What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-02-24 compared with 2021-02-26 · 441 added, 386 removed, 504 unchanged (62% of the section changed)

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This led to a 44.6% decrease in wholesale shipments of new RVs for the three month period of March, April, and May 2020, according to the RV Industry Association’s survey of manufacturers.

The Company had taken steps to add new private label lines, expand its relationships with smaller RV manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

The Company had taken steps to add new private label lines, expand its relationships with smaller RV manufacturers, and acquire used inventory to help manage risks in its supply chain.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, the Company saw significant sequential declines in its overall customer traffic levels and its overall revenues from the mid-March to mid-to-late April 2020 timeframe.

In the latter part of April 2020, the Company began to see significant improvements in its online web traffic levels and number of electronic leads, and in early May 2020, the Company began to see improvements in its overall revenue levels.

As the stay-at-home restrictions began to ease across certain areas of the country, the Company experienced significant acceleration in its in-store and online traffic, lead generation, and revenue trends in May continuing throughout the remainder of 2020 and early indications appear to show favorable trends continuing into 2021.

On September 15, 2020 we announced a number of initiatives heading into 2021, including plans to launch a peer-to-peer RV rental service, and a mobile RV technician marketplace, as well as plans to acquire RV dealerships.

These initiatives continue to keep RVs as the focal point while expanding our value proposition to the customer and, in particular, to our 2.1 million active Good Sam members.

As the stay-at-home restrictions began to ease across certain areas of the country, the Company experienced significant acceleration in its in-store and online traffic, lead generation, and revenue trends in May 2020 continuing into the quarter ended June 30, 2021 and demand in new and used vehicles remained elevated through the remainder of 2021 and into the beginning of 2022.

Wholesale shipments of new RVs in the year ended December 31, 2021 were up 39.5% compared to the prior year.

We have announced a number of initiatives heading into 2022 through press releases, earnings calls, and our investor day, including an online RV sales process, service bay expansion, the addition of design centers to our existing store footprint, and continued expansion through dealership acquisitions.

We have also announced a number of land acquisitions in anticipation of constructing new stores.

In addition, in 2022, we plan to expand our dealerships to include a number of preowned superstores (“Preowned Mega-Centers”) focusing on used RVs, service and restoration, and our finance and insurance offerings.

See “Liquidity and Capital Resources” of this Form 10-K for a discussion of the expected cash requirements in 2022 for new dealership locations.

We expect the cash requirements of the other announced initiatives to be in excess of $25.0 million.

Good Sam Rentals, which is a peer-to-peer RV rental marketplace that can be accessed at RVRentals.com, was launched during the third quarter of 2021 and the financial results and cash needs to date were immaterial.

Our previously announced mobile RV technician marketplace is expected to launch in early 2022, with nominal further investment.

We operate two reportable segments:

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We identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions.

The Company previously had three reportable segments:

(i) Consumer Services and Plans;

(ii) Dealership, and (iii) Retail.

In the first quarter of 2019, we realigned the structure of our internal organization in a manner that caused the composition of our reportable segments to change.

Our reportable segment financial information has been recast to reflect the updated reportable segment structure for all periods presented.

See Note 1 — Summary of Significant Accounting Policies — Description of the Business and Note 22 — Segment Information to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information regarding our reportable segments.

For the years ended December 31, 2020, 2019, and 2018, we generated 3.3%, 3.7%, and 3.6% of our total revenue and 6.4%, 7.9%, and 7.1% of our total gross profit from our Good Sam Services and Plans segment, respectively.

For the years ended December 31, 2020, 2019, and 2018, we generated 96.7%, 96.3%, and 96.4% of our total revenue and 93.6%, 92.1%, and 92.9% of our total gross profit from our RV and Outdoor Retail segment, respectively.

As discussed in Note 1 ─ Summary of Significant Accounting Policies ─ COVID-19 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, the COVID-19 pandemic adversely impacted our business from mid-March through much of April 2020, but shifted to a favorable impact beginning primarily in May 2020.

In response to the pandemic, we have implemented preparedness plans to keep our employees and customers safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home orders for a significant portion of our workforce.

The majority of our retail locations have continued to operate as essential businesses and consequently have remained open to serve our customers through the pandemic, and we continue to operate our e-commerce business.

As of December 31, 2020, we have temporarily closed two of our dealerships as a result of COVID-19 and branding changes.

These two dealerships are expected to reopen in 2021.

We temporarily reduced salaries and hours throughout the Company, including for our executive officers and implemented headcount and other cost reductions primarily from the middle of March 2020 through the middle of May 2020, in an attempt to better align expenses with the initially expected reduced sales resulting from the impact of COVID-19 on our business.

Most of these temporary salary reductions ended in May 2020 as the adverse impacts of the pandemic began to decline and we increased hours for certain employees and reinstated many positions from the initial headcount reductions as the demand for our products increased.

The following table presents percentages of total revenue and total gross profit for our two reportable segments:

Year Ended December 31,

As percentage of total revenue:

Good Sam Services and Plans

RV and Outdoor Retail

As percentage of total gross profit (1) :

Good Sam Services and Plans

RV and Outdoor Retail

(1) Gross profit is presented exclusive of depreciation and amortization, which is presented separately in operating expenses.

In response to the pandemic, we implemented preparedness plans to keep our employees and customers safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implemented additional cleaning and sanitization routines, and work-from-home orders for a significant portion of our workforce.

The majority of our retail locations continued to operate as essential businesses and consequently remained open to serve our customers through the pandemic, and we continued to operate our e-commerce business.

In addition to reducing marketing expenses, we temporarily reduced salaries and hours throughout the Company, including for our executive officers, and implemented headcount and other cost reductions primarily from the middle of March 2020 through the middle of May 2020.

Most of these temporary salary and hourly reductions ended in May 2020 as the adverse economic impacts of the pandemic began to decline.

In July 2021, we began transitioning many of our employees from work-from-home schedules to a return to our offices.

However, with the increase in COVID-19 cases in the U.S.

as a result of the Omicron variant in late 2021, many employees have reverted back to work from home schedules.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, we saw significant sequential declines in overall customer traffic levels and overall revenues from the mid-March to mid-to-late April 2020 timeframe.

In the latter part of April 2020, we began to see a significant improvement in online web traffic levels, and in early May 2020, we began to see improvements in overall revenue levels.

As the stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic and revenue trends in May and continuing throughout the remainder of 2020 and early indications appear to show favorable trends continuing into 2021.

We believe that the demand will remain elevated as consumers continue to view RVs as an opportunity to work and school remotely.

As the stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic and revenue trends in May 2020 continuing into the quarter ended June 30, 2021 and demand in new and used vehicles remained elevated through the remainder of 2021 and into the beginning of 2022.

Demand and interest in new and used vehicles continued to outpace vehicle supply during much of the year ended December 31, 2021.

In the last four months of 2021, we were able to procure more new vehicles than were sold during that period, which improved inventory levels at December 31, 2021.

We have been implementing marketing and operational plans to optimize our leadership position through the pandemic, regardless of the ultimate timing and slope of the recovery curve.

We have adapted our sales practices to accommodate customers’ safety concerns in this COVID-19 environment, such as offering virtual tours of RVs and providing home delivery options.

As a consequence of COVID-19, we held fewer consumer shows and events during 2020 than in 2019 and we debuted our first virtual show in 2020.

If stay-at-home and shelter-in-place restrictions are put back into place or as other modes of transportation and vacation options recover from the impact of COVID-19, the increased demand for our products may not be sustained.

We are unable to accurately quantify the future impact that COVID-19 may have on our business, results of operations and liquidity due to numerous uncertainties, including the severity of the disease, the duration of the pandemic, including additional waves of infection and the effectiveness and availability of vaccines, the economic impact of the pandemic, actions that may be taken by governmental authorities and other as yet unanticipated consequences.

Historically, most of our consumer shows and events took place during the first quarter.

As a consequence of COVID-19, we held one in-person consumer show in 2021, held fewer in-person consumer shows and events during 2020 than in 2019 and we have held several of our virtual RV show events in 2020 and 2021.

As other modes of transportation and vacation options continue to recover from the impact of COVID-19, the increased demand for our products may not be sustained.

We are unable to accurately quantify the future impact that COVID-19 may have on our business, results of operations and liquidity due to numerous uncertainties, including the duration of the pandemic;

additional waves of infection or the spread of new variants;

the effectiveness of vaccines and therapies against COVID-19 variants and the willingness of a sufficient proportion of the public to receive the vaccine;

the economic impact of the pandemic;

actions that may be taken by governmental authorities;

and other as yet unanticipated consequences.

In addition, there could be weakening demand for items that are not basic goods, and our supply chain could be disrupted in the future as a result of the outbreak, such as if Thor Industries, Inc.

were to again close its North American production facilities as it did from late March to early May 2020.

Any of these events could have a materially adverse impact on our operating results.

Any of these events could have a material adverse impact on our operating results.

Cybersecurity Incident

We rely on the integrity, security and successful functioning of our information technology systems and network infrastructure (collectively, “IT Systems”) across our operations.

In February 2022, we announced that we were experiencing a cybersecurity incident that resulted in the encryption of certain IT Systems and theft of certain data and information (the “Cybersecurity Incident”).

The Cybersecurity Incident resulted in our temporary inability to access certain of our IT Systems, caused by the disabling of some of our IT Systems by the threat actor and our temporarily taking certain other IT Systems offline as a precautionary measure.

We engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation, and are working on restoring and ensuring the security of our IT Systems.

We are also coordinating with law enforcement.

We are in the early stages of this incident and have not determined the full scope or content of our lost or stolen data.

We have and expect to continue to incur incremental costs for the investigation, containment and remediation of the Cybersecurity Incident, including legal and other professional fees, and investments to enhance the security of our IT Systems.

The containment, investigation, remediation, legal and other costs may exceed our insurance policy limits or may not be covered by insurance at all.

Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, regulatory enforcement action, and litigation that could result in financial judgments or the payment of settlement amounts and disputes with insurance carriers concerning coverage.

We have not yet determined if the Cybersecurity Incident will cause future disruptions to our business or how long such disruption could last.

We have also not yet been able to estimate the incremental costs resulting from the Cybersecurity Incident, which are expected to adversely impact our future financial results.

Based on the information currently known, we do not believe that the Cybersecurity Incident will have a material impact on our business, results of operations or financial condition, but no assurances can be given as we continue to assess the full impact from the Cybersecurity Incident, including costs, expenses and insurance coverage.

Key Performance Indicators

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For the years ended December 31, 2021, 2020 and 2019 our aggregate same store revenue was $5.8 billion, $4.5 billion, and $3.7 billion, respectively.

With same store revenue driven by the number of transactions and the average transaction price, changes in our mix of new vehicle sales has and will likely continue to negatively impact our new vehicle same store revenue.

With same store revenue driven by the number of transactions and the average transaction price, changes in our mix of new vehicle sales has in the past negatively impacted, and in the future is likely to negatively impact, our new vehicle same store revenue.

Over the past several years, we have seen a shift in our overall mix of new RV sales towards travel trailer vehicles, which tend to carry lower average selling prices than other classes of new RV vehicles.

From 2015 to 2020, new vehicle travel trailer units have increased from 62% to 74% of total new vehicle unit sales and the average selling price of a new vehicle unit has declined from $39,853 to $36,277.

The increased popularity of new travel trailer vehicles and the lower price points of these units compared to other new vehicle classes such as motorhomes and fifth wheels could continue to lower our average selling price of a new vehicle unit and impact our same store revenue.

From 2015 to 2021, total new vehicle travel trailer units have increased from 62% to 72% of total new vehicle unit sales and from 2015 to 2020 our average selling price of a new vehicle unit had decreased from $39,853 to $36,277.

However, over the past twelve months due to lower industry supply of travel trailers and motorhomes, both average cost and average sales price have increased.

Should the supply chain correct itself over the next twelve months, average sales price may again decline and impact our same store revenue.

Gross Profit and Gross Margins .

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We believe the overall growth of our RV and Outdoor Retail segments will allow us to continue to drive growth in gross profit due to our ability to cross sell our Good Sam Services and Plans to our increasing Active Customer base.

Gross margin in our RV and Outdoor Retail segment was negatively impacted in 2018 and 2017 by the opening of Gander Outdoors locations and in 2019 by the 2019 Strategic Shift.

Gross margin in 2019 was negatively impacted by the 2019 Strategic Shift.

Gross margin in our RV and Outdoor Retail segment was positively impacted in 2020 and 2021 by increased demand for vehicles and reduced supply leading to higher averages prices per unit.

Adjusted EBITDA and Adjusted EBITDA Margin.

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In late 2019, the demand for new RVs across the overall RV industry began improving.

Wholesale shipments of new RVs increased 13.2% in the first two months of 2020 according to the RV Industry Association’s survey of manufacturers but then there was a six to eight week shutdown by RV manufacturers last spring which resulted in an 18.7% decrease in wholesale shipments for the first half of 2020.

Wholesale shipments of RVs for the second half of 2020 increased 34.2% over the comparable period in 2019.

For the year ended December 31, 2020 total RV shipments increased 6.0% versus the comparable period in 2019, with the travel trailer group showing the largest increase.

Wholesale shipments of new RVs increased 13.2% in the first two months of 2020 according to the RV Industry Association’s survey of manufacturers.

