Camping World Holdings, Inc. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and related notes included in Part II, Item 8 of this Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these 52 Table of Contents forward-looking statements as a result of various important factors, including those set forth under “Risk Factors” included in Part I, Item 1A of this Form 10-K, the “Cautionary Note Regarding Forward-Looking Statements” and in other parts of this Form 10-K. Except to the extent that differences among reportable segments are material to an understanding of our business taken as a whole, we present the discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operations on a consolidated basis. For purposes of this Form 10-K, we define an "Active Customer" as a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. Unless otherwise indicated, the date of measurement is December 31, 2022, our most recently completed fiscal quarter. In this Item 7, we discuss the results of operations for the years ended December 31, 2022 and 2021 and comparisons of the year ended December 31, 2022 to the year ended December 31, 2021. Discussions of the results of operations for the year ended December 31, 2020 and comparisons of the year ended December 31, 2021 to the year ended December 31, 2020 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on February 24, 2022. Overview Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV lifestyle. On December 31, 2022, we operated a total of 197 retail locations, with 196 of these selling and/or servicing RVs. See Note 1 ─ Summary of Significant Accounting Policies ─ Description of the Business to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. A summary of the changes in quantities and types of retail stores and changes in same stores from December 31, 2021 to December 31, 2022, are in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RV RV Service & Other ​ ​ ​ Same ​ Dealerships Retail Centers Retail Stores ​ Total ​ Store (2) Number of store locations as of December 31, 2021 ​ 175 ​ 10 ​ 2 ​ 187 ​ 158 Opened ​ 13 ​ 1 ​ — ​ 14 ​ — Re-opened ​ 1 ​ — ​ — ​ 1 ​ — Converted (1) ​ 1 ​ (1) ​ — ​ — ​ — Temporarily closed ​ — ​ (1) ​ — ​ (1) ​ (1) Closed (1) ​ (1) ​ (2) ​ (1) ​ (4) ​ (2) Achieved designation of same store (2) ​ — ​ — ​ — ​ — ​ 11 Number of store locations as of December 31, 2022 ​ 189 ​ 7 ​ 1 ​ 197 ​ 166 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) One RV dealership was converted to a retail clearance center, which was subsequently closed. (2) Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year. We executed a limited rollout of our online RV sales process on our RVs.com domain in one state during the quarter ended June 30, 2022. We plan to expand RVs.com to additional markets after implementing enhancements, with limited additional investment, based on data gathered during the test rollout. 53 Table of Contents Segments We operate two reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. We identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions. See Note 1 — Summary of Significant Accounting Policies — Description of the Business and Note 22 — Segment Information to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information regarding our reportable segments. The following table presents percentages of total revenue and total gross profit for our two reportable segments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 2020 As percentage of total revenue: ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ 2.8% ​ ​ 2.6% ​ ​ 3.3% RV and Outdoor Retail ​ 97.2% ​ ​ 97.4% ​ ​ 96.7% As percentage of total gross profit (1) : ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ 5.3% ​ ​ 4.4% ​ ​ 6.4% RV and Outdoor Retail ​ 94.7% ​ ​ 95.6% ​ ​ 93.6% ​ (1) Gross profit is presented exclusive of depreciation and amortization, which is presented separately in operating expenses. ​ COVID-19 As discussed in Note 1 ─ Summary of Significant Accounting Policies ─ COVID-19 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, the COVID-19 pandemic has had a primarily favorable impact on our business beginning in May 2020. Within a few months of the initial significant outbreaks of COVID-19 in the U.S., we experienced elevated demand for RVs and many of our related products and services. We believe 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. We believe this has 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, we were able to procure more new vehicles from our suppliers than were sold and new towables inventory levels, in particular, normalized in early 2022. As other modes of transportation and vacation options have mostly recovered from the impact of COVID-19, the increased demand for our products has dropped from the peak levels experienced in recent years. Historically, most of our consumer shows and events took place during the first quarter. As a consequence of COVID-19, we held fewer consumer shows in 2021 and 2022. Moving forward, we have shifted our consumer show strategy to focus on shows that support our own Camping World dealerships as opposed to hosting other competing dealerships. We expect to annually host fewer than five ticketed in-person consumer shows under the Good Sam brand in future years. We do not expect consumer shows to be material to our consolidated financial statements. We have also held several of our virtual RV Show events, branded “the Ultimate RV Show”, beginning in 2020 and the Ultimate RV Show has evolved to be a multi-channel experience that is both online and in store locations. 54 Table of Contents Cybersecurity Incident We rely on the integrity, security and successful functioning of our information technology systems and network infrastructure (collectively, “IT Systems”) across our operations. In February 2022, we announced 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 our temporary inability to access certain of our IT Systems, caused by the disabling of some of our IT Systems by the threat actor and our temporarily taking certain other IT Systems offline as a precautionary measure. We engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation, which was completed as of September 30, 2022. We are continuing to take measures to enhance our IT Systems. Through our investigation, we 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. We complied with notification obligations in accordance with relevant law and are continuing to cooperate with law enforcement. We have incurred costs related to investigation, containment, and remediation and expect 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 our 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 us and certain of our 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. We do not expect that the Cybersecurity Incident will cause future disruptions to our business or that the Cybersecurity Incident, including anticipated costs associated with pending litigation, will have a future material impact on our business, results of operations or financial condition. Key Performance Indicators We evaluate the results of our overall business based on a variety of factors, including the number of Active Customers and Good Sam members, revenue and same store revenue, vehicle units, and same store vehicle units, gross profit and gross profit per vehicle sold, gross margin, finance and insurance per vehicle (“PV”), vehicle inventory turnover, and Adjusted EBITDA and Adjusted EBITDA margin. Same store revenue. Same store revenue measures the performance of a retail location during the current reporting period against the performance of the same retail location in the corresponding period of the previous year. Our same store revenue calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year. As of December 31, 2022, 2021, and 2020, we had a base of 166, 158, and 142 same stores, respectively. For the years ended December 31, 2022, 2021 and 2020, our aggregate same store revenue was $5.9 billion, $5.8 billion, and $4.5 billion, respectively. With same store revenue driven by the number of transactions and the average transaction price, changes in our mix of new vehicle sales has in the past negatively impacted, and in the future is likely to negatively impact, our new vehicle same store revenue. Over the past several years, we have seen a shift in our overall mix of new RV sales towards travel trailer vehicles, which tend to carry lower average selling prices than other classes of new RV vehicles. From 2015 to 2022, total new vehicle travel trailer units have increased from 62% to 76% of total new vehicle unit sales but from 2015 to 2022 our average selling price of a new vehicle unit had increased from $39,853 to $45,834. Due to lower industry supply of travel trailers and motorhomes during much of 2020 and 2021, both average cost and average sales price have increased. If supply chain costs decline over the next twelve months, average sales price may again decline and impact our same store revenue. Gross Profit and Gross Margins . Gross profit is our total revenue less our total costs applicable to revenue. Our total costs applicable to revenue primarily consists of the cost of goods and cost of sales, exclusive of depreciation and amortization. Gross margin is gross profit as a percentage of revenue. 55 Table of Contents Our gross profit is variable in nature and generally follows changes in our revenue. Sales of new vehicles generally result in a lower gross margin than other areas of our business, including used vehicles, repair service and installation work, RV equipment and accessories, outdoor equipment and accessories and finance and insurance products. While gross margins for our RV and Outdoor Retail segment are lower than gross margins for our Good Sam Services and Plans, this segment generates significant gross profit and is our primary means of acquiring new customers, to whom we then cross sell our higher margin products and services with recurring revenue. We believe the overall growth of our RV and Outdoor Retail segments will allow us to continue to drive growth in gross profit due to our ability to cross sell our Good Sam Services and Plans to our Active Customer base. Gross margin in our RV and Outdoor Retail segment was positively impacted in 2020, 2021 and, to a lesser extent, 2022 by increased demand for vehicles and reduced supply leading to higher average prices per unit. However, gross margins in 2022 were negatively impacted by the higher cost of new vehicles that was driven largely from the reduced supply of new vehicles during much of 2021. Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA Margin are some of the primary metrics management uses to evaluate the financial performance of our business. Adjusted EBITDA and Adjusted EBITDA Margin are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics. We use Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance as follows: • as a measurement of operating performance to assist us in comparing the operating performance of our business on a consistent basis, and remove the impact of items not directly resulting from our core operations; • for planning purposes, including the preparation of our internal annual operating budget and financial projections; and • to evaluate the performance and effectiveness of our operational strategies. For the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, a reconciliation of Adjusted EBITDA to net income, a reconciliation of Adjusted EBITDA Margin to net income margin, and a further discussion of how we utilize these non-GAAP financial measures and their limitations, see “Non-GAAP Financial Measures” below. Industry Trends According to the RV Industry Association’s survey of manufacturers, wholesale shipments of recreational vehicles for 2021 were 600,240 units, a new record for RV shipments for any year. Shipments for the year ended December 31, 2021 increased 39.5% over the year ended December 31, 2020 and surpassed 2017, the previous record year, by 19.0%. Wholesale shipments for 2022 were 493,268 units, 17.8% less than the comparable period in 2021, the all-time record year for shipments, but were still the third best year on record. Thor Industries, our largest supplier of RVs, disclosed in its Form 10-Q for the three months ended October 31, 2022 as filed with the Securities and Exchange Commission on December 7, 2022 that its North American RV order backlog as of October 31, 2022 had declined 70% compared to October 31, 2021. Thor Industries also disclosed that it believes that as of October 31, 2022, the North American RV independent dealer inventory levels were at historical, normalized levels for most of its towable products and generally below historical levels for its motorized products. 