What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-24 · 466 added, 476 removed, 1130 unchanged (45% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity (Deficit )

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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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.

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

Estimated chargebacks depend on ultimate future cancellation rates, determined by management by product type and year sold using a combination of actuarial methods and leveraging the Company’s historical experience from the past eight years, adjusted for new consumer trends.

As of December 31, 2021, the Company recorded $68.8 million in chargeback liabilities related to these dealership insurance and service contracts.

Given the judgment involved in estimating the ultimate future cancellation rates used to estimate the chargeback liabilities, auditing this assumption required a high degree of auditor judgment, including the use of our actuarial specialists, in performing audit procedures to evaluate the reasonableness of management’s estimate.

The proceeds the Company receives from the third-

party insurance providers 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 are recorded as variable consideration, net of estimated chargebacks.

Chargebacks depend on ultimate future cancellation rates, estimated by management by product type and year sold using a combination of actuarial methods and leveraging the Company’s historical experience, adjusted for new consumer trends.

As of December 31, 2022, the Company’s consolidated balance sheet included $76.4 million in chargeback liabilities related to these contracts.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the ultimate future cancellation rates included the following, among others:

● We tested the effectiveness of controls over management's review of the ultimate future cancellation rates used to estimate the chargeback liabilities.

● We tested the effectiveness of controls over the calculation of the chargeback liabilities, which includes the estimation of future cancellation rates.

● We read standard insurance policies for each policy type, including agreements and amendments between insurance providers and the Company to understand the arrangements in effect.

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The Company performs an analysis of the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of the long-lived assets may not be recoverable.

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”).

The Company’s long-lived asset groups comprise 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 the carrying value over the location’s fair value, subject to certain limitations.

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The resulting impairment is allocated to the individual long-lived assets within the asset group up to the individual asset’s fair value, if readily determinable.

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

As of December 31, 2022, the Company had $758.3 million in property and equipment, net, and $742.3 million in operating lease ROU assets.

During the year ended December 31, 2022, the Company recognized $4.2 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 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.

We identified the impairment indicator analysis of long-lived assets and the cash flow estimates used in assessing the recoverability as a critical audit matter.

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

Our audit procedures related to the evaluation of projected future cash flows and the market rental rate assumptions for locations with impairment indicators included the following, among others:

● We tested the effectiveness of controls over management’s review of the analysis of carrying value of long-lived assets for impairment, including assumptions of projected future cash flows and current market rental rates for applicable locations.

● We tested the effectiveness of controls over the impairment indicator analysis of long-lived assets, including assumptions of projected future cash flows and current market rental rates for applicable locations.

● We evaluated the reasonableness of management’s projected future cash flows and market rental rate assumptions by performing the following procedures for selected locations:

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Intangible assets, net

Liabilities and stockholders' equity (deficit)

Liabilities and stockholders' equity

Current liabilities:

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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;

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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, 2021 and 2020;

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

41,466,964 issued and outstanding as of December 31, 2022;

69,066,445 issued and 41,466,964 outstanding as of December 31, 2021

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2022 and 2021

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Treasury stock, at cost;

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

Retained earnings (deficit)

5,130,147 and 3,390,131 shares as of December 31, 2022 and 2021, respectively

Retained earnings

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

Non-controlling interests

Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

Total stockholders' equity

Total liabilities and stockholders' equity

See accompanying Notes to Consolidated Financial Statements

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Lease termination

(Gain) loss on sale or disposal of assets

Loss (gain) on sale or disposal of assets

Total operating expenses

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Total other expense

Income (loss) before income taxes

Income before income taxes

Income tax expense

Net income (loss)

net (income) loss attributable to non-controlling interests

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

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

net income attributable to non-controlling interests

Net income attributable to Camping World Holdings, Inc.

Earnings per share of Class A common stock:

Weighted average shares of Class A common stock outstanding:

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and Subsidiaries

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ Equity

(In Thousands)

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Treasury Stock

Earnings (Deficit)

Balance at January 1, 2020

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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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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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

Redemption of LLC common units for Class A common stock

Disgorgement of short-swing profits by Section 16 officer

Distributions to holders of LLC common units

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Operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Equity-based compensation

Loss (gain) on lease termination

Loss on lease termination

Loss on debt restructure

Long-lived asset impairment

(Gain) loss on sale or disposal of assets

Loss (gain) on sale or disposal of assets

Provision for losses on accounts receivable

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Payments on revolving line of credit

Proceeds from landlord funded construction on finance leases

Payments on finance leases

Proceeds from sale-leaseback arrangement

Payments on sale-leaseback arrangement

Payment of debt issuance costs

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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 provided by (used in) financing activities

Increase in cash and cash equivalents

(Decrease) 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 had a minority economic interest in CWGS, LLC through March 11, 2021.

CWH’s position as sole managing member of CWGS, LLC, includes periods where CWH held a minority economic interest in CWGS, LLC.

As of December 31, 2022, 2021, and 2020, CWH owned 50.2 %, 51.2 % and 47.4 %, respectively, of CWGS, LLC.

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The Company does not have any components of other comprehensive income recorded within its consolidated financial statements and, therefore, does not separately present a statement of comprehensive income in its consolidated financial statements.

A novel strain of coronavirus was declared a pandemic by the World Health Organization in March 2020.

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 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 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.

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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emergency roadside assistance plans;

property and casualty insurance programs;

commissions on property and casualty insurance programs;

travel assist programs;

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business to business distribution of RV furniture, and the sale of Good Sam Club memberships and co-branded credit cards.

The Company operates a national network of RV dealerships and service centers as well as a comprehensive e-commerce platform, primarily under the Camping World and Gander RV & Outdoors brands, and markets its products and services primarily to RV and outdoor enthusiasts.

The Company operates a national network of RV dealerships and service centers as well as a comprehensive e-commerce platform, primarily under the Camping World brand, and markets its products and services primarily to RV and outdoor enthusiasts.

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).

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:

Retail Centers

Retail Stores

Number of store locations as of December 31, 2020

Closed / divested

Converted (1)

Number of store locations as of December 31, 2021

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

Within a few months of the initial significant outbreaks of COVID-19 in the U.S., the Company experienced elevated demand for RVs and many of its related products and services.

The Company believes that consumers view RVs as a safer alternative to many other travel and recreational activities, in addition to an opportunity to enjoy the outdoors after many consumers spent much of their time at home during portions of the pandemic.

The Company believes this led to an introduction of many new customers to the RV lifestyle and a greater appreciation of outdoor activities.

For much of the COVID-19 pandemic, demand and interest in new and used vehicles outpaced vehicle supply.

Beginning in September 2021, the Company was able to procure more new vehicles from its suppliers than were sold and new towables inventory levels, in particular, normalized in early 2022.

During the height of the pandemic, and related government orders directing non-essential business closures or reductions, the majority of the Company’s retail locations continued to operate as essential businesses.

The Company has implemented preparedness plans consistent with government directives to keep its employees and customers safe.

As case counts have risen and receded over the course of the pandemic, the Company has adjusted remote work and office schedules accordingly.

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 fewer consumer shows in 2021 and 2022.

Moving forward, the Company has shifted its consumer show strategy to focus on shows that support its own Camping World dealerships as opposed to hosting other competing dealerships.

The Company expects to annually host fewer than five ticketed in-person consumer shows under the Good Sam brand in future years.

Cybersecurity Incident

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 the occurrence of 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, which was completed as of September 30, 2022.

The Company is continuing to take measures to enhance its IT Systems.

Through its investigation, the Company identified that personal information of approximately 30,000 individuals was acquired without authorization, including, depending on the individual, dates of birth, Social Security numbers, and driver’s license numbers.

The Company complied with notification obligations in accordance with relevant law and is continuing to cooperate with law enforcement.

The Company has incurred costs related to investigation, containment, and remediation and expects to continue to incur incremental costs for the remediation of the Cybersecurity Incident, including legal and other professional fees, and investments to enhance the security of its IT Systems.

Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, and regulatory enforcement action.

In December 2022, three putative class action complaints were filed against the Company and certain of its subsidiaries arising out of the Cybersecurity Incident.

