Restructuring

9 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

On February 1, 2022, following the Company’s prior disclosure regarding market factors impacting the business, the Company’s Board of Directors approved a restructuring plan to realign the Company’s operational focus to support its multi-year growth, scale the business, and improve costs (the “Restructuring Plan”). The Restructuring Plan includes: (i) reducing the Company’s headcount; (ii) closing several assembly and manufacturing plants, including the completion and subsequent sale of the shell facility for the Company’s previously planned Peloton Output Park; (iii) closing and consolidating several distribution facilities, and (iv) shifting to third-party logistics providers in certain locations. The Company expects the Restructuring Plan to be substantially implemented by the end of fiscal 2024.

As a result of the Restructuring Plan, the Company incurred the following charges, of which Asset write-downs and write-offs are included within Impairment expense and loss on disposals in the condensed consolidated statements of operations and comprehensive (loss) income. The

remaining charges incurred due to the restructuring plan are included within Restructuring expense in the condensed consolidated statements of operations and comprehensive (loss) income:


	Three Months Ended March 31,		Nine Months Ended March 31,
	2022		2022
Cash restructuring charges:	(in millions)
Severance and other personnel costs	$	99.4	$	99.4
Professional fees and other related charges	14.3		14.3
Total cash charges	113.7		113.7

Non-cash charges:
Asset write-downs and write-offs	27.4		27.4
Stock-based compensation expense	44.9		44.9
Total non-cash charges	72.3		72.3

Total	$	186.0	$	186.0

In connection with the Restructuring Plan, the Company committed to the closures of certain warehouse and retail locations, the discontinuation of manufacturing in North America, and the wind down of certain software implementation and development projects. Due to the actions taken the Company tested certain fixed assets for recoverability by comparing the carrying value of the asset group to an estimate of the future undiscounted cash flows which was generally the liquidation value. Based on the results of the recoverability test, the Company determined that as of March 31, 2022, the undiscounted cash flows of the asset groups were below the carrying values, indicating impairment. The assets were written down to their estimated fair value, which was determined based on their expected liquidation value.

The following table presents a roll-forward of cash restructuring-related liabilities, which is included within Accounts payable and accrued expenses in the condensed consolidated balance sheets, as follows:


	Severance and other personnel costs		Professional fees and other related charges		Total
	(in millions)
Balance as of June 30, 2021	$	—	$	—	$	—
Charges	99.4		14.3		113.7
Cash payments	(73.3)		(14.3)		(87.6)
Balance as of March 31, 2022	$	26.1	$	—	$	26.1

In addition to the above charges, the Company incurred approximately $84.0 million of capital expenditures related to Peloton Output Park since project inception.