With the COVID-19 crisis causing many state and local governments to issue “stay-at-home” and “shelter-in-place” restrictions in mid-to-late March, sales and traffic levels across the RV industry declined significantly in April 2020.

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This led to a 44.6% decrease in wholesale shipments of new RVs for the three month period of March, April, and May 2020, according to the RV Industry Association’s survey of manufacturers.

Longer term, however, we believe the increase in the number of light-weight towable RV models offered by the manufacturers, the increase in the number of pickup trucks and sport utility vehicles in operation, the ease of towing, the affordability of many of the light-weight RVs, the savings RVs offer on a variety of vacation costs, an increase in the pool of potential RV customers due to an aging baby boomer and millennial demographic, and the increased RV ownership among younger consumers are positive long-term secular trends driving the growth of the RV industry and the installed base of RV owners.

In addition, we believe the growth in the number of U.S.

camping households bodes well for the long-term growth of the RV industry.

The 2020 North American Camping Report estimated that the total number of camping households in the U.S.

has increased by more than 9.7 million over the past six years to 82 million.

Campers are increasing the amount of time they camp each year, with the number of campers who camp three times or more each year increasing by 82% since 2014.

Over the past six years, an increasing number of campers have said that they use an RV as their primary camping accommodation.

From 2014 to 2019, the number of campers using an RV to camp increased from 21% to an estimated 27%.

Finally, the camping and RV industry are expected to benefit from Baby Boomers reaching retirement age and Generation X and Millennial consumers reaching their prime camping age, which is generally considered between the ages of 30 and 50.

According to U.

Census Bureau data in the 2019 American Community Survey 1-Year Estimates, the population for the ages of 20 and 34 were estimated at 67 million individuals and the population between the ages of 50 and 69 were estimated at 80 million individuals in the United States.

The RV industry posted record shipments in both the third and fourth quarters of 2020, according to the RV Industry Association.

Wholesale shipments of RVs for the second half of 2020 increased 34.2% over the comparable period in 2019.

For the year ended December 31, 2020, total RV shipments increased 6.0% versus the comparable period in 2019, with the travel trailer group showing the largest increase.

Wholesale shipments for 2021 were 600,240 units, a new record for RV shipments for any year.

Shipments for the year ended December 31, 2021 increased 39.5% over the year ended December 31, 2020 and surpassed 2017, the previous record year, by 19.0%.

Thor Industries, our largest supplier of RVs, disclosed in their Form 10-Q for the three months ended October 31, 2021 filed with the Securities and Exchange Commission on December 8, 2021 that their North American RV order backlog had increased substantially, and also disclosed that they had experienced supply constraints and shortages of various RV component parts as a result of the current market conditions and the COVID-19 pandemic, which they attempt to minimize, when possible, by identifying alternate suppliers.

These potential supply constraints are not unique to Thor Industries as suppliers in the RV industry attempt to meet the high demand for RV products combined with shipping delays, as described above, in the midst of the COVID-19 pandemic, which has created a shortage of RV new unit inventory.

In light of this shortage, as discussed above, we have taken steps to add new private label lines, expand our relationships with smaller RV manufacturers, and increased our focus on acquiring used inventory to help manage risks in our supply chain.

Strategic Shift

In 2019, we made a strategic decision to refocus our business around our core RV competencies.

In connection with the 2019 Strategic Shift, we recorded restructuring charges of $27.7 million in the third quarter of 2019 and $19.5 million in the fourth quarter of 2019.

In total, we expect to incur costs relating to one-time employee termination benefits of $1.2 million, all of which has been incurred through December 31, 2020, lease termination costs of between $18.0 million and $32.0 million, incremental inventory reserve charges of $42.4 million all of which has been incurred through December 31, 2020, and other associated costs of between $28.0 million and $35.0 million.

In connection with the 2019 Strategic Shift, we recorded restructuring charges of $47.2 million in 2019, $17.6 million in 2020 and $25.7 million in 2021, excluding related lease termination costs.

In total, we expect to incur costs relating to one-time employee termination benefits of $1.2 million, all of which had been incurred by December 31, 2020, lease termination costs of between $18.0 million and $34.0 million, incremental inventory reserve charges of $57.4 million, all of which has been incurred through December 31, 2021, and other associated costs of between $35.0 million and $42.0 million.

Through December 31, 2019, we incurred $21.2 million of such other associated costs primarily representing labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift.

The additional amount of $6.8 million to $13.8 million represents similar costs that may be incurred in the year ending December 31, 2021 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC No.

842, Leases (“ASC 842”) prior to lease termination.

We intend to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases.

Lease costs may continue to be incurred after December 31, 2020 on these leases if we are unable to terminate the leases under acceptable terms or offset the lease costs through sublease arrangements.

The foregoing lease termination cost estimate represents the expected cash payments to terminate certain leases, but does not include the gain or loss from derecognition of the related operating lease assets and liabilities, which is dependent on the particular leases that will be terminated.

During the year ended December 31, 2021, we completed our analysis of our retail product offerings that are not RV related as part of the 2019 Strategic Shift.

The information available at the inception of the 2019 Strategic Shift relating to these product categories was incomplete based on the relative immaturity of the locations offering these products and was further delayed by the impact of COVID-19 on consumer buying behavior (see “COVID-19” discussion in this Form 10-K).

During the year ended December 31, 2021, we recorded $15.0 million of incremental reserve charges relating to product categories that are not RV related.

The Company does not expect to close additional locations or incur further one-time termination benefits or incremental reserve charges in connection with the 2019 Strategic Shift.

The remaining potential ongoing charges under the 2019 Strategic Shift relate to lease termination costs and other associated costs relating to the leases of previously closed locations under the 2019 Strategic Shift.

The process of identifying subtenants and negotiating lease terminations has been delayed in part due to the ongoing COVID-19 pandemic and is expected to continue.

The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals.

See Note 5 — Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

The following table details the costs incurred associated with the 2019 Strategic Shift (in thousands):

December 31, 2020

December 31, 2019

Year Ended December 31,

Restructuring costs:

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Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift.

For the year ended December 31, 2020, costs of approximately $0.4 million were included in costs applicable to revenue – products, service and other, and $16.4 million were included in selling, general, and administrative expenses in the consolidated statements of operations.

For the year ended December 31, 2021, 2020 and 2019, costs of approximately $0 million, $0.4 million and $0.6 million, respectively, were included in costs applicable to revenue – products, service and other, and $10.7 million, $16.4 million and $3.7 million, respectively, were included in selling, general, and administrative expenses in the consolidated statements of operations.

Our Corporate Structure Impact on Income Taxes

Our corporate structure is commonly referred to as an “Up-C” structure and typically results in a different relationship between income (loss) before income taxes and income tax expense than would be experienced by most public companies with a more traditional corporate structure.

More traditional structures are typically comprised predominately of Subchapter C corporations and/or lacking significant non-controlling interests with holdings through limited liability companies or partnerships.

Typically, most of our income tax expense is recorded at the CWH level, our public holding company, based on its allocation of taxable income from CWGS, LLC.

More specifically, as discussed in Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, CWH is organized as a Subchapter C corporation and, as of December 31, 2021, is a 51.2% owner of CWGS, LLC (see Note 18 — Stockholders’ Equity and Note 19 — Non-Controlling Interests to our consolidated financial statements included in Part II, Item 8 of this Form 10-K).

CWGS, LLC is organized as a limited liability company and treated as a partnership for U.S.

federal and most applicable state and local income tax purposes and, as such is generally not subject to any U.S.

federal entity-level income taxes (“Pass-Through”), with the exception of Americas Road and Travel Club, Inc., Camping World, Inc.

(“CW”), and FreedomRoads RV, Inc.

and their wholly-owned subsidiaries, which are Subchapter C corporations (“C-Corp”) embedded within the CWGS, LLC structure.

CWH receives an allocation of its share of the net income (loss) of CWGS, LLC based on CWH’s weighted-average ownership of CWGS, LLC for the period.

CWH recognizes income tax expense on its pre-tax income including its portion of this income allocation from CWGS, LLC primarily relating to Pass-Through entities.

The income tax relating to the net income (loss) of CWGS, LLC allocated to CWH that relates to separately taxed C-Corp entities is recorded at CWGS, LLC.

No income tax expense is recognized by the Company for the portion of net income (loss) of CWGS, LLC allocated to non-controlling interest other than income tax expense recorded by CWGS, LLC.

Rather, tax distributions are paid to the non-controlling interest holders, which are recorded as distributions to holders of LLC common units in the consolidated statements of cash flows.

CWH is subject to U.S.

federal, state and local income taxes with respect to its allocable share of any taxable income of CWGS, LLC and is taxed at the prevailing corporate tax rates.

For the years ended December 31, 2021, 2020 and 2019, the Company used effective income tax rate assumptions between 25.0% and 25.5%, for income adjustments applicable to CWH when calculating the adjusted net income (loss) attributable to Camping World Holdings, Inc.

— basic and diluted (see “Non-GAAP Financial Measures” in Part II, Item 7 of this Form 10-K).

CWGS, LLC may be liable for various other state and local taxes.

The following table presents the allocation of CWGS, LLC’s net income (loss) to CWH between C-Corp and Pass-Through, the allocation of CWGS, LLC’s net income (loss) to non-controlling interests, income tax expense recognized by CWH, and other items:

Year Ended December 31,

($ in thousands)

C-Corp portion of CWGS, LLC net loss allocated to CWH

Pass-Through portion of CWGS, LLC net income allocated to CWH

CWGS, LLC net income (loss) allocated to CWH

CWGS, LLC net income (loss) allocated to noncontrolling interests

CWGS, LLC net income (loss)

Tax Receivable Agreement liability adjustment

Income tax expense recorded by CWH

Other incremental CWH net income

Net income (loss)

The following table presents further information on income tax expense:

Year Ended December 31,

($ in thousands)

Income tax expense recorded by CWH

Income tax benefit (expense) recorded by CWGS, LLC

Income tax expense

Results of Operations

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Selling, general and administrative expenses

Debt restructure expense

Depreciation and amortization

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Lease termination

Loss on disposal of assets

(Gain) loss on sale or disposal of assets

Total operating expenses

Income from operations

Other income (expense):

Other expense:

Floor plan interest expense

Other interest expense, net

Loss on debt restructure

Tax Receivable Agreement liability adjustment

Total other income (expense)

Income (loss) before income taxes

Other expense, net

Total other expense

Income before income taxes

Income tax expense

Net income (loss)

net (income) loss attributable to non-controlling interests

Net income (loss) attributable to Camping World Holdings, Inc.

net income attributable to non-controlling interests

Net income attributable to Camping World Holdings, Inc.

nm- not meaningful

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Good Sam Club members

Service bays (5)

Finance and insurance gross profit as a % of total vehicle revenue

Same store locations

(1) Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.

(2) Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail unit revenue.

(2) Inventory turnover calculated as vehicle costs applicable to revenue divided by the average of beginning and ending vehicle inventory.

(3) Inventory turnover calculated as vehicle costs applicable to revenue over the last twelve months divided by the average quarterly ending vehicle inventory over the last twelve months.

(4) An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.

Total revenue was $5.4 billion for 2020, an increase of $554.6 million, or 11.3%, from $4.9 billion for 2019.

The increase in total revenue was driven by a $553.1 million, or 11.7%, increase in RV and Outdoor Retail revenue, and a $1.4 million, or 0.8%, increase in Good Sam Services and Plans revenue.

Total gross profit was $1.7 billion for 2020, an increase of $415.1 million, or 32.2%, from $1.3 billion for 2019.

The increase in total gross profit was driven by a $408.5 million, or 34.4%, increase in RV and Outdoor Retail gross profit, and a $6.6 million, or 6.5%, increase in Good Sam Services and Plans gross profit.

Income from operations was $476.2 million for 2020, an increase of $467.4 million from $8.7 million for 2019.

The increase in income from operations was primarily driven by a $415.1 million increase in gross profit, a $53.9 million decrease in long-lived asset impairment, a decrease of approximately $10.1 million in loss on disposal of assets, and a decrease of approximately $7.9 million in depreciation and amortization, partially offset by an increase of $14.4 million in selling, general and administrative expenses, and a $5.2 million increase in lease termination expense.

Total other expenses were $74.2 million for 2020, a decrease of $25.2 million, or 25.4% from $99.5 billion for 2019.

The decrease in other expenses was driven by a $20.4 million decrease in floor plan interest expense, and a $14.7 million decrease in other interest expense, partially offset by a $9.9 million favorable adjustment in Tax Receivable Agreement Liability in 2019, which did not reoccur in 2020.

As a result of the above factors, income before income taxes was $402.0 million for 2020 compared to loss before income taxes of $90.7 million for 2019.

(5) A service bay is a fully-constructed bay dedicated to service, installation, and collision offerings.

Total revenue increased 26.9% or $1.5 billion, to $6.9 billion for 2021 from $5.4 billion for 2020.

The increase in total revenue was driven by a $1.5 billion, or 27.9%, increase in RV and Outdoor Retail revenue, partially offset by a $0.3 million, or 0.1%, decrease in Good Sam Services and Plans revenue.

Total gross profit increased 44.3%, or $753.8 million, to $2.5 billion for 2021 from $1.7 billion for 2020.

The increase in total gross profit was driven by a $754.0 million, or 47.3%, increase in RV and Outdoor Retail gross profit, and a $0.2 million, or 0.2%, decrease in Good Sam Services and Plans gross profit.