This litigation could result in financial judgments or the payment of settlement amounts and disputes with insurance carriers concerning coverage.

The Company does not expect that the Cybersecurity Incident will cause future disruptions to its business or that the Cybersecurity Incident, including anticipated costs associated with pending litigation, will have a future material impact on its business, results of operations or financial condition.

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.

The preparation of these consolidated 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 consolidated financial statements and the

reported amounts of revenue and expenses during the reporting period.

Actual results may differ from those estimates.

In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality.

In preparing these consolidated financial statements, management has made its best estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality.

The Company bases its estimates and judgments on historical experience and other assumptions that management believes are reasonable.

However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, including those uncertainties arising from COVID-19, and, as a result, actual results could differ materially from these estimates.

The Company periodically evaluates estimates and assumptions used in the preparation of the financial statements and makes changes on a prospective basis when adjustments are necessary.

Significant estimates made in the accompanying consolidated financial statements include certain assumptions related to accounts receivable, inventory, goodwill, intangible assets, long-lived assets, long-lived asset impairments, program cancellation reserves, chargebacks, and accruals related to estimated tax liabilities, product return reserves, and other liabilities.

However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates.

The Company periodically evaluates estimates and assumptions used in the preparation of the consolidated financial statements and makes changes on a prospective basis when adjustments are necessary.

Significant estimates made in the accompanying consolidated financial statements include certain assumptions related to accounts receivable, inventory, goodwill, intangible assets, long-lived assets, long-lived asset impairments, program cancellation reserves, chargebacks, accruals related to estimated tax liabilities, product return reserves, and other liabilities.

Cash and Cash Equivalents

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Cost includes purchase costs, reconditioning costs, dealer-installed accessories, and freight.

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 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.

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

Products, parts, accessories, and other inventories primarily consist of installable parts, as well as 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 and rebates.

A portion of the products, parts, accessories and other inventory includes capitalized labor relating to assembly.

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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 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).

Leases are recorded in accordance with Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) (see Note 10 — Lease Obligations).

The Company leases property and equipment throughout the United States primarily under finance and operating leases.

For leases with initial lease terms at commencement that are greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term.

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.

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

Certain of its lease agreements include fixed rental payments that are adjusted periodically for changes in the Consumer Price

Index (“CPI”).

Payments based on a change in an index or a rate, rather than a specified index or rate, are not considered in the determination of lease payments for purposes of measuring the related lease liability.

While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are typically treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.

Common area maintenance, property tax, and insurance associated with triple net leases, as well as payments based on revenue generated at certain leased locations, are included in variable lease costs, but are not included in the measurement of the lease liability.

Most of the Company’s real estate leases include one or more options to renew , with renewal terms that can extend the lease term from one to five years or more.

The exercise of lease renewal options is at the Company’s sole discretion.

If it is reasonably certain that the Company will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of the operating lease assets and operating lease liabilities.

The depreciable life of assets and leasehold improvements are limited to the shorter of the lease term or useful life if there is a transfer of title or purchase option reasonably certain of exercise.

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.

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.

Goodwill and Other Intangible Assets

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Revenue Recognition

Revenues are recognized by the Company when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

in exchange for those goods or services.

Sales and other taxes collected from the customer concurrent with revenue-producing activities are excluded from revenue.

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

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.

The Company does not disclose the value of unsatisfied performance obligations for revenue streams for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

The Company accounts for shipping and handling as activities to fulfill the promise to transfer the good to the customer and does not evaluate whether shipping and handling is a separate performance obligation

Good Sam Services and Plans

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

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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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Revenue and related expenses for consumer shows are recognized when the show occurs.

New and Used Vehicles

RV vehicle revenue consists of sales of new and used recreational vehicles, sales of RV parts and services, and commissions on the related finance and insurance contracts.

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Conditions to completing a sale include having an agreement with the customer, including pricing, whereby the sales price must be reasonably expected to be collected and having control transferred to the customer.

Products, Service and Other

Revenue from RV-related parts, service and other products sales 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.

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.

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.

Finance and Insurance, net

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

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

Chargebacks are estimated based on ultimate future cancellation rates by product type and year sold using a combination of actuarial methods and leveraging the Company’s historical experience from the past eight years , adjusted for new consumer trends.

The chargeback liabilities included in the estimate of variable consideration totaled $ 76.4 million and $ 68.8 million as of December 31, 2022 and December 31, 2021, respectively.

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.

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

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

Parts and Service Internal Profit

The Company’s parts and service departments recondition the majority of used vehicles acquired by the Company’s used vehicle departments and perform minor preparatory work on new vehicles acquired by the Company’s new vehicle departments.

The parts and service departments charge the new and used vehicle departments as if they were third parties in order to account for total activity performed by that department.

The revenue and costs applicable to revenue associated with the internal work performed by the Company’s parts and service departments are eliminated in consolidation.

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

Advertising Expenses

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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

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 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.

The Company has experienced, and expects to continue to experience, variability in revenue, net income, and cash flows as a result of annual seasonality in its business.

Because RVs are used primarily by vacationers and campers, demand for services, protection plans, products, and resources generally declines during the winter season, while sales and profits are generally highest during the spring and summer months.

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

The Company generates a disproportionately higher amount of its annual revenue in its second and third fiscal quarters, which include the spring and summer months.

The Company incurs additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in its retail locations and program costs.

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

Additionally, selling, general, and administrative (“SG&A”) expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the timing of acquisitions and the seasonality of the Company’s business.

The Company prefers to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the location to be remodeled and to ramp up operations ahead of the spring and summer months.

The timing of the Company’s acquisitions in the first and fourth quarters, coupled with generally lower revenue in these quarters has historically resulted in SG&A expenses as a percentage of gross profit being higher in these quarters.

Due to the Company’s seasonality, the possible adverse impact from other risks associated with its business, including atypical weather, consumer spending levels and general business conditions, is potentially greater if any such risks occur during the Company’s peak sales seasons.

Recently Adopted Accounting Pronouncements

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

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

This standard reduces complexity by removing specific exceptions to general principles related to intraperiod tax allocations, ownership changes in foreign investments, and interim period income tax accounting for year-to-date losses that exceed anticipated losses.

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 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.

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2021-08, Business Combinations (Topic 805):

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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.

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

Recently Issued Accounting Pronouncements

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”).

This standard clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction that prohibits the sale of an equity security, and requires specific disclosures related

to such an equity security.

The standard should be applied prospectively.

The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023, with early adoption permitted.

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

In September 2022, the FASB issued ASU 2022-04, Liabilities―Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”).

This standard requires a buyer in a supplier finance program to disclose qualitative and quantitative information about the program to allow users to understand the program’s nature, activity during the period, changes from period to period and potential magnitude.

Most of the disclosures are required only in annual reporting periods, except for the amount of obligation outstanding to be disclosed at each interim reporting period.

The standard should be applied retrospectively to each period in which a balance sheet is presented, except for the amendment on rollforward information, which should be applied prospectively.

The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

As this standard relates to additional disclosure requirements, the Company does not expect that the adoption of the provisions of this ASU will have a material impact on its consolidated financial statements.

Contract Assets

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As of December 31, 2022, 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):

The total unsatisfied performance obligations for these revenue streams at December 31, 2022 and the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands):

December 31, 2022

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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, 2021 and 2020 (in thousands):

Accounts Receivable

Accounts receivable consisted of the following at December 31, 2022 and 2021 (in thousands):

Good Sam Services and Plans

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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.

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, 2022 and 2021, FR maintained floor plan financing through the Eighth Amended and Restated Credit Agreement (“Floor Plan Facility”) entered into in September 2021, which amended the Seventh Amended and Restated Credit Agreement that was previously entered into in December 2017.

The Floor Plan Facility at December 31, 2022 allowed FR to borrow (a) up to $ 1.70 billion under a floor plan facility, (b) up to $ 30.0 million under a letter of credit facility and (c) up to a maximum amount outstanding of $ 70.0 million under the revolving line of credit.