56 Table of Contents The per unit cost of new vehicles has been significantly higher than we experienced prior to the COVID-19 pandemic, which was largely driven by the RV manufacturers’ supply constraints described above and the strong demand for new vehicles, as well as the impact of higher inflation and interest rates. These higher costs have been partially mitigated by the higher average selling prices on new vehicles, but we experienced a decrease in new vehicle gross margins during the year ended December 31, 2022 as a result of these higher costs. We expect average selling prices may decrease over time as industry-wide supply continues to normalize, which would continue to reduce new vehicle gross margins. We will continue to evaluate supplier pricing, among other criteria, as part of our vehicle procurement process. Inflation In 2022, we experienced the impact of inflation on our operations, particularly with the increased cost of new vehicles. The price risk relating to new vehicles includes the cost from the manufacturer, as well as freight and logistics costs. Each of these costs have been impacted, to differing degrees, by factors such as high demand for product, supply chain disruptions, labor shortages, and increased fuel costs, some of which were caused, in part, by the COVID-19 pandemic. We expect these cost pressures to continue into 2023. Inflationary factors, such as increases to our product and overhead costs, may adversely affect our operating results if the selling prices of our products and services do not increase proportionately with those increased costs or if demand for our products and services declines as a result of price increases to address inflationary costs. We finance substantially all of our new vehicle inventory and certain of our used vehicle inventory through revolving floor plan arrangements. Inflationary increases in the costs of new and/or used vehicles financed through the revolving floor plan arrangement result in an increase in the outstanding principal balance of the revolving floor plan arrangement. Additionally, our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Further, the cost of remodeling acquired retail locations and constructing new retail locations is subject to inflationary increases in the costs of labor and material, which results in higher rent expense on new retail locations. Finally, our credit agreements include interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation. 2019 Strategic Shift In 2019, we made a strategic decision to refocus our business around our core RV competencies. During the year ended December 31, 2021, we completed our analysis of our retail product offerings that are not RV related as part of the 2019 Strategic Shift. The information available at the inception of the 2019 Strategic Shift relating to these product categories was incomplete based on the relative immaturity of the locations offering these products and was further delayed by the impact of COVID-19 on consumer buying behavior (see “COVID-19” discussion in this Form 10-K). During the year ended December 31, 2021, we recorded $15.0 million of incremental reserve charges relating to product categories that are not RV related. 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 and the costs may be greater than expected. We expect to incur lease termination costs and other associated costs of $4.4 million to $15.9 million during 2023 relating to these leases on previously closed locations under the 2019 Strategic Shift. Any restructuring costs, other than lease termination costs, relating to the 2019 Strategic Shift recognized after December 31, 2022 will not be included as an adjustment to our Non-GAAP Financial Measures (as defined in “Non-GAAP Financial Measures” in Part II, Item 7 of this Form 10-K). See Note 5 — 57 Table of Contents Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. The following table details the costs incurred associated with the 2019 Strategic Shift (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ 2022 2021 2020 ​ Restructuring costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One-time termination benefits (1) ​ $ — ​ $ — ​ $ 231 ​ Lease termination costs (2) ​ ​ 1,316 ​ ​ 1,431 ​ ​ 4,432 ​ Incremental inventory reserve charges (3) ​ ​ — ​ ​ 15,017 ​ ​ 543 ​ Other associated costs (4) ​ ​ 7,026 ​ ​ 10,684 ​ ​ 16,835 ​ Total restructuring costs ​ $ 8,342 ​ $ 27,132 ​ $ 22,041 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These costs incurred in 2020 were primarily included in costs applicable to revenues – products, service and other in the consolidated statements of operations. (2) These costs were included in lease termination charges in the consolidated statements of operations. This reflects termination fees paid, net of any gain from derecognition of the related operating lease assets and liabilities. (3) These costs were included in costs applicable to revenue – products, service and other in the consolidated statements of operations. (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, 2022, 2021 and 2020, costs of approximately $0 million, $0 million and $0.4 million, respectively, were included in costs applicable to revenue – products, service and other, and $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. ​ Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods Beginning in the fourth quarter of 2021 and continuing through the fourth quarter of 2022, the Company has experienced sequential decreases in new vehicle gross margin, primarily from the higher cost of new vehicles from the lower industry supply of travel trailers and motorhomes for much of 2021. However, fourth quarter 2022 gross margins were higher than the Company experienced in any of the pre-COVID-19 pandemic periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic. Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in the fourth quarter of 2022 compared to the pre-COVID-19 pandemic periods of 2016 to 2019. The Company is continuing to execute on its used vehicle strategy, which differentiates it from the competition with proprietary tools, such as the RV Valuator, focus on the development and retention of its service technician team, and investment in its service bay infrastructure. The following table presents vehicle gross margin and unit sale mix for the three months ended December 31, 2022 and pre-COVID-19 pandemic periods of the three months ended December 31, 2019, 2018, 2017, and 2016: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended December 31, ​ ​ 2022 ​ 2019 (1) ​ 2018 (1) ​ 2017 (1) ​ 2016 (1) Gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ 16.0% ​ 13.1% ​ 11.8% ​ 14.1% ​ 13.4% Used vehicles ​ 23.0% ​ 19.8% ​ 21.4% ​ 22.0% ​ 21.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unit sales mix ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ 50.1% ​ 57.3% ​ 63.4% ​ 66.3% ​ 60.0% Used vehicles ​ 49.9% ​ 42.7% ​ 36.6% ​ 33.7% ​ 40.0% (1) These periods were prior to the COVID-19 Pandemic. 58 Table of Contents Cost Reduction Initiatives in Fourth Quarter of 2022 During the fourth quarter of 2022, we began implementing a series of cost reduction initiatives, which included reduced headcount in the fourth quarter and the elimination or reduction of underperforming assets, locations, and business lines. During the year ending December 31, 2023, the headcount reductions are expected to result in cost savings which will largely be offset by other increases in wages and benefits. During the year ending December 31, 2023, the other cost reduction initiatives are expected to result in cost savings of between $30.0 million and $35.0 million, primarily as components of selling, general and administrative costs. These other cost reduction amounts do not include offsets for additional expenditures for other initiatives in 2023, which we currently do not believe will be material. Costs incurred to implement these cost reduction measures have not been, and are not expected to be, material. While many of these cost reduction measures were completed during the fourth quarter of 2022, most of the remaining cost reduction measures will be completed by the end of the first half of 2023. Our Corporate Structure Impact on Income Taxes Our corporate structure is commonly referred to as an “Up-C” structure and typically results in a different relationship between income before income taxes and income tax expense than would be experienced by most public companies with a more traditional corporate structure. More traditional structures are typically comprised predominately of Subchapter C corporations (“C-Corps”) and/or lacking significant non-controlling interests with holdings through limited liability companies or partnerships. Typically, most of our income tax expense is recorded at the CWH level, our public holding company, based on its allocation of taxable income from CWGS, LLC. More specifically, as discussed in Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, CWH is organized as a 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 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). CWGS, LLC is organized as a limited liability company and treated as a partnership for U.S. federal and most applicable state and local income tax purposes and, as such is generally not subject to any U.S. federal entity-level income taxes (“Pass-Through”), with the exception of Americas Road and Travel Club, Inc., Camping World, Inc. (“CW”) (prior to the conversion of CW and certain other subsidiaries to limited liability companies (the “LLC Conversion”) (see Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K)), and FreedomRoads RV, Inc. and their wholly-owned subsidiaries, which are C-Corps embedded within the CWGS, LLC structure. CWH receives an allocation of its share of the net income of CWGS, LLC based on CWH’s weighted-average ownership of CWGS, LLC for the period. CWH recognizes income tax expense on its pre-tax income including its portion of this income allocation from CWGS, LLC primarily relating to Pass-Through entities. The income tax relating to the net income of CWGS, LLC allocated to CWH that relates to separately taxed C-Corp entities is recorded within the consolidated results of CWGS, LLC. No income tax expense is recognized by the Company for the portion of net income of CWGS, LLC allocated to non-controlling interest other than income tax expense recorded by CWGS, LLC. Rather, tax distributions are paid to the non-controlling interest holders, which are recorded as distributions to holders of LLC common units in the consolidated statements of cash flows. CWH is subject to U.S. federal, state and local income taxes with respect to its allocable share of any taxable income of CWGS, LLC and is taxed at the prevailing corporate tax rates. For the years ended December 31, 2022, 2021 and 2020, the Company used effective income tax rate assumptions between 25.0% and 25.5%, for income adjustments applicable to CWH when calculating the adjusted net income attributable to Camping World Holdings, Inc. — basic and diluted (see “Non-GAAP Financial Measures” in Part II, Item 7 of this Form 10-K). CWGS, LLC may be liable for various other state and local taxes. By January 2, 2023, the “LLC Conversion” (see Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K) was completed. The Company expects that, beginning with the year ending December 31, 2023, the LLC Conversion allows certain losses that previously would have been confined within the C-Corp portion of CWGS, LLC to instead offset a portion of income generated by the 59 Table of Contents Pass-Through portion of CWGS, LLC, which would reduce the amount of income tax expense recorded by CWH. The LLC Conversion is also expected to reduce the amount of tax distributions required to be paid by CWGS, LLC to CWH and the non-controlling interest holders under the CWGS LLC Agreement beginning with the year ending December 31, 2023. The following table presents the allocation of CWGS, LLC’s C-Corp and Pass-Through net income to CWH, the allocation of CWGS, LLC’s net income to non-controlling interests, income tax expense recognized by CWH, and other items: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ($ in thousands) 2022 2021 2020 C-Corp portion of CWGS, LLC net loss allocated to CWH ​ $ (37,500) ​ $ (19,177) ​ $ (22,248) ​ Pass-Through portion of CWGS, LLC net income allocated to CWH ​ ​ 252,771 ​ ​ 397,834 ​ ​ 195,866 ​ CWGS, LLC net income allocated to CWH ​ ​ 215,271 ​ ​ 378,657 ​ ​ 173,618 ​ CWGS, LLC net income allocated to noncontrolling interests ​ ​ 214,084 ​ ​ 363,614 ​ ​ 221,870 ​ CWGS, LLC net income ​ ​ 429,355 ​ ​ 742,271 ​ ​ 395,488 ​ Tax Receivable Agreement liability adjustment ​ ​ 114 ​ ​ (2,813) ​ ​ 141 ​ Income tax expense recorded by CWH ​ ​ (79,054) ​ ​ (97,831) ​ ​ (51,517) ​ Other incremental CWH net income ​ ​ 616 ​ ​ 448 ​ ​ 103 ​ Net income ​ $ 351,031 ​ $ 642,075 ​ $ 344,215 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents further information on income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ($ in thousands) 2022 2021 2020 Income tax expense recorded by CWH (1) ​ $ (79,054) ​ $ (97,831) ​ $ (51,517) ​ Income tax (expense) benefit recorded by CWGS, LLC (2) ​ ​ (20,030) ​ ​ 5,707 ​ ​ (6,226) ​ Income tax expense ​ $ (99,084) ​ $ (92,124) ​ $ (57,743) ​ (1) During the year ended December 31, 2022, this amount included $13.3 million of income tax expense relating to the LLC Conversion. This income tax expense was primarily from the write-off of deferred tax assets, which was partially offset by the release of valuation allowance. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (2) During the year ended December 31, 2022, this amount included $15.2 million of income tax expense relating to the LLC Conversion. This income tax expense was primarily from the write-off of deferred tax assets, which was partially offset by the release of valuation allowance. Additionally, during the year ended December 31, 2021, this amount included benefits to income tax of $15.2 million for the release of valuation allowance at CW, which, in 2021 and 2022 prior to the LLC Conversion, became available to offset state combined income in certain unitary states due to the Company’s increased ownership in CWGS, LLC. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. ​ 60 Table of Contents Results of Operations Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 The following tables set forth information comparing the components of net income for the years ended December 31, 2022 and 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Percent of ​ ​ ​ ​ Percent of ​ Favorable/ (Unfavorable) ​ ($ in thousands) Amount Revenue Amount Revenue $ % Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ $ 192,128 ​ 2.8% ​ $ 180,722 ​ 2.6% ​ $ 11,406 ​ 6.3% ​ RV and Outdoor Retail: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ ​ 3,228,077 ​ 46.3% ​ ​ 3,299,454 ​ 47.7% ​ ​ (71,377) ​ (2.2%) ​ Used vehicles ​ ​ 1,877,601 ​ 26.9% ​ ​ 1,686,217 ​ 24.4% ​ ​ 191,384 ​ 11.3% ​ Products, service and other ​ ​ 999,214 ​ 14.3% ​ ​ 1,100,942 ​ 15.9% ​ ​ (101,728) ​ (9.2%) ​ Finance and insurance, net ​ ​ 623,456 ​ 8.9% ​ ​ 598,475 ​ 8.7% ​ ​ 24,981 ​ 4.2% ​ Good Sam Club ​ ​ 46,537 ​ 0.7% ​ ​ 47,944 ​ 0.7% ​ ​ (1,407) ​ (2.9%) ​ Subtotal ​ ​ 6,774,885 ​ 97.2% ​ ​ 6,733,032 ​ 97.4% ​ ​ 41,853 ​ 0.6% ​ Total revenue ​ ​ 6,967,013 ​ 100.0% ​ ​ 6,913,754 ​ 100.0% ​ ​ 53,259 ​ 0.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit (exclusive of depreciation and amortization shown separately below): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ ​ 120,162 ​ 1.7% ​ ​ 107,845 ​ 1.6% ​ ​ 12,317 ​ 11.4% ​ RV and Outdoor Retail: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ ​ 651,801 ​ 9.4% ​ ​ 875,976 ​ 12.7% ​ ​ (224,175) ​ (25.6%) ​ Used vehicles ​ ​ 459,548 ​ 6.6% ​ ​ 438,423 ​ 6.3% ​ ​ 21,125 ​ 4.8% ​ Products, service and other ​ ​ 368,204 ​ 5.3% ​ ​ 394,868 ​ 5.7% ​ ​ (26,664) ​ (6.8%) ​ Finance and insurance, net ​ ​ 623,456 ​ 8.9% ​ ​ 598,475 ​ 8.7% ​ ​ 24,981 ​ 4.2% ​ Good Sam Club ​ ​ 39,113 ​ 0.6% ​ ​ 40,741 ​ 0.6% ​ ​ (1,628) ​ (4.0%) ​ Subtotal ​ ​ 2,142,122 ​ 30.7% ​ ​ 2,348,483 ​ 34.0% ​ ​ (206,361) ​ (8.8%) ​ Total gross profit ​ ​ 2,262,284 ​ 32.5% ​ ​ 2,456,328 ​ 35.5% ​ ​ (194,044) ​ (7.9%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative expenses ​ ​ 1,606,984 ​ 23.1% ​ ​ 1,573,609 ​ 22.8% ​ ​ (33,375) ​ (2.1%) ​ Debt restructure expense ​ ​ — ​ 0.0% ​ ​ 12,078 ​ 0.2% ​ ​ 12,078 ​ nm ​ Depreciation and amortization ​ ​ 80,304 ​ 1.2% ​ ​ 66,418 ​ 1.0% ​ ​ (13,886) ​ (20.9%) ​ Long-lived asset impairment ​ ​ 4,231 ​ 0.1% ​ ​ 3,044 ​ 0.0% ​ ​ (1,187) ​ (39.0%) ​ Lease termination ​ ​ 1,614 ​ 0.0% ​ ​ 2,211 ​ 0.0% ​ ​ 597 ​ 27.0% ​ Loss (gain) on sale or disposal of assets ​ ​ 622 ​ 0.0% ​ ​ (576) ​ (0.0%) ​ ​ (1,198) ​ nm ​ Total operating expenses ​ ​ 1,693,755 ​ 24.3% ​ ​ 1,656,784 ​ 24.0% ​ ​ 36,971 ​ 2.2% ​ Income from operations ​ ​ 568,529 ​ 8.2% ​ ​ 799,544 ​ 11.6% ​ ​ (231,015) ​ (28.9%) ​ Other expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Floor plan interest expense ​ ​ (42,031) ​ (0.6%) ​ ​ (14,108) ​ (0.2%) ​ ​ (27,923) ​ (197.9%) ​ Other interest expense, net ​ ​ (75,745) ​ (1.1%) ​ ​ (46,912) ​ (0.7%) ​ ​ (28,833) ​ (61.5%) ​ Loss on debt restructure ​ ​ — ​ 0.0% ​ ​ (1,390) ​ (0.0%) ​ ​ 1,390 ​ nm ​ Tax Receivable Agreement liability adjustment ​ ​ 114 ​ 0.0% ​ ​ (2,813) ​ (0.0%) ​ ​ 2,927 ​ nm ​ Other expense, net ​ ​ (752) ​ (0.0%) ​ ​ (122) ​ (0.0%) ​ ​ (630) ​ nm ​ Total other expense ​ ​ (118,414) ​ (1.7%) ​ ​ (65,345) ​ (0.9%) ​ ​ (53,069) ​ (81.2%) ​ Income before income taxes ​ ​ 450,115 ​ 6.5% ​ ​ 734,199 ​ 10.6% ​ ​ (284,084) ​ (38.7%) ​ Income tax expense ​ ​ (99,084) ​ (1.4%) ​ ​ (92,124) ​ (1.3%) ​ ​ (6,960) ​ (7.6%) ​ Net income ​ ​ 351,031 ​ 5.0% ​ ​ 642,075 ​ 9.3% ​ ​ (291,044) ​ (45.3%) ​ Less: net income attributable to non-controlling interests ​ ​ (214,084) ​ (3.1%) ​ ​ (363,614) ​ (5.3%) ​ ​ 149,530 ​ 41.1% ​ Net income attributable to Camping World Holdings, Inc. ​ $ 136,947 ​ 2.0% ​ $ 278,461 ​ 4.0% ​ $ (141,514) ​ (50.8%) ​ ​ ​ ​ nm- not meaningful 61 Table of Contents Supplemental Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase ​ ​ Percent ​ ​ 2022 2021 (decrease) ​ Change Unit sales ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ ​ 70,429 ​ ​ 77,777 ​ ​ (7,348) ​ ​ ​ (9.4%) Used vehicles ​ ​ 51,325 ​ ​ 48,938 ​ ​ 2,387 ​ ​ ​ 4.9% Total ​ ​ 121,754 ​ ​ 126,715 ​ ​ (4,961) ​ ​ ​ (3.9%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average selling price ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ $ 45,834 ​ $ 42,422 ​ $ 3,413 ​ ​ ​ 8.0% Used vehicles ​ $ 36,583 ​ $ 34,456 ​ $ 2,126 ​ ​ ​ 6.2% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same store unit sales (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ ​ 64,075 ​ ​ 74,195 ​ ​ (10,120) ​ ​ ​ (13.6%) Used vehicles ​ ​ 46,941 ​ ​ 46,906 ​ ​ 35 ​ ​ ​ 0.1% Total ​ ​ 111,016 ​ ​ 121,101 ​ ​ (10,085) ​ ​ ​ (8.3%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same store revenue (1) ($ in 000's) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ $ 2,953,314 ​ $ 3,150,002 ​ $ (196,688) ​ ​ ​ (6.2%) Used vehicles ​ ​ 1,732,361 ​ ​ 1,621,953 ​ ​ 110,408 ​ ​ ​ 6.8% Products, service and other ​ ​ 667,442 ​ ​ 771,564 ​ ​ (104,122) ​ ​ ​ (13.5%) Finance and insurance, net ​ ​ 572,857 ​ ​ 573,293 ​ ​ (436) ​ ​ ​ (0.1%) Total ​ $ 5,925,974 ​ $ 6,116,812 ​ $ (190,838) ​ ​ ​ (3.1%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average gross profit per unit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ $ 9,255 ​ $ 11,263 ​ $ (2,008) ​ ​ ​ (17.8%) Used vehicles ​ ​ 8,954 ​ ​ 8,959 ​ ​ (5) ​ ​ ​ (0.1%) Finance and insurance, net per vehicle unit ​ ​ 5,121 ​ ​ 4,723 ​ ​ 398 ​ ​ ​ 8.4% Total vehicle front-end yield (2) ​ ​ 14,248 ​ ​ 15,096 ​ ​ (847) ​ ​ ​ (5.6%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ ​ 62.5% ​ ​ 59.7% ​ ​ 287 bps ​ ​ ​ New vehicles ​ ​ 20.2% ​ ​ 26.5% ​ ​ (636) bps ​ ​ ​ Used vehicles ​ ​ 24.5% ​ ​ 26.0% ​ ​ (153) bps ​ ​ ​ Products, service and other ​ ​ 36.8% ​ ​ 35.9% ​ ​ 98 bps ​ ​ ​ Finance and insurance, net ​ ​ 100.0% ​ ​ 100.0% ​ ​ unch. bps ​ ​ ​ Good Sam Club ​ ​ 84.0% ​ ​ 85.0% ​ ​ (93) bps ​ ​ ​ Subtotal RV and Outdoor Retail ​ ​ 31.6% ​ ​ 34.9% ​ ​ (326) bps ​ ​ ​ Total gross margin ​ ​ 32.5% ​ ​ 35.5% ​ ​ (306) bps ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inventories ($ in 000's) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicles ​ $ 1,411,016 ​ $ 1,108,836 ​ $ 302,180 ​ ​ ​ 27.3% Used vehicles ​ ​ 464,311 ​ ​ 406,398 ​ ​ 57,913 ​ ​ ​ 14.3% Products, parts, accessories and misc. ​ ​ 247,906 ​ ​ 277,631 ​ ​ (29,725) ​ ​ ​ (10.7%) Total RV and Outdoor Retail inventories ​ $ 2,123,233 ​ $ 1,792,865 ​ $ 330,368 ​ ​ ​ 18.4% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vehicle inventory per location ($ in 000's) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicle inventory per dealer location ​ $ 7,466 ​ $ 6,336 ​ $ 1,129 ​ ​ ​ 17.8% Used vehicle inventory per dealer location ​ $ 2,457 ​ $ 2,322 ​ $ 134 ​ ​ ​ 5.8% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vehicle inventory turnover (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ New vehicle inventory turnover ​ ​ 1.9 ​ ​ 3.0 ​ ​ (1.1) ​ ​ ​ (36.4%) Used vehicle inventory turnover ​ ​ 3.4 ​ ​ 4.0 ​ ​ (0.6) ​ ​ ​ (15.2%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail locations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RV dealerships ​ ​ 189 ​ ​ 175 ​ ​ 14 ​ ​ ​ 8.0% RV service & retail centers ​ ​ 7 ​ ​ 10 ​ ​ (3) ​ ​ ​ (30.0%) Subtotal ​ ​ 196 ​ ​ 185 ​ ​ 11 ​ ​ ​ 5.9% Other retail stores ​ ​ 1 ​ ​ 2 ​ ​ (1) ​ ​ ​ (50.0%) Total ​ ​ 197 ​ ​ 187 ​ ​ 10 ​ ​ ​ 5.3% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Active Customers (4) ​ ​ 5,265,939 ​ ​ 5,452,287 ​ ​ (186,348) ​ ​ ​ (3.4%) Good Sam Club members ​ ​ 2,026,215 ​ ​ 2,124,284 ​ ​ (98,069) ​ ​ ​ (4.6%) Service bays (5) ​ ​ 2,693 ​ ​ 2,575 ​ ​ 118 ​ ​ ​ 4.6% Finance and insurance gross profit as a % of total vehicle revenue ​ ​ 12.2% ​ ​ 12.0% ​ ​ 21 bps ​ ​ n/a Same store locations ​ ​ 166 ​ ​ n/a ​ ​ n/a ​ ​ ​ n/a ​ (1) Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year. (2) Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used vehicle unit sales. 62 Table of Contents (3) Inventory turnover calculated as vehicle costs applicable to revenue over the last twelve months divided by the average quarterly ending vehicle inventory over the last twelve months. (4) An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. (5) A service bay is a fully-constructed bay dedicated to service, installation, and/or collision offerings. Revenue and Gross Profit Good Sam Services and Plans Good Sam Services and Plans revenue increased primarily due to a $7.6 million increase from the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations; a $2.4 million increase from the extended vehicle warranty programs primarily resulting from increased contracts in force; a $2.0 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force; a $1.6 million increase from the Good Sam Insurance Agency primarily resulting from increased contracts in force; and an $0.9 million increase from the consumer shows due to no shows produced in 2021 and one show produced in 2022; partially offset by $1.2 million reduction from the annual directory; a $1.1 million reduction from RV financing programs; and an $0.8 million reduction from other programs. Good Sam Services and Plans gross profit increased primarily due to a $9.5 million increase from roadside assistance programs resulting from increased contracts in force, favorable updates to assumptions for cancellations, and reduced marketing costs; a $2.4 million increase from the extended warranty insurance programs; a $2.1 million increase from the Good Sam TravelAssist programs; a $1.7 million increase from the Good Sam Insurance Agency; and a $1.1 million increase from consumer shows; partially offset by a $1.4 million increase in overhead support expenses; a $2.0 million reduction from other services and plans, and a $1.1 million reduction from RV financing programs;. The gross margin increase in Good Sam Services and Plans was primarily due to the increases from the roadside assistance programs described above. RV and Outdoor Retail: New Vehicles New vehicle revenue decreased primarily due to a 9.4% decline in vehicles sold, partially offset by an 8.0% increase in average sales price. On a same store basis, new vehicle revenue decreased 6.2% to $3.0 billion, and new vehicle units sold decreased 13.6%. New vehicle gross profit decreased primarily due to a 17.4% increase in the average cost of new vehicles sold, partially offset by an 8.0% increase in the average selling price per new vehicle sold. Also, a 9.4% decrease in vehicles sold contributed to the decrease in new vehicle gross profit. Used Vehicles Used vehicle revenue increased primarily due to a 4.9% increase in vehicles sold and a 6.2% increase in average selling price per vehicle, driven by an increase in demand for used vehicles, as they are a lower-cost alternative to new vehicles. On a same store basis, used vehicle revenue increased 6.8% to $1.7 billion and used vehicles sold increased 0.1%. Used vehicle gross profit increased due to the above mentioned increases in units sold and average sales price per vehicle. The decrease in used vehicle gross margin was primarily the result of compression from an 8.4% higher average