Income from operations increased 67.9%, or $323.3 million, to $799.5 million for 2021, from $476.2 million income from operations for 2020.

The increase was primarily driven by a $753.8 million increase in gross profit, a $9.3 million decrease in long-lived asset impairment, a $2.3 million decrease in lease termination expense, and a $1.9 million decrease in loss on assets sales, partially offset by a $417.5 million increase in selling, general and administrative expenses, a $14.4 million increase in depreciation and amortization, and a $12.1 million increase in debt restructure expense.

Total other expense decreased 12.0%, or $8.9 million, to $65.3 million for 2021, from $74.2 million for 2020.

The decrease in other expense was primarily driven by a $7.7 million decrease in other interest expense and a $5.6 million decrease in floor plan interest expense, partially offset by a $3.0 million increase in Tax Receivable Agreement liability, a $1.4 million increase in loss on debt restructure, and $0.1 million of other expense.

As a result of the above factors, income before income taxes was $734.2 million for 2021 compared to a $402.0 million income before income taxes for 2020.

Income tax expense was $92.1 million for 2021, an increase of $34.4 million from $57.7 million for 2020.

As a result, net income was $344.2 million for 2020 compared to net loss of $120.3 million for 2019.

As a result, net income was $642.1 million for 2021 compared to net income of $344.2 million for 2020.

Good Sam Services and Plans

Good Sam Services and Plans revenue was $181.0 million for 2020, an increase of $1.4 million, or 0.8%, from $179.5 million for 2019.

The $1.4 million increase was primarily attributable to $2.4 million from increased contracts in force from our roadside assistance programs, $1.8 million from increased contracts in force for our extended vehicle warranty programs, $1.6 million from increased contracts in force for our vehicle insurance products, and $1.1 million from increased RV financing loan volume, partially offset by a $2.4 million decrease from 13 fewer consumer shows, and decreases in advertising revenue of $1.4 million from the magazine group and $1.7 million for the annual directory.

Good Sam Services and Plans gross profit was $108.0 million for 2020, an increase of $6.6 million, or 6.5%, from $101.5 million for 2019.

The increase in gross profit was primarily attributable to $4.2 million from increased policies in force and reduced marketing expenses for our extended vehicle programs, $3.2 million of increased policies in force and reduced program expenses in our roadside assistance programs, and $1.2 million from increased loan volume for our RV financing, partially offset by $1.1 million of reduced gross profit from reduced consumer shows, $0.8 million from the annual directory and $0.1 million from other services and plans.

Good Sam Services and Plans revenue decreased 0.1%, or $0.3 million, to $180.7 million in 2021, from $181.0 million for 2020.

The decrease was primarily attributable to a $5.7 million decrease due to only one in-person consumer show held in 2021 due to COVID-19 versus 24 shows held in the first quarter of 2020, a $4.8 million decrease primarily from the elimination of low margin extended warranty insurance programs, a $1.4 million decrease from reduced magazine ad sales as a result of combining two magazines into one, and a $0.4 million decrease from reduced ad sales in the annual directory, partially offset by a $6.9 million increase from roadside assistance programs primarily resulting from increased contracts in force, a $3.1 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force, and a $2.0 million increase from Good Sam insurance programs primarily resulting from increased contracts in force.

Good Sam Services and Plans gross profit decreased 0.2%, or $0.2 million, to $107.8 million in 2021, from $108.0 million for 2020, and gross margin remained unchanged at 59.7% for both periods.

The decrease in gross profit was primarily attributable to a $2.9 million decrease in contribution from fewer in-person consumer shows being held during the 2021 period due to COVID-19, a $1.2 million increase in overhead and marketing expenses, a $1.1 million reduction in contribution from the annual directory, a $1.0 million reduction from the magazine group, and a $0.2 million reduction from other services and plans, partially offset by a $3.2 million increase in contribution from the Good Sam TravelAssist programs, a $2.2 million increase from the Good Sam insurance programs, and an $0.8 million increase from the roadside assistance programs.

remained unchanged at 59.7% for both 2021 and 2020 reflecting increased revenue and higher gross margin from the Good Sam TravelAssist and Good Sam insurance products, partially offset by reduced gross margin for the roadside assistance programs and consumer shows.

RV and Outdoor Retail:

New vehicle revenue was $2.8 billion for 2020, an increase of $453.0 million, or 19.1%, from $2.4 billion for 2019.

The increase was primarily due to a 17.7% increase in vehicle units sold and a 1.2% increase in

average selling price per vehicle, driven by increases in nearly all product types.

On a same store basis, new vehicle revenue increased 15.4% to $2.6 billion in 2020 from $2.2 billion in 2019.

New vehicle gross profit increased 69.8%, or $206.7 million, to $502.8 million for 2020 from $296.1 million for 2019.

The increase was primarily due to a 44.3% increase in average gross profit per vehicle sold and by a 17.7% increase in vehicle units sold.

Gross margin increased 532 basis points to 17.8% in 2020 from 12.5% in 2019.

The increase was primarily due to higher towable and motorized gross margins resulting from lower supply from manufacturers and outsized demand from consumers turning to RVing as a vacation alternative.

New vehicle revenue increased 16.9%, or $476.1 million, to $3.3 billion in 2021 from $2.8 billion for 2020.

The increase was primarily due to a 16.9% increase in average selling price per vehicle sold, driven by increases in demand for nearly all product types due to record demand outpacing manufacturer production.

On a same store basis, new vehicle revenue increased 7.7% to $3.0 billion and new vehicle units decreased 8.3% in 2021 compared to 2020.

New vehicle gross profit increased 74.2%, or $373.2 million, to $876.0 million in 2021 from $502.8 million for 2020.

The increase was due to a 16.9% increase in average price per vehicle sold.

New vehicle gross margin increased 874 basis points to 26.5% in 2021 from 17.8% in 2020.

The increase was due to a sales mix shift towards available higher-margin towable units and higher average motorized units gross margins resulting from lower motorized inventory levels.

Used Vehicles

Used vehicle revenue increased 14.8%, or $127.2 million, to $984.9 million for 2020 from $857.6 million for 2019.

The increase was primarily due to a 10.1% increase in average selling price per vehicle sold, and a 4.3% increase in vehicle units sold, driven mostly by towable units where a dip in trade-in rates through a portion of the year compressed inventory levels while product demand remained high.

On a same store basis, used vehicle revenue increased 10.0% to $911.3 million in 2020 from $828.3 million in 2019.

Used vehicle revenue increased 71.2%, or $701.4 million, to $1.7 billion in 2021 from $984.9 million for 2020.

The increase was primarily due to a 29.6% increase in vehicle units sold and a 32.1% increase in average selling price per vehicle, driven by increases in demand for nearly all product types as lower new inventory levels have driven an increase in demand for used vehicles.

On a same store basis, used vehicle revenue increased 59.3% to $1.5 billion and used vehicle units sold increased 19.7% in 2021 compared to 2020.

Used vehicle gross profit increased 87.5%, or $204.6 million, to $438.4 million in 2021 from $233.8 million in 2020.

The increase was primarily from a 25.3% increase in average gross profit per vehicle sold and a 4.3% increase in vehicle units sold.

Used vehicle gross margin increased 287 basis points to 23.7% in 2020 from 20.9% in 2019.

The increase was driven by nearly all types of towable units as a result of strength in the used market.

The increase was due to 29.6% increase in vehicles sold.

Used vehicle gross margin increased 226 basis points to 26.0% in 2021 from 23.7% in 2020 driven primarily by a 32.1% increase in average selling price per vehicle due to strong demand in the used vehicle market across nearly all product types.

Products, Service and Other

Products, service and other revenue decreased 8.3%, or $85.7 million, to $948.9 million in 2020 from $1.0 billion in 2019.

The decrease was driven by store closures related to the 2019 Strategic Shift, partially offset by improvements in same store sales.

Products, service and other revenue increased 16.0%, or $152.1 million, to $1.1 billion in 2021 from $948.9 million in 2020.

The increase was primarily attributable to increased new and used vehicle revenue, which resulted in an increase in RV parts and accessory sales and promotions associated with our exit from non-RV retail categories in our 2019 Strategic Shift.

On a same store basis, products, service and other revenue increased 6.4% to $716.6 million for 2021 from $673.3 million in 2020.

Products, service and other gross profit increased 10.2%, or $36.7 million, to $394.9 million in 2021 from $358.2 million in 2020.

The increase was driven by the 2019 Strategic Shift inventory liquidation charge of $27.3 million in 2019 and improved margin at the remaining locations.

Product, service and other gross margin increased to 37.7% in 2020 from 26.3% in 2019.

The increase was primarily due to a sales mix shift towards higher margin legacy RV products and the 2019 Strategic Shift inventory liquidation charge of $27.3 million in 2019.

The increase was driven by increased volume of products sold and improved service margins.

Product, service and other gross margin decreased 188 basis points to 35.9% in 2021 primarily due to increased sales at lower margins to liquidate inventory in exited categories of fishing, firearms and apparel.

Finance and Insurance, net

Finance and insurance, net revenue increased 15.7%, or $63.0 million to $464.3 million in 2020 from $401.3 million for 2019, primarily due to increased volume of vehicles sold.

Finance and insurance, net as a percentage of new and used vehicle revenue decreased to 12.2% for 2020 from 12.4% for 2019.

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged.

Finance and insurance, net increased 28.9%, or $134.2 million, to $598.5 million in 2021 from $464.3 million in 2020, primarily due to increased volume of vehicles sold.

Finance and insurance, net as a percentage of new and used vehicle revenue decreased to 12.0% for 2021 from 12.2% for 2020, driven by average sales price increases on new and used vehicle sales outpacing the average price increase of Finance and Insurance, net.

On a same store basis, finance and insurance, net revenue increased 19.1%, or $87.1 million, to $544.0 million in 2020 versus $456.9 million in 2020.

Good Sam Club

Good Sam Club revenue decreased 8.9%, or $4.4 million, to $44.3 million in 2020 from $48.7 million in 2019.

The decrease resulted from a reduced number of members and reduced royalty fees from the credit card related to fewer retail locations that resulted from store closures related to the 2019 Strategic Shift.

Good Sam Club gross profit decreased 6.6%, or $2.5 million, to $35.4 million in 2020 from $37.9 million in 2019.

The decrease was primarily due to a reduced number of members from the decreased number of stores as a result of the store closures related to the 2019 Strategic Shift.

Gross margin increased to 79.9% in 2020 from 77.9% in 2019 primarily due to reduced club marketing expenses.

Good Sam Club revenue increased 8.2%, or $3.6 million, to $47.9 million in 2021 from $44.3 million in 2020.

The increase resulted from a $1.9 million revenue increase primarily due to increased Good Sam Club memberships, and a $1.7 million increase in marketing fee revenue from Good Sam Club co-branded credit cards resulting from increased open accounts.

Good Sam Club gross profit increased 15.1%, or $5.3 million, to $40.7 million in 2021 from $35.4 million in 2020.

The increase was primarily due to increased Good Sam Club memberships, increased marketing fee revenue from Good Sam Club co-branded credit cards, and reduced marketing costs.

Good Sam Club gross margin increased to 85.0% in 2021 from 79.9% in 2020 primarily due to increased revenue and reduced marketing costs.

Selling, general and administrative

Selling, general and administrative expenses increased 1.3%, or $14.4 million, to $1.2 billion in 2020 from $1.1 billion for 2019.

The $14.4 million increase was primarily due to a $46.7 million increase in wage-related expenses attributable in large part to variable pay on increased gross profit, partially offset by an $18.1 million decrease in advertising as the Company shifted towards a more digitally-driven marketing approach, $8.1 million decrease in personal and real property expense primarily due to closed stores as a result of the 2019 Strategic Shift, and a $6.1 million decrease in other store and corporate overhead expenses.

Selling, general and administrative expenses increased 36.1%, or $417.5 million, to $1.6 billion in 2021 from $1.2 billion in 2020.

The $417.5 million increase was primarily due to a $338.1 million increase in wage-related expenses attributable in large part to variable pay on increased gross profit in 2021 and the reduction in salaries relating to our initial response to COVID-19 that occurred in 2020 (see “COVID-19” in Part II, Item 7 of this 10-K), a $43.8 million increase in selling expenses mainly driven by branding and other marketing spend reductions made at the beginning of the COVID-19 pandemic, a $18.6 million increase in other store and corporate overhead expenses, and a $17.0 million increase in occupancy expenses primarily relating to the 25 locations opened over the last twenty-four months.

Selling, general and administrative expenses as a percentage of total gross profit decreased to 64.1% in 2021 from 67.9% in 2020.

Depreciation and amortization

Depreciation and amortization decreased 13.3%, or $8.0 million, to $52.0 million in 2020 from $59.9 million for 2019 due to reduction in capital expenditures in 2020 and the asset impairment related to the 2019 Strategic Shift in 2019.

Depreciation and amortization increased 27.8%, or $14.4 million, to $66.4 million in 2021 from $52.0 million in 2020 due primarily to $7.4 million of accelerated depreciation on store fixtures related to categories exited as part of the 2019 Strategic Shift, and increased purchases of property and equipment.

Long-lived asset impairment

As discussed in Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, we recognized $12.4 million of long-lived asset impairments in 2020, of which $12.3 million related to the 2019 Strategic Shift discussed above, and $66.3 million of long-lived asset impairments during 2019, of which $57.4 million was related to the 2019 Strategic Shift.