The Floor Plan Facility also includes an accordion feature allowing FR, at its option, to request 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 Floor Plan Facility are not under any obligation to provide commitments in respect of any such increase.

The maturity date of the Floor Plan Facility is September 30, 2026.

As of December 31, 2022 and 2021, the applicable interest rate for the floor plan notes payable under the Floor Plan Facility was 6.01 % and 1.96 %, respectively.

Under the 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 (a) 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, (b) the base rate (as described below) plus the applicable rate of 0.40 % to 1.00 % determined based on FR’s consolidated current ratio.

As of December 31, 2022 and 2021, the applicable interest rate for revolving line of credit borrowings under the Floor Plan Facility was 6.21 % and 2.31 %, 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:

Under the 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:

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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.

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).

Additionally, under the Floor Plan Facility, the revolving line of credit borrowings are limited by a borrowing base calculation, which did not limit the borrowing capacity at December 31, 2022.

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.

These transfers reduce the amount of liability outstanding under the floor plan borrowings that would otherwise accrue interest, while retaining the ability to withdraw amounts from the FLAIR offset account subject to the financial covenants under the Floor Plan Facility.

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, 2022 and 2021, FR had $ 217.7 million and $ 92.1 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.

The maximum FLAIR percentage of outstanding floor plan borrowings is 35 % under the Floor Plan Facility.

The FLAIR offset account does not reduce the outstanding amount of loans under the Floor Plan Facility for purposes of determining the unencumbered borrowing capacity under the 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.

Management believes that no events have occurred at December 31, 2022 that would trigger a subjective acceleration clause.

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.

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.

FR was in compliance with all debt covenants at December 31, 2022 and 2021.

The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of December 31, 2022 and December 31, 2021 (in thousands):

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( 1,319,941 )

( 1,011,345 )

flooring line aggregate interest reduction account

Additional borrowing capacity

accounts payable for sold inventory

short-term payable for sold inventory (1)

purchase commitments

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Additional letters of credit capacity

(1) The short-term payable represents the amount due for sold inventory.

A payment for any floor plan units sold is due within three to ten business days of sale.

Due to the short term nature of these payables, the Company reclassifies the amounts from notes payable‒floor plan, net to accounts payable in the Consolidated Balance Sheets.

Changes in the vehicle floor plan payable are reported as cash flows from financing activities in the Consolidated Statements of Cash Flows.

Restructuring and Long-Lived Asset Impairment

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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 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.

Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company closed or divested 39 Outdoor Lifestyle Locations, two distribution centers, and 20 specialty retail locations relating to the 2019 Strategic Shift.

As of December 31, 2020, the Company 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.

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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.

As of December 31, 2022, the activities under the 2019 Strategic Shift have been completed with the exception of certain 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 had been delayed in part due to the 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.

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Through December 31, 2022, the Company has incurred $ 38.9 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 $ 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.

The additional amount of $ 2.8 million to $ 6.3 million represents similar costs that may be incurred through the year ending December 31, 2023 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842 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, 2023 on these leases if the Company is unable to terminate the leases under acceptable terms or offset the

lease costs through sublease arrangements.

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

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(1) These costs incurred in 2020 were primarily included in costs applicable to revenues – products, service and other in the consolidated statements of operations.

These costs incurred in 2019 were primarily included in selling, general and administrative expenses in the consolidated statements of operations.

(2) These costs were included in lease termination charges in the consolidated statements of operations.

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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, 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.

For the year ended December 31, 2020, costs of approximately $ 0.4 million were included in costs applicable to revenue – products, service and other.

For the years ended December 31, 2022, 2021 and 2020, costs of approximately $ 7.0 million, $ 10.7 million and $ 16.4 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, 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.

Charged to expense

Paid or otherwise settled

Balance at December 31, 2022

(1) Lease termination costs exclude the $ 1.3 million, $ 6.1 million and $ 0.2 million and $ 4.8 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, 2021 and 2022, respectively.

The Company evaluated the requirements of ASC No.

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During the years ended December 31, 2022, 2021 and 2020, the Company had indicators of impairment of the long-lived assets for certain of its locations.

Such indicators primarily included the update of certain assumptions in the long-lived asset impairment analysis for closed locations or based on the Company’s review of location performance in the normal course of business.

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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The long-lived asset impairment charge, subject to limitations described below, was calculated as the amount that the carrying value of the locations exceeded the estimated fair value.

The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort.

The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when those fair values can be determined without undue cost and effort.

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.

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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

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Outdoor Retail

Balance as of January 1, 2020 (excluding impairment charges)

Balance at January 1, 2021 (excluding impairment charges)

Accumulated impairment charges

Balance as of January 1, 2020

Balance as of December 31, 2020

Balance as of December 31, 2021

Balance at January 1, 2021

Balance at December 31, 2021

Balance at December 31, 2022

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.

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.

As a result of the interim goodwill impairment test, the Company determined that the fair value of the RV and Outdoor Retail reporting unit was substantially above its respective carrying amount, therefore, no goodwill impairment was recorded.

In the fourth quarter of 2022 and 2021, the Company performed its annual goodwill impairment test of the RV and Outdoor Retail, the Good Sam Show, and GSS Enterprise reporting units.

The Good Sam Media reporting unit was also included in the 2022 impairment test as the goodwill for that reporting unit related to a 2022 acquisition of a publication business.

The RV and Outdoor Retail reporting unit is comprised of the entire RV and Outdoor Retail segment.

The Good Sam Show and GSS Enterprise reporting units are comprised of a portion of the Good Sam Services and Plans Segment.

The Good Sam Show, GSS Enterprise, and Good Sam Media reporting units are comprised of a portion of the Good Sam Services and Plans Segment.

These annual goodwill impairment tests resulted in the determination that the estimated fair value of these reporting units exceeded their carrying value.

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Good Sam Services and Plans:

Membership and customer lists

Membership, customer lists and other

Trademarks and trade names

RV and Outdoor Retail:

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Good Sam Services and Plans:

Membership and customer lists

Membership, customer lists and other

RV and Outdoor Retail:

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Trademarks and trade names

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.

As of December 31, 2022, the approximate weighted average useful lives of our Good Sam Services and Plans finite-lived intangible assets for membership and customer lists are 5.3 years, trademarks and trade names are 15.0 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:

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The weighted-average useful life of all our finite-lived intangible assets is approximately 11.4 years.

During the first quarter of 2022, the Company recorded $ 8.8 million of incremental accelerated amortization from the adjustment of the useful lives of certain trademark and trade name intangible assets relating to brands not traditionally associated with RVs that the Company is phasing out.

Amortization expense of finite-lived intangibles for the years ended December 31, 2022, 2021, and 2020 was $ 13.5 million, $ 4.8 million and $ 4.6 million, respectively.

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Other accruals

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

(1) At December 31, 2021, this amount included a deferral of payroll taxes under the CARES Act of $ 14.6 million, all of which was paid in 2022.

Long-Term Debt

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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.

(1) Net of $ 14.2 million and $ 16.8 million of original issue discount at December 31, 2022 and 2021, respectively, and $ 5.8 million and $ 6.9 million of finance costs at December 31, 2022 and 2021, respectively.

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

Finance costs at December 31, 2020 were not significant.

(2) Net of $ 3.4 million and $ 0.2 million of finance costs at December 31, 2022 and 2021, respectively.

The aggregate future maturities of long-term debt at December 31, 2022, were as follows (in thousands):

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Senior Secured Credit Facilities

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 % .

As of December 31, 2022 and 2021, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, was party to a credit agreement (the “Credit Agreement”) for a senior secured credit facility (the “Senior Secured Credit Facilities”).

The Senior Secured Credit Facilities consist of a $ 1.4 billion term loan facility (the “Term Loan Facility”) and a $ 65.0 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 $ 25.0 million may be allocated to such letters of credit.

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

The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $ 3.5 million.

The December 31, 2022 principal payment was due in January 2023, since December 31, 2022 was on a weekend.

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 (as defined by the Credit Agreement) beginning with the year ended December 31, 2022.

