What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-24 compared with 2021-02-26 · 445 added, 399 removed, 1161 unchanged (42% of the section changed)

4 unchanged sentences

Years Ended December 31, 2021, 2020, and 2019

Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Financial Statements

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Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Deficit

Consolidated Statements of Stockholders’ Equity (Deficit )

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of Camping World Holdings, Inc.

and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders' deficit, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and the schedules listed in the Index at Item 15(a)(2) (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedules listed in the Index at Item 15(a)(2) (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company changed its method of accounting for leasing transactions in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases , using the modified retrospective approach.

Basis for Opinion

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The Company acts as an agent in selling certain insurance and service contracts with multi-year terms to customers on behalf of third-party insurance providers.

The proceeds the Company receives for selling these contracts are subject to chargebacks of such proceeds if the customer terminates the respective contract earlier than a stated period.

The proceeds the Company receives for selling these

contracts are subject to chargebacks of such proceeds if the customer terminates the respective contract earlier than a stated period.

These customer proceeds are recorded as variable consideration, net of estimated chargebacks.

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The Company’s long-lived asset groups are comprised of property and equipment, net, and operating lease right-of-use assets (“ROU assets”) that exist predominantly at the individual location level (a “location”).

For locations identified with carrying values not recoverable by future undiscounted cash flows, impairment charges are measured based on the excess of carrying value over the location’s fair value, subject to certain limitations.

For locations identified with carrying values not recoverable by future undiscounted cash flows, impairment charges are measured based on the excess of the carrying value over the location’s fair value, subject to certain limitations.

Fair value is determined, as applicable, as the sum of the discounted projected future cash flows from the use of the location’s assets.

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As a result, the measurement of any impairment loss includes estimation of the fair value of the location’s ROU assets, which requires management to consider estimates of market rental rates based on comparable lease transactions.

As of December 31, 2020, the Company had $367.9 million in property and equipment, net and $769.5 million in ROU assets.

As of December 31, 2021, the Company had $599.3 million in property and equipment, net, and $750.9 million in operating lease ROU assets.

During the year ended December 31, 2021, the Company recognized $3.0 million of long-lived asset impairments.

We identified the impairment of the carrying value of long-lived assets as a critical audit matter.

For locations with indicators of impairment, a high degree of auditor judgment and an increased extent of effort was required when performing audit procedures to evaluate the reasonableness of management’s estimates of projected future cash flows and market rental rates, including the use of valuation specialists in evaluating management’s estimates of market rental rates and in identifying comparable market rental rate assumptions based on the specific geographic areas and characteristics of the respective locations.

For locations with impairment indicators, a high degree of auditor judgment and an increased extent of effort was required when performing audit procedures to evaluate the reasonableness of management’s estimates of projected future cash flows and market rental rates, including the use of valuation specialists in evaluating management’s estimates of market rental rates and in identifying comparable market rental rate assumptions based on the specific geographic areas and characteristics of the respective location.

How the Critical Audit Matter Was Addressed in the Audit

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Contracts in transit

Accounts receivable, less allowance for doubtful accounts of $ 3,393 and $ 3,537 in 2020 and 2019, respectively

Accounts receivable, net

Prepaid expenses and other assets

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Intangible assets, net

Liabilities and stockholders' deficit

Liabilities and stockholders' equity (deficit)

Current liabilities:

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Current portion of operating lease liabilities

Current portion of finance lease liabilities

Current portion of Tax Receivable Agreement liability

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Operating lease liabilities, net of current portion

Finance lease liabilities, net of current portion

Tax Receivable Agreement liability, net of current portion

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Commitments and contingencies

Stockholders' deficit:

Stockholders' equity (deficit):

Preferred stock, par value $ 0.01 per share – 20,000,000 shares authorized;

none issued and outstanding as of December 31, 2020 and December 31, 2019

none issued and outstanding as of December 31, 2021 and 2020

Class A common stock, par value $ 0.01 per share – 250,000,000 shares authorized;

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Class B common stock, par value $ 0.0001 per share – 75,000,000 shares authorized;

69,066,445 issued as of December 31, 2020 and December 31, 2019;

and 45,999,132 and 50,706,629 outstanding as of December 31, 2020 and December 31, 2019

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2020 and December 31, 2019

69,066,445 issued as of December 31, 2021 and 2020;

and 41,466,964 and 45,999,132 outstanding as of December 31, 2021 and 2020

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2021 and 2020

Additional paid-in capital

Treasury stock, at cost;

572,447 and 0 shares as of December 31, 2020 and December 31, 2019

Retained deficit

Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc.

3,390,131 and 572,447 shares as of December 31, 2021 and 2020

Retained earnings (deficit)

Total stockholders' equity attributable to Camping World Holdings, Inc.

Non-controlling interests

Total stockholders' deficit

Total liabilities and stockholders' deficit

Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

See accompanying Notes to Consolidated Financial Statements

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Depreciation and amortization

Goodwill impairment

Long-lived asset impairment

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

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Tax Receivable Agreement liability adjustment

Other expense, net

Total other expense

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and Subsidiaries

Consolidated Statements of Stockholders’ Deficit

Consolidated Statements of Stockholders’ Equity (Deficit)

(In Thousands)

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Treasury Stock

Earnings (Deficit)

Balance at January 1, 2019

Adoption of ASC 606 accounting standard (see Note 2 — Revenue)

Adoption of ASC 842 accounting standard (see Note 1 — Summary of Significant Accounting Policies)

Equity-based compensation

Exercise of stock options

Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options

Vesting of restricted stock units

Repurchases of Class A common stock for withholding taxes on vested RSUs

Disgorgement of short-swing profits by Section 16 officer

Redemption of LLC common units for Class A common stock

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Balance at December 31, 2019

Adoption of ASC 842 accounting standard (see Note 1 — Summary of Significant Accounting Policies)

Equity-based compensation

Exercise of stock options

Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options

Vesting of restricted stock units

Repurchases of Class A common stock for withholding taxes on vested RSUs

Repurchases of Class A common stock to treasury stock

Redemption of LLC common units for Class A common stock

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Treasury Stock

Earnings (Deficit)

Equity-based compensation

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Repurchases of Class A common stock for withholding taxes on vested RSUs

Stock award to employee

Repurchases of Class A common stock for withholding taxes on stock award to employee

Repurchases of Class A common stock to treasury stock

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Equity-based compensation

Loss on debt restructure

Loss (gain) on lease termination

Goodwill impairment

Loss on debt restructure

Long-lived asset impairment

Loss on disposal of assets

(Gain) loss on sale or disposal of assets

Provision for losses on accounts receivable

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Payment pursuant to Tax Receivable Agreement

Accrued rent for cease-use locations

Deferred revenue

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Purchases of property and equipment

Proceeds from sale of property and equipment

Purchase of real property

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Purchases of businesses, net of cash acquired

Purchase of other investments

Purchase of equity securities

Proceeds from sale of property and equipment

Purchases of intangible assets

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Payments on long-term debt

Net payments on notes payable – floor plan, net

Net proceeds (payments) on notes payable – floor plan, net

Borrowings on revolving line of credit

Payments on revolving line of credit

Payments on finance leases

Payment of debt issuance costs

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RSU shares withheld for tax

Stock award shares withheld for tax

Repurchases of Class A common stock to treasury stock

Disgorgement of short-swing profits by Section 16 officer

Distributions to holders of LLC common units

Net cash (used in) provided by financing activities

Increase (decrease) in cash and cash equivalents

Net cash provided by (used in) financing activities

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

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The IPO and related reorganization transactions that occurred on October 6, 2016 resulted in CWH as the sole managing member of CWGS, LLC, with CWH having sole voting power in and control of the management of CWGS, LLC (see Note 18 — Stockholders’ Equity).

Despite its position as sole managing member of CWGS, LLC, CWH has a minority economic interest in CWGS, LLC.

Despite its position as sole managing member of CWGS, LLC, CWH had a minority economic interest in CWGS, LLC through March 11, 2021.

As of December 31, 2021, 2020, and 2019, CWH owned 51.2 %, 47.4 % and 42.0 %, respectively, of CWGS, LLC.

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To date, COVID-19 has surfaced in nearly all regions of the world and resulted in travel restrictions and business slowdowns or shutdowns in affected areas.

Many affected areas have begun the process of easing restrictions and reopening certain businesses often under new operating guidelines, although new waves of infection may lead to an increase in such restrictions or closures.

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.

Many affected areas have made significant progress with the easing of restrictions and reopening certain businesses often under new operating guidelines, although new waves of infection or the spread of new variants may lead to an increase in such restrictions or closures.

In conjunction with the initial 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 a significant improvement 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.

In order to offset the initially expected adverse impact of COVID-19 and better align expenses with reduced sales in the middle of March 2020 and early April 2020, the Company temporarily reduced salaries and hours throughout the business, including for its executive officers, and implemented headcount and other cost reductions.

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

The Company also negotiated lease payment deferrals with numerous landlords amounting to approximately $ 14.0 million from 2020 into 2021.

As demand for all products accelerated and the Company’s cash position improved, the Company repaid these rent deferrals in full prior to June 30, 2020.

The Company has also taken steps to add new private label lines, expand its relationships with smaller recreational vehicle (“RV”) manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

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.

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

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

In order to offset the initially expected adverse impact of COVID-19 and better align expenses with reduced sales in the middle of March 2020 and early April 2020, the Company reduced marketing expenses and temporarily reduced salaries and hours throughout the business, including for its executive officers, and implemented headcount and other cost reductions.

Most of these temporary salary and hourly reductions ended

in May 2020 as the adverse economic impacts of the pandemic began to decline.

The Company has also taken steps to add new private label lines, expand its relationships with smaller recreational vehicle (“RV”) manufacturers, and acquire used inventory to help manage risks in its supply chain.

Throughout the pandemic, the majority of the Company’s retail locations have continued to operate as essential businesses and the Company has continued to operate its e-commerce business.

As a consequence of COVID-19, the Company had held fewer consumer shows and events during 2020 than in 2019.

Historically, most of the Company’s consumer shows and events take place during the first quarter.

As a consequence of COVID-19, the Company held one in-person consumer show in 2021 and held fewer in-person consumer shows and events during 2020 than in 2019.

Since March 2020, the Company has implemented preparedness plans to keep its 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 directives for a significant portion of the Company’s workforce.

In July 2021, the Company began transitioning many of its employees from work-from-home schedules to a return to the Company’s 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.

Description of the Business

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(i) Good Sam Services and Plans and (ii) RV and Outdoor Retail.

See Note 22 – Segments Information for further information about the Company’s segments.

Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings:

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commissions on the finance and insurance contracts related to the sale of RVs;

the sale of RV services and maintenance work;

the sale of RV service and collision work;

the sale of RV parts, accessories, and supplies;

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In 2019, the Company made a strategic decision to refocus its business around its core RV competencies, and on September 3, 2019, the board of directors approved a strategic plan to shift the business away from locations that did not have the ability or where it was not feasible to sell and/or service RVs (the “2019 Strategic Shift”) (see Note 5 – Restructuring and Long-lived Asset Impairment).

This resulted in the sale, closure or divestiture of 34 non-RV retail stores and the liquidation of approximately $ 108 million of non-RV related inventory in 2019.

The table below summarizes the Company’s retail store openings, closings, divestitures, conversions and number of locations from December 31, 2020 to December 31, 2021:

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Closed / divested

Temporarily closed (1)

Converted (1)

Number of store locations as of December 31, 2021

(1) These locations are temporarily closed in response to the COVID-19 pandemic.

(1) One RV dealership was converted to a retail clearance center.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

and expenses during the reporting period.

Actual results may differ from those estimates.

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The carrying amount approximates fair value because of the short-term maturity of these instruments.

Outstanding checks that are in excess of the cash balances at certain banks are included in accrued liabilities in the consolidated balance sheets, and changes in the amounts are reflected in operating cash flows in the accompanying consolidated statement of cash flows.

Outstanding checks that are in excess of the cash balances at certain banks are included in accrued liabilities in the accompanying consolidated balance sheets, and changes in the amounts are reflected in operating cash flows in the accompanying consolidated statement of cash flows.

Contracts in Transit, Accounts Receivable and Current Expected Credit Losses

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Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts, which includes a reserve for expected credit losses.

Accounts receivable balances due in excess of one year was $ 8.2 million at December 31, 2020 and $ 8.6 million at December 31, 2019, which are included in other assets in the consolidated balance sheets.

Accounts receivable balances due in excess of one year was $ 7.8 million at December 31, 2021 and $ 8.2 million at December 31, 2020, which are included in other assets in the accompanying consolidated balance sheets.

The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts.

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Relevant risk characteristics include customer size and historical loss patterns.