As discussed in Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, we recognized $3.0 million of long-lived asset impairments in 2021, of which $1.4 million related to the 2019 Strategic Shift discussed above, and $12.4 million for 2020, of which $12.3 million related to the 2019 Strategic Shift discussed above.

Lease termination

Lease termination expense increased $5.2 million to $4.5 million in 2020 from a lease termination benefit of $0.7 million in 2019, related primarily to lease terminations in connection with the 2019 Strategic Shift discussed above.

Lease termination expense of $2.2 million in 2021, included $1.4 million related to the 2019 Strategic Shift discussed above.

Lease termination expense of $4.5 million in 2020, related primarily to lease terminations in connection with the 2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense decreased 28.3%, or $5.6 million, to $14.1 million for 2021 from $19.7 million in 2020.

The decrease was primarily due to a 169 basis point decrease in the average floor plan borrowing rate, and a 22.3% decrease in average floor plan borrowings driven by lower average inventory levels.

The decrease was primarily due to 77 basis point decrease in the average floor plan borrowing rate and a 2.3% decrease in the average floor plan borrowings driven by lower average new unit inventory levels.

Other interest expense, net

Other interest expense decreased 14.2%, or $7.8 million, to $46.9 million in 2021 from $54.7 million for 2020.

The decrease was primarily due to a 113 basis point decrease in the average interest rate.

The decrease was primarily due to a 53 basis point decrease in average interest rate and reduced average borrowings applicable to our term loan facilities.

Loss and expense on debt restructure

Loss and expense on debt restructure of $13.5 million in 2021 was comprised of $0.4 million in extinguishment of the original issue discount related to the Previous Term Loan Facility (as defined below), $1.0 million in extinguishment in capitalized finance costs related to the Previous Term Loan Facility, and $12.1 million in legal and other expenses related to the New Term Loan Facility (as defined below).

Tax Receivable Agreement Liability adjustment

The Tax Receivable Agreement liability adjustment for 2020 and 2019 was a benefit of $0.1 million and $10.0 million, respectively, which represented an adjustment for lower enacted state income tax rates in both periods.

The Tax Receivable Agreement Liability adjustment of $2.8 million for 2021 related to a remeasurement in 2021 to reflect an increase in state tax rates.

The Tax Receivable Agreement Liability adjustment for 2020 was a benefit of $0.1 million, which represented an adjustment for lower enacted state income tax rates.

Income tax expense

Income tax expense increased 95.2%, or $28.2 million, to $57.7 million in 2020 compared to $29.6 million for 2019.

The increase was primarily due to higher income generated at CWGS, LLC for which the Company is subject to U.S.

federal and state taxes on its allocable share, partially offset by operating losses recorded by Camping World, Inc.

(“CW”) for which no tax benefit can be recognized.

Net income (loss)

Net income increased $464.5 million to a net income of $344.2 million in 2020 from a net loss of $120.3 million in 2019 primarily due to the items mentioned above.

Income tax expense increased $34.4 million, to $92.1 million in 2021 compared to $57.7 million for 2020.

The increase was primarily due to both higher income generated and an increase in ownership interest in CWGS, LLC for which the Company is subject to U.S.

federal and state taxes on its allocable share, plus higher state tax rates, net of operating losses recorded by CW for which limited tax benefit can be recognized, partially offset by the $15.2 million release of valuation allowance at CW, which is now available to offset state combined income in certain unitary states due to the Company’s increased ownership in CWGS, LLC.

The valuation allowance release during 2021 is attributable to the change in the entities within state combined filing groups due to unitary relationships, which provide additional taxable income sources to utilize CW’s deferred tax assets.

CWH’s increased ownership in CWGS, LLC and other qualitative unity factors impacted the unitary relationships.

Net income increased $297.9 million to a net income of $642.1 million in 2021 from a net income of $344.2 million in 2020.

The change was primarily due to the items mentioned above.

Segment results

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Total consolidated revenue

Segment income (loss):

Segment income:

Good Sam Services and Plans

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Tax Receivable Agreement liability adjustment

Income (loss) before income taxes

Loss and expense on debt restructure

Other expense, net

Income before income taxes

Same store revenue- RV and Outdoor Retail (2)

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Good Sam Services and Plans

Good Sam Services and Plans segment revenue was $182.8 million for 2020, an increase of $1.2 million, or 0.7%, from $181.5 million for 2019.

The $1.2 million increase was primarily attributable to $2.4 million from increased contracts in force from our roadside assistance programs, $1.8 million from increased contracts in force for our extended vehicle warranty programs, $1.6 million from increased contracts in force for our vehicle insurance products, and $1.1 million from increased RV financing loan volume, partially offset by a $2.5 million decrease from 13 fewer consumer shows, and decreases in advertising revenue, including a $1.5 million decrease from the magazine group and a $1.7 million decrease for the annual directory.

Good Sam Services and Plans segment income was $88.3 million for 2020, an increase of $4.7 million, or 5.6%, from $83.6 million for 2019.

The increase was primarily attributable to a gross profit increase of $6.6 million, which was comprised of $4.2 million from increased policies in force and reduced marketing expenses for our extended vehicle warranty programs, $3.2 million from increased policies in force and reduced program expenses in our roadside assistance programs, and $1.2 million from increased loan volume for our RV financing, partially offset by $1.1 million of reduced gross profit from reduced consumer shows, $0.8 million from the annual directory and $0.1 million from other services and plans;

and reduced loss on asset disposals of $0.6 million, partially offset by increased selling, general and administrative expenses of $2.5 million.

Segment income margin net of intersegment revenue elimination increased 220 basis points to 48.8% primarily due to increased policies in force and reduced marketing costs for our extended vehicle warranty programs, and increased policies in force reduced program costs in our roadside assistance programs.

Good Sam Services and Plans segment revenue decreased 1.0%, or $1.8 million, to $180.9 million for 2021, from $182.8 million for 2020.

The decrease was primarily attributable to a $7.2 million decrease due to fewer in-person consumer shows held in 2021 due to COVID-19, a $4.8 million decrease primarily from the elimination of low margin extended warranty insurance programs, a $1.4 million decrease from reduced magazine ad sales as a result of combining two magazines into one, and a $0.4 million decrease from reduced ad sales in the annual directory, partially offset by a $6.9 million increase from roadside assistance programs primarily resulting from increased contracts in force, a $3.1 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force, and a $2.0 million increase from Good Sam insurance programs primarily resulting from increased contracts in force.

Good Sam Services and Plans segment income decreased 15.3%, or $13.5 million, to $74.8 million for 2021, from $88.3 million for 2020.

The decrease in gross profit was primarily attributable to an increase in selling, general and administrative expenses of $12.7 million, a $2.9 million decrease in contribution from fewer in-person consumer shows being held during the 2021 period due to COVID-19, a $1.2 million increase in overhead and marketing expenses, a $1.1 million reduction from the annual directory, a $1.0 million reduction from the magazine group, a $0.6 million increase in loss on sale or disposal of assets, and a $0.2 million reduction from other services and plans, partially offset by a $3.2 million increase in contribution from the Good Sam TravelAssist programs, a $2.2 million increase from the Good Sam insurance programs, and an $0.8 million increase from the roadside assistance programs.

Segment income margin net of intersegment revenue elimination increased 741 basis points to 41.4%, primarily due to increased revenue and higher gross margin from the Good Sam TravelAssist and Good Sam insurance products, partially offset by reduced gross margin for the roadside assistance programs and consumer shows.

RV and Outdoor Retail segment

RV and Outdoor Retail segment revenue was $5.3 billion for 2020, an increase of $553.8 million, or 11.7%, from $4.7 billion for 2019.

The increase was primarily due to a 17.7% increase in new vehicle units sold and a 4.4% increase in average selling price per vehicle, driven by increases in nearly all product types, led by single and double axle travel trailers.

RV and Outdoor Retail segment income was $430.0 million for 2020, an increase of $472.6 million, from segment loss of $42.6 million for 2019.

The increase was primarily due to a $408.5 million increase in gross profit primarily from higher towable and motorized gross margins resulting from lower supply from manufacturers and outsized demand from consumers turning to RVing as a vacation alternative and increased strength of the used vehicle market, a $53.9 million reduction in long-lived asset impairment, a $20.4 million decrease in floor plan interest expense, and a $9.5 million reduction in loss on disposal of assets, partially offset by an increase of approximately $14.5 million in selling, general and administrative expenses resulting from commissions on increased revenue partially offset by a reduction resulting from the 2019 Strategic Shift, and a $5.2 million increase in lease termination expense.

Segment income margin net of intersegment revenue elimination increased to 8.2% from a segment loss margin of 0.90% in 2019 primarily due to the impact of the 2019 Strategic Shift.

RV and Outdoor Retail segment revenue increased 27.9%, or $1.5 billion, to $6.8 billion for 2021, from $5.3 billion for 2020.

The increase was primarily driven by a $476.7 million, or 16.8%, increase in new vehicle revenue, a $702.5 million, or 71.1%, increase in used vehicle revenue, a $152.2 million, or 16.0%, increase in products, service and other revenue, a $138.9 million, or 29.3%, increase in finance and insurance, net revenue, and a $3.6 million, or 8.2% increase in Good Sam Club revenue.

RV and Outdoor Retail segment income increased $368.9 million, or 85.8%, to a segment income of $798.8 million for 2021 from $430.0 million for 2020.

The increase was primarily related to increased segment gross profit of $754.0 million primarily due to increased average sales price per vehicle sold, a $9.3 million reduction in long-lived asset impairment, a $5.6 million reduction in floor plan interest expense, a $2.3 million decrease in lease termination expense, and a $2.6 million reduction in loss on sale or disposal of assets, partially offset by a $404.9 million increase in selling, general and administrative expenses.

RV and Outdoor Retail segment margin increased to 11.9% in 2021 from 8.2% in 2020.

Corporate and other expenses

Corporate and other expenses were $9.8 million for 2020, a decrease of $2.7 million, or 21.7%, from $12.5 million for 2019.

The decrease was primarily due to reduced professional fees.

Corporate and other expenses decreased $0.1 million, or 0.7%, to $9.7 million for 2021, from $9.8 million for 2020.

Tax Receivable Agreement Liability adjustment

The Tax Receivable Agreement Liability adjustment for 2021 was an expense of $2.8 million and 2020 was a benefit of $0.1 million, which represented an adjustment for lower enacted state income tax rates in both periods.

Non-GAAP Financial Measures

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We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance.

These items include, among other things, long-lived asset

impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and losses on disposal of assets and other expense, net, monitoring fees, equity-based compensation, Tax Receivable Agreement liability adjustment, transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items.

These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on disposal of assets, net, equity-based compensation, Tax Receivable Agreement Liability adjustment, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items.

We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue.

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Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP financial performance measures, which are net (loss) income, and net (loss) income margin, respectively:

The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP financial performance measures, which are net income (loss), and net income (loss) margin, respectively:

Fiscal Year Ended

($ in thousands)

Net income (loss)

EBITDA and Adjusted EBITDA:

Other interest expense, net

3 unchanged sentences

Loss and expense on debt restructure (a)

Goodwill impairment (b)

Long-lived asset impairment (c)

Lease termination (d)

Loss (gain) on disposal of assets, net (e)

Monitoring fee (f)

Equity-based compensation (g)

Tax Receivable Agreement liability adjustment (h)

Acquisitions - transaction expense (i)

Gander Outdoors pre-opening costs (j)

Restructuring costs (k)

Long-lived asset impairment (b)

Lease termination (c)

(Gain) loss on sale or disposal of assets, net (d)

Equity-based compensation (e)

Tax Receivable Agreement liability adjustment (f)

Restructuring costs (g)

Adjusted EBITDA

1 unchanged sentence

(as percentage of total revenue)

EBITDA margin:

Net income (loss) margin

Adjusted EBITDA margin:

Net income margin

Other interest expense, net

3 unchanged sentences

Loss and expense on debt restructure (a)

Goodwill impairment (b)

Long-lived asset impairment (c)

Lease termination (d)

Loss (gain) on disposal of assets, net (e)

Monitoring fee (f)

Equity-based compensation (g)

Tax Receivable Agreement liability adjustment (h)

Acquisitions - transaction expense (i)

Gander Outdoors pre-opening costs (j)

Restructuring costs (k)

Long-lived asset impairment (b)

Lease termination (c)

(Gain) loss on sale or disposal of assets, net (d)

Equity-based compensation (e)

Tax Receivable Agreement liability adjustment (f)

Restructuring costs (g)

Adjusted EBITDA margin

(a) Represents the loss and expense incurred on debt restructure and financing expense incurred from the Third Amendment to the Credit Agreement in 2018, the First and Second Amendment to the Senior Credit Facilities in 2017, the write-off of a portion of the original issue discount, capitalized finance costs from the Previous Term Loan Facilities, and rating agency fees and legal expenses related to the Previous Term Loan Facilities in 2016.

(b) Represents a goodwill impairment charge of $40.0 million related to the RV and Outdoor Retail segment in the fourth quarter of 2018.

See Note 7 - Goodwill and Intangible Assets to our audited consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information.

(c) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(d) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease termination fees.

(a) Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 million in extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $12.1 million in legal and other expenses related to the New Term Loan Facility in 2021.

(b) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(c) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, resulting from lease termination fees and the derecognition of the operating lease assets and liabilities.