No additional excess cash flow payment was required relating to 2022 and the Company does not expect an additional excess cash flow payment to be required relating to 2023.

Under the Senior Secured Credit Facilities, the Company has the ability to request 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 Credit Agreement).

The Company had requested and received an increase in the Term Loan Facility of $ 300.0 million in December 2021.

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

As of December 31, 2022 and 2021, the average interest rate on the Term Loan Facility was 6.80 % and 3.25 % , respectively, and the effective interest rate on the Term Loan Facility was 7.03 % and 3.46 % , respectively.

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

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Additional borrowing capacity

(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 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.

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 payment 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.

Management believes that no events have occurred at December 31, 2022 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 Net 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 is greater than 35 % of the total commitment on the 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 Credit Agreement.

As of December 31, 2022, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 35 % threshold.

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Real Estate Facilities

On October 27, 2022, subsidiaries of FRHP Lincolnshire, LLC (“FRHP”), an indirect wholly-owned subsidiary of CWGS, LLC, entered into a credit agreement with a syndication of banks for a real estate credit facility (the “M&T Real Estate Facility”) with aggregate maximum principal capacity of $ 250.0 million with an option that allows FRHP to request an additional $ 100.0 million of principal capacity.

The lenders under the M&T Real Estate Facility are not under any obligation to provide commitments in respect of any such increase.

The M&T Real Estate Facility bears interest at FRHP’s option of either (as defined in the credit agreement for the M&T Real Estate Facility):

(a) the Secured Overnight Financing Rate (“SOFR”) plus the applicable rate of 2.30 % or (b) the highest of (i) the Federal Funds Rate plus 1.80 %, (ii) the Prime Rate plus 1.30 %, or (iii) SOFR plus 2.30 %.

The M&T Real Estate Facility has an unused commitment fee of 0.20 % of the aggregate unused principal amount and it matures in October 2027.

Additionally, the M&T Real Estate Facility is subject to a debt service coverage ratio covenant (as defined in the credit agreement for the M&T Real Estate Facility).

All obligations under the M&T Real Estate Facility and the guarantees of those obligations, are secured, subject to certain exceptions, by the mortgaged real property assets.

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.

(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 CIBC Real Estate Facility”, the “Second CIBC Real Estate Facility”, and the “Third CIBC Real Estate Facility”, respectively, and collectively the “CIBC Real Estate Facilities”) with aggregate maximum principal capacities of $ 21.5 million, $ 9.0 million, and $ 10.1 million for the First CIBC Real Estate Facility, Second CIBC Real Estate Facility, and Third CIBC Real Estate Facility, respectively.

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

The CIBC Real Estate Facilities may be used to finance the acquisition of real estate assets and are secured by first priority security interest on the real estate assets acquired with the proceeds of the CIBC Real Estate Facilities.

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

The following table shows a summary of the outstanding balances, remaining available borrowings, and weighted average interest rate under the M&T Real Estate Facility and the CIBC Real Estate Facilities (collectively the “Real Estate Facilities”) at December 31, 2022:

As of December 31, 2022

(In thousands)

Outstanding (1)

Available (2)

Interest Rate

Real Estate Facilities

M&T Real Estate Facility

First CIBC Real Estate Facility

Second CIBC Real Estate Facility

Third CIBC Real Estate Facility

(1) Outstanding principal amounts are net of unamortized finance costs.

(2) Amounts cannot be reborrowed.

(3) Additional borrowings on the M&T Real Estate Facility are subject to a debt service coverage ratio covenant and to the property collateral requirements under the M&T Real Estate Facility.

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.

Management believes that no events have occurred at December 31, 2022 that would trigger a subjective acceleration clause.

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

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Lease Obligations

The Company leases property and equipment throughout the United States primarily under finance and operating leases.

For leases with initial lease terms at commencement that are greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term.

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.

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

Certain of its lease agreements include fixed rental payments that are adjusted periodically for changes in the Consumer Price Index (“CPI”).

Most of the Company’s real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more.

The exercise of lease renewal options is at the Company’s sole discretion.

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.

The Company leases most of the properties for its retail locations through 241 operating leases and 10 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.

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

As of December 31, 2022 and 2021, finance lease assets of $ 88.1 million and $ 75.7 million, respectively, were included in property and equipment, net in the accompanying consolidated balance sheets.

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Noncurrent lease obligations

Sale-Leaseback Arrangement Recorded as Financing Transaction

On February 8, 2022, FRHP Lincolnshire, LLC sold three properties for a total sale price of $ 28.0 million.

Concurrent with the sale of these properties, the Company entered into three separate twenty-year lease agreements, whereby the Company will lease back the properties from the acquiring company.

Under each lease agreement, FR has four consecutive options to extend the lease term for additional periods of five years for each option.

This transaction is accounted for as a financing transaction.

The Company recorded a liability for the amount received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining non-land assets will be zero at the end of the initial lease terms.

The financial liability is included in other long-term liabilities in the condensed consolidated balance sheet as of December 31, 2022.

CWH is organized as a Subchapter C corporation (“C-Corp”) and, as of December 31, 2022, is a 50.2 % owner of CWGS, LLC (see Note 18 — Stockholders’ Equity and Note 19 — Non-Controlling Interests).

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

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

federal entity-level income taxes.

However, certain CWGS, LLC subsidiaries, including Americas Road and Travel Club, Inc., Camping World, Inc.

(“CW”) prior to the LLC Conversion (defined below), and FreedomRoads RV, Inc.

and their wholly-owned subsidiaries, are subject to entity-level taxes as they are C-Corps.

Income Tax Expense

The components of the Company’s income tax expense from operations for the years ended December 31, 2022, 2021 and 2020 consisted of (in thousands):

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

Tax benefit from of transfer assets (3)

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

Effect of LLC Conversion (3)

(Decrease) increase in valuation allowance (4)

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Income tax expense

(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.

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

The amounts related to 2022 and 2020 were insignificant.

(2) The related income is taxable to the non-controlling interest.

(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.

(3) These amounts represent the tax impact of the LLC Conversion (defined and discussed below), which is comprised of a $ 209.4 million adjustment to CW’s deferred tax assets inclusive of tax operating losses, net of a $ 0.6 million reduction to CWH’s outside basis deferred tax asset.

(4) For 2022, these amounts include a $ 180.4 million decrease in valuation allowance associated with the LLC Conversion, partially offset by $ 16.8 million of increases to the valuation allowance for activity not related to the LLC conversion, which is primarily resulting from losses of CW for which no benefit is recognized for the U.S.

federal and non-unitary states, net of a $ 0.6 million decrease in valuation allowance associated with CWH’s outside basis deferred tax asset.

During 2021, and 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 CW in certain state deferred tax assets of $ 15.2 million, 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.

LLC Conversion

CW, including certain of its subsidiaries, were taxable as C-Corps and subject to entity-level taxes.

CW had historically generated operating losses for tax purposes.

Only losses subject to taxes in certain state jurisdictions were available to offset taxable income generated by the Company’s other businesses.

The Company completed the steps necessary to convert CW and certain of its subsidiaries from C-Corps to LLCs with an effective date of January 2, 2023 (the “LLC Conversion”).

All required filings for conversion to LLC were made by December 31, 2022.

Accordingly, the effect of the LLC Conversion was recorded during the year ended December 31, 2022, as the filings were perfunctory pursuant to the rules prescribed under ASC 740, Income Taxes.

Beginning with the year ending December 31, 2023, the operating losses of CW and its subsidiaries will offset taxable income generated by the Company’s other LLC businesses.

As a result, both income tax expense recognized by CWH and the amount of required tax distributions paid to holders of common units in CWGS, LLC, under the CWGS LLC Agreement, will decrease.

The LLC Conversion will allow the Company to more easily integrate its retail and dealership operations and more seamlessly share resources within the RV and Outdoor Retail segment, while providing an expected future cash flow benefit for the operating companies.

The LLC Conversion resulted in additional income tax expense in the year ended December 31, 2022 of $ 28.4 million, which was comprised of $ 208.8 million of gross deferred tax assets written off, partially offset by the release of $ 180.4 million of valuation allowance (see table above for reconciliation of income tax expense from operations to the federal statutory rate).