Management has evaluated the expected credit losses related to contracts in transit and determined that no allowance for doubtful accounts was required at December 31, 2020.

No allowance for doubtful accounts related to contracts in transit was required at December 31, 2019.

Management has evaluated the expected credit losses related to contracts in transit and determined that no allowance for doubtful accounts was required at December 31, 2021 and 2020.

Management additionally has evaluated the expected credit losses related to accounts receivable and determined that allowances of approximately $ 4.7 million as of December 31, 2021 and $ 3.4 million as of December 31, 2020 for uncollectible accounts were required.

The following table details the changes in the allowance for doubtful accounts (in thousands):

Additionally, there was a less than $ 0.1 million allowance for doubtful accounts for noncurrent receivables at December 31, 2021 recognized during the year ended December 31, 2021.

The following table details the changes in the allowance for doubtful accounts relating to current receivables (in thousands):

Allowance for doubtful accounts:

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For vehicles accepted in trades, the cost is the fair value of such used vehicles at the time of the trade-in.

Products, parts, accessories, and other inventories primarily consist of retail travel and leisure specialty merchandise and are stated at lower of cost or net realizable value.

Products, parts, accessories, and other inventories primarily consist of retail travel and leisure specialty merchandise and are stated at lower of cost or net realizable value using the first in, first out method.

The cost of RV and Outdoor Retail inventories primarily consists of the direct cost of the merchandise including freight.

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Leasehold improvements are amortized over the useful lives of the assets or the remaining term of the respective lease, whichever is shorter.

After the adoption of Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) on January 1, 2019 the Company recognizes a right-of-use (“ROU”) asset and a lease liability on the balance sheet for operating leases (with the exception of short-term leases based on the practical expedient elected by the Company) at the commencement date, in addition to finance leases that were previously also required to be recognized on the balance sheet, and recognizes expenses on the income statement in a similar manner to the previous guidance in ASC 840, Leases (“ASC 840”) (see Note 10 — Lease Obligations).

After the adoption of Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) on January 1, 2019 the Company recognizes a right-of-use (“ROU”) asset and a lease liability on the accompanying consolidated balance sheets for operating leases (with the exception of short-term leases based on the practical expedient elected by the Company) at the commencement date, in addition to finance leases that were previously also required to be recognized on the accompanying consolidated balance sheets, and recognizes expenses on the income statement in a similar manner to the previous guidance in ASC 840, Leases (“ASC 840”) (see Note 10 — Lease Obligations).

Goodwill and Other Intangible Assets

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RA claim expenses are recognized when incurred.

Marketing fees for finance, insurance, extended service and other similar products are recognized as variable consideration, net of estimated cancellations, if applicable, when a product contract payment has been received

or financing has been arranged.

Marketing fees for finance, insurance, extended service and other similar products are recognized as variable

consideration, net of estimated cancellations, if applicable, when a product contract payment has been received or financing has been arranged.

These marketing fees are recorded net as the Company acts as an agent in the transaction.

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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.

The remaining RV and Outdoor retail revenue consists of sales of products, service and other products, including RV accessories and supplies, RV furniture, camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport equipment and supplies.

The remaining RV and Outdoor retail revenue consists of sales of products, service and other, including RV accessories and supplies, RV furniture, camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport equipment and supplies.

Revenue from products, service and other is recognized over time as work is completed, and when parts or other products are delivered to the Company’s customers.

For service and parts revenues recorded over time, the Company utilizes a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time.

E-commerce sales are recognized when the product is shipped and recorded as variable consideration, net of anticipated merchandise returns which reduce revenue and cost of sales in the period that the related sales are recorded.

E-commerce sales are recognized when the product is shipped and recorded as variable consideration, which is net of anticipated merchandise returns that reduce revenue and cost of sales in the period that the related sales are recorded.

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

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Royalty revenue is earned under the terms of an arrangement with a third-party credit card provider based on a percentage of the Company’s co-branded credit card portfolio retail spending with such third-party credit card provider and for acquiring new cardholders.

The Company does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period of time between payment

and transfer of the promised goods or services will be one year or less.

The Company expenses sales commissions when incurred in cases where the amortization period of those otherwise capitalized sales commissions would have been one year or less.

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The Company maintains a reserve for internal work order profits on vehicles that remain in inventories.

Advertising Expense

Advertising Expenses

Advertising expenses are expensed as incurred.

Advertising expenses for the years ended December 31, 2021, 2020 and 2019 were $ 136.3 million, $ 96.3 million and $ 117.8 million, respectively.

Advertising expenses relating to RV and Outdoor Retail segment were included in selling, general and administrative expenses in the consolidated statements of operations.

Advertising expenses relating to the Good Sam Services and Plans segment were included in costs applicable to revenues in the consolidated statements of operations, since, by the nature of those revenue streams, they are integral to the generation of those revenues.

Vendor Allowances

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When income tax rates increase or decrease, a corresponding adjustment to income tax expense is recorded by applying the rate change to the cumulative temporary differences.

The Company recognizes the tax benefit from an uncertain tax position in accordance with accounting guidance on accounting for uncertainty in income taxes.

The Company recognizes the tax benefit from an uncertain tax position in accordance with accounting guidance on accounting for uncertainty in income

The Company classifies interest and penalties relating to income taxes as income tax expense.

See Note 11 — Income Taxes for additional information.

Reclassifications of Prior Period Amounts

Certain prior-period amounts have been reclassified to conform to the current period presentation.

Specifically, the current and noncurrent portions of finance lease liabilities have been reclassified to be presented separately from current and noncurrent portions of long-term debt, respectively, in the accompanying consolidated balance sheet as of December 31, 2020.

Further, the payments on finance leases have been reclassified to be presented separately from payments on long-term debt in the accompanying consolidated statement of cash flows for the years ended December 31, 2020 and 2019.

Additionally, for the years ended December 31, 2020 and 2019, the equity-based compensation and non-controlling interest adjustment line items in the accompanying consolidated statements of stockholders' equity (deficit) have been reclassified to present the equity-based compensation allocated to the non-controlling interest in the non-controlling interest column with an offsetting reclassification to the non-controlling interest adjustment line item.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”).

This standard requires the use of a forward-looking expected loss impairment model for trade and other receivables, held-to-maturity debt securities, loans and other instruments.

This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded through an allowance account and revises certain disclosure requirements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements, which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries when estimating the allowance.

In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, which allows entities with an option to elect fair value for certain instruments upon adoption of Topic 326.

The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted ASU 2016-13 on January 1, 2020 and the adoption did not materially impact its condensed consolidated financial statements.

In August 2018, the FASB issued ASU No.

2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”).

This standard aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e., hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software.

The ASU permits either a prospective or retrospective transition approach.

The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted ASU 2018-15 on January 1, 2020 using the prospective transition approach and the adoption did not materially impact its condensed consolidated financial statements.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”).

This standard, effective for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., London Interbank Offered Rate (“LIBOR”)) with a new alternative reference rate.

The guidance is applicable to investment securities, receivables, loans, debt, leases, derivatives and hedge accounting elections and other contractual arrangements.

The Company adopted ASU 2020-04 as of January 1, 2020 and the adoption did not materially impact its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU No.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2019-12, Income Taxes (Topic 740):

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This standard also simplifies accounting for franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods.

The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The ASU permits either a retrospective basis or a modified retrospective transition approach.

The Company does not expect that the adoption of the provisions of this ASU will have a material impact on its consolidated financial statements.

The Company adopted ASU 2019-12 as of January 1, 2021 and the adoption did not materially impact its consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”).

This standard requires contract assets and contract liabilities, such as certain receivables and deferred revenue, acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.

Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree instead of recording those balances at fair value.

This standard should be applied prospectively to acquisitions occurring after the effective date.

The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted.

The Company early adopted ASU 2021-08 as of January 1, 2022 and the Company does not expect that its adoption will materially impact its consolidated financial statements.

Contract Assets

As of December 31, 2020 and 2019, a contract asset of $ 8.1 million and $ 6.1 million, respectively, relating to RV service revenues was included in accounts receivable in the accompanying consolidated balance sheet.

As of December 31, 2021 and 2020, a contract asset of $ 16.2 million and $ 8.1 million, respectively, relating to RV service revenues was included in accounts receivable in the accompanying consolidated balance sheets.

As of December 31, 2021 and 2020, the Company had capitalized costs to acquire a contract consisting of $ 5.4 million and $ 7.1 million, respectively, from the deferral of sales commissions expenses relating to multi-year consumer services and plans and the recording of such expenses over the same period as the recognition of the related revenues.

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For the year ended December 31, 2021, $ 88.2 million of revenues recognized were included in the deferred revenue balance at the beginning of the period.

As of December 31, 2020, the Company has unsatisfied performance obligations primarily relating to multi-year plans for its roadside assistance, Good Sam Club memberships, Coast to Coast memberships, the annual campground guide, and magazine publication revenue streams.

For the year ended December 31, 2020, $ 87.1 million of revenues recognized were included in the deferred revenue balance at the beginning of the period.

As of December 31, 2021, the Company had unsatisfied performance obligations primarily relating to plans for its roadside assistance, Good Sam Club memberships, Coast to Coast memberships, the annual campground guide, and magazine publication revenue streams.

The total unsatisfied performance obligation for these revenue streams at December 31, 2021 and the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands):

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For certain products or services and customer types, the Company requires payment before the products or services are delivered to the customer.

Receivables consisted of the following at December 31, (in thousands):

Receivables consisted of the following at December 31, 2021 and 2020 (in thousands):

Good Sam Services and Plans

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Allowance for doubtful accounts

Inventories, net and Notes Payable — Floor Plan, net

Inventories consisted of the following at December 31, (in thousands):

Inventories and Floor Plan Payables

Inventories consisted of the following at December 31, 2021 and 2020 (in thousands):

Good Sam services and plans

Products, parts, accessories and other

New RV inventory included in the RV and Outdoor Retail segment is primarily financed by a floor plan credit agreement with a syndication of banks.

The borrowings under the floor plan credit agreement are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a wholly-owned subsidiary of FreedomRoads, which operates the RV dealerships, and 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.

Substantially all of the Company’s new RV inventory and certain of its used RV inventory, included in the RV and Outdoor Retail segment, is financed by a floor plan credit agreement with a syndication of banks.

The floor plan borrowings are tied to specific vehicles and principal is due upon the sale of the related vehicle or upon reaching certain aging criteria.

As of December 31, 2020 and 2019, FR maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (“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.

The Floor Plan Facility at December 31, 2020 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 further 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 at any time during 2020 and the first seven days of 2021.

In September 2021, 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.

As 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, 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.

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 %, respectively.

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 %.

In May 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement that provided FR with a one-time option to request a temporary four-month reduction of the minimum consolidated current ratio 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.

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

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

These transfers reduce the amount of liability outstanding under the floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the FLAIR offset account into the Company’s operating cash accounts.

Effective 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).

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

These transfers reduce the amount of liability outstanding under the floor plan borrowings that would otherwise accrue interest, while retaining the ability to transfer amounts from the FLAIR offset account into the Company’s operating cash accounts.

As a result of using the FLAIR offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of operations.

As of December 31, 2020 and December 31, 2019, FR had $ 133.6 million and $ 87.0 million, respectively, in the FLAIR offset account.

The Third Amendment raised the maximum FLAIR percentage of outstanding floor plan borrowings from 20 % to 30 % for the period of May 12, 2020 through August 31, 2020 before returning to 20 %.

Management has determined that the credit agreement governing the Floor Plan Facility includes subjective acceleration clauses, which could impact debt classification.

As of December 31, 2021 and 2020, FR had $ 92.1 million and $ 133.6 million, respectively, in the FLAIR offset account.

The Post-Amendment Floor Plan Facility raised the maximum FLAIR percentage of outstanding floor plan borrowings to 35 % from 20 % under the Pre-Amendment Floor Plan Facility.

Management has determined that the credit agreements governing the Floor Plan Facility include subjective acceleration clauses, which could impact debt classification.

Management has determined that no events have occurred at December 31, 2021 that would trigger a subjective acceleration clause.

Additionally, the credit agreement governing the Floor Plan Facility contains certain financial covenants.

Additionally, the credit agreements governing the Floor Plan Facility contain certain financial covenants.

FR was in compliance with all debt covenants at December 31, 2021 and December 31, 2020.

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

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

An additional $ 20.0 million of borrowing on the revolving line of credit was made in November 2021 and was repaid in December 2021.

The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of December 31, 2021 and December 31, 2020 (in thousands):

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borrowings, net

( 1,011,345 )

flooring line aggregate interest reduction account

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On September 3, 2019, the board of directors of CWH approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service RVs at a sufficient capacity (the “Outdoor Lifestyle Locations”).

Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company has closed or divested 39 Outdoor Lifestyle Locations, three distribution centers, and 20 specialty retail locations through December 31, 2020.

One of the aforementioned closed distribution centers was reopened during the three months ended June 2020 and repurposed for online order fulfillment.

As of December 31, 2020, the Company has completed the store closures and divestitures relating to the 2019 Strategic Shift.

One of the aforementioned closed distribution centers was reopened during the three months ended June 2020.

As of December 31, 2020, the Company had completed the store closures and divestitures relating to the 2019 Strategic Shift.

As part of the 2019 Strategic Shift, the Company evaluated the impact on its supporting infrastructure and operations, which included rationalizing inventory levels and composition, closing certain distribution centers, and realigning other resources.

The Company had a reduction of headcount and labor costs for those locations that were closed or divested and the Company incurred material charges associated with the activities contemplated under the 2019 Strategic Shift.

During the year ended December 31, 2021, the Company completed its analysis of its retail product offerings that are not RV-related.

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 Note 1 — Summary of Significant Accounting Policies — COVID-19).

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

As of December 31, 2021, the Company has effectively finalized its 2019 Strategic Shift as it relates to closing locations, one-time termination benefits, and incremental reserve charges.

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.

The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift to be in the range of $ 111.6 million to $ 134.6 million.

The breakdown of the estimated restructuring costs are as follows:

● one-time employee termination benefits relating to retail store or distribution center closures/divestitures of $ 1.2 million, all of which has been incurred through December 31, 2020;

● one-time employee termination benefits relating to retail store or distribution center closures/divestitures of $ 1.2 million, all of which was incurred through December 31, 2020;

● lease termination costs of $ 18.0 million to $ 34.0 million, of which $ 13.5 million has been incurred through December 31, 2021;

● incremental inventory reserve charges of $ 42.4 million, all of which has been incurred through December 31, 2020;

● incremental inventory reserve charges of $ 57.4 million, all of which was incurred through December 31, 2021;

● other associated costs of $ 35.0 million to $ 42.0 million, of which $ 31.8 million has been incurred through December 31, 2021.

Through December 31, 2021, the Company has incurred $ 31.8 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 842, Leases, prior to lease termination.

The Company intends to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases.

The additional amount of $ 3.2 million to $ 10.2 million represents similar costs that may be incurred through the year ending December 31, 2022 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842, Leases, prior to lease termination.

The Company intends 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, 2022 on these leases if the Company is unable to terminate the leases under acceptable terms or offset the lease costs through sublease arrangements.

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

For the years 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.

The following table details changes in the restructuring accrual associated with the 2019 Strategic Shift (in thousands):

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Balance at December 31, 2020

(1) Lease termination costs excludes the $ 1.3 million and the $ 6.1 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019 and for the year ended December 31, 2020, respectively.

Charged to expense

Paid or otherwise settled

Balance at December 31, 2021

(1) Lease termination costs excludes the $ 1.3 million, $ 6.1 million and $ 0.2 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019 and for the years ended December 31, 2020 and 2021, respectively.

The Company evaluated the requirements of ASC No.

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Long-Lived Asset Impairment

During the year ended December 31, 2020, the Company had indicators of impairment of the long-lived assets for certain of its locations.

During the years ended December 31, 2021, 2020 and 2019, the Company had indicators of impairment of the long-lived assets for certain of its locations.

For locations that failed the recoverability test based on an analysis of undiscounted cash flows, the Company estimated the fair value of the locations based on a discounted cash flow analysis.

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For most of these locations, the operating lease right-of-use assets and furniture and equipment were written down to their individual fair values and the remaining impairment charge was allocated to the remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.

During the year ended December 31, 2020, the Company identified indicators of impairment at previously closed stores in certain markets.

After performing the long-lived asset impairment test using updated assumptions for these locations, the Company determined that 19 locations within the RV and Outdoor Retail segment had long-lived assets that were impaired.

The Company recorded the following long-lived asset impairment charges:

$ 2.4 million related to leasehold improvements, $ 2.6 million related to furniture and equipment, $ 1.5 million related to buildings, and $ 5.9 million operating lease right-of-use assets.

Of the $ 12.4 million long-lived asset impairment charge during the year ended December 31, 2020, $ 12.3 million related to the 2019 Strategic Shift discussed above.

For the year ended December 31, 2019, the Company recorded the following long-lived asset impairment charges:

$ 20.8 million related to leasehold improvements, $ 28.6 million related to furniture and equipment, and $ 16.9 million operating lease right-of-use assets.

Of the $ 66.3 million long-lived asset impairment charge during the year ended December 31, 2019, $ 57.4 million was related to the 2019 Strategic Shift discussed above.

The following table details long-lived asset impairment charges by type of long-lived asset (in thousands):

Year Ended December 31,

Long-lived asset impairment charges:

Leasehold improvements

Furniture and equipment

Operating lease right-of-use assets

Total long-lived asset impairment charges

portion unrelated to 2019 Strategic Shift

2019 Strategic Shift long-lived asset impairment charges

Long-lived asset impairment charges during the years ended December 31, 2021 and 2020 related primarily to the result of updating impairment test assumptions after identifying indicators of impairment at previously closed stores in certain markets.

Property and Equipment, net

Property and equipment consisted of the following at December 31, (in thousands):

Property and equipment consisted of the following at December 31, 2021 and 2021 (in thousands):

Buildings and improvements

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Furniture and equipment

Software systems development and construction in progress

Construction in progress and software in development

accumulated depreciation and amortization

Property and equipment, net

(1) At December 31, 2020 inclusive of right-to-use assets

Depreciation expense for the years ended December 31, 2021, 2020, and 2019 was $ 61.6 million, $ 47.4 million and $ 54.7 million, respectively .

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Balance as of January 1, 2020

Acquisitions (1)

Transfers of assets between reporting units

Divestitures (2)

Balance as of December 31, 2020

Acquisitions (1)(3)

Balance as of December 31, 2021

Represents measurement period adjustments relating to prior period acquisitions (see Note 15 — Acquisitions).

Goodwill was allocated to 13 specialty retail locations within the RV and Outdoor Retail segment based on relative fair value.

These 13 specialty retail locations were divested in 2019.

(3) Represents current period acquisitions (see Note 15 — Acquisitions).

The Company evaluates goodwill for impairment on an annual basis as of the beginning of the fourth quarter, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite-lived intangible assets might be impaired.

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If the carrying amount of a reporting unit exceeds its fair value, then the Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds its fair value.

As of January 1, 2019, the Company transferred certain assets related to the Good Sam Club and co-branded credit card from GSS Enterprises, LLC (“GSS”) within the Good Sam Services and Plans segment to

(“CWI”) within the RV and Outdoor Retail segment.

This resulted in a transfer of $ 26.5 million of goodwill from the Good Sam Services and Plans segment to the RV and Outdoor Retail segment based on relative fair value as of January 1, 2019 of the portion of the reporting unit transferred.

During the three months ended March 31, 2020, the Company determined that a triggering event for an interim goodwill impairment test of its RV and Outdoor Retail reporting unit had occurred as a result of the decline in the market price of the Company’s Class A common stock and the potential impact of COVID-19 on the Company’s business.

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The Company estimated the fair value of these reporting units using a combination of the guideline public company method under the market approach and the discounted cash flow analysis method under the income approach.

In the fourth quarter of 2018, the Company performed its annual goodwill impairment test, which resulted in the determination that the carrying value of the former Retail reporting unit, which was comprised of the entire Retail segment as previously reported, exceeded its estimated fair value by an amount that exceeded the reporting unit’s goodwill balance.

The excess of the carrying value over the estimated fair value of this reporting unit was primarily due to a decline in segment income leading to lower expected future cash flows for this reporting unit.

The Company recorded an impairment charge of $ 40.0 million in the fourth quarter of 2018 related to this reporting unit.

The former Retail reporting unit goodwill was reduced to zero .

Additionally in the fourth quarter of 2018, the Company performed its annual goodwill impairment test of the Dealership reporting unit, which was comprised of the entire former Dealership segment as previously reported and the Good Sam Show and GSS Enterprise reporting units, which was comprised a portion of the Good Sam Services and Plans segment as previously reported.

The Company did not record any impairment of goodwill for the Dealership, Good Sam Show and GSS Enterprise reporting units during the year ended December 31, 2018.

Intangible Assets

Finite-lived intangible assets and related accumulated amortization consisted of the following at December 31, (in thousands):

Finite-lived intangible assets and related accumulated amortization consisted of the following at December 31, 2021 and 2020 (in thousands):

December 31, 2021

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Customer lists and domain names

Supplier lists

Trademarks and trade names

As of December 31, 2020, the approximate weighted average useful lives of our Good Sam Services and Plans finite-lived intangible assets for membership and customer lists are 5.4 years.

As of December 31, 2021, the approximate weighted average useful lives of our Good Sam Services and Plans finite-lived intangible assets for membership and customer lists are 5.9 years, and websites are 7.0 years.

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

customer lists and domain names – 5.3 years, suppliers lists – 5.0 years, trademarks and trade names – 15.0 years, and websites – 8.3 years.

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 assets is approximately 9.8 years.

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Accrued Liabilities

Accrued liabilities consisted of the following at December 31, (in thousands):

Accrued liabilities consisted of the following at December 31, 2021 and 2020 (in thousands):

Compensation and benefits (1)

Other accruals

(1) At December 31, 2020, this amount includes a deferral of payroll taxes under the CARES act of $ 14.6 million.

(1) At December 31, 2021 and 2020, these amounts included a deferral of payroll taxes under the CARES Act of $ 14.6 million.

Long-Term Debt

The following reflects outstanding long-term debt as of December 31 (in thousands):

The following reflects outstanding long-term debt as of December 31, 2021 and 2020 (in thousands):

Term Loan Facility (1)(2)

Finance Lease Liabilities (2)

Real Estate Facility (3)

Real Estate Facilities (3)

Other Long-Term Debt

current portion

(1) Amounts as of December 31, 2021 relate to the New Term Loan Facility and amounts as of December 31, 2020 relate to the Previous Term Loan Facility, as defined below.

(2) Net of $ 16.8 million and $ 3.2 million of original issue discount at December 31, 2021 and 2020, respectively, and $ 6.9 million and $ 7.9 million of finance costs at December 31, 2021 and 2020, respectively.

(2) Consists of three real estate parcels with long-term leases and IT equipment contracts, which contain lease components that extend through the majority of the useful life of the asset.

Certain IT equipment contracts also contain purchase options at the end of the term, which are likely to be exercised (see Note 10 – Lease Obligations).

(3) Net of $ 0.2 million of finance costs at December 31, 2021.

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Long-term debt instruments

Finance Leases (1)

(1) Current portion of finance leases was $ 2.2 million at December 31, 2020.

See Note 10 - Lease Obligation.

Senior Secured Credit Facilities

As of December 31, 2020 and 2019, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, 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 funds available under the Revolving Credit Facility may be utilized for borrowings or letters of credit;

however, a maximum of $ 15.0 million may be allocated to such letters of credit.

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

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

Additionally, the Company 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.

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

As of December 31, 2020, the Company is not required to make an additional excess cash flow payment.

As of December 31, 2020, the average interest rate on the Term Loan Facility was 3.50 %.

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”).

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, the Company 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.

During the year ended December 31, 2021, loss and expense on debt restructure of $ 13.5 million was comprised of $ 0.4 million in extinguishment of the original issue discount, $ 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 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 funds available under the New Revolving Credit Facility may be utilized for borrowings or letters of credit;

however, a maximum of $ 25.0 million may be allocated to such letters of credit compared to a maximum of $ 15.0 million that may have been allocated to such letters of credit under the Previous Revolving Credit Facility.

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

The New Term Loan Facility required mandatory principal payments in equal quarterly installments of $ 2.8 million commencing 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 mandatory equal quarterly installments under the Previous Term Loan Facility were $ 3.0 million.

Additionally, the Company 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 (as defined in the New Credit Agreement) beginning with the year ended December 31, 2022.

The Company is not subject to an additional excess cash flow payment relating to 2021 under the New Term Loan Facility and was not required to make an additional excess cash flow payment relating to 2020 under the Previous Term Loan Facility.

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

Under the New Senior Secured Credit Facilities, the Company has the ability to increase the amount of term loans or revolving loans in an aggregate amount not to exceed the greater of (a) a “fixed” amount set at $ 725.0 million and (b) 100 % of consolidated EBITDA for the most recent four consecutive fiscal quarters on a pro forma basis (as defined in the New Credit Agreement).

The lenders under the New Senior Secured Credit Facilities are not under any obligation to provide commitments in respect of any such increase.

As of December 31, 2021, the average interest rate on the New Term Loan Facility was 3.25 % .

