trading windows” whereby PSCM may be in possession of any material nonpublic information regarding one or more of PSLP’s portfolio companies and (ii) any other limitations on withdrawals as set forth in the general partner agreement.

Fixed Assets and Leasehold Improvements, Net of Accumulated Depreciation and Amortization

Fixed assets and leasehold improvements consist of leasehold improvements principally for the build-out of the Partnership’s office space, furniture and fixtures, office computers and equipment along with computer software.

Fixed assets and leasehold improvements are recorded at cost less accumulated depreciation and amortization. Depreciation of fixed assets is calculated using the straight-line method over a period of three to seven years. Leasehold improvements are amortized over the shorter of the expected useful life or the remaining term of the related lease agreement. Total depreciation and amortization expense of the Partnership for the three months ended March 31, 2026 was $579,236 (2025: $577,583). The Partnership evaluates fixed assets for impairment whenever events or changes in circumstances indicate that an asset’s carrying value may not be fully recovered. The Partnership has determined that there was no impairment to be recorded for its fixed assets.

The following table provides the gross balances for each class of fixed assets and total accumulated depreciation and amortization for all asset classes:

		March 31, 2026			December 31, 2025
Asset Class	Useful Life
Leasehold Improvements	15	$	28,395,531		$	28,395,531
Furniture and Fixtures	7		2,173,959			2,173,959
Office Computers and Equipment	5		1,559,296			1,528,371
Computer Software	3		461,305			478,725
Total Fixed Assets and Leasehold Improvements (gross)			32,590,091			32,576,586
Less: Accumulated Depreciation and Amortization			(18,172,097	)		(17,592,861	)
Total Fixed Assets and Leasehold Improvements (net)		$	14,417,994		$	14,983,725

Accounts Payable

Accounts payable is comprised of primarily general and administrative expenses as well as interest expense that were accrued but not paid as of period end. For more details on general and administrative expenses, refer to Note 5.

Income Taxes

Prior to the Conversion date, the Partnership is a partnership for U.S. tax purposes and is not subject to U.S. federal income taxes. Accordingly, no provision has been made for federal income taxes, as the partners are individually liable for taxes on their respective share of the Partnership's taxable income or loss.

The Partnership is subject to certain state and local taxes. For the three months ended March 31, 2026, the Partnership recorded $857,181 (2025: $1,794,349) of tax expense, which relates to the New York City Unincorporated Business Tax (“UBT”). As of March 31, 2026, no UBT expense remained payable (December 31, 2025: $16,494,887).

For the tax years ending December 31, 2026 and 2025, the Partnership and its parent entity PSPG both elected to be subject to the New York State Pass-Through Entity Tax (“NYS PTET”) and the New York City Pass-Through Entity Tax (“NYC PTET” and together with NYS PTET, “PTET”).

PTET grants eligible partners a tax credit on their individual New York State and New York City income tax returns. Any PTET owed is a joint liability of (i) the Partnership or PSPG and (ii) each partner. For the three months ended March 31, 2026, the Partnership and PSPG made PTET payments totaling $21,360,000 (2025: $29,300,979) on behalf of their partners. These PTET payments were recorded, as applicable, in profit-sharing partner compensation and/or capital distributions according to each partner’s participation in LTIP (defined below in “Long-Term Incentive Plan”). For Mr. Ackman, PTET payments were recorded as capital distributions.

As of March 31, 2026, there was no outstanding payable balance related to PTET. As of December 31, 2025, accrued PTET balances of $10,104,536 and $3,224,380 were recorded in distributions payable to partners and accrued compensation and benefits, respectively.

The Partnership is subject to the provisions of ASC 740, Income Taxes. This standard requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether it is “more-likely-than-not” to be sustained by the applicable tax authority. Uncertain tax positions in which the benefit to be realized does not meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. As of March 31, 2026, the Partnership did not accrue interest or penalties related to uncertain tax positions. The Partnership has evaluated its tax positions and does not believe there are any uncertain tax positions that would result in a material change to unrecognized tax benefits within twelve months of the reporting date. Generally, the Partnership’s tax returns for tax years 2022 and forward are open to examination by the respective taxing authorities.

Lessee arrangements

PSCM leases office space, other real estate and certain equipment under operating leases. In accordance with ASC 842, Leases (“ASC 842”), the Partnership determines if an arrangement is or contains a lease at inception date by evaluating whether the arrangement conveys the right to use an identified asset and whether the Partnership obtains substantially all of the economic benefits from and has the ability to direct the use of the asset.