Deferred Income Taxes

and operating loss and tax credit carryforwards.

Significant items comprising the net deferred tax assets at December 31, 2022 and 2021 were (in thousands):

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(1) This amount is the deferred tax asset the Company recognizes for its book to tax basis difference in its investment in CWGS, LLC.

At December 31, 2021, certain subsidiaries of CWH had federal and state net operating loss carryforwards of approximately $ 532.8 million and $ 450.7 million, respectively, which will be able to offset future taxable income.

If not used, $ 55.5 million of federal and $ 450.7 million of state net operating losses will expire between 2022 and 2040, and $ 477.3 million will be carried forward indefinitely.

On January 1, 2019, the Company transferred certain assets relating to its Good Sam Club and co-branded credit card from its indirect wholly-owned subsidiary, GSS, an LLC, to its indirect wholly-owned subsidiary, CWI, a corporation.

As a result of this transfer, the Company recorded $ 12.2 million of net income tax expense due to the revaluation of certain deferred tax assets and related changes in valuation allowance.

As a result of transferring certain assets relating to its Good Sam Club and co-branded credit card from GSS to CWI, as described above, the Company also re-evaluated the impact on its Tax Receivable Agreement liability related to the reduction of future expected tax amortization.

The reduction in future expected tax amortization reduced the Tax Receivable Agreement liability by $ 7.5 million.

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus.

These measures may include deferring the due dates of income tax and payroll tax payments or other changes to their income and non-income-based tax laws.

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 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.

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 valuation allowance for the U.S.

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.

The partial valuation allowance for the Outside Basis Deferred Tax Asset increased by $ 20.0 million in the year ended December 31, 2021, compared to an increase of $ 9.8 million in the year ended December 31, 2020.

The increase in the year ended December 31, 2020 was primarily the result of increased ownership, net of a reduction in enacted state income tax rates.

The Company and its subsidiaries file U.S.

federal income tax returns and tax returns in various states.

The Company is not under any material audits in any jurisdiction.

With few exceptions, the Company is no longer subject to U.S.

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

The Company evaluates its deferred tax assets on a quarterly basis to determine if they can be realized and establishes valuation allowances when it is not more likely than not that all or a portion of the deferred tax assets can be realized.

At December 31, 2022 and 2021, the Company determined that all of its deferred tax assets (except those of CW at December 31, 2021 and the Outside Basis Deferred Tax Asset at December 31, 2022 and 2021) are more likely than not to be realized.

Prior to the LLC Conversion discussed above, the Company maintained a valuation allowance against the deferred tax assets of CW, excluding certain state deferred tax assets included in the state combined unitary income tax returns.

At December 31, 2022 , as a result of the LLC Conversion, the Company wrote off all of the remaining deferred tax assets and related valuation allowance associated with CW.

The Company maintains a 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.

Net Operating Loss Carryforwards

At December 31, 2022, certain subsidiaries of CWH had federal and state net operating loss carryforwards of approximately $ 622.5 million and $ 461.4 million, respectively, which will no longer be available after the LLC Conversion effective date on January 2, 2023.

The income tax expense associated with writing off these operating loss carryforwards at December 31, 2022 was $ 14.7 million, which consisted of $ 158.9 million of operating loss carryforward deferred tax assets, partially offset by the release of the related valuation allowance of $ 144.2 million.

Tax Legislation

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments had enacted measures to provide aid and economic stimulus.

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

For the years ended December 31, 2022 and 2021, there were no material impacts to the Company’s consolidated financial statements relating to the CARES Act other than the deferral of non-income-based payroll taxes of $ 29.2 million for the year ended December 31, 2020 of which $ 14.6 million was paid during each of the years ended December 31, 2022 and 2021.

Of this deferred amount, $ 14.6 million was included in accrued liabilities in the accompanying consolidated balance sheet at December 31, 2021.

Furthermore, on March 11, 2021 the American Rescue Plan Act, a $1.9 trillion tax-and-spending package aimed at addressing the continuing economic and health impacts of the coronavirus pandemic, was enacted.

American Rescue Plan Act provisions do not have a material impact on the Company’s income tax expense and effective tax rate.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.

The IRA contains several revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested restricted stock units (“RSUs”) and (b) treasury shares reissued in the same tax year for settlement of stock option exercises or vesting of RSUs.

While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, the Company will continue to evaluate its impact as further information becomes available.

Uncertain Tax Positions

As of December 31, 2022 and 2021, the balance of the Company’s uncertain tax positions was $ 4.5 million and $ 2.9 million, respectively.

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

Tax Receivable Agreement

The Company is party to a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P.

of 85 % of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P.

in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions or exchanges of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement.

The above payments are predicated on CWGS, LLC making an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a deemed exchange) of common units for cash or stock occur.

in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement.

The above payments are predicated on CWGS, LLC making an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption of common units for cash or stock occur.

These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P.

maintaining a continued ownership interest in CWGS, LLC.

In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC).

The Company expects to benefit from the remaining 15 % of the tax benefits, if any, which may be realized.

During the twelve months ended December 31, 2021 and 2020, 4,722,251 and 4,852,497 common units in CWGS, LLC, respectively, were exchanged for Class A common stock subject to the provisions of the Tax Receivable Agreement.

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.

During the twelve months ended December 31, 2022 and 2021, 50,000 and 4,722,251 common units in CWGS, LLC, respectively, were redeemed for Class A common stock subject to the provisions of the Tax Receivable Agreement.

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 redemption, 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, 2022, and December 31, 2021, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $ 170.6 million and $ 182.4 million, respectively, of which $ 10.9 million and $ 11.3 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.

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.

During the year ended December 31, 2022, the Continuing Equity Owners redeemed 50,000 common units in CWGS, LLC for 50,000 shares of the Company’s Class A common stock.

During the year ended December 31, 2022, the Tax Receivable Agreement liability and Deferred Tax Assets increased $ 0.5 million and $ 0.6 million, respectively, as a result of common unit redemptions and were recorded to additional paid-in capital (see the consolidated statements of stockholders’ equity).

Payments pursuant to the Tax Receivable Agreement relating to this redemption will begin during the year ending December 31, 2023.

During the year ended December 31, 2021, the Continuing Equity Owners, primarily Crestview Partners II GP, L.P., redeemed a combined 4.7 million common units in CWGS, LLC for 4.7 million shares of the Company’s Class A common stock.

During the year ended December 31, 2021, the Tax Receivable Agreement liability and Deferred Tax Assets increased $ 41.7 million and $ 26.5 million, respectively, as a result of common

unit redemptions and were recorded to additional paid-in capital (see the consolidated statements of stockholders’ equity).

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

On January 1, 2023, transferees of common units transferred by CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by Stephen Adams, a former member of the Company’s Board of Directors, and Marcus Lemonis, the Company’s Chairman and Chief Executive Officer, redeemed 2.0 million common units in CWGS, LLC for 2.0 million shares of the Company’s Class A common stock (see Note 19 — Non-Controlling Interests).

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 $ 6.3 million, $ 5.4 million, and $ 0.9 million, respectively.

Payments pursuant to the Tax Receivable Agreement relating to these redemptions would begin during the year ending December 31, 2024.

Income Tax Audits

For tax years beginning on or after January 1, 2018, CWGS, LLC is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”).

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Any payments that CWGS, LLC ultimately makes on behalf of its current partners will be reflected as a distribution, rather than tax expense, at the time such distribution is declared.

The Company and its subsidiaries file U.S.

federal income tax returns and tax returns in various states.

During the year ended December 31, 2022, one of CWGS, LLC’s indirect wholly-owned subsidiaries was notified by the Internal Revenue Service that their 2020 tax year was under examination.

The Company does not expect any material adjustments as a result of the examination.

The Company will continue to monitor the examination progress and evaluate its impact as further information becomes available.

The Company is not under any other material audits in any jurisdiction.

With few exceptions, the Company is no longer subject to U.S.

federal, state, and local income tax examinations by tax authorities for years before 2019.

