Pershing Square Holdings, Ltd. 2020 Annual Report Pershing Square Holdings, Ltd. 2020 Annual Report Table of Contents Company Overview . 1 Company Performance . 2 Chairman’s Statement . 3 Investment Manager’s Report . 8 Principal Risks and Uncertainties . 22 Directors . 27 Report of the Directors . 30 Directors’ Remuneration Report . 39 Corporate Governance Report . 41 Report of the Audit Committee . 48 Report of Independent Auditor . 53 Statement of Financial Position . 61 Statement of Comprehensive Income . 63 Statement of Changes in Net Assets Attributable to Management Shareholders . 64 Statement of Changes in Equity . 65 Statement of Cash Flows . 66 Notes to Financial Statements . 67 Supplemental U.S. GAAP Disclosures Condensed Schedule of Investments . .103 Financial Highlights . .105 Disclosures Certain Regulatory Disclosures . 106 Affirmation of the Commodity Pool Operator . 108 Endnotes and Disclaimers . 109 Pershing Square Holdings, Ltd. Annual Report 2020 Company Overview The Company Pershing Square Holdings, Ltd. (“PSH”, or the “Company”) (LN:PSH) (LN:PSHD) (NA:PSH) is an investment holding company structured as a closed-ended fund that makes concentrated investments in publicly traded, principally North American-domiciled, companies. PSH’s objective is to maximize its long-term compound annual rate of growth in intrinsic value per share. PSH has appointed Pershing Square Capital Management, L.P. (“PSCM,” the “Investment Manager” or “Pershing Square”), as its investment manager. The Investment Manager has responsibility, subject to the overall supervision of the Board of Directors, for the investment of PSH’s assets and liabilities in accordance with the investment policy of PSH set forth on pages 30-31 of this Annual Report (the “Investment Policy”). PSCM, a Delaware limited partnership, was founded by William A. Ackman on January 1, 2004. PSH was incorporated with limited liability under the laws of the Bailiwick of Guernsey on February 2, 2012. It commenced operations on December 31, 2012 as a registered open-ended investment scheme, and on October 2, 2014 converted into a registered closed-ended investment scheme. Public Shares of PSH commenced trading on Euronext Amsterdam N.V. on October 13, 2014. On May 2, 2017, PSH’s Public Shares were admitted to the Offi cial List of the UK Listing Authority and commenced trading on the Premium Segment of the Main Market of the London Stock Exchange (“LSE”). Pershing Square Holdings, Ltd. Annual Report 2020 1 Company Performance Pershing Square Holdings, Ltd. and Pershing Square, L.P. (“PSLP”) NAV Performance vs. the S&P 500 PSLP/PSH Net Data 1,500% Launch of PSH IPO of PSH 1,400% PSLPPSLP Net Net (20% Data Performance Fee)(1,2) Dec-31-12 Oct-01-14 1,412.8% 1,300% 1,288.4% 1,200% PSLP/PSHS&P 500 Net (20%/16% Performance Fee)* 1,100% S&P 500(3) 1,000% 900% 800% 700% 600% 500% 400% 399.2% 300% 200% 100% 0% -100% Dec-31-11 Dec-31-17 Jan-01-04Dec-31-04Dec-31-05Dec-31-06Dec-31-07Dec-31-08Dec-31-09Dec-31-10 Dec-31-12 Dec-31-13Dec-31-14Dec-31-15 Dec-31-16 Dec-31-18Dec-31-19Dec-31-20Mar-23-21 PSLP/PSH Net Return* PSLP Net Return(1,2) S&P 500(3) 2004 42.6 % 42.6 % 10.9 % 2005 39.9 % 39.9 % 4.9 % 2006 22.5 % 22.5 % 15.8 % 2007 22.0 % 22.0 % 5.5 % 2008 (13.0)%Pershing Square, L.P. (13.0)% (37.0)% 2009 40.6 % 40.6 % 26.5 % 2010 29.7 % 29.7 % 15.1 % 2011 (1.1)% (1.1)% 2.1 % 2012 13.3 % 13.3 % 16.0 % 2013 9.6 % 9.7 % 32.4 % 2014 40.4 % 36.9 % 13.7 % 2015 (20.5)% (16.2)% 1.4 % 2016 (13.5)% (9.6)% 11.9 % 2017 (4.0)%Pershing Square (1.6)% 21.8 % 2018 (0.7)%Holdings, Ltd. (1.2)% (4.4)% 2019 58.1 % 44.1 % 31.5 % 2020 70.2 % 56.6 % 18.4 % Year-to-date through March 23, 2021 5.9 % 4.9 % 4.5 % January 1, 2004–March 23, 2021(1,4) Cumulative (Since Inception) 1,412.8 % 1,288.4 % 399.2 % Compound Annual Return 17.1 % 16.5 % 9.8 % December 31, 2012–March 23, 2021(1,4) Cumulative (Since PSH Inception) 185.4 % 161.9 % 223.5 % Compound Annual Return 13.6 % 12.4 % 15.3 % * NAV return an investor would have earned if it invested in PSLP at its January 1, 2004 inception and converted to PSH at its launch on December 31, 2012. Also see endnote 1 on page 110. Past performance is not a guarantee of future results. All investments involve risk, including the loss of principal. Please see accompanying endnotes and important disclaimers on pages 110-112. Pershing Square Holdings, Ltd. Annual Report 2020 2 Chairman’s Statement INTRODUCTION When I wrote to you last year, we were mere months into what became a year that none of us will ever forget. COVID-19 has infected more than 100 million people around the world and millions have died. Our thoughts continue to be with all