cost per unit sold, partially offset by a 6.2% increase in average selling price per vehicle sold. 63 Table of Contents Products, Service and Other Products, service and other revenue decreased primarily due to our exit from certain non-RV product categories, as part of the 2019 Strategic Shift, that were sold in 2021, but not in 2022. On a same store basis, products, service and other revenue decreased 13.5% to $667.4 million in 2022 from $771.6 million in 2021. Products, service and other gross profit decreased primarily due to the absence of revenue resulting from our exit of certain non-RV product categories during the second half of 2021. The increase in products, service and other gross margin was primarily due to the shift in mix to higher margin products and services, such as our RV service revenues, after our exit of certain lower margin, non-RV product categories during the second half of 2021. Finance and Insurance, net Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue as a percentage of new and used vehicle revenue was 12.2% in 2022 compared to 12.0% in 2021. On a same store basis, finance and insurance, net decreased 0.1%, to $572.9 million. Finance and insurance, net revenue increased in total and as a percentage of new and used vehicle revenue primarily due to an increase in the products sold per used vehicle, and increased gross profit per contract for both new and used vehicles sold, partially offset by a lower volume of vehicles sold. Good Sam Club Good Sam Club revenue decreased primarily due to a reduction in marketing fee revenue from Good Sam Club co-branded credit cards driven by lower transaction counts at retail locations resulting mainly from the exit from certain non-RV product categories and reduced revenue related to decreased Good Sam Club file size. Good Sam Club gross profit and gross margin decreased primarily due to the revenue reduction items noted above and investment in new programs. Operating Expenses and Other Selling, general and administrative Selling, general and administrative expenses increased primarily due to a $26.2 million increase in selling expenses, a $12.7 million increase in insurance costs due to increased inventory levels, a $13.0 million increase in occupancy expenses due to the net increase of ten store locations over the prior year, a $7.0 million increase in professional fees, a $6.1 million increase in personal property expenses, and a $0.6 million increase in other store and corporate overhead expenses, partially offset by an $18.2 million reduction in wage-related expenses and a $14.0 million reduction in equity-based compensation expenses. The $14.0 million decrease in equity-based compensation expenses (See Note 20 — Equity-Based Compensation to our consolidated financial statements included in Part II, Item 8 of this Form 10-K) resulted from $20.0 million of expense for a stock grant to our Chairman and Chief Executive Officer in December 2021 with no grant to that individual in 2022, which was partially offset by an increase of $2.1 million for expense related to the modification of restricted stock units to accelerate and/or continue vesting under employee separation agreements and/or post-termination consulting arrangements, more weighted-average restricted stock units outstanding, and a higher weighted-average grant date fair value of those restricted stock units. Depreciation and amortization Depreciation and amortization increased primarily due to increased capital expenditures, mainly driven by our expansion of RV dealership locations and improvements to existing RV dealerships. Additionally, the increase was due to $8.8 million of incremental accelerated amortization during the first quarter of 2022 from 64 Table of Contents the adjustment of the useful lives of certain trademark and trade name intangible assets, associated with brands not traditionally associated with RVs, that we have effectively phased out. The trademark and trade name intangible assets relating to the effectively phased out brands were fully amortized as of March 31, 2022. These increases were partially offset by $7.4 million of accelerated depreciation on store fixtures in the third quarter of 2021 related to categories exited as part of the 2019 Strategic Shift. Long-lived asset impairment As discussed in Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, we recognized $4.2 million of long-lived asset impairments in 2022, of which $1.6 million related to the 2019 Strategic Shift discussed above, and $3.0 million for 2021, of which $1.4 million related to the 2019 Strategic Shift discussed above. Lease termination Lease termination expense related primarily to the 2019 Strategic Shift discussed above. Floor plan interest expense Floor plan interest expense increased primarily due to a 76.5% increase in average floor plan borrowings driven primarily by higher new vehicle inventory quantities from the normalization of the new travel trailer supply chain and increases in average new vehicle unit costs, a 146 basis point increase in the average floor plan borrowing rate, and, to a lesser extent, an increase in average used vehicles subject to floor plan financing. Other interest expense, net Other interest expense increased primarily due to a 96 basis point increase in the Term Loan Facility average interest rate and the additional $300.0 million of term loan borrowings in December 2021, which increased the average debt outstanding in 2022. The increase in interest rates in 2022 did not have a proportionate impact on the increase in other interest expense, since the refinance of the Term Loan Facility in June 2021 resulted in a reduction in interest rates from the 25 basis point decrease in the applicable rate (as defined in the Credit Agreement (as defined in Note 9 – Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K)) and the Term Loan Facility was subject to the interest rate floor, including the 2.50% applicable rate, of 3.25% for the first four months of 2022 which negated interest rate increases during that period subject to the interest rate floor. The applicable interest rate on the Term Loan Facility has subsequently risen above the interest rate floor and at December 31, 2022 is 6.82%. For the Term Loan Facility, if the 6.82% interest rate was applicable for the entirety of the year 2022, other interest expense would have increased an additional $31.8 million. We expect that interest rates and other interest expense, net will continue to increase in 2023. Loss and expense on debt restructure Loss and expense on debt restructure of $13.5 million in 2021 was comprised of $0.4 million in extinguishment of the original issue discount related to the Company’s prior term loan facility, $1.0 million in extinguishment of capitalized finance costs related to the Company’s prior term loan facility, and $12.1 million in legal and other expenses related to the Company’s current term loan facility. Tax Receivable Agreement Liability adjustment The Tax Receivable Agreement Liability adjustment for 2022 and 2021 consisted of a benefit of $0.1 million and an expense of $2.8 million, respectively, related to a remeasurement from a decrease and increase, respectively, in state tax rates. 65 Table of Contents Income tax expense Income tax expense increased primarily due to a $28.4 million decrease in deferred tax assets, net of release of valuation allowance, as a result of the LLC Conversion in 2022. Additionally, income tax expense for 2021 included benefits to income tax of $4.1 million for the revaluation of deferred tax assets as a result of increased state tax rates and $15.2 million for the release of valuation allowance at CW, which, in 2021 and 2022 prior to the LLC Conversion, became available to offset state combined income in certain unitary states due to the Company’s increased ownership in CWGS, LLC. The valuation allowance release during 2021 was attributable to the change in the entities within state combined filing groups due to unitary relationships, which provided additional taxable income sources to utilize CW’s deferred tax assets. CWH’s increased ownership in CWGS, LLC and other qualitative unity factors impacted the unitary relationships. The impact of these changes in deferred tax assets on income tax expense in 2022 and 2021 was partially offset by a decrease in income tax expense due to lower income generated during 2022. Segment results The following table sets forth a reconciliation of total segment income to consolidated income from operations before income taxes for the period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ ​ ​ December 31, 2022 ​ December 31, 2021 ​ Favorable / ​ ​ ​ ​ ​ Percent of ​ ​ ​ Percent of ​ (Unfavorable) ​ ($ in thousands) Amount Revenue Amount Revenue $ % Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ $ 192,622 ​ 2.8% ​ $ 180,926 ​ 2.6% ​ $ 11,696 ​ 6.5% ​ RV and Outdoor Retail ​ ​ 6,803,278 ​ 97.6% ​ ​ 6,759,294 ​ 97.8% ​ ​ 43,984 ​ 0.7% ​ Elimination of intersegment revenue ​ ​ (28,887) ​ (0.4%) ​ ​ (26,466) ​ (0.4%) ​ ​ (2,421) ​ (9.1%) ​ Total consolidated revenue ​ ​ 6,967,013 ​ 100.0% ​ ​ 6,913,754 ​ 100.0% ​ ​ 53,259 ​ 0.8% ​ Segment income: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Good Sam Services and Plans ​ ​ 90,857 ​ 1.3% ​ ​ 74,765 ​ 1.1% ​ ​ 16,092 ​ 21.5% ​ RV and Outdoor Retail ​ ​ 528,564 ​ 7.6% ​ ​ 798,846 ​ 11.6% ​ ​ (270,282) ​ (33.8%) ​ Total segment income ​ ​ 619,421 ​ 8.9% ​ ​ 873,611 ​ 12.6% ​ ​ (254,190) ​ (29.1%) ​ Corporate & other ​ ​ (12,619) ​ (0.2%) ​ ​ (9,679) ​ (0.1%) ​ ​ (2,940) ​ (30.4%) ​ Depreciation and amortization ​ ​ (80,304) ​ (1.2%) ​ ​ (66,418) ​ (1.0%) ​ ​ (13,886) ​ (20.9%) ​ Other interest expense, net ​ ​ (75,745) ​ (1.1%) ​ ​ (46,912) ​ (0.7%) ​ ​ (28,833) ​ (61.5%) ​ Tax Receivable Agreement liability adjustment ​ ​ 114 ​ 0.0% ​ ​ (2,813) ​ (0.0%) ​ ​ 2,927 ​ nm ​ Loss and expense on debt restructure ​ ​ — ​ 0.0% ​ ​ (13,468) ​ (0.2%) ​ ​ 13,468 ​ nm ​ Other income (expense), net ​ ​ (752) ​ (0.0%) ​ ​ (122) ​ (0.0%) ​ ​ (630) ​ nm ​ Income before income taxes ​ $ 450,115 ​ 6.5% ​ $ 734,199 ​ 10.6% ​ $ (284,084) ​ (38.7%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same store revenue- RV and Outdoor Retail (2) ​ $ 5,925,974 ​ ​ ​ $ 6,116,812 ​ ​ ​ $ (190,838) ​ (3.1%) ​ ​ nm – not meaningful ​ (1) Segment income represents income for each of our reportable segments and is defined as income from operations before depreciation and amortization, plus floor plan interest expense. (2) Same store revenue definition not applicable to the Good Sam Services and Plans segment. Good Sam Services and Plans Good Sam Services and Plans revenue increased primarily due to a $7.6 million increase from the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations; a $2.4 million increase from the extended vehicle warranty programs primarily resulting from increased contracts in force; a $2.0 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force; a $1.6 million increase from the Good Sam Insurance Agency primarily resulting from increased contracts in force; and an $1.2 million increase from the consumer shows due to no shows produced in 2021 and one show produced in 2022; partially offset by a $1.2 million reduction from the annual directory; a $1.1 million reduction from RV financing programs; and a $0.8 million reduction from other programs. 66 Table of Contents Good Sam Services and Plans segment income increased primarily due to a $9.5 million increase from the roadside assistance programs resulting from increased contracts in force, favorable updates to assumptions for cancellations, and reduced marketing expenses; a $3.8 million decrease in selling, general and administrative expenses consisting mostly of a decrease in wages-related expenses; a $2.4 million increase from the extended warranty insurance programs; a $2.1 million increase from the Good Sam TravelAssist programs; a $1.7 million increase from the Good Sam Insurance Agency; and a $1.1 million increase from consumer shows; partially offset by a $2.0 million reduction from other services and plans; a $1.4 million increase in overhead support expenses; and a $1.1 million reduction from the RV financing programs. Segment income margin of 47.2% increased 585 basis points, or 14.1%, primarily due to increases from the roadside assistance programs and reduced selling, general and administrative expenses. RV and Outdoor Retail segment RV and Outdoor Retail segment revenue increased primarily due to a $191.6 million, or 11.3%, increase in used vehicle revenue, and a $28.0 million, or 4.6%, increase in finance and insurance, net revenue, partially offset by a $102.2 million, or 9.3%, decrease in products, service and other revenue, a $72.0 million, or 2.2%, decrease in new vehicle revenue, and a $1.4 million, or 2.9%, reduction in Good Sam Club revenue. RV and Outdoor Retail segment income decreased primarily due to decreased segment gross profit of $206.4 million primarily due to increased average cost per vehicle sold and reduced vehicles sold; a $34.2 million increase in selling, general and administrative expenses (see discussion of selling, general and administrative expenses above); a $27.9 million increase in floor plan interest expense; a $1.2 million increase in long-lived asset impairment; and a $1.2 million increase in loss on sale or disposal of assets; partially offset by a $0.6 million decrease in lease termination expense. RV and Outdoor Retail segment margin decreased 405 basis points to 7.8% primarily due to higher vehicle costs and increased selling, general and administrative expenses. Corporate and other expenses Corporate and other expenses increased primarily due to costs relating to the Cybersecurity Incident, which are net of insurance recoveries, and increased other professional fees. Tax Receivable Agreement Liability adjustment The Tax Receivable Agreement Liability adjustment for 2022 and 2021 consisted of a benefit of $0.1 million and an expense of $2.8 million, respectively, related to a remeasurement from a decrease and increase, respectively, in state tax rates. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry and are used by management to evaluate our operating performance, to evaluate the effectiveness of strategic initiatives and for planning purposes. By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC, to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and the presentation of 67 Table of Contents this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. They should not be construed as an inference that the Company’s future results will be unaffected by any items adjusted for in these Non-GAAP Financial Measures. In evaluating these Non-GAAP Financial Measures, it is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this section and in the reconciliation tables below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin We define “EBITDA” as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations. The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP financial performance measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 31, ​ December 31, ​ December 31, ($ in thousands) 2022 2021 2020 EBITDA and Adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 351,031 ​ $ 642,075 ​ $ 344,215 Other interest expense, net ​ ​ 75,745 ​ ​ 46,912 ​ ​ 54,689 Depreciation and amortization ​ ​ 80,304 ​ ​ 66,418 ​ ​ 51,981 Income tax expense ​ ​ 99,084 ​ ​ 92,124 ​ ​ 57,743 Subtotal EBITDA ​ ​ 606,164 ​ ​ 847,529 ​ ​ 508,628 Long-lived asset impairment (a) ​ ​ 4,231 ​ ​ 3,044 ​ ​ 12,353 Lease termination (b) ​ ​ 1,614 ​ ​ 2,211 ​ ​ 4,547 Loss (gain) on sale or disposal of assets, net (c) ​ ​ 622 ​ ​ (576) ​ ​ 1,332 Equity-based compensation (d) ​ ​ 33,847 ​ ​ 47,936 ​ ​ 20,661 Tax Receivable Agreement liability adjustment (e) ​ ​ (114) ​ ​ 2,813 ​ ​ (141) Restructuring costs (f) ​ ​ 7,026 ​ ​ 25,701 ​ ​ 17,609 Loss and expense on debt restructure (g) ​ ​ — ​ ​ 13,468 ​ ​ — Adjusted EBITDA ​ $ 653,390 ​ $ 942,126 ​ $ 564,989 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 68 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ December 31, ​ December 31, ​ December 31, (as percentage of total revenue) 2022 2021 2020 Adjusted EBITDA margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income margin ​ ​ 5.0% ​ ​ 9.3% ​ ​ 6.3% Other interest expense, net ​ ​ 1.1% ​ ​ 0.7% ​ ​ 1.0% Depreciation and amortization ​ ​ 1.2% ​ ​ 1.0% ​ ​ 1.0% Income tax expense ​ ​ 1.4% ​ ​ 1.3% ​ ​ 1.1% Subtotal EBITDA margin ​ ​ 8.7% ​ ​ 12.3% ​ ​ 9.3% Long-lived asset impairment (a) ​ ​ 0.1% ​ ​ 0.0% ​ ​ 0.2% Lease termination (b) ​ ​ 0.0% ​ ​ 0.0% ​ ​ 0.1% Loss (gain) on sale or disposal of assets, net (c) ​ ​ 0.0% ​ ​ (0.0%) ​ ​ 0.0% Equity-based compensation (d) ​ ​ 0.5% ​ ​ 0.7% ​ ​ 0.4% Tax Receivable Agreement liability adjustment (e) ​ ​ (0.0%) ​ ​ 0.0% ​ ​ (0.0%) Restructuring costs (f) ​ ​ 0.1% ​ ​ 0.4% ​ ​ 0.3% Loss and expense on debt restructure (g) ​ ​ — ​ ​ 0.2% ​ ​ — Adjusted EBITDA margin ​ ​ 9.4% ​ ​ 13.6% ​ ​ 10.4% ​ (a) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which includes locations affected by the 2019 Strategic Shift. See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (b) Represents the loss on the termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from lease termination fees and the derecognition of the operating lease assets and liabilities. See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (c) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020, relating primarily to the 2019 Strategic Shift, and (ii) the gains and losses on disposal and sales of various assets. (d) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company. (e) Represents an adjustment to eliminate the losses and gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (f) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately (see (c) above). See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (g) Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 million in extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $12.1 million in legal and other expenses related to the New Term Loan Facility in 2021. ​ ​ Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic” as net income attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, income tax expense impact from the LLC Conversion, and the effect of net income attributable to non-controlling interests from these adjustments. We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed redemption, if dilutive, of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World Holdings, Inc. 69 Table of Contents We define “Adjusted Earnings Per Share – Basic” as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define “Adjusted Earnings Per Share – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the redemption of all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these Non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ (In thousands except per share amounts) 2022 2021 2020 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Camping World Holdings, Inc. ​ $ 136,947 ​ $ 278,461 ​ $ 122,345 ​ Adjustments related to basic calculation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and expense on debt restructure (a): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ — ​ ​ 13,468 ​ ​ — ​ Income tax expense for above adjustment (b) ​ ​ — ​ ​ (1,770) ​ ​ — ​ Long-lived asset impairment (c): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ 4,231 ​ ​ 3,044 ​ ​ 12,353 ​ Income tax expense for above adjustment (b) ​ ​ (99) ​ ​ (24) ​ ​ (13) ​ Lease termination (d): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ 1,614 ​ ​ 2,211 ​ ​ 4,547 ​ Income tax expense for above adjustment (b) ​ ​ — ​ ​ (54) ​ ​ (36) ​ Loss (gain) on sale or disposal of assets (e): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ 622 ​ ​ (576) ​ ​ 1,332 ​ Income tax expense for above adjustment (b) ​ ​ (46) ​ ​ 4 ​ ​ (1) ​ Equity-based compensation (f): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ 33,847 ​ ​ 47,936 ​ ​ 20,661 ​ Income tax expense for above adjustment (b) ​ ​ (3,810) ​ ​ (5,812) ​ ​ (2,023) ​ Tax Receivable Agreement liability adjustment (g): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ (114) ​ ​ 2,813 ​ ​ (141) ​ Income tax expense for above adjustment (b) ​ ​ 29 ​ ​ (718) ​ ​ 35 ​ Restructuring costs (h) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross adjustment ​ ​ 7,026 ​ ​ 25,701 ​ ​ 17,609 ​ Income tax expense for above adjustment (b) ​ ​ — ​ ​ (56) ​ ​ (84) ​ Income tax expense impact from LLC Conversion (i) ​ ​ 28,402 ​ ​ — ​ ​ — ​ Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (j) ​ ​ (31,065) ​ ​ (44,787) ​ ​ (31,537) ​ Adjusted net income attributable to Camping World Holdings, Inc. – basic ​ ​ 177,584 ​ ​ 319,841 ​ ​ 145,047 ​ Adjustments related to diluted calculation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (k) ​ ​ 1,479 ​ ​ — ​ ​ 1,994 ​ Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (l) ​ ​ (405) ​ ​ — ​ ​ (494) ​ Reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (k) ​ ​ — ​ ​ 408,401 ​ ​ — ​ Income tax on reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (l) ​ ​ — ​ ​ (104,543) ​ ​ — ​ Assumed income tax expense of combining C-Corps with full or partial valuation allowances with the income of other consolidated entities after the dilutive redemption of common units in CWGS, LLC (m) ​ ​ — ​ ​ (6,169) ​ ​ — ​ Adjusted net income attributable to Camping World Holdings, Inc. – diluted ​ $ 178,658 ​ $ 617,530 ​ $ 146,547 ​ 70 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ December 31, ​ December 31, ​ December 31, ​ (In thousands except per share amounts) 2022 2021 2020 Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average Class A common shares outstanding – basic ​ ​ 42,386 ​ ​ 45,009 ​ ​ 39,383 ​ Adjustments related to diluted calculation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (n) ​ ​ — ​ ​ 43,438 ​ ​ — ​ Dilutive options to purchase Class A common stock (n) ​ ​ 56 ​ ​ 150 ​ ​ 79 ​ Dilutive restricted stock units (n) ​ ​ 412 ​ ​ 1,165 ​ ​ 547 ​ Adjusted weighted average Class A common shares outstanding – diluted ​ ​ 42,854 ​ ​ 89,762 ​ ​ 40,009 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted earnings per share - basic ​ $ 4.19 ​ $ 7.11 ​ $ 3.68 ​ Adjusted earnings per share - diluted ​ $ 4.17 ​ $ 6.88 ​ $ 3.66 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive amounts (o): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (k) ​ $ 243,670 ​ $ — ​ $ 251,412 ​ Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (l) ​ $ (67,150) ​ $ — ​ $ (64,964) ​ Assumed income tax benefit of combining C-Corps with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive redemption of common units in CWGS, LLC (m) ​ $ 12,280 ​ $ — ​ $ 6,430 ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anti-dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (n) ​ ​ 42,045 ​ ​ — ​ ​ 49,916 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of per share amounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock — basic ​ $ 3.23 ​ $ 6.19 ​ $ 3.11 ​ Non-GAAP Adjustments (p) ​ ​ 0.96 ​ ​ 0.92 ​ ​ 0.57 ​ Adjusted earnings per share - basic ​ $ 4.19 ​ $ 7.11 ​ $ 3.68 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock — diluted ​ $ 3.22 ​ $ 6.07 ​ $ 3.09 ​ Non-GAAP Adjustments (p) ​ ​ 0.96 ​ ​ 0.92 ​ ​ 0.57 ​ Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (q) ​ ​ — ​ ​ (0.10) ​ ​ — ​ Dilutive options to purchase Class A common stock and/or restricted stock units (q) ​ ​ (0.01) ​ ​ (0.01) ​ ​ — ​ Adjusted earnings per share - diluted ​ $ 4.17 ​ $ 6.88 ​ $ 3.66 ​ ​ (a) Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 million in extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $12.1 million in legal and other expenses related to the New Term Loan Facility. (b) Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses effective tax rates between 25.0% and 25.5% for the adjustments for 2022, 2021 and 2020, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric. (c) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which includes locations affected by the 2019 Strategic Shift. See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (d) Represents the loss on the termination of operating leases relating primarily to the 2019 Strategic Shift, resulting from lease termination costs and the derecognition of the operating lease assets and liabilities. See Note 5 – Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (e) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020, relating primarily to the 2019 Strategic Shift, and (ii) the gains and losses on disposal and sales of various assets. (f) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company. (g) Represents an adjustment to eliminate the losses and gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (h) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately (see (d) above). See Note 5 – 71 Table of Contents Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (i) For the year ended December 31, 2022, the Company recognized $28.4 million of income tax expense relating to the LLC Conversion. This income tax expense was primarily from the write-off of deferred tax assets, which was partially offset by the release of valuation allowance. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (j) Represents the adjustment to net (income) loss attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 49.8%, 49.1% and 55.9% for the years ended December 31, 2022, 2021 and 2020, respectively. (k) Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC. (l) Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses effective tax rates between 25.0% and 25.5% for the adjustments for 2022, 2021 and 2020. (m) Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-Corps that under the Company’s equity structure, prior to the LLC Conversion, could not be used against the income of other consolidated subsidiaries of CWGS, LLC. However, for the year ended December 31, 2021, this adjustment included the reversal of $15.2 million benefit from changes in the valuation allowance for CW. Subsequent to the redemption of all common units in CWGS, LLC and prior to the LLC Conversion, the Company believes certain actions could be taken such that the C-Corps’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rates between 25.0% and 25.5% for the adjustments for 2022, 2021 and 2020 for the losses experienced by the consolidated C-Corps for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts. The $15.2 million release of valuation allowance during the year ended December 31, 2021 was considered to be reversed and excluded from adjusted net income attributable to Camping World Holdings, Inc. – diluted for purposes of this calculation . Beginning in 2023, these C-Corp losses will offset income of other consolidated subsidiaries as a result of LLC Conversion at or around December 31, 2022. See Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. (n) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC. (o) The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive. (p) Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (j) above). (q) Represents the per share impact of stock options, restricted stock units, and/or common units of CWGS, LLC from the difference in their dilutive impact between the GAAP and Non-GAAP earnings per share calculations. As discussed under “Our Corporate Structure Impact on Income Taxes” in Part II, Item 7 of this Form 10-K, our “Up-C” corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure. There can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in CWGS, LLC are considered dilutive or anti-dilutive for a given period. To improve comparability of our financial results, users of our financial statements may find it useful to review our earnings per share assuming the full redemption of common units in CWGS, LLC for all periods, even when those common units would be anti-dilutive. The relevant numerator and denominator adjustments have been provided under “Anti-dilutive amounts” in the table above (see (o) above). Liquidity and Capital Resources General Our primary requirements for liquidity and capital have been working capital, inventory management, acquiring and building new retail locations, the improvement and expansion of existing retail locations, debt service, distributions to holders of equity interests in CWGS, LLC and our Class A common stock, and general corporate needs. These cash requirements have historically been met through cash provided by operating activities, cash and cash equivalents, proceeds from registered offerings of our Class A common stock, borrowings under our Senior Secured Credit Facilities (as defined below), borrowings under our Floor Plan Facility (as defined below), and borrowings under our Real Estate Facilities (as defined below). As a public company, our additional liquidity needs include public company costs, payment of regular and special cash dividends, any exercise of the redemption right by the Continuing Equity Owners from time to time (should we elect to redeem common units for a cash payment), our stock repurchase program as described below, payments under the Tax Receivable Agreement, and state and federal taxes to the extent not reduced 72 Table of Contents as a result of the Tax Receivable Agreement. The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding. Although the actual timing and amount of any payments that may be made under the Tax Receivable Agreement will vary, we expect that the payments that we will be required to make to the Continuing Equity Owners, Former Profits Unit Holders, and Crestview Partners II GP, L.P. will be significant. Any payments made by us to Continuing Equity Owners, Former Profits Unit Holders, and Crestview Partners II GP, L.P. under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us or to CWGS, LLC and, to the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax Receivable Agreement. For a discussion of the Tax Receivable Agreement, see Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Stock Repurchase Program In October 2020, our Board of Directors initially authorized a stock repurchase program for the repurchase of up to $100.0 million of our Class A common stock, expiring on October 31, 2022. In August 2021 and January 2022, our 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 our Class A common stock. Following these extensions, the stock repurchase program now expires on December 31, 2025. Repurchases under the program are subject to any applicable limitations on the availability of funds to be distributed to the Company by CWGS, LLC to fund the repurchase and may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares under this authorization. This program does not obligate us to acquire any particular amount of Class A common stock and the program may be extended, modified, suspended or discontinued at any time at the Board’s discretion. We expect to fund the repurchases using cash on hand. During the years ended December 31, 2022 and 2021, we repurchased 2,592,524 and 3,988,881 shares of our Class A common stock, respectively, for $79.8 million and $156.3 million, respectively, including broker commissions. As of December 31, 2022, $120.2 million was available under the stock repurchase program to repurchase additional shares of our Class A common stock. Dividends On February 18, 2022, our Board of Directors approved the increase of the portion of the quarterly cash dividend relating to all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of this Form 10-K) to $0.475 per share of Class A common stock from $0.35 per share, which increased the total quarterly cash dividend to $0.625 per share of Class A common stock from $0.50 per share beginning in March 2022. For each of the four quarters of 2022, we paid a regular quarterly cash dividend on our Class A common stock of $0.625 per share, which was funded with a $0.15 per common unit cash distribution from CWGS, LLC and the remainder funded with all or a portion of the Excess Tax Distribution. Prior to February 18, 2022, our quarterly cash dividend on our Class A common stock was raised in several incremental steps from our first cash dividend of $0.08 per share on December 20, 2016. CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other operating expenses and other obligations. Accordingly, CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us, and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of our Board of Directors. Additionally, as described above, we currently intend to pay a portion of our regular quarterly cash dividend with all or a portion of the Excess Tax Distribution to the holders of our Class A common stock subject to the discretion of our Board of Directors. The LLC Conversion is expected to 73 Table of Contents decrease future Excess Tax Distributions by allowing losses at those subsidiaries to offset taxable income allocated to the members of CWGS, LLC instead of the losses being confined within embedded C-Corps (see Note 11 – Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). As a result of the LLC Conversion which will generate significant capital losses in 2023 that will be allocated to each member of CWGS, LLC, it is expected that we will not receive any Excess Tax Distribution in 2023. These significant capital losses relate to the LLC Conversion transaction itself and not the ongoing benefits that we expect from offsetting losses generated by these converted subsidiaries against income from other subsidiaries of CWGS, LLC. However, even with no Excess Tax Distribution in 2023, we expect to have the ability to continue to pay the regular quarterly cash dividend on our Class A common stock of $0.625 per share during 2023, which is subject to the discretion of our Board of Directors. Our dividend policy has certain risks and limitations particularly with respect to liquidity, and we may not pay future dividends according to our policy, or at all. See “Dividend Policy” included in Part II, Item 5 of this Form 10-K and “Risk Factors ─ Risks Relating to Ownership of Our Class A Common Stock ─ “Our ability to pay regular and special dividends on our Class A common stock is subject to the discretion of our Board of Directors and may be limited by our structure and statutory restrictions” included in Part I, Item 1A of this Form 10-K. Acquisitions and Capital Expenditures We announced a number of initiatives heading into 2022, including an online RV sales process, service bay expansion, the addition of design centers to our existing store footprint, and continued expansion through dealership acquisitions. We had also announced a number of land acquisitions in anticipation of constructing new stores in 2022. During the year ended December 31, 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 $153.7 million (see Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K) and purchased real property of $55.7 million, of which $19.7 million was from parties related to the sellers of the businesses. Also, in 2022, the Good Sam Services and Plans segment acquired the assets of an outdoor publication for $3.4 million. We have plans to slow dealership expansion in 2023. We have seven greenfield locations at or near construction completion which we may delay opening until market conditions improve. At this time, we expect our acquisition spend may be up to $25.0 million in 2023, but we may increase this range as other acquisition opportunities arise. Factors that could impact the quantity of future locations or the cost to acquire or open those locations include, but are not limited to, our ability to locate potential acquisition targets or greenfield locations in a geographic area and at a cost that meets our success criteria; continued strong cash flow generation from our operations to fund these acquisitions and new locations; and availability of financing under our Floor Plan Facility. We expect the additional cash requirements of the other announced initiatives to be immaterial. 74 Table of Contents Tax Receivable Agreement Liability The aggregate estimated payments under the Tax Receivable Agreement at December 31, 2022, were as follows (in thousands): ​ ​ ​ ​ ​ As of ​ December 31, 2022 2023 $ 10,873 2024 ​ ​ 11,911 2025 ​ ​ 12,214 2026 ​ ​ 12,555 2027 ​ ​ 13,005 Thereafter ​ ​ 110,058 Total ​ $ 170,616 ​ See Note 11 — Income Taxes to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information. 2019 Strategic Shift In connection with the 2019 Strategic Shift during the year ended December 31, 2022, we have paid or otherwise settled $6.1 million of lease termination costs and $7.1 million of other associated costs, which excludes gains from the derecognition of the related operating lease assets and liabilities for these terminated leases. We expect that approximately $2.8 million to $6.3 million of other associated costs and $1.6 million to $9.6 million of lease termination costs will result in future cash expenditures during 2023. Any restructuring costs, other than lease termination costs, relating to the 2019 Strategic Shift recognized after December 31, 2022 will not be included as an adjustment to our Non-GAAP Financial Measures. For a discussion of the 2019 Strategic Shift, see Note 5 ─ Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Other Cash Requirements or Commitments Substantially all of our new RV inventory and, at times, certain of our used RV inventory is financed under our Floor Plan Facility (defined in Note 4 – Inventories and Floor Plan Payables to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). See “Description of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements” for a summary of the cash requirements related to our indebtedness. See Note 10 ─ Lease Obligations to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a discussion of cash requirements relating to operating and finance lease obligations. See Note 13 — Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Form 10-K for a discussion of cash requirements relating to service and marketing sponsorship agreements. Sources of Liquidity and Capital We believe that our sources of liquidity and capital including cash provided by operating activities and borrowings under our various credit facilities, other long-term debt, and finance lease arrangements (see Liquidity and Capital Resources — Description of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements in Part II, Item 7 of this Form 10-K), including additional borrowing capacity where applicable, will be sufficient to finance our continued operations, growth strategy, including the opening of any additional retail locations, regular and special quarterly cash dividends (as described above), required payments for our obligations under the Tax Receivable Agreement, and additional expenses we expect to incur for at least the next twelve months. 