The following table details the outstanding amounts and available borrowings under the Senior Secured Credit Facilities as of (in thousands):

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unamortized original issue discount

finance costs

unamortized finance costs

current portion

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outstanding letters of credit

availability reduction due to Total Leverage Ratio

Additional borrowing capacity

The Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR and its subsidiaries.

The Credit Agreement contains certain restrictive covenants pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the prepayment of dividends subject to certain limitations and minimum operating covenants.

Additionally, management has determined that the Senior Secured Credit Facilities include subjective acceleration clauses, which could impact debt classification.

(1) Amounts relate to the New Senior Secured Credit Facilities.

(2) Amounts relate to the Previous Senior Secured Credit Facilities.

The New Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR, and its subsidiaries.

The New Credit Agreement contains certain restrictive covenants pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the prepayment of dividends subject to certain limitations and minimum operating covenants.

Additionally, management has determined that the New Senior Secured Credit Facilities include subjective acceleration clauses, which could impact debt classification.

Management has determined that no events have occurred at December 31, 2021 that would trigger a subjective acceleration clause.

The Credit Agreement 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.

The New Credit Agreement requires the Borrower and its subsidiaries to comply on a quarterly basis with a maximum Total Net Leverage Ratio, 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, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 35 % threshold.

The Company was in compliance with all applicable debt covenants at December 31, 2021 and 2020.

Real Estate Facility

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

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

Borrowings under the Real Estate Facility are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC.

The Real Estate Facility may be used to finance the acquisition of real estate assets.

The Real Estate Facility is secured by first priority security interest on the real estate assets acquired with the proceeds of the Real Estate Facility (“Real Estate Facility Properties”).

The Real Estate Facility matures on October 31, 2023.

As of December 31, 2020, a principal balance of $ 4.5 million was outstanding under the Real Estate Facility, and the interest rate 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 and December 31, 2019, the Company had no available capacity under the Real Estate Facility.

In August 2020, the Company 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, the Company was required to pay down $ 10.3 million of the Real Estate Facility, which was 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.

Management has determined that the credit agreement governing the Real Estate Facility includes subjective acceleration clauses, which could impact debt classification.

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.

Borrowings under the Real Estate Facilities are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC.

The Real Estate Facilities may be used to finance the acquisition of real estate

The Real Estate Facilities are secured by first priority security interest on the real estate assets acquired with the proceeds of the Real Estate Facilities (“Real Estate Facility Properties”).

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, the Second Real Estate Facility, and the 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, and a weighted average interest rate of 2.89 %.

As of December 31, 2021, the Company had no available capacity under the Real Estate Facilities, since repaid amounts cannot be reborrowed under the Real Estate Facilities.

Management has determined that the credit agreements governing the Real Estate Facilities include subjective acceleration clauses, which could impact debt classification.

Management has determined that no events have occurred at December 31, 2021 that would trigger a subjective acceleration clause.

Additionally, the Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants.

Additionally, the Real Estate Facilities are subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants.

The Company was in compliance with all debt covenants at December 31, 2021 and 2020.

Finance Lease Liabilities

The Company’s finance lease liabilities consist of three real estate parcels with long-term leases and IT equipment contracts, which contain lease components that extend through the majority of the useful life of the asset.

Certain IT equipment contracts also contain purchase options at the end of the term, which are likely to be exercised (see Note 10 — Lease Obligations).

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.

This mortgage is secured by the acquired property and is guaranteed by CWGS Group, LC, a wholly-owned subsidiary of CWGS, LLC.

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.

Lease Obligations

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Many of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate.

The Company aggregates non-

lease components with the related lease components when evaluating the accounting treatment for property, equipment, and billboard leases.

The Company aggregates non-lease components with the related lease components when evaluating the accounting treatment for property, equipment, and billboard leases.

Many of the Company’s lease agreements include fixed rental payments.

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The Company cannot readily determine the rate implicit in its leases.

Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease

commencement.

The Company estimates its incremental borrowing rate using a yield curve based on the credit rating of its collateralized debt and maturities that are commensurate with the lease term at the applicable commencement or remeasurement date.

The Company leases most of the properties for its retail locations through 254 operating leases.

The Company also leases billboards and certain of its equipment primarily through operating leases.

The related operating lease assets for these operating leases are included in operating lease assets.

The Company has three properties classified as finance leases.

The following presents components of lease assets and lease liabilities, and the associated financial statement line items ($ in thousands):

Year Ended December 31,

Lease Assets and Liabilities

Financial Statement Line Items

Operating lease assets

Finance lease assets

Property and equipment, net

Total lease assets, net

Operating lease liabilities - current

Current portion of operating lease liabilities

Finance lease liabilities - current

Current portion of long-term debt

Operating lease liabilities - non-current

Operating lease liabilities, net of current portion

Finance lease liabilities - non-current

Long-term debt, net of current portion

Total lease liabilities

The Company leases most of the properties for its retail locations through 240 operating leases and 9 finance leases.

The Company also leases billboards and certain of its equipment.

The related operating lease assets and finance lease assets are included in the operating lease assets and property equipment, respectively, in the accompanying consolidated balance sheets.

As of December 31, 2021 and 2020, finance lease assets of $ 75.7 million and $ 29.8 million, respectively, were included in property and equipment, net in the accompanying consolidated balance sheets.

The following presents certain information related to the costs for leases (in thousands):

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New, remeasured and terminated operating leases

New finance leases

New, remeasured and terminated finance leases

The following presents other information related to leases:

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Financing leases

The following reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities on the balance sheet as of December 31, 2020 (in thousands):

The following reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the lease liabilities in the accompanying consolidated balance sheet as of December 31, 2021 (in thousands):

Total lease payments

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Noncurrent lease obligations

The components of the Company’s income tax expense from operations for the year ended December 31, consisted of (in thousands):

The components of the Company’s income tax expense from operations for the years ended December 31, 2021, 2020 and 2019 consisted of (in thousands):

Income tax expense

A reconciliation of income tax expense from operations to the federal statutory rate for the year ended December 31, is as follows (in thousands):

A reconciliation of income tax expense from operations to the federal statutory rate for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):

Income taxes computed at federal statutory rate (1)

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Other differences:

Federal alternative minimum tax and state and local taxes on pass-through entities

State and local taxes on pass-through entities

Income taxes computed at the effective federal and state statutory rate for pass-through entities not subject to tax for the Company (2)

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Increase in valuation allowance due to transfer of assets (3)

Increase in valuation allowance

(Decrease) increase in valuation allowance (4)

Impact of other state tax rate changes

Goodwill impairment

Income tax expense

(1) Federal and state income tax for 2019 and 2018 include the tax effect of $ 2.5 million of income tax benefit and $ 0.3 million of income tax expense, respectively, relating to the revaluation in the Tax Receivable Agreement liability.

(1) Federal and state income tax for 2021 and 2019 includes $ 0.7 million of income tax expense and $ 2.5 million of income tax benefit, respectively, relating to the revaluation in the Tax Receivable Agreement liability due to fluctuations in state income tax rates.

The amount related to 2020 was insignificant.

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(3) These amounts represent the net income tax expense of $ 12.2 million (composed of an increase in the valuation allowance against the Company’s overall deferred tax assets of $ 26.4 million, offset by the income tax benefit associated with the transferred assets of $ 14.2 million) related to the transfer of certain assets, including the Good Sam Club and co-branded credit cards as discussed below.

(4) As a result of CWH’s ownership of CWGS increasing above 50 % during the first quarter of 2021, the amount for the year ended December 31, 2021 included a decrease in the valuation allowance of Camping World Inc.

(“CW”) in certain state deferred tax assets of $ 15.2 million.

Additionally, for the year ended December 31, 2021 , this amount was partially offset by $ 13.0 million of increases to the valuation allowance primarily resulting from losses of CW for which no benefit is recognized for the U.S.

federal and non-unitary states.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss and tax credit carryforwards.

Significant items comprising the net deferred tax assets at December 31, were (in thousands):

Significant items comprising the net deferred tax assets at December 31, 2021 and 2020 were (in thousands):

Deferred tax liabilities

Accelerated depreciation

Prepaid expenses

Intangible assets

Operating lease assets

Lease incentives

Deferred tax assets

Investment impairment

Inventory-related

Deferred revenues

Accrual for employee benefits and severance

Stock option expense

Investment in partnership ("Outside Basis Deferred Tax Asset") (1)

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Net operating loss carryforward

Intangible assets

Deferred depreciation

Operating lease liabilities

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The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws.

For the year ended December 31, 2020, there were no material impacts to the Company’s consolidated financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $ 29.2 million as of December 31, 2020, of which $ 14.6 million was included in other current liabilities and $ 14.6 million was included in other long-term liabilities in the consolidated balance sheets.

At December 31, 2020, the Company determined that all of its deferred tax assets (except those of Camping World Inc.

(“CW”) and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized.

The valuation allowance for CW increased by $ 19.7 million in the year ended December 31, 2020, compared to an increase of $ 79.7 million in the year ended December 31, 2019, primarily as a result of increased operating losses incurred during 2020.

Since it was determined that CW would not have sufficient taxable income in the current or carryforward periods under the tax law to realize the future tax benefits of its deferred tax assets, it continues to maintain a full valuation allowance.

For the years ended December 31, 2021 and 2020, there were no material impacts to the Company’s consolidated

financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $ 29.2 million for the year ended December 31, 2020 of which $ 14.6 million was paid during the year ended December 31, 2021 and $ 14.6 million was included in accrued liabilities in the accompanying consolidated balance sheet at December 31, 2021.

At December 31, 2021, the Company determined that all of its deferred tax assets (except those of CW and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized.

The valuation allowance for CW decreased by $ 3.9 million in the year ended December 31, 2021, compared to an increase of $ 19.7 million in the year ended December 31, 2020, primarily as a result of 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 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.

federal and non-unitary state jurisdictions.

The Company maintains a partial valuation allowance against the Outside Basis Deferred Tax Asset pertaining to the portion that is not amortizable for tax purposes, since the Company would likely only realize the non-amortizable portion of the Outside Basis Deferred Tax Asset if the investment in CWGS, LLC was divested.

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federal, state, and local income tax examinations by tax authorities for years before 2018.

As of December 31, 2020 and 2019, the Company recorded $ 2.7 million and $ 0.3 million, respectively, related to uncertain tax positions.

As of December 31, 2021 and 2020, the balance of the Company’s uncertain tax positions was $ 2.9 million and $ 2.7 million, respectively.

The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12 months.

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The Company recognized a liability for the Tax Receivable Agreement payments due to those parties that redeemed common units, representing 85 % of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the exchange, after concluding it was probable that the Tax Receivable Agreement payments would be paid based on estimates of future taxable income.

As of December 31, 2020, and December 31, 2019, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $ 145.9 million and $ 114.8

million, respectively, of which $ 8.1 million and $ 6.6 million, respectively, were included in current portion of the Tax Receivable Agreement liability in the consolidated balance sheets.

From January 1, 2021 to February 17, 2021, Crestview Partners II GP, L.P.

As of December 31, 2021, and December 31, 2020, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $ 182.4 million and $ 145.9 million, respectively, of which $ 11.3 million and $ 8.1 million, respectively, were included in current portion of the Tax Receivable Agreement liability in the accompanying consolidated balance sheets.

From January 1, 2021 to December 31, 2021, Crestview Partners II GP, L.P.

has redeemed 4.0 million common units in CWGS, LLC for 4.0 million shares of the Company’s Class A common stock as a result of transactions pursuant to a trading plan.

The estimated increase in deferred tax assets, the non-current portion of the Tax Receivable Agreement liability, and additional paid-in capital resulting from these redemptions is $ 13.3 million, $ 11.3 million, and $ 2.0 million, respectively.

Also from January 1, 2021 and December 31, 2021, CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by each of Stephen Adams, a member of Camping World’s board of directors, and Marcus Lemonis, the Company’s Chairman and Chief Executive Officer, exchanged 540,699 common units in CWGS, LLC for 540,699 shares of the Company’s Class A common stock.

Payments pursuant to the Tax Receivable Agreement relating to these redemptions would begin during the year ended December 31, 2022.

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The following table presents the reported carrying value and fair value information for the Company’s debt instruments.

The fair values shown below for the Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2) and the fair values shown below for the Floor Plan Facility, the Revolving Line of Credit, and the Real Estate Facility are estimated by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.

The fair values shown below for the Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2) and the fair values shown below for the Floor Plan Facility Revolving Line of Credit, the Real Estate Facilities and the Other Long-Term Debt are estimated by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.

December 31, 2021

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Floor Plan Facility Revolving Line of Credit

Real Estate Facility

Real Estate Facilities

Other Long-Term Debt

Commitments and Contingencies

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Current sponsorship agreements run through 2024.