those who have lost family members and friends to the virus, or have suff ered great hardship due to the impact it has had on their daily lives. It may take years for certain aspects of our lives to return to the way they were before COVID-19, and many things we took for granted have been irrevocably changed. In 2020, both our portfolio companies and our Investment Manager faced rapidly changing conditions and challenges. They were forced to adapt and pivot in record time to protect their employees and preserve their businesses. You will read more about the actions of our portfolio companies in the Investment Manager’s Report. Our Investment Manager’s employees have been working remotely for over a year now. Fortunately, they have adapted exceptionally well to the change in circumstances, and the investment team has continued to work effi ciently and eff ectively with great support from the operational team. Amid such a challenging period of time, I am pleased to report that not only did the Investment Manager protect your investment in PSH last year, but it delivered exceptional returns, making 2020 the best year of performance since the inception of the Investment Manager’s strategy in 2004. In addition to successfully navigating the volatile fi nancial markets and tumultuous business conditions, the Investment Manager and the PSH Board were active on a number of fronts throughout the year. To highlight several: PSH issued two tranches of debt totaling $700 million, repurchased $286 million of PSH’s outstanding Public Shares, continued PSH’s dividend program, welcomed a new Board member, and gained entry to the FTSE 100 in December 2020. The Investment Manager, with oversight from the PSH Board, committed to a new investment by forming Pershing Square Tontine Holdings, Ltd. (“PSTH”). PSTH is a special purpose acquisition company, (or “SPAC”) and it listed on the New York Stock Exchange on July 22, 2020. PSTH is expected to combine with a private business in an initial business combination (or de-SPAC transaction) which will result in PSH owning a minority shareholding in a newly listed public company. I discuss these initiatives, among others, in detail below. INVESTMENT PERFORMANCE During the year ended December 31, 2020, PSH’s total Net Asset Value (“NAV”) return including dividends was 70.2%, ending the year at $45.46 per share.i PSH generated a total shareholder return of 84.8% as a result of the narrowing of the discount to NAV at which PSH shares trade.ii Over the same period, the S&P 500 increased 18.4%.iii PSH’s outperformance was driven by its purchase of index credit default swaps in February 2020, and the subsequent unwinding of those hedges. When we published our 2019 Annual Report in April 2020, I stated that the PSH Board appreciated the Investment Manager’s foresight in using the hedges to protect the portfolio from severe declines in the stock market in Q1 2020. Now that we can refl ect on the events of the full year of 2020, we also commend the Investment Manager’s actions in successfully identifying the optimal moment to reinvest the proceeds from the hedges as the markets recovered. The Investment Manager continues to engage with PSH’s portfolio companies through direct board representation in some situations, and less formal, private engagement in others. PSH’s portfolio companies have responded well to the challenges of the pandemic, and the Investment Manager believes that they will continue to recover and thrive over the long term, allowing for signifi cant further share price appreciation. The outlook for PSH’s portfolio companies is described further in the Investment Manager’s Report. Pershing Square Holdings, Ltd. Annual Report 2020 3 INVESTMENT MANAGER The Board has delegated the task of managing the Company’s assets to the Investment Manager as set out in the Investment Management Agreement (the “IMA”) entered into by PSH and Pershing Square Capital Management, L.P. at the inception of PSH. Although the Board does not make individual investment decisions, the Board is ultimately accountable for oversight of the Investment Manager. In 2020, the Board adopted terms of reference describing its principal responsibilities, which are available on the PSH website. The Investment Manager is a fundamental value investor that utilizes a range of activist strategies to unlock long-term value for shareholders, and seeks to invest in excellent businesses with opportunities for improvement. These businesses tend to be large- cap companies that generate relatively predictable and growing free-cash-fl ows, with formidable barriers to entry and a compelling value proposition.