Fair Value Measurements

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and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

For floor plan notes payable under the Floor Plan Facility, the amounts reported in the accompanying Consolidated Balance Sheets approximate the fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.

There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during 2022 and 2021 of assets and liabilities that are no t measured at fair value on a recurring basis.

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 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.

by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.

December 31, 2022

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Sponsorship and Other Agreements

The Company enters into sponsorship agreements from time to time.

The Company enters into sponsorship and brand licensing agreements from time to time.

Current sponsorship agreements run through 2024.

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 sponsorship and brand licensing agreements consist of annual fees payable in aggregate of $ 6.1 million in 2023, $ 5.4 million in 2024, $ 1.0 million in 2025, $ 1.0 million in 2026, $ 0.4 million in 2027 and $ 0.4 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.

Currently there are 87 subscription agreements for future software services consisting of annual fees payable as follows:

$ 15.9 million in 2023, $ 1.4 million in 2024, $ 0.1 million in 2025.

Expense is recognized ratably over the term of the agreement.

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The self-insurance accruals are calculated by actuaries and are based on claims filed and include estimates for claims incurred but not yet reported.

Projections of future losses, including incurred but not reported losses, are inherently uncertain because of the random nature of insurance claims and could be substantially affected if occurrences and claims differ significantly from these assumptions and historical trends.

Projections of future losses, including incurred but not reported losses, are inherently uncertain because of the varying nature of insurance claims and could be substantially affected if occurrences and claims differ significantly from these assumptions and historical trends.

In addition, the Company has obtained letters of credit as required by insurance carriers.

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This includes $ 11.4 million and $ 11.5 million as of December 31, 2022 and 2021, 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.

, 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.

(the “Ronge Complaint”).

On October 25, 2018, a different purported stockholder of the Company filed a putative class action lawsuit, captioned Strougo v.

Camping World Holdings, Inc.

, 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.

(the “Strougo Complaint”).

The Ronge and Strougo Complaints were consolidated and lead plaintiffs (the “ Ronge Lead Plaintiffs”) appointed by the court.

On February 27, 2019, the Ronge lead plaintiffs filed a consolidated complaint against the Company, certain of its officers, directors, Crestview Partners II GP, L.P.

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”).

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 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.

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 (the “Hunnewell Complaint”).

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

Camping World Holdings, Inc., et al.

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.

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.

On October 30, 2020, the Company, along with the other defendants, moved to dismiss this action.

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

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.

Janssen and Sandler Complaints

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

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(i) violations of Section 14(a) of the Securities Exchange Act for issuing proxy statements that allegedly omitted material information and allegedly included materially false and misleading financial statements;

(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;

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;

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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 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:

On December 2, 2022, the Janssen and Sandler Complaints were voluntarily dismissed without prejudice, no compensation in any form having passed directly or indirectly from any of the defendants to the plaintiffs or counsel for plaintiffs, and no promise to give any such compensation having been made with each party to bear their own costs.

Weissmann Complaint

On June 22, 2021, CWH 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”) (the “Weissmann Complaint”).

On October 8, 2021, Weissmann brought a counterclaim against FreedomRoads and Third-Party Defendants Marcus Lemonis, NBCUniversal Media, LLC, the Consumer National Broadcasting Company, CW, and Machete Productions (“Machete”) (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 CW:

(ii) fraud in the inducement;

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

On May 5, 2022, an agreed order was filed staying the litigation in favor of arbitration.

On May 31, 2022, CWH filed an arbitration demand against Weissmann for collection on the Note.

Weissmann filed his response and counterclaims, and third-party claims against FreedomRoads Holding Company, LLC, CW, Marcus Lemonis, NBCUniversal, and Machete on July 7, 2022.

On or about July 21, 2022, CWH and the other respondents filed their responses and affirmative defenses.

Tumbleweed Complaint

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.

filed a complaint against FreedomRoads, Marcus Lemonis, NBCUniversal Media, LLC, and Machete Productions in which Tumbleweed alleges claims in connection with the Note and its appearance on the reality television show The Profit (the “Tumbleweed Complaint”).

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

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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 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.

FreedomRoads, LLC in Los Angeles County Superior Court against FreedomRoads, LLC in which Woodings alleged that she and the putative class members, all of FreedomRoads, LLC’s non-exempt California employees, were not appropriately compensated for all wages earned in the form of commission, and that she and the putative class members often performed off-the-clock work for which they were not adequately compensated.

Woodings also alleged the following causes of action:

(1) Violation of California Labor Code §§ 1194, 1197, and 1197.1 (unpaid minimum wages);

(2) Violation of California Labor Code §§ 1198 (unpaid overtime);

(3) Violation of California Labor Code § 226.7 (unpaid meal period premiums);

(4) Violation of California Labor Code § 226.7 (unpaid rest period premiums);

(5) Violation of California Labor Code §§ 201 and 202 (final wages not timely paid);

(6) Violation of California Labor Code § 226(a) (non-compliant wage statements);

(8) Negligent Misrepresentation;

(9) Breach of Contract;

(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 (“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 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.

Code §§ 49.46.090 and 49.46.090 (failure to pay minimum wage);

Violation of Wash.

Code § 49.46.130 (failure to pay overtime);

Violation of Wash.

Code §§ 49.12.020 (failure to provide meal breaks);

Violation of Wash.

Code §§ 49.12.020 (failure to provide rest breaks);

Violation of Wash.

Code §§ 49.48.010 (payment of wages upon termination);

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, 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.

On April 21, 2022, the Court granted a motion to compel arbitration filed by NBCUniversal and joined by all defendants, including FreedomRoads, CWH, and Marcus Lemonis, compelling Tumbleweed’s claims to arbitration.

Tumbleweed served its arbitration demand on FreedomRoads, CW, and Marcus Lemonis on May 17, 2022.

CWH and Marcus Lemonis filed responses and affirmative defenses on May 31, 2022.

On July 20, 2022, pursuant to the JAMS streamlined arbitration rules, the Tumbleweed Complaint was consolidated together with the Weissmann Complaint.

The parties have exchanged initial discovery, but the Arbitrator has not yet set a schedule in the case.

Precise Complaint

On May 3, 2022, Lynn E.

Feldman, Esquire, in her capacity as the Chapter 7 Trustee for the Estate of Precise Graphix, LLC filed a complaint against NBCUniversal Media, LLC, Machete Corporation, and CW in which Trustee Feldman alleges claims on behalf of Precise Graphix in connection with its appearance on The

Profit and subsequent commercial relationship with CWH (the “Precise Complaint”).

Trustee Feldman alleges the following claims against defendants, including CWH:

(ii) False Promise;

(iii) Breach of Fiduciary Duty;

(iv) Breach of Contract;

(v) Breach of Oral Contract;

(vi) Fraud in the Inducement;

(vii) Fraud in the Inducement;

(viii) Negligent Misrepresentation;

(ix) Fraudulent Concealment;

(x) Conspiracy;

(xi) Unlawful Business Practices in Violation of California Business and Professions Code §17200;

(xii) Aiding and Abetting Breach of Fiduciary Duty;

and (xiii) Declaratory Judgment.

Precise did not serve the Precise Complaint on CWH.

On July 3, 2022, Precise Graphix filed its arbitration demand against CWH, NBCUniversal, and Machete alleging substantially similar claims as the Precise Complaint.

On or about July 19, 2022, CWH and the other respondents filed their responses and affirmative defenses.

The parties have exchanged initial discovery and set the matter for a two week hearing to begin April 3, 2023.

While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial statements.

The Company does not have sufficient information to estimate a possible loss or range of possible loss for the matters discussed above.

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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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, 2022 and December 31, 2021, outstanding standby letters of credit issued through our Floor Plan Facility were $ 11.4 million and $ 11.5 million, respectively, and outstanding standby letters of credit issued through the Senior Secured Credit Facilities were $ 4.9 million and $ 4.9 million, respectively (see Note 4 — Inventories and Floor Plan Payables and Note 9 — Long-Term Debt).

As of December 31, 2022 and December 31, 2021, outstanding surety bonds were $ 22.0 million and $ 19.1 million, respectively.