The agreements consist of annual fees payable in aggregate of $ 11.6 million in 2021, $ 14.5 million in 2022, $ 5.6 million in 2023, and $ 4.5 million in 2024, which are recognized to expense over the expected benefit period.

The Company entered into a subscription agreement for a customer relationship management software application in 2014.

The subscription agreement was amended on October 28, 2016 and again October 18, 2017.

The amended subscription agreement for future software services consists of annual fees payable as follows:

$ 4.5 million in 2019, $ 4.8 million in 2020, and $ 5.0 million in 2021.

The agreements consist of annual fees payable in aggregate of $ 18.2 million in 2022, $ 5.8 million in 2023, $ 4.7 million in 2024, $ 0.3 million in 2025, $ 0.3 million in 2026 and $ 0.8 million thereafter, which are recognized to expense over the expected benefit period.

The Company enters into subscription agreements from time to time.

Currently there are sixteen subscription agreements for future software services consisting of annual fees payable as follows:

$ 7.0 million in 2022, $ 3.1 million in 2023, $ 0.8 million in 2024, $ 0.8 million in 2025 and $ 0.8 million in 2026.

Expense is recognized ratably over the term of the agreement.

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The Company carries substantial premium-paid, traditional risk transfer insurance for various business risks.

The Company self-insures and establishes reserves for the retention on workers’ compensation insurance, general liability, automobile liability, professional errors and omission liability, and employee health claims.

The Company self-insures and establishes reserves for the retention on workers’ compensation insurance, general liability, automobile liability, and employee health claims.

The self-insured claims liability was approximately $ 22.3 million and $ 19.6 million at December 31, 2021 and 2020, respectively.

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As of December 31, 2021 and 2020, these letters of credit were approximately $ 16.4 million and $ 17.7 million, respectively.

This includes $ 11.7 million and $ 11.2 million as of December 31, 2020 and 2019, respectively, issued under the Floor Plan Facility (see Note 4 — Inventories, net and Notes Payable — Floor Plan, net), and the balance issued under the Company’s Senior Secured Credit Facilities (see Note 9 — Long-Term Debt).

This includes $ 11.5 million and $ 11.7 million as of December 31, 2021 and 2020, respectively, issued under the Floor Plan Facility (see Note 4 — Inventories and Floor Plan Payables), and the balance issued under the Company’s Senior Secured Credit Facilities (see Note 9 — Long-Term Debt).

On October 19, 2018, a purported stockholder of the Company filed a putative class action lawsuit, captioned Ronge v.

Camping World Holdings, Inc.

et al ., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P.

, in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P.

and Crestview Advisors, L.L.C.

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Camping World Holdings, Inc.

et al ., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P.

, in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P.

and Crestview Advisors, L.L.C.

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and Crestview Advisors, L.L.C., and the underwriters of the May and October 2017 secondary offerings of the Company’s Class A common stock (the “Consolidated Complaint”).

The Consolidated Complaint alleged violations of Sections 11 and 12(a)(2) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading related to the business, operations, and management of the Company.

Additionally, it alleged that certain of the Company’s officers and directors, Crestview Partners II GP, L.P., and Crestview Advisors, L.L.C.

violated Section 15 of the Securities Act of 1933 and Section 20(a) of the Securities Exchange Act of 1934, as amended, by allegedly acting as controlling persons of the Company.

On March 12, 2020, Ronge Lead Plaintiffs filed an Amended Consolidated Complaint, adding those allegations contained in the Geis Complaint (defined below).

On March 13, 2020 Ronge Lead Plaintiffs filed an unopposed motion for preliminary approval of class action settlement, which the Court granted on April 7, 2020.

On August 5, 2020, the Court granted final approval of the class action settlement and the case was dismissed with prejudice.

The settlement was paid directly by the Company’s insurance carriers.

On December 12, 2018, a putative class action complaint styled International Union of Operating Engineers Benefit Funds of Eastern Pennsylvania and Delaware v.

Camping World Holdings Inc ., et al.

was filed in the Supreme Court of the State of New York, New York County, on behalf of all purchasers of Camping World Class A common stock issued pursuant and/or traceable to a secondary offering of such securities in

October 2017 (“IUOE Complaint”).

The IUOE Complaint named as defendants the Company, and certain of its officers and directors, among others, and alleged violations of Sections 11, 12(a), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading.

On July 13, 2020, the parties entered into a confidential settlement agreement resolving the named plaintiff’s claims.

The putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved at the settlement hearing on August 5, 2020.

The Court entered an order of final dismissal on September 8, 2020.

On February 22, 2019, a putative class action complaint styled Daniel Geis v.

Camping World Holdings , Inc., et al .

was filed in the Circuit Court of Cook County, Illinois, Chancery Division, on behalf of all purchasers of Camping World Class A common stock in and/or traceable to the Company’s initial public offering on October 6, 2016 (“Geis Complaint”).

The Geis Complaint named as defendants the Company, certain of its officers and directors, and the underwriters of the offering, and alleged violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading.

The Geis plaintiff became a plaintiff in Ronge , and the Geis putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved on August 5, 2020.

The Court entered an order of final dismissal on August 18, 2020.

The deadline to appeal the settlement has passed and the settlement and this pending litigation is now final.

On March 5, 2019, a shareholder derivative suit styled Hunnewell v.

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On April 17, 2019, a shareholder derivative suit styled Lincolnshire Police Pension Fund v.

Camping World Holdings, Inc., et al ., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”).

Camping World Holdings, Inc., et al.

, was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”).

The LPPF Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks compensatory damages, extraordinary equitable and/or injunctive relief, restitution and disgorgement, attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On May 30, 2019, the Court granted the parties’ joint motion to consolidate the Hunnewell and LPPF Complaints (as well as any future filed actions relating to the subject matter) and stay the newly consolidated action pending the resolution of defendants’ motion to dismiss in the Ronge action.

On May 30, 2019, the Court granted the parties’ joint motion to consolidate the Hunnewell and LPPF Complaints

(as well as any future filed actions relating to the subject matter) and stay the newly consolidated action pending the resolution of defendants’ motion to dismiss in the Ronge action.

Following the Ronge court’s approval of settlement and entry of a final judgment and order dismissing the Ronge action with prejudice, on August 31, 2020, the parties filed a stipulation and proposed order designating the LPPF Complaint as the operative complaint in the consolidated action, and setting forth a schedule for defendants to respond to that Complaint, which the Court granted.

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On December 30, 2020, the Court granted the parties’ stipulated schedule for Plaintiffs to file an amended complaint.

On January 7, 2021, Plaintiffs filed their Amended Complaint, alleging substantially same claims and seeking the same relief.

Defendants’ response to the Amended Complaint is due to be filed on or before March 8, 2021.

On January 7, 2021, Plaintiffs filed an Amended Complaint, alleging substantially same claims and seeking the same relief.

On March 8, 2021, the Company, along with the other defendants, moved to dismiss the Amended Complaint.

Plaintiffs filed their opposition to Defendants’ motion to dismiss on June 4, 2021.

Defendants filed their reply in further support of their motion to dismiss on July 23, 2021.

On January 31, 2022, the Court granted in full Defendants’ motion to dismiss the Amended Complaint with prejudice.

On February 14, 2022, Plaintiffs filed a notice of appeal, appealing the Court’s order dismissing the Amended Complaint.

Plaintiffs’ opening brief is due March 31, 2022.

Defendants’ opposition is due May 2, 2022.

Plaintiffs’ reply in support is due May 17, 2022.

On August 6, 2019, two shareholder derivative suits, styled Janssen v.

Camping World Holdings, Inc., et al.

, and Sandler v.

Camping World Holdings, Inc., et al., and Sandler v.

Camping World Holdings, Inc.

et al., were filed in the U.S.

District Court of Delaware.

District Court for the District of Delaware.

Both actions name the Company as a nominal defendant, and name certain of the Company’s officers and directors, Crestview Partners II GP, L.P.

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(ii) violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, seeking contribution for causing the Company to issue allegedly false and misleading statements and/or allegedly omit material information in public statements and/or the Company’s filings concerning the Company’s financial performance, the effectiveness of internal controls to ensure accurate financial reporting, and the success and profitability of the integration and rollout of Gander Outdoors (now Gander RV) stores;

(iii) breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement for allegedly causing or allowing the Company to disseminate to Camping World

shareholders materially misleading and inaccurate information through the Company’s SEC filings;

(iii) breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement for allegedly causing or allowing the Company to disseminate to Camping World shareholders materially misleading and inaccurate information through the Company’s SEC filings;

and (iv) breach of fiduciary duties for alleged insider selling and misappropriation of information (together, the “Janssen and Sandler Complaints”).

The Janssen and Sandler Complaints seek restitutionary and/or compensatory damages, injunctive relief, disgorgement of all profits, benefits, and other compensation obtained by the certain of the Company’s officers and directors, attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On September 25, 2019, the Court granted the parties’ joint motion to consolidate the action and stay the action pending resolution of defendants’ motion to dismiss in the Ronge action.

The Janssen and Sandler Complaints seek restitutionary and/or compensatory damages, injunctive relief, disgorgement of all profits, benefits, and other compensation obtained by certain of the Company’s officers and directors, attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On September 25, 2019, the Court granted the parties’ joint motion to consolidate the Janssen and Sandler Complaints and stay the action pending resolution of defendants’ motion to dismiss in the Ronge action.

Following the Ronge court’s approval of settlement and entry of a final judgment and order dismissing the Ronge action with prejudice, the case remains stayed while the parties confer regarding the schedule for further proceedings in the action.

On May 28, 2020, Kamela Woodings (“Woodings”), in her representative capacity under the Private Attorney General Action (“PAGA”) filed a lawsuit styled Woodings v.

On June 22, 2021, FreedomRoads filed a one -count complaint captioned FreedomRoads Holding Company, LLC v.

Steve Weissmann in the Circuit Court of Cook County, Illinois against Steve Weissmann (“Weissmann”) for breach of contractual obligation under note guarantee (the “Note”).

On October 8, 2021, Weissmann brought a counterclaim against FreedomRoads and Third-Party Defendants Marcus Lemonis, NBCUniversal Media, LLC, the Consumer National Broadcasting Company, CWH, and Machete Productions (the “Weissmann Counterclaim”), in which he alleges claims in connection with the Note and his appearance on the reality television show The Profit.

Weissmann alleges the following causes of action against FreedomRoads and all third-party defendants, including CWH:

(ii) fraud in the inducement;

(iii) fraudulent concealment;

(iv) breach of fiduciary duty;

(v) defamation;

(vi) defamation per se;

(vii) false light;

(viii) intentional infliction of emotional distress;

(ix) negligence;

(v) unjust enrichment;

and (vi) RICO § 1962.

Weissmann seeks costs and damages in an amount to be proven at trial but no less than the amount in the Note (approximately $ 2.5 million);

in connection with his RICO claim, Weissmann asserts he is entitled to damages in the amount of three times the Note.

On October 19, 2021, the Court held a status hearing and ordered that FreedomRoads is not required to respond to the counterclaims until further notice of the Court, and set a status hearing for November 17, 2021.

On November 17, 2021, the court set another status hearing for January 19, 2022 to discuss next steps and a schedule for responses to the Weissmann Counterclaim.

On January 19, 2022 the court ordered the parties to file any Motion(s) to Compel Arbitration to be filed on or before February 18, 2022 and the corresponding briefing schedule and set a status hearing for April 14, 2022.

February 18, 2022, NBCUniversal, CNBC, and Machete filed a motion to compel arbitration (the “NBC Arbitration Motion”).

FreedomRoads, Marcus Lemonis, and Camping World, Inc.

filed a joinder to the NBC Arbitration Motion.

On November 10, 2021, Tumbleweed Tiny House Company, Inc.

filed a complaint regarding FreedomRoads, Marcus Lemonis, NBCUniversal Media, LLC, CWH, and Machete Productions in which Tumbleweed alleges claims in connection with the Note and its appearance on the reality television show The Profit.

Tumbleweed alleges the following claims against the defendants, including FreedomRoads and CWH:

(ii) false promise;

(iii) breach of fiduciary duty (and aiding and abetting the same);

(iv) breach of contract;

(v) breach of oral contract;

(vi) tortious interference with prospective economic advantage;

(vii) fraud in the inducement;

(viii) negligent misrepresentation;

(ix) fraudulent concealment;

(x) conspiracy;

(xi) unlawful business practices;

(xii) defamation;

and (xiii) declaratory judgment.

On January 14, 2022, NBCUniversal filed a motion to compel arbitration (the “Arbitration Motion”).

FreedomRoads, CWH, and Marcus Lemonis filed a joinder to the Arbitration Motion.

Machete also filed a joinder to the Arbitration Motion.