Under ASC 842, the Partnership elected the practical expedient to not separate lease and non-lease components. The Partnership also elected to apply the short-term lease recognition exemption which eliminates the requirement to present in the Consolidated Statements of Financial Condition leases with a term of 12 months or less. These two practical expedients were elected for all classes of underlying assets.

For short-term leases, instead of recognizing a lease liability and right-of-use asset (“ROU asset”), the Partnership recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Partnership evaluates the lease term and the purchase option in the same manner as all other leases.

At the commencement date of a lease which does not qualify as a short-term lease, the Partnership recognizes a lease liability and an ROU asset representing the Partnership’s right to use the underlying asset over the lease term. The initial measurement of the lease liability is calculated on the basis of the present value of the remaining lease payments, and the ROU asset is measured on the basis of this liability, adjusted by prepaid and accrued rent, lease incentives and initial direct costs. Operating lease cost is recognized on a straight-line basis over the lease term, with the cost presented as a component of general and administrative expense. The Partnership does not have finance leases.

PSCM’s leases require other payments such as costs related to service components, real estate taxes, common area maintenance and insurance. These costs are generally variable in nature and based on the actual costs incurred and required by the lease. As the Partnership has elected to not separate lease and non-lease components for all classes of underlying assets, all variable costs associated with the leases are expensed in the period incurred and are recorded in general and administrative expense. PSCM’s lease agreements do not contain any material residual value guarantees or material restrictive financial covenants. For details on PSCM’s leases with related parties, refer to Note 4. Neither the Partnership nor PSCM has any leases that have not yet commenced that create significant rights and obligations for the lessee.

When determining the lease term, the Partnership does not include renewal options unless the renewals are deemed to be reasonably certain of being exercised at the lease commencement date.

ASC 842 requires that a lessee use the rate implicit in the lease when measuring the lease liability and ROU asset, unless that rate is not readily determinable. Alternatively, the Partnership is permitted to use its incremental borrowing rate (“IBR”) which is defined as the rate of interest that the Partnership would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term and in a similar economic environment. Since the rate implicit in the lease is not readily determinable, the Partnership uses its incremental borrowing rate when measuring its leases, both at lease commencement and when reassessment is required, such as upon modification. The IBR is calculated by considering the Partnership’s synthetic credit standing and existing line of credit, the impact of collateral and the term of the lease.

Offering Costs

Offering costs consist of fees related to underwriting, legal advice, regulatory filings, printing and other costs for services directly related to the PSUS IPO. PSUS offering costs have been deferred and are recorded in other assets. Refer to Note 5 for details on the treatment of PS Holdco’s offering costs in the current period.

Other Income (Expense)

Other income is primarily comprised of (i) a non-cash loss related to the derecognition of the deferred sublease incentive due to the termination of the related sublease and (ii) office space sublease income (earned prior to termination of the sublease) and the reimbursement of office services from NEOX Public Benefit LLC. Refer to Note 8 for further detail on each of these items.

Employee Benefit Plan

The Partnership has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. All employees and profit-sharing partners are eligible to participate in the savings plan (the “401(k) Plan”). The 401(k) Plan allows participants to invest in a variety of mutual funds across several fund families. The Partnership makes a safe harbor contribution in the amount of 3% of each participant’s eligible compensation, subject to certain Internal Revenue Code limitations. The safe harbor contribution is processed on a per payroll basis for employees and annually for profit-sharing partners, regardless of whether they elect to contribute to the 401(k) Plan. Safe harbor contributions are vested immediately. For the three months ended March 31, 2026, expenses related to the 401(k) Plan were $81,336 (2025: $56,783) and are included in employee compensation and benefits.

Employee Compensation and Benefits

Employee compensation and benefits reflects all compensation-related items not directly related to the profit-sharing arrangements and the long-term incentive plan discussed below, and includes salaries, benefits, payroll taxes and discretionary cash bonuses. Employee compensation and benefits also includes the cost of benefits paid to partners who participate in the profit-sharing arrangements and the long-term incentive plan. The Partnership generally recognizes 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 for employees who do not hold profits interests. Discretionary cash bonuses are dependent upon a variety of factors, including the performance of the Pershing Square Funds for the year.