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FR leases various retail locations from managers and officers.

During 2021, 2020 and 2019, the related party lease expense for these locations was $ 2.2 million, $ 2.0 million and $ 2.2 million, respectively.

In January 2012, FR entered into a lease (the “Original Lease”) for the offices in Lincolnshire, Illinois, which was amended as of March 2013 (the “First Amendment”).

The Original Lease base rent was $ 29,000 per month that was amended to $ 31,500 per month in March 2013 by virtue of the First Amendment and is subject to annual increases.

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 .

During 2022, 2021 and 2020, the related party lease expense for these locations were $ 3.4 million, $ 2.2 million and $ 2.0 million, respectively.

In January 2012, FR entered into a lease for the offices in Lincolnshire, Illinois, which was amended as of March 2013, November 2019, October 2020, and October 2021 (the “Lincolnshire Lease”).

For the years ended December 31, 2022, 2021, and 2020, rental payments for the Lincolnshire Lease, including common area maintenance charges, were $ 0.9 million, $ 0.8 million, and $ 0.9 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.

The Company had an expense reimbursement payable to Mr.

Lemonis of $ 0.1 million at December 31, 2021, relating primarily to advertising expenses for the Company that were processed through Mr.

Lemonis’ social media accounts, which was paid in 2022.

In October 2022, the Company purchased a property to be used as office space in Lincolnshire, Illinois, for $ 4.5 million from the Company’s Chairman and Chief Executive Officer.

Other Transactions

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

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.

The Company from time to time purchases advertising services from Adams Radio of Fort Wayne LLC (“Adams Radio”), in which Mr.

Adams has an indirect 90 % interest.

The Company paid Adams Radio $ 0 million, $ 0 million, and $ 0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Lemonis exited his economic interest in Precise Graphix.

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

The Company paid Adams Outdoor Advertising, Inc., an entity controlled by Stephen Adams, a former member of the Company’s Board of Directors and for which Andris A.

Baltins serves as a member of its Board of Directors, $ 0.1 million for the year ended December 31, 2022 for advertising services.

The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A.

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In 2022 and 2021, 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 used cash and borrowings under its Floor Plan Facility 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.

Additionally, in October 2020, the RV and Outdoor Retail segment acquired the assets of an RV furniture distributor.

The Company expects to benefit from synergies from this RV furniture distributor acquisition with its private label RV offerings, installation services, and retail offerings.

In April 2022, the Good Sam Services and Plans segment acquired an outdoor publication for $ 3.4 million that the Company considers as a furtherance of its strategy to target a younger demographic of RV enthusiasts.

The acquired businesses were recorded at their estimated fair values under the acquisition method of accounting.

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

In 2022, the RV and Outdoor Retail segment acquired the assets of various RV dealerships and one RV service center comprised of 11 locations for an aggregate purchase price of approximately $ 213.6 million.

The purchases were partially funded through $ 59.9 million of borrowings under the Floor Plan Facility.

One of these acquired locations was not opened in 2022.

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.

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

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 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.

In 2022 and 2021, the Company purchased real property of $ 55.7 million and $ 129.2 million, respectively, of which $ 19.7 million and $ 31.4 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:

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships and the outdoor publication consist of the following:

Year Ended December 31,

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Operating lease assets

Finance lease asset

Accounts payable

Accrued liabilities

Operating lease liabilities - current

Operating lease liabilities - noncurrent

Finance lease liabilities - current

Finance lease liabilities - noncurrent

Current portion of operating lease liabilities

Other current liabilities

Operating lease liabilities, net of current portion

Total tangible net assets acquired

Intangible assets acquired:

Trademarks and trade names

Supplier and customer relationships

Total intangible assets acquired

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Cash payment net of floor plan financing

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 fair values above for the year ended December 31, 2022 are preliminary 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 year ended December 31, 2022, the fair values above include measurement period adjustments for valuation of acquired inventories, accounts receivable, accrued liabilities, and other current liabilities relating to dealership acquisitions during the year ended December 31, 2021.

For the year ended December 31, 2021, the fair values above include measurement period adjustments for valuation of acquired inventories, property and equipment, and accrued liabilities relating to dealership acquisitions during the year ended December 31, 2020.

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, 2022 and 2021, acquired goodwill of $ 138.8 million and $ 70.5 million is expected to be deductible for tax purposes.

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.

Included in the consolidated financial results for the years ended December 31, 2022 and 2021 were $ 83.3 million and $ 145.0 million of revenue, respectively, and $ 2.0 million of pre-tax loss and $ 13.0 million of pre-tax income, respectively, from the acquisitions as of their 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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Supplemental disclosures of cash flow information for the following periods (in thousands):

Year Ended December 31,

Cash paid during the period for:

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Non-cash financing activities:

Par value of Class A common stock issued in exchange for common units in CWGS, LLC

Par value of Class A common stock issued for redemption of common units in CWGS, LLC

Par value of Class A common stock issued for vested restricted stock units

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

Cost of treasury stock issued for vested restricted stock units

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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.

Effective January 1, 2012, the GSE 401(k) Plan was merged with the FreedomRewards 401(k) Plan.

Effective January 1, 2007, Camping World elected to begin participating in the FreedomRewards 401(k) Plan.

All employees over age 18 , including the executive officers, are eligible to participate in the Freedom Rewards 401(k) Plan.

Any favorable vesting was grandfathered for any affected participants pursuant to FreedomRewards 401(k) Plan Amendment No.

Any favorable vesting was permitted for any affected participants pursuant to FreedomRewards 401(k) Plan Amendment No.

3 signed December 15, 2011, and effective January 1, 2012.

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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.

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 the Company’s former director, 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 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.

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’ Equity (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’ Equity (Deficit) and Consolidated Statements of Cash Flows.

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 the portion of its regular quarterly cash dividend to holders of its Class A common stock that is unrelated to tax distributions 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.

Common Stock Economic and Voting Rights

Each share of the Company’s Class A common stock and Class B common stock entitles its holders to one vote per share on all matters presented to the Company’s stockholders generally;

provided that, for as long as ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and the Company’s Chairman and Chief Executive Officer, Marcus Lemonis, and its permitted transferees of common units (collectively, the “ML Related Parties”), directly or indirectly, beneficially own in the aggregate 27.5 % or more of all of the outstanding common units of CWGS, LLC, the shares of Class B common stock held by the ML Related Parties will entitle the ML Related Parties to the number of votes necessary such that the ML Related Parties, in the aggregate, cast 47 % of the total votes eligible to be cast by all of the Company’s stockholders on all matters presented to a vote of the Company’s stockholders generally.

provided that, for as long as ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of the Company’s former director, Stephen Adams, and the Company’s Chairman and Chief Executive Officer, Marcus Lemonis, and its permitted transferees of common units (collectively, the “ML Related Parties”), directly or indirectly, beneficially own in the aggregate 27.5 % or more of all of the outstanding common units of CWGS, LLC, the shares of Class B common stock held by the ML Related Parties will entitle the ML Related Parties to the number of votes necessary such that the ML Related Parties, in the aggregate, cast 47 % of the total votes eligible to be cast by all of the Company’s stockholders on all matters presented to a vote of the Company’s stockholders generally.

Additionally, the one share of Class C common stock entitles its holder to the number of votes necessary such that the holder casts 5 % of the total votes eligible to be cast by all of the Company’s stockholders on all matters presented to a vote of the Company’s stockholders generally.

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Only permitted transferees of common units held by the Class B Common Owners will be permitted transferees of Class B common stock.

Shares of Class B common stock will be canceled on a one-for-one basis upon the redemption or exchange any of the outstanding common units of CWGS, LLC held by the Class B Common Owners.

Shares of Class B common stock will be canceled on a one-for-one basis upon the redemption of any of the outstanding common units of CWGS, LLC held by the Class B Common Owners.

Upon the occurrence of certain change in control events, the Class C common stock would no longer have any voting rights, such share of the Company’s Class C common stock will be cancelled for no consideration and will be retired, and the Company will not reissue such share of Class C common stock.