On May 28, 2020, Kamela Woodings (“Woodings”), in her representative capacity under the Private Attorney General Action (“Woodings PAGA Complaint”) filed a lawsuit styled Woodings v.

FreedomRoads, LLC in Los Angeles County Superior Court against FreedomRoads, LLC in which she alleged that she and the putative class members often performed off-the-clock work for which they were not adequately compensated, and alleged the following causes of action:

Violation of California Labor Code Sections 2698, et seq, (Private Attorney General Act of 2004), which includes allegations of (1) Failure to Pay Minimum Wage, (2) Failure to Pay Overtime, (3) Failure to Provide Meal Periods, (4) Failure to Provide Rest Breaks, (5) Failure to Timely Wage Upon Termination, (6) Failure to Timely Pay Wages During Employment, (7) Failure to Provide Complete And Accurate Wage Statements, and (8) Failure to Keep Accurate Business Records (the “PAGA Complaint”).

The PAGA Complaint seeks civil penalties and attorneys’ fees and costs pursuant to California Labor Code Section 2699.

Violation of California Labor Code Sections 2698, et seq, (Private Attorney General Act of 2004), which includes allegations of (1) Failure to Pay Minimum Wage, (2) Failure to Pay Overtime, (3) Failure to Provide Meal Periods, (4) Failure to Provide Rest Breaks, (5) Failure to Timely Pay Wage Upon Termination, (6) Failure to Timely Pay Wages During Employment, (7) Failure to Provide Complete And Accurate Wage Statements, and (8) Failure to Keep Accurate Business Records (the “PAGA Complaint”).

The Woodings PAGA Complaint seeks civil penalties and attorneys’ fees and costs pursuant to California Labor Code Section 2699.

On June 25, 2020, Woodings filed a class action complaint styled Woodings v.

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(10) Accounting;

and (11) Violation of California Business and Professions Code §§ 17200, et seq., with the following sub-claims of (a) Failure to Pay Overtime, (b) Failure to Provide Meal Periods, (c) Failure to Provide Rest Periods, (d) Failure to Pay Minimum Wages, (e) Failure to Timely Wage Upon Termination, (f) Failure to Timely Pay Wages During Employment, (g) Failure to Keep Complete and Accurate Payroll Records, and (h) Failure to Pay Commissions seeking certification as a class action, monetary damages including general unpaid wages, unpaid wages at overtime wage rates, premium wages for meal and rest breaks not provided, general and special damages, actual, consequential and incidental losses and damages, statutory wage penalties, punitive damages, pre-judgment interest, attorneys’ fees and costs, liquidated damages, and non-monetary damages including an accounting of FreedomRoads, LLC’s revenues, costs and profits in connection with each sale of goods made by the putative class members and the appointment of a receiver to receive, manage and distribute any funds disgorged from FreedomRoads, LLC as may be determined to have been wrongly acquired by FreedomRoads, LLC, and any other and further relief the court deems just and proper (“Class Action”).

On August 6, 2020, the Class Action was removed to the U.S.

and (11) Violation of California Business and Professions Code §§ 17200, et seq., with the following sub-claims of (a) Failure to Pay Overtime, (b) Failure to Provide Meal Periods, (c) Failure to Provide Rest Periods, (d) Failure to Pay Minimum Wages, (e) Failure to Timely Wage Upon Termination, (f) Failure to Timely Pay Wages During Employment, (g) Failure to Keep Complete and Accurate Payroll Records, and (h) Failure to Pay Commissions, seeking certification as a class action, monetary damages including general unpaid wages, unpaid wages at overtime wage rates, premium wages for meal and rest breaks not provided, general and special damages, actual, consequential and incidental losses and damages, statutory wage penalties, punitive damages, pre-judgment interest, attorneys’ fees and costs, liquidated damages, and non-monetary damages including an accounting of FreedomRoads, LLC’s revenues, costs and profits in connection with each sale of goods made by the putative class members and the appointment of a receiver to receive, manage and distribute any funds disgorged from FreedomRoads, LLC as may be determined to have been wrongly acquired by FreedomRoads, LLC, and any other and further relief the court deems just and proper (“Woodings Class Action”).

On August 6, 2020, the Woodings Class Action was removed to the U.S.

District Court for the Central District of California.

On August 27, 2020, Woodings amended the Class Action to add a second plaintiff, Jodi Dormaier, representing a Washington subclass of all non-exempt FreedomRoads, LLC employees, in an amended lawsuit styled Kamela Woodings and Jodi Dormaier v.

FreedomRoads, LLC (the “Amended Class Action”).

The Amended Class Action alleged the following additional causes of action:

On August 27, 2020, Woodings amended the Woodings Class Action to add a second plaintiff, Jodi Dormaier, representing a Washington subclass of all non-exempt FreedomRoads, LLC employees, in an amended lawsuit styled Kamela Woodings and Jodi Dormaier v.

FreedomRoads, LLC ( the “Amended Woodings Class Action”).

The Amended Woodings Class Action alleged the following additional causes of action:

Violation of Wash.

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and Violation of Wash.

Code §§ 49.52.050 (willful exemplary damages) seeking class certification, damages and restitution for all unpaid wages and other injuries to Woodings,

Dormeir, and the putative class, pre-judgment interest, declaratory judgment establishing a violation of California Labor Code, California Business and Professional Code §§ 17200, et seq., Revised Code of Washington and other laws of the States of California and Washington, and public policy, compensatory damages including lost wages, earnings, liquidated damages, and other employee benefits together with interest, restitution, recovery of all money, actual damages and all other sums of money owed to Woodings, Dormaier, and the putative class members, together with interest, an accounting of FreedomRoads, LLC’s revenues, costs, and profits in connection with each sale of goods and services made by Woodings, Dormaier, and the putative class, and reasonable attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On January 18, 2021, the parties entered into a preliminary agreement to settle the Amended Class Action and the PAGA Complaint subject to the terms of a long-form settlement agreement to be executed by the parties and approval by the courts.

As of December 31, 2020, the Company had a reserve totaling $ 4.0 million for estimated losses related to this matter.

Code §§ 49.52.050 (willful exemplary damages) seeking class certification, damages and restitution for all unpaid wages and other injuries to Woodings, Dormaier, and the putative class, pre-judgment interest, declaratory judgment establishing a violation of California Labor Code, California Business and Professional Code §§ 17200, et seq., Revised Code of Washington and other laws of the States of California and Washington, and public policy, compensatory damages including lost wages, earnings, liquidated damages, and other employee benefits together with interest, restitution, recovery of all money, actual damages and all other sums of money owed to Woodings, Dormaier, and the putative class members, together with interest, an accounting of FreedomRoads, LLC’s revenues, costs, and profits in connection with each sale of goods and services made by Woodings, Dormaier, and the putative class, and reasonable attorneys’ fees and costs, and any other and further relief the court deems just and proper.

On January 18, 2021, the parties entered into a preliminary agreement to settle the Amended Woodings Class Action and the Woodings PAGA Complaint subject to the terms of a long-form settlement agreement to be executed by the parties and approval by the courts.

On July 26, 2021, the parties executed the long-form settlement agreement and filed a motion seeking preliminary approval of the settlement from the court.

On September 3, 2021, the court granted Plaintiff’s Motion for Preliminary Approval.

On December 13, 2021, the court granted Plaintiffs’ Unopposed Motion For Final Approval Of Class Action Settlement, Attorneys’ Fees and Costs and Class Representative Service Award.

On December 29, 2021, the court entered the Final Order and Judgment Granting Plaintiffs’ Unopposed Motion For Final Approval Of Class Action Settlement and PAGA Settlement.

On January 28, 2022 the Final Approval Order became final and binding resulting in the Settlement Amount becoming due to the class administrator on or before March 11, 2022.

As of December 31, 2021, the Company had a reserve totaling $ 4.0 million for estimated losses related to this matter, which is consistent with the preliminary settlement amount.

The Company expects to pay the Settlement Amount by March 11, 2022.

No assurance can be made that these or similar suits will not result in a material financial exposure in excess of insurance coverage, which could have a material adverse effect upon the Company’s financial condition and results of operations.

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The agreements include, among other things, an annual bonus based on adjusted earnings before interest, taxes, depreciation and amortization, and up to one year ’ s severance pay beyond termination date.

Financial Assurances

In the normal course of business, the Company obtains standby letters of credit and surety bonds from financial institutions and other third parties.

These instruments guarantee the Company’s own future performance and provide third parties with financial and performance assurance in the event that the Company does not perform.

These instruments support a wide variety of the Company’s business activities.

As of December 31, 2021 and December 31, 2020, outstanding standby letters of credit issued through our Floor Plan Facility were $ 11.5 million and $ 11.7 million, respectively, and outstanding standby letters of credit issued through the New Senior Secured Credit Facilities were $ 4.9 million and $ 5.9 million, respectively (see Note 4 — Inventories and Floor Plan Payables and Note 9 — Long-Term Debt).

As of December 31, 2021 and December 31, 2020, outstanding surety bonds were $ 19.1 million and $ 16.1 million, respectively.

The underlying liabilities insured by these instruments are reflected on the Company’s accompanying consolidated balance sheets, where applicable.

Therefore, no additional liability is reflected for the letters of credit and surety bonds themselves.

Related Party Transactions

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As of November 1, 2019, by way of the Second Amendment to the Office Lease, (together with the Original Lease and the First Amendment, collectively, the “Office Lease”), the Company began leasing additional space for an additional monthly base rent of $ 5,200 .

For the years ended December 31, 2021, 2020, and 2019, rental payments for the Lincolnshire Lease, including common area maintenance charges, were $ 0.8 million, $ 0.9 million, and $ 0.8 million, respectively.

The Company’s Chairman and Chief Executive Officer has personally guaranteed the Office Lease.

As of December 31, 2021 and 2020, the Company had an expense reimbursement payable to Mr.

Lemonis of $ 0.1 million and $ 0.2 million, respectively, relating primarily to advertising expenses for the Company that were processed through Mr.

Lemonis’ social media accounts.

Other Transactions

Cumulus Media Inc.

(“Cumulus Media”) has provided radio advertising for the Company through Cumulus Media’s subsidiary, Westwood One, Inc.

Crestview Partners II GP, L.P., an affiliate of CVRV, was the beneficial owner of Cumulus Media’s Class A common stock until approximately June 6, 2018, according to Crestview Partners II GP, L.P.’s most recently filed Schedule 13D amendment with respect to the company.

For the year ended December 31, 2018, the Company incurred Cumulus Media expenses of $ 0.3 million for the aforementioned advertising services.

Cumulus Media was not a related party in the years ended December 31, 2019 and 2020.

The Company does business with certain companies in which Mr.

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The Company purchased fixtures for interior store sets at the Company’s retail locations from Precise Graphix.

Lemonis has a 67 % economic interest in Precise Graphix.

The Company incurred expenses from Precise Graphix of $ 0.3 million, $ 1.4 million and $ 5.6 million for the years ended December 31,

2020, 2019 and 2018, respectively.

The Company purchased point of purchase and visual merchandise displays from JD Custom Design (“JD Custom”) for use in Camping World’s retail store operations.

Lemonis is a holder of 52 % of the combined voting power in JD Custom and the Company paid JD Custom $ 0 , $ 0 and $ 0.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Lemonis has had a 67 % economic interest in Precise Graphix, which is currently in dispute.

The Company is not a party to the dispute.

The Company received refunds from Precise Graphix totaling $ 0.2 million in 2021 and incurred expenses of $ 0.3 million and $ 1.4 million for the years ended December 31, 2020 and 2019, respectively.

The Company does business with certain companies in which Stephen Adams, a member of the Company’s board of directors, has a direct or indirect material interest.

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Baltins is a member, and a member of the Company’s board of directors, $ 0.3 million, $ 0.2 million and $ 0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively, for legal services.

In 2020 and 2019, subsidiaries of the Company acquired the assets or stock of multiple RV dealerships that constituted businesses under accounting rules.

The Company used a combination of cash and floor plan financing to complete the acquisitions.

In 2021 and 2020, subsidiaries of the Company acquired the assets of multiple RV dealerships that constituted businesses under accounting rules.

The Company used cash to complete these acquisitions.

The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new retail locations to expand its business and grow its customer base.

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The balance of the purchase prices in excess of the fair values of net assets acquired were recorded as goodwill.

In 2019, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of five locations for an aggregate purchase price of approximately $ 48.4 million.

In 2021, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of 12 locations for an aggregate purchase price of approximately $ 100.1 million.

The purchases were partially funded through $ 19.5 million of borrowings under the Floor Plan Facility revolving line of credit.

All of these acquired locations were opened in 2021.

In 2020, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of nine locations for an aggregate purchase price of approximately $ 37.9 million plus real property of $ 53.1 million.