Profit-Sharing Arrangements

Certain awards (the “Profits Interest Awards”) entitle profit-sharing partners to a portion of the net profits earned by PSGP, PSPG and PS CompCo, LLC, a Delaware limited liability company (“CompCo”). Refer to Note 4 “Variable Compensation Agreement” for more details. Profits Interest Awards do not represent a substantive class of equity under ASC 718, Compensation (“ASC 718”) and are accounted for as cash-based profit-sharing arrangements. As such, amounts distributed or allocated to profit-sharing partners are included in profit-sharing partner compensation in the Consolidated Statements of Operations.

Long-Term Incentive Plan

Awards under the Long-Term Incentive Plan (“LTIP” and the “LTIP Awards”) entitle certain profit-sharing partners (the “LTIP Partners”) to cash distributions of management fee-based and performance-based net profits pursuant to the terms of their respective agreements and granted them a reduced percentage of their Profits Interest Awards upon retirement under certain circumstances as described in the LTIP. Certain LTIP Partners’ LTIP Awards vested after 10 years of tenure as a profit-sharing partner. Each LTIP Partner holds LTIP Awards in PSGP, PSPG and CompCo in the same percentages.

The LTIP Awards are treated as a separate class of profits interests from the Profits Interest Awards. The LTIP Awards are accounted for based on their substance. Portions of the LTIP Awards where rights to distributions of profits are based fully on the discretion of Mr. Ackman, or any successor thereof, are in substance a profit-sharing arrangement and are therefore recorded within profit-sharing partner compensation. Other portions of the LTIP Awards, when fully vested, entitle LTIP Partners upon retirement to a distribution equal to the percentage outlined in each of their agreements in perpetuity (the “permanent profits-interests”) and represent a substantive class of equity. The fair value of such awards is recognized on a straight-line basis over a service period of up to 10 years. The amortization of these awards is included in profit-sharing partner compensation in the Consolidated Statements of Operations.

LTIP Partners are also entitled to a portion of the consideration related to a Terminal Value Event as defined in the LTIP, including, but not limited to, a sale or transfer of all or any portion of the Partnership’s equity interests, including through an initial public offering. The Partnership accounts for forfeitures of permanent profits-interests as they occur.

For the three months ended March 31, 2026 and 2025, the Partnership did not grant additional permanent profits-interests.

During the three months ended March 31, 2026, $185,407 (2025: $357,904) of permanent profits-interests that were granted in prior years vested, and no permanent profits-interests were forfeited. The Partnership expects to recognize compensation expense on its currently unvested permanent profits-interests of $567,551 over a weighted average period of 1 year.

For the three months ended March 31, 2025, the Partnership recognized profit-sharing compensation expense in an amount equal to the value of an LTIP Partner’s termination benefit that was granted during the period. The LTIP Partner was granted continued payment of non-permanent LTIP Awards for a period of time following the LTIP Partner’s separation from the Partnership. The Partnership calculated the value of the termination benefit as the present value of the future payments that were reasonably estimable under the LTIP Partner’s separation agreement.

The following table summarizes the components of profit-sharing partner compensation expense as well as the total distributions resulting from permanent profits-interests:

	Three months ended March 31,
	2026		2025
Profit-sharing partner compensation	$	11,581,112	$	15,090,320
Amortization of unvested grants of permanent profits-interests		185,407		357,904
Total profit-sharing partner compensation	$	11,766,519	$	15,448,224
LTIP permanent profits-interest distributions	$	6,340,744	$	6,736,421

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires entities with a single reportable segment to provide all disclosures in accordance with Topic 280 and amends current guidance for reportable segment disclosure requirements. This guidance is effective for public entities for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. The Partnership adopted this standard on December 31, 2024 on a retrospective basis, and, as a result, the Partnership included Note 9 to the Consolidated Financial Statements. Adoption of ASU 2023-07 did not have an impact in the Consolidated Statements of Financial Condition, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.

In December 2023, the FASB issued ASU 2023-09 amending ASC 740, Income Taxes, to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The new guidance requires all entities to disclose, on an annual basis, income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2025 for private companies and after December 15, 2024 for public companies, with early adoption permitted. ASU 2023-09 should be applied prospectively, but entities may apply it retrospectively. The Partnership is currently assessing its impact.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain expenses including employee compensation, depreciation and intangible asset amortization on an annual and interim basis. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Partnership is currently assessing the impact of ASU 2024-03.