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 November 2022, the Company received approximately $ 58,000 from short-swing profit disgorgement remitted by Marcus A.

Lemonis, Chairman and Chief Executive Officer of the Company, 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

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.

In October 2020, the Company’s Board of Directors initially 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 and January 2022, the Company’s Board of Directors authorized increases to the stock repurchase program for the repurchase of up to an additional $ 125.0 million and $ 152.7 million, respectively, of the Company’s Class A common stock and extended the stock repurchase program to expire on August 31, 2023 and December 31, 2025, respectively.

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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As of December 31, 2022, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $ 120.2 million.

As described in Note 11 — Income Taxes, the IRA imposes a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested RSUs and (b) treasury shares reissued in the same tax year for settlement of stock option exercises or vesting of RSUs.

Non-Controlling Interests

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Changes in CWH’s ownership interest in CWGS, LLC while CWH retains its controlling interest in CWGS, LLC will be accounted for as equity transactions.

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, 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)).

As such, future redemptions 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.

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

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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, 2022 and 2021, CWGS Holding, LLC, a wholly owned subsidiary of ML Acquisition Company, LLC, which is indirectly owned by each of Stephen Adams, a former member of the Company’s Board of Directors, and Marcus Lemonis, the Company’s Chairman and Chief Executive Officer gifted 2,000,000 and 540,699 common units of CWGS, LLC, respectively, in total to a college and hospital in 2022 (“2022 Common Unit Giftees”) and in total to a high school, university, and a charitable organization in 2021 (“2021 Common Unit Giftees”), which resulted in the corresponding 2,000,000 and 540,699 shares of Class B common stock, respectively, being transferred to the 2022 Common Unit Giftees and 2021 Common Unit Giftees, respectively.

On January 1, 2023, the 2022 Common Unit Giftees redeemed the 2,000,000 common units of CWGS, LLC for 2,000,000 shares of the Company’s Class A common stock, which also resulted in the cancellation of 2,000,000 shares of the Company’s Class B common stock that had been transferred to the 2022 Common Unit Giftees with no additional consideration provided.

During December 2021, on the day following each of the gifts, the 2021 Common Unit Giftees redeemed the 540,699 common units of CWGS, LLC 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 2021 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.

redeemed 4.0 million and 4.7 million common units of CWGS, LLC, respectively, 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.

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($ in thousands)

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

Net income attributable to Camping World Holdings, Inc.

Transfers to non-controlling interests:

Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options

(Decrease) increase in additional paid-in capital as a result of the vesting of restricted stock units

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 vesting of restricted stock units

Increase (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

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

Increase (decrease) in additional paid-in capital as a result of the redemption of common units of CWGS, LLC

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

Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC

Change from net income attributable to Camping World Holdings, Inc.

and transfers to non-controlling interests

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Outstanding at December 31, 2021

Options exercisable at December 31, 2021

Outstanding and exercisable at December 31, 2022

At December 31, 2022, all stock options were fully vested.

There were no exercises of stock options during the year ended December 31, 2019.

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 $ 0.6 million and $ 0.3 million for the years ended December 31, 2021 and 2020, respectively.

The intrinsic value of stock options exercised was $ 0.2 million, $ 3.5 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The actual tax benefit for the tax deductions from the exercise of stock options was not significant, $ 0.6 million and $ 0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

A summary of restricted stock unit activity for the year ended December 31, 2022 is as follows:

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The fair value of restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $ 35.1 million, $ 38.7 million, and $ 16.7 million, respectively.

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.

The actual tax benefit for the tax deductions from the vesting of restricted stock units was $ 4.9 million, $ 5.6 million, and $ 2.1 million for the years

ended December 31, 2022, 2021, and 2020, 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, 2022 was subject to limitations on deductibility of executive compensation.

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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.

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.

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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.

Flanigan’s resignation from his employment with the Company, he was previously granted awards of (a) 62,500 restricted stock units (“RSU”) on January 21, 2019 (the “First Award”), and (b) 60,000 RSUs on November 12, 2019 (the “Second Award”) pursuant to the Company’s 2016 Incentive Award Plan.

The consulting agreement provided, among other things, that (i) the remaining unvested 41,667 RSUs held by Mr.

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Basic and Diluted Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income (loss) available to Camping World Holdings, Inc.

Basic earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc.

by the weighted-average number of shares of Class A common stock outstanding during the period.

Diluted earnings per share of Class A common stock is computed by dividing net income (loss) available to Camping World Holdings, Inc.

Diluted earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc.

by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

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(In thousands except per share amounts)

Net income (loss)

net income (loss) attributable to non-controlling interests

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

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.

net income attributable to non-controlling interests

Net income attributable to Camping World Holdings, Inc.

reallocation of net income 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 redemption of common units of CWGS, LLC for Class A common stock

Net income attributable to Camping World Holdings, Inc.

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

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

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

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

Earnings per share of Class A common stock — basic

Earnings per share of Class A common stock — diluted

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:

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Other expense, net

Income (loss) before income taxes

Income before income taxes

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

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Total capital expenditures

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

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

41,466,964 issued and outstanding as of December 31, 2022;

69,066,445 issued and 41,466,964 outstanding as of December 31, 2021

Class C common stock, par value $ 0.0001 per share – one share authorized, issued and outstanding as of December 31, 2022 and 2021

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Treasury stock, at cost;

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

Retained earnings (deficit)

5,130,147 and 3,390,131 shares as of December 31, 2022 and 2021, respectively

Retained earnings

Total stockholders' equity

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Total operating expenses

Loss from operations

Other interest expense, net

Income from operations

Interest income, net

Tax Receivable Agreement liability adjustment

Other income, net

Equity in net income (loss) of subsidiaries

Income (loss) before income taxes

Equity in net income of subsidiaries

Income before income taxes

Income tax expense

Net income (loss)

See accompanying Notes to Condensed Financial Information

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Operating activities

Net income (loss)

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

Equity in net (income) loss of subsidiaries

Adjustments to reconcile net income to net cash used in operating activities:

Equity in net income of subsidiaries

Deferred tax expense

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Change in assets and liabilities, net of acquisitions:

Intercompany receivables

Prepaid income taxes and other assets

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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

Increase (decrease) in cash and cash equivalents

(Decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

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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.

CWGS, LLC completed the steps necessary to convert Camping World, Inc.

(“CW”) and certain of its subsidiaries from Subchapter C Corporations to limited liability companies (“LLCs”) with an effective date of January 2, 2023 (the “LLC Conversion”).

All required filings for conversion to LLC were made by December 31, 2022.

Accordingly, the effect of the LLC Conversion was recorded during the year ended December 31, 2022, as the filings were perfunctory pursuant to the rules prescribed under ASC 740, Income Taxes.

Beginning with the year ending December 31, 2023, the operating losses of CW and its subsidiaries will offset taxable income generated by CWGS, LLC’s other LLC businesses.

As a result, both income tax expense recognized by the Parent Company and the amount of required tax distributions paid to holders of common units in CWGS, LLC, under the CWGS LLC Agreement, will decrease.

The LLC Conversion will allow CWGS, LLC to more easily integrate its retail and dealership operations and more seamlessly share resources within the RV and Outdoor Retail segment, while providing an expected future cash flow benefit for the operating companies.

During the year ended December 31, 2022, the above LLC Conversion resulted in additional income tax expense for the Parent Company of $ 13.3 million.

Stock Repurchase Program

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

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.

During the years ended December 31, 2022 and 2021, the Parent Company reissued 852,508 and 1,171,197 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 Plan.

As of December 31, 2022, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $ 120.2 million.

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Non-cash financing activities:

Par value of Class A common stock issued in exchange for common units in CWGS, LLC

Par value of Class A common stock issued for redemption of common units in CWGS, LLC

Par value of Class A common stock issued for vested restricted stock units

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

Cost of treasury stock issued for vested restricted stock units

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(1) Additions to allowance for doubtful accounts are charged to expense.

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

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

(2) Additions to returns allowances are credited against revenue.

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

(In Thousands)

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Year ended December 31, 2020

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

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