2 POOR DECISION MAKING: INABILITY TO FORECAST DEMAND The actual hardware sales are incredibly predictable. It’s a beautiful business. ¹ ▪ Foley insisted demand would only ever increase “How [do] you envision managing, – Foley massively increased production capacity in 2020, meeting the incredible demand that building inventory you’re seeing now versus the risk of overbuilding [supply]…” – In February 2021, Foley boasted: “We've increased the [manufacturing] capacity by 6x, which is pretty herculean, but we're definitely not going to stop there. We bought Precor. John Foley’s Response We're going to be investing in U.S. manufacturing.”4 ▪ But then demand slowed. Foley noted (at the same “[T]hat’s a term that’s never come up February conference): “We're now making more bikes in the Peloton senior leadership and treads than we're selling”4 rooms or boardrooms…We see that we’re going to be able to market into – “One employee said warehouses resembled ‘jigsaw puzzles’ with a massive opportunity that we’re 2 employees trying to figure out where to stuff another bike.” going to need supply chain capacity ▪ Peloton has now been forced to moth-ball production² for years and years.”³ 1. Source: John Foley on CNBC. November 5, 2019. https://www.youtube.com/watch?v=jZO-IBmp39o 3. Mr. Foley responding to a question from a Goldman Sachs analyst on Q4 2020 Earnings Call. 28 2. Source: https://www.businessinsider.com/leaked-slides-show-peloton-planning-production-pause-2022-1. 4. Mr. Foley at Goldman Sachs Investor Conference, February 11, 2021.