See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(e) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020 and 2019 and (ii) the gains and losses on disposal and sales of various assets.

(f) Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams.

The monitoring agreement was terminated on October 6, 2016 in connection with our IPO.

(g) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(h) Represents an adjustment to eliminate the gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS Enterprises LLC (“GSS”) to Camping World, Inc.

(i) Represent transaction expenses, primarily legal costs, associated with acquisitions into new or complementary markets, including the Gander Mountain acquisition.

This amount excludes transaction expenses related to the acquisition of RV dealerships, consumer shows, and other RV and Outdoor Retail segment business acquisitions which are considered recurring in nature.

(j) Represents pre-opening store costs associated with the Gander Outdoors store openings, which is comprised of 1) Gander Outdoors-specific corporate and retail overhead, 2) distribution center expenses, and 3) store-level startup expenses.

As discussed in Note 15 - Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, the Company incurred significant costs related to the initial rollout of Gander Outdoors locations.

Based on the nature of the acquisition through a bankruptcy auction and the large quantity of retail locations opened and to be opened in a very compressed timeframe, the Company does not deem the pre-opening store costs for the initial rollout of Gander Outdoors locations to be normal, recurring charges.

The Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.

(k) Represents restructuring costs relating to our 2019 Strategic Shift.

(d) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020 and 2019 and (ii) the gains and losses on disposal and sales of various assets.

(e) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(f) Represents an adjustment to eliminate the losses and gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate and the transfer of certain assets from GSS Enterprises LLC (“GSS”) to CW.

(g) Represents restructuring costs relating to our 2019 Strategic Shift.

These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs.

These costs exclude lease termination costs, which are presented separately (see (d) above).

These costs exclude lease termination costs, which are presented separately (see (c) above).

See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

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adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance.

These items include, among other things, long-lived asset impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and losses on disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability adjustment, transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

We define “Adjusted Net Income Attributable to Camping World Holdings, Inc.

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– Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these Non GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

Consistent with the GAAP basic and diluted earnings per share of Class A common stock, Adjusted Earnings Per Share – Basic and Adjusted Earnings Per Share – Diluted cannot be presented for periods prior to the Company’s IPO on October 6, 2016.

Prior to the IPO, the CWGS, LLC membership structure included membership units, preferred units, and profits units.

During the period of September 30, 2014 to October 6, 2016, there were 70,000 preferred units outstanding that received a total preferred return of $2.1 million per quarter in addition to their proportionate share of distributions made to all members of CWGS, LLC.

The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements.

Therefore, earnings per share information has not been presented for periods prior to the IPO on October 6, 2016.

The Adjusted Earnings Per Share – Basic and Adjusted Earnings Per Share – Diluted for the year ended December 31, 2016 represents only the period of October 6, 2016 to December 31, 2016.

The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc.

– Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc.

– Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure, which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP financial measures, and weighted-average shares of Class A common stock outstanding – basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:

earnings (loss) per share of Class A common stock – basic, in the case of Adjusted Earnings Per Share – Basic;

and earnings (loss) per share of Class A common stock – diluted, in the case of the Adjusted Earnings Per Share – Diluted:

Fiscal Year Ended

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Income tax expense for above adjustment (b)

Goodwill impairment (c):

Gross adjustment

Income tax (expense) benefit for above adjustment (b)

Long-lived asset impairment (d):

Long-lived asset impairment (c):

Gross adjustment

Income tax expense for above adjustment (b)

Lease termination (e):

Lease termination (d):

Gross adjustment

Income tax expense for above adjustment (b)

(Gain) loss on disposal of assets and other expense, net (f):

Gross adjustment

Income tax (expense) benefit for above adjustment (b)

Equity-based compensation (g):

(Gain) loss on sale or disposal of assets (e):

Gross adjustment

Income tax expense for above adjustment (b)

Tax Receivable Agreement liability adjustment (h):

Gross adjustment

Income tax benefit for above adjustment (b)

Fiscal Year Ended

(In thousands except per share amounts)

Acquisitions - transaction expense (i):

Equity-based compensation (f):

Gross adjustment

Income tax expense for above adjustment (b)

Gander Outdoors pre-opening costs (j):

Tax Receivable Agreement liability adjustment (g):

Gross adjustment

Income tax (expense) benefit for above adjustment (b)

Restructuring costs (k):

Income tax expense for above adjustment (b)

Restructuring costs (h)

Gross adjustment

Income tax expense for above adjustment (b)

Revaluation of deferred tax assets from tax reform (l)

Adjustment to net (income) loss attributable to non-controlling interests resulting from the above adjustments (m)

Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (i)

Adjusted net income (loss) attributable to Camping World Holdings, Inc.

Adjustments related to diluted calculation:

Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (n)

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (o)

Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (n)

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (o)

Reallocation of net income (loss) attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j)

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (k)

Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (j)

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (k)

Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in CWGS, LLC (l)

Adjusted net income (loss) attributable to Camping World Holdings, Inc.

– basic and diluted

Weighted-average Class A common shares outstanding – basic

Adjustments related to diluted calculation:

Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (p)

Dilutive options to purchase Class A common stock (p)

Dilutive restricted stock units (p)

Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m)

Dilutive options to purchase Class A common stock (m)

Dilutive restricted stock units (m)

Adjusted weighted average Class A common shares outstanding – diluted

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Adjusted earnings (loss) per share - diluted

Anti-dilutive amounts (q):

Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (n)

Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (o)

Assumed income tax benefit of combining C-corporations with full valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in CWGS, LLC (r)

Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (p)

original issue discount, capitalized finance costs from the Previous Term Loan Facilities, and rating agency fees and legal expenses related to the Previous Term Loan Facilities in 2016.

Fiscal Year Ended

(In thousands except per share amounts)

Anti-dilutive amounts (n):

Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (j)

Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (k)

Assumed income tax benefit of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in CWGS, LLC (l)

Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m)

Reconciliation of per share amounts:

Earnings (loss) per share of Class A common stock — basic

Non-GAAP Adjustments (o)

Adjusted earnings (loss) per share - basic

Earnings (loss) per share of Class A common stock — diluted

Non-GAAP Adjustments (o)

Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (p)

Dilutive options to purchase Class A common stock and/or restricted stock units (p)

Adjusted earnings (loss) per share - diluted

(b) Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized.

This assumption uses effective tax rates between 25.0% and 25.5% for the adjustments for 2020, 2019 and 2018 and 38.5% for the adjustments in 2017 and 2016, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c) Represents a goodwill impairment charge of $40.0 million related to the RV and Outdoor Retail segment in the fourth quarter of 2018.

See Note 7 - Goodwill and Intangible Assets to our audited consolidated financial statements in Part II, Item 8 of this Form 10-K for additional information.

(d) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

This assumption uses effective tax rates between 25.0% and 25.5% for the adjustments for 2021, 2020 and 2019, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(e) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease termination costs.

(d) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, resulting from lease termination costs and the derecognition of the operating lease assets and liabilities.

See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(f) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020 and 2019 and (ii) the gains and losses on disposal and sales of various assets.

(g) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(f) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(g) Represents an adjustment to eliminate the losses and gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS to CW.

See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(i) Represents transaction expenses, primarily legal costs, associated with acquisitions into new or complementary markets, including the Gander Mountain acquisition.

This amount excludes transaction expenses related to the acquisition of RV dealerships, and other RV and Outdoor Retail segment business acquisitions.

The Company incurred significant costs related to the initial rollout of Gander Outdoors locations.

The Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.

(k) Represents restructuring costs relating to our 2019 Strategic Shift.

(h) Represents restructuring costs relating to our 2019 Strategic Shift.

These costs exclude lease termination costs, which are presented separately (see (e) above).

These costs exclude lease termination costs, which are presented separately (see (d) above).

See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(l) This amount relates to the remeasurement of federal net deferred tax assets resulting from the permanent reduction in the U.S.

statutory corporate tax rate to 21% from 35% under the U.S.

Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”).

(m) Represents the adjustment to net (income) loss attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC.

This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 55.9%, 58.1%, 58.3% and 69.3% for the years ended December 31, 2020, 2019, 2018 and 2017, respectively, and 77.6% for the post-IPO period of 2016.

(n) Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.

(o) Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests.

(p) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.

(q) The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive.

(r) Represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC.

(i) Represents the adjustment to net (income) loss attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC.

This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 49.1%, 55.9% and 58.1% for the years ended December 31, 2021, 2020 and 2019, respectively.

(j) Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.

(k) Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests.

(l) Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC.

However, for the

year ended December 31, 2021, this adjustment included the reversal of the $15.2 million benefit from changes in the valuation allowance for CW.

Subsequent to the exchange of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries.

The adjustment reflects the income tax benefit assuming effective tax rates between 25.0% and 25.5% for the adjustments for 2021, 2020 and 2019 for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded.

No assumed release of valuation allowance established for previous periods are included in these amounts.

Prior to 2018, the Company did not consider the losses of these C-corporations with valuation allowances to be significant and the Company did not retroactively adjust 2017 or 2016 for these amounts, which were $4.4 million for the year ended December 31, 2017 and $2.4 million for the post-IPO period of 2016.

No assumed release of valuation allowance established for previous periods were included in these amounts, and the $15.2 million release of valuation allowance during the year ended December 31, 2021 was considered to be reversed and excluded from adjusted net income attributable to Camping World Holdings, Inc.

– diluted for purposes of this calculation.

(m) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.

(n) The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive.

Specifically, adjusted earnings per share - diluted on a fully-exchanged basis for the years ended December 31, 2020 and 2019 produces an anti-dilutive result;

therefore, adjusted earnings per share – diluted has not been presented on a fully-exchanged basis.

(o) Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (i) above).

(p) Represents the per share impact of stock options, restricted stock units, and/or common units of CWGS, LLC from the difference in their dilutive impact between the GAAP and Non-GAAP earnings per share calculations.

As discussed under “Our Corporate Structure Impact on Income Taxes” in Part II, Item 7 of this Form 10-K , our “Up-C” corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure.

There can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in CWGS, LLC are considered dilutive or anti-dilutive for a given period.

To improve comparability of our financial results, users of our financial statements may find it useful to review our earnings per share assuming the full exchange of common units in CWGS, LLC for all periods, even when those common units would be anti-dilutive.

The relevant numerator and denominator adjustments have been provided under “Anti-dilutive amounts” in the table above (see (n) above).

Uses and Limitations of Non-GAAP Financial Measures

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By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

In addition, our Senior Secured Credit Facilities use EBITDA to measure our compliance with covenants such as the consolidated leverage ratio.

In addition, our Senior Secured Credit Facilities use Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC, to measure our compliance with covenants such as the consolidated leverage ratio.

The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our consolidated financial statements included elsewhere in this Form 10-K as indicators of financial performance.

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We compensate for these limitations by relying primarily on our GAAP results and using these Non-GAAP Financial Measures only supplementally.

As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for long-lived asset impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and losses on disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability, transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring costs relating to the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable.

As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability, restructuring costs relating to the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable.

It is reasonable to expect that certain of these items will occur in future periods.

However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time.

In addition, these certain Non-GAAP Financial Measures adjust for other items that we do not expect to regularly record in periods after the IPO, including monitoring fees.

Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a

measure of our core operating performance over time by removing items that are not related to day to day operations.

Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

Liquidity and Capital Resources

Our primary requirements for liquidity and capital have been working capital, inventory management, acquiring and building new retail locations, the improvement and expansion of existing retail locations, debt service, distributions to holders of equity interests in CWGS, LLC and our Class A common stock, and general corporate needs.

These cash requirements have historically been met through cash provided by operating activities, cash and cash equivalents, proceeds from registered offerings of our Class A common stock, borrowings under our Senior Secured Credit Facilities (as defined below), borrowings under our Floor Plan Facility (as defined below) and borrowings under our Real Estate Facility (as defined below).

As a public company, our additional liquidity needs include public company costs, payment of regular and special cash dividends, any exercise of the redemption right by the Continuing Equity Owners from time to time (should we elect to exchange common units for a cash payment), our stock repurchase program as described below, payments under the Tax Receivable Agreement, and state and federal taxes to the extent not reduced as a result of the Tax Receivable Agreement.

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provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax Receivable Agreement.

For a discussion of the Tax Receivable Agreement, see Note 11 — Income Taxes to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K.

On October 30, 2020, our board of directors authorized a stock repurchase program for the repurchase of up to $100.0 million of our Class A common stock, expiring on October 31, 2022.

Repurchases under the program are subject to any applicable limitations on the availability of funds to be distributed to the Company by CWGS, LLC to fund repurchase and may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs.

For a discussion of the Tax Receivable Agreement, see Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

Stock Repurchase Program

In October 2020, our board of directors authorized a stock repurchase program for the repurchase of up to $100.0 million of our Class A common stock, expiring on October 31, 2022.

In August 2021, our board of directors authorized an increase to the stock repurchase program for the repurchase of up to an additional $125.0 million of our Class A common stock and an extension of the stock repurchase program to expire on August 31, 2023.

In January 2022, our board of directors authorized an increase to the stock repurchase program to allow for the repurchase of an additional $152.7 million of our Class A common stock and an extension of the stock repurchase program to expire on December 31, 2025.

Repurchases under the program are subject to any applicable limitations on the availability of funds to be distributed to the Company by CWGS, LLC to fund the repurchase and may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs.

Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

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We expect to fund the repurchases using cash on hand.