The purchases were partially funded through $ 10.3 million of borrowings under the Floor Plan Facility revolving line of credit.

Three of these acquired locations will open in 2021.

Three of these acquired locations were opened in 2021.

Additionally, in October 2020, the RV and Outdoor Retail segment acquired the assets of an RV furniture distributor for $ 9.7 million in cash.

For the years ended December 31, 2020 and 2019, the Company purchased real property of $ 53.1 million and $ 31.6 million, respectively, of which $ 34.1 million and $ 2.9 million, respectively, was from parties related to the sellers of the businesses.

In 2021 and 2020, the Company purchased real property of $ 129.2 million and $ 53.1 million, respectively, of which $ 31.4 million and $ 34.1 million, respectively, was from parties related to the sellers of the businesses.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships and the RV furniture distributor consist of the following:

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Accounts payable

Year Ended December 31,

($ in thousands)

Accrued liabilities

Operating lease liabilities

Finance lease liabilities

Operating lease liabilities - current

Operating lease liabilities - noncurrent

Finance lease liabilities - current

Finance lease liabilities - noncurrent

Total tangible net assets acquired

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Total intangible assets acquired

Purchase price

Cash and cash equivalents acquired

Cash paid for acquisitions, net of cash acquired

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The fair values above are preliminary relating to the year ended December 31, 2021 as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date relating to the valuation of the acquired assets, primarily the acquired inventories.

For the years ended December 31, 2021 and December 31, 2020, the fair values above include measurement period adjustments for valuation of acquired inventories and goodwill relating to RV and Outdoor Retail acquisitions during the years ended December 31, 2020 and December 31, 2019, respectively.

The primary items that generated the goodwill are the value of the expected synergies between the acquired businesses and the Company and the acquired assembled workforce, neither of which qualify for recognition as a separately identified intangible asset.

For the years ended December 31, 2021 and 2020, acquired goodwill of $ 70.5 million and $ 26.2 million is expected to be deductible for tax purposes.

Included in the years ended December 31, 2020 and 2019 consolidated financial results were $ 10.1 million and $ 44.6 million of revenue, respectively, and $ 0.5 million of pre-tax loss and $ 0.3 million of pre-tax income, respectively, of the acquired dealerships from the applicable acquisition dates.

Included in the years ended December 31, 2021 and 2020 consolidated financial results were $ 145.0 million and $ 10.1 million of revenue, respectively, and $ 13.0 million of pre-tax income and $ 0.5 million of pre-tax loss, respectively, of the acquired dealerships from the applicable acquisition dates.

Pro forma information on these acquisitions has not been included, because the Company has deemed them to not be individually or cumulatively material.

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Non-cash investing activities:

Derecognized property and equipment for leases that qualified as operating leases after completion of construction

Leasehold improvements paid by lessor

Vehicles transferred to property and equipment from inventory

Derecognition of non-tenant improvements

Capital expenditures in accounts payable and accrued liabilities

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Par value of Class A common stock repurchased for withholding taxes on vested RSUs

Cost of treasury stock issued for vested restricted stock units

Cost of treasury stock issued for stock award to employee

The Freedom Roads 401(k) Defined Contribution Plan (“FreedomRewards 401(k) Plan”) is qualified under Sections 401(a) and 401(k) of the Internal Revenue Service Code of 1986, as amended.

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Highly compensated employees may defer up to 15 % of their eligible compensation up to the Internal Revenue Service limits.

There were no contributions to the FreedomRewards 401(k) Plan in 2020, 2019 or 2018.

There were no contributions by the Company to the Company’s 401(k) Plan in 2021, 2020 or 2019.

Stockholders’ Equity

CWGS, LLC Ownership

CWH is the sole managing member of CWGS, LLC and, although CWH has a minority economic interest in CWGS, LLC of 47.4 %, 42.0 %, and 41.9 % as of December 31, 2020, 2019, and 2018, respectively, CWH has the sole voting power in, and controls the management of, CWGS, LLC.

The remaining 52.6 %, 58.0 %, and 58.1 % of CWGS, LLC as of December 31, 2020, 2019, and 2018, respectively, was held by the “Continuing Equity Owners,” whom the Company defines as collectively, ML Acquisition Company, a Delaware limited liability company, indirectly owned by each of Stephen Adams and the Company’s Chairman and Chief Executive Officer, Marcus Lemonis ("ML Acquisition”), funds controlled by Crestview Partners II GP, L.P.

and, collectively, the Company’s named executive officers (excluding Marcus Lemonis), Andris A.

CWH is the sole managing member of CWGS, LLC and, although CWH had a minority economic interest in CWGS, LLC through March 11, 2021 before obtaining a majority economic interest in CWGS, LLC, CWH has the sole voting power in, and controls the management of, CWGS, LLC (See Note 19 – Non-Controlling Interests for further information about the ownership of CWGS, LLC).

The remaining interest in CWGS, LLC, was held by the “Continuing Equity Owners,” whom the Company defines as collectively, ML Acquisition Company, a Delaware limited liability company, indirectly owned by each of Stephen Adams and the Company’s Chairman and Chief Executive Officer, Marcus Lemonis ("ML Acquisition”), funds controlled by Crestview Partners II GP, L.P.

and, collectively, the Company’s named executive officers (excluding Marcus Lemonis and Matthew Wagner), Andris A.

Baltins and K.

Dillon Schickli, who are members of the Company’s board of directors, and certain other current and former non-executive employees and former directors, in each case, who held profit units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to the Company’s IPO and who received common units of CWGS, LLC in exchange for their profit units in connection with the reorganization transactions at the time of the IPO (collectively, the “Former Profit Unit Holders”) and each of their permitted transferees that own common units in CWGS, LLC and who may redeem at each of their options their common units for, at the

Company’s election (determined solely by the Company’s independent directors (within the meaning of the rules of the New York Stock Exchange) who are disinterested), cash or newly issued shares of the Company’s Class A common stock.

Dillon Schickli, who are members of the Company’s board of directors, and certain other current and former non-executive employees and former directors, in each case, who held profits units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to the Company’s IPO and who received common units of CWGS, LLC in exchange for their profits units in connection with the reorganization transactions at the time of the IPO (collectively, the “Former Profits Unit Holders”) and each of their permitted transferees that own common units in CWGS, LLC and who may redeem at each of their options their common units for, at the Company’s election (determined solely by the Company’s

independent directors (within the meaning of the rules of the New York Stock Exchange) who are disinterested), cash or newly issued shares of the Company’s Class A common stock.

Accordingly, the Company consolidated the financial results of CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.

In accordance with the CWGS LLC Agreement, CWGS, LLC has made cash distributions to all common unit holders of CWGS, LLC in an amount sufficient for 1) CWH to pay its regular quarterly cash dividend to holders of its Class A common stock and 2) the common unit holders of CWGS, LLC to pay their income tax obligation on their allocated portion of CWGS, LLC income at the highest tax rate for all common unit holders of CWGS, LLC.

The payment of these cash distributions by CWGS, LLC to Continuing Equity Owners are recorded as distributions to holders of CWGS, LLC common units in the accompanying Consolidated Statements of Stockholders’ Deficit and Consolidated Statements of Cash Flows.

The payment of these cash distributions by CWGS, LLC to CWH are within the consolidated group and, therefore, are not included in the distributions to holders of CWGS LLC common units in the accompanying Consolidated Statements of Stockholders’ Deficit and Consolidated Statements of Cash Flows.

Common Stock Economic and Voting Rights

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The Company must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of common units of CWGS, LLC owned by CWH (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).

Short-Swing Profit Disgorgement

In May 2018, the Company received an aggregate of $ 557,000 from short-swing profit disgorgement remitted by ML Acquisition Company, LLC, of which Marcus A.

Lemonis, Chairman and Chief Executive Officer of the Company, is the sole director, which is included as an increase to additional paid-in capital in the consolidated statement of stockholders’ equity and as a financing activity in the consolidated statement of cash flows.

Stock Repurchase Program

On October 30, 2020, the Company’s Board of Directors authorized a stock repurchase program for the repurchase of up to $ 100.0 million of the Company’s Class A common stock, expiring on October 31, 2022.

In October 2020, the Company’s Board of Directors authorized a stock repurchase program for the repurchase of up to $ 100.0 million of the Company’s Class A common stock, expiring on October 31, 2022.

In August 2021, the Company’s Board of Directors authorized an increase to the stock repurchase program for the repurchase of up to an additional $ 125.0 million of the Company’s Class A common stock and extended the stock repurchase program to expire on August 31, 2023.

In January, 2022, the Company’s Board of Directors authorized an increase of the stock repurchase program to allow for the repurchase of an additional

$ 152.7 million of the Company’s Class A common stock and extended 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 repurchases 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 the Company’s discretion, depending on market conditions and corporate needs.

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The Company expects to fund the repurchases using cash on hand.

During the year ended December 31, 2020, the Company repurchased 811,223 shares of Class A common stock under this program for approximately $ 21.5 million, including commissions paid, at a weighted average price per share of $ 26.53 , which is recorded as treasury stock on the consolidated balance sheets.

During the years ended December 31, 2021 and 2020, the Company repurchased 3,988,881 and 811,223 shares of Class A common stock, respectively, under this program for approximately $ 156.3 million and $ 21.5 million, respectively, including commissions paid, at a weighted average price per share of $ 39.17 and $ 26.53 , respectively, which is recorded as treasury stock on the accompanying consolidated balance sheets.

Class A common stock held as treasury stock is not considered outstanding.

During the year ended December 31, 2020, the Company reissued 238,776 shares of Class A common stock from treasury stock to settle the exercises of stock options and vesting of restricted stock units.

During the years ended December 31, 2021 and 2020, the Company reissued 1,171,197 and 238,776 shares of Class A common stock, respectively, from treasury stock to settle the exercises of stock options, vesting of restricted stock units, and settlement of other equity-based awards under the Company’s 2016 Incentive Award Plan (the “2016 Plan”) (see Note 20 — Equity-Based Compensation Plans).

As of December 31, 2021, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $ 47.2 million.

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As such, future redemptions or direct exchanges of common units of CWGS, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when CWGS, LLC has positive or negative net assets, respectively.

At December 31, 2020 and 2019, CWGS, LLC had negative net assets, which resulted in negative non-controlling interest amounts on the consolidated balance sheets.

At the end of each period, the Company will record a non-controlling interest adjustment to additional paid-in capital such that the non-controlling interest on the consolidated balance sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC net assets (see the consolidated statement of stockholders’ deficit).

As of December 31, 2020 and December 31, 2019, there were 89,043,176 and 89,158,273 common units of CWGS, LLC interests outstanding, respectively, of which CWH owned 42,226,389 and 37,488,989 common units of CWGS, LLC, respectively, representing 47.4 % and 42.0 % ownership interest in CWGS, LLC., respectively, and the Continuing Equity Owners owned 46,816,787 and 51,669,284 common units of CWGS, LLC, respectively, representing 52.6 % and 58.0 % ownership interests in CWGS, LLC, respectively.

During the year ended December 31, 2020, the funds controlled by Crestview Partners II GP, L.P.

redeemed 4.7 million common units of CWGS, LLC in exchange for 4.7 million shares of the Company’s Class A common stock, which also resulted in the cancellation of 4.7 million shares of the Company’s Class B

common stock that was previously held by the funds controlled by Crestview Partners II GP, L.P.

During the year ended December 31, 2018, the ML Related Parties redeemed 0.1 million common units of CWGS, LLC in exchange for 0.1 million shares of the Company’s Class A common stock, which also resulted in the cancellation of 0.1 million shares of the Company’s Class B common stock that was previously held by the ML Related Parties.

At December 31, 2020, CWGS, LLC had negative net assets, which resulted in negative non-controlling interest amounts on the accompanying consolidated balance sheets.

At the end of each period, the Company will record a non-controlling interest adjustment to additional paid-in capital such that the non-controlling interest on the accompanying consolidated balance sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC net assets (see the consolidated statement of stockholders’ equity (deficit)).

The following table summarizes the CWGS, LLC common unit ownership by CWH and the Continuing Equity Owners:

As of December 31, 2021

As of December 31, 2020

Continuing Equity Owners

During the year ended December 31, 2021, CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by each of Stephen Adams, a member of Camping World’s board of directors, and Marcus Lemonis, the Company’s Chairman and Chief Executive Officer gifted 540,699 common units of CWGS, LLC in total to a high school, university, and a charitable organization (“Common Unit Giftees”), which resulted in the corresponding 540,699 shares of Class B common stock being transferred to the Common Unit Giftees.

On the day following each of the gifts, the Common Unit Giftees redeemed the 540,699 common units of CWGS, LLC in exchange for 540,699 shares of the Company’s Class

A common stock, which also resulted in the cancellation of 540,699 shares of the Company’s Class B common stock that had been transferred to the Common Unit Giftees with no additional consideration provided.

During the years ended December 31, 2021 and 2020, the funds controlled by Crestview Partners II GP, L.P.

redeemed 4.0 million and 4.7 million common units of CWGS, LLC, respectively, in exchange for 4.0 million and 4.7 million shares of the Company’s Class A common stock, respectively, which also resulted in the cancellation of 4.0 million and 4.7 million shares of the Company’s Class B common stock, respectively, that was previously held by the funds controlled by Crestview Partners II GP, L.P.

with no additional consideration provided.

The following table summarizes the effects of changes in ownership in CWGS, LLC on the Company’s equity:

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Decrease in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on vested RSUs

Decrease in additional paid-in capital as a result of the stock award to employee

Decrease in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on stock award to employee

Increase in additional paid-in capital as a result of repurchases of Class A common stock for treasury stock

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2016 Incentive Award Plan

In October 2016, the Company adopted the 2016 Incentive Award Plan (the “2016 Plan”) under which the Company may grant up to 14,693,518 stock options, restricted stock units, and other types of equity-based awards to employees, consultants or non-employee directors of the Company.

In October 2016, the Company adopted the 2016 Plan under which the Company may grant up to 14,693,518 stock options, restricted stock units, and other types of equity-based awards to employees, consultants or non-employee directors of the Company.

The Company does not intend to use cash to settle any of its equity-based awards.

Upon the exercise of a stock option award, the vesting of

a restricted stock unit or the award of common stock or restricted stock, shares of Class A common stock are issued from authorized but unissued shares or from shares held in treasury.

Upon the exercise of a stock option award, the vesting of a restricted stock unit or the award of common stock or restricted stock, shares of Class A common stock are issued from authorized but unissued shares or from shares held in treasury.

Stock options and restricted stock units granted to employees generally vest in equal annual installments over a three to five-year period and are canceled upon termination of employment.

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Restricted stock units granted to non-employee directors vest in equal annual installments over a one-year or three-year period subject to voluntary deferral elections made prior to the grant.

The Company did not grant any stock options during the years ended December 31, 2020, 2019, or 2018.

The Company did not grant any stock options during the years ended December 31, 2021, 2020 and 2019.

A summary of stock option activity for the year ended December 31, 2021 is as follows:

Weighted Average

Stock Options

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The intrinsic value of stock options exercised was $ 3.5 million and $ 2.3 million for the years ended December 31, 2021 and 2020, respectively.

The actual tax benefit for the tax deductions from the exercise of stock options was $ 0.3 million and not significant for the years ended December 31, 2020 and 2018, respectively.

The actual tax benefit for the tax deductions from the exercise of stock options was $ 0.6 million and $ 0.3 million for the years ended December 31, 2021 and 2020, respectively.

A summary of restricted stock unit activity for the year ended December 31, 2021 is as follows:

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The actual tax benefit for the tax deductions from the vesting of restricted stock units was $ 5.6 million, $ 2.1 million, and $ 0.7 million for the years ended December 31, 2021, 2020, and 2019, respectively.

A portion of the actual tax benefit for tax deductions from the vesting of restricted stock units relating to the year ended December 31, 2021 was subject to limitations on deductibility of executive compensation.

The restricted stock units that vested were typically net share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities.

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These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as a result of the vesting and did not represent an expense to the Company.

In December 2021, the Board of Directors of the Company awarded Marcus Lemonis, the Company’s Chairman and Chief Executive Officer, an award of 510,986 shares of the Company’s Class A common stock having an aggregate grant-date fair value of $ 20.0 million or $ 39.14 per share, which was recognized as equity-based compensation expense during the year ended December 31, 2021.

The award was made in consideration of the Company’s strong performance.

Lemonis has not received compensation since the

time of the Company’s initial public offering other than Company-provided benefits such as medical and dental insurance.

Similar to the vesting of restricted stock units discussed above, this award to Mr.

Lemonis was net share settled such that the Company withheld shares with value equivalent to Mr.

Lemonis’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities.

The total shares withheld were based on the value of the shares of Class A common stock on the date of the award as determined by the Company’s closing stock price.

Total payments for Mr.

Lemonis’ tax obligations to taxing authorities are reflected as a financing activity within the Consolidated Statements of Cash Flows.

This net share settlement had the effect of a share repurchase by the Company as they reduced the number of shares that would have otherwise been issued as a result of the award and did not represent an expense to the Company.

The actual tax benefit for the tax deduction for this award was $ 2.6 million for the year ended December 31, 2021, which was subject to limitations on deductibility of executive compensation.

In June 2020, the Company entered into a consulting agreement with Melvin Flanigan that became effective after his resignation as the Company’s Chief Financial Officer and Secretary on June 30, 2020.

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

— basic and diluted

reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs

reallocation of net income (loss) attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs

reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

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

Weighted-average shares of Class A common stock outstanding — basic and diluted

Weighted-average shares of Class A common stock outstanding — basic

Dilutive options to purchase Class A common stock

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($ in thousands)

Segment income (loss):

Segment income:

Good Sam Services and Plans

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Loss and expense on debt restructure

Other expense, net

Income (loss) before income taxes

(1) Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense.

The Company has recast certain prior period amounts to conform to the two segments presented in 2019.

Year Ended December 31,

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RV and Outdoor Retail

Corporate & other

Total depreciation and amortization

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Total capital expenditures

Quarterly Financial Information (Unaudited)

The three months ended December 31, 2020, June 30, 2020 and March 31, 2020 reflect long-lived asset impairments of $ 6.6 million, $ 4.4 million, and $ 1.4 million, respectively, and the three months ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020 reflect restructuring charges of $ 6.3 million, $ 4.6 million, $ 3.7 million and $ 3.0 million, respectively, relating to the 2019 Strategic Shift as described in Note 5 — Restructuring and Long-lived Asset Impairment.

The three months ended December 31, 2019 and September 30, 2019, reflect long-lived asset impairments of approximately $ 16.3 million and $ 50.0 million, respectively, and restructuring charges of $ 19.5 million and $ 27.7 million, respectively, relating to the 2019 Strategic Shift as described in Note 5 — Restructuring and Long-lived Asset Impairment.

Three Months Ended

September 30,

($ in thousands)

Income (loss) from operations

Net income (loss)

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

Earnings (loss) per share of Class A common stock:

Subsequent Event

The Company relies on the integrity, security and successful functioning of its information technology systems and network infrastructure (collectively, “IT Systems”) across its operations.

In February 2022, the Company announced that it was 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 the Company’s temporary inability to access certain of its IT Systems, caused by the disabling of some of its IT Systems by the threat actor and the Company temporarily taking certain other IT Systems offline as a precautionary measure.

The Company engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation, and is working on restoring and ensuring the security of its IT Systems.

The Company is also coordinating with law enforcement.

The Company is in the early stages of this incident and has not determined the full scope or content of its lost or stolen data.

The Company has and expects 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 its IT Systems.

The containment, investigation, remediation, legal and other costs may exceed its 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.

The Company has not yet determined if the Cybersecurity Incident will cause future disruptions to its business or how long such disruption could last.

The Company has also not yet been able to estimate the incremental costs resulting from the Cybersecurity Incident, which are expected to adversely impact its future financial results.

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

Condensed Financial Information of Registrant

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Commitments and contingencies

Stockholders' equity (deficit):

Stockholders' equity:

Preferred stock, par value $ 0.01 per share – 20,000,000 shares authorized;

none issued and outstanding as of December 31, 2020 and December 31, 2019

none issued and outstanding as of December 31, 2021 and 2020

Class A common stock, par value $ 0.01 per share – 250,000,000 shares authorized;

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Class B common stock, par value $ 0.0001 per share – 75,000,000 shares authorized;

69,066,445 issued as of December 31, 2020 and December 31, 2019;

and 45,999,132 and 50,706,629 outstanding as of December 31, 2020 and December 31, 2019

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2020 and December 31, 2019

69,066,445 issued as of December 31, 2021 and 2020;

and 41,466,964 and 45,999,132 outstanding as of December 31, 2021 and 2020

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2021 and 2020

Additional paid-in capital

Treasury stock, at cost;

572,447 and 0 shares as of December 31, 2020 and December 31, 2019

Retained deficit

Total stockholders' equity (deficit)

3,390,131 and 572,447 shares as of December 31, 2021 and 2020

Retained earnings (deficit)

Total stockholders' equity

Total liabilities and stockholders' equity

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Tax Receivable Agreement liability adjustment

Other income, net

Equity in net income (loss) of subsidiaries

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Adjustments to reconcile net income (loss) to net cash used in operating activities:

Equity in net (loss) income of subsidiaries

Equity in net (income) loss of subsidiaries

Deferred tax expense

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Prepaid income taxes and other assets

Accounts payable and other accrued liabilities

Payment pursuant to Tax Receivable Agreement

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Repurchases of Class A common stock to treasury

Disgorgement of short-swing profits by Section 16 officer

Net cash used in financing activities

(Decrease) increase in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

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As of December 31, 2021 and 2020, liabilities under the tax receivable agreement totaled $ 182.4 million and $ 145.9 million, respectively.

See Note 13 to the consolidated financial statements for information regarding pending and threatened litigation.

Pursuant to the LLC Agreement, the Parent Company receives reimbursements for all costs associated with being a public company, which includes costs of litigation.

See Note 13 to the consolidated financial statements for information regarding pending and threatened litigation and Note 23 to the consolidated financial statements for information about the February 2022 cybersecurity incident.

Pursuant to the LLC Agreement, the Parent Company receives reimbursements for all costs associated with being a public company, which includes costs of litigation and cybersecurity incidents.

Stock Repurchase Program

During the year ended December 31, 2020, the Parent Company repurchased 811,223 shares of Class A common stock under this program for approximately $ 21.5 million, including commissions paid, at a weighted average price per share of $ 26.53 , which is recorded as treasury stock on the Parent Company’s balance sheet.

This $ 21.5 million was concurrently funded by CWGS, LLC in exchange for the return of 811,223 common units in CWGS, LLC, which reduced the Parent Company’s ownership interest in CWGS, LLC.

During the year ended December 31, 2021 and 2020, the Parent Company repurchased 3,988,881 and 811,223 shares of Class A common stock, respectively, under this program for approximately $ 156.3 million and $ 21.5 million, respectively, including commissions paid, at a weighted average price per share of $ 39.17 and $ 26.53 , respectively, which is recorded as treasury stock on the Parent Company’s balance sheet.

During the years ended December 31, 2021 and 2020, the $ 156.3 million and $ 21.5 million, respectively, was concurrently funded by CWGS, LLC in exchange for the return of 3,988,881 and 811,223 common units in CWGS, LLC, respectively, which reduced the Parent Company’s ownership interest in CWGS, LLC.

Class A common stock held as treasury stock is not considered outstanding.

During the year ended December 31, 2020, the Parent Company reissued 238,776 shares of Class A common stock from treasury stock to settle the exercises of stock options and vesting of restricted stock units.

See Note 18 to the consolidated financial statements for a further discussion of the stock repurchase program.

During the year ended December 31, 2021, the Parent Company reissued 1,171,197 and 238,776 shares of Class A common stock, respectively, from treasury stock to settle the exercises of stock options, vesting of restricted stock units, and settlement of other equity-based awards under the Parent Company’s 2016 Incentive Award Plan.

As of December 31, 2021, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $ 47.2 million.

Statements of Cash Flows

Supplemental disclosures of cash flow information are as follows (in thousands):

Year Ended December 31,

Cash paid during the period for:

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Par value of Class A common stock repurchased for withholding taxes on vested RSUs

Cost of treasury stock issued for vested restricted stock units

Cost of treasury stock issued for stock award to employee

Valuation and Qualifying Accounts

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(3) Accounts receivable allowance includes the allowance for doubtful accounts and the allowance for cancellations /returns.

(4) As a result of the adoption of ASC 606 on January 1, 2018, certain of the Company’s revenue streams are recorded as variable consideration and would no longer be considered to have an allowance for cancellations/returns (see Note 2 — Revenue in Part II, Item 8 of this Form 10-K).

This resulted in a charge to other accounts of $ 5.5 million for the year ended December 31, 2018.

(In Thousands)

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(1) Additions to cancellations /returns allowances are credited against revenue.

(2) As a result of the adoption of ASC 606 on January 1, 2018, certain of the Company’s revenue streams are recorded as variable consideration and would no longer be considered to have an allowance for cancellations/returns (see Note 2 — Revenue in Part II, Item 8 of this Form 10-K).

This resulted in a charge to other accounts of $ 7.2 million for the year ended December 31, 2018.

Tax Valuation

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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 8. Financial Statements and Supplementary Data