75 Table of Contents However, we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available under our Revolving Credit Facility, our Floor Plan Facility, and our Real Estate Facilities, will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future and if availability under our Revolving Credit Facility, our Floor Plan Facility, and our Real Estate Facilities is not sufficient, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may impose significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all, including the expected additional borrowings noted above and particularly in light of the current macroeconomic uncertainty. See “Risk Factors — Risks Related to our Business — Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the availability of adequate capital” included in Part I, Item 1A of this Form 10-K. As of December 31, 2022 and 2021, we had working capital of $611.3 million and $685.6 million, respectively, including $130.1 million and $267.3 million, respectively, of cash and cash equivalents. Our working capital reflects the cash provided by deferred revenue and gains reported under current liabilities of $95.7 million and $95.5 million as of December 31, 2022 and 2021, respectively. Deferred revenue primarily consists of cash collected for club memberships and roadside assistance contracts in advance of services to be provided, which is deferred and recognized as revenue over the life of the membership, and deferred revenue for the annual guide. We use net proceeds from this deferred membership revenue to lower our long-term borrowings and finance our working capital needs. Our Floor Plan Facility includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows us to transfer cash as an offset to the payables under the Floor Plan Facility. At December 31, 2022, and 2021, the FLAIR offset account was $217.7 million and $92.1 million, respectively, of which $159.1 million and $92.1 million, respectively, could have been withdrawn while remaining in compliance with the financial covenants of the Floor Plan Facility. Seasonality We have experienced, and expect to continue to experience, variability in revenue, net income, and cash flows as a result of annual seasonality in our business. See Note 1 ─ Summary of Significant Accounting Policies — Seasonality to our consolidated financial statements included in Part II, Item 8 of this Form 10-K and “Risk Factors — Risks Related to our Business — Our business is seasonal and this leads to fluctuations in revenues” included in Part I, Item 1A of this Form 10-K. Cash Flow The following table shows summary cash flow information for the years ended December 31, 2022 and 2021, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2022 2021 Net cash provided by operating activities $ 189,783 ​ $ 154,004 Net cash used in investing activities ​ (422,535) ​ ​ (355,772) Net cash provided by financing activities ​ 95,551 ​ ​ 303,028 Net (decrease) increase in cash and cash equivalents $ (137,201) ​ $ 101,260 ​ ​ ​ ​ ​ ​ ​ Operating activities. Our cash flows from operating activities are primarily collections from contracts in transit and customers following the sale of new and used vehicles, as well as from the sale of retail products and services and Good Sam services and plans. Contracts in transit represent amounts due from third-party lenders from whom pre-arranged agreements have been determined, and to whom the retail installment sales contracts have been assigned. Our primary uses of cash from operating activities are repayments of vehicle floor plan payables, payments to retail product suppliers, personnel-related expenditures, payments related to leased property, advertising, and various consumer services program costs. 76 Table of Contents Net cash provided by operating activities was $189.8 million for the year ended December 31, 2022, an increase of $35.8 million from $154.0 million of net cash provided by operating activities for the year ended December 31, 2021. The increase was primarily due to a $375.5 million decrease in the working capital adjustment for inventory, a $49.2 million increase in deferred income taxes, a $24.7 million decrease in the working capital adjustment for accounts receivable and contracts in transit, and a $13.9 million increase in depreciation and amortization, partially offset by a $291.0 million reduction in net income, a $95.0 million decrease in the working capital adjustment for accounts payable and other accrued expenses, a $13.3 million decrease in the working capital adjustment for deferred revenue, a $14.1 million decrease in equity-based compensation, and a $14.1 million reduction in other operating activities. Investing activities. Our investment in business activities primarily consists of expanding our operations through organic growth and the acquisition of retail locations. Substantially all of our new retail locations and capital expenditures have been financed using cash provided by operating activities and borrowings under our various credit facilities, other long-term debt, and finance lease arrangements, as applicable (see Liquidity and Capital Resources — Description of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements in Item 7 of Part II of this Form 10-K). The table below summarizes our capital expenditures for the years ended December 31, 2022 and 2021, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2022 2021 IT hardware and software $ 15,145 ​ $ 7,047 Greenfield and acquired dealership locations ​ 66,353 ​ ​ 47,315 Existing retail locations ​ 71,336 ​ ​ 64,141 Corporate and other ​ 2,092 ​ ​ 154 Total capital expenditures $ 154,926 ​ $ 118,657 ​ Our capital expenditures consist primarily of investing in acquired and greenfield retail and RV dealership locations, existing retail locations, information technology, hardware and software. The expected capital expenditures relating to new dealerships and real estate purchases for the year ending December 31, 2023 are discussed above. As of December 31, 2022, we had entered into contracts for construction of new dealership buildings for an aggregate future commitment of $8.8 million. There were no other material commitments for capital expenditure. Net cash used in investing activities was $422.5 million for the year ended December 31, 2022. The $422.5 million of cash used in investing activities was comprised of $154.9 million of capital expenditures primarily related to retail locations, $217.0 million for the purchase of RV and outdoor retail businesses and a publication business, $55.7 million for the purchase of real property, $3.0 million for purchase of other investments, and $0.9 million for the purchase of intangible assets, partially offset by proceeds from the sale of real property of $7.4 million and proceeds of $1.6 million from the sale of property and equipment. See Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Net cash used in investing activities was $355.8 million for the year ended December 31, 2021. The $355.8 million of cash used in investing activities was comprised of $129.2 million for the purchase of real property, $118.7 million of capital expenditures primarily related to retail locations, $100.1 million for purchases of RV and outdoor retail businesses, $8.0 million for purchases of other investments and $5.7 million for purchases of intangible assets, partially offset by proceeds of $3.6 million from the sale of real property, and $2.2 million from the sale of property and equipment. See Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Financing activities. Our financing activities primarily consist of proceeds from the issuance of debt and the repayment of principal and debt issuance costs. 77 Table of Contents Our net cash provided by financing activities was $ 95.6 million for the year ended December 3 1 , 2022. The $ 95.6 million of cash provided by financing activities was primarily due to $ 314.1 million of net proceeds from borrowings under the Floor Plan Facility (as defined below), $127.8 million of proceeds from long-term debt under our Real Estate Facilities (as defined below), $28.0 million of proceeds from a sale-leaseback arrangement, $6.0 million of proceeds from landlord funded construction on finance leases, and $0.5 million of proceeds from exercise of stock options, partially offset by $163.0 million of member distributions, $105.4 million of dividends paid on Class A common stock, $79.8 million for the repurchase of Class A common stock, $ 12.3 million of payments on long-term debt, $ 11.1 million of withholding taxes paid upon the vesting of restricted stock units (“RSUs”), $6.0 million for finance lease payments, and $3.2 million of debt issuance costs. Our net cash provided by financing activities was $ 303.0 million for the year ended December 31, 2021 . The $ 303.0 million of cash provided by financing activities was primarily due to $ 487.9 million of net proceeds from borrowings under the Floor Plan Facility , $430.7 million of proceeds from long-term debt, and $4.1 million of proceeds from exercise of stock options, partially offset by $193.7 million of member distributions, $177.9 million of payments on long-term debt, $156.3 million for the repurchase of Class A common stock, $67.2 million of dividends paid on Class A common stock, $12.1 million of withholding taxes paid upon vesting of RSUs, $7.7 million stock award shares withheld for tax, $2.9 million for finance lease payments, and $1.9 million of debt issuance costs. Description of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements As of December 31, 202 2 and 202 1 , we had outstanding debt in the form of our Senior Secured Credit Facilit ies (as defined below), our Floor Plan Facility (as defined below), our Real Estate Facilities (as defined below), other long-term debt , and finance lease obligations . We may from time to time seek to refinance, retire or exchange our outstanding debt. Such refinancings, repayments or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. For additional information regarding our interest rate risk and interest rate hedging instruments, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of this Form 10-K. The following table shows a summary of the outstanding balances, current portion, and remaining available borrowings under our credit facilities , other long-term debt and finance lease arrangements at December 31, 2022 : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ Remaining ​ (In thousands) Outstanding Portion Available Floor Plan Facility: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notes payable - floor plan ​ $ 1,319,941 ​ $ 1,319,941 ​ $ 85,082 (1) ​ Revolving line of credit ​ ​ 20,885 ​ ​ — ​ ​ 49,115 (2) ​ Senior Secured Credit Facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loan Facility ​ ​ 1,360,454 ​ ​ 14,015 ​ ​ — ​ Revolving Credit Facility ​ ​ — ​ ​ — ​ ​ 60,070 (3) ​ Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Real Estate Facilities ​ ​ 145,911 ​ ​ 11,090 ​ ​ 122,134 (4) ​ Other long-term debt ​ ​ 3,280 ​ ​ 124 ​ ​ — ​ Finance lease obligations ​ ​ 104,460 ​ ​ 10,244 ​ ​ — ​ ​ ​ $ 2,954,931 ​ $ 1,355,414 ​ $ 316,401 ​ ​ (1) The unencumbered borrowing capacity for the Floor Plan Facility represents the additional borrowing capacity less any accounts payable for sold inventory and less any purchase commitments. Additional borrowings are subject to the vehicle collateral requirements under the Floor Plan Facility. (2) The revolving line of credit borrowings are subject to a borrowing base calculation but were not limited as of December 31, 2022 . (3) The Revolving Credit Facility remaining available balance was reduced by outstanding undrawn letters of credit. The Credit Agreement requires compliance with a Total Net Leverage Ratio covenant when borrowings on the Revolving Credit Facility (excluding certain amounts relating to letters of credit) is over a 35%, or $22.8 million, threshold. (4) Additional borrowings on the Real Estate Facilities are subject to a debt service coverage ratio covenant and to the property collateral requirements under the Real Estate Facilities. 78 Table of Contents Floor Plan Facility As of December 31, 2022 and 2021, FreedomRoads, LLC (“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 our 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. Under the Floor Plan Facility, revolving line of credit borrowings bear interest at a rate per annum equal to, at our option, either: (a) a floating BSBY rate, plus 2.25%, in the case of floating BSBY rate loans, or (b) a base rate determined by reference to the greatest of: (i) the federal funds rate plus 0.50%, (ii) the prime rate published by Bank of America, N.A. and (iii) the floating BSBY rate plus 1.75%, plus 0.75%, in the case of base rate loans. Additionally, under the 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 us 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 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, we experience a reduction in floor plan interest expense in our 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 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. We have determined that the credit agreements governing the Floor Plan Facility include subjective acceleration clauses, which could impact debt classification. We believe 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, 2022 and 2021. See Note 4 – Inventories and Floor Plan Payables to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Senior Secured Credit Facilities 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”). 79 Table of Contents 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. Additionally, we are 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 we do not expect an additional excess cash flow payment to be required relating to 2023. Under the Senior Secured Credit Facilities, we have 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). We 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. The Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of our 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, we have determined that the Senior Secured Credit Facilities include subjective acceleration clauses, which could impact debt classification. We believe 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, we were not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 35% threshold and it did not limit our borrowing capacity. We were in compliance with all applicable debt covenants at December 31, 2022 and 2021. See Note 9 – Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. 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, based on applicable rates as of December 31, 2022, of either (as defined in the credit agreement for the M&T Real Estate Facility): (a) the Secured Overnight Financing Rate (“SOFR”) plus 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 covenant to comply with a minimum debt service coverage ratio of greater than 1.10 to 1.00. 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. 80 Table of Contents 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 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 ​ ​ Principal ​ Remaining ​ Wtd. Average (In thousands) Outstanding (1) Available (2) Interest Rate Real Estate Facilities ​ ​ ​ ​ ​ ​ ​ ​ ​ M&T Real Estate Facility ​ $ 124,655 ​ $ 122,134 (3) ​ ​ 6.39% First CIBC Real Estate Facility ​ ​ 3,934 ​ ​ — ​ ​ 6.39% Second CIBC Real Estate Facility ​ ​ 7,779 ​ ​ — ​ ​ 6.39% Third CIBC Real Estate Facility ​ ​ 9,543 ​ ​ — ​ ​ 6.14% ​ ​ $ 145,911 ​ $ 122,134 ​ ​ ​ ​ (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 the property collateral requirements under the M&T Real Estate Facility We determined that the credit agreements governing the Real Estate Facilities include subjective acceleration clauses, which could impact debt classification. We believe 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. We were in compliance with all debt covenants at December 31, 2022 and 2021. See Note 9 – Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Other Long-Term Debt Other long-term debt is comprised of a mortgage on a property, which matures in December 2026. See Note 9 – Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Finance Lease Obligation From time to time, we enter into finance leases typically for real estate and/or information technology equipment. See Note 10 – Leases to our consolidated financial statements included in Part II, Item 8 of this Form 10-K Sale/Leaseback Arrangements We have in the past and may in the future enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property and/or leasehold 81 Table of Contents improvements to third parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds which vary from period to period. 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, we entered into three separate twenty-year lease agreements, whereby we 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. We recorded a liability for the amount received, will continue to depreciate the non-land portion of the assets, and have imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease terms. The financial liability is included in other long-term liabilities in the consolidated balance sheet as of December 31, 2022. Deferred Revenue Deferred revenue consists of sales for products and services not yet recognized as revenue at the end of a given period. Our deferred revenue as of December 31, 2022 was $165.9 million. Deferred revenue is expected to be recognized as revenue as set forth in the following table (in thousands): ​ ​ ​ ​ ​ As of ​ December 31, 2022 2023 $ 95,695 2024 ​ ​ 32,630 2025 ​ ​ 17,766 2026 ​ ​ 9,549 2027 ​ ​ 4,554 Thereafter ​ ​ 5,748 Total ​ $ 165,942 ​ ​ ​ ​ Recent Accounting Pronouncements See discussion of recently adopted and recently issued accounting pronouncements in Note 1 — Summary of Significant Accounting Policies to our consolidated financial statements in Part II, Item 8 of this Form 10-K. Critical Accounting Estimates We prepare our consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us 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. Actual results could differ from those estimates. We base our estimates on historical experience, outside advice from parties believed to be experts in such matters, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. Our significant accounting policies can be found in Note 1 — Summary of Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. Revenue Recognition — Finance and Insurance Chargebacks The proceeds the Company receives for arranging financing contracts, and selling insurance and service contracts, are subject to chargebacks if the customer terminates the respective contract earlier than a stated period. In the case of insurance and service contracts, the stated period typically extends from one to seven years with the refundable commission balance declining over the contract term. 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 82 Table of Contents leveraging our historical experience using data extending back to 2013, 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. If cancellation rates on products sold during 2022 and 2021 were to increase by 100 basis points, our chargeback liabilities would have increased by $5.9 million as of December 31, 2022. Long-Lived Assets — Impairment Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Our long-lived asset groups exist predominantly at the individual location level and the associated impairment analysis involves the comparison of an asset group’s estimated future undiscounted cash flows over its remaining useful life to its respective carrying value, which primarily includes furniture, equipment, leasehold improvements, and operating lease assets. For long-lived asset groups identified with carrying values not recoverable by future undiscounted cash flows, impairment charges are recognized to the extent the sum of the discounted future cash flows from the use of the asset group is less than the carrying value. The impairment charge is allocated to the individual long-lived assets within an asset group; however, an individual long-lived asset is not impaired below its individual fair value, if readily determinable. The measurement of any impairment loss includes estimation of the fair value of the asset group’s respective operating lease assets, which includes estimates of market rental rates based on comparable lease transactions. For the years ended December 31, 2022, 2021, and 2020, we recorded long-lived asset impairment of $4.2 million, $3.0 million, and $12.4 million, respectively (see Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). Inventories — Products, Parts, Accessories and Other In assessing lower of cost or net realizable value for products, parts, accessories and other inventories, we typically consider (i) the aging of the inventory item, (ii) historical sales experience of the inventory item, and (iii) current market conditions and trends for the inventory item. We also review and consider the following metrics related to sales of inventory items (both on a recent and longer-term historical basis): (i) days of supply in our inventory, and (ii) average selling price if sold at less than original cost. We then determine the appropriate level of reserve required to reduce our inventory to the lower of cost or net realizable value and record the resulting adjustment in the period in which we determine a loss has occurred. If future demand or market conditions for our products are less favorable than forecasted or if unforeseen circumstances negatively impact the utility of inventory, we may be required to record additional write-downs, which would negatively affect the results of operations in the period when the write-downs are recorded. For the years ended December 31, 2021 and 2020, we recorded incremental inventory reserve charges of $15.0 million and $0.5 million, respectively relating to our 2019 Strategic Shift (see Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). Deferred Tax Assets and Tax Receivable Agreement Liability — Valuation When Continuing Equity Owners redeemed common units in CWGS, LLC for Class A common stock, CWH received an equal number of common units to the quantity of shares of Class A common stock issued to the Continuing Equity Owners. When CWH acquired this additional ownership in CWGS, LLC in the form of common units, it received a significant step-up in outside tax basis on the underlying assets held by CWGS, LLC. The step-up was principally equivalent to the difference between (1) the fair value of the underlying assets on the date of the redemption and (2) the tax basis in the underlying assets, multiplied by the percentage of common units acquired. The majority of the step-up in basis was related to intangible assets, primarily goodwill, and is included within deferred tax assets on our consolidated balance sheets. The computation of the step-up required valuations of the intangible assets of CWGS, LLC and has the same complexities and estimates as our purchase accounting on acquisitions (see Note 15 – Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K). In addition, the step-up is governed by complex IRS rules that limit which class and amount of step-up is deductible. Given the magnitude of the deferred tax assets and complexity of the calculations, small adjustments to our model used to calculate these deferred tax assets can result in material changes to the amounts recognized, especially in years that include redemptions by Continuing Equity Owners. If more common units of CWGS, LLC are redeemed by Continuing Equity Owners, the percentage of 83 Table of Contents CWH’s ownership of CWGS, LLC will increase, and additional deferred tax assets will be created as additional tax basis step-ups occur and such amounts are likely to be material. Pursuant to the Tax Receivable Agreement, CWH makes annual payments to the Original Equity Owners that had previously redeemed common units in CWGS, LLC equivalent to 85% of any tax benefits CWH realizes on each year’s tax return from the additional tax deductions arising from the step-up in tax basis. A Tax Receivable Agreement liability of $170.6 million existed as of December 31, 2022 for the future cash obligations expected to be paid under the Tax Receivable Agreement and was not discounted. The calculation of this liability is a function of the step-up described above and, therefore, has the same complexities and estimates. Similar to the deferred tax assets, these liabilities would likely increase materially if Continuing Equity Owners redeem additional common units of CWGS, LLC. As of December 31, 2022, if there was a 100 basis point increase or decrease in the estimated income tax rate, the Tax Receivable Agreement liability would increase or decrease by $6.7 million, respectively.