During the year ended December 31, 2020, we repurchased 811,223 shares of our Class A common stock for $21.5 million, including broker commissions.

As of December 31, 2020, $78.5 million is available under the stock repurchase program to repurchase additional shares of our Class A common stock.

CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us, and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of our board of directors.

During each of the three month periods during the year ended December 31, 2019 and the three months ended March 31, 2020, and June 30, 2020, we paid a regular quarterly cash dividend of $0.08 per share of our Class A common stock.

On July 20, 2020, our board of directors approved the increase of the quarterly dividend to $0.09 per share of Class A common stock from $0.08 per share.

Accordingly, during each of the three months ended September 30, 2020 and December 31, 2020, we paid a regular quarterly cash dividend of $0.09 per share of our Class A common stock.

is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other operating expenses and other obligations.

In addition, we currently intend to pay a special cash dividend of all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of this Form 10-K) to the holders of our Class A common stock from time to time subject to the discretion of our board of directors as described under “Dividend Policy” included in Part II, Item 5 of this Form 10-K.

During each of the three month periods during the year ended December 31, 2019 and the three months ended March 31, 2020 and June 30, 2020, we paid a special cash dividend of $0.0732 per share of our Class A common stock.

Additionally, on July 20, 2020, our board of directors increased the quarterly special cash dividend to $0.08 per share of Class A common stock from $0.0732 per share.

Accordingly, during the three months ended September 30, 2020, we paid a special dividend of $0.08 per share of our Class A common stock.

Moreover, on September 17, 2020, our board of directors increased the quarterly special cash dividend to $0.14 per share of Class A common stock from $0.08 per share beginning with the three months ended December 31, 2020.

Additionally, on November 18, 2020, our board of directors approved a $0.77 per share of Class A common stock one-time special cash dividend.

These special dividends are typically funded by the accumulated tax distributions received by CWH from CWGS, LLC that are in excess of the corporate income taxes payable by CWH and current payment obligations under the TRA liability.

In December 2020, CWGS, LLC paid an additional $0.20 per common unit distribution to partially fund the $0.77 per share of Class A common stock one-time special cash dividend discussed above.

During the year ended December 31, 2021 and 2020, we repurchased 3,988,881 and 811,223 shares of our Class A common stock, respectively, for $156.3 million and $21.5 million, respectively, including broker commissions.

As of December 31, 2021, $47.2 million was available under the stock repurchase program to repurchase additional shares of our Class A common stock.

Following the January 2022 increase in the stock repurchase program, approximately $200 million remained available for future repurchases.

For each of the three months ended September 30, 2021 and December 31, 2021, we paid a regular quarterly cash dividends on our Class A common stock of $0.50 per share, which was funded with a $0.15 per common unit cash distribution from CWGS, LLC and the remainder was funded with all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of this Form 10-K).

On August 23, 2021, our board of directors approved the increase of the portion of the quarterly dividend funded by these quarterly cash distributions from CWGS, LLC to $0.15 per share of Class A common stock from $0.10 per share and increased the quarterly cash dividend relating to all or a portion of the Excess Tax Distribution to $0.35 per share of Class A common stock from $0.15 per share.

Between July 20, 2020 and April 29, 2021, the portion of the quarterly cash dividend funded by these quarterly cash distributions from CWGS, LLC had previously been raised in several incremental steps to $0.10 per share from $0.08 per share and the quarterly cash dividend relating to all or a portion of the Excess Tax Distribution had previously been raised in several incremental steps to $0.15 per share from $0.0732 per share.

On February 18, 2022, our board of directors approved the increase of the portion of the quarterly dividend relating to all or a portion of the Excess Tax Distribution to $0.475 per share of Class A common stock from $0.35 per share for an increase of the total quarterly dividend to $0.625 per share from $0.50 per share beginning in March 2022.

CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other operating expenses and other obligations.

Our dividend policy has certain risks and limitations, particularly with respect to liquidity, and we may not pay dividends according to our policy, or at all.

As described above, CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us, and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of our board of directors.

Additionally, as described above, we currently intend to pay a portion of our regular quarterly cash dividend with all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part

II, Item 5 of this Form 10-K) to the holders of our Class A common stock subject to the discretion of our board of directors as described under “Dividend Policy” included in Part II, Item 5 of this Form 10-K.

Our dividend policy has certain risks and limitations particularly with respect to liquidity, and we may not pay future dividends according to our policy, or at all.

See “Dividend Policy” included in Part II, Item 5 of this Form 10-K and “Risk Factors ─ Risks Relating to Ownership of Our Class A Common Stock ─ “Our ability to pay regular and special dividends on our Class A common stock is subject to the discretion of our board of directors and may be limited by our structure and statutory restrictions” included in Part I, Item 1A of this Form 10-K.

We have currently identified over 20 markets that would be attractive for both acquisition and greenfield opportunities in 2021.

This expansion could require in excess of $150.0 million for a combination of business acquisitions and capital expenditures relating to land, buildings, and improvements.

Factors that could impact the quantity of locations or the cost to acquire or open those locations include, but are not limited to, our ability to locate potential acquisition targets or greenfield locations in a geographic area and at a cost that meet our success criteria;

Acquisitions and Capital Expenditures

During the year ended December 31, 2021, we acquired 12 dealerships having an aggregate value of $100.1 million (see Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K) and purchased $129.2 million of real property.

Additionally, through 2022, our expansion of dealerships and Preowned Mega-Centers through acquisition and construction is expected to cost between $250.0 million and $350.0 million for a combination of business acquisitions and capital expenditures relating to land, buildings, and improvements.

Factors that could impact the quantity of future locations or the cost to acquire or open those locations include, but are not limited to, our ability to locate potential acquisition targets or greenfield locations in a geographic area and at a cost that meets our success criteria;

continued strong cash flow generation from our operations to fund these acquisitions and new locations;

and availability of financing on our Floor Plan Facility.

During the year ended December 31, 2020, we incurred long-lived asset impairment charges of $12.4 million, including $12.3 million primarily in connection with the 2019 Strategic Shift.

Tax Receivable Agreement Liability

The aggregate estimated payments under the Tax Receivable Agreement at December 31, 2021, were as follows (in thousands):

December 31, 2021

See Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

2019 Strategic Shift

During the year ended December 31, 2021, we incurred long-lived asset impairment charges of $1.4 million related to the 2019 Strategic Shift.

We expect that none of the foregoing charges will result in future cash expenditures.

Additionally, in connection with the 2019 Strategic Shift, we have incurred or expect to incur costs relating to one-time employee termination benefits as outlined in Note 5 ─ Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

There is significant uncertainty surrounding the impact of the COVID-19 pandemic on our results of operations and cash flows.

Additionally, in connection with the 2019 Strategic Shift, we have incurred or expect to incur costs relating to one-time employee termination benefits of $1.2 million, lease termination costs of between $18.0 million and $34.0 million, incremental inventory reserve charges of $57.4 million, and other associated costs of $35.0 million to $42.0 million.

We expect that approximately $3.2 million to $10.2 million of other associated costs and $4.5 million to $20.5 million of lease termination costs will result in future cash expenditures.

For a discussion of the 2019 Strategic Shift, see Note 5 ─ Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

There has been significant uncertainty surrounding the impact of the COVID-19 pandemic on our results of operations and cash flows.

As a result, we initially took proactive steps to increase cash available on-hand, including, but not limited to, reducing cash expenditures, including wage reductions through a combination of temporary salary reductions, layoffs, and furloughs;

negotiating payment deferrals with lessors, reducing marketing and promotional expenses;

negotiating payment deferrals with lessors;

reducing marketing and promotional expenses;

and delaying strategic capital expenditures.

We had negotiated lease payment deferrals with numerous landlords amounting to approximately $14.0 million from 2020 into 2021.

As demand for our products accelerated and our cash position improved, we repaid these deferred lease payment amounts in full prior to June 30, 2020 and most of the temporary salary reductions ended in May 2020.

Additionally, as a result of our improved cash position, we made voluntary principal payments in June 2020 of $9.6 million on our Term Loan Facility and $20.0 million on our Revolving Credit Facility.

As demand for our products accelerated and our cash position improved, most of the temporary salary reductions ended in May 2020.

We are continually monitoring the COVID-19 pandemic and its potential impacts on our business.

If stay-at-home and shelter-in-place restrictions are put back into place, we may choose to re-implement cost reduction measures.

sufficient to finance our continued operations, growth strategy, including the opening of any additional retail locations, regular and special quarterly cash dividends (as described above), required payments for our obligations under the Tax Receivable Agreement, and additional expenses we expect to incur for at least the next twelve months.

However, we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available under our Revolving Credit Facility or our Floor Plan Facility, including the potential additional borrowings noted above, will be sufficient to meet our future needs.

If we are unable to generate sufficient cash flows from operations in the future, including as a result of the impact of the COVID-19 pandemic on our business and if availability under our Revolving Credit Facility or our Floor Plan Facility is not sufficient, we may have to obtain additional financing.

Other Cash Requirements or Commitments

Substantially all of our new RV inventory and certain of our used RV inventory is financed under our Floor Plan Facility (defined below).

See “Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facilities” for a discussion of the cash requirements related to our indebtedness.

See Note 10 ─ Lease Obligations to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a discussion of cash requirements relating to operating and finance lease obligations.

See Note 13 — Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a discussion of cash requirements relating to service and marketing sponsorship agreements.

Sources of Liquidity and Capital

We believe that our sources of liquidity and capital including cash provided by operating activities, additional borrowings under our Floor Plan Facility, and borrowings under our Revolving Credit Facility will be sufficient to finance our continued operations, growth strategy, including the opening of any additional retail locations, regular and special quarterly cash dividends (as described above), required payments for our obligations under the Tax Receivable Agreement, and additional expenses we expect to incur for at least the next twelve months.

However, we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available under our New Revolving Credit Facility or our Floor Plan Facility, including the potential additional borrowings noted above, will be sufficient to meet our future needs.

If we are unable to generate sufficient cash flows from operations in the future, including as a result of the impact of the COVID-19 pandemic on our business and if availability under our New Revolving Credit Facility or our Floor Plan Facility is not sufficient, we may have to obtain additional financing.

If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted.

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See “Risk Factors — Risks Related to our Business — Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the availability of adequate capital” included in Part I, Item 1A of this Form 10-K.

As of December 31, 2020, we had working capital of $458.7 million, including $166.1 million of cash and cash equivalents.

Our working capital reflects the cash provided by deferred revenue reported under current liabilities of $88.2 million as of December 31, 2020, which reduces working capital.

Deferred revenue primarily consists of cash collected for club memberships in advance of services to be provided, which is deferred and recognized as revenue over the life of the membership, and deferred revenue for the annual guide.

As of December 31, 2021 and 2020, we had working capital of $685.6 million and $458.7 million, respectively, including $267.3 million and $166.1 million, respectively, of cash and cash equivalents.

Our working capital reflects the cash provided by deferred revenue and gains reported under current liabilities of $95.5 million and $88.2 million as of December 31, 2021 and 2020, respectively.

Deferred revenue primarily consists of cash collected for club memberships and roadside assistance contracts in advance of services to be provided, which is deferred and recognized as revenue over the life of the membership, and deferred revenue for the annual guide.

We use net proceeds from this deferred membership revenue to lower our long-term borrowings and finance our working capital needs.

Our Floor Plan Facility includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows us to transfer cash as an offset to the payable under the Floor Plan Facility.

The FLAIR offset account at December 31, 2020 was $133.6 million, $124.4 million of which could have been withdrawn while remaining in compliance with the financial covenants of the Floor Plan Facility.

Our Floor Plan Facility includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows us to transfer cash as an offset to the payables under the Floor Plan Facility.

The FLAIR offset account at December 31, 2021 was $92.1 million, all

of which could have been withdrawn while remaining in compliance with the financial covenants of the Floor Plan Facility.

We have experienced, and expect to continue to experience, variability in revenue, net income, and cash flows as a result of annual seasonality in our business.

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In addition, unusually severe weather conditions in some geographic areas may impact demand.

We generate a disproportionately higher amount of our annual revenue in our second and third fiscal quarters, respectively, which include the spring and summer months.

We generate a disproportionately higher amount of our annual revenue in our second and third fiscal quarters, which include the spring and summer months.

We incur additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs.

If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to decline.

If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of gross profit, lower margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to decline.

Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the timing of acquisitions and the seasonality of our business.

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See “Risk Factors — Risks Related to our Business — Our business is seasonal and this leads to fluctuations in sales and revenues” included in Part I, Item 1A of this Form 10-K.

The following table shows summary cash flows information for the years ended December 31, 2020 and 2019, respectively:

Fiscal Year Ended

The following table shows summary cash flow information for the years ended December 31, 2021 and 2020, respectively:

(In thousands)

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Net cash used in investing activities

Net cash used in financing activities

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Operating activities.

Our cash flows from operating activities are primarily collections from contracts in transit and customers following the sale of new and used vehicles, as well as from the sale of retail parts, service and other.

Contracts in transit represent amounts due from third-party lenders from whom pre-arranged agreements have been determined, and to whom the retail installment sales contracts have been assigned.

Our primary uses of cash from operating activities are repayments of vehicle floor plan payables, payments to retail product suppliers, personnel-related expenditures, payments related to leased property, advertising, and various consumer services program costs.

Net cash provided by operating activities was $747.7 million for the year ended December 31, 2020, an increase of $495.7 million from $251.9 million of net cash provided in operating activities in the year ended December 31, 2019.

The increase was primarily due to a $464.5 million increase in net income, $55.2 million of increased accounts payable and other accrued expenses, a $29.2 million accrual for FICA deferral related to The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and $0.7 million of other increases, partially offset by a $53.9 million reduction in long-lived asset impairment.

Net cash provided by operating activities was $154.0 million for the year ended December 31, 2021, a decrease of $593.7 million from $747.7 million of net cash provided by operating activities in the year ended December 31, 2020.

The decrease was primarily due to a $239.3 million decrease in inventory in 2020 coupled with a $629.8 million increase in inventory in 2021, a $43.8 million reduction in the CARES Act deferral of payroll taxes, a $26.0 decrease in accounts receivable, and a $12.5 million reduction in deferred income taxes, partially offset by a $297.9 million increase in net income, a $27.3 million increase in equity-based

compensation, $12.8 million of increased accounts payable and other accrued expenses, a $10.2 million increase in deferred revenue and $9.5 million of other cash uses.

Investing activities.

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Our capital expenditures consist primarily of investing in acquired and greenfield retail and RV dealership locations, existing retail locations, information technology, hardware and software.

There were no material commitments for capital expenditures as of December 31, 2020.

Additionally, during 2020, we entered into the non-cash activity for new finance leases for $6.5 million for IT hardware and $25.4 million for real estate.

The expected capital expenditures relating to new dealerships and real estate purchases through December 31, 2022 are discussed above.

As of December 31, 2021, we had $4.9 million in capital expenditures commitments.

The table below summarizes our capital expenditures for the years ended December 31, 2021 and 2020, respectively:

Fiscal Year Ended

(In thousands)

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Net cash used in investing activities was $355.8 million for the year ended December 31, 2021.

The $355.8 million of cash used in investing activities was comprised of $129.2 million for the purchase of real property, $118.7 million of capital expenditures primarily related to retail locations, $100.1 million for purchases of businesses, $8.0 million for purchases of other investments and $5.7 million for purchases of intangibles, partially offset by proceeds of $3.6 million from the sale of real property, and $2.2 million from the sale of property and equipment.

See Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.

Net cash used in investing activities was $125.9 million for the year ended December 31, 2020.

The $125.9 million of cash used in investing activities was comprised of $53.1 million for the purchase of real property, $47.6 million for the purchase of RV and Outdoor Retail businesses, $31.8 million of capital expenditures primarily related to retail locations, $2.5 million for investment in businesses, and $0.2 million for the purchase of intangible assets, partially offset by $7.5 million from the sale of real property, and proceeds of $1.8 million from the sale of property and equipment.

Net cash used in investing activities was $104.5 million for year ended December 31, 2019.

The $104.5 million of cash used in investing activities included capital expenditures of $56.8 million, acquisition of retail locations of $48.4 million, and purchases of real property of $31.6 million, partially offset by proceeds from the sale and leaseback of real property and the sale of property and equipment of $28.2 million and $4.1 million, respectively.

Financing activities.

Our financing activities primarily consist of proceeds from the issuance of debt and the repayment of principal and debt issuance costs.

Our net cash provided by financing activities was $ 303.0 million for the year ended December 31, 2021 .

The $ 303.0 million of cash provided by financing activities was primarily due to $ 487.9 million of net proceeds from borrowings under the Floor Plan Facility , $430.7 million of proceeds from long-term debt, and $4.1 million of proceeds from exercise of stock options, partially offset by $193.7 million of member distributions, $177.9 million of payments on long-term debt, $156.3 million for the repurchase of Class A common stock, $67.2 million of dividends paid on Class A common stock, $12.1 million of RSU shares withheld for tax, $7.7 million stock award shares withheld for tax, $2.9 million for finance lease payments, and $1.9 million of debt issuance costs.

Our net cash used in financing activities was $603.2 million for the year ended December 31, 2020.

The $603.2 million of cash used in financing activities was primarily due to $324.5 million of payments under the Floor Plan Facility, $137.0 million of distributions to CWGS, LLC common unit holders, $61.0 million of dividends paid on Class A common stock, $39.1 million of payments on long-term debt, $21.5 million for repurchases of Class A common stock to treasury stock, $20.0 million of payments on credit facilities, and $4.7 million of payments related to RSU shares withheld for taxes, partially offset by proceeds from exercise of stock options of $4.6 million.

Our net cash used in financing activities was $138.4 million for the year ended December 31, 2019.

The $138.4 million of cash used in financing activities was primarily due to distributions to CWGS, LLC common unit holders of $70.2 million, net payments under the Floor Plan Facility of $44.0 million, dividends paid on Class A common stock of $22.9 million, and net payment of debt of $13.7 million, partially offset by proceeds from long-term debt of $11.7 million, and other financing sources of $0.7 million.

Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility

As of December 31, 2020 and 2019, we had outstanding debt in the form of our Senior Secured Credit Facilities (as defined below), our Floor Plan Facility (as defined below), and our Real Estate Facility (as defined below).

Description of Senior Secured Credit Facilities, Floor Plan Facility, Real Estate Facilities, and Other Long-Term Debt

As of December 31, 2021 and 2020, we had outstanding debt in the form of our Senior Secured Credit Facilities (as defined below), our Floor Plan Facility (as defined below), our Real Estate Facilities (as defined below), and other long-term debt.

We may from time to time seek to refinance, retire or exchange our outstanding debt.

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Senior Secured Credit Facilities

As of December 31, 2020 and 2019, CWGS Group, LLC (the “Borrower”), an indirect subsidiary of the Company, was party to a credit agreement (as amended from time to time, the “Credit Agreement”) for a senior secured credit facility (the “Senior Secured Credit Facilities”).

The Senior Secured Credit Facilities consist of a $1.19 billion term loan facility (the “Term Loan Facility”) and a $35.0 million revolving credit facility (the “Revolving Credit Facility”).

The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.0 million.

The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023.

As of December 31, 2020, the average interest rate on the Term Loan Facility was 3.5%.

The Credit Agreement for our Senior Secured Credit Facilities requires the “Borrower” and its subsidiaries to comply on a quarterly basis with a maximum Total Leverage Ratio (as defined in the Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding) is greater than 30% of the aggregate amount of the Revolving Lenders’ Revolving Commitments (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding), as defined in the Credit Agreement.

As of December 31, 2020, we were not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold.

To the extent that we are unable to comply with the maximum Total Leverage Ratio in the future, we would be unable to borrow under the Revolving Credit Facility and may need to seek alternative sources of financing in order to operate and finance our business as we deem appropriate.

The Company’s borrowing capacity under the Revolving Credit Facility at December 31, 2020 was limited to $29.1 million of borrowings.

We were in compliance with all applicable debt covenants at December

31, 2020 and 2019.

On June 30, 2020, the Borrower made a $9.6 million voluntary principal payment on the Term Loan Facility.

Additionally, the Borrower is required to prepay the term loan borrowings in an aggregate amount up to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio.

As of December 31, 2020, we were not required to make an additional excess cash flow payment.

As of December 31, 2021 and 2020, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, was party to separate credit agreements (the “New Credit Agreement” as of December 31, 2021 and, as amended from time to time, the “Previous Credit Agreement” as of December 31, 2020) for senior secured credit facilities (the “New Senior Secured Credit Facilities” as of December 31, 2021, the “Previous Senior Secured Credit Facilities” as of December 31, 2020, and collectively the “Senior Secured Credit Facilities”).

The New Senior Secured Credit Facilities consist of a $1.400 billion term loan facility (the “New Term Loan Facility”) and a $65.0 million revolving credit facility (the “New Revolving Credit Facility”).

The Previous Senior Secured Credit Facilities consisted of a $1.195 billion term loan facility (the “Previous Term Loan Facility”) and a $35.0 million revolving credit facility (the “Previous Revolving Credit Facility”).

In June 2021, concurrently with the closing of the New Credit Agreement, we replaced the Previous Senior Secured Credit Facilities with the full amount available under the New Term Loan Facility and paying an additional $61.4 million from cash on hand, resulting in an overall reduction of outstanding principal of $38.6 million.

For this New Credit Agreement, approximately 85% of the principal balance of the Previous Term Loan Facility was considered a debt modification when replaced with the New Term Loan Facility and, as such, this modified portion was not considered a financing cash outflow or inflow.

In December 2021, the Borrower entered into an amendment to the New Credit Agreement to borrow an additional $300.0 million on the New Term Loan Facility.

The New Term Loan Facility requires mandatory principal payments in equal quarterly installments of $2.8 million, which commenced in June 2021, and, as a result of the additional $300.0 million of borrowings in December 2021, was revised to equal mandatory quarterly installments of $3.5 million.

The New Revolving Credit Facility matures in June 2026, and the New Term Loan Facility matures in June 2028.

As of December 31, 2021, the average interest rate on the New Term Loan Facility was 3.39%.

The Credit Agreement for our New Senior Secured Credit Facilities requires the “Borrower” and its subsidiaries to comply on a quarterly basis with a maximum Total Net Leverage Ratio (as defined in the New Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time is greater than 35% of the total commitment on the New Revolving Credit Facility (excluding (i) up to $15.0 million attributable to any outstanding undrawn letters of credit and (ii) any cash collateralized or backstopped letters of credit), as defined in the New Credit Agreement.

As of December 31, 2021, we were not subject to this covenant as borrowings under the New Revolving Credit Facility did not exceed the 35% threshold.

To the extent that we are unable to comply with the maximum Total Net Leverage Ratio in the future, we would be unable to borrow under the Revolving Credit Facility and may need to seek alternative sources of financing in order to operate and finance our business as we deem appropriate.

Our borrowing capacity under the New Revolving Credit Facility at December 31, 2021 was limited to $60.1 million of borrowings, with no borrowings outstanding and $4.9 million subject to outstanding letters of credit.

At December 31, 2021, we would have met this covenant if we had exceeded the 35% threshold.

We were in compliance with all applicable debt covenants at December 31, 2021 and 2020.

Additionally, the Borrower is required to prepay the term loan borrowings in an aggregate amount up to 50% of excess cash flow, as defined in the New Credit Agreement, for such fiscal year depending on the Total Net Leverage Ratio beginning with the year ended December 31, 2022.

We are not subject to an additional excess cash flow payment relating to 2021 under the New Term Loan Facility and we were not required to make an additional excess cash flow payment relating to 2020 under the Previous Term Loan Facility.

See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the Senior Secured Credit Facilities.

Floor Plan Facility

As of December 31, 2020 and 2019, FreedomRoads, LLC (“FR”), an indirect subsidiary of the Company, maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (as amended, the “Floor Plan Facility”).

On October 8, 2019, FR entered into a Second Amendment to the Seventh Amended and Restated Credit Agreement, (the “Second Amendment’).

The applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR.

At December 31, 2020, the Floor Plan Facility allowed FR to borrow (a) up to $1.38 billion under a floor plan facility, (b) up to $15.0 million under a letter of credit facility and (c) up to a maximum amount outstanding of $48.0 million under the revolving line of credit, which maximum amount outstanding decreases by $3.0 million on the last day of each fiscal quarter.

The maturity date of the Floor Plan Facility is March 15, 2023.

On May 12, 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement (“Third Amendment”) that provides FR with a one-time option to request a temporary four-month reduction (“Current Ratio Reduction Period”) of the minimum Consolidated Current Ratio (as defined in the Floor Plan Facility) at any time during 2020 and the first seven days of 2021.

In September 2021, FreedomRoads, LLC (“FR”) entered into the Eighth Amended and Restated Credit Agreement (“Post-Amendment Floor Plan Facility”) that amended the Seventh Amended and Restated Credit Agreement (“Pre-Amendment Floor Plan Facility” and collectively the “Floor Plan Facility”) that was previously entered into in December 2017.

The Post-Amendment Floor Plan Facility allows FR to borrow (a) up to $1.70 billion of floor plan notes payable, an increase from $1.38 billion under the Pre-Amendment Floor Plan Facility, (b) up to $30.0 million under a letter of credit facility, an increase from $15.0 million under the Pre-Amendment Floor Plan Facility, and (c) up to a maximum amount outstanding of $70.0 million under the revolving line of credit, an increase from $42.0 million under the Pre-Amendment Floor Plan Facility.

The Post-Amendment Floor Plan Facility removes the $3.0 million quarterly reduction in the maximum amount outstanding under the revolving line of credit under the Pre-Amendment Floor Plan Facility.

The Post-Amendment Floor Plan Facility also includes an accordion feature allowing FR, at its option, to increase the aggregate amount of the floor plan notes payable in $50 million increments up to a maximum amount of $200 million.

The lenders under the Post-Amendment Floor Plan Facility are not under any obligation to provide commitments in respect of any such increase.

In addition, the maturity of the Post-Amendment Floor Plan Facility was extended to September 2026 from March 2023 under the Pre-Amendment Floor Plan Facility.

The Post-Amendment Floor Plan Facility may continue to be used to finance (i) up to 100% of our new RV inventory, and (ii) various percentages of our used RV inventory, as determined by reference to the most recently published National Automobile Dealers Association RV Industry Appraisal Guide.

Additionally, we may borrow, repay and reborrow under the revolving line of credit for general corporate purposes.

As of December 31, 2021 and 2020, the applicable interest rate for the floor plan notes payable under the Floor Plan Facility was 1.96% and 2.20%, respectively.

Effective October 1, 2021 under the Post-Amendment Floor Plan Facility, at the Company’s option, the floor plan notes payable, and borrowings for letters of credit, in each case, under the Post-Amendment Floor Plan Facility bear interest at a rate per annum equal to the floating Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.90% to 2.50% determined based on FR’s consolidated current ratio, or, the base rate plus the applicable rate of 0.40% to 1.00% determined based on FR’s consolidated current ratio.

The one-month BSBY rate was 0.06% as of December 31, 2021.

Prior to October 1, 2021 under the Pre-Amendment Floor Plan Facility, the applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR and the borrowings under the floor plan credit agreement bore interest at one-month LIBOR plus 2.05% as of December 31, 2020.

LIBOR was 0.15% as of December 31, 2020.

As of December 31, 2021 and 2020, the applicable interest rate for revolving line of credit borrowings under the Floor Plan Facility was 2.31% and 2.55%.

Effective October 1, 2021 under the Post-Amendment Floor Plan Facility, revolving line of credit borrowings bear interest at a rate per annum equal to, at the Company’s option, either:

(a) a floating BSBY rate, plus 2.25%, in the case of floating BSBY rate loans, or (b) a base rate determined by reference to the greatest of:

(i) the federal funds rate plus 0.50%, (ii) the prime rate published by Bank of America, N.A.

and (iii) the floating BSBY rate plus 1.75%, plus 0.75%, in the case of base rate loans.

Additionally, under the Post-Amendment Floor Plan Facility, the revolving line of credit borrowings are limited by a borrowing base calculation.

The applicable interest rate for the revolving line of credit borrowings under the Pre-Amendment Floor Plan Facility was based on one month LIBOR plus 2.40%.

An additional $20.0 million of borrowings on the revolving line of credit was made in November 2021 and was paid off in December 2021.

In May 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement (“Third Amendment”) that provided FR with a one-time option to request a temporary four-month reduction (“Current Ratio Reduction Period”) of the minimum Consolidated Current Ratio (as defined in the Floor Plan Facility) at any time during 2020 and the first seven days of 2021.

FR did not exercise that option.

During the Current Ratio Reduction Period, the applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 3.00% and 0.55% and 1.50%, respectively, based on the Consolidated Current Ratio at FR.

From May 12, 2020 through July 31, 2020, FR was not allowed to draw further Revolving Credit Loans (as defined in the Floor Plan Facility).

On June 29, 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit.

The borrowings under the floor plan credit agreement bear interest at one-month LIBOR plus 2.05% as of December 31, 2020 and at one-month LIBOR plus 2.15% for the years ended December 31, 2019 and December 31, 2018.

LIBOR was 0.15%, 1.71% and 2.35% as of December 31, 2020, 2019, and 2018, respectively.

From May 12, 2020 through July 31, 2020, FR was not allowed to draw further Revolving Credit Loans (as defined in the Pre-Amendment Floor Plan Facility).

In June 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit.

The credit agreement governing the Floor Plan Facility contains certain financial covenants, which we were in compliance with at December 31, 2021 and 2020.

See Note 4 – Inventories, net and Notes Payable — Floor Plan, net to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the Floor Plan Facility.

Real Estate Facility

As of December 31, 2020 and 2019, Camping World Property, Inc.

(the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), was party to a loan and security agreement for a real estate credit facility with an aggregate maximum principal amount of $21.5 million (“Real Estate Facility”).

The Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants which we were in compliance with at December 31, 2020 and 2019.

The outstanding principal of the Real Estate Facility was $4.5 million and $19.7 million as of December 31, 2020 and 2019, respectively.

As of December 31, 2020, the interest rate on the Real Estate Facility was 3.00% with a commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facility.

As of December 31, 2020, the Company had zero additional capacity under the Real Estate Facility.

See Note 4 – Inventories and Floor Plan Payables to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the outstanding amounts, available borrowings, and terms of the Floor Plan Facility.

Real Estate Facilities

In November 2018, September 2021, and December 2021, Camping World Property, Inc.

(the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), entered into loan and security agreements for real estate credit facilities (as amended from time to time, the “First Real Estate Facility”, the “Second Real Estate Facility”, and the “Third Real Estate Facility”, respectively, and collectively the “Real Estate Facilities”) with aggregate maximum principal capacities of $21.5 million, $9.0 million, and $10.1 million for the First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility, respectively.

The First Real Estate Facility, the Second Real Estate Facility, and Third Real Estate Facility mature in October 2023, September 2026, and December 2026, respectively.

As of December 31, 2021, the First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility had outstanding principal balances of $4.2 million, $8.7 million, and $10.0 million, respectively, net of unamortized finance costs, with an overall weighted interest rate of 2.89%.

As of December 31, 2021, the Company had no available capacity under the Real Estate Facilities.

As of December 31, 2021 and 2020, the interest rate on the Real Estate Facilities, as applicable, was 2.75% and 3.00%, respectively, with a commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facilities.

As of December 31, 2021 and 2020, the Company had zero additional capacity under the Real Estate Facilities.

In August 2020, we entered into an agreement to lease an owned property for a former distribution center in Greenville, North Carolina to a third party.

By entering into this lease, we were required to pay down $10.3 million of the Real Estate Facility, which we paid in August 2020.

By entering into this lease, we were required to pay down $10.3 million of the First Real Estate Facility, which we paid in August 2020.

Additionally, in September 2020, the Company sold an owned property relating to the other former distribution center in Greenville, North Carolina to a third party.

By selling this property, the Company was required to pay down $3.4 million of the Real Estate Facility in September 2020.

See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the Real Estate Facility.

By selling this property, the Company was required to pay down $3.4 million of the First Real Estate Facility in September 2020.

The Real Estate Facilities are subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants which we were in compliance with at December 31, 2021 and 2020.

See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the Real Estate Facilities.

Other Long-Term Debt

In December 2021, FRHP Lincolnshire, LLC, an indirect wholly-owned subsidiary of CWGS, LLC, assumed a mortgage as part of a real estate acquisition.

As of December 31, 2021, the outstanding principal balance of the mortgage was $3.4 million with an interest rate of 3.50%.

The mortgage matures in December 2026.

See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the other long-term debt.

Sale/Leaseback Arrangements

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Deferred revenue is expected to be recognized as revenue as set forth in the following table (in thousands):

Contractual Obligations

The following table sets forth our contractual obligations and commercial commitments as of December 31, 2020 (in thousands):

Long-term debt (1)

Interest on long-term debt (2)

Finance lease obligations (3)

Floor plan notes payable, net (4)

Floor plan revolving line of credit

Interest on revolving line of credit

Operating lease obligations

Purchase obligations (5)

Tax Receivable Agreement liability (6)

Service agreements (7)

Marketing sponsorships (8)

(1) Amounts exclude finance lease obligations.

(2) We estimated interest payments through the maturity of our Senior Secured Credit Facilities by applying the interest rate in effect as of December 31, 2020.

See Note 9 — Long-Term Debt to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(3) Amounts represent undiscounted cash flows for property and equipment finance leases.

See Note 10 — Lease Obligations to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(4) Floor plan notes payable, net are revolving financing arrangements and the Floor Plan Facility matures on March 15, 2023.

Payments are generally made as required pursuant to the Floor Plan Facility discussed above under “— Description of Senior Secured Credit Facilities and Floor Plan Facility — Floor Plan Facility.”

(5) Amounts primarily represent purchase commitments relating to the procurement of RV inventories that have been approved by the Floor Plan Facility.

See Note 4 — Inventories, net and Notes Payable — Floorplan to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(6) Amounts represent the estimated payments under the Tax Receivable Agreement.

See Note 11 — Income Taxes to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(7) Service agreements are multi-year agreements for services at agreed upon amounts for each year.

See Note 13 — Commitments and Contingencies to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

(8) Marketing sponsorship agreements are multi-year sponsorship agreements at agreed upon amounts each year per the agreements.

See Note 13 — Commitments and Contingencies to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.

Off-Balance Sheet Arrangements

As of December 31, 2020, we did not have any off-balance sheet arrangements other than short-term leases not included in our lease obligation.

We do not have transactions with unconsolidated entities, such as entities often referred to as structured finance or special purpose entities, whereby we have financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to us.

Recent Accounting Pronouncements

See discussion of recently adopted and recently issued accounting pronouncements in Note 1 — Summary of Significant Accounting Policies to our consolidated financial statements in Part II, Item 8 of this Form 10-K.

Critical Accounting Policies and Estimates

Critical Accounting Estimates

We prepare our consolidated financial statements in conformity with GAAP.

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Incidental items that are immaterial in the context of the contract are recognized as expense.

The Company’s contracts with customers may include multiple

performance obligations.

The Company’s contracts with customers may include multiple performance obligations.

For such arrangements, the Company allocates revenue to each performance obligation based on its relative stand-alone selling price.

The Company generally determines stand-alone selling prices based on the prices charged to customers or using the adjusted market assessment approach.

The Company generally determines stand-alone

selling prices based on the prices charged to customers or using the adjusted market assessment approach.

The Company presents disaggregated revenue on its consolidated statements of operations.

Good Sam Services and Plans revenue consists of revenue from publications, consumer shows, and marketing fees from various consumer services and plans.

Good Sam Services and Plans revenue consists of revenue from publications, and marketing fees from various consumer services and plans.

Roadside Assistance (“RA”) revenues are deferred and recognized over the contractual life of the membership.

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The chargeback liabilities included in the estimate of variable consideration totaled $68.8 million and $58.9 million as of December 31, 2021 and December 31, 2020, respectively.

If cancellation rates on products sold during 2021 and 2020 were to increase by 100 basis points, our chargeback liabilities would have increased by $5.2 million as of December 31, 2021.

Good Sam Club revenue consists of revenue club membership fees and royalty fees from co-branded credit cards.

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These retail installment sales contracts are typically funded within ten days of the initial approval of the retail installment sales contract by the third-party lender.

Contracts in transit are included in current assets in our consolidated financial statements and totaled $48.2 million and $44.9 million as of December 31, 2020, and December 31, 2019, respectively.

Contracts in transit are included in current assets in our consolidated financial statements and totaled $57.7 million and $48.2 million as of December 31, 2021 and 2020, respectively.

Inventories, net

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Finite-lived intangibles are recorded at cost, net of accumulated amortization and, if applicable, impairment charges.

Finite-lived intangible assets consist of membership and customer lists with weighted average useful lives of approximately 5.3 years, trademarks and trade names with weighted average useful lives of approximately 15.0 years, supplier lists with weighted-average useful lives of 5.0 years, and websites with weighted-average useful lives of approximately 8.3 years.

Finite-lived intangible assets consist of membership and customer lists with weighted average useful lives of approximately 5.9 years, and websites are 7.0 years.

The approximate weighted average useful lives of our RV and Outdoor Retail finite-lived intangibles assets are as follows:

customer lists and domain names are 7.3 years, suppliers lists are 5.0 years, trademarks and trade names are 11.2 years, and websites are 7.8 years.

The weighted-average useful life of all our finite-lived intangible assists is approximately 9.8 years.

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We do not capitalize preliminary project costs, nor do we capitalize training, data conversion costs, maintenance or post development stage costs.

Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an

asset may not be recoverable.

Our long-lived assets are

reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Our long-lived asset groups exist predominantly at the individual location level and the associated impairment analysis involves the comparison of an asset group’s estimated future undiscounted cash flows over its remaining useful life to its respective carrying value, which primarily includes furniture, equipment, leasehold improvements, and operating lease assets.

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corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21% and eliminating certain deductions.

For the year ended December 31, 2020, there were no significant impacts on estimated values of the Tax Receivable Agreement liability and the Company’s deferred tax assets as a result of any recent tax law changes.

For the year ended December 31, 2021, there were no significant impacts on estimated values of the Tax Receivable Agreement liability and the Company’s deferred tax assets as a result of any recent tax law changes, other than increased state tax rates as a result of being subject to combined filing groups due to new unitary relationships.

CWH’s increased ownership in CWGS, LLC and other qualitative unity factors impacted the unitary relationships.

We are subject to U.S.

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Amounts payable under the Tax Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws.

If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments.

generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA Payments.

Therefore, we would only recognize a liability for TRA Payments if we determine if it is probable that we will generate sufficient future taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits.

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In projecting future taxable income, we consider our historical results and incorporate certain assumptions, including projected retail location openings, revenue growth, and operating margins, among others.

As of December 31, 2020, our Tax Receivable Agreement liability was recorded at $145.9 million after decreasing the liability by $0.1 million in the year ended December 31, 2020 to reflect our future tax benefit primarily as a result of the reduction in enacted state income tax rates.

As of December 31, 2021, our Tax Receivable Agreement liability was recorded at $182.4 million after increasing the liability by $2.8 million in the year ended December 31, 2021 to reflect our future tax benefit primarily as a result of an increase in enacted state income tax rates.

During the year ended December 31, 2021, the Tax Receivable Agreement liability was further adjusted to reflect new transactions, net of cash payments made.

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This determination is based on our estimate of taxable income for the next fiscal year.

To the extent our estimate differs from actual results, we may be required reclassify portions of our liabilities under the Tax Receivable Agreement between current and non-current.

To the extent our estimate differs from actual results, we may be required to reclassify portions of our liabilities under the Tax Receivable Agreement between current and non-current.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis